EXHIBIT 10.18
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LEASE AGREEMENT
between
XXXXX COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY
and
Absorption Corp.
Dated as of September 1, 2004
Relating to
$4,900,000
Xxxxx County Industrial Development Authority
Tax-Exempt Industrial Development Revenue Bonds
(Absorption Corp. Project),
Series 2004
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All right, title and interest of Xxxxx County Industrial Development Authority
(the "Issuer") in this Agreement has been pledged and assigned to Branch Banking
and Trust Company, as Trustee under an Indenture of Trust dated as of September
1, 2004, between the Issuer and the Trustee.
TABLE OF CONTENTS
(This Table of Contents is not a part of the Lease Agreement, it is only for
convenience of reference and is not intended to define, limit or describe the
intent or scope of any provisions of the Lease Agreement.)
ARTICLE I. DEFINITIONS .......................................................2
Section 1.1. Definitions..............................................2
Section 1.2. Use of Words and Phrases.................................2
ARTICLE II. REPRESENTATIONS...................................................2
Section 2.1. Representations and Warranties of the Issuer.............2
Section 2.2. Representations by Lessee................................3
ARTICLE III. THE PROJECT......................................................4
Section 3.1. Lease of the Project.....................................4
Section 3.2. Agreement to Acquire, Construct and Equip Project........6
Section 3.3. Agreement to Issue Bonds.................................6
Section 3.4. Establishment of Completion Date and Disposition of
Balance in Project Fund..................................6
Section 3.5. Lessee Required to Complete Project......................6
Section 3.6. Limitation of Issuer's Liability.........................6
Section 3.7. Disclaimer of Warranties.................................7
Section 3.8. Taxes, Other Governmental Charges; Utilities.............7
Section 3.9. Insurance................................................8
Section 3.10. Maintenance of the Project..............................8
ARTICLE IV. PAYMENT PROVISIONS................................................8
Section 4.1. Repayment of Bonds and Payment of Other Amounts
Payable..................................................8
Section 4.2. No Defense or Set-off-Unconditional Obligation...........9
Section 4.3. Assignment of Issuer's Rights............................9
Section 4.4. Letter of Credit........................................10
ARTICLE V. DAMAGE, DESTRUCTION AND CONDEMNATION..............................10
Section 5.1. Parties to Give Notice..................................10
Section 5.2. Damage and Destruction..................................10
Section 5.3. Condemnation and Loss of Title..........................10
ARTICLE VI. SPECIAL COVENANTS AND AGREEMENTS.................................10
Section 6.1. Maintenance of Existence................................10
Section 6.2. Reserved................................................11
Section 6.3. Project List............................................11
Section 6.4. Inspection of Project...................................11
Section 6.5. Use of Proceeds; Other Matters with Respect to
Project, Bonds and Tax Exemption........................11
Section 6.6. Indemnification by Lessee...............................13
Section 6.7. Qualification of Lessee in the State....................14
Section 6.8. Permits or Licenses.....................................14
Section 6.9. Recording and Filing; Other Instruments.................14
Section 6.10. Arbitrage Covenant.....................................14
Section 6.11. Reference to Bonds Ineffective after Bonds Paid........14
Section 6.12. Notification of a Bankruptcy Filing or Event of
Default................................................15
Section 6.13. Obligations Under Indenture............................15
Section 6.14. Undertaking to Provide Continuing Disclosure...........15
Section 6.15. No Control of Bank.....................................15
ARTICLE VII. ASSIGNMENT, LEASING AND SELLING.................................15
Section 7.1. Conditions..............................................15
Section 7.2. Instrument Furnished to Trustee.........................16
Section 7.3. Limitation..............................................16
ARTICLE VIII. EVENTS OF DEFAULT AND REMEDIES.................................16
Section 8.1. Events of Default.......................................16
Section 8.2. Force Majeure...........................................16
Section 8.3. Remedies on Default.....................................17
Section 8.4. No Remedy Exclusive.....................................17
Section 8.5. Agreement to Pay Attorneys' Fees and Expenses...........17
Section 8.6. Waiver of Breach........................................17
ARTICLE IX. PREPAYMENTS......................................................17
Section 9.1. Optional Prepayments....................................17
Section 9.2. Extraordinary Optional Prepayments......................17
Section 9.3. Procedure to Exercise Options...........................18
Section 9.4. Mandatory Prepayment....................................18
Section 9.5. Relative Priorities.....................................18
Section 9.6. Prepayment to Include Fees and Expenses.................18
ARTICLE X. MISCELLANEOUS.....................................................18
Section 10.1. Notices................................................18
Section 10.2. Severability...........................................19
Section 10.3. Execution of Counterparts..............................19
Section 10.4. Amounts Remaining in Bond Fund.........................19
Section 10.5. Amendments, Changes and Modifications..................20
Section 10.6. Governing Law..........................................20
Section 10.7. Authorized Lessee Representative.......................20
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Section 10.8. Term of the Agreement..................................20
Section 10.9. No Personal Liability..................................20
Section 10.10. Parties in Interest...................................20
Section 10.11. Notice to Rating Agency...............................20
Section 10.12. Applicability of Agreement to Trustee.................20
Section 10.13. Reasonable Attorneys' Fees............................20
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LEASE AGREEMENT
THIS LEASE AGREEMENT, dated as of September 1, 2004 (the "Agreement"),
is by and between XXXXX COUNTY INDUSTRIAL DEVELOPMENT AUTHORITY (the "Issuer"),
a body corporate and politic, an instrumentality of Xxxxx County and a public
corporation of the State of Georgia (the "State"), and ABSORPTION CORP., a
corporation organized and existing under the laws of the State of Nevada (the
"Lessee").
W I T N E S S E T H :
WHEREAS, the Issuer is created under the local amendment to the Georgia
constitution, Ga. L. 1964, p. 1002 et seq., ratified by electors in the general
election in 1964, and continued by Ga. L. 1987, p. 3805, as amended (the "Act");
and
WHEREAS, the Issuer is further authorized by the Act to issue revenue
bonds, as defined in the Act to include notes, payable solely from revenues and
receipts from any revenue producing project and secured by a pledge of said
revenues and receipts; and
WHEREAS, in order to further the purposes of the Act, the Issuer
proposes to undertake the acquisition of land and building, to renovate the
building, to either expand the building or construct a new building, and to
acquire and install new equipment and to pay costs of installation of used
equipment (the "Project"), which is to be owned by the Issuer and leased to the
Lessee for the manufacture of absorption products and to obtain the funds
therefore by the issuance of its Bonds (as hereinafter defined) under an
Indenture of Trust dated as of the date hereof (the "Indenture") between the
Issuer and Branch Banking and Trust Company, as Trustee (the "Trustee"),
securing such Bonds; and
WHEREAS, the Issuer proposes to use the proceeds from the sale of the
Bonds, as hereinafter defined, to pay (or to reimburse the Lessee for) costs of
the acquisition, construction and equipping of the Project and the payment of
certain issuance costs of the Bonds and credit support for the Bonds upon the
terms and conditions hereinafter set forth; and
WHEREAS, the Lessee and Branch Banking and Trust Company (in such
capacity, the "Bank") will enter into a Letter of Credit and Reimbursement
Agreement dated as of the date hereof (the "Credit Agreement") pursuant to which
the Bank will issue an irrevocable letter of credit in the amount not to exceed
$4,956,384 to the Trustee at the request and for the account of the Lessee upon
the terms set forth in the Credit Agreement; and
WHEREAS, it has been determined that the financing of the acquisition,
construction and equipping of the Project will require the issuance, sale and
delivery by the Issuer of a series of bonds in the aggregate principal amount of
not to exceed $4,900,000 (the "Bonds");
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants herein made, and subject to the conditions herein set forth, the
parties hereto agree as follows
ARTICLE I.
DEFINITIONS
SECTION 1.1. Definitions. Certain capitalized words and terms used
herein are defined in the text hereof or in the Indenture. In addition to the
words and terms defined elsewhere herein and in the Indenture, the following
words and terms are defined terms under this Lease Agreement:
"Debt Service" shall mean the principal of, premium, if any, and
interest on the Bonds.
"Security Document" shall mean the Deed to Secure Debt, Leasehold Deed
to Secure Debt, Security Agreement and Assignment of Rents and Leases from the
Issuer and the Lessee to the Bank.
SECTION 1.2. Use of Words and Phrases. "Herein," "hereby," "hereunder,"
"hereof," "hereinabove," "hereinafter," and other equivalent words and phrases
refer to this Agreement 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.
ARTICLE II.
REPRESENTATIONS
SECTION 2.1. Representations and Warranties of the Issuer. The Issuer
makes the following representations as the basis for the undertakings herein
contained:
(a) The Issuer is a body corporate and politic, an instrumentality of
Xxxxx County and a public corporation of the State organized and existing under
the Act.
(b) The Issuer has the power to issue its Bonds, to use the proceeds
from the sale of the Bonds pursuant to the provisions of this Agreement to
finance the acquisition, construction and equipping of the Project, and to lease
the Project to the Lessee hereunder, such actions being in furtherance of the
purposes for which the Issuer was organized.
(c) The Issuer proposes to issue its Bonds, in the aggregate principal
amount of not to exceed $4,900,000 to provide amounts necessary to finance all
or a part of the Cost of the Project; the Bonds are to be issued under the
Indenture pursuant to which the Issuer's interest in the payments of Basic Rent
to be made by the Lessee and the Issuer's rights in, to and under this Agreement
(except for certain retained rights) will be assigned and pledged by the Issuer
to the Trustee as security for payment of the principal of, redemption premium,
if any, and interest on the Bonds.
(d) The Issuer has the power to enter into this Agreement and the
Indenture and to carry out its obligations hereunder and thereunder and to issue
the Bonds to finance the Cost of the Project; by proper action has duly
authorized the execution and delivery of this Agreement and the Indenture, the
performance of its obligations hereunder and thereunder and the issuance of the
Bonds; and, simultaneously with the execution and delivery of this Agreement,
has duly executed and delivered the Indenture and issued the Bonds.
(e) The Issuer hereby finds that the financing of the Project and the
leasing thereof to Lessee for operation will serve the purposes of the Act.
(f) To the best of the Issuer's knowledge, the Issuer is not in default
in the payment of the principal of or interest on any of its indebtedness for
borrowed money and is not in default under any instrument under or subject to
which any indebtedness for borrowed money has been incurred, and no event has
occurred and is continuing under the provisions of any such instrument that with
the lapse of time or the giving of notice, or both, would constitute an event of
default thereunder.
(g) The Issuer is not, to the knowledge of its officers, (1) in
violation of the Act or any existing law, rule or regulation applicable to it or
(2) in default under any indenture, mortgage, deed of trust, lien, lease,
contract, note, order, judgment, decree or other agreement, instrument or
restriction of any kind by which it or any of its
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assets are or may be bound or affected. To the best of the Issuer's knowledge,
the execution and delivery by the Issuer of this Agreement, the Indenture and
the Bonds and compliance with the terms and conditions hereof and thereof will
not conflict with or result in the breach of or constitute a default under any
of the above described instruments or other restrictions.
(h) To the best of the Issuer's knowledge, no further approval, consent
or withholding of objection on the part of any Federal, state or local
regulatory body, is required in connection with (1) the execution, issuance,
sale and delivery of the Bonds by the Issuer, (2) the execution or delivery of
or compliance by the Issuer with the terms and conditions of this Agreement and
the Indenture, or (3) the assignment by the Issuer of its rights under this
Agreement. To the best of Issuer's knowledge, the consummation by the Issuer of
the transactions set forth in the manner and under the terms and conditions as
provided herein will comply with all applicable state, local or Federal laws and
any rules and regulations promulgated thereunder by any regulatory authority or
agency.
(i) To the best of Issuer's knowledge, no litigation, inquiry or
investigation of any kind in or by any judicial or administrative court or
agency is pending or threatened against the Issuer with respect to (1) the
organization and existence of the Issuer, (2) its authority to execute or
deliver this Agreement, the Indenture or the Bonds, (3) the validity or
enforceability of this Agreement, the Indenture or the Bonds, or the
transactions contemplated hereby or thereby, (4) the title of any officer of the
Issuer who executed this Agreement, the Indenture or the Bonds, or (5) any
authority or proceedings related to the execution and delivery of this
Agreement, the Indenture or the Bonds, on behalf of the Issuer, and no such
authority or proceedings have been repealed, revoked, rescinded or amended but
are in full force and effect.
(j) The Issuer authorizes the Lessee, subject to the terms and
conditions set forth in this Agreement, which terms and conditions the Issuer
determines to be necessary, desirable and proper, to provide for the
acquisition, construction and equipping of the Project by such means as shall be
available to the Lessee and in the manner determined by the Lessee, without any
responsibility or liability of the Issuer therefor.
(k) Neither this Agreement, the Basic Rent payable by the Lessee
hereunder nor any of the revenues to be received hereunder have been pledged or
hypothecated by the Issuer in any manner or for any purpose other than as
provided in the Indenture as security for the payment of the Bonds.
SECTION 2.2. Representations by Lessee. The Lessee makes the following
representations as the basis for its undertakings hereunder:
(a) The Lessee is a corporation duly organized, validly existing and in
good standing under the laws of the State of Nevada, is qualified to do business
in the State, has the power to enter into this Agreement and the transactions
contemplated hereby and to perform its obligations hereunder, and has duly
authorized the execution and delivery of this Agreement and the performance of
its obligations hereunder and has approved the Indenture and the issuance of the
Bonds.
(b) The execution and delivery of this Agreement and the performance by
the Lessee of its obligations hereunder do not and will not (1) conflict with,
or constitute a breach or result in a violation of, its articles of
incorporation or bylaws, (2) constitute a default under any material agreement
or other material instrument to which the Lessee is a party or by which it is
bound, or (3) result in a violation of any material agreement or other material
instrument to which the Lessee is a party or by which it is bound or to the
knowledge of the Lessee, any constitutional or statutory provision or material
order, rule, regulation, decree or ordinance of any court, government or
governmental authority having jurisdiction over the Lessee or its property.
(c) The Lessee is not in default in the payment of the principal of or
interest on any of its material indebtedness for borrowed money and is not in
default in any material respect under any instrument under and subject to which
any indebtedness has been incurred, and no event has occurred and is continuing
under the provisions of any such agreement that, with the lapse of time or the
giving of notice, or both, would constitute an event of default thereunder.
(d) There is no litigation at law or in equity or any proceeding before
any governmental agency involving and known to the Lessee pending or, to the
knowledge of the Lessee, threatened, in which any liability of the Lessee is not
adequately covered by insurance or in which any judgment or order would have a
material adverse effect upon the business or assets of the Lessee or which would
affect its existence or authority to do business, operation of the Project, the
validity of this Agreement or the performance of the Lessee's obligations
hereunder or thereunder.
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(e) The Lessee has obtained all consents, permits, approvals,
authorizations and orders obtainable to date of any governmental or regulatory
authority that are required to be obtained by the Lessee as a condition
precedent to the acquisition and construction of the Project or the issuance of
the Bonds or the execution and delivery of this Agreement or the performance by
the Lessee of its obligations hereunder.
(f) Neither any written information, exhibit, or report furnished to
the Issuer by the Lessee in connection with the Bonds or any documents executed
and delivered in connection therewith nor any of the foregoing representations
contains any untrue statement of a material fact, or omits to state a material
fact necessary to make the statements therein, in light of the circumstances
under which they were made not misleading.
ARTICLE III.
THE PROJECT
SECTION 3.1. Lease of the Project.
(a) Term. The Issuer hereby leases to the Lessee, and the Lessee hereby
leases from the Issuer, the Project at the rental set forth in Section 4.1
hereof and in accordance with the provisions of this Agreement for a term ending
at 11:59 p.m. Eastern time on September 1, 2019 (the "Term"), subject to earlier
termination as provided herein. The Term of this Agreement shall terminate if
and when the Lessee terminates this Agreement pursuant to an exercise of the
option or options provided for in subsection (h) of this Section or on such
earlier date as shall be agreed to by the Lessee and the Issuer in writing. The
Issuer has delivered to the Lessee sole and exclusive possession of the Project
(subject to the right of the Trustee or Bank to enter thereon for inspection
purposes and to other provisions hereof) and the Lessee hereby accepts
possession of the Project.
(b) Matters of Title. The Issuer is to acquire title to the Project
from the Lessee and lease the Project back to Lessee hereunder. The Issuer
covenants to take all acts necessary to defend its title to the Project and will
do no act to impair such title, provided that such action is approved by the
Lessee and the cost of such action is paid for in advance by the Lessee, or the
Issuer is indemnified for such costs by the Lessee to the Issuer's satisfaction.
Except as provided herein, the Issuer shall not: (1) directly, indirectly, or
beneficially sell, convey, or otherwise dispose of any part of its interest in
the Project, (2) permit any part of the Project to become subject to any lien,
claim of title, encumbrance, security interest, conditional sale contract, title
retention arrangement, finance lease, or other charge of any kind, without the
written consent of the Bank, the Lessee and the Holder, and (3) assign,
transfer, or hypothecate (other than pursuant to the Bond Resolution and the
Security Document) any payment of rent (or analogous payment) then due or to
accrue in the future under any lease of the Project, except that if the laws of
the State at the time shall permit, nothing contained in this Section shall
prevent the consolidation of the Issuer with, or merger of the Issuer into, or
transfer of the Project as an entirety to, any public body of the State whose
property and income are not subject to taxation and which has authority to carry
on the business of owning and leasing the Project, provided, that upon any such
consolidation, merger, or transfer, the surviving or transferee entity shall
have assumed in writing or by operation of law all obligations of the Issuer
hereunder and all the obligations of the Issuer in favor of the Trustee, the
Remarketing Agent, the Lessee, and the Bank under all other documents relating
to the Bonds. Notwithstanding the foregoing, the Issuer may pledge the Project,
the Basic Rent, and this Agreement to the Trustee to secure the Bonds and to
secure the repayments of obligations of the Lessee under the Credit Agreement,
and may participate in the sale of the Project or part thereof under threat of a
taking by eminent domain or a sale or conveyance contemplated by any other
provision of this Agreement.
(c) No Warranty of Fitness for Purpose. The Issuer makes no warranty as
to the design, suitability, condition or fitness for purpose of the Project, as
more specifically provided in Section 3.7.
(d) Easements. The Issuer agrees promptly, upon the written request of
the Lessee, to consent to and grant or join in the granting of any easements or
dedications for public use that the Lessee believes to be necessary or desirable
for the operation of the Project.
(e) Issuer Not Required to Maintain Project. The Issuer shall not be
under any obligation to renew, repair, or maintain any portion of the Project or
to remove and replace any inadequate, obsolete, worn out, unsuitable,
undesirable, or unnecessary portion thereof.
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(f) Removal of Portions of the Project. The Lessee shall not be under
any obligation to renew, repair, or replace any inadequate, obsolete, worn out,
unsuitable, undesirable, or unnecessary fixtures or equipment that are a part of
the Project. If any fixture, equipment, or parts thereof have become obsolete or
worn out, the Lessee, at its own expense, may dispose of said worn or obsolete
fixture, equipment or parts without any responsibility or accountability to the
Issuer therefor, in which case the removed property shall cease to be a part of
the Project. If the Lessee, in its sole and absolute discretion, determines that
any fixtures, equipment or parts thereof (which are not inadequate, obsolete,
worn out, unsuitable, undesirable, or unnecessary) should be sold or traded in,
then the Lessee may do so provided that it either: (a) replaces such property or
parts with other items of property having a value at least equal to the net book
value of the property sold or traded in and causes title to such replacement
property to be transferred to the Issuer, whereupon the replacement property
shall become a part of the Project; or (b) pays to the Trustee, to be used to
defease or retire the Bonds, an amount equal to the net book value of the
property sold or traded in. At the written request of the Lessee, the Issuer
shall execute such instruments as shall be required to convey title to any such
removed fixture or parts thereof to the Lessee, to the purchaser thereof or to
the person accepting the same as a trade in and the Bondholder shall release the
lien and security interest of the Security Document therein. The removal from
the Project of any fixture or parts thereof pursuant to the provisions of this
Section shall not entitle the Lessee to any abatement or diminution of the
rental payments payable under Section 5.3 hereof (except to the extent that a
prepayment of principal or a credit in reduction of principal of the Bonds may
result in a reduction of Debt Service on the Bonds and a corresponding reduction
in the Basic Rent hereunder).
(g) Quiet Enjoyment. The Issuer warrants and covenants that it will
defend the Lessee at the Lessee's expense (except as to claims by the Issuer) in
the quiet enjoyment and peaceable possession of the Project free from all claims
of all persons whomsoever, throughout the term of this Agreement, so long as the
Lessee shall perform the covenants, conditions and agreements to be performed by
it hereunder, or so long as the period for remedying any failure of performance
shall not have expired.
(h) Options to Terminate the Lease Term; Purchase Project. The Lessee
shall have the option to terminate the term of this Lease at any time on sixty
(60) days written notice to the Issuer, the Trustee and the Bank and providing
such funds as are needed, when added to any funds held by the Trustee for the
payment of Debt Service, as shall be needed to retire or defease the Bonds. The
Lessee shall have, and is hereby granted, the option to purchase the Project by
giving written notice to the Issuer, the Trustee and the Bank, within sixty (60)
days prior to the expiration or earlier termination of the term of the Lease and
by paying the sum of $10.00 to the Issuer in addition to any amount needed, when
added to any funds held by the Trustee for the payment of Debt Service, to
retire or defease the Bonds. Such purchase shall be closed at the time of
retirement or defeasance of the Bonds, unless the Issuer and the Lessee agree to
a later date. In either case, if a Letter of Credit is in effect, the Lessee
shall deposit with the Bank, within 15 days after giving such notice, the amount
needed to reimburse the Bank (i) for amounts theretofore drawn by the Trustee
under the Letter of Credit, but not theretofore reimbursed, (ii) amounts to be
drawn by the Trustee to retire or defease the Bonds, and (iii) any other amounts
payable by Lessee to the Bank. At the closing of the purchase pursuant to this
subsection (i), the Issuer will, upon receipt of the purchase price, deliver to
the Lessee the following: (A) if the Indenture shall not at the time have been
satisfied in full, a release by the Trustee from the lien and/or security
interest of the Indenture in the property with respect to which such purchase is
being consummated; (B) a limited warranty deed and a xxxx of sale or other
documents conveying to the Lessee good and marketable fee simple title in and to
the land and improvements included in the Project with respect to which such
purchase is being consummated, as such property then exists, subject to the
following "Permitted Encumbrances: (i) those liens, security interests and
encumbrances (if any) to which such title in and to said property was subject
when initially conveyed to the Issuer, (ii) those liens, security interests and
encumbrances created by the Lessee or to the creation or suffering of which the
Lessee consented, (iii) those liens, security interests and encumbrances
resulting from the failure of the Lessee to perform or observe any of the
agreements on its part contained in this Agreement, and (iv) vendors, mechanics'
and materialmen's liens arising from the acquisition, construction and equipping
of the Project or the repair, replacement or renovation of the Project, or any
part thereof, provided that any such vendors', mechanics' and materialmen's
liens shall be discharged prior to any foreclosure thereof; (C) an assignment of
licenses, permits, warranties, etc.; and (D) the customary owner's affidavit.
(i) Lessee Entitled to Certain Rent Abatements if Bonds Paid Prior to
Maturity. If at any time the Bonds shall cease to be Outstanding under
circumstances not resulting in termination of this Agreement, and if the
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Lessee is not at the time otherwise in default hereunder, the Lessee shall
thereafter be entitled to use the Project to and including the end of, the term
hereof with no obligation to make payments of Basic Rent specified in Section
4.1 hereof during that interval (but otherwise on the terms and conditions
hereof).
(j) Tax Audits. If the Issuer or the Lessee is contacted by the
Internal Revenue Service with respect to the Bonds, the party so contacted shall
immediately notify the other party in writing. Neither the Issuer nor the Lessee
shall be required to defend any audit of the Bonds or to expend any funds in
connection therewith or to enter into any closing agreement with the Internal
Revenue Service or to provide funds for such purpose. If a tax audit of the
Bonds is commenced and if the Lessee requests in writing that the Issuer defend
such audit and agrees to pay all costs of such defense and all costs associated
with any closing agreement consented by both the Issuer and the Lessee, the
Issuer shall defend the same at the direction of the Lessee using counsel and
other professionals engaged by the Lessee at its sole expense. If the Lessee
does not request that the Issuer defend such audit, the Issuer may none-the-less
do so at its sole election and at its own expense and may, if it elects to do
so, at its own expense, enter into a closing agreement. If the defense of any
audit is commenced, such defense may be abandoned at the option of the party
bearing the cost thereof.
SECTION 3.2. Agreement to Acquire, Construct and Equip Project. The
Lessee shall cause the acquisition, construction and equipping of the Project as
described in Exhibit A attached hereto, as such Exhibit A may be amended from
time to time by the Lessee, provided that in the case of any material change in
such Exhibit A there shall be filed with the Issuer and the Trustee the written
approving opinion of Bond Counsel acceptable to the Trustee to the effect that
such change shall not impair the Federal income tax exemption of interest on any
of the Bonds under Section 103 of the Code. The Lessee agrees to obtain all
licenses, permits and consents required for the acquisition, construction,
equipping and operation of the Project, and the Issuer shall have no
responsibility therefor.
The Lessee will not take any action or fail to take any action which
would adversely affect the qualification of the Project under the Act or the
exclusion of interest on the Bonds from Federal income taxation under Section
103 of the Code.
SECTION 3.3. Agreement to Issue Bonds. In order to provide funds for
payment of the Cost of the Project the Issuer shall simultaneously with the
execution and delivery hereof proceed with the issuance and sale of the Bonds
bearing interest, maturing and having the other terms and provisions set forth
in the Indenture. All proceeds derived from the sale of the Bonds shall be
deposited into the Project Fund in accordance with the Indenture.
SECTION 3.4. Establishment of Completion Date and Disposition of
Balance in Project Fund. The Completion Date shall be evidenced to the Issuer
and the Trustee by a certificate signed by an Authorized Lessee Representative
stating (a) the total Cost of the Project, (b) that the acquisition,
construction and equipping of the Project has been completed substantially in
accordance with Section 3.2 hereof, and (c) that, except for amounts retained by
the Trustee for the Cost of the Project not then due and payable, the full Cost
of the Project has been paid. The Lessee shall direct the Trustee to transfer
any moneys remaining in the Project Fund after the Completion Date (except for
amounts retained by the Trustee for the Cost of the Project not then due and
payable) to the Bond Fund to be used in accordance with Section 6.05 of the
Indenture. Notwithstanding the foregoing, such certificate shall state that it
is given without prejudice to any rights against third parties which exist at
the date of such certificate or which may subsequently come into being.
SECTION 3.5. Lessee Required to Complete Project. If the proceeds
derived from the sale of the Bonds issued for such purpose are not sufficient to
pay in full the Cost of the Project, the Lessee shall pay so much of the cost
thereof as may be in excess of the moneys available therefor or shall pay over
to the Trustee such moneys as are necessary to provide for payment of such Cost.
The Lessee agrees that if, after exhaustion of the proceeds derived from the
sale of the Bonds, the Lessee should pay any portion of the Cost of the Project
pursuant to the provisions of this Section, it shall not be entitled to any
reimbursement therefor from the Issuer or the Trustee nor shall it be entitled
to any abatement, diminution or postponement of its payments hereunder.
SECTION 3.6. Limitation of Issuer's Liability. The Bonds shall be
limited obligations of the Issuer, the principal of, redemption premium, if any,
and interest on which shall be payable by the Issuer solely out of the revenues
derived by the Issuer pursuant to this Agreement. THE BONDS AND THE INTEREST
THEREON AND REDEMPTION PREMIUM, IF ANY, SHALL NOT BE DEEMED TO CONSTITUTE A DEBT
OR A PLEDGE OF THE FAITH AND CREDIT OF THE STATE OR ANY POLITICAL SUBDIVISION
THEREOF,
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INCLUDING WITHOUT LIMITATION, THE ISSUER AND THE COUNTY OF XXXXX, GEORGIA (THE
"COUNTY"). NEITHER THE STATE NOR ANY POLITICAL SUBDIVISION THEREOF, INCLUDING,
WITHOUT LIMITATION, THE ISSUER AND THE COUNTY, SHALL BE OBLIGATED TO PAY THE
PRINCIPAL OF OR REDEMPTION PREMIUM, IF ANY, OR INTEREST ON THE BONDS OR OTHER
COSTS INCIDENT THERETO EXCEPT FROM THE REVENUES ASSIGNED AND PLEDGED THEREFOR,
AND NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE STATE OR ANY
POLITICAL SUBDIVISION THEREOF, INCLUDING, WITHOUT LIMITATION, THE ISSUER AND THE
COUNTY, IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR REDEMPTION PREMIUM, IF
ANY, OR INTEREST ON THE BONDS OR OTHER COSTS INCIDENT THERETO. THE ISSUER DOES
NOT HAVE ANY TAXING POWER.
No breach by the Issuer of this Agreement or of any provision or
condition hereof or in the Bonds or of any agreement contained in the Agreement
or in the Bonds shall result in the imposition of any pecuniary liability upon
the Issuer or the State or any political subdivision or agency of the State or
any charge upon the general credit or taxing power of the Issuer, the State, or
any political subdivision of the State. The liability of the Issuer under this
Agreement and the Bonds, or any provision or condition hereof or thereof, or of
any agreement herein or in the Bonds contained, or of any warranty herein or in
the Bonds included, or for any breach or default by the Issuer of any of the
foregoing, shall be limited solely and exclusively to the pledged revenues
derived by the Issuer under this Agreement which have been pledged to the
Trustee. The Issuer shall not be required to execute or perform any of its
duties, obligations, powers, or covenants hereunder or under the Bonds except to
the extent the pledged revenues are available therefor. The Issuer may require
as a condition to the participation by it with the Lessee in obtaining any
license or permit or other approvals a deposit by the Lessee of such amount as
determined by the Issuer to be reasonable to assure the reimbursement to the
Issuer of the costs incurred by it in such participation, with any amount of
such deposit in excess of such costs to be returned to the Lessee. The
provisions of this Section 3.6 shall control every other provision of this
Agreement, anything in such other provisions to the contrary notwithstanding.
No covenant, agreement, or obligation contained in this Agreement or in
the Bonds shall be deemed to be a covenant, agreement, or obligation of any
present or future director, member, officer, employee, or agent of the Issuer in
his individual capacity, and neither the members of the Issuer nor any officer
thereof executing this Agreement or the Bonds shall be liable personally on the
Bonds or under this Agreement or be subject to any personal liability or
accountability by reason of the issuance, execution, or delivery of the Bonds.
No officer, director, member, employee, or agent of the Issuer shall incur any
personal liability with respect to any other action taken, or not taken, by him
pursuant to this Agreement, the Indenture, or the Act, provided he does not act
with malicious intent.
SECTION 3.7. Disclaimer of Warranties. The Lessee recognizes that since
the Project has been or will be acquired, constructed and equipped by the Lessee
and by contractors and suppliers selected by the Lessee in accordance with plans
and specifications prepared by architects or engineers selected by the Lessee.
THE ISSUER MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT
TO THE MERCHANTABILITY, CONDITION, WORKMANSHIP, OR THE ACTUAL OR DESIGNED
CAPACITY OF ANY PART OF THE PROJECT OR ITS SUITABILITY FOR THE LESSEE'S
PURPOSES, OR FOR THE PURPOSES SPECIFIED IN THIS AGREEMENT, OR THE EXTENT TO
WHICH PROCEEDS DERIVED FROM THE SALE OF THE BONDS WILL PAY THE COST TO BE
INCURRED IN CONNECTION THEREWITH.
SECTION 3.8. Taxes, Other Governmental Charges; Utilities. The Lessee
shall pay, as the same become due, all taxes, assessments, impositions and
governmental charges of any kind whatsoever, general and specific, foreseen and
unforeseen, and all water and sewer charges that may be lawfully assessed,
levied or imposed on the payments under this Agreement or with respect to the
Project. The Lessee shall pay as the same become due all utility and other
charges incurred in the operation, maintenance, use and occupancy of the Project
and all assessments and charges lawfully made by any governmental body for
public improvements to the Project. The Lessee may allow to exist any
indebtedness for any such tax, assessment, charge, levy or claim, provided any
such tax, assessment, charge, levy or claim is being contested in good faith by
appropriate proceedings and the Lessee shall have established and maintained
adequate reserves for the payment of the same. Upon the request of the Issuer,
the Lessee shall provide the Issuer with proof of payment of all taxes and
charges as required under this Section 3.8. The parties understand that if this
Lease is in effect on January 1 of any year, the property of the Project, as it
exists on that date and which is owned by the Issuer on that date, will be
exempt from ad valorem
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taxes, and in order that the taxing authorities will not be totally deprived of
all revenue from the Project, Lessee has entered into the PILOT Agreement, of
even date herewith, between the Issuer and the Lessee (the "PILOT Agreement") to
pay certain payments in lieu of taxes, the payment of which shall be deemed to
be included within the meaning of the word "taxes" as used in this Agreement.
SECTION 3.9. Insurance. The Lessee shall keep the Project insured
against fire and other risks to the extent usually insured against by companies
owning and operating similar property, by reputable insurance companies or, at
the Lessee's election, with respect to all or any element or unit of the
Project, by means of an adequate insurance fund set aside and maintained by it
out of its own earnings or in conjunction with other companies through an
insurance fund, trust or other agreement. Upon the request of the Issuer, the
Lessee shall provide a certificate to the Issuer indicating its insurance
coverage. The Lessee, at the expense of the Lessee, throughout the Term, shall
cause the following insurance to be carried with respect to the Project:
(i) public liability insurance insuring the Issuer and the Lessee
against liability for personal injury, death, or property damage with respect to
the Project, in amounts of $1,000,000 per occurrence and $2,000,000 in
aggregate, subject to deductibles per occurrence of not more that $100,000,
unless the Issuer agrees in writing to a higher deductible; and
(ii) worker's compensation insurance as required by law relating
to the employees working at the Project.
Such insurance may be provided through a blanket policy. The Lessee will provide
the Issuer annually certificates evidencing that the public liability insurance
referred to above is in full force and effect.
SECTION 3.10. Maintenance of the Project. The Lessee shall use,
maintain and operate the Project, or cause it to be used, maintained and
operated, in good repair, in accordance with all applicable laws, rules and
regulations, subject to ordinary wear and tear and obsolescence. The Lessee may
make modifications, replacements and renewals of and to the Project as the
Lessee shall deem necessary or desirable and that do not adversely affect the
value of the Project provided that all such additions, modifications or
improvements comply with all applicable Federal, state and local codes.
ARTICLE IV.
PAYMENT PROVISIONS
SECTION 4.1. Repayment of Bonds and Payment of Other Amounts Payable.
(a) On or before any date that interest on the Bonds is due as set
forth in the Indenture, or any date on which principal on the Bonds is due
(whether at maturity, upon redemption or otherwise) pursuant to the Indenture,
until the principal of and redemption premium, if any, and interest on the Bonds
shall have been fully paid or provision for the payment thereof shall have been
made in accordance with the Indenture, the Lessee covenants and agrees to pay or
to cause to be paid "Basic Rent" in lawful money of the United States of America
to the Trustee for deposit in the Bond Fund, a sum (equal to the amount payable
on such payment date as principal (whether at maturity, upon redemption or
otherwise) of and redemption premium, if any, and interest on the Bonds as
provided in the Indenture. All payments made pursuant to this Section shall be
made in immediately available funds at the principal corporate trust office of
the Trustee during normal banking hours. The Lessee covenants to make all
payments required hereby, as and when the same become due.
In the event that the payment of the principal of and accrued interest
on the Bonds is accelerated under Section 9.02 of the Indenture, the Lessee
covenants and agrees to pay, or cause to be paid, to the Trustee as provided
above Basic Rent in a sum equal to all the principal of and redemption premium,
if any, and interest on the Bonds then outstanding.
Each payment pursuant to this Section shall at all times be sufficient
to pay the total amount of principal (whether at maturity, upon redemption or
otherwise) of and redemption premium, if any, and interest payable on the Bonds
on the date that such payment is due; provided that excess Bond Fund moneys held
by the Trustee in the Bond Fund on such date and available to pay principal and
interest on the Bonds shall be credited against the payment due on such date.
Subject to the provisions of the next succeeding sentence, if at any time the
amount held by the Trustee in the Bond Fund should be sufficient (and remain
sufficient) to pay at the times required the
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principal of and redemption premium, if any, and interest on the Bonds then
remaining unpaid, the Lessee shall not be obligated to make any further payments
under the provisions of this Section. Notwithstanding the provisions of the
preceding sentence, if on any date excess Bond Fund moneys held by the Trustee
in the Bond Fund are insufficient to make the then required payments of
principal (whether at maturity, upon redemption or otherwise) of and redemption
premium, if any, and interest on the Bonds on such date, the Lessee shall
forthwith pay such deficiency as a payment hereunder.
(b) The Lessee agrees to pay the reasonable fees, charges and expenses,
including reasonable attorneys' fees, of the Trustee, the Remarketing Agent, and
any Paying Agent relating to the Bonds, including but not limited to payment for
services rendered in enforcing the Indenture and the Agreement.
(c) The Lessee agrees to pay the Issuer's reasonable costs (including
reasonable attorneys' fees) in connection with (i) the authorization, issuance
and sale of the Bonds; (ii) prepayment or redemption of the Bonds; and (iii)
administrative costs and expenses of the Issuer, including the reasonable fees
of attorneys, accountants, engineers, appraisers or consultants, paid or
incurred by the Issuer by reason of the Bonds being outstanding or pursuant to
requirements of this Agreement. The Lessee agrees to pay the Issuer's issuance
fee in connection with its approval of the issuance of the Bonds.
(d) The Lessee agrees to pay to the Trustee amounts equal to the
purchase price of Bonds tendered pursuant to Section 2.14 of the Indenture, such
amounts to be paid by the Lessee to the Trustee on the dates such payments are
to be made pursuant to the Indenture; provided, however, that the amount of any
such payment hereunder shall be reduced by the amount of moneys available for
such payment under Sections 12.02(i) and (ii) of the Indenture.
(e) In the event the Lessee should fail to make, or cause to be made,
any of the payments required in this Section, the item or installment so in
default shall continue as an obligation of the Lessee until the amount in
default shall have been fully paid.
(f) In order to provide for the payments required in subsections (a)
and (d) of this Section, the Lessee shall cause to be delivered to the Trustee a
Letter of Credit simultaneously with the original issue and delivery of the
Bonds, and hereby authorizes and directs the Trustee to draw moneys under the
Letter of Credit in accordance with the provisions of the Indenture to the
extent necessary to make any payments of principal and purchase price of, and
interest on the Bonds as and when the same become due. The Lessee shall receive
as a credit against its obligations to make the payments described in subsection
(a) and (d) of this Section all payments made through draws under the Letter of
Credit and all other amounts described in Section 4.01 of the Indenture.
SECTION 4.2. No Defense or Set-off-Unconditional Obligation. The
obligations of the Lessee to make the payments required in Section 4.1 hereof
and to perform and observe the other agreements on its part contained herein
shall be absolute and unconditional, irrespective of any defense or any right of
set-off, recoupment or counterclaim it might otherwise have against the Issuer
or the Trustee, and the Lessee shall pay during the term of this Agreement the
payments to be made as prescribed in Section 4.1 and all other payments required
hereunder free of any deductions and without abatement, diminution or set-off;
and until such time as the principal of and redemption premium, if any, and
interest on the Bonds shall have been fully paid, or provision for the payment
thereof shall have been made in accordance with the Indenture, the Lessee: (i)
will not suspend or discontinue any payments provided for in Section 4.1 hereof;
(ii) will perform and observe all of its other agreements contained in this
Agreement; and (iii) except as provided in Article VII hereof, will not
terminate this Agreement for any cause, including, without limiting the
generality of the foregoing, failure to complete the Project, the occurrence of
any act or circumstances that may constitute failure of consideration,
destruction of or damage to the Project, commercial frustration of purpose, any
change in the tax laws of the United States of America or the State or any
political subdivision of either of them, or any failure of the Issuer or the
Trustee to perform or observe any agreement, whether express or implied, or any
duty, liability or obligation arising out of or connected with this Agreement or
the Indenture.
SECTION 4.3. Assignment of Issuer's Rights. As security for the payment
of the Bonds, the Issuer will assign to the Trustee the Issuer's rights under
this Agreement (except for the Issuer's rights under Sections 3.8, 4.1(c), 6.4,
6.6 and 8.5 hereof and any rights of the Issuer to receive notices,
certificates, or other communications hereunder or to give its consent
hereunder) including the right to receive payments of Basic Rent hereunder and
the proceeds thereof, and hereby directs the Lessee to make said payments, or to
cause said payments to be made,
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directly to the Trustee. The Lessee herewith assents to such assignment and will
make payments, or cause payments to be made, directly to the Trustee. Such
assigned rights and remedies shall be exercised by the Trustee, subject to the
provisions of the Indenture.
EXCEPT AS RESERVED IN THIS SECTION 4.3, THIS AGREEMENT HAS BEEN ASSIGNED TO THE
TRUSTEE. INFORMATION CONCERNING SUCH SECURITY INTEREST MAY BE OBTAINED FROM THE
TRUSTEE AT ITS OFFICE IN WILSON, NORTH CAROLINA.
SECTION 4.4. Letter of Credit. The Lessee shall provide for the payment
of amounts due under Section 4.1(a) and (d) by delivery to the Trustee on the
date of initial authentication and delivery of the Bonds of a Letter of Credit
in favor of the Trustee and for the benefit of the holders of the Bonds (other
than Bonds held by the Lessee or pledged to the Bank). The Lessee shall be
entitled to provide a Substitute Letter of Credit under certain circumstances as
provided in the Indenture. Any extension of the Letter of Credit shall be for at
least one year or, if less, the fifteenth day after the maturity date of the
Bonds.
ARTICLE V.
DAMAGE, DESTRUCTION AND CONDEMNATION
SECTION 5.1. Parties to Give Notice. In case of any material damage to
or destruction of any part of the Project, the Lessee shall give prompt notice
thereof to the Issuer and the Trustee. In case of a taking of all or any part of
the Project or any right therein under the exercise of the power of eminent
domain or any loss thereof because of failure of title thereto or the
commencement of any proceedings or negotiations which might result in such a
taking or loss, the party upon which notice of such taking is served shall give
prompt notice to the other and to the Trustee. Each such notice shall describe
generally the nature and extent of such damage, destruction, taking, loss,
proceeding or negotiations.
SECTION 5.2. Damage and Destruction. Unless the Lessee terminates this
Agreement and prepays the Basic Rent pursuant to Article IX, and subject to the
terms and conditions of the Credit Agreement, if all or any part of the Project
is destroyed or damaged by fire or other casualty, the Lessee shall be obligated
to continue to make payments of Basic Rent as required hereunder and, if
feasible, shall promptly replace, repair, rebuild, or restore the property
damaged or destroyed to substantially its same condition as prior to such damage
or destruction, with such alterations and additions as the Lessee may determine
and as will not impair the capacity or character of the Project for the purpose
for which it is then being used or is intended to be used. Insurance proceeds to
be used for such purpose shall be paid to the Trustee and held in the Project
Fund pending disbursement. If the insurance proceeds exceed the cost of such
repair, rebuilding, restoration or replacement, the excess shall be transferred
to the Bond Fund and used to retire or defease bonds.
SECTION 5.3. Condemnation and Loss of Title. Unless the Lessee
terminates this Agreement and prepays the Basic Rent pursuant to Article IX, and
subject to the terms and conditions of the Credit Agreement, if before the
Completion Date title to or the temporary use of all or any part of the Project
shall be taken under the exercise of the power of domain (or sold under threat
of condemnation), the Lessee shall be obligated to continue to make the Basic
Rent payments required hereby. The Lessee shall cause the Net Proceeds from any
such condemnation award to be applied to the restoration of the Project affected
by the taking to substantially its same condition as prior to the exercise of
such power of eminent domain with such repairs and replacements as the Lessee
may determine and as will not impair the capacity or character of the Project
for the purpose for which it is then being used or is intended to be used.
Condemnation proceeds to be used for such purpose shall be paid to the Trustee
and held in the Project Fund pending disbursement. If the condemnation proceeds
exceed the cost of such repair, rebuilding, restoration or replacement, the
excess shall be transferred to the Bond Fund and used to retire or defease the
Bonds.
ARTICLE VI.
SPECIAL COVENANTS AND AGREEMENTS
SECTION 6.1. Maintenance of Existence. The Lessee agrees that it will
maintain its corporate existence and will not dissolve or otherwise dispose of
all or substantially all of its assets and will not consolidate with or merge
into another Person or permit one or more other Persons to consolidate with or
merge into it, except the Lessee may, without violating the foregoing and
subject to the conditions below, consolidate with or merge into another Person,
or permit one or more other Persons to consolidate with or merge into it, or
transfer all or
10
substantially all of its assets to another Person (and thereafter dissolve or
not dissolve as it may elect) if the Person surviving such merger or resulting
from such consolidation, or the entity to which all or substantially all of the
assets of the Lessee are transferred, as the case may be: (i) shall be a
domestic corporation or other business entity organized under the laws of the
United States of America, the District of Columbia or one of the states of the
United States, and (ii) shall assume in writing all of the obligations of the
Lessee hereunder. Notwithstanding the foregoing, the Lessee may at any time
permit any wholly owned subsidiary to merge into it without violating this
Section. The Lessee shall not sell or lease the Project or any part thereof
except in accordance with Article VII hereof.
As conditions of any such merger, consolidation or asset transfer: (a)
(i) if a Letter of Credit is in effect, the Bank shall consent to such merger,
consolidation or asset transfer and shall expressly ratify and affirm that the
Letter of Credit remains in full force and effect or (ii) if no Letter of Credit
is in effect, the holders of at least two-thirds in aggregate principal amount
of Bonds then Outstanding shall consent to such merger, consolidation or asset
transfer; (b) the surviving entity shall preserve and keep in full force and
effect all licenses and permits necessary to the proper conduct of its business;
(c) the Lessee shall obtain and deliver to the Issuer, the Trustee and the Bank
an opinion of Bond Counsel to the effect that the proposed transaction will not
adversely affect the exclusion from gross income of interest on the Bonds for
Federal income tax purposes; and (d) the Lessee shall notify the Trustee and the
Issuer of the name and address of the Person surviving such merger or
consolidation or acquiring such assets, as the case may be.
SECTION 6.2. Reserved.
SECTION 6.3. Project List. The Lessee shall maintain at the Project
site a list setting forth in reasonable detail all items constituting the
Project.
SECTION 6.4. Inspection of Project. The Issuer, the Trustee and their
duly authorized agents shall have the right at all reasonable times during
normal business hours to enter upon any part of the Project and to examine and
inspect the same as may be reasonably necessary for the purpose of determining
whether the Lessee is in compliance with its obligations under Section 3.10
hereof or in the event of failure of the Lessee to perform its obligations under
Section 3.10 hereof, and the Issuer, the Trustee and their duly authorized
agents shall also have the right at all reasonable times, upon appropriate prior
notice to the Lessee, to examine the books and records of the Lessee with
respect to the Project for the purpose of making examinations and inspections of
the same.
SECTION 6.5. Use of Proceeds; Other Matters with Respect to Project,
Bonds and Tax Exemption.
(a) Use of Proceeds; Prohibited Uses of Project, etc. The Lessee shall
not cause any proceeds of the Bonds to be expended, except pursuant to the
Indenture and this Agreement. The Lessee shall not (i) requisition or otherwise
allow payment out of proceeds of the Bonds (A) if such payment is to be used for
the acquisition of any property (or an interest therein) unless the first use of
such property is pursuant to such acquisition, provided that this clause (A)
shall not apply to any building (and the equipment purchased as a part thereof,
if any,) if the "rehabilitation expenditures", as defined in Section 147(d) of
the Code, with respect to the building or equipment equal or exceed 15% of the
portion of the cost of acquiring the building (including any such equipment)
financed with the net proceeds of the Bonds, (B) if, as a result of such
payment, 25% or more of the proceeds of the Bonds and interest accrued thereon
would be considered as having been used directly or indirectly for the
acquisition of land (or an interest therein), (C) if, as a result of such
payment, less than 95% of the net proceeds of the Bonds and interest accrued
thereon would be considered as having been used for costs of the acquisition,
construction, or reconstruction or improvement of land or property of a
character subject to the allowance for depreciation within the meaning of
Section 144(a)(1)(A) of the Code ("Qualifying Costs"), (D) if such payment is
used to pay issuance costs (including counsel fees and underwriting and
placement fees) of the Bonds in excess of an amount equal to 2% of the principal
amount of the Bonds; (ii) take or omit, or permit to be taken or omitted, any
other action with respect to the use of such proceeds the taking or omission of
which has or would result in the loss of the exclusion of interest on the Bonds
from gross income of the owners thereof for Federal income tax purposes; or
(iii) take or omit, or permit to be taken or omitted, any other action the
taking or omission of which has or would cause the loss of such exclusion.
Without limiting the generality of the foregoing, the Issuer and the Lessee will
not use the proceeds of the Bonds, or permit such proceeds to be used directly
or indirectly, for the acquisition of land (or an interest therein) to be used
for farming purposes, or to provide (x) any facility the primary purpose of
which is retail food and beverage services or automobile sales or service, (y)
any airplane, skybox or other private luxury box, any facility primarily used
for gambling, any store the principal business of which is the sale of alcoholic
beverages for
11
consumption off premises, any private or commercial golf course, country club,
massage parlor, tennis club, skating facility (including roller skating,
skateboard and ice skating), racquet sports facility (including any hand ball or
racquet ball court), hot tub facility, suntan facility, or race track, or (z)
single or multi-family residences. The Lessee shall not permit the use of the
Project by any person to whom any part of the aggregate authorized face amount
of the Bonds would be allocated pursuant to Section 144(a)(10) of the Code if
the amount so allocated when increased as provided in Section 144(a)(10) of the
Code would exceed $40,000,000.
(b) Commencement of Construction; First Users. The Lessee hereby
represents that the Lessee will not requisition any amounts from the proceeds of
the Bonds to pay costs incurred before the date of issuance of the Bonds and
paid more than 60 days prior to the date of "official intent" of the Issuer
within the meaning of Section 150 of the Code, which took place on May 13, 2003.
No person, firm or corporation who was a "substantial user" of the Project
(within the meaning described in such term under Section 144(a) of the Code)
before the date of issuance of the Bonds and who was or will be a "substantial
user" of the Project following its being placed in service, has received or will
receive, directly or indirectly, any proceeds from the issuance and sale of the
Bonds.
(c) Economic Life of Project. The Lessee hereby represents that the
"average reasonably expected economic life" of the components comprising the
Project, determined pursuant to Section 147(b) of the Code, is not less than the
amount set forth in the certificates or letters of representation of the Lessee
delivered on the Closing Date. The weighted average maturity of the Bonds does
not exceed 120% of the remaining "average reasonably expected economic life" of
the components comprising the Project, determined pursuant to Section 147(b) of
the Code. The Lessee agrees that it will not make any changes in the Project
which would, at the time made, cause the "average reasonably expected economic
life" of the components of the Project, determined pursuant to Section 147(b) of
the Code, to be less than the weighted average maturity of the Bonds.
(d) Certificate of Information; Internal Revenue Service Form 8038. The
Lessee hereby represents that the information contained in the certificates or
letters of representation of the Lessee with respect to the compliance with the
requirements of Section 103 and Sections 141 through 150 of the Code, including
the information in Internal Revenue Service Form 8038 (excluding the issue
number and the employer identification number of the Issuer), filed by the
Issuer with respect to the Bonds and the Project, is true and correct in all
material respects. The Lessee shall bear all expenses of filling out and filing
such form.
(e) Use by United States of America or its Agencies. The Lessee has not
permitted and shall not permit the Project to be used or occupied, other than as
a member of the general public in any manner for compensation by the United
States of America or an agency or instrumentality thereof, including any entity
with statutory authority to borrow from the United States of America (in any
case within the meaning of Section 149(b) of the Code), unless, with respect to
any future use of the Project, the Lessee shall deliver to the Trustee an
opinion of Bond Counsel in form and substance satisfactory to the Trustee to the
effect that such use will not impair the exclusion of interest on the Bonds from
gross Federal income of the owners thereof for Federal income tax purposes.
(f) Other Bonds to be Issued. During the period commencing on the date
of the issuance of the Bonds and ending 30 days after the date of issuance
thereof, there shall be issued no "private activity bonds," as defined in
Section 141 of the Code, which are guaranteed or otherwise secured by payments
to be made by the Lessee or any "related person" (or group of "related
persons"), unless the Lessee shall deliver to the Trustee an opinion of Bond
Counsel in form and substance satisfactory to the Trustee to the effect that the
issuance of such "private activity bonds" will not impair the exclusion of
interest on the Bonds from Federal income of the owners thereof for Federal
income tax purposes. Except for the Lessee or any "related person" (or group of
"related persons"), no Person has (1) guaranteed, arranged, participated in,
assisted with or paid any portion of the cost of the issuance of the Bonds, or
(2) provided any property or any franchise, trademark or trade name (within the
meaning of Section 1253 of the Code) which is to be used in connection with the
Project.
(g) Limit on Amount of Bonds; 144(a)(4) Election; Reports. The Lessee
represents that on the date of the issuance of the Bonds outstanding obligations
do not exist that will cause the "aggregate face amount" of the Bonds allocated
to any "test-period beneficiary," as defined in Section 144(a)(10) of the Code,
when increased by such obligations as provided in Section 144(a)(10) of the
Code, to exceed $40,000,000. The Lessee and, at the direction of the Lessee, the
Issuer shall file any reports or statements and take any other action as may be
required from time to time with respect to the qualification of the Bonds as an
exempt small issue within the meaning of Section 144(a) of the Code. The Issuer
hereby elects to have the provisions of Section 144(a)(4) of the Code apply to
the Bonds.
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(h) Covenant to Maintain Tax Exemption. The Issuer and the Lessee
hereby covenant and agree on their own behalf that they shall not (knowingly, in
the case of the Issuer) take any action, cause any action to be taken, omit to
be taken any action or cause any omission to occur which would cause the
interest on the Bonds to become includable in the gross income of the recipients
thereof for Federal income tax purposes. Promptly after the Lessee first becomes
aware of any Determination of Taxability of the Bonds or an event that could
trigger such a Determination of Taxability, the Lessee shall give written notice
thereof to the Issuer, the Bank and the Trustee.
SECTION 6.6. Indemnification by Lessee. The Lessee shall indemnify and
hold harmless the Issuer, the board of directors of the Issuer (the "Governing
Board"), the Trustee, and their respective officers, directors, members,
employees, attorneys, and agents (each an "Indemnified Party" and collectively,
the "Indemnified Parties") from:
(a) any liability, cost, or expense in the administration of the Bonds,
the Indenture, this Agreement, and any other instrument or agreement related
thereto and hereto and the obligations imposed on an Indemnified Party thereby
and hereby;
(b) any or all liability or loss, cost, or expense, including
reasonable attorneys' fees, resulting from or arising out of any loss or damage
to property or any injury to or death of any person occurring on or about the
Project site or resulting from any defect in the fixtures, machinery, equipment,
or other property located on the Project site, or arising out of, pertaining to,
or having any connection with, the Project or the financing thereof (whether or
not arising out of acts, omissions, or negligence of the Lessee or any of its
agents, contractors, servants, employees, licensees, lessees, or assignees); and
(c) any or all liability or loss, cost, or expense, including
reasonable attorneys' fees, arising out of or in connection with, or pertaining
to the issuance, sale, or delivery of the Bonds, including, but not limited to,
liabilities arising under the Securities Act of 1933, the Securities Exchange
Act of 1934, or any applicable state securities laws, but such indemnity for
securities liabilities shall be subject to the limitations that (i) such
indemnity shall not have been determined by a binding legal precedent to be void
as contrary to public policy and such indemnity for securities liability shall
not include any liability or loss, cost, or expense including attorneys' fees if
determined to be so void; (ii) nothing in this Agreement shall be deemed to
prejudice the Lessee's rights against any placement agent or underwriter or
against the Remarketing Agent or any party other than an Indemnified Party; and
(iii) the Lessee shall not be liable for any representations made with respect
to the Issuer, the Bank, or the Remarketing Agent.
Notwithstanding the fact that it is the intention of the parties hereto
that none of the Indemnified Parties shall incur any pecuniary liability by
reason of the terms of this Agreement, the Indenture, any related agreements, or
the undertakings required of the Issuer and the Trustee hereunder and thereunder
by reason of the issuance and sale of the Bonds, the execution of documents
relating to the Bonds, or the performance of any act requested of the Issuer or
the Trustee by the Lessee, including all claims, liabilities, or losses arising
in connection with the violation of any statutes or regulations pertaining to
the foregoing, if an Indemnified Party shall incur any such pecuniary liability,
then in such event the Lessee shall indemnify and hold the Indemnified Party
harmless against all claims by or on behalf of any person, firm, or corporation
or other legal entity arising out of the same and all costs and expenses
incurred in connection with any such claim or in connection with any action or
proceeding brought thereon. Upon notice from an Indemnified Party in any such
action or proceeding the Lessee shall have complete and final control over the
defense and settlement of any such action the Lessee so assumes. If called upon
to provide indemnity under this Section 6.6, the Lessee shall be subrogated to
the rights of the Indemnified Party.
The indemnity specified in this Section 6.6 shall not relieve any
Indemnified Party for damages that result from negligence or willful misconduct
on the part of such Indemnified Party seeking such indemnity. This
indemnification covenant shall be in addition to any heretofore extended by the
Lessee to any Indemnified Party and shall survive the termination of this
Agreement with respect to liability arising out of any event or act occurring
prior to such termination. The Issuer may require advance payment or assurance
of payment for any fees, expenses, or costs incurred or expected to be incurred
by it in connection with the performance of any act or thing it may be called
upon to do under the term of this Agreement. The foregoing sentence does not
apply to the Issuer's obligations set forth in Sections 3.3 or 4.3 hereof.
If any action, suit or proceeding is brought against any Indemnified
Party for any loss or damage for which the Lessee is required to provide
indemnification under this Section, such Indemnified Party shall promptly notify
13
the Lessee and the Lessee shall have the sole right and duty to assume, and
shall assume, the defense thereof, with full power to litigate, compromise or
settle the same in its sole discretion. Notwithstanding the foregoing, in the
event the Indemnified Party is the Issuer, in the event the Issuer reasonably
believes there are defenses available to it that are not being pursued, the
Issuer may, in its sole discretion, hire independent counsel to pursue its own
defense, and the Lessee shall be liable for the cost of such counsel. The
obligations of the Lessee under this Section shall survive any termination of
this Agreement.
Notwithstanding the foregoing, if a court of competent jurisdiction
determines that any of the provisions of this Section violate O.C.G.A. Section
13-8-2 and are applicable to this Agreement, the indemnity contained in this
Agreement shall not extend to any indemnification which is prohibited by
O.C.G.A. Section 13-8-2.
SECTION 6.7. Qualification of Lessee in the State. The Lessee agrees
that throughout the term of this Agreement it will be qualified to do business
in the State of Georgia.
SECTION 6.8. Permits or Licenses. In the event that it may be necessary
for the proper performance of this Agreement on the part of the Lessee or the
Issuer that any application or applications for any permit or license to do or
to perform certain things be made to any governmental or other agency by the
Lessee or the Issuer, the Lessee and the Issuer each shall, upon the request of
either, execute such application or applications.
SECTION 6.9. Recording and Filing; Other Instruments.
(a) The Lessee shall cause all necessary UCC financing statements
(including continuation statements), if any, to be recorded and filed in such
manner and in such places as may be required by law to fully preserve and
protect the Trust Estate of the Holders and the rights of the Trustee and to
perfect the security interest created by the Indenture.
(b) The Lessee covenants that it will cause continuation statements to
be filed as required by law in order fully to preserve and to protect the rights
of the Trustee or the Issuer in the assignment of certain rights of the Issuer
under this Agreement and otherwise under the Indenture.
(c) The Lessee and the Issuer shall execute and deliver all instruments
and shall furnish all information and evidence deemed necessary or advisable in
order to enable the Lessee to fulfill its obligations as provided in Section
6.9(b). The Lessee shall file and re-file and record and re-record or shall
cause to be filed and re-filed and recorded and re-recorded all instruments
required to be filed and re-filed and recorded or re-recorded and shall continue
or cause to be continued the liens of such instruments for so long as any of the
Bonds shall be Outstanding.
SECTION 6.10. Arbitrage Covenant. The Issuer and the Lessee covenant
that no use of the proceeds of the Bonds or the earnings thereon will knowingly
be made or directed, and no other action will be taken, which would cause the
Bonds to be "arbitrage bonds" within the meaning of Section 148 of the Code. The
Lessee further covenants that (a) all actions with respect to the Bonds required
by Section 148(f) of the Code shall be taken, (b) it shall make the
determinations required by Section 148(f) of the Code at its own expense and
promptly notify the Trustee and the Issuer of the same, together with supporting
calculations, and (c) it shall within forty-five (45) days after the final
payment, whether upon redemption in whole or at maturity, of the Bonds, file
with the Trustee, and, at the request of the Issuer, with the Issuer, a
statement signed by the Lessee to the effect that the Lessee is then in
compliance with its covenants contained in clauses (a) and (b) of this sentence,
together with supporting calculations; provided, however, that if the Lessee
shall furnish an opinion of Bond Counsel to the Trustee and the Issuer to the
effect that no further action by the Lessee is required for such compliance with
respect to the Bonds, the Lessee shall not thereafter be required to deliver any
such statements or calculations. Notwithstanding the foregoing, the Lessee shall
(i) take such steps and provide such information to the Issuer as may be
required by the Issuer for it to meet any requirements (relating to rebate or
otherwise) required by the Code, the Internal Revenue Service, or any other
Federal or state government agency, and (ii) retain the records of any such
statements or calculations regarding rebate for six (6) years after retirement
of the last obligation of the Bonds as required by Section 148 of the Code.
SECTION 6.11. Reference to Bonds Ineffective after Bonds Paid. Upon
payment of the Bonds and upon payment of all obligations under this Agreement,
all references in this Agreement to the Bonds and the Trustee shall be
ineffective, and neither the Trustee, the Issuer nor the holders of any of the
Bonds shall thereafter have any rights
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hereunder except as provided in Section 6.6 hereof and except with regard to
payments of costs and expenses of the Trustee and the Issuer by the Lessee.
SECTION 6.12. Notification of a Bankruptcy Filing or Event of Default.
The Issuer and the Lessee shall each notify the other, the Bank, and the Trustee
within five Business Days after either of them receives notice that an Event of
Bankruptcy has occurred with respect to the Lessee or the Issuer, or after
either of them becomes aware that an Event of Default (as defined in Article
VIII) has occurred.
SECTION 6.13. Obligations Under Indenture. The Lessee covenants and
agrees to perform all of the obligations imposed on the Lessee under the
Indenture.
SECTION 6.14. Undertaking to Provide Continuing Disclosure. The Issuer
covenants to comply with Securities and Exchange Commission Rule 15c2-12, as
amended ("SEC Rule 15c2-12") to the extent applicable. The Lessee covenants to
furnish all information requested by the Issuer to comply with such SEC Rule
15c2-12. Notwithstanding any provisions in the Indenture to the contrary, no
conversion to a Fixed Rate shall be permitted unless the Trustee, the Issuer and
the Remarketing Agent shall have received, at least two (2) Business Days prior
to the proposed Conversion Date, a copy of a continuing disclosure agreement
imposing obligations upon the Lessee, the Trustee or any other responsible party
to comply with the regulations of SEC Rule 15c2-12, as it may be amended or
supplemented from time to time, with respect to the Bonds, together with such
disclosure documents as the Remarketing Agent shall require in order to comply
with such Rule.
SECTION 6.15. No Control of Bank. The Bank does not control, either
directly or indirectly through one or more intermediaries, the Lessee. Likewise,
the Lessee does not control, either directly or indirectly, through one or more
intermediaries, the Bank. "Control" for this purpose has the meaning given to
such term in Section 2(a)(9) of the Investment Company Act of 1940, as amended
and as interpreted by the Securities and Exchange Commission. (Under Section
2(a)(9), "control" means the power to exercise a controlling influence over the
management or policies of a company, unless such power is solely the result of
an official position with such company. Any Person who owns beneficially, either
directly or through one or more controlled companies, more than 25% of the
voting securities of a company shall be presumed to control such company. Any
Person who does not own more than 25% of the voting securities of any company
shall be presumed not to control such company.) The Lessee will provide written
notice to the Trustee and the Remarketing Agent thirty (30) days prior to, where
reasonable, and not more than thirty days subsequent to the consummation of any
transaction that would result in the Lessee controlling or being controlled by
the Bank.
ARTICLE VII.
ASSIGNMENT, LEASING AND SELLING
SECTION 7.1. Conditions. All or a portion of the rights, duties and
obligations of the Lessee under this Agreement may be assigned by the Lessee and
the Project may be subleased as a whole or in part by the Lessee; provided that:
(i) in the case of a sublease, Lessee shall remain obligated
hereunder; and
(ii) in the case of an assignment, the assignee assumes the
Lessee's obligations hereunder in writing, and thereafter the Lessee shall not
be released from its obligations hereunder and Lessee and its assignee shall
thereafter be jointly and severally liable for the performance of the Lessee's
obligations hereunder unless (i) the Issuer consents in writing to such release
(which consent shall not unreasonably be withheld, conditioned or delayed) and
(A) if a Letter of Credit is in effect at the time of such assignment, the Bank
consents in writing to such release and verifies that the transaction will not
affect the liability of the Bank under the Letter of Credit or (B) if no Letter
of Credit is in effect at the time of such assignment, the Holders of at least
two-thirds in aggregate principal amount of the Bonds then Outstanding consent
in writing to such assignment.
Notwithstanding the foregoing, no assignment or sublease shall be permitted
unless the Lessee shall deliver an opinion of Bond Counsel to the effect that
the sublease or assignment and any release of the Lessee from its obligations
hereunder will not cause interest on the Bonds to be includable in the gross
income of the Holders thereof for purposes of Federal income taxation.
15
SECTION 7.2. Instrument Furnished to Trustee. The Lessee shall, within
fifteen (15) days after the delivery thereof, furnish to the Issuer, the Trustee
and the Bank, if any, a true and complete copy of the agreements or other
documents effectuating any such assignment, lease or sale. In addition, prior to
the effective date of such transfer, Lessee shall deliver to the Issuer, the
Trustee and the Bank an opinion of Bond Counsel to the effect that such action
will not adversely affect the exclusion of interest on the Bonds from gross
income of the Holders thereof for Federal income tax purposes.
SECTION 7.3. Limitation. This Agreement shall not be assigned nor shall
the Project be leased or sold, in whole or in part, except as provided in this
Article VII or in Section 6.1 hereof.
ARTICLE VIII.
EVENTS OF DEFAULT AND REMEDIES
SECTION 8.1. Events of Default. Each of the following events shall
constitute and is referred to in this Agreement as an "Event of Default":
(a) Failure by the Lessee to pay when due any payment required to be
made under Section 4.1(a) and (d) hereof, which failure shall have resulted in
an "Event of Default" under clause (a), (b) or (c) of Section 9.01 of the
Indenture.
(b) Failure by the Lessee to observe and perform any covenant,
condition or agreement on its part to be observed or performed in this
Agreement, other than as referred to in Section 8.1(a) above, which failure
shall continue for a period of thirty (30) days after written notice, specifying
such failure and requesting that it be remedied, is given to the Lessee by the
Issuer or the Trustee, unless the Issuer and the Trustee shall agree in writing
to an extension of such time prior to its expiration; provided, however, if the
failure stated in the notice cannot be corrected within the applicable period,
the Issuer and the Trustee will not unreasonably withhold their consent to an
extension of such time if corrective action is instituted by the Lessee within
the applicable period and is being diligently pursued.
(c) The dissolution or liquidation of the Lessee or the filing by the
Lessee of a voluntary petition in bankruptcy, or failure by the Lessee promptly
to lift any execution, garnishment or attachment of such consequence as will
impair its ability to carry out its obligations under this Agreement, or the
entry of an order of relief in any involuntary bankruptcy proceedings against
the Lessee, or an assignment by the Lessee for the benefit of its creditors, or
the entry by the Lessee into an agreement of composition with its creditors, or
the approval by a court of competent jurisdiction of a petition applicable to
the Lessee in any proceeding for its reorganization instituted under the
provisions of any bankruptcy act, or under any similar act which may hereafter
be enacted. The term "dissolution or liquidation of the Lessee," as used in this
subsection, shall not be construed to include the cessation of the existence of
the Lessee resulting either from a merger or consolidation of the Lessee into or
with another corporation or a dissolution or liquidation of the Lessee following
a transfer of all or substantially all of its assets as an entirety, under the
conditions permitting such actions contained in Section 6.1 hereof.
SECTION 8.2. Force Majeure. The provisions of Section 8.1(b) hereof are
subject to the following limitation: if by reason of acts of God; strikes,
lockouts or other industrial disturbances; acts of public enemies; orders or
other acts of any kind of the Government of the United States or of the State,
or any other sovereign entity or body politic, or any department, agency,
political subdivision, court or official of any of them, or any civil or
military authority; insurrections; riots; epidemics; landslides; lightning;
earthquakes, volcanoes; fires; hurricanes; tornadoes; storms; floods; washouts;
droughts; arrests; restraint of government and people; civil disturbances;
explosions, breakage or accident to machinery; partial or entire failure of
utilities; or any cause or event not reasonably within the control of the
Lessee, the Lessee is unable in whole or in part to carry out any one or more of
its agreements or obligations contained herein, other than its obligations under
Sections 4.1, 6.1, 6.5, 9.3 and 9.5 hereof, the Lessee shall not be deemed in
default by reason of not carrying out said agreement or agreements or performing
said obligation or obligations during the continuance of such inability. The
Lessee agrees, however, to use its best efforts to remedy with all reasonable
dispatch the cause or causes preventing it from carrying out its agreements;
provided, that the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the Lessee, and the
Lessee shall not be required to make settlement of strikes, lockouts and other
industrial disturbances by acceding to the demands of the opposing party or
parties when such course is in the judgment of the Lessee unfavorable to the
Lessee.
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SECTION 8.3. Remedies on Default. Whenever any Event of Default
hereunder shall have happened and be continuing, any one or more of the
following remedial steps may be taken:
(a) The Issuer with the prior consent of the Trustee, or the Trustee,
may at its option, and shall, if acceleration occurs or is declared pursuant to
Section 9.02 of the Indenture, declare all unpaid amounts payable under this
Agreement, together with interest then due thereon, to be immediately due and
payable, whereupon the same shall become due and payable.
(b) The Issuer with the prior consent of the Trustee, or the Trustee,
may take any action at law or in equity to collect the payments then due and
thereafter to come due hereunder, or to enforce performance and observance of
any obligation, agreement or covenant of the Lessee under this Agreement.
Any amounts collected pursuant to action taken under this Section shall be
applied in accordance with the Indenture.
In case any proceeding taken by the Issuer or the Trustee on account of
any Event of Default shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Issuer or the Trustee, then and
in every case the Issuer and the Trustee shall be restored to their former
positions and rights hereunder, respectively, and all rights, remedies and
powers of the Issuer and the Trustee shall continue as though no such proceeding
has been taken.
SECTION 8.4. No Remedy Exclusive. No remedy conferred upon or reserved
to the Issuer or the Trustee by this Agreement is intended to be exclusive of
any other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Agreement 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 Issuer 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 may be required in this
Article.
SECTION 8.5. Agreement to Pay Attorneys' Fees and Expenses. In the
event the Lessee should default under any of the provisions of this Agreement
and the Issuer or the Trustee should employ attorneys or incur other expenses
for the collection of payments due hereunder or for the enforcement of
performance or observance of any obligation or agreement on the part of the
Lessee contained herein, the Lessee agrees that it will on demand therefor pay
to the Issuer or the Trustee, as the case may be, the reasonable fees of such
attorneys and such other reasonable expenses so incurred. In the event the
Lessee fails to pay such amount, the Trustee may, to the extent of funds
available under the Indenture, pay such fees and expenses. To the extent the
funds are insufficient to pay all of the reasonable fees and expenses, the
Trustee is authorized to pay such fees and expenses of the Issuer and Trustee
pro rata.
SECTION 8.6. Waiver of Breach. In the event that any agreement
contained herein shall be breached by either the Lessee or the Issuer and such
breach shall thereafter be 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. In view of the assignment of the Issuer's rights in and
under this Agreement to the Trustee under the Indenture, the Issuer shall have
no power to waive any default hereunder by the Lessee without the consent of the
Trustee, and the Trustee may exercise any of the rights of the Issuer hereunder.
ARTICLE IX.
PREPAYMENTS
SECTION 9.1. Optional Prepayments. The Lessee shall have, and is hereby
granted, the option to prepay all or any portion of the Basic Rent in an amount
sufficient to provide for the redemption of the Bonds, in whole or in part, at
any time by taking the actions required by the Indenture (i) to discharge the
lien thereof through the redemption, or provision for payment or redemption of
all Bonds then outstanding or (ii) to effect the redemption, or provision for
payment or redemption, of less than all Bonds then outstanding, pursuant to
Section 301(a) or 3.01(b) of the Indenture.
SECTION 9.2. Extraordinary Optional Prepayments. The Lessee shall have,
and is hereby granted, the option to prepay all or any portion of the Basic Rent
in an amount sufficient to provide for the redemption of the
17
Bonds in whole, or in certain circumstances in part, together with interest
thereon to the date of redemption of the Bonds, at any time by taking the
actions required by the Indenture for the redemption of all or a portion of the
Bonds then outstanding, on the occurrence of any of the events set forth in
Section 3.01(c) of the Indenture.
SECTION 9.3. Procedure to Exercise Options. To make a prepayment
pursuant to Sections 9.1 or 9.2, the Lessee shall give written notice not less
than 45 days from the date any Bonds are to be redeemed from such prepayment to
the Issuer and the Trustee and which shall specify therein the principal amount
to be prepaid and the date or dates on which the prepayment is to occur. If made
pursuant to Section 9.2 such prepayments of Basic Rent shall be in the amount,
which together with any other funds held by the Trustee for such purpose, are
sufficient to retire or defease all of the Bonds or, if made pursuant to Section
9.1, in the amount which, together with any other funds held by the Trustee for
such purpose, are sufficient to retire or defease the portion of the Bonds that
are to be retired or defeased (which shall not be less than a bond in a Minimum
Denomination). In addition, the Lessee shall make such additional payments as
shall be necessary to pay any redemption premium on the Bonds in connection with
such redemption and accrued interest on the Bonds to be redeemed to the date
selected for redemption.
SECTION 9.4. Mandatory Prepayment. In the event of a Determination of
Taxability, the Lessee shall be required to prepay in full the Basic Rent in an
amount sufficient to provide for the redemption of the Bonds as described in
Section 3.01(d) of the Indenture, on the date selected by the Lessee, which date
shall be not more than ninety (90) days after the Lessee shall have received
from the Trustee written notice of the occurrence of the Determination of
Taxability.
SECTION 9.5. Relative Priorities. The obligations of the Lessee under
Section 9.4 shall be and remain superior to the rights, obligations and options
of the Lessee under Sections 9.1 and 9.2.
SECTION 9.6. Prepayment to Include Fees and Expenses. Any prepayment or
purchase under this Article shall also include any expenses of prepayment or
purchase, as well as all expenses and costs provided for herein.
ARTICLE X.
MISCELLANEOUS
SECTION 10.1. Notices. Except as otherwise provided in this Agreement, all
notices, certificates or other communications shall be sufficiently given and
shall be deemed given when mailed by registered or certified mail, postage
prepaid, to the Issuer, the Lessee, the Trustee, the Bank or the Remarketing
Agent. Facsimiles of each notice, certificate or other communication given
hereunder to the Lessee shall, in addition to mailing, be telecopied to the
Lessee, and copies of each notice, certificate or other communication given
hereunder by or to the Lessee shall be mailed by registered or certified mail,
postage prepaid, to the Trustee and the Bank; provided, however, that the
effectiveness of any such notice shall not be affected by the failure to
telecopy any such facsimiles or to send any such copies. Notices, certificates
or other communications shall be sent to the following addresses:
Lessee: Absorption Corp.
0000 Xxxxxxxx Xxxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxxx, CFO
Telephone: (000) 000-0000 (ext. 3014)
Facsimile: (000) 000-0000
with a copy to: Seyfarth Xxxx LLP
0000 Xxxxxxxxx Xx. X.X.-- Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. XxXxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
18
Bank: Branch Banking and Trust Company
000 0xx Xxxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx. VP
Telephone: (487) 722 -7365
Facsimile: (000) 000-0000
Issuer: Xxxxx County Industrial Development Authority
000 Xxxxxxxxx Xxxxx Xxxxxx
X X Xxx 00
Xxxxx, XX 00000
Fax. 000-000-0000
Attention: Xxxxxxx Xxxxxx
Telephone: Toll Free (000) 000-0000
Facsimile: 000-000-0000
Trustee: Branch Banking and Trust Company, as Trustee
000 Xxxx Xxxx Xxxxxx
Xxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Corporate Trust Services
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Remarketing Agent: Xxxxx & Xxxxxxxxxxxx, Inc. t/a BB&T Capital Markets
0 Xxxxx Xxxxx Xxxxxx, 0xx Xxxxx
Mail Code 000-00-00-00
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xxx Xxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any of the foregoing may, by notice given hereunder, designate any further or
different addresses to which subsequent notices, certificates or other
communications shall be sent.
SECTION 10.2. Severability. If any provision of this Agreement shall be
held or deemed to be or shall, in fact, be illegal, inoperative or
unenforceable, the same shall not affect any other provision or provisions
herein contained or render the same invalid, inoperative, or unenforceable to
any extent whatever.
SECTION 10.3. Execution of Counterparts. This Agreement may be
simultaneously executed in several counterparts, each of which shall be an
original and all of which shall constitute but one and the same instrument;
except that, to the extent that this Agreement shall constitute personal
property under the Uniform Commercial Code of Georgia, no security interest in
this Agreement may be created or perfected through the transfer or possession of
any counterpart of this Agreement other than the original counterpart, which
shall be the counterpart containing the receipt therefor executed by the Trustee
following the signatures to this Agreement.
SECTION 10.4. Amounts Remaining in Bond Fund. It is agreed by the
parties hereto that after payment in full of (i) the Bonds (or the provision for
payment thereof having been made in accordance with the provisions of
19
the Indenture), (ii) the fees, charges and expenses of the Trustee and any
Paying Agent in accordance with the Indenture, (iii) all amounts owing to the
Bank under the Credit Agreement, and (iv) all other amounts required to be paid
under this Agreement and the Indenture, any amounts remaining in the Bond Fund
shall belong to and be paid by the Trustee to the Lessee.
SECTION 10.5. Amendments, Changes and Modifications. Except as
otherwise provided in this Agreement or the Indenture, subsequent to the initial
issuance of Bonds and prior to payment in full of the Bonds (or the provision
for payment thereof having been made in accordance with the provisions of the
Indenture), this Agreement may not be effectively amended, changed, modified,
altered or terminated nor any provision waived, without the written consent of
the Trustee.
SECTION 10.6. Governing Law. This Agreement shall be governed
exclusively by and construed in accordance with the applicable laws of the State
of Georgia.
SECTION 10.7. Authorized Lessee Representative. An Authorized Lessee
Representative shall act on behalf of the Lessee whenever the approval of the
Lessee is required or the Lessee requests the Issuer to take some action, and
the Issuer and the Trustee shall be authorized to act on any such approval or
request and neither the Issuer nor the Lessee shall have any complaint against
the other or against the Trustee as a result of any such action taken at the
direction of the Authorized Lessee Representative.
SECTION 10.8. Term of the Agreement. This Agreement shall be in full
force and effect from the date hereof and shall continue in effect so long as
any Bonds are outstanding or the Trustee shall hold any moneys under Article X
of the Indenture, whichever is later. All representations and certifications by
the Lessee as to all matters affecting the tax-exempt status of the Bonds shall
survive the termination of this Agreement.
SECTION 10.9. No Personal Liability. No covenant or agreement contained
in this Agreement shall be deemed to be the covenant or agreement of any
official, officer, agent, attorney, or employee of the Issuer or the Lessee in
his individual capacity, and no such person shall be subject to any personal
liability or accountability by reason of the issuance thereof.
SECTION 10.10. Parties in Interest. This Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Lessee and their respective
successors and assigns, and no other person, firm or corporation shall have any
right, remedy or claim under or by reason of this Agreement; provided, however,
that any obligation of the Issuer created by or arising out of this Agreement
shall be payable solely out of the revenues derived from this Agreement or the
sale of the Bonds or income earned on invested funds as provided in the
Indenture and shall not constitute, and no breach of this Agreement by the
Issuer shall impose, a pecuniary liability upon the Issuer or a charge upon the
Issuer's general credit.
SECTION 10.11. Notice to Rating Agency. Notice of the occurrence of any
of the following shall be given by the Lessee to the Rating Agency as early as
practicable: (i) the resignation or removal of the Trustee or the Remarketing
Agent and the appointment of a successor thereto; (ii) any material change in
the Indenture, this Agreement, the Letter of Credit or the Credit Agreement;
(iii) the expiration, termination, substitution or extension of the Letter of
Credit; (iv) the conversion of an Interest Rate Determination Method; and (v) a
redemption or defeasance of the Bonds.
SECTION 10.12. Applicability of Agreement to Trustee. The Lessee and
the Issuer agree that the Trustee shall be entitled to enforce and to benefit
from the terms and conditions of this Agreement that relate to it, including
without limitation Section 6.6, notwithstanding the fact that it is not a
signatory hereto and notwithstanding the provisions of Section 10.10.
SECTION 10.13. Reasonable Attorneys' Fees. Whenever the phrase
"reasonable attorneys' fees" is used herein, including without limitation
Section 6.6, it shall mean that attorneys' fees are limited to the usual and
customary rate for attorneys in such attorneys' geographical area and shall be
limited to the hours actually expended for those services.
[The remainder of this page is intentionally left blank.]
20
IN WITNESS WHEREOF, the Issuer and the Lessee have caused this
Agreement to be executed in their respective corporate names by their respective
duly authorized officers, all as of the date first above written.
XXXXX COUNTY INDUSTRIAL
DEVELOPMENT AUTHORITY
By: /s/ X. Xxxxxxxxxxx
--------------------------------------
Xxxxxx Xxxxxxxxxxx, Chairman
ATTEST:
/s/ Xxxxx Xxxx
-------------------------------------------
Xxxxx Xxxx, Secretary
(SEAL)
ABSORPTION CORP.
By: /s/ Xxxx Xxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
(SEAL)
ATTEST:
/s/ Xxxxx Xxxxxxxx
-------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Secretary
[signature page to Lease Agreement]
21
EXHIBIT A
DESCRIPTION OF PROJECT
The Project consists of the land described below, a building and the
renovation and expansion thereof, or the construction of a new building, and new
and used equipment, which is to be used for the manufacture of absorption
products.
(Tract 1, Tract 2 and Tract 3)
ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Xxx 00, 0xx Xxxx
Xxxxxxxx, originally Appling now Xxxxx County, Georgia, containing 14.11 acres,
as shown on that certain Survey Plat for Absorption Company and Branch Banking
and Trust Company prepared by Xxxxxxx X. Xxxxxx, Xx., Georgia Registered Land
Surveyor No. 1572 of Xxxxxxx X. Xxxxxx, Xx., Inc., dated June 2, 2003, last
revised August 20, 2003, and being more particularly described as follows:
BEGINNING at an iron pin found at the intersection of the southwesterly
right-of-way line of Sunset Blvd. (100 foot right-of-way) and the southeasterly
right-of-way line of South Macon Street (100 foot right-of-way);
Thence run along the southwesterly right-of-way line of Sunset Blvd. (100 foot
right-of-way) South 46 degrees 30'09" East a distance of 494.07 feet to an iron
pin found;
Thence leaving said southwesterly right-of-way line of Sunset Blvd. (100 foot
right-of-way) run South 05 degrees 04'27" East a distance of 77.20 feet to an
iron pin found;
Thence run South 43 degrees 36'10" West a distance of 445.71 feet to a point;
Thence run South 43 degrees 35'18" West a distance of 939.20 feet to a point;
Thence run North 46 degrees 27'05" West a distance of 102.57 feet to a point;
Thence run North 13 degrees 06'04" East a distance of 351.05 feet to an iron pin
found;
Thence run North 14 degrees 12'28" East a distance of 540.96 feet to an iron pin
found on the southeasterly right-of-way line of South Macon Street (100 foot
right-of-way);
Thence run North 43 degrees 04'16" East a distance of 165.40 feet to an iron pin
found;
Thence run North 43 degrees 05'07" East a distance of 495.92 feet to an iron pin
found at the intersection of the southwesterly right-of-way line of Sunset Blvd.
(100 foot right-of-way) and the southeasterly right-of-way line of South Macon
Street( 100 foot right-of-way) and the POINT OF BEGINNING.
ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Xxx 000, 0xx Xxxx
Xxxxxxxx, originally Appling now Xxxxx County, Georgia, containing 1.42 acres,
as shown on that certain Survey Plat for Absorption Company and Branch Banking
and Trust Company prepared by Xxxxxxx X. Xxxxxx, Xx., Georgia Registered Land
Surveyor No. 1572 of Xxxxxxx X. Xxxxxx, Xx., Inc., dated June 2, 2003, last
revised August 20, 2003, and being more particularly described as follows:
TO FIND THE TRUE BEGINNING, commence at an iron pin found at the intersection of
the southwesterly right-of-way line of Sunset Blvd. (100 foot right-of-way) and
the southeasterly right-of-way line of South Macon Street (100 foot
right-of-way);
Thence run along the southeasterly right-of-way line of South Macon Street (100
foot right-of-way) South 43 degrees 05'07" West a distance of 495.92 feet to an
iron pin found;
Thence run South 43 degrees 04'16" West a distance of 165.40 feet to an iron pin
found and the TRUE POINT OF BEGINNING;
Thence leaving the southeasterly right-of-way line of South Macon Street (100
foot right-of-way) run South 14 degrees 12'28" West a distance of 540.96 feet to
an iron pin found;
Thence run North 46 degrees 29'35" West a distance of 261.68 feet to an iron pin
found on the southeasterly right-of-way line of South Macon Street (100 foot
right-of-way);
Thence run North 43 degrees 08'12" East a distance of 471.77 feet to an iron pin
found and the TRUE POINT OF BEGINNING.
1
