After recording, return to:
Xxxxx X. Xxxxx XXXXXX & XXXXXXXX
NationsBank Plaza, Suite 4100
000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
LEASE AGREEMENT
BETWEEN
DEVELOPMENT AUTHORITY OF XXXXXXX COUNTY, GEORGIA
AND
XXXXXX RIVERSIDE, LLC
DATED AS OF NOVEMBER 1, 1997
Certain rights of the Development Authority of Xxxxxxx County, Georgia (the
"Issuer") under this Lease Agreement have been assigned and pledged to, and are
subject to a security interest in favor of AmSouth Bank, Birmingham, Alabama, as
trustee under the Indenture of Trust (the "Trustee"), dated as of even date
herewith, as amended or supplemented from time to time, between the Issuer and
the Trustee, which secures $11,000,000 in aggregate principal amount of
Development Authority of Xxxxxxx County, Georgia Taxable Industrial Development
Revenue Bonds (Xxxxxx Riverside, LLC Project), Series 1997.
LEASE AGREEMENT
TABLE OF CONTENTS
(The Table of Contents for this Lease Agreement is for convenience of reference
only and is not intended to define, limit or describe the scope or intent of any
provisions of this Lease Agreement.)
PAGE
ARTICLE I.
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION
Section 1.1. Definitions......................................................................................1
Section 1.2. Rules of Construction............................................................................4
ARTICLE II.
REPRESENTATIONS
Section 2.1. Representations by the Issuer....................................................................5
Section 2.2. No Representation or Warranty by Issuer as to Project............................................6
Section 2.3. Representations by the Lessee....................................................................6
ARTICLE III.
ISSUANCE OF THE BONDS, ACQUISITION, CONSTRUCTION, INSTALLATION
AND FINANCING OF PROJECT
Section 3.1. Lease of the Project; Agreement to Acquire, Construct and Equip the Project......................8
Section 3.2. Agreement to Issue Bonds; Application of Proceeds; Construction Fund.............................8
Section 3.3. Establishment of Completion Date.................................................................8
Section 3.4. Lessee Required to Complete Project..............................................................8
Section 3.5. Limitation of Issuer's Liability.................................................................8
Section 3.6. Disclaimer of Warranties.........................................................................9
Section 3.7. Payments from Construction Fund..................................................................9
Section 3.8. Investment of Funds..............................................................................9
Section 3.9. Depositories of Moneys and Security for Deposit..................................................9
Section 3.10. Warranty of Title................................................................................9
Section 3.11. Quiet Enjoyment..................................................................................10
ARTICLE IV.
PROVISIONS FOR PAYMENT
Section 4.1. Effective Date of this Agreement; Duration of Lease Term; Delivery and Acceptance
of Possession....................................................................................11
Section 4.2. Rents and other Amounts Payable..................................................................11
Section 4.3. Credit Facility; Alternate Credit Facility.......................................................11
Section 4.4. Additional Rent..................................................................................12
Section 4.5. Obligations of the Lessee Absolute and Unconditional.............................................12
Section 4.6. Lessee Consent to Assignment of Agreement and Execution of Indenture.............................13
Section 4.7. Lessee's Performance Under Indenture.............................................................13
Section 4.8. Interest Rate Determination Method...............................................................13
Section 4.9. Prepayments......................................................................................13
ARTICLE V.
PARTICULAR AGREEMENTS
Section 5.1. Maintenance, Operation, Modification and Insuring of Project; No Operation
of Project by Issuer..........................................................................14
Section 5.2. Issuer's and Trustee's Expenses; Release and Indemnification Provisions..........................14
Section 5.3. Maintenance of Existence.........................................................................15
Section 5.4. Annual Audit.....................................................................................15
Section 5.5. Agreement of Issuer Not to Assign or Pledge......................................................15
Section 5.6. Redemption of Bonds..............................................................................15
Section 5.7. Reference to Bonds Ineffective After Bonds Paid..................................................16
Section 5.8. Assignment, Sale or Lease of Project.............................................................16
Section 5.9. Removal of Leased Equipment......................................................................16
Section 5.10. Taxes, Other Governmental Charges and Utility Charges............................................17
Section 5.11. Compliance with Credit Agreement and Security Deed...............................................17
Section 5.12. Inspection of Project............................................................................17
Section 5.13. Project List.....................................................................................17
Section 5.14. No Warranty of Condition or Suitability by Issuer................................................18
Section 5.15. Special Covenants Related to Ad Valorem Taxation.................................................18
ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
Section 6.1. Events of Default Defined........................................................................20
Section 6.2. Remedies.........................................................................................20
Section 6.3. No Remedy Exclusive..............................................................................21
Section 6.4. Agreement to Pay Counsel Fees and Expenses.......................................................21
Section 6.5. Waiver of Events of Default and Rescission of Acceleration.......................................21
ARTICLE VII.
PREPAYMENTS
Section 7.1. Optional Prepayments.............................................................................23
Section 7.2. Optional Purchase of Bonds.......................................................................23
Section 7.3. Relative Priorities..............................................................................23
Section 7.4. Prepayment to Include Fees and Expenses..........................................................23
Section 7.5. Obligations After Payment and Termination of Agreement...........................................23
Section 7.6. Purchase of Bonds................................................................................23
ARTICLE VIII.
OPTIONS IN FAVOR OF LESSEE; OBLIGATION OF LESSEE
Section 8.1. Options to Terminate the Lease Term; Purchase Project............................................25
Section 8.2. Conveyance on Purchase...........................................................................25
Section 8.3. Obligation to Purchase Project...................................................................25
ARTICLE IX.
RIGHTS OF CREDIT ISSUER
Section 9.1. Rights of Credit Issuer..........................................................................26
ii
ARTICLE X.
MISCELLANEOUS
Section 10.1. Term of Agreement................................................................................27
Section 10.2. Notices..........................................................................................27
Section 10.3. Binding Effect...................................................................................28
Section 10.4. Severability.....................................................................................28
Section 10.5. Amounts Remaining in Bond Fund...................................................................28
Section 10.6. Reliance by Issuer...............................................................................28
Section 10.7. Issuer's Obligations Limited.....................................................................28
Section 10.8. Immunity of Directors, Officers and Employees of Issuer..........................................29
Section 10.9. Payments by Credit Issuer........................................................................29
Section 10.10. Amendments, Changes and Modifications............................................................29
Section 10.11. Counterparts.....................................................................................29
Section 10.12. Captions.........................................................................................29
Section 10.13. Amendment of Agreement...........................................................................29
Section 10.14. Law Governing Construction of Agreement..........................................................29
Section 10.15. Relationship of Parties; Estate for Years........................................................29
EXHIBIT A DESCRIPTION OF PROJECT
EXHIBIT A-1 LEASED LAND
EXHIBIT A-2 LEASED EQUIPMENT
EXHIBIT A-3 PERMITTED EXCEPTIONS
EXHIBIT B CONSTRUCTION FUND CERTIFICATE AND REQUISITION
EXHIBIT C CERTIFICATE OF COMPLETION
EXHIBIT D LIMITED WARRANTY DEED
iii
STATE OF GEORGIA )
XXXXXXX COUNTY )
THIS LEASE AGREEMENT (the "Agreement") is entered into as of November 1,
1997, by and between the DEVELOPMENT AUTHORITY OF XXXXXXX COUNTY, GEORGIA
(the "Issuer"), a public body corporate and politic created and existing under
the laws of the State of Georgia, and XXXXXX RIVERSIDE, LLC, a Georgia limited
liability company (the "Lessee"), with its principal place of business in
Atlanta, Georgia;
W I T N E S S E T H:
In consideration of the respective representations and agreements
hereinafter contained, the Issuer and the Lessee agree as follows (provided,
that in the performance of the agreements of the Issuer herein contained, any
obligation it may thereby incur for the payment of money shall not be a general
obligation on its part but shall be payable solely out of the rents, revenues
and receipts derived from this Agreement, the sale of the Bonds (defined
herein), the insurance and condemnation awards as herein described and any other
rents, revenues and receipts arising out of or in connection with its ownership
of the Project as hereinafter defined):
ARTICLE I.
DEFINITIONS AND CERTAIN RULES OF INTERPRETATION
SECTION 1.1. DEFINITIONS. In addition to the words and terms elsewhere
defined herein, the following words and terms as used herein shall have the
following meanings unless the context or use clearly indicates another or
different meaning or intent, and any other words and terms defined in the
Indenture shall have the same meanings when used herein as assigned them in the
Indenture unless the context or use clearly indicates another or different
meaning or intent:
"ACT" means the Development Authorities Law (codified as amended, at
O.C.G.A. Section 36-62-1 ET SEQ.).
"ADDITIONAL RENT" means those payments payable by the Lessee pursuant
to Section 4.4 hereof.
"AGREEMENT" means this Lease Agreement, dated as of November 1, 1997,
between the Issuer and the Lessee, and any amendments and supplements thereto.
"ALTERNATE CREDIT FACILITY" means the Alternate Credit Facility issued
in accordance with Section 4.3.
"BOND COUNSEL" means an attorney, or firm of attorneys, nationally
recognized and experienced in legal work relating to the issuance of municipal
bonds acceptable to the Issuer.
"BOND FUND" means the fund created by Section 4.01 of the Indenture.
"BONDHOLDER" or "HOLDER OF THE BONDS" means the Person who shall be
the registered owner of any Bond.
"BONDS" means the Taxable Industrial Development Revenue Bonds of the
Issuer authorized by the Indenture. Any percentage of Bonds specified herein for
any purpose is to be figured on the aggregate principal amount of Bonds then
outstanding.
"BUILDING" means that certain building or buildings, all fixtures
therein and all improvements, renovations and expansions thereto forming a part
of the Project and not constituting part of the Leased Equipment which has been
acquired by the Issuer hereof and is situated on the Leased Land, as it may at
any time exist.
"CHAIRMAN" means the Chairman or the Vice Chairman of the Issuer.
"COMPLETION DATE" means the date determined pursuant to Section 3.3.
"COST OF PROJECT" with respect to the Project shall be deemed to
include the cost of all items permitted to be financed under the provisions of
the Act.
"COUNTY" means Xxxxxxx County, Georgia.
"COUNSEL" means an attorney, or firm thereof, admitted to practice law
before the highest court of any state in the United States of America or the
District of Columbia.
"CREDIT AGREEMENT" means that certain Reimbursement Agreement, of even
date herewith, between the Lessee and the Credit Issuer, under the terms of
which the Credit Issuer agrees to issue and deliver the Credit Facility to the
Trustee, and any amendment or supplement thereto, and if an Alternate Credit
Facility is issued, the agreement between the Credit Issuer and the Lessee
pursuant to which such Alternate Credit Facility is issued.
"CREDIT ISSUER" means NationsBank, N.A. in its capacity as the issuer
of the Credit Facility, and its successors in such capacity and their assigns,
and if an Alternate Credit Facility is issued, the issuer thereof.
"CREDIT ISSUER DOCUMENTS" means the Credit Agreement and the Security
Deed.
"CREDIT ISSUER REPRESENTATIVE" means each person at the time designated
to act on behalf of the Credit Issuer by written Certificate furnished to the
Lessee and the Trustee containing the specimen signature of each such person and
signed on behalf of the Credit Issuer by a Vice President or its President. Such
Certificate may designate an alternate or alternates.
"DEFAULT" means an event or condition the occurrence of which would,
with the lapse of time or the giving of notice or both, become an event of
default hereunder.
"EVENT OF DEFAULT" means one of the events so denominated and
described in Section 6.1.
"FINANCING STATEMENTS" means any and all financing statements
(including continuation statements) filed for record from time to time to
perfect the security interests created or assigned.
"GOVERNMENT OBLIGATIONS" means (a) direct obligations of the United
States of America for the payment of which the full faith and credit of the
United States of America is pledged, or (b) obligations issued by a person
controlled or supervised by and acting as an instrumentality of the United
States of America, the full and timely payment of the principal of, premium, if
any, and the interest on which is fully guaranteed as a full faith and credit
obligation of the United States of America (including any securities described
in (a) or (b) issued or held in book-entry form on the books of the Department
of the Treasury of the United States of America), which obligations, in either
case, are not subject to redemption prior to maturity at less than par by anyone
other than the holder, excluding unit trusts.
"INDENTURE" means the Indenture of Trust, of even date herewith,
between the Issuer and the Trustee, pursuant to which the Bonds are to be issued
and secured, including any indentures supplemental thereto.
"INDEPENDENT COUNSEL" means an attorney, or firm thereof, admitted to
practice law before the highest court of any state in the United States of
America or the District of Columbia, including any Bond Counsel.
"ISSUER" means the Development Authority of Xxxxxxx County, Georgia, a
public body corporate and politic duly organized and existing under the
Constitution and the laws of the State of Georgia, including the Act or any
successor to its rights and obligations under this Agreement and the Indenture.
2
"ISSUER DOCUMENTS" means this Agreement, the Indenture, the Security
Deed and the Remarketing Agreement.
"ISSUER'S FEE" means a one time up front fee of $12,500 payable on the
day of issuance of the Bonds.
"LEASE TERM" means the duration of the leasehold interest created by
this Agreement as specified in Section 4.1.
"LEASED EQUIPMENT" means those items of machinery, equipment and
related property either previously acquired by the Issuer or required herein to
be acquired and installed in the Building or on the Leased Land with proceeds
from the sale of the Bonds or the proceeds of any payment by the Lessee pursuant
to Section 3.4 and any item of machinery, equipment and related property
acquired and installed by Lessee in the Building or on the Leased Land in
substitution therefor and renewals and replacements thereof pursuant to the
provisions of Sections 5.1(b), less such machinery, equipment and related
property taken by the exercise of the power of eminent domain, and is further
defined as all property owned by the Issuer and leased to the Lessee which is
not included in the definition of Leased Land or Building, and the Lessee's (but
not the Sublessee's) own machinery, equipment and related property installed
under the provisions of Section 5.1(b) but excluding Sublessee's machinery,
equipment and related property. No "Leased Equipment," other than fixtures,
building equipment and systems (such as electrical, plumbing, heating,
ventilation and air conditioning systems) which are necessary for the operation
of the Building, has been acquired or installed for or at the Project, Building
or Leased Land as of the date hereof but any such Leased Equipment to be
acquired and installed as a part of the Project so as to qualify as "Leased
Equipment" in accordance with the definition set forth herein at the time of
such acquisition and installation shall be detailed in Exhibit "A-2" attached
hereto and by this reference made a part hereof.
"LEASED LAND" means the real property described in Exhibit "A-1"
attached hereto and by this reference made a part of this Agreement.
"LESSEE" means Xxxxxx Riverside, LLC, a Georgia limited liability
company, and its successors and assigns.
"LESSEE DOCUMENTS" means this Agreement, the Bond Purchase Agreement,
the Remarketing Agreement, and the Credit Issuer Documents.
"LESSEE REPRESENTATIVE" means each person at the time designated to act
on behalf of the Lessee by written certificate furnished to the Issuer and the
Trustee containing the specimen signature of such person and signed on behalf of
the Lessee by an authorized officer of the Lessee. Such certificate may
designate an alternate or alternates.
"LIMITED WARRANTY DEED" means the Limited Warranty Deed to be dated the
date of actual execution and delivery thereof, held in trust by the Trustee in
accordance with the provisions hereof. The Limited Warranty Deed, in
substantially the form it is to be executed and delivered, is attached as
Exhibit "D" hereto.
"NET PROCEEDS OF SALE OF THE BONDS" means those proceeds of the sale of
the Bonds remaining after payment of all expenses in connection with the
issuance of the Bonds and the deposit of all accrued interest (if any) received
from the sale of the Bonds in the Bond Fund, together with investment earnings
on such net proceeds earned prior to the Completion Date.
"OUTSTANDING," when used with reference to the Bonds, shall have the
meaning set forth in Article I of the Indenture.
"PAYMENT IN FULL OF THE BONDS" specifically encompasses the situations
referred to in Section 5.01 of the Indenture.
"PERMITTED EXCEPTIONS" means those items listed on Exhibit A-3 hereto.
3
"PERSON" means any natural person, firm, partnership, association,
corporation or public body.
"PLEDGED REVENUES" means and shall include:
(a) the Lease Payments required to be made by or on behalf of the
Lessee under this Agreement, (but not the Sublease) except
payments to (i) the Trustee for services rendered as Trustee
under the Indenture and payments to be made to any Co-Trustee for
services rendered under the Indenture, and (ii) expenses,
indemnification and other payments required to be made pursuant
to Sections 5.2 and 6.4 hereof, and
(b) any proceeds which arise with respect to any disposition of any
of the property, money, securities and interests granted by the
Issuer to the Trustee under the Granting Clause of the Indenture.
"PROJECT" means the acquisition, construction and equipping of a
250,000 sq. ft. facility for the manufacture of store fixtures in Xxxxxxx
County, Georgia, as more fully described on Exhibit A hereto, including the
Leased Land, Building and Leased Equipment.
"SECRETARY" means the Secretary of the Issuer.
"SECURITY DEED" means the Deed to Secure Debt and Security Agreement,
dated as of November 1, 1997, among the Issuer, the Lessee and the Credit
Issuer.
"STATE" means the State of Georgia.
"SUBLEASE" means the Sublease, dated as of November 1, 1997 between the
Lessee and the Sublessee.
"SUBLESSEE" means Xxxxxx Fixture Corporation, a Georgia corporation,
or any successor thereto.
"TRUSTEE" means AmSouth Bank, or any successor trustee appointed under
the Indenture.
"TRUSTEE FEES" means the periodic fees and expenses charged by the
Trustee in order to serve as Trustee under the Indenture.
"U.C.C." means the Uniform Commercial Code of the State as now in
effect or hereafter amended.
SECTION 1.3. RULES OF CONSTRUCTION. Unless the context clearly
indicates to the contrary, the following rules shall apply to the construction
of this Agreement:
(a) Capitalized terms used but not defined in this Agreement shall have
the meaning ascribed to them in the Indenture.
(b) Words importing the singular number shall include the plural number
and vice versa.
(c) The table of contents, captions and headings herein are solely for
convenience of reference only and shall not constitute a part of this Agreement
nor shall they affect its meaning, construction or effect.
(d) Words of the masculine gender shall be deemed and construed to
include correlative words of the feminine and neuter genders, and words of the
neuter gender shall be deemed and construed to include correlative words of the
masculine and feminine genders.
(e) All references in this Agreement to particular Articles or Sections
are references to Articles and Sections of this Agreement, unless otherwise
indicated.
4
ARTICLE II.
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS BY THE ISSUER. The Issuer makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) ORGANIZATION. The Issuer is a public body corporate and politic,
created and validly existing pursuant to the provisions of the Act. The Issuer
has been activated as required by the terms of the Development Authorities law,
its directors have been appointed as provided therein and are currently acting
in that capacity, and a copy of said activating resolution has been filed with
the Secretary of State of the State of Georgia as required by law. The Issuer
has been created to develop and promote for the public good and general welfare
trade, commerce, industry and employment opportunities and to promote the
general welfare of the State of Georgia. The aforementioned authorities empower
the Issuer to issue its revenue bonds, in accordance with the applicable
provisions of the Revenue Bond Law of the State of Georgia (Ga. Laws 1937, p.
761, ET SEQ.), as heretofore or hereafter amended, for the purpose of acquiring,
constructing and installing any project (as defined in the Act) for lease or
sale to prospective tenants or purchasers in furtherance of the public purposes
for which it was created.
(b) AUTHORITY. The Issuer has all requisite power and authority under
the Act to (i) issue the Bonds, (ii) to assist the Lessee in financing the cost
of acquiring, constructing and equipping the Project, and (iii) enter into, and
perform its obligations under the Issuer Documents.
(c) PENDING LITIGATION. There are no actions, suits, proceedings,
inquiries or investigations pending, or to the knowledge of the Issuer
threatened, against or affecting the Issuer in any court or before any
governmental authority or arbitration board or tribunal, which involve the
possibility of materially and adversely affecting the transactions contemplated
by the Issuer Documents or which, in any way, would materially and adversely
affect the validity or enforceability of the Bonds, the Issuer Documents or any
agreement or instrument to which the Issuer is a party and which is used or
contemplated for use in the consummation of the transactions contemplated hereby
or thereby.
(d) ISSUE, SALE AND OTHER TRANSACTIONS ARE LEGAL AND AUTHORIZED. The
issuance and sale of the Bonds and the execution and delivery by the Issuer of
the Issuer Documents, and the compliance by the Issuer with all of the
provisions of each thereof and of the Bonds (i) are within the purposes, powers
and authority of the Issuer, (ii) have been done in full compliance with the
provisions of the Act, are legal and will not conflict with or constitute on the
part of the Issuer a violation of or a breach of or default under, or result in
the creation of any lien, charge or encumbrance upon any property of the Issuer
(other than as contemplated in the Indenture) under the provisions of, any
activating resolution, by-law, indenture, mortgage, deed of trust, note
agreement or other agreement or instrument to which the Issuer is a party or by
which the Issuer is bound, or to the best of Issuer's knowledge any license,
judgment, decree, law, statute, order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Issuer or any of its
activities or properties, and (iii) have been duly authorized by all necessary
corporate action on the part of the Issuer.
(e) GOVERNMENTAL CONSENTS. Neither the nature of the Issuer nor any of
its activities or properties, nor any relationship between the Issuer and any
other person, nor any circumstance in connection with the issue, sale or
delivery of any of the Bonds is such as to require the consent, approval or
authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Issuer in connection with the
execution, delivery and performance of the Issuer Documents or the issue, sale
or delivery of the Bonds, other than those already obtained; provided, however,
no representation is made as to compliance with any federal or state securities
or "blue sky" law.
(f) NO DEFAULTS. To the best of Issuer's knowledge, no event has
occurred and no condition exists with respect to the Issuer which would
constitute an "event of default" as defined in any of the Issuer Documents or
which, with the lapse of time or with the giving of notice or both, would become
such an "event of default." The Issuer is not in default under the Act or under
any charter instrument, by-law or other agreement or instrument to which it is a
party or by which it is bound which default would adversely affect the
enforceability or taxability of the Bonds.
5
(g) NO PRIOR PLEDGE. Neither this Agreement nor any of the Pledged
Revenues have been pledged or hypothecated in any manner or for any purpose
other than as provided in the Indenture as security for the payment of the
Bonds.
(h) NATURE AND LOCATION OF PROJECT. The financing of the costs of the
Project, together with related expenses, is authorized under the Act, is in
furtherance of the public purpose for which the Issuer was created and will
increase employment in the area served by the Issuer.
(i) LIMITED OBLIGATIONS. Notwithstanding anything herein contained to
the contrary, any obligation the Issuer may hereby incur for the payment of
money shall not constitute an indebtedness of the County or of the State or of
any political subdivision thereof within the meaning of any state constitutional
provision or statutory limitation and shall not give rise to a pecuniary
liability of the State or the County or any political subdivision thereof, or
constitute a charge against the general credit or taxing power of said State or
County or any political subdivision thereof, but shall be limited obligations of
the Issuer payable solely from (i) the Pledged Revenues, (ii) revenues derived
from the sale of the Bonds, and (iii) amounts on deposit from time to time in
the Bond Fund, subject to the provisions of this Agreement and the Indenture
permitting the application thereof for the purposes and on the terms and
conditions set forth herein and therein. No officer or director of the Issuer
shall be personally liable on this Agreement or any of the Issuer Documents. The
Issuer has no taxing power.
SECTION 2.2. NO REPRESENTATION OR WARRANTY BY ISSUER AS TO PROJECT. The
Issuer makes no representation or warranty concerning the suitability of the
Project for the purpose for which it is being undertaken by the Lessee. The
Issuer has not made any independent investigation as to the feasibility of the
Project or creditworthiness of the Lessee, and any bond purchaser, assignee of
the Agreement or any other party with any interest in this transaction shall
make its own independent investigation as to the creditworthiness of the Lessee
and feasibility of the Project, independent of any representation or warranties
of the Issuer.
SECTION 2.3. REPRESENTATIONS BY THE LESSEE. The Lessee makes the
following representations as the basis for the undertakings on its part herein
contained:
(a) ORGANIZATION AND POWER. The Lessee (i) is a limited liability
company, duly organized, validly existing and in good standing under the laws of
the State of Georgia, and (ii) has all requisite power and authority and all
necessary licenses and permits to own its properties and to carry on its
business as now being conducted and as presently proposed to be conducted, and
(iii) has the power to enter into this Agreement and the transactions
contemplated hereby and to perform its obligations hereunder.
(b) PENDING LITIGATION. There are no proceedings pending, or to the
knowledge of the Lessee threatened, against or affecting the Lessee in any court
or before any governmental authority, arbitration board or tribunal which if
adversely determined, would materially and adversely affect the transactions
contemplated by the Lessee Documents or the Indenture or which, in any way,
would materially and adversely affect the properties, business, prospects,
profits or condition (financial or otherwise) of the Lessee, or the ability of
the Lessee to perform its obligations under the Lessee Documents. The Lessee is
not in default with respect to an order of any court, governmental authority,
arbitration board or tribunal.
(c) AGREEMENTS ARE LEGAL AND AUTHORIZED. The execution and delivery by
the Lessee of each of the Lessee Documents and the compliance by the Lessee with
all of the provisions hereof and thereof (i) are within the power of the Lessee
as a limited liability company, (ii) will not conflict with or result in any
breach of any of the provisions of, or constitute a default under, or result in
the creation of any lien, charge or encumbrance upon any property of the Lessee
under the provisions of, any agreement, articles of organization, by-laws,
operating agreement or other instrument to which the Lessee is a party or by
which it may be bound, or any license, judgment, decree, law, statute, order,
rule or regulation of any court or governmental agency or body having
jurisdiction over the Lessee or any of its activities or properties, and (iii)
have been duly authorized by all necessary corporate action on the part of the
Lessee.
6
(d) GOVERNMENTAL CONSENT. Neither the Lessee nor any of its business or
properties, nor any relationship between the Lessee and any other person, nor
any circumstances in connection with the execution, delivery and performance by
the Lessee of the Lessee Documents or the offer, issue, sale or delivery by the
Issuer of the Bonds, is such as to require the consent, approval or
authorization of, or the filing, registration or qualification with, any
governmental authority on the part of the Lessee other than those already
obtained; provided, however, that no representation is made as to any consents,
approvals or authorizations required in connection with the construction or
occupancy of the Project.
(e) NO DEFAULTS. No event has occurred and no condition exists with
respect to the Lessee that would constitute an "event of default" under any of
the Lessee Documents or which, with the lapse of time or with the giving of
notice or both, would become such an "event of default." The Lessee is not in
violation in any material respect of any articles of organization, operating
agreement or other instrument to which it is a party or by which it may be
bound.
(f) COMPLIANCE WITH LAW. The Lessee is not in violation in any material
way of any laws, ordinances, governmental rules or regulations to which it is
subject and has not failed to obtain any licenses, permits, franchises or other
governmental authorizations necessary to the ownership of its properties or to
the conduct of its business, which business consists solely of leasing and
subleasing the Project, which violation or failure to obtain might materially
and adversely affect the properties, business, prospects, profits or conditions
(financial or otherwise) of the Lessee.
(g) RESTRICTIONS ON THE LESSEE. The Lessee is not a party to any
contract or agreement that materially and adversely affects the business of the
Lessee. Except for the Credit Agreement, the Lessee is not a party to any
contract or agreement that restricts the right or ability of the Lessee to incur
or guarantee indebtedness for borrowed money.
(h) INDUCEMENT. The issuance of the Bonds by the Issuer, the
acquisition, construction and equipping of the Project by the Issuer and the
leasing of the Project by the Issuer to the Lessee have induced the Lessee to
locate the Project in the County. The issuance of the Bonds by the Issuer, the
acquisition, construction and equipping of the Project by the Issuer and the
leasing of the Project by the Issuer to the Lessee shall assist the Lessee in
providing employment and industry in the County.
(i) ESTIMATED TIME OF COMPLETION OF THE PROJECT. The Lessee estimates
that the Project will be completed and ready for occupancy by November 1, 1998.
(j) LOCATION OF PROJECT. The Project is located entirely within the
geographical boundaries of the County.
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ARTICLE III.
ISSUANCE OF THE BONDS; ACQUISITION, CONSTRUCTION,
INSTALLATION AND FINANCING OF PROJECT
SECTION 3.1. LEASE OF THE PROJECT; AGREEMENT TO ACQUIRE, CONSTRUCT AND
EQUIP THE PROJECT.
(a) The Issuer hereby leases to the Lessee, and the Lessee hereby
leases from the Issuer, the Project at the rental set forth in Section 4.2
hereof and in accordance with the provisions of this Agreement.
(b) The Issuer has appointed the Lessee to proceed with the
acquisition, construction and equipping of the Project, as described in Exhibit
A. The Lessee has obtained or has caused to be obtained all licenses, permits
and consents required for the acquisition, construction and equipping of the
Project, obtainable to date and has no reason to believe it cannot obtain all
other permits when needed. The Issuer shall have no responsibility for any such
permits.
(c) The Issuer agrees that the Building will consist of a manufacturing
facility which is described on Exhibit A-1 and shall be the property of the
Issuer and subject to the terms of this Agreement and the other Permitted
Exceptions.
(d) The Lessee will not take any action or fail to take any action
which would adversely affect the qualification of the Project under the Act.
SECTION 3.2. AGREEMENT TO ISSUE BONDS; APPLICATION OF PROCEEDS;
CONSTRUCTION FUND. In order to provide funds for payment of the Cost of the
Project, the Issuer shall simultaneously with the execution and delivery hereof,
authorize, validate, sell and cause to be delivered to the initial purchaser or
purchasers thereof, the Bonds, bearing interest and maturing as set forth in
Article II of the Indenture, at a price to be approved by the Lessee and Credit
Issuer. The moneys in the Construction Fund shall be used to finance the
acquiring, constructing and equipping of the Project and for paying certain of
the costs of issuing the Bonds. The obligation of the Issuer to pay for the Cost
of the Project shall be limited to the proceeds in the Construction Fund derived
from the sale of the Bonds in accordance with the Indenture.
SECTION 3.3. ESTABLISHMENT OF COMPLETION DATE. The Completion Date
shall be evidenced to the Issuer and the Trustee by a certificate in the form
attached hereto as Exhibit C, signed by a Lessee Representative stating (a) the
Cost of Project, (b) that the acquisition, construction and equipping of the
Project have been completed substantially in accordance with Section 3.1, and
(c) that, except for amounts retained by the Trustee for the Cost of Project not
then due and payable, if any, the full Cost of Project has been paid.
Notwithstanding the foregoing, such certificate shall state that it is given
without prejudice to any rights against third parties which exist at the date of
such certificate or which may subsequently come into being.
SECTION 3.4. LESSEE REQUIRED TO COMPLETE PROJECT. If the proceeds
derived from the sale of the Bonds issued for such purpose are not sufficient to
pay in full the Cost of Project, the Lessee shall pay so much of the cost
thereof as may be in excess of the proceeds of the Bonds and any investment
income thereon available therefor. The Lessee agrees that if, after exhaustion
of the proceeds derived from the sale of the Bonds and investment income
thereon, the Lessee should pay any portion of the Cost of Project pursuant to
the provisions of this Section, it shall not be entitled to any reimbursement
therefor from the Issuer or the Trustee nor shall it be entitled to any
abatement, diminution or postponement of its rental payments hereunder.
SECTION 3.5. LIMITATION OF ISSUER'S LIABILITY. Anything contained in
this Agreement to the contrary notwithstanding, any obligation the Issuer may
incur in connection with the undertaking of the Project for the payment of money
shall not be deemed to constitute a debt or general obligation of the Issuer,
the State or any political subdivision thereof, but shall be payable solely from
the rents, revenues and receipts derived by it from this Agreement, and from
payments made pursuant to the Credit Facility. No provision in this Agreement or
any obligation herein imposed upon the Issuer, or the breach thereof, shall
8
constitute or give rise to or impose upon the Issuer, the County, the State or
any political subdivision thereof a pecuniary liability or a charge upon its
general credit or taxing powers. No officer or member of the Issuer shall be
personally liable on this Agreement or any of the Issuer Documents.
SECTION 3.6. DISCLAIMER OF WARRANTIES. The Lessee recognizes that since
the Project has been or will be acquired, constructed and equipped by or on
behalf of the Lessee or the Sublessee on behalf of the Issuer and by contractors
and suppliers selected by the Lessee or the Sublessee, NEITHER THE ISSUER NOR
THE TRUSTEE MAKES ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH
RESPECT TO THE MERCHANTABILITY, CONDITION OR WORKMANSHIP OF ANY PART OF THE
PROJECT OR ITS SUITABILITY FOR THE PURPOSES OF THE LESSEE OR THE EXTENT TO WHICH
PROCEEDS DERIVED FROM THE SALE OF THE BONDS WILL PAY THE COST TO BE INCURRED IN
CONNECTION THEREWITH.
SECTION 3.7. PAYMENTS FROM CONSTRUCTION FUND. The Trustee shall use
moneys in the Construction Fund solely to pay the Cost of Project. Before any
payment shall be made from the Construction Fund, there shall be filed with the
Trustee:
(a) A requisition, in the form attached hereto as Exhibit B, signed by
a Lessee Representative and approved in writing by an officer of the Credit
Issuer, stating to whom the payment is to be made, the amount of payment, the
purpose in reasonable detail for which the obligation to be paid was incurred,
and that the obligation stated on the requisition has been incurred by the
Lessee in or about the acquisition, construction or equipping of the Project,
each item is a proper charge against the Construction Fund and the obligation
has not been the basis for a prior requisition which has been paid, together
with a certificate attached to such requisition and signed by a Lessee
Representative stating that:
(1) there has been received no written notice of any lien,
right to lien or attachment upon, or claim affecting the
right of the payee to receive payment of, any of the
moneys payable under such requisition to any of the
persons, firms, or corporation named therein;
(2) such requisition contains no items representing payment on
account of any percentage entitled to be retained at the
date of the certificate; and
(3) no Event of Default hereunder or under the Indenture or
event which after notice or lapse of time or both would
constitute an Event of Default hereunder or under the
Indenture has occurred and not been waived or cured.
(b) An invoice or other appropriate evidence of the obligation
described in the requisition required by subsection (a) above.
Upon receipt of each such requisition and accompanying certificate, the
Trustee shall make payment from the Construction Fund in accordance with such
requisition.
SECTION 3.8. INVESTMENT OF FUNDS. Any moneys held in the Bond Fund or
the Construction Fund or any other fund created under the Indenture shall be
invested or reinvested by the Trustee as set forth in Section 4.07 of the
Indenture, to the extent permitted by law, or in the Permitted Investments (as
defined in the Indenture), at the telephonic or oral direction (confirmed in
writing) of the Lessee Representative. All such investments shall at all times
be a part of the fund (the Construction Fund, the Bond Fund or such other fund
created under the Indenture, as the case may be) from where the moneys used to
acquire such investments shall have come, and all income and profits on such
investments shall be credited to, and losses thereon shall be charged against,
such fund.
SECTION 3.9. DEPOSITORIES OF MONEYS AND SECURITY FOR DEPOSIT. All
moneys received by the Issuer in connection with the issuance of the Bonds
(other than for its fees and expenses) shall be deposited in the Construction
Fund created under the Indenture. All such moneys deposited shall be applied in
accordance with the terms and for the purposes herein set forth and shall not be
subject to lien or attachment by any creditor of the Issuer.
9
SECTION 3.10. WARRANTY OF TITLE. The Issuer for itself, its successors
and assigns, based solely on the Title Insurance Policy to be delivered by
Commonwealth Land Title Insurance Company, represents that it has good and
marketable fee simple title in and to the Leased Land free from all encumbrances
except Permitted Exceptions. Upon the execution and delivery of this Lease, the
Issuer agrees that it will furnish to the Lessee an opinion of the Issuer's
Counsel given in reliance on the Title Insurance Policy, stating that the Issuer
holds such title in and to the Leased Land.
SECTION 3.11. QUIET ENJOYMENT. The Issuer warrants and covenants that
it will defend the Lessee at the Lessee's expense (except as to claims by the
Issuer) in the quiet enjoyment and peaceable possession of the Leased Land, and
all appurtenances thereto belonging, including the Building, free from all
claims of all persons whomsoever, throughout the Lease Term, so long as the
Lessee shall perform the covenants, conditions and agreements to be performed by
it hereunder, or so long as the period for remedying any failure of performance
shall not have expired.
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ARTICLE IV.
PROVISIONS FOR PAYMENT
SECTION 4.1. EFFECTIVE DATE OF THIS AGREEMENT; DURATION OF LEASE TERM;
DELIVERY AND ACCEPTANCE OF POSSESSION.
(a) This Agreement shall become effective upon its delivery and the
leasehold interest created by this Agreement shall then begin, and, subject to
the other provisions of this Agreement, shall expire at midnight on October 1,
2018.
(b) The Issuer agrees to deliver to the Lessee sole and exclusive
possession of the Project (subject to the right of the Trustee to enter thereon
for inspection purposes and to other provisions hereof) on the date of initial
issuance of the Bonds and the Lessee hereby accepts possession of the Project.
SECTION 4.2. RENTS AND OTHER AMOUNTS PAYABLE.
(a) The Lessee agrees (i) except as provided in subsection (b) of this
Section, to make prompt payment to the Trustee, as assignee and pledgee of the
Issuer, and as rent for the Project, for deposit in the Bond Fund, the amounts
which are necessary to pay the principal and Purchase Price of, premium, if any,
or interest on the Bonds (whether at maturity, upon redemption or acceleration,
or otherwise) when and as the same shall be due and payable. All such rental
payments shall be made to the Trustee at its principal office in lawful money of
the United States of America, except as may be otherwise agreed to by the
Trustee.
(b) In order to provide for the rental payments required in subsection
(a) of this Section, the Lessee shall cause the Credit Issuer to deliver the
Credit Facility to the Trustee simultaneously with the original issue and
delivery of the Bonds, and hereby authorizes and directs the Trustee to draw
moneys under the Credit Facility in accordance with the provisions of the
Indenture to the extent necessary to make the payments of principal and purchase
price of, and interest on the Bonds as and when the same become due. The Lessee
shall receive as a credit against its rental obligations described in subsection
(a) of this Section all payments made by the Credit Issuer under the Credit
Facility and all other amounts described in Section 3.08(a) of the Indenture.
(c) If the Lessee should fail to make any of the rental payments
required in subsection (a) and (b) above, the rental payment which the Lessee
has failed to make shall continue as an obligation of the Lessee until the same
shall have been fully paid, and the Lessee agrees to pay the same with interest
thereon at the rate per annum borne by the Bonds until paid in full.
(d) In addition, the Lessee agrees to pay any costs of issuing the
Bonds that are not paid with the proceeds of the sale of the Bonds by depositing
the same with the Trustee. Said monies shall be disbursed by the Trustee in
accordance with written instructions from the Lessee.
(e) Anything herein, in the Indenture or in the Bonds to the contrary
notwithstanding, the obligations of the Lessee hereunder shall be subject to the
limitation that payments constituting interest under this Section shall not be
required to the extent that the receipt of such payment by the holder of any
Bond would be contrary to the provisions of law applicable to such holder which
limit the maximum rate of interest which may be charged or collected by such
holder.
SECTION 4.3. CREDIT FACILITY; ALTERNATE CREDIT FACILITY.
(a) The Credit Facility delivered to the Trustee simultaneously with
the original issuance and delivery of the Bonds constitutes an irrevocable
obligation of the Credit Issuer to pay to the Trustee, upon request and in
accordance with the terms thereof, up to an amount equal to the sum of (i) the
principal amount of the Bonds then outstanding plus (ii) an amount equal to
interest for 36 days on the principal amount of each Bond then outstanding at
the rate of fifteen percent (15%) per annum.
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(b) The Lessee shall have the option from time to time to provide the
Trustee with an Alternate Credit Facility in accordance with the provisions of
Section 3.08(e) of the Indenture. If at any time there shall have been delivered
to the Trustee an Alternate Credit Facility, together with the other documents
and opinions required by Section 3.08(e) of the Indenture, then the Trustee
shall accept such Alternate Credit Facility and promptly surrender the
previously held Credit Facility to the issuer thereof for cancellation, in
accordance with the terms of such Credit Facility. If at any time there shall
cease to be any Bonds outstanding under the Indenture, the Trustee shall
promptly surrender the Credit Facility to the issuer thereof, in accordance with
the terms of such Credit Facility, for cancellation. The Trustee shall comply
with the procedures set forth in the Credit Facility relating to the termination
thereof.
SECTION 4.4. ADDITIONAL RENT. The Lessee shall also pay as Additional
Rent hereunder, to the persons entitled thereto, until the principal of and
interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the provisions of the Indenture:
(i) the fees and charges of the Trustee incurred in connection with the
rendering of its ordinary and extraordinary services as Trustee under the
Indenture, as and when the same become due, including the reasonable fees and
expenses of its Counsel, (ii) the fees and expenses of the Remarketing Agent for
serving as Remarketing Agent for the Bonds, including the reasonable fees and
expenses of its Counsel, and any other amounts due and payable to the
Remarketing Agent under the Remarketing Agreement, (iii) the fees and expenses
of the Rating Agency for issuing and maintaining its securities rating on the
Bonds, if any, (iv) [the Issuer's Fee,] the out-of-pocket expenses,
administrative expenses and Counsel fees of the Issuer and Bond Counsel, (v) all
utility rents and charges incurred in connection with the Project or any part
thereof, (vi) charges for the operation and maintenance of the Project,
including, but not limited to, sanitation, repair, electricity, gas, security,
and other items deemed necessary for the efficient operation of the Project, and
(vii) any and all taxes and assessments or other governmental charges which may
be lawfully taxed, charged, levied or assessed against the Project or any part
thereof or the revenues derived therefrom including any new taxes and assessment
not of the kind enumerated above to the extent that the same are lawfully made,
levied, charged or assessed in lieu of or in addition to taxes or assessments
now customarily levied against real or personal property, and further including
all water and sewer charges, assessments and other general governmental charges
and impositions whatsoever, foreseen or unforeseen, which if not paid when due
would impair the security of the Bonds or encumber the Issuer's title to the
Project. The Lessee may, without constituting grounds for an Event of Default
hereunder, withhold payment of any such fees and charges of the Trustee, to
contest in good faith the necessity for any extraordinary services of the
Trustee and the reasonableness of any extraordinary expenses of the Trustee. If
the Lessee should fail to make any payment of Additional Rent required in this
Section, the Additional Rent which the Lessee has failed to make shall continue
as an obligation of the Lessee until the same shall have been fully paid, with
interest thereon at the rate per annum borne by the Bonds until paid in full.
SECTION 4.5. OBLIGATIONS OF THE LESSEE ABSOLUTE AND UNCONDITIONAL.
Subject to the provisions of Section 6.5 hereof, the obligations of the Lessee
to make or to cause (pursuant to the Credit Facility) to be made the rental
payments required in Sections 4.2 and 4.4 and to perform and observe the other
agreements on its part contained herein shall be absolute and unconditional and
shall not be subject to diminution by set-off, counterclaim, abatement or
otherwise by reason of any action or inaction of the Trustee, the Issuer or any
third party. Until such time as the principal of, and the interest on, the Bonds
shall have been paid in full, the Lessee (a) will not suspend or discontinue any
rental payments provided for in Sections 4.2 and 4.4 except to the extent the
same have been prepaid, (b) will perform and observe all its other agreements
contained herein, and (c) except as provided in Article VII, will not terminate
this Agreement for any cause, including, without limiting the generality of the
foregoing, any acts or circumstances that may constitute failure of
consideration, sale, loss, eviction or constructive eviction, destruction of or
damage to the Project, condemnation, commercial frustration of purpose, any
change in the tax or other laws of the United States of America or of the State
or any political subdivision of either, or any failure of the Issuer to perform
and observe any agreement, whether express or implied, or any duty, liability or
obligation arising out of or in connection herewith or with the Indenture.
Notwithstanding the foregoing, the obligation of the Lessee to make payments
hereunder shall be satisfied and discharged to the extent moneys are received by
the Trustee pursuant to the Credit Facility. Nothing contained in this Section
shall be construed to release the Issuer from the performance of any of the
agreements on its part herein contained; and if the Issuer should fail to
perform any such agreement, the Lessee may institute such action against the
12
Issuer as the Lessee may deem necessary to compel performance so long as such
action shall not impair the agreements on the part of the Lessee hereunder.
Nothing contained herein shall be construed as a waiver of any rights
which the Lessee may have against the Issuer under this Agreement, or against
any person under this Agreement, the Indenture or otherwise, or under any
provision of law; provided, however, that the Lessee shall pursue any rights or
remedies against the Issuer, the Trustee, any Bondholder or any third party in
connection herewith, or in connection with the Indenture, the Lessee Documents,
the Credit Issuer Documents or otherwise relating to the Bonds and security
therefor only in a separate action, and not by way of any set-off, counterclaim,
cross-claim or third party action in any suit brought to enforce the rights of
the bondholders, the Trustee or the Issuer under this Agreement, the Indenture,
the Lessee Documents, the Credit Issuer Documents or otherwise in connection
herewith; and provided further, that in order to preserve the right of the
Lessee to raise such issues in any separate suit, any claim of the Lessee which,
but for this Section 4.5, would be a compulsory counterclaim, shall be
identified as such in the first responsive pleading filed by the Lessee to any
action brought by the Issuer, Trustee, any Bondholder or any person.
SECTION 4.6. LESSEE CONSENT TO ASSIGNMENT OF AGREEMENT AND EXECUTION OF
INDENTURE. The Lessee acknowledges and agrees that the Issuer will, pursuant to
the Indenture and as security for the payment of the principal of, premium, if
any, and the interest on the Bonds, assign and pledge to the Trustee, and create
a security interest in favor of the Trustee in certain of its rights, title and
interest in and to this Agreement (including all Pledged Revenues) reserving,
however, the Reserved Rights; and the Lessee hereby agrees and consents to such
assignment and pledge. The Lessee acknowledges that it has received a copy of
the Indenture and consents to the execution of the same by the Issuer; provided,
however, such consent does not constitute a representation as to the accuracy of
any representations or warranties made thereunder.
SECTION 4.7. LESSEE'S PERFORMANCE UNDER INDENTURE. The Lessee agrees,
for the benefit of the Bondholders, to do and perform all acts and things
contemplated in the Indenture to be done or performed by it.
SECTION 4.8. INTEREST RATE DETERMINATION METHOD. The Lessee, with the
consent of the Credit Issuer, is hereby granted the right to designate from time
to time (i) changes in the Interest Rate Determination Method in the manner and
to the extent set forth in Section 2.04 of the Indenture and (ii) the length of
the Medium-Term Rate Period or the Maximum Term Rate, as applicable, in the
manner and to the extent set forth in Section 2.03(e) of the Indenture.
SECTION 4.9. PREPAYMENTS. The Lessee may prepay all or any part of the
Lease Payments required to be paid by it under this Agreement, at the times and
in the amounts provided in Article VII for redemption of the Bonds, and in the
case of mandatory redemptions of the Bonds, the Lessee shall cause to be
furnished to the Issuer such amounts on or prior to the applicable redemption
dates. Prepayment of amounts due hereunder pursuant to this Section 4.9 shall be
deposited in the Bond Fund.
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ARTICLE V.
PARTICULAR AGREEMENTS
SECTION 5.1. MAINTENANCE, OPERATION, MODIFICATION AND INSURING OF
PROJECT; NO OPERATION OF PROJECT BY ISSUER.
(a) Throughout the Lease Term, the Lessee shall at its own expense,
maintain and operate all portions of the Project during their useful lives or
until they are replaced with facilities necessary in their operation. This
Agreement does not prevent the Lessee from merging or consolidating with another
entity as permitted by Section 5.3. The Lessee further agrees that it will at
its own expense keep the Project properly insured against loss or damage from
such perils usually insured against by businesses operating or owning like
properties and maintain public liability insurance and all such worker's
compensation or other similar insurance as may be required by law. Evidence of
such insurance will be furnished to the Issuer, the Trustee and the Credit
Issuer upon request. Nothing contained in this Agreement shall be deemed to
authorize or require the Issuer to operate the Project or to conduct any
business enterprise in connection therewith.
(b) The Lessee may from time to time, in its sole discretion and at its
own expense, but subject to the provisions of Section 5.9, make any additions,
modifications or improvements to the Project, including installation of
machinery, equipment, and related property, which it may deem desirable;
provided that all such additions, modifications and improvements do not
adversely affect the structural integrity of the Building and are located wholly
within the boundary lines of the Leased Land. With the exception of any
machinery, equipment and related property which shall be transferred to the
Issuer at the option of the Lessee pursuant to Section 5.9 hereof, all
machinery, equipment and related property owned and installed by the Lessee
which is not financed with Bond proceeds, shall be the sole property of the
Lessee in which neither the Issuer nor the Trustee shall have any interest and
may be modified or removed at any time while the Lessee is not in default under
this Lease; provided that any damage to the Project occasioned by such
modification or removal shall be repaired by the Lessee at its own expense.
Furthermore, all machinery, equipment and related property owned and installed
by the Sublessee which is neither owned by the Lessee nor financed with Bond
proceeds, shall be and remain the sole property of Sublessee in which neither
the Issuer, the Trustee nor the Lessee shall have any interest and may be
modified or removed at any time while the Sublessee is not in default under the
Sublease.
SECTION 5.2. ISSUER'S AND TRUSTEE'S EXPENSES; RELEASE AND
INDEMNIFICATION PROVISIONS. The Lessee agrees, whether or not the transactions
contemplated by the Lessee Documents and the Indenture shall be consummated, to
indemnify and hold harmless the Issuer and its officers, commissioners,
directors, officials, employees and agents, including the Trustee, counsel to
the Issuer and financial advisor to the Issuer (any and all of the foregoing
being hereinafter referred to as the "Indemnified Persons"), from and against
any and all claims, actions, suits, proceedings, expenses, judgments, damages,
penalties, fines, assessments, liabilities, charges or other costs (including,
without limitation, all attorneys' fees and expenses incurred in connection with
enforcing this Agreement or collecting any rents due hereunder and any claim or
proceeding or any investigation in connection therewith) relating to, resulting
from or in connection with (i) any cause whatsoever in connection with the
Project, including, without limitation, the acquisition, design, construction,
installation, equipping, operation, maintenance or use thereof or the financing
thereof including any expenses arising from the failure to make payment of
principal and interest on the Bonds; (ii) any act or omission of the Lessee or
any of its agents, contractors, servants, employees or licensees, in connection
with the Project; (iii) the issuance and sale of the Bonds, and (iv) a
misrepresentation or breach of warranty by the Lessee hereunder or under any of
the Lessee Documents, or any violation by the Lessee of any of its covenants
hereunder or under any of the other Lessee Documents. This indemnity is
effective only with respect to any loss incurred by the Indemnified Persons not
due to willful misconduct, gross negligence, or bad faith on the part of such
Indemnified Persons. In case any action or proceeding shall be brought against
one or more of the Indemnified Persons and in respect of which indemnity may be
sought as provided herein, such Indemnified Person or Indemnified Persons shall
promptly notify the Lessee in writing and the Lessee shall promptly assume the
defense thereof, including the employment of counsel reasonably satisfactory to
such Indemnified Person or Indemnified Persons, payment of all expenses and the
right to negotiate and consent to settlement; but the failure to notify the
Lessee as provided herein shall not relieve the Lessee from any liability that
it may have (i) under this Section, so long as the Lessee is given the
14
reasonable opportunity to defend such claim, and (ii) otherwise than under this
Section. Any one or more of the Indemnified Persons shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, but the reasonable fees and expenses of such counsel shall be at the
expense of such Indemnified Persons or Indemnified Persons unless (x) the
employment of such counsel has been specifically authorized in writing by the
Lessee, (y) the named parties to any such action (including any impleaded
parties) include both the Lessee and such Indemnified Person or Indemnified
Persons and representation of both the Lessee and such Indemnified Person or
Indemnified Persons by the same counsel would be inappropriate due to actual or
potential differing interests between them, or (z) the Indemnified Person or
Indemnified Persons have been advised that one or more legal defenses may be
available to any or all of them which may not be available to the Lessee in
which case the Lessee shall not be entitled to assume the defense of such suit
notwithstanding its obligation to bear the fees and expenses of such counsel.
The Lessee shall not be liable for any settlement of any such action effected
without its consent, but if settled with such consent or if there is a final
judgment in any such action with or without consent, the Lessee agrees to
indemnify and hold harmless the Indemnified Person or Indemnified Persons from
and against any loss by reason of such settlement or judgment, subject to the
limitations set forth above. Notwithstanding the foregoing, this indemnity is
not intended and does not pertain to principal, Purchase Price and interest on
the Bonds.
The provisions of this Section shall survive the Lease Term.
SECTION 5.3. MAINTENANCE OF EXISTENCE. The Lessee agrees that
throughout the Lease Term it shall maintain its existence as a limited liability
company organized under the laws of the State of Georgia and shall not merge or
consolidate with any other entity and shall not transfer or convey all or
substantially all of its property, assets and licenses; provided, however, the
Lessee may, with the written consent of the Issuer and without violating any
provision hereof, consolidate with or merge into another domestic entity (I.E.,
an entity existing under the laws of one of the states of the United States of
America or the District of Columbia) or permit one or more other domestic
entities to consolidate with or merge into it, or transfer all or substantially
all of its assets to another domestic entity, but only on the condition that
(a) the assignee entity or the entity resulting from or surviving
such merger (if other than the Lessee) or consolidation or the
entity to which such transfer is made expressly assumes in
writing and agrees to perform all of the Lessee's obligations
hereunder and under the Credit Issuer Documents and the other
Lessee Documents,
(b) in connection with any such consolidation, merger or transfer,
the Credit Issuer shall expressly ratify and affirm that the
Credit Facility remains in full force and effect, and
(c) the surviving entity shall preserve and keep in full force and
effect all licenses and permits necessary to the proper conduct
of its business.
SECTION 5.4. ANNUAL AUDIT. The Lessee agrees to cause the annual report
of the Credit Issuer (or its holding company) furnished to the stockholders of
the Credit Issuer (or its holding company) to be furnished to the Trustee as
soon as practicable after it is furnished to the Credit Issuer's (or its holding
company's) shareholders and upon request to furnish such annual report to any
bondholder who shall have filed his name and address with the Trustee for the
purpose of receiving such annual report and whose name and address shall have
been transmitted to the Lessee by the Trustee.
SECTION 5.5. AGREEMENT OF ISSUER NOT TO ASSIGN OR PLEDGE. Except for
the Issuer's assignment and pledge of the Security, as defined in the Indenture,
and its conveyance of security title to the Project pursuant to the Security
Deed, the Issuer agrees that it will not attempt to further assign, pledge,
transfer or convey its interest in or create any assignment, pledge, lien,
charge or encumbrance of any form or nature with respect to the Project or any
of the property, moneys, securities and rights granted by the Issuer to the
Trustee under the Granting Clause of the Indenture.
SECTION 5.6. REDEMPTION OF BONDS. The Issuer or the Trustee, at the
request at any time of the Lessee and if the same are then redeemable, shall
forthwith take all steps that may be necessary under the applicable redemption
15
provisions of the Indenture to effect redemption of all or any portion of the
Bonds, as may be specified by the Lessee, on the earliest redemption date on
which such redemption may be made under such applicable provisions or upon the
date set for the redemption by the Lessee pursuant to Article VII. As long as
the Lessee is not in default hereunder and the Issuer is not obligated to call
Bonds pursuant to the terms of the Indenture, neither the Issuer nor the Trustee
shall redeem any Bond prior to its stated maturity unless requested to do so in
writing by the Lessee.
SECTION 5.7. REFERENCE TO BONDS INEFFECTIVE AFTER BONDS PAID. Upon
Payment in Full of the Bonds and of all fees and charges of the Trustee and the
Remarketing Agent, all references herein to the Bonds and the Trustee shall be
ineffective and neither the Issuer, the Trustee nor the holders of any of the
Bonds shall thereafter have any rights hereunder and, subject to Article VIII
the Lessee shall have no further obligation hereunder, saving and excepting
those that shall have theretofore vested and any right of any Indemnified Person
(as defined in Section 5.2) to indemnification under Section 5.2, which right
shall survive the payment of the Bonds and the termination of this Agreement.
Reference is hereby made to Article V of the Indenture which sets forth the
conditions upon the existence or occurrence of which Payment in Full of the
Bonds shall be deemed to have been made.
SECTION 5.8. ASSIGNMENT, SALE OR LEASE OF PROJECT. The Lessee may
assign or otherwise transfer its interest in this Agreement and may sublease the
Project provided that (i) if the Sublessee is other than a wholly owned
subsidiary of Xxxxxx Industries, Inc. or a subsidiary thereof the written
consent of the Issuer is obtained, (ii) the purchaser, sublessee or transferee
in such transaction shall be bound by the terms and provisions of this
Agreement, and (iii) such transaction shall not affect the liability of the
Credit Issuer under the Credit Facility.
SECTION 5.9. REMOVAL OF LEASED EQUIPMENT. The Issuer shall not be under
any obligation to renew, repair or replace any inadequate, obsolete, worn out,
unsuitable, undesirable, inappropriate or unnecessary Leased Equipment to the
extent any Leased Equipment exists at the Project. If the Lessee in its sole
discretion determines that any such items of Leased Equipment have become
inadequate, obsolete, worn out, unsuitable, undesirable, inappropriate or
unnecessary for its purposes at such time, the Lessee may remove such items from
the Building and the Leased Land and (on behalf of the Issuer) sell, trade-in or
otherwise dispose of them (as a whole or in part) without any responsibility or
accountability to the Issuer or the Trustee therefor, provided that the Lessee
shall either:
(a) substitute (either by direct payment of the costs thereof or by
advancing to the Issuer the moneys necessary therefor) and
install anywhere in the Building or on the Leased Land other
machinery, equipment or related property having similar utility
(but not necessarily having the same function or value) in the
operation of the Building as a modern industrial facility
(provided such removal and substitution shall not impair
operating unity), all of which substituted machinery, equipment
or related property shall be free of all liens and encumbrances
(other than Permitted Exceptions) but shall become a part of the
Leased Equipment; or
(b) not make any such substitution and installation, provided (i)
that in the case of the sale of any such machinery, equipment or
related property to anyone other than itself or in the case of
the scrapping thereof, the Lessee shall pay into the Bond Fund
the proceeds from such sale or the scrap value thereof, as the
case may be, (ii) that in the case of the trade-in of such
machinery, equipment or related property for other machinery,
equipment or related property not to be installed in the Building
or on the Leased Land, the Lessee shall pay into the Bond Fund
the amount of the credit received by it in such trade-in, and
(iii) that in the case of the sale of any such machinery,
equipment or related property to the Lessee or in the case of any
other disposition thereof, the Lessee shall pay into the Bond
Fund an amount equal to the original cost thereof less
depreciation at rates calculated in accordance with generally
accepted accounting principles.
The removal from the Project of any portion of the Leased Equipment pursuant to
the provisions of this Section shall not entitle the Lessee to any diminution in
or postponement or abatement of the amount of the rents payable under Section
4.2 hereof.
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The Lessee shall report to the Trustee and the Board of Assessors of
the County each such removal, substitution, sale, trade-in or other disposition
of Leased Equipment and shall pay to the Trustee such amounts as are required by
the provisions of the preceding subsection (b) of this Section to be paid into
the Bond Fund promptly after the sale, trade-in or other disposition requiring
such payment; provided, however, that no such payment or report need be made
until the amount with respect to items not replaced on account of all such
sales, trade-ins or other dispositions and not previously paid aggregates at
least $2,000,000. The Lessee shall not remove or permit the removal of any item
of Leased Equipment except in accordance with the provisions of this Section.
The Lessee shall deliver to the Issuer appropriate documents,
including, but not limited to bills of sale, conveying to the Issuer title to
any machinery, equipment or related property installed or placed in the Building
or on the Leased Land pursuant to this Section, and upon request of the Lessee,
the Issuer shall deliver and cause or direct the Trustee to deliver to the
Lessee appropriate documents conveying to the Lessee title to any property
removed from the Building or the Leased Land pursuant to this Section and
releasing the same from the lien of the Indenture and canceling any security
interest with respect thereto. The Lessee shall take or cause to be taken such
action, if any, as may be necessary to perfect a security interest with respect
to any property placed in the Building or on the Leased Land pursuant to this
Section.
SECTION 5.10. TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY CHARGES.
The Issuer and the Lessee acknowledge that under present law no part of the fee
simple title in and to the Project owned by the Issuer will be subject to ad
valorem taxation by the State of Georgia or by any political or taxing
subdivision thereof, and that under present law the income and profits (if any)
of the Issuer from the Project are not subject to either Federal or Georgia
taxation. The Lessee shall pay, as the same become lawfully due and payable, (i)
all taxes and governmental charges of any kind whatsoever upon or with respect
to the interest held by the Lessee under this Lease, (ii) all taxes and
governmental charges of any kind whatsoever upon or with respect to the Project
or any machinery, equipment or related property installed or brought by the
Lessee therein or thereon (including, without limiting the generality of the
foregoing, any taxes levied upon or with respect to the income or profits of the
Issuer from the Project which, if not paid, will become a charge on the rents,
revenues and receipts from the Project prior to or on a parity with the lien
thereon and the pledge or assignment thereof created and made in the Indenture),
(iii) all utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Project, and (iv) all assessments and charges
lawfully made by any governmental body for public improvements that may be
secured by a lien on the Project; provided, that with respect to special
assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the Lessee shall be obligated to pay only
such installments as are required to be paid during the Lease Term.
The Lessee may, at its own expense and in its own name and behalf or in
the name and behalf of the Issuer, in good faith contest any such taxes,
assessments and other charges and, in the event of any such contest, may permit
the taxes, assessments and other charges so contested to remain unpaid during
the period of such contest and any appeal therefrom unless the Issuer, the
Credit Issuer or the Trustee shall notify the Lessee that, in the opinion of
Independent Counsel, by nonpayment of any such items the lien and/or security
interest afforded by the Indenture as to any part of the Project or the rents,
revenues or receipts derived from the Project will be materially endangered or
the Project or any part thereof will be subject to loss or forfeiture, in which
event such taxes, assessments or charges shall be paid promptly. The Issuer
shall cooperate fully with the Lessee in any such contest. If the Lessee shall
fail to pay any of the foregoing items required by this Section to be paid by
the Lessee, the Issuer or the Trustee may (but shall be under no obligation to)
pay the same and any amounts so advanced therefor by the Issuer or the Trustee
shall become an additional obligation of the Lessee to the one making the
advancement, which amounts, together with interest thereon at the rate of ten
per centum (10%) per annum from the date thereof, the Lessee agrees to pay.
SECTION 5.11. COMPLIANCE WITH CREDIT AGREEMENT AND SECURITY DEED. The
Lessee hereby covenants and agrees that it will comply with all covenants and
obligations applicable to it in the Credit Agreement from time to time in effect
or, if the Credit Agreement is terminated prior to the termination of this
Agreement, the Lessee agrees to comply with all covenants and obligations
applicable to it in the Credit Agreement as in effect immediately prior to the
termination thereof until the termination of this Agreement and the payment of
17
the Lessee's obligation hereunder. Issuer and Lessee covenant to comply with
their respective covenants and obligations in the Security Deed.
SECTION 5.12. INSPECTION OF PROJECT. The Issuer, the Trustee and their
duly authorized agents shall have the right at all reasonable times to enter
upon any part of the premises of the Lessee at which the Project is located and
examine and inspect the same as may be reasonably necessary for the purpose of
determining whether the Lessee is in compliance with its obligations under
Section 5.1 or in the event of failure of the Lessee to perform its obligations
under Section 5.1, and the Issuer, the Trustee and their duly authorized agents
shall also have the right at all reasonable times to examine the books and
records of the Lessee insofar as such books and records relate to the
acquisition, construction, installation and maintenance of the Project.
SECTION 5.13. PROJECT LIST. The Lessee shall maintain at the Project
site a list setting forth in reasonable detail all items constituting the
Project.
SECTION 5.14. NO WARRANTY OF CONDITION OR SUITABILITY BY ISSUER. The
Lessee recognizes that the Issuer does not deal in goods of the kind comprising
components of the Project or otherwise hold itself out as having knowledge or
skill peculiar to the practices or goods involved in the Project, and that the
Issuer is not one to whom such knowledge or skill may be attributed by its
employment of an agent or broker or other intermediary who by his occupation
holds himself out as having such knowledge or skill. The Lessee further
recognizes that since the components of the Project have been and are to be
designated and selected by the Lessee, THE ISSUER HAS NOT MADE AN INSPECTION OF
THE PROJECT OR OF ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION THEREOF, AND,
EXCEPT AS OTHERWISE PROVIDED HEREIN, THE ISSUER MAKES NO WARRANTY OR
REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE, WITH RESPECT TO THE SAME OR TO
THE LOCATION, USE, DESCRIPTION, DESIGN, MERCHANTABILITY, FITNESS FOR USE FOR ANY
PARTICULAR PURPOSE, CONDITION OR DURABILITY THEREOF, TO THE QUALITY OF THE
MATERIAL OR WORKMANSHIP THEREIN, IT BEING AGREED THAT ALL RISKS INCIDENT THERETO
ARE TO BE BORNE BY THE LESSEE. IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY
NATURE IN THE PROJECT OR ANY FIXTURE OR OTHER ITEM CONSTITUTING A PORTION
THEREOF, WHETHER PATENT OR LATENT, THE ISSUER SHALL HAVE NO RESPONSIBILITY OR
LIABILITY WITH RESPECT THERETO. THE PROVISIONS OF THIS SECTION HAVE BEEN
NEGOTIATED AND ARE INTENDED TO BE A COMPLETE EXCLUSION AND NEGATION OF ANY
WARRANTIES OR REPRESENTATIONS BY THE ISSUER, EXPRESS OR IMPLIED (TO THE EXTENT
PERMITTED BY APPLICABLE LAW), WITH RESPECT TO THE PROJECT OR ANY FIXTURE OR
OTHER ITEM CONSTITUTING A PORTION THEREOF, WHETHER ARISING PURSUANT TO THE
U.C.C. OR ANOTHER LAW NOW OR HEREAFTER IN EFFECT OR OTHERWISE.
SECTION 5.15. SPECIAL COVENANTS RELATED TO AD VALOREM TAXATION.
(a) The Issuer and the Lessee understand that the Project costs will
total at least $11,000,000 and that the Project will consist of a manufacturing
facility.
(b) The parties acknowledge that the Lessee's leasehold interest in the
Project is subject to taxation pursuant to the principles enunciated by X. X.
Xxxxxx, et al. x. Xxxxxxx County Board of Tax Assessors, 240 Ga. 277; 282 S.E.2d
880 (1981) (the "Xxxxxx Case"). The parties further agree that, pursuant to the
Xxxxxx Case, the fair market value of the Lessee's leasehold interests in the
Project for real property and for equipment shall be determined by the formula
set forth in the Xxxxxx Case. The valuation of the Lessee's leasehold interests
as specified in Exhibit A will be returned for ad valorem taxation at forty
percent (40%) of the fair market value (the "assessed value") and the ad valorem
tax payable by the Lessee shall be the product of such assessed value multiplied
by the Xxxxxxx County millage rate for the applicable tax year.
The property of which the Project is a part will be valued in
accordance with the usual procedures and as if the Project were not included
therein.
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(c) The Lessor and the Issuer acknowledge that taxes payable by Lessee
on its leasehold interest takes into account the terms of this Agreement and the
fair market value of similar leasehold interests in similar property and the
prevailing rents charged in the geographic area of the Project.
(d) At the end of the Lease Term with respect to the Project as
determined by application of paragraphs (b) and (c) and assuming that Payment in
Full of the Bonds has been made, the Issuer shall, for a consideration of $10.00
to be paid by the Lessee, convey the Project to the Lessee and thereafter. The
Lessee shall own the Project and shall pay ad valorem taxes in each year in an
amount required through the standard assessment procedures of the aforementioned
Board of Tax Assessors, said Project to be valued at its fee simple value upon
termination of this Agreement.
(e) The Issuer agrees that if the Tax Commissioner bills the Issuer it
will invoice the Lessee for the amount of ad valorem taxes relating to Lessee's
interests in the Project in the amounts Lessee has agreed to pay, as described
above and the Lessee will pay such amounts directly to the Issuer as a portion
of its Additional Rent owing hereunder, for transmittal by the Issuer to the Tax
Commissioner of Xxxxxxx County, as required by law. In the event that in any
year the Board of Tax Assessors values the Lessee's leasehold interest in the
Project in a manner which causes the taxes payable on such leasehold interest to
exceed the amounts the parties agree are payable by Lessee, the Lessee shall
have the right to appeal on behalf of the Issuer or in the Issuer's name, place
and stead.
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ARTICLE VI.
EVENTS OF DEFAULT AND REMEDIES
SECTION 6.1. EVENTS OF DEFAULT DEFINED. The following shall be "events
of default" hereunder and the term "event of default" shall mean, whenever it is
used herein, any one or more of the following events:
(a) failure by the Lessee to make any rental payment required to be
made under Section 4.2(a) when the same becomes due and payable.
(b) failure by the Lessee to observe or perform any agreement
hereunder or on its part to be observed or performed, other than
as referred to in subsection (a) or (b) of this Section, for a
period of thirty (30) days after written notice, specifying such
failure and requesting that it be remedied, given to the Lessee
and to the Credit Issuer by the Issuer or the Trustee, unless the
Issuer and the Trustee shall agree in writing to an extension of
such time prior to its expiration; provided, however, if the
failure stated in the notice cannot be corrected within the
applicable period, the Issuer and the Trustee will not
unreasonably withhold their consent to an extension of such time
if it is possible to correct such failure and corrective action
is instituted by the Lessee or the Credit Issuer within the
applicable period and diligently pursued until the failure is
corrected; or in the case of any such default which can be cured
with due diligence but not within such thirty-day period, the
Lessee's or Credit Issuer's failure to proceed promptly to cure
such default and thereafter prosecute the curing of such default
with due diligence;
(c) any representation by or on behalf of the Lessee contained in
this Agreement or in any instrument furnished in compliance with
or in reference to this Agreement, the Indenture or the Credit
Agreement proves false or misleading in any material respect as
of the date of the making or furnishing thereof; and
(d) an "event of default" occurs and is continuing under the Indenture.
The Lessee and the Issuer hereby authorize the Credit Issuer to do any
and all things necessary to correct any default described in paragraph (c) above
on behalf of the Lessee.
The foregoing provisions of subsection (c) of this Section are subject
to the following limitations: If by reason of force majeure, the Lessee is
unable in whole or in part to carry out the agreements on its part therein
referred to, the failure to perform such agreements due to such inability shall
not constitute an event of default nor shall it become an event of default upon
appropriate notification to the Issuer or the passage of the stated period of
time. The term "force majeure" as used herein shall mean, without limitation,
the following: acts of God; strikes, lockouts or other industrial disturbances;
acts of public enemies; orders of any kind of the government of the United
States of America or of the State or any of their departments, agencies,
political subdivisions or officials, or any civil or military authority;
insurrections; riots; epidemics; landslides; lightning; earthquakes; fires;
hurricanes; tornadoes; storms; floods; washouts; droughts; arrests; restraint of
government and people; civil disturbances; explosions; breakage or accident to
machinery, transmission pipes or canals; partial or entire failure of utilities;
or any other cause or event not reasonably within the control of the Lessee. The
Lessee agrees, however, to remedy with all reasonable dispatch the cause or
causes preventing the Lessee from carrying out its agreements; provided, that
the settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the Lessee, and the Lessee shall not be
required to make settlement of strikes, lockouts and other industrial
disturbances by acceding to the demands of the opposing party or parties when
such course is, in the judgment of the Lessee, unfavorable to the Lessee.
SECTION 6.2. REMEDIES. Whenever an event of default shall have happened
and be continuing, the Trustee, as the assignee and pledgee of the Issuer under
the Indenture, shall take any one or more of the following remedial steps:
20
(a) In the event the Trustee has accelerated payment of the Bonds
pursuant to the Indenture, without terminating this Lease and
without retaking possession of the Project, the Trustee may at
its option, demand immediate payment of all Lease Payments due
and payable pursuant to Section 4.2 and all Additional Rent due
and payable pursuant to Section 4.4. The Lessee acknowledges and
agrees that upon any such acceleration of the Bonds, the Lease
Payments and the Additional Rent due and payable pursuant hereto
shall consist of (i) the aggregate principal amount of the
outstanding Bonds, (ii) all accrued and unpaid interest on the
Bonds to the date of payment of the principal of the outstanding
Bonds (but not any interest that would have accrued on the Bonds
for the remainder of the Lease term if the Bonds had remained
outstanding) and (iii) all other amounts then due and payable to
the Issuer or the Trustee pursuant to Section 4.4, including fees
of Counsel actually incurred. The Lessee and the Trustee
acknowledge and agree that the foregoing payments constitute an
advance payment of rent, and not liquidated damages or a penalty,
and that such payments have been discounted to present value by
virtue of the exclusion from the calculation thereof of the
rental payments for the remainder of the Lease term corresponding
to the interest that would have accrued on the Bonds for the
remainder of the Lease term if the Bonds remained outstanding.
The Lessee shall receive as a credit against such Lease Payments
and Additional Rent all payments made by the Credit Issuer
pursuant to the Credit Facility and all other amounts described
in Section 3.08(a) of the Indenture. The Trustee shall have no
right to exercise the remedy provided herein if the Trustee
terminates this Lease or the Trustee retakes possession of the
Project. Upon payment of all such amounts, the Lessee shall have
no further rental obligations under this Lease and the payment of
such amounts shall constitute Payment in Full of the Bonds for
purposes of this Lease.
(b) Subject to the provisions of Section 6.5 hereof, the Trustee may
take whatever action at law or in equity may appear necessary or
desirable to collect any sums then due and thereafter to become
due hereunder or to enforce performance and the observance of any
agreement of the Lessee hereunder.
(c) The Trustee may exercise any remedies provided under the Indenture.
Any amounts collected pursuant to action taken under this Section shall be paid
into the Bond Fund and applied in accordance with the provisions of the
Indenture and after Payment in Full of the Bonds and the payment of any costs
occasioned by an event of default hereunder, any excess moneys in the Bond Fund
shall be returned to the Lessee.
The Lessee hereby authorizes the Trustee to draw moneys under the
Credit Facility in accordance with the Indenture upon a declaration of
acceleration of payment of the Bonds in an amount equal to (i) the aggregate
principal amount of all outstanding Bonds and (ii) all interest on the Bonds due
and to become due to the date of payment. The obligation of the Lessee to make
accelerated payment of all rental payments required to be made by the Lessee
pursuant to Section 4.2 upon a declaration of acceleration of payment of the
Bonds shall be deemed satisfied and discharged by a corresponding drawing and
payment under the Credit Facility.
SECTION 6.3. NO REMEDY EXCLUSIVE. Subject to the provisions of Section
6.5, no remedy herein conferred upon or reserved to the Trustee is intended to
be exclusive of any other remedy, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy hereunder or now or
hereafter existing at law, in equity or by statute. No delay or omission to
exercise any right or power accruing upon the occurrence of any event of default
shall impair any such right or power or shall be construed to be a waiver
thereof, but any such right or power may be exercised from time to time and as
often as may be deemed expedient. The Trustee and the holders of the Bonds,
subject to the provisions of the Indenture, shall be entitled to the benefit of
all agreements herein contained.
SECTION 6.4. AGREEMENT TO PAY COUNSEL FEES AND EXPENSES. If there
should occur a default or an event of default hereunder and the Trustee or the
Issuer should employ Counsel or incur other expenses for the collection of sums
due hereunder or the enforcement of performance or observance of any agreement
on the part of the Lessee herein contained, the Lessee agrees that it will on
demand therefor pay to the Trustee or the Issuer the reasonable fees and
21
expenses of such Counsel actually incurred and billed and such other expenses so
incurred by the Trustee or the Issuer.
If the Lessee should fail to make any payments required in this
Section, such item shall continue as an obligation of the Lessee until the same
shall have been paid in full, with interest thereon from the date such payment
was due at the rate per annum borne by the Bonds until paid in full.
SECTION 6.5. WAIVER OF EVENTS OF DEFAULT AND RESCISSION OF
ACCELERATION. If, in compliance with the requirements of Section 6.06 of the
Indenture, the Trustee shall waive any event of default as therein defined with
the written consent of the Credit Issuer and its consequences or rescind any
declaration of acceleration of payments of the principal of and interest on the
Bonds, such waiver shall also waive any event of default hereunder and its
consequences and such rescission of a declaration of acceleration of the
principal of and interest on the Bonds shall also rescind any declaration of any
acceleration of all payments required to be made under Section 4.2. In case of
any such waiver or rescission, or in case any proceeding taken by the Trustee on
account of any such event of default shall have been discontinued or abandoned
or determined adversely, then and in every such case the Issuer, the Lessee, the
Trustee, the Credit Issuer and the holders of the Bonds shall be restored to
their former positions and rights hereunder, but no such waiver or rescission
shall extend to any subsequent or other event of default or impair any right
consequent thereon.
22
ARTICLE VII.
PREPAYMENTS
SECTION 7.1. OPTIONAL PREPAYMENTS.
(a) The Lessee shall have, and is hereby granted, with the consent of
the Credit Issuer, if any, the option to prepay Lease Payments in whole,
together with interest thereon to the date of redemption of the Bonds, at any
time by taking, or causing the Issuer to take, the actions required by the
Indenture for the redemption of all Bonds then outstanding, upon the occurrence
of any of the events set forth in Section 2.18(b) of the Indenture.
(b) The Lessee shall have, and is hereby granted, with the consent of
the Credit Issuer, if any, the option to prepay all or any portion of the Lease
Payments, together with interest thereon to the date of redemption of the Bonds,
at any time permitted by Section 2.18(a) of the Indenture by taking, or causing
the Issuer to take, the actions required by the Indenture (i) to discharge the
lien thereof through the redemption, or provision for payment of redemption of
all Bonds then outstanding or (ii) to effect the redemption, or provision for
payment or redemption, of less than all Bonds then outstanding.
(c) To make a prepayment pursuant to this Section 7.1, the Lessee shall
give written notice, consented to by the Credit Issuer, if any, to the Issuer
and the Trustee which shall specify therein (i) the date of the intended
prepayment, which shall not be less than 45 days from the date any Bonds are to
be redeemed from such prepayment, and (ii) the principal amount to be prepaid
and the date or dates on which the prepayment is to occur. All such prepayments
shall be in the amount of the unpaid amount of the Lease Payments if made
pursuant to Section 7.1(a) or in the amount of an Authorized Denomination if
made pursuant to Section 7.1(b) and the Lessee shall furnish additional funds,
if necessary, to make such prepayments in such amounts. In addition, the Lessee
shall make such additional Lease Payments as shall be necessary to pay any
redemption premium on the Bonds in connection with such redemption.
SECTION 7.2. OPTIONAL PURCHASE OF BONDS. Subject to the terms of the
Indenture regarding the use of Eligible Funds, the Lessee may at any time, and
from time to time, furnish moneys to the Tender Agent accompanied by a notice
directing such moneys to be applied to the purchase of Bonds delivered for
purchase pursuant to terms thereof, which Bonds shall be delivered in accordance
with Section 2.08 of the Indenture. The Lessee shall deliver to the Remarketing
Agent and the Credit Issuer a copy of any such notice.
SECTION 7.3. RELATIVE PRIORITIES. The obligations of the Lessee in
Section 7.2 of this Article shall be and remain superior to the rights,
obligations and options of the Lessee in Section 7.1 of this Article.
SECTION 7.4. PREPAYMENT TO INCLUDE FEES AND EXPENSES. Any prepayment
under this Article shall also include any expenses of prepayment, as well as all
expenses and costs provided for herein.
SECTION 7.5. OBLIGATIONS AFTER PAYMENT AND TERMINATION OF AGREEMENT.
Anything contained herein to the contrary notwithstanding, the obligations of
the Lessee contained in 5.2 and 6.4 shall continue after Payment in Full of the
Bonds and termination of this Agreement.
SECTION 7.6. PURCHASE OF BONDS.
(a) In consideration of the issuance of the Bonds by the Issuer, but
for the benefit of the Holders, the Lessee has agreed, and does hereby covenant,
to cause the necessary arrangements to be made and to be thereafter continued
whereby the Holders from time to time may deliver, or may be required to deliver
Bonds for purchase and whereby such Bonds shall be so purchased. In furtherance
of the foregoing covenant of the Lessee, the Issuer, at the request of the
Lessee, has set forth in the Indenture the terms and conditions relating to the
delivery of Bonds by the Holders thereof for purchase, has set forth in the
Indenture the duties and responsibilities of the Tender Agent with respect to
the purchase of Bonds, and of the Remarketing Agent with respect to the
remarketing of Bonds and has therein provided for the appointment of the Tender
Agent and Remarketing Agent. The Lessee hereby authorizes and directs the Tender
23
Agent and the Remarketing Agent to purchase, offer, sell and deliver Bonds in
accordance with the provisions of the Indenture.
Without limiting the generality of the foregoing covenant of the
Lessee, and in consideration of the Issuer's having set forth in the Bonds and
the Indenture the aforesaid provisions, the Lessee, covenants, for the benefit
of the Holders, to provide for arrangements to pay, or cause to be paid, such
amounts as shall be necessary to effect the payment of the Purchase Price of
Bonds delivered for purchase, all as more particularly described in the
Indenture.
(b) Notwithstanding the provisions of subsection (a) of this Section,
the obligations of the Lessee under subsection (a) of this Section with respect
to the purchase of Bonds shall be terminated on the date the Bonds begin to bear
interest at the Fixed Rate in accordance with the Indenture.
(c) In furtherance of the obligations of the Lessee under subsection
(a) of this Section, the Lessee shall provide for the payment of its obligations
under said subsection (a) by the delivery of the Original Credit Facility
simultaneously with the original delivery of the Bonds. In order to implement
such undertaking of the Lessee, the Issuer, at the direction of the Lessee, has
set forth in the Indenture the terms and conditions relating to drawings under
the Credit Facility to provide moneys for the purchase of Bonds. The Lessee
hereby authorizes and directs the Trustee to draw moneys under the Credit
Facility in accordance with the provisions of the Indenture to the extent
necessary to provide moneys payable under Section 2.07 of the Indenture if and
when due.
(d) The Issuer shall have no obligation or responsibility, financial or
otherwise, with respect to the purchase of Bonds or the making or continuation
of arrangements therefor other than as expressly set forth in subsection (a) of
this Section 7.7, except that the Issuer shall generally cooperate with the
Lessee, the Trustee and the Remarketing Agent as contemplated in Section 2.07 of
the Indenture.
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ARTICLE VIII.
OPTIONS IN FAVOR OF LESSEE; OBLIGATION OF LESSEE
SECTION 8.1. OPTIONS TO TERMINATE THE LEASE TERM; PURCHASE PROJECT. The
Lessee shall have the option to terminate the Lease Term at any time after
payment in full of the Bonds, in accordance with the provision of this Agreement
and the Indenture by giving the Issuer notice in writing of such termination and
such termination shall forthwith become effective. The Lessee shall have, and is
hereby granted the option to purchase the Project following the termination of
the Lease Term by paying the sum of $10.00 to the Issuer.
SECTION 8.2. CONVEYANCE ON PURCHASE. At the closing of the purchase
pursuant to Section 8.1 hereof or pursuant to the exercise of any option to
purchase granted herein, the Issuer will upon receipt of the purchase price
deliver to the Lessee the following:
(a) if the Indenture shall not at the time have been satisfied in
full, a release by the Trustee from the lien and/or security
interest of the Indenture in the property with respect to which
such purchase is being consummated;
(b) Limited Warranty Deed or other documents conveying to the Lessee
good and marketable fee simple title in and to the property
included in the Project with respect to which such purchase is
being consummated, as such property then exists, subject to the
following, (i) those liens, security interests and encumbrances
(if any) to which such title in and to said property was subject
when conveyed to the Issuer, (ii) those liens, security interests
and encumbrances created by the Lessee or to the creation or
suffering of which the Lessee consented other than the Security
Deed, (iii) those liens, security interests and encumbrances
resulting from the failure of the Lessee to perform or observe
any of the agreements on its part contained in this Agreement,
(iv) Permitted Liens other than the Indenture, and (v) the rights
and title of any condemning authority;
(c) assignment of licenses, permits, warranties, etc.; and
(d) customary owner's affidavit.
SECTION 8.3. OBLIGATION TO PURCHASE PROJECT. The Lessee hereby agrees
to purchase, and the Issuer hereby agrees to sell, the Project for ten dollars
($10.00) at the expiration or sooner termination of the Lease Term following
payment in full of the Bonds. The Issuer has delivered to the Trustee an
executed Limited Warranty Deed to be delivered to the Lessee upon the Lessee's
termination of this Agreement in accordance with this Article and Section 7.18
of the Indenture.
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ARTICLE IX.
RIGHTS OF CREDIT ISSUER
SECTION 9.1. RIGHTS OF CREDIT ISSUER.
(a) For purposes of this Section 9.1 "Lender" means the current holder
of the Security Deed.
(b) This Agreement and all rights of the Lessee hereunder are and shall
be subject and subordinate to the lien and security title of the Security Deed.
The Lessee recognizes and acknowledges the right of Lender to foreclose or
exercise the power of sale against the Project under the Security Deed.
(c) The Lessee shall, in confirmation of the subordination set forth in
Section 9.1(b) and notwithstanding the fact that such subordination is
self-operative, and no further instrument or subordination shall be necessary
upon demand, at any time or times, execute, acknowledge and deliver to the
Issuer or to Lender any and all instruments requested by either of them to
evidence such subordination.
(d) If requested by Lender, the Lessee shall, upon demand, at any time
or times, execute, acknowledge and deliver to Lender, any and all instruments
that may be necessary to make this Agreement superior to the lien of the
Security Deed.
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ARTICLE X.
MISCELLANEOUS
SECTION 10.1. TERM OF AGREEMENT. Except as provided in Sections 5.2 and 6.4
and Article VIII, this Agreement shall terminate when Payment in Full of the
Bonds shall have been made.
SECTION 10.2. NOTICES. All notices, approvals, consents, requests and
other communications hereunder shall be in writing and shall be deemed to have
been given when delivered by hand or mailed by first class registered or
certified mail, return receipt requested, postage prepaid, and addressed as
follows or (unless specifically prohibited) when telexed or telecopies to the
telex or telecopy numbers as follows:
(1) If to the Issuer: Development Authority of Xxxxxxx County, Georgia
0000 Xxxxxx Xxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Chairman
(2) If to the Lessee: Xxxxxx Riverside, LLC
c/o Abrams Properties, Inc.
0000 Xxx Xxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
With a copy to: Xxxx Xxx Zatcoff & Xxxxxxxxx
000 Xxxxxxxx Xxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
(3) If to the Trustee: AmSouth Bank
0000 Xxxxx Xxxxxx Xxxxx - 0xx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Corporate Trust Department
(4) If to the Remarketing
Agent: Merchant Capital, L.L.C.
000 Xxxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier (000) 000-0000
Attention: Municipal Syndicate
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(5) If to the Credit
Issuer: NationsBank, N.A.
Northwest Commercial Banking Center
Riverwood 100
0000 Xxxxxxxxx Xxxxxx XX
Xxxxxxx, Xxxxxxx 00000-0000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxx Xxxxx
With a copy to: Xxxxxx & Bird
0000 Xxxx Xxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Attention: Xxxxxxxx Xxxxxxxxx, Esq.
A duplicate copy of each notice, approval, consent, request or other
communication given hereunder by the Issuer, the Lessee, the Trustee, the
Remarketing Agent or the Credit Issuer to any one of the others shall also be
given to all of the others. The Issuer, the Lessee, the Trustee and the Credit
Issuer may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, approvals, consents, requests or other
communications shall be sent or persons to whose attention the same shall be
directed.
SECTION 10.3. BINDING EFFECT. This Agreement shall inure to the benefit
of and shall be binding upon the Issuer, the Lessee and their respective
successors and assigns.
SECTION 10.4. SEVERABILITY. If any provision hereof 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 10.5. AMOUNTS REMAINING IN BOND FUND. It is agreed by the
parties hereto that any amounts remaining in the Bond Fund and Construction Fund
upon expiration or sooner termination of this Agreement, after Payment in Full
of the Bonds, payment of the fees, charges and expenses of the Trustee, the
Remarketing Agent and the Credit Issuer (including, without limitation, the fees
and expenses of their respective Counsel), and payment of all other amounts
required to be paid under the Indenture and under the Credit Agreement,
including payment of rebatable arbitrage, shall be paid immediately to the
Lessee by the Trustee.
SECTION 10.6. RELIANCE BY ISSUER. The Issuer shall have the right at
all times to act in reliance upon the authorization, representation or
certification of the Authorized Lessee Representative or the Trustee.
SECTION 10.7. ISSUER'S OBLIGATIONS LIMITED. Except for the interest of
the Issuer in the Trust Estate and as otherwise expressly herein provided, no
recourse under or upon any obligation or agreement contained in this Agreement
or in any Bond or under any judgment obtained against the Issuer, or by the
enforcement of any assessment or by any legal or equitable proceeding by virtue
of any constitution or statute or otherwise or under any circumstances, under or
independent of the Indenture, shall be had against the Issuer.
Anything in this Agreement to the contrary notwithstanding, it is
expressly understood and agreed by the parties hereto that (a) the Issuer may
rely conclusively on the truth and accuracy of any certificate, opinion, notice
or other instrument furnished to the Issuer by the Trustee or the Authorized
Representative as to the existence of any fact or state of affairs required
hereunder to be noticed by the Issuer; (b) the Issuer shall not be under any
obligation hereunder to perform any record-keeping or to provide any legal
services, it being understood that such services shall be performed either by
the Trustee or the Lessee; and (c) none of the provisions of this Agreement
shall require the Issuer to expend or risk its own funds or to otherwise incur
financial liability in the performance of any of its duties or in the exercise
of any of its rights or powers hereunder, unless it shall first have been
adequately indemnified to its satisfaction against the cost, expenses and
liability which may be incurred thereby.
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Notwithstanding anything herein contained to the contrary, any
obligation which the Issuer may incur under this Agreement or under any
instrument executed in connection herewith which shall entail the expenditure of
money shall not be a general obligation of the Issuer but shall be a limited
obligation payable solely from the Pledged Revenues.
SECTION 10.8. IMMUNITY OF DIRECTORS, OFFICERS AND EMPLOYEES OF ISSUER.
No recourse shall be had for the enforcement of any obligation, promise or
agreement of the Issuer contained in the Indenture, this Agreement or in any
Bond issued under the Indenture for any claim based thereon or otherwise in
respect thereof, against any director, officer, employee or agent, as such, in
his individual capacity, past, present or future, of the Issuer or of any
successor corporation, either directly or through the Issuer or any successor
corporation, whether by virtue of any constitutional provision, statute or rule
of law, or by the enforcement of any assignment or penalty or otherwise; it
being expressly agreed and understood that the Bonds, the Indenture and this
Agreement are solely corporate obligations, and that no personal liability
whatsoever shall attach to, or be incurred by, any director, officer, employee
or agent, as such, past, present or future, of the Issuer or of any successor
corporation, either directly or through the Issuer or any successor corporation,
under or by reason of any of the obligations, promises or agreements entered
into between the Issuer and the Lessee whether contained in this Agreement or to
be implied therefrom as being supplemental hereto or thereto, and that all
personal liability of that character against every such director, officer,
employee or agent is, by the execution of this Agreement and the Indenture, and
as a condition of, and as part of the consideration for, the execution of this
Agreement and the Indenture, expressly waived and released.
SECTION 10.9. PAYMENTS BY CREDIT ISSUER. The Credit Issuer shall, to
the extent of any payments made by it pursuant to the Credit Facility, be
subrogated to all rights of the Issuer or its assigns (including, without
limitation, the Trustee) as to all obligations of the Lessee with respect to
which such payments shall be made by the Credit Issuer, but, so long as any of
the Bonds remain outstanding under the terms of the Indenture, such right of
subrogation on the part of the Credit Issuer shall be in all respects
subordinate to all rights and claims of the Issuer for all payments which are
then due and payable under the Indenture or otherwise arising under this
Agreement, the Indenture or the Bonds. The Trustee will, upon request, execute
and deliver any instrument reasonably requested by the Credit Issuer to evidence
such subrogation and the Trustee shall assign to the Credit Issuer its rights in
any obligations of the Lessee with respect to which payment of the entire
principal balance and accrued interest thereon shall be made by the Credit
Issuer.
SECTION 10.10. AMENDMENTS, CHANGES AND MODIFICATIONS. Except as
otherwise provided herein or in the Indenture, subsequent to the date of
issuance and delivery of the Bonds and prior to their payment in full, this
Agreement may not be effectively amended or terminated without the written
consent of the Issuer, the Lessee and the Credit Issuer.
SECTION 10.11. COUNTERPARTS. This Agreement may be executed in any
number of counterparts, each of which shall be deemed to be an original, but all
of which together shall constitute one and the same instrument.
SECTION 10.12. CAPTIONS. The captions and headings herein are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions hereof.
SECTION 10.13. AMENDMENT OF AGREEMENT. This Agreement may be modified,
altered, amended or supplemented in accordance with the Indenture in order to
obtain a rating of the Bonds by the Rating Agency.
SECTION 10.14. LAW GOVERNING CONSTRUCTION OF AGREEMENT. This Agreement
shall be governed by, and construed and enforced in accordance with, the laws of
the State.
SECTION 10.15. RELATIONSHIP OF PARTIES; ESTATE FOR YEARS. This
Agreement shall create the relationship of lessor and lessee between Issuer and
Lessee and this Agreement grants to Lessee an estate for years in the Project
and not a usufruct. This Agreement shall not be deemed to create or constitute a
partnership or joint venture between Issuer and Lessee or a loan or other
financing arrangement.
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IN WITNESS WHEREOF, the Issuer and the Lessee have caused this
Agreement to be executed in their respective corporate names and their
respective corporate seals to be affixed hereto and attested by their authorized
officers, all as of the day and year first above written.
DEVELOPMENT AUTHORITY OF XXXXXXX
COUNTY, GEORGIA
By: /s/ Xxxx Xxxxxxx
Chairman
(SEAL)
Attest: /s/ Xxxxxxx Ghif
Assistant Secretary
Signed, sealed and delivered in presence of:
/s/ Xxxxx X. Xxxxx
Unofficial Witness
/s/ Xxxxxxx X. Xxxxxxxx
Notary Public
My commission expires:________________
(NOTARIAL SEAL)
AMSOUTH BANK
Acknowledges receipt of the foregoing Lease
Agreement
By: /s/ Xxxxxxx Xxxxxxx
Title: Vice President
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XXXXXX RIVERSIDE, LLC,
a Georgia limited liability company
By: Xxxxxx Properties, Inc.,
Sole Member
By: /s/ Xxxx X. Xxxxxx
President
Attest:
/s/ Xxxxxxx X. Xxxxxxx
Assistant Secretary
Signed, sealed and delivered in presence of:
______________________________
Unofficial Witness
Notary Public
/s/ Xxxx Xxxxx Xxxxx
My commission expires:
(NOTARIAL SEAL)
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EXHIBIT A DESCRIPTION OF PROJECT
EXHIBIT A-1 LEASED LAND
EXHIBIT A-2 LEASED EQUIPMENT
EXHIBIT A-3 PERMITTED EXCEPTIONS
EXHIBIT B CONSTRUCTION FUND CERTIFICATE AND REQUISITION
EXHIBIT C CERTIFICATE OF COMPLETION
EXHIBIT D LIMITED WARRANTY DEED
