CITY OF SOUTH HUTCHINSON, KANSAS
AS ISSUER
AND
XXXXXXX BUS CORPORATION
AS TENANT
AMENDED AND RESTATED LEASE
DATED AS OF NOVEMBER 15, 1997
$425,000
INDUSTRIAL REVENUE BONDS
SERIES 1984A
(XXXXXXX INDUSTRIES, INC.)
$3,500,000
INDUSTRIAL REVENUE BONDS
SERIES 1997
(XXXXXXX BUS CORPORATION)
LEASE
TABLE OF CONTENTS
Page
ARTICLE I
Section 1.1. Definitions 1
Section 1.2. Representations and Covenants by Tenant 1
Section 1.3. Representations and Covenants by Issuer 4
ARTICLE II
Section 2.1. Granting of Leasehold 5
ARTICLE III
Section 3.1. Basic Rent 5
Section 3.2. Presentation of Bonds in Satisfaction of Rent 6
Section 3.3. Additional Rent 6
Section 3.4. Rent Payable Without Abatement or Setoff 6
Section 3.5. Prepayment of Basic Rent 6
Section 3.6. Deposit of Rent by Trustee 6
ARTICLE IV
Section 4.1. Disposition of Original Proceeds; Project Fund 7
ARTICLE V
Section 5.1. Acquisition of Improvements 7
Section 5.2. Environmental Matters 7
Section 5.3. Project Contracts 8
Section 5.4. Payment of Project Costs for Buildings and Improvements 8
Section 5.5. Payment of Project Costs for Machinery and Equipment 8
Section 5.6. Completion of Project Additions 9
Section 5.7. Deficiency of Project Fund 9
Section 5.8. Right of Entry by Issuer 9
Section 5.9. Machinery and Equipment Purchased by Tenant 10
Section 5.10. Project Property of Issuer 10
Section 5.1l. Kansas Retailers' Sales Tax 10
ARTICLE VI
Section 6.1. Insurance as a Condition to Disbursement 10
Section 6.2. Insurance After Completion 11
Section 6.3. General Insurance Provisions 11
Section 6.4. Evidence of Title 12
ARTICLE VII
Section 7.1. Impositions 12
Section 7.2. Receipted Statements 13
Section 7.3. Issuer May Not Sell 13
Section 7.4. Contest of Impositions 13
Section 7.5. Ad Valorem Taxes 13
ARTICLE VIII
Section 8.1. Use of Project 14
ARTICLE IX
Section 9.1. Sublease Tenant 14
Section 9.2. Assignment by Tenant 14
Section 9.3. Release of Tenant 15
Section 9.4. Mergers and Consolidations 15
Section 9.5. Covenant Against Other Assignments 15
ARTICLE X
Section 10.1. Repairs and Maintenance 15
Section 10.2. Removal, Disposition and Substitution of Machinery or
Equipment 15
ARTICLE XI
Section 11.1. Alteration of Project 17
ARTICLE XII
Section 12.1. Additional Improvements 17
ARTICLE XIII
Section 13.1. Securing of Permits and Authorizations 18
Section 13.2. Mechanic's Liens 18
Section 13.3. Contest of Liens 18
Section 13.4. Utilities 18
ARTICLE XIV
Section 14.1. Indemnity 19
ARTICLE XV
Section 15.1. Access to Project 19
ARTICLE XVI
Section 16.1. Option to Extend Term 19
ARTICLE XVII
Section 17.1. Option to Purchase Project 20
Section 17.2. Quality of Title and Purchase Price 20
Section 17.3. Closing of Purchase 20
Section 17.4. Effect of Failure to Complete Purchase 21
Section 17.5. Application of Condemnation Awards if Tenant
Purchase Project 21
Section 17.6. Option to Purchase Unimproved Portions of Land 21
Section 17.7. Quality of Title - Purchase Price 22
Section 17.8. Closing of Purchase 22
Section 17.9. Effect of Purchase on Lease 22
Section 17.10. Effect of Failure to Complete Project 22
ARTICLE XVIII
Section 18.1. Damage and Destruction 23
Section 18.2. Condemnation 23
Section 18.3. Effect of Tenants Defaults 24
ARTICLE XlX
Section 19.1. Change of Circumstances; Determination of Taxability 24
ARTICLE XX
Section 20.1. Remedies on Default. 25
Section 20.2. Survival of Obligations 26
Section 20.3. No Remedy Exclusive 26
ARTICLE XXI
Section 21.1. Performance of Xxxxxx's Obligations by Issuer 26
ARTICLE XXII
Section 22.1. Surrender of Possession 27
ARTICLE XXIII
Section 23.1. Notices 27
ARTICLE XXIV
Section 24.1. Net Lease 27
Section 24.2. Funds Held by Trustee After Payment of Bonds 27
ARTICLE XXV
Section 25.1. Rights and Remedies 28
Section 25~2. Waiver of Breach 28
Section 25.3. Issuer Shall Not Unreasonably Withhold Consents and
Approvals 28
ARTICLE XXVI
Section 26.1. Quiet Enjoyment and Possessin 28
Section 26.2. Financial Report; Continuing Disclosure 28
ARTICLE XXVII
Section 27.1. Investment Tax Credit; Depreciation 29
ARTICLE XXVIII
Section 28.1. Amendments 29
Section 28.2. Granting of Easements 29
Section 28.3. Security Interests 30
Section 28.4. Construction and Enforcement. 30
Section 28.5. Invalidity of Provisions of Lease 30
Section 28.6. Covenants Binding on Successors and Assigns 30
Section 28.7. Section Headings 30
Section 28.8. Execution of Counterparts 31
Signatures and Acknowledgments 32
LEASE
THIS AMENDED AND RESTATED LEASE, made and entered into as of
November 15, 1997. between the City of South Hutchinson, Kansas (the
"Issuer"), and Coiling Bus Corporation (the "Tenant").
WITNESSETH:
WHEREAS, the Issuer is a municipal corporation incorporated as a
city of the third class, duly organized and existing under the laws of
the State, with full lawful power and authority to enter into this Lease
by and through its governing body; and
WHEREAS, the Issuer, in furtherance of the purposes and pursuant
to the provisions of the laws of the State, particularly K.S.A. 12-1740
et seq., as amended (the "Act"), and in order to provide for the
economic development and welfare of the City of South Hutchinson, Kansas
and its environs and to provide employment opportunities for its
citizens and to promote the economic stability of the State, has
proposed and does hereby propose that it shall:
(a) Acquire the 1997 Improvements (as defined in the Indenture);
(b)) Lease the Project including the 1997 Improvements and any
Project Additions to Tenant for the rentals and upon the terms and
conditions hereinafter set forth; and
(c) Issue, for the purpose of paying Project Costs (as defined in
the Indenture), the Series 1997 Bonds under and pursuant to and subject
to the provisions of the Act and the Indenture (herein defined), said
Indenture being incorporated herein by reference and authorized by an
ordinance of the governing body of Issuer; and
WHEREAS, Xxxxxx, pursuant to the foregoing proposals of Issuer,
desires to lease the Project from Issuer for the rentals and upon the
terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements herein set forth, Issuer and Tenant do hereby
covenant and agree as follows:
ARTICLE I
Section 1.1. Definitions. Capitalized terms not otherwise defined
in this Lease shall have the meanings set forth in Appendix B to the
Indenture. In addition to the words, terms and phrases defined in
Appendix B to the Indenture and elsewhere in this Lease, the capitalized
words, terms and phrases as used herein shall have the meanings set
forth in the Glossary of Words and Terms attached as Appendix C, unless
the context or use indicates another or different meaning or intent.
Section 1.2. Representations and Covenants by Xxxxxx. Tenant makes
the following covenants and representations as the basis for the
undertakings on its part herein contained.
(a) Representations and Covenants Relating to the Code.
(i) Tenant will not use or cause or allow any portion of the
Original Proceeds to be used or applied to provide any airplane, skybox
or other private luxury box, health club facility, facility primarily
used for gambling, or store the principal business of which is the sale
of alcoholic beverages for consumption off premises, and none of the
Original Proceeds will be used to provide such facilities.
(ii) At least 95% of the Original Proceeds will be expended for
Project Costs paid not more than 60 days prior to the Official Action
Date (unless otherwise permitted under Treas. Reg. 1.150-2).
(iii) Tenant will not make or cause or permit to be made, whether
by the Trustee or otherwise, any use of the proceeds (as defined in the
Code) of the Series 1997 Bonds which would cause the Series 1997 Bonds
to be "arbitrage bonds" within the meaning of Section 148 of the Code.
Tenant further covenants and agrees that it will comply with, and will
take all action reasonably required to insure that the Trustee complies
with, all applicable requirements of said Section 148 and Treasury
Regulations promulgated thereunder until all of the Bonds, including
interest thereon and any applicable redemption premium, have been paid.
(iv) The weighted average maturity of the Series 1997 Bonds
(determined in accordance with Section 147(b) of the Code), does not
exceed 120 percent of the average reasonably expected economic life of
the 1997 Improvements financed (as determined in accordance with Section
147(b)) of the Code) with Original Proceeds.
(v) Tenant has reviewed the Issuer's Form 8038 prepared for filing
in connection with the issuance of the Series 1997 Bonds, and represents
that the information set forth therein is tree and accurate.
(vi) Tenant will file or cause to be filed such periodic
supplemental statements or notices with the Internal Revenue Service or
such other designated governmental agency as may now or hereafter be
required by applicable statutes or regulations in order to comply with
Section 144(a)(4) of the Code. Tenant further covenants and agrees that
it will not take any action or permit any action to be taken that would
adversely affect the exclusion from gross income for federal income tax
purposes of the interest on the Series 1997 Bonds.
(vii) The 1997 Improvements, and each portion thereof, constitute
either land or property of a character subject to the allowance for
depreciation as required by Section 144(a) of the Code. Not more than
25% of the Original Proceeds will be used to acquire land in accordance
with Section 147(c) of the Code. All expenditures for and costs of the
1997 Improvements have been or will be items of Project Costs as defined
herein.
(viii) As of the date of issuance of the Series 1997 Bonds, there
will not be outstanding any obligations (other than the Existing Bonds
and the Series 1997 Bonds) the interest on which is exempt from Federal
income tax by virtue of the provisions of Section 144(a) of the Code
and the proceeds of which were to be used with respect to the
Project or with respect to other facilities located within the
boundaries of Issuer, or facilities contiguous to, or integrated
with, the Project or any such facilities, and the principal user
(as defined in the Code) of which is or will be the Tenant or any other
Principal User.
(ix) The Tenant will not request or authorize any disbursement by
the Trustee pursuant to the Lease which would result in less than 95% of
the net proceeds of the Series 1997 Bonds (as defined in Section
150(a)(3) of the Code), including any income thereon, being used to
provide land or property of a character subject to the allowance for
depreciation under the Code.
(x) Tenant will comply with the Arbitrage Instructions (defined in
the Indenture) and will pay to the United States or the Trustee all
arbitrage rebate payments required under Section 148(0 of the Code, to
the extent such amounts are not available to the Trustee in the Rebate
Fund held under the Indenture.
(xi) Tenant will not authorize or permit more than 2% of the
Original Proceeds to be expended for Costs of Issuance, in compliance
with Section 147(g) of the Code.
(xii) Tenant will not authorize or permit any portion of the
Original Proceeds to be used to acquire any property (or any interest
therein) unless the first use of such property is pursuant to such
acquisition.
(xiii) Tenant did not place any property included in the 1997
Improvements in service more than eighteen months before the date of
issuance of the Series 1997 Bonds.
(xiv) The Project, including the 1997 Improvements when completed,
constitutes a "manufacturing facility" within the definition of Section
144((a)(12)) of the Code, and the Tenant has no present intention of
making any substantial use of the Project other than as such
"manufacturing facility."
The Issuer and the Tenant agree to amend the covenants
contained in this subsection in such manner as shall be set forth in an
opinion of Bond Counsel as being necessary to maintain the excludability
from gross income for federal income tax purposes of the interest on the
Bonds, and, for the purpose of implementing such amendments, the special
covenants contained in this Section may be amended at any time, with the
consent of the Trustee, by a written agreement executed by the Issuer
and the Tenant pursuant to this subsection without notice to or the
consent of any Bondowners.
(b) General Representation and Covenants.
(i) Tenant is a Kansas corporation, duly organized and
existing under the laws of said state, and is duly authorized and
qualified to do business in the State, with lawful power and authority
to enter into this Lease, acting by and through its duly authorized
officers.
(ii) Tenant shall (A) maintain and preserve its existence and
organization as a corporation and its authority to do business in the
State and to operate the Project; 03) shall not initiate any proceedings
of any kind whatsoever to dissolve or liquidate without (1) securing the
prior written consent thereto of the Issuer and (2) making provision for
the payment in full of the principal of and interest and redemption
premium, if any, on the Bonds.
(iii) To Tenant's knowledge, neither the execution and/or delivery
of this Lease, the consummation of the transactions contemplated hereby
or by the Indenture, nor the fulfillment of or compliance with the terms
and conditions of this Lease contravenes in any material respect any
provisions of its articles of incorporation, or bylaws or conflicts in
any material respect with or results in a material breach of the terms,
conditions or provisions of any mortgage, debt, agreement, indenture or
instrument to which the Tenant is a party or by which it is bound, or to
which it or any of its properties is subject, or would constitute a
material default (without regard to any required notice or the passage
of any period of time) under any of the foregoing, or would result in
the creation or imposition of any lien, charge or encumbrance upon any
of the property or assets of the Tenant under the terms of any mortgage,
debt, agreement, indenture or instrument, or violates in any material
respect any existing law, administrative regulation or court order or
consent decree to which the Tenant is subject.
(iv) This Lease constitutes a legal, valid and binding obligation
of the Tenant enforceable in accordance with its terms.
(v) The Tenant agrees to operate and will operate the Project, or
cause the Project to be operated as a "facility," as that term is
contemplated in the Act, from the date of Issuer's acquisition of the
Project to the end of the Lease Term.
(vi) The Tenant has obtained or will obtain any and all permits,
authorizations, licenses and franchises necessary to construct the 1997
Improvements and to enable it to operate and utilize the Project for the
purposes for which it was leased by the Tenant under this Lease.
(vii) The estimated total cost of the 1997 Improvements to be
financed by the Series 1997 Bonds, plus interest on the Series 1997
Bonds during acquisition, construction and installation of the 1997
Improvements, and Costs of Issuance of the Series 1997 Bonds, will not
be less than the face amount of the Series 1997 Bonds.
Section 1.3. Representations and Covenants by Issuer. Issuer makes
the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) It is a municipal corporation incorporated as a city of
the third class, duly organized under the constitution and laws of the
State. Under the provisions of the Act and the Ordinance, the Issuer has
the power to enter into and perform the transactions contemplated by
this Lease and the Indenture and to carry out its obligations hereunder
and thereunder.
(b) It will submit to the Internal Revenue Service in
accordance with Section 149 of the Code a completed Internal Revenue
Service Form 8038 or other similar form provided by the Internal Revenue
Service with respect to the Series 1997 Bonds.
(c) It has not, in whole or in part, assigned, leased,
hypothecated or otherwise created any other interest in, or disposed of,
or caused or permitted any lien, claim or encumbrance to be placed
against, the Project, except for this Lease, any Permitted Encumbrances,
any Impositions, and the pledge of the Project pursuant to the
Indenture.
(d) Except as otherwise provided herein or in the Indenture,
it will not during the Term, in whole or in part, assign, lease,
hypothecate or otherwise create any other interest in, or dispose of, or
cause or permit any lien, claim or encumbrance (other than Permitted
Encumbrances) to be placed against, the Project, except this Lease, any
Impositions and the pledge of the Project pursuant to the Indenture.
(e) It has duly authorized the execution and delivery of this
Lease and the Indenture and the issuance, execution and delivery of the
Series 1997 Bonds.
(f) It has obtained the consent to and/or approval of the
issuance of the Series 1997 Bonds by each municipal corporation and
political subdivision the consent or approval of which is required by
the provisions of the Act and the Code.
ARTICLE II
Section 2.1. Granting of Leasehold. Issuer by these presents hereby
rents, leases and lets unto Tenant and Tenant hereby rents, leases and
hires from Issuer, for the rentals and upon and subject to the terms and
conditions hereinafter set forth, the Project for the Basic Term.
Section 2.2. Amendment and Restatement of Original Lease. This
Lease is intended to amend and restate the Lease of the Project entered
into as of August 1, 1984 between the Issuer and the Tenant. The parties
acknowledge that hereafter their relationship with respect to the
Project will be governed by the provisions of this Lease.
ARTICLE III
Section 3.1. Basic Rent. Issuer reserves and Tenant covenants and
agrees to pay Basic Rent to the Trustee hereinafter and in the Indenture
designated, for the account of Issuer and during
the Basic Term, in immediately available funds, for deposit in the
Principal and Interest Payment Account hereinafter and in the Indenture
established, on each Basic Rent Payment Date.
Section 3.2. Presentation of Bonds in Satisfaction of Rent. In the
event Tenant acquires any Outstanding Bonds, it may present the same to
Issuer for cancellation, and upon such cancellation, Tenant's obligation
to pay Basic Rent shall be reduced accordingly, but in no event shall
Tenant's obligation to pay Basic Rent be reduced in such a manner that
the Trustee shall not have on hand in the Principal and Interest Payment
Account, 30 days prior to the next succeeding Payment Date, funds
sufficient to pay the maturing principal of; redemption premium, if any,
and interest on Outstanding Bonds as and when the same shall become due
and payable in accordance with the provisions of the Indenture.
Section 3.3. Additional Rent. Within 30 days after receipt of
written notice thereof, Tenant shall pay any Additional Rent required to
be paid pursuant to this Lease.
Section 3.4. Rent Payable Without Abatement or Setoff. Tenant
covenants and agrees with and for the express benefit of Issuer and the
Bondowners that all payments of Basic Rent and Additional Rent shall be
made by Tenant as the same become due, and that Tenant shall perform all
of its obligations, covenants and agreements hereunder without notice or
demand and without abatement, deduction, setoff, counterclaim recoupment
or defense or any right of termination or cancellation arising from any
circumstance whatsoever, whether now existing or hereafter arising, and
irrespective of whether the Improvements shall have been acquired,
started or completed, or whether Issuer's interest in the Project or any
part thereof is defective or non-existent, and notwithstanding any
failure of consideration or commercial frustration of purpose, the
eviction or constructive eviction of Tenant, any Change of
Circumstances, any change in the tax or other laws of the United States
of America, the State, or any municipal corporation of either, any
change in Issuer's legal organization or status, or any default of
Issuer hereunder, and regardless of the invalidity of any action of
Issuer or any other event or condition whatsoever, and regardless of the
invalidity of any portion of this Lease, and Tenant hereby waives the
provisions of any statute or other law now or hereafter in effect
contrary to any of its obligations, covenants or agreements under this
Lease or which releases or purports to release Tenant therefrom. Nothing
in this Lease shall be construed as a waiver by Tenant of any rights or
claims Tenant may have against Issuer under this Lease or otherwise, but
any recovery upon such rights and claims shall be had from Issuer
separately, it being the intent of this Lease that Tenant shall be
unconditionally and absolutely obligated to perform fully all of its
obligations, agreements and covenants under this Lease (including the
obligation to pay Basic Rent and Additional Rent) for the benefit of the
Bondowners.
Section 3.5. Prepayment of Basic Rent. Tenant may at any time
prepay all or any part of the Basic Rent.
Section 3.6. Deposit of Rent by Trustee. As assignee of the Issuers
rights hereunder, the Trustee shall deposit, use and apply all payments
of Basic Rent and Additional Rent in accordance with the provisions of
this Lease and the Indenture.
ARTICLE IV
Section 4.1. Disposition of Original Proceeds; Project Fund. The
Original Proceeds shall be paid over to the Trustee for the account of
Issuer. The Trustee shall pay from such Original P~ into the Principal
and Interest Payment Account the full amount of any accrued interest
received upon such sale. The remainder of such proceeds shall be
deposited by the Trustee in the Project Fund to be used and applied as
provided in this Lease and the Indenture, except that Costs of Issuance
may be paid from the Project Fund without further order or
authorization.
ARTICLE V
Section 5.1. Acquisition of Improvements. Tenant shall prior to or
concurrently with the issuance of the Bonds, deliver to Issuer title to
the Land described in Schedule/e I and such of the 1997 Improvements as
are then completed, installed or in progress. Tenant shall also
concurrently with such conveyance make provisions for the discharge of
any liens or encumbrances incurred by it in connection with the
construction, installation or development of the 1997 Improvements other
than Permitted Encumbrances.
Section 5.2. Environmental Matters. Tenant acknowledges that it is
responsible for maintaining the Project in compliance with all
Environmental Laws. In the event that Xxxxxx does not expeditiously
proceed with any compliance action with respect to the Project lawfully
required by any local, state or federal authority under applicable
Environmental Law, Issuer, immediately after notice to Tenant, may elect
(but may not be required) to undertake such compliance. Any moneys
expended by Issuer in efforts to comply with any applicable
Environmental Law (including the cost of hiring consultants, undertaking
sampling and testing, performing any cleanup necessary or useful in the
compliance process and attorneys' fees) shall be due and payable as
Additional Rent hereunder with interest thereon at the average rate of
interest per annum on the Bonds, plus two (2) percentage points, from
the date such cost is incurred. There shall be unlimited recourse to
Tenant to the extent of any liability incurred by Issuer with respect to
any breaches of the provisions of this section.
Tenant shall and does hereby indemnify the Issuer, the Trustee and
the Bondowners and agrees to defend and hold them harmless from and
against all loss, cost, damage and expense (including, without
limitation, reasonable attorneys' fees and associated costs incurred in
the investigation, defense and settlement of claims) that they may
incur, directly or indirectly, as a result of or in connection with the
assertion against them or any of them of any claim relating to the
presence on, escape or removal from the Project of any hazardous
substance or other material regulated by any applicable Environmental
Law, or compliance with any applicable Environmental Law, whether
before, during or after the term of this Lease, including claims
relating to personal injury or damage to property.
Xxxxxx agrees to give immediate written notice to the Issuer and
the Trustee of any violation of any Environmental Law of which violation
Tenant has actual knowledge.
Section 5.3. Project Contracts. Prior to the delivery of this
Lease, Tenant may have entered into a contract or contracts with respect
to the acquisition and/or construction of the 1997 Improvements. Those
contracts, and any such contracts entered into by the Tenant or the
Issuer alter delivery of this Lease are hereinafter referred to as the
"Project Contracts." Prior to the delivery hereof, certain work has been
or may have been performed on the 1997 Improvements pursuant to said
Project Contracts or otherwise. Tenant hereby conveys, transfers and
assigns to Issuer all of Tenants interest in the Project Contracts and
Issuer hereby designates Tenant as Issuer's agent for the purpose of
executing and performing the Project Contracts. After the execution
hereof, Tenant shall cause the Project Contracts to be fully performed
by the contractor(s), subcontractor(s) and supplier(s) thereunder in
accordance with the terms thereof; and Tenant covenants to cause the
1997 Improvements to be acquired, constructed and/or completed in
accordance with the Project Contracts. Tenant warrants that the
construction and/or acquisition of the 1997 Improvements in accordance
with said Project Contracts will result in the 19997 Improvements being
suitable for use by Tenant as part of a "manufacturing facility." Any
and all amounts received by Issuer, Trustee or Tenant from any of the
contractors or other suppliers by way of breach of contract, refunds or
adjustments shall become a part of and be deposited in the Project Fund.
Section 5.4. Payment of Project Costs for Buildings and
Improvements. Issuer hereby agrees to pay for the acquisition or
construction of the 1997 Improvements or any repairs or replacements to
be made pursuant to Article XVIII of this Lease, but solely from the
Project Fund, and hereby authorizes and directs the Trustee to pay for
the same, but solely from the Project Fund, from time to time, while
Tenant is in compliance with the requirements of Section 6.1 hereof,
upon receipt by the Trustee of a certificate signed by the Authorized
Tenant Representative in the form set forth by Appendix A hereto which
is 'incorporated herein by reference. With regard to materials and/or
labor furnished to the Project at the order of Tenant without formal
contract, or by subcontract with Tenant acting as general contractor,
which could form the basis of a statutory mechanic's or subcontractor's
lien, the Trustee may disburse payment therefor upon receipt of releases
or waivers of statutory mechanic's or subcontractor's liens by all
vendors or subcontractors receiving payment or furnishing labor or
materials as a subcontractor of the vendor or subcontractor receiving
payment.
The sole obligation of Issuer under this paragraph shall be to
cause the Trustee to make such disbursements upon receipt of such
certificates. The Trustee may rely fully on any such directions and
shall not be required to make any investigation in connection therewith,
except that the Trustee shall investigate requests for reimbursements
directly to the Tenant and shall require such supporting evidence as
would be required by a reasonable and prudent trustee.
Section 5.5. Payment of Project Costs for Machinery and Equipment.
Issuer hereby agrees to pay for the purchase and acquisition of
machinery and equipment constituting a part of the 1997 Improvements,
but solely from the Project Fund, from time to time, upon receipt by the
Trustee of a certificate signed by the Authorized Tenant Representative
in the form provided by Appendix A hereto which is incorporated herein
by reference and accompanied by the following specific information:
(a) Name of Seller;
(b) Name of the manufacturer;
(c) A copy of the seller's invoice, purchase order or other like
document evidencing the purchase by Tenant of such machinery and/or
equipment;
(d) Common descriptive name of machinery or equipment;
(e) Manufacturer's or seller's technical description of machinery or
equipment;
(f) Capacity or similar designation;
(g) Serial number, if any; and
(h) Model number, if any.
The sole obligation of Issuer under this Section shall be to cause the
Trustee to make such disbursements upon receipt of said certificates.
The Trustee may rely fully on any such certificate and shall not be
required to make any independent investigation in connection therewith,
except that the Trustee shall investigate requests for reimbursements
directly to Tenant and shall require such supporting evidence as would
be required by a reasonable and prudent trustee. All machinery,
equipment and/or personal property acquired, in whole or in part, from
funds deposited in the Project Fund pursuant to this section shall be a
part of the Project.
Section 5.6. Completion of Project Additions. Issuer and Tenant
each covenant and agree to proceed diligently to complete the 1997
Improvements on or before the Completion Date. Upon completion of the
1997 Improvements, Tenant shall cause the Authorized Tenant
Representative to deliver a Certificate of Completion, in the form
substantially as attached hereto as Appendix B, to the Trustee. In the
event funds remain on hand in the Project Fund on the date the
Certificate of Completion is furnished to Trustee or on the Completion
Date, whichever shall first occur, such remaining funds shall be
transferred by the Trustee to the Principal and Interest Payment Account
on the earlier of receipt of the Certificate of Completion or the
Completion Date and shall be applied in accordance with the provisions
of the Indenture.
Section 5.7. Deficiency of Project Fund. If the Project Fund shall
be insufficient to pay fully all Project Costs and to fully complete the
1997 Improvements, lien free (except for Permitted Encumbrances), Tenant
covenants to pay the full amount of any such deficiency by making
payments directly to the contractors and to the suppliers of materials,
machinery, equipment, property and services as the same shall become
due, and Tenant shall save Issuer and Trustee whole and harmless from
any obligation to pay such deficiency.
Section 5.8. Right of Entry by Issuer. The duly authorized agents
of Issuer shall have the right at any reasonable time and upon
reasonable notice to Tenant prior to the completion of the
1997 Improvements to have access to the Project or any part thereof for
the purpose of inspecting the acquisition, installation or construction
thereof.
Section 5.9. Machinery and Equipment Purchased by Tenant. If no
part of the purchase price of an item of machinery, equipment or
personal property is paid from funds deposited in the Project Fund
pursuant to the terms of this Lease, then such item of machinery,
equipment or personal property shall not be deemed a part of the
Project.
Section 5.10. Project Property of Issuer. All Improvements, all
work and materials on Improvements as such work progresses, any Project
Additions, anything under this Lease which becomes, is deemed to be, or
constitutes a part of the Project, and the Project as repaired, rebuilt,
rearranged restored or replaced by Tenant under the provisions of this
Lease, except as otherwise specifically provided herein, shall
immediately when erected or installed become the property of Issuer. Any
Improvements which become a part of the real estate as fixtures shall
remain separate from Tenant's property unless and until purchased by
Tenant from Issuer as provided in this Lease.
Section 5.11. Kansas Retailers' Sales Tax.
(a) The parties have entered into this Lease in contemplation
that, under the existing provisions of K.S.A. 79-3606, subsections ((b))
and (d) and other applicable laws, sales of tangible personal property
or services purchased in connection with construction of the 1997
Improvements are entitled to exemption from the tax imposed by the
Kansas Retailers' Sales Tax Act The parties agree that Issuer shall,
upon the request of and with Tenant's assistance, promptly obtain from
the State and furnish to the contractors and suppliers an exemption
certificate for the construction of the Improvements. Tenant covenants
that said exemption shall be used only in connection with the purchase
of tangible personal property or services becoming a part of the
Project.
ARTICLE VI
Section 6.1. Insurance as a Condition to Disbursement. As a
condition precedent to payment of Costs of Issuance or disbursement of
funds from the Project Fund pursuant to Article V hereunder, the
following policies of insurance shall be in full force and effect:
(a) Comprehensive general liability insurance covering
Tenant's operations in or upon the Project (including coverage for
losses arising from the ownership, maintenance, use or operation of any
automobile, track or other vehicle in or upon the Project) under which
Tenant shall be named as insured and Issuer and Trustee shall be named
as additional insureds, as their interests in the Project shall appear,
in an amount not less than the then maximum liability of a governmental
entity for claims arising out of a single occurrence as provided by the
Kansas tort claims act or other similar future law (currently $500,000
per occurrence); which policy shall provide that such insurance may not
be canceled by the issuer thereof without at least 30 days' advance
written notice to Issuer, Tenant and Trustee, such insurance to be
maintained throughout the life of this Lease; and
(b) Statutory workers' compensation insurance; and
(c) With regard to new building Improvements constituting a
part of the Project Additions, insurance insuring such Improvements
while under construction against fire, lightning and all other risks
covered by the broadest form extended coverage endorsement then and from
time to time thereafter in use in the State to their Full Insurable
Value of such Improvements. Such insurance coverage shall name Xxxxxx as
insured and Issuer and the Trustee as named additional insureds and loss
payees, as their respective interests appear, and all Net Proceeds
received under such policy or policies by Issuer or Tenant shall be paid
over to the Trustee and be applied as set forth in Article XVIII hereof;
and
(d) With regard to new building Improvements constituting a
part of the Project Additions and constructed by general contractors
other than Tenant, performance and labor and material payment bonds and
statutory bonds (with sureties approved by the Issuer) with respect to
applicable Project Contracts and in the full amount of such Contracts.
Said bonds shall name Issuer, Tenant and the Trustee as obligees. All
payments received by Issuer, Tenant and/or the Trustee under said bonds
shall become a part of and be deposited in the Project Fund. In lieu of
furnishing the payment, performance and statutory bonds required by this
paragraph, with the consent of the Issuer and the Trustee, which will
not be unreasonably withheld, Original Proceeds may be disbursed to pay
Project Costs upon receipt by the Trustee of waivers of statutory
mechanic's and materialmen's liens signed by the contractor and all
vendors and subcontractors being paid from such disbursement, in the
manner and to the extent required by Section 5.4 of this Lease for
disbursements made for materials or labor furnished to the Project site
by direct contract with the Tenant.
Section 6.2. Insurance After Completion. Tenant shall and covenants
and agrees that it will, prior to or simultaneously with the expiration
of the insurance provided for in the preceding section and throughout
the Basic Term at its sole cost and expense, keep the Improvements
continuously insured against loss or damage by fire, lightning and all
other risks covered by the broadest form extended coverage insurance
endorsement then in use in the State in an amount equal to the Full
Insurable Value thereof in such insurance company or companies as it may
select and shall at all times maintain general accident and public
liability insurance required pursuant to Section 6.1 (a).
Section 6.3. General Insurance Provisions.
(a) Prior to the expiration dates of the expiring policies, or
within 30 days of renewal, certificates of the policies provided for in
this Article shall be delivered by Tenant to Trustee. All policies of
such insurance and all renewals thereof shall name Tenant as insured and
Issuer and the Trustee as additional named insureds and loss payees as
their respective interests may appear, shall contain a provision that
such insurance may not be canceled or amended by the issuer thereof
without at least thirty (30) days' written notice to Issuer, Tenant and
the Trustee and shall be payable to the Issuer, Tenant and Trustee as
their respective interests appear. Issuer and Tenant each hereby agree
to do anything necessary, be it the endorsement of checks or otherwise,
to cause any such payment to be made to the Trustee, as long as such
payment is required by this Lease to be made to the Trustee. Any charges
made by the Trustee for its services shall be paid by Tenant.
(b) Each policy of insurance hereinabove referred to shall be
issued by an insurance company qualified under the laws of the State to
assume the risks covered therein, except that Tenant may be serf-insured
as to any required insurance coverages under a program of self-insurance
approved by the State Commissioner of Insurance or other applicable
State regulatory authority.
(c) Certificates of insurance evidencing the insurance
coverages herein required shall be filed with the Trustee continuously
during the term of this Lease.
(d) Each policy of insurance hereinabove referred to may be
subject to a reasonable deductible or self-insured retention.
(e) Each policy of insurance required herein may be provided
through blanket policies maintained by Xxxxxx.
(f) Anything in this Lease to the contrary notwithstanding,
Tenant shall be liable to Issuer and Trustee pursuant to the provisions
of this Lease or otherwise, as to any loss or damage which may have been
occasioned by the negligence of Tenant, its agents, licensees,
contractors, invitees or employees.
Section 6.4. Evidence of Title. Tenant shall furnish, from the
Project Fund or from Tenant's own funds, a policy of owner's title
insurance, insuring Issuer's fee simple title to the Land, subject to
Permitted Encumbrances, in an amount equal to $ the Tenant elects to
furnish the title insurance policy issued concurrently with the issuance
of the Existing Bonds and covering the Original Project, then Tenant
will also furnish an endorsement to the original policy or other title
evidence acceptable to the Issuer and the Original purchaser showing
status of rifle to the Land at the date of issuance of the Series 1997
Bonds. Issuer and Tenant agree that any and all proceeds therefrom
during the Basic Term (a) if received before the completion of the
building Improvements shall be paid into and become a part of the
Project Fund, (b) if received thereafter but before the Bonds and
interest thereon have been paid in full, shall be paid into and become a
part of the Principal and Interest Payment Account, and (c) if received
after the Bonds and interest thereon have been paid in full, shall
belong and be paid to Tenant.
ARTICLE VII
Section 7.1. Impositions. Tenant shall, during the Term of this
Lease, bear, pay and discharge, before the delinquency thereof, any and
all Impositions. In the event any Impositions may be lawfully paid in
installments, Tenant shall be required to pay only such installments
thereof as become due and payable during the life of this Lease as and
when the same become due and payable.
Section 7.2. Receipted Statements. Unless Tenant exercises its
right to contest any Impositions in accordance with Section 7.4 hereof,
Tenant shall, within 30 days after the last day for payment, without
penalty or interest, of an Imposition which Tenant is required to bear,
pay and discharge the same pursuant to the terms hereof, and deliver to
Issuer a photostatic or other suitable copy of the statement issued
therefor duly receipted to show the payment thereof.
Section 7.3. Issuer May Not Sell. Issuer covenants that except
pursuant to Article XX hereof after an Event of Default has occured and
is continuing, without Tenant's written consent, unless required by law,
it will not sell or otherwise part with or encumber its ownership
interest in the Project at any time during the Term of this Lease.
Section 7.4. Contest of Impositions. Tenant shall have the right,
in its own or Issuer's name or both, to contest the validity or amount
of any Imposition by appropriate legal proceedings instituted at least
10 days before the Imposition complained of becomes delinquent if, and
provided, Tenant (i) before instituting any such contest, shall give
Issuer and Trustee written notice of its intention to do so and, if
requested in writing by Issuer, shall deposit with the Trustee a surety
bond of a surety company acceptable to Issuer as surety, in favor of
Issuer, or cash, in a sum of at least the amount of the Imposition so
contested, assuring the payment of such contested Impositions together
with all interest and penalties to accrue thereon and court costs, and
(ii) diligently prosecutes any such contest and at all times effectively
stays or prevents any official or judicial sale therefor, under
execution or otherwise, and (iii) promptly pays any final judgment
enforcing the Imposition so contested and thereafter promptly procures
record release or satisfaction thereof. Tenant shall hold Issuer whole
and harmless from any costs and expenses Issuer may incur related to any
such contest due to the Issuer's ownership of the Project.
Section 7.5. Ad Valorem Taxes. The parties acknowledge that under
the existing provisions of K.S.A. 79-201a, as amended, the 1997
Improvements acquired, constructed or purchased with the proceeds of the
Bonds (except such property used for certain retail uses) is entitled to
exemption from ad valorem taxation for a period up to 10 calendar years
after the calendar year in which the Bonds are issued, provided the
Issuer has complied with certain notice, hearing and procedural
requirements established by law, and proper application has been made.
Issuer will, at Tenant's request, with information furnished by Tenant
and Trustee, make all necessary filings regarding the application for
such ad valorem tax exemption on or before March 1 in the calendar year
following the calendar year in which the Bonds were issued, and will
renew said application from time to time and take any other action as
may be necessary to maintain such ad valorem tax exemption in full force
and effect, in accordance with K.S.A. 79-201a, 79-210 et seq. and the
requirements of the State Board of Tax Appeals. If it becomes necessary
to litigate the issue of availability or applicability of the ad valorem
tax exemption, Issuer will cooperate fully with Tenant in pursuing such
litigation, but all litigation costs and reasonable attorney fees must
be paid by Xxxxxx, either directly or as Additional Rent.
ARTICLE VIII
Section 8.1. Use of Project. Subject to the provisions of this
Lease, Tenant shall have the right to use the Project for any and all
purposes allowed by law and contemplated by the constitution of the
State and the Act, as long as they are consistent with Code limitations
on use of property purchased with Original Proceeds. Tenant shall comply
in all material respects with all statutes, laws, ordinances, orders,
judgments, decrees, regulations, directions and requirements of all
federal, state, local and other governments or governmental authorities,
now or hereafter applicable to the Project or to any adjoining public
ways, as to the manner of use or the condition of the Project or of
adjoining public ways. Tenant shall comply with the mandatory
requirements, roles and regulations of all insurers under the policies
required to be carried under the provisions of this Lease. Tenant shall
pay all costs, expenses, claims, fines, penalties and damages that may
in any manner arise out of, or be imposed as a result of, the failure of
Tenant to comply with the provisions of this Article.
ARTICLE IX
Section 9.1. Sublease by Tenant. Tenant may sublease the Project to
a single party or entity, with the prior written consent of Issuer. In
the event of any such subleasing, Tenant shah remain fully liable for
the performance of its duties and obligations hereunder, and no such
subleasing and no dealings or transactions between Issuer or the Trustee
and any such subtenant shall relieve Tenant of any of its duties and
obligations hereunder.
Any such subleases shall include the following provisions:
(1) No subtenant shall be permitted to use more than 10% of
the Project or any part thereof, without the prior written consent of
Tenant and the Trustee and an approving opinion of Bond Counsel, for
retail food and beverage service, automobile sales or service, or the
provision of recreation or entertainment;
(2) No subtenant shall be permitted to use any portion of the
Project for any private or commercial golf course, country club, massage
parlor, tennis club, skating facility (including roller skating,
skateboard and ice skating), racquet sports facility (including any
handball or racquetball court), hot tub facility, suntan facility,
racetrack, airplane, skybox or other private luxury box, any health club
facility, any facility primarily used for gambling, or any store the
principal business of which is the sale of alcoholic beverages for
consumption off premises; and
(3) Any subtenant shall use the Project only as a
"manufacturing facility" within the definition of Section 144(a)(12) of
the Code, unless the written opinion of Bond Counsel is obtained to the
effect that the proposed use of the Project will not constitute an Event
of Taxability.
Any such sublease shall be subject and subordinate in all respects
to the provisions of this
Lease.
Section 9.2. Assignment by Tenant. Tenant may assign its interest
in this Lease with the prior written consent of Issuer. In the event of
any such assignment, Tenant shall remain fully liable for the
performance of its duties and obligations hereunder, except to the
extent hereinafter provided, and no such assignment and no dealings or
transactions between Issuer or the Trustee and any such assignee shall
relieve Tenant of any of its duties and obligations hereunder, except
as may be otherwise provided in the following section.
Section 9.3. Release of Tenant. If, in connection with an
assignment by Tenant of its interest in this Lease, (1) the Issuer and
the Owners of at least seventy-five percent (75%) in aggregate principal
amount of all Outstanding Bonds (including the Existing Bonds and any
Additional Bonds) shall file with the Trustee and the Original Purchaser
their prior written consent to such assignment, and (2) the proposed
assignee shall expressly assume and agree to perform all of the
obligations of Tenant under this Lease; then Tenant shall be fully
released from all obligations accruing hereunder after the date of such
assignment.
Section 9.4. Mergers and Consolidations. Notwithstanding the
provisions of Sections 9.2 and 9.3 above, if Tenant shall assign or
transfer, by operation of law or otherwise, its interests in this Lease
in connection with a transaction involving the merger or consolidation
of Tenant with or into, or a sale, lease or other disposition of all or
substantially all of the property of Tenant as an entirety to another
person, association, corporation or other entity, and (1) Issuer shall
file with the Trustee its prior written consent to such assignment,
transfer or merger, (2) the proposed assignee, transferee or surviving
corporation shall expressly assume and agree to perform all of the
obligations of Tenant under this Lease and the Guaranty Agreement with
regard to the Bonds, and (3) Tenant shall furnish the Trustee and Issuer
with evidence in the form of financial statements accompanied by the
certificate of an independent certified public accountant of recognized
standing establishing that the net worth of such proposed assignee,
transferee or surviving corporation immediately following such
assignment, transfer or merger will be at least equal to the net worth
of Tenant as shown by the most recent financial statement of Tenant
furnished to Trustee pursuant to this Lease; then and in such event
Tenant shall be fully released from all obligations accruing hereunder
after the date of such assignment, transfer or merger.
Section 9.5. Covenant Against Other Assignments. Tenant will not
assign or in any manner transfer its interests under this Lease, nor
will it suffer or permit any assignment thereof by operation of law,
except in accordance with the limitations, conditions and requirements
herein set forth.
ARTICLE X
Section 10.1. Repairs and Maintenance. Tenant covenants and agrees
that it will, during the Term of this Lease, at its own expense, keep
and maintain the Project and all parts thereof in good condition and
repair, including but not limited to the furnishing of all parts,
mechanisms and devices required to keep the machinery, equipment and
personal property constituting a part of the Project in good mechanical
and working order.
Section 10.2. Removal, Disposition and Substitution of Machinery or
Equipment. Tenant shall have the right, provided Tenant is not in
default in the payment of Basic Rent and Additional Rent, to remove and
sell or otherwise dispose of any machinery or equipment which constitutes
a part of the Project and is no longer used by Tenant or, in the opinion
of Tenant, are no longer useful to Tenant in its operations (whether by
reason of changed processes, changed techniques, obsolescence, depreciation
or otherwise), subject, however, to the following conditions:
(1) With respect only to such items of machinery or equipment
that originally cost $100,000 or more, to the following:
(a) Prior to any such removal, Tenant shall prepare a certificate
signed by the Authorized Tenant Representative (i) containing a complete
description, including the make, model and serial numbers, if any, of
any machinery and equipment constituting a part of the Project which it
proposes to remove, (ii) staling the reason for such removal, (iii)
staling what disposition, if any, of the machinery or equipment is to be
made by Tenant after such removal and the names of the party or parties
to whom such disposition is to be made and any consideration to be
received by Tenant therefor, if any, and (iv) setting forth the original
cost of such machinery or equipment.
(b) Prior to any such removal, Tenant shall furnish the certificate
to the Trustee and pay any consideration received for such machinery or
equipment as set forth in said certificate to the Trustee and the
Trustee shall deposit such amount in the Principal and Interest Payment
Account. Any money deposited in the Principal and Interest Payment
Account pursuant to this Section shall be used to redeem Outstanding
Bonds at their earliest optional redemption date.
(c) Tenant may remove any machinery or equipment constituting a
part of the Project without complying with the provisions of
subparagraph (b) above; provided, however, that Tenant shall promptly
replace any such machinery or equipment so removed with machinery or
equipment of the same or a different kind but which performs the same
function as the machinery or equipment so removed, and the machinery or
equipment so acquired by Tenant to replace such machinery or equipment
thereafter shall be deemed a part of the Project. Tenant shall maintain
accurate records of such replacements and upon request shall prepare a
certificate of the Authorized Tenant Representative setting forth a
complete description, including make, model and serial numbers, if any,
of the machinery or equipment which Tenant has acquired to replace the
machinery or equipment so removed by Xxxxxx, stating the cost thereof
and the respective acquisition dates.
(2) With respect to such items of machinery or equipment that
originally cost less than $100,000, Tenant shall deliver to the Trustee
a certificate setting forth the facts provided for in subparagraph
(1)(a) above. In no event shall Tenant pursuant to this Subsection (2)
remove items of machinery or equipment having an aggregate original cost
of more than $350,000.
All machinery or equipment constituting a part of the Project and
removed by Tenant pursuant to this Section shall become the absolute
property of Tenant and may be sold or otherwise disposed of by Tenant
subject to the certification requirements of this Section. In all cases,
Tenant shall pay all the costs and expenses of any such removal and
shall immediately repair at its expense all damage to the Project
mused thereby. Tenant's rights under this Article to remove machinery
or equipment constituting a part of the Project is intended only
to permit Tenant to maintain an efficient operation by the removal
of such machinery and equipment no longer suitable to Tenant's use
for any of the reasons set forth in this Section and such right is not
to be construed to permit a removal under any other circumstances and
shall not be construed to permit the wholesale removal of such
machinery or equipment by Tenant.
ARTICLE XI
Section 11.1. Alteration of Project. Tenant shall have and is
hereby given the right, at its sole cost and expense, to make such
changes and alterations in and to any part of the Project as Tenant from
time to time may deem necessary or advisable without consent of the
Issuer or the Trustee; provided, however, Tenant shall not make any
major change or alteration which will materially adversely affect the
intended use or structural strength of any part of the Improvements. All
changes and alterations made by Tenant pursuant to the authority of this
Article shall (a) be made in a workmanlike manner and in strict
compliance with all laws and ordinances applicable thereto, (b) when
commenced, be prosecuted to completion with due diligence, and (c) when
completed, shall be deemed a part of the Project; provided, however,
that additions of machinery, equipment and/or personal property of
Tenant, not purchased or acquired from p~ of the Bonds and not
constituting a part of the Project shall remain the separate property of
Tenant and may be removed by Tenant at any time; provided further,
however, that all such additional machinery, equipment and/or personal
property which remains in the Project alter the termination of this
Lease for any cause other than the purchase of the Project pursuant to
Article XVII hereof shall, upon and in the event of such termination,
become the separate and absolute property of Issuer.
ARTICLE XII
Section 12.1. Additional Improvements. Tenant shall have and is
hereby given the right, at its sole cost and expense, to construct on
the Land or within areas occupied by the Improvements, or in airspace
above the Project, such additional buildings and improvements as Tenant
from time to time may deem necessary or advisable. All additional
buildings and improvements constructed by Tenant pursuant to the
authority of this Article shall, during the Term, remain the property of
Tenant and may be added to, altered or razed and removed by Tenant at
any time during the Term hereof. Tenant covenants and agrees (a) to make
any repairs and restorations required to repair any damage to the
Project because of the construction of, addition to, alteration or
removal of, said additional buildings or improvements, (b) to keep and
maintain said additional buildings and improvements in good condition
and repair, ordinary wear and tear excepted, and (c) to promptly and
with due diligence either raze and remove from the Land, in a good,
workmanlike manner, or repair, replace or restore such of said
additional buildings or improvements as may from time to time be damaged
by fire or other casualty, and (d) that all additional buildings and
improvements constructed by Tenant pursuant to this Article which remain
in place after the termination of this Lease for any cause other than
the purchase of the Project pursuant to Article XVII hereof shall, upon
and in the event of such termination, become the separate and absolute
property of Issuer; provided, however, Tenant shall have the fight,
prior to or within 60 days after the termination of this Lease, to
remove from or about the Project the buildings,, improvements,
machinery, equipment, personal property, furniture and trade fixtures
which Tenant owns under the provisions of this Lease and are not a
part of the Project.
ARTICLE XIII
Section 13.1. Securing of Permits and Authorizations. Tenant shall
not do or permit others under its control to do any work in or in
connection with the Project or related to any repair, rebuilding,
restoration, replacement, alteration of or addition to the Project, or
any part thereof, unless all requisite municipal and other governmental
permits and authorizations shall have first been procured and paid for.
All such work shall be done in a good and workmanlike manner and in
compliance with all applicable building, zoning and other laws,
ordinances, governmental regulations and requirements and in accordance
with the requirements, rules and regulations of all insurers under the
policies required to be carded under the provisions of this Lease.
Section 13.2. Mechanic's Liens. Tenant shall not do or suffer
anything to be done whereby the Project, or any part thereof, may be
encumbered by any mechanic's or other similar lien and if, whenever and
so often as any mechanic's or other similar lien is filed against the
Project, or any part thereof, Tenant shall discharge the same of record
within 30 days after the date of filing. Notice is hereby given that
Issuer does not authorize or consent to and shall not be liable for any
labor or materials furnished to Tenant or anyone claiming by, through or
under Tenant upon credit, and that no mechanic's or similar liens for
any such labor, services or materials shall attach to or affect the
estate of Issuer in and to the Project, or any part thereof.
Section 13.3. Contest of Liens. Tenant, notwithstanding the above,
shall have the right to contest any such mechanic's or other similar
lien if within said 30-day period stated above it (I) notifies Issuer
and Trustee in writing of its intention so to do, and if requested by
Issuer, deposits with the Trustee a surety bond issued by a surety
company acceptable to Issuer as surety, in favor of Issuer or cash, in
the amount of the lien claim so contested, indemnifying and protecting
Issuer from and against any liability, loss, damage, cost and expense of
whatever kind or nature growing out of or in any way connected with said
asserted lien and the contest thereof, and (ii) diligently prosecutes
such contest, at all times effectively staying or preventing any
official or judicial sale of the Project or any part thereof or interest
therein, under execution or otherwise, and (iii) promptly pays or
otherwise satisfies any final judgment adjudging or enforcing such
contested lien claim and thereafter promptly procures record release or
satisfaction thereof.
Section 13.4. Utilities. All utilities and utility services used by
Tenant in, on or about the Project shall be contracted for by Tenant in
Tenant's own name and Tenant shall, at its sole cost and expense,
procure any and all permits, licenses or authorizations necessary in
connection therewith.
ARTICLE XIV
Section 14.1. Indemnity. Tenant shall and hereby covenants and
agrees to indemnify, protect, defend and save Issuer and the Trustee
harmless from and against any and all claims, demands, liabilities and
costs, including attorneys' fees, arising from damage or injury, actual
or claimed, of whatsoever kind or character, to property or persons,
occurring or allegedly occurring in, on or about the Project during the
Term hereof, and upon timely written notice from Issuer or the Trustee,
Tenant shall defend Issuer and the Trustee in any action or proceeding
brought thereon; provided, however, that nothing contained in this
Section shall be construed as requiring Tenant to indemnify Issuer or
the Trustee for any claim resulting from any willful or malicious act or
omission of Issuer or the Trustee, or their respective agents and
employees. The Tenant also covenants and agrees, at its expense, to pay
and to indemnify the Issuer and Trustee from and against all costs,
expenses and charges, including reasonable counsel fees (to the extent
permitted by law), incurred in obtaining possession of the Project after
default of the Tenant, or in enforcing any covenant or agreement of the
Tenant contained in this Lease, the Indenture or the Guaranty.
ARTICLE XV
Section 15.1. Access to Project. Issuer, for itself and its duly
authorized representatives and agents, including Trustee, reserves the
right to enter the Project at all reasonable times during usual business
hours throughout the Term, upon reasonable notice, for the purpose of
(a) examining and inspecting the same, (b) performing such work as may
be made necessary by reason of Xxxxxx's default under any of the
provisions of this Lease, and (c) while an Event of Default is
continuing hereunder, for the purpose of exhibiting the Project to
prospective purchasers or lessees. Issuer may, during the progress of
said work mentioned in (b) above, keep and store on the Project all
necessary materials, supplies and equipment and shall not be liable for
inconvenience, annoyances, disturbances, loss of business or other
damage suffered by reason of the performance of any such work or the
storage of such materials, supplies and equipment.
ARTICLE XVI
Section 16.1. Option to Extend Term. Tenant shall have the option
to extend the Basic Term of this Lease for the Additional Term provided
that (a) Tenant shall give Issuer written notice of its intention to
exercise each such option at least 30 days prior to the expiration of
the Basic Term and (b) Tenant is not in default hereunder in the payment
of Basic Rent or Additional Rent at the time it gives Issuer such notice
or at the time the Additional Term commences. In the event Tenant
exercises such option, the terms, covenants, conditions and provisions
set forth in this Lease shall be in full force and effect and binding
upon Issuer and Tenant during the Additional Term except that the Basic
Rent during any extended term herein provided for shall be the sum of
$100.00 per year, payable in advance on the first Business Day of such
Additional Term.
ARTICLE XVII
Section 17.1. Option to Purchase Project. Subject to the provisions
of this Article, Tenant shall have the option to purchase the Project at
any time during the Term hereof and for 120 days thereafter. Tenant
shall exercise its option by giving Issuer written notice of Xxxxxx's
election to exercise its option and specifying the date, time and place
of closing, which date (the "Closing Date") shall neither be earlier
than 30 days nor later than 180 days after the notice is given. Tenant
may not, however, exercise such option if Tenant is in Default hereunder
on the Closing Date unless all Defaults are cured upon payment of the
purchase price specified in Section 17.2.
Section 17.2. Quality of Title and Purchase Price. If said notice
of election to purchase is given, Issuer shall sell and convey all of
its interests in the Project to Tenant on the Closing Date free and
clear of all liens and encumbrances except (a) Permitted Encumbrances,
(b) those to which title was subject on the date of conveyance to Issuer
of the Land, or to which title became subject with Tenant's written
consent, or which resulted from any failure of Tenant to perform any of
its covenants or obligations under this Lease, (c) taxes and
assessments, general and special, if any, and (d) the fights of any
party having condemned or who is attempting to condemn title to, or the
use for a limited period of, all or any part of the Project, for a price
determined as follows (which Xxxxxx agrees to pay in cash at the time of
delivery of Issuer's deed or other instrument or instruments of transfer
of the Project to Tenant as hereinafter provided):
(i) The full amount which is required to provide Issuer and
the Trustee with funds sufficient, in accordance with the provisions of
the Indenture, to pay at maturity or to redeem and pay in full (A) the
principal of all of the Outstanding Bonds, (B) all interest due thereon
to date of maturity or redemption, whichever first occurs, and (C) all
costs, expenses and premiums incident to the redemption and payment of
said Bonds in full, plus
(ii) $100.00.
Nothing in this Article shall release or discharge Tenant from its duty
or obligation under this Lease to make any payment of Basic Rent or
Additional Rent which, in accordance with the terms of this Lease,
becomes due and payable prior to the Closing Date, or its duty and
obligation to fully perform and observe all covenants and conditions
herein stated to be performed and observed by Tenant prior to the
Closing Date.
Section 17.3. Closing of Purchase. On the Closing Date Issuer shall
deliver to Tenant its special warranty deed and/or other appropriate
instrument or instruments of conveyance or assignment, properly executed
and conveying the Project to Tenant free and clear of all liens and
encumbrances except as set forth in the preceding section above, or
conveying such other title to the Project as may be acceptable to
Tenant, and Tenant shall pay the full purchase price for the Project as
follows: (a) the amount specified in clause (I) of Section 17.2 shall be
paid to the Trustee for deposit in the Principal and Interest Payment
Account to be used to pay or redeem Bonds and the interest thereon as
provided in the Indenture, and (b) the amount specified in clause (ii)
of said Section 17.2 shall be paid to Issuer; provided, however, nothing
herein shall require Issuer to deliver its appropriate instrument or
instruments of assignment or conveyance to Tenant until after all duties
and obligations of Tenant under this Lease to the date of such delivery
have been fully performed and satisfied. Upon the delivery to Tenant of
Issuer's appropriate instrument or instruments of assignment or
conveyance and payment of the purchase price by Tenant, this Lease
shall ipso facto terminate, subject to the provisions of Section 20.2 hereof.
Section 17.4. Effect of Failure to Complete Purchase. If, for any
reason, the purchase of the Project by Tenant pursuant to valid notice
of election to purchase is not effected on the Closing Date, this Lease
shall be and remain in full force and effect according to its terms the
same as though no notice of election to purchase had been given, except
that if such purchase is not effected on the Closing Date because Issuer
does not have or is unable to convey to Tenant such rifle to the Project
as Tenant is required to accept, the Issuer shall use its best efforts
to cure any such defect in its title to the Project. In the event the
Issuer is unable to cure such defect in its title to the Project, or if
Issuer's failure to close would be a breach of its obligations
hereunder, Tenant shall have the right to cancel this Lease forthwith
if, but only if, the principal of and interest on the Bonds and all
costs incident to the redemption and payment of the Bonds have been paid
in full. Tenant shall also have the right to exercise any legal or
equitable remedies, in its own name or in the name of the Issuer, to
obtain acceptable title to the Project.
Section 17.5. Application of Condemnation Awards if Tenant
Purchases Project. The right of Tenant to exercise its option to
purchase the Project under the provisions of this Article shall remain
unimpaired notwithstanding any condemnation of title to, or the use for
a limited period of, all or any part of the Project. If Tenant shall
exercise its said option and pay the purchase price as provided in this
Article, all of the condemnation awards received by Issuer after the
payment of said purchase price, less all attorneys' fees and other
expenses and costs incurred by Issuer as the owner of the Project in
connection with such condemnation, shall belong and be paid to Tenant.
Section 17.6. Option to Purchase Unimproved Portions of Land.
Tenant shall have the option to purchase at any time and from time to
time during the Term any vacant part or vacant parts of the unimproved
Land constituting a part of the Project; provided, however, Tenant shall
furnish Issuer and Trustee with a certificate of an Authorized Tenant
Representative, dated not more than thirty (30) days prior to the date
of the purchase and stating that, in the opinion of the Authorized
Tenant Representative, (a) the portion of said Land with respect to
which the option is exercised is not needed for the operation of the
Project for the purposes herein stated and (b) the purchase will not
impair the usefulness or operating efficiency or materially impair the
value of the Project and will not destroy or materially impair the means
of ingress thereto and egress therefrom. Tenant shall exercise this
option by giving Issuer and Trustee written notice of Xxxxxx's election
to exercise its option and specifying the legal description and the
date, time and place of closing, which date shall neither be earlier
than 45 days nor later than 60 days after the notice is given, and (c)
specifying the appraised current fair market value of the portions of
the Land with respect to which Tenant's option is exercised as
determined by an independent, qualified appraiser whose report shall be
furnished to the Trustee together with Xxxxxx's notice of election to
purchase and (d) a certificate signed by the chief executive or chief
financial officer of Tenant stating that no event has occurred and is
continuing which, with notice or lapse of time or both, would constitute
an Event of Default; provided, however, that Tenant may not exercise
this option if there has occurred and is continuing any event which,
with notice or lapse of time or both, would constitute an Event of
Default at the time said notice is given and may not purchase said real
property on the specified closing date if any such event has occurred
and is continuing on said date unless all defaults are cured. The
option hereby given shall include the right to purchase a perpetual
easement for right-of-way to and from the public roadway and the right
to purchase such land as is necessary to assure that there will always
be access between the real property purchased pursuant to these Section
I7.6 through 17.10 and the public roadway.
Section 17.7. Quality of Title - Purchase Price. If said notice of
election to purchase is given as provided in Section 17.6 Issuer shall
convey the real property described in Tenant's notice to Tenant on the
specified date free and clear of all liens and encumbrances except (I)
Permitted Encumbrances, (ii) those to which the title was subject on the
date of conveyance to Issuer of the Land, or to which title became
subject with Tenants written consent, or which resulted from any failure
of Tenant to perform any of its covenants or obligations under this
Lease, (iii) taxes and assessments, general and special, if any, and
(iv) the interests of any party having condemned or who is attempting to
condemn title to, or the use for a limited period of, all or any part of
the real property described in Xxxxxx's notice. The purchase price shall
be an amount equal to the then current fair market value thereof, as
determined with reference to the independent appraiser's report
furnished to the Trustee or the original cost to Xxxxxxx Industries,
Inc., whichever is less.
Section 17.8. Closing of Purchase. If Issuer has title to such vacant
real property free and clear of all liens and encumbrances except as
stated above or has such other title to the such real property as may be
acceptable to Tenant, then on the specified date, Issuer shall deliver
to Tenant its special warranty deed, properly executed and conveying
such real property to Tenant free and clear of all liens and
encumbrances except as stated above, and Tenant shall pay the purchase
price for such real property, said purchase price to be paid to the
Trustee for the account of the Issuer and deposited by the Trustee in
the Principal and Interest Payment Account and shall be used to redeem
Bonds on any date the Bonds are subject to optional redemption as
provided in the Indenture. Nothing herein shall require Issuer to
deliver its special warranty deed to Tenant until after all duties and
obligations of Tenant under this Lease to the date of such delivery have
been fully performed and satisfied.
Section 17.9. Effect of Purchase on Lease. The exercise by Tenant
of the option granted under these Sections 17.6 to 17.10 and the
purchase and sale and conveyance of a portion or portions of the Land
constituting a part of the Project pursuant hereto shall in no way
whatsoever affect this Lease, and all the terms and provisions hereof
shall remain in full force and effect the same as though no notice of
election to purchase had been given, and specifically, but not in
limitation of the generality of the foregoing, exercise of such option
shall not affect, alter, diminish, reduce or xxxxx Xxxxxx's obligations
to pay all Basic Rent and Additional Rent required hereunder.
Section 17.10. Effect of Failure to Complete Purchase. If, for any
reason whatsoever, the purchase by Tenant of the real property described
in said notice is not effected on the specified date, this Lease shall
be and remain in full force and effect according to its terms the same
as though no notice of election to purchase had been given.
ARTICLE XVIII
Section 18.1. Damage and Destruction.
(a) If, during the Term, any Improvements are damaged or
destroyed, in whole or in part, by fire or other casualty, the Tenant
shall promptly notify the Issuer and the Trustee in writing as to the
nature and extent of such damage or loss and whether it is practicable
and desirable to rebuild, repair, restore or replace such damage or
loss.
(b) If the Tenant shall determine that such rebuilding,
repairing, restoring or replacing is practicable and desirable, the
Tenant shall forthwith proceed with and complete with reasonable
dispatch such rebuilding, repairing, restoring or replacing. In such
case, any Net Proceeds of property and/or casualty insurance required by
this Lease and received with respect to any such damage or loss to the
Improvements shall be paid to the Trustee and shall be deposited in the
Project Fund and shall be used and applied for the purpose of paying the
cost of such rebuilding, repairing, restoring or replacing such damage
or loss. Any amount remaining in the Project Fund after such rebuilding,
repairing, restoring or replacing shall be paid to Tenant.
(c) If the Tenant shall determine that rebuilding, repairing,
restoring or replacing the Improvements are not practicable and
desirable, any Net proceeds of property and/or casualty insurance
required by this Lease and received with respect to any such damage or
loss to the Project shall be paid into the Principal and Interest
Payment Account. Such moneys shall be used to redeem Bonds at their
earliest optional redemption date. The Tenant agrees that it shall be
reasonable in exercising its judgment pursuant to this subsection (c)
(d) The Tenant shall not, by reason of its inability to use
all or any part of the Improvements during any period in which the
Improvements are damaged or destroyed, or are being repaired, rebuilt,
restored or replaced nor by reason of the payment of the costs of such
rebuilding, repairing, restoring or replacing, be entitled to any
reimbursement or any abatement or diminution of the Basic Rent or
Additional Rent payable by the Tenant under this Lease nor of any other
obligations of the Tenant under this Lease except as expressly provided
in this Section.
Section 18.2. Condemnation.
(a) If, during the Term title to, or the temporary use of, all
or any part of the Project shall be condemned by any authority
exercising the power of eminent domain, the Tenant shall, within 90 days
after the date of entry of a final order in any eminent domain
proceedings granting condemnation, notify the Issuer and the Trustee in
writing as to the nature and extent of such condemnation and whether it
is practicable and desirable to acquire or construct substitute
Improvements.
(b) If the Tenant shall determine that such substitution is
practicable and desirable, the Tenant shall forthwith proceed with and
complete with reasonable dispatch the acquisition or construction of
such substitute Improvements. In such case, any Net Proceeds received
from any award or awards with respect to the Project or any part thereof
made in such condemnation or eminent domain proceeds shall be paid to
the Trustee for the account of the Tenant and shall be deposited in the
Project Fund and shall be used and applied for the purpose of paying
the cost of such substitution. Any amount remaining in the Project Fund
after such acquisition or construction shall be paid to Tenant.
(c) If the Tenant shall determine, in its sole discretion,
that it is not practicable and desirable to acquire or construct
substitute Improvements, any Net Proceeds of condemnation awards
received by the Tenant shall be paid into the Principal and Interest
Payment Account. Such moneys shall be used to redeem Bonds at their
earliest optional redemption date. The Tenant agrees that it shall be
reasonable in exercising its judgment pursuant to this subsection (c).
(d) The Tenant shall not, by reason of its inability to use
all or any part of the Improvements during any such period of
restoration or acquisition nor by reason of the payment of the costs of
such restoration or acquisition, be entitled to any reimbursement or any
abatement or diminution of the Basic Rent or Additional Rent payable by
the Tenant under this Lease nor of any other obligations hereunder
except as expressly provided in this Section.
(e) The Issuer shall cooperate fully with the Tenant in the
handling and conduct of any prospective or pending condemnation
proceedings with respect to the Project or any part thereof so long as
the Issuer is not the condemning authority. In no event will the Issuer
voluntarily settle or consent to the settlement of any prospective or
pending condemnation proceedings with respect to the Project or any part
thereof without the written consent of the Tenant.
Section 18.3. Effect of Xxxxxx's Defaults. Anything in this Article
to the contrary notwithstanding, the Issuer and Trustee shall have the
right at any time and from time to time to withhold payment of all or
any part of the Net Proceeds from the Project Fund attributable to
damage, destruction or condemnation of the Project to Tenant or any
third party if an Event of Default has occurred and is continuing, or
Issuer or Trustee has given notice to Tenant of any Default which, with
the passage of time, will become an Event of Default. In the event
Tenant shall cure any Defaults specified herein, the Trustee shall make
payments from the Net Proceeds to Tenant in accordance with the
provisions of this Article. However, if this Lease is terminated or
Issuer or Trustee otherwise re-enters and takes possession of the
Project without terminating this Lease, the Trustee shall pay all the
Net Proceeds held by it into the Principal and Interest Payment Account
and all fights of the Tenant in and to such Net Proceeds shall cease.
ARTICLE XIX
Section 19.1. Change of Circumstances; Determination of Taxability.
If a Change of Circumstances occurs or the Bonds are called for
redemption and payment upon the occurrence of a Determination of
Taxability, then Tenant shall have the option to purchase the Project
pursuant to Article XVII or the option to terminate this Lease by giving
Issuer notice of such termination within 90 days after Tenant has actual
knowledge of the event giving rise to such option. Such termination
shall become effective when all of the Bonds Outstanding are paid or
payment is provided for pursuant to the Indenture.
ARTICLE XX
Section 20.1. Remedies on Default. Whenever any Event of Default
shall have happened and be continuing, the Issuer may take any one or
more of the following remedial actions:
(a) By written notice to the Tenant upon acceleration of
maturity of the Bonds as provided in the Indenture, the Trustee may
declare the aggregate amount of all unpaid Basic Rent or Additional Rent
then or thereafter required to be paid under this Lease by the Tenant to
be immediately due and payable as liquidated damages from the Tenant,
whereupon the same shall become immediately due and payable by the
Tenant;
(b) Give Tenant written notice of intention to terminate this
Lease on a date specified therein, which date shall not be earlier than
30 days after such notice is given and, if all Defaults have not then
been cured on the date so specified, Tenant's rights to possession of
the Project shall cease, and this Lease shall thereupon be terminated,
and Issuer may re-enter and take possession of the Project; or
(c) Without terminating the Term hereof, or this Lease,
conduct inspections or an Environmental Assessment of the Project, and
re-enter the Project or take possession hereof pursuant to legal
proceedings or any notice provided for by law and this Lease. The Issuer
or the Trustee acting on behalf of the Issuer may refuse to re-enter or
take possession of the Project if it has reasonable cause for such
refusal. "Reasonable cause" shall include the presence on the Project of
conditions which are in violation of any Environmental Law or the
existence or threat of a remedial action against the Tenant under any
Environmental Law resulting from conditions on the Project.
Having elected to re-enter or take possession of the Project
without terminating the Term of this Lease, the Issuer and the Trustee
acting on behalf of Issuer shall use reasonable diligence to relet the
Project, or parts thereof, for such term or tern and at such rental and
upon such other terms and conditions as are deemed advisable, with the
right to make alterations and repairs to the Project, and no such re-
entry or taking of possession of the Project shall be construed as an
election to terminate this Lease, and no such re-entry or taking of
possession shall relieve Tenant of its obligation to pay Basic Rent or
Additional Rent (at the time or times provided herein), or of any of its
other obligations under this Lease, all of which shall survive such re-
entry or taking of possession. Tenant shall continue to pay the Basic
Rent and Additional Rent provided for in this Lease until the end of the
Term, whether or not the Project shall have been relet, less the net
proceeds, if any, of reletting the Project.
Having elected to reenter or take possession of the Project
pursuant to subsection 20.1(c), Issuer or Trustee acting on behalf of
Issuer may (subject, however, to any restrictions against termination of
this Lease in the Indenture), by notice to Tenant given at any time
thereafter while Tenant is in default in the payment of Basic Rent or
Additional Rent or in the performance of any other obligation under this
Lease, elect to terminate this Lease in accordance with subsection
20.1('o) and thereafter proceed to sell Issuer's interest in the
Project.
If, in accordance with any of the foregoing provisions of this
Article, Issuer shah have the fight to elect to re-enter and take
possession of the Project, Issuer may enter and expel Tenant and those
claiming through or under Xxxxxx and remove the property and effects of
both or either by all lawful means without being guilty of any manner of
trespass and without prejudice to any remedies for arrears of Basic Rent
or Additional Rent or preceding breach of covenant by Xxxxxx
Net proceeds of any reletting or sale of the Project shall be
deposited in the Principal and Interest Payment Account. "Net proceeds"
shall mean the receipts obtained from reletting or sale after deducting
all expenses incurred in connection with such reletting or sale,
including without limitation, all repossession costs, brokerage
commissions, legal expenses, expenses of employees, alteration costs and
expenses of preparation of the Project for reletting or sale.
Section 20.2. Survival of Obligations. Tenant covenants and agrees
with Issuer and the Bondowners that until all Bonds and the interest
thereon and redemption premium, if any, are paid in full or provision
made for the payment thereof in accordance with the Indenture, its
obligations under this Lease shall survive the cancellation and
termination of this Lease, for any muse, and that Tenant shall be
obligated to pay Basic Rent and Additional Rent (reduced by any net
income Issuer or Trustee may receive from the Project after such
termination) and perform all other obligations provided for in this
Lease, all at the time or times provided in this Lease. Notwithstanding
any provision of this Lease or the Indenture, the Tenant's obligations
under Section 14.1 hereof shall survive any termination, release or
assignment of this Lease, the Indenture or Guaranty Agreement and
payment or provision for payment of the Bonds.
Section 20.3. No Remedy Exclusive. No remedy herein conferred upon
or reserved to the Issuer is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under
this Lease or now or hereafter existing at law or in equity or by
statute, subject to the provisions of the Indenture. No delay or
omission to exercise any right or power mg upon 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. In order to entitle the
Issuer to exercise any remedy reserved to it in this Article, it shall
not be necessary to give any notice, other than notice required herein.
ARTICLE XXI
Section 21.1. Performance of Xxxxxx's Obligations by Issuer. If
Tenant shall fail to keep or perform any of its obligations as provided
in this Lease, then Issuer may (but shall not be obligated to do so)
upon the continuance of such failure on Tenant's part for 90 days after
notice of such failure is given Tenant by Issuer or the Trustee and
without waiving or releasing Tenant from any obligation hereunder, as an
additional but not exclusive remedy, make any such payment or perform
any such obligation, and Tenant shall reimburse Issuer for all sums so
paid by Issuer and all necessary or incidental costs and expenses
incurred by Issuer in performing such obligations through payment of
Additional Rent. If such Additional Rent is not so paid by Tenant within
10 days of demand, Issuer shall have the same rights and remedies provided
for in Article XX in the ease of default by Tenant in the payment of
Basic Rent.
ARTICLE XXII
Section 22.1. Surrender of Possession. Upon accrual of Issuer's
right of reentry as the result of Xxxxxx's Default hereunder or upon the
cancellation or termination of this Lease by lapse of time or otherwise
(other than as a result of Xxxxxx's purchase of the Project), Tenant
shall peacefully surrender possession of the Project to Issuer in good
condition and repair, ordinary wear and tear excepted; provided,
however, Tenant shall have the right, prior to or within 60 days after
the termination of this Lease, to remove from on or about the Project
the buildings, improvements, machinery, equipment, personal property,
furniture and trade fixtures which Tenant owns under the provisions of
this Lease and are not a part of the Project. All repairs to and
restorations of the Project required to be made because of such removal
shall be made by and at the sole cost and expense of Tenant. All
buildings, improvements, machinery, equipment, personal property,
furniture and trade fixtures owned by Tenant and which are not so
removed from on or about the Project prior to or within 60 days after
such termination of this Lease shall become the separate and absolute
property of Issuer.
ARTICLE XXIII
Section 23.1. Notices. All notices required or desired to be given
hereunder shall be in writing and shall be delivered in person to the
Notice Representative or mailed by restricted mail to the Notice
Address. All notices given by restricted mail as aforesaid shall be
deemed duly given as of the date three days after they are so mailed.
When mailed notices are given, the party giving notice will use
reasonable diligence to contact the party being notified by telephone or
facsimile on or before the date such notice is mailed.
ARTICLE XXIV
Section 24.1. Net Lease. The parties hereto agree (a) that this
Lease is intended to be a net lease, (b) that the payments of Basic Rent
and Additional Rent are designed to provide Issuer and the Trustee with
funds adequate in amount to pay all principal of and interest on all
Bonds as the same become due and payable and to pay and discharge all of
the other duties and requirements set forth herein, and (c) that to the
extent that the payments of Basic Rent and Additional Rent are not
adequate to provide Issuer and the Trustee with funds sufficient for the
purposes aforesaid, Tenant shall be obligated to pay, and it does hereby
covenant and agree to pay, upon demand therefor, as Additional Rent,
such further sums of money as may from time to time be required for such
purposes.
Section 24.2. Funds Held by Trustee After Payment of Bonds. If,
after the principal of and interest on all Bonds and all costs incident
to the payment of Bonds have been paid in full, the Trustee holds
unexpended funds received in accordance with the terms hereof, such
unexpended funds shall, except as otherwise provided in this Lease and
the Indenture and a-tier payment therefrom to Issuer of any sums of money
then due and owing by Tenant under the terms of this Lease, be the
absolute property of and be paid over forthwith to Tenant.
ARTICLE XXV
Section 25.1. Rights and Remedies. The rights and remedies reserved
by Issuer and Tenant hereunder and those provided by law shall be
construed as cumulative and continuing rights. No one of them shall be
exhausted by the exercise thereof on one or more occasions. Issuer and
Tenant shall each be entitled to specific performance and injunctive or
other equitable relief for any breach or threatened breach of any of the
provisions of this Lease, and each party hereby waives the right to
raise such defense in any proceeding in equity.
Section 25.2. Waiver of Breach. No waiver of any breach of any
covenant or agreement herein contained shall operate as a waiver of any
subsequent breach of the same covenant or agreement or as a waiver of
any breach of any other covenant or agreement, and in case of a breach
by either party of any covenant, agreement or undertaking, the
nondefaulting party may nevertheless accept from the other any payment
or payments or performance hereunder without in any way waiving its
right to exercise any of its rights and remedies provided for herein or
otherwise with respect to any such default or defaults which were in
existence at the time such payment or payments or performance were
accepted by it.
Section 25.3. Issuer Shall Not Unreasonably Withhold Consents and
Approvals. Wherever in this Lease it is provided that Issuer shall, may
or must give its approval or consent, or execute supplemental
agreements, exhibits or schedules, Issuer shall not unreasonably,
arbitrarily or unnecessarily withhold or refuse to give such approvals
or consents or refuse to execute such supplemental agreements, exhibits
or schedules.
ARTICLE XXVI
Section 26.1. Quiet Enjoyment and Possession. Tenant shall enjoy
peaceable and quiet possession of the Project as long as no Event of
Default has occurred and is continuing.
Section 26.2. Financial Report; Continuing Disclosure. So long as
any Bonds are Outstanding and unpaid and subject to the terms of the
Indenture, the Tenant shall furnish or cause to be furnished to the
Trustee the financial statements and continuing disclosure information
required by Article V of the Guaranty Agreement.
ARTICLE XXVII
Section 27.1. Investment Tax Credit; Depreciation. Tenant shall be
entitled to claim the full benefit of (1) any investment credit against
federal or state income tax allowable with respect to expenditures of
the character contemplated hereby under any federal or state income tax
laws now or from time to time hereafter in effect, and (2) any deduction
for depreciation with respect to the Project from federal or state
income taxes. Issuer agrees that it will upon Xxxxxx's request execute
all such elections, returns or other documents which may be reasonably
necessary or required to more fully assure the availability of such
benefits to Tenant.
ARTICLE XXVIII
Section 28.1. Amendments. This Lease may be mended, changed or
modified in the following manner:
(a) With respect to an amendment, change or modification which
reduces the Basic Rent or Additional Rent, or any amendment which
reduces the percentage of Bondowners whose consent is required for any
such amendment, change or modification, by an agreement in writing
executed by Issuer and Xxxxxx and consented to in writing by the Trustee
and by Bondowners owning at least 90% of the aggregate principal amount
of the Bonds then outstanding; and
(b) With respect to any other amendment, change or
modification which will materially adversely affect the security or
rights of the Bondowners, by an agreement in writing executed by Issuer
and Xxxxxx and consented to in writing by the Trustee and by Bondowners
owning at least 66-2/3% of the aggregate principal amount of the Bonds
then Outstanding;
(c) With respect to all other amendments, changes, or
modifications, by an agreement in writing executed by Issuer and Xxxxxx.
At least 30 days prior to the execution of any agreement pursuant to (c)
above, Issuer and Tenant shall furnish the Trustee and the Original
Purchaser of the Bonds with a copy of the amendment, change or
modification proposed to be made.
Section 28.2. Granting of Easements. If no Event of Default under
this Lease shall have happened and be continuing, Tenant may, at any
time or times, (a) grant easements, licenses and other rights or
privileges in the nature of easements with respect to any property
included in the Project, free from any rights of Issuer or the
Bondowners, or (b) release existing easements, licenses, rights-of-way
and other rights or privileges, all with or without consideration and
upon such terms and conditions as Tenant shall determine, and Issuer
agrees, to the extent that it may legally do so, that it will execute
and deliver any instrument necessary or appropriate to confirm and grant
or release any such easement, license, right-of-way or other right or
privilege or any such agreement or other arrangement, upon receipt by
Issuer of: (i) a copy of the instrument of grant or release or of the
agreement or other arrangement, (ii) a written application signed by the
Authorized Tenant Representative requesting such instrument, and (iii) a
certificate executed by Xxxxxx xxxxxxx (aa) that such grant or release
is not detrimental to the proper conduct of the business of Tenant, and
Cob) that such grant or release will not impair the effective use or
interfere with the efficient and economical operation of the Project
and will not materially adversely affect the security of the Bondowners.
If the instrument of grant shall so provide, any such easement or right
and the rights of such other parties thereunder shall be superior to
the rights of Issuer and the Bondowners and shall not be affected by
any termination of this Lease or default on the part of Tenant hereunder.
If no Event of Default shall have happened and be continuing, any
payments or other consideration received by Tenant for any such grant
or with respect to or under any such agreement or other arrangement
shall be and remain the property of Tenant, but, in the event of the
termination of this Lease because of an Event of Default, all rights then
existing of Tenant with respect to or under such grant shall inure to
the benefit of and be exercisable by Issuer.
Section 28.3. Security Interests. Issuer and Xxxxxx agree to
execute and deliver all instruments (including financing statements and
statements of continuation thereof) necessary for perfection of and
continuance of the security interest of Issuer in and to the Project.
The Issuer shall file or cause to be filed all such original instruments
and the Trustee shall continue or cause to be continued the liens of
such instruments for so long as the Bonds shall be Outstanding.
Under the Indenture, the Issuer will, as additional security for
the Bonds assign, transfer, pledge and grant a security interest in
certain of its rights under this Lease to the Trustee. The Trustee is
hereby give the right to enforce, either jointly with the Issuer or
separately, the performance of the obligations of the Tenant, and the
Tenant hereby consents to the same and agrees that the Trustee may
enforce such rights as provided in the Indenture and the Tenant will
make payments required hereunder directly to the Trustee.
Section 28.4. Construction and Enforcement. This Lease shall be
construed and enforced in accordance with the laws of the State. The
provisions of this Lease shall be applied and interpreted in accordance
with the rules of interpretation set forth in the Indenture. Wherever in
this Lease it is provided that either party shall or will make any
payment or perform or refrain from performing any act or obligation,
each such provision shall, even though not so expressed, be construed as
an express covenant to make such payment or to perform, or not to
perform, as the case may be, such act or obligation.
Section 28.5. Invalidity of Provisions of Lease. If, for any
reason, any provision hereof shall be determined to be invalid or
unenforceable, the validity and effect of the other provisions hereof
shall not be affected thereby.
Section 28.6. Covenants Binding on Successors and Assigns. The
covenants, agreements and conditions herein contained shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
Section 28.7. Section Headings. The section headings hereof are for
the convenience of reference only and shall not be treated as a part of
this Lease or as affecting the tree meaning of the provisions hereof.
The reference to section numbers herein or in the Indenture shall be
deemed to refer to the numbers preceding each section.
Section 28.8. Execution of Counterparts. This Lease may be executed
simultaneously in multiple counterparts, each of which shall be deemed
to be an original, but all of which together shall constitute one
instrument.
IN WITNESS WHEREOF, the Issuer has mused this Lease to be signed by
an authorized official, such signature to be attested by an authorized
officer, and its official seal to be applied, as of the date first above
written.
CITY OF SOUTH HUTCHINSON, KANSAS
By: /s/ Xxxxx Xxxxxx
Mayor
[SEAL]
ATTEST:
By: /s/ Xxxxxxx X. Xxxxxx, CMC
City Clerk
"ISSUER"
ACKNOWLEDGMENT
STATE OF KANSAS )
) SS:
COUNTY OF RENO )
This instrument was acknowledged before me on the 1st day of
December, 1997, by Xxxxx Xxxxxx, Mayor, and Xxxxxxx X. Xxxxxx, City
Clerk, of the City of South Hutchinson, Kansas, a municipal corporation.
[SEAL]
Signed: /s/ Xxxxxx Xxxxxxxxx
Notary Public
My Appointment Expires:
7/18/98
IN WITNESS WHEREOF, the Tenant has caused this Lease to be signed
by an authorized officer, such signature to be attested by an authorized
officer, and its corporate seal (if any) to be applied, as of the date
first above written.
XXXXXXX BUS CORPORATION
By: /s/ Xxxxx X. Xxxxx
Title: Assistant Treasurer
[SEAL]
ATTEST:
By: /s/ Xxxxx X. Xxxxxx
Title: Secretary
"TENANT"
ACKNOWLEDGMENT
STATE OF KANSAS )
) SS:
COUNTY OF RENO )
This instrument was acknowledged before me on the 1st day of
December, 1997, by Xxxxx X. Xxxxx, Vice President - Finance of Xxxxxxx
Bus Corporation, a Kansas corporation.
[SEAL]
/s/ Xxxxx Xxxxx
Notary Public
My Appointment Expires:
2/16/98
