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HomeMy WebLinkAbout1978-08-14 344 AF RESOLVE344 IF Introduced by Councilor Soucy, August 14, 1978 CITY OF BANGOR (TITLE.) Poohlei.....SVPPJ.R@EIAL.#1.6<XS.9N@..5 1,(.S4.SA.P..R..£S£4rities...Reeotuti„pps,_,,,,_... BR Ga Cuy CauMi wfAa (AM afBaapor: MWLVM. WHEREAS, the City of Danger proposes to issue Revenue Obligation Securities for the general purpose of acquiring the V. P. Winter Distributing Co. Project, so-called, and wSmSfAS, it appears imperative that the transaction be cos®su ,ed w August 22, 1978, or as seen thereafter a may be possible, which may beless than ten days after adoptionof this resolve, and WHEggas, in the opinion of the City Council these facts render the in ediate adoption of these resolutions necessary for the. preservation of the Public peace, -' health, Audi safety and constitute an esergenry within the meaning of Article III, 'Section 1, of the Charter of the City of Bangor and the Constitution of the State of Mine, and WHEREAS, an July 10, 1978, the City Council of the City of Danger adopted Revenue Obligation Security Resolutions (30lAF) (the July 10, 1978 Resolutions) which authorized the issuance of Four Hundred Weuty-Pive Thousand Dollars ($425,000) principal amount of Revenue Obligation Security for the general purpose of acquiring sal estate and providing for construction of the Winter Distributing Cospany, Inc. Project, so-called, and, WHEREAS, the aforesaid resolution provided, inter alia, that the Security is to be secured by a trust agreement (the Treat Agreement) and that the Project is to be leased to Winter Distributing Company, Inc. Pursuant to a Lease Agreement (the Lease), the Trust Agre azzat and the Lease to be subject to such terms and conditions as shall be approved by the City Council or a majority thereof, and WHEREAS, certain additional actions should be taken now by the City Council in connection with the issuance of the Security and the acquisition, construction, and lease of the Project, o HOW, THEREFORE, be it RESOLVED that subparagraph (c) of the fifth resolution of the July 10, 1978, Resolutions be amended to read as follows: 'The principal sonnet of the Security shall be repaid at the rete of 010,3$1 $28,333.33 per anus for each of the first fourteen (14) years following the date of issue. Each repayment shall be An the emeapy of the date of i 18 with the balance of j,090 $28,333.38 to he repaid an the fifteenth (15th) anniversary of the date of issue,' 344 AN IN CITY Cancxc R E S O L V E August 14, 1978 - Supplemental Raveaue Obligation - f�" Panned by the following yes and '.n vote: Councilors voting Securities Reenlutions e B t s; Finnigan, Gaon, `M K og Sougp. spur Weymouth M Willey Cwn a ting zenft'an. Q,c Pima/ r G14Y >faw - rp LEASE AGREEMENT BETWEEN DIC CITY BANGOR, MAINE AND V. P. WINTER OISTRIBOTING CO. I. PARTIES The parties to this Lease Agreement are 1.1The City of Bangor, Maine, a municipality duly estab- lished under the laws of the State of Maine (Bangor), and 1.2 V. P. Winter Distributing Co., a corporation organized under the laws of the State of Rhode Island (Winter), (hereinafter sometimes referred to as the Lessee), having its principal place of business at East Providence, County Of Providence, State of Rhode Island and having an additional place of business at Portland, County of Cumberland, State of Maine. -- II. RECITALS 2.1 The Maine Securities Approval Act, 30 M.R.S.A. 55325. at seq. (the Act), duly enacted by the Legislature of the State of Maine, provides among other things for the acquisition and/or con- struction by municipalities of "industrial -commercial projects", as that term is defined in the Act, and permits the municipality to issue revenue obligation securities for the purpose of such acquisitions and/or construction. 2.2 There exists within the corporate limits of the City Of Bangor located in the so-called Target Industrial Plaza West Subdivision, a site appropriate for the construction of a commercial - industrial complex, which site is to be acquired by Bangor, subject to certain encumbrances. Bangor plans to construct a commercial -industrial complex (the "Project"), located at Lot W20A Of the subdivision, to be occupied by winter. The Project falls within the definition of an industrial -commercial project as defined and is eligible for acquisition and construction by Bangor through the issuance of revenue obligation securities. 2.3 The Act provides that municipal officers of a munici= pality may make and .enter into leases, contracts and agreements, including trust agreements securing revenue -obligation securities and Bangor proposes to do so. This Lease Agreement sets forththe terms and conditions under .which. Winter, as Leasee, will occupy, use and pay rental for the Project.. Concurrently with the execution Of this Lease Agreement, Bangor will enter into an Indenture of Trust with The Merrill Trust Company, a trust company with principal offices at Bangor, Maine, (the Trusteel pursuant to which the revenue obligation securities (the Security)_ will be secured. 2.4 The Maine Guaranty Authority has issued a Certificate of Approval approving the Project as a "project" as that term ie rdefined in the Act, and the issuance of the Security has been duly authorized by the municipal officers of the. City of Bangor through - action by its City Council. III. .TERMS OF LEASE 3.1 Definitions "Act' shall mean the Municipal Securities Approval Act, _ 30 M.R.S,.A. Section 5235 at seq., as amended. "Administration Expenses" means the reasonable and necessary expenses incurred by Bangor with respect to this Lease, the Indenture and the Project, as herein defined, including the compensation and. -2- expenses as may be paid during the Lease term to or incurred in behalf Of special counsel for and any independent public accountant retained by Bangor, and the payment by Bangor of or reimbursement for fees., charges and expenses of the Trustee pursuant to Section 10.02 of the Indenture. "Authorized Lessee Representative's means the person at the time designated to act in behalf of the Lessee by written certificate furnished to Bangor and to the Trustee containing the specimen signa� tune of such person and signed on behalf of the Lessee by the president or any vice president (other than the Authorized Lessee Representative) of the Lessee. Such certificate may designate an alternate or alternates. The Authorized Lessee Representative and any such alter- nate may be employees of the Lessee. "Construction Bund" means the fund created pursuant to Section 5.06 of the Indenture. "Completion Date" means the date of completion of construction and installation of the Project as anall be 'certified in accordance with Section 4.5 hereof. "Cost of the Project" shall be deemed to include all items, within the definition of "Cost" in Section 5326 of the Act, Including but not limited to: (i) the purchase price at theland known as Lot W20A in the Target Industrial Plaza West Subdivision, a description of which appears on Exhibit A, together with any improvements and fixturesthereto,thereon and therein) -3- (ii) obligations of the Issuer or the Lessee incurred for labor and materials in connection with the construction and installation of the Project; (iii) the cost of contract bonds and of any insurance necessary during the course of constructionof the Project; (iv) the cost of engineering services, plans and specifications and preliminary surveys and estimates therefor, and for supervising construction, as well as for the performance of all other duties required by or consequent upon the proper construction of the Project; (v) legal expenses and fees, compensation and expenses of the Trustee and all other expenses incurred in connection with the issuance of the Security; (vi) all sums required to reimburse Bangor or Winter for advances made by either of them for any of the above items, or for any other costs Incurred or for work done by either of them which are properly chargeable to the Project; (vii) all other costs which Bangor or Winter shall be required to pay under the terms of, any contract or contracts for the acquisition, construction or improvement of the. Project.. "Facility" means the buildings, improvements, fixtures and equipment located on Lot W20A of the Target Industrial Plaza West Subdivision used by Winter in its business of assembly and distribution of millwork. "Indenture" means the trust indenture dated as of the date of this Lease Agreement, between Bangor and The Merrill Trust Company, as Trustee, pursuant to which the Security is to be -4- issued and pursuant to which the Project is to be mortgaged and the interest of Bangor in this Leaseand the rents and other revenues to be received by Bangor from the Project are to be pledged and .assigned as security for the payment of principal and interest on the Security,including any indentures supplemental to the Indenture. "Lease Term" means the duration of the leasehold interest created by this Lease Agreement specified in Section 4.1 hereof. "Lessee" means the Lessee and its successors. and assigns and also means any surviving, resulting or transferee corporation of the Lessee as provided in Section 5.3 hereof. "Net Proceeds", when used with respect to any insurance or condemnation award, means the gross proceeds from the rinsurance or condemnation award which remain after payment of all expenses. (n- eluding attorneys' fees) incurred in the collection of such gross proceeds. "Permitted encumbrances" means, as of any particular time (i) liens for taxes not then delinquent, Uii this Lease and the - Indenture, (iii) utility, access and other easements and rights of way, reservations, restrictions and exceptions which. the. Authorized Lessee Representative certifies will not interfere with or impair the Project or its use, (iv) any mechanic's, laborer's, matefaaiman's, supplier's or vendor's lien or right in respect thereof if payment is not yet due and payable, or if the same are being contested in good faith in appropriate proceedings and in the opinion of counsel satin- factory to the Trustee the lien does not materially impair the marketa- bility of the property affected thereby, and (v) such minor defects, irregularities, encumbrances, easements, rights of way, and clouds on -5- title as normally exist with respect to property similar in character to the Project and as do not, in the opinion of counsel satisfactory to the Trustee, materially impair the marketability of the property .affected thereby or its usefulness for the purpose for which. it was acquired or is held by Bangor and by the Lessee. "Premises" means the real estate described in Exhibit A together with all interests and other rights therein, less any portions thereof or interests in other rights therein taken by the exercise of power of eminent domain as provided in Section 3.4,8. "Project" means the entire industrial -commercial project (as that term is defined in the Act) including the Facility, and the Premises. - "Project Equipment" means all items of machinery, equipment and other tangible personal property associated with the Project, in- cluding all items of machinery, equipment and other tangible personal property acquired in substitution for, as a renewal or replacement of or as a modification or improvement of such .items; the term does not include machinery, equipment or other tangible personal property identified as that belonging to parties other than the Lessee, nor does it include machinery, equipment and other tangible personal property for which other items have been substituted, whichhave been taken by eminent domain, or which may be installed on the Premises as the Lessee's own machinery and equipment and properly identified as such, as contemplated by section 6..6 hereof, "Security" means the evidence or evidences of indebted- ness of Bangor issued pursuant to the indenture, -6- "Security Fund" means the fund created pursuant to Section 5.02 of the Indenture. , "Trustee" means the trustee at the time serving as such under the Indenture. - 3.2 Representations 3.2.1 Representations by Bangor (a) Bangor is a duly established municipality of the State of Maine, which operates under the Revised Statutes of the. State of Maine so far as applicable and a charter (em)oodied in Chapter 54 of the Private and Special Laws of 1931, as amended), Pursuant to the Act, Bangor has the power to enter into the transaction contemplated by this Lease and to carry out its obligations hereunder. Bangor agrees that, insofar as it may lawfully do so, it will do or cause to be done all things necessary to preserve and keep in full force and effect its legal existence as. a. municipality. (b) Bangor has been duly authorized pursuant to the _ Act to acquire the Project and has taken such title thereto as has, been conveyed to it, subject only to Permitted encumbrances, Bangor has been duly authorized and proposes to issue the Security payable from rent due hereunder as contemplated by the Act for the purpose of financing its acquisition of the. Project and has been duly authorized by its municipal officers to execute and deliver this Lease and, upon the satisfaction of indebtedness and other oblige, tions under this Lease Agreement, to convey the Project to Winter._ 3.2.2 Representations by the Leasee (a) The. Lessee is a corporation duly organized and existing and in good standing under the laws of the State of Rhode -7- Island, is qualified to do business as a foreign corporation and is in good standing in the State of Maine, is not in violation of any provision of its Charter Or By -Laws, has the power to enter int0 this Lease Agreement and by appropriate corporate action has duly authorized the execution and delivery of this Lease Agreement, (b) It is the present intention of the Lessee to operate the Project as an industrial -commercial project at least until the expiration of the Lease Term or until earlier termination of this Lease as provided herein. (c) The Project is included within the definition of a 'project" in the Act and its estimated cost is $425,000. 3.3 Demising Clause 3.3.1 Demise of the Project Bangor demises and leases to Winter as Lessee, and the Lessee leases from Bangor the Project subject to Permitted Encumbrances, in accordance with the provisions of this Lease Agreement, including the payment of the rents and other amounts set forth in Section 3.4.2 hereof, to have and to hold for the team set forth in Section 9.1 hereof. 3.4 Provisions of the Lease 3.4.1 Quiet Enjoyment So long as it is not in default under any of the provisions of this Lease Agreement, including periods for curing any default, the Lessee shall be entitled to quiet and peaceable possession and enjoy, ment of the Project during the term of this Lease, and Bangor at the cost of the Lessee will cooperate with. the Lessee to ensure. the Same. Except as provided by Section 6.,2 (relating to remedies on default) of this Lease Agreement, Bangor hereby covenants: and N agrees that it will take any and all necessary action to provide the Lessee with quiet and peaceable possession and enjoyment of the Project. 3.4.2 Rents and Other Amounts Pavable The Lessee agrees to pay into the Security Fund in current funds as and for rental for the use of the Project three business days before December 1, March 1, July 1 and September 1 of each year during the Lease Term, commencing November 27, 1978, a am which, together with monies as may be available therefor under provisions of the In- denture, will equal (i) the interest due on the Security on December 1, March 1, July 1, or September 1, as the case may be, plus (ii) in the case of a payment to be made three business days before September 1, the principal amount of the Security which will become due (whether in the form of a periodic payment or as the result of redemption or pre- payment) on the imediately following September 1. Bangor shall cause all such amounts paid into the Security Fund to be applied in payment of the principal and interest due on the Security. Unless there has been redemption or prepayment of the Security pursuant to Section 6.4 hereof, the principal of the Security shall be repaid at the rate of Twenty -Eight Thousand Three Hundred Thirty -Three Dollars and Thirty -Three cents ($28.333.33) per annum for each of the first fourteen (14) years following the date of issue, commencing September 1, 1979, with the balance of Twenty -Eight Thousand Three Hundred Thirty -Three Dollars and Thirty - Eight Cents ($28,333.38) to be repaid on September 1, 1993. The Lessee also agrees to pay as and for additional rental on or before November 27, 1978 and three business days before each December 1, March 1, July 1 and September 1 thereafter during the 6'D term of this Lease, a sum equal to Administration Expenses which have been incurred and which have not been paid, and also Administration Expenses which Bangor estimates will be incurred prior to the next rental payment date. In the event the Lessee should fail to make any of the payments required in this Section, the item or installment not paid shall continue as an obligation of the Lessee until the amount shall have been fully paid, and the Lessee agrees to pay interest thereon at the rate of 88 per annum from the date on which the pay- ment was due until paid. 3.4.3 Rentals to be Assigned It is understood and agreed that all rentals payable by the Lessee under Section 3.4.2 of this Lease Agreement are assigned to the Trustee. The Lessee assents to such assignment and hereby agrees that, as to the Trustee, its obligation to pay such rentals shall be absolute and shall not be subject to any defense or any right of set-off, counterclaim or recoupment arising out of any breach by Bangor of any obligation to the Leasee, Whether hereunder or other- wise, or out of any indebtedness or liability at any time owing to - the Lessee by Bangor. Bangor hereby directs the Lessee, and the Lessee hereby agrees, to pay to. the Trustee at the Trustee(a principal office all rentals payable by the Lessee pursuant to this Lease. 3.4.4 Maintenance and Modification Of project by Lessee The Lessee agrees thatatall times during the term of this - Lease it will maintain, preserve and keep the Project, or cause the Project to be maintained, preserved and kept',with the appurtenances -10- and every part and parcel thereof in good repair, working order and condition, reasonable wear and tear excepted, and that it will from time to time make or cause to be made all necessary and proper repairs, replacements and renewals. The Lessee shall have the privilege, in a sound and work- manlike manner, of remodeling the Project or making substitutions, additions, modifications and improvements to the Project from time to time as it, in its discretion, may deem to be desirable for its uses andpurposes, the cost of which remodeling, substitutions, additions, modifications and improvements of the Project shall be paid by the Lessee; and, except as provided in Section 6,6, the Project as so modified shall be the property of Bangor and shall be included under the terms of this Lease Agreement. The Lessee will not permit any mechanic's or other liens to remain against the Project for labor or materials furnished in connection with any remodeling, substitutions, additions, modifications, improvements,repairs, renewals or replacements 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 mechanic's or other liens filed or established against the Project, and iT such event may permit the items so contested to remain undischarged and unsatisfied during the period of such contest and any appeal therefrom unless. Bangor or the Trustee shall notify the Lessee. that, in theopinion of counsel to Bangor or the Trustee, by non-payment of any such. 'items the.lien of the Indenture as to the first mortgageposition or as to the revenues from the Project will be materially endangered or the Project -11- 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. Bangor will cooperate fully with the Lessee in any such contest. 3.4.5 Taxes, Other Governmental Charges and Utility Charges The Lessee will pay during the Lease Term, as the same reser pectively become due, all taxes and governmental charges of any kind whatsoever that may at any time be lawfully assessed or levied against or with respect to the Project (including, Without limiting the generality of the foregoing, any taxes levied upon or with respect to the income or profits of the Lessee from the Project prior to or on a parity with the assignment thereof made in the Indenture), 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; 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 installmentsas are required to be paid during the Lease Term. ' The Lessee may, at its expense and in its own name, in good faith contest any such taxes, assessments and other charges and, in the event of any such contest, may permit the taxes, assess- ments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless Bangor of the Trustee shall notify the Lessee that, in the opinion of counsel to Bangor or the Trustee, by non-payment of anysuch'items the -12 security afforded by the Indenture will be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in which event such taxes, assessments or charges shall he paid forthwith. Except for a tax assessment or other charge levied or made by Bangor in its capacity of a municipality, Bangor will co- operate 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, Bangor or the Trustee may (but shall be under no obligation to) pay the same, and any amounts so advanced therefor by Bangor or the Trustee shall become an additional obligation of the Lessee to the one making the advance, the amount of which, together with interest thereon at the rate of 88 per annum from the date thereof, the Lessee agrees to pay. The Lessee agrees for itself, its successors, assigns and sublessees, that it does hereby waive all right or privilege of exemption from municipal taxation for the Project, Facilities, Project Equipment or Premises, as may be available by reason of Bangor's status as a - municipality, or for any other reason whatsoever; and that the City of Bangor, in its capacity as a municipal taxing authority, may, assess all taxes as would otherwisebe applicable. to the Project, Facilities, Project Equipment or Premises, as if such exemption did not exist. In the event the above waiver of tax exemption is found to be unenforceable or in the event Bangor is unable, for any other reason whatsoever, to assess against the property (real and personall or any part thereof included in the Project the full amount of any taxes and other, governmental charges which would otherwise he assesged -13- against the Project, then (subject to the Lessee's right to, contest the validity of the tax or other governmental charge which would otherwise be assessed) the lessee, its successors, assigns or .sublessees, shall pay to Bangor in lieu thereof the amount of such. taxes or governmental charges which could have been assessed against the Project if the Project were owned directly by the Lessee and were not subject to this Lease Agreement, the intent of the parties being that the Lessee shall pay to Bangor either as taxes and governmental charges or, pursuant to this paragraph, an amount equal to taxes and governmental charges that would have been assessed, in accordance with Bangor's standard valuation procedures,, against the Project if it were not owned by Bangor. 3.4.6 Insurance The Lessee agrees to insure or cause to be insured the Project in such amounts as similar properties are usually insured by business entities similarly engaged, against loss or damage of the kinds usually insured against by such. business entities, by means of policies issued by insurance companies duly qualified to do business. in the State of Maine. As an alternative to the above, the Lesseemay insure each. property under a blanket insurance policy or policies whichcover not only such property but other properties. The Lessee agrees that it will carry public liability in- surance with reference to the Project in minimum amounts of Three Hundred Thousand Dollars C$300,000) for the deathor personal injury to one person and One Million Dollars ($1,000,OOQj- for personal -14- injury or death for each occurrence, and Three HundredThousand Dollars ($300,000) for property damage for each occurrence. Bangor and the Trustee shall be made additional insureds or beneficiaries under such policies. The liability insurance provided by this paragraph may be by blanket insurance policy or policies which cover other property and activities in addition to those at the Project. Each policy shall contain a provision to the effect that the insurance carrier shall not cancel the same without first giving at least ten (10) days' advance written notice thereof to Bangor and to the Trustee. The Lessee shall deliver to the Trustee duplicate copies or certificates of insurance pertaining to each policy of insurance required by this Section and agrees to keep said duplicate copies or certificates up to date. The Net Proceeds of insurance protecting against loss shall be applied as provided in Section 3.4.7, and the net proceeds of insurance against liability for personal injury and damage to property of others shall be applied toward extinguishment or satis- faction of the liability with respect to which the proceeds are payable. Throughout the Lease Term, the Lessee shall maintain or cause to be maintained Workmen's Compensation insurance coverage required by the laws of the State of Maine. In the event the Lessee shall fail to maintain the full insurance coverage required by this Lease Agreement or shall fail to keep the Project in good repair and safe operating condition, and such failure shall constitute a default under Section S.l(b) hereof, Bangor -15- or the Trustee may (but shall be under no obligation to) take out required policies of insurance and pay the premiums on the same or may make repairs or replacements as in their opinion are necessary and provide for payment thereof; and all amounts so advanced by Bangor or the Trustee shall become an additional obligation of the Lessee to the one making the advance, the amount of Which, together with interest thereon at the rate of 88 per annum, the Lessee agrees to pay as Administration Expenses. 3.4.7 Damage and Destruction Unless the Lessee shall have elected or been required to purchase the Project pursuant to the provisions of Section 7.1 and 7.2 hereof, if, prior to the full payment of the debt evidenced by the Security (or provision for payment therefor pursuant to the Indenture) the Project is destroyed (in whole or in part) or is damaged by fire or other casualty, the Lessee Cil will promptly re- pair, rebuild or restore the property damaged or destroyed to substantially the same condition as existed Prior to the event. causing damage or destruction, with such changes, alterations and modifications (including the aubstitution and addition of other property)as may be desired by the Lessee 'Cprovided that the security for the performance of this Lease Agreement and for the. Security is not materially impaired) and Cii). will apply for such purpose so much as may be necessary Of any Net Proceeds o{ inaurance receivable on account of such. losses, All Net Proceeds of insurance resulting from claims for losses for damage or destruction to the Project shall he paid to the. Lessee. In the event such Net Proceeds are not sufficient to pay in full the costa of repair, rebuilding or restoration, the Lessee will nonetheless complete the work therefor and will pay all costs thereof in excess of the amount of Net Proceeds. 3.4.8 Condemnation - Unless the Lessee shall have elected or been required to purchase the Project pursuant to the provisions of Sections 7.1 or 7.2 hereof, in the event the title to, or the temporary use of the Project or any part thereof or the leasehold estate of the Lessee in the Project created by this Lease Agreement or any part thereof shall be taken under the exercise of the power of eminent domain by any governmental body (including a taking by Bangor, acting as a munici- pality, for use other than as part of the Project) or any person, firm or corporation acting under governmental authority, the Lessee shall be obligated to continue to pay the amounts specified in Section 3.4.2 hereof. The Net Proceeds received by Bangor, by the Trustee orby the Lessee from any award made in eminent domain proceedings shall be. deposited with the Trustee in the Security Fund to be applied by the Trustee in One or more of the following ways as shall be directed in writing by the Lessee: - (a) The restoration of theproperty comprising the Project to substantially the same condition as it existed prior to the exercise of the power of eminent domain, withsuchchanges, alterations and modifications (including the -substitution and addition of other propertyl as may be desired by the Lessee (pro- vided that the security for the performance of this Lease Agreement and for the Security is not materially impaired). -17- (b) The acquisition, by purchase, construction or other- wise, by Bangor Of other property suitable for the Lessee's operations at the Project, which property shall become a part of the Project and shall be 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 property were specifically described herein and demised hereby; provided, however, that if the Net Proceeds are not sufficient to make the necessary acquisition or construction of property, then, if this option is selected by the Lessee, the excess of the cost thereof over the Net Proceeds will be paid by the Lessee, or appropriate property will be contributed to the Project by the Lessee and shall become a part of the Project. (c) Redemption or prepayment by Bangor of the Security, together with accrued interest thereon to the date of redemption or prepayment; provided that no part of any condemnation award may be applied for redemption or prepayment unless the Security is to be redeemed or prepaid as provided by the Indenture in the event of purchase of the Project, pursuant to Section 7.2 hereof. Unless the Lessee shall have been required to purchase the Project pursuant to the provisions of Section 7..2 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 Bangor and the Trustee in writing as to which of the ways specified in this Section the Lessee elects to have thecondemnation award applied, Any balance of the Net Proceeds not so applied shall be applied in reduction of the obligation represented by the Security or, if .18- the Security has been fully paid or provision for payment thereof has been made pursuant to the Indenture, the balance of the Net Proceeds will be paid over to the Lessee. Bangor shall cooperate fully with the Lessee in the hand- ling and conduct of any prospective or pending condemnation proceeding with respect to the Project or any part thereof and will, to the extent it may lawfully do so, permit the Lessee to litigatein any such proceeding in the name and behalf of Bangor. IV. COMMENCEMENT AND COMPLETION OF THE PROJECT 4.1 Agreement to Construct the Project The Lessee agrees that on behalf of Bangor: (a) It will cause the Facility to be constructed as herein provided on the Premises in accordance withplane and speci- fications prepared for it and in accordance with a list of require- ments attached hereto as Exhibit B and made a part hereof. All of the Project shall belong to and he the property of Bangor alone and shall be subject to this Lease. . (b) It will cause to be. -acquired and installed in the Project or on the Premises, the project Equipment provided for in the - plans and specifications, as well as any additional fixtures and fixed equipment which in the reasonable judgment of the Authorized Lessee Representative may be necessary for completion of the Projectf and as shall from time to time prior to the Completion Date be. specified in writing by the Lessee, all of which. acquisitions and installations shall be made in accordance with the Lessee'sspecifications and directions. -19- The Lessee hereby agrees that in order to effectuate the purposes of this Lease Agreement, it will make, execute, acknowledge and deliver any contracts, orders, receipts, writings and instructions, and in general do all things which may be requisite or proper, for Con- structing and completing the Project and acquiring and installing the fixtures and fixed equipment. The Lessee's interest in any contract relating to construction, furnishing of labor, materials or supplies connected with the Project will be assignable to the Trustee. So long as the Lessee is not in default under any of the provisions of this Lease, the power of the Lessee to act as provided in this para- graph shall not be terminated by any act of Banger or of the Trustee. The Lessee agrees': to construct the Project with. all reason- able dispatch; and to use its best efforts to cause construction to be completed by September 1, 1979, or as soon thereafter as maybe practicable, delays, incidents or strikes, riots, acts of God, or the public, enemy beyond the reasonable control of the Lessee excepted; but if for any 'reason such construction is not completed by said .date there shall be no diminution in or postponement of therental payments required in Section 3.4.2 'hereof to bepaid by the Lessee provided, however, that the Lessee will use its best efforts. and cause the Trustee to use its best efforts to collect any penalty pay -- menta due from the contractors dueto the failure to complete by said date. All of said penalty payments less the cost of collecting the same shall be deposited in the Security Pend under the Indenture, 4.2 Application of Bond Proceeds In order to provide funds for payment of the Cost of Con, -20- struction, Bangor, concurrently with the execution of this Lease agreement, has issued a Security and deposited the proceeds thereof with the Trustee as follows: (i) in the Security Fund a sum equal to the accrued interest, if any, to be 'paid by the purchasers of the Security, and (ii) in the Construction Food the balance of the proceeds received from said issue, after payment of costs of the issue as provided in the Indenture. 4.3 Disbursements from the Construction Fund Bangor has, in the Indenture, authorized and directed the Trustee to make payments from the Construction Fund to pay the Cost of Construction, or to reimburse the Lessee for any Cost of Construction paid by it, upon receipt of a requisition signed by the authorized Lessee Representative stating with respect to each payment to be made (1) the requisition number, (2) the name and address of the person, firm or corporation to whom payment is due, (31 the amount to be paid, and (4) that each obligation mentioned therein has been properly incurred, is a proper charge against the Construction Food, constitutes a reimbursement to Lessee for payment made by it or is unpaid, and has not been the basis of any previous withdrawal, In approving any requisition under this Section, the Trustee may rely as to the completeness and accuracy of all statements in said requisition upon the approval of suchrequisition by the Lessee, and the Lessee hereby covenants and agrees to indemnify and save. harmless Bangor and the Trustee from any liability incurred in connection with. any requisition approved by the Lessee as aforesaid. -21, 4.4 Furnishing Documents to Trustee Bangor and the Lessee agree to cause such requisitions to be directed by Bangor and the Lessee to the Trustee as may be necessary to effect payments out of the Construction Fund in accordance with Section 4.3 hereof. 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 any Cost of Construction not then due and payable, (i) construction of the Project has been completed in accordance with the plans and specifications and with. Exhibit B hereto and all labor, services, materials and supplies used in such construction have been paid for, or payment has been provided for, and - (ii) all other facilities necessary in connection with the Project have been constructed, acquired and installed in accordance with the plans and specifications and with Exhibit C hereto, and all costs and expenses incurred in connection therewith have been paid orpaymenthas been provided for. Notwithstanding the foregoing, suchcertificate shall state that it is given without prejudice to any rights against third parties which exist at thedate of suchcertificate or which. may subsequently come into being. Bangor and the Lessee agree to cooperate in causing suchcertificate to be furnished to the Trustee. Upon receipt of such certificate, the Trustee shall in accordance with Section 5.08 of the Indenture transfer all -22- monies then in the Construction Fund to the Security Fund, except for any amounts retained as aforesaid by the Trustee for any Costs of Construction. 4.6 Lessee Required to Pay in Event Construction Fond Insufficient In the event the monies in the Construction Fund available for payment of the Casts of Construction should not be sufficient to pay the Costs of Construction in full, the Lessee agrees to complete the Project and to pay that portion of the Costs of Construction in excess of the monies available therefore in the Construction Fund. Bangor does not make any warranty, either express or implied, that the monies paid into the Construction Fund and available for payment of the Costa of Con- struction will be sufficient to pay all of the Costs of Construction. The Lessee agrees that if after exhaustion of the monies in the Con- struction Food, the Lessee should pay any portion of the Costs of Construction pursuant to the provisions of this sectionr it shall not be entitled to any reimbursement therefor from Bangor Or from the. Trustee or from the holders of the Security, nor shall it be entitled to any diminution of the amounts payableunder Section. 3.4,2 hereof, 4.7 Investment of Construction Fund and Security Fund Monies Any monies held as. a part of the Construction Fund and Security. Fund shall, subject to the provisiona of Section 4,04 of the Indenture, be invested or reinvested by the Trustee at the request of, and as directed by, the Lessee, in -23= (i) bonds, treasury notes and other evidences of indebtedness of, and those unconditionally guaranteed as to the payment of principal and interest by, the United States of America; (11) bonds and notes of the Federal National Mortgage Association; (iii) obligations of the Federal Intermediate Credit Corporation; - (iv) obligations of banks or cooperatives of the Farm Credit System; (v) bonds and notes of Federal Nome Loan Banks; (vi) deposits or certificates of deposit in banks or savings banks to the extent such deposits are insured by the Federal Deposit Insurance Corporation. The Trustee may make any and all suchinvestments through its own departments or agents. V. SPECIAL COVENANTS 5.1 Suitability of the Premises Bangor makes no warranty either express or implied as to the Project or whether it will be suitable for the purposes or needs of the Lessee. 1- 5.2 Inspection of the Project The Lessee agrees that Bangor and the Trustee and their duly authorized agents shall have the right at all reasonable times, subject to the Lessee's usual safety and security requirements, to 4-' enter the Premises or the Facility and to examine and inspect the Project for the proper maintenance Of the Project. 5.3 Corporate Existence Of the The Lessee agrees that during the Lease Term it will maintain its corporate existence and will not dissolve or otherwise dispose of all or substantially all of its assets, and will not consolidate or merge with or into another corporation except with or into another domestic corporation (i.e. a corporation incorporated and .existing under. the laws of one of the states of the United States Of America or under the laws of the United States) unless, in case Of a sale of assets, the purchasing corporation, or in the case of merger or consolidation, the surviving corporation (if other than the Leasee), assumes in writing all of the obligations of the Lessee set forth in this Lease Agreement and Bangor consents in writing to such dissolution, disposition, consolidation or merger. Bangor agrees that consent shall not be withheld unreasonably. 5.4 Further Assurances and Corrective Instruments Bangor and the Lessee agree that they will, from time to time, execute, acknowledge and deliver, or cause to beexecuted, instruments as may reasonably be required for correcting any inadequate Or incorrect description of the Project hereby leased or intended to be leased or for carrying out the intention of or facilitating Performance Under this Lease Agreement. 5.5 AUthoriaed Leasee Re LesentatiVe Whenever Under the provisions of. this Lease A approval of the Lessee is required or Bangor is g°eemethe required to take some action at the request of the Lessee, such approval or such request -25- shall be made in writing by the Authorized Trustee Representative. Bangor or the Trustee shall be authorized to act an any such approval or request and the Lessee shall have no complaint against Bangor or the Trustee as a result of any such action taken. 5.6 Tax Exempt Interest The Lessee covenants that it will take no action which would render the interest on the Security subject to Federal Or State of Maine income taxes. VI. ASSIGNMENT, SUBLEASING, INDEMNIFICATION; REDEMPTION AND PREPAYMENT 6.1 Assignment and Subleasing This Lease may be assigned, and the Project may be subleased as a whole or in part, by the Lessee only with written consent of Bangor, which shall not be withheld unreasonably, and after notice to the Trustee, subject to each of the following conditions: (a) NO assignment (except pursuant to Section 5.3 hereof, relating to consolidation or merger) shall relieve the Leasee from primary liability for any of its obligations hereunder, and in the event of assignment the Lessee shall continue to remain primarily liable for payment of the amounts specified in Section 3.4.2 hereof and for performance and observance of the other agreements on its part herein provided 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 obliga- tions of the Lessee hereunder to the extent of the interest assigned or subleased. -26- (c) The Lessee shall, within thirty days after the delivery thereof, furnish or cause to be furnished to Bangor and to the Trustee a true and complete copy of each such assignment, assumption of obligation or sublease, as the case may be. (d) No assignment or sublease shall be made which would allow the assignee or subleases to use the Project for a purpose which wouldresult in the interest on the Security being taxable, nor shall an assignment or sublease be made to a party if sublease. or assignment to that party would result in the interest on the Security being taxable. No assignment or sublease shall he made which would permit the Project to cease to be an "industrial -com- mercial project' as that term is defined in the Act. - 6.2 Release and indemnification Covenants The Lessee releases Bangor from and covenants and agrees that Bangor shall not be liable for, and agrees to indemnify and hold Bangor harmless against, any loss or damage to property o any injury to or death of any person occurring on or about, or result- ing fram operation, control and maintenance of, the Project, the _ Facility or the Premises, unless caused by the willful or negligent act or omission of Bangor;. provided, that the indemnity provided in this sentence shall be effective only to the extent of any loss that may be sustained by Bangor in excess of the Net Proceeds received from any insurance carried by the Lessee with respect to the loss sustained. To this end,. the Lessee will provide for and insure, in the public liability policies required in Section. 3,4,6 hereof,. -27- not only its own liability in respect of the matters there mentioned but also the liability herein assumed. 6.3 Assignment of Bangor's Interest Bangor may mortgage the Project under the Indenture and assign its interest in and pledge any monies receivable under this Lease Agreement to the Trustee as security for the payment of the principal of and interest on the Security, but each mortgage, assign- ment or pledge shall be subject to the Lease created by this Lease Agreement. 6.4 Redemption or Prepayment of Securities Under the circumstances and subject to the conditions set forth below, at the request of the Lessee and upon 90days' notice to, and deposit by the Lessee with, the Trustee of an amount sufficient to redeem or prepay all of the Security outstanding (or a part thereof, not less than a principal amount of $50,000), Bangor shall take all steps (other than the payment of money) required by the Indenture to effect redemption or prepayment: 6.4.1 The Security may be redeemed or prepaid on any prin- cipal repayment date, after January 1, 1979, at a price of one hundred four percent (1048) of the outstanding principal amount, declining by one percent (18) after each January 1, thereafter, to one hundred percent (1004) of principal amount after January 1, 1983, 6.4.2 The Security may be redeemed or prepaid at any time at one hundred percent C100%), of principal amount in the event (i) the Project shall be condemnedor taken by eminent domain, destroyed or damaged to the extent that the Lessee is unable to -28- conduct its business at the Project, or (111 this Lease. Agreement becomes void, unenforceable or impossible of performance due to changes in Federal or State law, or (iii) the Lessee is required to cease operations at the Project as the result of any governmental action, or (iv) the Project, in the opinion of the Lesseee becomes no longer useful for the purpose for which it was intended. Upon any redemption or prepayment of the Security, accrued interest shall be paid to the date of redemption or prepayment. 6.5 Mandatory Redemption or Prepayment In the event that at any time the Security fails to qualify as an industrial development bond interest on which is exempt from Federal income taxes pursuant to Section 103 of the Federal Internal Revenue Code, the Leasee shall immediately deposit monies with the Trustee in an amount sufficient to redeem, at prices set forth fn Section 6.4.1, the outstanding Security in full and Bangor shall forthwith take all steps (other than the payment of money) to effect redemption of the Security in accordance with the Indenture. — 6.6 Installation of Lessee's. Own Machinery and Equipment The Lessee may, from time to time in its sole discretion and at its own expense, install and remove machinery, equipment and other tangible personal property in the Project not demised under this Lease Agreement, provided that the installation or removal thereof does not cause permanent injury to the Project. All such machinery, equipment and other tangible personal property (other than fixtures which become real property under the law of the State of Maine) shall remain the sole property of the Lessee in which Bangor 'shall have no interest. 129. The parties may agree, to the extent permitted by law, that specific personalty not purchased with the proceeds of the Issue, installed in or about the Project shall not constitute fixtures but shall remain personalty of. the Lessee. Bangor will cooperate with the Lessee to execute appropriate documentation of such agreement and to record the same in appropriate places to effect record notice. 6.7 Replacement of Obsolete or Worn Out Equipment In the event that any of the equipment leased by Bangor to the Lessee pursuant to this Lease Agreement from time to time becomes obsolete or worn out or inappropriate for use by the Leasee in carrying on its business under the Project, then the Lessee may dispose of such property and, at the request Of the Lessee, Bangor and the Trustee shall execute appropriate documents releasing the equipment to be disposed of from the lien of this Lease Agreement or of the Indenture; provided, however, that any such equipment to be sold or otherwise disposed of shall be replaced at the sole cost of the -Lessee by equipment of at least equal value of a nature which is appropriate for the conduct of businessof the Project, title to any such equipment to he taken in the name of Bangor and to become a part of the Project and subject to the provisions of this Lease Agreement, with Bangor to have a security interest therein. VII. OPTIONS; PURCHASE OF PROSECT 7.1 Options to Purchase The Lessee shall have, and ishereby granted, options to purchase the Project and to cancel Or terminate this Lease Agreement as follows: -30- (a) If unreasonable burdens or excessive liabilities shall have been imposed upon Bangor or the Lessee with respect to the Project or the operation thereof, including without limitation, federal, state or other ad valorem property, income or other taxes not being imposed on the date of this Lease Agreement other than ad valorem taxes presently levied upon privately owned property used for the same general purpose as the Project, in which case the purchase .price will be a sum sufficient to redeem or prepay in full the Security then outstanding, at redemption prices set forth in Section 6.4.2 and to pay all Administration Expenses incurred and to be incurred through final payment of the Security; or (b) At any time on or after September 1, 1979, if the Lessee shall find continued operation of the Project to be uneconomical in which case the purchase price will be a sum sufficient to redeem all Securities then outstanding at pricesset forth in Section 6.4.2 and to pay all Administration Expenses, calculated as in clause (a) above, plus $1. 7.2 Obligations to Purchase The Lessee shall bs obligated to purchase the project prior to. the expiration of the Lease Term and prior to the full payment of the Security (or prior to making provisionfor payment thereof in accordance with the Indenture) if any of the following shall have occurred: (a) The Project or a portion thereof shall have been damaged or destroyed to such an extent that the Lessee deems it not practicable to rebuild, repair and restore the Project; -31- (b) Condemnation of all or substantially all of the Project or the taking by eminent domain of Such use or control of the Project as to render it unsatisfactory to the Lessee for its intended use; on (c) As a result of any changes in the Constitution of the State Of Maine or the Constitution of the united States of America or o£.legislative or administrative action (whether state or federal) or of final decree, judgment or order of any court or administrative body (whether state or federal) or of final decree, judgment or order of any court or administrative body (whether state or federal) this Lease shall have become void or unenforceable or impossible of -per- formance in accordance with the intent and purpose of the parties as expressed in this Lease. In any such case the purchase price shall be a sum sufficient, together with any funds held by the Trustee and available for such purpose, to redeem in full the Security thenoutstandingat 100% of principal amount and to pay all Administration Expenses accrued and to accrue through full payment for the Security, 7.3 Purchase at Expiration of Lease The Lessee agrees that it will purchase and Bangor agrees it will sell and convey, by Quitclaim Beed with Covenant, to the Lessee the Project for $1 at the Cancellation, termination or expires Stich of the Lease Term and, upon full payment of the Security or upon provision for payment thereof having been made, in accordance with the provisions of the Indenture. -32- 7.4 Notice of Purchase To exercise an option granted under this Article VII the Lessee shall give written notice to Bangor and to the Trustee specify- ing therein the date of closing of the purchase (not less than ninety '(90) days following delivery of the notice), the reason for exercise of the option and the purchase price which shall apply. 7.5 Conveyance Pursuant to this Article - Upon any purchase of the Project under this Article, Bangor, upon receipt of the purchase price and after the discharge by the Lessee of all of its obligations under this Lease Agreement, will deliver to the Lessee documents conveying to the Lessee title to the property being purchased, as such property then exists, subject to the following: (a) those liens and encumbrances existing prior to acquisition -of the property by Bangor or created by the Lessee or to the creation or suffering of which the Lessee consented; (b) 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 Agreement; CO Permitted. Encumbrances other than the Indenture and this Lease Agreement; and (dl, if the purchase is on account of condemnation, the rights and title of the condemning authority. 7.6 Relative Position of this Article and Indenture The rights and options granted to the Lessee in this Article vii shall be and remain prior and superior to the Indenture and may be exercised whether or not the Lessee is in default here, under; provided, that such. default will not result in non£ul£ill- ment of any condition to the exercise of any suchright or option. -33- VIII. EVENTS OF DEFAULT AND REMEDIES 8.1 Events of Default Defined The following shall be "events of default" under this Lease Agreement and the terms "event of default" or "default" shall mean, whenever they are used in this Lease Agreement, any one or more of the following events: (a) Failure by the Lessee to pay the rent required to be paid under Section 3.4.2 hereof at the time specified therein and the continuation of said failure for three working days, not count- ing Saturdays, Sundays and holidays, after receipt by the Lessee of notice given by the Trustee that the rent referred to in such notice has not been received. (b) Failure by the Lesseeto observe and perform any - covenant, condition or agreement on its part to. be observed or per- formed, other than as referred to in subsection (a) of this Section, for a period of thirty days after written notice, specifying such failure and requesting that it be remedied, given to the Lessee by Bangor or by the Trustee, unless Bangor and the Trustee 'shall agree inwriting to an extension of such time prior to its. expiratZon) pro, vided, however, if the failure stated in the 'notice cannot be corrected within the applicable period, Bangor and the Trustee will not unreasonably withhold their consent to an extension of such time if corrective action is instituted by the Lessee within the applicable period and diligently pursued until the default is corrected. (c) The dissolution or liquidation of the Lessee or the filing by the Lessee of a voluntary petition in bankruptcy, or -34- failure by the Lessee promptly to lift (or furnish bond for, if legally permissible) any execution, garnishment or attachment of such consequence as will impair its ability to carry on its opera- tions,at the Project, or adjudication (not set aside within ninety days) of 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 composition with 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 Federal Bankruptcy Act, as amended, or under any similar act which may hereafter be enacted. The term "dissolution or liquidation of the Lessee" as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Lessee resulting either from a merger or consolidation of the Lessee into or with another corporation or a dissolution or liquidation of the Leasee following a transfer of all or substantially all of its assets as an entirety, under the conditions permitting such actions contained in Section 5.3 hereof. The foregoing provisions of this Section are subject to. the following limitations: If by reason of force majeure the Lessee is unable in whole or in part to carry Out its agreements on Sts part therein contained, other than the obligations on the part of the Lessee contained in section 3.4 hereof, the Lessee shall not be deemed in default during the continuance of such inability. The -35- term"force majeure" as used herein shall mean, without limitation, the following: acts Of God; strikes, lockouts or other industrial disturbances, acts of public enemies, orders of any kind of the government of the United States or of the State of Maine or any Of their departments, agencies or officials, or any civil or military authority; insurrections; riots; earthquakes; fires; storms;. floods; explosions; breakage or accident to machinery; partial or entire failure of utilities; or any other cause or event not reasonably within the control of the Lessee. The Lessee agrees, however, to - remedy with all reasonable dispatch the cause or causes preventing the Lessee from carrying out its agreements; provided, that the settlement of strikes, lockouts and other industrial disturbances shall beentirely within the discretion of the Lessee, and the Lessee shall not be required to make settlement of strikes, lockouts and other industrial disturbances by acceding to the demands of the opposing partyorparties when such course is in the judgment Of the Lessee unfavorable to the Lessee. 8.2 Remedies On Default Whenever any event of default referred to in Section 8.1 hereof shall have happened and be continuing, with the consent p$ the Trustee as provided in Section 4.10 of the Indenture, Bangor may take any one or more of the following remedial steps: (a) Bangor may declare all installments of rent payable under Section 3.4.2 hereof for the remainder of the Lease Term t0 be immediately due and payable, whereupon the same shall become immediately due and payable. -36- (b) Bangor may re-enter and take .possession of the Project without terminating this Lease Agreement, and sublease the Project for the account of the Lessee, holding the Lessee liable for the difference in the rent and other amounts payable by any sublessee and the rents and other amounts payable by the Lessee hereunder. (c) Bangor may have access to and inspect, examine and make copies of the books and records and any and all accounts, and data of the Lessee relating to the Project. (d) Bangor may take whatever action at law or an equity may appear necessary or desirable to collect the rent 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 Agreement. 8.3 No Remedy Exclusive No -remedy herein conferred upon or reserved to Bangor is intended to be -exclusive of any ether available remedy or remedies, - but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease and now hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. ?n order to entitle Bangor to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than such notice as may be herein expressly required. Such rights and remedies as are given Bangor hereunder shall also extend to the Trustee, and the Trustee and the holders of the Security, subject to the provisions, of the Indenture, shall be entitled to the benefit of all covenants and agreements herein contained. 8.4 Agreement to Pay Attorneys' Fees and Expenses In the event the Lessee should default under any of the provisions of this Lease Agreement and Bangor 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 Bangor the reasonable fee of such attorneys and such other reasonable expenses so incurred by Bangor. 8.5 No Additional WaiverImpliedby One Waiver In the event any agreement contained in this Lease Agreement should be breached by either party and thereafter waived by the other party, such waiver shall be limited to the particular breach sowaived and shall not be deemed to waive any other breach hereunder. - - TX. MISCELLANEOUS PROVISIONS 9.1 Lease Term This Lease Agreement shall remain in full force and effect from the date hereof to and including September 1, 1993, subject to Article VIII (relating to defaultlt provided, however, that this Lease Agreement shall be terminated prior to that date upon the purchase of the Project by the Leasee or upon prepayment or redemption of Ube Securities and the fulfillment of all of the obligations of the Lessee under this Lease Agreement. -38- 9.2 Notices All notices, certificates or other communications here- under shall he sufficiently given and shall be deemed given when delivered or mailed by registered mail, postage prepaid, addressed as follows: if to Bangor, at City Nall, Bangor, Maine Q4401, Attention: City Clerk; if to the Lessee, at the address of the Facility, Target Industrial Plaza West Subdivision, Bangor, Maine 04401, Attention: Plant Manager, and a copy to Winter, Dexter Boadi Providence, Mode Island 02944, Attention: Presidents and if to the Trustee, to its principal office, Bangor, Maine 04401, Attention: Corporate Trust Department. A duplicate copy of each notice, certificate or other communication given hereunder by either Bangor or the Lessee to the other shall also be given to the Trustee. Bangor, the Lessee and the Trustee may, by notice given hereunder, designate any further or different addresses to which. subsequent notices, certificates or other communications shall be sent. 9.3 Binding Effect This Lease Agreement shall inure to the benefit of and shall be binding upon Bangor, the Lessee and their respective suc= cessors and assigns, subject, however, to the provisions of Section 5.3 (relating to corporate existence), 6.1 [relating to assignment and subleasing), and Sections 3.4.3 and 6,3 [relating to assignment of the interest of Bangor) hereof. 9.4 Severability In the event any provision of this Lease Agreement shall be held invalid or unenforceable by any court of competent jurisdiction -39- such holding shall not invalidate or render unenforceable any other provision hereof. 9.5 Overpayment by Lessee It is agreed by the parties hereto that any amounts remaining in the Security Fund upon expiration or termination of this Lease Agreement, after payment in full of the Security (or provision there- fore in accordance with the Indenture) and the fees and expenses of the Trustee in accordance with the Indenture shall be paid to the Lessee by the Trustee as an overpayment of rents. 9.6 Amendments, Changes and Modifications Subsequent to the issuance of the Securiti and prior to its payment in full (or provision for the payment thereof having been made in accordance with the provisions of the Indenture), this Lease Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the Trustee. 9.7 Execution in Counterparts This Lease Agreement may be simultaneously executed in several counterparts, each of which shall be an original and all of which shall constitute but one and the same instrument. - 9.8 Net Lease This Lease Agreement shall be deemed and construed to be a net lease" and the Lessee shall pay absolutely net during the Lease Term the rent and all other payments required hereunder, free from any deductions, and without abatement, deduction or set-off other than those herein expressly provided. -40- 9.9 Applicable Law This Lease Agreement shall be governed by and construed in accordance with the laws of the State of Maine. IN WITNESS WHEREOF, Bangor and the Lessee have caused this Lease Agreement to be executed in their respective corporate names and their respective corporate seals to be hereunder affixed and attested by their duly authorized officers, allas of the date first above written. Witness: CITY OF BANGOR ('Bangor") -41- Thereunto duly authorized V. P. WINTER DISTRIBUTING CO, ('Lessee") By Its Thereunto duly authorized but W 20-A A certain lot or parcel of land situated in the City of Bangor, Casty of Penobscot, State of Maine bo,nvded and described as follows: Being all of Int W 20.A as shown on Plan entitled "Target Industrial Plaza West Revision of but W 17, W 18, W 19, and W 20 Bangor, Penobscot Casty, Maine" by Andrew J. Bhyka, land Surveyor, Bangor, fain dated Jure 1978 and recorded in Penobscot Registry of Deeds, in Plan File , more particularly described as folhais: Beginning at an iron rad at the southeast corner of but W 20-A as shown on aforesaid Plan of Target Industrial Plass West, said iron rod being In the northerly lire of the Mine Central Railroad right- of-way and at the southwest comer of land formerly wined by Simpson; thence by and along the said northerly lire of the Maine Central Railroad, N 660 32' 11" W fon hundred and twenty (420.00) feet to the southeast comer of Lot W 19-A as shown on aforesaid Plan; thence by and along the easterly line of said but W 19-A, N 120 16' 15" E four hundred sixty and seven hundredths (460.07) feet to the northeast corner of said lot W 19-A being in the southerly line of Target Industrial Circle; thence by and along the southerly line of Target Industrial 6lrcle, S 660 32' 11" E four hundred and twenty (420.00) feet to the northeast corner of aforesaid lot W 20-A being in the westerly line of said land formerly wined by Simpson; thence southerly by and along the westerly line of said formerly Simpson land, S 120 16' 15" W four lussdred and sixty and seven hundredths (460.07) feet to the point of beginning. Containing 189,554 square feet and being the portion of * (SOCRCE OF TITLE TO BE SUPPLIED BY ATR)RIdE() � Reference Meridian is Magnetic North, 1954 as shown m aforesaid plan of Target Industrial Plaza West. Subject to, however, a City of Bangor sewer easenxnt crossing the southerly end of the above des- cribed parcel. * (NO ABSTRACT AVAILABLE, REFERENCE TO BE SUPPLim BY ATTORNEY) *++* �A✓ FURTHER RESOLVED that subparagraph a of the fifth resolution of the July 10, 1978 resolutions shall be amended to read as follows: "The Security may be redeemed or prepaid in its entirety at the option of the City of Bangor. Redemption or prepayment may be made on any re- payment date 0$ 0y' atter the first principal re- payment date at a price of one hundred three percent (1038) of the outstanding principal amount, declining by one percent (18) on each anniversary thereafter to one hundred percent (1008) of principal amount after the anniversary 1983." FURTHER RESOLVED that all references to "Lot W20 and a portion of Lot W19" shall be amended to read "Lot W20A" and all references to "Winter Distributing Company, Inc." shall be amended to read "V. P. Winter Distributing Co.". FURTHER RESOLVED that the July 10, 1978 Resolutions, as amended hereby, are hereby confirmed. FURTHER RESOLVED that the Trust Agreement dated as of August 14, 1973, submitted to this meeting and incorporated in the minutes thereof under the title "Indenture of Mortgage and Deed of Trust Between the City of Bangor and The Merrill Trust Company, be and it hereby is approved, and that the municipal officers and other officers of the City of Bangor be and they hereby are authorized to execute the same on behalf of the City, with such additions, deletions and alterations as the Officer or officers executing the same may determine, such determination to be conclusively evidenced by such execution. FURTHER RESOLVED that the Lease Agreement dated as of August 14, 1978 (including an assignment by the City of Bangor, Maine to the Merrill Trust Company, as Trustee, of the Lease Agreement as well a all rentals and other amounts payable thereunder), submitted to this meeting and incorporated in the minutes thereof under the title Lease Agreement between the City of Bangor and V. P. Winter Distributing Co.", be and it hereby is approved, and that municipal officers be and they hereby are authorized to execute the same on behalf of the City as required by the ordinances of the City of Bangor with such additions, deletions and alterations as the officer or officers executing the same meycda£aBmine, such determination to be conclusively evidenced by such execution. FURTHER RESOLVED that the City of Bangor shall assign all rentals and other amounts payable under the Lease Agreement to the Trustee as security for the Security.