LEASE AGREEMENT
Dated Xxxxx 0, 0000
Xx and between
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF XXXXXXXX
and
QUALITY HOUSING SUPPLY, LLC
The interest of The Industrial Development Board of the City of
Xxxxxxxx in any rents, revenues and receipts derived by it under this Lease
Agreement has been assigned to First Commercial Bank, as Trustee under the Trust
Indenture dated March 1, 2001.
This Lease Agreement was prepared by Xxxxxxx X. Xxxxx of Walston, Wells,
Xxxxxxxx & Bains, LLP, Financial Center, 000 00xx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxxx, Xxxxxxx 00000
LEASE AGREEMENT
TABLE OF CONTENTS
RECITALS 1
ARTICLE 1Definitions 2
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ARTICLE 2Representations 6
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SECTION 2.01 Representations by the Issuer 6
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SECTION 2.02 Representations by the User 6
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ARTICLE 3Demising Clauses 8
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ARTICLE 4Acquisition of the Project 9
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SECTION 4.01 Application of Proceeds of Bonds. 9
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SECTION 4.02 Agreement to Acquire Project 9
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SECTION 4.03 No Warranty of Suitability of Issuer 10
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SECTION 4.04 Pursuit of Remedies Against Vendors, Contractors and
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Subcontractors and Their Sureties 10
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SECTION 4.05 Completion of the Project 10
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ARTICLE 5Duration of Lease Termand Rental Provisions 11
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SECTION 5.01 Duration of Term 11
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SECTION 5.02 User Bond Payments; Draws Under Letter of Credit 11
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SECTION 5.03 Administrative Expense Payments 12
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SECTION 5.04 Advances by Issuer or Trustee 12
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SECTION 5.05 Indemnity of Issuer, Trustee and Credit Obligor 13
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SECTION 5.06 Obligations of User Unconditional 14
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SECTION 5.07 This Lease a Net Lease 14
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ARTICLE 6Maintenance, Alterations, Replacements, Taxes and Insurance 15
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SECTION 6.01 Maintenance and Repairs, Alterations and Improvements,
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Party Walls; and Liens; Utility Charges 15
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SECTION 6.02 Removal of, Substitution and Replacement for Equipment 16
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SECTION 6.03 Installation of Machinery and Equipment Owned or Leased
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by the User or Subject to a Security Interest in Third Parties
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16
SECTION 6.04 Insurance 17
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ARTICLE 7Provisions Respecting Damage, Destruction and Condemnation 18
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SECTION 7.01 Damage and Destruction 18
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SECTION 7.02 Condemnation 20
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ARTICLE 8Certain Provisions Relating to Assignment, Subleasing, Mortgaging and
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the Bonds 21
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SECTION 8.01 Provisions Relating to Assignment and Subleasing 21
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SECTION 8.02 Assignment of Lease Agreement and Rents by the Issuer 22
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SECTION 8.03 Transfer or Encumbrance Created by Issuer; Corporate
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Existence of Issuer 22
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SECTION 8.04 Redemption of Bonds 22
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ARTICLE 9Covenants of the User 23
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ARTICLE 10Events of Default and Remedies 24
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SECTION 10.01 Events of Default 24
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SECTION 10.02 Remedies on Default 25
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SECTION 10.03 Availability of Remedies 26
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SECTION 10.04 Agreement to Pay Attorneys' Fees and Expenses 26
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ARTICLE 11OPTIONS 27
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SECTION 11.01 Options to Terminate 27
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SECTION 11.02 Option to Renew 27
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SECTION 11.03 Option to Purchase Prior to Payment of the Bonds 27
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SECTION 11.04 Option to Purchase Project After Payment of the
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Indenture Indebtedness 28
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SECTION 11.05 Option to Purchase Portions of Project Site 28
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SECTION 11.06 Conveyance of Exercise of Option to Purchase 30
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ARTICLE 12 Internal Revenue Code 30
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SECTION 12.01 Covenants Regarding Section 103 and Sections 141-150 of
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the Code 30
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SECTION 12.02 User's Obligation Upon Determination of Taxability 31
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SECTION 12.03 Federal Rebate Payments 32
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ARTICLE 13Provisions of General Application 32
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SECTION 13.01 Covenant of Quiet Enjoyment 32
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SECTION 13.02 Investment of Funds 32
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SECTION 13.03 Issuer's Liabilities Limited 32
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SECTION 13.04 Prior Agreements 33
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SECTION 13.05 Execution Counterparts 33
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SECTION 13.06 Binding Effect; Governing Law 33
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SECTION 13.07 Enforceability 33
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SECTION 13.08 Article and Section Captions 33
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SECTION 13.09 Notices 33
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SECTION 13.10 Amendment of Indenture and this Lease Agreement 34
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TESTIMONIAL S-1
SIGNATURES S-1
ACKNOWLEDGMENTS N-1, N-2
EXHIBIT A
EXHIBIT B
STATE OF ALABAMA
XXXXXX COUNTY
LEASE AGREEMENT
LEASE AGREEMENT dated March 1, 2001, between THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF XXXXXXXX, a public corporation and instrumentality under
the laws of the State of Alabama (the "Issuer"), and QUALITY HOUSING SUPPLY,
LLC, a Delaware limited liability company (the "User").
Recitals
Pursuant to and for the purposes expressed in Division 1 of Article 4
of Chapter 54 of Title 11 of the CODE OF ALABAMA (1975) (the "Enabling Law"),
the Issuer and the User have executed and delivered this Lease Agreement
simultaneously with the issuance and sale by the Issuer, under and pursuant to
that certain Trust Indenture dated March 1, 2001 from the Issuer to First
Commercial Bank, as trustee, of $1,250,000 Variable/Fixed Rate Revenue Bonds
(Quality Housing Supply, LLC Project), dated the date of delivery and payment
therefor (the "Bonds") to finance a "project" within the meaning of the Enabling
Law, as more particularly described in said Trust Indenture.
NOW, THEREFORE, for and in consideration of the premises, and the
mutual covenants and agreements herein contained, the Issuer and the User hereby
covenant, agree and bind themselves as follows:
ARTICLE 1
Definitions
For all purposes of this Lease Agreement:
(a) Capitalized terms used herein without definition shall have the
respective meanings assigned thereto in the Indenture.
(b) The following general rules of construction shall apply:
(1) The terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular.
(2) All accounting terms not otherwise defined herein have the
meanings assigned to them, and all computations herein provided for shall
be made, in accordance with generally accepted accounting principles. All
references herein to "generally accepted accounting principles" refer to
such principles as they exist at the date of application thereof.
(3) All references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and subdivisions of this instrument as originally executed.
(4) The terms "herein", "hereof" and "hereunder" and other words of
similar import refer to this Lease Agreement as a whole and not to any
particular Article, Section or other subdivision.
(c) The following terms shall have the following meanings:
Administrative Expense Payments shall mean the payments to be made
pursuant to Section 5.03.
User Bond Payments shall mean the Payments payable pursuant to Section
5.02.
Bond Fund shall mean the fund established pursuant to Section 8.01 of
the Indenture.
Bond Guaranty shall mean that certain Bond Guaranty Agreement dated
March 1, 2001, executed by User in favor of the Trustee.
Bond Payment Date shall mean each date on which any principal of,
premium (if any) or interest on the Bonds is due and payable (whether on
the maturity or due dates thereof, by call for optional or mandatory or
extraordinary redemption, by acceleration, or by optional or mandatory
tender).
City shall mean the city of Xxxxxxxx and any successor to its
functions.
Construction Fund shall mean the fund established pursuant to Section
7.02 of the Indenture.
Credit Documents shall mean collectively that certain Credit Agreement
dated March 1, 2001 between the Credit Obligor and the User and all
agreements, documents, guaranties, instruments, notes, notices, and other
writings executed and delivered by the User or any other person or persons
which evidence or provide security for the obligations of the User with
respect to the Letter of Credit, including any amendments or supplements to
any thereof from time to time entered into pursuant to the applicable
provisions thereof, until a Substitute Letter of Credit shall have been
accepted by the Trustee, and thereafter "Credit Documents" shall mean
collectively all agreements, documents, guaranties, instruments, notes,
notices, and other writings which evidence or provide security for the
obligations of the User with respect to such Substitute Letter of Credit.
Credit Obligor shall mean First Commercial Bank and its successors and
assigns.
Credit Obligor Mortgage shall mean collectively the mortgages and
security agreements with respect to the Project by the Issuer and the User
to the Credit Obligor as security for the obligations of the User to the
Credit Obligor under the Credit Documents.
Enabling Law shall mean Division 1 of Article 4 of Chapter 54 of Title
11 of the CODE OF ALABAMA (1975).
Environmental Law shall mean and include all laws, rules, regulations,
ordinances, judgments, decrees, codes, orders, injunctions, notices and
demand letters of any Governmental Authority applicable to the User or the
Project Site (including the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601, et seq.) relating to pollution or protection of human health or the
environment, including any relating to Hazardous Substances.
Equipment shall have the meaning assigned in Demising Clause III of
Article 3.
Financing Documents shall mean the Bonds, Indenture, the Lease
Agreement, the Bond Guaranty, the Credit Documents, the Remarketing
Agreement, and the Letter of Credit.
Governmental Authority shall mean any federal, state, county,
municipal, or other government, domestic or foreign, and any agency,
authority, department, commission, bureau, board, court or other
instrumentality thereof.
Hazardous Substances shall mean and include all pollutants,
contaminants, toxic or hazardous wastes and other substances (including
asbestos, urea formaldehyde, foam insulation and materials containing
either petroleum or any of the substances referenced in Section 101(14) of
CERCLA), the removal of which is required or the manufacture, use,
maintenance and handling of which is regulated, restricted, prohibited or
penalized by an Environmental Law, or, even though not so regulated,
restricted, prohibited or penalized, might pose a hazard to the health and
safety of the public or the occupants of the property on which it is
located or the occupants of the property adjacent thereto.
Improvements shall have the meaning assigned in Demising Clause II of
Article 3.
Indenture shall mean that certain Trust Indenture dated March 1, 2001
between the Issuer and the Trustee as originally executed or as it may from
time to time be supplemented, modified or amended by one or more indentures
or other instruments supplemental hereto entered into pursuant to the
applicable provisions thereof.
Indenture Indebtedness shall mean all indebtedness of the Issuer at
the time secured by the Indenture, including without limitation (i) all
principal of, premium (if any) and interest on the Bonds and (ii) all
reasonable and proper fees, charges and disbursements of the Trustee and
Paying Agent for services performed and disbursements made under the
Indenture.
Internal Revenue Code shall mean the Internal Revenue Code of 1986, as
amended; and the transition rules of related legislation.
Issuer shall mean The Industrial Development Board of the City of
Xxxxxxxx, a public corporation organized under the laws of the State of
Alabama, until a successor corporation shall have become such pursuant to
the applicable provisions of the Indenture and this Lease Agreement, and
thereafter "Issuer" shall mean such successor corporation.
Lease Agreement shall mean this instrument including any amendments or
supplements to such instrument from time to time entered into pursuant to
the applicable provisions thereof.
Lease Term means the duration of the leasehold estate granted in
Section 5.01 of this Lease Agreement.
Net Proceeds, when used with respect to any insurance or condemnation
award, means the gross proceeds from the insurance or condemnation award
with respect to which that term is used remaining after payment of all
reasonable expenses (including reasonable attorneys' fees and any
extraordinary fee of the Trustee) incurred in the collection of such gross
proceeds.
Permitted Encumbrances means, as of any particular time, (i) the
Financing Documents, (ii) liens for taxes, assessments or other
governmental charges or levies not due and payable or which are currently
being contested in good faith by appropriate proceedings, (iii) utility,
access and other easements and rights of way, party walls, restrictions and
exceptions that may be granted or are permitted under this Lease Agreement,
(iv) any mechanic's, laborer's, materialman's, supplier's or vendor's lien
or right or purchase money security interest if payment is not yet due and
payable under the contract in question, (v) such minor defects,
irregularities, encumbrances, easements, rights of way and clouds on title
as do not, in the opinion of an independent Counsel, materially impair the
Project for the purpose for which it was acquired or is held by the Issuer,
and (vi) such encumbrances, mortgages, and other matters which appear of
public record prior to the date of recording of this Lease Agreement.
Project shall mean the Project Site, the Improvements and the
Equipment, as the same may at any time exist, and all other property and
rights referred to or intended so to be in Demising Clauses I through III,
inclusive, hereof.
Project Costs shall mean all costs of acquiring, constructing,
equipping and improving the Project, including without limitation:
(1) the purchase price and related costs for the acquisition of
real property or any interest therein,
(2) the cost of labor, materials and supplies furnished or used
in the acquisition, construction and installation of the Improvements
and the costs of acquiring and installing the Equipment,
(3) acquisition, transportation and installation costs for
personal property and fixtures,
(4) fees for architectural, engineering and supervisory services,
(5) expenses incurred in the enforcement of any remedy against
any contractor, subcontractor, materialmen, vendor, supplier or
surety,
(6) interest accruing on the Bonds until the Project is placed in
service,
(7) expenses incurred by the Issuer and the User in connection
with the financing of the Project including legal, consulting and
accounting fees,
(8) reimbursement to the User for any of the foregoing costs,
fees and expenses set forth in (1) through (7) above, paid by it with
its own funds.
Project Site shall mean the real property described in Demising Clause
I of Article 3.
Rental Payments shall mean collectively the User Bond Payments and the
Administrative Expense Payments. State shall mean the State of Alabama.
Trustee shall mean First Commercial Bank, until a successor Trustee
shall have become such pursuant to the applicable provisions of the
Indenture, and thereafter "Trustee" shall mean such successor.
Unimproved when used with reference to the Project Site shall mean any
part of the Project Site upon which no part of a building or other
structure rests.
User shall mean Quality Housing Supply, LLC, and its successors and
assigns, and thereafter "User" shall mean such persons.
User Agreement Default shall have the meaning stated in Article 10 of
this Lease Agreement. A User Agreement Default shall "exist" if a User
Agreement Default shall have occurred and be continuing.
ARTICLE 2
Representations
SECTION 2.01 Representations by the Issuer
The Issuer makes the following representations
(a) The Issuer is duly incorporated under the provisions of the Enabling
Law and has the power to enter into the transactions contemplated by this Lease
Agreement and to carry out its obligations hereunder. The Issuer is not in
default under any of the provisions contained in its certificate of
incorporation, its by-laws, or in the laws of the State. By proper corporate
action the Issuer has duly authorized the execution and delivery of this Lease
Agreement, the Indenture, and the Bonds.
(b) The Issuer has determined that the issuance of the Bonds, the
acquisition, construction and equipping of the Project and the leasing of the
Project to the User will promote industry, develop trade and further the use of
the agricultural products and natural and human resources of the State and the
development and preservation of said resources.
(c) The Bonds will be issued and delivered contemporaneously with the
delivery of this Lease Agreement.
SECTION 2.02 Representations by the User
The User makes the following representations:
(1) The User is duly organized and in good standing as a limited
liability company under the laws of the State of Delaware and is not
in default under any of the provisions contained in its documents of
organization or in the laws of the of the State of Delaware. The User
is duly qualified to do business in Alabama
(2) The User has the corporate power and authority to own its
properties, carry on the business in which it is presently engaged,
and consummate the transactions contemplated by the Financing
Documents to which it is a party.
(3) By proper corporate action the User has duly authorized the
execution, delivery and performance of the Financing Documents to
which it is a party and the consummation of the transactions
contemplated therein.
(4) The User has obtained all consents, approvals, authorizations
and orders of, and made all filings with, each Governmental Authority
that are required to be obtained or made by it as a condition to the
execution and delivery of the Financing Documents to which it is a
party.
(5) The execution and delivery by the User of the Financing
Documents to which it is a party and the consummation by it of the
transactions contemplated therein will not conflict with, be in
violation of, or result in a default under, its articles of
incorporation or bylaws, or any agreement, contract, instrument,
order, writ, decree or judgment to which the User is a party or is
subject.
(6) The Financing Documents to which the User is a party
constitute legal, valid and binding obligations of the User and are
enforceable against the User in accordance with the terms of such
instruments, except as enforcement thereof may be limited by (i) the
exercise of judicial discretion and (ii) bankruptcy, insolvency, or
other similar laws affecting the enforcement of creditors' rights, to
the extent constitutionally applicable.
(7) There is no action, suit, proceeding, inquiry or
investigation pending before any Governmental Authority, or threatened
against or affecting the User or its properties, that (a) involves (i)
the consummation of the transactions contemplated by, or the validity
or enforceability of, the Financing Documents, (ii) its organization,
(iii) the election or qualification of its directors or officers, (iv)
its powers, or (b) could have a materially adverse effect upon the
financial condition or operations of the User.
(8) The User is not an "investment company" or a company
"controlled" by an "investment company", as such terms are defined in
the Investment Company Act of 1940, as amended.
(9) The financing of the Project through the issuance of the
Bonds and the leasing of the Project to the User has induced the User
to enlarge, expand and improve existing operations in the State as
provided in the Enabling Law.
(10) The User intends to operate the Project for manufacturing,
production, assembling, processing, storing and distribution of such
agricultural, manufactured or mineral products as the User shall
determine and in such a manner that it will constitute a "project"
within the meaning of the Enabling Law.
(11) This Lease Agreement is necessary to promote and further the
financial and economic interests of the User and the assumption by the
User of its obligations hereunder will result in direct financial
benefits to the User.
ARTICLE 3
Demising Clauses
The Issuer, for and in consideration of the rents, covenants and agreements
hereinafter reserved, mentioned and contained on the part of the User to be
paid, kept and performed, does hereby demise and lease to the User, and the User
does hereby lease, take and hire from the Issuer, the following property:
I.
The real property described on Exhibit A hereto and all other
real property, or interests therein, acquired by the Issuer with
proceeds of the Bonds or with funds advanced or paid pursuant to this
Lease Agreement (the "Project Site"), together with all easements,
permits, licenses, rights-of-way, contracts, leases, tenements,
hereditaments, appurtenances, rights, privileges and immunities
pertaining or applicable to said real property.
II.
All buildings, structures and other improvements now or hereafter
constructed or situated on the Project Site, including without
limitation all buildings, structures and other improvements
constructed on the Project Site with proceeds of the Bonds or with
funds advanced or paid by the User pursuant to this Lease Agreement
(the "Improvements").
III.
The machinery, equipment, personal property and fixtures
described on Exhibit B attached hereto and all other machinery,
equipment, personal property and fixtures acquired with the proceeds
of the Bonds or with funds advanced or paid by the User pursuant to
this Lease Agreement, together with all personal property and fixtures
acquired in substitution therefor or as a renewal or replacement
thereof (the "Equipment").
SUBJECT, HOWEVER, to Permitted Encumbrances.
ARTICLE 4
Acquisition of the Project
SECTION 4.01 Application of Proceeds of Bonds.
On the date of issuance of the Bonds, the Issuer shall cause the proceeds
of the Bonds to be deposited in the Construction Fund pursuant to Section 7.02
of the Indenture and applied as provided therefor.
SECTION 4.02 Agreement to Acquire Project
(a) The Issuer shall cause the Bond proceeds to be advanced to the User by
withdrawal from the Construction Fund, in accordance with the requirements of
the Indenture, for the payment of Project Costs at such times and in such
amounts as shall be directed by the User. The Bond proceeds shall be used solely
for the payment of Project Costs as provided in the Indenture.
(b) The User will acquire and construct the Project with all reasonable
dispatch and due diligence and will cause the Project to be placed in service as
promptly as practicable. The Issuer will not execute any contract or purchase
orders for the Project without the prior written consent of the User.
(c) Compliance with laws and regulations necessary to realize any sales and
use tax exemption with respect to the acquisition, construction and equipping of
the Project shall be the sole responsibility of the User and the Issuer does not
assume any responsibility or give any assurance with respect to any possible
exemption from sales and use taxes.
(d) The User may, with the prior written consent of the Credit Obligor,
cause changes or amendments to be made in the plans and specifications for such
acquisition and construction of the Project, provided (1) such changes or
amendments will not change the nature of the Project to the extent that it would
not constitute a "project" as authorized by the Enabling Law, and (2) such
changes or amendments will not materially affect the utility of the Project for
its intended use. The Issuer will make only such changes or amendments in the
plans and specifications for the acquisition and construction of the Project as
may be requested in writing by the User.
(e) The Issuer and the User shall from time to time each appoint by written
instrument an agent or agents authorized to act for each respectively in any or
all matters relating to the acquisition and construction of the Project and
payments to be made out of the Construction Fund. One of the agents appointed by
the User shall be designated its Project Supervisor. Either the Issuer or the
User may from time to time revoke, amend or otherwise limit the authorization of
any agent appointed by such party to act on such party's behalf or designate
another agent or agents to act on such party's behalf, provided that there shall
be at all times at least one agent authorized to act on behalf of the Issuer,
and at least one agent (who shall be the Project Supervisor) authorized to act
on behalf of the User, with reference to all the foregoing matters. The Project
Supervisor at any time designated by the User is hereby irrevocably appointed as
agent for the Issuer to issue and execute, for and in the name and behalf of the
Issuer and without any further approval of the board of directors or any
officer, employee or other agent thereof, a payment requisition on the
Construction Fund.
(f) In the event the proceeds derived from the sale of the Bonds are
insufficient to pay in full all Project Costs, the User shall be obligated to
complete the acquisition and construction of the Project at its own expense and
the User shall pay any such deficiency and shall save the Issuer whole and
harmless from any obligation to pay such deficiency. The User shall not by
reason of the payment of such deficiency from its own funds be entitled to any
diminution in Rental Payments.
SECTION 4.03 No Warranty of Suitability of Issuer
THE USER RECOGNIZES THAT SINCE THE PLANS AND SPECIFICATIONS FOR
ACQUIRING AND CONSTRUCTING THE PROJECT ARE FURNISHED BY IT, THE ISSUER MAKES NO
WARRANTY, EITHER EXPRESS OR IMPLIED, NOR OFFERS ANY ASSURANCES THAT THE PROJECT
WILL BE SUITABLE FOR THE USER'S PURPOSES OR NEEDS OR THAT THE PROCEEDS DERIVED
FROM THE SALE OF THE BONDS WILL BE SUFFICIENT TO PAY IN FULL ALL PROJECT COSTS.
SECTION 4.04 Pursuit of Remedies Against Vendors, Contractors and
Subcontractors and Their Sureties
The User may, in its own name or in the name of the Issuer, prosecute or
defend any action or proceeding or take any other action involving any vendor,
contractor, subcontractor or surety under any contract or purchase order for
acquisition and construction of the Project which the User deems reasonably
necessary, and the Issuer hereby irrevocably appoints the User as its agent with
respect to any such action or proceeding and agrees that it will cooperate fully
with the User and will take all action requested by the User in any such action
or proceeding. Any amounts recovered by way of damages, refunds, adjustments or
otherwise in connection with the foregoing shall be paid into the Construction
Fund and applied as provided for funds on deposit therein. The User will pay all
costs, fees and expenses incurred which are not paid from the Construction Fund.
SECTION 4.05 Completion of the Project
(a) The completion of the Project shall be evidenced to the Trustee by a
certificate signed by the Project Supervisor on behalf of the User stating that
(1) construction of the Improvements has been completed in accordance with the
plans and specifications approved by the User, (2) the Equipment has been
acquired and installed in accordance with the User's instructions, (3) all
Project Costs have been paid, and (4) all facilities and improvements necessary
in connection with the Project have been acquired and installed and all costs
and expenses incurred in connection therewith have been paid. Notwithstanding
the foregoing, such certificate shall state that it is given without prejudice
to any rights against any vendor, contractor, subcontractor or other person not
a party to this Lease Agreement which exist at the date of such certificate or
which may subsequently come into being. The Issuer and the User will cooperate
in causing such certificate to be furnished to the Trustee.
(b) After the delivery of the aforesaid certificate to the Trustee, any
moneys then remaining in the Construction Fund shall be applied as provided in
the Indenture.
ARTICLE 5
Duration of Lease Termand Rental Provisions
SECTION 5.01 Duration of Term
The term of this Lease Agreement and of the lease herein made shall begin
on the date of the delivery of this Lease Agreement and, subject to the
provisions of this Lease Agreement, shall continue until midnight of March 1,
2013. The Issuer will deliver to the User possession of the Project on the
commencement date of the Lease Term, subject to the inspection and other rights
reserved in this Lease Agreement, and the User will accept possession thereof at
such time; provided, however, the Issuer will be permitted such possession of
the Project as shall be necessary and convenient for it to construct or install
any additions or improvements and to make any repairs or restorations required
or permitted to be constructed, installed or made by the Issuer pursuant to the
provisions hereof.
SECTION 5.02 User Bond Payments; Draws Under Letter of Credit
(a) On or before 10:00 a.m. (Birmingham, Alabama time) on each Bond Payment
Date, the User shall pay to the Trustee, for the account of the Issuer, an
amount equal to the principal of, premium (if any) and interest on the Bonds
(other than Pledged Bonds) due and payable on such Bond Payment Date; provided,
however, that (i) any amount already on deposit in the Bond Fund on the due date
of such Basic Rental Payment and available for the payment of the principal of,
premium (if any) and interest on the Bonds on such Bond Payment Date shall be
credited against the amount of such Basic Rental Payment, and (ii) any amount
drawn by the Trustee pursuant to the Letter of Credit for the payment of the
principal of, premium (if any) and interest on the Bonds on such Bond Payment
Date shall be credited against such Basic Rental Payment.
(b) On each Bond Payment Date prior to 10:00 a.m. (Birmingham, Alabama
time) the Trustee shall, without making any prior claim or demand on the User
for the payment of User Bond Payments with respect to Bonds other than Pledged
Bonds, make a draw on the Letter of Credit in an amount equal to the amount of
principal of, premium (if any) and interest on the Bonds due and payable on such
Bond Payment Date on Bonds other than Pledged Bonds. The User shall receive a
credit against User Bond Payments for the amount so drawn. No draw shall be made
under the Letter of Credit with respect to Pledged Bonds, and the User shall
receive no credit against User Bond Payments with respect to Pledged Bonds for
any amounts drawn under the Letter of Credit.
(c) The User hereby authorizes and directs the Trustee to draw moneys under
the Letter of Credit in accordance with the provisions of the Indenture and this
Lease Agreement to the extent necessary to pay the principal of, premium (if
any) and interest on the Bonds (other than Pledged Bonds) when due and payable
pursuant to the Indenture and the Bonds.
(d) All User Bond Payments shall be made in funds immediately available to
the Trustee at its Principal Office on the related Bond Payment Date.
(e) If any Basic Rental Payment is due on a day which is not a Business
Day, such payment may be made on the first succeeding day which is a Business
Day with the same effect as if made on the day such payment was due.
(f) The User acknowledges, covenants, and agrees that until the Indenture
Indebtedness is paid in full the User shall make Basic Rent Payments in such
amounts and at such times as shall be necessary to enable the Trustee to pay in
full in accordance with the Indenture the principal of, premium (if any) and
interest on the Bonds (other than Pledged Bonds) when and as the same becomes
due and payable.
SECTION 5.03 Administrative Expense Payments
(a) The User shall make Administrative Expense Payments as follows:
(1) the acceptance fee of the Trustee and the annual (or other
regular) fees, charges and expenses of the Trustee, Paying Agent and
Remarketing Agent;
(2) any amount to which the Trustee may be entitled under Section
13.07 of the Indenture; and
(3) the reasonable expenses of the Issuer incurred at the request
of the User, or in the performance of its duties under any of the
Financing Documents, or in connection with any litigation which may at
any time be instituted involving the Project, the Financing Documents,
or in the pursuit of any remedies under the Financing Documents.
(b) All Administrative Expense Payments shall be due and payable within 10
days after receipt by the User of an invoice therefor.
SECTION 5.04 Advances by Issuer or Trustee
If the User shall fail to perform any of its covenants in this Lease
Agreement, the Issuer or the Trustee may, at any time and from time to time,
after written notice to the User if no User Agreement Default exists, make
advances to effect performance of any such covenant on behalf of the User. Any
money so advanced by the Issuer or the Trustee, together with interest at the
base or prime rate of the Trustee plus 2%, shall be paid upon demand.
SECTION 5.05 Indemnity of Issuer, Trustee and Credit Obligor
(a) The User covenants and agrees to pay and to indemnify and hold the
Issuer, the Trustee and the Credit Obligor (and each officer, director, member,
employee or agent of each thereof) harmless against, any and all liabilities,
losses, damages, claims or actions (including all reasonable attorneys' fees and
expenses of the Issuer, Trustee and the Credit Obligor), of any nature
whatsoever incurred by the Issuer, the Trustee and the Credit Obligor without
gross negligence or willful misconduct on their part arising from or in
connection with (i) their performance or observance of any covenant or condition
on their part to be observed or performed under any of the Financing Documents,
(ii) any injury to, or the death of, any person or any damage to property at the
Project, or in any manner growing out of or connected with the use, nonuse,
condition or occupation of the Project or any part thereof, (iii) any damage,
injury, loss or destruction of the Project, (iv) any other act or event
occurring upon, or affecting, any part of the Project, (v) violation by the User
of any contract, agreement or restriction affecting the Project or the use
thereof of which the User has notice and which shall have existed at the
commencement of the Lease Term hereof or shall have been approved by the User,
or of any law, ordinance or regulation affecting the Project or any part thereof
or the ownership, occupancy or use thereof, (vi) any violation of, or
non-compliance of the Project Site with, Environmental Laws, or the presence of
Hazardous Substances now or hereafter on or under or included in the Project
Site and any investigation, clean up or removal of, or other remedial action or
response costs with respect to, any Hazardous Substances now or hereafter
located on or under or included in the Project Site, or any part thereof, that
may be required by any Environmental Law or Governmental Authority (specifically
including without limitation any and all liabilities, damages, fines, penalties,
response costs, investigatory or other costs pursuant to the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sections 9601 et seq.) and including without limitation claims alleging
non-compliance with Environmental Laws which seek relief under or are based on
state or common law theories such as trespass or nuisance, and (vii)
liabilities, losses, damages, claims or actions arising out of the offer and
sale of the Bonds or a subsequent sale or distribution of any of the Bonds,
unless the same resulted from a representation or warranty of the Issuer or the
Trustee or the Credit Obligor in any of the Financing Documents or any
certificate delivered by the Issuer or the Trustee or the Credit Obligor
pursuant thereto being false or misleading in a material respect and such
representation or warranty was not based upon a similar representation or
warranty of the User furnished to the Issuer or the Trustee or the Credit
Obligor in connection therewith.
(b) The User hereby agrees that the Issuer, the Trustee and the Credit
Obligor shall not incur any liability to the User, and shall be indemnified
against all liabilities, in exercising or refraining from asserting, maintaining
or exercising any right, privilege or power of the Issuer, or the Trustee, or
the Credit Obligor under any of the Financing Documents if the Issuer, or the
Trustee, or the Credit Obligor as the case may be is acting in good faith and
without willful misconduct or in reliance upon a written request by the User.
(c) If any indemnifiable party (whether the Issuer or the Trustee) shall be
obligated to pay any claim, liability or loss, and if in accordance with all
applicable provisions of this Section the User shall be obligated to indemnify
and hold such indemnifiable party harmless against such claim, liability or
loss, then, in such case, the User shall have a primary obligation to pay such
claim, liability or loss on behalf of such indemnifiable party and may not defer
discharge of its indemnity obligation hereunder until such indemnifiable party
shall have first paid such claim, liability or loss and thereby incurred actual
loss.
(d) The covenants of indemnity by the User contained in this Section shall
survive the termination of this Lease Agreement with respect to events or
occurrences happening prior to or upon the termination of this Lease Agreement
and shall remain in full force and effect until the commencement of an action
with respect to any such event or occurrence shall be prohibited by law.
SECTION 5.06 Obligations of User Unconditional
The obligation of the User to make all Rental Payments and all other
payments provided for herein and to perform and observe the other agreements and
covenants on its part herein contained shall be absolute and unconditional,
irrespective of any rights of set-off, recoupment or counterclaim it might
otherwise have against the Issuer. The User will not suspend or discontinue any
such payment or fail to perform and observe any of its other agreements and
covenants contained herein or terminate any of the Financing Documents, for any
cause whatsoever, including, without limiting the generality of the foregoing,
any acts or circumstances that may constitute an eviction or constructive
eviction, failure of consideration or commercial frustration of purpose, the
invalidity or unenforceability of the Bonds or any of the Financing Documents or
any provision thereof, the invalidity or unconstitutionality of the Enabling Law
or any provision thereof, any damage to or destruction of the Project or any
part thereof, the taking by eminent domain of title to or the right to temporary
use of all or any part of the Project, any failure of the Credit Obligor to make
a payment pursuant to the Letter of Credit or to reinstate the appropriate
amount thereof, any change in the tax or other laws or administrative rulings,
actions or regulations of the United States of America or of the State or any
political or taxing subdivision of either thereof, or any failure of the Issuer
to perform and observe any agreement or covenant, whether express or implied,
any duty, liability or obligation arising out of or in connection with this
Lease Agreement. Notwithstanding the foregoing, the User may, at its own cost
and expense and in its own name or in the name of the Issuer, prosecute or
defend any action or proceeding, or take any other action involving third
persons which the User deems reasonably necessary in order to secure or protect
its rights of use and occupancy and the other rights hereunder. The provisions
of the first and second sentences of this Section shall apply only so long as
any of the Bonds remains Outstanding.
SECTION 5.07 This Lease a Net Lease
The User recognizes, understands and acknowledges that it is the intention
hereof that this Lease Agreement be a net lease and that as long as any of the
Bonds are Outstanding all Basic Rent be available for payment of the principal
of, premium (if any) and interest on the Bonds and that all Additional Rent
shall be available for the purposes specified therefor. This Lease Agreement
shall be construed to effectuate such intent.
ARTICLE 6
Maintenance, Alterations, Replacements, Taxes and Insurance
SECTION 6.01 Maintenance and Repairs, Alterations and Improvements,
Party Walls; and Liens; Utility Charges
(a) The User shall, at its own expense, (1) keep the Project in as
reasonably safe condition as its operations permit, (2) from time to time make
all necessary and proper repairs, renewals and replacements thereto, including
external and structural repairs, renewals and replacements, and (3) pay all gas,
electric, water, sewer and other charges for the operation, maintenance, use and
upkeep of the Project.
(b) The User may, at its own expense, make structural changes, additions,
improvements, alterations or replacements to the Improvements that it may deem
desirable, provided such structural changes, additions, improvements,
alterations or replacements do not change the character of the Project as a
"project" under the Enabling Law, and that such additions, improvements,
alterations or replacements will not adversely affect the utility of the Project
or substantially reduce its value. All such changes, additions, improvements,
alterations and replacements whether made by the User or the Issuer shall become
a part of the Project and shall be covered by this Lease Agreement.
(c) The User may connect or "tie-in" walls of the Improvements and utility
and other facilities located on the Project Site to other structures and
facilities owned or leased by it on real property adjacent to the Project Site.
The User may use as a party wall any wall of the Improvements which is on or
contiguous to the boundary line of real property owned or leased by it, and in
the event of such use, each party hereto hereby grants to the other a ten-foot
easement adjacent to any such party wall for the purpose of inspection,
maintenance, repair and replacement thereof and the tying in of new
construction. If the User utilizes any wall of the Improvements as a party wall
for the purpose of tying in new construction that will be utilized under common
control with the Project, the User may also remove any non-loadbearing wall
panel in the party wall; provided however, if the adjacent property ceases to be
operated under common control with the Project, the User shall, at its own
expense, install wall panels similar in quality to those that have been removed.
Prior to the exercise of any one or more of the rights granted by this
subsection (c), the User shall demonstrate to the reasonable satisfaction of the
Issuer and Trustee that the operation of the Project will not be adversely
affected by the exercise of such rights.
(d) The Issuer shall also, upon request of the User, grant such utility and
other similar easements over, across or under the Project Site as shall be
necessary or convenient for the furnishing of utility and other similar services
to the Project or to real property adjacent to or near the Project Site and
owned or leased by the User; provided that such easements shall not adversely
affect the operation of the facilities forming a part of the Project.
SECTION 6.02 Removal of, Substitution and Replacement for Equipment
If the User in its sole discretion determines that any item of Equipment
has become inadequate, obsolete, worn-out, unsuitable, undesirable or
unnecessary in the operation of the Project, the User may remove such Equipment
from the Improvements or the Project Site and (on behalf of the Issuer) sell,
trade in, exchange or otherwise dispose of it without any responsibility or
accountability to the Issuer or the Trustee therefor, provided that the User
shall either:
(a) substitute and install in or on the Project Site other
personal property or fixtures which shall (1) have equal or greater
utility (but not necessarily the same value or function) in the
operation of the Project, (2) be free of all liens and encumbrances
except for purchase money liens or encumbrances reasonably acceptable
to the Trustee, (3) be the sole property of the Issuer, subject to the
demise hereof, (4) be held by the User on the same terms and
conditions as the items originally comprising the Equipment, and (5)
not impair the Project or change the nature of the Project as a
"project" under the Enabling Law; or
(b) forthwith upon such sale apply the price or amount obtained
upon the sale of such Equipment to the redemption of the principal of
the Bonds in accordance with the terms thereof.
SECTION 6.03 Installation of Machinery and Equipment Owned or Leased by the
User or Subject to a Security Interest in Third Parties
(a) The User, may, at its own expense, or permit any sublessee of the
Project to, at its own expense, install at the Project any machinery, equipment
or other personal property which will facilitate the operation of the Project.
Any such property which is installed and does not constitute a part of the
Project under the terms of this Lease Agreement shall be and remain the property
of the User or such sublessee and may be removed thereby at any time while no
Event of Default exists under this Lease Agreement; provided, that any damage to
the Project occasioned by such removal shall be repaired by such party at its
own expense.
(b) If (i) any machinery, equipment or other personal property is leased by
the User or the User shall have granted a security interest in any such property
in connection with the acquisition thereof by the User, (ii) such property is
installed or is located on the Project Site, and (iii) such property does not
constitute a part of the Project under the terms of this Lease Agreement, then
the lessor of such property or the party holding a security interest therein, as
the case may be, may remove such property from the Project Site even though an
Event of Default may then exist hereunder or this Lease Agreement may have been
terminated following an Event of Default hereunder, provided, that the foregoing
permission to remove shall be subject to the agreement by such lessor or secured
party to repair at its own expense any damage to the Project occasioned by such
removal.
SECTION 6.04 Insurance
(a) The User will take out and continuously maintain in effect the
following insurance with respect to the Project, paying as the same become due
all premiums with respect thereto:
(1) Insurance to the extent of the full insurable value of the
Project against loss or damage by fire, tornado, windstorm, flood and
other hazards and casualties, with uniform standard extended coverage
endorsement limited only as may be provided in the standard form of
extended coverage endorsement at the time in use in the State.
(2) Insurance against liability for bodily injury to or death of
persons and for damage to or loss of property occurring on or about
the Project or in any way related to the condition or operation of the
Project, in the minimum amounts of $1,000,000 combined single limit
for death of or bodily injury to any one person and for property
damage, all on a per occurrence basis.
(3) Flood insurance under the national flood insurance program
established by the Flood Disaster Protection Act of 1973, as at any
time amended, only during such times while the Project is eligible
under such program, in an amount at least equal to the principal
amount of the Bonds Outstanding or to the maximum limit of coverage
made available with respect to the Project under said Act, whichever
is less.
(4) Title insurance in an amount equal to the initial stated
amount of the Letter of Credit, insuring the mortgage on the Project
created by the Financing Documents subject to no liens and
encumbrances other than such encumbrances as shall be approved by the
Trustee and the Credit Obligor. Any proceeds of such title insurance
shall be applied, at the direction of the Credit Obligor, to cure the
title defect in respect of which such proceeds are made available or
shall be deposited with the Trustee and applied to the redemption of
the Bonds in accordance with the terms thereof.
(5) Use and occupancy insurance (or business interruption or risk
insurance) covering suspension or interruption of the User's
operations at the Project in whole or in part, with such exemptions as
are customarily imposed by insurers, covering a period of suspension
or interruption of at least six months with a minimum limit in an
amount equal to 100% of the maximum amount to be paid as Rental
Payments (based on Debt Service computed at the Maximum Rate during
any Variable Rate Period) and other payments under Article 5 hereof
during the then current or any subsequent year.
(6) During the period of acquisition and construction of any part
of the Project builders' risk insurance in the amount of the full
replacement value of the Project against all losses which are normally
covered by such builders' risk insurance. The User may satisfy its
obligations with respect to the builder's risk insurance by causing
such insurance to be carried by a construction contractor for any part
of the Project.
(b) All policies evidencing the insurance required by the terms of the
preceding paragraph shall be taken out and maintained in generally recognized
responsible insurance companies, qualified under the laws of the State to assume
the respective risks undertaken. All such insurance policies shall name as
either loss payee or additional insureds the Credit Obligor, the Issuer and the
Trustee (as their respective interests shall appear) and shall contain, where
appropriate, standard mortgage clauses providing for all losses thereunder in
excess of $100,000 to be paid to the Trustee; provided that all losses
(including those in excess of $100,000) may be adjusted by the User, subject, in
the case of any single loss in excess of $100,000, to the approval of the Credit
Obligor. The User may insure under a blanket policy or policies.
(c) Each insurance policy required to be carried by this Section shall
contain, to the extent obtainable, an agreement by the insurer that (1) the User
may not, without the consent of the Credit Obligor, the Issuer and Trustee,
cancel or materially amend such insurance or sell, assign or dispose of any
interest in such insurance, policy or any proceeds thereof, and (2) such insurer
shall notify the Credit Obligor, the Issuer and the Trustee if any premium is
not paid when due or if any such policy is not renewed prior to the expiration
thereof, and (3) such insurer shall not materially amend or cancel any such
policy except on 30 days' prior written notice to the Credit Obligor, the Issuer
and the Trustee.
(d) The User shall deposit with the Credit Obligor a certificate or
certificates of the respective insurers attesting the fact that all policies
evidencing the insurance required to be carried by this Section are in force and
effect. Upon the expiration of any such policy, the User shall furnish to the
Credit Obligor evidence reasonably satisfactory to the Credit Obligor that such
policy has been renewed or replaced by another policy or that there is no
necessity therefor under this Lease Agreement.
ARTICLE 7
Provisions Respecting Damage,
Destruction and Condemnation
SECTION 7.01 Damage and Destruction
(a)If no User Agreement Default shall have occurred and be continuing and
the Letter of Credit is in effect and the Credit Obligor has not dishonored any
draws thereunder and there has not been instituted insolvency proceedings with
respect to the Credit Obligor, then all Net Proceeds of insurance resulting from
claims for losses in respect of damage to or destruction of the Project (in
whole or in part) shall be applied as provided in the Credit Obligor Mortgage.
(b)If no User Agreement Default shall have occurred and be continuing and
the Letter of Credit is not in effect, or if the Credit Obligor has dishonored
any draw thereunder or if there has been instituted insolvency proceedings with
respect to the Credit Obligor, then the following provisions shall apply in
event of damage to or destruction of the Project (in whole or in part):
(1) If the Project is destroyed (in whole or in part) or is
damaged the User shall continue to make Rental Payments and will
promptly give written notice of such damage and destruction to the
Trustee and the Issuer. All Net Proceeds of insurance resulting from
claims for such losses shall be paid to the Trustee and deposited in
the Construction Fund, whereupon (i) the User, or the Issuer at the
User's direction, shall proceed promptly to repair, rebuild or restore
the property damaged or destroyed to substantially the same condition
in which it existed prior to the event causing such damage or
destruction, with such changes, alterations and modifications
(including the substitution and addition of other property) as may be
desired by the User and as will not impair the operating unity or
productive capacity of the Project or its character as a "project"
under the Enabling Law, and (2) the Issuer shall cause withdrawals to
be made from the Construction Fund to pay the costs of such repair,
rebuilding or restoration, either on completion thereof or as the work
progresses. The balance (if any) of Net Proceeds remaining after the
payment of all of the costs of such repair, rebuilding or restoration
shall be applied to the redemption of Bonds in accordance with the
provisions thereof and of the Indenture, or, if none of the Bonds are
then Outstanding, shall be paid to the User.
(2) In the event the Net Proceeds are not sufficient to pay in
full the costs of repairing, rebuilding and restoring the Project as
provided in this Section, the User shall nonetheless complete the work
thereof and shall pay that portion of the costs thereof in excess of
the amount of said proceeds or shall pay to the Trustee for the
account of the Issuer the moneys necessary to complete said work. The
User shall not by reason of the payment of such excess costs (whether
by direct payment thereof or payment to the Trustee therefor) be
entitled to any reimbursement from the Issuer or any abatement or
diminution of the Rental Payments hereunder.
(3) Anything in this Section to the contrary notwithstanding, if,
as a result of such damage or destruction the User is entitled to
exercise an option to purchase the Project and duly does so in
accordance with the applicable provisions of Section 11.03 hereof,
then neither the User nor the Issuer shall be required to repair,
rebuild or restore the property damaged or destroyed, and so much
(which may be all) of any Net Proceeds referable to such damage or
destruction as shall be necessary to provide for full payment of the
Indenture Indebtedness shall be paid to the Trustee and the excess
thereafter remaining (if any) shall be paid to the User.
(c) If a User Agreement Default has occurred and is continuing, and the
Letter of Credit is not in effect or the Credit Obligor has dishonored any draw
thereunder or there has been instituted insolvency proceedings with respect to
the Credit Obligor, then all Net Proceeds of insurance resulting from claims for
losses in respect to damage to or destruction of the Project (in whole or in
part) shall be applied to the redemption of the Bonds in accordance with the
terms thereof.
SECTION 7.02 Condemnation
(a) If no User Agreement Default shall have occurred and be continuing and
the Letter of Credit is in effect and the Credit Obligor has not dishonored any
draws thereunder and there has not been instituted insolvency proceedings with
respect to the Credit Obligor, then all Net Proceeds resulting from any taking
by eminent domain of the Project (in whole or in part) shall be applied as
provided in the Credit Obligor Mortgage.
(b) If no User Agreement Default shall have occurred and be continuing and
the Letter of Credit is not in effect, or if the Credit Obligor has dishonored
any draw thereunder or if there has been instituted insolvency proceedings with
respect to the Credit Obligor, then the following provisions shall apply in
event of any taking by eminent domain of the Project (in whole or in part):
(1) In the event that title to, or the temporary use of, the
Project or any part thereof shall be taken under the exercise of the
power of eminent domain and as a result thereof the User is entitled
to exercise an option to purchase the Project and duly does so in
accordance with the applicable provisions of Section 11.03 hereof, so
much (which may be all) of the Net Proceeds referable to such taking,
including the amounts awarded to the Issuer and the Trustee and the
amount awarded to the User for the taking of all or any part of the
leasehold estate of the User in the Project created by this Lease
Agreement, as shall be necessary to provide for full payment of the
Indenture Indebtedness shall be paid to the Trustee and the excess of
such Net Proceeds remaining (if any) shall be paid to the User.
(2) If as a result of such taking, the User is not entitled to
exercise an option to purchase the Project under Section 11.03 hereof,
or, having such option, fails to exercise the same in accordance with
the terms thereof or notifies the Issuer and the Trustee in writing
that it does not propose to exercise such option, the User shall be
obligated to continue to make the Rental Payments and the entire Net
Proceeds hereinabove referred to shall, be paid to the Trustee and
applied in one or more of the following ways as shall be directed in
writing by the User:
(i) To the restoration of the remaining improvements
located on the Project Site to substantially the same
condition in which they existed prior to the exercise of the
power of eminent domain;
(ii) To the acquisition, by construction or otherwise,
by the Issuer of other lands or improvements suitable for
the User's operations at the Project, which land or
improvements shall be deemed a part of the Project and
available for use and occupancy by the User without the
payment of any Rental Payments other than that herein
provided to the same extent as if such land or other
improvements were specifically described herein and demised
hereby, and which land or improvements shall be acquired by
the Issuer subject to no liens or encumbrances.
(3) Any balance of such Net Proceeds remaining after the
application thereof as provided in subsection (b) of this Section
shall be applied to the redemption of the Bonds in accordance with the
terms thereof, or, if the Indenture Indebtedness is paid in full,
shall be paid to the User.
(4) The Issuer shall cooperate fully with the User in the
handling and conduct of any prospective or pending condemnation
proceeding with respect to the Project or any part thereof and shall,
to the extent it may lawfully do so, permit the User to litigate in
any such proceeding in the name and behalf of the Issuer. In no event
shall the Issuer settle, or consent to the settlement of, any
prospective or pending condemnation proceeding without the prior
written consent of the User.
(5) The User shall be entitled to the Net Proceeds of any award
or portion thereof made for damage to or taking of its own property
not included in the Project, provided that any Net Proceeds resulting
from the taking of all or any part of the leasehold estate of the User
in the Project created by this Lease Agreement shall be paid and
applied in the manner provided in this Section 7.02.
(c) If a User Agreement Default has occurred and is continuing, and the
Letter of Credit is not in effect or the Credit Obligor has dishonored any draw
thereunder or there has been instituted insolvency proceedings with respect to
the Credit Obligor, then all Net Proceeds of condemnation awards resulting from
condemnation of the Project (in whole or in part) shall be applied to the
redemption of the Bonds in accordance with the terms thereof.
ARTICLE 8
Certain Provisions Relating to Assignment,
Subleasing, Mortgaging and the Bonds
SECTION 8.01 Provisions Relating to Assignment and Subleasing
With the consent of the Credit Obligor and without the consent of the
Issuer, the Trustee, or the Holders, the User may assign this Lease Agreement
and the leasehold interest created hereby and may sublet the Project or any part
thereof, subject, however, to the following conditions:
(1)The User will not assign the leasehold interest created hereby nor
sublease the Project to any person unless the operations of such assignee or
sublessee are consistent with, and in furtherance of, the purpose of the
Enabling Law. The User shall, prior to any such assignment or sublease,
demonstrate to the reasonable satisfaction of the Trustee and the Credit Obligor
that the operations of such assignee or sublessee will preserve the character of
the Project as a "project" under the Enabling Law, if applicable, and deliver to
the Trustee and the Credit Obligor an Opinion of Bond Counsel, acceptable to the
Trustee, to the effect that such assignment or sublease will not cause the
interest on the Bonds to be Taxable.
(2)The User shall, within 30 days after the delivery thereof, furnish to
the Issuer and the Trustee and the Credit Obligor a true and complete copy of
each such assignment or sublease.
SECTION 8.02 Assignment of Lease Agreement and Rents by the Issuer
The Issuer has, simultaneously with the delivery of this Lease Agreement,
assigned its interest in and pledged any money receivable under this Lease
Agreement (other than certain rights to indemnification and reimbursement) to
the Trustee as security for payment of the Bonds, and the User hereby consents
to such assignment and pledge. The Issuer has in the Indenture obligated itself
to follow the instructions of the Trustee or the Owners or a certain percentage
thereof in the election or pursuit of any remedies herein vested in it. The
Trustee shall have all rights and remedies herein accorded to the Issuer and any
reference herein to the Issuer shall be deemed, with the necessary changes in
detail, to include the Trustee, and the Trustee and the Owners are deemed to be
third party beneficiaries of the covenants, agreements and representations of
the User herein contained. Neither the Issuer nor the User will unreasonably
withhold any consent herein or in the Indenture required of either of them. The
User shall not be deemed to be a party to the Indenture or the Bonds and
reference in this Lease Agreement to the Indenture and the Bonds shall not
impose any liability or obligation upon the User other than its specific
obligations and liabilities undertaken in this Lease Agreement.
SECTION 8.03 Transfer or Encumbrance Created by Issuer; Corporate Existence
of Issuer
(a)Without the prior written consent of the Trustee, the Credit Obligor,
and the User, the Issuer (1) will not sell, transfer or convey the Project or
any part thereof, except as provided in this Lease Agreement, and (2) will not
create or incur or suffer or permit to be created or incurred or to exist any
mortgage, lien, charge or encumbrance on the Project or any part thereof.
(b)The Issuer shall not consolidate with or merge into any other
corporation or transfer its property substantially as an entirety, except as
provided in the Indenture.
SECTION 8.04 Redemption of Bonds
(a)The Issuer will redeem any or all of the Bonds in accordance with the
mandatory redemption provisions of the Bonds and the Indenture and upon the
occurrence of any event or contingency requiring the mandatory redemption of
Bonds, all in accordance with the applicable provisions of the Bonds and the
Indenture.
(b)If no User Agreement Default exists, the Issuer will exercise any right
of optional redemption with respect to the Bonds only upon the written request
of the User.
ARTICLE 9
Covenants of the User
Until the Indenture Indebtedness is paid in full:
(a)The User shall not do or permit anything to be done at the Project that
will affect, impair or contravene any policies of insurance that may be carried
on the Project. The User will, in the use of the Project and the public ways
abutting the same comply with all lawful requirements, the violation of which
would have a material adverse effect on the Project, of all governmental bodies;
provided, however, the User may, at its own expense in good faith contest the
validity or applicability of any such requirement.
(b)The User shall permit the Issuer, the Trustee, the Credit Obligor and
their duly authorized agents at all reasonable times to enter upon, examine and
inspect the Project.
(c)The User will maintain proper books of record and account, in which full
and correct entries will be made, in accordance with generally accepted
accounting principles, of all its business and affairs. The User shall furnish
to the Trustee and any Holder with reasonable promptness such financial
information of the User as the Trustee or such Holder shall reasonably request
in writing.
(d)The User will duly pay and discharge all taxes, assessments and other
governmental charges and liens lawfully imposed on the User and upon the
properties of the User and the Project; provided, however, the User will not be
required to pay any taxes, assessments or other governmental charges so long as
in good faith it shall contest the validity thereof by appropriate legal
proceedings, the User has given notice of such contest to the Trustee, the User
has established adequate reserves therefor, and no part of the Project shall, in
the opinion of the Trustee, be subject to loss or forfeiture.
(e)Except as permitted by this Section the User will maintain and preserve
its legal existence and will not voluntarily dissolve without first discharging
its obligations under this Lease Agreement (except as permitted herein) and will
comply with all valid laws, ordinances, regulations and requirements applicable
to it or to its property and the Project.
(f)The User will not in any manner transfer or convey any substantial
portion of its property, assets and licenses (either in a single transaction or
in a series of related transactions) except upon receipt of adequate
consideration therefor.
(g)The User will do, execute, acknowledge and deliver such further acts,
conveyances, mortgages, financing statements and assurances as the Issuer or the
Trustee shall require for accomplishing the purposes of the Financing Documents.
The User will cause this Lease Agreement, any amendments to this Lease Agreement
and other instruments of further assurance, including financing statements and
continuation statements, to be promptly recorded, registered and filed, and at
all times to be kept recorded, registered and filed in such places as may be
required by law fully to preserve and protect the rights of the Issuer and the
Trustee to all property comprising the Project.
(h)The User will not transfer or dispose of all or substantially all of its
assets (either in a single transaction or in a series of related transactions),
and will not merge or consolidate with any other corporation nor permit one or
more corporations to consolidate with or merge into it unless (1) such
surviving, successor or transferee corporation is a corporation organized and
existing under the laws of one of the states of the United States of America and
is duly qualified to do business in the United States of America and is duly
qualified to do business in the State of Alabama, and (2) the assignee
corporation or the corporation resulting from or surviving such merger or
consolidation shall expressly assume and agree in writing delivered to the
Issuer and the Trustee to pay and perform all of the User's obligations under
this Lease Agreement. If consolidation, merger or other transfer is made as
provided in this paragraph (h), the provisions of this paragraph (h) shall
continue in full force and effect and no further consolidation, merger or other
transfer shall be made except in compliance with the provisions of this
paragraph (h).
(i)The User will (1) pay all amounts due after the dishonor of a drawing
request by or the insolvency of the Credit Obligor; and (2) not use the proceeds
of the Bonds in violation of Regulations G, T, U or X; and (c) will cause the
proceeds from (i) the sale of the Bonds, (ii) the remarketing of the Bonds and
(iii) from drawings on the Letter of Credit to be maintained in separate
accounts, segregated from each other and from any other funds provided by the
User to make payments on the Bonds or to reimburse the Credit Obligor.
ARTICLE 10
Events of Default and Remedies
SECTION 10.01 Events of Default
Any one or more of the following shall constitute an event of default (a
"User Agreement Default") under this Lease Agreement (whatever the reason for
such event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(1) default in the payment of any Basic Rental Payment when such
Basic Rental Payment becomes due and payable; or
(2) default in the performance, or breach, of any covenant or
warranty of the User in this Lease Agreement (other than a covenant or
warranty, a default in the performance or breach of which is elsewhere
in this Section specifically described), and the continuance of such
default or breach for a period of 30 days after there has been given,
by registered or certified mail, to the User and the Credit Obligor by
the Issuer or by the Trustee a written notice specifying such default
or breach and requiring it to be remedied and stating that such notice
is a "notice of default" hereunder; or
(3) the occurrence of an Act of Insolvency with respect to the
User;
(4) The occurrence of an event of default under any of the other
Financing Documents; or
(5) Receipt by the Trustee of written notice from the Credit
Obligor that an event of default has occurred and is continuing under
the Credit Documents or any other related documents to which the User
and the Credit Obligor are parties signatory thereto.
SECTION 10.02 Remedies on Default
Whenever any such User Agreement Default shall have happened and be
continuing, the Issuer or the Trustee may, with the consent of the Credit
Obligor, take any of the following remedial steps:
(1) Declare all installments of User Bond Payments for the
remainder of the Lease Term to be immediately due and payable,
whereupon the same shall become immediately due and payable;
(2) Reenter the Project, without terminating this Lease
Agreement, and, upon ten days' prior written notice to the User and
Credit Obligor, relet the Project or any part thereof for the account
of the User, for such term (including a term extending beyond the
Lease Term) and at such rentals and upon such other terms and
conditions, including the right to make alterations to the Project or
any part thereof, as the Issuer may, with the approval of the Trustee
and Credit Obligor, deem advisable, and such reentry and reletting of
the Project shall not be construed as an election to terminate this
Lease Agreement nor relieve the User of its obligations to pay Basic
Rent and Additional Rent or to perform any of its other obligations
under this Lease Agreement, all of which shall survive such reentry
and reletting, and the User shall continue to pay Basic Rent and all
Additional Rent provided for in this Lease Agreement until the end of
the Lease Term, less the net proceeds, if any, of any reletting of the
Project after deducting all of the Issuer's and Trustee's expenses in
connection with such reletting, including, without limitation, all
repossession costs, brokers' commissions, attorneys' fees, alteration
costs and expenses of preparation for reletting;
(3) Terminate this Lease Agreement, exclude the User from
possession of the Project and, if the Issuer or Trustee elects so to
do, lease the same for the account of the Issuer, holding the User
liable for all rent due up to the date such lease is made for the
account of the Issuer; or
(4) Take whatever legal proceedings may appear necessary or
desirable to collect the Rental Payments then due, whether by
declaration or otherwise, or to enforce any obligation or covenant or
agreement of the User under this Lease Agreement or by law.
SECTION 10.03 Availability of Remedies
(a) No remedy herein conferred upon or reserved to the Issuer or the
Trustee is intended to be exclusive of any other available remedy or remedies,
but each and every such remedy shall be cumulative and shall be in addition to
every other remedy given under this Lease Agreement or now or hereafter existing
at law or in equity or by statute. No delay or omission to exercise any right or
power accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof but any such right or power may be exercised
from time to time and as often as may be deemed expedient.
(b) In the event any agreement contained in this Lease Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder.
(c) All rights, remedies and powers provided by this Article may be
exercised only to the extent the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Article are intended to be subject to all applicable mandatory provisions of law
which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Lease Agreement invalid or
unenforceable.
SECTION 10.04 Agreement to Pay Attorneys' Fees and Expenses
In the event the User should default under any of the provisions of this
Lease Agreement and the Issuer or the Trustee (in its own name or in the name
and on behalf of the Issuer) should employ attorneys or incur other expenses for
the collection of Rental Payments or the enforcement of performance or
observance of any obligation or agreement on the part of the User herein
contained, the User will on demand therefor pay to the Issuer or the Trustee (as
the case may be) the reasonable fee of such attorneys and such other reasonable
expenses so incurred.
ARTICLE 11
OPTIONS
SECTION 11.01 Options to Terminate
The User shall have, if it is not in default hereunder, the option to
cancel or terminate the term of this Lease Agreement at any time after full
payment of the Indenture Indebtedness and termination of the Letter of Credit by
giving the Issuer notice in writing of such termination and such termination
shall forthwith become effective. This Lease Agreement may not be terminated
prior to payment in full of the Indenture Indebtedness even if all amounts due
hereunder have been paid in full.
SECTION 11.02 Option to Renew
There shall be no option to renew the term of this Lease Agreement.
SECTION 11.03 Option to Purchase Prior to Payment of the Bonds
(a)The User, if not in default hereunder, shall have the option to purchase
the Project at any time prior to the full payment of the Indenture Indebtedness
if any of the following shall have occurred:
(i) The Project or any part thereof shall have been damaged or
destroyed (A) to such extent that, in the opinion of the User, it cannot be
reasonably restored within a period of four consecutive months
substantially to the condition thereof immediately preceding such damage or
destruction, or (B) to such extent that, in the opinion of the User, the
User is thereby prevented from carrying on its normal operations at the
Project for a period of four consecutive months, or (C) to such extent that
the cost of restoration thereof would exceed by more than $100,000 the Net
Proceeds of insurance carried thereon pursuant to the requirements of this
Lease Agreement; or
(ii) Title to the Project or any part thereof or the leasehold estate
of the User in the Project created by this Lease Agreement or any part
thereof shall have been taken under the exercise of the power of eminent
domain by any governmental authority or person, firm or corporation acting
under governmental authority, which taking may result, in the opinion of
the User, in the User being thereby prevented from carrying on its normal
operations at the Project for a period of four consecutive months; or
(iii) As a result of any changes in the Constitution of the State or
the Constitution of the United States of America or of legislative or
administrative action (whether state or Federal), or by final decree,
judgment or order of any court or administrative body (whether state or
Federal) entered after the contest thereof by the User in good faith, this
Lease Agreement shall have become void or unenforceable or impossible of
performance in accordance with the intent and purpose of the parties as
expressed herein, or unreasonable burdens or excessive liabilities shall
have been imposed on the Issuer or the User, including without limitation,
the imposition of taxes of any kind on the Project or the income or profits
of the Issuer therefrom, or upon the interest of the User therein, which
taxes were not being imposed on the date of this Lease Agreement;
(b) To exercise such option, the User shall, within 30 days following the
event authorizing the exercise of such option, give written notice to the Issuer
and to the Trustee and shall specify therein the date of closing such purchase,
which date shall be not less than 30 days from the date such notice is mailed,
and shall make arrangements satisfactory to the Trustee for the giving of the
required notice for the redemption of the Bonds. The purchase price payable by
the User in the event of its exercise of the option granted in this Section
shall be that amount required to pay in full all Indenture Indebtedness and
shall be paid to the Trustee.
(c) Upon the exercise of the option granted in this Section and the payment
of the option price, any Net Proceeds of insurance or condemnation award then on
hand or thereafter received shall be paid to the User.
SECTION 11.04 Option to Purchase Project After Payment of the Indenture
Indebtedness
(a) The User shall have the option to purchase the Project at any time
following full payment of the Indenture Indebtedness for a purchase price of Ten
Dollars ($10) plus all expenses of the Issuer incurred in connection therewith.
To exercise the option granted in this Section, the User shall notify the Issuer
of its intention so to exercise such option prior to the proposed date of
purchase and shall on the date of purchase pay such purchase price to the
Issuer. The User may not purchase the Project prior to payment in full of all
Indenture Indebtedness even if all amounts due hereunder shall have been paid in
full.
(b) If the option granted in this Section shall for any reason be held
invalid upon the attempted exercise thereof by the User following full payment
of the Indenture Indebtedness, the Issuer hereby covenants and agrees to sell
the Project to the User at any time following full payment of the Indebtedness
and the Indenture Indebtedness for a price of ten dollars plus all expenses of
the Issuer incurred in connection therewith. The date of closing such purchase
shall be thirty days from the date of such holding. The covenants of the Issuer
in this Section 11.04 shall survive the termination of this Agreement and remain
in full force and effect until purchase of the Project is made by the User.
SECTION 11.05 Option to Purchase Portions of Project Site
(a) The User, if not in default hereunder, shall have the option to
purchase any Unimproved portion of the Project Site at any time and from time to
time with the prior written consent of the Trustee and for a purchase price
equal to the pro-rata cost of such portion of the Project Site to be so
purchased, provided that the User furnish the Issuer and the Trustee with the
following:
(1) A notice in writing containing (i) an adequate legal description
of that portion of the Project Site with respect to which such option is to
be exercised, which portion may include rights granted in party walls, the
right to "tie-into" existing utilities, the right to connect and join any
building, structure or improvement with existing structures, facilities and
improvements on the Project Site, and the right of ingress or egress to and
from the public highway which shall not interfere with the use and
occupancy of existing structures, improvements and buildings, and (ii) a
statement that the User intends to exercise such option to purchase such
portion of the Project Site on a date stated.
(2) A certificate of an Independent Engineer or of an Independent
Architect made and dated not more than 90 days prior to the date of the
purchase and stating that, in the opinion of the person signing such
certificate, (i) the portion of the Project Site with respect to which the
option is exercised is not needed for the operation of the then existing
Project and (ii) the severance of such portion of the Project Site and the
location or construction thereon of buildings, structures and improvements,
if any, will not impair the usefulness of the then existing Project or the
means of ingress and egress to and from the remaining portions of the
Project or impair or deny highway access, rail access or utility services
to such remaining portions of the Project.
(3) An amount of money equalthe purchase price computed as provided in
this Section, which amount shall be paid to the Trustee and applied to the
redemption of the Bonds in accordance with the terms thereof.
(b) Upon receipt of the notice and certificate required in this Section to
be furnished by the User and the payment by the User to the Trustee of the
purchase price, the Issuer will promptly deliver to the User the documents
referred to in Section 11.06.
(c) If such option relates to portions of the Project Site on which
transportation or utility facilities are located, the Issuer shall retain an
easement to use such transportation or utility facilities to the extent
necessary for the efficient operation of the Project.
(d) No purchase effected under the provisions of this Section shall affect
the obligation of the User for the payment of Rental Payments and other payments
in the amounts and at the times provided in this Lease Agreement or the
performance of any other agreement, covenant or provision hereof, and there
shall be no abatement or adjustment in Rental Payments by reason of the release
of any such portion of the Project Site and the obligations of the User shall
continue in all respects as provided in this Lease Agreement, excluding,
however, any portion of the Project Site so purchased.
SECTION 11.06 Conveyance of Exercise of Option to Purchase
At the closing of the purchase pursuant to the exercise of any option to
purchase granted herein, the Issuer shall upon receipt of the purchase price
deliver to the User documents conveying to the User the property with respect to
which such option was exercised, as such property then exists, subject to the
following: (a) all easements or other rights, if any, required to be reserved by
the Issuer under the terms and provisions of the option being exercised by the
User; (b) those liens and encumbrances, if any, to which title to said property
was subject when conveyed to the Issuer; (c) those liens and encumbrances
created by the User or to the creation or suffering of which the User consented;
and (d) those liens and encumbrances resulting from the failure of the User to
perform or observe any of the agreements on its part contained in this Lease
Agreement.
ARTICLE 12
Internal Revenue Code
SECTION 12.01 Covenants Regarding Section 103 and Sections 141-150 of
the Code
(a)The Issuer and the User do each hereby covenant and agree for the
benefit of the Owners that neither the Issuer nor the User will take any action,
omit to take any action, permit any action to be taken or fail to require any
action to be taken, which would cause the interest payable with respect to the
Bonds to be or become includable in gross income for federal income taxation.
Without limiting the generality of the foregoing, the User covenants and agrees
that (a) the proceeds of the Bonds shall not be used or applied in such manner
as to cause any Bond to be or become an "arbitrage bond" as that term is defined
in Section 148 of the Code, (b) ninety-five percent (95%) or more of the net
proceeds will be used for the acquisition, construction, reconstruction, or
improvement of land or property of a character subject to the allowance for
depreciation, within the meaning of Section 144(a) of the Code, (c) the proceeds
will be used solely for the acquisition and construction of the Project, which
shall constitute facilities solely for the manufacturing, including processing,
of tangible personal property, or for issuance expenses, or shall be rebated to
the United States of America as provided in this Lease Agreement and the
Indenture, and no part of the proceeds will be used by the User, directly or
indirectly, for working capital or to finance inventory, or to acquire any
facility or asset which may not be financed, in whole or in part, with the
proceeds of obligations the interest on which is excludable from gross income
for federal income taxation, (d) the net proceeds shall not be used for the
acquisition, construction, reconstruction or improvement of any property which
would cause the average maturity of the Bonds to exceed one hundred twenty
percent (120%) of the average reasonably expected economic life of the
facilities financed with the net proceeds of the Bonds, within the meaning of
Section 147(b) of the Code, (e) none of the net proceeds shall be used to
acquire (directly or indirectly) any land (or any interest therein) to be used
for farming purposes; (f) less than twenty-five percent (25%) of the net
proceeds shall be used to acquire (directly or indirectly) the Project Site or
any other land (or any interest therein), (g) none of the net proceeds shall be
used to acquire any property or any interest therein (including, without
limitation, buildings, structures, facilities, improvements, equipment,
machinery or other personal property) the first use of which property was not
pursuant to such acquisition with the proceeds, if such property is personal
property, and if such property is a building (and the equipment therefor),
unless "rehabilitation expenditures" are made with respect to such property in
an amount not less than fifteen percent (15%) of the cost of such property
financed with the proceeds of the Bonds within two years after the date such
property was acquired, all within the meaning of Section 147(d) of the Code; (h)
neither the Bonds nor any proceeds therefrom shall ever be federally guaranteed,
as such term is defined in Section 149(b) of the Code, except as expressly
permitted by said Section 149(b), (i) neither the User nor any related person
shall ever have allocated to it and outstanding tax-exempt facility-related
bonds (as such term is used in Section 144(a) (10) of the Code) in an aggregate
principal amount exceeding $40,000,000, (j) no party shall ever be allowed to
use or otherwise occupy or derive any benefit whatsoever from the Project, or
any part thereof, if the effect of the foregoing shall result in a test period
beneficiary (as defined in Section 144(a) (10) of the Code) having allocated to
it and outstanding in excess of $40,000,000 in aggregate principal amount of
tax-exempt facility related bonds, and (k) no more than two percent of the face
amount of the Bonds shall be used to pay issuance costs.
(b)The Issuer has elected and does hereby elect to have the provisions
relating to the $10,000,000 limit in Section 144(a)(4) of the Code apply to the
Bonds.
(c)The User covenants and agrees that (i) the limitation set forth in
Section 144(a)(4)(A) of the Code will not be exceeded during the applicable
six-year period with respect to "facilities" described in Section 144(a)(4)(B)
of the Code, and (ii) during such six-year period it will not make, or permit to
be made, "capital expenditures" (as described in Section 144(a)(4) of the Code
and applicable regulations thereunder) in an aggregate amount that would exceed
the limitation set forth in said Section.
(d)The Issuer and the User will each cooperate to assure compliance with
the
provisions of Section 12.03 of this Lease Agreement and Article XVII of the
Indenture.
SECTION 12.02 User's Obligation Upon Determination of Taxability
(a)Upon the occurrence of a Determination of Taxability the Trustee shall
notify the User in writing that all Outstanding Bonds with respect to which such
Determination of Taxability shall have occurred shall be subject to mandatory
redemption on the date specified by the Trustee in accordance with the Indenture
without regard to whether the User has violated any covenant or representation
in this Lease Agreement.
(b)Within seven days after receipt of such notice, the User shall pay to
the Trustee for the account of the Issuer, in immediately available funds, all
amounts necessary to pay in full the redemption price due in accordance with the
terms of the Bonds to be redeemed as a result of the occurrence of such
Determination of Taxability on the date on which such redemption is to be made.
There shall be credited against such payment otherwise required by this
paragraph all amounts which shall have been paid to the Trustee pursuant to the
Letter of Credit with respect to such redemption of the Bonds then Outstanding
with respect to which such Determination of Taxability shall have occurred.
SECTION 12.03 Federal Rebate Payments
The provisions of Article XVII of the Indenture are incorporated herein by
reference, and the User shall comply with said provisions and shall perform and
discharge all obligations, duties and responsibilities imposed upon the User
under said Article, including without limitation the payment of all required
rebates to the United States of America.
ARTICLE 13
Provisions of General Application
SECTION 13.01 Covenant of Quiet Enjoyment
So long as the User performs and observes all the covenants and agreements
on its part herein contained, it shall peaceably and quietly have, hold and
enjoy the Project during the Lease Term subject to all the terms and provisions
hereof.
SECTION 13.02 Investment of Funds
The Issuer shall cause any money held as a part of the Special Funds which
may by the terms of the Indenture be invested to be so invested or reinvested by
the Trustee solely at the request of, and solely as directed by, the User and as
provided in the Indenture.
SECTION 13.03 Issuer's Liabilities Limited
(a) The covenants and agreements contained in this Lease Agreement shall
never constitute or give rise to a personal or pecuniary liability or charge
against the general credit of the Issuer, and in the event of a breach of any
such covenant or agreement, no personal or pecuniary liability or charge payable
directly or indirectly from the general assets or revenues of the Issuer shall
arise therefrom. Nothing contained in this Section, however, shall relieve the
Issuer from the observance and performance of the covenants and agreements on
its part contained herein.
(b) No recourse under or upon any covenant or agreement of this Lease
Agreement shall be had against any past, present or future incorporator, officer
or member of the Board of Directors of the Issuer, or of any successor
corporation, either directly or through the Issuer, whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly understood that this Lease Agreement is
solely a corporate obligation, and that no personal liability whatever shall
attach to, or is or shall be incurred by, any incorporator, officer or member of
the Board of Directors of the Issuer or any successor corporation, or any of
them, under or by reason of the covenants or agreements contained in this Lease
Agreement.
SECTION 13.04 Prior Agreements
Excepting any deed, xxxx of sale, or other instrument by which the Project,
any part thereof, or any interest therein has been transferred and conveyed by
the User to the Issuer, this Lease Agreement shall completely and fully
supersede all prior agreements, both written and oral, between the Issuer and
the User relating to the acquisition of the Project Site, the construction of
the Improvements, the acquisition and installation of the Equipment, the leasing
of the Project and any options to purchase. Neither the Issuer nor the User
shall hereafter have any rights under such prior agreements, except as otherwise
herein provided, but shall look solely to this Lease Agreement for definition
and determination of all of their respective rights, liabilities and
responsibilities relating to the Project.
SECTION 13.05 Execution Counterparts
This Lease Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
SECTION 13.06 Binding Effect; Governing Law
(a) This Lease Agreement shall inure to the benefit of, and shall be
binding upon, the Issuer, the User and their respective successors and assigns.
(b) This Lease Agreement shall be governed exclusively by the applicable
laws of the State.
SECTION 13.07 Enforceability
In the event any provision of this Lease Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
SECTION 13.08 Article and Section Captions
The Article and Section headings and captions contained herein are included
for convenience only and shall not be considered a part hereof or affect in any
manner the construction or interpretation hereof.
SECTION 13.09 Notices
(a) Any request, demand, authorization, direction, notice, consent, or
other document provided or permitted by this Lease Agreement to be made upon,
given or furnished to, or filed with, the Issuer, the User, the Trustee or the
Credit Obligor shall be sufficient for every purpose hereunder if in writing and
(except as otherwise provided in this Lease Agreement) either (i) delivered
personally to the party or, if such party is not an individual, to an officer,
or other legal representative of the party to whom the same is directed
(provided that any document delivered personally to the Trustee must be
delivered to a corporate trust officer at its Principal Office during normal
business hours) at the hand delivery address specified in Section 1.10 of the
Indenture or (ii) mailed by first-class, registered or certified mail, postage
prepaid, addressed as specified in Section 1.10 of the Indenture. Any of such
parties may change the address for receiving any such notice or other document
by giving notice of the change to the other parties as provided in this Section.
(b) Any such notice or other document shall be deemed delivered when
actually received by the party to whom directed (or, if such party is not an
individual, to an officer, or other legal representative of the party) at the
address specified pursuant to this Section, or, if sent by mail, three days
after such notice or document is deposited in the United States mail, proper
postage prepaid, addressed as provided above.
SECTION 13.10 Amendment of Indenture and this Lease Agreement
(a) The Issuer will not cause or permit the amendment of the Indenture or
the execution of any amendment or supplement to the Indenture without the prior
written consent of the User and the Credit Obligor. The Issuer and the User
shall have no power to modify, alter, amend or terminate this Lease Agreement
without the prior written consent of the Credit Obligor. Prior to the payment in
full of the Indenture Indebtedness, the Issuer and the User shall have no power
to modify, alter, amend or terminate this Lease Agreement without the prior
written consent of the Trustee and then only as provided in the Indenture.
(b) This Lease Agreement may not be amended unless there has first been
delivered to the Trustee, the User and the Remarketing Agent an Opinion of Bond
Counsel that such action will not, whether solely or in conjunction with any
other fact or circumstance, cause the interest on the Bonds to be or to become
Taxable.
IN WITNESS WHEREOF, the Issuer and the User have each caused this Lease
Agreement to be executed, sealed and attested in its name by officers thereof
duly authorized thereunto, and the parties hereto have caused this Lease
Agreement to be dated March 1, 2001.
THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF XXXXXXXX
By Xxxxxxx Xxxxxxxx
------------------------------
Its Chairman
--------------------------
S E A L
Attest: Xxxxxxx Xxxxxx
----------------------------
Its Secretary
------------------------
QUALITY HOUSING SUPPLY, LLC
By
-----------------------------
Its
---------------------------
S E A L
Attest:
-----------------------------
Its
-------------------------
STATE OF ALABAMA )
XXXXXX COUNTY )
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that Xxxxxxx Xxxxxxxx, whose name as Chairman of The
Industrial Development Board of the City of Xxxxxxxx, a public corporation, is
signed to the foregoing Lease Agreement and who is known to me, acknowledged
before me on this day that, being informed of the contents of said Lease
Agreement, (s)he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.
Given under my hand and seal this the 20th day of March, 2001
--------------------------
Notary Public
NOTARIAL SEAL
My commission expires: 0-0-0000
XXXXX XX XXXXXXX )
WINSTON COUNTY )
I, the undersigned, a Notary Public in and for said County in said State,
hereby certify that Xxx X. Xxxxxx, whose name as President of Quality Housing
Supply, LLC, a Delaware limited liability company, is signed to the foregoing
Lease Agreement, and who is known to me, acknowledged before me on this day
that, being informed of the contents of said Lease Agreement, (s)he, as such
officer and with full authority, executed the same voluntarily for and as the
act of said corporation.
Given under my hand and seal this the 23rd day of March, 2001
Xxxxxxx Xxxxxxxxx
---------------------------
Notary Public
NOTARIAL SEAL
My commission expires: 1-15-2005
EXHIBIT A
TO
LEASE AGREEMENT
DATED MARCH 1, 2001
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF XXXXXXXX
AND
QUALITY HOUSING SUPPLY, LLC
Description of Real Property
A 20.21 acre tract of land situated in the South 1/2 of Northeast 1/4 of
Section 36, Township 10 South, Range 14 West, being Lot Number 17 and Lot Number
18 of the Bedford Industrial Park as recorded in the Probate Records of Xxxxxx
County, Alabama on October 14th, 1994 in Plat Cabinet "A", Slide A-42, more
particularly described as follows: Commence at the Southeast Corner of the
Southeast 1/4 of Northeast 1/4 of above said Section 36 and run S. 89 degrees 00
minutes W. along the Southerly boundary of said S1/2 of NE1/4 a distance of
1346.02 feet to a point; thence with a deflection angle to the right of 90
degrees 00 minutes, run N. 01 degrees 00 minutes W. a distance of 40 feet to the
Southwest Corner of the above said Lot 18 to a 1/2 inch capped iron pin, said
pin being the point of beginning of the tract herein described to-wit; thence
continue N. 01 degrees 00 minutes W. along the Westerly boundaries of above said
Lot 18 and Lot 17 a distance of 1160.00 feet to a 1/2 inch capped iron pin set
on the Southerly right-of-way of Bedford Drive, (total right-of-way of 80 feet);
thence with a deflection angle to the right of 90 degrees 00minutes, run N. 89
degrees 00 minutes E. along the Southerly right-of-way of said Bedford Drive and
the Northerly boundary of said Lot 17 a distance of 339.81 feet to the P.C. of a
curve to a 1/2 inch capped iron pin; thence continue along the Southerly
right-of-way of said Bedford Drive and the Northerly boundary of said Lot 17, in
a Southeasterly direction, along the arc of a curve to the right, (delta angle =
90 degrees 00 minutes, radius = 460.00 feet) a distance of 722.57 feet to the
P.T. to a 1/2 inch capped iron pin; thence continue along the Westerly
right-of-way of said Bedford Drive and the Easterly boundary of above said Xxx
00 xxx Xxx 00, X. 01 degrees 00 minutes E., a distance of 700.00 feet to a 1/2
inch capped iron pin; thence run S. 89 degrees 00 minutes W. along the Northerly
right-of-way of Park Road (total right-of-way of 40 feet) and the Southerly
boundary of said Lot 18, a distance of 798.00 feet to the point of beginning.
EXHIBIT B
TO
LEASE AGREEMENT
DATED MARCH 1, 2001
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF XXXXXXXX
AND
QUALITY HOUSING SUPPLY, LLC
EQUIPMENT LIST
Description of Personal Property and Fixtures
(a) All building materials, equipment, fixtures, tools, apparatus and
fittings of every kind or character now owned or hereafter acquired by Quality
Housing Supply, LLC for the purpose of, or used or useful in connection with,
the Project, wherever the same may be located, including, without limitation,
all lumber and lumber products, bricks, stones, building blocks, sand, cement,
roofing materials, paint, doors, windows, hardware, nails, wires, wiring,
engines, boilers, furnaces, tanks, motors, generators, switchboards, telephones,
telecopy, and other communication equipment and facilities, computers, printers,
copy machines, fire detection, suppression and extinguishment facilities,
elevators, escalators, plumbing, plumbing fixtures, air-conditioning and heating
equipment and appliances, electrical and gas equipment and appliances, stoves,
refrigerators, dishwashers, hot water heaters, garbage disposers, trash
compactors, other appliances, carpets, rugs, window treatments, lighting,
fixtures, pipes, piping, decorative fixtures, and all other building materials,
equipment and fixtures of every kind and character used or useful in connection
with the Project.
(b) The Personal Property and Fixtures described on the following pages.
