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The following is an excerpt from a 10-K SEC Filing, filed by CENTRAL SPRINKLER CORP on 1/29/1999.
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CENTRAL SPRINKLER CORP - 10-K - 19990129 - EXHIBIT_10
IRREVOCABLE DEED OF TRUST

Made this 2nd day of November, 1998.

CENTRAL SPRINKLER CORP., a Pennsylvania corporation, with offices at 451 North Cannon Avenue, Lansdale, Pa., 19446, and CENTRAL SPRINKLER CO., a Pennsylvania corporation with offices at 451 North Cannon Avenue, Lansdale, Pa., 19446 (hereinafter collectively and individually referred to as "CENTRAL") as Settlors, and MELLON BANK N.A., a national banking association authorized and engaged in the trust business in the Commonwealth of Pennsylvania, as the Trustee, hereby agree as follows:

FIRST: BACKGROUND

(A) CENTRAL and the Staff of the United States Consumer Product Safety Commission ("Staff") have entered into a Consent Agreement dated October 2, 1998, and filed at CPSC Docket No. 98-2 (hereinafter called the "Consent Agreement"), to resolve the matters set forth in the Administrative Complaint filed on March 3, 1998 by the United States Consumer Product Safety Commission
(hereinafter called the "Commission")

(B) By Order dated October 13, 1998 (hereinafter called the "Order"), the Commission accepted said Consent Agreement and imposed certain conditions and obligations on CENTRAL.

(C) On October 2, 1998, Central and plaintiffs representing a nationwide class of owners/operators of buildings containing Omega sprinklers entered into a parallel Settlement Agreement resolving the claims of the settlement class members against CENTRAL arising out of alleged defects in the Omega sprinklers, in the litigation styled Hart v. Central Sprinkler Corp., et al.


Case No. BC17627, Los Angeles County, California Superior Court, ("Class Action Settlement Agreement"). Such Class Action Settlement Agreement is subject to an approval process as defined by law. Said approval process has not been completed.

(D) The Consent Agreement, the Order and the Class Action Settlement Agreement provide, inter alia for the creation of a trust, the Income and principal of which are required to be used for the purposes of providing reimbursement to owners of Omega sprinklers toward labor costs of removing and replacing those sprinklers, as set forth in said Consent Agreement, the Order and the Class Action Settlement Agreement.

(E) In the event of any inconsistency between any term, provision or the intent of the final Class Action Settlement Agreement and/or any order relating thereto, on the one hand, and any term, provision or the intent of the Consent Agreement and/or the Order, on the other hand, the Consent Agreement and/or the Order shall control for all purposes under this Trust.

SECOND: CREATION OF THE TRUST. CENTRAL hereby transfers and delivers to the Trustee the property lined on Schedule "A" attached hereto and CENTRAL shall make future contributions hereto in accordance with Appendix C of the Order. The Trustee shall hold said property as provided in the Consent Agreement, the Order and the Class Action Settlement Agreement, as a trust estate, and shall invest and reinvest the same and shall distribute the net income (hereinafter called "Income") and principal as set forth in the following provisions:

2

(A) During the term of this Trust, the Trustee shall distribute Income, and to the extent that Income is exhausted, principal, to those persons entitled thereto pursuant to the terms and conditions of the Consent Agreement, the Order and the Class Action Settlement Agreement, as certified, in writing, to the Trustee by CENTRAL's Board of Directors or the designee of CENTRAL's Board of Directors. The Trustee shall be entitled to rely upon the written certification of CENTRAL as to the persons entitled to distributions of the Income and principal of this Trust as being in full accord with the Consent Agreement, the Order and the Class Action Settlement Agreement.

(B) Promptly upon receiving such written certification of CENTRAL as to the persons entitled to distributions of the Income and principal of this Trust, the Trustee shall forward a copy thereof by overnight delivery to the Staff. Unless the Trustee actually receives the Staff's objections to such written certification of CENTRAL within fourteen (14) calendar days of the Trustee's having dispatched the same to the Staff, the Trustee shall promptly make distribution of Income and/or principal in accordance with said written certification of CENTRAL, without any further liability on the part of the Trustee as to the proper persons to receive such distributions. In the event that the Trustee receives objections by the Staff to CENTRAL's written certification within said fourteen (14) day period, the Trustee shall not make any distribution pursuant to said written certification from CENTRAL until the Trustee receives instructions relative to the same by way of a final, non-appealable decision of the Commission.

3

THIRD: TRUST POWERS AND ADMINISTRATIVE PROVISIONS

(A) The Trustee shall have the following powers in addition to, and not as a modification of, all common law and statutory powers, all of which shall be exercised in a fiduciary capacity:

(1) To hold and retain any of the property coming into the Trustee's possession hereunder. The Trustee shall not be obligated or permitted to accept any asset other than cash.

(2) To invest in currency, bonds, notes, real estate, mortgages and other "Legal investments" as set forth in Section 7302 of the Probate, Estates and Fiduciaries Code (20 Pa. CSA Section 7302, et seq.) except that the Trustee shall not be authorized to invest in stocks as defined in Section 7310 of the said Pennsylvania Probate, Estates and Fiduciaries Code (20 Pa. CSA Section 7310) or real estate as defined in Section 7311 of the said Pennsylvania Probate, Estates and Fiduciaries Code (20 Pa. CSA Section 7311). In no event shall the Trustee be authorized or required to make any investment in any securities issued by either of the Settlors or any subsidiary of the Settlors.

(3) To sell, at public or private sale, and to otherwise transfer or assign any property at any time included in the Trust, upon such terms and conditions as the Trustee shall deem wise.

(4) To cause any security or other property of the Trust to be issued, held or registered in the name of a nominee or in such form that title will pass by delivery.


(5) To exercise any conversion privilege or subscription right of owners of any security in the Trust

(6) To carry, at the expense of the Trust, insurance of such kinds and in such amounts necessary and appropriate to protect the Trust from any casualty or liability.

(7) To defend litigation with respect to the Trust or any Trust property at the expense of the Trust. To the extent that such litigation is brought against the Trust as a result of any action on the part of the Trustee, the Trustee shall reimburse the Trust for all expenses incurred by the Trust in the defense of such litigation. Nothing set forth herein is intended to affect any liability that the Trustee may or may not have to the Trust arising out of the Trustee's actions or the Trustee's failure to act.

(8) To allocate receipts and disbursements between principal or income.

(9) With the consent of the Staff, to employ and confer with Schneider Downs and Company, C.P.A.'s, or such other organization selected by the Trustee, for the provision of clerical services in the preparation and distribution of proceeds checks to the intended beneficiaries of this Trust, and to pay the reasonable value of such services to Schneider Downs and Company, C.P.A.'s, or such other organization selected by the Trustee to perform such clerical services, in accordance with the fee schedule marked Exhibit "A" , attached hereto and made a part hereof.

(10) To create reserves out of income, as the Trustee deems advisable, for the prompt payment of taxes and other obligations and to restore to Income the unused portion of such reserves.


(11) To resign by giving written notice of the Trustee's resignation to the Staff. Such resignation shall be effective on the date that the Trust assets are transferred to the successor trustee. Upon the tender of such resignation, it shall be the obligation and privilege of the Staff to select a successor trustee or trustees to serve hereunder. In case of the merger or consolidation of the Trustee, the resultant company shall become successor Trustee hereunder after notice to the Staff and CENTRAL.

(B) At any time, the Staff shall have the right to remove the Trustee for cause or for no cause at all. Such removal shall be effective upon the Trustee having received written notice of its termination. Upon issuing notice of removal to the Trustee, the Staff shall have the obligation and privilege to select a successor Trustee or Trustees to serve hereunder. Nothing set forth herein shall impair the right of the Trustee to make claims to the successor trustee (with copy to the Staff) for all fees the Trustee reasonably feels to be due to it as having been earned up to the date of termination. Further, the successor trustee shall immediately reimburse the Trustee for all expenses for which it is obligated to Schneider Downs and Company CPA's, or to the other organization chosen by the Trustee to perform the clerical services referenced above, up and to the effective date of the Trustee's termination as Trustee hereunder.

(C) The Trustee shall be exempt from giving any bond or other security in any jurisdiction.

(D) The Trustee shall be entitled to receive any compensation for its services hereunder in accordance with the schedule attached hereto as Exhibit "B." Such compensation shall be


charged wholly against Income. To the extent that the Income is insufficient to pay the compensation due to the Trustee, the Trustee is authorized, in the Trustee's sole discretion, to invade principal to satisfy the Trust's fee obligations to the Trustee. In no event shall CENTRAL be responsible for paying my compensation to the Trustee.

FOURTH: SPENDTHRIFT CLAUSE. The right of any beneficiary hereunder shall not be subject to assignment, alienation, pledge, attachment or claims of creditors until after payment has actually been made by the Trustee as herein provided.

FIFTH: TERM. This Trust shall terminate as provided in the Consent Agreement and the Order. Upon termination of this Trust, all Income and principal then remaining in the Trust Estate shall be distributed in accordance with the final distribution plan created pursuant to Appendix C of the Order. The Trustee shall have no discretion in the distribution of Income or principal from the Trust but, rather, shall act only as set forth in Article SECOND (A) and (B) of this Trust.

SIXTH: IRREVOCABILITY.

(A) CENTRAL acknowledges that it understands the nature of an irrevocable trust and specifically renounces all rights of amendment or revocation with respect to this Deed of Trust.

(B) CENTRAL may only add cash hereto.

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SEVENTH: GOVERNING LAW. This Agreement has been delivered to and accepted by the Trustee in the Commonwealth of Pennsylvania and shall be governed in all respects by the laws of said Commonwealth, without regard to its conflicts of laws provisions.

EIGHTH: REPORTS.
(A) The Trustee shall furnish to CENTRAL and to the Staff monthly statements of Income, principal, investments and disbursements.

(B) The Trustee shall timely file or shall deliver to CENTRAL such documents and other information as CENTRAL may reasonably require in order to permit it to timely file such income tax and other returns and statements as are reasonably required for CENTRAL to comply with applicable provisions of the Internal Revenue Code and of any applicable federal or state tax law or regulation promulgated thereunder.

NINTH SEVERABILITY. In any provision of this Trust is held to be illegal, invalid or unenforceable, under present or future laws effective during the term of this Trust, such provision shall be fully severable. Such determination shall in no way limit or affect the enforceability and operative effect of any and all other provisions of this Trust unless the severance of such illegal, invalid or unenforceable provision would, in the sole and absolute discretion of the Staff, cause the purposes of this Trust to fail. In the event that the Staff so determines that the severance of an illegal, invalid or unenforceable provision would operate to cause the purposes of this Trust to fail, the Staff, in its sole


discretion, shall devise an alternative means by which the funds payable under Appendix C of the Order will be distributed to the Trust beneficiaries.

TENTH: NOTICES. Any notices or communications required or permitted hereunder shall be in writing and delivered by telex or telecopy pursuant to the instructions listed below, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows, or to such other address or addresses as may hereafter be furnished by the parties listed below to each other in compliance with the terms hereof:

To the Trustee:         Mellon Bank, N.A.
                        ATTN: Mr. Erich C. Smith
                        One Mellon Bank Center, Suite 3810
                        Pittsburgh, PA 15258-0001

                        Telephone: (412) 234-5033
                        Fax: (412) 234-0112


To CENTRAL:             Central Sprinkler Corp.
                        ATTN: Mr. E. Talbot Briddell
                        451 North Cannon Avenue
                        Lansdale, PA 19446

                        Telephone: (215) 362-0700
                        Fax: (215) 365-5385

With copy to:           Morgan, Lewis & Bockius, LLP
                        ATTN: J. Gordon Cooney, Jr., Esquire
                        2000 One Logaqn Square
                        Philadelphia, PA 19103-6993

                        Telephone: (215) 963-5000
                        Fax: (215) 963-5299

                                        9

To the Commission:      U.S. Consumer Product Safety Commission
                        ATTN. Eric L Stone, Esquire
                        Office Of Compliance/Legal Division
                        Washington, DC 20207-0001

                        Telephone: (301) 504-0626 Ext. 1350
                        Fax: (301) 504-0359

All such notices and communications shall be effective when delivered at the designated addresses or when the telex/telecopy communications received at the designated addresses are confirmed by the recipient by return telex or telecopy in conformity with the provisions hereof.

ELEVENTH: ENTIRE AGREEMENT. The entire agreement of the parties relating to the subject matter of this Trust is contained herein, and this Trust supersedes any prior oral or written agreements between CENTRAL and the Trustee concerning the subject matter hereof. No failure to exercise or delay in exercising any right, power or privilege hereunder shall operate as a waiver hereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any further exercise thereof, nor shall single or partial exercise of any right, power or privilege hereunder preclude any further exercise thereof or of any other right, power or privilege.

TWELFTH: HEADINGS. The headings used in this Trust as inserted for convenience only and neither constitute a portion of this Trust nor in any manner affect the construction of the provisions of this Trust.

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THIRTEENTH: COUNTERPARTS. This Trust may be executed in any number of counterparts, each of which shall constitute an original, but such counterparts shall together constitute but one and the same instrument.

IN WITNESS WHEREOF, the parties have executed this Trust the day and year first above written.

ATTEST:                            CENTRAL SPRINKLER CORP.


By                                 By  XXXXXXXXXXXXXXXXX
  ----------------------------        ---------------------------

Title                              Title Chief Executive Officer
     -------------------------           ------------------------

ATTEST:                            CENTRAL SPRINKLER CORP.


By                                 By    Richard P. O'Leary
  ----------------------------       ----------------------------

Title                              Title Chief Operating Officer
     -------------------------           ------------------------


ATTEST:                            TRUSTEE:
                                   MELlON BANK, N.A.


By                                 By  XXXXXXXXXXXXXXXXXXX
  ----------------------------       ----------------------------

Title  Trust Officer               Title  Vice President
     -------------------------       -------------------------

11

EXHIBIT "A"

The fee schedule for the clerical services for the preparation and distribution of the proceeds checks by Schneider Downs & Co., Inc., is as follows:

* $60 per hour for the initial two-years, and

* $65 per hour for the following two years.

Any related out-of-pocket costs shall be in addition to the above hourly rates.

If any other organization is chosen to perform these clerical services, this schedule may be renegotiated as necessary.


EXHIBIT "B"

The Trustee shall be entitled to receive annual compensation for its services in accordance with its schedule in effect when the services are performed. Currently the fee schedule for fixed-income accounts is as follows but the Trustee reserves the right to change this schedule at any time.

Annual asset-based fee is determined by the following market value schedule:

o 0.65% of market value on the first $2 million,
o 0.55% of market value an the next $3 million, and
o 0.45% of market value on the balance.

Minimum annual fee: $13,000.


SCHEDULE A
TO
IRREVOCABLE DEED OF TRUST

(Initial Property to be Transferred into the Trust by CENTRAL)

$2,200,000 (Two Million, Two Hundred Thousand Dollars), the initial contribution by CENTRAL to the Trust pursuant to Appendix C, Paragraph la, of the United States Consumer Product Safety Commission Order dated October 13, 1998.

ACCEPTED AND APPROVED:                      ACCEPTED AND APPROVED:


    XXXXXXXXXXXX                                XXXXXXXXXXXXXXX
---------------------------                 -----------------------------
Central Sprinkler Co. and                   Mellon Bank, N.A., Trustee
Central Sprinkler Corp.


EXHIBIT 10(ad)

UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION


In the Matter of
CENTRAL SPRINKLER CORP.,
          and                           CPSC DOCKET NO. 98-2
CENTRAL SPRINKLER CO.,
     Respondents
---------------------------

CONSENT AGREEMENT

This Consent Agreement is made by and between the staff of the Consumer Product Safety Commission and Respondents, Central Sprinkler Corp. and Central Sprinkler Co., to settle the above-captioned administrative action. The parties agree as follows:

Parties

1. The "staff" is the staff of the United States Consumer Product Safety Commission ("CPSC" or "the Commission"), an independent regulatory agency of the United States, established by Congress pursuant to Section 4 of the Consumer Product Safety Act ("CPSA"), 15 U.S.C. Section 2053.

2. Respondents Central Sprinkler Corporation and Central Sprinkler Company (hereinafter collectively "Central") are corporations organized and

existing under the laws of

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.


the Commonwealth of Pennsylvania, with their principal place of business at 451 North Cannon Ave., Lansdale, PA 19446.

Subject Matter

3. From 1982 to July, 1998, Central manufactured and sold and/or distributed between 9 and 10 million "Omega" brand automatic fire sprinklers. On March 3, 1998, the staff of the Consumer Product Safety Commission filed an Administrative Complaint ("Complaint") against Central, seeking recall and replacement of Central's Omega fire sprinklers pursuant to 15 U.S.C. Section 2064. The Complaint alleges that Central's Omega sprinklers are defective and will not function in certain fire situations, creating a substantial risk of bodily injury and/or death.

4. To date, the staff has received reports that from 1990 to the present, Omega sprinklers did not function in 20 fires.

5. Central has filed an answer to the Complaint in which it avers, inter alia, that its Omega sprinklers are not defective within the meaning of 15 U.S.C. Section 2064.

6. The staff also contends that Central obtained information which reasonably supported the conclusion that Omega sprinklers contained a defect or defects that could create a substantial risk of injury to the public but failed to report such information in a timely manner pursuant to 15 U.S.C. Section 2064(b). Central denies any wrongdoing under 15 U.S.C. Section 2064(b).

                            Agreement of the Parties

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.

2

7. It is the express purpose of the parties in entering into this Agreement to protect the public safety by carrying out the recall and replacement of Omega sprinklers.

8. The parties intend for this Consent Agreement and the attached Order (hereinafter "Order" or "the Order"), which is hereby incorporated by reference, to resolve all allegations and requests for relief set forth in the Administrative Complaint in this proceeding and to bar the initiation or referral by the CPSC of any administrative, civil, or criminal claims within the CPSC's jurisdiction arising from the conduct of Central, its officers, directors and/or employees regarding Omega sprinklers. This resolution shall not apply to any actions arising from non-compliance with or disputes pertaining to this Agreement or the Order.

9. For purposes of this settlement only, Central admits that "Omega" fire sprinklers are "consumer products" under Section 3 of the CPSA, 15 U.S.C.
Section 2052, subject to the jurisdiction of the Consumer Product Safety Commission.

10. For purposes of this settlement only, Central agrees not to contest the allegations in the Complaint that "Omega" fire sprinklers contain a "defect which creates a substantial product hazard," as those terms are defined in
Section 15(a) of the CPSA, 15 U.S.C Section 2064(a). Central has agreed not to contest these allegations in order to avoid the expense, inconvenience and risks associated with further litigation, and the parties recognize that this resolution and this Consent Agreement may not be used or introduced as evidence of defect or hazard against Central in other litigation not involving the Commission or its staff. Entry of the Order will neither impair nor assist the bringing of any other action.

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.

3

11. As Part of the amounts referenced in 1.a and 1.b of Appendix C of the Order, Central shall deposit, without any adjudication or admission of fact of law, $1.3 million into the Trust established in Appendix C of the Order, in settlement of the staff's contention that Central failed to report to the Commission problems with the Omega pursuant to 15 U.S.C. Section 2064(b). Central has agreed to do so solely to avoid the inconvenience and burden of litigation of this issue.

12. Upon acceptance by the Consumer Product Safety Commission of this Consent Agreement, and entry of the Order, Central knowingly, voluntarily and completely waives and relinquishes any past, present and/or future right or rights in this matter: (1) to an administrative or judicial hearing and to all further procedural steps, including findings of fact, conclusions of law and/or further determination of whether Omega sprinklers contain a defect which creates a substantial product hazard within the meaning of Section 15 of the CPSA; (2) to seek judicial review or otherwise contest the validity of this Consent Agreement and/or Order as issued and entered, and (3) to seek judicial review of this or any past orders, findings and/or determinations of the Commission or the Presiding Officer in this matter, except as set forth in the provisions regarding review in Paragraph 28 of this Agreement.

13. Central agrees to fulfill all requirements of the Order.

14. Central agrees to immediately cease and desist manufacturing, selling, distributing, marketing, exporting, importing, and/or attempting to distribute or sell any

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.
                                       4


Omega sprinkler, whether by itself or through its subsidiaries. affiliates, Central-owned distribution centers, or any other persons or entities over whom Central has control, whether in the United States or any other foreign state, country, or territory.

15. Central shall request that Underwriters Laboratories, Inc. withdraw its listing of approval for all Omega sprinklers.

16. Central shall provide the staff with thirty days written notice of any transfer of property rights it holds in the following U.S. Patents:
4,465,141; 4,491,182; 4,508,175; 4,553,602; 5,094,298; 4,619,327; 3,734,191, 3,802,510; 3,877,527, 3,911,940; 3,991,829, and 4,359,098.

17. A violation of this Consent Agreement or the Order is a prohibited act within the meaning of Section 19 of the CPSA, 15 U.S.C. Section 2068.

18. The Commission or Central may disclose terms of this Consent Agreement and Order to the public.

19. This Consent Agreement shall take effect upon its final acceptance by the Consumer Product Safety Commission.

20. This Consent Agreement and Order shall be binding upon the parties hereto and their successors, assigns, and receivers. If, prior to the termination of this Consent Agreement and Order, Central merges with any other corporation or sells, assigns, or otherwise transfers substantially all of its assets, Central shall provide reasonable prior notice to the surviving corporation or, in the case of an asset sale, assignment, or transfer, the

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.

5

purchaser, transferee, or assignee of substantially all of Central's assets, of this Consent Agreement and Order, and of its binding effect upon said surviving corporation, purchaser, assignee, or transferee. The existence of this Consent Agreement and Order and their binding effect shall be noted in any agreement between Central and such surviving corporation, purchaser, transferee, or assignee. It shall be a condition of any such merger, sale, assignment, or transfer that the surviving corporation or, in the case of an asset sale, the purchaser, assignee; or transferee, execute a document agreeing to be bound by the provisions of this Consent Agreement and Order and to submit to the jurisdiction of the Commission for purposes of enforcement of this Consent Agreement and Order. In the event of any merger or sale, transfer, or assignment of substantially all of Central's assets, notice shall be provided to the staff no later than 15 days prior to any such merger or asset sale, transfer, or assignment.

21. This Consent Agreement and Order have been negotiated by the parties. Central is not relying on the advice of the staff, nor anyone associated with the staff, as to legal, tax, or other consequences of any kind arising out of this Consent Agreement and Order, and Central specifically assumes the risk of all such legal, tax and other consequences.

22. For all purposes, this Consent Agreement and Order shall constitute an enforceable judgment obtained in an action or proceeding by a governmental unit to enforce its police or regulatory power. Central acknowledges and agrees that this Agreement and Order are pursuant to the Commission's police or regulatory power to remedy the risk

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.

6

created by and protect the public from a substantial product hazard which the Commission believes is presented by Omega sprinklers, and that the Agreement and Order are not subject to an automatic stay if Central becomes the subject of a bankruptcy proceeding.

23. If all of the Replacement Sprinklers are not listed or approved by Underwriters' Laboratories Inc. ("UL") and all of the exclusively non-residential Replacement Sprinklers are not listed or approved by Factory Mutual Research Corporation ("FMRC") by November 1, 1998, or if the listing or approval of any of the Replacement Sprinklers by UL or FMRC is withdrawn, discontinued or modified at any time, for any reason whatsoever, the Commission, at its sole discretion and upon reasonable notice to Central, may void, suspend, or rescind all or any part of this Consent Agreement and Order.

24. The Commission at its sole discretion and upon reasonable notice to Central, may void, suspend, or rescind all or any part of this Consent Agreement and Order if Central has made material misrepresentations regarding its current financial condition, manufacturing and shipping costs for Replacement Sprinklers and Replacement Parts, the number of Omega sprinklers remaining to be remediated (approximately 8.4 million), and/or the projected costs of administering the recall and replacement program in this Agreement and Order, and the staff has relied on those misrepresentations in entering into this Agreement. Appendix D of the Order lists those documents containing representations deemed material by the parties.

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.

7

25. Beginning 3 months after the effective date of the Commission's Order, and for every 3 months thereafter until the expiration or final determination of the Claims as defined in Paragraph 1.c, of Appendix C of the Order, Central shall provide to the staff a full report on the progress and status of the Claims as defined in Paragraph 1.c of Appendix C of the Order, and the progress and status of the remediation program set forth in this Agreement and Order, including but not limited to the payments made to the Trust as defined in Appendix C of the Order, and the expenses paid and/or incurred for notice and administration of the remediation program set forth in this Agreement and Order. Central shall provide, with these reports, the daily timesheets, with descriptions of all work performed, of each Central employee involved in administration of the remediation program, for the time period since the last report date. At any time, upon reasonable written notice, the Commission may require Central to submit to an independent or Commission review and/or audit of the remediation program set forth in this Consent Agreement and Order, and/or any Claims as defined in Paragraph 1.c of Appendix C. Central shall provide the staff with a copy of every audit report of its financial condition within 5 business days of the date the report is prepared.

26. If, after the effective date hereof, any provision of this Consent Agreement and Order is held to be illegal, invalid, or unenforceable under present or future laws effective during the terms of this Consent Agreement and Order, such provision shall be fully severable. The rest of the Agreement and Order shall remain in full effect, unless the

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.

8

Commission determines that severing the provision materially impacts the remediation program set forth in this Agreement and Order.

27. Central acknowledges that this Consent Agreement and Order have been negotiated between unrelated, sophisticated and knowledgeable parties acting in their own self-interest and represented by counsel, and the provisions of this Consent Agreement and Order shall not be interpreted or construed against any person or entity because that person or entity or any of its attorneys or representatives drafter or participated in drafting this Consent Agreement.

28. The provisions of this Consent Agreement and Order shall be interpreted in a reasonable manner to effect its purpose to remedy the alleged hazard that Omegas pose. In the event of a dispute between the parties arising under this Consent Agreement and Order, the parties agree to submit the issue for determination by the Commission. Except as stated to the contrary in Paragraph 7 through 10 of Appendix C of the Order, Central shall have the right to seek judicial review of the Commission decision, such review to be based upon the record of any such Commission proceeding and according to law.

29. The existence of a dispute shall not excuse, toll, or suspend any obligation or deadline imposed upon Central under this Consent Agreement and Order.

30. This Consent Agreement and Order shall not be waived, changed, amended, modified, or otherwise altered, except in writing by the party or parties against

Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.
                                       9


whom such amendment, modification, alteration, or waiver is sought to be enforced, and approved by the Commission.

Dated: October 1, 1998

/s/  Eric xxxxxxxxxx                       /s/ J. Gordon Cooney, Jr.
---------------------------------------    -------------------------------------
Deborah S. Orlove, Esq.                    J. Gordon Cooney, Jr., Esq.
Eric H. Singer, Esq.                       Emily J. Lawrence, Esq.
Howard N. Tarnoff, Esq.                    MORGAN, LEWIS & BOCKIUS LLP
Complaint Counsel                          2000 One Logan Square
U.S. Consumer Product Safety Commission    Philadelphia, PA 19103
Office of Compliance                       (215) 963-5000
4330 East West Highway
Bethesda, MD 20814
(301) 504-0626

Of Counsel                                 Michael F. Healy, Esq.
Eric L. Stone                              MORGAN, LEWIS & BOCKIUS LLP
Director, Legal Division                   1800 M Street, NW
Alan H. Schoem                             Washington, DC 20036-5869
Assistant Executive Director               (202) 467-7000
Office of Compliance
                                           John C. Fenningham, Esq.
Complaint Counsel                          CORR, STEVENS & FENNINGHAM
                                           Five Neshaminy Interplex, Suite 315
                                           Trevose, PA 19053
                                           (215) 639-4070
                                           Counsel for Respondents

                                           /s/ E. Talbot Briddell
                                           -------------------------------------
                                           E. Talbot Briddell
                                           CEO, Central Sprinkler Corp. and
                                           Central Sprinkler Co.


Accepted and Approved:                  Accepted and Approved:

---------------------------             --------------------------------
CPSC Office of Compliance               Respondents Central Sprinkler Co.
                                           and Central Sprinkler Corp.

10

APPENDIX
A


Appendix A

Central Sprinkler Omega Notification Plan

Central's Efforts to Generate Editorial Coverage of Program - ongoing efforts by Buchanan and Associates

Local Print Advertising (Newspapers)

o Proposed notice is set out in Exhibit I

o Eighty-seven 3-column x 7.5" ads will appear in 79 newspapers in each of the 68 targeted counties (Exhibit 2). The newspaper coverage will include the Arizona Republic, Los Angeles Times, (2 x), San Francisco Chronicle, Denver Post, Washington Post, Atlanta Journal, Chicago Tribune (2x), New York Times, Philadelphia Inquirer (2x), and Dallas Morning News, as well as other papers noted in Exhibit 3. The notices will appear in the front section of the national news by November 1, 1998.

o Repeat notice - Central to place at least one ad in one local/regionalized paper in each of the 68 targeted counties on or around May 1, 1999. Such notice to only include information about the recall. This notice must be approved by CPSC staff.

Trade Publication Advertising

Paid Ads Using Exhibit I to be purchased for the following publications for the next available issue within 8 business days of CPSC press announcement

o Buildings Magazine

o Building Operating Management

1

o Commercial Property News

o National Real Estate Investor

o Journal of Property Management

o Facilities Design and Management

o Fire Protection Contractor (FPC)

o Sprinkler Age

o NFPA Journal

National Print Advertising

(Using Exhibit 1 and purchased for publication within 8 business days of CPSC press announcement)

o 2/5th page ad in Parade Magazine

o Digest size ad in USA Weekend

o Full-page ad in Reader's Digest

o Full page ad in seven local editions of TV Guide

2

Direct Notice Communications

o First class letter with appropriate outer signal words as attached hereto including the following documents in the following order: letter to consumers (Exhibit 4), Proof of Claim, Waiver and Release of Claims, Request for Exclusion, Verification Forms, product identification information, and long form class action notice. This notice will be mailed to the identified consumers set forth below within 8 business days of CPSC announcement (where applicable).

o All individuals who filed claims against Central Sprinkler for Omega Series Sprinklers.

o All individuals who called the toll free Central Sprinkler Omega information line regarding Omega Series Sprinklers.

o All individuals who call the 1-800 automated telephone number or write requesting the Class Notice or Recall as a result of seeing the published notice.

o Within 30 days of CPSC press announcement, subject to availability of mailing lists, mailing of first class letter, with appropriate outer signal words substantially in the form set out in the attached letter to AHJs (Exhibit 4) including Proof of Claim, Waiver and Release of Claims Form, Request for Exclusion, Verification Forms product identification information, and long term class notice to:

o Authorities having jurisdiction in counties with sprinkler laws, regulations or ordinances.

o Within 30 days of CPSC press announcement, subject to availability of mailing lists, mailing of first class letter, with appropriate outer signal words, in the form substantially set out in consumer letter and Proof of Claim, Waiver and Release of Claims, Verification Forms and product identification information to:

o Organizations identified through purchased mailing lists for:

3

Hospitals
Nursing and Convalescent Homes
Hotels & Motels
School Districts
Colleges & Universities
Approximately 14,334 U.S. members of the Building Owners and Managers Association (BOMA).

o Within 30 days of CPSC press announcement, subject to availability of mailing lists, mailing of first class letter, with appropriate outer signal words, substantially in the form set out in the attached letter to AHJs, with product identification information to:

Insurance-Homeowners
Insurance-Property & Casualty
Authorities Having Jurisdiction known to Central Sprinkler in counties without sprinkler laws, regulations or ordinances Distributors, Contractors, and End-users known to Central Sprinkler Member of American Fire Sprinkler Association, National Fire Sprinkler Association, and Home Inspectors Associations

o Within 30 days of CPSC press announcement, subject to availability of mailing lists, mailing of first class letter, with appropriate outer signal words, substantially in the form set out in the attached letter to AHJs, including Proof of Claim, Waiver and Release of Claims and Verification Forms, long form class notice and product identification information to the executive directors of:

National Association of Homebuilders Home Fire Sprinkler Coalition
Fire Marshals Association of North America Fire Sprinkler Education Foundation, Inc. International Association of Fire Chiefs National Fire Protection Association Operation Life Safety

4

Consumer Federation of America
Consumer Information Center
Consumer Union of United States
National Consumer League

o Written letter by first class mail to members of the American Waterworks Association in 68 targeted counties to provide notice of the corrective action either as part of water bills or consumer newsletters. CPSC to approve language for letter.

Computer Posting

o A public service announcement will be posted on appropriate legal, consumer, fire safety and related bulletin boards on Usenet News groups (Exhibit 5) and major online services (i.e., America Online, etc.) directed to professionals and consumers. In addition to any other contact information, the online PSA will include a link to the Central Omega program website.

o The notices of Recall and Settlement, Proof of Claim, Verification and Waiver and Release of Claims forms will be posted on the Omega website to provide access to the notice and other pertinent information. The website will be listed with major search engines.

o In addition, hyperlinks may be established with other websites, including CPSC's, related to fire safety, legal and construction-related issues to allow access to the class action and recall notice.

Telephone Support

1-800 REQUEST-LINE

All print advertising will direct the reader to call a 1-800 telephone number, to write to an address or to go to the website in order to receive the Notice of recall and settlement and related forms.

5

A 1-800 896-5685 interactive telephone number will be utilized. A pre-recorded message will welcome callers to the line. Callers will be directed through a series of steps that will allow the system to capture their names, mailing addresses and phone numbers.

Names and addresses will be downloaded and transcribed within 48 hours. Consumers will be mailed class action notice/recall package within 8 business days of consumer call until November 15, 1998 and thereafter within 5 business days.

1-800 OMEGA INFORMATION LINE

The Notice of recall and settlement will include Central Sprinkler's toll-free Omega information line. If potential Class Members have questions after reviewing the Notice of recall and settlement, they will be able to speak with a Central customer service representative. All customer service representatives will be trained by Central Sprinkler. A question and answer document incorporating a list of commonly asked questions is being drafted in advance so that customer service representatives will be prepared with scripted answers. The script will be updated periodically to include new information and answers to added questions. Central intends to dedicate 20 customer service representatives staggered throughout the operational period for the first 6 weeks from the date of the Notice of recall and settlement. The Omega information line will operate from 7:00 a.m. until 9:00 p.m. Monday through Friday for the first six weeks. Staffing for the Omega information line thereafter will be assessed after week 6.

Accepted and Approved:                         Accepted and Approved:


/s/                                            /s/
--------------------------                     ---------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                               and Central Sprinkler Corp.

6

EXHIBIT 1


IMPORTANT SAFETY RECALL
AND CLASS ACTION SETTLEMENT

FOR HOME OWNERS/BUILDING OWNERS WITH OMEGA BRAND

FIRE SPRINKLERS MANUFACTURED BY CENTRAL SPRINKLER CO.


Central Sprinkler Company ("Central") and the United States Consumer Product Safety Commission are announcing a settlement involving the recall and replacement of approximately 6.4 million Omega brand fire sprinklers manufactured since 1982 by Central. Plaintiffs in two suits representing a nationwide class have preliminarily settled their suits and are also announcing the suitability of a remedy. Omega fire sprinklers are installed in homes, offices, hospitals, schools and other buildings around the country.

OMEGA FIRE SPRINKLERS COULD LIKELY FAIL IN A FIRE, WHICH COULD RESULT IN BODILY INJURY OR DEATH.

IDENTIFYING SPRINKLERS

Numerous models of the Omega fire sprinklers are involved. On most models, consumers will be able to see one to three flat round metal disks attached one above the other with a small space between each disk. However, because it may be difficult to determine whether Omegas are installed, consumers are encouraged to call the toll free number below for product identification or contact their architect, builder, sprinkler contractor, plumber, homeowners' association or property manager to determine if Omegas are installed in their residence or facility.

Building owners and consumers are urged to take immediate action and call the Omega information line to learn more about the recall, how to identify Omega sprinklers, obtain a Proof of Claim form, and obtain further information about the settlement, including how to participate in the settlement and how the settlement may affect their legal rights.

SPRINKLER REPLACEMENTS

For consumers to get replacement sprinklers and any reimbursement towards installation costs, they must submit the Proof of Claim and Release Forms to Central postmarked by August 1, 1999. Consumers submitting Proof of Claim and Release Forms postmarked after August 1, 1999 but before November 1, 2001 all qualify to receive replacement sprinklers (though not reimbursement).

Until free replacement sprinklers are provided, consumers need to protect themselves against fire, have working smoke detectors and have adequate escape plans.

CLASS ACTION

If you are an owner or operator of a building that is or was equipped with Omega fire sprinklers, your legal rights may be affected by the proposed class action settlement which, if approved by the court, will result in the release of certain claims.

Complete information about your rights as a class member, the settlement approval process, how to exclude yourself from the settlement class, how to object or comment on the settlement, and how to make a claim for replacement sprinklers and costs, including important dates and deadlines, is available in the Full Notice of Settlement.


FOR FURTHER INFORMATION AND A COPY OF THE RECALL
AND FULL NOTICE OF CLASS ACTION SETTLEMENT,

CALL: 1-800-896-5685

OR WRITE: P.O. BOX 1555; FAIRMONT, MN 55021-1555

OR VISIT: http://www. xxxxxx.com/xxxx

PLEASE DO NOT CONTACT THE COURT.
DATED: March XX, 19xx COMMISSIONER BRUCE E. MITCHELL

The lawsuit and settlement are under consideration in Hail v. Carter Sprinkler Corp. No. SCI, 78727 (Cal. Super Ct).

It is pending before
Commissioner Bruce E. Mitchell in the Los Angeles County Superior Court.

CENTRAL SPRINKLER NOTICE PLAN
NEWSPAPERS ADVERTISING IN 68 TARGETED COUNTIES

--------------------------------------------------------------------------------------------------------------
STATE     CITY                          NEWSPAPER                       CIRCULATION               INSERTIONS
--------------------------------------------------------------------------------------------------------------
 AZ       Phoenix                       Arizona Republic, Gazette          581,337                     1
--------------------------------------------------------------------------------------------------------------
 CA       Los Angeles                   Times                            1,400,397                     2
--------------------------------------------------------------------------------------------------------------
 CA       San Francisco                 Chronicle, Examiner                639,719                     1
--------------------------------------------------------------------------------------------------------------
 CA       San Diego                     Union-Tribune                      452,980                     1
--------------------------------------------------------------------------------------------------------------
 CA       Orange County                 Register                           416,071                     1
--------------------------------------------------------------------------------------------------------------
 CA       Sacramento                    Bee                                350,345                     1
--------------------------------------------------------------------------------------------------------------
 CA       San Jose                      Mercury News                       347,275                     1
--------------------------------------------------------------------------------------------------------------
 CA       Los Angeles/Torrance          Daily Breeze                       218,427                     1
--------------------------------------------------------------------------------------------------------------
 CA       Los Angeles                   Daily News                         218,427                     1
--------------------------------------------------------------------------------------------------------------
 CA       Oakland                       Alameda-Oakland Metro Group        194,240                     1
--------------------------------------------------------------------------------------------------------------
 CA       Freemont-Newark               Argus                                 -                        1
--------------------------------------------------------------------------------------------------------------
 CA       Haywood                       Review                                -                        1
--------------------------------------------------------------------------------------------------------------
 CA       Plessanton                    Tri-Valley Herald                     -                        1
--------------------------------------------------------------------------------------------------------------
 CA       San Maleo                     County Times                          -                        1
--------------------------------------------------------------------------------------------------------------
 CA       Fresno                        Bee                                188,793                     1
--------------------------------------------------------------------------------------------------------------
 CA       Riverside                     Press-Enterprise                   173,533                     1
--------------------------------------------------------------------------------------------------------------
 CA       Los Angeles                   Press-Telegram                     128,106                     1
--------------------------------------------------------------------------------------------------------------
 CA       Walnut Creek                  Contra Costa Times Combo           106,140                     1
--------------------------------------------------------------------------------------------------------------
 CA       Antooh                        Ledger/Dispatch                       -                        1
--------------------------------------------------------------------------------------------------------------
 CA       Plessanton                    Valley Times                          -                        1
--------------------------------------------------------------------------------------------------------------
 CA       Richmond                      West County Times                     -                        1
--------------------------------------------------------------------------------------------------------------
 CA       Ventura County                Star                               103,069                     1
--------------------------------------------------------------------------------------------------------------
 CA       Santa Rosa                    Press Democrat                     102,745                     1
--------------------------------------------------------------------------------------------------------------
 CA       San Bernadino County          Sun                                 94,288                     1
--------------------------------------------------------------------------------------------------------------
 CA       Ontario-Inland Valley         Bulletin                            83,388                     1
--------------------------------------------------------------------------------------------------------------
 CA       Stockton                      Record                              82,144                     1
--------------------------------------------------------------------------------------------------------------
 CA       Santa Barbara                 News-Press                          51,421                     1
--------------------------------------------------------------------------------------------------------------
 CA       Palm Springs                  The Desert Sun                      50,725                     1
--------------------------------------------------------------------------------------------------------------
 CA       Marin County                  Independent Journal                 42,772                     1
--------------------------------------------------------------------------------------------------------------
 CA       Redding                       Record Searchlight                  39,667                     1
--------------------------------------------------------------------------------------------------------------

Kinsella Communications, Ltd.

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----------------------------------------------------------------------------------------------------------------
STATE     CITY                          NEWSPAPER                       CIRCULATION                 INSERTIONS
----------------------------------------------------------------------------------------------------------------
 CA       Monterey                      County Herald                       39,238                       2
----------------------------------------------------------------------------------------------------------------
 CA       San Luis Oblapo               Telegram - Tribune                  33,722                       1
----------------------------------------------------------------------------------------------------------------
 CA       Santa Cruz                    County Sentinel                     29,829                       1
----------------------------------------------------------------------------------------------------------------
 CA       Salnas                        Californian                         21,096                       2
----------------------------------------------------------------------------------------------------------------
 CA       Vallejo                       Times-Herald                        20,477                       1
----------------------------------------------------------------------------------------------------------------
 CA       Napa                          Napa Valley Register                19,639                       1
----------------------------------------------------------------------------------------------------------------
 CO       Denver                        Post                               456,237                       1
----------------------------------------------------------------------------------------------------------------
 CO       Denver                        Rocky Mountain News                422,601                       1
----------------------------------------------------------------------------------------------------------------
 CO       Fort Collins                  Coloradoan                          35,165                       1
----------------------------------------------------------------------------------------------------------------
 DC       Washington                    Post                             1,129,519                       1
----------------------------------------------------------------------------------------------------------------
 DE       Wilmington                    News Journal                       150,287                       1
----------------------------------------------------------------------------------------------------------------
 FL       Orlando                       Sentinel                           388,722                       1
----------------------------------------------------------------------------------------------------------------
 FL       Tampa                         Tribune                            350,539                       1
----------------------------------------------------------------------------------------------------------------
 FL       West Palm Beach               Post                               224,211                       1
----------------------------------------------------------------------------------------------------------------
 FL       Fort Myers                    News-Press                         103,367                       1
----------------------------------------------------------------------------------------------------------------
 FL       Naples                        News                                62,183                       1
----------------------------------------------------------------------------------------------------------------
 FL       Bradenton                     Herald                              49,545                       1
----------------------------------------------------------------------------------------------------------------
 GA       Atlanta                       Journal-Constitution               701,982                       1
----------------------------------------------------------------------------------------------------------------
 GA       Savannah                      News & Press                        77,070                       1
----------------------------------------------------------------------------------------------------------------
 GA       Lawrenceville                 Gwinnett Daily Post                 12,799                       1
----------------------------------------------------------------------------------------------------------------
 HI       Honolulu                      Advertiser & Star-Bulletin         193,318                       1
----------------------------------------------------------------------------------------------------------------
 IL       Chicago                       Tribune                          1,074,814                       2
----------------------------------------------------------------------------------------------------------------
 IL       Chicago                       Sun-Times                          466,116                       2
----------------------------------------------------------------------------------------------------------------
 IL       Chicago                       Daily Herald                       153,081                       2
----------------------------------------------------------------------------------------------------------------
 IL       Chicago                       Southtown                           65,167                       2
----------------------------------------------------------------------------------------------------------------
 MD       Baltimore                     Sun                                471,637                       1
----------------------------------------------------------------------------------------------------------------
 MD       Annapolis                     Capital                             83,507                       1
----------------------------------------------------------------------------------------------------------------
 NJ       Newton                        New Jersey Herald                   35,714                       1
----------------------------------------------------------------------------------------------------------------
 NY       New York City                 Times                            1,644,128                       1
----------------------------------------------------------------------------------------------------------------
 NY       White Plains                  Gannett Suburban Newspapers        185,843                       1
----------------------------------------------------------------------------------------------------------------
 NY       Poughkeepsie                  Journal                             58,126                       1
----------------------------------------------------------------------------------------------------------------
 OH       Cleveland                     Plain Dealer                       513,045                       1
----------------------------------------------------------------------------------------------------------------
 OH       Columbus                      Dispatch                           383,829                       1
----------------------------------------------------------------------------------------------------------------
 OH       Delaware                      Gazette                              8,038                       1
----------------------------------------------------------------------------------------------------------------

Kinsella Communications, Ltd.

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----------------------------------------------------------------------------------------------------------------
STATE     CITY                          NEWSPAPER                       CIRCULATION                 INSERTIONS
----------------------------------------------------------------------------------------------------------------
 PA       Philadelphia                  Inquirer                           901,891                       2
----------------------------------------------------------------------------------------------------------------
 PA       Pittsburgh                    Post Gazette                       424,431                       1
----------------------------------------------------------------------------------------------------------------
 PA       Philadelphia                  Greater Philadelphia Newspapers    173,421                       1
----------------------------------------------------------------------------------------------------------------
 PA       York                          Dispatch Record News                92,682                       1
----------------------------------------------------------------------------------------------------------------
 PA       Wilkse-Barre                  Times Leader                        67,763                       1
----------------------------------------------------------------------------------------------------------------
 PA       Chester                       Delaware County Times               50,127                       1
----------------------------------------------------------------------------------------------------------------
 PA       West Chester                  Local News                          32,920                       1
----------------------------------------------------------------------------------------------------------------
 PA       Wilkse-Barre                  Citizens' Voice                     29,476                       1
----------------------------------------------------------------------------------------------------------------
 TX       Dallas                        Morning News                       800,308                       1
----------------------------------------------------------------------------------------------------------------
 UT       Salt Lake City                Tribune & Deseret News             230,259                       1
----------------------------------------------------------------------------------------------------------------
 VA       Virginia Beach                Virginian-Pilot                    235,480                       1
----------------------------------------------------------------------------------------------------------------
 WA       Seattle                       Times/Post-Intelligencer           502,134                       1
----------------------------------------------------------------------------------------------------------------
 WA       Bellevue                      Eastside Journal                    48,284                       1
----------------------------------------------------------------------------------------------------------------
 WA       Port Angeles                  Peninsula News                      27,464                       1
----------------------------------------------------------------------------------------------------------------
 WI       Madison                       Capital Times                      161,562                       1
================================================================================================================
TOTALS                                  79 Newspapers                   19,488,570                      87

Kinsella Communications, Ltd.

Page 3

                                Central Sprinkler
                         Reach and Frequency by County

State          County                   Reach               Freq.
--------------------------------------------------------------------
 WA       Clallam                       99.9%               2.7
--------------------------------------------------------------------
 CA       Shasta                        99.7%               2.4
--------------------------------------------------------------------
 GA       Gwinnett                      99.7%               2.3
--------------------------------------------------------------------
 CA       Marin                         99.3%               3.0
--------------------------------------------------------------------
 CO       Adams                         99.3%               3.0
--------------------------------------------------------------------
 FL       Seminole                      99.2%               2.3
--------------------------------------------------------------------
 WI       Dane                          99.2%               2.1
--------------------------------------------------------------------
 CA       Sonorna                       99.1%               2.5
--------------------------------------------------------------------
 FL       Hillsbourgh                   99.1%               2.1
--------------------------------------------------------------------
 CA       Fresno                        99.1%               2.1
--------------------------------------------------------------------
 PA       Montgomery                    98.9%               3.0
--------------------------------------------------------------------
 CA       Yolo                          98.9%               1.9
--------------------------------------------------------------------
 TX       Dallas                        98.8%               2.1
--------------------------------------------------------------------
 CA       Orange                        98.7%               2.9
--------------------------------------------------------------------
 MD       Baltimore                     98.4%               2.1
--------------------------------------------------------------------
 CO       Larimer                       98.3%               2.8
--------------------------------------------------------------------
 WA       King                          98.3%               2.2
--------------------------------------------------------------------
 PA       York                          98.3%               2.1
--------------------------------------------------------------------
 CA       Sacramento                    98.3%               2.1
--------------------------------------------------------------------
 FL       Orange                        98.2%               2.0
--------------------------------------------------------------------
 HI       Honolulu                      98.0%               2.0
--------------------------------------------------------------------
 CA       Ventura                       97.9%               2.8
--------------------------------------------------------------------
 AZ       Maricopa                      97.4%               2.0
--------------------------------------------------------------------
 CA       Riverside                     97.3%               2.6
--------------------------------------------------------------------
 MD       Howard                        97.3%               2.2
--------------------------------------------------------------------
 MD       Montgomery                    97.2%               1.9
--------------------------------------------------------------------
 CA       Napa                          97.1%               2.6
--------------------------------------------------------------------
 VA       Fairfax                       97.1%               1.9
--------------------------------------------------------------------
 UT       Salt Lake                     96.9%               2.0
--------------------------------------------------------------------
 MD       Prince George's               96.9%               2.0
--------------------------------------------------------------------
 GA       Cobb                          98.8%               2.1
--------------------------------------------------------------------
 IL       Du Page                       96.7%               3.1
--------------------------------------------------------------------
 OH       Delaware                      96.7%               1.7
--------------------------------------------------------------------
 PA       Bucks                         96.5%               2.8
--------------------------------------------------------------------
 FL       Manatee                       95.2%               2.3
--------------------------------------------------------------------
 GA       Chatham                       96.2%               1.9
--------------------------------------------------------------------

Kinsella Communications, Ltd.

Page 1

State          County                   Reach               Freq.
--------------------------------------------------------------------
 CA       Contra Costra                 96.1%               2.4
--------------------------------------------------------------------
 VA       Virginia Beach                95.9%               1.9
--------------------------------------------------------------------
 CA       Santa Clara                   95.8%               1.9
--------------------------------------------------------------------
 PA       Delaware                      95.8%               2.7
--------------------------------------------------------------------
 CO       Boulder                       95.2%               2.4
--------------------------------------------------------------------
 PA       Chester                       95.1%               2.8
--------------------------------------------------------------------
 FL       Lee                           94.8%               1.7
--------------------------------------------------------------------
 CA       San Luis Obispo               94.7%               2.2
--------------------------------------------------------------------
 MD       Anne Arundel                  94.6%               2.4
--------------------------------------------------------------------
 DE       New Castle                    94.5%               1.9
--------------------------------------------------------------------
 CA       San Diego                     94.4%               2.0
--------------------------------------------------------------------
 CA       San Mateo                     94.1%               2.0
--------------------------------------------------------------------
 FL       Palm Beach                    94.1%               1.9
--------------------------------------------------------------------
 CA       San Francisco                 93.9%               1.8
--------------------------------------------------------------------
 IL       Lake                          93.4%               2.9
--------------------------------------------------------------------
 FL       Colliar                       93.3%               1.7
--------------------------------------------------------------------
 NY       Dutchess                      93.3%               1.6
--------------------------------------------------------------------
 NJ       Sussex                        93.0%               2.4
--------------------------------------------------------------------
 CA       Santa Barbara                 93.0%               2.3
--------------------------------------------------------------------
 CA       San Joaquin*                  92.9%               2.2
--------------------------------------------------------------------
 CA       Santa Cruz*                   92.4%               2.4
--------------------------------------------------------------------
 PA       Allegheny                     92.1%               1.8
--------------------------------------------------------------------
 CA       Alameda*                      91.9%               2.4
--------------------------------------------------------------------
 CA       San Bernardino*               91.4%               2.8
--------------------------------------------------------------------
 NY       Westchester*                  91.0%               2.0
--------------------------------------------------------------------
 CA       Solano*                       90.7%               2.4
--------------------------------------------------------------------
 PA       Luzerne                       90.6%               2.2
--------------------------------------------------------------------
 CA       Los Angeles*                  90.3%               2.4
--------------------------------------------------------------------
 OH       Cuyahoga*                     90.1%               1.3
--------------------------------------------------------------------
 CA       Monterey*                     89.9%               2.5
--------------------------------------------------------------------
 PA       Philadelphia*                 89.7%               2.3
--------------------------------------------------------------------
 IL       Cook*                         89.6%               2.7
--------------------------------------------------------------------

*Includes Reach from TV Guide Local Edition

Kinsella Communications, Ltd.

Page 2

EXHIBIT 4

(Final Versions of Consumer Letter and
AHJ Letter to be Provided by CPSS)


IMPORTANT SAFETY INFORMATION
RECALL OF CENTRAL SPRINKLER'S OMEGA BRAND FIRE SPRINKLERS

To Consumer/Homeowner:

The Consumer Product Safety Commission (CPSC) and Central Sprinkler recently announced the recall of all Omega fire sprinklers. According to the CPSC, these sprinklers are defective and could likely fail in a fire, which could result in bodily injury or death.

Please read the entire attached packet of information carefully. It is very important for you to determine if Omega sprinklers are installed in your home or building. The notice contains product information regarding the recall with the CPSC, as well as the preliminary settlement Central has reached with several private class action lawsuits. Please refer to the product information sheets which explain how to identify Omega sprinklers. Because sprinklers can be difficult to identify, we urge you to check with your architect, builder, sprinkler contractor, plumber, homeowners, association or property manager.

This recall is available to all owners of Omega fire sprinklers. To participate in the recall you must complete the enclosed Proof of Claim Form and Waiver and Release of Claims Form as soon as possible and return them to Central Sprinkler at the address indicated in the Proof of Claim Form. Central Sprinkler will mail you a free replacement sprinkler for every Omega sprinkler owned.

In order to receive replacement sprinklers and to qualify for reimbursement toward installation costs, you must complete the Proof of Claim Form and the accompanying Waiver and Release of Claim Form and return them to Central Sprinkler, postmarked by August 1, 1999. Although it is important to provide complete information, please submit your Proof of Claim Form postmarked by August 1, 1999, even if you can not provide complete responses to all the questions. In order to receive reimbursement toward installation costs, you must complete and return the Verification Form within 365 days after you receive your replacement sprinklers. Those owners filing a Proof of Claim and Waiver and of Release of Claims Forms postmarked after August 1, 1999 but before November 1, 2001, still qualify to receive replacement sprinklers (though not reimbursement). The recall terms may also provide benefits to those who have already replaced Omegas between May 1, 1996 and the effective date of the Commission's Order.

Please read all of this information carefully, as it explains your legal rights and obligations. If you have any questions about how to complete the forms or how to identify an Omega sprinkler, please call the Omega Hotline at 1-800-896-5685.

Do not delay! Take action today. Until you receive your free replacement sprinklers, you should have a well-defined and rehearsed escape plan, an alternate plan and working smoke detectors on every floor of your home, especially near bedrooms.


IMPORTANT SAFETY INFORMATION
RECALL OF CENTRAL SPRINKLER'S OMEGA BRAND FIRE SPRINKLERS

October x, 1998

Dear Authority Having Jurisdiction:

I am writing to share with you urgent news regarding Omega fire sprinklers that may well be installed in your area. If you are not already, you must become aware of and familiarize yourself with this situation, the new steps being taken to correct it, and the vital role you play by your action in protecting consumer safety.

In cooperation with the United States Consumer Product Safety Commission (CPSC), Central Sprinkler is recalling approximately 8.4 million Omega series sprinklers now in service. According to the CPSC, these sprinklers are defective, and could likely fail in a fire.

The recall is comprehensive and fundamentally different from our prior remediation and notice efforts over the past three years. We are recalling all Omega sprinklers in service, including Omegas containing an EPDM o-ring made before June, 1996 and Omegas that contain a silicone o-ring made after June 1996. The recall encompasses Omegas from all dates of manufacture that are installed in all piping systems -- not simply steel, but polybutylene, CPVC, and copper, including those Omegas made after 1991. The recall involves no removal and testing of Omega field samples, upon which remediation was previously conditioned. The recall is not site-specific. It is total. As part of the recall, Central will provide to all Omega owners -- free of charge -- an approved Quick Response GB sprinkler as a replacement. The company has also established a special Trust to help building owners and homeowners defray the costs associated with replacing the sprinklers. The recall terms may also provide benefits to those who have already replaced Omegas between May 1, 1996 and the effective date of the Commission's Order.

The first order of business is to help identify locations containing Omega sprinklers and to help owners and residents of sprinklered properties determine whether they have Omegas. The attached Notice includes product identification to help you and property and homeowners in your area determine whether they have Omega sprinklers on their premises, and if they do, which model they have. As you may know, on all models of Omega sprinklers, you will see a heat collector assembly, comprised of one to three flat metal disks or fins and inside of which sit a plunger and fusible link. On some Omega models, the word "Central" or the letters "CSC" may be visible on the deflector shield.


Building and homeowners who have Omegas installed in their buildings should call 1-800-896-5685 as soon as possible to request a Proof of Claim Form and Waiver and Release of Claims Form, which must be completed in order to receive free replacement sprinklers. In order to receive any reimbursement for replacement costs, owners must submit a completed Proof of Claim Form and a Waiver and Release of Claims Form to Central Sprinkler by August 1, 1999. Details on completing the forms are included in the enclosed Notice packet. Please feel free to distribute copies of this letter to owners of Omegas in your jurisdiction. Those owners filing a Proof of Claim and Waiver and Release of Claims Form postmarked after August 1, 1999 but before November 1, 2001, still qualify to receive replacement sprinklers (though not reimbursement).

We are utilizing advertising, direct mail notices and news stories to inform consumers about the recall. However, in identifying buildings and residences that contain Omegas there is no substitute for personal intervention from fire protection leaders such as yourself. Along with the CPSC, we encourage you to help us spread the word about this recall to protect the public health and safety.

Please keep these two phone numbers handy when you and your constituents need further assistance:

- Call the Omega Information Line - 1-800-896-5685 to learn more about how to identify an Omega sprinkler and to obtain a Proof of Claim Form. This is the first number consumers should call to initiate the replacement effort.

- If you have any questions about the recall and replacement effort that are not answered by the Omega Information or the Notice packet, you may call Central Sprinkler's Omega Hotline at 1-800-xxx-xxxx.

On behalf of all of us who are committed to fire prevention and protection, we thank for your support in this effort.


IMPORTANT SAFETY INFORMATION
RECALL OF CENTRAL SPRINKLER'S OMEGA BRAND FIRE SPRINKLERS

October x, 1998

Dear Authority Having Jurisdiction:

I am writing to share with you urgent news regarding Omega fire sprinklers that may well be installed in your area. If you are not already, you must become aware of and familiarize yourself with this situation, the new steps being taken to correct it, and the vital role you play by your action in protecting consumer safety.

In cooperation with the United States Consumer Product Safety Commission (CPSC), Central Sprinkler is recalling approximately 8.4 million Omega series sprinklers now in service. According to the CPSC, these sprinklers are defective, and could likely fail in a fire.

The recall is comprehensive and fundamentally different from our prior remediation and notice efforts over the past three years. We are recalling all Omega sprinklers in service, including Omegas containing an EPDM o-ring made before June, 1996 and Omegas that contain a silicone o-ring made after June 1996. The recall encompasses Omegas from all dates of manufacture that are installed in all piping systems -- not simply steel, but polybutylene, CPVC, and copper, including those Omegas made after 1991. The recall involves no removal and testing of Omega field samples, upon which remediation was previously conditioned. The recall is not site-specific. It is total. As part of the recall, Central will provide to all Omega owners -- free of charge -- an approved Quick Response GB sprinkler as a replacement. The company has also established a special Trust to help building owners and homeowners defray the costs associated with replacing the sprinklers. The recall terms may also provide benefits to those who have ' already replaced Omegas between May 1, 1996 and the effective date of the Commission's Order.

The first order of business is to help identify locations containing Omega sprinklers and to help owners and residents of sprinklered properties determine whether they have Omegas. The attached Notice includes product identification to help you and property and homeowners in your area determine whether they have Omega sprinklers on their premises, and if they do, which model they have. As you may know, on all models of Omega sprinklers, you will see a heat collector assembly, comprised of one to three flat metal disks or fins and inside of which sit a plunger and fusible link. on some Omega models, the word "Central" or the letters "CSC" may be visible on the deflector shield.


Building and homeowners who have Omegas installed in their buildings should call 1-800-896-5685 as soon as possible to request a Proof of Claim Form and Waiver and Release of Claims Form, which must be completed in order to receive free replacement sprinklers. In order to receive any reimbursement for replacement costs, owners must submit a completed Proof of Claim Form and a Waiver and Release of Claims Form to Central Sprinkler by August 1, 1999. Please feel free to distribute copies of this letter to owners of Omegas in your jurisdiction. Those owners filing a Proof of Claim and Waiver and Release of Claims Form postmarked after August 1, 1999 but before November 1, 2001, still qualify to receive replacement sprinklers (though not reimbursement).

We are utilizing advertising, direct mail notices and news stories to inform consumers about the recall. However, in identifying buildings and residences that contain Omegas there is no substitute for personal intervention from fire protection leaders such as yourself. Along with the CPSC, we encourage you to help us spread the word about this recall to protect the public health and safety.

Please keep these two phone numbers handy when you and your constituents need further assistance:

- Call the Omega Information Line - 1-800-896-5685 to learn more about how to identify an Omega sprinkler and to obtain a Proof of Claim Form. This is the first number consumers should call to initiate the replacement effort.

- If you have any questions about the recall and replacement effort that are not answered by the Omega Information or the Notice packet, you may call Central Sprinkler's Omega Hotline at 1-800-xxx-xxxx.

On behalf of all of us who are committed to fire prevention and protection, we thank for your support in this effort.


EXHIBIT 5


Newsgroups for Central Sprinkler Class Notice

acc.shell.usa-today.law                           alt.real-estate.commercial.tx-northwest
acc.shell.usa-today.real                          alt.real-estate.commercial.tx-southeast
alt.architecture                                  alt.real-estate.commercial.tx-southwest
alt.architecture.alternative                      ca.news
alt.architecture.int-design                       clari.biz
alt.building.announcements                        clari.biz.industry.construction
alt.building.architecture                         clari.biz.industry.construction.cbd.acquisitions
alt.building.construction                         clari.biz.industry.construction.cbd.architecturing
alt.building.consu1ting-specialty                 clari.biz.industry.construction.maintenance
alt.building.contractors                          clari.biz.industry.construction.misc
alt.building.distributor-dealer                   clari.biz.industry.construction.supplies
alt.building.education                            clari.biz.industry.real_cst+const
alt.building.engineering                          clari.biz.industry.real_cst+cons_releases
alt.building.environment                          clari.living.consume
alt.building.finance                              clari.local.california.sfbay.fire
alt.building.gov-issues                           clari.news.usa.law
alt.building.health-safety                        clari.usa.law.misc
alt.building.interior-design                      courts.usa
alt.building.law                                  courts.usa.state
alt.building.manufacturing                        misc.consumer.house
alt.building.planning-preservation                misc.consumers
alt.building.realestate                           misc.consumers.house
alt.building.research                             misc.consumers.house.homeowner-assn
alt.building.union-assn-society                   misc.invest.real-estate
alt.business                                      misc.legal
alt.business.home                                 misc.legal.moderated
alt.business.misc                                 nj.housing
alt.construction                                  nj.market.housing
alt.consumers                                     nyc.market.housing
alt.consumers.experiences                         phl.housing
alt.current-events                                realtynet.commercial
alt.current-events.usa                            realtynet.east
alt.firefighters                                  realtynet.general
alt.home.repair                                   realtynet.government
alt.invest.real-estate                            realtynet.invest
alt.lawyers                                       realtynet.lending
alt.real-estate.commercial.az                     realtynet.mid
alt.real-estate.commercial.ca-central             realtynet.qa
alt.real-estate.commercial.ca-north               realtynet.residential
alt.real-estate.commercial.ca-south               realtynet.south
alt.real-estate.commercial.fl-central             realtynet.west
alt.real-estate.commercial.fl-north               relcom.commerce.construction
alt.real-estate.commercial.fl-south               relcom.consumers
alt.real-estate.commercial.ga                     sdnet.housing
alt.real-estate.commercial.md                     sdnet.real-estate
alt.real-estate.commercial.nj                     sdnet.real-estate.agents
alt.real-estate.commercial.ny                     sealttle.forsale.housing
alt.real-estate.commercial.oh                     us.legal
alt.real-estate.commercial.pa                     usa-today.law
alt.real-estate.commerical.tx-northeast


APPENDIX
B


                                   APPENDIX B
                          COMMERCIAL OMEGA REPLACEMENTS

                                                                      LISTING &
OMEGA MODEL        REPLACEMENT            PART NO.                    APPROVAL
-----------        -----------            --------                    ---------
3/8" C-1 & C1A     7/16" GB-QR Pendent    155 (Degrees) BR 1669       UL     (1)
                                          155 (Degrees) CH 1670
                                          155 (Degrees) BB 1671
                                          155 (Degrees) OW 1672
                                          155 (Degrees) WH 1673
                                          155 (Degrees) BK 1674
                                          200 (Degrees) BR 1681
                                          200 (Degrees) CH 1682
                                          200 (Degrees) BB 1683
                                          200 (Degrees) OW 1684
                                          200 (Degrees) WH 1685
                                          200 (Degrees) BK 1686

1/2" C-1 & C-1A    1/2" GB-GR Pendent     155 (Degrees) BR 1862       UL & FM
                                          155 (Degrees) CH 1863
                                          155 (Degrees) BB 1864
                                          155 (Degrees) OW 1865
                                          155 (Degrees) WH 1866
                                          155 (Degrees) BK 1867
                                          200 (Degrees) BR 1922
                                          200 (Degrees) CH 1923
                                          200 (Degrees) BB 1924
                                          200 (Degrees) OW 1925
                                          200 (Degrees) WH 1926
                                          200 (Degrees) BK 1927

EC20 & EC-20A      1/2" GB EC Pendent     155 (Degrees) BR 2730      UL      (2)
                                          155 (Degrees) CH 2731
                                          155 (Degrees) BB 2732
                                          155 (Degrees) OW 2735
                                          155 (Degrees) WH 2733

1

                                   APPENDIX B
                          COMMERCIAL OMEGA REPLACEMENTS

                                                                    LISTING &
OMEGA MODEL        REPLACEMENT            PART NO.                  APPROVAL
-----------        -----------            --------                  ---------
AC                 1/2" GB-QR Pendent     155 (Degrees) BR 1862     UL & FM
                                          155 (Degrees) CH 1863
                                          155 (Degrees) BB 1864
                                          155 (Degrees) OW 1865
                                          155 (Degrees) WH 1866
                                          155 (Degrees) BK 1867

HEC-12             1/2" GB-QR S/W         155 (Degrees) BR 1904     UL & FM
                                          155 (Degrees) CH 1905
                                          155 (Degrees) BB 1906
                                          155 (Degrees) OW 1907
                                          155 (Degrees) WH 1908
                                          155 (Degrees) BK 1909
                                          200 (Degrees) BR 1934
                                          200 (Degrees) CH 1935
                                          200 (Degrees) BB 1936
                                          200 (Degrees) OW 1937
                                          200 (Degrees) WH 1938
                                          200 (Degrees) BK 1939

HEC-12EC           1/2" GB EC S/W         155 (Degrees) BR 2720     UL    (2)(3)
                                          155 (Degrees) CH 2721
                                          155 (Degrees) BB 2722
                                          155 (Degrees) OW 2725
                                          155 (Degrees) WH 2723
                                          155 (Degrees) BK 2724

M PENDENT       1/2" GB-QR Pendent        155 (Degrees) BR 1862     UL & FM
                                          155 (Degrees) CH 1863
                                          155 (Degrees) BB 1864
                                          155 (Degrees) OW 1865
                                          155 (Degrees) WH 1866
                                          155 (Degrees) BK 1867
                                          200 (Degrees) BR 1922
                                          200 (Degrees) CH 1923
                                          200 (Degrees) BB 1924
                                          200 (Degrees) OW 1925
                                          200 (Degrees) WH 1926
                                          200 (Degrees) BK 1927

2

APPENDIX B
COMMERCIAL OMEGA REPLACEMENTS

                                                                    LISTING &
OMEGA MODEL        REPLACEMENT            PART NO.                  APPROVAL
-----------        -----------            --------                  ---------
M UPRIGHT          1/2" GM-QR Upright     155 (Degrees) BR 1850      UL & FM
                                          155 (Degrees) CH 1851
                                          155 (Degrees) BB 1852
                                          155 (Degrees) OW 1853
                                          155 (Degrees) WH 1854
                                          155 (Degrees) BK 1855
                                          200 (Degrees) BR 1946
                                          200 (Degrees) CH 1947
                                          200 (Degrees) BB 1948
                                          200 (Degrees) OW 1949
                                          200 (Degrees) WH 1950
                                          200 (Degrees) BK 1951

M SIDEWALL         1/2" GB-QR S/W         155 (Degrees) BR 1904      UL & FM
                                          155 (Degrees) CH 1905
                                          155 (Degrees) BB 1906
                                          155 (Degrees) OW 1907
                                          155 (Degrees) WH 1908
                                          155 (Degrees) BK 1909

M-EC SIDEWALL      1/2" GB-EC S/W         155 (Degrees) BR 2720      UL      (2)
                                          155 (Degrees) CH 2721
                                          155 (Degrees) BB 2722
                                          155 (Degrees) OW 2725
                                          l55 (Degrees) WH 2723
                                          155 (Degrees) BK 2724

HEC-20             1/2" GB-EC S/W         155 (Degrees) BR 2720      UL      (4)
                                          155 (Degrees) CH 2721
                                          155 (Degrees) BB 2722
                                          155 (Degrees) OW 2725
                                          155 (Degrees) WH 2723
                                          155 (Degrees) BK 2724

FC FLUSH           1/2" GB4-FR            155 (Degrees) 776          UL      (5)

3

APPENDIX B
COMMERCIAL OMEGA REPLACEMENTS

                                                                    LISTING &
OMEGA MODEL        REPLACEMENT            PART NO.                  APPROVAL
-----------        -----------            --------                  ---------
FC PENDENT         1/2" GB-QR Pendent     155 (Degrees) BR 1862      UL & FM
                                          155 (Degrees) CH 1863
                                          155 (Degrees) BB 1864
                                          155 (Degrees) OW 1865
                                          155 (Degrees) WH 1866
                                          155 (Degrees) BK 1867

PROHIBITOR         NO REPLACEMENT                                   (6)

NOTES:

(1) Currently FM does not have an approved standard for 7/16" orifice heads. Because of very low demand, Central does not offer a 3/8" GBQR.

(2) The GBEC sprinkler is currently being tested at FM

(3) FM minimum pressure requirements for Extended Coverage do not allow Approval of a direct replacement for a UL Listed head in all applications.

(4) FM does not approve mounting heights below 12"

(5) For those owners that choose to do so, Central will offer the Model GB4-FR even though it does not have the on-off capacity. The GB4-FR sprinkler is currently being tested at FM.

(6) For those owners that choose to do so, Central will offer the Model GBQR, however it is not designed for institutional installation.

4

APPENDIX B
RESIDENTIAL OMEGA REPLACEMENTS

                                                                    LISTING &
OMEGA MODEL        REPLACEMENT            PART NO.                  APPROVAL
-----------        -----------            --------                  ---------
1/2" C-1 & C-1A    LF Pendent             155 (Degrees) BR 2703     UL       (5)
                                          155 (Degrees) CH 2704
                                          155 (Degrees) BB 2705
                                          155 (Degrees) OW 2706
                                          155 (Degrees) WH 2709
                                          155 (Degrees) BK 2707

EC-20 & EC-20A     LF Pendent             155 (Degrees) BR 2703     UL       (5)
                                          155 (Degrees) CH 2704
                                          155 (Degrees) BB 2705
                                          155 (Degrees) OW 2706
                                          155 (Degrees) WH 2709
                                          155 (Degrees) BK 2707
HEC-12 RES &
HEC-12             LF S/W                 155 (Degrees) BR 1724     UL       (5)
                                          155 (Degrees) CH 1725
                                          155 (Degrees) BB 1726
                                          155 (Degrees) OW 1729
                                          155 (Degrees) WH 1727
                                          155 (Degrees) BK 1728

R-1, R-1A & R-1M   LF Pendent             155 (Degrees) BR 2703     UL       (5)
                                          155 (Degrees) CH 2704
                                          155 (Degrees) BB 2705
                                          155 (Degrees) OW 2706
                                          155 (Degrees) WH 2709
                                          155 (Degrees) BK 2707

NOTES.

(5) FM Residential density requirements do not allow Approval of a direct replacement for a UL Listed Residential head.

5

APPENDIX
C


APPENDIX C

Obligations of Central:

1. In order to defray the cost to owners of Omega fire sprinklers of removing and replacing those sprinklers, Central Sprinkler Corporation and Central Sprinkler Company (collectively, "Central") shall deposit $8,800,000 into an interest-bearing irrevocable trust account for the benefit of Omega owners who participate in the remediation program as outlined in the Consent Agreement and Order (the "Trust"). Central shall have no interest, whether legal, equitable or otherwise, in the funds in the Trust, and no amounts in the Trust shall ever be paid to, for the benefit of, or revert back to Central. The Trust shall be created solely for the purpose of providing Omega owners with a contribution towards the costs of removal and replacement of their Omega sprinklers ("Replacement Contribution"). All expenses of the Trust, including but not limited to compensation and indemnification of the Trustee, will be paid from the corpus of the Trust. The funds shall be deposited into the Trust as follows:

a. Central shall deposit $2,200,000 into the Trust within one day of the date of entry of the Commission's Order.

b. Central shall deposit an additional $2,200,000 into the Trust on the first, second, and third anniversaries of the Effective Date of the Commission's Order.

c. Central shall also deposit into the Trust a portion of all proceeds, including punitive and treble damages, from claims and lawsuits against its insurers or other third parties relating to Omega sprinklers, regardless of whether such proceeds are paid directly to Central, its attorneys, agents and/or other representatives (the "Proceeds"). (Central's claims and lawsuits against its insurers or other third parties relating to Omega sprinklers are hereinafter referred to as the "Claims.") The Proceeds shall not include any amounts received by Central in reimbursement or compensation for actions filed or claims made against it by persons and/or entities who sustained property damage, personal injury or death as a result of the premature activation of Omega sprinkler(s), or the inactivation of Omega sprinkler(s) in a fire. The Proceeds shall be distributed as follows:

i. Central shall retain for itself Proceeds equal to the amount it spends in reasonable costs and attorneys' fees to defend itself against civil lawsuits


filed against it by persons, non-governmental entities, or governmental entities in their proprietary capacity as building owners or operators, relating to Omega sprinklers, but not claiming personal injury, property damage and/or death as a result of the premature activation of Omega sprinkler(s) or the inactivation of Omega sprinkler(s) in a fire.

ii. Central shall deposit into the Trust 50% of the Proceeds in excess of the amount stated in Paragraph i above, up to the amount of Central's contributions to the Trust pursuant to Paragraphs 1.a, 1.b, and 2 of this Appendix.

iii. Central shall deposit into the Trust 70% of all Proceeds in excess of the amounts stated in Paragraphs i and ii above.

All interest from the Trust shall be placed into the Trust for distribution to Omega owners with other amounts in the Trust. The Trust agreement shall be in a form approved by the staff. The Trust shall remain in effect until the expiration or final determination of all Claims, and the final distribution of all funds in the Trust.

2. By November 30, 2001, Central shall make an additional deposit into the Trust based on the total number of Replacement Sprinklers needed to fulfill the Proofs of Claim submitted pursuant to Paragraphs 5 and 6 below. In calculating the total number of sprinklers, Central shall include not only Replacement Sprinklers, but also Omega sprinklers for which Central must make payment pursuant to Paragraph 12 of the Consent Order. Specifically, Central shall make this additional deposit as follows:

--------------------------------------------------------------------------------
Total Number of Sprinklers Included          Central's Additional Deposit
    in Proofs of Claim Submitted                   into the Trust
        by November 1, 2001
--------------------------------------------------------------------------------
less than or equal to 1 million sprinklers         $15.00 million
--------------------------------------------------------------------------------
greater than 1 million sprinklers, but less        $13.00 million
than or equal to 1.5 million sprinklers
--------------------------------------------------------------------------------
greater than 1.5 million sprinklers, but less      $11.00 million
than or equal to 2 million sprinklers
--------------------------------------------------------------------------------

2

--------------------------------------------------------------------------------
greater than 2 million sprinklers, but less        $9.00 million
than or equal to 2.5 million sprinklers
--------------------------------------------------------------------------------
greater than 2.5 million sprinklers, but less      $7.00 million
than or equal to 3 million sprinklers
--------------------------------------------------------------------------------
greater than 3 million sprinklers, but less        $4.75 million
than or equal to 3.5 million sprinklers
--------------------------------------------------------------------------------
greater than 3.5 million sprinklers, but less      $2.75 million
than or equal to 4 million sprinklers
--------------------------------------------------------------------------------
greater than 4 million sprinklers, but less        $1.25 million
than or equal to 4.5 million sprinklers
--------------------------------------------------------------------------------
greater than 4.5 million sprinklers, but less      $0.50 million
than or equal to 4.75 million sprinklers
--------------------------------------------------------------------------------
greater than 4.75 million sprinklers               $0.00 million
--------------------------------------------------------------------------------

3. On November 30, 2002, Central shall make an additional contribution to the Trust in an amount equal to the difference between $37.3 million and the sum of the following expenses, incurred between the date the parties sign the Consent Agreement and November 1, 2002, provided that such expenses total less than $37.3 million:

a. Manufacturing and supplying Replacement Sprinklers and Replacement Parts to owners of Omega sprinklers;

b. Paying $5.00 per Omega sprinkler to Omega owners who do not want or cannot use Central's Replacement Sprinklers pursuant to Paragraph 12 of the Order;

c. Making contributions to the Trust pursuant to Paragraphs 1 and 2 of this Appendix;

d. An amount equal to (i) the actual cost of providing notice to the public of this settlement and the settlement of the class action styled Hart v. Central Sprinkler Corp., et al., Case No. BC176727, pending in California Superior Court, Los Angeles County, or (ii) $1.6 million, whichever is less;

3

e. An amount equal to (i) the actual cost of administering the remediation program under this Consent Agreement and Order, or (ii) $3.0 million, whichever is less; and

f. An amount equal to the costs of defending any actions by, and paying any judgments or settlements obtained by, parties who do not participate in and/or choose to exclude themselves from the remediation program under this Consent Agreement and Order and/or the class action settlement referenced in Paragraph 3.d of this Appendix, including a reasonable amount to address litigation by such persons that is pending as of November 1, 2002, less Proceeds received on account of such claims or suits. The amount reserved to address such pending litigation must be approved by the staff, but shall not exceed 20% of the amount spent by Central on all such litigation between the effective date of this Order and November 1, 2002.

4. Beginning 3 months after the Effective Date of the Commission's Order, and for every 3 months thereafter until the expiration of 48 months or until the expiration or final determination of the Claims, whichever is later, Central shall provide the Commission staff with progress reports, in a format approved by the Commission staff, regarding (a) the number of persons who have contacted Central to make a claim; (b) the number of Proofs of Claim that have been submitted and the number of sprinklers represented in those Proofs of Claim; and (c) the status of the Claims described in Paragraph 1.c above. This report shall also include current bank statements for the Trust. At the request of the Commission staff, Central shall provide to the staff the names of all persons who have contacted Central to make a claim and/or who have submitted a Proof of Claim.

Obligations of Omega Owners:

5. Omega owners who submit to Central a Proof of Claim form and a Waiver and Release of Claims form postmarked by August 1, 1999, substantially in the forms attached to this Appendix, will receive free Replacement Sprinklers and Parts, as well as an initial and any supplemental Replacement Contributions from the Trust.

To receive payment from the Trust, owners of Omega sprinklers must also submit to Central a Verification, substantially in the form attached to this Appendix, within 365 days after receiving Replacement Sprinklers and Parts. The Verification shall state under penalty of perjury the number of Omega sprinklers that the owner actually has replaced in the owner's building(s). The Verification also shall be accompanied by a

4

work order, bill, receipt, or other documentation from the person or Company replacing the sprinklers, establishing the number of Omega sprinklers that have been replaced. Failure to timely submit a Verification and supporting documentation will disqualify an Omega owner from receiving any payment from the Trust, unless the delay in submitting the Verification is caused by an act or omission on the part of Central.

6. Omega owners who submit to Central a Proof of Claim form and a Waiver and Release of Claim form postmarked after August 1, 1999, but no later than November 1, 2001, substantially in the form attached to this Appendix, will receive free Replacement Sprinklers and Parts, but will not be eligible to receive contributions from the Trust, unless their delay in submitting a Proof of Claim form and/or Waiver and Release of Claims form is caused by an act or omission on the part of Central. Omega owners whose delay in submitting a Proof of Claim form and/or Waiver and Release form is caused by an act or omission on the part of Central will be entitled to distributions from the Trust, as if their Proof of Claim form and/or Waiver and Release of Claims form had been timely submitted.

Distribution Plans

7. By October 15, 1999, Central shall provide the Commission staff with a proposed plan of distribution ("Initial Distribution Plan") of the Trust to all Omega owners who meet the requirements specified in Paragraph 5 above. The Distribution Plan shall be consistent with Paragraphs 1 and 2 (and 3, if applicable) of this Appendix, and shall be designed to compensate Omega owners for replacement labor costs and to motivate participation in this remediation program. The Distribution Plan shall include: (a) the total funds to be distributed; (b) the timetable by which the funds will be distributed; and, (c) the apportionment of the Trust funds among the eligible Omega owners. The Distribution Plan must be approved by the Commission staff. In no event, and under no circumstances, may any amounts in the Trust be paid or revert back to Central. If the Commission staff does not approve the Distribution Plan, the staff shall notify Central within 45 days of receiving the Distribution Plan and shall submit to Central its proposed plan of distribution. If the parties cannot agree to a plan of distribution, the parties will submit competing plans to the Commission for resolution. The Commission's decision shall be final and binding upon the parties and cannot be appealed.

8. By December 31, 2001, Central shall prepare a First Supplemental Distribution Plan with respect to all remaining amounts in the Trust. The First Supplemental Distribution Plan shall be subject to the same requirements and procedures as the Initial Distribution

5

Plan specified in Paragraph 7 above. To the extent that any or all of an Omega owner's claim for distributions from the Trust is forfeited because of the owner's failure to submit the Release and/or Verification required by Paragraph 5 above, the full amount of such forfeiture shall be apportioned among owners who have complied with all requirements specified in Paragraph 5 above.

9. By November 30, 2002, Central shall prepare a Second Supplemental Distribution Plan with respect to all remaining amounts in the Trust. The Second Supplemental Distribution Plan shall be subject to the same requirements and procedures as the Initial Distribution Plan specified in Paragraph 7 above. To the extent that any or all of an Omega owner's claim for distributions from the Trust is forfeited because of the owner's failure to submit the Release and/or Verification required by Paragraph 5 above, the full amount of such forfeiture shall be apportioned among owners who have complied with all requirements specified in Paragraph 5 above.

10. Within 30 days after the expiration or final determination of the Claims, Central shall provide to the Commission staff a proposed supplemental plan of distribution ("Proceeds Distribution Plan") for distribution of the Proceeds to all Omega owners who meet the requirements specified in Paragraph 5 above. The Proceeds Distribution Plan shall be subject to the same requirements and procedures as the Initial Distribution Plan specified in Paragraph 7 above.

Accepted and Approved: Accepted and Approved:

/s/  XXXXXXXXXXX                          /s/   XXXXXXXXXXXXXX
  -----------------------------             ----------------------------------
CPSC Office of Compliance                 Respondents Central Sprinkler Co. and
                                           Central Sprinkler Corporation

6
Kinsella Communications, Ltd.

Page 1

Exhibit 3

CENTRAL SPRINKLER COMPANY
OMEGA SPRINKLER
PROOF OF CLAIM FORM

Omega ID #________________(Internal Use Only)

In order to make a claim for Replacement Sprinklers and Replacement Parts and a payment from the Trust, you must complete this Proof of Claim Form, sign the attached Waiver and Release of Claims Form, and submit both documents plus the required photographs by August 1, 1999. You can still make a claim for Replacement Sprinklers and Replacement Parts after August 1, 1999 as long as you submit these forms prior to November 1, 2001, but in that event, you will not be eligible for a payment from the Trust.

If you have already had your Omega Sprinklers replaced, you may be eligible for a payment from the Trust. You must complete this Proof of Claim Form and the attached Waiver and Release of Claims Form, and submit both documents before August 1, 1999.

If you have more than one building in which Omega Sprinklers have been installed, make copies of this form before filling it in.

A. CLAIMANT INFORMATION

1. Name of Claimant:____________________________________________________________

2. Claimant's mailing address:__________________________________________________ Street

City State Zip Code

3. Name of contact person:______________________________________________________

4. Telephone: ( )____________________

5. Fax: ( )__________________________

6. If you have already replaced your Omega Sprinklers, check here ____. If so, attach pertinent documentation regarding the replacement of the sprinklers.


Exhibit 3

B. BUILDING AND OMEGA SPRINKLER INFORMATION

Please complete this section for each building in which Omega sprinklers have been installed. Please copy this form and complete for each additional building.

1. Name of building:_______________________________________________________

2. Building street address:________________________________________________ Street

City State Zip Code

3. Name of contact person:_________________________________________________

4. Telephone: ( )____________________

5. Fax: ( )__________________________

6. E-Mail Address:_________________________________________________________

7. Shipping address for replacement sprinklers:____________________________ **PLEASE NOTE: WE CANNOT SHIP TO Name of Addressee
A POST OFFICE BOX

                                                           Attention

                                               ______________________________
                                                            Street

                                       ______________________________________
                                        City        State          Zip Code

8.   Nature of building    __Private Home   __Apartment Bldg.   __Condo
                           __Retail         __Hotel             __School
                           __Restaurant     __Nursing Home      __Hospital
                           __Jail/Prison    __Office Bldg.      __Warehouse
                           __Group Home     __Mental Health Ctr.

__Other please explain:___________________________

C. IDENTIFICATION OF OMEGA SPRINKLERS

In order for Central to provide the correct number and model of Replacement Sprinklers, it is vital that you provide accurate information regarding the Omega sprinklers in your building. This Notice Packet contains pictures and other identifying information that will help you determine if you have on Omega sprinkler, and if so, help identify the model. Please refer to that section when completing this Proof of Claim Form. If you need assistance identifying your Omega Sprinklers, call Central at 1-800-XXX-XXXX, or contact your sprinkler contractor, builder, architect, or local fire marshal.


Exhibit 3

Central has manufactured the following models of Omega sprinkler:

C-1 (Pendent)                             Protector-M (Horizontal Sidewall QR)
C-lA (Pendent)                            Protector-M (Horizontal Sidewall QREC)
EC-20 (Pendent)                           HEC-12 (Sidewall)
EC-20A (Pendent)                          HEC-12Res (Sidewall)
R-1 (Pendent)                             HEC-12EC (Sidewall)
R-lA (Pendent)                            HEC-20 (Sidewall)
R-1M (Pendent)                            HEC-12 PRO (Prohibitor Sidewall)
Flow Control - FC (Pendent)               HEC-12 PRO (Prohibitor QR Sidewall)
Flow Control - FC (Flush Pendent)         C-lA PRO (Prohibitor Pendent)
Protector-M (Upright)                     C-1A PRO QR (Prohibitor QR Pendent)
Protector-M (Pendent)                     AC (Concealed Pendent)
Protector-M (Horizontal Sidewall)

Please complete the information requested in the table below, setting forth the particular Omega model, quantity of such model, and other information regarding the sprinklers in your building. In addition, you are required to provide a photograph of each different Omega model. Note that this request does not require you to photograph each sprinkler, but only each different model installed in your building. Please make every effort to ensure clarity for proper identification.

Most Omegas contain three small circular heat-collecting disks.

=========================================================================================================================
                                               Temperature
   Omega                                          Rating                                             Escutcheon Finish
 Sprinkler     Position                    (160, 145, 200 degrees)        Sprinkler Finish         (brass, chrome, white)
   Model       or Type     Quantity        (as listed on deflector)     (brass, chrome, white)                **
                ***                                  *
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
=========================================================================================================================

* The Deflector is the circular disk with notches, resembling a snowflake, saw blade, flower or gear and is depicted in the Pamphlet next to the photograph of Omega sprinklers.

** The Escutcheon is the decorative ring surrounding the sprinkler that is flush to the wall or ceiling.

*** For Model M Omega Sprinklers only, you must pick one of the following styles (Sidewall, Pendent or Upright).

a. For owners of C-1 or C-1A, quick-response pendent sprinklers only, please identify the orifice size ( 1/2" or 3/8") for each sprinkler. The orifice size is the measurement of the inside diameter of the water flow opening, not the threads on the sprinkler.


Exhibit 3


Sprinkler Model Quantity

C-1 1/2"
C-1 3/8"
C-lA 1/2"
C-IA 3/8"

b. For owners of HEC-20 sprinklers, please indicate how many inches below the ceiling the top of each sprinkler is installed.


Quantity of HEC-20 Sprinklers Distance from Ceiling





D. ADDITIONAL INFORMATION

Please answer the following questions to the best of your ability. The information may be used to prioritize your claims. If you cannot answer these questions, you nevertheless will receive Replacement Sprinklers and a payment from the Trust (if you submit this Proof of Claim and accompanying Waiver and Release of Claims postmarked by August 1, 1999), but the date on which you receive Replacement Sprinklers and the amount of payment may be affected.

1. Year of Omega sprinkler system installation (1982 to Present):_______

2. Number of floors or stories:_________________________________________

3. Ceiling height: __15' and under __15-30' __over 30'

4. Material (Ceiling or Wall Type) in which sprinklers have been installed (e.g., suspended ceiling, plaster, drywall, etc.):___________________

        5. Does the sprinkler system
           contain antifreeze?               __Yes     __No

        6. Is security clearance required
           to complete installation?         __Yes     __No

        7. Does the building have
           access restrictions?              __Yes     __No

Exhibit 3

        8. Sprinkler system piping:
           (If combination system, please
           check all types of piping in

the system) __Steel __CPVC __Copper __Polybutylene

9. System Hydraulic calculation is per:
(This information may be
necessary for Central to
determine the appropriate
Replacement Sprinklers) __NFPA 13 __NFPA 13R __NFPA 13D

10. Sprinkler system static water pressure:______________________________ (The pressure gauge may be found where the local water supply main meets your building's fire-protection system piping, typically in the garage or basement of a home. The gauge will read in "PSI," or pounds per square inch).

11. Additional comments:_________________________________________________



IF YOU HAVE ANY QUESTIONS REGARDING THIS FORM,
CALL CENTRAL SPRINKLER AT 1-800-XXX-XXXX

OR

CALL YOUR LOCAL FIRE AUTHORITY OR AUTHORIZED
SPRINKLER INSTALLATION CONTRACTOR

Central Sprinkler will rely on the accuracy of this response in providing Replacement Sprinklers and otherwise processing your claim. It is therefore vital that you complete this Proof of Claim carefully and accurately. Failure to do so could result in your receiving Replacement Sprinklers that are not appropriate for your building, for which Central Sprinkler has no liability. Providing false information also could subject you to prosecution or other legal proceedings.


Exhibit 3

E. VERIFICATION

I hereby declare under penalty of perjury under the laws of the United States that the information in Sections A, B and C of this Form is true and correct, and that the remaining information is true and correct to the best of my knowledge, information and belief


Signature


Print Name Here

Executed on this __ day of ______________, _____

REMINDER

Please remember to include a photograph of each Omega model installed in your building and a signed Waiver and Release of Claims form.


WAIVER AND RELEASE OF CLAIMS

In exchange for Central's (1) providing a Glass Bulb sprinkler containing a Belleville-Type Washer Seal to replace each Omega sprinkler owned by the undersigned ("Replacement Sprinkler"); (2) providing a replacement escutcheon, extension and any and all fittings, fixtures and/or appurtenances necessary for the proper replacement of each Omega with a Replacement Sprinkler ("Replacement Parts"), or (3) providing $5.00 for each Omega sprinkler in lieu of (1) and (2) above; and (4) creating and making required contributions to a Trust Fund in which the undersigned has agreed as follows:

1. The undersigned, on behalf of him or herself, and any person claiming through him or her as his or her heir, administrator, devisee, predecessor, successor, representative of any kind, shareholder, partner, director, owner, affiliate, subrogee, assignee or insurer (the "Releasing Party") shall be deemed to and does hereby release and forever discharge Central Sprinkler Co. and Central Sprinkler Corp., including its predecessors, successors, subsidiaries, affiliates and any and all of their past, present and future officers, directors, stockholders, partners, agents, servants, successors, subrogees and assigns and their respective insurers and persons or entities in the chain of distribution of Omega sprinklers ("Releasees"), of and from any and all claims of any type or description that relate to or arise from the purchase, installation, presence or use of Omega sprinklers, including but not limited to any claims for actual, incidental, consequential or punitive damages relating to the inspection and replacement of Omega sprinklers other than the obligations resulting from or created by this Remediation Program, that such Releasing Parties have or may have whether known or unknown that arise from the Actions (the "Released


Claims"). However, no release is being given by a Releasing Party for compensatory damages arising from fire damage, property damage, personal injury or wrongful death associated with the failure or alleged failure of an Omega sprinkler to perform as intended, designed or expected in a fire or premature activation of an Omega sprinkler. Release is being given for punitive damages for such claims.

2. The Releasing Parties, and each of them, expressly waive the provisions of Section 1542 of the California Code of Civil Procedure (and all other like provisions of law), which provides:

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if unknown to him must have materially affected his settlement with the debtor.

Unknown claims for compensatory damages arising from fire damage, property damage, personal injury or wrongful death associated with the failure of an Omega sprinkler to perform as intended, designed or expected in a fire or premature activation of an Omega sprinkler are not released hereby. Release is being given for punitive damages for such claims.

3. The parties intend that the Releasees obtain in this Settlement satisfaction and protection from any liability arising from the claims described herein and from any claims for contribution or indemnity asserted by any person arising from such claims. The parties further intend to obviate the necessity and expense to the Releasees of appearing and defending any action commenced by the Releasing Party asserting claims relating to the purchase and installation of Omega-series fire sprinklers against any other person.

-2-

4. The undersigned agrees to take the following steps to bar, discharge and release any liability on the part of the Releasees to any other person for contribution and/or indemnity arising from the claims that are the subject of this Release.

The Releasing Party shall reduce any judgment he, she or it obtains against any person by the amount, percentage or share of such judgment attributable to Central, so as to bar, discharge and release under applicable law any claims for contribution and/or indemnity against Central arising from or related to the claims that are the subject of this Release. In the event that any Releasing Party obtains a judgment (including pursuant to a settlement agreement) against one or more persons and any of those persons obtains a judgment against Central, in whole or in part for contribution or indemnity, then such Releasing Party will be required to reduce or remit any judgment or portion thereof obtained by those persons by the amount of the judgment against Central.


[Print Name of Individual or Name
of Entity if Corporation, Partnership or other Form of Entity]

By:_____________________________________ (Name of individual signing]

Title:__________________________________

Date:___________________________________

-3-

CENTRAL SPRINKLER COMPANY
OMEGA REMEDIATION PROGRAM
VERIFICATION FORM

Omega ID Number_____________ (Office Use Only)

Property Name___________________________________________________________________

Property Street Address_________________________________________________________

City______________________________State_______________________Zip_______________

Name of Claimant________________________________________________________________

Sprinkler Contractor Performing Work____________________________________________

Please Complete The Following:

1. Number of Omega sprinkler heads replaced________________

2. Date Omega sprinklers were replaced_____________________

I hereby declare that: to the best of my knowledge, the Omega fire sprinkler heads in this system have been replaced in accordance with the codes and ordinances of the Local Authority Having Jurisdiction and further declare under the penalty of perjury under the laws of the United States that, to the best of my knowledge, all information on this form is true and correct to the best of my knowledge.

Attach work orders, bills receipts or other documentation establishing the number of Omega sprinklers that you have replaced.


Print Name of Claimant/Building Owner


Signature and Title


Date


Tax ID or Social Security Number

APPENDIX

D


APPENDIX D

LIST OF DOCUMENTS CONTAINING MATERIAL REPRESENTATIONS

1. Letter dated June 3, 1999 (with attachments), from Albert T. Sabol, Central Sprinkler Corporation, to Eric L. Stone, CPSC.
a) Central's Annual Reports for fiscal 1995-1997
b) Central's Form 10-K's for fiscal 1995-1997
c) Central's Form 10-Q's for each quarter of fiscal 1995-1997 and for the quarter ending January 31, 1998

2. Package on June 17, 1998 (consisting of Central's 10-Q for April 30, 1998), from Albert T. Sabol to James T. Conversano. U.S. Department of Justice.

3. Letter dated June 22, 1998 (with attachments consisting of copies of Central's slide presentation materials presented to the staff on June 17, 1998), from Michael A. Bloom, Morgan, Lewis & Bockius, L.L.P., to Eric L. Stone, CPSC.
a) Central Summary of Projected Omega Expense and Available Cash Flow
b) Central Analysis of Omega Costs for Class Action Settlement (2 years) as of April 30, 1998
c) Central Estimated Total Available Cash over Two Years
d) Central Analysis of Quarterly Cash Flow, Class Action Settlement Agreement (Cumulative % of Heads to be Located of 40%, 50%, and 60%)
e) Central Analysis of Omega Costs, CPSC Proposal, Heads with Silicone Rings not Remediated, as of April 30, 1998
f) Central Analysis of Quarterly Cash Flow, Heads with Silicone Rings not Remediated (Cumulative % of Heads to be Located of 40%)
g) Central Analysis of Omega Costs, CPSC Proposal, Heads with Silicone Rings not Remediated, as of April 30, 1998
h) Central Analysis of Quarterly Cash Flow-CPSC Program, Heads with Silicone Rings not Remediated (Cumulative % of Heads to be Located of 40%)


h) Central Financial Covenant Compliance and Z-Score Analysis (7/28/98)
i) Central Outstanding Debt and Interest Expense Analysis (7/28/98)
j) Central Projected Statement of Cash Flow (7/28/98)
1) Central Settlement Cost Summary (7/28/98)
m) Central Glass Bulb Replacement Cost Analysis (7/28/98)
n) Central Customer Service and Administrative Costs (7/28/98)
o) Central Omega Reserve Analysis (7/28/98)

6. Package on July 28, 1998 (consisting of Central Sprinkler Corporation's Slide Presentation for the staff of the CPSC on July 28, 1998), from E. Talbot Briddell to Eric L. Stone.

7. Facsimile dated July 31, 1998 (with attachment), from Michael E. Jacoby, Phoenix Management Services, Inc., to Howard N. Tarnoff, CPSC, and James T. Conversano.
a) Central Revised Budget Forecasts
b) Central Consolidated Six Month Actual and Six Month Budget, Fiscal Year 1998

8. Package dated July 31, 1998 (with attachments regarding Central's loan covenants), from Michael E. Jacoby to Howard N. Tarnoff and James T. Conversano.
a) Credit Agreement dated October 28, 1997, among Central, et al, and The Lenders Identified Herein and CoreStates Bank, N.A.
b) Waiver Letter dated June 11, 1998, from Francis J. Coldren, First Union National Bank, to Central Sprink1er Corporation
c) Modification to Credit Agreement dated January 31, 1998, among Central, et al, and The Lenders Identified Herein and CoreStates Bank N.A.

9. Facsimile dated August 3, 1998 (with attachments), from Michael E. Jacoby to Howard N. Tarnoff.
a) Central Projected Income Statement (8/3/98)
b) Central Projected Income Statement Ratios (8/3/98)

3

c) Central Income Statement Assumptions (8/3/98)
d) Central Projected Balance Sheet Assets (8/3/98)
e) Central Projected Balance Sheet Liabilities and Equity (8/3/98)
f) Central Balance Sheet Assumptions (8/3/98)
g) Central Financial Covenant Compliance and Z-Score Analysis (8/3/98)
h) Central Deferred Tax Rollforward (8/3/98)
i) Central Outstanding Debt and Interest Expense Analysis (8/3/98)
j) Central Projected Statement of Cash Flow (8/3/98)

10. Letter dated August 6, 1998 (with attachments), from Kathleen M. Sanzo to Deborah S. Orlove, CPSC. This letter was sent in response to Deborah S. Orlove's letter dated July 30, 1998, to J. Gordon Cooney, Jr., regarding the Omega Remediation Program and Belleville Seal Glass Bulb Sprinklers.

11. Letter dated August 24, 1998 (with attachments), from E. Talbot Briddell to Howard N. Tarnoff.
a) Central Outstanding Debt and Interest Expense Analysis (8/20/98)
b) Central Estimated Liquidation Analysis, April 30, 1998 Assets
(8/20/98)
c) Report dated January 9, 1998 by Brown Brothers Harriman & Company and Cushman & Wakefield of Georgia, Inc., regarding Complete Appraisal of Real Property of Central CPVC Facility
d) Report dated April 27, 1998 by MB Valuation Services, Inc., regarding Appraisal of Equipment located at Central CPVC Facility

12. Facsimile dated September 1, 1998 (with attachments), from E. Talbot Briddell to Eric L. Stone and Deborah S. Orlove.
a) Automation of Glass Bulb Line in Support of Omega Replacement Program
b) Central NPV Analysis, Automation of Glass Bulb Line

13. Facsimile dated September 14, 1998 (with attachment), from Kathleen M. Sanzo to Deborah S. Orlove.
a) Central Customer Service and Administrative Costs (9/12/98)

4

14. Letter dated September 17, 1998 (with Exhibits), from Michael E. Jacoby to Howard N. Tarnoff.
a) Central Customer Service and Administrative Personnel Projected Fiscal 1999 Head Count and Salary (9/17/98)
b) Central Customer Service and Administrative Personnel Projected Head Count (9/17/98)

15. Letter dated September 18, 1998 (with attachments), from E. Talbot Briddell to Howard N. Tarnoff.
a) Appendix A - Glass Bulb Replacement Cost Analysis
b) Central Projected Fiscal 1998 Income Statement - 9 Months Actual and 3 Months Budget (9/14/98)
c) Central Projected Income Statement (9/14/98)
d) Central Projected Income Statement Ratios (9/14/98)
e) Central Income Statement Assumptions (9/14/98)
f) Central Projected Balance Sheet Assets (9/14/98)
g) Central Projected Balance Sheet Liabilities and Equity (9/14/98)
h) Central Balance Sheet Assumptions (9/14/98)
i) Central Deferred Tax Rollforward (9/14/98)
j) Central Outstanding Debt Analysis (9/14/98)
k) Central Interest Expense Analysis (9/14/98)
l) Central Projected Statement of Cash Flow (9/14/98)
m) Central Settlement Cost Summary (9/14/98)
n) Central Sensitivity Analysis of Settlement Costs Based on number of Replacement Units (9/14/98)
o) Central Omega Reserve Analysis (9/14/98)
p) Central Per unit Glass Bulb Replacement Cost Analysis (9/14/98)
q) Central Customer Service and Administrative Costs (9/14/98)
r) Central Omega Inventory Analysis (9/14/98)
s) Central Reconciliation with Prior Financial Package (9/14/98)
t) Central's Draft Form 10-Q for July 31, 1998.

Accepted and Approved:                        Accepted and Approved:


/s/  XXXXXXXXXX                              /s/ XXXXXXXXXX
-------------------------                    ---------------------------------
CPSC Office of Compliance                    Respondents Central Sprinkler Co.
                                             and Central Sprinkler Corp.

5

APPENDIX
E


APPENDIX E

LIST OF REPORTABLE FMRC AND UL TEST STANDARD RESULTS

UL 199 and FMRC Approval Standard (Class 2000 Series)

1. Strength of Heat Responsive Element (UL and FM)

2. Hyrostatic Strenght Test (UL and FM)

3. Water Hammer (UL and FM)

4. Operating Temp (UL and FM)

5. Vacuum Test (UL and FM)

6. Rough Use and Abuse (UL and FM)

7. Hang-Up (FM)

8. Thermal Shock (FM)

9. Moist Air (FM)

10. Corrosion (FM)

Salt
Stress Cracking
Co2 - So2
H2S
Vibration

11. Minimum Operation Pressure (FM)

12. Sensitivity (RTI)

13. Sensitivity (FM)

14. Fire Standard Crib (FM)


15. Operation - Cold Soldering (UL)

16. Impact Resistance Test (UL)

17. 10-Day Corrosion (UL)

18. 30 Day Corrosion (UL)

19. 90 Day Moist Air (UL)

20. Stress Corrosion Cracking - Brass Parts (UL)

21. Stress Corrosion Cracking - Stainless Steel (UL)

22. Operational Tests on Gaskets/O-Ring Seals (UL)

23. Elastomeric Parts Fire (350 lb) Crib (UL)

UL 1626

24. Strength of Heat Responsive Element

25. Hydrostatic Strength

26. Water Hammer

27. Operating Temperature (Bath)

28. Operation - Lodgment

29. Operation - Cold Soldering

30. Fire Test

31. Corrosion Exposure Test

32. Moist Air Test

2

33. Stress Corrosion Cracking - Brass

34. Stress Corrosion Cracking - Steel

35. Elastomeric Parts

36. Rough Use

37. Sensitivity

38. Vacuum

Accepted and Approved:                        Accepted and Approved:


/s/ XXXXXXXXXX                               /s/ XXXXXXXXXX
-------------------------                    ---------------------------------
CPSC Office of Compliance                    Respondents Central Sprinkler Co.
                                             and Central Sprinkler Corp.

3

EXHIBIT 10(u)

LOAN AND SECURITY AGREEMENT

by and among

CONGRESS FINANCIAL CORPORATION
as Lender

and

CENTRAL SPRINKLER COMPANY
CENTRAL CASTINGS CORPORATION
CENTRAL CPVC CORPORATION
as Borrowers

and

CENTRAL SPRINKLER CORPORATION
CENTRAL SPRINKLER EXPORT CORPORATION
as Guarantors

Dated: September 18, 1998


TABLE OF CONTENTS

                                                                                                               Page
                                                                                                               ----
SECTION  1.       DEFINITIONS.....................................................................................1

SECTION  2.       CREDIT FACILITIES
         2.1      Revolving Loans................................................................................20
         2.2      Letter of Credit Accommodations; Supplemental Letter
                     of Credit Accommodations....................................................................22
         2.3      Term Loan......................................................................................27
         2.4      Equipment Purchase Term Loans..................................................................27
         2.5      Availability Reserves..........................................................................29
         2.6      Joint and Several Liability....................................................................29

SECTION  3.       INTEREST AND FEES
         3.1      Interest.......................................................................................30
         3.2      Closing Fee....................................................................................32
         3.3      Servicing Fee..................................................................................32
         3.4      Unused Line Fee................................................................................32
         3.5      Changes in Laws and Increased Costs of Loans...................................................32

SECTION  4.       CONDITIONS PRECEDENT
         4.1      Conditions Precedent to Initial Loans and Letter of
                     Credit Accommodations and Supplemental Letter of
                     Credit Accommodations.......................................................................33
         4.2      Conditions Precedent to All Loans and Letter of Credit
                     Accommodations..............................................................................36

SECTION  5.       GRANT OF SECURITY INTEREST.....................................................................37

SECTION  6.       COLLECTION AND ADMINISTRATION
         6.1      Borrowers' Loan Accounts.......................................................................38
         6.2      Statements.....................................................................................39
         6.3      Collection of Accounts.........................................................................39
         6.4      Payments.......................................................................................41
         6.5      Authorization to Make Loans....................................................................41
         6.6      Appointment of Agent for Requesting Loans, Letter of
                     Credit Accommodations, Supplemental Letter of Credit
                     Accommodation and Receipt of Loans and Statements...........................................42
         6.7      Use of Proceeds................................................................................42


SECTION  7.        COLLATERAL REPORTING AND COVENANTS............................................................43
         7.1      Collateral Reporting...........................................................................43
         7.2      Accounts Covenants.............................................................................44
         7.3      Inventory Covenants............................................................................46
         7.4      Equipment Covenants............................................................................47
         7.5      Power of Attorney..............................................................................47
         7.6      Right to Cure..................................................................................48
         7.7      Access to Premises.............................................................................48

SECTION  8.        REPRESENTATIONS AND WARRANTIES................................................................49
         8.1      Corporate Existence, Power and Authority; Subsidiaries.........................................49
         8.2      Financial Statements; No Material Adverse Change...............................................49
         8.3      Chief Executive Office; Collateral Locations...................................................50
         8.4      Priority of Liens; Title to Properties.........................................................50
         8.5      Tax Returns....................................................................................50
         8.6      Litigation.....................................................................................50
         8.7      Compliance with Other Agreements and Applicable Laws...........................................51
         8.8      Bank Accounts..................................................................................51
         8.9      Environmental Compliance.......................................................................51
         8.10     Employee Benefits..............................................................................52
         8.11     Interrelated Businesses........................................................................53
         8.12     Accuracy and Completeness of Information.......................................................53
         8.13     Survival of Warranties; Cumulative.............................................................53

SECTION  9.       AFFIRMATIVE AND NEGATIVE COVENANTS.............................................................53
         9.1      Maintenance of Existence.......................................................................53
         9.2      New Collateral Locations.......................................................................54
         9.3      Compliance with Laws, Regulations, Etc. .......................................................54
         9.4      Payment of Taxes and Claims....................................................................55
         9.5      Insurance......................................................................................56
         9.6      Financial Statements and Other Information.....................................................57
         9.7      Sale of Assets, Consolidation, Merger, Dissolution, Etc........................................59
         9.8      Encumbrances...................................................................................60
         9.9      Indebtedness...................................................................................62
         9.10     Loans, Investments, Guarantees, Etc............................................................67
         9.11     Dividends and Redemptions......................................................................69
         9.12     Transactions with Affiliates...................................................................69
         9.13     Additional Bank Accounts.......................................................................71

(ii)

         9.14     Compliance with ERISA..........................................................................71
         9.15     Adjusted Tangible Net Worth....................................................................72
         9.16     Remarketing of Huntsville Bonds................................................................72
         9.17     Costs and Expenses.............................................................................72
         9.18     After Acquired Real Property...................................................................73
         9.19     Further Assurances.............................................................................73

SECTION  10.      EVENTS OF DEFAULT AND REMEDIES.................................................................74
         10.1     Events of Default..............................................................................74
         10.2     Remedies.......................................................................................76

SECTION  11.      JURY TRIAL WAIVER; OTHER WAIVERS
                     AND CONSENTS; GOVERNING LAW.................................................................77
         11.1     Confession of Judgment.........................................................................77
         11.2     Governing Law; Choice of Forum; Service of Process;
                     Jury Trial Waiver...........................................................................78
         11.3     Waiver of Notices..............................................................................79
         11.4     Amendments and Waivers.........................................................................79
         11.5     Waiver of Counterclaims........................................................................80
         11.6     Indemnification................................................................................80

SECTION  12.      TERM OF AGREEMENT; MISCELLANEOUS...............................................................80
         12.1     Term...........................................................................................80
         12.2     Notices........................................................................................82
         12.3     Partial Invalidity.............................................................................82
         12.4     Successors.....................................................................................83
         12.5     Participant's Security Interest................................................................83
         12.6     Entire Agreement...............................................................................83

(iii)

INDEX TO
EXHIBITS AND SCHEDULES

Exhibit A         Information Certificates for each of Central,
                    Castings, CPVC, CSC and CS Export

Exhibit B         Borrowing Base Certificate

Exhibit C         Form of Equipment Purchase Loan Note

Schedule 1.42     Existing Letters of Credit

Schedule 1.44     First Union Letter of Credit Documents

Schedule 1.64     Description of Omega Litigation

Schedule 1.67     Permitted Holders

Schedule 8.4      Existing Liens

Schedule 8.8      Bank Accounts

Schedule 8.9      Environmental Matters

Schedule 9.8(f)   Description of First Union Collateral for Letters of Credit

Schedule 9.9      Existing Indebtedness

Schedule 9.10     Existing Loans, Advances and Guarantees

(i)

LOAN AND SECURITY AGREEMENT

This Loan and Security Agreement, dated as of September 18, 1998, is entered into by and among Congress Financial Corporation, a Delaware corporation ("Lender"), Central Sprinkler Company, a Pennsylvania corporation ("Central"), Central Castings Corporation, an Alabama corporation ("Castings") and Central CPVC Corporation, an Alabama corporation ("CPVC", and together with Central and Castings, each individually, a "Borrower" and collectively, "Borrowers") and Central Sprinkler Corporation, a Pennsylvania corporation ("CSC"), and Central Sprinkler Export Corporation, a Barbados corporation ("CS Export", and together with CSC, each individually a "Guarantor" and collectively, "Guarantors").

W I T N E S S E T H:

WHEREAS, Borrowers and Guarantors have requested that Lender enter into certain financing arrangements with Borrowers pursuant to which Lender may make loans and provide other financial accommodations to Borrowers; and

WHEREAS, Lender is willing to make such loans and provide such financial accommodations on the terms and conditions set forth herein;

NOW, THEREFORE, in consideration of the mutual conditions and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

SECTION 1. DEFINITIONS

All terms used herein which are defined in Article 1 or Article 9 of the Uniform Commercial Code shall have the meanings given therein unless otherwise defined in this Agreement. All references to the plural herein shall also mean the singular and to the singular shall also mean the plural unless the context otherwise requires. All references to Borrowers pursuant to the definitions set forth in the recitals hereto, unless the context otherwise requires, shall mean each and all of them and their respective successors and assigns, individually and collectively, jointly and severally. All references to Guarantors pursuant to the definitions set forth in the recitals hereto, unless the context otherwise requires, shall mean each and all of them and their respective successors and assigns, individually and collectively, jointly and severally. All references to Lender pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and assigns. The words "hereof", "herein", "hereunder", "this Agreement" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not any particular provision of this Agreement and as this Agreement now exists or may hereafter be amended, modified,


supplemented, extended, renewed, restated or replaced. The word "including" when used in this Agreement shall mean "including, without limitation". An Event of Default shall exist or continue or be continuing until such Event of Default is waived in accordance with Section 11.3 hereof or is cured in a manner satisfactory to Lender. Any accounting term used herein unless otherwise defined in this Agreement shall have the meanings customarily given to such term in accordance with GAAP. For purposes of this Agreement, the following terms shall have the respective meanings given to them below:

1.1 "Accounts" shall mean all present and future rights of each Borrower to payment for goods sold or leased or for services rendered, which are not evidenced by instruments or chattel paper, and whether or not earned by performance.

1.2 "Adjusted Eurodollar Rate" shall mean, with respect to each Interest Period for any Eurodollar Rate Loan, the rate per annum (rounded upwards, if necessary, to the next one-sixteenth (1/16) of one (1%) percent) determined by dividing (a) the Eurodollar Rate for such Interest Period by (b) a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes hereof, "Reserve Percentage" shall mean the reserve percentage, expressed as a decimal, prescribed by any United States or foreign banking authority for determining the reserve requirement which is or would be applicable to deposits of United States dollars in a non-United States or an international banking office of Reference Bank used to fund a Eurodollar Rate Loan or any Eurodollar Rate Loan made with the proceeds of such deposit, whether or not the Reference Bank actually holds or has made any such deposits or loans. The Adjusted Eurodollar Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage.

1.3 "Adjusted Tangible Net Worth" shall mean as to any Person, at any time, in accordance with GAAP (except as otherwise specifically set forth below), on a consolidated basis for such Person and its Subsidiaries (if any), the amount equal to the difference between: (a) the aggregate net book value of all assets of such Person and its Subsidiaries (excluding the value of patents, trademarks, copyrights, licenses, goodwill and other intangible assets), calculating the book value of inventory for this purpose on a first-in-first-out basis, after deducting from such book values all appropriate reserves in accordance with GAAP (including all reserves for doubtful receivables, obsolescence, depreciation and amortization) and (b) the aggregate amount of the indebtedness and other liabilities of such Person and its Subsidiaries (including tax and other proper accruals).

1.4 "Alabama State Bond Agreements" shall mean collectively, the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced): (a) the Trust Indenture, dated as of November 1, 1995, between the State of Alabama Industrial Development Authority and the Alabama State Bond Trustee; (b) the Loan Agreement, dated as of November 1, 1995, between the State of Alabama Industrial Development Authority and Castings; (c) the Central Castings Corporation $8,000,000 Registered Promissory Note, dated November 21, 1995, issued by Castings payable to the State of Alabama Industrial Development Authority; (d) the Tender Agent Agreement, dated as of November 1, 1995, by and among Castings,

-2-

the Alabama State Board Trustee and The Chase Manhattan Bank (formerly known as Chemical Bank) as Tender Agent under the Trust Indenture referred to above; and
(e) all agreements, documents and instruments at any time executed and/or delivered by any Borrower or Guarantor in connection with any of the foregoing.

1.5 "Alabama State Bond Letter of Credit" shall mean Letter of Credit No. 40019564, dated November 21, 1995, issued by First Union National Bank (as successor by merger to First Fidelity Bank, National Association) for the account of Castings payable to the Alabama State Bond Trustee in the amount of up to $8,150,000, as adjusted from time to time in accordance with the terms thereof, as the same now exists or may hereafter be amended, modified, supplemented, extended, received, restated or replaced.

1.6 "Alabama State Bonds" shall mean, collectively, the Adjustable Convertible Taxable Industrial Revenue Bonds (Central Castings Corporation Project) Series 1995 issued by the State of Alabama Industrial Development Authority in the original principal amount of $8,000,000, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.7 "Alabama State Bond Trustee" shall mean The Chase Manhattan Bank, a New York banking corporation (formerly known as Chemical Bank) in its capacity as trustee for the holders of the Alabama State Bonds and any successor, replacement or additional trustee, and their respective successors and assigns.

1.8 "Availability Reserves" shall mean, as of any date of determination, such amounts as Lender may from time to time, establish and revise in good faith reducing the amount of Revolving Loans and Letter of Credit Accommodations that would otherwise be available to Borrowers under the lending formula(s) provided for herein: (a) to reflect events, conditions, contingencies or risks that, as determined by Lender in good faith, do or may affect either
(i) the Collateral or any other property which is security for the Obligations or its value, or (ii) the security interests and other rights in the Collateral of Lender (including the enforceability, perfection and priority thereof), or
(iii) the assets, business or prospects of any Borrower or Guarantor; (b) to reflect Lender's good faith belief that any collateral report or financial information furnished by or on behalf of any Borrower or Obligor to Lender is or may have been incomplete, inaccurate or misleading in any material respect; (c) in respect of any state of facts which Lender determines in good faith constitutes an Event of Default or may, with notice or passage of time or both, constitute an Event of Default; (d) to reflect outstanding Letter of Credit Accommodations as provided in Section 2.2 hereof; (e) to reflect variances in the physical counts of Inventory conducted by Lender from time to time from the amounts of Inventory reflected in the books and records of Borrowers; (f) to reflect indebtedness of Borrowers in connection with the Alabama State Bond Agreements in excess of the amount of the Alabama State Bond Letter of Credit and in connection with the Calhoun County Bond Agreements in excess of the amount of the Calhoun County Bond Letter of Credit; (g) to reflect that dilution with respect to the Accounts for any period (based on the ratio of (i) the

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aggregate amount of reduction in Accounts other than as a result of payments in cash to (ii) the aggregate amount of total sales) is greater than five (5%) percent and (h) the Special Availability Reserve. To the extent Lender may revise the lending formula set forth in Section 2.1 hereof or establish new criteria or revise existing criteria for Eligible Accounts or Eligible Inventory so as to address any circumstance, condition, event or contingency in a manner satisfactory to Lender, Lender shall not establish an Availability Reserve for the same purpose. The amount of any Availability Reserve established by Lender shall have a reasonable relationship to the event, condition or other matter which is the basis for such reserve as determined by Lender in good faith.

1.9 "Blocked Accounts" shall have the meaning set forth in Section 6.3 hereof.

1.10 "Borrowing Base Certificate" shall mean a certificate substantially in the form of Exhibit B hereto, as such form may from time to time be modified by Lender, which is duly completed (including all schedules thereto) and executed by the chief financial officer or other appropriate financial officer of Borrowers acceptable to Lender and delivered to Lender.

1.11 "Business Day" or "business day" shall mean any day other than a Saturday, Sunday, or other day on which commercial banks are authorized or required to close under the laws of the State of New York or the Commonwealth of Pennsylvania, and a day on which the Reference Bank and Lender are open for the transaction of business, except that if a determination of a Business Day shall relate to any Eurodollar Rate Loans, the term Business Day shall also exclude any day on which banks are closed for dealings in dollar deposits in the London interbank market or other applicable Eurodollar Rate market.

1.12 "Calhoun County Bond Agreements" shall mean collectively, the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced): (a) the Trust Indenture, dated as of November 1, 1995, between the Calhoun County Economic Development Council and the Calhoun County Bond Trustee, (b) the Lease Agreement, dated as of November 1, 1995, between the Calhoun County Economic Development Council and Castings and (c) all agreements, documents and instruments at any time executed and/or delivered by any Borrower or Guarantor in connection with any of the foregoing.

1.13 "Calhoun County Bond Letter of Credit" shall mean Letter of Credit No. 40019894, dated November 21, 1995, issued by First Union National Bank (as successor by merger to First Fidelity Bank, National Association) for the account of Castings payable to the Calhoun County Bond Trustee as beneficiary in the amount of up to $3,056,250, as adjusted from time to time in accordance with the terms thereof, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.14 "Calhoun County Bonds" shall mean, collectively, the Adjustable Convertible Taxable Industrial Revenue Bonds (Central Castings Corporation Project) Series 1995 issued by the Calhoun County Economic Development Council in the original principal amount of $3,000,000, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

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1.15 "Calhoun County Bond Trustee" shall mean The Chase Manhattan Bank, a New York banking corporation (formerly known as Chemical Bank) in its capacity as trustee for the holders of the Calhoun County Bonds and any successor, replacement or additional trustee, and their respective successors and assigns.

1.16 "Capital Stock" shall mean, with respect to any Person, any and all shares, interests, participations or other equivalents (however designated) of such Person's capital stock or any membership interest at any time outstanding, and any and all rights, warrants or options exchangeable for or convertible into such capital stock or membership interest (but excluding any debt security that is exchangeable for or convertible into such capital stock).

1.17 "Cash Equivalents" shall mean any of the following: (a) any investment in direct obligations of the United States of America or any agency thereof or obligations guaranteed by the United States of America or any agency thereof; (b) investments in time deposit accounts, certificates of deposit and money market deposits maturing within one hundred eighty (180) days of the date of acquisition thereof issued by a bank or trust company which is organized under the laws of the United States of America, any state thereof or any foreign country recognized by the United States, and which bank or trust company has capital, surplus and undivided profits aggregating in excess of $50,000,000 (or the foreign currency equivalent thereof) and has outstanding debt which is rated "A" (or such similar equivalent rating) or higher by at least one nationally recognized statistical rating organization (as defined in Rule 436 under the Exchange Act; (c) repurchase obligations with a term of not more than thirty
(30) days for underlying securities of the types described in clause (a) above entered into with a bank meeting the qualifications described in clause (b) above; (d) investments in commercial paper maturing not more than ninety (90) aw Hill Companies, Inc.; (e) investments in securities with maturities of six (6) months or less from the date of acquisition issued or fully guaranteed by any State of the United States of America, or by any political subdivision or taxing authority thereof, and rated at least "A" by Standard & Poor's Ratings Group, a division of The McGraw Hill Companies, Inc. or "A" by Moody's Investor Service, Inc.; and (f) investments in money market funds and mutual funds which invest substantially all of their assets in securities of the types described in clauses (a) through (e) above.

1.18 "Change of Control" shall mean the occurrence of any of the following: (a) all or substantially all of any Borrower's or Guarantor's assets are sold, in one or in a series of transactions to any "person" or "group" (as such terms are used in Sections 14(d)(2) and 13(d)(3), respectively, of the

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Exchange Act) other than to a Permitted Holder; (b) an event or series of events (whether a stock purchase, amalgamation, merger, consolidation or other business combination or otherwise) by which any person or group (other than a Permitted Holder) is or becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act) directly or indirectly of fifty (50%) percent or more of the combined voting power of the then outstanding securities of any Borrower or Guarantor ordinarily (and apart from rights accruing under certain circumstances) having the right to vote in election of directors or (c) after the date of this Agreement, the replacement of a majority of the Board of Directors of any Borrower or Guarantor over a two (2) year period commencing from the date of this Agreement from the directors who constituted the Board of Directors at the beginning of such period other than directors whose nominations for election by the stockholders of such Borrower or Guarantor was approved by such Board of Directors.

1.19 "Code" shall mean the Internal Revenue Code of 1986, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

1.20 "Collateral" shall have the meaning set forth in Section 5 hereof.

1.21 "Collateral Access Agreement" shall mean an agreement in writing, in form and substance satisfactory to Lender, from any lessor of premises to any Borrower or Guarantor, or any other person to whom any Inventory is consigned or who has custody, control or possession of any Inventory or Equipment or is otherwise the owner or operator of any premises on which any Inventory or Equipment is located pursuant to which such lessor, consignee or other person, inter, alia, acknowledges the first priority security interest of Lender in such Inventory or Equipment, agrees to waive any and all claims such lessor, consignee or other person may, at any time, have against such Inventory or Equipment, whether for processing, storage or otherwise, and agrees to permit Lender access to, and the right to remain on, the premises of such lessor, consignee or other person so as to exercise Lender's rights and remedies and otherwise deal with the Collateral.

1.22 "Consolidated Net Income" shall mean, with respect to any Person for any period, the aggregate of the net income (loss) of such Person and its Subsidiaries, on a consolidated basis, for such period (excluding to the extent included therein any extraordinary and/or unusual and non-recurring gains other than any such gains to the extent of cash or other immediately available funds received by such Person and its Subsidiaries) after deducting all charges which should be deducted before arriving at the net income (loss) for such period and, without duplication, after deducting the Provision for Taxes for such period, all as determined in accordance with GAAP; provided, that, (a) the net income of any Person that is not a wholly-owned Subsidiary or that is accounted for by the equity method of accounting shall be included only to the extent of the amount of dividends or distributions paid or payable to such Person or a wholly-owned Subsidiary of such Person; (b) except to the extent included pursuant to the foregoing clause, the net income of any Person accrued prior to the date it becomes a wholly-owned Subsidiary of such Person or is merged into or

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consolidated with such Person or any of its wholly-owned Subsidiaries or that Person's assets are acquired by such Person or by its wholly-owned Subsidiaries shall be excluded; and (c) the net income (if positive) of any wholly-owned Subsidiary to the extent that the declaration or payment of dividends or similar distributions by such wholly-owned Subsidiary to such Person or to any other wholly-owned Subsidiary of such Person is not at the time permitted by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to such wholly-owned Subsidiary shall be excluded. For the purposes of this definition, (i) net income excludes any gain (or loss) together with any related Provision for Taxes for such gain (or loss) realized upon the sale or other disposition of any assets that are not sold in the ordinary course of business (including, without limitation, dispositions pursuant to sale and leaseback transactions) or of any Capital Stock of such Person or a Subsidiary of such Person, other than any such gains with respect thereto the extent of cash or other immediately available funds received by such Person and its Subsidiaries and any net income realized or loss incurred as a result of changes in accounting principles or the application thereof to such Person, and (ii) the term "Provision for Taxes" shall mean an amount equal to all taxes imposed on or measured by net income, whether Federal, State, Provincial, county or local, and whether foreign or domestic, that are paid or payable by any Person in respect of any period in accordance with GAAP.

1.23 "CPSC Action" shall mean the action brought against CSC and Central by the staff of the Consumer Product Safety Commission (the "CPSC") pursuant to the Administrative Complaint filed by the CPSC against CSC and Central on March 3, 1998 seeking the recall and replacement of the Omega TM fire sprinkler products manufactured and sold by Central pursuant to 15 U.S.C. ss.2064, referred to as In the Matter of Central Sprinkler Corp. and Central Sprinkler Co., Respondents, CPSC Docket No. 98-2.

1.24 "CSC Finance" shall mean CSC Finance Company, a Delaware corporation, and its successors and assigns.

1.25 "CSC Investment" shall mean CSC Investment Company, a Delaware corporation, as its successors and assigns.

1.26 "Eligible Accounts" shall mean, as to each Borrower, the Accounts created by such Borrower which are and continue to be acceptable to Lender based on the criteria set forth below. In general, an Account shall be an Eligible Account if:

(a) such Account arises from the actual and bona fide sale and delivery of goods by such Borrower or rendition of services by such Borrower in the ordinary course of its business which transactions are completed in accordance with the terms and provisions contained in any documents related thereto;

(b) such Account is not unpaid after the earlier of sixty (60) days after the original due date for them or one hundred twenty (120) days after the date of the original invoice for them;

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(c) such Account complies with the terms and conditions contained in Section 7.2(c) of this Agreement;

(d) such Account does not arise from sales on consignment, guaranteed sale, sale and return, sale on approval, or other terms under which payment by the account debtor may be conditional or contingent;

(e) the chief executive office of the account debtor with respect to such Account is located in the United States of America or Canada (provided, that, at any time promptly upon Lender's request, Borrowers shall execute and deliver, or cause to be executed and delivered, such other agreements, documents and instruments as may be required by Lender to perfect the security interests of Lender in those Accounts of an account debtor with its chief executive office or principal place of business in Canada in accordance with the applicable laws of the Province of Canada in which such chief executive office or principal place of business is located and take or cause to be taken such other and further actions as Lender may request to enable Lender as secured party with respect thereto to collect such Accounts under the applicable Federal or Provincial laws of Canada) or, at Lender's option, if the chief executive office and principal place of business of the account debtor with respect to such Accounts is located other than in the United States of America or Canada, then if either: (i) the account debtor has delivered to such Borrower an irrevocable letter of credit issued or confirmed by a bank satisfactory to Lender, sufficient to cover such Account, in form and substance satisfactory to Lender and, if required by Lender and payable only in the United States of America and in United States dollars, the original of such letter of credit has been delivered to Lender or Lender's agent and the issuer thereof notified of the assignment of the proceeds of such letter of credit to Lender, or (ii) such Account is subject to credit insurance payable to Borrower and/or Lender prior to an Event of Default and solely to Lender after an Event of Default and issued by an insurer and on terms and in an amount acceptable to Lender, or (iii) such Account is otherwise acceptable in all respects to Lender (subject to such lending formula with respect thereto as Lender may determine);

(f) such Accounts does not consist of progress billings, bill and hold invoices or retainage invoices, except as to bill and hold invoices, if Lender shall have received an agreement in writing from the account debtor, in form and substance satisfactory to Lender, confirming the unconditional obligation of the account debtor to take the goods related thereto and pay such invoice;

(g) the account debtor with respect to such Account has not asserted a counterclaim, defense or dispute and does not have, and does not engage in transactions which may give rise to, any right of setoff against such Account (but the portion of the Accounts of such account debtor in excess of the amount at any time and from time to time owed by such Borrower to such account debtor or claimed owed by such account debtor may be deemed Eligible Accounts);

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(h) there are no facts, events or occurrences which have impaired the validity, enforceability or collectability of such Account or reduced the amount payable or delay payment thereunder;

(i) such Account is subject to the first priority, valid and perfected security interest of Lender and any goods giving rise thereto are not, and was not at the time of the sale thereof, subject to any liens except those permitted in this Agreement;

(j) neither the account debtor nor any officer or employee of the account debtor with respect to such Account is an officer, employee or agent of or affiliated with any Borrower or Guarantor directly or indirectly by virtue of family membership, ownership, control, management or otherwise;

(k) the account debtor with respect to such Accounts is not any foreign government, the United States of America, any State, political subdivision, department, agency or instrumentality thereof, unless, if the account debtor is the United States of America, any State, political subdivision, department, agency or instrumentality thereof, upon Lender's request, the Federal Assignment of Claims Act of 1940, as amended or any similar State or local law, if applicable, has been complied with in a manner satisfactory to Lender;

(l) there are no proceedings or actions that are pending, or to the best of the knowledge of Borrowers, threatened, against the account debtor with respect to such Accounts which have resulted in or have a reasonable likelihood of resulting in any material adverse change in any such account debtor's financial condition;

(m) all Accounts of a single account debtor or its affiliates do not constitute more than ten (10%) percent of all otherwise Eligible Accounts of Borrowers (but the portion of the Accounts of such account debtor not in excess of such percentages may be deemed Eligible Accounts);

(n) such Account is not owed by an account debtor who has Accounts unpaid after the earlier of sixty (60) days after the original due date for them or one hundred twenty (120) days after the date of the original invoice for them, which constitute more than fifty (50%) percent of the total Accounts of such account debtor;

(o) such Account is owed by account debtors whose total indebtedness to Borrowers does not exceed the credit limit with respect to such account debtor used by Borrowers in accordance with the current policies of Borrowers as in effect on the date hereof and acceptable to Lender (but the portion of the Accounts of such account debtor not in excess of such credit limit may be deemed Eligible Accounts); and

(p) such Account is owed by an account debtor deemed creditworthy at all times by Lender, as determined in good faith by Lender.

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General criteria for Eligible Accounts may be established and revised from time to time by Lender in good faith based on an event, condition or other circumstance arising after the date hereof, or existing on the date hereof to the extent Lender has no written notice thereof from Borrowers, which adversely affects or could reasonably be expected to adversely affect the Accounts in the good faith determination of Lender. Any Accounts which are not Eligible Accounts shall nevertheless be part of the Collateral.

1.27 "Eligible Cash Collateral" shall mean the cash or Cash Equivalents of Central which are: (a) held in account no. 23128002 in the name of Central at First Union Capital Markets, a Division of Wheat First Securities, Inc. (the "Collateral Account") or held by Lender subject to a cash collateral pledge agreement by such Borrower in favor of Lender, in form and substance satisfactory to Lender; (b) free and clear of any lien, security interest, claim or other encumbrance or restriction, except in favor of Lender; (c) at all times on and after September 25, 1998, subject to the first priority, valid and perfected security interest and pledge in favor of Lender; (d) if held at First Union Capital Markets, a Division of Wheat First Securities, Inc., on and after September 25, 1998, subject to an account control agreement by and among First Union Capital Markets, a Division of Wheat First Securities, Inc., Borrowers and Lender, in form and substance satisfactory to Lender and duly authorized, executed and delivered by First Union Capital Markets, a Division of Wheat First Securities, Inc., and Borrowers; and (e) available to such Borrower without condition or restriction except those arising pursuant to the pledge in favor of Lender. Notwithstanding anything to the contrary contained herein, no cash or Cash Equivalent of Borrowers shall constitute Eligible Cash Collateral on and after the close of business on September 25, 1998 unless on or before such date either: (i) Lender shall have received, in form and substance satisfactory to Lender, both: (A) an account control agreement with respect to the account at which such cash or Cash Equivalents are held, duly authorized, executed and delivered by First Union Capital Markets, a Division of Wheat First Securities, Inc., and Borrowers and (B) a pledge agreement with respect thereto by Borrowers in favor of Lender, duly authorized, executed and delivered by Borrowers or (ii) Lender shall have received, in form and substance satisfactory to Lender, both (A) cash or other immediately available funds constituting the Eligible Cash Collateral to be held by Lender in its possession and (B) a cash collateral pledge agreement by Borrowers in favor of Lender with respect to all such funds received by Lender, duly authorized, executed and delivered by Borrowers.

1.28 "Eligible Equipment" shall mean, as to each Borrower, Equipment owned by such Borrower, which is in good order, repair, running and marketable condition, located at such Borrower's premises and acceptable to Lender in all respects. In general, Eligible Equpment shall not include: (a) Equipment at premises other than those owned and controlled by such Borrower, except for Equipment at locations leased by such Borrower if either (i) Lender shall have received a Collateral Access Agreement from the owner and lessor of such premises in form and substance satisfactory to Lender, or (ii) if Lender shall not have received such an agreement, the Lender shall have, at its option either (A) established an Availability Reserve with respect to amounts due or to become due to the owner and lessor of such premises pursuant to Section 1.28(e) below or (b) reduced the amount of the Equipment Purchase Term Loan based on

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such Eligible Equipment by amounts due or to become due to the owner and lessor of such premises in the good faith determination of Lender by an amount equal to the Availability Reserves that would have been established under Section 1.28(e) below; (c) Equipment subject to a security interest or lien in favor of any person other than Lender except those permitted in this Agreement; (d) Equipment which is not located in the continental United States of America; (e) Equipment which is not subject to the first priority, valid and perfected security interest of Lender; or (f) worn-out, obsolete, damaged or defective Equipment or Equipment not used or usable in the ordinary course of such Borrower's business as presently conducted. General criteria for Eligible Equipment may be established and revised from time to time by Lender in good faith based on an event, condition or other circumstance arising after the date hereof, or existing on the date hereof to the extent Lender has no written notice thereof from Borrowers, which adversely affects or could reasonably be expected to adversely affect the Equipment in the good faith determination of Lender. Any Equipment which is not Eligible Equipment shall nevertheless be part of the Collateral.

1.29 "Eligible Inventory" shall mean, as to each Borrower, the Inventory consisting of finished goods held for resale in the ordinary course of the business of such Borrower and raw materials and work-in-process for such finished goods, in each case, that are acceptable to Lender based on the criteria set forth below. In general, Eligible Inventory shall not include (a) components which are not part of finished goods; (b) spare parts for equipment;
(c) packaging and shipping materials; (d) supplies used or consumed in the business of any Borrower; (e) Inventory at premises other than those owned and controlled by such Borrower, except for Inventory at locations leased by Borrowers or held by consignees or vendors of Borrowers if either: (A) Lender shall have received a Collateral Access Agreement from the owner and lessor of such premises or the consignee or vendor, as the case may be, in form and substance satisfactory to Lender or (B) if Lender has not received such an agreement, as to leased locations, then Lender shall have established an Availability Reserve in respect of amounts due or to become due to the owner and lessor of such leased location (without limiting any other rights and remedies of Lender under this Agreement or under the other Financing Agreements with respect to the establishment of Availability Reserves or otherwise) and after giving effect to such Availability Reserves, there is Excess Availability; provided, that, (i) Borrowers shall use their best efforts to obtain the Collateral Access Agreement from the owner and lessor with respect to each of such locations and (ii) the Availability Reserves established pursuant to this
Section shall not exceed at any time the aggregate of amounts payable to such owners and lessors for the next two (2) months and including amounts, if any, then outstanding and unpaid owed by any Borrower to such owners and lessors, provided, that, such limitation on the amount of the Availability Reserves pursuant to this Section shall only apply so long as: (aa) no Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default shall exist or have occurred and be continuing,
(bb) neither any Borrower or Guarantor nor Lender shall have received notice of any default or event of default under the lease with respect to such location and (cc) Lender shall have received evidence, in form and substance satisfactory to Lender, that no Borrower has granted to the owner and lessor a security

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interest in or lien upon any assets of such Borrower; (f) Inventory subject to a security interest or lien in favor of any person other than Lender except those permitted in this Agreement; (g) bill and hold goods; (h) unserviceable, obsolete or slow moving Inventory; (i) Inventory which is not subject to the first priority, valid and perfected security interest of Lender; (j) returned, damaged and/or defective Inventory; (k) Inventory purchased or sold on consignment; and (l) Inventory consisting of Omega TM fire sprinkler products. General criteria for Eligible Inventory may be established and revised from time to time by Lender in good faith based on an event, condition or other circumstance arising after the date hereof, or existing on the date hereof to the extent Lender has no written notice thereof from Borrowers, which adversely affects or could reasonably be expected to adversely affect the Inventory in the good faith determination of Lender. Any Inventory which is not Eligible Inventory shall nevertheless be part of the Collateral.

1.30 "Environmental Laws" shall mean all foreign, Federal, State and local laws (including common law), legislation, rules, codes, licenses, permits (including any conditions imposed therein), authorizations, judicial or administrative decisions, injunctions or agreements between any Borrower and any governmental authority, (a) relating to pollution and the protection, preservation or restoration of the environment (including air, water vapor, surface water, ground water, drinking water, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or to human health or safety, (b) relating to the exposure to, or the use, storage, recycling, treatment, generation, manufacture, processing, distribution, transportation, handling, labeling, production, release or disposal, or threatened release, of Hazardous Materials, or (c) relating to all laws with regard to recordkeeping, notification, disclosure and reporting requirements respecting Hazardous Materials. The term "Environmental Laws" includes (i) the Federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Federal Superfund Amendments and Reauthorization Act, the Federal Water Pollution Control Act of 1972, the Federal Clean Water Act, the Federal Clean Air Act, the Federal Resource Conservation and Recovery Act of 1976 (including the Hazardous and Solid Waste Amendments thereto), the Federal Solid Waste Disposal and the Federal Toxic Substances Control Act, the Federal Insecticide, Fungicide and Rodenticide Act, and the Federal Safe Drinking Water Act of 1974, and (ii) applicable State counterparts to such laws.

1.31 "Equipment" shall mean all of each Borrower's now owned and hereafter acquired equipment, machinery, computers and computer hardware and software (whether owned or licensed), vehicles, tools, furniture, fixtures, all attachments, accessions and property now or hereafter affixed thereto or used in connection therewith, and substitutions and replacements thereof, wherever located.

1.32 "Equipment Purchase Term Loans" shall mean the secured term loans hereafter made by Lender to any Borrower as provided for in Section 2.4, such term loans being from time to time referred to herein individually as an "Equipment Purchase Term Loan".

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1.33 "Equipment Purchase Term Notes" shall mean, collectively, the Equipment Purchase Term Notes which may at any time hereafter be issued by any Borrower to Lender pursuant to Section 2.4 hereof to evidence an Equipment Purchase Term Loan, such notes being from time to time referred to herein individually as an "Equipment Purchase Term Note".

1.34 "ERISA" shall mean the United States Employee Retirement Income Security Act of 1974, as the same now exists or may hereafter from time to time be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

1.35 "ERISA Affiliate" shall mean any Person required to be aggregated with any Borrower or Central or any of their Subsidiaries under Sections 414(b),
414(c), 414(m) or 414(o) of the Code.

1.36 "Eurodollar Rate" shall mean with respect to the Interest Period for a Eurodollar Rate Loan to a Borrower, the interest rate per annum equal to the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the next one-sixteenth (1/16) of one (1%) percent) at which Reference Bank is offered deposits of United States dollars in the London interbank market (or other Eurodollar Rate market selected by such Borrower or on its behalf by Central and approved by Lender) on or about 9:00 a.m. (New York City time) two (2) Business Days prior to the commencement of such Interest Period in amounts substantially equal to the principal amount of the Eurodollar Rate Loans requested by and available to such Borrower in accordance with this Agreement, with a maturity of comparable duration to the Interest Period selected by such Borrower or on its behalf by Central.

1.37 "Eurodollar Rate Loans" shall mean any Loans or portion thereof on which interest is payable based on the Adjusted Eurodollar Rate in accordance with the terms hereof.

1.38 "Event of Default" shall mean the occurrence or existence of any event or condition described in Section 10.1 hereof.

1.39 "Excess Availability" shall mean the amount, as determined by Lender, calculated at any time, equal to:

(a) the lesser of: (i) the amount of the Revolving Loans available to Borrowers as of such time based on the applicable lending formulas set forth in Section 2.1 hereof, as determined by Lender, and subject to the sublimits and Availability Reserves from time to time established hereunder or
(ii) the amount equal to the Revolving Loan Limit, minus

(b) the sum of: (i) the amount of all then outstanding and unpaid Obligations of Borrowers (but not including for this purpose the then outstanding principal amount of the Term Loans to Borrowers), plus (ii) the aggregate amount of all then outstanding and unpaid trade payables and other obligations of Borrowers which are more than forty-five (45) days past due as of such time, plus (iii) the amount of checks issued by Borrowers to pay trade payables, but not yet sent and the book overdraft of such Borrowers.

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1.40 "Exchange Act" shall mean the Securities Exchange Act of 1934, as the same now exists or may from time to time hereafter be amended, modified, recodified or supplemented, together with all rules, regulations and interpretations thereunder or related thereto.

1.41 "Existing Lenders" shall mean, collectively, First Union National Bank, LaSalle National Bank and National City Bank of Pennsylvania, and First Union National Bank as agent for such lenders, and their respective successors and assigns.

1.42 "Existing Letters of Credit" shall mean, collectively, the letters of credit issued for any Borrower or Guarantor by First Union National Bank (as successor by merger to CoreStates Bank, N.A.) prior to the date hereof listed on Schedule 1.42 hereto.

1.43 "Financing Agreements" shall mean, collectively, this Agreement and all notes, guarantees, security agreements and other agreements, documents and instruments now or at any time hereafter executed and/or delivered by any Borrower or Guarantor in connection with this Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.44 "First Union Letter of Credit Documents" shall mean, collectively, the Letter of Credit and Reimbursement Agreement, dated as of November 1, 1995, by and between First Union National Bank and Castings relating to the Alabama State Bonds and the Calhoun County Bonds and the related agreements, documents and instruments listed on Schedule 1.44 hereto, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.45 "GAAP" shall mean generally accepted accounting principles in the United States of America as in effect from time to time as set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and the statements and pronouncements of the Financial Accounting Standards Board which are applicable to the circumstances as of the date of determination consistently applied, provided that if any change in generally accepted accounting principles after the date hereof in itself affects the calculation of compliance with the financial covenant in Section 9.15 hereof, Borrowers may by notice to Lender, or Lender may, by notice to Central, require that such covenant thereafter be calculated in accordance with generally accepted accounting principles as in effect, and applied by Borrowers, immediately before such change in generally accepted accounting principles occurred. If such notice is given, any calculation by Borrowers of compliance with covenant in Section 9.15 after such change occurs shall be accomplished by reconciliations of the difference between the calculation set forth therein and a calculation made in accordance with generally accepted accounting principles as in effect from time to time after such change occurs.

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1.46 "Hazardous Materials" shall mean any hazardous, toxic or dangerous substances, materials and wastes, including hydrocarbons (including naturally occurring or man-made petroleum and hydrocarbons), flammable explosives, asbestos, urea formaldehyde insulation, radioactive materials, biological substances, polychlorinated biphenyls, pesticides, herbicides and any other kind and/or type of pollutants or contaminants (including materials which include hazardous constituents), sewage, sludge, industrial slag, solvents and/or any other similar substances, materials, or wastes and including any other substances, materials or wastes that are or become regulated under any Environmental Law (including any that are or become classified as hazardous or toxic under any Environmental Law).

1.47 "Hard Costs" shall mean, with respect to the purchase by a Borrower of an item of Eligible Equipment, the net cash amount actually paid to acquire title to such item, net of all incentives, trade-in allowances, discounts and rebates, and exclusive of freight, delivery charges, installation costs and charges, software costs, charges and fees, warranty costs, taxes, insurance and other incidental costs or expenses and all indirect costs or expenses of any kind.

1.48 "Huntsville Bond Agreements" shall mean shall mean collectively, the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced): (a) the Mortgage Indenture, dated as of December 1, 1997, between the Industrial Development Board of the City of Huntsville, Alabama, CPVC and the Huntsville Bondholder,
(b) the Lease Agreement, dated as of December 1, 1997, between the Industrial Development Board of the City of Huntsville, Alabama and CPVC, (c) the Guaranty Agreement, as of December 1, 1997, by CSC, Central, Castings and CPVC in favor of the Huntsville Bondholder, (d) the Bond Purchase Agreement, as of December 1, 1997, by and among CSC Finance, CPVC, CSC, Central and Castings, and (e) all agreements, documents and instruments at any time executed and/or delivered by any Borrower or Guarantor in connection with any of the foregoing.

1.49 "Huntsville Bond Letter of Credit" shall mean a letter of credit to be issued after the date hereof by First Union National Bank for the account of CPVC payable to the Huntsville Bondholder or a duly appointed trustee acting on behalf of the holders of the Huntsville Bonds, as beneficiary on terms and conditions acceptable to Lender and to First Union National Bank as the issuer of such letter of credit in the amount not to exceed $7,641,780.82, as the same may hereafter exist and may thereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.50 "Huntsville Bondholder" shall mean CSC Investment (as purchaser of the Huntsville Bonds from Brown Brothers Harriman & Co. pursuant to the Bond Purchase Agreement, dated April 21, 1998, by and among Brown Brothers Harriman & Co., CPVC and CSC Investment) as the direct and beneficial owner and holder of all of the Huntsville Bonds and any assignee or transferee that hereafter owns and holds all of the Huntsville Bonds, together with any person who at any time is acting as trustee or agent on behalf of the owners and holders of the Huntsville Bonds.

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1.51 "Huntsville Bonds" shall mean, collectively, the Industrial Development Revenue Bonds (Central CPVC Corporation Project) Series 1997 issued by the Industrial Development Board of the City of Huntsville, Alabama in the original principal amount of $7,500,000, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.52 "Information Certificate" shall mean, collectively, the Information Certificate with respect to each Borrower and Guarantor constituting Exhibit A hereto containing material information with respect to each Borrower and Guarantor, its business and assets provided by or on behalf of Borrowers to Lender in connection with the preparation of this Agreement and the other Financing Agreements and the financing arrangements provided for herein.

1.53 "Interest Period" shall mean for any Eurodollar Rate Loan to Borrowers, a period of approximately one (1), two (2), three (3) or six (6) months duration as such Borrower may elect, the exact duration to be determined in accordance with the customary practice in the applicable Eurodollar Rate market; provided, that, Borrowers may not elect an Interest Period which will end after the last day of the then-current term of this Agreement.

1.54 "Interest Rate" shall mean, as to Prime Rate Loans, the Prime Rate per annum and as to Eurodollar Rate Loans, a rate of one and three-quarters (1 3/4%) percent per annum in excess of the Adjusted Eurodollar Rate (in each case as to Eurodollar Rate Loans to a Borrower based on the Eurodollar Rate applicable for the Interest Period selected by such Borrower as in effect two
(2) Business Days prior to the commencement of such Interest Period for such Eurodollar Rate Loans in accordance with the terms hereof, whether such rate is higher or lower than any rate previously quoted to such Borrower); provided, that: notwithstanding anything to the contrary contained in this Agreement or in any of the other Financing Agreements, the Interest Rate, as to Prime Rate Loans and Eurodollar Rate Loans, shall mean the rate two (2%) percent per annum more than the otherwise then applicable Interest Rate, at Lender's option, without notice, for the period from and after the date of the occurrence of any Event of Default, and for so long as such Event of Default is continuing, and on the Revolving Loans to Borrowers at any time outstanding in excess of the amounts available to Borrowers under Section 2 hereof (whether or not such excess(es), arise or are made with or without Lender's knowledge or consent and whether made before or after an Event of Default).

1.55 "Inventory" shall mean all of each Borrower's now owned and hereafter acquired inventory, wherever located, including, without limitation, all raw materials, work-in-process, and finished inventory of any kind, nature or description, wherever located.

1.56 "Inventory Loan Limit" shall mean, at any time, the amount equal to $35,000,000.

1.57 "Letter of Credit Accommodations" shall mean the letters of credit, merchandise purchase or other guaranties which are from time to time either (a) issued or opened by Lender for the account of any Borrower or Guarantor or (b) with respect to which Lender has agreed to indemnify the issuer

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or guaranteed to the issuer the performance by each Borrower of its obligations to such issuer (including, without limitation, the Existing Letters of Credit), provided, that, the term "Letter of Credit Accommodations" shall not include the Supplemental Letter of Credit Accommodations as such term is defined herein.

1.58 "Loans" shall mean the Revolving Loans, the Term Loan, the Equipment Purchase Term Loans and the Supplemental LC Loans.

1.59 "Material Adverse Effect" shall mean a material adverse effect on
(a) the condition (financial or otherwise), business, assets, profits, operations or properties of Borrowers (taken as a whole); (b) the legality, validity or enforceability of this Agreement or any of the other Financing Agreements; (c) the legality, validity, enforceability, perfection or priority of the security interests and liens of Lender upon the Collateral or any other property which is security for the Obligations; (d) the Collateral or any other property which is security for the Obligations, or the value of the Collateral or such other property; (e) the ability of Borrowers (taken as a whole) to repay the Obligations or of any Borrower or Guarantor to perform its obligations under this Agreement or any of the other Financing Agreements; or (f) the ability of Lender to enforce the Obligations or realize upon the Collateral or otherwise with respect to the rights and remedies of Lender under this Agreement or any of the other Financing Agreements.

1.60 "Maximum Credit" shall mean the amount of $110,000,000.

1.61 "Mortgages" shall mean, individually and collectively, each of the following (as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced): (a) the Open-End Mortgage and Security Agreement, dated of even date herewith, by Central in favor of Lender with respect to the Real Property and related assets of Central located in Lansdale, Pennsylvania and Newtown, Pennsylvania; and (b) the Fee and Leasehold Mortgage with Security Agreement and Assignment of Leases and Rents, dated of even date herewith, by CPVC and the Industrial Development Board of the City of Huntsville, Alabama in favor of Lender with respect to the Real Property and related assets of CPVC located in Madison, Alabama.

1.62 "Net Amount of Eligible Accounts" shall mean the gross amount of Eligible Accounts less (a) sales, excise or similar taxes included in the amount thereof and (b) returns, discounts, claims, credits and allowances of any nature at any time issued, owing, granted, outstanding, available or claimed with respect thereto.

1.63 "Obligations" shall mean any and all Revolving Loans, the Term Loan, the Equipment Purchase Term Loans, the Supplemental LC Loans, the Letter of Credit Accommodations, the Supplemental Letter of Credit Accommodations, and all other obligations, liabilities and indebtedness of every kind, nature and description owing by any or all of Borrowers to Lender and/or its affiliates, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise,

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whether arising under this Agreement or otherwise, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of this Agreement or after the commencement of any case with respect to any Borrower under the United States Bankruptcy Code or any similar statute (including, without limitation, the payment of interest and other amounts which would accrue and become due hereunder or under the other Financing Agreements but for the commencement of such case, whether or not such amounts are allowed or allowable in whole or in part in such case), whether direct or indirect (and including obligations to Lender arising indirectly pursuant to the participation by Lender in the obligations of Borrowers to First Union National Bank under the First Union Letter of Credit Documents), absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired by Lender.

1.64 "Omega Litigation" shall mean the class action lawsuits against CSC and its Subsidiaries filed in the State of California regarding the Omega TM sprinkler heads manufactured and sold by Borrower, as such lawsuits are described on Schedule 1.64.

1.65 "Participant" shall mean any person which at any time participates with Lender in respect of the Loans or other Obligations or any portion thereof.

1.66 "Payment Account" shall have the meaning set forth in Section 6.6 hereof.

1.67 "Permitted Holders" shall mean the persons listed on Schedule 1.67 hereto.

1.68 "Person" or "person" shall mean any individual, sole proprietorship, partnership, corporation (including, without limitation, any corporation which elects subchapter S status under the Code), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock corporation, trust, joint venture or other entity or any government or any agency or instrumentality or political subdivision thereof.

1.69 "Prime Rate" shall mean the rate from time to time publicly announced by First Union National Bank, or its successors, as its prime rate, whether or not such announced rate is the best rate available at such bank.

1.70 "Prime Rate Loans" shall mean any Loans or portion thereof on which interest is payable based on the Prime Rate in accordance with the terms thereof.

1.71 "Real Property" shall mean all now owned and hereafter acquired real property of Borrowers, including leasehold interests, together with all buildings, structures, and other improvements located thereon and all licenses, easements and appurtenances relating thereto, wherever located, including the real property and related assets more particularly described in the Mortgages located in the State of Alabama and the Commonwealth of Pennsylvania.

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1.72 "Records" shall mean all of each Borrower's present and future books of account of every kind or nature, purchase and sale agreements, invoices, ledger cards, bills of lading and other shipping evidence, statements, correspondence, memoranda, credit files and other data relating to the Collateral or any account debtor, together with the tapes, disks, diskettes and other data and software storage media and devices, file cabinets or containers in or on which the foregoing are stored (including any rights of Borrowers with respect to the foregoing maintained with or by any other person).

1.73 "Reference Bank" shall mean First Union National Bank, or such other bank as Lender may from time to time designate.

1.74 "Revolving Loan Limit" shall mean the amount equal to $79,600,000 minus the then outstanding principal amount of the Term Loan.

1.75 "Revolving Loans" shall mean the loans now or hereafter made by Lender to or for the benefit of Borrowers on a revolving basis (involving advances, repayments and readvances) as set forth in Section 2.1 hereof.

1.76 "Special Availability Reserve" shall mean the Availability Reserve in the amount equal to $9,578,000 established as of the date hereof reducing the amount of Revolving Loans and Letter of Credit Accommodations otherwise available to Borrowers, provided, that, if after the date hereof, but prior to November 30, 1998, Lender shall receive a revised or supplemental report from MB Valuation or another appraiser acceptable to Lender, in form and substance satisfactory to Lender, in connection with the appraisal of the Equipment delivered by MB Valuation to Lender on or about September 11, 1998 which increases the amount of the orderly liquidation value of the Equipment owned by Borrowers included in such appraisal and/or includes the orderly liquidation value of other Equipment owned by a Borrower (free and clear of any lien, security interest, lien claim or other encumbrance, except in favor of Lender) and acceptable to Lender, so that the increase in the amount of the orderly liquidation value of the Equipment previously included in the appraisal, together with the orderly liquidation value of such other Equipment, is greater than $1,900,000, the Special Availability Reserve shall be decreased by the amount by which such increase and such value exceeds $1,900,000 (provided, that, no Event of Default shall exist or have occurred and be continuing).

1.77 "Subsidiary" or "subsidiary" shall mean, with respect to any Person, any corporation, limited or general partnership, trust, association or other business entity of which an aggregate of at least a majority of the outstanding Capital Stock or other interests entitled to vote in the election of the board of directors of such corporation (irrespective of whether, at the time, Capital Stock of any other class or classes of such corporation shall have or might have voting power by reason of the happening of any contingency), managers, trustees or other controlling persons, or an equivalent controlling interest therein, of such Person is, at the time, directly or indirectly, owned by such Person and/or one or more subsidiaries of such Person.

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1.78 "Supplemental LC Loans" shall mean the loans hereafter made by Lender to or for the benefit of Borrowers pursuant to any payments by Lender in respect of the Supplemental Letter of Credit Accommodations, as provided in
Section 2.2 hereof.

1.79 "Supplemental Letter of Credit Accommodations" shall mean, collectively, the Calhoun County Bond Letter of Credit, the Alabama State Bond Letter of Credit and the Huntsville Bond Letter of Credit, to the extent Lender has agreed in writing to indemnify the issuer or guarantee to the issuer the performance by the Borrower who is the account party with respect thereto of such Borrower's obligations to such issuer (or in the case of the Calhoun County Bond Letter of Credit and the Alabama State Bond Letter of Credit, to the extent Lender may have agreed to purchase a participation in the obligations of any Borrower to First Union National Bank as the issuer thereof pursuant to the Agency and Participation Agreement, dated of even date herewith, between First Union National Bank as issuer of such letters of credit and Lender).

1.80 "Swap Agreement" shall mean the Master Agreement, dated as of January 25, 1996, between Castings and First Union National Bank (as successor by merger to CoreStates Bank, N.A.), and all confirmations with respect to swap transactions between First Union National Bank and Castings or any other Borrower pursuant thereto, as the foregoing may now exist or may hereafter be entered into or amended, modified, supplemented, extended, renewed, restated or replaced.

1.81 "Term Loan" shall mean the term loan made by Lender to Central as provided for in Section 2.3 hereof.

1.82 "Term Note" shall mean the Term Promissory Note, dated of even date herewith, made by Central payable to the order of Lender in the original principal amount of $12,600,000, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced.

1.83 "Value" shall mean, as determined by Lender in good faith, with respect to Inventory, the lower of (a) cost computed on a first-in-first-out basis in accordance with GAAP or (b) market value.

SECTION 2. CREDIT FACILITIES

2.1 Revolving Loans.

(a) Subject to and upon the terms and conditions contained herein, Lender agrees to make Revolving Loans to Borrowers from time to time in amounts requested by any Borrower or on their behalf by Central up to the amount equal to the sum of:

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(i) eighty-five (85%) percent of the Net Amount of Eligible Accounts of Borrowers, plus

(ii) the lesser of: (A) the sum of (1) sixty (60%) percent of the Value of Eligible Inventory of Borrowers consisting of finished goods, plus (2) fifty-five (55%) percent of the Value of Eligible Inventory of Borrowers consisting of raw materials and work-in-process for such finished goods, or (B) the Inventory Loan Limit, plus

(iii) one hundred (100%) percent of Eligible Cash Collateral, less

(iv) any Availability Reserves.

(b) Lender may, in its discretion, from time to time, upon not less than five (5) days prior notice to any Borrower, (i) reduce the lending formula with respect to Eligible Accounts to the extent that Lender determines in good faith that the general creditworthiness of account debtors has declined, or (ii) reduce the lending formula(s) with respect to Eligible Inventory to the extent that Lender determines that: (A) the number of days of the turnover of the Inventory for any period has adversely changed or (B) the value of the Eligible Inventory or any category thereof has decreased or (C) the nature, quality or mix of the Inventory has deteriorated. In determining whether to reduce the lending formula(s), Lender may consider events, conditions, contingencies or risks which are also considered in determining Eligible Accounts, Eligible Inventory or in establishing Availability Reserves. To the extent Lender shall have established an Availability Reserve which is sufficient to address any event, condition or matter in a manner satisfactory to Lender in good faith, Lender shall not exercise its rights under this Section 2.1(b) to reduce the lending formulas, to address such event, condition or matter. The amount of any reduction in the lending formula by Lender pursuant to this Section 2.1(b) shall have a reasonable relationship to the matter which is the basis for such reduction.

(c) Except in Lender's discretion, (i) the aggregate amount of the Revolving Loans based on Eligible Inventory outstanding at any time shall not exceed the Inventory Loan Limit, (ii) the aggregate amount of the Revolving Loans based on Eligible Inventory consisting of work-in-process outstanding at any time shall not exceed $3,000,000, (iii) the aggregate amount of the Revolving Loans and Letter of Credit Accommodations outstanding at any time shall not exceed the Revolving Loan Limit, (iv) the aggregate amount of the Revolving Loans based on Eligible Cash Collateral outstanding at any time shall not exceed $7,500,000, provided, that, such amount may be increased or decreased as follows: (A) such amount may be increased effective one (1) Business Day after each of the following conditions is satisfied: (1) Lender shall have received a written request for such increase from Central, (2) Lender shall have received evidence that the amount of cash or Cash Equivalents held in the Collateral Account (as defined in Section 1.27 hereof) is not less than such amount, (3) in no event shall such amount be increased to more than $15,000,000, and (4) such amount may not be increased more than one (1) time in any week, and (B) such amount may be decreased effective one (1) Business Day after each of

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the following conditions is satisfied: (1) Lender shall have received a written request for such decrease from Central, (2) as of the date of such decrease and after giving effect thereto, there shall be Excess Availability, (3) as of the date of such decrease and after giving effect thereto, no Event of Default shall exist or have occurred, (4) such amount may not be decreased more than one (1) time in any week, and (v) the aggregate amount of the Loans, the Letter of Credit Accommodations and the Supplemental Letter of Credit Accommodations outstanding at any time shall not exceed the Maximum Credit. In the event that the outstanding amount of any component of the Loans, or the aggregate amount of the outstanding Loans, exceeds the amounts available under the lending formulas, the sublimits for Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations set forth in Sections 2.2(d) and 2.2(e) hereof, the Revolving Loan Limit, the sublimits set forth herein, or the Maximum Credit, as applicable, such event shall not limit, waive or otherwise affect any rights of Lender in that circumstance or on any future occasions and Borrowers shall, upon the demand by Lender, which may be made at any time or from time to time, repay to Lender the entire amount of any such excess(es) for which payment is demanded.

(d) For purposes only of applying the sublimit on Revolving Loans based on Eligible Inventory pursuant to Section 2.1(a)(ii)(B) hereof, Lender may treat the then undrawn amounts of outstanding Letter of Credit Accommodations for the purpose of purchasing Eligible Inventory as Revolving Loans to the extent Lender is in effect relying on the Eligible Inventory being purchased with such Letter of Credit Accommodations. In determining the actual amounts of such Letter of Credit Accommodations to be so treated for purposes of the sublimit, the outstanding Revolving Loans and Availability Reserves shall be attributed first to any components of the lending formulas in Section 2.1(a) hereof that are not subject to such sublimit, before being attributed to the components of the lending formulas subject to such sublimit.

2.2 Letter of Credit Accommodations; Supplemental Letter of Credit Accommodations.

(a) Subject to and upon the terms and conditions contained herein, at the request of any Borrower or on behalf such Borrower by Central, Lender agrees to provide or arrange for Letter of Credit Accommodations for the account of Borrowers containing terms and conditions acceptable to Lender and the issuer thereof. Any payments made by Lender to any issuer thereof and/or related parties in connection with the Letter of Credit Accommodations shall constitute additional Revolving Loans to Borrowers pursuant to this Section 2.

(b) Subject to and upon the terms and conditions contained herein, at the request of any Borrower or on behalf of such Borrower by Central, Lender agrees to arrange for the Supplemental Letter of Credit Accommodations for the account of Borrowers containing terms and conditions acceptable to Lender and the issuer thereof. Any payments made by Lender to any issuer thereof and/or related parties in connection with the Supplemental Letter of Credit Accommodations shall constitute Supplemental LC Loans to Borrowers and shall be automatically and unconditionally due and payable on the next Business Day after the date of such Loan, without notice or demand.

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(c) In addition to any charges, fees or expenses charged by any bank or issuer in connection with the Letter of Credit Accommodations, Borrowers shall pay to Lender a letter of credit fee at a rate equal to one and one-half (1 1/2%) percent per annum on the daily outstanding balance of the Letter of Credit Accommodations and the Supplemental Letter of Credit Accommodations for the immediately preceding month (or part thereof), payable in arrears as of the first day of each succeeding month, except that Borrowers shall pay to Lender such letter of credit fee, at Lender's option, upon notice to Central, at a rate equal to three and one-half (3 1/2%) percent per annum on such daily outstanding balance for: (i) the period from and after the date of termination or non-renewal hereof until Lender has received full and final payment of all Obligations (notwithstanding entry of a judgment against Borrowers) and (ii) the period from and after the date of the occurrence of an Event of Default for so long as such Event of Default is continuing as determined by Lender. Such letter of credit fee shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed and the obligation of Borrowers to pay such fee shall survive the termination or non-renewal of this Agreement.

(d) No Letter of Credit Accommodations shall be available unless on the date of the proposed issuance of any Letter of Credit Accommodations, the Revolving Loans available to the Borrower requesting it (subject to the Maximum Credit and any Availability Reserves) are equal to or greater than: (i) if the proposed Letter of Credit Accommodation is for the purpose of purchasing Eligible Inventory, the sum of (A) the percentage equal to one hundred (100%) percent minus the applicable percentage set forth in Section 2.1(a)(ii)(A) hereof multiplied by the Value of the Eligible Inventory being purchased with such proposed Letter of Credit Accommodation, plus (B) freight, taxes, duty and other amounts which Lender estimates must be paid in connection with such Inventory upon arrival and for delivery to one of such Borrower's locations for Eligible Inventory within the United States of America and (ii) if the proposed Letter of Credit Accommodation is for any other purpose, an amount equal to one hundred (100%) percent of the face amount thereof and all other commitments and obligations made or incurred by Lender with respect thereto. Effective on the issuance of each Letter of Credit Accommodation, an Availability Reserve shall be established in the applicable amount set forth in this Section 2.2(d)(i) or
Section 2.2(d)(ii).

(e) In addition to the other conditions precedent to any Loan, Letter of Credit Accommodation or Supplemental Letter of Credit Accommodation, the arrangement by Lender for the issuance of the Huntsville Bond Letter of Credit shall be subject to the satisfaction of each of the following additional conditions precedent, as determined by Lender:

(i) Lender shall have received, in form and substance satisfactory to Lender, all releases, terminations and such other documents as Lender may request to evidence and effectuate the termination of and release by the Huntsville Bondholder of any interest in and to any assets and properties of

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Borrowers and Guarantors, duly authorized, executed and delivered by it, including, but not limited to, (A) UCC termination statements for all UCC financing statements previously filed by it or its predecessors, as secured party, and Borrowers or Guarantors, as debtor and (B) satisfactions and discharges of any mortgages, deeds of trust or deeds to secure debt by any Borrower or Guarantor in favor of the Huntsville Bondholder, in form acceptable for recording in the appropriate government office;

(ii) Lender shall have received, in form and substance satisfactory to Lender, the Fee and Leasehold Mortgage with Security Agreement and Assignment of Leases and Rents by CPVC and the Huntsville Bondholder in favor of Lender with respect to the Real Property of CPVC in Madison, Alabama, duly authorized, executed and delivered by CPVC and the Huntsville Bondholder;

(iii) Lender shall have received, in form and substance satisfactory to Lender, amendments to the Huntsville Bond Agreements providing for the restructuring of the terms of the Huntsville Bonds to, inter alia, provide for a trustee to act on behalf of the holders of the Bonds, release all collateral for the obligations of CPVC and any other Borrower or Guarantor in connection with the Huntsville Bonds and the Huntsville Bond Agreements and the issuance of the Huntsville Bond Letter of Credit;

(iv) CPVC or Central shall receive, concurrently with the issuance of the Huntsville Bond Letter of Credit, not less than $7,500,000 in cash or other immediately available funds constituting the net proceeds of a loan by CSC Investment or CSC to CPVC or Central with the proceeds received by CSC Investment from the remarketing and sale of the Huntsville Bonds to third parties who are not affiliates of any Borrower or Guarantor;

(v) Lender shall have received environmental audits of the plant and Real Property of CPVC in Madison, Alabama conducted by an independent environmental engineering firm acceptable to Lender, and in form, scope and methodology satisfactory to Lender, confirming (A) such Borrower is in compliance with all material applicable Environmental Laws and (B) the absence of any material environmental problems;

(vi) Lender shall have received, in form and substance satisfactory to Lender, a valid and effective title insurance policy issued by a company and agent acceptable to Lender (A) insuring the priority, amount and sufficiency of the Mortgage with respect to the Real Property of CPVC in Madison, Alabama referred to in clause (iv) above, (B) insuring against matters that would be disclosed by surveys and (C) containing any legally available endorsements, assurances or affirmative coverage requested by Lender for protection of its interests;

(vii) Lender shall have received evidence, in form and substance satisfactory to Lender, that Lender has a first priority mortgage and lien upon, and security interest in, the Real Property and Equipment of CPVC located in Madison, Alabama;

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(viii) Lender shall have received, in form and substance satisfactory to Lender, a written appraisal of the Real Property of CPVC located in Madison, Alabama, at the expense of Borrower by an appraiser acceptable to Lender, addressed to Lender and on which Lender is expressly permitted to rely, in form, scope and methodology satisfactory to Lender;

(ix) as of the date of the issuance of the Huntsville Bond Letter of Credit and after giving effect thereto, Excess Availability shall be not less than $2,500,000; and

(x) each of the conditions set forth above shall have occurred, and the Huntsville Bond Letter of Credit shall have been issued by, no later than December 31, 1998.

(f) Except in Lender's discretion, the amount of all outstanding Letter of Credit Accommodations and all other commitments and obligations made or incurred by Lender in connection therewith shall not at any time exceed $5,000,000.

(g) Except in Lender's discretion, (i) the aggregate amount of the obligations of Lender to the issuer of the Huntsville Bond Letter of Credit and all other commitments and obligations made or incurred by Lender in connection therewith and any Supplemental LC Loans arising in connection therewith shall not exceed the amount of $7,641,780.82, as reduced effective as of January 1, April 1, July 1 and October 1 of each year commencing on January 1, 2000 by an amount equal to $140,000 on each such date, (ii) the aggregate amount of the obligations of Lender to the issuer of the Calhoun County Bond Letter of Credit and all other commitments and obligations made or incurred by Lender in connection therewith (whether pursuant to an indemnification, participation or other arrangement) and any Supplemental LC Loans arising in connection therewith shall not exceed the amount of $2,753,437.50, as reduced effective as of November 1 of each year by an amount equal to $150,000 and (iii) the aggregate amount of the obligations of Lender to the issuer of the Alabama State Bond Letter of Credit and all other commitments and obligations made or incurred by Lender in connection therewith (whether pursuant to an indemnification, participation or other arrangement) and any Supplemental LC Loans arising in connection therewith shall not exceed the amount of $7,335,000, as reduced effective as of November 1 of each year by an amount equal to $400,000.

(h) At any time an Event of Default exists or has occurred and is continuing, upon Lender's request, Borrowers will either furnish cash collateral to secure the reimbursement obligations to the issuer in connection with any Letter of Credit Accommodations and the Supplemental Letter of Credit Accommodations or furnish cash collateral to Lender for the Letter of Credit Accommodations and the Supplemental Letter of Credit Accommodations.

(i) Each Borrower shall indemnify and hold Lender harmless from and against any and all losses, claims, damages, liabilities, costs and expenses which Lender may suffer or incur in connection with any Letter of Credit Accommodations or any Supplemental Letter of Credit Accommodations and any

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documents, drafts or acceptances relating thereto, including, but not limited to, any losses, claims, damages, liabilities, costs and expenses due to any action taken by any issuer or correspondent with respect to any Letter of Credit Accommodation or any Supplemental Letter of Credit Accommodations other than losses, claims, damages, liabilities, costs and expenses due to the gross negligence or willful misconduct of Lender as determined pursuant to a final non-appealable order of a court of competent jurisdiction. Each Borrower assumes all risks with respect to the acts or omissions of the drawer under or beneficiary of any Letter of Credit Accommodation or Supplemental Letter of Credit Accommodation and for such purposes the drawer or beneficiary shall be deemed such Borrower's agent. Each Borrower assumes all risks for, and agrees to pay, all foreign, Federal, State and local taxes, duties and levies relating to any goods subject to any Letter of Credit Accommodations or any Supplemental Letter of Credit Accommodations or any documents, drafts or acceptances thereunder. Each Borrower hereby releases and holds Lender harmless from and against any acts, waivers, errors, delays or omissions, whether caused by such Borrower, by any issuer or correspondent or otherwise with respect to or relating to any Letter of Credit Accommodation or any Supplemental Letter of Credit Accommodations. The provisions of this Section 2.2(i) shall survive the payment of Obligations and the termination or non-renewal of this Agreement.

(j) Nothing contained herein shall be deemed or construed to grant Borrowers any right or authority to pledge the credit of Lender in any manner. Lender shall have no liability of any kind with respect to any Letter of Credit Accommodation or Supplemental Letter of Credit Accommodation provided by an issuer other than Lender unless Lender has duly executed and delivered to such issuer the application or a guarantee or indemnification in writing with respect to such Letter of Credit Accommodation or Supplemental Letter of Credit Accommodation, as the case may be. At any time on or after an Event of Default or act, condition or event which with notice or passage of time or both would constitute an Event of Default and for so long as the same is continuing, Borrowers shall be bound by any interpretation made in good faith by Lender, or any other issuer or correspondent under or in connection with any Letter of Credit Accommodation or any documents, drafts or acceptances under any of the foregoing, notwithstanding that such interpretation may be inconsistent with any instructions of Borrowers. Lender shall have the sole and exclusive right and authority to, and Borrowers shall not: (i) at any time an Event of Default exists or has occurred and is continuing, (A) approve or resolve any questions of non-compliance of documents, (B) give any instructions as to acceptance or rejection of any documents or goods or (C) execute any and all applications for steamship or airway guaranties, indemnities or delivery orders, and (ii) at all times, (A) grant any extensions of the maturity of, time of payment for, or time of presentation of, any drafts, acceptances, or documents, and (B) agree to any amendments, renewals, extensions, modifications, changes or cancellations of any of the terms or conditions of any of the applications, Letter of Credit Accommodations, Supplemental Letter of Credit Accommodations, or documents, drafts or acceptances under any of the foregoing, or any letters of credit included in the Collateral. Lender may take such actions either in its own name or in any Borrower's name.

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(k) Any rights, remedies, duties or obligations granted or undertaken by any Borrower to any issuer or correspondent in any application for any Letter of Credit Accommodation, or any other agreement in favor of any issuer or correspondent relating to any Letter of Credit Accommodation or any Supplemental Letter of Credit Accommodations, shall be deemed to have been granted or undertaken by such Borrower to Lender. Any duties or obligations undertaken by Lender to any issuer or correspondent in any application for any Letter of Credit Accommodation or Supplemental Letter of Credit Accommodations, or any other agreement by Lender in favor of any issuer or correspondent relating to any Letter of Credit Accommodation or Supplemental Letter of Credit Accommodations, shall be deemed to have been undertaken by Borrowers to Lender and to apply in all respects to Borrowers.

2.3 Term Loan. Subject to the terms and conditions contained herein, Lender is making the Term Loan to Central in the original principal amount of $12,600,000. The Term Loan is (a) evidenced by the Term Note duly executed and delivered by Central to Lender concurrently herewith, (b) to be repaid, together with interest and other amounts, in accordance with this Agreement, the Term Note and the other Financing Agreements, and (c) secured by all of the Collateral.

2.4 Equipment Purchase Term Loans.

(a) Subject to and upon the terms and conditions contained herein, Lender shall make Equipment Purchase Term Loans to any Borrower, from time to time, at the request of such Borrower, or Central on behalf of such Borrower, of up to eighty (80%) percent of the Hard Costs of new Eligible Equipment to be purchased by such Borrower after the date hereof with the proceeds of such Equipment Purchase Term Loan. Each Equipment Purchase Term Loan shall be in an amount not less than $500,000. All of the proceeds of each Equipment Purchase Term Loan shall be used solely for the payment of the purchase price of the Eligible Equipment specified in the notice required to be delivered to Lender pursuant to Section 2.4(d)(i) below.

(b) Except in Lender's discretion, the outstanding aggregate principal amount of the Equipment Purchase Term Loans shall not exceed, at any time, the lower of (i) the aggregate amount of the above percentage of the Hard Costs of all Eligible Equipment purchased by Borrowers pursuant hereto or (ii) $18,000,000. If at any time the outstanding aggregate principal amount of all Equipment Purchase Term Loans shall exceed eighty (80%) percent of the Hard Costs of all Eligible Equipment purchased by Borrower with the proceeds of Equipment Purchase Term Loans, Borrowers shall remain liable therefor, and Lender may, at its option, create a reserve against amounts otherwise available to Borrowers pursuant to the formulas set forth in Section 2.1 of this Agreement, in an amount equal to the entire amount of such excess(es) or Borrowers shall, upon the demand by Lender, which may be made at any time and from time to time, repay to Lender the entire amount of such excess(es).

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(c) Each Equipment Purchase Term Loan shall be (i) evidenced by an Equipment Purchase Term Note executed and delivered by Borrowers to Lender concurrently with each Equipment Purchase Term Loan, (ii) repaid, together with interest and other amounts payable thereunder, in accordance with the provisions of the applicable Equipment Purchase Term Note, this Agreement and the other Financing Agreements, and (iii) secured by all of the Collateral.

(d) In addition to the other conditions precedent to any Loan set forth in this Agreement, the making of each Equipment Purchase Term Loan shall be subject to the satisfaction of each of the following additional conditions precedent, as determined by Lender:

(i) Lender shall have received from Borrowers not less than ten (10) Business Days prior written notice of the proposed Equipment Purchase Term Loan, which notice shall specify the following: (A) the proposed date and amount of the Equipment Purchase Term Loan, (B) a list and description of the Eligible Equipment (by model, make, manufacturer, serial no. and/or such other identifying information as may be appropriate, as determined by Lender), (C) the Hard Costs and the total purchase price for the Eligible Equipment to be purchased with the proceeds of such Equipment Purchase Term Loan (and the terms of payment of such purchase price), and (D) such other information and documents as Lender may from time to time require related thereto;

(ii) upon any Borrower acquiring any rights in the Equipment, Lender shall have a valid and perfected first security interest in and lien upon the Eligible Equipment to be purchased with the proceeds of the Equipment Purchase Term Loan and the Eligible Equipment shall be free and clear of all other liens, security interests, claims or other encumbrances, and Borrowers shall have delivered to Lender such evidence thereof, as Lender may from time to time, require;

(iii) the amount of the Equipment Purchase Term Loan shall not exceed (80%) percent of the Hard Costs of the Eligible Equipment to be purchased by Borrower with the proceeds of such Equipment Purchase Term Loan;

(iv) Lender shall have received copies, or upon Lender's request, the originals, of all agreements, documents and instruments relating to the sale of the Eligible Equipment to any Borrower, including, without limitation, any purchase orders, invoices, bills of sale or similar documents;

(v) Borrowers shall duly authorize, execute and deliver to Lender a single original Equipment Purchase Term Note in the form annexed hereto as Exhibit C, as completed to reflect the date and amount of each such loan and with the number of monthly installments of principal payable thereunder and the amount of each such monthly installment completed in accordance with Sections 2.4(e) and 2.4(f) below, as the case may be, which note shall evidence a valid and legally enforceable indebtedness of Borrowers unconditionally owing to Lender, without offset, defense or counterclaim of any kind, nature or description whatsoever; and

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(vi) no Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred and be continuing.

(e) The principal amount of each Equipment Purchase Term Loan shall be payable (subject to earlier payment to the extent required hereunder or under the Equipment Purchase Term Note) in forty-eight (48) equal, consecutive monthly installments of principal, each in an amount calculated as set forth below, commencing on the first day of the second month after the date of the making of such loan, together with interest and other amounts as provided herein and in the Equipment Purchase Term Note with respect to such loan.

(f) The amount of each monthly installment of principal in respect of each Equipment Purchase Term Loan (other than the last installment which shall be in an amount equal to the entire unpaid balance of the Equipment Purchase Term Note) shall equal: (i) the principal amount of the proposed Equipment Purchase Term Loan divided by (ii) forty-eight (48).

2.5 Availability Reserves. All Revolving Loans otherwise available to Borrowers pursuant to the lending formulas and subject to the Maximum Credit and other applicable limits hereunder shall be subject to Lender's continuing right as provided herein to establish and revise Availability Reserves.

2.6 Joint and Several Liability. Each Borrower and Guarantor shall be liable for all amounts due to Lender under this Agreement, regardless of which Borrower actually receives the Loans or other extensions of credit hereunder or the amount of such Loans received or the manner in which Lender accounts for such Loans, Letter of Credit Accommodations, Supplemental Letter of Credit Accommodations, or other extensions of credit on its books and records. The Obligations with respect to Loans made to a Borrower, and the Obligations arising as a result of the joint and several liability of a Borrower hereunder, with respect to Loans made to the other Borrowers hereunder, shall be separate and distinct obligations, but all such other Obligations shall be primary obligations of all Borrowers. The Obligations arising as a result of the joint and several liability of a Borrower hereunder with respect to Loans, Letter of Credit Accommodations, Supplemental Letter of Credit Accommodations, or other extensions of credit made to the other Borrowers hereunder shall, to the fullest extent permitted by law, be unconditional irrespective of (a) the validity or enforceability, avoidance or subordination of the Obligations of the other Borrowers or of any promissory note or other document evidencing all or any part of the Obligations of the other Borrowers, (b) the absence of any attempt to collect the Obligations from the other Borrowers, Guarantors or any other security therefor, or the absence of any other action to enforce the same, (c) the waiver, consent, extension, forbearance or granting of any indulgence by Lender with respect to any provisions of any instrument evidencing the Obligations of the other Borrowers, or any part thereof, or any other agreement

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now or hereafter executed by the other Borrowers and delivered to Lender, (d) the failure by Lender to take any steps to perfect and maintain its security interest in, or to preserve its rights and maintain its security or collateral for the Obligations of the other Borrowers, (e) the election of Lender in any proceeding instituted under the Bankruptcy Code, of the application of Section 1111(b)(2) of the Bankruptcy Code, (f) any borrowings or grant or a security interest by the other Borrowers, as debtor-in-possession under Section 364 of the Bankruptcy Code, (g) the disallowance of all or any portion of the claim(s) of Lender for the repayment of the Obligations of the other Borrowers under
Section 502 of the Bankruptcy Code, or (h) any other circumstances which might constitute a legal or equitable discharge or defense of a guarantor or of the other Borrowers. With respect to the Obligations arising as a result of the joint and several liability of a Borrower hereunder with respect to Loans, Letter of Credit Accommodations, Supplemental Letter of Credit Accommodations, or other extensions of credit made to the other Borrowers hereunder, each Borrower waives, until the Obligations shall have been paid in full and this Agreement shall have been terminated, any right to enforce any right of subrogation or any remedy which Lender now has or may hereafter have against Borrowers, any endorser or any guarantor of all or any part of the Obligations, and any benefit of, and any right to participate in, any security or collateral given to Lender. Upon any Event of Default, Lender may proceed directly and at once, without notice (except to the extent notice is required hereunder or under any applicable law), against any Borrower or Guarantor to collect and recover the full amount, or any portion of the Obligations, without first proceeding against the other Borrowers or any other Person, or against any security or collateral for the Obligations. Each Borrower and Guarantor consents and agrees that Lender shall be under no obligation to marshall any assets in favor of Borrower(s) or against or in payment of any or all of the Obligations.

SECTION 3. INTEREST AND FEES

3.1 Interest.

(a) Borrowers shall pay to Lender interest on the outstanding principal amount of the Loans at the Interest Rate. All interest accruing hereunder on and after the date of any Event of Default and while such Event of Default is continuing or on and after the termination or non-renewal hereof shall be payable on demand.

(b) Borrowers may, or Central on behalf of Borrowers may, from time to time request that Prime Rate Loans be converted to Eurodollar Rate Loans or that any existing Eurodollar Rate Loans continue for an additional Interest Period. Such request from or on behalf of a Borrower shall specify the amount of the Prime Rate Loans to be converted to Eurodollar Rate Loans or which Eurodollar Rate Loans shall be continued as Eurodollar Rate Loans as provided in this Agreement (subject, in each case, to the limits set forth below) and the Interest Period to be applicable to such Eurodollar Rate Loans. Subject to the terms and conditions contained herein, not later than three (3) Business Days after receipt by Lender of such a request from or on behalf of a Borrower, such

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Prime Rate Loans shall be converted to Eurodollar Rate Loans or such Eurodollar Rate Loans shall continue, as the case may be; provided, that, (i) no Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default, exists or has occurred and is continuing,
(ii) no party hereto shall have sent any notice of termination or non-renewal of this Agreement, (iii) such Borrower (or central on behalf of such Borrower) shall have complied with such customary procedures as are established by Lender and specified by Lender to such Borrower from time to time for requests by or on behalf of a Borrower for Eurodollar Rate Loans, (iv) no more than four (4) Interest Periods may be in effect at any one time, (v) the aggregate amount of the Eurodollar Rate Loans must be in an amount not less than $5,000,000 or an integral multiple of $1,000,000 in excess thereof, (vi) the maximum amount of the Eurodollar Rate Loans at any time requested by or on behalf of a Borrower shall not exceed the amount equal to (A) the principal amount of the Term Loans to such Borrower (if any), which it is anticipated will be outstanding as of the last day of the applicable Interest Period plus (B) ninety (90%) percent of the lowest principal amount of the Revolving Loans, which it is anticipated will be outstanding during the applicable Interest Period, in each case as determined by Lender, but with no obligation of Lender to make such Revolving Loans and (vii) Lender shall have determined that the Interest Period or Adjusted Eurodollar Rate is available to Lender through the Reference Bank and can be readily determined as of the date of the request for such Eurodollar Rate Loan by such Borrower. Any request by any Borrower, or Central on behalf of any Borrower, to convert Prime Rate Loans to Eurodollar Rate Loans or to continue any existing Eurodollar Rate Loans shall be irrevocable until the end of the applicable Interest Period. Notwithstanding anything to the contrary contained herein, Lender and the Reference Bank shall not be required to purchase United States Dollar deposits in the London interbank market or other applicable Eurodollar Rate market to fund any Eurodollar Rate Loans, but the provisions hereof shall be deemed to apply as if Lender and the Reference Bank had purchased such deposits to fund the Eurodollar Rate Loans.

(c) Any Eurodollar Rate Loans shall automatically convert to a Eurodollar Rate Loan with an Interest Period of approximately one (1) month upon the last day of the applicable Interest Period, unless Lender has received and approved a request from any Borrower, or Central on behalf of any Borrower, to convert such Eurodollar Rate Loan to a Prime Rate Loan at least three (3) Business Days prior to such last day. Any Eurodollar Rate Loans shall, at Lender's option, upon notice by Lender to Central, convert to Prime Rate Loans in the event that this Agreement shall terminate or not be renewed. If at any time the Eurodollar Rate Loans outstanding to a Borrower exceed the sum of the then outstanding principal amount of the Term Loans plus the Revolving Loans then available to such Borrower under Section 2 hereof, then Lender may convert an amount of Eurodollar Rate Loans to Prime Rate Loans in the smallest amount that will reduce the outstanding principal amount of Eurodollar Rate Loans to the nearest integral multiple of $1,000,000 that will eliminate such excess. Borrowers shall pay to Lender, upon demand by Lender (or Lender may, at its option, charge any loan account of any Borrower) any amounts required to compensate Lender, the Reference Bank or any Participant with Lender for any loss, cost or expense incurred by such person, as a result of the conversion of Eurodollar Rate Loans to Prime Rate Loans pursuant to any of the foregoing.

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(d) Interest shall be payable by Borrowers to Lender monthly in arrears not later than the first day of each calendar month and shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed. The interest rate on non-contingent Obligations (other than Eurodollar Rate Loans) shall increase or decrease by an amount equal to each increase or decrease in the Prime Rate effective on the first day of the month after any change in such Prime Rate is announced based on the Prime Rate in effect on the last day of the month in which any such change occurs. In no event shall charges constituting interest payable by Borrowers to Lender exceed the maximum amount or the rate permitted under any applicable law or regulation, and if any such part or provision of this Agreement is in contravention of any such law or regulation, such part or provision shall be deemed amended to conform thereto.

3.2 Closing Fee. Borrowers shall pay to Lender as a closing fee the amount of $366,300, which shall be fully earned as of the date hereof, of which $122,100 shall be payable by Borrowers on the date hereof, $122,100 shall be payable on the date one hundred eighty (180) days after the date hereof and $122,100 shall be payable on the first anniversary of the date hereof, provided, that, the entire amount of such fee shall become immediately due and payable, without notice or demand, at Lender's option, upon the occurrence of an Event or Default or upon the termination or non-renewal hereof.

3.3 Servicing Fee. Borrowers shall pay to Lender monthly a servicing fee in an amount equal to $2,500 in respect of Lender's services for each month (or part thereof) while this Agreement remains in effect and for so long thereafter as any of the Obligations are outstanding, which fee shall be fully earned as of and payable in advance on the date hereof and on the first day of each month hereafter.

3.4 Unused Line Fee. Borrowers shall pay to Lender monthly an unused line fee at a rate equal to one-quarter (1/4%) percent per annum calculated upon the amount by which the Revolving Loan Limit exceeds the average daily principal balance of the outstanding Revolving Loans and Letter of Credit Accommodations during the immediately preceding month (or part thereof) while this Agreement is in effect and for so long thereafter as any of the Obligations are outstanding, which fee shall be payable on the first day of each month in arrears.

3.5 Changes in Laws and Increased Costs of Loans.

(a) Notwithstanding anything to the contrary contained herein, all Eurodollar Rate Loans shall, upon notice by Lender to Borrowers, convert to Prime Rate Loans in the event that (i) any change in applicable law or regulation (or the interpretation or administration thereof) shall either (A) make it unlawful for Lender, the Reference Bank or any Participant to make or maintain Eurodollar Rate Loans or to comply with the terms hereof in connection

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with the Eurodollar Rate Loans, or (B) shall result in the increase in the costs to Lender, the Reference Bank or any Participant of making or maintaining any Eurodollar Rate Loans by an amount deemed by Lender to be material, or (C) reduce the amounts received or receivable by Lender in respect thereof, by an amount deemed by Lender to be material or (ii) the cost to Lender, the Reference Bank or any Participant of making or maintaining any Eurodollar Rate Loans shall otherwise increase by an amount deemed by Lender to be material. The calculation of the increase in costs or the reduction of amounts received or receivable shall not include the effect of any changes to the Reserve Percentage (as such term is defined in Section 1.2 hereof) to the extent such amount already includes the effect of such changes pursuant to the calculation of the Adjusted Eurodollar Rate. Borrowers shall pay to Lender, upon demand by Lender (or Lender may, at its option, charge any loan account of any Borrower) any amounts required to compensate Lender, the Reference Bank or any Participant with Lender for any loss (including loss of anticipated profits), cost or expense incurred by such person as a result of the foregoing, including, without limitation, any such loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such person to make or maintain the Eurodollar Rate Loans or any portion thereof. A certificate of Lender setting forth the basis for the determination of such amount necessary to compensate Lender as aforesaid shall be delivered to Borrowers and shall be conclusive, absent manifest error.

(b) If any payments or prepayments in respect of the Eurodollar Rate Loans are received by Lender other than on the last day of the applicable Interest Period (whether pursuant to acceleration, upon maturity or otherwise), including any payments pursuant to the application of collections under Section 6.3 hereof or any other payments made with the proceeds of Collateral, Borrowers shall pay to Lender upon demand by Lender (or Lender may, at its option, charge any loan account of any Borrower) any amounts required to compensate Lender, the Reference Bank or any Participant with Lender for any additional loss (including loss of anticipated profits), cost or expense incurred by such person as a result of such prepayment or payment, including, without limitation, any loss, cost or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such person to make or maintain such Eurodollar Rate Loans or any portion thereof.

SECTION 4. CONDITIONS PRECEDENT

4.1 Conditions Precedent to Initial Loans and Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations. Each of the following is a condition precedent to Lender making the initial Loans and arranging for the initial Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations hereunder:

(a) Lender shall have received, in form and substance satisfactory to Lender, all releases, terminations and such other documents as Lender may request to evidence and effectuate the termination by First Union National Bank (as successor by merger to CoreStates Bank, N.A. and First Fidelity Bank, National Association) of all of its financing arrangements with Borrowers and

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Guarantors (other than the financing arrangements of First Union National Bank with respect to the Alabama State Bond Letter of Credit and the Calhoun County Bond Letter of Credit pursuant to the First Union Letter of Credit Documents) and the termination and release by it of any interest in and to any assets and properties of Borrowers and Guarantors (other than the Real Property and Equipment of Castings located in Anniston, Alabama), duly authorized, executed and delivered by it, including, but not limited to, (i) UCC termination statements for all UCC financing statements previously filed by it or its predecessors, as secured party, and Borrowers or Guarantors, as debtor, and (ii) satisfactions and discharges of any mortgages, deeds of trust or deeds to secure debt previously executed and delivered by Borrowers or Guarantors in favor of First Union National Bank, in form acceptable for recording in the appropriate governmental office;

(b) Lender shall have received, in form and substance satisfactory to Lender, all releases, terminations and such other documents as Lender may request to evidence and effectuate the termination by the Existing Lenders of their financing arrangements with Borrowers and Guarantors and the termination and release by the Existing Lenders of any interest in and to any assets and properties of Borrowers and Guarantors, duly authorized, executed and delivered by them, including, but not limited to, (i) UCC termination statements for all UCC financing statements previously filed by them or on their behalf, as secured party, and Borrowers or Guarantors, as debtor, and (ii) satisfactions and discharges of any mortgages, deeds of trust or deeds to secure debt previously executed and delivered by Borrowers or Guarantors in favor of the Existing Lenders, in form acceptable for recording in the appropriate governmental office;

(c) Lender shall have received, in form and substance satisfactory to Lender, the Agency and Participation Agreement between Lender and First Union National Bank, as acknowledged and agreed to by Borrowers and Guarantors, duly authorized, executed and delivered by First Union National Bank, Borrowers and Guarantors;

(d) Lender shall have received, in form and substance satisfactory to Lender, an amendment to the Mortgage and Security Agreement, dated as of November 1, 1995, by the Calhoun County Economic Development Council and Castings in favor of First Union National Bank, as successor by merger to First Fidelity Bank, National Association;

(e) Lender shall have received a Borrowing Base Certificate setting forth the Loans available to Borrowers as of the date hereof as completed in a manner satisfactory to Lender and duly authorized, executed and delivered on behalf of Borrowers;

(f) all requisite corporate action and proceedings in connection with this Agreement and the other Financing Agreements shall be satisfactory in form and substance to Lender, and Lender shall have received all information and copies of all documents, including, without limitation, records of requisite corporate action and proceedings which Lender may have requested in connection therewith, such documents where requested by Lender or its counsel to be certified by appropriate corporate officers or governmental authorities;

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(g) no Material Adverse Effect shall have occurred since the date of Lender's latest field examination;

(h) Lender shall have completed a field review of the Records and such other information with respect to the Collateral as Lender may require to determine the amount of Revolving Loans available to Borrowers, the results of which shall be satisfactory to Lender, not more than seven (7) Business Days prior to the date hereof;

(i) Lender shall have received, in form and substance satisfactory to Lender, a subordination agreement between CSC Finance and Lender, as acknowledged by Borrowers and Guarantors, providing for, among other things, the subordination in right of payment of all indebtedness owed by Borrowers or Guarantors to CSC Finance to the right of Lender to receive the prior and final payment and satisfaction in full of all of the Obligations and related matters, duly authorized, executed and delivered by CSC Finance, Borrowers and Guarantors;

(j) Lender shall have received, in form and substance satisfactory to Lender, all consents, waivers, acknowledgments and other agreements from third persons which Lender may deem necessary or desirable in order to permit, protect and perfect its security interests in and liens upon the Collateral or to effectuate the provisions or purposes of this Agreement and the other Financing Agreements, including, without limitation, Collateral Access Agreements (except as Lender may otherwise agree in writing) and the estoppel and consent agreement from the Huntsville Bondholder and the Industrial Development Board of the City of Huntsville, Alabama with respect to the Mortgage on the Real Property and related assets of CPVC in Madison, Alabama;

(k) Lender shall have received evidence of insurance and loss payee endorsements required hereunder and under the other Financing Agreements, in form and substance satisfactory to Lender, and certificates of insurance policies and/or endorsements naming Lender as additional loss payee;

(l) the sum of the amount of the cash and Cash Equivalents of CSC Finance and CSC Investment which are free and clear of any pledge, lien, security interest, claim or other encumbrance and are available to CSC Finance and CSC Investment without condition or restriction plus the amount of the Excess Availability as determined by Lender, shall be not less than $7,500,000 as of the date hereof, and the amount of the Excess Availability as determined by Lender shall be not less than $2,500,000 (calculating Excess Availability for purposes of this Section 4.1(1) to include the cash and Cash Equivalents of Borrowers in the calculation of Loans available under Section 2.1 whether or not such cash or Cash Equivalents constitute Eligible Cash Collateral), in each case after giving effect to the initial Loans made or to be made in connection with the initial transactions hereunder;

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(m) Lender shall have received evidence, in form and substance satisfactory to Lender, of the amount of the unrestricted cash and Cash Equivalents of CSC Investment and CSC Finance (which satisfy the criteria set forth above) and Borrowers;

(n) Lender shall have received, in form and substance satisfactory to Lender, a valid and effective title insurance policy issued by a company and agent acceptable to Lender (i) insuring the priority, amount and sufficiency of the Mortgages, (ii) insuring against matters that would be disclosed by surveys as to the parcels of the Real Property on which the mills of Borrowers are located (except as Lender may otherwise agree in writing) and (iii) containing any legally available endorsements, assurances or affirmative coverage requested by Lender for protection of its interests;

(o) the principal operating accounts and cash management services of Borrowers and Guarantors shall be maintained with First Union National Bank;

(p) Lender shall have received, in form and substance satisfactory to Lender, such opinion letters of counsel(s) to Borrowers and Guarantors with respect to the Financing Agreements and such other matters as Lender may reasonably request;

(q) Lender shall have received, in form and substance satisfactory to Lender, partial releases and such other documents as Lender may request to evidence and effectuate the release by the Huntsville Bondholder of any interest in and to any assets and properties of any Borrower and Guarantor other than the Real Property and related Equipment of CPVC located in Madison, Alabama; and

(r) the other Financing Agreements and all instruments and documents hereunder and thereunder shall have been duly executed and delivered to Lender, in form and substance satisfactory to Lender.

4.2 Conditions Precedent to All Loans and Letter of Credit Accommodations. Each of the following is an additional condition precedent to Lender making Loans and/or providing Letter of Credit Accommodations or Supplemental Letter of Credit Accommodations to Borrowers, including the initial Loans and Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations and any future Loans and Letter of Credit Accommodations or Supplemental Letter of Credit Accommodations:

(a) all representations and warranties contained herein and in the other Financing Agreements shall be true and correct in all material respects with the same effect as though such representations and warranties had been made on and as of the date of the making of each such Loan or providing each such Letter of Credit Accommodation or Supplemental Letter of Credit Accommodations and after giving effect thereto; and

(b) no Event of Default or act, condition or event which, with notice or passage of time or both, would constitute an Event of Default shall exist or have occurred and be continuing on and as of the date of the making of such Loan or providing such Letter of Credit Accommodation or Supplemental Letter of Credit Accommodations and after giving effect thereto.

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SECTION 5. GRANT OF SECURITY INTEREST

5.1 To secure payment and performance of all Obligations, each Borrower hereby grants to Lender a continuing security interest in, a lien upon, and a right of set off against, and hereby assigns to Lender as security, the following property and interests in property, whether now owned or hereafter acquired or existing, and wherever located (which property and interests in property, together with all other collateral security for the Obligations granted to or otherwise held or acquired by Lender are referred to herein collectively, as the "Collateral"):

(a) Accounts;

(b) all present and future contract rights, general intangibles (including, but not limited to, tax and duty refunds, registered and unregistered patents, trademarks, service marks, copyrights, trade names, applications for the foregoing, trade secrets, goodwill, processes, drawings, blueprints, customer lists, licenses, whether as licensor or licensee, choses in action and other claims and existing and future leasehold interests in equipment, real estate and fixtures), chattel paper, documents, instruments, investment property, letters of credit, bankers' acceptances and guaranties;

(c) all present and future monies, securities and other investment property, credit balances, deposits, deposit accounts and other property of such Borrower now or hereafter held or received by or in transit to Lender or its affiliates or at any other depository or other institution from or for the account of such Borrower, whether for safekeeping, pledge, custody, transmission, collection or otherwise, and all present and future liens, security interests, rights, remedies, title and interest in, to and in respect of Accounts and other Collateral, including, without limitation, (i) rights and remedies under or relating to guaranties, contracts of suretyship, letters of credit and credit and other insurance related to the Collateral, (ii) rights of stoppage in transit, replevin, repossession, reclamation and other rights and remedies of an unpaid vendor, lienor or secured party, (iii) goods described in invoices, documents, contracts or instruments with respect to, or otherwise representing or evidencing, Accounts or other Collateral, including, without limitation, returned, repossessed and reclaimed goods, and (iv) deposits by and property of account debtors or other persons securing the obligations of account debtors;

(d) Inventory;

(e) Equipment;

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(f) Real Property;

(g) Records; and

(h) all products and proceeds of the foregoing, in any form, including, without limitation, insurance proceeds and all claims against third parties for loss or damage to or destruction of any or all of the foregoing.

5.2 Notwithstanding anything to the contrary set forth in Section 5.1 above, the types or items of Collateral described in such Section shall not include any rights or interests in any contract, lease, permit, license, charter or license agreement covering real or personal property, as such, if under the terms of such contract, lease, permit, license, charter or license agreement, or applicable law with respect thereto, the valid grant of a security interest or lien therein to Lender is prohibited and such prohibition has not been or is not waived or the consent of the other party to such contract, lease, permit, license, charter or license agreement has not been or is not otherwise obtained or under applicable law such prohibition cannot be waived; provided, that, the foregoing exclusion shall in no way be construed (a) to apply to the license of any trademarks or intellectual property by any Borrower or Guarantor to any other Borrower or Guarantor or by CSC Finance or CSC Investment to any Borrower or Guarantor, (b) to apply if any such prohibition is unenforceable under
Section 9-318 of the UCC or other applicable law or (c) so as to limit, impair or otherwise affect Lender's unconditional continuing security interests in and liens upon any rights or interests of any Borrower in or to monies due or to become due under any such contract, lease, permit, license, charter or license agreement (including any Accounts).

5.3 Notwithstanding anything to the contrary contained in Section 5.1 above, the types or items of Collateral described in such Section shall not include any Equipment which is, or at the time of any Borrower's acquisition thereof shall be, subject to a purchase money mortgage or other purchase money lien or security interest (including capitalized or finance leases) permitted under Section 9.8 hereof if: (a) the valid grant of a security interest or lien to Lender in such item of Equipment is prohibited by the terms of the agreement between Borrower and the holder of such purchase money mortgage or other purchase money lien or security interest or under applicable law and such prohibition has not been or is not waived, or the consent of the holder of the purchase money mortgage or other purchase money lien or security interest has not been or is not otherwise obtained, or under applicable law such prohibition cannot be waived and (b) the purchase money mortgage or other purchase money lien or security interest on such item of Equipment is or shall become valid and perfected.

SECTION 6. COLLECTION AND ADMINISTRATION

6.1 Borrowers' Loan Accounts. Lender shall maintain one or more loan account(s) on its books in which shall be recorded (a) all Loans and other Obligations and the Collateral, (b) all payments made by or on behalf of Borrowers and (c) all other appropriate debits and credits as provided in this Agreement, including, without limitation, fees, charges, costs, expenses and interest. All entries in the loan account(s) shall be made in accordance with Lender's customary practices as in effect from time to time.

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6.2 Statements. Lender shall render to Central each month a statement setting forth the balance in the loan account(s) of Borrowers maintained by Lender for Borrowers pursuant to the provisions of this Agreement, including principal, interest, fees, costs and expenses. Each such statement shall be subject to subsequent adjustment by Lender but shall, absent manifest errors or omissions, be considered correct and deemed accepted by Borrowers and presumptively binding upon Borrowers as an account stated except to the extent that Lender receives a written notice from Borrowers of any specific exceptions of Borrowers thereto within sixty (60) days after the date such statement has been mailed by Lender. Until such time as Lender shall have rendered to Central a written statement as provided above, the balance in the loan account(s) of Borrowers shall be presumptive evidence of the amounts due and owing to Lender by Borrowers.

6.3 Collection of Accounts.

(a) Each Borrower shall establish and maintain, at its expense, blocked accounts or lockboxes and related blocked accounts (in either case, "Blocked Accounts"), as Lender may specify, with such banks as are acceptable to Lender into which such Borrower shall promptly deposit and direct its account debtors to directly remit all payments on Accounts and all payments constituting proceeds of Inventory or other Collateral in the identical form in which such payments are made, whether by cash, check or other manner. The banks at which the Blocked Accounts are established shall enter into an agreement, in form and substance satisfactory to Lender, providing that all items received or deposited in the Blocked Accounts are the property of Lender, that the depository bank has no lien upon, or right to setoff against, the Blocked Accounts, the items received for deposit therein, or the funds from time to time on deposit therein and that the depository bank will wire, or otherwise transfer, in immediately available funds, on a daily basis, at such time as Lender shall direct, all funds received or deposited into the Blocked Accounts to such bank account of Lender as Lender may from time to time designate for such purpose ("Payment Account"). Lender shall instruct the depository banks at which the Blocked Accounts are maintained to transfer the funds on deposit in the Blocked Account for any Borrower to such operating bank account of such Borrower as such Borrower may specify in writing to Lender until such time as Lender shall notify the depository bank otherwise. Lender may notify the depository banks at which the Blocked Accounts are maintained that the Blocked Account Agreements are effective and may instruct such banks to transfer all funds received or deposited into the Blocked Accounts to the Payment Account at any time that either: (i) an Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred, or (ii) Borrowers shall have failed to deliver any Borrowing Base Certificate in accordance with the terms hereof, or (iii) upon Lender's good faith behalf that any information contained in any Borrowing Base Certificate is incomplete, inaccurate or misleading, or (iv) the sum of the amount of cash and

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Cash Equivalent of CSC Finance and CSC Investment which are free and clear of any pledge, lien, security interest, claim or other encumbrance and are available to CSC Finance and CSC Investment without condition or restriction, plus the amount of the Excess Availability, shall be less than $4,745,000 for any three (3) consecutive day period prior to October 31, 1998, and $7,500,000 for any three (3) consecutive day period on and after November 1, 1998 or (v) the Excess Availability shall be less than $2,500,000. Each Borrower agrees that all payment made to such Blocked Accounts or other funds received and collected by Lender, whether on the Accounts or as proceeds of Inventory or other Collateral or otherwise shall be the property of Lender. In the event that Lender shall so instruct the depository banks at which the Blocked Accounts are maintained, if at any time thereafter none of the events or circumstances set forth in clauses (i), (ii), (iii), (iv) and (v) above shall exist for a period of ten (10) or more consecutive Business Days, upon the written request of Central, Lender shall instruct the depository banks to thereafter transfer the funds on deposit in the Blocked Accounts to such operating bank account of such Borrower as such Borrower may specify in writing to Lender until such time as Lender shall notify the depository bank otherwise.

(b) For purposes of calculating the amount of the Revolving Loans available to Borrowers, to the extent such payments are to be applied to the Revolving Loans hereunder, such payments will be applied (conditional upon final collection) to the Obligations on the Business Day of receipt by Lender of immediately available funds in the Payment Account, provided such payments and notice thereof are received in accordance with Lender's usual and customary practices as in effect from time to time and within sufficient time to credit such Borrower's loan account on such day, and if not, then on the next Business Day. For purposes of calculating interest on the Obligations, such payments or other funds received will be applied (conditional upon final collection) to the Obligations one (1) Business Day following the date of receipt of immediately available funds by Lender in the Payment Account (the "Collection Period"), provided such payments and notice thereof are received in accordance with Lender's usual and customary practices as in effect from time to time and within sufficient time to credit Borrower's loan account on such day, and if not, then on the next Business Day. In the event that Lenders shall not receive such payments or other funds in the Payment Account pursuant to Section 6.3(a) above, Lender shall be entitled to charge Borrowers an administrative fee equivalent to the collection day charges Lender would have received for the Collection Period had it received such payments or other funds.

(c) Borrowers and all of their affiliates, Subsidiaries, shareholders, directors, employees or agents shall, acting as trustee for Lender, receive, as the property of Lender, any monies, checks, notes, drafts or any other payment relating to and/or proceeds of Accounts or other Collateral which come into their possession or under their control and immediately upon receipt thereof, to the extent required under this Section 6.3 shall deposit or cause the same to be deposited in the Blocked Accounts, or remit the same or cause the same to be remitted, in kind, to Lender. In no event shall the same be commingled with any Borrower's other funds. Borrowers agree to reimburse Lender on demand for any amounts owed or paid to any bank at which a Blocked Account is established or any other bank or person involved in the transfer of funds to or from the

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Blocked Accounts arising out of Lender's payments to or indemnification of such bank or person. The obligation of Borrowers to reimburse Lender for such amounts pursuant to this Section 6.3 shall survive the termination or non-renewal of this Agreement.

6.4 Payments. All Obligations shall be payable to the Lender as provided in Section 6.3 to such account or place as Lender may designate from time to time. Lender may apply payments received or collected from Borrowers or for the account of Borrowers (including, without limitation, the monetary proceeds of collections or of realization upon any Collateral) to such of the Obligations, whether or not then due, in such order and manner as Lender determines. At Lender's option, all principal, interest, fees, costs, expenses and other charges provided for in this Agreement or the other Financing Agreements may be charged directly to the loan account(s) of Borrowers. Borrowers shall make all payments to Lender on the Obligations free and clear of, and without deduction or withholding for or on account of, any setoff, counterclaim, defense, duties, taxes, levies, imposts, fees, deductions, withholding, restrictions or conditions of any kind. If after receipt of any payment of, or proceeds of Collateral applied to the payment of, any of the Obligations, Lender is required to surrender or return such payment or proceeds to any Person for any reason, then the Obligations intended to be satisfied by such payment or proceeds shall be reinstated and continue and this Agreement shall continue in full force and effect as if such payment or proceeds had not been received by Lender. Borrowers shall be liable to pay to Lender, and do hereby indemnify and hold Lender harmless for, the amount of any payments or proceeds surrendered or returned. This Section 6.4 shall remain effective notwithstanding any contrary action which may be taken by Lender in reliance upon such payment or proceeds. This Section 6.4 shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.

6.5 Authorization to Make Loans. Lender is authorized to make the Loans and provide the Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations based upon telephonic or other instructions received from anyone purporting to be an officer of any Borrower or other authorized person or, at the discretion of Lender, if such Loans are necessary to satisfy any Obligations. All requests for Loans, Letter of Credit Accommodations or Supplemental Letter of Credit Accommodations hereunder shall specify the date on which the requested advance is to be made or Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations established (which day shall be a Business Day) and the amount of the requested Loan. Requests received after 11:00 a.m. New York City time on any day shall be deemed to have been made as of the opening of business on the immediately following Business Day. All Loans, Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations under this Agreement shall be conclusively presumed to have been made to, and at the request of and for the benefit of, Borrowers when deposited to the credit of any Borrower or otherwise disbursed or established in accordance with the instructions of any Borrower or in accordance with the terms and conditions of this Agreement.

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6.6 Appointment of Agent for Requesting Loans, Letter of Credit Accommodations, Supplemental Letter of Credit Accommodation and Receipt of Loans and Statements.

(a) Each Borrower hereby irrevocably appoints and constitutes Central as its agent to request and receive Loans, Letter of Credit Accommodations and the Supplemental Letter of Credit Accommodations pursuant to the Agreement and the other Financing Agreements from Lender in the name or on behalf of each Borrower. Lender may disburse the Loans to such bank account of a Borrower or otherwise make such Loans to a Borrower and provide such Letter of Credit Accommodations or Supplemental Letter of Credit Accommodations to Borrowers as Central may designate or direct, without notice to any Borrower, Guarantor or any other person at any time obligated on or in respect of the Obligations.

(b) Central hereby accepts the appointment by each Borrower as the agent of each Borrower pursuant to Section 6.6(a) hereof. Central shall ensure that the disbursement of any Loans to any Borrower requested by or paid to Central or the issuance of any Letter of Credit Accommodations or Supplemental Letter of Credit Accommodations for any Borrower hereunder shall be paid to or for the account of such Borrower.

(c) Each Borrower hereby irrevocably appoints and constitutes Central as its agent to receive statements of account and all other notices from Lender with respect to the Obligations or otherwise under or in connection with this Agreement and the other Financing Agreements.

(d) No purported termination of the appointment of Central as agent as aforesaid shall be effective, except after ten (10) days prior written notice to Lender.

6.7 Use of Proceeds. Borrowers shall use the initial proceeds of the Loans provided by Lender to Borrowers hereunder only for: (a) payments to each of the persons listed in the disbursement direction letter furnished by Borrowers to Lender on or about the date hereof, and (b) costs, expenses and fees in connection with the preparation, negotiation, execution and delivery of this Agreement and the other Financing Agreements. All other Loans made or Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations provided by Lender to Borrowers pursuant to the provisions hereof shall be used by Borrowers only for general operating, working capital and other proper corporate purposes of Borrowers not otherwise prohibited by the terms hereof. None of the proceeds will be used, directly or indirectly, for the purpose of purchasing or carrying any margin security or for the purposes of reducing or retiring any indebtedness which was originally incurred to purchase or carry any margin security or for any other purpose which might cause any of the Loans to be considered a "purpose credit" within the meaning of Regulation U of the Board of Governors of the Federal Reserve System, as amended.

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SECTION 7. COLLATERAL REPORTING AND COVENANTS

7.1 Collateral Reporting.

(a) Borrowers shall provide Lender with the following documents in a form satisfactory to Lender:

(i) on a weekly basis or more frequently at Borrowers' option or as Lender may request, a weekly collateral report setting forth Borrowers' calculation of the Revolving Loans and Letter of Credit Accommodations available to Borrowers pursuant to the terms and conditions contained herein as of the last Business Day of the immediately preceding week as to the Accounts and Eligible Cash Collateral and as of the last day of the preceding month as to Inventory, duly completed, together with all schedules required pursuant to the terms of the weekly collateral report (including a schedule of all Accounts created, collections received and credit memos issued for each day of the immediately preceding week) and on a monthly (but in no event later than the fifth (5th) Business Day of the end of the immediately preceding month) or more frequently at Borrowers' option or as Lender may request, a Borrowing Base Certificate setting forth Borrowers' calculation of the Revolving Loans and Letter of Credit Accommodations available to Borrowers pursuant to the terms and conditions contained herein as of the last Business Day of the immediately preceding month based on the detailed aged account receivable trial balance of Borrowers as to the Accounts and based on the month end perpetual inventory records of Borrowers as to the Inventory, duly completed and executed by the chief financial officer of Central or other appropriate financial officer of Central acceptable to Lender; provided, that, without limiting any other rights of Lender, upon Lender's request, Borrowers shall provide Lender on a daily basis with a schedule of Accounts, collections received and credits issued and on a weekly basis with an inventory report in the event that at any time either:
(A) an Event of Default or act, condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred, or (B) Borrowers shall have failed to deliver any Borrowing Base Certificate in accordance with the terms hereof, or (C) upon Lender's good faith belief, any information contained in any Borrowing Base Certificate is incomplete, inaccurate or misleading, or (D) the sum of the amount of the cash and Cash Equivalents of CSC Finance and CSC Investment which are free and clear of any pledge, lien, security interest, claim or other encumbrance and are available to CSC Finance and CSC Investment without condition of restriction, plus the amount of the Excess Availability as determined by Lender, shall be less than $4,745,000 for any three (3) consecutive day period prior to October 31, 1998 and $7,500,000 for any three (3) consecutive day period on and after November 1, 1998 or (E) the Excess Availability shall be less than $2,500,000;

(ii) on a monthly basis or more frequently as Lender may request, (A) perpetual inventory reports, (B) inventory reports by category, (C) agings of accounts payable, (D) agings of accounts receivable, (E) a list of any chattel paper or instruments payable to any Borrower or Guarantor received in the immediately preceding month, (F) evidence of the cash and Cash Equivalents of Borrowers, CSC Finance and CSC Investment, and (G) a report of named coverage changes under any international credit insurance policy maintained by Borrowers from the last day of the immediately preceding month;

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(iii) upon Lender's request, (A) copies of customer statements and credit memos, remittances advices and reports, and copies of deposit slips and bank statements, (B) copies of shipping and delivery documents, and (C) copies of purchase orders, invoices and delivery of documents for Inventory and Equipment acquired by Borrower;

(iv) such other reports as to the Collateral as Lender shall request from time to time.

(b) Nothing contained in any Borrowing Base Certificate shall be deemed to limit, impair or otherwise affect the rights of Lender contained herein and in the event of any conflict or inconsistency between the calculation of the Revolving Loans and Letter of Credit Accommodations available to Borrowers as set forth in any Borrowing Base Certificate and as determined by Lender, the determination of Lender shall govern and be conclusive and binding upon Borrowers unless a specific objection is made by Central thereto within thirty
(30) days. Without limiting the foregoing, Borrowers shall furnish to Lender any information which Lender may reasonably request regarding the determination and calculation of any of the amounts set forth in the Borrowing Base Certificate. If any Borrower's records or reports of the Collateral are prepared or maintained by an accounting service, contractor, shipper or other agent, each Borrower hereby irrevocably authorizes such service, contractor, shipper or agent to deliver such records, reports and related documents to Lender and to follow Lender's instructions with respect to further services at any time that an Event of Default exists or has occurred.

7.2 Accounts Covenants.

(a) Each Borrower shall notify Lender promptly of: (i) any material delay in such Borrower's performance of any of its obligations to any account debtor or the assertion of any claims, offsets, defenses or counterclaims by any account debtor, or any disputes with account debtors, or any settlement, adjustment or compromise thereof in any case involving amounts in excess of $25,000 in respect of any individual sale transaction with any one account debtor giving rise to an Account, or in excess of $100,000 in the aggregate in respect of any series of sales transactions with any one account debtor giving rise to Accounts, (ii) all material adverse information relating to the financial condition of any material account debtor and (iii) any event or circumstance which, to such Borrower's knowledge would cause Lender to consider any then existing Accounts as no longer constituting Eligible Accounts. No credit, discount, allowance or extension or agreement for any of the foregoing shall be granted to any account debtor without Lender's consent, except in the ordinary course of such Borrower's business in accordance with practices and policies previously disclosed in writing to Lender. So long as no Event of Default exists or has occurred and is continuing, each Borrower shall settle, adjust or compromise any claim, offset, counterclaim or dispute with any account

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debtor. At any time that an Event of Default exists or has occurred and is continuing, Lender shall, at its option, have the exclusive right to settle, adjust or compromise any claim, offset, counterclaim or dispute with account debtors or grant any credits, discounts or allowances.

(b) Each Borrower shall promptly report to Lender any return of Inventory by any one account debtor if the Inventory so returned in such case has a Value in excess of $100,000 or any returns of Inventory by account debtors if the Inventory so returned in such cases has a Value in the aggregate in excess of $500,000. At any time that Inventory is returned, reclaimed or repossessed, the Account (or portion thereof) which arose from such returned, reclaimed or repossessed Inventory shall not be deemed an Eligible Account from the date of such return. In the event any account debtor returns Inventory when an Event of Default exists or has occurred and is continuing, such Borrower shall, upon Lender's request, (i) hold the returned Inventory in trust for Lender, (ii) segregate all returned Inventory from all of its other property,
(iii) dispose of the returned Inventory solely according to Lender's instructions, and (iv) not issue any credits, discounts or allowances with respect thereto without Lender's prior written consent.

(c) With respect to each Account: (i) the amounts shown on any invoice delivered to Lender or schedule thereof delivered to Lender shall be true and complete, (ii) no payments shall be made thereon except payments immediately delivered to Lender to the extent required pursuant to the terms of this Agreement, (iii) no credit, discount, allowance or extension or agreement for any of the foregoing shall be granted to any account debtor except as reported to Lender in accordance with this Agreement and except for credits, discounts, allowances or extensions made or given in the ordinary course of business of Borrowers in accordance with practices and policies previously disclosed to Lender, (iv) there shall be no setoffs, deductions, contras, defenses, counterclaims or disputes existing or asserted with respect thereto except as reported to Lender in accordance with the terms of this Agreement, (v) none of the transactions giving rise thereto will violate any applicable State or Federal laws or regulations, all documentation relating thereto will be legally sufficient under such laws and regulations and all such documentation will be legally enforceable in accordance with its terms.

(d) Lender shall have the right at any time or times, in Lender's name or in the name of a nominee of Lender at any time on or after an Event of Default and in the name of a nominee of Lender or such other person as is acceptable to Borrowers and Lender at any time prior to an Event of Default, to verify the validity, amount or any other matter relating to any Account or other Collateral, by mail, telephone, facsimile transmission or otherwise.

(e) Each Borrower shall deliver or cause to be delivered to Lender, with appropriate endorsement and assignment, with full recourse to such Borrower, all chattel paper and instruments with a face amount in excess of $75,000, or upon Lender's request, or on and after an Event of Default and for so long as the same is continuing, any chattel paper and instruments (regardless of the face amount), which such Borrower now owns or may at any time acquire immediately upon such Borrower's receipt thereof, except as Lender may otherwise agree in writing.

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(f) Lender may, at any time or times that an Event of Default exists or has occurred and is continuing, (i) notify any or all account debtors that the Accounts have been assigned to Lender and that Lender has a security interest therein and Lender may direct any or all accounts debtors to make payment of Accounts directly to Lender, (ii) extend the time of payment of, compromise, settle or adjust for cash, credit, return of merchandise or otherwise, and upon any terms or conditions, any and all Accounts or other obligations included in the Collateral and thereby discharge or release the account debtor or any other party or parties in any way liable for payment thereof without affecting any of the Obligations, (iii) demand, collect or enforce payment of any Accounts or such other obligations, but without any duty to do so, and Lender shall not be liable for its failure to collect or enforce the payment thereof nor for the negligence of its agents or attorneys with respect thereto and (iv) take whatever other action Lender may deem necessary or desirable for the protection of its interests. At any time that an Event of Default exists or has occurred and is continuing, at Lender's request, all invoices and statements sent to any account debtor shall state that the Accounts and such other obligations have been assigned to Lender and are payable directly and only to Lender and each Borrower shall deliver to Lender such originals of documents evidencing the sale and delivery of goods or the performance of services giving rise to any Accounts as Lender may require.

7.3 Inventory Covenants. With respect to the Inventory: (a) each Borrower shall at all times maintain inventory records reasonably satisfactory to Lender, keeping correct and accurate records itemizing and describing the kind, type, quality and quantity of Inventory, the cost therefor and daily withdrawals therefrom and additions thereto; (b) each Borrower shall conduct a physical count of the Inventory at least once each year, but at any time or times as Lender may request on or after an Event of Default, and promptly following such physical inventory shall supply Lender with a report in the form and with such specificity as may be reasonably satisfactory to Lender concerning such physical count; (c) each Borrower shall not remove any Inventory from the locations set forth or permitted herein, without the prior written consent of Lender, except for sales of Inventory in the ordinary course of such Borrower's business and except to move Inventory directly from one location set forth or permitted herein to another such location; (d) upon Lender's request, each Borrower shall, at its expense, no more than once in any twelve (12) month period, but at any time or times as Lender may request on or after an Event of Default exists or has occurred, deliver or cause to be delivered to Lender written reports or appraisals as to the Inventory in form, scope and methodology acceptable to Lender and by an appraiser acceptable to Lender, addressed to Lender and upon which Lender is expressly permitted to rely; (e) each Borrower shall produce, use, store and maintain the Inventory, with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with applicable laws (including, but not limited to, the requirements of the Federal Fair Labor Standards Act of 1938, as amended and all rules, regulations and orders related thereto); (f) each Borrower assumes all responsibility and liability arising from or relating to the production, use, sale or

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other disposition of the Inventory; (g) each Borrower shall not sell Inventory to any customer on approval, or any other basis which entitles the customer to return or may obligate such Borrower to repurchase such Inventory except for the rights of return given to customers of such Borrower in the ordinary course of the business of such Borrower in accordance with current practices as of the date hereof; (h) each Borrower shall keep the Inventory in good and marketable condition; and (i) each Borrower shall not acquire or accept any Inventory on consignment or approval except to the extent such Inventory is specifically identified by such Borrower to Lender in any report with respect to Inventory provided by Borrower to Lender and is not included as Eligible Inventory in any Borrowing Base Certificate or otherwise.

7.4 Equipment Covenants. With respect to the Equipment: (a) upon Lender's request, each Borrower shall, at its expense, no more than once in any twelve (12) month period, but at any time or times as Lender may request on or after an Event of Default, deliver or cause to be delivered to Lender written reports or appraisals as to the Equipment and Real Property in form, scope and methodology acceptable to Lender and by an appraiser acceptable to Lender addressed to Lender and on which Lender is expressly permitted to rely; (b) each Borrower shall keep the Equipment in good order, repair, running and marketable condition (ordinary wear and tear excepted); (c) each Borrower shall use the Equipment with all reasonable care and caution and in accordance with applicable standards of any insurance and in conformity with all applicable laws; (d) the Equipment is and shall be used in Borrowers' businesses and not for personal, family, household or farming use; (e) each Borrower shall not remove any Equipment from the locations set forth or permitted herein, except to the extent necessary to have any Equipment repaired or maintained in the ordinary course of the business of such Borrower or to move Equipment directly from one location set forth or permitted herein to another such location and except for the movement of motor vehicles used by or for the benefit of such Borrower in the ordinary course of business; (f) the Equipment is now and shall remain personal property and each Borrower shall not permit any of the Equipment to be or become a part of or affixed to real property; and (g) each Borrower assumes all responsibility and liability arising from the use of the Equipment.

7.5 Power of Attorney. Each Borrower hereby irrevocably designates and appoints Lender (and all persons designated by Lender) as such Borrower's true and lawful attorney-in-fact, and authorizes Lender, in such Borrower's or Lender's name, to: (a) at any time an Event of Default exists or has occurred
(i) demand payment on Accounts or other proceeds of Inventory or other Collateral, (ii) enforce payment of Accounts by legal proceedings or otherwise,
(iii) exercise all of such Borrower's rights and remedies to collect any Account or other Collateral, (iv) sell or assign any Account upon such terms, for such amount and at such time or times as the Lender deems advisable, (v) settle, adjust, compromise, extend or renew an Account, (vi) discharge and release any Account, (vii) prepare, file and sign such Borrower's name on any proof of claim in bankruptcy or other similar document against an account debtor, (viii) notify the post office authorities to change the address for delivery of such Borrower's mail to an address designated by Lender, and open and dispose of all mail addressed to such Borrower, and (ix) do all acts and things which are necessary, in Lender's determination, to fulfill such Borrower's obligations under this Agreement and the other Financing Agreements and (b) at any time to

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(i) take control in any manner of any item of payment or proceeds thereof deposited or received for credit to the Blocked Accounts (subject to Section 6.3(a) hereof) or constituting part of the Collateral or otherwise received by Lender, (ii) have access to any lockbox or postal box into which any Borrower's customers remittances are sent and the contents thereof (subject to Section 6.3(a) hereof), (iii) endorse any Borrower's name upon any items of payment or proceeds thereof deposited or received for credit to the Blocked Accounts (subject to Section 6.3(a) hereof) or constituting part of the Collateral or otherwise received by Lender and transfer the same to, or deposit the same in the account of Lender for application to the Obligations, (iv) endorse such Borrower's name upon any chattel paper, document, instrument, invoice, or similar document or agreement relating to any Account or any goods pertaining thereto or any other Collateral, (v) sign such Borrower's name on any verification of Accounts and notices thereof to account debtors and (vi) execute in such Borrower's name and file any UCC financing statements or amendments thereto. Each Borrower hereby releases Lender and its officers, employees and designees from any liabilities arising from any act or acts under this power of attorney and in furtherance thereof, whether of omission or commission, except as a result of Lender's own gross negligence or wilful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction.

7.6 Right to Cure. If Lender, in its good faith judgment, deems it necessary to preserve, protect, insure or maintain the Collateral or the rights of Lender with respect thereto or the rights and remedies of Lender under this Agreement and the other Financing Agreements, Lender may, at its option after not less than three (3) days prior notice to Central, (a) discharge taxes, liens, security interests or other encumbrances at any time levied on or existing with respect to the Collateral and (b) pay any amount, incur any expense or perform any act which, in Lender's good faith judgment, is necessary or appropriate to preserve, protect, insure or maintain the Collateral and the rights of Lender with respect thereto, provided, that, such three (3) days prior notice shall not be required in the event that, under the circumstances at such time, in the good faith determination of Lender, it is necessary or desirable for Lender to take any such action earlier in order to preserve or protect any of the Collateral, its value or the rights and interests of Lender therein. Lender may add any amounts so expended to the Obligations and charge any Borrower's account therefor, such amounts to be repayable by Borrowers on demand. Lender shall be under no obligation to effect such cure, payment or bonding and shall not, by doing so, be deemed to have assumed any obligation or liability of Borrowers. Any payment made or other action taken by Lender under this Section shall be without prejudice to any right to assert an Event of Default hereunder and to proceed accordingly.

7.7 Access to Premises. From time to time as requested by Lender, at the cost and expense of Borrowers (subject to Section 9.17 hereof), (a) Lender or its designee shall have complete access to all premises of Borrowers and Guarantors during normal business hours and after reasonable notice to Central, or at any time and without notice to Central if an Event of Default exists or has occurred and is continuing, for the purposes of inspecting, verifying and auditing the Collateral and all of such Borrower's or Guarantor's books and

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records, including, without limitation, the Records, and (b) each Borrower and Guarantor shall promptly furnish to Lender such copies of such books and records or extracts therefrom as Lender may request, and (c) Lender or its designee may use during normal business hours such of each Borrower's or Guarantor's personnel, equipment, supplies and premises as may be reasonably necessary for the foregoing and if an Event of Default exists or has occurred and is continuing for the collection of Accounts and realization of other Collateral.

SECTION 8. REPRESENTATIONS AND WARRANTIES

Borrowers and Guarantors hereby jointly and severally represent and warrant to Lender the following (which shall survive the execution and delivery of this Agreement), the truth and accuracy of which are a continuing condition of the making of Loans and providing Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations by Lender to Borrowers:

8.1 Corporate Existence, Power and Authority; Subsidiaries. Each Borrower and Guarantor is a corporation duly organized and in good standing under the laws of its state of incorporation and is duly qualified as a foreign corporation and in good standing in all states or other jurisdictions where the nature and extent of the business transacted by it or the ownership of assets makes such qualification necessary where the failure to so qualify would have a Material Adverse Effect. The execution, delivery and performance of this Agreement, the other Financing Agreements and the transactions contemplated hereunder and thereunder are all within each Borrower's and Guarantor's corporate powers, have been duly authorized and are not in contravention of law or the terms of such Borrower's or Guarantor's certificate of incorporation, by-laws, or other organizational documentation, or any indenture, agreement or undertaking to which such Borrower or Guarantor is a party or by which such Borrower or its property are bound. This Agreement and the other Financing Agreements constitute legal, valid and binding obligations of Borrowers and Guarantors enforceable in accordance with their respective terms. Borrowers and Guarantors do not have any Subsidiaries except as set forth on the Information Certificate.

8.2 Financial Statements; No Material Adverse Change. All financial statements relating to Borrowers and Guarantors which have been or may hereafter be delivered by Borrowers or Guarantors to Lender have been prepared in accordance with GAAP and fairly present the financial condition and the results of operation of Borrowers and Guarantors as at the dates and for the periods set forth therein, (subject, in the case of interim financial statements, to the absence of footnotes and year-end adjustments). Except as disclosed in any interim financial statements furnished by Borrowers and Guarantors to Lender prior to the date of this Agreement (including the financial statements of CSC as of July 31, 1998 and the September 15, 1998 draft of the Form 10Q of CSC for the quarter ended July 31, 1998), there has been no material adverse change in the assets, liabilities, properties and condition, financial or otherwise, of Borrowers or Guarantors, since the date of the most recent audited financial statements furnished by Borrowers or Guarantors to Lender prior to the date of this Agreement.

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8.3 Chief Executive Office; Collateral Locations. The chief executive office of each Borrower and Guarantor and each Subsidiary of any Borrower or Guarantor and each Borrower's Records concerning Accounts are located only at the address set forth below and its only other places of business and the only other locations of Collateral, if any, are the addresses set forth in the Information Certificate, subject to the right of each Borrower and Guarantor and Subsidiary to establish new locations in accordance with Section 9.2 below. The Information Certificate correctly identifies any of such locations which are not owned by Borrowers and sets forth the owners and/or operators thereof and to the best of each Borrower's knowledge, the holders of any mortgages on such locations.

8.4 Priority of Liens; Title to Properties. The security interests and liens granted to Lender under this Agreement and the other Financing Agreements constitute valid and perfected first priority liens and security interests in and upon the Collateral subject only to the liens indicated on Schedule 8.4 hereto and the other liens permitted under Section 9.8 hereof. Each Borrower and Guarantor has good and marketable title to all of its properties and assets subject to no liens, mortgages, pledges, security interests, encumbrances or charges of any kind, except those granted to Lender and such others as are specifically listed on Schedule 8.4 hereto or permitted under Section 9.8 hereof.

8.5 Tax Returns. Each Borrower and Guarantor has filed, or caused to be filed, in a timely manner, all tax returns (or all extensions with respect thereto), reports and declarations which are required to be filed by it where the failure to file would have a Material Adverse Effect. All information in such tax returns, reports and declarations is complete and accurate in all material respects. Each Borrower and Guarantor, and each Subsidiary of any Borrower or Guarantor, has paid or caused to be paid all taxes due and payable or claimed due and payable in any assessment received by it, except taxes the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, Guarantor or Subsidiary and with respect to which adequate reserves have been set aside on its books. Adequate provision has been made for the payment of all accrued and unpaid Federal, State, county, local, foreign and other taxes whether or not yet due and payable and whether or not disputed.

8.6 Litigation. Except as set forth on the Information Certificate, there is no present investigation by any governmental agency pending, or to the best of each Borrower's and Guarantor's knowledge threatened, against or affecting Borrowers, Guarantors, their assets or businesses and there is no action, suit, proceeding or claim by any Person pending, or to the best of each Borrower's knowledge threatened, against any Borrower or Guarantor or its assets or goodwill, or against or affecting any transactions contemplated by this Agreement, which if adversely determined against such Borrower or Guarantor would have a Material Adverse Effect.

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8.7 Compliance with Other Agreements and Applicable Laws. Each Borrower and Guarantor is not in default in any respect under, or in violation of any of the terms of, any agreement, contract, instrument, lease or other commitment to which it is a party or by which it or any of its assets are bound, where such default or violation would have a Material Adverse Effect. Each Borrower and Guarantor is in compliance in all respects with all applicable provisions of laws, rules, regulations, licenses, permits, approvals and orders of any foreign, Federal, State or local governmental authority, where the failure to so comply would have a Material Adverse Effect.

8.8 Bank Accounts. All of the deposit accounts, investment accounts or other accounts in the name of or used by any Borrower or Guarantor, or any Subsidiary of any Borrower or Guarantor, maintained at any bank or other financial institution are set forth on Schedule 8.8 hereto, subject to the right of Borrowers, Guarantors, or any Subsidiary to establish new accounts in accordance with Section 9.13 hereof.

8.9 Environmental Compliance.

(a) Except as set forth on Schedule 8.9 hereto, each Borrower and Guarantor has not generated, used, stored, treated, transported, manufactured, handled, produced or disposed of any Hazardous Materials, on or off its premises (whether or not owned by it) in any manner which at any time violates any applicable Environmental Law or any license, permit, certificate, approval or similar authorization thereunder, and the operations of each Borrower and Guarantor comply in all respects with all Environmental Laws and all licenses, permits, certificates, approvals and similar authorizations thereunder.

(b) Except as set forth on Schedule 8.9 hereto, there has been no investigation, proceeding, complaint, order, directive, claim, citation or notice by any governmental authority or any other person nor is any pending, or to the best of each Borrower's and Guarantor's knowledge threatened, with respect to any non-compliance with or violation of the requirements of any Environmental Law by any Borrower or Guarantor nor has there been any release, spill or discharge, overtly threatened or actual, of any Hazardous Material on any properties of any Borrower, or to the best of each of Borrower's and Guarantor's knowledge, releases, spills or discharges from any properties at which any Borrower or Guarantor has transported, stored or disposed of any Hazardous Materials which would have a Material Adverse Effect.

(c) Except as set forth on Schedule 8.9 hereto, each Borrower and Guarantor has no liability (contingent or otherwise) in connection with a release, spill or discharge, threatened or actual, of any Hazardous Materials or the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials.

(d) Each Borrower and Guarantor has all licenses, permits, certificates, approvals or similar authorizations required to be obtained or filed in connection with the operations of such Borrower and Guarantor under any Environmental Law, in each case where the failure to obtain or file any such

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licenses, permits, certificates, approvals or similar authorizations would have a Material Adverse Effect. All of such licenses, permits, certificates, approvals or similar authorizations of each Borrower and Guarantor are valid and in full force and effect.

8.10 Employee Benefits.

(a) Each Borrower and Guarantor has not engaged in any transaction in connection with which such Borrower and Guarantor or any of its ERISA Affiliates could be subject to either a civil penalty assessed pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code, including any accumulated funding deficiency described in Section 8.10(c) hereof and any deficiency with respect to vested accrued benefits described in Section 8.10(d) hereof.

(b) No liability to the Pension Benefit Guaranty Corporation has been or is expected by any Borrower or Guarantor to be incurred with respect to any employee benefit plan of such Borrower or any of its ERISA Affiliates. There has been no reportable event (within the meaning of Section 4043(b) of ERISA) or any other event or condition with respect to any employee benefit plan of any Borrower or Guarantor or any of its ERISA Affiliates which presents a risk of termination of any such plan by the Pension Benefit Guaranty Corporation.

(c) Full payment has been made of all amounts which each Borrower, Guarantor or any of its ERISA Affiliates is required under Section 302 of ERISA and Section 412 of the Code to have paid under the terms of each employee benefit plan as contributions to such plan as of the last day of the most recent fiscal year of such plan ended prior to the date hereof, and no accumulated funding deficiency (as defined in Section 302 of ERISA and Section 412 of the Code), whether or not waived, exists with respect to any employee benefit plan, including any penalty or tax described in Section 8.10(a) hereof and any deficiency with respect to vested accrued benefits described in Section 8.10(d) hereof.

(d) The current value of all vested accrued benefits under all employee pension benefit plans maintained by each Borrower and Guarantor that are subject to Title IV of ERISA does not exceed the current value of the assets of such plans allocable to such vested accrued benefits, including any penalty or tax described in Section 8.10(a) hereof and any accumulated funding deficiency described in Section 8.10(d) hereof. The terms "current value" and "accrued benefit" have the meanings specified in ERISA.

(e) Neither any Borrower nor Guarantor nor any of its ERISA Affiliates is or has ever been obligated to contribute to any "multiemployer plan" (as such term is defined in Section 4001(a)(3) of ERISA) that is subject to Title IV of ERISA except for the multiemployer plan for employees at the sprinkler plant of Central in Lansdale, Pennsylvania maintained by the International Association of Machinists.

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8.11 Interrelated Businesses. CSC is the direct and beneficial owner and holder of all of the issued and outstanding shares of Capital Stock of Central and CSC Finance. Central is the direct and beneficial owner and holder of all of the issued and outstanding shares of Capital Stock of CPVC and Castings. CSC Finance is the direct and beneficial owner and holder of all of the issued and outstanding shares of Capital Stock of CSC Investment. Borrowers and Guarantors make up a related organization of various entities constituting a single economic and business enterprise so that Borrowers and Guarantors share an identity of interests such that any benefit received by any one of them benefits the others. Borrowers and Guarantors render services to or for the benefit of the other Borrowers and Guarantors, make loans and advances and provide other financial accommodations to or for the benefit of the other Borrowers and Guarantors (including inter alia, the payment by Borrowers and Guarantors of creditors of the other Borrowers or Guarantors and guarantees by Borrowers and Guarantors of indebtedness of the other Borrowers and Guarantors and provide administrative, marketing, payroll and management services to or for the benefit of the other Borrowers and Guarantors). Borrowers and Guarantors have centralized accounting and legal service, common officers and directors and are identified to creditors as a single economic and business enterprise.

8.12 Accuracy and Completeness of Information. All information furnished by or on behalf of any Borrower or Guarantor in writing to Lender in connection with this Agreement or any of the other Financing Agreements or any transaction contemplated hereby or thereby, including, without limitation, all information on the Information Certificate is true and correct in all material respects on the date as of which such information is dated or certified and does not omit any material fact necessary in order to make such information not misleading. No event or circumstance has occurred which has had or could reasonably be expected to have a material adverse affect on the businesses, assets or prospects of any Borrower or Guarantor, which has not been fully and accurately disclosed to Lender in writing.

8.13 Survival of Warranties; Cumulative. All representations and warranties contained in this Agreement or any of the other Financing Agreements shall survive the execution and delivery of this Agreement and shall be deemed to have been made again to Lender on the date of each additional borrowing or other credit accommodation hereunder and shall be conclusively presumed to have been relied on by Lender regardless of any investigation made or information possessed by Lender. The representations and warranties set forth herein shall be cumulative and in addition to any other representations or warranties which any Borrower or Guarantor shall now or hereafter give, or cause to be given, to Lender.

SECTION 9. AFFIRMATIVE AND NEGATIVE COVENANTS

9.1 Maintenance of Existence. Each Borrower and Guarantor shall at all times preserve, renew and keep in full, force and effect its corporate existence and rights and franchises with respect thereto and maintain in full force and effect all permits, licenses, trademarks, tradenames, approvals, authorizations, leases and contracts necessary to carry on its business as presently or proposed

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to be conducted. Each Borrower and Guarantor shall give Lender thirty (30) days prior written notice of any proposed change in its corporate name, which notice shall set forth the new name and such Borrower or Guarantor shall deliver to Lender a copy of the amendment to the Certificate of Incorporation of such Borrower or Guarantor providing for the name change certified by the Secretary of State of the jurisdiction of incorporation of such Borrower or Guarantor as soon as it is available.

9.2 New Collateral Locations. Each Borrower and Guarantor may open any new location within the United States so long as such Borrower or Guarantor (a) gives Lender thirty (30) days prior written notice of the intended opening of any such new location; except, that Borrowers and Guarantors shall not be required to give such prior written notice to Lender of a new location of Borrowers or Guarantors, provided, that, each of the following conditions is satisfied: (i) no Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred, (ii) the total amount of Inventory located at all such new locations shall not exceed $100,000 in the aggregate (provided, that, if Borrowers have provided evidence to Lender that such new location is in a jurisdiction in which the security interest or lien of Lender is perfected, the amount of Inventory at such location shall not be considered for purposes of such limit), and (iii) Borrowers and Guarantors shall include such new locations in the next monthly report of locations to be provided by Borrowers and Guarantors to Lender in accordance with and to the extent required under Section 9.6 hereof, and (b) executes and delivers, or causes to be executed and delivered, to Lender such agreements, documents, and instruments as Lender may deem reasonably necessary or desirable to protect its interests in the Collateral at such location, including, without limitation, UCC financing statements.

9.3 Compliance with Laws, Regulations, Etc.

(a) Each Borrower or Guarantor shall, and shall cause any Subsidiary to, at all times, comply in all respects with all laws, rules, regulations, licenses, permits, approvals and orders applicable to it and duly observe all requirements of any Federal, State or local governmental authority, including ERISA, the Occupational Safety and Health Act of 1970, as amended, the Fair Labor Standards Act of 1938, as amended, and all statutes, rules, regulations, orders, permits and stipulations relating to environmental pollution and employee health and safety, including all of the Environmental Laws, where the failure to so comply would have a Material Adverse Effect.

(b) Each Borrower or Guarantor shall, and shall cause any Subsidiary to, establish and maintain, at its expense, a system to assure and monitor its continued compliance in all material respects with all Environmental Laws in all of its operations. Each Borrower and Guarantor shall, and shall cause any Subsidiary to, take appropriate action in a timely manner to respond to any material non-compliance with any Environmental Laws. Borrowers shall report within a reasonable time to Lender on such response taken by any Borrower or Guarantor pursuant to the preceding sentence.

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(c) Each Borrower and Guarantor shall give both oral and written notice to Lender immediately upon such Borrower's or Guarantor's receipt of any notice of, or it otherwise obtaining knowledge of, (i) the occurrence of any event involving the release, spill or discharge, threatened or actual, of any Hazardous Material where the occurrence of such event would have a Material Adverse Effect or (ii) any formal investigation, proceeding, complaint, order, directive, claims, citation or notice from any Person with respect to: (A) non-compliance with or violation of any Environmental Law by such Borrower or Guarantor, (B) the release, spill or discharge, threatened or actual, of a reportable quantity of any Hazardous Material or (C) the generation, use, storage, treatment, transportation, manufacture, handling, production or disposal of any Hazardous Materials not in compliance with all Environmental Laws where such failure to so comply would have a Material Adverse Effect or (D) any other environmental, health or safety matter, which affects any Borrower or Guarantor or its business, operations or assets or any properties at which any Borrower or Guarantor transported, stored or disposed of any Hazardous Materials in any way that has or would have a Material Adverse Effect.

(d) Without limiting the generality of the foregoing, whenever Lender reasonably determines that there is non-compliance, or any condition which requires any action by or on behalf of any Borrower or Guarantor in order to avoid any non-compliance with any Environmental Law, each Borrower and Guarantor shall, at Lender's request and at the expense of such Borrower and Guarantor,
(i) cause an independent environmental engineer acceptable to Lender to conduct such tests of the site where such non-compliance or alleged non-compliance with such Environmental Laws has occurred as to such non-compliance and prepare and deliver to Lender a report as to such non-compliance setting forth the results of such tests, a proposed plan for responding to any environmental problems described therein, and an estimate of the costs thereof and (ii) provide to Lender a supplemental report of such engineer whenever the scope of such non-compliance, or the response thereto or the estimated costs thereof, shall change in any material respect.

(e) Each Borrower and Guarantor shall indemnify and hold harmless Lender, its directors, officers, employees, agents, invitees, representatives, successors and assigns, from and against any and all losses, claims, damages, liabilities, costs, and expenses (including reasonable attorneys' fees and legal expenses) directly or indirectly arising out of or attributable to the use, generation, manufacture, reproduction, storage, release, threatened release, spill, discharge, disposal or presence of a Hazardous Material, including the costs of any required or necessary repair, cleanup or other remedial work with respect to any property of such Borrower or Guarantor and the preparation and implementation of any closure, remedial or other required plans.

(f) All indemnifications in this Section 9.3 shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.

9.4 Payment of Taxes and Claims. Each Borrower and Guarantor shall, and shall cause any Subsidiary to, duly pay and shall cause any Subsidiary to, discharge all taxes, assessments, contributions and governmental charges upon or

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against it or its properties or assets, except for taxes the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower, Guarantor or Subsidiary and with respect to which adequate reserves have been set aside on its books. Borrowers and Guarantors shall be liable for any tax or penalties imposed on Lender as a result of the financing arrangements provided for herein and each Borrower and Guarantor agrees to indemnify and hold Lender harmless with respect to the foregoing, and to repay to Lender on demand the amount thereof, and until paid by Borrowers such amount shall be added and deemed part of the Loans; provided, that, nothing contained herein shall be construed to require Borrowers or Guarantors to pay any income or franchise taxes attributable to the income of Lender from any amounts charged or paid hereunder to Lender. The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.

9.5 Insurance.

(a) Each Borrower and Guarantor shall, and shall cause any Subsidiary to, at all times, maintain with financially sound and reputable insurers insurance with respect to the Collateral against loss or damage and all other insurance of the kinds and in the amounts customarily insured against or carried by corporations of established reputation engaged in the same or similar businesses and similarly situated. Said policies of insurance shall be satisfactory to Lender as to form, amount and insurer. Each Borrower and Guarantor shall furnish certificates, policies or endorsements to Lender as Lender shall require as proof of such insurance, and, if any Borrower or Guarantor fails to do so, Lender is authorized, but not required, to obtain such insurance at the expense of Borrowers and Guarantors. All policies shall provide for at least thirty (30) days prior written notice to Lender of any cancellation or reduction of coverage (except for cancellation as a result of the failure to pay premiums, in which case at least such policies shall provide for ten (10) days prior written notice) and that Lender may act as attorney for Borrowers and Guarantors in obtaining, and at any time an Event of Default exists or has occurred and is continuing, adjusting, settling, amending and canceling such insurance. Each Borrower and Guarantor shall cause Lender to be named as a loss payee and an additional insured (but without any liability for any premiums) under such insurance policies and each Borrower and Guarantor shall obtain non-contributory lender's loss payable endorsements to all insurance policies in form and substance satisfactory to Lender. Such lender's loss payable endorsements shall specify that the proceeds of such insurance shall be payable to Lender as its interests may appear and further specify that Lender shall be paid regardless of any act or omission by any Borrower or Guarantor or any of its affiliates. At its option, Lender may apply any insurance proceeds received by Lender at any time to the cost of repairs or replacement of Collateral and/or to payment of the Obligations, whether or not then due, in any order and in such manner as Lender may determine or hold such proceeds as cash collateral for the Obligations, except that notwithstanding anything to the contrary contained herein, if any of the Equipment or any portion of any building, structure or improvement on the Real Property of a Borrower is lost, physically damaged or destroyed, upon the written request of Central, Lender shall release the net

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cash proceeds from insurance received by Lender pursuant to this Section 9.5 to Central as a result of such loss, damage or destruction to the extent necessary for the repair, refurbishing or replacement of such Equipment or building, structure or improvement, provided, that, all of the following conditions are satisfied: (i) no Event of Default or act, condition or event which with notice or passage of time or both would constitute an Event of Default shall exist or have occurred and be continuing, (ii) the amount of the insurance proceeds are sufficient, in Lender's determination, to effect such repair, refurbishing or replacement in a satisfactory manner, (iii) such proceeds shall be used first to repair, refurbish or replace the Collateral so lost, damaged or destroyed (free and clear of any security interests, liens, claims or encumbrances), (iv) the insurance carrier shall have waived any right of subrogation against Borrower and Guarantors under its policy, (v) the casualty resulted in a payment of $250,000 in insurance proceeds or less, (vi) such repair, refurbishing or replacement shall be commenced as soon as reasonably practicable and shall be diligently pursued to satisfactory completion, and (vii) the repair, refurbishing or replacement to which the proceeds are applied shall cause the Equipment, building, structure or improvement so lost, damaged, destroyed to be of at least equal value and substantially the same character as prior to such loss, damage or destruction.

9.6 Financial Statements and Other Information.

(a) Each Borrower and Guarantor shall keep proper books and records in which true and complete entries shall be made of all dealings or transactions of or in relation to the Collateral and the businesses of Borrowers, Guarantors and their Subsidiaries (if any) in accordance with GAAP and Borrowers and Guarantors shall furnish or cause to be furnished to Lender: (i) within thirty-five (35) days after the end of each fiscal month (other than a month which is at the end of a fiscal quarter or fiscal year of CSC, in which case within sixty (60) days after the end thereof), monthly unaudited consolidated financial statements (including in each case balance sheets, statements of income and loss and statements of cash flows), and unaudited consolidating financial statements (including in each case balance sheets and statements of income and loss), all in reasonable detail, fairly presenting the financial position and the results of the operations of Central and its Subsidiaries as of the end of and through such fiscal month (subject to lack of footnotes and year-end adjustments) and
(ii) within one hundred twenty (120) days after the end of each fiscal year, audited consolidated financial statements of Central and its Subsidiaries (including in each case balance sheets, statements of income and loss statements of cash flows and statements of shareholders' equity) and the unaudited consolidating financial statements used to prepare such audited financial statements (including in each case balance sheets and statements of income and loss), and as to the consolidated financial statements the accompanying notes thereto, all in reasonable detail, fairly presenting the financial position and the results of the operations of Central and its Subsidiaries as of the end of and for such fiscal year, together with the opinion of independent certified public accountants, which accountants shall be an independent accounting firm selected by Central and reasonably acceptable to Lender, that such financial statements have been prepared in accordance with GAAP, and present fairly the results of operations and financial condition of Central and its Subsidiaries as of the end of and for the fiscal year then ended.

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(b) Borrowers and Guarantors shall promptly notify Lender in writing of the details of (i) any loss, damage, investigation, action, suit, proceeding or claim relating to the Collateral or any other property which is security for the Obligations or which would result in any material adverse change in any Borrower's or Guarantor's business, properties, assets, goodwill or condition, financial or otherwise and (ii) the occurrence of any Event of Default or act, condition or event which, with the passage of time or giving of notice or both, would constitute an Event of Default.

(c) Borrowers and Guarantors shall promptly after the sending or filing thereof furnish or cause to be furnished to Lender copies of all reports which any Borrower or Guarantor sends to its stockholders generally and copies of all reports and registration statements which any Borrower or Guarantor files with the Securities and Exchange Commission, any national securities exchange or the National Association of Securities Dealers, Inc.

(d) Borrowers shall promptly notify Lender in writing in the event that at any time after the delivery of a Borrowing Base Certificate by Borrowers to Lender but prior to the delivery of the next Borrowing Base Certificate to be delivered by Borrowers to Lender in accordance with the terms hereof: (i) the amount of Revolving Loans and Letter of Credit Accommodations available to Borrower pursuant to the terms and conditions contained herein (calculated without regard to the then outstanding Revolving Loans and Letter of Credit Accommodations) is less than eighty (80%) percent of the amount of Revolving Loans and Letter of Credit Accommodations available to Borrowers pursuant to the terms and conditions contained herein (calculated without regard to the then outstanding Revolving Loans and Letter of Credit Accommodations) as set forth in the most recent Borrowing Base Certificate previously delivered by Borrower to Lender pursuant to Section 7.1 hereof, (ii) the Revolving Loans made by Lender to Borrower and/or Letter of Credit Accommodations outstanding at such time exceed the amount of the Revolving Loans and Letter of Credit Accommodations then available to Borrower under the terms hereof as a result of any decrease in the amount of Revolving Loans and Letter of Credit Accommodations then available and the amount of such excess, or (iii) the sum of the amount of the cash and Cash Equivalents of CSC Finance and CSC Investment which are free and clear of any pledge, lien, security interest, claim or other encumbrance and are available to CSC Finance and CSC Investment without condition or restriction, plus the amount of the Excess Availability shall be less than $4,745,000 for any three (3) consecutive day period prior to October 31, 1998 and $7,500,000 for any three (3) consecutive day period on and after November 1, 1998 or (iv) the Excess Availability shall be less than $2,500,000.

(e) Borrowers and Guarantors shall furnish or cause to be furnished to Lender such budgets, forecasts, projections and other information respecting the Collateral and the businesses of Borrowers and Guarantors as Lender may, from time to time, reasonably request. Lender is hereby authorized to deliver a copy

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of any financial statement or any other information relating to the businesses of Borrowers and Guarantors to any court or other government agency or to any Participant or assignee or prospective Participant or assignee. Each Borrower and Guarantor hereby irrevocably authorizes and directs all accountants or auditors to deliver to Lender, at Borrowers' expense, copies of the financial statements of Borrowers or Guarantors and any management letters prepared by such accountants or auditors on behalf of Borrowers or Guarantors. Each Borrower and Guarantor hereby authorizes and directs (and CSC shall cause CSC Investment and CSC Finance to authorize and direct) any depository bank or other financial institution at which any cash or Cash Equivalents of Borrowers or Guarantors constituting Eligible Cash Collateral are maintained (and any cash or Cash Equivalents of CSC Investment and CSC Finance are maintained) to provide directly to Lender such information with respect to the accounts in which such cash or Cash Equivalents are held and with respect to the cash or Cash Equivalents therein as Lender may request and Borrowers and Guarantors shall (and CSC shall cause CSC Investment and CSC Finance to) so notify such banks or other financial institutions promptly upon Lender's request. Any documents, schedules, invoices or other papers delivered to Lender may be destroyed by Lender one (1) year after the same are delivered to Lender, except as otherwise designated by Central to Lender in writing.

(f) Without limiting the rights of Lender under any other provisions of this Agreement, as soon as available, but in any event not later than ten (10) days after the end of each calendar month, Borrowers and Guarantors shall deliver to Lender, in form and substance satisfactory to Lender, in each case certified by the chief financial officer of Central as true and correct: (i) a statement confirming the payment of rent and other amounts due to owners and lessors of Real Property used by Borrowers and Guarantors in the immediately preceding month, subject to year-end or periodic adjustments, and (ii) the addresses of all locations of Borrowers and Guarantors opened and existing locations closed or sold, in each case since the date of the most recent certificate delivered to Lender containing the information required under this subsection (ii), or if no such certificate has been delivered, then since the date hereof, other than locations at which less than $25,000 of Inventory is located so long as the aggregate amount of Inventory at all of such locations does not exceed $100,000 and (iii) a report of the outstanding principal amount of indebtedness incurred by Borrowers or Guarantors permitted under Section 9.9(k), together with such other information with respect thereto as Lender may request.

9.7 Sale of Assets, Consolidation, Merger, Dissolution, Etc. Each Borrower and Guarantor shall not, directly or indirectly, and shall not permit any Subsidiary to, (a) merge into or with or consolidate with any other Person or permit any other Person to merge into or with or consolidate with it except, that, any Borrower or Guarantors may merge with and into or consolidate with any of other Borrower or Guarantor, provided, that, each of the following conditions is satisfied as determined by Lender: (i) Lender shall have received not less than five (5) days prior written notice of the intention of such Borrower or Guarantor to so merge or consolidate and such information with respect thereto as Lender may request, (ii) as of the effective date of the merger or consolidation and after giving effect thereto, no Event of Default or act,

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condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred, (iii) Lender shall have received true, correct and complete copies of all agreements, documents and instruments relating to such merger, including, but not limited to, the certificate or certificates of merger as filed with each appropriate Secretary of State, (iv) the surviving entity shall immediately upon the effectiveness of the merger expressly confirm in writing pursuant to an agreement, in form and substance satisfactory to Lender, its continuing liability in respect of the Obligations and Financing Agreements and execute and deliver such other agreements, documents and instruments as Lender may reasonably request in connection therewith, (v) the surviving entity shall, immediately before and immediately after giving effect to such transaction or series of transactions have an Adjusted Tangible Net Worth (including, without limitation, any indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions) equal to or greater than the Adjusted Tangible Net Worth of each of the entities involved in such merger immediately prior to such transaction or series of transactions, and (vi) each Guarantor shall ratify and confirm that its guarantees of the Obligations shall apply to the Obligations as assumed by such surviving entity; or (b) sell, assign, lease, transfer, abandon or otherwise dispose of any Capital Stock or indebtedness to any other Person or any of its assets to any other Person, except for (i) sales of Inventory in the ordinary course of business, (ii) the remarketing of the Huntsville Bonds in accordance with Section 9.16 hereof,
(iii) the disposition of worn-out or obsolete Equipment or Equipment no longer used in the businesses of Borrower so long as (A) any proceeds are paid to Lender and (B) such sales do not involve Equipment having an aggregate fair market value in excess of $500,000 for all such Equipment disposed of in any fiscal year of Borrower (provided, that, either simultaneously with or prior to such sale, Borrower may replace such Equipment with other Equipment of equal or greater utility and value prior to such Equipment becoming worn out or obsolete or no longer used in the business of Borrower and free from any lien, security interest or other encumbrance of any other person in which case the sale of such Equipment shall not be included in the dollar limit provided for in this clause (B)), (iv) the issuance and sale of Capital Stock of CSC consisting of common stock pursuant to the existing stock option plans of CSC as in effect on the date hereof and (v) the issuance and sale of Capital Stock of CSC consisting of common stock (provided, that, the terms of such issuance and sale shall not include any restrictions or limitations with respect to any Borrower or Guarantor) or (c) form or acquire any Subsidiaries; or (d) wind up, liquidate or dissolve; or (e) agree to do any of the foregoing.

9.8 Encumbrances. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, create, incur, assume or suffer to exist any security interest, mortgage, pledge, lien, charge or other encumbrance of any nature whatsoever on any of its assets or properties, including, without limitation, the Collateral, except:

(a) liens and security interests of Lender;

(b) liens securing the payment of taxes, either not yet overdue or the validity of which are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower or Guarantor and with respect to which adequate reserves have been set aside on its books;

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(c) non-consensual statutory liens (other than liens securing the payment of taxes) arising in the ordinary course of such Borrower's or Guarantor's business to the extent: (i) such liens secure indebtedness which is not overdue or (ii) such liens secure indebtedness relating to claims or liabilities which (A) are fully insured and being defended at the sole cost and expense and at the sole risk of the insurer or (B) are being contested in good faith by appropriate proceedings diligently pursued and available to such Borrower or Guarantor, in each case under clause (i) or (ii) above prior to the commencement of foreclosure or other similar proceedings and with respect to which adequate reserves have been set aside on its books;

(d) zoning restrictions, easements, licenses, covenants and other restrictions affecting the use of real property which do not interfere in any material respect with the use of such real property or ordinary conduct of the business of any Borrower or Guarantor as presently conducted thereon or materially impair the value of the real property which may be subject thereto;

(e) purchase money security interests in Equipment (including capital leases) and purchase money mortgages on real estate not to exceed $5,000,000 in the aggregate at any time outstanding so long as such security interests and mortgages do not apply to any property of Borrowers or Guarantors other than the Equipment or real estate so acquired, and the indebtedness secured thereby does not exceed the cost of the Equipment or real estate so acquired, as the case may be;

(f) the mortgage and lien upon, and security interest in, the Real Property of Castings located in Anniston, Alabama and the other assets of Castings (as in effect on the date hereof) described on Schedule 9.8(f) hereof pursuant to the First Union Letter of Credit Documents (as in effect on the date hereof) to secure the contingent reimbursement obligations of Castings to First Union National Bank pursuant to such agreements to the extent permitted under
Section 9.9 hereof;

(g) the pledge or deposit by Central of funds to be held in the Omega trust account established in connection with any settlement of the CPSC Action and the Omega Litigation, provided, that, (i) Borrowers shall give written notice to Lender of the establishment of such account and such information with respect thereto as Lender may request, and (ii) Lender shall receive monthly reports of all amounts paid into such account and all other amounts paid in respect of and in accordance with the terms of any settlement of the CPSC Action and the Omega Litigation;

(h) the security interests in and liens upon the assets of Borrowers consisting of Accounts and Inventory arising after the date hereof in favor of First Union National Bank to secure the indebtedness of Castings to First Union National Bank arising under the Swap Agreement, as in effect on the date hereof,

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provided, that, (i) Lender shall have received true, correct and complete copies of all agreements, documents and instruments evidencing or otherwise related to such indebtedness, as duly authorized, executed and delivered by the parties thereto, (ii) the security interests and liens on the assets of Borrowers in favor of First Union National Bank to secure such indebtedness shall be junior and subordinate to the security interests and liens of Lender on such assets on terms and conditions acceptable to Lender, and (iii) Lender shall have received, in form and substance satisfactory to Lender, an intercreditor agreement between Lender and First Union National Bank, as acknowledged and agreed to by Borrowers, duly authorized, executed and delivered by First Union National Bank and Borrowers, providing for, inter alia, the parties' relative rights and priorities with respect to the assets of Borrowers; and

(i) the security interests and liens set forth on Schedule 8.4 hereto.

9.9 Indebtedness. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, incur, create, assume, become or be liable in any manner with respect to, or permit to exist, any obligations or indebtedness, except:

(a) the Obligations;

(b) trade obligations in the ordinary course of business to be paid by such Borrower or Guarantor in accordance with its customary practices and normal accruals in the ordinary course of business not yet due and payable, or in either case as to such trade obligations or normal accruals with respect to which such Borrower or Guarantor is contesting in good faith the amount or validity thereof by appropriate proceedings diligently pursued and available to such Borrower or Guarantor and with respect to which adequate reserves have been set aside on its books;

(c) purchase money indebtedness (including capital leases) to the extent not incurred or secured by liens (including capital leases) in violation of any other provision of this Agreement;

(d) indebtedness of Castings evidenced by or arising under the Lease Agreement, dated as of November 1, 1995, between the Calhoun County Economic Development Council, as lessor, and Castings, as lessee, with respect to the Real Property and certain Equipment of Castings in Anniston, Alabama as in effect on the date hereof; provided, that:

(i) the aggregate amount required to be paid by Castings pursuant to such Lease Agreement shall not exceed the currently outstanding principal amount of the Calhoun County Bonds (plus an amount equal to three (3) months interests thereon) as of the date hereof which is $2,753,437.50, less the aggregate amount of all repayments, repurchases or redemptions, whether optional or mandatory in respect thereof, plus interest thereon at the rate provided for in the Calhoun County Bonds as in effect on the date hereof,

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(ii) such indebtedness is not secured by any assets or properties of any Borrower or Guarantor, provided, that, the rights of Castings to the possession of the Real Property in Anniston, Alabama and certain of the fixtures and equipment located thereon which are leased by Castings pursuant to such Lease Agreement are subject to the rights of the Calhoun County Economic Development Council and the Calhoun County Bond Trustee (as assignee of the Calhoun County Economic Development Council) to take possession thereof under the terms of such Lease Agreement in the event the Calhoun County Bond Trustee does not receive payments in respect of the Calhoun County Bonds under the Calhoun County Bond Letter of Credit,

(iii) Borrowers and Guarantors shall not, directly or indirectly, make any payments in respect of such indebtedness, except, that, Castings may make regularly scheduled payments of rent when due in accordance with the terms of such Lease Agreement as in effect on the date hereof,

(iv) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change any terms of such indebtedness or any of the Calhoun County Bond Agreements, except that Castings may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such indebtedness other than pursuant to payments thereof, or to reduce the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and

(v) Borrowers and Guarantors shall furnish to Lender all notices, demands or other materials concerning such indebtedness either received by any Borrower or Guarantor or on its behalf, promptly after receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be;

(e) indebtedness of Castings evidenced by or arising under the Alabama State Bond Agreements as in effect on the date hereof; provided, that:

(i) the principal amount of such indebtedness (plus the amount equal to three (3) months interest thereon) shall not exceed $7,335,000, less the aggregate amount of all repayments, repurchases or redemptions, whether optional or mandatory in respect thereof, plus interest thereon at the rate provided for in the Alabama State Bonds as in effect on the date hereof,

(ii) such indebtedness is not secured by any assets or properties of any Borrower or Guarantor,

(iii) Borrowers and Guarantors shall not, directly or indirectly, make any payments in respect of such indebtedness, except, that, Castings may make payments of principal or interest when due in accordance with the terms of the Alabama State Bond Agreements as in effect on the date hereof,

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(iv) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change any terms of such indebtedness or any of the Alabama State Bond Agreements, except that Castings may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such indebtedness other than pursuant to payments thereof, or to reduce the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and

(v) Borrowers and Guarantors shall furnish to Lender all notices, demands or other materials concerning such indebtedness either received by any Borrower or Guarantor or on its behalf, promptly after receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be;

(f) indebtedness of CPVC evidenced by or arising under the Lease Agreement, dated as of December 1, 1997, between the Industrial Development Board of the City of Huntsville, Alabama, as lessor, and CPVC, as lessee, with respect to the Real Property and certain Equipment of CPVC in Madison, Alabama as in effect on the date hereof; provided, that:

(i) the aggregate amount required to be paid by CPVC pursuant to such Lease Agreement shall not exceed the currently outstanding principal amount of the Huntsville Bonds as of the date hereof which is $7,500,000, less the aggregate amount of all repayments, repurchases or redemptions, whether optional or mandatory in respect thereof, plus interest thereon at the rate provided for in the Huntsville Bonds as in effect on the date hereof,

(ii) such indebtedness is not secured by any assets or properties of any Borrower or Guarantor; provided, that, the rights of CPVC to possession of the Real Property in Madison, Alabama and certain of the fixtures and equipment located thereon, which are leased by CPVC pursuant to such Lease Agreement are subject to the rights of the Huntsville Bondholder to take possession thereof under the terms of such Lease Agreement;

(iii) Borrowers and Guarantors shall not, directly or indirectly, make any payments in respect of such indebtedness, except, that, CPVC may make regularly scheduled payments of rent when due in accordance with the terms such Lease Agreement as in effect on the date hereof,

(iv) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change any terms of such indebtedness or any of the Huntsville Bond Agreements, except that CPVC may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such indebtedness other than

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pursuant to payments thereof, or to reduce the interest rate or any fees in connection therewith, or (B) redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and

(v) Borrowers and Guarantors shall furnish to Lender all notices, demands or other materials concerning such indebtedness either received by any Borrower or Guarantor or on its behalf, promptly after receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be;

(g) the contingent reimbursement obligations of Castings to First Union National Bank (as successor by merger to First Fidelity Bank, National Association) in respect of the Calhoun County Bond Letter of Credit and the Alabama State Bond Letter of Credit pursuant to the First Union Letter of Credit Documents (as in effect on the date hereof), provided, that, (i) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such indebtedness, the Letters of Credit, the First Union Reimbursement Agreement or any of the other First Union Letter of Credit Agreements, except as otherwise required by Lender pursuant to the letter agreement, dated of even date herewith, by and among Borrowers, Guarantors and Lender with respect to the execution and delivery by Castings of a mortgage in favor of Lender with respect to Real Property and Equipment of Castings located in Anniston, Alabama or (B) redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and (ii) Borrowers and Guarantors shall furnish to Lender all notices or demands in connection with such indebtedness, either received by any Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be;

(h) unsecured indebtedness of a Borrower to another Borrower or Guarantor pursuant to intercompany loans permitted under Section 9.10 hereof;

(i) unsecured indebtedness of Central to CSC Finance evidenced by the Demand Note, dated December 21, 1994, issued by Central payable to CSC Finance, provided, that,

(i) the principal amount of such indebtedness shall not exceed $11,750,000, less the aggregate amount of all repayments, repurchases or redemptions, whether optional or mandatory in respect thereof, plus interest thereon at the rate provided for in the Demand Note as in effect on the date hereof,

(ii) such indebtedness of Central is subject and subordinate in right of payment to the right of Lender to receive the prior final payment and satisfaction in full of all of the Obligations,

(iii) Central shall not, directly or indirectly, make, or be required to make, any payments in respect of such indebtedness, except, that, Central may make payments of principal or interest when due in accordance with

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the terms of the Demand Note as in effect on the date hereof, provided, that, each of the following conditions is satisfied as determined by Lender: (A) as of the date of any such payment and after giving effect thereto, the Excess Availability of Borrowers for each of the immediately preceding thirty (30) consecutive days shall have been not less than $2,500,000, (B) as of the date of any such payment and after giving effect thereto, the Excess Availability of Borrowers shall be not less than $2,500,000, (C) the Consolidated Net Income of Central in the fiscal quarter ending immediately prior to the date of any such payment shall be not less than $500,000, (D) as of the date of any such payment and after giving effect thereto, no Event of Default or act, condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred and (E) in no event shall the aggregate amount of all such payments in any fiscal year of Central, together with the aggregate amount of all payments by Central to CSC Finance in respect of royalties or otherwise under the Trademark License Agreement between Central and CSC Finance in such fiscal year, exceed $2,000,000 in the aggregate;

(iv) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change any terms of such indebtedness or any agreement, document or instrument related thereto, except that Central may, after prior written notice to Lender, amend, modify, alter or change the terms thereof so as to extend the maturity thereof or defer the timing of any payments in respect thereof, or to forgive or cancel any portion of such indebtedness other than pursuant to payments thereof, or (B) redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and

(v) Borrowers and Guarantors shall furnish to Lender all notices, demands or other materials concerning such indebtedness either received by any of them or on its or their behalf, promptly after receipt thereof, or sent by any of them or on its or their behalf, concurrently with the sending thereof, as the case may be;

(j) indebtedness of Borrowers under interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate exchange agreements and similar contractual arrangements entered into for the purpose of protecting a Person against fluctuations in interest rates; provided, that, (i) such arrangements are with banks or other financial institutions that have combined capital and surplus and undivided profits of not less than $100,000,000 and are not for speculative purposes and (ii) such indebtedness shall be unsecured, except that such indebtedness of Castings to First Union arising pursuant to the Swap Agreement as in effect on the date hereof may be secured to the extent permitted under Section 9.8(h) above;

(k) unsecured indebtedness of any Borrower or Guarantor for borrowed money arising after the date hereof; provided, that, as to each and all of such indebtedness: (i) such indebtedness shall be included in the next monthly report to be delivered to Lender pursuant to Section 9.6(f) after the date such indebtedness is incurred, (ii) upon Lender's request, Lender shall have received true, correct and complete copies of all agreements, documents and instruments

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evidencing or otherwise related to such indebtedness, as duly authorized, executed and delivered by the parties thereto, (iii) such indebtedness shall be incurred by such Borrower or Guarantor at commercially reasonable rates and terms in a bona fide arms' length transaction, (iv) such indebtedness shall not at any time include terms and conditions which in any manner adversely affect Lender or any rights of Lender as determined in good faith by Lender and confirmed by Lender to Central in writing or which are more restrictive or burdensome than the terms or conditions of any other indebtedness of such Borrower or Guarantor as in effect on the date hereof (other than the Obligations), (v) as of the date such indebtedness is incurred and after giving effect thereto, no Event of Default or act, condition or event which with notice or passage of time or both would constitute an Event of Default shall exist or have occurred, (vi) the aggregate amount of such indebtedness shall not exceed $6,000,000, (vii) such indebtedness is at all times unsecured, and (viii) Borrowers and Guarantors shall furnish to Lender all notices or demands in connection with such indebtedness either received by any Borrower and Guarantor or on its behalf promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be; and

(l) the indebtedness set forth on Schedule 9.9 hereof; provided, that,
(i) Borrowers and Guarantors may only make regularly scheduled payments of principal and interest in respect of such indebtedness in accordance with the terms of the agreement or instrument evidencing or giving rise to such indebtedness as in effect on the date hereof, (ii) Borrowers and Guarantors shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such indebtedness or any agreement, document or instrument related thereto as in effect on the date hereof, or (B) redeem, retire, defease, purchase or otherwise acquire such indebtedness, or set aside or otherwise deposit or invest any sums for such purpose, and (iii) Borrowers shall furnish to Lender all notices or demands in connection with such indebtedness either received by any Borrower or Guarantor or on its or their behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its or their behalf, concurrently with the sending thereof, as the case may be.

9.10 Loans, Investments, Guarantees, Etc. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or indirectly, make any loans or advance money or property to any person, or invest in (by capital contribution, dividend or otherwise) or purchase or repurchase the stock or indebtedness or all or a substantial part of the assets or property of any person, or guarantee, assume, endorse, or otherwise become responsible for (directly or indirectly) the indebtedness, performance, obligations or dividends of any Person or agree to do any of the foregoing, except:

(a) the endorsement of instruments for collection or deposit in the ordinary course of business;

(b) investments in Cash Equivalents, provided, that, as to any of the foregoing, unless waived in writing by Lender, each Borrower and Guarantor shall take such actions as are deemed necessary by Lender to perfect the security interest of Lender in such investments;

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(c) loans or capital contributions by a Borrower or Guarantor to another Borrower after the date hereof; provided, that, as to any such loans or capital contributions, (i) as of the date of any such loan or capital contribution and after giving effect thereto, no Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred and be continuing and (ii) in the case of loans, the indebtedness of a Borrower arising pursuant to such loans by another Borrower or Guarantor shall not be evidenced by any promissory note or other instrument, unless the original of such note is promptly delivered to Lender upon the issuance thereof, duly indorsed and assigned to Lender by the Borrower or Guarantor who has made such loan;

(d) loans or advances by a Borrower or Guarantor to any of its employees, after the date hereof, not to exceed the principal amount of $500,000 in the aggregate at any time outstanding in the ordinary course of such Borrower's or Guarantor's business for reasonable and necessary work-related travel and other ordinary business expenses to be incurred by such employees in connection with their employment with such Borrower or Guarantor; provided, that, (i) the indebtedness of any such employee to such Borrower or Guarantor arising pursuant to such loan is not, and shall not be, evidenced by any promissory note or other instrument, unless the original of such note or instrument is promptly delivered to Lender upon the issuance thereof, duly indorsed and assigned by such Borrower or Guarantor to Lender, and (ii) as of the date of any such loan and after giving effect thereto, no Event of Default shall exist or have occurred;

(e) the loan by CSC Finance to Central in the amount of $11,750,000 giving rise to the indebtedness permitted under Section 9.9(i) hereof;

(f) the guarantees by CSC and Central in favor of First Union National Bank of the reimbursement obligations of Castings under the First Union Letter of Credit Documents permitted under Section 9.9 hereof as set forth in the Guaranty and Suretyship Agreements, dated as of November 1, 1995, by each of CSC and Central in favor of First Union National Bank as in effect on the date hereof, provided, that, as to such guarantees, (i) such Borrower and Guarantor shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such guarantees or any agreement, document or instrument related thereto, or (B) redeem, retire, defease, purchase or otherwise acquire the obligations arising pursuant to such guarantees, or set aside or otherwise deposit or invest any sums for such purpose, and (ii) Borrowers and Guarantors shall furnish to Lender all notices or demands in connection with such loans, advances or guarantees or other indebtedness subject to such guarantees either received by any Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be;

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(g) the guarantees by CSC, Central, Castings and CPVC in favor of Huntsville Bondholder of the obligations of the Industrial Development Board of the City of Huntsville, Alabama evidenced by the Huntsville Bonds and the obligations of CPVC pursuant to the Lease Agreement, dated as of December 1, 1997, between the Industrial Development Board of the City of Huntsville, as lessor, and CPVC, as lessee, with respect to the Real Property and certain Equipment of CPVC located in Madison, Alabama as set forth in the Guaranty Agreement, dated as of December 1, 1997, by CSC, Central, Castings and CPVC in favor of the Huntsville Bondholder as in effect on the date hereof, provided, that, as to such guarantees, (i) Borrowers and such Guarantor shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such guarantees or any agreement, document or instrument related thereto, or (B) redeem, retire, defease, purchase or otherwise acquire the obligations arising pursuant to such guarantees, or set aside or otherwise deposit or invest any sums for such purpose, and (ii) Borrowers and Guarantors shall furnish to Lender all notices or demands in connection with such loans, advances or guarantees or other indebtedness subject to such guarantees either received by any Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be; and

(h) the loans, advances and guarantees set forth on Schedule 9.10 hereto; provided, that, as to such loans, advances and guarantees, (i) such Borrower or Guarantor shall not, directly or indirectly, (A) amend, modify, alter or change the terms of such loans, advances or guarantees or any agreement, document or instrument related thereto, or (B) as to such guarantees, redeem, retire, defease, purchase or otherwise acquire the obligations arising pursuant to such guarantees, or set aside or otherwise deposit or invest any sums for such purpose, and (ii) Borrowers and Guarantors shall furnish to Lender all notices or demands in connection with such loans, advances or guarantees or other indebtedness subject to such guarantees either received by any Borrower or Guarantor or on its behalf, promptly after the receipt thereof, or sent by any Borrower or Guarantor or on its behalf, concurrently with the sending thereof, as the case may be.

9.11 Dividends and Redemptions. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or indirectly, declare or pay any dividends on account of any class of Capital Stock of such Borrower, Guarantor or Subsidiary now or hereafter outstanding, or set aside or otherwise deposit or invest any sums for such purpose, or redeem, retire, defease, purchase or otherwise acquire any shares of any class of Capital Stock (or set aside or otherwise deposit or invest any sums for such purpose) for any consideration other than common stock or apply or set apart any sum, or make any other distribution (by reduction of capital or otherwise) in respect of any such shares or agree to do any of the foregoing, except that any Subsidiary of a Borrower may declare and pay dividends to such Borrower.

9.12 Transactions with Affiliates. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or indirectly,

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(a) purchase, acquire or lease any property from, or sell, transfer or lease any property to, any officer, director, agent or other person affiliated with any Borrower or Guarantor, except (i) in the ordinary course of and pursuant to the reasonable requirements of such Borrower's or Guarantor's business and upon fair and reasonable terms no less favorable to such Borrower or Guarantor than such Borrower or Guarantor would obtain in a comparable arm's length transaction with an unaffiliated person and (ii) the payments by Central to CSC Finance of royalties for the licensing of certain trademarks by CSC Finance to Central and its Subsidiaries, provided, that, Central shall not make and shall not be required to make any such payments, unless each of following conditions is satisfied as determined by Lender: (A) as of the date of any such payment and after giving effect thereto, the Excess Availability of Borrowers for each of the immediately preceding thirty (30) consecutive days shall have been not less than $2,500,000, (B) as of the date of any such payment and after giving effect thereto, the Excess Availability of Borrowers shall be not less than $2,500,000, (C) as of the date of any such payment and after giving effect thereto, no Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default, shall exist or have occurred, (D) the Consolidated Net Income of Central in the fiscal quarter ending immediately prior to the date of any such payment shall be not less than $500,000, and (E) in no event shall the aggregate amount of all such payments in any fiscal year of Central, together with the aggregate amount of all payments by Central to CSC Finance in respect of royalties or otherwise under the Trademark License Agreement between Central and CSC Finance in such fiscal year, exceed $2,000,000 in the aggregate;

(b) make any payments of management, consulting or other fees for management or similar services, any payments of sales commissions or other fees for marketing goods or services, any payments of taxes under any tax sharing arrangements or any payments of any indebtedness owing to any other Borrower, Guarantor, officer, employee, shareholder, director or other person affiliated with any Borrower or Guarantor except (i) reasonable compensation to officers, employees and directors for services rendered to Borrowers and Guarantors in the ordinary course of business, (ii) payments by any Borrower to the other Borrowers with respect to intercompany loans permitted hereunder, (iii) payments by Central to CSC Finance in respect of indebtedness of Central to CSC Finance permitted under Section 9.9(i) hereof, to the extent such payments are permitted under such Section, (iv) payment of management fees by Borrowers to CSC not to exceed $500,000 in any fiscal year, provided, that, no payment thereof shall be made at any time an Event of Default or act, condition or event which with notice or passage of time or both would constitute an Event of Default shall exist or have occurred, (v) payments by Borrowers and Guarantors to each other or to CSC for actual and necessary reasonable out-of-pocket administrative and operating expenses of CSC for the businesses of Borrowers and Guarantors as presently conducted in the ordinary course of business, and for actual and necessary reasonable out-of-pocket legal and accounting, insurance, marketing, payroll and similar types of services paid for by CSC on behalf of Borrowers in the ordinary course of their respective businesses or as the same may be directly attributable to Borrowers; provided, that, (A) CSC shall not conduct any business except to hold the Capital Stock of Central, CSC Finance and Spraysafe Automatic Sprinklers Limited and any activities incidental thereto or to participate in the management of the businesses of Borrowers consistent with

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current practices as of the date hereof and (B) CSC shall not own or hold any assets or properties, except for the Capital Stock of Central, CSC Finance and Spraysafe Automatic Sprinklers Limited that it owns and holds as of the date hereof and other assets necessary to the conduct of its business as described above, (vi) payments by Borrowers to CSC pursuant to the tax sharing arrangements among Borrowers and CSC (as in effect on the date hereof); provided, that, (A) such Borrower is included in the consolidated Federal income tax return filed by CSC as to which such Borrower is making such payments, (B) the payments in any year shall not exceed the Federal income tax liability that such Borrower would have been liable for if such Borrower were not part of such consolidated federal income tax return filed by CSC, (C) such payments shall be made by such Borrower no earlier than ten (10) days prior to the date on which CSC is required to make its payments to the Internal Revenue Service, and (D) in the event that such Borrower also joins with CSC in filing any combined or consolidated (or similar) State or local income tax returns, then the making of payments to CSC shall be allowed in a manner as similar as possible to that provided herein with respect to Federal income taxes.

9.13 Additional Bank Accounts. Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, directly or indirectly, open, establish or maintain any deposit account, investment account or any other account with any bank or other financial institution, other than the Blocked Accounts and the accounts set forth in Schedule 8.8 hereto, except: (a) as to any new or additional Blocked Accounts and other such new or additional accounts which contain any Collateral or proceeds thereof, with the prior written consent of Lender and subject to such conditions thereto as Lender may establish and (b) as to any accounts used by such Borrower, Guarantor or Subsidiary to make payments of payroll, taxes or other obligations to third parties, after prior written notice to Lender and (c) any trust account established at a bank acceptable to Lender in connection with the settlement of the CPSC Action, after prior written notice to Lender.

9.14 Compliance with ERISA.

(a) Each Borrower and Guarantor shall not, and shall not permit any Subsidiary to, with respect to any "employee benefit plans" maintained by such Borrower or Guarantor or any of its ERISA Affiliates: (i) terminate any of such employee benefit plans so as to incur any liability to the Pension Benefit Guaranty Corporation established pursuant to ERISA, (ii) allow or suffer to exist any prohibited transaction involving any of such employee benefit plans or any trust created thereunder which would subject such Borrower or Guarantor or such ERISA Affiliate to a tax or penalty or other liability on prohibited transactions imposed under Section 4975 of the Code or ERISA, (iii) fail to pay to any such employee benefit plan any contribution which it is obligated to pay under Section 302 of ERISA, Section 412 of the Code or the terms of such plan,
(iv) allow or suffer to exist any accumulated funding deficiency, whether or not waived, with respect to any such employee benefit plan, (v) allow or suffer to exist any occurrence of a reportable event or any other event or condition which presents a material risk of termination by the Pension Benefit Guaranty Corporation of any such employee benefit plan that is a single employer plan,

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which termination could result in any liability to the Pension Benefit Guaranty Corporation or (vi) incur any withdrawal liability with respect to any multiemployer pension plan.

(b) As used in this Section 9.14, the terms "employee benefit plans", "accumulated funding deficiency" and "reportable event" shall have the respective meanings assigned to them in ERISA, and the term "prohibited transaction" shall have the meaning assigned to it in Section 4975 of the Code and ERISA.

9.15 Adjusted Tangible Net Worth. The Adjusted Tangible Net Worth of CSC and its Subsidiaries shall be not less than the amount set forth below at all times during the period indicated:

                       Period                                   Amount
                       ------                                   ------

(i)      From the date hereof through                        $24,000,000
         and including January 31, 1999

(ii)     From February 1, 1999 through                       $26,000,000
         and including October 31, 1999

(iii)    From November 1, 1999 through                       $28,000,000
         and including April 30, 2000

(iv)     From May 1, 2000 through and                        $30,000,000
         including October 31, 2000

(v)      From November 1, 2000 and at                        $32,000,000
         all times thereafter

9.16 Remarketing of Huntsville Bonds. CPVC shall enter into a legally binding written commitment with a person who is not an Affiliate to purchase the Huntsville Bonds on or before November 15, 1998 and the closing of such purchase and sale of the Huntsville Bonds shall occur by no later than December 31, 1998, which commitment and sale shall in each case be on terms and conditions acceptable to Lender.

9.17 Costs and Expenses. Borrowers and Guarantors shall pay to Lender on demand all reasonable costs, expenses, filing fees and taxes paid or payable in connection with the preparation, negotiation, execution, delivery, recording, administration, collection, liquidation, enforcement and defense of the Obligations, Lender's rights in the Collateral, this Agreement, the other Financing Agreements and all other documents related hereto or thereto, including any amendments, supplements or consents which may hereafter be contemplated (whether or not executed) or entered into in respect hereof and thereof, including, but not limited to: (a) all costs and expenses of filing or recording (including Uniform Commercial Code financing statement filing taxes and fees, documentary taxes, intangibles taxes and mortgage recording taxes and fees, if applicable); (b) all title insurance and other insurance premiums, appraisal fees and search fees; (c) costs and expenses of remitting loan proceeds, collecting checks and other items of payment, and establishing and

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maintaining the Blocked Accounts, together with Lender's customary charges and fees with respect thereto; (d) charges, fees or expenses charged by any bank or issuer in connection with the Letter of Credit Accommodations and the Supplemental Letter of Credit Accommodations; (e) costs and expenses of preserving and protecting the Collateral; (f) costs and expenses paid or incurred in connection with obtaining payment of the Obligations, enforcing the security interests and liens of Lender, selling or otherwise realizing upon the Collateral, and otherwise enforcing the provisions of this Agreement and the other Financing Agreements or defending any claims made or threatened against Lender arising out of the transactions contemplated hereby and thereby (including, without limitation, preparations for and consultations concerning any such matters); (g) all out-of-pocket expenses and costs heretofore and from time to time hereafter incurred by Lender during the course of periodic field examinations of the Collateral and the operations of Borrowers and Guarantors, plus a per diem charge at the rate of $650 per person per day for Lender's examiners in the field and office, provided, that, the maximum amount payable by Borrowers in respect of such per diem charge in any calendar year shall not exceed $25,000, so long as no act, condition or event which with notice or passage of time or both would constitute an Event of Default shall exist or have occurred in any such calendar year; and (g) the reasonable fees and disbursements of counsel (including legal assistants) to Lender and any Participant in connection with any of the foregoing.

9.18 After Acquired Real Property. If any Borrower hereafter acquires any Real Property, fixtures or any other property that is of the kind or nature described in the Mortgages and such Real Property, fixtures or other property at any one location has a fair market value in an amount equal to or greater than $500,000 (or if an Event of Default, or act, condition or event which with notice or passage of time or both would constitute an Event of Default exists, then regardless of the fair market value of such assets), without limiting any other rights of Lender, or duties or obligations of such Borrower, upon Lender's request, such Borrower shall execute and deliver to Lender a mortgage, deed of trust or deed to secure debt, as Lender may determine, in form and substance substantially similar to the Mortgages and as to any provisions relating to specific state laws satisfactory to Lender and in form appropriate for recording in the real estate records of the jurisdiction in which such Real Property or other property is located granting to Lender a first priority lien and mortgage on and security interest in such Real Property, fixtures or other property (subject only to such liens and encumbrances as such Borrower would otherwise be permitted to incur hereunder or under the Mortgages or as otherwise consented to in writing by Lender) and such other agreements, documents and instruments as Lender may require in connection therewith.

9.19 Further Assurances. At the request of Lender at any time and from time to time, each Borrower and Guarantor shall, at its expense, duly execute and deliver, or cause to be duly executed and delivered, such further agreements, documents and instruments, and do or cause to be done such further acts as may be reasonably necessary to evidence, perfect, maintain and enforce the security interests and the priority thereof in the Collateral and to otherwise effectuate the provisions or purposes of this Agreement or any of the other Financing Agreements. Lender may at any time and from time to time request a certificate from an officer of Borrowers representing that all conditions

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precedent to the making of Loans and providing Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations contained herein are satisfied. In the event of such request by Lender, Lender may, at its option, cease to make any further Loans or provide further Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations until Lender has received such certificate and, in addition, Lender has determined that such conditions are satisfied. Where permitted by law, each Borrower and Guarantor hereby authorizes Lender to execute and file one or more UCC financing statements signed only by Lender.

SECTION 10. EVENTS OF DEFAULT AND REMEDIES

10.1 Events of Default. The occurrence or existence of any one or more of the following events are referred to herein individually as an "Event of Default", and collectively as "Events of Default":

(a) (i) any Borrower or Guarantor fails to pay any of the Obligations within three (3) days after the same becomes due and payable or (ii) any Borrower or Guarantor fails to perform any of the covenants contained in Sections 9.1, 9.2, 9.3, 9.4, 9.6, 9.13, 9.14, 9.15, or 9.16 of this Agreement and such failure shall continue for ten (10) days; provided, that, such ten (10) day period shall not apply in the case of: (A) any failure to observe any such covenant which is not capable of being cured at all or within such ten (10) day period or which has been the subject of a prior failure within a six (6) month period or (B) an intentional breach of any Borrower or Guarantor of any such covenant or (iii) any Borrower or Guarantor fails to perform any of the terms, covenants, conditions or provisions contained in this Agreement or any of the other Financing Agreements other than those described in Sections 10.1(a)(i) and 10.1(a)(ii) above;

(b) any representation, warranty or statement of fact made by any Borrower to Lender in this Agreement, the other Financing Agreements or any other agreement, schedule, confirmatory assignment or otherwise shall when made or deemed made be false or misleading in any material respect;

(c) any Guarantor revokes, terminates or fails to perform any of the terms, covenants, conditions or provisions of any guarantee, endorsement or other agreement of such party in favor of Lender;

(d) any judgment for the payment of money is rendered against any Borrower or Guarantor in excess of $500,000 in any one case or in excess of $1,000,000 in the aggregate and shall remain undischarged or unvacated for a period in excess of thirty (30) days or execution shall at any time not be effectively stayed, or any judgment other than for the payment of money, or injunction, attachment, garnishment or execution is rendered against any Borrower or Guarantor or any of their assets;

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(e) any Borrower or Guarantor dissolves or suspends or discontinues doing business;

(f) any Borrower or Guarantor becomes insolvent (however defined or evidenced), makes an assignment for the benefit of creditors, makes or sends notice of a bulk transfer or calls a meeting of its creditors or principal creditors;

(g) a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at law or in equity) is filed against any Borrower or Guarantor or all or any part of its properties and such petition or application is not dismissed within sixty (60) days after the date of its filing or any Borrower or Guarantor shall file any answer admitting or not contesting such petition or application or indicates its consent to, acquiescence in or approval of, any such action or proceeding or the relief requested is granted sooner;

(h) a case or proceeding under the bankruptcy laws of the United States of America now or hereafter in effect or under any insolvency, reorganization, receivership, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction now or hereafter in effect (whether at a law or equity) is filed by any Borrower or Guarantor or for all or any part of its property; or

(i) any default by any Borrower or Guarantor under any agreement, document or instrument relating to any indebtedness for borrowed money owing to any person other than Lender, or any capitalized lease obligations, contingent indebtedness in connection with any guarantee, letter of credit, indemnity or similar type of instrument in favor of any person other than Lender, in any case in an amount in excess of $500,000 (including any of the Calhoun County Bond Agreements, the Alabama State Bond Agreements or the Huntsville Bond Agreements), which default continues for more than the applicable cure period, if any, with respect thereto, or any default by any Borrower or Guarantor under any contract, lease, license or other obligation to any person other than Lender, which default continues for more than the applicable cure period, if any, with respect thereto;

(j) any Change of Control;

(k) the indictment or threatened indictment of any Borrower or Guarantor under any criminal statute, or commencement or threatened commencement of criminal or civil proceedings against any Borrower or Guarantor, pursuant to which statute or proceedings the penalties or remedies sought or available include forfeiture of more than $500,000 of any of the property of such Borrower or Guarantor (provided, that, the foregoing shall not apply to any forfeiture of the existing Inventory of Central consisting of Omega TM fire sprinkler products);

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(l) there shall be a Material Adverse Effect after the date hereof; or

(m) there shall be an event of default under any of the other Financing Agreements.

10.2 Remedies.

(a) At any time an Event of Default exists or has occurred and is continuing, Lender shall have all rights and remedies provided in this Agreement, the other Financing Agreements, the Uniform Commercial Code and other applicable law, all of which rights and remedies may be exercised without notice to or consent by Borrowers or any Guarantors, except as such notice or consent is expressly provided for hereunder or required by applicable law. All rights, remedies and powers granted to Lender hereunder, under any of the other Financing Agreements, the Uniform Commercial Code or other applicable law, are cumulative, not exclusive and enforceable, in Lender's discretion, alternatively, successively, or concurrently on any one or more occasions, and shall include, without limitation, the right to apply to a court of equity for an injunction to restrain a breach or threatened breach by any Borrower or Guarantor of this Agreement or any of the other Financing Agreements. Lender may, at any time or times, proceed directly against any Borrowers or any Guarantor to collect the Obligations without prior recourse to the Collateral.

(b) Without limiting the foregoing, at any time an Event of Default exists or has occurred and is continuing, Lender may, in its discretion and without limitation, (i) accelerate the payment of all Obligations and demand immediate payment thereof to Lender (provided, that, upon the occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h), all Obligations shall automatically become immediately due and payable), (ii) with or without judicial process or the aid or assistance of others, enter upon any premises on or in which any of the Collateral may be located and take possession of the Collateral or complete processing, manufacturing and repair of all or any portion of the Collateral, (iii) require Borrowers, at Borrowers' expense, to assemble and make available to Lender any part or all of the Collateral at any place and time designated by Lender, (iv) collect, foreclose, receive, appropriate, setoff and realize upon any and all Collateral, (v) remove any or all of the Collateral from any premises on or in which the same may be located for the purpose of effecting the sale, foreclosure or other disposition thereof or for any other purpose, (vi) sell, lease, transfer, assign, deliver or otherwise dispose of any and all Collateral (including, without limitation, entering into contracts with respect thereto, public or private sales at any exchange, broker's board, at any office of Lender or elsewhere) at such prices or terms as Lender may deem reasonable, for cash, upon credit or for future delivery, with the Lender having the right to purchase the whole or any part of the Collateral at any such public sale, all of the foregoing being free from any right or equity of redemption of Borrowers, which right or equity of redemption is hereby expressly waived and released by Borrowers and/or (vii) terminate this Agreement. If any of the Collateral is sold or leased by Lender upon credit terms or for future delivery, the Obligations shall not be reduced as a result thereof until payment therefor is finally collected by Lender. If notice of disposition of Collateral is required by law, five (5) days prior notice by

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Lender to Borrowers and Guarantors designating the time and place of any public sale or the time after which any private sale or other intended disposition of Collateral is to be made, shall be deemed to be reasonable notice thereof and each Borrower waives any other notice. In the event Lender institutes an action to recover any Collateral or seeks recovery of any Collateral by way of prejudgment remedy, each Borrower and Guarantor waives the posting of any bond which might otherwise be required.

(c) Lender may apply the cash proceeds of Collateral actually received by Lender from any sale, lease, foreclosure or other disposition of the Collateral to payment of the Obligations, in whole or in part and in such order as Lender may elect, whether or not then due. Each Borrower and Guarantor shall remain liable to Lender for the payment of any deficiency with interest at the highest rate provided for herein and all costs and expenses of collection or enforcement, including attorneys' fees and legal expenses.

(d) Without limiting the foregoing, upon the occurrence of an Event of Default, or an act, condition or event which, with notice or passage of time or both would constitute an Event of Default, Lender may, at its option, without notice, (i) cease making Loans or arranging for Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations or reduce the lending formulas or amounts of Revolving Loans and Letter of Credit Accommodations available to Borrowers and/or (ii) terminate any provision of this Agreement providing for any future Loans, Letter of Credit Accommodations or Supplemental Letter of Credit Accommodations to be made by Lender to Borrowers.

SECTION 11. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

11.1 Confession of Judgment.

(a) Each Borrower and Guarantor, to the extent permitted by law, and without the further consent of or notice to any Borrower or Guarantor, hereby irrevocably and unconditionally authorizes the Prothonotary, Clerk of Court, or any attorney of any court of record in the Commonwealth of Pennsylvania, or any other jurisdiction, as attorney for such Borrower or Guarantor to appear for such Borrower or Guarantor in such court and confess judgment against such Borrower or Guarantor and in favor of Lender, at any time on or after an Event of Default exists or has occurred, for all or any portion of the Obligations (including, but not limited to, principal, interest, fees, reasonable costs and expenses and including attorneys' fees and legal expenses not to exceed five (5%) percent of the outstanding and unpaid Obligations), for which this Agreement or a verified copy hereof shall be sufficient warrant. The authority to enter judgment shall not be exhausted by one exercise hereof, but, to the extent permitted by law, shall continue from time to time until final payment and satisfaction in full of all of the Obligations. The foregoing right and remedy is in addition to and not in lieu of any other right or remedy available to Lender under this Agreement, the other Financing Agreements, applicable law or otherwise.

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(b) Each Borrower and Guarantor, being fully aware of its right to notice and a hearing concerning the validity of any and all claims that may be asserted against such Borrower or Guarantor by Lender before a judgment can be entered hereunder or before execution may be levied on such judgment against any and all property of such Borrower or Guarantor, hereby waives each of these rights and agrees and consents to judgment being entered by confession in accordance with the terms hereof and execution being levied on such judgment against any and all property of such Borrower or Guarantor, in each case without first giving notice and the opportunity to be heard on the validity of the claim or claims upon which such judgment is entered.

11.2 Governing Law; Choice of Forum; Service of Process; Jury Trial Waiver.

(a) The validity, interpretation and enforcement of this Agreement and the other Financing Agreements (other than the Mortgages to the extent provided therein) and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York (without giving effect to principles of conflicts of law).

(b) Borrowers, Guarantors and Lender irrevocably consent and submit to the non-exclusive jurisdiction of the Supreme Court of the State of New York in New York County and the United States District Court for the Southern District of New York and waive any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Agreement or any of the other Financing Agreements or in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Agreement or any of the other Financing Agreements or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agree that any dispute with respect to any such matters shall be heard only in the courts described above (except that Lender shall have the right to bring any action or proceeding against any Borrower or Guarantor or its property in the courts of any other jurisdiction which Lender deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against any Borrower or Guarantor or its property).

(c) Each Borrower and Guarantor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth on the signature pages hereof and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mails, or, at Lender's option, by service upon any Borrower or Guarantor in any other manner provided under the rules of any such courts. Within thirty (30) days after such service, such Borrower or Guarantor shall appear and respond to such process, failing which such Borrower shall be deemed in default and judgment may be entered by Lender against such Borrower or Guarantor for the amount of the claim and other relief requested.

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(d) BORROWERS, GUARANTORS AND LENDER EACH HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO IN RESPECT OF THIS AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. BORROWERS, GUARANTORS AND LENDER EACH HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT BORROWERS, GUARANTORS OR LENDER MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(e) Lender shall not have any liability to Borrowers or Guarantors (whether in tort, contract, equity or otherwise) for losses suffered by Borrowers or Guarantors in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a final and non-appealable judgment or court order binding on Lender, that the losses were the result of acts or omissions constituting gross negligence or willful misconduct. In any such litigation, Lender shall be entitled to the benefit of the rebuttable presumption that it acted in good faith and with the exercise of ordinary care in the performance by it of the terms of this Agreement.

11.3 Waiver of Notices. Each Borrower or Guarantor hereby expressly waives demand, presentment, protest and notice of protest and notice of dishonor with respect to any and all instruments and commercial paper, included in or evidencing any of the Obligations or the Collateral, and any and all other demands and notices, of any kind or nature whatsoever with respect to the Obligations, the Collateral and this Agreement, except such as are expressly provided for herein. No notice to or demand on any Borrower or Guarantor which Lender may elect to give shall entitle Borrowers or Guarantor to any other or further notice or demand in the same, similar or other circumstances.

11.4 Amendments and Waivers. Neither this Agreement nor any provision hereof shall be amended, modified, waived or discharged orally or by course of conduct, but only by a written agreement signed by an authorized officer of Lender, and as to amendments, as also signed by an authorized officer of Borrowers. Lender shall not, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of its rights, powers and/or remedies unless such waiver shall be in writing and signed by an authorized officer of

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Lender. Any such waiver shall be enforceable only to the extent specifically set forth therein. A waiver by Lender of any right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedy which Lender would otherwise have on any future occasion, whether similar in kind or otherwise. Any waiver in writing signed by a duly authorized officer of Lender of an Event of Default arising under this Agreement or any of the other Financing Agreements shall constitute a waiver of the same Event of Default under any of the other Financing Agreements.

11.5 Waiver of Counterclaims. Each Borrower and Guarantor waives all rights to interpose any claims, deductions, setoffs or counterclaims of any nature (other than compulsory counterclaims) in any action or proceeding with respect to this Agreement, the Obligations, the Collateral or any matter arising therefrom or relating hereto or thereto.

11.6 Indemnification. Each Borrower and Guarantor shall indemnify and hold Lender, and its directors, agents, employees and counsel, harmless from and against any and all losses, claims, damages, liabilities, costs or expenses imposed on, incurred by or asserted against any of them in connection with any litigation, investigation, claim or proceeding commenced or threatened related to the negotiation, preparation, execution, delivery, enforcement, performance or administration of this Agreement, any other Financing Agreements, or any undertaking or proceeding related to any of the transactions contemplated hereby or any act, omission, event or transaction related or attendant thereto, including, without limitation, amounts paid in settlement, court costs, and the reasonable fees and expenses of counsel except for any losses, claims, damages, liabilities, costs or expenses resulting from Lender's gross negligence or willful misconduct as determined pursuant to a final non-appealable order of a court of competent jurisdiction. To the extent that the undertaking to indemnify, pay and hold harmless set forth in this Section may be unenforceable because it violates any law or public policy, Borrowers and Guarantors shall pay the maximum portion which it is permitted to pay under applicable law to Lender in satisfaction of indemnified matters under this Section 11.6. The foregoing indemnity shall survive the payment of the Obligations and the termination or non-renewal of this Agreement.

SECTION 12. TERM OF AGREEMENT; MISCELLANEOUS

12.1 Term.

(a) This Agreement and the other Financing Agreements shall become effective as of the date set forth on the first page hereof and shall continue in full force and effect for a term ending on March 31, 2001 (the "Renewal Date"), and from year to year thereafter, unless sooner terminated pursuant to the terms hereof; provided, that, this Agreement and all other Financing Agreements must be terminated simultaneously. Upon the effective date of termination or non-renewal of the Financing Agreements, Borrowers shall pay to Lender, in full, all outstanding and unpaid Obligations and shall furnish cash collateral to Lender, in such amounts as Lender determines are reasonably necessary to secure Lender from loss, cost, damage or expense, including

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reasonable attorneys' fees and legal expenses, in connection with any contingent Obligations, including issued and outstanding Letter of Credit Accommodations and Supplemental Letter of Credit Accommodations and checks or other payments provisionally credited to the Obligations and/or as to which Lender has not yet received final and indefeasible payment. Such payments in respect of the Obligations and cash collateral shall be remitted by wire transfer in Federal funds to such bank account of Lender, may, in its discretion, designate in writing to Central for such purpose. Interest shall be due until and including the next business day, if the amounts so paid by Borrowers to the bank account designated by Lender are received in such bank account later than 1:00 p.m., New York City time.

(b) No termination of this Agreement or the other Financing Agreements shall relieve or discharge any Borrower or Guarantor of its respective duties, obligations and covenants under this Agreement or the other Financing Agreements until all Obligations have been fully and finally discharged and paid, and the continuing security interest of Lender in the Collateral and the rights and remedies of Lender hereunder, under the other Financing Agreements and applicable law, shall remain in effect until all such Obligations have been fully and finally discharged and paid. Upon the receipt by Lender of payment in full in cash or other immediately available funds of all of the Obligations (which are not contingent) and cash collateral in such amounts and on such terms as Lender shall deem reasonably acceptable for all contingent Obligations, upon Central's request and at the expense of Borrowers, except as otherwise required by applicable law, Lender shall execute and deliver to Central UCC-3 termination statements and such other release documents with respect to the Collateral as may be reasonably requested by Central, in form and substance satisfactory to Lender, to effectuate the termination of the security interests granted by Borrowers to Lender herein and in the other Financing Agreements.

(c) In the event this Agreement is terminated prior to the end of the then current term or renewal term of this Agreement for any reason, in view of the impracticality and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of Lender's lost profits as a result thereof, Borrowers agree to pay to Lender upon the effective date of such termination, an early termination fee in the amount set forth below if such termination is effective in the period indicated:

            Amount                                   Period
            ------                                   ------

 (i)  2% of the Maximum Credit          From the date hereof to and
                                        including March 31, 2000.

(ii)  1% of the Maximum Credit          From April 1, 2000 to and
                                        including March 30, 2001.

Such early termination fee shall be presumed to be the amount of damages sustained by Lender as a result of such early termination and each Borrower and Guarantor agrees that it is reasonable under the circumstances currently

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existing. In addition, Lender shall be entitled to such early termination fee upon the occurrence of any Event of Default described in Sections 10.1(g) and 10.1(h) hereof, even if Lender does not exercise its right to terminate this Agreement, but elects, at its option, to provide financing to any Borrower or permit the use of cash collateral under the United States Bankruptcy Code. The early termination fee provided for in this Section 12.1 shall be deemed included in the Obligations.

(d) Notwithstanding anything to the contrary contained in Section 12.1(c) above, in the event of the termination of this Agreement by Borrowers prior to the end of the then current term or renewal term of this Agreement and the full and final repayment of all of the Obligations and the receipt by Lender of cash collateral all as provided in Section 12.1(c) with the proceeds of initial loans and advances by First Union National Bank to Borrowers pursuant to a revolving credit facility provided by First Union National Bank to Borrowers to replace the financing arrangements provided for herein, and as to which Lender shall not be acting on behalf of First Union National Bank, Borrowers shall not be required to pay the early termination fee provided for above.

(e) Notwithstanding anything to the contrary contained in Section 12.1(c) above, in the event of the termination of this Agreement by Borrowers prior to the end of the then current term or renewal term of this Agreement and the full and final repayment of all of the Obligations and the receipt by Lender of cash collateral all as provided in Section 12.1(a), if such termination and payments occur within thirty (30) days after the effective date of the sale of all or substantially all of the assets and properties of Lender to a person who is not an affiliate of Lender, First Union National Bank or First Union Corporation and no Event of Default shall exist or have occurred, Borrowers shall not be required to pay the early termination fee provided for above.

12.2 Notices. All notices, requests and demands hereunder shall be in writing and (a) made to Lender at its address set forth below and to Borrowers and Guarantors at their chief executive office of Central set forth below or to such other address as either party may designate by written notice to the other in accordance with this provision, and (b) deemed to have been given or made: if delivered in person, immediately upon delivery; if by facsimile transmission, immediately after sending and upon confirmation of receipt by facsimile transmission from the addressee; if by nationally recognized overnight courier service with instructions to deliver the next Business Day, one (1) Business Day after sending; and if by certified mail, return receipt requested, five (5) days after mailing.

12.3 Partial Invalidity. If any provision of this Agreement is held to be invalid or unenforceable, such invalidity or unenforceability shall not invalidate this Agreement as a whole, but this Agreement shall be construed as though it did not contain the particular provision held to be invalid or unenforceable and the rights and obligations of the parties shall be construed and enforced only to such extent as shall be permitted by applicable law.

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12.4 Successors. This Agreement, the other Financing Agreements and any other document referred to herein or therein shall be binding upon and inure to the benefit of and be enforceable by Lender, Borrowers, Guarantors and their respective successors and assigns, except that Borrowers and Guarantors may not assign their rights under this Agreement, the other Financing Agreements and any other document referred to herein or therein without the prior written consent of Lender. Lender may, after notice to any Borrower, assign its rights and delegate its obligations under this Agreement and the other Financing Agreements and further may assign, or sell participations in, all or any part of the Loans, the Letter of Credit Accommodations or any other interest herein, in which event, the assignee or Participant shall have, to the extent of such assignment or participation, the same rights and benefits as it would have if it were the Lender hereunder, except as otherwise provided by the terms of such assignment or participation.

12.5 Participant's Security Interest. If a Participant shall at any time participate with Lender in the Loans or other Obligations, each Borrower and Guarantor hereby grants to such Participant and such Participant shall have and is hereby given, a continuing lien on and security interest in any money, securities and other property of such Borrower in the custody or possession of the Participant, including the right of setoff, to the extent of the Participant's participation in the Obligations, and such Participant shall be deemed to have the same right of setoff to the extent of its participation in the Obligations, as it would have if it were a direct lender.

12.6 Entire Agreement. This Agreement, the other Financing Agreements, any supplements hereto or thereto, and any instruments or documents delivered or to be delivered in connection herewith or therewith represent the entire agreement and understanding concerning the subject matter hereof and thereof between the parties hereto, and supersede all other prior agreements, understandings, negotiations and discussions, representations, warranties, commitments, proposals, offers and contracts concerning the subject matter hereof, whether oral or written. In the event of any inconsistency between the terms of this Agreement and any schedule or exhibit hereto, the terms of this Agreement shall govern.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, Lender, Borrowers and Guarantors have caused these presents to be duly executed as of the day and year first above written.

LENDER                                           BORROWERS

CONGRESS FINANCIAL CORPORATION                   CENTRAL SPRINKLER COMPANY

By:   /s/ Josephone Naws                         By: /s/ Albert T. Sobol
   ------------------------------------             ----------------------------

Title: FVP                                       Title: Executive Vice President
      ---------------------------------                 ------------------------

Address:                                         Chief Executive Office:
--------                                         -----------------------

1133 Avenue of the Americas                      451 North Cannon Avenue
New York, New York  10036                        Lansdale, Pennsylvania 19446

                                                 CENTRAL CASTINGS CORPORATION

                                                 By: /s/ Albert T. Sobol
                                                    ----------------------------

                                                 Title: Executive Vice President
                                                       -------------------------

                                                 Chief Executive Office:
                                                 -----------------------

                                                 2660 Old Gadsden Highway
                                                 Anniston, Alabama 36206

                                                 CENTRAL CPVC CORPORATION

                                                 By:  /s/ Albert T. Sobol
                                                    ----------------------------

                                                 Title: Executive Vice President
                                                       -------------------------

                                                 Chief Executive Office:
                                                 -----------------------

                                                 245 Swancott Road
                                                 Madison, Alabama 35750

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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[SIGNATURES CONTINUED FROM PRIOR PAGE]

CENTRAL SPRINKLER CORPORATION

By: /s/ Albert T. Sobol
   ----------------------------

Title: Executive Vice President
      -------------------------

Chief Executive Office:

451 North Cannon Avenue Lansdale, Pennsylvania 19446

CENTRAL SPRINKLER EXPORT
CORPORATION

By: /s/ Albert T. Sobol
   ----------------------------

Title: Executive Vice President
       -------------------------

Chief Executive Office:

451 North Cannon Avenue Lansdale, Pennsylvania 19446

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Exhibit 10(v)

TERM PROMISSORY NOTE

$12,600,000 New York, New York September 18, 1998

FOR VALUE RECEIVED, CENTRAL SPRINKLER COMPANY, a Pennsylvania corporation (the "Debtor"), hereby unconditionally promises to pay to the order of CONGRESS FINANCIAL CORPORATION, a Delaware corporation (the "Payee"), at the offices of Payee at 1133 Avenue of the Americas, New York, New York 10036, or at such other place as the Payee or any holder hereof may from time to time designate, the principal sum of TWELVE MILLION SIX HUNDRED THOUSAND DOLLARS ($12,600,000) in lawful money of the United States of America and in immediately available funds, in forty-eight (48) consecutive monthly installments (or earlier as hereinafter provided) on the first day of each month commencing October 1, 1998 of which each installment shall be in the amount of TWO HUNDRED SIXTY-TWO THOUSAND FIVE HUNDRED DOLLARS ($262,500).

Debtor hereby further promises to pay interest to the order of Payee on the unpaid principal balance hereof at the Interest Rate. Such interest shall be paid in like money at said office or place from the date hereof, commencing October 1, 1998 and on the first day of each month thereafter until the indebtedness evidenced by this Note is paid in full. Interest payable upon and after an Event of Default or termination or non-renewal of the Loan Agreement shall be payable upon demand.

For purposes hereof, (a) the term "Interest Rate" shall mean, as to Prime Rate Loans, a percentage rate per annum equal to that of the Prime Rate, and as to Eurodollar Rate Loans, a rate of one and three-quarters (1 3/4%) percent per annum in excess of the Adjusted Eurodollar Rate; provided, that, at Payee's option, the Interest Rate shall mean a rate of two (2%) percent per annum in excess of the Prime Rate as to Prime Rate Loans and a rate of three and three-quarters (3 3/4%) percent per annum in excess of the Adjusted Eurodollar Rate as to Eurodollar Rate Loans upon and after an Event of Default and during the continuation thereof and for so long as the same is continuing or termination or non-renewal of the Loan Agreement, (b) the term "Prime Rate" shall mean the rate from time to time publicly announced by First Union National Bank, or its successors, as its prime rate, whether or not such announced rate is the best rate available at such bank, (c) the term "Event of Default" shall mean an Event of Default as such term is defined in the Loan Agreement, and (d) the term "Loan Agreement" shall mean the Loan and Security Agreement, dated of even date herewith, by and among Debtor, certain of its affiliates and Payee, as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced. Unless otherwise defined herein, all capitalized terms used herein shall have the meaning assigned thereto in the Loan Agreement.

The Interest Rate applicable to Prime Rate Loans payable hereunder shall increase or decrease by an amount equal to each increase or decrease, respectively, in the Prime Rate, effective on the first day of the month after any change in the Prime Rate is announced. The increase or decrease shall be based on the Prime Rate in effect on the last day of the month in which any such change occurs. Interest shall be calculated on the basis of a three hundred sixty (360) day year and actual days elapsed. In no event shall the interest charged hereunder exceed the maximum permitted under the laws of the State of New York or other applicable law.


This Note is issued pursuant to the terms and provisions of the Loan Agreement to evidence the Term Loan by Payee to Debtor. This Note is secured by the Collateral described in the Loan Agreement and all notes, guarantees, security agreements and other agreements, documents and instrument now or at any time hereafter executed and/or delivered by Debtor or any other party in connection therewith (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, renewed, extended, restated or replaced, being collectively referred to herein as the "Financing Agreements"), and is entitled to all of the benefits and rights thereof and of the other Financing Agreements. At the time any payment is due hereunder, at its option, Payee may charge the amount thereof to any account of Debtor maintained by Payee.

If any payment of principal or interest is not made within three (3) days of the date when due hereunder, or if any other Event of Default shall occur for any reason, or if the Loan Agreement shall be terminated or not renewed for any reason whatsoever, then and in any such event, in addition to all rights and remedies of Payee under the Financing Agreements, applicable law or otherwise, all such rights and remedies being cumulative, not exclusive and enforceable alternatively, successively and concurrently, Payee may, at its option, declare any or all of Debtor's obligations, liabilities and indebtedness owing to Payee under the Loan Agreement and the other Financing Agreements (the "Obligations"), including, without limitation, all amounts owing under this Note, to be due and payable, whereupon the then unpaid balance hereof, together with all interest accrued thereon, shall forthwith become due and payable, together with interest accruing thereafter at the then applicable Interest Rate stated above until the indebtedness evidenced by this Note is paid in full, plus the costs and expenses of collection hereof, including, but not limited to, attorneys' fees and legal expenses.

Debtor (i) waives diligence, demand, presentment, protest and notice of any kind, (ii) agrees that it will not be necessary for Payee to first institute suit in order to enforce payment of this Note and (iii) consents to any one or more extensions or postponements of time of payment, release, surrender or substitution of collateral security, or forbearance or other indulgence, without notice or consent. The pleading of any statute of limitations as a defense to any demand against Debtor is expressly hereby waived by Debtor. Upon any Event of Default or termination or non-renewal of the Loan Agreement, Payee shall have the right, but not the obligation to setoff against this Note all money owed by Payee to Debtor.

Payee shall not be required to resort to any Collateral for payment, but may proceed against Debtor and any guarantors or endorsers hereof in such order and manner as Payee may choose. None of the rights of Payee shall be waived or diminished by any failure or delay in the exercise thereof.

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The validity, interpretation and enforcement of this Note and the other Financing Agreements and any dispute arising in connection herewith or therewith shall be governed by the internal laws of the State of New York (without giving effect to principles of conflicts of law).

Debtor irrevocably consents and submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York in New York County and the United States District Court for the Southern District of New York and waives any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Note or any of the other Financing Agreements or in any way connection with or related or incidental to the dealings of Debtor and Payee in respect of this Note or any of the other Financing Agreements or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agrees that any dispute arising out of the relationship between Debtor and Payee or the conduct of such persons in connection with this Note or otherwise shall be heard only in the courts described above (except that Payee shall have the right to bring any action or proceeding against Debtor or its property in the courts of any other jurisdiction which Payee deems necessary or appropriate in order to realize on the Collateral or to otherwise enforce its rights against Debtor or its property).

Debtor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to it and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mails, or, at Payee's option, by service upon Debtor in any other manner provided under the rules of any such courts. Within thirty (30) days after such service, Debtor shall appear in answer to such process, failing which Debtor shall be deemed in default and judgment may be entered by Payee against Debtor for the amount of the claim and other relief requested.

DEBTOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS NOTE OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS BETWEEN DEBTOR AND PAYEE IN RESPECT OF THIS NOTE OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. DEBTOR AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY.

The execution and delivery of this Note has been authorized by the Board of Directors and by any necessary vote or consent of the stockholders of Debtor. Debtor hereby authorizes Payee to complete this Note in any particulars according to the terms of the loan evidenced hereby.

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This Note shall be binding upon the successors and assigns of Debtor and inure to the benefit of Payee and its successors, endorsees and assigns. Whenever used herein, the term "Debtor" shall be deemed to include its successors and assigns and the term "Payee" shall be deemed to include its successors, endorsees and assigns. If any term or provision of this Note shall be held invalid, illegal or unenforceable, the validity of all other terms and provisions hereof shall in no way be affected thereby.

CENTRAL SPRINKLER COMPANY

By: /s/ Albert T. Sabol
   ----------------------------------------

Title: Executive Vice President
      -------------------------------------

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Exhibit 10(w)

PLEDGE AND SECURITY AGREEMENT

This Pledge and Security Agreement ("Pledge Agreement"), dated September 18, 1998, is by Central Sprinkler Company, a Pennsylvania corporation ("Pledgor"), with its chief executive office at 451 North Cannon Avenue, Lansdale, Pennsylvania 19446 to and in favor of Congress Financial Corporation, a Delaware corporation ("Pledgee"), having an office at 1133 Avenue of the Americas, New York, New York 10036.

W I T N E S S E T H:

WHEREAS, Pledgor is now the direct and beneficial owner of all of the issued and outstanding shares of capital stock of Central CPVC Corporation, an Alabama corporation ("CPVC"), Central Castings Corporation, an Alabama corporation ("Castings", and together with Pledgor and CPVC, each a "Borrower", and collectively, "Borrowers"), and Central Sprinkler Export Corporation, a Barbados corporation ("CSE", and together with CPVC and Castings, each individually an "Issuer", and collectively, "Issuers") as described on Exhibit A annexed hereto and made a part hereof (the "Pledged Securities"); and

WHEREAS, Pledgee and Borrowers have entered into or are about to enter into financing arrangements pursuant to which Pledgee may make loans and advances and provide other financial accommodations to Borrowers as set forth in the Loan and Security Agreement, dated of even date herewith, by and among Pledgee, Borrowers, CSE and Central Sprinkler Corporation (as the same now exists or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, the "Loan Agreement") and other agreements, documents and instruments referred to therein or at any time executed and/or delivered in connection therewith or related thereto, including, but not limited to, this Pledge Agreement (all of the foregoing, together with the Loan Agreement, as the same now exist or may hereafter be amended, modified, supplemented, extended, renewed, restated or replaced, being collectively referred to herein as the "Financing Agreements"); and

WHEREAS, in order to induce Pledgee to enter into the Loan Agreement and the other Financing Agreements and to make loans and advances and provide other financial accommodations to Borrowers pursuant thereto, Pledgor has agreed to secure the payment and performance of the Obligations (as hereinafter defined) to Pledgee and to accomplish same by (i) executing and delivering to Pledgee this Pledge Agreement, (ii) delivering to Pledgee the Pledged Securities which are registered in the name of Pledgor, together with appropriate powers duly executed in blank by Pledgor, and (iii) delivering to Pledgee any and all other documents which Pledgee deems necessary to protect Pledgee's interests hereunder;

NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Pledgor hereby agrees as follows:


1. GRANT OF SECURITY INTEREST

As collateral security for the prompt performance, observance and indefeasible payment in full of all of the Obligations (as hereinafter defined), Pledgor hereby assigns, pledges, hypothecates, transfers and sets over to Pledgee and grants to Pledgee a security interest in and lien upon (a) the Pledged Securities, together with all other investment property, cash dividends, stock dividends, interests, profits, redemptions, warrants, subscription rights, stock, securities options, substitutions, exchanges and other distributions now or hereafter distributed by each Issuer or which may hereafter be delivered to the possession of Pledgor or Pledgee with respect thereto, (b) Pledgor's records with respect to the foregoing, and (c) the proceeds of all of the foregoing (all of the foregoing being collectively referred to herein as the "Pledged Property").

2. OBLIGATIONS SECURED

The security interest, lien and other interests granted to Pledgee pursuant to this Pledge Agreement shall secure the prompt performance and payment in full of any and all obligations, liabilities and indebtedness of every kind, nature and description owing by Pledgor to Pledgee and/or its affiliates, including principal, interest, charges, fees, costs and expenses, however evidenced, whether as principal, surety, endorser, guarantor or otherwise, whether arising under this Pledge Agreement, the Loan Agreement or the other Financing Agreements, whether now existing or hereafter arising, whether arising before, during or after the initial or any renewal term of the Loan Agreement or after the commencement of any case with respect to Pledgor under the United States Bankruptcy Code or any similar statute (including, without limitation, the payment of interest and other amounts which would accrue and become due but for the commencement of such case), whether direct or indirect, absolute or contingent, joint or several, due or not due, primary or secondary, liquidated or unliquidated, secured or unsecured, and however acquired by Pledgee (all of the foregoing being collectively referred to herein as the "Obligations").

3. REPRESENTATIONS, WARRANTIES AND COVENANTS

Pledgor hereby represents, warrants and covenants with and to Pledgee the following (all of such representations, warranties and covenants being continuing so long as any of the Obligations are outstanding):

(a) The Pledged Securities are duly authorized, validly issued, fully paid and non-assessable capital stock of each Issuer and constitute Pledgor's entire interest in each Issuer and are not registered, nor has Pledgor authorized the registration thereof, in the name of any person or entity other than Pledgor or Pledgee.

(b) The Pledged Property is directly, legally and beneficially owned by Pledgor, free and clear of all claims, liens, pledges and encumbrances of any kind, nature or description, except for the pledge and security interest in favor of Pledgee and the pledges and security interests permitted under the Loan Agreement.

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(c) The Pledged Property is not subject to any restrictions relative to the transfer thereof and Pledgor has the right to transfer and hypothecate the Pledged Property free and clear of any liens, encumbrances or restrictions.

(d) The Pledged Property is duly and validly pledged to Pledgee and no consent or approval of any governmental or regulatory authority or of any securities exchange or the like, nor any consent or approval of any other third party, was or is necessary to the validity and enforceability of this Pledge Agreement.

(e) Pledgor authorizes Pledgee to: (i) store, deposit and safeguard the Pledged Property, (ii) perform any and all other acts which Pledgee in good faith deems reasonable and/or necessary for the protection and preservation of the Pledged Property or its value or Pledgee's security interest therein and
(iii) pay any charges or expenses which Pledgee deems necessary for the foregoing purpose, but without any obligation to do so. Any obligation of Pledgee for reasonable care for the Pledged Property in Pledgee's possession shall be limited to the same degree of care which Pledgee uses for similar property pledged to Pledgee by other persons.

(f) If Pledgor shall become entitled to receive or acquire, or shall receive any stock certificate, or option or right with respect to the stock of any Issuer (including without limitation, any certificate representing a dividend or a distribution or exchange of or in connection with reclassification of the Pledged Securities) whether as an addition to, in substitution of, or in exchange for any of the Pledged Property or otherwise, Pledgor agrees to accept same as Pledgee's agent, to hold same in trust for Pledgee and to deliver same forthwith to Pledgee or Pledgee's agent or bailee in the form received, with the endorsement(s) of Pledgor where necessary and/or appropriate powers and/or assignments duly executed to be held by Pledgee or Pledgee's agent or bailee subject to the terms hereof, as further security for the Obligations.

(g) Pledgor shall not, without the prior consent of Pledgee, directly or indirectly, sell, assign, transfer, or otherwise dispose of, or grant any option with respect to the Pledged Property, nor shall Pledgor create, incur or permit any further pledge, hypothecation, encumbrance, lien, mortgage or security interest with respect to the Pledged Property.

(h) So long as no Event of Default (as hereinafter defined) has occurred and is continuing, Pledgor shall have the right to vote and exercise all corporate rights with respect to the Pledged Securities, except as expressly prohibited herein, and to receive any cash dividends payable in respect of the Pledged Securities.

(i) Pledgor shall not permit an Issuer, directly or indirectly, to issue, sell, grant, assign, transfer or otherwise dispose of, any additional shares of capital stock of such Issuer or any option or warrant with respect to,

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or other right or security convertible into, any additional shares of capital stock of such Issuer, now or hereafter authorized, unless all such additional shares, options, warrants, rights or other such securities are made and shall remain part of the Pledged Property subject to the pledge and security interest granted herein.

(j) Pledgor shall pay all charges and assessments of any nature against the Pledged Property or with respect thereto prior to said charges and/or assessments being delinquent.

(k) Pledgor shall promptly reimburse Pledgee on demand, together with interest at the rate then applicable to the Obligations set forth in the Loan Agreement, for any charges, assessments or expenses paid or incurred by Pledgee in its discretion for the protection, preservation and maintenance of the Pledged Property and the enforcement of Pledgee's rights hereunder, including, without limitation, attorneys' fees and legal expenses incurred by Pledgee in seeking to protect, collect or enforce its rights in the Pledged Property or otherwise hereunder.

(l) Pledgee may notify any Issuer or the appropriate transfer agents of the Pledged Securities to register the security interest and pledge granted herein and honor the rights of Pledgee with respect thereto.

(m) Pledgor waives: (i) all rights to require Pledgee to proceed against any other person, entity or collateral or to exercise any remedy, (ii) the defense of the statute of limitations in any action upon any of the Obligations, (iii) any right of subrogation or interest in the Obligations or Pledged Property until all Obligations have been paid in full and (iv) any rights to notice of any kind or nature whatsoever, unless specifically required in this Pledge Agreement or non-waivable under any applicable law. Pledgor agrees that the Pledged Property, other collateral, or any other guarantor or endorser may be released, substituted or added with respect to the Obligations, in whole or in part, without releasing or otherwise affecting the liability of Pledgor, the pledge and security interests granted hereunder, or this Pledge Agreement. Pledgee is entitled to all of the benefits of a secured party set forth in Section 9-207 of the New York Uniform Commercial Code.

4. EVENTS OF DEFAULT

All Obligations shall become immediately due and payable, without notice or demand, at the option of Pledgee, upon the occurrence of any Event of Default, as such term is defined in the Loan Agreement (each an "Event of Default" hereunder).

5. RIGHTS AND REMEDIES

At any time an Event of Default exists or has occurred and is continuing, in addition to all other rights and remedies of Pledgee, whether provided under this Pledge Agreement, the Loan Agreement, the other Financing Agreements, applicable law or otherwise, Pledgee shall have the following rights and remedies which may be exercised without notice to, or consent by, Pledgor except as such notice or consent is expressly provided for hereunder:

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(a) Pledgee, at its option, shall be empowered to exercise its continuing right to instruct each Issuer (or the appropriate transfer agent of the Pledged Securities) to register any or all of the Pledged Securities in the name of Pledgee or in the name of Pledgee's nominee and Pledgee may complete, in any manner Pledgee may deem expedient, any and all stock powers, assignments or other documents heretofore or hereafter executed in blank by Pledgor and delivered to Pledgee. After said instruction, and without further notice, Pledgee shall have the exclusive right to exercise all voting and corporate rights with respect to the Pledged Securities and other Pledged Property, and exercise any and all rights of conversion, redemption, exchange, subscription or any other rights, privileges, or options pertaining to any shares of the Pledged Securities or other Pledged Property as if Pledgee were the absolute owner thereof, including, without limitation, the right to exchange, in its discretion, any and all of the Pledged Securities and other Pledged Property upon any merger, consolidation, reorganization, recapitalization or other readjustment with respect thereto. Upon the exercise of any such rights, privileges or options by Pledgee, Pledgee shall have the right to deposit and deliver any and all of the Pledged Securities and other Pledged Property to any committee, depository, transfer agent, registrar or other designated agency upon such terms and conditions as Pledgee may determine, all without liability, except to account for property actually received by Pledgee. However, Pledgee shall have no duty to exercise any of the aforesaid rights, privileges or options (all of which are exercisable in the sole discretion of Pledgee) and shall not be responsible for any failure to do so or delay in doing so.

(b) In addition to all the rights and remedies of a secured party under the Uniform Commercial Code or other applicable law, Pledgee shall have the right, at any time and without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon Pledgor or any other person (all and each of which demands, advertisements and/or notices are hereby expressly waived to the extent permitted by applicable law), to proceed forthwith to collect, redeem, recover, receive, appropriate, realize, sell, or otherwise dispose of and deliver said Pledged Property or any part thereof in one or more lots at public or private sale or sales at any exchange, broker's board or at any of Pledgee's offices or elsewhere at such prices and on such terms as Pledgee may deem best. The foregoing disposition(s) may be for cash or on credit or for future delivery without assumption of any credit risk, with Pledgee having the right to purchase all or any part of said Pledged Property so sold at any such sale or sales, public or private, free of any right or equity of redemption in Pledgor, which right or equity is hereby expressly waived or released by Pledgor. The proceeds of any such collection, redemption, recovery, receipt, appropriation, realization, sale or other disposition, after deducting all costs and expenses of every kind incurred relative thereto or incidental to the care, safekeeping or otherwise of any and all Pledged Property or in any way relating to the rights of Pledgee hereunder, including attorneys' fees and legal expenses, shall be applied first to the satisfaction of the Obligations (in such order as Pledgee may elect and whether or not due) and then to the payment of any other amounts required by applicable law, including Section 9-504(1)(c) of

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the Uniform Commercial Code, with Pledgor to be and remain liable for any deficiency. Pledgor shall be liable to Pledgee for the payment on demand of all such costs and expenses, together with interest at the then applicable rate set forth in the Loan Agreement, and any attorneys' fees and legal expenses. Pledgor agrees that ten (10) days prior written notice by Pledgee designating the place and time of any public sale or of the time after which any private sale or other intended disposition of any or all of the Pledged Property is to be made, is reasonable notification of such matters.

(c) Pledgor recognizes that Pledgee may be unable to effect a public sale of all or part of the Pledged Property by reason of certain prohibitions contained in the Securities Act of 1933, as amended, as now or hereafter in effect or in applicable Blue Sky or other state securities law, as now or hereafter in effect, but may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire such Pledged Property for their own account for investment and not with a view to the distribution or resale thereof. If at the time of any sale of the Pledged Property or any part thereof, the same shall not, for any reason whatsoever, be effectively registered (if required) under the Securities Act of 1933 (or other applicable state securities law), as then in effect, Pledgee in its good faith discretion is authorized to sell such Pledged Property or such part thereof by private sale in such manner and under such circumstances as Pledgee or its counsel may deem necessary or advisable in order that such sale may legally be effected without registration. Pledgor agrees that private sales so made may be at prices and other terms less favorable to the seller than if such Pledged Property were sold at public sale, and that Pledgee has no obligation to delay the sale of any such Pledged Property for the period of time necessary to permit each Issuer, even if each Issuer would agree, to register such Pledged Property for public sale under such applicable securities laws. Pledgor agrees that any private sales made under the foregoing circumstances shall be deemed to have been in a commercially reasonable manner.

(d) All of the Pledgee's rights and remedies, including, but not limited to, the foregoing and those otherwise arising under this Pledge Agreement, the Loan Agreement and the other Financing Agreements, the instruments comprising the Pledged Property, applicable law or otherwise, shall be cumulative and not exclusive and shall be enforceable alternatively, successively or concurrently as Pledgee may deem expedient. No failure or delay on the part of Pledgee in exercising any of its options, powers or rights or partial or single exercise thereof, shall constitute a waiver of such option, power or right.

6. JURY TRIAL WAIVER; OTHER WAIVERS AND CONSENTS; GOVERNING LAW

(a) The validity, interpretation and enforcement of this Pledge Agreement and the other Financing Agreements and any dispute arising out of the relationship between the parties hereto, whether in contract, tort, equity or otherwise, shall be governed by the internal laws of the State of New York (without giving effect to principles of conflicts of law).

-6-

(b) Pledgor irrevocably consents and submits to the non-exclusive jurisdiction of the Supreme Court of the State of New York in the County of New York and the United States District Court for the Southern District of New York and waives any objection based on venue or forum non conveniens with respect to any action instituted therein arising under this Pledge Agreement or any of the other Financing Agreements or in any way connected with or related or incidental to the dealings of the parties hereto in respect of this Pledge Agreement or any of the other Financing Agreements or the transactions related hereto or thereto, in each case whether now existing or hereafter arising, and whether in contract, tort, equity or otherwise, and agrees that any dispute with respect to any such matters shall be heard only in the courts described above (except that Pledgee shall have the right to bring any action or proceeding against Pledgor or its property in the courts of any other jurisdiction which Pledgee deems necessary or appropriate in order to realize on the Pledged Property or to otherwise enforce its rights against Pledgor or its property).

(c) Pledgor hereby waives personal service of any and all process upon it and consents that all such service of process may be made by certified mail (return receipt requested) directed to its address set forth herein and service so made shall be deemed to be completed five (5) days after the same shall have been so deposited in the U.S. mails, or, at Pledgee's option, by service upon Pledgor in any other manner provided under the rules of any such courts. Within thirty (30) days after such service, Pledgor shall appear in answer to such process, failing which Pledgor shall be deemed in default and judgment may be entered by Pledgee against Pledgor for the amount of the claim and other relief requested.

(d) PLEDGOR HEREBY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION (i) ARISING UNDER THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR (ii) IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF PLEDGOR AND PLEDGEE IN RESPECT OF THIS PLEDGE AGREEMENT OR ANY OF THE OTHER FINANCING AGREEMENTS OR THE TRANSACTIONS RELATED HERETO OR THERETO IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER IN CONTRACT, TORT, EQUITY OR OTHERWISE. PLEDGOR HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND THAT PLEDGOR OR PLEDGEE MAY FILE AN ORIGINAL COUNTERPART OF A COPY OF THIS PLEDGE AGREEMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE PARTIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

(e) Pledgee shall not have any liability to Pledgor (whether in tort, contract, equity or otherwise) for losses suffered by Pledgor in connection with, arising out of, or in any way related to the transactions or relationships contemplated by this Pledge Agreement, or any act, omission or event occurring in connection herewith, unless it is determined by a final and non-appealable judgment or court order binding on Pledgee, that the losses were the result of acts or omissions constituting gross negligence or willful misconduct. In any

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such litigation, Pledgee shall be entitled to the benefit of the rebuttable presumption that it acted in good faith and with the exercise of ordinary care in the performance by it of the terms of this Pledge Agreement.

7. MISCELLANEOUS

(a) Pledgor agrees that at any time and from time to time upon the written request of Pledgee, Pledgor shall execute and deliver such further documents, including, but not limited to, irrevocable proxies or stock powers, in form satisfactory to counsel for Pledgee, and will take or cause to be taken such further acts as Pledgee may request in order to effect the purposes of this Pledge Agreement and perfect or continue the perfection of the security interest in the Pledged Property granted to Pledgee hereunder.

(b) Beyond the exercise of reasonable care to assure the safe custody of the Pledged Property (whether such custody is exercised by Pledgee, or Pledgee's nominee, agent or bailee) Pledgee or Pledgee's nominee agent or bailee shall have no duty or liability to protect or preserve any rights pertaining thereto and shall be relieved of all responsibility for the Pledged Property upon surrendering it to Pledgor or foreclosure with respect thereto.

(c) All notices, requests and demands to or upon the respective parties hereto shall be in writing and shall be deemed to have been duly given or made:
if delivered in person, immediately upon delivery; if by telex, telegram or facsimile transmission, immediately upon sending and upon confirmation of receipt; if by nationally recognized overnight courier service with instructions to deliver the next business day, one (1) business day after sending; and if by registered or certified mail, return receipt requested, five (5) days after mailing. All notices, requests and demands upon the parties are to be given to the following addresses (or to such other address as any party may designate by notice in accordance with this Section):

If to Pledgor:   Central Sprinkler Company
                 451 North Cannon Avenue
                 Lansdale, Pennsylvania 19446
                 Attention: Chief Financial Officer

If to Pledgee:   Congress Financial Corporation
                 1133 Avenue of the Americas
                 New York, New York 10036
                 Attention: Mr. Andrew W. Robin

(d) All references to the plural herein shall also mean the singular and to the singular shall also mean the plural. All references to Pledgor, Pledgee and Issuers pursuant to the definitions set forth in the recitals hereto, or to any other person herein, shall include their respective successors and assigns. The words "hereof," "herein," "hereunder," "this Pledge Agreement" and words of similar import when used in this Pledge Agreement shall refer to this Pledge Agreement as a whole and not any particular provision of this Pledge Agreement and as this Pledge Agreement now exists or may hereafter be amended,

-8-

modified, supplemented, extended, renewed, restated or replaced. An Event of Default shall exist or continue or be continuing until such Event of Default is waived in accordance with Section 7(g) hereof. All references to the term "Person" or "Persons" herein shall mean any individual, sole proprietorship, partnership, corporation (including, without limitation, any corporation which elects subchapter S status under the Internal Revenue Code of 1986, as amended), limited liability company, limited liability partnership, business trust, unincorporated association, joint stock company, trust, joint venture or other entity or any government or any agency, instrumentality or political subdivision thereof.

(e) This Pledge Agreement, the other Financing Agreements and any other document referred to herein or therein shall be binding upon Pledgor and its successors and assigns and inure to the benefit of and be enforceable by Pledgee and its successors and assigns.

(f) If any provision of this Pledge Agreement is held to be invalid or unenforceable, such invalidity or unenforceability shall not invalidate this Pledge Agreement as a whole, but this Pledge Agreement shall be construed as though it did not contain the particular provision held to be invalid or unenforceable and the rights and obligations of the parties shall be construed and enforced only to such extent as shall be permitted by applicable law.

(g) Neither this Pledge Agreement nor any provision hereof shall be amended, modified, waived or discharged orally or by course of conduct, but only by a written agreement signed by an authorized officer of Pledgee. Pledgee shall not, by any act, delay, omission or otherwise be deemed to have expressly or impliedly waived any of its rights, powers and/or remedies unless such waiver shall be in writing and signed by an authorized officer of Pledgee. Any such waiver shall be enforceable only to the extent specifically set forth therein. A waiver by Pledgee of any right, power and/or remedy on any one occasion shall not be construed as a bar to or waiver of any such right, power and/or remedy which Pledgee would otherwise have on any future occasion, whether similar in kind or otherwise.

IN WITNESS WHEREOF, Pledgor has executed this Pledge Agreement as of the day and year first above written.

CENTRAL SPRINKLER COMPANY

By: /s/ Albert T. Sabol
   -----------------------------------

Title: Executive Vice President
      --------------------------------

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Exhibit 10.(x)


AMENDED AND RESTATED
LEASE AGREEMENT
Dated as of October 1, 1998

Between

THE INDUSTRIAL DEVELOPMENT BOARD

OF THE CITY OF HUNTSVILLE

AND

CENTRAL CPVC CORPORATION

Relating to the Issuance of
$7,500,000

The Industrial Development Board of the City of Huntsville Tax-Exempt Variable Rate Demand/Fixed Rate Refunding Revenue Bonds


(Central CPVC Corporation Project)

Series of 1998

This Instrument was Prepared by:

Joseph W. Mathews, Jr.
Lange, Simpson, Robinson & Somerville LLP 417 North 20th Street, Suite 1700
Birmingham, Alabama 35203


TABLE OF CONTENTS

(This Table of Contents is not a part of the Lease Agreement and is provided solely for convenience of reference.)

                                                                                                               Page
                                                                                                               ----
      PARTIES        .............................................................................................5

      PREAMBLES      .............................................................................................5

ARTICLE I
---------
   DEFINITIONS
   -----------
      Section 1.1  Definitions....................................................................................7
      Section 1.2  Use of Words and Phrases......................................................................11

ARTICLE II
----------
   REPRESENTATIONS AND WARRANTIES
   ------------------------------
      Section 2.1  Representations and Warranties by the Lessor..................................................12
      Section 2.2  Representations and Warranties by Lessee......................................................12

ARTICLE III
-----------
   DEMISING CLAUSES AND WARRANTY OF TITLE
   --------------------------------------
      Section 3.1  Demise of the Project.........................................................................13
      Section 3.2  Warranty of Title.............................................................................13
      Section 3.3  Quiet Enjoyment and Possession................................................................13

ARTICLE IV
----------
   COMMENCEMENT AND COMPLETION OF THE PROJECT,
   -------------------------------------------
      Section 4.1  Agreement to Acquire, Construct and Equip the Project.........................................13
      Section 4.2  Agreement to Issue Bonds; Application of Bond Proceeds........................................14

ARTICLE V
---------
   EFFECTIVE DATE AND DURATION OF THIS LEASE AGREEMENT,
   ----------------------------------------------------
      Section 5.1  Effective Date and Duration of this Lease Agreement...........................................15
      Section 5.2  Delivery and Acceptance of Possession.........................................................15
      Section 5.3  Rents and Other Amounts Payable...............................................................15
      Section 5.4  Prepayment of Rents...........................................................................17
      Section 5.5  Indemnity Against Claims......................................................................17
      Section 5.6  Obligation of Lessee Unconditional............................................................18
      Section 5.7  Public Services Payment.......................................................................18
      Section 5.8  Lessee Entitled to Certain Rent Abatements if Bonds Paid Prior to Maturity....................19
      Section 5.9  Indemnification with Respect to Certain Tax Changes...........................................19

2

                                                                                                               Page
                                                                                                               ----
ARTICLE VI
----------
   MAINTENANCE, TAXES AND INSURANCE
   --------------------------------
      Section 6.1  Maintenance and Modification of Project by Lessee.............................................19
      Section 6.2  Taxes, Other Governmental Charges and Utility Charges.........................................20
      Section 6.3  Insurance Required to be Carried..............................................................21
      Section 6.6  Advances by Lessor or Trustee.................................................................22
      Section 6.7  Removal of Leased Equipment...................................................................22

ARTICLE VII
-----------
   DAMAGE, DESTRUCTION AND CONDEMNATION
   ------------------------------------
      Section 7.1  Damage and Destruction........................................................................23
      Section 7.2  Condemnation or Failure of Title..............................................................23
      Section 7.3  Condemnation of Lessee Owned Property.........................................................24

ARTICLE VIII
------------
   SPECIAL COVENANTS
   -----------------
      Section 8.1  No Warranty of Condition or Suitability by the Lessor.........................................24
      Section 8.2  Inspection of the Project.....................................................................24
      Section 8.3  Release of Certain Land.......................................................................24
      Section 8.4  Purchase of Additional Machinery, Equipment, Furniture or Fixtures by the Lessor..............25
      Section 8.5  Further Assurance and Corrective Instruments..................................................25
      Section 8.7  Authorized Lessor Representative..............................................................25
      Section 8.8  Authorized Lessee Representative..............................................................25

ARTICLE IX
----------
   ASSIGNMENT, SUBLEASING, MORTGAGING AND
   --------------------------------------
      Section 9.1  Assignment and Subleasing.....................................................................28
      Section 9.3  Restrictions on Mortgage or Sale of Project by Lessor.........................................28
      Section 9.4  Redemption of Bonds...........................................................................29
      Section 9.5  Reference to Bonds Ineffective After Bonds Paid...............................................29

ARTICLE X
---------
   EVENTS OF DEFAULT AND REMEDIES
   ------------------------------
      Section 10.1  Events of Default Defined....................................................................29
      Section 10.2  Remedies on Default..........................................................................31
      Section 10.3  No Remedy Exclusive..........................................................................31
      Section 10.4  Agreement to Pay Attorneys' Fees and Expenses................................................32
      Section 10.5  No Additional Waiver Implied by One Waiver...................................................32
      Section 10.6  Remedial Rights Assigned to Trustee..........................................................32

3

                                                                                                               Page
                                                                                                               ----
ARTICLE XI
----------
   OPTIONS IN FAVOR OF LESSEE
   --------------------------
      Section 11.1  Options to Terminate.........................................................................32
      Section 11.2  Option to Purchase Project Prior to Payment of the Bonds.....................................33
      Section 11.3  Option to Purchase Project After Payment of the Bonds........................................34
      Section 11.4  Option to Purchase Unimproved Land...........................................................34
      Section 11.5  Conveyance on Exercise of Option to Purchase.................................................35
      Section 11.6  Effect of Exercise on Options................................................................36
      Section 11.7  Relative Position of Options and Indenture...................................................36

ARTICLE XII
-----------
   MISCELLANEOUS
   -------------
      Section 12.1  Surrender of Project.........................................................................36
      Section 12.2  Notices......................................................................................36
      Section 12.3  Binding Effect...............................................................................37
      Section 12.4  Severability.................................................................................37
      Section 12.5  Amendments, Changes and Modifications........................................................37
      Section 12.6  Execution in Counterparts....................................................................37
      Section 12.7  Recording and Filing.........................................................................37
      Section 12.8  Net Lease....................................................................................38
      Section 12.9  Certain Tax Matters..........................................................................38
      Section 12.10  Date of this Lease Agreement................................................................38
      Section 12.11  Applicable Law..............................................................................38
      Section 12.12  No Charge Against Lessor's Credit...........................................................38
      Section 12.13  Captions....................................................................................38

      TESTIMONIUM ...............................................................................................39

      SIGNATURES AND SEALS...................................................................................... 39

      ACKNOWLEDGEMENTS.......................................................................................... 41

      EXHIBIT "A" ...............................................................................................42

      EXHIBIT "B" ...............................................................................................43

4

AMENDED AND RESTATED LEASE AGREEMENT, dated as of October 1, 1998, between The Industrial Development Board of the City of Huntsville (the "Lessor"), a public corporation duly organized and existing under the constitution and laws of the State of Alabama, and Central CPVC Corporation (the "Lessee"), a corporation, organized and existing under the laws of the State of Alabama.

W I T N E S S E T H:

WHEREAS, the Lessor was organized pursuant to the provisions of Act No. 648 adopted at the 1949 Regular Session of the Legislature of the State of Alabama, approved September 19, 1949, as amended (said Act being codified as
Section 11-54-80, et seq., Code of Alabama, 1975 and hereinafter sometimes referred to as the "Act"); and,

WHEREAS, the Lessor has made the necessary arrangements with the Lessee for acquiring real property and equipping thereon a manufacturing facility)(the said real property, equipment and improvements being hereinafter referred to as the "Project"), which will be of the character and accomplish the purposes provided by the Act; and

WHEREAS, the Lessor has duly authorized the issuance of its $7,500,000 The Industrial Development Board of the City of Huntsville Tax-Exempt Variable Rate Demand/Fixed Rate Refunding Revenue Bonds (Central CPVC Corporation Project) Series of 1998 (the "Bonds") pursuant to a Trust Indenture made and entered into as of the 1st day of October, 1998 by and between the Lessor and First Union National Bank (the "Trustee"); and

WHEREAS, proceeds of the Bonds are being issued to refund the outstanding principal amount of the Lessor's Industrial Development Revenue Bonds (Central CPVC Corporation Project) Series 1997 Bonds dated December 1, 1997 (the "Series 1997 Bonds"). The Series 1997 Bonds were issued in the principal amount of $7,500,000 and are now outstanding in the same amount. The Series 1997 Bonds were issued to finance the costs of acquiring, constructing and equipping a certain manufacturing facility (the "Project") that was leased to the Lessee by the Lessor pursuant to a Lease Agreement dated as of December 1, 1997 (the "1997 Lease"); and

WHEREAS, when the Bonds are issued, the 1997 Bonds will be immediately paid and retired and the 1997 Lease will be amended and restated. The Lessor continues to own the Project and will continue to lease the Project to the Lessee pursuant to this Amended and Restated Lease Agreement; and

WHEREAS, pursuant to this Amended and Restated Lease Agreement the Lessee will agree to make lease payments to the Lessee at times and in amounts sufficient to pay debt service on the Bonds and to pay the purchase price of Bonds tendered for purchase pursuant to the optional or mandatory tender provisions of the Indenture. Pursuant to the Indenture the Lessor will assign and pledge to the Trustee all the Lessor's rights under this Amended and Restated Lease Agreement except for certain rights relating to indemnification, reimbursement of expenses and receipt of notices and other communications; and

5

WHEREAS, the Lessee will cause Congress Financial Corporation (together with its successors and/or assigns, the "Bank") to arrange for First Union National Bank (together with its successors and/or assigns, the "Letter of Credit Bank") to issue an irrevocable letter of credit in favor of the Trustee to provide for payment of debt service on the Bonds and to pay the purchase price of Bonds tendered for purchase pursuant to the optional or mandatory tender provisions of the Indenture. The initial letter of credit to be delivered to the Trustee and any substitute letter of credit delivered pursuant to the Indenture are referred to as the "Letter of Credit"; and

WHEREAS, the Bank has agreed to guarantee to the Letter of Credit Bank the performance by the Company of its obligations to the Letter of Credit Bank; and

WHEREAS, the Bank will arrange for the initial Letter of Credit pursuant to the Loan and Security Agreement by and among Congress Financial Corporation, as Lender, and Central Sprinkler Company, Central Castings Corporation, Central CPVC Corporation, as Borrowers, and Central Sprinkler Corporation and Central Sprinkler Export Corporation, as Guarantors, dated September 18, 1998 (together with all amendments, modifications and restatements thereof, the "Credit Agreement") between the Bank and the Lessee whereby the Lessee has agreed, among other things, to reimburse the Bank for payments to the Letter of Credit Bank to reimburse the Letter of Credit Bank for all amounts drawn pursuant to the initial Letter of Credit; and

WHEREAS, as security for the Lessee's obligations under the Credit Agreement, the Lessor and Lessee have executed a Fee and Leasehold Mortgage with Security Agreement and Assignment of Leases and Rents dated September 18, 1998 (together with all amendments, modifications and restatements thereof, the "Bank Mortgage") in favor of the Bank, whereby the Bank has a mortgage on and security interest in the Project, the leasehold interest of the Lessee, and certain other collateral; and

WHEREAS, the Bonds will be further secured by the unconditional guaranty of payment of principal of and interest on the Bonds by Central CPVC Corporation, an Alabama corporation; and

WHEREAS, the Bonds are the limited obligations of the Lessor payable solely out of (a) payments made pursuant to the Lease Agreement and the Bond Guaranty, and (b) money received from a draw on the Letter of Credit. The Trustee will not have a mortgage on or security interest in the Project. The Bank Mortgage is for the sole benefit of the Bank; and

WHEREAS, the Bonds never shall constitute the debt or indebtedness of the City of Huntsville (the "City") or the State of Alabama (the "State"), within the meaning of any provision or limitation of the constitution or statutes of Alabama, and shall not constitute or give rise to a pecuniary liability of the Lessor, its members or the City or the State or a charge against its or their general credit or the taxing powers of the City or the State; and,

6

WHEREAS, all things have been done which are necessary to make the Bonds the valid obligations of the Lessor and to constitute this Indenture a valid trust indenture for the security of the Bonds;

NOW, THEREFORE, in consideration of the premises and of the covenants hereinafter set forth, the parties hereto do hereby covenant, agree and bind themselves as follows, to-wit:

ARTICLE I

DEFINITIONS

Section 1.1 Definitions. In addition to the words and terms elsewhere defined in the Indenture or in this Lease Agreement, the following words and terms, as used in this Lease Agreement, shall have the following meanings unless the context or use indicates another or different meaning or intent:

"Act" means Act No. 648 enacted at the 1949 Regular Session of the Legislature of Alabama, as heretofore amended, said Act being codified as Chapter 54, Article 4 (Section 11-54-80, et seq.), Code of Alabama, 1975.

"Agreement," "Lease Agreement" or "Lease" means this Amended and Restated Lease Agreement entered into by and between the Lessor and Lessee as of October 1, 1998, and including any amendments or supplements thereto.

"Authorized Lessee Representative" means the person at the time designated to act on behalf of the Lessee by written certificate furnished to the Lessor and the Trustee signed on behalf of the Lessee. Such certificate may designate an alternate or alternates.

"Authorized Lessor Representative" means the person or persons at the time designated to act on behalf of the Lessor by written certificate furnished to the Lessee and the Trustee and signed on behalf of the Lessor by its Chairman, Vice Chairman, or Secretary.

"Bonds" shall have the same meaning as described in the form of Bonds set forth in the Indenture.

"Building" means that certain building and all other facilities forming a part of the Project, and not constituting part of the Leased Equipment, which are located on the Leased Land, as they may at any time exist.

7

"City" means the City of Huntsville, a municipal corporation organized and existing under the laws of the State.

"Code" means the Internal Revenue Code of 1986, as amended and at the time in force and effect.

"Completion Date" means May 1, 1998, the date of completion of the acquisition, construction, equipping and improvement of the Project.

"Construction Period" means the period between the beginning of construction and the Completion Date.

"County" means Madison County, Alabama.

"Determination of Taxability" means a determination that interest on the Bonds is subject to federal income taxation for any reason other than the circumstances described in Section 147(a) of the Code. Such a determination shall be deemed to have been made upon the occurrence of either of the following:

(a) the date on which the Lessee or the Trustee shall be advised by private ruling, technical advice or other written communication from an authorized official of the Internal Revenue Service that interest on the Bonds is subject to federal income taxation;

(b) the date on which the Lessee or the Trustee shall receive notice in writing from a Registered Owner of the Bonds that the Registered Owner has been advised by an authorized official of the Internal Revenue Service that the interest on the Bonds is subject to federal income taxation; or

(c) the date on which the Trustee receives an opinion of a nationally recognized bond counsel that interest on the Bonds is subject to Federal income taxation.

"Event of Taxability" means the occurrence of any event or the existence of any circumstances (including, without limitation, the fact that any representation or warranty of the Lessee set forth in this Agreement is untrue or the breach by the Lessee of any covenants of the Lessee herein set forth) which has the effect of causing the interest payable on the Bonds to become includable in the gross income of the holders thereof for federal income taxation purposes (other than a holder who is a Substantial User of the Project or a Related Person). The date of an Event of Taxability shall be the effective date as of which such interest became subject to taxation.

8

"Guarantor" means Central CPVC Corporation, an Alabama corporation.

"Guaranty" means that certain guaranty agreement dated as of October 1, 1998, by Central CPVC Corporation, an Alabama corporation.

"Trust Indenture" means the Trust Indenture dated as of October 1, 1998, between the Lessor and the Trustee, pursuant to which the Bonds are authorized to be issued, the interest of the Lessor in this Agreement, and the revenues and receipts of the Lessor in respect of the Project, as in this Agreement provided, are to be pledged and assigned as security for the payment of principal of and interest on the Bonds, and including any indenture supplemental thereto.

"Independent Counsel" means an attorney or firm of attorneys duly admitted to practice law in any state of the United States and not in the full time employment of either the Lessor or the Lessee.

"Independent Engineer" means an engineer or architect or engineering or architectural firm registered and qualified to practice the profession of engineering or architecture under the laws of Alabama and not in the full time employment of either the Lessor or the Lessee.

"Lease Term" means the duration of the leasehold estate created in this Agreement as specified in Section 5.1 hereof.

"Leased Equipment" means (i) those items of machinery, equipment and other tangible personal property financed with proceeds from the sale of the Bonds, (ii) any item of machinery, equipment or tangible personal property acquired in substitution for, or as a renewal or replacement of, or a modification or improvement of any Leased Equipment, pursuant to the provisions of Sections 6.1, 6.7(a), 7.1 and 7.2 hereof, (iii) any machinery, equipment or other tangible personal property acquired by the Lessor pursuant to the provisions of Section 8.4 hereof. "Leased Equipment" shall not include such machinery, equipment and tangible personal property as may be purchased by the Lessee from its own funds, or released from this Agreement pursuant to the provisions of Section 6.7 hereof, or taken by the exercise of the power of eminent domain as provided in Section 7.2 hereof.

"Leased Land" means the real estate, interests in real estate and other rights described in Exhibit A hereto and such other real estate, interests in real estate and other rights hereafter conveyed or granted to the Lessor at the request of the Lessee, together with all additions thereto and substitutions, therefor, less any real estate, interests in real estate and other rights as may be released from this Agreement pursuant to Sections 8.3, 8.6 and 11.4 hereof or taken by the exercise of the power of eminent domain as provided in Section 7.2 hereof.

"Lessee" means Central CPVC Corporation, and its successors and assigns as herein permitted.

9

"Lessor" means (i) The Industrial Development Board of the City of Huntsville and its successors and assigns, and, (ii) any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party.

"Local Facilities" means facilities of which the Lessee or a Related Person thereto is or will be the Principal User and which are located within twenty-five miles from the corporate limits of the City.

"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 expenses (including attorney's fees and any extraordinary fee of the Trustee) incurred in the collection of such gross proceeds.

"Permitted Encumbrances" means, as of any particular time, (i) mechanics' and other liens and liens for ad valorem taxes permitted to exist as provided in Sections 6.1 and 6.2 hereof, or not then delinquent, (ii) this Agreement, the Indenture and the Bank Mortgage, (iii) utility, access and other easements and rights of way, restrictions and exceptions that an Independent Engineer certifies will not interfere with or impair the operations being conducted in the Building (or, if no operations are being conducted therein, the operations for which the Building was designed or last modified) or elsewhere on the Leased Land, (iv) any mechanics', laborers', materialmen's, suppliers' or vendors' lien or right or purchase money security interest in respect thereof if payment is not yet due and payable under the contract in question, (v) those exceptions under Schedule B Section 2 of the interim title insurance binder issued with respect to the Leased Land in connection with this transaction by a title insurance company acceptable to the Trustee, and (vi) such minor defects, irregularities, encumbrances, easements, rights of way, and clouds on title as normally exist with respect to properties similar in character to the Project and as do not materially impair the Project for the purpose for which it was acquired or is held by the Lessor.

"Principal User" means a "principal user" as that term is used in
Section 144(a)(2)(B) of the Code and the applicable regulations promulgated thereunder.

"Project" means the Leased Land, the Building and the Leased Equipment, as they may at any time exist.

"Related Person" means a "related person" as that term is defined in
Section 144(a)(3) of the Code.

"State" means the State of Alabama.

"Substantial User" means a "substantial user" as that term is used in
Section 147(a) of the Code and the applicable regulations promulgated thereunder.

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"Unimproved" when used with reference to the Leased Land means any part or parts of the Leased Land upon the surface of which no part of a building or other structure rests.

Section 1.2 Use of Words and Phrases. "Herein", "hereby", "hereunder", "hereof", "hereinbefore", "hereinafter" and other equivalent words refer to this Indenture as a whole and not solely to the particular portion thereof in which any such word is used. The definitions set forth in Section 1.1 hereof include both singular and plural. Whenever used herein, any pronoun shall be deemed to include both singular and plural and to cover all genders. Terms which refer generally to the payment or the obligation to pay "principal and interest on the Bonds" shall be deemed to include the payment or the obligation to pay any applicable redemption premium on any Bonds which are called for redemption prior to maturity.

Section 1.3. Content of Certificates and Opinions. The Trustee may, but shall not be obligated to, require that every certificate or opinion provided for in this Agreement with respect to compliance with any provision hereof shall include: (1) a statement to the effect that the Person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (3) a statement to the effect that in the opinion of such Person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; (4) a statement of the assumptions upon which such certificate or opinion is based, and that such assumptions are reasonable; and (5) a statement as to whether, in the opinion of such Person, such provision has been complied with.

Any such certificate or opinion made or given by an officer of the Lessor or the Lessee may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the Lessor or the Lessee, as the case may be) upon a certificate or opinion of or representation by an officer of the Lessor or the Lessee, unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such certificate or opinion or representation may be based, as aforesaid, is erroneous. The same officer of the Lessor or the Lessee, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Agreement, but different officers, counsel or accountants may certify to different matters, respectively.

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ARTICLE II

REPRESENTATIONS AND WARRANTIES

Section 2.1 Representations and Warranties by the Lessor. The Lessor represents and warrants that:

(a) By proper corporate action, the Lessor has duly authorized the execution and delivery of this Agreement, the Indenture, the Bonds and all other instruments and documents previously or contemporaneously executed and delivered by the Lessor in connection with the Bonds. Subject to Section 9.3 hereof, the Lessor agrees that it will do or cause to be done all things necessary to preserve and keep in full force and effect its existence.

(b) Notwithstanding anything herein to the contrary, any obligation that the Lessor may incur pursuant to the terms of this Agreement for the payment of money shall not be a general debt on its part but shall be payable solely from proceeds derived from this Agreement, draws on the Letter of Credit, the sale of the Bonds and the insurance and condemnation awards as herein provided.

Section 2.2 Representations and Warranties by Lessee. The Lessee represents and warrants that:

(a) The Lessee is a corporation duly organized, validly existing and in good standing under the laws of the State of Alabama. Lessee has all requisite power and authority, corporate and otherwise, to conduct its business and to own its properties and is duly qualified as a foreign corporation in good standing in all jurisdictions in which its failure so to qualify could have a Material Adverse Effect on its financial condition or business.

(b) The Lessee has, by all necessary action, duly authorized the execution, delivery and performance of this Agreement, and when duly executed and delivered by the Lessor, this Agreement will constitute a legal, valid and binding obligation of the Lessee.

(c) The Lessee will comply fully at all times with the Lessee's Arbitrage and Tax Certificate, and the Lessee will not take any action, or omit to take any action, which, if taken or omitted, respectively, would violate the Lessee's Arbitrage and Tax Certificate.

Section 2.3 Continuing Disclosure The Bonds are exempt from the continuing disclosure requirements of Section (b)(5) of Rule 15c2-12 (the "Rule") adopted by the Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended and supplemented, so long as they bear interest at the Floating Rate (as defined in the Indenture). If the Bonds are converted

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to the Fixed Rate (as defined in the Indenture), the Bonds may become subject to the continuing disclosure requirements of the Rule. In such event, the Lessee agrees to enter into a continuing disclosure agreement with the Trustee, in form satisfactory to Bond Counsel. The Lessee hereby covenants and agrees with the Bondholders that it will comply with and carry out all of the provisions of such continuing disclosure agreement, as amended from time to time, applicable to it. Notwithstanding any other provision of this Agreement, failure of the Lessee to comply with such continuing disclosure agreement shall not be considered a default or an event of default under this Agreement and the rights and remedies provided by this Agreement upon the occurrence of a Default shall not apply to any such failure, but the continuing disclosure agreement may be enforced only as provided therein.

ARTICLE III

DEMISING CLAUSES AND WARRANTY OF TITLE

Section 3.1 Demise of the Project. The Lessor demises and leases to the Lessee, and the Lessee leases from the Lessor, the Leased Land, as more particularly described in Exhibit A hereto, together with the Building and the Leased Equipment as more particularly described in Exhibit B hereto, as they may at any time exist, and all other property which, under the terms hereof, are or subsequently become a part of the Project, subject only to Permitted Encumbrances, in accordance with the provisions of this Lease Agreement, including the payment of rentals and of other amounts as set forth in Section 5.3 hereof.

Section 3.2 Warranty of Title. The Lessor warrants that it has good and marketable title to the Project, free from all encumbrances other than Permitted Encumbrances and other than the encumbrances set forth in the granting clauses of the Indenture, and the Lessor has or will promptly obtain title insurance in form and amount acceptable to the Trustee with respect to the Leased Land. The Net Proceeds from such insurance shall be paid to the Trustee and applied in accordance with Section 7.2 hereof. To the extent such insurance is available to redeem Bonds pursuant hereto, no claim shall be made and no suit brought hereunder against the Lessee by the title insurance company or anyone else claiming on behalf of or by, through or under it.

Section 3.3 Quiet Enjoyment and Possession. The Lessor covenants and agrees that as long as the Lessee shall not be in default under this Lease Agreement, the Lessee may peaceably and quietly have, hold and enjoy the Project, and that the Lessor will, to the extent funds are made available to it for such purposes, defend the Lessee's enjoyment and possession thereof against all parties.

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ARTICLE IV

THE PROJECT, ISSUANCE OF THE BONDS

Section 4.1 Acquisition, Construction and Equipping of the Project. The Lessor, acting by and through the Lessee as its agent, has caused the Project to be acquired, installed, equipped and improved as herein provided, substantially in accordance with the plans and specifications provided by the Lessee.

Section 4.2 Agreement to Issue Bonds; Application of Bond Proceeds.

(a) The Lessor agrees that it will sell, issue and deliver $7,500,000 aggregate principal amount of Bonds to the initial purchasers thereof and use the proceeds therefrom, along with an equity contribution from the Lessee, to payoff the Series 1997 Bonds, the proceeds of which were used to acquire, construct and equip the Project.

Section 4.3. Substitute Letter of Credit. The Lessee may provide for the delivery to the Trustee of a Substitute Letter of Credit upon thirty (30) days prior written notice to the Trustee, the Tender Agent, the Remarketing Agent and the Lessor. Any Substitute Letter of Credit shall be delivered to the Trustee on an Interest Payment Date and not later than the thirtieth (30th) Business Day prior to the expiration of the Letter of Credit it is being issued to replace. On or before the date of the delivery of any Substitute Letter of Credit to the Trustee, as a condition to the acceptance of any Substitute Letter of Credit by the Trustee, the Lessee shall furnish to the Lessor, the Trustee and the Remarketing Agent: (i) written evidence that the issuer of such Substitute Letter of Credit is a commercial bank or other financial institution organized and doing business in the United States or a branch or agency of a foreign commercial bank located and doing business in the United States and subject to regulation by state or federal banking regulatory authorities and that it has been assigned the same or better rating as the Letter of Credit in effect immediately prior to the substitution of the Substitute Letter of Credit;
(ii) an opinion of nationally recognized bond counsel to the effect that the delivery of such Substitute Letter of Credit is authorized under this Agreement and the Indenture and the Act and complies with the terms hereof, and, that the delivery of such Substitute Letter of Credit does not adversely affect the exclusion from gross income of the interest on the Bonds for federal income tax purposes; and (iii) an opinion of Counsel satisfactory to the Trustee, the Lessor, the Lessee and the Remarketing Agent to the effect that the Substitute Letter of Credit is a legal, valid and binding obligation of the issuer (or, in the case of a branch or agency of a foreign commercial bank, the branch or agency) issuing the same, enforceable in accordance with its terms, that payments of principal of, and to the extent the Letter of Credit covers same, any premium on the Bonds, or Purchase Price of or interest on the Bonds from the proceeds of a drawing on the Substitute Letter of Credit will not constitute

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voidable preferences under the Bankruptcy Code or other applicable laws and regulations and that it is not necessary to register the Substitute Letter of Credit under the Securities Act of 1933, as amended, or to qualify an indenture with respect thereto under the Trust Indenture Act of 1939, as amended. On or before the delivery of any Substitute Letter of Credit to the Trustee, as an additional condition to the acceptance of any Substitute Letter of Credit by the Trustee, the Lessee shall furnish to the Lessor, the Trustee and the Remarketing Agent written evidence from each Rating Agency that the rating on the Bonds will not be reduced or withdrawn as a result of the acceptance of the Substitute Letter of Credit and that the short term unsecured debt of the Bank or Substitute Bank, as applicable, shall then have been assigned a rating by Moody's of "P-1" or the equivalent rating assigned by S&P. In the case of a Substitute Letter of Credit issued by a branch or agency of a foreign commercial bank there shall also be delivered an opinion of Counsel, satisfactory to the Trustee, the Lessor, the Lessee and the Remarketing Agent and licensed to practice law in the jurisdiction in which the head office of such bank is located, to the effect that the Substitute Letter of Credit is the legal, valid and binding obligation of such bank enforceable in accordance with its terms. The Trustee shall accept any such Substitute Letter of Credit only in accordance with the terms, and upon the satisfaction of the conditions, contained in this
Section 4.3 and any other provisions applicable to acceptance of a Substitute Letter of Credit under this Agreement and the Indenture.

ARTICLE V

EFFECTIVE DATE AND DURATION OF THIS AGREEMENT, RENTAL PROVISIONS

Effective Date and Duration of this Agreement. This Agreement shall become effective upon its delivery and subject to the provisions of this Lease Agreement (including particularly Articles X and XI hereof), shall, unless terminated by the Lessee pursuant to Section 11.1 hereof, continue until ll:59 o'clock, P.M., on the last day of December, 2013.

Section 5.2 Delivery and Acceptance of Possession. The Lessor shall deliver to the Lessee sole and exclusive possession of the Project (subject to the right of the Lessor to enter thereon for inspection purposes and to the other provisions of Section 8.2 hereof) on the date the Lease Agreement is executed.

Section 5.3 Rents and Other Amounts Payable.

(a) The Lessee shall pay to the Trustee, on behalf of the Lessor, the following sums as lease payments hereunder at the following times, in immediately available funds:

(i) on each Interest Payment Date during the term of this Agreement, an amount which is sufficient to pay the interest then due on the Bond.

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(ii) on the maturity date of the Bond, the principal amount thereof then maturing;

(iii) on the redemption dates established for the Bond to be redeemed pursuant to Section 4.01 (c) of the Indenture (if any), an amount equal to the redemption price due on such date.

(b) In any event, the sum of the lease payments payable under this
Section 5.3 shall be insufficient to pay the total amount due with respect to such principal and redemption price of and interest (including but not limited to interest and late charges payable pursuant to the Bond on any overdue amount) on the Bond, as and when due, and the Lessee shall forthwith pay any deficiency to the Trustee. If at any time the Bond has been fully paid and discharged within the meaning of the terms hereof, the Lessee shall not be obligated to make any further payments under this Section.

(c) Payment of Lessor's Fees and Expenses. The Lessee shall pay to, or upon the order of, the Lessor, upon request of the Lessor, such amounts required to pay the Lessor's customary administrative fees and to pay or reimburse its reasonable administrative expenses incurred from time to time in connection with services or actions of the Board in connection with this Agreement.

(d) No Abatement or Setoff. The Lessee shall pay all lease payments and all additional sums required hereunder without suspension or abatement of any nature, notwithstanding that all or any part of the facilities shall have been wholly or partially destroyed, damaged or injured and shall not have been repaired, replaced or rebuilt. So long as the Bond remains Outstanding, the obligation of the Lessee to pay all sums due from the Lessee hereunder shall be absolute and unconditional for which the Lessee pledges its full faith and credit and shall not be suspended, abated, reduced, abrogated, waived, diminished or otherwise modified in any manner or to any extent whatsoever, regardless of any rights of setoff, recoupment or counterclaim that the Lessee might otherwise have against the Lessor or any other party or parties and regardless of any contingency, act of god, event or cause whatsoever and notwithstanding any circumstances or occurrence that may arise or take place after the date hereof, including but without limiting the generality of the foregoing:

(i) any damage to or destruction of any part or all of the Project Facilities;

(ii) the taking or damaging of any part or all of the Project facilities, by any public authority or agency in the exercise of the power of or in the nature of eminent domain or by way of a conveyance in lieu of such exercise or otherwise;

(iii) any assignment, novation, merger, consolidation, or transfer of assets, whether with or without the approval of the Lessor;

(iv) any failure of the Lessor to perform or observe any agreement or covenant, whether express or implied, or any duty, liability or obligation arising out of or in connection with this Agreement and the Bond;

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(v) any act or circumstances that may constitute an eviction or constructive eviction;

(vi) failure of consideration, failure of title or commercial frustration;

(vii) any change in the tax laws or other laws of the United States or of any state or other governmental authority; or

(viii) any determination that the Bond or the interest payable thereon are subject to Federal taxation.

Section 5.4 Prepayment of Rents.

(a) Optional Prepayment. There is expressly reserved to the Lessee the right, and the Lessee is authorized and permitted, at any time the Lessee may choose, to prepay all or any part of the rents payable under Section 5.3 hereof, but only to the extent that the Bonds may be prepaid in accordance with the provisions of Article IV of the Indenture, and the Lessor agrees that the Trustee may accept such prepayment of rents when the same are tendered by the Lessee. All rents so prepaid shall be credited on the rental payments specified in Section 5.3 hereof in the inverse order of their maturities, unless prior to the date on which said credit is to be taken, the Lessee requests the Lessor to use such monies to redeem the Bonds in accordance with the provisions of the Indenture.

(b) Extraordinary and Mandatory Prepayment. In the event of an extraordinary or mandatory redemption as provided by Article IV of the Indenture, the Lessee shall prepay the Basic Rent sufficient to redeem the Bonds in accordance with the provisions of the Indenture and to pay all expenses of such redemption and all other obligations as set forth in the Indenture.

Section 5.5 Indemnity Against Claims. The Lessee covenants and agrees to pay and to indemnify and save the Lessor harmless of, from and against any and all claims, damages, demands, expenses, liabilities and losses of every conceivable kind, character and nature whatsoever (including, but not limited to, claims for loss or damage to any property, or injury to or death of any person) asserted against the Lessor by or on behalf of any person, firm, corporation or governmental authority arising out of, resulting from, or in any way connected with the Project, including but not limited to the condition, use, possession, conduct or management of, or any work done in or about, the Project, or from the planning, design, acquisition or improvement of the Project or any part thereof, or from the lease or sale of any part thereof. The Lessee will also pay and discharge and will indemnify and hold harmless the Lessor from: (a) any lien or charge upon payments by the Lessee to the Lessor hereunder, and (b) any taxes, assessments, impositions and other charges, in respect to the Project. The Lessee also covenants and agrees to pay and to indemnify and save

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the Lessor harmless of, from and against, all of the Lessor's costs, expenses (including reasonable counsel fees) and liabilities incurred in any action or proceeding brought by reason of any such claim or demand. If any such claim is asserted, or any such lien or charge upon payments, or any taxes, assessments, impositions or other charges are sought to be imposed, and either the Lessor and the Trustee has notice or knowledge thereof the Lessor or the Trustee, as the case may be, will give prompt notice to the Lessee, and the Lessee shall have the sole right and duty to assume, and will assume the defense thereof on the Lessee's behalf and on behalf of the Lessor, with full power to litigate, compromise or settle the same in the Lessee's sole discretion; provided, however, if the Lessor deems it necessary, the Lessor may obtain its own Counsel in such action and the Lessee agrees to pay the reasonable fees and expenses of such counsel.

Notwithstanding the foregoing, nothing set forth in this Section 5.5 shall be construed to indemnify the Lessor for or release the Lessor from any liability which it would otherwise have had arising from the willful, wrongful or negligent actions or failures to act on the part of the Lessor, its employees, agents or representatives acting in their capacities other than as contemplated by this Lease Agreement.

Section 5.6 Obligation of Lessee Unconditional. The obligation of the Lessee to make the payments pursuant to this Lease Agreement and to perform and observe the other agreements on the Lessee's part set forth herein shall be absolute and unconditional, shall not be subject to any defense or any right of set-off, counterclaim, recoupment, abatement or otherwise, arising out of any breach by the Lessor of any obligation to the Lessee, whether hereunder or otherwise, or out of any indebtedness or liability at any time owing to the Lessee by the Lessor. The Lessee hereby agrees to pay to the Trustee all of said payments payable by the Lessee pursuant to Section 5.3 of this Lease Agreement. Until such time as the principal of and interest on the Bonds shall have been fully paid or provisions for the payment thereof shall have been made in accordance with the Indenture, the Lessee: (i) will not suspend or discontinue any payments pursuant to this Lease Agreement, (ii) will perform and observe all the Lessee's other agreements set forth in this Lease Agreement, and (iii) except as provided in Article XI hereof, will not terminate this Lease Agreement for any cause including, without limiting the generality of the foregoing, failure of the Lessor to complete the Project, failure of the Lessor's title to the Project or any part thereof, loss of title to (or the temporary use of) the Project by virtue of the exercise by others of the power of eminent domain, any acts or circumstances, that may constitute failure of consideration, destruction of or damage to the Project, commercial frustration of purpose, any change in the tax or other laws of the United States of America or of the State of Alabama, or any political subdivision of either thereof, or any failure of the Lessor to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Lease Agreement.

Nothing set forth in this Section 5.6 shall be construed to release the Lessor from the performance of any of the agreements on its part herein set forth. In the event the Lessor shall fail to perform any such agreement on its part, the Lessee may institute such action against the Lessor as the Lessee may

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deem necessary to compel performance or may pursue such other remedies for non-performance as may be available to the Lessee so long as such action shall not violate the agreements on the part of the Lessee set forth in the preceding paragraph. In no event, however, shall the Lessee be entitled to any diminution of the amounts payable under Section 5.3 hereof. The Lessee may, however, at the Lessee's own cost and expense and in the Lessee's own name or in the name of the Lessor, prosecute or defend any action or proceeding or take any other action involving third persons which the Lessee deems reasonably necessary in order to insure the acquisition, construction, installation and equipping of the Project or to secure or protect the Lessee's right of possession, occupancy and use hereunder, and in such event, the Lessor hereby agrees to cooperate fully with the Lessee and to take all action necessary to effect the substitution of the Lessee for the Lessor in any such action or proceeding if the Lessee shall so request.

Section 5.7 Ad Valorem Taxes. The Lessee and the Lessor acknowledge that under present law the Project is not exempt, by reason of this Lease, from ad valorem taxes. The Project, however, is subject to an abatement of certain non-educational taxes.

Section 5.8 Lessee Entitled to Certain Rent Abatements if Bonds Paid Prior to Maturity. If at any time the aggregate monies available in a bond escrow agreement approved by the Trustee shall be sufficient to retire all of the Bonds outstanding in accordance with the provisions of the Indenture, and to pay all fees and charges of the Trustee and paying agents due or to become due through the date on which the last of the Bonds is retired under circumstances not resulting in termination of the Lease Term, and if the Lessee is not at the time otherwise in default hereunder, the Lessee shall be entitled to use and occupy the Project from the date on which such aggregate monies are in the hands of the Trustee to and including the last day of December, 2013 without the payment of the rent specified in Section 5.3 during that interval (but otherwise on the terms and conditions thereof).

Section 5.9 [Reserved]

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ARTICLE VI

MAINTENANCE, TAXES AND INSURANCE

Section 6.1 Maintenance and Modification of Project by Lessee. The Lessee will, at the Lessee's sole expense, during the Lease Term, keep the Project in as reasonably safe condition as its operations shall permit and in good repair and in good operating condition, making from time to time all necessary repairs thereto (including external and structural repairs). The Lessee may, also at the Lessee's expense, make from time to time any additions, modifications or improvements to the Project that the Lessee may deem desirable for the Lessee's business purposes and that do not adversely affect the structural integrity of the Project or substantially reduce its value. All such renewals, replacements, additions, modifications and improvements so made by the Lessee shall become part of the Project. The Lessee may, also at the Lessee's own expense, locate on the Leased Land any tangible personal property not purchased by the Lessor with the proceeds from the sale of the Bonds which, in the Lessee's judgment, is essential to the operation of the Project.

The Lessee will not permit any mechanics', materialmen's or other liens (except Permitted Encumbrances) to be established or remain against the Project for labor or materials furnished in connection with the Project or any additions, modifications, improvements, repairs, renewals or replacements so made by the Lessee; provided, that if the Lessee shall first notify the Trustee of the Lessee's intention to do so, the Lessee may in good faith contest any mechanics', materialmen's or other lien filed or established against the Project, and in such event, may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless (i) the Lessor or the Trustee and (ii) the Bank shall notify the Lessee that, in the opinion of Independent Counsel, by non-payment of any such items, the security afforded pursuant to the terms of the Indenture will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, and in either of such events, the Lessee shall promptly pay and cause to be satisfied and discharged all such unpaid items or secure such payment by posting a bond, in form satisfactory to the Lessor and the Trustee, with the Trustee. The Lessor will cooperate fully with the Lessee in any such contest.

Section 6.2 Taxes, Other Governmental Charges and Utility Charges. The parties to this Lease Agreement understand and acknowledge that: (i) under present law the income and receipts, if any, of the Lessor from the Project are not subject to either Federal or State income taxation, and (ii) this factor among others, has induced Lessee to enter into this Lease Agreement. Nevertheless, the Lessee will pay during the Lease Term, as the same respectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Project or any equipment or other personal property installed or brought by the Lessee therein or thereon (including, without limiting the generality of the foregoing, any taxes levied upon or with respect to the income or profits of the Lessor from the Project which, if not paid, will become a charge on the Project prior to or on a parity with the lien of the Indenture or

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a charge on the revenues and receipts from the Project prior to or on a parity with the charge thereon and the pledge or assignment thereof to be created and made in the Indenture, and including any ad valorem taxes lawfully assessed thereupon), all utility and other charges incurred in the operation, maintenance, use, occupancy and upkeep of the Project and all assessments and charges lawfully made by any governmental body for public improvements that may be secured by lien on the Project; provided, that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the Lessee shall be obligated to pay only such installments as are required to be paid during the Lease Term. The foregoing provisions of this Section 6.2 shall be effective only so long as any Bonds remain outstanding or any part of the principal of or the interest on the Bonds remains unpaid.

The Lessee may, at its expense and in its own name and behalf, or in the name and behalf of the Lessor, in good faith, contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless (i) the Lessor or the Trustee and (ii) the Bank shall notify the Lessee that, in the opinion of Independent Counsel, by non-payment of any such items, the security afforded pursuant to the terms of the Indenture will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, and in either of such events such taxes, assessments or charges shall be paid forthwith by the Lessee. The Lessor will cooperate fully with the Lessee in any such contest.

In the event that the Lessee shall fail to pay any of the foregoing items required by this Section 6.2 to be paid by the Lessee, the Lessor, the Trustee or the Bank may, but shall be under no obligation to pay the same and any amounts so advanced therefor by the Lessor or the Trustee shall become an additional obligation of the Lessee to the one making the advancement, which amounts, together with interest thereon at a per annum rate equal to one percentage point in excess of the Base Rate from the date thereof, the Lessee agrees to pay.

Section 6.3 Insurance Required to be Carried. The Lessee shall carry such insurance as may be required in the Credit Agreement or, if none is required therein, then the Lessee shall carry the following insurance:

(a) Insurance to the extent of the full insurable value of the Project against loss thereto from, or damage by vandalism, fire, and lightning, with uniform standard form of extended coverage endorsement at the time in use in the State; and

(b) Insurance against liability for injuries to, or death of any person, or damage to or loss of property arising out of or in any way relating to the condition or operation of the Project or any portion thereof, in the minimum amounts of $1,000,000 for death of or personal injury to any one person, and $200,000 for property damage in any one accident.

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Section 6.4 Destruction, Damage and Eminent Domain. If the Project Facilities shall be wholly or partially destroyed or damaged by fire or other casualty covered by insurance, or shall be wholly or partially condemned, taken or injured by any Person, including any Person possessing the right to exercise the power of or a power in the nature of eminent domain or shall be transferred to such a Person by way of a conveyance in lieu of the exercise of such a power by such a Person, the Lessee covenants that it will take all actions and will do all things which may be necessary to enable recovery to be made upon such policies of insurance or on account of such taking, condemnation, conveyance, damage or injury. The Lessee is authorized, in its own name, as trustee of an express trust, to demand, collect, sue, settle claims, receipt and release monies which may be due and payable under policies of insurance covering such damage or destruction or on account of such condemnations, damage or injury. Any moneys recovered: (i) on policies of insurance required to be maintained hereunder; or (ii) as a result of any taking, condemnation, conveyance, damage or injury shall be deposited with the Trustee under the Indenture and shall be applied in accordance with the provisions of Section 7.1 hereof; provided, however, that as long as the Letter of Credit Bank is not in default under the terms of the Letter of Credit, the applicable provisions of the Credit Agreement shall control the disposition of casualty insurance and condemnation award proceeds.

Any appraisement or adjustment of loss or damage and any settlement or payment therefor, shall be agreed upon by the Lessee, the Bank (as long as the Letter of Credit Bank is not in default under the Letter of Credit) and the appropriate insurer or condemnor or Person, and shall be evidenced to the Bank by the certificate and approvals set forth in the Indenture. The Bank may rely conclusively upon such certificates.

Section 6.5. Notice of Property Loss. After the occurrence of loss or damage to, or after receipt of notice of condemnation of, the Project Facilities, the Lessee shall within five (5) Business Days thereof notify the Trustee and the Bank, in writing, of such damage.

Section 6.6 Advances by Lessor or Trustee. In the event the Lessee shall fail to maintain the full insurance coverage required by this Agreement or shall fail to keep the Project in as reasonably safe condition as its operating conditions will permit, or shall fail to keep the Building in good repair and good operating condition, the Lessor or the Bank, after first notifying the Lessee of any such failure on the Lessee's part and after giving the Lessee a reasonable opportunity to cure such default, may, but shall be under no obligation to, take out the required policies of insurance and pay the premiums on the same, or make the required repairs; and all amounts so advanced therefor by the Lessor or the Bank shall become an additional obligation of the Lessee to the one making the advancement.

Section 6.7 Removal of Leased Equipment. The Lessor shall not be under any obligation to renew, repair, or replace any inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary Leased Equipment. In any instance where the Lessee, in the Lessee's sole discretion, determines that any items of Leased

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Equipment have become inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary, the Lessee may, subject to the consent of the Bank, remove such items of Leased Equipment from the Building and the Leased Land and, on behalf of the Lessor, sell, trade-in, exchange or otherwise dispose of them, as a whole or in part, without any responsibility or accountability to the Lessor therefor.

The removal from the Project of any portion of the Leased Equipment pursuant to the provisions of this Section shall not entitle the Lessee to any abatement or diminution of the amounts payable under Section 5.3 hereof. The Lessee will not remove, or permit the removal of any of the Leased Equipment from the Leased Land except in accordance with the provisions of this Section 6.7.

ARTICLE VII

DAMAGE, DESTRUCTION AND CONDEMNATION

Section 7.1 Disposition of Casualty Insurance and Condemnation Award Proceeds. Subject to the provisions of Section 6.4 hereof, and, if applicable in accordance with Section 6.4 hereof, the Credit Agreement, and as long as the Lessee is not in default under the terms of this Agreement, the Lessee may elect, in its discretion, whether to apply the proceeds of any casualty insurance coverage and/or condemnation awards to: (i) the repair, reconstruction or replacement of damaged, destroyed or injured property comprising the Project Facilities; or (ii) the redemption of Bonds pursuant to the applicable provisions of the Indenture. Absent timely direction from the Lessee as to the application of any casualty insurance coverage and/or condemnation awards or if the Lessee shall be in default under the terms of this Agreement, the proceeds thereof shall be applied to the extraordinary redemption of the Bonds at par plus accrued interest through the date of redemption. For purposes of the preceding sentence, "timely direction" shall mean 30 days after the Lessee has agreed, in connection with any damage to or condemnation of the Project Facilities, upon the settlement or payment with respect to any appraisement or adjustment of loss or damage, as appropriate.

Section 7.2 Condemnation or Failure of Title. Unless the Lessee shall exercise its option to purchase pursuant to the provisions of Section 11.2 hereof, in the event that title to, or the temporary use of the Project or any part thereof or the leasehold estate of the Lessee in the Project created by this Lease Agreement or any part thereof shall be taken under the exercise of power of eminent domain by any governmental body or by any person, firm or corporation acting under governmental authority, or in the event of a failure of title, the Lessee shall be obligated to continue to pay the amounts specified in
Section 5.3 hereof. Subject to any contrary provisions contained in Section 6.4 hereof, and, if applicable in accordance with Section 6.4 hereof, the Credit Agreement, the Lessor and the Lessee will cause the Net Proceeds received by them or any of them, from any award made in such eminent domain proceedings, or from the title insurance policy purchased pursuant to Section 3.2 hereof to be deposited with the Trustee and to be applied by the Trustee in one or more of the following ways as shall be directed in writing by the Lessee:

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(a) The restoration of the Building and improvements comprising part of the Project to substantially the same condition as they exist immediately prior to the exercise of the said power of eminent domain or failure of title.

(b) Redemption of the Bonds and payment of accrued interest thereon to the date of redemption.

If the Bonds have been fully paid (or provision for payment thereof has been made in accordance with the provisions of the Indenture) all such Net Proceeds shall be paid to the Lessee.

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

Section 7.3 Condemnation of Lessee Owned Property. The Lessee shall also be entitled to the Net Proceeds of any condemnation award or portion thereof made for damages to, or takings of its own property not included in the Project, provided that any Net Proceeds resulting from damages to, or a taking of all or any part of the leasehold estate of the Lessee in the Project created by this Lease Agreement shall be paid and applied in the manner provided in
Section 7.2 hereof.

ARTICLE VIII

SPECIAL COVENANTS

Section 8.1 No Warranty of Condition or Suitability by the Lessor. THE
LESSOR MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE CONDITION OR WORKMANSHIP OF ANY PART OF THE PROJECT, OR THAT THE PROJECT WILL BE SUITABLE FOR THE LESSEE'S PURPOSES OR NEEDS.

Section 8.2 Inspection of the Project. The Lessor, the Bank, the Trustee, and their or any of their duly authorized agents shall have the right at all reasonable times to enter at their own risk upon the site of the Project and examine and inspect the Project. The Lessor and its duly authorized agents shall also have such rights of access to the Project as may be reasonably necessary for the proper maintenance of the Project in the event of failure by the Lessee to perform the Lessee's obligations under Section 6.1 hereof. Any inspection of the Project by the Lessor, the Bank, the Trustee, and their or any of their duly authorized agents, shall be for the benefit of the Lessor, the Bank and the Trustee, respectively, and no third party shall have the right to rely on any such inspection.

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Section 8.3 Release of Certain Land. Notwithstanding any other provision of this Agreement, the parties hereto reserve the right at any time, and from time to time, but only with the prior written consent of the Bank, to amend this Agreement for the purpose of effecting the release of and removal from this Agreement and the leasehold estate created hereby of any part of the Leased Land with respect to which the Lessor proposes to grant an easement or convey fee title to a railroad, public utility or public body in order that railroad, utility services or roads may be provided for the Project, provided that, if at the time any such amendment is made, any of the Bonds are outstanding and unpaid there shall be deposited with the Trustee the following:

(a) An executed copy of the said amendment;

(b) A resolution of the Board of Directors of the Lessor (i) stating that the Lessor is not in default under any of the provisions of the Indenture or of this Lease Agreement, and the Lessee is not, to the knowledge of the Lessor, in default under any of the provisions of this Lease Agreement, (ii) stating an adequate legal description of that portion of the Leased Land to be released, and (iii) requesting the consent of the Bank to said amendment and the release of such property from the lien of the Indenture;

(c) A certificate of the Lessee approving such amendment and stating that the Lessee is not in default under any of the provisions of this Agreement;

(d) A copy of the instrument granting the easement or conveying the title to a railroad, public utility or public body.

Section 8.4 Purchase of Additional Machinery, Equipment, Furniture or Fixtures by the Lessor. The Lessor shall purchase additional machinery, equipment, furniture or fixtures to be used in connection with the Project upon the request of the Lessee and receipt from the Lessee of money sufficient to pay for such machinery, equipment, furniture or fixtures, whether such machinery, equipment, furniture or fixtures is to be purchased under the provisions of
Section 6.1 or 6.7 hereof or otherwise. Such machinery, equipment, furniture or fixtures shall constitute a part of the Leased Equipment.

Section 8.5 Further Assurance and Corrective Instruments. The Lessor and the Lessee shall, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Project hereby leased or intended so to be, or for carrying out the intention of, or facilitating the performance of this Lease Agreement.

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Section 8.6 [Reserved]

Section 8.7 Authorized Lessor Representative. Whenever under the provisions of this Lease Agreement the approval of the Lessor is required or the Lessor is required to take some action, such approval shall be made or such action shall be taken by the Authorized Lessor Representative, and the Lessee and the Trustee shall be authorized to act on any such approval or action; provided, however, that in any case in which the Bank's consent or approval is required, the Trustee shall also obtain the Bank's consent or approval before so acting.

Section 8.8 Authorized Lessee Representative. Whenever under the provisions of this Lease, the approval of the Lessee is required or the Lessee is required to take some action, such approval shall be made or such action taken by the Authorized Lessee Representative, and the Lessor and the Trustee shall be authorized to act on any such approval or action.

Section 8.9 Additional Covenants. The Lessee shall comply with each of the covenants on its part set forth in the Credit Agreement, and any other similar agreement entered into in connection with the issuance of any Substitute Letter of Credit and any and all modifications, alterations, amendments and supplements thereto.

Section 8.10 Additional Tax Covenants and Representations. (a) The Lessee covenants that it will not take any action, or fail to take any action, if any such action or failure to take action would adversely affect the exclusion from gross income of the interest on any Bond under Section 103 of the Code. The Lessee will not directly or indirectly use or permit the use (including the making of any investment) of any Bond Proceeds or any other funds of the Lessor or the Lessee, or take or omit to take any action, that would cause the Bonds to be "arbitrage bonds" within the meaning of Section 148(a) of the Code.

(b) The Lessee hereby covenants that in connection with complying with the requirement for payment of the Rebatable Arbitrage to the United States with respect to the Bonds, all of the gross Bond Proceeds (within the meaning of
Section 148(f) of the Code), other than gross Bond Proceeds on deposit in a bona fide debt service fund (within the meaning of Section 148(f)(4) of the Code), were expended on or prior to the Initial Rebate Computation Date.

(c) The Lessee acknowledges that the Lessor shall have the right at any time and in the sole and absolute discretion of the Lessor to obtain from the Lessee and the Trustee the information necessary to determine the amount required to be paid to the United States pursuant to Section 148(f) of the Code. Additionally, the Lessor may, with reasonable cause, (A) review or cause to be reviewed any determination of the amount to be paid to the United States made by or on behalf of the Lessee and (B) make or retain a Rebate Expert to make the determination of the amount to be paid to the United States. The Lessee hereby agrees to be bound by any such review or determination, absent manifest error, to pay the costs of such review, including without limitation the reasonable fees and expenses of counsel or a Rebate Expert retained by the Lessor, and to pay any Rebate that might be required as the result of any such review or determination.

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(d) Notwithstanding any provision of this subsection to the contrary, the Lessee shall be liable, and shall indemnify and hold the Lessor and the Trustee harmless against any liability, for payments due to the United States pursuant to Section 148(f) of the Code. Further, the Lessee specifically agrees that neither the Lessor nor the Trustee shall be held liable, or in any way responsible, and the Lessee shall indemnify and hold harmless the Trustee and Lessor against any liability, for any mistake or error in the filing of the payment or the determination of the amount due to the United States or for any consequences resulting from any such mistake or error. The provisions of this paragraph (vi) shall survive termination of this Agreement.

(e) The Lessee will aid and assist the Lessor in connection with preparing and submitting to the Internal Revenue Service a Form 8038 (or other applicable information reporting statement) at the time and in the form required by the Code.

(f) The Lessee will comply fully at all times with the Lessee's Arbitrage and Tax Certificate, and the Lessee will not take any action, or omit to take any action, which, if taken or omitted, respectively, would violate the Lessee's Arbitrage and Tax Certificate.

(g) The Project was not acquired or placed in service by the Lessee (determined in accordance with the provisions of Section 103 of the Code and applicable regulations thereunder) more than one (1) year prior to the date of issuance of the Bonds.

(h) Subsequent to fifteen (15) days prior to the date the Bonds are sold, the Lessee or any Related Person (or group of related persons which includes the Lessee) has not, or will not, as the case may be, guarantied, arranged, participated in, assisted with, borrowed the proceeds of, or leased facilities financed by obligations issued pursuant to Section 103 of the Code by any state or local governmental unit or any constituted authority empowered to issue obligations by or on behalf of any state or local governmental unit other than the Lessor. During the period commencing on the date of the sale of the Bonds and ending fifteen (15) days thereafter, there will be no obligations issued pursuant to Section 103 which are guarantied by the Lessee or any Related Person (or group of related persons which includes the Lessee) or which are issued with the assistance or participation of, or by arrangement with, the Lessee or any Related Person (or group of related persons which includes the Lessee) without the written opinion of Bond Counsel to the effect that the issuance of such obligation will not adversely affect their opinion as to the exclusion of interest on the Bonds from the gross income of the Purchaser under
Section 103 of the Code. Other than the Lessee or any Related Person (or group of related persons including the Lessee), no person has (i) guarantied, arranged, participated in, assisted with the issuance of, or paid any portion of the cost of the issuance of the Bonds, or (ii) provided any property or any franchise, trademark or trade name (within the meaning of Code Section 1253) which is to be used in connection with the Project.

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(i) The information contained in the Lessee's Arbitrage and Tax Certificate, setting forth the respective cost, economic life, ADR midpoint life, if any, under Rev. Proc. 87-56, 1987-2 C.B. 674, as supplemented and amended from time to time, and guideline life, if any, under Rev. Proc. 62-21, 1962-2 C.B. 118, as supplemented and amended from time to time, of each asset constituting the Project financed with the Bond Proceeds is true, accurate and complete.

(j) The Project does not share "substantial common facilities", within the meaning of Section 144(a)(9) of the Code, with any other facility financed by an outstanding tax-exempt bond.

(k) The Lessee has not taken and will not take any action and knows of no action that any other person has taken or intends to take, which would cause interest income on the Bonds to be includable in the gross income of the recipients thereof under Section 103 of the Code. The Lessee will take and will cause its officers, employees and agents to take all affirmative actions legally within its power necessary to ensure that the interest on the Bonds does not become includable in gross income of the recipient for federal income tax purposes under the Code (including, without limitation, the calculation of rebate required to preserve such exclusion).

(l) The Bonds will not be federally guaranteed within the meaning of
Section 149(b) of the Code. For purposes of this representation, no Principal User of the Project has entered into any leases of the Project to, or any sales or service contracts with, any federal government agency with the result that the Bonds are so federally guaranteed within the meaning of Section 149(b) of the Code.

ARTICLE IX

ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING; REDEMPTION OF BONDS

Section 9.1 Assignment and Subleasing. Subject to the consent of the Bank so long as the Letter of Credit Bank is not in default of its obligations under the Letter of Credit, this Lease may be assigned or subleased as a whole or in part, by the Lessee without the necessity of obtaining the consent of either the Lessor or the Trustee, provided that, however, no such assignment or further sublease shall cause the Project to no longer constitute a "project" under the Act, have any effect on the tax exempt status of the interest on the Bonds or shall relieve the Lessee from primary liability for any of the Lessee's obligations hereunder, and in the event of any such assignment or sublease, the Lessee shall continue to remain primarily liable for payment of the amounts specified in Section 5.3 hereof and for performance and observance of the other agreements on the Lessee's part herein provided to be performed and observed by the Lessee to the same extent as though no assignment or sublease had been made.

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Section 9.2 [Reserved]

Section 9.3 Restrictions on Mortgage or Sale of Project by Lessor. The Lessor agrees that, except for the Bank Mortgage and the assignment of this Lease Agreement and the rentals hereunder to the Trustee pursuant to the Indenture, it will not mortgage, sell, assign, transfer or convey its interest in the Project during the term of this Agreement, except as herein provided. If the laws of the State of Alabama at the time shall permit such action to be taken, nothing in this Section 9.3 shall prevent the consolidation of the Lessor with, or merger of the Lessor into, or transfer of its remaining interest in the Project or in this Lease Agreement as an entirety to, any public corporation whose income is not subject to taxation and which has corporate authority to exercise the Lessor's rights granted hereunder; provided: (i) that no such action shall be taken without the prior written consent of the Lessee, unless such action shall be required by law, (ii) that any such action shall be approved by the governing body of the City of Huntsville, Alabama, and (iii) that upon any such consolidation, merger or transfer, the due and punctual payment of the principal of, premium, if any, and interest on the Bonds according to their tenor, and the due and actual performance and observance of all the agreements and conditions of this Lease Agreement to be kept and performed by the Lessor shall be expressly assumed in writing by the corporation resulting from such consolidation or surviving such merger or to which the Project shall be transferred in its entirety.

Section 9.4 Redemption of Bonds. If at any time the Lessee shall deposit with the Trustee monies which, under any terms of the Indenture, are sufficient to redeem all or part of the principal amount of the Bonds and to pay any applicable redemption premium plus the fees and expenses of the Trustee in connection with such redemption, the Lessor, at the request of Lessee, shall forthwith take all steps necessary under the applicable redemption provisions of the Indenture to effect redemption of the Bonds requested by the Lessee on a redemption date selected by the Lessee.

Section 9.5 Reference to Bonds Ineffective After Bonds Paid. Upon payment in full of the Bonds (or provisions for payment thereof having been made in accordance with the provisions of the Indenture) and payment of all fees and charges of the Trustee, and reimbursement to the Letter of Credit Bank of all sums drawn under the Letter of Credit, together with interest thereon and all other sums due and payable to the Bank under the Credit Agreement, and the termination of the Letter of Credit, all references in this Lease Agreement to the Bonds and the Trustee and the Bank shall be ineffective and neither the Trustee, the Bank nor the holders of any of the Bonds shall thereafter have any rights hereunder, saving and excepting those that shall have theretofore vested.

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ARTICLE X

EVENTS OF DEFAULT AND REMEDIES

Section 10.1 Events of Default Defined. The following shall be "Events of Default" under this Lease Agreement and the terms "Event of Default" or "Default" shall mean, whenever they are used in this Lease Agreement, any one or more of the following events:

(a) Failure by the Lessee to pay when due the amounts required to be paid pursuant to Section 5.3 of this Lease Agreement;

(b) Failure by the Lessee to observe and perform any covenant, condition or agreement on the Lessee's part to be observed or performed, other than as referred to in paragraph (a) of this Section 10.1, for a period of thirty (30) days after written notice, specifying such failure and requesting that it be remedied, is given to the Lessee by the Lessor or the Trustee, unless the Trustee shall agree in writing to an extension of such time prior to its expiration; provided, however, if the failure stated in the notice cannot be corrected within the applicable period, the Trustee will not unreasonably withhold its consent to an extension of such time if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the failure is corrected;

(c) Any material warranty, representation or other statement by or on behalf of the Lessee in this Lease Agreement or in any certificate or other document executed by the Lessee furnished in connection with the issuance and sale of the Bonds, shall prove to be false or misleading in any material respect;

(d) The occurrence of an "Event of Default" under the Guaranty;

(e) The Lessee shall:

(i) apply for or consent to the appointment of a receiver, Trustee or liquidator of the Lessee, or of its properties or assets;

(ii) admit in writing its inability to pay its debts as they mature;

(iii) make a general assignment for the benefit of creditors;

(iv) be adjudicated a bankrupt or insolvent or;

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(v) file a voluntary petition in bankruptcy or take advantage of any bankruptcy, reorganization, insolvency, readjustment of debt, dissolution or liquidation law or statute or file an answer admitting the material allegations of a petition filed against the Lessee in any proceeding under any such law;

(f) An order, judgment or decree shall be entered, without application, approval or consent of the Lessee, by any court of competent jurisdiction, approving a petition seeking or appointing a receiver, Trustee, or liquidator of the Lessee and such order, judgment or decree shall continue unstayed and in effect for any period of sixty (60) days;

(g) A default in respect to any other indebtedness of the Lessee to the Trustee;

(h) The occurrence of any "Event of Default" as set forth in the Bond Purchase Agreement, and

(i) The Lessor's receipt of written notice from the Bank that the Bank has declared an Event of Default under the provisions of the Credit Agreement.

A default under this Lease Agreement shall also be a default under any other indebtedness of the Lessee to the Trustee, and a default under any other indebtedness of the Lessee to the Trustee shall be a default under this Lease Agreement. Any acceleration under this Lease Agreement shall also require an acceleration under any other indebtedness of the Lessee to the Trustee, and any acceleration under any other indebtedness of the Lessee to the Trustee shall require an acceleration under this Ageement.

Section 10.2 Remedies on Default. Subject to Section 10.6 hereof, whenever any event of default referred to in Section 10.1 hereof shall have happened and be continuing, the Lessor may take any one or more of the following remedial steps:

(a) By written notice to the Lessee, the Lessor may declare all installments of rent payable under Section 5.3 hereof for the remainder of the Lease Term to be immediately due and payable, whereupon the same shall become immediately due and payable.

(b) The Lessor or the Trustee on its own behalf or on behalf of the Lessor, may re-enter and take possession of the Project without terminating this Lease Agreement, and sublease the Project for the account of the Lessee, holding the Lessee liable for the difference in the rent and other amounts payable by such sublessee in such subleasing and the rents and other amounts payable by the Lessee hereunder.

(c) The Lessor or the Trustee on its own behalf or on behalf of the Lessor may terminate the Lease Term, exclude the Lessee from possession of the Project and use its best efforts to lease the Project to another party for the account of the Lessee, holding the Lessee liable for all rent and other payments due up to the effective date of such leasing and for the difference in the amounts payable by such new lessee and the amounts payable by the Lessee under this Lease Agreement.

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(d) In the event any of the Bonds shall at the time be outstanding and unpaid, the Lessor may have access to, and inspect and examine and make copies of the Lessee's books and records and all of its accounts.

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

The Lessee acknowledges and understands that any lease or sublease agreement entered into by the Lessor or the Trustee pursuant to either of Subsections (b) or (c) of this Section 10.2 shall, if the Lessor and the Trustee deem it advisable, grant an option to purchase the Project to the new lessee or the sublessee on the terms and conditions acceptable to the Lessor and the Trustee.

Any amounts collected pursuant to action taken under this Section 10.2 shall be paid to the Trustee and applied in accordance with the provisions of the Indenture.

It is further understood and agreed that the Lessor will follow the instructions of the Bank or the Trustee in the election or pursuit of any remedies herein vested in it.

Section 10.3 No Remedy Exclusive. Subject to Section 10.6 hereof, no remedy herein conferred upon or reserved to the Lessor 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 statute. No delay or omission to exercise any right or power shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Lessor to exercise any remedy reserved to it in this Article X, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. Such rights and remedies of the Lessor hereunder shall also extend to the Trustee, and the Trustee and the holders of the Bonds, subject to the provisions of the Indenture, shall be entitled to the benefit of all covenants and agreements hereof.

Section 10.4 Agreement to Pay Attorneys' Fees and Expenses. In the event the Lessee should default under any of the provisions of this Lease Agreement, and the Lessor or the Trustee should employ attorneys or incur other expenses for the collection of amounts payable hereunder or the enforcement, performance or observance of any obligation or agreement on the part of the Lessee herein set forth, the Lessee agrees, on demand therefor, to pay to the Lessor or the Trustee the reasonable fee of such attorney or attorneys and such other expenses so incurred by the Lessor or the Trustee.

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Section 10.5 No Additional Waiver Implied by One Waiver. In the event any obligation in this Lease Agreement is 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.

Section 10.6 Remedial Rights Assigned to Trustee. All rights and remedies conferred upon or reserved to the Lessor in this Article X shall, upon the execution and delivery of the Indenture, be deemed to have been assigned to the Trustee and the Trustee shall have the exclusive right to exercise such rights and remedies in the same manner and under the limitations and conditions that the Trustee is entitled to exercise rights and remedies upon the occurrence of an Event of Default pursuant to Article 10 of the Indenture.

ARTICLE XI

OPTIONS IN FAVOR OF LESSEE

Section 11.1 Options to Terminate. The Lessee shall have the following options to cancel or terminate the term of this Lease Agreement:

(a) At any time prior to full payment of the Bonds (or provisions for payment thereof having been made in accordance with the provisions of the Indenture), the Lessee may terminate the term of this Lease Agreement and exercise the option to purchase granted in Section 11.2 hereof by paying to the Trustee for the account of the Lessor an amount of cash which will be sufficient to pay, retire and redeem all the outstanding Bonds in accordance with the provisions of the Indenture (including, without limiting the generality of the foregoing, principal, interest to maturity, or earliest applicable redemption date, as the case may be, premium, if any, expenses of redemption and Trustee's fees and expenses), and, in case of redemption, making arrangements satisfactory to the Trustee for the giving of the required notice of redemption;

(b) At any time after full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture), the Lessee may terminate the term of this Lease Agreement by giving the Lessor notice in writing of such termination and such termination shall forthwith become effective.

Section 11.2 Option to Purchase Project Prior to Payment of the Bonds. The Lessee shall have, and is hereby granted the option to purchase the Project prior to the full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture), if any of the following shall have occurred:

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(a) The Project, or any part thereof, shall have been damaged or destroyed to such extent that, in the opinion of the Lessee expressed in writing, (i) it cannot be reasonably restored, within a period of four months, to the condition thereof immediately preceding such damage or destruction, or
(ii) the Lessee is thereby prevented from carrying on its normal operations at the Project for a period of four months or (iii) the cost of restoration thereof would exceed by more than $100,000 the Net Proceeds of insurance carried thereon pursuant to the requirements of Section 6.4 hereof, plus the amounts for which the Lessee is self-insured with respect to deductible amounts permitted under
Section 6.5 hereof;

(b) Title to, or the temporary use of the Project, or any part thereof, or the leasehold estate of the Lessee 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 results, or is likely to result in the Lessee thereby being prevented from carrying on its normal operations therein for a period of four months or more;

(c) 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 Lessee in good faith, this Lease shall have become void or unenforceable or impossible of performance in accordance with the intent and purposes of the parties as expressed in this Lease Agreement, or unreasonable burdens or excessive liabilities shall have been imposed on the Lessor or the Lessee including without limitation federal, state or income or other taxes not being imposed on the date of this agreement;

(d) The Project or a material portion thereof is adjudged by a court of competent jurisdiction to be a public nuisance and operation of the Project or a material portion thereof is permanently enjoined, and such decision has become final or, if appealed, affirmed upon such appeal and the decision upon such appeal has become final.

To exercise such option, the Lessee shall, within thirty (30) days following the event authorizing the exercise of such option, give written notice to the Lessor and to the Trustee and shall specify therein the date of closing such purchase, which date shall not be less than forty-five (45) nor more than ninety (90) days from the date such notice is mailed, and in case of a redemption of the Bonds in accordance with the provisions of the Indenture, shall make arrangements satisfactory to the Trustee for the giving of the required notice of redemption for the redemption of the Bonds on the earliest practicable date either on or following the closing of such purchase. The purchase price payable by the Lessee in the event of its exercise of the option granted in this Section shall be the sum of the following:

(i) an amount of money which will be sufficient to pay to the Trustee the principal of the then outstanding Bonds plus accrued interest thereon to the redemption date; plus

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(ii) an amount of money equal to all the costs and expenses incurred by the Trustee in connection with such purchase; plus

(iii) an amount payable to the Lessor equal to the sum of one-tenth of one percent (.1%) of the original principal amount of the Bonds (i.e., $7,500,000) for each year (or portion of a year) that the Lease Agreement remains in effect, plus all costs and expenses incurred by the Lessor relative to the exercise of the option.

In the event of the exercise of the option granted in this section, any Net Proceeds of insurance or condemnation after the payment of the required redemption price shall be paid to the Lessee.

Section 11.3 Option to Purchase Project After Payment of the Bonds. The Lessee shall have, and is hereby granted the option to purchase the Project at any time during the Lease Term or within forty-five (45) days thereafter, following full payment of the Bonds (or provision for payment thereof having been made in accordance with the provisions of the Indenture) or at any time at which the Lessee shall have the option to terminate this Lease Agreement pursuant to Section 11.1(a) hereof, by paying to the Lessor a purchase price in an amount equal to the sum of one-tenth of one percent (.1%) of the original principal amount of the Bonds (i.e., $7,500,000) for each year (or portion of a year) that the Lease Agreement remains in effect, plus all costs and expenses incurred by the Lessor relative to the exercise of the option. To exercise this option granted in this Section 11.3, the Lessee shall notify the Lessor of the Lessee's intention so to exercise such option no less than forty-five (45), nor more than ninety (90) days prior to the proposed date of purchase and shall, on the date of purchase, pay such purchase price to the Lessor.

Section 11.4 Option to Purchase Unimproved Land. Prior to payment in full of the Bonds, the Lessee shall have, and is hereby granted, the option to purchase any Unimproved part of the Leased Land at any time, and from time to time, at and for a purchase price equal to the fair market value thereof provided that it furnishes the Lessor with the following:

(a) A notice in writing setting forth (i) an adequate legal description of that portion of the Leased Land with respect to which such option is to be exercised, and (ii) a statement that the Lessee intends to exercise its option to purchase such portion of the Leased Land on a date stated, which shall not be less than forty-five (45), nor more than ninety (90) days from the date of such notice, and (iii) a statement that the use to which such portion of the Leased Land will be devoted will be in furtherance of the purpose for which the Lessor was organized;

(b) A certificate of an Independent Engineer acceptable to the Trustee, dated no more than ninety (90) days prior to the date of the purchase, stating that, in the opinion of the person signing such certificate, (i) the portion of the Leased Land with respect to which the option is exercised is not needed for the operation of the Project for the purposes hereinabove stated, and (ii) the purchase will not impair the usefulness of the Building and will not destroy the means of ingress thereto and egress therefrom;

35

(c) The written consent of the Trustee and the Bank; and

(d) An amount of money equal to the fair market value of the real property to be purchased or as agreed.

Upon receipt of the notice, certificate and money required in this section to be furnished to it by the Lessee, the Lessor will promptly deliver the same to the Trustee, will cause the Trustee to apply said money as a partial redemption of the Bonds in accordance with the terms of the Indenture and will secure from the Trustee a release from the security interest afforded by the terms of the Indenture of such portion of the Leased Land with respect to which the Lessee shall have exercised the option granted in this section. In the event the Lessee shall exercise such option, the Lessee shall not be entitled to any abatement or diminution of the amounts payable under Section 5.3 hereof.

The Lessee may, at the Lessee's own expense, connect utility and other similar facilities serving the Project to utility and other similar facilities serving real property adjacent to or near the Leased Land, or partly on such adjacent real property and partly on the Leased Land, but only if the Lessee furnishes the Lessor and the Trustee a certificate by an Independent Engineer who is acceptable to the Trustee, certifying that such connection of utility or other similar facilities will not unreasonably interfere with the use of the Project.

Section 11.5 Conveyance on Exercise of Option to Purchase. At the closing of the purchase pursuant to the exercise of any option to purchase granted herein, the Lessor will, upon receipt of the purchase price, deliver to the Lessee documents conveying to the Lessee good and marketable title to the property with respect to which such option was exercised, as such property then exists, subject to the following: (i) those liens and encumbrances, if any, to which title to said property was subject when conveyed to the Lessor; (ii) those liens and encumbrances created by the Lessee, or to the creation or suffering of which the Lessee consented; (iii) those liens and encumbrances resulting from the failure of the Lessee to perform or observe any of its obligations in this Lease Agreement; and (iv) Permitted Encumbrances other than the Indenture and this Lease Agreement.

Section 11.6 Effect of Exercise on Options. Upon the exercise of any option provided in this Article XI, the matured or accrued obligations of the Lessee to the Lessor hereunder not theretofore performed, shall survive.

36

Section 11.7 Relative Position of Options and Indenture. The Options granted to the Lessee in this Article XI, shall be and remain prior and superior to the Indenture and may be exercised whether or not the Lessee is in default hereunder, provided that such default will not result in the non-fulfillment of any condition to the exercise of such option.

ARTICLE XII

MISCELLANEOUS

Section 12.1 Surrender of Project. Except as otherwise expressly provided in this Lease Agreement, at the expiration or sooner termination of the term of this Lease Agreement, the Lessee will surrender possession of the Project peaceably and promptly to the Lessor in as good condition as at the commencement of the Lease Term, excepting only loss by fire or other casualty covered by insurance, and ordinary wear, tear and obsolescence.

Section 12.2 Notices. All notices, certificates or other communications hereunder shall be sufficiently given and shall be deemed given when delivered or mailed by registered or certified mail, postage prepaid, addressed as follows:

If to the Lessor:          The Industrial Development Board
                                   of the City of Huntsville
                           P.O. Box 408
                           Huntsville, AL 35804

If to Lessee:              Central CVPC Corporation
                           Attn: Mr. Albert T. Sabol
                           451 N. Cannon Avenue
                           Lansdale, PA 19446

If to Trustee:             First Union National Bank
                           123 South Broad Street
                           Philadelphia, Pennsylvania 19109
                           Attention: Corporation Trust Administration

If to the Bank:            Congress Financial Corporation
                           1133 Avenue of the Americas
                           New York, New York 10036
                           Attention: Andrew W. Robin

37

A duplicate copy of each notice, certificate, or other communication given hereunder by either the Lessor or the Lessee to the other shall also be given to the Trustee. The Lessor, the Lessee and the Trustee may, by notice given hereunder, designate any further or different addresses to which subsequent notices, certificates or other communications shall be sent.

Section 12.3 Binding Effect. This Lease Agreement shall inure to the benefit of and shall be binding upon the Lessor, the Lessee, and their respective successors and assigns, subject, however, to the limitations of
Section 9.1, 9.2 and 9.5 hereof. To the extent provided herein and in the Indenture, the Trustee and the Bank shall be deemed to be third party beneficiaries hereof, but nothing herein contained shall be deemed to create any right in, or for the benefit of, any other person who is not a party hereto.

Section 12.4 Severability. 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 provisions hereof.

Section 12.5 Amendments, Changes and Modifications. Subsequent to the issuance of the Bonds and prior to their payment in full (or provision for the payment thereof having been made in accordance with the provisions of the Indenture), this Lease Agreement may not be effectively amended, changed, modified, altered or terminated except in accordance with the Indenture.

Section 12.6 Execution in 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 12.7 Recording and Filing. The Lessee will take all actions that at the time and from time to time may be necessary (or, in the opinion of the Trustee, may be necessary) to perfect, preserve, protect and secure the interests of the Lessor and the Trustee, or either, in and to the Project, this Agreement and the revenues and receipts derived by the leasing or sale of the Project, including, without limitation, the filing of all financing and continuation statements that may be required under the Alabama Uniform Commercial Code.

Section 12.8 Net Lease. This Agreement shall be deemed and constructed to be a "net lease", and the Lessee shall pay absolutely net during the term hereof the rent and all other payments required hereunder free of any deductions, without abatement, deduction or set-off other than those herein expressly provided.

Section 12.9 Certain Tax Matters. The Lessor and the Lessee acknowledge and agree that it is their mutual intention that the Lessee, for federal and state income tax purposes, will be entitled to all deductions and credits with respect to the Project (including, but not limited to, capital cost recovery and investment credits) and that for such purposes this Lease Agreement shall be deemed to be a financing of the Project. The Lessor does hereby make the election available under Section 144(a)(4) of the Code.

38

Section 12.10 Date of this Agreement. The date of this Agreement is intended as and for a date for the convenient identification of this Agreement and is not intended to indicate that this Agreement was executed or delivered on such date.

Section 12.11 Applicable Law. This Lease Agreement shall be governed by and construed in accordance with the laws of the State.

Section 12.12 No Charge Against Lessor's Credit. No provisions hereof shall be construed to impose a charge against the general credit of the Lessor or any personal or pecuniary liability upon the Lessor, its officers, directors, or of the City of Huntsville. Nothing set forth in this Section 12.12, however, shall relieve the Lessor from the observance and performance of the several covenants and agreements on its part herein set forth.

Section 12.13 Captions. The captions or headings in this Lease Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or sections of this Agreement.

Section 12.14 Relationship of Documents. So long as the Letter of Credit remains in effect and the Letter of Credit Bank is not in default of its obligations thereunder, (i) this Agreement shall be subject and subordinate to the Bank Mortgage, (ii) to the extent that any provision of the Credit Agreement or the Bank Mortgage is inconsistent with any provision of this Agreement, such provision of the Credit Agreement and the Bank Mortgage shall govern and control, (iii) the Lessor hereby agrees to give notice in writing to the Bank of any Event of Default by the Lessee under the Lease that is known to the Lessor, and, upon receipt of any such notice, the Bank shall have the right, but not the obligation, to cure any such Event of Default for the account of the Lessee within ninety (90) days after receipt of such notice, during which time the Lessor or the Trustee shall not take any steps to enforce or seek to enforce, directly or indirectly, any rights pursuant to this Agreement; (iv) the Lessor and the Trustee shall allow the Bank to enter the Leased Land and the Building for the purpose of repossessing, removing, selling or otherwise dealing with any of its personal property collateral and such license shall continue without change from the date the Bank enters the Leased Land or the Building for so long as the Bank deems necessary for such purposes; (v) notwithstanding any provision to the contrary contained in this Agreement, the Bank (or its designee or a purchaser at a trustee's sale, as the case may be), at its option pursuant to the Bank Mortgage or in lieu of foreclosure thereunder, shall be allowed to acquire absolute ownership of the interest of the Lessee or the Lessor in this Agreement, and if the Bank elects to acquire (or have its designee acquire or any party at a trustee's sale acquire) such leasehold or other estate, the Bank (or such designee or other party) will thereupon be recognized as the Lessee hereunder and be entitled to all of the Lessee's rights hereunder, including, without limitation, the right of the Lessee to exercise the option to purchase the Project or the Lessor's rights hereunder, as the case may be, in accordance with the terms of this Agreement; and (vi) if the Bank (or its designee) becomes the Lessee under this Agreement, the Bank shall be allowed to sublease or assign its rights hereunder to a third party who shall be authorized to use the Project for any lawful purpose and such assignment or sublease shall release and relieved the Bank (or its designee) of all obligations hereunder, without releasing the Lessee from any and all liability and responsibility hereunder or under the Credit Agreement or Bank Mortgage.

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Section 12.15 Restatement of Lease. This agreement is intended to amend and restate in its entirely the 1997 Lease and serve as a substitute therefor.

IN WITNESS WHEREOF, the Lessee has caused this Agreement to be executed by one of its duly authorized officers, the 29th day of October, 1998, and the Lessor has caused this Agreement to be executed in its corporate name and its corporate seal to be hereunder affixed and attested by its duly authorized officers, the 28th day of October, 1998, all as of the date and year first above written.

40

THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF HUNTSVILLE

                             By: /s/ W.F. Sanders, Jr.
                                 -------------------------------------------
                                 Its Vice Chairman

ATTEST:


Secretary

ACKNOWLEDGMENT OF BOARD

STATE OF ALABAMA )

MADISON COUNTY )

I, the undersigned, a Notary Public in and for said County in said State, hereby certify that W.F. Sanders, Jr., whose name as Vice Chairman of The Industrial Devlopment Board of the City of Huntsville, 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 this 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 official seal this the 28th day of October, 1998.

/s/ Theresa Cornelius
--------------------------------
Notary Public
My Commission Expires: 11/14/01

41

CENTRAL CPVC CORPORATION, an
Alabama corporation

                                          By: /s/ Albert T. Sabol
                                             ----------------------------------
                                             Its Executive Vice President

ATTEST:


Secretary

ACKNOWLEDGMENT OF LESSEE

STATE OF PENNSYLVANIA )

COUNTY OF PHILADELPHIA )

I, the undersigned, a Notary Public in and for said County in said State, hereby certify that Albert T. Sabol, whose name as Executive Vice President of Central CPVC Corporation, an Alabama 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 this 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 official seal this the 29th day of October, 1998.

/s/ Astrid Karnas
---------------------------------
Notary Public
My Commission expires: 12/24/2001


EXHIBIT 10(y)


THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE

and

FIRST UNION NATIONAL BANK
as Trustee


TRUST INDENTURE


Dated as of October 1, 1998


$7,500,000
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE TAX-EXEMPT VARIABLE RATE DEMAND/FIXED RATE
REFUNDING REVENUE BONDS
(CENTRAL CPVC CORPORATION PROJECT)

SERIES OF 1998

TABLE OF CONTENTS*

Page

ARTICLE I

DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS

Section 1.01.       Definitions..............................................4
Section 1.02.       Content of Certificates and Opinions....................17
Section 1.03.       Interpretation..........................................18

ARTICLE II

THE BONDS

Section 2.01.       Authorization of Bonds..................................18
Section 2.02.       Terms of Bonds: Interest on the Bonds...................19
Section 2.03.       Execution of Bonds......................................21
Section 2.04.       Authentication..........................................21
Section 2.05.       Form of Bonds...........................................22
Section 2.06.       Transfer of Bonds ......................................23
Section 2.07.       Exchange of Bonds.......................................23
Section 2.08.       Bond Register...........................................23
Section 2.09.       Temporary Bonds.........................................23
Section 2.10.       Bonds Mutilated, Lost, Destroyed or Stolen..............24
Section 2.11.       Cancellation and Destruction of Surrendered Bonds.......24
Section 2.12.       Acts of Bondholders; Evidence of Ownership..............24
Section 2.13.       Book-Entry Bonds; Securities Depository.................25

ARTICLE III

ISSUANCE OF BONDS; APPLICATION OF PROCEEDS

Section 3.01. Issuance of the Bonds.........................................26
Section 3.02. Validity of Bonds.............................................26
Section 3.03. Disposition of Proceeds of the Bonds and Other Amounts........26

*This Table of Contents is for convenience only, does not constitute a part of this Indenture and shall not be considered as having any bearing upon any interpretation of this Indenture.

i

ARTICLE IV

REDEMPTION OF BONDS BEFORE MATURITY

Section 4.01.       Extraordinary and Mandatory Redemption...................27
Section 4.02.       Optional Redemption......................................29
Section 4.03.       Notice of Redemption.....................................29
Section 4.04.       Interest on Bonds Called for Redemption..................30
Section 4.05.       Cancellation.............................................30
Section 4.06.       Partial Redemption of Bonds..............................30
Section 4.07.       Payment of Redemption Price with
                    Available Moneys; Consent of Letter of Credit Bank
                    to Optional Redemption...................................31

ARTICLE V

CONVERSION OF INTEREST RATE; DEMAND PURCHASE OPTION

Section 5.01.       Conversion of Interest Rate on Conversion Date...........31
Section 5.02.       Delivery of Bonds After Conversion Date .................33
Section 5.03.       Mandatory Purchase Upon Substitution of Letter of Credit.33
Section 5.04.       Demand Purchase Option...................................34
Section 5.05.       Funds for Purchase of Bonds..............................35
Section 5.06.       Delivery of Purchased Bonds..............................37
Section 5.07.       Sale of Bonds by Remarketing Agent.......................37
Section 5.08.       Delivery of Proceeds of Sale of
                    Purchased Bonds..........................................38
Section 5.09.       Duties of Trustee and Tender Agent with
                    Respect to Purchase of Bonds.............................38
Section 5.10.       No Purchases or Sales After Certain Defaults.............39

ARTICLE VI

REVENUES AND FUNDS

Section 6.01.       Creation of the Bond Fund................................39
Section 6.02.       Payments into the Bond Fund..............................39
Section 6.03.       Use of Moneys in the Bond Fund...........................40
Section 6.04.       Custody of Separate Trust Fund...........................40
Section 6.05.       [Reserved]...............................................40
Section 6.06.       [Reserved]...............................................41
Section 6.07.       [Reserved]...............................................41

                                       ii

Section 6.08.       [Reserved]...............................................41
Section 6.09.       Nonpresentment of Bonds..................................41
Section 6.10.       Moneys to be Held in Trust...............................42
Section 6.11.       Repayment to the Bank and the Company
                    from the Bond Fund.......................................42
Section 6.12.       Letter of Credit.........................................42
Section 6.13.       [Reserved]...............................................43
Section 6.14.       Investment of Moneys in Funds............................45

ARTICLE VII

PARTICULAR COVENANTS

Section 7.01.       Punctual Payment.........................................45
Section 7.02.       Extension of Payment of Bonds............................46
Section 7.03.       Against Encumbrances.....................................46
Section 7.04.       Power to Issue Bonds and Make Pledge and Assignment......46
Section 7.05.       Accounting Records and Financial Statements..............46
Section 7.06.       Reserved.................................................47
Section 7.07.       Other Covenants..........................................47
Section 7.08.       Reserved.................................................47
Section 7.09.       Further Assurances.......................................47

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS

Section 8.01.       Events of Default........................................48
Section 8.02.       Acceleration.............................................49
Section 8.03.       Other Remedies...........................................50
Section 8.04.       Legal Proceedings by Trustee.............................51
Section 8.05.       Discontinuance of Proceedings by Trustee.................51
Section 8.06.       Bondholders May Direct Proceedings.......................51
Section 8.07.       Limitations on Actions by Bondholders....................52
Section 8.08.       Trustee May Enforce Rights Without
                    Possession of Bonds......................................52
Section 8.09.       Delays and Omissions Not to Impair Rights................52
Section 8.10.       Application of Moneys in Event of Default................52
Section 8.11.       Trustee and Bondholders Entitled to All
                    Remedies Under Act: Remedies Not Exclusive...............53
Section 8.12.       Trustee's Right to Receiver..............................53

iii

Section 8.13. Subrogation Rights of Bank...............................53
Section 8.14. Waiver of Default........................................54

ARTICLE IX

THE TRUSTEE; THE TENDER AGENT
AND THE REMARKETING AGENT

Section 9.01.       Duties, Immunities and Liabilities of Trustee............54
Section 9.02.       Merger or Consolidation..................................55
Section 9.03.       Liability of Trustee.....................................56
Section 9.04.       Right of Trustee to Rely on Documents....................56
Section 9.05.       Preservation and Inspection of Documents.................57
Section 9.06.       Compensation.............................................57
Section 9.07.       The Tender Agent.........................................57
Section 9.08.       Qualifications of Tender Agent...........................58
Section 9.09.       Qualifications of Remarketing Agent;
                    Resignation; Removal.....................................58
Section 9.10.       Construction of Ambiguous Provisions.....................59

ARTICLE X

MODIFICATION OR AMENDMENT OF THE INDENTURE

Section 10.01.      Amendments Permitted.....................................59
Section 10.02.      Effect of Supplemental Indenture.........................59
Section 10.03.      Trustee Authorized to Join in Amendments
                    and Supplements; Reliance on Counsel.....................60

ARTICLE XI

DEFEASANCE

Section 11.01.      Discharge of Indenture...................................60
Section 11.02.      Discharge of Liability on Bonds..........................61
Section 11.03.      Deposit of Money or Securities with Trustee..............61
Section 11.04.      Payment of Bonds After Discharge of Indenture............62

iv

ARTICLE XII

MISCELLANEOUS

Section 12.01.      Liability of Board Limited to Revenues..................62
Section 12.02.      Limitation of Liability of Directors,
                     Etc. of Board..........................................63
Section 12.03.      Covenant Not to Sue.....................................63
Section 12.04.      Successor Is Deemed Included in All
                    References to Predecessor...............................63
Section 12.05.      Limitation of Rights to Parties, Bank,
                    Company and Bondholders.................................63
Section 12.06.      Waiver of Notice........................................64
Section 12.07.      Severability of Invalid Provisions......................64
Section 12.08.      Notices.................................................64
Section 12.09.      Evidence of Rights of Bondholders.......................65
Section 12.10.      Disqualified Bonds......................................66
Section 12.11.      Money Held for Particular Bonds.........................66
Section 12.12.      Funds...................................................66
Section 12.13.      Payments Due on Days other than Business Days...........67
Section 12.14.      Execution in Several Counterparts.......................67
Section 12.15.      Notices to Rating Agency................................67
Section 12.16.      Continuing Disclosure...................................67

Exhibit "A" - Floating Rate Form of Bond...................................A-1 Exhibit "B" - Fixed Rate Form of Bond......................................B-1

v

This TRUST INDENTURE, made and entered into as of October 1, 1998, by and between THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE, a public corporation organized under the laws of the State (the "Board") and FIRST UNION NATIONAL BANK, a national banking association, as trustee (the "Trustee") and tender agent (the "Tender Agent");

W I T N E S S E T H:

(Capitalized terms not otherwise defined shall have the meanings ascribed to them in Section 1.01 of this Indenture.)

WHEREAS, proceeds of the Bonds are being issued to refund the outstanding principal amount of the Board's Industrial Development Revenue Bonds (Central CPVC Corporation Project) Series 1997 Bonds dated December 1, 1997 (the "Series 1997 Bonds"). The Series 1997 Bonds were issued in the principal amount of $7,500,000 and are now outstanding in the same amount. The Series 1997 Bonds were issued to finance the costs of acquiring, constructing and equipping a certain manufacturing facility (the "Project") that was leased to Central CPVC Corporation (the "Company") by the Board pursuant to a Lease Agreement dated as of December 1, 1997 (the "1997 Lease Agreement"); and

WHEREAS, when the Bonds are issued, the Series 1997 Bonds will be immediately paid and retired and the 1997 Lease Agreement will be amended and restated. The Board continues to own the Project and will lease the Project to the Company pursuant to an Amended and Restated Lease Agreement dated as of October 1, 1998, which amends and restates the 1997 Lease Agreement; and

WHEREAS, pursuant to the Amended and Restated Lease Agreement dated as of October 1, 1998 (the "Agreement") the Company will agree to make lease payments to the Trustee on behalf of the Board at times and in amounts sufficient to pay debt service on the Bonds and to pay the purchase price of Bonds tendered for purchase pursuant to the optional or mandatory tender provisions of this Indenture; and

WHEREAS, the Board has determined to assign, transfer and pledge unto the Trustee; as trustee under this Indenture, all right, title and interest of the Board (except for certain reserved rights described herein) in and to the Agreement and sums payable thereunder; and

WHEREAS, the Company will cause Congress Financial Corporation (the "Bank") to arrange for First Union National Bank (the "Letter of Credit Bank") to issue an irrevocable letter of credit in favor of the Trustee to provide for payment of debt service on the Bonds and to pay the purchase price of Bonds tendered for purchase pursuant to the optional or mandatory tender provisions of the Indenture. The initial letter of credit to be delivered to the Trustee and any substitute letter of credit delivered pursuant to the Indenture are referred to as the "Letter of Credit"; and

6

WHEREAS, the Bank has agreed to guarantee to the Letter of Credit Bank the performance by the Company of its obligations to the Letter of Credit Bank; and

WHEREAS, the Bank will arrange for the initial Letter of Credit pursuant to the Loan and Security Agreement by and among Congress Financial Corporation, as Lender, and Central Sprinkler Company, Central Castings Corporation, Central CPVC Corporation, as Borrowers, and Central Sprinkler Corporation and Central Sprinkler Export Corporation, as Guarantors, dated September 18, 1998 (the "Loan Agreement") between the Bank and the Company whereby the Company has agreed to, among other things, reimburse the Bank for any payments to the Letter of Credit Bank to reimburse the Letter of Credit Bank for draws made by the Trustee on the Letter of Credit and for other costs, expenses and charges, as specified in the Loan Agreement; and

WHEREAS, as security for the Company's obligations under the Loan Agreement, the Company has executed a Fee and Leasehold Mortgage with Security Agreement and Assignment of Leases and Rents dated September 18, 1998 (together with all amendments, modifications and restatements thereof, the "Bank Mortgage") in favor of the Bank, whereby the Bank has a mortgage on and security interest in the Project, the leasehold interest of the Company, and certain other collateral; and

WHEREAS, the Bonds will be further secured by the unconditional guaranty of payment of principal of and interest on the Bonds by Central CPVC Corporation, an Alabama corporation; and

WHEREAS, the Bonds are the limited obligations of the Lessor payable solely out of (a) payments made pursuant to the Lease Agreement and the Bond Guaranty, and (b) money received from a draw on the Letter of Credit. The Trustee will not have a mortgage on or security interest in the Project. The Bank Mortgage is for the sole benefit of the Bank; and

WHEREAS, the Bonds never shall constitute the debt or indebtedness of the City of Huntsville (the "City") or the State of Alabama (the "State"), within the meaning of any provision or limitation of the constitution or statutes of Alabama, and shall not constitute or give rise to a pecuniary liability of the Lessor, its members or the City or the State or a charge against its or their general credit or the taxing powers of the City or the State; and

WHEREAS, execution and delivery of this Indenture and the issuance of the Bonds hereunder and under the Act have been duly and validly authorized by resolution of the Board of the Board duly adopted prior to such execution and delivery,

NOW, THEREFORE, in consideration of the premises and of the covenants hereinafter set forth, the parties hereto do hereby covenant, agree and bind themselves as follows, to-wit:

7

GRANTING CLAUSES AND AGREEMENTS

NOW, THEREFORE, in consideration of the premises and the acceptance by the Trustee of the trusts hereby created and of the purchase and acceptance of the Bonds issued and sold by the Board under this Indenture by those who shall own the same from time to time, and of the sum of one dollar, lawful money of the United States, duly paid to the Board by the Trustee at or before the execution and delivery of this Indenture, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and for the purpose of fixing and declaring the terms and conditions upon which the Bonds are to be executed, authenticated, issued, delivered and accepted by all persons who shall from time to time be or become owners thereof; and in order to secure the payment of the principal of and premium (if any) and interest on, and purchase price of, the Bonds according to their tenor and effect and the performance and observance by the Board of all the covenants expressed or implied herein and in the Bonds and the payment and performance of all other of the Board's obligations, the Board does hereby grant, bargain, sell, convey, pledge and assign, without recourse, unto the Trustee and unto its successors in the trust forever (and to the extent provided in Section 8.13 hereof, the Bank as is hereinafter defined), and grants to the Trustee and to its successors in the trust (and to the extent provided in Section 8.13 hereof, the Bank as is hereinafter defined), a security interest in all of the following:

GRANTING CLAUSE FIRST

All right, title and interest of the Board in and to the Agreement and the security granted thereunder and under the Collateral Documents and the other Bond Documents, including, but not limited to: (i) the obligation of the Company under Article III of the Agreement to make payments at such times and in such amounts as are necessary to pay the principal of, interest and redemption premium, if any, on the Bonds; (ii) the present and continuing right to make claim for, collect, receive and receipt for any of the sums, amounts, income, revenues, issues and profits and any other sums of money payable or receivable under the Agreement, the Collateral Documents and the other Bond Documents;
(iii) the right to bring actions and proceedings thereunder or for the enforcement thereof; and (iv) the right to do any and all things which the Board is or may become entitled to do under the Agreement, the Collateral Documents and the other Bond Documents.

GRANTING CLAUSE SECOND

All right, title and interest of the Board in and to all moneys and securities from time to time held by the Trustee under the terms of this Indenture.

8

GRANTING CLAUSE THIRD

Any and all other property rights and interests of every kind and nature from time to time hereafter by delivery or by writing of any kind granted, bargained, sold, alienated, demised, released, conveyed, assigned, transferred, mortgaged, pledged, hypothecated or otherwise subjected hereto, as and for additional security herewith, by the Company or any other person on its behalf or with its written consent or by the Board or any other person on its behalf or with its written consent, and the Trustee is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof.

EXPRESSLY RESERVING, however, to the Board:

(a) any rights to release and indemnification of the Board contained in the Agreement or any other agreement or instrument delivered by any party in connection with the issuance and sale of the Bonds;

(b) the right to exercise its rights provided for in Sections 3.10, 4.03(c), 4.04, 4.08, 4.09, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.17, 4.18, 8.02, 8.05, 8.07 and 8.08 of the Agreement; and

(c) the concurrent right to receive any and all reports, surveys, certificates and evidences of performance which the Company may be required to furnish pursuant to the terms of the Agreement and the right to exercise any rights of inspection granted to it pursuant to the terms of the Agreement.

TO HAVE AND TO HOLD all and singular the Trust Estate with all privileges and appurtenances hereby conveyed and assigned, or agreed or intended so to be (i) to the Trustee and its successors in trust forever, and (ii) to the Bank, to the extent provided in Section 8.13 hereof.

IN TRUST NEVERTHELESS, under and subject to the terms and conditions hereinafter set forth: (a) for the equal benefit, protection and security of the Owners of any and all of the Bonds, all of which regardless of the time or times of their issuance or maturity shall be of equal rank, without preference, priority or distinction of any of the Bonds over any other thereof, except as otherwise provided in or pursuant to this Indenture; (b) for securing the observance and performance of the Board's obligations and of all others of the conditions, promises, stipulations, agreements and terms and provisions of this Indenture and the uses and purposes herein expressed and declared; and (c) for the benefit of the Bank.

PROVIDED, HOWEVER, that if the Board, its successors or assigns, well and truly pays, or causes to be paid, the principal of the Bonds issued hereunder and the premium (if any) and interest due or to become due thereon, and the purchase price thereof, at the times and in the manner mentioned in the Bonds and as provided herein, according to the true intent and meaning thereof, and shall cause the payments to be made into the Bond Fund as required under Article VI hereof, or shall provide, as permitted hereby, for payment thereof in accordance with Article XI hereof, and shall well and truly keep, perform and observe all of the covenants and conditions pursuant to the terms of this Indenture and all other of the Board's obligations to be kept, performed and observed by it, and shall pay or cause to be paid to the Trustee all sums of money due or to become due in accordance with the terms and provisions hereof, then upon such final payments or deposits as provided in Article XI hereof, and upon the termination of the Agreement, the right, title and interest of the Trustee in and to the Trust Estate shall cease, terminate and be void, and the Trustee shall thereupon assign, transfer, and turn over the Trust Estate to the Bank; provided, that if the Trustee shall have received written evidence from the Bank that all obligations of the Company under the Loan Agreement have been satisfied and that the Loan Agreement has been terminated, or if no Bank shall then exist, the Trust Estate shall be assigned, transferred and turned over to the Company; and the Trustee shall execute and deliver to the Board, the Bank and the Company; as appropriate, such instruments in writing as shall be requisite to evidence such transfer of the Trust Estate. Upon the Trustee's assignment, transfer and turning over to the Bank or the Company, as appropriate, of the Trust Estate pursuant to the provisions of this Indenture, the Trustee shall have no further duties, responsibilities or obligations under and pursuant to this Indenture.

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AND IT IS EXPRESSLY DECLARED that all Bonds issued and secured hereunder are to be issued, authenticated and delivered and all of the Trust Estate hereby pledged is to be dealt with and disposed of under, upon and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes hereinafter expressed, and the Board has agreed and covenanted and intending to be legally bound does hereby agree and covenant with the Trustee and with the respective Owners from time to time of the Bonds, or any part thereof as follows:

ARTICLE I

DEFINITIONS; CONTENT OF CERTIFICATES AND OPINIONS

Section 1.01. Definitions. Unless the context otherwise requires, the terms and phrases defined in this Section shall, for all purposes of the recitals hereto, this Indenture and of any indenture supplemental hereto and of any certificate, opinion or other document herein mentioned, have the meanings herein specified, to be equally applicable to both the singular and plural forms of any of the terms herein defined. Unless otherwise defined in this Indenture, all terms used herein shall have the meanings assigned to such terms in the Act.

"Accountant" means any firm of independent certified public accountants (not an individual) selected by the Company and acceptable to the Bank.

"Act" means Act No. 648 adopted at the 1949 Regular Session of the Legislature of the State of Alabama, approved September 19, 1949, as amended (said Act being codified as Section 11-54-80, et seq., Code of Alabama, 1975).

"Additional Payments" means any payments required to be made by the Company pursuant to the Agreement which are not required to be: (i) applied to the payment of scheduled debt service on the Bonds; or (ii) reimbursed to the Letter of Credit Bank or the Bank for monies drawn on the Letter of Credit to pay debt service on the Bonds.

"Administrative Expenses" means those expenses of the Board and the Bank which are properly chargeable to the Company on account of the Bonds and the Bond Documents as administrative expenses under Generally Accepted Accounting Principles and include, without limiting the generality of the foregoing, the following: (a) fees and expenses of the Trustee, the Tender Agent, the Board, the Letter of Credit Bank, the Bank and the Placement Agent; and (b) fees and expenses of the Board's, the Letter of Credit Bank's, the Bank's, the Trustee's, the Tender Agent's and the Placement Agent's professional advisors reasonably necessary and fairly attributable to the Project Facilities, including without limiting the generality of the foregoing, fees and reasonable expenses of the Board's, the Trustee's, the Bank's and the Placement Agent's counsel.

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"Agreement" means the Amended and Restated Lease Agreement, dated as of October 1, 1998, between the Board and the Company, together with all supplements thereto.

"Authorized Representative" means with respect to the Company, any person designated as an Authorized Representative of the Company by a Certificate of the Company executed by the Company and filed with the Trustee.

"Available Moneys" means: (i) moneys derived from drawings under the Letter of Credit; (ii) moneys held by the Trustee in funds and accounts established under this Indenture for a period of at least one hundred twenty-four (124) days and not commingled with any moneys so held for less than said one hundred twenty-four (124) day period and during and prior to which period, no petition in bankruptcy was filed by or against the Company, any partner of the Company, or the Board under the Bankruptcy Code or any applicable state bankruptcy or insolvency law, unless such petition was dismissed and all applicable appeal periods have expired without an appeal having been filed;
(iii) investment income derived from the investment of moneys described in clauses (i) or (ii) above; or (iv) any other moneys, if the Trustee and the Letter of Credit Bank have received an opinion of nationally recognized counsel acceptable to Moody's experienced in bankruptcy matters to the effect that payment of the principal or purchase price of or interest on the Bonds with such moneys would not, in the event of bankruptcy of the Company, the Board, any affiliate of the Company or other payor, constitute a voidable preference under the Bankruptcy Code or any applicable state bankruptcy or insolvency law.

"Bank" means Congress Financial Corporation, whose principal office is located in the City of New York, New York County, New York, and its successors and/or assigns; provided, however, that if the Loan Agreement is no longer in place, "Bank" and "Letter of Credit Bank" shall mean the provider of the Letter of Credit or of the Substitute Letter of Credit.

"Bankruptcy Code" means the federal Bankruptcy Code, 11 U.S.C. ss.101 et seq., as amended and supplemented from time to time.

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"Board" means The Industrial Development Board of the City of Huntsville created pursuant to, and as defined in, the Act, and its successors.

"Bond Documents" means any or all of the Agreement, this Indenture, the Tender Agent Agreement, the Remarketing Agreement and all documents, certificates and instruments executed in connection therewith.

"Bond Fund" means the fund created in Section 6.01 hereof.

"Bond Registrar" means any bank, national banking association or trust company designated as registrar for the Bonds, and its successor appointed under the Indenture.

"Bonds" means the $7,500,000 original aggregate principal amount of the Board's Tax-Exempt Variable Rate Demand/Fixed Rate Refunding Revenue Bonds (Central CPVC Corporation Project) Series of 1998 authorized to be issued under this Indenture.

"Bond Year" means each one year period (or shorter period from date of issue) that ends at the close of business on a day in the calendar year selected by the Company.

"Business Day" means any day other than: (i) a Saturday or Sunday; (ii) a legal holiday or any day on which banking institutions in the State of New York, the State, the City of New York, or the city in which the principal office of the Trustee, the Tender Agent or the Letter of Credit Bank are authorized to remain closed; or (iii) a day on which the New York Stock Exchange is closed.

"Cede & Co." means Cede & Co., as nominee of The Depository Trust Company, New York, New York.

"Certificate," "Statement," "Request," and "Order" means: (a) with respect to the Board, a written certificate, statement, request or order executed in the name of the Board by its Chairman or Vice Chairman or such other person as may be designated and authorized to sign for the Board; or (b) with respect to the Company a written certificate, statement, request, or order executed by an Authorized Representative of the Company. Any such instrument and supporting opinions or representations, if any, may, but need not, be combined in a single instrument with any other instrument, opinion or representation, and the two or more so combined shall be read and construed as a single instrument. If and to the extent required by Section 1.02 hereof, each such instrument shall include the statements provided for in such Section 1.02.

"Certified Resolution of the Board" means a copy of a resolution of the Board of Directors of the Board certified by the Secretary or an Assistant Secretary of the Board, or other officer serving in a similar capacity, under its corporate seal, to have been duly adopted by the Board of Directors of the Board and to be in full force and effect on the date of such certification.

"Clearing Fund" means the fund created pursuant to Section 3.03 hereof.

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"Closing Date" means October 29, 1998 or such other date which shall be the date of the execution and delivery of the Agreement and the other Bond Documents and the issuance and delivery of the Bonds.

"Code" means the Internal Revenue Code of 1986, as amended, and all regulations promulgated thereunder.

"Collateral" means all of the rights and assets of the Company or any other Person in which the Board or the Trustee is now or hereafter granted a lien or security interest in order to secure the performance of (i) the Company's obligations under the Agreement or any of the Collateral Documents or
(ii) the obligations of the Board hereunder or under the Bonds.

"Collateral Documents" means all documents executed and delivered or to be executed and delivered and under which the Board or the Trustee is granted a lien or security interest in any of the rights and assets of the Company or any other Person in order to secure the performance of the Company's obligations under the Agreement or any other Bond Documents or the obligations of the Board hereunder or under the Bonds.

"Company" means Central CPVC Corporation, a State corporation.

"Conversion Date" means the Optional Conversion Date.

"Conversion Option" means the option granted to the Company in Section 5.01 hereof pursuant to which the interest rate on the Bonds is converted from the Floating Rate to the Fixed Rate as of the Optional Conversion Date.

"Counsel" means an attorney-at-law or law firm (who may be counsel for the Company or for the Board) satisfactory to the Trustee.

"Debt Service Requirements," with reference to a specified period means, with respect to Bonds:

(a) amounts required to be paid into any mandatory sinking fund account during the period; and

(b) amounts needed to pay the principal of such indebtedness maturing during the period and not to be redeemed prior to maturity from amounts on deposit in any sinking fund or redemption, retirement or similar fund or account; and

(c) interest payable on the subject indebtedness during the period, excluding capitalized interest and amounts on deposit with the Trustee which are available under the Indenture to pay interest with respect to such indebtedness.

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"Demand Purchase Notice" means a notice delivered pursuant to paragraph
(i) of Section 5.04 hereof.

"Demand Purchase Option" means the option granted to Owners of Bonds to require that Bonds be purchased prior to the Conversion Date pursuant to Section 5.04 hereof.

"Determination Date" means with respect to any Floating Rate Bonds, each Wednesday or if such Wednesday is not a Business Day, the next succeeding Business Day.

"Determination of Taxability" means, with respect to any Bond, the first to occur of the following events: (i) the date on which the Company determines that an Event of Taxability has occurred by filing with the Trustee a statement to that effect supported by one or more tax schedules, returns or documents that disclose that such an Event of Taxability has occurred; (ii) the date on which the Company or the Trustee is advised by private ruling, technical advice or any other written communication from any authorized official of the Internal Revenue Service that, based upon any filings of the Company or any other person or entity, or upon any review or audit of the Company or any other person or entity, or upon any other grounds whatsoever, an Event of Taxability has occurred; (iii) the date on which the Trustee or the Company is advised that a court of competent jurisdiction has issued an order, declaration, ruling or judgment to the effect that an Event of Taxability has occurred; (iv) the date the Trustee shall have received written notice from any owner of the Bonds that such owner has received a written assertion or claim by any authorized official of the Internal Revenue Service that an Event of Taxability has occurred; or (v) the date the Trustee is notified that the Internal Revenue Service has issued any private ruling, technical advice or any other written communication, with or to the effect that an Event of Taxability has occurred; provided, however, that
(x) no Determination of Taxability described above shall be deemed to have occurred unless the Trustee shall have received a written opinion of nationally recognized bond counsel satisfactory to the Bank and the Company and not unsatisfactory to the Trustee, and in form and substance satisfactory to the Bank and the Company and not unsatisfactory to the Trustee, to the effect that an Event of Taxability has occurred; and (y) no Determination of Taxability described above shall be deemed to have occurred until 180 days shall have elapsed from the dates described in clauses (i), (ii), (iii), (iv) or (v) above without such Determination of Taxability having been rescinded or canceled.

"Event of Default" means any of the events specified in Section 8.01 of this Indenture.

"Event of Taxability" means, with respect to any Bond, a change of law or regulations, or the interpretation thereof, or the occurrence of any other event or the existence of any other circumstances (including without limitation the fact that any representations or warranties of the Company or the Board made in connection with the issuance of any Bond is or was untrue or that a covenant of the Company has been breached) that has the effect of causing interest payable on any Bond to be includable in gross income for federal income tax purposes under Section 103 of the Code other than by reason that such interest:
(i) is includable in the gross income of an owner or former owner of any Bond while such owner or former owner is or was a "substantial user" or a "related person" to a "substantial user" of the Project Facilities (as such terms are used in Section 147(a)(1) of the Code); or (ii) is deemed an item of tax preference, including without limitation an item subject to any alternative minimum tax.

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"Fiscal Year" means the period of twelve (12) consecutive months beginning January 1 of each year, or such other period of twelve consecutive months established by the Company as its new Fiscal Year.

"Fixed Rate" means the interest rate in effect on any Bonds from and after the Conversion Date, as said rate is determined in accordance with Section 2.02(D) hereof.

"Fixed Rate Bonds" means any Bonds which are converted to a Fixed Rate in accordance with the provisions of this Indenture.

"Fixed Rate Period" means, with respect to any Bonds, a period during which interest on such Bonds accrues at a Fixed Rate.

"Floating Rate" means a variable rate of interest equal to the minimum rate of interest necessary, in the sole judgment of the Remarketing Agent, to sell the Bonds at a price equal to the principal amount thereof, exclusive of accrued interest, if any, thereon; said interest rate to be in effect on the Bonds from the date of issuance of the Bonds until (but not including) the Conversion Date, as said rate is determined in accordance with Section 2.02(C) hereof.

"Floating Rate Bonds" means any Bonds which bear interest at the Floating Rate.

"Generally Accepted Accounting Principles" means those accounting principles applicable in the preparation of financial statements of business institutions or industrial development authorities, as appropriate, as promulgated by the Financial Accounting Standards Board or such other body recognized as authoritative by the American Institute of Certified Public Accountants or any successor body.

"Government Obligations" means direct obligations of (including obligations issued or held in book entry form) or obligations the principal of and interest on which are unconditionally guaranteed as to full and timely payment by the United States.

"Holder," "Owner", "Registered Owner" or "Bondholders" whenever used herein with respect to a Bond, means the person in whose name such Bond is registered on the registration books maintained by the Trustee.

"Indenture" means this Trust Indenture, dated as of October 1, 1998, between the Board and the Trustee, as originally executed or as it may, from time to time, be supplemented, modified or amended by any Supplemental Indenture.

"Interest Payment Date" means prior to the Conversion Date, the first day of each calendar month, or if such date is not a Business Day, the next succeeding Business Day, commencing December 1, 1998 and from and after the Conversion Date, July 1 and January 1 of each year, commencing on the July 1 or January 1 next following the Conversion Date.

"Investment Securities" means any of the following which at the time are legal investments under the laws of the State for moneys held hereunder:

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(i) Government Obligations;

(ii) bonds, debentures, notes or other evidences of indebtedness issued by any agency or other governmental or government-sponsored agencies which may be hereafter created by the United States, provided, however, that the full and timely payment of the securities issued by each such agency or government-sponsored agency is secured by the full faith and credit of the United States;

(iii) certificates of deposit of, or time deposits in, any bank (including the Trustee) or savings and loan association having securities rated, at the time of purchase or acquisition, in one of the three highest Rating Categories (without regard to modifiers) of Moody's or S&P;

(iv) certificates which evidence ownership of the right to the payment of the principal of and interest on obligations described in clauses
(i) and (ii) of this definition, provided that such obligations are held in the custody of a bank or trust company in a special account separate from the general assets of such custodian;

(v) obligations which, at the time of purchase or acquisition, are rated in one of the two highest Rating Categories (without regard to modifiers) of Moody's and the interest on which is not includable in gross income for federal income tax purposes and the timely payment of the principal of and interest on which is fully provided for by the deposit in trust or escrow of cash or obligations described in clauses (i) or (ii) of this definition;

(vi) guaranteed investment contracts or other similar financial instruments with a commercial bank, insurance company or other financial institution whose long term debt obligations are rated, at the time of purchase or acquisition, in one of the two highest Rating Categories (without regard to modifiers) by Moody's;

(vii) mutual funds invested primarily in obligations described in clauses (i) and (ii) of this definition, and rated, at the time of purchase, in one of the two highest rating categories (without regard to modifiers) by Moody's, including, if such fund meets the criteria described in this clause (vii), mutual funds managed by the Trustee or an affiliate thereof;

(viii) any investment approved in writing by the Bank;

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(ix) repurchase agreements issued by financial institutions:
(i) insured by the Federal Deposit Insurance Corporation; or (ii) whose senior debt obligations at the time of purchase are rated, at the time of purchase or acquisition, in any of the three highest Rating Categories (without regard to modifiers) by Moody's; provided, such repurchase agreements are subject to perfected security interests in the Investment Securities of the kind specified in paragraphs (i) or (ii) above, which have a fair market value, exclusive of accrued interest, at least equal to the amount invested in the repurchase agreement; and provided further: (1) the Trustee has possession of the securities; (2) the Trustee has a perfected first security interest in the securities; (3) the securities are free and clear of any third-party liens; and
(4) failure to maintain the requisite securities percentage will require the Trustee to liquidate the securities in accordance with the terms of the repurchase agreement; and

(x) any other security or obligation constituting a permitted investment under the Act, provided that the Bank consents to the investment of funds in such security or obligation.

"Issue Date" means the date on which the Trustee authenticates the Bonds and on which the Bonds are delivered to the purchasers thereof upon original issuance.

"Letter of Credit" means the Irrevocable Direct Pay Letter of Credit issued by the Letter of Credit Bank which was arranged by the Bank pursuant to the provisions of the Loan Agreement, or, in the event of delivery of a Substitute Letter of Credit, such Substitute Letter of Credit.

"Letter of Credit Bank" means First Union National Bank, as issuer of the Letter of Credit, and its lawful successors and assigns, and to the extent applicable, the issuer of any Substitute Letter of Credit. (The Company caused the Bank to arrange for First Union National Bank to issue an irrevocable letter of credit in favor of the Trustee to provide for payment of debt service on the Bonds and to pay the purchase price of Bonds tendered for purchase pursuant to the optional or mandatory tender provisions of the Indenture.)

"Letter of Credit Termination Date" means the later of: (i) that date upon which the Letter of Credit shall expire or terminate pursuant to its terms; or (ii) that date to which the expiration or termination of the Letter of Credit may be extended, from time to time, either by extension or renewal of the existing Letter of Credit or the issuance of a Substitute Letter of Credit.

"Loan Agreement" means the Loan and Security Agreement by and among Congress Financial Corporation, as Lender, and Central Sprinkler Company, Central Castings Corporation, Central CPVC Corporation, as Borrowers, and Central Sprinkler Corporation and Central Sprinkler Export Corporation, as Guarantors, dated September 18, 1998, and any other similar agreement entered into in connection with the issuance of any Substitute Letter of Credit and any and all modifications, alterations, amendments, supplements thereto, and restatements thereof.

"Moody's" means Moody's Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the Board, with the approval of the Company.

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"Net Proceeds," when used with respect to any insurance proceeds or any condemnation award, means the amount remaining after deducting all expenses (including attorneys' fees and disbursements) incurred in the collection of such proceeds or award from the gross proceeds thereof.

"Obligation Termination Date" means the date on which the Bank delivers to the Trustee a certificate to the effect that all obligations owing to the Bank under the Loan Agreement have been paid in full.

"Officers' Certificate" means with respect to the Board, a certificate, duly executed by the Chairman or Vice Chairman, Secretary or Assistant Secretary, Treasurer or Assistant Treasurer of the Board, under the corporate seal of the Board; or with respect to the Company, a certificate duly executed by an Authorized Representative.

"Opinion of Counsel" means a written opinion of counsel (who may be counsel for the Board) selected by the Board and acceptable to the Trustee. If and to the extent required by the provisions of Section 1.02 hereof, each Opinion of Counsel shall include in substance the statements provided for in such Section 1.02.

"Optional Conversion Date" means that date on or after December 1, 1998, which shall be a Business Day, from and after which the interest rate on the Bonds is converted from the Floating Rate to the Fixed Rate as a result of the exercise by the Company of the Conversion Option in accordance with the terms of this Indenture.

"Outstanding," when used as of any particular time with reference to Bonds, means (subject to the provisions of Section 12.10) all Bonds theretofore, or thereupon being, authenticated and delivered by the Trustee under this Indenture, except: (1) Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (2) Bonds with respect to which all liability of the Board shall have been discharged in accordance with Section 11.02, including Bonds (or portions of Bonds) referred to in Section 12.10; and (3) Bonds for the transfer or exchange of or in lieu of or in substitution for which other Bonds shall have been authenticated and delivered by the Trustee pursuant to this Indenture.

"Participants" means those financial institutions for whom the Securities Depository effects book-entry transfers and pledges of securities deposited with the Securities Depository, as such listing of Participants exists at the time of such reference.

"Permitted Encumbrances" means any liens or encumbrances permitted under the Loan Agreement or otherwise permitted by the Bank.

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"Person" means an individual, corporation, firm, association, partnership, trust, or other legal entity or group of entities, including a governmental entity or any agency or political subdivision thereof.

"Placement Agent" means First Union Capital Markets, a Division of Wheat First Securities, Inc.

"Pledge Agreement" means: (i) the Pledge and Security Agreement, dated as of October 1, 1998, between the Company and the Bank, and any amendments or supplements thereto; and (ii) any pledge and security agreement made by the Company and the Substitute Bank for the benefit of any Substitute Bank, and any amendments or supplements thereto.

"Pledged Bonds" means any Bonds which shall, at the time of determination thereof, be held in pledge for the benefit of the Bank by the Pledged Bonds Custodian pursuant to the Pledge Agreement.

"Pledged Bonds Custodian" means that banking entity which serves as the custodian for the Pledged Bonds under the terms and conditions of the Pledge Agreement. The initial Pledged Bonds Custodian shall be the Tender Agent.

"Premises" shall mean that certain parcel of real property located at 3425 Stanwood Blvd., N.E., Huntsville, Alabama 35811.

"Principal Corporate Trust Office" means the principal corporate trust office of the Trustee, which at the date of the execution of the Indenture is located at 123 South Broad Street, Philadelphia, Pennsylvania 19109, Attention:
Corporation Trust Administration.

"Project" means the building, the machinery and equipment to be used in the manufacturing of CPVC pipe and fittings for the fire protection industry to be located at the Premises.

"Project Facilities" shall mean all of the Company's right, title and interest in and to the Premises, together with all the right, title and interest of the Company in and to all buildings, improvements, and appurtenant facilities located on the Premises.

"Purchase Price" means an amount equal to 100% of the principal amount of any Bond tendered or deemed tendered pursuant to Sections 5.01, 5.03 or 5.04 hereof, plus accrued and unpaid interest thereon to the date of purchase.

"Rating Agency" means Moody's when the Bonds are rated by Moody's and S&P when the Bonds are rated by S&P. The Bonds will not be rated as of the date of issuance and there are no plans to have the Bonds rated.

"Rating Category" means one of the general rating categories of Moody's or S&P, without regard to any refinement or gradation of such rating category by a numerical modifier or otherwise.

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"Record Date" means, prior to the Conversion Date, that day which is the seventh calendar day next preceding any Interest Payment Date and thereafter, that date which is the fifteenth calendar day next preceding any Interest Payment Date.

"Remarketing Agent" means (singly or collectively, as the case may be) the remarketing agent(s) appointed by the Company and accepted and consented to in writing by the Board and the Trustee and at the time serving as such under the Remarketing Agreement.

"Remarketing Agreement" means the Remarketing Agreement, dated October 29, 1998, by and between the Company and First Union Capital Markets, a division of Wheat First Securities, Inc., as the remarketing agent, and accepted and consented in writing to by the Board and the Trustee.

"Replacement Bonds" means Bonds issued to the beneficial owners of the Bonds in accordance with Section 2.13 hereof.

"Revenues" means all amounts received by the Board or the Trustee for the account of the Board pursuant or with respect to the Agreement or the Letter of Credit, including, without limiting the generality of the foregoing, payments under the Agreement (including both timely and delinquent payments and any late charges, and whether paid from any source), prepayments, insurance proceeds, condemnation proceeds, and all interest, profits or other income derived from the investment of amounts in any fund or account established pursuant to this Indenture.

"Securities Depository" means The Depository Trust Company and its successors and assigns or if: (i) the then-Securities Depository resigns from its functions as depository of the Bonds; or (ii) the Board discontinues use of the then-Securities Depository pursuant to Section 2.13, any other securities depository which agrees to follow the procedures required to be followed by a securities depository in connection with the Bonds and which is selected by the Board with the consent of the Company.

"Securities Depository Nominee" means, as to any Securities Depository, such Securities Depository or the nominee of such Securities Depository in whose name there shall be registered on the registration books maintained by the Trustee the Bond certificates to be delivered to and immobilized at such Securities Depository during the continuation with such Securities Depository of participation in its book-entry system.

"Securities Exchange Act" means the Securities Exchange Act of 1934, as amended.

"S&P" means Standard & Poor's Rating Services, a division of the McGraw-Hill Companies, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and their assigns, or, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, any other nationally recognized securities rating agency designated by the Board, with the approval of the Company.

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"State" means the State of Alabama.

"Substitute Bank" means a commercial bank, savings and loan association or savings bank or other financial institution which has issued a Substitute Letter of Credit.

"Substitute Letter of Credit" means a letter of credit delivered to the Trustee in accordance with Section 4.07 of the Agreement: (i) issued by the Letter of Credit Bank or a Substitute Bank, the short term unsecured debt of which shall then have been assigned a rating by Moody's of "P-1" or the equivalent rating assigned by S&P, or the long term senior subordinated debt of which shall then have been assigned a rating of "Aa3" or higher by Moody's or the equivalent rating assigned by S&P; (ii) replacing any existing Letter of Credit; (iii) dated no later than the date of the expiration or replacement date of the Letter of Credit for which the same is to be substituted; (iv) which shall expire on a date which is 15 days after an Interest Payment Date for the Bonds; (v) having a term of at least one year; and (vi) issued on substantially identical terms and conditions as the then existing Letter of Credit, except that the stated amount of the Substitute Letter of Credit shall equal the sum of: (A) the aggregate principal amount of Bonds at the time Outstanding, plus (B) an amount equal to (i) prior to the Conversion Date, forty-six (46) days' interest or such other number of days as shall be required by the Rating Agency (computed at a rate of 15% per annum) on all Bonds at the time Outstanding and
(ii) from and after the Conversion Date, two hundred (200) days' interest or such other number of days as shall be required by the Rating Agency (computed at the fixed rate on all Bonds at the time outstanding).

"Substitution Date" shall mean the date the Company delivers a Substitute Letter of Credit to the Trustee in accordance with the terms and conditions of Section 4.3 of the Agreement.

"Supplemental Indenture" means any indenture hereafter duly authorized and entered into between the Board and the Trustee, supplementing, modifying or amending this Indenture, but only if and to the extent that such Supplemental Indenture is specifically authorized hereunder.

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"Tender Agent" means First Union National Bank, a national banking association, and its successors and any corporation resulting from or surviving any consolidation or merger to which it or its successors may be a party or Tender Agent hereunder and under the Tender Agent Agreement. "Delivery Office" and "Principal Office" of the Tender Agent means 3C3 1525 West W.T. Harris Boulevard, Charlotte, NC 28288, Attention: Corporate Trust Operations or such other address as may be designated in writing to the Board, the Trustee, the Remarketing Agent and the Company.

"Tender Agent Agreement" means the Tender Agent Agreement, dated as of October 1, 1998, between the Company, the Trustee and the Tender Agent and any amendments and supplements thereto.

"Trust Estate" means all property rights and interests transferred, assigned, or otherwise pledged to the Trustee and the Bank pursuant to the Granting Clauses hereof.

"Trustee" means First Union National Bank, a national banking association and its successor and any entity resulting from or surviving any consolidation or merger to which it or its successors may be a party and any successor trustee at the time serving as successor trustee hereunder.

"United States" means the United States of America.

"Unremarketed Bonds" means Bonds which have been purchased pursuant to Sections 5.01, 5.03 or 5.04 hereof but which have not been remarketed.

"Weekly Period" shall mean, while the Bonds bear interest at the Floating Rate, the weekly period that begins on and includes Wednesday of each calendar week and ends at the close of business on Tuesday of the next succeeding week.

Section 1.02. Content of Certificates and Opinions. The Trustee may, but shall not be obligated to, require that every certificate or opinion provided for in this Indenture with respect to compliance with any provision hereof shall include: (1) a statement to the effect that the Person making or giving such certificate or opinion has read such provision and the definitions herein relating thereto; (2) a brief statement as to the nature and scope of the examination or investigation upon which the certificate or opinion is based; (3) a statement to the effect that in the opinion of such person, he has made or caused to be made such examination or investigation as is necessary to enable him to express an informed opinion with respect to the subject matter referred to in the instrument to which his signature is affixed; (4) a statement of the assumptions upon which such certificate or opinion is based, and that such assumptions are reasonable; and (5) a statement as to whether, in the opinion of such person, such provision has been complied with.

Any such certificate or opinion made or given by an officer of the Board or the Company may be based, insofar as it relates to legal or accounting matters, upon a certificate or opinion of or representation by counsel or an accountant, unless such officer knows, or in the exercise of reasonable care should have known, that the certificate, opinion or representation with respect to the matters upon which such certificate or statement may be based, as aforesaid, is erroneous. Any such certificate or opinion made or given by counsel or an accountant may be based, insofar as it relates to factual matters (with respect to which information is in the possession of the Board or the Company, as the case may be) upon a certificate or opinion of or representation by an officer of the Board or the Company, unless such counsel or accountant knows, or in the exercise of reasonable care should have known, that the certificate or opinion or representation with respect to the matters upon which such person's certificate or opinion or representation may be based, as aforesaid, is erroneous. The same officer of the Board or the Company, or the same counsel or accountant, as the case may be, need not certify to all of the matters required to be certified under any provision of this Indenture, but different officers, counsel or accountants may certify to different matters, respectively.

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Section 1.03. Interpretation.

(a) Unless the context otherwise indicates, words expressed in the singular shall include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and shall be deemed to mean and include the neuter, masculine or feminine gender, as appropriate.

(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and shall not affect the meaning, construction or effect hereof.

(c) All references herein to "Articles," "Sections" and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Indenture; the words "herein," "hereof," "hereby," "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or subdivision hereof.

(d) Whenever in this Indenture it is required that notice be provided to the Bank or that consent of the Bank be obtained, such provisions shall be effective only when: (i) the Letter of Credit is in effect; or (ii) the Bank, in its capacity as provider of the Letter of Credit, is the Holder of any Bonds.

ARTICLE II

THE BONDS

Section 2.01. Authorization of Bonds. The Bonds shall be issued hereunder in order to obtain moneys to finance the Project for the benefit of the Board and the Company. The Bonds are designated as "$7,500,000 The Industrial Development Board of the City of Huntsville Tax-Exempt Variable Rate Demand/Fixed Rate Refunding Revenue Bonds (Central CPVC Corporation Project), Series of 1998." The aggregate principal amount of Bonds which may be issued and Outstanding under this Indenture shall not exceed Seven Million Five Hundred Thousand Dollars ($7,500,000). No additional bonds may be issued under this Indenture. This Indenture constitutes a continuing agreement by the Board for the benefit of the Holders from time to time of the Bonds to secure the full payment of the principal of and interest on all such Bonds subject to the covenants, provisions and conditions herein contained.

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Section 2.02. Terms of Bonds; Interest on the Bonds.

(A) The Bonds shall be issued in fully registered form. Prior to the Conversion Date: (i) such Bonds shall be Outstanding in denominations of $100,000 or any integral multiple of $5,000 in excess thereof; and (ii) such Bonds may not be issued, exchanged or transferred except in the authorized denominations of $100,000 or any integral multiple of $5,000 in excess thereof. From and after the Conversion Date: (x) such Bonds shall be Outstanding in denominations of $5,000 or any integral multiple of $5,000; and
(y) such Bonds may not be issued, exchanged or transferred except in the authorized denominations of $5,000 or any integral multiple of $5,000 in excess thereof. The Bonds shall be dated as of the date of delivery and shall mature, subject to prior redemption, as provided herein. Unless the Board shall otherwise direct, prior to the Conversion Date the Bonds shall be lettered "VR" and shall be numbered consecutively from 1 upward, and after the Conversion Date the Bonds shall be lettered "FR" and shall be numbered consecutively from 1 upward.

(B) Each Bond shall be dated the Issue Date and shall bear interest, payable: (i) prior to the Conversion Date, on the first day of each calendar month, or if such date is not a Business Day, the next succeeding Business Day commencing December 1, 1998; (ii) on the Conversion Date; and (iii) from and after the Conversion Date, on July 1 and January 1 of each year, commencing on the July 1 or January 1 next following the Conversion Date, in each case from the Interest Payment Date next preceding the date of authentication thereof to which interest has been paid or duly provided for, unless the date of authentication thereof is an Interest Payment Date to which interest has been paid or duly provided for, in which case from the date of authentication thereof, or unless no interest has been paid or duly provided for on the Bonds, in which case from the Issue Date, until payment of the principal thereof has been made or duly provided for. Notwithstanding the foregoing, any Bond authenticated after any Record Date and before the following Interest Payment Date shall bear interest from such Interest Payment Date, provided, however, that if the Board shall default in the payment of interest due on such Interest Payment Date, then such Bond shall bear interest from the next preceding Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for on the Bonds, from the Issue Date.

The Bonds shall mature on January 1, 2013.

(C) (i) From the Issue Date to the Conversion Date, the Bonds shall bear interest at the Floating Rate. The Floating Rate shall be determined by the Remarketing Agent by 9:30 a.m. on each Determination Date and shall be effective on such Determination Date for the immediately following Weekly Period. If the Determination Date is, for example, a Thursday, the Weekly Period starts the preceding Wednesday.

(ii) The Remarketing Agent shall advise the Company and the Trustee of the Floating Rate by telephone (confirmed by telecopy to the Trustee) at or before the close of business on each Determination Date. Upon request of any Bondholder, the Remarketing Agent shall notify such Bondholder of the Floating Rate then borne by the Bonds.

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(iii) If for any reason the interest rate on a Bond for any Weekly Period is not determined by the Remarketing Agent pursuant to (C)(i) above, or a court holds that the Floating Rate set as provided pursuant to (C)(i) above is invalid or unenforceable, the Floating Rate for such Bonds shall be for the first such Weekly Period that a Floating Rate is not determined by the Remarketing Agent or has been determined invalid or unenforceable, a rate per annum equal to the Floating Rate established by the Remarketing Agent pursuant to (C)(i) on the immediately preceding Determination Date and on each Determination Date thereafter, shall be a rate per annum equal to 85% of the interest rate per annum for 30 day commercial paper having a rating of A-2/P-2 as reported in The Wall Street Journal on each Determination Date.

(iv) The determination of the Floating Rate by the Remarketing Agent shall be conclusive and binding upon the Board, the Trustee, the Letter of Credit Bank, the Letter of Credit Bank, the Bank, the Company, the Remarketing Agent, the Tender Agent and the Owners of the Bonds.

Anything herein to the contrary notwithstanding, the Floating Rate shall in no event exceed 15% per annum.

(D) The Bonds shall bear interest at the Fixed Rate from and after the Conversion Date until the maturity of the Bonds. The Fixed Rate shall be a fixed annual interest rate on the Bonds established by the Remarketing Agent as the rate of interest for which the Remarketing Agent has received commitments from purchasers on or prior to the 5th Business Day preceding the Conversion Date to purchase all the Outstanding Bonds on the Conversion Date at a price of par.

(E) Prior to the Conversion Date, interest on the Bonds shall be computed on the basis of a 365/366-day year, for the actual number of days elapsed. On and after the Conversion Date, interest on the Bonds shall be computed on the basis of a 360-day year of twelve 30-day months. The principal of and premium, if any, on the Bonds shall be payable in lawful money of the United States at the Principal Corporate Trust Office of the Trustee, or of its successor in trust. The Purchase Price of the Bonds shall be payable in lawful money of the United States by the Tender Agent to the Owner of Bonds entitled to receive such Purchase Price.

Interest on the Bonds shall be payable on each Interest Payment Date to the persons in whose name the Bonds are registered at the close of business on the Record Date for the respective Interest Payment Date. Interest shall be paid by check mailed to each Owner at the addresses shown on the registration books maintained by the Trustee, provided that such interest shall be paid by wire transfer to: (i) the Bank; and (ii) any Holder of at least $1,000,000 in aggregate principal amount of Bonds, if the Holder makes a written request of the Trustee at least 15 days before a Record Date specifying the account address and wiring instructions. Such a request may provide that it will remain in effect for subsequent interest payments until changed or revoked by written notice to the Trustee or upon the transfer or re-registration of the Bond.

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The principal of the Bonds shall be payable in lawful money of the United States at the Principal Corporate Trust Office of the Trustee; provided, however that payment of Bonds tendered pursuant to Sections 5.01, 5.03 and 5.04 hereof shall be paid at the Delivery Office of the Tender Agent. Except as provided for in Section 2.13 hereof, no payment of principal shall be made on any Bond until such Bond is surrendered to the Trustee at its Principal Corporate Trust Office.

Section 2.03. Execution of Bonds. The Bonds shall be executed in the name and on behalf of the Board with the manual or facsimile signature of its Chairman or Vice Chairman, under its seal attested by the manual or facsimile signature of its Secretary or Assistant Secretary. Such seal may be in the form of a facsimile of the Board's seal and may be reproduced, imprinted or impressed on the Bonds. The Bonds shall then be delivered to the Trustee for authentication by it. In case any of the officers who shall have executed or attested any of the Bonds shall cease to be such officer or officers of the Board before the Bonds so executed or attested shall have been authenticated or delivered by the Trustee or issued by the Board, such Bonds may nevertheless be authenticated, delivered and issued and, upon such authentication, delivery and issue, shall be as binding upon the Board as though those who executed and attested the same had continued to be such officers of the Board, and also any Bond may be signed and attested on behalf of the Board by such persons as at the actual date of execution of such Bond shall be the proper officers of the Board although at the nominal date of such Bond any such person shall not have been such officer of the Board.

Only such of the Bonds as shall bear thereon a certificate of authentication substantially in the form set forth on the form of Bond, manually executed by the Trustee, shall be valid or obligatory for any purpose or entitled to the benefits of this Indenture, and such certificate of the Trustee shall be conclusive evidence that the Bonds so authenticated have been duly executed, authenticated and delivered hereunder and are entitled to the benefits of this Indenture.

Section 2.04. Authentication.

(a) The Board hereby appoints the Tender Agent as a co-authenticating agent for the Bonds.

(b) No Bond shall be valid or obligatory for any purpose or entitled to any security or benefit under this Indenture unless and until a certificate of authentication on such Bond, substantially in the form set forth in Exhibit "A" and Exhibit "B" attached hereto, shall have been duly executed by the Trustee or by the Tender Agent and such executed certificate of authentication upon any such Bond shall be conclusive evidence that such Bond has been authenticated and delivered under this Indenture. The certificate of authentication on any Bond shall be deemed to have been executed by the Trustee or the Tender Agent if executed by an authorized signatory of the Trustee or the Tender Agent, as the case may be, but it shall not be necessary that the same signatory execute the certificate of authentication on all of the Bonds.

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(c) In the event any Bond is deemed tendered to the Tender Agent as provided in Section 5.01 or 5.04 hereof but is not physically delivered to the Tender Agent, the Board shall execute and the Trustee or the Tender Agent shall authenticate a new Bond of like denomination as that deemed tendered.

(d) Upon issuance of the Bonds, the Trustee shall authenticate and deliver the Bonds to the initial purchaser thereof against receipt of the purchase price for the Bonds, but only upon receipt of the following:

(i) executed counterpart originals of this Indenture, the Agreement, the Tender Agent Agreement and the Loan Agreement;

(ii) a written order of the Board directing the authentication and delivery of the Bonds and the application of the proceeds received from the sale of the Bonds;

(iii) the original Letter of Credit; and

(iv) the opinions of Bond Counsel, counsel to the Company and counsel to the Letter of Credit Bank in form and substance satisfactory to the Trustee.

Section 2.05. Form of Bonds. The Floating Rate Bonds and the certificate of authentication to be endorsed thereon prior to the Conversion Date are to be in substantially the form set forth in Exhibit "A" which is attached hereto and hereby made a part hereof as though fully set forth herein, with appropriate variations, omissions and insertions as permitted or required by this Indenture and applicable law. The Fixed Rate Bonds and the certificate of authentication to be endorsed thereon are to be in substantially the form set forth in Exhibit "B" which is attached hereto and hereby made a part hereof as though fully set forth herein, with appropriate variations, omissions and insertions as permitted or required by this Indenture.

Section 2.06. Transfer of Bonds. Any Bond may be transferred in accordance with its terms upon the books required to be kept pursuant to the provisions of Section 2.08 hereof. Such transfer shall be made, in accordance with the requirements of Section 2.02 hereof, by the person in whose name it is registered, in person or by his duly authorized attorney, upon surrender of such registered Bond for cancellation, accompanied by delivery of a written instrument of transfer, duly executed in a form approved by the Trustee.

Whenever any Bond or Bonds shall be surrendered for transfer, the Board shall execute and the Trustee or the Tender Agent, as the case may be, shall authenticate and deliver a new Bond or Bonds of the same Series for a like aggregate principal amount. The Trustee shall require the Bondholder requesting such transfer to pay any tax or other governmental charge required to be paid with respect to such transfer, and may in addition require the payment of a reasonable sum to cover expenses incurred by the Board or the Trustee in connection with such transfer.

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During the Fixed Rate Period, the Trustee shall not be required to transfer any Bond during the period beginning 15 days before the mailing of notice of redemption calling the Bond or any portion of the Bond for redemption and ending on the redemption date.

Section 2.07. Exchange of Bonds. Bonds may be exchanged at the Principal Corporate Trust Office of the Trustee for a like aggregate principal amount of Bonds of other authorized denominations in accordance with the requirements of Section 2.02 hereof. The Trustee shall require the Bondholder requesting such exchange to pay any tax or other governmental charge required to be paid with respect to such exchange, and may in addition require the payment of a reasonable sum to cover expenses incurred by the Board or the Trustee in connection with such exchange.

During the Fixed Rate Period, the Trustee shall not be required to exchange any Bond during the period beginning 15 days before the mailing of notice of redemption calling the Bond or any portion of the Bond for redemption and ending on the redemption date.

Section 2.08. Bond Register. The Trustee is hereby appointed the Bond Registrar of the Board and the Tender Agent is hereby appointed the Co-Bond Registrar of the Board. The Trustee or the Tender Agent, as the case may be, will keep or cause to be kept sufficient books for the registration and transfer of the Bonds, which shall at all times be open to inspection during regular business hours by any Bondholder or his agent duly authorized in writing, the Board, the Company, the Bank and the Remarketing Agent; and upon presentation for such purpose, the Trustee or the Tender Agent, as the case may be, shall, under such reasonable regulations as they may prescribe, register or transfer or cause to be registered or transferred, on such books, Bonds as hereinbefore provided.

Section 2.09. Temporary Bonds. The Bonds may be issued in temporary form exchangeable for definitive Bonds when ready for delivery. Any temporary Bond may be printed, lithographed or typewritten, shall be of such denomination as may be determined by the Board, shall be in fully registered form without coupons and may contain such reference to any of the provisions of this Indenture as may be appropriate. Every temporary Bond shall be executed by the Board and be authenticated by the Trustee or the Tender Agent, as the case may be, upon the same conditions and in substantially the same manner as the definitive Bonds. If the Board issues temporary Bonds it will execute and deliver definitive Bonds as promptly thereafter as practicable, and thereupon the temporary Bonds may be surrendered, for cancellation, in exchange therefor at the Principal Corporate Trust Office of the Trustee and the Trustee or the Tender Agent, as the case may be, shall authenticate and deliver in exchange for such temporary Bonds an equal aggregate principal amount of definitive Bonds of authorized denominations. Until so exchanged, the temporary Bonds shall be entitled to the same benefits under this Indenture as definitive Bonds authenticated and delivered hereunder.

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Section 2.10. Bonds Mutilated, Lost, Destroyed or Stolen. If any Bond shall become mutilated, the Board, at the expense of the Holder of said Bond, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and number in exchange and substitution for the Bond so mutilated, but only upon surrender to the Trustee of the Bond so mutilated. Every mutilated Bond so surrendered to the Trustee shall be canceled by it and delivered to, or upon the order of, the Board. If any Bond shall be lost, destroyed or stolen, evidence of such loss, destruction or theft may be submitted to the Board and the Trustee and, if such evidence be satisfactory to both and indemnity satisfactory to them both shall be given, the Board, at the expense of the Holder, shall execute, and the Trustee shall thereupon authenticate and deliver, a new Bond of like tenor and number in lieu of and in substitution for the Bond so lost, destroyed or stolen (or if any such Bond shall have matured or shall be about to mature, instead of issuing a substitute Bond, the Trustee may pay the same without surrender thereof). The Board may require payment by the Holder of a sum not exceeding the actual cost of preparing each new Bond issued under this Section and of the expenses which may be incurred by the Board and the Trustee in connection therewith. Any Bond issued under the provisions of this Section in lieu of any Bond alleged to be lost, destroyed or stolen shall constitute an original additional contractual obligation on the part of the Board whether or not the Bond so alleged to be lost, destroyed or stolen be at any time enforceable by anyone, and shall be entitled to the benefits of this Indenture with all other Bonds secured by this Indenture.

Section 2.11. Cancellation and Destruction of Surrendered Bonds. All Bonds surrendered for payment or redemption and all Bonds purchased with moneys available for that purpose in any funds established under this Indenture, shall, at the time of such payment or redemption, be canceled and destroyed by the Trustee. The Trustee shall deliver to the Board certificates of destruction with respect to all Bonds destroyed in accordance with this Section.

Section 2.12. Acts of Bondholders; Evidence of Ownership. Any action to be taken by Bondholders may be evidenced by one or more concurrent written instruments of similar tenor signed or executed by such Bondholders in person or by agents appointed in writing. The fact and date of the execution by any person of any such instrument may be proved by acknowledgment before a notary public or other officer empowered to take acknowledgments or by an affidavit of a witness to such execution. Any action by the holder of any Bond shall bind all future holders of the same Bond in respect of any thing done or suffered by the Board or the Trustee in pursuance thereof.

Section 2.13. Book-Entry Bonds; Securities Depository.

(a) The Bonds shall initially be registered to Cede & Co., the nominee for the Securities Depository, and no beneficial owner will receive certificates representing their respective interests in the Bonds, except in the event the Trustee issues Replacement Bonds as provided in subsection (b) hereof. It is anticipated that during the term of the Bonds, the Securities Depository will make book-entry transfers among its Participants and receive and transmit payment of principal of, premium, if any, and interest on, the Bonds to the Participants until and unless the Trustee authenticates and delivers Replacement Bonds to the beneficial owners as described in subsection (b).

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(b) If the Company determines: (1) that the Securities Depository is unable to properly discharge its responsibilities; or (2) that the Securities Depository is no longer qualified to act as a securities depository and registered clearing agency under the Securities Exchange Act; or (3) that the continuation of a book-entry system to the exclusion of any Bonds being issued to any Bondowner other than Cede & Co. is no longer in the best interests of the beneficial owners of the Bonds, then the Trustee shall notify the Bondowners of such determination or such notice and of the availability of certificates of Owners requesting the same, and the Trustee shall register in the name of and authenticate and deliver Replacement Bonds to the beneficial owners or their nominees in principal amounts representing the interest of each, making such adjustments as it may find necessary or appropriate as to accrued interest and previous calls for redemption; provided, that in the case of a determination under (1) or (2) of this subsection (b), the Company, with the consent of the Trustee, may select a successor Securities Depository in accordance with subsection (c) hereof to effect book-entry transfers. In such event, all references to the Securities Depository herein shall relate to the period of time when the Securities Depository has possession of at least one Bond. Upon the issuance of Replacement Bonds, all references herein to obligations imposed upon or to be performed by the Securities Depository shall be deemed to be imposed upon and performed by the Trustee, to the extent applicable with respect to such Replacement Bonds. If the Securities Depository resigns and the Company, the Trustee or Bondowners are unable to locate a qualified successor of the Securities Depository in accordance with subsection
(c) hereof, then the Trustee shall authenticate and cause delivery of Replacement Bonds to Bondowners, as provided herein. The Trustee may rely on information from the Securities Depository as to the names of the beneficial owners of the Bonds. The cost of printing Replacement Bonds shall be paid for by the Company.

(c) In the event the Securities Depository resigns, is unable to properly discharge its responsibilities, or is no longer qualified to act as a securities depository and registered clearing agency under the Securities Exchange Act, the Company may appoint a successor Securities Depository provided the Trustee receives written evidence satisfactory to the Trustee with respect to the ability of the successor Securities Depository to discharge its responsibilities. Any such successor Securities Depository shall be a securities depository which is a registered clearing agency under the Securities Exchange Act, or other applicable statute or regulation that operates a securities depository upon reasonable and customary terms. The Trustee upon its receipt of a Bond or Bonds for cancellation shall cause the delivery of Bonds to the successor Securities Depository in appropriate denominations and form as provided herein.

(d) Notwithstanding any provision herein to the contrary, so long as the Bonds are subject to a system of book-entry transfers pursuant to this Section 2.13, any requirement for the delivery of Bonds to the Tender Agent or the Trustee in connection with a tender pursuant to Section 5.01, 5.03 or 5.04 or a partial redemption pursuant to Section 4.01 shall be deemed satisfied upon the transfer, on the registration books of the Securities Depository, of the beneficial ownership interests in such Bonds tendered for purchase to the account of the Tender Agent, or a Participant acting on behalf of or at the discretion of such Tender Agent, or on the books of the Trustee.

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ARTICLE III

ISSUANCE OF BONDS; APPLICATION OF PROCEEDS

Section 3.01. Issuance of the Bonds. At any time after the execution of this Indenture, the Board may execute and the Trustee or the Tender Agent, as the case may be, shall authenticate and, upon request of the Board, deliver the Bonds in the aggregate principal amount of Seven Million Five Hundred Thousand Dollars ($7,500,000).

Section 3.02. Validity of Bonds. The validity of the authorization and issuance of the Bonds is not dependent on and shall not be affected in any way by any proceedings taken by the Board or the Trustee with respect to or in connection with the Agreement. The recital contained in the Bonds that the same are issued pursuant to the Act and the Constitution and laws of the State shall be conclusive evidence of their validity and of compliance with all provisions of law in their issuance.

Section 3.03. Disposition of Proceeds of the Bonds and Other Amounts. The Board shall deposit or cause to be deposited with the Trustee, immediately upon receipt thereof, all proceeds derived from the sale of the Bonds, together with any monies deposited by the Company as an equity contribution; provided, however, that the Trustee shall segregate bond proceeds from equity contribution monies. The Trustee shall deposit all such amounts in a special fund, which the Trustee is hereby directed to establish and create, to be known as the "Clearing Fund", and in the following order, the Trustee shall:

(a) Transfer to the persons identified in writing by the Board and the Company in payment, or reservation for payment, the costs of issuance incurred in connection with the Bonds; and

(b) Transfer to the holder of the Series 1997 Bonds the purchase price of the said Bonds..

ARTICLE IV

REDEMPTION OF BONDS BEFORE MATURITY

Section 4.01. Extraordinary and Mandatory Redemption.

(a) Extraordinary Redemption. During any time the Bonds are in a fixed rate mode, they are callable for redemption in, whole or in part, in the event: (1) the Project Facilities or any portion thereof are damaged or destroyed or taken in a condemnation proceeding as provided in Section 6.4 of the Agreement; or (2) the Company shall exercise its option to cause the Bonds to be redeemed as provided in Section 9.4 of the Agreement. If called for redemption at any time pursuant to this Section 4.01(a), the Bonds shall be subject to redemption by the Board on any Interest Payment Date, in whole or in part, at a redemption price equal to 100% of the principal amount thereof being redeemed, which such amount shall be limited to the amount of insurance or condemnation proceeds, plus accrued interest to the redemption date.

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(b) Mandatory Redemption. The Bonds are subject to mandatory redemption:

(1) at any time, in whole, within one hundred eighty (180) days after the Trustee receives notice of the occurrence of a Determination of Taxability, at a redemption price equal to one hundred percent (100%) of the aggregate principal amount of Bonds Outstanding plus accrued interest to the redemption date; or

(2) five (5) Business Days prior to the Letter of Credit Termination Date, in whole, at a redemption price equal to one hundred percent (100%) of the principal amount thereof being redeemed plus accrued interest to the redemption date if, on the 30th Business Day prior to the Letter of Credit Termination Date, the Trustee shall not have received a Substitute Letter of Credit which will be effective on or before the Letter of Credit Termination Date.

(c) Mandatory Sinking Fund Redemption. The Bonds are subject to mandatory sinking fund redemption on the Interest Payment Date occurring in the month of January in each of the years set forth below commencing on the Interest Payment Date occurring in January of 2000 (each, a "Mandatory Sinking Fund Payment Date"), at a redemption price equal to 100% of the principal amount thereof plus accrued interest as follows:

                   Mandatory Sinking
Year                Fund Payments
----               -----------------
2000                   $560,000
2001                   $560,000
2002                   $560,000
2003                   $560,000
2004                   $560,000
2005                   $560,000
2006                   $560,000
2007                   $560,000
2008                   $560,000
2009                   $575,000
2010                   $580,000
2011                   $580,000
2012                   $580,000
2013                   $145,000*

*Final maturity of the Bonds is January 1, 2013

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(d) [Reserved]

(e) Mandatory Redemption upon Determination of Taxability. The Bonds will be subject to redemption by the Board in whole within one hundred eighty (180) days after the occurrence of a "Determination of Taxability" (as hereinafter defined), at a redemption price equal to one hundred percent (100%) of the aggregate principal amount of Bonds outstanding plus accrued interest to the redemption date.

A "Determination of Taxability " with respect to any Bond shall be deemed to have been made upon the first to occur of the following events:

(i) the date on which the Company determines that an Event of Taxability (11ereinafter defined) has occurred by filing with the Trustee a statement to that effect supported by one or more tax schedules, returns or documents which disclose that such an Event of Taxability has occurred;

(ii) the date on which the Company or the Trustee is advised by private ruling, technical advice or any other written communication from any authorized official of the Internal Revenue Service that, based upon any filing of the Company or any other person or entity, or upon any review or audit of the Company or any other person or entity, or upon any other grounds whatsoever, an Event of Taxability has occurred;

(iii) the date on which the Trustee or the Company is advised that a court of competent jurisdiction has issued an order, declaration, ruling or judgment to the effect that an Event of Taxability has occurred;

(iv) the date the Trustee shall have received written notice from any holder of Bonds that such owner has received a written assertion or claim by any authorized official of the Internal Revenue Service that an Event of Taxability has occurred; or

(v) the date the Trustee is notified that the Internal Revenue Service has issued any private ruling, technical advice or any other written communication, with or to the effect that an Event of Taxability has occurred;

provided that (A) no Determination of Taxability described in clauses (i) or (v) shall be deemed to have occurred unless the Trustee shall have received a written opinion of nationally-recognized bond counsel satisfactory to the Lender and the Company and not unsatisfactory to the Trustee, and in form and substance satisfactory to the Lender and the Company and not unsatisfactory to the Trustee, to the effect that an Event of Taxability has occurred; and (B) no Determination of Taxability described in clauses (i), (ii), (iii), (iv) or (v) above shall be deemed to have occurred until 180 days shall have elapsed from the dates described in clauses (i), (ii), (iii), (iv) or (v) above without such Determination of Taxability having been rescinded or cancelled.

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As used herein the phrase "Event of Taxability" with respect to any Bond shall mean a change of law or regulations, or the interpretation thereof, or the occurrence of any other event or the existence of any other circumstance (including, without limitation, the fact that any representations or warranties of the Company or the Board made in connection with the issuance of the Bonds is or was untrue or that a covenant of the Company has been breached) which has the effect of causing interest payable on any Bond to be includable in gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder (the "Code") other than by reason that such interest (i) is includable in the gross income of an owner or former owner of a Bond while such owner or former owner is or was a "substantial user" or a "related person" to a "substantial user" of the Project Facility (as such terms are used in Section 147(a)(1) of the Code) or is deemed an item of tax preference, including, without limitation, an item subject to any alternative minimum tax.

Section 4.02. Optional Redemption. On or prior to the Conversion Date, the Bonds are subject to redemption by the Board, at the option of the Company, at any time, subject to provisions of Section 4.03 hereof, in whole or in part, at the redemption price of 100% of the principal amount thereof being redeemed plus accrued interest to the redemption date.

After the Conversion Date, if the length of time from the Conversion Date to the final maturity date of the Bonds is seven (7) years or more, the Bonds are subject to redemption by the Board, at the option of the Company, on or after the fifth anniversary of the Conversion Date, in whole at any time or in part on any Interest Payment Date, at the redemption price of 100% of the principal amount thereof being redeemed plus accrued interest to the redemption date.

If, pursuant to a conversion from the Floating Rate to the Fixed Rate in accordance with Section 5.01 hereof, the Remarketing Agent certifies to the Trustee and the Company in writing that the foregoing call restriction is not consistent with the then prevailing market conditions, the foregoing call restriction may be revised in accordance with the best professional judgment of the Remarketing Agent to reflect the then prevailing market conditions; provided, however that the Company shall have consented to such revision and shall have furnished the Trustee with an opinion addressed to the Trustee, the Board, the Company, the Paying Agent, the Bank and the Remarketing Agent, if any at such time, of Bond Counsel (as defined in the Lease Agreement) acceptable to the Company and the Trustee, stating that such revision will not adversely affect the excludability from federal income taxation of interest on the Bonds.

Notwithstanding the foregoing, no such optional redemption shall occur after the Conversion Date unless there shall be available in the Bond Fund sufficient Available Moneys to pay all amounts due with respect to such a redemption.

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Section 4.03. Notice of Redemption. Notice of the call for redemption, identifying the Bonds or portions thereof to be redeemed and the redemption price (including the premium, if any), shall be given by the Trustee by mailing a copy of the redemption notice by first-class mail, postage prepaid, at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption to the Owner of each Bond to be redeemed in whole or in part at the address shown on the registration books. Such notice shall contain such matters specified in the Bonds for the redemption thereof and shall state that such redemption is conditional upon the receipt of monies by the Trustee for such purpose on or prior to the redemption date. Any notice mailed as provided in this Section shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice. The Trustee shall deliver a copy of any such redemption notice to the Tender Agent, the Company and to the Remarketing Agent.

The Trustee shall notify the Board promptly in writing of the maturity or redemption in whole of the Bonds.

Section 4.04. Interest on Bonds Called for Redemption. Upon the giving of notice and the deposit of Available Moneys for redemption at the required times on or prior to the date fixed for redemption, as provided in this Article, interest on the Bonds or portions thereof thus called shall no longer accrue after the date fixed for redemption.

Section 4.05. Cancellation. All Bonds which have been redeemed shall not be reissued but shall be canceled and destroyed by the Trustee in accordance with Section 2.11 hereof.

Section 4.06. Partial Redemption of Bonds.

(a) If less than all the Bonds are to be redeemed, the particular Bonds or portions thereof to be redeemed shall be selected by the Trustee by lot.

(b) Upon surrender of any Bond for redemption in part only, the Board shall execute and the Trustee shall authenticate and deliver to the Owner thereof a new Bond or Bonds of authorized denominations, in an aggregate principal amount equal to the unredeemed portion of the Bond surrendered. If all or a portion of Bonds tendered for purchase pursuant to Section 5.04 hereof have been selected by the Trustee for redemption, the Tender Agent, upon receipt of such tendered Bonds, shall authenticate and redeliver only such portion of tendered Bonds not subject to redemption. The Tender Agent shall deliver to the tendering Bondholder a copy of the notice of redemption, indicating the portion of the Bonds subject thereto, and upon receipt of funds as provided herein, an amount representing the principal of and interest on the Bonds not called for redemption. The principal of and interest accrued on the Bonds called for redemption shall be paid to such bondholder on the redemption date. The Tender Agent shall cancel the Bond or such portion thereof tendered for purchase and subject to redemption, and shall deliver a certificate evidencing such cancellation and the canceled Bond to the Trustee.

(c) (i) Prior to the Conversion Date, in case a Bond is of a denomination larger than $100,000, a portion of such Bond ($100,000 or any integral multiple of $5,000 in excess thereof) may be redeemed, but Bonds shall be redeemed only if the remaining unredeemed portion of such Bond is in the principal amount of $100,000 or any integral multiple of $5,000 in excess of $100,000.

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(ii) After the Conversion Date, in case a Bond is of a denomination larger than $5,000, a portion of such Bond ($5,000 or any integral multiple thereof) may be redeemed, but Bonds shall be redeemed only if the remaining unredeemed portion of such Bond is in the principal amount of $5,000 or any integral multiple of $5,000.

(d) Notwithstanding anything to the contrary contained in this Indenture, whenever the Bonds are to be redeemed in part, Bonds which are Pledged Bonds at the time of selection of Bonds for redemption shall be selected for redemption prior to the selection of any other Bond. If the aggregate principal amount of Bonds to be redeemed exceeds the aggregate principal amount of Pledged Bonds at the time of selection, the Trustee may select for redemption Bonds in an aggregate principal amount equal to such excess in such manner as the Trustee in its discretion shall deem fair and appropriate.

Section 4.07. Payment of Redemption Price with Available Moneys; Consent of Bank to Optional Redemption. Notwithstanding any provision to the contrary contained in this Indenture, the payment of the redemption price of Bonds shall be made only from Available Moneys. On each date that the Bonds are subject to redemption, the Trustee shall draw on the Letter of Credit in an amount sufficient to pay the full redemption price of the Bonds then subject to redemption from the sources and in the order provided in Section 6.03 hereof. As long as the Letter of Credit Bank is not in default under the Letter of Credit, the Trustee shall not call Bonds for Optional Redemption unless it has received the prior written consent to such Optional Redemption from the Bank.

ARTICLE V

CONVERSION OF INTEREST RATE; DEMAND PURCHASE OPTION

Section 5.01. Conversion of Interest Rate on Conversion Date. The interest rate on the Bonds shall be converted from the Floating Rate to the Fixed Rate upon the exercise by the Company of the Conversion Option, and the Bonds shall be subject to mandatory tender for purchase by the Owners thereof on the Conversion Date. To exercise the Conversion Option, the Company shall notify the Trustee, the Tender Agent, the Bank, the Board and the Remarketing Agent at least thirty-five (35) days prior to the Conversion Date of such exercise, cause the Remarketing Agent to furnish to the Trustee the information set forth in paragraphs 1 and 4 below and, thereafter cause the Trustee to deliver or mail by first class mail a notice at least twenty (20) days but not more than thirty
(30) days prior to the Conversion Date to the Owner of each Bond at the address shown on the registration books of the Bond Registrar. No such notice may be given unless the Trustee first receives: (i) an opinion of nationally recognized bond counsel to the effect that the proposed conversion of the interest rate on the Bonds will not cause the interest on the Bonds to be includable in gross income of the Bondholders for federal income tax purposes; (ii) a commitment from the Bank or a Substitute Bank to issue or arrange for the issuance of a Substitute Letter of Credit to take effect on the Conversion Date, together with a proposed form of such Substitute Letter of Credit; and (iii) a Company certificate to the effect that each of the Company's representations and warranties made in the Agreement and in any other agreements or certificates given by the Company in connection with the issuance of the Bonds remain true and correct in all material respects as of the proposed Conversion Date. Any notice given as provided in this section shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice. Said notice shall state in substance the following:

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1. the Conversion Date;

2. that the existing Letter of Credit will expire five (5) Business Days after the Conversion Date;

3. that unless firm commitments for the purchase of all Outstanding Bonds have been received on or prior to the fifth (5th) Business Day prior to the proposed Conversion Date, the Company has the option to rescind an optional conversion of the Bonds; and

4. that in the event the Company elects not to rescind the optional conversion of the Bonds, all Bonds shall be subject to mandatory purchase on the Conversion Date pursuant to this Section 5.01.

On or prior to the Conversion Date, Owners of Bonds shall be required to deliver their Bonds to the Tender Agent for purchase at the Purchase Price, and any such Bonds not delivered to the Tender Agent on or prior to the Conversion Date ("Undelivered Bonds"), for which there has been irrevocably deposited in trust with the Trustee or the Tender Agent an amount of Available Money sufficient to pay the Purchase Price of the Undelivered Bonds, shall be deemed to have been purchased pursuant to this Section 5.01 and are deemed to be no longer Outstanding with respect to such prior Owners. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS ON OR PRIOR TO THE CONVERSION DATE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE CONVERSION DATE) OTHER THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO THE BENEFIT OF THIS INDENTURE, EXCEPT FOR THE PURPOSE OF PAYMENT OF THE PURCHASE PRICE THEREFOR.

Notwithstanding the foregoing provisions, to the extent that at the close of the fifth Business Day prior to the proposed Conversion Date, the Remarketing Agent has not presented to the Company firm commitments for the purchase of all of the Bonds, the Company, at its option, may rescind an optional conversion of the Bonds. Any such election to rescind must be made by the close of the fourth Business Day prior to the proposed Conversion Date and the Company shall give written notice to the Trustee, the Tender Agent and the Bank of its decision to rescind by such time. The Company shall cause the Trustee to immediately notify the Owners of such rescission and thereafter the Bonds shall bear interest at the Floating Rate in effect for the current Weekly Period and thereafter the Bonds shall bear interest at the Floating Rate until any subsequent Conversion Date effected in accordance with this Indenture.

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In the event the Company rescinds the proposed optional conversion in accordance with the terms of the foregoing paragraph, the Letter of Credit then in effect will remain in effect in accordance with its terms.

The Bonds are subject to mandatory purchase in whole on the Conversion Date, at a purchase price equal to 100% of the principal amount thereof being purchased, plus accrued interest to the purchase date; provided, however, that:
(i) all Pledged Bonds for which a commitment to purchase has not been received in connection with a conversion of the Bonds to a Fixed Rate, shall be redeemed or otherwise paid by the Company on or before the Conversion Date; and (ii) no such mandatory purchase shall take place in the event the Company exercises its right to rescind the conversion.

Section 5.02. Delivery of Bonds After Conversion Date. At any time prior to the Record Date preceding the first Interest Payment Date following the Conversion Date, the Trustee or the Tender Agent, as the case may be, shall deliver Bonds in the form of Exhibit "B" hereto. Prior to the delivery by the Trustee of such Bonds, there shall be filed with the Trustee a request and authorization to the Trustee on behalf of the Board, which shall be executed by the Chairman or Vice Chairman, Secretary, Assistant Secretary or any authorized officer of the Board to authenticate and deliver the Bonds, as executed by the Board, to the purchasers thereof. Such delivery shall be made by the Trustee or the Tender Agent, as the case may be, without making any charge therefor to the Owner of such Bonds.

Section 5.03. Mandatory Purchase upon Substitution of Letter of Credit. Prior to the Conversion Date, the Bonds are subject to mandatory purchase in whole on the Substitution Date, at a purchase price equal to 100% of the principal amount thereof being purchased, plus accrued interest to the purchase date. The Trustee shall deliver or mail by first class mail a notice at least twenty (20) days but not more than thirty (30) days prior to the Substitution Date to the Owner of each Bond at the address shown on the registration books of the Bond Registrar notifying such Owner that their Bonds are subject to mandatory purchase. No such notice may be given unless the Company shall have satisfied the provisions of Section 4.3 of the Agreement. Any notice given as provided in this Section 5.03 shall be conclusively presumed to have been given, whether or not the Owner receives the notice. Said notice shall state in substance the following:

(1) the Substitution Date;

(2) that the existing Letter of Credit securing such Bonds will expire five (5) Business Days after the Substitution Date; and

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(3) that if the Company satisfies the conditions precedent to delivery of the Substitute Letter of Credit, all Bonds shall be subject to mandatory purchase on the Substitution Date pursuant to this Section 5.03.

On or prior to the Substitution Date, Owners of Bonds shall be required to deliver their Bonds to the Tender Agent for purchase at the Purchase Price, and any such Bonds not delivered to the Tender Agent on or prior to the Substitution Date ("Undelivered Bonds"), for which there has been irrevocably deposited in trust with the Trustee or the Tender Agent an amount of money sufficient to pay the Purchase Price of the Undelivered Bonds, shall be deemed to have been purchased pursuant to this Section 5.03 and are deemed to be no longer Outstanding with respect to such prior Owners. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS ON OR PRIOR TO THE SUBSTITUTION DATE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE SUBSTITUTION DATE) OTHER THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO THE BENEFIT OF THIS INDENTURE, EXCEPT FOR THE PURPOSE OF PAYMENT OF THE PURCHASE PRICE THEREFOR.

Notwithstanding the foregoing provisions, to the extent that at the close of the fifth Business Day prior to the proposed Substitution Date, the Company has not delivered to the Board, the Trustee and the Remarketing Agent the items set forth in Section 4.3(i) through (iv) of the Agreement, the mandatory purchase of Bonds shall be rescinded and the Trustee shall notify the Owners of such rescission immediately and thereafter the Bonds shall continue to be secured by the existing Letter of Credit until its termination date.

Section 5.04. Demand Purchase Option. Prior to the Conversion Date, any Bond shall be purchased at the Purchase Price from the Owner thereof upon:

(i) delivery by such Owner to the Trustee and the Tender Agent at their Principal Corporate Trust Office and Delivery Office, respectively, and to the Remarketing Agent at its principal office set forth in
Section 12.08 hereof, of a notice (the "Demand Purchase Notice") (said notice to be irrevocable and effective upon receipt) which states: (1) the aggregate principal amount and bond numbers of the Bonds to be purchased; and (2) the date on which such Bonds are to be purchased, which date shall be a Business Day not prior to the seventh (7th) day next succeeding the date of delivery of such notice and which date shall be prior to the Conversion Date;

(ii) if such Bonds are to be purchased prior to an Interest Payment Date and after the Record Date in respect thereof, delivery to the Tender Agent together with the Demand Purchase Notice described in (i) above, of a nonrecourse due-bill, payable to bearer, for interest due on such interest payment date; and

(iii) delivery to the Tender Agent at its Delivery Office at or prior to 10:00 a.m., New York City time, on the date designated for purchase in the applicable Demand Purchase Notice of such Bonds to be purchased, with an appropriate endorsement for transfer or accompanied by a bond power endorsed in blank.

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Any Bond as to which a Demand Purchase Notice has been delivered pursuant to paragraph (i) above, must be delivered to the Tender Agent, as provided in (iii) above, and any such Bond not so delivered ("Undelivered Bonds"), for which there has been irrevocably deposited in trust with the Trustee or the Tender Agent an amount of money sufficient to pay the Purchase Price thereof, shall be deemed to have been purchased at the Purchase Price pursuant to this Section 5.04 and are deemed to be no longer Outstanding with respect to such tendering Owner. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS AS SPECIFIED ABOVE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE DATE DESIGNATED FOR PURCHASE IN THE APPLICABLE DEMAND PURCHASE NOTICE) OTHER THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO THE BENEFIT OF THE INDENTURE, EXCEPT FOR THE PAYMENT OF THE PURCHASE PRICE THEREFOR.

Notwithstanding the foregoing provisions, in the event any Bond as to which the Owner thereof has exercised the Demand Purchase Option is remarketed to such Owner pursuant to the Remarketing Agreement, such Owner need not deliver such Bond to the Tender Agent as provided in (iii) above, although such Bond shall be deemed to have been delivered to the Tender Agent, redelivered to such Owner, and remarketed for purposes of this Indenture, including, without limitation, for purposes of adjusting the Floating Rate as provided in Section 2.02(C) hereof.

Notwithstanding anything contained herein to the contrary, an Owner of a Bond shall not be entitled to exercise the Demand Purchase Option described herein if there shall have occurred any Event of Default in respect of which the principal of all Bonds Outstanding shall have been declared immediately due and payable under the Indenture and such declaration shall not have been annulled.

Section 5.05. Funds for Purchase of Bonds.

(a) On the date Bonds are to be purchased pursuant to
Section 5.01, Section 5.03 or Section 5.04 hereof, such Bonds shall be purchased at the Purchase Price only from the funds listed below. Subject to the provisions of Section 6.12(b), funds for the payment of the Purchase Price shall be derived from the following sources in the order of priority indicated:

(i) moneys drawn by the Trustee under the Letter of Credit (in the event of a drawing on the Letter of Credit to fund payment of the Purchase Price of Bonds tendered pursuant to Section 5.03 hereof, the Trustee shall draw on the existing Letter of Credit and not the Substitute Letter of Credit to fund such payment);

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(ii) proceeds of the remarketing of the Bonds; and

(iii) any other Available Moneys furnished to the Trustee or the Tender Agent and available for such purpose.

(b) Payment for the Bonds purchased pursuant to Sections 5.01, 5.03 or 5.04 shall be made as follows:

(i) On the date on which such Bonds are to be purchased (the "Purchase Date"), the Trustee shall make a drawing pursuant to the Letter of Credit in respect of the Purchase Price of such Bonds. In connection therewith, the Trustee shall prepare and present to the Letter of Credit Bank the appropriate certificates required under the Letter of Credit by 12:00 noon, New York City time on the Business Day immediately preceding the Purchase Date.

(ii) By not later than 10:00 a.m., New York City time, on the Purchase Date, the Remarketing Agent shall give telephonic notice, promptly confirmed in writing, to the Bank, the Trustee and the Tender Agent, specifying:

(1) the total principal amount of Bonds, if any, remarketed by it; and

(2) the names of the persons to whom such Bonds were sold and are to be registered, each such person's address and social security number or taxpayer identification number, the denominations in which replacement Bonds are to be prepared, and any other appropriate registration and transfer instructions.

(iii) There is hereby established with the Tender Agent a special fund to be designated the "Bond Purchase Fund" and therein two separate and segregated accounts to be designated the "Remarketing Account" and the "Bank Account." An amount equal to the proceeds received by the Trustee pursuant to a draw under the Letter of Credit and all other amounts, if any, certified by the Bank, as due it, but unpaid, under the Loan Agreement, shall be transferred by the Trustee in immediately available funds to the Tender Agent for deposit in the Bank Account no later than 12:30 p.m., New York City time on the applicable Purchase Date.

(iv) No later than 1:00 p.m., New York City time, on each Purchase Date, the Tender Agent shall give telephonic notice (promptly confirmed by telecopy) to the Remarketing Agent of the amount deposited in the Bank Account on such date. No later than 2:00 p.m., New York City time, on each Purchase Date the Remarketing Agent shall: (x) transfer to the Letter of Credit Bank an amount of the proceeds of the remarketing of the Bonds equal to the amount deposited in the Bank Account on such Purchase Date unless the Bank notifies the Trustee in writing to the contrary; (y) transfer the remainder of the proceeds of the remarketing of the Bonds to the Tender Agent for deposit in the Remarketing Account and shall give telephonic notice (promptly confirmed by telecopy) to the Tender Agent of the amount of such proceeds transferred to the Bank; and (z) give telephonic notice, promptly confirmed in writing, to the Company of the total principal amount of Unremarketed Bonds, if any.

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(v) The Tender Agent shall pay the Purchase Price to the tendering Bondholders from the amounts on deposit in the Bank Account to the extent available. If amounts on deposit in the Bank Account are insufficient to pay the Purchase Price to the tendering Bondholders, the Tender Agent shall make up any such deficiency from amounts on deposit in the Remarketing Account.

(vi) The Letter of Credit Bank shall give telephonic confirmation to the Tender Agent and the Trustee by 4:00 p.m., New York City time on the applicable Purchase Date of its receipt of the remarketing proceeds described in Section 5.05(b)(iv) hereof.

Section 5.06. Delivery of Purchased Bonds.

(a) Remarketed Bonds shall be delivered by the Tender Agent, at its Delivery Office, to or upon the order of the purchasers thereof.

(b) Unremarketed Bonds purchased with funds drawn under the Letter of Credit shall be delivered by the Tender Agent to the Pledged Bonds Custodian or otherwise upon the order of the Bank pursuant to the Pledge Agreement.

(c) Unremarketed Bonds purchased with moneys described in
Section 5.05(a)(iii) hereof shall, at the direction of the Company, be: (i) delivered as instructed by the Company; or (ii) delivered to the Trustee for cancellation; provided, however, that any Bonds so purchased after the selection thereof by the Trustee for redemption shall be delivered to the Trustee for cancellation.

(d) The Tender Agent shall deliver to the person to whom the Tender Agent is to deliver such Bonds, the nonrecourse due-bills, if any, delivered to the Tender Agent with respect to such Bonds in accordance with
Section 5.04 hereof.

Bonds delivered as provided in this Section shall be registered in the manner directed by the recipient thereof.

Section 5.07. Sale of Bonds by Remarketing Agent.

(a) On each Purchase Date, the Remarketing Agent shall offer for sale and use its best efforts to sell, as agent of the Company, all Bonds tendered or deemed tendered for purchase on such Purchase Date at the Purchase Price thereof and, if such Bonds are not sold on such date, the Remarketing Agent shall continue, for a period not in excess of thirty (30) days thereafter, to use its best efforts to sell such Bonds.

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(b) Notwithstanding anything to the contrary herein:(i) the Remarketing Agent shall use its best efforts to remarket any Bonds tendered or deemed tendered for purchase in such a manner that, immediately following the remarketing of any Bonds, at least one (1) Holder will own at least $200,000 in aggregate principal amount of Bonds; and (ii) the Remarketing Agent shall not remarket any Bonds to the Board, the Company or any affiliate thereof.

Section 5.08. Delivery of Proceeds of Sale of Purchased Bonds.

(a) Except in the case of the sale of any Pledged Bonds, the proceeds of the sale of any Bonds delivered or deemed delivered to the Tender Agent pursuant to Sections 5.01, 5.03 or 5.04 hereof, to the extent not required to pay the Purchase Price to tendering Bondholders and not required to reimburse the Letter of Credit Bank or the Bank under the Letter of Credit or the Loan Agreement, shall be paid to or upon the order of the Company.

(b) In the event the Remarketing Agent shall have remarketed any Pledged Bonds and the Company or the Remarketing Agent shall have directed the Bank to cause the Pledged Bonds Custodian to deliver such Pledged Bonds to the Tender Agent pursuant to the Pledge Agreement, such Bonds shall be delivered to the Tender Agent and the proceeds of sale of such Bonds shall be delivered to the Delivery Office of the Tender Agent, and shall be paid to the Letter of Credit Bank or the Bank upon the order of the Bank; provided that any amounts so paid in excess of amounts then due to the Letter of Credit Bank or the Bank in respect of drawings under the Letter of Credit shall be delivered by the Bank to or upon the order of the Company; provided further that Pledged Bonds shall not be delivered to the Tender Agent until the Letter of Credit has been reinstated in accordance with the terms of the Pledge Agreement and the Letter of Credit.

Section 5.09. Duties of Trustee and Tender Agent with Respect to Purchase of Bonds.

(a) The Tender Agent shall hold all Bonds delivered to it pursuant to Sections 5.01, 5.03 or 5.04 hereof in trust for the benefit of the respective Owners of Bonds which shall have so delivered such Bonds until moneys representing the Purchase Price of such Bonds shall have been delivered to or for the account of or to the order of such Owners of Bonds. Upon delivery of monies representing the Purchase Price of such Bonds to or for the account of or to the order of such Owners of Bonds, the Tender Agent shall deliver all such Unremarketed Bonds, the funds for which have been obtained by a drawing under the Letter of Credit, to the Pledged Bonds Custodian pursuant to Section 5.06(b) hereof for the purpose of perfecting the Bank's security interest therein under the Pledge Agreement unless the Bank shall direct the Tender Agent to deliver such Bonds to or upon the order of the Bank in accordance with Section 5.06 hereof.

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(b) The Trustee and the Tender Agent shall hold all moneys delivered to them pursuant to this Indenture for the purchase of Bonds in a separate account, in trust for the benefit of the Bank or, in the case of remarketed Bonds, the purchasers of such Bonds, until the Bonds purchased with such moneys shall have been delivered to or for the account of the Pledged Bonds Custodian, the Bank or to such other purchaser, as appropriate.

(c) The Trustee shall deliver to the Company and the Bank a copy of each notice delivered to it in accordance with Section 5.04 within two
(2) days of the receipt thereof.

(d) As soon as possible, but not later than the close of business on any date designated for purchase of Bonds in accordance with Section 5.04; the Tender Agent shall give telephonic or telegraphic notice to the Remarketing Agent and the Trustee specifying the principal amount of Bonds delivered or deemed delivered for purchase on such date.

(e) The Trustee shall draw moneys under the Letter of Credit in accordance with the terms thereof to the extent required by Sections 5.05 and 6.12 hereof to provide for timely payment of the Purchase Price of Bonds.

Section 5.10. No Purchases or Sales After Certain Defaults. Anything in this Indenture to the contrary notwithstanding, there shall be no purchases or sales of Bonds pursuant to Section 5.04 if there shall have occurred any Event of Default in respect of which the principal of all Bonds Outstanding shall have been declared immediately due and payable pursuant to Section 8.02 and such declaration shall not have been annulled. If the Trustee shall have given a notice of a call for redemption pursuant to Section 4.03 hereof and such notice shall not have been rescinded, the Remarketing Agent shall provide a notice of such redemption to any prospective purchaser of such Bonds upon the remarketing of any Bonds tendered pursuant to Section 5.04 hereof. Nothing in this Section is intended to limit secondary trading or transfer of the Bonds.

ARTICLE VI

REVENUES AND FUNDS

Section 6.01. Creation of the Bond Fund. There is hereby created and established with the Trustee a trust fund to be designated "Bond Fund" which shall be used to pay when due the principal and Purchase Price of, premium, if any, and interest on the Bonds.

Section 6.02. Payments into the Bond Fund. There shall be deposited into the Bond Fund from time to time the following:

(a) [Reserved]

(b) any amount deposited into the Bond Fund pursuant to
Section 6.04 hereof;

(c) all payments specified in Sections 5.3 and 5.4 of the Agreement (other than amounts paid for the Trustee's or the Board's own account);

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(d) any moneys received pursuant to the Collateral Documents;

(e) any moneys drawn under the Letter of Credit which moneys shall be deposited or credited (in the case of a draw to pay the Purchase Price) in a separate subaccount of the Bond Fund and shall not be commingled with any other moneys held by the Trustee;

(f) amounts, if any, held by the Trustee pursuant to Section 5.09 hereof; and

(g) all other moneys received by the Trustee under and pursuant to any of the provisions of the Agreement which are required to be or which are accompanied by directions that such moneys are to be paid into the Bond Fund.

Section 6.03. Use of Moneys in the Bond Fund. Except as provided in Sections 5.05, 5.09 and 6.11 hereof, moneys in the Bond Fund shall be used solely for the payment of the principal of, premium, if any, and interest on the Bonds, for the redemption of the Bonds prior to maturity and for payment of the Acceleration Price as defined in Section 8.02 hereof. Subject to the provisions of Section 6.12(b) hereof, funds for such payments of redemption price and principal of and premium, if any, and interest on the Bonds shall be derived from the following sources in the order of priority indicated:

(i) moneys drawn by the Trustee under the Letter of Credit;

(ii) amounts deposited into the Bond Fund which constitute Available Moneys (other than moneys drawn by the Trustee under the Letter of Credit); and

(iii) any other moneys furnished to the Trustee and available for such purpose.

Section 6.04. Custody of Separate Trust Fund. The Trustee is authorized and directed to hold all Net Proceeds from any insurance proceeds or condemnation award and disburse such proceeds in accordance with Article VII of the Agreement. If the Company directs that any portion of such Net Proceeds be applied to redeem Bonds, the Trustee shall deposit such Net Proceeds in a separate sub-account of the Bond Fund, and the Board covenants and agrees to take and cause to be taken any action requested of the Board to redeem on the earliest possible redemption date the amount of Bonds so specified by the Company.

Section 6.05. [Reserved]

Section 6.06. [Reserved]

Section 6.07. [Reserved]

Section 6.08. [Reserved]

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Section 6.09. Nonpresentment of Bonds. In the event any Bond shall not be presented for payment when the principal thereof becomes due, either at maturity, or at the date fixed for redemption thereof, or otherwise, if Available Moneys sufficient to pay any such Bond shall have been made available to the Trustee for the benefit of the Owner thereof, all liability of the Board to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely discharged, and thereupon it shall be the duty of the Trustee to hold such funds uninvested, without liability for interest thereon, for the benefit of the Owner of such Bond who shall thereafter be restricted exclusively to such funds for any claim of whatever nature on his part under this Indenture with respect to such Bond.

Any moneys so deposited with and held by the Trustee not so applied to the payment of Bonds within five (5) years after the date on which the same shall have become due shall be repaid by the Trustee to the Company upon written direction of a Company Representative, and thereafter Owners of Bonds shall be entitled to look only to the Company for payment, and then only to the extent of the amount so repaid, and all liability of the Trustee with respect to such money shall thereupon cease, and the Company shall not be liable for any interest thereon and shall not be regarded as a trustee of such money.

Section 6.10. Moneys to be Held in Trust. All moneys required to be deposited with or paid to the Trustee for the account of any fund or account referred to in any provision of this Indenture or the Agreement shall be held by the Trustee in trust, and shall, while held by the Trustee, constitute part of the Trust Estate and be subject to the lien and security interest created hereby.

Section 6.11. [Reserved]

Section 6.12. Letter of Credit and Repayment to the Letter of Credit Bank or the Bank from the Bond Fund.

(a) During the term of the Letter of Credit, the Trustee shall draw moneys under the Letter of Credit in accordance with the terms thereof: (i) in an amount sufficient to pay when due the principal of (whether by reason of maturity, redemption, conversion, acceleration or otherwise) , and interest and, to the extent the Letter of Credit covers same, any premium on the Bonds; and (ii) in an amount sufficient to pay when due the Purchase Price of Bonds. Within two (2) Business Days after the last Determination Date of each month, the Trustee shall give written notice (which notice may be transmitted via facsimile) to the Company, the Letter of Credit Bank and the Bank of the amount that the Trustee will draw under the Letter of Credit on the next Interest Payment Date. After the Trustee draws moneys under the Letter of Credit to pay the items set forth above, any amounts paid by the Company under the Agreement into the Bond Fund or any other fund or account created hereunder shall be paid as soon as possible to the Letter of Credit Bank, unless the Bank notifies the Trustee in writing to the contrary, to reimburse the Letter of Credit Bank or the Bank for the monies so drawn under the Letter of Credit as set forth above and for all other amounts, if any, certified by the Bank as due it but unpaid under the terms of the Loan Agreement.

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(b) Notwithstanding any provision to the contrary which may be contained in this Indenture, including, without limitation, Section 6.12(a):
(i) in computing the amount to be drawn under the Letter of Credit on account of the payment of the principal or Purchase Price of, interest or, to the extent the Letter of Credit covers same, any premium, on the Bonds, the Trustee shall exclude any such amounts in respect of any Bonds which it is advised by the Tender Agent (pursuant to Section 5.09(d) hereof) are Pledged Bonds prior to the date such payment is due; and (ii) amounts drawn by the Trustee under the Letter of Credit shall not be applied to the payment of the Purchase Price of any Bonds which are Pledged Bonds prior to the date such payment is due.

(c) The Letter of Credit shall terminate in accordance with its terms on the Letter of Credit Termination Date. Upon such termination, the Trustee shall deliver the terminated Letter of Credit to the Bank, together with such certificates as may be required by the terms of the Letter of Credit.

Section 6.13. [Reserved]

Section 6.14. Investment of Moneys in Funds. All moneys in any of the funds established pursuant to this Indenture (except moneys obtained from a draw on the Letter of Credit, which moneys shall be held uninvested) shall be invested by the Trustee, as directed in writing by the Company, solely in Investment Securities except with respect to Available Moneys held by the Trustee for the payment of Undelivered Bonds, which Available Moneys the Trustee shall not invest. Investment Securities may be purchased at such prices as the Trustee may in its discretion determine or as may be directed by the Company. All Investment Securities shall be acquired subject to the limitations as to maturities hereinafter in this Section set forth and such additional limitations or requirements consistent with the foregoing as may be established by request of the Company.

To the extent the Bank has not been reimbursed under the Loan Agreement and has notified the Trustee of same in writing, all interest, profits and other income received from the investment of moneys in any fund established pursuant to this Indenture shall be transferred to the Letter of Credit Bank or the Bank as specified by the Bank. Otherwise, such amounts shall be deposited to the appropriate fund or account in which such investments were made. Notwithstanding anything to the contrary contained in this paragraph, an amount of interest received with respect to any Investment Security equal to the amount of accrued interest, or premium paid, if any, paid as part of the purchase price of such Investment Security shall be credited to the fund from which such accrued interest was paid.

Investment Securities acquired as an investment of moneys in any fund established under this Indenture shall be credited to such fund. For the purpose of determining the amount in any fund, all Investment Securities credited to such fund shall be valued at the lesser of cost or par value plus, prior to the first payment of interest following purchase, the amount of accrued interest, if any, paid as a part of the purchase price.

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The Trustee may act as principal or agent in the making or disposing of any investment. The Trustee may sell or present for redemption, any Investment Securities so purchased whenever it shall be necessary to provide moneys to meet any required payment, transfer, withdrawal or disbursement from the fund to which such Investment Security is credited, and the Trustee shall not be liable or responsible for any loss resulting from such investment.

ARTICLE VII

PARTICULAR COVENANTS

Section 7.01. Punctual Payment. The Board shall punctually pay or cause to be paid the principal, premium, if any, and interest to become due in respect of all the Bonds, in strict conformity with the terms of the Bonds and of this Indenture, according to the true intent and meaning thereof, but only out of Revenues and other assets pledged for such payment as provided in this Indenture. The Board shall be deemed to have discharged its obligations under this Section by including a covenant to such effect by the Company in the Agreement.

Section 7.02. Extension of Payment of Bonds. The Board shall not directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the time of payment of any claims for interest by the purchase or funding of such Bonds or claims for interest or by any other arrangement and in case the maturity of any of the Bonds or the time of payment of any such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled, in case of any default hereunder, to the benefits of this Indenture, except subject to the prior payment in full of the principal of all of the Bonds then outstanding and of all claims for interest thereon which shall not have been so extended. Nothing in this Section shall be deemed to limit the right of the Board to issue Bonds for the purpose of refunding any Outstanding Bonds, and such issuance shall not be deemed to constitute an extension of maturity of Bonds.

Section 7.03. Against Encumbrances. The Board shall not create, or permit the creation of, any pledge, lien, charge or other encumbrance upon the Revenues and other assets pledged or assigned under this Indenture while any of the Bonds are Outstanding, except the pledge and assignment created by this Indenture and the lien created by the Bank Mortgage and will assist the Trustee in contesting any such pledge, lien, charge or other encumbrance which may be created. Subject to this limitation, the Board expressly reserves the right to enter into one or more other indentures for any of its corporate purposes, including other programs under the Act, and reserves the right to issue other obligations for such purposes.

Section 7.04. Power to Issue Bonds and Make Pledge and Assignment. The Board represents and covenants that it is duly authorized pursuant to law to issue the Bonds and to enter into this Indenture and to pledge and assign the Revenues and other assets pledged and assigned, respectively, under this Indenture in the manner and to the extent provided in this Indenture. The Bonds and the provisions of this Indenture are and will be the legal, valid and binding limited obligations of the Board in accordance with their terms, and the Board and Trustee shall at all times, to the extent permitted by law, defend, preserve and protect said pledge and assignment of Revenues and other assets and all the rights of the Bondholders under this Indenture against all claims and demands of all Persons whomsoever.

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Section 7.05. Accounting Records and Financial Statements. (A) The Trustee shall at all times keep, or cause to be kept, proper books of record and account as shall be consistent with prudent industry practice, in which complete and accurate entries shall be made of all transactions relating to the proceeds of Bonds, the Revenues, the Agreement and all funds established pursuant to this Indenture. Such books of record and account shall be available for inspection by the Board, the Company, the Bank and any bondholder, or his agent or representative duly authorized in writing, at reasonable hours and under reasonable circumstances.

(B) The Trustee shall within 30 days after the end of each month furnish to the Company a monthly statement (which need not be audited) covering receipts, disbursements, allocation and application of Revenues and any other moneys (including proceeds of Bonds) in any of the funds and accounts established pursuant to this Indenture for such month.

Section 7.06. Reserved.

Section 7.07. Other Covenants. (A) The Trustee shall promptly collect all amounts due from the Company pursuant to the Agreement, and upon an Event of Default (as defined in the Agreement) shall perform all duties imposed upon it pursuant to the Agreement and shall diligently enforce, and take all steps, actions and proceedings reasonably necessary for the enforcement of all of the rights of the Board and all of the obligations of the Company.

(B) The Board shall not amend, modify or terminate any of the terms of the Agreement, or consent to any such amendment, modification or termination, without the written consent of the Trustee. The Trustee shall give such written consent only if (1) notification of such amendment, modification or termination has been given to each rating agency then rating the Bonds and to the Holders, (2) the Trustee receives the written consent of the Bank, (3)(i) such amendment, modification or termination will not materially adversely affect the interests of the Bondholders or result in any material impairment of the security hereby given for the payment of the Bonds or (ii) the Trustee first obtains the written consent of the Bank and the Holders of a majority in principal amount of the Bonds then Outstanding to such amendment, modification or termination and provides notice of such amendment, modification or termination and of such written consent to the Holders, provided that no such amendment, modification or termination shall reduce the amount of the lease payments to be made to the Board or the Trustee by the Company pursuant to the Agreement, or extend the time for making such payments, without the written consent of all of the Holders of the Bonds then Outstanding, and (4) the Board shall have delivered to the Trustee an opinion of Counsel satisfactory to the Trustee that all of the provisions and conditions set forth in this Section 7.07(B) have been satisfied.

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Section 7.08. Reserved.

Section 7.09. Further Assurances. The Board and the Trustee will make, execute and deliver any and all such further indentures, instruments and assurances as may be reasonably necessary or proper to carry out the intention or to facilitate the performance of this Indenture and for the better assuring and confirming unto the Holders of the Bonds of the rights and benefits provided in this Indenture.

ARTICLE VIII

EVENTS OF DEFAULT AND REMEDIES OF BONDHOLDERS

Section 8.01. Events of Default. The following events shall be Events of Default:

(a) default in the due and punctual payment of the principal of any Bond when and as the same shall become due and payable, whether at maturity as therein expressed, by proceedings for redemption, by acceleration, or otherwise; or

(b) default in the due and punctual payment of any installment of interest on any Bond when and as the same shall become due and payable; or

(c) failure to pay the Purchase Price on any Bond tendered pursuant to Article V when such payment is due; or

(d) default by the Board in the observance of any of the other covenants, agreements or conditions on its part in this Indenture or in the Bonds, if such default shall have continued for a period of sixty (60) days after written notice thereof, specifying such default and requiring the same to be remedied, shall have been given to the Board by the Trustee, or to the Board and the Trustee by the Holders of not less than twenty-five per cent (25%) in aggregate principal amount of the Bonds at the time Outstanding; or

(e) if there occurs an Event of Default as defined in the Agreement; or

(f) the Trustee's receipt of written notice from the Bank that the Bank has declared an Event of Default under the provisions of the Loan Agreement and instructing the Trustee to declare the principal amount of the Outstanding Bonds to be immediately due and payable; or

(g) if, after a draw under the Letter of Credit and in accordance with the terms thereof, the Trustee shall have received notice from the Bank that the amount of such draw corresponding to the payment of interest on the Bonds shall not be reinstated in the amount and in the manner set forth in the Letter of Credit.

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Upon actual knowledge of the existence of any Event of Default or of any breach of any covenant or any fact or circumstance which, except for any grace period permitted by this Indenture or the Agreement, would result in any breach of a covenant or Event of Default by the Company hereunder or thereunder, the Trustee shall, as soon as practicable, notify the Bank, the Company, the Board, the Tender Agent and the Remarketing Agent. Anything contained in this Indenture to the contrary notwithstanding: (i) no Event of Default under subsections (d) or (e) above shall occur without the prior written consent of the Bank so long as the Bank is not in default under the terms of the Letter of Credit; and (ii) the Trustee shall not notify bondholders of the existence of any Event of Default without the prior written consent of the Bank (except upon the occurrence of an Event of Default under subsections 8.01(f) or (g) hereof), as long as the Bank is not in default under the terms of the Letter of Credit.

Section 8.02. Acceleration. If any Event of Default under Section 8.01 hereof occurs, the Trustee (with the written consent of the Bank provided the Letter of Credit Bank is not in default of its obligations under the Letter of Credit) may, and upon request of the Owners of 25% in principal amount of the Bonds then Outstanding shall, by written notice to the Board, the Bank and the Company, declare the principal amount of all Bonds then Outstanding and the interest accrued thereon to such date (the "Acceleration Date") to be due and the Acceleration Price (as such phrase is hereinafter defined) shall thereupon become payable on the first (lst) Business Day following the Acceleration Date (the "Payment Date"). Thereupon, the Trustee, among other things, shall draw immediately upon the Letter of Credit as set forth in Section 6.12 hereof. Interest on the accelerated Bonds shall cease to accrue on the Acceleration Date. Accelerated Bonds shall be payable at a price equal to 100% of the aggregate principal amount thereof plus interest accrued to the Acceleration Date (the "Acceleration Price"). Notwithstanding anything contained herein to the contrary, upon the occurrence of an Event of Default described in Section 8.01(f) or (g), the Trustee shall, by written notice to the Bank, the Company and the Board declare immediately due and payable the principal amount of, and interest accrued on, the Outstanding Bonds.

Any such declaration is subject to the condition that if, at any time after such declaration and before any judgment or decree for the payment of the moneys due shall have been obtained or entered, the Letter of Credit shall have been reinstated in full as to principal and interest and the reasonable charges and expenses of the Trustee, and any and all other defaults known to the Trustee (other than in the payment of principal of and interest on the Bonds due and payable solely by reason of such declaration) shall have been made good or cured to the satisfaction of the Trustee or provision deemed by the Trustee to be adequate shall have been made therefor, then, and in every such case, the Holders of not less than 25% in aggregate principal amount of the Bonds then Outstanding, by written notice to the Board, the Bank, the Company and the Trustee, or the Trustee if such declaration was made by the Trustee, may, on behalf of the Holders of all of the Bonds, rescind and annul such declaration and its consequences and waive such default; but such rescission and annulment shall not extend to or affect any subsequent default, and shall not impair or exhaust any right or power in consequence thereof. The foregoing to the contrary notwithstanding, Owners of 25% in principal amount of the Bonds then outstanding shall have no right to request the Trustee to accelerate the Bonds under this
Section 8.02 and the Trustee shall not be obligated to give any Bondholder notice of a default under the Indenture (except upon the occurrence of an Event of Default under Section 8.01(f) or (g) hereof), the Agreement or any other documents executed and delivered in connection with the Bonds without the prior written consent of the Bank, unless the Letter of Credit Bank shall be in default of its obligations under the Letter of Credit or a voluntary or involuntary case has been commenced by the filing of a petition under the Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition debts by or against the Bank.

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Upon any declaration of acceleration hereunder, the Trustee shall as soon as possible give written notice of the acceleration to the Bondholders as set forth below. In addition, notice of such acceleration shall be mailed, by registered or certified mail or overnight mail, to the rating agency then rating the Bonds, if any, but failure to mail any such notice or any defect in the mailing thereof shall not affect the validity of such acceleration. Such notice of acceleration: (i) shall be given in the name of the Board; (ii) shall identify the accelerated Bonds (by name, date of issue, interest rate and maturity date); (iii) shall specify the Acceleration Date; (iv) shall specify the Payment Date and the Acceleration Price; (v) shall state that the interest on the accelerated Bonds ceased to accrue on the Acceleration Date; (vi) shall state the reason for the acceleration; and (vii) shall state that on the Payment Date the Acceleration Price will be payable at the principal corporate trust office of the Trustee. The Trustee shall use "CUSIP" numbers on such notices as a convenience to Bondholders and such notice shall state that no representation is made as to the correctness of such "CUSIP" numbers either as printed on the Bonds or as contained in any notice of acceleration and that reliance may be placed on the registration and description printed on the Bonds.

Upon acceleration pursuant to this Section 8.02, the Trustee shall immediately exercise such rights as it may have under the Agreement to declare all payments thereunder to be immediately due and payable and shall immediately draw upon the Letter of Credit as provided in Section 6.12 hereof in an amount that, together with any Available Moneys on deposit in the Bond Fund (excluding Available Moneys held by the Trustee for the Owner of any Bond not presented for payment as provided in Section 6.09 hereof) and irrevocably committed to the payment of principal of and interest on the Bonds, is sufficient to pay the Acceleration Price due on the Outstanding Bonds on the Payment Date.

Upon receipt by the Trustee of any amount from the Letter of Credit Bank under the preceding paragraphs of this Section 8.02 (or after receipt by the Trustee of any amounts from the Letter of Credit Bank under any other provision of this Indenture), the Bank shall be subrogated to the right, title and interest of the Trustee and the Bondholders in and to this Indenture, the Agreement, and any other security held for the payment of the Bonds (other than said funds), all of which, upon payment of any fees and expenses due and payable to the Trustee pursuant to the Agreement or this Indenture, shall be assigned by the Trustee to the Bank.

Section 8.03. Other Remedies. If any Event of Default occurs and is continuing, the Trustee, before or after declaring the principal of the Bonds immediately due and payable, may enforce each and every right granted to the Board or the Trustee under the Indenture, the Agreement, the Letter of Credit or any other security instrument, or under any supplements or amendments thereto, and shall, at all times complying with the provisions of Section 8.02 hereof, apply any Revenues or Available Moneys in the Bond Fund held by the Trustee to the payment of principal of or interest on the Bonds. In exercising such rights and the rights given the Trustee under this Article VIII, the Trustee shall take such action, as in the judgment of the Trustee, applying the standards described in Section 9.01 hereof, would best serve the interests of the Bondholders.

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Section 8.04. Legal Proceedings by Trustee. If any Event of Default has occurred and is continuing, the Trustee in its discretion may and, upon the written request of the Bank or the Owners of 25% in principal amount of the Bonds then Outstanding (subject to the consent of the Bank, as long as the Letter of Credit Bank is not in default of its obligations under the Letter of Credit or a voluntary or involuntary case has not been commenced by the filing of a petition under the Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts by or against the Letter of Credit Bank) and receipt of indemnity to its satisfaction shall, in its own name:

(A) by mandamus, other suit, action or proceeding at law or in equity, enforce all rights of the Bondholders, including the right to require the Board to collect the amounts payable under the Agreement and to require the Board to carry out any other provisions of this Indenture for the benefit of the Bondholders and to perform its duties under the Act;

(B) bring suit upon the Bonds;

(C) by action or suit in equity require the Board to account as if it were the trustee of an express trust for the Bondholders; and

(D) by action or suit in equity enjoin any acts or things that may be unlawful or in violation of the rights of the Bondholders.

Section 8.05. Discontinuance of Proceedings by Trustee. If any proceeding taken by the Trustee on account of any Event of Default is discontinued or is determined adversely to the Trustee, the Board, the Trustee, the Bondholders, the Letter of Credit Bank and the Bank shall be restored to their former positions and rights hereunder as though no such proceeding had been taken, but subject to the limitations of any such adverse determination.

Section 8.06. Bondholders May Direct Proceedings. The Holders of a majority in principal amount of the Bonds Outstanding hereunder shall have the right to direct the method and place of conducting all remedial proceedings by the Trustee hereunder, provided that such direction shall not be otherwise than in accordance with law or the provisions of this Indenture, and that the Trustee shall not be required to comply with any such direction which it deems to be unlawful or unjustly prejudicial to Bondholders not parties to such direction. The foregoing provisions of this Section 8.06 to the contrary notwithstanding, as long as the Letter of Credit Bank shall not be in default under the Letter of Credit, the Bank shall have the right to direct the method and the place of conducting all remedial proceedings by the Trustee hereunder provided that such direction shall not be otherwise than in accordance with law or the provisions of this Indenture.

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Section 8.07. Limitations on Actions by Bondholders. Anything in this Indenture to the contrary notwithstanding, no bondholder shall have any right to pursue any remedy hereunder or under the Agreement unless:

(a) the Trustee shall have been given written notice of an Event of Default;

(b) the holders of at least 25% in aggregate principal amount of the Bonds Outstanding shall have requested the Trustee, in writing, to exercise the powers hereinabove granted or to pursue such remedy in its or their name or names;

(c) the Trustee shall have been offered indemnity satisfactory to it against costs, expenses and liabilities;

(d) the Trustee shall have failed to comply with such request within a reasonable time; and

(e) the Letter of Credit Bank shall be in default of its obligations under the Letter of Credit or a voluntary or involuntary case has been commenced by the filing of a petition under the Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts by or against the Letter of Credit Bank; provided, however, that nothing herein shall affect or impair the right of any Owner of any Bond to enforce payment of the principal thereof and interest thereon at and after the maturity thereof, or the obligation of the Board to pay such principal and interest to the respective Owners of the Bonds at the time and place, from the source and in the manner expressed herein and in the Bonds, provided further that such action shall not disturb or prejudice the lien of this Indenture.

Section 8.08. Trustee May Enforce Rights Without Possession of Bonds. All rights under the Indenture and the Bonds may be enforced by the Trustee without the possession of any Bonds or the production thereof at the trial or other proceedings relative thereto, and any proceedings instituted by the Trustee shall be brought in its name for the ratable benefit of the Owners of the Bonds.

Section 8.09. Delays and Omissions Not to Impair Rights. No delay or omission in respect of exercising any right or power accruing upon any Event of Default shall impair such right or power or be a waiver of such Event of Default and every remedy given by this Article VIII may be exercised, from time to time, and as often as may be deemed expedient.

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Section 8.10. Application of Moneys in Event of Default. Any money received by the Trustee under this Article VIII shall be applied in the order listed below (provided that any money received by the Trustee upon a drawing under the Letter of Credit together with Available Moneys on deposit in the Bond Fund and available for payment of principal and interest on all Outstanding Bonds, any money held by the Trustee upon the nonpresentment of Bonds and any money held by the Trustee for the defeasance of Bonds pursuant to Article XI shall be applied only as provided in clause (B) below and only to pay outstanding principal and accrued interest, as provided in the Letter of Credit, with respect to the Bonds):

(A) To the payment of the fees and expenses of the Trustee and the Board including reasonable counsel fees and expenses, and any disbursements of the Trustee with interest thereon and its reasonable compensation;

(B) To the payment of principal and interest then owing on the Bonds, including any interest on overdue interest, and in case such money shall be insufficient to pay the same in full, then to the payment of principal and interest ratably, without preference or priority of one over another or of any installment of principal or interest over any other installment of principal or interest; and

The surplus, if any, remaining after the application of the money as set forth above shall to the extent of any unreimbursed drawing under the Letter of Credit, or other obligations owing by the Company to the Bank under the Loan Agreement, be paid to the Letter of Credit Bank or the Bank as the Bank shall direct. Any remaining money shall be paid to the Company or the person lawfully entitled to receive the same as a court of competent jurisdiction may direct.

Section 8.11. Trustee and Bondholders Entitled to All Remedies Under Act; Remedies Not Exclusive. It is the purpose of this Article VIII to provide to the Trustee and the Bondholders all rights and remedies as may be lawfully granted under the provisions of the Act; but should any remedy herein granted be held unlawful, the Trustee and the Bondholders shall nevertheless be entitled to every remedy permitted by the Act. It is further intended that, insofar as lawfully possible, the provisions of this Article VIII shall apply to and be binding upon any trustee or receiver appointed under the Act.

No remedy herein conferred is intended to be exclusive of any other remedy or remedies, and each remedy is in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute.

Section 8.12. Trustee's Right to Receiver. As provided by the Act, the Trustee shall be entitled as of right to the appointment of a receiver; and the Trustee, the Bondholders and any receiver so appointed shall have such rights and powers and be subject to such limitations and restrictions as may be contained in or permitted by the Act.

Section 8.13. Subrogation Rights of Bank. The Bank shall be subrogated to all rights theretofore possessed under the Indenture by the Bondholders if the principal of the Bonds or the interest thereon or the purchase price thereof due with respect to any mandatory purchase hereunder shall have been paid with funds provided by the Letter of Credit Bank pursuant to the Letter of Credit, but only to the extent that the Company has not theretofore repaid such funds. As limited by the provisions hereof, the subrogation rights of the Bank arising from the payments made pursuant to the Letter of Credit to provide for the payment of the principal of or interest on or the purchase price of any of the Bonds shall be on a parity with the rights of all other Bondholders.

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If the principal of or the interest on any Bond or the purchase price thereof due with respect to any mandatory purchase hereunder is paid with funds provided by the Letter of Credit Bank pursuant to the Letter of Credit, and if the Company has not theretofore repaid such funds, then, insofar as the subrogation rights of the Bank are concerned, such Bond shall, at the option of the Bank, be deemed to be in default with respect to the said principal, interest or purchase price until all amounts paid in respect thereof under the Letter of Credit shall have been repaid, and the Bank may exercise all rights which it would have had under the Indenture as the Bondholder of the said Bond then in default as to the payment of such principal, interest or purchase price.

Anything contained herein to the contrary notwithstanding, the payment of all amounts due the Bank in respect of its subrogation rights under the Indenture shall be secured by the Indenture on a parity with the principal of and interest on all Bonds which are then deemed to be outstanding for reasons other than the extent to which they evidence subrogation rights of the Bank, and the Bank shall, to the extent of the amount due in respect of its subrogation rights, be entitled to share all moneys derived from the Trust Estate with the Bondholders to whom such principal and interest shall be due ratably and in proportion to the amounts respectively due to the Bank and to each of such Bondholders

The Bank may exercise all its subrogation rights under the Indenture in respect of any Bonds without the necessity of possessing any of the Bonds or producing the same in any judicial or other proceeding related to the enforcement of its rights in respect thereof. Nevertheless, in order to evidence the subrogation rights acquired in respect of any Bonds paid or purchased with funds provided pursuant to the Letter of Credit, the Bank may require the Trustee to transfer to it all Bonds surrendered for payment or purchase with funds provided pursuant to the Letter of Credit or to issue to it new Bonds of like tenor with those so surrendered. The subrogation rights granted to the Bank in this Indenture are not intended to be exclusive of any other remedy or remedies available to the Bank, and such subrogation rights shall be cumulative and shall be in addition to (i) every other remedy given hereunder or under the Loan Agreement or any other instrument or agreement with respect to the reimbursement of moneys paid pursuant to the Letter of Credit and (ii) every other remedy now or hereafter existing at law or in equity or by statute.

Section 8.14. Waiver of Default. As long as the Letter of Credit Bank is not in default of its obligations under the Letter of Credit and the Letter of Credit is in full force and effect, the Bank may waive an Event of Default and if the Bank does so, the Trustee must also waive such Event of Default. The Trustee may not waive an Event of Default under this Indenture if the Letter of Credit has not been reinstated to cover principal and interest on the Bonds in accordance with the terms of the Letter of Credit.

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ARTICLE IX

THE TRUSTEE, THE TENDER AGENT
AND THE REMARKETING AGENT

Section 9.01. Duties, Immunities and Liabilities of Trustee. (A) The Trustee shall, prior to an Event of Default, and after the curing of all Events of Default which may have occurred, perform such duties and only such duties as are specifically set forth in this Indenture. The Trustee shall, during the existence of any Event of Default (which has not been cured or waived), exercise such of the rights and powers vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a prudent man would exercise or use under the circumstances in the conduct of his own affairs.

(B) The Board hereby directs and authorizes the Company to remove the Trustee if at any time requested to do so by an instrument or concurrent instruments in writing executed by the Holders of not less than a majority in aggregate principal amount of the Bonds then Outstanding (or their attorneys duly authorized in writing) or if at any time the Trustee shall cease to be eligible to act in such capacity, or shall become incapable of acting, or shall be adjudged a bankrupt or insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer shall take control or charge of the Trustee or of its property or affairs for the purpose of rehabilitation, conservation or liquidation, in each case by giving written notice of such removal to the Trustee, and thereupon the Company shall appoint, with the consent of the Bank, a successor Trustee by an instrument in writing.

(C) The Trustee may at any time resign by giving written notice of such resignation to the Board, the Company and the Bank and by giving the Bondholders notice of such resignation by mail at the addresses shown on the registration books maintained by the Trustee. Upon receiving such notice of resignation, the Company shall promptly appoint, with the consent of the Bank, a successor Trustee by an instrument in writing.

(D) Any removal or resignation of the Trustee and appointment of a successor Trustee shall become effective upon acceptance of appointment by the successor Trustee and the transfer of the Letter of Credit to the successor Trustee. If no successor Trustee shall have been appointed and have accepted appointment within forty-five (45) days of giving notice of removal or notice of resignation as aforesaid, the resigning Trustee or any Bondholder (on behalf of himself and all other Bondholders) may petition any court of competent jurisdiction for the appointment of a successor Trustee, and such court may thereupon, after such notice (if any) as it may deem proper, appoint such successor Trustee. Any successor Trustee appointed under this Indenture, shall signify its acceptance of such appointment by executing and delivering to the Company and the Board and to its predecessor Trustee a written acceptance thereof, and thereupon such successor Trustee, without any further act, deed or conveyance, shall become vested with all the moneys, estates, properties, rights, powers, trusts, duties and obligations of such predecessor Trustee, with like effect as if originally named Trustee herein; but, nevertheless at the request of the Company or the Board or the request of the successor Trustee, such predecessor Trustee shall execute and deliver any and all instruments of conveyance or further assurance and do such other things as may reasonably be required for more fully and certainly vesting in and confirming to such successor Trustee all the right, title and interest of such predecessor Trustee in and to any property held by it under this Indenture and shall pay over, transfer, assign and deliver to the successor Trustee any money or other property subject to the trusts and conditions herein set forth. Upon request of the successor Trustee, the Board shall execute and deliver any and all instruments as may be reasonably required for more fully and certainly vesting in and confirming to such successor Trustee all such moneys, estates, properties, rights, powers, trusts, duties granted to the Trustee hereunder. Upon the acceptance of the appointment by a successor Trustee as provided in this subsection, the successor Trustee shall mail a notice of the succession of such Trustee to the trusts hereunder to the Rating Agency and to the Bondholders at the addresses shown on the registration books maintained by the Trustee.

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(E) Any Trustee appointed under the provisions of this
Section in succession to the Trustee shall be a trust company or bank having the powers of a trust company, having a corporate trust office in the State or the Commonwealth of Pennsylvania, having a combined capital and surplus of at least One Hundred Million Dollars ($100,000,000), subject to supervision or examination by federal or state authorities and shall be rated at least Baa3/P-3 by Moody's if the Bonds are then rated by Moody's or has received written evidence from Moody's that the use of such Trustee would not result in a reduction or withdrawal of the rating on the Bonds. If such bank or trust company publishes a report of condition at least annually, pursuant to law or to the requirements of any supervising or examining Board above referred to, then for the purpose of this subsection the combined capital and surplus of such bank or trust company shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published.

Section 9.02. Merger or Consolidation. Any company into which the Trustee may be merged or converted or with which it may be consolidated or any company resulting from any merger, conversion or consolidation to which it shall be a party or any company to which the Trustee may sell or transfer all or substantially all of its corporate trust business, provided such company shall be eligible under subsection (E) of Section 9.01, shall be the successor to such Trustee without the execution or filing of any paper or any further act, anything herein to the contrary notwithstanding.

Section 9.03. Liability of Trustee. (A) The recitals of facts herein and in the Bonds contained shall be taken as statements of the Board, and the Trustee shall assume no responsibility for the correctness of the same, or make any representations as to the validity or sufficiency of this Indenture or of the Bonds or shall incur any responsibility in respect thereof, other than in connection with the duties or obligations herein or in the Bonds assigned to or imposed upon it. The Trustee shall, however, be responsible for its representations contained in its certificate of authentication on the Bonds. The Trustee shall not be liable in connection with the performance of its duties hereunder, except for its own gross negligence or willful misconduct. The Trustee may become the owner of Bonds with the same rights it would have if it were not Trustee and, to the extent permitted by law, may act as depositary for and permit any of their officers or directors to act as a member of, or in any other capacity with respect to, any committee formed to protect the rights of Bondholders, whether or not such committee shall represent the Holders of a majority in principal amount of the Bonds then Outstanding.

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(B) The Trustee shall not be liable for any error of judgment made in good faith by a responsible officer, unless it shall be proved that the Trustee was grossly negligent in ascertaining the pertinent facts.

(C) The Trustee shall not be liable with respect to any action taken or omitted to be taken by it in good faith in accordance with the direction of the Holders of not less than a majority in aggregate principal amount of the Bonds at the time Outstanding relating to the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee under this Indenture.

(D) The Trustee shall be under no obligation to exercise any of the rights or powers vested in it by this Indenture (other than the making of a draw under the Letter of Credit in accordance with its terms and the terms hereof, declaring the principal of the Bonds to be immediately due and payable when required hereunder or making payments on the Bonds when due) at the request, order or direction of any of the Bondholders pursuant to the provisions of this Indenture unless such Bondholders shall have offered to the Trustee indemnification to its satisfaction for indemnity against the costs, expenses and liabilities which may be incurred therein or thereby.

(E) The Trustee shall not be liable for any action taken by it in good faith and believed by it to be authorized or within the discretion or rights or powers conferred upon it by this Indenture.

Section 9.04. Right of Trustee to Rely on Documents. The Trustee may conclusively rely, and shall be protected in acting upon any notice, resolution, request, consent, order, certificate, report, opinion, bond or other paper or document believed by it to be genuine and to have been signed or presented by the proper party or parties. The Trustee may consult with counsel, who may be counsel of or to the Board, with regard to legal questions, and the opinion of such counsel shall be full and complete authorization and protection in respect of any action taken or suffered by it hereunder in good faith and in accordance therewith.

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The Trustee shall not be bound to recognize any person as the Holder of a Bond unless and until such Bond is submitted for inspection, if required, and his title thereto is satisfactorily established, if disputed.

Whenever in the administration of the trusts imposed upon it by this Indenture the Trustee shall deem it necessary or desirable that a matter be proved or established prior to taking or suffering any action hereunder, such matter (unless other evidence in respect thereof be herein specifically prescribed) may be deemed to be conclusively proved and established by a Certificate of the Board, and such Certificate shall be full warrant to the Trustee for any action taken or suffered in good faith under the provisions of this Indenture in reliance upon such Certificate, but in its discretion the Trustee may, in lieu thereof, accept other evidence of such matter or may require such additional evidence as it may deem reasonable.

Section 9.05. Preservation and Inspection of Documents.

(A) All documents received by the Trustee under the provisions of this Indenture shall be retained in its possession and shall be subject during normal business hours of the Trustee to the inspection of the Board, the Bank, the Company and any Bondholder, and their agents and representatives duly authorized in writing, at reasonable hours and under reasonable conditions.

(B) The Trustee covenants and agrees that it shall maintain a current list of the names and addresses of all the Bondholders.

Section 9.06. Compensation. The Trustee shall be paid by the Company (solely from Additional Payments) from time to time reasonable compensation for all services rendered under this Indenture, and also all reasonable expenses, charges, legal and consulting fees and other disbursements and those of its attorneys, agents and employees, incurred in and about the performance of its powers and duties under this Indenture. The Board shall have no responsibility for the payment of such fees and expenses.

Section 9.07. The Tender Agent. First Union National Bank, the initial Tender Agent appointed by the Company, and each successor tender agent appointed in accordance herewith, shall designate its office and signify its acceptance of the duties and obligations imposed upon it as described herein by a written instrument of acceptance delivered to the Trustee and the Company under which the Tender Agent shall, among other things:

(a) hold all Bonds delivered to it hereunder in trust for the benefit of the respective Owners of Bonds which shall have so delivered such Bonds until moneys representing the Purchase Price of such Bonds shall have been delivered to or for the account of or to the order of such Owners of Bonds. Upon delivery of moneys representing the Purchase Price of such Bonds to or for the account of or to the order of such Owners of Bonds, the Tender Agent shall hold all such Bonds which are required to be delivered to the Pledged Bonds Custodian pursuant to Section 5.06(b) hereof, as the agent of the Bank for the purpose of perfecting the Bank's security interest therein under the Pledge Agreement (which agency shall terminate upon delivery of such Bonds by the Tender Agent to or upon the order of the Bank in accordance with such Section 5.06(b); and

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(b) hold all moneys delivered to it hereunder and under the Tender Agent Agreement for the purchase of such Bonds in a separate account in trust for the benefit of the person or entity which shall have so delivered such moneys until required to transfer such funds as provided herein.

Section 9.08. Qualifications of Tender Agent.

(a) The Tender Agent shall be a bank with trust powers or trust company duly organized under the laws of the United States or any state or territory thereof, having a combined capital stock, surplus and undivided profits of at least Fifty Million Dollars ($50,000,000) or that is a wholly-owned subsidiary of such a bank or trust company, and authorized by law to perform all duties imposed upon it by this Indenture and shall be rated at least Baa3/P-3 by Moody's if the Bonds are then rated by Moody's, or has received written evidence from Moody's that the use of such Tender Agent would not result in a reduction or withdrawal of the rating on the Bonds. The Tender Agent may at any time resign and be discharged of its duties and obligations by giving at least sixty (60) days' written notice to the Board, the Trustee, the Remarketing Agent, the Bank, and the Company; provided that such resignation shall not take effect until a successor Tender Agent is appointed and accepts such appointment. Upon the written approval of the Bank, the Tender Agent may be removed at any time by the Company upon written notice to the Board, the Trustee and the Remarketing Agent. Successor Tender Agents may be appointed from time to time by the Company, with the prior written consent of the Bank.

(b) Upon the resignation or removal of the Tender Agent, the Tender Agent shall deliver any Bonds and moneys held by it in such capacity to its successor.

(c) The Tender Agent shall have the same rights and immunities granted to the Trustee hereunder.

Section 9.09. Qualifications of Remarketing Agent; Resignation; Removal. The Remarketing Agent shall be a financial institution or registered broker/dealer authorized by law to perform all the duties imposed upon it by this Indenture. The Remarketing Agent may at any time resign and be discharged of its duties and obligations created by this Indenture giving at least thirty
(30) days' written notice to the Board, the Bank, the Company and the Trustee. The Remarketing Agent may be removed at any time, upon not less than thirty (30) days' written notice from the Company filed with the Trustee. Upon the resignation or removal of the Remarketing Agent, the Company shall appoint a successor Remarketing Agent and shall provide written notice thereof to the Trustee. The resignation or removal of the Remarketing Agent shall not become effective until a successor Remarketing Agent is appointed and accepts such appointment.

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Section 9.10. Construction of Ambiguous Provisions. The Trustee may construe any provision hereof insofar as such may appear to be ambiguous or inconsistent with any other provision hereof; and any construction of any such provision by the Trustee, in good faith shall be binding upon the Owners of the Bonds.

ARTICLE X

MODIFICATION OR AMENDMENT OF THE INDENTURE

Section 10.01. Amendments Permitted. The Indenture and the rights and obligations of the Board, of the Trustee and of the Holders of the Bonds may be modified or amended from time to time and at any time for any lawful purpose, by an indenture or indentures supplemental thereto, which the Board and the Trustee may enter into without the consent of any Bondholders but with the prior written consent of the Company and the Bank (as long as the Letter of Credit Bank is not in default under the Letter of Credit), provided that the Trustee determines that such modification or amendment will not materially adversely affect the interests of the Bondholders or result in any material impairment of the security given under the Indenture. Any other modification or amendment must be approved by a majority in aggregate principal amount of the Bonds then Outstanding, provided that such consent of the Bondholders shall not be required if such modification or amendment is consented to in writing by the Bank provided that (a) the Letter of Credit Bank is not then in default of its obligations under the Letter of Credit and (1)) no voluntary or involuntary case has been commenced by the filing of a petition under the United States Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up or composition or adjustment of debts by or against the Letter of Credit Bank. The foregoing to the contrary notwithstanding, no such modification or amendment shall, without the consent of the Company and the Holders of all Bonds then Outstanding, (i) extend the maturity date of any Bond,
(ii) reduce the amount of principal thereof, (iii) extend the time of payment or change the method of computing the rate of interest thereon, without the consent of the Holder of each Bond so affected, or eliminate the Holders' rights to tender the Bonds, (iv) extend the due date for the purchase of Bonds tendered by the Holders thereof, or (v) reduce the purchase price of such Bonds. It shall not be necessary for the consent of the Bondholders to approve the particular form of any Supplemental Indenture, but it shall be sufficient if such consent shall approve the substance thereof. Promptly after the execution by the Board and the Trustee of any Supplemental Indenture, the Trustee shall mail a notice, setting forth in general terms the substance of such Supplemental Indenture, to each rating agency then rating the Bonds, if any, and the Holders of the Bonds at the address shown on the registration books of the Trustee. Any failure to give such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any such Supplemental Indenture.

Section 10.02. Effect of Supplemental Indenture. Upon the execution of any Supplemental Indenture pursuant to this Article, this Indenture shall be deemed to be modified and amended in accordance therewith, and the respective rights, duties and obligations under this Indenture of the Board, the Trustee and all Holders of Bonds Outstanding shall thereafter be determined, exercised and enforced hereunder subject in all respects to such modification and amendment, and all the terms and conditions of any such Supplemental Indenture shall be deemed to be part of the terms and conditions of this Indenture for any and all purposes.

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Section 10.03. Trustee Authorized to Join in Amendments and Supplements; Reliance on Counsel. The Trustee is authorized to join with the Board in the execution and delivery of any supplemental indenture or amendment permitted by this Article X and in so doing shall be fully protected by an opinion of Counsel that such supplemental indenture or amendment is so permitted and has been duly authorized by the Board and that all things necessary to make it a valid and binding agreement have been done.

ARTICLE XI

DEFEASANCE

Section 11.01. Discharge of Indenture. The Bonds may be paid by the Board in any of the following ways, provided that the Board also pays or causes to be paid any other sums payable hereunder by the Board:

(a) by paying or causing to be paid the principal of and interest on the Bonds, as and when the same become due and payable;

(b) with respect to Bonds which bear interest at a Fixed Rate, by depositing with the Trustee, in trust, Available Moneys or securities purchased with Available Moneys in the necessary amount (as provided in Section 11.03) to pay or redeem all Bonds then Outstanding; or

(c) by delivering to the Trustee, for cancellation by it, the Bonds then Outstanding.

If the Board shall also pay or cause to be paid all Bonds then Outstanding and shall also pay or cause to be paid all other sums payable hereunder by the Board and the Letter of Credit shall have terminated and all amounts drawn thereunder, together with interest thereon and other costs and expenses payable under the Loan Agreement shall have been reimbursed to the Letter of Credit Bank or the Bank, as the Bank shall direct, then and in that case, at the election of the Board (evidenced by a Certificate of the Board filed with the Trustee, signifying the intention of the Board to discharge all such indebtedness and this Indenture), and notwithstanding that any Bonds shall not have been surrendered for payment, this Indenture, the assignment of the Agreement and the pledge of Revenues and other assets made under this Indenture and all covenants, agreements and other obligations of the Board under this Indenture shall cease, terminate, become void and be completely discharged and satisfied. In such event, upon request of the Board, the Trustee shall cause an accounting for such period or periods as may be requested by the Board to be prepared and filed with the Board and shall execute and deliver to the Board all such instruments, as prepared by or caused to be prepared by the Board, that may be necessary or desirable to evidence such discharge and satisfaction, and the Trustee shall pay over, transfer, assign or deliver all moneys or securities or other property held by it pursuant to this Indenture, which are not required for: (i) the payment of all the charges and reasonable expenses of the Trustee under this Indenture; (ii) the payment or redemption of Bonds not theretofore surrendered for such payment or redemption; (iii) the payment of amounts owed to the Bank by the Company under the Loan Agreement, to the Company; or (iv) the payment of any and all sums due to the United States pursuant to Section 6.13 hereof.

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Section 11.02. Discharge of Liability on Bonds. During the Fixed Rate Period, upon the deposit with the Trustee, in trust, at or before maturity, of money or securities in the necessary amount (as provided in Section 11.03) to pay or redeem any Outstanding Bond (whether upon or prior to the end of the Fixed Rate Period or the redemption date of such Bond), provided that, if such Bond is to be redeemed prior to maturity, notice of such redemption shall have been given as in Article IV provided or provision satisfactory to the Trustee shall have been made for the giving of such notice, then all liability of the Board in respect of such Bond shall cease, terminate and be completely discharged, and the Holder thereof shall thereafter be entitled only to payment out of such money or securities deposited with the Trustee as aforesaid for their payment, subject, however, to the provisions of Section 11.04.

The Board may at any time surrender to the Trustee for cancellation by it any Bonds previously issued and delivered, which the Board may have acquired in any manner whatsoever, and such Bonds, upon such surrender and cancellation, shall be deemed to be paid and retired.

Section 11.03. Deposit of Money or Securities with Trustee. During the Fixed Rate Period, whenever in this Indenture it is provided or permitted that there be deposited with or held in trust by the Trustee money or securities in the necessary amount to pay or redeem any Bonds, the money or securities so to be deposited or held shall be cash or Government Obligations, which Government Obligations shall be noncallable and not subject to prepayment, the principal of and interest on which when due will provide money sufficient to pay the principal of, premium, if any, and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal, premium, if any, and interest become due, provided that, in the case of Bonds which are to be redeemed prior to the maturity thereof, notice of such redemption shall have been given as provided in Article IV or provision satisfactory to the Trustee shall have been made for the giving of such notice; provided, in each case, that the Trustee shall have been irrevocably instructed (by Request of the Board) to apply such money to the payment of such principal and interest with respect to such Bonds.

Whenever Government Obligations are deposited with the Trustee in accordance with Section 11.03 hereof, the Company shall provide to the Trustee and the Rating Agency: (i) a verification report from an independent public accountant, satisfactory in form and content to the Trustee, demonstrating that the Government Obligations so deposited and the income therefore shall be sufficient to pay the principal of, premium, if any, and all unpaid interest to maturity, or to the redemption date, as the case may be, on the Bonds to be paid or redeemed, as such principal or premium, if any, and interest become due; and
(ii) an opinion acceptable to the Rating Agency, of nationally recognized bankruptcy counsel, to the effect that the provision for payment of the Bonds contemplated to be made pursuant to this Section 11.03 will not constitute or result in such payments constituting voidable preferences under Section 547 of the Bankruptcy Code.

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Section 11.04. Payment of Bonds After Discharge of Indenture. Notwithstanding any provisions of this Indenture, any moneys held by the Trustee in trust for the payment of the principal of, premium, if any, or interest on, any Bonds and remaining unclaimed for five years after the principal of all of the Bonds has become due and payable (whether at maturity or upon call for redemption or by acceleration as provided in this Indenture), if such moneys were so held at such date, or five years after the date of deposit of such moneys if deposited after said date when all of the Bonds became due and payable, shall be repaid to the Company, upon its written request, free from the trusts created by this Indenture and all liability of the Trustee with respect to such moneys shall thereupon cease; provided, however, that before the repayment of such moneys to the Company as aforesaid, the Trustee may (at the cost and request of the Company) first mail to the Holders of Bonds which have not been paid, at the addresses last shown on the registration books maintained by the Trustee, a notice, in such form as may be deemed appropriate by the Trustee with respect to the Bonds so payable and not presented and with respect to the provisions relating to the repayment to the Company of the moneys held for the payment thereof.

ARTICLE XII

MISCELLANEOUS

Section 12.01. Liability of Board Limited to Revenues. Notwithstanding anything to the contrary contained in this Indenture or in the Bonds, the Board shall not be required to advance any moneys derived from any source other than the Revenues and other assets pledged under this Indenture for any of the purposes in this Indenture mentioned, whether for the payment of the principal of or interest on the Bonds or for any other purpose of this Indenture. Notwithstanding any provisions of this Indenture to the contrary, no recourse under or upon any obligation, covenant or agreement contained herein or in any Bond shall be had against the Board, it being expressly agreed and understood that the obligations of the Board hereunder, and under the Bonds and elsewhere, are solely special, limited obligations of the Board and shall be enforceable only out of the Board's interest in this Indenture and the Agreement (except for the Board's rights to payment of certain costs, fees and expenses as set forth in this Indenture, the Agreement and elsewhere) and there shall be no other recourse against the Board or any property now or hereafter owned by it and after entry of judgment against the Board by virtue of the power herein contained, the Board shall mark the judgment index to the effect that the judgment is limited as aforesaid.

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Section 12.02. Limitation of Liability of Directors, Etc., of Board. No covenant, agreement, provision or obligation contained herein shall be deemed to be a covenant, agreement or obligation of any present or future director, commissioner, officer, employee, member or agent of the Board in his individual capacity, and neither the members of the Board nor any officer thereof shall be liable personally on this Indenture or any of the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof or this Indenture. No director, commissioner, officer, employee, member or agent of the Board shall incur any personal liability with respect to any other action taken by him pursuant to this Indenture or the Act. Notwithstanding anything contained herein to the contrary, the liability of the Board, including its officers, members, and employees, under any and all of the documentation executed in connection with the issuance of the Bonds shall not constitute its general obligation and recourse against the Board on the documentation executed in connection with the issuance of the Bonds shall be had only against the property specifically pledged as security therefor and any rents, issues or profits thereof. It is expressly understood that the Board shall not otherwise be obligated and that none of its members, officers, or employees shall be in any way obligated for any costs, expenses, fees or other obligations or liabilities incurred or imposed in connection with the issuance of the Bonds, whether incurred prior to or after closing, and that recourse against the Board and its members, officers, or employees, shall be limited as set forth herein.

Section 12.03. Covenant Not to Sue. The forms of Bonds provide that the owners of the Bonds agree not to sue the Board or any of its board members, officers, agents or employees, past, present or future except as provided herein and in the Agreement as a condition of, and in consideration for, the issuance of the Bonds; accordingly, except as provided herein and in the Agreement, the Trustee shall not be permitted to sue the Board, on behalf of the owners of the Bonds.

Section 12.04. Successor Is Deemed Included in All References to Predecessor. Whenever in this Indenture either the Board or the Trustee is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Indenture contained by or on behalf of the Board or the Trustee shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not.

Section 12.05. Limitation of Rights to Parties, Bank, Company and Bondholders. Nothing in this Indenture or in the Bonds expressed or implied is intended or shall be construed to give to any person other than the Board, the Trustee, the Bank, the Company and the Holders of the Bonds, any legal or equitable right, remedy or claim under or in respect of this Indenture or any covenant, condition or provision therein or herein contained; and all such covenants, conditions and provisions are and shall be held to be for the sole and exclusive benefit of the Board, the Trustee, the Bank, the Company and the Holders of the Bonds.

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Section 12.06. Waiver of Notice. Whenever in this Indenture the giving of notice by mail or otherwise is required, the giving of such notice may be waived in writing by the person entitled to receive such notice and in any such case the giving or receipt of such notice shall not be a condition precedent to the validity of any action taken in reliance upon such waiver.

Section 12.07. Severability of Invalid Provisions. If any one or more of the provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid, illegal or unenforceable in any respect, then such provision or provisions shall be deemed severable from the remaining provisions contained in this Indenture and such invalidity, illegality or unenforceability shall not affect any other provision of this Indenture, and this Indenture shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein. The Board hereby declares that it would have entered into this Indenture and each and every other Section, paragraph, sentence, clause or phrase hereof and authorized the issuance of the Bonds pursuant thereto irrespective of the fact that any one or more Sections, paragraphs, sentences, clauses or phrases of this Indenture may be held illegal, invalid or unenforceable.

Section 12.08. Notices. All notices to Bondholders shall be given by telex, telegram, telecopier or other telecommunication device unless otherwise provided herein and confirmed in writing as soon as practicable. All such notices shall also be sent to the Holder and any person designated by any Holder to receive copies of such notices. Any notice to or demand upon the Trustee may be served or presented, and such demand may be made, at the Principal Corporate Trust Office of the Trustee, or at such other address as may have been filed in writing by the Trustee with the Board. Any notice to or demand upon the Trustee, the Board, the Company, the Remarketing Agent, the Tender Agent, the Letter of Credit Bank or the Bank shall be deemed to have been sufficiently given or served for all purposes by being delivered or sent by telex or by being deposited, postage prepaid, in a post office letter box, addressed, as the case

may be,

         To the Trustee:     First Union National Bank
                             123 South Broad Street
                             Philadelphia, Pennsylvania 19109
                             Attention: Corporation Trust Administration

         To the Board:       The Industrial Development
                             Board of the City of Huntsville
                             P. O. Box 408
                             Huntsville, Alabama  35804

(or such other address as may have been filed in writing by the Board with the

Trustee),

         To the Company:            Central CPVC Corporation
                                    c/o Central Sprinkler Corporation
                                    451 North Cannon Avenue
                                    Lansdale, Pennsylvania 19446

(or such other address as may have been filed in writing by the Company with the
Trustee),

        To the Remarketing Agent:   First Union Capital Markets
                                    Second Floor South
                                    600  Penn Street
                                    Reading, Pennsylvania 19602
                                    Attention: Sales and Underwriting Department

(or such other address as may have been filed in writing by the Remarketing Agent with the Trustee),

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To the Tender Agent:                First Union National Bank
                                    301 College Street
                                    Charlotte, North Carolina 28277
                                    Attention: Sales and Underwriting

(or such other address as may have been filed in writing by the Tender Agent
with the Trustee),

To the Letter of Credit Bank:       First Union National Bank
                                    2240 Butler Pike
                                    Plymouth Meeting, PA 19462-1302
                                    Attention: William Johnston, Vice President

(or such other address as may have been filed in writing by the Letter of Credit

Bank with the Trustee).

To the Bank:                        Congress Financial Corporation
                                    1133 Avenue of the Americas
                                    New York, New York 10036
                                    Attention: Andrew W. Robin

(or such other address as may have been filed in writing by the Bank with the Trustee).

Section 12.09. Evidence of Rights of Bondholders. Any request, consent or other instrument required or permitted by this Indenture to be executed by Bondholders may be in any number of concurrent instruments of substantially similar tenor and shall be signed or executed by such Bondholders in person or by an agent or agents duly appointed in writing. Proof of the execution of any such request, consent or other instrument or of a writing appointing any such agent, or of the holding by any person of Bonds transferable by delivery, shall be sufficient for any purpose of this Indenture and shall be conclusive in favor of the Trustee and of the Board if made in the manner provided in this Section.

The fact and date of the execution by any person of any such request, consent or other instrument or writing may be proved by the certificate of any notary public or other officer of any jurisdiction, authorized by the laws thereof to take acknowledgments of deeds, certifying that the person signing such request, consent or other instrument acknowledged to him the execution thereof, or by an affidavit of a witness of such execution duly sworn to before such notary public or other officer.

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The ownership of Bonds shall be proved by the bond registration books held by the Trustee.

Any request, consent, or other instrument or writing of the Holder of any Bond shall bind every future Holder of the same Bond and the Holder of every Bond issued in exchange therefor or in lieu thereof, in respect of anything done or suffered to be done by the Trustee or the Board in accordance therewith or in reliance thereon.

Section 12.10. Disqualified Bonds. In determining whether the Holders of the requisite aggregate principal amount of Bonds have concurred in any demand, request, direction, consent or waiver under this Indenture, Bonds which are owned or held by or for the account of the Board or the Company, or by any other obligor on the Bonds, or by any person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Board, the Company, or any other obligor on the Bonds, shall be disregarded and deemed not to be Outstanding for the purpose of any such determination. Bonds so owned which have been pledged in good faith may be regarded as Outstanding for the purposes of this Section if the pledgee shall establish to the satisfaction of the Trustee the pledgee's right to vote such Bonds and that the pledgee is not a person directly or indirectly controlling or controlled by, or under direct or indirect common control with, the Board or the Company, or any other obligor on the Bonds. In case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall be full protection to the Trustee.

Section 12.11. Money Held for Particular Bonds. The money held by the Trustee for the payment of the interest, principal or premium due on any date with respect to particular Bonds (or portions of Bonds in the case of registered Bonds redeemed in part only) shall, on and after such date and pending such payment, be set aside on its books and held uninvested in trust by it for the Holders of the Bonds entitled thereto, subject, however, to the provisions of
Section 11.04 hereof.

Section 12.12. Funds. Any fund required by this Indenture to be established and maintained by the Trustee may be established and maintained in the accounting records of the Trustee, either as a fund or an account, and may, for the purposes of such records, any audits thereof and any reports or statements with respect thereto, be treated either as a fund or as an account; but all such records with respect to all such funds shall at all times be maintained in accordance with current industry standards, to the extent practicable, and with due regard for the requirements of Section 7.05 hereof and for the protection of the security of the Bonds and the rights of every holder thereof.

Section 12.13. Payments Due on Days other than Business Days. If a payment day is not a Business Day at the place of payment, then payment may be made at that place on the next Business Day and no interest shall accrue for the intervening period.

Section 12.14. Execution in Several Counterparts. This Indenture may be executed in any number of counterparts and each of such counterparts shall for all purposes be deemed to be an original; and all such counterparts, or as many of them as the Board and the Trustee shall preserve undestroyed, shall together constitute but one and the same instrument.

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Section 12.15. [Reserved]

Section 12.16. Continuing Disclosure. Pursuant to Section 2.3 of the Agreement, the Company has undertaken all responsibility for compliance with, and the Board shall have no liability to the holders of the Bonds or any other person with respect to, any reports, notices or disclosures required by or provided pursuant to the continuing disclosure agreement authorized by said
Section 4.19. The Trustee hereby covenants and agrees with the holders from time to time of the Bonds that it will, for their benefit, comply with and carry out all of the provisions of the continuing disclosure agreement and Section 4.19 of the Agreement. Notwithstanding any other provision of the Indenture, failure of the Company or the Trustee to perform in accordance with the continuing disclosure agreement shall not constitute a Default, and the rights and remedies provided by the Indenture upon the occurrence of a default or an Event of Default shall not apply to any such failure, but the continuing disclosure agreement may be enforced only as provided therein.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]


IN WITNESS WHEREOF, THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE has caused this Indenture to be executed in its name by its Chairman and attested by its Secretary, and FIRST UNION NATIONAL BANK, as evidence of its acceptance of the trusts created hereunder, has caused this Indenture to be signed in its corporate name by its duly authorized officer and attested, all as of the day and year first above written.

THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF HUNTSVILLE

                           By /s/ W.F. Sanders, Jr.
                             ------------------------------
                                     Vice Chairman

[SEAL]

                           Attest:
                                  -------------------------
                                    Assistant Secretary


FIRST UNION NATIONAL BANK, as Trustee and Tender Agent

By
Authorized Officer
[SEAL]

Attest:

Authorized Officer

EXHIBIT "A"

(FLOATING RATE FORM OF BOND)

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC") to the Board or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner (the "Registered Owner") hereof, Cede & Co., has an interest herein.

NEITHER THE CITY OF HUNTSVILLE NOR THE STATE OF ALABAMA IS OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE CITY OF HUNTSVILLE OR THE STATE OF ALABAMA IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL OR PREMIUM, IF ANY, OF OR INTEREST ON THIS BOND. THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF THE BOARD, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE BOARD PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THIS BOND DOES NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE BOARD. THE BOARD HAS NO TAXING POWER.

No. VR- $7,500,000

THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE

TAX-EXEMPT VARIABLE RATE DEMAND/FIXED RATE
REFUNDING REVENUE BOND

(CENTRAL CPVC CORPORATION PROJECT)

SERIES OF 1998

MATURITY DATE: January 1, 2013 CUSIP
DATE OF ISSUANCE: October 29, 1998


THIS BOND IS SUBJECT TO MANDATORY TENDER FOR PURCHASE AT THE TIME AND IN THE MANNER HEREINAFTER DESCRIBED, AND MUST BE SO TENDERED OR WILL BE DEEMED TO HAVE BEEN SO TENDERED UNDER CERTAIN CIRCUMSTANCES DESCRIBED HEREIN.


KNOW ALL MEN BY THESE PRESENTS that the THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE (the "Board"), for value received, promises to pay from the source and as hereinafter provided, to CEDE & CO. or registered assigns, on the maturity date hereof (or upon prior redemption as hereinafter provided), upon surrender hereof, the principal sum of Seven Million Five Hundred Thousand Dollars ($7,500,000), and in like manner to pay interest on said sum at the rate described below on the first day of each calendar month, or if such date is not a Business Day, the next succeeding Business Day and on the Conversion Date (hereinafter defined), commencing December 1, 1998 (each an "Interest Payment Date"), from the Interest Payment Date next preceding the date of authentication hereof to which interest has been paid or duly provided for, unless the date of authentication hereof is an Interest Payment Date to which interest has been paid or duly provided for, in which case from the date of authentication hereof, or unless no interest has been paid or duly provided for on the Bonds (as hereinafter defined), in which case from the date of issuance set forth above (the "Date of Issuance"), until payment of the principal hereof has been made or duly provided for. Notwithstanding the foregoing, if this Bond is authenticated after any date which is the seventh calendar day next preceding any Interest Payment Date (a "Record Date") and before the following Interest Payment Date, this Bond shall bear interest from such Interest Payment Date; provided, however, that if the Board shall default in the payment of interest due on such Interest Payment Date, then this Bond shall bear interest from the next preceding Interest Payment Date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for on the Bonds, from the Date of Issuance. The principal of this Bond is payable in lawful money of the United States of America at the principal corporate trust office of First Union National Bank (together with its successors in trust, the "Trustee") or at the duly designated office of any successor Trustee under the Trust Indenture, dated as of October 1, 1998, between the Board and the Trustee (which, as from time to time amended and supplemented, is hereinafter referred to as the "Indenture"). Payment of interest on this Bond shall be made on each Interest Payment Date to the registered Owner hereof as of the applicable Record Date and shall be paid by check mailed by the Trustee to such registered Owner at his address as it appears on the registration books of the Board or at such other address as is furnished to the Trustee in writing by such registered Owner, or in such other manner as may be permitted by the Indenture; provided, that such interest shall be paid by wire transfer to: (i) the Bank; and (ii) any Holder of at least $1,000,000 in aggregate principal amount of Bonds, if the Holder makes a written request of the Trustee at least 15 days before a Record Date specifying the account address and wiring instructions. Such a request may provide that it will remain in effect for subsequent interest payments until changed or revoked by written notice to the Trustee or upon the transfer or re-registration of the Bond.

The purchase price (the amount equal to 100% of the principal amount of any Bond tendered or deemed tendered pursuant to the terms of the Indenture plus accrued and unpaid interest thereon to the date of purchase (the "Purchase Price") of this Bond shall be payable by First Union National Bank (together with any successor Tender Agent, the "Tender Agent") to the registered Owner hereof at the principal corporate trust office of the Tender Agent. As used herein, the term "Business Day" means any day other than: (i) a Saturday or Sunday; (ii) a legal holiday or any day on which banking institutions in the State of New York, the State of Alabama, the City of New York, or the city in which the principal office of the Trustee, the Tender Agent or the Bank are authorized to remain closed; or (iii) a day on which the New York Stock Exchange is closed.


This Bond is one of the duly authorized bonds designated as the Tax-Exempt Variable Rate Demand/Fixed Rate Refunding Revenue Bonds (Central CPVC Corporation Project) Series of 1998 of the Board issued in the aggregate principal amount of $7,500,000 (herein referred to as the "Bonds") under and by virtue of Act No. 648 adopted at the 1949 Regular Session of the Legislature of the State of Alabama, approved September 19, 1949, as amended (said Act being codified as Section 11-54-80, et seq., Code of Alabama, 1975) (the "Act"), and by virtue of a resolution duly adopted by the Board of Directors of the Board (the "Bond Resolution"), and equally and ratably secured under the Indenture, for the purpose of raising funds to refund a bond which was issued to finance a portion of the costs of a project consisting of (i) the acquisition, construction, and equipping a manufacturing facility for the manufacture of CPVC pipe and fittings for the fire protection industry to be located at the Premises; and (ii) the payment of a portion of the costs of issuance of the Bonds (the "Project"). Pursuant to an Amended and Restated Lease Agreement, dated as of October 1, 1998 (the "Agreement") by and between the Board and Central CPVC Corporation, an Alabama corporation (the "Company"), lease payments sufficient for the prompt payment when due of the principal and Purchase Price of, premium, if any, and interest on the Bonds are to be paid to the Trustee for the account of the Board and deposited in the Bond Fund established by the Indenture and have been duly pledged for that purpose, all to the extent and in the manner provided in the Indenture.

The Bonds are all issued under and are equally and ratably secured by and entitled to the protection of the Indenture, pursuant to which all payments due from the Company to the Board under the Agreement (other than certain indemnification payments and the payment of certain expenses of the Board) are assigned to the Trustee to secure the payment of the principal and Purchase Price of, and premium, if any, and interest on the Bonds and certain costs, fees and expenses of the Trustee. The Company has caused to be delivered to the Trustee an irrevocable direct pay letter of credit (together with any Substitute Letter of Credit, the "Letter of Credit") issued by First Union National Bank (in such capacity, the "Bank") and dated the Date of Issuance of the Bonds, which will expire, unless earlier terminated or extended, on March 31, 2001. Subject to certain conditions, the Letter of Credit may be replaced by a Substitute Letter of Credit of another commercial bank, savings and loan association or savings bank. Under the Letter of Credit, the Trustee will be entitled to draw up to an amount sufficient to pay: (a) the principal of the Bonds or the portion of the Purchase Price corresponding to the principal of the Bonds; and (b) accrued interest (at the maximum rate of 15% per annum based on 365/366 day year and the actual number of days elapsed) on the Bonds or the portion of the Purchase Price of the Bonds corresponding to accrued interest thereon.


Reference is hereby made to the Indenture, the Agreement and the Letter of Credit for a description of the property pledged and assigned, the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Board, the Trustee and the Owners of the Bonds and the terms upon which the Bonds are issued and secured; and the Owner of this Bond, by acceptance hereof, hereby consents to the terms and provisions of all of the foregoing as a material portion of the consideration for the issuance of this Bond.

This Bond shall bear interest as follows:

(A) From the Date of Issuance of this Bond to the Conversion Date, this Bond shall bear interest at the "Floating Rate." The "Floating Rate" shall be a variable rate of interest equal to the minimum rate of interest necessary, in the sole judgment of the Remarketing Agent (hereinafter defined), to sell the Bonds on any Business Day at a price equal to the principal amount thereof, exclusive of accrued interest, if any, thereon. The Floating Rate shall be determined weekly by First Union Capital Markets, a Division of Wheat First Securities, Inc., Reading, Pennsylvania (the "Remarketing Agent") by 9:30 a.m. on each Wednesday (or if such Wednesday is not a Business Day, on the next succeeding Business Day) and shall be effective on such Wednesday for the immediately following Weekly Period (as hereinafter defined), all as more fully set forth in the Indenture. The determination of the Floating Rate shall be conclusive and binding upon the Board, the Trustee, the Letter of Credit Bank, the Bank, the Company, the Remarketing Agent, the Tender Agent and the Owners of this Bond.

Anything herein to the contrary notwithstanding, the Floating Rate shall in no event exceed 15% per annum.

(B) The Bonds shall bear interest at the "Fixed Rate" from and after the Conversion Date. In such event, the Fixed Rate shall be applicable until the maturity of the Bonds. The "Fixed Rate" shall be a fixed annual interest rate on the Bonds established by the Remarketing Agent as the rate of interest for which the Remarketing Agent has received commitments on or prior to the 5th Business Day preceding the Conversion Date, at a price of par without discount or premium.

Prior to the Conversion Date, interest on the Bonds shall be computed on the basis of a 365/366-day year, actual number of days elapsed. On and after the Conversion Date, interest on the Bonds shall be computed on the basis of a 360-day year of twelve 30-day months.


As used herein, the term "Conversion Date" means the Optional Conversion Date; the term "Letter of Credit Termination Date" means the later of: (i) that date upon which the Letter of Credit shall expire or terminate pursuant to its terms; or (ii) that date to which the expiration or termination of the Letter of Credit may be extended, from time to time, either by extension or renewal of the existing Letter of Credit or the issuance of a Substitute Letter of Credit (as such phrase is defined in the Indenture); the term "Optional Conversion Date" means that date on or after December 1, 1998 which shall be a Business Day, from and after which the interest rate on the Bonds is converted from the Floating Rate to the Fixed Rate as a result of the exercise by the Company of the Conversion Option; the term "Conversion Option" means the option granted to the Company in the Indenture pursuant to which the interest rate on the Bonds is converted from the Floating Rate to the Fixed Rate as of the Optional Conversion Date; the term "Purchase Price" means an amount equal to 100% of the principal amount of any Bond tendered or deemed tendered for purchase pursuant to the Indenture or with respect to which the Demand Purchase Option has been exercised, plus accrued and unpaid interest thereon to the date of purchase.

The interest rate on the Bonds may be converted from the Floating Rate to the Fixed Rate upon satisfaction of certain conditions and notice given by the Trustee at the direction of the Company to the Owners of the Bonds at least twenty (20) days but not more than thirty (30) days prior to the Conversion Date in accordance with the requirements of the Indenture, and the Bonds shall be subject to mandatory tender by the Owners thereof on the Conversion Date. On and after the Conversion Date, the Demand Purchase Option will not be available to the Owners of the Bonds. On or prior to the Conversion Date, an Owner of Bonds, shall be required to deliver their Bonds to the Tender Agent for purchase at the Purchase Price. Accrued interest on the Bonds will be payable on the Conversion Date to the Owners of Bonds as of the Conversion Date. Any Bonds not delivered to the Tender Agent on or prior to the Conversion Date ("Undelivered Bonds"), for which there has been irrevocably deposited in trust with the Trustee or the Tender Agent an amount of money sufficient to pay the Purchase Price of the Undelivered Bonds, shall be deemed to have been purchased at the Purchase Price and are deemed to be no longer outstanding with respect to such prior Owners. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS ON OR PRIOR TO THE CONVERSION DATE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE CONVERSION DATE) OTHER THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO THE BENEFIT OF THE INDENTURE, EXCEPT FOR THE PURPOSE OF PAYMENT OF THE PURCHASE PRICE THEREFOR.

Notwithstanding the foregoing provisions, to the extent that at the close of the fifth Business Day prior to the proposed Optional Conversion Date, the Remarketing Agent has not presented to the Company firm commitments for the purchase of all of the Bonds, the Company, at its option, may rescind an optional conversion of the Bonds. Any such election to rescind must be made by the close of the fourth Business Day prior to the proposed Conversion Date and the Company shall give written notice to the Trustee, the Tender Agent and the Bank of its decision to rescind the optional conversion by such time. The Company shall cause the Trustee to immediately notify the Owners of such rescission and thereafter the Bonds shall bear interest at the Floating Rate in effect for the then current Weekly Period and thereafter the Bonds shall bear interest at the Floating Rate until any subsequent Conversion Date effected in accordance with the Indenture. As used herein, "Weekly Period" means, while this Bond bears interest at the Floating Rate, the weekly period that begins on and includes Wednesday of each calendar week and ends at the close of business on Tuesday of the next succeeding week.


At any time prior to the Record Date preceding the first Interest Payment Date following the Conversion Date, the Trustee or the Tender Agent, as the case may be, shall deliver a replacement Bond evidencing interest payable at the Fixed Rate.

Prior to the Conversion Date, this Bond shall be purchased, at the option of the Owner hereof ("Demand Purchase Option") at the Purchase Price, upon:

(a) delivery by such Owner to the Trustee and the Tender Agent at their principal corporate trust office and Delivery Office (hereinafter defined) respectively, and to the Remarketing Agent at its principal office of a notice (a "Demand Purchase Notice") (said notice to be irrevocable and effective upon receipt) which states: (i) the aggregate principal amount and the bond numbers of Bonds to be purchased; and (ii) the date on which such Bonds are to be purchased, which date shall be a Business Day not prior to the seventh (7th) day next succeeding the date of delivery of such notice and which date shall be prior to the Conversion Date;

(b) if such Bonds are to be purchased prior to an Interest Payment Date and after the Record Date in respect thereof, delivery to the Tender Agent together with the Demand Purchase Notice described in (a) above, of a non-recourse due-bill, payable to bearer, for interest due on such Interest Payment Date; and

(c) delivery to the Tender Agent at its Delivery Office (hereinafter defined) at or prior to 10:00 a.m., New York City time, on the date designated for purchase in the applicable Demand Purchase Notice of such Bonds to be purchased with an appropriate endorsement for transfer or accompanied by a bond power endorsed in blank.

Any Bond as to which a Demand Purchase Notice has been delivered pursuant to (a) above, must be delivered to the Tender Agent as provided in (c) above, and any such Bonds not so delivered ("Undelivered Bonds"), for which there has been irrevocably deposited in trust with the Trustee or the Tender Agent an amount of money sufficient to pay the Purchase Price thereof, shall be deemed to have been purchased at the Purchase Price and are deemed to be no longer outstanding with respect to such tendering Owner. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS AS SPECIFIED ABOVE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE DATE DESIGNATED FOR PURCHASE IN THE APPLICABLE DEMAND PURCHASE NOTICE) OTHER THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO THE BENEFIT OF THE INDENTURE, EXCEPT FOR THE PAYMENT OF THE PURCHASE PRICE THEREFOR.


Notwithstanding the foregoing provisions, in the event any Bond as to which the Owner thereof has exercised the Demand Purchase Option is remarketed to such Owner pursuant to the Remarketing Agreement, such Owner need not deliver such Bond to the Tender Agent as provided in (c) above, although such Bond shall be deemed to have been delivered to the Tender Agent, redelivered to such Owner, and remarketed for purposes of the Indenture.

The Agreement provides that the Company, upon satisfaction of certain conditions precedent, may, at any time, at its option, provide for the delivery to the Trustee of a Substitute Letter of Credit. The Bonds shall be subject to mandatory tender by the Owners thereof on the date of delivery of the Substitute Letter of Credit (the "Substitution Date"). On or prior to the Substitution Date, Owners of Bonds shall be required to deliver their Bonds to the Tender Agent for purchase at the Purchase Price. Accrued interest on the Bonds will be payable on the Substitution Date to the Owners of Bonds as of the Substitution Date. Any Bonds not delivered to the Tender Agent on or prior to the Substitution Date ("Undelivered Bonds"), for which there has been irrevocably deposited in trust with the Trustee or the Tender Agent an amount of money sufficient to pay the Purchase Price of the Undelivered Bonds, shall be deemed to have been purchased at the Purchase Price and are deemed to be no longer outstanding with respect to such Owners. IN THE EVENT OF A FAILURE BY AN OWNER OF BONDS TO DELIVER ITS BONDS ON OR PRIOR TO THE SUBSTITUTION DATE, SAID OWNER SHALL NOT BE ENTITLED TO ANY PAYMENT (INCLUDING ANY INTEREST TO ACCRUE ON OR SUBSEQUENT TO THE SUBSTITUTION DATE) OTHER THAN THE PURCHASE PRICE FOR SUCH UNDELIVERED BONDS, AND ANY UNDELIVERED BONDS SHALL NO LONGER BE ENTITLED TO THE BENEFIT OF THE INDENTURE, EXCEPT FOR THE PURPOSE OF PAYMENT OF THE PURCHASE PRICE THEREFOR.

Any delivery of a notice required to be made to the Trustee at its principal corporate trust office pursuant to (a) above shall be delivered to the Trustee at 123 South Broad Street, Philadelphia, Pennsylvania 19109, Attention:
Corporation Trust Administration or to the office designated for such purpose by any successor Trustee; any delivery of a notice required to be made to the Remarketing Agent at its principal office pursuant to (a) above shall be delivered to the Remarketing Agent at Second Floor South, 600 Penn Street, Reading, Pennsylvania 19602, Attention: First Union Capital Markets, Sales and Underwriting Department, or to the office designated for such purpose by any successor Remarketing Agent; and any delivery of Bonds required to be made to the Tender Agent pursuant to (b) above shall be delivered to the Tender Agent at 123 South Broad Street, Philadelphia, Pennsylvania 19109, Attention: Corporation Trust Administration or to the office designated for such purpose by any successor Tender Agent (the "Delivery Office").

Notwithstanding any provision herein to the contrary, so long as this Bond is subject to a system of book-entry transfers, any requirement for the delivery of Bonds to the Tender Agent in connection with an optional or mandatory tender shall be deemed satisfied upon the transfer, on the registration books of DTC, of the beneficial ownership interests in the Bonds tendered for purchase to the account of the Tender Agent, or a Participant (as such term is defined in the Indenture) acting on behalf of or at the discretion of such Tender Agent.


Pursuant to the Act, neither the members of the Board nor any person executing bonds for the Board shall be liable personally on said bonds by reason of the issuance thereof.

The Bonds Outstanding from time to time are limited and special obligations of the Board, the principal of, premium, if any, and interest on which are payable solely from the amounts to be paid under the Agreement and otherwise as provided in the Indenture and in the Agreement, which amounts are hereby specifically pledged to the payment thereof in the manner and to the extent herein specified, and shall not be deemed to constitute a general obligation or liability of the Board, its officers of employees. NEITHER THE CITY OF HUNTSVILLE NOR THE STATE OF ALABAMA IS OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE CITY OF HUNTSVILLE NOR THE STATE OF ALABAMA IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL OR REDEMPTION PRICE, IF ANY, OF OR INTEREST ON THIS BOND. THIS BOND IS NOT AND SHALL NOT BE IN ANY WAY A DEBT OR LIABILITY OF THE CITY OF HUNTSVILLE, THE STATE OF ALABAMA OR OF ANY POLITICAL SUBDIVISION THEREOF AND DOES NOT AND SHALL NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE CITY OF HUNTSVILLE, STATE OF ALABAMA OR OF ANY POLITICAL SUBDIVISION THEREOF WHETHER LEGAL, MORAL OR OTHERWISE. THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF THE BOARD, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE BOARD PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THE BOND DOES NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE BOARD. THE BOARD HAS NO TAXING POWER.

This Bond is transferable by the Registered Owner hereof in person or by his attorney duly authorized in writing, at the principal corporate trust office of the Trustee or at the Delivery Office of the Tender Agent or that of any successor Tender Agent, but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new registered Bond or Bonds of authorized denomination or denominations for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Board, the Tender Agent and the Trustee may deem and treat the registered Owner hereof as the absolute Owner hereof (whether or not this Bond shall be overdue) for all purposes, and neither the Board, the Tender Agent nor the Trustee shall be bound by any notice or knowledge to the contrary.

Prior to the Conversion Date: (i) the Bonds are issuable as fully registered bonds without coupons in the denominations of $100,000 or any integral multiple of $5,000 in excess thereof; and (ii) the Bonds may not be issued, exchanged or transferred except in authorized denominations of $100,000 or any integral multiple of $5,000 in excess thereof. From and after the Conversion Date, the Bonds shall be issuable as fully registered bonds without coupons in the denominations of $5,000 or any integral multiple thereof.


Mandatory Redemption

The Bonds are subject to mandatory redemption, five (5) Business Days prior to the Letter of Credit Termination Date, in whole, at a redemption price equal to one hundred percent (100%) of the principal amount thereof being redeemed plus accrued interest to the redemption date if, on the thirtieth
(30th) Business Day prior to the Letter of Credit Termination Date, the Trustee shall not have received a Substitute Letter of Credit which will be effective on or before the Letter of Credit Termination Date.

The Bonds are also subject to mandatory redemption, in whole, at any time, within one hundred eighty (180) days after the Trustee receives notice of the occurrence of a "Determination of Taxability" (as such phrase is hereinafter defined), at a redemption price equal to one hundred percent (100%) of the aggregate principal amount of Bonds Outstanding plus accrued interest to the redemption date.

"Event of Taxability" with respect to any Bond means a change of law or regulations, or the interpretation thereof, or the occurrence of any other event or the existence of any other circumstance (including without limitation the fact that any representations or warranties of the Company or the Board made in connection with the issuance of any Bond is or was untrue or that a covenant of the Company has been breached) that has the effect of causing interest payable on any Bond to be includable in gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder (the "Code") other than by reason that such interest: (i) is includable in the gross income of an Owner or former Owner of any Bond while such Owner or former Owner is or was a "substantial user" or a "related person" to a "substantial user" of the Project Facilities (as such terms are used in Section 147(a)(1) of the Code); or (ii) is deemed an item of tax preference including, without limitation, an item subject to any alternative minimum tax.

"Determination of Taxability" with respect to any Bond shall be deemed to have been made upon the first to occur of the following events:


(i) the date on which the Company determines that an Event of Taxability has occurred by filing with the Trustee a statement to that effect supported by one or more tax schedules, returns or documents which disclose that such an Event of Taxability has occurred;

(ii) the date on which the Company or the Trustee is advised by private ruling, technical advice or any other written communication from any authorized official of the Internal Revenue Service that, based upon any filings of the Company or any other person or entity, or upon any review or audit of the Company or any other person or entity, or upon any other grounds whatsoever, an Event of Taxability has occurred;

(iii) the date on which the Trustee or the Company is advised that a court of competent jurisdiction has issued an order, declaration, ruling or judgment to the effect that an Event of Taxability has occurred;

(iv) the date the Trustee shall have received written notice from any owner of the Bonds that such owner has received a written assertion or claim by any authorized official of the Internal Revenue Service that an Event of Taxability has occurred; or

(v) the date the Trustee is notified that the Internal Revenue Service has issued any private ruling, technical advice or any other written communication, with or to the effect that an Event of Taxability has occurred;

provided, however, that (x) no Determination of Taxability described in each of clause (i), (ii), (iii), (iv) or (v) above shall be deemed to have occurred unless the Trustee shall have received a written opinion of nationally recognized bond counsel satisfactory to the Trustee, in form and substance satisfactory to the Bank and the Company and not unsatisfactory to the Trustee, to the effect that an Event of Taxability has occurred; and (y) no Determination of Taxability described in each of clauses (i), (ii), (iii), (iv) or (v) above shall be deemed to have occurred until 180 days shall have elapsed from the dates described in clauses (i), (ii), (iii), (iv) or (v) above without such Determination of Taxability having been rescinded or canceled.

Mandatory Sinking Fund Redemption

The Bonds are subject to mandatory sinking fund redemption on the Interest Payment Date occurring in the month of September in each of the years set forth below commencing on the Interest Payment Date occurring in September of 1998 (each, a "Mandatory Sinking Account Fund Date"), at a redemption price equal to 100% of the principal amount thereof plus accrued interest as follows:

                   Mandatory Sinking
Year                Fund Payments
----                -------------
2000                   $560,000
2001                   $560,000
2002                   $560,000
2003                   $560,000
2004                   $560,000
2005                   $560,000
2006                   $560,000
2007                   $560,000
2008                   $560,000
2009                   $575,000
2010                   $580,000
2011                   $580,000
2012                   $580,000
2013                   $145,000*

*Final maturity of the Bonds is January 1, 2013

Optional Redemption


On or prior to the Conversion Date, the Bonds are subject to redemption by the Board, at the option of the Company, at any time, subject to the notice provisions described below, in whole or in part, at the redemption price of 100% of the principal amount thereof being redeemed plus accrued interest to the redemption date.

No such optional redemption shall occur unless there shall be available in the Bond Fund established under the Indenture sufficient Available Moneys (as defined in the Indenture) to pay all amounts due with respect to such a redemption.

In the event any of the Bonds or portions thereof are called for redemption as aforesaid, notice of the call for redemption, identifying the Bonds or portions thereof to be redeemed and the redemption price (including the premium, if any), shall be given by the Trustee by mailing a copy of the redemption notice by first-class mail at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption to the Owner of each Bond to be redeemed in whole or in part at the address shown on the registration books. Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice. No further interest shall accrue on the principal of any Bond called for redemption after the redemption date if Available Moneys (as defined in the Indenture) sufficient for such redemption have been deposited with the Trustee. Notwithstanding the foregoing, the notice requirements contained in the first sentence of this paragraph may be deemed satisfied with respect to a transferee of a Bond which has been purchased pursuant to the Demand Purchase Option under certain circumstances provided in Section 4.06 of the Indenture, after such Bond has previously been called for redemption, notwithstanding the failure to satisfy the notice requirements of the first sentence of this paragraph with respect to such transferee.

If less than all the Bonds are to be redeemed, the particular Bonds or portions thereof to be redeemed shall be selected by the Trustee by lot. Prior to the Conversion Date, in case a Bond is of a denomination larger than $100,000, a portion of such Bond ($100,000 or any integral multiple of $5,000 in excess thereof) may be redeemed, but Bonds shall be redeemed only if the remaining unredeemed portion of such Bond is in the principal amount of $100,000 or any integral multiple in excess of $100,000.

The Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State, particularly the Act, and by appropriate action duly taken by the Board which authorizes the execution and delivery of the Agreement and the Indenture. The Bonds have been issued under the provisions of the Act.


Notwithstanding anything to the contrary contained herein or in the Indenture, the Agreement, or in any other instrument or document executed by or on behalf of the Board in connection herewith, no stipulation, covenant, agreement or obligation contained herein or therein shall be deemed or construed to be a stipulation, covenant, agreement or obligation of any present or future member, commissioner, director, trustee, officer, employee or agent of the Board, or of any successor to the Board, in any such person's individual capacity, and no such person, in his individual capacity, shall be liable personally for any breach or nonobservance of or for any failure to perform, fulfill or comply with any such stipulations, covenants, agreements or the principal of or premium, if any, or interest on any of the Bonds or for any claim based thereon or on any such stipulation, covenant, agreement or obligation, against any such person, in his individual capacity, either directly or through the Board or any successor to the Board, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such person, in his individual capacity, is hereby expressly waived and released.

The Owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, unless certain circumstances described in the Indenture shall have occurred. In certain events, on the conditions, in the manner and with the effect set forth in the Indenture, the principal of all the Bonds issued under the Indenture and then outstanding may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Board and the rights of the Owners of the Bonds at any time by the Board with the consent of the Company, the Bank and the holders of all Bonds at the time outstanding. Any such consent or any waiver by the Company, the Bank and the holders of all Bonds at the time outstanding shall be conclusive and binding upon the Owner and upon all future Owners of this Bond and of any Bond issued in replacement hereof whether or not notation of such consent or waiver is made upon this Bond. The Indenture also contains provisions which, subject to certain conditions, permit or require the Trustee to waive certain past defaults under the Indenture and their consequences.

It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in connection with the execution and delivery of the Indenture and the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law; and that the issuance of this Bond and the issue of which it forms a part, together with all other obligations of the Board, does not exceed or violate any constitutional or statutory limitation.

This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been signed by the Trustee or the Tender Agent, as authenticating agent.


IN WITNESS WHEREOF, The Industrial Development Board of the City of Huntsville has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of its Chairman or Vice Chairman, and its corporate seal to be affixed, imprinted or reproduced hereon and attested by the manual or facsimile signature of its Secretary or Assistant Secretary all as of the date first above written.

THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF HUNTSVILLE

Attest: By

(SEAL)

(Form of Certificate of Authentication)

CERTIFICATE OF AUTHENTICATION

This Bond is one of the Bonds of the issue described in the within-mentioned Trust Indenture.

FIRST UNION NATIONAL BANK,
as Trustee and Tender Agent

By:
Authorized Representative

Date of Authentication:


(Form for Transfer)

FOR VALUE RECEIVED, _________________, the undersigned, hereby sells, assigns and transfers unto (Tax Identification or Social Security No._______________) the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints attorney to transfer the within Bond on the books kept for registration thereof, with full power of substitution in the premises.

Dated

NOTICE: Signature(s) must be
guaranteed by an approved eligible
guarantor institution, an institution
which is participant in a Securities
Transfer Association recognized
signature guarantee program.

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


EXHIBIT "B"

(FIXED RATE FORM OF BOND)

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation ("DTC") to the Board or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co. or in such other name as is requested by an authorized representative of DTC (and any payment is made to Cede & Co. or to such other entity as is requested by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered owner (the "Registered Owner") hereof, Cede & Co., has an interest herein.

NEITHER THE CITY OF HUNTSVILLE NOR THE STATE OF ALABAMA IS OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE CITY OF HUNTSVILLE OR THE STATE OF ALABAMA IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL OR PREMIUM, IF ANY, OF OR INTEREST ON THIS BOND. THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF THE BOARD, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE BOARD PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THIS BOND DOES NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE BOARD. THE BOARD HAS NO TAXING POWER.

THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE

TAX-EXEMPT VARIABLE RATE DEMAND/FIXED RATE
REFUNDING REVENUE BOND

(CENTRAL CPVC CORPORATION PROJECT)

SERIES OF 1998

No. FR- $ Interest Rate: CUSIP


KNOW ALL MEN BY THESE PRESENTS that THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HUNTSVILLE (the "Board"), for value received, promises to pay from the source and as hereinafter provided, to CEDE & CO. or registered assigns, on ____________________, upon surrender hereof, the principal sum of Dollars, and in like manner to pay interest (calculated on the basis of a 360-day year of twelve 30 day months) on said sum at the rate per annum set forth above on July 1 and January 1 of each year, commencing , (each an "Interest Payment Date") from the Interest Payment Date next preceding the date of authentication hereof to which interest has been paid or duly provided for, unless the date of authentication hereof is an Interest Payment Date to which interest has been paid or duly provided for, in which case from the date of authentication hereof or unless no interest has been paid or duly provided for on the Bonds (as hereinafter defined), in which case from the Conversion Date (as defined in the Indenture, as hereinafter defined), until payment of the principal hereof has been made or duly provided for. Notwithstanding the foregoing, if this Bond is authenticated after any date which is the fifteenth day next preceding any Interest Payment Date (a "Record Date") and before the following Interest Payment Date, this Bond shall bear interest from such Interest Payment Date; provided, however, that if the Board shall default in the payment of interest due on such Interest Payment Date, then this Bond shall bear interest from the next preceding interest payment date to which interest has been paid or duly provided for, or, if no interest has been paid or duly provided for on the Bonds, from the Date of Issuance. The principal of this Bond is payable in lawful money of the United States of America at the principal corporate trust office of First Union National Bank, as trustee (together with its successors in trust, the "Trustee") or at the duly designated office of any successor Trustee under the Trust Indenture, dated as of October 1, 1998 between the Board and the Trustee (which Indenture, as from time to time amended and supplemented, is hereinafter referred to as the "Indenture"). Payment of interest on this Bond shall be made on each Interest Payment Date to the registered Owner hereof as of the applicable Record Date and shall be paid by check mailed by the Trustee to such address as it appears on the registration books of the Board or at such other address as is furnished to the Trustee in writing by such registered Owner, or in such other manner as may be permitted by the Indenture; provided, that such interest shall be paid by wire transfer to:
(i) the Bank; and (ii) any Holder of at least $1,000,000 in aggregate principal amount of Bonds, if the Holder makes a written request of the Trustee at least 15 days before a Record Date specifying the account address and wiring instructions. Such a request may provide that it will remain in effect for subsequent interest payments until changed or revoked by written notice to the Trustee or upon the transfer or re-registration of the Bond.

As used herein, the term "Business Day" means a day which is not a Saturday, Sunday or legal holiday on which banking institutions in the State of New York, State of Alabama, the City of New York, or the city in which the principal office of the Trustee, the Tender Agent or the Bank are authorized to remain closed or on which the New York Stock Exchange is closed.


This Bond is one of the duly authorized bonds designated as the Tax-Exempt Variable Rate Demand/Fixed Rate Refunding Revenue Bonds (Central CPVC Corporation Project) Series of 1998 of the Board issued in the original aggregate principal amount of $7,500,000 (herein referred to as the "Bonds") under and by virtue of Act No. 648 adopted at the 1949 Regular Session of the Legislature of the State of Alabama, approved September 19, 1949, as amended
(said Act being codified as Section 11-54-80, et seq., Code of Alabama, 1975)
(the "Act"), and by virtue of a resolution duly adopted by the Board (the "Bond Resolution"), and equally and ratably secured under the Indenture, for the purpose of raising funds to refund a bond issued to finance a portion of the costs of a project consisting of (i) the acquisition, construction, and equipping a manufacturing facility for the manufacture of CPVC pipe and fittings for the fire protection industry to be located at the Premises; and (ii) the payment of a portion of the costs of issuance of the Bonds (the "Project"). Pursuant to an Amended and Restated Lease Agreement, dated as of October 1, 1998 (the "Agreement") by and between the Board and Central CPVC Corporation, an Alabama corporation (the "Company"), lease payments sufficient for the prompt payment when due of the principal and Purchase Price of, premium, if any, and interest on the Bonds are to be paid to the Trustee for the account of the Board and deposited in the Bond Fund established by the Indenture and have been duly pledged for that purpose, all to the extent and in the manner provided in the Indenture.

The Bonds are ratably secured by and entitled to the protection of the Indenture, pursuant to which all payments due from the Company to the Board under the Agreement (other than certain indemnification payments and the payment of certain expenses of the Board) are assigned to the Trustee to secure the payment of the principal of and premium, if any, and interest on the Bonds.

Reference is hereby made to the Indenture and the Agreement for a description of the property pledged and assigned, the provisions, among others, with respect to the nature and extent of the security, the rights, duties and obligations of the Board, the Trustee and the Owners of the Bonds, and the terms upon which the Bonds are issued and secured; and the Owner of this Bond, by acceptance hereof, hereby consents to the terms and provisions of all of the foregoing as a material portion of the consideration for the issuance of this Bond.

Pursuant to the Act, neither the members of the Board nor any person executing bonds for the Board shall be liable personally on said bonds by reason of the issuance thereof.


The Bonds Outstanding from time to time are limited and special obligations of the Board, the principal of, premium, if any, and interest on which are payable solely from the amounts to be paid under the Agreement and otherwise as provided in the Indenture and in the Agreement, which amounts are hereby specifically pledged to the payment thereof in the manner and to the extent herein specified, and shall not be deemed to constitute a general obligation or liability of the Board, its officers of employees. NEITHER THE CITY OF HUNTSVILLE NOR THE STATE OF ALABAMA IS OBLIGATED TO PAY, AND NEITHER THE FAITH AND CREDIT NOR TAXING POWER OF THE CITY OF HUNTSVILLE OR THE STATE OF ALABAMA IS PLEDGED TO THE PAYMENT OF, THE PRINCIPAL OR REDEMPTION PRICE, IF ANY, OF OR INTEREST ON THIS BOND. THIS BOND IS NOT AND SHALL NOT BE IN ANY WAY A DEBT OR LIABILITY OF THE CITY OF HUNTSVILLE OR THE STATE OF ALABAMA OR OF ANY POLITICAL SUBDIVISION THEREOF AND DOES NOT AND SHALL NOT CREATE OR CONSTITUTE ANY INDEBTEDNESS, LIABILITY OR OBLIGATION OF THE CITY OF HUNTSVILLE OR THE STATE OF ALABAMA OR OF ANY POLITICAL SUBDIVISION THEREOF WHETHER LEGAL, MORAL OR OTHERWISE. THIS BOND IS A SPECIAL, LIMITED OBLIGATION OF THE BOARD, PAYABLE SOLELY OUT OF THE REVENUES OR OTHER RECEIPTS, FUNDS OR MONEYS OF THE BOARD PLEDGED UNDER THE INDENTURE AND FROM ANY AMOUNTS OTHERWISE AVAILABLE UNDER THE INDENTURE FOR THE PAYMENT OF THE BONDS. THE BOND DOES NOT NOW AND SHALL NEVER CONSTITUTE A CHARGE AGAINST THE GENERAL CREDIT OF THE BOARD. THE BOARD HAS NO TAXING POWER.

This Bond is transferable by the Registered Owner hereof in person or by his attorney duly authorized in writing, at the principal corporate trust office of the Trustee but only in the manner, subject to the limitations and upon payment of the charges provided in the Indenture, and upon surrender and cancellation of this Bond. Upon such transfer a new registered Bond or Bonds of authorized denomination or denominations for the same aggregate principal amount will be issued to the transferee in exchange herefor. The Board and the Trustee may deem and treat the registered Owner hereof as the absolute Owner hereof (whether or not this Bond shall be overdue) for all purposes, and neither the Board nor the Trustee shall be bound by any notice or knowledge to the contrary.

The Bonds shall be issuable as fully registered Bonds without coupons in the denomination of $5,000 or any integral multiple thereof.

Extraordinary Redemption

The Bonds are callable for redemption in the event: (1) the Project Facilities or any portion thereof is damaged or destroyed or taken in a condemnation proceeding as provided in Section 6.4 of the Agreement; or (2) the Company shall exercise its option to cause the Bonds to be redeemed as provided in Section 9.4 of the Agreement. If called for redemption at any time pursuant to (1) or (2) above, the Bonds shall be subject to redemption by the Board on any interest payment date, in whole or in part, at a redemption price of one hundred percent (100%) of the principal amount thereof plus accrued interest to the redemption date.

Mandatory Redemption

The Bonds are subject to mandatory redemption, five (5) Business Days prior to the Letter of Credit Termination Date, in whole, at a redemption price equal to one hundred percent (100% of the principal amount thereof being redeemed plus accrued interest to the redemption date if, on the thirtieth
(30th) Business Day prior to the Letter of Credit Termination Date, the Trustee shall not have received a Substitute Letter of Credit which will be effective on or before the Letter of Credit Termination Date.


The Bonds are also subject to mandatory redemption, in whole, at any time, within one hundred eighty (180) days after the Trustee receives notice of the occurrence of a "Determination of Taxability" (as hereinafter defined), at a redemption price equal to one hundred percent (100%) of the aggregate principal amount of Bonds Outstanding plus accrued interest to the redemption date.

"Event of Taxability" with respect to any Bond means a change of law or regulations, or the interpretation thereof, or the occurrence of any other event or the existence of any other circumstance (including without limitation the fact that any representations or warranties of the Company or the Board made in connection with the issuance of any Bond is or was untrue or that a covenant of the Company has been breached) that has the effect of causing interest payable on any Bond to be includable in gross income for federal income tax purposes under Section 103 of the Internal Revenue Code of 1986, as amended, and the applicable regulations thereunder (the "Code") other than by reason that such interest: (i) is includable in the gross income of an Owner or former Owner of any Bond while such Owner or former Owner is or was a "substantial user" or a "related person" to a "substantial user" of the Project Facilities (as such terms are used in Section 147(a)(1) of the Code); or (ii) is deemed an item of tax preference including, without limitation, an item subject to any alternative minimum tax.

"Event of Taxability" means, with respect to any Bond shall be deemed to have been made upon the first to occur of the following events:

(i) the date on which the Company determines that an Event of Taxability has occurred by filing with the Trustee a statement to that effect supported by one or more tax schedules, returns or documents which disclose that such an Event of Taxability has occurred;

(ii) the date on which the Company or the Trustee is advised by private ruling, technical advice or any other written communication from any authorized official of the Internal Revenue Service that, based upon any filings of the Company or any other person or entity, or upon any review or audit of the Company or any other person or entity, or upon any other grounds whatsoever, an Event of Taxability has occurred;

(iii) the date on which the Trustee or the Company is advised that a court of competent jurisdiction has issued an order, declaration, ruling or judgment to the effect that an Event of Taxability has occurred;

(iv) the date the Trustee shall have received written notice from any owner of the Bonds that such owner has received a written assertion or claim by any authorized official of the Internal Revenue Service that an Event of Taxability has occurred; or

(v) the date the Trustee is notified that the Internal Revenue Service has issued any private ruling, technical advice or any other written communication, with or to the effect that an Event of Taxability has occurred;


provided, however, that (x) no Determination of Taxability described in each of clauses (i), (ii), (iii), (iv) or (v) above shall be deemed to have occurred unless the Trustee shall have received a written opinion of other nationally recognized bond counsel satisfactory to the Bank and the Company and not unsatisfactory to the Trustee, and in form and substance satisfactory to the Bank and the Company and not unsatisfactory to the Trustee, to the effect that an Event of Taxability has occurred; and (y) no Determination of Taxability described above shall be deemed to have occurred until 180 days shall have elapsed from the dates described in clauses (i), (ii), (iii), (iv) or (v) above without such Determination of Taxability having been rescinded or canceled.

Mandatory Sinking Fund Redemption

The Bonds are subject to mandatory redemption on the Interest Payment Date occurring in the month of September in each of the years set forth below commencing on the Interest Payment Date occurring in September of 1998 (each, a "Mandatory Sinking Fund Payment Date"), at a redemption price equal to 100% of the principal amount thereof plus accrued interest as follows:

                   Mandatory Sinking
Year                 Fund Payments
----                 -------------
2000                   $560,000
2001                   $560,000
2002                   $560,000
2003                   $560,000
2004                   $560,000
2005                   $560,000
2006                   $560,000
2007                   $560,000
2008                   $560,000
2009                   $575,000
2010                   $580,000
2011                   $580,000
2012                   $580,000
2013                   $145,000*

*Final maturity of the Bonds is January 1, 2013


Optional Redemption

If the length of time from the Conversion Date to the final maturity date of the Bonds is seven (7) years or more, the Bonds are subject to redemption by the Board, at the option of the Company, on or after the fifth
(5th) anniversary of the Conversion Date, in whole at any time or in part on any Interest Payment Date, at the redemption price of 100% of the principal amount thereof being redeemed plus accrued interest to the redemption date.

In the event any of the Bonds or portions thereof are called for redemption as aforesaid, notice of the call for redemption, identifying the Bonds or portions thereof to be redeemed and the redemption price, shall be given by the Trustee by mailing a copy of the redemption notice by first-class mail at least thirty (30) days but not more than sixty (60) days prior to the date fixed for redemption to the Owner of each Bond to be redeemed in whole or in part at the address shown on the registration books. Any notice mailed as provided above shall be conclusively presumed to have been duly given, whether or not the Owner receives the notice. No further interest shall accrue on the principal of any Bond called for redemption after the redemption date if moneys sufficient for such redemption have been deposited with the Trustee.

If less than all the Bonds are to be redeemed, the particular Bonds or portions thereof to be redeemed shall be selected by the Trustee by lot.


The Bonds are issued pursuant to and in full compliance with the Constitution and laws of the State, particularly the Act, and by appropriate action duly taken by the Board which authorizes the execution and delivery of the Agreement and the Indenture. The Bonds have been issued under the provisions of the Act.

Notwithstanding anything to the contrary contained herein or in the Indenture, the Agreement, or in any other instrument or document executed by or on behalf of the Board in connection herewith, no stipulation, covenant, agreement or obligation contained herein or therein shall be deemed or construed to be a stipulation, covenant, agreement or obligation of any present or future member, commissioner, director, trustee, officer, employee or agent of the Board, or of any successor to the Board, in any such person's individual capacity, and no such person, in his individual capacity, shall be liable personally for any breach or nonobservance of or for any failure to perform, fulfill or comply with any such stipulations, covenants, agreements or obligations, nor shall any recourse be had for the payment of the principal of or premium, if any, or interest on any of the Bonds or for any claim based thereon or on any such stipulation, covenant, agreement or obligation, against any such person, in his individual capacity, either directly or through the Board or any successor to the Board, under any rule of law or equity, statute or constitution or by the enforcement of any assessment or penalty or otherwise, and all such liability of any such person, in his individual capacity, is hereby expressly waived and released.

The Owner of this Bond shall have no right to enforce the provisions of the Indenture or to institute action to enforce the covenants therein, or to take any action with respect to any default under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto, unless certain circumstances described in the Indenture shall have occurred. In certain events, on the conditions, in the manner and with the effect set forth in the Indenture, the principal of all the Bonds issued under the Indenture and then outstanding may become or may be declared due and payable before the stated maturity thereof, together with interest accrued thereon.

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Board and the rights of the Owners of the Bonds at any time by the Board with the consent of the Company, the Bank and the holders of all Bonds at the time outstanding. Any such consent or any waiver by the Company, the Bank and the holders of all Bonds shall be conclusive and binding upon the Owner and upon all future Owners of this Bond and of any Bond issued in replacement hereof whether or not notation of such consent or waiver is made upon this Bond. The Indenture also contains provisions which, subject to certain conditions, permit or require the Trustee to waive certain past defaults under the Indenture and their consequences.


It is hereby certified, recited and declared that all acts, conditions and things required to exist, happen and be performed precedent to and in connection with the execution and delivery of the Indenture and the issuance of this Bond do exist, have happened and have been performed in due time, form and manner as required by law; and that the issuance of this Bond and the issue of which it forms a part, together with all other obligations of the Board does not exceed or violate any constitutional or statutory limitation.

This Bond shall not be valid or become obligatory for any purpose or be entitled to any security or benefit under the Indenture until the certificate of authentication hereon shall have been signed by the Trustee or a duly appointed authenticating agent pursuant to the Indenture.

IN WITNESS WHEREOF, The Industrial Development Board of the City of Huntsville has caused this Bond to be signed in its name and on its behalf by the manual or facsimile signature of its Chairman or Vice Chairman and its corporate seal to be affixed, imprinted or reproduced hereon and attested by the manual or facsimile signature of its Secretary or Assistant Secretary, all as of the Date of Issuance.

THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF HUNTSVILLE

Attest: By:

(SEAL)

(Form of Certificate of Authentication)

CERTIFICATE OF AUTHENTICATION

This Bond is one of the Bonds of the issue described in the within-mentioned Trust Indenture.

FIRST UNION NATIONAL BANK, as Trustee

By
Authorized Representative

Date of Authentication:


(Form for Transfer)

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

Dated:
NOTICE: Signature(s) must be guaranteed
by an approved eligible guarantor
institution, an institution which is
participant in a Securities Transfer
Association recognized signature
guarantee program.

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


Exhibit 10(z)

                                                                   LETTER OF
OUR CREDIT NO.      ISSUE DATE           EXPIRY DATE             CREDIT AMOUNT
--------------      ----------           -----------             -------------
SM406777         October 29, 1998       March 31, 2001           $7,641,781.00

BENEFICIARY                                     APPLICANT
-----------                                     ---------
First Union National Bank, as trustee           Central CPVC Corporation
123 South Broad Street                          451 North Cannon Avenue
Philadelphia, Pennsylvania 19109                Lansdale, Pennsylvania 19446

Attention: Corporate Trust Administration

Dear Beneficiary:

At the request, on the instructions and for the account of our customer, Central CPVC Corporation (the "Applicant"), with a business address at 451 North Cannon Avenue, Lansdale, Pennsylvania 19426, we (the "Bank") hereby establish our Irrevocable Letter of Credit No. SM406777 (the "Letter of Credit") in your favor, as Trustee under the Trust Indenture, dated as of October 1, 1998 (the "Indenture"), between The Industrial Development Board of the City of Huntsville (the "Board") and you pursuant to which $7,500,000 in aggregate principal amount of the Board's Tax-Exempt Variable Rate Demand/Fixed Rate Refunding Revenue Bonds (Central CPVC Corporation Project), Series of 1998 (the "Bonds") are being issued. This Letter of Credit is irrevocable and issued with respect to the Bonds.

This Irrevocable Letter of Credit is issued in the aggregate initial amount of Seven Million Six Hundred Forty-One Thousand Seven Hundred Eighty-One Dollars ($7,641,781) (such amount, as reduced and reinstated from time to time in accordance with the provisions hereof, the "Stated Amount") of which (i) an amount not exceeding Seven Million Five Hundred Thousand Dollars ($7,500,000) (as reduced and reinstated from time to time in accordance with the terms hereof, the "Principal Component"), may be drawn upon with respect to payment of the unpaid principal amount or the portion of Purchase Price corresponding to principal of the Bonds and (ii) an amount not exceeding One Hundred Forty-One Thousand Seven Hundred Eighty-One Dollars ($ 141,781) (representing 46 days of interest computed at the rate of 15% per annum as reduced and reinstated from time to time in accordance with the terms hereof, the "Interest Component") may be drawn upon with respect to payment of unpaid accrued interest, or the portion of Purchase Price corresponding to interest, on the Bonds on or prior to their stated maturity date, effective immediately and expiring on March 31, 2001 (the "Expiration Date").


First Union National Bank
October 29, 1998

Page 2

Subject to the foregoing and the further provisions of this Letter of Credit, a demand for payment may be made by you under this Letter of Credit against your sight draft(s) drawn on us, signed by an Authorized Officer stating on its face the clause, "Drawn under First Union National Bank Irrevocable Letter of Credit No. SM406777" and accompanied by: (A) if the drawing is being made with respect to the payment of the portion of the Purchase Price of the Bonds delivered to the Tender Agent (as defined in the Indenture) pursuant to Sections 5.01, 5.03 or 5.04 of the Indenture, corresponding to the principal thereof (an "A Drawing"), receipt by us of your written certificate in the form of Exhibit A attached hereto appropriately completed and signed by an Authorized Officer; (B) if the drawing is being made with respect to the payment of principal of the Bonds upon maturity or as a result of acceleration or redemption of the Bonds (a "B Drawing"), receipt by us of your written certificate in the form of Exhibit B attached hereto, appropriately completed and signed by an Authorized Officer, and (C) if the drawing is being made with respect to the payment of interest, or the portion of Purchase Price corresponding to interest, on the Bonds (a "C Drawing"), receipt by us of your written certificate in the form of Exhibit C attached hereto, appropriately completed and signed by an Authorized Officer. Presentation of such sight draft(s) and certificate(s) shall be made by writing (including telecopier) at our office located at First Union National Bank, 1345 Chestnut Street, 9th Floor, Philadelphia, Pennsylvania 19107, Attention: Letter of Credit Department, telephone number: (215) 973-8157, telecopier number: (215) 786-8803, or at any other office which may be designated by us by written notice delivered to you. All payments made by the Bank shall be made with its own funds.

Demands for payment may be made by you under this Letter of Credit on or prior to the expiration hereof at any time during our business hours on a Business Day at the address at which your sight draft(s) is(are) to be presented in accordance with the terms hereof. As used herein the term "Business Day" means any day other than (i) a Saturday or Sunday, (ii) a legal holiday or any other day on which banking institutions in the State of New York, the Commonwealth of Pennsylvania, the City of New York, the city in which the office of the Trustee and the Tender Agent administering the Indenture is located, the city in which the principal office of the Bank is located, are authorized or required by law to close, or (iii) a day on which the New York Stock Exchange is closed. If your sight draft accompanied by documents conforming to the terms and conditions of this Letter of Credit is made by you at or prior to 12:00 noon (Eastern Time) on a Business Day, such draft will be honored by us by 12:00 noon (Eastern Time) on the next succeeding Business Day. If your sight draft accompanied by documents conforming to the terms and conditions of this Letter of Credit is made by you after 12:00 noon (Eastern Time) on a Business Day, such draft will be honored by us by 12:00 noon (Eastern Time) on the second succeeding Business Day. Payment of any draft indicating a


First Union National Bank
October 29, 1998

Page 3

payment date which is not a Business Day as defined herein will be effected the next succeeding Business Day. If a demand for payment made by you hereunder does not, in any instance, conform to the terms and conditions of this Letter of Credit, we shall give you prompt notice that the purported negotiation was not effected in accordance with the terms and conditions of this Letter of Credit, stating the reasons therefor and that we are holding any documents at your disposal or are returning the same to you, as we may elect. Upon being notified that the purported negotiation was not effected in conformity with this Letter of Credit, you may attempt to correct any such nonconforming demand for payment if, and to the extent that, you are entitled (without regard to the provisions of this sentence) and able to do so.

Demands for payment hereunder honored by us shall not, in the aggregate, exceed the Stated Amount, as the Stated Amount may have been reduced by us or reinstated by us as provided below. Subject to the reinstatement effected in accordance with the terms hereof, each "A Drawing" and each "B Drawing" honored by the Bank hereunder shall pro tanto reduce the Principal Component and each "C Drawing" honored by the Bank hereunder shall pro tanto reduce the Interest Component; any such reduction shall result in a corresponding reduction in the Stated Amount, it being understood that after the effectiveness of any such reduction you shall no longer have any right to make a drawing hereunder in respect of the amount of such principal and/or interest on the Bonds or the payment of Purchase Price corresponding thereto.

Upon reimbursement to us or Congress Financial Corporation ("Congress"), as Congress so directs, from the proceeds of a remarketing of Bonds purchased with the proceeds of an "A Drawing" hereunder, of all amounts paid by us pursuant to an "A Drawing" hereunder, the Principal Component shall be reinstated automatically by the amount of such reimbursement. In addition, if you shall not have received, within ten calendar days after any payment in respect of a "C Drawing", written notice by tested telex from us that Congress has determined not to reinstate the Letter of Credit because either (i) the Company has failed to reimburse the Bank or Congress for the amount of such payment, together with interest thereon, or (ii) there is presently existing an Event of Default under and as defined in the Loan and Security Agreement dated September 18, 1998 (the "Loan Agreement") by and between the Applicant, certain affiliates of Applicant and Congress, the Interest Component shall be reinstated automatically, as of the opening of business on the tenth calendar day following such payment, by the amount of such "C Drawing"; provided, however, that in the event such "C Drawing" shall be submitted in respect of the payment of the portion of the Purchase Price corresponding to interest on the Bonds, upon reimbursement to us or Congress, as Congress so directs, from the proceeds of a remarketing of Bonds of all amounts paid by us pursuant to a "C Drawing" hereunder, the Interest Component shall be reinstated automatically by the amount of such reimbursement;


First Union National Bank
October 29, 1998

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provided further, that in no event shall the Interest Component be reinstated to an amount in excess of 46 days' interest (such amount computed as set forth in the third succeeding paragraph of this Letter of Credit) on the sum of the then applicable Principal Component plus the aggregate principal amount of any Pledged Bonds. Upon presentation to us by the Trustee of the Reduction Certificate attached hereto as Exhibit D, we will automatically reduce the Stated Amount of this Letter of Credit.

Only you as Trustee may make a drawing under this Letter of Credit. Upon the payment to you, to your designee or to your order of the amount specified in a sight draft drawn, we shall not thereafter be obligated to make any further payments under this Letter of Credit with respect to such sight draft to you or any other person who may have made to you or makes to you a demand for payment of principal of, Purchase Price of, or interest on, any Bond. By paying to you an amount demanded in accordance herewith, we make no representation as to the correctness of the amount demanded.

Payments made by us hereunder will be made to you in immediately available funds and out of our funds, and not, directly or indirectly, out of funds or other assets of the Applicants.

This Letter of Credit applies only to the payment of principal or the portion of Purchase Price of the Bonds corresponding to principal, provided, that any of the Bonds pledged to the Bank will not be entitled to the payment of principal with funds drawn hereunder until the principal amount of all other Bonds has been paid, and to pay up to $ 141,781 which is 46 days' interest accruing on the Bonds (computed at a rate of 15% per annum), from the Issue Date through the Expiration Date (computed on the basis of a 365- or 366-day year, actual days elapsed, notwithstanding the actual rate borne from time to time by the Bonds) and does not apply to any interest that may accrue thereon or any principal, or other amounts which may be payable with respect to the Bonds subsequent to the expiration of this Letter of Credit.

This Letter of Credit shall automatically terminate and be delivered to the Bank for cancellation, at 4 p.m. (Eastern Time) on the date which is the earliest of (i) upon receipt of your certificate in the form of Exhibit E signed by an Authorized Officer and the honoring by us of the final drawing available to be made hereunder, (ii) five calendar days after the date upon which we receive your certificate in the form of Exhibit E signed by an Authorized Officer with respect to either (a) receipt of a Substitute Letter of Credit or
(b) conversion of the Bonds to a fixed rate of interest, (iii) upon receipt of your certificate in the form of Exhibit E signed by an Authorized Officer to the effect that no Bonds remain outstanding under the Indenture, together with the Letter of Credit and (iv) March 31, 2001, the stated Expiration Date. This Letter of Credit shall


First Union National Bank
October 29, 1998

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be promptly surrendered to us by you upon such termination.

Communications with respect to this Letter of Credit shall be in writing and shall be addressed to us at First Union National Bank, 1345 Chestnut Street, 9th Floor, Philadelphia Pennsylvania 19107, Attention: Letter of Credit Department, specifically referring thereon to this Letter of Credit by number.

This Letter of Credit is transferable in its entirety (but not in part) to any transferee who has succeeded you as Trustee under the Indenture. We agree to issue a substitute Letter of Credit to any such successor trustee (and to successively replace any such substitute letter of credit) upon the return to us for cancellation of the original of the Letter of Credit to be replaced, accompanied by a request relating to such Letter of Credit, which (i) shall be substantially in the form of Exhibit F attached hereto with the blanks appropriately completed, (ii) shall be signed by an Authorized Officer, (iii) shall specifically refer to the letter of credit number as the number of the letter of credit to be replaced and (iv) shall state the name and address of the successor trustee.

As used herein (a) "Authorized Officer" shall mean any person signing as one of your Vice Presidents, Assistant Vice Presidents, Trust Officers or Assistant Trust Officers and (b) "Purchase Price" shall mean the principal amount of, together with accrued interest on, any Bonds to be purchased in accordance with Sections 5.01, 5.03 or 5.04 of the Indenture. Other capitalized terms used herein but not defined herein shall have the same meanings as in the Indenture or in the Loan Agreement.

This Letter of Credit sets forth in full our undertaking, and such undertaking shall not in any way be modified, amended, amplified or limited by reference to any document, instrument or agreement referred to herein (including, without limitation, the Bonds), except only the certificate(s) and sight draft(s) referred to herein; and any such reference shall not be deemed to incorporate herein by reference any document, instrument or agreement except for such certificate(s) and such sight draft(s).


First Union National Bank
October 29, 1998

Page 6

This Letter of Credit is subject to the Uniform Customs and Practice for Documentary Credits (1993 Revision), International Chamber of Commerce, Publication No. 500 (the "Uniform Customs"). This Letter of Credit shall be deemed to be made under the laws of the Commonwealth of Pennsylvania and shall, as to matters not governed by the Uniform Customs, be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

Very truly yours,

FIRST UNION NATIONAL BANK

/s/ Richard Fortina
-------------------------
AUTHORIZED SIGNATURE


EXHIBIT A

CERTIFICATE FOR "A DRAWING"

(Draws with respect to payment of Purchase Price of the Bonds pursuant to Mandatory and Optional Tenders of the Bonds)

[Date]

First Union National Bank
1345 Chestnut Street, 9th Floor
Philadelphia, Pennsylvania 19107
Attention: Letter of Credit Department

Re: Irrevocable Letter of Credit No. SM406777

The undersigned, a duly authorized officer of First Union National Bank (the "Trustee"), hereby certifies to First Union National Bank (the "Bank") with reference to the Bank's Irrevocable Letter of Credit No. SM406777 (the "Letter of Credit") (any capitalized terms used herein and not defined shall have its respective meaning as set forth in the Letter of Credit issued by the Bank in favor of the Trustee) that:

(1) The Trustee is the Trustee under the Indenture for the holders of the Bonds.

(2) The Trustee is making a drawing under the above-referenced Letter of Credit in the amount of $__________ with respect to payment of the portion of the Purchase Price of Bonds corresponding to the principal amount thereof, which Bonds are to be purchased pursuant to Sections 5.01, 5.03 or 5.04 of the Indenture.

(3) The amount of the sight draft accompanying this certificate hereby does not exceed the stated amount or the amount available on the date hereof to be drawn under the above-referenced Letter of Credit in respect of the portion of the Purchase Price of Bonds corresponding to the principal amount thereof.

(4) Upon receipt by the undersigned of the amount demanded hereby, (a) the undersigned will transfer such amount to the Tender Agent for the payment when due of


the principal amount owing on account of the purchase of the Bonds pursuant to the Indenture, (b) no portion of said amount shall be applied by the undersigned for any other purpose and (c) no portion of said amount shall be commingled with other funds held by the undersigned.

IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the ______ day of _____________________19__.

FIRST UNION NATIONAL BANK, as trustee

By:__________________________________
Title:_______________________________


EXHIBIT B

CERTIFICATE FOR "B DRAWING"

(Draws with respect to payment of principal at maturity, upon acceleration or upon partial redemption or redemption in whole)

[Date]

First Union National Bank
1345 Chestnut Street, 9th Floor
Philadelphia, Pennsylvania 19107
Attention: Letter of Credit Department

Re: Irrevocable Letter of Credit No. SM406777

The undersigned, a duly authorized officer of First Union National Bank (the "Trustee"), hereby certifies to First Union National Bank (the "Bank") with reference to the Bank's Irrevocable Letter of Credit No. SM406777 (the "Letter of Credit") (any capitalized terms used herein and not defined shall have its respective meaning as set forth in the Letter of Credit issued by the Bank in favor of the Trustee) that:

(1) The Trustee is the Trustee under the Indenture for the holders of the Bonds.

(2) The Trustee is making a drawing under the above-referenced Letter of Credit in the amount of $________ with respect to payment of the principal of the Bonds, which amount has, or will, within five business days, become due and payable pursuant to the Indenture, upon maturity or as a result of acceleration or redemption of the Bonds.

(3) The amount of the sight draft accompanying this certificate hereby does not exceed the stated amount or the amount available on the date hereof to be drawn under the above-referenced Letter of Credit in respect of the principal of the Bonds.

(4) Upon receipt by the undersigned of the amount demanded hereby, (a) the undersigned will apply the same directly to the payment when due of the principal amount owing on account of the maturity, redemption or acceleration of the Bonds


pursuant to the Indenture, (b) no portion of said amount shall be applied by the undersigned for any other purpose and (c) no portion of said amount shall be commingled with other funds held by the undersigned.

IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _____ day of __________________ 19__.

FIRST UNION NATIONAL BANK, as trustee

By:__________________________________
Title:_______________________________


EXHIBIT C

CERTIFICATE FOR "C DRAWING"
(Draws with respect to payment of
accrued interest upon the Bonds)

(Date]

First Union National Bank
1345 Chestnut Street, 9th Floor
Philadelphia, Pennsylvania 19107
Attention: Letter of Credit Department

Re: Irrevocable Letter of Credit No. SM406777

The undersigned, a duly authorized officer of First Union National Bank (the "Trustee"), hereby certifies to First Union National Bank (the "Bank") with reference to the Bank's Irrevocable Letter of Credit No. SM406777 (the "Letter of Credit") (any capitalized terms used herein and not defined shall have its respective meaning as set forth in the Letter of Credit issued by the Bank in favor of the Trustee) that:

(1) The Trustee is the Trustee under the Indenture for the holders of the Bonds.

(2) The Trustee is making a drawing under the above-referenced Letter of Credit in the amount of $___________ with respect to payment of [the portion of the Purchase Price of $_____________ in principal amount of the Bonds corresponding to the accrued interest thereon, which Bonds are to be purchased pursuant to Sections 5.01, 5.03 or 5.04 of the Indenture] or
[interest on the Bonds, which amount has accrued and become due and payable pursuant to the Indenture, upon a stated Interest Payment Date or as a result of acceleration or redemption of the Bonds].

(3) The amount of the sight draft accompanying this certificate hereby does not exceed $____________ (which represents no more than 46 days' interest accrued on the Bonds), the amount available on the date hereof to be drawn under the above-referenced Letter of Credit in respect of unpaid accrued interest on the Bonds or the portion of the Purchase Price corresponding to interest on the Bonds.


(4) Upon receipt by the undersigned of the amount demanded hereby, (a) the undersigned will [apply the same directly to the payment when due of the interest owing on account of the Bonds pursuant to the Indenture] or
[transfer such amount to the Tender Agent for the payment of the portion of the Purchase Price of Bonds pursuant to Sections 5.01, 5.03 or 5.04 of the Indenture corresponding to accrued interest thereon], (b) no portion of said amount shall be applied by the undersigned for any other purpose and (c) no portion of said amount shall be commingled with other funds held by the undersigned.

IN WITNESS WHEREOF, the Trustee has executed and delivered this Certificate as of the _______ day of 19__.

FIRST UNION NATIONAL BANK, as trustee

By:_______________________________
Title:____________________________


First Union National Bank Irrevocable Letter of Credit No. SM406777

EXHIBIT D

REDUCTION CERTIFICATE

The undersigned, a duly authorized officer of First Union National Bank (the "Trustee"), hereby certifies as follows to First Union National Bank as issuer of the above-referenced letter of credit (the "Letter of Credit").

1. All terms defined in the Letter of Credit are used herein with the same meanings.

2. The Trustee is the Trustee under the Indenture.

3. The Trustee hereby notifies you that on or prior to the date hereof the Bonds in a principal amount of ______________ Dollars ($__________ ) have been redeemed or defeased, and are deemed paid, pursuant to the Indenture.

4. The Trustee hereby consents to a reduction in the Stated Amount by ______________ Dollars ($____________), representing the sum of the aggregate principal amount of the Bonds referred to in the preceding paragraph hereof and interest thereon in the amount of _____________ Dollars ($__________).

Dated:_____________                    FIRST UNION NATIONAL BANK, as trustee

                                       By:__________________________________
                                       Title:_______________________________

                                                       First Union National Bank
                                                    Irrevocable Letter of Credit
                                                                    No. SM406777
                                   EXHIBIT E

TERMINATION CERTIFICATE

The undersigned, a duly authorized officer of First Union National Bank (the "Trustee"), hereby certifies as follows to First Union National Bank as issuer of the above-referenced letter of credit (the "Letter of Credit").

1. All terms defined in the Letter of Credit are used herein with the same meanings.

2. The Trustee is the Trustee under the Indenture.

3. The Trustee hereby requests termination of the Letter of Credit submitted herewith for the following reason [state one of the following]:

(a) The draft or demand accompanying this Certificate is the final draft or demand to be drawn under the Letter of Credit and, upon the honoring of such draft or demand, the Trustee will surrender the Letter of Credit to the Bank for cancellation;

(b) The conditions precedent to the acceptance of a Substitute Letter of Credit have been satisfied and the Trustee has accepted the Substitute Letter of Credit; or

(c) The Bonds have been converted to a fixed rate of interest in accordance with the Indenture; or

(d) No Bonds remain Outstanding (as defined in the Indenture).

Dated:______________                    FIRST UNION NATIONAL BANK, as trustee

                                        By:__________________________________
                                        Title:_______________________________


EXHIBIT F

TRANSFER CERTIFICATE

[Date]

First Union National Bank
1345 Chestnut Street, 9th Floor
Philadelphia, Pennsylvania 19107
Attention: Letter of Credit Department

Re: First Union Irrevocable Letter of Credit No. SLM406777

Gentlemen:

Reference is made to (i) the above-referenced letter of credit (the "Old Letter of Credit") and (ii) the Trust Indenture dated as of October 1, 1998 (the "Indenture") between The Industrial Development Board of the City of Huntsville and us.

[Name and address of successor trustee] (the "Successor Trustee") has been properly appointed and qualified as successor trustee under the terms of Article IX of the Indenture. You are hereby requested to issue, in accordance with the terms of the Old Letter of Credit, a new letter of credit to the Successor Trustee having the same terms and providing for the same Stated Amount then applicable under the Old Letter of Credit.

We submit herewith for cancellation the original of the Old Letter of Credit.

The individual signing below on our behalf hereby represents that he or she is duly authorized to so sign on our behalf.

Very truly yours,

FIRST UNION NATIONAL BANK, as trustee

By:__________________________________
Title:_______________________________


Exhibit 10(aa)
UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION


In the Matter of
CENTRAL SPRINKLER CORP.,
          and                            CPSC DOCKET NO. 98-2

 CENTRAL SPRINKLER Co.,
      Respondents
------------------------------

CONSENT AGREEMENT

This Consent Agreement is made by and between the staff of the Consumer Product Safety Commission and Respondents, Central Sprinkler Corp. and Central Sprinkler Co., to settle the above-captioned administrative action. The parties agree as follows:

Parties

1. The "staff" is the staff of the United States Consumer Product Safety Commission ("CPSC" or "the Commission"), an independent regulatory agency of the United States, established by Congress pursuant to Section 4 of the Consumer Product Safety Act ("CPSA"), 15 U.S.C. Section 2053.

2. Respondents Central Sprinkler Corporation and Central Sprinkler Company (hereinafter collectively "Central") are corporations organized and

existing under the laws of

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.


the Commonwealth of Pennsylvania, with their principal place of business at 451 North Cannon Ave., Lansdale, PA 19446.

Subject Matter

3. From 1982 to July, 1998, Central manufactured and sold and/or distributed between 9 and 10 million "Omega" brand automatic fire sprinklers. On March 3, 1998, the staff of the Consumer Product Safety Commission filed an Administrative Complaint ("Complaint") against Central, seeking recall and replacement of Central's Omega fire sprinklers pursuant to 15 U.S.C. Section 2064. The Complaint alleges that Central's Omega sprinklers are defective and will not function in certain fire situations, creating a substantial risk of bodily injury and/or death.

4. To date, the staff has received reports that from 1990 to the present, Omega sprinklers did not function in 20 fires.

5. Central his filed an answer to the Complaint in which it avers, inter alia, that its Omega sprinklers are not defective within the meaning of 15 U.S.C. Section 2064.

6. The staff also contends that Central obtained information which reasonably supported the conclusion that Omega sprinklers contained a defect or defects that could create a substantial risk of injury to the public but failed to report such information in a timely manner pursuant to 15 U.S.C. 2064(b). Central denies any wrongdoing under 15 U.S.C. Section 2064(b).

                            Agreement of the Parties

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.
                                       2


7. It is the express purpose of the parties in entering into this Agreement to protect the public safety by carrying out the recall and replacement of Omega sprinklers.

8. The parties intend for this Consent Agreement and the attached Order (hereinafter "Order" or "the Order"), which is hereby incorporated by reference. to resolve all allegations and requests for relief set forth in the Administrative Complaint in this proceeding and to bar the initiation or referral by the CPSC of any administrative, civil, or criminal claims within the CPSC's jurisdiction arising from the conduct of Central, its officers, directors and/or employees regarding Omega sprinklers. This resolution shall not apply to any actions arising from non-compliance with or disputes pertaining to this Agreement or the Order.

9. For purposes of this settlement only, Central admits that "Omega" fire sprinklers are "consumer products" under Section 3 of the CPSA, 15 U.S.C.
Section 2052, subject to the jurisdiction of the Consumer Product Safety Commission.

10. For purposes of this settlement only, Central agrees not to contest the allegations in the Complaint that "Omega" fire sprinklers contain a "defect which creates a substantial product hazard," as those terms are defined in
Section 15(a) of the CPSA, 15 U.S.C. Section 2064(a). Central has agreed not to contest these allegations in order to avoid the expense, inconvenience and risks associated with further litigation, and the parties recognize that this resolution and this Consent Agreement may not be used or introduced as evidence of defect or hazard against Central in other litigation not involving the Commission or its staff. Entry of the Order will neither impair nor assist the bringing of any other action.

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

3

11. As part of the amounts referenced in 1.a and 1.b of Appendix C of the Order, Central shall deposit, without any adjudication or admission of fact or law, $1.3 million into the Trust established in Appendix C of the Order, in settlement of the staff's contention that Central failed to report to the Commission problems with the Omega pursuant to 15 U.S.C. Section 2064(b). Central has agreed to do so solely to avoid the inconvenience and burden of litigation of this issue.

12. Upon acceptance by the Consumer Product Safety Commission of this Consent Agreement, and entry of the Order, Central knowingly, voluntarily and completely waives and relinquishes any past, present and/or future right or rights in this matter: (1) to an administrative or judicial hearing and to all further procedural steps, including findings of fact, conclusions of law and/or further determination of whether Omega sprinklers contain a defect which creates a substantial product hazard within the meaning of Section 15 of the CPSA; (2) to seek judicial review or otherwise contest the validity of this Consent Agreement and/or Order as issued and entered, and (3) to seek judicial review of this or any past orders, findings and/or determinations of the Commission or the Presiding Officer in this matter, except as set forth in the provisions regarding review in Paragraph 28 of this Agreement.

13. Central agrees to fulfill all requirements of the Order.

14. Central agrees to immediately cease and desist manufacturing, selling, distributing, marketing, exporting, importing, and/or attempting to

distribute or sell any

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

4

Omega sprinkler, whether by itself or through its subsidiaries, affiliates, Central-owned distribution centers, or any other persons or entities over whom Central has control, whether in the United States or any other foreign state, country, or territory.

15. Central shall request that Underwriters Laboratories, Inc. withdraw its listing of approval for all Omega sprinklers.

16. Central shall provide the staff with thirty days written notice of any transfer of property rights it holds in the following U.S. Patents:
4,465,141; 4,491,182; 4,508,175; 4,553,602; 5,094,298; 4,619,327; 3,734,191; 3,902,510; 3,877,527, 3,911,940; 3,991,829, and 4,359,098.

17. A violation of this Consent Agreement or the Order is a prohibited act within the meaning of Section 19 of the CPSA, 15 U.S.C. Section 2068.

18. The Commission or Central may disclose terms of this Consent Agreement and Order to the public.

19. This Consent Agreement shall take effect upon its final acceptance by the Consumer Product Safety Commission.

20. This Consent Agreement and Order shall be binding upon the parties hereto and their successors, assigns, and receivers. If, prior to the termination of this Consent Agreement and Order, Central merges with any other corporation or sells, assigns, or otherwise transfers substantially all of its assets, Central shall provide reasonable prior notice to the surviving corporation or, in the case of an asset sale, assignment, or transfer, the

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

5

purchaser, transferee, or assignee of substantially all of Central's assets, of this Consent Agreement and Order, and of its binding effect upon said surviving corporation, purchaser, assignee, or transferee. The existence of this Consent Agreement and Order and their binding effect shall be noted in any agreement between Central and such surviving corporation, purchaser, transferee, or assignee. It shall be a condition of any such merger, sale, assignment, or transfer that the surviving corporation or, in the case of an asset sale, the purchaser, assignee, or transferee, execute a document agreeing to be bound by the provisions of this Consent Agreement and Order, and to submit to the jurisdiction of the Commission for purposes of enforcement of this Consent Agreement and Order. In the event of any merger or sale, transfer, or assignment of substantially all of Central's assets, notice shall be provided to the staff no later than 15 days prior to any such merger or asset sale, transfer, or assignment.

21. This Consent Agreement and Order have been negotiated by the parties. Central is not relying on the advice of the staff, nor anyone associated with the staff, as to legal, tax, or other consequences of any kind arising out of this Consent Agreement and Order, and Central specifically assumes the risk of all such legal, tax and other consequences.

22. For all purposes, this Consent Agreement and Order shall constitute an enforceable judgment obtained in an action or proceeding by a governmental unit to enforce its police or regulatory power. Central acknowledges and agrees that this Agreement and Order are pursuant to the Commission's police or

regulatory power to remedy the risk

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

6

created by and protect the public from a substantial product hazard which the Commission believes is presented by Omega sprinklers, and that the Agreement and Order are not subject to an automatic stay if Central becomes the subject of a bankruptcy proceeding.

23. If all of the Replacement Sprinklers are not listed or approved by Underwriters' Laboratories Inc. "UL") and all of the exclusively non-residential Replacement Sprinklers are not listed or approved by Factory Mutual Research Corporation ("FMRC") by November 1, 1998, or if the listing or approval of any of the Replacement Sprinklers by UL or FMRC is withdrawn, discontinued or modified at any time, for any reason whatsoever, the Commission, at its sole discretion and upon reasonable notice to Central, may void, suspend, or rescind all or any part of this Consent Agreement and Order.

24. The Commission, at its sole discretion and upon reasonable notice to Central, may void, suspend, or rescind all or any part of this Consent Agreement and Order if Central has made material misrepresentations regarding its current financial condition, manufacturing and shipping costs for Replacement Sprinklers and Replacement Parts, the number of Omega sprinklers remaining to be remediated (approximately 8.4 million), and/or the projected costs of administering the recall and replacement program in this Agreement and Order, and the staff has relied on those misrepresentations in entering into this Agreement. Appendix D of the Order lists those documents containing representations deemed material by the parties.

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

7

25. Beginning 3 months after the effective date of the Commission's Order, and for every 3 months thereafter until the expiration or final determination of the Claims as defined in Paragraph 1.c of Appendix C of the Order, Central shall provide to the staff a full report on the progress and status of the Claims as defined in Paragraph 1.c of Appendix C of the Order, and the progress and status of the remediation program set forth in this Agreement and Order, including but not limited to the payments made to the Trust as defined in Appendix C of the Order, and the expenses paid and/or incurred for notice and administration of the remediation program set forth in this Agreement and Order. Central shall provide, with these reports, the daily timesheets, with descriptions of all work performed, of each Central employee involved in administration of the remediation program, for the time period since the last report date. At any time, upon reasonable written notice, the Commission may require Central to submit to an independent or Commission review and/or audit of the remediation program set forth in this Consent Agreement and Order, and/or any Claims as defined in Paragraph 1.c of Appendix C. Central shall provide the staff with a copy of every audit report of its financial condition within 5 business days of the date the report is prepared.

26. If, after the effective date hereof, any provision of this Consent Agreement and Order is held to be illegal, invalid, or unenforceable under present or future laws effective during the terms of this Consent Agreement and Order, such provision shall be fully severable. The rest of the Agreement and Order shall remain in full effect, unless the

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

8

Commission determines that severing the provision materially impacts the rernediation program set forth in this Agreement and Order.

27. Central acknowledges that this Consent Agreement and Order have been negotiated between unrelated, sophisticated and knowledgeable parties acting in their own self-interest and represented by counsel, and the provisions of this Consent Agreement and Order shall not be interpreted or construed against any person or entity because that person or entity or any of its attorneys or representatives drafted or participated in drafting this Consent Agreement.

28. The provisions of this Consent Agreement and Order shall be interpreted in a reasonable manner to effect its purpose to remedy the alleged hazard that Omegas pose. In the event of a dispute between the parties arising under this Consent Agreement and Order, the parties agree to submit the issue for determination by the Commission. Except as stated to the contrary in Paragraphs 7 through 10 of Appendix C of the Order, Central shall have the right to seek judicial review of the Commission decision, such review to be based upon the record of any such Commission proceeding and according to law.

29. The existence of a dispute shall not excuse, toll, or suspend any obligation or deadline imposed upon Central under this Consent Agreement and Order.

30. This Consent Agreement and Order shall not be waived, changed, amended, modified, or otherwise altered, except in writing executed by the party

or parties against

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

9

whom such amendment, modification, alteration, or waiver is sought to be enforced, and approved by the Commission.

Dated: October 1, 1998
       -------------------------

/s/ Eric H. Singer, Esq.                    /s/ J. Gordon Cooney, Jr., Esq.
----------------------------------------    ------------------------------------
Deborah S. Orlove, Esq.                     J. Gordon Cooney, Jr., Esq.
Eric H. Singer, Esq.                        Emily J. Lawrence, Esq.
Howard N. Tarnoff, Esq.                     MORGAN, LEWIS & BOCKIUS LLP
Complaint Counsel                           2000 One Logan Square
U.S. Consumer Product Safety Commission     Philladelphia, PA  19103
Office of Compliance                        (215) 963-5000
4330 East West Highway
Bethesda, MD 20814
(301) 504-0626

Of Counsel                                  Michael F. Healy. Esq.
Eric L. Stone                               MORGAN, LEWIS & BOCKIUS LLP
Director, Legal Division                    1800 M Street, NW
Alan H. Schoem                              Washington, DC 20036-5869
Assistant Executive Director                (202) 467-7000
Office of Compliance

                                            John C. Fenningham, Esq.
Complaint Counsel                           CORR, STEVENS & FENNINGHAM
                                            Five Neshaminy Interplex, Suite 315
                                            Trevose, PA 19053
                                            (215) 639-4070

                                            Counsel for Respondents

                                            /s/ E. Talbot Briddell
                                            ------------------------------------
                                            E. Talbot Briddell
                                            CEO, Central Sprinkler Corp. and
                                            Central Sprinkler Co.

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

10

Exhibit 10(ab)

UNITED STATES OF AMERICA
CONSUMER PRODUCT SAFETY COMMISSION


In the Matter of

CENTRAL SPRINKLER CORP.,

and CPSC DOCKET NO. 98-2

CENTRAL SPRINKLER CO.,

Respondents

UPON CONSIDERATION of the Administrative Complaint against Respondents Central Sprinkler Corp. and Central Sprinkler Co. (collectively, "Central") issued on or about March 3, 1998, and the Consent Agreement between the parties;

UPON CONSIDERATION of Central's concession that "Omega" fire sprinklers are "consumer products" under the CPSA, 15 U.S.C. ss. 2052;

UPON CONSIDERATION of Central's decision not to contest the allegations in the Complaint that "Omega" fire sprinklers contain a defect which creates a "substantial product hazard," and

Pursuant to Sections 15(c) and (d) of the CPSA, 15 U.S.C. ss. 2064(c)
and (d), IT IS HEREBY ORDERED THAT:

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.


1. The Consent Agreement between Central Sprinkler Corp. and Central Sprinkler Co. (collectively, "Central") and the Commission staff is accepted and incorporated by reference herein, and Central shall comply with all of its obligations thereunder.

2. All allegations of the Administrative Complaint are resolved by this Consent Agreement and Order. Based on the Consent Agreement, including Central's admissions and agreement not to contest certain allegations of the Administrative Complaint for settlement purposes, the Commission finds that the Consent Agreement and this Order are necessary to protect the public from the hazard the Commission believes is presented by Omega sprinklers.

3. To remedy the alleged substantial product hazard created by Omega sprinklers, Central shall remove from service and replace all Omega sprinklers with replacement glass bulb sprinklers containing a Belleville Washer-Type Seal ("Replacement Sprinklers"), pursuant to, and in accordance with, the terms of Paragraphs 4 through 21 below and all of its obligations under the Consent Agreement incorporated by reference herein.

4. Central shall immediately cease and desist Manufacturing, selling, distributing, marketing, exporting, importing, and/or attempting to distribute or sell any Omega sprinkler, whether by itself or through its subsidiaries, affiliates, Central-owned distribution centers, or any other persons or entities over whom Central has control, whether in the United States or any other foreign state, country, or territory.

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

2

5. Central shall provide notice to the public, its customers, and Omega owners, of the alleged hazard posed by Omega sprinklers, and the remedy to which Omega owners are entitled, which notice shall include the elements set forth in Appendix A of this Order. All notices, including all script(s) for operators of the toll-free numbers set forth in Appendix A, must be approved by the Commission staff prior to dissemination.

6. Central shall provide Replacement Sprinklers to all owners of Omega sprinklers, at no cost to the Omega owners, according to the provisions set forth in Appendix C of this Order. A listing of the Replacement Sprinkler(s) for each Omega is set forth in Appendix B of this Order.

7. Central shall provide replacement escutcheons, extensions, and any and all other fittings, fixtures and/or appurtenances necessary for proper replacement of Omegas with the Replacement Sprinklers ("Replacement Parts") at no cost to the Omega owners.

8. Beginning in November, 1998, and for 48 months thereafter, Central shall make best efforts to manufacture and distribute to Omega owners at least 100,000 Replacement Sprinklers, and the accompanying Replacement Parts, per month for as long as the demand for Replacement Sprinklers equals or exceeds 100,000 per month.

9. It Central receives requests for Replacement Sprinklers and Replacement Parts at a rate that exceeds its monthly capacity to manufacture and ship the Replacement Sprinklers and Replacement Parts, Central shall devise a plan for sprinkler and parts distribution to ensure priority replacement of sprinklers in buildings where members of the public are

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

3

particularly vulnerable. Central's plan for sprinkler distribution shall be submitted to the Commission staff for approval prior to implementation. In the event the staff disagrees with Central's plan for sprinkler distribution, Central shall implement the plan as amended or devised by the staff.

10. In addition to providing Replacement Sprinklers and Replacement Parts as stated in Paragraphs 6 through 9 herein, Central shall pay, into a Trust for the benefit of Omega owners, a monetary contribution toward the labor costs of replacing their Omega sprinklers in accordance with the procedures set forth in Appendix C of this Order. The monetary contribution is for the purpose of assisting Omega owners in paying the costs associated with removing and replacing their existing Omegas, and thus encouraging Omega owners to participate in the remediation program provided herein, in order to remedy the hazard the Commission believes is presented by the Omegas, and protect the public health and safety.

11. In order to obtain Replacement Sprinklers and Replacement Parts, and the monetary contribution provided for in Paragraph 10 herein, Omega owners must follow the procedures required by Appendix C of this Order.

12. Recognizing that suitable Replacement Sprinklers are not currently available for all Omega sprinkler models, Central shall pay $5.00 per Omega sprinkler to any owner of Omega sprinklers who does not want or cannot use Central's Replacement Sprinklers, provided such owner gives Central reasonable proof of removal and replacement of Omegas. Central shall also pay to all such Omega owners a monetary contribution toward the costs of

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

4

removing and replacing their Omega sprinklers in accordance with the procedures set forth in Appendix C of this Order. This payment is for the purpose of assisting Omega owners in paying the costs associated with removing and replacing their existing Omegas, and thus encouraging Omega owners to remove and replace their existing Omega sprinklers, in order to remedy the hazard the Commission believes is presented by the Omegas, and protect the public health and safety.

13. For those Omega owners who, after May 1, 1996, but prior to the effective date of this Order, 1) already replaced or contracted to replace their Omegas with non-Omega sprinklers and 2) who received in value from Central less than what they would have received under Paragraph 12 of this Order, Central shall pay such owners the difference between what they have already paid and the amount they would have paid under Paragraph 12 of this Order. This payment shall be made for the purpose of encouraging owners of products that present or may present a substantial product hazard to take immediate action to remove and, where appropriate, replace that product. This payment assists in the fulfillment of the Commission's mandate to protect the public health and safety from the risks associated with products that present a substantial product hazard.

14. If Central fails to make timely contributions to the Trust as required by Appendix C hereto, Central shall be liable for additional contributions to the Trust, separate from any penalty it may incur pursuant to Paragraph 17 of the Consent Agreement. Such additional contribution(s) shall include the following:

Accepted and Approved:                         Accepted and Approved:



---------------------------------              --------------------------------
CPSC Office of Compliance                      Respondents Central Sprinkler Co.
                                                  and Central Sprinkler Corp.

5

a. Interest at the percentage rate established by the Department of the Treasury pursuant to 31 U.S.C. Section 3717, for any period after the due date;

b. A handling charge of $10,000 at the end of each 30 day late period; and

c. A 7% (seven percent) per annum penalty charge if the deposit is not made within 30 days of the due date.

These additional contributions are intended to encourage Respondents to fulfill their obligations to remedy the hazard the Commission believes is presented by Omega sprinklers, and protect the public health and safety.

15. Central shall devise procedures to ensure the destruction of the Omega sprinklers. Central shall destroy all finished goods inventory and returned Omegas, from whatever source, and will not use any component parts of any returned or finished goods Omega for the manufacture or sale of any other product. Central must provide to the staff a monthly accounting of all returned and destroyed sprinklers for the first three months after the effective date of this Order, and a quarterly accounting of al