HomeMy WebLinkAboutResolution No 16-2024 - Related to Property Conveyance to McCormick Company Lathrop St.RESOLUTION NO. 16-2024
A RESOLUTION OF THE CITY OF SOUTH BEND, INDIANA, BOARD OF PUBLIC
WORKS APPROVING THE TRANSFER OF PROPERTY TO MCCORMICK &
COMPANY, INC.
WHEREAS, the City of South Bend Board of Public Works ("Board") is the contracting
body for the City of South Bend, Indiana ("City"); and
WHEREAS, the Board has custody of real property owned by the City pursuant to Ind.
Code Section 36-9-6-3; and
WHEREAS, the City is the owner of a certain parcel of real estate being more particularly
described in the Quit Claim Deed, attached and incorporated herein as Exhibit 1 (the "Property");
and
WHEREAS, the City and McCormick & Company, Incorporated, a Maryland corporation
("McCormick"), entered into a certain lease agreement dated June 1, 1976 ("Lease"), attached and
incorporated herein as Exhibit 2 which afforded and incentivized McCormick's use and operation
of the Property; and
WHEREAS, pursuant to the Lease, McCormick had certain financial and other obligations
to the City; and
WHEREAS, the City committed to transfer ownership of the Property for One Dollar
($1.00) upon McCormick's successful completion of its financial and other obligations to the City,
which included the repayment of all amounts due under the original financial terms of the Lease;
and
WHEREAS, McCormick has openly and notoriously been in possession of the Property
since executing the Lease; and
WHEREAS, McCormick completed all its financial and other obligations under the Lease
in 2001; and
WHEREAS, McCormick has, at all times, been current with all property tax obligations
pursuant to the Property and improvements thereon; and
WHEREAS, the City and McCormick represent that it was an oversight which led to the
failure to properly document the conveyance of the Property to McCormick in 2001 upon
McCormick's successful completion of its financial and other obligations under the Lease; and
WHEREAS, the City wishes to convey title to the Property to McCormick via Quit Claim
Deed, attached and incorporated herein as Exhibit 1; and
WHEREAS, McCormick agrees to execute an Indemnification Agreement for the benefit
of the City as part of the conveyance of the Property, attached an incorporated herein as Exhibit 3.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY OF SOUTH BEND, INDIANA,
BOARD OF PUBLIC WORKS AS FOLLOWS:
1. The Board hereby ratifies and approves the transfer of the Property located at 3425
Lathrop Street, South Bend, Indiana 46628 to McCormick & Company, Inc. for the consideration
of One Dollar ($1.00) in recognition of McCormick's fulfillment of its obligations under a certain
lease agreement with the City dated June 1, 1976.
2. The President and Clerk of the Board of Public, or their designees, are authorized
and instructed to execute and attest, respectively, to the conveyance of the property via a Quit
Claim Deed for the benefit of McCormick & Company, Inc.
3. This Resolution will be in full force and effect upon its adoption by the Board.
ADOPTED at a meeting of the City of South Bend, Indiana, Board of Public Works
held on May 14, 2024.
CITY OF SOUTH BEND, INDIANA
BOARD OF PUBLIC WORKS
Elizabeth A. Maradik, President
Gary A. Gilot, Member
Murray L. Miller, Member
-wi
Joseph R. Molnar, Vice President
Briana Micou, Member
Attest: Theresa M. Heffner, Clerk
Date: May 14, 2024
Exhibit 1
Form of Quit Claim Deed
Exhibit 2
Lease Agreement
Exhibit 3
Indemnification Agreement
ENVIRONMENTAL INDEMNIFICATION AGREEMENT
The City of South Bend, Indiana ("City"), acting by and through its Board of Public Works
(the "Board") and McCormick & Company, Incorporated, a Maryland corporation ("McCormick"),
hereby enter into this Environmental Indemnification Agreement ("Agreement") effective as of May
14, 2024, 2024 related to activities performed in the course of business by McCormick at or on a
certain parcel of real estate with a street address of 3425 Lathrop Street, South Bend, Indiana 46628
and more particularly described in Exhibit A attached hereto ("Property").
WHEREAS, McCormick has been in sole possession of the Property since June 1, 1976; and
WHEREAS, the Board intends to convey the Property to McCormick via a quit claim deed
on the date hereof; in recognition of McCormick's successful completion of its obligations as set
forth under a lease agreement executed between the City and McCormick on June 1, 1976; and
WHEREAS, as a condition of the transfer of the Property, McCormick agrees to indemnify
the City with respect to environmental matters associated from its use of the Property from June 1,
1976 to the date of execution of this Agreement (the "Indemnification Period") in accordance with
the terms and conditions of this Agreement; and
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, McCormick and City each agrees as follows:
McCormick, at its sole cost and expense, hereby agrees to protect, defend, indemnify, release
and hold the City, its officers, agents and employees harmless from and against any and all losses,
claims, lawsuits, or judgments imposed upon or incurred by the City, whether directly or indirectly,
arising out of or in any way relating to any one or more of the following: (a) any presence of any
hazardous substances in violation of local, state or Federal environmental laws in, on, above, or
under the Property during the Indemnification Period due to the acts or omissions of McCormick or
its employees, agents or contractors; (b) any past, present or threatened release of hazardous
substances in violation of local, state or Federal environmental laws in, on, above, under or from the
Property due to the acts or omissions of McCormick or its employees, agents or contractors during
the Indemnification Period; (c) McCormick or any employee, agent or contractor of McCormick in
connection with any actual, proposed or threatened use, treatment, storage, holding, existence,
disposition or other release, generation, production, manufacturing, processing, refining, control,
management, abatement, removal, handling, transfer or transportation to or from the Property of any
hazardous substances during the Indemnification Period in violation of local, state or Federal
environmental laws applicable to the Property; and (d) any other violation by McCormick or its
employees, agents or contractors of any local, state or Federal environmental laws applicable to the
Property and the operations conducted thereon during the Indemnification Period. It is expressly
understood that the indemnity protections contemplated in this Agreement are limited to actions first
arising during the Indemnification Period.
This Agreement reflects the entire agreement of the parties hereto with respect to the subject
matter hereof. This Agreement shall be governed in all respects by the laws of the State of Indiana
without reference to its or any other state's choice of law principles or rules. Venue for any legal
proceeding arising out of this Agreement shall be exclusive to courts located in St. Joseph County,
Indiana. The parties hereto waive trial by jury in any action, proceeding or counterclaim arising out
of this Agreement. This Agreement may be executed in any number of counterparts, which may be
delivered by facsimile, PDF file or other electronic means.
The undersigned person(s) signing on behalf of McCormick certifies that he/she is duly
authorized to bind McCormick to the terms hereof.
Date: May 14, 2024
***SIGNATURE PAGE FOLLOWS***
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
CITY OF SOUTH BEND, INDIANA
BOARD OF PUBLIC WORKS
Elizabeth A. Maradik, President
Gary A. Gilot, Member
�P1
Joseph R. Molnar, Vice President
Briana Micou, Member
Murray L. Miller, Member Attest: Theresa M. Heffner, Clerk
Date: May 14, 2024
MCCORMICK & COMPANY, INCORPORATED,
a Maryland corporation
By:
Its:
Exhibit A
Legal Description of the Property
Real estate located in St. Joseph County, Indiana, and more particularly described as follows:
A PART OF THE SOUTHEAST QUARTER OF SECTION 28, TOWNSHIP 38 NORTH, RANGE
2 EAST, GERMAN TOWNSHIP, ST. JOSEPH COUNTY, INDIANA, DESCRIBED AS
FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF SAID SECTION; THENCE
NORTH 900 00' 00" WEST 990.00 FEET ALONG THE SOUTH LINE OF SAID SECTION;
THENCE NORTH 00 10' 55" EAST 40.00 FEET TO A POINT ON THE NORTH BOUNDARY
OF LATHROP STREET, SAID POINT BEING THE POINT OF BEGINNING OF THIS
DESCRIPTION; THENCE NORTH 90' 00' 00" WEST 433.81 FEET ALONG SAID
BOUNDARY; THENCE NORTH 00 05' 56" EAST 360.20 FEET; THENCE NORTH 00 16' 23"
WEST 663.77 FEET; THENCE SOUTH 450 02' 33" EAST 189.08 FEET; THENCE
SOUTHEASTERLY 342.38 FEET ALONG AN ARC TO THE LEFT HAVING A RADIUS OF
480,00 FEET AND SUBTENDED BY A LONG CHORD HAVING A BEARING OF SOUTH 65°
28' 36" EAST A LENGTH OF 335.17 FEET; THENCE SOUTH 0° 10' 55" WEST 751.26 FEET
TOTHE POINT OF BEGINNING.
Tax Parcel No. 71-03-28-476-001.000-009
County Parcel Id: 025-1010-040301
QUIT CLAIM DEED
THIS INDENTURE WITNESSETH THAT the Civil City of South Bend, acting by and through its
governing body, the Board of Public Works (the "Grantor")
CONVEYS AND QUIT CLAIMS TO McCormick & Company, Incorporated, a Maryland corporation (the
"Grantee"), for and in consideration of One Dollar ($1.00) and other good and valuable consideration, the
receipt of which is hereby acknowledged, the real estate located in St. Joseph County, Indiana, and more
particularly described below (the "Property"):
A PART OF THE SOUTHEAST QUARTER OF SECTION 28, TOWNSHIP 38 NORTH,
RANGE 2 EAST, GERMAN TOWNSHIP, ST. JOSEPH COUNTY, INDIANA,
DESCRIBED AS FOLLOWS: COMMENCING AT THE SOUTHEAST CORNER OF
SAID SECTION; THENCE NORTH 90' 00' 00" WEST 990.00 FEET ALONG THE
SOUTH LINE OF SAID SECTION; THENCE NORTH 0° 10' 55" EAST 40.00 FEET TO
A POINT ON THE NORTH BOUNDARY OF LATHROP STREET, SAID POINT
BEING THE POINT OF BEGINNING OF THIS DESCRIPTION; THENCE NORTH 90'
00' 00" WEST 433.81 FEET ALONG SAID BOUNDARY; THENCE NORTH 0° 05' 56"
EAST 360.20 FEET; THENCE NORTH 0° 16' 23" WEST 663.77 FEET; THENCE
SOUTH 450 02' 33" EAST 189.08 FEET; THENCE SOUTHEASTERLY 342.38 FEET
ALONG AN ARC TO THE LEFT HAVING A RADIUS OF 480,00 FEET AND
SUBTENDED BY A LONG CHORD HAVING A BEARING OF SOUTH 650 28' 36"
EAST A LENGTH OF 335.17 FEET; THENCE SOUTH 0° 10' 55" WEST 751.26 FEET
TOTHE POINT OF BEGINNING.
Tax Parcel No. 71-03-28-476-001.000-009
County Parcel Id: 025-1010-040301
Grantor hereby conveys the Property subject to all covenants, restrictions, easements, and other matters of
record.
The undersigned persons executing this Quit Claim Deed on behalf of the Grantor represent and certify that
each has been fully empowered and authorized to execute this Quit Claim Deed and that all action necessary
to complete this conveyance on Grantor's behalf has been duly taken.
[Signature page follows.]
Dated this - I q 'W day of May 2024.
GRANTOR:
Civil City of South Bend, acting through its Board of
Public Works
By: �&J" I I
ATTEST:
By:
STATE OF INDIANA )
) SS:
ST. JOSEPH COUNTY )
Before me, the undersigned, a Notary Public for and in said County, and State this day of
May 2024, personally appeared EJ; 7LtloI%tand s ,known to me to be,
respectively, President and Clerk of the City of South Bend, Indiana Board of Public Works, the Grantor,
and acknowledged the execution of the foregoing Quit Claim Deed.
IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed my official seal.
LAURA D. HENSLEY
Notary Public - Seal
St Joseph County - State of Indiana
Commission Number NP0732150
My Commission Expires Mar 3, 2029
Notary Publiq
lent of St. Joseph County, Widiana
m iss ion expires: ��r C ik 3 20D 1
I affirm, under the penalties for perjury, that I have taken reasonable care to redact each Social Security number in this document,
unless required by law. Michael J. Schmidt
Prepared by Micheal J. Schmidt, Assistant City Attorney, 1200 S. County -City Building, 227 W. Jefferson Blvd., South Bend,
Indiana 46601
' LEASE AGREEMENT
LEASE AGREEMENT dated as of June 1, 1976, and entered
into by and between the City of South Bend, a body corporate
and politic organized under the Constitution and laws of the
State of Indiana, party of the first part, (hereinafter
sometimes called the "Lessor"), and McCormick & Company, Incor-
porated, a corporation duly organized and existing under the
laws of the State of Maryland, party of the second part,
(hereinafter sometimes called the "Lessee"),
WITNESSETH;
NOW, THEREFORE, in consideration of the respective
representations and agreements herein contained, the parties
hereto agree as follows (provided that any obligation of the
Lessor created by or arising out of this Lease shall not be
a general debt on its part but shall be payable solely out
of the proceeds derived from this Lease, the sale of the
Bonds referred to in Section 2.1(c) hereof, and any insurance
and condemnation awards as herein provided).
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• • ailL 2S3 208
ARTICLE I
Definitions
®� "Act" means the Indiana code, 18-6-4.5.
"Additional Bonds" mean the additional parity Bonds e Lessor pursuant to the terms
authorized to be issued by th
'O'Wd conditions of section 211 of the Indenture.
` ^."Authorized Lessee Representative" means a etAuuthorrized
Lessee Representative or Representatives who,
shalj4have been designated as such in or pursuant to the
provisions of Section 4.7 hereof.
"Bond, or "Bonds" means one or more of the $3,350,000
in aggregate principal Seriesmount of Economic 1976 (McCormick) 6pment First
company,
Mortcage Revenue Bonds, if any are
Incorporated Project) and any Additional Bonds,
authorized hereunder and under the Indenture, issued and to
be issued pursuant to the Indenture.
"Bond Fund" means the Bond Fund created by Section 502
of the Indenture.
"Building" means all buildings, structuresand
factheties
net constituting part of any machinery or equipment
Project, which are required by Section 4.1(a) he�eiome exist.
acquired on the Leased Land, as they may at any
"Completion Date" means the date of acquisition or
completion of the construction of the Building and the
installation therein of any machinery or equipment
t.dateshall which
bis
to constitute a part of the project, a
certified as provided in section 4.5 hereof.
"completion period" means the period between the date
on which Bonds are first delivered to purchasers thereof and
the Completion Date. --'-
"Indenture" means the Mortgage and Indenture of Trust
between the Lessor and the Trustee of even date herewith,
including any indenture supplemental thereto, Pursuantt
which (i) the Bonds are authorized to be issued,
the Lessor's interest in this Lease, and the: rents and other
I-1
revenues receives by the Lessor from the Project, as well as
the Project itself, are to be assigned, pledged and mortgaged
as security for the payment of principal of, premium, if
any, and interest on the Bonds.
"Independent Counsel" means an attorney or a firm of
attorneys duly admitted to practice law before the highest
court of any state, which attorneys or any member of such
firm of attorneys are not officers or full-time employees of
the Lessor or the Lessee.
"Independent Engineer" means an engineer or engineering
firm qualified to practice the profession of engineering
under the laws of Indiana and who or which is not a full-
time employee of either the Lessor or the Lessee.
"Lease" means this agreement and any amendments and
supplements hereof.
"Lease Term" means the duration of the leasehold estate
created in this Lease as specified in Section 5.1 hereof.
"Leased Equipment" means those items of machinery,
equipment and related property required or permitted herein
to be acquired and installed in the Buildina, or elsewhere
on the Leased Land, with proceeds from the sale of the
Bonds, or the proceeds of any payment by the Lessee pursuant
to Section 4.6 hereof (which property is described generally
in Exhibit B attached hereto and made a part hereof, and
will be described in the instrumentsreferred to in Section
12.7 hereof), and any item of machinery and equipment and
related property acquired and installed in the Building, or
elsewhere on the Leased Land, in substitution therefor or in
addition thereto, pursuant to the provisions of Sections
4.1(b), 6.8, 7.1 and 7.2 hereof, less such machinery, equip-
ment and related property as may be released from this
Lease, pursuant to Section 6.8 of this Lease, or taken by
the exercise of the power of eminent domain as provided in
Section 7.2 of this Lease, all as they may at any time
exist, but not including the Lessee's own machinery and
equipment installed under the provisions of Sections 6.1 and
9.7 hereof.
All of Lessee's own machinery and equipment installed
under Sections 6.1 and 9.7 hereof shall be and remain identi-
fied as such by tags or other symbols affixed thereto. All
property not so indentified shall be presumed to be Leased
Equipment.
"Leased Land" means the real estate, interests in real
estate and other rights described in Exhibit A attached
hereto, and made a part hereof, and any lease supplementing
I-2
• • 900 u 299 r. zio
this Lease, together with all additions thereto and substitu-
tions therefor less such real estate, interests in real
estate and other rights as may be released from this Lease
pursuant to Sections 8.5 and 11.3 hereof, or taken by the
exercise of the power of eminent domain, as provided in
Section 7.2 of this Lease.
"Lessee" means W McCormick & Company, Incorporated, and
® its successors and assigns, and (ii) any surviving, resulting
or transferee entity as provided in Section 8.3.
"Lessor" means the City of South Bend, and its auc-
%cessors and assigns. The Lessor is referred to in the
Indenture as the "Issuer".
v
"Net Proceeds", when used with respect to any insurance
or condemnation award, means the gross proceeds from the
insurance or condemnation award with respect to which that
termgZ,,used remaining after payment of all expenses (including
attorney,"s fees and any extraordinary expenses of the Trustee),
incurredAn the collection of such gross proceeds.
"Ordinance" means the Ordinance adopted by the Lessor
which authorizes the issuance of the Bonds, and the execu-
tion and delivery of the Indenture and this Lease.
"Permitted Encumbrances" means, as of any particular
time, W liens for ad valorem taxes and special assessments
not then delinquent, (ii) this Lease, those encumbrances
permitted to exist under Section 6.2 of this Lease, and the
Indenture, (iii) utility, access and other easements and
rights -of -way, mineral rights, restrictions and exceptions
that will not materially interfere with or impair the opera-
tions being conducted in the Building (or, if no operations
are being conducted therein, the operations for which the
Building was designed or last modified by the Lessee) or
elsewhere on the Leased Land, and (iv) such minor defects,
irregularities, encumbrances, easements, rights -of -way and
clouds on title as normally exist with respect, -to properties
similar in character to the Project and as do not in the
aggregate materially impair the property affected thereby
for the purpose for which it was acquired or is held by the
Lessor, (v) mechanics' and materialmen's liens which are not
filed or perfected in the manner prescribed by' .law, as in
effect on the date hereof or otherwise and (vi) mechanics'
and materialmen's liens filed or perfected in the manner
prescribed by law which liens are presently the subject of
good faith challenge by the Lessee, except as provided in
Section 6.1 hereof.
"Project" means the Leased Land, Building and Leased
Equipment as they may at any time exist.
I-3
"Project Fund" means the Project Fund created by Section 602
of the Indenture.
"Series 1976 Bonds" means the Lessor's Series 1976 Bonds
identified in Sections 201 and 202 of the Indenture.
"Trustee" means the trustee and/or the co -trustee at the
time serving as such under the Indenture. -
(End of Article T)
I-4
•
ARTICLE II
' Representations
Section 2.1. Representations by the Lessor. The
Lessor makes the following representations as the basis for
the undertakings on its part herein contained:
(a) The Lessor is duly organized as a municipal
corporation pursuant to the laws of the State of Indiana
and has the power to enter into the transactions con-
templated by this Lease and to carry out its obliga-
tions hereunder. The Project constitutes and will
constitute "economic development facilities" within the
meaning of the Act. By proper corporate action, the
Lessor has been duly authorized to execute and deliver
this Lease.
(b) The Lessor has acquired good and marketable
title to the Leased Land, subject to Permitted Encum-
brances, and proposes to cause to be acquired and installed
the Leased Equipment in the Building or on the Leased
Land, and proposes to lease the Project to the Lessee,
and to sell the Project to the Lessee, upon Lessee's
exercise of its option to purchase the Project or at
the expiration or sooner termination of the Lease Term,
all for the purpose of promoting economic development
by inducing the Lessee to locate and operate the Project
in or near the City of South Bend, Indiana.
The Lessor agrees to use its best efforts to
procure from the appropriate state, county, municipal
and other authorities and corporations connection and
discharge arrangements for the supply of water, gas,
electricity and other utilities and sewage and indus-
trial waste disposal for the operation of the Project.
(c) To finance the cost of the Project, the
Lessor will issue the Series 1976 Bonds in the aggregate
principal amount of $3,350,000.
(d) The Bonds are to be issued under and secured
by the indenture, pursuant to which the Lessee's interest
in this Lease and the revenues and receipts derived by
the Lessor from the leasing or sale of the Project will
be pledged, and the Project will be mortgaged to the
Trustee as security for payment of the principal of,
premium, if any, and interest on the Bonds.
y", 20 , 211
Section 2.2. Re resentations b the Lessee. The
�® Lessee makes the fo lowing representations as the basis for
the undertakings on its part herein contained:
(a) The Lessee is a corporation -duly organized
under the laws of the State of Maryland and duly quali-
fied to do business in the State of Indiana, is in good
standing, has power to enter into this Lease, and by
proper corporate action has been duly authorized to
��,,•iexecute and deliver this Lease.
�� (b) Neither the execution and delivery of this
Lease, the consummation of the transactions contemplated
hereby, nor the fulfillment of or compliance with the
terms 'and conditions of this Lease, conflict with or
resultl'in a breach of any of the terms, conditions or
provisions of any corporate restriction or any agree-
ment or instrument to which the Lessee is now a party
or by which it is bound, or constitute a default under
any of the foregoing, or result in the creation or
imposition of any lien, charge or encumbrance of any
nature whatsoever upon any of the property or assets of
the Lessee under the terms of any instrument or agree-
ment.
(c) The leasing by the Lessor of the Project to
the Lessee will encourage the Lessee to locate a
manufacturing and distribution plant in or near the
city of South Send, Indiana.
(d) The Lessee intends to operate or to cause the
Project to be operated to the expiration or sooner
termination of the Lease Term as provided herein.
(End of Article II)
II-2
�Y
®a p
�•/��� ARTICLE III
Demising Clauses and Title Insurance
Section 3.1. Demise of the Project. The Lessor demises
and leases to the Lessee, and the Lessee leases from the
Lessor, the Project at the rental set forth in Section 5.3
hereof and in accordance with the provisions of this Lease,
subiect to Permitted Encumbrances.
Section 3.2. Title Insurance. The Lessor will cause
the Lessee to obtain or it title insurance in the form of
an ALTA owner -mortgagee title policy in the face amount of
$1,8751000. Any Net Proceeds payable to the Lessor under
such policy shall, at Lessee's option, be either (a) used to
acquire and construct replacement or substitute property for
that to which title has been lost and such property shall be
subjected to the lien of the.Indenture, or (b) used to
redeem Bonds on or after the first allowable ordinary redemp-
tion date as set forth in Section 301 of the Indenture.
(End of Article III)
YJV 239 ;_-,213
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mak 299 :�.214
ARTICLE IV
Commencement and Completion of the Project;
Issuance of the Bonds
ProSection 4.1. Agreement to Acquire or Construct the
,ect. Subject to the provxsxons of Section 4.6 hereof,
the Lessor agrees that:
!!s• (a) It will cause the Leased Land to be acquired
a�ndtitledinits name and either will cause the Build-
-,thereon to be acquired and titled in its name or
the Building to be constructed thereon, wholly within
the boundary lines of the Leased Land, the Building to
consistiof a building or buildings comprising manufac-
turing and distribution plant facilities; and will
construct, acquire and install other facilities and
real and personal property and easements, rights and
permits necessary for the operation of the Project, all
in accordance with plans and specifications, including
any and all supplements, amendments and additions
thereto, now or hereafter filed by the Lessee in the
office of the Lessor, and in accordance with any change
orders approved and furnished by the Lessee to the
Lessor from time to time prior to the Completion Date.
(b) It will cause to be acquired and installed in
the Building or on the Leased Land, for use of the
Lessee, the Leased Equipment, to consist of the machinery,
equipment and related property described in the general
list thereof in Exhibit B attached hereto and made a
part hereof, as such list may be modified from time to
time with the Lessor's consent, and such other items of
machinery, equipment and related property which in
Lessee's judgment may be necessary or desirable for
operation of the Project, and as shall from time to
time prior to the Completion Date be specified in
written orders from the Lessee to the Lessor, all of
which acquisitions and installations shall be made in
accordance with the Lessee's specifications and directions.
The Lessor and Lessee agree that the Lessee may undertake to
acquire, construct and equip the Project, but if by special
agreement the Lessor retains such responsibility, the Lessor
agrees that only such changes will be made in the said plans
and specifications as may be approved in writing by the
Lessee. The Lessor agrees that it will enter into, or
accept the assignment of, such contracts as the Lessee may
request in order to effectuate the purposes of this Section
IV-1
but that,it�will not execute any other contract or give any
order for.the acquisition, construction and installation of
the Project, unless and until the Lessee shall have approved
the same in writing. Also, the Lessor shall not execute any
contract for the improvement or modification of the Project
without the prior written approval of the Lessee.
The Lessor agrees to use its best efforts and to cooperate
with the Lessee to cause the acquisition and construction of
the Project to be completed with all reasonable dispatch and
in accordance with the schedule established by the Lessee.
Nothing contained in this Section shall relieve the Lessee
from making the rental payments required to be made pursuant
to Section 5.3 hereof.
Section 4.2. Agreement to Issue Bonds; Application of Bond
Proceeds. In order to provide funds for payment or reimburse-
ment of the costs of acquisition, construction and installation
provided for in Section 4.1 hereof, the Lessor agrees that
it will sell, and cause to be delivered to the purchasers
thereof, $3,350,000 aggregate principal amount of the Series
1976 Bonds.
Upon receipt of the proceeds of said sale, the Lessor
will (a) deposit in the Bond Fund a sum equal to the accrued
interest payable on the Series 1976 Bonds from their date to
the date of closing, and (b) deposit in the Project Fund the
balance of the proceeds received from said sale.
The Lessor may authorize the issuance of Additional
Bonds upon the terms and conditions provided in Section 211
of the Indenture. Additional Bonds shall be issued to
provide funds to pay or to reimburse the Lessee for costs
incurred by the Lessee for any one or more of the following:
M the costs of completing the Project, (ii) the costs of
making such additions, improvements, extensions, alterations,
equipment, acquisitions, relocations, enlargements, expan-
sions, modifications or changes in, on, or to the Project as
the Lessee may deem necessary or desirable, and as will not
impair operating unity or productive capacity or the value
of the Building as a manufacturing and distribution plant and
will be located on the lands hereinbefore described and on
additional acquired land, if necessary, and (iii) the costs
of the issuance and sale of the Additional Bonds and other
costs reasonably related to the financing as shall be agreed
upon by the Lessee and the Lessor.
If the Lessee is not in default hereunder, the Lessor
will, on request of the Lessee, from time to time, use its
best efforts to issue the amount of Additional Bonds speci-
fied by the Lessee; provided that the terms of such Additional
IV-2
a iw 2U8 215
360 299 a,�tM
Bonds, the purchase price to be paid therefor, and t e
manner in which the proceeds therefrom are to be disbursed,
® shall have been approved in writing by the Lessee; and
provided further, that the Lessee and the Lessor shall have
entered into an amendment to this Lease to provide for
additional rent in an amount at least sufficient to pay
principal and interest on the Additional Bonds when due and
i e.Lessor shall have otherwise complied with the provisions
of'Section 211 of the Indenture with respect to the issuance
of (lsuch Additional Bonds. The completed Project shall be
included under this Lease whether or not any Additional
Bond"s�trarAe issued and sold.
Section 4.3. Disbursements from the Project Fund. The
Lessor h'AN in the Indenture, authorized and directed the
Trustee to use the moneys in the Project Fund for the fol-
lowing purposes (but, subject to the provisions, of Section 4.9
hereof, for'no other Purpose)' -
(a) Payment of the initial or acceptance fee of
the Trustee; the cost of the title policy;: the fees and
expenses for recording or filing this Lease, the Inden-
ture and any other documents or instruments by which
the Project or any portion thereof is conveyed and
mortgaged and the Lease is assigned as security for the
Bonds; the fees and expenses for recording or filing
any financing statements, and title curative documents
and any other documents or instruments that either the
Lessee or counsel (who may be counsel for the Lessor)
may deem desirable to file for record in order to
perfect or protect the title of the Lessor to, and the
lien of the Indenture on, the Project or any part
thereof, and the fees and expenses in connection with
any actions or proceedings that either the: Lessee or
counsel may deem desirable to bring in order to perfect
and protect the title of the Lessor to, and the lien of
the Indenture on, the Project or any part :thereof.
i
(b) Payment to the Lessee and the Lessor, as the
case may be, of such amounts, if any, as shall be
necessary to reimburse the Lessee and the Lessor in
full for all advances and payments made or costs incurred
by them or either of them prior to or after the execu-
tion of this Lease for the costs of the preparation of
plans and specifications for the Project (including any
preliminary study or planning of the Project or any
aspect thereof); the costs of acquisition and construction
by the Lessor or Lessee of the Project including, if
1•eased Land is part of the Project, the acquisition
cost and cost of clearing and, if a Building is part of
the Project, the acquisition and/or construction and
IV-3
remodeling cost and, if machinery and equipment (Leased
Equipment) is part of the Project, the cost of acquisi-
tion and installation thereof; and the construction,
acquisition and installation necessary to provide
utility services or other facilities, including trackage
to connect the Project with public transportation
facilities, if necessary, sewage and waste disposal
facilities; and all real or personal properties deemed
necessary in connection with the Project, or any one or
more of said expenditures (including architectural,
engineering and supervisory services with respect to
any of the foregoing); provided, however, that no
reimbursement shall be made to Lessee for actual acquisi-
tion or construction costs, if any, incurred by it
prior to the passage of the inducement resolution of
the City of South Bend Economic Development Commission
relating to the Project.
(c) Payment of the legal fees and expenses;
underwriters fees and expenses; mimeographing, printing
and engraving costs incurred in connection with the
authorization, sale and issuance of the Bonds, the
preparation of this Lease, the Indenture and all other
documents in connection with the acquisition of title
to the Project.
(d) Payment for labor, services, materials and
supplies used or furnished in site improvement, if any,
and in making improvements on the Building, if any, all
as provided in the plans and specifications therefor;
payment for the cost of the acquisition of any machinery
and equipment constituting a part of the Project (Leased
Equipment) and the installation thereof; payment for
the cost of the construction, acquisition and installa-
tion of utility services, sewage and waste disposal
facilities or other facilities including trackage to
connect the Project with public transportation facilities;
and all real and personal property deemed necessary in
connection with the Project; and payment for the miscel-
laneous expenses incidental to any thereof, including
the premium on any surety bond required to be deposited
with the Trustee under any of the provisions of the
Indenture.
(e) Payment of the fees, if any, for architec-
tural, engineering and supervisory services with respect
to the Project.
(f) Payment to the Trustee, as such payments
become due, of the fees and expenses of the Trustee and
of any paying agent properly incurred under the Inden-
ture that may become due during the Completion Period,
or reimbursement thereof if paid by the Lessee.
IV-4
(g) To such extent as they shall not be paid by a
contractor for construction or installation with respect
® to any part of the Project, payment of the premiums on
all insurance required to be taken out and maintained
�during the Completion Period under this Lease, or
♦� reimbursement thereof if paid by the Lessee.
(h) Payment of any other costs and expenses
relating to the Project which would constitute a cost
0 or expense for which the Lessor may issue bonds under
the provisions of the Act.
(i) All moneys (including moneys earned pursuant
tolthe provisions of Section 4.9 hereof) remaining in
the�Project Fund after acquisition or construction of
the"Project and payment in full of the costs thereof,
and after payment of all other items provided for in
the preceding subsections (a) to (h), inclusive, of
this Section, then due and payable, shall at the written
direction of the Authorized Lessee Representative of
the Lessee be (i) used by the Trustee for purchase of
Bonds in the open market for the purpose of cancella-
tion, at prices not exceeding the principal amount
thereof plus accrued interest thereon to the date of
delivery for cancellation, or (ii) paid into the Bond
Fund for the redemption of Bonds at the earliest pos-
sible date or (iii) a combination of (i) and (ii) as is
provided in such direction, provided that amounts
approved by the Authorized Lessee Representative shall
be retained by the Trustee in the Project Fund for
payment of Project costs not then due and payable and
any balance remaining of such retained funds after full
payment of all such Project costs shall be used by the
Trustee as directed by the Lessee in the manner speci-
fied in clauses (i), (ii) and (iii) of this subsection.
Each of the payments referred to above shall be made
only upon receipt by the Trustee of a written order of the
Authorized Lessee Representative.
Before any of the payments referred to in the preceding
subsections (b), (d), (e) and (h) of this Section may be
made, the Authorized Lessee Representative shall certify
with respect to each such payment: (i) that none of the
items for which the payment is proposed to be made has
formed the basis for any payment theretofore made from the
Project Fund, and (ii) that each item for which the payment
is proposed to be made is or was reasonably necessary in
connection with the Project or the issuance of the Bonds.
In case of any contract providing for the retention by the
Lessor of a portion of the contract price, there shall be
IV-5
paid fromthe Project Fund only the net amount remaining
after deduction of any such portion. The Lessee covenants
and agrees to promptly take all necessary and appropriate
action in approving and ordering all such disbursements.
Section 4.4. Obligation of the Parties to Cooperate in
Furnishing Documents to Trustee. T e Lessee and Lessor
agree to cooperate in furnishing to the Trustee the various
documents referred to in the Lease and Indenture to effectuate
the terms thereof.
Section 4.5. Establishment of Completion Date. The
Completion Date shall be evidenced to the Trustee by a
certificate signed by the Authorized Lessee Representative
stating that, except for amounts retained by the Trustee for
Project costs not then due and payable as provided in Section
4.3(i), (i) if a Building constitutes part of the Project,
acquisition and improvements, if any, to the Building or
construction of the Building have been completed in substantial
accordance with the plans and specifications therefor, and the
purchase price, all labor, services, materials and supplies used
in making the acquisition, improvements or construction, if
any, have been paid for, (ii) all other facilities necessary
in connection with the Project have been constructed, acquired
and installed in substantial accordance with the plans and
specifications therefor and all costs and expenses incurred in
connection therewith have been paid, and (iii) if machinery
and equipment (Leased Equipment) constitutes part of the Project,
such machinery and equipment has been installed to his satis-
faction and all costs and expenses incurred in the acquisition
and installation of such machinery and equipment (Leased Equip-
ment) have been paid.
Notwithstanding the foregoing, such certificate shall
state that it is given without prejudice to any rights
against third parties which exist at the date of such certifi-
cate or which may subsequently come into being.
Section 4.6. Lessee Required toPay Project Coats in
Event Project Fund Insufficient. In the event the moneys in
the Project Fund available for payment of the costs of the
Project should not be sufficient to pay the costs thereof in
full, the Lessee agrees to deposit in the Project Fund,
moneys sufficient to pay, or to complete the Project and
pay, all that portion of the costs of the Project as may be
in excess of the moneys available therefor in the Project
Fund.
The Lessor does not make any warranty, either express
or implied, that the moneys which will be paid into the
Project Fund and which, under the provisions of this Lease,
IV-6
a6u,h 299 ,,.220
will be available for payment of the costs of the Project,
♦ �will be sufficient to pay all the costs which will be incurred
®
0 in that connection.
C��, The Lessee agrees that if after exhaustion of the
`moneys in the Project Fund the Lessee should pay, or deposit
moneys in the Project Fund for the payment of, any portion
�of;,the said costs of the Project pursuant to the provisions
of,fthis Section, it shall not be entitled to any reimburse-
ment%therefor from the Lessor or from the Trustee or from
the(hclders of any of the Bonds, nor shall it be entitled to
any diciinnution of the rents payable under Section 5.3 hereof.
Section 4.7. Authorized Lessee Representative. The
Lessee shall appoint an Authorized Lessee Representative for
the purpose of taking all actions and making all certificates
required to -be taken and made by the Authorized Lessee
Representative under the provisions of this Lease and an
alternate Authorized Lessee Representative to take any such
action or make any such certificate if the same is not taken
or made by the Authorized Lessee Representative.
In the event either of said persons, or any successor
appointed pursuant to the provisions of this Section, should
resign, become unavailable or unable to take any action or
make any certificate provided for in this Lease, another
Authorized Lessee Representative or alternate Authorized
Lessee Representative shall thereupon be appointed by the
Lessee.
If the Lessee fails to make such designation within ten
(10) days following the date when the then incumbent resigns
or becomes unavailable or unable to take any of the said
actions, the Lessor may upon written notice to the Lessee
then appoint as a successor any architect or engineer licensed
under the laws of Indiana who shall serve until an Authorized
Lessee Representative is appointed by the Lessee.
Section 4.8. Lessor and Lessee to Pursued e Remies Against
Contractors and Subcontractors an Their Suret es. In the
event of default of any contractor or subcontractor 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, the Lessor and Lessee
will promptly proceed (subject to the Lessee's advice to the
contrary), either separately or in conjunction with others,
to exhaust the remedies of the Lessor and Lessee against the
contractor, subcontractor or supplier so in default and
against each surety for the performance of such contract.
The Lessor and Lessee agree to advise the other of the steps
it intends to take in connection with any such -default.
IV-7
®& • •
17
if the Lessee shall so notify the Lessor, the Lessee
may, in its own name or in the name of the 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,
the Lessor hereby agrees to cooperate fully with the Lessee
and to take all action necessary to effect the substitution
of the Lessee for the Lessor in any such action or proceedings.
Any amounts recovered by way of damages, refunds,
adjustments or otherwise in connection with the foregoing
(a) if lessee has corrected, at its own expense, the matter
which gave rise to such default or breach, shall be paid to
the Lessee, or (b) if Lessee has not corrected, at its own
expense, the matter which gave rise to such default or
breach, shall be paid into the Project Fund unless recovered
after the Completion Date and full disposal of the Project
Fund in accordance with Section 4.3(i) hereof, in which case
thev shall be paid into the Bond Fund.
Section 4.9. Investment of Project Fund and Bond Fund
Moneys Permitted. Any moneys held as a part of the Project
Fend and Bond Fund shall at the written request of the
Authorized Lessee Representative, be invested or reinvested
by the Trustee, to the extent permitted by law in direct
obligations of the United States of America or in other
investments permitted by law. Without limiting the generality
of the foregoing, it is understood that the investments
permitted hereunder include: (i) obligations issued or
guaranteed by the United States; (ii) obligations issued or
guaranteed by any person controlled or supervised by and
acting as an instrumentality of the United States pursuant
to authority granted by the Congress of the United States;
(iii) obligations issued or guaranteed by any state of the
United States, or the District of Columbia, or any political
subdivision of any such state or District; (iv) interest
bearing accounts or certificates of deposit issued by any
bank, trust company or national banking association (including
those issued by the Trustee) which is a member 'of the Federal
Reserve System or is insured by the Federal Deposit Insurance
Corporation; (v) prime commercial paper; (vi) prime finance
company paper; (vii) bankers acceptances drawn on and accepted
by commercial banks; and (viii) repurchase agreements fully
secured by obligations of the type specified in (i) or (ii)
above. The Trustee may make any and all such investments
through its own bond department.
The investment or reinvestment shall be made so that
none of the funds shall be invested in any securities the
maturity or redemption date of which is later than the time
IV-8
2A 222
when such funds are required to be available for the purposes
hereof, if such time can be determined.
�® Lessor and Lessee jointly and severally convenant that
a the moneys held in the Project Fund and in the.Bond Fund,
%and any other amounts received by the Lessor in respect to
property directly or indirectly financed with any proceeds
of such Bonds, and proceeds from interest earned on the
investment and reinvestment of such funds and proceeds,
,shall not be invested or otherwise used in a manner which,
if such use had been reasonably expected on the date of
ia!iie of such Bonds, would have caused such Bonds to be
"arbitrage bonds" within the meaning of Section 103(d) of
the Internal Revenue Code or any of the regulations or rules
adoptedtpursuant to said Section 103(d). Any such investment
or otherwus'e shall comply with Section 103(d) of the Internal
Revenue Code.and such regulations or rules adopted pursuant
to said Section 103(d), as may be applicable.
As provided in the Indenture, any profit or loss on
account of the investments from the BondFundor Project
Fund shall be credited or charged, as the case may be, to
the fund from which the investments were made.
(End of Article IV)
IV-9
ARTICLE V
Effective Date of This Lease; Duration of
Lease Term; Rental Provisions
Section 5.1. Effective Date of This Lease; Duration of
Lease Term. This Lease shall become effective upon its
delivery, and the leasehold estate created in this Lease
shall then begin, and, subject to the provisions of this
Lease (including particularly Articles X and XI hereof),
shall expire June 1, 2001, or if all of the Bonds than have
not been fully paid and retired (or provision forsuch
payments made as provided in the Indenture), on such date as
such payment or provision for payment shall have been made.
Section 5.2. Delivery and Acceptance of Possession.
The Lessor agrees that the Lessee will have sole and exclu-
sive possession of the Project (subject to the right of the
Iessor to enter thereon for the inspection purposes and to
the other provisions of Section 8.2 hereof) on and after the
Completion Date, and the Lessee agrees to take sole and
exclusive possession of the Project upon such delivery;
provided that prior to such date for delivery of sole and
exclusive possession, the Lessee may take such possession of
all or any part of the Project as shall not interfere with
the construction or installation of any improvements to the
Project by the Lessee during the Completion Period.
The Lessor covenants and agrees that it will not take
any action, other than pursuant to Article X of this Lease,
to prevent the Lessee from having quiet and peaceable posses-
sion and enjoyment of the Project during the Lease Term and
will, at the request of the Lessee, and at the cost of the
Lessee, cooperate with the Lessee in order that the Lessee
may have quiet and peaceable possession and enjoyment of the
Project.
Section 5.3. Rents and Other Amounts Payable. Lessee
shall pay to Trustee as rent for the Project at least
two (2) business days before the first day of December, 1976,
and at least two (2) business days before the first day of
each June and December thereafter until the principal of,
premium, if any, and interest on the Bonds shall have been
paid or provision for the payment thereof shall have been
made .in accordance with the Indenture (i) if the next suc-
ceeding Bond payment date is June 1, a sum equal to the
amount payable on such date as principal of (whether at
maturity or by redemption as provided in Section 301 of the
Indenture), premium, if any, and interest on the Bonds, and
(ii) if such next succeeding Bond payment date is December 1,
Asa 2z3
V-1
HIM , 224
a sum equal to the amount payable on such date as interest
on the Bonds, as provided in the Indenture. The first rent
payment shall be sufficient when added to the capitalized
interest payment, if any, then on deposit in the Bond
Fund, to pay the interest due on that date.
Each rental payment under this Section shall at all
times be sufficient to pay the total amount of interest and
.principal (whether at maturity or by redemption as provided
; n•Section 301 of the Indenture) and premium, if any, payable
on.the next succeeding semiannual interest payment date;
provided that the Excess Amount (as hereinafter defined)
held by the Trustee in the Bond Fund on a rental payment
datesfiall be credited against the rental payment or redemp-
tion payment, if any, due on such date; and provided further,
that snblect to the provisions of the next succeeding sentence,
if at any%time the amount held by the Trustee in the Bond
Fund should::be sufficient to pay at the times required the
principal of, premium, if any, and interest of the Bonds
remaining unpaid, the Lessee shall not be obligated to make
any further rental payments under the provisions of this
Section.
Notwithstanding the provisions of the preceding sentence,
if on any interest payment date the amount held by the
Trustee in the Bond Fund is insufficient to make the then
required payments of principal (whether at maturity or by
redemption as provided in section 301 of the Indenture),
interest and premium, if any, on the Bonds on such date, the
Lessee shall forthwith pay such deficiency as rent hereunder.
The term ,Excess Amount" shall mean the amount, including
investment income, in the Bond Fund on such date in excess
of the amount required for payment of the principal of the
Bonds which have matured at maturity or on a:redemption
date, premium, if any, on such Bonds, and past due interest
in all cases where Bonds or coupons, if any, have not been
presented for payment.
The Lessee agrees to pay the Trustee until the principal
of, premium, if any, and interest on the Bonds shall have
been fully paid or provision for the payment thereof shall
have been made in accordance with the provisions of the
Indenture, (i) an amount equal to the annual fee of the
Trustee for the ordinary services of the Trustee, as Trustee,
rendered and its ordinary expenses incurred under the Inden-
ture, as and when the same becomes due, (ii),the reasonable
fees, charges and expenses of the Trustee, asBond Registrar
and paying agent as provided in the Indenture', as and when
the same become due, and (iii) the reasonable fees, charges
and expenses of the Trustee for the necessaryextraordinary
V-2
10
aervicesv`e'ndered by it and extraordinary expenses incurred
by it under the Indenture, as and when the same become due,
provided that the Lessee may, without creating a default
hereunder, withhold such payment to contest in good faith
the extra-
ordinarysexpenses and the hreasonableness ofrany ed such fees,
charges and expenses.
In the event the Lessee should fail to make any of the
payments required in this Section, the item or installment
so in default shall continue as an obligation of the Lessee
until the amount in default shall have been fully paid,
the Lessee agrees to pay the same with interest thereon at
the rate of ten percent (10%) per annum until paid. However,
the Lessee will not be required to make the rent payments
required in this Section upon the payment of or provision
having been made for the payment of the entire principal of,
e
premium, if any, and interest on the Bonds.
Section 5.4. Place of Rental Payments. The rent
provided for in Section 5.3 hereof shall be paid directly to
the Trustee for the account of the Lessor and willbe be de osited
in the Bond Fund. The additional pay
ments tothe
Trustee under Section 5.3 hereof shall be paid directly to
the Trustee for its own use or for disbursement to the
paying agents, as the case may be.
Section 5. 5. Obli ations o£ Lessee Hereunder Unconditional.
The obligations of the Lessee to make the payments required
in Section 5.3 hereof and to perform and observe the other
agreements on its part contained herein shall be absolute
and unconditional and shall not be subject to diminution by
set-off, counterclaim, aoatement or otherwise; and until
such time as the principal of, premium, if any, and interest
on the Bonds shall have been fully paid or provision for the
payment thereof shall have been made in accordance with the
Indenture, the Lessee (i) will not, subject to the provisions
of Section 9.6 hereof, suspend or discontinue, or permit the
suspension or discontinuance of, any payments provided for
in Section 5.3 hereof, (ii) will perform and observe all of
its other agreements contained in this Lease, and (iii)
except as provided in Sections 11.1 and 11.2 will not ter-
minate the Lease Term for any cause, including, without
limiting the generality of the foregoing, failure to complete
the Project, any acts or circumstances that may constitute
failure of consideration, eviction or constructive eviction,
destruction of or damaqe to the Project, commercial frustra-
tion of purpose, any change in the tax or other laws or
administrative rulings of or administrative actions by the
h
UniteStates of America or the State of Indiana or any
d
political subdivision of either, or any failure of the
Lessor to perform and observe any agreement, whether express
)13 , 225
v-3
• • M, 225
or implied, or any duty, liability or obligation arising out
of or connected with this Lease.
• 0.
Nothing contained in this Section shall be construed to
0 release the Lessor from the performance of any of the agree-
0 on its part herein contained; and in the event the
C. Lessor shall fail to perform any such agreement on its part,
`;C�he Lessee may institute such action against the Lessor as
the Lessee may deem necessary to compel performance or
`recover its damages for non-performance provided that no
suchlaction shall (i) violate the agreements on the part of
the -Lessee contained in the first sentence of this Section
5.5,W (ii) diminish the amounts required to be paid by the
Lesseeurs
ivant to Section 5.3 hereof.
f`l
The Lessee may, however, at its own cost and expense
and in its own name or in the name of the Lessor, prosecute
or defend any action or proceeding or take any other action
involving third persons which the Lessee deems reasonably
necessary in order to secure or protect its right of posses-
sion, occupancy and use hereunder; and in such event, the
Lessor hereby agrees to cooperate fully with the Lessee and
to take all action necessary to effect the substitution of
the Lessee for the Lessor in any such action or proceeding
if the Lessee shall so request.
(End of Article V)
V-4
ARTICLE VI
Maintenance, Taxes and Insurance
Section 6.1. Maintenance and Modifications aof
Project
by Lessee. The Lessee agrees that during the Lese Term it
will, at its own expense, (i) keep the Project in as reason-
ably safe condition as its operations shall permit, and (ii)
keep the improvements constituting a part of the Project in
good repair and in good operating condition, making from
time to time all necessary repairs thereto (including external
and structural repairs) and renewals and replacements thereof.
The lessee may, also at its own expense, make from time
to time any additions, modifications or improvements to the
Project which it may deem desirable for its businesspurposes
that do not adversely affect the structural integrity of the
Building or substantially reduce its value provided that all
such additions, modifications and improvements to the Building
shall be located wholly within the boundary lines of the
Leased Land, except as provided in Section 11.7 hereof.
All such additions, modifications and improvements sn
made by the Lessee shall become a part of the Project,
except for building additions made pursuant to Section 11.7
hereof and except for any personal property, machinery,
equipment or furniture installed and paid for by the Lessee
which does not become an integral part of the existing
machinery and equipment of the Project. Such personal
property, machinery, equipment or furniture which has not
become part of the Project may be removed by the,Lessee at
any time and from time to time provided that any damage to
the Project occasioned ty such removal shall be repaired by
the Lessee at its own expense.
The Lessee will not permit any mechanic's lien, security
interest or other encumbrance to remain against the Project,
or any part thereof for labor or materials furnished in
connection with any additions, modifications, improvements,
repairs, renewals or replacements so made by it; provided,
that if the Lessee shall first notify the Trustee of its
intention so to do, the Lessee may in good faith contest any
mechanics' or other liens filed or established against the
Project, and in such event may permit the items so contested
to remain undischarged and unsatisfied during the period of
such contest and any appeal therefrom, unless the Lessor or
the Trustee shall notify the Lessee that, in the opinion of
227
VI-1
0 0 9 228
2(:
Independent Counsel, by non-payment of any such items the
lien of the Indenture as to any part of the Project will be
materially endangered or the Project or any part thereof
will be subject to loss or forfeiture, in which event the
Lessee shall promptly Pay and cause to be satisfied and
discharged all such unpaid items. The Lessor will, at the
expense of the Lessee, cooperate fully with the Lessee in
"any such contest.
Section 6.2. Taxes, Other Governmental Charges and Utility
Char es. The Lessee will promptly pay, as the same become
uell taxes and governmental charges of any kind whatsoever
that_may at any time be lawfully assessed or levied against
or wi£horespect to the Project or any interest therein or
any machinery, equipment or other property installed or
brought4Sy',the Lessee the
or thereon (including, without
limiting the generality of the foregoing, any taxes levied
upon or with respect to the revenues, income or profits of
the Lessee from the Project which, if not paid, will become
a lien on the Project prior to or on -a paritywith the lien
of the Indenture or a charge on the revenues
and receipts
therefrom prior to or on a parity with the charge thereon
and the pledge or assignment thereof to be created and made
in the Indenture, and including all ad valorem taxes lawfully
assessed upon the land described in Exhibit A.attached
hereto and made part hereof) all utility and other charges
incurred in the operation, maintenance, use, occupancy and
upkeep of the Project and all assessments and charges lawfully
made by any governmental body for public improvements that
may be secured by lien on the Project or on the land described
in Exhibit A attached hereto and made a part hereof; provided,
that with respect to special assessments or other governmental
charges that may lawfully be paid in installments over a
period of years, the Lessee shall be obligated to pay only
such installments as are required to be paid during the
Lease Term.
The Lessee may, at its expense and in its own name and
behalf or in the name and behalf of the Lessor, 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,
provided during such period enforcement of any such contested
item shall be effectively stayed. The Lessor:, at the expense
of the Lessee, will cooperate fully with the Lessee in any
such contest.
In the event that the Lessee shall fail to pay any of
the foregoing items required by this Section to be paid by
the Lessee, the Lessor or the Trustee may (but shall be
VI-2
under no`Obligation to) pay the same, provided that at least
ten days prior written notice of the intent to make such
payment is given to Lessee, and any amounts so advanced
therefor by the Lessor or the Trustee shall become an addi-
tional obligation of the Lessee to the one making the advance-
ment, which amounts, together with interest thereon at the
rate of six per cent (6%) per annum from the date thereof,
the Lessee agrees to pay.
Section 6.3. Insurance Required. During the Completion
Period and throughout the Lease Term, the Lessee shall keep
the Project continuously insured and pay, as the same become
due, all premiums in respect to:
(a) Insurance against loss or damage by fire and
lightning with extended coverage endorsement, limited
only as may be provided in the standard form of extended
coverage endorsement at the time in use in Indiana, in
the amount of at least eighty per cent (808) of the
insurable actual cash value of the Project (with deduc-
tible provisions not to exceed $100,000 in any one
casualty), provided that such insurance need net be
taken out until the installation or construction of the
Project has commenced, or materials for such construc-
tion or installation have been stored on the Leased
Land.
(b) Boiler explosion insurance on steam boilers,
pressure vessels and pressure piping in an amount not
less than Two Hundred Thousand Dollars ($200,000) (with
deductible provisions not to exceed Fifty Thousand
Dollars ($50,000)), provided that such insurance need
not be taken out until the steam boilers, pressure
vessels and pressure piping have been installed in the
Project.
(c) Insurance to the extent of One million Dollars
($1,000,000) per occurrence against liability for
bodily injury, including death resulting therefrom, and
damage to property including loss of use thereof,
occurring on or in any way related to the Project or
any part thereof.
Section 6.4. Application of Net Proceeds of Insurance.
The Net Proceeds of the insurance carried pursuant to the
provisions of Section 6.3(a) and (b) hereof shall be received
by the Lessee and shall then be paid and applied as provided
in Section 7.1 hereof, and the Net Proceeds of insurance
carried pursuant to the provisions of Section 6.3(c) hereof
shall be applied toward extinguishment or satisfaction of
the liability with respect to which such insurance proceeds
have been paid.
2' 9 229
VI-3
• • .2(9 230
Section 6.5. Additional Provisions Respecting Insurance.
�® All insurance required byction 6. Se3 hereof shall be taken
out and maintained in generally recognized responsible
insurance companies selected by the Lessee. All policies
covering loss or damage tc the Building and the Leased Equip-
�ment shall provide for payment to the Lessor, the Lessee and
,the Trustee, as their respective interests may appear; and
,Gfie policies required by Section 6.3(a) and 6.3(b) shall
contain standard mortgagee clauses requiring that all Net
Pioceeds resulting from any claim in excess of $100,000 for
loss,or damage covered thereby be paid to the Trustee;
provided, however, that all claims, regardless of amount,
may bejadjusted by the Lessee with the insurers, subject to
approval!of the Trustee or Lessor to the extent that their
interests may appear as to any settlement of any claim in
excess of,0$100,000. The policies required by Section
6.3(c) shall include the Lessor as an insured.
A certificate, or certificates, of the insurers that
the insurance required by Section 6.3(a), 6.3(b) and 6.3(c)
is in force and effect shall be deposited with the Trustee,
and prior to the expiration of any such policy, the Lessee
shall furnish the Trustee with evidence satisfactory to the
Trustee that the policy has been renewed or replaced, or is
no longer required by this Lease. The insurance herein
required may be contained in blanket poii�cies now or here-
after maintained by the Lessee.
section 6.6. Advances b Lessor or.Trustee. In the
event the Lessee sha ail to maintain the full insurance
coverage required by this Lease, or shall . fail to keep the.
Project in as -reasonably safe condition as its operating
condition will permit, or shall fail to keep the Building
and the Leased Equipment in good repair and good operating
condition, the Lessor or the Trustee may (but shall be under
no obligation to) take out the required policies of insurance
and pay the premiums on the same or make the required repairs,
renewals and replacements; and all amounts..sc advanced
therefor by the Lessor or the Trustee shall become an addi-
tional obligation of the Lessee to the one making the advance-
ment, which amounts, together with interest thereon at the
rate of six per cent (66) per annum from the date thereof,
the Lessee agrees to pay.
Section 6.7. Workmen's Compensation Coverage. During
the Completion Period and throughouL t the ease Term, the
Lessee shall self insure, maintain, or cause to be maintained,
in connection with the Project, the Workmen's Compensation
protection required by the Laws of the State; of Indiana.
VI-4
�0 •
Secti1
on 6.8. Removal of Leased Equipment. The Lessor
shall not>be under any obligation to renew, repair or replace
any inadequate, obsolete, worn out, unsuitable, undesirable
or unnecessary Leased Equipment. In any instance where the
Lessee in its sound discretion determines that any items of
Leased Equipment have become inadequate, obsolete, worn out,
unsuitable, undesirable or unnecessary, the Lessee may
remove such items of Leased Equipment from the Building and
the Leased Land and (as a whole or in part) without any
responsibility or accountability to the Lessor or the Trustee
therefor, provided that the Lessee:
(a) Substitutes (either by direct payment of the
costs thereof or by advancing to the Lessor the funds
necessary therefor) and installs anywhere in the Building
or on the Leased Land other machinery or equipment
having equal or greater value (but not necessarily
having the same function) in the operation of the
Building as a manufacturing and distribution plant, all
of which substituted machinery or equipment shall be
free of all liens and encumbrances (other than Permitted
Encumbrances) but shall become a part of the Leased
Equipment; or
(b) (i) in the case of the sale of any such
equipment to anyone other than itself or in the case of
the scrapping thereof, the Lessee shall pay into the
Bond Fund the proceeds from such sale or the scrao
value thereof, as the case may be, (i i) in the case of
the trade-in of such equipment for other equipment not
to be installed in the Building or on the Leased Land,
the Lessee shall pay into the Bond Fund the amount of
the credit received by it in such trade-in, and (iii)
in the case of the sale of any such equipment to the
Lessee or a related company, the Lessee shall pay into
the Bond Fund an amount equal to the original cost
thereof to the Lessee less depreciation at rates cal-
culated in accordance with generally accepted accounting
practice.
In the event that Lessee prior to such removal of items
of Leased Equipment from the Building and the Leased Land
has acquired and installed machinery or equipment with its
own funds which has become an integral part of the Leased
Equipment, Lessee may take credit to the extent of the
amount so spent by it against the requirement that it either
substitute and install other machinery and equipment having
equal or greater value or that it make payment into the Bond
Fund, providing that the provisions of this Section shall
not relieve the Lessee of its obligations under the first
sentence of Section 6.1 hereof.
2is9 ..231
2S3 232
'1'be removal from the Project of any portion of the
Leased 1'.uuipmont pursuant to the provisions of this Section
shall not entitle the 1•cssee to any abatement or diminution
�00
of the rents payable under Section 5.3 hereof.
00�The 1•essee will promptly report to the Trustee each
♦" such rcmeva1, substitution, sale or other disposition of any
`-item of Leased Equipment having a depreciated value (cal
-
'ulated in accordance with generally accepted accounting
gpractice) of more than $5,000 and will pay to the Trustee
s u'ch amounts as are required by the provisions of the preceding
subsection (b) of this Section to be paid into the Bond Fund
prompt-ly after the sale, trade-in or other disposition
requi}�^g such payment; provided, that no such report and
paymentW,n_,ecd be made until the amount to be paid into the
Bond FundSon account of all such sales, trade-ins, or other
disposition not previously reported aggregates ;at least
$150,000.4P'
The Lessee will pay any costs (including counsel fees)
incurred in subjecting to 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 Lcased•Eguipment.
The I•essee will not remove, or permit the Removal of,
any of the Leased Equipment from the Leased Land except in
accordance with the provisions of this Section..',
(End of Article VI)
VI-6
". ARTICLE VII
Damage, Destruction and Condemnation
Section 7.1. Damage and Destruction. Unless the
Lessee shall have exercised its option to purchase pursuant
to the provisions of Section 11.2(a) hereof, if prior to
full payment of the Bonds (or provision for payment thereof
having been made in accordance with the provisions of the
Indenture) the Project is destroyed (in whole or in part) or
is damaged by fire or other casualty to such extent that the
claim for loss under the insurance policies required to be
carried pursuant to Section 6.3(a) and (b) hereof resulting
from such destruction or damage is not greater than $100,000,
the Lessee, or the Lessor, at the Lessee's direction and
expense, (i) will promptly repair, rebuild or restore the
property damaged or destroyed to substantially the same
condition as it existed prior to the event causing such
damage or destruction, with such changes, alterations and
modifications (including the substitution and addition of
other property) as may be desired by the Lessee and as will
not impair productive capacity or the character of the
Project as a manufacturing and distribution plant, and (ii)
will apply for such purpose so much as may be necessary of
any Net Proceeds of insurance resulting from such claims for
losses, as well as any additional moneys of the Lessee
necessary therefor. All Net Proceeds of insurance resulting
from such claims for losses not in excess of $100,000 shall
be paid to the Lessee.
Unless the Lessee shall have exercised its option to
purchase pursuant to the provisions of Section 11:2(a)
hereof, if prior to full payment of the Bonds (cr.provision
for payment thereof having been made in accordance with the
provisions of the Indenture) the Project is destroyed (in
whole or in part) or is damaged by fire or other casualty to
such extent that the claim for loss under the insurance
policies required to be carried pursuant to Section 6.3(a)
and (b) hereof resulting from such destruction or damage is
in excess of $100,000, the Lessee shall promptly give written
notice thereof to the Trustee.
All Net Proceeds of insurance resulting from such
claims for losses in excess of $100,000 shall be paid to and
held by the Trustee in a separate trust account, whereupon
(i) the Lessee, or the Lessor, at the Lessee's direction,
will proceed promptly to repair, rebuild or restore the
property damaged or destroyed to substantially the same
condition as it existed prior to the event causing such
damage or destruction, with such changes, alterations and
VII-1
. 2°9
modifications (including the substitution and addition
of other property) as may be desired by the Lessee and as
will not impair productive capacity or the character of the
�Project as a manufacturing and distribution plant, and (ii)
®
0 the Trustee will apply so much as may be necessary of the
Net Proceeds of such insurance to payment of the costs of
such repair, rebuilding or restoration, either on completion
thereof or as the work progresses as directed by the Lessee.
11 In the event said Net Proceeds are not sufficient to
pay.in full the costs of such repair, rebuilding or restora-
tion1the Lessee will, nonetheless, complete the work thereof
and"wi1•1 pay that portion of the costs thereofin excess of
the amount of said Net Proceeds, or will advance to the
Lessor,or',the Trustee the moneys necessary to complete said
work, in which case the Lessor will proceed sa to complete
said wor)e�J
Any moneys held by the Trustee in the separate trust
account under the provisions of the preceding paragraph
shall, at the written request of the Authorized Lessee
Representative, be invested or reinvested by the Trustee in
investments enumerated in Section 4.9 hereof. The Lessee
shall forthwith pay to the Trustee the amount of any net
losses with respect to principal on such investments.
Any balance of such Net Proceeds remaining after payment
of all the costs of such repair, rebuilding or restoration
shall be paid into the Bond Fund. If the Lessee shall so
direct the Lessor in writing within ninety (90) days following
the payment of any such Net Proceeds into the Bond Fond, the
Lessor shall cause such Diet Proceeds, or such part thereof
as the Lessee shall direct, to be applied by the Trustee to
the redemption, at the earliest possible date„ of the Bonds
at the principal amount thereof plus accrued interest to the
redemption date. If the Bonds have been fully.paid (or
provision for the payment thereof has been made in accordance
with the Indenture), all Net Proceeds will be paid to the
Lessee.
The Lessee shall not, by reason of the payment of such
excess coats (whether by direct payment thereof or advances
to the Lessor or Trustee therefor), be entitled to any
reimbursement from the Lessor, the Trustee, or the holders
or owners of the Bonds, or any abatement or diminution of
the rents payable under Section 5.3 hereof.
Section 7.2. Condemnation. Unless the Lessee shall
have exercised its option to purchase pursuant:to the provi-
sions of Section 11.2(b) hereof, in the event that title to,
:234
VII-2
or the temporary use of, the Project or the leasehold estate
of the Lessee in the Project created by this Lease or any
part of either thereof shall be taken under the exercise of
the power of eminent domain by any governmental body or by
any person, firm or corporation acting under governmental
authority, the Lessee shall be obligated to continue to make
the rental and all other payments specified in Section 5.3
hereof. The Lessor, the Lessee and the Trustee will cause
the Net Proceeds received by them or any of them from any
award made in such eminent domain proceedings, to be paid to
and held by the Trustee in a separate trust account, to be
applied in one or more of the following ways as shall be
directed in writing by Lessee:
(a) The restoration of the improvements located
on the Leased Land to substantially the same condition
as they existed prior to the exercise of the said power
of eminent domain.
(b) The acquisition, by construction or otherwise,
by the Lessor of other improvements suitable for the
Lessee's operations on or adjacent to the site of the
Project (which improvements shall be deemed a part of
the Project and available for use and occupancy by the
Lessee without the payment of any rent other than as
herein provided to the same extent as if such other
improvements were specifically described herein and
demised hereby); provided, that such improvements shall
be acquired by the Lessor subject to no liens or encum-
brances prior to the lien of the Indenture, other than
Permitted Encumbrances.
(c) Redemption of any of the Bonds together with
accrued interest thereon to the date of redemption;
provided, that no part of any such condemnation award
may be applied for such redemption, unless (i) all of
the Bonds are to be redeemed in accordance with the
Indenture upon exercise of the option to purchase pro-
vided for by Section 11.2(b) hereof, or (ii) in the
event that less than all of the Bonds are to be redeemed,
the Lessee shall furnish to the Lessor and the Trustee
a certificate of an Independent Ergineer acceptable to
the Lessor and the Trustee stating (i) that the property
forming a part of the Project that was taken by such
condemnation proceedings is not essential to the Lessee's
use or occupancy of the Project, or (ii) that the
Project has been restored to a condition substantially
equivalent to its condition prior to the taking by such
condemnation proceedings, or (iii) that improvements
have been acquired which are suitable for the Lessee's
operations at the Project as contemplated by the fore-
going subsection (b) of this Section.
2A ..235
VII-3
. 2TJ 236
Unless the Lessee shall have exercised its option to
purchase, pursuant to the provisions of Section 11.2(b)
hereof within ninety (90) days from the date of entry of a
final order in any eminent domain proceedings granting
condemnation, the Lessee shall direct the Lessor and the
Trustee in writing as to which of the ways specified in this
!Section the Lessee elects to have the condemnation award
rapplied. Ary balance oard in
f the Net Proceeds of aidt into he wthe Bond
,'such eminent domain proceedings shallabe (or provision for
Fund. If the Bonds have been fully p P
payment thereof has been a1leNet Proceedsin willbewith tpaidhe r�voi-
sion�of the Indenture),
the Lee.
%Anjjmoneys held by the Trustee under the provisions of
the preceii`iag paragraph shall, at the written request of the
Authorizeditessee Representative, be invested or reinvested
by the Trustee in investments enumerated in Section 4.9
hereof. The Lessee shall forthwith pay to the Trustee the
amount of any net losses with respect to principal on such
investments.
The Lessor shall cooperate fully with the Lessee in the
handling and conduct of any prospective or pending condemna-
tion Proceedings with respect to the Project or any part
thereof and will, to the extent it may lawfully do so,
permit the Lessee to litigate in any such proceedings in the
name and behalf of the Lessor. In no event will the Lessor
voluntarily settle, or consent to the settlement of, any
prospective or pending condemnation proceeding with respect
to the Project or any part thereof without the written
consent of the Lessee.
Section 7.3. Condemnation of Lessee -owned Propert .
The Lessee shall also be entitled to the Net .Proceeds of any
condemnation award or portion thereof made for damages to or
takings of its own property not included in the Project;
provided, that any Net Proceeds resulting from damages to or
taking of all or a portion of the leasehold estate of the
Lessee in the Project created by this Lease shall be paid
Section 7.2 hereof,
and applied in the manner provided in S
except that Lessee shall be entitled to any such Net Proceeds
representing damages on account of the taking of ore inter-
ference with the Lessee's rights to possession,
or
occupancy of the Project.
(End of Article VII) .
VII-4
ARTICLE VIII
Special Covenants
Section 8.1. No Warranty of Condition or Suitability by
the Lessor. The Lessor makes no warranty, either express or
implied, as to the condition of the Project, or any part
thereof, or that it will be suitable for the Lessee's purposes
of needs.
Section 8.2. Lessor's Right of Access to the Project.
The Lessee agrees that the Lessor, the Trustee and their or
either of their duly authorized agents shall have the right
at all reasonable times during business hours, subject to
Lessee's safety and security requirements, to enter upon the
Leased Land and to examine and inspect the Project without
interference or prejudice to the Lessee's operation.
The Lessee further agrees that the Lessor and its duly
authorized agents shall have such rights of access to the
Project as may be reasonably necessary to cause to be completed
the construction and installation provided for in Section
4.1 hereof, and thereafter for the proper maintenan:e of the
Project, in the event of failure by the Lessee to perform
its obligations under Section 6.1 hereof.
Section 8.3. Lessee to Maintain its Cor orate Existence;
Conditions Under WhichExceptions Permute The Lessee
agrees that during the Lease Term it will maintain its
corporate existence, will not dissolve or otherwise dispose
of all or substantially all of its assets, and will not
consolidate with or merge into another corporation, or
permit one or more other corporations to consolidate with or
merge into it; provided, that the Lessee may, without violating
the agreement contained in this Section (a) consolidate with
or merge into another corporation, or permit one or more
other corporations to consolidate with or merge into it,
provided the surviving or resulting corporation, as the case
may be, is organized under the laws of one of the states of
the United States and assumes in writing all of the obliga-
tions of the Lessee herein, or (b) transfer to another
corporation organized under the laws of one of the states of
the United States all or substantially all of its assets as
an entirety and thereafter dissolve if the corporation to
which such transfer shall be made expressly assumes in
writing all of the obligations of the Lessee herein.
Section 8.4. Qualification in Indiana. The Lessee
covenants that throug out the Lease Term 1t will be organized
under the laws of the State of Maryland, and be duly qualified
to do business in Indiana.
�J ,2J7
209 .,; 238
section 8.5. Granting of Easements. If .no event of
default shall have happened and be continuing; the Lessee
may at any time or times grant easements, licenses, rights -
of -way (including the dedication of public highways) and
other rights or privileges in the nature of easements with
respect to any property included in the Indenture, free from
the lien of the Indenture, or Lessee may release existing
easements, licenses, rights -of -way or other rights or privi-
leges with or without consideration, and the Lessor agrees
that it shall execute and deliver and will cause and direct
the Trustee to execute and deliver any instrument necessary
;or appropriate to confirm and grant or release any such
'easement, license, right-of-way or other right or privilege
`wpon receipt of: (i) a copy of the instrument of grant or
release, (ii) a written application signed by .an authorized
off%�er of the Lessee requesting such instrument, and (iii)
a certificate executed by the Authorized Lessee Representative
statiFngl�(I that such grant or release is not detrimental to
the probusiness of the Lessee, and
per conduct of the
(2)
that such* ant or release will not impair the effective use
or interfere with the operation of the Project and will not
materially.weaken, diminish or impair the security intended
to be given by or under the Indenture.
Section 8.6. Release and Irdemn ification Covenants.
The Lessee releases the Lessor from an covenants and agrees
that the Lessor shall not be liable for; and to indemnify
and hold the Lessor harmless against, any loss or damage to
property or any injury to or death of any person occurring
on or about or resulting from any defect in any part of the
Project or the other improvements on the Leased Land; provided,
that the indemnity provided in this sentence sha11 be effective
only to the extent of any loss that may be sustained by the
Lessor in excess of the Net Proceeds received from any
insurance carried with respect to the loss sustained, and
provided further, that the indemnity shall not be effective
for damages that result from sole negligence.or intentional
acts on the part of the Lessor. To this end,.the Lessee
will provide for and insure, in the public liability policies
required in subsection (c) of Section 6.3 hereof, not only
its own liability in respect of the matters there mentioned
but also the liability herein assumed.
Whenever under the provisions of this Lease the approval
of the Lessee is required, or the Lessor is required to take
some action at the request of the Lessee, such approval or
such request shall be made by the Authorizedl essee Representa-
tive, unless otherwise specified in this Lease; and the
Lessor or the Trustee shall be authorized to.aet on any such
approval or request, and the Lessee shall have no complaint
against the Lessor or the Trustee as a result of any such
action taken.
VIII-2
ction 8.7. Tax Bxlm t Status of Bonds. The Lessee
Seor
further covenants that it will not take an action which,
fail to take any action which failure will causethe interest
on the Bonds to become subject to federal income taxes
pursuant to the provisions oOOfstheBonds
l3are out:etandingrnal
Revenue Code so long as any
under the Indenture; provhalon
ided, that the Lessee Aofthe
have violated this covenant if the interest on any
Bonds becomes taxable to a personwho
ursuant is a stosthetprovisions
of the project or a related personP
of Section 103(c)(7) of the Internal Revenue Code.
(—A of Artl.Cle VIII)
•
ARTICLE IX
Assignment, Subleasing, Mortgaging and Selling;
Redemption; Rent Prepayment and Abatement
Section 9.1. Assignment and Sreasin . This Lease
may be assigned in whole or in part, and the Project may be
subleased as a whole or in part, by the Lessee without the
necessity of obtaining the consent of either the Lessor or
the Trustee, subject, however, to each of the following
conditions:
(a) No assignment (other than pursuant to Section
8.3 hereof) shall relieve the Lessee from primary
liability for any of its obligations hereunder; and in
the event of any such assignment, the Lessee shall con-
tinue to remain primarily liable for payment of the
rents specified in Section 5.3 hereof and for perfor-
mance and observance of the other covenants, warranties,
representations and agreements on its part herein pro-
vided to be performed and observed by it to the same
extent as though no assignment had been made.
(b) The assignee or sublessee shall assume the
obligations of the Lessee hereunder to the extent of
the interest assigned or subleased.
(c) The Lessee shall, within thirty (30) days
after the delivery thereof, furnish or cause to be
furnished to the Lessor and to the Trustee a true and
complete copy of each such assignment, assumption of
obligations and sublease, as the case may be.
Section 9.2. Mortgaging of Project by Lessor. The
Lessor shall mortgayc cne Project, and shall assign its
interest in and pledge any moneys receivable under this
Lease, to the Trustee pursuant to the Indenture as security
for payment of the principal of and interest on the Bonds,
but each such mortgage, assignment or pledge shall be subject
and subordinate to this Lease.
Section 9.3. Restriction on Sale of Project by Lessor.
The Lessor agrees that, except as set forth in Section V
hereof or other provisions o£ this Lease or the Indenture,
it will not sell, convey, mortgage, encumber or otherwise
dispose of any part of the Project during the Lease Term or
Option period after expiration of the Lease Term.
Section 9.4. Redemption of Bonds. If the i,essee is
not in default in the payment of rent under Section 5.3
hereof, the Lessor, at the request at any time of the Lessee,
IX-1
�® and if the same are then callable, shall forthwith take all
steps that may be necessary under the applicable redemption
�r/� provisions of the Indenture to effect redemption of all'or
part of the then outstanding Bonds, as may be specified by
the Lessee, on the earliest redemption date on which such
�fe"demption may be made under such applicable provisions.
011-ction 9.5. Prepayment of Rents. There is expressly
reserved to the Lessee the right, and the Lessee is authorized
and permitted, at any time it may choose, to prepay all or
any part' of the rents payable under Section 5.3 hereof; and
the Lessee agrees that the Trustee may accept such prepayment
of rents/when the same are tendered by the Lessee. All
rents so piepaid shall be credited on the rentalpayments
specified in Section 5.3 hereof, in the order of their due
dates, and at the election of the Lessee shall be used for
the optional redemption of outstanding Bonds in the manner
and to the extent provided in Section 301_of the Indenture.
Section 9.6. 'Lessee Entitled to Certain Rent Abatements if
Bonds Paid Prior to Maturity. If at any time the aggregate
moneys in the Bond Fund shall be sufficient to retire in
accordance with the provisions of the Indenture all of the
Bonds at the time outstanding, and to pay all fees and
charges of the Trustee and any paying agents due or to
become due through the date on which the last of the Bonds
is retired, under circumstances not resulting in termination
of the Lease Term, and if the Lessee is not the time
otherwise in default hereunder, the Lessee 'shall he entitled
to use and occupy the Project from the date on which such
aggregate moneys are in the hands of the Trustee to and
including the end of the Lease Term; without the payments of
rent during that interval (but otherwise'onl'.the terms and
conditions hereof).
Section 9.7. Installation of Lessee's.Own Machinery and
E ui men�t. In addition to Te mac finery an equipment
installed by the Lessee under the provisions of Section 6.1
hereof which does not become an integral:part-of the machinery
and equipment of the Project thereunder, the�Lessee may from
time to time, in its sole discretion and at its own expense,
install additional machinery and equipment in the Building
or on the Leased Land.
All machinery and equipment so installed by the Lessee,
unless it is provided as substitute equipment pursuant to
Section 6.8 hereof, shall remain the sole property of the
Lessee in which neither the Lessor nor the T�xustee shall
have any interest, may be modified or removed at any time,
and shall not be subject to the lien of the 6ndenture.
IX-2
T�L'essee shall tag or otherwise suitably identify,
without expense t4 the Lessor, all tangible personal property
constituting the sole property of the Lessee and not con-
stituting a part of the machinery or equipment of the Project,
so as to indicate the lack of any interest of the Lessor and
the Trustee therein.
Section 9.8. References to Bonds ineffective After Bonds
Paid. Upon payment in full of the Bonds (or provision for
payment thereof having been made in accordance with the
provisions of the Indenture), and all fees and charges of
the Trustee and any paying agents, all references in this
Lease to the Bonds, and the Trustee, and any paying agents
shall be ineffective and neither the Trustee nor the holders
of any of the Bonds or coupons, if any, shall thereafter
have any rights hereunder, saving and excepting those that
shall have theretofore vested.
(End"of Article IX)
_,'w 299 . ;.; 241
IX-3
ARTICLE X
Events of Default and Remedies
Section 10.1. EventsofDefault Defined. The following
1 be "events of default" under this Lease, and the terms
nts of default" or "default" shall mean, whenever they
used in this Lease, any one or more of the following
�° a
(a) Failure by the Lessee to pay, the rents required
toabe paid under Section 5.3 hereof at the times speci-
fied�therein, and continuation of said failure for a
period of two (2) days.
(b) Failure by the Lessee to observe and perform
any covenant, condition or agreement on its part to be
observed or performed, other than as referred to in
subsection (a) of this Section, for a'period of thirty'
(30) days after written notice, to Lessee,, specifying
such failure and requesting that it beremedied, given
to the Lessee by the Lessor or the Trustee, unless the
Lessor and the Trustee shall agree in writing to an
extension of such time prior to its expiration. If a
failure under this Section 10.1(b) be such that it
cannot be corrected within the applicable period, it
shall not constitute an event of default if corrective
action is instituted by the Lessee within the applicable
period and diligently pursued until the failure is
corrected as provided in Section 1013 of the indenture.
(c) The dissolution or liquidation of the Lessee,
or the filing by the Lessee of voluntary petition in
bankruptcy, or failure by the Lessee prtimptly to lift
any execution, garnishment or attachment of such conse-
quence as will impair its ability to carry on its
operations at the Project or the commission by the
Lessee of any act of bankruptcy, oradjudicationof the
Lessee as a bankrupt, or assignment by the Lessee for
the benefit of its creditors, or the entry by the
Lessee into an agreement of compositionwith its creditors,
or the approval by a court of competent..jurisdiction of
a petition applicable to the Lessee .in any proceeding
for its reorganization instituted under;the provisions
of the general bankruptcy act, as 'amende'd, or under any
similar act which may hereafter be enacted.
The term "dissolution or liquidatiojn of the Lessee",
as used in this subsection, shall not beconstrued to
include the cessation of the existence of the Lessee
1.
X-1
resulting either from a merger or consolidation of the
Lessee into or with another entity or a dissolution or
liquidation of the Lessee following a transfer of all
or substantially all of its assets as an entirety,
under the conditions permitting such actions contained
in Section 8.3 hereof. A default under this Section
10.1(c) shall not constitute an event of default so
long as the payments called for in Article V hereof are
made.
Section 10.2. Remedies on Default. Whenever any event
of default referred to in Section 10.1 hereof shall have
happened and be subsisting, the Lessor may take any one or
more of the following remedial steps:
(a) The Lessor or the Trustee as provided in the
Indenture may, at its option, after the continuance of
the event of default for thirty (30) days after written
notice given to the Lessee, specifying the event of
default, declare all installments of rent payable under
Section 5.3 hereof for the remainder of the Lease Term
to be immediately due and payable, whereupon the same
shall become immediately due and payable. If the
Lessor or the Trustee elects to exercise the remedy
afforded in this Section 10.2(a) and accelerate all
installments of rent payable under Section 5.3 hereof,
the amount then due and payable by the Lessee as acceler-
ated rent shall be the sum of:
(i) all principal payments of the Bonds then
outstanding and unpaid, and
(ii) all interest payments on the Bonds then
due, together with interest payments to become due
at the accelerated maturity date, and
(iii) any premium on the Bonds payable if the
Trustee elects or is required to declare all of
the principal of and interest on the Bonds imme-
diately due and payable under Section 1002 of the
Indenture.
(b) The Lessor, after the continuance of the
event of default for thirty (30) days after written notice
given to the Lessee specifying the event of default,
with the prior written consent of the Trustee, may re-
enter and take possession of the Project without
terminating this Lease, and sublease the Project for
the account of the Lessee, holding the Lessee liable
for the difference between the rent and other amounts
payal?le by such sublessee in such subleasing and the
rents and other amounts payable.by the Lessee hereunder.
40 299..,:243
X-2
ar ca 299 :, , 244
(c) The Lessor, after the continuance of the
event of default for thirty (30) days after written notice
�® given to the Lessee specifying the event of default,
with the prior written consent of the Trustee, may
. terminate the Lease Term, exclude the Lessee from
h possession of the Project and use its best efforts to
lease the Project to another, holding the
liable
h�'JJA for all rent and other payments due up to the effective
date of such leasing.
CIO(d) Subject to the exinutheneventof nany y ofthe
confidentiality agreement,
nds shall at the time be outstanding and unpaid, the
Mssor may, after the continuance of the event of
default forthirty(30) days after written notice given to
t)ie�I,essee specifying the event of default, have access
to an inspect, examine and make copies of the books
and records and any and all accountdata and income
s,
tax and other tax returns of the Lessee.
(a) The Lessor may, after the continuance of the
event of default for thirty (30) days after written notice
given to the Lessee specifying the event of default,
take whatever action at law or in equity may appear
necessary or desirable to collect the rent and any
other amounts payable by Lessee hereunder, then due and
thereafter to become due, or to enforce performance and
observance of any obligation, agreement or covenant of
the Lessee under this Lease.
Any amounts collected pursuant to 'action taken under
this Section shall be paid into the Bon{ Fund and applied in
accordance with the provisions. of the I�denture or, if the
provisionfor paymentthereof
Bonds have been fully paid (or .
has been made in accordance with 'the provisions of the
Indenture), to the Lessee.
'el No
Section 10.3. No Remedy Exclusively: Nodremedy herein
conferred upon or reserved to the Lessor. is intended to be
exclusive of any other available remedy:gr remedies, but
each and every such remedy shall be1vand shall be
an�underethis Lease or
in addition to every other remedy g'
now or hereafter existing at law or in equity or
rey accruing
No delay or omission to exercise any right or pow
upon any default shall impair any ;such Aghrpower
or
buta
shall be construed to be a waiver thereof, Y
right and power may be exercised from time to time and as
often as may be deemed expedient.
In order to entitle the Lessor to exercise any remedy
reserved to it in this Article, it shalli,hot be necessary to
give any notice, other than such notice as may be herein
it
X-3
expressly Fequired. Such rights and remedies as are given
the Lessor hereunder shall also extend to the Trustee, and
the Trustee and the holders of the Bonds, subject to the
provisions of the Indenture, shall be entitled to the benefit ,
of all covenants and agreements herein contained.
Section 10.4. A reement to Pa Attorne s' Fees and
Expenses. In the event t e Lessee should efau t uncar
any
of the provisions of this Lease and the Lessor or the Trustee
should employ attorneys or incur other expenses for the
collection of rent or the enforcement of performance or
observance of any obligation or agreement on the part of the
Lessee herein contained, the Lessee agrees that it will on
demand therefor pay to the Lessor the reasonable fee of such
attorneys and such other expenses so incurred by the Lessor
or the Trustee.
Section 10.5. No Additional Waiver Implied by One Waiver.
In the event any agreement contained in this Lease 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.
(End of Article X)
afO 299 ,Aft245
x-4
ARTICLE XI
?iiGA G %1(i 4�U
• Qom%® Options in Favor of Lessee
�',` Section 11.1. General 0 tion to Purchase Pro'ect and
�i,�Terminate Lease. The Lessee s al have, and is hereby
v�lgrantedso long as it is not - in default in payment of the
'rents, the option to purchase the Project at any time prior
to;�or within one hundred eighty (180) days after, the
expiration or sooner termination of the Lease Term or any
renewal term.
T exercise this option, if all the Bonds and coupons
appertaiAng thereto, if any, (and premium, if any), have
been fully paid (or provision for the payment thereof shall
have been,made in accordance with the provisions of the
Indenture),.the Lessee shall give written notice to the
Lessor of the exercise of such option, and the purchase
price shall be the sum of $1.00 for the Project.
To exercise this option, if any of theBonds or coupons
appertaining thereto, if any, (and premium,'rif any,) shall
then be unpaid (or provision for the payment thereof shall
not have been made in accordance with the provisions of the
Indenture), the Lessee shall give written notice to the
Lessor and to the Trustee, and shall specifyk,therein the
date of closing such purchase, which date shall be not less
than forty-five (45) nor more than ninety (96) days from the
date such notice is mailed; and in case of aj•redemption of
the Bonds in accordance with the provisions of the Indenture,
the Lessee shall make arrangements satisfactory to the
Trustee for the giving of the required notice of redemption.
The purchase price payable by the Lessee in the event of its
exercise of the option granted in this paragfaph shall be
the sum of the following:
(1) an amount of money which, whenadded to the
amount then on deposit in the Bond Fund; will be suffi-
cient to retire and redeem all the then outstanding
Bonds on the earliest redemption date next succeeding
the closing date, including without limitation, prin-
cipal, premium, if any, all interest to accrue to said
redemption date and redemption expense, plus
(2) an amount of money equal to th'e Trustee's and
paying agents' fees and expenses under tie Indenture
accrued and to accrue until such final payment and
redemption of the Bonds, plus
XI-1
�D
0 • •
The sum of $1.00 for the Project.
Section 11.2. 2tion and Cbli ation to Purchase Project
in Certain Events. T e Lessee s all al so nave, an is
hereby granted, the option, and obligation in the case of
subsection (d) hereof, to purchase the Project prior to the
full payment of all of the Bonds (or provisions for payment
thereof having been made in accordance with provisions of
the Indenture), if any of the following shall have occurred:
(a) The Project shall have been damaged or destroyed
as set forth in Section 7.1 hereof (i) to such extent
that, in the opinion of the Lessee, it or they cannot
be reasonably restored with a period of six (6) consecu-
tive months to the condition thereof immediately preceding
such damage or destruction, or (ii) to such extent
that, in the opinion of the Lessee, the Lessee is
thereby prevented from carrying on its normal operations
for a period of six (6) consecutive months,. or (iii) to
such extent that the cost of restoration thereof would
exceed by more than $100,000 the Net Proceeds of
insurance carried thereon pursuant to the requirements
of Section 6.3 hereof.
(b) Title to, or the temporary use of, all or
substantially all the Project shall have been taken
under the exercise of the power of eminent domain by
any governmental authority, or person, firm or cor-
poration acting under governmental authority (including
such a taking or takings as results, in the opinion of
an Independent Engineer as expressed in a certificate
filed with the Lessor and the Trustee, in the Lessee
being thereby prevented from carrying on its normal
operations therein for a period of at least six (6)
consecutive months).
(c) As a result of any changes in the Constitu-
tion of Indiana or the Constitution of the United
States of America, or of legislative or administrative
action (whether state or federal), or by final decree,
judgment or order of any court or administrative body
(whether state or federal) entered after the contest
thereof by the Lessee in good faith, this Lease shall
have become void or unenforceable or impossible of
performance in accordance with the intent and purpose
of the parties as expressed in this agreement, or
unreasonable burdens or excessive liabilities shall
have been imposed on the Lessor or the Lessee including
without limitation federal, state or other ad valorem,
property, income or other taxes not being imposed on
the date of this Lease.
.,ova 299 ;, : 247
XI-2
• • arch 299 : ;<t M
(d) As the result of an amendment to the Inter-
nal Revenue Code of 1954, as amended (or any subsequent
federal tax law), or any amendment to the regulations
thereunder, the interest on the Bonds becomes includible
in the gross income, as defined in Section 61 of the
Internal Revenue Code of 1954, as amended, of the holders
(other than a substantial user of the Project as provided
by Section 103(c)(7) thereof, or a related person as
defined in Section 103(c)(6)(C) thereof).
In case of any of the above events stated in subsection
(a)aj (b) or (c) of this Section, the Lessee, if it exercises
its,�option to purchase the Project, must purchase the Project
within one year after such event. in the case of the event
statedin subsection (d) of this Section., the Lessee must
exercisef/swwuch option as promptly as possible:
To exe cisa such option, the Lessee shall within 90
days following the, event authorizing the exercise of such op-
tion, give written notice to the Lessor and to the Trustee,
if any of the Bonds shall then be unpaid or provision for pay-
ment shall not have been made in accordance with the provisions
of the Indenture, and shall specify therein the date of closing
such purchase, which date shall not be less than 45 nor more
than 90 days from the date such notice is mailed, and in case
of a redemption of the Bonds in accordance wiith the provisions
of the Indenture shall make arrangements sat�s£actory to the
Trustee for the giving of the required notice of redemption.
The Purchase price payable by the Lesser in the event of
its exercise of the option under the circumstances of (a), (b),
(c) or (d) hereof shall be the respective sums set forth in
Section 301 of the Indenture. In the event §f the exercise of
the option granted in this Section and the purchase by the Lessee,
any Net Proceeds of insurance or condemnation shall be paid to
the Lessee.
Section 11.3. Option to Purchase Unimaoved Land. -The
Lessee shall have, and is hereby granted, the option to purchase
any unimproved part of the Leased Land.(on which neither the
Building nor any machinery or equipment of the Project is located
but upon which transportation, parking or utility facilities may
be located) at any time and from time to time at and for a pur-
chase price equal to the cost thereof provided that it furnishes
the Lessor with the following:
(a) A notice in writing containing (i) an adequate
legal description of that portion of the Leased Land
with respect to which such option is to.be exercised,
(ii) a statement that the Lessee intends- to exercise its
option to purchase such portion of the teased Land on
a date stated, which shall not be less than forty-five
(45) nor more than ninety (90) days from! the date of
such notice.
XI-3
.01
A(b) A certificate of an Independent Engineer who
is acceptable to the Trustee, datednotmore than
ninety (90) days prior to the date of the purchase and
stating that, in the opinion of the person signing such
certificate (i) the portion of the Leased Land with
respect to which the option is exercised is not needed
for the operation of the Project for the purpose herein -
above stated, and (ii) the purchase will not impair the
usefulness of the Project as a manufacturing and distri-
bution plant and will not destroy the means of ingress
thereto and/or egress therefrom.
(c) An amount of money equal to the purchase
price paid therefor, computed as provided in this
Section.
The Lessor agrees that upon receipt of the notice,
certificate and any money required in this Section to be
furnished to it by the Lessee, the Lessor will promptly
deliver such money to the Trustee for deposit in the Bond
Fund and secure from the Trustee a release from the lien of
the Indenture of such portion of the Leased Land with respect
to which the Lessee shall have exercised the option granted
to it in this Section.
In the event the Lessee shall exercise the option
granted to it under this Section, the Lessee shall not be
entitled to any abatement or diminution of the rents payable
under Section 5.3 except as otherwise provided in Section
5.3 hereof, and if such option relates to Leased Land on
which transportation, parking or utility facilities are
located, the Lessor shall retain an easement to use such
transportation or utility facilities to the extent necessary
for the efficient operation of the Project.
Section 11.4. Conveyance on Exercise of Option to Purchase.
At the closing of the purchase, pursuant to t e exercise o
any option to purchase granted herein, the Lessor will upon
receipt of the purchase price, deliver to theLesseethe
following:
(a) If the Indenture shall not at the time have
been satisfied in full, a release from the Trustee of
the property with respect to which the option was
exercised.
(b) Documents conveying to the Lessee good and
marketable title to the property being purchased, as
such property then exists, subject to the following:
(i) those liens and encumbrances (if any) to which
a, e 299.,,;249
XI-4
title to said property was subject when conveyed to the
�® Lessor; (ii) those liens and encumbrances created by
the Lessee or to the creation or suffering of which the
Lessee consented; (iii) those liens and encumbrances
resulting from the failure of the Lessee to perform or
observe any of the agreements on its part contained in
this Lease; (iv) Permitted Encumbrances other than the
!� Indenture and this Lease; and (v) if the option is
exercised pursuant to the provisions of Section 11.2(b)
hereof, the rights and title of the condemning authority.
(Section 11.5. Relative Position of Options and Indenture.
l
The opElons respectivey granted to a Lessee in this
ArticleCexcept under Section 11.3 hereof shall be and remain
prior and superior to the Indenture and may be exercised
whether orinot the Lessee is in default hereunder, provided
that such default will not result in nonfulfillment of any
condition to the exercise of any such option.
Section 11.6. Option to Make Addition to Building. The
Lessee shall have, and is hereby granted, the option to con-
struct an addition to the Building on any unimproved part of
the Leased Land which may have been purchased by the Lessee
pursuant to Section 11.3 hereof and/or on any non -leased land
contiguous thereto and to use the outside wall of the Building
as a common wall and to make such openings between the Build-
ing and the addition as may be necessary, provided:
If any physical features of the Project, including
but not limited to floors, walls, ceilings, roofs,
structural supports, fixtures, heating plant, utility
services, loading dock facilities and lateral support
are altered or removed as a result of such addition,
the Lessee shall (i) furnish rfotice in, writing to the
Lessor and Trustee dated not less than'90 days prior to
the start of construction describing the proposed
addition and stating its intention to exercise this
option, (ii) furnish the Lessor and Trustee a certifi-
cate of an Independent Engineer who is acceptable to
the Trustee, dated not less than ninety; (90) days prior
to the date of the commencement of construction stating
that, in the opinion of such Independent Engineer the
portion of the Building to be altered or removed is not
needed for the operation of the Project. as a manufac-
turing and distribution plant independent of the addition
thereto, and that any such alteration or removal will
not impair the usefulness of the Project as a manufac-
turing and distribution plant, and (iii) bear all of
the expense for making any suchalteration or removal,
and all of the expense for any damage or destruction
done to any portion of the Project which -was not reported
as part of the proposed alteration or removal, and all
of the expense -for any damage or destruction done to
XI-5
any/,of the contents of the Building, and (iv) in the
event of a mortgage foreclosure on the Project under
the Indenture, or sale of, or a mortgage foreclosure
on the addition to the Building, directly bear the ex-
pense or be responsible for and obligated topayto the
Lessor or Trustee such sums as the Lessor and/or Trustee
may expend, to restore those portions of the Building
which were altered or removed to the condition which
they were in immediately preceding such alteration or
removal or such other lesser restorations as the Trus-
tee deems necessary in order to foreclose the mortgage
under the Indenture on a manufacturing and distribution
plant as self-contained and complete as the manufac-
turing and distribution plant was immediately prior to
any such alteration or removal.
The Lessor agrees that upon receipt of the notice, certifi-
cate and money required in this Section to be furnished to it
by Lessee, the Lessor will promptly deliver the money to Trustee
for deposit in the Bond Fund and to secure from the Trustee a
release, if necessary, from the lien of the Indenture of such
portion of the Project with respect to which the Lessee shall
have exercised the option granted to it in this Section. Nothing
herein shall entitle the Lessee to any abatement or diminution
of the rents payable under Section 5.3 hereof, except as other-
wise provided in section 5.3 hereof. Any addition to the Build-
ing constructed pursuant to this Section shall not become a part
of the Project or be made subject to the lien of the Indenture,
unless the Lessee expressly agrees thereto in writing.
(End of Article XI)
NIV 2s8,.:251
XI-6
ar�K 239 232
ARTICLE X1I
Miscellaneous
Section 12.1. Notices. All notices, certificates or
Dther communications ereunder shall be sufficiently given
aiW shall be deemed given when mailed by registered mail,
po`s�ttage prepaid, addressed as follows:
Of to the Lessor: at Attention City Clerk, County -
City Building, South Bend, Indiana
46601.
If toe Lessee: at 11350 McCormick Road, Hunt Valley,
Maryland 21031, attn: Secretary.
If to the Trustee: at Corporate Trust Department, giver
Bend Plaza at Jeffersonville, South Bend,
Indiana 46601.
A duplicate copy of each notice, certificate or other
communication given hereunder by either the Lessor or the
Lessee to the other shall also be given to the Trustee. The
Lessor, the Lessee, and the Trustee may, by notice given
hereunder, designate any further or different -address to
which subsequent notices, certificates or other communications
shall be sent.
Section 12.2. Binding Effect. This Lease shall inure
to the benefit of and shall -Ea binding upon the Lessor, the
Lessee and their respective successors and assigns, subject,
however, to the limitations contained in Sections 6.3, 9.1
and 9.3 hereof.
Section 12.3. Severabilit In the event any provision
of this Lease shall a eld invalid or unenforceable by any
court of competent jurisdiction, such holding::shall not
invalidate or render unenforceable any other provision
hereof.
Section 12.4. Amounts Remainin in Bond4und. It is
agreed by the parties hereto t at any amounts :remaining in
the Bond Fund upon expiration or sooner termination of the
Lease Term, as provided in this Lease, after.ppayment in full
of the Bonds (or provision for payment thereof.'having been
made in accordance with the provisions of the.`Indenturs) and
the fees, charges and expenses of the Trustee and paying
agents in accordance with the Indenture and al-1 other amounts
required to be paid under this Lease and the Indenture shall
belong to and be paid to the Lessee by the Trustee as a
refund of overpayment of rents.
XII-1
.0 •
Section 12.5. Amendments Cha�ea and Modifications.
Except a:e ,,yherwise provided h this Lease or in the Inden-
ture, subsequent to the initial issuance of Bonds and prior
to their payment in full (or provision for the payment
thereof having been made in accordance with the provisions
of the Indenture), this Lease may not be effectively amended,
changed, modified, altered or terminated without the written
consent of the Trustee.
Section 12.6. Execution Counter arts. This Lease may
be executed in severs counterparts, each of which shall be
an original.
section 12.7. Other Instruments.
(a) In order to assure perfection of the respective
security interests of the Lessor and the Trustee in and to
certain tangible personal property which may constitute a
part of the machinery or equipment of the Project, the
Lessee agrees that on the Completion Date it will furnish
the Lessor and the Trustee with a written opinion of counsel
to the effect that all appropriate steps on the part of the
Lessee then necessary to permit perfection of such respective
interests of the Lessor and the Trustee under the Indenture
as may be created by this Lease in and to all tangible
personal property as against third party creditors of and
purchasers for value in good faith from the Lessor or the
Lessee have been taken.
The Lessor agrees that on the Completion Date it will
furnish the Trustee with a written opinion of counsel to the
effect that all appropriate steps on the part of the Lessor
then requisite to perfection (as aforesaid) of the respective
security interests of the Trustee and the Lessor inand to
all such personal property have been taken.
Thereafter and at any such time as additional tangible
personal property, whether as substitutions, replacements or
otherwise, of an aggregate value in excess of $150,000 shall
become part of the Project, the Lessee agrees to furnish to
the Trustee, supplements to the aforementioned written
opinions of counsel to the effect that all steps requisite
to perfection of the foregoing security interests have been
duly taken.
All opinions required by this Section 12.7 shall specify
the further refilings and renewals required in order to
continue perfection of such security interests for so long
as the Bonds shall be outstanding under the terms of the
Indenture.
(b) The Lessee and the Lessor agree to enter into and
sign all instruments (including financing statements) deemed
2'39 ,, 253
XII-2
• • a„�. 2�H :2�4
necessary or advisable in the written opinion of counsel for
perfection of and continuance of the perfection of the
respective security interests as aforesaid. The Lessor
agrees to file and record or cause to be filed and recorded
all such instruments required to be so filed and recorded
and shall continue or cause to be continued the liens of
such instruments for so long as the Bonds shall be outstanding
under the terms of the Indenture.
The Lessee shall pay the reasonable costs incurred by
Lessor in performing its obligations under this Section
% , ection 12.8. Net Lease. This Lease shall be deemed
and construed to be as Huse" and the Lessee shall pay
absoiiiiely net during the Lease Term the rent and all other
payments!required hereunder, free of any deductions, without
abateme;tadeduction or set-off other than those herein
expressly provided,
Section 12.9. Force Majeure. In case by reason of
force majeure either party hereto shall be rendered unable
wholly or in part to carry out its obligations under this
agreement other than the obligation of the Lessee to make
the rental payments required under the terms hereof, then
except as otherwise provided in this Lease if such party
shall give notice and full particulars of such force majeure
in writing to the other party within a reasonable Mrs after
the occurrence of the event or cause relied on, the obliga-
tions of the party giving such notice, so far as they are
affected by such force majeure, shall be suspended during
the continuance oft ee —in—a=ty then claimed, but for no
longer period, and such party shall endeavor to remove or
overcome such inability with all reasonable dispatch.
The term "force majeure", as employed herein, shall
mean the acts of God, strikes, lockouts or other industrial
disturbances, acts of the public enemy, orders'of any kind
of the Government of the United States or the State of
Indiana or any civil or military authority, insurrections,
riots, epidemics, landslides, lightning, earthquakes, fires,
hurricanes, storms, floods, washouts, droughts, arrests,
restraining of government and people, civil disturbances,
explosions, breakage or accidents to machineryi:transmission
pipes or canals, partial or entire failure of utilities or
any other cause not reasonably within the control of the
party claiming such inability.
It is understood and agreed that the'settlement of
strikes, lockouts and other industrial disturbances shall be
entirely within the discretion of the party hating the
Waand that the above requirement that any force
11 be remedied will all reasonable dispatch shall
e thesettlement of strikes, lockouts and other
disturbances by acceding to the demands of the
opposing party or parties when such course is unfavorable in
the judgment of the party having the difficulty.
Section 12.1o. Unsuccessful Sale of Bonds. It is
understood and agreed at t e obligations of t e Lessor
under this Lease are based upon its ability to successfully
negotiate the issuance, sale and delivery of the Bonds.
Accordingly, it is understood and agreed that in the event
of a failure to successfully issue, sell and deliver the
Bonds or failure by the Lessor to deposit the applicable
Bond proceeds promptly in a Project Fund for the account of
said Project or in Bond Fund then this Lease shall be of no
binding force and effect, and the Lessor and the Lessee in
such event do hereby mutually release and discharge any and
all claims of any character whatsoever which either may have
against the other by reason of or arising from the failure
of this agreement for such cause.
It is also understood and agreed that the obligations
of the Lessee under this Lease are conditional upon the
ability of the Lessor to successfully negotiate the issuance,
sale and delivery of the Bonds upon such a basis that the
adjusted rentals hereinbefore provided will be satisfactory
to the Lessee, such rentals being adjusted to the exact
interest and principal requirements of the Bonds as same are
determined by the sale of the Bonds. Lessee shall be
obligated to pay only such adjusted rentals. Such condition
as to such rentals being satisfactory to the Lessee shall be
satisfied upon a representative of the Lessee stating in
writing that a certain interest rate or rates on the Bonds
is or are satisfactory.
In the event of a failure to successfully sell the
Bonds, the Lessor shall convey to Lessee any and all properties
previously conveyed to the Lessor by the Lessee or others
for this Project upon payment by Lessee to the Lessor of its
cost, if any, of acquisition of such properties, and the
Trustee shall release upon behalf of such Bondholders all
interest, if any, which they have to such property if such
action should ever be deemed necessary to be taken by the
Trustee, although it is hereby expressly be
that such
action is not necessary, since in the event of the failure
to issue the Bonds there would be no Bondholders who would
have any interest in such property.
ra•� a:JS (End of Article XII)
XII-4
• • 299 ':(t256
aecK
IN WITNESS WHEREOF, the Lessor and the Lessee have
caused this Lease to be executed in their respective cor-
porate names and their respective corporate seals to be
hereunto affixed and attested by their duly authorized
officers, all as of the date first above written.
CITY F SOUTH BEND, INDIANA
By
eter a. meth, or
MCCORMICK 6 COMPANy, INCORPORATED
By --F V
—F Hills man V. Wilson,
Vice President -Finance
V
I�
/%Jame J Harrison, Jr. iSecret,arand Counsel
The interest of the City of South Bend, Indiana, in this
Lease Agreement has been assigned to St'. Joseph Bank and Trust
Company, as Trustee, under the Mortgage and Indenture of Trust,
datedasof June 1, 1976, from City of South Send, Indiana.
STATE OF INDIANA SS:
COUNTY OF ST. JOSEPH )
Before me, Geraldine A. Wegner , a Notary Public in
and for the State and County aforesaid, personally appeared
Peter J. Nemeth and Irene Gammon, with both of whom I am
personally acquainted, and who, upon their oaths, acknowledged
themselves to be the Mayor and City Clerk respectively, of
the City of South Bend, Indiana, one of the within named
bargainers, and that they, as such Mayor and City Clerk
foregoing instrument
being authorized so. to do, executed the
" for the purposes contained therein by subscribing thereto
the name of said City and attesting the official seal of
said City by themselves as such Mayor and City Clerk, respectively.
WITNESS my hand and notarial seal Junef office at South
Bend, Indiana, this 15 day of
Geraldine A. Wegner
(SEAL)"
My commission jrires:
February 19, 1980
257
STATE OF /CIA A-AN9
SS:
COUNTY OF
�1 Before me, iLn.rc l-_. I-„e,e�.� a Notary'Public in
an3 for the State and County aforesaid, personally appeared
Hillsman V. Wilson and James J. Harrison, Jr., with both of whom
I 'amypersonally acquainted, and who, upon their oaths,
acknowledged themselves to be a vice President -$inane and
Secretary and Counsel, respectively, of McCormick 6 Company,
Incorporated, one of the within named bargainers, and that
they, aii uch Vice President -Finance and Secretary, and
Counsel,45eing authorizedso to do, executed the foregoing '
instrumentffor the purposes contained therein by subscribing
thereto the* name of said Company and attesting the official
seal of said Company by themselves as Vice President -Finance
and Secretary and Counsel, respectively. _
WITNESS my hand and notarial seal of office at Nam,,,- �a,..._�•, ,
lVl..,.e..�..+n this 44- day of To..ie > 1976.
NOTARY; c Notary Putg,,Xc
(SEAL)
My commission expires:
�® ,s! • E3FIIBIT A • �il�!/, LEGAL DESCRIPTION
AIRPORT INDUSTRIAL PARK - PRASE III
• BLOCK 8
A part of the Southeast Quarter of Section 28, Township 38 North,
Range 2 East, German Township, St. Joseph County, Indiana, de-
scribed as follows:
Commencing at the Southeast corner of said Section; thence
North 90" 00' 00" West 990.00 feet along the South line of said
Section; thence North 0" 10' 55" East 40.00 feet to a point on the
.North boundary of Lathrop Street, said point being the point of be-
ginning of this description; thence north 90" 00' 00" West 433.81
feet along said boundary; thence North 0" 05' 56" East 360.20 feet;
thence North 0" 16' 23" West 663.77 feet; thence South 45" G2' 33"
East 189.08 feet; thence Southeasterly 342.38 feet along an arc to
the left having a radius of 480.00 feet and subtended by a long
chord having a bearing of South 65' 28' 36" East and a length of
335.17 feet; thence South 0" 10' 55" West 751.26 feet to the point
of beginning and containing 8.462 acres, more or.less.
Above described tract of land is encumbered by easements described
as follows:
1. An easement 40 feet in width off the entire north side in
favor of Chicago South Shore and South Bend Railroad.
2. An easement 10 feet in width, immediately south of and
adjacent to said 40-foot wide easement in favor of Indiana
Bell Telephone Company.
3. An easement for waste water and storm water systems located
into, under, upon, over and across a strip of land 10.00
feet in width East of the following described courses:
Beginning at the Southwest corner of the above described
tract; thence North 0° G5' 56" West 400.31 feet to a poinL
on the :Jest boundary of the above described tract of land;
thence continuing across a strip of land 10 feet in width
each side of the following described line; Beginning at
said point in West boundary; thence.Ncrth, 45" 21' 14" East
145.50 feet and terminating in the southwestern boundary
of the eastment of the Chicago South Shore and South Bend
Railroad.
This instrument prepared by: Bruce A. POliZOtt0, Ice Miller Donadio
& Ryan, loth Floor, 111 Monument Circle, Indianapolis, Indiana
46204.
• EXHIBIT B .nox 299 ;,r. 260
General List of. Machinery.
Constituting the Leased Machinery
®� FSD - Mid -West Plant
SYSTEMS SUMMARY
'STORAGE SYSTEMS
Bulk Mustard System
�(1) Bulk Soy Bean bit System
(2)) Bulk Vinegar Systems
(2)-Sweetener Systems
MANUFACTURING SYSTEMS
(1) Mustard Mfg. System
(1) Continuous Mayonnaise System
(2) Premix Systems
(1) Brine System
(1) Starch System
(1) Egg System
(1) CIP System
FILLING SYSTEMS
(1) 1 Callon Filling System
(1) 1 Gallon Pure Pak System
(2) Bulk Filling System
The Lessee may substitute, in lieu of the above enumerated
General Plant Equipment, such other -and further equipment as may
from time to time be necessary for the proper conduct of its
business, provided, however, that such other equipment shall be
"Leased Equipment" as -herein defined.
This instrument prepared by; Bruce A! Polizotto, Ice
Miller Donadio & Ryan, loth Floor, ill Monument Circle,
Indianapolis, Indiana 46204.
;1