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Transcript Document No. 2
_________________________
SUFFOLK COUNTY INDUSTRIAL DEVELOPMENT AGENCY
SUFFOLK COUNTY, NEW YORK
and
OLS HOLDINGS, INC.
_________________________
LEASE AGREEMENT
_________________________
Dated as of April 1, 1995
$30,000,000
Suffolk County Industrial Development Agency
1995 Taxable Industrial Development Revenue Bond
(OLS Holdings, Inc./The Olsten Corporation Facility)
Duplicate
No Security Interest Can Be
Created Herein Except By
Possession Of The Original
Counterpart Hereof.
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TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . .3
ARTICLE II
REPRESENTATIONS AND COVENANTS
SECTION 2.1 Representations and Covenants of Issuer . . . . .4
SECTION 2.2 Representations and Covenants of Company. . . . .5
SECTION 2.3 Covenant with Owners. . . . . . . . . . . . . . .6
ARTICLE III
FACILITY SITE AND TITLE INSURANCE
SECTION 3.1 Agreement to Convey to Issuer . . . . . . . . . .7
SECTION 3.2 Title Insurance . . . . . . . . . . . . . . . . .7
SECTION 3.3 Subordination of Lease Agreement. . . . . . . . .7
ARTICLE IV
ACQUISITION, RENOVATION, CONSTRUCTION AND EQUIPPING OF FACILITY;
ISSUANCE OF THE BOND
SECTION 4.1 Acquisition, Renovation, Construction and
Equipping of Facility. . . . . . . . . . .8
SECTION 4.2 Issuance of the Bond;
Disbursement of Bond Proceeds. . . . . . . .9
SECTION 4.3 Application of Bond Proceeds. . . . . . . . . . .9
SECTION 4.4 Certificates of Completion. . . . . . . . . . . 10
SECTION 4.5 Completion by Company . . . . . . . . . . . . . 10
SECTION 4.6 [Reserved]. . . . . . . . . . . . . . . . . . . 10
SECTION 4.7 Remedies to be Pursued Against Contractors,
Subcontractors Materialmen and their
Sureties . . . . . . . . . . . . . . . . . 11
ARTICLE V
DEMISING CLAUSES AND RENTAL PROVISIONS
SECTION 5.1 Demise of Facility. . . . . . . . . . . . . . . 12
SECTION 5.2 Duration of Lease Term; Quiet Enjoyment . . . . 12
SECTION 5.3 Rents and Other Amounts Payable . . . . . . . . 12
SECTION 5.4 Obligations of Company Hereunder Unconditional. 13
SECTION 5.5 Payment of Additional Moneys in Prepayment
of Bond. . . . . . . . . . . . . . . . . . 13
SECTION 5.6 Rights and obligations of Company upon
Prepayment of Bond . . . . . . . . . . . . 14
SECTION 5.7 Security Interest . . . . . . . . . . . . . . . 14
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ARTICLE VI
MAINTENANCE, MODIFICATIONS,
TAXES AND INSURANCE
SECTION 6.1 Maintenance and Modifications of
Facility by Company. . . . . . . . . . . . 15
SECTION 6.2 Installation of Additional Equipment. . . . . . 15
SECTION 6.3 Taxes, Assessments and Utility Charges. . . . . 16
SECTION 6.4 Insurance Required. . . . . . . . . . . . . . . 17
SECTION 6.5 Additional Provisions Respecting Insurance. . . 18
SECTION 6.6 Application of Net Proceeds of Insurance. . . . 19
SECTION 6.7 Right of Bondholder to Pay Taxes, Insurance
Premiums and Other Charges . . . . . . . . 19
SECTION 6.8 Compliance with Articles 31 and 31-B of Tax Law 20
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
SECTION 7.1 Damage or Destruction of the Facility . . . . . 22
SECTION 7.2 Condemnation. . . . . . . . . . . . . . . . . . 23
SECTION 7.3 Condemnation of Company-Owned Property. . . . . 25
SECTION 7.4 Recovery Against Contractor, Etc. . . . . . . . 25
SECTION 7.5 Waiver of Real Property Law Section 227 . . . . 26
ARTICLE VIII
SPECIAL COVENANTS
SECTION 8.1 No Warranty of Condition or Suitability
by Issuer. . . . . . . . . . . . . . . . . 27
SECTION 8.2 Hold Harmless Provisions. . . . . . . . . . . . 27
SECTION 8.3 Right to Inspect Facility . . . . . . . . . . . 28
SECTION 8.4 Company to Maintain Its Existence . . . . . . . 28
SECTION 8.5 Qualification in State. . . . . . . . . . . . . 28
SECTION 8.6 Agreement to File Annual Statements and
provide Information. . . . . . . . . . . . 28
SECTION 8.7 Books of Record and Account; Financial
Statements . . . . . . . . . . . . . . . . 28
SECTION 8.8 Compliance With Orders, Ordinances, Etc . . . . 28
SECTION 8.9 Discharge of Liens and Encumbrances . . . . . . 31
SECTION 8.10 Identification of Equipment . . . . . . . . . . 31
SECTION 8.11 Depreciation Deductions and Investment
Tax Credit . . . . . . . . . . . . . . . . 32
SECTION 8.12 Employment Opportunities, Notice of Jobs. . . . 32
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ARTICLE IX
RELEASE OF CERTAIN LAND; ASSIGNMENTS AND
SUBLEASING; PLEDGE OF INTERESTS
SECTION 9.1 Restriction On Sale of Facility; Release of
Certain Land . . . . . . . . . . . . . . . 33
SECTION 9.2 Removal of Equipment. . . . . . . . . . . . . . 33
SECTION 9.3 Assignment and Subleasing . . . . . . . . . . . 34
SECTION 9.4 Mortgage of Facility; Pledge of Issuer's
Interests to Bondholder. . . . . . . . . . 34
SECTION 9.5 Merger of Issuer. . . . . . . . . . . . . . . . 35
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1 Events of Default Defined . . . . . . . . . . . 36
SECTION 10.2 Remedies on Default . . . . . . . . . . . . . . 38
SECTION 10.3 Remedies Cumulative . . . . . . . . . . . . . . 38
SECTION 10.4 Agreement to Pay Attorneys' Fees and Expenses . 38
SECTION 10.5 No Additional Waiver Implied by one Waiver. . . 38
ARTICLE XI
EARLY TERMINATION OF LEASE AGREEMENT;
OPTION IN FAVOR OF COMPANY
SECTION 11.1A Voluntary Termination of Lease Agreement. . . . 39
SECTION 11.1B Mandatory Termination of Lease Agreement. . . . 39
SECTION 11.2A Conditions to Early Termination of Lease
Agreement. . . . . . . . . . . . . . . . . 39
SECTION 11.2B Conditions to Early Termination of Lease
Agreement. . . . . . . . . . . . . . . . . 39
SECTION 11.3 Obligation to Purchase Facility . . . . . . . . 40
SECTION 11.4 Conveyance on Purchase. . . . . . . . . . . . . 40
SECTION 11.5 Amounts Remaining on Deposit with Bondholder
upon Payment of Bond . . . . . . . . . . . 41
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Notices . . . . . . . . . . . . . . . . . . . . 42
SECTION 12.2 Binding Effect. . . . . . . . . . . . . . . . . 42
SECTION 12.3 Severability. . . . . . . . . . . . . . . . . . 42
SECTION 12.4 Amendments, Changes and Modifications . . . . . 42
SECTION 12.5 Execution of Counterparts . . . . . . . . . . . 43
SECTION 12.6 Applicable Law. . . . . . . . . . . . . . . . . 43
SECTION 12.7 List of Additional Equipment; Further
Assurances . . . . . . . . . . . . . . . . 43
SECTION 12.8 Survival of Obligations . . . . . . . . . . . . 43
SECTION 12.9 Table of Contents and Section
Headings not Controlling . . . . . . . . . 43
EXHIBIT A - Legal Description of Real Property
EXHIBIT B - Equipment
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THIS LEASE AGREEMENT dated as of April 1, 1995 is
between the SUFFOLK COUNTY INDUSTRIAL DEVELOPMENT AGENCY, a
public benefit corporation of the State of New York having its
office at 000 Xxxxx Xxxxx, X.X. Box 6100, New York 11788-0099
(the "Issuer"), and OLS HOLDINGS, INC., a business corporation
duly organized and validly existing under the laws of the State
of New York having an office at 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx,
Xxx Xxxx 00000 (the "Company").
R E C I T A L S
Title 1 of Article 18-A of the General Municipal Law of
the State of New York was duly enacted into law as Chapter 1030
of the Laws of 1969 of the State of New York;
The aforesaid act authorizes the creation of industrial
development agencies for the Public Purposes of the State;
The aforesaid act further authorizes each such agency
to lease any or all of its facilities at such rentals and on such
other terms and conditions as it deems advisable, to issue its
bonds for the purpose of carrying out any of its corporate
purposes and, as security for the payment of the principal and
redemption price of, and interest on, any such bonds so issued
and any agreements made in connection therewith, to mortgage any
or all of its facilities or to create security interests therein
and to assign and pledge the revenues and receipts from the
leasing of its facilities;
Pursuant to and in accordance with the provisions of
the aforesaid act, the Issuer was created and is empowered under
the Act to undertake the providing, financing and leasing of the
Facility defined below;
The Facility shall consist of the acquisition of 7.5
acres located on the southeast corner of 175 Broad Hollow Road
(NYS Route 110) and Pinelawn Road (also known as Wellwood
Avenue)(County Route 3) at 175 Broad Hollow Road and at 00
Xxxxxxxx Xxxx, Xxxxxxxx, Xxxx xx Xxxxxxxxxx, Xxxxxxx Xxxxxx, New
York and the renovation and equipping thereon of an approximately
70,000 square foot two-story building and the construction of an
approximately 50,000 square foot two-story addition to the
existing building including the construction of associated
parking areas;
The Issuer proposes to provide the Facility and to
finance the cost thereof by the issuance of the Bond;
The Issuer proposes to lease the Facility to the
Company, and the Company desires to rent the Facility from the
Issuer, upon the terms and conditions set forth in this Lease
Agreement;
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The Company will then sublease the Facility to The
Olsten Corporation, a Delaware corporation duly authorized to do
business in the State of New York, having an office at 000 Xxxxx
Xxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000 (the "Sublessee"), and the
Sublessee desires to rent the Facility from the Company, upon the
terms and conditions set forth in the Sublease Agreement dated
April 13, 1995 (the "Sublease").
The Company and the Sublessee have agreed with the
Issuer, on behalf of the Issuer and as the Issuer's agent, to
acquire, renovate, contract and equip the Facility in accordance
with the Plans and Specifications;
The Issuer and the Company propose to grant a Mortgage
and Security Agreement dated April 13, 1995 (the "Mortgage") to
Broad Pines Development Corp. (the "Purchaser") as security for
the Bonds and for the Company's obligations under the Lease
Agreement as the same may be modified, amended, renewed or
extended from time to time.
AGREEMENT
For and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto do hereby
mutually agree as follows:
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ARTICLE I
DEFINITIONS
All capitalized terms used in this Lease Agreement and not
otherwise defined shall have the meanings assigned thereto in the
Schedule of Definitions attached to the Bond Purchase Agreement
(the "Bond Purchase Agreement"), dated April 13, 1995 by and
among the Issuer, the Company and the Bondholder which are
incorporated herein and made a part hereof by reference.
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ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations and Covenants of Issuer.
The Issuer makes the following representations and covenants as
the basis for the undertakings on its part herein contained:
(a) The Issuer is duly established and validly
existing under the provisions of the Act and has full legal
right, power and authority to execute, deliver and perform each
of the Issuer Documents and the other documents contemplated
thereby. Each of the Issuer Documents and the other documents
contemplated thereby have been duly authorized, executed and
delivered by the Issuer.
(b) The Issuer will cause the Land to be acquired, the
Improvements to be constructed and the Equipment to be acquired
and installed and will lease the Facility to the Company pursuant
to this Lease Agreement, all for the Public Purposes of the
State.
(c) To finance certain of the Costs of the Facility,
the Issuer will issue the Bond in the aggregate principal amount
of $30,000,000. The Bond will be issued, mature, bear interest,
be redeemable and have other terms and provisions as provided for
in the Bond and the Bond Purchase Agreement.
(d) By resolution adopted on March 23, 1994, the
Issuer determined that, based upon the review by the Issuer of
the materials submitted and the representations made by the
Company relating to the Facility, the Facility would not have a
"significant impact" or "significant effect" on the environment
within the meaning of the SEQR Act.
(e) Neither the execution and delivery of any of the
Issuer Documents and the other documents contemplated thereby or
the consummation of the transactions contemplated thereby nor the
fulfillment of or compliance with the provisions of any of the
Issuer Documents and the other documents contemplated thereby,
will conflict with or result in a breach of or constitute a
default under any of the terms, conditions or provisions of the
Act, any other law or ordinance of the State or any political
subdivision thereof or of the Issuer's Certificate of
Establishment or By-laws, as amended, or of any corporate
restriction or any agreement or instrument to which the Issuer is
a party or by which it is bound, or result in the creation or
imposition of any Lien of any nature upon any of the Property of
the Issuer under the terms of the Act or any such law, ordinance,
Certificate of Establishment, By-laws, restriction, agreement or
instrument, except for Permitted Encumbrances.
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(f) Each of the Issuer Documents and the other
documents contemplated thereby constitutes a legal, valid and
binding obligation of the Issuer enforceable against the Issuer
in accordance with its terms.
Section 2.2 Representations and Covenants of Company.
The Company makes the following representations and covenants as
the basis for the undertakings on its part herein contained:
(a) The Company is a business corporation duly
organized and validly existing under the laws of the State of New
York, is in good standing under the laws of the State and has
full legal right, power and authority to execute, deliver and
perform each of the Company Documents and the other documents
contemplated thereby. Each of the Company Documents and the
other documents contemplated thereby has been duly authorized,
executed and delivered by the Company.
(b) Neither the execution and delivery of any of the
Company Documents and the other documents contemplated thereby or
the consummation of the transactions contemplated thereby nor the
fulfillment of or compliance with the provisions of any of the
Company Documents and the other documents contemplated thereby,
will conflict with or result in a breach of or constitute a
default under any of the terms, conditions or provisions of any
law or ordinance of the State or any political subdivision
thereof or of the Company's Certificate of Incorporation or By-
laws, as amended, or any corporate restriction or any agreement
or instrument to which the Company is a party or by which it is
bound, or result in the creation or imposition of any Lien of any
nature upon any of the Property of the Company under the terms of
any such law, ordinance, Certificate of Incorporation or By-laws,
as amended, restriction, agreement or instrument, except for
Permitted Encumbrances.
(c) The Facility and the design, acquisition,
construction, equipping, use and operation thereof will conform
with all applicable zoning, planning, building and environmental
laws, ordinances, rules and regulations of governmental
authorities having jurisdiction over the Facility.
(d) The Company shall perform or cause to be
performed, for and on behalf of the Issuer each and every
obligation of the Issuer under and pursuant to the Bond Purchase
Agreement and the Mortgage.
(e) Each of the Company Documents and the other
documents contemplated thereby constitutes a legal, valid and
obligation of the Company enforceable against the Company in
accordance with its terms.
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Section 2.3 Covenant with Owners. The Issuer and the
Company agree that this Lease Agreement is executed in part to
induce the purchase by the Bondholder of the Bond. Accordingly,
all covenants and agreements on the part of the Issuer and the
Company set forth in this Lease Agreement is hereby declared to
be for the benefit of the Bondholder.
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ARTICLE III
FACILITY SITE AND TITLE INSURANCE
Section 3.1 Agreement to Convey to Issuer. The Company
has conveyed or has caused to be conveyed to the Issuer (i) good
and marketable title to the Land, including any buildings,
structures or other improvements thereon, and (ii) lien-free
title to the Equipment except as otherwise set forth on EXHIBIT B
hereto, in each case except for Permitted Encumbrances.
Section 3.2 Title Insurance. The Company and/or the
Sublessee has obtained title insurance for the benefit of the
Agency in an amount equal to $30,000,000, insuring title to the
Land and the Improvements thereon, except for Permitted
Encumbrances.
Section 3.3 Subordination of Lease Agreement. This
Lease Agreement and any and all modifications, amendments,
renewals and extensions thereof is subject and subordinate to the
Mortgage and the Bond Purchase Agreement and to any and all
modifications, amendments, consolidations, extensions, renewals,
replacements and increases thereof.
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ARTICLE IV
ACQUISITION, RENOVATION, CONSTRUCTION AND EQUIPPING OF FACILITY;
ISSUANCE OF THE BOND
Section 4.1 Acquisition, Renovation, Construction and
Equipping of Facility.
(a) The Company and the Sublessee agrees that, on
behalf of the Issuer, it will renovate and equip the entire
Facility in accordance with the Plans and Specifications.
(b) The Company and the Sublessee may revise the Plans
and Specifications from time to time with the written approval of
the Bondholder, which approval may not be unreasonably withheld
but may be subject to such conditions as the Bondholder may deem
appropriate.
(c) Title to all materials, equipment, machinery and
other items of Property incorporated or installed in the Facility
shall vest in the Issuer immediately upon the Company's and/or
the Sublessee's obtaining an interest in or to the materials,
equipment, machinery and other items of Property. The Company
and/or the Sublessee shall execute, deliver and record or file
all instruments necessary or appropriate to so vest title to the
Issuer and shall take all action necessary or appropriate to
protect such title against claims of any third Persons.
(d) The Issuer hereby appoints the Company and the
Sublessee its true and lawful agent, and the Company hereby
accepts such agency (i) to renovate and equip the Facility in
accordance with the Plans and Specifications, (ii) to make,
execute, acknowledge and deliver any contracts, orders, receipts,
writings and instructions with any other Persons, and in general
to do all things which may be requisite or proper, all for
acquisition and renovation of the Improvements and acquiring and
installing the Equipment with the same powers and with the same
validity as the Issuer could do if acting on its own behalf,
(iii) to pay all fees, costs and expenses incurred in the
acquisition and renovation of the Improvements and the
acquisition and installation of the Equipment from funds made
available therefor in accordance with this Lease Agreement, and
(iv) to ask, demand, sue for, levy, recover and receive all such
sums or money, debts, dues and other demands whatsoever which may
be due, owing and payable to the Issuer under the terms of any
contract, order, receipt, or writing in connection with
acquisition, renovation, and completion of the Improvements and
the acquisition and installation of the Equipment, and to enforce
the provisions of any contract, agreement, obligation, bond or
other performance security.
(e) The Issuer shall enter into, and accept the
assignment of, such contracts as the Company may request in order
to effectuate the purposes of this Section 4.1.
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(f) The Company and/or the Sublessee, as the case may
be, as agent for the Issuer, shall comply with all provisions of
the Labor Law of the State except as hereinafter noted,
applicable to the acquisition, renovation and equipping of the
Facility and shall include in all construction contracts all
provisions which may be required to be inserted therein by such
provisions. In addition, the Company specifically represents
that it will comply with Section 220 of the Labor Law of the
State, as if such Section was applicable to the Facility.
Section 4.2 Issuance of the Bond; Disbursement of Bond
Proceeds. In order to provide funds for payment of the Costs of
the Facility, together with other payments and incidental
expenses in connection therewith, the Issuer agrees that it will
issue, sell and cause the Bond to be delivered on the terms set
forth in the Bond Purchase Agreement. Bond Proceeds shall be
disbursed in accordance with the provisions of the Bond Purchase
Agreement and Section 4.3 hereof.
Section 4.3 Application of Bond Proceeds. Bond
Proceeds, upon the written direction of an Authorized
Representative of the Company, and on the conditions provided for
in the Bond Purchase Agreement, shall be applied to pay only the
following costs and items of expense paid and incurred by or on
behalf of the Issuer:
(i) the cost of preparing the Plans and
Specifications (including any preliminary study or
planning of the Facility or any aspect thereof),
(ii) all costs of acquiring, renovating, and
equipping the Facility (including architectural,
engineering and supervisory services with respect to
the Facility),
(iii) all fees, taxes, charges and other expenses
for recording or filing, as the case may be, the
instrument or instruments conveying the Land to the
Issuer, and any other documents that the Issuer or the
Bondholder may deem desirable in order to protect or
perfect the title to the Land and any security interest
contemplated by the Mortgage and the Bond Purchase
Agreement,
(iv) interest payable on the Bond during the
Construction Period and interest payable during the
Construction Period on such interim financing as the
Company may have secured with respect to the Facility
in contemplation of the issuance of the Bond,
(v) all legal, accounting and any other fees,
costs and expenses incurred in connection with the
preparation, printing, reproduction, authorization,
issuance, execution, sale and distribution of the Bond
and Bond Documents and all other documents in
connection herewith or therewith, with the acquisition
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of title to the Facility and with any other
transaction contemplated by this Lease Agreement or
Bond Purchase Agreement,
(vi) any administrative fee of the Issuer, and
(vii) reimbursement to the Company for any of the
above-enumerated costs and expenses.
Section 4.4 Certificates of Completion. To establish
the Completion Date, the Company shall deliver to the Issuer and
the Bondholder a certificate signed by an Authorized
Representative of the Company (i) stating that acquisition,
renovation, and equipping of the Facility has been completed in
accordance with the Plans and Specifications therefor; (ii)
stating that except for amounts retained in funds or accounts as
the Bondholder and Company deem necessary for the payment of
incurred, but unpaid, items of the Costs of the Facility, the
payment of all labor, services, materials and supplies used in
such acquisition, renovation, and equipping has been made or
provided for; and (iii) such certificates as may be satisfactory
to the Bondholder, including without limitation, a final
certificate of occupancy, if applicable. The Company agrees to
complete the acquisition, renovation, construction and equipping
of the Facility on or before June 1, 1995.
Section 4.5 Completion by Company.
(a) In the event that the Net Proceeds of the Bond are
not sufficient to pay in full all costs of acquiring, renovating,
and equipping the Facility in accordance with the Plans and
Specifications, the Company agrees to pay, for the benefit of the
Issuer and the Bondholder, all such sums as may be in excess of
the Net Proceeds of the Bond. Title to all portions of the
Facility installed or constructed at the Company's cost or
expense shall immediately upon such installation or construction
vest in the Issuer. The Company shall execute, deliver and
record or file such instruments as the Issuer or the Bondholder
may request in order to perfect or protect the Issuer's title to
or lien of the Mortgage on such portions of the Facility.
(b) The Company shall not be entitled to any
reimbursement for such excess cost or expense from the Issuer or
Bondholder or the Owner of the Bond nor shall it be entitled to
any diminution or abatement of any other amounts payable by the
Company under this Lease Agreement.
Section 4.6 Reserved.
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Section 4.7 Remedies to be Pursued Against Contractors,
Subcontractors, Materialmen and their Sureties. In the event of
a default by any contractor, subcontractor, materialman or other
Person under any contract made by it in connection with the
Facility or in the event of a breach of warranty or other
liability with respect to any materials, workmanship, or
performance guaranty, the Company and/or the Sublessee, as the
case may be at its expense, either separately or in conjunction
with others, may pursue any and all remedies available to it and
the Issuer, as appropriate, against the contractor,
subcontractor, materialman or other Person so in default and
against any surety for the performance of such contract. The
Company and/or the Sublessee, as the case may be in its own name
or in the name of the Issuer, may prosecute or defend any action
or proceeding or take any other action involving any such
contractor, subcontractor, materialman or surety or other Person
which the Company and/or the Sublessee, as the case may be deems
reasonably necessary, and in such event the Issuer, at the
Company's or the Sublessee's expense, hereby agrees to cooperate
fully with the Company and/or the Sublessee, as the case may be,
and to take all action necessary to effect the substitution of
the Company for the Issuer in any such action or proceeding. The
Net Proceeds of any recovery from a contractor or subcontractor
or materialman or other Person shall be deposited in the Renewal
Fund and applied as provided in Section 7.4 hereof and the Bond
Purchase Agreement.
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ARTICLE V
DEMISING CLAUSES AND RENTAL PROVISIONS
Section 5.1 Demise of Facility. The Issuer hereby
leases the Facility, consisting of the Land as particularly
described in Exhibit A attached hereto, the Improvements and the
Equipment as particularly described in Exhibit B attached hereto,
to the Company and the Company hereby takes the Facility from the
Issuer upon the terms and conditions of this Lease Agreement.
Section 5.2 Duration of Lease Term; Quiet Enjoyment.
(a) The Issuer shall deliver to the Company sole and
exclusive possession of the Facility (subject to Sections 8.3 and
10.2 hereof) and the leasehold estate created hereby shall
commence on the Closing Date and the Company shall accept
possession of the Facility on the Closing Date.
(b) Except as provided in Section 10.2 hereof, the
leasehold estate created hereby shall terminate at 11:59 p.m. on
April 13, 2007 or on such earlier date as may be permitted by
Section 11.1 hereof; provided, however, that, except as provided
in Section 10.2 hereof, in no event shall this Lease Agreement be
terminated until the Bond shall have been paid in full or
provision for such full payment shall have been made.
(c) Except as provided in Sections 8.3 and 10.2
hereof, the Issuer shall neither take nor suffer or permit any
action to prevent the Company during the Lease Term from having
quiet and peaceable possession and enjoyment of the Facility and
will, at the request of the Company and at the Company's cost,
cooperate with the Company in order that the Company may have
quiet and peaceable possession and enjoyment of the Facility as
hereinabove provided.
Section 5.3 Rents and Other Amounts Payable.
(a) The Company shall pay basic rent for the Facility
on or before each Bond Payment Date directly to the Bondholder,
in an amount equal to the Debt Service Payment becoming due and
payable on the Bond on such Bond Payment Date (with a 3 day grace
period).
(b) In addition to the payments of rent pursuant to
Section 5.3(a) hereof, throughout the Lease Term, the Company
shall pay to the Issuer as additional rent, within ten (10) days
of the receipt of demand therefor, an amount equal to the sum of
the expenses of the Issuer and the members thereof incurred (i)
by reason of the Issuer's ownership, financing or leasing of the
Facility or (ii) in connection with the carrying out of the
Issuer's duties and obligations under the Issuer Documents, the
payment of which is not otherwise provided for under this Lease
Agreement. The foregoing shall not be deemed to include any
annual or continuing administrative or management fee beyond any
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initial administrative fee or fee for services rendered by the
Issuer.
(c) The Company, under the provisions of this Section
5.3, agrees to make the above-mentioned payments in immediately
available funds and without any further notice in lawful money of
the United States of America. In the event the Company shall
fail to timely make any payment required in Section 5.3(a) the
Company shall pay the same together with all late payment
penalties specified in the Bond. In the event the Company shall
fail to timely make any payment required in Section 5.3(b), the
Company shall pay the same together with interest on such payment
at the rate set forth in the Bond, but in no event at a rate
higher than the maximum lawful prevailing rate, from the date on
which such payment was due until the date on which such payment
is made.
Section 5.4 Obligations of Company Hereunder
Unconditional. The obligations of the Company to make the
payments required in Section 5.3 hereof, and to perform and
observe any and all of the other covenants and agreements on its
part contained herein shall be a general obligation of the
Company, and shall be absolute and unconditional irrespective of
any defense or any rights of setoff, recoupment or counterclaim
it may otherwise have against the Issuer. The Company agrees it
will not (i) suspend, discontinue or xxxxx any payment required
hereunder, (ii) fail to observe any of its other covenants or
agreements in this Lease Agreement or (iii) terminate this Lease
Agreement for any cause whatsoever unless and until the Bond,
including premium, if any, and interest thereon, is paid or
provided for.
Subject to the foregoing provisions, nothing contained
in this Section shall be construed to release the Issuer from the
-performance of any of the agreements on its part contained in
this Lease Agreement or to affect the right of the Company to
seek reimbursement, and in the event the Issuer should fail to
perform any such agreement, the Company may institute such
separate action against the Issuer as the Company may deem
necessary to compel performance or recover damages for non-
performance, and the Issuer covenants that it will not, subject
to the provisions of Section 8.3 and Article X hereof, take,
suffer or permit any action which will adversely affect, or
create any defect in its title to the Facility or which will
otherwise adversely affect the rights or estate of the Company
hereunder, except upon written consent of the Company.
Section 5.5 Payment of Additional Moneys in Prepayment
of Bond. In addition to any other moneys required or permitted
to be paid pursuant to this Lease Agreement, the Company may,
subject to the terms of the Bond Purchase Agreement, pay moneys
to the Bondholder (i) to be applied as the prepayment of amounts
to become due and payable by the Company pursuant to Section
5.3(a) hereof, or (ii) to be used for the redemption or
prepayment of any Bond at such time or times and on such terms
and conditions as is provided in such Bond and in the Bond
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Purchase Agreement. The Company shall notify the Issuer and the
Bondholder in writing as to the purpose of any such payment.
Section 5.6 Rights and obligations of the Company upon
Prepayment of Bond. In the event the Bond shall have been paid
in full prior to the termination date specified in Section 5.2(b)
hereof or provision for such payment shall have been made in
accordance with the Bond Purchase Agreement, (i) all references
in this Lease Agreement to the Bond, the Assignment, the Mortgage
and the Bond Purchase Agreement shall be ineffective and (ii) the
Company shall be entitled, at its option, to the exclusive use,
occupancy and enjoyment of the Facility from the date of such
payment until the scheduled expiration of the Lease Term, without
the payment of any further basic rent under Section 5.3(a)
hereof, but otherwise on all of the terms and conditions hereof,
except that the Company shall not be required to carry any
insurance for the benefit of the Bondholder, or the Company may,
at its option, require the Issuer to convey the Facility to the
Company pursuant to the terms of Section 11.3 hereof. In the
event of any such payment or the making of any such provision,
the Issuer, at the sole cost of the Company, shall obtain and
record or file appropriate discharges or releases of the
Assignment and any other security interest relating to the
Facility or this Lease Agreement.
Section 5.7 Security Interest. The Company
acknowledges that this Lease Agreement is intended as security
for payment of the principal of and redemption premium, if any,
and interest on the Bond.
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ARTICLE VI
MAINTENANCE, MODIFICATIONS, TAXES AND INSURANCE
Section 6.1 Maintenance and Modifications of Facility
by Company.
(a) The Company shall not abandon the Facility or
cause or permit any waste to the Improvements. During the Lease
Term, the Company shall not remove any part of the Facility
outside of the jurisdiction of the Issuer and shall (i) keep the
Facility in as reasonably safe condition as its operations shall
permit; (ii) make all necessary repairs and replacements to the
Facility (whether ordinary or extraordinary, structural or
nonstructural, foreseen or unforeseen); and (iii) operate the
Facility in a sound and economic manner.
(b) With the written consent of the Issuer and the
Bondholder, which shall not be unreasonably withheld or delayed,
the Company from time to time may make any structural additions,
modifications or improvements to the Facility or any part
thereof, provided such actions do not adversely affect the
structural integrity of the Facility. All such additions,
modifications or improvements made by the Company shall become a
part of the Facility and the Property of the Issuer. The Company
agrees to deliver to the Issuer all documents which may be
necessary or appropriate to convey to the Issuer title to such
Property.
Section 6.2 Installation of Additional Equipment.
Subject to the provisions of Section 8.10 hereof, the Company or
any permitted sublessee of the Company from time to time may
install additional machinery, equipment or other personal
property in the Facility (which may be attached or affixed to the
Facility), and such machinery, equipment or other personal
property shall not become, or be deemed to become, a part of the
Facility, provided that the acquisition and installation of such
property is not financed from either the Construction Fund or the
Renewal Fund. The Company from time to time may create or permit
to be created any Lien on such machinery, equipment or other
personal property. Further, the Company from time to time may
remove or permit the removal of such machinery, equipment and
other personal property from the Facility, provided that any such
removal of such machinery, equipment or other personal property
shall not occur (i) if any Event of Default has occurred; or (ii)
if any such removal shall adversely affect the structural
integrity of the Facility or impair the overall operating
efficiency of the Facility for the purposes for which it is
intended, and provided further, that if any damage is occasioned
to the Facility by such removal, the Company agrees to promptly
repair such damage at its own expense.
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6.3 Taxes, Assessments and Utility Charges.
(a) The Company agrees to pay, as the same become due
and before any fine, penalty, interest (except interest which is
payable in connection with legally permissible installment
payments) or other cost may be added thereto or become due or be
imposed by operation of law for the non-payment thereof, (i) all
taxes, payments in lieu of taxes and governmental charges of any
kind whatsoever which may at any time be lawfully assessed or
levied against or with respect to the Facility and any machinery,
equipment or other Property installed or brought by the Company
therein or thereon, including, without limiting the generality of
the foregoing, any sales or use taxes imposed with respect to the
Facility or any part or component thereof, or the rental or sale
of the Facility or any part thereof and any taxes levied upon or
with respect to the income or revenues of the Issuer from the
Facility; (ii) all utility and other charges, including service
charges, incurred or imposed for or with respect to the
operation, maintenance, use, occupancy, upkeep and improvement of
the Facility; and (iii) all assessments and charges of any kind
whatsoever lawfully made by any governmental body for public
improvements; and (iv) at the option of the Bondholder all
insurance required to be maintained by Section 6.4 hereof;
provided that, with respect to special assessments or other
governmental charges that may lawfully be paid in installments
over a period of years, the Company shall be obligated under this
Lease Agreement to pay only such installments as are required to
be paid during the Lease term.
(b) The Company may in good faith contest any such
taxes, assessments and other charges. In the event of any such
proceedings, the Company may permit the taxes, assessments or
other charges so contested to remain unpaid during the period of
such proceedings and any appeal therefrom, provided, however,
that (i) neither the Facility nor any part thereof or interest
therein would be in any immediate danger of being sold, forfeited
or lost by reason of such proceedings and (ii) the Company shall
have set aside on its books adequate reserves with respect
thereto and shall have furnished such security, if any, as may be
required in such proceedings or requested by the Issuer or the
Bondholder.
(c) The Issuer agrees that if it or the Company
contests any taxes, assessments or other charges provided for in
paragraph (b) hereof, all sums returned, as a result thereof,
will be promptly transmitted by the Issuer to the Company and
that the Company shall be entitled to retain all such amounts.
(d) Within thirty (30) days of receipt of written
request therefor, the Company shall deliver to the Bondholder
official receipts of the appropriate taxing authorities or other
reasonably satisfactory to the Bondholder evidencing payment of
any tax.
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Section 6.4 Insurance Required. At all times
throughout the Lease Term, including, when indicated herein,
during the Construction Period, the Company shall, at its sole
cost and expense, maintain or cause to be maintained insurance
against such risks and for such amounts as are customarily
insured against by facilities of like size and type and shall
pay, as the same become due and payable, all premiums with
respect thereto, including, but not necessarily limited to:
(a) Insurance against loss or damage by fire,
lightning and other casualties customarily insured against, with
a uniform standard extended coverage endorsement, such insurance
to be in an amount not less than the full replacement value of
the completed Improvements, exclusive of footings and
foundations, as determined by a recognized appraiser or insurer
selected by the Company, but in no event less than the principal
amount of the Bonds. During the Construction Period, such policy
shall be written in the so-called "Builder's Risk Completed Value
Non-Reporting Form" and shall contain a provision granting the
insured permission to complete and/or occupy.
(b) Workers' compensation insurance, disability
benefits insurance and each other form of insurance which the
Company is required by law to provide, covering loss resulting
from injury, sickness, disability or death of employees of the
Company who are located at or assigned to the Facility. This
coverage shall be in effect from and after the Completion Date or
on such earlier date as any employees of the Company first occupy
the Facility.
(c) Insurance protecting the Issuer and the Company
against loss or losses from liability imposed by law or assumed
in any written contract (including the contractual liability
assumed by the Company under Section 8.2 hereof) and arising from
personal injury, including bodily injury or death, or damage to
the property of others, caused by an accident or occurrence with
a limit of liability of not less than $1,000,000 (combined single
limit for personal injury, including bodily injury or death, and
property damage) and with a blanket excess liability coverage in
an amount not less than $9,000,000 combined single limit or
equivalent protecting the Issuer and the Company against any loss
or liability or damage for personal injury, including bodily
injury or death, or property damage. This coverage shall also be
in effect during the Construction Period.
(d) During the Construction Period (and for at least
one year thereafter in the case of Products and Completed
Operations as set forth below), the Company shall cause the
general contractor to carry liability insurance of the type and
providing the minimum limits set forth below:
(i) Workers, compensation and employer's
liability with limits in accordance with applicable law.
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(ii) Comprehensive general liability providing
coverage for:
Premises and Operations
Products and Completed Operations
Owners Protective
Contractors Protective
Contractual Liability
Personal Injury Liability
Broad Form Property Damage
(including completed operations)
Explosion Hazard
Collapse Hazard
Underground Property Damage Hazard
Such insurance shall have a limit of liability of not less than
$1,000,000 (combined single limit for personal injury, including
bodily injury or death, and property damage).
(iii) Comprehensive auto liability, including all
owned, non-owned and hired autos, with a limit of liability of
not less than $1,000,000 (combined single limit for personal
injury, including bodily injury or death, and property damage).
(iv) Excess "umbrella" liability providing
liability insurance in excess of the coverages in (i), (ii) and
(iii) above with a limit of not less than $9,000,000.
Section 6.5 Additional Provisions Respecting Insurance.
(a) All insurance required by Section 6.4 hereof shall
be procured and maintained in financially sound and generally
recognized responsible insurance companies selected by the entity
required to procure the same and authorized to write such
insurance in the State. Such insurance may be written with
deductible amounts comparable to those on similar policies
carried by other companies engaged in businesses similar in size,
character and other respects to those in which the procuring
entity is engaged. All policies of insurance required by Section
6.4 hereof shall provide for at least thirty (30) days' prior
written notice of the restriction, cancellation or modification
thereof to the Issuer. The policy evidencing the insurance
required by Section 6.4(c) hereof shall name the Issuer as
additional named insured. All policies evidencing the insurance
required by Sections 6.4(d)(ii) and (iv) shall name the
Issuer and the Company as additional named insured.
(b) A copy of the policy or certificate (or binder) of
insurance required by Section 6.4(c) hereof shall be delivered to
the Issuer on or before the Closing Date. A copy of the policies
or original certificates (or original binders) of insurance
required by Sections 6.4(d)(i), (ii) and (iv) hereof shall be
delivered to the Issuer on or before the Closing Date. The
Company shall deliver to the Issuer before the first Business Day
of April in each calendar year thereafter a certificate dated not
earlier than the immediately preceding month reciting that there
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is in full force and effect, with a term covering at least the
next succeeding twelve (12) months, insurance of the types and in
the amounts required by Section 6.4 hereof and complying with the
additional requirements of Section 6.5(a) hereof. Prior to the
expiration of each such policy, the Company shall furnish the
appropriate Person with evidence that such policy has been
renewed or replaced or is no longer required by this Lease
Agreement. The Company shall provide such further information
with respect to the insurance coverage required by this Lease
Agreement as the Issuer may from time to time reasonably require.
Section 6.6 Application of Net Proceeds of Insurance.
The Net Proceeds of the insurance carried pursuant to the
provisions of Section 6.4 hereof shall be applied as follows: (i)
the Net Proceeds of the insurance required by Sections 6.4(a)
hereof shall be applied as provided in Section 7.1 hereof and
(ii) the Net Proceeds of the insurance required by Sections
6.4(b), (c), and (d) hereof shall be applied toward
extinguishment or satisfaction of the liability with respect to
which such insurance proceeds may be paid.
Section 6.7 Right of Bondholder to Pay Taxes, Insurance
Premiums and Other Charges. If the Company fails (i) to pay any
tax, together with any fine, penalty, interest or cost which may
have been added thereto or become due or been imposed by
operation of law for nonpayment thereof, or payments-in-lieu-of-
taxes pursuant to the PILOT Agreement, assessment or other
governmental charge required to be paid by Section 6.3 hereof,
(ii) to maintain any insurance required to be maintained by
Section 6.4 hereof, (iii) to pay any amount required to be paid
by any law or ordinance relating to the use or occupancy of the
Facility or by any requirement, order or notice of violation
thereof issued by any governmental person, (iv) to pay any
mechanic's Lien which is recorded or filed against the Facility
or any part thereof (unless contested in accordance with the
provisions of Section 8.9(b) hereof), (v) to pay any real
property transfer gains tax, together with any interest and
penalties thereon, which is due and payable by reason of a
conveyance of the leasehold estate in and to the Facility
pursuant to a judicial sale in any foreclosure action or by deed
and/or assignment in lieu of foreclosure or (vi) to pay any other
amount or perform any act hereunder required to be paid or
performed by the Company hereunder, the Issuer or the Bondholder
may pay or cause to be paid such tax or payments-in-lieu-of-taxes
pursuant to the PILOT Agreement, assessment or other governmental
charge or the premium for such insurance or any such other
payment or may perform any such act. No such payment shall be
made or act performed by the Issuer or the Bondholder until at
least ten (10) days shall have elapsed since notice shall have
been given by the Bondholder to the Issuer, with a copy of such
notice being given to the Company (or by the Issuer to the
Company and the Bondholder), and in the case of any tax,
assessment or governmental charge or the amounts specified in
paragraphs (iii), (vi) and (v) hereof, no such payment shall be
made in any event if the Company is contesting the same in good
faith to the extent and as permitted by this Lease Agreement
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unless an Event of Default hereunder shall have occurred and be
continuing. No such payment by the Issuer or the Bondholder
shall affect or impair any rights of the Issuer hereunder or of
the Bondholder under the Bond Purchase Agreement or the Mortgage
arising in consequence of such failure by the Company. The
Company shall, on demand, reimburse the Issuer or the Bondholder
for any amount so paid or for expenses or costs incurred in the
performance of any such act by the Issuer or the Bondholder
pursuant to this Section (which shall include all reasonable
legal fees and disbursements), together with interest thereon
from the date of payment of such amount, expense or cost by the
Issuer or the Bondholder at the rate set forth in the Bond and
such amount, together with such interest, shall become additional
indebtedness secured by the Mortgage.
Section 6.8. Compliance with Articles 31 and 31-B of Tax
Law.
(a) The Company shall keep true and complete records
pertaining to its acquisition of title to the fee or the
leasehold estate in and to the Facility, all subsequent transfers
of any interests therein or any part thereof and all changes in
the controlling interest (by way of changes in stock ownership,
capital, profits, beneficial interest or otherwise) in the
Company or any related entity which may hereafter own and/or
acquire title to the fee or the leasehold estate in and to the
Facility, including, but not limited to, a copy of the contract
of sale, title report, assignment of lease, closing statement,
transferor's affidavit, questionnaire or return, statement of
tentative assessment and any other notices or determinations of
tax received from the New York State Department of Taxation and
Finance, transferor's supplemental return, the date and cost of
all "capital improvements" made to the Land, the Improvements or
any part thereof and evidence of the payment of any real property
transfer gains tax imposed by reason of Article 31-B of the New
York Tax Law and the filing of all reports and any other
information or documentation required by the New York State
Department of Taxation and Finance by reason of said Article or
any regulations promulgated thereunder. All such records shall
be made available to the Issuer and the Bondholder for inspection
from time to time upon their request.
(b) If any real property transfer gains tax shall be
due and payable upon the conveyance of the leasehold estate in
and to the Facility pursuant to a judicial sale in any
foreclosure action or by deed and/or assignment in lieu of
foreclosure, the Company shall, at the request of the Issuer or
the Bondholder, (i) provide the Issuer and/or the Bondholder with
a copy of all such records and will prepare, execute, deliver and
file any affidavits, questionnaires, returns or supplemental
returns required of the Company, as transferor, including, but
not limited to, a statement in affidavit form as to the "original
purchase price" of the fee or the leasehold estate in and to the
Facility and the cost of all "capital improvements" made to the
Land, the Improvements or any part thereof by the Company or any
related entity and the date or dates on which such improvements
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were made and (ii) pay or cause to be paid any real property
transfer gains tax, together with any interest and penalties
thereon, which may be due and payable by reason of such
conveyance. The Company hereby appoints the Bondholder its true
and lawful agent and attorney-in-fact (which appointment shall be
deemed to be an agency coupled with an interest), with full power
of substitution, to prepare, execute, deliver and file on its
behalf any and all affidavits, questionnaires, returns and
supplemental returns which the Company, as transferor, has failed
or refused to execute and deliver to the Issuer or the Bondholder
within thirty (30) days after notice and request therefor.
(c) If any real property transfer tax shall be due and
payable upon the conveyance of the leasehold estate in and to the
Facility by the Issuer to the Company pursuant to this Lease, the
Company shall, (i) provide the Issuer with a copy of all such
records, and will prepare, execute, deliver and file any
affidavits, questionnaires, returns, or supplemental returns
required of the Company, as transferee, and (ii) pay or cause to
be paid any real property transfer tax, together with any
interest and penalties thereon, which may be due and payable by
reason of conveyance. The Company hereby appoints the Bondholder
its true and lawful agent and attorney-in-fact (which appointment
shall be deemed to be an agency coupled with an interest), with
full power of substitution, to prepare, execute, deliver and file
on its behalf any and all affidavits, questionnaires, returns and
supplemental returns which the Company, as transferee, has failed
or refused to execute and deliver to the Issuer or the Bondholder
within thirty (30) days after notice and request therefor.
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ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damage or Destruction of the Facility.
(a) If the Facility shall be damaged or destroyed (in
whole or in part) at any time during the Lease Term:
(i) the Issuer shall have no obligation to
replace, repair, rebuild, restore or relocate the
Facility; and
(ii) there shall be no abatement or reduction in
the amounts payable by the Company under this Lease
Agreement (whether or not the Facility is replaced,
repaired, rebuilt or restored); and
(iii) upon the occurrence of such damage or
destruction, the Net Proceeds derived from the
insurance shall be paid to the Bondholder and deposited
in the Renewal Fund and except as otherwise provided in
Section 11.1 and subsection (f) hereof, the Company
shall at its option either (A) replace, repair, rebuild
or restore the Facility or (B) prepay a portion of the
Bond in a principal amount equal to such Net Proceeds
in accordance with the Bond Purchase Agreement.
If the Company replaces, repairs, rebuilds or restores
the Facility, the Bondholder shall disburse the Net Proceeds from
the Renewal Fund in the manner set forth in Section 4.06 of the
Bond Purchase Agreement to pay or reimburse the Company for the
cost of such replacement, repair, rebuilding or restoration.
(b) Any such replacements, repairs, rebuilding or
restorations shall be subject to the following conditions:
(i) the Facility shall be in substantially the
same condition and value as an operating entity as
existed prior to the damage or destruction;
(ii) the Facility shall continue to constitute a
"project" as such term is defined in the Act; and
(iii) the Facility will be subject to no Liens,
other than Permitted Encumbrances.
(c) All such repair, replacement, rebuilding or
restoration of the Facility shall be effected with due diligence
in a good and workmanlike manner in compliance with all
applicable legal requirements and be promptly and fully paid for
Company in accordance with the terms of the applicable contracts.
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(d) In the event such Net Proceeds are not sufficient
to pay in full the costs of such replacement, repair, rebuilding
or restoration the Company shall nonetheless complete the work
and pay from its own moneys that portion of the costs thereof in
excess of such Net Proceeds. All such replacements, repairs,
rebuilding, restoration or relocations made pursuant to this
Section, whether or not requiring the expenditure of the
Company's own money, shall automatically become a part of the
Facility as if the same were specifically described herein.
(e) Any balance of such Net Proceeds remaining in the
Renewal Fund after payment of all costs of replacement, repair,
rebuilding or restoration shall be used to prepay the Bond as
provided in the Bond Purchase Agreement.
(f) If the Company shall exercise its option to
terminate this Lease Agreement pursuant to Section 11.1 hereof
such Net Proceeds shall be applied to the payment of the amounts
required to be paid by Section 11.2 hereof. If an Event of
Default hereunder shall have occurred and the Bondholder shall
have exercised its remedies under Section 10.2 hereof such Net
Proceeds shall be applied to the payment of the amounts required
to be paid by Section 10.2 and Section 10.4 hereof.
(g) If the entire amount of the Bond and interest
thereon has been fully paid, or provision therefor has been made
in accordance with the Bond Purchase Agreement, all such
remaining Net Proceeds shall be paid to the Company.
(h) Except upon the occurrence of an Event of Default,
the Company with the consent of the Bondholder shall have the
right to settle and adjust all claims under any policies of
insurance required by Section 6.4(a), and (e) hereof on behalf of
the Issuer and on its own behalf.
Section 7.2 Condemnation.
(a) If title to or use of the Facility shall be taken
by Condemnation (in whole or in part) at any time during the
Lease Term:
(i) the Issuer shall have no obligation to
replace, repair, rebuild, restore or relocate the
Facility or acquire, by construction or otherwise,
facilities of substantially the same nature as the
Facility ("Substitute Facilities,,); and
(ii) there shall be no abatement or reduction in
the amounts payable by the Company under this Lease
Agreement (whether or not the Facility is replaced,
repaired, rebuilt, restored or relocated or Substitute
Facilities acquired); and
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(iii) upon the occurrence of such Condemnation,
the Net Proceeds derived therefrom shall be paid to the
Bondholder and deposited in the Renewal Fund and except
as otherwise provided in Section 11.1 and subsection
(f) hereof, the Company shall either:
(A) replace, repair, rebuild, restore or
relocate the Facility or acquire Substitute
Facilities, or
(B) prepay a portion of the Bond in an
amount equal to such Net Proceeds in accordance
with the Bond Purchase Agreement.
If the Company replaces, repairs, rebuilds, restores or
relocates the Facility or acquires Substitute Facilities, the
Bondholder shall disburse the Net Proceeds from the Renewal Fund
in the manner set forth in Section 4.06 of the Bond Purchase
Agreement to pay or reimburse the Company for the cost of such
replacement, repair, rebuilding, restoration, relocation or
acquisition of Substitute Facilities.
(b) Any such replacements, repairs, rebuilding,
restorations, relocations or acquisitions of Substitute
Facilities shall be subject to the following conditions:
(i) the Facility or the Substitute Facilities
shall be in substantially the same condition and value
as an operating entity as existed prior to the
condemnation;
(ii) the Facility or the Substitute Facilities
shall continue to constitute a "project" as such term
is defined in the Act; and
(iii) the Facility or the Substitute Facilities
will be subject to no Liens, other than Permitted
Encumbrances.
(c) All such repair, replacement, rebuilding,
restoration or relocation of the Facility shall be effected with
due diligence in a good and workmanlike manner in compliance with
all applicable legal requirements and be promptly and fully paid
for by the Company in accordance with the terms of the applicable
contracts.
(d) In the event such Net Proceeds are not sufficient
to pay in full the costs of such replacement, repair, rebuilding,
restoration, relocation or acquisition of Substitute Facilities,
the Company shall nonetheless complete the work or the
acquisition and pay from its own moneys that portion of the costs
thereof in excess of such Net Proceeds. All such replacements,
repairs, rebuilding, restoration, relocations and such
acquisition of Substitute Facilities made pursuant to this
Section, whether or not requiring the expenditure of the
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Company's own money, shall automatically become a part of the
Facility as if the same were specifically described herein.
(e) Any balance of such Net Proceeds remaining in the
Renewal Fund after payment of all costs of replacement, repair,
rebuilding, restoration, relocation or acquisition of Substitute
Facilities shall be used to redeem the Bonds as provided in the
Bond Purchase Agreement.
(f) If the Company shall exercise its option to
terminate this Lease Agreement pursuant to Section 11.1 hereof
such Net Proceeds shall be applied to the payment of the amounts
required to be paid by Section 11.2 hereof. If any Event of
Default hereunder shall have occurred and the Bondholder shall
have exercised its remedies under Section 10.2 hereof such Net
Proceeds shall be applied to the payment of the amounts required
to be paid by Section 10.2 and Section 10.4 hereof.
(g) If the entire amount of the Bond and interest
thereon has been fully paid, or provision therefor has been made
in accordance with the Bond Purchase Agreement, all such
remaining Net Proceeds shall be paid to the Company.
(h) Except upon the occurrence of an Event of Default,
the Company shall have the right to settle and adjust all claims
under any Condemnation proceedings on behalf of the Issuer and on
its own behalf.
Section 7.3 Condemnation of Company-owned Property.
The Company shall be entitled to the proceeds of any Condemnation
award or portion thereof made for damage to or taking of any
Property which, at the time of such damage or taking, is not part
of the Facility.
Section 7.4 Recovery Against Contractor, Etc.
(a) If at any time during the Lease Term, provided no
Event of Default under Section 10.1 has occurred, proceeds shall
become available from any recovery against a contractor,
subcontractor, materialman or other Person with respect to the
Facility, such proceeds shall be deposited in the Renewal Fund
and be applied as follows:
(i) if received prior to the Completion Date, the
Net Proceeds of such recovery shall be applied in the
manner and subject to the conditions set forth in
Sections 4.03 and 4.04 of the Bond Purchase Agreement
to the Costs of the Facility as if such proceeds were
deposited in the Construction Fund and the balance
remaining in the Renewal Fund, if any, shall be applied
to redeem the Bond pursuant to the Bond Purchase
Agreement;
(ii) if received subsequent to the Completion
Date, the Net Proceeds of such recovery shall be paid
to the Company as reimbursement for the Costs of the
Facility which were
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not paid out of Bond Proceeds upon requisitions by the
Company substantially in accordance with Section 4.03
and Section 4.04 of the Bond Purchase Agreement with
such variations as are appropriate and the balance
remaining in the Renewal Fund, if any, shall be applied
to redeem the Bond pursuant to the Bond Purchase
Agreement.
(b) After the occurrence of an Event of Default under
Section 10.1 hereof, the proceeds of any such recovery against a
contractor, subcontractor, materialman, or other Person with
respect to the Facility shall be applied as provided in Section
10.2 hereof.
(c) If the entire amount of the Bond and interest
thereon have been fully paid, or provision therefor has been made
in accordance with the Bond Purchase Agreement, the surplus
thereof shall be paid to the Company for its business purposes.
(d) Except upon the occurrence of an Event of Default,
the Company shall have the right to settle and adjust all claims
against such contractors, subcontractors, materialmen or other
Persons.
Section 7.5 Waiver of Real Property Law Section 227.
The Company hereby waives the provisions of Section 227 of the
Real Property Law of the State or any law of like import now or
hereafter in effect.
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ARTICLE VIII
SPECIAL COVENANTS
Section 8.1 No Warranty of Condition or Suitability by
Issuer. THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED,
AS TO THE CONDITION, TITLE, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS OF THE FACILITY OR THAT IT IS OR WILL BE SUITABLE FOR THE
COMPANY'S PURPOSES OR NEEDS.
Section 8.2 Hold Harmless Provisions.
(a) The Company agrees that the Issuer shall not be
liable for and agrees to defend, indemnify, release and hold the
Issuer harmless from and against any and all (i) liability for
loss or damage to Property or injury to or death of any and all
Persons that may be occasioned by, directly or indirectly, any
cause whatsoever pertaining to the Facility or arising by reason
of or in connection with the occupation or the use thereof or the
presence of any Person or Property on, in or about the Facility
or the Land or (ii) liability arising from or expense incurred by
the Issuer's financing, acquisition, renovation and equipping,
owning and leasing of the Facility, including without limiting
the generality of the foregoing, all claims arising from the
breach by the Company of any of its covenants contained herein,
the exercise by the Company of the authority conferred upon it
pursuant to Section 4.1(d) of this Lease Agreement and all causes
of action and attorneys' fees and any other expenses incurred in
defending any suits or actions which may arise as a result of any
of the foregoing, provided that any such losses, damages,
liabilities or expenses of the Issuer are not incurred or do not
result from the gross negligence or intentional or willful
wrongdoing of the Issuer or any of its members, agents or
employees. The foregoing indemnities shall apply notwithstanding
the fault or negligence in part of the Issuer or any of its
members, directors, officers, agents or employees and
irrespective of the breach of a statutory obligation or the
application of any rule of comparative or apportioned liability.
The foregoing indemnities are limited only to the extent of any
prohibitions imposed by law.
(b) Notwithstanding any other provisions of this Lease
Agreement, the obligations of the Company pursuant to this
Section 8.2 shall remain in full force and effect after the
termination of this Lease Agreement until the expiration of the
period stated in the applicable statute of limitations during
which a claim, cause of action or prosecution relating to the
matters herein described may be brought and payment in full or
the satisfaction of such claim, cause of action or prosecution
relating to the matters herein described and the payment of all
expenses and charges incurred by the Issuer, or its respective
directors, officers, agents and employees, relating to the
enforcement of the provisions herein specified.
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(c) In the event of any claim against the Issuer, the
Bondholder or their respective members, directors, officers,
agents or employees by any employee or contractor of the Company
or anyone directly or indirectly employed by any of them or
anyone for whose acts any of them may be liable, the obligations
of the Company hereunder shall not be limited in any way by any
limitation on the amount or type of damages, compensation,
disability benefits or other employee benefit acts.
Section 8.3 Right to Inspect Facility. The Issuer and
the Bondholder and the duly authorized agents of either of them
shall have the right at all reasonable times to inspect the
Facility.
Section 8.4 Company to Maintain Its Existence. The
Company agrees that during the Lease Term it will maintain its
existence, will not dissolve, liquidate or otherwise dispose of
substantially all of its assets and will not consolidate with or
merge into another corporation or permit one or more corporations
to consolidate with or merge into it.
Section 8.5 Qualification in State. The Company
throughout the Lease Term shall continue to be duly authorized to
do business in the State.
Section 8.6 Agreement to File Annual Statements and
Provide Information. The Company shall file with the New York
State Department of Taxation and Finance an annual statement of
the value of all sales and use tax exemptions claimed in
connection with the Facility in compliance with Section 874(8) of
the New York State General Municipal Law. The Company shall
submit a copy of such annual statement to the Issuer at the time
of filing with the Department of Taxation and Finance. The
Company further agrees whenever requested by the Issuer to
provide and certify or cause to be provided and certified such
information concerning the Company, its finances, its operations
and its affairs necessary to enable the Issuer to make any report
required by law, governmental regulation or any of the Issuer
Documents or Company Documents.
Section 8.7 Books of Record and Account: Financial
Statements. The Company at all times agrees to maintain proper
accounts, records and books in which full and correct entries
shall be made, in accordance with generally accepted accounting
principles, of all transactions and events relating to the
business and affairs of the Company. The Company shall furnish
to the Issuer and to the Bondholder within thirty (30) days of
their filing, copies of all reports, if any, filed with the
Securities and Exchange Commission, pursuant to the Securities
Exchange Act of 1934, as amended, relative to the Company.
Section 8.8 Compliance With Orders, Ordinances, Etc.
(a) The Company, throughout the Lease Term, agrees
that it will promptly comply, and cause any sublessee or occupant
of the Facility to comply, with all statutes, codes, laws, acts,
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ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and
requirements, ordinary or extraordinary, which now or at any time
hereafter may be applicable to the Facility or any part thereof
or to the acquisition, renovation and equipping thereof, or to
any use, manner of use or condition of the Facility or any part
thereof, of all federal, state, county, municipal and other
governments, departments, commissions, boards, courts,
authorities, officials and officers and companies or associations
insuring the premises having jurisdiction of the Facility or any
part thereof, or to the acquisition, renovation and equipping
thereof, or to any use, manner of use or condition of the
Facility or any part thereof.
(b) The Company shall keep or cause the Facility to be
kept free of Hazardous Materials (as defined hereinafter) and
Hazardous Substances. Without limiting the foregoing, the
Company shall not cause or permit the Facility to be used to
generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process Hazardous Materials and
Hazardous Substances, except in compliance with all applicable
federal, state and local laws or regulations, nor shall the
Company cause or permit, as a result of any intentional or
unintentional act or omission on the part of the Company or any
contractor, subcontractor, tenant or subtenant, a release of
Hazardous Materials and Hazardous Substances onto the Facility or
onto any other property. The Company shall comply with and
ensure compliance by all contractors, subcontractors, tenants and
subtenants with all applicable federal, state and local laws,
ordinances, rules and regulations, whenever and by whomever
,triggered, and shall obtain and comply with, and ensure that all
contractors, subcontractors, tenants and subtenants obtain and
comply with, any and all approvals, registrations or permits
required thereunder. The Company shall (a) conduct and complete
all investigations, studies, sampling, and testing, and all
remedial, removal, and other actions necessary to clean up and
remove all Hazardous Materials and Hazardous Substances, on,
from, or affecting the Facility (i) in accordance with all
applicable federal, state, and local laws, ordinances, rules,
regulations, and policies, (ii) to the satisfaction of the
Bondholder and the Issuer and (iii) in accordance with the orders
and directives of all federal, state, and local governmental
authorities; and (b) defend, indemnify, and hold harmless the
Bondholder and the Issuer, their employees, agents, officers, and
directors, from and against any claims, demands, penalties,
fines, liabilities, settlements, damages, costs, or expenses of
whatever kind or nature, known or unknown, contingent or
otherwise, arising out of, or in any way related to (i) the
presence, disposal, release, or threatened release of any
Hazardous Materials and Hazardous Substances which are on, from
or affecting the soil, water, vegetation, buildings, personal
property, persons, animals, or otherwise, (ii) any bodily injury,
personal injury (including wrongful death) or property damage
(real or personal) arising out of or related to such Hazardous
Materials and Hazardous Substances, (iii) any lawsuit brought or
threatened, settlement reached, or government order relating to
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such Hazardous Materials and Hazardous Substances, and/or (iv)
any violation of laws, orders, regulations, requirements, or
demands of government authorities, or any policies or
requirements of the Bondholder and the Issuer, which are based
upon or in any way related to such Hazardous Materials and
Hazardous Substances, including, without limitation, attorney and
consultant fees, investigation and laboratory fees, court costs,
and litigation expenses. For purposes of this Section,
"Hazardous Materials" includes, without limitation, any flammable
explosives, radioactive materials, hazardous materials, hazardous
wastes, hazardous or toxic substances, or related materials
defined in the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Superfund Amendments and
Reauthorization Act of 1986 (Pub.L. No. 99-499, 100 stat. 1613
(1986), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Sections 1801, et seq.), and in the regulations
adopted and publications promulgated pursuant thereto, or any
other federal, state or local environmental law, ordinance, rule,
or regulation. The provisions of this Section shall be in
addition to any and all other obligations and liabilities the
Company may have to the Bondholder at common law, and shall
survive the transactions contemplated herein.
(c) Notwithstanding the provisions of subsections (a)
and (b) hereof, the Company may in good faith contest the
validity or the applicability of any requirement of the nature
referred to in such subsections (a) and (b) by appropriate legal
proceedings conducted in good faith and with due diligence. In
such event, the Company may fail to comply with the requirement
or requirements so contested during the period of such contest
and any appeal therefrom, unless the Issuer or the Bondholder
shall notify the Company that by failure to comply with such
requirement or requirements, the Facility or any part thereof may
be subject to loss, penalty or forfeiture, in which event the
Company shall promptly take such action with respect thereto or
provide such security as shall be satisfactory to the Bondholder
and to the Issuer. If at any time the then existing use or
occupancy of the Facility shall, pursuant to any zoning or other
law, ordinance or regulation, be permitted only so long as such
occupancy shall continue, the Company shall use its best efforts
to not cause or permit such use or occupancy to be discontinued
without the prior written consent of the Issuer and the
Bondholder.
(d) Notwithstanding the provisions of this Section
8.8, if, because of a breach or violation of the provisions of
subsections (a) or (b) hereof (without giving effect to
subsection (c) hereof), either the Issuer, the Bondholder, or any
of their respective members, directors, officers, agents, or
employees, shall be threatened with a fine, liability, expense or
imprisonment, then, upon notice from the Issuer or the
Bondholder, the Company shall immediately provide legal
protection and/or pay amounts necessary in the opinion of the
Issuer or the Bondholder, as the case may be, and their
respective members, directors, officers, agents and employees
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deem sufficient, to the extent permitted by applicable law, to
remove the threat of such fine, liability, expense or
imprisonment.
(e) Notwithstanding any provisions of this Section,
the Bondholder and the Issuer retain the right to defend
themselves in any action or actions which are based upon or in
any way related to such Hazardous Materials. In any such defense
of themselves, the Bondholder and the Issuer shall each select
their own counsel, and any and all costs of such defense,
including, without limitation, attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation
expenses, shall be paid by the Company.
Section 8.9 Discharge of Liens and Encumbrances.
(a) The Company, throughout the Lease Term, shall not
permit or create or suffer to be permitted or created any Lien,
except for Permitted Encumbrances, upon the Facility or any part
thereof by reason of any labor, services or materials rendered or
supplied or claimed to be rendered or supplied with respect to
the Facility or any part thereof.
(b) Notwithstanding the provisions of subsection (a)
hereof, the Company may in good faith contest any such Lien. In
such event, the Company may permit the items so contested to
remain undischarged and unsatisfied during the period of such
contest and any appeal therefrom, unless the Issuer or the
Bondholder shall notify the Company that by nonpayment of any
such item or items, the lien of the Mortgage may be materially
endangered or the Facility or any part thereof may be subject to
loss or forfeiture, in which event the Company shall promptly
secure payment of all such unpaid items by filing a bond, in form
and substance satisfactory to the Bondholder, thereby causing
such Lien to be removed or by taking such other actions as may be
satisfactory to the Bondholder to protect its interests.
Mechanics' Liens shall be discharged or bonded within thirty (30)
days of the filing or perfection thereof.
Section 8.10 Identification of Equipment. All
Equipment which is or may become the Property of the Issuer
pursuant to the provisions of this Lease Agreement shall be
properly identified by the Company by such appropriate records,
including computerized records. All Equipment and other Property
of whatever nature affixed or attached to the Land or used or to
be used by the Company in connection with the Land or the
Improvements shall be deemed presumptively to be owned by the
Issuer, rather than the Company, unless the same were utilized
for purposes of construction of the Facility or were installed by
the Company and title thereto was retained by the Company as
provided in Section 6.2 of this Lease Agreement and such
Equipment and other Property were properly identified by such
appropriate records.
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Section 8.11 Depreciation Deductions and Investment Tax
Credit. The parties agree that, as between them, the Company
shall be entitled to all depreciation deductions with respect to
any depreciable property comprising a part of the Facility
pursuant to Section 167 or Section 168 of the Code and to any
investment credit pursuant to Section 38 of the Code with respect
to any part of the Facility which constitutes "Section 38
Property".
Section 8.12 Employment Opportunities; Notice of Jobs.
The Company covenants and agrees that, in consideration of the
participation of the Issuer in the transactions contemplated
herein, it will, except as otherwise provided by collective
bargaining contracts or agreements to which it is a party, cause
any new employment opportunities created in connection with the
Facility to be listed with the New York State Department of
Labor, Community Services Division and with the administrative
entity of the service delivery area created pursuant to the Job
Training Partnership Act (PL 97-300) in which the Facility is
located (collectively, the "Referral Agencies"). The Company
also agrees that it will, except as otherwise provided by
collective bargaining contracts or agreements to which it is a
party, first consider for such new employment opportunities
persons eligible to participate in federal job training
partnership (PL 97-300) programs who shall be referred by the
Referral Agencies.
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ARTICLE IX
RELEASE OF CERTAIN LAND; ASSIGNMENTS
AND SUBLEASING; PLEDGE OF INTERESTS
Section 9.1 Restriction on Sale of Facility; Release of
Certain Land.
(a) Except as otherwise specifically provided in this
Article IX and in Article X hereof, the Issuer shall not sell,
convey, transfer, encumber or otherwise dispose of the Facility
or any part thereof or any of its rights under this Lease
Agreement, without the prior written consent of the Company and
the Bondholder.
(b) The Issuer and the Company from time to time may
release from the provisions of this Lease Agreement and the
leasehold estate created hereby any part of, or interest in, the
Land which is not necessary, desirable or useful for the
Facility. In such event, the Issuer, at the Company's sole cost
and expense, shall execute and deliver, and request the
Bondholder to execute and deliver, any and all instruments
necessary or appropriate to so release such part of, or interest
in, the Land and convey such title thereto or interest therein to
the Company or such other Person as the Company may designate.
As a condition to such conveyance, the Bondholder shall be
provided with a copy of the instrument transferring such title or
interest in such Land.
(c) No conveyance of any part of, or interest in the
Land effected under the provisions of this Section 9.1 shall
entitle the Company to any abatement or diminution of the rents
payable by it under this Lease Agreement.
Section 9.2 Removal of Equipment.
(a) The Issuer shall not be under any obligation to
remove, repair or replace any inadequate, obsolete, worn out,
unsuitable, undesirable or unnecessary item of Equipment. In any
instance where the Company determines that any item of Equipment
has become inadequate, obsolete, worn out, unsuitable,
undesirable or unnecessary, the Company, may remove such items
from the Facility and may sell, trade-in, exchange or otherwise
dispose of the same, as a whole or in part, provided that such
removal will not materially impair the operation of the Facility
for the purpose for which it is intended or change the nature of
the Facility so that it does not constitute a "project" under the
Act.
(b) The Issuer shall execute and deliver to the
Company all instruments necessary or appropriate to enable the
Company to sell or otherwise dispose of any such item of
Equipment. The Company shall pay any costs (including counsel
fees) incurred in transferring title to any item of Equipment
removed pursuant to this Section 9.2.
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(c) The removal of any item of Equipment pursuant to
this Section shall not entitle the Company to any abatement or
diminution of the rents payable by it under this Lease Agreement
or any abatement or diminution of the amounts payable by it under
the PILOT Agreement.
Section 9.3 Assignment and Subleasing.
(a) This Lease Agreement may not be assigned, in whole
or in part, and the Facility may not be subleased, in whole or in
part, without the prior written consent of the Issuer in each
instance which consent will not be unreasonably withheld or
delayed. The Agency hereby expressly consents to the Sublease
between the Company and the Sublessee. Any assignment or
sublease shall be on the following conditions:
(i) no assignment or sublease shall relieve the
Company from primary liability for any of its
obligations hereunder;
(ii) the assignee or sublessee shall assume the
obligations of the Company hereunder to the extent of
the interest assigned or subleased;
(iii) the Company shall, within ten (10) days
after the delivery thereof, furnish or cause to be
furnished to the Issuer a true and complete copy of
such assignment or sublease and the instrument of
assumption;
(iv) neither the validity nor the enforceability
of the Bond or any Bond Document shall be adversely
affected thereby; and
(v) the Facility shall continue to constitute a
"project" as such quoted term is defined in the Act.
(b) If the Bondholder or the Issuer shall so request,
as of the purported effective date of any assignment or sublease
pursuant to subsection (a) of this Section 9.3, the Company at
its cost shall furnish the Bondholder or the Issuer, as
appropriate, with an opinion, in form and substance satisfactory
to the Issuer, (i) of Bond Counsel as to item (v) above, and (ii)
of Independent Counsel as to items (i), (ii) and (iv) above.
Section 9.4 Mortgage of Facility; Pledge of Issuer's
Interests to Bondholder. The Issuer and the Company have
mortgaged their respective right, title and interest to the
Bondholder as security for the payment of the principal of, and
premium, if any, and interest on the Bond. The Issuer shall
pledge and assign its rights to and interest in this Lease
Agreement and in all amounts payable by the Company pursuant to
Section 5.3 hereof and all other provisions of this Lease
Agreement (other than Unassigned Rights), to the Bondholder as
security for the payment of the principal of, and premium, if
any, and interest on the Bond. The Company hereby acknowledges
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and consents to such mortgage pledge and assignment by the
Issuer. Notwithstanding the foregoing, all indemnities herein
contained shall subsequent to such pledge and assignment continue
to run to the Issuer for its benefit as well as for the benefit
of the Bondholder.
Section 9.5 Merger of Issuer.
(a) Nothing contained in this Lease Agreement shall
prevent the consolidation of the Issuer with, or merger of the
Issuer into, or transfer of title to the entire Facility to any
other public benefit corporation or political subdivision which
has the legal authority to own and lease the Facility, provided
that upon any such consolidation, merger or transfer, the due and
punctual performance and observance of all the agreements and
conditions of this Lease Agreement to be kept and performed by
the Issuer shall be expressly assumed in writing by the public
benefit corporation or political subdivision resulting from such
consolidation or surviving such merger or to which the Facility
shall be transferred.
(b) Within thirty (30) days after the consummation of
any such consolidation, merger or transfer of title, the Issuer
shall give notice thereof in reasonable detail to the Company and
the Bondholder and shall furnish to the Company and the
Bondholder a favorable opinion of Independent Counsel as to
compliance with the provisions of Section 9.5(a) hereof. The
Issuer promptly shall furnish such additional information with
respect to any such transaction as the Company or the Bondholder
may reasonably request.
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ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default Defined.
(a) The following shall be "Events of Default" under
this Lease Agreement:
(i) the failure by the Company to pay or cause to
be paid on the date due or within the applicable grace
period, the amount specified to be paid pursuant to
Section 5.3(a) hereof;
(ii) the failure by the Company to pay or cause
to be paid any sums pursuant to S 5.3(b) hereof for a
period of sixty (60) days after written notice given to
the Company by the Issuer;
(iii) the failure by the Company to observe and
perform any covenant contained in Section 9.3 hereof;
(v) the failure by the Company to comply with the
terms and conditions of the PILOT Agreement for a
period of sixty (60) days after written notice,
specifying such failure and requesting that it be
remedied, given to the Company by the Issuer;
(iv) any representation or warranty of the Company
herein or in the Bond Purchase Agreement shall prove to
have been false or misleading in any material respect;
(vi) the failure by the Company to observe and
perform any covenant, condition or agreement hereunder
on its part to be observed or performed (except
obligations referred to in 10.1(a)(i), (ii), (iii),
(iv) and (v)) for a period of thirty (30) days after
written notice, specifying such failure and requesting
that it be remedied, given to the Company by the Issuer
or the Bondholder;
(vii) the dissolution or liquidation of the
Company; or the failure by the Company to release,
stay, discharge, lift or bond within thirty (30) days
any execution, garnishment, judgment or attachment of
such consequence as may impair its ability to carry on
its operations; or the failure by the Company generally
to pay its debts as they become due; or an assignment
by the Company for the benefit of creditors; the
commencement by the Company (as the debtor) of a case
Bankruptcy or any proceeding under any other insolvency
law; or the commencement of a case in Bankruptcy or any
proceeding under any other insolvency law against the
Company (as the debtor) and a court having jurisdiction
in the premises enters a decree or order for relief
against the Company as the debtor in such case
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or proceeding, or such case or proceeding is consented
to by the Company or remains undismissed for forty (40)
days, or the Company consents to or admits the material
allegations against it in any such case or proceeding;
or a bondholder, receiver or agent (however named) is
appointed or authorized to take charge of substantially
all of the property of the Company for the purpose of
enforcing a lien against such Property or for the
purpose of general administration of such Property for
the benefit of creditors;
(viii) an Event of Default under the Bond
Purchase Agreement shall have occurred and be
continuing; or
(ix) the invalidity, illegality or
unenforceability of any material term of any of the
Bond Documents.
(b) Notwithstanding the provisions of Section 10.1(a),
if by reason of force majeure any party hereto shall be unable in
whole or in part to carry out its obligations under Sections 4.1
and 6.1 of this Lease Agreement and if such party shall give
notice and full particulars of such force majeure in writing to
the other party and to the Bondholder, within a reasonable time
after the occurrence of the event or cause relied upon, such
obligations under this Lease Agreement of the party giving such
notice (and only such obligations), so far as they are affected
by such force majeure, shall be suspended during continuance of
the inability, which shall include a reasonable time for the
removal of the effect thereof. The term "force majeure" as used
herein shall include, without limitation, acts of God, strikes,
lockouts or other industrial disturbances, acts of public enemies
acts, priorities or orders of any kind of the government of the
United States of America or of the State or any of their
departments, agencies, governmental subdivisions, or officials,
any civil or military authority, insurrections, riots, epidemics,
landslides, lightning, earthquakes, fire, hurricanes, storms,
floods, washouts, droughts, arrests, restraint of government and
people, civil disturbances, explosions, breakage or accident to
machinery, transmission pipes or canals, shortages of labor or
materials or delays of carriers, partial or entire failure of
utilities, shortage of energy or any other cause or event not
reasonably within the control of the party claiming such
inability and not due to its fault. The party claiming such
inability shall remove the cause for the same with all reasonable
promptness. It is agreed that the settlement of strikes,
lockouts and other industrial disturbances shall be entirely
within the discretion of the party having difficulty, and the
party having difficulty shall not be required to settle any
strike, lockout and other industrial disturbances by acceding to
the demands of the opposing party or parties.
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Section 10.2 Remedies on Default.
(a) Whenever any Event of Default shall have occurred,
the Issuer may on ten (10) days written notice to the Company,
terminate the Lease Term and transfer the Facility to the Company
or its designee pursuant to Sections 11.1B and 11.3 hereof:
(b) Reserved
(c) Any sums payable to the Issuer as a consequence of
any action taken pursuant to this Section 10.2 (other than those
sums attributable to Unassigned Rights) shall be paid to the and
Bondholder applied to the payment of the Bond.
(d) Reserved
Section 10.3 Remedies Cumulative. No remedy herein
conferred upon or reserved to the Issuer or the Bondholder is
intended to be exclusive of any other available remedy, but each
and every such remedy shall be cumulative and in addition to
every other remedy given under this Lease 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 and power may be exercised
from time to time and as often as may be deemed expedient. In
order to entitle the Issuer or the Bondholder, as appropriate, to
exercise any remedy reserved to it in this Article X, it shall
not be necessary to give any notice, other than such notice as
may be herein expressly required in this Lease Agreement.
Section 10.4 Agreement to Pay Attorneys' Fees and
Expenses. In the event the Company should default under any of
the provisions of this Lease Agreement and the Issuer should
employ attorneys or incur other expenses for the collection of
amounts payable hereunder or the enforcement of performance or
observance of any obligations or agreements on the part of the
Company herein contained, the Company shall, on demand therefor,
pay to the Issuer the reasonable fees of such attorneys and such
other expenses so incurred.
Section 10.5 No Additional Waiver Implied by one
Waiver. In the event any agreement contained herein should be
breached by any party and thereafter waived by any other party,
such waiver shall be limited to the particular breach so waived
and shall not be deemed to waive any other breach hereunder.
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ARTICLE XI
EARLY TERMINATION OF LEASE AGREEMENT;
OPTION IN FAVOR OF COMPANY
Section 11.1A Voluntary Termination of Lease Agreement.
The Company shall have the option to terminate this Lease
Agreement at any time that the Bond is subject to prepayment in
whole under the Bond Purchase Agreement and upon filing with the
Issuer and the Bondholder a certificate signed by an Authorized
Representative of the Company stating the Company's intention to
do so pursuant to this Section and the date upon which such
payment shall be made (which date shall not be less than 20 nor
more than 90 days from the date such certificate is filed) and
upon compliance with the requirements set forth in Section 11.2A
hereof.
Section 11.1B Mandatory Termination of Lease Agreement.
In the event that an Event of Default has occurred hereunder, the
Issuer may terminate the Lease Agreement and the Facility shall
be conveyed to the Company pursuant to Section 11.3 hereof.
Section 11.2A Conditions to Voluntary Termination of
Lease Agreement. In the event the Company exercises its option
to terminate this Lease Agreement in accordance with the
provisions of Section 11.1A hereof, the Company shall make the
following payments, as applicable:
(a) To the Bondholder for the account of the Issuer:
an amount certified by the Bondholder which, when added to the
total amount on deposit with the Bondholder for the account of
the Issuer and the Company and available for such purpose, will
be sufficient to pay the principal of, premium, if any, interest
and any other sums on the Bond.
(b) To the Issuer: an amount certified by the Issuer
sufficient to pay all unpaid fees and expenses of the Issuer
incurred under the Bond Documents.
(c) To the appropriate Person: an amount sufficient to
pay all other fees, expenses or charges, if any, due and payable
or to become due and payable under the Bond Documents.
Section 11.2B Conditions to Mandatory Termination of
Lease Agreement. In the event that the Issuer terminates the
Lease Agreement in accordance with the provisions of Section
11.1B, the Company shall make a payment to the Issuer of an
amount certified as of the termination date by the Issuer
sufficient to pay all unpaid fees and expenses of the Issuer
incurred under the Bond Documents to the date of termination. if
the Bonds remain outstanding subsequent to any such termination,
notwithstanding the termination of the Lease Agreement, the
Company agrees that it shall be contractually obligated to pay to
the Issuer, within ten (10) days of the receipt of demand
therefor, any reasonable expenses incurred by the Issuer incurred
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in connection with the carrying out of the Issuer's duties and
obligations (it being expressly understood that any such expenses
shall not include any amounts due pursuant to the terms and
conditions of the Bonds) under the Issuer Documents subsequent to
said termination date. In the event that the Company should fail
to make any required payment under this Section and the Issuer
employs attorneys or incurs expenses for the collection of
amounts payable hereunder, the Company shall, in addition, on
demand pay to the Issuer the reasonable fees of such attorneys
and such other reasonable and customary expenses so incurred.
This Section shall survive the termination of the Lease Agreement
and the Company (including each general partner thereof) shall be
fully liable for any and all payments which may become due
hereunder.
Section 11.3 Obligation to Purchase Facility. Upon
termination or expiration of the Lease Term, in accordance with
Sections 5.2 or 11.1A or 11.1B hereof, the Issuer will sell and
the Company or its designee shall purchase the Facility from the
Issuer for the purchase price of One Dollar ($1.00) plus all
unpaid payments in lieu of taxes pursuant to the PILOT Agreement
through the date upon which this Lease Agreement terminates or
expires. The Company shall purchase the Facility by giving
written notice to the Issuer and to the Bondholder (which may be
contained in the certificate referred to in Section 11.1A hereof)
(i) declaring the Company's election to purchase and (ii) fixing
the date of closing such purchase, which shall be the date on
which this Lease Agreement is to be terminated.
Section 11.4 Conveyance on Purchase. At the closing of
any purchase of the Facility pursuant to Section 11.3 hereof, the
Issuer shall, upon receipt of the purchase price of One Dollar
($1.00), deliver and request the Bondholder to deliver to the
Company all necessary documents (i) to convey to the Company
title to the Property being purchased, as such Property exists,
subject only to the following: (A) any Liens to which title to
such Property was subject when conveyed to the Issuer, (B) any
Liens created at the request of the Company, to the creation of
which the Company consented or in the creation of which the
Company acquiesced, (C) any Permitted Encumbrances and (D) any
Liens resulting from the failure of the Company to perform or
observe any of the agreements on its part contained in this Lease
Agreement or arising out of an Event of Default hereunder, (ii)
to release and convey to the Company all of the Issuer's rights
and interest in and to any rights of action or any Net Proceeds
of insurance or Condemnation awards with respect to the Facility
(but not including any Unassigned Rights).
(b) At the closing of any purchase of the Facility
pursuant to Sections 11.1B and 11.3 hereof, the Issuer shall
deliver to the Company all necessary documents (and the Company
shall accept the same, and in the event that the Company refuses
to accept the same, the recording of a quitclaim deed subject to
all then existing Liens (including all Permitted Encumbrances) in
the Suffolk County Clerk's Office conveying title from the Issuer
to the Company shall be deemed delivery of title to the Company
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and the Company hereby expressly waives any and all objections
which it may have, now or in the future, to such procedure) (i)
to convey title to Facility as it then exists, (ii) terminating
the Lease Agreement, and (iii) releasing all of the Issuer's
rights or interest in and to any Net Proceeds of insurance or
Condemnation awards with respect to the Facility (but not
including any Unassigned Rights). In the event that the Company
fails to make the payment to Issuer described in Section
11.2(A)(b) hereof, the Company shall remain fully and personally
liable to the Issuer therefore.
(c) Notwithstanding the conveyance of the Facility by
the Issuer to the Company, the Company shall remain fully and
personally liable to the Issuer with respect to any indemnities
of the Company in favor of the Issuer contained herein.
Section 11.5 Amounts Remaining on Deposit with the
Bondholder upon Payment of Bond. After payment in full of the
principal of, premium, if any, and interest on the Bond and the
payment of all fees, charges, expenses and other amounts required
to be paid under the Bond Documents, all amounts on deposit with
the Bondholder for the account of the Issuer and the Company
under the Bond Documents (except for amounts attributable to
Unassigned Rights) shall belong to and be paid to the Company by
the Bondholder as an overpayment of rent, and neither the
Bondholder nor the Owners of the Bond shall have any rights
hereunder, except those that shall have theretofore vested.
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ARTICLE XII
MISCELLANEOUS
Section 12.1 Notices. All notices, certificates and
other communications hereunder shall be in writing and shall be
either delivered personally or sent by certified mail, postage
prepaid, return receipt requested, or sent by overnight courier
service addressed as follows or to such other address as any
party may specify in writing to the other:
To the Issuer:
Suffolk County Industrial Development Agency
000 Xxxxx Xxxxx
P.O. Box 610
Hauppauge, New York 11788-0099
Attention: Administrative Director
To the Company:
OLS Holdings, Inc.
000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
A duplicate copy of each notice, certificate and other
written communication given hereunder by either the Issuer or the
Company to the other shall also be given to the Bondholder and a
duplicate copy of each notice, certificate and any other written
communication given hereunder by either the Bondholder or the
Issuer to the other shall also be given to the Company at the
addresses herein set forth or provided for. Such notice shall be
deemed to have been given upon receipt or upon refusal of the
party being notified to accept delivery of such notice.
Section 12.2 Binding Effect. This Lease Agreement
shall inure to the benefit of and shall be binding upon the
parties and their respective successors and assigns.
Section 12.3 Severability. In the event any
provision of this Lease Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other
provision hereof.
Section 12.4 Amendments, Changes and Modifications.
This Lease Agreement may not be amended, changed, modified,
altered or terminated except in a writing executed by the parties
hereto and without the concurring written consent of the
Bondholder.
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Section 12.5 Execution of Counterparts. This Lease
Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one
and the same instrument. Only possession of the counterpart
marked "Secured Party's Original" shall be effective to perfect
the rights of any holder of the Lease as counterparts shall be
marked "Duplicate" and no security interest therein can be
created except by possession of the "Secured Party's Original"
counterpart.
Section 12.6 Applicable Law. This Lease Agreement
shall be governed exclusively by the applicable laws of the State
without regard or reference to its conflict of laws principles.
Section 12.7 List of Additional Equipment; Further
Assurances.
(a) Upon the Completion Date with respect to the
Facility and the installation of all of the Equipment therein,
the Company shall prepare and deliver to the Issuer and the
Bondholder a schedule listing all of the Equipment not previously
described in this Lease Agreement. If requested by the Issuer or
the Bondholder, the Company shall thereafter furnish to the
Issuer and the Bondholder, within sixty (60) days after the end
of each calendar year, a schedule listing all of the Equipment
not theretofore previously described herein or in the aforesaid
schedule.
(b) The Issuer and the Company shall execute and
deliver all instruments and shall furnish all information
necessary or appropriate to perfect or protect any security
interest created or contemplated by this Lease Agreement and Bond
Purchase Agreement.
Section 12.8 Survival of Obligations. This Lease
Agreement shall survive the purchase and sale of the Bond and the
performance of the obligations of the Company to make payments
required by Section 5.3 and all indemnities shall survive the
foregoing and any termination or expiration of this Lease
Agreement and the payment of the Bond.
Section 12.9 Table of Contents and Section Headings not
Controlling. The Table of Contents and the headings of the
several Sections in this Lease Agreement have been prepared for
convenience of reference only and shall not control or affect the
meaning of or be taken as an interpretation of any provision of
this Lease Agreement.
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IN WITNESS WHEREOF, the Issuer and the Company have
caused this Lease Agreement to be executed in their respective
names by their duly authorized officers, all as of April 1, 1995.
SUFFOLK COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
By
---------------------------------
Xxxxx X. Xxxxxxxx
Its Administrative Director
OLS HOLDINGS, INC.
By
---------------------------------
Xxxxxx X. Xxxxxxx
Its Executive Vice President
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IN WITNESS WHEREOF, the Issuer and the Company have
caused this Lease Agreement to be executed in their respective
names by their duly authorized officers, all as of April 1, 1995.
SUFFOLK COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
By
---------------------------------
Xxxxx X. Xxxxxxxx
Its Administrative Director
OLS HOLDINGS, INC.
By
---------------------------------
Xxxxxx X. Xxxxxxxxx, Xx.
Its Vice President
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STATE OF NEW YORK)
SS.:
COUNTY OF SUFFOLK)
On this 12 day of April, 1995, before me personally
came Xxxxx X. Xxxxxxxx, to me known, who, being by me duly sworn,
did depose and say that he resides in Jamesport, New York; that
he is the Administrative Director of the SUFFOLK COUNTY
INDUSTRIAL DEVELOPMENT AGENCY, the public benefit corporation of
the State of New York described in and which executed the within
Lease Agreement; and that he signed his name thereto by order of
the members of said public benefit corporation.
XXXXXXX X. XXXXXXXX
NOTARY PUBLIC, State of New York
No. 4853562
Qualified In Suffolk County
Commission Expires Feb. 17, 199 C
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STATE OF NEW YORK)
SS. :
COUNTY OF NASSAU )
On this 13th day of April, 1995, before me personally
came Xxxxxx X. Xxxxxxxxx, Xx., to me known, who, being by me duly
sworn, did depose and say that he resides at Garden City, New
York; that he is the Vice President of OLS HOLDINGS, INC., the
business corporation described in and which executed the within
Lease Agreement; and that he signed his name thereto by order of
the Board of Directors of said corporation.
------------------------------
Notary Public
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EXHIBIT A
---------
LEGAL DESCRIPTION OF REAL PROPERTY
All that certain plot, piece or parcel of land, with the
buildings and improvements thereon erected, situate, lying and
being in Melville, in the Town of Huntington, County of Suffolk
and State of New York, being more particularly bounded and
described as follows:
BEGINNING on the new southwesterly side of Pinelawn Road
(Wellwood Ave.) (Co. Rd. No. 3) where same is intersected by the
southeasterly end of a straight line which connects the
southeasterly side of Broadhollow Road (New York State Highway
Route 110, Huntington-Amityville Road, State Highway 794) Said
line bearing South 85 degrees 27 minutes 35 seconds West a
distance of 25.52 feet;
RUNNING THENCE easterly along the Southwesterly side of Pinelawn
Road the following 5 courses and distances:
1) South 28 degrees 42 minutes 35 seconds East 374.84 feet;
2) Along an arc of a curve bearing to the right having a radius
of 31,068.20 feet a distance of 237.96 feet;
3) North 61 degrees 56 minutes 05 seconds East 12.00 feet;
4) Along an arc of a curve having a radius of 31,080.20 feet a
distance of 111.49 feet;
5) South 28 degrees 03 minutes 55 seconds East 220.87 feet;
THENCE South 61 degrees 56 minutes 05 seconds West 391.15 feet;
THENCE North 28 degrees 46 minutes 00 seconds West 205.20 feet;
THENCE North 29 degrees 02 minutes 00 seconds West 486.47 feet to
the Southeasterly side of Broadhollow Road;
THENCE Northerly along the Southeasterly side of Broadhollow Road
the following 2 courses and distances:
1) North 26 degrees 42 minutes 47 seconds East 256.82 feet;
2) Along an arc of a curve having a radius of 2,356.83 feet a
distance of 189.82 feet to the extreme Southwesterly end of
the first above mentioned line which connects the
Southeasterly side of Broadhollow Road with the
Southwesterly side of Pinelawn Road;
THENCE North 85 degrees 27 minutes 35 seconds East 25.52 feet to
the Southwesterly side of Pinelawn Road to the point or place of
BEGINNING.
53
EXHIBIT B
---------
EQUIPMENT
All equipment, fixtures, machinery, building materials and
items of personal property acquired, constructed and installed
and/or to be acquired, constructed and installed in connection
with the completion of OLS Holdings, Inc./The Olsten Corporation
Facility located in Suffolk County, New York, excluding therefrom
certain equipment, fixtures, machinery and personal property
currently the subject of financing statements as follows:
1. Secured Party - Vicom Computer Services, Inc., 000 Xxxxxxx
Xxxxxx, Xxxxxx Xxxx, XX 00000;
Debtor - The Olsten Corporation 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, XX 00000;
Secured Equipment - (1) 3422-A01 Tape Drive; (1) 3840-A22
Tape Drive W/F1511, 1512, 1513; (4) 3480-B22 Tape Drive
W/F2511;
Date/Filing - September 22, 1994 in the Suffolk County
Clerk's Office;
2. Secured Party - American Classic Spec Corp., 0000X Xxxxx
Xxxxxxxxxx Xxxxx, Xxxxxxxx, XX 00000;
Debtor - Olsten Corp., 000 Xxxxx Xxxxxx Xxxx, Xxxxxxxx, XX
00000; and Xxxxxxx Foods, 000 Xxxxxxxx Xxxx Xx., Xxxxxxxx,
XX 00000;
Secured Equipment - Freezer on loan as per agreement on
contract on file with secured party; 1 CAR Table Top SER#
8313166;
Date/Filing - November 1, 1994 in the Suffolk County Clerk's
Office;
3. Secured Party - Vicom Computer Services, Inc., 000 Xxxxxxx
Xxxxxx, Xxxxxx Xxxx, XX 00000;
Debtor - The Olsten Corporation 000 Xxxxx Xxxxxx Xxxx,
Xxxxxxxx, XX 00000;
Secured Equipment - (1) 'LIC' SYS UNIT; (1) DATA LOSS
PROTECTION; (1) 12.0 RPR PROCESSOR 64 MB; (2) EIA 232/V.24
TWO-LINE ADPT; (1) 16/4 MBPS TOKEN-RING/HP; (1) SIX LINE
COMM CONTROLLER; (1) 32MB MAIN STORAGE; (17) ADDTL DISK UNIT
(1.96GB); (1) 16 DISK UNIT STORAGE EXPANSION; (1) SYSTEM
UNIT EXPTWR (OPTICAL); (1) BULK 400W POWER SUPPLY; (1)
TWINAX WKST CTRL - ENHANCED; (1) 2.5GB 1/4-INCH CART TAPE;
(1) DSK UNIT CNTRLRFOR RAID; (1) OPT DISK UNIT (1.96GB); (1)
MODEM; (1) TAPE ATTACHMENT; (1) OPERATING SYSTEM/400 V3; (1)
CLNT ACC/400 FAMILY V3; (1) APP DEV TOOLSET/400 V3; (1) ILE
RPG/400 V3; and (1) SQL;
Date Filing - February 10, 1995 in the Suffolk County
Clerk's Office; February 13, 1995 in New York State.
