Exhibit 10(ac)
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LEASE AGREEMENT
between
XXXXXXX COUNTY
ECONOMIC DEVELOPMENT COUNCIL
and
CENTRAL CASTINGS CORPORATION
Dated as of November 1, 1995
______________________________
Relating to
$3,000,000
XXXXXXX COUNTY
ECONOMIC DEVELOPMENT COUNCIL
Adjustable Convertible Taxable Industrial Revenue Bonds
(Central Castings Corporation Project)
Series 1995
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TABLE OF CONTENTS*
to
LEASE AGREEMENT
between the
XXXXXXX COUNTY
ECONOMIC DEVELOPMENT COUNCIL
and
CENTRAL CASTINGS CORPORATION
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Page
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Parties................................................................ 1
Recitals............................................................... 1
ARTICLE I
DEFINITIONS AND USE OF PHRASES
Section 1.1 Definitions.............................................. 2
Section 1.2 Definitions Contained in the Indenture................... 8
Section 1.3 Use of Phrases........................................... 9
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties by the Council............ 9
Section 2.2 Representations and Warranties by the Company............ 10
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*This Table of Contents appears here for reference only and should not be
considered a part of this Lease Agreement.
i
ARTICLE III
DEMISING CLAUSES
Section 3.1 Demising Clauses......................................... 13
ARTICLE IV
CONCERNING THE PROJECT DEVELOPMENT WORK;
ISSUANCE OF THE BONDS
Section 4.1 Performance of the Project Development Work.............. 14
Section 4.2 Agreement to Issue Bonds................................. 16
Section 4.3 Disbursement of Moneys from Construction Fund............ 16
Section 4.4 No Warranty of Suitability by the Council. Company
Required to Make Arrangements for Payment of
Project Development Costs............................. 17
Section 4.5 Council to Pursue Rights Against Suppliers and
Contractors, etc...................................... 18
Section 4.6 Certification of Completion Date......................... 19
ARTICLE V
DURATION OF LEASE TERM AND RENTAL PROVISIONS
Section 5.1 Duration of Lease Term................................... 19
Section 5.2 Basic Rent; Additional Rent; Absolute and Unconditional
Obligation to Pay Basic Rent and Additional Rent...... 20
Section 5.3 Method of Payment of Basic Rent and Additional Rent...... 21
Section 5.4 Optional Prepayment of Basic Rent........................ 22
Section 5.5 General Provisions Concerning Prepayment of Basic Rent... 22
Section 5.6 Obligations of Company Unconditional..................... 22
ii
ARTICLE VI
PROVISIONS CONCERNING MAINTENANCE,
ADDITIONS, REMOVAL OF PROJECT EQUIPMENT,
INSURANCE AND TAXES
Section 6.1 Maintenance, Additions, Alterations, Improvements and
Modifications......................................... 23
Section 6.2 Removal of Project Equipment............................. 25
Section 6.3 Taxes, Other Governmental Charges and Utility Charges.... 26
Section 6.4 Insurance with Respect to Project........................ 27
ARTICLE VII
PROVISIONS RESPECTING DAMAGE,
DESTRUCTION AND CONDEMNATION
Section 7.1 Damage and Destruction Provisions........................ 28
Section 7.2 Condemnation Provisions.................................. 30
Section 7.3 Condemnation of Right to Use of the Project for Limited
Period................................................ 34
Section 7.4 Condemnation of Company-Owned Property................... 35
Section 7.5 Cooperation of the Council in the Conduct of
Condemnation Proceedings.............................. 35
Section 7.6 Cooperation of the Council with respect to Restoration of
the Project in the Event of Casualty or
Condemnation.......................................... 35
Section 7.7 Relationship to Reimbursement Agreement and Bank
Mortgage.............................................. 36
ARTICLE VIII
PARTICULAR COVENANTS OF THE COMPANY
Section 8.1 General Covenants........................................ 36
Section 8.2 Performance by the Council, the Bank or the Trustee of
Certain Company Obligations; Reimbursement of
Expenses.............................................. 36
Section 8.3 Release and Indemnification Covenants.................... 37
iii
Section 8.4 Inspection of the Project................................ 39
Section 8.5 Agreement to Maintain Corporate Existence................ 40
Section 8.6 Qualification in Alabama................................. 41
Section 8.7 Further Assurances....................................... 41
Section 8.8 Protection of Security................................... 41
ARTICLE IX
CERTAIN PROVISIONS RELATING TO
THE PROJECT AND THE BONDS
Section 9.1 Provisions Relating to Assignment and Subleasing by
Company................................................ 42
Section 9.2 References to Bonds Ineffective after Indenture
Indebtedness Paid...................................... 42
Section 9.3 Disposition of Trust Fund Moneys after Full Payment of
Indenture Indebtedness................................. 43
Section 9.4 Assignment of Lease by Council; Amendment of Lease........ 43
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default Defined................................. 44
Section 10.2 Remedies on Default....................................... 46
Section 10.3 No Remedy Exclusive....................................... 47
Section 10.4 Agreement to Pay Attorneys' Fees.......................... 48
Section 10.5 No Additional Waiver Implied by One Waiver................ 48
Section 10.6 Effect of Intercreditor Agreement......................... 48
ARTICLE XI
OPTIONS
Section 11.1 Options to Terminate the Lease During the Lease Term..... 48
Section 11.2 Option to Purchase Casualties............................ 49
Section 11.3 Option to Purchase....................................... 51
Section 11.4 Options In General....................................... 52
iv
ARTICLE XII
MISCELLANEOUS
Section 12.1 Covenant of Quiet Enjoyment. Surrender.................. 53
Section 12.2 Retention of Title to Project by Council. Granting of
Easements............................................. 53
Section 12.3 This Lease a Net Lease................................... 53
Section 12.4 Statement of Intention Regarding Certain Tax Matters..... 54
Section 12.5 Notices.................................................. 54
Section 12.6 Certain Prior and Contemporaneous Agreements
Cancelled............................................. 55
Section 12.7 Limited Liability of Council............................. 55
Section 12.8 Trustee Actions Requested by Company..................... 55
Section 12.9 Binding Effect........................................... 56
Section 12.10 Severability............................................. 56
Section 12.11 Article and Section Captions............................. 56
Section 12.12 Governing Law............................................ 56
Testimonium............................................................
Signatures.............................................................
Acknowledgments........................................................
Exhibit A
Exhibit B
v
LEASE AGREEMENT between the XXXXXXX COUNTY ECONOMIC DEVELOPMENT
COUNCIL, a public corporation organized and existing under the laws of the State
of Alabama (herein called the "Council"), and CENTRAL CASTINGS CORPORATION, a
corporation organized and existing under the laws of the State of Alabama
(herein called the "Company");
R E C I T A L S
Pursuant to this Lease Agreement, the Company is undertaking to lease
the "Project" hereinafter defined from the Council. In order to finance a
portion of the costs of acquiring, improving, enlarging and equipping said
Project, the Council will issue $3,000,000 principal amount of its Adjustable
Convertible Taxable Industrial Revenue Bonds (Central Castings Corporation
Project), Series 1995, dated the date of their issuance (herein called the
"Bonds"), under a Trust Indenture dated as of November 1, 1995 (herein called
the "Indenture"), between the Council and Chemical Bank, as Trustee (herein
called the "Trustee"). In order to secure the payment of the principal of and
the interest and premium (if any) on the Bonds, the Council will pledge and
assign under the Indenture the Council's interest in this Lease Agreement (other
than certain expense payment and indemnification rights and certain rights which
are herein expressly provided to be exercised by the Council), including
particularly the "Basic Rent" payable hereunder by the Company for the use of
said Project.
Simultaneously with the delivery of this Lease Agreement, the Company
and First Fidelity Bank, National Association (herein called the "Bank"), will
enter into a Letter of Credit and Reimbursement Agreement dated as of
November 1, 1995 (herein called the "Reimbursement Agreement"), pursuant to
which the Bank will issue to the Trustee its irrevocable letter of credit in an
amount sufficient to provide for the payment of the principal of and up to 45
days' accrued interest on the Bonds, as well as the purchase price of any Bonds
tendered (or deemed to be tendered) for purchase in accordance with the
provisions of the Indenture. The Council and the Company will enter into a
Mortgage and Security Agreement dated as of November 1, 1995 (herein called the
"Bank Mortgage"), with the Bank in order to secure the undertakings of the
Company under the Reimbursement Agreement.
NOW, THEREFORE, THIS LEASE AGREEMENT
W I T N E S S E T H:
That in consideration of the respective representations, warranties and
agreements herein contained, the parties hereto agree as follows:
1
ARTICLE I
DEFINITIONS AND USE OF PHRASES
Section 1.1 Definitions. Unless the context clearly indicates a
different meaning, the following words and phrases, as used herein, shall have
the following respective meanings:
"Act" means Act No. 82-222 of the 1982 Regular Session of the
Legislature of Alabama, as amended and supplemented and at the time in force and
effect.
"Additional Rent" means (i) the moneys payable by the Company pursuant
to the provisions of Section 5.2(b) hereof and (ii) any other moneys payable by
the Company pursuant to this Lease Agreement that are referred to herein as
Additional Rent.
"Affiliate" of any designated Person means any Person which, directly
or indirectly, controls, or is controlled by, or is under common control with,
such designated Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlled by" and "under
common control with"), as used with respect to any Person, means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of such Person whether through the ownership of voting
securities or by contract or otherwise.
"Authority" means the State Industrial Development Authority, an
Alabama public corporation, and its successors and assigns.
"Authority Bonds" means any bonds of the Authority issued pursuant to
the Authority Indenture.
"Authority Indenture" means that certain Trust Indenture dated as
of November 1, 1995, between the Authority and Chemical Bank, as trustee, as
said agreement now exists and as it may from time to time be modified,
supplemented or amended in accordance with the provisions thereof.
"Authority Indenture Trustee" means Chemical Bank, in its capacity as
trustee under the Authority Indenture, and any successor thereto in such
capacity.
"Authority Loan Agreement" means that certain Loan Agreement dated as
of November 1, 1995, between the Authority and the Company, as said agreement
now exists and as it may from time to time be modified, supplemented or amended
in accordance with the provisions thereof.
"Authorized Council Representative" means the person or persons at the
time designated as such by written certificate furnished to the Company and the
Trustee, containing the specimen signature or signatures of such person or
persons and signed on behalf of the Council by the Chairman or Vice Chairman of
its Board of Directors.
2
"Authorized Company Representative" means any person authorized to act
on behalf of the Company and designated as an authorized representative thereof
in a written certificate furnished to the Council and the Trustee, containing
the specimen signature of such person and signed on behalf of the Company by its
President or any Vice President thereof.
"Bank" means First Fidelity Bank, National Association, a national
banking association having its principal office in Philadelphia, Pennsylvania,
in its capacity as issuer of the Letter of Credit, its successors in such
capacity and their assigns. If a Substitute Letter of Credit has been provided
to the Trustee in accordance with Section 3.14 of the Indenture, any reference
to the Bank shall, unless the context requires otherwise, include reference to
the bank or other institution that provides such Substitute Letter of Credit and
its successors and assigns.
"Bank Mortgage" means that certain Mortgage and Security Agreement
dated as of November 1, 1995, which will cover the Project and which is to be
given by the Council and the Company to the Bank in order to secure the payment
by the Company of any amounts which it may be required to pay under the
Reimbursement Agreement.
"Basic Agreements" means the Lease, the Letter of Credit, the
Reimbursement Agreement, the Bank Mortgage, the Intercreditor Agreement and the
Indenture, as such instruments may from time to time be amended or supplemented
in accordance with their respective terms or the terms of the Indenture, as in
the case may be applicable.
"Basic Rent" means (i) the moneys payable by the Company pursuant to
the provisions of Section 5.2(a) hereof, (ii) any other moneys payable by the
Company pursuant to the Lease to provide for the payment of principal of or
interest or premium (if any) on the Bonds (other than the aforesaid moneys
payable pursuant to Section 5.2 hereof), and (iii) any other moneys payable by
the Company pursuant to the Lease that are therein referred to as Basic Rent.
"Bond Fund" means the Central Castings Corporation Project Bond
Principal and Interest Fund created in Section 8.1 of the Indenture.
"Bond Payment Date" means any date on which any principal or interest
with respect to the Bonds shall mature and be due and payable or on which any
principal amount of the Bonds shall be required to be redeemed prior to the
stated maturity thereof.
"Bondholder" means the Holder of any Bonds.
"Bonds" means those certain Adjustable Convertible Taxable Industrial
Revenue Bonds (Central Castings Corporation Project), Series 1995, authorized to
be issued under the Indenture initially in the aggregate principal amount of
$3,000,000.
3
"Business Day" means any day other than (a) a Saturday or a Sunday, (b)
a day on which banking institutions in New York, New York, in Philadelphia,
Pennsylvania, in Dallas, Texas, in Houston, Texas, or in any other city where
either the principal office of the Bank, the Trustee (including the office of
the Trustee from which payments of the principal of or interest on the Bonds are
made), the Remarketing Agent, or the Tender Agent is located are required or
authorized by law (including executive order) to close or on which the principal
office of the Bank, the Trustee (including the office of the Trustee from which
payments of the principal of or interest on the Bonds are made), the Remarketing
Agent or the Tender Agent is closed for a reason not related to financial
condition, or (c) a day on which the New York Stock Exchange is closed.
"Code" means the Internal Revenue Code of 1986, as amended and at the
time in force and effect.
"Company" means Central Castings Corporation, an Alabama corporation,
and, subject to the provisions of Section 8.4 hereof, includes its successors
and assigns and any corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party.
"Completion Date" means the date on which the completion of the Project
Development Work and the satisfaction of the other conditions referred to in
Section 4.6 hereof are certified to the Trustee and the Council in accordance
with the provisions of said Section 4.6.
"Construction Fund" means the Central Castings Corporation Project
Construction Fund created in Section 7.1 of the Indenture.
"Conversion Date" means the day on which the interest payable with
respect to the Bonds shall be converted from a variable interest rate to a fixed
interest rate pursuant to the provisions of Section 3.4 of the Indenture.
"Council" means the party of the first part hereto and, subject to the
provisions of Section 9.4 of the Indenture, includes its successors and assigns
and any public corporation resulting from or surviving any consolidation or
merger to which it or its successors may be a party.
"Counsel" means any attorney duly admitted to practice before the
highest court of any state of the United States of America or the District of
Columbia (including any officer or full-time employee of the Council or an
Affiliate thereof who is so admitted to practice), it being understood that
Counsel may also mean a firm of attorneys whose members are so admitted to
practice.
"Eminent Domain", when used herein with reference to any taking of
property, means the power (actual or claimed) of any governmental authority or
any Person acting under governmental authority (actual or claimed) to take such
property; and, for purposes of the Lease, a taking of property under the
exercise of the power of Eminent Domain shall include a 4 conveyance made, or a
use granted or taken, under either the threat or the fact of the exercise of
governmental authority.
4
"Event of Default" means an "Event of Default" as specified in Section
10.1 hereof.
"Holder" means the Person in whose name a Bond is registered on the
registry books of the Trustee pertaining to the Bonds.
"Indenture" means that certain Trust Indenture dated as of November 1,
1995, between the Council and Chemical Bank, a New York corporation having its
principal office in the City of New York, New York, under which (i) the Bonds
are authorized to be issued, and (ii) the Council's interests in this Lease
Agreement are to be assigned and pledged as security for payment of the
principal of and the interest and premium (if any) on the Bonds, as the said
Trust Indenture now exists and as it may hereafter be supplemented and amended.
"Indenture Indebtedness" means all indebtedness of the Council at the
time secured by the Indenture, including, without limitation, all principal of
and interest and premium (if any) on the Bonds, and all reasonable and proper
fees, charges and disbursements of the Trustee for services performed under the
Indenture.
"Independent Counsel" means Counsel having no continuing employment or
business relationship or other connection with the Council or the Company or an
Affiliate of either thereof which, in the opinion of the Trustee, might
compromise or interfere with the independent judgment of such Counsel in the
performance of any services to be performed hereunder as Independent Counsel.
"Inducement Resolution" means that certain resolution adopted by the
Council on August 23, 1994, in which the Council agreed, among other things, to
issue the Bonds to finance a portion of the costs of acquiring, improving,
enlarging and installing the Project.
"Intercreditor Agreement" means that certain Intercreditor Agreement
dated as of November 1, 1995, among the Company, the Council, the Authority, the
Trustee and the Authority Indenture Trustee, as said agreement now exists and as
it may from time to time be modified, supplemented or amended in accordance with
the provisions thereof.
"Interest Payment Date" means (i) during the period from the date of
the issuance of the Bonds to and including the Conversion Date (if any), the
first Business Day of each calendar month falling within such period and the
Conversion Date (if any) on which such period ends, and (ii) during the period
from, but not including, the Conversion Date (if any) to and including the date
of the final payment of the Bonds, each May 1 and November 1 falling within such
period.
5
"Lease" or "this Lease Agreement" means this Lease Agreement, as it now
exists and as it may from time to time be modified, supplemented or amended in
accordance with the provisions of Section 13.4 of the Indenture.
"Lease Term" means the period beginning on the date of delivery of this
Lease Agreement and continuing until 11:59 o'clock, P.M., on November 1, 2015.
"Letter of Credit" means the direct pay irrevocable letter of credit
issued by the Bank to the Trustee contemporaneously with the original issuance
of the Bonds, together with any letter of credit issued in substitution or
exchange therefor pursuant to the Reimbursement Agreement. In the event that a
Substitute Letter of Credit is provided to the Trustee pursuant to Section 3.14
of the Indenture, any reference to the Letter of Credit shall, unless the
context requires otherwise, include reference to such Substitute Letter of
Credit, and any reference to the Bank under such circumstances shall include
reference to the bank or other institution providing such Substitute Letter of
Credit.
"Net Condemnation Award" means the total amount received as
compensation for any part of the Project taken under the exercise of the power
of Eminent Domain, plus damages to any part of the Project not taken, which
compensation shall consist of (i) all awards received pursuant to administrative
or judicial proceedings conducted in connection with the exercise of the power
of Eminent Domain, plus (ii) all amounts received as a result of any settlement
of compensation claims (whether in whole or in part) negotiated with the
condemning authority, less (iii) all attorneys' fees and other expenses incurred
in connection with the receipt of such compensation, including attorneys' fees
and expenses relating to such administrative or judicial proceedings and to such
settlement negotiations.
"Net Insurance Proceeds" means the total insurance proceeds recovered
by the Council, the Company and the Trustee on account of any damage to or
destruction of the Project or any part thereof, less all expenses (including
attorneys' fees and any extraordinary expenses of the Trustee) incurred in the
collection of such proceeds.
"Offering Memorandum" means the Private Placement Memorandum pertaining
to the Bonds.
"Permitted Encumbrances" means, with respect to any of the Project, as
of any particular time, any of the following: (i) the lien of the Bank Mortgage
and any liens or other encumbrances permitted by the provisions of the Bank
Mortgage; (ii) the Lease; (iii) liens for ad valorem taxes and general and
special assessments not then delinquent; (iv) utility, access, drainage and
other easements and rights-of-way, mineral rights, covenants running with the
land, zoning restrictions, environmental regulations and other restrictions and
encumbrances affecting the use of real property, and minor defects and
irregularities in title to real property, none of the foregoing of which,
individually or in the aggregate, materially impair the title of the Company to
the real property affected thereby or interfere with the use of such property
for the purpose for which it was acquired or is held by the Company; and (v) any
inchoate mechanic's material-man's, supplier's or vendor's lien or other right
to a purchase money security interest if payment if not yet due and payable
under the contract giving rise to such lien or right.
6
"Person" means any natural person, corporation, partnership, trust,
joint venture, government or governmental body, political subdivision or other
legal entity as in the context may be possible or appropriate.
"Placement Agent" means First Fidelity Bank, N.A., Newark, New Jersey.
"Project" means the Project Site, the Project Building and the Project
Equipment, as they may at any time exist, and all other property and rights of
every kind that are or become subject to the demise of the Lease.
"Project Building" means the foundry building and related improvements
situated on the Project Site, as such building and related improvements may at
any time exist.
"Project Development Costs" means the following: (i) all costs and
expenses incurred in connection with the planning, development and design of the
Project, including the costs of preliminary investigations, surveys, estimates
and plans and specifications; (ii) all costs and expenses of acquiring,
constructing and installing the various facilities that constitute the Project,
including the cost to the Company of supervising construction and installation,
payments to contractors and materialmen and fees for professional or other
specialized services; (iii) the costs of contract bonds and of insurance of all
kinds which may be necessary or desirable in connection with the Project
Development Work and which are not paid by any contractor or otherwise provided
for; (iv) all expenses incurred in connection with the issuance and sale of the
Bonds, including (without limitation) the fees and expenses of Bond Counsel to
the Council, the acceptance fee of the Trustee, the fees and expenses of Counsel
to the Trustee, the initial fees (if any) of the Tender Agent and the
Remarketing Agent, the fees payable to the Bank in respect of the Letter of
Credit and the Reimbursement Agreement prior to the Completion Date, the fees
and expenses of Counsel to the Bank, the costs of printing the Bonds, the fees
of any Rating Agency rating the Bonds, accounting fees, financial advisory fees,
and other usual and customary expenses; (v) the charges of the Trustee for the
disbursement of moneys from the Construction Fund; (vi) all other costs which
the Council shall be required to pay, under the terms of any contract or
contracts, in connection with the Project Development Work; (vii) interest on
the Bonds to the extent that the cumulative amount thereof paid out of the
proceeds of the Bonds does not exceed the total interest that will accrue on the
Bonds from their date until and including the Completion Date; and (viii) the
reimbursement to the Company of all amounts paid directly by the Company in
respect of any of the aforesaid costs and expenses and of all amounts advanced
by the Company to the Council for the payment of such costs and expenses.
"Project Development Work" means the acquisition, improvement and
enlargement of the Project Building and the acquisition of the Project Equipment
and the installation thereof in or around the Project Building.
7
"Project Equipment" means (i) all items (whether or not fixtures) of
furniture, furnishings, fixtures, machinery, equipment or other personal
property the costs of which, in whole or in part, have been or are to be paid by
the Company out of the proceeds of the Bonds and (ii) all items (whether or not
fixtures) of furniture, furnishings, fixtures, machinery, equipment or other
personal property that are acquired by the Company in substitution for or
replacement of items of machinery, equipment or other personal property
theretofore constituting part of the Project Equipment.
"Project Site" means (i) the parcel of land specifically described in
Exhibit A attached hereto and made a part hereof and (ii) any other land that,
at the time and under the terms hereof, constitutes a part of the Project Site.
"Rating Agency" means any nationally recognized securities rating
agency which shall have outstanding a rating respecting the Bonds.
"Reimbursement Agreement" means the Letter of Credit and Reimbursement
Agreement between the Company and the Bank dated as of November 1, 1995,
pursuant to which the Letter of Credit is being issued by the Bank and delivered
to the Trustee, and any and all modifications, alterations, amendments and
supplements thereto, and, with respect to any Substitute Letter of Credit, the
agreement specifying the terms of such facility with the bank or other
institution providing the same.
"Remarketing Agent" means First Fidelity Bank, N.A., Newark, New
Jersey, or any successor remarketing agent appointed in accordance with Section
12.1 of the Indenture.
"Substitute Letter of Credit" means a credit facility other than the
original Letter of Credit that complies with the requirements of Section 3.14 of
the Indenture, including, without limitation, a letter of credit or an insurance
policy which provides security for payment of the principal of and interest and
premium (if any) on the Bonds, it being understood that any Substitute Letter of
Credit shall also provide security for the payment of the purchase price of
Bonds tendered (or deemed to be tendered) to the Tender Agent pursuant to
Section 3.5 or 3.6 of the Indenture.
"Tender Agent" means the Trustee or any successor tender agent
appointed in accordance with Section 12.3 of the Indenture.
"Trustee" means the Trustee at the time serving as such under the
Indenture.
Section 1.2 Definitions Contained in the Indenture. Unless the context
clearly indicates a different meaning, any words, terms or phrases that are used
in this Lease as defined terms without being herein defined and that are defined
in the Indenture shall have the meanings respectively given them in the
Indenture.
8
Section 1.3 Use of Phrases. "Herein", "hereby", "hereunder", "hereof",
"hereinbefore", "hereinafter", and other equivalent words refer to this Lease as
an entirety and not solely to the particular portion thereof in which any such
word is used. The definitions set forth in Section 1.1 hereof include both
singular and plural. Whenever used herein, any pronoun shall be deemed to
include both singular and plural and to cover all genders. Any percentage or
fractional amount of all the Bonds, specified herein for any purpose, is to be
figured on the aggregate principal amount of all the Bonds then outstanding.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations and Warranties by the Council. The Council
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:
(a) Organization. The Council is a public corporation validly existing
under the provisions of the Act, as now existing. The Council is not in default
under any of the provisions contained in its Bylaws or in the laws of the State
of Alabama. The Council has not initiated any proceedings or taken any action
for its dissolution.
(b) Litigation. There are no actions, suits or proceedings pending
(nor, to the knowledge of the Council, are any actions, suits or proceedings
threatened) against or affecting the Council or any property of the Council in
any court, or before an arbitrator of any kind, or before or by any governmental
body, which might materially and adversely affect the transactions contemplated
by this Lease or which might adversely affect the validity or enforceability of
this Lease or any other agreement or instrument to which the Council is or is to
be a party relating to the transactions contemplated by this Lease.
(c) Sale and Other Transactions are Legal and Authorized. The sale and
issuance of the Bonds, the execution and delivery of this Lease and the
Indenture, and the compliance with all the provisions of each thereof and of the
Bonds by the Council (i) are within the power and authority of the Council, (ii)
will not conflict with or result in a breach of any of the provisions of, or
constitute a default under, the Act or the Bylaws of the Council, any agreement
or other instrument to which the Council is a party or by which it may be bound,
or any license, judgment, decree, order, law, statute, ordinance or governmental
regulation applicable to the Council, and (iii) have been duly authorized by all
necessary corporate action on the part of the Council.
9
(d) Governmental Consents. Neither the nature of the Council, nor any
of its activities or properties, nor any relationship between the Council and
any other Person, nor any circumstance in connection with the offering, sale,
issuance or delivery of any of the Bonds is such as to require a consent,
approval or authorization of, or filing, registration or qualification with, any
governmental body on the part of the Council in connection with the execution,
delivery and performance of either this Lease or the Indenture or the offering,
sale, issuance or delivery of any of the Bonds, other than (i) the due filing
and/or recording of the Lease and the Indenture and (ii) the due filing of
requisite Uniform Commercial Code financing statements.
(e) No Default. No event has occurred and no condition exists which
would constitute an "Event of Default" under the Indenture, as "Event of
Default" is therein defined, or which would become such an "Event of Default"
with the passage of time or with the giving of notice or both. The Council is
not in default under the Act, its Bylaws, or any agreement or instrument to
which it is a party or by which it is bound, or any judgment, order, rule or
regulation of any court or other governmental body applicable to it, to the
extent in any such case that the default in question would adversely affect the
existence of the Council, its corporate power to carry out the transactions
contemplated by this Lease or the validity of any of the Bonds or the security
therefor.
(f) The Bonds. The Bonds, when issued and paid for in accordance with
this Lease and the Indenture and when duly authenticated by the Trustee, will
constitute legal, valid and binding special obligations of the Council payable
solely from the sources provided in the Indenture.
(g) Location of Project. As of the delivery of this Lease all of the
components of the Project are located wholly within Xxxxxxx County, Alabama.
(h) Full Disclosure. The representations and warranties made by the
Council in this Lease or in any written document furnished by the Council in
connection with the transactions contemplated by any of the Basic Agreements do
not contain any untrue statement of a material fact or omit a material fact
necessary to make the statements contained therein or herein, in light of the
circumstances under which they were made, not misleading at the times they were
made. There is no fact which the Council has not disclosed which materially
adversely affects or, so far as the Council can now foresee, will materially
adversely affect, the Project or the financial condition of the Company or the
ability of the Company to perform its obligations under any of the Basic
Agreements to which it is a party.
(i) Fulfillment of Purposes of Act. The Council has determined that the
issuance of the Bonds, the performance of the Project Development Work and the
leasing of the Project to the Company will fulfill the purposes of the Act.
Section 2.2 Representations and Warranties by the Company. The Company
makes the following representations and warranties as the basis for the
undertakings on its part herein contained:
10
(a) Organization and Qualification of Company. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Alabama. The Company has the power and authority to own its
properties and assets and to carry on its business as now being conducted and is
duly qualified to do business and is in good standing in the State of Alabama
and in every jurisdiction in addition to the State of Alabama wherein the
failure so to qualify and to maintain its standing would have a material adverse
effect on its business. The Company has all requisite power to enter into this
Lease and to consummate the transactions contemplated hereby, including, without
limitation, the execution, delivery and performance of each of the Basic
Agreements to which it is a party.
(b) Authorization and Validity of the Basic Agreements. The Company
has, by all necessary corporate action, duly authorized the execution, delivery
and performance of each of the Basic Agreements to which it is a party. When
duly executed and delivered by the respective parties thereto, each of the Basic
Agreements will constitute legal, valid and binding obligations of the Company
enforceable in accordance with their respective terms, except to the extent that
enforceability may be limited by (i) bankruptcy, insolvency or other similar
laws affecting the enforcement of creditors' rights and (ii) general principles
of equity (regardless of whether such enforceability is considered in a
proceeding at equity or in law).
(c) Burdensome and Conflicting Agreements and Charter Provisions. The
Company is not subject to any charter or other restriction or to any judgment,
order, rule or regulation of any court or government body which materially and
adversely affects, or in the future may (so far as the Company can now foresee)
materially and adversely affect, the business, prospects, operations,
properties, assets or condition (financial or otherwise) of the Company, nor is
it a party to any instrument or agreement which in its reasonable business
judgment materially and adversely affects, or in the future may (so far as the
Company can now foresee) materially and adversely affect, the business,
prospects, operations, properties, assets or condition (financial or otherwise)
of the Company. Neither the execution and delivery of any of the Basic
Agreements to which the Company is a party, nor the offering, sale and issuance
of any of the Bonds, nor the consummation of the transactions herein or therein
contemplated, nor the fulfillment of or compliance with the terms and provisions
hereof or thereof conflicts with, or results in a breach of, or constitutes a
default under, or results in or requires the creation of any lien (other than
that created by the Bank Mortgage or by any other security agreements or
comparable instruments delivered to the Bank in connection with the issuance of
the Letter of Credit) in respect of any properties or assets of the Company
pursuant to, or requires any authorization, consent, approval, exemption or
other action by, or any notice to, or registration, qualification or filing
with, or any other action with respect to, any court, governmental body or any
other Person (other than those already obtained, taken or made, and other than
as contemplated by the Basic Agreements) pursuant to the terms, conditions or
provisions of any applicable law (including any securities or Blue Sky law),
rule, regulation, charter, bylaw, agreement, instrument, judgment or order by
which the Company is bound or to which the Company or any of its properties is
subject.
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(d) Governmental Consents. Neither the nature of the business or
property of the Company, nor any relationship between the Company and any other
Person nor any circumstance in connection with the offering, sale, issuance or
delivery of any of the Bonds is such as to require on the part of the Company
any consent, approval, permit, exemption, action, order or authorization of, or
filing, registration or qualification with, or with respect to, any court,
regulatory agency or other governmental body in connection with the execution
and delivery of this Lease or the offering, sale, issuance or delivery of any of
the Bonds (other than those already obtained, taken or made and which continue
in full force and effect).
(e) Litigation. There is no action, suit, inquiry, investigation or
proceeding pending or overtly threatened against or affecting the Company at law
or in equity or before or by any court or governmental body (nor, to the best
knowledge and belief of the Company, is there any basis therefor) which might
result in any material adverse change in the business, prospects, operations,
properties or assets or in the financial condition of the Company, or which
might materially and adversely affect the transactions contemplated by this
Lease, or which might impair the ability of the Company to comply with its
obligations hereunder.
(f) No Defaults. No event has occurred and no condition exists which,
upon the issuance of any of the Bonds, would constitute an Event of Default or
which would become such an Event of Default with the passage of time or with the
giving of notice or both. To the best of the knowledge of the Company, no event
has occurred and no condition exists which would constitute an "Event of
Default" under the Indenture, as "Event of Default" is therein defined, or which
would become such an "Event of Default" with the passage of time or with the
giving of notice or both. The Company is not in default in any respect under any
agreement or other instrument to which it is a party or by which it is bound, or
any judgment, order, rule or regulation of any court or other governmental body
applicable to it, to the extent in any such case that the default in question
would materially and adversely affect the transactions contemplated by this
Lease or would impair the ability of the Company to comply with its obligations
hereunder. The Company is not in default in the payment of the principal of or
the interest on any of its indebtedness and is not in default under any
instrument or agreement under and subject to which any of such indebtedness has
been incurred, and no event has occurred or is continuing under the provisions
of any such instrument or agreement which constitutes or will constitute an
event of default thereunder.
(g) Licenses, Permits, Etc. In the event that the Company is required
to obtain any licenses, permits or other approvals in connection with the
acquisition, construction, installation and operation of the Project, such
licenses, permits or other approvals will be duly obtained not later than the
time required.
(h) Project's Compliance with Statutes and Regulations. To the best of
the knowledge and judgment of the Company, the operation of the Project for the
purpose for which it was designed and acquired will not conflict with any
zoning, planning or similar regulations applicable thereto and will comply in
all material respects with all applicable statutes, regulations, orders and
restrictions.
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(i) Full Disclosure. Neither any information furnished by the Company
to the Placement Agent in connection with the sale and issuance of the Bonds and
the other transactions contemplated by this Lease, nor the representations and
warranties made by the Company in this Lease or in any document in writing
furnished by the Company to the Placement Agent in connection with the
transactions contemplated hereby, contain (except to the extent, as to any such
representation or warranty not made in this Lease or in a document required to
be furnished pursuant to this Lease, corrected in any other written
communication subsequently furnished by the Company to the Placement Agent prior
to the execution and delivery of this Lease) any untrue statement of a material
fact or omit a material fact necessary to make the statements contained therein
or herein, in light of the circumstances in which they were made, not misleading
at the times they were made. There is no fact known to the Company or which in
the exercise of reasonable diligence should have been known to the Company which
the Company has not disclosed to the Placement Agent in writing prior to the
execution and delivery of this Lease which materially adversely affects or, so
far as the Company can now in the exercise of its reasonable business judgment
foresee, will materially adversely affect the Project, the financial condition
of the Company or the ability of the Company to perform its obligations
hereunder or under any agreement contemplated hereby.
(j) Date of Acquisition of Project. None of the property which
constitutes part of the Project and the costs of which are to be paid, directly
or indirectly, with proceeds of the Bonds was acquired by the Company prior to
the effective date of the Inducement Resolution, nor did the Company enter into
any binding commitment for the acquisition of any such property prior to such
date.
(k) Location of Project. As of the delivery of this Lease, the Project
is located wholly within Xxxxxxx County, Alabama.
ARTICLE III
DEMISING CLAUSES
Section 3.1 Demising Clauses. For and during the Lease Term, the
Council hereby demises and leases to the Company, subject to Permitted
Encumbrances, and the Company hereby rents from the Council, subject to
Permitted Encumbrances, the following described properties and related rights:
I
The parcel of land specifically described in Exhibit A attached hereto
and made a part hereof.
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II
The Project Building and all other buildings, structures and other
improvements now or hereafter situated on the Project Site, all permits,
easements, licenses, rights-of-way, contracts, leases, privileges, immunities
and hereditaments pertaining or applicable to the Project Site and all fixtures
now or hereafter owned by the Council and installed on the Project Site or in
the Project Building or in any of such other buildings, structures and
improvements now or hereafter located on the Project Site, it being the
intention hereof that all property, rights and privileges hereafter acquired for
use as a part of or in connection with or as an improvement to the Project Site
shall be as fully covered hereby as if such property, rights and privileges were
now owned by the Council and were specifically described herein.
III
All items (whether or not fixtures) of furniture, furnishings,
fixtures, machinery, equipment and other personal property that at any time,
under the provisions of the Lease, constitute the Project Equipment, including,
without limitation, the items (whether or not fixtures) of furniture,
furnishings, fixtures, machinery, equipment and other personal property
generally described in Exhibit B attached hereto and made a part hereof,
excluding, however, any such personal property that, under the provisions of the
Lease, is, or is to become (prior to the termination of the Lease), the sole
property of the Company or third parties.
ARTICLE IV
CONCERNING THE PROJECT DEVELOPMENT WORK;
ISSUANCE OF THE BONDS
Section 4.1 Performance of the Project Development Work. The Council
and the Company will undertake and complete, or will cause to be undertaken and
completed, the following work with respect to the Project:
(a) the improvement of the Project Site in such manner and to
such extent as the Company deems necessary or desirable,
(b) the improvement and enlargement of the Project Building,
which shall be improved and enlarged in accordance with detailed plans
and specifications to be prepared by the Company and its agents, and
(c) the acquisition and installation in or about the Project
Building or elsewhere on the Project Site of such items of furniture,
furnishings, fixtures, machinery, equipment and other personal property
necessary for or useful in the operation of the Project as shall be
specified by the Company (said furniture, furnishings, fixtures,
machinery, equipment and other personal property, as presently
envisioned by the Company, being generally described on Exhibit B
attached hereto and made a part hereof).
14
The Council and the Company will use their best efforts to complete the Project
Development Work, or to cause the same to be completed, as promptly as
practicable, delays incident to strikes, riots, acts of God or the public enemy
or other acts beyond the reasonable control of the Council or the Company only
excepted; provided, however, that no liability on the part of the Council nor
any reduction in or postponement of any rentals payable by the Company hereunder
shall result from any delay in the completion of any of the Project Development
Work or from the failure of such work to be completed in accordance with the
plans, specifications and directions furnished by the Company.
The Council acknowledges that the Project is to be acquired, improved,
enlarged and installed in accordance with the requirements of the Company, and
it is therefore agreed and understood that the Company, at any time and from
time to time after the delivery of this Lease Agreement, may cause such changes
to be made in the design of the Project Building as it, in the exercise of its
sole judgment, may deem necessary or desirable; provided however, that (i) the
Project Building, as finally improved and enlarged in accordance with the
requirements of the Company, shall be of a size and quality substantially
equivalent to that contemplated by the Company at the time of the delivery of
this Lease Agreement and (ii) the character of the Project Building shall be
such as is necessary for the Project to qualify for financing under the Act.
Further, the Company may, after the delivery of this Lease Agreement, cause such
changes to be made in the Project Equipment described in Exhibit B hereto,
including additions thereto, deletions therefrom and substitutions therefor, as
it may desire and as will not cause the Project Equipment, as altered by such
changes, to be, in the reasonable judgment of the Company, functionally inferior
(insofar as the operation of the Project by the Company is concerned) to the
Project Equipment described in said Exhibit B. Except as provided in the
foregoing provisions of this paragraph, neither the Company nor the Council will
cause or permit any changes to be made in the design of the Project Building or
in the composition of the Project Equipment. The rights of the Company under
this paragraph to cause changes to be made in the Project Equipment described in
said Exhibit B shall apply only to the selection of such equipment prior to its
installation in or about the Project Building, and nothing herein contained
shall be construed to enlarge, restrict or otherwise alter the terms and
conditions contained in Section 6.2 of this Lease Agreement respecting the
removal of any item of the Project Equipment.
The Council will execute and deliver, or cause to be executed and
delivered, all contracts, orders, requisitions, instructions and other written
instruments and do, or cause to be done, all other acts or things that may be
necessary or proper to carry out the Project Development Work and to perform
fully its obligations under this Lease Agreement. In no event, however, will the
Council hereafter enter into any contract with respect to the Project
Development Work or any part thereof unless there is endorsed thereon a legend
indicating that the Company has approved both the form and substance of such
contract and such legend is signed on behalf of the Company by an Authorized
Company Representative.
15
The Council hereby ratifies and confirms all actions heretofore taken
by it pursuant to the Inducement Resolution and assumes and adopts all contracts
heretofore entered into by the Company, whether in the name and behalf of the
Council or in the name and behalf of the Company, with respect to the Project
Development Work; provided, however, that any obligation for the payment of
money incurred or assumed by the Council with respect to any such contract shall
be payable solely from the proceeds derived by the Council from the sale of any
of the Bonds, from income earned by the Council from the investment of such
proceeds or from any moneys made available to the Council by the Company for the
payment of such obligation.
The Council and the Company shall each appoint by written instrument an
agent or agents authorized to act for each respectively in any or all matters
arising under the Lease or the Indenture which, by the specific terms of the
Lease or the Indenture, require action by such agents. Each agent so appointed
to act for the Council shall be designated an Authorized Council Representative,
and each agent so appointed to act for the Company shall be designated an
Authorized Company Representative. Either the Council or the Company may from
time to time, by written notice to the other party hereto and to the Trustee,
revoke, amend or otherwise limit the authorization of any agent appointed by it
to act on its behalf or designate another agent or agents to act on its behalf,
provided that with reference to all the foregoing matters there shall be at all
times at least one Authorized Council Representative authorized to act on behalf
of the Council and at least one Authorized Company Representative authorized to
act on behalf of the Company.
Section 4.2 Agreement to Issue Bonds. In order to finance a portion of
the Project Development Costs, the Council will, simultaneously with the
delivery hereof, issue and sell the Bonds and, as security therefor, execute and
deliver the Indenture. In the Indenture, the Council has agreed, upon the
occurrence of an Adjudication of Invalidity with respect to the Authority Bonds
and the satisfaction of certain conditions precedent, to issue a second
installment of bonds pursuant to the Indenture. The Council acknowledges that,
for the further security of the Holders of the Bonds, the Bank has issued the
Letter of Credit and that in connection therewith the Company and the Bank have
entered into the Reimbursement Agreement and the Council, the Company and the
Bank have entered into the Bank Mortgage. All the terms and conditions of the
Indenture (including, without limitation, those relating to the amounts and
maturity date or dates of the principal of the Bonds, the interest rate or rates
thereof and the provisions for redemption thereof prior to their respective
maturities) are hereby approved by the Company, and to the extent that any
provision of the Indenture, the Reimbursement Agreement or the Bank Mortgage is
relevant to the calculation of any rental or other amount payable by the Company
hereunder or to the determination of any other obligation of the Company
hereunder, the Company hereby agrees that such provision of such instrument
shall be deemed a part hereof as fully and completely as if set out herein.
Section 4.3 Disbursement of Moneys from Construction Fund. Subject to
the conditions of Section 4.4 hereof, the Council will pay, or cause to be paid,
all Project Development Costs (other than those paid with proceeds of the
Authority Bonds), but such costs shall be paid solely out of the principal
proceeds from the sale of the Bonds, income earned from the investment of such
proceeds and any other moneys which the Company may cause to be deposited in the
Construction Fund. The Company, as agent for the Council, will cause such
requisitions to be prepared and submitted to the Trustee as shall be necessary
to enable the Trustee to pay, out of moneys held in the Construction Fund in
accordance with the provisions of Section 7.1 of the Indenture, the Project
Development Costs. The Company, upon request, will furnish a copy of each such
requisition to the Council.
16
The Council will, simultaneously with the issuance of the Bonds or as
soon thereafter as may be practicable, cause the Trustee, upon submission of
requisitions satisfying the requirements of the Indenture, to reimburse the
Company, out of the proceeds of the Bonds deposited in the Construction Fund,
for (i) all costs and expenses that the Company may have heretofore paid or
incurred in connection with the Project Development Work, and (ii) all advances
and loans to the Council heretofore made by the Company in order to enable the
Council to pay Project Development Costs. The Company hereby acknowledges and
agrees that the failure by the Council to reimburse the Company, or to cause the
Company to be reimbursed, in full for all such costs and expenses and all such
advances [whether such failure results from insufficient moneys being available
in the Construction Fund for such purpose, a decision by the Company not to
request such reimbursement or any other cause (other than a willful refusal by
the Council to perform its obligations hereunder)] shall not result in any
diminution or postponement of any rentals payable by the Company hereunder, or
in the acquisition of title to any part of the Project by the Company, or in the
imposition of a lien in favor of the Company upon any part of the Project.
Section 4.4 No Warranty of Suitability by the Council. Company Required
to Make Arrangements for Payment of Project Development Costs. The Company
recognizes that the Project Development Work has been or is to be planned and
carried out under its control and in accordance with its requirements, and the
Council can, therefore, make no warranty, either express or implied, or offer
any assurances that such work, when completed, will be suitable for the
Company's purposes or needs or that the proceeds derived from the sale of the
Bonds, together with the income (if any) earned from the investment of such
proceeds, will be sufficient to pay in full all the Project Development Costs.
In the event such proceeds and investment income (if any) are insufficient to
pay all the Project Development Costs, the Company
(a) will cause such changes to be made in the scope of the
Project Development Work (including changes in the design of the
Project Building or in the composition of the Project Equipment) as
will result in the aggregate Project Development Costs not exceeding
such proceeds and investment income, or
17
(b) will itself complete the Project Development Work as
originally planned and will pay that portion of the Project Development
Costs in excess of such proceeds and investment income, or
(c) will pay into the Construction Fund such moneys as are
necessary for the payment of all Project Development Costs, in which
case the Council will complete the Project Development Work, or
(d) will take action pursuant to any two or more of the
courses of action described in the preceding clauses (a), (b) or (c),
all to the end that all obligations incurred by the Council in connection with
the Project Development Work shall be paid in full and that the acquisition,
improvement, enlargement and installation of the Project shall be completed. The
Company shall not, by reason of (1) its direct payment of any excess Project
Development Costs, (2) its payment of any moneys into the Construction Fund for
the payment of any such costs or (3) any other arrangements made by it for the
payment of such costs, be entitled to any reimbursement from the Council or to
any diminution or postponement of any rentals payable by the Company hereunder.
Further, the fact that the Company directly pays, or directly or indirectly
furnishes money to the Council for the payment of, any part of the Project
Development Costs shall not result in the Company's acquisition of title to any
part of the Project or in the imposition of a lien in favor of the Company upon
any part of the Project, it being understood and agreed (A) that title to all
the Project shall, as between the Council and the Company, be fully and solely
vested in the Council and (B) that any such lien in favor of the Company that
might so result is hereby expressly waived and released by the Company.
Section 4.5 Council to Pursue Rights Against Suppliers and Contractors,
etc. In the event of default by any supplier, contractor or subcontractor under
any contract with the Council for the performance of the Project Development
Work or any part thereof, the Council will, upon written request made to it by
the Company, proceed, either separately or in conjunction with others, to
exhaust all remedies the Council may have against such supplier, contractor or
subcontractor so in default and against each surety (if any) for the performance
of such contract, but all actions taken by the Council to exhaust such remedies
shall be at the expense of the Company. Further, in the event the Council
proceeds in an arbitration proceeding or by an action at law or in equity
against any such supplier, contractor, subcontractor or surety pursuant to the
provisions of this section or in the event any such supplier, contractor,
subcontractor or surety brings any such proceeding or action against the Council
in connection with or relating to the Project Development Work, the Council will
follow all reasonable directions given to it by the Company in connection with
such proceeding or action, and the Company shall have full and complete control
thereof, but any Counsel selected by the Company for the Council shall be
subject to the approval of the Council. The net amount recovered by the Council
in any such proceeding or action shall be paid into the Construction Fund or, if
such amount is recovered after the Completion Date, to the Company, unless an
Event of Default shall have occurred and be continuing, in which case such
amount shall be paid into the Bond Fund.
18
The Council hereby transfers and assigns to the Company all the
Council's rights and interests in, to and under any maintenance or surety bonds
or warranties respecting quality, durability or workmanship obtained by or
vested in the Council in connection with the Project Development Work, and
grants to the Company the right to take action, in the name of either the
Council or the Company, but at the Company's sole cost and expense, for the
enforcement of such bonds and warranties. The net amount recovered in any such
action shall be paid into the Construction Fund or, if such amount is recovered
after the Completion Date, to the Company, unless an Event of Default shall have
occurred and be continuing, in which case such amount shall be paid into the
Bond Fund.
Section 4.6 Certification of Completion Date. The Completion Date shall
be evidenced to the Trustee and the Council by a certificate signed by an
Authorized Company Representative stating that
(a) the acquisition, improvement, enlargement and installation
of the Project and all other Project Development Work have been
completed in accordance with the applicable plans, specifications and
directions furnished by the Company,
(b) all the Project Development Costs have been paid in full,
except for amounts retained by the Company or by the Trustee at the
Company's direction for any such costs not then due and payable or the
liability for payment of which is being contested or disputed by the
Company or by the Council at the Company's direction, and
(c) the Project is operational for the purpose for which it
was designed.
ARTICLE V
DURATION OF LEASE TERM AND RENTAL PROVISIONS
Section 5.1 Duration of Lease Term. The Lease Term shall begin on the
date of the delivery of this Lease Agreement and, subject to the provisions
hereof, shall continue until 11:59 o'clock, P.M., on November 1, 2015. The
Council will deliver to the Company sole and exclusive possession of the Project
(or such portion or portions thereof as are then in existence) on the
commencement date of the Lease Term, subject to the inspection and other rights
reserved in Section 8.4 hereof, and the Company will accept possession thereof
at such time; provided, however, that the Council will be permitted such access
to the Project as shall be necessary and convenient for it to accomplish the
undertakings on its part contained in Section 4.1 hereof; and provided further,
that the Council will be permitted such possession of the Project as shall be
necessary and convenient for it to make any repairs, restorations, additions or
improvements required or permitted to be made by the Council pursuant to the
provisions of the Lease.
19
Section 5.2 Basic Rent; Additional Rent; Absolute and Unconditional
Obligation to Pay Basic Rent and Additional Rent. In addition to any other
rentals payable under the Lease, the Company shall pay:
(a) Basic Rent.
(1) The Company shall make Basic Rent payments to the Trustee
or the Tender Agent, for the account of the Council, in installments as
follows:
(a) at or before 11:00 a.m. (New York City time) on each Bond
Payment Date, the Company shall pay to the Trustee, in immediately
available funds, an amount equal to the principal of and the interest
and premium (if any) on the Bonds due on such Bond Payment Date;
provided, however, that any amount already on deposit in the Bond Fund
on the due date of such Basic Rent payment and available for the
payment of debt service on the Bonds on such Bond Payment Date or any
moneys drawn under the Letter of Credit and available for such payment
shall be credited against the amount of such Basic Rent payment; and
(b) at or before 11:00 a.m. (New York City time) on each
Tender Date with respect to the Bonds, the Company shall pay to the
Tender Agent, in immediately available funds, an amount equal to the
purchase price of Bonds tendered (or deemed tendered) for purchase on
such Tender Date; provided, however, that any amount already on deposit
in the Bond Purchase Fund on such Tender Date that is available for the
payment of the purchase price of Bonds to be tendered on such Tender
Date or any moneys drawn under the Letter of Credit and available for
such payment shall be credited against the amount of such Basic Rent
payment.
(2) If, during any year while any of the Bonds shall be
outstanding, the Basic Rent shall be insufficient to pay the principal
of and the interest and premium (if any) on the Bonds as the same
become due, the amount of the insufficiency shall be paid by the
Company as additional Basic Rent. If at any time the amount in the Bond
Fund is sufficient to pay in full the debt service on all outstanding
Bonds, then no further Basic Rent shall be payable hereunder. If any
moneys remain in the Bond Fund after payment or the making of provision
for payment in accordance with the provisions of the Indenture of the
principal of, premium, if any, interest on, and, if redemption is
involved, redemption expenses in connection with, all outstanding
Bonds, such remaining moneys shall be transmitted to the Bank to the
extent that funds are owed to the Bank under the Reimbursement
Agreement and otherwise shall be refunded to the Company as excess
Basic Rent.
20
(b) Additional Rent. The Company shall pay Additional Rent to the
Council or to the Trustee, as the case may be, as follows:
(1) the acceptance fee of the Trustee and the annual (or other
regular) fees, charges and expenses of the Trustee, the Tender Agent
and the Remarketing Agent (including the fees of their respective
counsel and agents) designated under the Indenture;
(2) any other amount to which the Trustee may be entitled
under the Indenture;
(3) the reasonable expenses of the Council incurred at the
request of the Company, or in the performance of its duties under the
Lease, the Indenture, the Bank Mortgage or the Bonds, or in connection
with any litigation which may at any time be instituted involving the
Project, the Lease, the Indenture, the Bank Mortgage or the Bonds or in
the pursuit of any remedies under the Lease, the Indenture, the Bank
Mortgage or the Bonds.
(c) All Additional Rent payments shall be due and payable within 10
Business Days after receipt by the Company of a reasonably detailed invoice
therefor.
(d) Any overdue Basic Rent payment shall bear interest from the related
Bond Payment Date or Tender Date until paid at a per annum rate which is one
percent (1%) greater than the interest rate borne by the Bonds during the
applicable period. Any overdue Additional Rent payment shall bear interest from
the date due until paid at a per annum rate which is two percent (2%) greater
than the Prime Rate in effect from time to time.
Section 5.3 Method of Payment of Basic Rent and Additional Rent.
Payments of Basic Rent shall be made to the Council by the Company's remitting
the same directly to the Trustee or the Tender Agent, for the account of the
Council, and shall be deposited by the Trustee in the Bond Fund or by the Tender
Agent in the Bond Purchase Fund. The Council agrees at the Company's request to
cause the Trustee to furnish to the Company at reasonable intervals an
accounting of the funds in the Bond Fund, including the amount of Bonds paid and
outstanding. Additional Rent specified in Section 5.2 shall be paid by the
Company's remitting the same directly to the Trustee, for the account of the
Council, in the case of the Trustee's fees, expenses and charges and either
making direct payment in the case of impositions and other costs, expenses,
liabilities and payments assumed and agreed to be paid by the Company under the
Lease, or reimbursing the Council or the Trustee, if, pursuant to the provisions
of the Lease, the Council or the Trustee shall make payment thereof.
21
Section 5.4 Optional Prepayment of Basic Rent. The Company may, at its
option at any time and from time to time, prepay directly to the Trustee, for
the account of the Council, such amount of Basic Rent as shall be sufficient to
enable the Council to redeem and retire, in advance of maturity, any or all of
the Bonds in accordance with their terms and the terms of the Indenture. In the
event of such prepayment, the Council will cause the amount of Basic Rent so
prepaid to be applied to redemption and retirement of Bonds, in accordance with
the provisions of the Indenture, on the earliest practicable date after receipt
of such prepaid Basic Rent on which, under their terms and the terms of the
Indenture, such Bonds may be redeemed, and will (upon being notified by the
Company in writing of the Company's intention in this respect and without the
necessity of the moneys therefor being deposited with the Trustee) take all
action necessary under the provisions of the Indenture to effect such
redemption. Prepayments of Basic Rent referable to the Bonds shall be applied to
the redemption of Bonds at the redemption prices and in accordance with the
other terms and conditions set forth in Section 3.8 of the Indenture or to
reimburse the Bank for moneys advanced under the Letter of Credit to effect the
redemption of Bonds.
Section 5.5 General Provisions Concerning Prepayment of Basic Rent. The
prepayment of Basic Rent pursuant to any provision of the Lease will result in a
total or partial abatement of the Basic Rent that would thereafter have come due
had it not been for such prepayment. After the prepayment of Basic Rent
sufficient to pay, redeem and retire all the outstanding Bonds, the Company
shall be entitled to the use and possession of the Project without the payment
of any further Basic Rent but otherwise on all the same terms and conditions of
the Lease.
Section 5.6 Obligations of Company Unconditional. The obligation of the
Company to pay the Basic Rent, to make all other payments provided for herein
and to perform and observe the other agreements and covenants on its part herein
contained shall be absolute and unconditional, irrespective of any rights of
set-off, recoupment or counterclaim it might otherwise have against the Council.
The Company will not suspend, discontinue, reduce or defer any such payment or
fail to perform and observe any of its other agreements and covenants contained
herein or (except as expressly authorized herein) terminate the Lease for any
cause, including, without limiting the generality of the foregoing, the failure
of the Council to complete the acquisition, improvement, enlargement and
installation of the Project or any other part of the Project Development Work,
any acts or circumstances that may deprive the Company of the use and enjoyment
of the Project, failure of consideration or commercial frustration of purpose,
or any damage to or destruction of the Project or any part thereof, or the
taking by Eminent Domain of title to or the right to temporary use of all or any
part of the Project, or any change in the tax or other laws, rules and
regulations of the United States of America, the State of Alabama or any
political or taxing subdivision or any department or agency of either thereof,
or any change in the cost or availability of labor or energy adversely affecting
the profitable operation of the Project by the Company, or any failure of the
Council to perform and observe any agreement or covenant, whether express or
implied, or any duty, liability or obligation arising out of or connected with
the Lease.
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The provisions of the first paragraph of this section shall remain in
effect only so long as any of the Indenture Indebtedness remains outstanding and
unpaid. Nothing contained in this section shall be construed to prevent the
Company, at its own cost and expense and in its own name or in the name of the
Council, from prosecuting or defending any action or proceeding or taking any
other action involving third persons which the Company deems reasonably
necessary in order to secure or protect its rights hereunder, including, without
limitation, such actions as may be necessary to insure that the Project
Development Work will be completed in accordance with the directions and
requirements of the Company, and in such event the Council will cooperate fully
with the Company in any such action or proceeding. Further, nothing contained in
this section shall be construed to release the Council from the performance of
any of the agreements on its part herein contained or to preclude the Company
from instituting such action against the Council as the Company may deem
necessary to compel such performance, it being understood and agreed, however,
that no such action on the part of the Company shall in any way affect the
agreements on the part of the Company contained in the first paragraph of this
section or in any way relieve the Company from performing any such agreements.
ARTICLE VI
PROVISIONS CONCERNING MAINTENANCE,
ADDITIONS, REMOVAL OF PROJECT EQUIPMENT,
INSURANCE AND TAXES
Section 6.1 Maintenance, Additions, Alterations, Improvements and
Modifications. The Company will, at its own expense, keep the Project in
reasonably safe condition and keep all improvements, equipment and other
facilities at any time forming part of the Project in good repair and operating
condition (reasonable wear and tear excepted), making from time to time all
necessary and proper repairs thereto (including, without limitation, exterior
and structural repairs); provided, however, that the Company shall have no
obligation hereunder to repair or maintain the Project after full payment of the
Indenture Indebtedness. The Council and the Company recognize that, as a result
of reasonable wear and tear, technological obsolescence or other causes, various
items of the Project Equipment may become inadequate, obsolete, worn-out or
unsuitable in the use and operation of the Project by the Company, but neither
the Council nor the Company shall be obligated to replace or renew any such
items of the Project Equipment.
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The Company may, at its own cost and expense, make, or cause to be
made, any additions, alterations, improvements or modifications to the Project
that it may deem desirable for its business purposes, provided that such
additions, alterations, improvements or modifications do not change the
character of the Project to such extent that it no longer constitutes an
industrial project of the type that the Council is empowered to own under the
provisions of the Act. All such additions, alterations, improvements and
modifications to the Project so made, or caused to be made, by the Company shall
be and become a part of the Project subject to the demise hereof and shall be
held by the Company on the same terms and conditions as the property originally
constituting the Project.
All additions, alterations, improvements or modifications to the
Project made, or caused to be made, by the Company shall
(a) be located wholly within the boundaries of the Project
Site,
(b) be located wholly within the boundaries of other adjacent
land hereafter acquired by the Council that has been subjected to the
demise of the Lease, or
(c) be located wholly within the boundaries of the Project
Site and such other adjacent land.
Any such adjacent land so subjected to the demise hereof shall thenceforth be
considered, for purposes of the Lease, as part of the Project Site. All such
additions, alterations, improvements and modifications to the Project so made,
or caused to be made, by the Company shall become a part of the Project.
The Company will not permit any mechanics' or other liens to stand
against the Project for labor, materials, equipment or supplies furnished in
connection with the original acquisition, improvement, enlargement and equipment
of the Project or in connection with any additions, alterations, improvements,
modifications, repairs or renewals that may subsequently be made thereto. The
Company may, however, at its own expense and in good faith, contest any such
mechanics' or other liens and in the event of any such contest may permit any
such liens to remain unsatisfied and undischarged during the period of such
contest and any appeal therefrom unless by such action any part of the Project
shall be subject to loss or forfeiture, in which event such mechanics' or other
liens shall (unless they are bonded or superseded in a manner satisfactory to
the Trustee) be satisfied promptly.
At any time and from time to time, the Company may, at its own cost and
expense, install in or around the Project Building any equipment or other
personal property which does not constitute part of the Project Equipment and
which in the Company's judgment is necessary or convenient for its use and
operation of the Project, provided that the installation of such equipment or
other personal property does not significantly impair the value or utility of
the Project. Any such equipment or personal property owned (or leased pursuant
to any lease contract other than the Lease) by the Company may be removed by the
Company at any time and from time to time without responsibility or
accountability to the Council or the Trustee, but the Company shall promptly
repair at its own expense any damage to the Project caused by the removal of any
such equipment or other personal property.
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Section 6.2 Removal of Project Equipment. In any instance where the
Company in its sole discretion determines that any item of the Project Equipment
has become inadequate, obsolete, unsuitable, undesirable or unnecessary in the
use and operation of the Project, the Company may remove such item of Project
Equipment from the Project and (on behalf of the Council) sell, trade in,
exchange or otherwise dispose of it without any responsibility or accountability
to the Council or the Trustee therefor. In any instance not described in the
preceding sentence, the Company may so remove and dispose of items of Project
Equipment, provided that the Company thereafter substitutes and installs in or
about the Project Building other equipment or other personal property having
equal or greater utility (but not necessarily the same value or function) in the
operation of the Project, which such substituted equipment or other property
shall be free of all liens and encumbrances (other than Permitted Encumbrances),
shall be the sole property of the Council, shall become a part of the Project
Equipment subject to the demise hereof and shall be held by the Company on the
same terms and conditions as the items originally constituting the Project
Equipment.
If as a result of the removal of any item of the Project Equipment
pursuant to the provisions of the first paragraph of this Section 6.2, the
Company becomes obligated to substitute other equipment or other personal
property for the Project Equipment so removed, it may, so long as it is not in
default with respect to the payment of any installment of Basic Rent, defer the
substitution of such other equipment or other personal property for any
reasonable period, taking into account (without limitation thereto) such causes
for delay as strikes or labor disputes, disruption of operations at the Project
due to the construction of improvements thereto, and delays in the delivery of
purchased equipment or other personal property to be substituted for the Project
Equipment so removed. Upon the substitution of any equipment or other personal
property for any item of the Project Equipment removed pursuant to the
provisions of the first paragraph of this Section 6.2, the Company will furnish
the Council with a certificate signed by an Authorized Company Representative
describing such equipment or other personal property and identifying the Project
Equipment for which it is to be substituted. Anything herein contained to the
contrary notwithstanding, the Company shall not be in default under this Lease
Agreement because of any failure to substitute equipment or other personal
property for any Project Equipment theretofore removed from the Project unless
such failure shall have continued for at least ninety (90) days after the
Council or the Trustee shall have given the Company written notice specifying
the Project Equipment theretofore removed for which no substitution has been
made and requesting the Company to make an appropriate substitution therefor.
In any case where the Company does not then own any equipment or other
personal property suitable for substitution for any of the Project Equipment
removed from the Project pursuant to the provisions of the first paragraph of
this Section 6.2, or in any case where the Company desires to purchase the
equipment or other personal property to be substituted for any of the Project
Equipment so removed, the Company may, in lieu of purchasing and installing such
equipment or other personal property, advance to the Council the funds necessary
therefor, whereupon the Council will purchase and install such equipment or
other personal property.
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The Council will, by xxxx of sale or other appropriate conveyance,
convey to the Company any item of the Project Equipment which, as a result of
compliance with the provisions of this Section 6.2, the Company is entitled to
have released from the demise of this Lease Agreement. The Company will
reimburse the Council for its reasonable expenses and disbursements incurred in
connection with such conveyance and the execution and delivery of such
instrument.
The preceding provisions of this section shall apply only so long as
any of the Indenture Indebtedness remains unpaid. After full payment of the
Indenture Indebtedness and the cancellation and satisfaction of the Indenture in
accordance with the provisions thereof, the Company may, if in its sole
discretion it determines that any or all items of the Project Equipment have
become unsuitable or unnecessary for its use and operation of the Project,
remove such items of the Project Equipment from the Project Building and (on
behalf of the Council) sell or otherwise dispose of such items, without any
responsibility or accountability to the Council therefor and without being
required to install in or around the Project Building equipment or other
personal property in substitution therefor, and may retain any money or other
consideration received by it upon any disposition of such items of Project
Equipment.
Nothing contained herein shall prohibit the Company, at any time during
which no Event of Default shall have occurred and be continuing, from removing
from the Project Building any equipment or other personal property that is owned
by it or leased by it from third parties and that does not constitute part of
the Project Equipment; provided, however, that if any such equipment or other
personal property owned by the Company or leased by it from third parties is
removed from the Project Building prior to full payment of the Indenture
Indebtedness, the Company will promptly repair at its own expense any damage to
the Project caused by such removal.
Section 6.3 Taxes, Other Governmental Charges and Utility Charges. The
Company will pay
(a) all taxes and governmental charges of any kind whatsoever
that may lawfully be assessed or levied against or with respect to the
Project, including, without limiting the generality of the foregoing,
any taxes levied upon or with respect to any part of the receipts,
income or profits of the Council from the Project and any other taxes
levied upon or with respect to the Project which, if not paid, would
become a lien on the Project or a charge on the revenues and receipts
therefrom prior to or on a parity with the pledge and assignment
thereof made in the Indenture,
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(b) all assessments and charges lawfully made by any
governmental body for public improvements that may be secured by a lien
on the Project; provided that with respect to special assessments or
other governmental charges that may lawfully be paid in installments
over a period of years, the Company shall be obligated to pay only such
installments as are required to be paid during any period while the
Lease shall be in effect, and
(c) all claims or judgments which, if not paid or discharged,
would give rise to a lien on the Project, or a charge on the revenues
of the Council from the Project prior to, or on a parity with, the
pledge and assignment of such revenues made in the Indenture.
The Council will forward to the Company, promptly following its receipt thereof,
any bills, statements, assessments, notices or other instruments asserting or
otherwise relating to any such taxes, assessments or charges.
The Company may, at its own expense and in its own name and behalf or
in the name and behalf of the Council, in good faith contest any such taxes,
assessments and other charges and, in the event of any such contest, may, if it
so notifies the Council and the Trustee in writing, permit the taxes,
assessments or other charges so contested to remain unpaid during the period of
such contest and any appeal therefrom. The Council will cooperate fully with the
Company in any such contest.
The Company will also pay, as the same respectively become due, all
utility and other similar charges incurred in the operation, maintenance, use
and upkeep of the Project.
Section 6.4 Insurance with Respect to Project. The Company will take
out not later than the effective date of this Lease Agreement and thereafter
continuously maintain in effect or cause to be so taken out and maintained in
effect the following insurance:
(a) insurance against loss or damage to all of the
improvements and items of personal property that constitute part of the
Project by fire, lightning, vandalism and malicious mischief, with
uniform standard extended coverage endorsement limited only as may be
provided in the standard form of extended coverage endorsement at the
time in use in the State of Alabama, to such extent as is necessary to
provide (i) for full payment of the costs of repairing, restoring or
replacing the property damaged or destroyed or, if insurance to such
extent is not available, to the extent of the full insurable value (as
determined by a recognized insurer) of such improvements and personal
property or (ii) for the recovery of such lesser amount as may be
required for the full payment of the Indenture Indebtedness then
outstanding; and
27
(b) comprehensive general liability insurance against
liability for personal or bodily injury to or death of persons and for
damage to or loss of property occurring on or about the Project or in
any way related to the use or occupancy of the Project in the minimum
amounts of $1,000,000 per person per occurrence and $2,000,000
aggregate per occurrence.
All policies providing the insurance required by this section shall be
taken out and maintained in generally recognized responsible insurance
companies, qualified under the laws of the State of Alabama to assume the
respective risks undertaken. All such policies may be written with deductible
amounts comparable to those on similar policies carried by organizations owning
or occupying similar properties. All policies providing the insurance required
to be carried by this section shall be deposited with the Trustee, provided,
however, in lieu thereof the Company may deposit with the Trustee a certificate
or certificates of the respective insurers attesting the fact that such
insurance is in force and effect. At least thirty (30) days prior to the
expiration date of any such policy, the Company will furnish to the Trustee
evidence reasonably satisfactory to the Trustee that such policy has been
renewed or replaced by another policy or that there is no necessity therefor
under the Lease. Anything herein to the contrary notwithstanding, any insurance
required by the provisions hereof may be evidenced by a blanket policy covering
risks in addition to those hereby required to be covered, but if and only if
appropriate allocation certificates and loss payable endorsements are furnished
to the Trustee.
ARTICLE VII
PROVISIONS RESPECTING DAMAGE,
DESTRUCTION AND CONDEMNATION
Section 7.1 Damage and Destruction Provisions. If, prior to full
payment of the Indenture Indebtedness, the Project is destroyed, in whole or in
part, or is damaged, by fire or other casualty, the Company will promptly so
notify the Council and the Trustee in writing. All obligations of the Company
and the Council under the Lease which are still capable of performance
(including, without limitation, the obligation of the Company to pay the Basic
Rent and all Additional Rent due hereunder) shall continue in full force and
effect. If, in such event, the Company is not entitled to exercise the option to
purchase the Project granted in Section 11.2 hereof or if, in such event, being
entitled to, it does not exercise such option, the Net Insurance Proceeds
recovered by the Council, the Company and the Trustee on account of such damage
or destruction shall be paid to and held by the Trustee. Pursuant to directions
to be given the Council and the Trustee by the Company in a written statement to
be forwarded to the Council and the Trustee not more than ninety (90) days
following the event causing such damage or destruction, such proceeds shall be
applied by the Trustee in one or both of the following ways (the amount, if any,
to be applied in each such way to be specified in such written statement):
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(a) payment of the costs of repairing, replacing or restoring
the property damaged or destroyed to the extent necessary for it to
have substantially the same functional value that it had (or would have
had if the Company had theretofore complied with all of its obligations
hereunder) prior to the event causing such damage or destruction, with
such changes, alterations or modifications as shall be specified by the
Company; or
(b) the redemption of Bonds prior to maturity in accordance
with the terms of the Indenture and on the earliest practicable date
permitted thereby (or, prior to the termination of the Letter of
Credit, the reimbursement of the Bank for moneys advanced under the
Letter of Credit to redeem Bonds), or the purchase of Bonds for
retirement, in which case such portion of the Net Insurance Proceeds to
be used therefor shall be deposited in the Redemption Fund, provided
that no part of any such portion of the Net Insurance Proceeds shall be
so deposited in the Redemption Fund and so applied for any such purpose
unless the Bank shall consent in writing to such deposit and
application.
In the event that the Bank does not consent to the redemption of Bonds as
required by the provisions of subparagraph (b) of this paragraph, then the Net
Insurance Proceeds shall be applied in accordance with the provisions of
subparagraph (a) of this paragraph.
In the event that the Net Insurance Proceeds held by the Trustee (or
any specified portion thereof) are to be applied for payment of the costs of
repairing, replacing or restoring the property damaged or destroyed, the
Construction Fund shall be reestablished and such proceeds (or specified portion
thereof) shall be deposited therein, and the Council will cause disbursements to
be made from such fund to pay such costs in the same manner (with the necessary
changes in detail) as provided in the Indenture for the disbursement of proceeds
of the Bonds originally deposited in such fund. Any balance of the Net Insurance
Proceeds (or any balance of the portion thereof specified for the payment of
such costs) remaining after the payment of all such costs shall be paid into the
Redemption Fund.
In the event that the Net Insurance Proceeds (or the portion thereof
specified for the payment of such costs) are not sufficient to pay in full the
costs of such repair, replacement or restoration, the Company (i) will
nonetheless complete the work thereof and will pay that portion of the costs
thereof in excess of the Net Insurance Proceeds (or specified portion thereof)
available for the payment of such costs, or (ii) will pay to the Trustee, for
the account of the Council, the moneys necessary to complete such work, in which
case the Council will cause such work to be so completed, and the Council and
the Trustee will, upon completion of such work and payment in full of the costs
thereof, return to the Company any portion of such payment that is not needed
therefor. The Company shall not, by reason of the payment of such excess costs
(whether by direct payment thereof or payment to the Trustee therefor), be
entitled to any reimbursement from the Council or to any abatement or diminution
of the rent provided for herein.
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In no event shall any of the Net Insurance Proceeds held by the Trustee
be applied for payment of any costs of repair, replacement or restoration unless
and until (i) the Council and the Trustee have been notified in writing by the
Company that the Company irrevocably relinquishes any right it may have, on
account of such damage or destruction, to exercise the option to purchase the
Project granted in Section 11.2 hereof, or (ii) the time within which the
Company must exercise such option has expired without the Company having
exercised such option. If, however, as a result of such damage or destruction,
the Company is entitled to exercise such option and duly does so in accordance
with the applicable provisions of said Section 11.2, then neither the Company
nor the Council shall have any obligation to repair, replace or restore the
property damaged or destroyed, in which case so much (which may be all) of such
Net Insurance Proceeds then held by the Trustee as shall be necessary to provide
for full retirement of the Bonds (as specified in Section 11.2 hereof) shall be
paid or credited by the Trustee into the Bond Fund Primary Account and so much
of the excess thereafter remaining (if any) as shall be necessary for the
payment of any other Indenture Indebtedness shall be applied by the Trustee to
the payment of such other Indenture Indebtedness. Any portion of such Net
Insurance Proceeds remaining after payment in full of the entire Indenture
Indebtedness and payment to the Bank of any amounts owed to it under the
Reimbursement Agreement shall be paid to the Company after or simultaneously
with the exercise by the Company of such option.
If the Project is destroyed, in whole or in part, or is damaged after
the Indenture Indebtedness has been paid in full, neither the Company nor the
Council shall be obligated to repair, replace or restore the property damaged or
destroyed, and any Net Insurance Proceeds referable to such damage or
destruction shall be paid to the Company; provided, however, that the Council
will, to the extent and in the manner provided in Section 7.6 hereof, cooperate
fully with the Company in carrying out such repair, replacement and restoration
as the Company may, in its sole discretion, decide to undertake.
All property acquired in connection with the repair, replacement or
restoration of any part of the Project pursuant to the provisions of this
Section 7.1 shall be and become part of the Project subject to the demise hereof
and shall be held by the Company on the same terms and conditions as the
property originally constituting the Project.
Section 7.2 Condemnation Provisions. If title to the Project or any
part thereof is taken under the exercise of the power of Eminent Domain, the
entire condemnation award in respect of such taking [including, without
limitation, (i) all amounts received as the result of any settlement of
compensation claims negotiated with the condemning authority, and (ii) any
amount awarded as compensation for the interest of the Company in the part of
the Project taken and as damages to the interest of the Company in any part
thereof not taken, but not including any condemnation award belonging to the
Company pursuant to the provisions of Section 7.4 hereof] shall be applied and
certain related actions shall be taken in accordance with the succeeding
provisions of this Section 7.2:
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(a) Taking of All or Substantially All the Project Prior to
Full Payment of the Indenture Indebtedness. If all or substantially all
the Project is so taken by such exercise of the power of Eminent
Domain, prior to full payment of the Indenture Indebtedness, the entire
condemnation award in respect of such taking shall be paid to the
Trustee and the Lease shall terminate [except as to the provisions of
this subsection (a) and any other provisions hereof which are expressly
stated herein to survive the termination of the Lease] as of the
forty-fifth (45th) day after the receipt by the Trustee of the final
installment of the entire condemnation award in respect of such taking,
unless the Company has theretofore exercised the option to purchase the
Project granted in Section 11.2 hereof. The Council will cause the
Company to be notified in writing, as promptly as practicable following
such receipt by the Trustee of such final installment of the entire
condemnation award, of the date on which such final installment was so
received by the Trustee and the amount of the Net Condemnation Award in
respect of such taking then held by the Trustee. On or before the close
of business on the business day next preceding the date on which the
Lease shall terminate pursuant to this subsection (a), the Company will
pay to the Trustee, for the account of the Council, such additional
Basic Rent as, when added to the total of the amounts then held in the
Construction Fund, the Bond Fund (exclusive of any amount held therein
for payment of matured but unpaid Bonds, Bonds called for redemption
but not yet redeemed and matured but unpaid interest) and the
Redemption Fund plus the full amount of the Net Condemnation Award then
held by the Trustee, will be sufficient to pay, redeem and retire all
the then outstanding Bonds (or, in the case of the Bonds prior to the
termination of the Letter of Credit, to reimburse the Bank for moneys
advanced under the Letter of Credit to redeem the Bonds) on the
aforesaid date on which the Lease shall terminate, including, without
limitation, principal, premium (if any), interest to maturity or
earliest practicable redemption date, as the case may be, expenses of
redemption and all other Indenture Indebtedness. Simultaneously with or
promptly after the termination of the Lease, any portion of the Net
Condemnation Award not needed for payment of the Indenture Indebtedness
shall be applied to the payment of any obligations then owed to the
Bank under the Reimbursement Agreement, and any such moneys remaining
after the payment of all such obligations then owed to the Bank shall
be paid to the Company.
(b) Taking of Less than Substantially All the Project Prior to
Full Payment of the Indenture Indebtedness. If less than substantially
all the Project is taken by such exercise of the power of Eminent
Domain, prior to full payment of the Indenture Indebtedness, all
obligations of the Company under the Lease which are still capable of
performance (including, without limitation, the obligation of the
Company to pay the Basic Rent and all other amounts payable hereunder)
shall continue in full force and effect. The Company shall be entitled
to collect, hold and apply all of the Net Condemnation Award in respect
of any such taking, regardless of the amount thereof, and any part of
such award initially paid to the Council or the Trustee shall be paid
over to the Company or applied as the Company may direct in accordance
with the provisions hereof. The Net Condemnation Award in respect of
any such taking shall be applied by the Company, or at its direction,
for one or more of the following purposes, with the amount, if any, to
be applied to each such purpose to be determined by the Company
(subject to the approval of the Bank):
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(1) payment of the costs of repairing, restoring, modifying,
relocating or rearranging any portions of the Project not taken but
damaged or adversely affected by such taking, all under such
circumstances and upon such terms as shall be specified by the Company;
(2) payment of the costs of acquiring (by construction,
purchase or otherwise) such additional facilities and equipment as the
Company may direct, which facilities and equipment (i) shall be
acquired by the Council and made subject to the demise of the Lease
free of liens and encumbrance other than Permitted Encumbrances, and
(ii) shall be deemed a part of the Project and made available for use
by the Company, without the payment of additional rent hereunder, to
the same extent as if such facilities and equipment had originally
constituted part of the Project and had been specifically demised
hereby;
(3) the redemption of Bonds prior to maturity in accordance
with the terms of the Indenture and on the earliest practicable date
permitted thereby (or, in the case of the Bonds prior to the
termination of the Letter of Credit, the reimbursement of the Bank for
moneys advanced under the Letter of Credit to redeem Bonds), or the
purchase of Bonds for retirement, in which case such portion of the Net
Condemnation Award to be used for such redemption or purchase shall be
paid by the Company to the Trustee and deposited in the Redemption
Fund.
In the event that the Company determines to apply the Net Condemnation Award (or
any specified portion thereof), pursuant to the provisions of subparagraphs (1)
or (2) of this subsection, for payment of the costs of repairing, restoring,
modifying, relocating or rearranging any part of the Project or for payment of
the costs of acquiring additional property to become part of the Project, as the
case may be, the Council, at the request of the Company, will undertake in its
own name such repair, restoration, modification, relocation or rearrangement or
such acquisition of additional property, and in such case the Company shall pay
such award (or specified portion thereof) to the Trustee for the account of the
Council. The Trustee shall use the Construction Fund (which shall be
reestablished if necessary) to apply the Net Condemnation Award (or specified
portion thereof) for the payment of the costs of repairing, restoring,
modifying, relocating or rearranging any part of the Project or for payment of
the costs of acquiring additional property, as the case may be, and such award
(or specified portion thereof) shall be deposited in such fund and held therein,
invested to the extent not immediately required for the payment of such costs,
and disbursed pursuant to requisitions submitted by the Company, all on the same
terms and conditions (with the necessary changes in detail) as provided in the
Indenture with respect to the proceeds of the Bonds deposited in such fund.
32
Any balance of the Net Condemnation Award (or any balance of the
portion thereof specified for the payment of such costs) remaining after payment
of all such costs, whether at the time held by the Company or the Trustee, shall
be paid into the Bond Fund or, if the Indenture Indebtedness has been paid in
full and no Event of Default shall have occurred and be continuing, such moneys
shall be applied to the payment of any obligations then owed to the Bank under
the Reimbursement Agreement, and any such moneys remaining after the payment of
all such obligations then owed to the Bank shall be paid to the Company. In the
event that the Net Condemnation Award (or the portion thereof specified for the
payment of such costs) is not sufficient to pay in full the costs of such
repair, restoration, modification, relocation or rearrangement, or the costs of
acquiring such additional property, as the case may be, the Company (i) will
nonetheless complete such repair, restoration, modification, relocation or
rearrangement or the acquisition of such additional property, as the case may
be, and will pay that portion of the costs thereof in excess of the amount of
the Net Condemnation Award (or specified portion thereof) available for the
payment of such costs, or (ii) will pay to the Trustee, for the account of the
Council, the moneys necessary to complete such repair, restoration,
modification, relocation or rearrangement or the acquisition of such additional
property, as the case may be, in which case the Council will cause such
undertakings to be so completed, and the Trustee will, upon completion of such
undertakings and payment in full of the costs thereof, return to the Company any
portion of such payment by the Company that is not needed therefor. The Company
shall not, by reason of the payment of such excess costs (whether by direct
payment thereof or payments to Trustee therefor), be entitled to any
reimbursement from the Council or to any reduction or abatement of the rentals
and other payments due from the Company hereunder.
(c) Taking of All or Substantially All the Project After Full
Payment of the Indenture Indebtedness. If, after full payment of the
Indenture Indebtedness, title to all or substantially all the Project
is taken by such exercise of the power of Eminent Domain, the Net
Condemnation Award referable to such taking shall be paid to the Bank
to the extent that any amounts are then owed to it under the
Reimbursement Agreement, and any such moneys remaining after the
payment of all such amounts then owed to the Bank shall be paid to the
Company. The Lease shall terminate as of the date on which the final
condemnation award is received by the Company or the Bank, as the case
may be, and the Council and the Company shall have no further rights or
obligations hereunder except those which may theretofore have vested.
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(d) Taking of Less Than Substantially All the Project After
Full Payment of Indenture Indebtedness. If, after full payment of the
Indenture Indebtedness, title to less than substantially all the
Project is taken by such exercise of the power of Eminent Domain, the
Lease shall continue in full force and effect, but neither the Company
nor the Council shall be obligated to correct or ameliorate in any way
the condition of the Project caused by such taking, and the Net
Condemnation Award referable to such taking shall be paid to the Bank
to the extent that any amounts are then owed to it under the
Reimbursement Agreement, and any such moneys remaining after the
payment of all such amounts then owed to the Bank shall be paid to the
Company; provided, however, that the Council will, to the extent and in
the manner provided in Section 7.6 hereof, cooperate fully with the
Company in carrying out such work of repairing, restoring, modifying,
relocating or rearranging the Project or in acquiring such additional
property to form part of the Project as the Company may, in its sole
discretion, deem necessary or desirable.
If the Company duly exercises the option to purchase the Project
granted in Section 11.2 hereof in accordance with the applicable provisions of
said section, then neither the Company nor the Council shall be obligated to
correct or ameliorate in any way the condition of the Project caused by such
taking, in which case so much (which may be all) of any part of the Net
Condemnation Award then held by the Trustee as shall be necessary to provide for
full retirement of the Bonds (as specified in Section 11.2 hereof), or to
reimburse the Bank for moneys advanced under the Letter of Credit to provide for
the retirement of Bonds, shall be paid or credited by the Trustee into the Bond
Fund and so much of the excess thereafter remaining (if any) as shall be
necessary for the payment of any other Indenture Indebtedness shall be applied
by the Trustee to the payment of such other Indenture Indebtedness.
Simultaneously with the exercise by the Company of such option, any portion of
such Net Condemnation Award remaining after payment in full of the entire
Indenture Indebtedness shall be paid to the Bank to the extent that any amounts
are then owed to it under the Reimbursement Agreement, and any such moneys
remaining after the payment of all such amounts then owed to the Bank shall be
paid to the Company.
Section 7.3 Condemnation of Right to Use of the Project for Limited
Period. If the use, for a limited period, of all or part of the Project is taken
under the exercise of the power of Eminent Domain, the Lease (including, without
limitation, the provisions hereof relating to the payment of Basic Rent) shall,
unless as a result thereof the Company is entitled to exercise the option to
purchase the Project granted in Section 11.2 hereof and duly does so in
accordance with the provisions of said Section 11.2, continue in full force and
effect, but with the consequences specified in the succeeding provisions of this
section. If the period of such taking expires on or before the expiration of the
Lease Term, the Company shall be entitled to receive the entire condemnation
award made therefor, whether by way of damages, rent or otherwise, and shall
upon being restored to possession restore the Project to substantially the same
condition as prior to such taking, with such changes, alterations and
modifications as will not significantly impair the operating utility of the
Project. If such taking occurs during the Lease Term but the period of such
taking expires after the expiration of the Lease Term, the Company shall be
entitled to receive that portion of the award allocable to the period from the
date of such taking to the end of the Lease Term, and the Council shall be
entitled to the remainder thereof; provided that if prior to the end of the
Lease Term, the Company exercises either of the options to purchase the Project
granted in Sections 11.2 and 11.3 hereof, the Company (rather than the Council)
shall be entitled to receive the remainder of such award.
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Section 7.4 Condemnation of Company-Owned Property. The Company shall
be entitled to any condemnation award or portion thereof made for damages to or
the taking of its own property not included in the Project, but any condemnation
award resulting from damages to or the taking of all or any part of the
leasehold estate or other interest of the Company in the Project created by the
Lease shall be applied in accordance with the provisions of Section 7.2 or 7.3
hereof, whichever may be applicable. In the event of any taking which involves
both the Project and property of the Company, the Company shall be responsible
for all attorney's fees and other expenses properly allocable to the taking of
its own property.
Section 7.5 Cooperation of the Council in the Conduct of Condemnation
Proceedings. The Council will cooperate fully with the Company in the handling
and conduct of any prospective or pending condemnation proceeding with respect
to the Project or any part thereof and will follow all reasonable directions
given to it by the Company in connection with such proceeding. In no event will
the Council settle, or consent to the settlement of, any prospective or pending
condemnation proceeding with respect to the Project or any part thereof without
the prior written consent of the Company.
Section 7.6 Cooperation of the Council with respect to Restoration of
the Project in the Event of Casualty or Condemnation. If, as a result of the
taking of title to less than substantially all the Project or the taking of the
temporary use of all or any part of the Project through the exercise of the
power of Eminent Domain, or if, as a result of any event causing destruction or
damage to the Project or any part thereof, the Company determines, in accordance
with any applicable provision of this article, to acquire (by purchase,
construction or otherwise) any additional property to replace any part of the
Project so taken, or to have the Project repaired, replaced, restored, modified,
relocated or rearranged in order to correct or ameliorate any condition caused
by such taking, damage or destruction, as the case may be, then the Council will
execute and deliver, or cause to be executed and delivered, all contracts,
orders, requisitions, instructions and other written instruments and do, or
cause to be done, all other acts that may be necessary or proper in carrying out
all such undertakings with respect to the Project. In no event, however, will
the Council hereafter enter into any contract with respect to any part of such
undertakings unless there is endorsed thereon a legend indicating that the
Company has approved both the form and substance of such contract and such
legend is signed on behalf of the Company by an Authorized Company
Representative at the time acting as such under the provisions hereof. Any
obligation for the payment of money incurred or assumed by the Council in
connection with such undertakings shall be payable solely out of any Net
Condemnation Award held by the Trustee or from any other moneys made available
to the Council by the Company under the provisions of the Lease.
35
Section 7.7 Relationship to Reimbursement Agreement and Bank Mortgage.
So long as the Letter of Credit remains in effect, to the extent that any
provision of the Reimbursement Agreement or the Bank Mortgage is inconsistent
with any provision of Article VI or VII of this Lease, such provision of the
Reimbursement Agreement or the Bank Mortgage shall govern and control.
ARTICLE VIII
PARTICULAR COVENANTS OF THE COMPANY
Section 8.1 General Covenants. The Company will, in the use of the
Project, comply in all material respects with all valid and applicable laws,
ordinances, rules, regulations and orders of all governmental authorities or
agencies; provided, however, that the Company may in good faith contest the
validity of any such laws, ordinances, rules, regulations and orders or the
application thereof to the Project and in the event of any such contest defer
compliance therewith during the period of such contest and the pendency of any
appeal in connection therewith, unless by such action the rights or interests of
the Council or the Trustee with respect to the Project or any part thereof shall
be materially endangered or impaired.
Section 8.2 Performance by the Council, the Bank or the Trustee of
Certain Company Obligations; Reimbursement of Expenses. In the event the Company
fails to pay any obligation which it has herein covenanted to pay, the Council,
the Bank or the Trustee, after first notifying the Company in writing of any
such failure on its part and after the subsequent failure by the Company to
perform the obligation with respect to which it is delinquent within thirty (30)
days of the date of its receipt of such notice, may (but shall not be obligated
to) perform any such obligation on behalf of the Company. Any expense incurred
by the Council, the Bank or the Trustee in performing any of such obligations of
the Company shall become an additional obligation of the Company secured by the
Indenture and shall be repaid by the Company, together with interest thereon,
from the date such expense was actually paid by the Council, the Bank or the
Trustee, as the case may be, until the date of its repayment by the Company, at
a per annum rate equal to two percent (2%) above the Prime Rate from time to
time in effect until such amount is repaid or at the maximum applicable
non-usurious per annum rate of interest then permitted by law, whichever of the
foregoing rates of interest is the lesser. Any remedy vested in the Council or
the Trustee by this Lease Agreement for the collection of Basic Rent or
Additional Rent shall also be available to the Council or the Trustee for the
collection of all expenses so paid by the Council or the Trustee in performing
any of such obligations of the Company.
36
Section 8.3 Release and Indemnification Covenants. The Company releases
the Council (and each director, officer, employee or agent thereof) and the
Trustee (and each director, officer, employee or agent thereof) from, and will
indemnify and hold the Council (and each director, officer, employee or agent
thereof) and the Trustee (and each director, officer, employee, or agent
thereof) harmless against, any and all claims and liabilities of any character
or nature whatsoever, regardless of by whom asserted or imposed, and losses of
every conceivable kind, character and nature whatsoever claimed by or on behalf
of any Person arising out of, resulting from, or in any way connected with the
Project; provided, however, that the Company shall not be obligated to indemnify
any director, officer, employee or agent of the Council against any claim,
liability or loss in any way connected with the Project unless such claim,
liability or loss arises out of or results from official action taken in the
name and behalf of the Council by such director, officer, employee or agent.
Without limiting the generality of the foregoing, the Company will indemnify the
Trustee (and each director, officer, employee or agent thereof) for, and hold it
harmless against, any loss, liability or expense incurred without gross
negligence or bad faith on its part, arising out of or in connection with the
acceptance or administration of the trust established by the Indenture,
including the costs and expenses of defending itself against any claim or
liability in connection with the exercise or performance of any of its powers or
duties under the Indenture.
The Company acknowledges that it has sought and received the assistance
and cooperation of the Council in connection with the offering and sale of the
Bonds. The Company will indemnify, hold harmless and defend the Council (and
each director, officer, employee or agent thereof) against
(a) any claim or liability whatsoever arising out of or based
upon any untrue or misleading statement or alleged untrue or misleading
statement of any material fact contained in the Offering Memorandum or
in any of the information furnished by the Company or the Placement
Agent to any prospective purchaser of the Bonds, or the omission or
alleged omission to state in the Offering Memorandum or in any such
information any material fact necessary to make the statements
contained therein not misleading in the light of the circumstances
under which such statements were made, and
(b) any claim or liability arising out of any action taken by
the Council at the request of the Company (or any other Person
authorized to act on behalf of the Company) in connection with the
offering and sale of the Bonds.
37
The Company will pay or reimburse all legal or other expenses
reasonably incurred by the Council (and each director, officer, employee or
agent thereof), or the Trustee (and each director, officer, employee or agent
thereof), as the case may be, in connection with the investigation or defense of
any action or proceeding, whether or not resulting in liability, with respect to
any claim, liability or loss in respect of which indemnity may be sought against
the Company under the provisions of this section.
In the event that any action or proceeding is brought against any
indemnifiable party (whether the Council, or any of the Council's directors,
officers, employees or agents, or the Trustee, or any of the Trustee's
directors, officers, employees, or agents), in respect of which indemnity may be
sought against the Company under the provisions of this section, such
indemnifiable party shall, as a condition of the Company's liability under the
provisions of this section, be obligated to notify promptly the Company in
writing of the commencement of such action or proceeding and shall thereafter
forward to the Company a copy of every summons, complaint, pleading, motion or
other process received with respect to such action or proceeding; provided,
however, that any failure to so notify the Company shall not release the Company
from its obligations under this Section 8.3 unless the Company's ability to
defend any such action or proceeding is materially prejudiced by such failure.
The Company may (and, if so requested by such indemnifiable party, shall) at any
time assume the defense of such indemnifiable party in connection with any such
action or proceeding, and in such case the Company shall pay all expenses of
such defense and shall have full and complete control of the conduct on the part
of such party of any such action or proceeding, including, without limitation,
the right to settle or compromise any claim giving rise to such action or
proceeding upon such terms and conditions as the Company, in its sole
discretion, shall determine and the right to select Counsel for such party.
The Council (or any director, officer, employee or agent thereof) or
the Trustee (or any director, officer, employee or agent thereof) shall have the
right to employ separate counsel in any such action and participate in the
defense thereof, but the fees and expenses of such counsel shall be at the
expense of the Council or the Trustee, as the case may be, unless (i) the
employment of such separate counsel has been specifically authorized by the
Company in writing prior to the employment of such counsel, or (ii) the named
parties to any such action (including any impleaded parties) include both the
Council (or any director, officer, employee or agent thereof) or the Trustee (or
any director, officer, employee or agent thereof) and the Company, and an
indemnified party or parties shall have been advised by counsel or shall have
otherwise determined in good faith that there may be one or more legal defenses
available to it or them which are different from or additional to those
available to the Company and that joint representation may be inappropriate
under professional standards, in which case the Company shall not have the right
to assume the defense of such action on behalf of the Council (or any director,
officer, employee or agent thereof) or the Trustee (or any director, officer,
employee or agent thereof), as the case may be, it being understood, however,
that the Company shall not, in connection with any one such action or separate
but substantially similar or related actions in the same jurisdiction arising
out of the same general allegations or circumstances, be liable for the
reasonable fees and expenses of more than one separate firm of attorneys for the
Council (including all directors, officers, employees and agents thereof), and
one separate firm of attorneys for the Trustee (including all directors,
officers, employees and agents thereof), and any such firm shall be designated
in writing by the Council and/or the Trustee, subject in each case to the
approval of the Company, which approval shall not be unreasonably withheld.
38
Any other provision of this section to the contrary notwithstanding,
the Company shall not be obligated to indemnify any such indemnifiable party for
any liability resulting from the settlement of any action or proceeding if such
settlement was made without the Company's consent (unless such consent was
unreasonably withheld by the Company), irrespective of whether the Company had,
prior to such settlement, exercised its right to assume the defense of such
indemnifiable party in connection with such action or proceeding. The Company
agrees that it will not unreasonably withhold its consent with respect to any
proposed settlement of any such action or proceeding.
Nothing contained in this section shall be construed to indemnify the
Council, or any of the Council's directors, officers, employees or agents,
against, or to release any of such parties from liability for, any claim,
liability or loss that may result from willful misconduct or gross negligence on
the part of such parties, nor shall anything contained in this section be
construed to indemnify the Trustee against, or to release the Trustee, or any of
the Trustee's directors, officers, employees or agents from liability for, any
claim, liability or loss that may result from bad faith or gross negligence on
the part of such parties.
Anything to the contrary in this Lease Agreement notwithstanding, the
covenants of the Company contained in this section shall, with respect to any
claim, liability or loss for which the Company is obligated to provide
indemnity, remain in full force and effect after the termination of the Lease
until (i) any cause of action brought in respect of such claim, liability or
loss shall be barred by the applicable statute of limitation or (ii) the payment
in full or the satisfaction of such claim, liability or loss, including all
reasonable expenses incurred by the indemnifiable party or parties in defending
against such claim, liability or loss; provided, however, that in the event any
action or proceeding arguably barred by the applicable statute of limitation is
brought against any indemnifiable party hereunder, the Company shall be
obligated to defend such indemnifiable party with respect to such action or
proceeding, all to the end that the bar of the statute of limitation may be
asserted by the Company against the party bringing such action or proceeding but
may not be asserted by the Company against the indemnifiable party in order to
avoid performing any of its obligations under this section.
Section 8.4 Inspection of the Project. So long as any of the Indenture
Indebtedness is outstanding, the Company will permit the Council and the Trustee
and their duly authorized representatives at all reasonable times to examine and
inspect the Project or any part thereof. So long as no Event of Default shall
have occurred and be continuing, the rights of access hereby reserved to the
Council and the Trustee may be exercised only after their authorized
representatives shall have executed such release of liability and secrecy
agreements as the Company then regularly requires to be executed by independent
contractors or other persons as a condition of permitting such contractors or
other persons access to manufacturing plants and other comparable facilities of
the Company.
39
Section 8.5 Agreement to Maintain Corporate Existence. So long as any
of the Indenture Indebtedness shall be outstanding and unpaid, the Company will
maintain its corporate existence, will not dissolve or sell, lease, transfer or
otherwise dispose of all or substantially all its assets (either in a single
transaction or in a series of related transactions), and will not consolidate
with or merger into another corporation or permit one or more other corporations
to consolidate with or merge into it; provided that it may, without violating
the agreements contained in this section, consolidate with or merge into another
corporation, permit one or more other corporations to consolidate with or merge
into it, or sell, lease, transfer or otherwise dispose of all or substantially
all its assets to another corporation, but if and only if the following
conditions are met:
(a) the corporation surviving or resulting from such
consolidation or merger (if it be one other than the Company) or the
corporation to which such sale, lease, transfer or other disposition
shall be made, as the case may be (the "Successor Corporation"), (i)
expressly assumes in writing all the obligations of the Company
contained in the Lease, with the same effect as if the Successor
Corporation had been named herein as a party hereto in lieu of the
original Company, (ii) furnishes to the Council and the Trustee,
promptly following such consolidation or merger or such sale, lease,
transfer or other disposition, appropriately certified or fully
executed copies of the writing by which the Successor Corporation so
assumes such obligations and (iii) furnishes to the Council and the
Trustee the opinions of one or more Counsel (who, although selected by
the Company, shall be reasonably satisfactory to the Trustee) which,
taken together, state in substance that the Successor Corporation is a
duly organized and existing corporation and has by such writing duly
and validly assumed, and is bound by, all the obligations of the
Company contained in the Lease;
(b) at the time of such consolidation or merger or such sale,
lease, transfer or other disposition and immediately upon giving effect
thereto, the Successor Corporation shall be a solvent corporation;
(c) immediately after giving effect to such merger or
consolidation or such sale, lease, transfer or other disposition, no
event which constitutes an Event of Default, or which would become an
Event of Default with the passage of time or the giving of notice or
both, shall have occurred and be continuing; and
(d) there shall have been delivered to the Council and to the
Trustee a certificate signed by the Chairman of the Board, the
President or any Vice President of the Company or the Successor
Corporation, as the case may be, and stating that such merger,
consolidation, sale, lease, transfer or other disposition complies with
the provisions of this section and that all conditions precedent herein
provided for relating to such transaction have been complied with.
40
Upon any merger or consolidation or any sale, lease, transfer or other
disposition complying with the provisions of this section, the Successor
Corporation shall succeed to, and be substituted for, the Company for all
purposes under the Lease with the same effect as if the Successor Corporation
had been named as the Company herein. If, after a sale or transfer by the
Company of all or substantially all its assets to another corporation under the
circumstances described in the preceding provisions of this section, the Company
does not thereafter dissolve, it shall not have any further rights or
obligations hereunder.
Section 8.6 Qualification in Alabama. So long as the Lease shall be in
effect, the Company will continuously remain qualified to do business in the
State of Alabama. If, in accordance with the permissive provisions of Section
8.5 hereof, the Company should merge into a corporation not organized and
existing under the laws of the State of Alabama, should consolidate with one or
more corporations under circumstances wherein the consolidated corporation is
not a corporation organized and existing under the laws of the State of Alabama
or should transfer all or substantially all its assets to a corporation not
organized under the laws of the State of Alabama, it will cause the corporation
into which it merged, the corporation resulting from such consolidation or the
corporation to which all or substantially all its assets were transferred, as
the case may be, to qualify to do business in the State of Alabama and to remain
so qualified at all times while the Lease shall be in effect.
Section 8.7 Further Assurances. The Company will, at its own cost and
expense, take all actions that may at the time and from time to time be
necessary to perfect, preserve, protect and secure the interests of the Council
and the Trustee, or either, in and to the Project and the revenues therefrom
pledged and assigned in the Indenture, including, without limitation, the filing
of all financing and continuation statements that may at the time be required
under the Alabama Uniform Commercial Code.
Section 8.8 Protection of Security. The Company will use its best
efforts to cause to be filed or recorded, or re-filed or re-recorded, any
instruments (including, without limitation, Uniform Commercial Code financing
statements) that are at the time necessary to preserve or protect any interest
of the Council or the Trustee in the Trust Estate. The Company will cause to be
delivered to the Trustee, no less frequently than once every five years, an
opinion of Counsel stating either that all appropriate actions to so preserve
and protect the Trust Estate have been taken or that no such action is
necessary.
41
ARTICLE IX
CERTAIN PROVISIONS RELATING TO
THE PROJECT AND THE BONDS
Section 9.1 Provisions Relating to Assignment and Subleasing by
Company. The Company may assign the Lease and the leasehold interest created
thereby, or sublease the Project, in whole or in part, without the necessity of
obtaining the consent of the Council or the Trustee; provided, however, that no
assignee of the Lease or sublessee of the Project or any part thereof or anyone
claiming by, through or under any such assignment or sublease shall acquire by
virtue thereof any greater rights in the Project than the Company then has under
the Lease, nor shall any such assignment (except an assignment resulting from or
incident to a consolidation, merger or transfer under the conditions specified
in and meeting the requirements of Section 8.4 hereof) or subleasing or any
dealings or transactions between the Council or the Trustee and any sublessee or
assignee in any way relieve the Company from primary liability for any of its
obligations hereunder. Thus, in the event of any such assignment or subleasing,
the Company shall, unless such assignment results from or is incident to a
consolidation, merger or transfer under the conditions specified in and meeting
the requirements of Section 8.4 hereof, continue to remain primarily liable for
payment of the rentals herein provided to be paid by it and for performance and
observance of the other agreements and covenants on its part herein provided to
be performed and observed by it. Anything contained herein to the contrary
notwithstanding, the Company may mortgage and assign to the Bank, under the
terms and provisions of the Bank Mortgage, all of the Company's leasehold estate
and all other rights, title and interest of the Company under and pursuant to
this Lease, together with all the rights, privileges and options set forth
herein (including, but not limited to, the options set forth in Article XI
hereof).
Section 9.2 References to Bonds Ineffective after Indenture
Indebtedness Paid. Whenever (i) the entire Indenture Indebtedness shall have
been paid and the Indenture shall have been cancelled, satisfied and discharged
in accordance with the provisions of Section 14.1 thereof and (ii) the Letter of
Credit shall have been terminated and all amounts drawn thereunder, together
with the interest (if any) accrued thereon under the terms of the Reimbursement
Agreement, shall have been reimbursed to the Bank, then and in that case all
references in the Lease to the Bonds and the Trustee and the Bank shall be
ineffective and neither the Trustee nor the Bank nor the holders of any of the
Bonds shall thereafter have any rights hereunder, saving and excepting any that
shall have theretofore vested. For purposes of the Lease, any of the Bonds shall
be deemed fully paid if there exists, with respect thereto, the applicable
conditions specified in Section 14.1 of the Indenture.
If, prior to the end of the Lease Term, the Indenture Indebtedness is
fully paid, the Letter of Credit is terminated and all amounts owed to the Bank
under the Reimbursement Agreement are paid in full, then the Company shall be
entitled to use of the Project for the remainder of the Lease Term without the
payment of any further Basic Rent and Additional Rent (other than amounts
payable to the Council) but otherwise on all the same terms and conditions
hereof.
42
Section 9.3 Disposition of Trust Fund Moneys after Full Payment of
Indenture Indebtedness. The Council hereby assigns to the Company all surplus
moneys (if any) that may remain in the Construction Fund, the Bond Fund, the
Bond Purchase Fund or the Redemption Fund or that may otherwise be held by the
Trustee after the Indenture Indebtedness and all amounts owed to the Bank under
the Reimbursement Agreement have been fully paid, such assignment to be subject
to the condition that the Lease shall not have been terminated prior to full
payment of the Indenture Indebtedness and such other amounts as a result of the
occurrence of an Event of Default. The Council will provide in the Indenture for
such surplus moneys to be paid to the Company in accordance with such
assignment. It is understood and agreed that surplus moneys remaining in the
Bond Fund or otherwise held by the Trustee shall not include (i) any amounts so
held for payment of matured but unpaid Bonds, Bonds called for redemption but
not yet redeemed and matured but unpaid interest and (ii) any amounts held
therein which are referable to unmatured Bonds if such Bonds are considered
fully paid pursuant to the provisions of Section 14.1 of the Indenture by reason
of the fact that such amounts are so held by the Trustee. The provisions of this
section shall survive the expiration or prior termination of the Lease.
Section 9.4 Assignment of Lease by Council; Amendment of Lease. It is
understood and agreed that the Council will assign its interest (other than its
right to require the Company to pay certain expenses as provided in Sections 5.2
and 10.4 hereof, the indemnification rights contained in Section 8.2 hereof and
certain other rights which are herein expressly provided to be exercised by the
Council) in the Lease and pledge any moneys receivable hereunder to the Trustee
as security for payment of the principal of and the interest and premium (if
any) on the Bonds. It is further understood and agreed that in the Indenture the
Council will obligate itself to follow the instructions of the Bank or the
Trustee or the holders of the Bonds or a certain percentage of the latter in the
election or pursuit of any remedies herein vested in it, as in the case may be
applicable. Upon the assignment and pledge to the Trustee of the Council's
interest in the Lease, the Trustee shall have all rights and remedies herein
accorded the Council (other than the aforesaid rights reserved to the Council),
and any reference herein to the Council shall be deemed, with the necessary
changes in detail, to include the Trustee; and the Trustee and the holders of
the Bonds shall be deemed to be third party beneficiaries of the covenants and
agreements on the part of the Company contained in the Lease and shall, to the
extent provided in the Indenture, be entitled to enforce performance and
observance of the agreements and covenants on the part of the Company contained
in the Lease to the same extent as if they were parties hereto. Subsequent to
the issuance of the Bonds and prior to the payment of the Indenture Indebtedness
in full, the Council and the Company shall have no power to modify, alter, amend
or (except as specifically authorized herein) terminate the Lease without the
prior written consent of the Trustee and then only as provided in the Indenture.
The Council will not, so long as no Event of Default shall have occurred and be
continuing, amend the Indenture or any indenture supplemental thereto without
the prior written consent of the Company.
43
Without the prior written request or consent of the Company, the
Council will not, so long as no Event of Default shall have occurred and be
continuing, hereafter issue any Bonds or other securities (including refunding
securities), other than the Bonds and the Authority Bonds, that are payable out
of or secured by a pledge of the revenues and receipts derived by the Council
from the leasing or sale of the Project, nor, without such consent, will the
Council, so long as no Event of Default shall have occurred and be continuing,
hereafter place any mortgage or other encumbrance (other than the Bank Mortgage)
on the Project or any part thereof.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default Defined. The following shall be "Events
of Default" under the Lease, and the term "Event of Default" shall mean,
whenever it is used in the Lease, any one or more of the following events:
(a) failure by the Company to pay any installment of Basic
Rent, or to make any other payment required under the terms hereof
which, if not paid, would cause a default in the payment of any
principal of or interest or premium on the Bonds, on the date that such
installment or such payment shall become due and payable by the terms
of the Lease;
(b) failure by the Company to pay any amount due the Trustee
under Section 9.5 of the Indenture for its reasonable fees, charges and
disbursements within thirty (30) days after written demand for such
payment by the Trustee, which demand shall not be made earlier than the
date on which such amount is due and payable;
(c) failure by the Company to perform or observe any
agreement, covenant or condition required by the Lease to be performed
or observed by it [other than the agreements and covenants referred to
in the preceding clauses (a) and (b) of this section], which failure
shall have continued for a period of forty-five (45) days after written
notice specifying, in reasonable detail, the nature of such failure and
requiring the Company to perform or observe the agreement, covenant or
condition with respect to which it is delinquent shall have been given
to the Company by the Council or the Trustee, unless (i) the Council
and the Trustee shall agree in writing to an extension of such period
prior to its expiration, or (ii) during such forty-five (45) day period
or any extension thereof, the Company has commenced and is diligently
pursuing appropriate corrective action, or (iii) the Company is by
reason of force majeure at the time prevented from performing or
observing the agreement, covenant or condition with respect to which it
is delinquent;
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(d) any warranty, representation or other statement by or on
behalf of the Company contained in the Lease, or in any other document
furnished by the Company in connection with the issuance of the Letter
of Credit or the issuance and sale of any of the Bonds, being false or
misleading in any material respect at the time made, but only if the
inaccuracy of such warranty, representation or other statement is not
remedied in a manner satisfactory to the Council, the Trustee and the
Bank within five Business Days after the Company first receives notice
thereof; provided that the Council and the Trustee may, with the Bank's
consent, grant to the Company an extension of said period of five
Business Days if during such period the Company has commenced and is
diligently pursuing appropriate corrective action;
(e) the receipt by the Trustee of written notice from the Bank
(i) stating that an Event of Default has occurred and is continuing
under the terms of the Reimbursement Agreement (as the term "Event of
Default" is defined and used in said agreement) and (ii) directing that
the Bonds be declared due and payable pursuant to Section 10.2 of the
Indenture;
(f) institution by the Company of proceedings to be
adjudicated a bankrupt or insolvent, or consent by the Company to the
filing of a bankruptcy or insolvency proceeding against it, or the
filing by the Company of a petition or answer or consent seeking relief
under the United States Bankruptcy Code, as now constituted or as
amended, or any other applicable federal or state bankruptcy or other
similar law, or consent by the Company to the institution of
proceedings thereunder or to the filing of any such petition, or
consent by the Company to the appointment of, or the taking of
possession of any of its property by, a receiver, liquidator, trustee,
custodian or assignee in bankruptcy or insolvency for the Company or
for all or a major part of its property, or an assignment by the
Company for the benefit of its creditors, or a written admission by the
Company of its inability to pay its debts generally as they become due;
(g) the entry of a decree or order by a court of competent
jurisdiction for relief in respect of the Company or adjudging the
Company to be a bankrupt or insolvent or approving as properly filed a
petition seeking the arrangement, adjustment or composition of the
obligations of the Company under the United States Bankruptcy Code, as
now constituted or as amended, or any other applicable federal or state
bankruptcy or other similar law, which decree or order shall have
continued undischarged or unstayed for a period of sixty (60) days, or
the entry of a decree or order of a court of competent jurisdiction for
the appointment of a receiver, liquidator, trustee, custodian or
assignee in bankruptcy or insolvency for the Company or for all or a
major part of its property, or for the winding up or liquidation of its
affairs, which decree or order shall have remained in force
undischarged or unstayed for a period of sixty (60) days; or
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(h) the dissolution or liquidation of the Company under
circumstances other than those permitted by the provisions of Section
8.5 hereof in the case of the merger of the Company into another
corporation, the consolidation of the Company with another corporation
or the dissolution of the Company following a transfer of all or
substantially all its assets to another legal entity.
The term "force majeure" as used herein means acts of God or the public enemy,
strikes, lockouts, work slowdowns or stoppages or other labor disputes,
insurrections, riots or other civil disturbances, orders of the government of
the United States of America or of any state of the United States of America or
of any of the departments, agencies, political subdivisions or officials of the
United States of America or of any state thereof, or orders of any other civil
or military authority, or partial or entire failure of public utilities, or any
other condition or event beyond the reasonable control of the Company. The
Company will, to the extent that it may lawfully do so, use its best efforts to
remedy, alleviate or circumvent any cause or causes preventing it from
performing its agreements and covenants hereunder; provided, however, that the
settlement of strikes, lockouts and other labor disputes shall be entirely
within the discretion of the Company, and the Company shall not be required to
settle strikes, lockouts and other labor disputes by acceding to the demands of
the opposing party or parties when such course is in its judgment against its
best interests.
Section 10.2 Remedies on Default. The Council acknowledges that this
Lease Agreement constitutes part of a financing transaction with respect to the
Project Development Work and that, as a result of the options in favor of the
Company contained in Article XI hereof, the full economic value of the Project
will accrue to the Company in the event that the Bonds are paid in full. In view
of the character of this Lease Agreement as part of a financing transaction with
respect to the Project, it is the intention of the parties hereto that, upon the
occurrence and during the continuation of an Event of Default, the Company shall
have rights as herein described with respect to the Project which, in the
absence of express agreements to the contrary herein contained, would not be
accorded the Company under the general laws now applicable to the relationship
between the Council, as owner and lessor of the Project, and the Company, as
lessee of the Project. In order that such rights of the Company may be preserved
and protected from the adverse effect of any present or future law applicable
thereto, the Council hereby expressly waives and relinquishes, to the extent it
may lawfully do so, all rights and remedies with respect to the termination of
this Lease Agreement and the repossession and disposition of the Project which
are not consistent with the express provisions hereof, even though such rights
and remedies are generally available to lessors as a matter of law.
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Whenever any Event of Default shall have occurred and be continuing,
the Council and the Trustee, or the Trustee on behalf of the Council, may take
any one or more of the following remedial actions:
(a) take possession of the Project, exclude the Company from
possession thereof and rent the same for the account of the Company,
holding the Company liable for the balance of all rent and other
amounts due under the Lease;
(b) terminate the Lease, take possession of the Project,
exclude the Company from possession thereof and lease the same for the
account of the Council and the Trustee, holding the Company liable for
all rent and other amounts due under the Lease until the date such
other lease is made for the account of the Council and the Trustee;
(c) declare immediately due and payable Basic Rent in an
amount equal to the principal amount of all outstanding Bonds plus
interest accrued on such Bonds to the date of such declaration,
whereupon such Basic Rent shall become immediately due and payable, but
only if, concurrently with such declaration, the principal of and
accrued interest on the Bonds are also declared due and payable
pursuant to subsection (a) of Section 10.2 of the Indenture;
(d) have access to, and inspect, examine and make copies of,
the books, records and accounts of the Company respecting the Project,
but if and only if any of the Bonds are then outstanding; and
(e) take whatever legal proceedings may appear necessary or
desirable to collect the rent then due, whether by declaration or
otherwise, or to enforce any obligation, covenant or agreement of the
Company under the Lease or any obligation of the Company imposed by any
applicable law;
provided, however, that neither the Council nor the Trustee, nor the Trustee on
behalf of the Council, shall take any remedial action described in either of
subparagraphs (a) and (b) of this Section 10.2 unless the Event of Default is
described in subparagraph (a) of of Section 10.1.
Section 10.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Council or the Trustee 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 the Lease or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any Event of Default shall impair any
such right or power or shall be construed to be a waiver thereof but any such
right or power may be exercised from time to time and as often as may be deemed
expedient. In order to entitle the Council or the Trustee to exercise any remedy
reserved to it in this article, it shall not be necessary to give any notice,
other than such notice as is herein expressly required.
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Section 10.4 Agreement to Pay Attorneys' Fees. In the event that, as a
result of an Event of Default or a threatened Event of Default by the Company,
the Council or the Trustee should employ attorneys at law or incur other
expenses in or about the collection of rent or the enforcement of any other
obligation, covenant, agreement, term or condition of the Lease, the Company
will, if the Council or the Trustee is successful in such efforts or if a final
judgment for either is rendered by a court of competent jurisdiction, pay to the
Council or to the Trustee or both, as the case may be, reasonable attorneys'
fees and other reasonable expenses so incurred by the Council and the Trustee.
Section 10.5 No Additional Waiver Implied by One Waiver. In the event
any agreement contained in the 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. Further, neither the receipt nor the acceptance of any rent hereunder
by the Council, or by the Trustee on its behalf, shall be deemed to be a waiver
of any breach of any covenant, condition or obligation herein contained or a
waiver of any Event of Default even though at the time of such receipt or
acceptance there has been a breach of one or more covenants, conditions or
obligations on the part of the Company herein contained or an Event of Default
(or both) and the Council or the Trustee (or both) have knowledge thereof.
Section 10.6 Effect of Intercreditor Agreement. Notwithstanding
anything to the contrary contained herein or in the Indenture, so long as any of
the Authority Bonds remain outstanding and unpaid, all rights, remedies and
powers granted to the Council or the Trustee pursuant to this Lease Agreement
(including, without limitation, those so granted in this Article X) or the
Indenture shall be governed by, and shall be exercised in accordance with, the
provisions of the Intercreditor Agreement.
ARTICLE XI
OPTIONS
Section 11.1 Options to Terminate the Lease During the Lease Term. The
Company shall have the right, exercisable at its option, to cancel or terminate
the Lease during the Lease Term upon compliance with the conditions specified in
the succeeding provisions of this section:
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(a) At any time prior to full payment of the entire Indenture
Indebtedness, the Company may cancel or terminate the Lease by (i)
giving the Council and the Trustee written notice of such termination
and specifying in such notice the date on which such termination is to
be effective and (ii) paying to the Trustee for the account of the
Council, on or before the effective date of such termination, an amount
which, when added to the total of the amounts then held in the
Construction Fund, the Bond Fund (exclusive of any amount held therein
for payment of matured but unpaid Bonds, Bonds called for redemption
but not yet redeemed and matured but unpaid interest) and the
Redemption Fund, will be sufficient to pay, redeem and retire all the
outstanding Bonds (or, in the case of the Bonds prior to the
termination of the Letter of Credit, to reimburse the Bank for moneys
drawn under the Letter of Credit to effect such payment, redemption and
retirement) on the earliest practicable date next succeeding the
effective date of such termination on which under their terms and the
terms of the Indenture they may be paid or redeemed, including, without
limitation, principal, premium (if any), all interest to mature until
and on such payment or redemption date, the expenses of redemption and
all other Indenture Indebtedness then owed and that will accrue until
the payment, redemption and retirement of all the outstanding Bonds.
(b) At any time after the entire Indenture Indebtedness has
been fully paid, the Letter of Credit has been terminated and all
amounts owed to the Bank under the Reimbursement Agreement have been
paid in full, the Company may cancel or terminate the Lease by giving
the Council written notice of such termination not less than ten (10)
days prior to the date on which such termination is to be effective.
Any cancellation or termination of the Lease as aforesaid notwithstanding, any
obligations or liabilities of the Company hereunder, actual or contingent, which
have arisen on or before the effective date of such cancellation or termination
shall remain in full force and effect.
Section 11.2 Option to Purchase Casualties. While any of the Indenture
Indebtedness is outstanding and unpaid, the Company shall have the right and
option, hereby granted by the Council, to purchase the Project if
(a) any part of the Project is damaged or destroyed, by fire
or other casualty, to such extent that, in the opinion of the Company
expressed in a certified resolution of the Board of Directors of the
Company filed with the Council and the Trustee, the restoration or
repair of the property damaged or destroyed to the condition thereof
immediately preceding such damage or destruction would not be
economically practicable or desirable, or
(b) under the exercise of the power of Eminent Domain, (i)
title to all or substantially all the Project is taken, or (ii) the
temporary use of all or part of the Project, or title to part of the
Project, is taken to such extent that, in the opinion of the Company
expressed in a certified resolution of the Board of Directors of the
Company filed with the Council and the Trustee, the Company will
thereby be prevented, or is likely to be thereby prevented, from making
normal use of the Project, or
49
(c) as a result of (i) any changes in the Constitution of the
State of Alabama or the Constitution of the United States of America,
(ii) any legislative or administrative action (whether state or
federal) or (iii) any final decree, judgment or order of any court or
administrative body (whether state or federal) entered after the
contest thereof by the Company in good faith, the Lease becomes void or
unenforceable or impossible of performance in accordance with the
intent and purposes of the parties as expressed herein or unreasonable
burdens or excessive liabilities are imposed on the Council or the
Company, including (without limiting the generality of the foregoing)
any changes in federal or state tax laws that will render the operation
of the Project significantly less economically advantageous to the
Company, or
(d) the use and occupancy of the Project by the Company is
legally curtailed for any reason other than circumstances or conditions
described in the preceding clauses (b) and (c), or
(e) as a result of any change in the economic viability of the
Project, the continued operation of the Project, in the opinion of the
Company expressed in a certified resolution of the Board of Directors
of the Company filed with the Council and the Trustee, would not be
economic for the Company's purposes.
To exercise such option, the Company
(1) shall, within sixty (60) days following the event
authorizing the exercise of such option, give to the Council and the
Trustee written notice, signed by an Authorized Company Representative,
which shall contain a description of such event and shall state the
reason why it authorizes the exercise of such option,
(2) shall specify in such notice the date of purchase, which
(subject to the provisions of the last paragraph of this Section 11.2)
shall be not less than forty-five (45) nor more than ninety (90) days
after the date such notice is mailed or otherwise delivered,
(3) shall direct the Trustee in such notice to call for
redemption all the outstanding Bonds on the Business Day next
succeeding the date of purchase specified by the Company in such
notice,
(4) in the case of an authorizing event described in any of
the preceding clauses (a), (b), (d) or (e), shall certify in such
notice that the Company has discontinued, or will discontinue at the
earliest practicable date, its operation of the Project, and
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(5) shall on the date of purchase pay to the Trustee in
immediately available funds (for the account of the Council), as and
for the purchase price of the Project, an amount which, when added to
the total of the amounts then held in the Construction Fund, the Bond
Fund (exclusive of any amount held therein for payment of matured but
unpaid Bonds, Bonds called for redemption but not yet redeemed and
matured but unpaid interest) and the Redemption Fund, plus the amount
of any Net Condemnation Award then held by the Trustee and referable to
any condemnation authorizing the exercise of such option, will be
sufficient to pay, redeem and retire all the outstanding Bonds (or, in
the case of the Bonds prior to the termination of the Letter of Credit,
to reimburse the Bank for moneys drawn under the Letter of Credit to
effect such payment, redemption and retirement) on the Business Day
next succeeding the date of purchase, including, without limitation,
principal, premium (if any), all interest to mature until and on such
payment or redemption date, expenses of redemption and all other
Indenture Indebtedness; provided, however, that if on the date of
purchase the entire Indenture Indebtedness has been paid in full, the
Company shall not be required to pay any such amount in order to
entitle it to exercise such option, in which event (any provision
herein to the contrary notwithstanding) any Net Condemnation Award
referable to any condemnation authorizing the exercise of such option
shall be paid to the Company simultaneously with or promptly after the
exercise of such option.
Upon receipt of the amount required by this Section 11.2 to be paid by the
Company as the purchase price of the Project (if payment of any such amount is
required), and if at such time the Company is not in default in payment of the
rent or any other amounts due hereunder, the Council will, by deed or other
appropriate instrument complying with the provisions of Section 11.4 hereof,
transfer and convey the Project (or such portion thereof which may be none as is
then in existence and is owned by the Council) in its then condition, whatever
that may be, to the Company.
In the event that the option granted by this Section 11.2 is exercised
by the Company as a result of the taking of all or substantially all the Project
under the exercise of the power of Eminent Domain, the date of purchase of the
Project pursuant to such option shall not, irrespective of the date specified
therefor pursuant to clause (2) of the first paragraph of this Section 11.2, be
later than the date on which the Lease terminates in accordance with the
provisions of Section 7.2(a) hereof, which date of termination is the
forty-fifth (45th) day after the receipt by the Trustee of the final installment
of the entire condemnation award in respect of such taking.
Section 11.3 Option to Purchase. If the Company pays all rent and other
amounts due hereunder, it shall have the right and option, hereby granted by the
Council, to purchase the Project from the Council at any time during the Lease
Term after the payment in full of the Indenture Indebtedness, the termination of
the Letter of Credit and the reimbursement to the Bank of all amounts drawn
under the Letter of Credit, together with the interest (if any) accrued thereon
under the terms of the Reimbursement Agreement, at and for a purchase price
equal to the sum of $100. To exercise any such purchase option, the Company
shall notify the Council in writing not less than fifteen (15) days prior to the
date on which it proposes to effect such purchase and, on the date of such
purchase, shall pay the aforesaid purchase price to the Council in cash or
bankable funds, whereupon the Council will, by deed or other instrument
complying with the provisions of Section 11.4 hereof, transfer and convey the
Project (in its then condition, whatever that may be) to the Company. If at the
end of the Lease Term no Event of Default shall have occurred and be continuing,
the Company shall be deemed to have exercised such purchase option unless it
notifies the Council in writing to the contrary at least fifteen (15) days
before the end of the Lease Term, and, in the event of such automatic exercise
by the Company of its option to purchase the Project, the date of purchase shall
be the last day of the Lease Term or such other date within one hundred eighty
(180) days thereafter as shall be designated by the Company. Nothing herein
contained shall be construed to give the Company any right to any rebate to or
refund of any rent paid by it hereunder prior to the exercise by it of the
purchase option hereinabove granted, even though such rent may have been wholly
or partially prepaid.
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Section 11.4 Options In General. Each of the options herein granted to
the Company may be exercised by it even though an Event of Default shall have
occurred and be continuing, it being understood and agreed, however, that all
other applicable conditions specified herein to the exercise of such option
(including payment of any amounts of money herein required to be paid by the
Company) must be met.
In the event of the exercise by the Company of either of the options to
purchase the Project or any part thereof granted in Sections 11.2 and 11.3
hereof, the Council will convey to the Company, after compliance by the Company
with the conditions to purchase specified in the respectively applicable
sections hereof, the property with respect to which such option was exercised by
statutory warranty deed, xxxx of sale (in the case of personal property) or
other appropriate instrument, subject only to Permitted Encumbrances, such
liens, encumbrances and exceptions to which title to such property was subject
when this Lease Agreement was delivered or such property was acquired by the
Council (whichever occurred last), those to the creation or suffering of which
the Company consented and those resulting from the failure of the Company to
perform or observe any of the agreements or covenants on its part herein
contained.
In case that, at the time of the exercise by the Company of either of
the options to purchase the Project granted in Sections 11.2 and 11.3 hereof,
there shall not have been collected by the Council, the Trustee or the Company
the entire condemnation award referable to any condemnation with respect to the
Project which may have theretofore occurred, then in such case all Net
Condemnation Awards thereafter collected and referable to such condemnation
shall be applied to the payment of any obligations then owed to the Bank under
the Reimbursement Agreement, and any such moneys remaining after the payment of
all such obligations then owed to the Bank shall be paid to the Company. The
Council will take all actions necessary to cause the amount of any such awards
to be paid to the Company or the Bank, as the case may be. The provisions of
this paragraph shall survive the expiration of the term of the Lease or any
prior termination of the Lease unless at the time of such expiration or
termination the Company is in default in the payment of any amounts of money
herein required to be paid by it, in which event any moneys described in this
paragraph would be applied first to cure such default, with any remaining
balance applied in accordance with the preceding provisions of this paragraph.
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ARTICLE XII
MISCELLANEOUS
Section 12.1 Covenant of Quiet Enjoyment. Surrender. So long as the
Company performs and observes all the covenants and agreements on its part
herein contained, it shall peaceably and quietly have, hold and enjoy the
Project during the Lease Term subject to all the terms and provisions hereof. At
the end of the Lease Term, or upon any prior termination of the Lease, the
Company will surrender to the Council possession of all property then subject to
the demise of the Lease (unless it is simultaneously purchasing such property
from the Council) in its then condition, whatever that may be.
Section 12.2 Retention of Title to Project by Council. Granting of
Easements. Without the prior written consent of the Company, the Council will
not itself, so long as no Event of Default shall have occurred and be
continuing, (i) sell, convey or otherwise dispose of all or any part of the
Project (except as provided in Section 9.4 of the Indenture or to the Company as
provided in Article XI hereof), (ii) mortgage or otherwise encumber the Project
or any part thereof (except as provided in the Bank Mortgage), or (iii) dissolve
or do anything that will result in the termination of its corporate existence
(except as provided in Section 9.4 of the Indenture). The Council will, however,
grant such utility, access and other similar easements, permits and
rights-of-way over, across or under the Project Site as shall be requested in
writing by the Company, provided that in connection with the grant of each such
easement, permit or right-of-way the Company furnishes to the Council and the
Trustee a certificate signed by an Authorized Company Representative stating
that such easement, permit or right-of-way is, or will be, useful or necessary
in the operation of the Project and will not materially interfere with or impair
the use of the Project for the purpose for which it was acquired or is held by
the Council. The Company will pay all reasonable expenses incurred by the
Council in connection with the granting of all such easements, permits and
rights-of-way.
Section 12.3 This Lease a Net Lease. The Company recognizes and
understands that it is the intention hereof that the lease herein made shall be
a net lease and that until the Bonds are fully paid all Basic Rent shall be
available for payment of the principal of and the interest and premium (if any)
on the Bonds. The Lease shall be construed to effectuate such intent.
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Section 12.4 Statement of Intention Regarding Certain Tax Matters. The
Council and the Company acknowledge and agree that it is their mutual intention
that the Company, for federal and state income tax purposes, will be entitled to
all deductions and credits with respect to the Project (including, but not
limited to, depreciation and investment credits) and that for such purposes the
Lease will be deemed to be a financing of the Project.
Section 12.5 Notices. All notices, demands, requests and other
communications hereunder shall be deemed sufficient and properly given if in
writing and delivered in person to the following addresses or received by
certified or registered mail, postage prepaid with return receipt requested, at
such addresses:
(a) If to the Council:
Xxxxxxx County Economic Development Xxxxxxx
Xxxx Xxxxxx Xxx 000
Xxxxxxxx, Xxxxxxx 00000
Attention: Chairman of the Board of Directors
(b) If to the Company:
Central Castings Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Vice President Finance
(c) If to the Trustee:
Chemical Bank
000 Xxxx 00xx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx Xx Xxxxx, Corporate Trust Administration
(d) If to the Bank:
First Fidelity Bank, National Association
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxx, Vice President
Any of the above-mentioned parties may, by like notice, designate any further or
different addresses to which subsequent notices shall be sent. The Company and
the Council will send a copy of each notice that either thereof gives to the
other pursuant to the provisions hereof to the Trustee and the Bank; provided,
however, that the failure of either the Council or the Company to send a copy of
any such notice to the Trustee and the Bank shall not invalidate such notice or
render it ineffective unless notice to the Trustee and the Bank is otherwise
expressly required herein. Any notice hereunder signed on behalf of the
notifying party by a duly authorized attorney at law shall be valid and
effective to the same extent as if signed on behalf of such party by a duly
authorized officer or employee.
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Whenever, under the provisions hereof, any request, consent or approval
of the Council or the Company is required or authorized, such request, consent
or approval shall (unless otherwise expressly provided herein) be signed on
behalf of the Council by an Authorized Council Representative and on behalf of
the Company by an Authorized Company Representative; and each of the parties and
the Trustee are authorized to act and rely upon any such requests, consents or
approvals so signed.
Section 12.6 Certain Prior and Contemporaneous Agreements Cancelled.
The Lease shall completely and fully supersede all other prior or
contemporaneous agreements, both written and oral, between the Council and the
Company relating to the Project Development Work and the leasing of the Project,
all to the end that the Council and the Company shall look to the Lease for
ultimate definition and determination of their respective rights, liabilities
and responsibilities respecting the Project Development Work and the Project.
The Company and the Council acknowledge that they have no outstanding agreement,
commitment or understanding, either express or implied, for the grant to the
Company of any option to purchase the Project or any part thereof or of any
option to renew the term of the Lease, other than those options contained in
Article XI hereof.
Section 12.7 Limited Liability of Council. The Council is entering into
this Lease Agreement pursuant to the authority conferred upon it by the Act. No
provision hereof shall be construed to impose a charge against the general
credit of the Council or any personal or pecuniary liability upon the Council
except with respect to the proper application of the proceeds to be derived from
the sale of the Bonds, moneys made available by the Company to the Council
pursuant to the provisions hereof, and the revenues and receipts to be derived
from any leasing or sale of the Project, including insurance proceeds and
condemnation awards. Further, none of the directors, officers, employees or
agents of the Council shall have any personal or pecuniary liability whatever
hereunder or any liability for the breach by the Council of any of the
agreements on its part herein contained. Nothing contained in this section,
however, shall relieve the Council from the observance and performance of the
several covenants and agreements on its part herein contained or relieve any
director, officer, employee or agent of the Council from performing all duties
of his respective offices that may be necessary to enable the Council to perform
the covenants and agreements on its part herein contained.
Section 12.8 Trustee Actions Requested by Company. The Company hereby
agrees that, in any instance in which the Company requests the Trustee to take
any discretionary, non-ministerial action pursuant to the Indenture, the Trustee
may require, as a condition precedent to the taking of such requested action,
the delivery to the Trustee of an opinion of Counsel stating that the taking of
such requested action by the Trustee is not inconsistent with the provisions of
the Indenture and that all conditions precedent, if any, to the taking of such
action that are specified or contained in the Indenture have been satisfied.
55
The Company further agrees that, in each instance in which moneys are
to be paid, under the provisions of this Lease Agreement or the Indenture, by
the Trustee to the Bank, the Trustee shall make such payments pursuant to
written directions received from the Company.
Section 12.9 Binding Effect. The Lease shall inure to the benefit of,
and shall be binding upon, the Council, the Company and their respective
successors and assigns. To the extent provided herein and in the Indenture, the
Trustee, the holders of the Bonds and the Bank shall be deemed to be third party
beneficiaries hereof, but nothing herein contained shall be deemed to create any
right in, or to be for the benefit of, any other person who is not a party
hereto.
Upon the termination of the Letter of Credit and the payment in full of
all amounts owed to the Bank under the Reimbursement Agreement, all references
herein to the Bank shall be ineffective and the Bank shall thereafter have no
rights hereunder.
Section 12.10 Severability. In the event any provision of the Lease
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof. Without in any way limiting the generality of the foregoing, the Company
specifically acknowledges and agrees that the several purchase options granted
it in Article XI hereof are fully severable from and independent of the other
provisions hereof and that the invalidity or unenforceability of any of such
purchase options shall neither invalidate or render unenforceable any other
provision hereof nor excuse the Company from fully performing and observing any
of the agreements and covenants on its part herein contained.
Section 12.11 Article and Section Captions. The article and section
headings and captions contained herein are included for convenience only and
shall not be considered a part hereof or affect in any manner the construction
or interpretation hereof.
Section 12.12 Governing Law. The Lease shall in all respects be
governed by and construed in accordance with the laws of the State of Alabama.
56
IN WITNESS WHEREOF, the Council and the Company have caused this Lease
Agreement to be executed in their respective corporate names, have caused their
respective corporate seals to be hereunder affixed, and have caused this Lease
Agreement to be attested, all by their duly authorized officers, in ten (10)
counterparts, each of which shall be deemed an original, and the parties hereto
have caused this Lease Agreement to be dated as of November 1, 1995, although
executed and delivered on November 21, 1995.
XXXXXXX COUNTY
ECONOMIC DEVELOPMENT COUNCIL
By: /s/ Xxxxxxx X. Xxxxxxxx
-----------------------------------
Chairman of its Board of Directors
ATTEST:
/s/ Xxxxxx X. Faceton
--------------------------------------
Its Secretary
[ S E A L ]
CENTRAL CASTINGS CORPORATION
By: /s/ Xxxxxx X. Xxxxx
-----------------------------------
Its Vice President
---------------------------------
ATTEST:
/s/ Xxxxxx X. Xxxxxx
--------------------------------------
Its Assistant Secretary
---------------------------------
[ S E A L ]
57
STATE OF ALABAMA )
:
Xxxxxxx COUNTY )
I, the undersigned authority, a Notary Public in and for said county in
said state, hereby certify that Xxxxxxx X. Xxxxxxx, whose name as Chairman of
the Board of Directors of the XXXXXXX COUNTY ECONOMIC DEVELOPMENT COUNCIL, a
public corporation and instrumentality under the laws of the State of Alabama,
is signed to the foregoing instrument and who is known to me, acknowledged
before me on this day that, being informed of the contents of the said
instrument, he, as such officer and with full authority, executed the same
voluntarily for and as the act of said public corporation.
GIVEN under my hand and official seal of office, this 16th day of
November, 1995.
/s/ Xxxxx X. Xxxxxxxx
[ NOTARIAL SEAL ] -----------------------------------------
Notary Public
My Commission Expires: 8-15-98
------------------
STATE OF Pennsylvania )
:
Philadelphia COUNTY )
I, the undersigned authority, a Notary Public in and for said county in
said state, hereby certify that Xxxxxx X. Xxxxx, whose name as Vice President of
CENTRAL CASTINGS CORPORATION, an Alabama corporation, is signed to the foregoing
instrument and who is known to me, acknowledged before me on this day that,
being informed of the contents of the said instrument, he, as such officer and
with full authority, executed the same voluntarily for and as the act of said
corporation.
GIVEN under my hand and official seal of office, this 21st day of
November, 1995.
/s/ Xxxxx X. X'Xxxx
[ NOTARIAL SEAL ] -----------------------------------------
Notary Public
My Commission Expires: 11-28-98
------------------
58
EXHIBIT A
to
LEASE AGREEMENT
between
XXXXXXX COUNTY
ECONOMIC DEVELOPMENT COUNCIL
and
CENTRAL CASTINGS CORPORATION
dated as of November 1, 1995
The Project Site consists of the following described parcel of land:
A certain parcel of land located in the SW 1/4 of the NW 1/4, the W 1/2 of the
SE 1/4 of the NW 1/4, and a portion of the NE 1/4 of the NW 1/4 of Section 23,
Township 15 South, Range 7 East; said parcel being more particularly described
as follows:
Beginning at the Southwest corner of the SW 1/4 of the NW 1/4 of
Section 23, Township 15 South, Range 7 East; thence Northerly along
the West line of said quarter 1347.86 feet; thence Easterly with an
interior angle of 90 degrees 20 minutes 24 seconds to the left along
the North line of said quarter, if extended, 2062.84 feet; thence
Southerly with an interior angle of 88 degrees 53 minutes 58 seconds
to the left 1309.80 feet; thence Westerly with an interior angle of 92
degrees 10 minutes 22 seconds to the left along the South line of said
quarter, if extended, 2046.04 feet to the point of beginning.
ALSO: Beginning at the Southwest corner of the SW 1/4 of the NW 1/4 of
Section 23, Township 15 South, Range 7 East; thence Northerly along
the West line of said quarter 1347.86 feet; thence Easterly with an
interior angle of 90 degrees 20 minutes 24 seconds to the left along
the North line of said quarter, if extended, 1408.46 feet to the
intersection of said North line, if extended with the centerline of a
County Road; said point also being the true point of beginning of the
hereafter described parcel; thence continue Easterly along the
previous course 654.38 feet; thence Northerly with an interior angle
of 91 degrees 06 minutes 02 seconds to the right 399.35 feet to the
centerline of said County Road; thence Southwesterly along said
centerline as follows: with an interior angle of 44 degrees 38 minutes
to the right 91.13 feet; with an interior angle of 169 degrees 58
minutes 20 seconds to the left 146.47 feet; with an interior angle of
169 degrees 37 minutes to the left 90.55 feet; with an interior angle
A-1
of 174 degrees 48 minutes 04 seconds to the left 105.62 feet; with an
interior angle of 176 degrees 24 minutes 34 seconds to the right 90.72
feet; with an interior angle of 174 degrees 13 minutes 22 seconds to
the right 76.63 feet; with an interior angle of 174 degrees 23 minutes
04 seconds to the right 76.44 feet; with an interior angle of 173
degrees 23 minutes 22 seconds to the right 69.32 feet; with an
interior angle of 174 degrees 26 minutes 20 seconds to the right 35.37
feet to the true point of beginning.
Containing a total of 65.16 acres, more or less, less and except any
right-of-way assigned to Alabama Power Company; and less and except
road right-of-way as deeded to Xxxxxxx County, Alabama.
The above parcel of land is located in the County of Xxxxxxx, State of
Alabama.
A-2
EXHIBIT B
to
LEASE AGREEMENT
between
XXXXXXX COUNTY
ECONOMIC DEVELOPMENT COUNCIL
and
CENTRAL CASTINGS CORPORATION
dated as of November 1, 1995
The Project Equipment referred to in the Lease Agreement of which this
Exhibit B constitutes a part initially consists of the following items:
B-1
--------------------------------------------------------------------------------------------------------------------
QUANTITY DESCRIPTION IDENTIFICATION NOTES VALUE IN USE
--------------------------------------------------------------------------------------------------------------------
1 Dissmatic 2013 Serial Number 71.645 1964 $ 150,000
--------------------------------------------------------------------------------------------------------------------
Automatic Molding Machine (1964)
====================================================================================================================
1 Dissmatic 2013 Serial Number 71.604 Doesn't Run $ 5,000
--------------------------------------------------------------------------------------------------------------------
Automatic Molding Machine (1964)
====================================================================================================================
1 42" Wide Conveyor Belt - 16' Long $ 4,500
====================================================================================================================
1 48" Wide Conveyor Belt - 50' in 3 Sections $ 16,750
====================================================================================================================
2 1250 KW 180 KZ Tri-Line Inductotherm $ 175,000
--------------------------------------------------------------------------------------------------------------------
with Power Supplies Serial Number 02-58730
--------------------------------------------------------------------------------------------------------------------
Includes (3) 3.5 Ton Melting Pots Serial Number 03-75375
--------------------------------------------------------------------------------------------------------------------
(2) Spare 3.5 Ton Coils
====================================================================================================================
1 Xxxxxx Rotary Shakeout System Model RS-40 $ 15,400
====================================================================================================================
1 Wheelabator Turnblast Super 28 Serial Number A1235440 $ 25,000
====================================================================================================================
1 Cleveland Tramrail Crane System Serial Number 0-00000-000 $ 11,500
====================================================================================================================
1 Carborundum Dust Collector Serial Number 1-721175-I $ 12,500
====================================================================================================================
1 Wheelabrator Dust Collector 3500 CFM $ 8,000
====================================================================================================================
1 Pagborn Dust Collector 7500 CFM $ 13,500
====================================================================================================================
1 Xxxxxxx 2F Xxxxxx Serial Number E7301001 $ 5,000
====================================================================================================================
1 3 Ton Yale Electric Hoists $ 5,000
====================================================================================================================
1 Overhand Sand Control System $ 18,750
====================================================================================================================
1 Sand Storage Xxxxxx $ 5,000
====================================================================================================================
1 Bradford Lathe Serial Number 5324-124 $ 1,000
====================================================================================================================
1 Automatic Stapler Machine Not in use $ 100
====================================================================================================================
1 Lathern Time Recorder $ 100
====================================================================================================================
1 Electrical System $ 32,500
--------------------------------------------------------------------------------------------------------------------
480V Transformer
--------------------------------------------------------------------------------------------------------------------
240V Transformer
--------------------------------------------------------------------------------------------------------------------
4 KV Disconnect System
====================================================================================================================
3 333 KW Transformers $ 12,000
====================================================================================================================
1 Xxxxxxx Scrubber & Wash Basin Serial Number 38180 $ 1,250
====================================================================================================================
1 Xxxxxx H-13 Analytical Balance Scale Serial Number 610344 $ 375
====================================================================================================================
1 Xxxxxxx M.B. Xxxx Xxxxxx Serial Number 535A-338 $ 750
====================================================================================================================
1 Xxxxx Laboratory Sifter w/Screens $ 875
====================================================================================================================
1 Blue M Muffle Furnace Serial Number HE-1527 $ 250
====================================================================================================================
1 Xxxxxxx 401 Compression Tester Serial Number 30575 $ 1,575
====================================================================================================================
1 2 Ton Xxxxxxx-Xxxxx Cornet Hoist w/bucket $ 8,000
====================================================================================================================
2 Portable Office Buildings $ 500
====================================================================================================================
1 Pattern Heater Enclosure $ 3,750
--------------------------------------------------------------------------------------------------------------------
Complete with Temperature Controls
====================================================================================================================
--------------------------------------------------------------------------------------------------------------------
QUANTITY DESCRIPTION IDENTIFICATION NOTES VALUE IN USE
--------------------------------------------------------------------------------------------------------------------
===================================================================================================================
1 Spare Gear Reducer for 85-B Xxxxxx $ 15,000
====================================================================================================================
1 Xxxxx Automatic Brinell Hardness Tester $ 3,750
====================================================================================================================
1 IBM Computer Model PS2/55SX $ 1,500
====================================================================================================================
1 IBM Typewriter Serial Number 00-0000000 $ 400
====================================================================================================================
1 Sharp SF3700 Copy Machine Serial Number 96611788 $ 5,000
====================================================================================================================
1 Xxxxxx/Xxxxxx Telephone System (6) Stations Serial Number 561346 $ 6,000
====================================================================================================================
1 Ricoh Fax 60 Serial Number 71202773 $ 1,000
====================================================================================================================
3 Office Desks & Chairs $ 15,000
====================================================================================================================
2 Computer Desks $ 800
====================================================================================================================
4 File Cabinets Serial Number 561346 $ 800
====================================================================================================================
Various Tools, Dies and Patterns $ 120,000
====================================================================================================================
$1,199,485
--------------------------------------------------------------------------------------------------------------------
