EXHIBIT 10.7
--------------------------------------------------------------------------------
LEASE
between
THE DIRECTOR OF DEVELOPMENT
OF THE STATE OF OHIO
and
LUIGINO'S, INC.
Dated
as of
September 1, 1991
(OHIO ENTERPRISE BOND FUND PROGRAM)
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INDEX
(The Index is not a part of this Lease and
is only for convenience of reference.)
Page
----
ARTICLE I - DEFINITIONS .................................................
Section 1.1. Use of Defined Terms.....................................
Section 1.2. Definitions..............................................
Section 1.3. Certain Words and References.............................
ARTICLE II - DETERMINATION AND REPRESENTATIONS...........................
Section 2.1. Determinations of the Director...........................
Section 2.2. Representations of the Company...........................
ARTICLE III - COMMENCEMENT AND COMPLETION OF THE PROJECT.................
Section 3.1. Provision of the Project.................................
Section 3.2. Deposits to the Project Fund and the
Issuance Expense Account.................................
Section 3.3. Disbursements from the Project Fund......................
Section 3.4. Establishment of Completion Date.........................
Section 3.5. Company Required to Pay Acquisition,
Construction and Installation Costs in
Event Project Fund Insufficient..........................
Section 3.6. Remedies to Be Pursued Against Contractors and
Subcontractors and their Sureties........................
Section 3.7. Investment of Project Fund, Primary Reserve
Account or Collateral Proceeds Account...................
Section 3.8. Lease as Security Agreement..............................
Section 3.9. Plans and Specifications; Inspections....................
ARTICLE IV - LEASE OF PROJECT, LEASE TERM AND RENTAL.....................
Section 4.1. Lease of Project.........................................
Section 4.2. Lease Term and Possession................................
Section 4.3. Rents and Other Amounts Payable..........................
Section 4.4. Place of Payments........................................
Section 4.5. Primary Reserve Account..................................
Section 4.6. Obligation of the Company Hereunder Unconditional........
ARTICLE V - MAINTENANCE, TAXES AND INSURANCE.............................
Section 5.1. Maintenance and Modifications of Project by the Company..
Section 5.2. Removal of Project Equipment.............................
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Section 5.3. Indemnification by the Company...........................
Section 5.4. Taxes, Other Governmental Charges and Utility Charges....
Section 5.5. Insurance Required.......................................
Section 5.6. Additional Provisions Respecting Insurance...............
Section 5.7. Application of Net Proceeds of Insurance.................
Section 5.8. Public Liability Insurance...............................
Section 5.9. Advances.................................................
ARTICLE VI - DAMAGE, DESTRUCTION AND CONDEMNATION........................
Section 6.1. Damage and Destruction...................................
Section 6.2. Eminent Domain...........................................
Section 6.3. Condemnation of Company Owned Property...................
ARTICLE VII - SPECIAL COVENANTS..........................................
Section 7.1. No Warranty of Condition or Suitability..................
Section 7.2. Right of Access to the Project...........................
Section 7.3. through 7.5 [Reserved]...................................
Section 7.6. Information Concerning Operations........................
Section 7.7. Affirmative Covenants of the Company.....................
Section 7.8. Negative Covenants of the Company........................
Section 7.9. Mechanics' and Other Liens...............................
ARTICLE VIII - ASSIGNMENT, SUBLEASING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT..............................
Section 8.1. Assignment and Subleasing by the Lease...................
Section 8.2. Pledge by the Director...................................
Section 8.3. Restrictions on Transfer and Encumbrance of
Project by the Director..................................
Section 8.4. Redemption of Bonds......................................
Section 8.5. Prepayment of Rents......................................
Section 8.6. Lessee Entitled to Certain Rent Abatements if Bonds
Paid Prior to Maturity...................................
Section 8.7. Installation of the Company's Own Machinery
and Equipment............................................
ARTICLE IX - EVENTS OF DEFAULT AND REMEDIES..............................
Section 9.1. Event of Default.........................................
Section 9.2. Remedies on Default......................................
Section 9.3. No Remedy Exclusive......................................
Section 9.4. Agreement to Pay Attorneys' Fees and Expenses............
Section 9.5. No Additional Waiver Implied by One Waiver...............
Section 9.6. Waiver of Appraisement, Valuation, Etc...................
Section 9.7. Reinstatement............................................
ARTICLE X - OPTIONS AND OBLIGATIONS TO PURCHASE PROJECT..................
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Section 10.1. Option to Terminate......................................
Section 10.2. Option to Purchase Project Prior to
Payment of the Bonds.....................................
Section 10.3. Agreement to Purchase Project............................
Section 10.4. Conveyance upon Exercise of Option to Purchase...........
Section 10.5. Option to Purchase, Redeem or Defease Bonds..............
Section 10.6. Purchase of Project Upon Determination of Taxability.....
ARTICLE XI - MISCELLANEOUS...............................................
Section 11.1. Surrender of Project.....................................
Section 11.2. Amounts Remaining in Collateral Proceeds Account
and Primary Reserve Account..............................
Section 11.3. Notices..................................................
Section 11.4. Net Lease................................................
Section 11.5. Binding Effect...........................................
Section 11.6. Extent of Covenants of the Director; No Personal
Liability................................................
Section 11.7 Amendments, Changes and Modifications....................
Section 11.8. Execution Counterparts...................................
Section 11.9. Severability.............................................
Section 11.10.Captions.................................................
Section 11.11.Governing Law............................................
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LEASE
THIS LEASE made and entered into as of September 1, 1991 between the
Director of Development of the State of Ohio (the "Director"), and Luigino's,
Inc., a corporation organized under the laws of the State of Minnesota and
qualified to do business in the State of Ohio (the "Company"), under the
circumstances summarized in the following recitals (the capitalized terms used
in the recitals being used therein as defined in Article I hereof):
A. Pursuant to the Act, the Director is authorized, among other things,
to acquire property, and convey property so acquired, by lease, lease purchase
or other disposition, upon such terms and conditions as the Director determines
to be appropriate to satisfy the objectives of the Act.
B. The Company has requested-that the Director provide financial
assistance for the Project by acquiring and constructing the Project, leasing
the Project to the Company and conveying the Project to the Company upon
termination of the Lease Term, all subject to and in accordance with the terms
of this Lease.
C. The Director has determined that the Project constitutes an Eligible
Project and that the financial assistance to be provided pursuant to this Lease
is appropriate under the Act and will be in furtherance and in implementation of
the public policy set forth in the Act.
D. The financial assistance to be provided, pursuant to this Lease has
been reviewed and approved by the Development Financing Advisory Board and the
Controlling Board, pursuant to the Act.
NOW, THEREFORE, in consideration of the premises and the
representations and agreements hereinafter contained, the Director and the
Company agree as follows (provided, that any obligation of the Director created
by or arising out of this Lease shall not be a general debt on the part of the
Director or the State but shall be payable solely out of the rentals, revenues
and other income, charges and moneys realized from the use, lease, sale or other
disposition of the Project and any insurance and condemnation awards as herein
provided):
ARTICLE I
DEFINITIONS
Section 1.1. Use of Defined Terms. In addition to the words and terms
elsewhere defined in this Lease or by reference to other instruments, the words
and terms set forth in Section 1.2 hereof shall have the meanings therein set
forth unless the context or use expressly indicates different meaning or intent.
Such definitions shall be equally applicable to both the singular and plural
forms of any of the words and terms therein defined.
Section 1.2. Definitions. As used herein:
"Act" means Chapter 166, Ohio Revised Code, as from time to time
enacted and amended.
"Additional Rent" means the additional rent specified in Section 4.3 of
this Lease.
"Allowable Costs" means "allowable costs of the Project within the
meaning of the Act.
"Application" means the Application of the Company, dated May 8, 1991,
submitted to the Director requesting assistance under the Act.
"Approved Letter of Credit" means an irrevocable letter of credit, in
form satisfactory to the Trustee, issued by a commercial bank organized under
the laws of the United States of America or any state thereof and acceptable to
the Director, which letter of credit may be drawn upon by the Trustee to provide
funds for the Primary Reserve Account pursuant to Section 4.5 of this Lease. An
Approved Letter of Credit must permit drawings thereunder for a period of not
less than one (1) year or until fifteen (15) days after the final maturity of
the Bonds, whichever first occurs.
"Authorized Company Representative" means the person at the time
designated to act on behalf of the Company by written certificate furnished to
the Director and the Trustee, containing the specimen signature of such person
and signed on behalf of the Company by the President or a Vice President of the
Company. Such certificate may designate an alternate or alternates.
"Bonds" means the State Economic Development Revenue Bonds (Ohio
Enterprise Bond Fund), Series 1991-10 (Luigino's, Inc. Project) authorized by
the General Bond Order and the Series Bond Order.
"Code" means the Internal Revenue Code of 1986, as amended, and
references to the Code and Sections of the Code shall include relevant
regulations and proposed regulations thereunder or under the Internal Revenue
Code of 1954, as amended, and any successor provisions to such Sections,
regulations or proposed regulations.
"Collateral Proceeds Account" means the Series 1991-9 Collateral
Proceeds Account, established pursuant to the General Bond Order and the Series
Bond Order, in the Economic Development Bond Service Fund.
"Commitment" means the letter from the Director to the Company, dated
July 23, 1991, pursuant to which the Director, on behalf of the State, agrees to
provide assistance under the Act for the Project.
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"Company" means Luigino's, Inc., a corporation organized under the laws
of the State of Minnesota.
"Completion Date" means the date of completion of the Project, as
certified by the Company pursuant to Section 3.4 hereof.
"Construction Period" means the period between the beginning of
construction or the date on which this Lease is delivered to the Director,
whichever is earlier, and the Completion Date.
"Controlling Board" means the Controlling Board of the State.
"Cost Certification" means a certification of the Company, as of a
specified date, setting forth in reasonable detail the costs incurred and, if
appropriate, to be incurred in completing the Provision of the Project,
including a detail, by category, of all Allowable Costs.
"Debt Service Account" means the Debt Service Account, established
pursuant to the General Bond Order, in the Economic Development Bond Service
Fund.
"Determination of Taxability" shall have the meaning set forth in the
Series Bond Order.
"Development Financing Advisory Board" means the Development Financing
Advisory Board of the State.
"Director" means the officer of the State, appointed pursuant to
Section 121.03 of the Ohio Revised Code, who administers and is the executive
head of the Department of Development, the officer who by law performs the
functions of that office, and any person acting on behalf of the Director of
Development pursuant to any delegation permitted by law.
"Economic Development Bond Service Fund" means the Economic Development
Bond Service Fund created by Section 166.08(S) of the Ohio Revised Code.
"Eligible Project" means an "eligible project" within the meaning of
the Act.
"Eligible Investments" means Eligible Investments as defined in the
Trust Agreement.
"Event of Default" means any of the events described as an event of
default in Section 9.1 hereof.
"Facilities Establishment Fund" means the Facilities Establishment Fund
created by Section 166.03 of the Ohio Revised Code.
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"Federal Income Tax Compliance Agreement" means the Federal Income Tax
Compliance Agreement among the Treasurer, the Trustee and the Company relating
to the Bonds.
"General Bond Order" means the General Bond Order of the Treasurer,
dated April 11, 1988, as the same may be amended from time to time in accordance
with its provisions or the provisions of the Trust Agreement.
"Governing Instruments" means the articles of incorporation and bylaws
of the Company.
"Governmental Authority" means, collectively, the State, any political
subdivision thereof, any municipality, and any agency, department, commission,
board or bureau of any of the foregoing having jurisdiction over the Project.
"Guarantors" means the Company and Xxxx X. Xxxxxxxx.
"Guaranty" means the guaranty agreement of even date herewith between
the Guarantors and the Trustee.
"Independent Engineer" means an engineer or engineering firm or an
architect or architectural firm qualified to practice the profession of
engineering or architecture under the laws of State and who or which is not an
officer or a full time employee of the Company or any sublessee of the Project.
"Interest Rate For Advances" means (a) the interest rate borne by the
Bonds, or (b) a rate which is one percent in excess of the prime or base
interest rate then charged by the Trustee in its lending capacity as a bank,
whichever is greater and lawfully chargeable.
"Issuance Expense Account" means the Series 1991-10 Issuance Expense
Account created in the Series Bond Order.
"Lease" means this Lease, as from time to time amended or supplemented.
"Lease Approval Documents" means, with respect to the Lease, the
Recommendation of the Director to the Development Financing Advisory Board dated
May 22, 1991, the Resolution of the Development Financing Advisory Board dated
May 30,1991, the Approval of the Controlling Board dated July 8, 1991, and the
Commitment.
"Lease Term" or "Term" means the duration of the leasehold estate
created in this Lease as specified in Section 4.2 hereof.
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"Net Proceeds," when used with respect to any insurance or condemnation
award, means the gross proceeds from the insurance or condemnation award with
respect to which that term is used remaining after payment of all expenses
incurred in the collection of such gross proceeds.
"Notice Address" means:
(a) As to the Director: Department of Development
X.X. Xxx 0000
Xxxxxxxx, Xxxx 00000-0000
Attn: Director
and
Xxxxxxx & Xxxxxx
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Attn: Xxxxxxx Xxxx, Esq.
(b) As to the Company: Luigino's, Inc.
000 Xxxx Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxxx 00000
Attn: President
(c) As to the Trustee: The Provident Bank
Xxx Xxxx Xxxxxx Xxxxxx
Xxxxxxxxxx, Xxxx 00000
Attn: Corporate Trust Dept.
or such additional or different address, notice of which is given under Section
11.3 hereof.
"Original Deposit" means Six Hundred Seventy One Thousand Five Hundred
Dollars ($671,500), which amount (or an Approved Letter of Credit in such
amount) is to be deposited in the Primary Reserve Account upon delivery of this
Lease, in accordance with Section 4.5 hereof.
"Plans and Specifications" means the plans and specifications or other
appropriate documents describing the Project prepared by or at the direction of
the Company.
"Primary Reserve Account" means the Series 1991-10 Primary Reserve
Account, established pursuant to the General Bond Order and the Series Bond
Order, in the Economic Development Bond Service Fund.
"Project" means the Project Equipment, constituting an Eligible
Project.
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"Project Equipment" means the equipment, machinery and other personal
property described on Exhibit A attached hereto.
"Project Fund" means the Series 1991-10 Project Fund, established
pursuant to the Series Bond Order.
"Project Purposes" means equipment to be used in the production of
frozen food.
"Project Site" means the Company's frozen food production facility
located in Jackson, Ohio.
"Provision" means, as applicable, the acquiring, constructing,
reconstructing, rehabilitating, renovating, enlarging, improving, equipping or
furnishing of the Project.
"Series Bond Order" means Series Bond Order R10-91 of the-Treasurer,
dated September 18, 1991, as the same may be amended from time to time in
accordance with its provisions or the provisions of the Trust Agreement.
"State" means the State of Ohio.
"Supplement" means the Twentieth Supplemental Trust Agreement, dated as
of September 1, 1991, between the Treasurer and the Trustee, of which the Series
Bond Order is a part.
"Terms and Conditions to Disbursement" means the terms and conditions
which must be satisfied by the Company with respect to each request for
disbursement of moneys from the Project Fund in order to obtain the Director's
approval of such request for disbursement, which terms and conditions are get
forth on Exhibit B attached hereto.
"Treasurer" means the Treasurer of State of the State, or the officer
who by law performs the functions of that office.
"Trustee" means the trustee at the time serving an such under the Trust
Agreement, initially The Provident Bank, Cincinnati, Ohio.
"Trust Agreement" means the Trust Agreement, dated as of April 1, 1988,
between the Treasurer and the Trustee, of which the General Bond Order is a
part, as the same may be amended, modified or supplemented by any amendments or
modifications thereof and any supplements thereto (including, but not limited
to, the supplement) entered into in accordance with the provisions thereof.
Section 1.3. Certain Words and References. Any reference herein to the
Director shall include those succeeding to his functions, duties or
responsibilities pursuant to or by operation of
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law or lawfully performing such functions. Any reference to a section or
provision of the Constitution of the State or to the Act or to a section,
provision or chapter of the Ohio Revised Code shall include such section,
provision or chapter as from time to time amended, modified, revised,
supplemented or superseded.
The terms "hereof," "hereby,* "herein," "hereto," "hereunder" and
similar terms refer to this Lease; and the term "heretofore" means before, and
the term "hereafter" means after, the date of delivery of this Lease.
ARTICLE II
DETERMINATION AND REPRESENTATIONS
Section 2.1. Determinations of the Director. Pursuant to the Act and on
the basis of the representations and other information provided by the Company,
the Director has heretofore made certain determinations, as set forth in the
Lease Approval Documents, which are hereby confirmed, and the Director hereby
determines that the financial assistance to be provided by the State pursuant to
this Lease will conform to the requirements of the Act, including Section 166.02
thereof, and will further implement the purposes of the Act by creating new jobs
or preserving existing jobs and employment opportunities and improving the
economic welfare of the people of the State.
Section 2.2. Representations of the Company. The Company hereby
represents and warrants that:
(a) It is a corporation duly organized, validly existing and in
good standing under the laws of the State of Minnesota and
qualified to do business in the State.
(b) It has full power and authority to execute, deliver and
perform this Lease and to enter into and carry out the
transactions contemplated hereby. Such execution, delivery and
performance do not, and will not, violate any provision of law
applicable to the Company or the Governing Instruments of the
Company and do not, and will not, conflict with or result in a
default under any agreement or instrument to which the Company
is a party or by which it or any of its property or assets is
or may be bound. This Lease has, by proper action, been duly
authorized, executed and delivered and all necessary actions
have been taken to constitute this Lease a legal, valid and
binding obligation of the Company.
(c) The provision of financial assistance pursuant to the Lease
Approval Documents and this Lease induced the Company to
provide the Project, thereby creating new jobs or preserving
existing jobs and employment opportunities and improving the
economic welfare of the people of the State.
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(d) It presently intends that the Project will be used and
operated in a manner consistent with the Project Purposes
until the end of the Lease Term, and the Company knows of no
reason why the Project will not be so operated.
(e) There are no actions, suits or proceedings pending or
threatened against or affecting the Company or the Project
which, if adversely determined, would individually or in the
aggregate materially impair the ability of the Company to
perform any of its obligations under this Lease or adversely
affect the financial condition of the Company.
(f) The Company is not in default under this Lease or in the
payment of any indebtedness for borrowed money or under any
agreement or instrument evidencing any such indebtedness, and
no event has occurred which by notice, the passage of time or
otherwise would constitute any such event of default.
(g) Zoning regulations applicable to the Project Site permit the
Provision of the Project thereon in accordance with the Plans
and Specifications and the operation of the Company's business
thereon; and all utilities, including water, storm and
sanitary sewer, gas, electric and telephone, and rights of
access to public ways are available or will be provided to the
Project Site in sufficient locations and capacities to meet
the requirements of operating the Project and of any
applicable Governmental Authority.
(h) The Company has made no contract or arrangement of any kind,
other than this Lease, which has given rise to or the
performance of which by the other party thereto would give
rise to a lien or claim of lien on the Project or other
collateral covered by this Lease, and no materials or labor
have heretofore been supplied to or performed in connection
with the Project.
(i) No representation or warranty of the Company contained in any
of the Lease Approval Documents or this Lease, and no
statement contained in any certificate, schedule, list,
financial statement or other instrument furnished to the
Director by or on behalf of the Company (including, without
limitation, the Application) contains any untrue statement of
a material fact, or omits to state a material fact necessary
to make the statements contained herein or therein not
misleading.
(j) The financial statements of the Company heretofore delivered
to the Director are true and correct, in all respects, have
been prepared in accordance with generally accepted accounting
principles consistently applied, and fairly present the
financial condition and the results of operation of the
Company as of the dates thereof. No materially adverse change
has occurred in the financial condition of the Company since
the respective dates thereof.
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(k) The Company has conveyed, or caused to be conveyed, to the
Director good and marketable title to such portion, if any, of
the Project Equipment heretofore owned by the Company, subject
in all cases to no lien, charge, easement, condition,
restriction or encumbrance except as created by this Lease.
ARTICLE III
COMMENCEMENT AND COMPLETION OF THE PROJECT
Section 3.1. Provision of the Project. The Director agrees that it will
cause to be acquired and installed at the Project Site and for use of the
Company the Project Equipment, all of which acquisitions and installations shall
be made in accordance with the Plans and Specifications.
The Director further agrees that it will enter into, or accept the
assignment of, such contracts as the Company may request in order to effectuate
the purposes of this Section and that it will not make or execute any other
contract or give any order for such construction or for the acquisition and
installation of Project Equipment except in the manner provided in this Lease.
The Director hereby makes, constitutes and appoints the Company as its
true and lawful agent, with full power of substitution in the premises and the
Company hereby accepts such agency, (a) to acquire and install the Project
Equipment in accordance with the Plans and Specifications, (b) to make, execute,
acknowledge and deliver any contracts, orders, receipts, writings and
instructions, either in the name of the Company solely or as the stated agent
for the Director, with any other persons, firms or corporations, and in general
to do all things which ' may be requisite or proper, all for acquiring and
installing the Project Equipment with the same powers and with the same validity
as the Director could do if acting in its own behalf, (c) pursuant to the
provisions of this Lease, to pay all Allowable Costs incurred in the acquisition
and installation of the Project Equipment from funds made available therefor in
accordance with this Lease and (d) to ask, demand, xxx for, xxxx, recover and
receive all such sums of money, debts, dues and other demands whatsoever which
may be due, owing and payable to the Director under the terms of any contract,
order, receipt, writing and instruction in connection with acquisition and
installation of the Project Equipment, and to enforce the provisions of any
contract, agreement, obligation, bond or other performance security. So long as
the Company is not in default under any of the provisions of this Lease, this
appointment of the Company to act as agent and all authority hereby conferred is
granted and conferred irrevocably to the Completion Date and thereafter until
all activities in connection with the acquisition and installation of the
Project Equipment shall have been completed, and shall not be terminated prior
thereto by act of the Director or the Company or by operation of law.
The Director and the Company each agree that acquisition and
installation of the Project Equipment shall proceed with all reasonable
dispatch.
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The Company agrees that all wages paid to laborers and mechanics
employed on the Project by the Company or its contractors or subcontractors
shall be paid at the prevailing rates of wages of laborers and mechanics for the
class of work called for by the Project, which wages shall be determined in
accordance with the requirements of Chapter 4115 of the Ohio Revised Code for
determination of prevailing wage rates.
Section 3.2. Deposits to the Project Fund and the Issuance Expense
Account. In order to provide funds for payment of the Allowable Costs of the
Project, the Director, upon delivery of this Lease, shall cause to be
transferred from the Facilities Establishment Fund to the Project Fund the sum
of Five Million Nine Hundred Nine Thousand Two Hundred Dollars ($5,909,200). In
order to provide funds for payment of costs of issuance of the Bonds in excess
of the amount of Bond proceeds deposited in the Issuance Expense Account, the
Company, upon delivery of this Lease, shall pay to the Trustee for deposit in
the Issuance Expense Fund the sum of Twenty-One Thousand Three Hundred
Forty-Nine Dollars ($21,349).
Section 3.3. Disbursements from the Project Fund. The Treasurer has, in
the Supplement, authorized and directed the Trustee to disburse the moneys in
the Project Fund for Allowable Costs of the Project. Except as otherwise
provided in this Lease, each payment from the Project Fund shall be made only
upon (A) the written direction of the Authorized Company Representative, who
shall certify with respect to each such payment: (i) that each item for which
payment is requested is an Allowable Cost properly payable out of the Project
Fund in accordance with the terms and conditions of this Lease and none of the
items for which the payment is proposed to be made has formed the basis for any
payment theretofore made from the Project Fund, (ii) that each item for which
payment is proposed to be made is or was necessary in connection with the
Project and (iii) that the Company has received from each payee appropriate
waivers of any mechanics' or other liens (or has provided indemnification in
lieu thereof satisfactory to the Director) and (B) the written approval of the
Director. The Director shall not be required to approve any request for
disbursement of moneys from the Project Fund unless the Company has complied
with all of the Terms and Conditions to Disbursement. The Trustee shall be
allowed a reasonable time, not to exceed fifteen (15) days, in view of the
character of any installment or investments required to be liquidated for the
purpose, for the making of any disbursement from the Project Fund authorized by
this Section.
Section 3.4. Establishment of Completion Date. The Company covenants
that the Completion Date shall occur not later than March 1, 1993. The
Completion Date shall be evidenced to the Director and to the Trustee by a
certificate signed by the Authorized Company Representative stating that, except
for amounts retained by the Trustee in the Project Fund for Allowable Costs of
the Project not then due and payable, (i) Provision of the Project has been
completed in accordance with the Plans and Specifications and all labor,
services, materials and supplies used in such acquisition, construction and
installation have been paid for, (ii) all other facilities necessary in
connection with the Project have been constructed, acquired and installed in
accordance with the plans and specifications therefor and all costs and expenses
incurred in connection therewith have been paid, (iii) the Project Equipment, if
any, (which shall be
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described in an exhibit attached to said certificate) has been installed to his
satisfaction, and as so installed is suitable and sufficient for the efficient
operation of the Project for the Project Purposes, and (iv) all materially
significant disputes, controversies or claims arising out of or in connection
with the acquisition, construction and installation of the Project have been
resolved, satisfied or paid in full, as the case may be. Notwithstanding the
foregoing, such certificate shall state that it is given without prejudice to
any rights against third parties which exist at the date of such certificate or
which may subsequently come into being. The Company shall also deliver to the
Director and to the Trustee a Cost Certification. Any amount remaining in the
Project Fund on the Completion Date, except for amounts which the Authorized
Company Representative certifies to the Trustee as being required to pay
Allowable Costs of the Project not then due and payable, shall be transferred by
the Trustee to' the Collateral Proceeds Account.
Section 3.5. Company Required to Pay Acquisition, Construction and
Installation Costs in Event Project Fund Insufficient. In the event the moneys
in the Project Fund available for payment of costs of the Project should not be
sufficient to pay the cost thereof in full, the Company agrees, for the benefit
of the Director, to complete the Project and to pay all the portion of the costs
of the Project as may be in excess of the moneys available therefor in the
Project Fund. The Director does not make any warranty, either express or
implied, that the moneys which will be paid into the Project Fund and which
under the provisions of this Lease will be available for payment of the
Allowable Costs of the Project will be sufficient to pay all the costs which
will be incurred in that connection. The Company agrees that if after exhaustion
of the moneys in the Project Fund the Company should pay any portion of the said
costs of the Project pursuant to the provisions of this Section, it shall not be
entitled to any reimbursement therefor from the Director or the Trustee, nor
shall it be entitled to any diminution in or postponement of the rents payable
under Section 4.3 hereof.
Section 3.6. Remedies to Be Pursued Against Contractors and
Subcontractors and their Sureties. In the event of default of any contractor or
subcontractor under any contract made by it in connection with the Project or in
the event of a breach of warranty with respect to any materials, workmanship, or
performance guaranty, the Company will promptly proceed, either separately or in
conjunction with others, to exhaust the remedies of the Company or the Director
against the contractor or subcontractor so in default and against each such
surety for the performance of such contract. The Company agrees to advise the
Director of the steps it intends to take in connection with any such default. If
the Company shall so notify the Director, the Company may, in its own name or in
the name of the Director, prosecute or defend any action or proceeding or take
any other action involving any such contractor, subcontractor or surety which
the Company deems reasonably necessary, and in such event the. Director hereby
agrees to cooperate fully with the Company and to take all action necessary to
effect the substitution of the Company for the Director in any such action or
proceeding. Any amounts recovered by way of damages, refunds, adjustments or
otherwise in connection with the foregoing, after deduction of expenses incurred
in such recovery, prior to the Completion Date shall be paid into the Project
Fund or, if recovered after the Completion Date and full disposition of the
Project Fund in
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accordance with Section 3.4 hereof, shall be paid to the Trustee for deposit in
the Collateral Proceeds Account.
Section 3.7. Investment of Project Fund. Primary Reserve Account or
Collateral Proceeds Account. Any moneys held as part of the Project Fund, the
Primary Reserve Account or the Collateral Proceeds Account shall be invested by
the Trustee, upon the written or oral direction (but if oral, confirmed promptly
in writing, of the Authorized Company Representative, in Eligible Investments ;
provided, however, that moneys held as part of the Collateral Proceeds Account
shall be invested only in Eligible Investments which are not "investment
property" within the meaning of Section 148(b) of the Code; and provided,
further, that amounts in the Primary Reserve Account in excess of $671,500 shall
not be invested at a yield which is materially higher than the yield on the
Bonds, within the meaning of the Code.
Section 3.8. Lease as Security Agreement. This Lease is intended to
create and does create in the Director a security interest in the Project, and
in each part thereof, under the Ohio Uniform Commercial Code (Chapters 1301 to
1309, inclusive, of the Ohio Revised Code) as security for the payment of rent
required by Section 4.3 hereof.
Section 3.9. Plans and Specifications; Inspections. At his option, the
Director may retain, at the Company's expense, an architect, engineer, appraiser
or other consultant for the purpose of approving the Plans and Specifications,
verifying costs and performing inspections as Provision of the Project
progresses. Such inspections or approvals of Plans and Specifications *hall
impose no responsibility or liability of any nature upon the Director, the
State, their agents, representatives or designees nor, without limitation, carry
any warranty or representation as to the adequacy or safety of the structures or
any of their component parts or any other physical condition or feature
pertaining to the Project. The Company shall, at the request of the Director,
make periodic reports (including, if required, submission of updated Cost
Certifications) to the Director concerning the status of completion and the
expenditure of costs in respect thereof.
The Company may revise the Plans and Specifications from time to time;
provided that no revision shall be made (a) which would change the Project
Purposes to purposes other than those permitted by the Act; (b) without
obtaining, to the extent required by law, the approval of any applicable
Governmental Authority; and (c) without the prior written approval of the
Director if such revision would change the amounts set forth in the most
recently furnished Cost Certification. In any event, all revisions to the Plans
and Specifications shall be promptly filed with the Director.
ARTICLE IV
LEASE OF PROJECT, LEASE TERM AND RENTAL
Section 4.1. Lease of Project. The Director, as lessor hereunder, in
consideration of the rents, covenants and agreements herein stated, agrees to,
and does hereby lease to the Company,
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as lessee hereunder, and the Company agrees to, and does hereby lease from the
Director, subject to the provisions of this Lease, the Project for the Lease
Term.
Section 4.2. Lease Term and Possession. The Lease Term shall commence
on the date of delivery of this Lease and, subject to earlier termination as
provided herein, shall end on December 2, 2001. The Director agrees to deliver
to the Company full possession of the Project (subject to Section 7.2 hereof) at
the commencement of the Lease Term and the Company agrees to accept possession
of the Project upon such delivery. The Director covenants and agrees that it
will not take any action, other than pursuant to Article IX of this Lease, to
prevent the Company from having quiet and peaceable possession and enjoyment of
the Project during the Lease Term and will, at the request of the Company, and
at the Company's cost, cooperate with the Company in order that the Company may
have quiet and peaceable possession and enjoyment of the Project. This provision
shall not be construed to require cooperation by the Director with the Company
in any labor dispute.
Section 4.3. Rents and Other Amounts Payable. Not later than the
fifteenth (15th) day of the months of October 1991 and November 1991, the
Company shall pay as rent an amount equal to one half (1/2) of the difference
between (i) the amount of interest which will be due and payable on the Bonds on
December 1, 1991 and (ii) the amount received by the Trustee as accrued interest
on the Bonds upon their initial delivery. Not later than the fifteenth (15th)
day of each month commencing December 15, 1991 and continuing thereafter until
the principal of and interest on the Bonds shall have been fully paid or
provision for the payment thereof shall have been made in accordance with the
Trust Agreement, the Company shall pay as rent an amount equal to the sum of (i)
one sixth (1/6) of the amount of interest on the Bonds which will be payable on
the next succeeding date on which such interest is due to be paid, and (ii) one
sixth (1/6) of the amount of principal of the Bonds which will be payable
(whether at stated maturity or by redemption) on the next succeeding date on
which such principal is due to be paid; provided, however that rental payments
with respect to principal of the Bonds shall not commence until December 15,
1992. The Company shall receive a credit against the rent payment due in the
month of February of each year to the extent and in the manner provided in the
General Bond Order and the Series Bond Order. If the Company fails to make any
payment required by this paragraph on the due date thereof, the Trustee shall,
to the extent that funds are available therefor, transfer to the Debt Service
Account an amount equal to such payment from the Collateral Proceeds Account
and, if the balance in the Collateral Proceeds Account is insufficient, from the
Primary Reserve Account.
If the interest rate on the Bonds shall have been increased as a result
of the Company's failure to perform its obligations under Section 10.6 hereof
following the occurrence of a Determination of Taxability, the Company shall pay
as an additional rent payment, on the fifteenth (15th) day of the month
preceding the month in which occurs the first date on which interest at the
increased rate is due and payable on the Bonds, an amount equal to the interest
to become due and payable on the Bonds on such interest payment date reduced by
the sum of the
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rental payments allocable to interest on the Bonds made by the Company from the
immediately preceding interest payment date to and including the date of such
additional payment.
If moneys are transferred from the Primary Reserve Account or the
Collateral Proceeds Account to the Debt Service Account pursuant to the
provisions of Section 14 of the General Bond Order, and if no Event of Default
is then existing, the Company shall receive a credit against rental payments
payable hereunder, in inverse order of their maturity, in an amount equal to the
amount so transferred.
If no Event of Default is then existing and if the balance in the
Primary Reserve Account is greater than or equal to the aggregate amount of
rental payments to become due and payable during the remaining term of this
Lease, the Company may direct the Trustee to apply monies in the Primary Reserve
Account to monthly rental payments as they become due and, in such case and
notwithstanding the provisions of Section 4.5 hereof, the Company shall not be
required to deliver moneys to the Trustee to restore the balance in the Primary
Reserve Account to an amount equal to the Original Deposit.
Not later than the fifteenth (15th) day of each month, commencing
October, 1991, the Company shall pay to the Trustee (i) an amount equal to one
twelfth (1/12) of the Trustee's annual administrative fee (which annual
administrative fee shall be calculated at a rate equal to the sum of (A) $1,200
per million dollars for each million dollars or any part thereof of the first
five million dollars of outstanding principal amount of Bonds, and (B) $700 per
million dollars for each million dollars or any part thereof in excess of five
million dollars), constituting the fee of the Trustee in connection with its
administration of the Project Fund, the Primary Reserve Account and the
Collateral Proceeds Account, and (ii) an amount equal to .0104167% of the
outstanding principal amount of the Bonds ("Additional Rent"). The Company and
the Director acknowledge and agree that the Additional Rent is intended to
reimburse the Department of Development for a portion of the cost of
administering the Ohio Enterprise Bond Fund program.
The Company also agrees to pay to the Director reasonable expenses of
the Director related to the Project and requested by the Company or required by
this Lease or the Trust Agreement, or incurred in enforcing the provisions of
this Lease or the Trust Agreement and which are not otherwise required to be
paid by the Company under the terms of this Lease.
In the event Company should fail to make any of the payments required
in this Section 4.3, the item or installment so in default shall continue as an
obligation of the Company until the amount in default shall have been fully
paid, and the Company agrees to pay the same with interest thereon at the rate
of the Interest Rate for Advances. If any payment required by the first
paragraph of this Section 4.3 is not made by the first day of the month
following the month in which such payment is due, the Company shall pay, in
addition to such payment, a late payment charge of five percent (5%) of the
amount of such payment.
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Section 4.4. Place of Payments. The rent provided for in the first
paragraph of Section 4.3 hereof and the late payment charge provided for in the
last paragraph of Section 4.3 hereof shall be paid directly to the Trustee at
its principal corporate trust office for the account of the Director, and the
Trustee shall deposit such payments in the Debt Service Account. Additional Rent
shall be paid to the Trustee, who shall pay such amounts to the Director, not
less frequently than monthly, for deposit in the First Half Account (if received
by the Director between January 1 and June 30) or the Second Half Account (if
received by the Director between July 1 and December 31) created in the Trust
Agreement. The additional payments to be made to the Director under Section 4.3
hereof shall be paid directly to the Director for use as provided in such
Section.
Section 4.5. Primary Reserve Account. Upon delivery of this Lease and
in accordance with the General Bond Order and the Series Bond Order, the Company
shall deliver or cause to be delivered to the Trustee for deposit or credit to
the Primary Reserve Account either a sum of money equal to the Original Deposit
(which sum may, to the extent provided for in the Series Bond Order, be derived
from proceeds of the sale of the Bonds) or an Approved Letter of Credit in the
amount of the Original Deposit. In accordance with the provisions of the General
Bond Order and the Series Bond Order, the Trustee shall transfer moneys from the
Primary Reserve Account to the Debt Service Account (and shall draw on the
Approved Letter of Credit, if necessary, in order to obtain such moneys) if (a)
the Company shall have failed to make a rent payment required by the first
paragraph of Section 4.3 hereof, and (b) the balance in the Collateral Proceeds
Account is insufficient to provide funds for such transfer.
If, as a result of a transfer described in the immediately preceding
paragraph, the balance in the Primary Reserve Account is less than the Original
Deposit, the Trustee shall promptly notify the Company, by telephone and
confirmed in writing, of the amount of such deficiency, and the Company shall,
not later than ten (10) days after receipt of such notice, deliver to the
Trustee for deposit or credit to the Primary Reserve Account moneys or an
Approved Letter of Credit in the amount of such deficiency.
Pursuant to the Supplement, the Trustee is directed to draw upon the
Approved Letter of Credit prior to its expiration for the full amount thereof
and deposit the proceeds of such drawing in the Primary Reserve Account unless,
not later than thirty (30) days prior to the expiration of the Approved Letter
of Credit, the Company shall have delivered to the Trustee a replacement
Approved Letter of Credit in the same amount as the expiring letter of credit,
or evidence that the issuer of the Approved Letter of Credit has extended the
maturity thereof for a period of not less than one year (or to the final
maturity date of the Bonds, if earlier).
Pursuant to Section 14 of the General Bond Order, the Trustee shall,
under the circumstances described in said Section 14, transfer moneys from the
Primary Reserve Account to the Debt Service Account, and the Trustee shall draw
on the Approved Letter of Credit, if necessary, in order to obtain moneys to
make such transfer.
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Section 4.6. Obligation of the Company Hereunder Unconditional. The
obligations of the Company to make the payments required in Section 4.3 and
Section 4.5 hereof and to perform and observe the other agreements on its part
contained herein shall be absolute and unconditional and until such time as the
principal of and interest and premium, if any, on the Bonds shall have been
fully paid or provision for the payment thereof shall have been made in
accordance with the Trust Agreement, the Company (i) will not, subject to the
provisions of Section 8.6 hereof, suspend or discontinue any payments provided
for in Section 4.3 or Section 4.5 hereof, (ii) will perform and observe all of
its other agreements contained in this Lease, and (iii) except as provided in
Article X hereof, will not terminate the Lease for any cause including, without
limiting the generality of the foregoing, failure to complete the Project, any
acts or circumstances that may constitute failure of consideration, destruction
of or damage to the Project, commercial frustration of purpose, any change in
the tax or other laws or administrative rulings of or administrative actions by
the United States of America or the State or any political subdivision of
either, or any failure of the Director to perform and observe any agreement,
whether expressed or implied, or any duty, liability or obligation arising out
of or connected with this Lease or the Trust Agreement. Nothing contained in
this Section shall be construed to release the Director from the performance of
any of the agreements on its part contained in this Lease; and in the event
Director should fail to perform any such agreement on its part, Company may
institute such action against the Director as Company may deem necessary to
compel performance or recover its damages for nonperformance so long as such
action shall not impair the agreements on the part of the Company contained in
the next preceding sentence. The Company may, however, at its own cost and
expense and in its own name or in the name of the Director, prosecute or defend
any action or proceeding or take any other action involving third persons which
the Company deems reasonably necessary in order to secure or protect its right
of possession, occupancy and use hereunder, and in such event the Director
hereby agrees to cooperate fully with the Company and to take all action
necessary to effect the substitution of the Company for the Director in any such
action or proceeding if the Company shall so request. This provision shall not
be construed to require cooperation by the Director with the Company in any
labor dispute.
ARTICLE V
MAINTENANCE, TAXES AND INSURANCE
Section 5.1. Maintenance and Modifications of Project by the Company.
The Company agrees that during the Lease Term it will keep the Project including
all appurtenances thereto and the equipment and machinery therein in good repair
and good operating condition at its own cost.
The Company shall have the privilege of remodeling or making additions,
modifications or improvements to the Project from time to time as it, in its
discretion, may deem to be desirable for its uses and purposes, the cost of
which remodeling, additions, modifications and improvements shall be paid by the
Company, and the same (except any machinery, equipment or
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furniture installed pursuant to Section 8.7. hereof) shall be the property of
the Director and be included under the terms of this Lease as part of the
Project.
Section 5.2. Removal of Project Equipment. The Company shall not be
under any obligation to renew, repair or replace any inadequate, obsolete, worn
out, unsuitable, undesirable or unnecessary Project Equipment. The Company shall
have the privilege from time to time of substituting machinery, equipment and
related property for any Project Equipment; provided that the machinery and
equipment so substituted shall be of a value not less than the value of the
machinery or equipment replaced and shall not make the Project unsuitable for
the Project Purposes. Any such substitute machinery and equipment shall become
the property of the Director and be included under the terms of this Lease, and
the replaced Project Equipment shall become the property of the Company. The
Company shall promptly notify the Director and the Trustee of any substitutions
of machinery or equipment, which notice shall include a description of the
substituted machinery or equipment. The Company shall also have the privilege of
removing any Project Equipment, without substitution therefor; provided, that
the Company pays to the Director a sum equal to the then value of said Project
Equipment, as determined by an Independent Engineer selected by the Company, and
so long as any of the Bonds remain outstanding, the Company shall pay such
amounts directly to the Trustee for deposit in the Collateral Proceeds Account
and shall deliver to the Director and the Trustee a certificate signed by said
Independent Engineer setting forth the value of said Project Equipment and
stating that the removal of such equipment will not make the Project unsuitable
for the Project Purposes.
The Company may at any time while it is not in default under this Lease
remove from the Project any machinery or equipment purchased and installed by it
pursuant to Section 8.7 of this Lease and not included as Project Equipment.
In the event any removal of machinery or equipment under this Section
or Section 8.7 causes damage to existing buildings or structures, the Company
shall restore the same or repair such damage at its sole expense.
Company shall so request. This provision shall not be construed to
require cooperation by the Director with the Company in any labor dispute.
ARTICLE V
MAINTENANCE, TAXES AND INSURANCE
Section 5.1. Maintenance and Modifications of Project by the Company.
The Company agrees that during the Lease Term it will keep the Project including
all appurtenances thereto and the equipment and machinery therein in good repair
and good operating condition at its own cost.
The Company shall have the privilege of remodeling or making additions,
modifications or improvements to the Project from time to time as it, in its
discretion, may deem to be desirable
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for its uses and purposes, the cost of which remodeling, additions,
modifications and improvements shall be paid by the Company, and the same
(except any machinery, equipment or furniture installed pursuant to Section 8.7
hereof) shall be the property of the Director and be included under the terms of
this Lease as part of the Project.
Section 5.2. Removal of Project Equipment. The Company shall not be
under any obligation to renew, repair or replace any inadequate, obsolete, worn
out, unsuitable, undesirable or unnecessary Project Equipment. The Company shall
have the privilege from time to time of substituting machinery, equipment and
related property for any Project Equipment; provided that the machinery and
equipment so substituted shall be of a value not less than the value of the
machinery or equipment replaced and shall not make the Project unsuitable for
the Project Purposes. Any such substitute machinery and equipment shall become
the property of the Director and be included under the terms of this Lease, and
the replaced Project Equipment shall become the property of the Company. The
Company shall promptly notify the Director and the Trustee of any substitutions
of machinery or equipment, which notice shall include a description of the
substituted machinery or equipment. The Company shall also have the privilege of
removing any Project Equipment, without substitution therefor; provided, that
the Company pays to the Director a sum equal to the then value of said Project
Equipment, as determined by an Independent Engineer selected by the Company, and
so long as any of the Bonds remain outstanding, the Company shall pay such
amounts directly to the Trustee for deposit in the Collateral Proceeds Account
and shall deliver to the Director and the Trustee a certificate signed by said
Independent Engineer setting forth the value of said Project Equipment and
stating that the removal of such equipment will not make the Project unsuitable
for the Project Purposes.
The Company may at any time while it is not in default under this Lease
remove from the Project any machinery or equipment purchased and installed by it
pursuant to Section 8.7 of this Lease and not included as Project Equipment.
In the event any removal of machinery or equipment under this Section
or Section 8.7 causes damage to existing buildings or structures, the Company
shall restore the same or repair such damage at its sole expense.
The Director agrees to execute and deliver such documents as the
Company may properly request in connection with any action taken by the Company
in conformity with this Section 5.2. The removal from the Project of any portion
of the Project Equipment pursuant to the provisions of this Section shall not
entitle the Company to any abatement or diminution of the rents payable under
Section 4.3 hereof.
Section 5.3. Indemnification by the Company. The Company shall
indemnify and hold the Director, the Treasurer and the Trustee (including any
member, officer, director or employee thereof) (collectively, the "Indemnified
Parties") harmless against any and all claims, asserted by or on behalf of any
person, firm or corporation, private or public, arising or resulting from, or in
any way connected with (i) financing, installation, operation, use or
maintenance of the Project
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(including, but not limited to, claims relating to compliance with Chapter 4115,
Ohio Revised Code), (ii) any act, failure to act or misrepresentation by any
person, firm, corporation or governmental authority in connection with the
issuance, sale or delivery of the Bonds, (iii) any act, failure to act or
misrepresentation by any other Indemnified Party in connection with, or in the
performance of any obligation related to the issuance, sale and delivery of the
Bonds or under this Lease or the Trust Agreement, and (iv) any act, failure to
act or misrepresentation by the Company in connection with, or in the
performance of any obligation related to, the Federal Income Tax Compliance
Agreement, including all liabilities, costs and expenses, including reasonable
counsel fees, incurred in any action or proceeding brought by reason of any such
claim. In the event any action or proceeding is brought against any Indemnified
Party by reason of any such claim, such Indemnified Party will promptly give
written notice thereof to the Company. In case such notice shall be so given,
the Company shall be entitled to participate at its own expense in the defense
or, if it so elects, to assume at its own expense the defense of such claim,
suit, action or proceeding, in which event such defense shall be conducted by
counsel chosen by the Company and reasonably satisfactory to such Indemnified
Party against whom such action or proceeding is pending; but if the Company
shall elect not to assume such defense, it shall reimburse such Indemnified
Party for the reasonable fees and expenses of any counsel retained by such
Indemnified Party. If at any time the Indemnified Party becomes dissatisfied
with the selection of counsel by the Company, a new mutually agreeable counsel
shall be retained at the expense of the Company. Each Indemnified Party agrees
that the Company shall have the sole right to compromise, settle or conclude any
claim, suit, action or proceeding against any of the Indemnified Parties.
Notwithstanding the foregoing, each Indemnified Party shall have the right to
employ counsel in any such action at its own expense; and provided further that
such Indemnified Party shall have the right to employ counsel in any such action
and the fees and expenses of such counsel shall be at the expense of the Company
if: (i) the employment of counsel by such Indemnified Party has been authorized
by the Company, (ii) there reasonably appears that there is a conflict of
interest between the Company and the Indemnified Party in the conduct of the
defense of such action (in which case the Company shall not have the right to
direct the defense of such action on behalf of the Indemnified Party) or (iii)
the Company shall not in fact have employed counsel to assume the defense of
such action. The Company shall also indemnify the Indemnified Parties from and
against all costs and expenses, including reasonable counsel fees, lawfully
incurred in enforcing any obligations of the Company under this Lease. Anything
herein to the contrary notwithstanding, the foregoing agreements by the Company
to indemnify any Indemnified Party shall not apply to grossly negligent acts or
omissions or acts or omissions of willful misconduct on the part of such
Indemnified Party. The Company shall not be liable for any settlement of any
action or claim effected without its consent. The obligations of the Company
under this Section shall survive the termination of this Lease and shall be in
addition to any other rights, including without limitation, rights to indemnity
which any Indemnified Party may have at law, in equity, by contract or
otherwise.
Section 5.4. Taxes, Other Governmental Charges and Utility Charges. The
Company will pay, as the same respectively become due, all taxes, assessments,
whether general or special, and governmental charges of any kind whatsoever that
may at any time be lawfully assessed or
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levied against or with respect to the Project or any machinery, equipment or
other property installed or brought by the Company therein or thereon
(including, without limiting the generality of the foregoing, any taxes levied
upon or with respect to the receipts, income, or profits of the Director from
the Project which, if not paid, may become or be made a lien on the Project or a
charge on the revenues and receipts therefrom), and all utility and other
charges incurred in the operation, maintenance, use, occupancy and upkeep of the
Project, provided, that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of
years, the Company shall be obligated to pay only such installments as are
required to be paid during the Lease Term.
Section 5.5. Insurance Required. The Company shall insure the Project
in an aggregate amount equal to the replacement cost of the Project, but in any
event not less than the principal amount of Bonds outstanding from time to time,
against loss or damage by fire, boiler explosion, as well as such other risks as
are covered by the endorsement commonly known as "extended coverage", plus
vandalism and malicious mischief, in insurance companies authorized to issue
such policies in the State. Any insurance policy maintained by the Company
pursuant to this Section 5.5 may provide that the policy does not cover the
first $25,000 or less of loss, or such greater amount as may (with due regard to
insurance practices from time to time current with respect to equipment similar
to the Project Equipment) be approved in writing by the Director, with the
result that the Company is its own insurer to that extent. Any return of
insurance premium or dividends based upon such premium shall be due and payable
solely to the Company unless such premium shall have been paid by the Director
or Trustee.
As an alternative to the above, the Company may insure such property
under a blanket insurance policy or policies which cover not only such property
but other properties.
Section 5.6. Additional Provisions Respecting Insurance. Any insurance
policy issued pursuant to Section 5.5 hereof shall be so written or endorsed as
to make losses, if any, adjustable by the Company and payable to the Company and
the Trustee, for the account of the Director; provided, any such insurance
policy may be so written or endorsed as to make losses not in excess of $25,000
for each occurrence payable directly to the Company as hereinafter provided in
Section 6.1. Each insurance policy provided for in Section 5.5 and Section 5.8
hereof shall contain a provision to the effect that the insurance company shall
not cancel the same without first giving written notice thereof to the Director
and the Trustee at least thirty days in advance of such cancellation, and the
Company shall deliver to the Director and the Trustee duplicate copies or
certificates of insurance pertaining to each such policy of insurance procured
by the Company and shall keep such duplicate copies or certificates up to date.
Section 5.7. Application of Net Proceeds of Insurance. The Net proceeds
of the insurance carried pursuant to the provisions of this Lease shall be
applied as follows: (i) the Net Proceeds of the insurance required in Section
5.5 hereof shall be applied as provided in Section 6.1 hereof, and (ii) the Net
Proceeds of the insurance required in Section 5.8 hereof shall be
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applied toward extinguishment or satisfaction of the liability with respect to
which such insurance proceeds may be paid.
Section 5.8. Public Liability Insurance. The Company agrees that it
will carry public liability insurance with reference to its operations at the
Project with one or more reputable insurance companies duly qualified to do
business in the State, in minimum amounts of $1,000,000 for the death of or
personal injury to one person and $3,000,000 for personal injury or death for
each occurrence in connection with the Project and $500,000 for property damage
of any occurrence in connection with the Project, with a deductible not to
exceed $25,000. The Director and the Trustee shall be made additional insureds
under such policies. The insurance provided by this Section 5.8 may be by
blanket insurance policy or policies.
Section 5.9. Advances. In the event the Company shall fail to maintain
the full insurance coverage required by this Lease or shall fail to keep the
Project in good repair and operating condition, the Director or the Trustee may
(but shall be under no obligation to) take out the required policies of
insurance and pay the premiums on the same or may make such repairs or
replacements as are necessary and provide for payment thereof; and all amounts
so advanced therefor by the Director shall become an additional obligation of
the Company to the Director, which amounts, together with interest thereon at
the Interest Rate for Advances from the date thereof, the Company agrees to pay
on demand.
ARTICLE VI
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 6.1. Damage and Destruction. If prior to full payment of the
Bonds (or provision for payment thereof having been made in accordance with the
provisions of the Trust Agreement), the Project Equipment shall be damaged or
partially or totally destroyed by fire, flood, windstorm, or other casualty at
any time during the Lease Term, there shall be no abatement or reduction in the
rent payable by the Company under this Lease, and, to the extent that the claim
for loss resulting from such damage or destruction is not greater than $25,000
the Company (i) will promptly repair, rebuild or restore the property damaged or
destroyed with such changes, alterations and modifications (including the
substitution and addition of other property) as may be desired by the Company
and as will not make the Project unsuitable for the Project Purposes, and (ii)
will apply for such purpose so much as may be necessary of any Net Proceeds of
insurance policies resulting from claims for such losses not in excess of
$25,000 as well as any additional moneys of the Company necessary therefor. All
Net Proceeds of insurance resulting from claims for any such loss not in excess
of $25,000 shall be paid to the Company.
If prior to full payment of the Bonds (or provision for payment thereof
having been made in accordance with the provisions of the Trust Agreement), the
Project Equipment shall be destroyed (in whole or in part) or damaged by fire,
flood, windstorm or other casualty to such extent that the claim for loss
resulting from such destruction or damage is in excess of $25,000
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the Company shall promptly give written notice thereof to the Director and the
Trustee. All Net Proceeds of insurance policies resulting from claims for such
losses in excess of $25,000 shall be paid to and held by the Trustee in the
Collateral Proceeds Account, whereupon, unless the Company shall have elected to
exercise its option to purchase the Project pursuant to the provisions of
Section 10.2(a) of this Lease, (i) the Company will proceed to repair, rebuild
or restore the property damaged or destroyed with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by the Company and as will not make the Project unsuitable for the
Project Purposes, and (ii) the Trustee will disburse moneys in the Collateral
Proceeds Account to or upon the direction of the Company for payment of the
costs of such repair, rebuilding or restoration, either on completion thereof
or, if the Company shall so request, as the work progresses. Any such
disbursements shall be made pursuant to the procedures set forth in Section 3.3
of this Lease for disbursement of moneys in the Project Fund, including, but not
limited to, the requirement that the Company obtain the written approval of the
Director with respect to each disbursement. In the event the moneys in the
Collateral Proceeds Account are not sufficient to pay in full the costs of such
repair, rebuilding or restoration, the Company nonetheless will complete the
work and pay the costs thereof from its own resources. The Company shall not, by
reason of the payment of such excess costs, be entitled to any reimbursement
from the Director or any diminution in or postponement of the rents payable
under Section 4.3 of this Lease.
Section 6.2. Eminent Domain. In the event that title to or the
temporary use of the Project, or any part thereof, shall be taken under the
exercise of the power of eminent domain by any governmental body or by any
person, firm or corporation acting under governmental authority, there shall be
no abatement or reduction in the rent payable by the Company under this Lease
during the balance of the Lease Term, and any Net Proceeds received from any
award made in such eminent domain proceedings shall be paid to and deposited by
the Trustee in the Collateral Proceeds Account and shall be applied by the
Director or the Company in one or more of the following ways as shall be
directed in writing by the Authorized Company Representative:
(a) to the restoration of the improvements located on the
Project Site to substantially the same condition as they existed prior
to the exercise of said power of eminent domain;
(b) to the acquisition, by construction or otherwise, by the
Director or the Company of other improvements suitable for the
Company's operation at the Project (which improvements shall be deemed
a part of the Project and available for use and occupancy by the
Company without the payment of any rent other than herein provided, to
the same extent as if such other improvements were specifically
described herein and demised hereby); or
(c) to the redemption of all of the Bonds pursuant to the
Trust Agreement, together with accrued interest thereon to the date of
redemption upon exercise of the option to purchase authorized by
Section 10.2(b) of this Lease.
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Within ninety days from the date of entry of a final order in an eminent domain
proceeding granting condemnation, the Authorized Company Representative shall
direct the Director and the Trustee in writing as to which of the ways specified
in this Section the Company elects to have the Net Proceeds of the condemnation
award applied. Any balance of the Net Proceeds remaining after such application
shall be retained in the Collateral Proceeds Account.
The Director shall cooperate fully with the Company in the handling and
conduct of any prospective or pending condemnation proceedings with respect to
the Project or any part thereof and, to the extent it may lawfully do so, will
permit the Company to litigate in any such proceedings in its own name or in the
name and on behalf of the Director (except as such proceedings are instigated by
the Director, in which event the Company shall have the right to proceed as if
it were the owner of the Project). In no event will the Director 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 Company.
Section 6.3. Condemnation of Company Owned Property. The Company shall
be entitled to the Net Proceeds of any condemnation award or portion thereof
made for damages to or takings of its own property.
ARTICLE VII
SPECIAL COVENANTS
Section 7.1. No Warranty of Condition or Suitability. The Director does
not make any warranty, either express or implied, as to the condition,
workmanship, merchantability or capacity of the Project or any part thereof or
as to its or any part's suitability or operation for the Project Purposes.
At any time, upon request of the Company, so long as it is not in
default hereunder, the Director will assign to the Company all warranties and
guarantees of all contractors, subcontractors, manufacturers, suppliers and
engineers for the furnishing of labor, materials, supervision or design in
connection with the Project and any rights or causes of action against any of
the foregoing.
Section 7.2. Right of Access to the Project. The Company agrees that
the Director and any of the Director's duly authorized agents shall have the
right at all reasonable times to enter upon the Project Site and to examine and
inspect the Project. The Company further agrees that the Director and the
Director's duly authorized agents shall have such rights of access to the
Project as may be reasonably necessary to cause to be completed the construction
and installation provided for in Section 3.1 hereof, and thereafter for the
proper maintenance of the Project in the event of failure by the Company to
perform its obligations under Sections 3.1 or 5.1 hereof.
Sections 7.3. through 7.5 [Reserved]
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Section 7.6. Information Concerning Operations. At the request of the
Director and, in any event, within seventy-five (75) days after the last day of
each fiscal year of the Company beginning with the fiscal year in which the
Completion Date occurs, the Company shall furnish to the Director a report on
Project operations setting forth the total number of employees then employed on
the Project and such other employment, economic and statistical data concerning
the Project as may reasonably be requested by the Director.
Section 7.7. Affirmative Covenants of the Company. Throughout the Term
of this Lease, the Company shall:
(a) Taxes and Assessments. Pay and discharge promptly, or cause to
be paid and discharged promptly, when due and payable, all
taxes, assessments and governmental charges or levies imposed
upon it, its income or any of its property, or upon any part
thereof, as well as all claims of any kind (including claims
for labor, materials and supplies) which, if unpaid, might by
law become a lien or charge upon its property. Nothing in this
Section shall require the Company to pay or discharge any such
tax, assessment, governmental charge or levy so long as the
validity thereof shall be contested in good faith and by
appropriate legal proceedings, provided that the Company shall
have delivered to the Director an opinion of counsel, selected
by the Company and reasonably acceptable to the Director, to
the effect that nonpayment of any such items during the
pendency of such contest will not adversely affect the
Director's right, title or interest in the Project.
(b) Maintain Existence. Do or cause to be done all things
necessary to preserve and keep in full force and effect its
existence and its material rights and franchises.
(c) Maintain Property. Maintain and keep its property in good
repair, working order and condition, and from time to time
make all repairs, renewals and replacements which, in the
opinion of the Company, are necessary and proper so that the
business carried on in connection therewith may be properly
and advantageously conducted at all time; provided, however,
that nothing in this subsection (c) shall prevent the Company
from selling or otherwise disposing of any property whenever,
in the good faith judgment of the Company, such property is
obsolete, worn out, without economic value or unnecessary for
the conduct of the business of the Company.
(d) Maintain Insurance. Keep all of its insurable property insured
against loss or damage by fire and other risks, maintain
public liability insurance against claims for personal injury,
death, or property damage suffered by others upon, in or about
any premises occupied by the Company; and maintain all such
worker's compensation or similar insurance as may be required
under the laws of any state or jurisdiction in which it may be
engaged in business. All insurance for which
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provision has been made in this subsection (d) shall be
maintained against such risks and in at least such amounts
(but subject to such deductibles) as such insurance is usually
carried by persons engaged in the same or similar businesses,
and all insurance herein provided for ' shall be effected and
maintained in force under a policy or policies issued by
insurers of recognized responsibility, except that it may
effect worker's compensation or similar insurance in respect
of operations in any state or other jurisdiction either
through an insurance fund operated by such state or other
jurisdiction or by causing to be maintained a system or
systems of self-insurance which is in accordance with
applicable law.
(e) Furnish Information. Furnish to the Director:
(i) Quarterly Reports. Within forty-five (45) days after
the end of each quarterly period of each fiscal year
of the Company, the balance sheet of the Company as
at the end of such quarterly period, together with
related statements of income and retained earnings
(or accumulated deficit) and changes in financial
position for such quarterly period, setting forth in
comparative form the corresponding figures as at the
end of or for the corresponding quarter of the
previous fiscal year, all in reasonable detail,
prepared in accordance with generally accepted
accounting principles applied on a consistent basis,
subject to usual year-end audit adjustments.
(ii) Annual Reports. Within ninety (90) days after the
last day of each fiscal year of the Company, a copy
of its audit report containing a balance sheet of the
Company as at the end of such fiscal year, together
with related statements of income and retained
earnings (or accumulated deficit) and changes in
financial position for such fiscal year, setting
forth in comparative form the corresponding figures
as at the end of or for the previous fiscal year, all
in reasonable detail and all examined by and
accompanied by a review letter or opinion of its
independent certified public accountants to the
effect that such financial statements were prepared
in accordance with generally accepted accounting
principles consistently applied, and present fairly
the Company's financial position at the close of such
period and the results of its operations for such
period.
(iii) Certificates No Default. With the financial reports
required to be furnished under this Section, a
certificate of the Company's chief executive officer
or chief financial officer stating that (a) no Event
of Default has occurred and is continuing and no
event or circumstance which would constitute an Event
of Default, but for the requirement that notice be
given or time elapse or both, has occurred and is
continuing, or, if such an Event of Default or such
event or circumstance has occurred and is continuing,
a statement as to the nature thereof and the action
which the
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Company proposes to take with respect thereto, and
that (b) no action, suit or proceeding by it or
against it at law or in equity, or before any
governmental instrumentality or agency, is pending or
threatened, which, if adversely determined, would
materially impair the right or ability of the Company
to carry on the business which is contemplated in
connection with the Project or would materially
impair the right or ability of the Company to perform
the transactions contemplated by this Lease or would
materially and adversely affect its business,
operations, assets or condition, all as of the date
of such certificate, except as disclosed in such
certificate.
(iv) Other Information. Such other information respecting
the business, properties or the condition or
operations, financial or otherwise, of the Company as
the Director may reasonably request, provided that
reasonable provision is made for protecting
proprietary information of the Company.
(f) Deliver Notice. Forthwith upon learning of any of the
following, deliver written notice thereof to the Director,
describing the same and the steps being taken by the Company
with respect thereto:
(i) the occurrence of an Event of Default or an event or
circumstance which would constitute an Event of
Default, but for the requirement that notice be given
or time elapse or both, or
(ii) any action, suit or proceeding by it or against it at
law or in equity, or before any governmental
instrumentality or agency, instituted or threatened
which, if adversely determined, would materially
impair the right or ability of the Company to carry
on the business which is contemplated in connection
with the Project or would materially impair the right
or ability of the Company to perform the transactions
contemplated by this Lease, or would materially and
adversely affect its business, operations, assets or
condition, or
(iii) the occurrence of a Reportable Event, as defined in
the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), under, or the institution of
steps by the Company to withdraw from, or the
institution of any steps to terminate, any employee
benefit plan as to which the Company may have
liability.
(g) Inspection Rights. At any reasonable time and from time to
time, permit the Director, or any agents or representatives
thereof, to examine and make copies of and abstract from the
records and books of account of, and visit the properties of,
the Company and discuss the general business affairs of the
Company with any of its officers;-provided, however, that the
Company reserves the right to restrict
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access to any of its facilities in accordance with reasonably
adopted procedures relating to safety and security.
(h) Zoning, Planning and Environmental Regulations. The Provision
of the Project will be completed and the Project will be
operated and maintained in such manner as to conform with all
applicable zoning, planning, building, environmental and other
applicable governmental regulations (or variances therefrom)
imposed by any Governmental Authority and as to be consistent
with the purposes of the Act.
(i) Use of Project Fund Moneys. All moneys disbursed from the
Project Fund (except for any amounts transferred to the
Collateral Proceeds Account pursuant to the terms of this
Lease) shall be used for the payment of Allowable Costs
relating to Provision of the Project. No part of any such
moneys shall be knowingly paid to or retained by the Company
or any partner, officer, shareholder, director or employee of
the Company as a fee, kick-back or consideration of any type.
The Company has no identity of interest with, or interest in,
the general contractor or any architect, subcontractor,
laborer or materialman performing work or services of
supplying materials in connection with the Provision of the
Project; provided, however, that the Company may use and
compensate (at prevailing wages, as required by Section 3.1 of
this Lease) its own non- shareholder employees in connection
with the installation of the Project Equipment.
Section 7.8. Negative Covenants of the Company. Throughout the Lease
Term, the Company shall not without the prior written consent of the Director:
(a) Maintain Existence. Sell, transfer or otherwise dispose of
all, or substantially all, of its assets, consolidate with or
merge into any other entity, or permit one or more entities to
consolidate with or merge into it; provided, however, that the
Company may, without violating the agreement contained in this
subsection (a), consolidate with or merge into another entity,
or permit one or more other entities to consolidate with or
merge into it, or sell, transfer or otherwise dispose of all,
or substantially all, of its assets as a entity and thereafter
dissolve if: (i) the prior written consent of the Director is
obtained; or (ii)(A) the surviving, resulting or transferee
entity, as the case may be, assumes in writing all of the
obligations of the Company hereunder (if such surviving,
resulting or transferee entity is other than the Company); and
(B) the surviving, resulting or transferee entity, as the case
may be, is an entity duly organized and validly existing under
the laws of the State or duly qualified to do business
therein, and has a net worth of not less than that of the
Company immediately prior to such disposition, consolidation
or merger, transfer or change of form.
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(b) ERISA. Voluntarily terminate any employee benefit plan or
other plan (a "Plan") maintained for employees of the Company
and covered by Title IV of ERISA, so as to result in any
material liability of the Company to the Pension Benefit
Guaranty Corporation ("PBGC"), enter into any Prohibited
Transaction (as defined in Section 4975 of the Internal
Revenue Code of 1954, as amended, and in ERISA) involving any
Plan which results in any material liability of the Company to
the PBGC, cause any occurrence of any Reportable Event (as
defined in Title IV of ERISA) which results in any material
liability of it to the PBGC, or allow or suffer to exist any
ocher event or condition which results in any material
liability of the Company to the PBGC.
(c) Agreements. Enter into any agreement containing any provision
which would be violated or breached by the performance of its
obligations hereunder or under any instrument or document
delivered or to be delivered by it hereunder or in connection
herewith.
Section 7.9. Mechanics' and Other Liens. The Company shall not suffer
or permit any mechanics' or other liens to be filed or exist against the Project
nor any part thereof, nor against the Company's leasehold interest in the
Project, nor against the Project Fund or the Collateral Proceeds Account, by
reason of work, labor, services, or materials supplied or claimed to have been
supplied to, for or in connection with the Project or any part thereof or to the
Director or the Company or anyone holding the Project or any part thereof
through or under the Company. Nothing in this Section shall require the Company
to pay or discharge any such lien so long as the validity thereof shall be
contested in good faith and by appropriate legal proceedings, provided that the
Company shall have delivered to the Director an opinion of counsel, selected by
the Company and reasonably acceptable to the Director, to the effect that
nonpayment of any such lien during the pendency of such contest will not
adversely affect the Director's right, title or interest in the Project. If any
such liens shall at any time be filed, the Company shall, within one hundred
twenty days after notice of the filing thereof but subject to the right to
contest hereinafter set forth, cause the same to be discharged of record by
payment, deposit, bond, order of a court of competent jurisdiction or otherwise.
If the Company shall fail to cause such lien to be discharged, or to contest the
validity or amount thereof, within the period aforesaid, then, in addition to
any other right or remedy of the Director, the Director may, but shall not be
obligated to, discharge the same either by paying the amount claimed to be due
or by procuring the discharge of such lien by deposit or by bonding. Any amount
paid by the Director shall be reimbursed by the Company to the Director on
demand, and if not so reimbursed on demand shall be paid by the Company with
interest thereof at the Interest Rate for Advances from the date of payment by
the Director, which amounts the Company agrees to pay.
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ARTICLE VIII
ASSIGNMENT, SUBLEASING AND SELLING;
REDEMPTION; RENT PREPAYMENT AND ABATEMENT
Section 8.1. Assignment and Subleasing by the Lessee. This Lease may
not be assigned in whole or in part, nor may the Project be subleased as a whole
or in part, by the Company without the consent of the Director.
Section 8.2. Pledge by the Director. The Director has pledged any
moneys receivable under or pursuant to this Lease (except for reimbursement of
expenses and indemnification by the Company) to the Trustee pursuant to the
Trust Agreement. The Company hereby consents to such assignment and pledge.
Section 8.3. Restrictions on Transfer and Encumbrance of Project by the
Director. The Director agrees that, except as otherwise provided in this Lease,
it will not"sell, assign, transfer, convey or otherwise dispose of the Project
or any portion thereof during the Lease Term and that it will not, to the extent
permitted by law, take any action which may reasonably be construed as tending
to cause or induce the levy of special assessments by others against the Project
Site without the written consent of the Company, nor will it create or suffer to
be created any debt, lien or charge thereon or make any, pledge or assignment of
or create any lien or encumbrance upon the rents, revenues and receipts derived
from the sale, lease or other disposition of the Project other than as provided
in Section 8.2 hereof.
Section 8.4. Redemption of Bonds. The Director, at the written request
at any time of the Company if the Bonds are then callable, shall forthwith take
all steps that may be necessary under the applicable redemption provisions of
the Trust Agreement to effect redemption of all or part of then outstanding
Bonds, as may be specified by the Company, on the earliest redemption date on
which such redemption may be made under such applicable provisions, if the
Company shall then have deposited with the Trustee moneys sufficient to pay the
principal of and premium, if any, and interest due or to become due on such
redemption date with respect to the Bonds as to which such request is made.
Section 8.5. Prepayment of Rents. There is expressly reserved to the
Company the right, and Company is authorized and permitted, at any time it may
choose, to prepay all or any part of the rents payable under Section 4.3 hereof,
and the Director agrees that the Trustee may accept such prepayment of rents
when the same are tendered by the Company. Notwithstanding the provisions of
Section 4.4 of this Lease, prepaid rent shall be deposited to the Collateral
Proceeds Account and transferred to the Debt Service Account as rental payments
in the amounts and on the dates specified for rental payments pursuant to
Section 4.3 of this Lease.
Section 8.6. Lessee Entitled to Certain Rent Abatements if Bonds Paid
Prior to Maturity. If at any time during the Lease Term there shall be no Bonds
outstanding, within the meaning of
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the Trust Agreement, and if the Company is not at the time in default hereunder,
the Company shall be entitled to use and occupy the Project from such time to
the termination of the Lease, without the payment of the rent (but otherwise on
the terms and conditions hereof).
Section 8.7. Installation of the Company's Own Machinery and Equipment.
In addition to the Project Equipment, the Company may from time to time, in its
sole discretion and at its own expense, install additional movable personal
property, machinery, equipment, furniture or fixtures on the Project Site. All
such property so installed by the Company shall remain the sole property of the
Company in which the Director shall have no interest, and may be modified or
removed at any time while the Company is not in default hereunder. Nothing
contained in the preceding provisions of this Section shall prevent the Company
from purchasing, after delivery of this Lease, movable personal property,
machinery, equipment, furniture or fixtures, not constituting Project Equipment,
on conditional sale contract or lease sale contract, or subject to vendor's lien
or security agreement, as security for the unpaid portion of the purchase price
thereof; provided no such lien or security interest shall attach to any part of
the Project.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
Section 9.1. Event of Default. Each of the following shall be an "Event
of Default":
(a) The Company shall fail to pay any amount payable pursuant to
this Lease on the date on which such payment is due and
payable; or
(b) The Company shall fail to observe and perform any agreement,
term or condition contained in this Lease other than as
required pursuant to subsection (a) above, and such failure
continues for a period of thirty (30) days after notice of
such failure is given to the Company by the Director, or for
such longer period as the Director may agree to in writing;
provided, that if the failure is of such nature that it can be
corrected but not within the applicable period, such failure
shall not constitute an Event of Default so long as the
Company institutes curative action within the applicable
period and diligently pursues such action to completion; or
(c) Any representation or warranty made by the Company (or any of
its officers) herein or in any Lease Approval Document or in
connection herewith or therewith shall prove to have been
incorrect in any material respect when made; or
(d) The Company shall fail to pay any indebtedness of the Company,
or any interest or premium thereon, when due (whether by
scheduled maturity, required prepayment, by acceleration, on
demand or otherwise) and such failure shall continue after the
applicable grace period, if any specified in the agreement or
instrument relating to such indebtedness; or any other default
under any agreement
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or instrument relating to any such indebtedness, or any other
event, shall occur and shall continue after the applicable
grace period, if any, specified in such agreement or
instrument, if the effect of such default or event is to
accelerate, or to permit the acceleration of, the maturity of
such indebtedness; or any such indebtedness shall be declared
to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the
stated maturity thereof; or
(e) The Company commences a voluntary case concerning it under
titles of the United States Code entitled "Bankruptcy" as now
hereafter in effect, or any successor thereto (the "Bankruptcy
Code"); or an involuntary case is commenced against the
Company under the Bankruptcy Code and relief is ordered
against the Company, or the petition is controverted but is
not dismissed within sixty (60) days after the commencement of
the case; or the Company is not generally paying its debts as
such debts become due; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of the Company; or the
Company commences any other proceeding under any
reorganization, arrangement, readjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law
of any jurisdiction whether now or hereafter in effect; or
there is commenced against the Company any such proceeding
which remains undismissed for a period of sixty (60) days; or
the Company is adjudicated insolvent or bankrupt; or the
Company fails to controvert in a timely manner any such case
under the Bankruptcy Code or any such proceeding or any order
of relief or other order approving any such case or proceeding
or in the appointment of any custodian or the like of or for
it or any substantial part of its property or suffers any such
appointment to continue undischarged or unstayed for a period
of sixty (60) days; or the Company makes a general assignment
for the benefit of creditors; or any action is taken by the
Company for the purpose of effecting any of the foregoing; or
a receiver or trustee or any other officer or representative
of the court or of creditors, or any court, governmental
officer or agency, shall under color of legal authority, take
and hold possession of any substantial part of the property or
assets of the Company for a period in excess of sixty (60)
days; or
(f) A judgment or order for the payment of money in excess of Ten
Thousand Dollars ($10,000) shall be rendered against the
Company and either M enforcement proceedings shall have been
commenced by any creditor upon such judgment or order or (ii)
there shall be any period of thirty (30) consecutive days
during which a stay of enforcement of such judgment or order,
by reason of a pending appeal or otherwise, shall not be in
effect; or
(g) Any default under the Guaranty shall have occurred and be
continuing; or
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(h) The Company fails to meet its minimum funding requirements
under Section 301 et seq. of ERISA, with respect to any of its
Plans.
Section 9.2. Remedies on Default. Whenever an Event of Default shall
have happened and be subsisting, any one or more of the following remedial steps
may be taken:
(a) The Director may at its option declare all installments of
rent payable under Section 4.3 hereof for the remainder of the
Lease Term to be immediately due and payable, whereupon the
same shall become immediately due and payable.
(b) The Director may reenter and take possession of the Project
without terminating this Lease, and sublease the Project for
the account of the Company, holding the Company liable for the
difference between the rent and other amounts payable by such
sublessee in such subleasing and the rents and other amounts
payable by the Company hereunder.
(c) The Director may terminate the Lease Term, exclude the Company
from possession of the Project and use its best efforts to
lease or sell the Project to another, but holding the Company
liable for all rent and other payments due up to the effective
date of such leasing.
(d) The Director may direct the Trustee, in writing, to transfer
any amounts remaining in the Project Fund to the Collateral
Proceeds Account.
(e) The Director may take whatever action at law or in equity as
may appear necessary or desirable to collect the rent then due
and thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of the
Company under this Lease.
Any amounts collected pursuant to action taken under this Section shall be paid
into the Collateral Proceeds Account and applied in accordance with the
provisions of the Trust Agreement or, if the Bonds have been fully paid (or
provision for payment thereof has been made in accordance with the provisions of
the Trust Agreement) and all other amounts payable thereunder and hereunder have
been paid, as directed by the Company.
Section 9.3. No Remedy Exclusive. No remedy conferred upon or reserved
to the Director by this Lease 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. No delay or omission to exercise any
right or power accruing upon any default shall impair any such right or power or
shall be construed to be a waiver thereof, but any such right and power may be
exercised from time to time and as often as may be deemed expedient. In order to
entitle the
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Director to exercise any remedy reserved to it in this Article, it shall not be
necessary to give any notice, other than such notice As may be herein expressly
required.
Section 9.4. Agreement to Pay Attorneys' Fees and Expenses. In the
event the Company should default under any of the provisions of this Lease and
the Director should employ attorneys or incur other expenses for the collection
of rent or the enforcement of performance or observance of any obligation or
agreement on the part of the Company contained in this Lease, the Company agrees
that it will on demand therefor reimburse the reasonable fee of such attorneys
and such other expenses so incurred. If any such fees and expenses are not so
reimbursed, the amount thereof, together with interest thereon from the date of
demand for payment at the Interest Rate for Advances, shall, to the extent
permitted by law, constitute indebtedness secured hereby and by the Trust
Agreement, and in any action brought to collect such indebtedness, the Director
shall be entitled to seek the recovery of such fees and expenses in such action
except as limited by law or by judicial order or decision entered in such
proceedings.
Section 9.5. No Additional Waiver implied by One Waiver. In the event
any agreement contained in this Lease should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
Section 9.6. Waiver of Appraisement, Valuation, Etc. In the event the
Company should default under any of the provisions of this Lease, the Company
agrees to waive, to the extent it may lawfully do so, the benefit of all
appraisement, valuation, stay, extension or redemption laws now or hereafter in
force, and all right of appraisement and redemption to which it may be entitled.
Section 9.7. Reinstatement. Notwithstanding any termination of this
Lease in accordance with the provisions of Section 9.2 hereof, unless and until
the Director shall have entered into a valid and binding agreement providing for
the reletting of the Project, the Company may at any time after such termination
pay all accrued unpaid rent plus any costs to the Director and the Trustee
(including, but not limited to, fees and expenses) occasioned by the default and
fully cure all other defaults then capable of being cured. Upon such payment and
cure, this Lease shall be fully reinstated, as if it had never been terminated,
and the Company shall be restored to the use, occupancy and possession of the
Project.
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ARTICLE X
OPTIONS AND OBLIGATIONS TO PURCHASE PROJECT
Section 10.1. Option to Terminate. The Company shall have the option to
cancel or terminate the term of this Lease at any time when all the Bonds shall
be deemed to have been paid and discharged under the provisions of the Trust
Agreement and all amounts payable by the Company hereunder shall have been paid.
Such option shall be exercised by giving the Director notice in writing of such
cancellation or termination and such cancellation and termination shall
forthwith become effective.
Section 10.2. Option to Purchase Project Prior to Payment of the Bonds.
The Company shall have, and is hereby granted, the option to purchase the
Project prior to the expiration of the Lease and prior to the full payment of
the Bonds (or provision for payment thereof having been made in accordance with
the provisions of the Trust Agreement), if any of the following shall have
occurred:
(a) The Project Equipment shall have been damaged or destroyed
as set forth in Section 6.1 hereof (i) to such extent that they cannot
be reasonably restored within a period of six months to the condition
thereof immediately preceding such damage or destruction, or (ii) to
such extent chat the Company is thereby prevented from carrying on its
normal operations for a period of six consecutive months.
(b) Title to, or the temporary use of, all or substantially
all of the Project shall have been taken under the exercise of the
power of eminent domain by any governmental authority, or person, firm
or corporation acting under governmental authority (including such a
taking or takings as results in the Company being thereby prevented
from carrying on its normal operations therein for a period of six
consecutive months).
(c) As a result of any changes in the Constitution of the
State of Ohio or the Constitution of the United States of America or of
legislative or administrative action (whether state or federal) or by
final decree, judgment or order or any court or administrative body
(whether state or federal) entered after the contest thereof by the
Director in good faith, this Lease shall have become void or
unenforceable or impossible of performance in accordance with the
intent and purpose of the parties as expressed in this Lease, or if
unreasonable burdens or excessive liabilities shall have been imposed
upon the Director or the Company, with respect to the Project or
operation thereof, including without limitation federal, state or other
ad valorem, property, income or other taxes not being imposed on the
date of this Lease other than ad valorem taxes presently levied upon
privately owned property used for the same general purpose as the
Project; provided, that the provisions of this subsection shall in no
way effect the Company's obligation for the continued maintenance of
the Project during the Lease Term.
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To exercise such option, the Company shall, within ninety days following the
event authorizing the exercise of such option, give written notice to the
Director, and to the Trustee if any of the Bonds shall then be unpaid, and shall
specify therein the date of closing such purchase, which date shall be not less
than forty-five nor more than ninety days from the date such notice is mailed,
and in case of a redemption of the Bonds in accordance with the provisions of
the Trust Agreement shall make arrangements satisfactory to the Trustee for the
giving of the required notice of redemption, in which arrangements Director
shall cooperate. The purchase price payable by the Company, in the event of its
exercise of the option granted in this Section, shall be the sum of the
following:
(1) An amount of money which, when added to (i) the moneys and
investments held to the credit of the Collateral Proceeds Account and
the Primary Reserve Account and (ii) the aggregate rental payments made
by the Company and not theretofore applied to the payment of principal
of or interest on the Bonds, will be sufficient pursuant to the
provisions of the Trust Agreement, to pay and discharge all then
outstanding Bonds on the first possible date for redemption, plus
(2) An amount of money equal to the Trustee's fees and expenses, to the
extent payable by the Company pursuant to this Lease, accrued and to
accrue until such final payment and redemption of the Bonds, plus
(3) The sum of One Dollar ($1.00) to the Director.
In the event of the exercise of the option granted in this Section any Net
Proceeds of insurance or condemnation shall be paid to the Company,
notwithstanding any provision of Section 6.1 and 6.2 hereof, and the Director
will deliver to the Company the documents referred to in Section 10.4 hereof.
The mutual agreements contained in this Section 10.2, are independent
of, and constitute an agreement separate and distinct from any and all
provisions of this Lease and shall be unaffected by any fact or circumstance
which might impair or be alleged to impair the validity of any other provisions.
Section 10.3. Agreement to Purchase Project. The Company agrees that it
will purchase and the Director agrees that it will sell the Project for One
Dollar ($1.00) upon full payment of the Bonds or provision for payment thereof
having been made in accordance with the provisions of the Trust Agreement. Upon
sale of the Project to the Company as provided in this Section 10.3, the
Director will deliver to the Company the documents referred to in Section 10.4
hereof.
Section 10.4. Conveyance upon Exercise of Option to Purchase. Upon
exercise of any option to purchase granted herein, the Director will upon
payment of the purchase price deliver or cause to be delivered to the Company
documents conveying to the Company good and marketable title to the property
being purchased, as such property then exists, subject to the
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following: (i) those liens and encumbrances, if any, to which title to said
property was subject when conveyed to the Director; (ii) those liens and
encumbrances created by the Company or to the creation or suffering of which the
Company consented; (iii) those liens and encumbrances resulting from the failure
of the Company to perform or observe any of the agreements on its part contained
in this Lease; and (iv) if the option is exercised pursuant to the provisions of
Section 10.2(b) hereof, the rights and title of the condemning authority.
Section 10.5. Option to Purchase, Redeem or Defease Bonds. Provided no
Event of Default has occurred and is existing, the Company may instruct the
Trustee to apply any moneys on deposit in the Collateral Proceeds Account,
together with any moneys furnished to the Trustee by the Company but not
constituting payments due under Article IV of this Lease, to any of the
following purposes:
(a) Purchase of Bonds in the open market at prices not greater
than their fair market value;
(b) Redemption of Bonds pursuant to the optional redemption
provisions thereof; or
(c) Defeasance of Bonds pursuant to Article IX of the Trust
Agreement.
If the sum of the amounts in the Collateral Proceeds Account and the Primary
Reserve Account, when added to the amount delivered by the Company to the
Trustee for application in accordance with this Section 10.5, is sufficient to
purchase for cancellation, optionally redeem or defease all of the Outstanding
Bonds, the Trustee shall, at the direction of the Company, apply moneys in the
Primary Reserve Account for any of such purposes.
Section 10.6. Purchase of Project Upon Determination of Taxability. Not
later than thirty (30) days after the occurrence of a Determination of
Taxability, the Company shall purchase from the Director, and the Director shall
sell to the Company, the Project. The purchase price shall be determined in the
manner set forth in Section 10.2 of this Lease, except that the amount
determined pursuant to clause (1) of said Section 10.2 shall be determined with
reference to the actual date set for redemption of the Bonds. Upon sale of the
Project to the Company as provided in this Section 10.5, the Director will
deliver to the Company the documents referred to in Section 10.4 hereof.
ARTICLE XI
MISCELLANEOUS
Section 11.1. Surrender of Project. In the event the Company should
default under this Lease and the Lease Term is terminated, the Company agrees to
surrender possession of the Project peaceably and promptly to the Director in as
good condition as prevailed at the time it
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was put in full possession thereof, loss by fire or other casualty covered by
insurance, ordinary wear and tear, obsolescence and acts of God excepted.
Section 11.2. Amounts Remaining in Collateral Proceeds Account and
Primary Reserve Account. It is agreed by the parties hereto that any amounts
remaining in the Collateral Proceeds Account or the Primary Reserve Account upon
expiration or sooner cancellation or termination of this Lease, after payment in
full of the Bonds (or provision for payment thereof having been made in
accordance with the provisions of the Trust Agreement) and the fees, charges and
expenses of the Trustee and all other amounts required to be paid hereunder,
shall belong to and be paid to the Company by the Trustee as overpayment of
rents.
Section 11.3. Notices. All notices, certificates, requests or other
communications hereunder shall be sufficiently given and shall be deemed given
when mailed by registered or certified mail, postage prepaid, addressed to the
recipient at its Notice Address. A duplicate copy of each notice, certificate,
request or other communication given hereunder to the Director, the Company, or
the Trustee shall also be given to the others. The Company, the Director and the
Trustee may, by notice given hereunder, change a Notice Address or designate any
further addresses to which subsequent notices, certificates, requests or ocher
communications shall be sent.
Section 11.4. Net Lease. This Lease shall be deemed and construed to be
a "net lease", and the Company shall pay absolutely net during the Lease Term
the rent and all other payments required hereunder, free of any deductions,
without abatement, deduction or set-off other than those herein expressly
provided.
Section 11.5. Binding Effect. This Lease shall inure to the benefit of
and shall be binding upon the Director, the Company and their respective
successors and assigns, subject, however, to the limitations contained in
Sections 8.1 and 8.3 hereof, and subject to the further limitation, as set forth
on page 1 of this Lease, chat any obligation of the Director created by or
arising out of this Lease shall not be a general debt of the Director or the
State but shall be payable solely out of the proceeds derived from this Lease or
the Net Proceeds of any insurance or condemnation awards as provided herein.
Section 11.6. Extent of Covenants of the Director; No Personal
Liability. All covenants, stipulations, obligations and agreements of the
Director contained in this Lease shall be effective to the extent authorized and
permitted by applicable law. No such covenant, stipulation, obligation or
agreement shall be deemed to be a covenant, stipulation, obligation or agreement
of any present or future Director in other than such Director's official
capacity acting pursuant to the Act.
Section 11.7. Amendments, Changes and Modifications. This Lease may not
be effectively amended, changed or modified except by an instrument in writing
executed by the Director and the Company. No amendment to the Supplement which
has the effect of increasing
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the Company's obligations under this Lease shall become effective without the
written consent of the Company.
Section 11.8. Execution Counterparts. This Lease may be executed in
several counterparts, each of which shall be regarded as an original and all of
which shall constitute but one and the same Lease.
Section 11.9. Severability. If any clause, provision or section of this
Lease be held illegal or invalid by any court, the invalidity of such clause,
provision or section shall not affect any of the remaining clauses, provisions
or sections hereof and this Lease shall be construed and enforced as if such
illegal or invalid clause, provision or section had not been contained herein.
In case any agreement or obligation contained in this Lease be held to be in
violation of law then such agreement or obligation shall be deemed to be the
agreement or obligation of the Director or the Company, as the case may be, to
the full extent permitted by law.
Section 11.10. Captions. The captions or headings in this Lease are for
convenience only and in no way define, limit or describe the scope or intent of
any provisions or sections of this Lease.
Section 11.11. Governing Law. This Lease shall be deemed to be a
contract made under the laws of the State of Ohio and for all purposes shall be
governed by and construed in accordance with the laws of the State of Ohio.
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IN WITNESS WHEREOF, the Director and the Company have caused this Lease
to be executed in their respective names by their duly authorized officers, all
as of the date first above written.
Signed and acknowledged DIRECTOR OF DEVELOPMENT OF THE
in the presence of: STATE OF OHIO
/s/ Xxxxxx X. Xxxxxxxx By: /s/ Xxxxxx X. Xxxx
----------------------------- -------------------------------
Xxxxxx X. Xxxx, Deputy Director
/s/Xxxxxxx X. Xxxxx
-----------------------------
Signed and acknowledged LUIGINO'S, INC.
in the presence of:
/s/Xxxxx X. Xxxxxxx By: /s/ Xxxxxx X. Xxxxx
----------------------------- -------------------------------
Title: Executive Vice President of
Operations
/s/ Xxxxx X. Xxxxxxx
-----------------------------
STATE OF OHIO :
: ss.
COUNTY OF FRANKLIN :
On this 18th day of September, 1991, before me, a Notary Public in and
for said County and State, personally appeared Xxxxxx X. Xxxx, Deputy Director
of the Department of Development of the State of Ohio, and acknowledged the
execution of the foregoing instrument and that the same is his voluntary act and
deed on behalf of the Director of Development of the State of Ohio and the
voluntary act and deed of said officer as such.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official
seal on the day and year aforesaid.
/s/ Xxxxxxx X. Xxxxx
---------------------------
Notary Public
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STATE OF OHIO :
: ss.
COUNTY OF FRANKLIN :
On this 25th day of September, 1991, before me, a Notary Public in and
for said County and State, personally appeared Xxxxxx X. Xxxxx, Executive Vice
President of Operations of Luigino's, Inc., the corporation which executed the
foregoing instrument, who acknowledged that he did sign said instrument as such
officer, for and on behalf of said corporation; that the same is his free act
and deed as such officer, and the free act and deed of said corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my
seal on the day and year aforesaid.
/s/ Xxxxxxx X. Xxxxx
----------------------------
Notary Public
This instrument was prepared by Xxxxxxx X. Xxxx, Esq., Xxxxxxx & Xxxxxx, 000
Xxxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx.
*Filed without exhibits and schedules. Such exhibits will be filed with the
Commission upon request.
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