THIS LEASE AGREEMENT, dated as of December 1, 2000, is between the COUNTY OF
OF XXXXXX INDUSTRIAL DEVELOPMENT AGENCY (Xxxxxx County, New York), a public
benefit corporation of the State of New York having its office at
00 Xxxxxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (the "Issuer"), and DYNACEPT
CORPORATION, a corporation duly organized and validly existing under the laws
of the State of Michigan having an office at 0 Xxxxxxxxxxxxx Xxxxxxxxx,
Xxxxxxxxx, Xxx Xxxx 00000-0000 (the "Institution").
RECITALS
Title I of Article 18-A of the General Municipal Law of the State of New York
was duly enacted into law as Chapter 1030 of the Laws of 1969 of the State of
New York;
The aforesaid Act authorizes the creation of industrial development agencies
for the Public Purposes of the State and empowers said agency, among other
things, to acquire, construct, reconstruct, improve, maintain, equip and furnish
industrial, manufacturing, warehousing, commercial, research and recreation
facilities in order to advance the job opportunities, health, general
prosperity and economic welfare of the people of the State of New York and to
improve their prosperity and standard of living;
The aforesaid Act further authorizes each such agency to lease or sell any or
all of its facilities at such rentals or such sale prices and on such other
terms and conditions as it deems advisable, to issue its bonds for the purpose
of carrying out any of its corporate purposes and, as security for the payment
of the principal, Purchase Price, Sinking Fund Installments, and redemption
price of, and interest on, any such bonds so issued and any agreements made in
connection therewith, to mortgage any or all of its facilities or to create
security interests therein and to assign and pledge the revenues and receipts
from the leasing or sale of its facilities;
Pursuant to and in accordance with the provisions of the aforesaid Act, the
the Issuer was created and is empowered under the Act to undertake the
providing, constructing, improving, and financing of the Facility defined below;
The Institution has requested that the Issuer issue its Variable Rate Demand
Revenue Bonds, Series 2000 (Dynacept Corporation Project) (the "Bonds") under
Section 141 of the Internal Revenue Code of 1986, as amended (the "Code") in an
aggregate principal amount not to exceed $4,500,000 for the purposes of (a) the
acquisition of land and a building, the renovation of a building thereon and the
installation of certain equipment for the Institution's (i) production of
concept and prototype models, (ii) production of tooling and metal molds for
the manufacture of plastic parts, and (iii) production of plastic components
and assemblies, all to be used for commercial purposes; and (b) the payment of
certain incidental expenses, including costs of insurance, incurred in
connection therewith; and (c) granting of certain other financial assistance
available pursuant to Sections 854(17) and 874 of the N.Y. General Municipal
Law, as amended, including but not limited to, real property, mortgage recording
and sales tax exemptions;
The Bonds will be issued pursuant to an Indenture of Trust, dated as of
December 1, 2000 (the "Indenture"), by and between the Issuer and Michigan
National Bank as trustee in such capacity (the "Trustee");
The Institution and National City Bank of Michigan/Illinois (in such capacity
the "LOC Bank") have entered into a Reimbursement Agreement of even date
herewith (the "Reimbursement Agreement") pursuant to which the LOC Bank has
issued its irrevocable direct pay letter of credit (the "Letter of Credit") in
favor of the Trustee for the benefit of holders of the Bonds to secure the
payment of the principal, Purchase Price or Redemption Price of, Sinking Fund
Installments of and interest on the Bonds;
Concurrently with the execution hereof and to further secure the Bonds, the
Issuer has executed an Assignment in favor of the Trustee of substantially all
of its rights under this Lease Agreement (other than Unassigned Rights);
The Institution has entered into a Bargain and Sale Deed, dated
December 28, 2000 (the "Deed of Trust"), providing for the conveyance of certain
real property more particularly described in Exhibit A attached hereto, and the
improvements thereon, from the Institution to the Issuer, on which real property
the Facility is located;
The Institution has agreed with the Issuer, on behalf of the Issuer and as the
Issuer's agent, to construct, improve and install the Facility;
The Issuer proposes to lease the Facility to the Institution, and the
Institution desires to lease the Facility from the Issuer, upon the terms and
conditions set forth in this Lease Agreement.
AGREEMENT
For and in consideration of the premises and the mutual covenants hereinafter
contained, the parties hereto do hereby mutually agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Definitions. All capitalized terms used in this Lease Agreement
and not otherwise defined have the meanings assigned thereto in the Schedule
of Definitions attached as Schedule A to the Indenture which are incorporated
herein and made a part hereof by reference.
Section 1.2 Indenture to Control. Notwithstanding anything to the contrary
herein, in the event of a conflict in terms between this Lease Agreement and
the Indenture, the terms set forth in the Indenture shall govern such provision.
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 1.3 Representations and Covenants of Issuer. The Issuer makes the
following representations and covenants as the basis for the undertakings on
its part herein contained:
(1) The Issuer is duly established and validly existing under the
provisions of the Act and has full legal right, power and authority to execute,
deliver and perform each of the Issuer Documents and the other documents
contemplated thereby. Each of the Issuer Documents and the other documents
contemplated thereby have been duly authorized, executed and delivered by the
Issuer.
(2) To finance certain of the Costs of the Facility, the Issuer will issue
the Bonds in the aggregate principal amount of $4,500,000. The Bonds will be
issued, mature, bear interest, be redeemable and have other terms and provisions
as provided for in the Indenture.
(3) By resolution adopted on November 28, 2000 the Issuer determined that,
based upon the review by the Issuer of the materials submitted and the
representations made by the Institution relating to the Facility, the
construction, improvement, installation and financing of the Facility would not
have a "significant impact" or "significant effect" on the environment within
the meaning of Article 8 of the Environmental Conservation Law of the State
of New York ("SEQRA") and the regulations of the Department of Environmental
Conservation of the State of New York thereunder (the "DEC Regulations").
(4) Neither the execution and delivery of any of the Issuer Documents and
the other documents contemplated thereby or the consummation of the transactions
contemplated thereby nor the fulfillment of or compliance with the provisions of
any of the Issuer Documents and the other documents contemplated thereby, will
conflict with or result in a breach of or constitute a default under any of the
terms, conditions or provisions of the Act, or of the Issuer's Certificate of
Establishment or By-laws, as amended, or of any corporate restriction or any
agreement or instrument to which the Issuer is a party or by which it is bound,
or result in the creation or imposition of any Lien of any nature upon any of
the Property of the Issuer under the terms of the Act or any such Certificate
of Establishment, By-laws, restriction, agreement or instrument, except for
Permitted Encumbrances.
(5) Each of the Issuer Documents and the other documents contemplated
thereby constitutes a legal, valid and binding obligation of the Issuer
enforceable against the Issuer in accordance with its terms.
Section 1.4 Representations and Covenants of Institution. The Institution
makes the following representations and covenants as the basis for the under-
takings on its part herein contained:
(1) The Institution is a corporation duly organized and validly existing
under the laws of the State of Michigan, is in good standing under the laws of
the State of Michigan and duly authorized to conduct business under the laws
of the State of New York, and has full legal right, power and authority to
execute, deliver and perform each of the Institution Documents and the other
documents contemplated thereby. The Institution shall, throughout the term of
this Lease, maintain its status as a authorized foreign corporation or domestic
corporation under the Business Corporation Laws of the State of New York. Each
of the Institution Documents and the other documents contemplated thereby has
been duly authorized, executed and delivered by the Institution.
(2) The Institution will cause the Facility to be constructed, improved
and installed and will lease the Facility from the Issuer pursuant to this
Lease Agreement, all for the Public Purposes of the State.
(3) Neither the execution and delivery of any of the Institution Documents
and the other documents contemplated thereby or the consummation of the
transactions contemplated thereby nor the fulfillment of or compliance with
the provisions of any of the Institution Documents and the other documents
contemplated thereby, will conflict with or result in a breach of or constitute
a default under any of the terms, conditions or provisions of any law or
ordinance of the State or any political subdivision thereof or of the
Institution's Certificate of Incorporation or By-Laws, as amended, or any
corporate restriction or any agreement or instrument to which the Institution
is a party or by which it is bound, or result in the creation or imposition of
any Lien of any nature upon any of the Property of the Institution under the
terms of any such law, ordinance, Certificate of Incorporation or By-Laws, as
as amended, restriction, agreement or instrument, except for Permitted
Encumbrances.
(4) The Facility and the design, construction, improvement, installation
and operation thereof will conform with all applicable zoning, planning,
building and environmental laws, ordinances, rules and regulations of
governmental authorities having jurisdiction over the Facility, including, but
not limited to, that such Facility and the design, construction, improvement,
installation and operation will not have a "significant impact" or "significant
effect" on the environment within the meaning of SEQRA and/or DEC Regulations.
(5) The Institution shall perform or cause to be performed for and on
behalf of the Issuer each and every obligation of the Issuer under and pursuant
to the Indenture.
(6) Each of the Institution Documents and the other documents contemplated
thereby constitutes a legal, valid and binding obligation of the Institution
enforceable against the Institution in accordance with its terms, except as such
enforceability may be limited by applicable bankruptcy, reorganization,
moratorium, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and except as limited by general equitable
principles.
(7) The Facility will be operated throughout the Lease Term as a"project",
as such term is defined in the Act, as of the date hereof.
(8) The Institution agrees that neither it (nor any related party to the
Institution as defined in Treas. Reg. Section 1.150-1(b)) will purchase any of
the Bonds in an amount related to the obligation represented by this Lease
Agreement.
Section 1.5 Covenant with Owners. The Issuer and the Institution agree that
this Lease Agreement has been executed in part to induce the purchase by others
of the Bonds. Accordingly, all covenants and agreements on the part of the
Issuer and the Institution set forth in this Lease Agreement are hereby declared
to be for the benefit of the Owners from time to time of the Bonds.
Section 1.6 Covenant with Trustee, Bondholders and LOC Bank. The Issuer and
the Institution agree that this Lease Agreement is executed in part to induce
the purchase of the Bonds and to induce the LOC Bank to issue the Letter of
Credit. Accordingly, all representations, covenants and agreements on the
part of the Issuer and the Institution set forth in this Lease Agreement are
hereby declared to be for the benefit of the Trustee, the Holders from time to
time of the Bonds and the LOC Bank.
Section 1.7 Special Covenants of the Institution. In addition to the covenants
relating to the reimbursement of the LOC Bank for drawings under the Letter of
Credit and to the payment of interest, fees and other amounts owing to the LOC
Bank, the Institution covenants and agrees, so long as no event described in
Section 7.10 in the Indenture has occurred and is continuing, to:
(1) not incur long-term indebtedness or short-term indebtedness without
the prior written consent of the LOC Bank other than Permitted Indebtedness
as defined in the Letter of Credit and Reimbursement Agreement.
(2) not sell, lease or otherwise transfer any of its material Property;
(3) furnish current unaudited financial statements to the LOC Bank and
audited financial information annually in a form and in a manner satisfactory
to the LOC Bank within sixty (60) days following the end of each quarter and
120 days following the end of each annual period as the case may be; and
(4) maintain commercial insurance policies protecting the interests of the
Issuer, the Trustee and the LOC Bank, including without limitation, hazard,
liability, builder's risk insurance, and loss of use coverage (from and after
occupancy) on the Project from companies, in amounts, and in form and substance
satisfactory to the LOC Bank which shall be equivalent to insurance customarily
provided by institutions of like size and type and for projects of like size and
type.
Section 1.8 Relationship of LOC Bank and Institution. The LOC Bank does not
control, either directly or indirectly through one or more intermediaries, the
Institution. Likewise, the Institution does not control, either directly or
indirectly, through one or more intermediaries, the LOC Bank. "Control" for
this purpose has the meaning given to such term in Section 2(a)(9) of the
Investment Company Act of 1940, as amended and as interpreted by the Securities
and Exchange Commission. (Under Section 2(a)(9), "control" means the power to
exercise a controlling influence over the management or policies of a company,
unless such power is solely the result of an official position with such
company. Any Person who owns beneficially, either directly or through one or
more controlled companies, more than 25% of the voting securities of a company
shall be presumed to control such company. Any Person who does not own more
than 25% of the voting securities of any company shall be presumed not to
control such company.) The Institution will provide written notice to the
Trustee and the Remarketing Agent 30 days prior to consummation of any trans-
action that would result in the Institution controlling or being controlled by
the LOC Bank. The Institution acknowledges that nothing in the foregoing shall
interfere with or affect the LOC Bank's right to enforce any remedies under, or
take possession of any collateral given by the Institution in connection with,
the Reimbursement Agreement.
ARTICLE III
FACILITY SITE AND ADDITIONAL PAYMENTS
Section 1.9 Lease of the Facility. The Issuer hereby leases to the Institution
and the Institution hereby leases from the Issuer, the Facility, all for and
during the term herein provided and upon and subject to the terms and conditions
herein set forth. The Institution shall at all times during the term of this
Lease Agreement occupy, use and operate the Facility, or cause the Facility to
be occupied, used and operated, for the general purposes specified in the
recitals to this Lease Agreement. The Institution shall not occupy, use or
operate the Facility or allow the Facility or any part thereof to be occupied,
used or operated for any unlawful purpose or in violation of any certificate of
occupancy affecting the Facility in any manner which may constitute a nuisance,
public or private, or make void or voidable any insurance then in force with
respect thereto. The Institution has conveyed or has caused to be conveyed
to the Issuer a good and marketable estate in and to the Facility, except for
Permitted Encumbrances. The Institution hereby warrants a valid estate to the
Issuer, subject only to Permitted Encumbrances. The Institution hereby agrees
to indemnify, defend and hold the Issuer harmless resulting from any defect in
title to the Facility.
Section 1.10 Title Insurance. The Institution has obtained or will obtain
title insurance for the benefit of the Trustee in an amount equal to $4,500,000.
To the extent not used to clear title to the Improvements, the Net Proceeds of
such insurance shall be applied by the Trustee, first, to redeem the Bonds
pursuant to Section 2.05(f) of the Indenture and, second, to repay the LOC Bank
for any amounts due under the Reimbursement Agreement. The Trustee has a
responsibility for reviewing the title insurance referenced herein.
Section 1.11 Subordination of Lease Agreement. This Lease Agreement and any
and all modifications, amendments, renewals and extensions thereof is subject
and subordinate to (i) the Indenture and to any and all modifications,
amendments, consolidations, extensions, renewals, replacements and increases
thereof, and (ii) any mortgage as may arise between the Institution and the
LOC Bank except with respect to any payments and/or obligations arising
hereunder.
Section 1.12 Issuer's Fee and Expenses; Pledge of Lease Agreement and Rent.
The Institution agrees to pay its obligations hereunder in accordance with the
provisions of this Lease Agreement.
In addition, the Institution shall pay as additional rent hereunder on the date
of execution and delivery of this Lease Agreement, an amount equal to 1% of the
aggregate face amount of the Bond ($45,000) payable directly to the Issuer.
(1) Issuer Expenses. Promptly after notice from the Issuer, but in any
event not later than thirty (30) days after such notice is given, the
Institution shall pay the amount set forth in such notice as payable to the
Issuer (1) to reimburse the Issuer for any external costs or expenses
incurred by it attributable to the issuance of the Bonds or the financing or
acquisition, construction or installation of the Facility, including, but not
limited to, costs and expenses of insurance and auditing, (2) for the
reasonable costs and expenses incurred by the Issuer to compel full and
punctual performance by the Institution of all the provisions hereof, or of the
Indenture in accordance with the terms hereof and thereof, and (iii) for the
reasonable fees and expenses of the Trustee and any Paying Agent (including
reasonable fees and expenses of counsel) in connection with performance of
their duties under the Indenture.
(2) Event of Default. The Institution shall pay all amounts required to
be paid by the Institution as a result of an Event of Default.
(3) Rebate. The Institution shall pay the difference between the amount
on deposit in the Rebate Fund or otherwise available under the Indenture and
the Tax Regulatory Agreement for the payment of any rebate required by the Code
to be paid, and the amount required to be rebated to the Department of the
Treasury of the United States of America in accordance with the Code in
connection with any Bonds which relate to the Institution.
(4) Additional Payments. Notwithstanding anything in the foregoing to
the contrary, if the amount available from the Letter of Credit is not
sufficient to pay the principal of, Purchase Price, Sinking Fund Installments
for, redemption premium, if any, and interest on the Bonds due (whether at
maturity or by redemption or acceleration or otherwise as provided in the
Indenture), the Institution shall first cause payment to be made from funds
held under the Indenture and then forthwith pay the amount of such deficiency
in immediately available funds to the Trustee and such payment shall constitute
rental payments under this Section 3.4.
(5) Continuing Obligation. In the event the Institution should fail to
make or cause to be made any of the payments required under the foregoing
provisions of this Section, the item or installment not so paid shall continue
as an obligation of the Institution until the amount not so paid shall have been
fully paid.
(6) Prepayment. The Institution shall have the option to prepay its
rental obligation with respect to the Bonds, in whole or in part, at the
times and in the manner provided herein hereof as and to the extent provided
in the Indenture for redemption of the Bonds. The Institution shall give at
least fifteen (15) days' written notice to the Trustee of its election to cause
redemption of the Bonds and of the proposed redemption date, which proposed
redemption date shall be no earlier than forty-five (45) days after the date
such notice is delivered to the Trustee.
(7) No Further Rental Payments. No further rental payments need be made
to the Issuer during the term of this Lease Agreement when and so long as the
amount of cash and/or Government Obligations on deposit in the Bond Fund is
sufficient to satisfy and discharge the obligations of the Issuer under the
Indenture and pay the Bonds as provided in Section 10.01 of the Indenture.
(8) Pledge and Assignment to Trustee. Pursuant to the Indenture, the
Issuer shall pledge and assign to the Trustee as security for the Bonds all of
the Issuer's right, title and interest in this Lease Agreement (except for the
Issuer's Unassigned Rights), including all rental payments hereunder and
thereunder, and, in furtherance of said pledge, the Issuer will unconditionally
assign such rental payments to the Trustee for deposit in accordance with the
Indenture. The Institution hereby consents to the above described pledge and
assignment of this Lease Agreement.
(9) Compliance. The Institution covenants and agrees that it will comply
with the provisions of the Indenture with respect to the Institution, authorizes
and acknowledges the deposits to be made pursuant to Article V of the Indenture
and agrees that the Trustee shall have the power, authority, rights and
protection provided in the Indenture. The Institution further covenants to use
its best efforts to cause there to be obtained for the Issuer any documents or
opinions required of the Issuer under the Indenture.
Section 1.13 Nonrecourse to Institution Affiliates. The Trustee, by accepting
the covenants of the Institution under the Financing Documents agrees that it
shall not xxx for, seek or demand any deficiency judgment against any members,
officers, directors, agents or employees of the Institution, in any action or
proceedings or by reason of or under, or in connection with any of the other
Bond Documents or Institution Documents.
Notwithstanding anything contained herein to the contrary, the members,
officers, directors, agents or employees of the Institution, shall have no
personal liability for the repayment or performance or non-performance of any
of the obligations of the Institution under or any of the other Financing
Documents, including without limitation, this Section.
Section 1.14 Additional Obligations; Additional Amounts Payable by
Institution.
(1) [Reserved]
(2) It is the intention of the Issuer and the Institution that,
notwithstanding any other provision of this Agreement, the Institution shall
pay the rental payments due hereunder at such times and in such amounts as will
enable the Issuer to meet all of its obligations with respect to the Bonds and
the Indenture, including any obligations surviving the payment of the Bonds, and
including amounts due upon Sinking Fund Installments, Extraordinary Redemption,
other Mandatory Redemption or an acceleration of the maturity of the Bonds by
the Trustee pursuant to the terms thereof and the terms of the Indenture.
Accordingly, the Institution agrees (but such agreement shall not limit the
generality of the preceding sentence) that if any additional amounts become
payable by the Issuer to the Owners of the Bonds or the Trustee pursuant to the
terms hereof or the terms of the Indenture, then additional amounts, as part of
the rental payments hereunder, shall be due and payable by the Institution to
the Trustee, as the assignee of the Issuer, equal to any additional amounts that
may be so payable by the Issuer, before or after payment of principal on the
Bonds and all rental payments hereunder, all of which amounts shall be paid by
the Institution on the date that the comparable amounts are due from the Issuer
to the Trustee under the Bonds or the Indenture. The Institution expressly
acknowledges receipt of a copy of the Indenture, agrees to undertake all
obligations of the Institution specified therein and to cooperate with the
Issuer in connection with the performance by the Issuer of its obligations
thereunder and agrees to pay all amounts and perform all obligations of the
Issuer (to the extent that any of such obligations is capable of being
performed by the Institution) and the Institution under the Indenture so that
at all times there shall be no default thereunder. The Institution further
agrees to pay all costs of maintenance and repair, all taxes and assessments,
insurance premiums and other costs and expenses concerning or in any way related
to ownership, maintenance and use of the Facility, or any part thereof, during
the term of this Agreement or any renewal thereof.
(3) The Institution shall make, or cause to be made, to the Trustee, as
part of the lease payments hereunder, the deposits to the Renewal Fund as
described in Section 5.03 of the Indenture.
(4) Any payments made from the Letter of Credit pursuant to the Indenture
shall be considered credited towards the payments required by this Section 3.6.
ARTICLE IV
CONSTRUCTION, IMPROVEMENT AND INSTALLATION OF FACILITY; ISSUANCE OF THE BONDS
Section 1.15 Construction, Improvement and Installation of Facility.
(1) The Institution agrees that, on behalf of the Issuer, it will
construct, improve and install the Facility in accordance with the Plans and
Specifications.
(2) The Institution may revise the Plans and Specifications from time to
time with the written approval of the Issuer and the LOC Bank, which approval
may not be unreasonably withheld but may be subject to such conditions as the
Issuer may deem appropriate.
(3) Title to all materials, machinery and other items of Property acquired
and/or purchased in whole or in part with the proceeds of the Bonds incorporated
or installed in the Facility (including for this purpose, the presently existing
improvements on the Land) shall vest in the Issuer immediately upon the
Institution's obtaining an interest in or to the materials, machinery and
other items of Property. The Institution shall execute, deliver and record or
file all instruments necessary or appropriate to so vest title to or a fee
simple interest in the Issuer and shall take all action necessary or appropriate
to protect such title against claims of any third Persons.
(4) The Issuer hereby appoints the Institution its true and lawful agent,
and the Institution hereby accepts such agency (i) to construct, improve and
install the Facility (including for this purpose, the presently existing
Improvements located on the Land) and as contemplated by Section 6.2 hereof,
(ii) to make, execute, acknowledge and deliver any contracts, orders, receipts,
writings and instructions with any other Persons, and in general to do all
things that be requisite or proper, all for constructing, improving and
installing the Facility and the additional items contemplated by Section 6.2
hereof with the same powers and with the same validity as the Issuer could do
if acting on its own behalf, (iii) to pay all fees, costs and expenses incurred
in the construction, improvement and installation of the Facility from funds
made available therefor in accordance with this Lease Agreement, and (iv) to
ask, demand, xxx for, xxxx, recover and receive all such sums or money, debts,
dues and other demands whatsoever that be due, owing and payable to the Issuer
under the terms of any contract, order, receipt, or writing in connection with
the acquisition of the fee simple interest in the Land, the existing
Improvements located thereon and the construction, improvement and installation
of the Facility and the additional items contemplated by Section 6.2 hereof, and
to enforce the provisions of any contract, agreement, obligation, bond or other
performance security.
(5) The Issuer shall enter into, and accept the assignment of, such
contracts as the Institution may request in order to effectuate the purposes
of this Section 4.1.
(6) The Institution, as agent for the Issuer, shall comply with all
provisions of the Labor Law of the State applicable to the constructing,
improving, installing and equipping of the Facility and shall include in all
construction contracts all provisions that be required to be inserted therein
by such provisions. Except as provided in the preceding sentence, the provisions
of this subsection do not create any obligations or duties not created by
applicable law outside of the terms of this Lease Agreement.
Section 1.16 Issuance of the Bonds; Disbursement of Bond Proceeds. In order
to provide funds for payment of the Costs of the Facility, together with other
payments and incidental expenses in connection therewith, the Issuer agrees
that it will issue, sell and cause the Bonds to be delivered on the terms set
forth in the Indenture. Bond Proceeds shall be disbursed in accordance with
the provisions of the Indenture and Section 4.3 hereof.
Section 1.17 Application of Bond Proceeds. Bond Proceeds, upon the written
direction of an Authorized Representative of the Institution, and on the
conditions provided for in the Indenture, shall be applied to pay only the
following costs and items of expense paid and incurred by or on behalf of the
Issuer on or after December 17, 1999, except as may otherwise be provided under
the Bond Documents:
(1) subject to review and approval by the LOC Bank, the cost of preparing
the Plans and Specifications (including any preliminary study or planning of the
Facility or any aspect thereof), and all costs of constructing, improving and
installing the Facility (including architectural, engineering, environmental
audits and surveys, and supervisory services with respect to the Facility);
(2) all fees, taxes, charges and other expenses for recording or filing,
as the case may be, and any other documents that the Issuer, the LOC Bank or
the Trustee may deem desirable in order to protect any security interest
contemplated, the Reimbursement Agreement or the Indenture;
(3) the premium on any fee or title insurance procured on the Land and the
Improvements;
(4) interest payable during the period of constructing, improving and
installing the Facility on such interim financing as the Institution may have
secured with respect to the Facility in contemplation of the issuance of the
Bonds;
(5) all legal, accounting and any other fees, costs and expenses incurred
in connection with the preparation, printing, reproduction, authorization,
issuance, execution, sale and distribution of the Bonds and Bond Documents and
all other documents in connection herewith or therewith, with the acquisition
of title to the Facility and with any other transaction contemplated by this
Lease Agreement or the Indenture;
(6) any fee paid to the LOC Bank in connection with the issuance of the
Letter of Credit;
(7) any administrative fee and fee for services of the Issuer; and
(8) reimbursement to the Institution for any of the above-enumerated costs
and expenses.
Section 1.18 Certificates of Completion. To establish the Completion Date,
the Institution shall deliver to the Issuer, the LOC Bank and the Trustee a
certificate signed by an Authorized Representative of the Institution
(i) stating that the construction, improvement and installation of the Facility
has been completed; (ii) stating that except for amounts retained in the Project
Fund for the payment of incurred but unpaid items of the Costs of the Facility,
the payment of all labor, services, materials and supplies used in such
construction, improvement and installation has been made or provided for; and
(iii) such certificates as may be satisfactory to the Issuer, the Trustee and
the LOC Bank, including without limitation, a final certificate of occupancy, if
applicable. The Institution agrees to complete the construction, improvement
and installation of the Facility on or before December 1, 2002.
Section 1.19 Completion by Institution.
(1) In the event that the Net Proceeds of the Bonds are not sufficient to
pay in full all costs of constructing, improving and installing the Facility,
the Institution agrees to pay, for the benefit of the Issuer, the LOC Bank and
the Trustee, all such sums as may be in excess of the Net Proceeds of the Bonds.
Title to all portions of the Facility installed at the Institution's cost or
expense shall immediately upon such installation be subject to the Lien of the
Indenture. The Institution shall execute, deliver and record or file such
instruments as the Issuer or the Trustee may request in order to perfect or
protect the Lien of the Indenture on such portions of the Facility.
(2) The Institution shall not be entitled to any reimbursement for such
excess cost or expense from the Issuer or the Trustee or the Owner of the Bond
nor shall it be entitled to any diminution or abatement of any other amounts
payable by the Institution under this Lease Agreement.
Section 1.20 Reserved.
Section 1.21 Remedies to be Pursued Against Contractors, Subcontractors,
Materialmen and their Sureties. In the event of a default by any contractor,
subcontractor, materialman or other Person under any contract made by it in
connection with the Facility or in the event of a breach of warranty or other
liability with respect to any materials, workmanship, or performance guaranty,
the Institution at its expense, either separately or in conjunction with others,
may pursue any and all remedies available to it and the Issuer, as appropriate,
against the contractor, subcontractor, materialman or other Person so in default
and against any surety for the performance of such contract. The Institution,
in its own name or in the name of the Issuer, may prosecute or defend any action
or proceeding or take any other action involving any such contractor, sub-
contractor, materialman or surety or other Person that the Institution deems
reasonably necessary, and in such event the Issuer, at the Institution's
expense, hereby agrees to cooperate fully with the Institution and to take all
action necessary to effect the substitution of the Institution for the Issuer
in any such act or proceeding. The Net Proceeds of any recovery from a
contractor or subcontractor or materialman or other Person shall be deposited
in the Renewal Fund and applied as provided in Section 7.4 hereof and the
Indenture.
ARTICLE V
DEMISING CLAUSES AND RENTAL PROVISIONS
Section 1.22 Demise of Facility. The Issuer hereby agrees to lease the
Facility, consisting of the Land, as more particularly described in Exhibit A
attached hereto, to the Institution upon the terms and conditions of this Lease
Agreement.
Section 1.23 Duration of Lease Term; Quiet Enjoyment.
(1) The Issuer shall deliver to the Institution sole and exclusive
possession of the Facility (subject to Section 3.3, 8.3 and 10.2 hereof) and
the estate created hereby shall commence on the Closing Date and the Insti-
tution shall accept possession of the Facility on the Closing Date.
(2) Except as provided in Section 10.2 hereof, the estate of the Issuer
created hereby shall terminate at 11:59 p.m., New York City time, on
January 31, 2021 or on such earlier date as may be permitted by Section 11.1
hereof, provided, however, that, except as provided in Section 10.2 hereof, in
no event shall this Lease Agreement be terminated until the Bonds shall have
been paid in full or provision for such full payment shall have been made and
all amounts due under the Reimbursement Agreement have been paid in full.
(3) Except as provided in Section 3.3, 8.3 and 10.2 hereof, the Issuer
shall neither take nor suffer or permit any action to prevent the Institution
during the Lease Term from having quiet and peaceable possession and enjoyment
of the Facility and will, at the request of the Institution and at the
Institution's cost, cooperate with the Institution in order that the Institution
may have quiet and peaceable possession and enjoyment of the Facility as herein
above provided.
Section 1.24 Lease Payments and Other Amounts Payable.
(1) The Institution shall pay as basic Lease Payments on or before each
Bond Payment Date directly to the Trustee, an amount equal to the Debt Service
Payment becoming due and payable on the Bonds on such Bond Payment Date.
(2) In addition to the Lease Payments pursuant to Section 5.3(a) hereof,
throughout the Lease Term, the Institution shall pay to the Issuer as additional
Lease Payments within ten (10) days of the receipt of demand therefor, an amount
equal to the sum of the expenses of the Issuer and the members thereof incurred
(i) by reason of the Issuer's ownership, financing or leasing of the Facility,
or (ii) in connection with the carrying out of the Issuer's duties and
obligations under the Issuer Documents, the payment of which is not otherwise
provided for under this Lease Agreement. The foregoing shall not be deemed
to include any annual or continuing administrative or management fee beyond
any initial administrative fee or fee for services rendered by the Issuer.
(3) The Institution, under the provisions of this Section 5.3, agrees to
make the above-mentioned Lease Payments in immediately available funds and
without any further notice in lawful money of the United States of America.
In the event the Institution shall fail to timely make any Lease Payment
required in Section 5.3(a) the Institution shall pay the same together with all
late payment penalties specified in the Bonds. In the event the Institution
shall fail to timely make any Lease Payment required in Section 5.3(b), the
Institution shall pay the same together with interest on such Lease Payment at
the Default Rate but in no event at a rate higher than the maximum lawful
prevailing rate, from the date on which such payment was due until the date on
which such payment is made.
(4) In addition, the Institution shall pay as additional Lease Payments
within fifteen (15) days after receipt of a written demand therefor the Ordinary
Expenses and Extraordinary Expenses payable by the Issuer to the Trustee
pursuant to and under the Indenture.
(5) As both security and a first source of funds for the performance of
its basic Lease Payment obligations with respect to the Bonds, the Institution
shall, simultaneously with the issuance and delivery of the Bonds, arrange for
the delivery of the Letter of Credit to the Trustee. The Institution hereby
authorizes and directs the Trustee to draw monies under the Letter of Credit
in accordance with the provisions of the Indenture to the extent and at the
times necessary to pay the principal or Purchase Price of, Sinking Fund
Installments, Redemption Price of, and interest on the Bonds when due. The
obligations of the Institution to make payments pursuant to Section 5.3(a)
hereof shall be deemed to be satisfied and discharged to the extent of any
corresponding drawing made by the Trustee under the Letter of Credit and applied
to such payment.
(6) Notwithstanding anything in the foregoing to the contrary, if the
amount on deposit and available in the Bond Fund is not sufficient to pay the
principal of or Purchase Price, Sinking Fund Installments, Redemption Price of,
and interest on the Bonds when due (whether at maturity or by redemption or
acceleration or otherwise as provided in the Indenture), the Institution shall
forthwith pay the amount of such deficiency in immediately available funds to
the Trustee for deposit in the Bond Fund and such payment shall constitute
Lease Payments under this Section 5.3.
(7) In the event the Institution should fail to make or cause to be made
any of the Lease Payments required under the foregoing provisions of this
Section, the item or installment not so paid shall continue as an obligation
of the Institution until the amount not so paid shall have been fully paid.
Section 1.25 Obligations of Institution Hereunder Unconditional. The
obligations of the Institution to make the payments required in Sections 5.3 and
5.5 hereof and to perform and observe any and all of the other covenants and
agreements on its part contained herein shall be a general obligation of the
Institution, and shall be absolute and unconditional irrespective of any
defense or any rights of setoff, recoupment or counterclaim it may otherwise
have against the Issuer. The Institution agrees it will not (i) suspend,
discontinue or xxxxx any payment required hereunder, (ii) fail to observe any
of its other covenants or agreements in this Lease Agreement, or (iii) terminate
this Lease Agreement for any cause whatsoever unless and until the Bonds,
including premium, if any, and interest thereon, is paid or provided for.
Subject to the foregoing provisions, nothing contained in this Section shall be
construed to release the Issuer from the performance of any of the agreements on
its part contained in this Lease Agreement or to affect the right of the
Institution to seek reimbursement, and in the event the Issuer should fail to
perform any such agreement, the Institution may institute such separate action
against the Issuer as the Institution may deem necessary to compel performance
or recover damages for non-performance, and the Issuer covenants that it will
not, subject to the provisions of Sections 3.3 and 8.3 and Article X hereof,
take, suffer or permit any action that will adversely affect or create any
defect in its title to the Facility or that will otherwise adversely affect the
rights or estate of the Institution hereunder, except upon written consent of
the Institution.
Section 1.26 Payment of Additional Monies in Prepayment of Bonds. In addition
to any other monies required or permitted to be paid pursuant to this Lease
Agreement, the Institution may, subject to the terms of the Indenture, pay
monies (or cause monies under the Letter of Credit to be paid) to the Trustee
as prepayments of the Lease Payments (i) to be applied as the prepayment of
amounts to become due and payable by the Institution pursuant to Section 5.3(a)
hereof, or (ii) to be used for the redemption or prepayment of any Bond at such
time or times and on such terms and conditions as is provided in such Bond and
in the Indenture. The Institution shall notify the Issuer and the Trustee at
least sixty (60) days prior to the proposed Redemption Date in writing as to
the purpose of any such intended payment.
If the Bonds are to be redeemed in whole as a result of the occurrence of any of
the events described in Section 2.05(c) of the Indenture, the Institution shall
deliver to the Issuer, the LOC Bank and the Trustee a certificate of an
Authorized Representative of the Institution stating that, as a result of the
occurrence of the event giving rise to such redemption, the Institution has
discontinued, or at the earliest practicable date will discontinue, its
operation of the Facility for its intended purposes.
Section 1.27 Rights and Obligations of the Institution upon Prepayment of
Bonds. In the event the Bonds shall have been paid in full prior to the
termination date specified in Section 5.2(b) hereof or provision for such
payment shall have been made in accordance with the Indenture, the Issuer and
the Trustee at the sole cost of the Institution, shall execute, deliver and
record or file appropriate discharges or releases of the Assignment and any
other security interest relating to the Facility or this Lease Agreement.
Section 1.28 Security Interest. The Institution acknowledges that this Lease
Agreement is intended as security for payment of the principal or Purchase Price
of, Sinking Fund Installments on, Redemption Price of, and interest on the Bonds
and payment of all amounts due under the Letter of Credit and the Reimbursement
Agreement. In addition, to secure payment of all Lease Payments and other sums
owing by the Institution hereunder and to secure the payment and performance of
all debts, liabilities and obligations of the Institution under all of the Bond
Documents, the Institution hereby grants a security interest to the Issuer in
(i) all of the Institution's right, title and interest in and to the Equipment,
whether now or hereafter demised under this Lease Agreement, together with any
and all substitutions, additions, attachments, parts, fittings, accessories,
special tools, accessions or replacements, and the proceeds and all general
intangibles arising from all of the foregoing, (ii) all insurance, now owned
or hereafter acquired, insuring any of the Equipment or the Facility against
any loss or damage whatsoever, and all proceeds thereof, (iii) all awards
heretofore and hereafter paid or payable to the Institution by reason of a
taking or Condemnation of any part of the Facility (including any Equipment)
or any right of the Institution appurtenant thereto by competent authority as a
result of the exercise of the power of eminent domain, including but not
limited to any awards or payments for use and occupation or for change of grade
of streets, together with any and all claims of the Issuer with respect thereto,
and the proceeds thereof, and (iv) all monies and securities from time to time
held by the Trustee pursuant to and under any of the Bond Documents, except
monies and securities held in the Rebate Fund, and all investments and re-
investments of any such monies and securities, and the proceeds thereof. The
security interest referred to in this Section shall be assigned by the Issuer
to the Trustee and the LOC Bank pursuant to and subject to the terms and
conditions of the Assignment.
Section 1.29 Financing Statements. The Institution hereby irrevocably appoints
the Issuer and the Trustee, or either of them, as the Institution's lawful
attorneys-in-fact and agents, to prepare and execute any UCC-1 Financing
Statements or UCC-3 Amendments or Assignments on the Institution's behalf in
order to protect the Issuer's and the Trustee's security interests in payments
made pursuant to this Lease Agreement and any assignment thereof and in any
Property demised under this Lease Agreement, and on the Institution's behalf
to file such Financing Statements signed by the Issuer and the Trustee, or
either of them, without the Institution's execution thereof, in any appropriate
public office.
Section 1.30 [Reserved].
Section 1.31 [Reserved].
Section 1.32 Substitute Letter of Credit. If at any time while the Bonds are
Outstanding, the Letter of Credit expires or by its terms is terminated the
Institution shall cause to be delivered to the Trustee a Substitute Letter of
Credit with at least an investment grade rating in accordance with the
provisions of Section 2.13 of the Indenture.
ARTICLE VI
MAINTENANCE, MODIFICATIONS, TAXES AND INSURANCE
Section 1.33 Maintenance and Modifications of Facility by Institution.
(1) The Institution shall not abandon the Facility or cause or permit any
waste to the Improvements. During the Lease Term, the Institution shall not
(except as permitted by Section 9.2 hereof) remove any part of the Facility
outside of the jurisdiction of the Issuer and shall (i) keep the Facility in
as reasonably safe condition as its operations shall permit; (ii) make all
necessary repairs and replacements to the Facility (whether ordinary or extra-
ordinary, structural or nonstructural, foreseen or unforeseen); and
(iii) operate the Facility in a sound and economic manner.
(2) With the written consent of the Issuer and the LOC Bank, which shall
not be unreasonably withheld, the Institution from time to time may make any
structural additions, modifications or improvements to the Facility or any
part thereof, provided such actions do not adversely affect the structural
integrity of the Facility. All such additions, modifications or improvements
made by the Institution shall become a part of the Facility and the Property
of the Issuer. The Institution agrees to deliver to the Issuer all documents
that may be necessary or appropriate to convey to the Issuer a fee title
interest to such Property and to perfect or protect the lien of the Indenture.
Section 1.34 Installation of Additional Equipment. Subject to the provisions
of Section 8.10 hereof, the Institution, or any other permitted lessees of the
Institution, from time to time may install additional machinery, equipment or
other personal property in the Facility (including for this purpose the
presently existing improvements on the Land) (which may be attached or affixed
to the Facility and/or such existing improvements), and such machinery,
equipment or other personal property shall, unless the Institution otherwise
elects by written notice to the Issuer and the LOC Bank, become a part of the
Facility (provided that the acquisition and installation of such property is
not financed from either the Project Fund or the Renewal Fund, in which case
such additional items shall become a part of the Facility). The Institution,
from time to time, may create or permit to be created any Lien on such
machinery, equipment or other personal property. Further, the Institution,
from time to time, may remove or permit the removal of such machinery, equipment
and other personal property from the Facility, provided that any such removal of
such machinery, equipment or other personal property shall not occur (i) if any
Event of Default has occurred; or (ii) if any such removal shall adversely
affect the structural integrity of the Facility or impair the overall operating
efficiency of the Facility for the purposes for which it is intended, and
provided further, that if any damage is occasioned to the Facility by such
removal, the Institution agrees to promptly repair such damage at its own
expense.
Section 1.35 Taxes, Assessments and Utility Charges.
(1) The Institution agrees to pay, as the same become due and before any
fine, penalty, interest (except interest that is payable in connection with
legally permissible Lease Payments) or other cost may be added thereto or become
due or be imposed by operation of law for the non-payment thereof, (i) all
taxes, payments in lieu of taxes and governmental charges of any kind whatsoever
that at any time be lawfully assessed or levied against or with respect to the
Facility and any machinery, equipment or other Property installed or brought by
the Institution therein or thereon, including, without limiting the generality
of the foregoing, any sales or use taxes imposed with respect to the Facility or
any part or component thereof, or the rental or sale of the Facility or any
part thereof and any taxes levied upon or with respect to the income or revenues
of the Issuer from the Facility; (ii) all utility and other charges, including
service charges, incurred or imposed for or with respect to the operation,
maintenance, use, occupancy, upkeep and improvement of the Facility; and
(iii) all assessments and charges of any kind whatsoever lawfully made by any
governmental body for public improvements; provided that, with respect to
special assessments or other governmental charges that may lawfully be paid
in installments over a period of years, the Institution shall be obligated
under this Lease Agreement to pay only such installments as are required to
be paid during the Lease Term.
(2) The Institution may in good faith contest any such taxes, assessments
and other charges. In the event of any such proceedings, the Institution may
permit the taxes, assessments or other charges so contested to remain unpaid
during the period of such proceedings and any appeal therefrom, provided,
however, that (i) neither the Facility nor any part thereof or interest therein
would be in any immediate danger of being sold, forfeited or lost by reason of
such proceedings, and (ii) the Institution shall have set aside on its books
adequate reserves with respect thereto and shall have furnished such security,
if any, as may be required in such proceedings or requested by the Trustee.
(3) Within thirty (30) days of receipt of written request therefor, the
Institution shall deliver to the Trustee official receipts of the appropriate
taxing authorities or other proof reasonably satisfactory to the Trustee
evidencing payment of any tax.
Section 1.36 Insurance Required. At all times throughout the Lease Term,
including, when indicated herein, during the Construction Period, the
Institution shall, at its sole cost and expense, maintain or cause to be
maintained insurance against such risks and for such amounts as are customarily
insured against by facilities of like size and type and shall pay, as the same
become due and payable, all premiums with respect thereto, including, but not
necessarily limited to:
(1) Insurance against loss or damage by fire, lightning and other
casualties customarily insured against, with a uniform standard extended
coverage endorsement, such insurance to be in an amount not less than the full
replacement value of the completed Improvements, exclusive of footings and
foundations, as determined by a recognized appraiser or insurer selected by the
Institution, but in no event less than the principal amount of the Bonds.
During the Construction Period, such policy shall be written in the so-called
"Builder's Risk Completed Value Non-Reporting Form" and shall contain a
provision granting the insured permission to complete and/or occupy.
(2) Workers' compensation insurance, disability benefits insurance and
each other form of insurance that the Institution is required by law to provide,
covering loss resulting from injury, sickness, disability or death of employees
of the Institution who are located at or assigned to the Facility. This coverage
shall be in effect from and after the Completion Date or on such earlier date
as any employees of the Institution first occupy the Facility.
(3) Insurance protecting the Issuer and the Institution against loss or
losses from liability imposed by law or assumed in any written contract
(including the contractual liability assumed by the Institution under
Section 8.2 hereof) and arising from personal injury, including bodily injury
or death, or damage to the property of others, caused by an accident or
occurrence with a limit of liability of not less than $1,000,000 (combined
single limit for personal injury, including bodily injury or death, and property
damage) and with a blanket excess liability coverage in an amount not less than
$4,000,000 protecting the Issuer and the Institution against any loss or
liability or damage for personal injury, including bodily injury or death, or
property damage. This coverage shall also be in effect during the Construction
Period.
(4) During the Construction Period (and for at least one year thereafter in
the case of Products and Completed Operations as set forth below), the
Institution shall cause the general contractor to carry liability insurance of
the type and providing the minimum limits set forth below:
(1) Workers' compensation and employer's liability with limits in
accordance with applicable law.
(2) Commercial general liability providing coverage for:
Premises and Operations
Products and Completed Operations
Owners Protective
Contractors Protective
Contractual Liability
Personal Injury Liability
Broad Form Property Damage
(including completed operations)
Explosion Hazard
Collapse Hazard
Underground Property Damage Hazard
Such insurance shall have a limit of liability of not less than
$1,000,000 (combined single limit for personal injury, including
bodily injury or death, and property damage).
(3) Business auto liability, including all owned, non-owned and hired
autos, with a limit of liability of not less than $1,000,000
(combined single limit for personal injury, including bodily injury
or death, and property damage).
(4) Excess "umbrella" liability providing liability insurance in excess
of the coverages in (i), (ii) and (iii) above with a limit of not
less than $5,000,000.
(5) A policy or policies of flood insurance in an amount not less than
the principal amount of the Bonds or the maximum amount of flood
insurance available with respect to the Facility under the Flood
Disaster Protection Act of 1973 as amended, whichever is less. This
requirement will be waived upon presentation of evidence satis-
factory to the Trustee that no portion of the Land is located within
an area identified by the U.S. Department of Housing and Urban
Development as having special flood hazards.
Section 1.37 Additional Provisions Respecting Insurance.
(1) All insurance required by Section 6.4 hereof shall be procured and
maintained in financially sound and generally recognized responsible insurance
companies selected by the entity required to procure the same and authorized to
write such insurance in the State. The company issuing the policies required by
Section 6.4 hereof shall be rated "A" or better by A.M. Best Co., Inc. in
Best's Key Rating Guide. Such insurance may be written with deductible amounts
comparable to those on similar policies carried by other companies engaged in
businesses similar in size, character and other respects to those in which the
procuring entity is engaged. All policies evidencing the insurance required by
Sections 6.4(a) and (e) hereof shall provide for payment to the Trustee of the
Net Proceeds of insurance resulting from any claim for loss or damage
thereunder, and all policies of insurance required by Section 6.4 hereof shall
provide for at least thirty (30) days' prior written notice of the restriction,
cancellation or modification thereof to the Issuer and the Trustee. The policy
evidencing the insurance required by Section 6.4(c) hereof shall name the Issuer
and the Trustee as additional named insureds. All policies evidencing the
insurance required by Sections 6.4(d)(ii) and (iv) hereof shall name the Issuer,
the Trustee and the Institution as additional named insureds. Upon request of
the Trustee or the LOC Bank, the Institution will assign and deliver to the
Trustee and the LOC Bank, as their interest may appear, the policies of
insurance required under Section 6.4(a), so and in such manner and form that
the Trustee, as applicable, shall at all times, upon such request and until the
payment in full of the Bonds, have and hold said policies and the Net Proceeds
thereof as collateral for the payment of the Bonds and until all obligations
of the Institution to the Trustee have been satisfied. The policies under
Section 6.4(a) shall contain appropriate waivers of subrogation.
(2) The policies or certificates (or binders) of insurance required by
Sections 6.4(a) and (e) hereof shall be deposited with the Trustee on or before
the Closing Date. A copy of the policy or certificate (or binder) of insurance
required by Section 6.4(c) hereof shall be delivered to the Issuer on or before
the Closing Date. A copy of the policies or certificates (or binders) of
insurance required by Sections 6.4(d)(ii) and (iv) hereof shall be delivered to
the Issuer and the Trustee on or before the Closing Date. The Institution shall
deliver to the Issuer and the Trustee before the first Business Day of each
calendar year thereafter a certificate dated not earlier than the immediately
preceding month reciting that there is in full force and effect, with a term
covering at least the next succeeding calendar year, insurance of the types and
in the amounts required by Section 6.4 hereof and complying with the additional
requirements of Section 6.5(a) hereof. Prior to the expiration of each such
policy, the Institution shall furnish the appropriate Person with evidence that
such policy has been renewed or replaced or is no longer required by this Lease
Agreement. The Institution shall provide such further information with respect
to the insurance coverage required by this Lease Agreement as the Issuer and the
Trustee may from time to time reasonably require.
Section 1.38 Application of Net Proceeds of Insurance. Subject to the
provisions of Section 6.5(a) hereof, the Net Proceeds of the insurance carried
pursuant to the provisions of Section 6.4 hereof shall be applied as follows:
(i) the Net Proceeds of the insurance required by Sections 6.4(a) and (e) hereof
shall be applied as provided in Section 7.1 hereof, and (ii) the Net Proceeds of
the insurance required by Sections 6.4(b), (c) and (d) hereof shall be applied
toward extinguishment or satisfaction of the liability with respect to which
such insurance proceeds may be paid.
Section 1.39 Right of Issuer or Trustee to Pay Taxes, Insurance Premiums and
Other Charges. If the Institution fails (i) to pay any tax, together with any
fine, penalty, interest or cost that may have been added thereto or become due
or been imposed by operation of law for nonpayment thereof, assessment or other
governmental charge required to be paid by Section 6.3 hereof, (ii) to maintain
any insurance required to be maintained by Section 6.4 hereof, (iii) to pay any
amount required to be paid by any law or ordinance relating to the use or
occupancy of the Facility or by any requirement, order or notice of violation
thereof issued by any governmental person, (iv) to pay any mechanic's Lien that
is recorded or filed against the Facility or any part thereof (unless contested
in accordance with the provisions of Section 8.9(b) hereof), (v) to pay any real
property transfer gains tax, together with any interest and penalties thereon,
that is due and payable by reason of a conveyance of the estate in and to the
Facility pursuant to a judicial sale in any foreclosure action or by deed and/or
assignment in lieu of foreclosure, or (vi) to pay any other amount or perform
any act hereunder required to be paid or performed by the Institution hereunder,
the LOC Bank or the Issuer may pay or cause to be paid, but shall not be
obligated to pay and shall have no liability whatsoever for its failure to do
so, such tax assessment or other governmental charge or the premium for such
insurance or any such other payment or may perform any such act. No such payment
shall be made or act performed by the LOC Bank or the Issuer until at least
ten (10) days shall have elapsed since notice shall have been given by the LOC
Bank or the Issuer, as the case may be, to the Issuer, with a copy of such
notice being given to the Institution, and in the case of any tax, assessment
or governmental charge or the amounts specified in paragraphs (iii), (iv) and
(v) hereof, no such payment shall be made in any event if the Institution is
contesting the same in good faith to the extent and as permitted by this Lease
Agreement unless an Event of Default hereunder shall have occurred and be
continuing. No such payment by the LOC Bank or the Issuer shall affect or
impair any rights of the Issuer hereunder or of the Issuer under the Indenture
or the LOC Bank under the Reimbursement Agreement arising in consequence of such
failure by the Institution. The Institution shall, on demand, reimburse the
Issuer or the LOC Bank for any amount so paid or for expenses or costs incurred
in the performance of any such act by the Issuer or the LOC Bank pursuant to
this Section (which shall include all reasonable legal fees and disbursements),
together with interest thereon from the date of payment of such amount, expense
or cost by the Issuer at the Default Rate.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 1.40 Damage or Destruction of the Facility.
(1) If the Facility shall be damaged or destroyed (in whole or in part) at
any time during the Lease Term:
(1) the Issuer shall have no obligation to replace, repair, rebuild,
restore or relocate the Facility; and
(2) there shall be no abatement or reduction in the amounts payable by
the Institution under this Lease Agreement (whether or not the
Facility is replaced, repaired, rebuilt, restored or relocated);
and
(3) upon the occurrence of such damage or destruction, the Net Proceeds
derived from the insurance shall be paid to the Trustee and
deposited in the Renewal Fund and except as otherwise provided in
Section 11.1 and subsection (f) hereof, the Institution shall at
its option either (A) replace, repair, rebuild, restore or relocate
the Facility, or (B) redeem a principal amount of Bonds equal to
such Net Proceeds in accordance with the Indenture.
If the Institution replaces, repairs, rebuilds, restores or relocates the
Facility, the Trustee shall disburse the Net Proceeds from the Renewal Fund in
the manner set forth in Section 5.03 of the Indenture to pay or reimburse the
Institution for the cost of such replacement, repair, rebuilding, restoration
or relocation.
(2) Any such replacements, repairs, rebuilding, restorations or relocations
shall be subject to the following conditions:
(1) the Facility shall be in substantially the same condition and value
as an operating entity as existed prior to the damage or destruc-
tion;
(2) the Facility shall continue to constitute a "project" as such term
is defined in the Act;
(3) the Facility will be subject to no Liens, other than Permitted
Encumbrances; and
(4) any other conditions the Issuer, the Trustee or the LOC Bank may
reasonably impose.
(3) All such repair, replacement, rebuilding, restoration or relocation of
the Facility shall be effected with due diligence in a good and
workmanlike manner in compliance with all applicable legal requirements
and be promptly and fully paid for by the Institution in accordance
with the terms of the applicable contracts.
(4) In the event such Net Proceeds are not sufficient to pay in full the
costs of such replacement, repair, rebuilding, restoration or relocation, the
Institution shall nonetheless complete the work and pay from its own monies
that portion of the costs thereof in excess of such Net Proceeds. All such
replacements, repairs, rebuilding, restoration or relocations made pursuant to
this Section, whether or not requiring the expenditure of the Institution's own
money, shall automatically become a part of the Facility as if the same were
specifically described herein.
(5) Any balance of such Net Proceeds remaining in the Renewal Fund after
payment of all costs of replacement, repair, rebuilding, restoration or
relocation shall be used to redeem the Bonds as provided in the Indenture.
(6) If the Institution shall exercise its option to terminate this Lease
Agreement pursuant to Section 11.1 hereof such Net Proceeds shall be applied
to the payment of the amounts required to be paid by Section 11.2 hereof. If
an Event of Default hereunder shall have occurred and the Trustee or the LOC
Bank shall have exercised its remedies under Section 10.2 hereof such Net
Proceeds shall be applied to the payment of the amounts required to be paid
by Section 10.2 and Section 10.4 hereof.
(7) If the entire amount of the Bonds and interest thereon has been fully
paid, or provision therefor has been made in accordance with the Indenture, all
such remaining Net Proceeds shall be paid first to the LOC Bank to satisfy any
amounts due and owing under the Reimbursement Agreement and second to the
Institution.
(8) Except upon the occurrence of an Event of Default, the Institution
with the consent of the Trustee shall have the right to settle and adjust all
claims under any policies of insurance required by Section 6.4(a), (d) and (e)
hereof on behalf of the Issuer, the Trustee, and on its own behalf.
Section 1.41 Condemnation.
(1) If title to or use of the Facility shall be taken by Condemnation (in
whole or in part) at any time during the Lease Term:
(1) the Issuer shall have no obligation to replace, repair, rebuild,
restore or relocate the Facility or acquire, by construction or
otherwise, facilities of substantially the same nature as the
Facility ("Substitute Facilities"); and
(2) there shall be no abatement or reduction in the amounts payable by
the Institution under this Lease Agreement (whether or not the
Facility is replaced, repaired, rebuilt, restored or relocated or
Substitute Facilities acquired); and
(3) upon the occurrence of such Condemnation, the Net Proceeds derived
therefrom shall be paid to the Trustee and deposited in the Renewal
Fund and except as otherwise provided in Section 11.1 and subsection
(f) hereof, the Institution shall either:
(1) replace, repair, rebuild, restore or relocate the Facility or
acquire Substitute Facilities, or
(2) redeem an amount of Bonds equal to the Net Proceeds in
accordance with the Indenture.
If the Institution replaces, repairs, rebuilds, restores or relocated the
Facility or acquires Substitute Facilities, the Trustee shall disburse the Net
Proceeds from the Renewal Fund in the manner set forth in Section 5.03 of the
Indenture to pay or reimburse the Institution for the cost of such replacement,
repair, rebuilding, restoration, relocation or acquisition of Substitute
Facilities.
(2) Any such replacements, repairs, rebuilding, restorations, relocations
or acquisitions of Substitute Facilities shall be subject to the following
conditions:
(1) the Facility or the Substitute Facilities shall be in substantially
the same condition and value as an operating entity as existed prior
to the Condemnation;
(2) the Facility or the Substitute Facilities shall continue to con-
stitute a "project" as such term is defined in the Act;
(3) the Facility or the Substitute Facilities will be subject to no
Liens, other than Permitted Encumbrances; and
(4) any other conditions the Issuer or the Trustee may reasonably
impose.
(3) All such repair, replacement, rebuilding, restoration or relocation of
the Facility shall be effected with due diligence in a good and workmanlike
manner in compliance with all applicable legal requirements and be promptly and
fully paid for by the Institution in accordance with the terms of the applicable
contracts.
(4) In the event such Net Proceeds are not sufficient to pay in full the
costs of such replacement, repair, rebuilding, restoration, relocation or
acquisition of Substitute Facilities, the Institution shall nonetheless complete
the work or the acquisition and pay from its own monies that portion of the
costs thereof in excess of such Net Proceeds. All such replacements, repairs,
rebuilding, restoration, relocations and such acquisition of Substitute
Facilities made pursuant to this Section, whether or not requiring the
expenditure of the Institution's own money, shall automatically become a part
of the Facility as if the same were specifically described herein.
(5) Any balance of such Net Proceeds remaining in the Renewal Fund after
payment of all costs of replacement, repair, rebuilding, restoration, relocation
or acquisition of Substitute Facilities shall be used to redeem the Bonds as
provided in the Indenture.
(6) If the Institution shall exercise its option to terminate this Lease
Agreement pursuant to Section 11.1 hereof such Net Proceeds shall be applied
to the payment of the amounts required to be paid by Section 11.2 hereof. If
any Event of Default hereunder shall have occurred and the Trustee or the LOC
Bank shall have exercised its remedies under Section 10.2 hereof such Net
Proceeds shall be applied to the payment of the amounts required to be paid
by Section 10.2 and Section 10.4 hereof.
(7) If the entire amount of the Bond and interest thereon has been fully
paid, or provision therefor has been made in accordance with the Indenture, all
such remaining Net Proceeds shall be paid first to the LOC Bank to satisfy any
amounts due and owing under the Reimbursement Agreement and second to the
Institution.
(8) Except upon the occurrence of an Event of Default, the Institution with
the consent of the LOC Bank shall have the right to settle and adjust all claims
under any Condemnation proceedings on behalf of the Issuer, the Trustee, the LOC
Bank and on its own behalf.
Section 1.42 Condemnation of Institution-Owned Property. The Institution shall
be entitled to the proceeds of any Condemnation award or portion thereof made
for damage to or taking of any Property that, at the time of such damage or
taking, is not part of the Facility.
Section 1.43 Recovery Against Contractor, Etc.
(1) If at any time during the Lease Term, provided no Event of Default
under Section 10.1 has occurred and continues uncured, proceeds shall become
available from any recovery against a contractor, subcontractor, materialman
or other Person with respect to the Facility, such proceeds shall be deposited
in the Renewal Fund and be applied as follows:
(1) if received prior to the Completion Date, the Net Proceeds of such
recovery shall be applied in the manner and subject to the
conditions set forth in Section 5.02 of the Indenture to the Costs
of the Facility as if such proceeds were deposited in the Project
Fund and the balance remaining in the Renewal Fund, if any, shall
be applied to redeem the Bond pursuant to the Indenture;
(2) if received subsequent to the Completion Date, the Net Proceeds of
of such recovery shall be paid to the Institution as reimbursement
for the Costs of the Facility that were not paid out of Bond
Proceeds upon requisitions by the Institution substantially in
accordance with Section 5.02 of the Indenture with such variations
as are appropriate and the balance remaining in the Renewal Fund,
if any, shall be applied to redeem the Bonds pursuant to the
Indenture.
(2) After the occurrence of an Event of Default under Section 10.1 hereof,
the proceeds of any such recovery shall be applied as provided in Section 10.2
hereof.
(3) If the entire amount of the Bonds and interest thereon have been fully
paid, or provision therefor has been made in accordance with the Indenture, the
surplus thereof shall be paid first to the LOC Bank to satisfy any amounts due
and owing under the Reimbursement Agreement and second to the Institution for
its business purposes.
(4) Except upon the occurrence of an Event of Default, the Institution with
the consent of the LOC Bank shall have the right to settle and adjust all claims
against such contractors, subcontractors, materialmen or other Persons.
Section 1.44 Waiver of Real Property Law Section 227. The Institution hereby
waives the provisions of Section 227 of the Real Property Law of the State of
New York or any law of like import now or hereafter in effect.
ARTICLE VIII
SPECIAL COVENANTS
Section 1.45 No Warranty of Condition or Suitability by Issuer. THE ISSUER
MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION, TITLE,
DESIGN, OPERATION, MERCHANTABILITY OR FITNESS OF THE FACILITY OR THAT IT IS OR
WILL BE SUITABLE FOR THE INSTITUTION'S PURPOSES OR NEEDS.
Section 1.46 Hold Harmless Provisions.
(1) The Institution agrees that the Issuer, the LOC Bank and the Trustee
shall not be liable for and agrees to defend, indemnify, release and hold the
Issuer, the LOC Bank and the Trustee harmless from and against any and all
(i) liability for loss or damage to Property or injury to or death of any and
all Persons that may be occasioned by, directly or indirectly, any cause
whatsoever pertaining to the Facility or arising by reason of or in connection
with the occupation or the use thereof or the presence of any Person or Property
on, in or about the Facility or the Land, or (ii) liability arising from or
expense incurred by the Issuer's financing, constructing, improving, installing,
equipping, owning and selling of the Facility, including without limiting the
generality of the foregoing, all claims arising from the issuance of the Bonds,
and any alleged misstatement or omission of material fact contained in the
Offering Circular or arising from the breach by the Institution of any of its
covenants contained herein, the exercise by the Institution of the authority
conferred upon it pursuant to Section 4.1(d) of this Lease Agreement and all
causes of action and reasonable attorneys' fees and expenses and any other
expenses incurred in defending any suits or actions that may arise as a result
of any of the foregoing, provided that any such losses, damages, liabilities or
expenses of the Issuer, the LOC Bank or the Trustee are not incurred or do not
result from the gross negligence or intentional or willful wrongdoing of the
Issuer, the LOC Bank or the Trustee, respectively or any of its members, agents
or employees. The Institution further acknowledges, agrees to, accepts and
incorporates herein the indemnification provisions set forth as Exhibit B. The
foregoing indemnities shall apply notwithstanding the fault or negligence, other
than gross negligence in part of the Issuer, the LOC Bank or the Trustee, or
any of its members, directors, officers, agents or employees and irrespective
of the breach of a statutory obligation or the application of any rule of
comparative or apportioned liability. The foregoing indemnities are limited
only to the extent of any prohibitions imposed by law.
(2) Notwithstanding any other provisions of this Lease Agreement, the
obligations of the Institution pursuant to this Section 8.2 shall remain in
full force and effect after the termination of this Lease Agreement until the
expiration of the period stated in the applicable statute of limitations during
which a claim, cause of action or prosecution relating to the matters herein
described may be brought and payment in full or the satisfaction of such claim,
cause of action or prosecution relating to the matters herein described and the
payment of all expenses and charges incurred by the Issuer, the Trustee or their
respective members, directors, officers, agents and employees, relating to the
enforcement of the provisions herein specified.
(3) In the event of any claim against the Issuer, the Trustee or their
respective members, directors, officers, agents or employees by any employee
or contractor of the Institution or anyone directly or indirectly employed by
any of them or anyone for whose acts any of them may be liable, the obligations
of the Institution hereunder shall not be limited in any way by any limitation
on the amount or type of damages, compensation, disability benefits or other
employee benefit acts.
Section 1.47 Right to Inspect Facility. The Issuer, the LOC Bank and the
Trustee and the duly authorized agents of either of them shall have the right
at all reasonable times to inspect the Facility.
Section 1.48 Institution to Maintain its Existence; Other Covenants. The
Institution agrees that so long as the Bonds remain Outstanding (a) it will
maintain its existence as a corporation subject to service of process within
the State; and (b) it will at all times have cash, or cash equivalents, in an
amount not less than the maximum amount of interest owing on the Outstanding
Bonds in any semi-annual period; and (b) the Facility will at all times be
operated as a "project" (as such term is defined in the Act as of the Closing
Date) throughout the term hereof.
Section 1.49 Qualification in State, Notice and Service of Process.
(1) Throughout the Lease Term, the Institution will remain qualified to do
business and the Institution will remain subject to service of process in the
State. In the event of any litigation in connection with the Institution
Documents, the Issuer Documents, the Indenture, or the Bonds or any transactions
contemplated hereby or thereby, the Institution waives all rights to a trial by
jury and agrees not to assert any counterclaim (except a compulsory counter-
claim) of any nature against the Issuer or the Trustee in such litigation. Any
action or suit in connection with the Institution Documents, the Issuer
Documents, the Indenture, or the Bonds, or any transactions contemplated hereby
or thereby, may be brought in a court of record in the State of New York sitting
in Xxxxxx County or in the United States District Court for the Southern
District of New York, the Institution hereby consenting to the nonexclusive
jurisdiction of each thereof.
(2) The Institution agrees that service of process may be made on the
Institution by mailing a copy of the summons to the Institution by certified or
registered mail at the address set forth in Section 12.1 hereof or at such other
address within the State as may be designated by the Institution pursuant to
Section 12.1 of this Lease Agreement. In addition, the Institution hereby
designates and appoints, without power of revocation, the Secretary of State of
the State of New York as the agent of the Institution, upon whom may be served
all process, pleadings, notices or other papers that may be served upon the
Institution as a result of any of its obligations under this Lease Agreement.
Any notice, process, pleadings or other papers served upon the Secretary of
State shall, at the same time, be sent by certified or registered mail to the
Institution at such address as is specified in or pursuant to Section 12.1 of
this Lease Agreement.
Section 1.50 Agreement to File Annual Statements and Provide Information. The
Institution shall file with the New York State Department of Taxation and
Finance an annual statement of the value of all sales and use tax exemptions,
if any, claimed in connection with the Facility in compliance with
Section 874(8) of the New York State General Municipal Law. The Institution
shall submit a copy of such annual statement to the Issuer at the time of filing
with the Department of Taxation and Finance. The Institution further agrees
whenever requested by the Issuer to provide and certify or cause to be provided
and certified such information concerning the Institution, its finances, its
operations and its affairs necessary to enable the Issuer to make any report
required by law, governmental regulation or any of the Issuer Documents or
Institution Documents.
Section 1.51 Books of Record and Account; Financial Statements. The
Institution at all times agrees to maintain proper accounts, records and books
in which full and correct entries shall be made, in accordance with generally
accepted accounting principles, of all transactions and events relating to the
business and affairs of the Institution. The Institution shall furnish to the
Issuer and to the Trustee within thirty (30) days of their filing, copies of all
reports, if any, filed with the Securities and Exchange Commission, pursuant to
the Securities Exchange Act of 1934 as amended, relative to the Institution.
Section 1.52 Compliance with Orders, Ordinances, Etc.
(1) The Institution, throughout the Lease Term, agrees that it will
promptly comply in all material respects, and cause any other lessees or
occupant of the Facility to comply in all material respects, with all statutes,
codes, laws, acts, ordinances, orders, judgments, decrees, injunctions, rules,
regulations, permits, licenses, authorizations, directions and requirements,
ordinary or extraordinary, that now or at any time hereafter may be applicable
to the Facility or any part thereof or to the construction, improvement and
installation thereof, or to any use, manner of use or condition of the Facility
or any part thereof, of all federal, state, county, municipal and other
governments, departments, commissions, boards, courts, authorities, officials
and officers and companies or associations insuring the premises having juris-
diction of the Facility or any part thereof, or to the construction, improvement
and installation thereof, or to any use, manner of use or condition of the
Facility or any part thereof including but not limited to compliance with the
terms of the Reimbursement Agreement.
(2) The Institution shall keep or cause the Facility to be kept free of
Hazardous Materials (as defined hereinafter) and Hazardous Substances. Without
limiting the foregoing, the Institution shall not cause or permit the Facility
to be used to generate, manufacture, refine, transport, treat, store, handle,
dispose, transfer, produce or process Hazardous Materials and Hazardous
Substances, except in compliance with all applicable federal, state and local
laws or regulations, nor shall the Institution cause or permit, as a result of
any intentional or unintentional act or omission on the part of the Institution
or any contractor, subcontractor, tenant or subtenant, a release of Hazardous
Materials and Hazardous Substances onto the Facility or onto any other property.
The Institution shall comply in all material respects with and ensure compliance
in all material respects by all contractors, subcontractors, tenants and
subtenants with all applicable federal, state and local laws, ordinances,
rules and regulations, whenever and by whomever triggered, and shall obtain and
comply in all material respects with, and ensure that all contractors, sub-
contractors, tenants and subtenants obtain and comply in all material respects
with, any and all approvals, registrations or permits required thereunder. The
Institution shall:
(1) conduct and complete all investigations, studies, sampling, and
testing, and all remedial, removal, and other actions necessary to
clean up and remove all Hazardous Materials and Hazardous Sub-
stances, on, from, or affecting the Facility (A) in accordance
with all applicable federal, state, and local laws, ordinances,
rules, regulations, and policies and (B) in accordance with the
orders and directives of all federal, state, and local governmental
authorities; and
(2) defend, indemnify, and hold harmless the Trustee and the Issuer,
their respective employees, agents, officers, and directors, from
and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs, or expenses of whatever kind or nature,
known or unknown, contingent or otherwise, arising out of, or in any
way related to (A) the presence, disposal, release, or threatened
release of any Hazardous Materials and Hazardous Substances that
are on, from or affecting the soil, water, vegetation, buildings,
personal property, persons, animals, or otherwise, (B) any bodily
injury, personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to such
Hazardous Materials and Hazardous Substances, (C) any lawsuit
brought or threatened, settlement reached, or government order
relating to such Hazardous Materials and Hazardous Substances,
and/or (D) any violation of laws, orders, regulations, requirements,
or demands of government authorities, or any policies or
requirements of the Trustee, and the Issuer that are based upon
or in any way related to such Hazardous Materials and Hazardous
Substances, including, without limitation, attorney and consultant
fees, investigation and laboratory fees, court costs, and litigation
expenses except with respect to claims or demands arising as the
result of the gross negligence or intentional or willful wrongdoing
of the Issuer or the Trustee or any of its members, agents or
employees.
For purposes of this Section, "Hazardous Materials" includes, without
limitation, any flammable explosives, radioactive materials, hazardous
materials, hazardous wastes, hazardous or toxic substances, or related materials
defined in the Comprehensive Environmental Response, Compensation, and Liability
Act of 1980 as amended (42 U.S.C. Sections 9601, et seq.), the Superfund
Amendments and Reauthorization Act of 1986 (Pub. L. No. 99-499, 100 stat. 1613
(1986), the Hazardous Materials Transportation Act as amended (49 U.S.C.
Sections 1801, et seq.), and in the regulations adopted and publications
promulgated pursuant thereto, or any other federal, state or local environmental
law, ordinance, rule, or regulation. The provisions of this Section shall be in
addition to any and all other obligations and liabilities the Institution may
have to the Issuer or the Trustee at common law, and shall survive the
transactions contemplated herein.
(3) Notwithstanding the provisions of subsections (a) and (b) hereof, the
Institution may in good faith contest the validity or the applicability of any
requirement of the nature referred to in such subsections (a) and (b) by
appropriate legal proceedings conducted in good faith and with due diligence.
In such event, the Institution may fail to comply with the requirement or
requirements so contested during the period of such contest and any appeal
therefrom, unless the Issuer notifies the Institution that by failure to comply
with such requirement or requirements, the Facility or any part thereof may be
subject to loss, penalty or forfeiture, in which event the Institution shall
promptly take such action with respect thereto or provide such security as
shall be satisfactory to the LOC Bank and to the Issuer. If at any time the
then existing use or occupancy of the Facility shall, pursuant to any zoning
or other law, ordinance or regulation, be permitted only so long as such use
or occupancy shall continue, the Institution shall use its best efforts to not
cause or permit such use or occupancy to be discontinued without the prior
written consent of the Issuer.
(4) Notwithstanding the provisions of this Section 8.8, if, because of a
breach or violation of the provisions of subsections (a) or (b) hereof (without
giving effect to subsection (c) hereof), either the Issuer, the Trustee or any
of their respective members, directors, officers, agents, or employees, shall be
threatened with a fine, liability, expense or imprisonment, then, upon notice
from the Issuer, or the Trustee, the Institution shall immediately provide legal
protection and/or pay amounts necessary in the opinion of the Issuer or the
Trustee, as the case may be, and their respective members, directors, officers,
agents and employees deem sufficient, to the extent permitted by applicable law,
to remove the threat of such fine, liability, expense or imprisonment.
(5) Notwithstanding any provisions of this Section, the Trustee and the
Issuer retain the right to defend themselves in any action or actions that are
based upon or in any way related to such Hazardous Materials if there is a
conflict between the legal positions of the Trustee or the Issuer and the
Institution, in which event the party whose legal position is in conflict with
the legal position of the Institution may engage separate counsel. In any such
defense of themselves, the Trustee and the Issuer may each select their own
counsel, and any and all costs of such defense, including, without limitation,
attorney and consultant fees, investigation and laboratory fees, court costs,
and litigation expenses, shall be paid by the Institution.
(6) Dynacept and the Agency further agree that the deed and lease for this
transaction have been created solely to acknowledge the security interest that
the Agency has in the Facility and are not intended to create any possessory or
proprietary interest beyond that security interest and that this deed covers
only the Building, improvements thereto, and equipment now or hereafter located
therein and the agency has not, will not and has no right to operate, manage, or
control any activities in that Building or on the land, property and real estate
upon which the Building is located, including without limitation those related
to the generation, storage, handling or disposal of hazardous wastes and
substances as those terms are defined by federal, state and local laws and
regulations, such that Agency has no ownership, operator or arranger status
under those laws and regulations or under this deed and lease. During the
calendar year 2000, the Institution will perform, or cause to be performed, a
geophysical test to determine whether any underground storage tanks are present
on the Facility site.
Section 1.53 Discharge of Liens and Encumbrances.
(1) The Institution, throughout the Lease Term, shall not permit or create
or suffer to be permitted or created any Lien, except for Permitted Encum-
brances, upon the Facility or any part thereof by reason of any labor, services
or materials rendered or supplied or claimed to be rendered or supplied with
respect to the Facility or any part thereof.
(2) Notwithstanding the provisions of subsection (a) hereof, the
Institution may in good faith contest any such Lien. In such event, the
Institution may permit the items so contested to remain undischarged and
unsatisfied during the period of such contest and any appeal therefrom, unless
the Issuer or the Trustee notifies the Institution that by nonpayment of any
such item or items, the lien of the Indenture may be materially endangered or
the Facility or any part thereof may be subject to loss or forfeiture, in which
event the Institution shall promptly secure payment of all such unpaid items by
filing a bond, in form and substance satisfactory to the Trustee, thereby
causing such Lien to be removed or by taking such other actions as may be
satisfactory to the Trustee to protect its interests. Mechanics' Liens shall be
discharged or bonded within thirty (30) days of the filing or perfection
thereof.
Section 1.54 Identification of Equipment. All equipment that may become the
Property of the Issuer pursuant to the provisions of this Lease Agreement shall
be properly identified by the Institution by such appropriate records, including
computerized records, as may be approved by the Trustee. All equipment and
other Property of whatever nature affixed or attached to the Land or used or to
be used by the Institution in connection with the Land or the Improvements shall
be deemed presumptively to be owned by the Issuer, rather than the Institution,
unless the same were utilized for purposes of construction of the Facility or
were installed by the Institution and title thereto was retained by the
Institution as provided in Section 6.2 of this Lease Agreement and such equip-
ment and other Property were properly identified by such appropriate records as
were approved by the Trustee.
Section 1.55 Depreciation Deductions and Investment Tax Credit. The parties
agree that, as between them, the Institution shall be entitled to all applicable
depreciation deductions with respect to any depreciable property comprising a
part of the Facility pursuant to Section 167 or Section 168 of the Code and to
any applicable investment credit pursuant to Section 38 of the Code with respect
to any part of the Facility that constitutes "Section 38 Property."
Section 1.56 Employment Opportunities; Notice of Jobs. The Institution
covenants and agrees that, in consideration of the participation of the Issuer
in the transactions contemplated herein, it will, except as otherwise provided
by collective bargaining contracts or agreements to which it is a party, cause
any new employment opportunities created in connection with the Facility to be
listed with the New York State Department of Labor, Community Services Division
and with the administrative entity of the service delivery area created pursuant
to the Job Training Partnership Act (PL 97-300) in which the Facility is located
(collectively, the "Referral Agencies"). The Institution also agrees that it
will, except as otherwise provided by collective bargaining contracts or
agreements to which it is a party, first consider for such new employment
opportunities persons eligible to participate in federal job training partner-
ship (PL 97-300) programs who shall be referred by the Referral Agencies.
Section 1.57 Arbitrage and Tax Provisions.
(1) The Institution hereby particularly covenants and agrees with the
holders of the Bonds that no part of the proceeds which are derived from the
sale of the Bonds or received with respect to the Bonds shall be used directly
or indirectly to acquire any securities or obligation the acquisition of which
would cause the Bonds to be "arbitrage bonds", within the meaning of Section 148
of the Code as in effect and the applicable Treasury Regulations promulgated
thereunder.
(2) The Institution hereby covenants and agrees that is shall neither
take any action nor fail to take any action which, if either taken or not taken,
would adversely affect the exclusion from gross income of interest on the Bonds
under Section 103 of the Code and the applicable Treasury Regulations
promulgated thereunder.
(3) The Institution hereby covenants and agrees that, in order to assure
compliance with the rebate requirements of Section 148 of the Code, the Insti-
tution shall establish such accounting procedures as are necessary adequately
to determine, account for and pay over any amounts required to be paid to the
United States in a manner consistent with the requirements of Section 148 of the
Code. Such covenant shall survive the defeasance of the lien securing the
Bonds.
Section 1.58 Continuing Disclosure. The Institution hereby covenants and
agrees that it will comply with and carry out all of the provisions of any
continuing disclosure agreement that may be required in connection with the
underwriting or remarketing of the Bonds, including remarketing in connection
with a conversion of the Bonds to the Fixed Rate as provided in the Indenture.
Notwithstanding any other provision of this Lease Agreement, failure of the
Institution to comply with such continuing disclosure agreement shall not be
considered an Event of Default; however, the Trustee may (and, at the request
of the Underwriter or the Owners of at least 25% in aggregate principal amount
of the Outstanding Bonds and upon indemnification of the Trustee for such
actions as provided in the Indenture, shall), or any Bondholder or beneficial
owner may, take such actions as may be necessary and appropriate, including
seeking specific performance by court order, to cause the Institution to comply
with its obligations under this Section 8.14.
ARTICLE IX
RELEASE OF CERTAIN INTEREST IN LAND;
ASSIGNMENTS AND SUBLEASING;
PLEDGE OF INTERESTS
Section 1.59 Restriction on Sale of Facility; Release of Certain Interest
in Land.
(1) Except as otherwise specifically provided in this Article IX and in
Article X hereof, the Issuer and the Institution shall not sell, convey,
transfer, encumber or otherwise dispose of the Facility or any part thereof or
any of its rights under this Lease Agreement, without the prior written consent
of the Institution and the Trustee.
(2) With the prior written consent of the Trustee and the LOC Bank (which
consent may not be unreasonably withheld but may be subject to such reasonable
conditions as the Trustee may deem appropriate), the Institution from time to
time may release from the provisions of this Lease Agreement and the leasehold
estate created hereby any part of, or interest in, the Land that is not
necessary, desirable or useful for the Facility. In such event, the Institution,
at the Institution's sole cost and expense, shall execute and deliver, and
request the Trustee to execute and deliver, any and all instruments necessary or
appropriate to so release such leasehold interest in the Land and convey such
interest therein, to the Institution or such other Person as the Institution
may designate. As a condition to such conveyance, the Trustee shall be provided
with a copy of the instrument transferring such interest in such Land, together
with a certificate of an Authorized Officer of the Institution stating that
there is then no Event of Default under this Lease Agreement and such interest
in the Land is not necessary, desirable or useful for the Facility.
(3) No conveyance of any interest in the Land effected under the provisions
of this Section 9.1 shall entitle the Institution to any abatement or diminution
of the rents payable by it under this Lease Agreement.
Section 1.60 Removal of Equipment.
(1) The Issuer shall not be under any obligation to remove, repair or
replace any inadequate, obsolete, worn out, unsuitable, undesirable or
unnecessary item of Equipment. In any instance where the Institution determines
that any item of equipment has become inadequate, obsolete, worn out,
unsuitable, undesirable or unnecessary, the Institution, with the prior written
consent of the Trustee (which consent may not be unreasonably withheld but may
be subject to such reasonable conditions as the Trustee may deem appropriate),
may remove such items from the Facility and may sell, trade-in, exchange or
otherwise dispose of the same, as a whole or in part, provided that such removal
will not materially impair the operation of the Facility for the purpose for
which it is intended or change the nature of the Facility so that it does not
constitute a "project" under the Act.
(2) The Issuer shall execute and deliver to the Institution all instruments
instruments necessary or appropriate to enable the Institution to sell or other-
wise dispose of any such item of equipment. The Institution shall pay any costs
(including counsel fees) incurred in transferring title to any item of equipment
removed pursuant to this Section 9.2.
(3) The removal of any item of equipment pursuant to this Section shall not
entitle the Institution to any abatement or diminution of the Lease Payments
payable by it under this Lease Agreement.
Section 1.61 Assignment and Leasing.
(1) This Lease Agreement may not be assigned, in whole or in part, and the
Facility may not be leased, in whole or in part, without the prior written
consent of the LOC Bank and the Issuer in each instance. Any assignment or
leases shall be on the following conditions:
(1) no assignment or leases shall relieve the Institution from primary
liability for any of its obligations hereunder;
(2) the assignee(s) or sublessee(s) shall assume the obligations of the
Institution hereunder to the extent of the interest assigned or sub-
leased;
(3) the Institution shall, within ten (10) days after the delivery
thereof, furnish or cause to be furnished to the Issuer, the LOC
Bank and to the Trustee a true and complete copy of such assignment
or leases and the instrument of assumption;
(4) neither the validity nor the enforceability of the Bonds or any Bond
Document shall be adversely affected thereby; and
(5) the Facility shall continue to constitute a "project" as such
term is defined in the Act.
(2) If the Trustee, the LOC Bank or the Issuer shall so request, as of the
purported effective date of any assignment or leases pursuant to subsection
(a) of this Section 9.3, the Institution at its cost shall furnish the Trustee,
the LOC Bank or the Issuer, as appropriate, with an opinion, in form and
substance satisfactory to the Trustee, the LOC Bank or the Issuer, as
appropriate, (i) of Bond Counsel as to item (v) above, and (ii) of Independent
Counsel as to items (i), (ii) and (iv) above.
Section 1.62 Pledge of Issuer's Interests to the Trustee. The Issuer shall
pledge and assign its rights to and interest in this Lease Agreement and in all
amounts payable by the Institution pursuant to Section 5.3 hereof and all other
provisions of this Lease Agreement (other than Unassigned Rights and except for
the monies and investments from time to time in the Rebate Fund), to the Trustee
and the LOC Bank as security for the payment of the principal of, Purchase
Price, Sinking Fund Installments, and premium, if any, and interest on the Bonds
(including tendered or Bank Bonds not yet resold) and the Institution's
obligations to the LOC Bank under the Reimbursement Agreement. The Institution
hereby acknowledges and consents to such mortgage, if any, pledge and
assignment by the Issuer. Notwithstanding the foregoing, all indemnities herein
contained shall continue to run to the Issuer for its benefit as well as for the
benefit of the Trustee and the LOC Bank.
Section 1.63 Merger of Issuer.
(1) Nothing contained in this Lease Agreement shall prevent the consolida-
tion of the Issuer with, or merger of the Issuer into, or transfer of title to
the entire Facility to any other public benefit corporation or political sub-
division that has the legal authority to own and sell the Facility, provided
that:
(1) upon any such consolidation, merger or transfer, the due and
punctual performance and observance of all the agreements and
conditions of this Lease Agreement to be kept and performed by the
Issuer shall be expressly assumed in writing by the public benefit
corporation or political subdivision resulting from such consolida-
tion or surviving such merger or to which the Facility shall be
transferred; and
(2) the status of the Facility as a "project", as such term is defined
in the Act, shall not be adversely affected thereby.
(2) Within thirty (30) days of the consummation of any such consolidation,
merger or transfer of title, the Issuer shall give notice thereof in reasonable
detail to the Institution, the LOC Bank and the Trustee and shall furnish to the
Institution, the LOC Bank and the Trustee (i) a favorable opinion of Independent
Counsel as to compliance with the provisions of Section 9.5(a)(i) hereof, and
(ii) a favorable opinion of Bond Counsel opining as to compliance with the
provisions of Section 9.5(a)(ii) hereof. The Issuer promptly shall furnish such
additional information with respect to any such transaction as the Institution,
the LOC Bank or the Trustee may reasonably request.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 1.64 Events of Default Defined.
(1) The following shall be "Events of Default" under this Lease
Agreement:
(1) the failure by the Institution to pay or cause to be paid on the
date due, the amount specified to be paid pursuant to Section 5.3(a)
hereof,
(2) the failure by the Institution to observe and perform any covenant
contained in Sections 8.4 and 9.3 hereof,
(3) any representation or warranty of the Institution herein or in the
Bond Purchase Agreement or the Letter of Representation shall prove
to have been false or misleading in any material respect;
(4) the failure by the Institution to observe and perform any covenant,
condition or agreement hereunder on its part to be observed or
performed (except obligations referred to in 10.1(a)(i), (ii) or
(vii)) for a period of thirty (30) days after written notice,
specifying such failure and requesting that it be remedied, given
to the Institution by the Issuer, the LOC Bank or the Trustee;
(5) the dissolution or liquidation of the Institution; the failure by
the Institution to release, stay, discharge, lift or bond within
thirty (30) days any execution, garnishment, judgment or attachment
of such consequence as may impair its ability to carry on its
operations; the failure by the Institution generally to pay its
debts as they become due; an assignment by the Institution for the
benefit of creditors; an Act of Bankruptcy on the part of the
Institution or the commencement by the Institution (as the debtor)
of a case under the Bankruptcy Code or any proceeding under any
other insolvency law; or the commencement of a case under the
Bankruptcy Code or any proceeding under any other insolvency law
against the Institution (as the debtor) and a court having juris-
diction in the premises enters a decree or order for relief against
the Institution as the debtor in such case or proceeding, or such
case or proceeding is consented to by the Institution or remains
undismissed for forty (40) days, or the Institution consents to or
admits the material allegations against it in any such case or
proceeding; or a trustee, receiver or agent (however named) is
appointed or authorized to take charge of substantially all of the
Property of the Institution for the purpose of enforcing a lien
against such Property or for the purpose of general administration
of such Property for the benefit of creditors;
(6) an Event of Default under the Reimbursement Agreement or the
Indenture shall have occurred and be continuing;
(7) a breach of any covenant or representation contained in Section 8.8
hereof with respect to environmental matters or in the Environmental
Compliance and Indemnification Agreement; or
(8) the invalidity, illegality or unenforceability of any of the Bond
Documents.
(2) Notwithstanding the provisions of Section 10.1(a), if by reason of
force majeure any party hereto shall be unable in whole or in part to carry out
its obligations under Sections 4.1 and 6.1 of this Lease Agreement and if such
party shall give notice and full particulars of such force majeure in writing to
the other party and to the LOC Bank and the Trustee, within a reasonable time
after the occurrence of the event or cause relied upon, such obligations under
this Lease Agreement of the party giving such notice (and only such obliga-
tions), so far as they are affected by such force majeure, shall be suspended
during continuance of the inability, which shall include a reasonable time for
the removal of the effect thereof. The term "force majeure" as used herein
shall include, without limitation, acts of God, strikes, lockouts or other
industrial disturbances, acts of public enemies, acts, priorities or orders of
any kind of the government of the United States of America or of the State or
any of their departments, agencies, governmental subdivisions, or officials, any
civil or military authority, insurrections, riots, epidemics, landslides,
lightning, earthquakes, fire, hurricanes, storms, floods, washouts, droughts,
arrests, restraint of government and people, civil disturbances, explosions,
breakage or accident to machinery, transmission pipes or canals, shortages of
labor or materials or delays of carriers, partial or entire failure of
utilities, shortage of energy or any other cause or event not reasonably
within the control of the party claiming such inability and not due to its
fault. The party claiming such inability shall remove the cause for the same
with all reasonable promptness. It is agreed that the settlement of strikes,
lockouts and other industrial disturbances shall be entirely within the discre-
tion of the party having difficulty, and the party having difficulty shall not
be required to settle any strike, lockout and other industrial disturbances by
acceding to the demands of the opposing party or parties.
Section 1.65 Remedies on Default.
(1) Whenever any Event of Default shall have occurred, the Issuer, the LOC
Bank or the Trustee may take, to the extent permitted by law, any one or more of
the following remedial steps:
(1) declare, by written notice to the Institution, to be immediately due
and payable, whereupon the same shall become immediately due and
payable: (A) all unpaid Lease Payments payable pursuant to
Section 5.3(a) hereof in amount equal to the aggregate unpaid
principal balance of all Bonds together with all interest that has
accrued and will accrue thereon to the date of payment, and (B) all
other payments due under this Lease Agreement; provided, however,
that if an Event of Default specified in Section 10.1(a)(v) hereof
shall have occurred, such Lease Payments and other payments due
under this Lease Agreement shall become immediately due and payable
without notice to the Institution or the taking of any other action
by the Issuer, the Trustee or the LOC Bank;
(2) apply any undisbursed monies in the Project Fund, the Renewal Fund,
and any other Fund or Account under the Indenture (other than those
sums attributable to Unassigned Rights and except for the monies and
investments from time to time in the Rebate Fund) to the payment of
the outstanding principal amount of the Bonds and premium, if any,
and accrued and unpaid interest on the Bonds; or
(3) take any other action at law or in equity that may appear necessary
or desirable to collect the payments then due or thereafter to
become due hereunder and to enforce the obligations, agreements or
covenants of the Institution under this Lease Agreement.
(2) Any sums payable to the Issuer as a consequence of any action taken
pursuant to this Section 10.2 (other than those sums attributable to Unassigned
Rights and except for monies on deposit in the Rebate Fund) shall be paid to the
Trustee and applied to the payment of the Bonds.
(3) No action taken pursuant to this Section 10.2 shall relieve the
Institution from its obligation to make all payments required by Section 5.3
hereof.
(4) The Institution shall have the right upon notice to the Issuer and the
Trustee to enter the Facility with agents or representatives of the Issuer and
the Trustee to remove any equipment or other personalty owned by the Institution
if such equipment or personalty is not part of the Facility.
(5) The Issuer, the LOC Bank and the Trustee shall have all of the rights,
powers and remedies of a secured party under the Uniform Commercial Code of New
York, including without limitation, the right to sell, lease or otherwise
dispose of any or all of the Property subject to the security interests granted
by the Institution to the Issuer and the Trustee pursuant to Section 5.7 of this
Lease Agreement (the "Collateral"), and to take possession of the Collateral,
and for that purpose Issuer or the Trustee may enter peaceably any premises on
which the Collateral or any part thereof may be situated and remove the same
therefrom, and the Institution will not resist or interfere with such action.
The Issuer, the LOC Bank or the Trustee may require the Institution to assemble
the Collateral and make it available to the Issuer at a place to be designated
by the Issuer that is reasonably convenient to both parties. The Institution
hereby agrees that its above-mentioned address and the place or places of
location of the Collateral are places reasonably convenient to it to assemble
the Collateral. Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market, the
Issuer, the LOC Bank or the Trustee will send the Institution reasonable notice
of the time and place of any public sale or reasonable notice of the time after
which any private sale or any other disposition thereof is to be made. The
requirement of sending reasonable notice shall be met if such notice is mailed,
postage prepaid, to the Institution at least ten (10) Business Days before the
time of the sale or disposition.
Section 1.66 Remedies Cumulative. No remedy herein conferred upon or reserved
to the Issuer, the LOC Bank or the Trustee is intended to be exclusive of any
other available remedy, but each and every such remedy shall be cumulative and
in addition to every other remedy given under this Lease Agreement or now or
hereafter existing at law or in equity. No delay or omission to exercise any
right or power accruing upon any default shall impair any such right or power
or shall be construed to be a waiver thereof, but any such right and power may
be exercised from time to time and as often as may be deemed expedient. In order
to entitle the Issuer, the LOC Bank or the Trustee, as appropriate, to exercise
any remedy reserved to it in this Article X, it shall not be necessary to give
any notice, other than such notice as may be herein expressly required in this
Lease Agreement.
Section 1.67 Agreement to Pay Attorneys' Fees and Expenses.
(1) In the event the Institution defaults under any of the provisions of
this Lease Agreement and the Issuer employs attorneys or incurs other expenses
for the collection of amounts payable hereunder or the enforcement of
performance or observance of any obligations or agreements on the part of the
Institution herein contained, the Institution shall, on demand therefor, pay to
the Issuer the reasonable fees of such attorneys and such other expenses so
incurred.
(2) In the event the Institution should default under any of the provisions
of this Lease Agreement and the Trustee and/or the LOC Bank should employ
attorneys or incur other expenses for the collection of amounts payable here-
under or the enforcement of performance or observance of any obligations or
agreements on the part of the Institution herein contained, the Institution
shall, on demand therefor, pay to the LOC Bank and/or Trustee the reasonable
fees and expenses of such attorneys and such other expenses so incurred.
Section 1.68 No Additional Waiver Implied by One Waiver. In the event any
agreement contained herein should be breached by any party and thereafter waived
by any other party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach hereunder.
ARTICLE XI
EARLY TERMINATION OF LEASE AGREEMENT;
OPTION IN FAVOR OF INSTITUTION
Section 1.69 Early Termination of Lease Agreement. The Institution shall have
the option to terminate this Lease Agreement at any time that the Bonds are
subject to redemption in whole under the Indenture and upon filing with the
Issuer and the Trustee a certificate signed by an Authorized Representative of
the Institution stating the Institution's intention to do so pursuant to this
Section and the date upon which such payment shall be made (which date shall not
be less than forty-five (45) nor more than ninety (90) days from the date such
certificate is filed), and upon compliance with the requirements set forth in
Section 11.2 hereof.
Section 1.70 Conditions to Early Termination of Lease Agreement. In the event
the Institution exercises its option to terminate this Lease Agreement in
accordance with the provisions of Section 11.1 hereof, the Institution shall
make the following payments:
(1) To the Trustee for the account of the Issuer: an amount certified by
the Trustee that when added to the total amount on deposit with the Trustee for
the account of the Issuer and the Institution and available for such purpose
will be sufficient to pay the principal of Purchase Price, Sinking Fund Install-
ments, premium, if any, and interest on the Bonds.
(2) To the Issuer: an amount certified by the Issuer sufficient to pay all
unpaid fees and expenses of the Issuer incurred under the Bond Documents.
(3) To the LOC Bank: an amount certified by the LOC Bank sufficient to pay
all obligations due and owing under the Reimbursement Agreement and the Letter
of Credit.
(4) To the appropriate Person: an amount sufficient to pay all other fees,
expenses or charges, if any, due and payable or to become due and payable under
the Bond Documents.
Section 1.71 Obligation to Accept Facility. Upon termination or expiration of
the Lease Term, in accordance with Sections 5.2 or 11.1 hereof, the Issuer shall
surrender its fee simple interest in the Facility to the Institution and the
Institution shall accept the surrender of the Issuer's fee simple interest in
the Facility from the Issuer for the purchase price of One Dollar ($1.00) and
all certificates required by Section 11.2. The Institution shall accept the
surrender of the Issuer's fee simple interest in the Facility by giving written
notice to the Issuer and to the Trustee (which may be contained in the certifi-
cate referred to in Section 11.1 hereof) (i) declaring the Institution's
election to prepay all rent under Section 5.3 hereof and to redeem all
Outstanding Bonds, and (ii) fixing the date of closing for such prepayment of
rent and redemption of the Bonds, which shall be the date on which this Lease
Agreement is to be terminated.
Section 1.72 Termination of Lease. At the closing of any surrender of the
Issuer's fee simple interest in the Facility pursuant to Section 11.3 hereof,
the Issuer shall, upon receipt of One Dollar ($1.00), deliver and request the
Trustee to deliver to the Institution all necessary documents (i) to terminate
this Lease and surrender the Issuer's fee simple interest in the Facility to the
Institution, subject only to the following: (A) any Liens to which title to
such Facility was subject when leased to the Issuer, (B) any Liens created at
the request of the Institution, or the creation of which the Institution
consented or in the creation of which the Institution acquiesced, (C) any
Permitted Encumbrances (other than the lien of the Indenture), and (D) any Liens
resulting from the failure of the Institution to perform or observe any of the
agreements on its part contained in this Lease Agreement or arising out of an
Event of Default hereunder, (ii) to release and convey to the Institution all of
the Issuer's rights and interest in and to any rights of action or any Net
Proceeds of insurance or Condemnation awards with respect to the Facility (but
not including any Unassigned Rights), and (iii) to discharge and release any
security interest held by the Trustee or the Owners of the Bonds.
Section 1.73 Amounts Remaining on Deposit with the Trustee upon Payment of
Bonds. After payment in full of the principal of, Purchase Price, Sinking Fund
Installments, premium, if any, and interest on the Bonds, the payment in full to
the LOC Bank of all amounts due and owing under the Reimbursement Agreement and
the payment of all amounts owed to the Issuer, and fees, charges, expenses and
other amounts required to be paid under the Bond Documents, all amounts on
deposit with the Trustee for the account of the Issuer and the Institution under
the Bond Documents (except for amounts attributable to Unassigned Rights or
amounts on deposit in the Purchase Fund or the Rebate Fund) shall belong to and
be paid to the Institution upon its written request by the Trustee as an over-
payment of rent, and neither the Trustee nor the Owners of the Bond shall have
any rights hereunder, except those that shall have theretofore vested.
ARTICLE XII
MISCELLANEOUS
Section 1.74 Notices. All notices, certificates and other communications
hereunder shall be in writing and shall be either delivered personally or sent
by certified mail, postage prepaid, return receipt requested, addressed as
follows or to such other address as any party may specify in writing to the
other:
To the Issuer:
County of Xxxxxx Industrial Development Agency
00 Xxxxxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
With a copy to the Issuer's counsel:
Xxxxxx X. Xxxxxxxx, Esq.
Cuddy & Xxxxx & Xxxxx LLP
00 Xxxxx Xxxxxx
Xxxxx Xxxxxx, Xxx Xxxx 00000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
Xxxx Xxxxx, Esq.
00 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Phone: (000) 000-0000
Fax: (000) 000-0000
To the Institution:
Xxxx Xxxxxxxxx -AND- Xxxxx Xxxxxx
President Triple S Plastics, Inc.
Dynacept Corporation Xxxxx 000
0 Xxxxxxxxxxxxx Xxxxxxxxx 0000 Xxxxxxxxxxx Rd.
Southeast, New York 10509-2344 Xxxxxxx, XX 00000
Telephone (000) 000-0000 (000)000-0000
Facsimile (000) 000-0000 (000)000-0000
With a copy to the Institution's counsel:
Xxxx Xxxxxxxxxxx, Esq.
Varnum, Riddering, Xxxxxxx & Xxxxxxx, LLP
Xxxxxxxxxxx Xxxxx
X.X. Xxx 000
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
Telephone Number: (000) 000-0000
Facsimile Number: (000) 000-0000
To the Trustee:
Corporate Trust Officer
Michigan National Bank
Attn: Corporate Trust (02-02)
X.X. Xxx 0000
Xxxxx Xxxxxx, Xxxxxxxx 00000-0000
To the LOC Bank:
National City Bank of Michigan/Illinois
Mail Code K-B01-21
000 Xxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Commercial Loan Services Department
A duplicate copy of each notice, certificate and other written communication
given hereunder by either the Issuer or the Institution to the other shall also
be given to the Trustee and the LOC Bank and a duplicate copy of each notice,
certificate and any other written communication given hereunder by the Trustee,
the LOC Bank or the Issuer to the others shall also be given to the Institution,
at the addresses herein set forth or provided for. Such notice shall be deemed
to have been given upon receipt or upon refusal of the party being notified to
accept delivery of such notice.
Section 1.75 Binding Effect. This Lease Agreement shall inure to the benefit
of and shall be binding upon the parties and their respective successors and
assigns.
Section 1.76 Severability. In the event any provision of this Lease Agreement
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 1.77 Amendments, Changes and Modifications. This Lease Agreement may
not be amended, changed, modified, altered or terminated except in a writing
executed by the parties hereto and without the concurring written consent of
the Trustee.
Section 1.78 Execution of Counterparts. This Lease Agreement may be executed
in several counterparts, each of which shall be an original and all of which
shall constitute but one and the same instrument. Only possession of the
counterpart marked "Secured Party's Original" shall be effective to perfect the
rights of any holder of this Lease Agreement as counterparts shall be
marked "Duplicate" and no security interest therein can be created except by
possession of the "Secured Party's Original" counterpart.
Section 1.79 Applicable Law. This Lease Agreement shall be governed
exclusively by the applicable laws of the State of New York without regard or
reference to its conflict of laws principles.
Section 1.80 Further Assurances.
(1) [Reserved.]
(2) The Issuer and the Institution shall execute and deliver all
instruments and shall furnish all information necessary or appropriate
to perfect or protect any security interest created or contemplated by
this Lease Agreement and the Indenture.
Section 1.81 Survival of Obligations. This Lease Agreement shall survive the
purchase and sale of the Bonds and the performance of the obligations of the
Institution to make payments required by Section 5.3 and all indemnities shall
survive the foregoing and any termination or expiration of this Lease Agreement
and the payment of the Bonds.
Section 1.82 Table of Contents and Section Headings Not Controlling. The Table
of Contents and the headings of the several Sections in this Lease Agreement
have been prepared for convenience of reference only and shall not control or
affect the meaning of or be taken as an interpretation of any provision of this
Lease Agreement.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Issuer and the Institution have caused this Lease
Agreement to be executed in their respective names by their duly authorized
officers, all as of December 1, 2000.
COUNTY OF XXXXXX INDUSTRIAL
DEVELOPMENT AGENCY
By: _/s/_Joseph_F._Girven____
Name: Xxxxxx X. Xxxxxx
Title: Chairman
DYNACEPT CORPORATION
By: _/s/_Mark_Primavera_____
Name: Xxxx Xxxxxxxxx
Title: President
STATE OF NEW YORK )
ss:
COUNTY OF NEW YORK )
On this 28th day of December, 2000, before me personally came XXXXXX X. XXXXXX,
to me known, who, being by me duly sworn, did depose and say that he resides in
the Town of Mahopac, New York, that he is the Chairman of the COUNTY OF XXXXXX
INDUSTRIAL DEVELOPMENT AGENCY, the public benefit corporation of the State of
New York described in and which executed the within Lease Agreement; and that
he signed his name thereto by order of the members of said public benefit
corporation.
_/s/_Marie_Byrne_________________
Notary Public, State of New York
No. 01BY6000279
Qualified in Orange County
Commission Expires December 15, 0000
XXXXX XX XXX XXXX )
ss:
COUNTY OF NEW YORK )
On this 28th day of December, 2000, before me personally came Xxxx Xxxxxxxxx,
President of DYNACEPT CORPORATION, personaly known to me or proved to me on the
basis of satisfactory evidence to be the individual whose name is subscribed to
the within instrument, and acknowledge to me that he executed the same in his
capacity and that, by his signature on the instrument, the individual, or the
person upon behalf of which the individual acted, executed the instrument.
_/s/_Marie_Byrne______
Notary Public, State of New York
No. 01BY6000279
Qualified in Orange County
Commission Expires December 15, 2001
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
All that certain plot, piece or parcel of land situate, lying and being in the
Town of Southeast, County of Xxxxxx and State of New York being Lot No. 9 as
shown on a filed map entitled "Amended Subdivision Plat III - Terravest
International Corporate Park" filed in the Xxxxxx County Clerk's Office
June 26, l984 as filed map no. 1606C and being more particularly described as
follows:
Beginning at a point on the westerly side of New York State Route No. 312 where
the same is intersected by the southerly line of Lot No. 8 as shown on the
aforementioned filed map no. 1606C and the northerly line of the parcel herein
described; thence from said point of beginning along the westerly side of New
York Xxxxx Xxxxx Xx. 000 X 00-00-00 X 350.59, N 48-32-50 W 3.30, S 68-55-14
W 123.72 and S 41-50-04 W 75.00 to a point on the northerly side of
International Boulevard; thence along the northerly side of International
Boulevard on a curve to the left having a radius of 375.00, a central angle of
15-37-00 and a length of 102.21 to a point; thence continuing along the
northerly side of International Boulevard N 63-46-56 W 173.40 to the south-
easterly corner of Lot No. 1 as shown on a filed map entitled "Subdivision Plat
III - Terravest International Corporate Park" filed in the Xxxxxx County Clerk's
Office March 23, l979 as filed map no. 1606B; thence along the easterly line of
Lot Nos. 1 and 10, respectively, as shown on said filed map no. 0000X X 00-00-00
X 300.00 and N 33-02-02 E 215.00 to a point on the southerly line of Milan
Drive; thence along the southerly line of Milan Drive on a non-tangent curve to
the left (Radial Bearing N 12-24-39 E) having a radius of 215.00, a central
angle of 36-48-25 and a length of 138.12 to the southwesterly corner of Lot
No. 8 as shown on the aforementioned filed map no. 1606C; thence along the
southerly line of Xxx Xx. 0 X 00-00-00 X 21.10 and S 48-39-01 E 328.46 to the
point and place of beginning. Containing within said bounds 4.854 acres more or
less.
EXHIBIT B
To the extent it may legally do so, the Institution shall absolutely and
unconditionally agree to indemnify and hold harmless the Issuer and each person,
if any, who controls the Issuer and each of its respective officers, members,
partners and employees (collectively, the "Indemnified Parties") against any and
all losses, claims, damages and liabilities arising out of (a) any untrue
statement of a material fact contained in the Offering Circular, as the same has
been supplemented or amended, except under the captions "INTRODUCTORY STATEMENT"
(insofar as the statements contained thereunder relate to the Issuer), and "THE
ISSUER," (b) the omission from the Offering Circular of a material fact
(i) relating to the Institution, or (ii) known to the Institution, which
material fact is necessary to make the statements relating to the Institution
in the Offering Circular, in light of the circumstances under which they were
made, not misleading, (c) any litigation commenced or threatened arising from
a claim based upon such untrue statement or omission; provided, however, that
the Institution shall not be required to provide indemnification with respect
to settlement of any such claim unless such Institution has consented to such
settlement, or (d) any breach by the Institution of the representations and
warranties contained in the Lease Agreement.
In case any claims shall be made or action brought against any Indemnified
Party based upon the Offering Circular or otherwise as aforesaid, in respect of
which indemnity may be sought against the Institution, such Indemnified Party
shall promptly notify the Institution, in writing, setting forth the particulars
of such claim or action, and the Institution shall assume the defense thereof
including the employment of counsel (who shall be reasonably satisfactory to the
Indemnified Party). Any Indemnified Party shall have the right to employ
separate counsel in any such action or proceeding and to participate in the
defense thereof, but such the Institution shall not be required to pay the fees
and expenses of such separate counsel unless the counsel is employed with the
written approval and consent of the Institution; provided however, if single
counsel, who is representing an Indemnified Party and the Institution hereunder,
shall have concluded in good faith that a conflict of interest exists between or
among any one or more of such parties and the Institution, such parties shall
have the right to retain separate counsel and to participate in the defense of
any such action on its own behalf, and all costs and expenses incurred by each
such party shall be borne by the Institution; and further provided, if such
single counsel shall have concluded in good faith that a conflict of interest
exists between or among any two or more of the Indemnified Parties, each such
party, with respect to which such a conflict exists, shall have the right to
retain separate counsel and to participate in the defense of any such action on
its own behalf, and all costs and expenses incurred by each such party shall be
borne by the Institution; provided that any such parties who do not have a
conflict with each other shall be represented by the same counsel. If separate
counsel are employed as described above, the Institution and any such party
shall agree to cooperate as may reasonably be required in order to ensure the
proper and adequate defense of any such action, suit or proceeding, including,
but not limited to, making available to each other, and their counsel and
accountants, all books and records relating to such action, suit or proceeding,
but if any such counsel reasonably determines that the rendering of such
assistance will adversely affect the defense of its client, such counsel shall
not be required to comply with the terms of this sentence. Notwithstanding the
foregoing, each counsel selected by any Indemnified Party due to the existence
of a conflict of interest as provided above shall be permitted to participate
in the defense of such action provided that counsel selected by the Institution
shall be lead counsel ("Lead Counsel") with respect to such defense and shall
(except to the extent of a conflict of interest) control such defense. It is the
intent of the Indemnified Parties and the Institution that any separate counsel
representing any Indemnified Party use its reasonable efforts to avoid duplica-
tion of legal work undertaken by Lead Counsel to reduce fees and costs which may
be due hereunder. The Indemnified Parties shall approve the terms of any settle-
ment which affects the Indemnified Parties except that the Institution shall
have the sole right to approve the amount of any financial settlement, except
that such approvals shall not be unreasonably withheld. The Institution agrees
that it shall not (i) settle any claims wherein the settlement of such claims
would contain an admission of fault, guilt or wrongdoing on the part of any
Indemnified Party, without the prior written consent of such Indemnified Party
or (ii) except in the case of a settlement, refrain from the appeal of any
decision which is adverse to any Indemnified Party without the consent of such
Indemnified Party, except that such consent shall not be unreasonably withheld.
If the indemnification provided for herein, or in the Lease Agreement, is
unavailable or insufficient to hold harmless the Indemnified Party under the
second preceding paragraph, then the Institution shall contribute to the amount
paid or payable by such Indemnified Party as a result of the losses, claims,
damages or liabilities referred to in the second preceding paragraph (i) in
such proportion as is appropriate to reflect the relative benefits received by
the Institution on the one hand, and the Issuer on the other, from the offering
of the Bonds or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Institution on the one hand, and the Issuer on the other,
in connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative benefits received by the Institution on the one
hand and the Issuer, on the other shall be deemed to be in the same proportion
as the total gross proceeds from the offering, and the benefit deemed received
by the Institution bear to the total benefit deemed received by the Issuer. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by
the Institution or the Issuer and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such untrue
statement or omission. The amount paid by an Indemnified Party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this paragraph shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party in connection with investigating or defending
any action or claim which is the subject of this paragraph. Notwithstanding the
provisions of this paragraph, the Issuer shall not be required to contribute any
amount in excess of $45,000. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act of 1933, as amended)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any party entitled to contribution will, promptly
after receipt of notice of commencement of any action, suit or proceeding
against such party in respect of which a claim for contribution may be made
against another party under this paragraph, notify such party from whom con-
tribution may be sought, but the omission to so notify such party shall not
relieve the party from whom contribution may be sought from any other obligation
it may have hereunder or otherwise than under this paragraph. Nothing in this
paragraph shall create an implication that the Institution's liability provided
for in this paragraph shall be any greater than that provided for in the second
preceding paragraph, assuming the provisions described in such paragraph were
held to be enforceable.
COUNTY OF XXXXXX INDUSTRIAL DEVELOPMENT AGENCY
(XXXXXX COUNTY, NEW YORK)
and
DYNACEPT CORPORATION
______________________________
LEASE AGREEMENT
______________________________
Dated as of December 1, 2000
$4,500,000
County of Xxxxxx Industrial Development Agency
Variable Rate Demand Revenue Bonds, Series 2000
(Dynacept Corporation Project)
Duplicate
No Security Interest Can Be Created
Herein Except By Possession Of The
Original Counterpart Hereof.
TABLE OF CONTENTS
Page
--------
ARTICLE I DEFINITIONS 3
Section 1.1 Definitions 3
Section 1.2 Indenture to Control 3
ARTICLE II REPRESENTATIONS AND COVENANTS 3
Section 2.1 Representations and Covenants of Issuer 3
Section 2.2 Representations and Covenants of Institution 4
Section 2.3 Covenant with Owners 5
Section 2.4 Covenant with Trustee, Bondholders and LOC Bank 5
Section 2.5 Special Covenants of the Institution 5
Section 2.6 Relationship of LOC Bank and Institution 6
ARTICLE III FACILITY SITE AND ADDITIONAL PAYMENTS 6
Section 3.1 Lease of the Facility 6
Section 3.2 Title Insurance 7
Section 3.3 Subordination of Lease Agreement 7
Section 3.4 Issuer's Fee and Expenses; Pledge of Lease
Agreement and Rent 7
Section 3.5 Nonrecourse to Institution Affiliates 9
Section 3.6 Additional Obligations; Additional Amounts
Payable by Institution 9
ARTICLE IV CONSTRUCTION, IMPROVEMENT AND INSTALLATION OF
FACILITY; ISSUANCE OF THE BONDS 10
Section 4.1 Construction, Improvement and Installation
of Facility 10
Section 4.2 Issuance of the Bonds; Disbursement of Bond Proceeds 11
Section 4.3 Application of Bond Proceeds 11
Section 4.4 Certificates of Completion 12
Section 4.5 Completion by Institution 12
Section 4.6 Reserved 12
Section 4.7 Remedies to be Pursued Against Contractors,
Subcontractors, Materialmen and their Sureties 12
ARTICLE V DEMISING CLAUSES AND RENTAL PROVISIONS 13
Section 5.1 Demise of Facility 13
Section 5.2 Duration of Lease Term; Quiet Enjoyment 13
Section 5.3 Lease Payments and Other Amounts Payable 13
Section 5.4 Obligations of Institution Hereunder Unconditional 15
Section 5.5 Payment of Additional Monies in Prepayment of Bonds 15
Section 5.6 Rights and Obligations of the Institution upon
Prepayment of Bonds 16
Section 5.7 Security Interest 16
Section 5.8 Financing Statements 16
Section 5.9 [Reserved] 16
Section 5.10 [Reserved] 17
Section 5.11 Substitute Letter of Credit 17
ARTICLE VI MAINTENANCE, MODIFICATIONS, TAXES AND INSURANCE 17
Section 6.1 Maintenance and Modifications of Facility
by Institution 17
Section 6.2 Installation of Additional Equipment 17
Section 6.3 Taxes, Assessments and Utility Charges 18
Section 6.4 Insurance Required 18
Section 6.5 Additional Provisions Respecting Insurance 20
Section 6.6 Application of Net Proceeds of Insurance 21
Section 6.7 Right of Issuer or Trustee to Pay Taxes,
Insurance Premiums and Other Charges 21
ARTICLE VII DAMAGE, DESTRUCTION AND CONDEMNATION 22
Section 7.1 Damage or Destruction of the Facility 22
Section 7.2 Condemnation 24
Section 7.3 Condemnation of Institution-Owned Property 25
Section 7.4 Recovery Against Contractor, Etc. 25
Section 7.5 Waiver of Real Property Law Section 227 26
ARTICLE VIII SPECIAL COVENANTS 26
Section 8.1 No Warranty of Condition or Suitability by Issuer 26
Section 8.2 Hold Harmless Provisions 27
Section 8.3 Right to Inspect Facility 27
Section 8.4 Institution to Maintain its Existence; Other Covenants 28
Section 8.5 Qualification in State, Notice and Service of Process 28
Section 8.6 Agreement to File Annual Statements and Provide
Information 28
Section 8.7 Books of Record and Account; Financial Statements 29
Section 8.8 Compliance with Orders, Ordinances, Etc. 29
Section 8.9 Discharge of Liens and Encumbrances 31
Section 8.10 Identification of Equipment 32
Section 8.11 Depreciation Deductions and Investment Tax Credit 32
Section 8.12 Employment Opportunities; Notice of Jobs 32
Section 8.13 Arbitrage and Tax Provisions 32
Section 8.14 Continuing Disclosure 33
ARTICLE IX RELEASE OF CERTAIN INTEREST IN LAND; ASSIGNMENTS
AND SUBLEASING; PLEDGE OF INTERESTS 33
Section 9.1 Restriction on Sale of Facility; Release of
Certain Interest in Land 33
Section 9.2 Removal of Equipment 34
Section 9.3 Assignment and Leasing 34
Section 9.4 Pledge of Issuer's Interests to the Trustee 35
Section 9.5 Merger of Issuer 35
ARTICLE X EVENTS OF DEFAULT AND REMEDIES 36
Section 10.1 Events of Default Defined 36
Section 10.2 Remedies on Default 38
Section 10.3 Remedies Cumulative 39
Section 10.4 Agreement to Pay Attorneys' Fees and Expenses 39
Section 10.5 No Additional Waiver Implied by One Waiver 40
ARTICLE XI EARLY TERMINATION OF LEASE AGREEMENT; OPTION IN
FAVOR OF INSTITUTION 40
Section 11.1 Early Termination of Lease Agreement 40
Section 11.2 Conditions to Early Termination of Lease Agreement 40
Section 11.3 Obligation to Accept Facility 40
Section 11.4 Termination of Lease 41
Section 11.5 Amounts Remaining on Deposit with the Trustee
upon Payment of Bonds 41
ARTICLE XII MISCELLANEOUS 41
Section 12.1 Notices 41
Section 12.2 Binding Effect 43
Section 12.3 Severability 43
Section 12.4 Amendments, Changes and Modifications 43
Section 12.5 Execution of Counterparts 43
Section 12.6 Applicable Law 44
Section 12.7 Further Assurances 44
Section 12.8 Survival of Obligations 44
Section 12.9 Table of Contents and Section Headings
Not Controlling 44
EXHIBITS
Exhibit A Description of Land
Exhibit B [Reserved]
