Equipment Lease

EQUIPMENT LEASE


Among


TEXTRON AUTOMOTIVE EXTERIORS INC.


and


TEXTRON AUTOMOTIVE INTERIORS INC.


collectively as the


Lessee


and


IAC TAX V, LLC


Lessor


Dated: As of December 18, 2001
TABLE OF CONTENTS


PAGE
---- 1. TERM................................................................ 1


2. AUTHORIZATION AND CONDITIONS........................................ 1


3. DELIVERY; INSPECTION AND ACCEPTANCE BY LESSEE....................... 3


4. RENT................................................................ 4


5. REPRESENTATIONS AND WARRANTIES...................................... 5


6. COVENANTS........................................................... 9


7. USE AND MAINTENANCE................................................. 13


8. DISCLAIMER OF WARRANTIES............................................ 16


9. GENERAL TAX INDEMNITY............................................... 17


10. LIENS............................................................... 24


11. INSURANCE........................................................... 24


12. LOSS AND DAMAGE..................................................... 28


13. REDELIVERY.......................................................... 30


14. INDEMNITY........................................................... 33


15. DEFAULT; REMEDIES................................................... 37


16. ASSIGNMENT BY LESSOR AND LESSEE..................................... 40


17. CHATTEL PAPER....................................................... 41


18. RENEWAL............................................................. 42


19. PURCHASE OPTIONS.................................................... 42


20. REMARKETING......................................................... 43


21. INSPECTION.......................................................... 44


-i- 22. QUIET ENJOYMENT..................................................... 45


23. TRANSACTION COSTS................................................... 45


24. PAYMENTS DURING DEFAULT............................................. 45


25. WAIVER OF JURY TRIAL................................................ 46


26. CHOICE OF LAW; JURISDICTION......................................... 46


27. SEVERANCE........................................................... 47


28. LESSOR LEVERAGE; GRANT PARTICIPATIONS OR DISCOUNT OF CASH FLOW...... 47


29. OWNERSHIP........................................................... 49


30. MISCELLANEOUS....................................................... 52


Exhibits - --------


Exhibit A - Equipment Schedule
Annex A - Basic Rent
Annex B - Fixed Rate Renewal Rent
Annex C - Purchase Option Dates and Amounts
Annex D - Termination Values


Exhibit B - Definitions


Exhibit C - Form of Lessor Transfer Agreement


Exhibit D - Form of Lessee's Counsels Opinions Exhibit D-1 - Counsel Exhibit D-2 - Counsel


Exhibit E - Form of Lessor's Counsels Opinions Exhibit E-1 - Special Counsel Exhibit E-2 - In-House Counsel


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EQUIPMENT LEASE AGREEMENT


THIS EQUIPMENT LEASE AGREEMENT is made as of the 18th day of December, 2001, by and among IAC TAX V, LLC, a Delaware limited liability company ("Lessor"), and TEXTRON AUTOMOTIVE EXTERIORS INC., a Delaware corporation ("Exteriors"), TEXTRON AUTOMOTIVE INTERIORS INC., a Delaware corporation ("Interiors", Exteriors and Interiors being referred to herein jointly, severally and collectively as the "Lessee"). Unless otherwise defined herein, capitalized terms shall have the meaning assigned to such term in Exhibit B hereto.


1. TERM. The Term of this Lease with respect to the Equipment shall
consist of the Basic Term together with any Renewal Term entered into
in accordance with Section 18 hereof.


2. AUTHORIZATION AND CONDITIONS.


(a) The Lessor's obligation to lease the Equipment to Lessee hereunder shall be conditioned upon and subject to the receipt by Lessor on or prior to the Closing Date of the following, in form and substance satisfactory to Lessor:


(i) insurance complying with the provisions of Section 11 hereof
shall be in full force and effect and Lessor shall have received
certificates of insurance together with a letter signed by Lessee's
insurer or authorized insurance broker that such insurance complies with
the requirements of Section 11;


(ii) Uniform Commercial Code financing statements duly executed by
Lessee, if necessary, and Mortgages as are reasonably required by Lessor,
together with any other filings, recordings or notices which are required
or reasonably requested by Lessor in connection with the consummation of
the transactions contemplated in the Operative Documents;


(iii) a certificate of Lessee's Secretary or Assistant Secretary
dated the Closing Date attaching and certifying:


(A) resolutions of Lessee's Board of Directors duly authorizing the leasing of the Equipment hereunder and the execution, delivery and performance of this Lease and all other Operative Documents to which Lessee is a party;


(B) the incumbency and signature of the officers of Lessee authorized to execute such documents;


(C) Lessee's certificate of incorporation, certified as of a recent date by the Secretary of State of its jurisdiction of incorporation; and (D) Lessee's by-laws;


(iv) a certificate of a Responsible Officer of Lessee dated the
Closing Date certifying on behalf of Lessee that (A) the representations
and warranties of Lessee contained in Section 5(a) hereof and in any other
Operative Document to which Lessee is a party are true and correct on and
as of the Closing Date as though made on and as of such date (except to
the extent that such representations and warranties expressly relate to a
specified earlier date, in which case such representations and warranties
were true and correct as of such earlier date) and (B) no Default has
occurred and is continuing;


(v) an opinion of counsel for the Lessee substantially in the form
set forth on Exhibit D-1 hereto;


(vi) the execution and delivery of this Lease together with the
other Operative Documents as Lessee is required to execute and deliver as
of the Closing Date;


(vii) on or prior to the Closing Date, Lessor shall have received an
Appraisal from the Appraiser with respect to the Equipment in form and
substance satisfactory to Lessor;


(viii) good standing certificate issued by the Secretary of State of
the jurisdiction of incorporation of Lessee as to the good standing of
each thereof in such jurisdiction and, with respect to Lessee, from the
Secretary of State of each State in which the Equipment is located as of
the Closing Date as to the due qualification and good standing of Lessee
as a foreign corporation authorized to do business in such State;


(ix) the closing of the transactions under the Other Lease shall
have occurred simultaneously with the closing of the transactions
contemplated herein;


(x) all taxes, fees and other charges payable in connection with the
execution, delivery, recordation and filing of all documents shall have
been paid in full or provided for, and Lessor and Lessee shall have
received evidence reasonably satisfactory to them demonstrating payment in
full (or exemption therefrom) of all such sales or transfer taxes;


(xi) all such other documents, instruments and other actions as
Lessor may reasonably request in connection with the consummation of the
transactions contemplated herein and consistent with the terms hereof
shall be complete and reasonably satisfactory to the Lessor; and


(xii) Mortgagee title insurance for the Mortgages.


-2- (b) Lessee's obligations to lease the Equipment from Lessor under this Lease shall be conditioned upon and subject to the receipt by Lessee on or prior to the Closing Date of the following in form and substance reasonably satisfactory to Lessee:


(i) a certificate of a Responsible Officer of Lessor dated the
Closing Date certifying on behalf of Lessor that to the knowledge of such
officer the representations and warranties of Lessor in Section 5(b)
hereof are true and correct on and as of the Closing Date as though made
on and as of such date (except to the extent that such representations and
warranties expressly relate to a specified earlier date, in which case
such representations and warranties were true and correct as of such
earlier date);


(ii) a certificate of Lessor's Secretary or Assistant Secretary
dated the Closing Date certifying:


(A) resolutions of Lessor's Members duly authorizing the execution, delivery and performance of the Operative Documents by Lessor;


(B) the incumbency and signature of the officers of Lessor authorized to execute such documents;


(C) Lessor's limited liability company agreement;


(D) a good standing certificate as of a recent date issued by the Secretary of State of Lessor's jurisdiction of organization;


(iii) an opinion of special counsel for Lessor substantially in the
form set forth as Exhibit E-1 hereto and in-house counsel for Lessor
substantially in the form set forth as Exhibit E-2 hereto;


(iv) execution and delivery of each Operative Document which Lessor
is required to execute and deliver as of such Closing Date;


(v) all such other documents, instruments and other actions as
Lessee may reasonably request in connection with the consummation of the
transactions contemplated herein and consistent with the terms hereof
shall be complete and reasonably satisfactory to Lessee; and


(vi) the closing of the transactions contemplated in the Other Lease
shall have been consummated prior to or simultaneously with the
transactions contemplated herein.


3. DELIVERY; INSPECTION AND ACCEPTANCE BY LESSEE. Subject to the terms
and conditions hereof, Lessor and Lessee hereby agree as of the
Closing Date to deliver and lease the Equipment specified hereto on
Exhibit A (also, the "Equipment Schedule"); whereupon, as between
Lessor and Lessee, such


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Equipment shall be deemed to have been delivered by Lessor, accepted
by Lessee and subject to this Lease.


4. RENT.


(a) Basic Rent. On each Rent Payment Date during the Basic Term, Lessee shall pay to Lessor Basic Rent monthly in arrears in the amount specified on Annex A to the Equipment Schedule for such Rent Payment Date for the Equipment then subject to this Lease.


(b) Supplemental Rent. Lessee shall pay to Lessor, or to whomever shall be entitled thereto as expressly provided herein or in any other Operative Document, any and all Supplemental Rent promptly as the same shall become due and payable. In the event of any failure on the part of Lessee to pay any Supplemental Rent, Lessor shall have the same rights, powers and remedies provided herein or by law or equity in the case of nonpayment of Basic Rent (except for the difference in grace periods provided in Section 15 hereof).


(c) Method of Payment. Rent due and owing from Lessee to Lessor under or in connection with this Lease is payable as and when specified herein or any other Operative Document by wire transfer of immediately available funds in U.S. Dollars no later than 12:00 noon, New York time, at the place of receipt, on the day such payment is due hereunder, to Lessor's Account No. 10-42209 at ABA No. 071-000-013, or to such other account as Lessor may specify in writing from time to time at least five (5) Business Days prior to the date of such payment. If the date on which any payment of Rent is due hereunder is not a Business Day, such payment shall be made as aforesaid on the next succeeding Business Day, with the same force and effect as if made on the scheduled due date provided for in this Lease. If any payment of Rent is not paid on the date due, Lessor (or in the case of Supplemental Rent, to whoever shall be entitled thereto) may collect, and Lessee agrees to pay, interest on such overdue amounts at a rate of interest equal to the Late Charge Rate for the period such amount remains unpaid.


(d) Other Lease. Lessee acknowledges and agrees that the transactions contemplated herein and the Other Lease are two integral parts of an integrated financing transaction and it is a condition to the execution and delivery of the Lease that the Other Lease be simultaneously executed and delivered, for good and valuable consideration, the receipt of which is hereby acknowledged. Lessee hereby unconditionally and irrevocably agrees to pay, as primary obligor and not as surety, as Supplemental Rent hereunder, all amounts due and payable under the Other Lease.


(e) Net Lease; No Setoff; etc. This Lease is a net lease and, notwithstanding any other provision of this Lease, it is intended that Lessee's obligation to pay Basic Rent and Supplemental Rent hereunder shall be absolute and unconditional and shall not be affected by any circumstance whatsoever and shall be paid without notice, demand, counterclaim, setoff, deduction or defense and without abatement, suspension, deferment, diminution or reduction. The obligations and liabilities of Lessee hereunder shall in no way be released, discharged or


-4- otherwise affected (except as may be expressly provided herein) for any reason, including, without limitation: (i) any defect in the condition, quality or fitness for use of the Equipment or any part thereof; (ii) any damage to, removal, abandonment, salvage, loss, scrapping or destruction of or any requisition or taking of the Equipment or any part thereof; (iii) any restriction, prevention or curtailment of or interference with any use of the Equipment or any part thereof; (iv) any defect in title to or any Lien on such title; (v) any change, waiver, extension, indulgence or other action or omission in respect to any obligation or liability of Lessor or Investor; (vi) any bankruptcy, insolvency, reorganization, composition, adjustment, dissolution, liquidation or other like proceeding relating to Lessee, Lessor, or any other Person, or any action taken with respect to this Lease by any trustee or receiver of Lessee, Lessor, or any other Person, or by any court, in any such proceeding; (vii) any claim that Lessee has or might have against any Person, including, without limitation, Lessor; (viii) any failure on the part of Lessor to perform or comply with any of the terms hereof or of any other agreement; (ix) any invalidity or unenforceability or disaffirmance of this Lease against or by Lessee or any provision hereof or any of the other Operative Documents or any provision of any thereof; or (x) any other occurrence, event or circumstance whatsoever, whether similar or dissimilar to the foregoing, whether or not Lessee shall have notice or knowledge of any of the foregoing. This Lease shall be noncancelable by Lessee and, except as expressly provided herein, Lessee, to the extent permitted by law, waives all rights now or hereafter conferred by statute or otherwise to quit, terminate or surrender this Lease, or to any diminution or reduction of Rent payable by Lessee hereunder. If for any reason whatsoever this Lease shall be terminated in whole or in part by operation of law or otherwise, except as expressly provided herein, Lessee shall nonetheless pay to Lessor an amount equal to each Rent payment at the time and in the manner that such payment would have become due and payable under the terms of this Lease if it had not been terminated in whole or in part.


5. REPRESENTATIONS AND WARRANTIES.


(a) Each of Exteriors and Interiors, jointly and severally represents and warrants as to itself as Lessee that, as of the date hereof:


(i) Corporate Power. Lessee is a corporation duly organized and
validly existing in good standing under the laws of the state of Delaware
and each of Interiors and Exteriors is in good standing and qualified as a
foreign corporation in each State where the Equipment operated by it is
located and in such jurisdictions where its ownership or lease of property
or the conduct of its business requires it to be so qualified except where
the failure to so qualify would not have a material adverse effect on the
business, operations or financial condition of Lessee and Lessee has the
power and authority to enter into and perform its obligations under the
Operative Documents to which it is a party.


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(ii) Execution, Delivery, etc. The execution, delivery and
performance of this Lease and the other Operative Documents to which
Lessee is a party: (A) have been duly authorized by all necessary
corporate action on the part of Lessee; (B) do not require the approval of
any stockholder, trustee or holder of any obligations of Lessee except
such as have been duly obtained and are in full force and effect; and (C)
do not contravene any Applicable Laws now binding on Lessee, or the
articles of incorporation or by-laws of Lessee, or contravene the
provisions of, or constitute a default under, or result in the creation of
any lien or encumbrance upon the property of Lessee under (other than with
respect to the transactions contemplated herein), any indenture, mortgage,
contract or other agreement to which Lessee is a party or by which it or
its property is bound.


(iii) Binding Obligations. This Lease and the other Operative
Documents to which Lessee is a party, when entered into, will constitute
legal, valid and binding obligations of Lessee enforceable against Lessee
in accordance with the terms thereof, except as limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors' rights generally.


(iv) Litigation. There are no pending or, to the knowledge of
Lessee, threatened actions or proceedings before any court, arbitrator or
administrative agency, which (x) concern the Equipment or Lessee's
interest therein or any of the transactions contemplated by the Operative
Documents or (y) either individually or in the aggregate, could reasonably
be expected to materially and adversely affect the financial condition of
Lessee, or the ability of Lessee to perform its obligations hereunder.


(v) Disclosure. No document prepared by Lessee and furnished by
Lessee or any of its Affiliates to Lessor in connection with the
transactions contemplated hereby contains or will contain any untrue
statement of a material fact or omits or will omit a material fact
necessary to make the statements contained therein not misleading, under
the circumstances under which any such statement shall have been made.


(vi) Name and Address. The full and correct legal name, type of
organization and jurisdiction of organization of Lessee are correctly set
forth in the paragraph describing the parties on page 1 of this Lease and
the address stated below the signature block of Lessee is the chief place
of business and chief executive office of Lessee; and Lessee does not
conduct business in a corporate name at any location where the Equipment
will be located under any other name.


(vii) Liens. The Equipment is free of all liens, claims and
encumbrances attributable to Lessee other than Permitted Liens, no
effective financing statement or other form of lien notice covering all or
any part of the Equipment authorized or signed by Lessee is on file in any
recording office except those in favor of Lessor.


-6-
(viii) Filings. Other than the filing of UCC-1 financing statements
listing Lessee as the lessee/debtor in Delaware, no further action,
including the filing or recording of any document, is required to perfect
Lessor's security interest in and to the Equipment.


(ix) ERISA. Assuming the truth and accuracy of the representations
and warranties of Lessor set forth in Section 5(b)(vi) hereof, the
execution and delivery of this Lease and the Operative Documents and the
consummation of the transactions contemplated hereby and thereby will not
involve any prohibited transaction under Section 406 or 407 of ERISA or
Section 4975 of the Code.


(x) Financial Advisor. Lessee has not retained any broker, finder
or financial advisor in connection with the transactions contemplated by
the Operative Documents.


(xi) Investment Company Act. Lessee is not an "investment company"
or an "affiliated person" of an "investment company" within the meaning of
the Investment Company Act of 1940.


(xii) Environmental, Etc. To the best of Lessee's knowledge, (i) the
Equipment and Lessee's intended use of the Equipment will comply in all
material respects with applicable Environmental Laws and the requirements
of any permits issued under such Environmental Laws; (ii) there are no
circumstances that may prevent or interfere with Lessee's ability to
operate and maintain the Equipment as contemplated by the Operative
Documents in compliance in all material respects with applicable
Environmental Laws; and (iii) there are no present circumstances,
conditions, events or incidents, including the release, emission,
discharge, presence or disposal of Hazardous Materials, that could (A)
form the basis of an Environmental Claim against Lessee that individually
or in the aggregate could materially and adversely affect the financial
condition of Lessee or the ability of Lessee to perform its obligations
hereunder, (B) cause the Equipment to be subject to any Liens or
restrictions on its ownership, occupancy, use or transferability under
applicable Environmental Laws, or (C) interfere with the continued
operation and maintenance of the Equipment in any material respects.


(xiii) No Consent Required. No order, license, consent, permit,
authorization or approval of, or exemption by, or the giving of notice to,
or the registration with or the taking of any other action in respect of
any Governmental Authority or any other Person, and no filing, recording,
publication or registration in any public office or any other place, is
now, or under existing Applicable Laws, in the future will be, required or
necessary on Lessee's behalf to authorize the execution, delivery and
performance of the Operative Documents to which it is a party, or for the
legality, validity, binding effect or enforceability thereof or for the
operation of the Equipment.


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(xiv) No Default, Etc. No condition exists that constitutes, or
with the giving of notice or lapse of time or both would constitute, a
Default or a Total Loss.


(xv) Compliance with Applicable Laws. The Equipment and Lessee's use
of the Equipment comply with all Applicable Laws, and no notices,
complaints or orders of violation or noncompliance of any nature
whatsoever have been issued, or to Lessee's knowledge, threatened or
contemplated by any Governmental Authority with respect to the Equipment
or any part thereof other than in each case routine, minor or immaterial
matters, none of which could reasonably be expected, individually or in
the aggregate, to have a material adverse effect on the financial
condition of Lessee or the ability of Lessee to perform its obligations
hereunder or impose a material penalty on, or result in the imposition of
any criminal liability on, any Indemnitee. Lessee is in compliance with
all Applicable Laws to which it is subject, the failure to comply with
which could, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the financial condition of Lessee or the
ability of Lessee to perform its obligations hereunder, and has obtained
all licenses, permits, franchises and other governmental authorizations
material to the conduct of its business and the maintenance, operation and
ownership of the Equipment.


(xvi) Taxes. Lessee has filed or caused to be filed all material
federal, state and local tax returns that are required to be filed by it
and has paid or caused to be paid all Taxes shown to be due and payable on
such returns or on any assessment received by it to the extent that such
Taxes have become due and payable, except to the extent the same are being
contested in good faith by appropriate proceedings. To the extent, if any,
that such Taxes are not due and payable or are being contested in good
faith by appropriate proceedings by it, it has established reserves (to
the extent required by GAAP) that are reasonably adequate for the payment
or settlement thereof.


(xvii) Use and Operation of Equipment. All agreements, easements
and other rights, public or private (including, without limitation, all
Applicable Laws), which are necessary to permit the lawful use and
operation of the Equipment by Lessee pursuant to this Lease are in full
force and effect and Lessee has not received notice of any pending
modification or cancellation of any of the same.


(xviii) Offering. Lessee has not offered, and neither it nor any
authorized person acting on its behalf will hereafter offer, any interest ...