EXHIBIT 10.9
LEASE
between
DIRECTOR OF DEVELOPMENT
OF THE STATE OF OHIO
and
FOREMOST MGMT., INC.
Dated
as of
September 21, 1993
(OHIO ENTERPRISE BOND FUND PROGRAM)
LEASE
THIS LEASE made and entered into as of September 2l , 1993
between the Director of Development of the State of Ohio (the "Director"), and
Foremost Mgmt., Inc., a corporation organized under the laws of the State of
Ohio (the "Company"), under the circumstances summarized in the following
recitals (the capitalized terms used in the recitals being used therein as
defined in Article I hereof):
A. Pursuant to the Act, the Director is authorized, among
other things, to acquire property, and convey property so acquired, by lease,
lease purchase or other disposition, upon such terms and conditions as the
Director determines to be appropriate to satisfy the objectives of the Act.
B. The Company has requested that the Director provide
financial assistance for the Project by acquiring and constructing the Project,
leasing the Project to the Company and conveying the Project to the Company upon
termination of the Lease Term, all subject to and in accordance with the terms
of this Lease.
C. The Director has determined that the Project constitutes an
Eligible Project and that the financial assistance to be provided pursuant to
this Lease is appropriate under the Act and will be in furtherance and in
implementation of the public policy set forth in the Act.
D. The financial assistance to be provided pursuant to this
Lease has been reviewed and approved by the Development Financing Advisory Board
and the Controlling Board, pursuant to the Act.
NOW, THEREFORE, in consideration of the premises and the
representations and agreements hereinafter contained, the Director and the
Company agree as follows (provided, that any obligation of the Director created
by or arising out of this Lease shall not be a general debt on the part of the
Director or the State but shall be payable solely out of the rentals, revenues
and other income, charges and moneys realized from the use, lease, sale or other
disposition of the Project and any insurance and condemnation awards as herein
provided):
ARTICLE I
DEFINITIONS
Section 1.1. Use of Defined Terms. In addition to the words
and terms elsewhere defined in this Lease or by reference to other instruments,
the words and terms set forth in Section 1.2 hereof shall have the meanings
therein set forth unless the context or use expressly indicates different
meaning or intent. Such definitions shall be equally applicable to both the
singular and plural forms of any of the words and terms therein defined.
Section 1.2. Definitions. As used herein:
"Act" means Chapter 166, Ohio Revised Code, as from time to
time enacted and amended.
"Additional Rent" means the additional rent specified in
Section 4.3 of this Lease.
"Allowable Costs" means "allowable costs" of the Project
within the meaning of the Act.
"Application" means the Application of the Company, dated
August 24, 1992, submitted to the Director requesting assistance under the Act.
"Authorized Company Representative" means the person at the
time designated to act on behalf of the Company by written certificate furnished
to the Director and the Trustee, containing the specimen signature of such
person and signed on behalf of the Company by the President of the Company. Such
certificate may designate an alternate or alternates.
"Bonds" means the State of Ohio State Economic Development
Revenue Bonds (Ohio Enterprise Bond Fund), Series 1993-5 (Foremost Mgmt., Inc.
Project) (Taxable Bonds) authorized by the General Bond Order and the Series
Bond Order.
"Code" means the Internal Revenue Code of 1986, as amended,
and references to the Code and Sections of the Code shall include relevant
regulations and proposed regulations thereunder or under the Internal Revenue
Code of 1954, as amended, and any successor provisions to such Sections,
regulations or proposed regulations.
"Collateral Proceeds Account" means the Series 1993-5
Collateral Proceeds Account, established pursuant to the General Bond Order and
the Series Bond Order, in the Economic Development Bond Service Fund.
"Commitment" means the letter from the Director to the
Company, dated May 6, 1993, pursuant to which the Director, on behalf of the
State, agrees to provide assistance under the Act for the Project.
"Company" means Foremost Mgmt. Inc., a corporation organized
under the laws of the State of Ohio.
"Completion Date" means the date of completion of the Project,
as certified by the Company pursuant to Section 3.4 hereof.
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"Construction Period" means the period between the beginning
of construction of the Project or the date on which this Lease is delivered to
the Director, whichever is earlier, and the Completion Date.
"Controlling Board" means the Controlling Board of the State.
"Cost Certification" means a certification of the Company, as
of a specified date, setting forth in reasonable detail the costs incurred and,
if appropriate, to be incurred in completing the Provision of the Project,
including a detailed listing, by category, of all Allowable Costs.
"Debt Service Account" means the Debt Service Account,
established pursuant to the General Bond Order, in the Economic Development Bond
Service Fund.
"Development Financing Advisory Board" means the Development
Financing Advisory Board of the State.
"Director' means the officer of the State, appointed pursuant
to Section 121.03 of the Ohio Revised Code, who administers and is the executive
head of the Department of Development of the State, the officer who by law
performs the functions of that office, and any person acting on behalf of the
Director of Development of the State pursuant to any delegation permitted by
law.
"Economic Development Bond Service Fund" means the Economic
Development Bond Service Fund created by Section 166.08(S) of the Ohio Revised
Code.
"Eligible Project" means an "eligible project" within the
meaning of the Act.
"Eligible Investments" means Eligible Investments as defined
in the Trust Agreement.
"Event of Default" means any of the events described as an
event of default in Section 9.1 hereof.
"Facilities Establishment Fund" means the Facilities
Establishment Fund created by Section 166.03 of the Ohio Revised Code.
"General Bond Order" means the General Bond Order of the
Treasurer, dated April 11, 1988, as the same may be amended from time to time in
accordance with its provisions or the provisions of the Trust Agreement.
"Governing Instruments" means the articles of incorporation
and code of regulations of the Company.
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"Governmental Authority" means, collectively, the State, any
political subdivision thereof, any municipality, and any agency, department,
commission, board or bureau of any of the foregoing having jurisdiction over the
Project.
"Guarantors" means the Company, Xxxx X. Xxxxxxxxxxxx, the
Sublessee and Jeno, F. and Xxxx Xxxxxxxx (husband and wife). Notwithstanding any
other provision of this Lease, the Sublessee shall be a Guarantor only with
respect to obligations of the Company arising during the term of the Sublease
and Xxxx X. and Xxxx Xxxxxxxx shall be Guarantors only with respect to
obligations of the Company arising during the term of the Sublease and only to
the extent of the amounts due and payable under the Sublease.
"Guaranty" means the Guaranty Agreement of even date herewith
between the Guarantors and the Trustee.
"Independent Engineer" means an engineer or engineering firm
or an architect or architectural firm, qualified to practice the profession of
engineering or architecture under the laws of the State and who or which is not
an officer or a full time employee of the Company or any sublessee of the
Project.
"Interest Rate For Advances" means (a) the interest rate borne
by the Bonds, or (b) a rate which is one percent in excess of the prime or base
interest rate then charged by the Trustee in its lending capacity as a bank,
whichever is greater and lawfully chargeable.
"Issuance Expense Account" means the Series 0000-0 Xxxxxxxx
Expense Account created in the Series Bond Order.
"Lease" means this Lease, as from time to time amended or
supplemented.
"Lease Approval Documents" means, with respect to the Lease,
the Recommendation of the Director to the Development Financing Advisory Board
dated March 25, 1993, the Resolution of the Development Financing Advisory Board
dated March 25, 1993, the Approval of the Controlling Board dated May 3, 1993
and the Commitment.
"Lease Term" or "Term" means the duration of the leasehold
estate created in this Lease as specified in Section 4.2 hereof.
"Net Proceeds," when used with respect to any insurance or
condemnation award, means the gross proceeds from the insurance or condemnation
award with respect to which that term is used remaining after payment of all
expenses incurred in the collection of such gross proceeds.
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"Notice Address" means:
(a) As to the Director: Department of Development
P. O. Xxx 0000
Xxxxxxxx, Xxxx 00000-0000
Attn: Director
and
Squire, Xxxxxxx & Xxxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxx X. Xxxxxx, Esq.
Tel: (000)000-0000
Fax: (000)000-0000
(b) As to the Company: Foremost Mgmt., Inc.
X.X. Xxx 000
000 Xxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Attn.: Xxxx X. Xxxxxxxxxxxx,
President
Tel: (000)000-0000
Fax: (000)000-0000
and Luigino's, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxxxxx,
President
Tel: (000)000-0000
Fax: (000)000-0000
(c) As to the Trustee: The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Corporate Trust Dept.
Tel: (000)000-0000
Fax: (000)000-0000
or such additional or different address, notice of which is given under Section
11.3 hereof.
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"Original Deposit" means Eight Hundred Ten Thousand Dollars
($810,000), which amount is to be deposited in the Primary Reserve Account upon
delivery of this Lease, in accordance with Section 4.5 hereof.
"Permitted Encumbrances" means this Lease and those liens,
charges, easements, conditions, restrictions and encumbrances described on
Exhibit C attached hereto.
"Plans and Specifications" means the plans and specifications
or other appropriate documents describing the Project prepared by or at the
direction of the Company.
"Primary Reserve Account" means the Series 1993-5 Primary
Reserve Account, established pursuant to the General Bond Order and the Series
Bond Order, in the Economic Development Bond Service Fund.
"Project" means the Project Site and the Project Facilities,
together constituting an Eligible Project.
"Project Facilities" means the buildings, structures,
additions and improvements described in Exhibit B attached hereto and more
particularly described in the Plans and Specifications.
"Project Fund" means the Series 1993-5 Project Fund,
established pursuant to the Series Bond Order.
"Project Purposes" means the acquisition of land and the
construction thereon of a facility measuring 149,920 square feet in that
facility to be used for a food processing center, raw material storage and
finished product storage for frozen food processing.
"Project Site" means the real estate described in Exhibit A
attached hereto.
"Provision" means, as applicable, the acquiring, installing,
constructing, reconstructing, rehabilitating, renovating, enlarging, improving,
equipping or furnishing of the Project.
"Series Bond Order" means Series Bond Order R5-93 of the
Treasurer, dated September 20, 1993, as the same may be amended from time to
time in accordance with its provisions or the provisions of the Trust Agreement.
"State" means the State of Ohio.
"Sublease" means the Sublease, dated as of September 21, 1993,
between the Company, as sublessor, and the Sublessee, as sublessee.
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"Sublessee" means Luigino's, Inc., a corporation organized
under the laws of the State of Minnesota.
"Supplement" means the Thirty-Eighth Supplemental Trust
Agreement, dated as of September 1, 1993, between the Treasurer and the Trustee,
of which the Series Bond Order is a part.
"Terms and Conditions to Disbursement" means the terms and
conditions which must be satisfied by the Company with respect to each request
for disbursement of moneys from the Project Fund in order to obtain the
Director's approval of such request for disbursement, which terms and conditions
are set forth on Exhibit D attached hereto.
"Treasurer" means the Treasurer of State of the State, or the
officer who by law performs the functions of that office.
"Trustee" means the trustee at the time serving as such under
the Trust Agreement, initially The Provident Bank, Cincinnati, Ohio.
"Trust Agreement" means the Trust Agreement, dated as of April
1, 1988, between the Treasurer and the Trustee, of which the General Bond Order
is a part, as the same may be amended, modified or supplemented by any
amendments or modifications thereof and any supplements thereto (including, but
not limited to, the Supplement) entered into in accordance with the provisions
thereof.
Section 1.3. Certain Words and References. Any reference
herein to the Director shall include those succeeding to his functions, duties
or responsibilities pursuant to or by operation of law or lawfully performing
such functions. Any reference to a section or provision of the Constitution of
the State or to the Act or to a section, provision or chapter of the Ohio
Revised Code shall include such section, provision or chapter as from time to
time amended, modified, revised, supplemented or superseded, provided that no
such amendment, modification, supplementation, revision or supersession shall
alter the obligation of the Company to pay the rent, Additional Rent and all
other amounts payable hereunder at the times provided herein. All references to
"generally accepted accounting principles" shall have the meaning set forth in
Statement on Auditing Standard No. 69 or any predecessor or successor
pronouncement of the American Institute of Certified Public Accountants in
effect for any applicable fiscal period.
The terms "hereof," "hereby," "herein," "hereto," "hereunder"
and similar terms refer to this Lease; and the term "heretofore" means before,
and the term "hereafter" means after, the date of delivery of this Lease.
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ARTICLE II
DETERMNATION AND REPRESENTATIONS
Section 2.1. Determinations of the Director. Pursuant to the
Act and on the basis of the representations and other information vide by the
Company, the Director has heretofore made certain determinations, as set forth
in the Lease Approval Documents, which are hereby confirmed, and the Director
hereby determines that the financial assistance to be provided by the State
pursuant to this Lease will conform to the requirements of the Act, including
Section 166.02 thereof, and will further implement the purposes of the Act by
creating new jobs or preserving existing jobs and employment opportunities and
improving the economic welfare of the people of the State.
Section 2.2. Representations of the Company. The Company
hereby represents and warrants that:
(a) It is a corporation duly organized, validly existing and
in good standing under the laws of the State of Ohio.
(b) It has full power and authority to execute, deliver and
perform this Lease and the Sublease and to enter into and carry out the
transactions contemplated hereby and thereby. Such execution, delivery and
performance do not, and will not, violate any provision of law applicable to the
Company or the Governing Instruments of the Company and do not, and will not,
conflict with or result in a default under any agreement or instrument cc) which
the Company is a parry or by which it or any of its property or assets is or may
be bound. This Lease and the Sublease have, by proper action, been duly
authorized, executed and delivered and all necessary actions have been taken to
constitute this Lease and the Sublease legal, valid and binding obligations of
the Company.
(c) The provision of financial assistance pursuant to the
Lease Approval Documents and this Lease induced the Company to provide the
Project, thereby creating new jobs or preserving existing jobs and employment
opportunities and improving the economic welfare of the people of the State.
(d) It presently intends that the Project will be used and
operated in a manner consistent with the Project Purposes until the end of the
Lease Term, and the Company knows of no reason why the Project will not be so
operated.
(e) There are no actions, suits or proceedings pending or
threatened against or affecting the Company or the Project which, if adversely
determined, would individually or in the aggregate materially impair the ability
of the Company to perform any of its obligations under this Lease or the
Sublease or adversely affect the financial condition of the Company.
(f) No defaults exist under the Sublease and the Company is
not in default under this Lease or in the payment of any indebtedness for
borrowed money or under any agreement or
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instrument evidencing any such indebtedness, and no event has occurred which by
notice, the passage of time or otherwise would constitute any such event of
default.
(g) Zoning regulations applicable to the Project Site permit
the Provision of the Project thereon in accordance with the Plans and
Specifications and the operation of the Company's business thereon; and all
utilities, including water, storm and sanitary sewer, gas, electric and
telephone, and rights of access to public ways are available or win be provided
to the Project Site in sufficient locations and capacities to meet the
requirements of operating the Project and of any applicable Governmental
Authority.
(h) The Company has made no contract or arrangement of any
kind, other than this Lease, which has given rise to or the performance of which
by the other party thereto would give rise to a lien or claim of lien on the
Project or other collateral covered by this Lease other than the Sublease, and,
except as disclosed in writing to the Director, no materials or labor have
heretofore been supplied to or performed in connection with the Project.
(i) No representation or warranty of the Company contained in
any of the Lease Approval Documents or this Lease, and no statement contained in
any certificate, schedule, list, financial statement or other instrument
furnished to the Director by or on behalf of the Company (including, without
limitation, the Application) contains any untrue statement of a material fact,
or omits to state a material fact necessary to make the statements contained
herein or therein not misleading.
(j) The financial statements of the Company heretofore
delivered to the Director are true and correct, in all respects, have been
prepared in accordance with generally accepted accounting principles
consistently applied, and fairly present the financial condition and the results
of operation of the Company as of the dates thereof. No materially adverse
change has occurred in the financial condition of the Company since the
respective dates thereof.
(k) The Company has conveyed, or caused to be conveyed, to the
Director good and marketable title to a fee simple interest in the Project Site
and Project Facilities, subject in all cases to no lien, charge, easement,
condition, restriction or encumbrance except as created by this Lease and except
for Permitted Encumbrances.
(l) Except as disclosed in Exhibit C to this Lease, there are
no other easements or agreements, including, without limitation, parking
agreements, encroachment agreements, access easements, service agreements, real
estate tax abatement agreements and other similar agreements affecting the
Project.
(m) The Project Site has never, and does not currently
contain, nor is it contaminated by, any hazardous or toxic waste materials in
violation of any applicable environmental laws or regulations, including, but
not limited to, Section 103 of the Comprehensive Environmental Response,
Compensation and Liability Act, 42 USC 9601 et seq. and Chapter 3734
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of the Ohio Revised Code; and no "clean-up" of the Project Site has occurred
pursuant to any applicable federal or state environmental laws, or regulations
which would give rise to (i) liability on the part of any person, entity or
association to reimburse any governmental authority for the costs of any such
"clean-up, " or (ii) a lien or encumbrance on the Project Site.
(n) The Company has prior to or concurrently with the
execution of this Lease entered into the Sublease, a copy of which is attached
hereto as Annex I and which is incorporated herein by this reference, with the
Sublessee.
ARTICLE III
COMMENCEMENT AND COMPLETION OF THE PROJECT
Section 3.1. Provision of the Project. The Director agrees
that he win cause the P_ Provision of the Project activities on the Project Site
in accordance with the Plans and Specifications.
The Director further agrees that he will enter into, or accept
the assignment of, such contracts as the Company may request in order to
effectuate the purposes of this Section.
The Director hereby makes, constitutes and appoints the
Company as his true and lawful agent, with full power of substitution in the
premises and the Company hereby accepts such agency, (a) to acquire and
construct install the Project Facilities or the Project Site in accordance with
the Plans and Specifications, (b) to make, execute, acknowledge and deliver any
contracts, orders, receipts, writings and instructions, either in the name of
the Company solely or as the stated agent for the Director, with any other
persons, firms or corporations, and in general to do all things which may be
requisite or proper, all for acquiring and constructing the Project Facilities
with the same powers and with the same validity as the Director could do if
acting in his own behalf, (c) pursuant to the provisions of this Lease, to pay
all Allowable Costs incurred in the acquisition and construction of the Project
Facilities from funds made available therefor in accordance with this Lease and
(d) to ask, demand, xxx for, xxxx, recover and receive all such sum of money,
debts, dues and other demands whatsoever which may be due, owing and payable to
the Director under the terms of any contract, order, receipt, writing and
instrument in connection with the acquisition and construction of the Project
Facilities, and to enforce the provisions of any contract, agreement,
obligation, bond or other performance security. So long as the Company is not in
default under any of the provisions of this Lease or the Sublease, this
appointment of the Company to act as agent and all authority hereby conferred is
granted and conferred irrevocably to the Completion Date and thereafter until
all activities in connection with the acquisition and construction of the
Project Facilities shall have been completed, and shall not be terminated prior
thereto by act of the Director or the Company or by operation of law.
The Director and the Company each agree that in connection
with the construction of the Project Facilities the acquisition and construction
of the Project Facilities shall proceed with all reasonable dispatch.
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The Company agrees that all wages paid to laborers and
mechanics employed in connection with the construction of the Project Facilities
by the Company or its contractors or subcontractors shall be paid at the
prevailing rates of wages of laborers and mechanics for the class of work called
for by the Project, which wages shall be determined in accordance with the
requirements of Chapter 4115 of the Ohio Revised Code for determination of
prevailing wage rates.
Section 3.2. Deposits to the Project Fund and the Issuance
Expense Account. In order to provide funds for payment of the Allowable Costs of
the Project, the Director, upon delivery of this Lease, shall cause to be
transferred from the Facilities Establishment Fund to the Project Fund the sum
of Seven Million Ninety-Five Thousand Dollars ($7,095,000). Funds loaned to the
Company pursuant to that certain Loan Agreement dated September 21, 1993 by and
between the Director and the Company may be deposited in the Project Fund. In
order to provide funds for payment of costs of issuance of the Bonds, the amount
of Bond proceeds deposited in the Issuance Expense Account shall be One Hundred
Ninety Five Thousand Dollars ($195,000).
This Lease is conditioned upon the satisfaction of one of the
following conditions:
(a) The Company shall provide cash in the amount of One
Million One Hundred Thousand Dollars ($1,100,000) to the Trustee, which the
Trustee shall deposit in the Project Fund;
(b) The Company shall provide to the Trustee an unconditional
and irrevocable letter of credit, acceptable to the Director in the Director's
sole discretion, for the amount of One Million One Hundred Thousand Dollars
($1,100,000), payable to the Trustee and for a term of not less than one year;
(c) The Company shall provide to the Trustee a letter of
commitment, acceptable to the Director in the Director's sole discretion, from
the Sublessee's bank, reserving for not less than one year One Million One
Hundred Thousand Dollars ($1,100,000) of the Sublessee's lines of credit for
payment of Allowable Costs of the Project and authorizing the Trustee to draw
upon such reserved amount of the lines of credit.
Section 3.3. Disbursements from the Project Fund. The
Treasurer has, in the Supplement, authorized and directed the Trustee to
disburse the moneys in the Project Fund for Allowable Costs of the Project.
Except as otherwise provided in this Lease, each payment from the Project Fund
shall be made only upon (A) the written direction of the Authorized Company
Representative, who shall certify with respect to each such payment: (i) that
each item for which payment is requested is an Allowable Cost properly payable
out of the Project Fund in accordance with the terms and conditions of this
Lease and none of the items for which the payment is proposed to be made has
formed the basis for any payment theretofore made from the Project Fund, (ii)
that each item for which payment is proposed to be made is or was necessary in
connection with the Project and (iii) that the Company has received from each
payee appropriate waivers of any mechanics' or other liens (or has provided
indemnification in lieu thereof satisfactory to the Director) and (B) the
written approval of the Director. The Director shall not be required to approve
any
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request for disbursement of moneys from the Project Fund unless the Company has
complied with all of the Terms and Conditions to Disbursement. The Trustee shall
be allowed a reasonable time, not to exceed fifteen (15) days, in view of the
character of any investment Or investments required to be liquidated for the
purpose, for the making of any disbursement from the Project Fund authorized by
this Section.
Section 3.4. Establishment of Completion Date. The Company
covenants that the Completion Date shall occur not later than December 31, 1994.
The Completion Date shall be evidenced to the Director and to the Trustee by a
certificate signed by the Authorized Company Representative stating that, except
for amounts retained by the Trustee in the Project Fund for Allowable Costs of
the Project not then due and payable, (i) Provision of the Project has been
completed in accordance with the Plans and Specifications and all labor,
services, materials and supplies used in such acquisition and installation have
been paid for, (ii) all other facilities necessary in connection with the
Project have been constructed, acquired and installed in accordance with the
plans and specifications therefor and all costs and expenses incurred in
connection therewith have been paid, (iii) all materially significant disputes,
controversies or claims arising out of or in connection with the acquisition and
installation of the Project have been resolved, satisfied or paid in M1, as the
case may be. Notwithstanding the foregoing, such certificate shall state that it
is given without prejudice to any rights against third parties which exist at
the date of such certificate or which may subsequently come into being. The
Company shall also deliver to the Director and to the Trustee a Cost
Certification. Any amount remaining in the Project Fund on the Completion Date,
except for amounts which the Authorized Company Representative certifies to the
Trustee as being required to pay Allowable Costs of the Project not then due and
payable, shall be transferred by the Trustee to the Collateral Proceeds Account.
Section 3.5. Company Required to Pay Acquisition and
Installation Costs in Event Project Fund Insufficient. In tile event the moneys
in the Project Fund available payment of costs of the Project should not be
sufficient to pay the cost thereof in full, the Company agrees, for the benefit
of the Director, to complete the Project and to pay all the portion of the costs
of the Project as may be in excess of the moneys available therefor in the
Project Fund. The Director does not make any warranty, either express or
implied, that the moneys which will be paid into the Project Fund and which
under the provisions of this Lease will be available for payment of the
Allowable Costs of the Project will be sufficient to pay all the costs which
will be incurred in that connection. The Company agrees that if after exhaustion
of the moneys in the Project Fund the Company should pay any portion of the said
costs of the Project pursuant to the provisions of this Section, it shall not be
entitled to any reimbursement therefor from the Director or the Trustee, nor
shall it be entitled to any diminution in or postponement of the rents payable
under Section 4.3 hereof.
Section 3.6. Remedies to Be Pursued Against Contractors and
Subcontractors and their Sureties. In the event of default of any contractor or
subcontractor under any contract made by it in connection with the Project or in
the event of a breach of warranty with respect to any materials, workmanship, or
performance guaranty, the Company will promptly proceed, either separately or in
conjunction with others, to exhaust the remedies of the Company or the Director
against the
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contractor or subcontractor so in default and against each such surety for the
performance of such contract. The Company agrees to advise the Director of the
steps it intends to take in connection with any such default. If the Company
shall so notify the Director, the Company may, in its own name or in the name of
the Director, prosecute or defend any action or proceeding or take any other
action involving any such contractor, subcontractor or surety which the Company
deems reasonably necessary, and in such event the Director hereby agrees to
cooperate fully with the Company and to take all action necessary to effect the
substitution of the Company for the Director in any such action or proceeding.
Any amounts recovered by way of damages, refunds, adjustments or otherwise in
connection with the foregoing, after deduction of expenses incurred in such
recovery, prior to the Completion Date shall be paid into the Project Fund or,
if recovered after the Completion Date and full disposition of the Project Fund
in accordance with Section 3.4 hereof, shall be paid to the Trustee for deposit
in the Collateral Proceeds Account.
Section 3.7. Investment of Project Fund, Primary Reserve
Account or Collateral Proceeds Account. Any moneys held as part of the Project
Fund, the Primary Reserve Account or the Collateral Proceeds Account shall be
invested by the Trustee, upon the written or oral direction (but if oral,
confirmed promptly in writing) of the Authorized Company Representative, in
Eligible Investments.
Section 3.8. Lease as Security Agreement. This Lease is
intended to create and does create in the Director a security interest in the
Project, and in each part thereof, under the Ohio Uniform Commercial Code
(Chapters 1301 to 1309, inclusive of the Ohio Revised Code) as security for the
payment of rent required by Section 4.3 hereof.
Section 3.9. Plans and Specifications; Inspections. At his
option, the Director may retain, at the Company's expense, an architect,
engineer, appraiser or other consultant for the purpose of approving the Plans
and Specifications, verifying costs and performing inspections as Provision of
the Project progresses. Such inspections or approvals of Plans and
Specifications or the Project shall impose no responsibility or liability of any
nature upon the Director, the State, their agents, representatives or designees
nor, without limitation, carry any warranty or representation as to the adequacy
or safety of the Project or any other physical condition or feature pertaining
to the Project. The Company shall, at the request of the Director, make periodic
reports (including, if required, submission of updated Cost Certifications) to
the Director concerning the status of completion and the expenditure of costs in
respect thereof.
The Company may revise the Plans and Specifications from time
to time; provided that no revision shall be made (a) which would change the
Project Purposes to purposes other than those permitted by the Act; (b) without
obtaining, to the extent required by law, the approval of any applicable
Governmental Authority; and (c) without the prior written approval of the
Director if such revision would change the amounts set forth in the most
recently furnished Cost Certification. In any event, all revisions to the Plans
and Specifications shall be promptly filed with the Director.
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Section 3.10. Environmental Assessment. The Director may
retain, at the Company's expense, an independent consultant to perform an
overall environmental assessment and to prepare a report certifying that the
Project Site is not being used for, or threatened by, nor has ever been used
for, or threatened by, the use, generation, treatment, storage or disposal of
any asbestos or asbestos-containing material, petroleum or any hazardous or
toxic chemical, material, substance or waste to which exposure is prohibited,
limited or regulated by any federal, state or local law, regulation, ordinance,
order or directive pertaining to the protection of the environment (collectively
"Environmental Laws") or which, even if not so regulated, is known to pose a
hazard to the health or safety of the occupants of the Project Site or of
property adjacent to the Project Site and that the Company's environmental
management practices are in compliance with all Environmental Laws. The overall
environmental assessment may be done in three phases. The Company represents and
warrants that it has the authority to and hereby does grant to the Director, its
agents, representatives, employees, consultants and contractors the right to
enter the Project Site and to perform such acts as are necessary to conduct such
assessment.
ARTICLE IV
LEASE OF PROJECT, LEASE TERM AND RENTAL
Section 4.1. Lease of Project. The Director, as lessor
hereunder, in consideration of the rents, covenants and agreements herein
stated, agrees to, and does hereby lease to the Company, as lessee hereunder,
and the Company agrees to, and does hereby lease from the Director, subject to
the provisions of this Lease, the Project for the Lease Term.
Section 4.2. Lease Term and Possession. The Lease Term shall
commence on the date of delivery of this Lease and, subject to ea termination as
provided herein, shall end on June 2, 2013. The Director agrees to deliver to
the Company full possession of the Project (subject to Section 7.2 hereof) at
the commencement of the Lease Term and the Company agrees to accept possession
of the Project upon such delivery. The Director covenants xxx agrees that it
will not take any action, other than pursuant to Article IX of this Lease, to
prevent the Company from having quiet and peaceable possession and enjoyment of
the Project during the Lease Term and will, at the request of the Company, and
at the Company's cost, cooperate with the Company in order that the Company may
have quiet and peaceable possession and enjoyment of the Project. This provision
shall not be construed to require cooperation by the Director with the Company
in any labor dispute.
Section 4.3. Rents and Other Amounts Payable. Not later than
the fifteenth (15th) day of the months of October 1993 and November 1993, the
Company shall pay as rent an amount equal to one-half (1/2) of the amount of
interest on the Bonds which will be payable on December 1, 1993. Not later than
the fifteenth (15) day of the months of December 1993, January 1994 and February
1994, the Company shall pay as rent an amount equal to one-third (1/3) of the
amount of interest on the Bonds which will be payable on March 1, 1994. Not
later than the fifteenth (15th) day of the months of March 1994, April 1994 and
May 1994, the Company shall pay as rent an amount equal to one-third (1/3) of
the amount of interest on the Bonds which will be payable on June
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1, 1993. Not later than the fifteenth (15th) day of each month commencing June
15, 1994 and continuing thereafter until the principal of and interest on the
Bonds shall have been fully paid or provision for the payment thereof shall have
been made in accordance with the Trust Agreement, the Company shall pay as rent
an amount equal to the sum of (i) one-third (1/3) of the amount of interest on
the Bonds which will be payable on the next succeeding date on which such
interest is due to be paid, and (ii) one-third (1/3) of the amount of principal
of the Bonds which will be payable (whether at stated maturity or by redemption)
on the next succeeding date on which such principal is due to be paid. The
Company shall receive a credit against the rent payment due in the month of
February of each year to the extent and in the manner provided in the General
Bond Order and the Series Bond Order. If the Company fails to make any payment
required by this paragraph on the due date thereof, the Trustee shall, to the
extent that funds are available therefor, transfer to the Debt Service Account
an amount equal to such payment from the Collateral Proceeds Account and, if the
balance in the Collateral Proceeds Account is insufficient, from the Primary
Reserve Account.
If moneys are transferred from the Primary Reserve Account or
the Collateral Proceeds Account to the Debt Service Account pursuant to the
provisions of Section 14 of the General Bond Order, and if no Event of Default
is then existing, the Company shall receive a credit against rental payments
payable hereunder, in inverse order of their maturity, in an amount equal to the
amount so transferred.
If no Event of Default is then existing and if the balance in
the Primary Reserve Account is greater than or equal to the aggregate amount of
rental payments to become due and payable during the remaining term of this
Lease, the Company may direct the Trustee to apply monies in the Primary Reserve
Account to monthly rental payments as they become due and, in such case and
notwithstanding the provisions of Section 4.5 hereof, the Company shall not be
required to deliver moneys to the Trustee to restore the balance in the Primary
Reserve Account to an amount equal to the Original Deposit.
Not later than the fifteenth (15th) day of each month,
Commencing October 15, 1993, the Company shall pay to the Trustee (i) an amount
equal to one twelfth (1/12) of the Trustee's annual administrative fee (which
annual administrative fee shall be calculated at a rate equal to the sum of (A)
$1,200 per million dollars for each million dollars or any part thereof of the
first five million dollars of outstanding principal amount of Bonds, and (B)
$700 per million dollars for each million dollars or any part thereof of the
next five million dollars of outstanding principal amount of Bonds, and (C) $600
per million dollars for each million dollars or any part thereof of outstanding
principal amount of Bonds in excess of ten million dollars), constituting the
fee of the Trustee in connection with its administration of the Project Fund,
the Primary Reserve Account and the Collateral Proceeds Account, and (ii) an
amount equal to .0104167% of the outstanding principal amount of the Bonds
("Additional Rent"). The Company and the Director acknowledge and agree that the
Additional Rent is intended to reimburse the Department of Development of the
State for a portion of the cost of administering the Ohio Enterprise Bond Fund
program.
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The Company also agrees to pay to the Director reasonable
expenses of the Director related to the Project and requested by the Company or
required by this Lease or the Trust Agreement, or incurred in enforcing the
provisions of this Lease or the Trust Agreement and which are not otherwise
required to be paid by the Company under the terms of this Lease, including,
without limitation, the costs of the overall environmental assessment and report
described in Section 3.10 of this Lease.
In the event Company should fail to make any of the payments
required in this Section 4.3, the item or installment so in default shall
continue as an obligation of the Company until the amount in default shall have
been fully paid, and the Company agrees to pay the same with interest thereon at
the rate of the Interest Rate for Advances. If any payment required by the first
paragraph of this Section 4.3 is not made by the first day of the month
following the month in which such payment is due, the Company shall pay, in
addition to such payment, a late payment charge of five percent (5 %) of the
amount of such payment.
Section 4.4. Place of Payments. The rent provided for in the
first paragraph of Section 4.3 hereof and the late payment charge provided for
in the last paragraph of Section 4.3 hereof shall be paid directly to the
Trustee at its principal corporate trust office for the account of the Director,
and the Trustee shall deposit such payments in the Debt Service Account.
Additional Rent shall be paid to the Trustee, who shall pay such amounts to the
Director, not less frequently than monthly, for deposit in the First Half
Account (if received by the Director between January 1 and June 30) or the
Second Half Account (if received by the Director between July I and December 31)
created in the Trust Agreement. The additional payments to be made to the
Director under Section 4.3 hereof shall be paid directly to the Director for use
as provided in such Section.
Section 4.5. Primary Reserve Account. Upon delivery of this
Lease and in accordance with the General Bond Order and the series Bond Order,
the Company shall deliver or cause to be delivered to the Trustee for deposit or
credit to the Primary Reserve Account a sum of money equal to the Original
Deposit (which sum may, to the extent provided for in the Series Bond Order, be
derived from proceeds of the sale of the Bonds). In accordance with the
provisions of the General Bond Order and the Series Bond Order, the Trustee
shall transfer moneys from the Primary Reserve Account to the Debt Service
Account if (a) the Company shall have failed to make a rent payment required by
the first paragraph of Section 4.3 hereof, and (b) the balance in the Collateral
Proceeds Account is insufficient to provide funds for such transfer.
If, as a result of a transfer described in the immediately
preceding paragraph, the balance in the Primary Reserve Account is less than the
Original Deposit, the Trustee shall promptly notify the Company, by telephone
and confirmed in writing, of the amount of such deficiency, and the Company
shall, not later than ten (10) days after receipt of such notice, deliver to the
Trustee for deposit or credit to the Primary Reserve Account moneys in the
amount of such deficiency.
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Pursuant to Section 14 of the General Bond Order, the Trustee
shall, under the circumstances described in said Section 14, transfer moneys
from the Primary Reserve Account to the Debt Service Account.
Section 4.6. Obligation of the Company Hereunder
Unconditional. The obligations of the Company to make the payments required in
Section 4.3 and Section 4.5 hereof and to perform and observe the other
agreements on its part contained herein shall be absolute and unconditional and
until such time as the principal of and interest and premium, if any, on the
Bonds shall have been fully paid or provision for the payment thereof shall have
been made in accordance with the Trust Agreement, the Company (i) will not,
subject to the provisions of Section 8.6 hereof, suspend or discontinue any
payments provided for in Section 4.3 or Section 4.5 hereof, (ii) will perform
and observe all of its other agreements contained in this Lease, and (iii)
except as provided in Article X hereof, will not terminate the Lease for any
cause including, without limiting the generality of the foregoing, failure to
complete the Project, any acts or circumstances that may constitute failure of
consideration, destruction of or damage to the Project, commercial frustration
of purpose, any change in the tax or other laws or administrative rulings of or
administrative actions by the United States of America or the State or any
political subdivision of either, or any failure of the Director to perform and
observe any agreement, whether expressed or implied, or any duty, liability or
obligation arising out of or connected with this Lease or the Trust Agreement.
Nothing contained in this Section shall be construed to release the Director
from the performance of any of the agreements on his part contained in this
Lease; and in the event Director should fail to perform any such agreement on
his part, the Company may institute such action against the Director as the
Company may deem necessary to compel performance or recover its damages for
nonperformance so long as such action shall not impair the agreements on the
part of the Company contained in the next preceding sentence. The Company may,
however, at its own cost and expense and in its own name or in the name of the
Director, prosecute or defend any action or proceeding or take any other action
involving third persons which the Company deems reasonably necessary in order to
secure or protect its right of possession, occupancy and use hereunder, and in
such event the Director hereby agrees to cooperate fully with the Company and to
take all action necessary to effect the substitution of the Company for the
Director in any such action or proceeding if the Company shall so request. This
provision shall not be construed to require cooperation by the Director with the
Company in any labor dispute.
Section 4.7. Letter of Credit Required. The Company shall
provide to the Director an irrevocable and unconditional letter of credit,
acceptable to the Director in the Director's sole discretion, for the amount of
$3,000,000, payable to the Trustee and for a term of not less than three (3)
years. If any Event of Default occurs, the Trustee shall, at the direction of
the Director, draw on said letter of credit. At any time after thirty (30) days
prior to the expiration of said letter of credit, the Trustee shall at the
direction of the Director draw on said letter of credit unless thirty (30) days
prior to the expiration of said letter of credit or any renewal or replacement
thereof:
(a) said letter of credit is renewed for a term of not less
than one year;
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(b) the Company provides to the Director another unconditional
and irrevocable letter of credit, acceptable to the Director in the Director's
sole discretion, payable to the Trustee, in the amount of $1,500,000, for a term
of not less than one year and upon which the Trustee may draw subject to the
same conditions as the original letter of credit;
(c) the Company provides to the Trustee cash in the amount of
$1,500,000;
(d) the Bonds are prepaid in accordance with this Lease and
the Trust Agreement; or,
(e) the Sublessee (1) assumes this Lease or extends the
Sublease to the term of this Lease and (2) has had positive net income,
excluding any extraordinary earnings or losses, for the fiscal years ending in
1993, 1994 and 1995, as reflected in each case on the income statement of the
Sublessee furnished in accordance with Section 7.5 of the Sublease and as
determined in accordance with generally accepted accounting principles applied
on a basis consistent with that of prior years.
Any amount drawn on a letter of credit by the Trustee or any cash provided to
the Trustee pursuant to this Section 4.7 shall be deposited in the Collateral
Proceeds Account. Provided that one or more of the foregoing conditions (b), (c)
or (e) of this Section 4.7 have been satisfied, and provided that no Event of
Default or event which would with notice or the lapse of time or both constitute
an Event of Default hereunder or under the Bonds has occurred and is continuing,
the remaining balance of any amount deposited to the Collateral Proceeds Account
pursuant to this Section 4.7 shall be paid to the Company by the Trustee from
the Collateral Proceeds Account in accordance with written instruction from the
Director, which instruction may be issued in the Director's sole discretion.
Section 4.8. Assignment of Sublease. The Company shall assign
all its rights and interest in the Sublease to the Director as security for the
payment of rent required by Section 4.3 hereof by the execution of an Assignment
in conformance with the Form of Assignment attached hereto as Annex II and
incorporated herein by this reference. This Lease is conditioned upon the
Sublessee's consent to such assignment by the execution of a Consent in
conformance with the Form of Consent attached hereto as Annex H and incorporated
herein by this reference.
ARTICLE V
MAINTENANCE, TAXES AND INSURANCE
Section 5.1. Maintenance and Modifications of Project by the
Company. The Company agrees that during the Lease Term it will keep the Project
including all appurtenances thereto in good repair and good operating condition
at its own cost.
The Company shall have the privilege of making additions,
modifications or improvements to the Project from time to time as it, in its
discretion, may deem to be desirable for
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its uses and purposes, the cost of which additions, modifications and
improvements shall, be paid by the Company, and the same (except any machinery
or equipment installed pursuant to Section 8.7 hereof) shall be the property of
the Director and be included under the terms of this Lease as part of the
Project.
Section 5.2. Indemnification by the Company. The Company shall
indemnify and hold the Director, the Treasurer and the Trustee (including any
member, officer, director or employee thereof) (collectively, the "Indemnified
Parties") harmless against any and all claims, asserted by or on behalf of any
person, firm or corporation, private or public, arising or resulting from, or in
any way connected with (i) financing, installation, operation, use or
maintenance of the Project (including, but not limited to, claims relating to
compliance with Chapter 4115, Ohio Revised Code), (ii) any act, failure to act
or misrepresentation by any person, firm, corporation or governmental authority
in connection with the issuance, sale or delivery of the Bonds and (iii) any
act, failure to act or misrepresentation by any other Indemnified Party in
connection with, or in the performance of any obligation related to the
issuance, sale and delivery of the Bonds or under this Lease or the Trust
Agreement, including all liabilities, costs and expenses, including reasonable
counsel fees, incurred in any action or proceeding brought by reason of any such
claim. In the event any action or proceeding is brought against any Indemnified
Party by reason of any such claim, such Indemnified Party will promptly give
written notice thereof to the Company. In case such notice shall be so given,
the Company shall be entitled to participate at its own expense in the defense
or, if it so elects, to assume at its own expense the defense of such claim,
suit, action or proceeding, in which event such defense shall be conducted by
counsel chosen by the Company and reasonably satisfactory to such Indemnified
Party against whom such action or proceeding is pending; but if the Company
shall elect not to assume such defense, it shall reimburse such Indemnified
Party for the reasonable fees and expenses of any counsel retained by such
Indemnified Party. If at any time the Indemnified Party becomes dissatisfied
with the selection of counsel by the Company, a new mutually agreeable counsel
shall be retained at the expense of the Company. Each Indemnified Party agrees
that the Company shall have the sole right to compromise, settle or conclude any
claim, suit, action or proceeding against any of the Indemnified Parties.
Notwithstanding the foregoing, each Indemnified Party shall have the right to
employ counsel in any such action at its own expense; and provided further that
such Indemnified Party shall have the right to employ counsel in any such action
and the fees and expenses of such counsel shall be at the expense of the Company
if: (i) the employment of counsel by such Indemnified Party has been authorized
by the Company, (ii) there reasonably appears that there is a conflict of
interest between the Company and the Indemnified Party in the conduct of the
defense of such action (in which case the Company shall not have the right to
direct the defense of such action on behalf of the Indemnified Party) or (iii)
the Company shall not in fact have employed counsel to assume the defense of
such action. The Company shall also indemnify the Indemnified Parties from and
against all costs and expenses, including reasonable counsel fees, lawfully
incurred in enforcing any obligations of the Company under this Lease. Anything
herein to the contrary notwithstanding, the foregoing agreements by the Company
to indemnify any Indemnified Party shall not apply to grossly negligent acts or
omissions or acts or omissions of willful misconduct on the part of such
Indemnified Party. The Company shall not be liable for any settlement of any
action or claim effected without its consent. The obligations of the
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Company under this Section shall survive the termination of this Lease and shall
be in addition to any other rights, including without limitation, rights to
indemnity which any Indemnified Party may have at law, in equity, by contract or
otherwise.
Section 5.3. Taxes, Other Governmental Charges and Utility
Charges. The Company will pay, as the same respectively become due, all taxes,
assessments, whether general or special, and governmental charges of any kind
whatsoever that may at any time be lawfully assessed or levied against or with
respect to the Project or any machinery, equipment or other property installed
or brought by the Company thereon (including, without limiting the generality of
the foregoing, any taxes levied upon or with respect to the receipts, income or
profits of the Director from the Project which, if not paid, may become or be
made a lien on the Project or a charge on the revenues and receipts therefrom),
and all utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Project, provided, that with respect to special
assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the Company shall be obligated to pay only
such installments as are required to be paid during the Lease Term.
Section 5.4. Insurance Required. The Company or Sublessee
shall insure the Project in an aggregate amount equal to the replacement cost of
the Project, but in any event not less than the principal amount of Bonds
outstanding from time to time, against loss or damage by fire, boiler explosion,
as well as such other risks as are covered by the endorsement commonly known as
"extended coverage", plus vandalism and malicious mischief, in insurance
companies authorized to issue such policies in the State. Any insurance policy
maintained by the Company pursuant to this Section 5.4 may provide that the
policy does not cover the first $25,000 or less of loss, or such greater amount
as may (with due regard to insurance practices from time to time current with
respect to buildings similar to the Project Facilities) be approved in writing
by the Director, with the result that the Company is its own insurer to that
extent. Any return of insurance premium or dividends based upon such premium
shall be due and payable solely to the Company unless such premium shall have
been paid by the Director or Trustee.
As an alternative to the above, the Company may insure the
Project under a blanket insurance policy or policies which cover not only the
Project but other properties.
Section 5.5. Additional Provisions Respecting Insurance. Any
insurance policy issued pursuant to Section 5.5 hereof shall be so written or
endorsed as to make losses, if any, adjustable by the Company and payable to the
Company and the Trustee, for the account of the Director; provided, any such
insurance policy may be so written or endorsed as to make losses not in excess
of $25,000 for each occurrence payable directly to the Company as hereinafter
provided in Section 6.1. Each insurance policy provided for in Section 5.5 and
Section 5.8 hereof shall contain a provision to the effect that the insurance
company shall not cancel the same without first giving written notice thereof to
the Director and the Trustee at least thirty days in advance of such
cancellation, and the Company shall deliver to the Director and the Trustee
duplicate copies or
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certificates of insurance pertaining to each such policy of insurance procured
by the Company and shall keep such duplicate copies or certificates up to date.
Section 5.6. Application of Net Proceeds of Insurance. The Net
Proceeds of the insurance carried pursuant to the provisions of this Lease shall
be applied as follows: (i) the Net Proceeds of the insurance required in Section
5.5 hereof shall be applied as provided in Section 6.1 hereof, and (H) the Net
Proceeds of the insurance required in Section 5.8 hereof shall be applied toward
extinguishment or satisfaction of the liability with respect to which such
insurance proceeds 'may be paid.
Section 5.7. Public Liability Insurance. The Company agrees
that it will carry public liability insurance with refer ace to its operations
at the Project with one or more reputable insurance companies duly qualified to
do business in the State, in minimum amounts of $1,000,000 for the death of or
personal injury to one person and $3,000,000 for personal injury or death for
each occurrence in connection with the Project and $500,000 for property damage
of any occurrence in connection with the Project, with a deductible not to
exceed $10,000. The Director and the Trustee shall be made additional insureds
under such policies. The insurance provided by this Section 5.8 may be by
blanket insurance policy or policies.
Section 5.8. Advances. In the event the Company shall fad to
maintain the full insurance coverage required by this Lease or shall fad to keep
the Project in good repair and operating condition, the Director or the Trustee
may (but shall be under no obligation to) take out the required policies of
insurance and pay the premiums on the same or may make such repairs or
replacements as are necessary and provide for payment thereof, and all amounts
so advanced therefor by the Director shall become an additional obligation of
the Company to the Director, which amounts, together with interest thereon at
the Interest Rate for Advances from the date thereof, the Company agrees to pay
on demand.
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.1. Damage and Destruction. If prior to full payment
of the Bonds (or provision for payment thereof having been made in accordance
with the provisions of the Trust Agreement), the Project Facilities shall be
damaged or partially or totally destroyed by fire, flood, windstorm, or other
casualty at any time during the Lease Term, there shall be no abatement or
reduction in the rent payable by the Company under this Lease, and, to the
extent that the claim for loss resulting from such damage or destruction is not
greater than $50,000 the Company (i) will promptly repair, rebuild, replace or
restore the property damaged or destroyed with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by the Company and as will not make the Project unsuitable for the
Project Purposes, and (ii) will apply for such purpose so much as may be
necessary of any Net Proceeds of insurance policies resulting from claims for
such losses not in excess of $50,000 as well as any additional
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moneys of the Company necessary therefor. All Net Proceeds of insurance
resulting from claims for any such loss not in excess of $50,000 shall be paid
to the Company.
If prior to fall payment of the Bonds (or provision for
payment thereof having been made in accordance with the provisions of the Trust
Agreement), the Project Facilities shall be destroyed (in whole or in part) or
damaged by fire, flood, windstorm or other casualty to such extent that the
claim for loss resulting from such destruction or damage is in excess of $50,000
the Company shall promptly give written notice thereof to the Director and the
Trustee. All Net Proceeds of insurance policies resulting from claims for such
losses in excess of $50,000 shall be paid to and held by the Trustee in the
Collateral Proceeds Account, whereupon, unless the Company shall have elected to
exercise its option to purchase the Project pursuant to the provisions of
Section 10.2(a) of this Lease, (i) the Company will proceed to repair, rebuild,
replace or restore the property damaged or destroyed with such changes,
alterations and modifications (including the substitution and addition of other
property) as may be desired by the Company and as will not make the Project
unsuitable for tile Project Purposes, and (h) the Trustee will disburse moneys
in the Collateral Proceeds Account to or upon the direction of the Company for
payment of the costs of such repair, rebuilding, replacement or restoration,
either on completion thereof or, if the Company shall so request, as the work
progresses. Any such disbursements shall be made pursuant to the procedures set
forth in Section 3.3 of this Lease for disbursement of moneys in the Project
Fund, including, but not limited to, the requirement that the Company obtain the
written approval of the Director with respect to each disbursement. In the event
the moneys in the Collateral Proceeds Account are not sufficient to pay in MI
the costs of such repair, rebuilding, replacement or restoration, the Company
nonetheless will complete the work and pay the costs thereof from its own
resources. The Company shall not, by reason of the payment of such excess costs,
be entitled to any reimbursement from the Director or any diminution in or
postponement of the rents payable under Section 4.3 of this Lease.
Section 6.2. Eminent Domain. In the event that title to or the
temporary use of the Project, or any part thereof, shall be taken under the
exercise of the power of eminent domain by any governmental body or by any
person, firm or corporation acting under governmental authority, there shall be
no abatement or reduction in the rent payable by the Company under this Lease
during the balance of the Lease Term, and any Net Proceeds received from any
award made in such eminent domain proceedings shall be paid to and deposited by
the Trustee in the Collateral Proceeds Account and shall be applied by the
Director or the Company in one or more of the following ways as shall be
directed in writing by the Authorized Company Representative:
(a) to the replacement or restoration of the Project to
substantially the same condition as existed prior to the exercise of said power
of eminent domain; or
(b) to the redemption of all of the Bonds pursuant to the
Trust Agreement, together with accrued interest thereon to the date of
redemption upon exercise of the option to purchase authorized by Section 10.2(b)
of this Lease.
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Within ninety days from the date of entry of a final order in an eminent domain
proceeding granting condemnation, the Authorized Company Representative shall
direct the Director and the Trustee in writing as to which of the ways specified
in this Section the Company elects to have the Net Proceeds of the condemnation
award applied. Any balance of the Net Proceeds remaining after such application
shall be retained in the Collateral Proceeds Account.
The Director shall cooperate fully with the Company in the
handling and conduct of any prospective or pending condemnation proceedings with
respect to the Project or any part thereof and, to the extent it may lawfully do
so, will permit the Company to litigate in any such proceedings in its own name
or in the name and on behalf of the Director (except as such proceedings are
instigated by the Director, in which event the Company shall have the right to
proceed as if it were the owner of the Project). In no event will the Director
voluntarily settle or consent to the settlement of any prospective or pending
condemnation proceedings with respect to the Project or any part thereof without
the written consent of the Company.
Section 6.3. Condemnation of Company Owned Property. The
Company shall be entitled to the Net Proceeds of any condemnation award or
portion thereof made for damages to or takings of its own property.
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. No Warranty of Condition or Suitability. The
Director does not make any warranty, either express or implied, as to the
condition, workmanship, merchantability or capacity of the Project or any part
thereof or as to its or any part's suitability or operation for the Project
Purposes.
At any time, upon request of the Company, so long as it is not
in default hereunder, the Director will assign to the Company all warranties and
guarantees of all contractors, subcontractors, manufacturers, suppliers and
engineers for the furnishing of labor, materials, supervision or design in
connection with the Project and any rights or causes of action against any of
the foregoing.
Section 7.2. Right of Access to the Project. The Company
agrees that the Director and any of the Director's duly authorized agents shall
have the right at all reasonable times to xxxx upon the Project and to examine
and inspect the Project. The Company further agrees that the Director and the
Director's duly authorized agents shall have such rights of access to the
Project as may be reasonably necessary to cause to be completed the construction
provided for in Section 3.1 hereof, and thereafter for the proper maintenance,
of the Project in the event of failure by the Company to perform its obligations
under Sections 3.1 or 5.1 hereof.
Section 7.3. Granting Easements. If the Company is not in
default under this Lease, the Director at the request of the Company shall grant
easements, licenses, rights-of-way
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(including the dedication of public highways) and other rights or privileges in
the nature of easements with respect to Project Site, or may release existing
easements, licenses, rights-of-way and other rights of privileges with or
without consideration, and the Director agrees that it shall execute and deliver
any instrument necessary or appropriate to grant or release" any such easement,
license, right-of-way or other right or privilege upon receipt of: (a) a copy of
the instrument of grant or release; (b) a written application signed by the
Authorized Company Representative requesting such instrument; and (c) a
certificate executed by an Independent Engineer that in his opinion such grant
or release will not make the Project unsuitable for the Project Purposes.
Section 7.4. No Abatement or Diminution of Rent. No release or
grant effected under the provisions of Section 7.3 of this Lease shall entitle
Company to any abatement or diminution of the of the rents payable under Section
4.3 hereof.
Section 7.5. Deposit of Moneys. Any moneys received by
Director pursuant to Section 7.3 of this Lease shall immediately be paid to the
Trustee for deposit in the Collateral Proceeds Account.
Section 7.6. Information Concerning Operations. At the request
of the Director and, in any event, within ninety (90) days after the last day of
each fiscal year of the Company beginning with the fiscal year in which the
Completion Date occurs, the Company shall furnish to the Director a report on
Project operations setting forth the total number of employees then employed by
the Company at the Company Facilities and such other employment, economic and
statistical data concerning the Project as may reasonably be requested by the
Director.
Section 7.7. Affirmative Covenants of the Company. Throughout
the Term of this Lease, the Company shall:
(a) Taxes and Assessments. Pay and discharge promptly, or
cause to be paid and discharged promptly, when due and payable, all taxes,
assessments and governmental charges or levies imposed upon it, its income or
any of its property, or upon any part thereof, as well as all claims of any kind
(including claims for labor, materials and supplies) which, if unpaid, might by
law become a lien or charge upon its property. Nothing in this Section shall
require the Company to pay or discharge any such tax, assessment, governmental
charge or levy so long as the validity thereof shall be contested in good faith
and by appropriate legal proceedings, provided that the Company shall have
delivered to the Director an opinion of counsel, selected by the Company and
reasonably acceptable to the Director, to the effect that nonpayment of any such
items during the pendency of such contest will not adversely affect the
Director's right, title or interest in the Project.
(b) Maintain Existence. Do or cause to be done all things
necessary to preserve and keep ii full force and effect its existence and its
material rights and franchises.
(c) Maintain Property. Maintain and keep its property in good
repair, working order and condition, and from time to time make all repairs,
renewals and replacements which, in
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the opinion of the Company, are necessary and proper so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; provided, however, that nothing in this subsection (c) shall
prevent the Company from selling or otherwise disposing of any property
whenever, in the good faith judgment of the Company, such property is obsolete,
worn out, without economic value or unnecessary for the conduct of the business
of the Company.
(d) Maintain Insurance. Keep all of its insurable property
insured against loss or damage by fire and other risks, maintain public
liability insurance against claims r personal injury, death, or property damage
suffered by others upon, in or about any premises occupied by the Company; and
maintain all such worker's compensation or similar insurance as may be required
under the laws of any state or jurisdiction in which it may be engaged in
business. All insurance for which provision has been made in this subsection (d)
shall be maintained against such risks and in at least such amounts (but subject
to such deductibles) as such insurance is usually carried by persons engaged in
the same or similar businesses, and all insurance herein provided for shall be
effected and maintained in force under a policy or policies issued by insurers
of recognized responsibility, except that it may effect worker's compensation or
similar insurance in respect of operations in any state or other jurisdiction
either through an insurance fund operated by such state or other jurisdiction or
by causing to be maintained a system or systems of self-insurance which is in
accordance with applicable law.
(e) Furnish Information. Furnish to the Director:
(i) Quarterly Reports. Within forty-five (45) days after the
end of each quarterly period of each fiscal year of the Company, the balance
sheet of the Company as at the end of such quarterly period, together with
related statements of income and retained earnings (or accumulated deficit) and
changes in financial position for such quarterly period, setting forth in
comparative form the corresponding figures as at the end of or for the
corresponding quarter of the previous fiscal year, all in reasonable detail,
prepared in accordance with generally accepted accounting principles applied on
a consistent basis, subject to usual year-end audit adjustments.
(ii) Annual Reports. Within ninety (90) days after the last
day of each fiscal year of the Company, a copy of its audit report containing a
balance sheet of the Company as at the end of such fiscal year, together with
related statements of income and retained earnings (or accumulated deficit) and
changes in financial position for such fiscal year, setting forth in comparative
form the corresponding figures as at the end of or for the previous fiscal year,
all in reasonable detail and all examined by and accompanied by a review letter
or opinion of its independent certified public accountants to the effect that
such financial statements were prepared in accordance with generally accepted
accounting principles consistently applied, and present fairly the Company's
financial position at the close of such period and the results of its operations
for such period. In addition, the Company shall provide to the Director, along
with such audit report, a certificate from its auditors which states that the
Company has complied with all financial covenants which are set forth in Section
7.8(d) hereof, or, as the case may be, disclose any defaults thereunder.
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(iii) Certificate; No Default. With the financial reports
required to be furnished under this Section, a certificate of the Company's
chief executive officer or chief financial officer stating that (a) no Event of
Default has occurred and is continuing and no event or circumstance which would
constitute an Event of Default, but for the requirement that notice be given or
time elapse or both, has occurred and is continuing, or, if such an Event of
Default or such event or circumstance has occurred and is continuing, a
statement as to the nature thereof and the action which the Company proposes to
take with respect thereto, and that (b) no action, suit or proceeding by it or
against it at law or in equity, or before any governmental instrumentality or
agency, is pending or threatened, which, if adversely determined, would
materially impair the right or ability of the Company to carry on the business
which is contemplated in connection with the Project or would materially impair
the right or ability of the Company to perform the transactions contemplated by
this Lease or would materially and adversely affect its business, operations,
assets or condition, all as of the date of such certificate, except as disclosed
in such certificate.
(iv) Other Information. Such other information respecting the
business, properties or the condition or operations, financial or otherwise, Of
the Company as the Director may reasonably request, provided that reasonable
provision is made for protecting proprietary information of the Company.
(f) Deliver Notice. Forthwith upon learning of any of the
following, deliver written notice thereof to the Director, describing the same
and the steps being taken by the Company with respect thereto:
(i) the occurrence of an Event of Default or an event or
circumstance which would constitute an Event of Default, but for the requirement
that notice be given or time elapse or both, or
(ii) any action, suit or proceeding by it or against it at law
or in equity, or before any governmental instrumentality or agency, instituted
or threatened which, if adversely determined, would materially impair the right
or ability of the Company to carry on the business which is contemplated in
connection with the Project or would materially impair the right or ability of
the Company to perform the transactions contemplated by this Lease, or would
materially and adversely affect its business, operations, assets or condition,
or
(iii) the occurrence of a Reportable Event, as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), under, or
the institution of steps by the Company to withdraw from, or the institution of
any steps to terminate, any employee benefit plan as to which the Company may
have liability.
(g) Inspection Rights. At any reasonable time and from time to
time, permit the Director, or any agents or representatives thereof, to examine
and make copies of and abstracts from the records and books of account of, and
visit the properties of, the Company and discuss the general business affairs of
the Company with any of its officers; provided, however, that the Company
-26-
reserves the right to restrict access to any of its facilities in accordance
with reasonably adopted procedures relating to safety and security.
(h) Zoning, Planning and Environmental Regulations. The
Provision of the Project will be completed and the Project and the Company
Facilities will be operated and maintained in the manner as to conform with all
applicable zoning, planning, building, environmental and other applicable
governmental regulations (or variances therefrom) imposed by any Governmental
Authority and as to be consistent with the purposes of the Act.
(i) Use of Project Fund Moneys. All moneys disbursed from the
Project Fund (except for any amounts transferred to the Collateral Proceeds
Account pursuant to the terms of this Lease) shall be used for the payment of
Allowable Costs relating to Provision of the Project. No part of any such moneys
shall be knowingly paid to or retained by the Company or any, officer,
shareholder, director or employee of the Company as a fee, kick-back or
consideration of any type, except as previously disclosed to the Director in
writing. The Company has no identity of interest with, or interest in, the
general contractor or any architect, subcontractor, laborer or materialman
performing work or services or supplying materials in connection with the
Provision of the Project, except as previously disclosed to the Director in
writing.
(j) Sublessee. Cause the Sublessee, pursuant to the Sublease,
to:
(i) Taxes and Assessments. Pay and discharge promptly, or
cause to be paid and discharged promptly, when and payable, all taxes,
assessments and governmental charges or levies imposed upon it, its income or
any of its property, or upon any part thereof, as well as all claims of any kind
(including claims for labor, materials and supplies) which, if unpaid, might by
law become a lien or charge upon its property. Nothing in this Section shall
require the Sublessee to pay or discharge any such tax, assessment, governmental
charge or levy so long as the validity thereof shall be contested in good faith
and by appropriate legal proceedings, provided that the Sublessee shall have
delivered to the Director an opinion of counsel, selected by the Sublessee and
reasonably acceptable to the Director, to the effect that nonpayment of any such
items during the pendency of such contest will not adversely affect the
Director's right, title or interest in the Project.
(ii) Maintain Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect its existence and its
material rights and franchises.
(iii) Maintain Property. Maintain and keep its property in
good repair, working order and condition, and rom time to time make all repairs,
renewals and replacements which, in the opinion of the Sublessee, are necessary
and proper so that the business carried on in connection therewith may be
properly and advantageously conducted at all times; provided, however, that
nothing in this subsection (iii) shall prevent the Sublessee from selling or
otherwise disposing of any property whenever, in the good faith judgment of the
Sublessee, such property is obsolete, worn out, without economic value or
unnecessary for the conduct of the business of the Sublessee.
-27-
(iv) Maintain Insurance. Keep all of its insurable property
insured against loss or damage by fire and other risks, maintain public
liability insurance against claims for personal injury, death, or property
damage suffered by others upon, in or about any premises occupied by the
Sublessee; and maintain all such worker's compensation or similar insurance as
may be required under the laws of any state or jurisdiction in which it may be
engaged in business. All insurance for which provision has been made in this
subsection (iv) shall be maintained against such risks and in at least such
amounts (but subject to such deductibles) as such insurance is usually carried
by persons engaged in the same or similar businesses, and all insurance herein
provided for shall be effected and maintained in force under a policy or
policies issued by insurers of recognized responsibility, except that it may
effect worker's compensation or similar insurance in respect of operations in
any state or other jurisdiction either through an insurance fund operated by
such state or other jurisdiction or by causing to be maintained a system or
systems of self-insurance which is in accordance with applicable law.
(v) Furnish Information. Furnish to the Director:
(A) Quarterly Reports. Within forty-five (45) days after the
end of each quarterly period of each year of the Sublessee, the balance sheet of
the Sublessee as at the end of such quarterly period, together with related
statements of income and retained earnings (or accumulated deficit) and changes
in financial position for such quarterly period, setting forth in comparative
form the corresponding figures as at the end of or for the corresponding quarter
of the previous fiscal year, all in reasonable detail, prepared in accordance
with generally accepted accounting principles applied on a consistent basis,
subject to usual year-end audit adjustments.
(B) Annual Reports. Within ninety (90) days after the last day
of each fiscal year of the Sublessee, a copy of its audit report containing a
balance sheet of the Sublessee as at the end of such fiscal year, together with
related statements of income and retained earnings (or accumulated deficit) and
changes in financial position for such fiscal year, setting forth in comparative
form the corresponding figures as at the end of or for the previous fiscal year,
all in reasonable detail and all examined by and accompanied by a review letter
or opinion of its independent certified public accountants to the effect that
such financial statements were prepared in accordance with generally accepted
accounting principles consistently applied, and present fairly the Sublessee
financial position at the close of such period and the results of its operations
for such period. In addition, the Sublessee shall provide to the Director, along
with such audit report, a certificate from its auditors which states that the
Sublessee has complied with all financial covenants which are set forth in
Section 7.8(d) hereof, or, as the case may be, disclose any defaults thereunder.
(C) Certificate, No Default. With the financial reports
required to be furnished under this Section, a certificate of the Sublessee's
chief executive officer or chief financial officer stating that (a) no Event of
Default under the Sublease has occurred and is continuing and no event or
circumstance which would constitute an Event of Default under the Sublease, but
for the requirement that notice be given or time elapse or both, has occurred
and is continuing, or, if such an Event of Default under the Sublease or such
event or circumstance has occurred and is continuing,
-28-
a statement as to the nature thereof and the action which the Sublessee proposes
to take with respect thereto, and that (b) no action, suit or proceeding by it
or against it at law or in equity, or before any governmental instrumentality or
agency, is pending or threatened, which, if adversely determined, would
materially impair the right or ability of the Sublessee to carry on the business
which is contemplated in connection with the Project or would materially impair
the right or ability of the Sublessee to perform the transactions contemplated
by this Lease or would materially and adversely affect its business, operations,
assets or condition, all as of the date of such certificate, except as disclosed
in such certificate.
(D) Other Information. Such other information respecting the
business, properties or the condition or operations, financial or otherwise, of
the Sublessee as the Director may reasonably request, provided that reasonable
provision is made for protecting proprietary information of the Sublessee.
(vi) Deliver Notice. Forthwith upon learning of any of the
following, deliver written notice thereof Director, describing the same and the
steps being taken by the Sublessee with respect thereto:
(A) the occurrence of an Event of Default under the Sublease
or an event or circumstance which would constitute an Event of Default under the
Sublease, but for the requirement that notice be given or time elapse or both,
or
(B) any action, suit or proceeding by it or against it at law
or in equity, or before any governmental instrumentality or agency, instituted
or threatened which, if adversely determined, would materially impair the right
or ability of the Sublessee to carry on the business which is contemplated in
connection with the Project or would materially impair the right or ability of
the Sublessee to perform the transactions contemplated by the Sublease, or would
materially and adversely affect its business, operations, assets or condition,
or
(C) the occurrence of a Reportable Event, as defined in the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), under, or
the institution of steps by the Sublessee to withdraw from, or the institution
of any steps to terminate, any employee benefit plan as to which the Sublessee
may have liability.
(vii) Inspection Rights. At any reasonable time and from time
to time, permit the Director, or any agents or representatives thereof, to
examine and make copies of and abstracts from the records and books of account
of, and visit the properties of, the Sublessee and discuss the general business
affairs of the Sublessee with any of its officers; provided, however, that the
Sublessee reserves the right to restrict access to any of its facilities in
accordance with reasonably adopted procedures relating to safety and security.
(viii) Zoning, Planning and Environmental Regulations. The
Provision of the Project will be completed and the Project will be operated and
maintained in such manner as to
-29-
conform with all applicable zoning, planning, building, environmental and other
applicable governmental regulations (or variances therefrom) imposed by any
Governmental Authority and as to be consistent with the purposes of the Act.
(ix) Use of Project Fund Moneys. All moneys disbursed from the
Project Fund (except for any amounts transferred to the Collateral Proceeds
Account pursuant to the terms of this Lease) shall be used for the payment of
Allowable Costs relating to Provision of the Project. No part of any such moneys
shall be knowingly paid to or retained by the Sublessee or any, officer,
shareholder, director or employee of the Sublessee as a fee, kick-back or
consideration of any type. The Sublessee has no identity of interest with, or
interest in, the general contractor or any architect, subcontractor, laborer or
materialman performing work or services or supplying materials in connection
with the Provision of the Project.
Section 7.8. Negative Covenants of the Company. Throughout the
Lease Term, the Company shall not without the prior written consent of the
Director:
(a) Maintain Existence. Sell, transfer or otherwise dispose of
all, or substantially all, of its assets, consolidate with or merge into any
other entity, or permit one or more entities to consolidate with or merge into
it; provided, however, that the Company may, without violating the agreement
contained in this subsection (i), consolidate with or merge into another entity,
or permit one or more other entities to consolidate with or merge into it, or
sell, transfer or otherwise dispose of all, or substantially all, of its assets
as an entirety and thereafter dissolve if: (i) the prior written consent of the
Director is obtained; or (ii)(A) the surviving, resulting or transferee entity,
as the case may be, assumes in writing all of the obligations of the Company
hereunder (if such surviving, resulting or transferee entity is other than the
Company); and (B) the surviving, resulting or transferee entity, as the case may
be, is an entity duly organized and validly existing under the laws of the State
or duly qualified to do business therein, and has a net worth of not less than
that of the Company immediately prior to such disposition, consolidation or
merger, transfer or change of form.
(b) ERISA. Voluntarily terminate any employee benefit plan or
other plan (a "Plan") maintained for employees of the Company and covered by
Title IV of ERISA, so as to result in any material liability of the Company to
the Pension Benefit Guaranty Corporation ("PBGC"), enter into any Prohibited
Transaction (as defined in Section 4975 of the Internal Revenue Code of 1986, as
amended, and in ERISA) involving any Plan which results in any material
liability of the Company to the PBGC, cause any occurrence of any Reportable
Event (as defined in Title IV of EMSA) which results in any material liability
of it to the PBGC, or allow or suffer to exist any other event or condition
which results in any material liability of the Company to the PBGC.
(c) Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
(d) Financial Covenants.
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(i) Suspension of Operation. Suspend or discontinue operation
of the Project.
(e) Modify Sublease. Amend, modify or terminate any provision
of the Sublease or consent to or waive any Event of Default under the Sublease.
Upon the occurrence and continuation of any Event of Default under the Sublease,
the Sublessee Shall at the direction of the Director exercise its rights and
remedies thereunder in accordance with such direction.
(f) Sublease. Permit the Sublessee, pursuant to the Sublease,
to:
(i) Maintain Existence. Sell, transfer or otherwise dispose of
all, or substantially all, of its assets, consolidate with or merge into any
other entity, or permit one or more entities to consolidate with or merge into
it; provided, however, that the Sublessee may, without violating the agreement
contained in this subsection (i), consolidate with or merge into another entity,
or permit one or more other entities to consolidate with or merge into it, or
sell, transfer or otherwise dispose of all, or substantially all, of its assets
as an entirety and thereafter dissolve if: (i) the prior written consent of the
Director is obtained; or (ii)(A) the surviving, resulting or transferee entity,
as the case may be, assumes in writing all of the obligations of the Sublessee
hereunder (if such surviving, resulting or transferee entity is other than the
Sublessee); and (B) the surviving, resulting or transferee entity, as the case
may be, is an entity duly organized and validly existing under the laws of the
State or duly qualified to do business therein, and has a net worth of not less
than that of the Sublessee immediately prior to such disposition, consolidation
or merger, transfer or change of form.
(ii) ERISA. Voluntarily terminate any employee benefit plan or
other plan (a "Plan") maintained or employees of the Sublessee and covered by
Title IV of ERI as to result in any material liability of the Sublessee to the
Pension Benefit Guaranty Corporation ("PBGC"), enter into any Prohibited
Transaction (as defined in Section 4975 of the Internal Revenue Code of 1986, as
amended, and in ERISA) involving any Plan which results in any material
liability of the Sublessee to the PBGC, cause any occurrence of any Reportable
Event (as defined in Title IV of ERISA) which results in any material liability
of it to the PBGC, or allow or suffer to exist any other event or condition
which results in any material liability of the Sublessee to the PBGC.
(iii) Agreements. Enter into any agreement containing any
provision which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document delivered or to be
delivered by it hereunder or in connection herewith.
Section 7.9. Sublease. It shall be an express covenant of the
Sublease that the Sublessee shall not without the prior written consent of the
Director:
(a) Suspension of Operation. Suspend or discontinue operation
of the Project.
(b) Net Worth. Permit total assets less total liabilities
("Net Worth"), determined in each case in accordance with generally accepted
accounting principles applied on a basis
-31-
consistent with that of prior years, to be less than $15,000,000 as of December
31, 1993, $25,000,000 as of December 31, 1994, and $35,000,000 as of December
31, 1995 and thereafter.
(c) Debt Restrictions. Permit total Sublessee liabilities
including capitalized lease obligations but exclusive loans from officers,
directors or holders of 5 % or more of the Company's equity securities to exceed
an amount which is three (3) times Net Worth (determined as provided for in
Section 7.9(b) above) at December 31, 1993, two (2) times Net Worth (determined
as provided for in Section 7.9(b) above) at December 31, 1994, and equal to
tangible net worth (determined as provided for in Section 7.9(b) above) at each
December 31 thereafter as reflected in each case on the balance sheet of the
Company furnished in accordance with Section 7.5 of the Sublease and as
determined in each case in accordance with generally accepted accounting
principles applied on a basis consistent with that of prior years.
(d) Shareholder Loans. Pay, or otherwise make a distribution
as satisfaction for, interest on any loan made to Guarantor by an officer,
director or holder of 5 % or more of Guarantor's equity securities (present or
future) unless all amounts due as payments of principal and interest on the Note
have been paid. Guarantor shall not make loans to any officer, director of
holder of 5% or more of Guarantor's equity securities (present or future),
except for loans of which the aggregate balance does not exceed $14,.000,000.
(e) Encumber Assets. Pledge, assign, sell-leaseback,
hypothecate or in any manner encumber any of its assets, except as otherwise
expressly permitted by the Sublease.
(f) Removal of Assets. Remove, transfer or transport any of
the Project Facilities from the Project Site, except as permitted pursuant to
Section 4.4 of the Sublease.
(g) Sell Stock. Sell any equity interest, including without
limitation common or preferred stock, in the Sublessee unless the now-existing
loan from the Sublessee to Jeno F, Xxxxxxxx is repaid in full.
Section 7.10. Mechanics' and Other Liens. The Company shall
not suffer or permit any mechanics' or other liens to be filed or exist against
the Project nor any part thereof, nor against the Company's leasehold interest
in the Project, nor against the Project Fund or the Collateral Proceeds Account,
by reason of work, labor, services, or materials supplied or claimed to have
been supplied to, for or in connection with the Project or any part thereof or
to the Director or the Company or anyone holding the Project or any part thereof
through or under the Company. Nothing in this Section shall require the Company
to pay or discharge any such lien so long as the validity thereof shall be
contested in good faith and by appropriate legal proceedings, provided that the
Company shall have delivered to the Director an opinion of counsel, selected by
the Company and reasonably acceptable to the Director, to the effect that
nonpayment of any such lien during the pendency of such contest will not
adversely affect the Director's right, title or interest in the Project. If any
such liens shall at any time be filed, the Company shall, within one hundred
twenty days after notice of the filing thereof but subject to the right to
contest hereinafter set forth, cause the same to
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be discharged of record by payment, deposit, bond, order of a court of competent
jurisdiction or otherwise. If the Company shall fail to cause such lien to be
discharged, or to contest the validity or amount thereof, within the period
aforesaid, then, in addition to any other right or remedy of the Director, the
Director may, but shall not be obligated to, discharge the same either by paying
the amount claimed to be due or by procuring the discharge of such lien by
deposit or by bonding. Any amount paid by the Director shall be reimbursed by
the Company to the Director on demand, and if not so reimbursed on demand shall
be paid by the Company with interest thereof at the Interest Rate for Advances
from the date of payment by the Director, which amounts the Company agrees to
pay.
ARTICLE VIII
ASSIGNMENT, SUBLEASING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT
Section 8.1. Assignment and Subleasing by the Lessee. This
Lease may not be assigned in whole or in part, nor may the Project be subleased
as a whole or in part, by the Company without the consent of the Director. The
Director hereby consents to the sublease of the Project to the Sublessee
pursuant to the Sublease.
Section 8.2. Pledge by the Director. The Director has pledged
any moneys receivable under or pursuant to this Lease (except for reimbursement
of expenses and indemnification by the Company) to the Trustee pursuant to the
Trust Agreement. The Company hereby consents to such assignment and pledge.
Section 8.3. Restrictions on Transfer and Encumbrance of
Project by the Director. The Director agrees that, except as otherwise provided
in this Lease, it will not sell, assign, transfer, convey or otherwise dispose
of the Project or any portion thereof during the Lease Term and that it will
not, to the extent permitted by law, take any action which may reasonably be
construed as tending to cause or induce the levy of special assessments by
others against the Project without the written consent of the Company, nor will
it create or suffer to be created any debt, lien or charge thereon or make any
pledge or assignment of or create any lien or encumbrance upon the rents,
revenues and receipts derived from the sale, lease or other disposition of the
Project other than as provided in Section 8.2 hereof.
Section 8.4. Redemption of Bonds. The Director, at the written
request at any time of the Company if the Bonds are then callable, shall
forthwith take all steps that may be necessary under the applicable redemption
provisions of the Trust Agreement to effect redemption of all or part of then
outstanding Bonds, as may be specified by the Company, on the earliest
redemption date on which such redemption may be made under such applicable
provisions, if the Company shall then have deposited with the Trustee moneys
sufficient to pay the principal of and premium, if any, and interest due or to
become due on such redemption date with respect to the Bonds as to which such
request is made.
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Section 8.5. Prepayment of Rents. There is expressly reserved
to the Company the right, and the Company is authorized and permitted, at any
time it may choose, to prepay all or any part of the rents payable under Section
4.3 hereof, and the Director agrees that the Trustee may accept such prepayment
of rents when the same are tendered by the Company. Notwithstanding the
provisions of Section 4.4 of this Lease, prepaid rent shall be deposited to the
Collateral Proceeds Account and transferred to the Debt Service Account as
rental payments in the amounts and on the dates specified for rental payments
pursuant to Section 4.3 of this Lease.
Section 8.6. Lessee Entitled to Certain Rent Abatements if
Bonds Paid Prior to Maturity. If at any tune during the Lease Term there shall
be no Bonds outstanding, within the meaning of the Trust Agreement, and if the
Company is not at the time in default hereunder, the Company shall be entitled
to use and occupy the Project from such time to tile termination of the Lease,
without the payment of the rent (but otherwise on the terms and conditions
hereof).
Section 8.7. Installation of the Company's Own Machinery and
Equipment. In addition to the Project Facilities, the Company may from time to
time, in its sole discretion and at its own expense, install additional movable
personal property, machinery, equipment, furniture or fixtures in the Project
Facilities or on the Project Site. All such property so installed by the Company
shall remain the sole property of the Company in which the Director shall have
no interest, and may be modified or removed at any time while the Company is not
in default hereunder. Nothing contained in the preceding provisions of this
Article shall prevent the Company from purchasing, after delivery of this Lease,
movable personal property, machinery, equipment, furniture or fixtures, not
constituting part of the Project, on conditional sale contract or lease sale
contract, or subject to vendor's lien or security agreement, as security for the
unpaid portion of the purchase price thereof; provided no such lien or security
interest shall attach to any part of the Project.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Event of Default. Each of the following shall be
an "Event of Default":
(a) The Company shall fail to pay any amount payable pursuant
to this Lease on the date on which such payment is due and payable; or
(b) The Sublessee shall fail to pay any amount payable
pursuant to the Sublease on the date on which such payment is due and payable;
or
(c) The Company shall fail to observe and perform any
agreement, term or condition contained in the Lease other than as required
pursuant to subsection (a) above, and such failure continues for a period of
thirty (30) days after notice of such failure is given to the Company by the
Director, or for such longer period as the Director may agree to in writing;
provided, that if
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the failure is of such nature that it can be corrected but not within the
applicable period, such failure shall not constitute an Event of Default so long
as the Lessee institutes curative action within the applicable period and
diligently pursues such action to completion; or
(d) The Sublessee shall fail to observe and perform any
agreement, term or condition contained in the Sublease other than as required
pursuant to subsection (b) above, and such failure continues for a period of
thirty (30) days after notice of such failure is given to the Sublessee by the
Director, or for such longer period as the Director may agree to in writing;
provided, that if the failure is of such nature that it can be corrected but not
within the applicable period, such failure shall not constitute an Event of
Default so long as the Sublessee institutes curative action within the
applicable period and diligently pursues such action to completion; or
(e) Any representation or warranty made by the Company (or any
of its officers) herein or in any, Lease Approval Document or in connection
herewith or therewith shall prove to have been incorrect in any material respect
when made; or
(f) Any representation or warranty made by the Sublessee (or
any of its officers) in any Lease Approval Document or in connection therewith
shall prove to have been incorrect in any material respect when made; or
(g) The Company shall fail to pay any indebtedness of the
Company, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, by acceleration, on demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such indebtedness; or any other default
under any agreement or instrument relating to any such indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such indebtedness; or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or
(h) The Sublessee shall fail to pay any indebtedness of the
Sublessee, or any interest or premium thereon, when due (whether by scheduled
maturity, required prepayment, by acceleration, on demand or otherwise) and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such indebtedness; or any other default
under any agreement or instrument relating to any such indebtedness, or any
other event, shall occur and shall continue after the applicable grace period,
if any, specified in such agreement or instrument, if the effect of such default
or event is to accelerate, or to permit the acceleration of, the maturity of
such indebtedness; or any such indebtedness shall be declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the Stated maturity thereof; or
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(i) The Company commences a voluntary case concerning it under
titles of the United States Code entitled "Bankruptcy", as now, or hereafter in
effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary case
is commenced against the Company under the Bankruptcy Code and relief is ordered
against the Company, or the petition is controverted but is not dismissed within
sixty (60) days after the commencement of the case; or the Company is not
generally paying its debts as such debts become due; or a custodian (as defined
in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of the Company; or the Company commences any
other proceeding under any reorganization, arrangement, readjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect; or there is commenced against
the Company any such proceeding which remains undismissed for a period of sixty
(60) days; or the Company is adjudicated insolvent or bankrupt; or the Company
fails to controvert in a timely manner any such case under the Bankruptcy Code
or any such proceeding or any order of relief or other order approving any such
case or proceeding or the appointment of any custodian or the like of or for it
or any substantial part of its property or suffers any such appointment to
continue undischarged or unstayed for a period of sixty (60) days; or the
Company makes a general assignment for the benefit of creditors; or any action
is taken by the Company for the purpose of effecting any of the foregoing; or a
receiver or trustee or any other officer or representative of the court or of
creditors, or any court, governmental officer or agency, shall under color of
legal authority, take and hold possession of any substantial part of the
property or assets of the Company for a period in excess of sixty (60) days; or
(j) The Sublessee commences a voluntary case concerning it
under titles of the United States Code entitled "Bankruptcy", as now, or
hereafter in effect, or any successor thereto (the "Bankruptcy Code"); or an
involuntary case is commenced against the Sublessee under the Bankruptcy Code
and relief is ordered against the Sublessee, or the petition is controverted but
is not dismissed within sixty (60) days after the commencement of the case; or
the Sublessee is not generally paying its debts as such debts become due; or a
custodian (as defined in the Bankruptcy Code) is appointed for, or takes charge
of, all or substantially all of the property of the Sublessee; or the Sublessee
commences any other proceeding under any reorganization, arrangement,
readjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect; or there
is commenced against the Sublessee any such proceeding which remain undismissed
for a period of sixty (60) days; or the Sublessee is adjudicated insolvent or
bankrupt; or the Sublessee fails to controvert in a timely manner any such case
under the Bankruptcy Code or any such proceeding or any order of relief or other
order approving any such case or proceeding or the appointment of any custodian
or the like of or for it or any substantial part of its property or suffers any
such appointment to continue undischarged or unstayed for a period of sixty (60)
days; or the Sublessee makes a general assignment for the benefit of creditors;
or any action is taken by the Sublessee for the purpose of effecting any of the
foregoing; or a receiver or trustee or any other officer or representative of
the court or of creditors, or any court, governmental officer or agency, shall
under color of legal authority, take and hold possession of any substantial part
of the property or assets of the Sublessee for a period in excess of sixty (60)
days; or
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(k) A judgment or order for the payment of money in excess of
Ten Thousand Dollars ($10,000) shall be rendered against the Company and either
(i) enforcement proceedings shall have been commenced by any creditor upon such
judgment or order or (ii) there shall be any period of thirty (30) consecutive
days during which a stay of enforcement of such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; or
(l) A judgment or order for the payment of money in excess of
Ten Thousand Dollars ($10,000) shall be rendered against the Sublessee and
either (i) enforcement proceedings shall have been commenced by any creditor
upon such judgment or order or (ii) there shall be any period of thirty (30)
consecutive days during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in effect; or
(m) Any default under the Guaranty shall have occurred and be
continuing; or
(n) The Company fails to meet its minimum funding requirements
under Section 301 et seq. of ERISA, with respect to any of its Plans; or
(o) The Sublessee fails to meet its minimum funding
requirements under Section 301 et seq. of ERISA, with respect to any of its
Plans; or
(p) The Company waives, suffers or consents to any "Event of
Default" under the Sublease as such term is defined therein; or
(q) Any "Event of Default" under the Sublease as such term is
defined therein.
Section 9.2. Remedies on Default. Whenever an Event of Default
shall have happened and be subsisting, any one or more of the following remedial
steps may be taken:
(a) The Director may at his option declare all installments of
rent payable under Section 4.3 hereof for the remainder of the Lease Term to be
immediately due and payable, whereupon the same shall become immediately due and
payable.
(b) The Director may reenter and take possession of the
Project without terminating this Lease, and sublease the Project for the account
of the Company, holding the Company liable for the difference between the rent
and other amounts payable by such sublessee in such subleasing and the rents and
other amounts payable by the Company hereunder.
(c) The Director may terminate the Lease Term, exclude the
Company from possession of the Project and use his best efforts to lease or sell
the Project to another, but holding the Company liable for all rent and other
payments due up to the effective date of such leasing.
(d) The Director may direct the Trustee, in writing, to
transfer any amounts remaining in the Project Fund to the Collateral Proceeds
Account.
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(e) The Director may take whatever action at law or in equity
as may appear necessary or desirable to collect the rent then due and thereafter
to become due, or to enforce performance and observance of any obligation,
agreement or covenant of the Company under this Lease.
Any amounts collected pursuant to action taken under this Section shall be paid
into the Collateral Proceeds Account and applied in accordance with the
provisions of the Trust Agreement or, if the Bonds have been fully paid (or
provision for payment thereof has been made in accordance with the provisions of
the Trust Agreement) and all other amounts payable thereunder and hereunder have
been paid, as directed by the Company.
Section 9.3. No Remedy Exclusive. No remedy conferred upon or
reserved to the Director by this Lease is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Lease or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof, but any such right
and power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Director to exercise any remedy reserved to
him in this Article, it shall not be necessary to give any notice, other than
such notice as may be herein expressly required.
Section 9.4. Agreement to Pay Attorneys' Fees and Expenses. In
the event the Company should default under any of the provisions of this Lease
and the Director should employ attorneys or incur other expenses for the
collection of rent or the enforcement of performance or observance of any
obligation or agreement on the part of the Company contained in this Lease, the
Company agrees that it will on demand therefor reimburse the reasonable fee of
such attorneys and such other expenses so incurred. If any such fees and
expenses are not so reimbursed, the amount thereof, together with interest
thereon from the date of demand for payment at the Interest Rate for Advances,
shall, to the extent permitted by law, constitute indebtedness secured hereby
and by the Trust Agreement, and in any action brought to collect such
indebtedness, the Director shall be entitled to seek the recovery of such fees
and expenses in such action except as limited by law or by judicial order or
decision entered in such proceedings.
Section 9.5. No Additional Waiver Implied by One Waiver. In
the event any agreement contained in this Lease should be breached by either
party and thereafter waived by the other party, such waiver shall be limited to
the particular breach so waived and shall not be deemed to waive any other
breach hereunder.
Section 9.6. Waiver of Appraisement, Valuation, Etc. In the
event the Company should default under any of the provisions of this Lease, the
Company agrees to waive, to the extent it may lawfully do so, the benefit of all
appraisement, valuation, stay, extension or redemption laws now or hereafter in
force, and all right of appraisement and redemption to which it may be entitled.
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Section 9.7. Reinstatement. Notwithstanding any termination of
this Lease in accordance with the provisions of Section 9.2 hereof, unless and
until the Director shall have entered into a valid and binding agreement
providing for the reletting of the Project, the Company may at any time after
such termination pay all accrued unpaid rent plus any costs to the Director and
the Trustee (including, but not limited to, fees and expenses) occasioned by the
default and fully cure all other defaults then capable of being cured. Upon such
payment and cure, this Lease shall be fully reinstated, as if it had never been
terminated, and the Company shall be restored to the use, occupancy and
possession of the Project.
ARTICLE X
OPTIONS AND OBLIGATIONS TO PURCHASE PROJECT
Section 10.1. Option to Terminate. The Company shall have the
option to cancel or terminate the term of this Lease at any time when all the
Bonds shall be deemed to have been paid and discharged under the provisions of
the Trust Agreement and all amounts payable by the Company hereunder shall have
been paid. Such option shall be exercised by giving the Director notice in
writing of such cancellation or termination and such cancellation and
termination shall forthwith become effective.
Section 10.2. Option to Purchase Project Prior to Payment of
the Bonds. The Company shall have, and is hereby granted, the option to purchase
the Project prior to the expiration of the Lease and prior to the full payment
of the Bonds (or provision for payment thereof having been made in accordance
with the provisions of the Trust Agreement), if any of the following shall have
occurred:
(a) The Project Facilities shall have been damaged or
destroyed as set forth in Section 6.1 hereof (i) to such extent that they cannot
be reasonably restored within a period of six months to the condition thereof
immediately preceding such damage or destruction, or (ii) to such extent that
the Company is thereby prevented from carrying on its normal operations for a
period of six consecutive months.
(b) Title to, or the temporary use of, all or substantially
all of the Project shall have been taken under the exercise of the power of
eminent domain by any governmental authority, or person, firm or corporation
acting under governmental authority (including such a taking or takings as
results in the Company being thereby prevented from carrying on its normal
operations therein for a period of six consecutive months).
(c) As a result of any changes in the Constitution of the
State of Ohio or the Constitution of the United States of America or of
legislative or administrative action (whether state or federal) or by final
decree, judgment or order or any court or administrative body (whether state or
federal) entered after the contest thereof by the Director in good faith, this
Lease shall have become void or unenforceable or impossible of performance in
accordance with the intent and
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purpose of the parties as expressed in this Lease, or if unreasonable burdens or
excessive liabilities shall have been imposed upon the Director or the Company,
with respect to the Project or operation thereof, including without limitation
federal, state or other ad valorem, property, income or other taxes not being
imposed on the date of this Lease other than ad valorem taxes presently levied
upon privately owned property used for the same general purpose as the Project;
provided, that the provisions of this subsection shall in no way effect the
Company's obligation for the continued maintenance of the Project during the
Lease Term.
To exercise such option, the Company shall, within ninety (90) days following
the event authorizing the exercise of such option, give written notice to the
Director, and to the Trustee if any of the Bonds shall then be unpaid, and shall
specify therein the date of closing such purchase, which date shall be not less
than forty-five (45) nor more than ninety (90) days from the date such notice is
mailed, and in case of a redemption of the Bonds in accordance with the
provisions of the Trust Agreement shall make arrangements satisfactory to the
Trustee for the giving of the required notice of redemption, m which
arrangements Director shall cooperate. The purchase price payable by the
Company, in the event of its exercise of the option granted in this Section,
shall be the sum of the following:
(1) An amount of money which, when added to (i) the moneys and
investments held to the credit of the Collateral Proceeds Account and the
Primary Reserve Account and (ii) the aggregate rental payments made by the
Company and not theretofore applied to the payment of principal of or interest
on the Bonds, will be sufficient pursuant to the provisions of the Trust
Agreement, to pay and discharge all then outstanding Bonds on the first possible
date for redemption, plus
(2) An amount of money equal to the Trustee's fees and
expenses, to the extent payable by the Company pursuant to this Lease, accrued
and to accrue until such final payment and redemption of the Bonds, plus
(3) The sum of One Dollar ($1.00) to the Director.
In the event of the exercise of the option granted in this Section any Net
Proceeds of insurance or condemnation shall be paid to the Company,
notwithstanding any provision of Section 6.1 and 6.2 hereof, and the Director
will deliver to the Company the documents referred to in Section 10.4 hereof.
The mutual agreements contained in this Section 10.2, are
independent of, and constitute an agreement separate and distinct from any and
all provisions of this Lease and shall be unaffected by any fact or circumstance
which might impair or be alleged to impair the validity of any other provisions.
Section 10.3. Agreement to Purchase Project. The Company
agrees that it will purchase and the Director agrees that it will sell the
Project for One Dollar ($1.00) upon full payment of the Bonds or provision for
payment thereof having been made in accordance with the provisions
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of the Trust Agreement. Upon sale of the Project to the Company as provided in
this Section 10.3, the Director will deliver to the Company the documents
referred to in Section 10.4 hereof.
Section 10.4. Conveyance upon Exercise of Option to Purchase.
Upon exercise of any option to purchase granted herein, the Director will upon
payment purchase price deliver or cause to be delivered to the Company documents
conveying to the Company good and marketable title to the property being
purchased, as such property then exists, subject to the following: (i) those
liens and encumbrances, if any, 'to which title to said property was subject
when conveyed to the Director, (ii) those liens and encumbrances created by the
Company or to the creation or suffering of which the Company consented; (iii)
those liens and encumbrances resulting from the failure of the Company to
perform or observe any of the agreements on its part contained in this Lease;
(iv) Permitted Encumbrances, other than this Lease; and (v) if the option is
exercised pursuant to the provisions of Section 10.2(b) hereof, the rights and
title of the condemning authority.
Section 10.5. Option to Purchase, Redeem or Defease Bonds.
Provided no Event of Default has occurred and is existing, the Company may
instruct the Trustee to apply any moneys on deposit in the Collateral Proceeds
Account, together with any moneys furnished to the Trustee by the Company but
not constituting payments due under Article IV of this Lease, to any of the
following purposes:
(a) Purchase of Bonds in the open market at prices not greater
than their fair market value;
(b) Redemption of Bonds pursuant to the optional redemption
provisions thereof; or
(c) Defeasance of Bonds pursuant to Article IX of the Trust
Agreement.
If the sum of the amounts in the Collateral Proceeds Account and the Primary
Reserve Account, when added to the amount delivered by the Company to the
Trustee for application in accordance with this Section 10.5, is sufficient to
purchase for cancellation, optionally redeem or defease all of the Outstanding
Bonds, the Trustee shall, at the direction of the Company, apply moneys in the
Primary Reserve Account for any of such purposes.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Surrender of Project. In the event the Company
should default under this Lease and the Lease Term is terminated, the Company
agrees to surrender possession of the Project peaceably and promptly to the
Director in as good condition as prevailed at the time it was put in full
possession thereof, loss by fire or other casualty covered by insurance,
ordinary wear and tear, obsolescence and acts of God excepted.
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Section 11.2. Amounts Remaining in Collateral Proceeds Account
and Primary Reserve Account. It is agreed by the parties hereto that any amounts
remaining in the Collateral Proceeds Account or the Primary Reserve Account upon
expiration or sooner cancellation or termination of this Lease, after payment in
full of the Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Trust Agreement) and the fees, charges and
expenses of the Trustee and all other amounts required to be paid hereunder,
shall belong to and be paid to the Company by the Trustee as overpayment of
rents.
Section 11.3. Notices. All notices, certificates, requests or
other communications hereunder shall be sufficiently given and shall be deemed
given when mailed by registered or certified mail, postage prepaid, addressed to
the recipient at its Notice Address. A duplicate copy of each notice,
certificate, request or other communication given hereunder to the Director, the
Company, or the Trustee shall also be given to the others. The Company, the
Director and the Trustee may, by notice given hereunder, change a Notice Address
or designate any further addresses to which subsequent notices, certificates,
requests or other communications shall be sent.
Section 11.4. Net Lease. This Lease shall be deemed and
construed to be a "net lease", and the Company shall pay absolutely net during
the Lease Term the rent and all other payments required hereunder, free of any
deductions, without abatement, deduction or set-off other than those herein
expressly provided.
Section 11.5. Binding Effect. This Lease shall inure to the
benefit of and shall be binding upon the Director, the Company and their
respective successors and assigns, subject, however, to the limitations
contained in Sections 8.1 and 8.3 hereof, and subject to the further limitation,
as set forth on page I of this Lease, that any obligation of the Director
created by or arising out of this Lease shall not be a general debt of the
Director or the State but shall be payable solely out of the proceeds derived
from this Lease or the Net Proceeds of any insurance or condemnation awards as
provided herein.
Section 11.6. Extent of Covenants of the Director; No Personal
Liability. All covenants, stipulations, obligations and agreements of the
Director contained in this Lease shall be effective to the extent authorized and
permitted by applicable law. No such covenant, stipulation, obligation or
agreement shall be deemed to be a covenant, stipulation, obligation or agreement
of any present or future Director in other than such Director's official
capacity acting pursuant to the Act.
Section 11.7 Amendments, Changes and Modifications. This Lease
may not be effectively amended, changed or modified except by an instrument in
writing executed by the Director and the Company. No amendment to the Supplement
which has the effect of increasing the Company's obligations under this Lease
shall become effective without the written consent of the Company.
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Section 11.8. Execution Counterparts. This Lease may be
executed in several counterparts, each of which shall be regarded as an original
and all of which shall constitute but one and the same Lease.
Section 11.9. Severability. If any clause, provision or
section of this Lease be held illegal or invalid by any court, the invalidity of
such clause, provision or section shall not affect any of the remaining clauses,
provisions or sections hereof and this Lease shall be construed and enforced as
if such illegal or invalid clause, provision or section had not been contained
herein. In case any agreement or obligation contained in this Lease be held to
be in violation of law then such agreement or obligation shall be deemed to be
the agreement or obligation of the Director or the Company, as the case may be,
to the full extent permitted by law.
Section 11.10. Captions. The captions or headings in this
Lease are for convenience only and in no way define, limit or describe the scope
or intent of any provisions or sections of this Lease.
Section 11.11. Governing Law. This Lease shall be deemed to be
a contract made under the laws of the State of Ohio and for all purposes shall
be governed by and construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the Director and the Company have caused
this Lease to be executed in their respective names by their duly authorized
officers or representatives, all as of the date first above written.
Signed and acknowledged. DIRECTOR OF DEVELOPMENT OF THE STATE
in the presence of: OF OHIO
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
----------------------------- ----------------------------
Xxxxxx X. Xxxxxxx, Director
/s/ Xxxx Xxxxx
-----------------------------
Signed and acknowledged
in the presence of:
FOREMOST MGMT., INC.
/s/ Xxxxxxxx X. Xxxxxxxxx By: /s/ Xxxx X. Xxxxxxxxxxxx
----------------------------- ----------------------------
Xxxx X. Xxxxxxxxxxxx
President and Chief
/s/ Xxxxx X. Xxxxx Executive Officer
-----------------------------
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STATE OF OHIO :
:ss.
COUNTY OF FRANKLIN :
On this 17th day of September, 1993, before me, a Notary
Public in and for said Count personally appeared, Xxxxxx X. Xxxxxxxx, Xxxxxx X.
Xxxxxxx, Director of the Department of Development and State Development of the
State of Ohio, and acknowledged the execution of the foregoing instrument and
that the same is his voluntary act and deed on behalf of the Director of
Development of the State of Ohio and the voluntary act and deed of said officer
as such.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my official seal on the day and year aforesaid.
/s/ Xxxxx X. Xxxxxxx
--------------------------------
Notary Public
STATE OF OHIO :
:ss.
COUNTY OF FRANKLIN :
On this 20th of September, 1993, before me, a Notary Public in
and for said County and State, personally appeared Xxxx X. Xxxxxxxxxxxx,
President and Chief Executive Officer of Foremost Mgmt., Inc., the corporation
which executed the foregoing instrument, who acknowledged that he did sip said
instrument as such President and Chief Executive Officer for and on behalf of
said Foremost Mgmt., Inc.; that the same is his free act and deed as such
President and Chief Executive Officer, and the free act and deed of said
Foremost Mgmt., Inc.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my seal on the day and year aforesaid.
/s/ Xxxxx X. Xxxxx
--------------------------------
[notary stamp] Notary Public
This instrument was prepared by Xxxxxxxx X. Xxxxxxxxx, Esq., Squire, Xxxxxxx &
Xxxxxxx, 00 Xxxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxx 00000.
* Filed without exhibits. Such exhibits will be filed with the Commission upon
request.
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