EXHIBIT 10.10
Xxxxx Xxxxxxx LLP
Draft No. 1
Dated: 01/28/04
Transcript Document No. 2
TOWN OF ISLIP ENDUSTRIAL DEVELOPMENT AGENCY
(Town of Islip, New York)
and
HPG REALTY CO., LLC
---------------------------
LEASE AGREEMENT
----------------------------
Dated as of February 1, 2004
Town of Islip Industrial Development Agency
(HPG Realty Co., LLC/Tri-Start Electronics, Inc. 2004 Facility)
TABLE OF CONTENTS
Page No.
ARTICLE I DEFINITIONS.......................................................................3
ARTICLE II REPRESENTATIONS AND COVENANTS....................................................3
Section 2.1 Representations and Covenants....................................3
Section 2.2 Representations and Covenants of Company.........................4
ARTICLE III FACILITY SITE AND TITLE INSURANCE...............................................5
Section 3.1 Agreement to Convey to Agency....................................5
Section 3.2 Title Insurance..................................................5
Section 3.3 Subordination of Lease Agreement.................................5
ARTICLE IV ACQUISITION, CONSTRUCTION AND EQUIPPING OF FACILITY..5
Section 4.1 Acquisition, Construction and Equipping of Facility...............5
Section 4.2 Making of the Loan; Disbursements of Loan Proceeds................6
Section 4.3 Certificates of Completion........................................6
Section 4.4 Completion by Company.............................................6
Section 4.5 Remedies to be Pursued Against Contractors, Subcontractors,
Materialmen and their Sureties....................................7
ARTICLE V DEMISING CLAUSES AND RENTAL PROVISIONS............................................7
Section 5.1 Demise of Facility...............................................7
Section 5.2 Duration of Lease Term; Quiet Enjoyment..........................7
Section 5.3 Rents and Other Amounts Payable..................................8
Section 5.4 Obligations of Company Hereunder Unconditional...................8
Section 5.5 Payment of Additional Moneys in Prepayment of Loan...............8
Section 5.6 Rights and Obligations of the Company upon Prepayment of Loan....9
ARTICLE VI MAINTENANCE, MODIFICATIONS, TAXES AND INSURANCE..................................9
Section 6.1 Maintenance and Modifications of Facility by Company.............9
Section 6.2 Installation of Additional Equipment.............................9
Section 6.3 Taxes, Assessments and Utility Charges..........................10
Section 6.4 Insurance Required..............................................10
Section 6.5 Additional Provisions Respecting Insurance......................12
Section 6.6 Application of Net Proceeds of Insurance........................13
Section 6.7 Right of Mortgagee to Pay Taxes, Insurance Premiums and Other
Charges.........................................................13
ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION...........................................14
Section 7.1 Damage or Destruction of the Facility...........................14
Section 7.2 Condemnation....................................................15
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Section 7.3 Condemnation of Company Owned Property..........................16
Section 7.4 Waiver of Real Property Law Section 227.........................16
ARTICLE VIII SPECIAL COVENANTS.............................................................17
Section 8.1 No Warranty of Condition or Suitability by Agency...............17
Section 8.2 Hold Harmless Provisions........................................17
Section 8.3 Right to Inspect Facility.......................................18
Section 8.4 Company to Maintain Its Existence...............................18
Section 8.5 Qualification in State..........................................18
Section 8.6 Agreement to File Annual Statements and Provide Information.....18
Section 8.7 Books of Record and Account; Financial Statements...............18
Section 8.8 Compliance With Orders, Ordinances, Etc.........................18
Section 8.9 Discharge of Liens and Encumbrances.............................20
Section 8.10 Indemnification of Equipment....................................20
Section 8.11 Depreciation Deductions and Investment Tax Credit...............21
Section 8.12 Employment Opportunities, Notice of Jobs........................21
ARTICLE IX RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING;
MORTGAGE AND PLEDGE OF INTERESTS...........................................................21
Section 9.1 Restriction on Sale of Facility; Release of Certain Land........21
Section 9.2 Removal of Equipment............................................22
Section 9.3 Assignment, Subleasing and Encumbering..........................22
Section 9.4 Mortgage and Pledge of Agency's Interests to Mortgagee..........23
Section 9.5 Pledge of Company's Interest to Mortgagee.......................23
Section 9.6 Merger of Agency................................................23
ARTICLE X EVENTS OF DEFAULT AND REMEDIES...................................................24
Section 10.1 Events of Default Defined.......................................24
Section 10.2 Remedies on Default.............................................25
Section 10.3 Remedies Cumulative.............................................27
Section 10.4 Agreement to Pay Attorney's Fees and Expenses...................27
Section 10.5 No Additional Waiver Implied by One Waiver......................28
ARTICLE XI EARLY TERMINATION OF LEASE AGREEMENT, OPTION IN FAVOR
OF COMPANY.................................................................................28
Section 11.1 Early Termination of Lease Agreement............................28
Section 11.2 Conditions to Early Termination of Lease Agreement..............28
Section 11.3 Obligation to Purchase Facility.................................29
Section 11.4 Conveyance on Purchase..........................................29
ARTICLE XII MISCELLANEOUS..................................................................29
Section 12.1 Notices.........................................................29
Section 12.2 Binding Effect..................................................30
Section 12.3 Severability....................................................30
Section 12.4 Amendments, Changes and Modifications...........................30
Section 12.5 Execution of Counterparts.......................................30
Section 12.6 Applicable Law..................................................30
Section 12.7 List of Additional Equipment; Further Assurances................30
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Section 12.8 Survival of Obligations.........................................30
Section 12.9 Table of Contents and Section Headings Not Controlling..........30
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THIS LEASE AGREEMENT, dated as of February 1, 2004 (the "Lease Agreement"),
is between the TOWN OF ISLIP INDUSTRIAL DEVELOPMENT AGENCY, a public benefit
corporation of the State of New York, having its office at 00 Xxxxxx Xxxxxx,
Xxxxx, Xxx Xxxx 1 1751 (the "Agency"), and HPG REALTY CO., LLC, a limited
liability company duly organized and validly existing under the laws of the
State of New York, having its principal office at 000 Xxxxxxxxx Xxxxxxxxx,
Xxxxxxxxxx, Xxx Xxxx 00000 (the "Company").
R E C I TA L S
WHEREAS, Title 1 of Article 18-A of the General Municipal Law of the State
of New York was duty enacted into law as Chapter 1030 of the Laws of 1969 of the
State of New York; and
WHEREAS, the aforesaid act authorizes the creation of industrial
development agencies for the public purposes of the State; and
WHEREAS, the aforesaid act further authorizes the creation of industrial
development agencies for the benefit of the several Counties, cities, villages
and towns in the State and empowers such agencies, among other things, to
acquire, reconstruct, renovate, refurbish, equip, lease, sell and dispose of
land and any building or other improvement, and all real and personal property,
including but not limited to, machinery and equipment deemed necessary in
connection therewith, whether now in existence or under construction, which
shall be suitable for manufacturing, civic, warehousing, research, commercial,
recreation or industrial facilities, in order to advance job opportunities,
health, general prosperity and the economic welfare of the people of the Suite
and to improve their standard of living; and
WHEREAS, pursuant to and in accordance with the provisions of the aforesaid
act and Chapter 47 of the Laws of 1974 of the State (collectively, the "Act"),
the Agency was created and is empowered under the Act to undertake the
providing, financing and leasing 0 the Facility defined below; and
WHEREAS, the Facility shall consist of the acquisition of an approximately
one (1,0) acre parcel of land located at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx, Xxxx of
Islip, Suffolk County, New York, and the construction and equipping of an
approximately 13,300 square foot building containing office and warehouse space
located thereon, to be leased by the Agency to the Company and subleased by the
Company to and used by Tri-Start Electronics, Inc., a corporation duly organized
and validly existing under the laws of the State of New York, having its
principal office at 000 Xxxxxxxxx Xxxxxxxxx, Xxxxxxxxxx, Xxx Xxxx 00000 (the
"Sublessee"), for distribution of electronic parts (the "Facility"), including
the following as they relate to the construction, erection and completion of
such Facility, whether or not any materials or supplies described below are
incorporated into or become an integral part of such Facility (i) all purchases,
leases, rentals and other uses of tools, machinery and equipment in connection
with the acquisition, construction and equipping of the Facility, (ii) all
purchases, rentals, uses or consumption of supplies, materials and services or
every kind and description used in connection with acquisition, construction and
equipping of the Facility, and (iii) all equipment, machinery and other tangible
personal property (including installation costs with respect thereto), installed
or placed in, upon or under such Facility; and
WHEREAS, the Agency proposes to acquire and lease the Facility and American
Community Bank (the "First Mortgagee") proposes to finance a portion of the
costs thereof by lending $650,000.00 to the Company; and
WHEREAS, in order to evidence its obligation to repay the loan made by the
First Mortgagee to it, the Company will issue to the First Mortgagee a
promissory note (the "First Mortgage Note") in the principal amount of the
loan.; and
WHEREAS, in order to secure its obligations to the First Mortgagee under
the First Mortgage Note, the Company and the Agency will grant a mortgage on the
Facility to the First Mortgagee, subject to permitted encumbrances thereon,
pursuant to a certain Mortgage and Security Agreement, dated February 4, 2004
(the "First Mortgage"), from the Company and the Agency to the First Mortgagee;
and
WHEREAS, in order to finance a portion of the costs of the Facility, Long
Island Development Corporation (the "Second Mortgagee"; together with the First
Mortgagee, the "Mortgagee") has agreed to lend $520,000.00 to the Company after
the Closing Date; and
WHEREAS, in order to evidence its obligation to repay the loan made by the
Second Mortgagee to it, the Company will, after the Closing Date, issue to the
Second Mortgagee a promissory note (the "Second Mortgage Note") in the principal
amount of the loan (the "Second Mortgage Loan"); and
WHEREAS, in order to secure its obligations to the Second Mortgagee under
the Second Mortgage Note, the Company and the Agency will, after the Closing
Date, grant a mortgage on the Facility to the Second Mortgagee, subject to
permitted encumbrances thereon, pursuant to a mortgage (the "Second Mortgage";
together with the Second Mortgage Note, the "Second Mortgage Documents"), from
the Company and the Agency to the Second Mortgagee; and
WHEREAS, in order to provide bridge financing for the anticipated proceeds
of the Second Mortgage Loan, the First Mortgagee has agreed to advance $520,000
to the Company (the "Bridge Loan"), said advance to be evidenced by a promissory
note (the "Bridge Loan Mortgage Note") and secured by a Bridge Loan Mortgage and
Security Agreement, dated February 4, 2004 (the "Bridge Loan Mortgage"; together
with the First Mortgage and the Second Mortgage, the "Mortgage"), from the
Agency and the Company to the First Mortgagee, which Bridge Loan Mortgage will
be subordinate to the First Mortgage; and
WHEREAS, it is anticipated that, after the Closing Date, (x) the Second
Mortgage Documents will be executed by the parties thereto, (y) the Second
Mortgage Loan will be made for the benefit of the Company, and (z) the Company
will pay to the First Mortgagee from the proceeds of the Second Mortgage Loan
all amounts owing under the Bridge Loan Mortgage will be satisfied in full; and
WHEREAS, the Company has agreed with the Agency, on behalf of the Agency
and as the Agency's agent, to acquire, construct and equip the Facility in
accordance with the Plans and Specifications; and
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WHEREAS, the Agency proposes to lease the Facility to the Company, and the
Company desires to rent the Facility from the Agency, upon the terms and
conditions set forth in this Lease Agreement; and
The Company proposes to sublease the Facility to 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 as of February ___, 2004
(the "Sublease Agreement"), between the Company and the Sublessee.
AGREEMENT
For and in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto do hereby mutually agree us follows:
ARTICLE I
DEFINITIIONS
All capitalized terms used in this Lease Agreement and not otherwise
defined herein shall have the meanings assigned thereto in the Schedule of
Definitions attached hereto as Schedule A.
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations and Covenants of Agency. The Agency makes the
following representations and covenants as the basis for the undertakings on its
part herein contained:
(a) The Agency is duly established and validly existing wider the
provisions of the Act and has full legal right, power and authority to execute,
deliver and perform each of the Agency Documents and the other documents
contemplated thereby. Each of the Agency Documents and the other documents
contemplated thereby has been duly authorized, executed and delivered by the
Agency.
(b) The Agency 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) By resolution adopted on May 6. 2003, the Agency determined that, based
upon the review by the Agency 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.
(d) Neither the execution and delivery of any of the Agency Documents and
the other documents contemplated thereby or the consummation of the transactions
contemplated thereby nor the fulfillment a. or compliance with the provisions of
any of the Agency 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 Agency's Certificate of
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Establishment or By-Laws, as amended, or of any corporate restriction or any
agreement or instrument to which the Agency 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 Agency under the terms of the Act or any such law,
ordinance, Certificate of Establishment, By-Laws, restriction, agreement or
instrument, except for Permitted Encumbrances.
(e) Each of the Agency Documents and the other documents contemplated
thereby constitutes a legal, valid and binding obligation of the Agency
enforceable against the Agency in accordance with its terms.
(f) The Agency has been induced to enter into this Lease Agreement by the
undertaking of the Company to utilize the Facility in the Town of Islip, New
York.
Section 2.2 Representation 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 limited liability company 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 Articles of Organization or
Operating Agreement, as amended, or any 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, Articles of Organization
or Operating Agreement, as amended, restriction, agreement or instrument, except
for Permitted Incumbranees, The Facility and the design, acquisition.
construction, equipping 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.
The Company shall defend, indemnify and hold harmless the Agency and the
Mortgagee for expenses, including reasonable attorneys' fees, resulting from any
failure by the Company to comply with the provisions of this subsection.
(c) Except us otherwise provided in the Mortgage, the Company shall perform
or cause to be performed, for and on behalf of the Agency, each and every
obligation of the Agency under and pursuant to the Mortgage.
(d) Each of the Company Documents and the other documents contemplated
thereby constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
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(e) The Company will complete the acquisition, construction and equipping
of the Facility in accordance with the terms and provisions of the Plans and
Specifications.
(f) The Facility is and will continue to be a "project" as such quoted term
is defined in the Act. The Company will not take any action, or fail to take any
action, which would cause the Facility to not constitute a "project" as such
quoted term is defined in the Act.
ARTICLE III
FACILITY SITE AND TITLE INSURANCE
Section 3.1 Agreement to Convey to Agency. The Company has conveyed or has
caused to be conveyed to the Agency (i) good and marketable title to the Land,
including any buildings, structures or other improvements thereon, and (ii)
lien-free title to the Equipment, in each case except for Permitted
Encumbrances, and xxxx convey or cause to be conveyed to the Agency lien-free
title to the Equipment and Improvements acquired after the date hereof.
Section 3.2 Title Insurance. The Company has obtained or will obtain (i) a
fee title insurance policy for the benefit of the Agency insuring title to the
Land and the improvements, and (ii) a mortgage title policy for the benefit of
the Mortgagee insuring the Lien of the Mortgage on the Land and the
improvements; in each case in an amount equal to the fair market value of the
Land and the Improvements; and in each case 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 to any and all modifications, amendments,
consolidations, extensions, renewals, replacements and increases thereof.
ARTICLE IV
ACQUISITION, CONSTRUCTION AND EQUIPPING OF FACILITY; MAKING OF THE
LOAN
Section 4.1 Acquisition, Construction and Equipment of Facility.
(a) The Company agrees that, on behalf of the Agency, it will acquire,
construct and equip the Facility in accordance with the Plans and
Specifications.
(b) The Company may revise the Plans and Specifications from time to time
with the written approval of the Mortgagee, which approval may not be
unreasonably withheld but which may be subject to such conditions as the
Mortgagee 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 Agency
immediately upon the Company's obtaining its interest in or to the materials,
equipment, machinery and other items of Property. The Company shall execute,
deliver and record or file all instruments necessary or appropriate to so vest
title to the Agency and shall take all action necessary or appropriate to
protect such title against claims of any third Persons.
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(d) The Agency hereby appoints the Company its true and lawful agent, and
the Company hereby accepts such agency (i) to acquire, construct 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 constructing the improvements and acquiring and
installing the Equipment with the same powers and with the same validity as the
Agency could do if acting on its own behalf, (iii) to pay all fees, costs and
expenses incurred in the construction 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, xxx for, xxxx,
recover and receive all such sums or money, debts, dues and other demands
whatsoever which may be due, owing and payable to the Agency under the terms of
any contract, order, receipt, or writing in connection with construction 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 Agency 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.
(f) The Company. as agent for the Agency, shall comply with all provisions
of the Labor Law of the State applicable to the acquisition, construction 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.
Except as provided in the preceding sentence, the provisions of this subsection
do not create any obligations or duties not created by applicable Law outside of
the terms of this Lease Agreement.
Section 4.2 Making of the Loan. Disbursements of Loan Proceeds. The
Mortgagee has proposed to make the Loan to the Company. Loan Proceeds shall be
disbursed to the Company in accordance with the Loan Agreement.
Section 4.3 Certificates of Completion. To establish the Completion Date,
the Company shall deliver to the Agency and the Mortgagee (1) a certificate
signed by an Authorized Representative of the Company (a) stating that
acquisition, construction and equipping of the Facility has been completed in
accordance with the Plans and Specifications therefor; and (b) stating that the
payment of all labor, services, materials and supplies used in such acquisition
has been made or provided for; and (ii) such certificates as may be satisfactory
to the Mortgagee, including without limitation, a final certificate of
occupancy, if applicable. The Company agrees to complete the acquisition,
construction and equipping of the Facility on or before February 28, 2005.
Section 4.4 Completion by company.
(a) in the event that the Net Proceeds of the Loan are not sufficient to
pay in full all costs of acquiring, constructing and equipping the Facility in
accordance with the Plans and Specifications, the Company agrees to pay, for the
benefit of the Agency and the Mortgagee, all such sums as may be in excess of
the Net Proceeds of the Loan. 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 Agency. The Company shall execute,
deliver and record or file such instruments as the Agency or the Mortgagee may
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request in order to perfect or protect the Agency's title to or the 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 Agency or the Mortgagee nor shall it be entitled to any
diminution or abatement of any other amounts payable by the Company under this
Lease Agreement.
Section 4.5 Remedies to be Pursued Against Contractors, Subcontractors,
Materialism 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 at its expense, either separately or in conjunction with others, may
pursue any and all remedies available to it and the Agency, 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, in its
own name or in the name of the Agency, 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 deems
reasonably necessary, and in such event the Agency, at the Company's expense,
hereby agrees to cooperate fully with the Company and to take all action
necessary to effect the substitution of the Company for the Agency in any such
action or proceeding.
ARTICLE V
DEM1SING CLAUSES AND RENTAL PROVISIONS
Section 5.1 Demise of Facility. The Agency 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 Agency upon the terms and conditions of this Lease Agreement.
Section 5.2 Duration of Lease Term; Quiet Enjoyment.
(a) The Agency shall deliver to the Company sole and exclusive possession
of the Facility (subject to Sections 3.3, 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 February 28, 2015, 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 Loan shall have been paid in full or provision for such
full payment shall have been made.
(c) Except as provided in Sections 3.3, 8.3 and 10.2 hereof, the Agency
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
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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 as follows: One
Dollar ($1.00) per year commencing on the Closing Date and on each February 1
thereafter during the term of this Lease Agreement.
(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 Agency as additional
rent, within ten (10) days of receipt of demand therefor, the expenses of the
Agency and the members thereof incurred (1) by reason of the Agency's ownership
or leasing of the Facility or (ii) in connection with the carrying out of the
Agency's duties and obligations under the Agency 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 initial administrative fee or fee for services rendered by the
Agency,
(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 xxxxx the
Company shall fail to timely make any payment required in Section 5.3(a) or
5.3(b), the Company shall pay the same together with interest on such payment at
a rate equal to two percent (2%) plus the Prime Rate, 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 Agency. The Company
agrees it will not (1) 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 Loan has been paid in full.
Subject to the foregoing provisions, nothing contained in this Section
shall be construed to release the Agency 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 Agency should fail to
perform any such agreement, the Company may institute such separate action
against the Agency as the Company may deem necessary to compel performance or
recover damages for non-performance, and the Agency Covenants that it will not,
subject to the provisions of Sections 3.3 and 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 Loan. 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 Note and the Loan
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Agreement, pay moneys to the Mortgagee to be used for the prepayment of the Loan
at such time or times and on such terms and conditions as is provided in the
Note and the Loan Agreement.
Section 5.6 Rights and Obligations of the Company upon Prepayment of Loan.
In the event the Loan shall have been paid in full prior to the termination date
specified in Section 5.2(b) hereof (i) all references in this Lease Agreement to
the Mortgagee, the Loan Agreement, the Note and the Mortgage 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, 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 Mortgagee, or the Company may, at its
option, require the Agency to convey the Facility to the Company pursuant to the
terms of Section 1l.3 hereof. in the event of any such payment or the making of
any such provision, the Agency, at the sole cost of the Company, shall obtain
and record or file appropriate discharges or releases of the Mortgage and any
other security interest relating to the Facility or this Lease Agreement.
ARTICLE VI
MAINTENANCE, MODIFICATIONS. TAXES AND INSURANCE
Section 6.I Maintenance and Modification 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 Agency 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 Agency and the Mortgagee, 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 or value 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 Agency, The Company agrees to deliver to
the Agency all documents which may be necessary or appropriate to convey to the
Agency title to such Property and to perfect or protect the Lien of the
Mortgage.
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. 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
9
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.
Section 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 Agency 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; (iii) all
assessments and charges of any kind whatsoever lawfully made by any governmental
body for public improvements; and (iv) all payments under the Pilot Agreement;
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 Agency or the Mortgagee.
(c) The Agency 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 Agency 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 Agency and the Mortgagee official receipts of the
appropriate taxing authorities or other proof reasonably satisfactory to the
Agency and the Mortgagee evidencing payment of any tax.
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 businesses 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:
10
(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 ful1
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 Loan. 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 or any permitted sublessee is required
by law to provide, covering loss resulting from injury, sickness, disability or
death of employees of the Company or any permitted sublessee 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, any
permitted sublessee, any contractor or subcontractor first occupy the Facility.
(c) Insurance protecting the Agency 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) or
arising from personal injury, including bodily injury or death, or damage to the
property of others, caused by an accident or other occurrence, with a limit of
liability of not less titan $1,000,000 (combined single limit for personal
injury, including bodily injury or death, and property damage); comprehensive
automobile liability insurance covering all owned, non-owned and hired autos,
with a limit of liability of not less than $1,000,000 (combined single limit or
equivalent for personal injury, including bodily injury or death, and property
damage); and blanket excess liability coverage, in an amount not less than
$5,000,000 combined single limit or equivalent, protecting the Agency 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.
(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
11
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 injury1 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 $5,000,000.
(e) A policy or policies of flood insurance in an amount not less than the
principal amount of the Loan or the maximum amount of flood insurance available
with respect to the Facility under the Flood Disaster Protection Act of 1973, as
amended, whichever is less, This requirement will be waived upon presentation of
evidence satisfactory to the Mortgagee that no portion of the Land is located
within an area identified by the U.S. Department of Housing and Urban
Development as having special flood hazards.
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 authorized to write such insurance in the State and selected by the
entity required to procure the same, The company issuing the policies required
by Section 6,4(a) and (c) shall be rated "A" or better by A.M. Best Co., Inc. in
Best's Key Rating Guide. 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 evidencing the insurance required by
Sections 6,4(a) and (e) hereof shall contain a standard New York
non-contributory mortgagee clause showing the interest of the Mortgagee as first
mortgagee, shall provide for payment to the Mortgagee of the Net Proceeds of
insurance resulting from any claim for loss or damage thereunder and 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 Agency and the Mortgagee. The policy evidencing the
insurance required by Section 6.4(c) hereof shall name the Agency and the
Mortgagee as additional named insureds. All policies evidencing the insurance
required by Sections 6.4(d)(ii), (iii) and (iv) shall name the Agency and the
Company as additional named insureds. The Company acknowledges that a mortgage
and security interest in the policies of insurance required by Section 6.4(a)
and the Net Proceeds thereof have been or may be granted by the Agency to the
Mortgagee pursuant to the Mortgage and the Company consents thereto, Upon
request of the Mortgagee, the Company will assign and deliver (which assignment
shall be deemed to be automatic and to have occurred upon the occurrence of an
Event of Default under the Mortgage) to the Mortgagee, the policies of insurance
required under Section 6.4(a), so and in such manner and form that the Mortgagee
shall at all times, upon such request and until the payment in full of the Loan,
have and hold said policies and the Net Proceeds thereof, as collateral and
further security under the Mortgage for the payment of the Loan. The policies
12
under Section 6.4(a) shall contain appropriate waivers of subrogation. Nothing
contained in this Lease Agreement is intended to limit or modify any insurance
requirements set forth in the Mortgage
(b) The policies (or certificates or binders) of insurance required by
Sections 6.4(a) and (e) hereof shall be deposited with the Mortgagee on or
before the Closing Date. A copy of the policy (or certificate or binder) of
insurance required by Section 6.4(c) hereof shall be delivered to the Agency on
or before the C1osing Date. A copy of the policies (or certificates or binders)
of insurance required by Sections 6.4(d)(ii), (iii) and (iv) hereof shall be
delivered to the Agency on or before the Closing Date. The company shall deliver
to the Agency and the Mortgagee before the first Business Day of each calendar
year thereafter a certificate dated not earlier than the immediately preceding
month reciting that there is in full force and effect, with a term covering at
least the next succeeding calendar year, insurance of the types and in the
amounts required by Section 6.4 hereof and complying with the additional
requirements of Section 6.5(e) hereof. Prior to the expiration of each such
policy or policies, the Company shall furnish to the Agency and any other
appropriate Person on new policy or policies of insurance or evidence that such
policy or policies have been renewed or replaced or are 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 Agency
and the Mortgagee 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(e) and (e) 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 Mortgage to Pay Taxes, Insurance Premiums and Other
Charges. If the Company fails 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), or (v) to pay any other amount or
perform any act hereunder required to be paid or performed by the Company
hereunder, the Agency or the Mortgagee 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 Agency or the Mortgagee until at least ten (10) days shall have elapsed
since notice shall have been given by the Mortgagee to the Agency, with a copy
of such notice being given to the Company (or by the Agency to the Company and
the Mortgagee), and in the case of any tax, assessment or governmental charge or
the amounts specified in paragraphs (iii) and (iv) hereof, no such payment shall
be made in any event if the Company is contesting the same in good faith to the
13
extent and us permitted by this Lease Agreement an Event of Default hereunder
shall have occurred and be continuing. No such payment by the Agency or the
Mortgagee shall affect or impair any rights of the Agency hereunder or of the
Mortgagee under the Mortgage arising in consequence of such failure by the
Company. The Company shall, on demand, reimburse the Agency or the Mortgagee for
any amount so paid or for expenses or costs incurred in the performance of any
such act by the Agency or the Mortgagee pursuant to this Section (which shall
include alt reasonable legal fees and disbursements), together with interest
thereon from the date of payment of such amount expense or cost by the Agency or
the Mortgagee at two Percent (2%) in excess of the rate set forth in the Note,
and such amount, together with such interest, shall become additional
indebtednes5 secured by the Mortgage.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damage or Destruction of the Facility.
(a) If the Facility or any part or component thereof shall be damaged or
destroyed (in whole or in part) at any time during the Lease Term:
(i) the Agency 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 or the PILOT Agreement
(whether or not the Facility is replaced, repaired, rebuilt, restored
or relocated); and
(iii) the Company shall promptly give written notice thereof to the
Agency and the Mortgagee; and
(iv) upon the occurrence of such damage or destruction the Net
Proceeds derived from the insurance shall be paid to the Mortgagee and
except as otherwise provided in Section 11 .1 and subsection (d)
hereof, applied by the Mortgagee pursuant to the terms of the
Mortgage; and
(v) if the Facility is not replaced repaired, rebuilt, restored or
relocated, as provided herein and in Section 7.1(b) hereof, this Lease
Agreement shall be terminated at the option of the Agency and the
provisions of Sections 11.2, 11.3 and 11.4 hereof shall apply,
(b) Any replacements repairs, rebuilding, restorations or relocations of
the Facility by the Company after the occurrence of such damage or destruction
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;
14
(iii) the Facility will be subject to no Liens, other than Permitted
Encumbrances; and
(iv) any other conditions the Mortgagee may reasonably impose.
(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, shall be promptly
and fully paid for by the Company in accordance with the terms of the applicable
contracts, and shall automatically become a part of the Facility as if the same
were specifically provided herein.
(d) 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 Mortgagee 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,
(e) If the entire amount of the Loan and interest thereon has been fully
paid, all such remaining Net Proceeds shall be paid to the Company.
(f) If the Facility has been substantially damaged or destroyed and is not
replaced, repaired, rebuilt, restored or relocated, the Facility will be
reconveyed to the Company subject to the Mortgage.
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 Agency 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 or the PILOT Agreement
(whether or not the Facility is replaced, repaired, rebuilt, restored
or relocated or Substitute Facilities acquired); and
(iii) the Company shall promptly give written notice thereof to the
Agency and the Mortgagee; and
(iv) upon the occurrence of such Condemnation, the Net Proceeds
derived therefrom shall be paid to the Mortgagee and except as
otherwise provided in Section 11 .1 and subsection (d) hereof, applied
by the Mortgagee pursuant to the terms of the Mortgage; and
(v) if the Facility is not replaced, repaired, rebuilt, restored or
relocated, or Substitute Faci1lties acquired, as provided herein and
in Section 7.2(h) hereof, this Lease Agreement shall be terminated at
the option of the Agency and the provisions of Section 11 .2, 11.3 and
11.4 hereof shall apply.
15
(b) Any replacements, repairs, rebuilding, restorations or relocations of
the Facility or acquisitions of Substitute Facilities by the Company after the
occurrence of such Condemnation shall ho 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;
(iii) the Facility or the Substitute Facilities will be subject to no
Liens, other than Permitted Encumbrances; and
(iv) any other conditions the Mortgagee may reasonably impose,
(c) All such repair, replacement, rebuilding, restoration or relocation of
the Facility or acquisition of Substitute Facilities shall be effected with due
diligence in a good and workmanlike manner in compliance with all applicable
legal requirements, shall be promptly and fully paid for by the Company in
accordance with the terms of the applicable contracts, and shall automatically
become a part of the Facility as if the same were specifically described herein.
(d) 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 Mortgagee 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
(e) If the entire amount of the Loan and interest thereon has been fully
paid, all such remaining Net Proceeds shall be paid to the Company.
(f) If the Facility has been substantially condemned and is not replaced,
repaired, rebuilt, replaced or relocated or if a Substitute Facility is not
acquired, constructed and equipped, the Facility will be reconveyed to the
Company subject to the Mortgage.
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 Waiver of Real Property Law Seption 227. The Company hereby
waives the previsions of Section. 227 of the Real Property Law of the State or
any law of 111cc import now or hereafter in effect.
16
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1 No Warranty of Condition or Suitability by Agency. THE AGENCY
MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED AS TO THE CONDITION, DESIGN,
OPERATION, MERCHANTABILITY OR FITNESS OF, OR TITLE TO. 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 Agency, its directors, members, officers,
agents (except the Company) and employees shall not be liable for and agrees to
defend, indemnify, release and hold the Agency, its directors, members,
officers, agents (except the Company) and employees 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 Agency's financing, acquiring, constructing,
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(c) of this Lease Agreement
and all causes of action and attorneys' fees (whether by reason of third party
claims or by reason of the enforcement of any provision of this Lease Agreement
(including without limitation this Section) or any of the other documents
delivered on the Closing Date by the Agency), and any other expenses incurred in
defending any claims, 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 Agency are not incurred or do not result from the gross negligence or
intentional or willful wrongdoing of the Agency or any of its directors,
members, agents (except the Company) or employees. The foregoing indemnities
shall apply notwithstanding the fault or negligence in part of the Agency, 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, and upon the application of
any such prohibition by the final judgment or decision of a competent court of
law, the remaining provisions of these indemnities shall remain in full force
and effect.
(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 Agency, or its members,
directors, officers, agents and employees, relating to the enforcement of the
provisions herein specified.
(c) In the event of any claim against the Agency or its members, directors,
officers, agents or employees by any employee or contractor of the Company or
17
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 Agency and the Mortgagee 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 and will not dissolve,
liquidate or otherwise dispose of substantially all of its assets.
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 Sections 874(8) and
(9) of the New York State General Municipal Law. The Company shall submit a copy
of such annual statement to the Agency at the time of filing with the Department
of Taxation and Finance. The Company further agrees whenever requested by the
Agency to provide and certify or cause to be provided and certified such
information concerning the Company, its finances, its operations, its employment
and its affairs necessary to enable the Agency to make any report required by
law, governmental regulation or any of the Agency Documents or Company
Documents. Such information shall be provided within thirty (30) days following
written request from the Agency.
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 Agency and to the
Mortgagee 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, codas, laws, acts, 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 arty part thereof or to the acquisition,
construction and equipping thereof, or to any use, manner of use or condition of
the Facility or any part thereof, all federal, state, county, municipal and
other governments, departments, commissions, boards, courts, authorities,
officials and officers having jurisdiction to the Facility or any part thereof,
or to the acquisition, construction and equipping thereof, or to any use, manner
of use or condition of the Facility or any part thereof or to companies or
associations insuring the premises.
18
(b) The company shall keep or cause the Facility to be kept free of
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
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 unintentionial act or omission on the part of the Company or any
contractor, subcontractor, tenant or subtenant, a release of Hazardous
Substances onto the Facility or onto any other properly. 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
subtentans 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 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 Mortgagee and the Agency 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 Mortgagee and the Agency, their
employees, agents, officers, members 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 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
Substances, (iii) any lawsuit brought or threatened, settlement reached, or
government order relating to such Hazardous Substances, and/or (iv) any
violation of laws, orders, regulations, requirements, or demands of government
authorities, or any policies or requirements of the Mortgagee and the Agency,
which are based upon or in any way related to such Hazardous Substances,
including, without limitation, attorney and consultant fees, investigation and
laboratory fees, court costs, and litigation expenses. In the event the Mortgage
is foreclosed, or the Company tenders a deed in lieu of foreclosure, the Company
shall deliver the Facility free of any and all Hazardous Substances so that the
condition of the Facility shall conform with all applicable federal, state and
local laws, ordinances, rules or regulations affecting the Facility. The
provisions of this Section shall be in addition to any and all other obligations
and liabilities the Company may have to the Agency and the Mortgagee 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 Agency or the Mortgagee shall notify the Company that by failure to comply
with such requirement or requirements, the Lien of the Mortgage as to any part
of the Facility may be materially endangered or the Facility or any part thereof
may be subject to loss (including loss of value), 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 Mortgagee and to the
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Agency. 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 use or 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 Agency and the Mortgagee.
(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 Agency, the Mortgagee, 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 Agency or the Mortgagee, the Company shall immediately provide
legal protection and/or pay amounts necessary in the opinion of the Agency or
the Mortgagee, as the case may be, and their respective members, directors,
officers, agents and employees 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 8.8, the Mortgagee and
the Agency each retain the right to defend themselves in any action or actions
which are based upon or in any way related to such Hazardous Substances in any
such defense of themselves, the Mortgagee and the Agency 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 he 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 Agency or the Mortgagee
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 (including toss of value) 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 Mortgagee and the Agency,
thereby causing such Lien to be removed or by taking such other actions as may
be satisfactory to the Mortgagee and the Agency to protect their respective
interests, Mechanics' Liens shall be discharged or bonded within thirty (30)
days of the filing or perfection thereof.
Section 8.10 Indemnification of Equipment. All Equipment which is or may
become the Property of the Agency pursuant to the provisions of this Lease
Agreement shall be properly identified by the Company by such appropriate
records, including computerized records, as may be approved by the Agency and
the Mortgagee. 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
20
Agency, 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 as were approved by the Agency and the Mortgagee.
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 and to any investment credit with respect to any part of the Facility.
Section 8.12 Employment Opportunities, Notice of Jobs. The Company
covenants and agrees that, in consideration of the participation of the Agency
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 FPL 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 programs who
shall be referred by the Referral Agencies.
ARTICLE IX
RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING;
MORTGAGE AND PLEDGE OF INTERESTS
Section 9.1 Restriction of Sale of Facility; Release of Certain Land.
(a) Except as otherwise specifically provided in this Article IX and in
Article X hereof, the Agency 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
Mortgagee.
(b) With the prior written consent of the Mortgagee given at the sole
discretion of the Mortgagee, the Agency 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 Agency, at the
Company's sole cost and expense, shall execute and deliver, and request the
Mortgagee 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, free from the Lien of the Mortgage, to the
Company or such other Person as the Company may designate. As a condition to
such conveyance, the Mortgagee shall be provided with a copy of the instrument
transferring such title or interest in such Land, an instrument survey (if the
Mortgagee so requests) of the Land to be conveyed, together with a certificate
of an Authorized Officer of the Company stating that there is then no Event of
Default under this Lease Agreement and such part of, or interest in, the Land is
not necessary, desirable or useful for the Facility.
21
(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 or any
abatement or diminution of the amounts payable by it under the PILOT Agreement.
Section 9.2 Removal of Equipment.
(a) The Agency 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, with the prior written consent of the
Mortgagee (which consent may not be unreasonably withheld but may be subject to
such reasonable conditions us the Mortgagee may deem appropriate), 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, free from the Lien of the Mortgage,
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.
(h) The Agency 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.
(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, Subleasing and Encumbering.
(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 (except pursuant to the
Sublease Agreement), without the prior written consent of the Mortgagee and the
Agency in each instance. Any assignment or sublease shall be on the following
conditions, as of the time of such assignment or sublease:
(i) no assignment or sublease shall relieve the Company from primary
liability for any of its obligations hereunder;
(ii) the assignee or sublessee (except in the case of a true sublease
in the ordinary course of business) 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 Agency and to the
Mortgagee a true and complete copy of such assignment or sublease and
the instrument of assumption;
22
(iv) neither the validity nor the enforceability of the Lease
Agreement or any of the Loan Documents shall be adversely affected
thereby;
(v) the Facility shall continue to constitute a "project" us such
quoted term is defined in the Act; and
(vi) the sublessee will execute and deliver an agency compliance
agreement, in form and substance satisfactory to the Agency.
(b) If the Mortgagee or the Agency 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 Mortgagee and the Agency,
with an opinion, in form and substance satisfactory to the Mortgagee and the
Agency (i) of Transaction Counsel as to item (v) above, and (ii) of Independent
Counsel as to Items (i), (ii) and (iv) above.
(c) The Company shall not create or permit any Liens, mortgages, security
Interests or other encumbrances of, on or in the Facility, or any part
thereof, except for Permitted Encumbrances, without the express written consent
of the Agency, Which shall not be unreasonably withheld.
Section 9.4 Mortgage and Pledge of Agency's Interests to Mortgagee. The
Agency shall (I) mortgage its interest in the Facility, and (ii) 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 Mortgagee as
security for the payment of the principal of and interest on the Loan. The
Company hereby acknowledges and consents to such mortgage, pledge and assignment
by the Agency. Notwithstanding the foregoing, all indemnities herein contained
shall subsequent to such mortgage, pledge and assignment continue to run to the
Agency for its benefit as well as for the benefit of the Mortgagee.
Section 9.5 Pledge of Company's Interest to Mortgagee. The Company shall
pledge and assign its rights to and interest in this Lease Agreement to the
Mortgagee as security for the payment of the principal of and interest on the
Loan. The Agency hereby acknowledges and consents to such pledge and assignment
by the Company.
Section 9.6 Merger of Agency.
(a) Nothing contained in this Lease Agreement shall prevent the
consolidation of the Agency with, or merger of the Agency 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 tire Agency 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 Agency shall give notice thereof
in reasonable detail to the Company and the Mortgagee and shall furnish to the
Company and the Mortgagee, at the sole cost and expense of the Company, a
favorable opinion of Independent Counsel as to compliance with the provisions of
23
Section 9.6(a) hereof. The Agency promptly shall furnish such additional
information with respect to any such transaction as the Company or the Mortgagee
may reasonably request.
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, the amount specified to be paid pursuant to Section 5.3(u) and
(h) hereof;
(ii) the failure by the Company to observe and perform any covenant
contained in Sections 6,4, 6.5, 8.4 and 9.3 hereof;
(iii) the failure by the Company to pay or cause to be paid on the
dates due, the amounts specified to be paid pursuant to the PILOT
Agreement;
(iv) the invalidity, illegality or unenforceability of the PILOT
Agreement; or the failure by the Company to observe and perform any
covenant contained in the PILOT Agreement;
(v) any representation or warranty of the Company herein or in any of
the Company Documents 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.l(a)(i), (ii) and
(iii)) 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 Agency or the Mortgagee;
(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 eany on its operations; or
the failure by the Company generally to pay it~ 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 in 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 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 trustee,
receiver or agent (however named) is appointed or authorized to take
charge of substantially all of the property of the Company for the
24
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 Mortgage shall, have occurred and
be continuing
(ix) an Event of Default under the Loan Documents shall have occurred
and be continuing;
(x) the invalidity, illegality or unenforceability of any of the Loan
Documents; or
(xi) a breach of any covenant or representation contained in Section
8,8 hereof with respect to environmental matters.
(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 Mortgagee, 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
o1 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, lookouts 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.
Section 10.2 Remedies on Default.
(a) Whenever any Event of Default shall have occurred, the Agency or the
Mortgagee may take, to the extent permitted by law, any one or more of the
following remedial steps:
(i) declare, by written notice to the Company, to be immediately due
and payable, whereupon the same shall become immediately due and
payable: (A) all unpaid installments of rent payable pursuant to
Section 5.3(a) and (b) hereof, (B) all unpaid and past due payments in
lieu of taxes pursuant to the PILOT Agreement and (C) all other
25
payments due under this Lease Agreement; provided, however, that if an
Event of Default specified in Section 10.l(a)(vii) hereof shall have
occurred, such installments of rent and other payments due under this
Lease Agreement shall become immediately due and payable without
notice to the Company or the taking of any other action by the Agency
or the Mortgagee;
(ii) re-enter and take possession of the Facility, on ten (10) days
written notice to the Company, without terminating this Lease
Agreement and without being liable for any prosecution or damages
therefor, and sublease the Facility for the account of the Company,
holding the Company liable for the amount, if any, by which the
aggregate of the rents and other amounts payable by the Company
hereunder exceeds the aggregate of the rents and other amounts
received from the sublessee under such sublease.
(iii) terminate, on ten (10) days written notice to the Company
(provided, however, that no notice of termination to the Company shall
be required upon the occurrence of an Event o Default pursuant to
Section i0.l(a)(ix) or (x) hereof), the Lease Term and all rights of
the Company under this Lease Agreement and, without being liable for
any prosecution or damages therefor, exclude the Company from
possession of the Facility and lease the Facility to another Person
for the account of the Company, holding the Company liable for the
amount, if any, by which the aggregate of the rents and other amounts
payable by the Company hereunder exceeds the aggregate of the rents
and other amounts received from such other Person under the new lease;
(iv) enter upon the Facility and complete the acquisition,
construction and equipping of the Facility in accordance with the
Plans and Specifications (with such changes as the Mortgagee may deem
appropriate) and in connection therewith (a) engage architects,
contractors, materialmen, laborers and suppliers and others, (b)
employ watchmen to protect and preserve the Facility, (c) assume any
contract relating to the Facility and take over and use all labor,
materials, supplies and equipment, whether or not previously
incorporated into the Facility, (d) pay, settle or compromise all
bills or claims, (e) discontinue any work or change any course of
action already undertaken with respect to the Facility, and (f) take
or refrain from taking such action hereunder as the Mortgagee rosy
from time to time determine;
(v) terminate this Lease Agreement reconvey the Facility to the
Company subject to the Mortgage (unless same have been satisfied or
released) and terminate the PILOT Agreement. The Agency shall have the
right to execute an appropriate deed with respect to the Facility and
to place the same on record in the Suffolk County Clerk's Office, at
the expense of the Company and in such event the Company waives
delivery and acceptance of such deed and the Company hereby appoints
the Agency 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 file on its behalf all affidavits,
questionnaires and other documentation necessary to accomplish the
recording of such deed; or
26
(vi) take any other action at law or in equity which may appear
necessary or desirable to collect the payments then due or
thereafter to become due hereunder and under the PILOT
Agreement, to secure possession of the Facility, and to enforce
the obligations1 agreements or covenants of the Company under
this Lease Agreement and under the PILOT Agreement.
(b) In the event the Facility is subleased or leased to another Person
pursuant to Section l0.2(a)(ii) or (iii) hereof, the Agency or the Mortgagee, as
appropriate, may (but shall be under no obligation to) make such repairs or
alterations in or to the Facility as it may deem necessary or desirable for the
Implementation of such sublease or lease, and the Company shall he liable and
agrees to pay the costs of such repairs or alterations and the expenses
incidental to the effecting of such sublease or lease, together with interest on
such costs and expense paid by either the Agency or the Mortgagee at the rate at
one percent (1%) in excess of the rate set forth in the Note, but in no event at
a rate higher than the maximum lawful prevailing rate, from the date on which
such costs and expenses were incurred until the date on which such payment is
made, notwithstanding that the Lease Term and all rights of the Company under
this Lease Agreement may have been terminated pursuant to Section 10.2(a)(iii)
hereof.
(c) Any sums payable to the Agency 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 Mortgagee and applied to the payment of the Loan.
(d) No action taken pursuant to this Section 10.2 (including repossession
of the Facility) shall relieve the Company from its obligation to make all
payments required by Section 5.3 hereof.
(e) After an Event of Default shall have occurred, the Company shall have
the right upon notice to the Agency and the Mortgagee to enter the Facility with
agents or representatives of the Agency and the Mortgagee to remove any
equipment or other personalty owned by the Company if such equipment or
personalty is not part of the Facility.
Section 10.3 Remedies Cumulative. No remedy herein conferred upon or
reserved to the Agency or the Mortgagee 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 Agency or the Mortgagee, 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.
(a) In the event the Company should default under any of the provisions of
this Lease Agreement and the Agency 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
27
Agency the reasonable fees of such attorneys and such other expenses so
incurred.
(b) In the event the Company should default under any of the provisions of
this Lease Agreement and the Mortgagee 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 there for, pay to the
Mortgagee 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,
ARTICLE Xl
EARLY TERMINATION OF LEASE AGREEMENT;
OPTION N FAVOR OF COMPANY
Section 11.1 Early Termination of Lease Agreement. The Company shall have
the option to terminate this Lease Agreement at any time that the Loan has been
paid in full or is subject to prepayment in whole pursuant to the terms of the
Note and upon tiling with the Agency and the Mortgagee 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 payments required by
Section 11.2 hereof shall be mode (which date shall not be less than 45 nor mob
than 90 days from the date such certificate is filed) and upon compliance with
the requirements set forth in Section 11.2 hereof.
Section 11.2 Conditions to Early Termination of Lease Agreement. In the
event the Company exercises its option to terminate this Lease Agreement In
accordance with the provisions of Section 11.1. hereof, the Company shall make
the following payments;
(a) To the Mortgagee: an amount certified by the Mortgagee that will be
sufficient to pay the principal of and interest and any other amounts
outstanding under the Loan.
(b) To the Agency or the Taxing Authorities (as such term is defined in the
PILOT Agreement), as appropriate pursuant to the PILOT Agreement: all amounts
due and payable under the PILOT Agreement as of the date of the conveyance
described in Section 1.1 .3 hereof.
(c) To the Agency: an amount certified by the Agency sufficient to pay all
unpaid fees and expenses of the Agency incurred under the Agency Documents.
(d) To the appropriate Person: an amount sufficient to pay oil other fees,
expenses or charges, if any, due and payable or to become due and payable under
the Loan Documents.
28
Section 11.3 Obligation to Purchase Facility. Upon termination or
expiration of the Lease Term, in accordance with Sections 5.2 or 11.1 hereof,
the Company shall be obligated to purchase the Facility from the Agency for the
purchase price of One Dollar $l.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 Agency and to the Mortgagee (which may be contained in the
certificate referred to in Section 11.1 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 Agency shall, upon receipt of the
purchase price, deliver and request the Mortgagee 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 Agency. (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 (other than the Lien of the Mortgage) 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
Agency'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) and (iii) to discharge and release the Mortgage
and any other security interest held by the Mortgagee. Upon the conveyance of
the Facility by the Agency to the Company pursuant to this Article XI., the
PILOT Agreement shall terminate.
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, addressed as
follows or to such other address as any party may specify in writing to the
other:
To the Agency:
Town of Islip Industrial Development Agency
00 Xxxxxx Xxxxxx
Xxxxx, Xxx Xxxx 00000
Attention: Administrative Director
To the Company:
EPG Realty Co., X.XX
000 Xxxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxx Xxxx 00000
Attention: Member
To the First Mortgagee:
29
American Community Bank
Commercial Loan Department
000 Xxxx Xxxxxx
Xxxx Xxxx, Xxx Xxxx 00000
Attention: Executive Vice President
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
Mortgagee.
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.
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 Agency and the Mortgagee a schedule listing all of the Equipment
not previously described In this Lease Agreement. If requested by the Agency or
the Mortgagee, the Company shall thereafter furnish to the Agency and the
Mortgagee, 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 Agency 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 the
Mortgage.
Section 1 2.8 Survival Obligations. This Lease Agreement shall survive the
making of the Loan 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 army termination or expiration of this Lease Agreement and the payment of
the Loan.
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 he taken as an interpretation of any
provision of this Lease Agreement.
30
IN WITNESS WRERBOF, the Agency and the Company have caused this Lease
Agreement to be executed in their respective names by their duly authorized
officers, all as of February 1, 2004.
TOWN OF ISLIP INDUSTRIAL
DEVELOPMENT AGENCY
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Administrative Director
HPG REALTY CO., LLC
By:
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Member
00
XXXXX XX XXX XXXX )
SS.:
COUNTY OF NASSAU )
On the 4th day of February in the year 2004, before me, the undersigned, a
Notary Public in and for said State, personally appeared Xxxxxxx X. Xxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within Lease Agreement, and
acknowledged to me that he executed the same in his capacity, and that by his
signature on the Lease Agreement, the individual, or the person or entity on
behalf of which the individual acted, executed the instrument.
-----------------------------------
Notary Public
00
XXXXX XX XXX XXXX )
SS.:
COUNTY OF NASSAU )
On the 4th day of February in the year 2004, before me, the undersigned, a
Notary Public in and for said State, personally appeared Xxxxxx X. Xxxxxxxxxx,
personally known to me or proved to me on the basis of satisfactory evidence to
be the individual whose name is subscribed to the within Lease Agreement. and
acknowledged to me that she executed the same in her capacity, and that by her
signature on the Lease Agreement, the individual, or the person or entity on
behalf of which the individual acted, executed the instrument.
-----------------------------------
Notary Public
33
EXHIBIT A
Legal Description of Real Property
ALL that certain plot, piece, or parcel of land situate, lying and being in the
Town of Islip, County of Suffolk and State of New York, designated as Tax Lot
002.001 in Block 03.00 Section 105.00 in District 0500 on the Suffolk County Tax
Map, more particularly bounded and described as follows;
BEGINNING at a point on the northerly line of Marconi Avenue (Fifth Street) said
point being 388.00 feet distant westerly us measured along the northerly line of
Marconi Avenue, from the westerly end of a curve having a radius of 30.00 feet
and a length of 47.12 feet connecting the westerly line of Smithtown Avenue and
the northerly line of Marconi Avenue and the proceeding thence from-said point
a. beginning the following four courses and distances;
RUJNNING THENCE south 82 degrees 45 minutes 32 seconds west a distance of 132.00
feet along the northerly line of Marconi Avenue (Fifth Street) to a point;
THENCE north 01 degrees 21 minutes 07 seconds east, a distance 333.75 feet to a
point;
THENCE north 82 degrees 45 minutes 32 seconds east, 132.00 feet to a point;
THENCE south 01 degrees 21 minutes 07 seconds west, 333.75 feet to the point of
place of BEGINNING.
EXHIBIT B
Equipment
All equipment, fixtures, machinery, building materials and items of
personal property acquired, constructed or installed and/or to be acquired,
constructed or installed in connection with the completion of the HPG Realty
Co., LLC/Tri-Start Electronics, Inc. 2004 Facility located at 000 Xxxxxxx
Xxxxxx, Xxxxxxxxxx, Xxxx of Islip, Suffolk County, New York, including, but not
limited to, furnishings and fixtures.
SCHEDULE A
SCHEDULE OF DEFINITIONS
"Act" means, collectively, Title 1 of Article 18-A of the General Municipal
Law of the State, enacted into law as Chapter 1030 of the Laws of 1969 of the
State, as amended, together with Chapter 47 of the Laws of 1974 of the State, as
amended.
"Agency" means (i) the Town of Islip Industrial Development Agency, its
successors and assigns, and (ii) any local governmental body resulting from or
surviving any consolidation or merger to which the Agency or its successors may
be a party.
"Agency Compliance Agreement" means the Agency Compliance Agreement, dated
as of February 1, 2004, by and between the Agency and the Sublessee.
"Agency Documents" means the Lease Agreement, the Environmental Compliance
and Indemnification Agreement, the PILOT Agreement, the Mortgage, the Assignment
of Rents and Leases and the Agency Compliance Agreement.
"Approving Resolution" means the resolution adopted by the Agency on the
3rd day of February, 2004 authorizing the execution and delivery of the Agency
Documents, as such resolution may be amended and supplemented from time to time.
"Assignment of Rents and Leases" means the Assignment of Rents and Leases,
dated the Closing Date, from the Company and the Agency to the Mortgagee,
"Authorized Representative" means, in the case of the Agency, the Chairman,
the Vice Chairman, the Secretary, the Assistant Secretary or the Administrative
Director of the Agency; in the case of the Company, any Member; in the case of
the Sublessee, the President, any Vice President, the Treasurer or the
Secretary, and, in the case of any of them, such additional persons as, at the
time, are designated to act on behalf of the Agency, the Company, or the
Sublessee as the case may be, by written certificate furnished to the Mortgagee
and to the Agency, Company or the Sublessee, as the case may be, containing the
specimen signature of each such person and signed on behalf of (i) the Agency by
the Chairman, the Vice Chairman, the Secretary, the Assistant Secretary or the
Administrative Director of the Agency, (ii) the Company by any Member of the
Company, or (iii) the Sublessee by the President, any Vice President, the
Treasurer or the Secretary.
"Xxxx of Sale" means the Xxxx of Sale, dated the Closing Date, given by the
Company to the Agency with respect to the equipment, us the same may be amended
from time to time.
"Bridge Loan" shall mean the loan by the First Mortgagee to the Company in
the amount of $520,000, representing the principal amount of the Bridge
Mortgage, in connection with the Facility and shall include any and all
amendments, modifications and extensions thereof and supplements thereto
hereafter made in conformity therewith.
"Bridge Loan Mortgage Note" shall mean the Bridge Loan Mortgage Note
evidencing the Bridge Loan and shall include any and all amendments,
modifications and extensions thereof and supplements thereto hereafter made in
conformity with the First Mortgage.
"Bridge Mortgage" means the Bridge Loan Mortgage and Security Agreement,
dated February 4, 2004, given by the Agency and the Company to the First
Mortgagee, in the aggregate principal amount of $520,000.00, and shall include
any and all amendments, modifications and extensions thereof and supplements
thereto hereafter made in conformity therewith.
"Business Day" means any day other than a Saturday, a Sunday, a legal
holiday or a day on which banking institutions In New York, New York or any city
in which the principal office of the Mortgagee is located are authorized by law
or executive order to remain closed.
"Closing Date" means the date of delivery of the Deed.
"Company" means HPG Realty Co., LLC, a limited liability company duly
organized and validly existing under the laws of the State of New York, and its
successors and assigns.
"Company Documents" means the Xxxx of Sale, the Deed, the Lease Agreement,
the Environmental Compliance and Indemnification Agreement, the PILOT
Agreement, the Sublease Agreement and the Loan Documents.
"Completion Date" means the date of completion of the Facility as certified
pursuant to Section 4.3 of the Lease Agreement.
"Condemnation" means the taking of title to, or the use of, Property under
the exercise of the power of eminent domain by any governmental entity or other
Person acting under governmental authority.
"Construction Period" means the period (a) beginning on the earlier of (i)
the date of commencement of acquisition, construction and equipping of the
Facility, which date shall not he prior to May 6, 2003, or (ii) the Closing
Date, and (b) ending on the Completion Date.
"Deed" means the Bargain and Sale Deed, dated the Closing Date, given by
the Company to the Agency with respect to the Land and the existing improvements
thereon.
"Environmental Compliance and Indemnification Agreement" means the
Environmental Compliance and indemnification Agreement, dated as of February 1,
2004, among the Agency, the Company and the Sublessee.
"Equipment" means all machinery, equipment and other personal property used
and to be used in connection with the Facility, as described in Exhibit B to the
Lease Agreement.
"Event of Default" (a) when used with respect to the Lease Agreement, means
any of the events defined as Events of Default by Section 10.1 of the Lease
Agreement, and (b) when used with respect to the Mortgage, means any of the
events defined as Events of Default in the Mortgage.
"Facility" means the Land, the Improvements and the Equipment leased to the
Company under the Lease Agreement.
Schedule A-2
"Facility Services" means all services necessary for the acquisition,
construction and equipping of the Facility.
"First Mortgage" means the Mortgage and Security Agreement, dated February
4, 2004, given by the Agency and the Company to the First Mortgagee, in the
aggregate principal amount of $650,000.00, and shall include any and all
amendments, modifications and extensions thereof and supplements thereto
hereafter made in conformity therewith.
"First Mortgagee" shall mean (i) American Community Bank, a federal
association duly organized under the laws of the State of New York, (ii) its
successors or assigns, or (iii) any surviving, resulting or transferee banking
institution authorized to do business in the State.
"First Mortgage Loan" shall mean the loan by the First Mortgagee to the
Company in the amount of $650,000, representing the principal amount of the
First Mortgage, in connection with the Facility and shall include any and all
amendments, modifications and extensions thereof and supplements thereto
hereafter made in conformity therewith.
"First Mortgage Note" shall mean the First Mortgage Note evidencing the
First Mortgage Loan and shall include any and all amendments, modifications and
extensions thereof and supplements thereto hereafter made in conformity with the
First Mortgage.
"Hazardous Substance" means, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulation,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances or related materials
as defined in the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended (42 U.S.C. Sections 9601, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Sections 6901, et
seq.), the Hazardous Materials Transportation Act, as amended (49 U.S.C.
Sections 1801, et seq.), the Toxic Substances Control Act, as amended (15 U.S.C.
Sections 2601, et seq.), Articles 17 and 27 of the New York State Environmental
Conservation Law, or any other applicable Environmental Law and the regulations
promulgated thereunder.
"Improvements" means all those buildings, improvements, structures and
other related facilities (i) affixed or attached to the Land and (ii) not part
of the Equipment, all as they may exist from time to time,
"Independent Counsel" means an attorney or attorneys or firm or firms of
attorneys duly admitted to practice law before the highest court of any state of
the United States of America or in the District of Columbia and not a full time
employee of the Agency, the Company, the Sublessee or the Mortgagee.
"Land" means the real property leased by the Agency to the Company pursuant
to the tease Agreement and more particularly described in Exhibit A attached
thereto.
"Lease Agreement" means the Lease Agreement, dated as of February 1, 2004,
between the Agency, as lessor, and the Company, as lessee, with respect to the
Facility, as the saint may he amended from time to time.
Schedule A-3
"Lease Term" means the duration of the leasehold estate created by the
Lease Agreement as specified in Section 5.2 of the Lease Agreement.
"Lien" means any interest in Property securing an obligation owed to a
Person, whether such interest is based on the common law, statute or contract,
and including but not limited to the security interest arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" includes reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other similar title exceptions and encumbrances,
including but not limited to mechanics', materialmen's, warehousemen's,
carriers' and other similar encumbrances, affecting real property. For the
purposes of this definition, a Person shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"Loan" means the loan in the aggregate amount of $1,170,000, given by the
Mortgagee to the Company pursuant to the terms of the Loan Documents.
"Loan Agreement" means the Building Loan Agreement, dated the Closing Date,
between the Company and the Mortgagee.
"Loan Documents" means, collectively, the Mortgage, the Loan Agreement, the
Assignment of Rents and Leases, the Note, the Guaranty and any other documents
executed and delivered to the Mortgagee In connection with the Loan.
"Mortgage" means collectively (i) the First Mortgage, (ii) the Second
Mortgage, and (iii) the Bridge Mortgage, each covering, among other things, the
Facility and each given by the Agency and the Company to the Mortgagee as
security for the Loan, as the same may be modified, amended, renewed or extended
from time to time.
"Mortgagee" shall mean, collectively, (i) American Community Bank, a
federal association duly organized under the laws of the State of New York, (ii)
Long Island Development Corp. and/or the U.S. Small Business Administration,
(iii) any of their successors or assigns, and (iv) any surviving, resulting or
transferee banking institution authorized to do business in the State.
"Net Proceeds" means so much of the gross proceeds with respect to which
that term is used us remain after payment of all expenses, costs and taxes
(including attorneys' fees) incurred in obtaining such gross proceeds.
"Note" means collectively (i) the First Mortgage Note, (ii) the Second
Mortgage Note, and (iii) the Bridge Note, each given by the Company to the
Mortgagee evidencing the Loan for the Facility.
"Permitted Encumbrances" means (I) exceptions to title set forth, in the
Title Report, (ii) the Mortgage, (iii) the Lease Agreement, (iv) utility, access
and other easements and rights-of-way, restrictions and exceptions that do not
materially impair the utility or the value of the Property affected thereby for
the purposes for which it is intended, (v) mechanics', materialmen's,
warehousemen's, carriers' and other similar Liens which are approved in writing
Schedule A-4
by the Mortgagee or its Counsel, (vi) Liens for taxes not yet delinquent and
(vii) the Sublease Agreement.
"Person" or `Persons" means an individual, partnership, limited liability
company, corporation, trust or unincorporated organization, and a government or
agency or political subdivision or branch thereof.
"PILOT Agreement" means the Payment-in-Lieu-of-Tax Agreement, dated as of
February 1, 2004, among the Company, the Sublessee and the Agency, as amended
from time to time.
"Plans and Specifications" means he plans and specifications for the
Improvements, prepared for the Company and approved by the Mortgagee and the
Agency, as revised From time to time in accordance with the Lease Agreement.
"Prime Rate" means the rate designated by the Mortgagee from time to time
as its "prime rate."
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Public Purposes" shall mean the State's objective to create industrial
development agencies for the benefit of the several counties, cities, villages
and towns in the State and to empower such agencies, among other things, to
acquire, construct, reconstruct, lease, improve, maintain, equip and sell land
and any building or other improvement, and all real and personal properties,
including, but not limited to, machinery and equipment deemed necessary in
connection therewith, whether or not now in existence or under construction,
which shall be suitable for manufacturing, warehousing, research, commercial,
recreation or industrial facilities, including industrial pollution control
facilities, in order to advance job opportunities, health, general prosperity
and the economic welfare of the people of the State and to improve their
standard of living.
"Schedule of Definitions" means the words and terms set forth in this
Schedule of Definitions attached to the Lease Agreement, as the same may be
amended from time to time.
"Second Mortgagee" shall mean (I) Long Island Development Corp. and/or the
U.S. Small Business Administration, (Ii) its successors or assigns, or (iii) any
surviving, resulting or transferee banking institution authorized to do business
in the State.,
"Second Mortgage" means the Second Mortgage to be given to the Long Island
Development Corp., or its successors or assigns, by the Agency and the Company
after the Closing Date and to be subordinate to the First Mortgage and including
any and nil amendments thereof and supplements thereto hereafter made in
conformity therewith.
"Second Mortgage Loan" shall mean the loan by the Second Mortgagee to the
Company in the amount of $520,000 representing the principal of the Second
Mortgage in connection with the facility.
Schedule A-5
"Second Mortgage Note" shall mean the Second Mortgage Note evidencing the
Second Mortgage Loan and shall include any and all amendments thereof and
supplements thereto hereafter made in conformity with the Second Mortgage.
"SEQR Act" means the State Environmental Quality Review Act and the
regulations thereunder.
"State" means the State of New York.
"Sublease" or "Sublease Agreement" means a certain Sublease Agreement,
dated the Closing Date, between the Company, as sublessor, and the Sublessee, as
sublessee, as amended from time to time.
"Sublessee" means Tri-Start Electronics, Inc., a business corporation duly
organized and existing wider the laws of the State of New York, and its
successors and assigns.
"Sublessee Documents" means the Sublease Agreement, the Environmental
Compliance and Indemnification Agreement, the PILOT Agreement, the Agency
Compliance Agreement and certain of the Loan Documents.
"Substitute Facilities" means facilities of substantially the same nature
as the proposed Facility.
"Title Report" means Certificate of Title No. 03-8183-S issued by First New
York Title and Abstract, Ltd. to the Mortgagee and the Agency on May 6, 2003, as
amended on December 16, 2003, redated and recertified on the Closing Date.
"Transaction Counsel" means the law firm of Xxxxx Xxxxxxx LLP.
"Transaction Documents" means the Agency Documents, the Company Documents,
the Sublessee Documents and the Loan Documents.
"Unassigned Rights" means the rights of the Agency and moneys payable
pursuant to and under Sections 5.3(b), 6.4(b) and (c), 6.7, 8.1, 8.2, 8.8, 8.9,
8.12, 10.2(a)(i)(B) and l0.2(a)(v) (in each case with respect to Section 10.2
upon a continuing default in payment by the Company under the PILOT Agreement),
10.4(a), 11.2(b) and (c) and 12.8 of the Lease Agreement.
Schedule A-6
