EXHIBIT 10.3
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SECOND SUPPLEMENTAL LEASE AGREEMENT
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF MONTGOMERY
AND
KINPAK INC.
-----------------------------------------------
RELATING TO
$3,500,000
THE INDUSTRIAL DEVELOPMENT BOARD OF THE
CITY OF MONTGOMERY
INDUSTRIAL DEVELOPMENT REVENUE BONDS
(KINPAK INC. PROJECT) SERIES 2002
-----------------------------------------------
DATED
AS OF
JULY 1, 2002
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ROY S. GOLDFINGER, P.C.
MONTGOMERY, ALABAMA
BOND COUNSEL
THIS INSTRUMENT AMENDS AND SUPPLEMENTS THAT
CERTAIN RESTATED LEASE AGREEMENT,
DATED AS OF DECEMBER 1, 1996 AND RECORDED
IN THE OFFICE OF THE JUDGE OF PROBATE
OF MONTGOMERY COUNTY, ALABAMA, IN RLPY BOOK
1718, PAGE 621, AS HERETOFORE
AMENDED AND SUPPLEMENTED BY A FIRST
SUPPLEMENTAL LEASE AGREEMENT DATED AS OF
MARCH 1, 1997 AND RECORDED IN SAID PROBATE
OFFICE IN RLPY BOOK 1735, PAGE 209,
BOTH BETWEEN THE INDUSTRIAL DEVELOPMENT
BOARD OF THE CITY OF MONTGOMERY AS
LESSOR AND KINPAK INC. AS LESSEE.
<PAGE>
SECOND SUPPLEMENTAL LEASE AGREEMENT
BETWEEN
THE INDUSTRIAL DEVELOPMENT BOARD
OF THE CITY OF MONTGOMERY
AND
KINPAK INC.
INDEX
Page
----
PARTIES....................................................................
1
RECITALS...................................................................
1
ARTICLE I
DEFINITIONS
Section 1.1
Definitions...................................................
2
Section 1.2
Interpretation................................................
10
Section 1.3 Captions and
Headings......................................... 10
ARTICLE II
REPRESENTATIONS AND COVENANTS
Section 2.1 Representations by the
Issuer................................. 11
Section 2.2 Representations and Covenants by
the Company - General........ 11
Section 2.3 Representations and Covenants by
the Company - Tax-Related.... 12
Section 2.4 Actions under Section 144(a)(4) of
the Code................... 14
Section 2.5 Depreciation
Method........................................... 16
ARTICLE III
LEASE PROVISIONS
Section 3.1 Reaffirmation of
Demise....................................... 17
Section 3.2 Lease
Term.................................................... 17
Section 3.3
Rentals.......................................................
17
Section 3.4 Obligations of Company
Unconditional.......................... 18
Section 3.5 Assignment of Second Supplemental
Lease and Revenues;
Mortgaging of Project................................ 19
Section 3.6 Prepayment of Rent; Redemption of
Bonds....................... 19
Section 3.7 Continued Applicability of Certain
Provisions of
Original Lease....................................... 19
ARTICLE IV
PROVISIONS RESPECTING THE 2002 PROJECT
Section 4.1 Agreement to Complete 2002
Project............................ 21
Section 4.2 Issuance of Bonds; Application of
Bond Proceeds;
Other Incentives..................................... 21
Section 4.3 Completion of the 2002
Project................................ 22
-i-
<PAGE>
ARTICLE V
ADDITIONAL AGREEMENTS AND COVENANTS
Section 5.1 Obligations With Respect to
Disclosure........................ 24
Section 5.2 Company Not to Adversely Affect
Exclusion from
Gross Income......................................... 24
Section 5.3 Covenants under Other Company
Documents....................... 24
Section 5.4 Rebate Fund Calculations and
Payments......................... 24
Section 5.5 Investment of Fund
Moneys..................................... 25
Section 5.6 Letter of Credit; Alternate Credit
Facility................... 25
ARTICLE VI
EVENTS OF DEFAULT AND REMEDIES
Section 6.1 Events of
Default............................................. 29
Section 6.2 Remedies on
Default........................................... 29
Section 6.3 No Remedy
Exclusive........................................... 30
Section 6.4 Agreement to Pay Attorneys' Fees
and Expenses................. 30
Section 6.5 No Additional Waiver Implied by
One Waiver.................... 30
Section 6.6 Remedies Subject to Applicable
Law............................ 30
ARTICLE VII
MISCELLANEOUS
Section 7.1 Effect of Second Supplemental
Lease........................... 32
Section 7.2 Execution
Counterparts........................................ 32
Section 7.3 Binding
Effect................................................ 32
Section 7.4
Severability..................................................
32
Section 7.5
Amendments....................................................
32
Section 7.6
Notices.......................................................
32
Section 7.7 Governing
Law................................................. 33
Section 7.8 No Interest in Certain
Moneys................................. 33
SIGNATURES.................................................................
34
ACKNOWLEDGMENTS............................................................
35
CONSENT OF
TRUSTEE.........................................................
36
CONSENT OF
BANK............................................................
37
EXHIBIT A - Description of Realty
-ii-
<PAGE>
STATE OF ALABAMA
MONTGOMERY COUNTY
SECOND SUPPLEMENTAL LEASE AGREEMENT
THIS SECOND SUPPLEMENTAL LEASE AGREEMENT made and entered into as
of
July 1, 2002 (this "Second Supplemental
Lease") between THE INDUSTRIAL
DEVELOPMENT BOARD OF THE CITY OF MONTGOMERY
(the "Issuer"), a public corporation
organized under the laws of the State of
Alabama (the "State"), and KINPAK INC.,
an Alabama corporation, its successors and
assigns (the "Company"), under the
circumstances summarized in the following
recitals (the capitalized terms not
defined in the recitals being used therein
as defined in Article I hereof or, if
not otherwise defined herein, in the
Existing Lease hereinafter mentioned, which
definitions are hereby incorporated by
reference herein):
A. The Issuer has been heretofore organized under and is authorized
by
the Act to acquire, enlarge, improve,
expand, own, lease, and dispose of
properties to the end that the Issuer may
be able to promote industry and
develop trade by inducing manufacturing,
industrial, commercial and research
enterprises to locate in the State, or to
enlarge and expand existing
enterprises, or both, and further the use
of the agricultural products and
natural resources of the State.
B. Pursuant to and in furtherance of the public purposes expressed
in
the Act, the Issuer heretofore on October
17, 1979 issued its revenue bonds (all
of which have been paid in full as of the
date hereof) and applied the proceeds
thereof to pay costs of a "project", within
the meaning of the Act, consisting
of the acquisition, construction and
equipping of certain manufacturing
facilities (the "Initial Facilities") which
the Issuer leased to Kinark
Corporation, a Delaware corporation
("Kinark"), pursuant to a lease agreement
dated as of December 1, 1979 and recorded
in the office of the Judge of Probate
of the County (the "Probate Office") in
RLPY Book 461, Page 566.
C. The Company succeeded to the position of Kinark as lessee of
the
Initial Facilities pursuant to two
successive Assignments and Assumptions of
Lease, the first dated as of February 27,
1996 among the Issuer, Kinark and
Bio-Chem and recorded in the Probate Office
in RLPY Book 1639, Page 276, the
second dated as of December 1, 1996 among
the Issuer, Bio-Chem and the Company
and recorded in the Probate Office in RLPY
Book 1718, Page 613.
D. At the request of the Company, the Issuer heretofore on December
20,
1996 issued certain revenue bonds on a
Taxable basis (the "1996 Bonds") and
applied the proceeds thereof to pay costs
of an additional "project", within the
meaning of the Act, consisting of the
renovation and improvement of the Initial
Facilities and the acquisition,
construction and equipping of an expansion
<PAGE>
thereto (the "1996 Project"). In connection
with the issuance of the 1996 Bonds,
the Issuer and the Company entered into the
Restated Lease Agreement dated as of
December 1, 1996, described on the cover
page hereof (the "Original Lease"). The
Initial Facilities, as improved and
expanded by the 1996 Project, constitute the
"Existing Facilities".
E. On March 3, 1997, the Issuer issued the 1997 Bonds on a
non-Taxable
basis to refund all the 1996 Bonds, in
connection with which the Issuer and the
Company entered into the First Supplemental
Lease Agreement dated as of March 1,
1997, described on the cover page hereof
(the "First Supplemental Lease"). The
Original Lease, as amended and supplemented
by the First Supplemental Lease, is
herein referred to as the "Existing
Lease".
F. In May 2000, the Company proposed to the Issuer the undertaking
of
the 2002 Project, constituting yet another
"project" within the meaning of the
Act. In support of such proposal, the
Issuer adopted the Inducement Resolution
and the Bond Resolution and is now prepared
to proceed with the issuance of the
Bonds pursuant to the Indenture and to
apply the proceeds thereof to pay or
reimburse a portion of the Project Costs.
In connection with the foregoing, it
is both necessary and desirable that the
parties further amend and supplement
the Existing Lease by entering into this
Second Supplemental Lease.
NOW, THEREFORE, in consideration of the foregoing and of the
mutual
covenants and agreements hereinafter
contained, the parties to this Second
Supplemental Lease hereby formally
covenant, agree and bind themselves as
follows:
ARTICLE I
DEFINITIONS
-----------
Section 1.1 Definitions. In addition to the words and terms
elsewhere
defined in this Second Supplemental Lease
or the Existing Lease, or by reference
to the Indenture or other document, unless
the context or use clearly indicates
another meaning or intent:
"Abatement Agreement"
means the Inducement and Abatement Agreement
dated as of September 28, 2000 between the
Issuer and the Company.
"Act" means Article 4, Chapter 54, Title 11 of the Code of Alabama
of
1975, as amended.
"Act of Bankruptcy" shall mean the filing of a petition in
bankruptcy
(or other commencement of a bankruptcy or
similar proceeding) by or against the
<PAGE>
Company or by the Issuer, as debtor, under
any applicable bankruptcy,
reorganization, insolvency or other similar
law now or hereafter in effect.
"Affiliate" means, as to any Person, any other Person that
directly, or
indirectly, through one or more
intermediaries, controls or is controlled by, or
is under common control with, that
Person.
"Alternate Credit Facility" means an irrevocable letter of credit,
a
surety bond, an insurance policy or other
credit facility delivered to the
Trustee pursuant to Section 5.6(f) of this
Second Supplemental Lease.
"Bank" means Regions Bank, Montgomery, Alabama, and its successors
and
assigns, as issuer of the Initial Letter of
Credit, until such time, if any, as
a Substitute Letter of Credit or Alternate
Credit Facility shall become
effective pursuant to Section 5.6 hereof,
and thereafter "Bank" shall mean the
issuer or provider of such Substitute
Letter of Credit or Alternate Credit
Facility.
"Basic Rent" means that portion of the Rentals payable hereunder in
the
amounts and at the times sufficient, giving
effect to any credit herein provided
for, to pay Debt Service on or Purchase
Price of the Bonds.
"Bio-Chem" means Ocean Bio-Chem, Inc., a Florida corporation,
its
successors and assigns, of which the
Company is a wholly-owned subsidiary.
"Bond" or "Bonds" means the $3,500,000 Industrial Development
Revenue
Bonds (KINPAK INC. Project) Series 2002 of
the Issuer to be issued under the
Indenture.
"Bond Counsel" means Roy S. Goldfinger, P.C., Montgomery, Alabama,
or
any other attorney or firm of attorneys
nationally recognized on the subject of
municipal bonds and acceptable to the
Trustee.
"Bond Fund" means the Bond Fund created in the Indenture.
"Bond Payment Date" means each date (including any date fixed
for
redemption of Bonds) on which Debt Service
is payable.
"Bond Purchase Agreement" means the Bond Purchase Agreement dated
July
22, 2002 among the Company, the Issuer and
the Underwriter relating to the
Bonds.
"Bond Purchase Fund" means the Bond Purchase Fund created in
the
Indenture.
"Bond Resolution" means the resolution adopted by the Board of
Directors of the Issuer on July 11, 2002
authorizing the issuance of the Bonds
and the execution and delivery of the
Issuer Documents and related documents.
<PAGE>
"Bond Year"
means, during the period the Bonds remain outstanding, the
annual period currently provided for the
computation of Excess Earnings under
Section 148(f) of the Code (except that the
first and last Bond Years may be
less than 12 months long).
"Building" means, collectively, all structures and improvements
now
existing or hereafter expanded,
constructed, reconstructed or made on the
Realty, as they may at any time exist.
"Business Day" means any day other than (i) a Saturday or Sunday;
(ii)
a day on which banking institutions are
required or authorized to remain closed
in (A) the city in which the principal
office of the Trustee is located, (B) the
city in which the principal office of the
Remarketing Agent is located, (C) the
city in which the office of the Bank where
drawings under the Letter of Credit
are to be made is located; or (iii) a day
on which the payment system of the
Federal Reserve System is not
operational.
"City" means the City of Montgomery, Alabama.
"Code" means the Internal Revenue Code of 1986, as amended.
References
to the Code and Sections thereof include
relevant applicable temporary, proposed
or final regulations thereunder and under
any predecessor provisions of the
Internal Revenue Code of 1954, as
amended.
"Company Documents" means, individually or collectively, as the
context
may require, each or all of this Second
Supplemental Lease, the Bond Purchase
Agreement, the Credit Agreement, the
Remarketing Agreement, the Mortgage, the
Security Agreement and such other documents
as the Company may enter into in
order to consummate the transactions
contemplated hereby and thereby.
"Completion Date" means the date of completion of the 2002 Project
to
be established by the Company in accordance
with Section 4.3(b) hereof.
"Computation Date" means the last day of each fifth Bond Year and
the
date on which the final payment in full of
all the Bonds is made.
"County" means Montgomery County, Alabama.
"Construction
Fund" means the Construction Fund created in the
Indenture.
"Credit Agreement" means the Credit Agreement of even date
herewith
among the Company, Bio-Chem, the
Subsidiaries and the Bank, as issuer of the
Initial Letter of Credit, as the same may
hereafter be amended or supplemented;
or any comparable agreement relating to a
Substitute Letter of Credit or
Alternate Credit Facility.
<PAGE>
"DTC" means The Depository Trust Company, New York, New York.
"Debt Service" means, for any period or payable at any time,
the
principal, interest and any premium due on
the Bonds for that period or payable
at that time.
"Determination of Taxability" means, with respect to the Bonds,
a
determination that interest on any Bond is
Taxable because of (i) the receipt by
the Issuer, any Holder or any member of an
"affiliated group", as that term is
defined in Section 1504 of the Code, to
which a Holder also belongs, of a
"30-day letter", within the meaning of
Treasury Regulations Section
601.105(d)(1)(iv), proposing a
determination to that effect; or (ii) receipt by
the Trustee or any Holder of a written
opinion of Bond Counsel that there is
substantial likelihood that such interest
is Taxable; subject, however, in all
such cases to the right on the part of the
Company set forth in the Indenture to
contest the same.
"Equipment" means any item of equipment, fixtures and tangible
personal
property located in or on the Building or
the Realty, and any item of equipment,
fixtures or tangible personal property
acquired in substitution therefor or as a
renewal or replacement thereof pursuant to
the provisions of the Lease
Agreement.
"Event of Default" means an Event of Default specified and defined
in
Section 6.1 hereof.
"Excess Earnings" means, with respect to the proceeds of the Bonds,
as
of each Computation Date, an amount equal
to the sum of (a) plus (b) where:
(a) is the excess of
(i) the aggregate amount earned from the Issue Date on all
nonpurpose investments in which gross proceeds of the Bonds are
invested (other than investments attributable to excess
earnings
described in this clause (a)), taking into account any gain or
loss on the disposition of nonpurpose investments, over
(ii) the amount that would have been earned if such
nonpurpose investments (other than amounts attributable to an
excess described in this clause (a)) had been invested at a
rate
equal to the yield on the Bonds; and
<PAGE>
(b) is any income attributable to the excess described in
clause
(a), taking into account any gain or loss on the disposition of
nonpurpose investments.
The sum of (a) plus (b) shall be determined
in accordance with Sections
148(f)(2) and 148(f)(4) of the Code. As
used herein, the terms "gross proceeds",
"nonpurpose investments" and "yield" have
the meanings assigned to them for
purposes of Section 148 of the Code.
"Existing Letter of Credit" means, as of any particular time,
the
Letter of Credit or Alternate Credit
Facility held by the Trustee at that time.
"Extension Letter of Credit" means a Substitute Letter of Credit
from
the same Bank which issued the Existing
Letter of Credit, substantially
identical to the Existing Letter of Credit
except that it has a Stated
Termination Date at least one year later
than that of the Existing Letter of
Credit.
"Final Determination" means a Determination of Taxability deemed
final
by reason of the termination or forfeiture
of the Company's right under the
Indenture to contest the same.
"Government Obligations" means (a) direct obligations of the
United
States of America for the full and timely
payment of which the full faith and
credit of the United States of America is
pledged, or (b) obligations issued by
a Person controlled or supervised by and
acting as an instrumentality of the
United States of America, the full and
timely payment of the principal of,
premium, if any, and interest on which is
fully and unconditionally guaranteed
as a full faith and credit obligation by
the United States of America.
"Governmental Authority" means the United States, any state or
political subdivision thereof and any
court, agency, department, commission,
board, bureau or instrumentality of any of
the foregoing.
"Holder" or "Holder of a Bond" means the Person in whose name a
Bond is
registered on the books kept and maintained
by the Registrar for the
registration and transfer of Bonds.
"Indenture" means the Trust Indenture of even date herewith between
the
Issuer and the institution therein named as
Trustee, as the same may hereafter
be supplemented or amended.
"Independent Engineer" means an engineer or engineering firm
registered
and qualified to practice the profession of
engineering under the laws of the
State and not in the full-time employment
of the Issuer or the Company.
<PAGE>
"Inducement Resolution" means the resolution adopted by the Board
of
Directors of the Issuer on May 30, 2000
preliminarily approving the 2002 Project
and the issuance of the Bonds.
"Initial Letter of Credit" means the initial Letter of Credit in
the
form attached to the Credit Agreement as
Exhibit C and caused by the Company to
be delivered to the Trustee on or prior to
the Issue Date.
"Interest Payment Date" means, so long as the Bonds are
outstanding,
the first Business Day of each March, June,
September and December, commencing
on the first Business Day of September,
2002.
"Interest Rate for Advances" means the rate per annum which is
two
percent per annum (2%) in excess of (a), so
long as Regions Bank remains the
provider of the Letter of Credit, the
Commercial Base Rate (as defined in the
Credit Agreement), or (b), in the event an
institution other than Regions Bank
provides the Letter of Credit or Alternate
Credit Facility, the "prime rate" as
published from time to time in The Wall
Street Journal.
"Issuance Costs" means, with respect to bonds, costs associated
with
the issuance thereof, including, but not
limited to, (a) any placement agent fee
or underwriters' spread; (b) counsel fees
(including Bond Counsel, underwriters'
counsel, Issuer's counsel, company counsel
in the case of borrowings such as
those for exempt facilities, as well as any
other specialized counsel fees
incurred in connection with the borrowing);
(c) financial advisor fees; (d)
rating agency fees; (e) trustee fees; (f)
paying agent and certifying and
authenticating agent fees related to
issuance of such obligations; (g)
accountant fees; (h) printing costs (for
such obligations and of any preliminary
and final offering materials); (i) costs
incurred in connection with the
required public approval process; and (j)
costs of engineering and feasibility
studies necessary to the issuance of such
obligations.
"Issue Date" means the date of the initial authentication and
delivery
of the Bonds.
"Issuer Documents" means, individually or collectively, as the
context
may require, each or all of this Second
Supplemental Lease, the Indenture, the
Bond Purchase Agreement, the Remarketing
Agreement, the Mortgage and such other
documents as the Issuer may enter into in
order to consummate the transactions
contemplated hereby and thereby.
"Lease Agreement" means the Existing Lease as amended and
supplemented
by the Second Supplemental Lease and as the
same may hereafter be further
amended and supplemented.
"Lease Term" means the duration of the leasehold estate created in
the
Existing Lease as amended and extended in
Section 3.2 hereof.
<PAGE>
"Letter of Credit" means the Initial Letter of Credit and, unless
the
context or use indicates another or
different meaning or intent, any Substitute
Letter of Credit.
"Letter of Credit Substitution Date" means any Business Day
specified
by the Company pursuant to Section 5.6
hereof on which the Company proposes
(other than by reason of an imminent
Conversion Date or Seven-Day Rate
Recommencement Date (as both said terms are
defined in the Indenture) or the
Stated Termination Date of the Existing
Letter of Credit) to furnish a
Substitute Letter of Credit (other than an
Extension Letter of Credit) or
Alternate Credit Facility in place of the
then Existing Letter of Credit.
"Mandatory Tender" means a tender of Bonds required to be made by
the
provisions of the Indenture.
"Maximum
Exemption Period", as found and determined in the Abatement
Agreement, means a period of ten years,
expiring on the tenth anniversary of the
Issue Date.
"Moody's" means Moody's Investors Service, New York, New York.
"Necessary Authorizations" means, with respect to any given action
or
effect, all authorizations, consents,
approvals, permits, licenses and
exemptions of, filings and registrations
with, and reports to, all Governmental
Authorities which are necessary or required
to accomplish such action or achieve
such effect.
"1997 Bonds" means the Issuer's $4,000,000 Industrial Refunding
Revenue
Bonds (KINPAK INC. Project) Series 1997
issued under the 1996 Indenture.
"1996 Indenture" means the Trust Indenture dated as of December
1,
1996, as amended, between the Issuer and
the 1996 Trustee, pursuant to which the
1997 Bonds were issued.
"1996 Trustee" means Regions Bank, Montgomery, Alabama, in its
capacity
as trustee under the 1996 Indenture.
"Non-Taxability
Opinion" means, with respect to one or more given
events or prospective events, an opinion of
Bond Counsel to the effect that the
occurrence of such event or events will not
adversely affect the non-Taxable
status of the interest on the Bonds.
"Optional Tender" means a tender of Bonds at the option of the
Holder
thereof pursuant to the provisions of the
Indenture.
"Project" means the Existing Facilities as expanded and improved by
the
2002 Project, consisting of the Realty, the
Building and the Equipment (as the
same may at any time exist), leased and to
be leased to the Company pursuant to
<PAGE>
the Lease Agreement for use as
manufacturing facilities for the manufacture of
aftermarket products for consumer marine,
recreational vehicle and automotive
markets or for such other purposes as may
be consistent with the provisions of
the Act and the Code and permitted by the
Lease Agreement.
"Project Costs" means those costs of the 2002 Project
(including
expenses incurred in connection with the
issuance of the Bonds as limited in
Section 2.3(n) hereof) for which payment
may be made as provided herein.
"Project Supervisor" means any agent of the Company, designated
in
writing by the Company, authorized to act
for and on behalf of the Company in
connection with any and all matters
pertaining to the 2002 Project.
"Purchase Price" means, with respect to any Bond tendered for
purchase
by Optional Tender or Mandatory Tender,
100% of the principal amount thereof
plus accrued interest thereon, if any, from
the last preceding Interest Payment
Date to the Tender Date.
"Rating Agency" means Moody's or S&P, their respective
successors and
assigns, and any other nationally
recognized securities rating agency.
"Realty" means the real estate and interests therein constituting
the
site of the Building, as described in
Exhibit A hereto, less any such real
estate, interests in real estate and other
rights as may be released from the
Lease Agreement pursuant to the provisions
thereof or taken by the exercise of
the power of eminent domain.
"Rebate Fund" means the Rebate Fund created in the Indenture.
"Registrar" means the Registrar as defined in the Indenture.
"Related Documentation" means the documentation required to
accompany a
Substitute Letter of Credit or Alternate
Credit Facility in accordance with the
provisions of Section 5.6(d) hereof.
"Remarketing Agent" means the Remarketing Agent appointed in
accordance
with the Indenture, currently, Merchant
Capital, L.L.C., Montgomery, Alabama.
"Remarketing Agreement" means the Remarketing Agreement of even
date
herewith among the Issuer, the Company, the
Trustee and the Remarketing Agent,
as the same may hereafter be amended or
supplemented.
"Rentals" means the amounts required to be paid by the Company
pursuant
to Section 3.3 hereof.
"Revenues" means (a) the Basic Rent; (b) all other moneys received
or
to be received by the Issuer or the Trustee
in respect of payment of the Basic
Rent, including without limitation, moneys
and investments in the Bond Fund or
<PAGE>
Bond Purchase Fund and received by the
Trustee from drawings made under the
Letter of Credit or as a result of the
remarketing of any Bonds, but excluding
any moneys and investments in the Rebate
Fund; (c) any moneys and investments in
the Construction Fund; and (d) all income
and profit from the investment of the
foregoing moneys.
"S&P" means Standard & Poor's, New York, New York.
"SEC" means the Securities and Exchange Commission.
"State" means the State of Alabama.
"Stated Termination Date" means the date on which a Letter of
Credit is
stated to expire, unless extended in
accordance with its terms.
"Subsidiaries" means the following wholly-owned subsidiaries of
Bio-Chem, all of which are Florida
corporations: Star-Brite Distributing, Inc.;
Star Brite Distributing (Canada), Inc.; and
Star Brite Automotive, Inc.
"Substitute Letter of Credit" means an irrevocable letter of
credit
delivered to the Trustee in substitution
for the Existing Letter of Credit, in
compliance with the requirements of Section
5.6(c) hereof and accompanied by the
Related Documentation.
"Taxable"
means, when used in reference to Bonds, that interest thereon
is includable in the gross income of any
Holder thereof for any reason other
than the fact that such Holder is a
"substantial user" of the Project or a
"related person" as those terms are used in
Section 147(a) of the Code. Interest
on Bonds shall not be deemed "Taxable"
because interest is includable in any
calculation of income for purposes of any
alternative minimum tax, any foreign
branch profits tax or any other type of
taxation other than the regular federal
tax imposed on gross income.
"Tender Date" means any date for Optional Tender or Mandatory
Tender of
the Bonds, as the case may be.
"Trustee" means the trustee at the time serving as such under
the
Indenture, initially Regions Bank,
Montgomery, Alabama.
"Trustee's Office" means the office from time to time designated by
the
Trustee, or its successor in trust, as its
principal corporate trust office for
purposes of discharging its trusts and
duties under this Indenture, which office
as of the Issue Date is located at 60
Commerce Street, Montgomery, Alabama.
"Trustee's Time" means Central Standard Time or Central Daylight
Time,
as the case may be.
<PAGE>
"2002 Project" means a "project", within the meaning of the
Act,
consisting of (1) the construction of an
approximately 70,000 square-foot
addition to the Existing Facilities, and
(2) the acquisition and installation
within said addition and the Existing
Facilities of new and additional
manufacturing machinery and equipment.
"Unassigned Rights" means all of the rights of the Issuer to
receive
payments or reimbursement pursuant to
Section 3.3(c) hereof, to be held harmless
and indemnified pursuant to Section 5.3 of
the Original Lease, to be reimbursed
for attorney's fees and expenses pursuant
to Section 6.4 hereof, to receive
notices under the Lease Agreement and to
give or withhold consent to amendments,
supplements, modifications or termination
of the Lease Agreement and of the
Indenture pursuant to Section 7.5 hereof
and Article VII of the Indenture,
respectively.
"Underwriter" means Merchant Capital, L.L.C., Montgomery,
Alabama.
"Unimproved", when used with reference to the Realty, means any
part or
parts of the Realty upon the surface of
which no part of the Building rests.
Section 1.2 Interpretation. Any reference herein to the Issuer or
to
any member of the Board of Directors or
officer thereof includes entities or
officials succeeding to their respective
functions, duties or responsibilities
pursuant to or by operation of law or
lawfully performing their functions.
Any reference to a section or provision of the Constitution of
the
State or the Act, or to a section,
provision or chapter of the Code of Alabama
of 1975, or to any statute of the United
States of America, includes that
section, provision or chapter as amended,
modified, revised, supplemented or
superseded from time to time; provided,
however, that no amendment,
modification, revision, supplement or
superseding section, provision or chapter
shall be applicable solely by reason of
this provision, if it constitutes in any
way an impairment of the rights or
obligations of the Issuer, the Trustee or the
Company under this Second Supplemental
Lease, the Bonds, the Indenture or any
other instrument or document entered into
in connection with any of the
foregoing, including without limitation,
any alteration of the obligation to pay
Debt Service in the amount and manner, at
the times, and from the sources
provided in the Indenture, except as
permitted therein.
Unless the context indicates otherwise, words importing the
singular
number include the plural number, and vice
versa; the terms "hereof", "hereby",
"herein", "hereto", "hereunder" and similar
terms refer to this Second
Supplemental Lease; and the term
"hereafter" means after, and the term
"heretofore" means before, the effective
date of this Second Supplemental Lease.
Words of any gender include the correlative
words of the other genders, unless
the sense indicates otherwise.
<PAGE>
Section 1.3 Captions and Headings. The captions and headings in
this
Second Supplemental Lease are solely for
convenience of reference and in no way
define, limit or describe the scope or
intent of any Articles, Sections,
subsections, paragraphs, subparagraphs or
clauses hereof.
[END OF ARTICLE I]
<PAGE>
ARTICLE II
REPRESENTATIONS AND COVENANTS
-----------------------------
Section 2.1 Representations by the Issuer. The Issuer makes the
following representations as the basis for
the undertakings on its part herein
contained:
(a) The Issuer is duly incorporated under the provisions of the
Act. Under the provisions of the Act the Issuer has the power to
enter
into the transactions contemplated by the Issuer Documents and to
carry
out its obligations thereunder. The Existing Facilities constitute
and
the 2002 Project will constitute a "project" within the meaning of
the
Act. The Issuer is not in default under any of the provisions
contained
in its Certificate of Incorporation or under the laws of the State.
By
proper corporate action the Issuer has duly authorized the
execution,
delivery and performance of the Issuer Documents.
(b) The Issuer hereby finds and determines that the issuance of
the Bonds, the
construction, acquisition and installation of the 2002
Project and the continued leasing of the Project to the Company are
in
furtherance of the objects and purposes of the Issuer and of the
Act
and will promote industry, develop trade and further the use of
agricultural products and natural resources of the State.
(c) The execution, delivery and performance by the Issuer of
the
Issuer Documents are within the Issuer's corporate powers, and
each
such document, when executed and delivered, will constitute a
legal,
valid and binding obligation of the Issuer enforceable against
the
Issuer in accordance with its terms, except as enforcement may
be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors' rights generally
and by
the application of general principles of equity.
Section 2.2 Representations and Covenants by the Company - General.
The
Company represents and covenants that:
(a) It is a corporation for profit duly organized, validly
existing and in good standing under the laws and duly qualified
to
transact business in the State. The Company is the wholly-owned
subsidiary of Bio-Chem.
(b) The execution, delivery and performance by the Company of
the
Company Documents are within the Company's powers, have been
duly
authorized by all necessary corporate action, and do not and will
not
violate the Company's Articles of Incorporation or By-Laws, both
as
<PAGE>
most recently amended, any resolution or other corporate action of
the
Company's Board of Directors, any provision of law, any rule or
regulation to which it is subject, any order of any court or
other
governmental agency, or any indenture, agreement or other
instrument to
which the Company is a party or by which the Company or any of
its
properties or assets is bound, or conflict with, result in a breach
of
or constitute (with due notice or lapse of time or both) a
default
under, any such indenture, agreement or other instrument, or result
in
the creation or imposition of any lien, charge or encumbrance of
any
nature whatsoever upon any of the properties or assets of the
Company.
(c) The Company intends to operate the Project as manufacturing
facilities for the manufacture of aftermarket products for
consumer
marine, recreational vehicle and automotive markets throughout
the
period the Bonds and the 1997 Bonds are outstanding and knows of
no
reason why the Project will not be so operated. If, in the
future,
there is a cessation of that operation, it will use its best
efforts to
resume that operation or accomplish an alternate use by the Company
or
others which will be consistent with the Act and the Code.
(d)
To the best of its knowledge, the Company has obtained and
will use its best efforts to maintain all Necessary Authorizations
for
the construction, acquisition and installation of the 2002 Project,
as
applicable, and has obtained or will when and as necessary obtain
and
will use its best efforts to maintain all Necessary Authorizations
for
the operation of the Project and for the due execution, delivery
and
performance by the Company of each of the Company Documents. In
particular, all building permits required for any expansion or
renovation of the Building have been or will when and as necessary
be
obtained and, once obtained, will be maintained in full force
and
effect, and all utility services (including water supply, storm
and
sanitary sewerage, electric and telephone facilities) necessary for
the
expansion and operation of the Building for the intended purposes
are
or will be available.
(e) Each of the Company Documents, when executed and delivered,
will constitute a legal, valid and binding obligation of the
Company
enforceable against the Company in accordance with its terms,
except as
enforcement may be
limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors'
rights
generally and by the application of general principles of
equity.
(f) There is no pending or, to the best of its knowledge,
threatened action, investigation or proceeding before any
court,
governmental agency or arbitrator against or affecting the Company
or
any Affiliate (i) to restrain or enjoin or seeking to restrain
or
enjoin the issuance or delivery of the Bonds or the collection
or
<PAGE>
payment of Revenues, (ii) in any way contesting or affecting
any
authority for the issuance of the Bonds or the validity of the
Bonds or
any of the
Company Documents, or (iii) in any way contesting the
existence or powers of the Company.
Section 2.3 Representations and Covenants by the Company -
Tax-Related.
The Company represents and covenants
that:
(a) The acquisition and construction of the 2002 Project were
not
commenced (within the meaning of Section 144 of the Code) prior
to
April 1, 2000.
(b) Ninety-five percent (95%) or more of the net proceeds
(within
the meaning of the Code) of the Bonds will be used (i) for the
acquisition, construction, reconstruction or improvement of land
or
property of a character subject to the allowance for
depreciation
within the meaning of Section 144(a)(1) of the Code and (ii) to
provide
a "manufacturing facility", including facilities "directly related
and
ancillary" thereto, all within the meaning of Section 144(a)(12)(C)
of
the Code; provided that no proceeds expended to pay Issuance Costs
in
respect of the Bonds shall count as being within such 95%. The
Company
will not request or authorize any disbursement pursuant to Section
4.1
hereof, which, if paid, would result in less than 95% of such
proceeds
of the Bonds being so used.
(c) Not more than 25% of the 95% net proceeds of the Bonds
referred to in subsection (b) of this Section
