EXHIBIT 10.18
Transcript Document No.2
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SUFFOLK COUNTY INDUSTRIAL DEVELOPMENT AGENCY
(SUFFOLK COUNTY, NEW YORK)
and
MELVILLE BIOLOGICS, INC.
____________
FACILITY LEASE AGREEMENT
____________
Dated as of February 15, 1995
1995 Real Estate Transfer
(Melville Biologics, Inc. Facility)
TABLE OF CONTENTS
Page
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ARTICLE I
[Reserved.] ............................................................ 3
ARTICLE II
REPRESENTATIONS AND COVENANTS
SECTION 2.1 Representations and Covenants of
Agency ................................................. 3
SECTION 2.2 Representations and Covenants of
Company ................................................ 4
ARTICLE III
FACILITY SITE AND TITLE INSURANCE
SECTION 3.1 Agreement to Convey to Agency ........................... 5
SECTION 3.2 Title Insurance ......................................... 5
SECTION 3.3 Subordination of Facility Lease Agreement ............... 5
ARTICLE IV
ACQUISITION, RENOVATION AND EQUIPPING
OF FACILITY
SECTION 4.1 Acquisition, renovation and equipping
of Facility ............................................ 6
SECTION 4.2 [Reserved.] ............................................. 7
SECTION 4.3 Certificates of Completion .............................. 7
SECTION 4.4 Completion by Company ................................... 7
SECTION 4.5 Remedies to be Pursued Against
Contractors, Subcontractors,
Materialmen and their Sureties ......................... 7
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ARTICLE V
DEMISING CLAUSES AND RENTAL PROVISIONS
SECTION 5.1 Demise of Facility ...................................... 8
SECTION 5.2 Duration of Lease Term; Quiet
Enjoyment .............................................. 8
SECTION 5.3 Rents and Other Amounts Payable ......................... 8
SECTION 5.4 Obligations of Company Hereunder
Unconditional .......................................... 9
ARTICLE VI
MAINTENANCE, MODIFICATIONS,
TAXES AND INSURANCE
SECTION 6.1 Maintenance and Modifications of
Facility by Company .................................... 9
SECTION 6.2 [Reserved.] ............................................. 10
SECTION 6.3 Taxes, Pilot Payments, Assessments and
Utility Charges ........................................ 10
SECTION 6.4 Insurance Required ...................................... 11
SECTION 6.5 Additional Provisions Respecting
Insurance .............................................. 12
SECTION 6.6 Application of Net Proceeds of
Insurance .............................................. 13
SECTION 6.7 Right of Agency to Pay Taxes, Insurance Premiums
and Other Charges ...................................... 13
SECTION 6.8 Compliance with Article 31-B of
Tax Law ................................................ 14
ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
SECTION 7.1 Damage, Destruction or Condemnation of the Facility ..... 15
SECTION 7.2 [Reserved.] ............................................. 16
SECTION 7.3 Condemnation of Company-Owned Property .................. 16
SECTION 7.4 Waiver of Real Property Law
Section 227 ............................................ 16
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ARTICLE VIII
SPECIAL COVENANTS
SECTION 8.1 No Warranty of Condition or
Suitability by Agency .................................. 16
SECTION 8.2 Hold Harmless Provisions ................................ 16
SECTION 8.3 Right to Inspect Facility ............................... 17
SECTION 8.4 Company to Maintain Its Existence ....................... 17
SECTION 8.5 Qualification in State .................................. 17
SECTION 8.6 Agreement to File Annual Statements
and Provide Information ................................ 17
SECTION 8.7 Books of Record and Account;
Financial Statements ................................... 18
SECTION 8.8 Compliance With Orders,
Ordinances, Etc ........................................ 18
SECTION 8.9 Discharge of Liens and Encumbrances ..................... 19
SECTION 8.10 [Reserved.] ............................................. 19
SECTION 8.11 Depreciation Deductions and
Investment Tax Credit .................................. 19
SECTION 8.12 Employment Opportunities, Notice of Jobs ................ 19
ARTICLE IX
RELEASE OF CERTAIN LAND, ASSIGNMENTS AND
SUBLEASING; MORTGAGE AND PLEDGE OF INTERESTS
SECTION 9.1 Restriction on Sale of Facility;
Release of Certain Land ................................ 20
SECTION 9.2 Removal of Fixture Equipment ............................ 20
SECTION 9.3 Assignment and Subleasing ............................... 21
SECTION 9.4 Mortgage of Agency's and Company's
Interests to Guarantor ................................. 22
SECTION 9.5 [Reserved.] ............................................. 22
SECTION 9.6 Merger of Agency ........................................ 22
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1 Events of Default Defined ............................... 22
SECTION 10.2 Remedies on Default ..................................... 24
SECTION 10.3 Remedies Cumulative ..................................... 25
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SECTION 10.4 Agreement to Pay Attorneys' Fees
and Expenses ........................................... 25
SECTION 10.5 No Additional Waiver Implied by One
Waiver ................................................. 25
ARTICLE XI
EARLY-TERMINATION OF FACILITY LEASE AGREEMENT;
OPTION IN FAVOR OF COMPANY
SECTION 11.1 Early Termination of Facility Lease Agreement ........... 26
SECTION 11.2 Conditions to Early Termination of
Facility Lease Agreement ............................... 26
SECTION 11.3 Obligation to Purchase Facility ......................... 26
SECTION 11.4 Conveyance on Purchase .................................. 26
ARTICLE XII
MISCELLANEOUS
SECTION 12.1 Notices ................................................. 27
SECTION 12.2 Binding Effect .......................................... 28
SECTION 12.3 Severability ............................................ 28
SECTION 12.4 Amendments, Changes and Modifications ................... 28
SECTION 12.5 Execution of Counterparts ............................... 28
SECTION 12.6 Applicable Law .......................................... 28
SECTION 12.7 Further Assurances ...................................... 28
SECTION 12.8 Survival of Indemnities ................................. 28
SECTION 12.9 Table of Contents and Section
Headings not Controlling ............................... 28
Exhibit A - Description of Land
Schedule A - Schedule of Definitions
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THIS FACILITY LEASE AGREEMENT, dated as of February 15, 1995 is between the
SUFFOLK COUNTY INDUSTRIAL DEVELOPMENT AGENCY, a public benefit corporation of
the State of New York having its office at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ (the "Agency"), and MELVILLE BIOLOGICS, INC., a
Delaware corporation authorized to do business in New York, having an office at
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ (the "Company").
R E C I T A L S
All capitalized terms used in this Facility Lease Agreement and not
otherwise defined shall have the meanings assigned thereto in the Schedule of
Definitions attached hereto as Schedule A.
Title 1 of Article 18-A of the General Municipal Law of the State of New
York was duly enacted into law as Chapter 1030 of the Laws of 1969 of the State
of New York;
The aforesaid act authorizes the creation of industrial development
agencies for the Public Purposes of the State;
The aforesaid act further authorizes the creation of industrial development
agencies for the benefit of the several counties, cities, villages and towns in
the State and empowers such agencies, among other things, to acquire,
reconstruct, renovate, refurbish, equip, lease, sell and dispose of land and any
building or other improvement, and all real and personal property, including but
not limited to, machinery and equipment deemed necessary in connection
therewith, whether now in existence or under construction, which shall be
suitable for manufacturing, civic, warehousing, research, commercial, recreation
or industrial facilities, in order to advance job opportunities, health, general
prosperity and the economic welfare of the people of the State and to improve
their standard of living;
Pursuant to and in accordance with the provisions of the aforesaid act, the
Agency was created and is empowered under the Act to undertake the providing and
leasing of the Facility;
The Facility shall consist of the acquisition, renovation and improvement
of an existing approximately 89,600 square foot building, on an approximately
10.87 acre parcel of land located at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇ of
Huntington, Suffolk County, New York, for the purpose of the manufacture,
processing and/or fractionation of blood products and the production of related
biopharmaceutical technologies, including the following, as they relate to the
construction, erection and completion of such building, whether or not any
materials or supplies described below are incorporated into or become an
integral part of such building: (i) all purchases, leases, rentals and other
uses of tools, machinery and equipment in connection with construction, and (ii)
purchases, rentals, uses or consumption of supplies, materials and services of
every kind and description used in connection with construction, and (iii) all
Fixture Equipment, and all other machinery, and other tangible personal property
used in the renovation
of the Improvements (including installation costs with respect thereto),
installed or placed in, upon or under such Improvements;
The Agency proposes to acquire and lease the Facility to the Company
pursuant to the terms of this Facility Lease Agreement;
The Bank and the Company have entered into the Loan Agreement, pursuant to
which the Bank has agreed to make the Loan to the Company;
The Guarantor has guaranteed the repayment of the Loan pursuant to the
Guaranty Agreement;
In connection with the Guaranty Agreement, the Guarantor and the Company
have entered into the Reimbursement Agreement, pursuant to which the Company has
agreed to reimburse the Guarantor for amounts paid by the Guarantor to the Bank
under the Guaranty Agreement;
The Obligations (as defined in the Reimbursement Agreement) of the Company
under the Reimbursement Agreement will be secured by, among other things, the
Mortgage;
The Company has leased a portion of the Facility to the Guarantor pursuant
to the terms and conditions set forth in the Miles Lease;
The Guarantor has subleased a portion of the Facility back to the Company
pursuant to the terms and conditions set forth in the Miles Sublease;
The Company has agreed with the Agency, on behalf of the Agency and as the
Agency's agent, to acquire, renovate and equip the Facility,
The Agency proposes to lease the Facility to the Company, and the Company
desires to rent the Facility from the Agency, upon the terms and conditions set
forth in this Facility Lease Agreement.
AGREEMENT
For and in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto do hereby mutually agree as follows:
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ARTICLE I
[Reserved.]
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations and Covenants of Agency. The Agency makes
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the following representations and covenants as the basis for the undertakings on
its part herein contained:
(a) The Agency is duly established and validly existing under the
provisions of the Act and has full legal right, power and authority to execute,
deliver and perform each of the Agency Documents and the other documents
contemplated thereby. Each of the Agency Documents and the other documents
contemplated thereby has been duly authorized, executed and delivered by the
Agency.
(b) The Agency will cause the Land to be acquired, the Improvements
to be acquired and renovated and the Fixture Equipment to be acquired and
installed and will lease the Facility to the Company pursuant to this Facility
Lease Agreement, all for the Public Purposes of the State.
(c) By resolution adopted on November 23, 1993, and amended and
supplemented by a resolution adopted on December 2, 1994, the Agency determined
that, based upon the review by the Agency of the materials submitted and the
representations made by the Company relating to the Facility, the Facility would
not have a "significant impact" or "significant effect" on the environment
within the meaning of the SEQR Act. By the Approving Resolution, the Agency
authorized the execution, delivery and performance of the Agency Documents.
(d) Neither the execution and delivery of any of the Agency Documents
and the other documents contemplated thereby or the consummation of the
transactions contemplated thereby nor the fulfillment of or compliance with the
provisions of any of the Agency Documents and the other documents contemplated
thereby, will conflict with or result in a breach of or constitute a default
under any of the terms, conditions or provisions of the Act, any other law or
ordinance of the State or any political subdivision thereof or of the Agency's
Certificate of Establishment or By-laws, as amended, or of any corporate
restriction or any agreement or instrument to which the Agency is a party or by
which it is bound, or result in the creation or imposition of any Lien of any
nature upon any of the Property of the Agency under
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the terms of the Act or any such law, ordinance, Certificate of Establishment,
By-laws, restriction, agreement or instrument, except for Permitted
Encumbrances.
(e) Each of the Agency Documents and the other documents contemplated
thereby constitutes a legal, valid and binding obligation of the Agency
enforceable against the Agency in accordance with its terms.
(f) The Agency has been induced to enter into this Facility Lease
Agreement by the undertaking of the Company to utilize the Facility in Suffolk
County, New York.
Section 2.2 Representations and Covenants of Company. The Company
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makes the following representations and covenants as the basis for the
undertakings on its part herein contained:
(a) The Company is a business corporation duly organized and validly
existing under the laws of the State of Delaware, is in good standing under the
laws of the State of Delaware and is authorized to do business in the State of
New York and has full legal right, power and authority to execute, deliver and
perform each of the Company Documents and the other documents contemplated
thereby. Each of the Company Documents and the other documents contemplated
thereby has been duly authorized, executed and delivered by the Company.
(b) Neither the execution and delivery of any of the Company
Documents and the other documents contemplated thereby or the consummation of
the transactions contemplated thereby nor the fulfillment of or compliance with
the provisions of any of the Company Documents and the other documents
contemplated thereby, will conflict with or result in a breach of or constitute
a default under any of the terms, conditions or provisions of any law or
ordinance of the State of Delaware or the State of New York or any political
subdivision thereof or of the Company's Certificate of Incorporation, as
amended, or of the Company By-Laws, or any corporate restriction or any
agreement or instrument to which the Company is a party or by which it is bound,
or result in the creation or imposition of any Lien of any nature upon any of
the Property of the Company under the terms of any such law, ordinance,
certificate of Incorporation or By-laws, as amended, restriction, agreement or
instrument, except for Permitted Encumbrances.
(c) The Facility and the design, acquisition, renovation and
equipping and operation thereof will conform with all applicable zoning,
planning, building and environmental laws, ordinances, rules and regulations of
governmental authorities having jurisdiction over the Facility; provided,
however, the Company need not conform if such failure to conform would not have
a material adverse effect on the Agency, the Facility, or the use thereof. The
Company shall defend, indemnify and hold harmless the Agency for expenses,
including reasonable attorney fees, resulting from any failure by the Company to
comply with the provisions of this subsection.
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(d) The Company shall perform or cause to be performed, for and on
behalf of the Agency each and every obligation of the Agency, if any, under and
pursuant to the Mortgage.
(e) Each of the Agency Documents and the other documents contemplated
thereby constitutes a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms.
(f) The Company will complete the acquisition, renovation and
equipping of the Facility.
(g) The Facility is and will continue to be a "project," as such
quoted term is defined in the Act. The Company will not take any action, or fail
to take any action, which would cause the Facility to not constitute a "project"
as such quoted term is defined in the Act.
ARTICLE III
FACILITY SITE AND TITLE INSURANCE
Section 3.1 Agreement to Convey to Agency. The Company has conveyed
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or has caused to be conveyed to the Agency (i) good and marketable title to the
Land, including any buildings, structures or other improvements thereon, and
(ii) lien-free title to the Fixture Equipment, in each case except for Permitted
Encumbrances and will convey or cause to be conveyed to the Agency lien-free
title to the Fixture Equipment and Improvements acquired after the date hereof,
in each case except for Permitted Encumbrances.
Section 3.2 Title Insurance. The Company has obtained or will
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obtain fee title insurance for the benefit of the Agency in an amount equal to
$10,000,000 insuring fee title to the Land and the Improvements thereon, free of
Liens, except for Permitted Encumbrances.
Section 3.3 Subordination of Facility Lease Agreement. This Facility
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Lease Agreement and any and all modifications, amendments, renewals and
extensions thereof is subject and subordinate to the Security Documents
(individually and collectively) and to any and all modifications, amendments,
consolidations, extensions, renewals, replacements and increases thereof.
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ARTICLE IV
ACQUISITION, RENOVATION AND EQUIPPING OF FACILITY
Section 4.1 Acquisition, Renovation and Equipping of Facility.
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(a) The Company agrees that, on behalf of the Agency, it will acquire,
renovate and equip the Facility.
(b) [Reserved.]
(c) Title to all Fixture Equipment incorporated or installed in the
Improvements shall vest in the Agency immediately upon the Company's obtaining
an interest in or to the Fixture Equipment. The Company shall execute, deliver
and record or file all instruments necessary or appropriate to so vest title to
the Agency and shall take all action necessary or appropriate to protect such
title against claims of any third Persons, except for Permitted Encumbrances.
(d) The Agency hereby appoints the Company its true and lawful agent,
and the Company hereby accepts such agency (i) to acquire, renovate and equip
the Facility, (ii) to make, execute, acknowledge and deliver any contracts,
orders, receipts, writings and instructions with any other Persons, and in
general to do all things which may be requisite or proper, all for constructing
the Improvements and acquiring and installing the Fixture Equipment with the
same powers and with the same validity as the Agency could do if acting on its
own behalf, (iii) to pay all fees, costs and expenses incurred in the
construction of the Improvements and the acquisition and installation of the
Fixture Equipment, and (iv) to ask, demand, ▇▇▇ for, ▇▇▇▇, recover and receive
all such sums or money, debts, dues and other demands whatsoever which may be
due, owing and payable to the Agency under the terms of any contract, order,
receipt, or writing in connection with construction and completion of the
Improvements and the acquisition and installation of the Fixture Equipment, and
to enforce the provisions of any contract, agreement, obligation, bond or other
performance security.
(e) The Agency shall enter into, and accept the assignment of, such
contracts as the Company may request in order to effectuate the purposes of this
Section 4.1.
(f) The Company, as agent for the Agency, shall comply with all
provisions of the Labor Law of the State, except as hereinafter noted,
applicable to the acquisition, renovation and equipping of the Facility and
shall include in all construction contracts all provisions which may be required
to be inserted therein by such provisions. In addition, the Company specifically
represents that it will comply with Section 220 of the Labor Law of the State,
except subdivision (3) and Section 220-d thereof, as if such Section was
applicable to the Facility.
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Section 4.2 [Reserved.]
Section 4.3 Certificates of Completion. To establish the Completion
--------------------------
Date, the Company shall deliver to the Agency certificate signed by an
Authorized Representative of the Company (i) stating that acquisition,
renovation and equipping of the Facility has been completed (ii) stating that
the payment of all labor, services, materials and supplies used in such
acquisition has been made or provided for; and (iii) such certificates as may be
reasonably satisfactory to the Agency, including without limitation, a final
certificate of occupancy, if applicable. The Company agrees to complete the
acquisition, renovation and equipping of the Facility on or before March 1,
1997.
Section 4.4 Completion by Company.
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(a) The Company agrees to pay in full all costs of acquiring,
renovating and equipping the Facility for the benefit of the Agency. Title to
all portions of the Facility installed or constructed at the Company's cost or
expense shall immediately upon such installation or construction vest in the
Agency and shall be subject to the rights, security interests and liens created
by and granted by the Security Documents and subject to Permitted Encumbrances.
The Company shall execute, deliver and record or file such instruments as the
Agency may request in order to perfect or protect the Agency's title to such
portions of the Facility, subject to Permitted Encumbrances.
(b) The Company shall not be entitled to any reimbursement for such
excess cost or expense from the Agency nor shall it be entitled to any
diminution or abatement of any other amounts payable by the Company under this
Facility Lease Agreement.
Section 4.5 Remedies to be Pursued Against Contractors. Subcontractors
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Materialmen and their Sureties. In the event of a default by any contractor,
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subcontractor, materialman or other Person under any contract made by it in
connection with the Facility or in the event of a breach of warranty or other
liability with respect to any materials, workmanship, or performance guaranty,
the Company at its expense, either separately or in conjunction with others, may
pursue any and all remedies available to it and the Agency, as appropriate,
against the contractor, subcontractor, materialman or other Person so in default
and against any surety for the performance of such contract. The Company, in its
own name or in the name of the Agency, may prosecute or defend any action or
proceeding or take any other action involving any such contractor,
subcontractor, materialman or surety or other Person which the Company deems
reasonably necessary, and in such event the Agency, at the Company's expense,
hereby agrees to cooperate fully with the Company and to take all action
necessary to effect the substitution of the Company for the Agency in any such
action or proceeding.
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ARTICLE V
DEMISING CLAUSES AND RENTAL PROVISIONS
Section 5.1 Demise of Facility. The Agency hereby leases the Facility
------------------
to the Company and the Company hereby takes the Facility from the Agency upon
the terms and conditions of this Facility Lease Agreement.
Section 5.2 Duration of Lease Term; Quiet Enjoyment.
---------------------------------------
(a) The Agency shall deliver to the Company sole and exclusive
possession of the Facility (subject to Sections 3.3, 8.3 and 10.2 hereof) and
the leasehold estate created hereby shall commence on the Closing Date and the
Company shall accept possession of the Facility on the Closing Date.
(b) Except as provided in Section 10.2 hereof, the leasehold estate
created hereby shall terminate at 11:59 p.m. on March 1, 2007 or on such earlier
date as may be permitted by Section 11.1 hereof; provided, however, that this
Facility Lease Agreement shall automatically terminate upon the expiration
and/or termination of the PILOT Agreement.
(c) Except as provided in Sections 3.3, 8.3 and 10.2 hereof, the
Agency shall neither take nor suffer or permit any action to prevent the Company
during the Lease Term from having quiet and peaceable possession and enjoyment
of the Facility and will, at the request of the Company and at the Company's
cost, cooperate with the Company in order that the Company may have quiet and
peaceable possession and enjoyment of the Facility as hereinabove provided.
Section 5.3 Rents and Other Amounts Payable.
-------------------------------
(a) The Company shall pay basic rent in advance to the Agency for the
Facility as follows: One Dollar ($1.00) per year commencing on the Closing Date
and on the first Business Day of each and every February thereafter during the
term of this Facility Lease Agreement.
(b) In addition to the payments of rent pursuant to Section 5.3(a)
hereof, throughout the Lease Term, the Company shall pay to the Agency as
additional rent, within thirty (30) days of receipt of demand therefor, the
expenses of the Agency and the members thereof incurred (i) by reason of the
Agency's ownership or leasing of the Facility or (ii) in connection with the
carrying out of the Agency's duties and obligations under the Agency Documents,
the payment of which is not otherwise provided for under this Facility Lease
Agreement. The Agency does not charge any annual or continuing administrative or
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management fee beyond any initial administrative fee or fee for services
rendered by the Agency.
(c) The Company, under the provisions of this Section 5.3, agrees to
make the above-mentioned payments in immediately available funds and without any
further notice in lawful money of the United States of America. In the event the
Company shall fail to timely make any payment required in Section 5.3(a) or
5.3(b), the Company shall pay the same together with interest on such payment at
a rate equal to two percent (2%) plus the Prime Rate, but in no event at a rate
higher than the maximum lawful prevailing rate, from the date on which such
payment was due until the date on which such payment is made.
Section 5.4 Obligations of Company Hereunder Unconditional. The
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obligations of the Company to make the payments required in Section 5.3 hereof,
and to perform and observe any and all of the other covenants and agreements on
its part contained herein shall be a general obligation of the Company, and
shall be absolute and unconditional irrespective of any defense or any rights of
setoff, recoupment or counterclaim it may otherwise have against the Agency. The
Company agrees it will not (i) suspend, discontinue or ▇▇▇▇▇ any payment
required hereunder or (ii) fail to materially observe any of its other covenants
or agreements in this Facility Lease Agreement.
Subject to the foregoing provisions, nothing contained in this Section
shall be construed to release the Agency from the performance of any of the
agreements on its part contained in this Facility Lease Agreement or to affect
the right of the Company to seek reimbursement, and in the event the Agency
should fail to-perform any such agreement, the Company may institute such
separate action against the Agency as the Company may deem necessary to compel
performance or recover damages for non-performance, and the Agency covenants
that it will not, subject to the provisions of Sections 3.3 and 8.3 and Article
X hereof, take, suffer or permit any action which will adversely affect, or
create any defect in its title to the Facility or which will otherwise adversely
affect the rights or estate of the Company hereunder, except upon written
consent of the Company.
ARTICLE VI
MAINTENANCE, MODIFICATIONS, TAXES AND INSURANCE
Section 6.1 Maintenance and Modifications of Facility by Company.
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(a) The Company shall not abandon the Facility or cause or permit any
waste to the Improvements. During the Lease Term, the Company shall not remove
any part of the Facility outside of the jurisdiction of the Agency and shall (i)
keep the Facility in as reasonably safe condition as its operations shall
permit; (ii) make all necessary repairs and replacements to
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the Facility (whether ordinary or extraordinary, structural or nonstructural,
foreseen or unforeseen); and (iii) operate the Facility in a sound and economic
manner.
(b) The Company from time to time may make any structural additions,
modifications or improvements to the Facility or any part thereof, provided such
actions do not adversely affect the structural integrity of the Facility. All
such additions, modifications or improvements made by the Company shall become a
part of the Facility and the Property of the Agency, subject to Permitted
Encumbrances. The Company agrees to deliver to the Agency all documents which
may be necessary or appropriate to convey to the Agency title to such Property,
subject to Permitted Encumbrances.
Section 6.2 [Reserved.]
Section 6.3 Taxes, Pilot Payments, Assessments and Utility Charges.
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(a) The Company agrees to pay, as the same become due and before any
fine, penalty, interest (except interest which is payable in connection with
legally permissible installment payments) or other cost may be added thereto or
become due or be imposed by operation of law for the non-payment thereof, (i)
all taxes of any kind whatsoever which may at any time be lawfully assessed or
levied against or with respect to the Facility and any machinery, equipment or
other Property installed or brought by the Company therein or thereon,
including, without limiting the generality of the foregoing, any sales or use
taxes imposed with respect to the Facility or any part or component thereof, or
the rental or sale of the Facility or any part thereof; (ii) all utility and
other charges, including service charges, incurred or imposed for or with
respect to the operation, maintenance, use, occupancy, upkeep and improvement of
the Facility; (iii) all assessments and charges of any kind whatsoever lawfully
made by any governmental body for public improvements; provided that, with
respect to special assessments that may lawfully be paid in installments over a
period of years, the Company shall be obligated under this Facility Lease
Agreement to pay only such installments as are required to be paid during the
Lease Term; and (iv) and all PILOT Payments as provided under the PILOT
Agreement.
(b) The Company may in good faith contest any taxes and assessments.
In the event of any such proceedings, the Company may permit the taxes or
assessments so contested to remain unpaid during the period of such proceedings
and any appeal therefrom, provided, however, that (i) neither the Facility nor
any part thereof or interest therein would be in any immediate danger of being
sold, forfeited or lost by reason of such proceedings and (ii) the Company shall
have set aside on its books adequate reserves with respect thereto and shall
have furnished such security, if any, as may be required in such proceedings or
requested by the Agency. The aforesaid right to refrain from paying taxes or
assessments and to reserve for any such contested obligations shall specifically
not apply to PILOT Payments required under the PILOT Agreement. Under all
circumstances PILOT Payments must be paid in accordance with the terms and
provisions as set forth in the PILOT Agreement, and the PILOT Agreement shall
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govern all rights and obligations of the Company as they pertain to PILOT
Payments, including, but not limited to, the rights of the Company under Section
5 of the PILOT Agreement.
(c) If the Company successfully contests any such taxes or assessments
it shall look solely to the affected Taxing Authorities (and not to the Agency)
for any refunds due or awarded as a result thereof. The provisions of the PILOT
Agreement shall govern the contest and/or credit or refund of all PILOT
Payments.
(d) Within thirty (30) days of receipt of written request therefor,
the Company shall deliver to the Agency official receipts of the affected Taxing
Authorities or other proof reasonably satisfactory to the Agency evidencing
payment of any tax, assessment or PILOT Payment.
Section 6.4 Insurance Required. At all times throughout the Lease
------------------
Term, including, when indicated herein, during the Construction Period, the
Company shall, at its sole cost and expense, maintain or cause to be maintained
insurance against such risks and for such amounts as are customarily insured
against by businesses of like size and type and shall pay, as the same become
due and payable, all premiums with respect thereto, including, but not
necessarily limited to:
(a) All policies of insurance and in such amounts as required to be
obtained and maintained by the company under the Mortgage and the Reimbursement
Agreement.
(b) Workers' compensation insurance, disability benefits insurance and
each other form of insurance which the Company or any permitted Sublessee is
required by law to provide, covering loss resulting from injury, sickness,
disability or death of employees of the Company or any permitted Sublessee who
are located at or assigned to the Facility. This coverage shall be in effect
from and after the Completion Date or on such earlier date as any employees of
the Company, any permitted Sublessee, any contractor or subcontractor first
occupy the Facility.
(c) Insurance protecting the Agency and the Company against loss or
losses from liability imposed by law or assumed in any written contract
(including the contractual liability assumed by the Company under Section 8.2
hereof) and arising from personal injury, including bodily injury or death, or
damage to the property of others, caused by an accident or occurrence with a
limit of liability of not less than $1,000,000 (combined single limit for
personal injury, including bodily injury or death, and property damage),
comprehensive automobile liability, to the extent applicable, including all
owned, non-owned and hired autos with a limit of liability of not less than
$1,000,000 (combined single limit or equivalent for personal injury, including
bodily injury or death, and property damage) and with a blanket excess liability
coverage in an amount not less than $5,000,000 combined single limit or
equivalent protecting the Agency and the Company against any loss or liability
or damage for personal injury, including bodily injury or death, or property
damage. This coverage shall also be in effect during the Construction Period.
-11-
(d) During the Construction Period (and for at least one year
thereafter in the case of Products and Completed Operations as set forth below),
the Company shall cause the general contractor to carry liability insurance of
the type and providing the minimum limits set forth below:
(i) Workers' compensation and employer's liability with limits
in accordance with applicable law.
(ii) Comprehensive general liability providing coverage for:
Premises and Operations
Products and Completed Operations
Owners Protective
Contractors Protective
Contractual Liability
Personal Injury Liability
Broad Form Property Damage
(including completed operations)
Explosion Hazard
Collapse Hazard
Underground Property Damage Hazard
Such insurance shall have a limit of liability of not less than $1,000,000
(combined single limit for personal injury, including bodily injury or death,
and property damage).
(iii) Comprehensive auto liability, including all owned, non-
owned and hired autos, with a limit of liability of not less than $1,000,000
(combined single limit for personal injury, including bodily injury or death,
and property damage).
(iv) Excess "umbrella" liability providing liability insurance
in excess of the coverages in (i), (ii) and (iii) above with a limit of not less
than $5,000,000.
Section 6.5 Additional Provisions Respecting Insurance.
------------------------------------------
(a) All insurance required by Section 6.4 hereof shall be procured and
maintained in financially sound and generally recognized responsible insurance
companies selected by the entity required to procure the same and authorized to
write such insurance in the State. Such insurance may be written with deductible
amounts comparable to those on similar policies carried by other companies
engaged in businesses similar in size, character and other respects to those in
which the procuring entity is engaged. All policies of insurance required by
Section 6.4 hereof shall provide for at least thirty (30) days' prior written
notice of the restriction, cancellation or modification thereof to the Agency.
The policies evidencing the insurance required by
-12-
Section 6.4(c) and (d)(ii), (iii) and (iv) hereof shall name the Agency as an
additional named insured.
(b) The policies or certificates (or binders) of insurance required by
Section 6.4(c) and (d)(ii), (iii) and (iv) hereof shall be deposited with the
Agency on or before the Closing Date. Prior to the expiration of each such
policy, the Company shall furnish the appropriate Person with evidence that such
policy has been renewed or replaced or is no longer required by this Facility
Lease Agreement. The Company shall provide such further information with respect
to the insurance coverage required by this Facility Lease Agreement as the
Agency may from time to time reasonably require.
Section 6.6 Application of Net Proceeds of Insurance. Subject to the
----------------------------------------
Security Documents, the Net Proceeds of the insurance required by Section 6.4
hereof shall be applied toward extinguishment or satisfaction of the liability
with respect to which such insurance proceeds may be paid.
Section 6.7 Right of Agency to Pay Taxes, Insurance Premiums and Other
----------------------------------------------------------
Charges. If the Company fails (i) to pay any tax, together with any fine,
-------
penalty, interest or cost which may have been added thereto or become due or
been imposed by operation of law for nonpayment thereof, or PILOT Payments or
assessment required to be paid by Section 6.3 hereof, (ii) to maintain any
insurance required to be maintained by Section 6.4 hereof, (iii) to pay any
amount required to be paid by any law or ordinance relating to the use or
occupancy of the Facility or by any requirement, order or notice of violation
thereof issued by any governmental person, (iv) to pay any mechanic's Lien which
is recorded or filed against the Facility or any part thereof (unless contested
in accordance with the provisions of Section 8.9(b) hereof), (v) to pay any real
property transfer gains tax, together with any interest and penalties thereon,
which is due and payable by reason of a conveyance of the leasehold estate in
and to the Facility pursuant to a judicial sale in any foreclosure action or by
deed and/or assignment in lieu of foreclosure or (vi) to pay any other amount or
perform any act hereunder required to be paid or performed by the Company
hereunder, the Agency may pay or cause to be paid such tax or PILOT Payments or
assessment or the premium for such insurance or any such other payment or may
perform any such act. No such payment shall be made or act performed by the
Agency until at least thirty (30) days shall have elapsed since notice shall
have been given by the Agency to the Company, and in the case of any tax or
assessment or the amounts specified in paragraphs (iii), (v) and (vi) hereof, no
such payment shall be made in any event if the Company is contesting the same in
good faith to the extent and as permitted by the PILOT Agreement and this
Facility Lease Agreement unless an Event of Default hereunder shall have
occurred and be continuing. No such payment by the Agency shall affect or impair
any rights of the Agency hereunder arising in consequence of such failure by the
Company. The Company shall, on demand, reimburse the Agency for any amount so
paid or for expenses or costs incurred in the performance of any such act by the
Agency pursuant to this Section (which shall include all reasonable legal fees
and disbursements), together with interest thereon from the date of payment of
such amount, expense or cost by the
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Agency at two percent (2%) in excess of the Prime Rate, but in no event at a
rate higher than the maximum lawful prevailing rate.
Section 6.8 Compliance with Article 31 and Article 31-B of Tax Law.
------------------------------------------------------
(a) The Company shall keep true and complete records pertaining to its
acquisition of title to the fee or the leasehold estate in and to the Facility,
all subsequent transfers of any interests therein or any part thereof and all
changes in the controlling interest (by way of changes in stock ownership,
capital, profits, beneficial interest or otherwise) in the Company or any
related entity which may hereafter own and/or acquire title to the fee or the
leasehold estate in and to the Facility, including, but not limited to, a copy
of the contract of sale, title report, assignment of lease, closing statement,
transferor's affidavit, questionnaire or return, statement of tentative
assessment and any other notices or determinations of tax received from the New
York State Department of Taxation and Finance, transferor's supplemental return,
the date and cost of all "capital improvements" made to the Land, the
Improvements or any part thereof and evidence of (i) the payment of real
property transfer tax imposed by reason of Article 31 of the New York Tax Law
and, (ii) the payment of any real property transfer gains tax imposed by reason
of Article 31-B of the New York Tax Law and the filing of all reports and any
other information or documentation required by the New York State Department of
Taxation and Finance by reason of said Article or any regulations promulgated
thereunder. All such records shall be made available to the Agency for
inspection from time to time upon their request.
(b) If any real property transfer gains tax shall be due and payable
upon the conveyance of the leasehold estate in and to the Facility by the Agency
to the Company pursuant to the Facility Lease Agreement, the Company shall, at
the request of the Agency, (i) provide the Agency with a copy of all such
records and will prepare, execute, deliver and file any affidavits,
questionnaires, returns or supplemental returns required of the Company, as
transferor, including, but not limited to, a statement in affidavit form as to
the "original purchase price" of the fee or the leasehold estate in and to the
Facility and the cost of all "capital improvements" made to the Land, the
Improvements or any part thereof by the Company or any related entity and the
date or dates on which such improvements were made and (ii) pay or cause to be
paid any real property transfer gains tax, together with any interest and
penalties thereon, which may be due and payable by reason of such conveyance.
The Company hereby appoints the Agency its true and lawful agent and
attorney-in-fact (which appointment shall be deemed to be an agency coupled with
an interest), with full power of substitution, to prepare, execute, deliver and
file on its behalf any and all affidavits, questionnaires, returns and
supplemental returns which the Company, as transferor, has failed or refused to
execute and deliver to the Agency within thirty (30) days after notice and
request therefor.
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ARTICLE VII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 7.1 Damages, Destruction or Condemnation of the Facility.
----------------------------------------------------
(a) If the Facility or any part or component shall be damaged or
destroyed (in whole or in part) or title to or use of the Facility shall be
taken by Condemnation (in whole or in part) at any time during the Lease Term:
(i) the Agency shall have no obligation to replace, repair,
rebuild, restore or relocate the Facility or acquire, by construction
or otherwise, facilities of substantially the same nature as the
Facility ("Substitute Facilities"); and
(ii) there shall be no abatement or reduction in the amounts
payable by the Company under this Facility Lease Agreement or the
PILOT Agreement (whether or not the Facility is replaced, repaired,
rebuilt, restored or relocated or Substitute Facilities are acquired);
and
(iii) upon the occurrence of such damage destruction or
Condemnation, the Net Proceeds derived from the insurance or the
Condemnation award shall be paid to the Company and applied by the
Company, subject to the terms of the Security Documents.
(b) Any replacements, repairs, rebuilding, restorations or relocations
of the Facility or acquisition of Substitute Facilities by the Company after the
occurrence of such damage, destruction or Condemnation shall be subject to the
following conditions:
(i) the Facility or the Substitute Facilities shall be in
substantially the same condition and value as an operating entity as
existed prior to the damage or destruction;
(ii) the Facility or the Substitute Facilities shall continue to
constitute a "project" as such term is defined in the Act; and
(iii) the Facility or the Substitute Facilities will be subject
to no Liens, other than Permitted Encumbrances.
(c) All such repair, replacement, rebuilding, restoration or
relocation of the Facility shall be effected with due diligence in a good and
workmanlike manner in material compliance with all applicable legal
requirements, shall be promptly and fully paid for by the
-15-
Company in accordance with the terms of the applicable contracts, and shall
automatically become a part of the Facility as if the same were specifically
provided herein.
Section 7.2 [Reserved.]
Section 7.3 Condemnation of Company-Owned Property. Subject to the
--------------------------------------
terms of the Security Documents, the Company shall be entitled to the proceeds
of any Condemnation award or portion thereof made for damage to or taking of any
Property which, at the time of such damage or taking, is not part of the
Facility.
Section 7.4 Waiver of Real Property Law Section 227. The Company
---------------------------------------
hereby waives the provisions of Section 227 of the Real Property Law of the
State or any law of like import now or hereafter in effect.
ARTICLE VIII
SPECIAL COVENANTS
Section 8.1 No Warranty of Condition or Suitability by Agency. THE
-------------------------------------------------
AGENCY MAKES NO WARRANTY, EITHER EXPRESS OR IMPLIED, AS TO THE CONDITION, TITLE,
DESIGN, OPERATION, MERCHANTABILITY OR FITNESS OF THE FACILITY OR THAT IT IS OR
WILL BE SUITABLE FOR THE COMPANY'S PURPOSES OR NEEDS.
Section 8.2 Hold Harmless Provisions.
------------------------
(a) The Company agrees that the Agency, its directors, members,
officers, agents (except the Company) and employees shall not be liable for and
agrees to defend, indemnify, release and hold the Agency, its directors,
members, officers, agents (except the Company) and employees harmless from and
against any and all (i) liability for loss or damage to Property or injury to or
death of any and all Persons that may be occasioned by, directly or indirectly,
any cause whatsoever pertaining to the Facility or arising by reason of or in
connection with the occupation or the use thereof or the presence of any Person
or Property on, in or about the Facility or the Land or (ii) liability arising
from or expense incurred by the Agency's financing, acquiring, renovating and
equipping, owning and leasing of the Facility, including without limiting the
generality of the foregoing, all claims arising from the breach by the Company
of any of its covenants contained herein, the exercise by the Company of the
authority conferred upon it pursuant to Section 4.1(d) of this Facility Lease
Agreement and all causes of action and reasonable attorneys' fees and any other
expenses incurred in defending any claims, suits or actions which may arise as a
result of any of the foregoing, provided that any such losses, damages,
liabilities or expenses of the Agency are not incurred or do not result from the
gross negligence or intentional or willful wrongdoing of the Agency or any of
its directors, members,
-16-
agents (except the Company) or employees. The foregoing indemnities shall apply
notwithstanding the fault or negligence in part of the Agency, or any of its
members, directors, officers, agents or employees and irrespective of the breach
of a statutory obligation or the application of any rule of comparative or
apportioned liability. The foregoing indemnities are limited only to the extent
of any prohibitions imposed by law.
(b) Notwithstanding any other provisions of this Facility Lease
Agreement, the obligations of the Company pursuant to this Section 8.2 shall
remain in full force and effect after the termination of this Facility Lease
Agreement until the expiration of the period stated in the applicable statute of
limitations during which a claim, cause of action or prosecution relating to the
matters herein described may be brought and payment in full or the satisfaction
of such claim, cause of action or prosecution relating to the matters herein
described and the payment of all expenses and charges incurred by the Agency, or
its respective members, directors, officers, agents and employees, relating to
the enforcement of the provisions herein specified.
(c) In the event of any claim against the Agency or its respective
members, directors, officers, agents or employees by any employee or contractor
of the Company or anyone directly or indirectly employed by any of them or
anyone for whose acts any of them may be liable, the obligations of the Company
hereunder shall not be limited in any way by any limitation on the amount or
type of damages, compensation, disability benefits or other employee benefit
acts.
Section 8.3 Right to Inspect Facility. The Agency and the duly
-------------------------
authorized agents of either of them shall have the right at all reasonable times
to inspect the Facility.
Section 8.4 Company to Maintain Its Existence. The Company agrees that
---------------------------------
during the Lease Term it will maintain its existence, will not dissolve,
liquidate or otherwise dispose of substantially all of its assets and will not
consolidate with or merge into another corporation or permit one or more
corporations to consolidate with or merge into it.
Section 8.5 Qualification in State. The Company throughout the Lease
----------------------
Term shall continue to be duly authorized to do business in the State.
Section 8.6 Agreement to File Annual Statements and Provide
-----------------------------------------------
Information. The Company shall file with the New York State Department of
-----------
Taxation and Finance an annual statement of the value of all sales and use tax
exemptions claimed in connection with the Facility in compliance with Section
874(8) of the New York State General Municipal Law. The Company shall submit a
copy of such annual statement to the Agency at the time of filing with the
Department of Taxation and Finance. The Company further agrees whenever
requested by the Agency to provide and certify or cause to be provided and
certified such information concerning thee Company, its finances, its operations
and its affairs necessary to enable the Agency to make any report required by
law, governmental regulation or any of the Agency Documents or Company
Documents.
-17-
Section 8.7 Books of Record and Account: Financial Statements. The
-------------------------------------------------
Company at all times agrees to maintain proper accounts, records and books in
which full and correct entries shall be made, in accordance with generally
accepted accounting principles, of all transactions and events relating to the
business and affairs of the Company. The Company shall furnish to the Agency
within thirty (30) days of their filing, copies of all reports, if any, filed
with the Securities and Exchange Commission, pursuant to the Securities Exchange
Act of 1934, as amended, relative to the Company.
Section 8.8 Compliance With Orders Ordinances Etc.
--------------------------------------
(a) The Company, throughout the Lease Term, agrees that it will
promptly comply, and cause any sublessee or occupant of the Facility to comply,
with all statutes, codes, laws, acts, ordinances, orders, judgments, decrees,
injunctions, rules, regulations, permits, licenses, authorizations, directions
and requirements, ordinary or extraordinary, which now or at any time hereafter
may be applicable to the Facility or any part thereof or to the acquisition,
renovation and equipping thereof, or to any use, manner of use or condition of
the Facility or any part thereof, of all federal, state, county, municipal and
other governments, departments, commissions, boards, courts, authorities,
officials and officers and companies or associations insuring the premises
having jurisdiction of the Facility or any part thereof, or to the acquisition,
renovation and equipping thereof, or to any use, manner of use or condition of
the Facility or any part thereof; provided, however, the Company need not comply
if such failure to comply would not have a material adverse effect on the
Agency, the Facility, or the use thereof.
(b) [Reserved.]
(c) Notwithstanding the provision of subsection (a) hereof, the
Company may in good faith contest the validity or the applicability of any
requirement of the nature referred to in such subsection (a) by appropriate
legal proceedings conducted in good faith and with due diligence. In such event,
the Company may fail to comply with the requirement or requirements so contested
during the period of such contest and any appeal therefrom. If at any time the
then existing use or occupancy of the Facility shall, pursuant to any zoning or
other law, ordinance or regulation, be permitted only so long as such use or
occupancy shall continue, the Company shall use its best efforts to not cause or
permit such use or occupancy to be discontinued without the prior written
consent of the Agency.
(d) Notwithstanding the provisions of this Section 8.8, if, because of
a breach or violation of the provisions of subsection (a) hereof (without giving
effect to subsection (c) hereof), the Agency, or any of its members, directors,
officers, agents, or employees, shall be subject to or threatened with a fine,
liability, penalty, expense, damages or imprisonment, then, upon notice from the
Agency, the Company shall immediately provide legal protection and/or pay
amounts necessary in the reasonable opinion of the Agency and its members,
directors, officers, agents and employees deem sufficient, to the extent
permitted by applicable law, to remove the threat of such fine, liability,
expense or imprisonment.
-18-
Section 8.9 Discharge of Liens and Encumbrances.
-----------------------------------
(a) The Company, throughout the Lease Term, shall not permit or create
or suffer to be permitted or created any Lien, except for Permitted
Encumbrances, upon the Facility or any part thereof by reason of any labor,
services or materials rendered or supplied or claimed to be rendered or supplied
with respect to the Facility or any part thereof. Mechanics' Liens shall be
discharged or bonded within sixty (60) days of the filing or perfection thereof.
(b) Notwithstanding the provisions of subsection (a) hereof, the
Company may in good faith contest any such Lien. In such event, the Company may
permit the items so contested to remain undischarged and unsatisfied during the
period of such contest and any appeal therefrom, unless the Agency shall notify
the Company that by nonpayment of any such item or items, the Agency, or its
officers, members, directors, agents or employees shall be subject to or
threatened with a fine, liability, penalty, expense or damages, in which event
the Company shall promptly secure payment of all such unpaid items by filing a
bond, in form and substance reasonably satisfactory to the Agency, thereby
causing such Lien to be removed or by taking such other actions as may be
reasonably satisfactory to the Agency to protect its interests.
Section 8.10 [Reserved.]
Section 8.11 Depreciation Deductions and Investment Tax Credit. The
-------------------------------------------------
parties agree that, as between them, the Company shall be entitled to all
depreciation deductions with respect to any depreciable property comprising a
part of the Facility and to any investment credit with respect to any part of
the Facility.
Section 8.12 Employment Opportunities, Notice of Jobs. The Company
----------------------------------------
covenants and agrees that, in consideration of the participation of the Agency
in the transactions contemplated herein, it will, except as otherwise provided
by collective bargaining contracts or agreements to which it is a party, cause
any new employment opportunities created in connection with the Facility to be
listed with the New York State Department of Labor, Community Services Division
and with the administrative entity of the service delivery area created pursuant
to the Job Training Partnership Act (PL 97-300) in which the Facility is located
(collectively, the "Referral Agencies"). The Company also agrees that it will,
except as otherwise provided by collective bargaining contracts or agreements to
which it is a party, first consider for such new employment opportunities
persons eligible to participate in federal job training partnership (PL 97-300)
programs who shall be referred by the Referral Agencies.
-19-
ARTICLE IX
RELEASE OF CERTAIN LAND; ASSIGNMENTS AND SUBLEASING;
MORTGAGE AND PLEDGE OF INTERESTS
Section 9.1 Restriction on Sale of Facility: Release of Certain Land.
--------------------------------------------------------
(a) Except as otherwise specifically provided in this Article IX and
in Article X and Article XI hereof, the Agency shall not sell, convey, transfer,
encumber, ▇▇▇▇▇ ▇ ▇▇▇▇ upon or otherwise dispose of the Facility or any part
thereof or any of its rights therein, including, without limitation, its rights
under this Facility Lease Agreement, without the prior written consent of the
Company. The Agency shall, at the request of the Company grant Permitted
Encumbrances and shall execute and deliver documents and instruments to grant
such Permitted Encumbrances, which documents and instruments shall be in form
and substance reasonably satisfactory to the Agency.
(b) The Agency and the Company from time to time may release from the
provisions of this Facility Lease Agreement and the leasehold estate created
hereby any part of, or interest in, the Land which is not necessary, desirable
or useful for the Facility. In such event, the Agency, at the Company's sole
cost and expense, shall execute and deliver any and all instruments necessary or
appropriate to so release such part of, or interest in, the Land and convey such
title thereto or interest therein to the Company.
(c) No conveyance of any part of, or interest in the Land effected
under the provisions of this Section 9.1 shall entitle the Company to any
abatement or diminution of the rents payable by it under this Facility Lease
Agreement.
Section 9.2 Removal of Fixture Equipment.
----------------------------
(a) The Agency shall not be under any obligation to remove, repair or
replace any inadequate, obsolete, worn out, unsuitable, undesirable or
unnecessary item of Fixture Equipment. Subject to the terms of the Security
Documents, in any instance where the Company determines that any item of Fixture
Equipment has become inadequate, obsolete, worn out, unsuitable, undesirable or
unnecessary, the Company, may remove such items from the Facility and may sell,
trade-in, exchange or otherwise dispose of the same, as a whole or in part,
provided that such removal will not materially impair the operation of the
Facility for the purpose for which it is intended or change the nature of the
Facility so that it does not constitute a "project" under the Act.
(b) The Agency shall execute and deliver to the Company all
instruments necessary or appropriate to enable the Company to sell or otherwise
dispose of any such item of Fixture Equipment. The Company shall pay any costs
(including reasonable counsel fees)
-20-
incurred in transferring title to any item of Fixture Equipment removed pursuant
to this Section 9.2.
(c) The removal of any item of Fixture Equipment pursuant to this
Section shall not entitle the Company to any abatement or diminution of the
rents payable by it under this Facility Lease Agreement or any abatement or
diminution of the amounts payable by it under the PILOT Agreement.
Section 9.3 Assignment and Subleasing.
-------------------------
(a) This Facility Lease Agreement may not be assigned, in whole or in
part, and the Facility may not be subleased, in whole or in part (except
pursuant to the Miles Lease and the Miles Sublease), without the prior written
consent of the Agency in each instance, which consent shall not be unreasonably
withheld. Any assignment or sublease shall be on the following conditions, as of
the time of such assignment or sublease:
(i) no assignment or sublease shall relieve the Company from
primary liability for any of its obligations hereunder;
(ii) the assignee or sublessee shall assume the obligations of
the Company hereunder to the extent of the interest assigned or
subleased;
(iii) the Company shall, within ten (10) days after the delivery
thereof, furnish or cause to be furnished to the Agency a true and
complete copy of such assignment or sublease and the instrument of
assumption;
(iv) neither the validity nor the enforceability of this
Facility Lease Agreement shall be adversely affected thereby; and
(v) the Facility shall continue to constitute a "project" as
such quoted term is defined in the Act.
(b) If the Agency shall so request, as of the purported effective date
of any assignment or sublease pursuant to subsection (a) of this Section 9.3,
the Company at its cost shall furnish the Agency, with an opinion, in form and
substance satisfactory to the Agency of Transaction Counsel as to item (v)
above.
(c) Notwithstanding anything to the contrary contained herein, the
Company may, without any further consent of the Agency, condominiumize all or
any portion of the Facility, including the fee therein. The Agency agrees to
cooperate with the Company in connection with such condominiumization of the
Facility and agrees to execute and deliver all such instruments as are
reasonably required to effectuate such condominiumization. The
-21-
Company hereby agrees to pay all costs and expenses of the Agency, including,
without limitation, all reasonable legal fees and expenses in connection
therewith.
Section 9.4 Mortgage of Agency's and Company's Interests to Guarantor.
---------------------------------------------------------
The Agency and the Company shall mortgage and grant a security interest in their
respective interests in the Facility (other than Unassigned Rights) to the
Guarantor as security for the Obligations (as defined in the Reimbursement
Agreement). Notwithstanding the foregoing, all indemnities herein contained
shall subsequent to such mortgage, pledge and assignment continue to run to the
Agency for its benefit.
Section 9.5 [Reserved.]
Section 9.6 Merger of Agency.
----------------
(a) Nothing contained in this Facility Lease Agreement shall prevent
the consolidation of the Agency with, or merger of the Agency into, or transfer
of title to the entire Facility to any other public benefit corporation or
political subdivision which has the legal authority to own and lease the
Facility, provided that upon any such consolidation, merger or transfer, the due
and punctual performance and observance of all the agreements and conditions of
this Facility Lease Agreement to be kept and performed by the Agency shall be
expressly assumed in writing by the public benefit corporation or political
subdivision resulting from such consolidation or surviving such merger or to
which the Facility shall be transferred.
(b) Within thirty (30) days after the consummation of any such
consolidation, merger or transfer of title, the Agency shall give notice thereof
in reasonable detail to the Company and shall furnish to the Company, at the
sole cost and expense of the Company, a favorable opinion of Independent Counsel
as to compliance with the provisions of Section 9.6(a) hereof. The Agency
promptly shall furnish such additional information with respect to any such
transaction as the Company may reasonably request.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default Defined.
-------------------------
(a) The following shall be "Events of Default" under this Facility
Lease Agreement:
(i) the failure by the Company to pay or cause to be paid on the
date due, the amount specified to be paid pursuant to Section 5.3
hereof, within ten (10) days after written notice;
-22-
(ii) the failure by the Company to observe and perform any
covenant contained in Sections 8.4 and 9.3 hereof;
(iii) the failure by the Company to pay or cause to be paid on
the dates due, subject to any applicable grace periods contained
therein the amounts specified to be paid pursuant to the PILOT
Agreement;
(iv) any representation or warranty of the Company herein or in
any of the Company Documents shall prove to have been false or
misleading in any material respect;
(v) the failure by the Company to observe and perform any
covenant, condition or agreement hereunder or under the PILOT
Agreement on its part to be observed or performed (except obligations
referred to in 10.1(a)(i), (ii) and (iii)) for a period of thirty (30)
days after written notice, specifying such failure and requesting that
it be remedied, given to the Company by the Agency; provided, however,
if such remedy cannot be completed within thirty (30) days, so long as
the Company has undertaken, within thirty (30) days following such
notice, all steps reasonably necessary to effectuate such cure and is
diligently continuing in good faith to pursue and/or prosecute such
cure, including, without limitation, securing performance bonds or
other security, as provided in this Facility Lease Agreement, the
Company shall not be deemed to be in default hereunder;
(vi) the dissolution or liquidation of the Company; or the
failure by the Company generally to pay its debts as they become due;
or an assignment by the Company for the benefit of creditors; the
commencement by the Company (as the debtor) of a case in bankruptcy or
any proceeding under any other insolvency law; or the commencement of
a case in Bankruptcy or any proceeding under any other insolvency law
against the Company (as the debtor) and a court having jurisdiction in
the premises enters a decree or order for relief against the Company
as the debtor in such case or proceeding, or such case or proceeding
is consented to by the Company or remains undismissed for sixty (60)
days, or the Company consents to or admits the material allegations
against it in any such case or proceeding; or a trustee, receiver or
agent (however named) is appointed or authorized to take charge of
substantially all of the property of the Company for the purpose of
enforcing a lien against such Property or for the purpose of general
administration of such Property for the benefit of creditors;
(vii) the occurrence and continuation of an Event of Default
under the Equipment Lease Agreement; or
-23-
(viii) the failure of the Company to observe, perform or comply,
subject to any applicable grace periods contained therein, with any
provision or covenant contained in the Environmental Compliance and
Indemnification Agreement.
(b) Notwithstanding the provisions of Section 10.1(a), if by reason of
force majeure any party hereto shall be unable in whole or in part to carry out
-------------
its obligations under Sections 4.1 and 6.1 of this Facility Lease Agreement and
if such party shall give notice and full particulars of such force majeure in
-------------
writing to the other party, within a reasonable time after the occurrence of the
event or cause relied upon, such obligations under this Facility Lease Agreement
of the party giving such notice (and only such obligations), so far as they are
affected by such force majeure, shall be suspended during continuance of the
-------------
inability, which shall include a reasonable time for the removal of the effect
thereof. The term "force majeure" as used herein shall include, without
-------------
limitation, acts of God, strikes, lockouts or other industrial disturbances,
acts of public enemies, acts, priorities or orders of any kind of the government
of the United States of America or of the State or any of their departments,
agencies, governmental subdivisions, or officials, any civil or military
authority, insurrections, riots, epidemics, landslides, lightning, earthquakes,
fire, hurricanes, storms, floods, washouts, droughts, arrests, restraint of
government and people, civil disturbances, explosions, breakage or accident to
machinery, transmission pipes or canals, shortages of labor or materials or
delays of carriers, partial or entire failure of utilities, shortage of energy
or any other cause or event not reasonably within the control of the party
claiming such inability and not due to its fault. The party claiming such
inability shall remove the cause for the same with all reasonable promptness. It
is agreed that the settlement of strikes, lockouts and other industrial
disturbances shall be entirely within the discretion of the party having
difficulty, and the party having difficulty shall not be required to settle any
strike, lockout and other industrial disturbances by acceding to the demands of
the opposing party or parties.
Section 10.2 Remedies on Default.
-------------------
(a) Whenever any Event of Default shall have occurred, the Agency may
take, to the extent permitted by law, any one or more of the following remedial
steps:
(i) declare, by written notice to the Company, to be immediately
due and payable, whereupon the same shall become immediately due and
payable: (A) all unpaid installments of rent payable pursuant to
Section 5.3 hereof, (B) all unpaid and past due payments in lieu of
taxes pursuant to the PILOT Agreement and (C) all other payments due
under this Facility Lease Agreement; provided, however, that if an
Event of Default specified in Section 10.1(a)(vii) hereof shall have
occurred, such installments of rent and other payments due under this
Facility Lease Agreement shall become immediately due and payable
without notice to the Company or the taking of any other action by the
Agency;
-24-
(ii) terminate this Facility Lease Agreement, reconvey the
Facility to the Company and terminate the PILOT Agreement. The Agency
shall have the right to execute an appropriate deed with respect to
the Facility and to place the same on record in the SuffoLk County
Clerk's Office, at the expense of the Company and in such event the
Company waives delivery and acceptance of such deed and the Company
hereby appoints the Agency its true and lawful agent and attorney-in-
fact (which appointment shall be deemed to be an agency coupled with
an interest), with full power of substitution to file on its behalf
all affidavits, questionnaires and other documentation necessary to
accomplish the recording of such deed; or
(iii) take any other action at law or in equity which may appear
necessary or desirable to collect the payments then due or thereafter
to become due hereunder and under the PILOT Agreement, and to enforce
the obligations, agreements or covenants of the Company under this
Facility Lease Agreement and under the PILOT Agreement.
(b) No action taken pursuant to this Section 10.2 shall relieve the
Company from its obligation to make all payments required by Section 5.3 hereof.
Section 10.3 Remedies Cumulative. No remedy herein conferred upon or
-------------------
reserved to the Agency is intended to be exclusive of any other available
remedy, but each and every such remedy shall be cumulative and in addition to
every other remedy given under this Facility Lease Agreement or now or hereafter
existing at law or inequity. No delay or omission to exercise any right or power
accruing upon any default shall impair any such right or power or shall be
construed to be a waiver thereof, but any such right and power may be exercised
from time to time and as often as may be deemed expedient. In order to entitle
the Agency as appropriate, to exercise any remedy reserved to it in this Article
X, it shall not be necessary to give any notice, other than such notice as may
be herein expressly required in this Facility Lease Agreement.
Section 10.4 Agreement to Pay Attorneys' Fees and Expenses. In the
---------------------------------------------
event the Company should default under any of the provisions of this Facility
Lease Agreement and the Agency should employ attorneys or incur other expenses
for the collection of amounts payable hereunder or the enforcement of
performance or observance of any obligations or agreements on the part of the
Company herein contained, the Company shall, on demand therefor, pay to the
Agency the reasonable fees of such attorneys and such other reasonable expenses
so incurred.
Section 10.5 No Additional Waiver Implied by One Waiver. In the event
------------------------------------------
any agreement contained herein should be breached by any party and thereafter
waived by any other party, such waiver shall be limited to the particular breach
so waived and shall not be deemed to waive any other breach hereunder.
-25-
ARTICLE XI
EARLY TERMINATION OF FACILITY LEASE AGREEMENT;
OPTION IN FAVOR OF COMPANY
Section 11.1 Early Termination of Facility Lease Agreement. The
---------------------------------------------
Company shall have the option to terminate this Facility Lease Agreement at any
time and upon filing with the Agency a certificate signed by an Authorized
Representative of the Company stating the Company's intention to do so pursuant
to this Section and the date upon which such payments required by Section 11.2
hereof shall be made (which date shall not be less than 10 nor more than 90 days
from the date such certificate is filed) and upon compliance with the
requirements set forth in Section 11.2 hereof.
Section 11.2 Conditions to Early Termination of Facility Lease
-------------------------------------------------
Agreement. In the event the Company exercises its option to terminate this
---------
Facility Lease Agreement in accordance with the provisions of Section 11.1
hereof, the Company shall make the following payments:
(a) To the Agency or the Taxing Authorities (as such term is defined
in the PILOT Agreement), as appropriate pursuant to the PILOT Agreement: all
amounts due and payable under the PILOT Agreement as of the date of the
conveyance described in Section 11.3 hereof.
(b) To the Agency: an amount certified by the Agency sufficient to pay
all reasonable unpaid fees and expenses of the Agency incurred under the Agency
Documents.
Section 11.3 Obligation to Purchase Facility. Upon termination or
-------------------------------
expiration of the Lease Term, in accordance with Sections 5.2 or 11.1 hereof,
the Company shall purchase the Facility from the Agency for the purchase price
of One Dollar ($1.00) plus all unpaid payments in lieu of taxes pursuant to the
PILOT Agreement through the date upon which this Facility Lease Agreement
terminates or expires. The Company shall purchase the Facility by giving written
notice to the Agency (which may be contained in the certificate referred to in
Section 11.1 hereof) (i) declaring the Company's election to purchase and (ii)
fixing the date of closing such purchase, which shall be the date on which this
Facility Lease Agreement is to be terminated. The rights and obligations of the
Company under this Section 11.3 shall survive the expiration or termination of
this Facility Lease Agreement.
Section 11.4 Conveyance on Purchase. At the closing of any purchase of
----------------------
the Facility pursuant to Section 11.3 hereof, the Agency shall, upon receipt of
the purchase price, deliver to the Company all necessary documents (i) to convey
to the Company title to the Facility, as the Facility exists, subject only to
the following: (A) any Liens to which title to the Facility was subject when
conveyed to the Agency, (B) any Liens created at the request of the
-26-
Company or to the creation of which the Company consented, (C) any Permitted
Encumbrances, including, without limitation, the lien of the Mortgage, if not
previously discharged, and (D) any Liens resulting from the failure of the
Company to perform or observe any of the agreements on its part contained in
this Facility Lease Agreement or arising out of an Event of Default hereunder,
and (ii) to release and convey to the Company all of the Agency's rights and
interest in and to any rights of action or any Net Proceeds of insurance or
Condemnation awards with respect to the Facility (but not including any
Unassigned Rights). Upon the conveyance of the Facility by the Agency to the
Company pursuant to this Article XI, the PILOT Agreement shall terminate. The
rights and obligations of the Company and the Agency under this Section 11.4
shall survive the expiration or termination of this Facility Lease Agreement.
ARTICLE XII
MISCELLANEOUS
Section 12.1 Notices. All notices, certificates and other
-------
communications hereunder shall be in writing, shall be deemed to have been duly
given when delivered or if not yet delivered shall be deemed effective at 12:00
p.m. on the third Business Day after mailing, and shall be either delivered
personally or sent by certified mail, postage prepaid, return receipt requested,
addressed as follows or to such other address as any party may specify in
writing to the other:
To the Agency:
Suffolk County Industrial
Development Agency
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Administrative Director
To the Company:
Melville Biologics, Inc.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: President
-27-
A copy of any notice sent by either the Company or the Agency pursuant
to Article X or Article XI hereof shall also be sent to the Guarantor at the
following address:
Miles Inc.
One Mellon Center
53rd Floor, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇ ▇. ▇▇▇▇, Senior Vice
President and Treasurer
Section 12.2 Binding Effect. This Facility Lease Agreement shall inure
--------------
to the benefit of and shall be binding upon the parties and their respective
successors and assigns.
Section 12.3 Severability. In the event any provision of this Facility
------------
Lease Agreement shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
Section 12.4 Amendments, Changes and Modifications. This Facility
-------------------------------------
Lease Agreement may not be amended, changed, modified, altered or terminated
except in a writing executed by the parties hereto.
Section 12.5 Execution of Counterparts. This Facility Lease Agreement
-------------------------
may be executed in several counterparts, each of which shall be an original and
all of which shall constitute but one and the same instrument.
Section 12.6 Applicable Law. This Facility Lease Agreement shall be
--------------
governed exclusively by the applicable laws of the State without regard or
reference to its conflict of laws principles.
Section 12.7 Further Assurances. The Agency and the Company shall
------------------
execute and deliver all instruments and shall furnish all information necessary
or appropriate to perfect or protect any security interest created or
contemplated by this Facility Lease Agreement and the Security Documents.
Section 12.8 Survival of Indemnities. All indemnities shall survive
-----------------------
any termination or expiration of this Facility Lease Agreement.
Section 12.9 Table of Contents and Section Headings not Controlling.
------------------------------------------------------
The Table of Contents and the headings of the several Sections in this Facility
Lease Agreement have been prepared for convenience of reference only and shall
not control or affect the meaning of or be taken as an interpretation of any
provision of this Facility Lease Agreement.
-28-
IN WITNESS WHEREOF, the Agency and the Company have caused this
Facility Lease Agreement to be executed in their respective names by their duly
authorized officers, all as of February 15, 1995.
SUFFOLK COUNTY INDUSTRIAL
DEVELOPMENT AGENCY
By /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Administrative Director
MELVILLE BIOLOGICS, INC.
By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
Title: President and CEO
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇)
: ss.:
COUNTY OF SUFFOLK)
On this 27th day of February, 1995, before me personally came ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say that he
resides at Ziemacki Lane, Jamesport, New York; that he is the Administrative
Director of the Suffolk County Industrial Development Agency, the public benefit
corporation of the State of New York described in and which executed the within
Facility Lease Agreement; and that he signed his name thereto by order of the
members of said public benefit corporation.
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
-----------------------------------
Notary Public
[SEAL]
-▇▇-
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇)
ss.:
COUNTY OF NEW YORK)
On this 28th day of February, 1995, before me personally came ▇▇▇▇▇▇
▇. ▇▇▇▇▇▇▇▇▇▇▇▇, to me known, who, being by me duly sworn, did depose and say
that he resides at ▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇; that he is
the President and CEO of Melville Biologics, Inc., the business corporation
described in and which executed the within Facility Lease Agreement; and that he
signed his name thereto by order of the Board of Directors of said corporation.
/s/ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------
Notary Public
[NOTARY SEAL APPEARS HERE]
-31-
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
ALL that certain plot, piece or parcel of land, situate, lying and
being at Melville, in the Town of Huntington, County of Suffolk and State of New
York, bounded and described as follows:
BEGINNING at a point on the new Northerly side of ▇▇▇▇▇▇ Road, distant
783.40 feet, Easterly as measured along said Northerly side of ▇▇▇▇▇▇ Road, from
the Southeasterly end of a connecting line, having a length of 52.23 feet,
connecting the said Northerly side of ▇▇▇▇▇▇ Road and the Easterly side of New
York State Route 110; said point of beginning also being where the Southeast
corner of the land now or formerly of ▇▇▇▇▇▇ intersects the said Northerly
side of ▇▇▇▇▇▇ Road;
RUNNING THENCE North 4 degrees 54 minutes 38 seconds East, 1047.70
feet, to the land now or formerly of Abramoske;
THENCE along said last mentioned land tile following two courses and
distances:
1. South 85 degrees 14 minutes 32 seconds East, 132.22 feet;
2. South 84 degrees-32 minutes 47 seconds East, 321.30 feet, to land
now or formerly of Brand;
THENCE along said last mentioned land, the following two courses and
distances:
1. South 5 degrees 38 minutes 21 seconds West, 280.65 feet;
2. South 4 degrees 54 minutes 38 seconds West, 772.18 feet, to the
new Northerly side of ▇▇▇▇▇▇ Roads
THENCE along said ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇ degrees 05 minutes 47 seconds
West, 450.00 feet, to the point or place of BEGINNING.
-32-
SCHEDULE A
SCHEDULE OF DEFINITIONS
"Act" means, collectively, Title 1 of Article 18-A of the General
---
Municipal Law of the State enacted into law as Chapter 1030 of the Laws of 1969
of the State, as amended together with Chapter 675 of the Laws of 1975 of the
State, as amended.
"Agency" means the (i) SuffoLk County Industrial Development Agency,
------
its successors and assigns, and (ii) any local governmental body resulting from
or surviving any consolidation or merger to which the Agency or its successors
may be a party.
"Agency Documents" means this Facility Lease Agreement, the
----------------
Environmental Compliance and Indemnification Agreement, the PILOT Agreement and
the Mortgage.
"Approving Resolution" means the resolution adopted by the Agency on
--------------------
February 27, 1995 authorizing the execution, delivery and performance of the
Agency Documents, as such resolution may be amended and supplemented from time
to time.
"Authorized Representative" means, in the case of the Agency, the
-------------------------
Chairman, the Vice Chairman, the Secretary, the Assistant Secretary or the
Administrative Director of the Agency; in the case of the Company, its
President, the Treasurer, the Secretary and any Vice President; and, in the case
of both, such additional persons as, at the time, are designated to act on
behalf of the Agency or the Company, as the case may be, by written certificate
furnished to the Agency or Company, as the case may be, containing the specimen
signature of each such person and signed on behalf of (i) the Agency by the
Chairman, the Vice Chairman, the Secretary, the Assistant Secretary or the
Administrative Director of the Agency, or (ii) the Company by the President, the
Treasurer, the Secretary or any Vice President of the Company.
"Bank" shall mean (i) PNC Bank, N.A., a national banking association
----
or (ii) its successors or assigns, or (iii) any surviving, resulting or
transferee banking institution authorized to do business in the State.
"▇▇▇▇ of Sale" means the ▇▇▇▇ of Sale given by the Company to the
------------
Agency with respect to the Fixture Equipment, dated the Closing Date as the same
may be amended from time to time.
"Business Day" means any day other than a Saturday, a Sunday, a legal
------------
holiday or a day on which banking institutions in New York, New York or any city
in which the principal office of the Bank is located are authorized by law or
executive order to remain closed.
"Closing Date" means the date of delivery of the Deed.
------------
"Company" means Melville Biologics, Inc., a business corporation duly
-------
organized and validly existing under the laws of the State of Delaware, and its
successors and assigns.
"Company Documents" means the ▇▇▇▇ of Sale, the Deed, the Facility
-----------------
Lease Agreement, the Mortgage, the Environmental Compliance and Indemnification
Agreement, the Reimbursement Agreement, the Processing Agreement the Miles
Lease, the Miles Sublease and the PILOT Agreement.
"Completion Date" means the date of completion of the Facility as
---------------
certified to pursuant to Section 4.3 of this Facility Lease Agreement.
"Condemnation" means the taking of title to, or the use of, Property
------------
under the exercise of the power of eminent domain by any governmental entity or
other Person acting under governmental authority.
"Construction Period" means the period (a) beginning on the date of
-------------------
commencement of acquisition, renovation and equipping of the Facility, which
date shall not be prior to December 2, 1994, and (b) ending on the Completion
Date.
"Deed" means the Deed given by the Company to the Agency with respect
----
to the Land and the existing improvements thereon, dated the Closing Date.
"Environmental Compliance and Indemnification Agreement" means the
------------------------------------------------------
Environmental Compliance and Indemnification Agreement dated as of February 15,
1995 by and between the Agency and the Company.
"Equipment Lease Agreement" means a certain Equipment Lease Agreement
-------------------------
to be entered into after the Closing Date, by and between the Agency, as lessor,
and the Company, as lessee, with the consent of the Guarantor, providing for the
lease by the Agency to the Company of certain equipment and personal property
not constituting part of the Fixture Equipment.
"Event of Default" when used with respect to this Facility Lease
----------------
Agreement, means any of the events defined as Events of Default by Section 10.1
of this Facility Lease Agreement.
"Facility" means the Land, the Improvements and this Fixture Equipment
--------
leased to the Company under this Facility Lease Agreement.
"Facility Lease Agreement" means this Facility Lease Agreement, dated
------------------------
as of February 15, 1995, by and between the Agency, as lessor, and the Company,
as lessee, with respect to the Facility, as the same may be amended from time to
time.
"Fixture Equipment" means all machinery, apparatus, equipment,
-----------------
fittings, appliances, building materials (to the extent they are fixtures) and
all other fixtures of every kind and nature whatsoever, and regardless of
whether the same may now or hereafter be attached or affixed to the Land or
Improvements, including, without limitation, all electrical,
-2-
antipollution, heating, lighting, incinerating, power, air conditioning,
plumbing, lifting, cleaning, fire prevention, fire extinguishing, refrigerating,
ventilating and communication machinery, apparatus, equipment, fittings,
appliances and fixtures, and all engines, pipes, pumps, tanks, motors, conduits,
ducts, compressors, elevators and escalators, and all articles of personal
property and goods of every kind and nature whatsoever, now or hereafter affixed
to, attached to, placed upon, or used or usable in any way in connection with
the use, enjoyment, occupancy or operation of the Land or Improvements to the
extent that an interest in any of the foregoing property arises under applicable
real property law.
"Guarantor" means Miles Inc., a business corporation duly established
---------
under the laws of the State of Indiana with an office at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
"Guaranty Agreement" means the Guaranty Agreement, dated February 7,
------------------
1995 given by the Guarantor to the Bank as security for the Loan, as the same
may be modified, amended, renewed or extended from time to time.
"Improvements" means all those buildings, improvements, structures and
------------
other related facilities (i) affixed or attached to the Land and (ii) not part
of the Fixture Equipment, all as they may exist from time to time.
"Land" means the property leased by the Agency to the Company pursuant
----
to this Facility Lease Agreement and more particularly described in Exhibit A
attached thereto.
"Lease Term" means the duration of the leasehold estate created in the
----------
Facility Lease Agreement as specified in Section 5.2 of this Facility Lease
Agreement.
"Lien" means any interest in Property securing an obligation owed to a
----
Person whether such interest is based on the common law, statute or contract,
and including but not limited to, the security interest arising from a mortgage,
encumbrance, pledge, conditional sale or trust receipt or a lease, consignment
or bailment for security purposes. The term "Lien" includes reservations,
exceptions, encroachments, easements, rights-of-way, covenants, conditions,
restrictions, leases and other similar title exceptions and encumbrances,
including but not limited to mechanics', materialmen's, warehousemen's,
carriers' and other similar encumbrances, affecting real property. For the
purposes of this definition, a Person shall be deemed to be the owner of any
Property which it has acquired or holds subject to a conditional sale agreement
or other arrangement pursuant to which title to the Property has been retained
by or vested in some other Person for security purposes.
"Loan" means the loan in the amount of $10,000,000 by the Bank to the
----
Company pursuant to the terms of the Loan Agreement.
"Loan Agreement" means the Loan Agreement, dated February 7, 1995
--------------
between the Company and the Bank for a $10,000,000 unsecured loan facility to
make the Loan.
-3-
"Miles Lease" means a certain lease agreement, dated February 7, 1995,
-----------
between the Company, as lessor, and Miles Inc., as lessee, as amended from time
to time, a memorandum of which has been recorded in the Suffolk County Clerk's
Office.
"Miles Sublease" means a certain sublease agreement, dated February 7,
--------------
1995, between Miles Inc., as sublessor, and the Company, as sublessee, as
amended from time to time, a memorandum of which has been recorded in the
Suffolk County Clerk's Office.
"Mortgage" means the Mortgage, Security Agreement and Fixture Filing,
--------
dated as of February 15, 1995 with respect to the Facility given by the Agency
and the Company to the Guarantor as security for the Obligations (as defined in
the Reimbursement Agreement) as the same may be modified, amended, renewed or
extended from time to time.
"Net Proceeds" means so much of the gross proceeds with respect to
------------
which that term is used as remain after payment of all expenses, costs and taxes
(including attorneys' fees) incurred in obtaining such gross proceeds.
"Permitted Encumbrances" means (i) exceptions to title set forth in
----------------------
the Title Report, (ii) the Mortgage, (iii) the Facility Lease Agreement, (iv)
utility, access and other easements and rights-of-way, restrictions and
exceptions that do not materially impair the utility or the value of the
Property affected thereby for the purposes for which it is intended, (v) Liens
which are approved in writing by the Agency, the Company and the Guarantor, (vi)
Liens for taxes not yet delinquent, (vii) the Miles Lease, (viii) the Miles
Sublease, (ix) the Reimbursement Agreement, (x) the Processing Agreement, (xi)
any rights-of New York Blood Center, Inc. under the Sewer Agreement listed in
Schedule B of the Title Report and (xii) inchoate mechanics liens.
"Person" or "Persons" means an individual, partnership, corporation,
------ -------
trust or unincorporated organization, and a government or agency or political
subdivision or branch thereof
"PILOT Agreement" means the Payment-in-Lieu-of-Tax Agreement, dated as
---------------
of February 15, 1995, between the Company and the Agency, as amended from time
to time.
"PILOT Payments" means any and all payments in lieu of taxes as
--------------
provided under the PILOT Agreement.
"Prime Rate" means the rate designated by the Bank from time to time
----------
as its "prime rate", whether or not such rate is the lowest rate of interest
charged by the Bank to its commercial customers.
"Processing Agreement" means the Agreement for Custom Processing,
--------------------
dated February 7, 1995, between the Company and the Guarantor with respect to
certain operations at the Facility.
-4-
"Property" means any interest in any kind of property or asset,
--------
whether real, personal or mixed, or tangible or intangible.
"Public Purposes" shall mean the State's objective to create
---------------
industrial development agencies for the benefit of the several counties, cities,
villages and towns in the State and to empower such agencies, among other
things, to acquire, construct, reconstruct, lease, improve, maintain, equip and
sell land and any building or other improvement, and all real and personal
properties, including, but not limited to, machinery and equipment deemed
necessary in connection therewith, whether or not now in existence or under
construction, which shall be suitable for manufacturing, warehousing, research,
commercial, recreation or industrial facilities, including industrial pollution
control facilities, in order to advance job opportunities, health, general
prosperity and the economic welfare of the people of the State and to improve
their standard of living.
"Reimbursement Agreement" means the Reimbursement and Security
-----------------------
Agreement, dated February 7, 1995 between the Company and the Guarantor, as
modified, amended and in effect from time to tine.
"Schedule of Definitions" means the words and terms set forth in this
-----------------------
Schedule of Definitions attached to the Lease Agreement, as the same may be
amended from time to time.
"Security Documents" means, collectively, the Mortgage, the
------------------
Reimbursement Agreement, the Processing Agreement, the Miles Lease and the Miles
Sublease.
"SEQR Act" means the State Environmental Quality Review Act and the
--------
regulations thereunder.
"State" means the State of New York.
-----
"Substitute Facilities" shall have the meaning assigned thereto in
---------------------
Section 7.1 of the Facility Lease Agreement.
"Taxing Authorities" shall have the meaning assigned thereto in the
------------------
PILOT Agreement.
"Title Report" means Certificates of Title No. 141-S-6382-AMD issued
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by First American Title Insurance Company of New York to the Agency on November
1, 1994 and redated and recertified on February 28, 1995.
"Transaction Counsel" means the law firm of Nixon, Hargrave, Devans &
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▇▇▇▇▇.
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"Unassigned Rights" means the rights of the Agency and moneys payable
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pursuant to and under Sections 5.3, 6.4(c) and (d) (ii), (iii) and (iv), 6.7,
8.2, 10.2, 10.4 and 11.2 of the Facility Lease Agreement.
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