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Exhibit 10-V
EXECUTION COPY
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LEASE
between
XXXXXX-XXXXX COUNTY PORT AUTHORITY, Lessor
and
BRUSH XXXXXXX INC., Lessee
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Dated
as of
October 1, 1996
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This Lease was executed in ten
counterparts, of which this is
Counterpart No. 1. No assignment of or
security interest in this Lease may be
perfected without possession of executed
Counterpart No. 1 of this Lease.
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TABLE OF CONTENTS
(This Table of Contents is not a part of the Lease
but rather is for convenience of reference only.)
PAGE
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Preambles................................................................................................. 1
ARTICLE I
DEFINITIONS
Section 1.1 Use of Defined Terms....................................................................... 2
Section 1.2 Definitions................................................................................ 2
Section 1.3 Interpretation............................................................................. 8
Section 1.4 Captions and Headings...................................................................... 8
ARTICLE II
LEASE OF PROJECT
Section 2.1 Lease; Lease Term; Possession and Use...................................................... 9
Section 2.2 Ground Lease............................................................................... 9
Section 2.3 Representations of the Lessor.............................................................. 9
Section 2.4 Representations of the Lessee.............................................................. 9
Section 2.5 Lessee Required to Pay Costs in Event
Proceeds Insufficient............................................................ 10
ARTICLE III
RENTAL PAYMENTS AND ADDITIONAL PAYMENTS
Section 3.1 Rental Payments............................................................................ 12
Section 3.2 Additional Payments........................................................................ 12
Section 3.3 Place of Payments.......................................................................... 12
Section 3.4 Obligations Unconditional.................................................................. 12
Section 3.5 Past Due Rent, Additional Payments and Rentals............................................. 13
Section 3.6 Assignment of Lease........................................................................ 13
Section 3.7 No Abatement of Rental Payments............................................................ 14
ARTICLE IV
LESSEE'S OWN PERSONAL PROPERTY
Section 4.1 Installation of the Lessee's Own Personal Property......................................... 15
ARTICLE V
MAINTENANCE AND USE OF PROJECT
Section 5.1 Compliance with Legal and Insurance Requirements........................................... 17
Section 5.2 Maintenance and Use of Project............................................................. 17
Section 5.3 Alterations, Additions and Improvements.................................................... 18
Section 5.4 Removals and Substitutions................................................................. 18
Section 5.5 Indemnification............................................................................ 19
Section 5.6 Environmental Matters...................................................................... 21
Section 5.7 Performance by Lessor of Lessee's Requirements............................................. 00
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XXXXXXX XX
XXXXX, XXXXXXXXX' LIENS AND INSURANCE
Section 6.1 Taxes, Other Governmental Charges and
Utility Charges.................................................................. 23
Section 6.2 Mechanics' and Other Liens................................................................. 23
Section 6.3 Insurance.................................................................................. 24
Section 6.4 Workers' Compensation and Unemployment Coverage............................................ 24
Section 6.5 Waiver of Subrogation...................................................................... 24
Section 6.6 Payment of Amounts Not Paid by Lessee...................................................... 25
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damage to or Destruction of Project........................................................ 26
Section 7.2 Use of Insurance Proceeds.................................................................. 26
Section 7.3 Eminent Domain............................................................................. 26
Section 7.4 Investment and Disbursement of Net Proceeds................................................ 27
Section 7.5 Lessee's Own Personal Property............................................................. 27
ARTICLE VIII
FURTHER REPRESENTATIONS AND AGREEMENTS
RESPECTING THE PROJECT
Section 8.1 Right of Access............................................................................ 28
Section 8.2 Lessee to Maintain its Corporate Existence
Conditions Under Which Exceptions Permitted...................................... 28
Section 8.3 Title of Project Site...................................................................... 28
Section 8.4 No Warranty of Condition or Suitability.................................................... 28
Section 8.5 Annual Statement and Other Reports......................................................... 29
ARTICLE IX
TERMINATION OF LEASE
Section 9.1 Option to Terminate on Payment of Rental
Payments......................................................................... 30
Section 9.2 Termination of Lease on Substantial Casualty
or Condemnation.................................................................. 30
Section 9.3 Option to Purchase Lessor's Interest in Project............................................ 31
Section 9.4 Conveyance on Exercise of Option to Purchase............................................... 32
ARTICLE X
EVENTS OF DEFAULT
Section 10.1 Events of Default.......................................................................... 34
Section 10.2 Remedies on Default........................................................................ 35
Section 10.3 No Remedy Exclusive........................................................................ 36
Section 10.4 Lessee to Pay Attorneys' Fees and Expenses................................................. 36
Section 10.5 No Additional Waiver Implied by One Waiver................................................. 36
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ARTICLE XI
ASSIGNMENT OF LEASE, SUBLEASING AND RELEASE
OF PORTIONS OF PROJECT
Section 11.1 Subleasing by Lessee....................................................................... 37
Section 11.2 Mortgage and Assignment by Lessor.......................................................... 37
Section 11.3 Restrictions on Transfer and Encumbrance of
Project by the Lessor..................................................................... 38
Section 11.4 Release of Project......................................................................... 38
Section 11.5 Granting Easements......................................................................... 39
Section 11.6 No Abatement or Diminution of Payments..................................................... 39
Section 11.7 Payment on Release or Conveyance........................................................... 39
Section 11.8 Lessor to Apply Lease Payments to Debt Amortization
During Any Extension of Lease Term................................................. 39
ARTICLE XII
MISCELLANEOUS
Section 12.1 Quiet Enjoyment............................................................................ 41
Section 12.2 Surrender of Project....................................................................... 41
Section 12.3 Notices ................................................................................... 41
Section 12.4 Binding Effect............................................................................. 41
Section 12.5 Amendments, Changes and Modifications...................................................... 41
Section 12.6 Execution Counterparts..................................................................... 41
Section 12.7 Severability............................................................................... 41
Section 12.8 Extent of Covenants; No Personal Liability................................................. 42
Section 12.9 Captions................................................................................... 42
Section 12.10 Governing Law.............................................................................. 42
Section 12.11 Estoppel Certificate....................................................................... 42
Section 12.12 Relationship of the Parties................................................................ 42
Section 12.13 Arbitration................................................................................ 42
Section 12.14 Other Agreements........................................................................... 43
Section 12.15 No Merger.................................................................................. 43
Section 12.16 Extension of Lease Term.................................................................... 43
Signatures................................................................................................ 45
Acknowledgments........................................................................................... 46
Exhibit A - PROJECT FACILITIES
Exhibit B-1 - LEASED REAL PROPERTY
Exhibit B-2 - EASEMENT REAL PROPERTY
Exhibit C - RENTAL PAYMENT AMOUNTS
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LEASE
THIS LEASE made and entered into as of October 1, 1996, between
XXXXXX-XXXXX COUNTY PORT AUTHORITY, as lessor (the "Lessor"), a port authority
and political subdivision, duly organized and validly existing under the laws of
the State of Ohio, and BRUSH XXXXXXX INC., as lessee (the "Lessee"), a
corporation for profit organized and existing under the laws of the State of
Ohio (all terms used as defined terms being used as defined in Article I of this
Lease),
WITNESSETH:
WHEREAS, pursuant to and in accordance with the provisions of the
Ohio Constitution and the Act, and a resolution adopted by the Legislative
Authority on May 23, 1996, as amended and supplemented by a resolution adopted
by the Legislative Authority on July 25, 1996, the Lessor has determined, upon
the terms and conditions hereinafter set forth, to lease the Project to the
Lessee and the Lessee desires, upon the terms and conditions hereinafter set
forth, to lease the Project from the Lessor; and
WHEREAS, the Lessor and the Lessee each have full right and
lawful authority to enter into this Lease and to perform and observe the
provisions hereof on their respective parts to be performed and observed;
NOW THEREFORE, in consideration of the premises and the mutual
agreements hereinafter contained, the parties hereto agree as follows:
(Balance of Page Intentionally Left Blank)
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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 the Indenture, the
words and terms set forth in Section 1.2 of this Lease shall have the meanings
set forth therein unless the context or use indicates another or different
meaning or intent and such definitions shall be equally applicable to both the
singular and plural forms of any of the words and terms herein:
Section 1.2. DEFINITIONS. As used herein:
"Act" means Sections 4582.01 to 4582.20, both inclusive, of the
Ohio Revised Code, as enacted and amended.
"Additional Bonds" means the Additional Bonds of the Lessor which
may be issued under and as defined in the Indenture.
"Additional Payments" means the amounts required to be paid by
the Lessee pursuant to the provisions of Section 3.2 hereof.
"Assignment of Lease" means the Assignment of Lease, dated as of
even date herewith, transferring all right, title and interest of the Lessor in
and to this Lease to the Trustee.
"Authorized Lessee Representative" means the person at the time
designated to act on behalf of the Lessee by written certificate furnished to
the Lessor containing the specimen signature of such person and signed on behalf
of the Lessee by the President, a Vice President, the Treasurer or the Secretary
of the Lessee. Such certificate may designate an alternate or alternates who
shall have the same authority, duties and powers as the Authorized Lessee
Representative. In the event that all such incumbents become unavailable or
unable to act and the Lessee fails to designate at least one replacement within
ten business days after notice to the Lessee from the Lessor of such
unavailability or inability to act, the Lessor may appoint a successor.
"Bond Service Charges" means, for any period or payable at any
time, the principal of and interest and any premium due on the Bonds for that
period or payable at that time whether due at maturity or upon acceleration or
redemption.
"Bonds" means the Project Bonds and any Additional Bonds.
"Capitalized Interest Account" means the Capitalized Interest
Account in the Project Fund, including the Project Bonds Capitalized Interest
Subaccount and the State Loan Capitalized Interest Subaccount.
"CERCLA" shall mean the Comprehensive Environmental Response
Compensation and Liability Act of 1980, as amended, 42 U.S.C. "9601 ET SEQ.
"Completion Date" means the date specified as such in the
certificate furnished pursuant to Sections 2.2 and 4.6 of the Project Service
Agreement.
"Construction Contract" means the Design/Build Agreement for
Project Facilities, dated _________, 1996, by and between the Authority and GEM
Industrial, Inc., as the same may be amended and supplemented from time to time.
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"Consumer Price Index Increase" means the percentage of increase
in the Consumer Price Index for Urban Wage Earners and Clerical Workers as
finally issued for Cleveland, Ohio by the Bureau of Labor Statistics of the
United States Department of Labor, or any successor thereto, from that index as
issued for the month of the execution and delivery of this Lease. In the event
such index should be abolished and no substitute provided, then any index,
service or publication which, in the judgment of the Lessor, most nearly
provides the measurement now being provided by the Consumer Price Index shall be
used in place of the Consumer Price Index.
"Corporation Account" means the account in the Project Fund
created by the Indenture into which moneys will be deposited pursuant to Section
2.5 of this Lease.
"Director" means The Director of Development of the State of
Ohio, acting on behalf of the State.
"Discounted Rent" shall mean the amount of the Rental Payments,
determined in the manner set forth in Section 9.2 of this Lease, to be paid in
full satisfaction of the Lessee's obligation to pay the remaining Rental
Payments hereunder in the event that, as a result of the occurrence of any of
the events described in Section 9.2 of this Lease, the Lessee shall have
certified that it will prepay all remaining Rental Payments by paying the
Discounted Rent and terminate the Lease.
"Easement Agreement" means the Easement Agreement, dated as of
October 1, 1996, from the Lessee, as grantor, to the Lessor, as amended and
supplemented from time to time.
"Engineer" means Hatch Associates Consultants (Ohio) Inc. or
another individual or firm qualified to practice the profession of engineering
or architecture under the laws of the State, designated by the Lessor and
acceptable to the Lessee.
"Environmental Complaint" shall have the meaning set forth in
Section 5.6 hereof.
"Environmental Laws" means all applicable federal, state and
local environmental, land use, zoning, health, chemical use, safety and
sanitation laws, statutes, ordinances and codes relating to the protection of
the environment and/or governing the use, storage, treatment, generation,
transportation, processing, handling, production or disposal of Hazardous
Substances and the rules, regulations, policies, guidelines, interpretations,
decisions, orders and directives of federal, state and local governmental
agencies and authorities with respect thereto, including, without limitation,
CERCLA and Chapter 3734 of the Ohio Revised Code.
"Essential Lessor Personal Property" has the meaning assigned in
Section 5.2(f).
"Event of Default" means any of the events described as an event
of default in Section 10.1 hereof.
"Fair Market Value" of any property as of any date shall mean the
rental payment in money or the cash price that would be obtained in an
arm's-length lease or sale, as the case may be, between an informed and willing
third party lessee or buyer (under no compulsion to lease or purchase) and an
informed and willing lessor or seller (under no compulsion to lease or sell) of
the property in question, and shall be determined on the basis that the Project
has been maintained in accordance with the requirements of this Lease (but
otherwise on an "as-is" basis). Whenever Fair Market Value is to be determined
hereunder and the parties cannot agree on the Fair Market Value, the
determination shall be made according to the arbitration provision set forth in
Section 12.13 hereof. Fair Market Value shall be determined without regard to
and exclusive of modifications (other than substitutions) and additions to the
Project during the Lease Term paid for by the Lessee.
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"Ground Lease" means the Amended and Restated Ground Lease dated
as of October 1, 1996 from the Ground Lessor to the Ground Lessee, leasing to
the Ground Lessee the interest in the Project Site which is the subject of this
Lease, as amended and supplemented from time to time.
"Ground Lessee" means the lessee under the Ground Lease,
including without limitation, any Permitted Leasehold Mortgagee that executes an
agreement agreeing to perform the obligations of the Lessee under the Ground
Lease.
"Ground Lessor" means Brush Xxxxxxx Inc., as lessor under the
Ground Lease.
"Hazardous Discharge" shall have the meaning set forth in Section
5.6 hereof.
"Hazardous Substance" means, without limitation, any flammable
explosives, radon, radioactive materials, asbestos, urea formaldehyde foam
insulation, polychlorinated biphenyls, petroleum and petroleum products,
methane, hazardous materials, hazardous wastes, hazardous or toxic substances or
related materials as defined in CERCLA, the Hazardous Materials Transportation
Act, as amended (49 U.S.C. "1801, ET SEQ.), RCRA, or any other applicable
Environmental Law and in the regulations adopted pursuant thereto. "Hazardous
Substance" does not include beryllium or beryllium alloys.
"Hazardous Wastes" includes all waste materials subject to
regulation under CERCLA, RCRA or applicable state law, and any other applicable
federal and state laws now in force or hereafter enacted relating to hazardous
waste disposal.
"Holder" means the person in whose name a Bond is registered on
the books kept and maintained for the registration and transfer of Bonds
pursuant to the Indenture.
"Indenture" means the Trust Indenture dated as of even date with
this Lease between the Lessor and the Trustee, as amended and supplemented from
time to time.
"Independent Counsel" means an attorney acceptable to the Lessor
duly admitted to practice law before the highest court of the State and who is
not a salaried employee of the Lessor or the Lessee.
"Insurance Requirements" means all material provisions of any
insurance policy covering or applicable to the Project or any part thereof, all
material requirements of the issuer of any such policy, and all material orders,
rules, regulations or other requirements of the National Board of Fire
Underwriters (or any other body exercising similar functions) applicable to or
affecting the Project or any part thereof.
"Interest Rate for Advances" means a rate per annum which is the
greater of (a) two percent (2%) per year plus the annual interest rate announced
by the Trustee in its lending capacity as a bank as its "Prime Rate" or its
"Base Rate" or (b) ten and seventeen one-hundredths percent (10.17%) per year,
and to the extent lawfully chargeable.
"Lease" means this Lease, as it may be duly amended and
supplemented from time to time in accordance with its terms.
"Lease Term" means the period commencing on the date of delivery
of this Lease and, unless earlier terminated as herein provided, ending on May
1, 2011, or the date to which this Lease is extended pursuant to the provisions
of this Lease, whichever is latest.
"Legal Requirements" means all laws, statutes, codes, acts,
ordinances, resolutions,
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orders, judgments, decrees, injunctions, rules, regulations, permits, licenses,
directions and requirements of all governments and departments, commissions,
boards, courts, authorities, agencies, officials and officers of governments,
foreseen or unforeseen, ordinary or extraordinary, which now or at any time
hereafter may be applicable to the Project or any part thereof, or any use or
condition of the Project or any part thereof.
"Legislative Authority" means the Board of Directors of the
Lessor.
"Lenders" means, collectively, the Trustee and the Director.
"Lessor Personal Property" has the meaning assigned in Section
5.2(f) hereof.
"Net Proceeds", when used with respect to any insurance proceeds
or condemnation award, means the gross proceeds thereof less the payment of all
expenses, including reasonable attorneys' fees, incurred in connection with the
collection of such gross proceeds.
"Notice Address" means:
(a) As to the Lessee: Brush Xxxxxxx Inc.
00000 Xx. Xxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Treasurer
with a copy to the Secretary at the same address
and with a copy to: McDonald, Hopkins, Xxxxx &
Xxxxx Co., L.P.A.
2100 Bank One Center
000 Xxxxxxxx Xxx., X.
Xxxxxxxxx, Xxxx 00000-0000
Attention: Xxxxx X. Xxxxx, Esq.
(b) As to the Lessor: Xxxxxx-Xxxxx County Port Authority
Xxx Xxxxxxxx Xxxxx
Xxxxxx, Xxxx 00000-0000
Attention: Secretary
(c) As to the Project National City Bank
Bond Trustee: 000 Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Attention: Corporate Trust Department
and
The Prudential Insurance Company of
America
c/o Prudential Capital Group
Xxx Xxxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Managing Director
(d) As to the Director: Director of Development
Ohio Department of Development
00 Xxxxx Xxxx Xxxxxx - 29th Floor
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Xxxxxxxx, Xxxx 00000
or such different address notice of which is given under Section 12.3 hereof.
"Permitted Leasehold Mortgage" and "Permitted Leasehold
Mortgagee" are used as defined in the Ground Lease.
"Person" or words importing persons means firms, associations,
partnerships (including, without limitation, general, limited and limited
liability partnerships), joint ventures, societies, estates, trusts,
corporations, limited liability companies, public or governmental bodies, other
legal entities and natural persons.
"Plans and Specifications" means the plans and specifications for
the Project as filed with the Lessor, and as such may be completed in accordance
herewith and changed from time to time as herein provided.
"Proceeds Account" means the Proceeds Account in the Project Fund
created by the Indenture.
"Project" means the leasehold and easement interest in the
Project Site and the Project Facilities, together constituting "port authority
facilities" as defined in the Act.
"Project Bonds" means the $13,100,000 aggregate principal
amount of revenue bonds of the Lessor designated "Taxable Project Development
Revenue Bonds, Series 1996 (Brush Xxxxxxx Inc. Project)".
"Project Bonds Capitalized Interest Subaccount" means the
subaccount by that name in the Capitalized Interest Account in the Project Fund
created under the Indenture.
"Project Debt" means the Project Bonds, any Additional Bonds that
may hereafter be issued, and the State Loan Note.
"Project Facilities" means the facilities generally identified in
Exhibit A hereto (and more particularly described in the Plans and
Specifications or, with respect to personal property, to be more specifically
identified in requests to disburse funds therefor pursuant to Section 4.2 of the
Project Service Agreement, or in the certificate to be given by the Authorized
Lessee Representative pursuant to Sections 2.2(c) and 4.6 of the Project Service
Agreement), together with any additions and improvements thereto, modifications
thereof and substitutions therefor, less any removals of such property, all in
the manner and to the extent in this Lease provided.
"Project Fund" means the Project Fund in the custody of the
Trustee of which the Proceeds Account, the Capitalized Interest Account and the
Corporation Account are a part.
"Project Purposes" means acquiring, constructing, equipping,
furnishing, improving and otherwise developing real and personal property, or
any combination thereof, comprising port authority facilities to be used as a
facility for metal processing and manufacturing and as may otherwise be
permitted by this Lease and the Project Service Agreement.
"Project Service Agreement" means the Project Service and
Indemnity Agreement dated as of even date herewith among the Lessor, the Lessee
and to the extent set forth therein, the Lenders, as the same may be amended and
supplemented from time to time.
"Project Site" means the real estate described in Exhibit B
hereto and the Lessor's leasehold interest therein, together with any additions
thereto and less any removals therefrom, in
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the manner and to the extent provided in this Lease, and all easements
appurtenant thereto.
"RCRA" means the Resource Conservation and Recovery Act, 42
U.S.C. "6901 ET SEQ.
"Rental Payment Date" means the last business day of each
calendar month, commencing with the last business day in December, 1997, through
the end of the Lease Term.
"Rental Payments" means the rent required to be paid by the
Lessee to the Lessor as provided in Sections 3.1 and 3.3 hereof.
"Required Property Insurance Coverage" means at any time
insurance in the amount of (i) the then full insurable value of the Project
Facilities or (ii) the then total unpaid principal amount of the Project Debt
then outstanding, whichever is greater, provided that the coverage shall not be
less than an amount that would result in coinsurance, insuring the Project
Facilities against loss or damage by fire and extended coverage risks and
containing loss deductible provisions of not to exceed $500,000; provided that
the amounts of such deductible may be increased on each January 1 by the
Consumer Price Index Increase to the extent that such Consumer Price Index
Increase had not previously been utilized to increase such deductible.
"Required Public Liability Insurance Coverage" means
comprehensive general accident and public liability insurance, or alternative
arrangements for insurance or self-insurance approved in writing by both the
Lessor and the Trustee, with coverage limits in the minimum amounts of
$10,000,000 as to death or bodily injury in each occurrence and $10,000,000 as
to property damage with a loss deductible clause of not to exceed $2,500,000;
provided that the amounts of coverage shall be, and any deductible may be,
increased on each January 1 by ten percent for each ten percent increase in the
Consumer Price Index Increase.
"State" means the State of Ohio.
"State Loan Agreement" means the Loan Agreement between the
Director and the Lessor, as the same may be amended and supplemented from time
to time.
"State Loan Capitalized Interest Subaccount" means the subaccount
by that name in the Capitalized Interest Account in the Project Fund created
under the Indenture.
"State Loan Note" means the revenue note of the Lessor to
evidence its limited obligation to repay the loan to the Lessor by the Director
in the aggregate principal amount of $5,000,000.
"Sublease" means the Sublease dated as of October 1, 1996 between
the Lessee and B.W. Alloy Ltd., as the same may be amended and supplemented from
time to time.
"Toxic Substance" means and includes any material present on the
Project Site which has been shown to have significant adverse effect on human
health or which is subject to regulation under the Toxic Substances Control Act
(TSCA), 15 U.S.C. "2601, ET SEQ., applicable state law, or any other applicable
Federal or state laws now in force or hereafter enacted relating to toxic
substances. "Toxic Substance" includes, but is not limited to, asbestos,
polychlorinated biphenyls (PCBs) and lead-based paints. "Toxic Substance" does
not include beryllium or beryllium alloys.
"Trustee" means National City Bank, until a successor Trustee
shall have become such pursuant to the applicable provisions of the Indenture,
and thereafter "Trustee" shall mean the successor Trustee.
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Section 1.3. INTERPRETATION. Any reference herein to the Lessor,
to the Legislative Authority or to any member or officer of either includes
entities or officials succeeding to their respective functions, duties or
responsibilities pursuant to or by operation of law or lawfully performing their
functions.
Any reference to a section or provision of the Constitution of
the State or the Act, or to a section, provision or chapter of the Ohio Revised
Code or to any statute of the United States of America, includes that section,
provision or chapter as amended, modified, revised, supplemented or superseded
from time to time; provided, that no amendment, modification, revision,
supplement or superseding section, provision or chapter shall be applicable
solely by reason of this provision, if it constitutes in any way a limitation,
restriction or impairment of the rights or obligations of the Lessor or the
Lessee under this Lease or the rights of any other person under this Lease.
Unless the context indicates otherwise, words importing the
singular number include the plural number, and vice versa; the terms "hereof",
"hereby", "herein", "hereto", "hereunder" and similar terms refer to this Lease;
and the term "hereafter" means after, and the term "heretofore" means before,
the date of execution and delivery of this Lease. Words of any gender include
the correlative words of the other genders, unless the sense indicates
otherwise.
Section 1.4. CAPTIONS AND HEADINGS. The captions and headings in
this Lease are solely for convenience of reference and in no way define, limit
or describe the scope or intent of any Articles, Sections, subsections,
paragraphs, subparagraphs or clauses hereof.
(End of Article I)
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ARTICLE II
LEASE OF PROJECT
Section 2.1. LEASE; LEASE TERM; POSSESSION AND USE. Upon and
subject to the provisions herein set forth, the Lessor does hereby lease to the
Lessee, and the Lessee does hereby lease from the Lessor, the Project for the
Lease Term. Possession of the Project shall be delivered by the Lessor and
accepted by the Lessee on the Completion Date or such earlier date as may be
requested by the Lessee, provided that in such case Lessee hereby agrees to
comply with all requirements of this Lease, the Project Service Agreement and
the Indenture as if the Completion Date had occurred. From and after the
commencement of the Lease Term, the Lessee and its agents and independent
contractors shall have the right to enter upon the Project Site for purposes of
inspection and taking actions in accordance with this Lease to (i) determine
that acquisition, construction, improvement, furnishing, equipping and
development of the Project is being made in accordance with the Project Service
Agreement and the Plans and Specifications and (ii) prepare to occupy and use
the Project. Upon delivery of possession and during the Lease Term, the Lessee
shall have the right to use the Project for the Project Purposes.
Section 2.2. GROUND LEASE. The Lessee hereby approves the Ground
Lease (for purposes of this Section 2.2, the term Ground Lease shall refer
collectively to both the Ground Lease and to the Easement Agreement), and all
commitments of the Ground Lessor thereunder, acknowledges all rights of the
Ground Lessor and the Ground Lessee under the Ground Lease, and all obligations
of the Ground Lessor and the Ground Lessee under the Ground Lease, and, for
itself and its successors and assigns and any permitted sublessees, covenants
and agrees, (a) to the extent set forth in the Ground Lease, to abide by all
covenants and agreements set forth therein with respect to the Ground Lessor or
the Lessee, (b) subject to the express provisions of this Lease (i) to not
impair the ability of the Lessor or any Permitted Leasehold Mortgagee to satisfy
the obligations of the Ground Lessee under the Ground Lease and (ii) to not
impede the Ground Lessee in the exercise of its rights under the Ground Lease,
and (c) to comply, in the name of and for and on behalf of the Ground Lessee,
with all covenants and agreements of the Ground Lessee in the Ground Lease other
than those obligations that, by the nature of such obligations, are personal to
the Ground Lessee (unless the Lessee shall have acquired all interests of the
Ground Lessee in and to the Project Site).
Section 2.3. REPRESENTATIONS OF THE LESSOR. The Lessor represents
that: (a) it is duly organized and validly existing under the laws of the State;
(b) it has duly accomplished all conditions necessary to be accomplished by it
prior to execution and delivery of this Lease and the Project Service Agreement;
(c) it is not in violation of or in conflict with any provisions of the laws of
the State or any agreement or instrument to which the Lessor is a party or by
which it is bound which would impair its ability to carry out its obligations
contained in this Lease and the Project Service Agreement; (d) it is empowered
to enter into the transactions contemplated by this Lease and the Project
Service Agreement; (e) it has duly authorized the execution, delivery and
performance of this Lease and the Project Service Agreement; and (f) it will do
all things in its power in order to maintain its existence or assure the
assumption of its obligations under the Project Service Agreement and this Lease
by any successor public body.
Section 2.4. REPRESENTATIONS OF THE LESSEE. The Lessee represents
that:
(a) It is a corporation for profit organized and
existing under the laws of the State.
(b) It has full corporate power and authority to execute,
deliver and perform this Lease and to enter into and carry out
the transactions contemplated by this Lease.
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That execution, delivery and performance, and such entering into
and carrying out of those transactions, do not, and will not,
violate any provision of law applicable to the Lessee or the
Lessee's Articles of Incorporation or its Code of Regulations and
do not, and will not, conflict with or result in a default under
any agreement or instrument to which the Lessee is a party or by
which it is bound, which would impair its ability to carry out
its obligations contained in this Lease or resulting from those
transactions. This Lease has, and to the extent required the
transactions contemplated by this Lease have, by proper action,
been duly authorized, and this Lease has been duly executed and
delivered by the Lessee and all steps necessary have been taken
to constitute this Lease a valid and binding obligation of the
Lessee.
(c) The provision of financial assistance to be made
available to it with respect to the Project, including the terms
of this Lease and the commitments therefor made by the Lessor,
have induced the Lessee to continue, within the boundaries of the
Lessor, that business of the Lessee to be conducted by use of the
Project and such business will preserve jobs and employment
opportunities within the jurisdiction of the Lessor.
(d) It presently intends to use or operate the Project
during the Lease Term in a manner consistent with the Project
Purposes and knows of no reason why the Project will not be so
operated. If, in the future, there is a cessation of that
operation, it will use its best efforts to resume that operation
or accomplish an alternative use by the Lessee or others which
will be consistent with the Act and this Lease.
(e) In the event that, in accordance with Section 2.5 of
this Lease, moneys in the Proceeds Account of the Project Fund
are insufficient to complete the acquisition, construction,
improvement, furnishing, equipping and development of the Project
in accordance with the Plans and Specifications (including all
costs and expenses referred to in Section 4.2 of the Project
Service Agreement), the Lessee will, in accordance with Section
2.5 of this Lease, provide to the Trustee, for deposit into the
Corporation Account of the Project Fund, moneys which, together
with those in the Proceeds Account, will be sufficient to
complete acquisition, construction, improvement, furnishing,
equipping and development of the Project in accordance with the
Plans and Specifications (including all costs and expenses
referred to in Section 4.2 of the Project Service Agreement). In
addition, if the proceeds of the State Loan are not received by
the Trustee within forty-five days after filing of the request of
the Xxxxxx-Xxxxx County Port Authority with the Director for
which provision is made in Section 2.2(k) of the Project Service
Agreement, the Lessee shall pay into the Project Fund the sum of
$5,000,000.
Section 2.5. LESSEE REQUIRED TO PAY COSTS IN EVENT PROCEEDS
INSUFFICIENT. In the event that at any time or from time to time the moneys
available from proceeds of the Project Bonds and the State Loan Note (all
conditions for the disbursement of which under Section 4.2 of the Project
Service Agreement have been satisfied) are not sufficient to pay in full the
costs and expenses of the Project and related infrastructure requested by the
Lessee to be paid therefrom, including all items set forth in Section 4.2 of the
Project Service Agreement (the "Facilities Shortfall"), the Lessee covenants and
agrees, for the benefit of the Lessor, the Lenders and the Holders and to
fulfill the purposes for which the Project Bonds and the State Loan Note have
been issued, to promptly pay the Facilities Shortfall to the Corporation
Account. In furtherance thereof, the Lessee agrees that upon receipt of a
written notice from the Lessor notifying the Lessee of a Facilities Shortfall,
the Lessee will promptly provide to the Trustee moneys for deposit into the
Corporation Account from any lawful source in an amount which is adequate to pay
the Facilities Shortfall.
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For purposes of the preceding paragraph, the moneys in the
Proceeds Account shall include without limitation (i) the amount of investment
income from the Proceeds Account and the Capitalized Interest Account estimated
reasonably by the Authorized Authority Representative (as defined in the Project
Service Agreement), which is to be deposited in the Proceeds Account for the
respective relevant periods, and (ii) the proceeds deposited into the Proceeds
Account of any Additional Bonds sold to finance completion of the Project
Facilities.
The Lessor does not make any representation or warranty, either
express or implied, that the moneys from proceeds of the Project Bonds and the
State Loan Note and which under the provisions of the Indenture and the Project
Service Agreement will be available for payment of the costs of the acquisition,
construction, improvement, furnishing, equipping and developing to be
accomplished pursuant thereto, will be sufficient to pay all of the costs
thereof or costs and expenses which will be incurred in connection therewith.
The Lessee covenants and agrees that, if the Lessee should pay
pursuant to this Section any portion of the costs of the acquisition,
construction, improvement, furnishing, equipping and development of the Project,
including any portion of the costs and expenses described in Section 4.2 of the
Project Service Agreement, the Lessee will not be entitled to any reimbursement
therefor from the Lessor, the Xxxxxx-Xxxxx County Port Authority, the Lenders or
the Holders, except pursuant to and in accordance with Section 4.2 of the
Project Service Agreement, subject to the issuance of any Additional Bonds and
the availability of proceeds from the same. The Lessee acknowledges that it will
not be entitled in that event to any diminution in or abatement or postponement
of any amounts payable pursuant to any covenant, agreement or other obligation
under the Project Service Agreement or this Lease.
(End of Article II)
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ARTICLE III
RENTAL PAYMENTS AND ADDITIONAL PAYMENTS
Section 3.1. RENTAL PAYMENTS. The Lessee shall make Rental
Payments to the Lessor, whether or not construction of the Project has been
completed, on or before each Rental Payment Date in immediately available funds
commencing with the last business day of December, 1997 in the respective
amounts shown for each such month in Exhibit C hereto.
Section 3.2. ADDITIONAL PAYMENTS. The Lessee agrees to make
Additional Payments as follows:
(a) To the Lessor, payment for or reimbursement of any and
all costs, expenses and liabilities incurred by the Lessor in
satisfaction of any obligations of the Lessee hereunder not
performed by the Lessee.
(b) To the Lessor, reimbursement for or prepayment of
expenses paid or to be paid by the Lessor and incurred as a
result of a request by the Lessee or in enforcing performance by
or the obligations of the Lessee under this Lease.
Section 3.3. PLACE OF PAYMENTS. The Lessee shall make all Rental
Payments and Additional Payments directly to the Lessor at its principal office
or at such other office for the delivery of such payments as the Lessee is given
notice of in writing (at least five business days before the applicable payment
is due) in accordance with Section 12.3 hereof.
Section 3.4. OBLIGATIONS UNCONDITIONAL. The obligations of the
Lessee to make Rental Payments, Additional Payments and any other payments
required hereunder shall be absolute and unconditional and the Lessee shall make
such payments without abatement, diminution or deduction regardless of any cause
or circumstances whatsoever including, without limitation, any defense (other
than the defense of indefeasible payment in full to the Lessor), set-off,
recoupment or counterclaim which the Lessee may have or assert against the
Lessor or any other Person. The Lessee (i) will not suspend or discontinue any
such payments, (ii) will perform and observe all of its other agreements
contained in this Lease and (iii) will not terminate this Lease except as
expressly permitted hereby, for any cause including, without limitation, failure
to complete the Project Facilities, failure of title to the Project or any
portion thereof, 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 or under authority of the United States of America,
the State or any political subdivision thereof or any failure of the Lessor, any
Lender, any Holder or any other person to perform and observe any agreement,
whether express or implied, or any duty, liability or obligation arising out of
or connected with this Lease, the Project Service Agreement, the Ground Lease,
the State Loan Agreement or otherwise. The obligations and liabilities of the
Lessee hereunder shall in no way be released, discharged or otherwise affected
for any reason, including, without limitation: (i) any defect in the condition,
quality or fitness for use of the Project or any part thereof; (ii) any damage
to, removal, abandonment, salvage, loss, scrapping or destruction of or any
requisition or taking of the Project or any part thereof; (iii) any restriction,
prevention or curtailment of or interference with any use of the Project or any
part thereof; (iv) any defect in title to the Project or any encumbrance on such
title; (v) any change, waiver, extension, indulgence or other action or omission
in respect of any obligation or liability of Lessor; (vi) any bankruptcy,
insolvency, reorganization, composition, adjustment, dissolution, liquidation or
other like proceeding relating to Lessor or Lessee or any action taken with
respect to this Lease by any trustee or receiver of Lessor or Lessee, or by any
court, in any such proceeding; (vii) any claim which Lessee has or might have
against any Person, including, without limitation, Lessor, any Lender or
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any Holder; (viii) any failure on the part of Lessor or any other Person to
perform or comply with any of the terms hereof or of any other agreement,
including, without limitation, the State Loan Agreement; (ix) any invalidity or
unenforceability or disaffirmance of this Lease or any provision hereof; or (x)
any other occurrence whatsoever, whether similar or dissimilar to the foregoing,
whether or not Lessee shall have notice or knowledge of any of the foregoing;
provided, however, that this provision does not represent a waiver of any claims
that Lessee may have against Lessor, any Lender, any Holder or any other Person.
This Lease shall be non-cancelable by Lessee other than through termination of
the Lease pursuant to Article IX hereof and, to the extent permitted by law,
Lessee waives all rights now or hereafter conferred by statute or otherwise to
quit, terminate or surrender this Lease or the Project Facilities, or to any
diminution or reduction of Rental Payments or Additional Payments payable by
Lessee hereunder. All payments by Lessee properly made hereunder as required
hereby shall be final, and, except as provided herein, Lessee will not seek to
recover any such payment or any part thereof from Lessor or any other person. If
for any reason whatsoever this Lease shall be terminated in whole or in part by
operation of law or otherwise, Lessee will nonetheless pay an amount equal to
each Rental Payment and any other amount payable by Lessee hereunder at the time
and in the manner that such Rental Payment or other payment would have become
due and payable under the terms of this Lease if it had not been terminated in
whole or in part. Nothing contained in this Section shall be construed to
release the Lessor, the Lenders and the Holders from the performance of any of
the agreements on the part of any of them contained in this Lease, and in the
event the Lessor, the Lenders and the Holders should fail to perform any such
agreement on the part of any of them, the Lessee may institute such action
against the nonperforming party as the Lessee may deem necessary to compel
performance or recover its damages for nonperformance so long as such action
shall not be inconsistent with the agreements of the Lessee contained in the
preceding sentences. The Lessee may, however, at its own cost and expense and in
its own name or, to the extent lawful, in the name of the Lessor, prosecute or
defend any action or proceeding or take any other action involving third Persons
which the Lessee deems reasonably necessary in order to secure or protect its
right of possession, occupancy and use hereunder, and in such event the Lessor
hereby agrees to cooperate fully with the Lessee, but at the Lessee's expense,
and to take all action necessary to effect the substitution of the Lessee for
the Lessor in any such action or proceeding if the Lessee shall so request.
Section 3.5. PAST DUE RENT, ADDITIONAL PAYMENTS AND RENTALS. If
the Lessee fails to make any Rental Payment, Additional Payment or other payment
hereunder, the item in default shall continue as an obligation of the Lessee
until such payment shall have been fully paid. During the default period, the
portion of any such Rental Payment, any Additional Payment or other payment in
default shall bear interest at the Interest Rate for Advances until such amount
(including all such interest) is paid.
Section 3.6. ASSIGNMENT OF LEASE. The Lessee acknowledges that
the Lessor has sold, assigned, transferred and conveyed all of its right, title
and interest in and to this Lease, including the Rental Payments, to the
Trustee. No subsequent assignment to any Person other than the Trustee may be
made without prior written notice to the Lessee; provided, however, that upon
occurrence and continuation of an Event of Default hereunder such an assignment
may be made without prior written notice to the Lessee. The Lessee further
acknowledges that, upon the execution and delivery of the Assignment of Lease,
the Lessor, as assignor, will have neither any interest under this Lease, nor
any obligations or rights with respect to this Lease, and all such interest,
obligations and rights of the Lessor hereunder shall be vested irrevocably in
the Trustee, as assignee.
Section 3.7. NO ABATEMENT OF RENTAL PAYMENTS. Except as
specifically provided in this Lease to the contrary, no action pursuant to any
provision of this Lease shall xxxxx in any way payment of Rental Payments or any
Additional Payments payable hereunder.
(End of Article III)
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ARTICLE IV
LESSEE'S OWN PERSONAL PROPERTY
Section 4.1. INSTALLATION OF THE LESSEE'S OWN PERSONAL PROPERTY.
From time to time, in its sole discretion and at its own expense, the Lessee
may, and may permit any of its licensees or sublessees to, install personal
property on the Project Site or in the Project Facilities, including without
limitation, personal property which becomes in whole or in part a fixture when
installed. All personal property so installed shall remain the sole property of
the Lessee or the licensee or sublessee, as the case may be, unless it is a
fixture necessary to the structural integrity of the Project Facilities (other
than a trade fixture) or is essential for the faithful and efficient
administration, maintenance and operation of the Project Facilities, in which
case such personal property shall become and be deemed to be property of the
Lessor and part of the Project, and with that exception, the Lessor shall have
no interest in that personal property. Any damage to the Project Facilities
caused by the removal of the personal property or fixtures which remain the
property of the Lessee shall be repaired by the Lessee at the Lessee's sole
expense so as to restore the Project Facilities to their original condition,
ordinary wear and tear excepted.
The personal property which is the sole property of the Lessee or
a licensee or sublessee may be modified or removed at any time, but without
causing any damage to the Project, if there is then no Event of Default under
this Lease, and if an Event of Default then exists, may be modified or removed
if a certificate of the Authorized Lessee Representative has been delivered to
the Lessor and the Trustee stating that such modification or removal will not
prevent the Project from being operated or used for the Project Purposes.
Nothing contained in this Lease shall prevent the Lessee or any
of its licensees or sublessees from acquiring personal property (other than any
personal property purchased pursuant to Section 2.5 hereof) under a lease or
under a conditional sale, installment purchase or lease sale contract, or
subject to a vendor's lien or security agreement, as security for the unpaid
portion of the purchase price thereof or to prevent a vendor so secured from
exercising its remedies; provided, however, that no lien or security interest
shall attach to any part of the Project.
The Lessee shall pay or cause to be paid, as they become due, the
purchase price of, and all costs and expenses in connection with, the
acquisition and installation of any personal property installed by the Lessee or
any of its licensees or sublessees pursuant to this Section. The Lessee may, at
its expense, in good faith contest those purchase prices, costs and expenses. In
the event of a contest, the Lessee may permit the purchase prices, costs and
expenses contested to remain unpaid during the period of the contest and any
appeal unless the Lessor shall notify the Lessee that, in the reasonable opinion
of Lessor, by nonpayment the interests of the Lessor or the Lessee in the
Project Site or the Project Facilities will be materially endangered or the
Project Site or the Project Facilities or any part of either or both will be
subject to imminent loss or forfeiture, in which event those purchase prices,
costs and expenses shall be paid promptly by the Lessee. The Lessor will
cooperate fully with the Lessee, but at the Lessee's expense, in any such
contest.
From time to time, the Lessor shall execute and deliver such
documents as the Lessee may properly and reasonably request to evidence that
particular items of personal property installed on or removed from the Project
pursuant to this Section, are not part of the Project for purposes of this Lease
or that fixtures have been removed as provided in this Lease. In the event any
removal of property pursuant to this Section causes damage to any portion of the
Project, the Lessee shall restore the same or repair such damage.
The Lessee shall execute and deliver such documents (if any) as
the Lessor may properly and reasonably request in connection with any action
taken by the Lessee in conformity
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with this Section. Any action taken by the Lessee pursuant to this Section shall
not entitle the Lessee to any abatement or diminution of the Rental Payments or
Additional Payments payable hereunder.
Upon the termination of this Lease, any such personal property
not removed from the Project Site by the Lessee pursuant to this Section 4.1
shall become the exclusive property of the Lessor.
(End of Article IV)
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ARTICLE V
MAINTENANCE AND USE OF PROJECT
Section 5.1. COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS.
The Lessee, at its expense, will promptly comply or cause compliance with all
Legal Requirements and Insurance Requirements, and will procure, maintain and
comply (or cause compliance) in all material respects with all permits, licenses
and other authorizations required for any use of the Project or any part thereof
then being made or anticipated to be made by the Lessee, and for the proper
operation and maintenance of the Project or any part thereof during the Lease
Term, and will comply in all material respects with any instruments of record as
of the date of initial delivery of the Project Bonds in force and currently
burdening the Project or any part thereof or hereafter approved in writing by
the Lessee. The Lessee may, at its expense and after prior notice to the Lessor,
contest by appropriate legal proceedings conducted in good faith and with due
diligence any Legal Requirement and postpone compliance therewith pending the
completion of such contest provided that such postponement does not, in the
reasonable opinion of the Lessor, subject the Project, or any part thereof, to
imminent loss or forfeiture or subject the Lessor to any criminal liability.
Section 5.2. MAINTENANCE AND USE OF PROJECT.
(a) Subject to Article VII hereof, the Lessee, at its
expense, will keep or cause the Project to be kept in good
repair, working order and condition (ordinary wear and tear
excepted) and will make all necessary or appropriate repairs,
replacements and renewals thereof, interior, exterior, structural
and non-structural, ordinary and extraordinary and foreseen and
unforeseen so that the Project can be used for the Project
Purposes.
(b) The Lessee will not do, or permit to be done, any act
or omission or thing which might materially impair the value or
usefulness of the Project or any part thereof, will not commit or
permit any material waste of the Project or any part thereof, and
will not permit any unlawful occupation, business or trade to be
conducted on the Project or any part thereof.
(c) The Lessee shall also, at its expense, promptly comply
with all rights of way or use, privileges, franchises,
servitudes, licenses, easements, tenements, hereditaments and
appurtenances forming a part of the Project and all instruments
creating or evidencing the same, in each case, to the extent that
(i) compliance therewith is required of the Lessee under the
terms thereof and (ii) the same are currently of record or
subsequently approved in writing by the Lessee.
(d) The Lessee shall remove regularly all trash, litter
and debris from the Project Site at the Lessee's expense and
shall maintain the Project Site in a neat and safe manner.
(e) The Lessee agrees to permit the Lessor and its
employees and agents to enter upon the Project at all reasonable
times to inspect the same, but no such inspection shall
unreasonably interfere with the Lessee's operation and use of the
Project and such Persons shall strictly comply with all of
Lessee's reasonable safety and security regulations, and no such
inspection shall be conducted without reasonable prior notice and
the failure of the Lessor to make any such inspection shall not
impose any liability upon either for its failure to do so. The
Lessee shall have the right to have its representative in
attendance at any such inspection.
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(f) The Lessee covenants and agrees to obtain and maintain
within the Project Facilities all moveable equipment, furnishings
and other personal property (including any personal property
which upon installation becomes a fixture) acquired by the
Lessor, or acquired pursuant to disbursement requests submitted
pursuant to Section 4.2 of the Project Service Agreement, and any
property acquired pursuant to this Article V as a substitution or
replacement for any such property (collectively, "Lessor Personal
Property"). The Lessee further covenants and agrees
(notwithstanding clause (ii) of the first sentence of Section 5.4
hereof) to replace promptly any worn out or obsolete Lessor
Personal Property with other personal property necessary to
enable the Project to be used for the Project Purposes if the
worn out or obsolete Lessor Personal Property is essential for
the efficient or proper operation or maintenance of the Project
Facilities for the Project Purposes in accordance herewith and as
it is then being used (the "Essential Lessor Personal Property").
The Lessee further covenants and agrees that no Essential Lessor
Personal Property will be removed or relocated without securing a
replacement therefor. The Lessee further agrees that title to any
Lessor Personal Property acquired in replacement of Lessor
Personal Property pursuant to this Section, or in substitution
therefor pursuant to Section 5.4 hereof, shall vest immediately
in the Lessor and such personal property so acquired shall be and
be considered for all purposes a part of the Project Facilities
as if originally a part thereof. Without limiting the foregoing,
the Lessee shall promptly upon such replacement or substitution
deliver a xxxx of sale or other similar evidence of title to the
Lessor, and Lessor shall promptly deliver to the Lessee a release
of any interest in any Lessor Personal Property so replaced by
the Lessee. Any action taken by the Lessee pursuant to this
Section shall not entitle the Lessee to any abatement or
diminution of the Rental Payments or any Additional Payments
payable hereunder.
(g) The Lessee shall not discriminate against
any person because of race, color, religion, sex or national
origin.
Section 5.3. ALTERATIONS, ADDITIONS AND IMPROVEMENTS. The Lessee
may, in its discretion and at its expense, make from time to time any
alterations, additions, or improvements to the Project which it may deem
desirable for its business purposes provided that no such alterations,
additions, or improvements shall adversely affect the structural integrity or
strength of any improvements constituting a part of the Project Facilities,
substantially reduce the value of the Project or materially interfere with the
use and operation thereof as a copper beryllium alloy expansion facility. All
alterations, additions, and improvements so made to the Project Facilities by
the Lessee shall become and be deemed to be the property of Lessor and
constitute a part of the Project. At the end of the Lease Term the Lessee shall
have no obligation, but may, in its discretion and at its expense, remove any
such alteration, addition or improvement, provided that upon such removal the
Lessee is required to restore or repair the Premises. Any free standing
buildings or other free standing structures erected and paid for by the Lessee
shall be the property of the Lessee but shall be removed at the Lessee's expense
at the expiration or termination of the Lease Term unless the Lessor shall have
agreed to accept such buildings or structures in which event they need not be
removed and shall become property of the Lessor at the conclusion of the Lease
Term.
Section 5.4. REMOVALS AND SUBSTITUTIONS. Subject to the
requirements of Section 5.2(f) hereof with respect to Essential Lessor Personal
Property, in any instance where the Lessee, in its reasonable discretion,
determines that any item of Lessor Personal Property shall have become
inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary or should
otherwise be replaced, the Lessee may remove such items; provided, that such
removal (taking into account any substitutions) shall not impair the operation
of the Project and that any damage caused to any portion of the Project as a
result of such removal is restored or repaired at Lessee's sole cost; and
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provided, further, that the Lessee (i) substitutes and installs other items of
property necessary to enable the Project to be used for the Project Purposes
(but not necessarily having the same function in the operation of the Project),
which such substituted property shall be free from liens and encumbrances and
shall be the property of Lessor and become part of the Project, without taking
account of personal property previously designated to be the property of Lessor
as Lessor Personal Property as required by Section 5.2 or 5.4 hereof, or (ii) in
the case of removal of property without substitution, promptly pays to the
Lessor an amount equal to (A) if the removed property is sold or scrapped, the
proceeds of such sale or the scrap value thereof, (B) if the removed property is
used as a trade-in for property not to be installed as part of the Project, the
trade-in credit received by the Lessee, or (C) in the case of the retention of
such removed property by the Lessee for use at locations other than at the
Project, the Fair Market Value, less the Excess Value (as defined below), of
such property. If, prior to or concurrently with any such removal, the Lessee
shall have acquired and installed personal property with its own funds which has
become a part of the Project Facilities, the Lessee may credit the amount so
spent, or, if such property was acquired more than six (6) months prior to the
date on which the credit is to be made, the Fair Market Value of such property,
against the requirement that it either substitute other property or make payment
under this Section on account of such removal, provided that such previously
acquired and installed property meets the requirements for substituted property
under clause (i) of the next preceding sentence of this Section. "Excess Value"
shall mean the amount by which the then Fair Market Value of replacement Lessor
Personal Property exceeds the Fair Market Value of replaced Lessor Personal
Property at the time of its replacement. The Authorized Lessee Representative
shall promptly report to the Lessor each such removal, substitution, sale or
other disposition, shall take such actions as are required to vest title to any
such replacement or substitution property (including any property substituted
pursuant to the next preceding sentence) in the Lessor, and shall cause Lessee
to pay to the Lessor such amounts as are required by the provisions of clause
(ii) of the second preceding sentence of this Section (but after taking into
account any credits available pursuant to the next preceding sentence) to be
paid to the Lessor promptly after the sale, trade-in or other disposition
requiring such payment; provided, however, that no such payment need be made
until the amount to be paid to the Lessor on account of all such sales,
trade-ins or other dispositions not previously paid aggregates at least
$100,000. Except as otherwise provided in the Indenture, any amounts so paid
shall be made available to the Lessee for use for, alterations, additions or
improvements to the Project, or the acquisition and installation of personal
property within the Project Facilities, which alterations, additions,
improvements or personal property shall be the property of Lessor and become a
part of the Project for all purposes of this Lease, and the Lessee shall
promptly deliver to the Lessor a xxxx of sale or other appropriate evidence of
title thereto. Upon the request of the Lessee, the Lessor shall promptly execute
and deliver to the Lessee appropriate instruments releasing any property removed
pursuant to this Section from the Project and this Lease.
Section 5.5. INDEMNIFICATION. Except as otherwise expressly
provided herein, in order to induce the Lessor to undertake the duties,
obligations and responsibilities set forth herein, the Lessee releases the
Lessor from, agrees that the Lessor shall not be liable for, and indemnifies the
Lessor against, all liabilities, obligations, damages, costs and expenses
(including, without limitation, reasonable attorney's fees and expenses except
as may be limited by law or judicial decision or order) imposed upon, incurred
or asserted against the Lessor without negligence or bad faith on the part of
the Lessor on account of: (a) ownership of any interest in the Project; (b) any
loss or damage to property or any accident or injury to or disease, sickness or
death of or loss by any person that may be occasioned by any cause whatsoever
pertaining to activities pursuant to Sections 4.1, 5.3 and 5.4 of this Lease or
the maintenance, operation and use of the Project or any part thereof or the
adjoining sidewalks, curbs, vaults and vault space, if any, streets, alleys or
ways; (c) any use, disuse or condition of the Project or any part thereof or the
adjoining sidewalks, curbs, vaults and vault space, streets, alleys or ways, or
arising from any act or failure to act by the Lessee, or any of its agents,
contractors, servants, employees, sublessees or licensees; (d) any failure of
compliance of Lessee, its agents or the independent contractors of the Lessee or
any
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agents or independent contractors of the Lessor under the Construction
Contract, with the provisions of Section 4115.05, any other applicable provision
of the Ohio Revised Code or any other applicable provision of State or federal
law; (e) without limitation on the provisions of Section 5.6 hereof, all loss or
expense arising out of the existence in, on or about the Project of Hazardous
Substances or relating to beryllium or beryllium alloys, whether arising prior
to or during the Lease Term and regardless of whether the same arise out of the
release by the Lessee of such materials, and including without limitation civil
and criminal fines and penalties (whether arising or existing during or prior to
the Lease Term), and (f) any action or proceeding brought with respect to the
matters set forth in (a), (b), (c), (d) and (e) above. The Lessee shall notify
the Lessor in a timely manner of any knowledge it may receive of any loss or
expense under clause (e) of the next preceding sentence.
The Lessee agrees to indemnify the Lessor for and to hold it
harmless against all liabilities, costs and expenses incurred without negligence
or bad faith on the part of the Lessor on account of any action taken or omitted
to be taken by the Lessor in accordance with the terms of this Lease or any
related instruments or any action taken at the request of or with the consent of
the Lessee, including the costs and expenses of the Lessor in defending itself
against any such claim, action or proceeding brought in connection with the
exercise or performance of any of its powers or duties under this Lease or any
related instrument.
The Lessee agrees to indemnify the Lessor for and to hold it
harmless against all liabilities, costs and expenses incurred without negligence
or bad faith on its part arising from the issuance, sale, trading or redemption
or purchase of the Bonds, or performance by the Lessor of its obligations under
the Indenture with respect to, the Project Bonds, and the provision by the
Lessee of any information or certification furnished in connection therewith
concerning the Project Bonds, the Project or the Lessee.
In case any action or proceeding is brought against the Lessor in
respect of which indemnity may be sought hereunder, the Lessor promptly shall
give written notice of that action or proceeding to the Lessee, and the Lessee
upon receipt of that notice shall have the obligation and the right to assume
the defense of the action or proceeding; provided, that failure to give that
notice shall not relieve the Lessee from any of its obligations under this
Section except to the extent that such failure prejudices the defense of the
action or proceeding by the Lessee or otherwise results in an increase in the
amount to be indemnified. At its own expense, an indemnified party may employ
separate counsel and participate in the defense. The Lessee shall not be liable
for any settlement made without its consent.
The indemnifications set forth above are intended to and shall
include the indemnification of all affected officials, directors, officers and
employees of the Lessor. Those indemnifications are intended to and shall be
enforceable to the full extent permitted by law and shall survive the
termination or expiration of this Lease.
Section 5.6. ENVIRONMENTAL MATTERS. (a) Throughout the Lease
Term, the Lessee or its employees, contractors or agents shall:
(i) not place or permit to be placed any Hazardous
Substances at the Project except as not prohibited by applicable
law or appropriate governmental authorities;
(ii) forthwith upon receipt by the Lessee of written notice
of the occurrence of any material violation of any Environmental Law
in connection with the ownership, occupancy or use of the Project,
or the receipt by the Lessee of any citation, notice of
investigation, fine or other assessment in connection therewith,
report or other communication from any governmental authority with
respect to any violation or alleged violation of any Environmental
Law, deliver written notice thereof to the Lessor
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describing the same and any steps being taken by the Lessee with
respect thereto.
(iii) In the event that it obtains, gives or receives
written notice of any Release or threat of Release of a reportable
quantity of any Hazardous Substances or beryllium or beryllium alloys
at the Project Site (any such event being hereinafter referred to as
a "Hazardous Discharge") or receives any written notice of violation,
request for information or notification that it is potentially
responsible for investigations or cleanup of environmental conditions
at the Project or any demand letter or complaint, order, citation, or
other written notice with regard to any Hazardous Discharge or
violation of Environmental Laws affecting the Project Site or the
Lessor's or the Lessee's interest therein (any of the foregoing is
referred to herein as an "Environmental Complaint") from any Person
or entity, including any state agency responsible in whole or in part
for environmental matters in the State or the United States
Environmental Protection Agency (any such person or entity
hereinafter the "Agency"), then the Lessee shall, within thirty (30)
business days, give written notice of same to the Lessor detailing
facts and circumstances of which the Lessee is aware giving rise to
the Hazardous Discharge or Environmental Complaint. Such information
is not intended to create nor shall it create any obligation upon the
Lessor with respect thereto. The Lessee shall promptly forward to the
Lessor copies of all documents and reports concerning a Hazardous
Discharge at the Project that the Lessee is required to file under
any Environmental Laws.
(iv) respond in a timely manner to any Hazardous Discharge
or Environmental Complaint to avoid subjecting the Project to any
lien. If the Lessee shall fail to respond in a timely manner to any
Hazardous Discharge or Environmental Complaint or the Lessee shall
fail to comply in all material respects with any of the requirements
of any Environmental Laws, the Lessor may, but without the
obligation to do so, for the sole purpose of protecting the Lessor's
interest in the Project: (A) give such notices or (B) after notice
of intent to the Lessee to enter, enter onto the Project (or
authorize third parties to enter onto the Project) and take such
actions as the Lessor (or such third parties as directed by the
Lessor) deems reasonably necessary or advisable, to clean up,
remove, mitigate or otherwise deal with any such Hazardous Discharge
or Environmental Complaint.
(v) to the full extent permitted by law, defend and
indemnify the Lessor, and hold the Lessor harmless, from and
against all loss, liability, damage and expense, claims, costs,
fines and penalties, including reasonable attorney's fees, suffered
or reasonably incurred by the Lessor under or on account of any
Environmental Laws, including, without limitation, the assertion of
any lien thereunder, with respect to any Hazardous Discharge, the
presence of any Hazardous Substances or beryllium or beryllium
alloys affecting the Project, whether or not the same originates or
emerges from the Project or any contiguous real estate, except to
the extent such loss, liability, damage and expense is attributable
to any Hazardous Discharge resulting from actions on the part of
the Lessor. The Lessee's obligations under this Section shall arise
upon the discovery by the Lessee of any Hazardous Discharge or the
presence of any Hazardous Substances or beryllium or beryllium
alloys at the Project Site causing this paragraph to be applicable,
whether or not any federal, state, or local environmental agency
has taken or threatened any action in connection with the presence
of any Hazardous Substances or beryllium or beryllium alloys.
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Section 5.7. PERFORMANCE BY LESSOR OF LESSEE'S REQUIREMENTS. If the
Lessee shall fail to do or perform any act or thing required to be done by it
under the terms of this Lease, the Lessor may, at its sole option, after
reasonable written notice to the Lessee with respect thereto and reasonable
opportunity afforded to the Lessee to do and perform the same, itself or by its
employees, enter the Project and do and perform the same on the Lessee's behalf
and at the Lessee's cost and expense; and the Lessee shall, forthwith upon
receipt of notice of the amount of such cost and expense, pay the same to the
Lessor as Additional Payments under Section 3.2, together with interest thereon
at the Interest Rate for Advances, from the date of each payment by the Lessor
to the date of repayment (including such interest) by the Lessee.
(End of Article V)
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ARTICLE VI
TAXES, MECHANICS' LIENS AND INSURANCE
Section 6.1. TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY CHARGES.
This is a net lease and, in addition to paying the Rental Payments and
Additional Payments hereunder, except to the extent that certain costs are paid
pursuant to Section 4.2 of the Project Service Agreement, Lessee shall be
responsible for and shall pay any and all expenses of owning, operating,
maintaining and repairing the Project incurred from and after the date hereof
until the expiration of the Lease Term and any and all other costs, charges,
assessments, expenses and taxes of every kind and character, ordinary or
extraordinary, arising out of or incurred in connection with the use or
occupancy of the Project or the execution, delivery and performance by Lessee of
this Lease, whether or not such cost, charge, assessment, expense or tax is
expressly referred to herein, so as to allow the Lessor to receive the Rental
Payments as net rent. Without limiting the generality of the foregoing, the
Lessee shall 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 during the Lease Term be lawfully assessed or levied against or
with respect to the Project (including, without limitation, any taxes levied
upon or with respect to the revenues, income or profits of the Lessee from the
Project) which, if not paid, may become or be made a lien on the Project or any
part thereof, or a charge on such revenues, income and profits therefrom, and
all utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Project during the Lease Term; provided, that with
respect to special assessments or other governmental charges that lawfully may
be paid in installments over a period of years, the Lessee shall be obligated to
pay only such installments as are required to be paid during the Lease Term.
The Lessee may, at its expense, in good faith contest any such
taxes, assessments and other charges and, in the event of any such contest,
during the period of such contest and any appeal therefrom, may permit the
taxes, assessments or other charges so contested to remain unpaid unless the
Lessor shall notify the Lessee that, in the reasonable opinion of the Lessor, by
nonpayment of any such items the Project or any part of the Project will be
materially affected or the Project or any part thereof will be subject to
imminent loss or forfeiture, in which event such taxes, assessments or charges
shall be paid or provisions for payment by deposit or bonding shall be made
promptly by the Lessee.
Section 6.2. MECHANICS' AND OTHER LIENS. The Lessee shall not
suffer or permit any mechanics' or other liens to be filed or exist (i) against
the Project, nor (ii) against any account or fund in which Rental Payments,
Additional Payments or proceeds of the Project Debt are deposited, by reason of
work, labor, services or materials supplied or claimed to have been supplied to,
for, or in connection with the Project or to the Lessee or anyone holding the
Project or any part thereof through or under the Lessee, or otherwise; provided,
however, that if any such liens shall at any time be filed, the Lessee shall,
within ninety 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, bonding, order of a court of competent jurisdiction or
otherwise. The Lessee shall have the right, but at its own cost and expense, to
contest the validity or the amount of any such lien by appropriate proceedings
timely instituted, unless the Lessor shall notify the Lessee that, in the
reasonable opinion of the Lessor, by nonpayment of any such items any part of
the Project or moneys in such an account or fund will be subject to imminent
loss or forfeiture, in which event the Lessee shall promptly cause such lien to
be discharged as aforesaid or, in the case of a mechanics' or other lien filed
against the Project, provisions reasonably satisfactory to the Lessor and the
Lenders for payment by deposit or bonding shall be made promptly by the Lessee.
Lessor will cooperate fully with the Lessee, but at the Lessee's expense, in any
such contest (except as any such lien is asserted by the Lessor in which event
the Lessee shall have the right to contest such lien as if it were the owner of
the Project). If the Lessee shall fail to cause such lien to be discharged, or
to
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contest the validity or amount thereof, within the period aforesaid, then, in
addition to any other right or remedy of the Lessor, the Lessor may, but shall
not be obligated to, discharge the same by deposit or by bonding following
written notice to the Lessee of Lessor's intention to take such action.
Section 6.3. INSURANCE. The Lessee shall keep the Project
Facilities continuously insured in the amount and with the coverage of the
Required Property Insurance Coverage and shall keep and maintain, with respect
to the Project, Required Public Liability Insurance Coverage, provided, that
through the Completion Date, the Lessee shall provide all-risk builders risk
insurance covering the then insurable value of the Project. Subject to the next
paragraph of this section, such insurance shall name the Lessor, the Lenders,
the Ground Lessee (if the Ground Lessee is other than the Lessor), the Ground
Lessor (and any Permitted Leasehold Mortgagees) and Significant Holders (as
defined in the Indenture) as, with respect to Public Liability Required
Insurance Coverage, additional insureds and, with respect to Required Property
Insurance Coverage, the Lessor, the Lessee and the Trustee as loss payees, as
their respective interests may appear consistent with Section 7.2 hereof, and
shall be obtained and maintained by means of policies with generally recognized,
responsible insurance companies qualified to do business in the State, in
conjunction with other companies through an insurance trust or other
arrangements reasonably satisfactory to the Lessor. The insurance to be provided
may be by blanket policies. Each policy of insurance shall be written so as not
to be subject to cancellation or substantial modification without not less than
thirty days' advance written notice to the Lessor, the Ground Lessor, the Ground
Lessee and the Lenders. The Lessee shall deposit with the Lessor certificates or
other evidence reasonably satisfactory to the Lessor that the insurance required
hereby has been obtained and is in full force and effect and, at least 30 days
prior to the expiration of any such insurance, the Lessee shall furnish the
Lessor with evidence reasonably satisfactory to the Lessor that such insurance
has been renewed or replaced.
All policies providing the Required Property Insurance Coverage
shall contain a clause requiring all proceeds resulting from any claim for loss
or damage, if the proceeds of such claim are in excess of $500,000 (increased on
each January 1 by ten percent for each ten percent increase in the Consumer
Price Index Increase not theretofore the subject of such increase), to be paid
to the Lessor or its designee, and any Net Proceeds of insurance providing such
coverage shall be paid and applied as provided in Section 7.2 hereof. The
proceeds of insurance providing Required Public Liability Insurance Coverage
shall be applied toward the extinguishment or satisfaction of the liability with
respect to which such insurance proceeds have been paid.
Section 6.4. WORKERS' COMPENSATION AND UNEMPLOYMENT COVERAGE. The
Lessee shall maintain, or cause to be maintained in connection with the Project,
the workers' compensation and unemployment coverages required of it by the
applicable laws of the State.
Section 6.5. WAIVER OF SUBROGATION. Notwithstanding any other
provision of this Lease to the contrary, it is mutually agreed that the Lessor
shall not be responsible for damage by fire, lightning, windstorm, hail,
explosion, riot, riot attending a strike, civil commotion, aircraft, vehicles,
smoke, vandalism or malicious mischief to the property of the Lessee and the
Lessee shall not be responsible for damage to the property of the Lessor by the
same perils as mentioned above regardless of the negligence of either party. The
Lessee will cause each insurance carrier issuing any policy required by this
Lease to waive all rights of subrogation against the Lessor, the Lenders and the
Holders.
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Section 6.6. PAYMENT OF AMOUNTS NOT PAID BY LESSEE. If the Lessee
fails to (i) pay taxes, assessments and other governmental or utility charges as
required by Section 6.1 hereof, (ii) pay or discharge mechanics' or other liens
as required by Section 6.2 hereof, (iii) maintain and keep in force the
insurance required by Section 6.3 hereof or (iv) maintain required workers'
compensation and unemployment coverage as required by Section 6.4 hereof, the
Lessor may (but shall not be obligated to) advance funds to pay any such
required charges or items after ten business days' prior written notice to the
Lessee. Any funds so advanced shall be payable by the Lessee on demand as
Additional Payments pursuant to Section 3.2 hereof and shall bear interest from
the date of advancement to the date the Lessor is repaid (including such
interest) at the Interest Rate for Advances.
(End of Article VI)
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ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1. DAMAGE TO OR DESTRUCTION OF PROJECT. In case of any
damage to or destruction of the Project Facilities or any part thereof, the
Lessee will promptly give or cause to be given written notice thereof to the
Lessor, the Ground Lessor, any Permitted Leasehold Mortgagees and the Lenders
generally describing the nature and extent of such damage or destruction. Unless
such damage or destruction is such that the Lessee shall have certified that it
will prepay all remaining Rental Payments by paying the Discounted Rent and
terminate this Lease in accordance with Article IX hereof, there shall be no
abatement or diminution of Rental Payments and the Lessee shall, whether or not
the Net Proceeds of insurance, if any, received on account of such damage or
destruction shall be sufficient for such purpose, promptly commence and
complete, or cause to be commenced and completed, repair or restoration of the
Project Facilities as nearly as practicable to the value, condition and
character thereof existing immediately prior to such damage or destruction, with
such changes or alterations, however, as the Lessee may deem necessary for
proper operation of the Project and to which the Lessor has consented, which
consent shall not be unreasonably withheld. Notwithstanding the foregoing,
Lessee may under certain circumstances relating to damage or destruction
terminate this Lease and/or acquire the Project as set forth in Article IX.
Section 7.2. USE OF INSURANCE PROCEEDS. In connection with the
repair or restoration of the Project Facilities pursuant to Section 7.1 hereof,
Net Proceeds of Required Property Insurance Coverage not in excess of $500,000
(increased on each January 1 by ten percent for each ten percent increase in the
Consumer Price Index Increase not theretofore the subject of such increase)
shall be paid to the Lessee for application of as much as may be necessary for
such repair and restoration. Any balance of the Net Proceeds remaining after
payment of all costs of such repair, rebuilding or restoration shall be retained
by the Lessee. If such Net Proceeds are in excess of $500,000 (increased on each
January 1 by ten percent for each ten percent increase in the Consumer Price
Index Increase not theretofore the subject of such an increase) the Net Proceeds
shall be paid to and held by the Lessor or its designee, as described in the
second paragraph of Section 6.3 hereof, in a separate insurance loss account,
for application of as much as may be necessary of the Net Proceeds for the
payment of the costs of repair, rebuilding or restoration, either on completion
thereof or as the work progresses as directed by the Lessee or otherwise
provided in the Indenture. Any balance of the Net Proceeds held by the Lessor or
its designee remaining after payment of all costs of such repair, rebuilding or
restoration shall, except as otherwise provided in the Indenture, be made
available to Lessee in the event that such balance is less than $200,000, and
shall be used by the Lessee for alterations, additions or improvements to the
Project thereafter during the Lease Term in the event that such balance is
$200,000 or more.
If, in lieu of repair and restoration, the Lessee has certified
that it will prepay all remaining Rental Payments by paying the Discounted Rent
and terminate this Lease in accordance with Article IX hereof, any Net Proceeds
received by the Lessor or its designee prior to such prepayment shall be
credited against the Discounted Rent payable by the Lessee pursuant to this
Lease, and after such prepayment, no further Rental Payments shall be due
hereunder.
Section 7.3. EMINENT DOMAIN. If 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, the Lessee will promptly give or cause to
be given written notice thereof to the Lessor, the Ground Lessor, any Permitted
Leasehold Mortgagees, the Lenders and the Holders describing the nature and
extent of such taking. Any Net Proceeds received from any award made in such
eminent domain proceedings shall be paid to and held by or on behalf of the
Lessor or its designee in a separate
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condemnation award account and, unless the taking is such that the Lessee shall
have certified that it will prepay all remaining Rental Payments by paying the
Discounted Rent and terminate this Lease in accordance with Article IX hereof,
shall, except as otherwise provided in the Indenture, be made available to
Lessee to be applied in one of the following ways:
(a) The restoration of the Project Facilities to
substantially the same condition as existing prior to the
exercise of the power of eminent domain;
(b) The acquisition by construction or otherwise of other
improvements acceptable to the Lessor and suitable for the Lessee's
operations on the Project Site (which improvements shall be deemed
property of the Lessor and a part of the Project).
The balance of any net Proceeds remaining after application to (a) and (b) above
shall, except as otherwise provided in the Indenture, be made available to the
Lessee for alterations, additions and improvements to the Project thereafter
during the Lease Term.
If the Lessee shall have certified that it will prepay all
remaining Rental Payments by paying the Discounted Rent and terminate this Lease
in accordance with Article IX hereof, any Net Proceeds received from any award
made in such eminent domain proceeding shall be credited against the Discounted
Rent payable by the Lessee pursuant to this Lease, and after such prepayment no
further Rental Payments shall be due hereunder. If the Lessee shall not have so
certified, there shall be no abatement or diminution of Rental Payments.
Section 7.4. INVESTMENT AND DISBURSEMENT OF NET PROCEEDS. All
moneys received by or on behalf of the Lessor or its designee constituting Net
Proceeds may, pending application, be invested and shall, to the extent to be
used for repair, rebuilding, improvement, restoration, acquisition or
construction, be disbursed as provided in or pursuant to the Indenture and the
Project Service Agreement for the investment and disbursement of moneys in the
Proceeds Account of the Project Fund created under the Indenture.
Section 7.5. LESSEE'S OWN PERSONAL PROPERTY. The Lessee or any
permitted assignee or sublessee of the Lessee shall be entitled to the net
proceeds of any insurance claims or eminent domain award for damage or
destruction or taking of its personal property.
(End of Article VII)
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ARTICLE VIII
FURTHER REPRESENTATIONS AND AGREEMENTS
RESPECTING THE PROJECT
Section 8.1. RIGHT OF ACCESS. The Lessee agrees that inspections
may be made as provided in Section 5.2 hereof. The Lessee further agrees that
the Lessor, the Ground Lessor, any Permitted Leasehold Mortgagees, the Lenders
and the Holders and their employees and agents shall be provided such access to
the Project upon reasonable prior notice to the Lessee, as may be reasonably
necessary to cause to be completed the Project Facilities and thereafter for the
proper maintenance of the Project in the event of failure by the Lessee to
perform any of its obligations. All inspections shall be made in strict
compliance with Lessee's reasonable safety and security regulations.
Section 8.2. LESSEE TO MAINTAIN ITS CORPORATE EXISTENCE; CONDITIONS
UNDER WHICH EXCEPTIONS PERMITTED. The Lessee agrees that during the Lease Term
it will maintain its corporate existence, will not dissolve or otherwise dispose
of all or substantially all of its assets and will not consolidate with or merge
into another corporation or permit one or more other corporations to consolidate
with or merge into it; provided, that the Lessee may, without violating the
agreement contained in this Section, consolidate with or merge into another
corporation, or permit one or more other corporations to consolidate with or
merge into it, or sell or otherwise transfer to another corporation all or
substantially all of its assets as an entirety and thereafter dissolve, provided
that if the surviving, resulting or transferee corporation, as the case may be,
is other than the Lessee, such surviving, resulting or transferee corporation
assumes in writing all of the obligations of the Lessee herein and either
obtains the consent of the Lessor or has a net worth at least equal to that of
the Lessee prior to dissolution, sale, consolidation or merger, and provided
further that such consolidation, merger, sale or transfer does not violate or
result in the violation of any provision of any other agreement with any Lender
to which the Lessee is a party or of the Inducement Agreement as defined in
Section 10.1(g) hereof. Net worth shall be determined in accordance with
generally accepted accounting principles consistently applied.
If consolidation, merger or sale or other transfer is made as
provided in this Section, the provisions of this Section shall continue in full
force and effect and no further consolidation, merger or sale or other transfer
shall be made except in compliance with the provisions of this Section.
Section 8.3. TITLE OF PROJECT SITE. Written evidence as to the
status of title to the Project Site as of the date of delivery of this Lease has
been made available to the Lessee and the Lessor. The Lessee and the Lessor
agree that such title is satisfactory and that all defects in and liens and
encumbrances on such title, as set forth in such evidence as exclusions from
coverage and exceptions, do not materially impair the Lessee's use or the value
of the Project Site.
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Section 8.4. NO WARRANTY OF CONDITION OR SUITABILITY. The Lessor
does not make any warranty, either express or implied, as to the suitability or
utilization of the Project for the Project Purposes, or as to the condition of
the Project or whether the Project is or will be suitable for the Lessee's
purposes or needs. Lessor and Lessee agree that the Project is being leased to
Lessee, and Lessee hereby accepts possession of the Project, "as-is, where-is,
with all faults," with no right of set-off or reduction in the Rental Payments,
and that such transaction shall be without representation or warranty of any
kind or nature whatsoever by Lessor, or any officer, director, employee, agent
or attorney of Lessor, or any other party related in any way to any of the
foregoing (all of which parties are collectively referred to as the "Lessor
Parties"), whether express, implied, statutory or otherwise, including, without
limitation, title, warranty of income potential, operating expenses, uses,
condition, merchantability, habitability, compliance with designs,
specifications or legal requirements, absence of latent defects, or fitness for
a particular purpose, and Lessor, for itself and each of the other Lessor
Parties does hereby disclaim and renounce any such representation or warranty.
Section 8.5. ANNUAL STATEMENT AND OTHER REPORTS. The Lessee (i)
shall have an annual audit made by its regular independent certified public
accountants and shall furnish a copy of such audit to the Lessor promptly upon
its completion, but not later than one hundred twenty (120) days after the end
of the Lessee's fiscal year, and (ii) shall prepare and furnish within sixty
(60) days after the end of each fiscal year of the Lessee to the Lessor a
certificate of the Authorized Lessee Representative stating whether, to the best
of its knowledge, the Lessee is in default under this Lease, and if it is, the
nature of the default. The Lessee shall also furnish promptly to the Lessor a
copy of all financial statements, reports, notices, proxy statements and
registration statements which it sends to its shareholders generally or which it
files with any securities exchange or the Securities and Exchange Commission or
any successor agency. In the event the Lessee ceases to be an entity required to
file periodic reports with a securities exchange or the Securities and Exchange
Commission or any successor agency, the Lessee shall furnish to the Lessor the
same information and at the same times as it would have furnished such
information to a securities exchange or the Securities and Exchange Commission
in financial statements, reports, notices, proxy statements and registration
statements filed with that securities exchange or the Securities and Exchange
Commission or any successor agency.
(End of Article VIII)
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ARTICLE IX
TERMINATION OF LEASE
Section 9.1. OPTION TO TERMINATE ON PAYMENT OF RENTAL PAYMENTS. The
Lessee shall have the option to terminate this Lease when payment of the
Discounted Rent (as defined in Section 9.2 hereof but exclusive of clause (4) of
that definition) shall have been made to the Lessor. Such option shall be
exercised by the Lessee giving the Lessor and each of the Lenders notice of such
termination and, upon such payments or, to the extent applicable, provision for
payments, such termination shall forthwith become effective.
Section 9.2. TERMINATION OF LEASE ON SUBSTANTIAL CASUALTY OR
CONDEMNATION. If the Project shall have been damaged or destroyed, or 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 other Person acting under governmental authority, to such an
extent that, in the opinion of the Board of Directors of the Lessee, it is not
economically feasible to repair, rebuild, restore or replace the Project to
substantially the condition thereof immediately preceding the damage,
destruction or taking (because for example, without limitation, of the
occurrence of an uninsurable casualty), then, within 90 days following the date
on which the event authorizing that exercise occurred (the date of the
occurrence of any damage or destruction or the date of entry of a final order in
any eminent domain proceeding), the Authorized Lessee Representative shall
provide the Lessor with a copy of the action of the Board of Directors making
such determination and with its certification that (i) it will prepay all of the
remaining Rental Payments by paying the Discounted Rent on the date required as
set forth below, (ii) upon such payment it will terminate this Lease and (iii)
the Lessee has irrevocably taken such steps as are necessary under the Project
Service Agreement to terminate the Project Service Agreement, in accordance with
its terms, on or prior to such date. Copies of those certificates shall be
provided to the Lenders. In the event that such certification is given, such
certifications shall be irrevocable and the Lessee shall pay the Discounted Rent
(less any amounts on deposit with the Lessor or its designee and available
therefor pursuant to Article VII hereof, including without limitation, the Net
Proceeds of Required Property Insurance Coverage or Net Proceeds of any eminent
domain or similar payments) to the Lessor on or prior to the business day
preceding the next Interest Payment Date (as defined in the Indenture) occurring
at least 35 days after delivery of the certification (and all copies thereof)
pursuant to the preceding two sentences, which date shall be specified in the
certification of the Authorized Lessee Representative. The Discounted Rent is
irrevocably agreed and acknowledged by the parties to be the sum of the
following amounts (collectively being the "Discounted Rent" as used and defined
herein):
(1) an amount of money which will be sufficient pursuant to
the Indenture to pay all outstanding principal of and premium with
respect to the Bonds and to pay any accrued, but unpaid interest on
the Bonds to such Interest Payment Date; and
(2) an amount of money which will be sufficient to pay all
outstanding principal of the State Loan Note plus any interest and
service charges accrued, but unpaid, along with any premium on the
State Loan Note, to such Interest Payment Date; and
(3) an amount of money (or provision therefor satisfactory
to the Lessor) equal to the Additional Payments and other amounts
payable hereunder accrued and to accrue to such Interest Payment
Date; and
(4) an amount of money sufficient to raze the damaged
structures
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and level and seed the sites of such structures, which amount
shall be placed in a segregated account to be so used solely for
such purpose.
In the event the Net Proceeds of Required Property Insurance Coverage or the Net
Proceeds of any eminent domain or similar payments are received subsequent to
the payment by the Lessee of the Discounted Rent, such Net Proceeds shall be
paid to the Lessee.
The mutual agreements contained in this Section 9.2 are independent
of, and constitute an agreement separate and distinct from, any other provisions
of this Lease and any other agreements between the Lessor and the Lessee and
shall be unaffected by any fact or circumstance which might impair or be alleged
to impair the validity of those other provisions. Upon acquisition of the Bonds
and the State Loan Note by the Lessee, the Bonds, and the State Loan Note shall
be surrendered for cancellation, this Lease shall be terminated (subject to
survival of such provisions hereof as are intended to survive termination of
this Lease), all right, title and interest of the Lessee or the Lessor in or to
the Project will revert to and vest in the Lessor, as the fee owner of the
Project Facilities and the Lessee shall terminate the Project Service Agreement.
Section 9.3. OPTION TO PURCHASE LESSOR'S INTEREST IN PROJECT. The
Lessee is hereby granted an option to purchase all interests of the Lessor in
the Project upon the termination of the Lease Term pursuant to Section 9.1 or
9.2 of this Lease, or at the expiration of the Lease Term, in any such case, by
payment to the Lessor of the following sums, as applicable.
In the case of a termination pursuant to Section 9.1 of this Lease
or at the expiration of the Lease Term, the Lessee shall pay to the Lessor the
sum of
(x) $100.00; and
(y) an amount of money which is the greater of (a) the Fair
Market Value of the Project or (b) the amount required to retire in
full the Bonds and the State Loan Note plus any interest and
service charges accrued, but unpaid, along with any premium on the
Bonds and the State Loan Note, to the specified purchase date.
In the case of a termination pursuant to Section 9.2 of this
Lease, the Lessee shall pay to the Lessor the sum of
(x) $100.00; and
(y) the amount of money required to retire in full the Bonds
and the State Loan Note plus any interest and service charges
accrued, but unpaid, along with any premium on the Bonds and the
State Loan Note, to the specified purchase date.
In determining the Fair Market Value of the Project at the
termination or expiration of the Lease Term, the Lessee shall obtain an M.A.I.
appraisal of the Project acceptable to Lessor which will (i) reflect the fact
that the Project Facilities constitute a special use building configured to fit
special machinery and equipment and (ii) exclude the value of the Lessee's own
machinery, equipment and personal property (including property affixed to the
Project Facilities but which may be removed by the Lessee pursuant to the terms
hereof) from the Fair Market Value of the Project.
Any amount required to the paid by the Lessee pursuant to this
Section 9.3 in order to purchase all interests of the Lessor in the Project
shall be reduced by the amount previously paid by the Lessee pursuant to either
Section 9.1 or Section 9.2 hereof as Discounted Rent (to the extent of clauses
(1) and (2) of that definition) in connection with the termination of the Lease.
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If the Lessee exercises its option to purchase in connection with
its option pursuant to Section 9.2 of this Lease, it shall do so within the time
and in the manner as is provided in that Section. If the Lessee exercises its
option pursuant to this Section, the Lessee shall give written notice to the
Lessor and the Lenders at least three months prior to the purchase date.
Section 9.4. CONVEYANCE ON EXERCISE OF OPTION TO PURCHASE. Upon
exercise by the Lessee of its option under Section 9.3 hereof and upon payment
of all amounts payable by the Lessee in connection therewith, the Lessor will
deliver, or cause to be delivered, to the Lessee such quitclaim deeds, bills of
sale, instruments and other documents conveying to the Lessee all of the
Lessor's interests in the Project, as the Project then exists, subject to
(a) liens and encumbrances, if any, to which title to the
Project was subject at the commencement of the Lease Term;
(b) liens and other encumbrances created by the Lessee or to or in
the creation or suffering of which the Lessee consented or
acquiesced or in the creation of which it participated;
(c) liens and other encumbrances for taxes, governmental charges
or special assessments not then delinquent;
(d) liens and other encumbrances resulting from the failure of the
Lessee to observe or perform any of its covenants, agreements or
obligations under this Lease; and
(e) if the option under Section 9.3 hereof is exercised in
connection with the exercise by the Lessee of its option under
Section 9.2 hereof pursuant to the provisions of Section 9.2(a)
hereof, the rights and title of the condemning authority.
If the option under Section 9.3 hereof is exercised in connection
with the exercise by Lessee of the option under Section 9.2 hereof pursuant to
the provisions of paragraph (a) of that Section, the Lessee, upon payment of the
option price to Lessor, shall be entitled to all insurance proceeds in
connection with the damage or destruction or, at the Lessee's option, the Lessee
shall be entitled to credit such net proceeds against the payment of the option
price.
No further action of the Legislative Authority shall be required to
authorize or to effect the conveyance contemplated in this Section, and upon the
payment by the Lessee of all amounts payable by the Lessee in connection
therewith and upon satisfaction by the Lessee of all other requirements
therefor, the Secretary, either alone or together with any other officer or
officers deemed by the Secretary to be appropriate, is authorized and directed
hereby to execute and deliver any instruments and documents necessary or
advisable to effect the conveyance.
(End of Article IX)
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ARTICLE X
EVENTS OF DEFAULT
Section 10.1. EVENTS OF DEFAULT. Each of the following shall be
an "Event of Default":
(a) The Lessee shall fail (i) to pay in full any Rental
Payment on or prior to any Rental Payment Date and such failure
continues for a period of five (5) calendar days thereafter, or
(ii) to pay in full the Discounted Rent on or prior to the date
established for the payment thereof pursuant to Section 9.2 of this
Lease or (iii) to maintain any of the insurance required by Section
6.3 of this Lease or fail to maintain the required levels of
insurance for a period of five (5) calendar days.
(b) The Lessee shall fail to make any payment, other than a
Rental Payment or a payment of Discounted Rent, required to be made
under this Lease, which failure shall continue for a period of 30
days after written notice (unless the Lessor shall agree in writing
to an extension of such time prior to its expiration) specifying
such failure and requesting that it be remedied, given by the
Lessor to the Lessee.
(c) The Lessee shall fail to observe and perform any of its
other covenants, conditions or agreements contained herein for a
period of 60 days after written notice (unless the Lessor shall
agree in writing to an extension of such time prior of its
expiration) specifying such failure and requesting that it be
remedied, given by the Lessor to the Lessee; provided, however,
that if such failure is other than the payment of money and is of
such a nature that it cannot be corrected within such 60 day
period, then such failure shall not constitute an Event of Default
so long as the Lessee notifies the Lessor of its intention to cure
such failure as soon as possible after such 60 day period,
institutes curative action within such 60 day period, diligently
pursues such action to completion, and cures such failure within a
reasonable period of time, not to exceed 120 days, after such 60
day period.
(d) Any representation or warranty by the Lessee contained
in this Lease is false or misleading in any material respect.
(e) The Lessee shall: (A) (i) admit in writing its inability
to pay its debts generally as they become due; or (ii) file a
petition in bankruptcy or a petition to take advantage of any
insolvency act; or (iii) make an assignment for the benefit of
creditors; or (iv) consent to the appointment of a receiver for
itself or of the whole or any substantial part of its property; or
(B) file a petition or answer seeking reorganization or arrangement
under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state thereof; or
(C) if a petition in bankruptcy is filed against it, be adjudicated
a bankrupt, or have a court of competent jurisdiction enter an
order or decree appointing, without the consent of the Lessee, a
receiver or trustee for the Lessee or for the whole or
substantially all of its property, or have a court of competent
jurisdiction enter an order or decree approving a petition filed
against it seeking reorganization or arrangement of the Lessee
under the Federal bankruptcy laws or any other applicable law or
statute of the United States of America or any state thereof, if
any such adjudication, order or decree under this clause (C) shall
not be vacated or set aside or stayed within 90 days from the date
of the entry thereof.
(f) The Lessee shall fail, within 90 days after the
commencement of any proceeding against the Lessee seeking any
reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any present or
future statute,
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law or regulation, to have such proceeding dismissed, or, within
90 days after the appointment without the consent or acquiescence
of the Lessee, of any trustee, receiver or liquidator of the
Lessee or any material part of its properties, to have such
appointment vacated, or the Lessee shall be adjudicated as a
bankrupt or insolvent.
(g) An "Event of Default" as defined in the Inducement
Agreement, dated as of the date hereof, between the Lessee and the
original purchaser of the Project Bonds shall have occurred.
Section 10.2. 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 Lessor may declare all Rental Payments, together
with any Additional Payments and other amounts payable hereunder to
be immediately due and payable, but only in an amount equal to the
amount set forth in clauses (1) through (3) of Discounted Rent as
defined in Section 9.2 hereof (determined as of the date of payment
by the Lessee pursuant to this Section 10.2), whereupon, to the
extent permitted by law, the same shall become immediately due and
payable;
(b) The Lessor may re-enter and take possession of the
Project without terminating the Lease and sublease the Project for
the account of the Lessee, holding the Lessee liable for the
difference between the rent and other amounts payable by such
sublessee in such subleasing and the aggregate of the Rental
Payments, Additional Payments and other amounts payable by the
Lessee hereunder;
(c) The Lessor may terminate this Lease, exclude the Lessee
from possession of the Project and lease the Project to another,
but holding the Lessee liable for all Rental Payments, Additional
Payments and other amounts payable hereunder up to the effective
date of such leasing;
(d) The Lessor may have access to and inspect, examine and
make copies of the books and records and any and all accounts, data
and financial records of the Lessee, only, however, insofar as they
pertain to the Project and only to the extent that such information
is available;
(e) The Lessor may take whatever action at law or in equity
may appear necessary or desirable to collect the Rental Payments,
Additional Payments and other amounts then due and thereafter to
become due, or to enforce performance and observance of any other
obligation or agreement of the Lessee, under this Lease.
After the termination of the Lease or of Lessee's right of
possession, the Lessor shall, to the extent required under applicable law, use
reasonable efforts to mitigate damages by reletting the Project, in whole or in
part, either in its own name or as agent for the Lessee, for a term or terms,
that at the Lessor's option, may be for the remainder of the then current Lease
Term or for any longer or shorter period. The Lessor may waive and rescind any
declaration made pursuant to subparagraph (a) of the first paragraph of this
Section and waive and rescind the consequences of such declaration and of the
Event of Default with respect to which such declaration has been made, provided
that no such waiver or rescission shall extend to or affect any subsequent or
other default or impair any right consequent thereon.
The Lessor and the Lessee acknowledge that the Lessor has borrowed
money in order to provide the moneys necessary to acquire, construct, improve,
furnish, equip and develop the Project Facilities and that the Lessor, with the
knowledge of the Lessee, has contractually obligated itself to use the Rental
Payments to repay its borrowings and that an Event of Default under Section
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10.1 hereof would eliminate future Rental Payments and the source to be used to
repay the Lessor's borrowings. The Lessor and the Lessee agree that amounts paid
pursuant to paragraph (a) of this Section are liquidated damages and not a
penalty and will permit the Lessor to repay the borrowings that would have been
repaid from Rental Payments during the Lease Term.
The Lessor shall give prompt notice to each of the Lenders of an
Event of Default under this Lease and of any waiver thereof and of any
rescission of an acceleration.
Section 10.3. NO REMEDY EXCLUSIVE. No remedy conferred or reserved
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, 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 Lessor 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
expressly required herein or by applicable law.
Section 10.4. LESSEE TO PAY ATTORNEYS' FEES AND EXPENSES. If an
Event of Default occurs and the Lessor, any Lender or any Holder employs
attorneys or incurs other expenses for the enforcement of any obligation or
agreement of the Lessee contained herein or in any other agreement relating to
the Project or the Project Debt and to which the Lessee is a party, the Lessee
shall, on demand therefor and to the extent permitted by law, reimburse the
reasonable fees of such attorneys and such other expenses so incurred.
Section 10.5. 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.
(End of Article X)
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ARTICLE XI
ASSIGNMENT OF LEASE, SUBLEASING AND RELEASE
OF PORTIONS OF PROJECT
Section 11.1. SUBLEASING BY LESSEE. The Project may be subleased in
whole or in part, by the Lessee without the necessity of obtaining the consent
of the Lessor; provided that if the Lessee and its subsidiaries are occupying
and using less than 90 percent of the usable space of the Project Facilities,
then ten business days prior to executing any sublease the Lessee shall provide
notice to the Lessor specifying the name of the sublessee, the nature of its
business, the use to be made of the subleased space, the number of persons
anticipated to be employed in the subleased space, whether any hazardous or
flammable materials will be located in the space and any remodeling that is to
be accomplished to accommodate the sublessee; subject, however, to each of the
following conditions:
(a) No subletting, including pursuant to the Sublease, shall
relieve the Lessee from primary liability for any of its
obligations hereunder, and in the event of any such subletting the
Lessee shall continue to remain primarily and fully liable for the
Rental Payments and Additional Payments and for performance and
observance of the agreements on its part herein provided to be
performed and observed by it.
(b) Any sublease from the Lessee must retain for the Lessee
such rights and interests as will permit it fully to perform its
obligations under this Lease.
(c) The Lessee shall, prior to the delivery thereof, furnish
or cause to be furnished to the Lessor a true and complete copy of
each such proposed sublease, together with, after delivery, a fully
executed original counterpart of such sublease.
(d) Any sublease from the Lessee shall not materially impair
fulfillment of the purposes of the Act to be accomplished by
operation of the Project.
Section 11.2. MORTGAGE AND ASSIGNMENT BY LESSOR. In accordance with
applicable law, the Lessor may mortgage or grant an assignment of its leasehold
interest in the Project Site, and may mortgage or grant a security interest in
the Project Facilities as security for payment of any obligations of the Lessor
issued to finance costs of the Project; provided, however, that each such
mortgage, assignment or pledge shall be subordinate and subject to this Lease.
So long as no default or Event of Default has occurred and is
continuing under this Lease, upon (i) foreclosure by a Permitted Leasehold
Mortgagee on the interests of the Lessor mortgaged or (ii) realization upon the
Project Facilities by a party to which the Lessor has granted a security
interest in such Project Facilities, any party to whom ownership of such
interests mortgaged or of such Project Facilities shall be transferred (and any
assigns of any such party) shall be required, as a condition to obtaining
ownership of such interests mortgaged or of such Project Facilities, to be a
legal entity with the characteristics set forth below:
(a) Such entity shall not, except as contemplated by the
Permitted Leasehold Mortgages commingle its assets with the assets
of the Lessor or any affiliate of the Lessor; and
(b) Such entity shall at all times maintain the following
procedures to avoid or minimize any risk of substantive
consolidation of such entity with the bankruptcy or reorganization
of the Lessor: (i) maintain books and records and bank accounts
separate from those of the Lessor; (ii) file separate tax returns
except to the extent required or
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permitted by applicable law, rule or regulation; (iii) conduct
business with the Lessor and affiliates of the Lessor on an
arm's-length basis; (iv) observe trust (or similar organizational)
formalities; and (v) hold such entity out to the public as a legal
entity separate and distinct from the Lessor or any affiliate
thereof; and
(c) The trust agreement (or by-laws or other similar
organizational documents relating to the formation of such entity)
shall incorporate the restrictions and covenants contained in this
paragraph.
As used in clauses (a) - (c) of this Section 11.2, "the Lessor"
shall refer solely to the Xxxxxx-Xxxxx County Port Authority.
Section 11.3. RESTRICTIONS ON TRANSFER AND ENCUMBRANCE OF PROJECT
BY THE LESSOR. The Lessor agrees that, so long as no Event of Default has
occurred and is continuing under this Lease and except as otherwise provided in
this Lease, it will not, directly or indirectly, sell, assign, transfer, convey,
grant any easement or encumbrance or otherwise dispose of the Project or any
portion thereof during the Lease Term, nor will it create or suffer to be
created by, through and under it any debt, lien or charge thereon (except the
lien or charge for taxes, governmental charges or special assessments) 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 use or disposition
of the Project, other than as provided in Section 11.2 hereof, or as a result of
foreclosure by a Lender on the interest of Lessor mortgaged as described in
Section 11.2 or transfer in lieu of such foreclosure, or as approved by the
Lessee.
Section 11.4. RELEASE OF PROJECT. The Lessee hereby reserves the
right and the Lessor hereby agrees, at any time and from time to time, to amend
this Lease to effect the release of and removal from this Lease and the
leasehold estate created hereby of any part of or interest in the Project and
the conveyance or transfer for Fair Market Value of such part or interest to the
Lessee or one of its subsidiaries or to a grantee so long as that grantee is
approved in writing by the Lessee and the Lessor which approval shall not be
unreasonably withheld or delayed; provided, that such amendment shall not be
effective until and unless there are deposited with the Lessor the following:
(a) An executed copy of said amendment.
(b) A certificate of the Authorized Lessee Representative
(i) stating that to his knowledge no Event of Default exists and
the Lessee is not in default under any of the provisions of this
Lease, (ii) giving, if applicable, an adequate legal description of
that portion of the Project to be released, (iii) stating the
purpose for which the release is desired, (iv) stating that the
improvements, if any, to be constructed upon that portion of the
Project to be released are consistent with, or not inconsistent
with, the purposes of the Act, (v) requesting such release and (vi)
approving such amendment.
(c) Evidence of the authority of the officer of the
Lessee who executed such amendment.
(d) A certificate of the President, a Vice President, the
Treasurer or the Secretary of the Lessee or an opinion of counsel
for the Lessee stating that, to the best of his or her knowledge
after due inquiry, the Lessee is not in default under this Lease.
(e) A fully executed counterpart of the instrument conveying
or transferring the interest proposed to be released.
(f) A certificate of an Engineer, reasonably acceptable to
the Lessor, dated not more than sixty days prior to the date of the
release and stating that, in the opinion of
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such Engineer, (i) the release of the portion of the Project so
proposed to be released is necessary or desirable in order to
benefit the Project, or such portion is not needed for the
operation of the Project or such portion shall not materially
adversely affect the operation of the Project, and (ii) the
release so proposed to be made will not materially impair the
usefulness of the Project as furthering the Project Purposes, and
will not destroy or materially impair means of ingress to and
egress from the Project.
(g) An appraisal from an appraiser satisfactory to the
Lessee and the Lessor, establishing the Fair Market Value of that
portion of the Project to be released.
The Lessor shall execute and deliver such documents as the Lessee
may properly request in order to effect any release pursuant to this Section.
Any release pursuant to this Section may be made for the purpose of conveying
the part or interests released to the Lessee.
Section 11.5. GRANTING EASEMENTS. The Lessee may grant or release,
as the case may be, those easements, licenses, rights-of-way or use (including
without limitation, the dedication of public highways), party wall rights,
rights of lateral support and other rights and privileges in the nature of
easements with respect to the Project which may be lawful and which do not
unreasonably interfere in the proper and efficient use and operation of the
Project and do not materially impair the value of the Project. The Lessee
covenants and agrees that it will deliver to the Lessor at least ten days prior
to the effectiveness of the executed grant or release (a) a copy of the
instrument of grant or release, and (b) a certificate of the Authorized Lessee
Representative stating that in his opinion the grant or release (i) will not
interfere with the proper and efficient use and operation of the Project for the
Project Purposes and (ii) will not destroy or materially impair means of ingress
to or egress from the Project or the Project Facilities.
Section 11.6. NO ABATEMENT OR DIMINUTION OF PAYMENTS. No grant,
release, removal or conveyance effected under any of the provisions of this
Lease shall entitle the Lessee to any abatement or diminution of the Rental
Payments or Additional Payments payable hereunder.
Section 11.7. PAYMENT ON RELEASE OR CONVEYANCE. Any grant, release,
removal or conveyance under Section 11.4 or 11.5 of this Lease shall be made
only for consideration which is equal to or greater than the appraised value or
which the Authorized Lessee Representative certifies, and the Lessor
acknowledges, is a fair and adequate consideration. Any moneys received as such
consideration shall be paid to the Lessor and used by the Lessor for, or made
available to the Lessee (which shall promptly deliver a xxxx of sale or other
similar evidence of title to the Lessor) for use for, capital alterations,
additions or improvements to the Project or the acquisition of personal property
for the Project (which capital alterations, additions or improvements and any
such personal property shall become a part of the Project for all purposes of
this Lease) thereafter during the Lease term.
Section 11.8. LESSOR TO APPLY LEASE PAYMENTS TO DEBT AMORTIZATION
DURING ANY EXTENSION OF LEASE TERM. In the event that Lessee extends the Lease
Term pursuant to Section 12.16 of this Lease, Lessor agrees to apply Rental
Payments received during that extension of the Lease Term first to the
amortization of debt issued by the Xxxxxx-Xxxxx County Port Authority to
refinance the Project Debt in accordance with the provisions contained in any
trust indenture, loan agreement or similar instrument entered into by the Port
Authority in connection with that refinancing directing the application of
Rental Payments to debt amortization, and then to any other lawful purpose of
the Xxxxxx-Xxxxx County Port Authority.
(End of Article XI)
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ARTICLE XII
MISCELLANEOUS
Section 12.1. QUIET ENJOYMENT. The Lessor covenants with the Lessee
that, so long as the Lessee shall have paid all Rental Payments, Additional
Payments and other payments due hereunder, as and when due, and performed and
observed the other covenants and agreements on its part to be performed and
observed hereunder, the Lessee shall and may peaceably and quietly have, hold
and enjoy the Project without let or hindrance from any Person whatsoever;
provided that from and after delivery of the Assignment of Lease, with respect
to the Trustee, as assignee or its successors or assigns, such covenant to
provide the peaceable and quiet enjoyment of the Project shall be limited to
Persons claiming by, through or under the assignee.
Section 12.2. SURRENDER OF PROJECT. Upon the termination or
expiration of this Lease, the Lessee shall surrender peaceably and promptly
possession of the Project, leaving same in good condition and repair (ordinary
wear and tear excepted) and subject to damage, destruction and taking by eminent
domain if the Lessee has elected to terminate this Lease pursuant to Section 9.2
of this Lease.
Section 12.3. NOTICES. All notices, certificates, requests or other
communications hereunder shall be by first-class mail, postage prepaid, courier
service, delivery charges prepaid, facsimile transmission (if the sender's
system can confirm receipt of the transmission), or delivery addressed to the
appropriate Notice Address and deemed effective on receipt, with a duplicate
copy of such notice to be provided to the Lessor which shall have requested such
notices and provided a Notice Address to the Lessor and the Lessee. The Lessee,
the Lessor, and any other person to receive notices as provided in the
definitions of Notice Address may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates,
requests or other communications shall be sent.
Section 12.4. BINDING EFFECT. This Lease shall inure to the benefit
of and shall be binding in accordance with its terms upon the Lessor, the Lessee
and the Lenders and their respective successors and assigns. The Holders are
third party beneficiaries of this Lease as to those provisions referring to the
Holders.
Section 12.5. AMENDMENTS, CHANGES AND MODIFICATIONS. This
Lease may not be effectively amended, changed, modified, altered or terminated
except in writing signed by both the Lessor and the Lessee.
Section 12.6. EXECUTION COUNTERPARTS. This Lease may be executed
in counterpart, and in any number of counterparts, each of which shall be
regarded as an original and all of which shall constitute but one and the same
instrument.
Section 12.7. SEVERABILITY. If any provision of this Lease, or any
covenant, stipulation, obligation, agreement, act, or action, or part thereof
made, assumed, entered into, or taken thereunder or any application thereof, is
for any reason held to be illegal or invalid, such illegality or invalidity
shall not affect any other provision or any other covenant, stipulation,
obligation, agreement, act or action or part thereof, made, assumed, entered
into, or taken, each of which shall be construed and enforced as if such illegal
or invalid portion were not contained herein. Nor shall such illegality or
invalidity of any application thereof affect any legal and valid application
thereof, and each such provision, covenant, stipulation, obligation, agreement,
act, or action, or part shall be deemed to be effective, operative, made,
entered into or taken in the manner and to the full extent permitted by law.
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Section 12.8. EXTENT OF COVENANTS; NO PERSONAL LIABILITY. All
covenants, stipulations, obligations and agreements of the Lessor contained in
this Lease shall be effective to the extent authorized and permitted by
applicable law. No covenant, stipulation, obligation or agreement contained in
this Lease shall be deemed to be a covenant, stipulation, obligation or
agreement of any present or future member, officer, agent or employee of the
Lessor or the Lessee in other than his official capacity, and neither the
members of the Legislative Authority or any director or other officer of the
Lessor or the Lessee shall be subject to any personal liability or
accountability by reason of the covenants, stipulations, obligations or
agreements contained in this Lease or other instruments referred to herein.
Section 12.9. CAPTIONS. The table of contents, captions and
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 12.10. GOVERNING LAW. This Lease shall be governed
exclusively by and construed in accordance with the laws of the State.
Section 12.11. ESTOPPEL CERTIFICATE. Upon the written request of
either the Lessor or the Lessee, as the case may be, the Lessor and the Lessee
agree to deliver to the other a statement in writing and certified that this
Lease is a true and exact copy of the lease between the parties, that there are
no amendments thereto (or stating what amendments there may be and attaching
copies thereof), that to the extent the same are true this Lease is in full
force and effect, there are no offsets, defenses or counterclaims with respect
to the payment of any obligations under the terms of this Lease or under the
performance of any other terms, covenants and conditions thereof, that there are
no defaults or if there are defaults, setting forth the nature of such defaults,
the status of the Rental Payments and other payments due under the terms of this
Lease and such other information reasonably requested by the Lessor or the
Lessee. The Lessor and the Lessee agree to promptly supply the aforesaid
instrument to the other party but no later than ten days after receipt of a
written request therefor. The Lessor and the Lessee agree that any statement as
aforesaid may be relied upon by any prospective purchaser, mortgagee, assignee,
sublessee or any other Person concerning the Project.
Section 12.12. RELATIONSHIP OF THE PARTIES. Nothing contained in
this Lease shall be deemed or construed by the parties hereto, or by any third
party, as creating the relationship of principal and agent, or of partnership or
joint venture between the parties hereto, it being understood and agreed that
neither the method of computation of Rental Payments or Additional Payments nor
any other provision contained in this Lease, nor any acts of the parties to this
Lease, shall be deemed to create any relationship between the parties hereto
other than the relationship of landlord and tenant.
Section 12.13. ARBITRATION. If any controversy concerning the
determination of Fair Market Value ("Controversy") shall arise under this Lease
which is not resolved by the parties hereto, at the request of either of the
parties hereto, and unless otherwise prohibited by law, such Controversy shall
be determined in Cleveland, Ohio by three disinterested arbitrators, one of whom
shall be chosen by the Lessor, one by the Lessee and a third by the two so
chosen. The arbitrators shall as promptly as possible determine the Fair Market
Value. The Lessee shall pay the fees and expenses of that arbitration. Each
arbitrator shall be an M.A.I. appraiser and shall have at least 15 years
experience in appraising industrial projects.
The party hereto requesting arbitration, as aforesaid, shall give
notice in writing to the other party of such desire, naming therein the
arbitrator selected by it. In the event the other party shall fail, within a
period of thirty business days after the giving of such notice, to notify the
other in writing of the arbitrator selected by it, or in the event the two
arbitrators chosen shall fail, within fifteen business days after their
selection, to agree upon the third, then a judge of the Probate
-39-
44
Division of the Common Pleas Court of Xxxxx County, Ohio shall, on request of
the party not in default, appoint, within fifteen days after such request, an
arbitrator or arbitrators, to fill the place or places remaining vacant. If any
arbitrator chosen pursuant to this paragraph shall die, resign or become
incapable of acting as an arbitrator, a replacement shall be selected in the
same manner as provided herein for the original selection of the arbitrator to
be replaced.
The Ohio rules of evidence and civil procedure shall apply to any
arbitration hereunder. Each side shall be limited in its rights of discovery to
discovery permitted by the arbitrators. The decision of any two of the
arbitrators in conformity with the foregoing direction shall be final and
conclusive upon the parties hereto. The decision of the arbitrators shall be in
writing, signed in duplicate by any two of said arbitrators, and a copy shall be
delivered to each of the parties hereto. Judgment upon such decision may be
entered in any court of competent jurisdiction and shall be specifically
enforceable to the full extent permitted by law.
Except as hereinbefore in this Section provided, the rules of the
American Arbitration Association (or of any successor thereto) shall apply to
any arbitration proceeding hereunder.
Section 12.14. OTHER AGREEMENTS. Nothing herein shall be construed
nor is intended to limit or in any manner adversely affect the rights,
privileges or remedies afforded to any mortgagee of the Lessor or any other
Person under any other agreement executed in connection with the execution and
delivery of this Lease and the Project Service Agreement or the issuance of the
Bonds and the State Loan Note.
Section 12.15. NO MERGER. The acquisition by Lessee or Lessor, or
any other Person, of any greater or lesser estate in the Project or any portion
thereof shall in no event result in a merger or extinguishment of the estate
created hereby.
Section 12.16. EXTENSION OF LEASE TERM. The Lessee is granted an
option to extend the Lease Term for three (3) five (5) year periods with the
first such period commencing May 1, 2011 (the "first extension"), the second May
1, 2016 (the "second extension") and the third May 1, 2021 (the "third
extension"). To exercise the option to extend this Lease, the Lessee must notify
the Lessor, not later than eighteen (18) months prior to the commencement of the
period for which the option is exercised, that it is exercising the option and
designating the period therein for which the option is exercised.
The Rental Payments to be paid by the Lessee as rent for the
Project during the first extension shall be such amounts as are agreed to
between the parties or, in the event that no such agreement is reached, the Fair
Market Value thereof at the time of such extension. In any event, however, the
Rental Payments during the first extension shall be in amounts sufficient to
amortize, through a refinancing by the Xxxxxx-Xxxxx County Port Authority (the
"Authority"), the (i) State Loan Note Balloon (as defined in Section 7(g) of the
resolution adopted by the Board of the Authority on May 23, 1996) and (ii)
reasonable costs of issuance relating to the refinancing, such refinancing to be
repayable over five years in equal monthly installments of principal and
interest and bearing interest at a Fair Market Interest Rate (but not to exceed
a rate of 12% per year) plus an Authority fee of not to exceed $25,000 per year.
As used herein, Fair Market Interest Rate means that rate of interest to be
borne by the debt ("Debt") issued in connection with the refinancing referred to
in the previous sentence which is determined by a reputable investment banking
firm selected by the Authority and approved by the Lessee to be a fair market
rate of interest for securities of comparable maturity and credit quality as the
Debt.
The Rental Payments to be paid by the Lessee as rent for the
Project during the second and third extensions shall be such amounts as are
agreed to between the parties or, in the event that no such agreement is
reached, the Fair Market Value thereof at the time of such extensions.
-40-
45
(End of Article XII)
-41-
46
IN WITNESS WHEREOF, the Lessor and the Lessee have caused this
Lease to be duly executed in their respective names, all as of the date
hereinbefore written.
Signed and acknowledged in XXXXXX-XXXXX COUNTY
the presence of: PORT AUTHORITY
By:
------------------------- ---------------------------------
Name: Xxxxx X. Xxxxxxx, President
And by:
------------------------- ----------------------------
Name: Xxxxx X. Xxxxxxxxx, Secretary
(Witnesses as to Lessor)
Signed and acknowledged in BRUSH XXXXXXX INC.
the presence of:
By:
------------------------- ---------------------------------
Name: Xxxx Xxxxxx, Chief Financial Officer
And by:
------------------------- ----------------------------
Name: Xxxxxxx X. Xxxxxxxx, Treasurer
(Witnesses as to the Lessee)
Approved as to form:
---------------------------------------------
Xxxx Xxxxxxxxx Xxx, Staff Counsel
Xxxxxx-Xxxxx County Port Authority
-42-
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STATE OF OHIO )
) SS:
COUNTY OF XXXXX )
On this ______ day of October, 1996, before me a Notary Public in
and for said County and State, personally appeared Xxxxx X. Xxxxxxx and Xxxxx X.
Xxxxxxxxx, President of, and Secretary of the Board of Directors of the
Xxxxxx-Xxxxx County Port Authority, respectively, and acknowledged the execution
of the foregoing instrument as the duly authorized officers of said Port
Authority on behalf of said Port Authority, and that the same is their voluntary
act and deed as said officers of said Port Authority and the voluntary act and
deed of said Port Authority.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my official seal on the day and year aforesaid.
(SEAL) -------------------------------
Notary Public
-43-
48
STATE OF OHIO )
) SS:
COUNTY OF CUYAHOGA )
On this _______ day of October, 1996, before me a Notary Public
in and for said County and State, personally appeared Xxxx Xxxxxx and Xxxxxxx X.
Xxxxxxxx, Chief Financial Officer and Treasurer of Brush Xxxxxxx Inc.,
respectively, and acknowledged the execution of the foregoing instrument as the
duly authorized officers for and on behalf of said Corporation and pursuant to
authority granted by the Board of Directors of said Corporation, and that the
same is their voluntary act and deed on behalf of said Corporation and the
voluntary act and deed of said Corporation.
IN WITNESS WHEREOF, I have hereunto subscribed my name and
affixed my official seal on the day and year aforesaid.
(SEAL) -----------------------------
Notary Public
This instrument was prepared by: Xxxxx X. Xxxxx, Esq.
Squire, Xxxxxxx & Xxxxxxx
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
-44-
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EXHIBIT A
PROJECT FACILITIES
------------------
The improvements to be developed and constructed on the Project
Site pursuant to a Design/Build Agreement for Project Facilities between The
Xxxxxx-Xxxxx County Port Authority and GEM Industrial, Inc. and the additional
installation of equipment and improvements at the Project Site pursuant to the
Construction and Installation Agreement by and between Brush Xxxxxxx Inc. and
GEM Industrial, Inc., being generally an approximately 160,000 square foot
facility to be used for metal processing and manufacturing
A-1
50
EXHIBIT B-1
LEASED REAL PROPERTY
--------------------
B1-1
51
EXHIBIT B-2
EASEMENT REAL PROPERTY
----------------------
B2-1
52
EXHIBIT C
RENTAL PAYMENT AMOUNTS
Last Business
Day of: Payment Due
-------------- ------------
December, 1997 $119,936.27
January, 1998 119,936.27
February, 1998 119,936.27
Xxxxx, 0000 119,936.27
April, 1998 119,936.27
May, 1998 167,586.27
June, 1998 164,620.52
July, 1998 164,304.77
August, 1998 168,989.02
September, 1998 168,638.19
October, 1998 168,287.35
November, 1998 167,936.52
December, 1998 167,585.69
January, 1999 167,234.85
February, 1999 166,884.02
Xxxxx, 0000 166,533.19
April, 1999 166,182.35
May, 1999 168,481.52
June, 1999 165,480.69
July, 1999 165,129.85
August, 1999 164,779.02
September, 1999 164,428.19
October, 1999 164,077.35
November, 1999 168,726.52
December, 1999 168,340.60
January, 2000 167,954.69
February, 2000 167,568.77
Xxxxx, 0000 167,182.85
April, 2000 166,796.94
May, 2000 169,061.02
June, 2000 166,025.10
July, 2000 165,639.19
August, 2000 165,253.27
September, 2000 164,867.35
October, 2000 164,481.44
November, 2000 164,095.52
December, 2000 168,709.60
January, 2001 168,288.60
February, 2001 167,867.60
Xxxxx, 0000 167,446.60
April, 2001 167,025.60
May, 2001 169,254.60
June, 2001 166,183.60
July, 2001 165,762.60
August, 2001 165,341.60
September, 2001 $164,920.60
October, 2001 164,499.60
C-1
53
November, 2001 164,078.60
December, 2001 168,657.60
January, 2002 168,201.52
February, 2002 167,745.44
Xxxxx, 0000 167,289.35
April, 2002 166,833.27
May, 2002 173,797.00
June, 2002 170,690.92
July, 2002 170,234.84
August, 2002 169,778.75
September, 2002 169,322.67
October, 2002 168,866.59
November, 2002 173,410.50
December, 2002 172,919.34
January, 2003 172,428.17
February, 2003 171,937.00
Xxxxx, 0000 171,445.84
April, 2003 170,954.67
May, 2003 173,113.50
June, 2003 169,972.34
July, 2003 169,481.17
August, 2003 168,990.00
September, 2003 173,498.84
October, 2003 172,972.59
November, 2003 172,446.34
December, 2003 171,920.09
January, 2004 171,393.84
February, 2004 170,867.59
Xxxxx, 0000 170,341.34
April, 2004 169,815.09
May, 2004 171,938.84
June, 2004 173,762.59
July, 2004 173,201.25
August, 2004 172,639.92
September, 2004 172,078.59
October, 2004 171,517.25
November, 2004 170,955.92
December, 2004 170,394.59
January, 2005 169,833.25
February, 2005 169,271.92
Xxxxx, 0000 173,710.59
April, 2005 173,114.17
May, 2005 175,167.75
June, 2005 171,921.34
July, 2005 171,324.92
August, 2005 170,728.50
September, 2005 170,132.09
October, 2005 169,535.67
November, 2005 168,939.25
December, 2005 173,342.84
January, 2006 172,711.34
February, 2006 $172,079.84
Xxxxx, 0000 171,448.34
April, 2006 170,816.84
May, 2006 172,835.34
C-2
54
June, 2006 169,553.84
July, 2006 168,922.34
August, 2006 173,290.84
September, 2006 172,624.25
October, 2006 171,957.67
November, 2006 171,291.09
December, 2006 170,624.50
January, 2007 169,957.92
February, 2007 169,291.34
Xxxxx, 0000 173,624.75
April, 2007 172,923.09
May, 2007 174,871.42
June, 2007 171,519.75
July, 2007 170,818.09
August, 2007 170,116.42
September, 2007 169,414.75
October, 2007 168,713.09
November, 2007 173,011.42
December, 2007 172,274.67
January, 2008 171,537.92
February, 2008 170,801.17
Xxxxx, 0000 170,064.42
April, 2008 169,327.67
May, 2008 176,240.92
June, 2008 172,819.09
July, 2008 172,047.25
August, 2008 171,275.42
September, 2008 170,503.59
October, 2008 169,731.75
November, 2008 168,959.92
December, 2008 173,188.09
January, 2009 172,381.17
February, 2009 171,574.25
Xxxxx, 0000 170,767.34
April, 2009 169,960.42
May, 2009 171,803.50
June, 2009 173,346.59
July, 2009 172,504.59
August, 2009 171,662.59
September, 2009 170,820.59
October, 2009 169,978.59
November, 2009 169,136.59
December, 2009 173,294.59
January, 2010 172,417.50
February, 2010 171,540.42
Xxxxx, 0000 170,663.34
April, 2010 169,786.25
May, 2010 171,559.17
June, 2010 173,032.09
July, 2010 $172,119.92
August, 2010 171,207.75
September, 2010 170,295.59
October, 2010 169,383.42
November, 2010 173,471.25
December, 2010 172,524.00
C-3
55
January, 2011 171,576.75
February, 2011 170,629.50
March, 2011 169,682.25
April, 2011 168,735.00
C-4
