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<br />16. Indemnity Lessee shall indemnify and save Lessor harmless from and against any and all
<br />liabilities, obligations, losses, damages, claims, demands, penalties, costs and expenses, including
<br />reasonable attorneys' fees and expenses, of whatever kind and nature, arising from or related to the use,
<br />condition, operation, ownership, delivery, leasing, sale or return of the Equipment.
<br />17. Assignment or Sublease; Binding Effect Without Lessor's prior written consent, Lessee shall not
<br />assign, transfer, pledge, or otherwise dispose of the Equipment, this Lease or any interest therein. Lessor
<br />may at any time without notice to Lessee assign, sell or encumber the Equipment, and/or any of its rights
<br />under this Lease. This Lease shall inure to the benefit of and be binding upon Lessor and Lessee and their
<br />respective heirs, legatees, personal representatives, successors and assigns.
<br />18. Default Lessee shall be in default under this Lease upon the happening of any one of the following
<br />"Events of Default ": (i) Lessee's failure to make any payment of rent within ten (10) days after the due date
<br />thereof, (ii) the institution by or against Lessee of proceedings under any bankruptcy, insolvency,
<br />reorganization or similar legislation; (iii) the making of any false or misleading statement, oral or written, by
<br />or on behalf of Lessee, or the omission by or on behalf of Lessee to state a material fact with respect to this
<br />Lease; or (iv) any other breach or failure of Lessee to observe or perform any of its obligations under this
<br />Lease provided that Lessor has given Lessee written notice of such breach or failure and Lessee has failed to
<br />cure such breach or failure within thirty (30) days of such notice. Default of any provision of this lease also
<br />shall be considered default on the Performance Agreement contemporaneously entered into by the parties,
<br />including Frontier's representation that it will continue to operate its North Carolina facilities during the
<br />term of the Performance Agreement.
<br />19. Remedies on Default Upon the occurrence of any Event of Default, Lessor may exercise any and
<br />all rights and remedies available to it at law or in equity, including without limitation, the cumulative rights
<br />to (i) declare Lessee to be in default as to any or all leases and other agreements between the parties; (ii) sue
<br />at law or in equity to enforce performance of the same or to recover damages for the breach thereof and for
<br />the loss of its bargain; (iii) terminate this Lease in whole or in part; (iv) declare immediately due and
<br />payable the entire amount of unpaid rent for the remaining lease term; (v) take possession of and remove the
<br />Equipment (such action not to constitute a termination of the Lease) without any court order or other process
<br />of law and without liability for entering Lessee's premises; and (vi) without notice or demand, appropriate
<br />and apply against any sums due hereunder any and all suns of money or property held by Lessor for Lessee,
<br />including, without limitation, any security deposit held by Lessor. No express or implied waiver by Lessor
<br />of any Event of Default hereunder shall in any way be, or be construed to be, a waiver of any future or
<br />subsequent Event of Default.
<br />20. Notices Any notices, requests, demands and other communications between the parties shall be in
<br />writing and shall be deemed to have been delivered when delivered personally or mailed by certified or
<br />registered mail, postage prepaid, return receipt requested to the address set forth below or to such other
<br />address as a parry may provide in writing to the other.
<br />LESSOR: Lee County
<br />106 Hillcrest Street
<br />Sanford, NC 27330
<br />Attention: John Crompton, Manager
<br />LESSEE: Frontier Spinning Mills, Inc.
<br />1823 Boone Trail Road
<br />Sanford, NC 27330
<br />Attention: Chief Financial Officer
<br />TRI1 \749961vs 3
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