CAMDEN COUNTY IMPROVEMENT AUTHORITY
Lessor
AND
XXXX HAULING AND WAREHOUSING SYSTEM, INC.
Lessee
LEASE AGREEMENT
Dated as of January 15, 1996
The interest of the CAMDEN COUNTY IMPROVEMENT AUTHORITY (the "Issuer") in
this Lease Agreement has been assigned (except for certain rights expressly
reserved by the Issuer) pursuant to the Indenture of Trust dated as of the
date hereof from the Issuer to The Bank of New York (NJ), as trustee (the
"Trustee"), and is subject to the security interest of the Trustee
thereunder.
TABLE OF CONTENTS
(This Table of Contents is only for convenience of reference and is not
intended to define, limit or describe the scope or intent of any provisions
of this Lease Agreement.)
Page
PARTIES ....................................................... 1
PREAMBLES ..................................................... 1
ARTICLE I
DEFINITIONS
Section 1.1. Definitions .............................. I-1
Section 1.2. Interpretation and Construction .......... I-15
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations and Covenants of the
Issuer. . . . . . . . . . .. . . . . . . II-1
Section 2.2. Representations and Warranties of the
Company ............................... II-1
Section 2.3. Environmental Representations, Warranties
and Covenants ......................... II-6
Section 2.4. Covenants of the Company .............. II-7
ARTICLE III
ISSUANCE OF THE BONDS; CONSTRUCTION OF THE PROJECT
Section 3.1. Agreement to Issue the Bonds: Application
of Bond Proceeds . . . . . . . . . . . . III-1
Section 3.2. Disbursements from the Project Fund. . . III-1
Section 3.3. Furnishing Documents to the Trustee. . . III-1
Section 3.4. Special Arbitrage Certifications. . . . III-1
Section 3.5. Agreement to Construct the Project . . . III-1
Section 3.6. Company Required to Pay Project Costs if
Project Fund Insufficient. . . . . . . . III-2
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ARTICLE IV
LEASING OF PROJECT
Section 4.1. Leasing of Project and Project Site . . . IV-1
Section 4.2. Subordination . . . . . . . . . . . . . . IV-1
Section 4.3. Possession and Quiet Enjoyment . . . . .. IV-1
ARTICLE V
TERM OF LEASE; TERMINATION OF
LEASE AGREEMENT BY THE COMPANY;
OPTION TO PURCHASE THE PROJECT
Section 5.1. Term of Lease Agreement . . . . . . . . . V-1
Section 5.2. Termination of this Lease Agreement
by the Company . . . . . . . . . . . . . .V-1
Section 5.3. Option to Renew this Lease Agreement . . . V-1
Section 5.4. Right of First Refusal . . . . . . . . . . V-1
Section 5.5. Option to Purchase the Project . . . . . . V-2
ARTICLE VI
RENT AND OTHER REQUIRED PAYMENTS
Section 6.1. Amounts Payable . . . . . . . . . . . . VI-1
Section 6.2. Obligations of Company Unconditional. . VI-2
Section 6.3. Lease Agreement a Net Lease. . . . . . . VI-3
Section 6.4. Nature of obligations of the Issuer. . . VI-3
ARTICLE VII
THE PROJECT
Section 7.1. Disbursements from the Project Fund . . VII-1
Section 7.2. Maintenance and Modification of the
Project by the Company . . . . . . . . VII-2
Section 7.3. Taxes, Other Governmental Charges and
Utility Charges . . . . . . . . . . . VII-3
Section 7.4. Insurance Required. . . . . . . . . . . VII-3
Section 7.5. Additional Provisions Concerning
Insurance . . . . . . . . . . . . . . . VII-4
Section 7.6. Worker's Compensation . . . . . . . . . VII-5
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8.1. Damage, Destruction and Condemnation . VIII-1
Section 8.2. Application of Net Proceeds . . . . . VIII-1
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Section 8.3. Insufficiency of Net Proceeds . . . . VIII-2
Section 8.4. Conduct of Insurance or Condemnation
Claims . . . . . . . . . . . . . . . . VIII-3
ARTICLE IX
SPECIAL COVENANTS
Section 9.1. No Warranty of Condition or Suitability by
Issuer . . . . . . . . . . . . . . . . . IX-1
Section 9.2. Access to the Project . . . . . . . . . IX-1
Section 9.3. Further Assurances and Corrective
Instruments . . . . . . . . . . . . . . IX-1
Section 9.4. Issuer and Company Representatives . . . IX-1
Section 9.5. Financing Statements . . . . . . . . . . IX-1
Section 9.6. Compliance with Code . . . . . . . . . . IX-2
Section 9.7. Further Assurances . . . . . . . . . . . IX-2
Section 9.8. Assignment . . . . . . . . . . . . . . . IX-2
Section 9.9. Annual Certificate . .. . . . . . ... . IX-2
ARTICLE X
MAINTAIN EXISTENCE; MERGE, SELL,
TRANSFER; INDEMNIFICATION; REDEMPTION
Section 10.1. Maintain Existence; Merge, Sell,
Transfer . . . . . . . . . . . . . . . . X-1
Section 10.2. Release and Indemnification Covenants . X-2
Section 10.3. Redemption or Defeasance of Bonds . . . X-4
Section 10.4. Issuer to Grant Security Interest to
Trustee . . . . . . . . . . . . . . . . X-5
Section 10.5. Indemnification of Trustee . . . . . . . X-5
ARTICLE XI
DEFAULTS AND REMEDIES
Section 11.1. Defaults Defined .. . . . . . . . . . XI-1
Section 11.2. Issuer's Remedies on Default . . . . . XI-2
Section 11.3. [Intentionally Omitted] . . . . . . . . XI-3
Section 11.4. Specific Performance . . . . . . . . . XI-3
Section 11.5. No Remedy Exclusive . . . . . . . . . . XI-4
Section 11.6. Agreement to Pay Attorneys' Fees and
Expenses . . . . . . . .. . . . . . . . XI-4
Section 11.7. No Additional Waiver Implied by One
Waiver . . . . . . . . . . . . . . . . XI-4
ARTICLE XII
OPTIONS TO PREPAY RENT AND
TERMINATE OBLIGATIONS HEREUNDER . . . . .XII-1
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ARTICLE XIII
MISCELLANEOUS
Section 13.1. Term of Agreement . . . . . . . . . . XIII-1
Section 13.2. Notices . . . . . . . . . . . .. . . XIII-1
Section 13.3. Binding Effect . . . .. . . . . . . . XIII-1
Section 13.4. Severability . . .. . . . . . . . . . XIII-1
Section 13.5. Amounts Remaining in Funds . . . . . XIII-1
Section 13.6. Amendments, Changes and Modification XIII-2
Section 13.7. Execution in Counterparts . . . . . . XIII-2
Section 13.8. Applicable Law . . . . . . . . . . . XIII-2
Section 13.9. Captions . . . . . . . . . . . . . .. XIII-2
EXHIBIT A - Legal Description
EXHIBIT B - Form of Requisition
EXHIBIT C - Permitted Encumbrances
EXHIBIT D - Form of Coordinate Lien Agreement
EXHIBIT E - Form of Standstill Agreement
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THIS LEASE AGREEMENT is dated as of January 15, 1996, between the
CAMDEN COUNTY IMPROVEMENT AUTHORITY (the "Issuer"), a public body politic and
corporate and an instrumentality exercising public and essential governmental
functions, organized and existing under the County Improvement Authorities Law,
L. 1960, c. 183, N.J.S.A. 40:37A-44 et seg. and XXXX HAULING AND WAREHOUSING
SYSTEM, INC., a corporation duly organized and validly existing under the laws
of the Commonwealth of Pennsylvania (the "Company").
W I T N E S S E T H:
WHEREAS, the Issuer was created pursuant to the Act for the purposes,
among other things, of providing within the County structures, franchises,
equipment and facilities for operation of public transportation or for terminal
purposes, including development and improvement of port terminal structures,
facilities and equipment, for public use in counties, in, along or through which
a navigable river flows; and
WHEREAS, the Issuer is authorized, pursuant to the Act, to issue its
bonds for the purpose of financing the cost of any public facility or
facilities; and
WHEREAS, the Issuer proposes to provide financial assistance in
connection with a certain project ("Project") consisting of the construction of
new public warehouse facilities on land to be leased to the Issuer within the
marine terminal complex owned by the Company in the City of Gloucester City,
County of Camden and State of New Jersey, such facilities to be leased to the
Company pursuant to this Agreement; and
WHEREAS, the Issuer proposes to issue its Lease Revenue Bonds (Xxxx
Hauling and Warehousing System, Inc. Project) 1996 Series A in the aggregate
principal amount of $24,500,000 (the "Bonds") pursuant to an Indenture of Trust
dated as of January 15, 1996 (the "Indenture") between the Issuer and The Bank
of New York (NJ), as trustee (the "Trustee") and proposes to apply the proceeds
of the sale of the Bonds to finance the construction of the Project (as
hereinafter defined); and
WHEREAS, the Issuer proposes to lease the Project to the Company
pursuant to this Agreement, pursuant to which the Company shall covenant to make
lease payments to the Issuer sufficient to pay all principal, premium, if any,
and interest when due on the Bonds and other amounts payable in connection with
the Bonds; and
WHEREAS, the Bonds shall be secured by the pledge of payments to be
made by the Company under this Agreement and by a mortgage from the Company and
000 Xxxxxxxx Xxx., Inc. to the Trustee on the Project Site, Project and Terminal
and a security interest in certain machinery and equipment constituting fixtures
of the
Company and of 000 Xxxxxxxx Xxx., Inc., subject and subordinate to the
Senior Mortgage Debt; and
WHEREAS, the Bonds shall be further secured by a mortgage on the
Project and a leasehold mortgage on the Project Site from the Issuer to the
Trustee which shall be subject and subordinate to the Senior Mortgage Debt; and
WHEREAS, the obligations of the Company under this Agreement and
payments due on the Bonds shall be guaranteed by the Company, X.X. Xxxxxxxx &
Co., Inc., Refrigerated Distribution Center, Inc., Oregon Avenue Enterprises,
Incorporated, Xxxx Cargo Systems, Inc., The Riverfront Development Corp., CRT,
Inc., Xxxxxx Xxxxx Ice, Inc., Xxxxxxxx Avenue Warehousing Corp., 000 Xxxxxxxx
Xxx., Inc., Refrigerated Enterprises, Inc., Dockside International Fish Co.,
Inc., Xxxxxx Marine Services, Inc., Wilmington Stevedores, Inc. and any other
person required to be a Guarantor (collectively, the "Guarantor") pursuant to
the Guaranty; and
WHEREAS, the Company and the Issuer each have full right and lawful
authority to enter into this Agreement, and to perform and observe the
provisions hereof on their respective parts to be performed and observed.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto covenant, agree and bind
themselves as follows; provided, that any obligation of the Issuer created by or
arising out of this Agreement shall never constitute a debt or a pledge of the
faith and credit of the Issuer, the County or any political subdivision or
taxing district of the State of New Jersey or of the taxing power of the County
or any political subdivision or taxing district of the State of New Jersey (the
Issuer has no taxing power), but shall be payable solely out of the Trust Estate
(as defined in the Indenture), anything herein contained to the contrary by
implication or otherwise notwithstanding:
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ARTICLE I
DEFINITIONS
Section 1.1. Definitions. All capitalized, undefined terms used herein
shall have the same meanings as used in Article I of the hereinafter defined
Indenture. In addition, the following words and phrases shall have the following
meanings:
"Act" means The County Improvement Authorities Act constituting Chapter
183 of the Pamphlet Laws of 1960 of the State of New Jersey as amended and
supplemented or any successor legislation, and any regulations and
administrative pronouncements promulgated thereunder.
"Affiliate" means any Person under the control of or in common control
or ownership (direct or indirect) of or with the Company or any Affiliate of the
Company or that is included on the Company's combined financial statements. For
the purposes of this definition and the definition of Related Party below,
"control" shall mean ownership or control (direct or indirect) of five percent
or more of the voting stock of the Person for which such determination is to be
made or the exercise of management control over the business and affairs of such
Person. The term "Affiliate" shall not be deemed to include any Person any
portion of which is owned or held by the Company solely for investment purposes
provided that (i) the Company does not own or hold more than 49% of such Person
and (ii) such Person is not included in the Company's consolidated financial
statements.
"Aggregate Combined Net Income" of a group of Persons for any specified
periods means the sum of the Combined Net Income of such group for each such
period in which Combined Net Income was greater than zero.
"Aggregate Debt Service" for any period shall mean with respect to the
Bonds, as of any date of calculation the sum of the amounts of the Debt Service
for such period with respect to all of the Bonds.
"Agreement" or "Lease Agreement" means this Lease Agreement as the same
may be amended, modified or supplemented from time to time in accordance with
its terms.
"Assignment" means the Assignment dated the Closing Date by and between
the Issuer, as assignor, and the Trustee, as assignee, assigning, subject to
such reservations as are contained therein, all of the Issuer's right, title and
interest in and to this Agreement and the other Lease Documents, as the same may
be amended, modified or supplemented from time to time.
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"Application" means the application submitted by the Company to the
Issuer requesting approval of the financing of the Project.
"Balloon Indebtedness" means Indebtedness more than 25% of the
principal amount of which is payable during any consecutive twelve-months,
whether at maturity, by mandatory sinking fund redemption or purchase, by
redemption or purchase at the option of the holders, or otherwise (other than
upon acceleration, optional prepayment or redemption, special mandatory
prepayment or redemption upon casualty to or condemnation of the Mortgaged
Premises and similar extraordinary events). The term "Balloon Indebtedness"
shall not include (i) a reimbursement obligation in respect of a drawing under a
letter of credit which is issued to secure or provide liquidity for Indebtedness
which would not otherwise be Balloon Indebtedness as defined in the immediately
preceding sentence or (ii) Indebtedness more than 25% of the principal amount of
which is payable during any consecutive twelve months by redemption or purchase
at the option of the holders and which would not otherwise be Balloon
Indebtedness as defined in the immediately preceding sentence, if the redemption
or purchase price is payable from a drawing under a letter of credit or other
liquidity facility.
"Bond" or "Bonds" means one or more of the Lease Revenue Bonds (Xxxx
Hauling and Warehousing System, Inc. Project) 1996 Series A of the Issuer in the
aggregate principal amount of $24,500,000 authorized to be issued pursuant to
the Bond Resolution, delivered under and pursuant to the Bond Resolution and
Indenture and any bonds issued in lieu of or in substitution therefor.
"Bond Counsel" with respect to the issuance and delivery of the Bonds
means Xxxxx & Samson, A Professional Corporation, having its offices at 0 Xxxxxx
Xxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, and subsequent thereto, such firm or any
other nationally recognized bond counsel reasonably satisfactory to the Issuer
and the Trustee.
"Bond Fund" means the fund so designated which is established and
created pursuant to Section 5.01 of the Indenture.
"Bond Purchase Agreement" means the bond purchase agreement dated as of
February 6, 1996 by and between the Issuer, the Company, the Guarantors and the
Underwriter relating to the issuance and sale of the Bonds, as the same may be
amended, modified or supplemented from time to time.
"Bond Resolution" means the resolution of the Issuer adopted on
September 14, 1995 authorizing the issuance and sale of the Bonds and the
execution and delivery of this Agreement, the Indenture, the Bond Purchase
Agreement, the Assignment, the other Lease Documents and determining other
matters in connection with the Project.
I-2
"Bond Year" means the one year period beginning on the day after
expiration of the preceding Bond Year. The first Bond Year begins on the Date of
Issue and ends on December 31, 1996.
"Business Day" means a day on which the Trustee and banks located in
New Jersey are open for the purpose of conducting a commercial banking business.
"Cash Flow" of a Person shall mean Net Income of such Person plus
depreciation and amortization charges and other non-cash charges to income plus
(or minus) any increase (or decrease) in deferred taxes.
"Chief Financial Officer" shall mean Xxxxxxx Xxxxxx, the Chief
Financial Officer of the Company, or such other individual functioning in a
substantially similar capacity on behalf of the Company as the Company shall
designate in a notice to the Trustee from time to time.
"Closing Date" means February 23, 1996.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor legislation, and the regulations promulgated thereunder.
"Collateral" means all of the rights and assets of the Company or any
other Person in which the Issuer or the Trustee is now or hereafter granted a
lien or security interest in order to secure the performance of the Company's
obligations under this Lease Agreement, or any of the Lease Documents, the
obligations of the Issuer hereunder or under the Bonds or the obligations of any
Guarantor under the Guaranty.
"Combined Cash Flow", "Combined Interest Charges", "Combined Net
Income" and "Combined Net Income Before Interest, Taxes, Depreciation and
Amortization" for any period shall mean, respectively, the Cash Flow, Interest
Charges, Net Income and Net Income Before Interest, Taxes, Depreciation and
Amortization of the Company and its Affiliates for such period, combined in
accordance with generally accepted accounting principles consistently applied.
"Combined Indebtedness" means the aggregate Indebtedness of the Company
and its Affiliates.
"Combined Long Term Indebtedness" means Long Term Indebtedness of the
Company and its Affiliates as such combination is effected in accordance with
generally accepted accounting principles consistently applied as to any date on
which the amount thereof shall be determined.
"Combined Net Income" for any period shall mean Net Income of the
Company and its Affiliates for such period, combined in
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accordance with generally accepted accounting principles consistently
applied.
"Combined Net Income Before Interest, Taxes, Depreciation and
Amortization" for any period shall mean the Net Income Before Interest, Taxes,
Depreciation Charges and Amortization of the Company and its Affiliates for such
period, combined in accordance with generally accepted accounting principles
consistently applied.
"Combined Tangible Net Worth" means (i) total combined shareholders'
equity in the Company and its Affiliates, determined in accordance with
generally accepted accounting principles consistently applied, as such
combination is effected in accordance with generally accepted accounting
principles consistently applied, less (ii) the aggregate net amount of the
following items to the extent, if any, that they were included in consolidated
assets or deducted from consolidated liabilities in computing shareholders'
equity:
(a) All licenses, patents, copyrights, tradenames, trademarks,
franchises, good will, experimental or organizational expense, unamortized debt
discount and expense, treasury stock and all other assets which under generally
accepted accounting principles are deemed intangible; and
(b) Any write-up of assets (other than current assets written up in
accordance with generally accepted accounting principles consistently applied)
made after January 1, 1996.
(c) Any stock or other security representing an investment subsequent
to January 1, 1996 that is a Restricted Payment under clause (v) of the
definition of Restricted Payment.
"Combined Total Assets" means the assets of the Company and its
Affiliates, combined in accordance with generally accepted accounting principles
consistently applied.
"Company" means Xxxx Hauling and Warehousing System, Inc., a
Pennsylvania corporation.
"Company Mortgage" means the Mortgage and Security Agreement from the
Company and 000 Xxxxxxxx Xxx., Inc. to the Trustee dated as of January 15, 1996,
pursuant to which the Company and 000 Xxxxxxxx Xxx., Inc. are granting to the
Trustee a mortgage lien on and security interest in the Mortgaged Premises,
subject and subordinate to the Senior Mortgage Debt.
"Company Representative" means the person or persons at the time
designated to act on behalf of the Company by written certificate furnished to
the Issuer and the Trustee containing the signature of such person or persons
and signed on behalf of the Company by its President or any Vice President. Such
certificate may designate an alternate or alternates.
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"Condemnation Claims" shall have the meaning set forth in Section
8.4(b).
"Construction Monitor" means the Person, which may be the Issuer,
engaged by the Company, with the consent of the Bondholders owning not less than
50% in aggregate principal amount of the Bonds Outstanding, to perform the
functions specified in Section 3.2 or Section 3.5 of this Agreement.
"Cost" with respect to the Project shall be deemed to include all items
permitted to be financed under the provisions of the Act, including, but not
limited to:
(a) the cost of planning all or any part of the Project and of all or
any property, rights, easements, privileges, agreements and franchises deemed by
the Issuer to be necessary or useful and convenient therefor or in connection
therewith, including interest or discount on the Bonds;
(b) costs of issuance of the Bonds;
(c) architectural, engineering and inspection costs and legal expenses;
(d) costs of financial, professional and other estimates and advice;
(e) organization, administrative, operating and other expenses of the
Company prior to and during such construction;
(f) all costs which the Issuer or the Company shall be required to pay
under the terms of any contract or contracts for the construction, improving, or
equipping of the Project;
(g) obligations of the Company incurred for labor and materials
(including obligations payable to the Company) in connection with the
construction, improving or equipping of the Project, including reimbursement to
the Company for all advances and payments made in connection with the Project
prior to or after delivery of the Bonds;
(h) the cost of performance or other bonds and any and all types of
insurance that may be necessary or appropriate to have in effect during the
course of construction of the Project;
(i) any sums required to reimburse the Company for advances made by the
Company for any of the above items or for any other costs incurred which are
properly chargeable to the Project; and
(j) such other expenses as may be necessary or incident to the
financing or operation of the Project and the placing of the
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same fully in operation, and also such provision or reserves for working
capital, operating, maintenance or replacement expenses or for payment or
security of principal and other interest on the Bonds during or after such
construction as the Issuer may determine, and also reimbursement to the Issuer
or any governmental unit or person of any monies theretofore expended for the
purposes of the Project.
"County" shall mean the County of Camden in the State of New Jersey.
"Cumulative Combined Net Income" for any specified periods means the
sum of Combined Net Income for each of such periods (subtracting Combined Net
Income for any period in which it is negative, as appropriate).
"Date of Issue" or "Issue Date" shall have the meaning set forth in the
Tax Certificate.
"Debt Service" means, for any Bond Year, the scheduled amount of
interest and amortization of principal payable for that Bond Year with respect
to the Bonds; provided, however, that in determining Debt Service for any Bond
Year, there shall not be taken into account amounts scheduled with respect to
any Bonds (or portion thereof) that have been retired before the beginning of
the Bond Year. The determination of Debt Service on the Bonds, for purposes of
complying with the applicable provisions of Sections 103 and 141-150 of the
Code, shall be made on the first day of each Bond Year in the manner provided in
Section 148 (d) of the Code and the regulations promulgated thereunder.
"Default" means any Default under this Agreement as specified in and
defined by Section 11.1 hereof.
"Depreciation Charges" means for any Person for any period the
aggregate of (i) depreciation expense as reflected in the Company's combined
statement of income for such period in accordance with generally accepted
accounting principles consistently applied plus (ii) in the case of property
leased pursuant to operating leases, the average of the amount described in
clause (A) in the Operating Lease Schedule for such year and in the Operating
Lease Schedule for the preceding year.
"Discount Rate" shall be the interest rate described as the Discount
Rate in the definition of "Operating Lease Schedule."
"Distribution Fund" shall have the meaning set forth in Section 2.4(f)
hereof.
"ERISA" means the federal Employee Retirement Income Security Act of
1974, as amended, and the rules and regulations thereunder.
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"Excess Amount" means, as of any payment date, the amount in the Bond
Fund on such date in excess of the amount required for the payment of
principal, accrued interest and premium, if any, on the Bonds due on such date.
"Extraordinary Tax Liability" shall mean any tax liability payable by
any shareholders of the Company or any Affiliate in respect of extraordinary or
non-recurring items of income or non-operating revenues or revenues other than
operating revenues of the Company or any Affiliate consisting of the receipt of
cash by, or the accrual of cash payable to, the Company or an Affiliate.
"Fiscal Year" means January 1 through December 31.
"Gross Proceeds" shall have the meaning set forth in the Tax
Certificate.
"Ground Lease" means the Ground Lease Agreement between the Company and
the Issuer dated as of January 15, 1996.
"Guarantor" means any of the Company, X.X. Xxxxxxxx & Co., Inc.,
Refrigerated Distribution Center, Inc., Oregon Avenue Enterprises, Incorporated,
Xxxx Cargo Systems, Inc., The Riverfront Development Corp., CRT, Inc., Xxxxxx
Xxxxx Ice, Inc., Xxxxxxxx Avenue Warehousing Corp., Refrigerated Enterprises,
Inc., 000 Xxxxxxxx Xxx., Inc., Dockside International Fish Co., Inc., Xxxxxx
Marine Services, Inc., Wilmington Stevedores, Inc. and any other Person required
to be a guarantor under the Guaranty.
"Guaranty" means the Guaranty Agreement dated as of January 15, 1996
among the Guarantors, the Issuer and the Trustee, and any amendments or
supplements thereto.
"Indebtedness" means, for any Person, (i) all indebtedness of such
Person for borrowed money or for the deferred purchase price of property, (ii)
all direct or indirect guaranties of such Person in respect of and all
obligations or undertakings (contingent or otherwise) of such Person to purchase
or otherwise acquire, or otherwise to assure a creditor against loss in respect
of, indebtedness of any other Person for borrowed money or for the deferred
purchase price of property, (iii) Operating Lease Debt, as most recently
calculated, (iv) any guaranty of another Person's Indebtedness, to the extent
such liability or contingent liability has not otherwise been included as
Indebtedness and (v) all other obligations, contingent or otherwise, which in
accordance with generally accepted accounting principles consistently applied
shall be classified upon the obligor's balance sheet as liabilities, including
liabilities secured by any lien on any property owned or acquired by the obligor
or a Subsidiary thereof, whether or not the liabilities secured thereby shall
have been assumed, capitalized leases and all guaranties, endorsements and other
contingent obligations. For purposes of determining the amount of Indebtedness
of
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a Person, the total amount of Indebtedness of another Person as to which such
Person is obligated as described in clause (ii) or (iv) above, or the total
possible payments which such Person may become obligated to make in respect of a
contingent liability, shall be considered Indebtedness of such Person.
Notwithstanding anything herein to the contrary, Indebtedness, for any Person,
shall not mean the amount available to be drawn under any letters of credit
issued with respect to a liability or contingent liability of the Company or any
of its Affiliates.
"Indemnified Matters" shall have the meaning set forth in Section
10.2(d) hereof.
"Indemnified Party" shall have the meaning set forth in Section
10.2(b).
"Indemnitees" shall have the meaning set forth in Section 10.2(d)
hereof.
"Indenture" means the Indenture of Trust dated as of January 15, 1996
between the Issuer and the Trustee, pursuant to which the Bonds are authorized
to be issued, and any amendments and supplements thereto.
"Interest" means, for any period, interest accruing during such period
on Indebtedness, provided that (i) interest on a capitalized lease shall consist
of the interest component of each lease payment and (ii) with respect to
Operating Lease Debt, interest shall consist of the amount set forth in clause
(v) of the applicable Operating Lease Schedule.
"Interest Charges" means for any Person for any four consecutive
quarterly fiscal periods, the aggregate of (i) all interest expenses (including,
without limitation, any letter of credit fees) as reflected on the Company's
combined statement of income for such period in accordance with generally
accepted accounting principles consistently applied, plus (ii) any other
Interest accruing in such period on Indebtedness of such Person, to the extent
not included in clause (i).
"Issuer" means the Camden County Improvement Authority, a body politic
and corporate constituting an instrumentality exercising governmental functions
and any body, board, authority, agency or political subdivision or other
instrumentality of the State which shall hereafter succeed to the powers, duties
and functions thereof.
"Issuer's Mortgage" means a mortgage and security agreement from the
Issuer to the Trustee dated as of January 15, 1996, pursuant to which the Issuer
is granting to the Trustee a leasehold mortgage on the Issuer's interest in the
Project Site and a
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mortgage on the Issuer's fee interest in the Project, subject and
subordinate to the Senior Mortgage Debt.
"Issuer Representative" means the Chairman, Vice Chairman, Executive
Director/Secretary or such other person or persons at the time designated by the
Issuer to act on its behalf.
"Laws" shall have the meaning set forth in Section 10.2(d) hereof.
"Lease Documents" means any or all of this Agreement, the Indenture,
the Bond Purchase Agreement, the Ground Lease, the Guaranty, the Issuer's
Mortgage, the Company Mortgage and all documents, certificates and instruments
executed in connection therewith.
"Lease Term" shall mean the term of this Lease Agreement as set forth
in Section 5.1 hereof.
"Liens" means any mortgages, pledges, liens or other charges or
encumbrances of any kind (including the charge upon property purchased under
conditional sale or other title retention agreements) upon, or any security
interest in, any property, real or personal, tangible or intangible.
"Long Term Indebtedness" means all Indebtedness which would, in
accordance with generally accepted accounting principles consistently applied,
constitute long term debt, but in any event shall include:
(i) any portion thereof included in current liabilities,
(ii) any Indebtedness outstanding under a revolving credit or similar
agreement providing for borrowings (and renewals and extensions thereof) over a
period of more than one year notwithstanding that any such Indebtedness may be
payable on demand or not more than one year after the creation thereof, and
(iii) any guarantee with respect to Long Term Indebtedness (of the kind
otherwise described in this definition) of another Person.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgaged Premises" means, collectively, the Project, the Project Site
and the Terminal.
"Mortgages" means, collectively, the Company Mortgage and the Issuer's
Mortgage.
"Net Income" of a Person means the net income of such Person determined
in accordance with generally accepted accounting
I-9
principles consistently applied, (i) exclusive of extraordinary or non-recurring
items of income and of any non-operating revenues or revenues other than
operating revenues, and (ii) provided that prior to application of this clause
(ii) the Company and its Affiliates would be permitted to incur at least $1.00
of Indebtedness pursuant to Section 2.4(h) of this Agreement, exclusive of
extraordinary or non-recurring losses, deductions or expenses or losses,
deductions and expenses other than operating losses, deductions and expenses. In
determining Net Income for purposes of this Agreement, interest expense shall be
adjusted to reflect Interest Charges, depreciation expense shall be adjusted to
reflect Depreciation Charges and selling, general and administrative expense
shall be reduced by the amount of any Interest Charges and Depreciation Charges
attributable to Operating Lease Debt.
"Net Income Before Interest, Taxes, Depreciation and Amortization" of a
Person means the Net Income of such Person, plus the amounts deducted for
Interest, taxes based upon the income of such Person, Depreciation Charges and
amortization in determining such Net Income.
"Net Proceeds," when used with respect to any insurance proceeds or
any condemnation award, means the amount remaining after deducting all expenses
(including attorneys' fees and disbursements) incurred in the collection of such
proceeds or award from the gross proceeds thereof.
"Nonpurpose Investment" shall have the meaning set forth in the Tax
Certificate.
"Operating Lease Debt" shall be the capitalized equivalent of the
operating leases of the Company and its Affiliates, as set forth in clause (iv)
of the applicable Operating Lease Schedule.
"Operating Lease Schedule" means a schedule, to be filed by the Company
with the Trustee each year together with its audited financial statements and to
be filed retroactively with respect to the 1994 fiscal year, that sets forth the
following data: (i) operating lease payments due in each of the five fiscal
years succeeding the most recent fiscal year for which audited combined
financial statements of the Company exist, as reflected in the footnotes to such
financial statements; (ii) the aggregate operating lease payments due after the
five year period described in clause (i) (the "Thereafter Amount"); (iii) the
Thereafter Amount divided by the operating lease payments (the "Fifth Year
Payments") due in the last year described in clause (i) (such quotient, the
"Number of Thereafter Years"); (iv) the present value on the applicable date of
calculation, using a rate equal to the Discount Rate, of the payments described
in clause (i) and of the Thereafter Amount, assuming that the Thereafter Amount
is paid in installments equal to the Fifth Year Payments for the Number of
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Thereafter Years, beginning in the first fiscal year after the end of the period
described in clause (i) (such present value referred to herein as "Operating
Lease Debt"); (v) the Discount Rate times the average of Operating Lease Debt
for such year and the Operating Lease Debt determined in the Operating Lease
Schedule filed for the immediately preceding fiscal year. The "Discount Rate"
shall be the interest rate in effect on the date of calculation on the Company's
line of credit, or, if there shall be more than one line of credit in effect on
such date, the average of such interest rates or, if there shall be no line of
credit in effect at the time, the interest rate that would be applicable on the
date of calculation if the most recent line of credit of the Company were still
in effect.
"Owner" means the person or persons in whose name or names a Bond shall
be registered on the books of the Issuer kept for that purpose in accordance
with the provisions of the Indenture.
"Parity Indebtedness" shall have the meaning set forth in Section
2.4(k) hereof.
"Permitted Encumbrances" means, as of any particular time, (i) those
items shown in Exhibit C hereto, and (ii) any Lien on the facilities financed as
part of the Mortgaged Premises securing Indebtedness hereafter incurred by the
Company or any of its Affiliates, and any lease of the whole or any part of the
facilities financed as part of the Mortgaged Premises, provided such Lien or
lease is expressly permitted under this Agreement.
"Person" or "Persons" means any one or more individuals, corporations,
partnerships, joint ventures, trusts, unincorporated organizations, governmental
agencies or political subdivisions.
"Plans" shall have the meaning set forth in Section 2.2(f) hereof.
"Prime Rate" means a fluctuating interest rate per annum equal to the
rate published in the Wall Street Journal from time to time as the prime lending
rate; any change in the Prime Rate shall be effective on the date such change is
published in the Wall Street Journal.
"Project" shall mean (i) the construction by the Company of
approximately 155,000 square feet of refrigerated warehouse space, (ii) the
construction by the Company of approximately 31,000 square feet of dry
warehouse space, and (iii) the construction by the Company of approximately
20,000 square feet of office space, all to be located on a portion of the
Terminal in the City of Gloucester City, Camden County, New Jersey.
"Project Fund" means the fund so designated which is established and
created pursuant to Section 5.05 of the Indenture.
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"Project Municipality" means the City of Gloucester City, County of
Camden, New Jersey.
"Project Site" means the land leased by the Company to the Issuer
pursuant to the Ground Lease and subleased by the Issuer to the Company herein,
located in the Project Municipality, as more particularly described in Exhibit A
hereto and to the Ground Lease.
"Purchaser" shall mean the initial purchaser or purchasers of the Bonds
from the Underwriter and their respective successors and assigns.
"Rebate Amount" shall have the meaning set forth in the Tax
Certificate.
"Rebate Fund" means the fund so designated which is established
pursuant to Section 5.12 of the Indenture.
"Refunding Senior Indebtedness" shall have the meaning set forth in
Section 2.4(k) hereof.
"Related Party" means the Company or any Affiliate, any Person
controlling the Company or Affiliate and any director or employee of the Company
or any Affiliate.
"Related Person" shall have the meaning set forth in the Tax
Certificate.
"Rent" shall mean the lease payments specified in Section 6.1(a) of
this Lease Agreement.
"Requisition" means a written request for a disbursement from the
Project Fund or the separate trust fund described in Section 8.2 hereof, as the
case may be, signed by a Company Representative, substantially in the form
attached hereto as Exhibit B and satisfactorily completed as contemplated by
said form.
"Restricted Payment" means:
(i) The declaration of any dividend on, or the incurrence of
any liability to make any other payment or distribution in respect of,
any shares of the Company or its Affiliates (other than one payable
solely in its common shares); provided, however, that any dividend to
the Company from any Affiliate shall not constitute a Restricted
Payment;
(ii) Any payment or distribution on account of the purchase,
redemption or other retirement of any shares of the Company or its
Affiliates or of any warrant, option or other right to acquire such
shares, or any other payment or distribution made in respect thereof,
either directly or indirectly, except any payment or distribution on
account of
I-12
(A) the principal of and prepayment charge, if any, on
convertible debt, or (B) the purchase, redemption or other retirement
of shares of the Company, or its Affiliates in exchange for, or out of
the net cash proceeds received by the Company, or its Affiliates from a
substantially concurrent sale of, other shares of the Company, its
Affiliates;
(iii) Any payment or distribution on account of the principal
and prepayment charge, if any, with respect to subordinated debt of the
Company, or its Affiliates other than mandatory sinking fund or other
retirement payments required by the terms thereof, and other than any
working capital line of credit;
(iv) Any payment (including any deemed payment under Section
2.4(i)) on account of principal, including mandatory sinking fund or
other retirement payments, in respect of Balloon Indebtedness issued or
incurred subsequent to the date of issuance of the Bonds (other than
(a) payments on account of Refunding Senior Indebtedness incurred to
refinance Senior Indebtedness with a Lien on the Mortgaged Premises
Senior to the Lien of the Mortgages, or (b) any repayment of
Indebtedness under a working capital line of credit incurred in
compliance with this Agreement); and
(v) Any investment by the Company or any Affiliate in, or
transfer (other than in the ordinary course of business) of cash or
other assets by the Company or any Affiliate to, any Person other than
the Company or an Affiliate; provided that investments in publicly
traded securities in the ordinary course of business shall not be
considered Restricted Payments.
The amount of any Restricted Payment in property shall be deemed to be
the greater of its fair market value (as determined by an independent
recognized appraiser) or its net book value.
"Security Ratio" means at any time the value of the property subject to
the lien of the Mortgages, as such value is determined by an appraisal required
by Paragraph 2.4 (k) hereof, divided by the aggregate amount of Indebtedness
secured by the Mortgaged Premises or any portion thereof.
"Senior Indebtedness" means any Indebtedness secured by a lien on all
or any portion of the Mortgaged Premises which is senior to, or on a parity
with, the lien of the Mortgages securing the Bonds, whether now outstanding or
hereafter incurred.
"Senior Mortgage Debt" means all obligations of the Issuer, the Company
or any Guarantor in respect of or relating to (i) $18,750,000 New Jersey
Economic Development Authority Economic Development Bonds (Xxxx Hauling and
Warehousing System, Inc. - 1983
I-13
Project) Series D Senior Mortgage; (ii) $8,500,000 New Jersey Economic
Development Authority Economic Development Bonds (Xxxx Hauling and Warehousing
System, Inc. - 1983 Project) Series E Senior Mortgage; (iii) $5,000,000 New
Jersey Economic Development Authority Economic Development Bond (Xxxx Hauling
and Warehousing System, Inc. - 1983 Project) 1995 Series J; (iv) indebtedness
secured by a mortgage made by the Company to the City of Gloucester City, dated
March 15, 1984 in the original principal amount equal to $3,345,533; (v)
indebtedness secured by a mortgage made by the Company to the City of Gloucester
City dated April 18, 1984, in the original principal amount equal to $250,000;
(vi) indebtedness secured by a mortgage made by the Company to the City of
Gloucester City dated August 22, 1984 in the original principal amount equal to
$2,000,000; (vii) $10,000,000 New Jersey Economic Development Authority
Economic Development Bonds (Xxxx Hauling and Warehousing System, Inc. - 1983
Project) Series G Refunding (Non-AMT); (viii) $9,000,000 New Jersey Economic
Development Authority Economic Development Bonds (Xxxx Hauling and Warehousing
System, Inc.-1983 Project) Series H Refunding (AMT); (ix) $6,140,000 New Jersey
Economic Development Authority Economic Development Bond (777 Xxxxxxxx Ave.,
Inc. - 1988 and 1989 Projects) 1992 Refunding Series; (x) $7,000,000
Philadelphia Authority for Industrial Development Revenue Bonds (Refrigerated
Enterprises, Inc. Project) Series of 1992; and (xi) $18,500,000 Camden County
Improvement Authority Lease Revenue Bonds (Dockside Refrigerated Warehouses,
Inc. Project) Series 1994 and any Senior Indebtedness secured by a lien on the
Mortgaged Premises senior to the lien securing the Bonds incurred hereafter by
the Company or any Affiliate in accordance with the provisions of the Agreement.
"S & P" means Standard & Poor's Corporation.
"State" means the State of New Jersey.
"Subsidiary" means any entity of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of whether
or not at the time stock of any other class or classes of such corporation shall
have or might have voting power by reason of the happening of any contingencies)
is at the time directly or indirectly owned or controlled by the Company or one
or more of its subsidiaries.
"Substantial User" shall have the meaning set forth in the Tax
Certificate.
"Tax Certificate" means the Tax Regulatory Agreement entered into
between the Issuer and the Company on the Closing Date.
"Taxes" shall have the meaning set forth in Section 2.4(o) and 7.3(a)
hereof.
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"Term" or "Lease Term" means the term of this Agreement as specified in
Article V hereof.
"Terminal" means the marine terminal complex owned by the Company and
located on the land more particularly described in Schedule A of the Company
Mortgage.
"Trustee" means The Bank of New York (NJ), a state banking corporation
organized and existing under the laws of the State of New Jersey, and its
successors and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party and any successor trustee at
the time serving as successor trustee under the Indenture. "Principal Office"
of the Trustee means the address specified in Section 12.04 of the Indenture or
such other address as may be designated in writing to the Issuer and the
Company.
"Underwriter" means PaineWebber Incorporated and its successors and
assigns.
"Uniform Commercial Code" means the Uniform Commercial Code, Title 12A
of the New Jersey Statutes, as enacted and in force and effect in the State.
"Yield" shall have the meaning set forth in the Tax Certificate.
Section 1.2. Interpretation and Construction. In this Lease Agreement,
unless the context otherwise requires:
(1) Articles and Sections mentioned by number only are the respective
Articles and Sections of this Lease Agreement so numbered as originally
executed;
(2) Words importing a particular gender mean and include every other
gender, and words importing the singular number mean and include the plural
number and vice versa;
(3) Words importing persons mean and include firms, associations,
partnerships (including limited partnerships), societies, trusts, public or
private corporations or other legal entities, including public or governmental
bodies, as well as natural persons;
(4) Any headings preceding the texts of the several Articles and
Sections of this Lease Agreement, and any table of contents or marginal notes
appended to copies hereof, shall be solely for convenience of reference and
shall not constitute a part of this Lease Agreement, nor shall they affect its
meaning, construction or effect;
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(5) If any clause, provision or section of this Lease Agreement or the
application thereof to any circumstance shall be ruled invalid or unenforceable
by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any of the remaining provisions hereof or the application
of such clause, provision or section to circumstances other than those as to
which it is held invalid or unenforceable; and
(6) References herein to the Issuer, the Trustee, the Company and the
Purchaser shall include their respective successors and assigns.
[END OF ARTICLE I]
I-16
ARTICLE II
REPRESENTATIONS, COVENANTS AND
WARRANTIES
Section 2.1. Representations and Covenants of the Issuer.
(a) The Issuer represents and covenants that:
(1) The Issuer is a public body politic and corporate and an
instrumentality exercising essential governmental functions, duly organized and
existing under the Act. Under the provisions of the Act, the Issuer is
authorized to enter into the transactions contemplated by this Lease Agreement,
the Ground Lease, the Issuer's Mortgage and the Indenture and to carry out its
obligations hereunder and thereunder. The Issuer has been duly authorized to
execute and deliver this Agreement, the Ground Lease, the Issuer's Mortgage and
the Indenture and the other Lease Documents to which it is a party.
(2) The Issuer covenants that it will not pledge the amounts derived
from this Lease Agreement other than as contemplated by the Indenture.
(b) All covenants, stipulations, promises, agreements and obligations
of the Issuer set forth herein shall be deemed to be the covenants,
stipulations, promises, agreements and obligations of the Issuer and not of any
member, officer or employee of the Issuer in his or her individual capacity, and
no recourse shall be had for the payment of the principal or redemption price of
or interest on the Bonds or for any claim based thereon or hereunder against any
member, officer or employee of the Issuer or any person executing the Bonds.
Section 2.2. Representations and Warranties of the Company. The Company
represents and warrants that:
(a) Corporate Status. Each of the Company and each Affiliate is a duly
organized and validly existing corporation in good standing under the laws of
the state of its incorporation. Each of the Company and each Affiliate is duly
qualified or licensed as a foreign corporation in good standing in every
jurisdiction in which the nature of the business conducted by it makes such
qualification or licensing necessary.
(b) Corporate Power and Authority. Each of the Company and each
Affiliate has the corporate power and authority to own its property and assets
and to transact the business in which it is engaged or presently proposes to
engage. Neither the Company nor any Affiliate is in violation of any provision
of its Certificate of Incorporation, as amended. Each of the Company and each
Affiliate has the corporate power and authority to execute,
II-1
deliver, perform its obligations under, and consummate the transactions
contemplated by this Agreement and the other Lease Documents to which it is a
party; and has taken all necessary corporate action (including, without
limitation, any consent of stockholders required by law or by its charter or
by-laws) to authorize the execution and delivery of this Agreement and each of
the other Lease Documents to which it is a party. This Agreement and the Lease
Documents to which the Company is a party each constitutes the legal, valid, and
binding obligations of the Company, in accordance with their terms subject to
applicable bankruptcy, insolvency, or other similar laws relating to creditors'
rights generally.
(c) No Litigation. There is no action, suit, proceeding, inquiry, or
investigation pending or, to the knowledge of the Company or any Affiliate,
threatened against or affecting the Company or any Affiliate, their officers, or
any of their respective properties, by or before any court, arbitrator or
governmental, administrative, or public body or agency, nor to the best
knowledge of the Company is there any basis therefor, which might result in any
material adverse change in the operations, business, property, or assets or in
the condition (financial or otherwise) of the Company or any Affiliate which
involves the possibility of materially adversely affecting the ability of the
Company to comply with this Agreement or any of the other Lease Documents to
which the Company is a party, or which would adversely affect, in any way, the
validity or enforceability of the Bonds, this Agreement, any of the Lease
Documents to which the Company is a party, or any agreement or instrument to
which the Company or any Affiliate is a party, used or contemplated for use in
the consummation of the transactions contemplated hereby. Neither the Company
nor any Affiliate is in default in any material respect with respect to any
judgment, order, writ, injunction, decree, rule or regulation of any
governmental instrumentality or agency.
(d) No Violation.
(i) Neither the execution and delivery of this Agreement or the Lease
Documents, nor the consummation of any of the transactions herein or therein
contemplated, nor the fulfillment of or compliance with the terms and provisions
hereof or thereof, will contravene any provision of any law, statute, rule or
regulation to which the Company or any Affiliate is subject or any judgment,
decree, license, order, or permit applicable to the Company or any Affiliate, or
will conflict or be inconsistent with, or will result in any breach of, any of
the terms, covenants, conditions or provisions of, or constitute a default
under, or result in the creation or imposition of any Lien, security interest,
charge or encumbrance whatsoever upon any of the property or assets of the
Company or an Affiliate pursuant to the terms of any indenture, mortgage, deed
of trust, agreement, or other instrument to which the Company or any Affiliate
is a party or by which any of
II-2
them may be bound, or to which any of them may be subject, or violate any
provision of the charter or by-laws of the Company or any Affiliate.
(ii) Neither the Company nor any Affiliate is a party to any contract
or agreement or subject to any charter or other corporate restriction which
materially and adversely affects its business, property, assets or financial
condition. Neither the Company nor any Affiliate is a party to, or otherwise
subject to, any provision contained in any instrument evidencing Indebtedness of
the Company or such Affiliate, any agreement relating thereto, or any other
contract or agreement (including its charter) which restricts or otherwise
limits the incurring of the Indebtedness to be represented by this Agreement and
the other Lease Documents which has not been waived in connection with such
Indebtedness.
(e) Governmental Approval. No consent or approval of, or filing with,
or exemption by, any governmental or public body or authority is required to
authorize, or is required in connection with the execution, delivery, and
performance of, this Agreement, any of the other Lease Documents, or of any of
the instruments or agreements herein or therein referred to, or the taking of
any action hereby or thereby contemplated. Each of the Company and each
Affiliate and the Project is in compliance in all material respects with all
applicable requirements of all federal, state, regional and local laws and with
rules and regulations of federal, state, regional and local governmental and
regulatory bodies. Without limiting the foregoing, each of the Company, each
Affiliate and the Project is in compliance with all applicable environmental
laws, except as disclosed in the reports of Pennoni Associates, Inc.,
respectively dated March 7, 1994, April 11, 1995 and January 29, 1996,
heretofore furnished by the Company to the Issuer, the Underwriter and the
Purchaser.
(f) Compliance with ERISA. The pension or other employee benefit plans
which are established or maintained by the Company and its Affiliates (the
"Plans"), if any, are in substantial compliance with ERISA; no Plan is insolvent
or in reorganization; no plan has an accumulated or waived funding deficiency
within the meaning of Section 412 of the Code; neither the Company nor any of
its Affiliates, nor any other Person treated as part of the same "controlled
group" as the Company or any Affiliate within the meaning of Paragraph 414 of
the Code, has incurred any material liability (including any material contingent
liability) to or on account of a Plan pursuant to Paragraph 4062, 4063, 4064,
4201, or 4204 of ERISA or expects to incur any liability under any of the
foregoing Paragraphs on account of the termination of participation in or
contributions to any such Plan; no proceedings have been instituted to terminate
any Plan; no condition exists which presents a material risk to the Company or
any of its Affiliates, respectively, of incurring a liability to or on account
of a Plan pursuant to any of the foregoing Paragraphs of
II-3
ERISA; and no lien imposed under the Code or ERISA on the assets of the Company
or any of its Affiliates exists or is likely to arise on account of any Plan.
(g) Title to Property. The Company and each of its Affiliates have good
and marketable title to all of their respective properties and assets, and the
Company has a good and valid leasehold in the Project, and all such properties
and assets are owned or leased free and clear of Liens, except (A) materialmen's
and mechanic's Liens which do not materially detract from the value or interfere
with the present or anticipated business use of the properties subject thereto,
and (B) Permitted Encumbrances. Upon execution and delivery of this Agreement
and the documents contemplated hereby and upon any filings or recordings made in
connection therewith, the Company Mortgage will be a valid lien on the Project
subject and subordinate only to Permitted Encumbrances.
(h) Tax Returns. All tax returns and tax reports of the Company and
each former and present Affiliate required by law to be filed have been duly
filed, and all taxes, assessments, and other governmental charges or levies
(other than those presently payable without penalty and those currently being
contested in good faith for which adequate reserves have been established) upon
the Company, or any of its former or present Affiliates (or any of their
properties) which are due and payable have been paid in full. The charges,
accruals and reserves on the books of the Company and its Affiliates in respect
of federal income tax for all periods are adequate in the opinion of the
Company.
(i) Disclosure. There is no fact known to the Company which materially
adversely affects or in the future may (so far as the Company can now foresee)
materially adversely affect the business, property, assets, or financial
condition of the Company or any Affiliate which has not been disclosed to the
Issuer and the Purchaser.
(j) The Project. The Project is included within the definition of a
"public facility" in the Act and the Company will operate or cause the Project
to be operated as a "public facility" under the Act.
(k) Compliance with Laws. The Company will cause the Project to be
constructed and operated in accordance with the laws, rulings, regulations, and
ordinances of federal and state governmental bodies and the departments,
agencies and political subdivisions thereof. The Company has obtained or caused
to be obtained all requisite approvals or permits or licenses of the State and
of other federal, state, regional and local governmental bodies for the
operation of the Project, and will obtain or cause to be obtained any such
approvals, permits or licenses as may be required in the future from time to
time.
II-4
(1) Information in Application Accurate. All information and data
contained in the Application relating to the Company were true, correct, and
complete in all material respects as of the respective dates thereof. Aside from
financial information relating to the Company, which information has not been
updated since the dates of submission of the Application, no information has
been omitted therefrom which would make the Application misleading in any
material respect, and the Application does not contain any untrue statement of a
material fact and does not omit to state a material fact necessary in order to
make the statements contained therein not misleading or incomplete.
(m) No Untrue Statements. The representations, statements, and
warranties of the Company set forth in the Application, this Agreement, or any
other Lease Document (1) are true, correct, and complete in all material
respects, (2) do not contain any untrue statement of a material fact, and (3) do
not omit to state a material fact necessary in order to make the statements
contained herein or therein not misleading or incomplete. The Company
understands that all such statements, representations, and warranties have been
relied upon as an inducement by the Issuer to issue the Bonds and the Purchaser
to purchase the Bonds.
(n) Brokerage Commissions. Except for a fee payable to the Underwriter,
no Person is entitled to receive from the Company or any other Person any
brokerage commission, finder's fee, or similar fee or payment in connection with
the consummation of the transactions contemplated by this Agreement.
(o) ownership of Guarantors. Xxxxxx Xxxx owns not less than eighty
(80%) percent of the issued and outstanding voting stock of each Guarantor other
than Dockside International Fish Co., Inc., of which he owns seventy (70%)
percent of the issued and outstanding voting stock, and other than Wilmington
Stevedores, Inc. one hundred (100%) percent of the stock of which is owned by
Xxxxxx Marine Services, Inc.
(p) Inactive Affiliates. The following entities are inactive and have
no assets or revenues: Xxxx Cargo Systems of California, Inc., Xxxx Warehousing
Company, Marine Information Technology, Inc., T. and L. Leasing Corp., Broadway
Equipment Leasing Corp. If any such entity becomes active or obtains assets or
revenues, the Company shall cause it, if it is an Affiliate, to become a
Guarantor upon the occurrence of such event.
(q) Agrgements with Working Capital Credit Provider. The Company is in
good standing under its July 20, 1995 loan agreement with Meridian Bank and any
other existing credit facilities with Meridian Bank (collectively, the "Meridian
Agreements"). The Company has received no communications from Meridian Bank as
to any defaults or potential defaults under the
II-5
Meridian Agreements. The Company will notify the Bondholders promptly upon
receipt of any communication from Meridian Bank alleging that the Company is in
default or potential default under the Meridian Agreements or to the effect that
the Meridian Agreements or the availability of additional advances of credit
thereunder have been terminated or suspended.
Section 2.3. Environmental Representations, Warranties and Covenants.
(a) The Company represents and warrants that:
(i) the Company has never discharged any radioactive substances and is
not in any way responsible for the presence of radioactive substances at the
Xxxx Hauling and Warehousing System, Inc. Marine Terminal Facility in
Gloucester, New Jersey (the "Facility");
(ii) the release of radioactive substances at the Company and any
damage resulting therefrom were caused solely by the act or omission of a third
party other than (a) an employee or agent of the Company or (b) one whose act or
omission occurred in connection with a contractual relationship existing
directly or indirectly with the Company;
(iii) the Company has done nothing to disturb the radioactive
substances located at the facility and otherwise has exercised due care with
respect to the radioactive substances concerned, taking into consideration the
characteristics of such radioactive substances, in light of all relevant facts
and circumstances;
(iv) the Company has taken precautions against (a) foreseeable acts or
omissions of any third party described in paragraph (ii) above, and (b) the
consequences that could forseeably result from such acts or omissions;
(v) the Company acquired the Facility in 1970, after the disposal,
discharge or placement of the radioactive substances on, in or at the Facility;
(vi) at the time the Company acquired the Facility, the Company did not
know and had no reason to know that any radioactive substances were disposed of
on, in or at the Facility;
(vii) the Company undertook, at the time of acquisition, all
appropriate inquiry into the previous ownership and uses of the property
consistent with good commercial and customary practice; and
II-6
(viii) the Company was first advised of the existence of radioactive
substances on its property by the New Jersey Department of Environmental
Protection in February, 1991.
(b) The Company covenants that it shall complete the actions described
in Section 5. 07 (c) (i) - (v) of the Indenture (other than receipt of No
Further Action letters from the State of New Jersey) no later than April 30,
1996 and that is shall diligently pursue such No Further Action letters and the
delivery of the report from Pennoni Associates referenced in Section 5.07(c) of
the Indenture.
Section 2.4. Covenants of the Company. The Company agrees that, so long
as any of the Bonds are outstanding or any amounts are due under this Agreement
or under any of the Lease Documents, it shall comply and shall cause each of its
Affiliates to comply with the following provisions:
(a) Compliance with Agreement. The Company shall observe and perform
all of its obligations under this Agreement and the Lease Documents to which it
is a party. The Company shall fully and faithfully perform all the duties and
obligations which the Issuer has covenanted and agreed in the Indenture to cause
the Company to perform and any duties and obligations which the Company is
required in the Indenture to perform.
(b) Notice of Default, Litigation, Etc.
(i) The Company shall furnish to the Trustee as soon as possible and in
any event within five (5) Business Days after the discovery by any executive
officer of the Company of any Default, a certificate setting forth the details
of such Default, and the action which the Company proposes to take with respect
thereto.
(ii) The Company shall give prompt notice to the Trustee of any
litigation or governmental proceeding pending, involving or, to its knowledge,
threatened against the Company or any Affiliate which (A) involves an uninsured
claim or the uninsured portion or deductible of an insured claim which is over
$500,000 or (B) if adversely determined, would have a material adverse effect on
the business or financial condition of the Company or any Affiliate.
(c) Corporate Existence. The Company covenants that it shall maintain
its corporate existence in good standing under the laws of the Commonwealth of
Pennsylvania, shall cause each of its Affiliates to maintain its corporate
existence in good standing under the laws of its respective jurisdiction of
incorporation, and shall maintain, in each jurisdiction where material to the
business of the Company or any of its Affiliates or the maintenance of the
Collateral, its and each of their right to transact business in
II-7
each jurisdiction in which the nature of its or their business or the character
of the properties which it or they own or lease requires qualification as a
foreign corporation and where failure to so qualify would permanently preclude
the Company or any of its Affiliates, as the case may be, from enforcing its
rights with respect to its assets. No Affiliate shall be incorporated in any
jurisdiction if the laws of such jurisdiction would restrict or otherwise
adversely affect the ability of the Company to perform its obligations under the
Lease Documents. The Company and each Affiliate will comply in all material
respects with all applicable laws, ordinances, rules, regulations, and
requirements of governmental authorities, except where the necessity of
compliance therewith is contested in good faith by appropriate proceedings and
the effect of non compliance during such contest will not have a material
adverse effect upon the business, properties, or condition, financial or
otherwise, of the Company or any Affiliate or result in the imposition of any
Lien on the properties of any of them (unless the enforcement of any such Lien
has been and continues to be effectively stayed). The Company will and will
cause its Affiliates to preserve and keep in full force and effect all rights,
licenses, registrations, and franchises necessary (i) to the proper conduct of
its or their business or affairs and (ii) to continue to operate its or their
business as presently operated.
(d) Acquisition, Merger or Consolidation; Sale of Substantially All
Assets. Neither the Company nor any Affiliate shall sell, lease, assign,
transfer, or otherwise dispose of any assets from and after the date hereof (i)
for less than fair value (such fair value to be conclusively established by an
appraisal in the case of any sale, lease, assignment or other disposition of
assets having an aggregate fair value exceeding $5,000,000) or (ii) if the
combined total of the net book value of all assets sold, leased, or otherwise
assigned or disposed of from and after the date hereof exceeds 25% of Combined
Total Assets of the Company and all of its Affiliates, as the case may be. In
addition, in the event of any sale of any property subject to the Lien of the
Company Mortgage or any part thereof, the Company shall make or set aside in
trust for prepayments or payments of Senior Indebtedness an amount equal to the
sales price of such property. Notwithstanding the foregoing, (i) neither the
Company nor any Affiliate shall sell, lease, or otherwise transfer or dispose of
any asset if, after giving effect to such sale, lease, or other transfer or
disposition, there shall exist any Default, and (ii) the Company and its
Affiliates shall have the right at any time and from time to time, in connection
with the issuance of tax-exempt Indebtedness, to lease, for nominal
consideration, any vacant portion of the property that, after such transaction,
remains subject to the Lien of the Company Mortgage, to any governmental issuer
of tax-exempt bonds, notes or other obligations in order to establish compliance
with the governmental ownership requirement of Section 142 of the Code, without
regard to the provisions of this Section 2.4 (d) but subject and subordinate in
all cases to the xxxx
XX-8
of the Mortgages, and provided that such lease and the use to be made of the
leased property shall not impair the operations of the Company and its
Affiliates or the value of the Mortgaged Premises and that the Company shall
retain all easements with respect to such leased property that are reasonably
required for the Company's operations.
Neither the Company nor any Affiliate shall merge or consolidate with
or into or acquire all or substantially all of the assets of any other Person,
provided that the Company or any Affiliate may merge or consolidate with or into
or acquire all or substantially all of such assets of another corporation (i) if
the acquiring corporation is a corporation duly organized in good standing under
the laws of a State of the United States, (ii) if each of the representations
and warranties set forth in this Agreement remains true and correct immediately
after giving effect to such merger, consolidation or asset acquisition, (iii) if
the surviving corporation is not a Guarantor, the surviving corporation
expressly assumes all of the covenants and obligations of its predecessor under
the Guaranty, (iv) the surviving corporation could immediately after giving
effect to the transaction, incur at least $1.00 of Indebtedness pursuant to
Paragraph 2.4(h) hereof, (v) if the surviving corporation has rated debt
securities, such debt securities are rated by a nationally recognized credit
rating agency and such rating is investment grade or better (e.g., if by S & P,
"BBB" or better and if by Xxxxx'x, "Baa" or better), and (vi) if there shall
be delivered to the Trustee a certificate of the Company stating that none of
the covenants contained in this Agreement will be violated as a result of such
merger, consolidation or acquisition of assets, and such other agreements,
certificates, opinions, and documents as the Trustee shall have reasonably
requested. The Company or any Affiliate agrees to notify the Bondholders of its
intent to merge, consolidate or acquire assets pursuant to this paragraph at
least 10 days prior to entering into any binding agreements with respect to such
acquisition.
Notwithstanding the foregoing, the Company shall have the right at any
time and from time to time to (i) merge or consolidate any Affiliate with or
into it (provided the Company is the surviving corporation) or with or into any
other Affiliate, or (ii) acquire substantially all of the assets, or cause any
other Affiliate to acquire substantially all of the assets, of any Affiliate
(other than the Company), without regard to the provisions of the immediately
preceding paragraph.
(e) Financial Statements; Inspections.
(i) The Company shall cause to be delivered to the Trustee, the Issuer
and any Bondholder owning $500,000 or more in aggregate principal amount of the
Bonds Outstanding who shall request the same in writing from the Company (A) as
soon as
II-9
available but in any event within 120 days after the end of each Fiscal
Year a combined and combining comparative statement of income, reconciliation of
capital accounts and related balance sheets for the Company and its Affiliates,
for such year prepared in conformity with generally accepted accounting
principles consistently applied and in reasonable detail (such combined
statements to be audited and certified by a firm of certified public accountants
with an unqualified opinion and such combining statements to be unaudited and
certified by the Chief Financial Officer of the Company), (B) as soon as
available but in any event within 60 days after the end of each of the first
three fiscal quarters of each Fiscal Year, a combined comparative statement of
income, reconciliation of capital accounts, and related balance sheet for such
quarter and for the period from the beginning of the then fiscal year to the end
of such quarter, prepared in accordance with generally accepted accounting
principles consistently applied (subject to year-end adjustments) and in
reasonable detail (all of which shall be unaudited and certified by the Chief
Financial Officer of the Company) for the Company and its Affiliates, (C) copies
of all such regular or periodic reports, which are available for public
inspection, which the Company may be required to file with any federal or state
department, bureau, commission, or agency, (D) such other financial data as is
reasonably requested and which is reasonably available to the Company, (E)
copies of any statements, notices, certificates, and other information required
to be furnished to the Issuer by the Company under this Agreement on the date
such information is required to be so furnished and (F) commencing on January 1,
1997 and each January 1 thereafter, financial projections of the Company and the
Affiliates prepared by the Chief Financial Officer of the Company for minimum
projection periods of five years, such projections to include a combined balance
sheet, statement of income and retained earnings, statement of changes in
financial position, statement of changes in working capital and relevant
assumptions. In addition, the Company shall deliver within 90 days after the end
of each of the first three fiscal quarters of each Fiscal Year to any Bondholder
owning $500,000 or more in aggregate principal amount of the Bonds Outstanding
who shall request the same in writing from the Company combining statements for
any such reporting period during which the Company's investment in any Affiliate
shall account for 5% or more of Combined Tangible Net Worth or 5% or more of
combined sales and revenues, such combining statements to be unaudited and
certified by the Chief Financial Officer of the Company. All financial
statements specified in clauses (A) and (B) above shall be furnished in combined
comparative form for the Company and its Affiliates with comparative figures for
the corresponding period in the preceding year, and shall be accompanied by a
certificate signed by the Chief Financial Officer of the Company, with
appropriate documentation substantiating all financial calculations, stating
that there exists no Default or, if any such Default exists, stating the nature
thereof and what action the Company proposes to take with respect thereto.
II-10
(ii) The Company shall permit, and shall cause each of its Affiliates
to permit, any Person designated by the Issuer, the Trustee or any Bondholder
(including any prospective Bondholder), at their own expense, to visit and
inspect the properties of the Company and each of its Affiliates and to examine
the books and records, including financial records of the Company and its
Affiliates, and to make or obtain copies or extracts thereof or of the materials
described in clause (i), and to discuss the affairs, finances, and accounts of
the Company and its Affiliates, with its and their officers, at such reasonable
times as the Issuer, the Trustee or such Bondholder may reasonably request. The
Trustee shall have no obligation to review any financial statements delivered
hereunder for form or content.
(iii) As a condition of providing any non-public reports, financial or
operating data or other non-public information to any Bondholder pursuant to any
of the provisions of this Agreement, the Company shall have the right to require
that such Bondholder agree in writing not to disclose the same to any Person
(except in the ordinary course of such Bondholder's business and except as
otherwise required by law or legal process) without the prior written consent of
the Company.
(f) Restricted Payments. Neither the Company nor any of its Affiliates
shall make any Restricted Payment or set aside any funds therefor unless, after
giving effect thereto, the aggregate of such Restricted Payments for all such
purposes subsequent to the Closing Date would not exceed the sum (as in effect
from time to time, hereinafter referred to as the "Distribution Fund") of (i)
50% of the Company's Cumulative Combined Net Income subsequent to December 31,
1994 so long as the Company's Combined Tangible Net Worth is greater than
$44,280,093, (ii) the aggregate of the net cash proceeds received by the Company
from any issuance or sale of capital shares of the Company subsequent to the
Closing Date, and (iii) the aggregate of the net cash proceeds received by the
Company from any issuance of any Indebtedness of the Company which has been
converted into capital shares of the Company subsequent to the Closing Date,
which amount shall be added to the Distribution Fund only after such conversion.
For the sole purpose of applying the provisions of this Section 2.4(f) to any
Restricted Payment to be made to enable any shareholder of the Company or any
Affiliate to pay any Extraordinary Tax Liability, 50% of any cash received
during any fiscal year on account of any extraordinary or nonrecurring items of
income or non-operating revenues or revenues other than operating revenues that
produced an Extraordinary Tax Liability and not included or includable in Net
Income may be distributed to the Person who owes or has paid the Extraordinary
Tax Liability to the extent needed to pay or reimburse such Person for such
Extraordinary Tax Liability. No Restricted Payment may be made in other than
cash or securities which are actively traded on a nationally recognized public
market and have a readily ascertainable market value (which value shall be the
amount of such
II-11
Restricted Payment), unless the Company shall have received a report from an
independent recognized appraiser as to the fair value of the property to be
distributed or transferred, in which case the amount of such Restricted Payment
shall be deemed to be the greater of its fair value (as determined by such
appraiser) or its net book value on the books of the Company. Notwithstanding
any of the foregoing provisions of this paragraph, neither the Company nor any
Affiliate shall make any Restricted Payment if at the time or after giving
effect thereto, there shall exist any Default.
(g) Maintenance of Combined Tangible Net Worth. The Company shall at
all times maintain a Combined Tangible Net Worth of (i) not less than
$44,280,093 plus 50% of the Company's Aggregate Combined Net Income at the end
of each fiscal year subsequent to the fiscal year ending December 31, 1994 and
(ii) not less than 25% of Combined Long Term Indebtedness but in no event less
than $44,280,093.
(h) Limitation of Total Indebtedness and Long Term Indebtedness. (i)
Neither the Company nor any Affiliates shall incur additional Indebtedness or
make any Restricted Payment if, at the time such Indebtedness is incurred and
after giving effect thereto and to any concurrent reduction of Indebtedness or
at the time such Restricted Payment is proposed to be made, Combined
Indebtedness ("CI") exceeds or would exceed, for Indebtedness incurred or a
Restricted Payment made (A) up to and including December 30, 1996, 410% of
Combined Tangible Net Worth, (B) on and after December 31, 1996 and up to
December 30, 1997, 380% of Combined Tangible Net Worth, (C) on and after
December 31, 1997 and up to December 30, 1998, 355% of Combined Tangible Net
Worth, (D) on and after December 31, 1998 and up to December 30, 2000, 325% of
Combined Tangible Net Worth, and (E) on and after December 31, 2000, 300% of
Combined Tangible Net Worth. Prior to the incurrence of any additional
Indebtedness or the making of any Restricted Payment, in each case in excess of
$1,000,000, the Company shall submit or cause to be submitted to the Trustee a
certificate of the Chief Financial Officer stating the amount of additional
Indebtedness to be incurred or the amount of the Restricted Payment to be made
and that subsequent to incurring such additional Indebtedness or making such
Restricted Payment, the Company shall be in compliance with this covenant.
(ii) Prior to December 31, 1996, neither the Company nor its Affiliates
shall incur additional Long Term Indebtedness in an aggregate amount in excess
of $8,000,000 unless, after giving effect to such additional Long Term
Indebtedness and to any concurrent reduction in Long Term Indebtedness, CI shall
not exceed 380% of Combined Tangible Net Worth. For purposes of this Section
2.4(h) the term "Long Term Indebtedness" (A) shall exclude any Indebtedness
outstanding under a revolving credit or similar agreement providing for
borrowings (and renewals and extensions
II-12
thereof) over a period equal to or more than one year if such Indebtedness is
payable on demand or not more than two years after a borrowing on such credit
facility, and (B) shall include Operating Lease Debt.
(i) Limitation on Balloon Indebtedness. Neither the Company nor any of
its Affiliates shall incur any Balloon Indebtedness (other than Refunding Senior
Indebtedness incurred to refinance Senior Indebtedness secured by a Lien on the
Mortgaged Premises senior to the Lien of the Mortgages or Indebtedness
consisting of a working capital line of credit) unless the Company delivers to
the Trustee a certificate executed by the Chief Financial Officer that the
amount available in the Distribution Fund described in subsection (f) as of the
date of issuance of such Balloon Indebtedness (after deduction of any Restricted
Payments previously made from such Distribution Fund) does not exceed the
principal amount of such Balloon Indebtedness. For purposes of subsection (f),
the Company shall be deemed to have made a Restricted Payment in the amount of
the principal of such Balloon Indebtedness on the date such Balloon Indebtedness
is incurred, and the amount available in the Distribution Fund for future
Restricted Payments shall be reduced accordingly.
(j) Cash Flow. The Combined Cash Flow of the Company shall not be less
than $8,000,000 at the end of any Fiscal Year, commencing January 1, 1996.
(k) Limitations on Secured Indebtedness. After the date hereof, neither
the Company nor any Affiliate shall incur additional Senior Indebtedness
(including interest which has accrued and is being deferred) other than
Refunding Senior Indebtedness (as defined below), unless (i) at the time it is
incurred and after giving effect thereto, the Security Ratio would be not less
than 2.2 to 1; (ii) the Trustee, the Issuer and the Bondholders shall have been
provided with an appraisal performed not more than two years prior to such
incurrence by an independent appraiser of recognized standing and not
unacceptable to the Trustee in its reasonable discretion of the value of the
property subject to the liens of the Mortgages, which value shall be determined
in accordance with the methodology used in the appraisal dated August 2, 1995 by
Xxxxx X. Iatorola to arrive at an appraised value as of June 30, 1995 of
$164,000,000; (iii) at the time of or after giving effect to the incurrence of
such Senior Indebtedness, there shall not exist any Default, and (iv) the
Company shall have furnished to the Trustee, the Issuer and the Bondholders a
certificate of its Chief Financial Officer demonstrating in reasonable detail
compliance by the Company and such Affiliate with the provisions of this
subparagraph (k). Notwithstanding the foregoing, the provisions of the first
sentence of this subparagraph (k) shall not apply to Refunding Senior
Indebtedness. In addition, in connection with the incurrence of any Refunding
Senior Indebtedness permitted to be incurred hereunder, the Trustee
II-13
shall, upon the request and written direction of the Company, prior to
the effective date of such Refunding Senior Indebtedness, execute and deliver a
subordination of the Mortgages (but not of the Ground Lease) to the Mortgage
securing such Refunding Senior Indebtedness (but only if the Mortgages were
subordinate to the mortgage securing the Senior Indebtedness refunded by such
Refunding Senior Indebtedness), provided that the mortgagee for such Refunding
Senior Indebtedness shall execute and deliver any coordinate lien,
non-disturbance or other agreement to which the trustee for the Senior
Indebtedness to be refunded by the Refunding Senior Indebtedness is a party and
relating to the Senior Indebtedness to be refunded. Except in the case of
Refunding Senior Indebtedness issued to refinance Senior Indebtedness secured by
a Lien on the Mortgaged Premises that is senior to the Lien of the Mortgages,
neither the Company nor any Affiliate shall incur any Indebtedness secured by a
lien on the Mortgaged Premises, or any portion thereof, that is senior to the
Lien of the Mortgages. As a condition to the issuance of any Senior Indebtedness
secured by a lien on the Mortgaged Premises, or any portion thereof, that is on
a parity with the lien of the Mortgages ("Parity Indebtedness"), the trustee for
or holders of such Parity Indebtedness shall execute with the Trustee a third
lien coordinate lien agreement substantially in the form attached hereto as
Exhibit D. As a further condition to the issuance of any Parity Indebtedness,
the Company shall deliver to the Trustee and the Issuer a Pro Rata Amortization
Schedule. A "Pro Rata Amortization Schedule" shall be a schedule setting forth
for each year (beginning with the year in which the Parity Indebtedness is
issued) (i) the respective amounts of principal of the Bonds and of the Parity
Indebtedness coming due in such year by reason of maturity or mandatory
redemption or purchase, (ii) the percentage of the aggregate principal amount of
the Bonds Outstanding as of the date the Parity Indebtedness is issued and
percentage of the initial principal amount of the Parity Indebtedness
represented by the respective principal payment made in each such year, and
(iii) the cumulative percentage of the aggregate principal amount of the Bonds
Outstanding as of the date the Parity Indebtedness is issued and the cumulative
percentage of the initial principal amount of the Parity Indebtedness paid as of
each such year. No Parity Indebtedness shall be issued unless the applicable Pro
Rata Amortization Schedule shows that the cumulative percentage of the Bonds
scheduled to be paid as of each year equals or exceeds the cumulative percentage
of such Parity Indebtedness scheduled to be paid as of such year. For purposes
of this Agreement, the term "Refunding Senior Indebtedness" shall mean Senior
Indebtedness which is the first or any subsequent refinancing of Senior
Indebtedness, but only to the extent that the principal amount of the Senior
Indebtedness so incurred does not exceed the then outstanding amount of the
refinanced Senior Indebtedness. The Company and its Affiliates shall have the
right to incur Indebtedness having a Lien on the property subject to the lien of
the Mortgages or any part thereof which is subordinate to the Xxxx
XX-14
of the Mortgages and the obligations of the Company and the Guarantors under
this Agreement or any of the other Lease Documents if, but only if, either (i)
such Indebtedness meets the requirements for the issuance of Parity Indebtedness
or (ii) such Indebtedness is subject to a standstill agreement in the form
attached hereto as Exhibit E.
(l) Investments in Affiliates, Etc. Neither the Company nor any
Affiliate shall purchase any capital stock or other security issued by, make any
loan, advance, or extension of credit to, purchase any of the business or
integral part of the business of, or otherwise make any investment in, any
Affiliate, or any other Person if, immediately before or after giving effect
thereto, there shall exist any Default.
(m) Compliance with ERISA. The Company and each of its Affiliates shall
meet all minimum funding requirements applicable to any Plans which are subject
to ERISA or to Section 412 of the Code and will at all times comply in all
material respects with the provisions of ERISA and Section 412 of the Code which
are applicable to the Plans. Neither the Company nor any Affiliate will permit
any event or condition to exist which would permit any of the Plans which is not
a multiemployer plan to be terminated under circumstances which would cause the
lien provided for in Section 4068 of ERISA to attach to the assets of the
Company or any Affiliate. Promptly after the occurrence of a "reportable event",
as defined in Section 4043 of ERISA, or after the Company or any Affiliate
receives notice that the Pension Benefit Guarantee Corporation has instituted or
intends to institute termination proceedings with respect to any Plan, and prior
to the termination of any Plan by the administrator thereof, the Company shall
notify the Trustee in writing and provide such documentation, data and other
information with respect thereto as the Trustee at the written direction of the
Bondowners of 25% in aggregate principal amount of the Bonds Outstanding shall
reasonably request. The Trustee shall give written notice to the Bondowners of
any notification received by it hereunder and shall provide to any Bondowner
requesting same access to, copies of or extracts from any documents, data or
other written information received by it pursuant hereto.
(n) Transactions with Related Parties. Neither the Company nor any
Affiliate shall engage in or effect any transactions with any Related Party on a
basis less favorable to the Company or such Affiliate, as the case may be, than
would be the case if such transaction had been effected with a Person which was
not a Related Party.
II-15
(o) Taxes, Other Governmental Charges and Utility Charges.
(i) The Company covenants that it and each of its Affiliates
shall duly and punctually pay all taxes, assessments (including
deficiency assessments), and governmental charges or levies of any
kind whatsoever ("Taxes") imposed on it or on its respective income or
profits or on any of its respective properties or assets, including,
without limiting the generality of the foregoing, any taxes levied
upon the Mortgaged Premises which, if not paid, will become a Lien or
charge upon the Mortgaged Premises or upon any payment pursuant to
this Agreement, prior to the date on which penalties attach thereto.
The Company shall also pay all utility, water and sewer rents, and
other charges incurred in connection with the Mortgaged Premises and
all assessments and charges lawfully made by any governmental body for
public improvements that may be secured by a Lien on the Mortgaged
Premises or any of its assets.
(ii) The Company may, at its own expense and in its own name and
in good faith, contest any such taxes, assessments, and other charges,
provided that such contest shall not result in a lien being placed on
the Mortgaged Premises or any part thereof or result in the Mortgaged
Premises being subject to loss or forfeiture, and further provided
that the Company gives notice in writing of such contest to the Issuer
and the Trustee. Nothing herein shall preclude the Company, at its own
expense and in its own name and behalf, from applying for any tax
exemption allowed by the federal government, the State, or any
political subdivision which grants or may grant such tax exemption.
(p) Ratio of Combined Net Income Before Interest, Taxes, Depreciation
and Amortization/Interest. The ratio of Combined Net Income Before Interest,
Taxes, Depreciation and Amortization to Combined Interest Charges calculated as
of the end of each fiscal quarter beginning March 31, 1996 for the period
including such fiscal quarter and the immediately preceding three fiscal
quarters will be at least (i) 1.75 for each of said periods ending prior to
December 30, 1998 and (ii) 2.00 for each of said periods thereafter.
(q) Ratio of Combined Net Income Before Interest, Taxes, Depreciation
and Amortization/Total Indebtedness. The ratio of Combined Net Income Before
Interest, Taxes, Depreciation and Amortization to Combined Indebtedness,
expressed as a percentage and calculated as of the end of each fiscal quarter
for the period including such fiscal quarter and the immediately preceding three
fiscal quarters will be at least (i) 11% for each said period ending prior to
December 31, 1996, (ii) 12% for each said period ending on and after December
31, 1996 and prior to December 30, 1997, (iii) 14% for each said period ending
on and after December 31, 1997 and prior to December 30, 1998, (iv) 15% for each
said
II-16
period ending on and after December 31, 1998, and prior to December 30, 1999,
and (v) 16% for each said period ending on and after December 31, 1999.
(END OF ARTICLE II)
II-17
ARTICLE III
ISSUANCE OF THE BONDS; CONSTRUCTION OF THE PROJECT
Section 3.1. Agreement to Issue the Bonds: Application of Bond
Proceeds. In order to provide funds to finance the acquisition of the Project,
the Issuer, concurrently with the execution of this Agreement, will issue, sell,
and deliver the Bonds. The Issuer will deposit the net proceeds of the Bonds
with the Trustee to be applied to acquire the Project.
Section 3.2. Disbursements from the Project Fund. The issuer has, in
the Indenture, authorized and directed the Trustee to disburse the Bond proceeds
on the Closing Date from the Project Fund to acquire the Project. The Trustee
shall not make any disbursement from the Project Fund until the Company has
provided the Trustee with a Requisition acknowledged by the Issuer and approved
by the Construction Monitor (except as otherwise provided in Section 7.1(a)
hereof) and the other documents required by Section 7.1 of this Agreement.
Section 3.3. Furnishing Documents to the Trustee. The Issuer agrees to
cause such Requisitions to be directed to the Trustee as may be necessary to
effect payments out of the Project Fund in accordance with Section 3.2 hereof.
Section 3.4. Special Arbitrage Certifications. The Issuer and the
Company covenants not to cause or direct any moneys on deposit in any fund or
account to be used in a manner which would cause the Bonds to be classified as
"arbitrage bonds" within the meaning of Section 148 of the Code, and the Company
certifies and covenants to and for the benefit of the Issuer and the Owners of
the Bonds that so long as there are any Bonds Outstanding, moneys on deposit in
any fund or account in connection with the transactions contemplated herein,
whether such moneys were derived from the proceeds of the sale of the Bonds or
from any other sources, will not be used in a manner which will cause the Bonds
to be classified as "arbitrage bonds" within the meaning of Section 148 of the
Code.
Section 3.5. Agreement to Construct the Project. The Company agrees to
construct the Project in a good and workmanlike manner in accordance with the
plans and specifications therefor with all reasonable dispatch and to use its
best efforts to cause said construction to be completed as soon as practicable,
delays incident to strikes, riots, and acts of God or the public enemy beyond
the reasonable control of the Company only excepted, but if said construction is
not completed within the time herein contemplated there shall be no diminution
in or postponement or abatement of the payments required to be paid by the
Company under Article VI of this Agreement. Upon completion of the Project, the
III-1
Company shall provide to the Trustee, the Issuer and the Bondholders a
completion certificate executed by a Company Representative and acknowledged by
the Construction Monitor.
Section 3.6. Company Required to Pay Project Costs if Project Fund
Insufficient. If the moneys in the Project Fund available for payment of the
Costs of the Project should not be sufficient to pay the Costs thereof in full,
the Company agrees to complete the Project and to pay all that portion of the
Costs of the Project as may be in excess of the moneys available therefor in the
Project Fund. The Issuer does not make any warranty, either express or implied,
that the moneys which will be paid into the Project Fund and which, under the
provisions hereof, will be available for payment of the Costs of the Project,
will be sufficient to pay all the Costs which will be incurred in that
connection. The Company agrees that if after exhaustion of the moneys in the
Project Fund the Company should pay any portion of the Costs of the Project
pursuant to the provisions of this Section it shall not be entitled to any
reimbursement therefor from the Issuer or from the Trustee or from the Owners of
any of the Bonds, nor shall it be entitled to any diminution in or postponement
or abatement of the payments required to be made by the Company under Article VI
of this Agreement.
[END OF ARTICLE III]
III-2
ARTICLE IV
LEASING OF PROJECT
Section 4.1. Leasing of Project and Project Site. On the terms and
conditions herein set forth, the Issuer hereby demises and leases the Project,
including the Issuer's leasehold interest in the Project Site and all rights,
powers, licenses, easements, rights-of-way, privileges, hereditaments and
franchises now or hereafter situate thereon or pertaining thereto, to the
Company, and the Company hereby takes, hires and leases the Project, including
the Issuer's leasehold interest in the Project Site and all rights, powers,
licenses, easements, rights-of- way, privileges, hereditaments and franchises
now or hereafter situate thereon or pertaining thereto, from the Issuer.
Section 4.2. Subordination. This Lease Agreement, and all rights of the
Company hereunder, are and shall be subject and subordinate to the Mortgages.
The provisions of this Section 4.2 shall be self-operative, and no further
instrument of subordination shall be required. In confirmation of such
subordination, the Company shall promptly execute, acknowledge and deliver any
instrument that the Issuer or the Trustee, or any of their respective successors
in interest may reasonably request to evidence such subordination.
Section 4.3. Possession and Quiet Enjoyment. Subject to compliance by
the Company with the terms hereof, and from and after the effective date hereof,
the Issuer shall provide the Company during the Term of this Lease Agreement
with quiet use and enjoyment of the Project, and the Company shall during such
Lease Term peaceably and quietly have and hold and enjoy the Project and each
and every part thereof, without suit, trouble, molestation or hindrance from the
Issuer or any party claiming under or through the Issuer, except for such rights
of access and other rights of the Issuer as are expressly set forth in this
Lease Agreement, the Ground Lease or the Indenture. The Issuer shall, at the
request of the Company and at the Company's sole cost and expense, join in any
legal action in which the Company asserts its right to such possession and
enjoyment to the extent the Issuer may lawfully do so.
[END OF ARTICLE IV]
IV-1
ARTICLE V
TERM OF LEASE; TERMINATION OF LEASE
AGREEMENT BY THE COMPANY;
OPTION TO PURCHASE THE PROJECT
Section 5.1. Term of Lease Aqreement. This Lease Agreement shall be and
remain in effect with respect to the Project and the Project Site for a Lease
Term commencing on the effective date hereof continuing for a term of 25 years
thereafter, unless extended pursuant to Section 5.3 or terminated earlier by the
Issuer upon a Default by the Company as hereinafter defined and described in
Article XI.
Section 5.2. Termination of this Lease Agreement by the Company.
Except as provided in Article XII hereof, the Company shall not terminate this
Lease Agreement for any reason or cause, including without limiting the
generality of the foregoing, Force Majeure, or any default by the Issuer
hereunder or damage or casualty to or condemnation (of title or a temporary
taking) of the Project or any portions thereof, failure of consideration or of
title, frustration of purpose or circumstances or conditions that may amount to
eviction or constructive eviction of the Company from all or part of the
Project.
Section 5.3. Option to Renew this Lease Agreement. At the end of the
Lease Term or upon termination of this Agreement (other than resulting from the
occurrence of a Default) and upon payment in full of all the Bonds, the Company
shall have the right to renew this Agreement for three consecutive ten year
terms and a fourth five year term. The rent for each renewal shall be the then
fair rental value of the Project as determined by an independent appraiser
mutually acceptable to the Issuer and the Company. To exercise its renewal
option, the Company shall give the Issuer written notice not later than 12
months prior to the end of the original Lease Term or the most recent renewal
thereof, as the case may be. All costs incurred in connection with the exercise
by the Company of its option hereunder, including the cost of the appraisal,
etc., shall be paid by the Company.
Section 5.4. Right of First Refusal
(a) In the event that the Company does not exercise its option to renew
this Agreement as provided in Section 5.3, and the Issuer thereafter receives an
offer from one or more third parties which are not affiliated with the Company,
any Guarantor, or any Affiliate of the Company or any Guarantor to lease the
Project, including the Issuer's leasehold interest in the Project Site, the
Issuer shall notify the Company of such offer, and the Company shall have the
option to lease the Project, including the Issuer's leasehold interest in the
Project Site, upon the same terms and
V-1
conditions as are set forth in the highest third party offer. To exercise its
option, the Company shall give the Issuer written notice within 10 days after
it receives the Issuer's notice of the third party offer.
(b) In the event the Company exercises its option to purchase the
Project including the Issuer's leasehold interest in the Project Site pursuant
to Section 5.5 hereof and the Bonds are redeemed, the fee interest so acquired
by the Company shall merge with the leasehold interest of the Company hereunder.
Section 5.5. Option to Purchase the Project. The Company shall have the
right to purchase the Project, including the Issuer's leasehold interest in the
Project Site on any interest payment date during the Lease Term, including any
renewals or extensions thereof. The purchase price shall be the greater of (a)
the fair market value of the Project financed by the net proceeds of the Bonds
(i.e., excluding the Project Site and the Issuer's leasehold interest in the
Project Site), as determined by an independent appraiser mutually acceptable to
the Issuer and the Company or (b) the amount required to redeem the Bonds in
whole pursuant to Section 3.01 or 3.02 of the Indenture or to defease the Bonds
pursuant to Article VII of the Indenture, including, but not limited to an
amount equal to principal, interest accrued and to accrue, and redemption
premium, if any, to the date of purchase or, if later, redemption of the Bonds.
To exercise its purchase option, the Company shall give the Issuer written
notice not later than eight months prior to the date of purchase and shall
deliver to the Trustee an opinion of Xxxxx & Xxxxxx or other nationally
recognized bond counsel acceptable to the Owners of a majority in aggregate
principal amount of the Bonds Outstanding to the effect that such exercise will
not adversely affect the exclusion from gross income of the Holders of the Bonds
for federal income tax purposes of the interest on the Bonds. All costs incurred
in connection with the exercise by the Company of its option hereunder,
including the cost of the appraisal, title work, etc., shall be paid by the
Company.
In the event the Company exercises its option to purchase the Project,
including the Issuer's interest in the Project Site pursuant to this Section
5.5, the Issuer agrees and directs the Company to transfer to the Trustee the
portion of the purchase price required to redeem the Bonds in whole on the date
of purchase of the Project. The Company covenants and agrees to transfer to the
Issuer the portion of the purchase price in excess of the amount necessary to
redeem the Bonds. Promptly upon receipt from the Company of notice that it shall
exercise its purchase option hereunder, the Issuer shall transmit notice to the
Trustee that the Bonds will be redeemed in whole and directing the Trustee to
(a) transmit notice of redemption to Bondholders in accordance with Section 3.03
of the Indenture and (b) redeem the Bonds in whole on the redemption date.
V-2
In the event that the Company exercises its option to purchase the
Project, as set forth above, and becomes the fee owner of the Project and the
Project Site, the Company's fee interest in the Project and the Project Site
shall merge with the Company's leasehold interest under this Agreement.
[END OF ARTICLE V]
V-3
ARTICLE VI
RENT AND OTHER REQUIRED PAYMENTS
Section 6.1. Amounts Payable.
(a) The Company shall pay to the Issuer as Rent, in immediately
available funds, on or before the fifth day preceding any interest payment date
for the Bonds or preceding any other date that any payment of interest, premium,
if any, or principal is required to be made in respect of the Bonds pursuant to
the Indenture, a sum which, together with the balance on deposit in the Bond
Fund established under the Indenture (taking into account interest earnings on
such Rent until the same is disbursed) and available for the purpose, shall be
sufficient to pay the Aggregate Debt Service that is due on such date, as
provided in the Indenture. All Rent shall be paid directly by the Company in the
full amounts stipulated herein.
It is understood and agreed that all payments of Rent payable by the
Company under subsection (a) of this Section 6.1 are assigned by the Issuer to
the Trustee for the benefit of the Owners of the Bonds. The Company assents to
such assignment. The Issuer hereby directs the Company and the Company hereby
agrees to pay to the Trustee at the Principal Office of the Trustee all Rent
payments payable by the Company pursuant to this subsection. Payments by the
Company to the Trustee as aforesaid or as otherwise required pursuant to this
Agreement or the other Lease Documents, including, but not limited to, payments
to redeem or defease the Bonds as provided in Section 10.3, shall be sufficient
to discharge the obligation of the Company with respect to the amounts so paid,
and the Company shall not be liable to the Issuer, the Owners or to any other
party by reason of the failure of the Trustee to remit such amounts to the
Owners, or otherwise to apply such amounts, as provided in the Indenture. The
Company further acknowledges that it has received a copy of the Indenture as in
effect on the date of execution and delivery of this Agreement and agrees to all
of the terms and conditions set forth therein.
(b) The Company will also pay the reasonable expenses of the Issuer
related to the issuance of the Bonds, including the payment on or prior to the
Closing Date of a fee equal to $245,000 and a construction monitoring fee of
$5,000. In the event construction of the Project is not completed within three
months after the Closing Date, the Company shall pay the Issuer on the first day
of each month thereafter an additional construction monitoring fee of $2,000 for
each month or part thereof until construction of the Project is completed. The
Company shall also pay an annual administrative fee to the Issuer in the amount
of $5,000 per year payable on each anniversary of the Closing Date and all
costs and expenses incurred by the Issuer in connection with
VI-1
the Project, including, but not limited to, auditing and legal expenses.
The Company shall also pay on the Closing Date the fees and expenses of Bond
Counsel, counsel to the Purchaser, counsel to the Issuer and the Issuer's
accountants and financial advisor.
(c) The Company will also pay the reasonable fees and expenses of the
Trustee under the Indenture and all other amounts which may be payable to the
Trustee under Section 9.02 of the Indenture, such amounts to be paid directly to
the Trustee for the Trustee's own account as and when such amounts become due
and payable.
(d) In the event the Company should fail to make any of the payments
required in this Section 6.1, the item or installment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid, and the Company agrees to pay the same with interest thereon,
to the extent permitted by law, from the date when such payment was due, at the
rate set forth in the Bonds.
(e) The Company shall also pay all other amounts hereunder in respect
of the Project, and the operation, maintenance and repair thereof, insurance
coverages thereon, any taxes or payments in lieu thereof all as herein provided,
including without limitation, any amounts payable under Article VII hereof.
Section 6.2. Obligations of Company Unconditional. The obligations of
the Company to make the payments required in Section 6.1 hereof and to perform
and observe the other agreements contained herein shall be absolute and
unconditional and shall not be subject to any defense or any right of setoff,
counterclaim or recoupment arising out of any breach by the Issuer or the
Trustee of any obligation to the Company, whether hereunder or otherwise, or out
of any indebtedness or liability at any time owing to the Company by the Issuer,
the Trustee or the Purchaser, and, until such time as the principal of, premium,
if any, and interest on the Bonds shall have been fully paid or provision for
the payment thereof shall have been made in accordance with the Indenture, the
Company (1) will not suspend or discontinue any payments provided for in Section
6.1 hereof, and, (2) will perform and observe all other agreements contained in
this Agreement for any cause, including, without limiting the generality of the
foregoing, the occurrence of any acts or circumstances that may constitute
failure of consideration, eviction or constructive eviction, destruction of or
damage to the Project, the taking by eminent domain of title to or temporary use
of any or all of the Project, commercial frustration of purpose, any change in
the tax or other laws of the United States of America or of the State or any
political subdivision of either thereof or any failure of the Issuer or the
Trustee to perform and observe any agreement, whether express or implied, or any
duty, liability or obligation arising out of or connected with this Agreement.
Nothing contained in this Section
VI-2
shall be construed to release the Issuer from the performance of any of
the agreements on its part herein contained, and in the event the Issuer or
the Trustee should fail to perform any such agreement on its part, the company
may institute such action against the Issuer or the Trustee as the Company may
deem necessary to compel performance so long as such action does not abrogate
the obligations of the Company contained in the first sentence of this
Section.
Section 6.3. Lease Agreement a Net Lease. This Agreement is a "net
lease", the intention of the parties being that this Agreement shall yield to
the Issuer the net annual Rent specified herein during the Term of Agreement and
that all costs, expenses and obligations of every kind and nature whatsoever
relating to or arising out of the Project and the Project Site shall be paid by
the Company.
Section 6.4. Nature of Obligations of the Issuer. The cost and expenses
of the performance by the Issuer of any of its obligations under this Agreement
shall be limited to the availability of the proceeds of the Bonds of the Issuer
issued for such purposes or from other funds received by the Issuer under this
Agreement and available for such purposes. The Issuer shall not otherwise be
legally obligated to meet any such obligations from any other moneys of the
Issuer.
[END OF ARTICLE VI]
VI-3
ARTICLE VII
THE PROJECT
Section 7.1. Disbursements from the Project Fund.
(a) In the Indenture, the Issuer has authorized and directed the
Trustee to make disbursements from the Project Fund as required by this
Agreement. Disbursement of the proceeds from the sale of the Bonds shall be made
from the Project Fund to pay the Costs of the Project, or to reimburse the
Company for such Costs, and to pay Costs of Issuance of the Bonds, upon receipt
by the Trustee of a Requisition in the form attached hereto as Exhibit B signed
by a Company Representative and, subject to the following sentence, acknowledged
by an Issuer Representative and approved by the Construction Monitor, stating
with respect to such disbursement to be made: (1) the requisition number; (2)
that payment is to be made to the Company to pay the Costs of the Project and
costs of issuance of the Bonds; (3) the amount to be paid; (4) that each
obligation mentioned therein has been properly incurred after July 15, 1995, is
a proper charge, is unpaid or unreimbursed, and has not been the basis of any
previous disbursement; and (5) that on the date thereof there has not occurred
any act which, with the giving of notice or passage of time, or both, would
constitute an Event of Default under the Indenture. Notwithstanding the
foregoing sentence, a Requisition or Requisitions for the reimbursement of the
costs of issuance associated with the Bonds in an amount not to exceed $99,500
in the aggregate shall not require the approval of the Construction Monitor.
(b) The Company further agrees that as a condition precedent to the
first disbursement from the Project Fund on the Closing Date, there shall be
furnished to the Trustee, in writing, unless waived by the Purchaser, the
following:
(1) evidence of mortgage title insurance, in form and substance
satisfactory to the Issuer and the Purchasers;
(2) proof that the insurance required to be maintained pursuant to
Section 7.4 is in full force and effect and that all premiums have been paid;
(3) proof of flood insurance as required in Section 7.4 (c);
(4) verification evidencing that all permits, consents, approvals and
agreements required by all governmental boards and bureaus have been secured and
remain in full force and effect;
VII-1
(5) such evidence as the Issuer or the Purchaser may require to
demonstrate exemption from or compliance with all applicable building, zoning,
health and safety laws, ordinances and regulations; and
(6) such other additional documents, financing statements, affidavits
or certificates of the Company or any other person or entity as the Issuer, the
Purchaser or the Trustee may reasonably request.
(c) The Company hereby agrees that it shall pay all costs incurred by
the Company, the Issuer or the Trustee in making disbursements from the Project
Fund. In making any such disbursements from the Project Fund, the Trustee may
rely on such requisitions and other documents delivered to it and the Trustee
shall be relieved of all liability with respect to the making of such
disbursements if made in accordance with the foregoing.
Section 7.2. Maintenance and Modification of the Project by the
Company.
(a) The Company shall construct, operate and maintain the Project in
accordance with all applicable governmental laws, ordinances, approvals, rules
and regulations and requirements, including, but not limited to, zoning,
sanitary, pollution, environmental and safety ordinances, laws and rules and
regulations promulgated thereunder.
(b) The Company shall (1) maintain, preserve and keep the Project or
cause the Project to be maintained, preserved and kept in good repair, working
order and condition, (2) from time to time, make or cause to be made all
necessary and proper repairs, replacements and renewals thereto and (3) from
time to time, make such substitutions, additions, modifications and improvements
as may be necessary and as shall not impair the structural integrity, operating
efficiency and economic value of the Project. Any alterations, replacements,
renewals or additions made pursuant to this Section shall become and constitute
a part of the Project and shall be performed in accordance with Section 7.2(a).
(c) The Company shall operate or cause the Project to be operated as an
authorized public facility for a purpose and use as provided for under the Act.
(d) [Intentionally Omitted]
(e) The Company shall not remove, relocate, discontinue the use of or
sell, fail to restore, or otherwise dispose of any part of its leasehold
interest in the Project except as may be permitted pursuant to Section 10.1
hereof.
(f) [Intentionally Omitted]
VII-2
Section 7.3. Taxes, Other Governmental Charges and Utility Charges.
(a) The Company covenants that it and each of its Affiliates shall duly
and punctually pay all taxes, assessments (including deficiency assessments),
and governmental charges or levies of any kind whatsoever ("Taxes") imposed on
it or on its respective income or profits or on any of its respective properties
or assets, including, without limiting the generality of the foregoing, any
taxes levied upon the Project and the Project Site which, if not paid, will
become a Lien or charge upon the Project or upon any payment pursuant to this
Agreement, prior to the date on which penalties attach thereto. The Company
shall also pay all utility, water and sewer rents, and other charges incurred in
connection with the Project and all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by a Lien on the
Project or the Project Site or any of its assets.
(b) The Company may, at its own expense and in its own name and in good
faith, contest any such taxes, assessments, and other charges, provided that
such contest shall not result in a lien being placed on the Project or the
Project Site or any part thereof or result in the Project or the Project Site
being subject to loss or forfeiture, and further provided that the Company gives
notice in writing of such contest to the Issuer and the Trustee. Nothing herein
shall preclude the Company at its own expense and in its own name and behalf,
from applying for any tax exemption allowed by the federal government, the
State, or any political subdivision which grants or may grant such tax
exemption.
Section 7.4. Insurance Required. The Company shall obtain and maintain
or cause to be obtained and maintained insurance on the Mortgaged Premises and
all parts thereof and operations conducted therein and thereon in such manner
and against such loss, damage and liability, including liability to third
parties, as is customary with property owners in the same or similar business in
the State. Without limiting the generality of the foregoing sentence, such
insurance shall include, without limitation:
(a) Public liability insurance insuring against any and all liability
or claims of liability arising out of, occasioned by, or resulting from any
accident or otherwise resulting in or about the Mortgaged Premises, in a minimum
amount of $5,000,000 for the death of or bodily injury to one person, $5,000,000
for the death of or bodily injury in any one accident or occurrence and
$5,000,000 for loss or damage to the property of any Person or Persons,
provided, however, that in the event the Company is unable at any time to obtain
such insurance in such amounts, the failure of the Company to obtain such
insurance shall not constitute a Default hereunder so long as it obtains such
insurance in such lesser amounts as is available;
VII-3
(b) Property damage and broad form fire and extended coverage insurance
with respect to the Mortgaged Premises and insurance insuring against such other
hazards, casualties and contingencies as the Issuer and the Purchaser may
require, including without limitation, during the period of construction of the
Project, builder's risk insurance on the Project, which insurance shall provide
coverage at the full replacement cost thereof and with no provisions for
coinsurance penalties and shall be in an amount equal to the lesser of (i)
$66,000,000, or (ii) the aggregate principal amount of all Indebtedness secured
by the Mortgaged Premises, a policy of business interruption insurance in the
amount of $10,000,000, and a policy of boiler insurance; and
(c) If the Mortgaged Premises would be required to be insured pursuant
to the Flood Disaster Protection Act of 1973 or the National Flood Insurance Act
of 1968, and the regulations promulgated thereunder, flood insurance with
respect to the Mortgaged Premises in an amount not less than the amount
determined by the Company's insurance broker at least once every two (2) years
to be adequate to cover the Company's losses in the event of flood or the
maximum limit of coverage available, whichever amount is less.
Section 7.5. Additional Provisions Concerning Insurance.
(a) Any insurance required hereunder shall be written by insurance
companies authorized or licensed to do business in the State and shall be on
such forms and written by such companies as shall be approved by the Issuer and
the Purchaser. Such insurance coverage may be effected under overall blanket or
excess coverage policies of the Company provided that the Company shall not be
deemed to be a co-insurer thereunder. Each insurance policy maintained pursuant
to this Agreement shall contain a provision to the effect that such policy shall
not be canceled or altered unless the Trustee and the Issuer are notified at
least fifteen (15) days prior to such cancellation or alteration. At least
thirty (30) days prior to the expiration of any such policy, the Company shall
furnish evidence to the Trustee that such policy has been renewed or replaced or
is no longer required by this Agreement.
(b) Each insurance policy maintained pursuant to this Agreement and
providing insurance against loss of or damage to property shall be written or
endorsed so as to name the Trustee and the Issuer as additional insureds as
their interests may appear and to have the proceeds thereof payable directly to
the Trustee as loss payee. Each policy providing public liability coverage shall
be written or endorsed so as to name the Trustee and the Issuer as additional
insureds and loss payees as their interests may appear. The Trustee shall have
no responsibility with respect to any such insurance except to receive insurance
certificates and hold the same for inspection by Bondholders. The Trustee shall
be under no duty or obligation to effect or to renew any policies of insurance,
nor shall the Trustee incur any liability for the failure of the
VII-4
Company to effect or renew insurance or to report claims thereunder.
(c) Duplicate copies of any insurance policies and evidence of renewal
or replacement thereof shall promptly be furnished to the Issuer and the Trustee
for their records. Evidence of the payment of the first year's premiums on such
policies shall be delivered to the Trustee on the Closing Date. Thereafter, the
Company shall deliver to the Trustee evidence of the payment of all additional
premiums prior to the expiration or renewal dates of all such policies.
(d) In the event of loss or damage to the Mortgaged Premises, the Net
Proceeds of any insurance provided hereunder shall be deposited with the Trustee
and applied as set forth in Article VIII hereof, and in the event of a public
liability occurrence, the Net Proceeds of any insurance provided hereunder shall
be applied towards satisfaction of such liability.
(e) The Company shall retain an insurance consultant with recognized
expertise in assessing insurance needs and not unacceptable to the Trustee in
its reasonable discretion, and shall not later than January 2, 1998 and at least
every second January 2 thereafter file a report with the Trustee and the Issuer
reporting on the adequacy of the types and amounts of insurance and the adequacy
of the insurance carriers furnishing the same pursuant to this Article VII. In
addition, the Company shall comply with any changes recommended by any such
insurance consultant.
Section 7.6. Worker's Comvensation. The Company shall comply with the
laws of the State relating to Worker's Compensation and similar worker's
protection laws.
(END OF ARTICLE VIII)
VII-5
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8. 1. Damage, Destruction and Condemnation. if, during the
Lease Term, (a) the Mortgaged Premises or any portion thereof is destroyed (in
whole or in part) or is damaged by fire or other casualty or (b) title to or any
interest in, or the temporary use of, the Mortgaged Premises or any part thereof
shall be taken under the exercise of the power of eminent domain by any
governmental body or by any person, firm or corporation acting under
governmental authority, the Company shall be obligated to continue to pay the
amounts specified in Section 6.1 hereof.
Section 8.2. Application of Net Proceeds. Subject to the requirements
of the mortgages securing any Senior Indebtedness, all Net Proceeds of any
insurance proceeds or condemnation award resulting from any event described in
Section 8.1 hereof shall be immediately deposited in a separate trust fund to be
held by the Trustee. All Net Proceeds so deposited shall be applied in one or
more of the following ways as shall be elected by the Company in a written
notice to the Trustee, which notice shall be received by the Trustee within 60
days after the receipt by the Company or the Trustee, as the case may be, of the
Net Proceeds:
(a) To the prompt repair, restoration, modification or improvement of
the Mortgaged Premises, and the Issuer has, in the Indenture, authorized and
directed the Trustee to make disbursements from such separate trust fund for
such purposes. Such disbursements shall be made by the Trustee only upon receipt
of Requisitions therefor. Any balance of the Net Proceeds remaining after such
work has been completed shall be transferred into the Bond Fund to be applied in
accordance with subsection (b) of this Section, or if the Bonds have been fully
paid (or provision for payment thereof has been made in accordance with the
provisions of the Indenture), any balance remaining in such separate trust fund
shall be paid in accordance with Section 5.11 of the Indenture.
(b) To the redemption at par of the Bonds, in whole or in part, on the
earliest practicable redemption date as specified in a written notice by the
Company to the Trustee, provided that no part of such Net Proceeds may be
applied for such redemption unless, (i) in the event that less than all of the
Bonds are to be redeemed, the Company shall furnish to the Trustee a certificate
of a Company Representative stating that (A) the property forming the part of
the Mortgaged Premises that was damaged or destroyed by such casualty or was
taken by such condemnation proceedings is not essential to the use, operation or
possession of the Project by the Company or (B) the Mortgaged Premises has been
repaired, restored, modified or improved to operate as designed, and (ii) in the
case of any damage, destruction or condemnation which does not affect
VIII-1
the Project, the Owners of a majority in aggregate principal amount of
the Bonds Outstanding shall consent in writing to such redemption. In the event
the Owners of a majority in aggregate principal amount of the Bonds Outstanding
withhold their consent pursuant to clause (ii) of the immediately preceding
sentence, the applicable Net Proceeds shall be applied to pay the principal of
the Bonds as the same becomes due and payable, whether at maturity or by
redemption (other than redemption pursuant to this Section 8.2(b)) prior to
maturity and, pending such application, shall be invested, at the direction of a
Company Representative, at a Yield not exceeding the Yield on the Bonds.
(c) If the Company elects to repair, restore, modify or improve the
Project or pay the cost thereof and fails to do so diligently, the Issuer or the
Trustee may (but shall be under no obligation to) do so on behalf of the Company
and recover the reasonable costs thereof from the Company, less the amount, if
any, collected from Net Proceeds on account of such costs. No such payment by
the Trustee or the Issuer shall affect or impair any rights of the Issuer
hereunder or of the Trustee or the Owners under the Indenture arising as a
result of such failure by the Company.
(d) If the Company fails to give the notice required under this Section
within the specified time period, the Issuer, upon notice to the Trustee and to
the Company, may direct the Company to take either of the actions therein
described and the Company shall be obligated to take such action.
(e) The Trustee shall not disburse any Net Proceeds of any insurance or
condemnation award unless the Trustee shall have received a title insurance
policy from a title insurer reasonably satisfactory to a majority in aggregate
principal amount of the Bonds Outstanding establishing that the Project, as
repaired, restored, replaced, modified or improved, shall be subject to a
mortgage lien in favor of the Trustee subject to no Liens other than Liens to
which the Mortgages were subject immediately prior to the event giving rise to
the insurance or condemnation award.
(f) In the event that after application of the Net Proceeds of any
condemnation award in accordance with Section 8.2 hereof, there remains excess
Net Proceeds, such excess Net Proceeds shall be paid first to the Company to
reimburse the Company for Condemnation Claims and the balance shall be paid to
the Issuer.
Section 8.3. Insufficiency of Net Proceeds. In the event the Company
elects to apply the Net Proceeds to the repair, restoration, modification or
improvement, and if the Net Proceeds are insufficient to pay in full the cost of
any repair, restoration, modification or improvement referred to in Section
8.2(a) hereof, the Company will nonetheless complete the work and prior to the
application of any Net Proceeds shall deposit with the
VIII-2
Trustee, for deposit into the special trust fund established pursuant
to Section 8.2 and applied as provided therein, funds in an amount sufficient to
pay any cost in excess of the amount of the Net Proceeds held by the Trustee, as
determined by an architect or engineer not unacceptable to the Trustee in its
reasonable discretion. The Company agrees that it shall not be entitled to any
reimbursement therefor from the Issuer, the Trustee or the Owners, nor shall the
Company be entitled to any diminution of the amounts payable under Section 6.1
hereof if by reason of any such insufficiency of the Net Proceeds, the Company
shall make any payments pursuant to the provisions of this Section 8.3.
Section 8.4. Conduct of Insurance or Condemnation Claims.
(a) Provided that there shall not then have occurred and then be
continuing a Default hereunder, the Company shall have the right to conduct and
control all proceedings relating to claims arising from any condemnation or
insured loss with respect to the Project and to settle such claims on such terms
as it shall deem reasonable. In the event the Company shall fail to commence
such claims within 30 days after the occurrence of the event giving rise to such
claim, or such shorter period as may be required by law or under the provisions
of the applicable insurance policy, and thereafter to prosecute such claims
diligently, the Issuer and the Trustee shall thereupon have the right (but not
the obligation) to intervene in and assume the prosecution of such claims and to
settle such claims on such terms as they shall determine.
(b) In any action or other proceeding by any governmental agency or
agencies or quasi-governmental agencies for the taking or use of any interest in
all or part of the Project or in the case of any deed, lease or other conveyance
in lieu thereof (all of which are in the Section referred to as "taking or
conveyance"), the Company, in addition to claims available to it in an
apportionment proceeding and those available by applicable statute or
regulation, including but not limited to the fair market value of the unexpired
portion of the lease term and leasehold interest and moving and related
expenses, shall be entitled to compensation for the value of the equipment,
fixtures, machinery and other articles of real, personal or mixed property owned
by the Company and attached to or situated or installed in or upon the Project
Site or the Project, whether or not such real, personal or mixed property is or
shall be affixed to the Project, the value of personal property rendered
useless, less its salvage value, and the costs and expenses required to be
incurred in order to provide substituted facilities for relocation of the
business, whether in fact substituted facilities are actually obtained and
business interruption losses and other losses relating to the disruption of the
business of the Company and its Affiliates (all of such claims, compensations
and losses collectively the "Condemnation Claims").
[END OF ARTICLE]
VIII-3
ARTICLE IX
SPECIAL COVENANTS
Section 9.1. No Warranty of Condtion or Suitability by Issuer. THE
ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE PROJECT OR THE
CONDITION THEREOF, OR THAT THE PROJECT WILL BE SUITABLE FOR THE PURPOSES OR
NEEDS OF THE COMPANY. THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS
OR IMPLIED, WITH RESPECT TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY
PART OF THE PROJECT OR ITS SUITABILITY FOR THE COMPANY'S PURPOSES.
Section 9.2. Access to the Prolect. The Company agrees that the Issuer,
the Trustee, the Bondholders and their duly authorized agents, attorneys,
experts, engineers, accountants and representatives shall have the right to
inspect the Project at all reasonable times and on reasonable notice. The
Issuer, the Trustee and their duly authorized agents shall also be permitted, at
all reasonable times, to examine the books and records of the Company with
respect to the Project.
Section 9.3. Further Assurances and Corrective Instruments. Each of the
Issuer and the Company agrees that it will, from time to time, execute,
acknowledge and deliver, or cause to be executed, acknowledged and delivered,
such supplements hereto and such further instruments as may reasonably be
required for carrying out the expressed intention of this Agreement and the
other Lease Documents.
Section 9.4. Issuer and Company Representatives. Whenever under the
provisions of this Agreement the approval of the Issuer or the Company is
required or the Issuer or the Company is required to take some action at the
request of the other, such approval or such request shall be given for the
Issuer by an Issuer Representative and for the Company by a Company
Representative. The Trustee shall be authorized to act on any such approval or
request.
Section 9.5. Financing Statements. Each of the Company and the Issuer
agrees to execute and file or cause to be executed and filed any and all
financing statements or amendments thereof or continuation statements necessary
to perfect and continue the perfection of the security interests granted in the
Mortgages and the Indenture. Within three months prior to the expiration date of
any financing statements or continuation statements, the Company shall furnish
to the Trustee evidence that such filing has taken place. The Company shall pay
all reasonable costs of the preparation and filing of such instruments. The
Trustee shall have no obligation whatsoever with respect to such financing
statements, including, without limitation, the preparation, review or filing
IX-1
thereof, provided that the Trustee shall be responsible for filing continuation
statements necessary to continue the perfection of such security interests.
Section 9.6. Compliance with Code. The Company shall at all times do
and perform all acts and things permitted by law and necessary or desirable in
order to assure that interest paid on the Bonds shall for the purposes of
federal income taxation be excludable from the gross income of the holders of
the Bonds, except in the event that any such holder is a Substantial User or
Related Person thereto. For purposes of this Section 9.6, any and all actions of
any Related Person shall be deemed to be actions of the Company. In addition,
any and all actions to be undertaken by the Company or by any other person as to
which the Issuer or the Trustee must, pursuant to the terms hereof, consent or
approve in advance, shall be deemed to be the actions of the Company or such
other person (and not the actions of the Issuer or the Trustee). The Company
shall cause any Related Person to comply with all of the provisions of this
Section as to its own operations. A breach of this Section 9.6 shall not
constitute a Default but shall be governed by the provisions of Section 3.01 of
the Indenture.
Section 9.7. Further Assurances. Each of the Issuer and the Company
shall, from time to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and such further
instruments as may reasonably be required for carrying out the intention of or
facilitating the performance of this Lease Agreement and the other Lease
Documents.
Section 9.8. Assignment. So long as an event of Default has not
occurred under this Agreement, the Issuer covenants and agrees not to sell,
assign or otherwise dispose of or encumber the Project without the written
consent of the Company, which consent shall not be unreasonably withheld or
delayed and shall only be withheld if the Company shall reasonably and in good
faith determine that the proposed sale, assignment or disposition will have a
material adverse effect on the Company's or its Affiliates, business at the
Mortgaged Premises.
Section 9.9. Annual Certificate. On each anniversary hereof, the
Company shall furnish to the Issuer, with copies to the Trustee, the following:
(a) a certificate indicating whether or not the Company is aware of any
condition, event or act which constitutes a Default, or which would constitute a
Default with the giving of notice or passage of time, under any of the Lease
Documents; and
(b) a written description of the present use of the Project and a
description of any anticipated material change in the
IX-2
use of the Project or in the number of employees employed at the Project.
[END OF ARTICLE IX]
IX-3
ARTICLE X
MAINTAIN EXISTENCE; MERGE, SELL,
TRANSFER; INDEMNIFICATION;
REDEMPTION
Section 10.1. Maintain Existence; Merge, Sell, Transfer.
(a) Except as permitted pursuant to Section 10.1(b), the Company shall
not assign any of its obligations hereunder to any other party and no purported
assignment thereof shall be effective; provided, however, that the Company shall
be permitted to sublease the Project to another party, but shall remain
obligated to comply with all of the terms and conditions of this Agreement and
the other Lease Documents, including, but not limited to, the obligations to pay
Rent under Section 6.1(a) hereof. Prior to subleasing the Project pursuant to
this Section 10.1(a), the Company shall first furnish to the Issuer and the
Trustee an opinion of Bond Counsel to the effect that such subleasing shall not
impair the excludability of interest paid on the Bonds from the gross income of
the Owners thereof for purposes of federal income taxation. Notwithstanding the
foregoing, the Company shall have the right to sublease the Project to Dockside
Refrigerated Warehouses, Inc., Gloucester Refrigerated Warehouses, Inc. and
Gloucester Marine Terminal, Inc.
(b) The Company shall maintain its existence as a legal entity and
shall not sell, assign, transfer or otherwise dispose of its leasehold interest
in the Project or substantially all of its assets; provided, however, that the
Company may merge with or into or consolidate with another entity, or sell,
assign, transfer or otherwise dispose of its leasehold interest in the Project
or substantially all of its assets without violating this Section 10.1(b)
provided (1) the Company causes the proposed surviving, resulting or transferee
entity to furnish the Issuer with such information as the Issuer shall request;
(2) the net worth of the surviving, resulting or transferee entity following the
merger, consolidation or transfer is equal to or greater than the net worth of
the Company immediately preceding the merger, consolidation or transfer; (3) any
litigation or investigations in which the surviving, resulting or transferee
entity or its officers and directors are involved, and any court, administrative
or other orders to which the surviving, resulting or transferee company or its
officers and directors are subject, relate to matters arising in the ordinary
course of business; (4) the merger, consolidation, sale, assignment or transfer
shall not impair the excludability of interest paid on the Bonds from the gross
income of the owners thereof for purposes of federal income taxation pursuant to
an opinion of Bond Counsel to be delivered to the Trustee and the Issuer; (5)
the surviving, resulting or transferee entity assumes in writing the obligations
of the Company under this Agreement and the Lease Documents; and (6) after the
merger, consolidation, sale,
X-1
assignment or transfer the Project shall be operated as a public facility under
the Act.
Section 10.2. Release and Indemnification Covenants.
(a) The Issuer, the Trustee and their respective members, agents,
servants, officers or employees, and the Bondholders shall not be liable for (1)
any loss, damage or injury to, or death of, any person occurring at or about or
resulting from any defect in the Project, (2) any damage or injury to the
persons or property of the Company or any user of the Project, or their
officers, agents, servants or employees, or any other person who may be about
the Proj ect, caused by an act of negligence of any person (other than the
Issuer, the Trustee and their respective members, officers, agents, servants and
employees, and the Bondholders, as the case may be), or (3) any costs, expenses
or damages incurred as a result of any lawsuit commenced because of action taken
in good faith by the Issuer in connection with the Project, and the Company
shall and does hereby indemnify, protect, defend and hold harmless the Issuer,
the Trustee and their respective members, agents, servants, officers or
employees, and the Bondholders from and against any and all losses, damages,
injuries, costs or expenses (including reasonable attorneys fees) and from and
against any and all claims, demands, suits, actions or other proceedings
whatsoever, brought by any person or entity whatsoever and arising or
purportedly arising from any of the foregoing.
(b) The Company shall and does hereby indemnify, protect, defend and
hold harmless the Issuer, the County, the Trustee, any Person who controls the
Issuer, the County or the Trustee (within the meaning of Section 15 of the
Securities Act of 1933, as amended) and any member, officer, director, official,
employee and attorney of the Issuer, the County and the Trustee (each an
"Indemnified Party"), from and against any and all losses, damages, injuries,
costs or expenses (including reasonable attorneys fees) and from and against any
and all claims, demands, suits, actions or other proceedings whatsoever, brought
by any person or entity whatsoever (except the Company) and arising or
purportedly arising from this Agreement, the Indenture, the other Lease
Documents or the Bonds or from the performance of the Indenture.
(c) The Company agrees to and hereby does indemnify and hold harmless
the Indemnified Parties and the Bondholders from and against any and all losses,
claims, damages, liabilities, costs or expenses, including reasonable attorneys'
fees suffered or incurred by any of the Indemnified Parties or the Bondholders
and caused by, relating to, arising out of, resulting from or in any way
connected with (1) the condition, use, possession, conduct, management,
planning, design, acquisition, construction, installation, financing (in the
case of financing, as to the Indemnified Parties
X-2
only) or sale or lease of the Project or any part thereof including without
limitation the Indemnified Matters referenced in the next paragraph; (2) any
untrue statement or alleged untrue statement of a material fact contained in any
information submitted or to be submitted by or on behalf of the Company to the
Indemnified Parties, including the Trustees, in connection with the transactions
contemplated hereby or the issuance and purchase of the Bonds; or (3) any
omission or alleged omission of a material fact necessary to be stated therein
in order to make such statements to the Indemnified Party not misleading or
incomplete.
(d) The Company covenants and agrees, at its sole cost and expense, to
indemnify, protect and save the Indemnified Parties and the Bondholders (the
"Indemnitees") harmless against and from any and all damages, losses,
liabilities, obligations, penalties, claims, litigation, demands, defenses,
judgments, suits, proceedings, costs, disbursements or expenses (including,
without limitation, attorneys' and experts' reasonable fees and disbursements)
of any kind or of any nature whatsoever (collectively, the "Indemnified
Matters") which may at any time be imposed upon, incurred by or asserted or
awarded against Indemnitees and arising from or out of:
(1) any hazardous materials, as defined under any Laws as defined
below, on, in, under or affecting the Project or any surrounding areas (but in
the case of hazardous materials in surrounding areas), only if the source of
such materials is or is alleged to be the Company or the Project, or
(2) the enforcement of this paragraph or the assertion by the Company
of any defense to its obligations hereunder, whether any of such matters arise
before or after the Closing Date or before or after foreclosure of the Mortgages
or other taking of title to the Company's interest in all or any portion of the
Project by Indemnitees or any affiliate of Indemnitees. Indemnified Matters
shall include, without limitation, all of the following: (i) the costs of
removal of any and all hazardous materials from all or any portion of the
property or any surrounding areas (except that the indemnity provided for under
this paragraph shall not cover the costs of such removal unless either (A) such
removal is required by any federal or state law, regulation or regulatory agency
("Laws") or (B) any present or future use, operation, development, construction,
alteration or reconstruction of all or any portion of the Project is or would be
conditioned in any way upon, or is or would be limited in any way until the
completion of, such removal in accordance with any Laws), (ii) additional costs
required to take necessary precautions as required by law to protect against the
release of hazardous materials on, in, under or affecting the Project into the
air, any body of water, any other public domain or any surrounding areas and
(iii) costs incurred to comply, in connection with all or any portion of the
Project or any surrounding areas, with all
X-3
applicable Laws with respect to hazardous materials. If any Indemnitee
or any affiliate of an Indemnitee takes title to the Company's interest in the
Project at a foreclosure sale, at a sale pursuant to a power of sale under the
Mortgages or otherwise, then the indemnity provided for under this paragraph
shall not apply to hazardous materials which are initially placed on, in or
under all or any portion of the Project after the date Indemnitee or such
affiliate so takes title to such interest in the Project. At any time during the
six months prior to any such foreclosure sale, sale pursuant to a power of sale
under the Mortgages or otherwise by which any Indemnitee or affiliate takes
title to such interest in the Project, such Indemnitee or affiliate shall have
the right, at its sole discretion and at the Company's sole cost and expense, to
have performed an environmental site assessment of the Project to determine
whether any hazardous materials are present.
(e) In case any action shall be brought against one or more of the
Indemnified Parties or the Bondholders based upon any of the above and in
respect of which indemnity may be sought against the Company, such Indemnified
Parties or the Bondholders shall promptly notify the Company in writing, and the
Company shall assume the defense thereof, including the employment of counsel
satisfactory to the Indemnified Parties, the payment of all expenses and the
right to negotiate and consent to settlement. Any one or more of the Indemnified
Parties or the Bondholders shall have the right to employ separate counsel at
the Company's expense in any such action and to participate in the defense
thereof. The Company shall not be liable for any settlement of any such action
effected without its consent, but if settled with the consent of the Company or
if there be a final judgment for the claimant in any such action, the Company
shall discharge the liability and indemnify and hold harmless the Indemnified
Parties and the Bondholders from and against any loss or liability by reason of
such settlement or judgment. The provision of this Section 10.2 shall survive
the repayment of the Bonds.
Section 10.3. Redemption or Defeasance of Bonds. The Company shall have
and is hereby granted the option to cause all or a portion of the Bonds to be
redeemed or defeased at the times, at the prices and in the manner permitted by
the Indenture. The Issuer and the Trustee, at the request of the Company, shall
forthwith take all steps (other than the payment of the money required for such
redemption or defeasance) necessary under the applicable redemption or
defeasance provisions of the Indenture to effect redemption or defeasance of all
or part of the Outstanding Bonds, as may be specified by the Company, on the
date established for such redemption or defeasance.
In the event that the Company exercises its option to cause all or a
portion of the Bonds to be optionally redeemed or defeased pursuant to this
Section and Section 3.02 of the Indenture, the Company shall transmit written
notice of optional redemption or
X-4
defeasance to the Issuer and the Trustee at least 60 days prior to the
date fixed for redemption or defeasance. The Company shall, not later than one
Business Day prior to the date fixed for redemption or defeasance, deposit
moneys in an amount which will be sufficient to pay principal, premium, if any,
and interest accrued and, in the case of defeasance, to accrue, on the Bonds to
be redeemed or defeased on the redemption date.
In the event that the Company exercises its option to cause all of the
Bonds to be optionally redeemed or defeased pursuant to this Section and Section
3.02 or Article VII of the Indenture and has paid all amounts required to be
paid hereunder and under the Indenture, the Company may continue to occupy the
Project without any additional Rent payments, as a tenant until the earlier to
occur of (i) the end of the Lease Term, or (ii) the occurrence of a Default
hereunder and during such period shall not be obligated to pay any amounts
pursuant to Section 6.1(a) hereof. Upon the occurrence of (i) above, the Company
shall have the right to exercise the options set forth in Section 5.3 hereof.
Upon the occurrence of (ii) above, the Company shall immediately vacate the
Project, deliver the Project to the Issuer free and clear of any lien or claims
and have no further rights or interest in the Project.
In addition, the Issuer, at the expense of the Company, shall execute,
acknowledge and deliver such mortgages, indentures, agreements and other
documents and instruments as the Company shall reasonably request in order to
enable the Company to refinance the Project, provided such refinancing shall not
impose any additional liabilities on the Issuer or in any way diminish or
interfere with the Issuer's rights in and to the Project, including its
leasehold interest in the Project Site. Prior to any refinancing of the Project
pursuant to this paragraph, the Company shall deliver to the Issuer and the
Trustee, an opinion of Bond Counsel stating that such proposed refinancing will
not adversely impact the exclusion of interest on the Bonds from gross income
for federal income tax purposes.
Section 10.4. Issuer to Grant Security Interest to Trustee. The parties
hereto agree that pursuant to the Indenture, the Issuer shall assign to the
Trustee, in order to secure payment of the Bonds, all of the Issuer's right,
title, and interest in and to this Agreement, except for certain of the Issuer's
rights as are expressly reserved pursuant to the granting clauses of the
Indenture.
Section 10.5. Indemnification of Trustee. The Company shall and hereby
agrees to indemnify the Trustee for, and hold the Trustee harmless against, any
loss, liability or expense (including the costs and expenses of defending
against any claim of liability) incurred without gross negligence or willful
misconduct by the Trustee and arising out of or in connection with its acting as
X-5
Trustee under the Indenture, the Mortgages or any other Lease Document.
[END OF ARTICLE X]
ARTICLE XI
DEFAULTS AND REMEDIES
Section 11.1. Defaults Defined. The following shall be "Defaults"
under this Agreement and the term "Default" shall mean, whenever it is used in
this Agreement, any one or more of the following events:
(a) Failure by the Company to pay any amount required to be paid under
subsection (a) of Section 6.1 hereof when due.
(b) (i) Failure by the Company to observe and perform any covenant,
condition or agreement on its part to be observed or performed under Xxxxxxx
0.0(x), (x), (x), (x), (x), (x), (x), (x), (x), (x), (x) or (q) of this
Agreement.
(ii) Failure by the Company to observe and perform any other covenant,
condition or agreement on its part to be observed or performed under this
Agreement or the other Lease Documents, other than as referred to in Section
11.1(a), for a period of thirty (30) days after the Trustee gives notice of such
default to any officer of the Company.
(c) The occurrence of a Default under the Indenture or any other Lease
Document.
(d) If any warranty or representation by or on behalf of the Company
contained in this Agreement, the Indenture, the Bond Purchase Agreement, the
Lease Documents, the Guaranty, or in any instrument or certificate furnished in
compliance with same proves false or misleading in any material respect as of
the time it was made.
(e) Failure by the Company to make one or more payments due with
respect to aggregate Indebtedness exceeding $500,000 within any applicable
periods for cure; or if any event shall occur or any condition shall exist, the
effect of which event or condition is to cause more than $500,000 of aggregate
Indebtedness or other securities of the Company to become due or subject to
acceleration, mandatory redemption or repurchase before its (or their) stated
maturity or before its (or their) regularly scheduled dates of payment,
redemption or purchase.
(f) If a custodian, receiver or liquidator is appointed for the Company
or the Company is adjudicated bankrupt or insolvent; or an order of relief is
entered under the Federal Bankruptcy Code against the Company or any of its
property is sequestered by court order and the order remains in effect for more
than 60 days; or a petition is filed against the Company under any bankruptcy,
reorganization, arrangement, insolvency, readjustment
XI-1
of debt, dissolution or liquidation law of any jurisdiction, whether
now or subsequently in effect, and is not dismissed within 60 days after filing.
(g) If the Company commences a voluntary case or files a petition in
voluntary bankruptcy where seeking relief under any provision of the Federal
Bankruptcy Code or any other bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or subsequently in effect; or consents to the filing
of any petition against it under any such law; or applies for or consents to the
appointment of or taking possession by a custodian, receiver, trustee or
liquidator of the Company or of all or any part of its property; or makes an
assignment for the benefit of its creditors; or admits in writing its inability
to pay its debt generally as they become due.
(h) Any of the Lease Documents shall not be, or shall cease to be, the
legal, valid, binding and enforceable obligations of each of the parties thereto
in accordance with its terms, or any of the Lease Documents shall not be or
shall cease to be in full force and effect.
(i) (Intentionally Omitted]
(j) (Intentionally Omitted]
(k) There shall occur a foreclosure with respect to any Senior Mortgage
Debt.
Upon the occurrence of a Default, the Company shall provide prompt
written notice to the Issuer and the Trustee, and unless terminated by the
Issuer the obligations of the Company under this Agreement shall remain in full
force and effect.
Section 11.2. Issuer's Remedies on Default. Whenever any Default
referred to in Section 11.1 hereof shall have happened and be continuing, the
Issuer may take one or any combination of the following remedial steps:
(a) The Issuer shall have the right to take whatever action at law or
in equity may appear necessary or desirable to collect the payment obligations
then due and thereafter to become due of the Company with respect to the Project
or any part thereof, or to enforce performance and observance of any obligation,
agreement or covenant of the Company under this Agreement, the Mortgage and the
other Lease Documents including but not limited to, the right to accelerate and
demand prepayment of Rent under this Agreement, by transmitting, notice of
prepayment to the Company. In addition, upon the occurrence of a Default
specified in Section 11.1(f) or 11.1(g), all Rent and other amounts due
hereunder and under the other Lease Documents shall be accelerated
XI-2
and shall become due and immediately without the requirement of any
notice. Upon receipt of notice of prepayment, or upon the occurrence of a
Default specified in Section 11.1(f) or Section 11.1(g), the Company shall pay
to the Issuer, the total Rent and all other amounts that would be payable under
this Agreement;
(b) With or without terminating this Agreement, re-enter and take
possession and control of the Project and collect and receive all rents,
revenues, income receipts and profits derived, received or receivable therefrom;
(c) With or without terminating this Agreement, re-enter and take
possession of the Project and use or sublease the Project or any part thereof,
or sell its rights therein, in accordance with the provisions of the Ground
Lease; provided, however, that nothing contained herein shall impose an
obligation upon the Issuer to so sublease the Project, but that if subleased, it
shall be done in a commercially reasonable manner, and provided that any excess
proceeds from such disposition shall be applied in accordance with the
provisions of the Ground Lease and this Agreement;
(d) Have reasonable access to and inspect, examine and make copies of
the books and records and any and all accounts, data and income tax and other
tax returns of the Company during regular business hours of the Company;
(e) Take whatever action at law or in equity may appear necessary or
desirable to collect the amounts then due and thereafter to become due, or to
enforce performance and observance of any obligation, agreement or covenant of
the Company under this Agreement, the Indenture and the Lease Documents; or
(f) Exercise any and all rights and remedies of a creditor or secured
party under the Uniform Commercial Code or other applicable law.
Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance with the provisions of the
Indenture. The rights specified in this Section 11.2 are in addition to, and not
in limitation of, any other obligations of the Company which may arise upon a
default or acceleration in respect of the Bonds, including without limitation,
under Section 6.1 hereof.
Section 11.3. [Intentionally Omitted]
Section 11.4. Specific Performance. In addition to the rights and
remedies provided for in Section 11.2 hereof, if the Company commits a breach or
threatens to commit a breach of any of the provisions of this Agreement, the
Indenture or the Lease Documents, the Issuer shall have the right, without
posting bond or other security, to seek injunctive relief or specific
performance,
XI-3
it being acknowledged and agreed that any such breach or threatened breach will
cause irreparable injury to the Issuer and that money damages will not provide
an adequate remedy.
Any amounts collected pursuant to action taken under this Section shall
be paid into the Bond Fund and applied in accordance with the provisions of the
Indenture.
Section 11.5. No Remedy Exclusive. Subject to Section 9.02 of the
Indenture, no remedy herein conferred upon or reserved to the Issuer 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 Agreement or now or hereafter existing at law or in equity. 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. In order to entitle the Issuer to exercise any remedy
reserved to it in this Article, it shall not be necessary to give any notice,
other than such notice as may be required in this Article. Such rights and
remedies as are given the Issuer hereunder shall also extend to the Trustee, and
the Trustee and the owners of the Bonds, subject to the provisions of the
Indenture, shall be entitled to the benefit of all covenants and agreements
herein contained.
Section 11.6. Agreement to Pay Attorneys' Fees and Expenses. In the
event the Company should default under any of the provisions of this Agreement
and the Issuer, the Trustee or any Bondholder should employ attorneys or incur
other expenses for the collection of payments required hereunder or the
enforcement of performance or observance of any obligation or agreement on the
part of the Company herein contained, the Company agrees that it will on demand
therefor pay to the Issuer, the Trustee or any such Bondholder the reasonable
fees of such attorneys and such other expenses so incurred.
Section 11.7. No Additional Waiver Implied by one Waiver. In the event
any agreement contained in this 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.
[END OF ARTICLE XI]
XI-4
ARTICLE XII
OPTIONS TO PREPAY RENT AND
TERMINATE OBLIGATIONS HEREUNDER
(1) The Company shall have, and is hereby granted, the option to prepay
Rent and direct the Issuer to cause the Bonds to be redeemed in whole at par
during the original Lease Term if any of the events set forth below shall occur:
(a) The Project shall have been damaged or destroyed (1) to such extent
that it cannot, in the Company's reasonable judgment, be reasonably restored
within a period of six (6) months to the condition thereof immediately preceding
such damage or destruction, and (2) to such extent that the Company is thereby
prevented, in the Company's reasonable judgment, from carrying on its normal
operations at the Project for a period of six (6) months or more.
(b) Title to, or the temporary use for a period of six (6) months or
more of, all or substantially all the Project, or such part thereof as shall
materially interfere, in the Company's reasonable judgment, with the operation
of the Project for the purpose for which the Project is designed, shall have
been taken under the exercise of the power of eminent domain by any governmental
body or by any person, firm or corporation acting under governmental authority
(including such a taking or takings as results in the Company being thereby
prevented from carrying on its normal operations at the Project for a period of
six (6) months or more).
(c) Changes which the Company cannot reasonably control or overcome in
the economic availability of materials, supplies, labor, equipment and other
properties and things necessary for the efficient operation of the Mortgaged
Premises shall have occurred, or technological or other changes shall have
occurred which in the reasonable judgment of the Company render the continued
operation of the Mortgaged Premises uneconomic.
(d) 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 Company in good faith, this Agreement shall have become
void or unenforceable or impossible of performance in accordance with the intent
and purposes of the parties as expressed in this Agreement, or unreasonable
burdens or excessive liabilities shall have been imposed on the Company in
respect to the Mortgaged Premises, including, without limitation, federal, state
or other ad
XII-1
valorem, property, income or other taxes not being imposed on the date
of this Agreement.
To exercise such option, the Company shall within ninety (90) days
following the event authorizing such termination, give written notice to the
Issuer and the Trustee and shall specify therein the date of redemption of Bonds
pursuant to Section 3.01 of the Indenture, which date shall be the next interest
payment date in respect of the Bonds for which the required notice of redemption
can practicably be given. In accordance with the terms of the Indenture, the
Company shall make arrangements for the Trustee to give the required notice of
redemption. In order to exercise such option, the Company shall pay, or cause to
be paid, on or prior to the applicable redemption date, to the Trustee, an
amount equal to the sum of the following:
(i) An amount of money which, when added to the amount then on deposit
and available in the Bond Fund, will be sufficient to retire and redeem all the
Outstanding Bonds on the earliest possible redemption date after notice as
provided in the Indenture, including, without limitation, the principal amount
thereof, all interest to accrue to said redemption date, and the applicable
redemption premium, if any, plus
(ii) An amount of money equal to the Trustee's fees and expenses under
the Indenture accrued and to accrue until such final payment and redemption of
the Bonds, plus
(iii) An amount of money equal to the Issuer's fees and expenses under
this Agreement accrued and to accrue until such final payment and redemption of
the Bonds.
In the event that the Company exercises its option to prepay Rent
pursuant to this Article XII, the Company shall have the right to continue to
occupy the Project and to retain exclusive possession and control of the Project
and shall have quiet use and enjoyment of the Project for the remainder of the
original Lease Term, and shall retain the right to exercise its options pursuant
to Section 5.3 hereof and shall have no further obligation to pay any amounts
under Section 6.1(a) hereof in respect of the original Lease Term.
(2) The Company shall have and is hereby granted the extraordinary
option to prepay Rent and direct the Issuer to cause the Bonds to be redeemed or
purchased in whole or in part, such part to consist of those Bonds owned by all
of the Owners which withhold their consent to the proposed action to be taken by
the Company, at the Redemption Prices set forth at Section 3.01(a)(2) of the
Indenture if:
(a) the Company or any of its Affiliates desires to make a Restricted
Payment which is not permitted under Section 2.4(f) of
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this Agreement calculated as of the date on which the Restricted Payment is to
be made; or
(b) the Company or any of its Affiliates desires to incur additional
Indebtedness that is not permitted under Sections 2.4(h), (i) or Section 2.4(k)
of this Agreement.
Provided, however, that prior to the exercise of its option to prepay
as provided in this Section 2 of Article XII, the Company shall have requested
the consent of the holders of a majority in aggregate principal amount of the
Bonds then Outstanding to take any action described in clause (a) or (b) of this
Section 2 of Article XII notwithstanding the applicable restrictions set forth
in this Agreement, and such consent shall have been refused.
In order to exercise its option to prepay as provided in this Section 2
of Article XII, the Company shall furnish to the Trustee, the Owners and the
Issuer the following:
(i) a certificate of the Chief Financial Officer of the Company stating
that the proposed Restricted Payment or additional Indebtedness is permitted to
be paid or incurred under the covenants and agreements relating to all other
existing Indebtedness of the Company; and
(ii) unless such prepayment is to be made simultaneously with the
payment of the Restricted Payment or incurrence of additional Indebtedness, (A)
in the case of a proposed Restricted Payment, written evidence that the Company
or an Affiliate is legally bound to make such Restricted Payment, or (B) in the
case of proposed additional Indebtedness, a written commitment, bond purchase
contract or other similar written agreement or letter evidencing a purchaser's
or lender's intent to purchase or make the loan constituting such additional
Indebtedness.
(END OF ARTICLE XII]
XII-3
ARTICLE XIII
MISCELLANEOUS
Section 13.1. Term of Agreement. This Agreement shall remain in full
force and effect from the date hereof to and including such time as all of the
Bonds and the fees and expenses of the Issuer and the Trustee and all amounts
payable hereunder shall have been fully paid or provision made for such payment.
Section 13.2. 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: if to the Issuer, to 000 Xxxxxxx Xxxxxxxx, Xxxxx 70 East,
Cherry Hill, New Jersey 08034, Attention: Executive Director; if to the Trustee,
to The Bank of New York (NJ), 000 Xxxxx Xxxx Xxxx, Xxxx Xxxxxxxx, Xxx Xxxxxx
00000, Attention: Corporate Trust Department; and if to the Company, to Xxxx
Hauling and Warehousing System, Inc., 000 X. Xxxxxxxx, Xxxxxxxxxx Xxxx, Xxx
Xxxxxx 00000, Attention: Xx. Xxxxxxx Xxxxxx, Vice President. A duplicate copy of
each notice, certificate or other communication given hereunder by the Issuer or
the Company shall also be given to the Trustee. The Issuer, the Company, the
Trustee and the Purchaser may, by written notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates or
other communications shall be sent.
Section 13.3. Binding Effect. This Agreement shall inure to the benefit
of and shall be binding upon the Issuer, the Company, the Trustee, the Owners of
the Bonds and their respective successors and assigns, subject, however, to the
limitations contained in Section 2.1(b) hereof.
Section 13.4. Severability. If any provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other provisions of this Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance of the transactions
contemplated hereby is not affected in any manner adverse to any party. Upon
such determination that any provision is invalid, illegal or incapable of being
enforced, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner to the end that the transactions contemplated
hereby are fulfilled.
Section 13.5. Amounts Remaining in Funds. Subject to the provisions of
Section 5.12 of the Indenture, it is agreed by the parties hereto that any
amounts remaining in the Bond Fund, the Project Fund, or any other fund created
under the Indenture upon
XIII-1
expiration or earlier termination of this Agreement, as provided in this
Agreement, after payment in full of the Bonds (or provision for payment thereof
having been made in accordance with the provisions of the Indenture), the fees
and expenses of the Trustee in accordance with the Indenture and all amounts
which may be due under the Bond Purchase Agreement, the Mortgages, any Lease
Document or the Guaranty shall belong to and be paid to the Company by the
Trustee.
Section 13.6. Amendments, Changes and Modification. Subsequent to the
issuance of Bonds and prior to their payment in full (or provision for the
payment thereof having been made in accordance with the provisions of the
Indenture), and except as otherwise herein expressly provided, this Agreement
may not be effectively amended, changed, modified, altered or terminated without
the written consent of the Trustee in accordance with the provisions of the
Indenture.
Section 13.7. Execution in Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument.
Section 13.8. Applicable Law. This Agreement shall be governed by and
construed in accordance with the laws of the State.
Section 13.9. Captions. The captions and headings in this Agreement are
for convenience only and in no way define, limit or describe the scope or intent
of any provisions or Sections of this Agreement.
XIII-2
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be executed
in its name and the Company has caused this Agreement to be executed in its name
all as of the date first above written.
ATTEST CAMDEN COUNTY IMPROVEMENT
AUTHORITY
/s/ Xxxxx X. Xxxxx By: /s/ Illegible
------------------------ -------------------------------
[SEAL]
ATTEST: XXXX HAULING AND WAREHOUSING
SYSTEM, INC.
/s/ Xxxx Xxxxx By: /s/ Xxxxxxx Xxxxxx
------------------------ -------------------------------
Xxxxxxx Xxxxxx
Vice President
Signature page to Lease Agreement