LEASE
--------------------------------------------------------------------------------
Between
COUNTY OF CHAUTAUQUA INDUSTRIAL DEVELOPMENT AGENCY
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
as Lessor
and
SPECIAL METALS CORPORATION
Xxxxxxxxxxx Xxxxxx
Xxxxxxx, Xxx Xxxx 00000
as Lessee
Dated as of November 1, 1990
This instrument is intended to constitute a lease of the assets
described on Exhibits A and B.
TABLE OF CONTENTS
Page
----
ARTICLE I PRELIMINARY STATEMENT,
REPRESENTATIONS AND FINDINGS ................................. 1
1.1 Preliminary Statement ............................................ 1
1.2 Definitions ...................................................... 1
1.3 Lessee Representations ........................................... 1
(a) Power ...................................................... 1
(b) Authorization .............................................. 1
(c) Validity ................................................... 1
(d) Conflicts .................................................. 2
(e) Litigation ................................................. 2
(f) Purpose .................................................... 2
(g) Compliance with Certain Laws ............................... 2
1.4 Agency Representations ........................................... 2
(a) Power ...................................................... 2
(b) Authority and Validity ..................................... 2
(c) Project .................................................... 2
(d) Conflicts .................................................. 3
(e) Litigation ................................................. 3
(f) SEQR Act ................................................... 3
ARTICLE II ACQUISITION, CONSTRUCTION AND
COMPLETION OF PROJECT ........................................ 3
2.1 Plans and Specifications ......................................... 3
2.2 Transfer ......................................................... 3
2.3 Construction and Installation .................................... 4
(a) Agent ...................................................... 4
(b) Administration ............................................. 4
(c) Performance ................................................ 4
2.4 Compliance with Laws ............................................. 4
2.5 Completion of Project ............................................ 4
ARTICLE III RENTAL PROVISIONS ............................................ 5
3.1 Lease ............................................................ 5
3.2 Lease Term ....................................................... 5
3.3 Rent ............................................................. 5
ARTICLE IV COVENANTS OF THE LESSEE ...................................... 6
4.1 Maintenance and Operation ........................................ 6
4.2 Installation of Additional Equipment ............................. 6
4.3 Taxes and Special Assessments .................................... 6
4.4 Insurance ........................................................ 7
4.5 Corporate Existence .............................................. 8
4.6 Right of Agency to Pay Lessee Obligations ........................ 8
i
Page
----
4.7 Payment of Agency's Fee and Expenses ............................. 8
4.8 Indemnity Against Claims ......................................... 8
4.9 Limitation of Liability of the Agency ............................ 9
4.10 Discharge of Liens ............................................... 9
4.11 Certificate of No Default ........................................ 9
4.12 Subordination .................................................... 9
ARTICLE V DAMAGE TO AND STATUS OF PROJECT .............................. 10
5.1 Damage, Destruction and Condemnation ............................. 10
5.2 No Warranty by Agency ............................................ 10
5.3 Inspection ....................................................... 10
5.4 Information ...................................................... 10
5.5 Identification of Equipment ...................................... 10
5.6 Depreciation ..................................................... 10
5.7 Restriction on Sale and Encumbrance of Project ................... 10
5.8 No Assignment or Sublease ........................................ 11
5.9 Merger of Agency ................................................. 11
5.10 Waiver of Real Property Law Section 227 .......................... 11
ARTICLE VI EVENTS OF DEFAULT AND REMENDIES .............................. 11
6.1 Events of Default Defined ........................................ 11
6.2 Remedy on Default ................................................ 13
6.3 No Remedy Exclusive .............................................. 13
6.4 Agreement to Pay Attorneys' Fees and Expenses .................... 13
ARTICLE VII TERMINATION OF THIS LEASE; OPTION IN
FAVOR OF THE LESSEE .......................................... 14
7.1 Early Termination ................................................ 14
7.2 Conditions to Early Termination .................................. 14
7.3 Obligation to Purchase Facility .................................. 14
7.4 Conveyance on Purchase ........................................... 14
7.5 Expenses ......................................................... 15
ARTICLE VIII MISCELLANEOUS ................................................ 15
8.1 Notices .......................................................... 15
8.2 Binding Effect ................................................... 15
8.3 Severability ..................................................... 16
8.4 Execution of Counterparts ........................................ 16
8.5 Net Lease ........................................................ 16
8.6 Applicable Law ................................................... 16
8.7 Headings for Convenience Only .................................... 16
Exhibit A Land
Exhibit B Equipment
Exhibit C Definitions
Exhibit D Pilot Agreement
Exhibit E Litigation
ii
LEASE, dated as of November 1, 1990 between COUNTY OF CHAUTAUQUA
INDUSTRIAL DEVELOPMENT AGENCY ("Agency") and SPECIAL METALS CORPORATION
("Lessee").
ARTICLE I
PRELIMINARY STATEMENT, REPRESENTATIONS AND FINDINGS
1.1 Preliminary Statement. The Agency is a public benefit
corporation of the State of New York and a body corporate and politic organized
under the New York State Industrial Development Agency Act ("Enabling Act").
Under the Enabling Act, the Agency is authorized to enter into agreements
providing for the lease of industrial development projects (including pollution
control facilities) thereof to industrial occupants for a Public Purpose.
The Lessee has asked the Agency to undertake the Project consisting
of the acquisition and lease to the Lessee of the Land described on Exhibit A
hereto and certain Improvements and other assets thereon, the construction of
certain Improvements on the Land and the acquisition and installation of the
Equipment described on Exhibit B hereto. The purposes of the Project are set
forth in this Lease. The Agency has agreed preliminarily to undertake the
Project in accordance with an inducement resolution passed by the Agency on the
Inducement Date.
The Agency and the Lessee intend that the Project will constitute a
"project" for purposes of the Enabling Act.
1.2 Definitions. Initially capitalized terms used in this Lease,
including Section 1.1 hereof, shall have the meanings specified in Exhibit C
hereto, which definitions are incorporated herein as if fully set forth in this
Section 1.2.
1.3 Lessee Representations. The Lessee represents that:
(a) Power. The Lessee is duly organized, validly existing and
in good standing under the laws of the jurisdiction in which it was organized
and has the power to enter into this Lease and perform its obligations
hereunder.
(b) Authorization. The entry into and the fulfillment of and
compliance with the provisions of this Lease have been duly authorized by all
necessary action.
(c) Validity. This Lease constitutes the valid and legally
binding obligation of the Lessee, enforceable in accordance with its terms,
except as
2
enforcement may be limited by applicable bankruptcy, insolvency, moratorium or
other laws affecting the enforcement of creditors' rights.
(d) Conflicts. Neither the entry into nor the fulfillment of
and compliance with the provisions of this Lease will conflict with or result in
a breach of or constitute a default under (i) any provision of law, (ii) any
order of any court or other governmental agency, (iii) the certificate of
incorporation or by-laws of the Lessee or (iv) any instrument by which the
Lessee or its properties are bound.
(e) Litigation. Except as stated in Exhibit E, there is no
litigation, proceeding or investigation before or by any court, public board or
body, whether state, local or federal, pending or, to the knowledge of the
Lessee, threatened against or affecting the Lessee, nor to the knowledge of the
Lessee is there any basis therefor, wherein any unfavorable decision, ruling or
finding would, in any way, materially adversely affect this Lease or the
financial condition of the Lessee.
(f) Purpose. The leasing of the Project by the Agency has
induced the Lessee to locate the Project in City of Dunkirk, County of
Chautauqua, New York, will increase employment opportunities and promote the
welfare of the inhabitants of City of Dunkirk, County of Chautauqua and will not
result in the removal of any plant or facility of the Lessee from one area of
the State to another or in the abandonment of a plant or facility of the Lessee
within the State.
(g) Compliance with Certain Laws. The Project and operation
thereof will conform with all applicable zoning, planning, building and
environmental laws, ordinances, rules and regulations of governmental
authorities having jurisdiction over the Project.
1.4 Agency Representations. The Agency represents that:
(a) Power. The Agency is duly established and validly existing
under the provisions of the Act and has the power to enter into this Lease and
to perform its obligations hereunder. The Agency has complied with the
provisions of the Act in all matters relating to this Lease.
(b) Authority and Validity. By proper action, the Agency has
duly authorized the entry into and the fulfillment of and compliance with the
provisions of this Lease, and this Lease constitutes the valid and legally
binding obligation of the Agency, enforceable in accordance with its terms,
except as enforcement may be limited by applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of creditors' rights.
(c) Project. Based upon the representation of the Lessee as to
utilization of the Project, the Project is of a character included in the
definition of "project" in the Enabling Act.
3
(d) Conflicts. Neither the entry into nor the fulfillment of
and compliance with the provisions of this Lease will conflict with or result in
a breach of or constitute a default under (i) any provision of the Act or any
other law, (ii) any order of any court or other governmental agency, (iii) any
corporate restriction or by-law of the Agency or (iv) any instrument or document
by which the Agency or its properties are bound.
(e) Litigation. There is no litigation or governmental
proceeding pending or, to the knowledge of the Agency, threatened to restrain or
enjoin the entry into this Lease or in any manner questioning the proceedings or
authority under which this Lease is authorized; the corporate existence of the
Agency is not being contested; and the right of the Agency to acquire and hold
the Project is not being contested.
(f) SEQR Act. By resolution adopted on September 25, 1990, the
Agency determined that, based upon the review by the Agency of the materials
submitted and the representations made by the Lessee relating to the Project,
the Project would not have a "significant impact" or "significant effect" on the
environment within the meaning of the SEQR Act.
ARTICLE II
ACQUISITION, CONSTRUCTION AND COMPLETION OF PROJECT
2.1 Plans and Specifications. The Lessee agrees that, on behalf of
the Agency, it will acquire, renovate, construct, equip and install the Project
in accordance with the Plans and Specifications.
2.2 Transfer.
(a) The Lessee hereby grants and conveys to the Agency good
and marketable title in the Project. To evidence such grant, the Lessee will
execute and deliver to the Agency a deed with respect to the Land and the
Improvements, and upon the request of the Agency, one or more bills of sale or
other instruments of conveyance. The Lessee shall, however, be entitled to
physical possession and control of the Project and shall be liable at all times
for all risk, loss and damage with respect to the Project.
(b) Title to the Project and all components thereof shall vest
in the Agency immediately upon the Lessee's obtaining an interest therein. The
Lessee shall execute, deliver and record or file all instruments necessary or
appropriate to so vest title in the Agency and shall take all action necessary
or appropriate to protect such title against claims of any third Persons.
4
2.3 Construction and Installation.
(a) Agent. The Lessee, on behalf of the Agency, has awarded or
will award various contracts with respect to the Project. The Agency appoints
the Lessee its agent:
(i) to acquire, construct, renovate, equip and install the
Project in accordance with the Plans and Specifications,
(ii) to execute contracts related to the Project on behalf of
the Agency,
(iii) to pay all fees, costs and expenses incurred in
connection with completing the Project, and
(iv) to ask, xxx for, enforce, recover and receive all sums of
money and other demands that may be due and owing to the Agency under such
contracts related to the Project.
(b) Administration. The Lessee will have full responsibility
for preparing, administering, amending and enforcing the contracts related to
the Project and litigating or settling claims thereunder in the name of the
Lessee or the Agency, and will be entitled to all warranties, guaranties and
indemnities provided under such contracts and by law.
(c) Performance. The Lessee covenants and agrees that on
behalf of the Agency it will acquire, construct and equip the Project on the
Land in accordance with the Plans and Specifications.
2.4 Compliance with Laws. The Lessee shall give or cause to be given
all notices, secure all permits and licenses and comply or cause compliance with
all laws, ordinances and municipal rules and regulations applying to or
affecting the operation of the Project, and the Lessee will defend and save the
Agency and its officers, members and agents harmless from all fines due to
failure to comply therewith.
2.5 Completion of Project. The Lessee agrees to complete the Project
in accordance with the Plans and Specifications by the Completion Date and to
pay any and all costs and expenses whatsoever incurred with respect to the
Project. On the Completion Date, the Lessee shall furnish to the Agency a
certificate certifying that the Project has been substantially completed and the
final cost thereof, together with evidence of such cost.
5
ARTICLE III
RENTAL PROVISIONS
3.1 Lease. The Agency hereby leases the Project to the Lessee, and
the Lessee hereby accepts the lease of the Project from the Agency, upon the
terms and conditions of this Lease.
3.2 Lease Term. This Lease shall run for a period of ten years
commencing December 11, 1990 and shall expire on December 31, 2001.
(a) The Agency shall deliver to the Lessee sole and exclusive
possession of the Project, subject to the provisions of this Lease, on the
Closing Date.
(b) Except as provided in Sections 6.2 and 7.1 hereof, the
leasehold estate created hereby shall terminate at 12:00 a.m. on December 31,
2001; provided, however, except as provided in Section 6.2 hereof, this Lease
shall not terminate until all costs and expenses due from the Lessee are paid in
full.
(c) The Agency shall not take nor permit any action, other
than pursuant to Article VI of this Lease, to prevent the Lessee during the term
of the Lease from having quiet and peaceable possession of the Project or which
will otherwise adversely affect the rights or estate of the Lessee hereunder,
except upon the written consent of the Lessee.
3.3 Rent.
(a) The Lessee shall pay basic rent to the Agency in the
amount of $1000.00 on November 1 of each year throughout the term of this Lease
commencing November 1, 1991.
(b) In addition to the payments of rent pursuant to Section
3.3(a), the Lessee shall pay directly to the Agency as additional rent, within
ten (10) days of the receipt of demand therefor, an amount equal to the sum of
the expenses of the Agency and the members thereof incurred (i) by reason of the
Agency's ownership of the Project or (ii) in connection with the carrying out of
the Agency's duties and obligations under this Lease, the payment of which is
not otherwise provided for under this Lease. The foregoing shall not be deemed
to include any annual or continuing administrative or management fee beyond any
initial administrative fee or fee for services rendered by the Agency.
6
(c) The Lessee, under the provisions of this Section 3.3,
agrees to make the above-mentioned payments in immediately available funds and
without any further notice in lawful money of the United States of America.
ARTICLE IV
COVENANTS OF THE LESSEE
4.1 Maintenance and Operation. The Lessee shall not abandon the
project or cause or permit any waste to the Improvements. During the term of the
Lease, except as otherwise provided in this Section 4.1, the Lessee shall not
remove any part of the Project outside the jurisdiction of the Agency and shall
maintain and operate the Project and make all necessary repairs to the
Improvements and the Equipment and replacements to the Project. In any instance
where the Lessee determines that any item of Equipment has become inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary, the Lessee may
remove such items from the Project and may sell, trade-in, exchange or otherwise
dispose of the same, as a whole or as part, free from any lien of this Lease.
The Agency shall execute and deliver at the Lessee's expense, to the Lessee all
instruments necessary to enable the Lessee to dispose of any such item of
Equipment. The Lessee shall not take any action or fail to take any action which
would cause the Project not to constitute a "project" for purposes of the
Enabling Act.
With the written consent of the Agency, which shall not be
unreasonably withheld, the Lessee may from time to time make structural
additions, modifications and improvements to the Project which it deems
desirable, all of which shall become a part of the Project (but in no way an
obligation or expense of the Agency).
4.2 Installation of Additional Equipment. The Lessee may install on
the Land equipment or other personal property and, except for the Equipment
described on Exhibit B, such equipment or other personal property shall not
become a part of the Project. Therefore, the Lessee from time to time may remove
or permit the removal of such equipment or other personal property from the
Project and may create or permit to be created any Lien thereon; provided, any
removal of such equipment or other personal property shall not adversely affect
the structural integrity of the Improvements or impair the overall operating
efficiency of the Project for the purposes for which it is intended.
4.3 Taxes and Special Assessments.
(a) The Lessee agrees to pay, as the same respectively become
due, (i) all taxes and governmental charges of any kind which may at any
7
time be lawfully assessed or levied against or with respect to the Project and
any Equipment or other property installed as part of the Project, including,
without limitation, any sales or use taxes imposed with respect to the Project
or any part or component thereof or the rental or sale of the Project or any
part thereof, unless a valid exemption from such taxes or governmental charges
is available, (ii) all utility and other charges incurred or imposed with
respect to the Project or any aspect thereof, and (iii) all assessments and
charges of any kind lawfully imposed by any governmental body.
(b) The Lessee may in good faith contest any such taxes,
assessments and other charges, so long as the overall operating efficiency of
the Project for the purposes for which it is intended is not impaired. In the
event of any such contest, the Lessee may permit the taxes, assessments or other
charges so contested to remain unpaid during the period of such contest and any
appeal therefrom; provided, however, (i) neither the Project nor any part
thereof or interest therein would be in any immediate danger of being sold,
forfeited or lost by reason of such proceedings and (ii) the Lessee shall have
set aside on its books adequate reserves with respect thereto.
(c) Under the provisions of the Act, the Agency is required to
pay no real property taxes upon any of the property acquired by it or under its
jurisdiction or control or supervision; however, the Agency and the Lessee have
entered into the Pilot Agreement, attached hereto as Exhibit D, which provides
for certain in-lieu payments.
4.4 Insurance.
(a) At all times throughout the term of this Lease, the Lessee
will maintain or cause to be maintained the following insurance coverages:
(i) All-risk property insurance; and
(ii) Insurance protecting the Lessee and the Agency against
loss or losses from liabilities imposed by law or assumed in any written
contract (including the contractual liability assumed by the Lessee under
Section 4.8 hereof) and arising from personal injury and death or damage
to the property of others caused by any accident or occurrence, with
limits of not less than $500,000 per accident or occurrence on account of
personal injury and property damage and an excess liability policy in an
amount not less than $5,000,000, naming the Agency as an additional
insured party.
(b) All policies evidencing the insurance required by Section
4.4(a)(ii) hereof shall provide for (i) payment of the losses to the Lessee and
the Agency as their respective interests may appear, and (ii) at least thirty
(30) days'
8
written notice in accordance with Section 8.1 of this Lease of the proposed
non-renewal, cancellation, reduction of benefits or material change in coverage
thereof to the Lessee and the Agency. Prior to the expiration of any policy of
insurance, the Lessee shall furnish to the Agency evidence that the policy has
been renewed or replaced or is no longer required by this Lease.
(c) The Net Proceeds of the insurance required by Section
4.4(a) (ii), shall be applied toward extinguishment or satisfaction of the
liability with respect to which such insurance is written.
4.5 Corporate Existence. During the term of this Lease, the Lessee
will maintain its existence and will not dissolve, liquidate or otherwise
dispose of all or substantially all of its assets.
4.6 Right of Agency to Pay Lessee Obligations. If the Lessee fails
to pay any tax, assessment or charge required to be paid by Section 4.3 unless
contested in good faith in accordance with Section 4.3 or to maintain any
insurance required to be maintained by Section 4.4, the Agency may pay or cause
to be paid such item or items after giving notice to the Lessee of an intention
to pay such item or items. The Lessee shall reimburse the Agency for any amount
paid under this Section, together with interest thereon from the date of payment
at a per annum rate equal to twelve percent (12%).
4.7 Payment of Agency's Fee and Expenses. The Lessee will pay the
Agency's standard administration fee and all reasonable legal fees and costs,
including, without limitation, any costs related to any transfer of the Project,
incurred by the Agency in connection with this Lease.
4.8 Indemnity Against Claims.
(a) The Lessee releases the Agency from, agrees that the
Agency shall not be liable for, and indemnities and holds harmless the Agency
and its officers, members, agents and employees, past, present and future, from,
any and all loss, damage, liability, claim, expense (including reasonable costs
and attorneys' fees) for any injury or death to persons, any loss or damage to
property or any other loss, claim or damage related to or affected by the
Project, or arising or resulting, directly or indirectly, from acts or omissions
of any Person arising out of the Improvements, the Equipment or the acquisition
by the Agency of title to the Project or any other aspect of the Project,
excepting from the foregoing only such loss or liability as may be caused by the
gross negligence or willful misconduct of the Agency and its officers, members,
agents or employees. If any claim is asserted against the Agency, the Agency
will give prompt notice to the Lessee and the Lessee will assume the defense
thereof, with full power to litigate, compromise or settle the same in its sole
discretion; provided, however, the failure to give such notice shall not relieve
the Lessee of its liability under this Section unless Lessee is not otherwise
aware of such
9
claim and the Agency's failure to give notice to Lessee adversely and materially
affects Lessee.
(b) Notwithstanding any other provisions of this Lease, the
obligations assumed by the Lessee pursuant to this Section 4.8 shall remain in
full force and effect after the termination of this Lease until the expiration
of the period stated in the applicable statute of limitations during which a
claim, cause of action or prosecution relating to the matters herein described
may be brought, the payment in full or the satisfaction of such claim, cause of
action or prosecution and the payment of all expenses and charges incurred by
the Agency or its officers, members, employees or agents, relating to the
enforcement of the provisions herein specified.
4.9 Limitation of Liability of the Agency. The liability of the
Agency to the Lessee under this Lease shall be enforceable only out of the
Agency's interest under this Lease and in the Project, and there shall be no
other recourse against the Agency, its officers, members, agents and employees,
past, present or future, or other property now or hereafter owned by it or them.
4.10 Discharge of Liens. If any Lien other than the Permitted
Encumbrances is asserted against the Project or the Agency's or the Lessee's
interest therein, the Lessee will cause each such Lien to be fully discharged
and released within thirty (30) days after its assertion; provided, however, the
Lessee may contest any such Lien in good faith. If any such Lien shall be
reduced to final judgment, and such judgment or other process issued for the
enforcement thereof is not promptly stayed, or if so stayed and said stay
thereafter expires, the Lessee shall forthwith pay and discharge said judgment.
4.11 Certificate of No Default. Within ninety (90) days after the
close of each fiscal year of the Lessee during the term of this Lease, the
Lessee shall furnish to the Agency a certificate stating (i) no Event of Default
under this Lease has occurred and is continuing, and (ii) no event has occurred
which with the giving of notice or lapse of time or both would constitute an
Event of Default, or if both of such statements are not correct, the details
with respect to the event or occurrence.
4.12 Subordination. This Lease is hereby made subject, subordinate
and junior in right to the lien of the Mortgage, and to any extensions,
modifications or substitutions of same.
10
ARTICLE V
DAMAGE TO AND STATUS OF PROJECT
5.1 Damage, Destruction and Condemnation.
(a) If, prior to payment of all rent provided for in Section
3.3, (i) the Project or any portion thereof shall have been destroyed (in whole
or in part) or damaged by fire or other casualty, or (ii) title to, or the
temporary use of the Project or any portion thereof shall have been taken under
the exercise of the power of eminent domain by a Person acting under
governmental authority, the Lessee may, within thirty (30) days after the
occurrence, terminate this Lease upon notice to the Agency or continue the Lease
in effect. In no event shall the Agency have any liability or duty to rebuild or
restore the Project.
(b) The Lessee shall have the right to settle and adjust all
claims under any policies of insurance or in condemnation on behalf of the
Agency and itself. The proceeds of any condemnation award shall be paid to the
Lessee.
5.2 No Warranty by Agency. THE AGENCY MAKES NO WARRANTY, EXPRESS OR
IMPLIED, AS TO THE CONDITION, TITLE, DESIGN, OPERATION, MERCHANTABILITY OR
FITNESS OF THE PROJECT, OR THAT THE PROJECT IS OR WILL BE SUITABLE FOR THE
LESSEE'S PURPOSES OR NEEDS.
5.3 Inspection. The Agency and its agents shall have the right at
all reasonable times to inspect the Project.
5.4 Information. The Lessee agrees to provide promptly such
information concerning the Lessee, its finances and the Project as the Agency
may reasonably request. All financial information furnished to the Agency shall
be kept confidential and not disclosed by the Agency except as required by law.
5.5 Identification of Equipment. All Equipment shall be properly
identified by the Lessee by appropriate records.
5.6 Depreciation. The parties agree that, as between them, the
Lessee shall be entitled to all depreciation or recovery deductions with respect
to any depreciable property in the Project.
5.7 Restriction on Sale and Encumbrance of Project. Except as
otherwise specifically provided in this Article V, Article VI and Article VII,
the Agency shall not sell, convey, transfer or encumber the Project or any
rights under
11
this Lease without the prior written consent of the Lessee other than Permitted
Encumbrances.
5.8 No Assignment or Sublease. The Lessee shall not assign this
Lease in whole or in part and shall not sublease all or any portion of the
Project.
5.9 Merger of Agency.
(a) Nothing contained in this Lease shall prevent the
consolidation of the Agency with, the merger of the Agency into or the transfer
of title to the Project as an entirety to any other public benefit corporation
or political subdivision which has the legal authority to own and lease the
Project, provided that upon any such consolidation, merger or transfer, the due
and punctual performance and observance of all the agreements and conditions of
this Lease to be kept and performed by the Agency shall be expressly assumed in
writing by the public benefit corporation or political subdivision resulting
from such consolidation, surviving such merger or to which the Project shall be
transferred.
(b) Within thirty (30) days after the consummation of any such
consolidation, merger or transfer of title, the Agency shall give notice thereof
in reasonable detail to the Lessee. The Agency promptly shall furnish such
additional information with respect to any such transaction as the Lessee may
reasonably request.
5.10 Waiver of Real Property Law Section 227. The Lessee hereby
waives the provisions of Section 227 of the Real Property Law of the State or
any laws of like import now or hereafter in effect.
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
6.1 Events of Default Defined. Any one or more of the following
event shall be "Events of Default" under this Lease:
(a) Failure by the Lessee to pay or cause to be paid the rent
required to be paid under Section 3.3 hereof when due.
(b) Failure by the Lessee to pay or cause to be paid when due
the amounts required under the Pilot Agreement.
(c) Failure by the Lessee to observe and perform any covenant,
condition or agreement in this Lease on its part to be observed or
12
performed, other than referred to in Section 6.1(a) or 6.1(b) for a period of
thirty (30) days after written notice, specifying such failure or breach and
requesting that it be remedied, has been given to the Lessee by the Agency.
The provisions of this Section 6.1(c) are subject to the following
limitations: If by reason of force majeure the Lessee is unable in whole or in
part to carry out the agreements on its part herein contained, other than the
obligations on the part of the Lessee contained in Article III and Sections 4.4,
4.8 and 5.1 hereof, the Lessee shall not be deemed in default during the
continuance of such inability. The term "force majeure" as used herein shall
mean any of the following: acts of God; strikes, lockouts or other industrial
disturbances; acts of public enemies; orders of any kind of the government of
the United States or of the State or any of their departments, agencies or
officials, or any civil or military authority; insurrections; riots; epidemics;
landslides; lightning; earthquake; fire; tornadoes; storms; floods, washouts;
drought; restraint of government; civil disturbances; explosions; partial or
entire failure of utilities or other suppliers of energy; or any other similar
cause or event not reasonably within the control of the Lessee. The Lessee
agrees, however, that after the occurrence of an event of force majeure it will
take such steps as may thereafter be within its reasonable control to mitigate
the cause or causes preventing the Lessee from carrying out its obligations
under this Lease; provided, that the settlement of strikes, lockouts and other
industrial disturbances shall be entirely within the discretion of the Lessee
and that the Lessee shall not be required to make settlement of strikes,
lockouts and other industrial disturbances by acceding to the demands of the
opposing party or parties when such course is in the judgment of the Lessee
unfavorable to the Lessee.
(d) The Lessee shall (i) apply for or consent to the
appointment of or the taking of possession by a receiver, custodian, trustee or
liquidator of itself or of any of its assets, (ii) admit in writing its
inability, or be generally unable, to pay its debts as such debts become due,
(iii) make a general assignment for the benefit of its creditors, (iv) commence
a voluntary case under the federal Bankruptcy Code (as now or hereafter in
effect), (v) file a petition or other request seeking to take advantage of any
other law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, or (vi) take any corporate action for the
purpose of effecting any of the foregoing.
(e) A proceeding or case shall be commenced, without the
application or consent of the Lessee, in any court of competent jurisdiction,
seeking (i) liquidation, reorganization, arrangement, adjustment of debts,
adjudication as a bankrupt, dissolution, winding-up, or relief as a debtor, (ii)
the appointment of a trustee, receiver, custodian, liquidator or the like of the
Lessee or of any of its assets, or (iii) similar relief under any law relating
to bankruptcy, insolvency, reorganization, winding-up or composition or
adjustment of debts, and such proceeding or case shall continue undismissed, or
an order, judgment or decree approving or ordering any of
13
the foregoing shall be entered and continue unstayed and in effect, for a period
of sixty (60) days.
(f) If any certificate, statement, representation, warranty or
financial statement furnished by or on behalf of the Lessee shall prove to have
been false or misleading in any material respect at the time as of which the
facts therein set forth were made, or to have omitted any substantial or
unliquidated liability or claim against the Lessee.
(g) The occurrence and continuation of an Event of Default
under the Mortgage.
(h) Noncompliance by Lessee of any provision of the
Environmental Compliance Agreement or receipt by the Agency of any notice
pursuant to Section III(f) of the Environmental Compliance Agreement.
6.2 Remedy on Default. Upon the occurrence and during the
continuation of an Event of Default, the Agency may, at its option, convey by
deed and xxxx of sale the Project to the Lessee, and such conveyance shall be in
accordance with Section 7.4 hereof.
6.3 No Remedy Exclusive. No course of dealing and no delay or
omission by the Agency in exercising any right or remedy hereunder shall operate
as a waiver thereof or of any other right or remedy, and no single or partial
exercise thereof shall preclude any other or further exercise thereof or the
exercise of any right or remedy. The Agency may remedy any default by the Lessee
hereunder or with respect to any other Person in any reasonable manner without
waiving the default remedied by the Lessee. All rights and remedies of the
Agency hereunder are cumulative.
6.4 Agreement to Pay Attorneys' Fees and Expenses. In the event the
Agency employs attorneys or incurs other expenses for the collection of the sums
payable under this Lease, the enforcement of performance or observance of any
obligation or agreement of the Lessee or in connection with any matter arising
out of or related to the transactions contemplated by this Lease, the Lessee
will, on demand therefor, pay to the Agency the reasonable fees and expenses of
such attorneys and such other expenses so incurred.
14
ARTICLE VII
TERMINATION OF THIS LEASE; OPTION IN FAVOR OF THE LESSEE
7.1 Early Termination. The Lessee shall have the option on any date
before, during and after the occurrence of an Event of Default to terminate this
Lease (i) upon filing with the Agency a certificate signed by an Authorized
Representative of the Lessee advising of the Lessee's election and the date upon
which the payments pursuant to Section 7.2 shall be made; and (ii) upon
compliance with the provisions of Section 7.2.
The Lessee shall have the further option to terminate this Lease
with respect to all or any portion of the Equipment (i) upon filing with the
Agency a certificate signed by an Authorized Representative advising the Agency
of such termination, together with a xxxx of sale from the Agency to the Lessee
or a third party with respect to the Equipment.
7.2 Conditions to Early Termination. In the event of any early
termination of this Lease, the Lessee shall pay to the Agency an amount
certified by the Agency sufficient to pay all unpaid fees and expenses of the
Agency incurred under this Lease.
7.3 Obligation to Purchase Facility. Upon termination of the Lease
term, the Agency shall have the obligation to sell the Project to Lessee, and
the Lessee shall have the obligation to purchase the Project from the Agency for
the purchase price of One Dollar ($1.00). The Lessee shall purchase the Project
by giving written notice to the Agency (which may be contained in the
certificate referred to in Section 7.1) fixing the date of closing such
purchase, which shall be on or about the date on which this Lease is to be
terminated. This Lease shall thereupon terminate, with the exception of Section
4.8, which shall survive any termination hereof.
7.4 Conveyance on Purchase. At the closing of the purchase of the
Project pursuant to Section 7.3 hereof, the Agency shall, upon receipt of the
purchase price, deliver all necessary documents (a) to convey to the Lessee
title to the Project being purchased, as the Project exists, subject only to the
following: (i) any Liens to which title was subject when conveyed to the Agency,
(ii) any Liens created at the request of the Lessee, to the creation of which
the Lessee consented or in the creation of which the Lessee acquiesced, (iii)
any Permitted Encumbrances, and (iv) any Liens resulting from the failure of the
Lessee to perform or observe any of its agreements contained in this Lease or
arising out of an Event of Default; (b) to release and convey to the Lessee all
of the Agency's rights and interest in and to any rights of action (other than
under Section 4.8) or any Net Proceeds of insurance or
15
condemnation awards with respect to the Project; and (c) to discharge and
release any security interest or lien of any nature held by the Bank.
7.5 Expenses. Any and all costs, expenses, taxes and charges of any
kind related to any transaction pursuant to this Article VIII shall be for the
account of the Lessee.
ARTICLE VIII
MISCELLANEOUS
8.1 Notices. All notices, certificates and other communications
hereunder shall be in writing and shall be sufficiently given and shall be
deemed given, if by delivery, when delivered and, if delivered by mail, on the
second day following the day on which mailed by certified mail, postage prepaid,
addressed as follows:
To the Agency: County of Chautauqua Industrial Development
Agency
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: Administrative Director
To the Lessee: Special Metals Corporation
Xxxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Vice President, Secretary &
Chief Legal Counsel
With a copy to: Credit Lyonnais New York Branch
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: European Corporate Group.
Any of the persons mentioned above to whom notice may be given may,
by notice given hereunder, designate any further or different addresses to which
subsequent notices, certificates and other communications shall be sent.
8.2 Binding Effect. This Lease shall inure to the benefit of and
shall be binding upon the Agency and its successors and assigns and upon the
Lessee and its successors, subject, however, to the limitation contained in
Section 4.5.
16
8.3 Severability. In the event any provision of this Lease shall be
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
8.4 Execution of Counterparts. This Lease may be executed in several
counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
8.5 Net Lease. It is the intention of the parties hereto that this
Lease be a "net lease," and this Lease shall be construed to effect such intent.
8.6 Applicable Law. This Lease shall be governed and construed under
the internal laws of the State without regard to principles of conflicts of law.
8.7 Headings for Convenience Only. The descriptive headings in this
Lease are inserted for convenience only and shall not control or affect the
meaning or construction of any provisions hereof.
IN WITNESS WHEREOF, the Agency and the Lessee have caused this Lease
to be executed by their duly authorized officers, all as of the date first above
written.
COUNTY OF CHAUTAUQUA INDUSTRIAL
DEVELOPMENT AGENCY
By_____________________________________
SPECIAL METALS CORPORATION
By_____________________________________
17
EXHIBIT C
DEFINITIONS (Section 1.2)
Act means, collectively, the Enabling Act and Chapter 71 of the 1972
Laws of the State, as amended.
Agency means County of Chautauqua Industrial Development Agency, a
corporate governmental agency constituting a body corporate and politic and a
public benefit corporation of the State organized under the laws of the State,
and its successors and assigns and any resulting or surviving public benefit
corporation or political subdivision.
Authorized Representative means the person or persons at the time
designated to act on behalf of the Agency or the Lessee, as the case may be, by
written certificate furnished to the Agency or the Lessee, as the case may be,
containing the specimen signature of each such person.
Bank means Credit Lyonnais New York Branch as collateral agent and
mortgagee under the Mortgage.
Closing Date means December 11, 1990.
Completion Date means the date upon which the Lessee believes that the
Project will be substantially completed, which the Lessee estimates to be March
31, 1992.
Counsel means an attorney, or firm of attorneys, admitted to practice
before the highest court of any State of the United States of America or the
District of Columbia (who may be counsel for the Agency or the Lessee).
County means Chautauqua County, New York.
Enabling Act means the New York State Industrial Development Agency Act
constituting Article 18-a of the New York General Municipal Law, as amended.
Environmental Compliance Agreement means that environmental compliance
and indemnification agreement dated as of November 1, 1990 executed by the
Lessee in favor of the Agency related to the Project, as the same may be amended
and supplemented from time to time.
Equipment means the equipment listed on Exhibit B hereof.
18
Event of Default (collectively, Events of Default) means any of the
events or conditions so designated in Section 6.1 of the Lease.
Improvements means the buildings, fixtures and improvements acquired or
to be acquired, renovated or to be renovated, or constructed or to be
constructed on the Land.
Inducement Date means September 25, 1990.
Land means the real estate leased pursuant to the Lease, more
particularly described on Exhibit A.
Lease means the lease agreement by and between the Agency and the
Lessee, as the same may be amended and supplemented from time to time.
Lessee means Special Metals Corporation, a corporation duly organized
and existing under the laws of the State of Delaware.
Lien means any interest in personal or real property securing an
obligation owed to a Person whether such interest is based on the common law,
statute or contract. The term "Lien" includes reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other similar title exceptions and encumbrances affecting real
property.
Mortgage means the Mortgage dated as of November _, 1990 among the
Agency and Lessee, as mortgagors, and Credit Lyonnais New York Branch as Agent,
as mortgagee.
Net Proceeds means the amount of the gross proceeds with respect to
which that term is used as remain after payment of all expenses, costs and taxes
(including attorneys' fees) incurred in obtaining such gross proceeds.
Permitted Encumbrances means (i) Liens described in the title insurance
policy referred to in Section 2.2 of the Lease, (ii) the Lease, (iii) utility,
access and other easements and rights of way, restrictions and exceptions that
do not materially impair the utility or the value of the property affected
thereby for the purposes for which it is intended, (iv) mechanics',
materialmen's, warehousemen's, carriers' and other similar Liens to the extent
permitted by the Lease, (v) Liens for taxes at the time not delinquent, and (vi)
the Mortgage and Liens to which the Lessee and the Bank have given their written
consent.
Person means an individual, partnership, corporation, association, joint
venture, trust or unincorporated organization, and a government or governmental
agency or political subdivision thereof.
19
Pilot Agreement means a payment-in-lieu of taxes agreement between the
Agency and the Lessee regarding the payment by such Lessee of certain amounts
in-lieu-of real property taxes on the Project and attached as Exhibit D to the
Lease.
Plans and Specifications means the plans and specifications for the
Project (including cost estimates) prepared by the Lessee and approved by the
Bank.
Project means the Land, the Improvements and Equipment leased to the
Lessee under the Lease and located at Xxxxxxxxxxx Xxxxxx, Xxxxxxx, Xxx Xxxx
00000.
Public Purpose means the State's objective to create industrial
development agencies for the benefit of the several counties, cities, villages
and towns in the State and to empower such agencies, among other things, to
acquire, construct, reconstruct, lease, improve, maintain, equip and sell land
and any building or other improvement, and all real and personal properties,
including, but not limited to, machinery and equipment deemed necessary in
connection therewith, whether or not now in existence or under construction,
which shall be suitable for manufacturing, warehousing, research, commercial,
recreation or industrial facilities, including industrial pollution control
facilities, in order to advance job opportunities, health, general prosperity
and the economic welfare of the people of the State.
SEQR Act means the State Environmental Quality Review Act
constituting Article 8 of the New York Environmental Conservation Law and the
regulations thereunder.
State means the State of New York.
The words "hereof," "herein," "hereto," "hereby" and "hereunder" when
used in the Lease shall refer to that Lease.
Every "request," "order," "demand," "application," "direction,"
"appointment," "notice," "statement," "certificate," "consent" or similar
action hereunder by the Agency or the Lessee shall, unless the form thereof is
specifically provided, be in writing signed by the Chairman, Vice-Chairman,
Treasurer, Assistant Treasurer, Secretary, Assistant Secretary or Executive
Director of the Agency, the President, any Vice-President or general partner of
the Lessee or the Authorized Representative of any of them.
