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EXHIBIT 10.8.1
LEASE AGREEMENT
BY AND BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD OF
THE CITY OF DOTHAN, ALABAMA
AND
▇▇▇▇▇▇ INCORPORATED
Dated as of April 30, 1985
The interests of The Industrial Development Board of the City of Dothan,
Alabama in this Lease Agreement and any rents, revenues and receipts derived by
it under this Lease Agreement have been assigned to First Alabama Bank of
Dothan.
Prepared By:
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
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LEASE AGREEMENT
TABLE OF CONTENTS
(This Table of Contents is not a part of this Lease
Agreement and is only for convenience of reference)
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STATEMENT OF FACTS
Parties .........................................................1
Recitals ........................................................1
STATEMENT OF TERMS
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1 Definitions .....................................................2
Section 1.2 Rules of Construction ...........................................8
ARTICLE II
REPRESENTATIONS BY ISSUER
ARTICLE III
REPRESENTATIONS AND COVENANTS BY LESSEE
ARTICLE IV
DEMISING CLAUSE; ACQUISITION, RENOVATION AND
EQUIPPING OF PROJECT; CREATION OF PROJECT FUND
Section 4.1 Demise of the Project ..........................................17
Section 4.2 Issuance of the Bond; Application of Proceeds ..................17
Section 4.3 Disbursements from the Construction Fund .......................20
Section 4.4 Request for Advance--Generally..................................21
Section 4.5 Request for Advance--Final .....................................21
Section 4.6 Conditions Precedent to Disbursements ..........................22
Section 4.7 Authorized Lessee Representative;
Authorized Issuer Representative ...............................22
Section 4.8 Investment of Construction Fund and Bond Fund Moneys Permitted .23
Section 4.9 Special Arbitrage Covenants ....................................23
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ARTICLE V
EFFECTIVE DATE OF THE LEASE; DURATION OF LEASE
TERM; RENTAL PROVISIONS
Section 5.1 Effective Date of this Lease Agreement;
Duration of Lease Term .........................................24
Section 5.2 Delivery and Acceptance of Possession . ........................24
Section 5.3 Amounts Payable ................................................24
Section 5.4 Place of Rental Payments .......................................24
Section 5.5 Obligations of Lessee Hereunder Unconditional ..................24
ARTICLE VI
MAINTENANCE, TAXES AND INSURANCE
Section 6.1 Maintenance and Modification of Project
by Lessee ......................................................25
Section 6.2 Removal of Equipment ...........................................26
Section 6.3 Taxes, Other Governmental Charges and
Utility Charges ................................................26
Section 6.4 Insurance Required .............................................27
Section 6.5 Performance by Issuer or Bank ..................................28
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damage and Destruction .........................................29
Section 7.2 Condemnation ...................................................30
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1 No Obligation of the Issuer with
Respect to Project .............................................32
Section 8.2 Right of Access to the Project .................................32
Section 8.3 Granting of Easements Affecting
Project Site ...................................................32
Section 8.4 Release and Indemnification
Covenants ......................................................32
Section 8.5 Financial Statements ...........................................33
Section 8.6 Further Assurances and Corrective
Instruments ....................................................34
Section 8.7 Tax Exempt Status on the Bond ..................................34
Section 8.8 Payment of Issuer Expenses .....................................34
Section 8.9 Investment Tax Credit ..........................................35
Section 8.10 Registration and Transfer of the Bond ..........................35
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Section 8.11 Representations and Agreements of
Lessee and Issuer with Respect to
Capital Expenditures ...........................................36
ARTICLE IX
ASSIGNMENT AND SUBLEASING; SELLING; PREPAYMENT;
RENT PREPAYMENT AND ABATEMENT
Section 9.1 Assignment and Subleasing ......................................37
Section 9.2 Assignment of Revenues and Lease
Agreement by Issuer ............................................37
Section 9.3 Restrictions on Sale of Project by
Issuer .........................................................37
Section 9.4 Redemption of Prepayment of Bond ...............................37
Section 9.5 Prepayment of Rents ............................................38
Section 9.6 References to Bond Ineffective After
Bond Paid ......................................................38
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default Defined ......................................38
Section 10.2 Remedies on Default ............................................40
Section 10.3 No Remedy Exclusive ............................................41
Section 10.4 Agreement to Pay Attorneys' Fees and
Expenses........................................................41
Section 10.5 No Additional Waiver Implied by One
Waiver .........................................................41
Section 10.6 Waiver of Appraisement and Valuation ...........................41
ARTICLE XI
OPTIONS AND OBLIGATIONS OF LESSEE
Section 11.1 General Option to Purchase Project .............................42
Section 11.2 Conveyance on Exercise of Option or
Obligation to Purchase .........................................42
Section 11.3 Relative Position of Options and
Lease Assignment ...............................................42
Section 11.4 Determination of Taxability ....................................43
Section 11.5 Release of Unimproved Portion of
Project Site ...................................................43
Section 11.6 Obligation to Purchase Project .................................43
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ARTICLE XII
MISCELLANEOUS
Section 12.1 Immunity of Members, Officers and
Employees Of Issuer ............................................43
Section 12.2 Notices ........................................................44
Section 12.3 Binding Effect .................................................44
Section 12.4 Severability and Governing Law .................................44
Section 12.5 Amendments, Changes and Modifications ..........................45
Section 12.6 Execution Counterparts .........................................45
Section 12.7 Captions .......................................................45
Section 12.8 Net Lease ......................................................45
EXHIBIT A DESCRIPTION OF PROJECT SITE
EXHIBIT B DESCRIPTION OF EQUIPMENT
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THIS LEASE AGREEMENT is dated as of April 30, 1985, and is between THE
INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF DOTHAN, ALABAMA (the "Issuer" ), a
public corporation, organized pursuant to the laws of the State of Alabama, and
▇▇▇▇▇▇ INCORPORATED, (the "Lessee"), a Delaware corporation.
STATEMENT OF FACTS
The Issuer was created pursuant to Act No. 648 enacted during the 1949
Regular Session of the Alabama Legislature, as amended (appearing as Code of
Alabama, 1975, ss. 11-54-80 through ss. 11-54-101) (the "Act"), for the purpose
of financing projects which will develop and promote for the public good and
general welfare trade, commerce, industry and employment opportunities and will
promote the general welfare of the City of Dothan, Alabama (the "City") and the
State of Alabama (the "State"). The Act authorizes the Issuer to acquire,
improve, enlarge and expand projects for the purpose of promoting industry and
trade by inducing manufacturing, industrial, commercial and research enterprises
to locate in this State or to enlarge or expand existing enterprises for
promoting the use of agricultural products and natural resources of this State,
and promoting a sound and proper balance between agriculture, commerce and
industry. Any land, building or other improvement thereon and all real and
personal properties deemed necessary in connection therewith, which is suitable
for use by any industry for manufacturing, processing or assembling of any
agricultural or manufactured products and any commercial enterprises in storing,
warehousing, distributing or selling products of agriculture, mining or industry
qualifies as a project. The Act also authorizes the Issuer to lease to others
any or all of such properties. Pursuant to the Act, the Issuer has the power and
authority to issue bonds or other evidences of indebtedness in order to fully
carry out its purposes.
The Lessee has requested the Issuer to issue its revenue bond to pay the
costs of acquiring, constructing, enlarging and equipping certain real property
located at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ (the "Project"), for lease to
the Lessee for use as a coal-fired boiler facility.
After careful study and investigation of the nature of the Lessee's
request, the Issuer has determined that the acquisition, renovation, enlarging
and equipping of the Project for lease to the Lessee will result in the
promotion of the public good and general welfare, trade, commerce, industry and
employment opportunities and the promotion of the general welfare of the City
and State, and that the Issuer, in issuing its revenue bond to pay the costs of
the Project, will be acting in furtherance of the public purposes for which it
was created.
By proper action, the Issuer has authorized the issuance of its $1,590,000
principal amount Industrial Revenue Bond, Series 1985 (▇▇▇▇▇▇ Project #2) (the
"Bond").
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In consideration of the foregoing premises and the respective
representations and agreements herein contained, the Issuer and the Lessee
agree as follows:
STATEMENT OF TERMS
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
Section 1.1. Definitions.
The "Act" means Act No. 648 enacted during the 1949 Regular Session of the
Alabama Legislature, as amended.
"Additional Bonds" means any Bonds issued pursuant to Section 203 of the
Indenture and Section 4.2(h) hereof.
"Authorized Issuer Representative" means the person designated as
Authorized Issuer Representative pursuant to the provisions of Section 4.7
hereof.
"Authorized Lessee Representative" means the person designated as
Authorized Lessee Representative pursuant to the provisions of Section 4.7
hereof, who is that same person or persons designated as "Project Supervisor"
for purposes of the Indenture.
"Bank" means First Alabama Bank of Dothan, a state banking association
organized under the laws of the State of Alabama, whose principal office is
located in the City of Dothan, Alabama.
"Base Rate" means the rate of interest designated by the Bank periodically
as its base rate. Such rate which is in effect as of the close of business on
each business day shall be the effective applicable rate for that day and for
any succeeding non-business day.
"Bond" means The Industrial Development Board of the City of Dothan,
Alabama Industrial Revenue Bond, Series 1985 (▇▇▇▇▇▇ Project #2) in the original
principal amount of $1,590,000.
"Bond Counsel" means an attorney or a firm of attorneys with nationally
recognized expertise in matters of municipal finance.
"Bond Fund" means the Bond Fund created in Section 402 of the
Indenture.
"Bondholder" or "holder" or "owner" of the Bond means the Bank and any
subsequent registered owner or owners of the Bond.
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"Building" means the buildings, structures and other facilities or
improvements forming a part of the Project, as they may at any time exist,
including any air conditioning and heating systems (which shall be deemed
fixtures), as more particularly described in Exhibit A attached hereto and made
a part hereof by reference.
"Building Value" means the fair rental value of the Building.
"City" means the City of Dothan, Alabama.
"Code" means the Internal Revenue Code of 1954, as amended.
"Completion Date" means the date specified as such in Section 4.2 hereof.
"Construction Fund" means the fund established pursuant to Section 303 of
the Indenture.
"Costs of the Project" means the payments for the items set forth in
Section 4.3 hereof.
"Equipment" means all items, if any, of equipment, machinery, apparatus,
fittings, furniture, furnishings and personal property of every kind or
description whatsoever now or hereafter located on the Project Site (but limited
only to those items which were purchased with any of the proceeds of the Bond),
together with all substitutions for and replacements of the foregoing (including
but not limited to those items of the Equipment more particularly described in
Exhibit B, attached hereto and made a part hereof by reference).
"Equipment Book" means the records of the Lessee which contain a list and
description, to the extent reasonable, of all items of property constituting a
part of the Equipment as they shall exist at any time.
"Event of Default" means any of the events specified as such in and
defined as such by Section 10.1 hereof.
"Financing Documents" means this Lease Agreement, the Bond, the
Indenture, the Guaranty and the Lease Assignment.
"Financing Statements" means any Uniform Commercial Code financing
statement which may be filed with respect to the security interests granted
under this Lease, the Indenture, the Lease Assignment or any other Financing
Documents, in such form and with such signatures as may be required by the laws
of the applicable jurisdictions.
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"Governing Body" means the directors of the Issuer or the successor to the
powers of the directors of the Issuer.
"Governmental Authority" means the United States, any state of the United
States and any county, city or political subdivision thereof and any board,
bureau, council, commission, department, agency, court, legislative body or
other instrumentality of the United States, any state of the United States or
any county, city or political subdivision thereof.
"Governmental Requirement" means any constitution, law, statute, code,
ordinance, resolution, rule, regulation, requirement, directive, judgment, writ,
injunction, order, decree or demand of any Governmental Authority.
"Guaranty" means the Guaranty and Indemnification Agreement, dated as of
the date of the Issuance of the Bond, by and between the Lessee and the Bank,
guaranteeing to the Bank all payments under this Lease Agreement and the Bond
and other amounts specified therein.
"Guarantor" means any person, firm or corporation that may enter into any
Guaranty and Indemnification Agreement guaranteeing the performance of all or
any of the agreements of the Lessee under this Lease Agreement, or the payment
of the principal of, premium, if any, and interest on the Bond, and their
heirs, executors, successors and assigns.
"Indenture" means the Mortgage, Security Agreement & Indenture of Trust
between the Issuer and the bank therein named as Trustee, dated as of the date
of issuance of the Bond, and pursuant to which (i) the Bond has been issued and
(ii) the Issuer's interest in this Lease Agreement, the rents and revenues
received by the Issuer from the Project and the Project itself are pledged and
conveyed as security for any and all payments whatsoever due on the Bond.
"Independent Counsel" means an attorney duly admitted to practice law
before the highest court of any state and not an officer or a full-time employee
of the Issuer or the Lessee, but who may be counsel to the Issuer or the Lessee.
"Issuer" means (i) The Industrial Development Board of the City of
Dothan, Alabama and (ii) any public body resulting from or surviving any
consolidation or merger to which it or its successors may be a party.
"Lease," "Lease Agreement" or "this Agreement" means this Lease Agreement.
"Lease Assignment" means the Collateral Assignment of Leases or Leases and
Rents, dated as of the date of the issuance of the Bond, by and between the
Issuer and the Bank, assigning the Issuer's interest in this Lease Agreement,
and
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any other leases of the real and personal property covered by this Lease
Agreement and related rights, as security for the Bond.
"Lessee" means ▇▇▇▇▇▇ Incorporated, a Delaware corporation, and its
successors and assigns (to the extent permitted by this Lease Agreement).
"Local Facilities" means facilities (A) located within the Territorial
Area of the Project and (B) the principal user (within the meaning of Section
103(b)(6) of the Code) of which is or will be the Lessee or any principal user
of the Project (within the meaning of Section 103(b)(6) of the Code) or one or
more related persons (as defined in Section 103(b)(6)(c) of the Code) of the
Lessee or any such principal user of the Project.
"Net Proceeds", when used with respect to any insurance (including title
insurance) or condemnation award, means the gross proceeds from the insurance or
condemnation award with respect to which that term is used remaining after
payment of all expenses (including attorneys' fees and expenses of attorneys)
incurred in the collection of such gross proceeds.
"Permitted Encumbrances" means, as of any particular time: (i) the Lease
Agreement, this Indenture and the Financing Statements filed hereunder; (ii)
liens for ad valorem taxes permitted to exist as provided in the Lease Agreement
and not then delinquent; (iii) utility, access and other easements and rights of
way, restrictions and exceptions that are approved in writing by the Bondholder;
(iv) any mechanic's, laborer's, materialmen's, supplier's, or vendor's lien or
right of purchase money security interest in respect thereof, if payment is not
yet due and payable under the contract in question; (v) such minor defects,
irregularities, encumbrances, easements, rights-of-way and clouds on title as
normally exists with respect to properties similar in character to the Project
and as approved in writing by the Bondholder; (vi) The Lease Agreement dated as
of September 1, 1965, as recorded in Miscellaneous Book 38, Page 783, in the
Probate Office of Houston County, Alabama, and the Supplemental Lease Agreement
dated as of March 1, 1966, as recorded in Miscellaneous Book 39, Page 586, in
the Probate Office of Houston County, Alabama, between the Industrial
Development Board of the City of Dothan, Alabama (the "Board"), and Akwell
Industries Incorporated (successor to Universal Compounding Company), which was
transferred by instrument of Assignment and Assumption of Lease Agreement dated
December 18, 1981 from Akwell Industries, Inc., to ▇▇▇▇▇▇ Life Style Industries,
Inc., and filed for record on January 5, 1982 at Miscellaneous Book 66, Page
507, in the Office of the Judge of Probate of Houston County, Alabama, (vii) the
Mortgage, Indenture and Deed of Trust dated as of September 1, 1965, as recorded
in Mortgage Book 520, Page 827, in the Probate Office of Houston County,
Alabama, and the Supplemental Indenture dated as of March 1, 1966, as recorded
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in Mortgage Book 529, Page 639, in the Probate Office of Houston County,
Alabama, between the Board and The First National Bank of Dothan, (viii) the
Lease Agreement dated as of October 1, 1974, between the Board and Akwell
Industries, Incorporated, as amended by Amendment to Lease Agreement dated as of
July 9, 1981, which was assigned by instrument of Assignment and Assumption of
Lease Agreement dated December 18, 1981 from Akwell Industries, Inc., to ▇▇▇▇▇▇
Life Style Industries, Inc. and recorded on January 5, 1982 at Miscellaneous
Book 66, Page 511, in the Office of the Judge of Probate of Houston County,
Alabama, (ix) subject to utility right of way in deed from ▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇ ▇. ▇▇▇▇▇▇ dated September 1, 1947, as recorded in Miscellaneous Book 17,
Page 351, in the Probate Office of Houston County, Alabama. (x) That certain
Lease Agreement by and between the Industrial Development Board of the City of
Dothan, Alabama, as Lessee, and ▇▇▇▇▇▇ Incorporated, as Lessor, which Lease
Agreement is dated July 25, 1984 and which Lease Agreement was filed for record
on July 25, 1984 at Miscellaneous Book 73, Page 477, in the Office of the
Probate Judge of Houston County, Alabama. (xi) That certain Mortgage, Security
Agreement and Indenture of Trust by and between the Industrial Development Board
of the City of Dothan, Alabama, as Mortgagor, and First Alabama Bank of Dothan,
Dothan, Alabama, as Mortgagee; which Mortgage is dated July 25, 1984 and was
filed for record on July 25, 1984 at Mortgage Book 670, Page 479, in the Office
of the Probate Judge of Houston County, Alabama, plus right of way. (xii)
Subject to Easement granted by The Industrial Development Board of the City of
Dothan, Alabama, for Storm Drainage and Sanitary Sewer Line which is recorded in
the Office of the Judge of Probate of Houston County, Alabama at Miscellaneous
Book 225 on Page 573. (xiii) Subject to Easement granted by ▇▇▇▇▇ ▇▇▇▇▇▇▇,
President of Akwell Industries, Inc. for Storm Drainage and Sanitary Sewer Line
which is recorded in the Office of the Judge of Probate of Houston County,
Alabama at Miscellaneous Book 225 on Page 567. (xiv) Subject to Easement granted
by The Industrial Development Board of the City of Dothan, Alabama, by ▇▇▇▇▇ ▇.
▇▇▇▇, Chairman, for Storm Drainage and Sanitary Sewer Line which is recorded in
the Office of the Judge of Probate of Houston County, Alabama at Miscellaneous
Book 205 on Page 367. (xv) Subject to Easement granted by Economy Homes, Inc.
for Guy Wire and Anchor Permit which is recorded in the Office of the Judge of
Probate of Houston County, Alabama, at Miscellaneous Book 43 on Page 253.
"Person" or "person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated association or
government or any political subdivision thereof or any department or agency
thereof.
"Plans" means the informal plans for acquisition, renovation and equipping
of the Project, prepared by the Lessee or its agents, and as further amended
from time to time as permitted herein.
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"Principal Project User" means the Lessee, any other principal user
(within the meaning of Section 103(b)(6) of the Code) of the Project and any
related person (as defined in Section 103(b)(6)(C) of the Code) of the Lessee or
any such principal user of the Project.
"Prior Issues" shall mean the following industrial revenue development
bonds: (a) that certain issue dated as of March 1, 1966 and entitled The
Industrial Development Board of the City of Dothan, Alabama's $250,000
Industrial Development First Mortgage Revenue Note, Series B (Akwell Project)
issued to The First National Bank of Dothan; (b) that certain issue dated as of
October 1, 1974 and entitled The Industrial Development Board of the City of
Dothan, Alabama's $800,000 First Mortgage Revenue Bond, Series 1974, A-1; and
(c) that certain issue dated July 1, 1984, and entitled The Industrial
Development Board of the City of Dothan, Alabama's $2,200,000 Industrial
Development Mortgage Revenue Bond, Series 1984 (▇▇▇▇▇▇ Project) issued to First
Alabama Bank of Dothan.
"Project" means the Project Site, the Building and the Equipment
constituting the facilities of the Borrower in the City to be financed with Bond
proceeds, as more fully described in Exhibit A and Exhibit B hereto.
"Project Site" means the real estate described in Exhibit A, attached
hereto and made a part hereof by reference, and being that same realty referred
to in the Indenture as the "Leased Realty" or the "Mortgaged Property".
"Related Person" means any person who or which is a related person within
the meaning of "related person" under Section 103(b)(6)(C) of the Code.
"Rent" or Rental" means the amount of payment provided in Section 5.3
hereof or elsewhere herein for the full and timely payment of the principal,
interest and premium, if any, on the Bond on the proper due dates.
"Space" means the floor space in the Building measured in square feet and
determined both in terms of gross area and in terms of net usable area.
"State" means the State of Alabama.
"Substantially Restored" or "Substantially Restore" means replacement,
repair, rebuilding or restoration of damaged or destroyed property as specified
in Section 7.1 hereof.
"Survey" means the plat or survey for ▇▇▇▇▇▇ Incorporated, dated March 18,
1985, and prepared and sealed by ▇▇▇▇▇ ▇▇▇▇▇ of Judah and Associates, ▇▇▇▇▇▇,
Alabama, Land Surveyors, Registered Land Surveyor No. 9793.
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"Surveyor" means the person duly registered as a land surveyor under the
laws of the State of Alabama who prepared and sealed the Survey.
"Tenant" means any person who at any time uses or occupies any space in
the Project under a lease, sublease, usufruct or other agreement for use or
occupancy, whether existing on the date of this Lease Agreement or arising after
such date and whether written or oral, and each "related person" of such user or
occupant, as the term "related person" is used in Section 103(b)(6)(C) of the
Code. The term Tenant shall not include the Lessee, any such "related person" of
the Lessee, any employee of the Lessee using the Project solely in the course of
his or her employment by the Lessee.
"Tenant Leases" shall mean all leases, subleases, usufructs and other
agreements for use or occupancy of any part of the Project, whether existing on
the date of this Lease Agreement or arising after such date and whether written
or oral. The term Tenant Leases shall not include this Lease Agreement.
"Term" means the period from the effective date of this Lease Agreement
until its termination pursuant to Section 5.1 hereof.
"Territorial Area of the Project" means the City of Dothan, Alabama.
"Title Policy" means the mortgagee's policy of title insurance, insuring
the Bank, to be issued pursuant to Title Insurance Company of Minnesota
commitment for title insurance number P247297, dated April 3, 1985, upon
satisfaction of the requirements for issuance set forth in Schedule B thereof,
subject only to the exceptions set forth in Schedule B thereof, together with
any subsequent endorsements to such policy of title insurance. The title policy
shall provide coverage in an amount equal to the original aggregate principal
amount of the Bond.
"Trustee" means the trustee at the time serving as such under the
Indenture.
"Unimproved" when used with reference to the Project Site, means any part
or parts of the Project Site upon the surface of which no part of a building or
other structure rests.
Section 1.2. Rules of Construction. (a) "Herein," "hereby," "hereunder,"
"hereof," "hereinbefore," "hereinafter" and other equivalent words refer to this
Lease Agreement and not solely to the particular portion thereof in which any
such word is used.
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(b) Words importing the singular number shall include the plural number
and vice versa, and any pronoun used herein shall be deemed to cover all
genders.
(c) All references herein to particular Articles or Sections are
references to Articles or Sections of this Lease Agreement, unless otherwise
indicated.
(d) The terms defined in this Article I (except as herein otherwise
expressly provide or unless the context otherwise requires) for all purposes of
this Lease Agreement shall have the respective meanings specified in this
Article I.
ARTICLE II
REPRESENTATIONS BY ISSUER
The Issuer makes the following representations as the basis for the
undertakings on its part herein contained and hereby covenants and agrees:
(a) The Issuer is a public corporation of the State of Alabama, duly
incorporated pursuant to the provisions of the Act.
(b) Under the provisions of the Act, the Project constitutes a "project"
within the meaning of the Act, the Issuer has the power and authority to enter
into the transactions contemplated by this Lease Agreement and to carry out its
obligations hereunder, including but not limited to all requisite power and
authority under the Act (1) to issue, and deliver the Bond as provided herein,
(2) to finance the Costs of the Project, (3) to enter into this Lease Agreement,
and (4) to assign this Lease Agreement pursuant to the Lease Assignment and to
execute and deliver the Indenture.
(c) The Governing Body of the Issuer has duly authorized the execution and
delivery by the Issuer of this Lease Agreement, the Bond, the Lease Assignment,
the Indenture and all other instruments and documents previously or
contemporaneously executed and delivered by the Issuer in connection with the
Bond.
(d) By resolution duly adopted on December 11, 1984, the Issuer took
affirmative action providing for financing the Project through the issuance of
the Bond. Based upon the Lessee's representations, the Issuer has found and does
hereby declare that the issuance of the Bond and the use of the proceeds derived
from the issuance of the Bond to pay the costs of acquiring, renovating,
enlarging and equipping the Project for lease to the Lessee will result in the
promotion of the public good and general welfare, trade, commerce, industry and
employment opportunities and the promotion of the general welfare and further
the use of agricultural products and natural resources of the City and State,
and the Issuer, in
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issuing the Bond, will be acting in furtherance of the public purposes for which
it was created.
(e) The Bond will be payable and bear interest as set forth therein. As
security for payment of the principal of, premium, if any, interest on and other
amounts payable under the Bond, the Issuer will assign this Lease Agreement to
the Bank pursuant to the Lease Assignment and will convey the Project to the
Bank pursuant to the Indenture. The Issuer will not otherwise assign this Lease
Agreement or pledge any payments under this Lease Agreement or transfer or
otherwise dispose of the Project.
(f) There are no actions, suits, proceedings, inquiries or investigations
pending, or to the knowledge of the Issuer threatened, against or affecting the
Issuer in any court or before any Governmental Authority or arbitration board or
tribunal, which involve the possibility of materially and adversely affecting
the transactions contemplated by this Lease Agreement or which, in any way,
would adversely affect the validity or enforceability of the Bond, this Lease
Agreement, the Lease Assignment, the Indenture or any agreement or instrument to
which the Issuer is a party and which is used or contemplated for use in the
consummation of the transactions contemplated hereby or thereby.
(g) Neither the nature of the Issuer nor any of its activities or
properties, nor any relationship between the Issuer and any other person, nor
any circumstance in connection with the issuance of the Bond is such as to
require the consent, approval or authorization of, or the filing, registration
or qualification with, any Governmental Authority on the part of the Issuer in
connection with the execution, delivery, and performance of this Lease
Agreement, the Lease Assignment and the Indenture or the issuance of the Bond,
other than (i) the filing of the information required by Section 103(l)(2) of
the Code (Internal Revenue Service form 8038) and (ii) the recording of the
Indenture and the Lease Assignment and the filing of Financing Statements to
perfect the security interests created under the Indenture and the Lease
Assignment.
(h) No event has occurred and no condition exists which would constitute
an Event of Default as defined in this Lease Agreement or which, with the lapse
of time or with the giving of notice or both, would become such an Event of
Default.
(i) Neither the execution and delivery of the Bond, this Lease Agreement,
the Indenture and the Lease Assignment, nor the consummation of the transactions
contemplated hereby and thereby, nor the fulfillment of or compliance with the
terms and conditions of the Bond, the Lease Assignment, the Indenture and this
Lease Agreement, will constitute or result in a violation or breach of or
default under, or result in the creation of a lien or encumbrance (other than a
Permitted
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Encumbrance) upon any property of the Issuer under, the provisions of any
charter instrument, by-law, indenture, mortgage, deed to secure debt, security
agreement, promissory note, lease or other agreement or instrument to which the
Issuer is a party or by which the Issuer is bound or any license, judgment,
decree, law, statute, order, rule or regulation of any court or Governmental
Authority having jurisdiction over the Issuer or its activities or properties.
(j) This Lease Agreement has not been pledged or hypothecated in any
manner or for any purpose other than as provided in the Lease Assignment as
security for the payment of the Bond.
(k) Other than the Prior Issues heretofore defined, the Issuer has issued
no "obligations" (as that term is used in Section 103(b)(6) of the Code), the
proceeds of which have been or will be used with respect to Local Facilities.
(l) Pursuant to Section 103(k)(2) of the Code, a public hearing (the
"Hearing") on issuance of the Bond was held by the City on March 27, 1985.
Notice of the Hearing was published in The Dothan Eagle on March 11, 1985. The
Mayor of the City of Dothan, Alabama, acting as chief executive officer,
following final approval by the Issuer and the Hearing conducted by the City,
approved issuance of the Bond on April __, 1985.
(m) Prior to or concurrently with issuance of the Bond, the Issuer will
complete and file the information required by Section 103(l)(2) of the Code
(Internal Revenue Service Form 8038).
(n) No commitment to acquire or purchase any portion of the Project, which
will be paid for with proceeds from the sale of the Bond, was made by the
Lessee, any Guarantor, or any related person or persons (as defined in Section
103(b) of the Code and regulations thereunder) prior to December 11, 1984.
(o) The Project is located wholly within the City and will constitute a
"project" within the meaning of the Act.
(p) Prior to issuance of the Bond, the Issuer shall duly elect to have the
provisions of Section 103(b)(6)(D) of the Code apply to such issue, and such
election shall be made in accordance with the applicable regulations or
procedures of the Code.
ARTICLE III
REPRESENTATIONS AND COVENANTS BY LESSEE
The Lessee makes the following representations as the basis for the
undertakings on the Lessee's part herein contained and hereby covenants and
agrees:
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(a) The Lessee is a corporation organized and existing under the laws of
the State of Delaware, and its principal officers are more than twenty-one (21)
years of age, are of sound mind and executed and delivered this Lease Agreement
and the Guaranty free from duress, coercion or other defenses to the execution
thereof, with full authority and power to do so, on behalf of and as and for the
official act of the Lessee. The Lessee will not change its principal place of
business without first giving the Bank at least sixty (60) days prior written
notice of-its new address and county.
(b) The Lessee has the power and authority to enter into the transactions
contemplated by the Financing Documents and has duly executed and delivered this
Lease Agreement and the Guaranty.
(c) Neither the execution and delivery of this Lease Agreement or the
Guaranty, nor the consummation of the transactions contemplated hereby and
thereby, nor the fulfillment of or compliance with the terms and conditions of
this Lease Agreement or the Guaranty, will constitute or result in a violation
or breach of or default under, or result in the creation of a lien or
encumbrance (other than a Permitted Encumbrance) upon any property of the Lessee
under, the provisions of any charter instrument, by-law, indenture, mortgage,
deed to secure debt, security agreement, promissory note, lease or other
agreement or instrument to which the Lessee is a party or by which the Lessee
is bound or any license, judgment, decree, law, statute, order, rule or
regulation of any court or Governmental Authority having jurisdiction over the
Lessee or the Lessee's activities or properties.
(d) This Lease Agreement and the Guaranty constitute valid and binding
obligations of the Lessee, enforceable in accordance with their terms, except to
the extent that enforcement may be limited by bankruptcy, insolvency or other
similar laws of general application affecting the rights of creditors or by
general principles of equity.
(e) There are no actions, suits, proceedings, inquiries or investigations
pending, or threatened, against or affecting the Lessee in any court or before
any Governmental Authority or arbitration board or tribunal, which involve the
possibility of materially and adversely affecting the properties, business,
prospects, profits or condition (financial or otherwise) of the Lessee, or the
ability of the Lessee to perform the Lessee's obligations under any of the
Financing Documents, or which, in any way, would adversely affect the validity
or enforceability of this Lease Agreement, the Guaranty, or any agreement or
instrument to which the Lessee is a party and which is used or contemplated
hereby or thereby. The Lessee is not in default with respect to any order or
decree of any court, Governmental Authority or arbitration board or tribunal.
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(f) No representation or covenant contained in this Lease Agreement or in
any schedule, certificate or other report delivered or to be delivered to the
Bank pursuant hereto or in connection with the Financing Documents, including,
without limitation, any financial statements of the Lessee, contains or shall
contain any untrue statement of a material fact as of the date made or omits or
shall omit any material fact necessary in order to make any such representation
or covenant not misleading in any material respect as of the date made.
(g) No event has occurred and no condition exists which would constitute
an Event of Default as defined in this Lease Agreement or which, with the lapse
of time or with the giving of notice or both, would become such an Event of
Default.
(h) The issuance of the Bond by the Issuer has induced the Lessee to lease
the Project.
(i) The Lessee will operate the Project only for purposes permitted by the
Act until the Bond is paid and satisfied in full, and its initial intended use
is as an office building.
(j) Ninety percent (90%) or more of the proceeds of the sale of the Bond
will be used to pay those items of the Costs of the Project, or portions
thereof, which constitute costs of acquisition, construction, reconstruction or
improvement of land or property of a character subject to the allowance for
depreciation within the meaning of Section 103(b)(6)(A) of the Code. None of the
proceeds of the sale of the Bond will be used, directly or indirectly, as
working capital (as the term "working capital" is used in
Section 21.103-10(b)(1)(ii) of the regulations promulgated under Section 103 of
the Code) or to finance inventory.
(k) Other than the Prior Issues heretofore defined, as of the date of
issuance of the Bond, there are not outstanding any bonds or other obligations
(as the term "obligations" is used in Section 103(b)(6)(B) of the Code) issued
by the Issuer or any other issuer, the proceeds of which were to be used with
respect to Local Facilities.
(l) Other than the Prior Issues heretofore defined, there are no other
obligations heretofore issued or to be issued by or on behalf of any state,
territory or possession of the United States, or political subdivision of any of
the foregoing, or of the District of Columbia, for the benefit of the Lessee or
any "related person" within the meaning of Section 103(b)(6)(C) of the Code,
which constitute "industrial development bonds" within the meaning of Section
103(b) of the Code and which (i) were or are to be sold at substantially the
same time as the Bond, (ii) were or are to be sold at substantially the same
interest rate as the interest rate on the Bond, (iii) were or are to be sold
pursuant to a common
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plan of marketing with the marketing plan for the Bond, and (iv) are payable
directly or indirectly by the Lessee or from the source from which the Bond is
payable.
(m) No portion of the proceeds of the Bond will be used to provide, and
the Project does not include in whole or in part and will not be used in whole
or in part as, a private or commercial golf course, country club, massage
parlor, tennis club, skating facility (including roller skating, skateboard, and
ice skating), racquet sports facility (including handball or racquetball court),
hot tub facility, suntan facility, racetrack or health club facility. No portion
of the proceeds of the Bond will be used to provide a facility the primary
purpose of which is, and no portion of the Project is for the purpose of or will
be used for providing, retail food and beverage services, automobile sales or
service, recreations, entertainment, gambling, or any store the principal
business of which is the sale of alcoholic beverages for consumption off
premises. No portion of the proceeds of the Bond will be used to provide any
airplane, sky box or other private luxury box.
(n) There is no other obligation which has been issued or will be issued
by or on behalf of any state, territory or possession of the United States, or
any political subdivision of any of the foregoing, or of the District of
Columbia, which is issued as part of the issuance of the Bond and the interest
on which is excluded from gross income under any provision of law other than
Section 103(b)(6) of the Code.
(o) The Lessee (i) will not permit the use of proceeds of the Bond, or
take or omit to take any other action, or permit any action to be taken, which
will cause the interest on the Bond to be or become subject to federal income
taxes under the Code, provided that the Lessee shall not have violated this
representation if the interest on the Bond becomes taxable to a person who is a
"substantial user" of the Project or a "related person" of such substantial
user, within the meaning ascribed to those terms in Section 103(b) of the Code,
and (ii) will file or cause to be filed with the Internal Revenue Service or any
other authorized Governmental Authority any and all statements or other
instruments, if any, required under Section 103 of the Code, including the
regulations thereunder, so that the interest on the Bond will continue to be
excludable from the gross income of the holder of the Bond for federal income
tax purposes.
(p) The average maturity of the Bond does not exceed the average economic
life of the components comprising the Project by more than twenty percent (20%),
determined pursuant to Section 103(b)(14) of the Code.
(q) The Project Site is located entirely within the City, and the Building
and the Equipment will be located entirely on the Project Site. None of the
Equipment shall be removed from
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the Project Site for any purpose (other than temporary removal for the purpose
of making repairs) without the prior written approval of the holder of the Bond.
(r) With respect to the Project and the acquisition, renovation,
enlarging, equipping, use and operation of the Project:
(i) None of the Costs of the Project to be paid from Bond proceeds
were incurred prior to the adoption by the Issuer, on December 11, 1984,
of its resolution providing for the financing of the Project through the
issuance of the Bond.
(ii) The Project, as operated for its intended purpose will in all
respects conform to and comply with all covenants, conditions,
restrictions, and reservations affecting the Project and all Governmental
Requirements of Governmental Authorities having jurisdiction over the
operation of the Project.
(iii) To the extent required by applicable Governmental Requirements
or any effective restrictive covenant as of the date hereof, the
acquisition, renovation, enlarging and equipping of the Project has been
approved by all Governmental Authorities or by the beneficiary of any such
restrictive covenant, as the case may be.
(iv) The Lessee has obtained all certificates, licenses, permits,
authorizations, consents and approvals from Governmental Authorities
required as of the date hereof for the acquisition, renovation, enlarging
and equipping of the Project, and all such certificates, licenses,
permits, authorizations, consents and approvals are in full force and
effect.
(v) All utility services (including, but not limited to, water, storm
and sanitary sewer, gas, electric and telephone facilities) necessary for
the use and operation of the Project for its intended purpose are
available through public or private easements or rights of way at the
boundaries of the Project Site.
(vi) No part of the Project lies within a "special flood hazard area"
as defined and specified by the United States Department of Housing and
Urban Development pursuant to the Flood Disaster Protection Act of 1973.
(vii) The Lessee shall not sublease or rent to, or otherwise permit,
any Tenant under any Tenant Lease, or under any assignment or sublease
under any Tenant Lease, to use or occupy any part of the Building (a) for
any purpose other than purposes permitted by the Act or (b)
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unless the form of lease, identity of tenant, term and rental have been
previously approved in writing by the Bank.
(viii) The Lessee shall at all times use not less than 100% of the
Space, and Space having not less than 100% of the Building Value, for use
in the active conduct of the Lessee's business. The Lessee shall not
sublease or rent to or otherwise permit any Tenant under any Tenant Lease,
or under any assignment or sublease under any Tenant Lease, to use or
occupy more than eight percent (8%) of the Space or Space having more than
eight percent (8%) of the Building Value; provided, however, that the
Lessee may permit such Tenant under a Tenant Lease, or under an assignment
or sublease under a Tenant Lease, to use or occupy more than eight
percent (8%) of the Space or Space having more than eight percent (8%) of
the Building Value if the following requirements are complied with prior
to entering into any such Tenant Lease:
(a) The Lessee shall deliver to the Bank a copy of the form of lease
(or assignment or sublease) which will be used and such form shall be
satisfactory to the Bank. Such Tenant Lease shall require the Tenant to
prepare and file or furnish the Borrower with all information necessary to
file any supplemental statement required of Principal Project Users by
Section 1.103-10(b) (2)(vi)(c) of the regulations promulgated under
Section 103 of the Code in the manner and time required for such filing
and shall require that the Tenant furnish the Lessee (which shall furnish
the Bank) copies of each such supplemental statement prior to filing. Such
Tenant Lease shall also provide, with respect to facilities of which the
Tenant or any Related Person of the Tenant is a principal user,
certification as to capital expenditures (within the meaning of Section
103(b)(6)(D)(ii) of the Code) during the three years prior to issuance of
the Bond, limitations on capital expenditures (within the meaning of
Section 103(b)(6)(D)(ii) of the Code) and certification as to any
outstanding, and limitations on issuance of, other Section 103
Obligations, all designed so that the $10,000,000 limitation contained in
Section 103(b)(6)(D) of the Code will not be exceeded by virtue of capital
expenditures made or obligations issued with respect to facilities of
which the Tenant or any Related Person of the Tenant is a principal user.
(b) The Borrower shall deliver to the Bank an opinion of Bond Counsel
to the effect that the execution, delivery and performance of such Tenant
Lease (or assignment or sublease thereunder, as the case may be) will not
result in an Event of Taxability (as defined in the Bond).
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(s) Less than twenty-five percent (25%) of the proceeds of the Bond will be
used, directly or indirectly, for the acquisition of land (or an interest
therein), and no land to be acquired with any proceeds of the Bond will be used
for farming purposes.
(t) Rehabilitation expenditures, if any, with respect to any existing
building (and the equipment therefor) which is to be acquired with proceeds of
the Bond shall equal or exceed fifteen percent (15%) of the cost of acquiring
such building financed with proceeds of the Bond. For this purpose,
"rehabilitation expenditures" means, any amount properly chargeable to capital
account which is incurred by the person acquiring the building for property (or
additions or improvements to property) in connection with the rehabilitation of
any such building. In the case of an integrated operation contained in a
building before its acquisition, the term "rehabilitation expenditures" includes
rehabilitating existing equipment in such building or replacing it with
equipment having substantially the same function. All such rehabilitation
expenditures shall be incurred not later than two years after the later of the
date on which any such existing building is acquired or the date on which the
Bond is issued.
ARTICLE IV
DEMISING CLAUSE; ACQUISITION, RENOVATION AND
EQUIPPING OF PROJECT; DISBURSEMENTS FROM
CONSTRUCTION FUND
Section 4.1. Demise of the Project. The Issuer demises and leases to the
Lessee, and the Lessee leases from the Issuer, the Project at the rental set
forth in Section 5.3 hereof and in accordance with the provisions of this Lease
Agreement, subject only to Permitted Encumbrances.
Section 4.2. Issuance of the Bond; Application of Proceeds.
Contemporaneously with the execution and delivery of this Lease Agreement, the
Issuer has issued and delivered the Bond to the Bank, and the Bank has paid
therefor a purchase price of $1,590,000. On the terms and conditions of this
Lease Agreement, upon receipt of the proceeds from the sale of the Bond the
Issuer will deposit the same in the Construction Fund as provided in Section
4.3. The moneys in the Construction Fund shall be used for the acquisition,
renovation, enlarging and equipping of the Project. In connection with such
acquisition, renovation, enlarging and equipping, the Lessee, as agent for the
Issuer, represents and agrees as follows:
(a) The Lessee shall cause the Project to be acquired and renovated with
first-class materials and in a good, substantial and workmanlike manner, subject
to the provisions of paragraph (d) below, and Lessee agrees that all plans,
specifications and
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contracts will be approved in writing by the Bank. The Lessee shall also cause
the Project to be equipped with the Equipment (if any) described in Exhibit B
hereto. The Lessee agrees that the acquisition, renovation, enlarging and
equipping of the Project will be completed as promptly as practicable after the
issuance of the Bond (but in no event later than December 31, 1986 which shall
be the Completion Date) but if such acquisition, renovation, enlarging and
equipping is not completed, there shall be no resulting liability on the part of
the Issuer and no diminution in or postponenment of the payments required to be
made by the Lessee hereunder or under the Guaranty.
(b) The Lessee shall cause the acquisition, renovation, enlarging and
equipping of the Project to comply with all applicable Governmental
Requirements. The Lessee shall obtain, or cause to be obtained, and maintain in
full force and effect all certificates, licenses, permits, authorizations,
consents and approvals from Governmental Authorities required for the
acquisition, renovation, enlarging and equipping of the Project. The Lessee
shall also obtain, or cause to be obtained, and maintain in full force and
effect all certificates, licenses, permits, authorizations, consents and
approvals from Governmental Authorities required for the use, occupancy or
operation of the Project. The Lessee shall deliver to the Issuer, the Bondholder
and the Trustee copies of such certificates, licenses, permits, authorizations,
consents and approvals upon written request.
(c) The Lessee, and to the extent applicable the Issuer, shall comply with
restrictive covenants and easements affecting the Project, if any.
(d) The Lessee shall notify the Bondholder and the Trustee within ten (10)
days of the Lessee's discovery or the Lessee's receipt of notification
(whichever occurs first) of any material departure from the Plans and, upon
demand by the Bondholder, shall correct any and all defects in the Project and
any and all material departures from the Plans, except those departures which
the Bondholder has approved.
(e) The Lessee shall purchase on behalf of the Issuer all materials,
personal property, fixtures and equipment to be used or incorporated in the
renovation, enlarging and equipping of the Project, including the Equipment but
excluding any such items purchased by the contractors working on the Project, so
that the absolute ownership thereof is vested in the Issuer immediately upon
delivery thereof to the Project Site. The Lessee shall cause each contractor
working on the Project to purchase all materials, personal property, fixtures
and equipment which such contractor purchases for use or incorporation in the
renovation and equipping of the Project so that the absolute ownership thereof
is vested in such contractor immediately upon delivery thereof to the Project
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Site and the absolute ownership thereof will be vested in the Issuer immediately
upon payment therefor by the Issuer to the contractor. If required by the
Bondholder, the Lessee shall produce and furnish, the contracts, bills of sale,
statements, receipted vouchers, or other agreements under which title thereto is
acquired by the Lessee on behalf of the Issuer or such contractor, as the case
may be. Without limiting the generality of the foregoing, the Lessee expressly
covenants and agrees that the Lessee shall not purchase or permit any contractor
to purchase any such materials, personal property, fixtures or equipment subject
to any security agreement or other agreement or contract under which any person
reserves the right to remove or repossess any such materials, personal property,
fixtures or equipment.
(f) As often as the Issuer or the Bondholder may require, the Lessee shall
permit an engineer or any other person designated by the Issuer or the
Bondholder to enter upon and inspect the Project and all materials to be used in
the acquisition, renovation, enlarging and equipping of the Project, to examine
all detailed plans and shop drawings which may be kept at the construction site,
and to discuss the progress of construction with, and to be advised as to the
same by, the Authorized Lessee Representative or any contractor working on the
Project. Inspection of the construction by an engineer or any other person so
designated shall be for the sole purpose of protecting the security for the
Bond, and such inspection is in no way to be construed as a representation that
there is compliance with the Plans or that the construction of the Project is
free from faulty materials or workmanship.
(g) In the event of default of any contractor or subcontractor under any
contract made by it in connection with the Project, the Issuer, or the Lessee as
agent for the Issuer, shall promptly proceed (at Lessee's sole cost and expense)
to exhaust all remedies of the Issuer and the Lessee against said contractors
and subcontractors or their sureties for the performance of the contract.
(h) Upon the request of the Lessee, if Lessee is not in default hereunder,
the Issuer may issue and sell one or more series of Additional Bonds pursuant to
the Indenture to pay the cost of completing the Project, the costs of additions,
modifications or improvements to the Project, or the costs of additions,
modifications, or improvements to other properties of the Lessee located within
the geographical area of operation of the Issuer in Dothan, Alabama as the
Lessee may deem necessary or desirable; provided, that: (a) in the opinion of
Bond Counsel, which opinion shall be in writing and filed with the Trustee and
the Issuer, the interest on such Additional Bonds shall be exempt from federal
income tax within the limitations of Section 103(b)(6) of the Code and the
regulations thereunder, and the interest on the Bond initially
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issued as a part of the Financing Documents referenced herein will continue to
be exempt from Federal income tax within the limitations of Section 103(b)(6) of
the Code and the regulations thereunder, (b) the terms of such Additional Bonds
are approved in writing by the Lessee, (c) the Issuer and the Lessee enter into
any amendment to this Lease Agreement necessary or desirable in connection with
the issuance of such Additional Bonds, and (d) the Issuer complies with all
other provisions of Section 203 of the Indenture with respect to the issuance of
Additional Bonds.
Section 4.3. Disbursements from the Construction Fund. Money in the
Construction Fund shall be used for the following purposes, which are called
Costs of the Project, but for no other purposes:
(a) Payment or reimbursement of the fees and expenses for recording this
Lease Agreement, the Indenture, the Lease Assignment and any other documents or
instruments required to be recorded or filed under this Lease Agreement; the
fees and expenses for recording or filing any title curative documents and any
other documents or instruments that either the Lessee or bond counsel may deem
desirable to file for record; the fees and expenses for recording or filing any
Financing Statements related to this Lease Agreement, the Indenture or the Lease
Assignment; and the premium for the Title Policy.
(b) Payment or reimbursement of all advances and payments made or costs
incurred prior to or after the delivery of this Lease Agreement for expenditures
in connection with the following: examining title to the Project, preparation of
plans and specifications for the Project (including any preliminary study or
planning of the Project or any aspect thereof and including the Plans),
acquisition, renovation, enlarging and equipping of the Project, acquisition,
construction and installation necessary to provide utility services, all real or
personal properties deemed necessary in connection with the Project or any one
or more of the foregoing expenditures (including architectural, surveying,
engineering and supervisory services with respect to any of the foregoing), and
expenses incidental to any one or more of the foregoing, including the premium
on any payment or performance bonds.
(c) Payment or reimbursement of the legal and accounting fees and
expenses, financial consultant's fees, financing charges (including underwriting
or placement fees) and printing and engraving costs incurred in connection with
the authorization, sale and issuance of the Bond and the preparation and review
of the documents and instruments executed in connection therewith and in
connection with the acquisition, renovation, enlarging and equipping of the
Project.
(d) Payment or reimbursement of the fees, if any, for architectural,
surveying, engineering and supervisory services with respect to the Project.
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(e) Payment or reimbursement of the fees, charges and expenses of the
Trustee incurred under this Agreement including the initial or acceptance fee of
the Trustee.
(f) Payment or reimbursement of any expense incurred in seeking to enforce
any remedy against any supplier, contractor or subcontractor in respect of any
default under a contract relating to the Project.
(g) Payment or reimbursement of any other costs relating to the Project
which proceeds of the Bond may be used to pay under the provisions of the Act.
Section 4.4. Request for Advance -- Generally. The Lessee shall request
disbursements under this Lease Agreement, except for the final disbursement, by
submitting to the Trustee a written requisition for the disbursement, signed by
the Lessee or Authorized Lessee Representative and the Authorized Issuer or
Issuer Representative endorsed by the Bondholder, certifying as provided in
Section 303 of the Indenture.
Section 4.5. Request for Advance -- Final. The Lessee shall request the
final disbursement under this Lease Agreement by submitting to the Trustee a
requisition for disbursement which shall include the information set forth in
Section 303 of the Indenture plus the following:
(a) A written requisition for the disbursement, signed by an Authorized
Lessee Representative and the Issuer Representative endorsed by the Bondholder,
and the certificate required under Section 4.4 of this Lease Agreement and
certifying the total amount of the Costs of the Project.
(b) An additional certificate signed by the Authorized Lessee
Representative, certifying that: (i) the acquisition, renovation, enlarging and
equipping of the Project has been completed to the satisfaction of the Lessee
based upon the Lessee's knowledge at the time; (ii) all other facilities
necessary in connection with the Project have been acquired, renovated, and
equipped to the satisfaction of the Lessee; and (iii) a permanent certificate of
occupancy and all the certificates, licenses, permits, authorizations, consents
and approvals required by any Governmental Authority for the occupancy,
operation and use of the Project for its intended purpose have been obtained, so
that the Project may be fully occupied, operated and used for its intended
purpose immediately. Notwithstanding the foregoing, such certificate may state
that it is given without prejudice to any rights against third parties which
exist on the date of such certificate or which may subsequently come into being
and is given only for the purpose of complying with this Section this Lease
Agreement.
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Section 4.6. Conditions Precedent to Disbursements. In addition to all
other requirements for disbursements under this Lease Agreement, the following
shall be conditions precedent to the Trustee's obligation to make disbursements:
(a) The Issuer and the Lessee shall have submitted a requisition complying
in form and substance with the requirements of Section 4.4 or, in the case of
the final disbursement, Section 4.5, within a reasonable amount of time before
the disbursement is to be made.
(b) The holder of the Bond shall have had the opportunity to inspect the
Project and to consult with the Authorized Lessee Representative and the
Authorized Issuer Representative or, in the presence of the Authorized Lessee
Representative, knowledgeable representatives of any contractors regarding the
progress of acquisition, construction and equipping of the Project, and the
Trustee shall not make any disbursement if, in the judgment of the holder of the
Bond, acquisition, renovation, enlarging or equipping of the Project is not
proceeding on schedule; provided, however, that the holder of the Bond shall
have no obligation to inspect the Project and no liability or obligation by
virtue of any inspection of the Project.
Section 4.7. Authorized Lessee Representative; Authorized Issuer
Representative. Prior to or at the time of the issuance of the Bond, the Lessee
shall by a written certificate furnished to the Issuer and the Bank appoint an
Authorized Lessee Representative for the purpose of taking all actions and
making all certificates required to be taken and made by the Authorized Lessee
Representative under the provisions of this Lease Agreement and may appoint an
alternate Authorized Lessee Representative to take any such action or make any
such certificate if the same is not taken or made by the Authorized Lessee
Representative initially appointed. These certificates shall contain the
specimen signatures of the appointee and alternate (if any) and shall be
furnished to the Issuer and the Bank. In the event any such person, or any
successor appointed pursuant to the provisions of this Section, should resign,
become unavailable or unable to take any action or make any certificate provided
for in this Lease Agreement, another Authorized Lessee Representative or
alternate Authorized Lessee Representative shall thereupon be appointed by the
Lessee.
Whenever under the provisions of this Lease Agreement the approval of the
Lessee is required or the Issuer or the Bank is required to take some action at
the request or direction of the Lessee, such approval or such request or
direction shall be made by the Authorized Lessee Representative unless otherwise
specified in this Lease Agreement, and the Issuer or the Bank shall be
authorized to act and rely upon any such approval, request or direction and the
Lessee shall have no complaint or claim of any nature whatsoever against the
Issuer or the Bank as a result of any such action or reliance.
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Prior to or at the time of the issuance of the Bond, the Issuer shall by a
written certificate furnished to the Lessee and the Bank appoint an Authorized
Issuer Representative for the purpose of taking all actions and making all
certificates required to be taken and made by the Authorized Issuer
Representative under the provisions of this Lease Agreement and may appoint an
alternate Authorized Issuer Representative to take any such action or make any
such certificate if the same is not taken or made by the Authorized Issuer
Representative initially appointed. These certificates shall contain the
specimen signatures of the appointee and alternate and shall be furnished to the
Lessee and the Bank. In the event any such person, or any successor appointed
pursuant to the provisions of this Section, should resign, become unavailable or
unable to take any action or make any certificate provided for in this Lease
Agreement, another Authorized Issuer Representative or alternate Authorized
Issuer Representative shall thereupon be appointed by the Issuer.
Whenever under the provisions of this Lease Agreement the Authorized
Issuer Representative is required to take some action or make a certificate, the
Lessee or the Bank shall be authorized to rely upon any such actions or
certificates and the Issuer shall have no complaint or claim of any nature
whatsoever against the Lessee or the Bank as a result of any action taken in
reliance thereon.
Section 4.8. Investment of Construction Fund and Bond Fund Moneys
Permitted. Upon the written request and direction of an Authorized Lessee
Representative, any money held as a part of the Construction Fund or the Bond
Fund shall be invested or reinvested by the Trustee in Bonds of the United
States or in Bonds of the State of Alabama or deposited in a bank on interest or
invested or reinvested in other investments approved by the Bank. No investment
shall be made which may result in any Bond being considered an "arbitrage bond"
within the meaning of Section 103(c) of the Code. The Trustee may make
investments through its own bond department.
Section 4.9. Special Arbitrage Covenants. The Issuer and the Lessee
certify each to the other and to and for the benefit of the holder of the Bond
that none of the proceeds from the issue of the Bond will be invested or
otherwise used in any manner which would result in the Bond being classified as
an arbitrage bond within the meaning of Section 103(c)(2) of the Code and any
regulations proposed or promulgated thereunder. Pursuant to such certification,
the Issuer and the Lessee jointly and severally obligate themselves to comply
throughout the term of the Bond with the requirements of Section 103(c) of the
Code, and any regulations proposed or promulgated from time to time thereunder,
so that the Bond shall not be classified as an arbitrage bond.
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ARTICLE V
EFFECTIVE DATE OF THIS LEASE; DURATION OF
LEASE TERM; RENTAL PROVISIONS
Section 5.1. Effective Date of this Lease Agreement; Duration of Lease
Term. This Lease Agreement shall become effective on its delivery, and, subject
to the provisions of this Lease Agreement (including particularly Articles X and
XI hereof), shall expire on the date when the final payment on the Bond is due,
or if the Bond and all payments hereunder have not been fully paid then on such
date as such payment or provisions for such payment shall have been made.
Section 5.2. Delivery and Acceptance of Possession. The Issuer hereby
delivers to the Lessee possession of the Project as it exists on the date this
Lease Agreement is executed by the Lessee (subject to the provisions of Section
8.2 and Article X hereof) and the Lessee hereby accepts possession of the
Project as it exists on the date this Lease Agreement is executed by the Lessee.
The Issuer will not take any action, other than pursuant to Article X of this
Lease, to prevent the Lessee from having quiet and peaceful possession and
enjoyment of the Project during the Term and will, at the request of the Lessee
and at the cost of the Lessee, cooperate with the Lessee in order that the
Lessee may have quiet and peaceful possession and enjoyment of the Project.
Section 5.3. Amounts Payable. At least one day before the date when each
payment on the Bond is due, the Lessee shall pay to the Trustee for the account
of the Issuer, as rent for the Project, a sum equal to the amount due on the
Bond, whether as principal, premium, interest or otherwise.
Each rental payment under this Section shall at all times be sufficient to
pay the total amount of principal, interest on, premium, if any, and other
amounts payable under the Bond on the date of each such payment.
If the Lessee fails to make the payments required in this Section within
ten (10) days of the date due, the item or installment so in default shall
continue as an obligation of the Lessee until the amount in default shall have
been fully paid, and the Lessee shall pay the same with a late charge in the
amount of two percent (2%) of the overdue payment.
Section 5.4. Place of Rental Payments. The rental payments required to be
made under Section 5.3 hereof shall be paid directly to the Trustee, at its
principal office, in lawful money of the United States of America in immediately
available funds, for the account of the Issuer.
Section 5.5. Obligations of Lessee Hereunder Unconditional. The
obligations of the Lessee to make the
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payments required under Section 5.3 hereof and to perform and observe the other
agreements on its part contained herein shall be absolute and unconditional and
shall not be subject to diminution by set-off, counterclaim, abatement or
otherwise, and during the Term the Lessee (i) will not suspend or discontinue,
or permit the suspension or discontinuance of, any payments provided for in
Section 5.3 hereof, (ii) will perform and observe all of its other agreements
contained in this Lease Agreement, and (iii) will not terminate this Lease
Agreement for any cause including, without limiting the generality of the
foregoing, impossibility or illegality of performance on the part of the Issuer
or the Trustee of any of the obligations of the Issuer and the Trustee or either
of them under or in connection with the Bond or any of the Financing Documents,
failure to acquire, renovate, enlarge and equip the Project whether on account
of the abandonment of the Project or any curtailment or cessation of the
operation of the Project or any failure or inability of the Lessee to operate or
utilize the Project, force majeure, any acts or circumstances that may
constitute failure of consideration, eviction or constructive eviction, sale,
loss, destruction or condemnation of or damage to the Project, commercial
frustration of purpose, any change in the tax or other laws or administrative
rulings of or administrative actions by any Governmental Authority, or any
failure of the Issuer or the Trustee to perform and observe any agreement,
whether expressed or implied, or any duty, liability or obligation arising out
of or connected with this Lease Agreement.
ARTICLE VI
MAINTENANCE, TAXES AND INSURANCE
Section 6.1. Maintenance and Modification of Project by Lessee. The Lessee
shall, at its own expense, (i) keep the Project in safe condition, and (ii) keep
the Project in good repair and operating condition, making from time to time all
necessary repairs thereto and renewals and replacements thereof, all of which
shall become a part of the Project and shall be included under this Lease
Agreement and the Indenture to the same extent as if originally included
hereunder and thereunder.
The Lessee shall promptly report to the Trustee and the Issuer any
replacements of any part of the Project and shall at all times keep and maintain
the Equipment Book. The Lessee shall deliver the Equipment Book, or a certified
copy thereof, to the Bank within a reasonable time after written request
therefor by the Issuer or the Bank.
The Issuer shall not be under any obligation to renew, repair or replace
any inadequate, obsolete, worn-out, unsuitable, undesirable or unnecessary part
of the Project.
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Section 6.2. Removal of Equipment. The Lessee may remove or permit the
removal of any part of the Project without the prior written consent of the
Issuer or the Trustee, however, as long as the Equipment will be replaced with
new Equipment, and the new Equipment will be acquired in such a manner that no
purchase money security interest will be granted in it and no other security
interest will be granted which would take priority over the security interest
granted under the Indenture. This Section shall be in addition to and shall in
no way limit the provisions of Section 604 of the Indenture.
Section 6.3. Taxes, Other Governmental Charges and Utility Charges. The
Lessee will promptly pay, as the same become due, all utility charges and all
taxes, assessments, and governmental charges of any kind whatsoever that may at
any time be lawfully assessed or levied upon or with respect to the Project or
the Specified Payment Sources (defined in the Bond) including all ad valorem
taxes lawfully assessed upon the Project, all utility and other charges incurred
in the operation, maintenance, use, occupancy and upkeep of the Project, and all
assessments and charges lawfully made by any governmental body for public
improvements that may be secured by or result in 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 Term.
The Lessee may in good faith contest any such taxes, assessments and other
charges, at the Lessee's expense and in the Lessee's name or, if required by
law, in the name of the Issuer. In the event of any such contest, the Lessee may
permit the taxes, assessments or other charges so contested to remain unpaid
during the period of such contest and any appeal therefrom, provided that the
Lessee furnishes the Issuer and the Trustee with an opinion of Independent
Counsel, to the effect that by nonpayment of any such items the security
afforded pursuant to the terms of the Lease Assignment or the Indenture will
not be materially endangered or the Project nor will any part of the Project be
subject to loss or forfeiture. Otherwise such taxes, assessments or charges
shall be paid forthwith. The Issuer at the expense of the Lessee will cooperate
fully with the Lessee in any such contest. Notwithstanding the foregoing,
however, the Lessee shall pay all taxes, assessments and other charges which may
be subject to any contest or any appeal therefrom on or before the date when
payment is required by law, so that, if required by law, payment shall be made
prior to the commencement, during, or prior to or upon the conclusion of any
contest or appeal.
The Lessee may at its own expense and in its own name and behalf apply for
any tax exemption allowed by the State of Alabama or any political or taxing
subdivision thereof under any existing or future provision of law which grants
or may grant any such tax exemption.
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Section 6.4. Insurance Required. Throughout the Term, the Lessee shall
keep the Project continuously insured against such risks as are customarily
insured against with respect to property similar to the Project by businesses of
like size and type (other than business interruption insurance), paying as the
same become due all premiums in respect thereto, including but not necessarily
limited to:
(a) Insurance Protection for direct and indirect damage or loss to
the Project by reason of fire, smoke, tornado, ice, wind, lightning,
water, explosion, riot, vandalism, malicious mischief, and any other
casualty against which the Issuer or the Trustee requires insurance, in an
amount at all times equal to one hundred percent (100%) of the actual cash
value of the Project. The insurance required by this subsection may
contain a deductible provision of not in excess of $1,000 direct damage
applicable to each separate instance of loss or damage insured against.
(b) General public liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the Project and
the adjoining streets, sidewalks and passageways, such insurance to afford
protection under a combined single limits policy of not less than
$1,000,000 with respect to bodily injury and property damage to all
persons, in any one occurrence. Such policies may provide for
self-insurance of the Lessee to the extent of $1,000 with respect to all
claims insured against arising from any single occurrence. Such
self-insurance may, at the Lessee's option, be taken directly as a
deductible amount or indirectly under any type of retrospective rating
arrangement between the Lessee and such insurer as it may select.
(c) During construction and if required by the Trustee or the Bank,
all-risk builders' risk extended coverage insurance on a completed value,
non-reporting form, with limits not less than the total amount to be paid
under any construction contract, which policy shall not contain any
provision terminating its coverage upon occupancy of any part of the
Building. The insurance required by this subsection shall provide
protection for direct and indirect damage or loss to the Project from the
risks named in subsection (a) of this Section and from flood, earthquake,
collapse, collision and theft.
(d) Workers' Compensation insurance as required by law.
The Net Proceeds of the insurance carried pursuant to the provisions
of this Section shall be applied as follows: (i) the Net Proceeds of the
insurance required by subsections (a) and (c) shall be applied as provided
in Section 7.1 hereof; and (ii) the Net Proceeds of the insurance required
by subsections (b) and (d) shall be applied toward extinguishment or
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satisfaction of the liability with respect to which such insurance proceeds have
been or are to be paid.
Each policy required by this Section: (i) shall be issued by a generally
recognized and responsible insurer selected by the Lessee authorized to issue
such coverage, under the form of policy provided, in accordance with the laws of
the State of Alabama; (ii) shall name the Trustee, the Bank and the Issuer as
insured parties (the Trustee, the Bank and the Issuer each being called, in this
Section, an "Additional Insured"); (iii) shall provide that the policy cannot be
cancelled as to each Additional Insured except after the insurer gives each
Additional Insured thirty (30) days written notice of cancellation; (iv) shall
provide that the policy cannot lapse if it is not, renewed for any reason except
after the insurer gives each Additional Insured thirty (30) days written notice
of the non-renewal; (v) shall provide that no material change in the coverage
provided by the policy shall be effective except after the insurer gives each
Additional Insured thirty (30) days written notice of the change; (vi) shall
state that notice of any claim against any Additional Insured shall be deemed to
have occurred only when an officer or authorized agent of the Additional Insured
has received actual notice, and has actual knowledge, of the claim; and (vii)
shall not be subject to invalidation as to any Additional Insured by reason of
any act or omission of the Lessee and shall not be subject to invalidation as to
the Lessee by reason of any act or omission of any Additional Insured.
The Lessee shall not procure or maintain in force any insurance policy
which might have the effect of reducing the loss payable under any policy
required pursuant to this Section. The insurance herein required may be
contained in blanket policies now or hereafter maintained by the Lessee.
Immediately upon the issuance of each policy required under this Section,
the Lessee shall deliver a duplicate original policy or certificate of insurance
to the Trustee. The Lessee shall renew each policy on or before the date
specified therein for renewal and shall within ten (10) days of such renewal
deliver to the Trustee a duplicate original renewal policy, endorsement or
certificate of insurance evidencing such renewal.
Upon request by the Trustee, the Lessee shall execute a separate
instrument to assign to the Bank, as collateral for the Bond, all policies of
insurance required under this Section.
Section 6.5. Performance by Issuer, the Trustee or the Bank. If the Lessee
shall fail to perform any of its duties or obligations under this Lease
Agreement (including, without limitation, Sections 6.1, 6.3 and 6.4) or shall
fail to comply with any provision of this Lease Agreement (including, without
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limitation, Section 6.1, 6.3 and 6.4), the Issuer, the Trustee or the Bank may
(but shall be under no obligation to) pay all amounts, or take any action,
required to perform any of such duties or obligations or to comply with any
provisions of this Lease Agreement (including, without limitation, paying for or
performing required repairs, paying taxes, assessments and other governmental
charges, and obtaining any required insurance policy). All amounts so advanced
by the Issuer, the Trustee or the Bank, and all expenses incurred by the Issuer,
the Trustee or the Bank in taking any such action, shall be additional
obligations of the Lessee to the party making the advance or incurring the
expense, payable upon demand with interest at the rate which is two percent (2%)
per annum more than the Base Rate.
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1. Damage and Destruction. If prior to payment in full of the
Bond the Project is damaged by fire or other casualty to such extent that the
claim for loss (including any deductible amount pertaining thereto) resulting
from such damage is not greater than the amount of the deductible under the
insurance policy required by Section 6.4(a), the Lessee shall be obligated to
continue to pay the amounts required to be paid pursuant to Section 5.3 hereof.
In the event of such damage or destruction, the Lessee shall proceed promptly to
and shall Substantially Restore the property damaged or destroyed.
If prior to payment in full of the Bond the Project is destroyed or is
damaged by fire or other casualty to such extent that the claim for loss
(including any deductible amount pertaining thereto) resulting from such
destruction or damage is in excess of the amount of the deductible under the
insurance policy required by Section 6.4(a), the Lessee shall be obligated to
continue to pay the amounts required to be paid pursuant to Section 5.3 hereof.
In the event of such damage or destruction, the Lessee shall promptly give
written notice thereof to the Trustee, and all Net Proceeds of insurance
resulting from claims for such losses shall be paid to and held in the Bond Fund
by the Trustee and shall be invested in securities of the type referred to in
Section 4.11 hereof. if within thirty (30) days after such damage or destruction
the Lessee exercises its option to purchase the Project pursuant to Section 11.1
of this Agreement, the Trustee shall apply the Net Proceeds to the purchase
price payable by the Lessee at the closing of the Lessee's purchase of the
Project. Otherwise, the Lessee shall proceed promptly to, and shall,
substantially restore the property damaged or destroyed, and the Trustee shall
apply the Net Proceeds of insurance received by it to payment of the costs for
such replacement, repair, rebuilding or restoration as may be required for the
property damaged or destroyed to be Substantially Restored, either on completion
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thereof or as the work progresses, as directed by the Lessee and the Issuer.
Each such direction of the Lessee and the Issuer shall, be accompanied by a
requisition, in form acceptable to the Trustee, signed by the Authorized Lessee
Representative and the Authorized Issuer Representative and approved by the
Bondholder, certifying, as to the replacement, repair, rebuilding or restoration
and as to the Net Proceeds of insurance held by the Trustee, to the same effect
as the certificate of the Authorized Lessee Representative and the Authorized
Issuer Representative required for disbursements from the Construction Fund is
required to certify as to the Construction Fund. The Trustee may conclusively
rely upon such direction of the Lessee and the Issuer and shall have no
liability or responsibility for payments made pursuant to this Section in
reliance thereon. If such Net Proceeds are not sufficient to pay in full the
costs of such replacement, repair, rebuilding or restoration, the Lessee shall
nonetheless complete the work thereof and shall pay that portion of the cost
thereof in excess of the amount of Net Proceeds. The Lessee shall not, by reason
of the payment of such excess costs, be entitled to any reimbursement from the
Issuer or the Trustee or any abatement, dimunition or postponement of the
amounts payable under Section 5.3 hereof.
Any balance of Net Proceeds remaining after payment of all costs of
replacement, repair, rebuilding or restoration required to Substantially Restore
the property damaged or destroyed shall be paid to the Trustee and applied to
prepay the principal balance on the Bond by reducing the principal portion of
payments thereon in the inverse order of their due dates. If payment in full of
the Bond has been made, all Net Proceeds shall be paid to the Lessee.
For purposes of this Lease Agreement, property damaged or destroyed shall
be considered "Substantially Restored" if, within four (4) consecutive months
after the date of damage or destruction, it is in substantially the same
condition as 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, subject to approval
by the Trustee, and as (A) will not impair operating unity or productive
capacity of the Project and (B) will not change the character of the Project to
such an extent that the Issuer would not be permitted to own, finance or lease
the Project under the Act. The action required to "Substantially Restore" the
property damaged or destroyed shall be the action required for the Project to be
Substantially Restored.
Section 7.2. Condemnation. If the title in and to, or the temporary use
of, the Project shall be taken under the exercise of the power of eminent domain
by any Governmental Authority or by any person acting under governmental
authority, the Lessee shall be obligated to continue to pay the amounts
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required to be paid pursuant to Section 5.3 hereof. The Lessee shall pay to the
Trustee the Net Proceeds received by the Lessee from any award made in any such
eminent domain proceeding. The Issuer shall pay to the Trustee the Net Proceeds
received by the Issuer. Unless the Lessee exercises its option to purchase the
Project pursuant to Section 11.1 hereof within thirty (30) days from the date of
entry of a final order in the eminent domain proceeding granting such
condemnation, the Trustee shall apply the Net Proceeds which it receives in one
or more of the following ways, as it shall deem desirable:
(a) the restoration of the Project to substantially the same condition
as existed immediately prior to the acquisition of title by the person
exercising the power of eminent domain;
(b) the acquisition, by construction or otherwise, of other
improvements suitable for the Lessee's operations of the Project and which (A)
will not impair operating unity or productive capacity of the Project and (B)
will not change the character of the Project to such an extent that the Issuer
would not be permitted to own, finance or lease the Project under the Act;
provided, that such improvements will be acquired subject to no liens, security
interests or encumbrances prior to the lien and security interests afforded by
the Lease Assignment and the Indenture, other than Permitted Encumbrances; or
(c) payment to the Trustee to prepay the principal balance on the Bond
by reducing the principal portion of payments thereon in the inverse order of
their due dates and requiring the Lessee to pay any principal balance left due
and owing plus accrued interest thereon as a mandatory repayment of the Bond,
or, if the payment in full of the Bond has been made, payment to the Lessee.
In the event that the Lessee exercises its option to purchase the Project
pursuant to Section 11.1 hereof within thirty (30) days following the entry of a
final order in any such eminent domain proceeding granting such condemnation and
thereafter purchases the Project pursuant to Article XI hereof, the Bank shall
apply the Net Proceeds which it receives from any award made in any such eminent
domain proceeding to the purchase price payable by the Lessee at the closing of
the Lessee's purchase of the Project.
If the Trustee elects a restoration under paragraph (a) or the acquisition of
improvements under paragraph (b), the Lessee shall direct such restoration or
acquisition and such direction shall be accompanied by a certificate of the
Authorized Lessee Representative and the Authorized Issuer Representative and
endorsed by the Bondholder, in form acceptable to the Trustee, as to such
restoration or acquisition and as to the Net
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Proceeds of such condemnation award, and from time to time the Lessee and the
Issuer may direct that the Trustee apply the Net Proceeds toward such
restoration or such acquisition, as the case may be, as costs of the restoration
or acquisition are incurred, provided that each such direction by the Lessee and
the Issuer will be accompanied by a current certificate of the Authorized Lessee
Representative and the Authorized Issuer Representative and endorsed by the
Bondholder, in form acceptable to the Trustee as to such restoration or
acquisition and as to the Net Proceeds of such condemnation award. The Trustee
may conclusively rely upon any such directions and shall have no liability for
payments made pursuant to this Section in reliance thereon.
The Issuer shall cooperate fully with the Lessee in the handling and conduct of
any prospective or pending eminent domain proceeding with respect to the
Project. In no event will the Issuer or the Lessee voluntarily settle, or
consent to the settlement of, any prospective or pending eminent domain
proceeding with respect to the Project or any part of the Project without the
prior written consent of the other and of the Trustee.
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1. No Obligation of the Issuer with Respect to Project. The
Issuer has, and shall have, no obligation or duty to supervise, inspect or
otherwise observe the Project.
Section 8.2. Right of Access to the Project. In addition to the rights
granted under Section 4.2 hereof, the Issuer, the Trustee and the duly
authorized agents of either or both of them shall have such rights of access to
the Project as may be reasonably necessary to cause to be completed and
acquisition provided for in Section 4.2 hereof and thereafter for the proper
maintenance of the Project in the event of failure by the Lessee to perform its
obligations under Section 6.1 hereof.
Section 8.3. Granting of Easements Affecting Project Site. The Lessee may
at any time or times, but only with written approval of the Bondholder, grant
easements, licenses, rights of way, and other rights or privileges with respect
to the Project Site, provided such grant or conveyance will not impair the
effective use of the Project, will not interfere with the operation of the
Project, will not reduce the value of the Project, and will be subordinate and
inferior to the Indenture and the Lease Assignment.
Section 8.4. Release and Indemnification Covenants. The Lessee releases
the Issuer, the Trustee and the Bank from, covenants and agrees that the Issuer,
the Trustee and the Bank shall not be liable for, and shall indemnify and save
the
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Issuer, the Trustee and the Bank harmless from and against all claims by or on
behalf of any person arising from: (i) the conduct or management of, or from any
work or thing done in or on, the Project during the Term; (ii) any condition of
the Project caused by the Lessee; (iii) any breach or default on the part of the
Lessee in the performance of any of its obligations under this Lease Agreement;
(iv) any act of negligence of the Lessee or of any agents, contractors,
servants, employees or licensees of the Lessee; and (v) any loss or damage to
property or any injury to or death of any persons occurring on or about or
resulting from any defect in the Project. The Lessee shall also indemnify and
save the Issuer, the Trustee and the Bank harmless from and against all costs
and expenses incurred in or in connection with any action or proceeding brought
on any of the matters against which the Lessee has indemnified them under this
Section, and, upon notice from the Issuer, the Trustee or the Bank, the Lessee
shall defend them or either of them in any such action or proceeding. The
foregoing indemnity shall be effective only to the extent of any loss sustained
by the Issuer, the Trustee or the Bank in excess of the Net Proceeds received by
the Issuer, the Trustee or the Bank, as the case may be, from any insurance
carried with respect to the loss sustained and shall not be effective for
damages that result from gross negligence or willful misconduct on the part of
the Issuer, the Trustee or the Bank; provided, however, that the negligence or
misconduct of one indemnified party shall not affect the indemnification of the
other party. Notwithstanding anything in this Lease Agreement to the contrary,
the indemnification agreements contained in this Section shall not be effective
against liability for damage arising out of bodily injury to persons or damage
to property caused by or resulting from the sole negligence of the Issuer, the
Trustee or the Bank, as the case may be.
Section 8.5. Financial Statements. The Lessee shall furnish to the
Trustee:
(a) As soon as practicable after the end of each calendar year, and in
any event within ninety (90) days thereafter, duplicate copies of a balance
sheet and statement of income for the Lessee in the form then currently used by
the Trustee and such other financial information (including copies of federal
and state income tax returns as filed) as the Trustee may reasonably request;
and
(b) promptly upon receipt thereof, one copy of an annual audited
financial report submitted to the Lessee by independent accountants in
connection with an annual audit made by them on the books of the Lessee.
Each balance sheet and statement of income shall be in reasonable detail,
satisfactory in scope to the Trustee and certified as accurate and complete by
the Lessee and any
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accountant or agent who prepared them or assisted in preparing them.
Section 8.6. Further Assurances and Corrective Instruments. The Issuer and
the Lessee shall, from time to time, execute, acknowledge and deliver, or cause
to be executed, acknowledged and delivered, such supplements hereto and such
further instruments as may reasonably be required for correcting any inadequate
or incorrect description of the Project or for carrying out the intention of or
facilitating the performance of this Lease Agreement. The Lessee shall also,
from time to time upon request by the Issuer, the Trustee or the Bank, make,
execute and deliver or cause to be made, executed and delivered any and all
other and further instruments, documents, certificates, agreements, financing
statements, letters, representations and other writings which may be necessary
or desirable, in the opinion of the Issuer, the Trustee or the Bank, in order to
effectuate, complete, correct, perfect or continue and preserve the obligations
of the Lessee under any of the Financing Documents.
Section 8.7. Tax Exempt Status of the Bond. The Lessee shall use ninety
percent (90%) or more of the proceeds derived from the sale of the Bond to pay
those items of the Costs of the Project, or portions thereof, which constitute
costs of acquisition, construction, reconstruction or improvement of land or
property of a character subject to the allowance for depreciation within the
meaning of Section 103(b)(6)(A) of the Code.
The Lessee will not permit the use of the proceeds of the Bond in a
manner, or take or omit to take any other action, or permit any action to be
taken, which will cause the interest on the Bond to become subject to federal
income taxes under the Code, provided, that the Lessee shall not have violated
this covenant if the interest on the Bond becomes taxable to a person who is a
"substantial user" of the Project or a "related person". The terms "substantial
user" and "related person" as used in this Section shall have the meaning
ascribed to them in Section 103(b) of the Code. The Lessee will file or cause to
be filed with the Internal Revenue Service or any other authorized governmental
agency any and all statements or other instruments, if any, required under
Section 103 of the Code, including the regulations thereunder, so that the
interest on the Bond will continue to be excludable from the gross income of the
holder of the Bond for federal income tax purposes.
Section 8.8. Payment of Issuer Expenses. Anything herein to the contrary
notwithstanding, the Lessee covenants to pay any expenses not specifically
mentioned herein which are incurred by the Issuer in connection with the Project
or any of the Financing Documents, and which are not payable from the
Construction Fund pursuant to Section 4.4 hereof.
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Section 8.9. Investment Tax Credit. The Issuer covenants and agrees that
any investment tax credit with respect to any part of the Project shall be made
available to the Lessee and the Issuer will fully cooperate with the Lessee in
any effort by the Lessee to avail the Lessee of any such investment tax credit,
but the Issuer shall have no responsibility or liability for failure of the
Lessee to receive any such investment tax credit.
Section 8.10. Registration and Transfer of the Bond. The Bond shall be
registered as to both principal and interest. The Bond Registrar, as defined in
the Indenture, shall keep registers for registration and transfer of the Bond.
The registration books shall list the names and addresses of each holder of the
Bond as specified by each such holder in writing (delivered to the Bond
Registrar) upon acquisition of its Bond and from time to time thereafter.
Transfer of the Bond shall as provided herein and in Section 210 of the
Indenture be made only upon surrender thereof at the principal office of the
Bond Registrar by the registered owner in person or by his attorney duly
authorized in writing together with a written instrument of transfer in form
reasonably satisfactory to the Issuer and the Trustee, duly executed by the
registered owner or his attorney duly authorized in writing.
The Issuer and Bond Registrar may deem and treat the registered holder of
the Bond as the absolute owner of the Bond for the purpose of receiving payment
of or on account of principal thereof and interest due thereon and for all other
purposes whatsoever, and the Issuer and the Bond Registrar shall not be affected
by any notice to the contrary.
Upon surrender for transfer of the Bond at the principal office of the
Bond Registrar, the Bond Registrar shall either reissue the Bond to the
transferee or transferees or shall execute and deliver to the transferee or
transferees in exchange for the Bond a new registered Bond without coupons in
the same principal amount.
The holder of the Bond shall pay any tax or other governmental charge
required to be paid with respect to any transfer of the Bond.
If any holder of the Bond sells, transfers, assigns or otherwise disposes
of any interest in the Bond, such sale, transfer, assignment orother disposition
(hereinafter generally referred to as a "transfer"): (i) shall be recorded
reflecting the ownership of the transferee on the books of the holder; (ii) the
holder shall receive the interest or principal payments with respect to the
transferee's interest in the Bond as agent for the transferee; and (iii) any
transfer of the transferee's interest must be recorded on the books of the
holder in a book entry system.
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Section 8.11. Representations and Agreements of Lessee and Issuer with
Respect to Capital Expenditures. The Issuer is issuing the Bond pursuant to an
election made by it (prior to issuance of the Bond) under Section 103(b)(6)(D)
of the Code. It is the intention of the parties hereto that the interest on the
Bond be and remain free from federal income taxation, and, to that end, the
Lessee and the Issuer represent and agree with each other as follows:
(a) The Lessee represents that the sum of (i) the aggregate principal
amount of the Bond being issued plus (ii) capital expenditures made during the
three year period immediately preceding the issuance and delivery of the Bond
(other than those mentioned in Section 103(b)(6)(F) of the Code) with respect
to Local Facilities does not exceed $10,000,000.
(b) During the three-year period immediately following the date of the
issuance and delivery of the Bond, the Lessee shall not make or cause or permit
to be made any capital expenditures (other than those mentioned in section
103(b)(6)(F) of the Code) with respect to Local Facilities which would cause
the interest payable on the Bond to be or become subject to federal income
taxation.
(c) Within ninety (90) days after the first three anniversary dates of
the issuance and delivery of the Bond, the Lessee shall furnish to the holder of
the Bond a certificate of an independent certified public accountant (or firm
thereof) stating that, during the period beginning three years prior to the date
of issuance and delivery of the Bond and extending through the applicable date
such certificate is to cover, capital expenditures (including as capital
expenditures for this purpose the original principal amount of the Bond) in
excess of $10,000,000 (or any such larger amount as may at the time be permitted
by law) have not been paid or incurred with respect to Local Facilities. Each
such certificate shall list and describe by date, payee and purpose all such
capital expenditures paid or incurred since the period covered by the preceding
such certificate or, in the case of the first such certificate, since the date
of issuance of the Bond.
(d) The Issuer and the Lessee shall fully comply, during the term of
this Lease Agreement, with all rules, rulings, and regulations promulgated by
the Department of the Treasury or the Internal Revenue Service with respect to
bonds issued under Section 103(b)(6)(D) of the Code so as to maintain the
tax-exempt status of the interest payable on the Bond. Without limiting the
generality of the foregoing, the Lessee shall file, and shall cause each
Principal Project User to file, a copy of the Issuer's election to have Section
103(b)(6)(D) apply to the Bond with the Lessee's or such Principal Project
User's (as the case may be) federal income tax return for the
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fiscal year which includes the date of issuance of the Bond, and the Lessee
shall file, and shall cause each Principal Project user to file, all
supplemental statements listing capital expenditures when and as required by the
regulations promulgated under Section 103 of the Code.
ARTICLE IX
ASSIGNMENT AND SUBLEASING; SELLING; PREPAYMENT;
RENT PREPAYMENT AND ABATEMENT
Section 9.1. Assignment and Subleasing. The Lessee shall not assign this
Lease or sublease the Project, as a whole or in part, without obtaining the
prior written consent of the Issuer, the Trustee and the Bondholder.
Section 9.2. Assignment of Revenues and Lease Agreement by Issuer. This
Lease Agreement and all rents, revenues and receipts derived by the Issuer under
this Lease Agreement, including but not limited to all payments required under
Section 5.3 hereof, are assigned to the Trustee pursuant to the Lease Assignment
as security for payment of the principal of, premium, if any, interest on and
other amounts payable under the Bond. The Lessee assents to such assignment and
further agrees to assign all rents and revenues derived by Lessee under any and
all subleases of the Project, and hereby agrees that, as to the Trustee, the
Lessee's obligation to make such payments shall be absolute and shall not be
subject to any defense or any right of set-off, counterclaim or recoupment
arising out of any breach by the Issuer of any obligation to the Lessee, whether
hereunder or otherwise. The Issuer hereby directs the Lessee, and the Lessee
hereby agrees, to pay to the Trustee all amounts payable to the Issuer pursuant
to this Lease Agreement, other than amounts paid on account of or to reimburse
the Issuer for expenses of the Issuer which the Lessee is required to pay and
other than amounts to be paid the Issuer as indemnification.
Section 9.3. Restrictions on Sale of Project by Issuer. The Issuer shall
not sell, convey, assign, transfer, mortgage, encumber or otherwise dispose of
any part of the Project during the Term, without obtaining the prior written
consent of the Trustee, the Lessee and the Bondholder.
Section 9.4. Redemption or Prepayment of Bond. If no Event of Default
exists, the Issuer, upon receipt of written notice from the Lessee and the
Trustee directing prepayment of the Bond in accordance with the provisions of
the Bond, shall forthwith take all steps that may be necessary under the Bond to
effect prepayment or redemption of all or part of the Bond as may be specified
by the Lessee, on the earliest prepayment date specified by the Lessee on which
such prepayment may be made under the Bond, provided that the Lessee may direct
the redemption or the prepayment of the Bond as an entirety whether
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or not an Event of Default then exists hereunder. The Issuer shall not be
obligated to arrange for notice of prepayment or to take any other step
necessary for prepayment under the provisions of the Bond unless the Lessee
provides reasonable assurance to the Issuer, the Trustee and the Bank that the
funds required for the proposed prepayment will be available for that purpose on
or before the date of the proposed prepayment. Such assurance shall be provided
at the same time as the Lessee's notice directing prepayment of the Bond is
given to the Issuer.
Section 9.5. Prepayment of Rents. There is expressly reserved to the
Lessee the right, and the Lessee is authorized and permitted, at any time it may
choose, to prepay all or any part of the rents payable under Section 5.3 hereof
(or to cause such rent to be prepaid as contemplated by Bond), and the Issuer
agrees that the Trustee may accept such prepayments when the same are tendered
by the Lessee. All rents so prepaid shall be credited to the rental payments
specified in Section 5.3 hereof, in the inverse order of their due dates, and at
the election of the Lessee shall be used for the prepayment of the Bond in the
manner and to the extent permitted under the Bond.
Section 9.6. References to Bond Ineffective After Bond Paid. Upon payment
in full of the Bond (or provision for payment thereof having been made in
accordance with the provisions of the Bond), all references in this Lease
Agreement to the Bond shall be ineffective and neither the Issuer, the Trustee
nor the Bank shall thereafter have any rights hereunder, except for any rights
that shall have theretofore vested.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1. Events of Default Defined. The following shall be "Events of
Default" under this Lease Agreement, and the term "Event of Default" shall mean,
whenever used in this Lease Agreement, any one or more of the following events:
(a) Failure by the Lessee to pay the amounts required to be paid under
Section 5.3 hereof and in Section 901 of the Indenture at the times specified
therein.
(b) Failure by the Lessee to observe and perform any covenant,
condition or agreement on the Lessee's part to be observed or performed under
this Lease Agreement, other than as referred to in subsection (a) of this
Section, for a period of thirty (30) days after the date when written notice
specifying such failure and requesting that it be remedied is given to the
Lessee by the Issuer or the Trustee, unless the Issuer and the Trustee shall
agree in writing to an extension of such time prior to its expiration.
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(c) The occurrence under the Bond or any of the other Financing
Documents of a default, event of default or Event of Default (as such terms may
be defined in any of the other Financing Documents).
(d) The failure by the Lessee promptly to lift any execution,
garnishment or attachment of such consequence as will impair the Lessee's
ability to carry on the Lessee's operations at the Project Site or the entry by
the Lessee into an agreement of composition with the Lessee's creditors.
(e) If the Lessee shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
all or a substantial part of the Lessee's property, (ii) admit in writing the
Lessee's inability, or be generally unable, to pay the Lessee's debts as such
debts become due, (iii) make a general assignment for the benefit of the
Lessee's creditors, (iv) commence a voluntary case under the Federal Bankruptcy
Code (as now or hereafter in effect), (v) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up, or composition or adjustment of debts, (vi) fail to controvert in a
timely or appropriate manner, or acquiesce in writing to, any petition filed
against the Lessee in an involuntary case under said Federal Bankruptcy Code, or
(vii) take any action for the purpose of effecting any of the foregoing.
(f) If a proceeding or case shall be commenced, without the application
or consent of the Lessee, in any court of competent jurisdiction, seeking (i)
the liquidation, reorganization, dissolution, winding-up, or composition or
readjustment of debts of the Lessee, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of all or any substantial part of
the assets of the Lessee, or (iii) similar relief in respect of the Lessee under
any law relating to bankruptcy, insolvency, reorganization, winding-up, or
composition or adjustment of debts, and such proceeding or case shall continue
undismissed, or an order, judgment or decree approving or ordering any of the
foregoing shall be entered and continue unstayed and in effect, for a period of
sixty (60) days from commencement or such proceeding or case or the date of such
order, judgment or decree, or an order for relief against the Lessee shall be
entered in an involuntary case under said Federal Bankruptcy Code.
(g) If for any reason, the Lessee named herein ceases to lease the
Project or to "own" the building as "own" is defined for federal tax purposes;
provided, however, the Trustee may waive this provision by written notice given
to Lessee.
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Section 10.2. Remedies on Default. Whenever any Event of Default referred
to in Section 10. 1 hereof shall have happened and is continuing, the Issuer or
the Trustee, as specified below, may, to the extent permitted by law, take any
one or more of the following remedial steps:
(a) The Issuer, with the consent of the Trustee, or the Trustee may,
at its option, or upon written request of the holder of the Bond, shall
declare all installments of rent payable under Section 5.3 hereof
immediately due and payable, whereupon the same shall become immediately
due and payable.
(b) The Issuer, with the consent of the Trustee, or the Trustee may
re-enter and take possession of the Project without terminating this Lease
Agreement and without any liability to the Lessee for such entry and
repossession and sublease the Project for the account of the Lessee,
holding the Lessee liable for the excess, if any, of the rent and other
amounts payable by the Lessee under this Lease Agreement over the rents
and other amounts which are payable by such sublessee under such sublease.
(c) The Issuer, with the consent of the Trustee, or the Trustee may
terminate this Lease, exclude the Lessee from possession of the Project
and use its best efforts to lease the Project to another for the account
of the Lessee, holding the Lessee liable for all rent and other payments
due up to the effective date of such leasing and for the excess, if any,
of the rent and other amounts payable by the Lessee under this Lease had
this Lease not been terminated, over the rents and other amounts which are
payable by such new Lessee under such new Lease.
(d) The Issuer, with the consent of the Trustee, or the Trustee may
from time to time take whatever action at law or in equity may appear
necessary or desirable to collect the rents payable by the Lessee
hereunder then due and thereafter to become due, or to enforce performance
and observance of any obligation, agreement or covenant of the Lessee
under this Lease Agreement or any of the other Financing Documents.
The amounts required to be paid pursuant to subparagraph (a) above shall also
include any other payments then due or to become due hereunder.
Any amounts collected pursuant to action taken under this Section shall be
paid directly to the Trustee.
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This Section shall be construed in conjunction with Section 902 of the
Indenture, and any portion which may appear to be contradictory shall be
construed in favor of the Issuer and the Trustee to give them the most liberal
interpretation for additional remedies in case of default.
Section 10.3. No Remedy Exclusive. No remedy herein conferred upon or
reserved to the Issuer 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 Agreement
or any of the other Financing Documents now or hereafter existing at law or in
equity by statute. No delay or omission to exercise any right or power accruing
upon any failure or Event of 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 Issuer to exercise any remedy reserved to it in this Article, it
shall not be necessary to give any notice, other than such notice as may be
herein expressly required. Such rights and remedies as are given the Issuer
hereunder shall also extend to, and may be exercised by, the Trustee, and the
Trustee shall be entitled to the benefit of all covenants and agreements herein
contained.
Section 10.4. Agreement to Pay Attorneys' Fees and Expenses. If an Event
of Default occurs and the Issuer or the Trustee employs attorneys or incurs
other expenses for the collection of amounts payable under Section 5.3 hereof or
the enforcement of performance or observance of any obligation or agreement on
the part of the Lessee herein contained, the Lessee shall pay to the Issuer or
to the Trustee, as the case may be, the reasonable fees of such attorneys and
such other expenses so incurred by the Issuer or the Trustee.
Section 10.5. No Additional Waiver Implied by One Waiver. In the event any
agreement contained in this Lease Agreement 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.
Section 10.6. Waiver of Appraisement and Valuation. If an Event of Default
occurs, the Lessee hereby waives, to the extent the Lessee may lawfully do so,
the benefit of all appraisement, valuation, stay, extension or redemption laws
now or hereafter in force and all right to appraisement and redemption to which
the Lessee may be or become entitled.
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ARTICLE XI
OPTIONS AND OBLIGATIONS OF LESSEE
Section 11.1. General Option to Purchase Project. The Lessee shall have,
and is hereby granted, the option to purchase the Project at any time after the
fifth anniversary date of issuance of the Bond and prior to the expiration of
the Term. To exercise this option the Lessee shall give written notice to the
Issuer and to the Trustee, and shall specify therein the date of closing such
purchase, which date shall be not less than forty-five (45) nor more than ninety
(90) days from the date such notice is mailed, and shall make arrangements
satisfactory to the Trustee for the taking of other steps required to effect the
prepayment in full of the Bond. The purchase price payable by the Lessee in the
event of the Lessee's exercise of the option granted in this Section shall be
the sum of the following:
(a) an amount of money which will be sufficient to pay the full unpaid
principal balance on the Bond, including, without limitation, principal,
premium, if any, all interest to accrue to such prepayment date and all other
amounts due thereon, and any expenses incurred by the Issuer or the Trustee,
plus
(b) the sum of five thousand dollars.
Section 11.2. Conveyance on Exercise of Option or Obligation to Purchase.
At the closing of the purchase pursuant to this Article, the Issuer will upon
receipt of the purchase price deliver to the Lessee the following:
(a) If the Indenture shall not at the time have been satisfied in full, a
quit claim deed, a release and a termination statement (with respect to any
effective Financing Statements) from the Trustee releasing the property with
respect to which the option was exercised.
(b) Documents conveying to the Lessee legal title to the property being
purchased, as such property then exists, subject to the following: (i) those
liens and encumbrances (if any) to which title to said property was subject when
conveyed to the Issuer; (ii) those liens and encumbrances created by the Lessee
or to the creation or suffering of which the Lessee consented; (iii) those liens
and encumbrances resulting from the failure of the Lessee to perform or observe
any of the agreements on the Lessee's part contained in this Lease Agreement;
and (iv) Permitted Encumbrances other than this Lease Agreement, the Indenture
and the Lease Assignment.
Section 11.3. Relative Position of Options and Lease Assignment. The
options granted to the Lessee in this Article shall be and remain subordinate
and inferior to the Lease
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Assignment and the Indenture and may not be exercised if an Event of Default has
occurred hereunder.
Section 11.4. Determination of Taxability. If a "Determination of
Taxability" (as defined in the Bond) occurs and as a result the Issuer is
required to prepay the Bond pursuant to the Bond, the Lessee shall be required
to purchase the Project not less than one business day prior to the date of any
such prepayment and agrees to pay to the Trustee as the purchase price for the
Project the amount necessary to effect such prepayment of the Bond pursuant to
the Bond, plus the sum of one hundred dollars. Upon the occurrence of a
Determination of Taxability, the Lessee shall also pay all other amounts which
the Issuer is required to pay under the terms of the Bond.
The purchase price and other amounts provided for above shall be paid
directly to the Trustee.
Section 11.5. Release of Unimproved Portion of Project Site. While the
Lessee is not in default hereunder, Lessee, at its option, may request the
Issuer to obtain from the Trustee the release of any of the Unimproved portion
of the Project Site not needed by the Issuer or the Lessee as a part of the
Project and not useful in the leasing or in the maintenance and care of the
Project, and the Issuer shall, pursuant to Section 605 of the Indenture, apply
to the Trustee for a release of said Unimproved property. The release shall be
executed upon compliance with the requirements of Section 605 of the Indenture.
Section 11.6. Obligation to Purchase Project. The Lessee hereby agrees to
purchase, and the Issuer hereby agrees to sell, the Project for one hundred
dollars at the expiration of the Term (including any extension thereof pursuant
to Section 5.1 hereof) or at the prior termination of the Term, provided that
the Bond shall have been paid in full. The obligation provided for in this
Section shall be and remain subordinate and inferior to the Lease Assignment and
the Indenture and may not be exercised if an Event of Default exists hereunder.
ARTICLE XII
MISCELLANEOUS
Section 12.1. Immunity of Members, Officers and Employees of Issuer. No
recourse shall be had for the enforcement of any obligation, covenant, promise
or agreement of the Issuer contained in this Lease Agreement or for any claim
based hereon or otherwise in respect hereof or upon any obligation, covenant,
promise or agreement of the Issuer contained in the Bond against any director,
member, officer, agent or employee, as such, in his individual capacity, past,
present, or future, of the Issuer or of any successor corporation, whether by
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virtue of any constitutional provision, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, it being expressly agreed
and understood that this Lease Agreement and the Bond are solely corporate
obligations of the Issuer payable only from the funds and assets of the Issuer
herein and in the Bond specifically provided to be subject to such obligation
and that no personal liability whatsoever shall attach to, or be incurred by,
any director, member, officer, agent or employee, as such, past, present or
future, of the Issuer or of any successor corporation, either directly or
through the Issuer or any successor corporation, under or by reason of any of
the obligations, covenants, promises or agreements entered into between the
Issuer and the Lessee whether contained in this Lease Agreement or in the Bond
or to be implied herefrom or therefrom as being supplemental hereto or thereto,
and that all personal liability of that character against every such director,
member, officer, agent and employee is, by the execution of this Lease Agreement
and as a condition of, and as part of the consideration for, the execution of
this Lease Agreement, expressly waived and released. The immunity of directors,
members, officers, agents and employees of the Issuer under the provisions
contained in this Section shall survive the termination of this Lease Agreement.
Section 12.2. Notices. All notices, certificates or other communications
hereunder shall be in writing and shall be sufficiently given and shall be
deemed given when mailed by registered or certified mail, postage prepaid,
addressed as follows: if to the Issuer, addressed to it at The Industrial
Development Board of the City of Dothan, Alabama, ▇.▇. ▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇, if to the Lessee, addressed to the Lessee at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇; and if to the Bank, addressed to it at ▇.▇. ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇; if to the Trustee, as provided in the Indenture. A duplicate copy
of each notice, certificate or other communication given hereunder by either the
Issuer, the Trustee or the Lessee to the other shall also be given to the Bank.
The Issuer, the Lessee, the Trustee and the Bank may, by notice given hereunder,
designate any further or different addresses to which subsequent notices,
certificates or other communications shall be sent.
Section 12.3. Binding Effect. This Lease Agreement shall inure to the
benefit of and shall be binding upon the Issuer, the Lessee and their respective
successors and assigns, subject, however, to the limitations contained in
Sections 9.1, 9.3 and 12.1 hereof.
Section 12.4. Severability and Governing Law. If any provision of this
Lease Agreement shall be invalid, inoperative or unenforceable as applied in any
particular case in any jursidications or jurisdictions or in all jurisdictions,
or because it conflicts with any other provision or provisions
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hereof or any constitution, statute or rule of public policy, or for any other
reason, such circumstances shall not have the effect of rendering the provision
in question invalid, inoperative or unenforceable in any other case or
circumstance, or. of rendering any other provision or provisions herein
contained invalid, inoperative or unenforceable to any extent whatever. In the
event any provision of this Lease Agreement shall be held invalid, inoperative
or unenforceable by any court of competent jurisdiction such holding shall not
invalidate or render inoperative or unenforceable any other provision hereof.
This Lease Agreement shall be governed exclusively by the applicable laws of the
State of Alabama.
Section 12.5. Amendments, Changes and Modifications. Subsequent to the
issuance of the Bond and prior to its payment in full, this Lease Agreement and
the Bond may not be effectively amended, changed, modified or altered and may
not be terminated except by written instrument executed by or on behalf of the
Issuer, the Lessee and the Trustee as provided in Section 1201 of the Indenture.
Section 12.6. Execution Counterparts. This Lease Agreement may be executed
in several counterparts, each of which shall be deemed an original and all of
which shall constitute but one and the same instrument, and it shall not be
necessary in making proof of this Lease Agreement to produce or account for more
than one such counterpart.
Section 12.7. Captions. The captions or headings in this Lease Agreement
are for convenience only, in no way define, limit or describe the scope or
intent of any provisions of this Lease Agreement, and do not constitute a part
of this Lease Agreement.
Section 12.8. Net Lease. This Lease Agreement shall be deemed and
construed to be a "Net Lease," and the Lessee shall pay absolutely net during
the Term the rent and all other payments required hereunder, free of any
deductions, without abatement, deduction or set off other than those herein
expressly provided.
IN WITNESS WHEREOF, the Issuer has caused this Lease Agreement to be
executed in its corporate name and caused its corporate seal to be hereunto
affixed and attested by its duly authorized officer, and the Lessee has executed
and sealed this Lease Agreement, all as of the date first above written.
(CORPORATE SEAL) THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF
ATTEST: DOTHAN, ALABAMA
/s/ ▇▇▇▇▇▇ ▇▇▇▇▇ By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------ ----------------------------
Secretary Chairman
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LESSEE:
▇▇▇▇▇▇ INCORPORATED
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------
ATTEST: Its President
----------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
----------------------------
Its Secretary
---------------------------
STATE OF ALABAMA )
: ss.
COUNTY OF HOUSTON )
I, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, a Notary Public in and for said State at Large, hereby
certify that ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, whose names as Chairman and
Secretary, respectively, of the Board of Directors of The Industrial Development
Board of the City of Dothan, Alabama, a public corporation created and existing
under the Constitution and laws of the State of Alabama, are signed to the
foregoing Lease Agreement and who are known to me, acknowledged before me on
this day that, being informed of the contents of the above and foregoing Lease
Agreement, they, as such officers and with full authority, executed the same
voluntarily for and as the act of said public corporation on the day the same
bears date.
Given under my hand and official seal of office, this the 30th day of
April, 1985.
(SEAL) /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Notary Public
STATE OF ALABAMA )
: ss.
COUNTY OF HOUSTON )
I, ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇, a Notary Public in and for said State at Large
certify that ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, whose names as President
and Secretary respectively, of ▇▇▇▇▇▇ Incorporated, a Delaware corporation, are
signed to the foregoing Lease Agreement and who are known to me, acknowledged
before me on this day that, being informed of the contents of the above and
foregoing Lease Agreement, they, as such officers and with full authority,
executed the same voluntarily on the day the same bears date.
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Given under my hand and official seal of office, this the 30th day of April,
1985.
(SEAL) /s/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------
Notary Public
-47-
53
EXHIBIT A
Parcel #1
A parcel of land in the City of Dothan, Houston County, Alabama, and being more
particularly described as follows: Commencing at the intersection of the west
line of the E 1/2 of the ▇▇ ▇/▇ ▇▇ ▇▇▇▇▇▇▇ ▇, ▇▇▇, ▇▇▇▇, and the north side of
▇▇▇▇▇▇ Road and thence easterly along the north side of ▇▇▇▇▇▇ Road 259.32 feet,
thence N07 degrees 22' 48"W 827.58 feet to the POINT OF BEGINNING: and thence
N07 degrees 22' 48"W 266.88 feet, thence S80 degrees 44' 30"E 200.52 feet,
thence S00 degrees 03' 26"E 232.10 feet, thence S89 degrees 56' 34"W 163.77 feet
to the point of beginning. Said parcel containing 1.02 acres more or less.
Parcel #2
Lots One through Twenty-One, inclusive, of Dothan Chamber of Commerce Industrial
Site, a map or plat of which is recorded in Plat Book 3, Page 54, in the Office
of the Judge of Probate of Houston County, Alabama.