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EXHIBIT 10.67
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LEASE AGREEMENT
between
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF DEMOPOLIS
and
MCCLAIN OF ALABAMA, INC.
DATED AS OF APRIL 1, 1997
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Pertaining to
$5,225,000
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF DEMOPOLIS
Industrial Development Revenue Bonds
Series 1997
(McClain of Alabama, Inc. Project)
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LEASE AGREEMENT
TABLE OF CONTENTS
Page
No.
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ARTICLE I
DEFINITIONS AND USE OF PHRASES
Section 1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 1.2 Use of Phrases. . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1 Representations by the Board . . . . . . . . . . . . . . . . 9
Section 2.2 Representations and Warranties by the Company . . . . . . . 9
ARTICLE III
DEMISING CLAUSES
Section 3.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE IV
CONSTRUCTION OF IMPROVEMENTS AND
ACQUISITION OF EQUIPMENT
Section 4.1 Agreement to Construct Improvements and Acquire and
Install Equipment . . . . . . . . . . . . . . . . . . . . . 13
Section 4.2 Agreement to Issue the Bonds . . . . . . . . . . . . . . . . 14
Section 4.3 No Warranty of Suitability by Issuer. Company Required to
Bear Certain Costs in Certain Events . . . . . . . . . . . . 14
Section 4.4 Company to Pursue Rights against Contractors, etc. . . . . . 15
ARTICLE V
DURATION OF TERM AND
RENTAL PROVISIONS
Section 5.1 Duration of Term . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.2 Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5.3 Additional Rent - Fees and Expenses of Trustee
and Remarketing Agent . . . . . . . . . . . . . . . . . . . 16
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Section 5.4 Additional Rent - Board's Expenses . . . . . . . . . . . . . 17
Section 5.5 Options to Prepay Basic Rent . . . . . . . . . . . . . . . . 17
Section 5.6 Mandatory Prepayment of Basic Rent in the
Event of a Determination of Taxability . . . . . . . . . . . 17
Section 5.7 Notice of Prepayment . . . . . . . . . . . . . . . . . . . . 18
Section 5.8 Redemption of Bonds With Prepayment Moneys . . . . . . . . . 18
Section 5.9 Obligation of Company Unconditional . . . . . . . . . . . . 18
ARTICLE VI
MAINTENANCE, TAXES AND INSURANCE
Section 6.1 Maintenance, Additions, Alterations and Improvements . . . . 19
Section 6.2 Removal of Equipment. . . . . . . . . . . . . . . . . . . . 20
Section 6.3 Taxes, Other Governmental Charges and Utility Charges . . . 23
Section 6.4 Insurance Required . . . . . . . . . . . . . . . . . . . . . 23
Section 6.5 Advances by Board or Trustee . . . . . . . . . . . . . . . . 24
ARTICLE VII
PROVISIONS RESPECTING DAMAGE,
DESTRUCTION AND CONDEMNATION
Section 7.1 Damage and Destruction Provisions . . . . . . . . . . . . . 25
Section 7.2 Condemnation Provisions . . . . . . . . . . . . . . . . . . 26
Section 7.3 Condemnation of Right to Use of Project for Limited
Period . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 7.4 Condemnation of Company-Owned Property . . . . . . . . . . . 27
Section 7.5 Provisions Relating to the Incurring of Certain
Expenses after Bonds Paid . . . . . . . . . . . . . . . . . 27
Section 7.6 Optional Application of Net Insurance Proceeds or Net
Condemnation Award . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VIII
PARTICULAR COVENANTS OF THE COMPANY
Section 8.1 General Covenants . . . . . . . . . . . . . . . . . . . . . 28
Section 8.2 Release and Indemnification Covenants . . . . . . . . . . . 28
Section 8.3 Inspection of Project . . . . . . . . . . . . . . . . . . . 30
Section 8.4 Agreement to Maintain Corporate Existence . . . . . . . . . 30
Section 8.5 Qualification in Alabama . . . . . . . . . . . . . . . . . . 31
Section 8.6 Further Assurances . . . . . . . . . . . . . . . . . . . . . 31
Section 8.7 Concerning the Tax-Exempt Nature of the Interest
Income on the Bonds . . . . . . . . . . . . . . . . . . . . 31
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ARTICLE IX
CERTAIN PROVISIONS RELATING
TO ASSIGNMENT, SUBLEASING AND TO THE BONDS
Section 9.1 Provisions Relating to Assignment and Subleasing by
Company . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Section 9.2 Assignment of Lease by Board; Required Consents to
Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 33
Section 9.3 References to Bonds Ineffective After Bonds Paid . . . . . . 33
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
Section 10.1 Events of Default Defined . . . . . . . . . . . . . . . . . 34
Section 10.2 Remedies on Default . . . . . . . . . . . . . . . . . . . . 35
Section 10.3 No Remedy Exclusive . . . . . . . . . . . . . . . . . . . . 36
Section 10.4 Agreement to Pay Attorneys' Fees . . . . . . . . . . . . . . 36
Section 10.5 No Additional Waiver Implied by One Waiver . . . . . . . . . 37
ARTICLE XI
OPTIONS
Section 11.1 Option to Purchase After Payment of Bonds . . . . . . . . . 37
Section 11.2 Option to Terminate . . . . . . . . . . . . . . . . . . . . 37
Section 11.3 Option to Purchase Portions of Project Site . . . . . . . . 38
ARTICLE XII
MISCELLANEOUS
Section 12.1 Covenant of Quiet Enjoyment. Surrender of Project . . . . . 39
Section 12.2 Retention of Title to Project by Board. Grant of
Utility Easements. Connecting Utilities . . . . . . . . . . 39
Section 12.3 Interest Rate Limitation . . . . . . . . . . . . . . . . . . 39
Section 12.4 This Lease a Net Lease . . . . . . . . . . . . . . . . . . . 39
Section 12.5 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Section 12.6 Certain Prior and Contemporaneous Agreements Cancelled . . . 41
Section 12.7 Limited Liability of Board . . . . . . . . . . . . . . . . . 41
Section 12.8 Binding Effect . . . . . . . . . . . . . . . . . . . . . . . 41
Section 12.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . 41
Section 12.10 Article and Section Captions . . . . . . . . . . . . . . . . 41
Section 12.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . 42
Exhibit A - Description of Project Site
Exhibit B - Description of the Equipment
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LEASE AGREEMENT between THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF DEMOPOLIS, a public corporation organized under the laws of the State
of Alabama (the "Board") and MCCLAIN OF ALABAMA, INC., a corporation organized
under the laws of the State of Michigan (the "Company"),
R E C I T A L S:
Acting pursuant to an Interim Agreement hereinafter referred to,
the Board has heretofore acquired the real property hereinafter described and
the Company has commenced the construction of improvements to a manufacturing
plant located thereon and the acquisition and installation in said plant and
elsewhere on the said real property of certain items of machinery, equipment
and other personal property for use in the operation thereof. To finance the
cost of acquiring said real property, constructing said improvements and
acquiring and installing said machinery, equipment and other personal property,
the Board proposes to issue, at the request of the Company, $5,225,000
principal amount of its Industrial Development Revenue Bonds, Series 1997
(McClain of Alabama, Inc. Project). The Bonds will be issued under a Trust
Indenture dated as of April 1, 1997, from the Board to LaSalle National Bank, a
national banking association the principal corporate trust office of which is
located in the City of Chicago, Illinois. The said Trust Indenture is being
executed and delivered simultaneously with the delivery hereof, and the terms
and conditions thereof, including particularly and without limitation those
relating to the maturity date of the Bonds, the interest rates thereon and the
provisions for prepayment thereof prior to their final maturity, are hereby
made a part of this Lease Agreement as fully and completely as if set out
herein. To achieve certain of the objectives hereinabove outlined, the Board
and the Company have entered into this Lease Agreement.
NOW, THEREFORE, THIS AGREEMENT
W I T N E S S E T H:
That in consideration of the respective representations and
agreements herein contained, the parties hereto agree as follows:
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ARTICLE I
DEFINITIONS AND USE OF PHRASES
SECTION 1.1 DEFINITIONS. The following words and phrases and
others evidently intended as the equivalent thereof shall, in the absence of
clear implication herein otherwise, be given the following respective
interpretations herein:
"AFFILIATE" means any person, firm or corporation controlled by,
or under common control with, the Company and any person, firm or corporation
controlling the Company.
"AUTHORIZED BOARD REPRESENTATIVE" means the person or persons at
the time designated as such by written certificate furnished to the Company and
the Trustee, containing the specimen signature or signatures of such person or
persons and signed on behalf of the Board by the Chairman or the Vice Chairman
of the Directors.
"AUTHORIZED COMPANY REPRESENTATIVE" means the person or persons
at the time designated as such by written certificate furnished to the Board
and the Trustee, containing the specimen signature or signatures of such person
or persons and signed on behalf of the Company by the Chairman of its Board of
Directors, by its President, by any Vice President, by its Secretary or by its
Treasurer.
"AUTHORIZING ACT" means Article 4 of Chapter 54 of Title 11
(Sections 11-54-80 to 11-54-101, inclusive) of the Code of Alabama of 1975, as
amended.
"BASIC RENT" means (i) the moneys payable by the Company pursuant
to the provisions of Section 5.2 hereof, (ii) any other moneys payable by the
Company pursuant to this Lease to provide for the payment of the principal of
and the interest and premium (if any) on, or purchase price of, the Bonds
(other than the aforesaid moneys payable pursuant to Section 5.2 hereof), and
(iii) any other moneys payable by the Company pursuant to this Lease that are
herein referred to as Basic Rent.
"BOARD" means (i) The Industrial Development Board of the City of
Demopolis and its successors and assigns, and (ii) any public corporation
resulting from or surviving any consolidation or merger to which it or its
successors may be a party as provided in Section 8.6 of the Indenture.
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"BOND COUNSEL" means Independent Counsel whose experience in
matters relating to the issuance of obligations of states and their political
subdivisions is nationally recognized.
"BOND PAYMENT DATE" means each date (including any date fixed for
redemption of Bonds) on which Debt Service is payable on the Bonds.
"BOND PURCHASE FUND" means the Bond Purchase Fund created in
Section 7.2 of the Indenture.
"BONDS" means the Board's Industrial Development Revenue Bonds,
Series 1997 (McClain of Alabama, Inc. Project), authorized in Article III of
the Indenture to be issued in the aggregate principal amount of $5,225,000.
"BUSINESS DAY" means any day other than a Saturday, a Sunday or a
day on which banking institutions are closed in any of the following locations:
(i) the city in which the principal office of the Trustee is located, (ii) the
city in which the principal office of the Remarketing Agent is located, (iii)
the city in which the office of the Credit Obligor where drawings under the
Letter of Credit are to be made is located, (iv) the City of New York, New
York, or (v) the City of Chicago, Illinois.
"CODE" means the Internal Revenue Code of 1986, as amended from
time to time.
"COMPANY" means the party of the second part hereto and, subject
to the provisions of Section 7.4 hereof, includes its successors and assigns
and any corporation resulting from or surviving any consolidation or merger to
which it or its successors may be a party.
"COUNSEL" means any attorney or firm of attorneys duly admitted
to practice before the highest court of one or more states of the United States
of America or of the District of Columbia.
"CREDIT OBLIGOR" means Standard Federal Bank, a federal savings
bank and its successors and assigns, until a Substitute Letter of Credit shall
have been accepted by the Trustee, and thereafter "Credit Obligor" means the
issuer of the Substitute Letter of Credit.
"DEBT SERVICE FUND" means the Bond Principal and Interest Fund
created in Section 7.1 of the Indenture.
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"DEFAULT" or "DEFAULT" means an event or condition the occurrence
of which would, with the lapse of time or the giving of notice or both, become
an Event of Default.
"DETERMINATION OF TAXABILITY" means a determination that the
interest income on any of the Bonds is Taxable, which determination shall be
deemed to have been made upon the occurrence of the first to occur of the
following:
(a) the date on which the Company determines that the interest
income on any of the Bonds is Taxable by filing with the Trustee a
statement to that effect; or
(b) the date on which the Company shall be advised by private
ruling, technical advice or any other written communication from an
authorized official of the Internal Revenue Service that, based upon any
filings of the Company, or upon any review or audit of the Company, or
upon any other grounds whatsoever, the interest income on any of the
Bonds is Taxable; or
(c) the date on which the Company shall receive notice from
the Trustee in writing that the Trustee has been advised (i) by any
Holder of any Bonds that the Internal Revenue Service has determined
that the interest income on the Bonds is Taxable or (ii) by any
authorized official of the Internal Revenue Service that the interest
income on any of the Bonds is Taxable;
provided that no Determination of Taxability shall be deemed to have occurred:
(1) as a result of a determination by the Company pursuant to the preceding
clause (a) unless supported by a written opinion of Bond Counsel acceptable to
the Trustee and the Board that the interest income on the Bonds is Taxable; or
(2) as a result of the event described in the preceding clauses (b) or (c)
unless and until (1) the Company has been afforded a reasonable opportunity, at
its expense, to contest such determination either through its own action (if
permitted by law) or by or on behalf of one or more of the Holders of the Bonds
and (2) such contest, if made, has been abandoned by the Company or has been
finally determined by a court of competent jurisdiction from which no further
appeal exists, but if such contest has not been abandoned or finally determined
within three years of the event described in either of said clauses (b) and (c)
which forms the basis of the Determination of Taxability in question, then such
Determination of Taxability shall be deemed to have occurred three years after
the date of such event.
"BOND COUNSEL" means Independent Counsel whose experience in
matters relating to the issuance of obligations by states and their political
subdivisions is nationally recognized.
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"EQUIPMENT" means those items of machinery, equipment and other
personal property that are generally described on, and are referred to as
"Equipment" in, Exhibit B attached hereto and made a part hereof, and any other
items of machinery, equipment and other personal property that, under the
provisions hereof, are to constitute part of the Equipment.
"EVENT OF DEFAULT" means any of the events described in Section
10.1 hereof.
"IMPROVEMENTS" means the improvements to the Plant required by
the provisions of Section 4.1 hereof to be constructed by the Company.
"INDENTURE" means the Trust Indenture between the Board and
LaSalle National Bank, dated as of April 1, 1997, under which (i) the Bonds are
authorized to be issued, and (ii) the Board's interest in this Lease Agreement
and the revenues and receipts to be derived by the Board from any leasing or
sale of the Project are to be assigned as security for payment of the principal
of and the interest and premium (if any) on the Bonds, as said Trust Indenture
now exists and as it may hereafter be supplemented and amended.
"INDEPENDENT COUNSEL" means an attorney or firm of attorneys duly
admitted to practice before the highest court of one or more states of the
United States of America or the District of Columbia and not employed full time
by the Board, the Company, an Affiliate or the Trustee.
"INDEPENDENT ENGINEER" means an independent engineer or
engineering firm not employed full time by the Board, the Company or an
affiliate.
"INTERIM AGREEMENT" means that certain Interim Agreement dated as
of August 1, 1996, between the Board and the Company.
"ISSUE DATE" means the date of the initial authentication and
delivery of the Bonds.
"LEASE TERM" means the period beginning on the date of delivery
of these presents and, subject to the provisions of this Lease Agreement,
continuing until 11:59 o'clock, p.m., on April 1, 2007.
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"LETTER OF CREDIT" means the initial letter of credit delivered
to the Trustee on the Issue Date and, unless the context indicates otherwise,
any Substitute Letter of Credit accepted by the Trustee.
"LOCAL FACILITIES" means facilities of which the Company or a
related person or persons (as the terms "related person" and "facilities" are
used in Section 144(a)(3) of the Code) is, was or will be the principal user
and which are located in Marengo County, Alabama, but outside the corporate
limits of any municipality, as such limits exist on the Issue Date.
"MORTGAGE" means that certain Mortgage, Assignment of Leases and
Security Agreement dated as of April 1, 1997, executed by the Company and the
Board in favor of the Credit Obligor, including any amendments or supplements
thereto, until a Substitute Letter of Credit shall have been accepted by the
Trustee, and thereafter "Mortgage" means the instrument (if any) securing the
Company's obligations with respect to such Substitute Letter of Credit.
"MUNICIPALITY" means the City of Demopolis, Alabama, and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party.
"NET CONDEMNATION AWARD" means the total amount awarded as
compensation for any part of the Project taken under the exercise of the power
of eminent domain plus damages to any part not taken, less and except (i) any
portion thereof to which the Company is entitled under the provisions of
Section 7.4 hereof, and (ii) all attorneys' fees and other costs and expenses
incurred in the condemnation proceeding with respect to which such award was
made (other than those paid directly by the Company or deducted, pursuant to
the provisions of said Section 7.4, from that portion of the award to which it
is entitled under the provisions thereof).
"NET INSURANCE PROCEEDS" means the total insurance proceeds
recovered by the Board, the Company and the Trustee on account of any damage to
or destruction of the Project or any part thereof less all expenses (including
reasonable attorneys' fees and any extraordinary expenses of the Trustee)
incurred in the collection of such proceeds.
"OUTSTANDING," when used with reference to any of the Bonds,
means, at any date as of which the amount of such Bonds outstanding is to be
determined, all such Bonds which have been theretofore authenticated and
delivered by the Trustee under the Indenture, except (i) those of such Bonds
cancelled by the Trustee because of payment at or after their respective
maturities or redemption prior to their respective maturities, (ii) those of
such Bonds for the payment or redemption of which provisions shall have been
made with the Trustee as provided in Article XIII of the Indenture and (iii)
those of such Bonds in exchange for which, or in lieu
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of which, other Bonds have been authenticated and delivered under the
Indenture. In determining whether the Holders of a requisite aggregate
principal amount of outstanding Bonds have concurred in any request, demand,
authorization, direction, notice, consent or waiver under the provisions of the
Indenture, Bonds which are owned by the Company or any Affiliate shall be
disregarded and deemed not to be outstanding hereunder for the purpose of any
such determination.
"PERMITTED ENCUMBRANCES" means, as of any particular time, (a)
liens for ad valorem taxes and special assessments not then delinquent, (b)
this Lease Agreement and the Indenture, (c) inchoate mechanics' and
materialmen's liens, (d) utility, access, drainage and other easements and
rights of way, restrictions and exceptions that a licensed engineer (who may,
but need not be, an employee of the Company) certifies will not materially
interfere with or impair the operations being conducted in or about the Project
(or, if no operations are being conducted in or about the Project, the
operations for which the Project was designed or last modified), (e) such minor
defects, irregularities, encumbrances, easements, rights-of-way and clouds on
title (including zoning and other similar restrictions and regulations) as
customarily exist with respect to properties similar in character to the
Project and as do not, in the opinion of Counsel, in the aggregate materially
impair the use of the property affected thereby for the purpose for which it
was acquired or is held by the Board, (f) with respect to the Project Site, any
easements, restrictions or other exceptions referred to in Exhibit A hereto and
(g) the Mortgage.
"PLANT" means that certain manufacturing plant located on the
Project Site, as said plant may at any time exist.
"PROJECT" means the Project Site, the Plant and the Equipment as
they may at any time exist, and all other property and rights referred to or
intended so to be in the demising clauses hereof or in any way subject to the
demise hereof.
"PROJECT DEVELOPMENT COSTS" means the costs of acquiring the
Project Site and the improvements located thereon, constructing the
Improvements and acquiring and installing the Equipment, the expenses incurred
by the Board in connection with the issuance and sale of the Bonds (including
the initial charge of the Trustee, the fee for the issuance of the initial
Letter of Credit and the fiscal, legal, printing, advertising, recording and
other similar fees and expenses relating thereto), interest on the Bonds to the
extent such interest constitutes a Qualified Project Cost, and all costs and
expenses incurred by the Issuer in connection with and directly related to the
planning, development and design of the Improvements and the Equipment,
including, without limiting the generality of the foregoing, any such costs or
expenses paid by the Company or by the Board with funds advanced by the Company
and for which the Company is entitled to be reimbursed under the provisions of
the Interim Agreement.
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"PROJECT SITE" means the real property specifically described in
Exhibit A attached hereto and made a part hereof (to the extent that at the
time it is subject to the demise hereof) and any other real property that under
the terms hereof constitutes a part of the Project Site.
"REMARKETING AGENT" means LaSalle National Bank or any successor
appointed pursuant to the provisions of Section 11.7 of the Indenture.
"TAXABILITY DATE" means the date that, according to a
Determination of Taxability, the interest income on any of the Bonds became
Taxable.
"TAXABLE," when applied to the interest income on any of the
Bonds, means that, under federal tax laws and regulations issued thereunder, as
such laws and regulations exist on the Issue Date or as they may thereafter be
amended, the interest income on such Bond is includable in gross income of the
recipient thereof for Federal income tax purposes for any reason other than the
fact (and for the period) that such Bond is held by a person who is a
"substantial user" of the Project or a "related person" within the meaning of
Section 147(a) of the Code or any successor provision.
"TENDER DATE" means the date on which Bonds are tendered (or
deemed tendered) for purchase pursuant to the optional or mandatory tender
provisions of the Indenture.
"TENDERED BONDS" means Bonds tendered (or deemed tendered) for
purchase pursuant to the optional or mandatory tender provisions of the
Indenture.
"TRUSTEE" means the Trustee at the time serving as such under
the Indenture.
SECTION 1.2 USE OF PHRASES. "Herein," "hereby," "hereunder,"
"hereof," "hereinbefore," "hereinafter" and other equivalent words refer to
this Lease Agreement as an entirety and not solely to the particular portion
thereof in which any such word is used. The definitions set forth in Section
1.1 hereof include both singular and plural, unless a separate definition is
included for the singular or plural, as the case may be. Whenever used herein,
any pronoun shall be deemed to include both singular and plural and to cover
all genders. Any percentage of Bonds, specified herein for any purpose, is to
be figured on the unpaid principal amount thereof then Outstanding.
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ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION 2.1 REPRESENTATIONS BY THE BOARD. The Board makes the
following representations and warranties as the basis for the undertakings on
its part herein contained:
(a) The Board is duly incorporated under the provisions of the
Authorizing Act by Certificate of Incorporation duly filed for record in
the office of the Judge of Probate of Marengo County, Alabama, and is
not in default under any of the provisions contained in said Certificate
of Incorporation or in the laws of Alabama;
(b) Under the provisions of the Authorizing Act and its
Certificate of Incorporation, the Board has the power to enter into the
transactions contemplated by this Lease Agreement and to carry out its
obligations hereunder;
(c) The Board has good and marketable title to the Project
Site, subject only to Permitted Encumbrances;
(d) The Project Site is located within the limits of Marengo
County, Alabama, but outside the corporate limits of any incorporated
municipality and outside the police jurisdiction of any incorporated
municipality other than the City of Demopolis, Alabama;
(e) The execution and delivery of this Lease Agreement on its
part have been duly authorized by all necessary corporate action and
this Lease Agreement, when executed and delivered, will constitute the
legal, valid and binding agreement of the Board, enforceable in
accordance with its terms subject to laws regarding bankruptcy and
insolvency and other laws of general application affecting the rights
and remedies of creditors.
SECTION 2.2 REPRESENTATIONS AND WARRANTIES BY THE COMPANY. The
Company makes the following representations and warranties as the basis for the
undertakings on its part herein contained:
(a) The Company is a corporation organized under the laws of
Michigan, is in good standing under its certificate of incorporation and
the laws
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of said state, is duly qualified as a foreign corporation in the State
of Alabama and has power to enter into, and to perform and observe the
agreements and covenants on its part contained in, this Lease Agreement;
(b) Neither the execution and delivery of this Lease
Agreement, the consummation of the transactions contemplated hereby, nor
the fulfillment or compliance with the terms and conditions hereof,
conflict with, or result in a breach of, any of the terms, conditions or
provisions of any corporate restriction or limitation or any agreement,
instrument or court or other governmental order to which the Company is
now a party or by which the Company is bound, or constitute a default
under any of the foregoing.
(c) The execution and delivery of this Lease Agreement on its
part have been duly authorized by all necessary corporate action, and
this Lease Agreement, when executed and delivered, will constitute the
legal, valid and binding agreement of the Company enforceable in
accordance with its terms, subject to laws regarding bankruptcy and
insolvency and other laws of general application affecting the rights
and remedies of creditors.
(d) The acquisition, construction, and installation of the
Project were not commenced prior to August 22, 1996 (the effective date
of the Interim Agreement dated as of August 1, 1996, between the Board
and the Company).
(e) Not less than ninety-five percent (95%) of the proceeds
derived by the Board from the sale of the Bonds will be applied for the
acquisition of a "manufacturing facility" within the meaning of Section
144(b)(12)(C) of the Code and the Company presently intends to use or
operate the Project as a "manufacturing facility" (as so defined) until
the date on which the Bonds have been fully paid and knows of no reason
why the Project will not be so operated.
(f) The information furnished by the Company and used by the
Board in preparing the certification pursuant to Section 148 of the Code
and information statement pursuant to Section 149(e) of the Code is
accurate and complete as of the date of the issuance of the Bonds.
(g) On the date of the delivery of this Lease Agreement, the
Company is the only principal user (as the term "principal user" is used
in Section 144(a)(4)(B) of the Code) of the Project and expects to be so
until the date on which the Bonds have been fully paid.
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(h) Not less than ninety-five per cent (95%) of the proceeds
derived by the Board from the sale of the Bonds will be applied for the
acquisition, construction, reconstruction or improvement of land or
property of a character subject to the allowance for depreciation within
the meaning of Section 144(a) of the Code with respect to the Project.
(i) Less than 25% of the net proceeds of the Bonds will be
used (directly or indirectly for the acquisition of land (or an interest
therein) within the meaning of Section 147(c) of the Code.
(j) The Company will expend as Project Development Costs an
amount equal to at least 15% of the cost of those portions of the Plant
and the Equipment the first use of which was not by the Company toward
the rehabilitation of such portions within the meaning of Section 147(d)
of the Code and the regulations issued thereunder.
(k) There have not been issued since April 30, 1968, any bonds
(as the term "bonds" is used in Section 144(a)(2) of the Code) the
proceeds of which were or are to be used primarily with respect to Local
Facilities.
(l) The amount of all capital expenditures (as determined as
provided in Section 144(a)(4)(A)(ii) of the Code) made with respect to
Local Facilities during the period beginning three (3) years prior to
the Issue Date, and ending on the Issue Date, was less than $1,000,000.
(m) The average maturity of the Bonds does not exceed 120% of
the average reasonably expected economic life of the facilities being
financed with the net proceeds of the Bonds, all computed in accordance
with Section 147(b) of the Code
(n) The aggregate face amount of all outstanding tax-exempt
facility-related bonds, including the Bonds, which are required by
Section 144(a)(10)(B) of the Code to be considered in determining
whether there are now outstanding tax-exempt facility-related bonds
attributable or allocated to the Company or any related person, under
Section 144(a)(10)(A) of the Code, is, on the date of the issuance of
the Bonds, less than $40,000,000.
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(o) The Company has not had and will not have issued on its
behalf bonds that will be treated as part of the same issue as the Bonds
within the meaning of Section 1.150T-1 of the Treasury Regulations.
ARTICLE III
DEMISING CLAUSES
SECTION 3.1 The Board hereby demises and leases to the Company,
subject to Permitted Encumbrances, and the Company hereby rents from the Board,
subject to Permitted Encumbrances, for and during the Lease Term, the following
described properties and related rights:
I
The real property situated in Marengo County, Alabama, that is
specifically described in Exhibit A attached hereto and made a part hereof;
II
The Plant and any other improvements constituting real property
now or hereafter situated on the Project Site, all permits, easements,
licenses, rights-of-way, contracts, leases, privileges, immunities and
hereditaments pertaining or applicable to the Project Site and all fixtures now
or hereafter owned by the Board and installed on the Project Site or in any
other improvements now or hereafter located on the Project Site, it being the
intention hereof that all property, rights and privileges hereafter acquired
for use as a part of or in connection with or as an improvement to the Project
Site shall be as fully covered hereby as if such property, rights and
privileges were now owned by the Board and were specifically described herein;
and
III
All items (whether or not fixtures) of machinery, equipment and
other personal property that at any time, under the provisions of this Lease
Agreement, constitute the Equipment, including, without limitation, the items
(whether or not fixtures) of machinery, equipment and other personal property
generally described in Exhibit B attached hereto and made a part hereof,
excluding, however, any equipment or other personal property that, under the
provisions of this Lease Agreement, is, or is to become (prior to the
termination of this Lease Agreement), the sole property of the Company or third
parties.
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This Lease Agreement is made, however, upon and subject to the
following terms and conditions, to each of which the Board and the Company
hereby agree:
ARTICLE IV
CONSTRUCTION OF IMPROVEMENTS AND
ACQUISITION OF EQUIPMENT
SECTION 4.1 AGREEMENT TO CONSTRUCT IMPROVEMENTS AND ACQUIRE AND
INSTALL EQUIPMENT. The Company will proceed with, and will complete as
promptly as practicable,
(a) the construction, wholly within the boundary lines of the
Project Site, of improvements to the existing manufacturing plant
located on the Project Site, substantially in accordance with plans and
specifications therefor prepared by the Company, and
(b) the acquisition and installation in or about the Plant and
wholly within the boundary lines of the Project Site, of the Equipment,
such acquisition and installation to be made substantially in accordance
with written orders and directions from the Company,
and will pay, solely out of the moneys on deposit in the Construction Fund and
other moneys provided by the Company, the costs of such construction,
acquisition and installation. The Company may, after the execution and delivery
of these presents, cause such changes to be made to the aforesaid plans and
specifications as it may desire and as will not result in any material change
in the appearance or basic design of the Plant or in changing the character of
the Plant as a part of a "project" under the provisions of the Authorizing Act.
Except as provided in the preceding sentence and in subsection (a) of Section
4.3 hereof, neither the Company nor the Issuer will cause or permit any changes
to be made to the aforesaid plans and specifications.
The Company will promptly pay or cause to be paid, as and when
due, all expenses incurred in and about said construction, acquisition and
installation and all other Project Development Costs, and it will not suffer or
permit any mechanics' or materialmen's liens that might be filed or otherwise
claimed or established upon or against the Project or any part thereof, and
which might be or become a lien thereon superior to the lien of the Mortgage,
to remain unsatisfied and undischarged for a period exceeding thirty (30) days
after the filing or establishment thereof; provided, however, that the Company
may in good faith contest any such mechanics' or materialmen's lien claims so
filed or established, and, in the event that such lien claims are so contested,
may permit the mechanics' or materialmen's liens so contested to remain
unsatisfied and undischarged during the period of such contest and any appeal
therefrom,
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irrespective of whether such period extends beyond the thirty (30) day period
after the filing or establishment of such liens, unless the Company shall have
furnished the facts relating to such lien contest to the Credit Obligor and the
Credit Obligor shall be of the opinion that by such action the lien of the
Mortgage to any part of the Project shall be materially endangered or that the
Project or any part thereof shall be subject to loss or forfeiture, in which
event such mechanics' or materialmen's liens shall (unless they are bonded or
superseded in a manner satisfactory to the Credit Obligor) be satisfied prior
to the expiration of said thirty (30) day period.
The Company and the Issuer will cooperate with each other in
order that the construction of the Improvements and the acquisition and
installation of the Equipment may be completed as promptly as practicable.
Upon the completion of the construction of the Improvements and the acquisition
and installation of the Equipment, the Company will execute such instruments of
conveyance as may be necessary to convey its interest in the Improvements and
the Equipment to the Issuer, subject to this Lease Agreement.
SECTION 4.2 AGREEMENT TO ISSUE THE BONDS. In order to provide
funds for the permanent financing of the costs of constructing the Improvement
and acquiring and installing the Equipment and the other Project Development
Costs, the Board will, simultaneously with the delivery hereof, issue and sell
the Bonds at a price approved by the Company.
SECTION 4.3 NO WARRANTY OF SUITABILITY BY ISSUER. COMPANY
REQUIRED TO BEAR CERTAIN COSTS IN CERTAIN EVENTS. The Company recognizes that
since the plans and specifications for the Improvements will be prepared to its
order and that since the items of Equipment have been and are to be selected by
it, the Issuer can make no warranty, either express or implied, or offer any
assurances that the Improvements or the Equipment will be suitable for the
Company's purposes or needs or that the proceeds derived from the sale of the
Bonds will be sufficient to pay in full all the Project Development Costs.
WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE ISSUER MAKES NO
WARRANTIES OF MERCHANTABILITY OR FITNESS WITH RESPECT TO ANY PART OF THE PLANT
OR THE EQUIPMENT. In the event said proceeds issued for such purpose are
insufficient to pay all said costs, the Company
(a) will cause such changes to be made to said plans and
specifications as will result in the Project Development Costs not
exceeding the moneys available for payment thereof derived from the sale
of the Bonds (provided that such changes will not result in any material
alteration in the appearance or basic design of the Plant or in altering
the character of the Plant as part of a "project" under the provisions
of the Authorizing Act), or
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(b) will directly pay that portion of the Project Development
Costs in excess of the available moneys derived from the sale of the
Bonds, or
(c) will pay into the Construction Fund such moneys as are
necessary to provide for payment of all said costs.
The Company shall not, by reason of any changes in said plans and
specifications or any payment of such excess costs (whether by virtue of direct
payments thereof or payments into the Construction Fund), be entitled to any
reimbursement from the Issuer or to any diminution of the rental payable
hereunder.
SECTION 4.4 COMPANY TO PURSUE RIGHTS AGAINST CONTRACTORS, ETC.
In the event of default by any contractor or subcontractor under any contract
with the Company for construction of the Improvements or acquisition or
installation of the Equipment, or any part of either, the Company will proceed,
either separately or in conjunction with others, to exhaust all remedies the
Company may have against such contractor or subcontractor so in default and
against each surety (if any) for the performance of such contract. The net
proceeds recovered by the Company in any such action shall be paid into the
Construction Fund (or, in the event that at the time such proceeds are received
by the Company the Construction Fund is closed shall be applied as excess
Construction Fund moneys in accordance with the provisions of Section 6.1 of
the Indenture).
ARTICLE V
DURATION OF TERM AND
RENTAL PROVISIONS
SECTION 5.1 DURATION OF TERM. The term of this Lease Agreement
and of the lease herein made shall begin on the date of the delivery of this
Lease Agreement and, subject to the provisions of this Lease Agreement, shall
continue until 11:59 o'clock, p.m., on April 1, 2007. The Board will deliver
to the Company sole and exclusive possession of the Project (or such portion or
portions thereof as are then in existence) on the commencement date of the
Lease Term, subject to the inspection and reserved in Section 3.3 hereof, and
the Company will accept possession thereof at such time.
SECTION 5.2 BASIC RENT. For and during the Lease Term, the
Company will pay to the Board the following base rental for use and occupancy
of the Project:
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(a) on or before the last Business Day of each month,
beginning in the month in which the Issue Date occurs, an amount equal
to the interest, if any, that will mature on the Bonds on the first
Business Day of the next succeeding month;
(b) on or before the last Business Day of March, 2007, an
amount equal to the principal amount of Bonds maturing on April 1, 2007;
and
(c) at or before 11:00 a.m. (Chicago, Illinois time) on each
Tender Date with respect to the Bonds, the Company shall pay to the
Trustee, for the account of the Board, an amount equal to the purchase
price of Bonds tendered (or deemed tendered) for purchase on such Tender
Date; provided, however, that any amount already on deposit in the Bond
Purchase Fund on such Tender Date that is available for the payment of
the purchase price of such Tendered Bonds shall be credited against the
amount of such Basic Rent;
provided, however, that there shall be credited against Basic Rent due under
this section (1) any amounts drawn by the Trustee under the Letter of Credit
and (2) income or profits received from the investment of money in the Debt
Service Fund.
The Company acknowledges that Basic Rent required by this Section
have been calculated to provide amounts which will be sufficient to pay debt
service on the Bonds as the same matures and comes due and to pay the purchase
price of Bonds tendered or deemed tendered on each Tender Date. If on any Bond
Payment Date the amount on deposit in the Debt Service Fund is not sufficient
to pay debt service on the Bonds due and payable on such date, the Company
shall immediately deposit the amount of such deficiency in the Debt Service
Fund. If on any Tender Date the amount on deposit in the Bond Purchase Fund is
not sufficient to pay the purchase price of Bonds tendered or deemed tendered
on such date, the Company shall immediately deposit the amount of such
deficiency in the Bond Purchase Fund.
So long as any of the Bonds are Outstanding, all Basic Rent
payments shall be made in Federal or other immediately available funds directly
to the Trustee, or its successor as Trustee under the Indenture at its
principal corporate trust office, for the account of the Board. The Board
will, promptly following the designation of any successor Trustee under the
Indenture, give written notice to the Company of the name and location of the
principal corporate trust office of such successor Trustee, or it will cause
such notice to be promptly given. In the event the due date of any installment
of Basic Rent payable hereunder is not a Business Day, such installment shall
be due on the next succeeding Business Day.
SECTION 5.3 ADDITIONAL RENT - FEES AND EXPENSES OF TRUSTEE AND
REMARKETING AGENT. In addition to the Basic Rent and all other rental payments
due from the Company hereunder, the Company will also pay, as additional rent,
(i) the annual fee of the Trustee for the ordinary services of the Trustee
rendered and its ordinary expenses incurred
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under the Indenture, (ii) the reasonable fees and charges of the Trustee as
registrar, transfer agent and paying agent or tender agent with respect to the
Bonds, as well as the fees and charges of any other paying agent with respect
to the Bonds who shall act as such agent in accordance with the provisions of
the Indenture, (iii) the reasonable fees and expenses of the Trustee in
connection with the issuance of a new Bond upon the partial redemption of a
Bond (including, without limitation, the expenses of printing such new Bond),
(iv) the reasonable fees and expenses of the Trustee in connection with any
other registration, transfer or exchange of any of the Bonds if the Trustee is
not permitted by the Indenture to charge the holder of such Bonds for such fees
and expenses, (v) the reasonable fees, charges and expenses of the Trustee for
necessary extraordinary services rendered by it and extraordinary expenses
incurred by it under the Indenture and (vi) the fees, charges and expenses of
the Remarketing Agent. All such fees, charges and expenses shall be paid
directly to the Trustee, for its own account upon presentation of its
statements therefor, but the Company may, without creating a default hereunder,
contest in good faith the necessity for any of the extraordinary services
performed by the Trustee or the reasonableness of the fees, charges or expenses
of the Trustee in connection therewith.
SECTION 5.4 ADDITIONAL RENT - BOARD'S EXPENSES. In addition to
the Basic Rent and all other rental payments due from the Company hereunder,
the Company will also pay, as additional rent, the reasonable and necessary
expenses, not otherwise provided for, which may be incurred by the Board, or
for which the Board may in any way become liable, as a result of issuing any of
the Bonds and leasing the Project to the Company, or being a party to this
Lease Agreement or the Indenture; provided, however, that so long as the
Company is not in default hereunder, the Company's liability under this Section
5.4 or under any other provision of this Lease Agreement obligating the Company
to pay expenses of the Board or the Trustee shall not include expenses
voluntarily incurred by the Board or the Trustee without prior request or
approval by the Company, unless such expenses are necessary to enable the Board
or the Trustee to perform its or their obligations under this Lease Agreement
and the Indenture; and provided further, that the Company may, without creating
a default hereunder, contest in good faith the necessity for or reasonableness
of any such expenses.
SECTION 5.5 OPTIONS TO PREPAY BASIC RENT. The Company shall
have and is hereby granted the option to prepay Basic Rent in an amount
sufficient to redeem the Bonds in whole or in part in accordance with Section
4.1(b), (c) or (d) of the Indenture, or to provide for the payment of the Bonds
in accordance with Article XIII of the Indenture. Such prepayment shall be
made on the date fixed for the redemption of such Bonds in accordance with
Section 5.7 hereof or on any date if made to provide for payment in accordance
with Article XIII of the Indenture.
SECTION 5.6 MANDATORY PREPAYMENT OF BASIC RENT IN THE EVENT OF
A DETERMINATION OF TAXABILITY. Upon the occurrence of a Determination of
Taxability, the Company shall be obligated to prepay Basic Rent on the date
fixed for the redemption of the Bonds pursuant to Section 5.7 hereof in an
amount sufficient to redeem the Bonds in whole in accordance with the
provisions of Section 4.1(a) of the Indenture.
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SECTION 5.7 NOTICE OF PREPAYMENT. To exercise an option
granted in Section 5.5 hereof or to fulfill the obligation required by Section
5.6 hereof, the Company shall give written notice to the Board and the Trustee
which shall specify therein the date upon which prepayment will be made, which
date shall be not less than forty-five days nor more than sixty days after the
date of such notice. Notice by the Company with respect to prepayment pursuant
to Section 5.6 hereof must be given within 10 days after the occurrence of a
Determination of Taxability. In connection with any redemption of Bonds
pursuant to Section 4.1(b), (c) or (d) of the Indenture, the said notice by the
Company shall specify the principal amount of Bonds to be redeemed by the
Trustee with the moneys paid to it by the Company.
SECTION 5.8 REDEMPTION OF BONDS WITH PREPAYMENT MONEYS. The
Board has directed the Trustee to forthwith take all steps (other than the
payment of the money required to redeem the Bonds) necessary under the
applicable provisions of the Indenture to effect the redemption of all or part
of the then Outstanding Bonds, as may be specified by the Company, on the
earliest redemption date permitted by the Indenture upon receipt by the Trustee
of requests for redemption in accordance with Article IV of the Indenture.
The Company agrees to and shall pay any amount required to be
paid by it under the provisions of Section 5.5 and 5.6 hereof directly to the
Trustee. The Trustee shall use the moneys so paid to it by the Company to
redeem the Bonds (if Bonds are to be redeemed as a result of such prepayment)
in accordance with the provisions of the Indenture.
SECTION 5.9 OBLIGATION OF COMPANY UNCONDITIONAL. The
obligation of the Company to pay the Basic Rent, to make all other payments
provided for herein and to perform and observe the other agreements and
covenants on its part herein contained shall be absolute and unconditional,
irrespective of any rights of set-off, recoupment or counterclaim it might
otherwise have against the Board or the Trustee. The Company will not suspend
or discontinue any such payment or fail to perform and observe any of its other
agreements and covenants contained herein or (except as expressly authorized in
this Lease Agreement) terminate this Lease Agreement for any cause, including,
without limiting the generality of the foregoing, any acts or circumstances
that may constitute an eviction or constructive eviction, failure of
consideration or commercial frustration of purpose, or any damage to or
destruction of the Project or any part thereof, or the taking by eminent domain
of title to or the right to temporary use of all or any part of the Project, or
any change in the tax or other laws of the United States of America, the State
of Alabama or any political or taxing subdivision of either thereof, or any
failure of the Board to perform and observe any agreement or covenant, whether
express or implied, or any duty, liability or obligation arising out of or
connected with this Lease Agreement.
The provisions of the preceding paragraph of this Section 5.9
shall continue in effect only so long as any part of the principal of or the
interest or premium (if any) on any of
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the Bonds remains unpaid. Nothing herein contained shall, however, be
construed to prevent the Company, at its own cost and expense and in its own
name or in the name of the Board, from prosecuting or defending any action or
proceeding or taking any other action involving third persons which the Company
deems reasonably necessary in order to secure or protect its rights of use and
occupancy and other rights hereunder, and the Board will cooperate fully with
the Company in any such action or proceeding.
Without limiting the generality of the foregoing, the Company
will pay directly to the Trustee on behalf of the Board, on the due dates of
the principal of and the interest, and premium, if any, on the Bonds, whether
at the stated maturity thereof, by acceleration, call for redemption or
otherwise, such amounts as may be necessary to provide for the payment in full
of the principal of and the interest and premium, if any, on the Bonds and such
other amounts as may be payable to the holders of the Bonds pursuant to the
provisions of this Lease Agreement and the Indenture.
ARTICLE VI
MAINTENANCE, TAXES AND INSURANCE
SECTION 6.1 MAINTENANCE, ADDITIONS, ALTERATIONS AND
IMPROVEMENTS. The Company will, at its own expense, (a) keep the Project in as
reasonably safe condition as its operations permit, and (b) subject to the
provisions of Section 6.2 hereof, keep the Plant, the Equipment and the other
improvements located on the Project Site in reasonable repair and operating
condition (reasonable wear and tear excepted), making from time to time all
necessary and proper renewals thereto (including, without limitation, exterior
and structural repairs, renewals and replacements). The Company may, also at
its own expense, make any additions, alterations or improvements to the Project
that it may deem desirable for its business purposes, that do not adversely
affect the structural integrity of any building or other structure forming a
part of the Project, and that will not impair the operating unity of the Plant,
or change the character of the Project as a "project" under the Authorizing
Act; provided that all such additions, alterations or improvements shall
(1) be located wholly within the boundary lines of the Project
Site, or
(2) be located wholly within the boundary lines of other
adjacent real property hereafter acquired by the Board, leased to the
Company by the Board, and subjected to the demise of these presents and
to the lien of the Indenture, or
(3) be located wholly within the boundary lines of the Project
Site and such other adjacent real property.
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Any such adjacent real property so leased shall henceforth be considered, for
purposes of this Lease Agreement, as part of the Project Site. All such
additions, alterations and improvements so made by the Company shall become a
part of the Project.
The Company will not permit any mechanics' or other liens to
stand against the Project for labor or materials furnished it in connection
with any additions, alterations, improvements, repairs or renewals so made by
it. The Company may, however, at its own expense and in good faith, contest
any such mechanics' liens or other liens and in the event of any such contest
may permit any such liens to remain unsatisfied and undischarged during the
period of such contest and any appeal therefrom unless by such action the lien
of the Indenture or the Mortgage to any part of the Project shall be endangered
or any part of the Project shall be subject to loss or forfeiture, in either of
which events such mechanics' or other liens (unless bonded or superseded in a
manner satisfactory to the Trustee) shall be promptly satisfied.
SECTION 6.2 REMOVAL OF EQUIPMENT. The Board and the Company
recognize that after the Equipment is installed in the Plant or on the Project
Site, portions thereof may become inadequate, obsolete, worn-out, unsuitable,
undesirable or unnecessary in the operation of the Plant, but the Company shall
not (any provision hereof to the contrary notwithstanding) be under any
obligation to renew, repair or replace any such inadequate, obsolete, worn-out,
unsuitable, undesirable or unnecessary Equipment. However, in any instance
where the Company in its sole discretion determines that any item of Equipment
has become inadequate, obsolete, worn-out, unsuitable, undesirable or
unnecessary in the operation of the Plant,
(a) the Company may, with the consent of the Credit Obligor,
remove such item of Equipment from the Plant or the Project Site and (on
behalf of the Board) sell, trade in, exchange or otherwise dispose of it
without any responsibility or accountability to the Board or the Trustee
therefor, provided that (i) the Company substitutes and installs in the
Plant or on the Project Site (either by direct payment of the costs
thereof or by advancing to the Board the funds necessary therefor, as
hereinafter provided) other machinery or equipment having equal or
greater utility (but not necessarily the same value or function) in the
operation of the Plant, which such substituted machinery or equipment
shall be free of all liens and encumbrances (other than Permitted
Encumbrances), shall be the sole property of the Board, shall be and
become a part of the Equipment subject to the demise hereof and to the
lien of the Indenture and shall be held by the Company on the same terms
and conditions as the items originally comprising the Equipment, and
(ii) such removal and substitution do not impair the operating unity of
the Plant; or
(b) the Company may, with the consent of the Credit Obligor,
remove such item of Equipment from the Plant or the Project Site and (on
behalf of the
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Board) sell, trade in, exchange or otherwise dispose of it, without any
responsibility or accountability to the Board or the Trustee therefor
and without being required to substitute and install in the Plant or on
the Project Site other equipment in substitution therefor, provided that
(i) in the case of the sale of such equipment to anyone other than
itself or any of its Affiliates, or in the case of the scrapping
thereof, the Company pays into the Debt Service Fund the proceeds from
such sale or the scrap value thereof, respectively, (ii) in the case of
the trade-in of such equipment for other property not to be installed in
the Plant or on the Project Site, the Company pays into the Debt Service
Fund an amount in cash equal to the credit received by it in such trade-
in, or (iii) in the case of the sale of such equipment to itself or any
of its Affiliates or in the case of any other disposition thereof, the
Company pays into the Debt Service Fund an amount equal to the original
cost thereof less depreciation at rates calculated in accordance with
generally accepted accounting practices; provided, however, that (1)
there may be credited on any payment that under the provisions of this
subsection (b) is due to be made into the Debt Service Fund by the
Company an amount not in excess of (A) the original cost of any other
equipment then installed in the Plant or on the Project Site that does
not then constitute part of the Equipment and is owned by the Company
and that is free from all liens and encumbrances (other than the lien of
the Indenture and Permitted Encumbrances), less (B) depreciation thereon
at rates calculated in accordance with generally accepted accounting
practices - all to the extent that such amount so credited has not
theretofore been credited on payments theretofore due to be made into
the Debt Service Fund pursuant to this subsection (b); and (2) from and
after any such credit, such other equipment shall be and become the sole
property of the Board and part of the Equipment subject to the demise
hereof and to the lien of the Indenture and shall be held by the Company
on the same terms and conditions as the items originally comprising the
Equipment.
If, at the time of the removal of any item of Equipment from the
Project Site, there is then installed in the Plant or on the Project Site other
equipment not then constituting part of the Equipment, and if such other
equipment has utility in the operation of the Project equal to or greater than
that of the item of Equipment to be removed and is free of all liens and
encumbrances (other than Permitted Encumbrances), and if no part of the cost of
such other equipment has been credited on a payment theretofore due to be made
into the Debt Service Fund pursuant to the provisions of subsection (b) of this
section, the preceding provisions of this section shall not be applicable, it
being understood and agreed, however, that from and after such removal such
other equipment shall be and become the sole property of the Board and part of
the Equipment subject to the demise hereof and to the lien of the Indenture and
shall be held by the Company on the same terms and conditions as the items
originally comprising the Equipment.
In furtherance of the preceding provisions of this section, the
Company will
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(1) pay to the Trustee such amounts as are required by the
provisions of the preceding subsection (b) to be paid by the Company
into the Debt Service Fund promptly after the sale, trade-in, exchange
or other disposition requiring such payment, provided that no such
payment need be made until the aggregate of such payments due but not
theretofore made is $500,000 or more;
(2) execute and deliver to the Board and the Trustee such
documents as the Trustee may reasonably from time to time require to
confirm the title of the Board (subject to Permitted Encumbrances) to,
and the lien of the Indenture with respect to, any items of machinery
and equipment that under the provisions of this section are to become a
part of the Equipment; and
(3) pay all reasonable costs (including reasonable counsel
fees) incurred in subjecting to the demise of this Lease Agreement and
the lien of the Indenture any items of machinery or equipment that under
the provisions of this section are to become a part of the Equipment.
The Company will not remove, or permit the removal of, any of the Equipment
from the Plant or the Project Site except in accordance with the provisions of
this Section 6.2.
The preceding provisions of this Section 6.2 shall apply only so
long as any part of the principal of or the interest or premium, if any, on any
of the Bonds remains unpaid. After full payment of the principal of and the
interest and premium, if any, on the Bonds, neither the Board nor the Company
shall be under any obligation to renew, repair or replace any of the Equipment
that may become inadequate, obsolete, worn out, unsuitable, undesirable or
unnecessary in the operation of the Project, and after such full payment the
Company may, if in its sole discretion any item of the Equipment has become
inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary in the
operation of the Plant, remove such item of Equipment from the Plant or the
Project Site and (on behalf of the Board) sell, trade in, exchange or otherwise
dispose of it, without any responsibility or accountability to the Board
therefor and without being required to substitute and install in the Plant or
on the Project Site other equipment in substitution therefor, and may retain
any money or other consideration received by it upon any disposition of any
such item of Equipment.
Nothing contained herein shall prohibit the Company, at any time
during which it is not in default hereunder, from removing from the Plant or
the Project Site any machinery or equipment that is owned by it or leased by it
from third parties and that does not constitute part of the Equipment, provided
(1) that such machinery or equipment may be removed without adversely affecting
the structural integrity of any building or other structure forming a part of
the Plant or causing any material damage to any such building or structure or
to the Project Site, or (2) that if such removal results in adversely affecting
the structural integrity of any such
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building or structure or in causing material damage to any such building or
structure or to the Project Site, the Company promptly thereafter takes such
action as is necessary to restore the structural integrity of such building or
structure or to repair such damage, as the case may be.
Except as otherwise provided in the preceding provisions of this
Section 6.2, nothing in this Lease Agreement or in the Indenture shall be
construed to grant to the Board or the Trustee any interest in any machinery or
equipment owned by the Company or leased by it from third parties or to impair
the right of the Company to locate such machinery or equipment in the Plant or
on the Project Site or to remove the same therefrom.
SECTION 6.3 TAXES, OTHER GOVERNMENTAL CHARGES AND UTILITY
CHARGES. The Company will pay, as the same respectively become due, (i) all
taxes and governmental charges of any kind whatsoever that may lawfully be
assessed or levied against or with respect to the Project or any machinery,
equipment or other property installed or brought by the Company therein or
thereon (including, without limiting the generality of the foregoing, any taxes
levied upon or with respect to any part of the receipts, income or profits of
the Board from the Project and any other taxes levied upon or with respect to
the Project which, if not paid, would become a lien on the Project prior to or
on a parity with the lien of the Indenture or the Mortgage or a charge on the
revenues and receipts therefrom prior to or on a parity with the charge thereon
and pledge and assignment thereof to be created and made in the Indenture),
(ii) all utility and other similar charges incurred in the operation,
maintenance, use, occupancy and upkeep of the Project, and (iii) all
assessments and charges lawfully made by any governmental body for public
improvements that may be secured by a lien on the Project; provided that with
respect to special assessments or other governmental charges that may lawfully
be paid in installments over a period of years, the Company shall be obligated
to pay only such installments as are required to be paid during the Lease Term.
The Company may, at its own expense and in its own name and
behalf or in the name and behalf of the Board, in good faith contest any such
taxes, assessments and other charges and, in the event of any such contest, may
permit the taxes, assessments or other charges so contested to remain unpaid
during the period of such contest and any appeal therefrom unless by such
action the title of the Board to any part of the Project shall be materially
endangered or the Project or any part thereof shall become subject to loss or
forfeiture, in which event such taxes, assessments or charges shall be paid
prior to their becoming delinquent. The Board will cooperate fully with the
Company in any such contest.
SECTION 6.4 INSURANCE REQUIRED. The Company will take out and
continuously maintain in effect insurance with respect to the Project against
such risks as are customarily insured against by businesses of like size and
type, paying as the same become due all premiums with respect thereto,
including, but not necessarily limited to,
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(a) Insurance against loss or damage to the Plant and the
Equipment by fire and lightning, with uniform standard extended coverage
endorsement limited only as may be provided in the standard form of
extended coverage endorsement at the time in use in Alabama, to the
extent of the full replacement value thereof; and
(b) Insurance against liability for bodily injury to or death
of persons and for damage to or loss of property occurring on or about
the Project Site or in any way related to the operation of the Plant, in
the minimum amounts of $1,000,000 for death of or bodily injury to any
one person, $3,000,000 for total death and bodily injury claims
resulting from any one accident, and $500,000 for property damage.
All policies evidencing the insurance required by the terms of
the preceding paragraph shall be taken out and maintained in generally
recognized responsible insurance companies, qualified under the laws of the
State of Alabama to assume the respective risks undertaken, shall contain an
agreement on the part of the insurer issuing such policy that the same shall
not be cancelled, terminated or permitted to lapse by such insurer unless ten
(10) days' prior written notice of such cancellation, termination or lapse in
coverage shall have been given to the Trustee and may be written with
deductible amounts comparable to those on similar policies carried by persons
engaged in businesses of the size and type of the Company. All such insurance
policies, other than those evidencing the insurance required by clause (b) of
the preceding paragraph and such other policies or portions thereof as may
evidence insurance against liability for injury to persons or property of
others, shall name as insureds the Board, the Trustee and the Company (as their
respective interests shall appear) and shall contain standard mortgage clauses
providing for all losses thereunder in excess of $500,000 to be paid to the
Trustee and all such losses not in excess of said sum to be paid to the
Company; provided that all losses (including those in excess of $500,000) may
be adjusted by the Company. All policies evidencing the insurance required to
be carried by this Section 6.4 shall be deposited with the Trustee; provided,
however, that in lieu thereof the Company may deposit with the Trustee a
certificate or certificates of the respective insurers attesting the fact that
such insurance is in force and effect. Prior to the expiration of any such
policy, the Company will furnish to the Trustee evidence reasonably
satisfactory to the Trustee that such policy has been renewed or replaced by
another policy or that there is no necessity therefor under this Lease
Agreement. Anything herein to the contrary notwithstanding, any insurance
required by the provisions hereof may be evidenced by a blanket policy covering
risks in addition to those hereby required to be covered, but only if
appropriate allocation certificates and loss payable endorsements are furnished
to the Board and the Trustee.
SECTION 6.5 ADVANCES BY BOARD OR TRUSTEE. In the event the
Company fails to take out or maintain the full insurance coverage required by
this Lease Agreement or fails to keep the Project in as reasonably safe
condition as its operating conditions permit and the Plant, the Equipment and
the other improvements located on the Project Site in reasonable repair and
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operating condition, the Board or the Trustee, after first notifying the
Company of any such failure on its part and after the subsequent failure by the
Company to take out or maintain such insurance or to take action reasonably
calculated to keep the Project in as reasonably safe condition as the Company's
operations permit and the Plant, the Equipment and the other improvements
located on the Project Site in reasonable repair and operating condition, may
(but shall not be obligated to) take out the required policies of insurance and
pay the premiums on the same or make such repairs, renewals and replacements as
may be necessary to maintain the Project in as reasonably safe condition as the
Company's operations permit and the Plant, the Equipment and the other
improvements located on the Project Site in reasonable repair and operating
condition, respectively; and all amounts so advanced therefor by the Board or
the Trustee shall become an additional obligation of the Company to the Board
or to the Trustee, as the case may be, which amounts, together with interest
thereon at the Base Rate (as defined in the Indenture) from the date thereof,
the Company will pay. Any remedy herein vested in the Board or the Trustee for
the collection of rental payments shall also be available to the Board and the
Trustee for the collection of all such amounts so advanced.
ARTICLE VII
PROVISIONS RESPECTING DAMAGE,
DESTRUCTION AND CONDEMNATION
SECTION 7.1 DAMAGE AND DESTRUCTION PROVISIONS. If the Project
is destroyed, in whole or in part, or is damaged, by fire or other casualty, to
such extent that the loss to the Project resulting therefrom is not greater
than $500,000, the Company, subject to the provisions of Section 7.6 hereof,
(a) will promptly repair, rebuild or restore the property damaged or destroyed
to substantially the same condition as prior to the event causing such damage
or destruction, with such changes, alterations and modifications as will not
impair the operating unity of the Plant or the character of the Project as a
"project" under the Authorizing Act, (b) will apply for such purpose so much as
may be necessary therefor of any insurance proceeds referable thereto, as well
as any other moneys required therefor, and (c) may, in the event the total
costs of such repair, rebuilding and restoration are less than the amount of
insurance proceeds referable thereto, retain the amount by which such proceeds
exceed said total costs.
If the Project is destroyed, in whole or in part, or is damaged,
by fire or other casualty, to such extent that the loss to the Project
resulting therefrom is in excess of $500,000, the Company will promptly so
notify the Trustee in writing, and the Net Insurance Proceeds shall be paid to
and held by the Trustee (or, if the Bonds have been fully paid, the Company),
whereupon, subject to the provisions of Section 7.6 hereof,
(i) the Company will proceed, as promptly as practicable under
the circumstances and under such terms, conditions and contracts as
shall be approved by the Company, to repair, rebuild or restore the
property damaged or
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destroyed to substantially the same condition as prior to the event
causing such damage or destruction, with such changes, alterations and
modifications as shall be specified by the Company and as will not
impair the operating unity of the Plant or the character of the Project
as a "project" under the Authorizing Act, and
(ii) the Trustee (or, if the Bonds have been fully paid, the
Company) will apply the Net Insurance Proceeds to payment of the costs
of such repair, rebuilding or restoration, either on completion thereof
or as the work progresses, as may be provided in the contracts
pertaining thereto.
Any balance of the Net Insurance Proceeds remaining after payment of all the
costs of such repair, rebuilding or restoration shall be paid to the Company.
In the event said proceeds are not sufficient to pay in full the costs of such
repair, rebuilding or restoration, the Company (1) will nonetheless complete
the work thereof and will pay that portion of the costs thereof in excess of
the amount of the Net Insurance Proceeds available therefor. The Company shall
not, by reason of the payment of such excess costs be entitled to any
reimbursement from the Board or to any abatement or diminution of the rental
provided for herein.
SECTION 7.2 CONDEMNATION PROVISIONS. If the Project or any
part thereof is taken under the exercise of the power of eminent domain by any
governmental authority or person, firm or corporation acting under governmental
authority, the entire condemnation award (if any) referable to the Project,
including any that may be recoverable by the Company, shall be paid to the
Trustee (or, if the Bonds have been fully paid, to the Board) and applied as
hereinafter provided:
(a) If no part of the Plant is taken or damaged and if in the
Company's opinion the efficient utilization of the Project is not
impaired by such taking, the Net Condemnation Award referable thereto
shall be paid to the Company.
(b) If any part of the Plant is taken or damaged or if in the
Company's opinion the efficient utilization of the Project is impaired
by such taking, the Company will, subject to the provisions of Section
7.6 hereof, proceed, as promptly as practicable under the circumstances
and upon such terms as shall be approved in writing by the Company, to
repair, replace, rebuild or restore the Plant or to rearrange the Plant
facilities so as to make the Project suitable for the Company's uses,
and the Trustee (or, if the Bonds have been fully paid, the Company)
will apply the Net Condemnation Award referable to such taking to
payment of the costs of such replacement, repair, rebuilding,
restoration or rearrangement. If the Net Condemnation Award is in
excess of the costs of such replacement, repair, rebuilding, restoration
or rearrangement, the excess shall be paid to the Company. If the Net
Condemnation Award is not sufficient to pay all
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the costs of such repair, rebuilding, restoration or rearrangement, the
Company will pay the deficiency, provided that it shall not by reason of
the payment of any such deficiency be entitled to any reimbursement from
the Board or to any abatement or diminution of the rental provided for
herein.
The Board will cooperate fully with the Company in the handling
and conduct of any prospective or pending condemnation proceeding with respect
to the Project or any part thereof and will follow all reasonable directions
given to it by the Company in connection with such proceeding. The Company
shall have full and complete control of such proceedings, including (without
limitations) the right to select Counsel for the Board. In no event will the
Board settle, or consent to the settlement of, any prospective or pending
condemnation proceeding with respect to the Project or any part thereof without
the prior written consent of the Company.
SECTION 7.3 CONDEMNATION OF RIGHT TO USE OF PROJECT FOR LIMITED
PERIOD. If the use, for a limited period, of all or part of the Project is
taken by any such eminent domain proceeding, this Lease Agreement (including,
without limitation, the provisions hereof relating to the payment of Basic
Rent) shall continue in full force and effect, but with the consequences
specified in the remaining provisions of this Section 7.3. If the period of
such taking expires on or before the expiration of the Lease Term, the Company
shall be entitled to receive the entire condemnation award made therefor,
whether by way of damages, rent or otherwise, and shall upon being restored to
possession restore the Project as nearly as practicable to the condition
existing immediately prior to such taking, with such changes, alterations and
modifications as will not impair the operating unity of the Project or its
character as a "project" under the Authorizing Act. If such taking occurs
during the Lease Term but the period of such taking expires after the
expiration of the Lease Term, the Company shall be entitled to receive the
entire award.
SECTION 7.4 CONDEMNATION OF COMPANY-OWNED PROPERTY. The
Company shall be entitled to any condemnation award or portion thereof made for
damages to or takings of its own property, as well as all other sums awarded as
compensation for the interest of the Company in the part of the Project taken
and as damages to the interest of the Company in any part thereof not taken,
but there shall be deducted therefrom, or paid directly by the Company, all
attorneys' fees and other expenses incurred in connection with the receipt of
such award or sum or portion thereof.
SECTION 7.5 PROVISIONS RELATING TO THE INCURRING OF CERTAIN
EXPENSES AFTER BONDS PAID. The Board will not, at any time after full payment
of the Bonds, incur any expenses in connection with the collection of any
insurance proceeds or condemnation award with respect to the Project, or any
part thereof, without the prior written consent of the Company.
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SECTION 7.6 OPTIONAL APPLICATION OF NET INSURANCE PROCEEDS OR
NET CONDEMNATION AWARD. The provisions of Sections 7.1 and 7.2 hereof to the
contrary notwithstanding, the Company may, within sixty (60) days following the
event giving rise to the receipt of any Net Insurance Proceeds or Net
Condemnation Award, as the case may be, (a) elect by written notice to the
Board and the Trustee, to have such proceeds or award, as the case may be,
applied to the redemption of Bonds, in which event the entire Net Insurance
Proceeds or Net Condemnation Award, as the case may be, shall be deposited in
the Debt Service Fund and applied to such redemption on the earliest
practicable redemption date thereafter, or (b) if none of the Bonds is
Outstanding, elect, by written notice to the Board, to have such proceeds or
award, as the case may be, returned to the Company. If either of such options
is elected by the Company, there shall be no obligation on the part of the
Company to cause the Project to be repaired, rebuilt or reconstituted.
ARTICLE VIII
PARTICULAR COVENANTS OF THE COMPANY
SECTION 8.1 GENERAL COVENANTS. The Company will not do or
permit anything to be done on or about the Project that will affect, impair or
contravene any policies of insurance that may be carried on the Project or any
part thereof against loss or damage by fire, casualty or otherwise. The
Company will, in the use of the Project Site, the Plant, the Equipment and the
public ways abutting the Project Site, comply with all applicable lawful
requirements of all governmental bodies; provided, however, that the Company
may contest to the extent it deems advisable the necessity of its compliance
with any such requirements unless by such action the lien of the Indenture on
any part of the Project shall be subject to loss or forfeiture.
SECTION 8.2 RELEASE AND INDEMNIFICATION COVENANTS. The Company
releases the Board, each director, officer, employee and agent thereof, the
Trustee and the holders of the Bonds from, and will indemnify and hold the
Board, each director, officer, employee and agent thereof, the Trustee and the
holders of the Bonds harmless against, any and all claims, liabilities or
losses of any character or nature whatsoever asserted by or on behalf of any
persons, firm, corporation or governmental authority arising out of, resulting
from, or in any way connected with, the Project, including, without limiting
the generality of the foregoing:
(a) any destruction of or damage to property or any injury to
or death of any person or persons caused by or related to the Project;
(b) any actions taken by the Board at the request or
suggestion of the Company or any person acting for the Company
(including its officers, employees and counsel, as well as bond counsel
involved at the request of the Company in the issuance of the Bonds) in
connection with the offering or sale of the Bonds; and
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(c) any amounts assessed by governmental authorities or
damages incurred by private parties on account of the failure of the
Company to comply with environmental, employment or products liability
laws or standards.
provided, however, that the Company shall not be obligated to indemnify the
Board, any director, officer, employee or agent thereof, the Trustee or the
holders of the Bonds against any claim, liability or loss resulting from
willful misconduct or gross negligence on the part of the Board, such director,
officer, employee or agent, the Trustee or the holders of the Bonds; and
provided, further, that no agent of the Board designated by the Company shall
have any rights as an indemnifiable party pursuant to the provisions of this
section. If any indemnifiable party (whether the Board, any of its directors,
officers, employees or agents, the Trustee or the holders of the Bonds) shall
be obligated to pay any claim, liability or loss, and if in accordance with all
applicable provisions of this section the Company shall have a primary
obligation to pay such claim, liability or loss on behalf of such indemnifiable
party and may not defer discharge of its indemnity obligation hereunder until
such indemnifiable party shall have first paid such claim, liability or loss
and thereby incurred actual loss. The Company will also pay or reimburse all
legal or other expenses reasonably incurred by any indemnifiable party in
connection with the investigation or defense or any action or proceeding,
whether or not resulting in liability, with respect to any claim, liability or
loss in respect of which indemnity may be sought against the Company under the
provisions of this section.
In the event that any action or proceeding is brought against any
indemnifiable party (whether the Board, any of its directors, officers,
employees or agents, the Trustee or the holders of the Bonds) in respect of
which indemnity may be sought against the Company under the provisions of this
section, such indemnifiable party shall, as a condition of the Company's
liability under the provisions of this section give written notice to the
Company of such action or proceeding within a reasonable time following the
commencement thereof and shall thereafter forward to the Company a copy of
every summons, complaint, pleading, motion or other process received with
respect to such action or proceeding. The Company may (and if so requested by
such indemnifiable party, shall) at any time assume the defense of such
indemnifiable party in connection with any such action or proceeding, and in
such case the Company shall pay all expenses of such defense and shall have
full and complete control of the conduct on the part of such party of any such
action or proceeding, subject, however, to the other provisions of this
section. In any action or proceeding where the Company assumes the defense of
any indemnifiable party, the Company shall have the right to select counsel for
such party; provided that such party may in its discretion employ its own
counsel if it deems such action to be necessary, in which case the Company
shall pay the fees and expenses of such other counsel in addition to the fees
and expenses of such counsel selected by the Company.
The Company shall not be obligated to indemnify and hold harmless
any indemnifiable party for any claim, liability or loss if such indemnifiable
party has agreed to a settlement of such claim, liability or loss without the
Company's consent, irrespective of whether the Company had, prior to such
settlement, exercised its right to assume the defense of such
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indemnifiable party in connection with any such action or proceeding; provided,
however, that in the event an indemnifiable party desires to settle a claim in
response to a bona fide offer of settlement, if the Company is unwilling to
settle the claim in accordance with the terms of such offer, then, in that
event, the Company may withhold its consent to the settlement only if it
establishes an escrow fund with an escrow agent acceptable to such
indemnifiable party in a principal amount equal to the difference between the
claimed amount for which the indemnifiable party is potentially liable and the
amount of the settlement offer. Such escrow may consist of cash, direct
obligations of the United States Government or obligations which are
unconditionally guaranteed by the United States Government, bank certificates
of deposit, bank letters of credit or any other security acceptable to such
indemnifiable party. Any interest earned on the funds held in such escrow
shall accrue to the benefit of the Company and shall be paid over to the
Company as earned. Subject to the preceding provisions of this paragraph, the
Company shall have the right to settle or compromise any claim, liability or
loss for which it shall be liable under the provisions of this section upon
such terms and conditions as it shall determine in the exercise of its sole
discretion.
SECTION 8.3 INSPECTION OF PROJECT. The Company will permit the
Board, the Trustee and their duly authorized agents at all reasonable times to
enter upon, examine and inspect the Project.
SECTION 8.4 AGREEMENT TO MAINTAIN CORPORATE EXISTENCE. The
Company will maintain its corporate existence, will not dissolve or otherwise
dispose of all or substantially all its assets (either in a single transaction
or in a series of related transactions) and will not consolidate with or merge
into another corporation or permit one or more corporations to consolidate with
or merge into it; provided that the Company may, without violating the
agreements contained in this section, do or perform any of the following:
(a) It may consolidate with or merge into another corporation,
or permit one or more corporations to consolidate with or merge into it
if the corporation surviving such merger or resulting from such
consolidation, if it shall be one other than the Company, expressly
assumes in writing all the obligations of the Company contained in this
Lease Agreement; and
(b) It may transfer to another corporation all or
substantially all its assets as an entirety, and (if it so elects)
thereafter dissolve, if the corporation to which such transfer shall be
made expressly assumes in writing all the obligations of the Company
contained in this Lease Agreement.
The Company will, promptly following any merger, consolidation or transfer
permitted under the provisions of this Section 8.4, furnish to the Board and
the Trustee fully executed or appropriately certified copies of the writing by
which the Company's successor or transferee
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corporation expressly assumes the obligations of the Company contained in this
Lease Agreement.
If, after a transfer by the Company of all or substantially all
its assets to another United States Corporation under the circumstances
described in the preceding clause (b) of this section, the Company does not
thereafter dissolve, it shall not have any further rights or obligations
hereunder.
SECTION 8.5 QUALIFICATION IN ALABAMA. The Company warrants and
represents that it is now duly qualified to do business as a foreign
corporation in Alabama and will continuously remain so qualified during the
term of the Lease Agreement. If, in accordance with the permissive provisions
of Section 8.4 hereof, the Company should merge into a corporation not
organized and existing under the laws of Alabama, should consolidate with one
or more corporations not organized and existing under the laws of Alabama or
should transfer all or substantially all its assets to a corporation not
organized under the laws of Alabama, it will cause the corporation into which
it merged, the corporation resulting from such consolidation or the corporation
to which all or substantially all its assets were transferred, as the case may
be, to qualify to do business in Alabama as a foreign corporation and to remain
so qualified at all times during the remainder of the Lease Term.
SECTION 8.6 FURTHER ASSURANCES. The Company will, at its own
cost and expense, take all actions that may at the time and from time to time
be necessary to perfect, preserve, protect and secure the interests of the
Board and the Trustee, or either, in and to the Project, including, without
limitation, the filing of all financing and continuation statements that may at
the time be required under the Alabama Uniform Commercial Code to maintain the
perfection and priority of the security interests created under this Lease
Agreement and the Indenture. The Company further agrees, without in any
limiting the generality of foregoing, to take any and all such actions that in
the judgment of the Board or the Trustee are necessary for the perfection,
preservation, protection and securing of such interests.
SECTION 8.7 CONCERNING THE TAX-EXEMPT NATURE OF THE INTEREST
INCOME ON THE BONDS. (a) The Company will file, or will cause to be filed,
with the Internal Revenue Service all statements and reports, if any, required
by the Code or rules or regulations issued thereunder, to be so filed as a
condition to continue qualification of the Bonds as a small issue the interest
income on which is not includable in gross income of the recipients thereof for
Federal income tax purposes.
(b) The Company shall at all times do and perform all acts and
things permitted by law and necessary or desirable in order to assure that
interest paid on the Bonds shall, for purposes of Federal income taxation, be
excludable from the gross income of the holders of the Bonds, except in the
event, and for the period, that any such holder is a
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"substantial user" of the Project or a "related person" (within the meaning of
Section 147(a) of the Code), and any and all actions of any owner or principal
user of the Project or any related person (within the meaning of Section
144(a)(3) of the Code) to any such owner or principal user shall be deemed to
be actions of the Company. In addition, any and all actions to be undertaken
by the Company or by any other person as to which the Board or the Trustee
must, pursuant to the terms hereto, consent or approve in advance shall be
deemed to be the actions of the Company or such other person (and not the
actions of the Board or the Trustee).
(c) The Company shall deliver written notice to the Trustee of
the occurrence of a Determination of Taxability immediately upon having
knowledge thereof.
(d) The Company shall not permit at any time or times any of
the proceeds of the Bonds or any other funds to be used, directly or
indirectly, to acquire any asset or obligation the acquisition of which would
cause the Bonds to be "arbitrage bonds" for the purposes of Section 148 of the
Code and shall remit to the United States in a timely manner all amounts due as
rebate and otherwise take any action or omit to take any action that would
cause the Bonds to be "arbitrage bonds" because of Section 148 of the Code.
The Company shall utilize the proceeds from the sale of the Bonds so as to
satisfy the reasonable expectations of the Company and the Board set forth in
the Federal Tax Certificate of the Company delivered as of the Issue Date.
(e) The Company shall not permit the Project to be used or
occupied in any manner for compensation by the United States or an agency or
instrumentality thereof, including any entity with statutory authority to
borrow from the United States (in any case within the meaning of Section 149(b)
of the Code) or pledge additional security for the repayment of the Bonds
except for tangible property or securities the payment of which is not provided
or guaranteed, in whole or in part, by the Federal Government or any agency or
instrumentality thereof, unless the Company shall deliver to the Trustee an
opinion of Bond Counsel in form and substance satisfactory to the Trustee to
the effect that such use will not impair the exclusion of the interest income
on the Bonds from Federal income taxation.
ARTICLE IX
CERTAIN PROVISIONS RELATING
TO ASSIGNMENT, SUBLEASING AND TO THE BONDS
SECTION 9.1 PROVISIONS RELATING TO ASSIGNMENT AND SUBLEASING BY
COMPANY. The Company may assign this Lease Agreement and the leasehold
interest created hereby, and may sublet the Project or any part thereof,
without the necessity of obtaining the consent of either the Board or the
Trustee; provided however, that no assignee or sublessee or anyone claiming by,
through or under any such assignment or sublease shall by virtue thereof
acquire
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any greater rights in the Project or in any part thereof than the Company then
has under this Lease Agreement, nor shall any such assignment or subleasing or
any dealings or transactions between the Board or the Trustee or any sublessee
or assignee in any way relieve the Company from primary liability for any of
its obligations hereunder. Thus, in the event of any such assignment or
subleasing, the Company shall remain primarily liable for payment of the
rentals herein provided to be paid by it and for performance and observance of
the other agreements and covenants on its part herein provided to be performed
and observed by it.
SECTION 9.2 ASSIGNMENT OF LEASE BY BOARD; REQUIRED CONSENTS TO
AMENDMENTS. It is understood and agreed that in the Indenture the Board will
assign its interest in and pledge any moneys receivable under this Lease
Agreement to the Trustee as security for payment of the principal of and the
interest and premium, if any, on the Bonds. It is further understood and
agreed that the Board will in the Indenture obligate itself to follow the
instructions of the Trustee or the holders of the Bonds or a certain percentage
thereof in the election or pursuit of any remedies herein vested in it. Upon
the assignment and pledge to the Trustee of the Board's interest in this Lease
Agreement, the Trustee shall have all rights and remedies herein accorded the
Board and any reference herein to the Board shall be deemed, with the necessary
changes in detail, to include the Trustee, and the Trustee and the holders of
the Bonds shall be deemed to be third party beneficiaries of the covenants and
agreements on the part of the Company herein contained. Subsequent to the
issuance of the Bonds and prior to their payment in full, the Board and the
Company shall have no power to modify, alter, amend or (except as specifically
authorized herein) terminate this Lease Agreement without the prior written
consent of the Trustee and then only as provided in the Indenture. The Board
will not, so long as the Company is not in default hereunder, amend the
Indenture or any indenture supplemental thereto, and will not exercise any
right voluntarily to redeem the Bonds, without the prior written consent of the
Company.
Without the prior written consent of the Company and the Credit
Obligor, the Board will not, at any time while the Company is not in default
hereunder, hereafter issue any bonds or other securities other than the Bonds,
that are payable out of or secured by a pledge of the revenues and receipts
derived by the Board from the leasing or sale of the Project, nor, without such
consent, will the Board, at any time while the Company is not in default
hereunder, hereafter place any mortgage or other encumbrance (other than the
Indenture and supplemental indentures contemplated thereby) on the Project or
any part thereof.
SECTION 9.3 REFERENCES TO BONDS INEFFECTIVE AFTER BONDS PAID.
Upon full payment of the Bonds, all references in this Lease Agreement to the
Bonds and the Trustee shall be ineffective and neither the Trustee nor the
holders of any of the Bonds shall thereafter have any rights hereunder. For
purposes of this Lease Agreement, any of the Bonds shall be deemed fully paid
if there exists, with respect thereto, the applicable conditions specified in
Article XIII of the Indenture.
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In the event the Bonds are fully paid prior to the final maturity
thereof, the Company shall be entitled to use and occupancy of the Project from
the date of such payment until 11:59 o'clock, p.m., on April 1, 2007, without
the payment of any further Basic Rent but otherwise on all the same terms and
conditions hereof. If after full payment of the Bonds, any moneys then remain
in any of the special funds created in the Indenture, the Board (a) will cause
the Trustee to pay all such moneys to the Company, and (b) hereby assigns all
such moneys to the Company.
ARTICLE X
EVENTS OF DEFAULT AND REMEDIES
SECTION 10.1 EVENTS OF DEFAULT DEFINED. The following shall be
"events of default" under this Lease Agreement, and the terms "event of
default" or "default" shall mean, whenever they are used in this Lease
Agreement, any one or more of the following events:
(a) Failure by the Company to pay, when due and payable, the
Basic Rent hereinabove provided;
(b) Failure by the Company to perform or observe any of its
other agreements or covenants contained in this Lease Agreement, which
failure shall have continued for a period of sixty (60) days after
written notice specifying, in reasonable detail, the nature of such
failure and requiring the Company to perform or observe the agreement or
covenant with respect to which it is delinquent shall have been given to
the Company by the Board or the Trustee, unless (i) the Board and the
Trustee shall agree in writing to an extension of such period prior to
its expiration, or (ii) during such sixty (60) day period or any
extension thereof, the Company has commenced and is diligently pursuing
appropriate corrective action, or (iii) the Company is by reason of
force majeure at the time prevented from performing or observing the
agreement or covenant with respect to which it is delinquent;
(c) The dissolution or liquidation of the Company or the
filing by the Company of a voluntary petition in bankruptcy, or its
failure to lift, within ninety (90) days, any execution, garnishment or
attachment of a size as seriously to impair its ability to carry on its
operations, the commission by it of any act of bankruptcy or its
adjudication as a bankrupt, an assignment by it for the benefit of
creditors, the entry by it into an agreement of composition with its
creditors or the approval by a court of competent jurisdiction as having
been filed in good faith of a petition applicable to it in any
proceeding for its reorganization instituted under the provisions of the
general bankruptcy act, as amended, or
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under any similar act that may hereafter be enacted; provided that the
term "dissolution or liquidation of the Company," as used in this
subsection (c) shall not be construed to include the termination of the
existence of the Company resulting from a merger into or a consolidation
with another corporation or the dissolution of the Company following a
transfer of all or substantially all its assets to another corporation,
under the conditions contained in Section 8.4 hereof and permitting such
actions;
(d) Any warranty, representation or other statement by or on
behalf of the Company contained in the Lease or the Guaranty or in any
instrument or certificate furnished in compliance with or reference to
the Lease shall have been false or misleading in any material respect
when made;
(e) Receipt by the Trustee of notice from the Credit Obligor
that an event of default has occurred under the Credit Agreement; or
(f) An event of default under the Indenture.
The term "force majeure" as used in subsection (b) of this section means acts
of God or the public enemy, strikes, labor disputes, lockouts, work slowdowns
or stoppages or other industrial disturbances, insurrections, riots or other
civil disturbances, orders of the United States of America, the State of
Alabama or any department, agency or political subdivision of either thereof,
or of other civil or military authority, or partial or entire failure of public
utilities.
SECTION 10.2 REMEDIES ON DEFAULT. Whenever any such event of
default shall have happened and be continuing, the Board and the Trustee (or
the Trustee on behalf of the Board) may take any one or more of the following
remedial steps:
(a) They or it may re-enter and take possession of the
Project, exclude the Company from possession thereof and lease the same
for the account of the Company, holding the Company liable for the rent
and other payments due hereunder up to the effective date of such
leasing and for the excess, if any, of the rent and other amounts
payable hereunder over the rents and other amounts which are payable by
the lessee under such new lease;
(b) They or it may terminate this Lease Agreement, exclude the
Company from possession of the Project and hold the Company liable for
the balance due hereunder, in which event the rights of the Company in
the Project and the use and possession thereof shall terminate;
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(c) They or it may declare immediately due and payable all
installments of rent thereafter coming due hereunder, provided, however,
that the total amount of such rent that may be so declared immediately
due and payable pursuant to subparagraphs (a) and (b) of Section 5.2
hereof shall be an amount which, when added to the total of the amounts
then on deposit in the Debt Service Fund and the Construction Fund, will
be sufficient to pay, redeem and retire all the outstanding Bonds on the
earliest practicable date thereafter on which, under their terms, they
may be redeemed, including, without limitation, principal, premium,
interest to mature until and on such date, expenses of redemption and
Trustee's fees and charges;
(d) They or it may have access to, and inspect, examine and
make copies of, the books, records and accounts of the Company, but if
and only if any of the Bonds are then outstanding; and
(e) They or it may take whatever other action at law or in
equity may appear necessary or desirable to collect the rent then due,
or to enforce any obligation, covenant or agreement of the Company under
this Lease Agreement.
SECTION 10.3 NO REMEDY EXCLUSIVE. No remedy herein conferred
upon or reserved to the Board or the Trustee is intended to be exclusive of any
other available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given under this
Lease Agreement or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any default
shall impair any such right or power or shall be construed to be a waiver
thereof but any such right or power may be exercised from time to time and as
often as may be deemed expedient. In order to entitle the Board or the Trustee
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 is herein expressly
required.
SECTION 10.4 AGREEMENT TO PAY ATTORNEYS' FEES. In the event
that, as a result of a default or a threatened default by the Company
hereunder, the Board or the Trustee should employ attorneys at law or incur
other expenses in or about the collection of rent or the enforcement of any
other obligation, covenant, agreement, term or condition of this Lease
Agreement, the Company will, if the Board or the Trustee are successful in such
efforts or if a final judgment for either is rendered by a court of competent
jurisdiction, pay to the Board or to the Trustee, as the case may be,
reasonable attorneys' fees and other expenses so incurred by the Board or the
Trustee.
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SECTION 10.5 NO ADDITIONAL WAIVER IMPLIED BY ONE WAIVER. In the
event any agreement contained in this Lease Agreement should be breached by
either party and thereafter waived by the other party, such waiver shall be
limited to the particular breach so waived and shall not be deemed to waive any
other breach hereunder. Further, neither the receipt nor the acceptance of
rental hereunder by the Board, or by the Trustee on its behalf, shall be deemed
to be a waiver of any breach of any covenant or condition herein contained even
though at the time of such receipt or acceptance there has been a breach of one
or more covenants or conditions on the part of the Company herein contained and
the Board or the Trustee (or both) have knowledge thereof.
ARTICLE XI
OPTIONS
SECTION 11.1 OPTION TO PURCHASE AFTER PAYMENT OF BONDS. If the
Company pays the rental herein reserved to the Board or if provision is made
for payment of the Bonds in accordance with the provisions of Article XIII of
the Indenture, it shall have the right and option, herein granted by the Board,
to purchase the Project from the Board at any time during the Lease Term after
or simultaneously with payment (or provision for payment in accordance with
said section) in full of the principal of and the interest and premium (if any)
on the Bonds and all reasonable fees, charges and disbursements of the Trustee,
accrued and to accrue until the date of such full payment, at and for a
purchase price of $100 plus the reasonable costs and expenses (including
reasonable attorneys' fees) incurred by the Board in connection with the
Company's exercise of such option. To exercise any such purchase option, the
Company shall notify the Board in writing not less than thirty (30) days prior
to the date on which it proposes to effect such purchase and, on the date of
such purchase, shall pay the aforesaid purchase price to the Board in cash or
bankable funds, whereupon the Board will, by bills of sale and statutory
warranty deed or other appropriate instruments, transfer and convey the Project
(in its then condition, whatever that may be) to the Company, subject only to
such liens, encumbrances and exceptions to which title thereto was subject when
this Lease Agreement was delivered, those to the creation or suffering of which
the Company consented (except for this Lease Agreement and the Indenture) and
those resulting from the failure of the Company to perform or observe any of
the agreements or covenants on its part herein contained. Nothing herein
contained shall be construed to give the Company any right to any rebate to or
refund of any rental paid by it hereunder prior to the exercise by it of the
purchase option hereinabove granted, even though such rental may have been
wholly or partially prepaid.
SECTION 11.2 OPTION TO TERMINATE. The Company shall have the
right to terminate this Lease Agreement at any time after payment in full of
the principal of and interest and premium (if any) on the Bonds upon giving to
the Board notice in writing not less than five (5) days prior to the day of
termination.
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SECTION 11.3 OPTION TO PURCHASE PORTIONS OF PROJECT SITE. The
Company shall have, and is hereby granted, subject to the conditions
hereinafter specified, the option to purchase from the Board any part of the
Project Site at any time and from time to time while it is not in default
hereunder, provided that the Company furnishes to the Board and the Trustee
(a) A notice in writing containing (i) an adequate legal
description of that portion of the Project Site with respect to which
such option is to be exercised, (ii) a statement that the Company
intends to exercise its option to purchase such portion of the Project
Site on a date stated, which shall not be less than thirty (30) nor more
than ninety (90) days from the date of such notice, and (iii) a
statement that the use to which the Company proposes to devote such
portion of the Project Site will promote the continued industrial
development of the State of Alabama; and
(b) A certificate signed by an Independent Engineer stating
(i) that no part of the Plant or the Equipment, no other improvement
(except for roads, walkways, sewer, water, oil, coal oil, gas, electric
and communication lines, pipe lines and other energy source conveyors
and the like, which shall be specified in such certificate) and no
facility designed for the control of air or water pollution or for the
disposal of solid wastes and necessary in the operation of the Plant are
located on the portion of the Project Site with respect to which such
option is exercised, and (ii) that the severance of such portion of the
Project Site from the Project will not impair the operating unity of the
Plant or unduly restrict ingress or egress to or from the Plant.
Upon the receipt by the Board and the Trustee of a notice and certificate
complying with the provisions of the preceding clauses (a) and (b),
respectively, the Board will, without the payment to it of any additional
monetary consideration, execute and deliver to the Company a statutory warranty
deed conveying to the Company that portion of the Project Site with respect to
which such option was exercised, subject only to such liens, encumbrances and
exceptions to which title thereto was subject when this Lease Agreement was
delivered, those to the creation or suffering of which the Company consented
(except for this Lease Agreement and the Indenture) and those resulting from
the failure of the Company to perform or observe any of the agreements or
covenants on its part herein contained.
From and after the consummation of any purchase effected by the
Company pursuant to the provisions of this section, any reference herein to the
Project Site shall be deemed to refer to the real property that immediately
prior thereto constituted the Project Site, less and except that part so
purchased by the Company under the provisions of this section. No purchase
effected by the Company under the provisions of this section shall entitle the
Company to any abatement or diminution of the rental payable hereunder.
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ARTICLE XII
MISCELLANEOUS
SECTION 12.1 COVENANT OF QUIET ENJOYMENT. SURRENDER OF PROJECT.
So long as the Company performs and observes all the covenants and agreements
on its part herein contained, it shall peaceably and quietly have, hold and
enjoy the Project during the Lease Term of this Lease Agreement subject to all
the terms and provisions hereof. At the end of the Lease Term, as the case may
be, of this Lease Agreement, or upon any prior termination of this Lease
Agreement, the Company will (unless it has simultaneously purchased the Project
from the Board) surrender possession of the Project peaceably and promptly to
the Board in as good condition as at the commencement of the Lease Term,
excepting only (a) loss by fire or other casualty, (b) alterations, changes or
improvements made in accordance with the provisions of this Lease Agreement,
(c) acts of governmental or condemning authorities, and (d) ordinary wear and
tear.
SECTION 12.2 RETENTION OF TITLE TO PROJECT BY BOARD. GRANT OF
UTILITY EASEMENTS. CONNECTING UTILITIES. Without the prior written consent of
the Company, the Board will not itself, at any time during which the Company is
not in default hereunder, (a) except as provided in Section 8.5 of the
Indenture, sell, convey or otherwise dispose of all or any part of the Project
(except to the Company as hereinabove provided), (b) except as provided in
Section 9.2 hereof, mortgage or otherwise encumber the Project or any part
thereof, or (c) except as provided in Section 8.5 of the Indenture, dissolve or
do anything that will result in the termination of its corporate existence.
The Board will, however, grant such utility, access and other similar easements
over, across or under the Project Site as shall be requested by the Company and
as in the judgment of the Company are necessary or convenient for the efficient
operation of the Project. The Company may, at its own expense and without any
consent of the Board or the Trustee, connect or "tie in" utility or other
similar facilities serving the Project to utility or other similar facilities
serving real property adjacent to or near the Project, but only if such
connection or "tie in" of utility or similar facilities will not unreasonably
interfere with the use of the Project.
SECTION 12.3 INTEREST RATE LIMITATION. Any interest rate
specified herein for any purpose shall be deemed to be limited to the lesser of
(a) the rate so specified, or (b) the highest non-usurious rate at the time
permitted by the laws of Alabama.
SECTION 12.4 THIS LEASE A NET LEASE. The Company recognizes and
understands that it is the intention hereof that this lease be a net lease and
that until the Bonds are fully paid all taxes, insurance and maintenance shall
be the sole responsibility of the Company to the end that all Basic Rent be
available for payment of principal and interest and premium (if any) on the
Bonds. This Lease Agreement shall be construed to effectuate such intent.
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SECTION 12.5 NOTICES. All notices, demands, requests and other
communications hereunder shall be deemed sufficient and properly given if in
writing and delivered in person to the following addresses or mailed by
certified or registered mail, postage prepaid with return receipt requested, at
such addresses:
(a) If to the Board:
The Industrial Development Board
of the City of Demopolis
City Hall
Demopolis, Alabama 36732
(b) If to the Company:
McClain of Alabama, Inc.
6200 Elmridge
Sterling Heights, Michigan 48313
(c) If to the Trustee:
LaSalle National Bank - Corporate Trust
135 South LaSalle Street
Chicago, Illinois 60603
(d) If to the Credit Obligor:
Standard Federal Bank
2600 West Beaver Road
Troy, Michigan 48084
Any of the above-mentioned parties may, by like notice, designate any further
or different addresses to which subsequent notices shall be sent. The Board and
the Company will send a copy of each notice that either thereof gives to the
other pursuant to the provisions hereof to the Trustee and to the Credit
Obligor, but the failure to give a copy of such notice to the Trustee or the
Credit Obligor shall not invalidate such notice or render it ineffective unless
in the case of failure to give notice to the Trustee, such notice is otherwise
herein expressly required. Any notice hereunder signed on behalf of the
notifying party by a duly authorized attorney at law shall be valid and
effective to the same extent as if signed on behalf of such party by a duly
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authorized officer or employee. Any notice given hereunder shall be deemed to
have been given upon receipt by the person to whom such notice is required to
be given hereunder.
Whenever, under the provisions hereof, any request, consent or
approval of the Board or the Company is required or authorized, such request,
consent or approval shall (unless otherwise expressly provided herein) be
signed on behalf of the Board by an Authorized Board Representative and on
behalf of the Company by an Authorized Company Representative; and each of the
parties and the Trustee are authorized to act and rely upon any such requests,
consents or approvals so signed.
SECTION 12.6 CERTAIN PRIOR AND CONTEMPORANEOUS AGREEMENTS
CANCELLED. This Lease Agreement shall completely and fully supersede all other
prior or contemporaneous agreements, both written and oral, between the Board
and the Company relating to the leasing of the Project. Neither the Board nor
the Company shall hereafter have any rights under any such prior or
contemporaneous agreement but shall look solely to this Lease Agreement for
definition and determination of all their respective rights, liabilities and
responsibilities respecting the leasing of the Project.
SECTION 12.7 LIMITED LIABILITY OF BOARD. The Board is entering
into this Lease Agreement pursuant to the authority conferred upon it in the
Authorizing Act. No provision hereof shall be construed to impose a charge
against the general credit of the Board or any personal or pecuniary liability
upon the Board except with respect to the proper application of the proceeds to
be derived from the sale of the Bonds and the revenues and receipts to be
derived from any leasing or sale of the Project or any part thereof.
SECTION 12.8 BINDING EFFECT. This Lease Agreement shall inure
to the benefit of, and shall be binding upon, the Board, the Company, and their
respective successors and assigns.
SECTION 12.9 SEVERABILITY. In the event any provision or any
part of a provision of this 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 or part of a provision
hereof.
SECTION 12.10 ARTICLE AND SECTION CAPTIONS. The article and
section headings and captions contained herein are included for convenience
only and shall not be considered a part hereof or affect in any manner the
construction or interpretation hereof.
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SECTION 12.11 GOVERNING LAW. It is the intention of the parties
hereto that this Lease Agreement shall in all respects be governed by the laws
of the State of Alabama.
IN WITNESS WHEREOF, the Board and the Company have caused this
Lease Agreement to be executed in their respective corporate names, have caused
their respective corporate seals to be hereunto affixed, and have caused this
Lease Agreement to be attested, all by their duly authorized officers, in
multiple counterparts, each of which shall be deemed an original, and have
caused this Lease Agreement to be dated as of April 1, 1997.
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF DEMOPOLIS
By
-------------------------------
Its
---------------------------
Attest:
- -------------------------------
Its
---------------------------
McCLAIN OF ALABAMA, INC.
By
-------------------------------
Its
---------------------------
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STATE OF ALABAMA )
)
COUNTY OF MARENGO )
I, the undersigned Notary Public in and for said county in said
state, hereby certify that John E. Northcutt, whose name as Chairman of the
Board of Directors of THE INDUSTRIAL DEVELOPMENT BOARD OF THE CITY OF
DEMOPOLIS, a public corporation under the laws of Alabama, is signed to the
foregoing instrument and who is known to me, acknowledged before me on this day
that, being informed of the contents of the within instrument, he, as such
officer and with full authority, executed the same voluntarily for and as the
act of said public corporation.
GIVEN under my hand and official seal of office, this ____ day
of _______________, 1997.
---------------------------------------
Notary Public
[NOTARIAL SEAL] My Commission Expires: _______________
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STATE OF )
)
COUNTY OF )
I, the undersigned Notary Public in and for said county in said
state, hereby certify that ______________________________, whose name as
_________________________ of MCCLAIN OF ALABAMA, INC., a corporation organized
under the laws of the State of Michigan, is signed to the foregoing instrument
and who is known to me, acknowledged before me on this day that, being informed
of the contents of the within instrument, he, as such officer and with full
authority, executed the same voluntarily for and as the act of said
corporation.
GIVEN under my hand and official seal of office, this ____ day of
_______________, 1997.
---------------------------------------
Notary Public
[NOTARIAL SEAL] My Commission Expires: _______________
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EXHIBIT A
To That Lease Agreement
between The Industrial Development Board
of the City of Demopolis and
McClain of Alabama, Inc.
Dated as of April 1, 1997
================================================================================
PROJECT SITE DESCRIPTION
A parcel of land lying and being in Section 11, Township 17 North, Range 1
East, Marengo County, Alabama, containing 88.1 acres more or less, and being
more particularly described as follows:
Commence at the southwest corner of the Northeast Quarter of the Southwest
Quarter of said Section 11; thence run north 01 degrees 50' west along the west
boundary of said Northeast Quarter of Southwest Quarter a distance of 82.6 feet
to a concrete monument set to mark the point of beginning; thence run north 40
degrees 29' east parallel to and 350 feet perpendicular from the centerline of
the existing runway No. 4 of the Demopolis Airport a distance of 3,245.9 feet to
a concrete monument set 600 feet perpendicular from the centerline of existing
runway No. 13 of the said Demopolis Airport; thence run north 51 degrees 55'
west and parallel to said runway No. 13 a distance of 1,568.8 feet to a
concrete monument set on the southeast boundary of a cemetery; thence run south
38 degrees 05' west a distance of 20.0 feet to a concrete monument set at the
southern most corner of said cemetery; thence run north 51 degrees 55' west
along the southwest boundary of said cemetery a distance of 43.2 feet to a
concrete monument set near the left bank of the Tombigbee River. Continue
thence north 51 degrees 55' west to the said Tombigbee River; thence
southwestwardly along the southeast edge of said Tombigbee River to the point of
intersection of said river and the west boundary of the Southeast Quarter of the
Northwest Quarter of Section 11, said course follows generally along a meander
line described as: from last named concrete monument run south 47 degrees 04'
west a distance of 515.2 feet; thence run south 41 degrees 54' west a distance
of 367.2 feet; thence run south 50 degrees 42' west a distance of 370.0 feet to
a concrete monument found on the said west boundary of the Southeast Quarter of
the Northwest Quarter near the left bank of said river; thence run south 01
degrees 50' east and along the west boundary of said Southeast Quarter of
Northwest Quarter and Northeast Quarter of Southwest Quarter a distance of
2,590.2 feet to the point of beginning.
LESS AND EXCEPT THE FOLLOWING DESCRIBED TRACT HERETOFORE CONVEYED TO ALABAMA
POWER COMPANY AND MORE PARTICULARLY DESCRIBED AS FOLLOWS:
A parcel of land located in the Northeast Quarter of the Southwest Quarter (NE
1/4 of SW 1/4) and the Southeast Quarter of Northwest Quarter (SE 1/4 of NW
1/4) of Section 11, Township 17 North, Range 1 East, Marengo County, Alabama,
being more particularly described as follows:
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Commence at the southwest corner of the Northeast Quarter of Southwest Quarter
(NE 1/4 of SW 1/4) of Section 11 and run North 01 degree 50 minutes West a
distance of 651.4 feet to a point; thence turn an angle to the right and run
North 40 degrees 31 minutes East a distance of 1130.83 feet to a point, said
point being the northwest corner of existing Alabama Power Company substation
and point of beginning of the property herein described; thence from point of
beginning continue North 40 degrees 31 minutes East a distance of 150.0 feet to
a point; thence turn an angle to the right and run South 49 degrees 29 minutes
East a distance of 150 feet to a point; thence turn an angle to the right and
run South 40 degrees 31 minutes West a distance of 50 feet to a point; thence
turn an angle to the left and run South 49 degrees 29 minutes East a distance
of 115.2 feet to the northwesterly boundary line of a paved road; thence turn
an angle to the right and run South 40 degrees 31 minutes West along the
northwesterly margin of said road a distance of 50 feet to a point; thence turn
an angle to the right and run North 49 degrees 29 minutes West a distance of
115.2 feet to a point; thence turn an angle to the left and run South 40
degrees 31 minutes West a distance of 50 feet to a point; thence turn an angle
to the right and run North 49 degrees 29 minutes West a distance of 150 feet to
the point of beginning.
The foregoing property being conveyed to the Alabama Power Company by Deeds
recorded October 2, 1985 in the Probate Office, Marengo County, Alabama, in
Deed Book 7-U, at page 296 and Deed Book 7-U, at page 300.
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EXHIBIT B
To That Lease Agreement
between The Industrial Development Board
of the City of Demopolis and
McClain of Alabama, Inc.
Dated as of April 1, 1997
================================================================================
EQUIPMENT DESCRIPTION
Tool Smith - 1 Ton Air Hoist
Metal Muncher Punch Press
Air Compressor
Fork Lift Truck
General Office Furniture and Equipment
Computer Monitor
Emulation Board
BellSouth Phone System
Trailer
Burn Table
Crane
Fork Lifts
Welder
Semi Truck
1