EXHIBIT 10.6
THIS BOND HAS NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
AND MAY NOT BE SOLD, TRANSFERRED OR
OTHERWISE DISPOSED OF WITHOUT REGISTRATION UNDER
SAID ACT OR EXEMPTION THEREFROM
THIS BOND MAY NOT BE SOLD, TRANSFERRED
OR OTHERWISE DISPOSED OF EXCEPT TO AN INSTITUTIONAL
INVESTOR OR TO SUCH OTHER PERSON AS MAY BE
PERMITTED UPON THE TERMS AND CONDITIONS SET
FORTH IN THE MORTGAGE AGREEMENT
REFERRED TO IN THIS BOND
ERIE COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
INDUSTRIAL DEVELOPMENT REVENUE BOND
(1994 MIDWAY-CTS BUFFALO PROJECT)
No. R-1 $2,600,000.00
The Erie County Industrial Development Agency, a corporate governmental
agency constituting a body corporate and politic and a public benefit
corporation of the State of New York, duly organized and existing under the laws
of the State of New York (the "Agency"), for value received, hereby promises to
pay as hereinafter provided to Key Bank of New York (the "Bondholder") or
registered assigns, solely from the lease rentals derived from or in connection
with the Facility hereinafter referred to as provided in the Mortgage Agreement
(the "Mortgage Agreement") dated as of December 1, 1994 between the Agency and
the Bondholder the principal amount of TWO MILLION SIX HUNDRED THOUSAND AND
00/100 DOLLARS ($2,600,000.00) (or so much thereof as shall have been advanced
under this Bond pursuant to the terms of the Building Loan Contract (the
"Building Loan Contract") dated as of December 1, 1994 between the Bondholder
and Midway-CTS Buffalo, Ltd. (the "Lessee") and the Mortgage Agreement) (the
"Bond Principal Amount"), with interest on the unpaid portion of the Bond
Principal Amount from the date of this Bond until the Bond Principal Amount is
paid in full, in the manner following:
A. Interest.
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1. Interest on the unpaid principal balance of this Bond shall be due and
payable on January 1, 1995 and on the first day of each month
thereafter until the entire principal balance of this Bond is paid in
full.
2. From and including the Issue Date to and until the earlier of
completion of the Facility or October 1, 1995 (the "Conversion Date")
interest, calculated on the basis of a 360 day year for the actual
number of days elapsed, shall accrue until receipt of payment by the
Bondholder, on the unpaid principal amount of the Bond at the rate of
interest designated and announced by the Bondholder from time to time
as its Base Rate and used internally by the Bondholder to calculate
the interest payable to it under notes or other agreements providing
for interest based on its Base Rate (the "Base Rate") plus one percent
(1%). The Base Rate is not necessarily the lowest rate granted by the
Bondholder who may extend credit at interest rates both above and
below the Base Rate. Each change in the Base Rate shall effect a
simultaneous and corresponding change in the rate of interest.
3. Commencing on the Conversion Date and for five years thereafter,
interest, calculated on the basis of a 360-day year consisting of
twelve (12) thirty (30) days months, shall accrue on the outstanding
principal amount of this Bond at a fixed rate equal to 300 basis
points over the average weekly yield on United States Treasury
obligations adjusted to a constant maturity of five years as published
by Federal Reserve Board in Statistical Release H.15 (519) (the "Five
Year Treasury Rate") as the "week ending" rate for the week nearest
preceding the Conversion Date, rounded up to the next highest one
quarter of one percent (.25%). If for any reason the Federal Reserve
should cease publication of the preceding rate, the interest payable
shall be determined by reference to the most nearly equivalent
published rate as determined by the Bondholder.
4. Commencing on the five year anniversary of the Conversion Date (the
"interest Adjustment Date") and for five years thereafter, interest
shall accrue on the outstanding principal amount of this Bond at a
fixed rate equal to 300 basis points over the Five Year Treasury Rate
as the "week ending" rate of the week nearest preceding the Interest
Adjustment Date rounded up to the next highest one quarter of one
percent (.25%). If for any reason the Federal Reserve should cease
publication of the preceding rate, the interest payable shall be
determined by reference to the most nearly equivalent published rate
as determined by the Bondholder.
5. At no time shall the rate of interest payable hereunder exceed the
maximum rate permitted by applicable law.
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6. After maturity, whether by acceleration or otherwise, interest shall
continue to accrue and be payable as provided above until payment in
full of the unpaid principal balance of the Bond.
B. Principal
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1. Commencing on the first day of the first month following the
Conversion Date and continuing on the first day of each successive
month thereafter for one hundred twenty (120) months, the principal on
the Bond shall be repaid in monthly installments of principal and
interest each in an amount sufficient to amortize the principal
balance then outstanding over a twenty (20) year term at the interest
rate then in effect.
2. The Bondholder will adjust the payment schedule on the first day of
the first month following the Interest Adjustment Date to an amount
which would amortize the principal balance then outstanding over the
residue of the twenty (20) year amortization term at the interest rate
then in effect.
3. On the first day of the one hundred twentieth (120th) month following
the month in which the Conversion Date shall occur, there shall be one
final installment of the entire outstanding principal balance together
with accrued interest and all other sums payable hereunder.
Each installment payment of principal and interest shall be applied first
to accrued interest and the balance to principal.
Anything herein or in said Indenture to the contrary notwithstanding, the
obligations of the Agency hereunder and under said Indenture shall be subject to
the limitation that payments of interest or other amounts hereon shall not be
required to the extent that receipt of any such payment by a holder of this Bond
would be contrary to the provisions of law applicable to such holder of this
Bond which would limit the maximum rate of interest which may be charged or
collected by such holder of this Bond.
If any payment of any sum due hereunder shall not be received by Bondholder
on or before the due date thereof, the Agency shall pay to the Bondholder on
demand a late payment charge in an amount equal to five percent (5%) of the
overdue payment. For purposes of this paragraph, a payment will be overdue after
12:00 Noon on the day such payment is due.
The Agency hereby makes, constitutes and appoints the Lessee as its true
and lawful attorney-in-fact to (i) receive disbursements under the Building Loan
Contract, (ii) select all interest rate options under this Bond, (iii) exercise
any option to redeem this Bond in whole or in part
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according to the terms hereof, and (iv) make, execute and deliver all
instruments necessary or helpful to accomplish any of the foregoing powers. It
is acknowledged that the Lessee has an interest in the subject matter of the
foregoing powers and it is agreed that the Lessee is hereby irrevocably vested
with the powers granted herein and the Agency does hereby forever renounce all
right to revoke this power of attorney or any of the powers conferred upon the
Lessee hereby or to appoint any other person to execute any of the said powers,
and the Agency also renounces all right on its own part to perform any of the
acts personally which the Lessee is authorized herein to perform.
Anything herein or in the Mortgage Agreement to the contrary
notwithstanding, the obligations of the Agency hereunder and under the Mortgage
Agreement shall be subject to the limitation that payments of interest or other
amounts hereon shall not be required to the extent that receipt of any such
payment by a holder of this Bond would be contrary to the provisions of law
applicable to such holder of this Bond which would limit the maximum rate of
interest which may be charged or collected by such holder of this Bond.
The principal of, redemption premium, if any, and interest on this Bond are
payable in any coin or currency of the United States of America which, at the
respective times of payment, is legal tender for the payment of public and
private debts, at the principal office of the holder of this Bond or at such
other address as may be specified by the holder in writing to the Agency and the
Lessee. If any payment of principal, redemption premium, if any, or interest
required to be made on this Bond becomes due and payable on a day which is not a
Business Day (as defined in the Mortgage Agreement), then such payment shall be
made on the next succeeding Business Day, with the same force and effect as if
made on the interest payment date, the date of maturity or the date fixed for
redemption, except that interest shall continue to accrue on the unpaid
principal.
This Bond constitutes the entire issue of bonds designated as the "Erie
County Industrial Development Agency, Industrial Development Revenue Bond (1994
Midway-CTS Buffalo Project) (hereinafter called the "Bond") issued in the
aggregate principal amount of $2,600,000.00 as a single, fully registered bond
in the denomination of $2,600,000.00 under and pursuant to and in full
compliance with the Constitution and laws of the State of New York, particularly
the New York State Industrial Development Agency Act (constituting Title 1 of
Article 18-A of the General Municipal Law, Chapter 24 of the Consolidated Laws
of New York), as amended, and Chapter 293 of the 1970 Laws of New York, as
amended (collectively, the "Act") and under and pursuant to a resolution adopted
by members of the Agency on October 12, 1994 authorizing the issuance of this
Bond, and under and pursuant to the Mortgage Agreement made and entered into by
and between the Agency and the Bondholder, for the purpose of financing the cost
of the acquisition, construction and installation of a 69,265 +/-square foot
manufacturing facility to be located on a 4.74 +/- acre parcel at 000 Xxxxx X.
Xxxxx Xxxxx in the New Buffalo Industrial Park, Buffalo, New York (the
"Facility") under and pursuant to a Lease Agreement dated as of December 1, 1994
(hereinafter together with any amendments thereof and any subsequent lease of
the Facility called the "Lease Agreement") for sublease to Xxxxx International
Enterprises Corp. (the "Sublessee") (hereinafter together with any amendments
thereof and any subsequent sublease of the Facility called the "Sublease
Agreement"). The Lease Agreement requires the payment of rentals sufficient to
provide
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for the payment of the principal of, including any applicable redemption
premiums, and interest on this Bond as the same become due. Copies of the
Mortgage Agreement, the Lease Agreement, the Sublease Agreement and each other
Security Document (as such term is defined in the Mortgage Agreement) are on
file at the office of the Agency in Buffalo, New York and reference is made to
the Mortgage Agreement, the Lease Agreement, the Sublease Agreement and each
other Security Document for the provisions relating, among other things, to the
terms and security of this Bond, the charging and collection of rentals for the
Facility, the custody and application of the proceeds of this Bond, the rights
and remedies of the Bondholder, and the rights, duties and obligations of the
Agency, the Lessee, and the Bondholder.
This Bond is a special obligation of the Agency, payable as to principal,
redemption premium, if any, and interest solely from and secured by a pledge of
certain of the lease rentals derived from or in connection with the Facility,
including monies received under the Lease Agreement which are required to be set
apart and transferred to certain special funds, or to the "Erie County
Industrial Development Agency (1994 Midway-CTS Buffalo Project) Renewal Fund"
(subject to disbursements from said special funds or Renewal Fund in accordance
with the provisions of the Lease Agreement and the Mortgage Agreement)
established under the Lease Agreement and the Mortgage Agreement. The payment of
the principal of, redemption premium, if any, and the interest on this Bond has
been guaranteed by: (a) the Lessee pursuant to a Lessee Guaranty; and (b)
jointly and severally by J. Xxxxxxx Xxxxx and Xxxxxx X. Xxxxx (collectively the
"Individual Guarantors") pursuant to an Individual Guaranty dated as of December
1, 1994. This Bond is further secured by a pledge and assignment of
substantially all of the Agency's right, title and interest in and to the Lease
Agreement other than the Agency's Reserved Rights, by the lien on and security
interest in the Facility of the Mortgage Agreement and by an assignment of
certain subleases with respect to the Facility pursuant to a Collateral Lease
Assignment dated as of December 1, 1994 to the Bondholder. This Bond shall never
constitute a debt of the State of New York nor of the County of Erie and neither
the State of New York nor the County of Erie shall be liable thereon, nor shall
this Bond be payable out of any funds of the Agency other than those pledged
therefor.
In certain events, on the conditions, in the manner and with the effect set
forth in the Mortgage Agreement, the principal of this Bond may be declared and
may become due and payable (or may become due and payable without declaration)
before the stated maturities thereof, together with accrued interest thereon.
Modifications or alterations of the Mortgage Agreement, or of any mortgage
supplemental thereto, may be made only to the extent and in the circumstances
permitted by the Mortgage Agreement.
This Bond is transferrable, as provided in the Mortgage Agreement, only
upon the registrations books of the Agency kept for such purpose in the office
of the Agency as Bond Registrar, upon presentation hereof at such office by the
registered owner or his duly authorized attorney in fact accompanied with a
written instrument of transfer in the form appearing on this Bond and duly
executed by the registered owner or his duly authorized attorney in fact and the
notation
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of such registration endorsed hereon and on such registration books by the
Agency as Bond Registrar. The Agency may deem and treat the person in whose name
this Bond is registered as the absolute owner hereof for the purpose of
receiving payment of, or on account of, the principal of, redemption premium, if
any, and the interest on this Bond, and for all other purposes.
This Bond is issuable in the form of a single, fully registered bond in the
denomination of $2,600,000.000 and may not be exchanged for multiple bonds.
In all cases in which the privilege of transferring this Bond is exercised,
the Agency may make a charge sufficient to reimburse it for any expenses and any
tax, fee or other governmental charge required to be paid by the Agency in
connection therewith, which expenses and charge or charges shall be paid by the
person requesting such transfer.
This Bond and any interest herein may be transferred only (i) to an
Institutional Investor (as defined in the Mortgage Agreement) provided that the
Bondholder shall have executed a written assignment of all of its right, title
and interest in and to the Mortgage Agreement to the transferee of this Bond,
and such transferee shall have executed and delivered to the Agency a Receipt
and Affirmation of Bond Purchaser in form acceptable to the Agency and its
counsel, or (ii) to a person not an Institutional Investor provided that prior
to such transfer the Agency shall have entered into an indenture of mortgage and
trust with a corporate trustee reasonably acceptable to the Agency and the
proposed new bondholder, the Bondholder shall have executed a written assignment
of all of its right, title and interest in and to the Mortgage Agreement to such
corporate trustee, and the transferee shall have executed and delivered to the
Agency a Receipt and Affirmation of Bond Purchaser in form acceptable to the
Agency and its counsel. In either case, the Agency may require as a condition to
such transfer, that this Bond be registered under the Securities Act of 1933, as
amended, or the securities laws of any state, or that the indenture of mortgage
and trust be qualified under the Trust Indenture Act of 1939, as amended, or
that the Agency receive an Opinion of Counsel to the effect that no such
registration or qualification is required. The Agency shall not be required to
register any transfer of this Bond without compliance with the provisions of
this paragraph.
This Bond is subject to redemption prior to maturity, at the option of the
Agency, at the request of the Lessee, which option shall be exercised from
payments being made by the Lessee pursuant to the Lease Agreement, upon not less
than thirty (30) days prior written notice, as a whole or in part, at any time,
upon notice or waiver of notice as provided in the Mortgage Agreement, at the
Redemption Prices (expressed as percentages of the amount prepaid) set forth
below (collectively, the "Redemption Price"), in each case together with
interest accrued thereon to the date of redemption:
Redemption Occurring During Redemption Price
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Year 1 or Year 6 105%
Year 2 or Year 7 104%
Year 3 or Year 8 103%
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Year 4 or Year 9 102%
Year 5 or Year 10 101%
As used herein, the term "Year" shall mean a period of 365 (or 366, if
applicable) days commencing on the Conversion Date.
Notwithstanding the above, the Bond may be redeemed in whole or in part
without penalty at any time prior to the Conversion Date; during the last sixty
(60) days prior to maturity or prior to any Adjustment Date; or during any
period of time when Bondholder is obligated to make advances under the Building
Loan Contract.
This Bond is subject to mandatory redemption prior to maturity, to the
extent of (i) excess proceeds of this Bond remaining after the completion of the
Facility, (ii) excess proceeds of title insurance, property insurance or
condemnation awards remaining after the application thereof toward the
restoration of the Facility in accordance with the terms of the Lease Agreement,
or (iii) certain amounts so required to be applied pursuant to the Mortgage
Agreement, as a whole or in part on any interest payment date, upon notice of
waiver of notice as provided in the Mortgage Agreement, at the Redemption Price
of one hundred percent (100%) of the unpaid principal amount of this Bond to be
redeemed, together with interest accrued thereon to the date of redemption.
If this Bond is redeemed in part, the principal amount of the Redemption
Price to be redeemed shall be applied to the installments of principal due
hereon in inverse order of their due dates in the manner provided in the
Mortgage Agreement.
In the event the maturity date of this Bond is accelerated following an
Event of Default, any tender of payment of the amount necessary to satisfy the
entire indebtedness made after such default shall be expressly deemed an evasion
of the prepayment premium and shall be deemed a voluntary prepayment. In such a
case, to the extent permitted by law, the Bondholder shall be entitled to the
amount necessary to satisfy the entire indebtedness plus the applicable
prepayment premium that would have been payable if the prepayment were made
voluntarily.
Notice of redemption of this Bond or any portion thereof shall be given by
certified or registered mail, postage prepaid, not less than thirty (30)
business days prior to the redemption date, to the Bondholder at the address of
the Bondholder as the same shall appear on the registration books of the Agency
kept for that purpose at the principal office of the Agency as Bond Registrar,
all in the manner and upon the terms and conditions set forth in the Mortgage
Agreement; provided, however, that any defect in such notice shall not affect
the validity of any proceeding for the redemption of this Bond with respect to
which proper mailing was effected. Notice of redemption need not be given if
such registered owner waives notice thereof in writing. If notice of redemption
shall have been given, or such waiver filed as aforesaid, the principal amount
to be redeemed shall become due and payable on the redemption date. This Bond or
principal portion thereof so called for redemption will cease to bear interest
after the redemption date, provided that notice has been given or waived as
provided herein and in the Mortgage Agreement, and further provided that funds
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sufficient for redemption are paid to the Bondholder on the redemption date.
It is hereby certified, recited and declared that all conditions, acts and
things required by law and the Mortgage Agreement to exist, to have happened and
to have been performed precedent to and in the issuance of this Bond, exist,
have happened and have been performed, and that the issuance of this Bond and
the issue of which it forms a part are within every debt and other limit
prescribed by the laws of the State of New York.
Neither the members, directors, officers or agents of the Agency nor any
person executing this Bond shall be liable personally or be subject to any
personal liability or accountability by reason of the issuance hereof.
Unless the context requires otherwise, all terms used in this Bond that are
defined in the Mortgage Agreement shall have the meanings set forth therein.
IN WITNESS WHEREOF, the Erie County Industrial Development Agency has
caused this Bond to be executed in its name by the manual signature of its
Treasurer or Assistant Treasurer and its corporate seal to be affixed,
impressed, imprinted or otherwise reproduced hereon, and attested by the manual
or facsimile signature of its Secretary or Assistant Secretary, all as of
December 1, 1994. The issue date of this Bond is December 14, 1994.
ERIE COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
(SEAL) By /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx,
Assistant Treasurer
ATTEST:
/s/ Xxxx X. Xxxxx
________________________
Xxxx X. Xxxxx,
Assistant Secretary
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ASSIGNMENT
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For value received, the undersigned hereby sells, assigns and transfers
unto [PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF TRANSFEREE] the within Bond,
and all rights thereunder, and hereby irrevocably constitutes and appoints
______________________________________________ Attorney to transfer the within
Bond on the books kept for registration thereof, with full power of substitution
in the premises.
Dated:_____________________
NOTICE: The signature to this assignment must correspond with the name of the
registered holder as it appears upon the face of the within Bond in every
particular, without alteration or enlargement or any change whatever.
REGISTRATION
Date of In Whose Name
Registration Registered Bond Registrar
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ADVANCES
Amount of Total
Date of Advances Advance Advances to Date
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