Exhibit (bb)
LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of March 1, 1995 is entered into by THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HALEYVILLE, ALABAMA, a public
corporation organized under the laws of the State of Alabama (the "Issuer"), and
Wheel House Properties, Inc., an Alabama corporation (the "Corporation").
Recitals
The Issuer has duly authorized the issuance of its revenue bond (the
"Bond") under and pursuant to a Mortgage and Indenture dated as of March 1, 1995
(the "Indenture") between the Issuer and SouthTrust Bank of Xxxxxx County, a
banking corporation with its principal office in the City of Xxxxxxxx, Alabama
(the "Bondholder").
The Bond to be issued under the Indenture shall be issued as a single
bond in the principal amount of $1,100,000 and shall be designated Industrial
Development Revenue Bond (Wheel House Properties, Inc. Project) (the "Bond").
The proceeds of the Bond shall be applied by the Issuer to pay the costs of
acquiring certain real property and acquiring, constructing and installing
improvements, structures, facilities, fixtures and related personal property
thereon for the manufacturing, processing and assembling of manufactured housing
and related products (such real property, improvements, structures, facilities,
fixtures, and related personal property being hereinafter referred to as the
"Project").
Pursuant to this Lease Agreement the Issuer has agreed to lease the
Project to the Corporation and the Corporation has agreed to pay rentals to the
Issuer at times and in amounts sufficient to pay when due the principal of and
interest on the Bond.
The Bond shall be a limited obligation of the Issuer payable solely out
of the rentals payable by the Corporation pursuant to this Lease Agreement and
any other revenues, rentals or receipts derived by the Issuer from the leasing
or sale of the Project. Pursuant to the Indenture, as security for the payment
of the Bond, the Issuer shall assign and pledge to the Bondholder all right,
title and interest of the Issuer in and to this Lease Agreement (except for
certain rights to indemnification and reimbursement of expenses granted to the
Issuer) and shall mortgage the Project to the Bondholder. As additional security
for the payment of the Bond the Corporation has guaranteed the payment of the
Bond pursuant to a Bond Guaranty Agreement dated as of March 1, 1995 (the
"Guaranty") to the Bondholder.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto covenant, agree and bind
themselves as follows:
ARTICLE 1ARTICLE 1
Definitions and Other Provisions
of General Application
SECTION 1.01......Definitions
For all purposes of this Lease Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(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.
(5) The term "person" shall include any individual, corporation,
partnership, joint venture, association, trust, unincorporated organization and
any government or any agency or political subdivision thereof.
Authorized Corporation Representative shall have the meaning assigned
thereto in the Indenture.
Authorized Issuer Representative shall have the meaning assigned
thereto in the Indenture.
Basic Rent shall mean that portion of the rent payable under Section
5.02(a) hereof.
Bond shall mean the Bond executed and delivered pursuant to the
Indenture.
Bondholder shall mean the person named as the "Bondholder" in the
recitals to this instrument and its successors and assigns, as the registered
owner of the Bond.
Bond Payment Date shall mean a date on which any installment of the
principal of (and premium, if any) or interest on the Bond is due and payable,
whether at the stated maturity or due date or on a date fixed for optional or
mandatory redemption or prepayment of the Bond.
Bond Register shall mean the register or registers for the registration
and transfer of the Bond maintained by the Issuer pursuant to Section 4.04 of
the Indenture.
Business Day shall mean a day, other than a Saturday or Sunday, on
which commercial banking institutions are open for business in the State.
Construction Fund shall mean the fund established pursuant to Section
5.02 of the Indenture.
Corporation shall mean Wheel House Properties, Inc., an Alabama
corporation, and its successors and assigns.
Counsel shall mean a person qualified to practice law in any State of
the United States or in the District of Columbia who shall be appointed by the
Corporation and acceptable to the Bondholder.
Enabling Law shall mean Division 1, Article 4, Chapter 54, Title 11
(Section 11-54-80 et seq.) of the Code of Alabama 1975.
Engineer shall mean a person qualified to practice as an engineer under
the laws of the State, who shall be appointed by the Corporation and acceptable
to the Bondholder.
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 Corporation or the
Project Site (including, but not limited to, 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.
ERISA shall mean the Employee Retirement Income Security Act of 1974,
as amended.
Event of Default shall have the meaning assigned in Article 10. An
Event of Default shall "exist" if an Event of Default shall have occurred and be
continuing.
Federal Securities shall mean direct obligations of, or obligations the
payment of which is guaranteed by, the United States of America.
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, but not
limited to, 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.
Guaranty shall have the meaning assigned in the recitals to this
instrument.
Improvements shall have the meaning assigned in Demising Clause II.
Indenture shall mean that certain Mortgage and Indenture dated as of
March 1, 1995 between the Issuer and the Bondholder, including any amendments or
supplements to such instrument.
Independent, when used with respect to any person, shall mean a person
who (1) is in fact independent, (2) does not have any direct financial interest
or any material indirect financial interest in the Corporation, the Issuer or in
any other obligor upon the Bond or in any related party of the Corporation, the
Issuer or such other obligor, and (3) is not connected with any of the
Corporation, the Issuer or such other obligor as an officer, employee, partner,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Issuer shall mean the person named as the "Issuer" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of the Indenture, and thereafter
"Issuer" shall mean such successor corporation.
Lease Agreement shall mean this instrument, including any amendments or
supplements hereto.
Lease Payments shall mean and include all payments of whatever nature
or purpose to be made by the Corporation hereunder and all financial obligations
of the Corporation undertaken hereby, and shall include, without limiting the
generality of the foregoing, all amounts to be paid pursuant to Sections 5.02,
5.04 and 6.06 hereof.
Lease Term shall mean the duration of the leasehold estate granted in
Section 5.01 of this Lease Agreement.
Municipality shall mean the City of Haleyville, Alabama.
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
Bondholder) incurred in the collection of such gross proceeds.
Paying Agent shall mean any person authorized by the Issuer to pay the
principal of (and premium, if any) or interest on the Bond on behalf of the
Issuer.
Permitted Encumbrances shall mean: (1) this Lease Agreement (2) liens
for taxes, assessments and other governmental charges that are not delinquent or
are currently being contested in good faith by appropriate proceedings and for
which adequate reserves have been established by the Corporation, (3)
mechanics', workmen's, repairmen's, materialmen's, warehouseman's and carrier's
liens and other similar liens for charges which are not delinquent or which are
being contested in good faith by appropriate proceedings and for which, in the
opinion of the Bondholder, adequate reserves have been established by the
Corporation, and (4) such minor defects, irregularities and encumbrances as do
not, in the opinion of Bondholder, in the aggregate materially impair the use of
the Project, taken as a whole, for the purposes for which it is held by the
Issuer.
Project shall mean the collectively the Project Site, the Improvements,
the Equipment, 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 acquiring, construction, installation or equipping, of the
Improvements,
(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 Bond until the Project is placed
in service,
(7) expenses incurred by the Issuer and the Corporation in
connection with the financing of the Project, including legal, consulting and
accounting fees,
(8) reimbursement to the Corporation 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 estate described in Demising Clause I.
Qualified Investments shall have the meaning assigned in the Indenture.
Special Funds shall mean the Construction Fund and any other fund or
account established pursuant to the Indenture.
State shall mean the State of Alabama.
Unimproved when used with reference to the Project Site means any part
or parts of the Project Site upon the surface of which no part of a building or
other structure rests.
SECTION 1.02......Date of Lease Agreement
The date of this Lease Agreement is intended as and for a date for the
convenient identification of this Lease Agreement and is not intended to
indicate that this Lease Agreement was executed and delivered on said date.
SECTION 1.03......Separability Clause
If any provision in this Lease Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1.04......Effect of Headings and Table of Contents
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.05......Successors and Assigns
All covenants and agreements in this Lease Agreement by the Issuer or
the Corporation shall bind their respective successors and assigns whether so
expressed or not.
SECTION 1.06......Governing Law
This Lease Agreement shall be construed in accordance with and governed
by the laws of the State.
SECTION 1.07......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 1.08......Covenant of Quiet Enjoyment
So long as the Corporation 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 1.09....Issuer's Liabilities Limited
This Lease Agreement is entered into under and pursuant to the
provisions of the Enabling Law. No provision hereof shall be construed to impose
a charge against the general credit of the Issuer or any personal or pecuniary
liability upon the Issuer except to apply the proceeds to be derived from the
sale of the Bond and the revenues and receipts to be derived from any leasing or
sale of the Project or any part thereof as provided herein and in the Indenture.
SECTION 1.10......Prior Agreements Canceled
This Lease Agreement shall completely and fully supersede the
Inducement Agreement dated October 12, 1994 and all other prior agreements, both
written and oral, between the Issuer and the Corporation relating to the
acquisition and construction of the Project, the leasing of the Project and any
options to renew or to purchase; excepting however (a) any deed or other
instrument by which the Project Site, or any part thereof, or any interest
therein,has been transferred and conveyed to the Issuer and (b) the Abatement
Agreement dated October 12, 1994 and any other agreement between the Issuer and
the Corporation providing for applicable State tax exemptions to apply to the
Corporation and the Project. Neither the Issuer nor the Corporation shall
hereafter have any rights under such prior agreements 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 1.11......Notices
All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when delivered or mailed by
registered or certified mail, postage prepaid, addressed as follows:
(1) if to the Issuer, at Xxxx Xxxx, Xxxxxxxxxx, Xxxxxxx 00000;
(2) if to the Corporation, at P. O. Xxx 000, Xxxxxxxxxx, Xxxxxxx 00000;
(3) if to the Bondholder, at P. O. Xxx 0000, Xxxxxxxx, Xxxxxxx 00000.
A duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Corporation to the other shall also be
given to the Bondholder. The Issuer, the Corporation and the Bondholder may, by
notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates or other communications shall be sent.
SECTION 1.12......The Special Funds
(a) The Issuer shall cause any money held as a part of the Special
Funds to be invested or reinvested in Qualified Investments at the request of,
and as directed by, the Corporation.
(b) If, after full payment of the Bond, there is any surplus remaining
in the Special Funds, the Issuer will promptly pay such surplus to the
Corporation.
ARTICLE 2
Representations and Warranties
SECTION 2.01.Representations by the Issuer
The Issuer makes the following representations:
(1) The Issuer is duly organized under the provisions of the Enabling
Law and has the legal authority and 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, as the same may have at any time been amended, its
bylaws or the laws of the State. By proper corporate action the Issuer has duly
authorized the execution and delivery of this Lease Agreement.
(2) The Issuer has determined that the issuance of the Bond, the
acquisition, construction, and equipping of the Project and the leasing of the
same to the Corporation will be in furtherance of the purposes of the Issuer's
incorporation and the Enabling Law.
(3) The Bond will be issued and delivered contemporaneously
with the delivery of this Lease Agreement.
Representations by the Corporationntations by the Corporation
The Corporation makes the following representations:
(1) The Corporation is duly incorporated under the laws of the State
and is duly qualified to do business in the State, is not in violation of any
provisions of its certificate of incorporation, its by-laws, or the laws of the
State, has power to enter in to this Lease Agreement, and by proper corporate
action has duly authorized the execution and delivery of this Lease Agreement.
(2) The financing of the Project through the issuance of the Bond and
the leasing of the Project to the Corporation has induced the Corporation to
locate the Project in the State and thereby enlarge, expand and improve its
existing operations in the State.
(3) The Corporations intends to operate the Project for the
manufacturing, processing, storing, warehousing and distributing of manufactured
housing and related products and in such a manner that it will constitute a
"project" within the meaning of the Enabling Law.
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
Corporation to be paid, kept and performed, does hereby assign, demise and lease
to the Corporation, and the Corporation does hereby accept, lease, take and hire
from the Issuer, the following property:
I.
The following described real property located in Xxxxxx County,
Alabama, within the corporate limits of the Municipality (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:
A parcel of land lying and being situated in the SW 1/4-SE 1/4 of
Section 26, Township 9 south, Range 11 xxxx, Xxxxxx County, Alabama and
being more particularly described as follows: Commence at a 1" square
steel tube marking the Northeast corner of SW 1/4-SE 1/4 and run thence
S-00E 47' 50"-E along the east line of SW 1/4-SE 1/4 a distance of
425.50 feet to a 1/2" capped iron pin in a county road and being the
point of beginning; thence continue S-00E 47' 50"-E along the east line
of SW 1/4-SE 1/4 a distance of 553.25 feet to a 1" square steel tube on
the north right of way of railroad; run thence N-75E 30' 27"-W along
said right of way a distance of 712.85 feet to a 1/2" capped iron pin;
run thence N-05E 47' 42"-E a distance of 338.69 feet to a 1/2" capped
iron pin in the center of a road, being a point on a curve concave to
the left and having a central angle of 17E 37' 40" left, a radius of
1273.26 feet and a arc of 391.73 feet; run thence S-89E 12' 56"-E along
said curve a distance of 377.51 feet chord and a arc of 378.90 feet to
a 1/2" capped iron pin marking the P.T. thereof, and being the P.C. of
a curve concave to the left and having a central angle of 6E 10' 02"
left, a radius of 1961.03 feet and a arc of 211.08 feet; run thence
N-79E 10' 32"-E along said curve a distance of 210.98 feet chord and a
arc of 211.08 feet to a 1/2" capped iron pin marking the P.T. thereof;
run thence N-86E 57' 30"-E a distance of 63.67 feet to the point of
beginning. Containing 6.59 acres, more or less.
II.
All buildings, structures, improvements and fixtures now or hereafter
constructed, situated or located on the Project Site, as the same may at any
time exist (the "Improvements").
III.
The machinery, equipment, personal property and fixtures described on
Exhibit A attached hereto and all other machinery, equipment, personal property
and fixtures acquired with the proceeds of the Bond or with funds advanced or
paid by the Corporation 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
The Project
SECTION 4.01......Acquisition of Project; Payment of Excess
(a) The Issuer will acquire, construct and install the Project at the
direction of the Corporation and from the principal proceeds derived from the
sale of the Bond the Issuer will pay all Project Costs.
(b) The Issuer and the Corporation 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, construction, and equipping
of the Project and payments to be made out of the Construction Fund. One of the
agents appointed by the Corporation shall be designated its Project Supervisor.
Either the Issuer or the Corporation may from time to time, by written notice
also filed with the Bondholder, revoke, amend or otherwise limit the authority
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 Corporation, with reference to all the foregoing matters. In
the event that the Issuer is unavailable or unable to issue, or, after
reasonable request made to the Issuer by the Corporation, the Issuer fails or
refuses to issue, a payment requisition from the Construction Fund for payment
of any Project Costs, the Project Supervisor then designated by the Corporation,
who is hereby irrevocably appointed as agent for the Issuer for such purposes,
may issue and execute, also for and in the name and behalf of the Issuer and
without any approval of any officer, employee or other agent thereof, a payment
requisition on the Construction Fund.
(c) The Issuer will continue such acquisition, construction and
installation with all reasonable dispatch and due diligence and will cause the
Project to be completed in accordance with the final approved plans and
specifications therefor as promptly as practicable. The Corporation will
promptly give written instructions with respect to, and will request the Issuer
to enter into, such contracts and purchase orders for material, supplies, and
equipment, and will take whatever other action may be provided for in this Lease
Agreement, as shall be necessary to complete the Project as aforesaid. The
Issuer will assume or accept the assignment of such contracts and purchase
orders entered into by the Corporation prior to the execution and delivery of
this Lease Agreement for the acquisition, construction and equipping of the
Project, all as the Corporation may request. The Issuer will not execute any
contracts or purchase orders for the Project without the prior written consent
of the Corporation.
(d) The Corporation may cause changes or amendments to be made in said
final plans and specifications for the Project and in the list of machinery,
equipment and personal property for the Project, provided that (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 Project as may be requested in writing by the
Corporation.
(e) 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 Corporation and
the Issuer does not assume any responsibility or give any assurance with respect
to any possible exemption from sales and use taxes. In any event, there shall be
printed, stamped, endorsed or otherwise noted on each purchase order or contract
for any part of the Project a legend reading substantially as follows:
"LIMITED LIABILITY OF BOARD. Any property acquired by The Industrial
Development Board of the City of Haleyville, Alabama (the "Board")
pursuant to this contract or purchase order will become a part of an
industrial project (the "Project") leased or to be leased by Wheel
House Properties, Inc., an Alabama corporation. The Board's liability
for the payment of any moneys that may come due under this contract or
purchase order is limited solely to (1) the available proceeds of the
Board's revenue bonds, if and when issued for the Project, (2) any
moneys made available to the Board for such payment, and (3) any
revenues, rentals or receipts derived by the Board from the leasing or
sale of the Project or any part thereof."
(f) In the event proceeds of the Bond are insufficient to pay in full
all Project Costs, the Corporation shall complete the acquisition, construction
and installation of the Project at its own expense and the Corporation shall pay
any such deficiency and shall save the Issuer whole and harmless from any
obligation to pay such deficiency. The Corporation shall not by reason of the
payment of such deficiency from its own funds be entitled to any diminution in
the payment of the rents hereunder, nor shall the rent be increased as a result
of such payments.
SECTION 4.02......No Warranty of Suitability by Issuer
THE CORPORATION RECOGNIZES THAT SINCE THE PLANS, SPECIFICATIONS AND
DIRECTIONS FOR ACQUIRING, CONSTRUCTING AND INSTALLING 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 CORPORATIONS'S PURPOSES OR
NEEDS OR THAT THE PROCEEDS DERIVED FROM THE SALE OF THE BOND WILL BE SUFFICIENT
TO PAY IN FULL ALL PROJECT COSTS.
SECTION 4.03......Issuer to Pursue Remedies Against Vendors,
Contractors and Subcontractors and Their Sureties
In the event of default of any vendor, contractor or subcontractor
under any contract or purchase order made by it for acquisition, construction or
installation of the Project, the Issuer will promptly proceed (subject to the
Corporation's advice to the contrary), either separately or in conjunction with
others, to exhaust the remedies of the Issuer against the vendor, contractor or
subcontractor so in default and against his surety (if any) for the performance
of such contract or purchase order. The Issuer will advise the Corporation of
the steps it intends to take in connection with any such default and the
Corporation will pay all costs, fees and expenses incurred which are not paid
from the Construction Fund. If the Corporation shall so notify the Issuer, the
Corporation 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 such
vendor, contractor, subcontractor or surety which the Corporation deems
reasonably necessary, and in such event the Issuer will cooperate fully with the
Corporation and will take all action necessary to effect the substitution of the
Corporation for the Issuer 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.
SECTION 4.04......Completion of the Project
(a) The completion of the Project shall be evidenced to the Bondholder
by a certificate signed by an Authorized Issuer Representative and an Authorized
Corporation Representative stating that (1) construction and installation of the
Improvements constituting a part of the Project has been completed in accordance
with the plans and specifications approved by the Corporation, (2) all personal
property and fixtures constituting a part of the Project have been acquired and
installed in accordance with the Corporation's instructions, (3) all labor,
services, materials and supplies in connection with such construction,
acquisition and installation have been paid for, and (4) all facilities
necessary in connection with the Project have been constructed, 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 Corporation will cooperate with each other in causing such
certificate to be furnished to the Bondholder.
(b) After the delivery of the aforesaid certificate to the Bondholder,
any moneys then remaining in the Construction Fund shall be applied as provided
in Section 5.04 of the Indenture.
SECTION 4.05......Title Insurance
(a) The Corporation shall pay the cost of obtaining a title insurance
policy in an amount equal to the principal amount of the Bond, insuring the
first mortgage in the Project created by the Indenture. Such policy of insurance
shall be taken out in a generally recognized responsible insurance company,
qualified under the laws of the State to assume the risks undertaken, and shall
name the Bondholder as the insured. Any proceeds of such title insurance shall
be applied to the prepayment of the Bond on the earliest Business Day for which
the required notice may be given, as provided in the Bond.
ARTICLE 5
Duration of Lease Term
and Rental Provisions
SECTION 5.01......Duration of Term
(a) The term of this Lease Agreement 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 February 28, 2035.
(b) Upon payment in full of the Bond and all fees and expenses of the
Bondholder and any Paying Agent, the Corporation shall be entitled to the use
and occupancy of the Project from the date of such payment until the expiration
of the Lease Term without the payment of any further rent under Article 5
hereof, provided, all references in this Lease Agreement to the Bond, the
Indenture and the Bondholder shall be ineffective and the Bondholder shall not
thereafter have any rights hereunder, saving and excepting those that shall have
theretofore vested, but otherwise such use and occupancy of the Project by the
Corporation shall be on all of the terms and conditions hereof, except that the
Corporation shall not be required to carry any insurance for the benefit of the
Bondholder.
SECTION 5.02......Rental and Payment Provisions; Net Lease
(a) Basic Rent. Not later than each Bond Payment Date, the Corporation
shall pay to the Bondholder in immediately available funds for the account of
the Issuer an amount equal to the principal of and interest on the Bond maturing
and coming due on such Bond Payment Date (herein called "Basic Rent").
(b) Additional Rent. The Corporation shall pay as additional
rent to the Bondholder the reasonable fees, charges and expenses of the
Bondholder for necessary services rendered by it and expenses incurred by it
under the Indenture, as and when the same become due.
(c) Prepayment of the Bond. The Corporation acknowledges and agrees
that prepayment of the Bond is required in certain events, and the Corporation
hereby covenants and agrees to make available to the Issuer for such prepayment
all funds required to be so provided in such events.
(d) Net Lease. The Corporation recognizes, acknowledges and agrees that
it is the intention hereof that this Lease Agreement be a net lease and that
until the Bond is fully paid Basic Rent shall be in such amounts and shall be
due at such times as shall be required to pay the installments of principal of
and interest on the Bond as the same mature and become due and payable and all
additional rent shall be available for the purposes specified therefor. This
Lease Agreement shall be construed to effectuate such intent.
SECTION 5.03......Advances by Issuer or Bondholder
In the event that the Corporation fails to perform or observe any of
its covenants in this Lease Agreement, the Issuer or the Bondholder, after first
notifying the Corporation of any such failure may (but shall not be obligated
to) make advances to effect performance or observance of such covenants on
behalf of the Corporation. All amounts so advanced therefor by the Issuer or the
Bondholder, together with interest thereon from the date of advancement at New
York Prime Rate (as defined in the Bond) per annum or the maximum rate of
interest allowed by law, whichever is less, shall become an additional
obligation payable by the Corporation to the Issuer or to the Bondholder upon
demand and secured hereby.
SECTION 5.04......Indemnity of Issuer and Bondholder
(a) The Corporation agrees to pay, and to indemnify and hold the Issuer
and the Bondholder harmless against, any and all liabilities, losses, damages,
claims or actions (including all reasonable attorneys' fees and expenses of the
Issuer or the Bondholder, as the case may be), of any nature whatsoever incurred
by the Issuer or the Bondholder, as the case may be, without gross negligence on
its part, arising from or in connection with the ownership of any interest in
the Project or the leasing thereof and granting of security interests therein,
or its performance or observance of any covenant or condition on its part to be
observed or performed under this Lease Agreement or the Indenture, including
without limitation, (1) 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, (2)
any damage, injury, loss or destruction of the Project, (3) any other act or
event occurring upon, or affecting, any part of the Project, (4) violation by
the Corporation of any contract, agreement or restriction affecting the Project
or the use thereof or of any law, ordinance or regulation affecting the Project
or any part thereof or the ownership, occupancy or use thereof, and (5)
liabilities, losses, damages, claims or actions arising out of the offer and
sale of the Bond or a subsequent sale of the Bond or any interest therein,
unless the same resulted from a representation or warranty of the Issuer in this
Lease Agreement or any certificate delivered by the Issuer 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
Corporation furnished to the Issuer in connection therewith. The covenants of
indemnity by the Corporation contained in this Section shall survive the
termination of this Lease Agreement.
(b) The Corporation hereby agrees that (1) the Issuer shall not incur
any liability to the Corporation, and (2) the Issuer shall be indemnified
against all liabilities with respect to any action taken by the Issuer in
exercising or refraining from asserting, maintaining or exercising any right,
privilege or power of the Issuer under the Indenture if the Issuer is acting in
good faith and without gross negligence or in reliance upon a written request by
the Corporation.
(c) The Corporation further agrees to indemnify the Bondholder for, and
to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
exercise or performance of any of its powers, rights, or duties under the
Indenture.
SECTION 5.05......Obligations of Corporation Unconditional.
(a) The obligations of the Corporation to make all rental and other
payments required under Section 5.02 hereof and the other provisions of this
Lease Agreement 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 the Corporation might
otherwise have against the Issuer or the Bondholder. The Corporation 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 this Lease
Agreement for any cause whatsoever, including, without limiting the generality
of the foregoing, failure of the Issuer to complete the Project; any acts or
circumstances that may constitute an eviction or constructive eviction; failure
of consideration or commercial frustration of purpose; the invalidity of, or of
any provision contained in, this Lease Agreement, the Indenture or the Bond; or
any damage to or destruction of the Project or any part thereof, or the taking
by eminent domain of title to or the right to temporary use of all or any part
of the Project; or 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, or any duty, liability or obligation arising out of or in connection
with this Lease Agreement. Notwithstanding the foregoing, the Corporation 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 Corporation 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 5.05
shall apply only so long as the Bond remains outstanding.
ARTICLE 6
Maintenance, Alterations, Replacements, Insurance; and Environmental Compliance
SECTION 6.01......Maintenance and Repairs
(a) The Corporation will, at its own expense, (1) keep the Project in
as reasonably safe condition as operations permit, (2) from time to time make
all necessary and proper repairs, renewals and replacements thereto, and (3) pay
all gas, electric, water, sewer and other charges for the operation,
maintenance, use and upkeep of the Project.
(b) The Corporation will not permit any mechanics' or other liens to
stand against the Project or the Project Site for labor or material furnished
it. The Corporation may, however, in good faith contest any such mechanics' or
other liens and in such event may permit any such liens to remain unsatisfied
and undischarged during the period of such contest and any appeal therefrom
unless by such action the lien of the Indenture on the Project or any part
thereof, or the Project or any part thereof shall be subject to loss or
forfeiture, in either of which events such mechanics' or other liens shall be
promptly satisfied.
(c) The Corporation may, at its own expense, make structural changes,
additions, improvements, alterations or replacements to the Improvements that
they may deem desirable, provided that the Corporation demonstrate to the
satisfaction of the Bondholder that such additions, improvements, alterations or
replacements will not adversely affect the utility of the Project or
substantially reduce its value and will not change the character of the Project
as a "project" under the Enabling Law. In lieu of making such additions,
improvements or alterations itself, the Corporation may furnish to the Issuer
the funds necessary therefor, in which case the Issuer will proceed to make such
changes, additions, improvements, alterations or replacements. All such changes,
additions, improvements, alterations and replacements whether made by the
Corporation or the Issuer shall become a part of the Project and shall be
covered by this Lease Agreement and the Indenture.
(d) The Corporation 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 the Corporation on real property adjacent to
the Project Site. The Corporation 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 Corporation, 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 Corporation 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 with the Project, the Corporation
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 Corporation will at its 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 (d), the Corporation shall
demonstrate to the satisfaction of the Bondholder that the operation of the
Project will not be adversely affected thereby.
(e) The Issuer will also, upon request of the Corporation, 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; 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
The Issuer and the Corporation recognize that portions of the Equipment
may from time to time become inadequate, obsolete, wornout, unsuitable,
undesirable or unnecessary in the operation of the Project, but the Issuer shall
not be under any obligation to renew, repair or replace any such Equipment. If
the Corporation in its sole discretion determines that any item of Equipment has
become inadequate, obsolete, wornout, unsuitable, undesirable or unnecessary in
the operation of the Project, the Corporation may remove such Equipment from 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
Bondholder therefor, provided that the Corporation shall either substitute and
install in or on the Project Site other personal property or fixtures having
equal or greater utility (but not necessarily the same value or function) in the
operation of the Project, which such substituted personal property or fixtures
shall be: (a) free of all liens and encumbrances, (b) the sole property of the
Issuer, and (c) a part of the Equipment subject to the demise hereof and to the
lien of the Indenture held by the Corporation on the same terms and conditions
as the items originally comprising the Equipment; provided, however, such
removal and substitution shall not impair the operating unity of the Project or
change the nature of the Project as a "project" under the Enabling Law.
SECTION 6.03......Taxes, Other Governmental Charges and Utility Charges
(a) The Corporation will pay, as the same respectively become due, (1)
all taxes and governmental charges of any kind whatsoever that may at any time
be lawfully assessed or levied against or with respect to the Project or any
other property installed or brought by the Corporation on the Project Site,
including without limitation any taxes levied on or with respect to the
revenues, income or profits of the Issuer from the Project and any other taxes
levied upon or with respect to the Project which, if not paid, will become a
lien on the Project prior to or on a parity with the lien of the Indenture or a
charge on the revenues and receipts from the Project prior to or on a parity
with the charge thereon and pledge or assignment thereof created and made in the
Indenture and including any ad valorem taxes assessed upon the Corporation's
interest in the Project, and (2) all assessments and charges lawfully made by
any governmental body for public improvements that may be secured by a lien on
the Project, provided, that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of
years, the Corporation shall be obligated to pay only such installments as are
required to be paid during the Lease Term. The foregoing provisions of this
Section shall be effective only so long as any part of the principal of or the
interest on the Bond remains outstanding and unpaid.
(b) The Corporation may, at its expense and in its name and behalf or
in the name and behalf of the Issuer, in good faith contest any such taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments or other charges so contested to remain unpaid during the
period of such contest and any appeal therefrom, provided that during such
period enforcement of such contested items shall be effectively stayed. The
Issuer, at the expense of the Corporation, will cooperate fully with the
Corporation in any such contest.
SECTION 6.04......Insurance Required
(a) The Corporation 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 replacement cost of
the Project, unless the insurer certifies to the Bondholder that the
insured amount will be sufficient to pay the Bond in full after giving
effect to any co-insurance provision, against loss or damage by fire,
tornado and windstorm, 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 $2,000,000 combined single limit for
any one occurrence and $2,000,000 in the aggregate for any one year.
(3) Flood insurance under the national flood insurance program
established by the Flood Disaster Protection Act of 1973, as at any
time amended, at all times while the Project is eligible under such
program, in a amount at least equal to the unpaid principal amount of
the Bond or to the maximum limit of coverage made available with
respect to the Project under said Act, whichever is less.
(4) 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 Corporation may satisfy
their 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.
(5) Use and occupancy insurance (or business interruption or
risk insurance) covering suspension or interruption of the
Corporation'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 Basic
Rent, additional rent and other payments under Section 5.02 hereof
during the then current or any subsequent year.
(b) All policies evidencing the insurance required by the terms of this
Section 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 insureds
the Issuer, the Bondholder and the Corporation (as their respective interests
shall appear) and shall contain standard mortgage clauses providing for all
losses thereunder in excess of $25,000 to be paid jointly to the Bondholder and
the Corporation; provided that all losses (including those in excess of $25,000)
may be adjusted by the Corporation, subject, in the case of any single loss in
excess of $25,000, to the approval of the Bondholder. The Corporation 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
Corporation may not, without the consent of the Bondholder, cancel or materially
amend such insurance or sell, assign or dispose of any interest in such
insurance, such policy or any proceeds thereof, (2) such insurer will notify the
Issuer and the Bondholder if any premium shall not be paid when due or any such
policy shall not be renewed prior to the expiration thereof, and (3) such
insurer shall not cancel any such policy except on thirty (30) days' prior
written notice to the Issuer and the Bondholder.
(d) All policies evidencing the insurance required to be carried by
this Section shall be deposited with the Bondholder; provided, however, that in
lieu thereof the Corporation may deposit with the Bondholder a certificate or
certificates of the respective insurers attesting the fact that such insurance
is in force and effect. Prior to the expiration of any such policy, the
Corporation will furnish to the Bondholder evidence reasonably satisfactory to
the Bondholder that such policy has been renewed or replaced by another policy
or that there is no necessity therefor under this Lease Agreement.
(e) Anything in this Section to the contrary notwithstanding, the
Corporation shall have the right to change insurers from time to time as it
deems necessary or desirable.
SECTION 6.05......Installation By Corporation of Own Machinery and
Equipment
The Corporation may, at its own expense, install in the Improvements or
on the Project Site any personal property or fixtures which in the judgment of
the Corporation will facilitate the operation of the Project. Any such personal
property or fixtures which is so installed and does not constitute a
substitution or replacement for the Equipment pursuant to Section 6.02 hereof
shall be and remain the property of the Corporation and may be removed by the
same at any time and from time to time while there is no default under the terms
of this Lease Agreement; provided, however, that any damage to the Project
occasioned by such removal shall be repaired by the party removing such property
at its own expense.
SECTION 6.06......Environmental Compliance
(a) The Corporation shall (1) not, and shall not permit any other
person to, bring any Hazardous Substances onto the Project Site except any such
Hazardous Substances that are used in the ordinary course of the business as to
be conducted on the Project Site and that are handled, stored, used and disposed
of in accordance with applicable Environmental Laws; (2) if any other Hazardous
Substances are brought or found on the Project Site, immediately remove and
properly dispose of the same in accordance with applicable Environmental Laws;
(3) cause the Project Site and the operations conducted thereon (including all
operations conducted thereon by other persons) to comply with all Environmental
Laws; (4) permit the Bondholder from time to time to inspect the Project Site
and observe the operations thereon; (5) undertake any and all preventive,
investigatory and remedial action (including emergency response, removal, clean
up, containment and other remedial action) that is (A) required by any
applicable Environmental Law or (B) necessary to prevent or minimize any
property damage (including damage to any of the Project Site), personal injury
or harm to the environment, or the threat of any such damage or injury, by
releases of or exposure to Hazardous Substances in connection with the Project
Site or the operations on the Project Site; (6) promptly give notice to the
Bondholder in writing if the Corporation should become aware of (A) any spill,
release or disposal of any Hazardous Substances, or imminent threat thereof, at
the Project Site, in connection with the operations on the Project Site, or at
any adjacent property that could migrate to, through or under the Project Site,
(B) any violation of Environmental Laws regarding the Project Site or operations
on the Project Site, and (C) any investigation, claim or threatened claim under
any Environmental Law, or any notice of violation under any Environmental Law,
involving the Corporation or the Project Site; and (7) deliver to the
Bondholder, at the Bondholder's request, copies of any and all documents in the
Corporation's possession or to which the Corporation has access relating to
Hazardous Substances or Environmental Laws and the Project Site and the
operations on the Project Site, including laboratory analyses, site assessments
or studies, environmental audit reports and other environmental studies and
reports.
(b) If the Bondholder at any time reasonably believes that the
Corporation is not complying with all applicable Environmental Laws or the
requirements hereof regarding the same, or that a material spill, release or
disposal of Hazardous Substances has occurred on or under the Project Site, the
Bondholder may require the Corporation to furnish to the Bondholder an
environmental audit or site assessment reasonably satisfactory to the Bondholder
with respect to the matters of concern to the Bondholder. Such audit or
assessment shall be performed at the expense of the Corporation by a qualified
consultant approved by the Bondholder.
(c) The Corporation hereby warrants that, to the best of the
information, knowledge and belief thereof (1) there are no civil, criminal or
administrative environmental proceedings involving the Project Site that are
pending or to the knowledge of the Corporation threatened; (2) the Corporation
knows of no facts or circumstances that might give rise to such a proceeding in
the future; (3) the Project Site is in compliance with all applicable federal,
state and local statutory and regulatory environmental requirements; and (4) the
Project Site is free from any and all Hazardous Substances.
(d) The Corporation shall defend, indemnify and save harmless the
Bondholder from and against any and all claims, causes of action, judgments,
damages, fines, penalties, and other losses, costs and expense, including
reasonable attorneys' fees and costs of investigation and litigation, asserted
against or suffered by the Bondholder that are related to or arise out of or
result from the presence of Hazardous Substances now or hereafter on or under or
included in the Project Site or in violation of any Environmental Law, and any
clean up or removal of, or other remedial action 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. The provisions of this Section 6.06 shall survive the
termination of this Lease Agreement with respect to claims and losses asserted
against or suffered by the Bondholder.
ARTICLE 7
Provisions Respecting Damage,
Destruction and Condemnation
SECTION 7.01......Damage and Destruction
(a) If the Project or the Project Site is damaged to such extent that
the claim for loss resulting from such destruction or damage is not greater than
$25,000, the Corporation will continue to pay Basic Rent and all other
additional rent and payments required to be paid hereunder and will promptly
repair, rebuild or restore the property damaged and will apply for such purpose
so much as may be necessary of Net Proceeds of insurance resulting from claims
for such losses, as well as any additional moneys of the Corporation necessary
therefor. If the cost of such repairs, rebuilding and restoration is less than
the amount of Net Proceeds of the insurance referable thereto, the Corporation
may retain the amount by which such insurance proceeds exceed said total cost.
(b) If the Project or the Project Site is destroyed or is damaged to
such extent that the claim for loss resulting from such destruction or damage is
in excess of $25,000, the Corporation will continue to pay Basic Rent and all
other additional rent and payments required to be paid hereunder and will
promptly give written notice of such damage and destruction to the Bondholder
and the Issuer. All Net Proceeds of insurance resulting from claims for such
losses shall be paid to the Bondholder, whereupon (1) the Corporation, or the
Issuer at the direction of the Corporation, will 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
Corporation and as will not impair the operating unity of the Project or its
character as a "project" under the Enabling Law, and (2) the Bondholder will pay
the costs of such repair, rebuilding or restoration, either on completion
thereof, or as the work progresses, upon appropriate verification of costs. The
balance, if any, of Net Proceeds of insurance remaining after the payment of all
of the costs of such repair, rebuilding or restoration shall be applied to the
redemption of the Bond in whole or in part (depending on the amount of such
excess) in the same manner and order specified in Section 8.07 of the Indenture
for moneys collected or held by the Bondholder, or, if the Bond is fully paid,
shall be paid to the Corporation.
(c) In the event the Net Proceeds of insurance are not sufficient to
pay in full the costs of repairing, rebuilding and restoring the Project as
provided in this Section, the Corporation will nonetheless complete the work
thereof and will pay that portion of the costs thereof in excess of the amount
of said Net Proceeds or will pay to the Bondholder for the account of the Issuer
the moneys necessary to complete said work. The Corporation shall not by reason
of the payment of such excess costs (whether by direct payment thereof or
payment to the Bondholder therefor) be entitled to any reimbursement from the
Issuer or any abatement or diminution of the rents payable hereunder.
(d) Anything in this Section to the contrary notwithstanding, if as a
result of such damage or destruction (regardless of whether the loss resulting
therefrom is greater than $25,000 or not) the Corporation is entitled to
exercise an option to purchase the Project and duly does so in accordance with
Section 11.03 hereof, then neither the Corporation 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 Bond shall
be paid to the Bondholder and the excess thereafter remaining (if any) shall be
paid to the Corporation.
SECTION 7.02 Condemnation
(a) If title to, or the temporary use of, the Project or the Project
Site or any part thereof shall be taken under the exercise of the power of
eminent domain, the Corporation shall be obligated to continue to make the
rental and other payments required to be paid under this Lease Agreement, and
the entire Net Proceeds referable to such taking, including the amounts awarded
to the Issuer and the Bondholder and the amount awarded to the Corporation for
the taking of all or any part of the leasehold estate of the Corporation in the
Project, shall be paid to the Bondholder and applied in one or more of the
following ways as shall be directed in writing by the Corporation:
(1) 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.
(2) To the acquisition by construction or otherwise, of other
structures, facilities and improvements suitable for the operations of
the Corporation (the same to be subject to this Lease Agreement and the
Indenture and be covered thereby) provided such acquisition shall
become a part of the Project and shall not result in the creation or
establishment of any liens or encumbrances on the Project prior to the
lien of the Indenture.
(b) In the event the Net Proceeds are not sufficient to fully provide
for the foregoing, the Corporation will nonetheless complete the work thereof
and will pay to the Bondholder for the account of the Issuer that portion of the
costs thereof in excess of the amount of the Net Proceeds or will pay the moneys
necessary to complete said work. The Corporation shall not by reason of the
payment of such costs (whether by direct payment thereof or payment to the
Bondholder therefor) be entitled to any reimbursement from the Issuer or any
abatement or diminution of the rents payable hereunder.
(c) Any balance of such Net Proceeds remaining after the application
thereof as provided in subsection (a) of this Section shall be applied to the
redemption of the Bond in whole or in part (depending on the amount of such
excess) in the same manner and order specified in Section 8.07 of the Indenture
for moneys collected or held by the Bondholder, or, if the Bond is fully paid,
shall be paid to the Corporation.
(d) The Issuer shall cooperate fully with the Corporation in the
handling and conduct of any prospective or pending condemnation proceeding with
respect to the Project or any part thereof and will, to the extent it may
lawfully do so, permit the Corporation to litigate in any such proceeding in the
name and behalf of the Issuer. In no event will the Issuer settle, or consent to
the settlement of, any prospective or pending condemnation proceeding without
the prior written consent of the Corporation.
(e) Anything in this Section to the contrary notwithstanding, if as a
result of such taking, the Corporation is entitled to exercise an option to
purchase the Project and duly do so in accordance with Section 11.03 hereof,
then any Net Proceeds referable to such taking as shall be necessary to provide
for full payment of the Bond shall be paid to the Bondholder, and the excess
thereafter remaining (if any) shall be paid to the Corporation.
(f) The Corporation 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.
ARTICLE 8
Certain Provisions Relating to Assignment,
Subleasing, Mortgaging and Redemption of the Bond
SECTION 8.01......Provisions Relating to Assignment and Subleasing
The Corporation 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:
(a) No such assignment or subleasing and no dealings or
transactions between the Issuer or the Bondholder and any assignee or
sublessee shall in any way relieve the Corporation from primary
liability for any of its obligations hereunder. In the event of any
such assignment or subleasing the Corporation shall continue to remain
primarily liable for the payment of all rentals herein provided to be
paid by it and for the performance and observance of the other
agreements and covenants on its part herein provided to be performed
and observed by it.
(b) The Corporation will not assign the leasehold interest
created hereby nor sublease the Project or any part thereof to any
person, firm, partnership, corporation or entity of any description
whatsoever unless the operations of such assignee or sublessee are
consistent with, and in furtherance of, the purpose of the Enabling
Law.
(c) The Corporation will not assign the leasehold interest
created hereby nor sublease the Project or any part thereof to any
person if such assignment or sublease would cause or result in the
interest on the Bond becoming includable in gross income for federal
income tax purposes.
(d) The Corporation shall furnish to the Issuer and the
Bondholder a true and complete copy of each such assignment or sublease
promptly after the delivery thereof and shall assign its rights
thereunder to the Issuer and the Bondholder as additional security for
the obligations of the Corporation hereunder.
SECTION 8.02......Assignment of Lease Agreement and Rents by the Issuer
(a) 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 Bondholder as security for payment of the principal of and the interest
on the Bond and the Corporation hereby consents to such assignment and pledge.
The Issuer has in the Indenture obligated itself to follow the instructions of
the Bondholder in the election or pursuit of any remedies herein vested in it.
The Bondholder 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 Bondholder, and the Bondholder is deemed to be
a third party beneficiary of the covenants, agreements and representations of
the Corporation herein contained.
(b) Prior to the payment in full of the Bond, the Issuer and the
Corporation shall have no power to modify, alter, amend or terminate this Lease
Agreement without the prior written consent of the Bondholder. The Issuer will
not amend the Indenture or any indenture supplemental thereto without the prior
written consent of the Corporation. Neither the Issuer nor the Corporation will
unreasonably withhold any consent herein or in the Indenture required of either
of them.
(c) The Corporation shall not be deemed to be a party to the Indenture
or the Bond, and reference in this Lease Agreement to the Indenture and the Bond
shall not impose any liability or obligation upon the Corporation other than its
specific obligations and liabilities undertaken in this Lease Agreement.
SECTION 8.03......Restrictions on Mortgage or Sale of Project by
Issuer; Consolidation or Merger of, or Transfer of Assets by, Issuer
Except as provided in the Indenture, the Issuer will not mortgage,
sell, assign, transfer, convey or grant a security interest in the Project, or
merge or consolidate with, or transfer its assets to, any person.
SECTION 8.04......Redemption of the Bond
(a) Upon the occurrence of any event which gives rise to any mandatory
redemption of the Bond, the Issuer will redeem any or all of the same in
accordance with the respective provisions thereof and the Indenture.
(b) If the Bond is subject to optional redemption, the Issuer will, but
only upon the written request of the Corporation, redeem the same in accordance
with the respective provisions thereof and the Indenture.
(c) On any redemption or prepayment date with respect to the Bond, the
Corporation shall pay to the Bondholder for the account of the Issuer the
applicable redemption price with respect to the Bond.
ARTICLE 9
Covenants of the Corporation
SECTION 9.01......Covenants of the Corporation
The Corporation hereby covenants and agrees that, so long as the Bond
is outstanding:
(a) The Corporation will 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 or with respect to the Project or any part thereof. The
Corporation will comply with all valid laws, regulations, ordinances, and
requirements applicable to the Project.
(b) The Corporation will permit the Issuer, the Bondholder, and their
respective duly authorized agents at all reasonable times to enter upon, examine
and inspect the Project and in the event of default as hereinafter provided, the
Corporation will permit a public accountant or firm of public accountants
designated by the Bondholder to have access to, inspect, examine and make copies
of the books and records, accounts and data of the Corporation.
(c) The Corporation 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 Corporation
shall furnish to the Issuer and to the Bondholder with reasonable promptness
such financial statements and data as may be reasonably requested thereby,
including without limitation annual financial statements of the Corporation and
annual operating statements with respect to the Project.
(d) The Corporation will maintain and preserve its corporate existence
and organization, and its authority to do business in the State and will not
voluntarily dissolve without first discharging its obligations under this Lease
Agreement and will comply with all valid laws, ordinances, regulations and
requirements applicable to it or to its property and the Project.
(e) The Corporation will not transfer or dispose of all, substantially
all, or any substantial portion, of it assets (either in a single transaction or
in a series of related transactions) without the prior written consent of the
Bondholder.
(f) The Corporation will not sell, assign, mortgage, pledge, transfer
or convey all or any part of its interest in this Lease Agreement or in the
Project, provided, however the foregoing shall not impair or restrict the right
of the Corporation as elsewhere permitted under this Lease Agreement to assign
this Lease Agreement and the leasehold interest created hereby or to sublet the
Project or any part thereof.
(g) The Corporation will duly pay and discharge all taxes, assessments
and other governmental charges and liens lawfully imposed on the Corporation,
upon the properties and interests of the Corporation, and the Project.
(h) The Corporation shall file, record, refile and rerecord all
financing statements, continuation statements, documents or other notices as are
necessary to perfect and to maintain the Issuer's title to and interest in the
Project and to perfect and maintain the security interest of the Bondholder in
the Project and shall submit evidence of such filing, recording, refiling and
rerecording to the Bondholder.
(i) The Corporation hereby represents and warrants that (1) the
execution and delivery of this Lease Agreement and the Guaranty will not involve
any prohibited transactions within the meaning of ERISA or Section 4975 of the
Internal Revenue Code, as amended; (2) based upon ERISA and the regulations and
published interpretations thereunder, the Corporation is in compliance in all
material respects with the applicable provisions of ERISA; (3) no "Reportable
Event" as defined in Section 4043(b) of Title IV of ERISA, has occurred with
respect to any plan maintained by the Corporation; and (4) there are no liens on
the real or personal property of the Corporation pursuant to Section 4068 of
ERISA.
ARTICLE 10
Events of Default and Remedies
SECTION 10.01.....Events of Default Defined
The following shall be events of default under this Lease Agreement and
the term "event of default" shall mean, whenever used in this Lease Agreement,
any one or more of the following events:
(1) Failure to pay any installment of Basic Rent that has become due
and payable by the terms of this Lease Agreement and such failure continues for
a period of five Business Days after written notice specifying such failure and
requesting that such payment be made has been received by the Corporation.
(2) Failure by the Corporation to observe and perform any covenant,
condition or agreement on its part to be observed or performed pursuant to this
Lease Agreement or the Guaranty, other than as referred to in subsection (a) of
this Section, for a period of fifteen days after written notice, specifying such
failure and requesting that it be remedied, given to the Corporation by the
Issuer or the Bondholder, provided that if such default is of a kind which
cannot reasonably be cured within such fifteen-day period, the Corporation shall
have a reasonable period of time within which to cure such default, provided
that it begins to cure the default promptly after its receipt of such written
notice and proceeds in good faith, and with due diligence, to cure such default.
(3) The dissolution or liquidation of the Corporation; or the filing by
the Corporation of a voluntary petition in bankruptcy; or failure by the
Corporation promptly to lift any execution, garnishment or attachment of such
consequence as will impair the ability of the same to perform its obligations
hereunder; the Corporation's seeking of or consenting to or acquiescing in the
appointment of a receiver of all or substantially all the property thereof or of
the Project; or the adjudication of the Corporation as a bankrupt; or any
assignment by the Corporation for the benefit of its creditors; or the entry by
the Corporation into an agreement of composition with its creditors; or if a
petition or answer is filed by the Corporation proposing the adjudication of the
same as a bankrupt or its reorganization, arrangement or debt readjustment under
any present or future federal bankruptcy code or any similar federal or state
law in any court; or if any such petition or answer is filed by any other person
and such petition or answer shall not be stayed or dismissed within one hundred
twenty days.
(4) Any warranty, representation or other statement by or on behalf of
the Corporation and contained in this Lease Agreement or in the Guaranty or in
any other document or certificate furnished by the Corporation in connection
with the issuance of the Bond shall be false, untrue or misleading in any
material respect at the time made and the same shall not be made good or
remedied within thirty days after written notice thereof to the Corporation by
the Bondholder or the Issuer.
(5) An event of default under the Indenture or the Guaranty.
SECTION 10.02.....Remedies on Default
Whenever any such event of default shall have happened and be
continuing, the Bondholder may take any of the following remedial steps:
(1) Declare all installments of Basic Rent payable under this Lease
Agreement 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 Site, without terminating this Lease Agreement,
and, upon ten days' prior written notice to the Corporation, relet the Project
or any part thereof for the account of the Corporation, 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 Bondholder may deem advisable, and such reletting of
the Project shall not be construed as an election to terminate this Lease
Agreement nor relieve the Corporation 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
Corporation 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
Bondholder'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 Corporation from
possession of the Project and, if the Bondholder elects so to do, lease the same
for the account of the Issuer, holding the Corporation liable for all rent due
up to the date such lease is made for the account of the Issuer.
(4) Have and exercise with respect to any or all personal property and
fixtures included in the Project, all rights, remedies and powers of a secured
party under the Alabama Uniform Commercial Code including without limitation the
rights and powers set forth in the Indenture with respect thereto.
(5) Take whatever legal proceedings may appear necessary or desirable
to collect the rent then due, whether by declaration or otherwise, or to enforce
any obligation or covenant or agreement of the Corporation under this Lease
Agreement or by law.
To the extent permitted by law, the Corporation expressly waives any notice of
sale or disposition of the Project and any rights or remedies of the Bondholder
or Issuer with respect to, and the formalities prescribed by law relative to,
the sale or disposition of the Project or to the exercise of any other right or
remedy of the Bondholder or Issuer existing after default. To the extent that
such notice is required and cannot be waived, the Corporation agrees that if
such notice is given to the Corporation in accordance with the provisions
hereof, at least ten days before the time of the sale or other disposition, such
notice shall be deemed reasonable and shall fully satisfy any requirements for
giving said notice.
SECTION 10.03.....No Remedy Exclusive
No remedy herein conferred upon or reserved to the Issuer or the
Bondholder 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.
SECTION 10.04.....Agreement to Pay Attorneys' Fees and Expenses
In the event the Corporation should default under any of the provisions
of this Lease Agreement and the Issuer or the Bondholder (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 rent or the enforcement of performance or
observance of any obligation or agreement on the part of the Corporation herein
contained, the Corporation will on demand therefor pay to the Issuer or the
Bondholder (as the case may be) the reasonable fee of such attorneys and such
other expenses.
SECTION 10.05.....No Additional Waiver Implied by One Waiver
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.
SECTION 10.06.....Remedies Subject to Applicable Law
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.
ARTICLE 11
Options
SECTION 11.01.....Options to Terminate
The Corporation shall have, if not in default hereunder, the option to
cancel or terminate this Lease Agreement at any time after full payment of the
Bond by giving the Issuer notice in writing of such termination and such
termination shall forthwith become effective.
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 Project Prior to Payment of the Bond
Anything in this Lease Agreement to the contrary notwithstanding, the
Corporation shall, if not in default hereunder, have the option to purchase the
Project at any time prior to the full payment of the Bond then outstanding, if
any of the following shall have occurred:
(a) The Project or the Project Site or any part thereof shall have been
damaged or destroyed (1) to such extent that, in the opinion of the Corporation,
it cannot be reasonably restored within a period of two consecutive months
substantially to the condition thereof immediately preceding such damage or
destruction, or (2) to such extent that, in the opinion of the Corporation, the
Corporation is thereby prevented from carrying on its normal operations at the
Project for a period of two consecutive months; or (3) to such extent that the
cost of restoration thereof would exceed the Net Proceeds of insurance carried
thereon pursuant to the requirements of this Lease Agreement; or
(b) Title to the Project or the Project Site or any part thereof or the
leasehold estate of the Corporation 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
Corporation being thereby prevented from carrying on its normal operations at
the Project or the Project Site for a period of two consecutive months; or
(c) As a result of any changes in the Constitution of the State or the
Constitution of the United States of America or of legislative or administrative
action (whether state or Federal), or by final decree, judgment or order of any
court or administrative body (whether state or Federal) entered after the
contest thereof by the Corporation 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
Corporation, 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 Corporation therein, which taxes were not being imposed on the
date of this Lease Agreement.
To exercise such option, the Corporation shall, within sixty days
following the event authorizing the exercise of such option, give written notice
to the Issuer and to the Bondholder and shall specify therein the date of
closing such purchase. The purchase price payable by the Corporation in the
event of the exercise of the option granted in this Section shall be such an
amount as shall be required to prepay the entire unpaid principal amount of the
Bond then outstanding, together with interest thereon to the date of such
payment, in the same manner and order as specified in Section 8.07 of the
Indenture. The prepayment price shall be paid by the Corporation to the
Bondholder.
Upon the exercise of the option granted herein and the prepayment of
the Bond as provided in this Section, any Net Proceeds of insurance or
condemnation award then on hand or thereafter received shall be paid to the
Corporation.
SECTION 11.04.....Option to Purchase Project After Payment of the Bond
If no Event of Default exists hereunder, the Corporation shall have the
option to purchase the Project at any time following full payment of the Bond
for a purchase price of one hundred dollars plus the expenses of the Issuer
incurred in connection therewith. To exercise the option granted in this
Section, the Corporation 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. In the event the option granted
in this Section 11.04 has not been exercised prior to the end of the Lease Term,
then said option shall automatically be considered to be exercised upon the end
of the Lease Term.
SECTION 11.05 Option to Purchase Unimproved Project Site
(a) The Corporation, if not in default hereunder, shall also have the
option to purchase, with the prior written consent of the Bondholder, any
Unimproved part of the Project Site at any time and from time to time at and for
a purchase price equal to the pro rata cost thereof to the Corporation, provided
that they furnish the Issuer and the Bondholder with the following:
(a) A notice in writing containing (1) 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
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 Improvements, (2) a statement that the
Corporation intends to purchase such portion of the Project Site on a
date stated, (3) a description of the buildings, structures, or
improvements to be erected on the portion to be purchased and (4) a
statement that the use to which such portion of the Project Site will
be devoted will be in furtherance of the purpose for which the Issuer
was organized.
(b) A certificate of an Independent Engineer dated not more than ninety
days prior to the date of the purchase and stating that, in the opinion
of the person signing such certificate, (1) the portion of the Project
Site with respect to which the option is exercised is not needed for
the operation of the Project, (2) the buildings, structures or
improvements described in the above certificate can be constructed on
the real property to be purchased and (3) the severance of such portion
of the Project Site from the Project and the construction thereon of
the buildings, structures and improvements above referred to will not
impair the usefulness of the Improvements or the means of ingress
thereto and egress therefrom.
(c) An amount of money equal to the purchase price computed as provided
in this Section, which amount shall be applied to the prepayment of the
principal of the Bond on the earliest Business Day for which the
required notice may be given, as provided in the Bond.
(b) Upon receipt by it of the notice and certificate required in this
Section to be furnished by the Corporation and the payment by the Corporation to
the Bondholder of the purchase price, the Issuer will promptly deliver to the
Corporation the documents referred to in Section 11.06 hereof and will secure
from the Bondholder a release from the lien of the Indenture of the portion of
the Project Site with respect to which the Corporation shall have exercised the
option granted in this Section.
(c) If such option relates to a portion 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 liability or the obligation of the Corporation for the payment of
Basic Rent and additional rent 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 rent by reason of the
release of any such realty except as specified in this Section and the
obligation and the liability of the Corporation shall continue in all respects
as provided in this Lease Agreement, excluding, however, any realty so
purchased.
SECTION 11.06.....Conveyance on Exercise of Option to Purchase
At the closing of the purchase pursuant to the exercise of any option
to purchase granted herein, the Issuer will upon receipt of the purchase price
deliver to the Corporation documents conveying to the Corporation the property
with respect to which such option was exercised, as such property then exists,
subject to the following: (1) those liens and encumbrances, if any, to which
title to said property was subject when conveyed to the Issuer; (2) those liens
and encumbrances created by the Corporation or to the creation or suffering of
which the Corporation consented; and (3) those liens and encumbrances resulting
from the failure of the Corporation 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 the Code
The parties hereto recognize that the Bond is being sold on the basis
that the interest payable on the Bond is excludable from gross income of the
Bondholder for federal income taxation under Section 103 of the Internal Revenue
Code of 1986, as amended (the "Code"). The Issuer and Corporation do each hereby
covenant and agree with the Bondholder that neither the Corporation nor the
Issuer will take any action, or omit to take any action, permit any action to be
taken, or fail to require any action to be taken, with respect to the Project or
the Bond, that would cause the interest on the Bond to be or become includable
in the gross income of the registered owners thereof for federal income
taxation, and further covenant and agree that: (i) the proceeds of the Bond
shall not be used or applied in such manner as to cause the Bond to be or become
an "arbitrage bond" as that term is defined in Section 148 of the Code; (ii)
ninety-five percent (95%) or more of the net proceeds of the Bond 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 of the Code; (iii) the proceeds of the Bond will be used
for the acquisition, construction and equipping of the Project or for issuance
expenses with respect to the Bond, or shall be rebated to the United States of
America as provided in the Indenture, and no part of the proceeds of the Bond
are to be used by the Corporation, directly or indirectly, for working capital,
or to finance inventory, or to acquire any facility or asset which may not,
under the Code, 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; (iv) the proceeds of the Bond shall not be used for the acquisition,
construction, reconstruction or improvement of any property which would cause
the average maturity of the Bond to exceed 120 percent of the average reasonably
expected economic life of the facilities financed with the net proceeds of the
Bond, within the meaning of Section 147(b) of the Code; (v) neither the Bond nor
any of the proceeds therefrom shall ever be federally guaranteed, within the
meaning of Section 149(b) of the Code, except as expressly provided in said
Section 149(b); (vi) none of the proceeds of the Bond shall be used to acquire
(directly or indirectly) any land (or any interest therein) to be used for
farming purposes; (vii) less than twenty-five percent (25%) of the proceeds of
the Bond shall be used to acquire (directly or indirectly) any land (or any
interest therein); (viii) none of the net proceeds of the Bond 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 of the Bond; (ix) no person shall ever be allowed
to use, occupy, or otherwise derive any benefit whatsoever from the Project, or
any part thereof, if the effect thereof shall result in a test period
beneficiary (as defined in Section 144(a) (10) of the Code) having allocated to
it and outstanding tax-exempt facility-related bonds (as defined in Section
144(a) (10) of the Code) in an aggregate principal amount exceeding $40,000,000;
and (x) no more than two percent (2%) of the proceeds of the Bond shall be used
to finance the issuance costs of the Bond; (xi) during the applicable period,
the $10,000,000 limit on bonds and capital expenditures as set forth in Section
144(a)(4) shall not be exceeded; and (xii) the proceeds of the Bond shall not be
used for the payment of any Project Cost paid or incurred prior to the date of
the Inducement Agreement (October 12, 1994) and the Bond is being issued within
not more than one year after completion of the Project.
SECTION 12.02 Corporation's Obligation If Interest on the Bond Is
Determined To Be Includable in Gross Income for Federal Income
TaxationCorporation's Obligation If Interest on the Bond Is Determined To Be
Includable in Gross Income for Federal Income Taxation.
(a) If the Commissioner of Internal Revenue makes a determination that
interest on the Bond is not excludable from gross income for federal income
taxation pursuant to Section 103 for any reason other than the operation of
Section 147(a) of the Code, and the Corporation exhausts (at its sole expense)
or fails to pursue in a timely manner any administrative or judicial remedy
available to it with respect to such determination, the Issuer or the Bondholder
shall notify the Corporation in writing that the outstanding Bond shall be
prepaid on the next practicable interest payment date, irrespective of whether
the Corporation has violated any covenant or representation in this Lease
Agreement. Within thirty days after the receipt of such notice the Corporation
shall either
(i) purchase the Project from the Issuer for the price
specified in subsection (b) of this Section, which purchase price shall
be paid to the Bondholder, or
(ii) pay to the Bondholder the sum specified in subsection (b)
of this Section, in which event the Corporation shall be entitled to
the use and occupancy of the Project until the expiration of the term
provided for herein without the payment of any further rent, but
otherwise on all of the terms and conditions hereof, except that the
Corporation shall not be required to carry any insurance for the
benefit of the Bondholder.
Any other options of the Corporation to purchase the Project shall be superseded
by its mandatory obligation to elect one of the alternatives set forth in this
subsection (a).
(b) The price payable by the Corporation for the Project in the event
interest on the Bond is determined to be includable in gross income for federal
income taxation as provided in subsection (a), or the amount payable to the
Bondholder in lieu of purchasing the Project, shall be equal to the sum of the
following:
(i) the outstanding principal amount of the Bond plus
accrued interest thereon to the date of prepayment;
(ii) the Bondholder's fees and expenses under the Indenture
accrued and to accrue until the prepayment of the Bond; and
(iii) a premium for each principal installment of the Bond the
interest on which has been determined to be taxable (whether or not
such installment has been paid) equal to 3% of the principal amount of
such principal installment on the Bond determined to be taxable.
(c) Upon payment by the Corporation of the amount specified in
subsection (b) of this Section, the Issuer shall call the outstanding Bond for
prepayment on the next practicable interest payment date. The Issuer shall cause
the Corporation to pay to the registered owner of the Bond, in addition to the
outstanding principal amount of such Bond and the interest accrued thereon to
the prepayment date, that portion of the premium (calculated under clause (iii)
of subsection (b) of this Section) allocable to such principal amount, and the
Issuer shall cause the Corporation to pay to the last registered owner of each
taxable principal installment of the Bond all or a portion of the principal
amount which has already been paid, the premium (calculated under clause (iii)
of subsection (b) of this Section) allocable to such taxable principal
installment of the Bond.
SECTION 12.03 Federal Rebate Payments.Federal Rebate Payments.
The provisions of Article 9 of the Indenture with respect to federal
rebate payments are incorporated herein by reference, and the Corporation shall
comply with said provisions and shall perform and discharge all obligations,
duties and responsibilities imposed upon the Corporation under said Article,
including without limitation the payment of all required rebates to the United
States of America and the maintenance of all records with respect thereto.
IN WITNESS WHEREOF, the Issuer and the Corporation have each caused
this Lease Agreement to be executed and the corporate seal thereof affixed
hereto and the same attested by officers thereof duly authorized thereunto.
THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF HALEYVILLE,
ALABAMA
By__________________________________
Its Chairman
S E A L
Attest: _______________________________
Its Secretary
WHEEL HOUSE PROPERTIES, INC.
By__________________________________
Its President
S E A L
Attest: _______________________________
Its Secretary
STATE OF ALABAMA )
)
WINSTON COUNTY )
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that Xxxx Xxxxxxx, whose name as Chairman of the Board of
Directors of The Industrial Development Board of the City of Haleyville,
Alabama, a public corporation, is signed to the foregoing Lease Agreement and
who is known to me, acknowledged before me on this day that, being informed of
the contents of said Lease Agreement, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said public
corporation.
Given under my hand and seal this the ___ day of March, 1995.
-----------------------------------
Notary Public
NOTARIAL SEAL
My commission expires: ___________________
STATE OF ALABAMA )
)
WINSTON COUNTY )
I, undersigned, a Notary Public in and for said County in said State,
hereby certify that Xxxxx X. Xxxxxx whose name as President of Wheel House
Properties, Inc., an Alabama corporation, is signed to the foregoing Lease
Agreement and who is known to me, acknowledged before me on this day that, being
informed of the contents of said Lease Agreement, he, as such officer and with
full authority, executed the same voluntarily for and as the act of said
corporation.
Given under my hand and seal this the ___ day of March, 1995.
-----------------------------------
Notary Public
NOTARIAL SEAL
My commission expires: ______________________
------------------------------------------------------------------
LEASE AGREEMENT
------------------------------------------------------------------
The Industrial Development Board
of the City of Haleyville, Alabama
and
Wheel House Properties, Inc.
(an Alabama corporation)
Dated as of March 1, 1995
------------------------------------------------------------------
This Lease Agreement was prepared by Xxxxxxx Xxxxx of Walston,
Stabler, Xxxxx, Xxxxxxxx & Xxxxx, Financial
Center, 000 Xxxxx 00xx Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000
------------------------------------------------------------------
EXHIBIT A
to
Lease Agreement
dated as of
March 1, 1995
from
The Industrial Development Board
of the City of Haleyville, Alabama
to
Wheel House Properties, Inc.
--------------------------------------------------------
Foam spraying system for rafters Sealer spray system for ceiling Ceiling
compound spray system
Electrical hoist, including dollies and electrical wire gathering system
Overhead tram systems Jig tables for sidewalls Partitions, floors and endwalls
Additional manufacturing equipment, including but not limited to, saws,
dust systems, roller beds, scaffolding, air lines, roll over plates, nose
wheels, compressors, hand tools, cabinet tables, for lifts and material carts.
Office equipment and furniture, including for employee rooms.
TABLE OF CONTENTS
Page
Parties...........................................................................................................1
Recitals..........................................................................................................1
ARTICLE 1
Definitions and Other Provisions
of General Application
SECTION 1.01 Definitions................................................................ 2
SECTION 1.02 Date of Lease Agreement.................................................... 6
SECTION 1.03 Separability Clause........................................................ 6
SECTION 1.04 Effect of Headings and Table of ........................................... 7
Contents
SECTION 1.05 Successors and Assigns..................................................... 7
SECTION 1.06 Governing Law.............................................................. 7
SECTION 1.07 Execution Counterparts..................................................... 7
SECTION 1.08 Covenant of Quiet Enjoyment................................................ 7
SECTION 1.09 Issuer's Liabilities Limited............................................... 7
SECTION 1.10 Prior Agreements Canceled.................................................. 7
SECTION 1.11 Notices.................................................................... 8
SECTION 1.12 The Special Funds.......................................................... 8
ARTICLE 2
Representations and Warranties
SECTION 2.01 Representations by the Issuer.............................................. 8
SECTION 2.02 Representations by the Corporation......................................... 9
ARTICLE 3
Demising Clauses
ARTICLE 4
The Project
SECTION 4.01 Acquisition of Project; Payment of ........................................ 11
Excess Project Costs.
SECTION 4.02 No Warranty of Suitability by Issuer....................................... 12
SECTION 4.03 Issuer to Pursue Remedies Against ......................................... 13
Vendors, Contractors and
Subcontractors and Their Sureties
SECTION 4.04 Completion of the Project.................................................. 13
SECTION 4.05 Title Insurance............................................................ 14
ARTICLE 5
Duration of Lease Term
and Rental Provisions
SECTION 5.01 Duration of Term........................................................... 14
SECTION 5.02 Rental and Payment Provisions; Net ........................................ 14
SECTION 5.03 Advances by Issuer or Bondholder........................................... 15
SECTION 5.04 Indemnity of Issuer and Bondholder......................................... 15
SECTION 5.05 Obligations of Corporation ................................................ 16
ARTICLE 6
Maintenance, Alterations, Replacements, Insurance; and
Environmental Compliance
SECTION 6.01 Maintenance and Repairs.................................................... 17
SECTION 6.02 Removal of, Substitution and Replacement .................................. 18
for Equipment
SECTION 6.03 Taxes, Other Governmental Charges and ..................................... 19
Utility Charges
SECTION 6.04 Insurance Required......................................................... 20
SECTION 6.05 Installation By Corporation of Own ........................................ 21
Machinery and Equipment
SECTION 6.06 Environmental Compliance................................................... 22
ARTICLE 7
Provisions Respecting Damage,
Destruction and Condemnation
SECTION 7.01 Damage and Destruction..................................................... 23
SECTION 7.02 Condemnation............................................................... 25
ARTICLE 8
Certain Provisions Relating to Assignment,
Subleasing, Mortgaging and Redemption of the Bond
SECTION 8.01 Provisions Relating to Assignment and Subleasing.................................... 26
SECTION 8.02 Assignment of Lease Agreement and Rents ............................................ 27
by the Issuer
SECTION 8.03 Restrictions on Mortgage or Sale of ................................................ 27
Project by Issuer; Consolidation or
Merger of, or Transfer of Assets by,
Issuer
SECTION 8.04 Redemption of the Bond.............................................................. 28
ARTICLE 9
Covenants of the Corporation
SECTION 9.01 Covenants of the Corporation .............................................. 28
ARTICLE 10
Events of Default and Remedies
SECTION 10.01 Events of Default Defined.................................................. 30
SECTION 10.02 Remedies on Default........................................................ 31
SECTION 10.03 No Remedy Exclusive ....................................................... 32
SECTION 10.04 Agreement to Pay Attorneys' Fees and ...................................... 32
Expenses
SECTION 10.05 No Additional Waiver Implied by One ....................................... 32
Waiver
SECTION 10.06 Remedies Subject to Applicable Law......................................... 33
ARTICLE 11
Options
SECTION 11.01 Options to Terminate....................................................... 33
SECTION 11.02 Option to Renew............................................................ 33
SECTION 11.03 Option to Purchase Project Prior to ....................................... 33
Payment of the Bond
SECTION 11.04 Option to Purchase Project After Payment .................................. 34
of the Bond
SECTION 11.05 Option to Purchase Unimproved Project Site ............................... 35
SECTION 11.06 Conveyance on Exercise of Option to ....................................... 36
Purchase
ARTICLE 12
Internal Revenue Code
SECTION 12.01 Covenants Regarding the Code............................................................ 36
SECTION 12.02 Corporation's Obligation If Interest on ................................................ 38
the Bond Is Determined To Be
Includable in Gross Income for Federal Income
Taxation
SECTION 12.03 Federal Rebate Payments................................................................. 39
Testimonium......................................................................................................34
Signatures.......................................................................................................34
Acknowledgments..................................................................................................35
EXHIBIT A - Description of Equipment
