THIS LEASE AGREEMENT, dated as of February 1, 1994, is by and between the
ONEIDA COUNTY INDUSTRIAL DEVELOPMENT AGENCY, a public benefit corporation duly
organized and existing under the laws of the State of New York having its office
at ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the
"Agency") and SPECIAL METALS CORPORATION, a corporation duly organized and
existing under the laws of the State of Delaware, having an office at ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company").
W I T N E S S E T H:
WHEREAS, the Agency is authorized and empowered by the provisions of Title
1 of Article 18-A of the General Municipal Law, Chapter 24 of the Consolidated
Laws of New York, as amended (the "Enabling Act"), and Chapter 372 of the 1970
Laws of New York, as amended, constituting Section 901 of said General Municipal
Law (said Chapter and the Enabling Act being hereinafter collectively referred
to as the "Act") to promote, develop, encourage and assist in the acquiring,
constructing, reconstructing, improving, maintaining, equipping and furnishing
of, among others, industrial facilities for the purpose of promoting, attracting
and developing economically sound commerce and industry in order to advance the
job opportunities, health, general prosperity and economic welfare of the people
of the State of New York, to improve their prosperity and standard of living,
and to prevent unemployment and economic deterioration; and
WHEREAS, by resolution adopted June 1, 1993 (the "Resolution"), the Agency
indicated its intent: (i) to acquire the Project Facility described in the
following paragraph and (ii) to lease (with an obligation to purchase) the
Project Facility to the Company or such other person as may be designated by the
Company and agreed upon by the Agency; and
WHEREAS, the Project Facility consists of the acquisition of land (the
"Land") located in the Town of New Hartford County of Oneida, State of New York,
and described on attached Exhibit A, buildings (the "Facility") on the Land, and
certain equipment (the "Equipment") (the Land, the Facility and the Equipment
being hereinafter referred to as the "Project Facility") , all for the use as a
manufacturing facility; and
WHEREAS, pursuant to Article 8 of the Environmental Conservation Law,
Chapter 43-B of the Consolidated Laws of New York, as amended, and the
regulations adopted pursuant thereto by the Department of Environmental
Conservation of the State of New York (collectively, the "SEQR Act"), the Agency
in the Resolution determined that the acquisition of the Project Facility, and
the leasing thereof to the Company, will not have a significant effect on the
"environment" (as said quoted term is defined in the SEQR Act) and therefore
does not require the preparation of environmental impact statement; and
WHEREAS, the Company has conveyed the Project Facility to the Agency; and
WHEREAS, the Agency proposes to lease the Project Facility to the Company,
and the Company desires to rent the Project Facility from the Agency, upon the
terms and conditions hereinafter set forth in this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto hereby formally covenant,
agree and bind themselves as follows (but, with respect to the Agency, subject
to Section 12.11 hereof), to wit:
2
ARTICLE I
DEFINITIONS
Section 1.1 Definitions.
The following words and terms as used in this Lease Agreement shall have
the following meanings unless the context or use indicates another or different
meaning or intent:
"Act" means Title 1 of Article 18-A of the General Municipal Law of the
State of New York, as amended from time to time, together with Chapter 372 of
the Laws of 1970 of the State of New York, as amended from time to time.
"Agency" means (i) Oneida County Industrial Development Agency and its
successors and assigns and (ii) any public benefit corporation or political
subdivision or other entity (as provided in Section 9.3 hereof) resulting from
or surviving any consolidation or merger to which the Agency or its successors
may be a party.
"Agreement" means this Lease Agreement, dated as of February 1, 1994, by
and between the Agency and the Company, as the same may be amended or
supplemented from time to time.
"Authorized Representative" means, in the case of the Agency, the
chairman, vice chairman, secretary or assistant secretary of the Agency; in the
case of the Company, its president or any vice president; and in the case of
both, such additional persons as, at the time, are designated to act on behalf
of the Agency or the Company, as the case may be, by written certificate
furnished to the Agency or the Company, as the case may be, containing the
specimen signature of each such person and signed on behalf of (i) the Agency by
the chairman, vice chairman, secretary or assistant secretary of the Agency or
(ii) the Company by the president or any vice president of the Company.
"Company" means (i) Special Metals Corporation, a corporation duly
organized and existing under the laws of the State of Delaware, and its
successors and assigns as the lessee hereunder, and (ii) any surviving,
resulting or transferee Person as provided in Section 8.4 hereof.
"Condemnation" shall mean the taking of title to, or the use of, Property
under the exercise of the power of eminent domain by any governmental entity or
other person acting under governmental authority.
"Equipment" means all material, machinery, equipment, fixtures and
furnishings used in connection with the operation of the Facility and acquired
by the Agency in accordance with this Lease Agreement, and such substitutions
and replacements thereof as may be made from time to time pursuant to this Lease
Agreement.
3
"Event of Default" shall have the meaning specified in Section 10.1
hereof.
"Facility" means all those buildings, improvements, structures and other
related facilities now or hereafter affixed or attached to the Land, all as they
may exist from time to time.
"Hazardous Substance" means, without limitation, any flammable explosives,
radon, radioactive materials, asbestos, urea formaldehyde foam insulations,
polychlorinated biphenyls, petroleum and petroleum products, methane, hazardous
materials, hazardous wastes, hazardous or toxic substances or related materials
defined in the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended (42 U.S.C. Sections 1801 et seq.), the Hazardous
Materials Transportation Act, as amended (42 U.S.C. Section 6901 et seq., The
New York State Environmental Conservation law or any other applicable
Environmental Law and the regulations adopted pursuant thereto.
"Independent Counsel" means an attorney or attorneys or firm or firms of
attorneys duly admitted to practice law before the highest court of the State of
New York and not a full time employee of the Agency or the Company.
"Land" means the real estate leased pursuant to this Agreement and more
particularly described in Exhibit A attached hereto, with such additions thereto
and substitutions therefor as may exist from time to time in accordance with the
provisions of this Agreement.
"Lease Term" means the duration of the leasehold estate created in this
Agreement as specified in Section 5.2 hereof.
"Lien" means any interest in Property securing an obligation owed to a
Person, whether such interest is based on common law, statute or contract, and
including but not limited to the security interest arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" includes reservations,
exceptions, encroachments, easements, rights of way, covenants, conditions,
restrictions, leases and other similar title exceptions and encumbrances,
including but not limited to mechanics', materialmen's, warehousemen's and
carriers' liens and other similar encumbrances affecting real property. For the
purpose of this Agreement, a Person shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"Local Taxing Entities" shall mean, collectively, Oneida County, the Town
of New Hartford, the New Hartford Central School District and each other taxing
entity in which the Project Facility, or any portion thereof, is located,
including, without limitation, any city, school district, town, village or other
political unit wherein the Project Facility or a portion thereof is located.
4
"Net Proceeds" means so much of the gross proceeds with respect to which
that term is used as remain after payment of all expenses, costs and taxes
(including attorneys' fees) incurred in obtaining such gross proceeds.
"Permitted Encumbrances" means (i) the Liens, if any described in Exhibit
B attached hereto, (ii) this Agreement, (iii) utility, access and other
easements and rights of way, restrictions and exceptions that do not, in the
opinion of Independent Counsel, materially impair the utility or the value of
the Property affected thereby for the purposes for which it is intended, (iv)
mechanics', materialmen's, warehousemen's, carriers' and other similar Liens to
the extent permitted by Section 8.9(b) hereof, and (v) Liens for taxes and
assessments, whether general or special, at the time not delinquent.
"Person" means an individual, partnership, corporation, association, joint
venture, trust or unincorporated organization, and a government or any
governmental agency, public benefit corporation or political subdivision.
"Pilot" means that agreement of even date herewith between the Agency and
the Company obligating the Company to make certain payments in lieu of taxes to
the Local Taxing Entities.
"Project Facility" means the Land, the Facility and the Equipment.
"Property" means any interest of any kind in any property or asset,
whether real, personal or mixed, or tangible or intangible.
"Resolution" shall have the meaning set forth in the second recital of
this Agreement.
5
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations and Covenants of the Agency.
The Agency makes the following representations and covenants as the basis
for the undertakings on the Company's part herein contained:
(a) The Agency is duly established under the provisions of the Act
and has the power to enter into the transactions contemplated by this Agreement
and to carry out its obligations hereunder. Based upon the representations of
the Company as to the utilization of the Project Facility, the Project Facility
will constitute a "project", as such quoted term is defined in the Act. By
proper corporate action, the officers of the Agency have been duly authorized to
execute and deliver this Agreement.
(b) The Agency will acquire the Project Facility and will lease the
Project Facility to the Company pursuant to this Agreement, all for the purpose
of promoting the industry, health, welfare, convenience and prosperity of the
inhabitants of the State of New York and improving their standard of living.
(c) By the Resolution, the Agency determined that, based upon the
review by the Agency of the materials submitted and the representations made by
the Company relating to the Project Facility, the acquisition of the Project
Facility, and the leasing thereof by the Agency to the Company, will not have a
"significant effect on the environment" within the meaning ascribed to such
quoted phrase in Article 8 of the Environmental Conservation Law of the State of
New York and the regulations of the New York State Department of Environmental
Conservation promulgated thereunder.
Section 2.2 Representations and Covenants of the Company.
The Company makes the following representations and covenants as the basis
for the undertakings on the Agency's part herein contained:
(a) The Company is a corporation duly organized and existing under
the laws of the State of Delaware, is in good standing under its certificate of
incorporation and the laws of the State of New York has power to enter into this
Agreement and to carry out its obligations hereunder and by proper corporate
action has been duly authorized to execute and deliver this Agreement.
(b) Neither the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby nor the fulfillment of or
compliance with the provisions of this Agreement will conflict with or result in
a breach of any of the terms, conditions or provisions of any corporate
restriction or any agreement or instrument to which the Company is a party or by
which the Company is
6
bound, or will constitute a default under any of the foregoing, or result in the
creation or imposition of any Lien of any nature upon any of the Property of the
Company under the terms of any such instrument or agreement.
(c) The acquisition of the Project Facility by the Agency and the
leasing thereof by the Agency to the Company (i) will induce the Company to
maintain and operate the Project Facility in Oneida County, New York, thereby
retaining and/or creating employment opportunities and promoting the welfare of
the inhabitants thereof and (ii) will not result in the removal of a plant,
facility or other commercial activity of the Company or any other occupant of
the Project Facility from one area of the State of New York to another area of
the State of New York or result in the abandonment of one or more plants or
facilities of the Company or any other occupant of the Project Facility located
within the State of New York.
(d) The Project Facility is and will continue to be a "project," as
such quoted term is defined in the Act, and, so long as the Agency retains title
to the Project Facility, the Company will not take any action, fail to take any
action or allow any action to be taken which would cause the Project Facility
not to constitute a "project" (as such quoted term is defined in the Act) .
(e) To the best of the Company's knowledge, the acquisition of the
Project Facility will not have a "significant effect on the environment" (as
said quoted term is defined in Article 8 of the Environmental Conservation Law
of the State of New York).
(f) The Project Facility will comply in all material respects with
all applicable building, zoning, environmental, planning and subdivision laws,
ordinances, rules and regulations of governmental authorities having
jurisdiction over the Project Facility, and the Company shall defend, indemnify
and save the Agency and its members, officers, agents, servants and employees
harmless from any liability or expenses resulting from any failure by the
Company to comply with the provisions of this subsection (f).
Section 2.3 Environmental Representations and Covenants.
The Company makes the following additional representations and covenants
as the basis for the undertakings on the Agency's part herein contained.
(a) Except as described on Exhibit B, as of the execution of this
Lease Agreement there has been no release or threatened release of oil or
hazardous materials (including, without limitation, asbestos and polychlorinated
biphenyls), Hazardous Substances or hazardous wastes or any other contaminant or
pollutant at, on, to, into, or from the Project Facility, except releases which
have been remediated in compliance with applicable environmental laws. No
federal, state or local agency or authority has issued any claim, notification,
order or violation or instituted any action, suit, or proceeding concerning oil
or hazardous materials, Hazardous Substances or hazardous wastes or any
7
other contaminant or pollutant with respect to the Project Facility, or with
respect to the release of such oil or hazardous materials, Hazardous Substances
or hazardous wastes or any other contaminant or pollutant on any adjoining
property. The Company is not aware of any condition or occurrence which could
give rise to any such claim, notification, order, violation, action, suit, or
proceeding.
(b) No consent or approval is needed from any governmental agency
for the transfer of the Project Facility under any environmental law, code,
ordinance, rule or regulation.
(c) Except as set forth on Exhibit B attached hereto and made a part
hereof there are no agreements, consent orders, decrees, judgments, licenses or
permit conditions, or other directives of government which relate to the future
use of the Project Facility or require any change in the present conditions of
the Project Facility. The Project Facility is not listed or proposed to be
listed on either the federal National Properties List or the New York State
Inactive Hazardous Waste Disposal Site Registry, except as set forth on Exhibit
B.
(d) The Project Facility has not been and will not be used for the
treatment, storage or disposal of oil or hazardous materials, hazardous
substances or hazardous wastes or any other contaminant or pollutant, except in
compliance with applicable environmental laws.
(e) The Company has no reason to believe any condition exists
relating to oil or hazardous materials, hazardous substances or hazardous wastes
or any other contaminant or pollutant released at, on, to, into or from the
Project Facility, except in accordance with applicable environmental laws and
the terms and conditions of a permit, certificate, license or other written
approval of a governmental body.
(f) The Company shall not allow or cause any oil or hazardous
materials, hazardous substances or hazardous wastes or any other contaminant or
pollutant to be released at, on, to, into or from the Project Facility, except
in accordance with applicable environmental laws and the terms and conditions of
a permit, certificate, license or other written approval of a governmental body.
(g) All environmental permits, consents, licenses, certificates or
approvals necessary to the operation of any activity on the Project Facility
have been obtained and are and shall be kept in full force and effect.
(h) There are no electrical transformers, capacitors, or other equip
ment, items or articles on or at the Project Facility which contain
polychlorinated biphenyls, except in compliance with applicable environmental
laws.
(i) The Company has fully complied, and will continue to comply,
with all federal, state and local environmental laws, rules, regulations,
orders, decrees, ordinances, and codes applicable to the use and condition of
the Project Facility.
8
(j) The Company shall promptly notify the Agency, in writing, of the
filing of an environmental lien against the Project Facility, the listing or
proposed listing of the Project Facility on the federal National Priorities
List, the New York State Inactive Hazardous Waste Disposal Site Registry or
comparable state list, or any environmental claim, notification, order,
violation, action, suit, or proceeding with respect to the Project Facility.
9
ARTICLE III
TITLE TO THE PROJECT FACILITY
Section 3.1 Agreement to Convey to the Agency.
The Company has conveyed, or will convey, to the Agency all right, title
and interest in the Project Facility. The Company agrees that the title to the
Project Facility shall be good and marketable and free and clear of all Liens
except for Permitted Encumbrances and will be sufficient for the purposes
intended by this Agreement and the Company agrees that it will defend, indemnify
and hold the Agency and its members, officers, agents, servants and employees
harmless from any expense or liability arising out of a defect in title
affecting the Project Facility and will defend any action respecting title to
the Project Facility.
Section 3.2 Acquisition of the Project Facility.
The Company shall give or cause to be given all notices and comply or
cause compliance with all laws, ordinances, municipal rules and regulations and
requirements of all governmental agencies and public authorities applying to or
affecting the acquisition of the Project Facility, and the Company will defend
and save the Agency and its officers, members, agents, servants and employees
harmless from all fines and penalties due to failure to comply therewith. All
permits and licenses necessary for the acquisition of the Project Facility shall
be procured promptly by the Company.
Section 3.3 Costs of Acquisition to be Paid by the Company.
The Company agrees, for the benefit of the Agency, to pay in full all
costs of acquiring the Project Facility. The Company shall execute, deliver and
record or file such instruments as are necessary in order to perfect or protect
the Agency's title to such portions of the Project Facility. No payment pursuant
to the provisions of this Section 3.3 shall entitle the Company to any
reimbursement for any such expenditure from the Agency or entitle the Company to
any diminution or abatement of any other amounts payable by the Company under
this Agreement.
10
ARTICLE IV
(INTENTIONALLY OMITTED)
11
ARTICLE V
DEMISING CLAUSES AND RENTAL PROVISIONS
Section 5.1 Demise of the Project Facility.
The Agency hereby demises and leases the Project Facility to the Company,
and the Company hereby rents and leases the Project Facility from the Agency,
upon the terms and conditions of this Agreement.
Section 5.2 Duration of the Lease Term; Quiet Enjoyment.
(a) The Agency shall deliver to the Company sole and exclusive
possession of the Project Facility (subject to the provisions of Sections 8.3
and 10.2 hereof), and the leasehold estate created hereby shall commence on the
date hereof and except as provided in Section 10.2 hereof, the leasehold estate
created hereby shall terminate at 11:59 p.m. on February 28, 1997 or on such
earlier date as may be permitted by Section 11.1 hereof.
(b) The Agency shall take no action, other than pursuant to Article
X of this Agreement, to prevent the Company from having quiet and peaceable
possession and enjoyment of the Project Facility during the Lease Term and will,
at the request of the Company and at the Company's cost, cooperate with the
Company in order that the Company may have quiet and peaceable possession and
enjoyment of the Project Facility.
Section 5.3 Rents and Other Amounts Payable.
(a) The Company shall pay rent for the Project Facility leased
hereunder as follows: So long as the leasehold estate created hereby shall not
be terminated, the Company shall pay, directly to the Agency, on the date of
execution and delivery of this Agreement and on the first day of February in
each calendar year thereafter during the Lease Term, an amount equal to the sum
of Five Hundred Dollars ($500.00) per year.
(b) In addition to the amounts payable pursuant to Section 5.3(a)
hereof, the Company shall pay to the Agency as additional rent, within thirty
(30) days of the receipt of demand therefor, an amount equal to the sum of the
reasonable expenses of the Agency and the members, officers, agents, servants
and employees thereof incurred (i) by reason of the Agency's ownership or
leasing of the Project Facility and/or (ii) in connection with the carrying of
the Agency's duties and obligations under this Agreement. At the request of the
Company, the Agency shall provide the Company with an accounting of all such
costs and expenses.
(c) The above-mentioned payments shall be made, without any further
notice, in immediately available funds in lawful money of the United States of
America
12
as, at the time of payment, shall be legal tender for the payment of public and
private debts. In the event the Company shall fail to timely make any payment
required in this Section 5.3, within ten days after notice of nonpayment, the
Company shall pay the same together with interest thereon at the rate of ten
percent (10%) per annum from the date on which such payment was due until the
date on which such payment is made.
Section 5.4 Obligations of the Company Hereunder Unconditional.
(a) The obligation of the Company to make the payments required by
this Agreement and to perform and observe any and all of the other covenants and
agreements on its part contained herein shall be a general obligation of the
Company and shall be absolute and unconditional irrespective of any defense or
any rights of set-off, recoupment, counterclaim or abatement that the Company
may otherwise have against the Agency. The Company will not (i) suspend,
discontinue or ▇▇▇▇▇ any payment required by this Agreement or (ii) fail to
observe any of its other covenants or agreements in this Agreement or (iii)
except as provided in Section 11.1 or Section 7.1 hereof, terminate this
Agreement for any cause whatsoever including, without limiting the generality of
the foregoing, failure of the Company to occupy or to use the Project Facility
as contemplated in this Agreement or otherwise, any defect in the title, design,
operation, merchantability, fitness or condition of the Project Facility or in
the suitability of the Project Facility for the Company's purposes or needs,
failure of consideration, destruction of or damage to the Project Facility,
commercial frustration of purpose, or the taking by Condemnation of title to or
the use of all or any part of the Project Facility, any change in the tax or
other laws of the United States of America, or administrative rulings of or
administrative actions by the State, or any political subdivision of either, or
any failure of the Agency to perform and observe any agreement, whether
expressed or implied, or any duty, liability or obligation arising out of or in
connection with this Agreement.
(b) Nothing contained in this Section 5.4 shall be construed to
release the Agency from the performance of any of the agreements on its part
contained in this Agreement, and in the event the Agency should fail to perform
any such agreement, the Company may institute such action against the Agency as
the Company may deem necessary to compel performance (subject to the provisions
of Section 12.11 hereof) or recover damages for non-performance; provided,
however, that the Company shall look solely to the Agency's estate and interest
in the Project Facility for the satisfaction of any right or remedy of the
Company for the collection of a judgment (or other judicial process) requiring
the payment of money by the Agency in the event of any liability on the part of
the Agency, and no other property or assets of the Agency shall be subject to
levy, execution, attachment or other enforcement procedure for the satisfaction
of the Company's remedies under or with respect to this Agreement, the
relationship of the Agency and the Company hereunder, or the Company's use and
occupancy of the Project Facility, or any other liability of the Agency to the
Company.
13
ARTICLE VI
MAINTENANCE, MODIFICATIONS, TAXES AND INSURANCE
Section 6.1 Maintenance, Use and Modifications of the Project Facility by
the Company.
(a) During the Lease Term, the Company will (i) maintain the Project
Facility free of material defects or dangerous conditions and keep the Project
Facility in safe condition, (ii) make all necessary repairs and replacements to
the Project Facility (whether ordinary or extraordinary, structural or
nonstructural, foreseen or unforeseen) as are necessary to maintain the Project
Facility free from material defects and dangerous conditions, and (iii) operate
the Project Facility in accordance with all applicable federal and state safety
standards.
(b) The Company agrees to use the Project Facility in conformance
with all zoning ordinances, laws, rules and regulations that would be applicable
to the Project Facility if the Company were the owner of record of the Project
Facility. The Company covenants not to use the Project Facility for any other
purpose without the prior written consent of the Agency.
(c) The Company from time to time may make any additions,
modifications or improvements to the Project Facility or any part thereof which
it may deem desirable for its business purposes, provided such actions do not
affect the integrity of the Project Facility provided that all such additions,
modifications or improvements to the Project Facility or any part thereof shall
be in compliance with all applicable law, rules and regulations, including,
without limitation, requirements that the provisions of Article 8 of the
Environmental Conservation Law be satisfied with respect to such addition or
improvement). All such additions, modifications or improvements so made by the
Company shall be done in a reasonable and workmanlike manner and shall become a
part of the Project Facility. The Company agrees to deliver to the Agency all
documents which may be necessary or appropriate to convey to the Agency title
to, or other satisfactory interest in, such property.
(d) The Agency shall not be under any obligation to renew, repair or
replace any inadequate, obsolete, worn out, unsuitable, undesirable or
unnecessary portions of the Project Facility.
Section 6.2 Installation of Additional Equipment.
(a) The Company from time to time may install additional machinery,
equipment or other personal property in the Project Facility (which may be
attached or affixed to the Project Facility), and such machinery, equipment or
other personal property shall not become, or be deemed to become, a part of the
Project Facility. The Company from time to time may remove or permit the removal
of such machinery,
14
equipment or other personal property from the Project Facility; provided that
any such removal of such machinery, equipment or other personal property shall
not adversely affect the integrity of the Project Facility or impair the overall
operating efficiency of the Project Facility for the purposes for which it is
intended and provided further that, if any material damage is occasioned to the
Project Facility by such removal, the Company shall promptly repair such damage
at its own expense.
(b) The Agency shall not be responsible for any loss or damage to
any machinery, equipment or other personal property installed pursuant to the
provisions of this Section 6.2.
Section 6.3 Taxes, Assessments and Utility Charges.
(a) The Company shall pay, as the same respectively become due,
subject to Section 6.8, (i) all taxes and governmental charges of any kind
whatsoever which may at any time be lawfully assessed or levied against or with
respect to (A) the Project Facility, (B) any machinery, equipment or other
property installed or brought by the Company therein or thereon, (C) any sales
or use taxes imposed with respect to the Project Facility or any part or
component thereof, (ii) all utility and other charges incurred or imposed for or
with resect to the operation, maintenance, use, occupancy, upkeep and
improvement of the Project Facility, (iii) all assessments and charges of any
kind whatsoever lawfully made by any governmental body for public improvements,
provided that, with respect to special assessments or other governmental charges
that may lawfully be paid in installments over a period of years, the Company
shall be obligated under this Agreement to pay only such installments as are
required to be paid during the Lease Term, and (iv) all moneys due as payments
in lieu of taxes pursuant to Section 6.8 hereof.
(b) The Company may in good faith actively contest any such taxes,
assessments and other charges, provided that the Company shall have first
notified the Agency in writing of such contest.
(c) The Company shall defend, indemnify and save the Agency and its
members, officers, agents, servants and employees harmless from any liability or
expenses resulting from any failure by the Company to comply with the provisions
of this Section 6.3.
Section 6.4 Insurance Required.
At all times throughout the Lease Term, the Company shall, at its expense,
maintain insurance against such risks and for such amounts and with deductibles
(except as otherwise herein provided) as are customarily insured against by
businesses of like size and type paying, as the same become due and payable, all
premiums in respect thereto, such insurance to include at a minimum the
following coverage:
15
(a) Workers' Compensation insurance, and each other form of
insurance which the Agency or the Company is required by law to provide,
covering loss resulting from injury, sickness, disability or death of employees
of the Company who are located at or assigned to the Project Facility.
(b) Insurance against loss or damage by fire, such other hazards,
casualties, risks and contingencies now covered by or that may hereafter be
considered as included within the standard form of extended coverage
endorsement.
(c) Underlying insurance protecting the Company and the Agency
against loss or losses from liabilities arising from bodily injury and death or
damage to the Property of others caused by any accident or occurrence, with
limits of not less than Two Million Dollars ($2,000,000.00) and excess liability
coverage with limits of not less than Fifty Million Dollars ($50,000,000.00),
without any deductible, on account of bodily injury, including death resulting
therefrom, and damage to the property of others excluding liability imposed upon
the Company by any applicable worker's compensation law.
(d) During the Lease Term, any contractor or subcontractor engaged
in the repairs of the Project Facility or in the construction or installation of
any improvements to the Project Facility shall be required to carry general
comprehensive liability insurance with limits acceptable to the Company and the
Agency and containing coverage for premises operations, contractors protective,
owner's protective and completed operations (products liability), with the X, C
and U exclusions removed and containing coverage for all owned, non-owned and
hired vehicles with non-ownership protection for contractor's or subcontractor's
employees.
Section 6.5 Additional Provisions Respecting Insurance.
(a) All insurance required by Section 6.4 hereof shall be procured
and maintained under valid and enforceable policies issued by financially sound
and generally recognized responsible insurance companies selected by the Company
and authorized to write such insurance in the State of New York. All policies
evidencing such insurance shall provide for at least thirty (30) days prior
written notice of the cancellation thereof (or any reduction in policy limits or
material change in coverage thereof) to the Company and the Agency.
(b) All such policies of insurance, or a certificate or certificates
of the insurers that such insurance is in force and effect, shall be deposited
with the Agency on or before the commencement of the Lease TeAt least ten (10)
days prior to the expiration of any such policy, the Company shall furnish to
the Agency evidence that the policy has been renewed or replaced or is no longer
required by this Agreement.
(c) Nothing in this Agreement shall prevent the Company from taking
out insurance of the kind and in the amounts provided for under Section 6.4
hereof under
16
a blanket insurance policy or policies which cover other properties owned or
operated by the Company as well as the Project Facility.
Section 6.6 Application of Net Proceeds of Insurance.
The Net Proceeds of Insurance carried pursuant to the provisions of
Section 6.4 hereof shall be applied toward extinguishment or satisfaction of the
liability with respect to which such insurance proceeds may be paid.
Section 6.7 Right of the Agency to Pay Taxes, Insurance Premiums and Other
Charges.
If the Company fails (i) to pay any tax, assessment or other governmental
charge required to be paid by Section 6.3 hereof or (ii) to maintain any
insurance required to be maintained by Section 6.4 hereof, the Agency may pay
(but shall not be obligated to pay) such tax, assessment or other governmental
charge or the premium for such insurance. No such payment by the Agency shall
affect or impair any rights of the Agency hereunder arising in consequence of
such failure by the Company. The Company shall reimburse the Agency upon demand,
for any amount so paid by the Agency pursuant to this Section 6.7, together with
interest thereon from the date of payment by the Agency until the date on which
such reimbursement is made at the rate of 10% per annum.
Section 6.8 Payments in Lieu of Taxes.
(a) It is recognized that under the provisions of the Act, the
Agency is required to pay no taxes or assessments (except for special
assessments and special ad valorem levies) upon any of the Property acquired by
it or under its jurisdiction or control or supervision or upon its activities.
This exemption is only applicable to real property taxes and assessments from
and after the tax incidence date next following the date of this Agreement (the
"Tax Date"). Accordingly, the Company and the Agency intend that, by virtue of
the Agency's ownership, control and supervision of the Project Facility and the
Company's status as agent of the Agency for the purposes stated herein, the
Company shall not be obligated to pay such taxes, charges and assessments
(except for special assessments and special ad valorem levies) described in
Section 6.3 (a) (i) and (iii), but excluding any real property taxes and
assessments due prior to the Tax Date. The Company and the Agency agree,
however, that the Company, or any subsequent lessee under this Agreement, shall,
during the Lease Term and from and after the Tax Date, make payments in lieu of
taxes in accordance with a separate agreement between the Agency and the Company
of even date herewith (the "Pilot").
(b) In the event that the Company shall purchase the Project
Facility pursuant to Article XI of this Agreement, and such purchase shall not
immediately obligate the Company to make pro rata tax payments pursuant to
legislation similar to subdivision one of Section 520 of the Real Property Tax
Law, as added by Chapter 635 of the 1978 Laws of New York, then, notwithstanding
any other provision of this
17
Agreement, the obligations of the Company pursuant to this Section 6.8 shall
remain in full force and effect until the first tax year in which the Company
shall appear on the tax rolls of the various taxing entities having jurisdiction
over the Project Facility as the legal owner of record of the Project Facility.
18
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damage or Destruction.
(a) If the Project Facility shall be damaged or destroyed (in whole
or in part) at any time during the Lease Term:
(i) the Agency shall have no obligation to replace, repair,
rebuild or restore the Project Facility;
(ii) there shall be no abatement or reduction in the amounts
payable by the Company under this Agreement (whether or not the Project
Facility is replaced, repaired, rebuilt or restored;
(iii) the Company shall promptly give notice thereof to the
Agency; and
(iv) except as otherwise provided in subsection (b) of this
Section 7.1, the Company shall promptly replace, repair, rebuild or
restore the Project Facility to substantially the same condition and value
as an operating entity as existed prior to such damage or destruction,
with such changes, alterations and modifications as may be desired by the
Company, provided that such changes, alterations or modifications do not
so change the nature of the Project Facility that it does not constitute a
"project" (as such quoted term is defined in the Act).
The Net Proceeds of insurance shall be paid to the Company and except as
other provided in subsection (b) of this Section 7.1, the Company shall apply to
the replacement, repair, rebuilding or restoration of the Project Facility so
much as may be necessary of any Net Proceeds of insurance resulting from claims
for such losses.
In the event such Net Proceeds are not sufficient to pay in full the costs
of such replacement, repair, rebuilding or restoration, the Company shall
nonetheless complete the work thereof and pay from its own monies that portion
of the costs thereof in excess of such Net Proceeds.
All such replacements, repairs, rebuilding or restoration made pursuant to
this Section 7.1, whether or not requiring the expenditure of the Company's own
money, shall automatically become a part of the Project Facility as if the same
were specifically described herein.
(b) The Company shall not be obligated to replace, repair, rebuild
or restore the Project Facility, and the Net Proceeds of the insurance shall not
be applied
19
as provided in subsection (a) of this Section 7.1, if the Company shall exercise
its option to terminate this Agreement pursuant to Section 11.1 hereof.
(c) The Company may adjust all claims under any policies of
insurance covering damage or destruction of the Project Facility; provided,
however, that no such claim with respect to an insured event as to which the
Agency may be or is alleged to be liable may be adjusted without the prior
written consent of the Agency.
Section 7.2 Condemnation.
(a) If at any time during the Lease Term the whole or any part of
title to, or the use of, the Project Facility shall be taken by Condemnation,
the Agency shall have no obligation to restore or replace the Project Facility
and there shall be no abatement or reduction in the amounts payable by the
Company under this Agreement (whether or not the Project Facility is restored or
replaced).
Except as otherwise provided in subsection (b) of this Section 7.2,
the Company shall promptly:
(i) if necessary to maintain the Project Facility restore the
Project Facility (including the purchase of necessary land to replace any
Land taken by Condemnation) to substantially the same condition and value
as an operating facility as existed prior to such Condemnation; or
(ii) if necessary to maintain the Project Facility acquire, by
construction or otherwise, facilities of substantially the same nature and
value as an operating facility as the Project Facility (hereinafter
referred to in this Section 7.2 as "Substitute Facilities"), which
Substitute Facilities shall constitute a "project," as such quoted term is
defined in the Act; and
(iii) in any event, give prompt notice of such Condemnation and
its plans to restore the Project Facility or acquire Substitute Facilities
to the Agency.
The Net Proceeds of any award in any Condemnation proceeding shall
be paid to the Company and, if required, applied to the payment of the costs of
such restoration of the Project Facility or the acquisition of Substitute
Facilities. In the event such Net Proceeds of any Condemnation award are not
sufficient to pay in full the costs of such restoration of the Project Facility
or such acquisition of Substitute Facilities, the Company shall nonetheless
restore the Project Facility or acquire Substitute Facilities and shall pay from
its own monies that portion of the costs thereof in excess of such Net Proceeds.
The Project Facility, as so restored, or the Substitute Facilities,
whether or not requiring the expenditure of the Company's own monies, shall
automatically become part of the Project Facility as if the same were
specifically described herein.
20
(b) The Company shall not be obligated to restore the Project
Facility or acquire Substitute Facilities, and the Net Proceeds of any
Condemnation award shall not be applied as provided in Section 7.2(a), if the
Company shall exercise its option to terminate this Agreement pursuant to
Section 11.1 hereof.
(c) The Agency shall cooperate fully with the Company in the
handling and conduct of any Condemnation proceeding with respect to the Project
Facility. In no event shall the Agency voluntarily settle, or consent to the
settlement of, any Condemnation proceeding with respect to the Project Facility
without the written consent of the Company.
Section 7.3 Condemnation of Company-Owned Property.
The Company shall be entitled to the proceeds of any Condemnation award or
portion thereof made for damage to or taking of any Property which, at the time
of such damage or taking, is not part of the Project Facility and which is owned
by the Company.
21
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1 No Warranty of Condition or Suitability by the Agency;
Acceptance "As Is".
THE AGENCY MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE
CONDITION, TITLE, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS OF THE PROJECT
FACILITY, OR THAT THE PROJECT FACILITY IS OR WILL BE SUITABLE FOR THE COMPANY'S
PURPOSE OR NEEDS, OR REGARDING THE EXISTENCE OR NON-EXISTENCE OF ANY DEFECTS OR
DANGEROUS CONDITIONS EXISTING ON OR WITH RESPECT TO THE PROJECT FACILITY. THE
COMPANY DOES AND SHALL ACCEPT THE PROJECT FACILITY "AS IS" WITHOUT RECOURSE OF
ANY NATURE AGAINST THE AGENCY FOR ANY CONDITION NOW OR HEREAFTER EXISTING. NO
WARRANTIES OF FITNESS FOR A PARTICULAR PURPOSE OR MERCHANT ABILITY ARE MADE. IN
THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE, WHETHER PATENT OR LATENT,
THE AGENCY SHALL HAVE NO RESPONSIBILITY OR LIABILITY WITH RESPECT THEREOF.
Section 8.2 Hold Harmless Provision.
(a) The Company hereby releases the Agency and its members,
officers, agents, servants and employees from, agrees that the Agency and its
members, officers, agents, servants and employees shall not be liable for and
agrees to indemnify, defend and hold the Agency and its members, officers,
agents, servants and employees harmless from and against any and all (i)
liability for loss or damage to Property or injury to or death of any and all
persons that may be occasioned, directly or indirectly, by any cause whatsoever
pertaining to the Project Facility or arising by reason of or in connection with
the occupation or the use thereof or the presence of any Person or Property on,
in or about the Project Facility and/or (ii) liability occasioned directly or
indirectly from the violation, or alleged violation, of any environmental law,
rule or regulation with respect to the Project Facility and/or (iii) liability
arising from the Agency's acquiring, owning and leasing of the Project Facility,
including without limiting the generality of the foregoing, (A) any sales or use
taxes which are or may be payable with respect to goods supplied or services
rendered with respect to the Project Facility, and (B) all causes of action and
attorneys' fees and any other expenses incurred in defending any suits or
actions which may arise as a result of any of the foregoing, provided that any
such losses, damages, liabilities or expenses of the Agency are not incurred or
do not result from the intentional, gross negligence or willful wrongdoing of
the Agency or any of its members, officers, agents, servants or employees.
(b) In the event of any claim against the Agency or its officers,
members, agents, servants or employees by any employee of the Company or any
22
contractor of the Company or anyone directly or indirectly employed by any of
them or anyone for whose acts any of them may be liable, the obligations
hereunder shall not be limited in any way by any limitation on the amount or
type of damages, compensation or benefits payable by or for the Company or such
contractor under worker's compensation, disability benefits or other employee
benefit acts.
(c) To effectuate the provisions of this Section 8.2, the Company
shall provide for and insure, in the liability policies required in Section
6.4(b) hereof, its liabilities assumed pursuant to this Section 8.2.
(d) Notwithstanding any other provision of this Agreement, the
obligations of the Company pursuant to this Section 8.2 shall remain in full
force and effect after the termination of this Agreement.
Section 8.3 Right to Inspect the Project Facility.
The Agency and its duly authorized agents shall have the right at all
reasonable times on reasonable notice and subject to the Company's usual and
customary security requirements, to inspect the Project Facility.
Section 8.4 Company to Maintain its Corporate Existence; Conditions Under
Which Exceptions Permitted.
The Company agrees that, during the Lease Term, it will maintain its
corporate existence, will not dissolve or otherwise dispose of all or
substantially all of its assets, and will not consolidate with or merge into
another corporation or permit one or more corporations to consolidate with or
merge into it; provided that the Company may consolidate with or merge into
another domestic corporation organized and existing under the laws of one of the
states of the United States of America, or permit one or more such domestic
corporations to consolidate with or merge into it, or sell or otherwise transfer
to another such domestic corporation all or substantially all of its assets as
an entirety and thereafter dissolve, provided (i) that the surviving, resulting
or transferee corporation, as the case may be, is incorporated under the laws of
the State of New York or qualifies to do business in the State of New York, (ii)
that such corporation assumes in writing all of the obligations or any
restrictions on the Company under this Agreement and any other agreement
securing the Company's performance of its obligations hereunder, (iii) that as
of the date of such consolidation, merger, sale or transfer, the Agency shall be
furnished with the following, in form and substance satisfactory to the Agency:
(a) an opinion of Independent Counsel opining as to compliance with items (i)
and (ii) of this Section 8.4, (b) a certificate, dated the effective date of
such consolidation, merger, sale or transfer, signed by an executive officer of
the Company and of the surviving, resulting or transferee corporation, as the
case may be, to the effect that immediately after the consummation of the
transaction, and after giving effect thereto, no Event of Default exists under
this Agreement and no event exists which, with notice or lapse of time or both,
would become such an Event of Default.
23
Section 8.5 Omitted.
Section 8.6 Agreement to Provide Information.
The Company shall, whenever requested by the Agency, provide and
certify or cause to be provided and certified such information concerning the
Company, its finances, and other topics as the Agency from time to time
reasonably considers necessary or appropriate, or as may be required by law.
Section 8.7 Omitted.
Section 8.8 Compliance with Orders, Ordinances, Etc.
(a) The Company will, throughout the Lease Term, promptly comply
with all statutes, codes, laws, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations, directions
and requirements of all federal, state, county, municipal and other governments,
departments, commissions, boards, companies or associations insuring the
premises, courts, authorities, officials and officers, foreseen or unforeseen,
ordinary or extraordinary, which now or at any time hereafter may be applicable
to the Project Facility or any part thereof, or to any use, manner of use or
condition of the Project Facility or any part thereof.
(b) Notwithstanding the provisions of Section 8.8(a) hereof, the
Company may in good faith actively contest the validity or the applicability of
any requirement of the nature referred to in such subsection (a), provided the
Company shall have first notified the Agency of such contest.
(c) Notwithstanding the provisions of Section 8.8(b) hereof, if
because of a violation enumerated in Section 8.8(a) hereof, either the Agency or
any of the members, officers, agents, servants or employees of the Agency shall
actually be threatened with a fine or imprisonment, then the Company shall
immediately remedy such violation and provide legal protection to the Agency and
its members, officers, agents, servants and employees sufficient to remove the
threat of such fine or imprisonment.
Section 8.9 Discharge of Liens and Encumbrances.
(a) The Company shall not permit or create or suffer to be permitted
or created any Lien, except for Permitted Encumbrances upon the Project Facility
or any part thereof.
(b) Notwithstanding the provisions of subsection (a) of this Section
8.9, the Company may in good faith contest any such Lien, provided the Company
shall have first notified the Agency of such proposed contest. In such event,
the Company may permit the items so contested to remain undischarged or
unsatisfied during the period of such contest and any appeal therefrom.
24
(c) Notwithstanding the provisions of subsection (b) of this Section
8.9, if because of a violation enumerated in Section 8.9 (a) hereof, either the
Agency or any of the members, officers, agents, servants or employees of the
Agency shall actually be threatened with a fine or imprisonment, then the
Company shall immediately remedy such violation and provide legal protection to
the Agency and its members, officers, agents, servants and employees sufficient
to remove the threat of such fine or imprisonment.
Section 8.10 Identification of Equipment.
All Equipment which is or may become the property of the Agency pursuant
to the provisions of this Agreement shall be property identified by the Company
by such appropriate records, including computerized records, as may be approved
by the Agency. In this regard all improvements, machinery, equipment and other
Property of whatever nature affixed or attached to the Land shall be deemed
presumptively to be owned by the Agency, rather than the Company, unless the
same were installed by the Company and title thereto was retained by the Company
as provided in Section 6.2 of this Agreement and such improvements, machinery,
equipment and other Property were properly identified by such appropriate
records as were approved by the Agency.
Section 8.11 Depreciation Deductions and Investment Tax Credits.
The parties agree that, as between them, the Company shall be entitled to
all depreciation deductions with respect to any depreciable property in the
Project Facility pursuant to Section 167 or 168 of the Code and to any
investment credit pursuant to Section 38 of the Code with respect to any portion
of the Project Facility which constitutes "Section 38 Property." The Agency
shall have no obligation to furnish any reports or tax returns pursuant to the
provisions of this Section 8.11, but upon written request of the Company will
endeavor to file with the appropriate officer or officers any reports or tax
returns furnished to the Agency by the Company for the purpose of such filing.
25
ARTICLE IX
RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING;
MORTGAGE AND PLEDGE AND ASSIGNMENT OF INTERESTS
Section 9.1 Restriction on Sale of the Project Facility; Release of
Certain Land.
(a) Except as otherwise specifically provided in this Article IX and
in Article X hereof, the Agency shall not sell, convey, transfer, encumber or
otherwise dispose of the Project Facility or any part hereof or any of its
rights under this Agreement without the prior written consent of the Company.
(b) The Agency and the Company from time to time may release from
the provisions of this Agreement and the leasehold estate created hereby any
part of, or interest in, the Land which is not necessary, desirable or useful
for the Project Facility. In such event, the Agency, at the Company's sole cost
and expense, shall execute and deliver any and all instruments necessary or
appropriate to so release such part of, or interest in, the Land and convey such
title thereto or interest therein to the Company or such other Person as the
Company may designate.
(c) No conveyance of any Land or interest therein effected under the
provisions of this Section 9. 1 shall entitle the Company to any abatement or
diminution of the rents payable under Section 5.3 hereof.
Section 9.2 Assignment or Subleasing.
(a) This Agreement may be assigned in whole or in part and the
Project Facility may be subleased as a whole or in part by the Company, but only
with the prior written consent of the Agency (which consent may not be
unreasonably withheld or delayed but may be subject to such reasonable
conditions as the Agency may deem appropriate) and provided that:
(1) No assignment (other than pursuant to Section 8.4 hereof)
or sublease shall relieve the Company from primary liability for any of its
obligations hereunder;
(2) The assignee or sublessee shall assume the obligations of
the Company hereunder to the extent of the interest assigned or subleased;
(3) The Company shall, within ten (10) days prior to execution
of such assignment or sublease, furnish or cause to be furnished to the Agency a
true and complete copy of each such assignment or sublease, as the case may be,
and the instrument of assumption;
(4) The Project Facility shall continue to constitute a
"project," as such quoted term is defined in the Act.
26
(b) As of the purported effective date of any assignment or sublease
pursuant to subsection (a) of this Section 9.2, the Company at its sole cost
shall furnish the Agency with an opinion, in form and substance satisfactory to
the Agency or Independent Counsel opinion as to compliance with items (1) and
(2) of subsection (a) of this Section 9.2.
(c) No assignment or sublease entered into pursuant to this Section
9.2 may be modified or amended without the prior written consent of the Agency
(which consent may not be unreasonably withheld or delayed but may be subject to
such reasonable conditions as the Agency may deem appropriate).
Section 9.3 Merger of Agency.
(a) Nothing contained in this Agreement shall prevent the
consolidation of the Agency with, or merger of the Agency into, or transfer of
title to the Project Facility as an entirety to, any other political subdivision
or public benefit corporation or other entity which has the legal authority to
own and lease the Project Facility (including but not limited to a subsidiary of
the Agency), provided that:
(1) the Project Facility shall remain exempt from payment of
real property taxes to the extent set forth in Section 874 of the Act, as
amended from time to time, and
(2) upon any such consolidation, merger or transfer, the due
and punctual performance and observance of all the agreements and conditions of
this Agreement to be kept and performed by the Agency shall be expressly assumed
in writing by the political subdivision or public benefit corporation or other
entity resulting from such consolidation or surviving such merger or to which
the Project Facility shall be transferred.
(b) Within thirty (30) days after the consummation of any such
consolidation, merger or transfer of title, the Agency shall give notice thereof
in reasonable detail to the Company together with an instrument of assumption.
The Agency promptly shall furnish such additional information with respect to
any such transaction as the Company reasonably may request.
27
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default Defined.
(a) The following shall be "Events of Default" under this Agreement
and the term "Event of Default" shall mean, whenever it is used in this
Agreement, any one or more of the following events:
(1) The failure of the Company to make the payments required
pursuant to Sections 5.3, 6.3, 6.7, 6.8 or any other Section herein for a period
of ten (10) days after written notice of the failure is given to the Company; or
(2) The failure of the Company to maintain the insurance
required by Section 6.4(c) herein; or
(3) The failure by the Company to observe and perform any
other covenant, condition or agreement hereunder on its part to be observed or
performed for a period of thirty (30) days after written notice, specifying such
failure and requesting that it be remedied, given to the Company by the Agency
provided, however, that if the default is of such a nature that it cannot be
remedied within a period of thirty (30) days, the Company shall not be in
default if it shall promptly commence and thereafter prosecute the curing of the
default with due diligence; or
(4) The abandonment of the Project Facility by the Company or
if the Project Facility remains vacant for a period in excess of ninety (90)
consecutive days after written notice thereof given to the Company by the
Agency.
(b) Notwithstanding the provisions of Section 10.1(a), if by reason
of force majeure either party hereto shall be unable in whole or in part to
carry out its obligations under this Agreement and if such party shall give
notice and full particulars of such force majeure in writing to the other party
within a reasonable time after the occurrence of the event or cause relied upon,
the obligations under this Agreement of the party giving such notice, so far as
they are affected by such force majeure, shall be suspended during the
continuance of the inability, which shall include a reasonable time for the
removal of the effect thereof, and the suspension of such obligations for such
period pursuant to this subsection (b) shall not be deemed an Event of Default
under this Section 10.1. Notwithstanding anything to the contrary in this
subsection (b), an event of force majeure shall not excuse, delay or in any way
diminish the obligations of the Company to make the payments required by
sections 5.3, 6.3, 6.7, 6.8 or any other section hereof, to obtain and continue
in full force and effect the insurance required by Section 6.4 hereof, to
provide the indemnity required by Section 8.2 hereof and to comply with the
provisions of Sections 8.2 and 8.8 hereof. The term "force majeure" as used
herein shall include, without limitation, acts of God, strikes, lockouts or
other industrial disturbances, acts of public enemies, orders of any kind of the
government of
28
the United States of America or of the State of New York or any of their
departments, agencies, governmental subdivisions or officials, or any civil or
military authority, insurrections, riots, epidemics, landslides, lightning,
earthquakes, fires, hurricanes, storms, floods, washouts, droughts, arrests,
restraint of government and people, civil disturbances, explosions, shortages of
labor and materials or delays of carriers, shortage of energy, partial or entire
failure of utilities, or any other cause or event not reasonably within the
control of the party claiming such inability and not due to its fault. The party
claiming such inability shall use reasonable efforts to remove the cause for the
same with all reasonable promptness; provided that it is agreed that the
settlement of strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the party having difficulty, and the party
having difficulty shall not be required to settle any strike, lockout or other
industrial disturbances by acceding to the demands of the opposing party or
parties.
(c) Any written notice of an Event of Default required to be given
to the Company under this section shall also be given to Credit Lyonnais New
York Branch ("Mortgagee"), as Mortgagee under the Mortgage dated as of August
31, 1990 made by the Company to Mortgagee as collateral agent for the financial
institutions named therein (the "Banks"), at the following address or such other
address as Mortgagee may specify to the Agency in writing:
Credit Lyonnais New York Branch
1301 Avenue of the Americas
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Mortgagee may, but shall not be obligated to, satisfy any conditions or defaults
of the Company under this Agreement, within 90 days after its receipt of such
notice of an Event of Default, provided that performance by the Mortgagee or the
Banks shall not render Credit Lyonnais liable for any of the Company's
obligations hereunder, provided however, that the requirement to give such
notice shall not otherwise limit the Company's rights hereunder upon the
occurrence of an event of default.
Section 10.2 Remedies on Default.
(a) Whenever any Event of Default shall have occurred and be
continuing, the Agency may, by notice to the Company, terminate this Agreement
and require the Company to purchase the Project Facility pursuant to Article XI
hereof. The Company does hereby appoint the Agency as its true and lawful agent
to execute such instruments and documents as may be necessary and appropriate to
effectuate such reconveyance as aforesaid. Such appointment of the Agency as the
agent of the Company shall be deemed to be an agency coupled with an interest
and such appointment shall be irrevocable.
(b) No action taken pursuant to this Section shall relieve the
Company from its obligation to make all payments required by Sections 5.3, 6.3,
6.7, 6.8 or any
29
other section (which occurred prior to the effective date of such termination)
and 8.2 hereof.
Section 10.3 Remedies Exclusive.
The remedies herein conferred upon or reserved to the Agency under Section
10.2 are intended to be exclusive of any other available remedy. No delay or
omission to exercise any right or power accruing upon any default shall impair
any such right or power or shall be construed to be a waiver thereof, but any
such right and power may be exercised from time to time and as often as may be
deemed expedient. In order to entitle the Agency to exercise any remedy reserved
to it in this Article X, it shall not be necessary to give any notice, other
than such notice as may be expressly required in this Agreement.
Section 10.4 Agreement to Pay Attorneys' Fees and Expenses.
In the event the Company should default under any of the provisions of
this Agreement and the Agency should employ attorneys or incur other expenses
for the collection of amounts payable hereunder or the enforcement of
performance or observance of any obligations or agreements on the part of the
Company herein contained, the Company shall, on demand therefor, pay to the
Agency the reasonable fees of such attorneys and such other expenses so
incurred, whether or not an action is commenced, provided that the Agency is
successful in establishing the existence of such default.
Section 10.5 No Additional Waiver Implied by One Waiver.
In the event any agreement contained herein 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.
30
ARTICLE XI
EARLY TERMINATION OF AGREEMENT;
OPTIONS IN FAVOR OF COMPANY
Section 11.1 Early Termination of Agreement.
At any time during the Lease Term, the Company shall have the option to
terminate this Agreement upon filing with the Agency, a certificate signed by an
Authorized Representative of the Company stating the Company's intention to do
so pursuant to this Section 11.1 and upon compliance with the requirements set
forth in Section 11.2 hereof.
Section 11.2 Conditions to Early Termination of Agreement.
(a) In the event the Company exercises its option to terminate this
Agreement in accordance with Section 11.1 hereof, the Company shall make the
following payments:
(i) To the Agency: an amount certified by the Agency as
sufficient to pay all unpaid fees and expenses of the Agency and its
officers, members, agents, servants and employees incurred under this
Agreement; and
(ii) To the appropriate Person: an amount sufficient to pay all
other fees, expenses or charges, if any, due and payable or to become due
and payable under this Agreement and not otherwise paid or provided for.
(b) The certificate required to be filed pursuant to Section 11.1
shall specify the date upon which the payments pursuant to subdivision (a) of
this Section 11.2 shall be made, which date shall be not less than thirty (30)
nor more than sixty (60) days from the date such certificate is filed with the
Agency.
Section 11.3 Obligation to Sell and Purchase the Project Facility.
Contemporaneously with the expiration or termination of the Lease Term in
accordance with Section 5.2, 10.2 or Section 11.1 hereof, the Agency shall sell
and the Company shall purchase all of the Agency's right, title and interest in
and to the Project Facility for the purchase price of One Dollar ($1.00) plus
payment of all sums due and payable to the Agency pursuant to this Agreement.
Section 11.4 Conveyance on Purchase of the Project Facility.
(a) At the closing of any purchase of the Project Facility pursuant
to Section 11.3 hereof, the Agency shall, upon receipt of the purchase price,
deliver to the Company all necessary documents to convey to the Company all the
Agency's right, title
31
and interest in and to the Property being purchased, as such Property then
exists, free and clear of all liens except Permitted Encumbrances and liens
created by the Company or at the request, or with the consent of, the Company.
(b) The sale and conveyance of the Agency's right, title and
interest in and to the Land and the Facility shall be effected by the execution,
delivery and recording by the Agency of a deed to the Company (a form of which
is attached hereto as Exhibit C). The sale and conveyance of the Agency's right,
title and interest in and to the Equipment shall be effected by the execution
and delivery by the Agency to the Company of a ▇▇▇▇ of Sale to the Company (a
form of which is attached hereto as Exhibit D).
32
ARTICLE XII
MISCELLANEOUS
Section 12.1 Notices.
All notices, certificates and other communications hereunder shall be in
writing and shall be sufficiently given and shall be deemed given when delivered
and, if delivered by mail, shall be sent by registered or certified mail,
postage prepaid, return receipt requested, addressed as follows:
To the Agency:
Oneida County Industrial Development Agency
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
With a copy to:
Groben, Gilroy, Oster & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇.
▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
To the Company:
Special Metals Corporation
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President, Secretary and Chief Legal Counsel
With a copy to:
Bond, ▇▇▇▇▇▇▇▇▇ & King
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
The Agency and the Company may, by notice given hereunder, designate any
further or different addresses to which subsequent notices, certificates and
other communications shall be sent.
33
Section 12.2 Binding Effect.
This Agreement shall inure to the benefit of and shall be binding upon the
Agency, the Company and their respective successors and assigns.
Section 12.3 Severability.
In the event any provision of this Agreement 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 12.4 Amendments, Changes and Modifications.
This Agreement may not be amended, changed, modified, altered or
terminated except by written instrument executed and delivered by the parties
hereto.
Section 12.5 Execution of Counterparts.
This Agreement may be executed in several counterparts, each of which
shall be an original and all of which shall constitute but one and the same
instrument.
Section 12.6 Applicable Law.
This Agreement shall be governed by and construed in accordance with the
laws of the State of New York.
Section 12.7 Recording and Filing.
A memorandum of this Agreement shall be recorded or filed, as the case may
be, by the Agency, at the cost of the Company, in the Office of the Clerk of
Oneida County, New York, and/or in such other office or offices as may at the
time be provided by law as the proper place or places for the recordation or
filing thereof.
Section 12.8 Survival of Obligations.
The obligations of the Company to make the payments required by Section
5.3(b) hereof and to provide the indemnity required by Section 8.2 hereof shall
survive any termination or expiration of this Agreement, and all such payments
after such termination shall be made upon demand of the Person to whom such
payment is due.
Section 12.9 Table of Contents and Section Headings Not Controlling.
The table of contents and the headings of the several Sections in this
Agreement have been prepared for convenience of reference only and shall not
control, affect the meaning or be taken as an interpretation of any provision of
this Agreement.
34
Section 12.10 No Recourse; Special Obligation.
(a) All covenants, stipulations, promises, agreements and
obligations of the Agency contained in this Agreement and in the other documents
and instruments connected therewith, and in any documents supplemental thereto
(collectively the "Documents") shall be deemed to be the covenants,
stipulations, promises, agreements, and obligations of the Agency and not of any
member, officer, agent (other than the Company), servant or employee of the
Agency in his individual capacity, and no recourse under or upon any obligation,
covenant, or agreement in the Documents contained or otherwise based upon or in
respect of the Documents, or for any claim based thereon or otherwise in respect
thereof, shall be had against any past, present or future member, officer, agent
(other than the Company), servant or employee, as such of the Agency or of any
successor public benefit corporation or political subdivision or other successor
entity or any person executing the Documents on behalf of the Agency, either
directly or through the Agency or any successor public benefit corporation or
political subdivision or other successor entity or any person so executing the
Documents, it being expressly understood that the Documents are solely corporate
obligations, and that no such personal liability whatever shall attach to, or is
or shall be incurred by, any such member, officer, agent (other than the
Company), servant or employee of the Agency or of any successor public benefit
corporation or political subdivision or other successor entity or any person so
executing the Documents because of the creation of the indebtedness thereby
authorized, or under or by reason of the obligations, covenants or agreements
contained in the Documents or implied therefrom; and that any and all such
personal liability of, and any and all such rights and claims against, every
such member, officer, agent (other than the Company), servant or employee
because of the creation of the indebtedness hereby authorized, or under or by
reason of the obligations, covenants or agreements contained in the Documents or
implied therefrom, are, to the extent permitted by law, expressly waived and
released as a condition of, and as a consideration for, the execution of the
Documents.
(b) The obligations and agreements of the Agency contained herein
shall not constitute or give rise to an obligation of the State of New York or
Oneida County, New York, and neither the State of New York nor Oneida County,
New York shall be liable thereon, and further such obligations and agreements
shall not constitute or give rise to a general obligation of the Agency, but
rather shall constitute special obligations of the Agency payable solely from
the revenues of the Agency derived and to be derived from the lease, sale or
other disposition of the Project Facility.
(c) Notwithstanding any provision of this Agreement to the contrary,
the Agency shall not be obligated to take any action pursuant to any provision
hereof unless (i) the Agency shall have been requested to do so in writing by
the Company and (ii) if compliance with such request is reasonably expected to
result in the incurrence by the Agency (or any member, officer, agent, servant
or employee of the Agency) in any liability, fees, expenses or other costs, the
Agency shall have received from the Company
35
security or indemnity satisfactory to the Agency for protection against all such
liability, however remote, and for the reimbursement of all such fees, expenses
and other costs.
IN WITNESS WHEREOF, the Agency and the Company have caused this Lease
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
ONEIDA COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
By: ______________________________________
▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
Chairman
SPECIAL METALS CORPORATION
By: ______________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
President
36