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EXHIBIT 10.10
LEASE AGREEMENT
by and between
KALPAKJIAN, MASCIANDAR0 AND MASCIANDARO PARTNERSHIP
and
COLORADO PRIME (FLORIDA), INC.
Dated as of November 1, 1985
Prepared by & Return to
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Livermore ▇▇▇▇▇ & ▇▇▇▇, P.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, #▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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TABLE OF CONTENTS
BROWARD COUNTY, FLORIDA
(KALPAKJIAN, MASCIANDARO AND MASCIANDARO PROJECT)
LEASE AGREEMENT
ARTICLE I
DEFINITIONS, REPRESENTATIONS AND DEMISING CLAUSE
Section 1.1 Definitions .......................................................... 1
Section 1.2 Representations of the Lessor ........................................ 4
Section 1.3 Representations by the Lessee ........................................ 5
Section 1.3 Demise of the Leased Premises ........................................ 5
ARTICLE II
ACQUISITION OF THE PROJECT
Section 2.1 Agreement to Acquire ................................................. 6
Section 2.2 No Warranty of Suitability by Lessor;
Lessor Required to Complete Project in
Certain Events ....................................................... 6
Section 2.3 Lessor to Pursue Remedies Against Contractors and Subcontractors
and Their Sureties ................................................... 7
ARTICLE III
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 3.1 Duration of Term ..................................................... 8
Section 3.2 Rent ................................................................. 8
Section 3.3 Obligations of Lessee Unconditional .................................. 8
ARTICLE IV
MANAGEMENT, OPERATION, MAINTENANCE, TAXES AND INSURANCE
Section 4.1 Management, Operation, Maintenance, and Repair of Project ............ 10
Section 4.2 Taxes, Other Governmental Charges and Utility Charges ................ 10
Section 4.3 Insurance and Fidelity Bonds ......................................... 11
Section 4.4 Advances by Lessor or Trustee ........................................ 12
Section 4.5 Indemnity of Lessor .................................................. 12
ARTICLE V
PROVISIONS RESPECTING DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1 Damage and Destruction ............................................... 13
Section 5.2 Condemnation ......................................................... 14
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Section 5.3 Condemnation of Lessee-Owned Property .............................. 14
Section 5.4 Property Substituted in Project .................................... 15
ARTICLE VI
CERTAIN PROVISIONS RELATING TO ASSIGNMENT, SUBLEASING,
MORTGAGING AND THE BONDS
Section 6.1 Assignments and Subleases .......................................... 16
Section 6.2 Pledge of Lease Under Indenture; Trustee's Rights in Event
of Default; Lessee's Right to Remedy Default Under Indenture;
Amendment of Lease and Indenture ................................... 16
Section 6.3 References to Bonds Ineffective after Bonds Paid ................... 16
Section 6.4 Lease Subordinate to Mortgage ...................................... 16
ARTICLE V1I
PARTICULAR COVENANTS OF THE LESSEE
Section 7.1 General Covenants .................................................. 17
Section 7.2 Examination of Project and Books and Records of the Lessee ......... 17
Section 7.3 Special Covenants .................................................. 17
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1 Events of Default Defined .......................................... 18
Section 8.2 Remedies on Default ................................................ 18
Section 8.3 No Remedy Exclusive ................................................ 19
Section 8.4 No Additional Waiver Implied by One Waiver ......................... 19
ARTICLE IX
INTERNAL REVENUE CODE, SECTION 103
Section 9.1 Covenant with Respect to Section 103(c) of the Internal
Revenue Code ....................................................... 20
Section 9.2 Requirements of Tax Exemption ...................................... 20
ARTICLE X
MISCELLANEOUS
Section 10.1 Covenant of Quiet Enjoyment ........................................ 23
Section 10.2 Prior Agreements Cancelled ......................................... 23
Section 10.3 Execution Counterparts ............................................. 23
Section 10.4 Binding Effect ..................................................... 23
Section 10.5 Severability ....................................................... 23
Section 10.6 Article and Section Captions ....................................... 23
Section 10.7 Governing Law ...................................................... 23
Section 10.8 Notices ............................................................ 23
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THIS LEASE AGREEMENT dated as of November 1, 1985, between KALPAKJIAN,
MASCIANDARO AND MASCIANDARO PARTNERSHIP, a Florida general partnership, party of
the first part (the "Lessor" as hereinafter defined), and COLORAD0 PRIME
(FLORIDA), INC., a Florida corporation, party of the second part (the "Lessee"
as hereinafter defined),
WHEREAS, the Broward County, Florida (the "Issuer") has duly authorized
the financing of the Project (as hereinafter defined) by and at the expense of
the Lessor on the terms and conditions set forth in the Loan Agreement, Mortgage
and Security Agreement dated as of November 1, 1985, between the Lessor and the
Issuer (the "Loan Agreement") and has also authorized the lease of the Project
by the Lessor for operation by the Lessee; and the Issuer has further authorized
the issuance and sale of not exceeding $1,100,000 aggregate principal amount of
its Industrial Development Revenue Bonds, Series 1985 (Kalpakjian, Masciandaro
and Masciandaro Project) (the "Bonds" as hereinafter defined), the proceeds of
the sale of which will be loaned to the Lessor to pay the costs of acquiring,
constructing and equipping the Project as such costs are hereinafter defined;
and
WHEREAS, the Bonds are issued under and secured by a Trust Indenture
dated as of November 1, 1985 (the "Indenture"), by and between the Issuer and
▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company, N.A., as Trustee (the "Trustee" as hereinafter
defined), whereby the Issuer and the Trustee have agreed that the Trustee shall
receive the proceeds from the sale of the Bonds and disburse the same for the
cost of the acquisition, construction, equipping and installation of the
Project; and
WHEREAS, pursuant to the Loan Agreement, the Lessor has conveyed and
assigned to the Issuer all its right to receive payments pursuant to this Lease
as security for the bonds, now therefore,
WITNESSETH:
In consideration of the mutual covenants and agreements hereinafter
contained, the parties hereto hereby covenant, agree and bind themselves as
follows, to-wit:
ARTICLE I
DEFINITIONS, REPRESENTATIONS AND DEMISING CLAUSE
Section 1.1 Definitions. The following words, terms or phrases, when
used in this Lease, have the following meanings, unless the context clearly
indicates a different meaning.
"Bonds" means the Industrial Development Revenue Bonds, Series 1985
(Kalpakjian, Masciandaro and Masciandaro Project) of the Issuer and each series
thereof, issued pursuant to the Indenture, and including any Additional Bonds.
"Bond Fund" means the fund established as a trust fund under the
Indenture for the payment of the principal of and interest on the Bonds.
"Bond Year" shall mean, for each series of Bonds, the one year period
beginning on the day after the expiration of the preceding bond year. The first
bond year begins on the date of delivery of the applicable series of Bonds and
ends one year later.
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"Equipment" shall mean all personal property purchased with proceeds of
the Bonds or proceeds of Additional Bonds as defined in the Indenture or
constituting any portion of the Project, including but not limited to the
furnishings, machinery, equipment, and other tangible personal property more
particularly described in Exhibit "B" hereto.
"Improvements" shall mean the facilities to be constructed, renovated,
improved, and equipped upon the Realty in accordance with the Plans and
Specifications, including, but not limited to, an approximately 20,000 square
foot one story building, including any necessary site preparation, fencing,
paving, structures, piping, fixtures, and all other improvements.
"Indenture" means the Trust Indenture (including any indenture
supplemental thereto) between the Issuer and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company, N.A.,
as Trustee, dated as of November 1, 1985.
"Independent Architect" shall mean an architect or architectural firm
registered and qualified to practice the profession of architecture under the
laws of the State not unsatisfactory to the Trustee and not in the full-time
employment of either the Issuer or the Lessor.
"Independent Engineer" means an engineer or engineering firm registered
and qualified to practice the profession of engineering under the laws of the
State not unsatisfactory to the Trustee and not in the full-time employment of
either the Lessor or the Lessee.
"Initial Purchaser" shall mean ▇▇▇▇▇▇▇ Bank of South Florida, N.A., a
national banking association with its principal office and place of business in
the City of Pompano Beeach, Florida, the initial purchaser of the Bonds.
"Issuer" means Broward County, Florida.
"Lease" means this Lease by and between the Lessor and the Lessee and
all duly authorized supplements and amendments hereto.
"Lease Term" means the duration of the leasehold estate granted in
Section 3.1 of this Lease.
"Leased Premises" means the Realty, the Equipment, the Project and the
Improvements, less any such real estate, interests in real estate and other
rights as may be taken by the exercise of the power of eminent domain.
"Lessee" means (i) the party of the second part hereto and its
successors and assigns and (ii) any surviving, resulting or transferee entity as
permitted in Section 7.3(e) of this Lease.
"Lessor" means (i) the party of the first part hereto and its
successors and assigns and (ii) any surviving, resulting or transferee
corporation as permitted in Section 6.3 hereof.
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"Loan Agreement" means that Loan Agreement, Mortgage and Security
Agreement dated as of November 1, 1985, between the Issuer and the Lessor.
"Met Proceeds", when used with respect to the sale or other disposition
(including, but not limited to, condemnation or insured loss) of any portion of
the Leased Premises means the gross proceeds received as a result of the sale or
other disposition with respect to which that term is used remaining after
payment of all reasonable expenses (including reasonable attorneys' fees and any
extraordinary fee of the Trustee) incurred in the collection of such gross
proceeds.
"Permitted Encumbrances" means as of any particular time, (i) liens for
ad valorem taxes permitted to exist as provided in this Lease or not then
delinquent, (ii) the Indenture, the Loan Agreement (including the Mortgage
interest and Security Interest created therein) and this Lease, (iii) utility,
access or other easements and rights-of-way, party walls, agreements with
respect to common use of utilities, and restrictions and exceptions that may be
granted or are permitted under this Lease, (iv) any mechanics', laborers',
materialmen's, suppliers' or vendors' lien or right or purchase money security
interest provided that (a) payment is not yet due and payable under the contract
in question or (b) payment has been secured through posting of a bond or other
means acceptable to the Lessee, (v) such subordinate, junior and secondary
encumbrances as are permitted by the Indenture, (vi) such minor defects,
irregularities, encumbrances, easements, rights-of-way and clouds on title as
normally exist with property similar in character to the Leased Premises as do
not materially impair the use of the Leased Premises for the purpose for which
it was acquired or is held by the Lessor, and (vii) any encumbrance expressly
permitted by the Loan Agreement.
"Plans and Specifications" shall mean the plans and specifications
prepared for the Project, certified by a Borrower's Authorized Representative
and filed with the Trustee at the date of issuance of the Bonds, as the same may
be revised from time to time prior to the Completion Date in accordance with
Section 3.2 of the Loan Agreement.
"Project" shall mean industrial facilities to be acquired, constructed
and equipped on the Realty, all to be used as a regional headquarters and
distribution facility of approximately 20,000 square feet. The Project shall
include the Realty, the Improvements and the Equipment.
"Project Costs" means the items defined as "Costs" under the Loan
Agreement.
"Project Fund" means the fund established as a trust fund under the
Indenture, from which funds are to be withdrawn to acquire, construct and equip
the Project pursuant to the Plans and Specifications.
"Project Representative" means the agent of the Lessee who at the time
shall have been designated by the Lessee as Project Representative pursuant to
the provisions hereof.
"Realty" shall mean the real property described in Exhibit "A" attached
hereto.
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"Redemption Account" means the account established under the Indenture
as part of the Bond Fund to provide for the redemption or payment of the Bonds.
"Redemption Date" means the date fixed for redemption of Bonds subject
to redemption in any notice of such redemption published in accordance with the
Indenture.
"Rent" or "Monthly Rent" or "rent" or "monthly rent" each means and
includes all rental payments required by Section 3.2 hereof.
"State" means the State of Florida.
"Trustee" means the trustee at the time serving as such under the
Indenture.
"Unimproved" when used with reference to the Leased Premises means any
part or parts of the Leased Premises upon the surface of which no part of a
building or other structure rests.
Section 1.2 Representations of the Lessor. The Lessor makes the
following representations:
(a) The Lessor, prior to or concurrently with the delivery hereof, has
acquired the Realty, subject to Permitted Encumbrances, and proposes to complete
or to cause to be completed, the Improvements, the Equipment and the Project on
the Realty.
(b) In order to finance the Project, Lessor has entered into the Loan
Agreement with the Issuer, wherein the Issuer will agree to issue its Bonds and
to loan the proceeds thereof to the Lessor. The Lessor has agreed to repay such
Bond proceeds to the Issuer. Lessor has assigned the proceeds to be derived from
the leasing of the Project to the Lessee, as provided herein, to the Issuer as
security for the performance of said agreement.
(c) The Lessor's interest in this Lease is assigned and pledged and the
rents, revenues, receipts and income to be derived by the Lessor from the
leasing of the Project are by the Loan Agreement pledged and assigned to the
payment of the principal of and interest on the Bonds, and the Lessor's interest
in the Project has been by the Lessor mortgaged and conveyed to the Trustee as
security for the payment of the principal of and interest on the Bonds.
(d) The Lessor has found and determined, prior to the leasing of the
Project to the Lessee, that:
(1) The Lessee shall pay to the Trustee on behalf of the Lessor
in Federal or other immediately available funds, rent in the amount equal to the
interest, principal, and premium, if any, which may be due on the Bonds on such
date on the first day of each month during the term hereof, commencing November
1, 1985. The Lessee shall also pay to the Trustee any other amounts which will
become due and payable to the Issuer or the Trustee with respect to the Bonds on
such date.
(2) The Lessor deems it inadvisable to establish any reserve for
the maintenance of the Project or for payment of Rent.
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(3) This Lease provides for the payment to the Lessor of such
rental as, upon the basis of the foregoing determinations and findings, will be
sufficient to pay or redeem the principal of and interest on the Bonds, to pay
the fees of the Trustee for its services under this Lease and the Indenture and
as Bond Registrar and Paying Agent for the Bonds, and to pay other amounts which
will become due and payable to the Issuer or the Trustee with respect to the
Bonds.
(4) This Lease obligates the Lessee to pay for the maintenance,
insurance and taxes levied in connection with the Project as herein provided.
Section 1.3 Representations by the Lessee. The Lessee makes the
following representations:
(a) The Lessee is a duly constituted a Florida corporation and has the
power to enter into this Lease and to perform the obligations it has agreed to
perform hereunder and has duly authorized the execution and delivery of this
Lease.
(b) No capital expenditures as described in Section 103(b)(6)(D) of the
Code ("Capital Expenditures") have been paid or incurred in the three years
preceding the date of the issuance of the Bonds or will be paid or incurred in
the three years after the date of the issuance of the Bonds with respect to the
Project or any facilities which are located within the territorial limits of the
Issuer, and of which the Lessee or any Person related to the Lessee within the
meaning of Section 103(b)(6)(C) of the Code will be a "principal user,' as that
term is used in Section 103(b)(6) of the Code, the amounts of which, when added
to the aggregate amount of the Bonds and the Capital Expenditures of the Lessor
under the Lease, exceeds $10,000,000 or such higher amount as may be authorized
by the Code as applicable to the Bonds; provided, however, that to the extent
and for the purposes allowed by Section 103(b)(6)(F) of the Code, certain
Capital Expenditures shall not be taken into account in determining if such
$10,000,000 amount, as computed in accordance with this subsection (b), has been
exceeded.
(c) There are no outstanding obligations issued by any state, territory
or possession of the United States, or any political subdivision of the
foregoing, or of the District of Columbia, the proceeds of which have been or
are to be used primarily with respect to facilities located within the
territorial limits of the Issuer, and of which the Lessee or any Person related
to the Lessee within the meaning of Section 103(b)(6)(C) of the Code is a
"principal user," as that term is used in Section 103(b)(5)(6) of the Code; and
Section 1.4 Demise of the Leased Premises. The Lessor, for and in
consideration of the rents, covenants and agreements hereinafter reserved,
mentioned and contained on the part of the Lessee to be paid, kept and
performed, does hereby demise and lease to the Lessee, and the Lessee does
hereby lease, take and hire from the Lessor, the Leased Premises.
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ARTICLE II
ACQUISITION OF THE PROJECT
Section 2.1 Agreement to Acquire. From the principal proceeds derived
from the sale of the Bonds, the Lessor will pay the Cost of (a) acquiring the
Realty and (b) acquiring, constructing and installing the Improvements, the
Equipment and the Project on the Realty in accordance with the Plans and
Specifications previously approved as the same may be modified from time to time
by the mutual consent of the parties thereto and notice given to the Lessor.
The Lessor will commence the acquisition, construction and installation
of the Improvements and the Equipment as promptly as practicable, will continue
said construction, acquisition and installation with all reasonable dispatch and
will cause the Project to be substantially complete no later than May 18, 1985.
Neither the Lessor nor the Independent Architect shall make changes in
or amendments to the Plans and Specifications, construction contracts or any of
them without the Lessee's prior written consent, but shall make such changes or
amendments, including additions thereto, as the Lessee may request, provided
such changes or amendments will not change the character of the Project nor
increase the cost thereof above funds available for the completion thereof. The
Trustee shall be given at least five days' prior written notice of any
substantial changes or amendments.
The Lessor shall cause construction and installation of the Equipment
and the Improvements to be performed under a construction contract to be agreed
upon by the Lessor, the Lessee and the purchaser of the Bonds. Such construction
shall be promptly commenced and diligently pursued to substantial completion on
or before the date mentioned above (herein referred to as the "completion
date"). Any and all amounts received by the Lessor from any of the construction
contractors or other suppliers of materials and equipment, by way of damages for
breach of contract, refunds or adjustments, shall become part of and be
deposited in the Project Fund.
The Lessor will enter into, or accept the assignment of, such contracts
as the Lessee may request in order to effectuate the purposes of this Section.
Section 2.2 No Warranty of Suitability by Lessor; Lessor Required to
Complete Project in Certain Events. The Lessee recognizes that the Project will
be constructed in accordance with the Plans and Specifications. The Lessor makes
no warranty, either express or implied, or offers any assurances that the
Project will be suitable for the Lessee's purposes or needs or that the proceeds
derived from the sale of the Bonds will be sufficient to pay in full all Project
Costs. In the event the proceeds derived from the sale of the Bonds are
insufficient to pay in full all Project Costs, the Lessor shall be obligated to
complete the Project at its own expense and the Lessor shall pay any such
deficiency and shall save the Lessee whole and harmless from any obligation to
pay such deficiency. The Lessor shall not by reason of the payment of such
deficiency from its own funds be entitled to any increase in the payment of the
rents hereunder.
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Section 2.3 Lessor to Pursue Remedies Against Contractors and
Subcontractors and Their Sureties. In the event of default of any contractor or
subcontractor under any contract made by it for acquisition, construction or
installation of any part of the Project, the Lessor will promptly proceed
(subject to the Lessee's advice to the contrary), either separately or in
conjunction with others, to exhaust the remedies of the Lessor against the
contractor or subcontractor so in default and against his surety (if any) for
the performance of such contract. The Lessor will advise the Lessee of the steps
it intends to take in connection with any such default. If the Lessee shall so
notify the Lessor, the Lessee may, in its own name or in the name of the Lessor,
prosecute or defend any action or proceeding or take any other action involving
any such contractor, subcontractor or surety which the Lessee deems reasonably
necessary, and in such event the Lessor will cooperate fully with the Lessee and
will take all action necessary to effect the substitution of the Lessee for the
Lessor in any such action or proceeding. Any amounts recovered by way of
damages, refunds, adjustments or otherwise in connection with the foregoing
shall be paid into the Project Fund.
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ARTICLE III
DURATION OF LEASE TERM; RENTAL PROVISIONS
Section 3.1 Duration of Term. The term of this Lease and of the lease
herein made shall begin on November 1, 1985, and, subject to the provisions of
this Lease shall continue until November 1, 2006, but shall not in any event
expire until the term of the Loan Agreement has expired and all sums required to
be paid by the Lessor pursuant thereto have been paid. The Lessor will deliver
to the Lessee possession of the Leased Premises (or such portion or Portions
thereof as are then in existence) on the commencement date of the Lease term,
subject to the inspection and other rights reserved in this Lease, and the
Lessee will accept possession thereof at such time; provided, however, the
Lessor will be permitted such possession of the Leased Premises as shall be
necessary and convenient for it to comply with the provisions of Section 2.1
hereof; and provided further, the Lessor will be permitted such possession of
the Leased Premises as shall be necessary and convenient for it to construct or
install any Equipment, additions or Improvements and to make any repairs or
restorations required or permitted to be constructed, installed or made by the
Lessor pursuant to the provisions hereof.
Section 3.2 Rent. (a) The Lessee shall pay directly to the Trustee on
behalf of the Lessor, in Federal or other immediately available funds, Rent for
the demised premises in an amount equal to $_________ per month, provided,
however, that such Rent shall never be less than an amount equal to the
interest, principal, and premium, if any, which may be due on the Bonds on such
date on the first day of each month during the term hereof, commencing November
1, 1985. The Lessee shall also pay to the Trustee any other amounts which will
become due and payable to the Issuer or the Trustee with respect to the Bonds on
such date. The Lessee shall also pay any applicable State of Florida sales tax
on the amount of such Rent. The Rent shall be adjusted yearly to take into
effect changes in the Consumer Price Index. Such adjustment may, in the sole
discretion of the Lessor, be waived, but any such waiver shall not prevent the
Lessor from subsequently including any amount waived in a subsequent adjustment.
The Rent shall not be reduced in the event of a decline in the Consumer Price
Index. Lessee's obligation to pay Rent shall be adjusted to take into account
funds on deposit in the Bond Fund and available to pay interest on the Bonds.
(b) Rental payments have been calculated on the basis of providing funds
sufficient to pay the principal of, interest on, and premiums, if any, with
respect to the Bonds as the same mature and come due and to pay for any other
amounts which may become due and payable to the Issuer or the Trustee under the
Loan Agreement and the Indenture. The Lessee recognizes, understands and
acknowledges that it is the intention of the parties that all the Rent be
available for the purposes aforesaid. All Rent payments made by the Lessee to
the Trustee in excess of the foregoing amounts shall be considered paid for the
benefit of the Lessor. This Lease shall be construed to effectuate this intent.
The payments in the amounts set forth above shall be made irrespective of any
breach or any failure of compliance by the Lessor with any requirement of this
Lease. Rent shall be promptly made as hereinabove set forth, and any Rent not so
paid promptly on the date when due shall bear interest at the Default Rate as
defined in the Loan Agreement from the due date thereof until paid.
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Section 3.3 Obligations of Lessee Unconditional. The obligation of the
Lessee to pay the sums provided for herein, to make all other payments provided
for herein and to perform and observe the other agreements and covenants on its
part herein contained shall be absolute and unconditional, irrespective of any
rights of set-off, recoupment or counterclaim it might otherwise have against
the Lessor. The Lessee will not suspend or discontinue any such payment or fail
to perform and observe any of its other agreements and covenants contained
herein or terminate this Lease for any cause whatsoever, including, without
limiting the generality of the foregoing, failure of the Lessor to complete the
Project, any acts or circumstances that may constitute an eviction or
constructive eviction, failure of consideration or commercial frustration of
purpose, or any damage to or destruction of the Project or any part thereof, or
the taking by eminent domain of title to or the right to temporary use of all or
any part of the Project or failure of the Lessor's title to the Leased Premises
or any change in the tax or other laws or administrative rulings, actions or
regulations of the United States of America or of the State or any political or
taxing subdivision of either thereof, or any failure of the Lessor to perform
and observe any agreement or covenant, whether express or implied, or any duty,
liability or obligation arising out of or connected with this Lease.
Notwithstanding the foregoing, the Lessee may, at its own cost and expense and
in its own name or in the name of the Lessor, prosecute or defend any action or
proceeding, or take any other action involving third persons which the Lessee
deems reasonably necessary in order to secure or protect its rights of use and
occupancy and the other rights hereunder. The provisions of the first and second
sentence of this Section shall apply only so long as any part of the principal
of and the interest on the Bonds remains outstanding and unpaid.
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ARTICLE IV
MANAGEMENT, OPERATION, MAINTENANCE
TAXES AND INSURANCE
Section 4.1 Management, Operation, Maintenance and Repair of Project.
(a) The Lessee covenants and agrees to utilize the Project as a
regional headquarters facility and will comply with all applicable laws,
regulations and rules pertaining to the use and occupation of such facilities.
(b) The Lessee shall keep and maintain the Project in good repair and
operating condition and shall keep and maintain the Realty in as reasonably safe
condition as the completion of the Improvements and the operation of the Project
permits, reasonable wear and depreciation excepted, at its own expense in each
instance. The Lessee shall pay all gas, electric light and power, water, sewer
and all other charges for the operation, maintenance, use and upkeep of the
Leased Premises. The Lessee shall from time to time make all needful and proper
repairs, renewals and replacements to the Leased Premises. The Lessee shall have
the right, at its own expense, to make any alterations or improvements in the
Project, provided that neither the value of the Project nor its utility for the
purpose intended is thereby impaired. Any such alterations or improvements may,
at the option of the Lessee, be removed by the Lessee at any time with proper
restoration of the Project.
Section 4.2 Taxes, Other Governmental Charges and Utility Charges. The
Lessee will pay, as the same respectively become due, (i) all ad valorem
taxation by the State or by any political subdivision thereof or special
district therein and all other taxes, assessments and governmental charges of
any kind whatsoever, (other than the Lessor's income taxes) that may at any time
be lawfully assessed or levied against or with respect to the Project or any
personal property installed or brought by the Lessee on the Leased Premises
(including, without limiting the generality of the foregoing, any taxes levied
upon or with respect to the income or profits of the Lessee from the Project and
any other taxes levied upon or with respect to the Project which, if not paid,
will become a lien on the Project prior to or on a parity with the lien of the
Loan Agreement and including any ad valorem taxes assessed upon the Project),
(ii) all utility and other charges incurred in the operation, maintenance, use,
occupancy and upkeep of the Project, and (iii) all assessments and charges
lawfully made by any governmental body for public improvements that may be
secured by a lien on the Project; provided, that with respect to special
assessments or other governmental charges that may lawfully be paid in
installments over a period of years, the Lessee shall be obligated to pay only
such installments as are required to be paid during the Lease Term. The Lessee
may, at its own expense and in its own name and behalf or in the name and behalf
of the Lessor, in good faith contest any such taxes, assessments and other
charges and, in the event of any such contest, may permit the taxes, assessments
or other charges so contested to remain unpaid during the period of such contest
and any appeal therefrom unless by such action the title of the Lessor to any
part of the Project shall be materially endangered or the Project or any part
thereof shall become subject to loss or forfeiture, or unless the Trustee
objects to the withholding of payment, in which event such taxes, assessments or
charges shall be paid forthwith by the Lessee. The Lessor will cooperate fully
with the Lessee in any such contest.
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Section 4.3 Insurance and Fidelity Bonds. The Lessee shall, at its
expense, provide or cause to be provided continuously from the effective date of
this Lease, unless otherwise herein stated, the following insurance coverage:
(a) Insurance against loss and/or damage to the Project under a policy
or policies in form and amount covering such risks as are ordinarily insured
against by owners of similar buildings, including, without limiting the
generality of the foregoing, fire and uniform standard extended coverage and
vandalism and malicious mischief endorsements, limited only as may be provided
in the standard form of such endorsements at the time in use in the State. Such
insurance shall cover the Project even during the construction of the
Improvements to the extent and in the manner provided in the Plans and
Specifications and shall insure the Lessor, Lessee, Issuer and Trustee, as their
interests appear. Such insurance shall be for the amount of (i) the full
replacement value (less the value of the land) of the Project, or (ii) the
amount required by the Trustee to be carried pursuant to the Loan Agreement,
whichever is the greater. No policy of insurance shall be so written that the
proceeds thereof will produce less than the minimum coverage required by the
preceding sentence.
(b) Comprehensive general public liability and landlord's liability
insurance, protecting the Lessor, Lessee, Issuer and Trustee as their interests
may appear, against liability for injuries to persons and/or property, occurring
on the Realty or in or about the Project, in the minimum amount of $1,000,000
liability to any one person for personal injury, $1,000,000 liability to any one
person for property damage and $1,000,000 liability for any one accident. Such
insurance shall cover the Leased Premises to the extent and as provided in the
Loan Agreement.
(c) Worker's compensation insurance respecting all employees of the
Lessee in such amount as is required by law; provided that the Lessee may be
self-insured with respect to all or any part of its liability for worker's
compensation to the extent permitted by law.
Each policy of insurance shall be issued by a recognized, responsible
insurance company, qualified under the laws of the State to assume the risks
covered by such policy or policies and against which neither the Trustee nor the
Lessor nor the Issuer shall make any reasonable objection.
All policies of insurance required under subparagraph (a) above shall
be for the benefit of the Lessor, the Lessee, the Issuer and the Trustee, as
their respective interests may appear, shall be made payable to the Trustee, and
shall be deposited with the Trustee and shall be noncancellable by the insurer
except on thirty (30) days notice to the Trustee. The Trustee shall have the
exclusive right to receive the proceeds from such insurance and receipt for
claims thereunder subject to application thereof pursuant to Article V hereof.
All policies evidencing the insurance required to be carried by this
Section shall be deposited with the Trustee. Evidence of renewal of all such
policies shall be furnished to the Trustee no less than thirty (30) days prior
to the expiration of any such policy.
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Section 4.4 Advances by Lessor or Trustee. In the event that the
Lessee fails to pay the premiums on policies to provide the full insurance
coverage required by this Lease, fails to pay the taxes and other charges
required to be paid by the Lessee at or prior to the time they are required to
be paid, or fails to keep the Project in good order and repair and in as
reasonably safe condition as its operations permit, the Lessor, the Issuer or
the Trustee, after first notifying the Lessee of any such failure on its part,
may (but shall not be obligated to) pay the premiums on such insurance, pay such
taxes or other charges, or make such repairs, renewals and replacements as may
be necessary to maintain the Project in as reasonably safe condition as the
Lessee's operations permit and the Project in good order and repair,
respectively. All amounts so advanced therefor by the Lessor, Issuer or the
Trustee shall become an additional obligation of the Lessee to the Lessor or the
Issuer or the Trustee, as the case may be, which amounts, together with interest
thereon at the Default Rate as defined in the Loan Agreement from the date
thereof, the Lessee will pay. Any remedy herein vested in the Lessor or the
Issuer or the Trustee for the collection of the rental payments shall also be
available to the Lessor, the Issuer and the Trustee for the collection of all
such amounts so advanced.
Section 4.5 Indemnity of Lessor. The Lessor shall not be liable for,
and the Lessee shall defend, indemnify and hold the Lessor harmless against, any
claims arising out of a default by Lessee under this Lease or any loss or damage
to property or any injury to or death of any person that may be occasioned on
account of any defect in the Project even if such defect existed prior to the
delivery of possession of the Project to the Lessee, including any expenses
necessarily incurred by the Lessor in connection with the defense of any claim
against it arising out of any such loss, damage, injury or death, to the extent
permitted by law. The Lessee will provide for and insure in the public liability
policies required in Section 4.3 hereof, not only its own liability in respect
of the matters there mentioned but also the liability herein assumed. The Lessor
will not, without the prior written consent of the Lessee, settle or consent to
the settlement of any prospective or pending litigation for which the Lessee is
obligated under the provisions of this Section to indemnify the Lessor.
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ARTICLE V
PROVISIONS RESPECTING DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1 Damage and Destruction. If the Project is destroyed (in
whole or in part) or is damaged by fire or other casualty to such extent that
the claim for loss resulting from such destruction or damage is not greater than
$100,000, the Lessee will continue to pay the Rent required to be paid
hereunder, and will promptly give written notice of such damage and destruction
to the Trustee, the Issuer and the Lessor. The Lessor will cause the Trustee to
release to the Lessee the Net Proceeds of insurance resulting from claims for
such losses, and the Lessee (i) will promptly repair, rebuild or restore the
property damaged or destroyed to substantially the same condition as it existed
prior to the event causing such damage or destruction, with such changes,
alterations and modifications (including the substitution and addition of other
property) as may be desired by the Lessee and as will not impair either the
value of the Project or its utility for the purpose for which it is held by the
Lessor, and (ii) will apply for such purpose so much as may be necessary of any
Net Proceeds of insurance resulting from claims for such losses, as well as any
additional moneys of the Lessee necessary therefor. If the cost of such repairs,
rebuilding and restoration are less than the amount of Net Proceeds of the
insurance referable thereto, the excess of such Net Proceeds shall be paid to
the Trustee or if the Bonds are fully paid, shall be paid to the Lessor.
If the Project is destroyed (in whole or in part) or is damaged by
fire or other casualty to such extent that the claim for loss resulting from
such destruction or damage is in excess of $100,000, the Lessee will promptly
give written notice of such damage and destruction to the Trustee and the
Lessor. In such event, the Lessor may terminate this Lease, provided all
outstanding Bonds are redeemed. If the Lessor does not elect to terminate the
Lease then the Lessee will continue to pay the Rent required to be paid
hereunder. All Net Proceeds of insurance resulting from claims for such losses
shall be paid to the Trustee and deposited in the Project Fund, whereupon (i)
the Lessor will proceed promptly to repair, rebuild or restore the property
damaged or destroyed to substantially the same condition as it existed prior to
the event causing such damage or destruction, with such changes, alterations and
modifications (including the substitution and addition of other property) as may
be desired by the Lessee and as will not impair either the value of the Project
or its utility for the purpose for which it is held by the Lessor and (ii) the
Lessor will cause withdrawals to be made from the Project Fund in the manner
provided in the Loan Agreement to pay the costs of such repair, rebuilding or
restoration, either on completion thereof, or as the work progresses. The
balance, if any, of the Net Proceeds in the Project Fund remaining after the
payment of all of the costs of such repair, rebuilding or restoration shall be
paid into the Bond Fund, or if the Bonds are fully paid, shall be paid to the
Lessor.
In the event the Net Proceeds of insurance are not sufficient to pay
in full the costs of repairing, rebuilding and restoring the Project as provided
in this Section, the Lessor will nonetheless complete the work thereof and will
pay that portion of the costs thereof in excess of the amount of said proceeds
or will pay to the Trustee for the account of the Lessor the moneys necessary to
complete said work, in which case the Lessor will proceed so as to complete said
work.
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Section 5.2 Condemnation. In the event that title to, or the temporary
use of, the Project or any part thereof shall be taken under the exercise of the
power of eminent domain, the Lessee shall be obligated to continue to make the
rental payments required to be paid under this Lease, and the entire Net
Proceeds hereinabove referred to shall be applied in one or more of the
following ways as shall be directed in writing by the Lessor:
(a) To the restoration of the remaining Improvements located on the
Realty to substantially the same condition as they existed prior to the exercise
of the said power of eminent domain.
(b) To the acquisition, by construction or otherwise, by the Lessor of
other lands or Improvements suitable for the Lessee's operations at the Project
which land or improvements shall be deemed a part of the Project and available
for use and occupancy by the Lessee without the payment of any Rent other than
herein provided to the same extent as if such land or other Improvements were
specifically described herein and demised hereby and which land or Improvements
shall be acquired by the Lessor subject to no liens or encumbrances prior to the
lien of the Loan Agreement.
(c) To the redemption of Bonds including accrued interest thereon to
the date of redemption and the applicable premium, provided, that no part of any
such Net Proceeds (other than the Net Proceeds awarded to the Lessee for the
taking of all or any part of the leasehold estate of the Lessee created by this
Lease) may be applied to the redemption of Bonds unless (1) all of the Bonds
are to be redeemed or (2) in the event that less than all of the Bonds are to
be redeemed, the Lessee has furnished to the Lessor and the Trustee a
certificate of an Independent Engineer stating (i) that the part of the Project
that was taken by such condemnation proceedings is not essential to the Lessee's
use or occupancy of the Project, or (ii) that the Project has been restored to a
condition substantially equivalent to its condition prior to the taking by such
condemnation proceedings or (iii) that land or other Improvements have been
acquired which are suitable for the Lessee's operations at the Project as
contemplated by the foregoing subsection (b) of this Section.
Any balance of such Net Proceeds remaining after the application
thereof as provided in subsections (a), (b) and (c) of this Section shall be
paid into the Bond Fund or if the Bonds are fully paid, to the Lessor.
The Lessee shall cooperate fully with the Lessor in the handling and
conduct of any prospective or pending condemnation proceeding with respect to
the Project or any part thereof and will, to the extent it may lawfully do so,
permit the Lessor to litigate in any such proceeding in the name and behalf of
the Lessee. In no event will the Lessee settle, or consent to the settlement of,
any prospective or pending condemnation proceeding-without the prior written
consent of the Lessor.
Section 5.3 Condemnation of Lessee-Owned Property. The Lessee shall be
entitled to the Net Proceeds of any award or portion thereof made for damage to
or takings of its own property not included in the Project, provided that any
Net Proceeds resulting from the taking of all or any part of the leasehold
estate of the Lessee created by this Lease shall be paid and applied in the
manner provided in the foregoing Section 5.2 of this Lease.
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Section 5.4 Property Substituted in Project. All property required
by the provisions of this Article V to be substituted and/or added to the
Project for the purpose of restoring the same to a condition substantially
equivalent to its condition prior to any damage, destruction or taking under the
exercise of the power of eminent domain, or to a condition fully adequate for
the Lessee's operation at the Project, shall become a part of the Project. All
such property shall be subject to all the terms and conditions of this Lease and
the Agreement, including the creation of a security interest therein or a
mortgage thereon in favor of the Issuer. Lessee shall execute all documents
reasonably requested by the Trustee or the Lessor for the purpose of continuing
the security contemplated hereby.
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ARTICLE VI
CERTAIN PROVISIONS RELATING TO ASSIGNMENT, SUBLEASING,
MORTGAGING AND THE BONDS
Section 6.1 Assignments and Subleases. The Lessee shall not transfer
or assign this Lease, without the prior written consent of the Lessor and the
Trustee (which shall not be unreasonably withheld). Nor will the Lessee permit
or suffer any lien or encumbrance (other than Permitted Encumbrances) to attach
to the Leased Premises or remain undischarged, without the prior written consent
of the Trustee, at any time when any Bonds are Outstanding (as defined in the
Loan Agreement). Each transfer, assignment, encumbrance and each sublease of the
Project or any part thereof, unless such written consent be first obtained,
shall be null and void, at the option of the Lessor, but no transfer,
assignment, encumbrance or sublease, whether or not consented to, shall operate
to release the Lessee from any liability for Rent or from any other of the
conditions, obligations, agreements and covenants of this Lease.
Section 6.2 Pledge of Lease Under Indenture; Trustee's Rights in
Event of Default; Lessee's Right to Remedy Default Under Indenture; Amendment of
Lease and Indenture. The Lessor shall pledge and assign this Lease to the Issuer
for further assignment to the Trustee as security for the Bonds under and
pursuant to the Indenture and, in the event of a default, the Trustee shall have
all rights and remedies herein accorded to the Lessor as well as those accorded
to the Trustee. The Trustee shall have the right to make any election which the
Lessor has the right to make upon an event of default under this Lease and to
exercise any remedy herein provided for the Lessor in the name and on behalf of
the Lessor, and the decision or action of the Trustee in respect of any such
election upon an event of default shall supersede and control that of the Lessor
so long as the Bonds are outstanding. Whenever the Bonds shall have been paid in
full, all rights and remedies in the event of default shall be exclusively those
of the Lessor. The Lessee shall have the privilege of remedying any default by
the Lessor under the Loan Agreement within the time permitted by the Loan
Agreement. Prior to the payment in full of the Bonds, the Lessor and the Lessee
shall have no power to modify, alter, amend or terminate this Lease without the
prior written consent of the Trustee and then only as provided in the Indenture.
The Lessor will not amend the Indenture or any indenture supplemental thereto
without the prior written consent of the Lessee. Neither the Lessor nor the
Lessee will unreasonably withhold any consent herein or in the Indenture
required of either of them.
Section 6.3 References to Bonds Ineffective after Bonds Paid. Upon
full payment of the Bonds, all references in this Lease to the Bonds, the
Indenture and the Trustee shall be ineffective and neither the Trustee nor the
holders of any of the Bonds shall thereafter have any rights hereunder, saving
and excepting those that shall have theretofore vested.
Section 6.4 Lease Subordinate to Mortgage. This Lease shall be deemed
to be subordinate to the Mortgage of the Leased Premises granted to the Issuer
by the Lessor pursuant to Section 4.6 of the Loan Agreement.
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ARTICLE VII
PARTICULAR COVENANTS OF THE LESSEE
Section 7.1 General Covenants. The Lessee will not do or permit
anything to be done on or about the Leased Premises that will affect, impair or
contravene any policies of insurance that may be carried on the Leased Premises
or any part thereof against loss or damage by fire, casualty or otherwise. The
Lessee will, in the use of the Leased Premises and the public ways abutting the
same, comply with all lawful requirements of all governmental bodies; provided,
however, the Lessee may, at its own expense in good faith contest the validity
or applicability of any such requirement.
Section 7.2 Examination of Project and Books and Records of the Lessee.
The Trustee, the Issuer, the Lessor and their agents and attorneys shall have
the right at their own expense and at all reasonable times to enter upon,
examine, inspect and photograph the Leased Premises; and in the event of default
as hereinafter provided, the Trustee, the Issuer, the Lessor and their
respective agents, attorneys and accountants shall have access to and the right
to inspect, examine and make copies of the books and records, accounts, data,
and all or any other records or information of the Lessee, other than
information required by law to be maintained as confidential or not bearing any
relationship to the obligations assumed under this Lease.
Section 7.3 Special Covenants. So long as any of the Bonds are out-
standing.
(a) The Lessee shall install and maintain proper books of record and
account in which full and correct entries shall be made in accordance with
standard accounting practice, of all business and affairs of the Project. The
Lessee shall furnish to the Lessor and the Trustee the following financial
statements, financial data and certificates:
(i) the financial statements, data and certificates specified in
Section 8.3 of the Loan Agreement.
(ii) With reasonable promptness such other financial data as may
be demonstrated to be necessary to protect the interest of the Lessor,
(iii) Lessee will supply quarterly accounts receivable agings
and inventory listings within 90 days of the end of each quarter of its fiscal
year.
(b) The Lessee will duly pay and discharge all taxes, assessments
and other governmental charges and liens lawfully imposed on the Lessee and upon
the properties of the Lessee, provided, however, the Lessee shall not be
required -to pay any taxes, assessments or other governmental charges so long as
in good faith it shall contest the validity thereof by appropriate legal
proceedings.
(c) Lessee covenants that it will prepare, file or record all
filings and recordings necessary to perfect and maintain the lien herein
granted, and will furnish to the Trustee an opinion of counsel on or before
November 1 of each year, commencing November 1, 1986, indicating that such
recordings and filings have been duly made.
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ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.1 Events of Default Defined. The following shall be events of
default under this Lease and the terms "event of default" or "default" shall
mean, whenever they are used in this Lease, any one or more of the following
events:
(a) Failure to make any installment of Rent that has become due and
payable by the terms of this Lease.
(b) Failure by the Lessee to observe and perform any covenant,
condition or agreement on its part to be observed or performed, other than as
referred to in subsection (a) of this Section, for a period of thirty (30) days
after written notice, specifying such failure and requesting that it be
remedied, given to the Lessee by the Lessor or the Trustee, unless the Lessor
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 Lessor and the Trustee will not
unreasonably withhold their consent to an extension of such time if corrective
action is instituted by the Lessee promptly upon receipt of the written notice
and is diligently pursued until the default is corrected.
(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 on its operations, the Lessee's seeking of or
consenting to or acquiescing in the appointment of a receiver of all or
substantially all its property or of the Project, or the commission by the
Lessee of any act of bankruptcy, or adjudication of the Lessee as a bankrupt, or
any 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 as having been filed in good faith of a
petition applicable to the Lessee in any proceeding for its reorganization
instituted under the provisions of the general bankruptcy act, as amended, or
under any similar act which may hereafter be enacted.
(d) An Event of Default under the Indenture which has the effect of
accelerating payment of the Bonds.
Section 8.2 Remedies on Default. Whenever any such event of default
shall have happened and be continuing, the Lessor or the Trustee may take any of
the following remedial steps:
(a) Terminate this Lease, exclude the Lessee from possession of the
Leased Premises and, if the Lessor or Trustee elect so to do, lease the same for
the account of the Lessee, holding the Lessee liable for all Rent due up to the
date such lease is made for the account of the Lessee and for the difference in
the Rent and other amounts payable by a successor lessee and the Rents and other
amounts payable by the Lessee hereunder;
(b) Take whatever action at law or in equity may appear necessary or
desirable to collect the Rent then due, whether by declaration or otherwise, or
to enforce any obligation or covenant or agreement of the Lessee under this
Lease or by law.
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Section 8.3 No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Lessor or the Trustee is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be cumulative
and shall be in addition to every other remedy given under this Lease or now or
hereafter existing at law or in equity or by statute. No delay or omission to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver thereof but any such right
or power may be exercised from time to time and as often as may be deemed
expedient.
Section 8.4 No Additional Waiver Implied by One Waiver. In the event
any agreement contained in this Lease should be breached by either party and
thereafter waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive any other breach
hereunder.
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ARTICLE IX
INTERNAL REVENUE CODE, SECTION 103
Section 9.1 Covenant with Respect to Section 103(c) of the Internal
Revenue Code. The parties hereto recognize that the Bonds are being sold on the
basis that the interest payable on the Bonds is excludable from gross income of
the holder thereof under Section 103 of the Internal Revenue Code of 1954, as
amended. The Lessor and the Lessee do each hereby covenant and agree for the
benefit of the Trustee and the holders of the Bonds that the proceeds of the
Bonds shall not be used or applied in such manner as to constitute any Bond an
"arbitrage bond" as that term is defined in Section 103(c) of the Internal
Revenue Code.
Section 9.2 Requirements of Tax Exemption. The Issuer has elected that
Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended (the
"Code") shall apply to the Bonds. The Lessee covenants and agrees that, unless
no Bonds shall remain outstanding under the terms of the Indenture, it will not
make or permit any capital expenditures to be made or any other action to be
taken by it or a corporation owned by it or in common control with it which will
cause the interest on the Bonds to be included in the gross income of the
holders of the Bonds (other than a holder who is a "substantial user" or
"related person" as defined in Section 103(b)(13) of the Code).
(1) The Lessee shall attach to its income tax return for the current
taxable year a copy of the statement of the Issuer electing to have the
provisions of Section 103(b)(6)(D) of the Code apply to the Bond; and
(2) for each applicable taxable year which includes all or any portion
of the three-year period following issuance and delivery of the Bond, the Lessee
shall file a supplemental statement ▇▇▇▇▇▇ by date and amount any capital
expenditures paid or incurred subsequent to the date of issuance and delivery of
the Bond which are required to be taken into account by Section 103(b)(6)(D) of
the Code. Each statement shall be filed with the respective Internal Revenue
Service district director or director of the regional service center with whom
the federal income tax return of the Borrower and of any other principal user of
the Project, as "principal user" is utilized in Section 103(b)(6)(D) of the
Code, is required to be filed on the due date prescribed for filing such return
(without regard to any extensions of time). A copy of each statement shall also
be filed at the same time with the Trustee.
The Lessee agrees that it will prepare and file, with copies to the
Trustee, any statements required to be filed by it in order to maintain the tax
exempt status of the interest on the Bonds, including, without limiting the
foregoing, the supplemental statements required to be filed by Treasury
Regulations Section 1.103-10(b)(2)(vi)(c), until such requirement is withdrawn
or modified.
The Lessee shall not permit the Bond proceeds to be used in any manner,
nor shall it make any expenditures with respect to the Project or perform or
permit any act, which would cause the Bond to fail to meet the requirements of
Section 103(b)(14) of the Code.
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An event of taxability ("Event") shall mean the incurring of capital
expenditures in excess of those permitted in Section 103(b)(6)(D) of the Code or
the taking of any other action by the Lessee, or a related person (including the
Lessor) which has the effect of causing the interest payable on the Bonds to
become includable in the gross income of the holders of the Bonds (other than a
holder who is a "substantial user" or a "related person" as such terms are used
in Section 103(b)(13) of the Code).
A "Determination of Taxability" shall mean (a) the receipt by the
Borrower of notice of the issuance by the internal Revenue Service of a
technical advice memorandum or a statutory notice of deficiency (which notice
shall include a copy of such statutory notice of deficiency) which holds in
effect that the interest payable on any of the Bonds is includable in the gross
income of the taxpayer named therein (other than a holder who is a "substantial
user" of the Project or a "related person," as such terms are defined in the
Code) as a result of either the limit described in Section 103(b)(6)(D) of the
Code having been exceeded or the Bonds having become arbitrage bonds within the
meaning of Section 103(c)(2) of the Code or (b) the issuance of a public or
private ruling of the Internal Revenue Service to the effect that the interest
payable on the Bonds is includable in the gross income for federal income tax
purposes of the holders thereof (other than the holder who is a "substantial
user" or a "related person" within the meaning of Section 103(b)(13) of the
Code) and for either of the reasons set forth in (a) above, provided that such
ruling or technical advice memorandum shall have been requested by a holder of
the Bonds and the Lessee shall have been afforded an opportunity to participate
in the request for ruling or technical advice or (c) the delivery to the Trustee
of a written statement signed by the Lessee to the effect that the Lessee has
exceeded the maximum amount of capital expenditures permitted under Section
103(b)(6)(D) of the Code or (d) receipt by the Trustee of an opinion of counsel,
to the effect that the interest on such Bond has become includable in the gross
income of the holder thereof for the purposes of federal income taxation by
reason of a final determination by a federal court of competent jurisdiction
that the interest payable on any Bond in the hands of a holder other than a
"substantial user" or a "related person," as such terms are defined in the Code,
has, for any reason, become includable in the gross income of such holder for
the purposes of federal income taxation. For purposes of a Determination of
Taxability under part (a), (b) or (c) of this paragraph, such a Determination
of Taxability shall be deemed for all purposes of this Agreement to have
occurred on the date borne by said statutory notice of deficiency, the date
borne by the public or private ruling or technical advice memorandum, or the
date borne by said statement, as the case may be.
Rent shall be paid by the Lessee to the Trustee to be applied to the
account of the Lessor against payments due under the Loan Agreement upon the
occurrence of a Determination of Taxability in an amount equal to the sum of the
following:
(i) The principal amount of all Bonds then outstanding, plus accrued
interest to the date of redemption, plus a premium equal to the difference in
interest due as stated on the Bonds and the amount which would have been due
during the period between the date of the Event and the Redemption Date had the
Bonds been payable at a rate equal to the Prime Rate plus one percent per annum,
plus an additional amount equal to the interest paid or payable on such Bonds
which is includable in the gross income of a holder of the Bonds, plus all
interest and penalties levied on such holder with respect to the Bonds. If upon
the date of redemption there shall be on deposit in the Bond Fund and other
funds established under the Indenture the total amount required by this
paragraph
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such amount shall constitute total compensation due such outstanding Bonds and
the holders of such Bonds as a result of the occurrence of an Event and in
satisfaction of the Lessee's obligations hereunder.
(ii) An amount equal to the premium (as calculated above) for each of
the Bonds not then outstanding but which was outstanding at the time of the
Event based upon the time elapsed between the date of the Event and the date
that such Bond was paid or redeemed. Such amount shall be held and disbursed by
the Trustee as provided in Section 9.1 of the Indenture and shall constitute
total compensation due such Bonds and the holders of such Bonds as a result of
the occurrence of an Event and in satisfaction of the Lessee's obligations
hereunder.
The obligation of the Lessee to pay the amounts required to be paid in
this Section 9.2 provided herein shall survive the termination of this
Agreement.
The Lessee shall give prompt written notice to the Issuer and the
Trustee of (a) the filing by the Lessee of any supplemental statement and (b)
its receipt of any oral or written advice from the Internal Revenue Service that
an Event shall have occurred.
Provided there has been deposited with the Trustee the total amount as
required, such amount shall constitute the total rent due under this Lease and
the Lessee shall not be deemed to be in default under this Lease by reason of
the occurrence of such Determination of Taxability and Event.
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ARTICLE X
MISCELLANEOUS
Section 10.1 Covenant of Quiet Enjoyment. So long as the Lessee
performs and observes all the covenants and agreements on its part herein
contained, it shall peaceably and quietly have, hold and enjoy the Leased
Premises during the Lease Term subject to the terms and provisions hereof.
Section 10.2 Prior Agreements Cancelled. This Lease shall completely
and fully supersede all other prior agreements, both written and oral, between
the Lessor and the Lessee relating to the acquisition and construction of the
Project and the leasing of the Leased Premises. Neither the Lessor nor the
Lessee shall hereafter have any rights under any such prior agreements but shall
look solely to this Lease for definition and determination of all their
respective rights, liabilities and responsibilities relating to the Project.
Section 10.3 Execution Counterparts. This Lease 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.
Section 10.4 Binding Effect. This Lease shall inure to the benefit of,
and shall be binding upon, the Lessor, the Lessee and their respective
successors and assigns.
Section 10.5 Severability. In the event any provision of this Lease
shall be held invalid or unenforceable by any court of competent jurisdiction,
such holding shall not invalidate or render unenforceable any other provision
hereof.
Section 10.6 Article and Section Caption. The Article and Section
headings and captions contained herein are included for convenience only and
shall not be considered a part hereof or affect in any manner the construction
or interpretation hereof.
Section 10.7 Governing Law. This Lease is made and entered into under,
and shall be construed in accordance with, the laws of the State.
Section 10.8 Notices. All notices, certificates or other communications
hereunder shall be sufficiently given and shall be deemed given when delivered
or mailed by registered or certified mail, postage prepaid, addressed as
follows: if to the Lessor __________________________________________; to the
Lessee_______________________________; if to ----------------------- Trustee
at the address the specified in the Indenture.
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IN WITNESS WHEREOF, the Lessor and the Lessee have caused this Lease to
be executed in their respective names, the day and year first above written.
KALPAKJIAN, MASCIANDARO AND
MASCIANDAR0 PARTNERSHIP
By: /s/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
------------------------------
Its:
WITNESSES:
/s/▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------
/s/▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------
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COLORADO PRIME (FLORIDA), INC.
By: /s/ILLEGIBLE
---------------------------
President
ATTEST:
By:/s/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------
-25-
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇ this l8th day of November, 1985, before me, the undersigned notary
public, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ who acknowledged himself to be a
partner of Kalpakjian, Masciandaro and Masciandaro Partnership, the Lessor
described in the foregoing Lease Agreement, and that being authorized to do so
executed the foregoing Lease Agreement, on behalf of the Lessor, for the
purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 18th
day of November, 1985.
(SEAL) /s/▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Notary Public, State or Florida
My commissions expires:
-26-
▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇
▇▇ this 18th day of November, 1985, before me, the undersigned notary
public, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇, the Secretary of Colorado Prime
(Florida), Inc., the Lessee described in the foregoing Lease Agreement, and that
as such officer being authorized to do so executed the foregoing Lease
Agreement, on behalf of the Lessee, for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 18th
day of November, 1985.
(SEAL) /s/▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Notary Public, State or Florida
My commission expires:
---------------------------------
STATE OF NEW YORK
COUNTY OF SUFFOLK
-------
On this 18th day of November, 1985, before me, the undersigned notary
public, personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, the President of Colorado Prime
(Florida), Inc., the Lessee described in the foregoing Lease Agreement, and that
as such officer being authorized to do so executed the foregoing Lease
Agreement, on behalf of the Lessee, for the purposes therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 18th
day of November, 1985.
(SEAL) /S/▇▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Notary Public, State of New York
My commission expires:
---------------------------------
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31
ASSIGNMENT TO BROWARD COUNTY, FLORIDA
For value received the undersigned hereby Sells, assigns and transfers
unto the Broward County, Florida, the foregoing Lease Agreement and the right to
receive all payments thereunder this 18th day of November, 1985.
KALPAKJIAN, MASCIANDAR0 AND
MASCIANDAR0 PARTNERSHIP
/S/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
---------------------------------
Partner
STATE OF FLORIDA
COUNTY OF BROWARD
On this 18th day of November, 1985, before me, the undersigned notary
public personally appeared ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ , who acknowledged himself to be a
partner of Kalpakjian, Masciandaro and Masciandaro Partnership, the Assignor
described in the foregoing Assignment, and that being authorized to do so
executed the foregoing Assignment, on behalf of the Assignor, for the purposes
therein contained.
IN WITNESS WHEREOF, I hereunto set my hand and official seal this 18th
day of November, 1985.
(SEAL) /s/▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Notary Public, State or Florida
My commission expires:
---------------------------------
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32
ASSIGNMENT TO TRUSTEE
For value received the undersigned hereby sells, assigns and transfers
unto ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company, N.A., as Trustee, the above Lease Agreement
and all rights thereunder, pursuant to that certain Trust Indenture between
Broward County, Florida and ▇▇▇▇▇▇▇ ▇▇▇▇▇ Trust Company, N.A., dated as of
November 1, 1985.
BROWARD COUNTY, FLORIDA
By:/s/ILLEGIBLE
------------------------------
Vice Chairman, Board of County
Commissioners
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33
EXHIBIT A
The "Realty"
LEGAL DESCRIPTION
1, 2, 3, 4 and 5 and 10 feet of Lot No. 6 of Pompano Industrial Park, according
to the Plat thereof, recorded at Plat Book 102, Page 5 of the Public Records of
Broward County.
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AMENDMENT TO LEASE AGREEMENT
This First Amendment to Lease Agreement "First Amendment", dated as of
December 26, 1986 for reference purposes only is made by and between Kalpakjian,
Masciandaro and Masciandaro partnership, a Florida general partnership
("Lessors") and Colorado Prime (Florida), Inc., a Florida corporation
("Lessee").
R E C I T A L S
WHEREAS, Landlord and Tenant previously entered into that certain Lease
Agreement dated as of November 1, 1985 relating to the lease of certain premises
located on Powerhouse Road, Pompano Beach, Florida; and
WHEREAS, Landlord and Tenant wish to amend the Lease Agreement dated as
of November 1, 1985 on the terms and conditions set forth herein:
NOW, THEREFORE, Landlord and Tenant do hereby amend the Lease Agreement
dated as of November 1, 1985 as follows:
35
1. Section 3.1 The first sentence of Section 3.1 of the Lease Agreement
is deleted in its entirety, and the following sentence inserted in lieu thereof:
The term of this Lease and of the lease herein made shall begin on
November 1, 1985, and, subject to the provisions of this Lease shall
continue until December 31, 1996, but shall not in any event expire
until the term of the Loan Agreement has expired and all sums required
to be paid by the Lessor pursuant thereto have been paid.
2. Section 3. 1 The sum of $165,510.00 is hereby inserted in the blank
line which appears in the third line of Section 3.2 of the Lease Agreement.
3. Except as expressly amended herein, the terms and conditions of the
Lease Agreement dated as of November 1, 1985 remain unchanged and in full force
and effect.
IN WITNESS WHEREOF, this First Amendment to Lease Agreement is executed
by Landlord and Tenant as of the date first appearing above.
KALPAKJIAN, MASCIANDARO and
MASCIANDARO PARTNERSHIP
By: /S/▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
----------------------------
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36
COLORADO PRIME INC.
By: /S/ILLEGIBLE
----------------------------
CONSENT TO THE FOREGOING FIRST
AMENDMENT TO LEASE AGREEMENT IS
HEREBY GRANTED:
BROWARD COUNTY, FLORIDA
By:
-------------------------------
CONSENT TO THE FOREGOING FIRST
AMENDMENT TO LEASE AGREEMENT IS
HEREBY GRANTED:
▇▇▇▇▇▇▇ ▇▇▇▇▇ TRUST COMPANY, N.A.,
as Trustee
By:
-------------------------------
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