LEASE AGREEMENT
THIS LEASE AGREEMENT dated as of February 1, 1994 is entered into by
THE INDUSTRIAL DEVELOPMENT BOARD OF THE TOWN OF ADDISON, a public corporation
organized under the laws of the State of Alabama (the "Issuer"), and Winston
County Industrial Development Association, an Alabama general partnership (the
"Partnership") composed of the following individuals as general partners
(collectively the "Partners"): Xxxxxx Xxxxxx Xxxxxxx, Xxxxx X. Xxxxxxxx, Xxxxxxx
X. Xxxxx, Xxxxxxxx X. Xxxx, Xxxxxxx Xxxxxxx Xxxx, Xxxxxxx Xxxxx XxXxxxxx, Xxxx
Xxxxx Xxxxx, Xxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxx X. Xxxxxx, Xx., and
Xxxxxxxx X. Xxxxxx.
Recitals
The Issuer has duly authorized the issuance of its revenue bonds
described below (the "Bonds") under and pursuant to a Mortgage and Indenture
dated as of February 1, 1994 (the "Indenture") between the Issuer and First
Commercial Bank, a banking corporation with its principal office in the City of
Birmingham, Alabama (the "Bank"), for the benefit of the registered owners of
the Bonds.
The Bonds to be issued under the Indenture shall be issued in principal
amounts of not less than $100,000 each and in an aggregate principal amount of
$1,275,000 and shall be designated Industrial Development Revenue Bonds (Winston
County Industrial Development Association Project) and dated the date of their
initial issuance. The proceeds of the Bonds shall be applied by the Issuer to
pay the costs of acquiring certain real property and acquiring, constructing and
installing improvements, structures, facilities, fixtures and related personal
property thereon for the manufacturing, processing and assembling of
manufactured housing and related products (such real property, improvements,
structures, facilities, fixtures, and related personal property being
hereinafter referred to as the "Project"), including the payment and retirement
of obligations heretofore issued by the Issuer for such purpose.
Pursuant to this Lease Agreement the Issuer has agreed to lease the
Project to the Partnership and the Partnership has agreed to pay rentals to the
Issuer at times and in amounts sufficient to pay when due the principal of and
interest on the Bonds.
The Bonds shall be limited obligations of the Issuer payable solely out
of the rentals payable by the Partnership pursuant to this Lease Agreement and
any other revenues, rentals or receipts derived by the Issuer from the leasing
or sale of the Project. Pursuant to the Indenture, as security for the payment
of the Bonds, the Issuer shall assign and pledge to the Bondholders all right,
title and interest of the Issuer in and to this Lease Agreement (except for
certain rights to indemnification and reimbursement of expenses granted to the
Issuer) and shall mortgage the Project to the Bank for the benefit of the
Bondholders. As additional security for the payment of the Bonds the Partnership
and the Partners have guaranteed the payment of the Bonds pursuant to a Bond
Guaranty Agreement dated as of February 1, 1994 (the "Guaranty") to the
Bondholders. Recourse against each of the Partners in his capacity as a general
partner of the Partnership and a party to the Guaranty is limited to the extent
set forth in this Lease Agreement and the Guaranty.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto covenant, agree and bind
themselves as follows:
ARTICLE 1
Definitions and Other Provisions of General Application
SECTION 1.01 Definitions
For all purposes of this Lease Agreement, except as otherwise expressly
provided or unless the context otherwise requires:
(1) The terms defined in this Article have the meanings assigned to them
in this Article and include the plural as well as the singular and vice versa.
(2) All accounting terms not otherwise defined herein have the meanings
assigned to them, and all computations herein provided for shall be made, in
accordance with generally accepted accounting principles. All references herein
to "generally accepted accounting principles" refer to such principles as they
exist at the date of application thereof.
(3) All references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections and
subdivisions of this instrument as originally executed.
(4) The terms "herein", "hereof" and "hereunder" and other words of
similar import refer to this Lease Agreement as a whole and not to any
particular Article, Section or other subdivision.
(5) The term "person" shall include any individual, corporation,
partnership, joint venture, association, trust, unincorporated organization and
any government or any agency or political subdivision thereof.
Authorized Issuer Representative shall have the meaning assigned
thereto in the Indenture.
Authorized Partnership Representative shall have the meaning
assigned thereto in the Indenture.
Bank shall mean First Commercial Bank, Birmingham, Alabama and its
successors and assigns with respect to the Indenture.
Basic Rent shall mean that portion of the rent payable under Section
5.02(a) hereof.
Bond shall mean collectively any Bond executed and delivered
pursuant to the Indenture.
Bondholder shall mean the registered owner of any Bond.
Bond Payment Date shall mean a date on which any installment of the
principal of (and premium, if any) or interest on the Bonds is due and payable,
whether at the stated maturity or due date or on a date fixed for optional or
mandatory redemption or prepayment of the Bonds.
Bond Register shall mean the register or registers for the
registration and transfer of Bonds maintained by the Issuer pursuant to Section
4.04 of the Indenture.
Business Day shall mean a day, other than a Saturday or Sunday, on
which commercial banking institutions are open for business in the State.
Counsel shall mean a person qualified to practice law in any State
of the United States or in the District of Columbia who shall be appointed by
the Partnership and acceptable to the Bondholders.
Enabling Law shall mean Division 1, Article 4, Chapter 54, Title 11
(Section 11-54-80 et seq.) of the Code of Alabama 1975.
Engineer shall mean a person qualified to practice as an engineer
under the laws of the State, who shall be appointed by the Partnership and
acceptable to the Bondholders.
Environmental Law shall mean and include all laws, rules,
regulations, ordinances, judgments, decrees, codes, orders, injunctions, notices
and demand letters of any Governmental Authority applicable to the Partnership
or the Project Site (including, but not limited to, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as amended, 42
U.S.C. Sections 9601, et seq.) relating to pollution or protection of human
health or the environment, including any relating to Hazardous Substances.
Equipment shall have the meaning assigned in Demising Clause III.
ERISA shall mean the Employee Retirement Income Security Act of
1974, as amended.
Event of Default shall have the meaning assigned in Article 10. An
Event of Default shall "exist" if an Event of Default shall have occurred and be
continuing.
Federal Securities shall mean direct obligations of, or obligations
the payment of which is guaranteed by, the United States of America.
Governmental Authority shall mean any federal, state, county,
municipal, or other government, domestic or foreign, and any agency,
authority, department, commission, bureau, board, court or other
instrumentality thereof.
Hazardous Substances shall mean and include all pollutants,
contaminants, toxic or hazardous wastes and other substances (including, but not
limited to, asbestos, urea formaldehyde, foam insulation and materials
containing either petroleum or any of the substances referenced in Section
101(14) of CERCLA), the removal of which is required or the manufacture, use,
maintenance and handling of which is regulated, restricted, prohibited or
penalized by an Environmental Law, or, even though not so regulated, restricted,
prohibited or penalized, might pose a hazard to the health and safety of the
public or the occupants of the property on which it is located or the occupants
of the property adjacent thereto.
Guaranty shall have the meaning assigned in the recitals to this
instrument.
Improvements shall have the meaning assigned in Demising Clause II.
Indenture shall mean that certain Mortgage and Indenture dated as of
February 1, 1994 between the Issuer and the Bank, including any amendments or
supplements to such instrument.
Independent, when used with respect to any person, shall mean a
person who (1) is in fact independent, (2) is not related to any of the Partners
and does not have any direct financial interest or any material indirect
financial interest in common with any of the Partners or in the Partnership, the
Issuer or in any other obligor upon the Bonds or in any related party of the
Partnership, the Issuer or of such other obligor, and (3) is not connected with
any of the Partnership, the Issuer or such other obligor as an officer,
employee, partner, promoter, underwriter, trustee, partner, director or person
performing similar functions.
Issuer shall mean the person named as the "Issuer" in the first
paragraph of this instrument until a successor corporation shall have become
such pursuant to the applicable provisions of the Indenture, and thereafter
"Issuer" shall mean such successor corporation.
Lease Agreement shall mean this instrument as originally executed or
as it may at any time be supplemented, modified or amended by one or more
supplemental leases or other instruments supplemental hereto.
Lease Payments shall mean and include all payments of whatever
nature or purpose to be made by the Partnership hereunder and all financial
obligations of the Partnership undertaken hereby, and shall include, without
limiting the generality of the foregoing, all amounts to be paid pursuant to
Sections 5.02, 5.04 and 6.06 hereof.
Lease Term shall mean the duration of the leasehold estate granted
in Section 5.01 of this Lease Agreement.
Municipality shall mean the Town of Addison, Alabama.
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 reasonable
expenses (including reasonable attorneys' fees and any extraordinary fee of the
Bondholders) incurred in the collection of such gross proceeds.
Outstanding when used with respect to Bonds shall mean, as of the
date of determination, all Bonds theretofore executed and delivered under the
Indenture, except (1) Bonds theretofore canceled by the Issuer, or (2) Bonds in
exchange for or in lieu of which other bonds have been issued under the
Indenture.
Partner shall mean any of the Partners and his assigns, heirs,
executors and administrators.
Partners shall mean collectively Xxxxxx Xxxxxx Xxxxxxx, Xxxxx X.
Xxxxxxxx, Xxxxxxx X. Xxxxx, Xxxxxxxx X. Xxxx, Xxxxxxx Xxxxxxx Xxxx, Xxxxxxx
Xxxxx XxXxxxxx, Xxxx Xxxxx Xxxxx, Xxxxx X. Xxxxxxxx, Xxxxxx X. Xxxxxx, Xxxxx X.
Xxxxxx, Xx. and Xxxxxxxx X. Xxxxxx and the respective assigns, heirs, executors
and administrators thereof.
Partnership shall mean Winston County Industrial Development
Association, an Alabama general partnership, and its successors and assigns.
Paying Agent shall mean any person authorized by the Issuer to pay
the principal of (and premium, if any) or interest on any Bonds on behalf of the
Issuer.
Permitted Encumbrances shall mean: (1) this Lease Agreement (2)
liens for taxes, assessments and other governmental charges that are not
delinquent or are currently being contested in good faith by appropriate
proceedings and for which adequate reserves have been established by the
Partnership, (3) mechanics', workmen's, repairmen's, materialmen's,
warehouseman's and carrier's liens and other similar liens for charges which are
not delinquent or which are being contested in good faith by appropriate
proceedings and for which, in the opinion of the Bondholders, adequate reserves
have been established by the Partnership, and (4) such minor defects,
irregularities and encumbrances as do not, in the opinion of Bondholders, in the
aggregate materially impair the use of the Project, taken as a whole, for the
purposes for which it is held by the Issuer.
Project shall mean the collectively the Project Site, the
Improvements, the Equipment, and all other property and rights referred to or
intended so to be in Demising Clauses I through III, inclusive, hereof.
Project Costs shall mean all costs of acquiring, constructing,
equipping and improving the Project, including without limitation:
(1) the purchase price and related costs for the
acquisition of real property or any interest therein,
(2) the cost of labor, materials and supplies furnished
or used in the acquiring, construction, installation or equipping,
of the Improvements,
(3) acquisition, transportation and installation costs
for personal property and fixtures,
(4) fees for architectural, engineering and supervisory
services,
(5) expenses incurred in the enforcementof any remedy
against any contractor, subcontractor, materialmen, vendor, supplier
or surety,
(6) interest accruing on the Bonds until the Project is
placed in service,
(7) expenses incurred by the Issuer and the Partnership
in connection with the financing of the Project, including legal,
consulting and accounting fees,
(8) the principal amount of the Issuer's Industrial
Development Revnue Bond (Winston County Industrial Development
Association Project) dated and issued February 26, 1993 (the "1993
Bond") with respect to the Project and interest thereon during the
construction of the Project, and
(9) reimbursement to the Partnership for any of the foregoing
costs, fees and expenses set forth in (1) through (8) above, paid by
it with its own funds, except the principal amount of the 1993 Bond.
Project Site shall mean the real estate described in Demising
Clause I.
Qualified Investments shall have the meaning assigned in the
Indenture.
Special Funds shall mean the Construction Fund and any other fund
or account established pursuant to the Indenture.
State shall mean the State of Alabama.
Unimproved when used with reference to the Project Site means any
part or parts of the Project Site upon the surface of which no part of
a building or other structure rests.
SECTION 1.02 Date of Lease Agreement
The date of this Lease Agreement is intended as and for a date for the
convenient identification of this Lease Agreement and is not intended to
indicate that this Lease Agreement was executed and delivered on said date, this
Lease Agreement being executed on the dates of the respective acknowledgments
hereto attached.
SECTION 1.03 Separability Clause
If any provision in this Lease Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
SECTION 1.04 Effect of Headings and Table of Contents
The Article and Section headings herein and in the Table of Contents
are for convenience only and shall not affect the construction hereof.
SECTION 1.05 Successors and Assigns
All covenants and agreements in this Lease Agreement by the Issuer or
the Partnership or the Partners shall bind their respective successors, assigns,
heirs, executors, and administrators, whether so expressed or not.
SECTION 1.06 Governing Law
This Lease Agreement shall be construed in accordance with and governed
by the laws of the State.
SECTION 1.07 Execution Counterparts
This Lease Agreement may be executed in several counterparts, each of
which shall be an original and all of which shall constitute but one and the
same instrument.
SECTION 1.08 Covenant of Quiet Enjoyment
So long as the Partnership performs and observes all the covenants and
agreements on its part herein contained, it shall peaceably and quietly have,
hold and enjoy the Project during the Lease Term subject to all the terms and
provisions hereof.
SECTION 1.09 Issuer's Liabilities Limited
This Lease Agreement is entered into under and pursuant to the
provisions of the Enabling Law. No provision hereof shall be construed to impose
a charge against the general credit of the Issuer or any personal or pecuniary
liability upon the Issuer except to apply the proceeds to be derived from the
sale of the Bonds and the revenues and receipts to be derived from any leasing
or sale of the Project or any part thereof as provided herein and in the
Indenture.
SECTION 1.10 Prior Agreements Canceled
This Lease Agreement shall completely and fully supersede the
Inducement Agreement dated September 10, 1992 and all other prior agreements,
both written and oral, between the Issuer, the Partnership and the Partners
relating to the acquisition and construction of the Project, the leasing of the
Project and any options to renew or to purchase; excepting however (a) any deed
or other instrument by which the Project Site, or any part thereof, or any
interest therein,has been transferred and conveyed to the Issuer and (b) the
Abatement Agreement dated September 10, 1992 and any other agreement between the
Issuer, the Partnership and the Partners providing for applicable State tax
exemptions to apply to the Partnership and the Project. Neither the Issuer, the
Partnership nor the Partners shall hereafter have any rights under such prior
agreements but shall look solely to this Lease Agreement for definition and
determination of all of their respective rights, liabilities and
responsibilities relating to the Project.
SECTION 1.11 Notices
All notices, certificates or other communications hereunder shall be
sufficiently given and shall be deemed given when delivered or mailed by
registered or certified mail, postage prepaid, addressed as follows:
(1) if to the Issuer, at Xxxx Xxxx, Xxxxxxx, Xxxxxxx
00000;
(2) if to the Partnership, c/o Mr. Xxxx Xxxx, 0000 00xx
Xxxxxx, X. X. Xxx 000, Xxxxxxxxxx, Xxxxxxx 00000;
(3) if to the Bank, at First Commercial Bank, 0000
Xxxxxxxxxxx Xxxxxxx, Xxxxxxxxxx, Xxxxxxx; and
(4) if to the Bondholders, at their respective addresses
set forth in the Bond Register.
A duplicate copy of each notice, certificate or other communication given
hereunder by either the Issuer or the Partnership to the other shall also be
given to and the Bank. The Issuer, the Partnership, the Bank and the Bondholders
may, by notice given hereunder, designate any further or different addresses to
which subsequent notices, certificates or other communications shall be sent.
SECTION 1.12 The Special Funds
(a) The Issuer shall cause any money held as a part of the Special
Funds to be invested or reinvested in Qualified Investments at the request of,
and as directed by, the Partnership.
(b) If, after full payment of the Bonds, there is any surplus remaining
in the Special Funds, the Issuer will promptly pay such surplus to the
Partnership.
ARTICLE 2
Representations and Warranties
SECTION 2.01 Representations by the Issuer
The Issuer makes the following representations:
(1) The Issuer is duly organized under the provisions of the Enabling
Law and has the legal authority and power to enter into the transactions
contemplated by this Lease Agreement and to carry out its obligations hereunder.
The Issuer is not in default under any of the provisions contained in its
certificate of incorporation, as the same may have at any time been amended, its
bylaws, or in the laws of the State. By proper corporate action the Issuer has
duly authorized the execution and delivery of this Lease Agreement.
(2) The Issuer has determined that the issuance of the Bonds, the
acquisition, construction, and equipping of the Project and the leasing of the
same to the Partnership will be in furtherance of the purposes of the Issuer's
incorporation and the Enabling Law.
(3) The Bonds will be issued and delivered contemporaneously with the
delivery of this Lease Agreement.
SECTION 2.02 Representations by the Partnership
The Partnership is duly organized as a general partnership under the
laws of the State of Alabama and the Partners are all of the general partners of
the Partnership; is not in violation of any provisions of its partnership
agreement or the laws of the State of Alabama; has power and authority to enter
into this Lease Agreement; and by proper action of the Partners has duly
authorized the execution and delivery of this Lease Agreement.
ARTICLE 3
Demising Clauses
The Issuer, for and in consideration of the rents, covenants and
agreements hereinafter reserved, mentioned and contained on the part of the
Partnership to be paid, kept and performed, does hereby assign, demise and lease
to the Partnership, and the Partnership does hereby accept, lease, take and hire
from the Issuer, the following property:
I.
The following described real property located in Winston County,
Alabama, within twenty-five miles of the Municipality and not within the
corporate limits or police jurisdiction of any other municipality (the "Project
Site"), together with all easements, permits, licenses, rights-of-way,
contracts, leases, tenements, hereditaments, appurtenances, rights, privileges
and immunities pertaining or applicable to said real property:
PARCEL NO. 1
Begin at the Northeast corner of Section 32, T-9-S, R-6-W; thence West along the
North boundary line of said Section 32 a distance of 89.34 feet to the West
right-of-way line of Winston County Xxxxxxx Xx. 00; thence S 18 31' E along said
West right-of-way line a distance of 1042 feet; thence S 71 29' W a distance of
10 feet to the point of beginning of the land herein described; thence Southerly
parallel to said West right-of-way line a distance of 596 feet to the North
right-of-way line of a paved street; thence S 85 36' W along the North
right-of-way line of said street a distance of 579.1 feet; thence N 16 03' W a
distance of 486.8 feet; thence N 74 49' E a distance of 567.7 feet to the point
of beginning, containing 7.15 acres, more or less, lying and being situated in
the NE1/4 of Section 32 and the NW1/4 of Section 33, all in T-9-S, R-6-W;
Winston County, Alabama.
PARCEL NO. 2
Begin at the Northeast corner of Section 32, T-9-S, R-6-W; thence West along the
North boundary line of said Section 32 a distance of 89.34 feet to the West
right-of-way line of Winston County Xxxxxxx Xx. 00; thence S 18 31' E along said
West right-of-way line a distance of 1042 feet; thence S 71 29' W a distance of
10 feet; thence Southerly parallel to said West right-of-way line a distance of
646 feet to the South right-of-way line of a paved street being the point of
beginning of the land herein described; thence Southerly along the West
right-of-way line of said Xxxxxxx Xx. 00 a distance of 325.7 feet; thence N 70
08' W a distance of 600.7 feet; thence N 16 03' W a distance of 80 feet to the
South right-of-way line of said paved street; thence N 85 36' E along said South
right-of-way line a distance of 572.4 feet to the point of beginning, containing
2.6 acres, more or less, lying and being situated in the NE1/4 of Section 32 and
the NW1/4 of Section 33, all in T-9-S, R-6-W; Winston County, Alabama.
II.
All buildings, structures, improvements and fixtures now or hereafter
constructed, situated or located on the Project Site, as the same may at any
time exist (the "Improvements").
III.
The machinery, equipment, personal property and fixtures described on
Exhibit A attached hereto and all other machinery, equipment, personal property
and fixtures acquired with the proceeds of the Bonds or with funds advanced or
paid by the Partnership pursuant to this Lease Agreement, together with all
personal property and fixtures acquired in substitution therefor or as a renewal
or replacement thereof (the "Equipment").
SUBJECT, HOWEVER, to Permitted Encumbrances.
ARTICLE 4
The Project
SECTION 4.01 Acquisition of Project; Project Costs.
(a) The Issuer has acquired, constructed and installed the Project at
the direction of the Partnership and from the principal proceeds derived from
the sale of the Bonds the Issuer will pay all Project Costs. All the proceeds of
the 1993 Bond were expended for the acquisition, construction and installation
of the Project and in addition the Partnership expended more than $25,000 of its
own funds therefor. The Project was not completed until after June 1, 1993.
(b) The Issuer and the Partnership shall from time to time each appoint
by written instrument an agent or agents authorized to act for each respectively
in any or all matters relating to the acquisition, construction, and equipping
of the Project. One of the agents appointed by the Partnership shall be
designated its Project Supervisor. Either the Issuer or the Partnership may from
time to time, by written notice also filed with the Bank, revoke, amend or
otherwise limit the authority of any agent appointed by such party to act on
such party's behalf or designate another agent or agents to act on such party's
behalf, provided that there shall be at all times at least one agent authorized
to act on behalf of the Issuer, and at least one agent (who shall be the Project
Supervisor) authorized to act on behalf of the Partnership, with reference to
all the foregoing matters.
SECTION 4.02 No Warranty of Suitability by Issuer
THE PARTNERSHIP RECOGNIZES THAT SINCE THE PLANS, SPECIFICATIONS AND
DIRECTIONS FOR ACQUIRING, CONSTRUCTING AND INSTALLING THE PROJECT ARE FURNISHED
BY IT, THE ISSUER MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, NOR OFFERS ANY
ASSURANCES THAT THE PROJECT WILL BE SUITABLE FOR THE PARTNERSHIP'S PURPOSES OR
NEEDS OR THAT THE PROCEEDS DERIVED FROM THE SALE OF THE BONDS WILL BE SUFFICIENT
TO PAY IN FULL ALL PROJECT COSTS.
SECTION 4.03 Title Insurance
(a) The Partnership has obtained a title insurance policy in an amount
equal to $1,275,000 insuring the first mortgage in the Project. Any proceeds of
such title insurance shall be applied to the prepayment of the Bonds on the
earliest Business Day for which the required notice may be given, as provided in
the Bonds.
ARTICLE 5
Duration of Lease Term and Rental Provisions
SECTION 5.01 Duration of Term
(a) The term of this Lease Agreement shall begin on the date of the
delivery of this Lease Agreement and, subject to the provisions of this Lease
Agreement, shall continue until midnight of February 25, 2033.
(b) Upon payment in full of the Bonds and all fees and expenses of the
Bondholders and any Paying Agent, the Partnership shall be entitled to the use
and occupancy of the Project from the date of such payment until the expiration
of the Lease Term without the payment of any further rent under Article 5
hereof, provided, all references in this Lease Agreement to the Bonds, the
Indenture and the Bondholders shall be ineffective and the Bondholders shall not
thereafter have any rights hereunder, saving and excepting those that shall have
theretofore vested, but otherwise such use and occupancy of the Project by the
Partnership shall be on all of the terms and conditions hereof, except that the
Partnership shall not be required to carry any insurance for the benefit of the
Bondholders.
SECTION 5.02 Rental and Payment Provisions; Net Lease
(a) Basic Rent. Not later than each Bond Payment Date, the Partnership
shall pay to the Bank as Paying Agent for payment to the respective Bondholders
in immediately available funds for the account of the Issuer an amount equal to
the principal of and interest on the Bonds maturing and coming due on such Bond
Payment Date (herein called "Basic Rent").
(b) Additional Rent. The Partnership shall pay as additional rent to
the Bank the reasonable fees, charges and expenses of the Bank for necessary
services rendered by it and expenses incurred by it under the Indenture, as and
when the same become due.
(c) Prepayment of Bonds. The Partnership acknowledges and agrees that
prepayment of the Bonds is required in certain events, including without
limitation damage to or condemnation of the Project as more particularly set
forth in this Lease Agreement, and the Partnership hereby covenants and agrees
to make available to the Issuer for such prepayment all funds required to be so
provided in such events.
(d) Net Lease. The Partnership recognizes, acknowledges and agrees that
it is the intention hereof that this Lease Agreement be a net lease and that
until the Bonds are fully paid Basic Rent shall be in such amounts and shall be
due at such times as shall be required to pay the installments of principal of
and interest on the Bonds as the same mature and become due and payable and all
additional rent shall be available for the purposes specified therefor. This
Lease Agreement shall be construed to effectuate such intent.
SECTION 5.03 Advances by Issuer or Bondholders
In the event that the Partnership fails to perform or observe any of
its covenants in this Lease Agreement, the Issuer or the Bondholders (or the
Bank on behalf of the Bondholders), after first notifying the Partnership of any
such failure may (but shall not be obligated to) make advances to effect
performance or observance of such covenants on behalf of the Partnership. All
amounts so advanced therefor by the Issuer or the Bondholders, together with
interest thereon from the date of advancement at the Bank's prime rate per annum
or the maximum rate of interest allowed by law, whichever is less, shall become
an additional obligation payable by the Partnership to the Issuer or to the
Bondholders upon demand and secured hereby.
SECTION 5.04 Indemnity of Issuer, Bank and Bondholders
(a) The Partnership agrees to pay, and to indemnify and hold the
Issuer, the Bank and the Bondholders harmless against, any and all liabilities,
losses, damages, claims or actions (including all reasonable attorneys' fees and
expenses of the Issuer, the Bank or the Bondholders, as the case may be), of any
nature whatsoever incurred by the Issuer, the Bank or the Bondholders, as the
case may be, without gross negligence on its part, arising from or in connection
with the ownership of any interest in the Project or the leasing thereof and
granting of security interests therein, or its performance or observance of any
covenant or condition on its part to be observed or performed under this Lease
Agreement or the Indenture, including without limitation, (1) any injury to, or
the death of, any person or any damage to property at the Project, or in any
manner growing out of or connected with the use, nonuse, condition or occupation
of the Project or any part thereof, (2) any damage, injury, loss or destruction
of the Project, (3) any other act or event occurring upon, or affecting, any
part of the Project, (4) violation by the Partnership of any contract, agreement
or restriction affecting the Project or the use thereof or of any law, ordinance
or regulation affecting the Project or any part thereof or the ownership,
occupancy or use thereof, and (5) liabilities, losses, damages, claims or
actions arising out of the offer and sale of the Bonds or a subsequent sale of
the Bonds or any interest therein, unless the same resulted from a
representation or warranty of the Issuer in this Lease Agreement or any
certificate delivered by the Issuer pursuant thereto being false or misleading
in a material respect and such representation or warranty was not based upon a
similar representation or warranty of the Partnership furnished to the Issuer in
connection therewith. The covenants of indemnity by the Partnership contained in
this Section shall survive the termination of this Lease Agreement.
(b) The Partnership hereby agrees that (1) the Issuer shall not incur
any liability to the Partnership, and (2) the Issuer shall be indemnified
against all liabilities with respect to any action taken by the Issuer in
exercising or refraining from asserting, maintaining or exercising any right,
privilege or power of the Issuer under the Indenture if the Issuer is acting in
good faith and without gross negligence or in reliance upon a written request by
the Partnership.
(c) The Partnership further agrees to indemnify each Bondholder for,
and to hold it harmless against, any loss, liability or expense incurred without
negligence or bad faith on its part, arising out of or in connection with the
exercise or performance of any of its powers, rights, or duties under the
Indenture.
SECTION 5.05 Obligations of Partnership Unconditional;
Limited Recourse Against Partners
(a) The obligations of the Partnership to make all rental and other
payments required under Section 5.02 hereof and the other provisions of this
Lease Agreement and to perform and observe the other agreements and covenants on
its part herein contained shall be absolute and unconditional, irrespective of
any rights of set- off, recoupment or counterclaim the Partnership might
otherwise have against the Issuer, the Bank or the Bondholders. The Partnership
will not suspend or discontinue any such payment or fail to perform and observe
any of its other agreements and covenants contained herein or terminate this
Lease Agreement for any cause whatsoever, including, without limiting the
generality of the foregoing, failure of the Issuer to complete the Project; any
acts or circumstances that may constitute an eviction or constructive eviction;
failure of consideration or commercial frustration of purpose; the invalidity
of, or of any provision contained in, this Lease Agreement, the Indenture or the
Bonds; or any damage to or destruction of the Project or any part thereof, or
the taking by eminent domain of title to or the right to temporary use of all or
any part of the Project; or any change in the tax or other laws or
administrative rulings, actions or regulations of the United States of America
or of the State or any political or taxing subdivision of either thereof; or any
failure of the Issuer to perform and observe any agreement or covenant, whether
express or implied, or any duty, liability or obligation arising out of or in
connection with this Lease Agreement. Notwithstanding the foregoing, the
Partnership may, at its own cost and expense and in its own name or in the name
of the Issuer, prosecute or defend any action or proceeding, or take any other
action involving third persons which the Partnership deems reasonably necessary
in order to secure or protect its rights of use and occupancy and the other
rights hereunder. The provisions of the first and second sentences of this
Section 5.05 shall apply only so long as any of the Bonds remain Outstanding.
(b) (1) Anything herein to the contrary notwithstanding, the obligation
and liability of each respective Partner, in his capacity as a general partner
of the Partnership, for payment of the Lease Payments is hereby expressly
limited to and shall not exceed that portion of the Lease Payments determined by
multiplying the same by the Percentage of Liability for such Partner set forth
opposite the name of such Partner below:
Name of Partner Percentage of Liability
Xxxxxx Lowelll Xxxxxxx 12.5%
Xxxxx X. Xxxxxxxx 12.5%
Xxxxxxx X. Xxxxx 12.5%
Xxxxxxx X. XxXxxxxx 12.5%
Xxxx Xxxxx Xxxxx 12.5%
Xxxxx X. Xxxxxxxx 12.5%
Xxxxxx X. Xxxxxx 12.5%
Xxxxx X. Xxxxxx, Xx. 12.5%
Xxxxxxxx X. Xxxxxx 12.5%
Xxxxxxxx X. Xxxx 6.25%
Xxxxxxx Xxxxxxx Xxxx 6.25%
(2) The Issuer, the Bank and the Bondholders recognize,
acknowledge and agree that, as a condition of and a consideration for the
execution and delivery of this Lease Agreement, the Issuer, the Bank and the
Bondholders shall have no recourse against any Partner for payment of any
portion of the Lease Payments in excess of the Percentage of Liability of such
Partner for such Lease Payments as set forth above.
(3) In the event any other provision of this Lease Agreement
is inconsistent or in conflict with the provisions of this Section 5.05(b), the
provisions of this Section 5.05(b) shall govern and control in all respects.
ARTICLE 6
Maintenance, Alterations, Replacements, Insurance; and
Environmental Compliance
SECTION 6.01 Maintenance and Repairs
(a) The Partnership will, at its own expense, (1) keep the Project in
as reasonably safe condition as operations permit, (2) from time to time make
all necessary and proper repairs, renewals and replacements thereto, and (3) pay
all gas, electric, water, sewer and other charges for the operation,
maintenance, use and upkeep of the Project.
(b) The Partnership will not permit any mechanics' or other liens to
stand against the Project or the Project Site for labor or material furnished
it. The Partnership may, however, in good faith contest any such mechanics' or
other liens and in such event may permit any such liens to remain unsatisfied
and undischarged during the period of such contest and any appeal therefrom
unless by such action the lien of the Indenture on the Project or any part
thereof, or the Project or any part thereof shall be subject to loss or
forfeiture, in either of which events such mechanics' or other liens shall be
promptly satisfied.
(c) The Partnership may, at its own expense, make structural changes,
additions, improvements, alterations or replacements to the Improvements that
they may deem desirable, provided that the Partnership demonstrate to the
satisfaction of the Bondholders that such additions, improvements, alterations
or replacements will not adversely affect the utility of the Project or
substantially reduce its value and will not change the character of the Project
as a "project" under the Enabling Law. In lieu of making such additions,
improvements or alterations itself, the Partnership may furnish to the Issuer
the funds necessary therefor, in which case the Issuer will proceed to make such
changes, additions, improvements, alterations or replacements. All such changes,
additions, improvements, alterations and replacements whether made by the
Partnership or the Issuer shall become a part of the Project and shall be
covered by this Lease Agreement and the Indenture.
(d) The Partnership may connect or "tie-in" walls of the Improvements
and utility and other facilities located on the Project Site to other structures
and facilities owned or leased by the Partnership on real property adjacent to
the Project Site. The Partnership may use as a party wall any wall of the
Improvements which is on or contiguous to the boundary line of real property
owned or leased by Partnership, and in the event of such use, each party hereto
hereby grants to the other a ten-foot easement adjacent to any such party wall
for the purpose of inspection, maintenance, repair and replacement thereof and
the tying in of new construction. If the Partnership utilizes any wall of the
Improvements as a party wall for the purpose of tying in new construction that
will be utilized under common control with the with the Project, the Partnership
may also remove any non- loadbearing wall panel in the party wall; provided,
however, if the adjacent property ceases to be operated under common control
with the Project, the Partnership will at its expense, install wall panels
similar in quality to those that have been removed. Prior to the exercise of any
one or more of the rights granted by this subsection (d), the Partnership shall
demonstrate to the satisfaction of the Bondholders that the operation of the
Project will not be adversely affected thereby.
(e) The Issuer will also, upon request of the Partnership, grant such
utility and other similar easements over, across or under the Project Site as
shall be necessary or convenient for the furnishing of utility and other similar
services to the Project or to real property adjacent to or near the Project
Site; provided that such easements shall not adversely affect the operation of
the facilities forming a part of the Project.
SECTION 6.02 Removal of, Substitution and Replacement for Equipment
The Issuer and the Partnership recognize that portions of the Equipment
may from time to time become inadequate, obsolete, wornout, unsuitable,
undesirable or unnecessary in the operation of the Project, but the Issuer shall
not be under any obligation to renew, repair or replace any such Equipment. If
the Partnership in its sole discretion determines that any item of Equipment has
become inadequate, obsolete, wornout, unsuitable, undesirable or unnecessary in
the operation of the Project, the Partnership may remove such Equipment from the
Project Site and (on behalf of the Issuer) sell, trade in, exchange or otherwise
dispose of it without any responsibility or accountability to the Issuer or the
Bondholders therefor, provided that the Partnership shall either substitute and
install in or on the Project Site other personal property or fixtures having
equal or greater utility (but not necessarily the same value or function) in the
operation of the Project, which such substituted personal property or fixtures
shall be: (a) free of all liens and encumbrances, (b) the sole property of the
Issuer, and (c) a part of the Equipment subject to the demise hereof and to the
lien of the Indenture held by the Partnership on the same terms and conditions
as the items originally comprising the Equipment; provided, however, such
removal and substitution shall not impair the operating unity of the Project or
change the nature of the Project as a "project" under the Enabling Law.
SECTION 6.03 Taxes, Other Governmental Charges and Utility Charges
(a) The Partnership will pay, as the same respectively become due, (1)
all taxes 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
other property installed or brought by the Partnership on the Project Site,
including without limitation any taxes levied on or with respect to the
revenues, income or profits of the Issuer from the Project and any other taxes
levied upon or with respect to the Project which, if not paid, will become a
lien on the Project prior to or on a parity with the lien of the Indenture or a
charge on the revenues and receipts from the Project prior to or on a parity
with the charge thereon and pledge or assignment thereof created and made in the
Indenture and including any ad valorem taxes assessed upon the Partnership
interest in the Project, and (2) all assessments and charges lawfully made by
any governmental body for public improvements that may be secured by a lien on
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 Partnership shall be obligated to pay only such installments as are
required to be paid during the Lease Term. The foregoing provisions of this
Section shall be effective only so long as any part of the principal of or the
interest on the Bonds remains Outstanding and unpaid.
(b) The Partnership may, at its expense and in its name and behalf or
in the name and behalf of the Issuer, in good faith contest any such taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments or other charges so contested to remain unpaid during the
period of such contest and any appeal therefrom, provided that during such
period enforcement of such contested items shall be effectively stayed. The
Issuer, at the expense of the Partnership, will cooperate fully with the
Partnership in any such contest.
SECTION 6.04 Insurance Required
(a) The Partnership will take out and continuously maintain in effect
the following insurance with respect to the Project, paying as the same become
due all premiums with respect thereto:
(1) Insurance to the extent of the full replacement cost of
the Project, unless the insurer certifies to the Bond- holders that the
insured amount will be sufficient to pay the Bonds in full after giving
effect to any co-insurance provision, against loss or damage by fire,
tornado and windstorm, with uniform standard extended coverage
endorsement limited only as may be provided in the standard form of
extended coverage endorsement at the time in use in the State.
(2) Insurance against liability for bodily injury to or death
of persons and for damage to or loss of property occurring on or about
the Project or in any way related to the condition or operation of the
Project, in the minimum amounts of $2,000,000 combined single limit for
any one occurrence and $2,000,000 in the aggregate for any one year.
(3) Flood insurance under the national flood insurance program
established by the Flood Disaster Protection Act of 1973, as at any
time amended, at all times while the Project is eligible under such
program, in a amount at least equal to the unpaid principal amount of
the Bonds or to the maximum limit of coverage made available with
respect to the Project under said Act, whichever is less.
(4) During the period of acquisition and construction of any
part of the Project, builders' risk insurance in the amount of the full
replacement value of the Project against all losses which are normally
covered by such builders' risk insurance. The Partnership may satisfy
their obligations with respect to the builder's risk insurance by
causing such insurance to be carried by a construction contractor
for any part of the Project.
(5) Use and occupancy insurance (or business interruption or
risk insurance) covering suspension or interruption of the Partnership
operations at the Project in whole or in part, with such exemptions as
are customarily imposed by insurers, covering a period of suspension or
interruption of at least six months with a minimum limit in an amount
equal to 100% of the maximum amount to be paid as Basic Rent,
additional rent and other payments under Section 5.02 hereof during the
then current or any subsequent year.
(b) All policies evidencing the insurance required by the terms of this
Section shall be taken out and maintained in generally recognized responsible
insurance companies, qualified under the laws of the State to assume the
respective risks undertaken. All such insurance policies shall name as insureds
the Issuer, the Bank on behalf of the Bondholders and the Partnership (as their
respective interests shall appear) and shall contain standard mortgage clauses
providing for all losses thereunder in excess of $25,000 to be paid jointly to
the Bank on behalf of the Bondholders and the Partnership; provided that all
losses (including those in excess of $25,000) may be adjusted by the
Partnership, subject, in the case of any single loss in excess of $25,000, to
the approval of the Bank on behalf of the Bondholders. The Partnership may
insure under a blanket policy or policies.
(c) Each insurance policy required to be carried by this Section shall
contain, to the extent obtainable, an agreement by the insurer that (1) the
Partnership may not, without the consent of the Bank on behalf of the
Bondholders, cancel or materially amend such insurance or sell, assign or
dispose of any interest in such insurance, such policy, or any proceeds thereof,
(2) such insurer will notify the Issuer and the Bank on behalf of the
Bondholders if any premium shall not be paid when due or any such policy shall
not be renewed prior to the expiration thereof, and (3) such insurer shall not
cancel any such policy except on thirty (30) days' prior written notice to the
Issuer and the Bank on behalf of the Bondholders.
(d) All policies evidencing the insurance required to be carried by
this Section shall be deposited with the Bank on behalf of the Bondholders;
provided, however, that in lieu thereof the Partnership may deposit with the
Bank on behalf of the Bondholders a certificate or certificates of the
respective insurers attesting the fact that such insurance is in force and
effect. Prior to the expiration of any such policy, the Partnership will furnish
to the Bank on behalf of the Bondholders evidence reasonably satisfactory to the
Bank on behalf of the Bondholders that such policy has been renewed or replaced
by another policy or that there is no necessity therefor under this Lease
Agreement.
(e) Anything in this Section to the contrary notwithstanding, the
Partnership shall have the right to change insurers from time to time as it
deems necessary or desirable.
SECTION 6.05 Installation By Partnership of Own Machinery
and Equipment
The Partnership may, at its own expense, install in the Improvements or
on the Project Site any personal property or fixtures which in the judgment of
the Partnership will facilitate the operation of the Project. Any such personal
property or fixtures which is so installed and does not constitute a
substitution or replacement for the Equipment pursuant to Section 6.02 hereof
shall be and remain the property of the Partnership and may be removed by the
same at any time and from time to time while there is no default under the terms
of this Lease Agreement; provided, however, that any damage to the Project
occasioned by such removal shall be repaired by the party removing such property
at its own expense.
SECTION 6.06 Environmental Compliance
(a) The Partnership shall (1) not, and shall not permit any other
person to, bring any Hazardous Substances onto the Project Site except any such
Hazardous Substances that are used in the ordinary course of the contemplated
businesses as to be conducted on the Project Site and that are handled, stored,
used and disposed of in accordance with applicable Environmental Laws; (2) if
any other Hazardous Substances are brought or found on the Project Site
immediately remove and properly dispose of the same in accordance with
applicable Environmental Laws; (3) cause the Project Site and the operations
conducted thereon (including all operations conducted thereon by other persons)
to comply with all Environmental Laws; (4) permit the Bondholders from time to
time to inspect the Project Site and observe the operations thereon; (5)
undertake any and all preventive, investigatory and remedial action (including
emergency response, removal, clean up, containment and other remedial action)
that is (A) required by any applicable Environmental Law or (B) necessary to
prevent or minimize any property damage (including damage to any of the Project
Site), personal injury, or harm to the environment, or the threat of any such
damage or injury, by releases of or exposure to Hazardous Substances in
connection with the Project Site or the operations on the Project Site; (6)
promptly give notice to the Bondholders in writing if the Partnership should
become aware of (A) any spill, release or disposal of any Hazardous Substances,
or imminent threat thereof, at the Project Site, in connection with the
operations on the Project Site, or at any adjacent property that could migrate
to, through or under the Project Site, (B) any violation of Environmental Laws
regarding the Project Site or operations on the Project Site, and (C) any
investigation, claim or threatened claim under any Environmental Law, or any
notice of violation under any Environmental Law, involving the Partnership or
the Project Site; and (7) deliver to the Bondholders, at the Bondholders
request, copies of any and all documents in the Partnership's possession or to
which the Partnership has access relating to Hazardous Substances or
Environmental Laws and the Project Site, and the operations on the Project Site,
including laboratory analyses, site assessments or studies, environmental audit
reports and other environmental studies and reports.
(b) If the Bondholders at any time reasonably believes that the
Partnership is not complying with all applicable Environmental Laws or the
requirements hereof regarding the same, or that a material spill, release or
disposal of Hazardous Substances has occurred on or under the Project Site, the
Bondholders may require the Partnership to furnish to the Bondholders an
environmental audit or site assessment reasonably satisfactory to the
Bondholders with respect to the matters of concern to the Bondholders. Such
audit or assessment shall be performed at the expense of the Partnership by a
qualified consultant approved by the Bondholders.
(c) The Partnership hereby warrants that, to the best of the
information, knowledge and belief thereof (1) there are no civil, criminal or
administrative environmental proceedings involving the Project Site that are
pending or to the knowledge of the Partnership threatened; (2) the Partnership
knows of no facts or circumstances that might give rise to such a proceeding in
the future; (3) the Project Site is in compliance with all applicable federal,
state and local statutory and regulatory environmental requirements; and (4) the
Project Site is free from any and all Hazardous Substances.
(d) The Partnership shall defend, indemnify and save harmless the
Issuer, the Bank and the Bondholders from and against any and all claims, causes
of action, judgments, damages, fines, penalties, and other losses, costs and
expense, including reasonable attorneys' fees and costs of investigation and
litigation, asserted against or suffered by the Bondholders that are related to
or arise out of or result from the presence of Hazardous Substances now or
hereafter on or under or included in the Project Site or in violation of any
Environmental Law, and any clean up or removal of, or other remedial action with
respect to, any Hazardous Substances now or hereafter located on or under or
included in the Project Site, or any part thereof, that may be required by any
Environmental Law or Governmental Authority. The provisions of this Section 6.06
shall survive the termination of this Lease Agreement with respect to claims and
losses asserted against or suffered by the Issuer, the Bank and the Bondholders.
ARTICLE 7
Provisions Respecting Damage,
Destruction and Condemnation
SECTION 7.01 Damage and Destruction
(a) If the Project or the Project Site is damaged to such extent that
the claim for loss resulting from such destruction or damage is not greater than
$25,000, the Partnership will continue to pay Basic Rent and all other
additional rent and payments required to be paid hereunder and will promptly
repair, rebuild or restore the property damaged and will apply for such purpose
so much as may be necessary of Net Proceeds of insurance resulting from claims
for such losses, as well as any additional moneys of the Partnership necessary
therefor. If the cost of such repairs, rebuilding and restoration is less than
the amount of Net Proceeds of the insurance referable thereto, the Partnership
may retain the amount by which such insurance proceeds exceed said total cost.
(b) If the Project or the Project Site is destroyed or is damaged to
such extent that the claim for loss resulting from such destruction or damage is
in excess of $25,000, the Partnership will continue to pay Basic Rent and all
other additional rent and payments required to be paid hereunder and will
promptly give written notice of such damage and destruction to the Bank for the
benefit of the Bondholders and the Issuer. All Net Proceeds of insurance
resulting from claims for such losses shall be paid to the Bank for the benefit
of the Bondholders, whereupon (1) the Partnership, or the Issuer at the
direction of the Partnership, will proceed promptly to repair, rebuild or
restore the property damaged or destroyed to substantially the same condition in
which it existed prior to the event causing such damage or destruction, with
such changes, alterations and modifications (including the substitution and
addition of other property) as may be desired by the Partnership and as will not
impair the operating unity of the Project or its character as a "project" under
the Enabling Law, and (2) the Bank for the benefit of the Bondholders will pay
the costs of such repair, rebuilding or restoration, either on completion
thereof, or as the work progresses, upon appropriate verification of costs. The
balance, if any, of Net Proceeds of insurance remaining after the payment of all
of the costs of such repair, rebuilding or restoration shall be applied to the
redemption of Bonds in whole or in part (depending on the amount of such excess)
in the same manner and order specified in Section 8.07 of the Indenture for
moneys collected or held by the Bank for the benefit of the Bondholders, or, if
the Bonds are fully paid, shall be paid to the Partnership.
(c) In the event the Net Proceeds of insurance are not sufficient to
pay in full the costs of repairing, rebuilding and restoring the Project as
provided in this Section, the Partnership will nonetheless complete the work
thereof and will pay that portion of the costs thereof in excess of the amount
of said Net Proceeds or will pay to the Bank for the benefit of the Bondholders
for the account of the Issuer the moneys necessary to complete said work. The
Partnership shall not by reason of the payment of such excess costs (whether by
direct payment thereof or payment to the Bank for the benefit of the Bondholders
therefor) be entitled to any reimbursement from the Issuer or any abatement or
diminution of the rents payable hereunder.
(d) Anything in this Section to the contrary notwithstanding, if as a
result of such damage or destruction (regardless of whether the loss resulting
therefrom is greater than $25,000 or not) the Partnership is entitled to
exercise an option to purchase the Project and duly do so in accordance with
Section 11.03 hereof, then neither the Partnership nor the Issuer shall be
required to repair, rebuild or restore the property damaged or destroyed, and so
much (which may be all) of any Net Proceeds referable to such damage or
destruction as shall be necessary to provide for full payment of the Bonds shall
be paid to the Bank for the benefit of the Bondholders and the excess thereafter
remaining (if any) shall be paid to the Partnership.
SECTION 7.02 Condemnation
(a) If title to, or the temporary use of, the Project or the Project
Site or any part thereof shall be taken under the exercise of the power of
eminent domain, the Partnership shall be obligated to continue to make the
rental and other payments required to be paid under this Lease Agreement, and
the entire Net Proceeds referable to such taking, including the amounts awarded
to the Issuer and the Bondholders and the amount awarded to the Partnership for
the taking of all or any part of the leasehold estate of the Partnership in the
Project, shall be paid to the Bank for the benefit of the Bondholders and
applied in one or more of the following ways as shall be directed in writing by
the Partnership:
(1) To the restoration of the remaining Improvements located
on the Project Site to substantially the same condition in which they
existed prior to the exercise of the power of eminent domain.
(2) To the acquisition by construction or otherwise, of other
structures, facilities and improvements suitable for the operations of
the Partnership (the same to be subject to this Lease Agreement and
the Indenture and be covered thereby) provided such acquisition shall
become a part of the Project and shall not result in the creation or
establishment of any liens or encumbrances on the Project prior to the
lien of the Indenture.
(b) In the event the Net Proceeds are not sufficient to fully provide
for the foregoing, the Partnership will nonetheless complete the work thereof
and will pay to the Bank for the benefit of the Bondholders for the account of
the Issuer that portion of the costs thereof in excess of the amount of the Net
Proceeds or will pay the moneys necessary to complete said work. The Partnership
shall not by reason of the payment of such costs (whether by direct payment
thereof or payment to the Bondholders therefor) be entitled to any reimbursement
from the Issuer or any abatement or diminution of the rents payable hereunder.
(c) Any balance of such Net Proceeds remaining after the application
thereof as provided in subsection (a) of this Section shall be applied to the
redemption of Bonds in whole or in part (depending on the amount of such excess)
in the same manner and order specified in Section 8.07 of the Indenture for
moneys collected or held by the Bank for the benefit of the Bondholders, or, if
the Bonds are fully paid, shall be paid to the Partnership.
(d) The Issuer shall cooperate fully with the Partnership in the
handling and conduct of any prospective or pending condemnation proceeding with
respect to the Project or any part thereof and will, to the extent it may
lawfully do so, permit the Partnership to litigate in any such proceeding in the
name and behalf of the Issuer. In no event will the Issuer settle, or consent to
the settlement of, any prospective or pending condemnation proceeding without
the prior written consent of the Partnership.
(e) Anything in this Section to the contrary notwithstanding, if as a
result of such taking, the Partnership is entitled to exercise an option to
purchase the Project and duly do so in accordance with Section 11.03 hereof,
then any Net Proceeds referable to such taking as shall be necessary to provide
for full payment of the Bonds shall be paid to the Bank for the benefit of the
Bondholders, and the excess thereafter remaining (if any) shall be paid to the
Partnership.
(f) The Partnership shall be entitled to the Net Proceeds of any award
or portion thereof made for damage to or taking of its own property not included
in the Project.
ARTICLE 8
Certain Provisions Relating to Assignment,
Subleasing, Mortgaging and Redemption of the Bonds
SECTION 8.01 Provisions Relating to Assignment and
Subleasing
The Partnership may assign this Lease Agreement and the leasehold
interest created hereby and may sublet the Project or any part thereof, subject,
however, to the following conditions:
(a) No such assignment or subleasing and no dealings or transactions
between the Issuer or the Bondholders and any assignee or sublessee shall in any
way relieve the Partnership from primary liability for any of its obligations
hereunder. In the event of any such assignment or subleasing the Partnership
shall continue to remain primarily liable for the payment of all rentals herein
provided to be paid by it and for the performance and observance of the other
agreements and covenants on its part herein provided to be performed and
observed by it.
(b) The Partnership will not assign the leasehold interest created
hereby nor sublease the Project or any part thereof to any person, firm,
partnership, corporation or entity of any description whatsoever unless the
operations of such assignee or sublessee are consistent with, and in furtherance
of, the purpose of the Enabling Law.
(c) The Partnership shall furnish to the Issuer and the Bank for the
benefit of the Bondholders a true and complete copy of each such assignment or
sublease promptly after the delivery thereof and shall assign its rights
thereunder to the Issuer and the Bank for the benefit of the Bondholders as
additional security for the obligations of the Partnership hereunder.
SECTION 8.02 Assignment of Lease Agreement and Rents by the Issuer
(a) The Issuer has, simultaneously with the delivery of this Lease
Agreement, assigned its interest in and pledged any money receivable under this
Lease Agreement (other than certain rights to indemnification and reimbursement)
to the Bank for the benefit of the Bondholders as security for payment of the
principal of and the interest on the Bonds and the Partnership hereby consents
to such assignment and pledge. The Issuer has in the Indenture obligated itself
to follow the instructions of the Bondholders in the election or pursuit of any
remedies herein vested in it. The Bondholders shall have all rights and remedies
herein accorded to the Issuer and any reference herein to the Issuer shall be
deemed, with the necessary changes in detail, to include the Bondholders, and
the Bondholders are deemed to be a third party beneficiary of the covenants,
agreements and representations of the Partnership herein contained.
(b) Prior to the payment in full of the Bonds, the Issuer and the
Partnership shall have no power to modify, alter, amend or terminate this Lease
Agreement without the prior written consent of the Bondholders. The Issuer will
not amend the Indenture or any indenture supplemental thereto without the prior
written consent of the Partnership. Neither the Issuer nor the Partnership will
unreasonably withhold any consent herein or in the Indenture required of either
of them.
(c) The Partnership shall not be deemed to be a party to the Indenture
or the Bonds, and reference in this Lease Agreement to the Indenture and the
Bonds shall not impose any liability or obligation upon the Partnership other
than its specific obligations and liabilities undertaken in this Lease
Agreement.
SECTION 8.03 Restrictions on Mortgage or Sale of Project by
Issuer; Consolidation or Merger of, or Transfer of Assets by, Issuer
Except as provided in the Indenture, the Issuer will not mortgage,
sell, assign, transfer, convey or grant a security interest in the Project, or
merge or consolidate with, or transfer its assets to, any person.
SECTION 8.04 Redemption of Bonds
(a) Upon the occurrence of any event which gives rise to any mandatory
redemption of Bonds, the Issuer will redeem any or all of the same in accordance
with the respective provisions thereof and the Indenture.
(b) If the Bonds are subject to optional redemption, the Issuer will,
but only upon the written request of the Partnership, redeem the same in
accordance with the respective provisions thereof and the Indenture.
(c) On any redemption or prepayment date with respect to the Bonds, the
Partnership shall pay to the Bank for the benefit of the Bondholders for the
account of the Issuer the applicable redemption price with respect to the Bonds.
ARTICLE 9
Covenants of the Partnership and the Partners
SECTION 9.01 Covenants of the Partnership
The Partnership hereby covenants and agrees that, so long as the Bonds
are Outstanding:
(a) The Partnership will not do or permit anything to be done at the
Project that will affect, impair or contravene any policies of insurance that
may be carried on or with respect to the Project or any part thereof. The
Partnership will comply with all valid laws, regulations, ordinances, and
requirements applicable to the Project.
(b) The Partnership will permit the Issuer, the Bondholders, and their
respective duly authorized agents at all reasonable times to enter upon, examine
and inspect the Project and in the event of default as hereinafter provided, the
Partnership will permit a public accountant or firm of public accountants
designated by any Bondholder to have access to, inspect, examine and make copies
of the books and records, accounts and data of the Partnership.
(c) The Partnership will maintain proper books of record and account,
in which full and correct entries will be made, in accordance with generally
accepted accounting principles, of all its business and affairs. The Partnership
shall furnish to the Issuer and to the Bondholders with reasonable promptness
such financial statements and data as may be reasonably requested thereby,
including without limitation annual financial statements of the Partnership and
annual operating statements with respect to the Project.
(d) The Partnership will maintain and preserve its existence as a
general partnership under the laws of the State of Alabama and will not
voluntarily dissolve without first discharging its obligations under this Lease
Agreement and will comply with all valid laws, ordinances, regulations and
requirements applicable to it or to its property and the Project.
(e) The Partnership will not transfer or dispose of all, substantially
all, or any substantial portion, of it assets (either in a single transaction or
in a series of related transactions) without the prior written consent of the
Bondholders.
(f) The Partnership will not sell, assign, mortgage, pledge, transfer
or convey all or any part of its interest in this Lease Agreement or in the
Project, provided, however the foregoing shall not impair or restrict the right
of the Partnership as elsewhere permitted under this Lease Agreement to assign
this Lease Agreement and the leasehold interest created hereby or to sublet the
Project or any part thereof.
(g) The Partnership will duly pay and discharge all taxes, assessments
and other governmental charges and liens lawfully imposed on the Partnership,
upon the properties and interests of the Partnership, and the Project.
(h) The Partnership shall file, record, refile and rerecord all
financing statements, continuation statements, documents or other notices as are
necessary to perfect and to maintain the Issuer's title to and interest in the
Project and to perfect and maintain the security interest of the Bondholders in
the Project and shall submit evidence of such filing, recording, refiling and
rerecording to the Bondholders.
(i) The Partnership hereby represents and warrants that (1) the
execution and delivery of this Lease Agreement and the Guaranty will
not involve any prohibited transactions within the meaning of ERISA or
Section 4975 of the Internal Revenue Code, as amended; (2) based upon
ERISA and the regulations and published interpretations thereunder,
the Partnership is in compliance in all material respects with the
applicable provisions of ERISA; (3) no "Reportable Event" as defined
in Section 4043(b) of Title IV of ERISA, has occurred with respect
to any plan maintained by the Partnership; and (4) there are no liens
on the real or personal property of the Partnership pursuant to
Section 4068 of ERISA.
SECTION 9.02 Covenants of the Partners
Each of the Partners, by his execution and delivery of the Guaranty in
his capacity as a general partner of the Partnership, does hereby covenant and
agree individually as follows:
(a) Such Partner will maintain proper books of record and account in
accordance with generally accepted accounting principles, of all his business
and affairs and shall furnish to the Bondholders with reasonable promptness such
financial information relative to such Partner as the Bondholders shall
reasonably request; and
(b) Such Partner will not transfer or convey any substantial portion of
his property, assets or licenses without receipt of consideration therefor
consisting of the fair market value thereof.
ARTICLE 10
Events of Default and Remedies
SECTION 10.01 Events of Default Defined
The following shall be events of default under this Lease Agreement and
the term "event of default" shall mean, whenever used in this Lease Agreement,
any one or more of the following events:
(1) Failure to pay any installment of Basic Rent, or any other amount
due and payable under Section 5.02(a) hereof, that has become due and payable by
the terms of this Lease Agreement and such failure continues for a period of
three Business Days after such payment becomes due.
(2) Failure by the Partnership to observe and perform any covenant,
condition or agreement on its part to be observed or performed pursuant to this
Lease Agreement or the Guaranty, other than as referred to in subsection (a) of
this Section, for a period of fifteen days after written notice, specifying such
failure and requesting that it be remedied, given to the Partnership by the
Issuer, the Bank or the Bondholders, provided that if such default is of a kind
which cannot reasonably be cured within such fifteen- day period, the
Partnership shall have a reasonable period of time within which to cure such
default, provided that it begin to cure the default promptly after its receipt
of such written notice and proceeds in good faith, and with due diligence, to
cure such default.
(3) The dissolution or liquidation of the Partnership; or the filing by
the Partnership or any of the Partners of a voluntary petition in bankruptcy; or
failure by the Partnership or any of the Partners promptly to lift any
execution, garnishment or attachment of such consequence as will impair the
ability of the same to perform its or his obligations hereunder; the Partnership
or any of the Partners seeking of or consenting to or acquiescing in the
appointment of a receiver of all or substantially all the property thereof or of
the Project; or the adjudication of the Partnership or any of the Partners as a
bankrupt; or any assignment by the Partnership or any of the Partners for the
benefit of its or his creditors; or the entry by the Partnership or any of the
Partners into an agreement of composition with its or his creditors; or if a
petition or answer is filed by the Partnership or any of the Partners proposing
the adjudication of the same as a bankrupt or its or his reorganization,
arrangement or debt readjustment under any present or future federal bankruptcy
code or any similar federal or state law in any court; or if any such petition
or answer is filed by any other person and such petition or answer shall not be
stayed or dismissed within one hundred twenty days.
(4) Any warranty, representation or other statement by or on behalf of
the Partnership and contained in this Lease Agreement or in the Guaranty or in
any other document or certificate furnished by the Partnership in connection
with the issuance of the Bonds shall be false, untrue or misleading in any
material respect at the time made and the same shall not be made good or
remedied within thirty days after written notice thereof to the Partnership by
the Bondholders, the Bank or the Issuer.
(5) An event of default under the Indenture or the Guaranty.
SECTION 10.02 Remedies on Default
Whenever any such event of default shall have happened and be
continuing, the Bondholders (or the Bank on their behalf) may take any of the
following remedial steps:
(1) Declare all installments of Basic Rent, and any other payments to
be paid under Section 5.02(a) hereof, payable under this Lease Agreement for the
remainder of the Lease Term to be immediately due and payable, whereupon the
same shall become immediately due and payable.
(2) Reenter the Project Site, without terminating this Lease Agreement,
and, upon ten days' prior written notice to the Partnership, relet the Project
or any part thereof for the account of the Partnership, for such term (including
a term extending beyond the Lease Term) and at such rentals and upon such other
terms and conditions, including the right to make alterations to the Project or
any part thereof, as the Bondholders (or the Bank on their behalf) may deem
advisable, and such reletting of the Project shall not be construed as an
election to terminate this Lease Agreement nor relieve the Partnership of its
obligations to pay Basic Rent and additional rent or to perform any of their
other obligations under this Lease Agreement, all of which shall survive such
reentry and reletting, and the Partnership shall continue to pay Basic Rent and
all additional rent provided for in this Lease Agreement until the end of the
Lease Term, less the net proceeds, if any, of any reletting of the Project after
deducting all expenses of the Bondholders (or the Bank on their behalf) in
connection with such reletting, including, without limitation, all repossession
costs, brokers' commissions, attorneys' fees, alteration costs and expenses of
preparation for reletting.
(3) Terminate this Lease Agreement, exclude the Partnership from
possession of the Project and, if the Bondholders (or the Bank on their behalf)
elect so to do, lease the same for the account of the Issuer, holding the
Partnership liable for all rent due up to the date such lease is made for the
account of the Issuer.
(4) Have and exercise with respect to any or all personal property and
fixtures included in the Project, all rights, remedies and powers of a secured
party under the Alabama Uniform Commercial Code including without limitation the
rights and powers set forth in the Indenture with respect thereto. To the extent
permitted by law, the Partnership expressly waives any notice of sale or
disposition of the Project and any rights or remedies of the Bondholders or
Issuer with respect to, and the formalities prescribed by law relative to, the
sale or disposition of the Project or to the exercise of any other right or
remedy of the Bondholders or Issuer existing after default. To the extent that
such notice is required and cannot be waived, the Partnership agrees that if
such notice is given to the Partnership in accordance with the provisions
hereof, at least ten days before the time of the sale or other disposition, such
notice shall be deemed reasonable and shall fully satisfy any requirements for
giving said notice.
(5) Take whatever legal proceedings may appear necessary or desirable
to collect the rent then due, whether by declaration or otherwise, or to enforce
any obligation or covenant or agreement of the Partnership under this Lease
Agreement or by law.
SECTION 10.03 No Remedy Exclusive
No remedy herein conferred upon or reserved to the Issuer or the
Bondholders 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 Agreement 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
or power may be exercised from time to time and as often as may be deemed
expedient.
SECTION 10.04 Agreement to Pay Attorneys' Fees and Expenses
In the event the Partnership should default under any of the provisions
of this Lease Agreement and the Issuer or the Bank or the Bondholders (in their
own names or in the name and on behalf of the Issuer) 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
Partnership herein contained, the Partnership will on demand therefor pay to the
Issuer, the Bank or the Bondholders (as the case may be) the reasonable fee of
such attorneys and such other expenses.
SECTION 10.05 No Additional Waiver Implied by One Waiver
In the event any agreement contained in this Lease Agreement should be
breached by either party and thereafter waived by the other party, such waiver
shall be limited to the particular breach so waived and shall not be deemed to
waive any other breach hereunder.
SECTION 10.06 Remedies Subject to Applicable Law
All rights, remedies and powers provided by this Article may be
exercised only to the extent the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Article are intended to be subject to all applicable mandatory provisions of law
which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Lease Agreement invalid or
unenforceable.
ARTICLE 11
Options
SECTION 11.01 Options to Terminate
The Partnership shall have, if not in default hereunder, the option to
cancel or terminate this Lease Agreement at any time after full payment of the
Bonds by giving the Issuer notice in writing of such termination and such
termination shall forthwith become effective.
SECTION 11.02 Option to Renew
There shall be no option to renew the term of this Lease Agreement.
SECTION 11.03 Option to Purchase Project Prior to Payment of
the Bonds
Anything in this Lease Agreement to the contrary notwithstanding, the
Partnership shall, if not in default hereunder, have the option to purchase the
Project at any time prior to the full payment of all Bonds Outstanding, if any
of the following shall have occurred:
(a) The Project or the Project Site or any part thereof shall have been
damaged or destroyed (1) to such extent that, in the opinion of the Partnership,
it cannot be reasonably restored within a period of two consecutive months
substantially to the condition thereof immediately preceding such damage or
destruction, or (2) to such extent that, in the opinion of the Partnership, the
Partnership is thereby prevented from carrying on its normal operations at the
Project for a period of two consecutive months; or (3) to such extent that the
cost of restoration thereof would exceed the Net Proceeds of insurance carried
thereon pursuant to the requirements of this Lease Agreement; or
(b) Title to the Project or the Project Site or any part thereof or the
leasehold estate of the Partnership in the Project created by this Lease
Agreement or any part thereof 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, which taking may result in the
Partnership being thereby prevented from carrying on its normal operations at
the Project or the Project Site for a period of two consecutive months; or
(c) As a result of any changes in the Constitution of the State or the
Constitution of the United States of America or of legislative or administrative
action (whether state or Federal), or by final decree, judgment or order of any
court or administrative body (whether state or Federal) entered after the
contest thereof by the Partnership in good faith, this Lease Agreement shall
have become void or unenforceable or impossible of performance in accordance
with the intent and purpose of the parties as expressed herein, or unreasonable
burdens or excessive liabilities shall have been imposed on the Issuer or the
Partnership, including without limitation, the imposition of taxes of any kind
on the Project or the income or profits of the Issuer therefrom, or upon the
interest of the Partnership therein, which taxes were not being imposed on the
date of this Lease Agreement.
To exercise such option, the Partnership shall, within sixty days
following the event authorizing the exercise of such option, give written notice
to the Issuer and to the Bank for the benefit of the Bondholders and shall
specify therein the date of closing such purchase. The purchase price payable by
the Partnership in the event of the exercise of the option granted in this
Section shall be such an amount as shall be required to prepay the entire unpaid
principal amount of all Bonds then Outstanding, together with interest thereon
to the date of such payment, in the same manner and order as specified in
Section 8.07 of the Indenture. The prepayment price shall be paid by the
Partnership to the Bank for the benefit of the Bondholders.
Upon the exercise of the option granted herein and the prepayment of
the Bonds as provided in this Section, any Net Proceeds of insurance or
condemnation award then on hand or thereafter received shall be paid to the
Partnership.
SECTION 11.04 Option to Purchase Project After Payment of the Bonds
If no Event of Default exists hereunder, the Partnership shall have the
option to purchase the Project at any time following full payment of the Bonds
for a purchase price of one hundred dollars plus the expenses of the Issuer
incurred in connection therewith. To exercise the option granted in this
Section, the Partnership shall notify the Issuer of its intention so to exercise
such option prior to the proposed date of purchase and shall on the date of
purchase pay such purchase price to the Issuer. In the event the option granted
in this Section 11.04 has not been exercised prior to the end of the Lease Term,
then said option shall automatically be considered to be exercised upon the end
of the Lease Term.
SECTION 11.05 Option to Purchase Unimproved Project Site
(a) The Partnership, if not in default hereunder, shall also have the
option to purchase any Unimproved part of the Project Site at any time and from
time to time at and for a purchase price equal to the pro rate cost thereof to
the Issuer, provided that they furnish the Issuer and the Bank for the benefit
of the Bondholders with the following:
(i) A notice in writing containing (1) an adequate legal description of
that portion of the Project Site with respect to which such option is
to be exercised, which portion may include rights granted in party
walls, the right to "tie-into" existing utilities, the right to connect
and join any building, structure or improvement with existing
Improvements on the Project Site, and the right of ingress or egress to
and from the public highway which shall not interfere with the use and
occupancy of existing Improvements, (2) a statement that the
Partnership intends to purchase such portion of the Project Site on a
date stated, (3) a description of the buildings, structures, or
improvements to be erected on the portion to be purchased and (4) a
statement that the use to which such portion of the Project Site will
be devoted will be in furtherance of the purpose for which the Issuer
was organized.
(ii) A certificate of an Independent Engineer dated not more than
ninety days prior to the date of the purchase and stating that, in the
opinion of the person signing such certificate, (1) the portion of the
Project Site with respect to which the option is exercised is not
needed for the operation of the Project, (2) the buildings, structures
or improvements described in the above certificate can be constructed
on the real property to be purchased and (3) the severance of such
portion of the Project Site from the Project and the construction
thereon of the buildings, structures nd improvements above referred
to will not impair the usefulness of the Improvements or the means of
ingress thereto and egress therefrom.
(iii) An amount of money equal to the purchase price computed as
provided in this Section, which amount shall be applied to the
prepayment of the principal of the Bonds on the earliest Business Day
for which the required notice may be given, as provided in the Bonds.
(b) Upon receipt by it of the notice and certificate required in this
Section to be furnished by the Partnership and the payment by the Partnership to
the Bank for the benefit of the Bondholders of the purchase price, the Issuer
will promptly deliver to the Partnership the documents referred to in Section
11.06 hereof and will secure from the Bank a release from the lien of the
Indenture of the portion of the Project Site with respect to which the
Partnership shall have exercised the option granted in this Section.
(c) If such option relates to a portion of the Project Site on which
transportation or utility facilities are located, the Issuer shall retain an
easement to use such transportation or utility facilities to the extent
necessary for the efficient operation of the Project.
(d) No purchase effected under the provisions of this Section shall
affect the liability or the obligation of the Partnership for the payment of
Basic Rent and additional rent in the amounts and at the times provided in this
Lease Agreement or the performance of any other agreement, covenant or provision
hereof, and there shall be no abatement or adjustment in rent by reason of the
release of any such realty except as specified in this Section and the
obligation and the liability of the Partnership shall continue in all respects
as provided in this Lease Agreement, excluding, however, any realty so
purchased.
SECTION 11.06 Conveyance on Exercise of Option to Purchase
At the closing of the purchase pursuant to the exercise of any option
to purchase granted herein, the Issuer will upon receipt of the purchase price
deliver to the Partnership documents conveying to the Partnership the property
with respect to which such option was exercised, as such property then exists,
subject to the following: (1) those liens and encumbrances, if any, to which
title to said property was subject when conveyed to the Issuer; (2) these liens
and encumbrances created by the Partnership or to the creation or suffering of
which the Partnership consented; and (3) those liens and encumbrances resulting
from the failure of the Partnership to perform or observe any of the agreements
on its part contained in this Lease Agreement.
ARTICLE 12
INTERNAL REVENUE CODE
SECTION 12.01 Covenants Regarding the Code.
The parties hereto recognize that the Bonds are being sold on the basis
that the interest payable on the Bonds is excludable from gross income of the
Bondholders for federal income taxation under Section 103 of the Internal
Revenue Code of 1986, as amended (the "Code"). The Issuer and Partnership do
each hereby covenant and agree with the Bondholders that neither the Partnership
nor the Issuer will take any action, or omit to take any action, permit any
action to be taken, or fail to require any action to be taken, with respect to
the Project or the Bonds, that would cause the interest on the Bonds to be or
become includable in the gross income of the registered owners thereof for
federal income taxation, and further covenant and agree that: (i) the proceeds
of the Bonds shall not be used or applied in such manner as to cause any Bond to
be or become an "arbitrage bond" as that term is defined in Section 148 of the
Code; (ii) ninety-five percent (95%) or more of the net proceeds of the Bonds
will be used for the acquisition, construction, reconstruction, or improvement
of land or property of a character subject to the allowance for depreciation,
within the meaning of Section 144 of the Code; (iii) the proceeds of the Bonds
will be used for the acquisition, construction and equipping of the Project
or for issuance expenses with respect to the Bonds, or shall be rebated to the
United States of America as provided in the Indenture, and no part of the
proceeds of the Bonds are to be used by the Partnership, directly or indirectly,
for working capital, or to finance inventory, or to acquire any facility or
asset which may not, under the Code, be financed in whole or in part with the
proceeds of obligations the interest on which is excludable from gross income
for federal income taxation; (iv) the proceeds of the Bonds shall not be used
for the acquisition, construction, reconstruction or improvement of any property
which would cause the average maturity of the Bonds to exceed 120 percent of the
average reasonably expected economic life of the facilities financed with the
net proceeds of the Bonds, within the meaning of Section 147(b) of the Code; (v)
neither the Bonds nor any of the proceeds therefrom shall ever be federally
guaranteed, within the meaning of Section 149(b) of the Code, except as
expressly provided in said Section 149(b); (vi) none of the proceeds of the
Bonds shall be used to acquire (directly or indirectly) any land (or any
interest therein) to be used for farming purposes; (vii) less than twenty- five
percent (25%) of the proceeds of the Bonds shall be used to acquire (directly or
indirectly) any land (or any interest therein); (viii) none of the net proceeds
of the Bonds shall be used to acquire any property, or any interest therein
(including without limitation buildings, structures, facilities, improvements,
equipment, machinery or other personal property) the first use of which property
was not pursuant to such acquisition with the proceeds of the Bonds; (ix) no
person shall ever be allowed to use, occupy, or otherwise derive any benefit
whatsoever from the Project, or any part thereof, if the effect thereof shall
result in a test period beneficiary (as defined in Section 144(a) (10) of the
Code) having allocated to it and outstanding tax-exempt facility- related bonds
(as defined in Section 144(a) (10) of the Code) in an aggregate principal amount
exceeding $40,000,000; and (x) no more than two percent (2%) of the proceeds of
the Bonds shall be used to finance the issuance costs of the Bonds; (xi) during
the applicable period, the $10,000,000 limit on bonds and capital expenditures
as set forth in Section 144(a)(4) shall not be exceeded; and (xii) the proceeds
of the Bonds shall not be used for the payment of any Project Cost paid or
incurred prior to the date of the Inducement Agreement (September 12, 1992) and
the Bonds are being issued within not more than one year after completion of the
Project.
SECTION 12.02 Partnership's Obligation If Interest on the Bonds Is
Determined To Be Includable in Gross Income for Federal Income Taxation.
(a) If the Commissioner of Internal Revenue makes a determination that
interest on the Bonds is not excludable from gross income for federal income
taxation pursuant to Section 103 for any reason other than the operation of
Section 147(a) of the Code, and the Partnership exhausts (at its sole expense)
or fails to pursue in a timely manner any administrative or judicial remedy
available to it with respect to such determination, the Issuer or the
Bondholders shall notify the Partnership in writing that all outstanding Bonds
shall be prepaid on the next practicable interest payment date, irrespective of
whether the Partnership has violated any covenant or representation in this
Lease Agreement. Within thirty days after the receipt of such notice the
Partnership shall either
(i) purchase the Project from the Issuer for the price specified in
subsection (b) of this Section, which purchase price shall be paid to
the Bank for the benefit of the Bondholders, or
(ii) pay to the Bank for the benefit of the Bondholders the sum
specified in subsection (b) of this Section, in which event the
Partnership shall be entitled to the use and occupancy of the Project
until the expiration of the term provided for herein without the
payment of any further rent, but otherwise on all of the terms and
conditions hereof, except that the Partnership shall not be required to
carry any insurance for the benefit of the Bondholders.
Any other options of the Partnership to purchase the Project shall be superseded
by its mandatory obligation to elect one of the alternatives set forth in this
subsection (a).
(b) The price payable by the Partnership for the Project in the event
interest on the Bonds is determined to be includable in gross income for federal
income taxation as provided in subsection (a), or the amount payable to the Bank
for the benefit of the Bondholders in lieu of purchasing the Project, shall be
equal to the sum of the following:
(i) the principal amount of all outstanding Bonds plus accrued
interest thereon to the date of their prepayment;
(ii) the Bank's fees and expenses under the Indenture accrued and to
accrue until the prepayment of all Bonds; and
(iii) a premium for each Bond the interest on which has been
determined to be taxable (whether or not such Bond has matured) equal
to 3% of the principal amount of such Bond determined to be taxable.
(c) Upon payment by the Partnership of the amount specified in
subsection (b) of this Section, the Issuer shall call the outstanding Bonds for
prepayment on the next practicable interest payment date. The Issuer shall cause
the Bank to pay to the registered owner of each Bond being prepaid, in addition
to the principal amount of such Bond and the interest accrued thereon to the
prepayment date, that portion of the premium (calculated under clause (iii) of
subsection (b) of this Section) allocable to such Bond, and the Issuer shall
cause the Bank to pay to the last registered owner of each taxable Bond all or a
portion of the principal amount of which has already matured, the premium
(calculated under clause (iii) of subsection (b) of this Section) allocable to
such taxable principal amount of such Bond.
SECTION 12.03 Federal Rebate Payments.
The provisions of Article 9 of the Indenture with respect to federal
rebate payments are incorporated herein by reference, and the Partnership shall
comply with said provisions and shall perform and discharge all obligations,
duties and responsibilities imposed upon the Partnership under said Article,
including without limitation the payment of all required rebates to the United
States of America and the maintenance of all records with respect thereto.
IN WITNESS WHEREOF, the Issuer has caused this Lease Agreement to be
executed in its name and its seal to be hereunto affixed and the same to be
attested, all by its duly authorized officers, and the Partnership has caused
this Lease Agreement to be executed by all of its general partners, and the
parties hereto have caused this Lease Agreement to be dated as of February 1,
1994.
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE TOWN OF ADDISON
By /S/ XXXXXXX SUDDERT
-----------------------------
Its Chairman
S E A L
Attest: /S/ XXXX XXXXX
-------------------------
Its Secretary
WINSTON COUNTY INDUSTRIAL DEVELOPMENT ASSOCIATION
(an Alabama general partnership)
By /S/ XXXXX X. XXXXXXXX
-----------------------------
Xxxxx X. Xxxxxxxx, A General Partner
on behalf of said Partnership
STATE OF ALABAMA )
)
WINSTON COUNTY )
I, the undersigned, a Notary Public in and for said County in said
State, hereby certify that Xxxxxxx Xxxxxxx, whose name as Chairman of the Board
of Directors of The Industrial Development Board of the Town of Addison, a
public corporation, is signed to the foregoing Lease Agreement and who is known
to me, acknowledged before me on this day that, being informed of the contents
of said Lease Agreement, he, as such officer and with full authority, executed
the same voluntarily for and as the act of said public corporation.
Given under my hand and seal this the 28th day of February, 1994.
/S/ XXX XXX XXXXXX
----------------------------
Notary Public
NOTARIAL SEAL
My commission expires: 7/16/95
------------
STATE OF ALABAMA )
)
JEFFERSON)COUNTY )
I, undersigned, a Notary Public in and for said County in said State,
hereby certify that Xxxxx X. Xxxxxxxx whose name as a general partner of Winston
County Industrial Development Association, an Alabama general partnership, is
signed to the foregoing Lease Agreement and who is known to me, acknowledged
before me on this day that, being informed of the contents of said Lease
Agreement, he, as such general partner and with full authority, executed the
same voluntarily for and as the act of said general partnership.
Given under my hand and seal this the 1st day of March, 1994.
/S/ XXXXXXX XXXXX
------------------------------
Notary Public
NOTARIAL SEAL
My commission expires: 3/14/97
----------
LEASE AGREEMENT
------------------------------------------------------------------
Dated as of February 1, 1994
Between
The Industrial Development Board
of the Town of Addison
and
Winston County Industrial Development Association
(an Alabama general partnership)
------------------------------------------------------------------
This Lease Agreement was prepared by Xxxxxxx Xxxxx of Walston,
Stabler, Xxxxx, Xxxxxxxx & Xxxxx, Financial Center, 000 Xxxxx 00xx
Xxxxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxx 00000
------------------------------------------------------------------
EXHIBIT A
to
Lease Agreement
dated as of
February 1, 1994
from
The Industrial Development Board
of the Town of Addison
to
Winston County Industrial Development Association
--------------------------------------------------------
Heating and air conditioning equipment and facilities,
electrical equipment and facilities, fire suppression and extinguishment
equipment and facilities, plumbing fixtures, and building materials and
supplies, installed in or about or incorporated in the Project.
TABLE OF CONTENTS
Page
Parties....................................................................... 1
Recitals...................................................................... 1
ARTICLE 1
Definitions and Other Provisions
of General Application
SECTION 1.01 Definitions......................................... 2
SECTION 1.02 Date of Lease Agreement............................. 7
SECTION 1.03 Separability Clause................................. 7
SECTION 1.04 Effect of Headings and Table of
Contents................................................... 7
SECTION 1.05 Successors and Assigns.............................. 7
SECTION 1.06 Governing Law....................................... 7
SECTION 1.07 Execution Counterparts.............................. 7
SECTION 1.08 Covenant of Quiet Enjoyment......................... 8
SECTION 1.09 Issuer's Liabilities Limited........................ 8
SECTION 1.10 Prior Agreements Canceled........................... 8
SECTION 1.11 Notices............................................. 8
SECTION 1.12 The Special Funds................................... 9
ARTICLE 2
Representations and Warranties
SECTION 2.01 Representations by the Issuer....................... 9
SECTION 2.02 Representations by the Partnership.................. 9
ARTICLE 3
Demising Clauses............................ 10
ARTICLE 4
The Project
SECTION 4.01 Acquisition of Project; Payment of Excess
Project Costs............................ 11
SECTION 4.02 No Warranty of Suitability by Issuer................ 13
SECTION 4.03 Issuer to Pursue Remedies Against
Vendors, andtractors and Subcontractors and
Their Sureties............................................. 13
SECTION 4.04 Completion of the Project........................... 14
SECTION 4.05 Title Insurance..................................... 14
ARTICLE 5
Duration of Lease Term
and Rental Provisions
SECTION 5.01 Duration of Term.................................... 15
SECTION 5.02 Rental and Payment Provisions; Net
Lease...................................................... 15
SECTION 5.03 Advances by Issuer or Bondholders................... 16
SECTION 5.04 Indemnity of Issuer and Bondholders................. 16
SECTION 5.05 Obligations of Partnership Unconditional;
Limited Recourse Against Partners................... 17
ARTICLE 6
Maintenance, Alterations, Replacements, Insurance; and
Environmental Compliance
SECTION 6.01 Maintenance and Repairs............................. 19
SECTION 6.02 Removal of, Substitution and Replacement
for Equipment............................ 20
SECTION 6.03 Taxes, Other Governmental Charges and
Utility Charges............................................ 21
SECTION 6.04 Insurance Required.................................. 21
SECTION 6.05 Installation By Partnership of Own
Machinery and Equipment.................................... 23
SECTION 6.06 Environmental Compliance............................ 23
ARTICLE 7
Provisions Respecting Damage,
Destruction and Condemnation
SECTION 7.01 Damage and Destruction.............................. 25
SECTION 7.02 Condemnation............. .......................... 26
ARTICLE 8
Certain Provisions Relating to Assignment,
Subleasing, Mortgaging and Redemption of the Bonds
SECTION 8.01 Provisions Relating to Assignment and
Subleasing............................... 28
SECTION 8.02 Assignment of Lease Agreement and Rents
by the Issuer..................... ...... 28
SECTION 8.03 Restrictions on Mortgage or Sale of
Project by Issuer;Consolidation or Merger
of, or Transfer ofIssuers by, ............................. 29
SECTION 8.04 Redemption of Bonds................................. 29
ARTICLE 9
Covenants of the Partnership and the Partners
SECTION 9.01 Covenants of the Partnership........................ 29
SECTION 9.02 Covenants of the Partners........................... 31
ARTICLE 10
Events of Default and Remedies
SECTION 10.01 Events of Default Defined........................... 31
SECTION 10.02 Remedies on Default................................. 33
SECTION 10.03 No Remedy Exclusive ................................ 34
SECTION 10.04 Agreement to Pay Attorneys' Fees and
Expenses .................................................. 34
SECTION 10.05 No Additional Waiver Implied by One
Waiver .................................................... 34
SECTION 10.06 Remedies Subject to Applicable Law.................. 34
ARTICLE 11
Options
SECTION 11.01 Options to Terminate................................ 35
SECTION 11.02 Option to Renew..................................... 35
SECTION 11.03 Option to Purchase Project Prior to
Payment of the Bonds....................................... 35
SECTION 11.04 Option to Purchase Project After Payment
of the Bonds........................................ 36
SECTION 11.05 Option to Purchase Unimproved Project Site ........ 36
SECTION 11.06 Conveyance on Exercise of Option to
Purchase ................................................. 38
Testimonium...................................................................34
Signatures....................................................................34
Acknowledgments...............................................................35
EXHIBIT A - Description of Equipment
