Master Industrial Development Lease Agreement (209K)
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MASTER INDUSTRIAL DEVELOPMENT LEASE AGREEMENT
between
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF HUMBOLDT, TENNESSEE
and
AMERICAN WOODMARK CORPORATION
Dated as of December 15, 2000
This Instrument Prepared By:
G. Griffin Boyte
Warmath and Boyte
314 N. 22nd Avenue
P.O. Box 406
Humboldt, TN 38343-0406
(901) 784-1550
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THIS MASTER INDUSTRIAL DEVELOPMENT LEASE AGREEMENT ("Lease or Agreement")
is entered into as of December 15, 2000, by and between THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF HUMBOLDT, TENNESSEE, a public non-profit
corporation organized and existing under the laws of the State of Tennessee
("Board or Lessor") and AMERICAN WOODMARK CORPORATION, a corporation organized
and existing under the laws of the State of Virginia ("Lessee"),
RECITALS
1. Chapter 210 of the Public Acts of the State of Tennessee of 1955,
constituting Chapter 53 of Title 7 of the Tennessee Code Annotated, as amended
and supplemented (the "Act"), authorizes Lessor to acquire, own, lease and/or
dispose of property, structures, equipment and facilities for industry,
commerce, distribution and research, in order to create or preserve jobs and
employment opportunities and improve the economic welfare of the people of the
State of Tennessee.
2. Lessor has found and determined, and hereby finds and determines, that
the industrial, commercial and economic welfare of the State of Tennessee will
benefit by the Project (as hereinafter defined).
3. Lessor is authorized by the Act to issue industrial development revenue
notes to defray the cost of acquiring, constructing, installing and equipping
facilities such as the Project and to secure the note(s) as provided in the Act.
4. To induce Lessee to operate a manufacturing facility in the City of
Humboldt, Gibson County, Tennessee, Lessor is the owner of the Land (hereinafter
defined) previously acquired from the City of Humboldt, Tennessee, and Lessor
will construct, or cause to be constructed, a Building (hereinafter defined) and
acquire and install, or cause to be acquired and installed, the Equipment
(hereinafter defined) thereon in accordance with Lessee's requirements, and
Lessor will lease said Land, Building and Equipment to Lessee under the terms
and conditions of this Agreement.
5. To obtain funds for the construction and equipping on the Land of the
Building and Equipment, Lessor will issue and sell its 2000-1 Note (hereinafter
defined) under and pursuant to the Act. The 2000-1 Note will be secured by the
Deed of Trust, Security Agreement and the Assignment (all hereinafter defined).
6. Lessor has been authorized by resolutions duly adopted by the City of
Humboldt, Tennessee, and Gibson County, respectively, to negotiate and enter
into an agreement with Lessee to make payments in lieu of taxes, according to
the provisions set forth in this Lease, and Lessor has obtained all consents and
approvals, if any, required by the provisions of Tennessee law for the issuance
and delivery from time to time of the Notes and the execution and delivery of
this Agreement, the Deeds of Trust and the Assignment.
7. Lessor has determined and found that the payments in lieu of ad valorem
tax agreement entered into with Lessee in connection with the leasing of the
Project, as set forth in Article IV hereof, is in furtherance of Lessor's public
purposes, as defined in the Act, including, without limitation, Section 7-53-305
of the Act.
8. Lessor is authorized and empowered by the provisions of the Act to
execute and deliver the Security Agreement and the Deed of Trust
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for the Project and to assign to the holder of the 2000-1 Note, Lessor's
interest in this Agreement pursuant to the Assignment.
9. Lessor proposes to lease the Project to Lessee, and Lessee desires to
lease and rent the Project from Lessor upon the terms and conditions set forth
in this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
hereinafter contained, the parties hereto covenant, agree and bind themselves as
follows: provided, that any obligation of Lessor created by or arising out of
this Agreement shall never constitute a debt or a pledge of the faith and credit
or the taxing power of Lessor, the City of Humboldt, Tennessee, or Gibson
County, Tennessee, or any other political subdivision or taxing district of the
State of Tennessee, and the obligations of Lessor arising hereunder or under the
Note, the Deed of trust, Security Agreement or the Assignment shall be payable
solely out of the rents payable hereunder, anything herein contained to the
contrary by implication or otherwise notwithstanding.
ARTICLE I.
DEFINITIONS
All capitalized terms used herein shall have the following meanings:
"Additional Rent" means the additional rent due to Lessor in accordance
with Section 3.3(d) and Article IV.
"Ad Valorem Property Taxes" means all real and personal property taxes or
assessments which would ordinarily be assessed or levied against the Project, or
any part thereof, if privately owned by Lessee, including any penalties or
interest for real or personal property taxes which may be hereafter assessed or
levied against any of the foregoing during the Lease Term for the nonpayment of
such taxes.
"Assignment" means the Assignment of Rents and Lease dated as of this date,
from Lessor to the Lessee, and all amendments, supplements and restatements
thereof, to further secure the payment of the Note.
"Bill of Sale" means (i) the 2000 Bill of Sale, and (ii) any other bill of
sale delivered by Lessee, as seller, to Lessor, as purchaser, from time to time,
pursuant to Section 3.11 of this Lease, to effect the sale of Equipment to
Lessor.
"Building" means all improvements affixed to the Land, including leasehold
improvements (but excluding Equipment), as such currently exist on the date
hereof, or are hereafter constructed or modified including, but not limited to,
improvements which are hereafter constructed or modified and which are acquired
by the Lessor with the proceeds of any Additional Notes.
"Completion Date" means the day upon which the construction of the Building
on the Land has been completed in accordance with Lessee's plans and
specifications, all as certified by the Lessee.
"Cost" with respect to the Project shall be deemed to include all present
and future costs and expenses expended or incurred by Lessor or Lessee in
connection with the sale and lease of the Project, including, but not limited
to:
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(a) the cost of preparation of all documents necessary or appropriate
to effect the purchase of the Project by the Board, the leasing of the Project
to Lessee and in the event Lessee exercises its option to purchase the Project,
the sale of the Project to Lessee in accordance with the provisions of this
Agreement;
(b) all taxes, including, without limitation, recording and transfer
taxes, and expenses associated with the filing of: (i) deed of transfer to the
Board by the City of Humboldt, Tennessee; (ii) the Deeds of Trust; (iii) the
Assignment, together with such additional transfer taxes as may be due and owing
in connection with the recording of additional deeds of trust or modifications
to or supplements of the deeds of trust; and (iv) the deed of transfer from
Lessor to Lessee at such time as Lessee may exercise its option to purchase the
Project as provided in Article XI;
(c) the cost of any title insurance premiums incurred in connection
with the leasing of the Project to Lessee and the conveyance of the Project to
Lessee at such time as Lessee may exercise its option to purchase the Project as
provided in Article XI;
(d) all fees and expenses paid or payable by Lessee for professional
services retained by Lessor or Lessee in connection with the transactions
contemplated by this Agreement, including reasonable attorneys' fees and
expenses and reasonable financial advisors' fees (if any) and expenses incurred
in connection therewith; and
(e) any and all other reasonable expenses incurred by or on behalf of
Lessor in connection with the transactions contemplated hereby, including,
without limitation, expenses incurred in the preparation, execution and delivery
and recording of instruments pursuant to Section 6.2, and reasonable costs and
expenses, including reasonable counsel fees incurred by Lessor pursuant to
Lessor's obligations under Section 3.10.
"County" means Gibson County, Tennessee.
"Deed of Trust" means the Deed of Trust and Security Agreement dated as of
the date hereof, from Lessor to American Woodmark Corporation, as Trustee (the
"Trustee") for the benefit of Lessee, pursuant to which Lessor grants to the
Trustee a mortgage lien on the Project and grants to Lessee a security interest
in the Equipment to secure payment of amounts due to Lessee from Lessor under
the 2000-1 Note.
"Default" means any Default under this Agreement as specified in and
defined by Section 10.1.
"Equipment" means all those items of furniture, fixtures, machinery and
equipment now existing or hereafter acquired and located or to be located or
affixed to the Building or elsewhere on the Land and which have been or are
acquired:
(i) with the proceeds from the 2000-1 Note, or for which Lessee is
reimbursed with proceeds from the 2000-1 Note, and any item of personal property
acquired and installed in the Building or elsewhere on the Land in substitution
therefor, all of which is described generally in Exhibit "A", attached hereto;
and
(ii) with the proceeds from any Additional Notes, or for which Lessee
is reimbursed with proceeds from the Additional Notes,
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and any items of personal property acquired and installed in the Building or on
the Land in substitution therefor.
"Fair Market Value" means with respect to any item of Equipment, the sale
value such item of equipment would obtain in an arm's-length transaction between
an informed and willing seller under no compulsion to sell and in informed and
willing buyer-user. A comparable sale of like or similar property is an arm's-
length transaction in reasonably close proximity to the valuation date shall
constitute the best evidence of the Fair Market Value of any such item. In the
absence of a comparable sale, the lesser of cost or the depreciated book value
of such item shall constitute the best evidence of the item's Fair Market Value.
"Land" means the land described in Exhibit "B" attached hereto.
"Lease" means this Master Industrial Development Lease Agreement and each
supplement hereto, as same may from time to time be amended, modified or
supplemented.
"Lease Term" means, with respect to the Project or with respect to any item
of Equipment, the term of the leasehold estate created in this Agreement as set
forth in Section 3.2, or in the applicable Supplement.
"Lessee Documents" means this Lease.
"Lessor Documents" means the 2000-1 Note, this Lease, the Deed of Trust and
Security Agreement and the Assignment.
"Net Proceeds", when used with respect to any insurance proceeds or any
condemnation award, means the amount remaining after deducting all expenses
(including reasonable attorneys' fees) incurred in the collection of such
proceeds or award from the gross proceeds thereof.
"2000 Bill of Sale" means the Bill of Sale pursuant to which Lessee has
conveyed the Equipment to Lessor.
"2000-1 Note" means the non-recourse Twenty Million Three Hundred Sixty-Six
Thousand Eight Hundred Eighty-Eight and 20/100 Dollars ($20,366,888,20)
aggregate principal amount Industrial Development Revenue Note (American
Woodworking Project) Series 2000 of even date herewith, or any amendments or
extensions thereof payable from Lessor to Lessee for the purpose of acquiring
and constructing the Building and Equipment or any portion thereof.
"Note" or "Notes" means: (i) the 2000-1 Note; and (ii) each additional non-
recourse promissory note ("Additional Note") issued by Lessor and delivered to
Lessee from time to time during the term hereof to effect the purchase of any
additional part of the Project, as described in Section 3.11 hereof.
"PILOT" means payment-in-lieu-of-taxes as provided in Section 4.1 hereof.
"Project" means the Land, Building and Equipment.
"Project Site" means the Land and Building.
"Register's Office" means the Register's Office of Gibson County,
Tennessee.
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"Security Agreement" means the Security Agreement dated as of the date
hereof, from Lessor to Lessee, pursuant to which Lessor grants to Lessee a
security interest in the Equipment.
"State" means the State of Tennessee.
"Supplement" means an Acceptance Supplement substantially in the form of
Exhibit "C" attached hereto, pursuant to which Lessor leases to Lessee, from
time to time, additional equipment which Lessor shall have acquired in
connection with the issuance of Additional Notes in accordance with Section 3.11
hereof.
"Unrelated Assets" means all property and assets presently owned or
hereafter acquired or held by Lessor in conjunction with contracts and
agreements having no connection, directly or indirectly, with the Project or the
transactions contemplated by this Lease.
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1 Representations, Covenants and Warranties of Lessor. Lessor
represents, covenants and warrants as follows:
(a) Lessor is a Tennessee public nonprofit corporation. Under the
provisions of this Act, Lessor is authorized to enter into the transactions
contemplated by this Agreement, including, without limitation, executing and
delivering the Lessor Documents, and to carry out its obligations hereunder and
thereunder. Lessor has duly authorized the execution, delivery and performance
of the Lessor Documents. The Lessor Documents constitute the valid and legally
binding obligations of Lessor, enforceable in accordance with their terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
liquidation, moratorium or similar laws at the time in effect affecting the
rights or remedies of creditors generally or by general principles of equity.
(b) Lessor has received from the City, the County and any other requisite
governmental authority sufficient authority and power under Tennessee Code
Annotated Section 7-53-305 to authorize, negotiate, enter into, receive and
accept in lieu of tax payments, as set forth in Article IV hereof.
(c) Lessor will at all times during the Lease Term remain in existence as a
public nonprofit corporation under the Act with full power and authority to take
such action as may be required of it during the Lease Term, including executing
and delivering a good and sufficient deed of transfer and bills of sale to
transfer the Project to Lessee if and when Lessee shall elect to exercise its
option to purchase the Project pursuant to Article XI.
(d) Lessor will not sell, pledge or otherwise encumber any of its rights or
obligations under this Agreement other than as contemplated herein.
(e) The Project constitutes a "project" within the meaning of the Act, and
Lessor will not cause the Project to cease to constitute a "project" within the
meaning of the Act except as contemplated by Section 10.2
(f) Neither the execution and delivery of the Lessor Documents nor the
consummation of the transactions contemplated hereby and
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thereby, nor the fulfillment of or compliance with the terms and conditions
hereof or thereof materially conflicts with or results in a material breach of
the terms, conditions or provisions of any agreement or instrument to which
Lessor is now a party or by which Lessor is found, or constitutes a material
default under any of the foregoing.
(g) There is no action, suit, proceeding, inquiry or investigation, in law
or in equity, before or by any court, public board or body, pending or, to
Lessor's best knowledge, threatened against or affecting Lessor or any of its
officers, nor to Lessor's best knowledge is there any basis therefor, wherein an
unfavorable decision, ruling or finding would materially adversely affect the
transactions contemplated by the Lessor Documents or which would materially
adversely affect, in any way, the validity or enforceability of the Lessor
Documents or any other material agreement or instrument to which Lessor is a
party, used or contemplated for use in the consummation of the transactions
contemplated hereby.
(h) The 2000-1 Note does not constitute a debt or liability or pledge of
the faith and credit of the City, the County or the State.
(i) Lessor will not claim for federal, state or local income tax purposes,
any tax benefits (including any tax credits or cost recovery deductions)
relating to the Project (the "Tax Benefits") and at Lessee's expense will make
any and all elections and take any and all actions as Lessee may reasonably
request in order to enable Lessee to claim any and all of the Tax Benefits.
(j) Lessor has not received any notice of any violation of, nor to the best
knowledge of Lessor, has Lessor violated any ordinance, regulation, law,
statute, rule or restriction relating to the Project, including, but not limited
to, any applicable governmental laws or regulations relating to hazardous waste
or use of hazardous or toxic materials or substances.
Section 2.2 Representations, Covenants and Warranties of Lessee. Lessee
represents, covenants and warrants as follows:
(a) Lessee is a corporation duly organized, validly existing and in good
standing under the laws of the State of Virginia. Lessee is qualified to do
business and is in good standing under the laws of the State. Lessee is not in
violation of any provisions of its Charter or Bylaws, as amended, has the
corporate power to enter into the Lessee Documents, and has duly authorized the
execution and delivery of the Lessee Documents.
(b) The Lessee Documents constitute the valid, legal and binding
obligations of Lessee, enforceable against Lessee in accordance with their
respective terms, except as the same may be limited by bankruptcy, insolvency or
similar laws at the time in effect affecting the rights of creditors generally
or by general principles of equity.
(c) Neither the execution and delivery of the Lessee Documents, nor the
consummation of the transactions contemplated hereby and thereby, nor the
fulfillment of or compliance with the terms and conditions hereof or thereof
materially conflicts with or results in a material breach of or constitutes a
default under the Charter or the Bylaws of Lessee or the terms, conditions or
provisions of any material agreement or instrument or any order, decree, writ or
judgment to which
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Lessee is now a party or by which Lessee is bound, or constitutes a material
default under any of the foregoing.
(d) There is no action, suit, proceeding, inquiry or investigation, at law
or in equity, before or by any court, public board or body, pending or, to
Lessee's best knowledge, threatened, against or affecting Lessee or any of its
officers, nor to Lessee's best knowledge, is there any basis therefor, wherein
an unfavorable decision, ruling or finding would materially adversely affect the
transactions contemplated by the Lessee Documents or which would materially
adversely affect, in any way, the validity or enforceability of the Lessee
Documents, or any material agreement or instrument to which Lessee is a party,
used or contemplated for use in the consummation of the transactions
contemplated hereby.
(e) Lessee will use due diligence to cause the Project to be operated
substantially in accordance with the laws, rulings, regulations, rules,
restrictions, covenants and ordinances (including any law, ruling, regulation,
rule, restriction, covenant and ordinance relating to hazardous waste or the use
of hazardous or toxic materials or substances) of all applicable governing
bodies, including the governments of the United States and the State, and the
departments, agencies and political subdivisions thereof. Lessee either has
obtained or will obtain all requisite approvals of the State and of other
federal, state, regional and local governmental bodies for the acquisition,
construction, improving, equipping and operation of the Project. Lessee shall,
throughout the Lease Term, cause the Project to be used in a manner that will
constitute a "project" within the meaning of the Act. Lessee has represented to
Lessor its intention to operate and use the Project as a manufacturing facility,
and it agrees to operate and utilize the Project at all times during the Lease
Term as a facility authorized pursuant to the Act.
(f) The lease of the Project from Lessor to Lessee induced Lessee to locate
or remain in, and to retain or expand and increase employment within, the State.
ARTICLE III
DEMISING CLAUSES; LEASE PROVISIONS;
COMMENCEMENT AND COMPLETION OF PROJECT
Section 3.1 Demise of Lessor's Interest in the Project.
Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, at the
rental set forth in Section 3.3 and in any Supplement, the Project, including
those parcels or items of personal property which are described and more
specifically identified in Schedule A to each Supplement which is or may
hereafter be executed from time to time by the parties hereto. Each item of
personal property shall be subjected to this Agreement by the execution by the
Lessor and Lessee of this Lease, or one or more Supplements.
(a) Lessee shall arrange for delivery and installation of each item of
Equipment, and Lessor shall have no responsibility or obligation whatsoever with
respect to such arrangement except as set forth in this Lease.
Section 3.2 Effective Date of Agreement; Duration of Lease Term.
(a) The Lease and each Supplement shall become effective as of the
respective dates thereof and shall expire on December 15, 2020, unless
terminated earlier by Lessor or Lessee in accordance with the
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terms hereof or unless extended in order for Lessee to benefit from the credits
described in Section 4.3(a) hereof.
(b) Notwithstanding the provisions of Section 3.2(a), Lessee's option to
purchase the Project in accordance with Article XI shall remain in full force
and effect for a period of one hundred eighty (180) days following the
termination of this Agreement. During such one hundred eighty (180) day period,
Lessor shall give the notice provided in Section 10.2(a).
Section 3.3 Amounts Payable.
(a) Lessee hereby covenants and agrees to pay to the Lessor the following
amounts during the Lease Term as rent for the lease of the Project, on the
following dates:
On the fifteenth day of March, June, September and December of each
year, in the amount of $512,445.28 each, with the first payment being March 15,
2001.
If the day on which rent is payable is a Saturday, Sunday or public holiday
under the laws of the State, rent shall be payable on the next succeeding
business day.
(b) Lessee also shall pay all Costs with respect to the Project associated
with the transactions contemplated hereby.
(c) In the event Lessee shall fail to make any of the payments required in
Section 3.3(a), Lessor shall have the right to set off the amounts then due and
payable against any amounts then or thereafter due under the Notes, or if the
Notes shall have been paid in full, to exercise such other rights or remedies as
may be set forth in the Lease and this Agreement.
(d) In the event Lessee shall fail to make proper provision for self-
insurance as set forth in Section 8.7, or to make any other payments required
herein, including, but not-limited to, payments for insurance for the Project or
repairs or maintenance expenses, Lessor shall have the right, but not the
obligation, to obtain such insurance and to make any such payments on account of
the Project, and Lessee shall immediately reimburse such amounts to Lessor as
additional rent due hereunder (the "Additional Rent"). Furthermore, the payments
in lieu of taxes required to be paid pursuant to Article IV hereof shall
constitute Additional Rent hereunder.
Section 3.4 Obligations of Lessee Unconditional. The obligation of Lessee
to make the payments required in Sections 3.3, 3.8 and 4.1 and to perform and
observe the other agreements contained herein or therein shall be absolute and
unconditional and shall not be subject to any defense or any right of setoff,
counterclaim or recoupment arising out of any breach by Lessor of any obligation
to Lessee, whether hereunder or otherwise. Nothing contained in this Section 3.4
shall be construed to release Lessor from the performance of any of the
agreements on its part herein contained, and in the event Lessor should fail to
perform any such agreement on its part, Lessee may institute such action against
Lessor as Lessee may deem necessary to compel performance so long as such action
does not abrogate the obligations of Lessee contained in the first sentence of
this Action.
Section 3.5 Intentionally Omitted.
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Section 3.6 Agreement to Acquire, Construct, Install and Equip the Project
Subject to the provisions of Section 3.10 hereof, Lessor agrees that:
(a) It will acquire the Project, including, but not limited to, any
additional portion of the Project which Lessee requests that Lessor acquire in
accordance with Section 3.11 hereof.
(b) It shall not execute any contract for or with respect to the
acquisition, construction, installation and equipping of the Project or any part
thereof without the prior written approval of Lessee.
(c) Before entering into any contract for the construction of the
Building or any part thereof, it will ca use the contractor to execute and
deliver any bond as Lessee may reasonably request.
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Lessor agrees that it will enter into, or accept the assignment of, such
contracts as Lessee may request, such assignments to be in form reasonably
acceptable to Lessor, in order to effectuate the purposes of this Section but
that it will not execute any other contract or give any order for such
acquisition, construction, installation and equipping of the Project unless and
until Lessee shall have approved the same in writing.
Lessor hereby makes, constitutes and appoints Lessee as its true and lawful
agent, and Lessee hereby accepts such agency, (a) to acquire, construct, install
and equip the Project, (b) to make, execute, acknowledge and deliver any
contracts, order, receipts, writings and instructions, either in the name of the
Lessee solely or as the stated agent for Lessor, with any other persons, firms
or corporations, and in general to do all things which may be requisite or
proper, all for the acquisition and installation of the Project with the same
powers and with the same validity as Lessor could do if acting in its own
behalf, (c) pursuant to the provisions of this Lease, to pay all fees, costs and
expenses incurred in the acquisition of the Project from funds made available
therefor in accordance with this Lease, and (d) to ask, demand, sue for, levy,
recover and receive all such sums of money, debts, dues and other demands
whatsoever which may be due, owing and payable to Lessor under the terms of any
contract, order, receipt, writing or instruction in connection with the
acquisition of the Project, and to enforce the provisions of any contract,
agreement, obligation, bond or other performance security. So long as Lessee is
not in default under any of the provisions of this Lease, this appointment of
Lessee to act as agent and all authority hereby conferred are granted and
conferred irrevocably to the Completion Date and thereafter until all activities
in connection with the acquisition of the Project shall have been completed, and
shall not be terminated prior thereto by act of Lessor or of Lessee or by
operation of law. However, Lessee shall enter into no agreement or contract on
behalf of Lessor which would, in any manner, subject the Lessor's Unrelated
Assets to any claim, charge, liability or lien.
Lessee agrees, pursuant to the authority and power granted in the preceding
paragraph, promptly to commence acquisition, construction and installation of
the Project and to proceed with such acquisition, construction, installation and
equipping with due diligence, in a good and workmanlike manner and in compliance
with all legal requirements, ordinances and restrictions, and to complete such
rehabilitation, acquisition and installation within one (1) year after the date
hereof.
Lessor agrees to use its reasonable best efforts to cause the acquisition
of the Project to be completed with all reasonable dispatch and in accordance
with the schedule desired by the Lessee.
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Section 3.7 Agreement to Issue Notes; Application of Note Proceeds. In
order to acquire the Land, and to provide funds for payment of the costs of the
acquisition, construction, installation and equipping of the Building and
Equipment provided for in Section 3.6 hereof, Lessor shall issue the 2000-1
Note.
Section 3.8 Use of Proceeds. The proceeds of the 2000-1 Note will be
utilized by Lessee only for the payment of, or reimbursement of Lessee for
payment of, the following costs and expenses:
(a) The fees, taxes and expenses for recording or filing any of the
Lessor Documents or the Lessee Documents; the fees, taxes and expenses for
recording or filing any financing statements and any other documents or
instruments that either Lessor or Lessee may deem desirable to file or record in
order to perfect or protect the lien of any of the Lessor Documents;
(b) The legal and fiscal fees and expenses incurred in connection with
the authorization and issuance of the Notes, the preparation of the Lessor
Documents or the Lessee Documents, and all other documents in connection
therewith;
(c) The fees for architectural, engineering and supervisory services
with respect to the Project;
(d) All costs in connection with acquisition of the Land, site
preparation of the Land, construction of the Building and acquisition and
installation of the Equipment;
(e) To such extent as they shall not be paid by a contractor for
construction with respect to any part of the Building, payment of the premiums
on all insurance required to be taken out and maintained during the construction
of the Building; and
(f) Any other costs and expenses relating to the Project which would
constitute a cost or expense for which Lessor may issue Notes.
In connection with any payment under this Section 3.8 for, or reimbursement
of the Lessee for, the acquisition and installation of Equipment the Lessee, at
the time of request for such payment, shall deliver to the Lessor, a bill of
sale (naming the Lessor as the Purchaser) specifically listing each item of such
Equipment.
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Nothing contained in this Lease or in any related document shall impose
upon Lessor any obligation to see to the proper application of the proceeds of
the Notes disbursed in accordance with the terms hereof, regardless of any
inspection or other actions taken.
Upon completion of the acquisition, construction, installation and
equipping of the Project, Lessee shall cause all costs and expenses in
connection therewith to be paid, and shall deliver to Lessor a certificate
signed by Lessee's authorized representative that (i) construction and equipping
of the Building has been completed in all respects and all costs of labor,
services, materials and supplies used in such renovation have been paid, and
(ii) all other facilities necessary in connection with the Project have been
acquired and constructed and all costs and expenses incurred in connection
therewith have been paid. Notwithstanding the foregoing, such certificate may
state that it is given without prejudice to any rights against third parties
which exist at the date of such certificate or which may subsequently come into
being.
Section 3.9 Lessee Required to Pay Costs of the Project in Event Note
Proceeds Insufficient. In the event the proceeds of the 2000-1 Note available
for payment of the costs of the Project and the other costs, fees and expenses
listed in Section 3.8 should not be sufficient to pay the same in full, Lessee
agrees to complete the Project and to pay all that portion of the costs of the
Project and the other costs, fees and expenses listed in Section 3.8 as may be
in excess of the monies available therefor from the proceeds of the 2000-1 Note.
Lessor does not make any warranty, either express or implied, that the proceeds
of the 2000-1 Note which, under the provisions of this Lease, will be available
for payment of the costs of the Project, will be sufficient to pay all the costs
which will be incurred in that connection.
Section 3.10 Lessor to Pursue Remedies Against Contractors, Subcontractors
and Suppliers and Their Sureties. In the event of default of any contractor,
subcontractor or supplier under any contract made by it in connection with the
Project or in the event of breach of warranty with respect to any material,
workmanship or performance guarantee, Lessor will, at the written request of
Lessee, promptly proceed (subject to Lessor's advice to the contrary), either
separately or in conjunction with others, to exhaust the remedies of Lessor
against the contractor, subcontractor, or supplier so in default and against
each surety for the performance of such contract. Lessee agrees to advise Lessor
of the steps it intends to take in connection with any such default. If Lessee
shall so notify Lessor, Lessee may, in its own name or in the name of Lessor,
prosecute or defend any action or proceeding or take any other action involving
any such contractor, subcontractor or surety which the Lessee deems reasonably
necessary, and in such event Lessor hereby agrees to cooperate fully with Lessee
and to take all action necessary to effect the substitution of Lessee for Lessor
in any such action or proceeding. Any amounts recovered by way of damages,
refunds, adjustments or otherwise in connection with the foregoing shall be paid
to Lessee.
Section 3.11 Additional Notes. At the request of Lessee, Lessor shall,
from time to time, but in no event after _____, _____, issue one or more
Additional Notes to finance the completion of the acquisition, construction,
installation, equipping, improving or expansion of the Project. In connection
with such issuances, from time to time, of Additional Notes, the property, plant
and equipment acquired with the proceeds of such Notes, including without
limitation, the cost of any
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replacement, enhancements, additions and expansions to the Project, (i) shall
become part of the Project and shall be included under this Agreement and the
rent shall be adjusted accordingly, and (ii) shall be subject to the PILOT
Schedule set forth in Section 4.1 hereof in lieu of Ad Valorem Property Taxes.
ARTICLE IV
PAYMENTS IN LIEU OFTAXES
(a) PILOT Schedule. In addition to Lessee's obligations to pay rent in
accordance with Section 3.3, Lessee shall make payments to the City and County,
as Additional Rent, in lieu of Ad Valorem Property Taxes for the Project as
follows:
Year Payments in Lieu of Tax Amount
2001-2010 -0-
2011 10% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
2012 20% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
2013 30% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
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2014 40% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
2015 50% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
2016 60% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
2017 70% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
2018 80% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
2019 90% of the amount that Lessee would have to pay in Ad
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
After 2019 100% of the amount that Lessee would have to pay in A
Valorem Property Taxes if the Project were owned by
Lessee, rather than by Lessor.
and each installment shall be subject to being decreased by certain credits as
set forth in Section 4.3.
(b) Subsequent Improvements to Project Financed with Additional Notes.
As set forth in Section 3.11 of this Lease, Lessor and Lessee contemplate that
from time to time Lessor will issue Additional Notes for the purpose of further
improving the Project by (i) construction of further buildings and improvements,
and/or (ii) the acquisition and installation of additional Equipment, (i) and
(ii) collectively "Subsequent Improvements". In the event Lessor issues
Additional Notes for the purpose of acquiring, constructing, installing or
equipping Subsequent Improvements, then such Subsequent Improvements shall be
subject to the PILOT Schedule set forth in Section 4.1(a) above in all respects,
as set forth in Section 3.11 above.
Section 4.2 Payment Date. Payments in lieu of taxes shall be paid (a) in
the same manner, at the same time and to the same tax collector(s) as ad valorem
taxes are normally due and payable in the City and the County, or (b) in the
event that such tax collector(s) bill Lessee for payments in lieu of taxes at a
date later than the time at which ad valorem taxes are normally due and payable,
in a timely manner when billed. All PILOTs shall constitute a lien on the
Project, having the same priority as Ad Valorem Property Taxes in accordance
with the provisions of Tennessee Code Annotated, Section 67-5-2101.
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Section 4.3 Credits Against Amounts Payable.
(a) Lessee shall receive the following credits, on a dollar-for-dollar
basis, against the payments in lieu of taxes due under Section 4.1:
(i) an aggregate of all Ad Valorem Property Taxes paid if
payable by Lessee on account of the Project for a period commencing January 1,
2001, and continuing through the termination of the Lease Term;
(ii) an aggregate of all sales taxes paid to the State on account
of payments of rent by Lessee pursuant to this Agreement.
(b) Lessee shall be entitled to take any credits due pursuant to Section
4.3(a) in the year in which such amounts are paid by Lessee. If the credits due
Lessee in any one (1) year exceed the PILOT to be paid for that year, any excess
credit shall be carried forward and applied against the PILOT for the next
succeeding year(s).
(c) At such time as the Project shall be legally placed upon the ad
valorem tax rolls of the City and the County, with ad valorem taxes assessable
to Lessee, the payments in lieu of taxes required herein shall automatically
terminate, and Lessee shall pay that portion of the PILOT prorated for the
portion of the year the Project was leased by Lessee and thereafter Lessee shall
pay such ad valorem taxes as may then be properly assessed to it on account of
its ownership of the Project.
(d) In the event Lessee's leasehold interest in the Project shall become
subject to ad valorem taxes at any time during the Lease Term, the amount of
such tax payable by Lessee as a result of such assessment shall be credited
against any in lieu of tax payments due under Section 4.1 until such additional
tax payments shall have been fully recouped.
(e) Not less than thirty (30) days prior to making any payment in excess
of One Thousand Dollars ($1,000.00) which Lessee intends to credit against
amounts payable in lieu of taxes due under Section 4.1, Lessee shall notify the
City and the County of Lessee's intent to credit such payment against amounts
payable in lieu of taxes by sending written notice to:
Mayor, City of Humboldt
Humboldt Municipal Center
1421 Osborne Street
Humboldt, TN 38343
and
Gibson County Trustee
Gibson County Courthouse
Trenton, TN 38343
(f) Credits against the payments in lieu of taxes shall be applied pro-
rata against the amounts owed to the city and to the County pursuant to Section
4.1 in the same proportion that the City rate bears to the County tax rate.
Section 4.4 Provisions for Calculating Amount of PILOTs. As part of the
Project, and for the public purpose of increasing and maintaining
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employment in the State, the Building will be constructed and the Equipment will
be acquired and installed for the purpose of constructing a manufacturing
facility at the Project.
Section 4.5 Computation of PILOT; Challenge.
(a) Intentionally Deleted.
(b) Computation. For the years in which the PILOTs are expressed as a
percentage of taxes that would be due with respect to the Project if the Project
were owned by LESSEE, the amount of each year PILOTs shall be computed as set
forth below.
(c) Valuation of Project Site by Assessor. Subject to Lessee's right of
appeal as set forth in subsection (d), if the County Tax Assessor or successor
official (the "Assessor") has assigned values to the Project Site as if the
Project Site were appraised for property tax purposes, then the PILOTs for each
tax year shall be computed using the values assigned by the Assessor.
(d) Disagreement with Assessor. It is the intent of the parties that in
the event the Lessee disagrees with the values assigned to the Project by the
Assessor, Lessee shall have available to it the same rights and remedies as if
the Project were owned by Lessee, rather than by Lessor. Lessor and Lessee
acknowledge that for so long as the Project is owned by Lessor, the local and/or
state boards of equalization and/or the courts (collectively the "Assessing
Authorities") (i) may be unwilling to consider Lessee's appeal from the
assessor's valuation or (ii) may believe that they are prevented by applicable
law from considering Lessee's appeal. Therefore, in addition to the rights and
remedies that would be available to Lessee if the Project were owned by Lessee
(rather than by Lessor), if Lessee disagrees with the valuation assigned to the
Project by the Assessor, and the assessing Authorities have declined to exercise
its jurisdictional powers due to the fact that the Project is owned by the
Lessor, Lessee shall be entitled to the remedies set forth in subsections (f)
and (g).
(e) Failure of Assessor to Assess. Lessor and Lessee acknowledge that
(i) the Assessor may have no legal duty to value the Project and may, therefore,
be unwilling to determine the Project's value, or (ii) at the applicable time
the Assessor may be prevented by applicable law from determining a value for the
Project. Lessee and Lessor will use their best efforts to cause the Assessor to
determine, no later than October 1, 2001, the value of the Project and
thereafter to reappraise the Project at the times that industrial property
similar in character and location to the Project is either required by law to be
reappraised or customarily reappraised by the Assessor, including, without
limitation, any time at which an addition or improvement of substantial value
shall be made to the Project.
(f) Assessor Will Not Value. In the event that, on or before October 1st
in any tax year in which a new value for the Project shall be required, the
Assessor fails to provide such value, Lessee and Lessor will use their best
efforts to negotiate a mutually acceptable value equivalent to the value at
which the Assessor would have appraised the Project had the Assessor appraised
or reappraised it as the case may be.
(g) Procedure If No Agreement. In the event that the Assessor will not
value the Project and Lessee and Lessor are unable to arrive at a mutually
acceptable valuation of the Project for any tax year which such a valuation is
necessary for purposes of calculating the applicable
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PILOT in accordance with this Article 4 by December 1 of each year, Lessor and
Lessee shall each appoint an independent appraiser not later than January 10
succeeding such December 1. Within fifteen (15) days after the appointment of
the last of the two (2) independent appraisers, the two so appointed shall, by
mutual agreement, appoint a third independent appraiser. The three (3)
independent appraisers so appointed shall consider the assessed values for the
tax year in question which the Assessor has given to taxable industrial property
similar in character and location to the Project. Based upon the above-cited
consideration, as well as upon the then applicable law relating to the
relationship of market value of taxable property to its assessed value for tax
purposes, and such other information as may be deemed relevant, such independent
appraisers shall determine by majority vote a value for the Project, which value
shall be that which such Assessor would have given to said Property if it were
not exempt from taxes. Not later than April 1 next succeeding their appointment,
the three (3) independent appraisers shall advise Lessor and Lessee in writing
of this valuation which they have determined for the Project, and such valuation
shall be binding on Lessor and Lessee and shall be used to calculate the PiLOTs
with respect to the Project. All of the fees and expenses of the three (3)
appraisers with respect to such valuation shall be paid in full by Lessee, and
Lessee shall not be entitled to credit the amount of such fees and expenses
against the PILOT.
(h) Duration of Value. The determination of the value of the Project
Site as (i) made by the Assessor or (ii) mutually agreed to by Lessor and Lessee
or (iii) made by the panel of appraisers, shall be used as a basis for
calculation of the Project PILOTs for succeeding tax years until other
industrial property similar in character to the Project shall be required by law
to be reappraised, or until the Assessor in the exercise of the Assessor's
discretion shall undertake a lawful reappraisal of industrial properties, in
either of which cases a new assessed value shall be determined for the Project
as set forth in this Section 4.4
(i) Lessee's Equipment Report. In the event there is a challenge of the
valuation of the Equipment, then in order to facilitate the determination of a
value for the Equipment, Lessee shall furnish the Assessor, within thirty (30)
days of the notice of the challenge, a report of all tangible personal property
which constitutes a part of the Equipment. This report shall be similar in form
and detail as that required pursuant to Tennessee Code Annotated, Section 67-5-
903.
(j) Equipment PILOTs. Lessor and Lessee agree that for purposes of
calculating the PILOTs with respect to the Equipment, the Equipment shall be
valued in accordance with the provisions of Tennessee Code Annotated, Section
67-5-903, including the equipment groups and statutory depreciation tables set
forth in Tennessee Code Annotated, Section 67-5-903, as it may be from time to
time amended.
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(k) Change in Law. If, as a result of a change in the applicable laws
governing the assessment and levy of taxes on real property and tangible
personal property, the application of the detailed provisions of this Section
4.4 would result in PILOTs in amounts or at times materially different from the
PILOTs that would be payable with respect to the Project for comparable periods
but for such change in the applicable law, then in such event the provisions of
this Section 4.7 shall be superseded by arrangements which will cause the Lessee
to make PILOTs to the County and to the City in such amounts and at such times
as more nearly correspond to the PILOTs calculated based on the change in the
applicable law; provided, however, that in no event shall Lessee be obligated to
make PILOTs to the County or to the City during each of the calendar years 2001
through 2011, inclusive, which in an aggregate annual amount would be larger
than the respective payments to the County and City for such years determined in
accordance with subsection (g).
(l) Right to Challenge Valuation and/or PILOT Computation. In the event
that either the City or the County or Lessee believes: (i) that the PILOTs have
been calculated incorrectly, or (ii) that the amount of the PILOTs does not
accurately reflect the intent of the parties set forth in this Article IV; or
(iii) that the Project (or any part of the Project) has not been valued
correctly for the purpose of calculating the PILOTs, then the City and/or the
County and/or Lessee shall be entitled to challenge the correctness of the PILOT
payments set forth in Section 4.1, as it may be amended from time to time. Any
challenge made by the City shall be made in writing to Lessor and shall be
signed by the Mayor of the City, with copies to Lessee and the County. Any
challenge made by the County shall be made in writing to Lessor and shall be
signed by the County Executive, with copies to Lessee and the City. Any
challenge made by Lessee shall be made in writing to Lessor and shall be signed
by an authorized representative of Lessee, with copies to the Mayor of the City
and the County Executive. Making such challenge shall trigger the procedures and
remedies set forth in this Section 4.4, so that upon receipt of written notice
of challenge, Lessor shall request the Assessor to value the Project (or the
part of the Project being challenged), and the merits of the challenge shall be
determined as set forth in this Section 4.4.
ARTICLE V
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 5.1 Damage, Destruction and Condemnation. Unless Lessee shall have
exercised its option to purchase the Project pursuant to the provisions of
Article XI hereof, if prior to full payment of the Notes (i) the Project, or any
portion thereof, is destroyed (in whole or in part) or is damaged by fire or
other casualty or (ii) title to or any interest in, or the temporary use of, the
Project damaged by fire or other casualty or (ii) title to or any interest in,
or the temporary use of, the Project or any part thereof shall be taken under
the exercise of power of eminent domain by any governmental body or by any
person, firm or corporation acting under governmental authority, Lessee shall be
obligated to continue to pay the amounts specified in sections 3.3 and 4.1.
Section 5.2 Application of Net Proceeds. During the Lease Term, the Net
Proceeds of any insurance proceeds or condemnation award resulting from any
events described in section 5.1 shall be payable to Lessee. Such funds or any
other funds as Lessee shall elect to utilize shall be utilized by Lessee to
promptly repair, restore, modify or improve the Project. In the event Lessee
shall fail to commence such
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repair, restoration, modification or improvement of the Project within sixty
(60) days from the date of loss, described in Section 5.1, in such manner and to
the extent that upon the completion thereof the Project, as repaired, restored,
modified or improved will continue to be a "project" within the meaning of the
Act, Lessor shall have the option to declare this Agreement in default in
accordance with Section 10.1(b), and to take such action as Lessor shall
determine in accordance with Article X.
Section 5.3 Insufficiency of Net Proceeds. In the event the Net Proceeds
are insufficient to pay in full the cost of any repair, restoration,
modification or improvement referred to in Section 5.2, then unless Lessee shall
have exercised its option to purchase the Project pursuant to the provisions of
Article XI, Lessee will nonetheless complete the work and will pay any cost in
excess of the amount of the Net Proceeds. Lessee agrees that if by reason of any
such insufficiency of the Net Proceeds, Lessee shall make any payments pursuant
to the provisions of this Section, Lessee shall not be entitled to any
reimbursement therefor from Lessor, nor shall Lessee be entitled to any
diminution of the amounts payable under Section 3.3(a) hereof.
ARTICLE VI
SPECIAL COVENANTS
Section 6.1 Quiet Enjoyment. Lessor agrees that it will defend Lessee in
the quiet enjoyment and peaceable possession of the Project from from all claims
of all persons whomsoever claiming by or through Lessor through the term of this
Agreement, so long as no default has occurred and is continuing in Lessee's
performance of the covenants, conditions and agreements to be performed by it
hereunder or so long as the period for remedying any default in such performance
shall not have expired.
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Section 6.2 Further Assurance and Corrective Instruments. Lessor and Lessee
agree that they will, from time to time, execute, acknowledge and deliver, or
cause to be executed, acknowledged and delivered, such supplements hereto and
such further instruments as may reasonably be required for carrying put the
expressed intention of this Agreement, including, without limitation, U.C.C.
financing statements, continuation-statements and termination statements.
Section 6.3 Compliance with Laws. Lessee shall promptly comply or cause
compliance with or obtain waivers of all laws, ordinances, orders, rules,
regulations, and requirements of duly constituted public authorities applicable
to the Project, at no expense to Lessor, whether or not the same are foreseen or
unforeseen, ordinary or extraordinary. Lessee shall not be required to comply or
cause compliance with such laws, ordinances, orders, rules, regulations or
requirements, so long as Lessee shall give written notice to Lessor, and at its
expense, shall be contesting the same or the validity thereof in good faith and
in accordance with applicable law. Such contest may be made by Lessee in the
name of Lessor or of Lessee, or both, as Lessee shall determine, and Lessor
agrees that it will, at Lessee's expense, cooperate with Lessee therein as
Lessee may reasonably request.
ARTICLE VII
MAINTENANCE, REPAIR, IMPROVEMENTS AND REPLACEMENT
Section 7.1 Lessee's Agreement to Maintain and Repair. Lessee shall cause
the Building to be constructed and the Equipment to be acquired and installed as
set out in Article III of this Agreement and agrees that, at its expense, it
will keep and maintain the Project in good order and condition, subject to
ordinary wear and tear. Lessee shall promptly make or cause to be made all
interior and exterior, structural and non-structural, ordinary and
extraordinary, foreseen and unforeseen repairs to the Building and the
Equipment, including the maintenance, repair and replacement necessary to keep
the Equipment installed on the Lane in good repair and operating condition to
the end that the Project is kept in good order and condition, subject to
ordinary wear and tear, whether or not such repairs are due to any laws, rules,
regulations or ordinances hereinafter enacted which involve a change of policy
on the part of the governmental body enacting the same. All replacements,
renewals, attachments and accessories made to or placed on or fixed to any part
of the Project, shall become a part of the same and the property of Lessor as
made.
Section 7.2 Additional Plant and Facilities. Lessee shall have the right to
construct on the Land any other plant and facilities other than the Building or
make any major alterations, additions or improvements without Lessor's consent
so long as such other plant, facilities, alterations, additions and improvements
shall not constitute a violation of Lessee's covenants as set forth in Section
2.2(e) of this Agreement; provided, however, subject in all respects to the
provisions of Section 4.1(b) hereof, such additional plant, facilities,
alterations, additions and improvements shall be fully subject to Ad Valorem
Property Taxes notwithstanding the fact that title to the Land is held by
Lessor.
Section 7.3 Lessor's Repairs. At Lessee's request or if a Default has
occurred and is continuing, Lessor may, but shall not be required to, rebuild or
make any repairs, replacements or renewals of any nature or description to the
Project or make any expenditure whatsoever in connection with this Agreement or
in order to maintain the Project in the condition required by this Agreement.
Lessee expressly waives the
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right contained in any law now or hereafter in effect to make any repairs at the
expense of Lessor. If Lessor shall (in its sole discretion) advance funds with
which to make such repairs, replacements, renewals or other expenditures, such
sums shall be payable by Lessee as Additional Rent hereunder, pursuant to
Section 3.3(c).
Section 7.3 Lessor's Repairs. At Lessee's request or if a Default has
occurred and is continuing, Lessor may, but shall not be required to, rebuild or
make any repairs, replacements or renewals of any nature or description to the
Project or make any expenditure whatsoever in connection with this agreement or
in order to maintain the Project in the condition required by this Agreement.
Lessee expressly waives the right contained in any law now or hereafter in
effect to make any repairs at the expense of Lessor. If Lessor shall (in its
sole discretion) advance funds with which to make such repairs, replacements,
renewals or other expenditures, such sums shall be payable by Lessee as
Additional Rent hereunder, pursuant to Section 3.3(c).
Section 7.4 Removal of Equipment. In the event Lessee determines that any
items of Equipment have become inadequate, obsolete or worn out or no longer
useful in the operation of the Project or Lessee desires to remove any Equipment
due to a process change in the facility, and if such removal thereof will not
materially interfere with the operation of the Project for the purpose of this
Agreement nor cause the Project to cease to be a "project" within the meaning of
the Act, and so long as Lessee is not in default hereunder, Lessee may remove
such items of Equipment from the Project and sell, trade-in, exchange or
otherwise dispose of the same. In the event Lessee exercises its rights under
this Section 7.4, then Lessor shall execute the appropriate bills of sale or
other documents required to facilitate Lessee's exercise of such rights.
22
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ARTICLE VIII
INSURANCE
Section-8.1 General Requirements. All insurance required hereby shall (i)
be placed with responsible insurance companies qualified to do insurance
business in the State and which shall be reasonably acceptable to Lessor, (ii)
be evidenced by certificates filed with Lessor, (iii) be in form and substance
reasonably acceptable to Lessor, (iv) contain an undertaking by the respective
insurers that such policies shall not be modified or cancelled without prior
written notice, nor without similar notice given to Lessor, and (v) provide that
the proceeds of such insurance shall be payable to Lessee.
Section 8.2 Fire and Extended Coverage. Lessee shall, at its expense, keep
the Project insured against loss or damage by fire, earthquake and other
casualty, with an extended coverage endorsement in an amount reasonable and
customary in Lessee's industry.
Section 8.3 Public Liability Insurance. Lessee shall, at its expense,
maintain comprehensive general public liability insurance naming Lessor as an
additional insured against claims for bodily injury, death or property damage
occurring on, in or about the Project in an amount of not less than
$2,000,000.00 for injury or death of a single person, $2,000,000.00 for a single
accident and $2,000,000.00 for property damage. This requirement may be met by
furnishing a certificate as evidence of more than one policy
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