Document:

ex10_38.htm

Exhibit 10.38

 

 

CITY OF FREDONIA, KANSAS

AS ISSUER

AND

VALENT AEROSTRUCTURES, LLC

AS TENANT

 

 

LEASE

DATED AS OF APRIL 1, 2012

 

 

$2,184,726

INDUSTRIAL REVENUE BONDS

SERIES 2012A

(VALENT AEROSTRUCTURES PROJECT) 

 

  

  

  

 

LEASE

TABLE OF CONTENTS

 

	 	 	
Page

	 	 	 
	ARTICLE I	  	
1

	 	 	 
	  	
Section 1.1

	
Definitions

	
1

	 	 	 	 
	  	
Section 1.2

	
Representations and Covenants by the Tenant

	
1

	 	 	 	 
	  	
Section 1.3

	
Representations and Covenants by the Issuer

	
5

	 	 	 	 
	ARTICLE II	  	
6

	 	 	 
	  	
Section 2.1

	
Granting of Leasehold

	
6

	 	 	 	 
	ARTICLE III	  	
6

	 	 	 
	  	
Section 3.1

	
Basic Rent

	
6

	 	 	 	 
	  	
Section 3.2

	
Additional Rent

	
6

	 	 	 	 
	  	
Section 3.3

	
Rent Payable Without Abatement or Setoff

	
6

	 	 	 	 
	  	
Section 3.4

	
Prepayment of Basic Rent

	
7

	 	 	 	 
	  	
Section 3.5

	
Deposit of Rent by the Trustee

	
7

	 	 	 	 
	  	
Section 3.6

	
Acquisition of Bonds

	
7

	 	 	 	 
	ARTICLE IV	  	
7

	 	 	 
	  	
Section 4.1

	
Disposition of Original Proceeds; Project Fund

	
7

	 	 	 	 
	ARTICLE V	  	
7

	 	 	 
	  	
Section 5.1

	
Acquisition of Land and Improvements

	
7

	 	 	 	 
	  	
Section 5.2

	
Project Contracts

	
8

	 	 	 	 
	  	
Section 5.3

	
Payment of Project Costs for Buildings and Improvements

	
8

	 	 	 	 
	  	
Section 5.4

	
Payment of Project Costs for Machinery and Equipment

	
9

	 	 	 	 
	  	
Section 5.5

	
Completion of Project

	
9

	 	 	 	 
	  	
Section 5.6

	
Deficiency of Project Fund

	
9

	 	 	 	 
	  	
Section 5.7

	
Right of Entry by the Issuer and the Trustee

	
9

	 	 	 	 
	  	
Section 5.8

	
Machinery and Equipment Purchased by the Tenant

	
9

	 	 	 	 
	  	
Section 5.9

	
Project Property of the Issuer

	
9

	 	 	 	 
	  	
Section 5.10

	
Kansas Retailers’ Sales Tax

	
10

 

  

i

  

 

	ARTICLE VI	  	
10

	 	 	 
	  	
Section 6.1

	
Insurance as a Condition to Disbursement

	
10

	 	 	 	 
	  	
Section 6.2

	
Insurance After Completion

	
11

	 	 	 	 
	  	
Section 6.3

	
General Insurance Provisions

	
11

	 	 	 	 
	  	
Section 6.4

	
Evidence of Title

	
12

	 	 	 	 
	ARTICLE VII	  	
12

	 	 	 
	  	
Section 7.1

	
Impositions

	
12

	 	 	 	 
	  	
Section 7.2

	
Receipted Statements

	
12

	 	 	 	 
	  	
Section 7.3

	
Contest of Impositions

	
12

	 	 	 	 
	  	
Section 7.4

	
Ad Valorem Taxes

	
12

	 	 	 	 
	ARTICLE VIII	  	
13

	 	 	 
	  	
Section 8.1

	
Use of Project

	
13

	 	 	 	 
	  	
Section 8.2

	
Environmental Provisions

	
13

	 	 	 	 
	ARTICLE IX	  	
15

	 	 	 
	  	
Section 9.1

	
Sublease by the Tenant

	
15

	 	 	 	 
	  	
Section 9.2

	
Assignment by the Tenant

	
16

	 	 	 	 
	  	
Section 9.3

	
Release of the Tenant

	
16

	 	 	 	 
	  	
Section 9.4

	
Mergers and Consolidations

	
16

	 	 	 	 
	  	
Section 9.5

	
Covenant Against Other Assignments

	
16

	 	 	 	 
	ARTICLE X	  	
17

	 	 	 
	  	
Section 10.1

	
Repairs and Maintenance

	
17

	 	 	 	 
	  	
Section 10.2

	
Removal, Disposition and Substitution of

	
17

	 	 	 	 
	ARTICLE XI	  	
17

	 	 	 	 
	  	
Section 11.1

	
Alteration of Project

	
17

	 	 	 	 
	ARTICLE XII	  	
17

	 	 	 
	  	
Section 12.1

	
Additional Improvements

	
17

 

  

ii

  

 

	ARTICLE XIII	  	
18

	 	 	 
	  	
Section 13.1

	
Securing of Permits and Authorizations

	
18

	 	 	 	 
	  	
Section 13.2

	
Mechanic’s Liens

	
18

	 	 	 	 
	  	
Section 13.3

	
Contest of Liens

	
18

	 	 	 	 
	  	
Section 13.4

	
Utilities

	
18

	 	 	 	 
	ARTICLE XIV	  	
19

	 	 	 
	  	
Section 14.1

	
Indemnity

	
19

	 	 	 	 
	ARTICLE XV	  	
19

	 	 	 
	  	
Section 15.1

	
Access to Project

	
19

	 	 	 	 
	ARTICLE XVI	  	
20

	 	 	 
	  	
Section 16.1

	
Option to Extend Basic Term

	
20

	 	 	 	 
	ARTICLE XVII	  	
20

	 	 	 
	  	
Section 17.1

	
Option to Purchase Project

	
20

	 	 	 	 
	  	
Section 17.2

	
Quality of Title and Purchase Price

	
20

	 	 	 	 
	  	
Section 17.3

	
Closing of Purchase

	
21

	 	 	 	 
	  	
Section 17.4

	
Effect of Failure to Complete Purchase

	
21

	 	 	 	 
	  	
Section 17.5

	
Application of Condemnation Awards if the Tenant

	
21

	 	 	 	 
	  	
Section 17.6

	
Option to Purchase Unimproved Portions of Land

	
21

	 	 	 	 
	  	
Section 17.7

	
Quality of Title - Purchase Price

	
22

	 	 	 	 
	  	
Section 17.8

	
Closing of Purchase

	
22

	 	 	 	 
	  	
Section 17.9

	
Effect of Purchase on Lease

	
23

	 	 	 	 
	  	
Section 17.10

	
Effect of Failure to Complete Purchase

	
23

	 	 	 	 
	ARTICLE XVIII	  	
23

	 	 	 
	  	
Section 18.1

	
Damage and Destruction

	
23

	 	 	 	 
	  	
Section 18.2

	
Condemnation

	
24

	 	 	 	 
	  	
Section 18.3

	
Effect of Tenant’s Defaults

	
24

	 	 	 	 
	ARTICLE XIX	  	
25

	 	 	 
	  	
Section 19.1

	
Change of Circumstances; Determination of Taxability

	
25

 

  

iii

  

 

	ARTICLE XX	  	
25

	 	 	 
	  	
Section 20.1

	
Remedies on Default

	
25

	 	 	 	 
	  	
Section 20.2

	
Survival of Obligations

	
27

	 	 	 	 
	  	
Section 20.3

	
No Remedy Exclusive

	
27

	 	 	 	 
	ARTICLE XXI	  	
27

	 	 	 
	  	
Section 21.1

	
Performance of the Tenant’s Obligations by the Issuer

	
27

	 	 	 	 
	ARTICLE XXII	  	
27

	 	 	 
	  	
Section 22.1

	
Surrender of Possession

	
27

	 	 	 	 
	ARTICLE XXIII	
28

	 	 
	  	
Section 23.1

	
Notices

	
28

	 	 	 	 
	ARTICLE XXIV	
28

	 	 
	  	
Section 24.1

	
Triple-Net Lease

	
28

	 	 	 	 
	  	
Section 24.2

	
Funds Held by the Trustee After Payment of Bonds

	
28

	 	 	 	 
	ARTICLE XXV	
28

	 	 
	  	
Section 25.1

	
Rights and Remedies

	
28

	 	 	 	 
	  	
Section 25.2

	
Waiver of Breach

	
29

	 	 	 	 
	 	
Section 25.3

	
The Issuer Shall Not Unreasonably Withhold Consents

	
29

	 	 	 	 
	ARTICLE XXVI	
29

	 	 
	  	
Section 26.1

	
The Issuer May Not Sell

	
29

	 	 	 	 
	  	
Section 26.2

	
Quiet Enjoyment and Possession

	
29

	 	 	 	 
	  	
Section 26.3

	
Financial Report; Furnishing of Financial Information

	
29

	 	 	 	 
	  	
Section 26.4

	
Issuer’s Obligations Limited

	
29

	 	 	 	 
	ARTICLE XXVII	
30

	 	 
	  	
Section 27.1

	
Investment Tax Credit; Depreciation

	
30

 

  

iv

  

 

	ARTICLE XXVIII	
30

	 	 
	  	
Section 28.1

	
Amendments

	
30

	 	 	 	 
	  	
Section 28.2

	
Granting of Easements

	
31

	 	 	 	 
	  	
Section 28.3

	
Security Interests

	
31

	 	 	 	 
	  	
Section 28.5

	
Construction and Enforcement

	
32

	 	 	 	 
	  	
Section 28.6

	
Invalidity of Provisions of Lease

	
32

	 	 	 	 
	  	
Section 28.7

	
Covenants Binding on Successors and Assigns

	
32

	 	 	 	 
	  	
Section 28.8

	
Section Headings

	
32

	 	 	 	 
	  	
Section 28.9

	
Execution of Counterparts

	
32

 

	
Signatures and Acknowledgments

	
33

	
Appendix A, Form of Requisition for Payment of Project Costs

	
A-1

	
Appendix B, Form of Certificate of Completion

	
B-1

	
Appendix C, Glossary of Words and Terms

	
C-1

	
Schedule I, Description of Property

	
S-1

  

v

  

LEASE

THIS LEASE, made and entered into as of April 1, 2012 between the City of Fredonia, Kansas (the “Issuer”), and Valent Aerostructures, LLC (the “Tenant”).

 

WITNESSETH:

WHEREAS, the Issuer is a municipal corporation incorporated as a city of the second class, duly organized and existing under the laws of the State, with full lawful power and authority to enter into this Lease by and through its governing body; and

 

WHEREAS, the Issuer, in furtherance of the purposes and pursuant to the provisions of the laws of the State, particularly K.S.A. 12-1740 et seq., as amended (the “Act”), and in order to provide for the economic development and welfare of the City of Fredonia, Kansas and its environs and to provide employment opportunities for its citizens and to promote the economic stability of the State, has proposed and does hereby propose that it shall:

 

(a)           Acquire the Project (as defined in the Indenture);

 

(b)           Lease the Project to the Tenant for the rentals and upon the terms and conditions hereinafter set forth; and

 

(c)           Issue, for the purpose of paying Project Costs (as defined in the Indenture), the Series 2012A Bonds under and pursuant to and subject to the provisions of the Act and the Indenture (herein defined), said Indenture being incorporated herein by reference and authorized by an ordinance of the governing body of the Issuer, and

 

WHEREAS, the Tenant, pursuant to the foregoing proposals of the Issuer, desires to lease the Project from the Issuer for the rentals and upon the terms and conditions hereinafter set forth;

 

NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein set forth, Issuer and the Tenant do hereby covenant and agree as follows:

 

ARTICLE I

 

Section 1.1       Definitions.  Capitalized terms not otherwise defined in this Lease shall have the meanings set forth in Appendix B to the Indenture.  In addition to the words, terms and phrases defined in Appendix B to the Indenture and elsewhere in this Lease, the capitalized words, terms and phrases as used herein shall have the meanings set forth in the Glossary of Words and Terms attached as Appendix C, unless the context or use indicates another or different meaning or intent.

 

Section 1.2        Representations and Covenants by the Tenant.  The Tenant makes the following covenants and representations as the basis for the undertakings on its part herein contained:

 

  

1

  

(a)           Representations and Covenants Relating to the Code.

 

(i)             The Tenant will not use or cause or allow any portion of the Original Proceeds to be used or applied to provide any private or commercial golf course, country club, massage parlor, tennis club, skating facility (including roller skating, skateboard and ice skating), racquet sports facility (including any handball or racquetball court), hot tub facility, suntan facility, racetrack, airplane, skybox or other private luxury box, any health club facility, any facility primarily used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises.

 

(ii)           At least 95% of the Original Proceeds will be expended for Project Costs paid not more than 60 days prior to the Official Action Date (unless otherwise permitted under Treas.  Reg. § 1.150-2).

 

(iii)           The Tenant will not make or cause or permit to be made, whether by the Trustee or otherwise, any use of the proceeds (as defined in the Code) of the Series 2012A Bonds which would cause the Series 2012A Bonds to be “arbitrage bonds” within the meaning of Section 148 of the Code.  The Tenant further covenants and agrees that it will comply with, and will take all action reasonably required to insure that the Trustee complies with, all applicable requirements of said Section 148 and Treasury Regulations promulgated thereunder until all of the Bonds, including interest thereon and any applicable redemption premium, have been paid.

 

(iv)          The weighted average maturity of the Series 2012A Bonds (determined in accordance with Section 147(b) of the Code), does not exceed 120 percent of the average reasonably expected economic life of the Improvements (as determined in accordance with Section 147(b) of the Code) purchased with Original Proceeds.

 

(v)           The Tenant has reviewed the Issuer’s Form 8038 prepared for filing in connection with the issuance of the Series 2012A Bonds, and represents that the information set forth therein is true and d accurate.

 

(vi)          The Tenant will file or cause to be filed such periodic supplemental statements or notices with the Internal Revenue Service or such other designated governmental agency as may now or hereafter be required by applicable statutes or regulations in order to comply with Section 144(a)(4) of the Code.  The Tenant further covenants and agrees that it will not take any action or permit any action to be taken that would adversely affect the exclusion from gross income for federal income tax purposes of the interest on the Series 2012A Bonds.

 

(vii)         The Project, and each portion thereof, constitutes either land or property of a character subject to the allowance for depreciation as required by Section 144(a) of the Code.  Not more than 25% of the Original Proceeds will be used to acquire land in accordance with Section 147(c) of the Code.  All expenditures for and costs of the Project have been or will be items of Project Costs as defined herein.

 

  

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(viii)         As of the date of issuance of the Series 2012A Bonds, there will not be outstanding any obligations (other than the Series 2012A Bonds) the interest on which is exempt from Federal income tax by virtue of the provisions of Section 144(a) of the Code and the proceeds of which were to be used with respect to the Project or with respect to other facilities located within the boundaries of Issuer, or facilities contiguous to, or integrated with, the Project or any such facilities, and the principal user (as defined in the Code) of which is or will be the Tenant or any other Principal User.

 

(ix)           The Tenant will comply with the Arbitrage Instructions (defined in the Indenture) and will pay to the United States or the Trustee all arbitrage rebate payments required under Section 148(f) of the Code, to the extent such amounts are not available to the Trustee in the Rebate Fund held under the Indenture.

 

(x)            The Tenant will not authorize or permit more than 2% of the Original Proceeds to be expended for Costs of Issuance, in compliance with Section 147(g) of the Code.

 

(xi)           The Tenant will not authorize or permit any portion of the Original Proceeds to be used to acquire any property (or any interest therein) unless the first use of such property is pursuant to such acquisition, or unless appropriate Rehabilitation Expenditures are made to such property in accordance with Section 147(d) of the Code.

 

(xii)          The Tenant did not place any property included in the Improvements in service more than eighteen months before the date of issuance of the Series 2012A Bonds.

 

(xiii)         The Project, when completed, will constitute a “manufacturing facility” within the definition of Section 144(a)(12) of the Code, and the Tenant has no present intention of making any substantial use of the Project other than as such “manufacturing facility.”

 

(xiv)         As of the date of issuance of the Series 2012A Bonds, the aggregate principal amount of the Series 2012A Bonds and all “Section 103(b)(6)(D) capital expenditures” as defined in Treas. Reg. §1.103-10(b) paid or incurred during the three-year period which begins three years before the date of issuance of the Series 2012A Bonds is less than $20 million.

 

The Issuer and the Tenant agree to amend the covenants contained in this subsection in such manner as shall be set forth in an opinion of Bond Counsel as being necessary to maintain the excludability from gross income for federal income tax purposes of the interest on the Bonds, and, for the purpose of implementing such amendments, the special covenants contained in this Section may be amended at any time, with the consent of the Trustee, by a written agreement executed by the Issuer and the Tenant pursuant to this subsection without notice to or the consent of any Owner(s) of Bonds.

 

  

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(b)           General Representation and Covenants.

 

(i)             The Tenant is a Delaware limited liability company, duly organized and existing under the laws of said state, and is duly authorized and qualified to do business in the State, with lawful power and authority to enter into this Lease, acting by and through its members.

 

(ii)            Except as otherwise permitted herein, the Tenant shall (1) maintain and preserve its existence and organization as a limited liability company and its authority to do business in the State and to operate the Project; and (2) not initiate any proceedings of any kind whatsoever to dissolve or liquidate without (A) securing the prior written consent thereto of the Issuer and (B) making provision for the payment in full of the principal of and interest and redemption premium, if any, on the Bonds.  If, at any time during the term of this Lease or the Indenture, the Tenant changes its state of organization, changes its form of organization, changes its name, or takes any other action which could affect the proper location for filing Uniform Commercial Code financing statements or continuation statements or which could render existing filings seriously misleading or invalid, the Tenant shall immediately provide written notice of such change to the Trustee, and thereafter promptly deliver to the Trustee such amendments and/or replacement financing statements, together with an Opinion of Counsel to the effect that such amendments and/or replacement financing statements have been properly filed so as to create a perfected security interest in the collateral securing the Indenture, and such additional information or documentation regarding such change as the Trustee may reasonably request.

 

(iii)           Neither the execution and/or delivery of this Lease, the consummation of the transactions contemplated hereby or by the Indenture, nor the fulfillment of or compliance with the terms and conditions of this Lease contravenes in any material respect any provisions of its articles of organization or operating agreement, or conflicts in any material respect with or results in a material breach of the terms, conditions or provisions of any mortgage, debt, agreement, indenture or instrument to which the Tenant is a party or by which it is bound, or to which it or any of its properties is subject, or would constitute a material default (without regard to any required notice or the passage of any period of time) under any of the foregoing, or would result in the creation or imposition of any lien, charge or encumbrance upon any of the property or assets of the Tenant under the terms of any mortgage, debt, agreement, indenture or instrument, or violates in any material respect any existing law, administrative regulation or court order or consent decree to which the Tenant is subject.

 

(iv)           This Lease constitutes a legal, valid and binding obligation of the Tenant enforceable against the Tenant in accordance with its terms.

 

(v)            The Tenant agrees to operate and will operate the Project, or cause the Project to be operated as a “facility,” as that term is contemplated in the Act, from the date of the Issuer’s acquisition of the Project to the end of the Term.

 

  

4

  

 

(vi)           The Tenant has obtained or will obtain any and all permits, authorizations, licenses and franchises necessary to construct the Improvements to enable it to operate and utilize the Project for the purposes for which it was leased by the Tenant under this Lease.

 

(vii)          The estimated total cost of the Improvements to be financed by the proceeds of the Series 2012A Bonds, plus interest on the Series 2012A Bonds during acquisition, construction and installation of the Improvements, and Costs of Issuance of the Series 2012A Bonds, will not be less than the original aggregate principal amount of the Series 2012A Bonds.

 

(viii)         After reasonable inquiry and investigation, the Tenant is not aware of (A) any Hazardous Substances generated from or located on the Project; (B) any prior use of the Land which might reasonably involve Hazardous Substances; or (C) any investigations, complaints or inquiries of any kind, from any source, concerning Hazardous Substances with respect to the Project or properties adjoining the Project.

 

(ix)           The Tenant will not use or permit the Project to be used by any other person or entity in any manner which would involve the generation, storage, disposal or transportation of Hazardous Substances, except in strict compliance with applicable Environmental Laws.

 

Section 1.3             Representations and Covenants by the Issuer.  The Issuer makes the following representations and covenants as the basis for the undertakings on its part herein contained:

 

(a)           It is a municipal corporation duly incorporated and existing as a city of the second class under the constitution and laws of the State.  Under the provisions of the Act and the Ordinance, the Issuer has the power to enter into and perform the transactions contemplated by this Lease and the Indenture and to carry out its obligations hereunder and thereunder.

 

(b)           It will submit to the Internal Revenue Service in accordance with Section 149 of the Code a completed Internal Revenue Service Form 8038 or other similar form provided by the Internal Revenue Service with respect to the Series 2012A Bonds.

 

(c)           It has not, in whole or in part, assigned, leased, hypothecated or otherwise created any other interest in, or disposed of, or caused or permitted any lien, claim or encumbrance to be placed against, the Project, except for this Lease, the assignment of this Lease to the Trustee, any Permitted Encumbrances, any Impositions, and the pledge of the Project pursuant to the Indenture.

 

(d)           Except as otherwise provided herein or in the Indenture, it will not during the Term, in whole or in part, assign, lease, hypothecate or otherwise create any other interest in, or dispose of, or cause or permit any lien, claim or encumbrance to be placed against, the Project, except Permitted Encumbrances, this Lease, any Impositions and the pledge of the Project pursuant to the Indenture.

 

  

5

  

 

(e)           It has pledged the Project and the net rentals therefrom generated under the Lease to payment of the Bonds in the manner prescribed by the Act, and has duly authorized the execution and delivery of this Lease and the Indenture and the issuance, sale and delivery of the Series 2012A Bonds.

 

(f)            It has notified or obtained the consent to and/or approval of the issuance of the Series 2012A Bonds by each municipal corporation and political subdivision the notification, consent or approval of which is required by the provisions of the Act and the Code.

 

ARTICLE II

 

Section 2.1             Granting of Leasehold.  The Issuer by these presents hereby rents, leases and lets the Project unto the Tenant and the Tenant hereby rents, leases and hires the Project for the Basic Term from the Issuer, for the rentals and upon and subject to the terms and conditions hereinafter set forth.

 

ARTICLE III

 

Section 3.1             Basic Rent.  The Issuer reserves and the Tenant covenants and agrees to pay Basic Rent to the Trustee, as assignee of the Issuer, for the account of the Issuer, for deposit in the Debt Service Fund, on each Basic Rent Payment Date.  Basic Rent shall be payable at the principal office of the Trustee on each Basic Rent Payment Date.

 

Section 3.2             Additional Rent.  Within 30 days after receipt of written notice thereof, the Tenant shall pay any Additional Rent required to be paid pursuant to this Lease not already paid.

 

Section 3.3             Rent Payable Without Abatement or Setoff.  The Tenant covenants and agrees with and for the express benefit of the Issuer and the Owner(s) of Bonds that all payments of Basic Rent and Additional Rent shall be made by the Tenant as the same become due, and that the Tenant shall perform all of its obligations, covenants and agreements hereunder without notice or demand and without abatement, deduction, setoff, counterclaim, recoupment or defense or any right of termination or cancellation arising from any circumstance whatsoever, whether now existing or hereafter arising, and irrespective of whether the Improvements shall have been acquired, started or completed, or whether the Issuer’s title to the Project or any part thereof is defective or non-existent, and notwithstanding any failure of consideration or commercial frustration of purpose, the eviction or constructive eviction of the Tenant or any subtenant, any Change of Circumstances, any change in the tax or other laws of the United States of America, the State, or any municipal corporation of either, any change in the Issuer’s legal organization or status, or any default of the Issuer hereunder, and regardless of the invalidity of any action of the Issuer or any other event or condition whatsoever, and regardless of the invalidity of any portion of this Lease, and the Tenant hereby waives the provisions of any statute or other law now or hereafter in effect contrary to any of its obligations, covenants or agreements under this Lease or which releases or purports to release the Tenant therefrom.  Nothing in this Lease shall be construed as a waiver by the Tenant of any rights or claims the Tenant may have against the Issuer under this Lease or otherwise, but any recovery upon such rights and claims shall be had from the Issuer separately, it being the intent of this Lease that the Tenant shall be unconditionally and absolutely obligated to perform fully all of its obligations, agreements and covenants under this Lease (including the obligation to pay Basic Rent and Additional Rent) for the benefit of the Owner(s) of Bonds.

 

  

6

  

 

Section 3.4             Prepayment of Basic Rent.  The Tenant may at any time prepay all or any part of the Basic Rent.  Prepayments of Basic Rent will be applied to redemption of Bonds (other than mandatory sinking fund redemption), without payment of redemption premium, as directed in writing by the Tenant, to the extent that Bonds are subject to optional redemption at the time of prepayment.  Otherwise, prepayments of Basic Rent will be deposited in the Debt Service Fund to be applied to purchase of Bonds as provided in the Indenture, or to optional redemption of Bonds (including redemption premium and interest) at the earliest date on which Bonds are subject to optional redemption.

 

Section 3.5             Deposit of Rent by the Trustee.  As assignee of the Issuer’s rights hereunder, the Trustee shall deposit, use and apply all payments of Basic Rent and Additional Rent in accordance with the provisions of this Lease and the Indenture.

 

Section 3.6             Acquisition of Bonds.  If the Tenant acquires any Outstanding Bonds, it may present the certificate(s) representing such part of the Bonds to the Trustee for cancellation, and upon such cancellation, the Tenant’s obligation to pay Basic Rent shall be reduced in the same manner as provided for prepayments by the Tenant of Basic Rent.  In no event, however, shall the Tenant’s obligation to pay Basic Rent be reduced in such a manner that the Trustee shall not have on deposit in the Debt Service Fund, on the next succeeding Payment Date, funds sufficient to pay the maturing principal of, redemption premium, if any, and interest on Outstanding Bonds as and when the same shall become due and according to the terms of the Bonds.

 

ARTICLE IV

 

Section 4.1             Disposition of Original Proceeds; Project Fund.  The Original Proceeds shall be paid over to the Trustee for the account of the Issuer as the Bonds are issued.  The Trustee shall pay from such Original Proceeds into the Debt Service Fund the full amount of any accrued interest received upon such sale.  The remainder of such proceeds shall be deposited by the Trustee in the Project Fund to be used and applied as provided in this Lease and the Indenture.

 

ARTICLE V

 

Section 5.1             Acquisition of Land and Improvements.  The Tenant shall prior to or concurrently with the issuance of the Bonds, assign or cause to be conveyed to the Issuer by warranty deed, subject to Permitted Encumbrances, the Land as described in Schedule I, and by bill of sale such of the Improvements as are then completed, installed or in progress.  The Tenant shall also concurrently with such conveyance make provisions for the discharge or subordination to the interests acquired by the Issuer of any liens or encumbrances incurred by it in connection with the construction, installation or development of the Improvements other than Permitted Encumbrances.

 

  

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Section 5.2             Project Contracts.  Prior to the delivery of this Lease, the Tenant may have entered into a contract or contracts with respect to the acquisition and/or construction of the Improvements.  Those contracts, and any such contracts entered into by the Tenant or the Issuer after delivery of this Lease, are hereinafter referred to as the “Project Contracts.” Prior to the delivery hereof, certain work has been or may have been performed on the Improvements pursuant to said Project Contracts or otherwise.  The Tenant hereby covenants with the Issuer to perform the Project Contracts for the benefit of the Issuer as holder of title to the Project as well as its own benefit as tenant under this Lease, and the Issuer hereby designates the Tenant as the Issuer’s agent for the purpose of executing and performing the Project Contracts.  After the execution hereof, the Tenant shall cause the Project Contracts to be fully performed by the contractor(s), subcontractor(s) and supplier(s) thereunder in accordance with the terms thereof, and the Tenant covenants to cause the Improvements to be acquired, constructed, installed and/or completed in accordance with the Project Contracts.  The Tenant warrants that the construction and/or acquisition of the Improvements in accordance with said Project Contracts will result in the Project being suitable for use by the Tenant as a “manufacturing” facility.  Any and all amounts received by the Issuer, the Trustee or the Tenant from any of the contractors or other suppliers by way of breach of contract, refunds or adjustments shall become a part of and be deposited in the Project Fund.

 

Section 5.3             Payment of Project Costs for Buildings and Improvements.  The Issuer hereby agrees to pay for the acquisition or construction of the Improvements or any repairs or replacements to be made pursuant to Article XVIII of this Lease, but solely from Original Proceeds of the Bonds (or Net Proceeds, as applicable) as deposited in the Project Fund, and hereby authorizes and directs the Trustee to pay for the same, but solely from the Project Fund, from time to time, after issuance of the Bonds while the Tenant is in compliance with the requirements of Section 6.1 hereof, upon receipt by the Trustee of a requisition certificate signed by the Authorized Tenant Representative in the form set forth as Appendix A hereto which is incorporated herein by reference.  With regard to materials and/or labor furnished to the Project at the order of the Tenant without formal contract, or by subcontract with the Tenant acting as general contractor, which could form the basis of a statutory mechanic’s or subcontractor’s lien, the Trustee may disburse payment therefor only upon receipt of releases or waivers of statutory mechanic’s or subcontractor’s liens by all vendors or subcontractors receiving payment or furnishing labor or materials as a subcontractor of the vendor or subcontractor receiving payment.

 

The sole obligation of the Issuer under this paragraph shall be to cause the Trustee to make such disbursements upon receipt of such certificates and releases or waivers.  The Trustee may rely fully on any such certificates and shall not be required to make any investigation in connection therewith, except that the Trustee shall investigate requests for reimbursements directly to the Tenant and shall require such supporting evidence as would be required by a reasonable and prudent fiduciary.

 

  

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Section 5.4             Payment of Project Costs for Machinery and Equipment [Intentionally Omitted].

 

Section 5.5             Completion of Project.  The Tenant warrants that the Project, when completed, will be occupied and used by the Tenant for its lawful business purposes.  The Tenant covenants and agrees to proceed diligently to complete or acquire the Improvements on or before the Completion Date.  Upon completion of the Improvements, the Tenant shall cause the Authorized Tenant Representative to deliver a Certificate of Completion, in the form substantially as attached hereto as Appendix B, to the Trustee.  In the event funds remain on hand in the Project Fund on the date the Certificate of Completion is furnished to the Trustee or on the Completion Date, whichever shall first occur, such remaining funds shall be transferred by the Trustee to the Debt Service Fund on the earlier of receipt of the Certificate of Completion or the Completion Date and shall be applied in accordance with the provisions of the Indenture.

 

Upon completion, the Tenant shall obtain an appraisal of the Project in a form and substance satisfactory to the Trustee which satisfies all of the applicable regulations adopted by the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.  The appraisal shall be subject to the internal review by the Trustee of the data, assumptions and conclusions found in the appraisal.

 

Section 5.6             Deficiency of Project Fund.  If Bond Proceeds in the Project Fund are insufficient to pay fully all Project Costs (including reimbursements to the Tenant for Project Costs advanced by the Tenant prior to issuance of the Bonds) and to fully complete the Improvements, lien free (except for Permitted encumbrances), the Tenant covenants to pay the full amount of any such deficiency by making payments directly to the contractors and to the suppliers of materials, machinery, equipment, property and services as the same become due, and the Tenant shall save the Issuer and the Trustee whole and harmless from any obligation to pay such deficiency.

 

Section 5.7             Right of Entry by the Issuer and the Trustee.  The duly authorized agents of the Issuer and/or the Trustee shall have the right (but shall not be required) at any reasonable time and upon reasonable notice to the Tenant prior to the completion of the Improvements to have access to the Project or any part thereof for the purpose of inspecting the acquisition, installation or construction thereof.

 

Section 5.8             Machinery and Equipment Purchased by the Tenant [Intentionally Omitted].

 

Section 5.9             Project Property of the Issuer.  All Improvements, all work and materials on Improvements as such work progresses, any Project Additions, anything under this Lease which becomes, is deemed to be, or constitutes a part of the Project, and the Project as fully completed, repaired, rebuilt, rearranged, restored or replaced by the Tenant under the provisions of this Lease, except as otherwise specifically provided herein, shall immediately when erected or installed become the absolute property of the Issuer.  Any Improvements which become a part of the real estate as fixtures shall remain separate from the Tenant’s property unless and until purchased by the Tenant from the Issuer as provided in this Lease.

 

  

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Section 5.10           Kansas Retailers’ Sales Tax.

 

The parties have entered into this Lease in contemplation that, under the existing provisions of K.S.A. 79-3606, subsections (b) and (d) and other applicable laws, sales of tangible personal property or services purchased in connection with construction of the Improvements are entitled to exemption from the tax imposed by the Kansas Retailers’ Sales Tax Act.  The parties agree that the Issuer shall, upon the request of and with the Tenant’s assistance, promptly obtain from the State and furnish to the contractors and suppliers a project exemption certificate for the construction of the Improvements.  The Tenant covenants that said exemption certificate shall be used only in connection with the purchase of tangible personal property or services becoming a part of the Project.  The Issuer shall not be responsible for any failure on the part of the State to issue such project exemption certificate.

 

ARTICLE VI

 

Section 6.1             Insurance as a Condition to Disbursement.  As a condition precedent to payment of Costs of Issuance or disbursement of other Project Costs (other than Costs of Issuance) from the Project Fund pursuant to Article V hereunder, the following policies of insurance shall be in full force and effect:

 

(a)           General accident and public liability insurance covering the Tenant’s operations in or upon the Project (including coverage for losses arising from the ownership, maintenance, use or operation of any automobile, truck or other vehicle in or upon the Project) under which the Tenant shall be insured and the Issuer and the Trustee shall be additional insureds or mortgagees, as their interests in the Project appear, in an amount not less than the then maximum liability of a governmental entity for claims arising out of a single occurrence as provided by the Kansas tort claims act or other similar future law (currently $500,000 per occurrence); which policy shall provide that such insurance may not be canceled by the issuer thereof without at least 30 days’ advance written notice to the Issuer, the Tenant and the Trustee, such insurance to be maintained throughout the Term of this Lease;

 

(b)           Statutory workers’ compensation insurance;

 

(c)           With regard to new buildings and improvements constituting a part of the Improvements, insurance insuring the Improvements while under construction against fire, lightning and all other risks covered by the broadest form extended coverage endorsement then and from time to time thereafter in use in the State to the Full Insurable Value of such Improvements.  Such insurance coverage shall name the Tenant as insured and the Issuer and the Trustee as additional insureds or mortgagees and loss payees, as their respective interests appear, and all Net Proceeds received under such policy or policies by the Issuer or the Tenant shall be paid over to the Trustee and be applied as set forth in Article XVIII hereof, and

 

(d)           Original Proceeds shall be disbursed to pay Project Costs upon receipt by the Trustee of waivers of statutory mechanic’s and materialmen’s liens signed by the contractor and all vendors and subcontractors being paid from such disbursement, in the manner and to the extent required by Section 5.4 of this Lease for disbursements made for materials or labor furnished to the Project site by direct contract with the Tenant.

  

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Section 6.2             Insurance After Completion.  The Tenant shall and covenants and agrees that it will, prior to or simultaneously with the expiration of the insurance provided for in the preceding section and throughout the Term at its sole cost and expense, keep the Improvements continuously insured against loss or damage by fire, lightning and all other risks covered by the broadest form extended coverage insurance endorsement then in use in the State in an amount equal to the Full Insurable Value thereof in such insurance company or companies as it may select and shall at all times maintain general accident and public liability insurance required pursuant to Section 6.1(a), all of which policies shall name the Tenant, the Issuer, and the Trustee as insureds or mortgagees, as their interests appear.

 

Section 6.3             General Insurance Provisions.

 

(a)           Within 30 days of renewal dates of expiring policies, certificates of the insurance provided for in this Article shall be delivered by the Tenant to the Trustee.  All policies of such insurance and all renewals thereof shall name the Tenant as insured and the Issuer and the Trustee as insureds or mortgagees and loss payees as their respective interests may appear, shall contain a provision that such insurance may not be canceled or amended by the issuer thereof without at least 30 days’ written notice to the Issuer, the Tenant and the Trustee and shall be payable to the Issuer, the Tenant and the Trustee as their respective interests appear.  The Issuer and the Tenant each hereby agree to do anything necessary, be it the endorsement of checks or otherwise, to cause any payment of insurance proceeds to be made to the Trustee, as long as such payment is required by this Lease to be made to the Trustee.  Any charges made by the Trustee for its services in connection with insurance payments shall be paid by the Tenant.

 

(b)           Each policy of insurance hereinabove referred to shall be issued by a nationally recognized responsible insurance company authorized under the laws of the State to assume the risks covered therein, except that the Tenant may be self-insured as to any required insurance coverages under a program of self-insurance approved by the State Commissioner of Insurance or other applicable State regulatory authority.

 

(c)           Certificates of insurance evidencing the insurance coverages herein required shall be filed with the Trustee continuously during the term of this Lease.

 

(d)           Each policy of insurance hereinabove referred to may be subject to a reasonable deductible or self-insured retention.

 

(e)           Each policy of insurance required herein may be provided through blanket policies maintained by the Tenant.

 

(f)           Anything in this Lease to the contrary notwithstanding, the Tenant shall be liable to the Issuer and the Trustee pursuant to the provisions of this Lease or otherwise, as to any loss or damage which may have been occasioned by the negligence of the Tenant, its agents, licensees, contractors, invitees or employees.

 

  

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Section 6.4             Evidence of Title.  The Tenant shall furnish evidence of title in the form of a policy of owner’s title insurance, insuring the Issuer’s fee simple title to the Land, as of the date and time immediately prior to conveyance to the Issuer, subject to Permitted Encumbrances, in an amount equal to $2,400,000.  Such title insurance policy shall contain no exceptions, other than the title insurance company’s standard printed exceptions, Permitted Encumbrances, and the encumbrance created by this Lease.  The Issuer and the Tenant agree that any and all proceeds therefrom during the Basic Term (a) if received before the completion of the building Improvements shall be paid into and become a part of the Project Fund, (b) if received thereafter but before the Bonds and interest thereon have been paid in full, shall be paid into and become a part of the Debt Service Fund, and (c) if received after the Bonds, redemption premium, if any, and interest thereon have been paid in full, shall belong and be paid to the Tenant.

 

ARTICLE VII

 

Section 7.1             Impositions.  The Tenant shall, during the Term of this Lease, bear, pay and discharge, before the delinquency thereof, any and all Impositions.  In the event any Impositions may be lawfully paid in installments, the Tenant shall be required to pay only such installments thereof as become due and payable during the term of this Lease as and when the same become due and payable.

 

Section 7.2             Receipted Statements.  Unless the Tenant exercises its right to contest any Impositions in accordance with Section 7.3 hereof, the Tenant shall, within 30 days after the last day for payment without penalty or interest of an Imposition which the Tenant is required to bear, pay and discharge pursuant to the terms hereof, deliver to the Trustee a copy of the statement issued therefor duly receipted to show the payment thereof.

 

Section 7.3             Contest of Impositions.  The Tenant shall have the right, in its own or the Issuer’s name or both, to contest the validity or amount of any Imposition by appropriate legal proceedings instituted before the Imposition complained of becomes delinquent if, and provided, the Tenant (i) before instituting any such contest, shall give the Issuer and the Trustee written notice of its intention to do so and, if requested in writing by the Issuer or the Trustee, shall deposit with the Trustee a surety bond of a surety company acceptable to the Issuer as surety, in favor of the Issuer and the Trustee, as their interests may appear, or cash, in a sum of at least the amount of the Imposition so contested, assuring the payment of such contested Impositions together with all interest and penalties to accrue thereon and court costs, (ii) diligently prosecutes any such contest and at all times effectively stays or prevents any official or judicial sale therefor, under execution or otherwise, and (iii) promptly pays any final judgment enforcing the Imposition so contested and thereafter promptly procures record release or satisfaction thereof.  The Tenant shall indemnify and hold the Issuer whole and harmless from any costs and expenses the Issuer may incur related to any such contest.

 

Section 7.4             Ad Valorem Taxes.  The parties acknowledge that under the existing provisions of K.S.A. 79-201; as amended, the property acquired, constructed or purchased with the proceeds of the Bonds (except such property used for certain retail uses) is eligible to receive exemption from ad valorem taxation for a period up to 10 calendar years after the calendar year in which the Bonds are issued, provided the Issuer has complied with certain notice, hearing and procedural requirements established by law, and proper application has been made.  The Issuer represents that such notice, hearing and procedural requirements will have been complied with at the Issue Date.  The Issuer will, at the Tenant’s request, with information furnished by Tenant and the Trustee, make all necessary filings regarding the application for 100% ad valorem tax exemption for the full 10-year period in the calendar year following the calendar year in which the Bonds were issued, and will renew said application from time to time and take any other action as may be necessary to maintain such ad valorem tax exemption in full force and effect, in accordance with K.S.A. 79-201a, 79-210 et seq. and the requirements of the State Court of Tax Appeals.  If it becomes necessary to litigate the issue of availability or applicability of the ad valorem tax exemption, the Issuer will cooperate fully with Tenant in pursuing such litigation, but all litigation costs and reasonable attorney fees must be paid by Tenant, either directly or as Additional Rent.

 

  

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ARTICLE VIII

 

Section 8.1             Use of Project.  Subject to the provisions of this Lease, the Tenant shall have the right to use the Project for any and all purposes allowed by law and contemplated by the constitution of the State and the Act, as long as they are consistent with Code limitations on use of property purchased with Original Proceeds.  The Tenant shall comply in all material respects with all statutes, laws, ordinances, orders, judgments, decrees, regulations, directions and requirements of all federal, state, local and other governments or governmental authorities, now or hereafter applicable to the Project or to any adjoining public ways, as to the manner of use or the condition of the Project or of adjoining public ways.  The Tenant shall comply with the mandatory requirements, rules and regulations of all insurers under the policies required to be carried under the provisions of this Lease.  The Tenant shall pay all costs, expenses, claims, fines, penalties and damages that may in any manner arise out of, or be imposed as a result of, the failure of the Tenant to comply with the provisions of this Article.

 

Section 8.2             Environmental Provisions.

 

(a)           The Tenant hereby covenants that it will not cause or permit any Hazardous Substances (as defined herein) to be placed, held, located or disposed of, on, under or at the Land or the Project, other than in the ordinary course of business and in compliance with all applicable Environmental Laws.

 

(b)           In furtherance and not in limitation of any indemnity elsewhere provided to the Issuer hereunder and in the Indenture, the Tenant hereby agrees to indemnify and hold harmless the Issuer, the Trustee and the Owner(s) of Bond(s) from time to time from and against any and all losses, liabilities, including strict liability, damages, injuries, expenses, including reasonable attorneys’ fees, costs of any settlement or judgment, costs of investigation, consultants, testing, sampling, cleanup, or defense, and claims of any and every kind paid, incurred or suffered, with respect to, or as a direct or indirect result of, the actual or alleged presence on or under, or the escape, seepage, leakage, spillage, discharge, emission, discharging or release from the Land or the Project of any Hazardous Substance (including, without limitation, any losses, liabilities, reasonable attorneys’ fees, costs of any settlement or judgment or claims asserted or arising under any federal, state or local Environmental Law or so-called “Superfund” or “Super lien” law, or any other applicable Environmental Law, rule, regulation, order or decree regulating, relating to or imposing liability, including strict liability, or standard of conduct concerning, any Hazardous Substance) regardless of whether or not caused by or within the control of the Tenant.

 

  

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(c)           If the Tenant receives any notice of (1) the happening of any event involving the use, other than in the ordinary course of business and in compliance with all applicable Environmental Laws, spill, release, leak, seepage, discharge or cleanup of any Hazardous Substance on the Land or the Project or in connection with the Tenant’s operations thereon or (2) any complaint, order, citation or notice with regard to air emissions, water discharges or any other environmental, health or safety matter affecting the Tenant (an “Environmental Complaint”) from any person (including, without limitation, the United States Environmental Protection Agency (the “EPA”), and the Kansas Department of Health and Environment (“KDHE”) then the Tenant shall immediately notify the Issuer and the Trustee in writing.  With respect to any such notice that relates to a condition or conditions on the Project site, the Tenant shall promptly initiate action to remediate the conditions cited in the notice, and shall diligently pursue such remediation at its expense to the satisfaction of the city authority.

 

(d)           If the Tenant fails to initiate action to remediate as required in subsection (c) of this section, or otherwise fails to discharge its obligations under this Section 8.2, the Issuer shall have the right, but not the obligation, and without limitation of the Issuer’s other rights under this Lease, to enter the Project or to take such actions as it may deem necessary or advisable to inspect, clean up, remove, resolve or minimize the impact of, or to otherwise deal with, any Hazardous Substance or Environmental Complaint following receipt of any notice asserting the existence on the Project of any Hazardous Substance or an Environmental Complaint pertaining to the Project or any part thereof which?  if true, could result in an order, suit or other action against the Tenant and/or which, in the reasonable judgment of the Issuer, could jeopardize its interests under this Lease.  All reasonable costs and expenses incurred by the Issuer in the exercise of any such rights shall be payable by the Tenant as Additional Rent on demand, and if not so paid, shall bear interest until paid at the average rate of interest on the Bonds plus 200 basis points.

 

(e)           If an Event of Default shall have occurred, at the request of the Issuer or the Trustee, the Tenant shall periodically perform (at the Tenant’s expense) an environmental audit and, if reasonably deemed necessary by the Issuer or the Trustee, an Environmental Assessment, (each of which must be reasonably satisfactory to the Issuer and the Trustee) of the Project, or the hazardous waste management practices and/or hazardous waste disposal sites used by the Tenant with respect to the Project.  Said audit and/or Environmental Assessment shall be conducted by an environmental consultant satisfactory to the Issuer and the Trustee.  Should the Tenant fail to perform any environmental audit or risk assessment within 30 days of the written request of the Issuer or the Trustee, either shall have the right, but not the obligation, to retain an environmental consultant to perform any such environmental audit or risk assessment.  All costs and expenses incurred by the Issuer or the Trustee in the exercise of such rights shall be payable by the Tenant as Additional Rent on demand, and if not so paid, shall bear interest until paid at the average rate of interest on the Bonds plus 200 basis points.

 

  

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(f)           The Tenant shall not install nor permit to be installed in the Project friable asbestos or any substance containing asbestos and deemed hazardous by Environmental Law applicable to the Project and respecting such material, and with respect to any such material currently present in the Project, shall promptly either (1) remove any material which such applicable regulations deem hazardous and require to be removed or (2) otherwise comply with such applicable Environmental Law, at the Tenant’s expense.  If the Tenant shall fail to so remove or otherwise comply, the Issuer may declare an Event of Default and/or do whatever is necessary to eliminate said substances from the Project or otherwise comply with the applicable Environmental Law or order, and the costs thereof shall be payable by the Tenant on demand, and if not so paid, shall bear interest until paid at the average rate of interest on the Bonds plus 200 basis points.  The Tenant shall defend, indemnify, and save the Issuer, the Trustee and the Owner(s) of Bond(s) harmless from all costs and expenses (including consequential damages) asserted or proven against the Tenant, or incurred to comply with such regulations.

 

(g)           The provisions of this Section 8.2 shall survive the termination of this Lease or exercise of the Tenant’s option to purchase the Project, except with respect to obligations which arise solely and exclusively as a result of the use, spill, release, leak, seepage or discharge of Hazardous Substances on the Land or the Project after the Project is no longer occupied by the Tenant.

 

ARTICLE IX

 

Section 9.1            Sublease by the Tenant.  The Tenant may sublease the Project to a single party or entity, with the prior written consent of the Issuer and upon receipt of a written opinion of Bond Counsel addressed to the Issuer and the Tenant that the proposed sublease will not render interest payable on the Bonds taxable for federal income tax purposes.  In the event of any such subleasing, the Tenant shall remain fully liable for the performance of its duties and obligations hereunder, and no such subleasing and no dealings or transactions between the Issuer or the Trustee and any such subtenant shall relieve the Tenant of any of its duties and obligations hereunder.

 

Any such subleases shall include the following provisions:

 

(1)           No subtenant shall be permitted to use the Project or any part thereof, without the prior written consent of the Tenant and the Trustee and an approving opinion of Bond Counsel, for retail food and beverage service, automobile sales or service, or the provision of recreation or entertainment;

 

(2)           No subtenant shall be permitted to use any portion of the Project for any private or commercial golf course, country club, massage parlor, tennis club, skating facility (including roller skating, skateboard and ice skating), racquet sports facility (including any handball or racquetball court), hot tub facility, suntan facility, racetrack, airplane, skybox or other private luxury box, any health club facility, any facility primarily used for gambling, or any store the principal business of which is the sale of alcoholic beverages for consumption off premises; and

 

  

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(3)           Any subtenant shall use the Project only as a “manufacturing facility” within the definition of Section 144(a)(12) of the Code, unless the written opinion of Bond Counsel is obtained to the effect that the proposed use of the Project will not render interest payable on the Bonds taxable for federal income tax purposes, or constitute an Event of Taxability.

 

Any such sublease shall be subject and subordinate in all respects to the provisions of this Lease.

 

Section 9.2            Assignment by the Tenant.  The Tenant may assign, mortgage, sell, or otherwise transfer its interest in this Lease only with the prior written consent of the Issuer.  In the event of any such assignment, the Tenant shall remain fully liable for the performance of its duties and obligations hereunder, except to the extent hereinafter provided, and no such assignment and no dealings or transactions between the Issuer or the Trustee and any such assignee shall relieve the Tenant of any of its duties and obligations hereunder, except as may be otherwise provided in the following Section.

 

Section 9.3             Release of the Tenant.  If, in connection with an assignment by the Tenant of its interest in this Lease, (a) the Issuer and the Owners of at least seventy-five percent (75%) in aggregate principal amount of the Outstanding Bonds (including any Additional Bonds) shall file with the Trustee and the Original Purchaser their prior written consent to such assignment, and (b) the proposed assignee shall expressly assume and agree to perform all of the obligations of the Tenant under this Lease; then the Tenant shall be fully released from all obligations accruing hereunder after the date of such assignment.

 

Section 9.4             Mergers and Consolidations.  Notwithstanding the provisions of Sections 9.2 and 9.3 above, if the Tenant shall assign or transfer, by operation of law or otherwise, its interests in this Lease in connection with a transaction involving the merger or consolidation of the Tenant with or into, or a sale, lease or other disposition of all or substantially all of the property of the Tenant as an entirety to another person, association, corporation or other entity, and (a) the Issuer shall file with the Trustee its prior written consent to such assignment, transfer or merger, (b) the proposed assignee, transferee or surviving corporation shall expressly assume and agree to perform all of the obligations of the Tenant under this Lease and the Guaranty Agreement with regard to the Bonds, and (c) the Tenant shall furnish the Trustee and the Issuer with evidence in the form of financial statements accompanied by a proforma balance sheet prepared by an independent certified public accountant of recognized standing showing that the net worth of such proposed assignee, transferee or surviving entity immediately following such assignment, transfer or merger will be at least equal to the net worth of the Tenant as shown by the most recent financial statements of the Tenant furnished to the Trustee pursuant to this Lease; then and in such event the Tenant shall be fully released from all obligations accruing hereunder after the date of such assignment, transfer or merger.

 

Section 9.5             Covenant Against Other Assignments.  The Tenant will not assign or in any manner transfer its interests under this Lease, nor will it suffer or permit any assignment thereof by operation of law, except in accordance with the limitations, conditions and requirements herein set forth.

 

  

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ARTICLE X

 

Section 10.1           Repairs and Maintenance.  The Tenant covenants and agrees that it will, during the Term of this Lease, at its own expense, keep and maintain the Project and all parts thereof in good condition and repair.

 

Section 10.2           Removal, Disposition and Substitution of Machinery or Equipment [Intentionally Omitted].

 

ARTICLE XI

 

Section 11.1          Alteration of Project.  The Tenant shall have and is hereby given the right, at its sole cost and expense, to make such additions, changes and alterations in and to any part of the Project as the Tenant from time to time may deem necessary or advisable, provided however, the Tenant shall not make any major addition, change or alteration which will adversely affect the intended use or structural strength or value of any part of the Improvements.  All additions, changes and alterations made by the Tenant pursuant to the authority of this Article shall (a) be made in a workmanlike manner and in strict compliance with all laws and ordinances applicable thereto, (b) when commenced, be prosecuted to completion with due diligence, and (c) when completed, shall be deemed a part of the Project; provided, however, that additions of machinery, equipment and/or personal property of the Tenant, not purchased or acquired from proceeds of the Bonds and not constituting a part of the Project shall remain the separate property of the Tenant and may be removed by the Tenant prior to or as provided in Section 22.1 hereof.

 

ARTICLE XII

 

Section 12.1           Additional Improvements.  The Tenant shall have and is hereby given the right, at its sole cost and expense, to construct on the Land or within areas occupied by the Improvements, or in airspace above the Project, such additional buildings and improvements as the Tenant from time to time may deem necessary or advisable.  All additional buildings and improvements constructed by the Tenant pursuant to the authority of this Article shall, during the Term, remain the property of the Tenant and may be added to, altered or razed and removed by the Tenant at any time during the Term hereof.  The Tenant covenants and agrees (a) to make all repairs and restorations, if any, required to be made to the Project because of the construction of, addition to, alteration or removal of, said additional buildings or improvements, (b) to keep and maintain said additional buildings and improvements in good condition and repair, ordinary wear and tear excepted, (c) to promptly and with due diligence either raze and remove from the Land, in a good, workmanlike manner, or repair, replace or restore such of said additional buildings or improvements as may from time to time be damaged by fire or other casualty, and (d) that all additional buildings and improvements constructed by the Tenant pursuant to this Article which remain in place after the termination of this Lease for any cause other than the purchase of the Project pursuant to Article XIII hereof shall, upon and in the event of such termination, become the separate and absolute property of the Issuer.

 

  

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ARTICLE XIII

 

Section 13.1           Securing of Permits and Authorizations.  The Tenant shall not do or permit others under its control to do any work in or in connection with the Project or related to any repair, rebuilding, restoration, replacement, alteration of or addition to the Project, or any part thereof; unless all requisite municipal and other governmental permits and authorizations shall have first been procured and paid for.  All such work shall be done in a good and workmanlike manner and in compliance with all applicable building, zoning and other laws, ordinances, governmental regulations and requirements and in accordance with the requirements, rules and regulations of all insurers under the policies required to be carried under the provisions of this Lease.

 

Section 13.2          Mechanic’s Liens.  The Tenant shall not do or suffer anything to be done whereby the Project, or any part thereof, is encumbered by any mechanic’s or other similar lien.  Should any mechanic’s or other similar lien ever be filed against the Project, or any part thereof; the Tenant shall discharge the same of record within 30 days after the date of filing.  Notice is hereby given that the Issuer does not authorize or consent to and shall not be liable for any labor or materials furnished to the Tenant or anyone claiming by, through or under the Tenant upon credit, and that no mechanic’s or similar liens for any such labor, services or materials shall attach to or affect the reversionary or other estate of the Issuer in and to the Project, or any part thereof.

 

Section 13.3           Contest of Liens.  The Tenant, notwithstanding the above, shall have the right to contest any such mechanic’s or other similar lien if within said 30-day period stated above it (a) notifies the Issuer and the Trustee in writing of its intention so to do, and if requested by the Trustee or the Issuer, deposits with the Trustee a surety bond issued by a surety company acceptable to the Issuer as surety, in favor of the Issuer, or cash, in the amount of the lien claim so contested, indemnifying and protecting the Issuer from and against any liability, loss, damage, cost and expense of whatever kind or nature growing out of or in any way connected with said asserted lien and the contest thereof, (b) diligently prosecutes such contest, at all times effectively staying or preventing any official or judicial sale of the Project or any part thereof or interest therein, under execution or otherwise, and (c) promptly pays or otherwise satisfies any final judgment adjudging or enforcing such contested lien claim and thereafter promptly procures record release or satisfaction thereof.

 

Section 13.4           Utilities.  All utilities and utility services used by the Tenant in, on or about the Project shall be contracted for by the Tenant in the Tenant’s own name and the Tenant shall, at its sole cost and expense, procure any and all permits, licenses or authorizations necessary in connection therewith.

 

  

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ARTICLE XIV

 

Section 14.1          Indemnity.  The Tenant agrees, whether or not the transactions contemplated by this Lease, the Bonds or the Indenture are consummated, to indemnify and hold harmless the Issuer and its officers, directors, officials, employees and agents, including the Trustee as assignee of the Issuer’s rights under this Lease, and the Original Purchaser and each of its officers, directors, employees and agents (any or all of the foregoing referred to hereafter as “Indemnified Persons”), from and against all claims, actions, suits, proceedings, expenses, judgments, damages, penalties, fines, assessments, liabilities, charges or other costs (including, without limitation, all attorneys’ fees and expenses incurred in connection with enforcing this Lease or collecting any sums due hereunder and any claim or proceeding or any investigations undertaken hereunder) relating to, resulting from, or in connection with (a) any cause in connection with the Project, including, without limitation, the acquisition, design, construction, installation, equipping, operating, maintenance or use thereof; (b) any act or omission of the Tenant or any of its agents contractors, servants, employees or licenses in connection with the use or operation of the Project; (c) any cause in connection with the issuance and sale of the Bonds, (d) a misrepresentation or breach of warranty by the Tenant hereunder or under any of the documents executed by the Tenant in connection with this Lease, or (e) any violation by the Tenant of any of its covenants hereunder or under any of the other documents executed by the Tenant in connection with the Bonds or this Lease.  This indemnity is effective only with respect to any loss incurred by any Indemnified Person not due to willful misconduct, gross negligence, or bad faith on part of such Indemnified Person.  In case any action or proceeding shall be brought against one or more Indemnified Person and with respect to which such Indemnified Person may seek indemnity as provided herein, such Indemnified Person shall promptly notify the Tenant in writing and the Tenant shall promptly assume the defense thereof, including the employment of counsel reasonable satisfactory to such Indemnified Person or Indemnified Persons, the payment of all expenses and the right to negotiate and consent to settlement; but the failure to notify the Tenant as provided shall not relieve Tenant from any liability of duty under this Section, so long as Tenant is given reasonable opportunity to defend such claim.

 

ARTICLE XV

 

Section 15.1           Access to Project.  The Issuer, for itself and its duly authorized representatives and agents, including the Trustee, reserves the right to enter the Project at all reasonable times during usual business hours throughout the Term, upon reasonable notice, for the purpose of (a) examining and inspecting the same, (b) performing such work made necessary by reason of the Tenant’s default under any of the provisions of this Lease, and (c) after an Event of Default, for the purpose of exhibiting the Project to prospective purchasers, lessees or mortgagees.  The Issuer may, during the progress of said work mentioned in (b) above, keep and store on the Project all necessary materials, supplies and equipment and shall not be liable for inconvenience, annoyances, disturbances, loss of business or other damage suffered by reason of the performance of any such work or the storage of such materials, supplies and equipment.

 

  

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ARTICLE XVI

 

Section 16.1          Option to Extend Basic Term.  The Tenant shall have and is hereby given the right and option to extend the Basic Term of this Lease for the Additional Term provided that (a) the Tenant shall give the Issuer written notice of its intention to exercise the option at least 30 days prior to the expiration of the Basic Term and (b) the Tenant is not in Default hereunder at the time it gives the Issuer such notice or at the time the Additional Term commences.  In the event the Tenant exercises such option, the terms, covenants, conditions and provisions set forth in this Lease shall be in full force and effect and binding upon the Issuer and the Tenant during the Additional Term except that the Basic Rent during any extended term herein provided for shall be the sum of $100.00 per year, payable in advance on the first Business Day of such Additional Term.

 

ARTICLE XVII

 

Section 17.1           Option to Purchase Project.  Subject to the provisions of this Article, the Tenant shall have the right and option to purchase the Project at any time during the Term hereof and for 120 days thereafter.  The Tenant shall exercise its option by giving the Issuer written notice of the Tenant’s election to exercise its option and specifying the date, time and place of closing, which date (the “Purchase Date”) shall neither be earlier than 30 days nor later than 180 days after the notice is given.  The Tenant may not, however, exercise such option if the Tenant is in Default hereunder on the Purchase Date unless all Defaults are cured upon payment of the purchase price specified in Section 17.2.

 

Section 17.2           Quality of Title and Purchase Price.  If said notice of election to purchase is given, the Issuer shall sell and convey all of its interests in the Project to the Tenant on the Purchase Date free and clear of all liens and encumbrances except (a) Permitted Encumbrances, (b) those to which title was subject on the date of conveyance to the Issuer of the Land, or to which title became subject with the Tenant’s written consent, or which resulted from any failure of the Tenant to perform any of its covenants or obligations under this Lease, (c) taxes and assessments, general and special, if any, and (d) the rights of any party having condemned or who is attempting to condemn title to, or the use for a limited period of, all or any part of the Project, for a price determined as follows (which the Tenant agrees to pay in cash at the time of delivery of the Issuer’s deed or other instrument or instruments of transfer of the Project to the Tenant as hereinafter provided):

 

(1)           The full amount which is required to provide the Issuer and the Trustee with funds sufficient, in accordance with the provisions of the Indenture, to pay at maturity or to redeem and pay in full (A) the principal of all of the Outstanding Bonds, (B) all interest due thereon to date of maturity or redemption, whichever first occurs, and (C) all costs, expenses and premiums incident to the redemption and payment of said Bonds in full, plus

 

(2)           $100.00.

 

  

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Nothing in this Article shall release or discharge the Tenant from its duty or obligation under this Lease to make any payment of Basic Rent or Additional Rent which, in accordance with the terms of this Lease, becomes due and payable prior to the Purchase Date, or its duty and obligation to fully perform and observe all covenants and conditions herein stated to be performed and observed by the Tenant prior to the Purchase Date.

 

Section 17.3           Closing of Purchase.  On the Purchase Date the Issuer shall deliver to the Tenant its special warranty deed and/or other appropriate instrument or instruments of conveyance or assignment, properly executed and conveying the Project to the Tenant free and clear of all liens and encumbrances except as set forth in the preceding section above, or convoying such other title to the Project as may be acceptable to the Tenant, and the Tenant shall pay the full purchase price for the Project as follows: (a) the amount specified in clause (1) of Section 17.2 shall be paid to the Trustee for deposit in the Debt Service Fund to be used to pay or redeem Bonds and the interest thereon as provided in the Indenture, and (b) the amount specified in clause (2) of said Section 17.2 shall be paid to the Issuer; provided, however, nothing herein shall require the Issuer to deliver its appropriate instrument or instruments of assignment or conveyance to the Tenant until after all duties and obligations of the Tenant under this Lease to the date of such delivery have been fully performed and satisfied or adequate provision made for such performance and satisfaction.  Upon the delivery to the Tenant of the Issuer’s appropriate instrument or instruments of assignment or conveyance, payment of the purchase price by the Tenant and legal defeasance of the Bonds, this Lease shall ipso facto terminate, subject to the provisions of Section 20.2 hereof.

 

Section 17.4           Effect of Failure to Complete Purchase.  If, for any reason, the purchase of the Project by the Tenant pursuant to valid notice of election to purchase is not effected on the Purchase Date, this Lease shall be and remain in full force and effect according to its terms the same as though no notice of election to purchase had been given, except that if such purchase is not effected on the Purchase Date because the Issuer does not have or is unable to convey to the Tenant such title to the Project as the Tenant is required to accept, the Issuer shall use its best efforts to cure any such defect in its title to the Project.  In the event the Issuer is unable to cure such defect in its title to the Project, or if the Issuer’s failure to close would be a breach of its obligations hereunder, the Tenant shall have the right to cancel this Lease forthwith if, but only if, the principal of and interest on the Bonds and all costs incident to the redemption and payment of the Bonds have been paid in full.  The Tenant shall also have the right to exercise any legal or equitable remedies, in its own name or in the name of the Issuer, to obtain acceptable title to the Project.

 

Section 17.5           Application of Condemnation Awards if the Tenant Purchases Project.  The right of the Tenant to exercise its option to purchase the Project under the provisions of this Article shall remain unimpaired notwithstanding any condemnation of title to, or the use for a limited period of, all or any part of the Project.  If the Tenant shall exercise its said option and pay the purchase price as provided in this Article, all of the condemnation awards received by the Issuer after the payment of said purchase price, less all attorneys’ fees and other expenses and costs incurred by the Issuer as the owner of the Project in connection with such condemnation, shall belong and be paid to the Tenant.

 

  

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Section 17.6           Option to Purchase Unimproved Portions of Land.  The Tenant shall have the option to purchase at any time and from time to time during the Term any vacant part or vacant parts of the unimproved Land constituting a part of the Project; provided, however, the Tenant shall furnish the Issuer and the Trustee with a certificate of an Authorized Tenant Representative, dated not more than thirty (30) days prior to the date of the purchase and stating that, in the opinion of the Authorized Tenant Representative, (a) the portion of said Land with respect to which the option is exercised is not needed for the operation of the Project for the purposes herein stated, (b) the purchase will not impair the usefulness or operating efficiency or materially impair the value of the Project and will not destroy or materially impair the means of ingress thereto and egress therefrom, and (c) the purchase will not materially adversely affect compliance of the remaining Land and any Improvements with applicable zoning laws or regulations.  The Tenant shall exercise this option by giving the Issuer and the Trustee written notice of the Tenant’s election to exercise its option and specifying (i) the legal description, (ii) the date, time and place of closing, which date shall neither be earlier than 45 days nor later than 60 days after the notice is given, (iii) the appraised current fair market value of the portions of the Land with respect to which the Tenant’s option is exercised as determined by an independent, qualified appraiser whose report shall be furnished to the Trustee together with the Tenant’s notice of election to purchase, and (iv) a certificate signed by the chief executive or chief financial officer of the Tenant stating that no event has occurred and is continuing which, with notice or lapse of time or both, would constitute an Event of Default; provided, however, that the Tenant may not exercise this option if there has occurred and is continuing any event which, with notice or lapse of time or both, would constitute an Event of Default at the time said notice is given and may not purchase said real property on the specified closing date if any such event has occurred and is continuing on said date unless all defaults are cured.  The option hereby given shall include the right to purchase a perpetual easement for right-of-way to and from the public roadway and the right to purchase such land as is necessary to assure that there will always be access between the real property purchased pursuant to these Sections 17.6 through 17.10 and the public roadway.

 

Section 17.7           Quality of Title - Purchase Price.  If said notice of election to purchase is given as provided in Section 17.6 the Issuer shall convey the real property described in the Tenant’s notice to the Tenant on the specified date free and clear of all liens and encumbrances except (a) Permitted Encumbrances, (b) those to which the title was subject on the date of conveyance to the Issuer of the Land, or to which title became subject with the Tenant’s written consent, or which resulted from any failure of the Tenant to perform any of its covenants or obligations under this Lease, (c) taxes and assessments, general and special, if any, and (d) the interests of any party having condemned or who is attempting to condemn title to, or the use for a limited period of, all or any part of the real property described in the Tenant’s notice.  The purchase price shall be an amount equal to the then current fair market value thereof, as determined with reference to the independent appraiser’s report furnished to the Trustee or the original cost to the Tenant, whichever is less.

 

Section 17.8           Closing of Purchase.  If the Issuer has title to such vacant real property free and clear of all liens and encumbrances except as stated above or has such other title to the such real property as may be acceptable to the Tenant, then on the specified date, the Issuer shall deliver to the Tenant its special warranty deed, properly executed and conveying such real property to the Tenant free and clear of all liens and encumbrances except as stated above, and the Tenant shall pay the purchase price for such real property, said purchase price to be paid to the Trustee for the account of the Issuer and deposited by the Trustee in the Debt Service Fund and shall be used to redeem Bonds on any date the Bonds are subject to optional redemption as provided in the Indenture.  Nothing herein shall require the Issuer to deliver its special warranty deed to the Tenant until after all duties and obligations of the Tenant under this Lease to the date of such delivery have been fully performed and satisfied.

  

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Section 17.9           Effect of Purchase on Lease.  The exercise by the Tenant of the option granted under these Sections 17.6 to 17.10 and the purchase and sale and conveyance of a portion or portions of the Land constituting a part of the Project pursuant hereto shall in no way whatsoever affect this Lease, and all the terms and provisions hereof shall remain in full force and effect the same as though no notice of election to purchase had been given, and specifically, but not in limitation of the generality of the foregoing, exercise of such option shall not affect, alter, diminish, reduce or abate the Tenant’s obligations to pay all Basic Rent and Additional Rent required hereunder.

 

Section 17.10         Effect of Failure to Complete Purchase.  It for any reason whatsoever, the purchase by the Tenant of the real property described in said notice is not effected on the specified date, this Lease shall be and remain in full force and effect according to its terms the same as though no notice of election to purchase had been given.

 

ARTICLE XVIII

 

Section 18.1           Damage and Destruction.

 

(a)           If, during the Term, any Improvements are damaged or destroyed, in whole or in part, by fire or other casualty, the Tenant shall promptly notify the Issuer and the Trustee in writing as to the nature and extent of such damage or loss and whether it is practicable and desirable to rebuild, repair, restore or replace such damage or loss.

 

(b)           If the Tenant shall determine that such rebuilding, repairing, restoring or replacing is practicable and desirable, the Tenant shall forthwith proceed with and complete with reasonable dispatch such rebuilding, repairing, restoring or replacing.  In such case, any Net Proceeds of property and/or casualty insurance required by this Lease and received with respect to any such damage or loss to the Improvements shall be paid to the Trustee and shall be deposited in the Project Fund and shall be used and applied for the purpose of paying the cost of such rebuilding, repairing, restoring or replacing such damage or loss.  Any amount remaining in the Project Fund after such rebuilding, repairing, restoring or replacing shall be paid to the Tenant.

 

(c)           If the Tenant shall reasonably determine that rebuilding, repairing, restoring or replacing the Improvements is not practicable and desirable, any Net Proceeds of property and/or casualty insurance required by this Lease and received with respect to any such damage or loss to the Project shall be paid into the Debt Service Fund.  Such moneys shall be used to redeem Bonds at their earliest optional redemption date.  The Tenant agrees that it shall be reasonable in exercising its judgment pursuant to this subsection (c).

 

  

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(d)           The Tenant shall not, by reason of its inability to use all or any part of the Improvements during any period in which the Improvements are damaged or destroyed, or are being repaired, rebuilt, restored or replaced nor by reason of the payment of the costs of such rebuilding, repairing, restoring or replacing, be entitled to any reimbursement or any abatement or diminution of the Basic Rent or Additional Rent payable by the Tenant under this Lease nor of any other obligations of the Tenant under this Lease except as expressly provided in this Section.

 

Section 18.2           Condemnation.

 

(a)           If, during the Term title to, or the temporary use of, all or any part of the Project shall be condemned by any authority exercising the power of eminent domain (other than the Issuer), the Tenant shall, within 30 days after the date of entry of a final order in any eminent domain proceedings granting condemnation, notify the Issuer and the Trustee in writing as to the nature and extent of such condemnation and whether it is practicable and desirable to acquire substitute land or construct substitute Improvements.

 

(b)           If the Tenant shall determine that such substitution is practicable and desirable, the Tenant shall forthwith proceed with and complete with reasonable dispatch the acquisition or construction of such substitute Land or Improvements.  In such case, any Net Proceeds received from any award or awards with respect to the Project or any part thereof made in such condemnation or eminent domain proceedings shall be paid to the Trustee for the account of the Tenant and shall be deposited in the Project Fund and shall be used and applied for the purpose of paying the cost of such substitution.  Any amount remaining in the Project Fund after such acquisition or construction shall be paid to Tenant.

 

(c)           If the Tenant shall reasonably determine that it is not practicable and desirable to acquire or construct substitute Improvements, any Net Proceeds of condemnation awards received by the Tenant shall be paid into the Debt Service Fund.  Such moneys shall be used to redeem Bonds at their earliest optional redemption date.  The Tenant agrees that it shall be reasonable in exercising its judgment pursuant to this subsection.

 

(d)           The Tenant shall not, by reason of its inability to use all or any part of the Improvements during any such period of restoration or acquisition nor by reason of the payment of the costs of such restoration or acquisition, be entitled to any reimbursement or any abatement or diminution of the Basic Rent or Additional Rent nor of any other obligations hereunder payable by the Tenant under this Lease.

 

(e)           The Issuer shall cooperate fully with the Tenant in the handling and conduct of any prospective or pending condemnation proceedings with respect to the Project or any part thereof so long as the Issuer is not the condemning authority.  In no event will the Issuer voluntarily settle or consent to the settlement of any prospective or pending condemnation proceedings with respect to the Project or any part thereof without the written consent of the Tenant and the Trustee.

 

Section 18.3           Effect of Tenant’s Defaults.  Anything in this Article to the contrary notwithstanding, the Issuer and the Trustee shall have the right at any time and from time to time to withhold payment of all or any part of the Net Proceeds from the Project Fund attributable to damage, destruction or condemnation of the Project to the Tenant or any third party if an Event of Default has occurred and is continuing, or the Issuer or the Trustee has given notice to the Tenant of any Default which, with the passage of time, will become an Event of Default.  In the event the Tenant shall cure any Defaults specified herein, the Trustee shall make payments from the Net Proceeds to the Tenant in accordance with the provisions of this Article.  However, if this Lease is terminated or the Issuer or the Trustee otherwise re-enters and takes possession of the Project without terminating this Lease, the Trustee shall pay all the Net Proceeds held by it into the Debt Service Fund and all rights of the Tenant in and to such Net Proceeds shall cease.

  

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ARTICLE XIX

 

Section 19.1           Change of Circumstances; Determination of Taxability.  If at any time during the Basic Term, a Change of Circumstances occurs or the Bonds are called for redemption and payment upon the occurrence of a Determination of Taxability, then the Tenant shall have the option to purchase the Project pursuant to Article XVII or the option to terminate this Lease by giving the Issuer notice of such termination within 90 days after the Tenant has actual knowledge of the event giving rise to such option.  Such termination shall become effective when all of the Bonds Outstanding are paid or payment is provided for pursuant to the Indenture.

 

ARTICLE XX

 

Section 20.1           Remedies on Default.  Whenever any Event of Default shall have happened and be continuing, the Trustee (acting on behalf of the Issuer, as assignee of the Issuer’s rights hereunder) may take any legal action, including but not limited to, one or more of the following remedial actions:

 

(a)           By written notice to the Tenant upon acceleration of maturity of the Bonds as provided in the Indenture, the Trustee acting on behalf of the Issuer may declare the aggregate amount of all unpaid Basic Rent or Additional Rent then or thereafter required to be paid under this Lease by the Tenant to be immediately due and payable as liquidated damages from the Tenant, whereupon the same shall become immediately due and payable by the Tenant.

 

(b)           The Trustee acting on behalf of the Issuer may give the Tenant written notice of intention to terminate this Lease on a date specified therein, which date shall not be earlier than 30 days after such notice is given and, if all Defaults have not then been cured on the date so specified, the Tenant’s rights to possession of the Project shall cease, and this Lease shall thereupon terminate.  The Trustee acting on behalf of the Issuer may thereafter re-enter and take possession of the Project and pursue all its available remedies, including sale of the Project and judgment against the Tenant for possession of the Project and/or all Basic Rent and Additional Rent then owing, including costs and attorney fees.

 

(c)           Without terminating the Term hereof, or this Lease, the Trustee acting on behalf of the Issuer may conduct inspections or an Environmental Assessment of the Project, and re-enter the Project or take possession thereof pursuant to legal proceedings or any notice provided.  for by law and this Lease.  The Issuer or the Trustee acting on behalf of the Issuer may refuse to re-enter or take possession of the Project if it has reasonable cause for such refusal.  “Reasonable cause” shall include the presence on the Project of conditions which are in violation of any Environmental Law or the existence or threat of a remedial action against the Tenant under any Environmental Law resulting from conditions on the Project.

 

  

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(d)           Having elected to re-enter or take possession of the Project pursuant to subsection 20.1(c), the Trustee acting on behalf of the Issuer may relet the Project, or parts thereof, for such term or terms and at such rental and upon such other terms and conditions as are deemed advisable, with the right to make alterations and repairs to the Project, and no such re-entry or taking of possession of the Project shall be construed as an election to terminate this Lease, and no such re-entry or taking of possession shall relieve the Tenant of its obligation to pay Basic Rent or Additional Rent (at the time or times provided herein), or of any of its other obligations under this Lease, all of which shall survive such re-entry or taking of possession.  The Tenant shall continue to pay the Basic Rent and Additional Rent provided for in this Lease until the end of the Term, whether or not the Project shall have been relet, less the net proceeds, if any, of reletting the Project.

 

(e)           Having elected to reenter or take possession of the Project pursuant to subsection 20.1(c), the Trustee acting on behalf of the Issuer may (subject, however, to any restrictions against termination of this Lease in the Trust Indenture), by notice to the Tenant given at any time thereafter while the Tenant is in Default in the payment of Basic Rent or Additional Rent or in the performance of any other obligation under this Lease, elect to terminate this Lease in accordance with subsection 20.1(b) and thereafter proceed to exercise any remedies lawfully available.

 

(f)           If, in accordance with any of the foregoing provisions of this Article, the Issuer shall have the right to elect to re-enter and take possession of the Project, the Issuer or the Trustee acting on behalf of the Issuer, may enter and expel the Tenant and those claiming through or under the Tenant and remove the property and effects of both or either by all lawful means without being guilty of any manner of trespass and without prejudice to any remedies for arrears of Basic Rent or Additional Rent or preceding breach of contract by the Tenant.

 

(g)           Net proceeds of any reletting or sale of the Project shall be deposited in the Debt Service Fund for application to pay the Bonds and interest thereon.  “Net proceeds” shall mean the receipts obtained from reletting or sale after deducting all expenses incurred in connection with such reletting or sale, including without limitation, all repossession costs, brokerage commissions, legal fees and expenses, expenses of employees, alteration costs and expenses of preparation of the Project for reletting or sale.

 

(h)           The Issuer or the Trustee acting on behalf of the Issuer may recover from the Tenant any attorney fees or other expense incurred in exercising any of its remedies under this Lease.

 

  

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Section 20.2           Survival of Obligations.  The Tenant covenants and agrees with the Issuer and the Owner(s) of Bonds that until all Bonds and the interest thereon and redemption premium, if any, are paid in full or provision is made for the payment thereof in accordance with the Indenture, its obligations under this Lease shall survive the cancellation and termination of this Lease for any cause and/or sale of the Project, and that the Tenant shall be obligated to pay Basic Rent and Additional Rent (reduced by any net income the Issuer or the Trustee may receive from the Project after such termination) and perform all other obligations provided for in this Lease, all at the time or times provided in this Lease.  Notwithstanding any provision of this Lease or the Indenture, the Tenant’s obligations under Sections 8.2 and 14.1 hereof shall survive any termination, release or assignment of this Lease, the Indenture or Guaranty Agreement and payment or provision for payment of the Bonds.

 

Section 20.3           No Remedy Exclusive.  No remedy herein conferred upon or reserved to the Issuer is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease or now or hereafter existing at law or in equity or by statute, subject to the provisions of the Indenture.  No delay or omission to exercise any right or power accruing upon any Event of Default shall impair any such right or power, or shall be construed to be a waiver thereof, but any such right or power may be exercised from time to time and as often as may be deemed expedient.  In order to entitle the Issuer to exercise any remedy reserved to it in this Article, it shall not be necessary to give any notice, other than notice required herein.

 

ARTICLE XXI

 

Section 21.1           Performance of the Tenant’s Obligations by the Issuer.  If the Tenant shall fail to keep or perform any of its obligations as provided in this Lease, then the Issuer may (but shall not be obligated to do so) upon the continuance of such failure on the Tenant’s part for 90 days after notice of such failure is given the Tenant by the Issuer or the Trustee and without waiving or releasing the Tenant from any obligation hereunder, as an additional but not exclusive remedy, make any such payment or perform any such obligation, and the Tenant shall reimburse the Issuer for all sums so paid by the Issuer and all necessary or incidental costs and expenses incurred by the Issuer in performing such obligations through payment of Additional Rent.  If such Additional Rent is not so paid by the Tenant within 10 days of demand, the Issuer shall have the same rights and remedies provided for in Article XX in the case of Default by the Tenant in the payment of Basic Rent.

 

ARTICLE XXII

 

Section 22.1           Surrender of Possession.  Upon accrual of the Issuer’s right of reentry as the result of the Tenant’s Default hereunder or upon the cancellation or termination of this Lease by lapse of time or otherwise (other than as a result of the Tenant’s purchase of the Project), the Tenant shall peacefully surrender possession of the Project to the Trustee, as assignee of the Issuer in good condition and repair, ordinary wear and tear excepted; provided, however, the Tenant shall have the right, prior to or within 30 business days after the termination of this Lease, to remove from on or about the Project the buildings, improvements, machinery, equipment, personal property, furniture and trade fixtures which the Tenant owns under the provisions of this Lease and are not a part of the Project.  All repairs to and restorations of the Project required to be made because of such removal shall be made by and at the sole cost and expense of the Tenant.  All buildings, improvements, machinery, equipment, personal property, furniture and trade fixtures owned by the Tenant and which are not so removed from on or about the Project prior to or within 30 business days after such termination of this Lease shall become the separate and absolute property of the Issuer.

 

  

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ARTICLE XXIII

 

Section 23.1          Notices.  All notices required or desired to be given hereunder shall be in writing and shall be delivered in person to the Notice Representative or mailed by restricted mail to the Notice Address.  All notices given by restricted mail as aforesaid shall be deemed duly given as of the date three days after they are so mailed.  When mailed notices are given, the party giving notice will use reasonable diligence to contact the party being notified by telephone, electronic mail or facsimile on or before the date such notice is mailed.

 

ARTICLE XXIV

 

Section 24.1          Triple-Net Lease.  The parties hereto agree (a) that this Lease is intended to be a triple-net lease, (b) that the payments of Basic Rent and Additional Rent are designed to provide the Issuer and the Trustee with funds adequate in amount to pay all principal of and interest on all Bonds as the same become due and payable and to pay and discharge all of the other duties and requirements set forth herein, and (a) that to the extent that the payments of Basic Rent and Additional Rent are not adequate to provide the Issuer and the Trustee with funds sufficient for the purposes aforesaid, the Tenant shall be obligated to pay, and it does hereby covenant and agree to pay, upon demand therefor, as Additional Rent, such further sums of money as may from time to time be required for such purposes.

 

Section 24.2          Funds Held by the Trustee After Payment of Bonds.  If, after the principal of and interest on all Bonds and all costs incident to the payment of Bonds have been paid in full, the Trustee holds unexpended funds received in accordance with the terms hereof, such unexpended funds shall, except as otherwise provided in this Lease and the Indenture and after payment therefrom to the Issuer of any sums of money then due and owing by the Tenant under the terms of this Lease, be the absolute property of and be paid over forthwith to the Tenant.

 

ARTICLE XXV

 

Section 25.1           Rights and Remedies.  The rights and remedies reserved by the Issuer and the Tenant hereunder and those provided by law shall be construed as cumulative and continuing rights.  No one of them shall be exhausted by the exercise thereof on one or more occasions.  The Issuer and the Tenant shall each be entitled to specific performance and injunctive or other equitable relief for any breach or threatened breach of any of the provisions of this Lease, notwithstanding the availability of an adequate remedy at law, and each party hereby waives the right to raise such defense in any proceeding in equity.

 

  

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Section 25.2           Waiver of Breach.  No waiver of any breach of any covenant or agreement herein contained shall operate as a waiver of any subsequent breach of the same covenant or agreement or as a waiver of any breach of any other covenant or agreement, and in case of a breach by either party of any covenant, agreement or undertaking, the nondefaulting party may nevertheless accept from the other any payment or payments or performance hereunder without in any way waiving its right to exercise any of its rights and remedies provided for herein or otherwise with respect to any such Default or Defaults which were in existence at the time such payment or payments or performance were accepted by it.

 

Section 25.3           The Issuer Shall Not Unreasonably Withhold Consents and Approvals.  Wherever in this Lease it is provided that the Issuer shall, may or must give its approval or consent, or execute supplemental agreements, exhibits or schedules, the Issuer shall not unreasonably or arbitrarily withhold or refuse to give such approvals or consents or refuse to execute such supplemental agreements, exhibits or schedules.

 

ARTICLE XXVI

 

Section 26.1          The Issuer May Not Sell.  The Issuer covenants that unless an Event of Default under this Lease has occurred and is continuing, and the remaining Term of this Lease has been terminated, it will not, without the Tenant’s written consent, unless required by law, sell or otherwise part with or encumber its fee title interest in the Project at any time during the Term of this Lease.

 

Section 26.2          Quiet Enjoyment and Possession.  The Tenant shall enjoy peaceable and quiet possession of the Project as long as no Event of Default has occurred and is continuing.

 

Section 26.3          Financial Report; Furnishing of Financial Information.  So long as any Bonds are Outstanding and unpaid and subject to the terms of the Indenture, the Tenant shall furnish or cause to be furnished to the Trustee the financial statements and other financial information required by Article V of the Guaranty Agreement.

 

Section 26.4           Issuer’s Obligations Limited.  Except as otherwise expressly provided in this Lease, no recourse upon any obligation or agreement contained in this Lease or in any Bond or under any judgment obtained against the Issuer, or by the enforcement of any assessment or by any legal or equitable proceeding by virtue of any constitution or statute or otherwise under any circumstances, under or independent of the Bond Agreement, shall be had against the Issuer and its officers, employees and agents.

 

Notwithstanding anything in this Lease to the contrary, it is expressly understood and agreed by the parties hereto that (a) the Issuer may rely conclusively on the truth and accuracy of any certificate, opinion, notice or other instrument furnished to the Issuer by the Tenant, a Owner(s) of Bonds or the Trustee as to the existence of any fact or state of affairs required to be noticed by the Issuer hereunder; (b) the Issuer shall not be under any obligation to perform any record-keeping or to provide any legal services, it being understood that such services shall be performed or provided either by the Tenant, the Trustee or the Owner(s) of Bonds; and (c) that none of the provisions of this Lease shall require the Issuer to expend or risk its own funds or otherwise incur financial liability in the performance of any of its duties or in the exercise of any of its rights or powers hereunder, unless it shall have first been adequately indemnified to its satisfaction against the costs, expenses and liability which may be incurred by such action.

 

  

29

  

 

Notwithstanding anything in this Lease to the contrary, any obligation the Issuer may incur under this Lease or under any instrument or document executed by the Issuer in connection with this Lease that entails the expenditure of any money by the Issuer shall be only a limited obligation of the Issuer payable solely from the revenues derived by the Issuer under the Lease and shall not be, under any circumstances, a general obligation of the Issuer.

 

ARTICLE XXVII

 

Section 27.1           Investment Tax Credit; Depreciation»

 

.  The Tenant shall be entitled to claim the full benefit of (1) any investment credit against federal or state income tax allowable with respect to expenditures of the character contemplated hereby under any federal or state income tax laws now or from time to time hereafter in effect, and (2) any deduction for depreciation with respect to the Project from federal or state income taxes.  The Issuer agrees that it will upon the Tenant’s request execute all such elections, returns or other documents which may be reasonably necessary or required to more fully assure the availability of such benefits to the Tenant.

 

ARTICLE XXVIII

 

Section 28.1           Amendments.  This Lease may be amended, changed or modified in writing in the following manner:

 

(a)           With respect to an amendment, change or modification which reduces the Basic Rent or Additional Rent, or any amendment which reduces the percentage of Owner(s) of Bonds whose consent is required for any such amendment, change or modification, by an agreement in writing executed by the Issuer and the Tenant and consented to in writing by the Trustee and by Owner(s) of Bonds owning at least 90% of the aggregate principal amount of the Bonds then Outstanding;

 

(b)           With respect to any other amendment, change or modification which will materially adversely affect the security or rights of the Owner(s) of Bonds, by an agreement in writing executed by the Issuer and the Tenant and consented to in writing by the Trustee and by Owner(s) of Bonds owning at least 66-2/3% of the aggregate principal amount of the Bonds then Outstanding; and

 

  

30

  

 

(c)           With respect to all other amendments, changes, or modifications, by an agreement in writing executed by the Issuer and the Tenant.

 

At least 30 days prior to the execution of any agreement pursuant to (c) above, the Issuer and the Tenant shall furnish the Trustee and the Original Purchaser of the Bonds with a copy of the amendment, change or modification proposed to be made.

 

Section 28.2          Granting of Easements.  If no Event of Default under this Lease shall have happened and be continuing, the Tenant may, at any time or times, (a) grant easements, licenses and other rights or privileges in the nature of easements with respect to any property included in the Project, free from any rights of the Issuer or the Owner(s) of Bonds, or (b) release existing easements, licenses, rights-of-way and other rights or privileges, all with or without consideration and upon such terms and conditions as the Tenant shall determine, and the Issuer agrees, to the extent that it may legally do so, that it will execute and deliver any instrument necessary or appropriate to confirm and grant or release any such easement, license, right-of-way or other right or privilege or any such agreement or other arrangement, upon receipt by the Issuer of: (1) a copy of the instrument of grant or release or of the agreement or other arrangement, (2) a written application signed by the Authorized Tenant Representative requesting such instrument, and (3) a certificate executed by the Tenant stating (A) that such grant or release is not detrimental to the proper conduct of the business of the Tenant, and (B) that such grant or release will not impair the effective use or interfere with the efficient and economical operation of the Project and will not materially adversely affect the security of the Owner(s) of Bonds.  Any consideration received by the Tenant for the grant or release must be paid to the Trustee to be deposited in the Debt Service Fund and used to redeem Bonds at the earliest practicable date, at their principal amount, plus accrued interest, without premium.  If the instrument of grant shall so provide, any such easement or right and the rights of such other parties thereunder shall be superior to the rights of the Issuer and the Owner(s) of Bonds and shall not be affected by any termination of this Lease or default on the part of the Tenant hereunder.  If no Event of Default shall have happened and be continuing, any payments or other consideration received by the Tenant for any such grant or with respect to or under any such agreement or other arrangement shall be and remain the property of the Tenant, but, in the event of the termination of this Lease because of an Event of Default, all rights then existing of the Tenant with respect to or under such grant shall inure to the benefit of and be exercisable by the Issuer.

 

Section 28.3          Security Interests.  i) The Issuer and the Tenant agree to execute and deliver all instruments (including financing statements and statements of continuation thereof) necessary for perfection of and continuance of the security interest of the Issuer in and to the Project.  The Tenant hereby authorizes the Issuer to file or cause to be filed all such instruments required to be so filed and the Trustee to continue or cause to be continued the filings or liens of such instruments for so long as the Bonds shall be Outstanding.

 

(a)           Under the Indenture, the Issuer will, as additional security for the Bonds assign, transfer, pledge and grant a security interest in its rights under this Lease to the Trustee.  The Issuer hereby authorizes the Trustee to file financing statements or any other instruments necessary to perfect its security interest.  The Trustee is hereby given the right to enforce, either jointly with the Issuer or separately, the performance of the obligations of the Tenant, and the Tenant hereby consents to the same and agrees that the Trustee may enforce such rights as provided in the Indenture and the Tenant will make payments required hereunder directly to the Trustee.

 

  

31

  

 

Section 28.5          Construction and Enforcement.  This Lease shall be construed and enforced in accordance with the laws of the.  State.  The provisions of this Lease shall be applied and interpreted in accordance with the rules of interpretation set forth in the Indenture.  Wherever in this Lease it is provided that either party shall or will make any payment or perform or refrain from performing any act or obligation, each such provision shall, even though not so expressed, be construed as an express covenant to make such payment or to perform, or not to perform, as the case may be, such act or obligation.

 

Section 28.6           Invalidity of Provisions of Lease.  If, for any reason, any provision hereof shall be determined to be invalid or unenforceable, the validity and effect of the other provisions hereof shall not be affected thereby.

 

Section 28.7           Covenants Binding on Successors and Assigns.  The covenants, agreements and conditions herein contained shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns.

 

Section 28.8          Section Headings.  The section headings hereof are for the convenience of reference only and shall not be treated as a part of this Lease or as affecting the true meaning of the provisions hereof.  The reference to section numbers herein or in the Indenture shall be deemed to refer to the numbers preceding each section.

 

Section 28.9           Execution of Counterparts.  This Lease may be executed simultaneously in multiple counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one instrument.

 

  

32

  

IN WITNESS WHEREOF, the Issuer has caused this Lease to be signed by an authorized official, such signature to be attested by an authorized officer, and its official seal to be applied, as of the date first above written.

 

	 	 	 	CITY OF FREDONIA, KANSAS
	
[SEAL]

	 	 	 
	 	 	 	
By:

	/s/ Dennis Mollnow
	 	 	 	 	
Mayor

	
ATTEST:

	 	 	 
	 	 	 	 	 
	
By:

	/s/ Steven Hutfles	 	 	 
	 	
City Clerk

	 	 	 
	 	 	 	 	 
	 	 	 	 	
“ISSUER”

 

ACKNOWLEDGMENT

 

	
STATE OF KANSAS

	)	 	 	 
	 	
)SS:

	 	 	 
	
COUNTY OF WILSON

	)	 	 	 

 

This instrument was acknowledged before me on the 19 day of April, 2012, by Dennis D. Mollnow, Mayor, and Steven Hutfles, City Clerk, of the City of Fredonia, Kansas, a municipal corporation.

 

	
[SEAL]

	 	 
	 	 	 /s/ Carolyn Anderson
	 	 	

Notary Public

	 	 	 
	
My Appointment Expires:

	 	 
	 	 	 
	May 7, 2014	 	 

 

  

33

  

 

IN WITNESS WHEREOF, the Tenant has caused this Lease to be signed by an authorized officer, as of the date first above written.

 

	 	 	VALENT AEROSTRUCTURES, LLC
	 	 	 	 
	 	 	
By:

	/s/ Charles M. Newell
	 	 	Title:   	
President

	 	 	 	 
	 	 	 	

“TENANT”

 

ACKNOWLEDGMENT

 

	
STATE OF MISSOURI

	)	 	 	 
	 	
)SS:

	 	 	 
	
COUNTY OF JACKSON

	)	 	 	 

 

This instrument was acknowledged before me on the 17th day of April, 2012, by Charles M. Newell, CEO of Valent Aerostructures, LLC, a Delaware corporation.

 

	
[SEAL]

	 	 
	 	 	/s/ Deborah A. Guse
	 	 	

Notary Public

	 	 	 
	
My Appointment Expires:

	 	 
	 	 	 
	July 19, 2015	 	 

 

  

34

  

 

APPENDIX A

FORM OF REQUISITION FOR PAYMENT OF PROJECT COSTS

CITY OF FREDONIA, KANSAS

Project Fund

(Valent Aerostructures Project)

Payment Order No. __________

 

Community National Bank & Trust

Fredonia, Kansas

Attn:  Corporate Trust Department

 

You are hereby authorized and directed by the undersigned, the Authorized Tenant Representative, acting on behalf of Valent Aerostructures, LLC (the “Tenant”) to disburse funds held by you as Trustee in the above mentioned Project Fund for the purposes and in the amounts set forth in the Payment Schedules attached hereto and incorporated herein by reference (the “Payment Schedules”).

 

I hereby certify that the amounts requested in the attached Payment Schedules have either been advanced by the Tenant or are justly due to contractors, subcontractors, suppliers, vendors, materialmen, engineers, architects or other persons named in the Payment Schedules who have performed necessary and appropriate work in connection with any installation of machinery, equipment or personal property, or have furnished necessary and appropriate materials in the construction or acquisition of land, buildings and improvements constituting a part of the Project.  I further certify that the fair value of such work or materials, machinery and equipment, is not exceeded by the amount requested, and such cost is one which may be capitalized for federal income tax purposes.

 

I further certify that, except for the amounts set forth in the Payment Schedules, there are no outstanding debts now due and payable for labor, wages, materials, supplies or services in connection with the construction of said buildings and improvements or the purchase and/or installation of machinery, equipment and personal property which, if unpaid, might become the basis of a vendor’s, mechanic’s, laborer’s or materialmen’s statutory or other similar lien upon the Land, the Project or any part thereof.

 

I further certify that no part of the amounts set forth in the Payment Schedules have been the basis for any previous withdrawal of any moneys from the said Project Fund.

 

I further certify that each of the representations and covenants on the part of the Tenant contained in the Lease dated as of April 1, 2012 by and between the City of Fredonia, Kansas, as the Issuer, and the Tenant are now true and correct in all material respects and are now being materially complied with.

 

I further certify that the amounts set forth in the Payment Schedules constitute Project Costs, as said term is defined in the Lease, and that all insurance policies which are required to be in force as a condition precedent to disbursement of funds from the Project Fund pursuant to the provisions of Section 6.1 of the Lease are in full force and effect.

 

DATED ______________________________, 20_______.

 

	 	 	 
	 	 	
Authorized Tenant Representative

 

  

A-1

  

 

EXHIBIT A - Payment Order No. ___________

PAYMENT SCHEDULE

FOR BUILDINGS, IMPROVEMENTS AND

MISCELLANEOUS PROJECT COSTS

 

I hereby request payment of the amounts specified below to the payees whose names and addresses are stated below, and I certify that the description of the purchase or nature of each payment is reasonable, accurate and complete:

 

PAYMENT SCHEDULE

 

	Payee Name	Payee Address	Purpose or Nature of Payment	Amount

 

______

Initials

 

  

A-2

  

 

APPENDIX B

FORM OF CERTIFICATE OF COMPLETION

CERTIFICATE OF COMPLETION

 

The undersigned, being the Authorized Tenant Representative for Valent Aerostructures, LLC (the “Tenant”), as tenant under a certain Lease dated as of April 1, 2012 (the “Lease”) between the City of Fredonia, Kansas, (the “Issuer”) and the Tenant, and as beneficiary of the Issuer’s Industrial Revenue Bonds, Series 2012A (Valent Aerostructures Project) issued pursuant to a certain Trust Indenture dated as of April 1, 2012 (the “Indenture”), hereby certifies:

 

1.           The Improvements purchased with Original Proceeds (as defined in the Indenture) have been substantially completed in accordance with the plans and specifications prepared at the Tenant’s direction.

 

2.           Such Improvements have been substantially completed in a good and workmanlike manner.

 

3.           There are no mechanic’s, materialmen’s liens or other statutory liens on file encumbering title to the Land (as defined in the Indenture); all bills for labor and materials furnished for the Improvements which could form the basis of a mechanic’s, materialmen’s or other statutory lien against the Land have been paid in full, and within the past four months no such labor or materials have been furnished which have not been paid for.

 

4.           All Improvements are located or installed upon the Land.

 

5.           All material provisions of applicable building codes have been complied with and, if applicable, a certificate of occupancy has been issued with respect to the Project.

 

6.           All moneys remaining in the Project Fund being held by the Trustee under the Indenture should be transferred to the Debt Service Fund being held by the Trustee under the Indenture as required by Section 504 of the Indenture, to be applied as provided therein.

 

IN WITNESS WHEREOF, the undersigned Authorized Tenant Representative has signed this Certificate, and states, under penalty of perjury, that the statements of fact made in this Certificate are true and correct.

 

	 	 	 	 
	 	 	 	 
	
STATE OF KANSAS

	)	 	 
	 	
)SS:

	 	 
	
COUNTY OF WILSON

	)	 	 

 

Subscribed and sworn to or affirmed before me, a notary public, this _____ day of ____________________, 20_____.

 

[SEAL]

 

	 	 	 
	 	 	
Notary Public

 

My Appointment Expires:  ________________________

 

  

B-1

  

 

APPENDIX C

GLOSSARY OF WORDS AND TERMS

“Additional Rent” means all fees, charges, costs and expenses of the Trustee or the Issuer (including reasonable attorney’s fees) payable under the Indenture, all Impositions, all amounts required to be rebated to the United States pursuant to the Tax Compliance Agreement, all Default Administration Costs (as defined in the Indenture), all other payments of whatever nature payable or to become payable pursuant to the Indenture or which the Tenant has agreed to pay or assume under the provisions of this Lease and any and all expenses (including reasonable attorney’s fees) incurred by the Issuer or the Trustee in connection with the issuance of the Bonds or the administration or enforcement of any rights under this Lease or the Indenture.  The fees, charges, costs and expenses of the Trustee shall include all costs incurred in connection with the issuance, transfer, exchange, registration, redemption or payment of the Bonds and the administration or enforcement of any rights or obligations under this Lease, the Indenture or the Guaranty Agreement except (a) the reasonable fees and expenses in connection with the replacement of a Bond or Bonds mutilated, stolen, lost or destroyed or (b) any tax or other government charge imposed on the Trustee in relation to the transfer, exchange, registration, redemption or payment of the Bonds.  The fees, charges, costs and expenses of the Issuer shall include, but not be limited to, any and all costs incurred by the Issuer in connection with the administration or enforcement of any rights, duties, or obligations under this Lease, the exercise or pursuit of any remedy upon an Event of Default, the amendment of this Lease, the granting of consents, easements or similar actions or any other action required of or available to the Issuer under the terms of this Lease.

 

“Additional Term” shall mean that term commencing on the last day of the Basic Term and terminating 5 years thereafter.

 

“Bankruptcy Code” means Title 11 of the United States Code, as amended.

 

“Basic Rent” means the monthly pro rata amount which, when added to Basic Rent Credits, will be sufficient to pay, 30 days prior to each Payment Date, all principal of, redemption premium, if any, and interest on all Outstanding Bonds (as defined in the Indenture) which is due and payable on such Payment Date.  If for any reason on any Payment Date the Trustee does not have on deposit in the Debt Service Fund sufficient moneys to pay all principal and interest due on the Bonds on such Payment Date, then the Tenant shall pay, as Basic Rent, on such Payment Date, the amount of such deficiency.

 

“Basic Rent Credits” means all funds on deposit in the Debt Service Fund and available for the payment of principal of, redemption premium, if any, and interest on the Bonds on any Basic Rent Payment Date.

 

“Basic Rent Payment Date” means May 1, 2012 and the first day of each month thereafter until the principal of, redemption premium, if any, and interest on all Outstanding Bonds have been fully paid or provision made for their payment in accordance with the provisions of the Indenture.

 

  

C-1

  

 

“Basic Term” means that term commencing as of the delivery of this Lease and ending on April 1, 2032, subject to prior termination as specified in this Lease, but ending, in any event, when all of the principal of, redemption premium, if any, and interest on all Outstanding Bonds shall have been paid in full or provision made for their payment in accordance with the provisions of the Indenture.

 

“CERCLA” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601, et seq.

 

“Certificate of Completion” means a written certificate signed by the Authorized Tenant Representative stating that (1) the Improvements have been substantially completed in accordance with the plans and specifications prepared or approved by the Issuer or the Tenant, as the case may be; (2) the Improvements have been substantially completed in a good and workmanlike manner; (3) no mechanic’s or materialmen’s liens have been filed, nor is there any basis for the filing of such liens, with respect to the Project; (4) all Improvements constituting a part of the Project are located or installed upon the Land; and (5) if required by ordinances duly adopted by the Issuer or by applicable building codes, that an appropriate certificate of occupancy has been issued with respect to the Improvements.  A form of Certificate of Completion is attached as Appendix B.

 

“Completion Date” means the date on which the Improvements are certified as substantially completed in accordance with Section 5.4 of this Lease, or the third anniversary of the issue date of the Bonds, whichever comes first.

 

“Default” means any event or condition the occurrence of which, with the lapse of time or the giving of notice or both, may constitute an Event of Default.

 

“Environmental Assessment” means an environmental assessment with respect to the Project conducted by an independent consultant satisfactory to the Issuer and the Trustee which reflects the results of such inspections, records reviews, soil tests, groundwater tests and other tests requested, which assessment and results shall be satisfactory in scope, form and substance to the Issuer and the Trustee.

 

“Environmental Law” means CERCLA, SARA, and any other federal, state or local environmental statute, regulation or ordinance presently in effect or coming into effect during the Term of this Lease.

 

“Event of Bankruptcy” means an event whereby the Tenant shall: (i) admit in writing its inability to pay its debts as they become due; or (ii) file a petition in bankruptcy or for reorganization or for the adoption of an arrangement under the Bankruptcy Code as now or in the future amended, or file a pleading asking for such relief; or (iii) make an assignment for the benefit of creditors; or (iv) consent to the appointment of a trustee or receiver for all or a major portion of its property; or (v) be finally adjudicated as bankrupt or insolvent under any federal or state law; or (vi) suffer the entry of a final and nonappealable court other under any federal or state law appointing a receiver or trustee for all or a major part of its property or ordering the winding-up or liquidation of its affairs, or approving a petition filed against it under the Bankruptcy Code, which order, if the Tenant has not consented thereto, shall not be vacated, denied, set aside or stayed within 60 days after the day of entry; or (vii) suffer a writ or warrant of attachment or any similar process to be issued by any court against all or any substantial portion of its property, and such writ or warrant of attachment or any similar process is not contested, stayed, or is not released within 60 days after the final entry, or levy or after any contest is finally adjudicated or any stay is vacated or set aside.

 

  

C-2

  

 

“Event of Default” means any one of the following events:

 

(a)           Failure of the Tenant to make any payment of Basic Rent within five business days of written notice from the Issuer or the Bank of the late payment; or

 

(b)           Failure of the Tenant to make any payment of Additional Rent at the times and in the amounts required hereunder, or failure to observe or perform any other covenant, agreement, obligation or provision of this Lease on the Tenant’s part to be observed or performed, and the same is not remedied within thirty (30) days after the Issuer or the Trustee has given the Tenant written notice specifying such failure (or such longer period as shall be reasonably required to correct such default; provided that (i) the Tenant has commenced such correction within said 30-day period, and (ii) the Tenant diligently prosecutes such correction to completion); or

 

(c)           An Event of Bankruptcy;

 

(d)           Abandonment of the Project by the Tenant; or

 

(e)           Tenant ceases to own and control, directly or indirectly, all of the equity interests of each of Valent-Lenexa, Valent-St.  Louis, Valent-Wichita, Valent-Tulsa and Valent-Washington; or Tech Investments II, LLC ceases to own and control at least a majority of the voting equity interests of Valent.

 

“Full Insurable Value” means full actual replacement cost less physical depreciation.

 

“Hazardous Substances” shall mean “hazardous substances” as defined in CERCLA.

 

“Impositions” means all taxes and assessments, general and special, which may be lawfully taxed, charged, levied, assessed or imposed upon or against or payable for or in respect of the Project or any part thereof, or any improvements at any time thereon or the Tenant’s interest therein, including any new lawful taxes and assessments not of the kind enumerated above to the extent that the same are lawfully made, levied or assessed in lieu of or in addition to taxes or assessments now customarily levied against real or personal property, and further including all water and sewer charges, assessments and other governmental charges and impositions whatsoever, foreseen or unforeseen, which, if not paid when due, would encumber the Issuer’s title to the Project.

 

“Improvements” shall have the meaning defined in the Indenture.

 

  

C-3

  

 

“Indenture” means the Trust Indenture delivered concurrently with this Lease, as from time to time amended and supplemented by Supplemental Indentures in accordance with the provisions of Article XI of the Indenture.

 

“Land” means the real property (or interests therein) described in Schedule I.

 

“Lease” means this Lease between the Issuer and the Tenant, as from time to time supplemented and amended in accordance with the provisions hereof and of the Indenture.

 

“Net Proceeds” means the gross proceeds from the insurance (including without limitation title insurance) or condemnation award with respect to which that term is used remaining after the payment of all expenses (including without limitation attorneys’ fees and any expenses of the Issuer, the Tenant, the Bank or any other owner of the Bonds) incurred in the collection of such gross proceeds.

 

The term “Notice Address” shall mean:

 

(1)           With respect to the Tenant:

 

Valent Aerostructures, LLC

1200 Main Street, Suite 400

Kansas City, MO  64105

Attn:  Chief Financial Officer

(2)           With respect to the Issuer:

 

City of Fredonia, Kansas

100 N. 15th

Fredonia, KS  66736

Attn:  City Clerk

(3)           With respect to the Trustee:

 

Community National Bank & Trust

733 Madison

Fredonia, KS  66736

Attn:  President

“Official Action Date” means October 3, 2011, the date on which the governing body of the Issuer adopted a resolution or approved a letter indicating an intent to issue the Series 2012A Bonds.

 

“Principal User” means any principal user of the Project within the meaning of the Code.

 

“Project Contracts” means a contract or contracts with respect to the acquisition and/or construction of the Improvements entered into by the Tenant or the Issuer.

 

  

C-4

  

 

“Related Person” means a related person as defined in Section 147(a) and 144(a)(3) of the Code.

 

“SARA” means the Superfund Amendments and Reauthorization Act of 1986, as now in effect and as hereafter amended.

 

“State” means the State of Kansas.

 

“Term” means, collectively, the Basic Term and any Additional Term of the Lease.

 

  

C-5

  

 

SCHEDULE I

DESCRIPTION OF PROPERTY

The following property acquired by the City of Fredonia, Kansas (the “Issuer”) in connection with the issuance by the City of its Industrial Revenue Bonds, Series 2012A (Valent Aerostructures Project) (the “Series 2012A Bonds”):

 

(a)           The following described real estate in Wilson County, Kansas:

 

Lots 14, 15, 16 and 17, Fredonia Industrial Park Sub-Division in the City of Fredonia, Kansas, according to the recorded plat thereof.

 

said real property constituting the “Land” as defined in the Lease entered into by the Issuer concurrently with the issuance of the Series 2012A Bonds (the “Lease”), subject to the following (“Permitted Encumbrances”):

 

All easements, liens and rights-of-way of record.

 

(b)           All buildings, building additions, improvements, machinery and equipment constructed, located or installed on the Land, all or any portion of the costs of which were paid from the proceeds of the Series 2012A Bonds, and which constitute Improvements as referred to in the Lease, together with any substitutions or replacements therefor, the property described in paragraphs (a) and (b) of this Schedule I together constituting the “Project” as referred to in the Lease.

 

 

S-1ex10_39.htm

Exhibit 10.39

LEASE

THIS INDENTURE of lease, entered into this 1lth day of October, 2001 between Welsh Lenexa II, LLC (“Landlord”) and Cable-Tech Industries, L.L.C., a Kansas limited liability (the “Tenant”).

 

DEFINITIONS

 

“Property” - That certain real property located in the City of Lenexa, County of Johnson, State of Kansas, and legally described on Exhibit A attached hereto and made a part hereof, including all buildings and site improvements located thereon.

 

“Building” - That certain office/warehouse building containing approximately 152,400 square feet located upon the Property and commonly described as 11032-11068 Strang Line Road, Lenexa, Kansas 66219.

 

“Demised Premises” - That certain portion of the Building located at 11060 Strang Line Road and designated as Bays 9 through 12, consisting of approximately 25,766 square feet (4,563 square feet office and 21,203 square feet of warehouse space), as measured from the outside walls of the Demised Premises to the center of the demising wall, as shown on the floor plan attached hereto as Exhibit B and made a part hereof.  The Demised Premises include the non-exclusive right of access to common areas, as hereinafter defined, and all licenses and easements appurtenant to the Demised Premises.

 

“Common Areas” - The term “common area” means the entire areas available for the non-exclusive use by Tenant and other Tenants in the Building, including, but not limited to, driveways, truck docks, parking lots, and landscaped areas.  Subject to reasonable rules and regulations promulgated by Landlord, the common areas are hereby made available to Tenant and its employees, agents, customers, and invitees for reasonable use in common with other Tenants, their employees, agents, customers and invitees.

 

TERM

ARTICLE I.FOR AND IN CONSIDERATION OF THE RENTS, ADDITIONAL RENTS, TERMS, PROVISIONS AND COVENANTS HEREIN CONTAINED, LANDLORD HEREBY LETS, LEASES AND DEMISES TO TENANT THE DEMISED PREMISES FOR A TERM COMMENCING ON THE EARLIER OF (I) THE DATE ON WHICH TENANT OPENS THE DEMISED PREMISES FOR BUSINESS, OR (II) FIFTEEN (15) DAYS FOLLOWING THE DELIVERY OF POSSESSION OF THE DEMISED PREMISES TO TENANT COMPLETED ACCORDING TO THE PLANS AND SPECIFICATIONS SET FORTH HEREIN (THE “COMMENCEMENT DATE”), AND EXPIRING ON THE SEVEN YEAR AND SIX MONTH ANNIVERSARY OF THE COMMENCEMENT DATE (THE “EXPIRATION DATE”), UNLESS SOONER TERMINATED AS HEREINAFTER PROVIDED.

 

  

1

  

 

BASE RENT

 

ARTICLE II.TENANT SHALL TO PAY TO LANDLORD BASE RENT FOR THE DEMISED PREMISES (“BASE RENT”), EXCLUSIVE OF ANY OTHER CHARGE PROVIDED FOR IN THIS LEASE TO BE PAID BY TENANT, AS SET FORTH BELOW.  BASE RENT SHALL BE PAYABLE IN EQUAL MONTHLY

 

installments, in advance, commencing on the first full month of the term of this Lease, and continuing on the first day of each subsequent month during the term hereof.  In the event the term hereof commences on a day other than the first day of a month, Base Rent payable during such first month shall be adjusted on a pro rata basis and shall be paid contemporaneously with the execution of this lease.  Except as set forth in this Lease to the contrary, Base Rent shall be paid without setoff, deduction, demand or counterclaim of any nature whatsoever, in advance on the first day of each and every calendar month during the term hereof.

 

	  	 	
Monthly

	 	 	
Annual

	 
	
Dates

	 	
Base Rent

	 	 	
Base Rent

	 
	
Commencement Date to 6- month anniversary of the Commencement Date.

	 	$	7,128.59	 	 	 	N/A	 
	
6 month anniversary to forty-two month anniversary

	 	 	14,278.66	 	 	 	171,343.90	 
	
Forty-two month anniversary to ninetieth month anniversary

	 	 	15,352.24	 	 	 	184,226.90	 

 

All Rent and other sums payable hereunder by Tenant which are not paid when due shall bear interest from the date due to the date paid at a rate of three and one half percent (3.5%) per annum in excess of the “Prime Rate” published in the Wall Street Journal, as the same changes from time to time (the “Default Rate”).

 

ADDITIONAL RENT

 

ARTICLE III.IN ADDITION TO BASE RENT AND ALL OTHER AMOUNTS TO BE PAID BY TENANT HEREUNDER, TENANT SHALL PAY TO LANDLORD THROUGHOUT THE TERM OF THIS LEASE THE FOLLOWING (COLLECTIVELY, “ADDITIONAL RENT”):

 

	 	
Section 

	
3.1         A sum equal to sixteen point nine percent (16.9%) (which represents the ratio of the Demised Premises to the area of the Building) of the Real Estate Taxes payable during the term of this Lease.  The term “Real Estate Taxes” shall mean all real estate taxes, all assessments (provided assessments that may be paid in installments as opposed to a lump sum shall be paid in installments) and any taxes in lieu thereof which may be levied upon or assessed against the Property or any part thereof less the amount of any tax refund received by Landlord attributable to such year.  “Real Estate Taxes” shall not include any federal or state inheritance, general income, or gift or estate taxes.

 

In the event the taxing authorities include in such Real Estate Taxes the value of any improvements made by Tenant, or of machinery, equipment, fixtures, inventory or other personal property or assets of Tenant, then Tenant shall pay all the taxes attributable to such items in addition to its proportionate share of said Real Estate Taxes.  A photostatic copy of the tax statement submitted by Landlord to Tenant, if requested by Tenant, shall be sufficient evidence of the amount of taxes and assessments assessed or levied against the Property or any part thereof.

 

  

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Section 

	
3.2           Except as set forth below, a sum equal to sixteen point nine percent (16.9%) (which represents the ratio of the Demised Premises to the area of the Building) of the annual aggregate Operating Expenses incurred by Landlord in the operation, maintenance and repair of the Property.  The term “Operating Expenses” shall include but not be limited to Landlord’s actual reasonable and competitive costs of maintenance, repair, replacement and care of all common area lighting, common area plumbing and roofs, parking and landscaped areas, signs, snow removal, non-structural repair and maintenance of the exterior of the Building, insurance premiums, management fees (not to exceed 5% of the amount of the gross revenues generated from the Building), wages and fringe benefits of personnel employed for such work at the Building, costs of equipment purchased and used for such purposes, and the cost or portion thereof properly allocable to the Property (amortized over such reasonable period as Landlord shall determine (not to be less than seven years) together with the interest at the rate of nine percent (9%) per annum on the unamortized balance) of any capital improvements made to the Building by Landlord after the year in which the term of this Lease commences which are made for the purpose of reducing Operating Expenses or made to the Building by Landlord after the date of this Lease that are required under any governmental law or regulation that was not applicable to the Building as of the date hereof; provided such capital items would not otherwise be excluded by applying GAAP.

 

The following items may not be included in Operating Expenses:

 

A.      The cost of any items for which the Landlord is actually reimbursed by condemnation proceeds or insurance carried;

 

B.      Legal and other professional fees incurred by the Landlord in connection with the execution of leases and the expenses of enforcing any such leases;

 

C.      Leasehold improvements made in tenant spaces for other tenants or occupants of the Building or made in tenant spaces in order to prepare space for occupancy by a new tenant or other occupant;

 

D.      Interest on, and amortization of, mortgages and any recording or mortgage tax or expense in connection therewith;

 

E.      Advertising and promotional expenses;

 

F.      The cost of any repair made to the common areas by the Landlord to correct any violation of law existing as of the date of this Lease;

 

  

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G.      The cost of any items for which the Landlord is reimbursed by other tenants or occupants of the Building (except pursuant to provisions for the payment of a share of common areas costs and expenses) or by warranty or for which the Landlord is otherwise compensated;

 

H.      Depreciation of the original cost of constructing or expanding the

 

common areas and the balance of the Building;

 

I.      Any costs stated in common area costs and expenses representing an amount paid to a Landlord-related corporation or entity which is in excess of the amount which would be paid in the absence of such relationship;

 

J.      Any amounts held in reserve to be utilized in future years; and

 

K.     Except as set forth above, capital items chargeable according to generally accepted accounting principals (“GAAP”).

 

Notwithstanding the foregoing, Tenant’s proportionate share of Operating Expenses shall not exceed $1.50 per square foot per annum during the first year of the Lease and no more than a five percent (5%) increase in any one year thereafter during the second, third and fourth lease year.

 

	 	
Section

	
3.3          The payment of the sums set forth in this Article 3 shall be in addition to the Base Rent payable pursuant to Article 2 of this Lease.  In the event the lease term shall begin or expire at any time during any calendar year, the Tenant shall be responsible for its pro rata share of Additional Rent under subdivisions a. and b. during the Lease term.

 

	 	
Section

	
3.4         Prior to commencement of this Lease and prior to the commencement of each calendar year during the term of this Lease or any renewal or extension thereof, Landlord may estimate for each calendar year (i) the total amount of Real Estate Taxes; (ii) the total amount of Operating Expenses; (iii) Tenant’s share of Real Estate Taxes for such calendar year; (iv) Tenant’s share of Operating Expenses for such calendar year; and (v) the computation of the annual and monthly rental payable during such calendar year as a result of the Base Rent plus Tenant’s estimated share of Real Estate Taxes and Operating Expenses

 

	 	
Section

	
3.5          The amount of Tenant’s share of Real Estate Taxes and Operating Expenses for each calendar year, as so estimated, shall be payable as Additional Rent, in equal monthly installments, in advance, on the first day of each month during such calendar year.  In the event that such estimate is delivered to Tenant before the first day of January of such calendar year, the estimated amount shall be payable as Additional Rent in equal monthly installments, in advance on the first day of each month during such calendar year.  In the event that such estimate is delivered to Tenant after the first day of January of such calendar year, the estimated amount shall be payable as Additional Rent in equal monthly installments, in advance, on the first day of each month over the balance of such calendar year, with the number of installments being equal to the number of full calendar months remaining in such calendar year.

 

  

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Upon completion of each calendar year during the term of this Lease or any renewal or extension thereof, Landlord shall determine the actual amount of the Real Estate Taxes and Operating Expenses payable in such calendar year and Tenant’s share thereof and deliver a written statement of the amounts thereof to Tenant together with written 

 

certification setting forth the computation of the amount due from Tenant.  If Tenant has underpaid its share of Real Estate Taxes or Operating Expenses for such calendar year, Tenant shall pay the balance of its share thereof within ten (10) days after the receipt of such statement.  If Tenant has overpaid its share of Real Estate Taxes or Operating Expenses for such calendar year, Landlord shall either (i) refund such excess, or (ii) credit such excess against the most current monthly installment or installments due Landlord for Base Rent or its estimate of Tenant’s share of Real Estate Taxes and Operating Expenses for the next following calendar year.  A pro rata adjustment shall be made for any fractional calendar year occurring during the term of this Lease or any renewal or extension thereof based upon the number of days of the term of the Lease during said calendar year and all additional sums payable by Tenant or credits due Tenant as a result of the provisions of this Article 3 shall be adjusted accordingly..

 

	 	
Section 

	
3.6          Tenant or its authorized agent shall have the right, upon 5 days prior written notice to Landlord, to inspect, at Landlord’s main accounting offices, Landlord’s books, and records regarding any Operating Expenses paid by Tenant.  Landlord agrees to maintain such books and records at its main accounting office for a minimum of 2 years following the expiration of each accounting year to which such books and records pertain.  If Tenant’s audit discloses that Landlord has overstated Tenant’s required contribution toward any expenses by 4% of more during any one accounting year, then Landlord shall pay for the reasonable cost of such audit.  Any refund due Tenant shall be payable to Tenant within 30 days after Tenant’s request.

 

COVENANT TO PAY RENT

 

ARTICLE IV.EXCEPT AS SET FORTH HEREIN, THE COVENANTS OF TENANT TO PAY THE BASE RENT AND THE ADDITIONAL RENT ARE EACH INDEPENDENT OF ANY OTHER COVENANT, CONDITION, PROVISION, OR AGREEMENT CONTAINED IN THIS LEASE.  ALL RENTS ARE PAYABLE TO LANDLORD AT:

 

Welsh Lenexa II, LLC

c/o Grubb & Ellis / The Winbury Group

4520 Main Street, Suite 1000

Kansas City, MO  64111

 

(or such other address indicated in writing by Landlord).

 

  

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UTILITIES

 

ARTICLE V.LANDLORD SHALL SUPPLY WATER, GAS, ELECTRICITY, SANITARY SEWAGE, TELEPHONE, FIBER OPTIC COMMUNICATION SERVICE, DSL, AND CABLE MODEM CONNECTION TO THE PROPERTY AS PROVIDED IN THE PLANS AND SPECIFICATIONS APPROVED BY TENANT.  TENANT SHALL PAY, WHEN DUE, ALL CHARGES FOR SEWER USAGE OR RENTAL, GARBAGE, DISPOSAL, REFUSE REMOVAL, WATER, ELECTRICITY, GAS, FUEL OIL, L.P. GAS, TELEPHONE AND ANY OTHER UTILITY SERVICES OR ENERGY SOURCE FURNISHED TO THE DEMISED PREMISES DURING THE TERM OF THIS LEASE, AND ANY RENEWAL OR EXTENSION THEREOF.  IF LANDLORD ELECTS TO FURNISH ANY OF THE FOREGOING UTILITY SERVICES OR OTHER SERVICES

 

furnished or caused to be furnished to Tenant, then the rate charged by Landlord shall not exceed the rate Tenant would be required to pay to a utility company or service company furnishing any of the foregoing utilities or services (under similar circumstances).  All amounts payable by Tenant to Landlord hereunder shall be deemed Additional Rent in accordance with Article 3.

 

CARE AND REPAIR OF DEMISED PREMISES

ARTICLE VI.TENANT SHALL, AT ALL TIMES THROUGHOUT THE TERM OF THIS LEASE, INCLUDING RENEWALS AND EXTENSIONS, AND AT ITS SOLE EXPENSE, KEEP AND MAINTAIN THE DEMISED PREMISES IN A CLEAN, SAFE, SANITARY AND FIRST CLASS CONDITION AND IN COMPLIANCE WITH ALL APPLICABLE LAWS, CODES, ORDINANCES, RULES AND REGULATIONS; PROVIDED LANDLORD DELIVERS THE DEMISED PREMISES TO TENANT IN COMPLIANCE WITH SUCH LAWS, CODES, ORDINANCES, RULES AND REGULATIONS.  TENANT’S OBLIGATIONS HEREUNDER SHALL INCLUDE BUT NOT BE LIMITED TO THE MAINTENANCE, REPAIR AND REPLACEMENT, IF NECESSARY, OF HEATING AND AIR CONDITIONING FIXTURES, EQUIPMENT, AND SYSTEMS (THE “HVAC EQUIPMENT”), ALL LIGHTING AND PLUMBING AND FIXTURES AND EQUIPMENT, FIXTURES, MOTORS AND MACHINERY, ALL INTERIOR WALLS (EXCEPT THOSE THAT ARE LOAD BEARING), PARTITIONS, DOORS AND WINDOWS, INCLUDING THE REGULAR PAINTING THEREOF (NOT TO BE MORE FREQUENT THAN EVERY TWO YEARS), ALL EXTERIOR ENTRANCES TO THE DEMISED PREMISES, WINDOWS, DOORS AND LOADING DOCKS AND DOCK EQUIPMENT AND THE REPLACEMENT OF ALL BROKEN GLASS.  WHEN USED IN THIS PROVISION, THE TERM “REPAIRS” SHALL INCLUDE REPLACEMENTS OR RENEWALS WHEN NECESSARY, AND ALL SUCH REPAIRS MADE BY THE TENANT SHALL BE EQUAL IN QUALITY AND CLASS TO THE ORIGINAL WORK.  WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, TENANT SHALL OBTAIN AND MAINTAIN AT ALL TIMES DURING THE TERM OF THIS LEASE A MAINTENANCE CONTRACT WITH A RESPONSIBLE, LICENSED HVAC CONTRACTOR, ON TERMS REASONABLY ACCEPTABLE TO LANDLORD, FOR THE REGULAR MAINTENANCE OF ALL HVAC EQUIPMENT (NOT TO BE MORE THAN ONCE PER YEAR) WITHIN OR EXCLUSIVELY SERVING THE DEMISED PREMISES, AND SHALL BE RESPONSIBLE FOR THE PERFORMANCE OF ALL MAINTENANCE TO BE PERFORMED THEREUNDER.  TENANT SHALL KEEP ACCURATE AND COMPLETE RECORDS OF THE PERFORMANCE OF ALL SCHEDULED MAINTENANCE UNDER SUCH CONTRACT AND SHALL PROVIDE COPIES THEREOF TO LANDLORD FROM TIME TO TIME UPON REQUEST BY LANDLORD.  THE TENANT SHALL KEEP AND MAINTAIN ALL PORTIONS OF THE DEMISED PREMISES IN A CLEAN AND ORDERLY CONDITION.

 

  

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If Tenant fails, refuses or neglects to maintain or repair the Demised Premises as required in this Lease, after 10 days prior written notice shall have been given Tenant in accordance with Article 33 of this Lease, Landlord may make such repairs for any loss or damage that may accrue to Tenant’s merchandise, fixtures or other property or to Tenant’s business by reason thereof, and upon completion thereof, Tenant shall pay to Landlord all costs plus 5% for overhead incurred by Landlord in making such repairs upon presentation to Tenant of bill therefor; provided, however, that no notice shall be required in the event of any hazardous or emergency condition.

 

Landlord shall repair, at its expense (subject to inclusion in “Operating Expenses” pursuant to Section 3), the structural portions of the Building, including, without limitation, the roof, exterior walls, foundation, and load bearing walls.

 

Landlord shall be responsible for all outside maintenance of the Demised Premises, including grounds and parking areas, sidewalks, and areas adjoining the Demised Premises, all in a clean and orderly condition, free of accumulation of dirt, rubbish, snow and ice.  All such maintenance which is the responsibility of the Landlord shall be provided as reasonably necessary to the comfortable use and occupancy of Demised Premises during business hours, except Saturdays, Sundays and holidays, upon the condition that the Landlord shall not be liable for damages for failure to do so due to causes beyond its control

 

SIGNS

 

ARTICLE VII.ANY SIGN, LETTERING, PICTURE, NOTICE, OR ADVERTISEMENT INSTALLED ON OR IN ANY PART OF THE PROPERTY AND VISIBLE FROM THE EXTERIOR OF THE BUILDING, OR VISIBLE FROM THE EXTERIOR OF THE DEMISED PREMISES, SHALL BE SUBJECT TO LANDLORD’S PRIOR REASONABLE APPROVAL AND SHALL BE INSTALLED AT TENANT’S EXPENSE.  IN THE EVENT OF A VIOLATION OF THE FOREGOING BY TENANT, LANDLORD MAY REMOVE THE SAME WITHOUT ANY LIABILITY AND MAY CHARGE THE EXPENSE INCURRED BY SUCH REMOVAL TO TENANT.

 

  

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ALTERATIONS, INSTALLATION, FIXTURES

 

ARTICLE VIII.EXCEPT AS HEREINAFTER PROVIDED, TENANT SHALL NOT MAKE ANY ALTERATION, ADDITIONS, OR IMPROVEMENTS IN OR TO THE DEMISED PREMISES OR ADD, DISTURB OR IN ANY WAY CHANGE ANY PLUMBING OR WIRING THEREIN WITHOUT THE PRIOR WRITTEN CONSENT OF THE LANDLORD.  IN THE EVENT ALTERATIONS ARE REQUIRED BY ANY GOVERNMENTAL AGENCY BY REASON OF THE USE AND OCCUPANCY OF THE DEMISED PREMISES BY TENANT, TENANT SHALL MAKE SUCH ALTERATIONS AT ITS OWN COST AND EXPENSE AFTER FIRST OBTAINING LANDLORD’S APPROVAL OF PLANS AND SPECIFICATIONS THEREFOR AND FURNISHING SUCH INDEMNIFICATION AS LANDLORD MAY REASONABLY REQUIRE AGAINST LIENS, COSTS, DAMAGES AND EXPENSES ARISING OUT OF SUCH ALTERATIONS.  ALTERATIONS OR ADDITIONS BY TENANT MUST BE MADE IN COMPLIANCE WITH ALL LAWS, ORDINANCES AND GOVERNMENTAL REGULATIONS AFFECTING THE PROPERTY AND TENANT SHALL WARRANT TO LANDLORD THAT ALL SUCH ALTERATIONS, ADDITIONS, OR IMPROVEMENTS SHALL BE IN STRICT COMPLIANCE WITH ALL RELEVANT LAWS, ORDINANCES, GOVERNMENTAL REGULATIONS, PERMITS AND INSURANCE REQUIREMENTS.  CONSTRUCTION OF SUCH ALTERATIONS OR ADDITIONS SHALL COMMENCE ONLY UPON TENANT OBTAINING AND EXHIBITING TO LANDLORD THE REQUISITE APPROVALS, LICENSES AND PERMITS AND INDEMNIFICATION AGAINST LIENS.  ALL ALTERATIONS, INSTALLATIONS, PHYSICAL ADDITIONS OR IMPROVEMENTS TO THE DEMISED PREMISES MADE BY TENANT SHALL AT ONCE BECOME THE PROPERTY OF LANDLORD AND SHALL BE SURRENDERED TO LANDLORD UPON THE TERMINATION OF THIS LEASE; PROVIDED, HOWEVER, THIS CLAUSE SHALL NOT APPLY TO TRADE FIXTURES, MOVABLE EQUIPMENT OR FURNITURE OWNED BY TENANT, WHICH MAY BE REMOVED BY TENANT AT THE END OF THE TERM OF THIS LEASE.  TENANT SHALL BE RESPONSIBLE FOR ALL COSTS RELATED TO IMPROVEMENTS OR MODIFICATIONS TO THE DEMISED PREMISES REQUIRED OR NECESSARY TO COMPLY WITH THE AMERICANS WITH DISABILITIES ACT OF 1990 (ADA), OR SIMILAR STATUTES OR LAW; PROVIDED THE DEMISED PREMISES WERE DELIVERED TO TENANT IN COMPLIANCE WITH ADA.

 

Notwithstanding the foregoing, Tenant may make non-structural alterations and minor plumbing and wiring changes to the Demised Premises deemed necessary in Tenant’s sole discretion without obtaining Landlord’s consent.

 

POSSESSION

 

ARTICLE IX.EXCEPT AS HEREINAFTER PROVIDED, LANDLORD SHALL DELIVER POSSESSION OF THE DEMISED PREMISES TO TENANT IN THE CONDITION REQUIRED BY THIS LEASE ON OR BEFORE DECEMBER 1, 2001.  LANDLORD SHALL DELIVER THE LEASED PREMISES TO TENANT IN COMPLIANCE WITH ALL APPLICABLE LAWS, CODES, ORDINANCES, RULES AND REGULATIONS, INCLUDING WITHOUT LIMITATION THE ADA AND ALL ENVIRONMENTAL LAWS (AS DEFINED BELOW).  LANDLORD SHALL NOT BE LIABLE IN ANY RESPECT FOR ANY FAILURE TO DELIVER POSSESSION OF THE DEMISED PREMISES TO TENANT ON OR BEFORE DECEMBER 1, 2001.  IF LANDLORD FAILS TO DELIVER POSSESSION OF THE DEMISED PREMISES TO TENANT COMPLETED ACCORDING TO THE PLANS AND SPECIFICATIONS SET FORTH HEREIN ON OR BEFORE SEVENTY-FIVE (75) DAYS AFTER THE DATE OF THIS LEASE (“LATE DELIVERY DATE”), THEN, SUBJECT TO FORCE MAJEURE, FOR EVERY DAY THE LANDLORD DELIVERS THE DEMISED PREMISES AFTER THE LATE DELIVERY DATE TENANT SHALL RECEIVE TWO DAYS FREE RENT, EXCEPT THAT IF THE DEMISED PREMISES ARE NOT DELIVERED TO TENANT BY FEBRUARY 1, 2002, THEN TENANT MAY TERMINATE THIS LEASE.  THE RENTALS HEREIN RESERVED SHALL COMMENCE ON THE COMMENCEMENT DATE.  ANY OCCUPANCY BY TENANT PRIOR TO THE BEGINNING OF THE TERM SHALL IN ALL RESPECTS BE THE SAME AS THAT OF A TENANT UNDER THIS LEASE.

 

  

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SECURITY AND DAMAGE DEPOSIT

 

ARTICLE X.TENANT CONTEMPORANEOUSLY WITH THE EXECUTION OF THIS LEASE, HAS DEPOSITED WITH LANDLORD THE SUM OF FOURTEEN THOUSAND TWO HUNDRED SEVENTY-EIGHT AND 66/100 DOLLARS ($14,278.66), RECEIPT OF WHICH IS ACKNOWLEDGED HEREBY BY LANDLORD, WHICH DEPOSIT IS TO BE HELD BY LANDLORD, WITHOUT LIABILITY FOR INTEREST, AS A SECURITY AND DAMAGE DEPOSIT FOR THE FAITHFUL PAYMENT AND PERFORMANCE BY TENANT OF ALL OF ITS OBLIGATIONS HEREUNDER, DURING THE TERM HEREOF AND ANY EXTENSION HEREOF.  LANDLORD MAY CO-MINGLE SUCH DEPOSIT WITH LANDLORD’S OWN FUNDS AND TO USE SUCH SECURITY DEPOSIT FOR SUCH PURPOSE AS LANDLORD MAY DETERMINE.  IN THE EVENT OF THE FAILURE OF TENANT TO KEEP AND PERFORM ANY OF THE TERMS, COVENANTS AND CONDITIONS OF THIS LEASE TO BE KEPT AND PERFORMED BY TENANT DURING THE TERM HEREOF AND ANY EXTENSION HEREOF, AND WITHOUT LIMITING ANY OTHER REMEDY AVAILABLE TO LANDLORD, THEN LANDLORD EITHER WITH OR WITHOUT TERMINATING THIS LEASE, MAY (BUT SHALL NOT BE REQUIRED TO) APPLY SUCH PORTION OF SAID DEPOSIT AS MAY BE NECESSARY TO COMPENSATE OR REPAY LANDLORD FOR ALL LOSSES OR DAMAGES SUSTAINED OR TO BE SUSTAINED BY LANDLORD DUE TO SUCH BREACH ON THE PART OF TENANT, INCLUDING, BUT NOT LIMITED TO OVERDUE AND UNPAID RENT, ANY OTHER SUM PAYABLE BY TENANT TO LANDLORD PURSUANT TO THE PROVISIONS OF THIS LEASE, DAMAGES OR DEFICIENCIES IN ANY RELETTING OF THE DEMISED PREMISES, AND REASONABLE ATTORNEY’S FEES INCURRED BY LANDLORD.  SHOULD THE ENTIRE DEPOSIT OR ANY PORTION THEREOF, BE APPROPRIATED AND APPLIED BY LANDLORD, IN ACCORDANCE WITH THE PROVISIONS OF THIS PARAGRAPH, TENANT UPON WRITTEN DEMAND BY LANDLORD, SHALL REMIT FORTHWITH TO LANDLORD A SUFFICIENT AMOUNT OF CASH TO RESTORE SAID SECURITY DEPOSIT TO THE ORIGINAL SUM DEPOSITED, AND TENANT’S FAILURE TO DO SO WITHIN FIVE (15) DAYS AFTER RECEIPT OF SUCH DEMAND SHALL CONSTITUTE A BREACH OF THIS LEASE.  SAID SECURITY DEPOSIT SHALL BE RETURNED TO TENANT, LESS ANY AMOUNTS RETAINED BY LANDLORD PURSUANT TO THE PROVISIONS OF THIS PARAGRAPH, AT THE END OF THE TERM OF THIS LEASE OR ANY RENEWAL THEREOF, OR UPON THE EARLIER TERMINATION OF THIS LEASE.  TENANT SHALL HAVE NO RIGHT TO ANTICIPATE RETURN OF SAID DEPOSIT BY WITHHOLDING ANY AMOUNT REQUIRED TO BE PAID PURSUANT TO THE PROVISIONS OF THIS LEASE OR OTHERWISE.

 

  

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In the event Landlord shall sell the Property, or shall otherwise dispose of its interest in this Lease, Landlord shall assign said security deposit or any balance thereof to Landlord’s assignee, whereupon Landlord shall be released from all liability for the return or repayment of such security deposit, and Tenant shall look solely to the said assignee for the return and repayment of said security deposit.  Said security deposit shall not be assigned or encumbered by Tenant without the written consent of Landlord, and any assignment or encumbrance without such consent shall not bind Landlord.  In the event of any rightful and permitted assignment of this Lease by Tenant, said security deposit shall be deemed to be held by Landlord as a deposit made by the assignee, and Landlord shall have no further liability with respect to the return of said security deposit to the Tenant

 

USE

ARTICLE XI.LANDLORD ACKNOWLEDGES THE BUILDING IS ZONED BP2 AND THAT TENANT’S USE AS DESCRIBED HEREIN IS IN COMPLIANCE WITH THIS ZONING DESIGNATION.  THE DEMISED PREMISES SHALL BE USED AND OCCUPIED BY TENANT SOLELY FOR THE PURPOSES OF CONTRACT MANUFACTURING UTILIZING HEAVY EQUIPMENT INCLUDING BUT NOT LIMITED TO MILLS, LATHES, CAM AND SWISS SCREW MACHINES AND SECONDARILY, OPERATIONS SUCH AS HEAT TREATING, CRIMPING, STAMPING AND ASSEMBLY, SO LONG AS SUCH USE IS IN COMPLIANCE WITH ALL APPLICABLE LAWS, ORDINANCES AND GOVERNMENTAL REGULATIONS AFFECTING THE BUILDING AND DEMISED PREMISES.  LANDLORD ACKNOWLEDGES THAT SO LONG AS TENANT IS USING THE DEMISED PREMISES AS PROVIDED HEREIN: (I) LANDLORD SHALL NOT BE REQUIRED TO MAKE ANY SPECIAL ALTERATIONS NOT CONTEMPLATED HEREIN OR IN THE PLANS AND SPECIFICATIONS, (II) INSURANCE PREMIUMS WILL NOT BE INCREASED, (III) NO STOCK OR GOODS OR ACT OF TENANT WILL IN ANY WAY IMPAIR OR INVALIDATE THE OBLIGATION OF THE LANDLORD’S INSURER UNDER ANY POLICY OF INSURANCE REQUIRED BY THIS LEASE, AND (IV) TENANT’S USE WILL NOT CREATE WASTE OR A NUISANCE, OR UNREASONABLY DISTURB OTHER TENANTS IN THE BUILDING.  THE DEMISED PREMISES SHALL NOT BE USED IN SUCH MANNER THAT, IN ACCORDANCE WITH ANY REQUIREMENT OF LAW OR OF ANY PUBLIC AUTHORITY, LANDLORD SHALL BE OBLIGATED, AS A RESULT OF THE PURPOSE OR MANNER OF SAID USE, TO MAKE ANY ADDITION OR ALTERATION TO OR IN THE BUILDING.  THE DEMISED PREMISES SHALL NOT BE USED IN ANY MANNER WHICH WILL INCREASE THE RATES REQUIRED TO BE PAID FOR PUBLIC LIABILITY OR FOR FIRE AND EXTENDED COVERAGE INSURANCE COVERING THE DEMISED PREMISES TENANT SHALL OCCUPY THE DEMISED PREMISES, CONDUCT ITS BUSINESS AND CONTROL ITS AGENTS, EMPLOYEES, INVITEES AND VISITORS IN SUCH A WAY AS IS LAWFUL AND REPUTABLE, AND WILL NOT PERMIT OR CREATE ANY NUISANCE, NOISE, ODOR, OR OTHERWISE INTERFERE WITH, ANNOY OR DISTURB ANY OTHER TENANT IN THE BUILDING IN ITS NORMAL BUSINESS OPERATIONS OR LANDLORD IN ITS MANAGEMENT OF THE BUILDING.  TENANT’S USE OF THE DEMISED PREMISES SHALL CONFORM TO ALL THE LANDLORD’S RULES AND REGULATIONS RELATING TO THE USE OF THE DEMISED PREMISES.  OUTSIDE STORAGE ON THE DEMISED PREMISES OF ANY TYPE OF EQUIPMENT, PROPERTY OR MATERIALS OWNED OR USED BY TENANT OR ITS CUSTOMERS OR SUPPLIERS SHALL NOT BE PERMITTED.

 

  

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ACCESS TO DEMISED PREMISES

ARTICLE XII.THE TENANT AGREES TO PERMIT THE LANDLORD AND THE AUTHORIZED REPRESENTATIVES OF THE LANDLORD TO ENTER THE DEMISED PREMISES UPON 24 HOURS PRIOR NOTICE (EXCEPT

 

in the case of an emergency) at all times during usual business hours for the purpose of inspecting the same and making any necessary repairs to the Demised Premises and performing any work therein that may be necessary to comply with any laws, ordinances, rules, regulations or requirements of any public authority or of the Board of Fire Underwriters or any similar body or that the Landlord may deem necessary to prevent waste or deterioration in connection with the Demised Premises.  Nothing herein shall imply any duty upon the part of the Landlord to do any such work which, under any provision of this Lease, the Tenant may be required to perform and the performance thereof by the Landlord shall not constitute a waiver of the Tenant’s default in failing to perform the same.  The Landlord may, during the progress of any work in the Demised Premises, keep and store upon the Demised Premises all necessary materials, tools and equipment.  The Landlord shall use its best efforts to not disturb Tenant’s business.  The Landlord shall not in any event be liable for inconvenience, annoyance, or disturbance by reason of making repairs or the performance of any work in the Demised Premises, or on account of bringing materials, supplies and equipment into or through the Demised Premises during the course thereof and the obligations of the Tenant under this Lease shall not thereby be affected in any manner whatsoever.

 

Landlord reserves the right to enter upon the Demised Premises at any time in the event of an emergency and at reasonable hours to exhibit the Demised Premises to prospective purchasers or others during the last 180 days of the term of this Lease, all without hindrance or molestation by Tenant.

 

EMINENT DOMAIN

 

ARTICLE XIII.IN THE EVENT OF ANY EMINENT DOMAIN OR CONDEMNATION PROCEEDING OR PRIVATE SALE IN LIEU THEREOF IN RESPECT TO THE BUILDING DURING THE TERM HEREOF, THE FOLLOWING PROVISIONS SHALL APPLY:

 

  

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Section 

	
13.1         If the whole of the Building shall be acquired or condemned by eminent domain for any public or quasi-public use or purpose, then the term of this Lease shall cease and terminate as of the date possession shall be taken in such proceeding and all rentals shall be paid up to that date.

 

	 	
Section

	
13.2         If any part constituting less than the whole of the Building shall be acquired or condemned as aforesaid, and in the event that such partial taking or condemnation shall materially affect the Demised Premises so as to render the Demised Premises unsuitable for the business of the Tenant, then, the term of this Lease shall cease and terminate as of the date possession shall be taken by the condemning authority and rent shall be paid to the date of such termination.

 

In the event of a partial taking or condemnation of the Building which shall not materially affect the Demised Premises so as to render the Demised Premises unsuitable for the business of the Tenant, this Lease shall continue in full force and effect but with a proportionate reduction of the Base Rent and Additional Rent based on the portion of the Building taken.  Landlord reserves the right, at its option, to restore the Building and the Demised Premises to substantially the same condition as they were prior to such condemnation.  In such event, Landlord shall give written notice to Tenant, within thirty (30) days following the date

 

possession shall be taken by the condemning authority, of Landlord’s intention to restore.  Upon Landlord’s notice of election to restore, Landlord shall commence restoration and shall restore the Building and the Demised Premises with reasonable promptness, subject to delays beyond Landlord’s control and delays in the receipt of condemnation or sale proceeds by Landlord; and Tenant shall have no right to terminate this Lease except as herein provided.  Upon completion of such restoration, the rent shall be re-adjusted based upon the portion, if any, of the Building restored.

 

	 	
Section 

	
13.3         In the event of any condemnation or taking as aforesaid, whether whole or partial, the Tenant shall not be entitled to any part of the award paid for such condemnation and Landlord is to receive the full amount of such award, the Tenant hereby expressly waiving any right to claim to any part thereof.

 

	 	
Section 

	
13.4        Although all damages in the event of any condemnation shall belong to the Landlord whether such damages are awarded as compensation for diminution in value of the leasehold or to the fee of the Demised Premises, Tenant shall have the right to claim and recover from the condemning authority, but not from Landlord, such compensation as may be separately awarded or recoverable by Tenant in Tenant’s own right on account of any and all damage to Tenant’s business by reason of the condemnation and for or on account of any cost or loss to which Tenant might be put in removing Tenant’s merchandise, furniture, fixtures, leasehold improvements and equipment.  However, Tenant shall have no claim against Landlord and shall make no claim with the condemning authority for the loss of its leasehold estate, any unexpired term or loss of any possible renewal or extension of said lease or loss of any possible value of said Lease.

 

  

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Section 

	
13.5         Notwithstanding the foregoing, if a partial taking or condemnation of the Building materially affects the Demised Premises and such taking or condemnation occurs in the last two years of this Lease, then Tenant may terminate the Lease effective as of the taking or condemnation.

 

DAMAGE OR DESTRUCTION

 

ARTICLE XIV.IN THE EVENT OF ANY DAMAGE OR DESTRUCTION TO THE DEMISED PREMISES BY FIRE OR OTHER CAUSE DURING THE TERM HEREOF, THE FOLLOWING PROVISIONS SHALL APPLY:

 

	 	
Section 

	
14.1         If the Building is damaged by fire or any other cause to such extent that the cost of restoration, as reasonably estimated by Landlord, will equal or exceed thirty percent (30%) of the replacement value of the Building (exclusive of foundations) just prior to the occurrence of the damage, then Landlord may, no later than the sixtieth (60th) day following the damage, give Tenant written notice of Landlord’s election to terminate this Lease; provided the leases of other similarly situated tenants are also terminated.

 

	 	
Section

	
14.2         If the cost of restoration as estimated by Landlord will equal or exceed thirty percent (30%) of said replacement value of the Building and if the Demised Premises are not suitable as a result of said damage for the

 

purposes for which they are demised hereunder, in the reasonable opinion of Landlord and Tenant, then Tenant may, no later than the sixtieth (60th) day following the damage, give Landlord a written notice of election to terminate this Lease.

 

	 	
Section 

	
14.3         If the cost of restoration as estimated by Landlord shall amount to less than thirty percent (30%) of said replacement value of the Building, or if, despite the cost, Landlord (or Tenant, if applicable) does not elect to terminate this Lease, Landlord shall restore the Building and the Demised Premises with reasonable promptness (not to exceed 240 days), subject to delays beyond Landlord’s control and delays in the receipt of insurance proceeds by Landlord.

 

	 	
Section

	
14.2         In the event either of the elections to terminate is properly exercised, this Lease shall be deemed to terminate on the date of the receipt of the notice of election and all rents shall be paid up to that date.  Tenant shall have no claim against Landlord for the value of any unexpired term of this Lease.

 

	 	
Section 

	
14.5         In any case where damage to the Building shall materially affect the Demised Premises so as to render them unsuitable in whole or in part for the purposes for which they are demised hereunder, then, a portion of the rent based upon the extent to which the Demised Premises are rendered unsuitable shall be abated until repaired or restored.

 

  

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CASUALTY INSURANCE

 

ARTICLE XV.Section 15.1   LANDLORD SHALL AT ALL TIMES DURING THE TERM OF THIS LEASE, AT ITS EXPENSE (EXCEPT THAT SUCH EXPENSE SHALL BE INCLUDED IN THE CALCULATION OF ADDITIONAL RENT UNDER SECTION 3 HEREOF), MAINTAIN A POLICY OR POLICIES OF INSURANCE ISSUED BY AN INSURANCE COMPANY LICENSED TO DO BUSINESS IN THE STATE OF KANSAS INSURING THE BUILDING FOR THE FULL REPLACEMENT VALUE, PROVIDED THAT LANDLORD SHALL NOT BE OBLIGATED TO INSURE ANY FURNITURE, EQUIPMENT, MACHINERY, GOODS OR SUPPLIES WHICH TENANT MAY BRING UPON THE DEMISED PREMISES.  LANDLORD MAY AT ITS OPTION ALSO ELECT TO CARRY RENT LOSS INSURANCE OR OTHER TYPES OF INSURANCE COMMONLY CARRIED BY OWNERS OF SIMILAR PROPERTIES IN THE KANSAS CITY METROPOLITAN AREA, AND THE TENANT’S PRO RATA SHARE OF THE COST THEREOF SHALL CONSTITUTE ADDITIONAL RENT.

 

	 	
Section 

	
15.2         Tenant shall not carry any stock of goods or do anything in or about the Demised Premises which will in any way impair or invalidate the obligation of the insurer under any policy of insurance required by this Lease.

 

	 	
Section 

	
15.3         Landlord hereby waives and releases all claims, liability and causes of action against Tenant and its agents, servants and employees for loss or damage to, or destruction of, the Demised Premises or any portion thereof, including the buildings and other improvements situated thereon, resulting from fire, explosion and other perils, to the extent such loss or damage is covered by standard extended coverage insurance, whether caused by the negligence of any of said persons or otherwise.  Likewise, Tenant hereby waives and releases all claims, liabilities and causes of action against Landlord and its agents, servants, and employees for loss or damage to, or destruction of, any of the improvements, fixtures, equipment, supplies, merchandise and other property, whether that of Tenant or of others in, upon or about the Demised Premises resulting from fire, explosion or the other perils included in standard extended coverage insurance, whether caused by the negligence of any of said persons or otherwise.  The waivers by Tenant and Landlord contained in this Section 15.c shall remain in force whether or not the Tenant’s or Landlord’s insurer shall consent thereto.

 

	 	
Section 

	
15.4         In the event that the use of the Demised Premises by Tenant increases the premium rate for insurance carried by Landlord on the improvements of which the Demised Premises are a part, Tenant shall pay Landlord, upon demand, the amount of such premium increase.  If Tenant installs any electrical equipment that overloads the power lines to the Building or its wiring, Tenant shall, at its own expense, make whatever changes are necessary to comply with the requirements of the insurance underwriter, insurance rating bureau and governmental authorities having jurisdiction.

 

	 	
Section 

	
15.5         Tenant shall during the term of this Lease, obtain and maintain in full force and effect at its sole cost and expense a policy or policies of insurance insuring all of its personal property located within the Demised Premises from time to time, as well as all tenant improvements made thereto, against loss or damage by fire, explosion or other such hazards and contingencies for the full replacement value thereof.  Such policy or policies shall provide that thirty (30) days written notice must be given to Landlord prior to cancellation or modification thereof.  Tenant shall furnish evidence satisfactory to Landlord at the time this Lease is executed and thereafter from time to time upon request by Landlord that such coverage is in full force and effect..

 

  

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PUBLIC LIABILITY INSURANCE

 

ARTICLE XVI.TENANT SHALL DURING THE TERM HEREOF, KEEP IN FULL FORCE AND EFFECT AT ITS EXPENSE A POLICY OR POLICIES OF PUBLIC LIABILITY INSURANCE WITH RESPECT TO THE DEMISED PREMISES AND THE BUSINESS OF TENANT IN AMOUNTS NOTE LESS THAN $1,000,000 PER OCCURRENCE, $2,000,000 AGGREGATE USING CURRENT ISO GENERAL LIABILITY FORMS OR EQUIVALENT NAMING THE LANDLORD AS AN ADDITIONAL INSURED.  SUCH POLICY OR POLICIES SHALL PROVIDE THAT THIRTY (30) DAYS WRITTEN NOTICE MUST BE GIVEN TO LANDLORD PRIOR TO CANCELLATION OR MODIFICATION THEREOF.  TENANT SHALL FURNISH EVIDENCE SATISFACTORY TO LANDLORD AT THE TIME THIS LEASE IS EXECUTED AND THEREAFTER UPON REQUEST BY LANDLORD THAT SUCH COVERAGE IS IN FULL FORCE AND EFFECT.

 

DEFAULT OF TENANT

ARTICLE XVII.Section 17.1   IN THE EVENT OF ANY FAILURE OF TENANT TO PAY ANY BASE RENT, ADDITIONAL RENT OR OTHER AMOUNTS DUE HEREUNDER WITHIN TEN (10) DAYS AFTER LANDLORD HAS PROVIDED WRITTEN NOTICE TO TENANT OF SUCH FAILURE (EXCEPT THAT IF TENANT IS IN MONETARY DEFAULT ACCORDING TO THE TERMS OF THIS LEASE WITHIN THE LAST 12 MONTHS, THEN LANDLORD SHALL NOT BE REQUIRED TO

 

provide notice to Tenant for a monetary default), or any failure to perform any other of the terms, conditions or covenants of this Lease to be observed or performed by Tenant with all reasonable diligence, but in any event for more than thirty (30) after written notice of such failure shall have been given to Tenant, or if Tenant or an agent of Tenant shall falsify any report required to be furnished to Landlord pursuant to the terms of this Lease, or if Tenant or any guarantor of this Lease shall become bankrupt or insolvent, or file any debtor proceedings, or any person shall file against Tenant or any guarantor of this Lease in any court pursuant to any statute either of the United States or of any state a petition in bankruptcy or insolvency or for reorganization or for the appointment of a receiver or trustee of all or a portion of Tenant’s or any such guarantor’s property, or if Tenant or any such guarantor makes an assignment for the benefit of creditors, or petitions for or enters into any similar arrangement, or if any guarantor of this Lease shall be in default in the performance of any covenant, duty or obligation under any guaranty or other agreement entered into with or in favor of Landlord and such default shall remain uncured for a period of thirty (30) days or more after notice of such default (except in the case of a filing of an involuntary petition against Tenant in bankruptcy, in which case the notice shall be sixty (60) days), or suffer this Lease to be taken under any writ of execution (any one or more of the foregoing shall constitute an “Event of Default”), then in any such event Tenant shall be in default hereunder, and Landlord, in addition to any other rights and remedies it may have, shall have with prior notice the immediate right of re-entry and may remove all persons and property from the Demised Premises and such property may be removed and stored in a public warehouse or elsewhere at the sole cost of, and for the account of Tenant, all without service of notice or resort to legal process and without being guilty of trespass, or becoming liable for any loss or damage which may be occasioned thereby.

 

  

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Section 

	
17.2         Upon the occurrence of an Event of Default, Landlord shall have the right (in addition to any other rights or remedies) to either terminate this Lease or, from time to time, without terminating this Lease, to terminate Tenant’s right of possession of the Demised Premises.  If Landlord terminates Tenant’s right of possession only, Landlord may, but shall in no event be obligated to, make such alterations and repairs as may be necessary in order to relet the Demised Premises, and relet the Demised Premises or any part thereof upon such term or terms (which may be for a term extending beyond the term of this lease) and at such rental or rentals and upon such other terms and conditions as Landlord in its sole discretion may deem advisable.  Upon any such reletting all rentals received by the Landlord from such reletting shall be applied first to the payment of any indebtedness other than rent due hereunder from Tenant to Landlord; second, to the payment of any costs and expenses of such reletting, including brokerage fees and attorney’s fees and costs of such alterations and repairs; third, to the payment of the rent due and unpaid payment of the present value of future rent as the same may become due and payable hereunder.  If such rentals received from any such reletting during any month are less than that to be paid during that month by Tenant hereunder, Tenant, upon demand, shall pay any such deficiency to Landlord.  No such re-entry or taking possession of

 

the Demised Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention is given to Tenant.  Notwithstanding any such reletting without termination, Landlord may at any time after such re-entry and reletting elect to terminate this Lease, and in addition to any other remedies it may have, it may recover from any Tenant all damages it may incur by reason of such breach, including the cost of recovering the Demised Premises, reasonable attorney’s fees, and including the worth at the time of such termination of the excess, if any, of the amount of rent and charges equivalent to rent reserved in this Lease for the remainder of the stated term over the then reasonable rental value of the Demised Premises for the remainder of the stated term, all of which amounts shall be immediately due and payable from Tenant to Landlord

 

	 	
Section

	
17.3         Landlord may, at its option, upon twenty (20) days prior written notice to Tenant, in addition to any other rights or remedies available to it in this Lease or otherwise by law, statute or equity, spend such money as is necessary to cure any default of Tenant herein and the amount so spent, and costs incurred, including reasonable attorney’s fees in curing such default, shall be paid by Tenant, as additional rent, upon demand.

 

  

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Section 

	
17.4         In the event suit shall be brought for recovery of possession of the Demised Premises, for the recovery of rent or any other amount due under the provisions of this Lease, or in connection with any Event of Default, and an Event of Default shall be established, Tenant shall pay to Landlord all expenses incurred in connection therewith, including reasonable attorney’s fees, together with interest on all such expenses at the Default Rate from the date of such breach.

 

	 	
Section 

	
17.5         Tenant hereby expressly waives any and all rights of redemption granted by or under any present or future laws in the event of Tenant being evicted or dispossessed for any cause, or in the event of Landlord obtaining possession of the Demised Premises, by reason of any Event of Default hereunder, or otherwise.  Tenant also waives any demand for possession of the Demised Premises, and any demand for payment of rent and any notice of intent to re-enter the Demised Premises, or of intent to terminate this Lease, other than the notices above provided in this Article, and waives any and every other notice or demand prescribed by any applicable statutes or laws.

 

	 	
Section

	
17.6         No remedy herein or elsewhere in this Lease or otherwise by law, statute or equity, conferred upon or reserved to Landlord shall be exclusive of any other remedy, but shall be cumulative, and may be exercised from time to time and as often as the occasion may arise

 

HOLD HARMLESS

ARTICLE XVIII.TENANT SHALL HOLD HARMLESS LANDLORD, ITS SHAREHOLDERS, DIRECTORS, OFFICERS, AGENTS AND EMPLOYEES, FROM ANY LIABILITY FOR DAMAGES TO ANY THIRD PERSON OR PROPERTY IN OR UPON THE DEMISED PREMISES AND THE DEMISED PREMISES, AND ALL PERSONS IN THE BUILDING AT ITS OR THEIR INVITATION OR SUFFERANCE, AND FROM ALL DAMAGES RESULTING FROM TENANT’S FAILURE TO PERFORM THE COVENANTS OR OTHER PROVISIONS OF THIS LEASE.  LANDLORD SHALL HOLD HARMLESS TENANT, ITS

 

shareholders, directors, officers, agents and employees, from any liability for damages to any third person or property in or upon the Demised Premises, the Demised Premises and the Building, and all persons in the Building at its or their invitation or sufferance, and from all damages resulting from Landlord’s failure to perform the covenants or other provisions of this Lease.  Landlord and Tenant each waive and release the other from all claims for damage to person or property sustained by the other or by the others employees, agents, or servants resulting from said Building or any part of it, or any equipment or appurtenance becoming out of repair, or resulting from any accident in or about the Demised Premises or the Building, or resulting directly or indirectly from any act or neglect of any other tenant or occupant of the Building, or of any other person; provided, Tenant and Landlord agree to first make an insurance claim to the extent coverage is available.  All property kept, maintained or stored on the Demised Premises shall be so kept, maintained or stored at the sole risk of Tenant, Tenant agrees to pay all sums of money in respect of any labor, service, materials, supplies or equipment furnished or alleged to have been furnished to Tenant in or about the Demised Premises, and not furnished on order of Landlord, which may be secured by any mechanic’s materialmen’s or other lien provided that Tenant may contest such lien, upon providing Landlord adequate security against such lien.  If any such lien is reduced to final judgment and if such judgment or process thereon is not stayed, or if stayed and said stay expires, then Tenant shall immediately pay and discharge said judgment.

 

  

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NON-LIABILITY

ARTICLE XIX.EXCEPT AS PROVIDED ABOVE IN SECTION 18, LANDLORD SHALL NOT BE LIABLE FOR DAMAGE TO ANY PROPERTY OF TENANT OR OF OTHERS LOCATED ON THE DEMISED PREMISES, NOR FOR THE LOSS OF OR DAMAGE TO ANY PROPERTY OF TENANT OR OF OTHERS BY THEFT OR OTHERWISE.  ALSO, EXCEPT AS PROVIDED IN SECTION 18, WITHOUT LIMITING THE FOREGOING, LANDLORD SHALL NOT BE LIABLE FOR ANY INJURY OR DAMAGE TO PERSONS OR PROPERTY RESULTING FROM FIRE, EXPLOSION, ANY INJURY OR DAMAGE TO PERSONS OR PROPERTY RESULTING FROM FIRE, EXPLOSION, FALLING PLASTER, STEAM, GAS, ELECTRICITY, WATER, RAIN OR SNOW OR LEAKS FROM ANY PART OF THE DEMISED PREMISES OR FROM THE PIPES, APPLIANCES, OR PLUMBING WORKS OR FROM THE ROOF, STREET OR SUBSURFACE OR FROM ANY OTHER PLACE OR BY DAMPNESS OR BY ANY SUCH DAMAGE CAUSED BY OTHER TENANTS OR PERSONS IN THE DEMISED PREMISES, OCCUPANTS OF ADJACENT PROPERTY, OF THE BUILDINGS, OR THE PUBLIC OR CAUSED BY OPERATIONS IN CONSTRUCTION OF ANY PRIVATE, PUBLIC OR QUASI-PUBLIC WORK.  ALL PROPERTY OF TENANT KEPT OR STORED ON THE DEMISED PREMISES SHALL BE SO KEPT OR STORED AT THE RISK OF TENANT ONLY.

 

SUBORDINATION

ARTICLE XX.Section 20.1    THIS LEASE SHALL BE SUBORDINATED TO ANY MORTGAGES THAT MAY NOW EXIST OR THAT MAY HEREAFTER BE PLACED UPON THE DEMISED PREMISES AND TO ANY AND ALL ADVANCES MADE THEREUNDER, AND TO ALL INTEREST AND OTHER CHARGES RELATING TO THE INDEBTEDNESS EVIDENCED BY SUCH MORTGAGES, AND TO ALL RENEWALS, REPLACEMENTS, AND EXTENSIONS THEREOF.  IN THE EVENT OF EXECUTION BY LANDLORD AFTER THE DATE OF THIS LEASE OF ANY SUCH MORTGAGE, RENEWAL, REPLACEMENT OR EXTENSION, TENANT AGREES TO EXECUTE A SUBORDINATION AGREEMENT AND/OR ANY OTHER DOCUMENTS RELATING TO THIS

 

Section 20 with the holder thereof, which agreement shall provide among other things, that:

 

	 	
Section 

	
20.2         Such holder shall not disturb the possession and other rights of Tenant under this Lease so long as Tenant is not in default hereunder,

 

  

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Section 

	
20.3         In the event of acquisition of title to the Demised Premises by such holder, such holder shall accept the Tenant as Tenant of the Demised Premises under the terms and conditions of this Lease and shall perform all the obligations of Landlord hereunder, and

 

	 	
Section 

	
20.4         The Tenant shall recognize such holder as Landlord hereunder.

 

	 	
Section

	
20.5         Tenant shall, upon receipt of a request from Landlord therefor, execute and deliver to Landlord or to any proposed holder of a mortgage or trust deed or to any proposed purchaser of the Demised Premises, a certificate, in recordable form, certifying that this Lease is in full force and effect, and that there are no offsets against rent nor defenses to Tenant’s performance under this Lease, or setting forth any such offsets or defenses claimed by Tenant as the case may be.  Tenant shall execute and deliver any such subordination agreement or other such documents within ten (10) days of written request therefore.  The failure of Tenant to do so within such time frame shall constitute an immediate default hereunder without the need for Landlord to provide any notice and/or opportunity to cure as set forth in Section 17.a. hereof.  Tenant hereby irrevocably appoints Landlord its attorney in fact to execute any such subordination agreement or other such document in the name of Tenant upon the failure of Tenant to perform its obligations under this Section 20 as required hereunder.

 

ASSIGNMENT OR SUBLETTING

 

ARTICLE XXI.TENANT AGREES TO USE AND OCCUPY THE DEMISED PREMISES THROUGHOUT THE ENTIRE TERM HEREOF FOR THE PURPOSE OR PURPOSES HEREIN SPECIFIED AND FOR NO OTHER PURPOSES, IN THE MANNER AND TO SUBSTANTIALLY THE EXTENT NOW INTENDED, AND NOT TO TRANSFER OR ASSIGN THIS LEASE OR SUBLET SAID DEMISED PREMISES, OR ANY PART THEREOF, WHETHER BY VOLUNTARY ACT, OPERATION OF LAW, OR OTHERWISE, WITHOUT OBTAINING THE PRIOR WRITTEN CONSENT OF LANDLORD IN EACH INSTANCE, SUCH CONSENT NOT TO BE UNREASONABLY WITHHELD OR DELAYED.  TENANT SHALL SEEK SUCH CONSENT OF LANDLORD BY A WRITTEN REQUEST THEREFOR, SETTING FORTH SUCH INFORMATION AS LANDLORD MAY DEEM NECESSARY.  CONSENT BY LANDLORD TO ANY ASSIGNMENT OF THIS LEASE OR TO ANY SUBLETTING OF THE DEMISED PREMISES SHALL BE AT LANDLORD’S SOLE DISCRETION AND SHALL NOT BE A WAIVER OF LANDLORD’S RIGHTS UNDER THIS ARTICLE AS TO ANY SUBSEQUENT ASSIGNMENT OR SUBLETTING.  LANDLORD’S RIGHTS TO ASSIGN THIS LEASE ARE AND SHALL REMAIN UNQUALIFIED.  EXCEPT AS SET FORTH BELOW, NO SUCH ASSIGNMENT OR SUBLEASING SHALL RELIEVE THE TENANT FROM ANY OF TENANT’S OBLIGATIONS IN THIS LEASE CONTAINED, NOR SHALL ANY ASSIGNMENT OR SUBLEASE OR OTHER TRANSFER OF THIS LEASE BE EFFECTIVE UNLESS THE ASSIGNEE, SUBTENANT OR TRANSFEREE SHALL AT THE TIME OF SUCH ASSIGNMENT, SUBLEASE OR TRANSFER, ASSUME IN WRITING FOR THE BENEFIT OF LANDLORD, ITS SUCCESSORS AND ASSIGNS, ALL OF THE TERMS, COVENANTS AND CONDITIONS OF THIS LEASE THEREAFTER TO BE PERFORMED BY TENANT AND SHALL AGREE IN WRITING TO BE BOUND THEREBY.

 

  

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Notwithstanding anything contained in this Lease to the contrary, Tenant may without the consent of Landlord, at any time, assign, sublet or otherwise transfer this Lease to any parent, subsidiary or affiliate corporation or entity or any corporation or entity resulting from the consolidation or merger of Tenant into or with any other entity, or to any person, firm, entity or corporation acquiring substantially all of Tenant’s assets.  (Landlord’s consent shall not be required for any merger or consolidation that does not involve an assignment or sublet).  As used herein, the expression “affiliate corporation or entity” means a person or business entity, corporate or otherwise, that directly or indirectly, through one or more intermediaries, controls or is controlled by, or is under common control with Tenant.  The word “control” means the right and power, direct or indirect, to direct or cause the direction of the management and policies of a person or business entity, corporate or otherwise, through the ownership of voting securities, by contract or otherwise

 

Notwithstanding the foregoing, to the extent Tenant assigns the Lease to a entity or person that is not an affiliate of Tenant, and Landlord consents to such assignment, Tenant shall be released from Tenant’s obligations under this Lease effective as of the assignment consented to by Landlord, provided the assignee has a net worth or credit position equal to or better than Tenant.

 

ATTORNMENT

ARTICLE XXII.IN THE EVENT OF A SALE OR ASSIGNMENT OF LANDLORD’S INTEREST IN THE DEMISED PREMISES OR IN THE BUILDING IN WHICH THE DEMISED PREMISES ARE LOCATED, OR THIS LEASE, OR IF THE DEMISED PREMISES COME INTO CUSTODY OR POSSESSION OF A MORTGAGEE OR ANY OTHER PARTY WHETHER BECAUSE OF A MORTGAGE FORECLOSURE, OR OTHERWISE, TENANT SHALL ATTORN TO SUCH ASSIGNEE OR OTHER PARTY AND RECOGNIZE SUCH PARTY AS LANDLORD HEREUNDER; PROVIDED, HOWEVER, TENANT’S PEACEABLE POSSESSION WILL NOT BE DISTURBED SO LONG AS TENANT FAITHFULLY PERFORMS ITS OBLIGATIONS UNDER THIS LEASE.  TENANT SHALL EXECUTE, ON DEMAND, ANY ATTORNMENT AGREEMENT REQUIRED BY ANY SUCH PARTY TO BE EXECUTED, CONTAINING SUCH PROVISIONS AS SUCH PARTY MAY REQUIRE.

 

NOVATION IN THE EVENT OF SALE

ARTICLE XXIII.Section 23.1   IN THE EVENT OF THE SALE OF THE BUILDING, LANDLORD SHALL BE AND HEREBY IS RELIEVED OF ALL OF THE COVENANTS AND OBLIGATIONS CREATED HEREBY ACCRUING FROM AND AFTER THE DATE OF SALE, AND SUCH SALE SHALL RESULT AUTOMATICALLY IN THE PURCHASER ASSUMING AND AGREEING TO CARRY OUT ALL THE COVENANTS AND OBLIGATIONS OF LANDLORD HEREIN..

 

  

20

  

 

	 	
Section 

	
23.2        The Tenant agrees at any time and from time to time upon not less than ten (10) days prior written request by the Landlord to execute, acknowledge and deliver to the Landlord a statement in writing certifying that this Lease is unmodified and in full force and effect (as modified and stating the modifications, if any) and the dates to which the base rent and other charges have been paid in advance, if any, it being intended that any such statement delivered pursuant to this paragraph may be relied upon by any prospective purchaser of the fee or mortgagee or assignee of any mortgage upon the fee of the Demised Premises.

 

SUCCESSORS AND ASSIGNS

ARTICLE XXIV.THE TERMS, COVENANTS, AND CONDITIONS HEREOF SHALL BE BINDING UPON AND INURE TO THE SUCCESSORS AND PERMITTED ASSIGNS OF THE PARTIES HERETO.

 

REMOVAL OF FIXTURES

ARTICLE XXV.NOTWITHSTANDING ANYTHING CONTAINED IN ARTICLE 8, 29 OR ELSEWHERE IN THIS LEASE, IF LANDLORD REQUESTS THEN TENANT WILL PROMPTLY REMOVE AT THE SOLE COST AND EXPENSE OF TENANT ALL TRADE FIXTURES, EQUIPMENT AND FURNITURE OF TENANT, AT THE TIME TENANT VACATES THE DEMISED PREMISES.,

 

QUIET ENJOYMENT

ARTICLE XXVI.LANDLORD WARRANTS THAT IT HAS FULL RIGHT TO EXECUTE AND TO PERFORM THIS LEASE AND TO GRANT THE ESTATE DEMISED, AND THAT TENANT, UPON PAYMENT OF THE RENTS AND OTHER AMOUNTS DUE AND THE PERFORMANCE OF ALL THE TERMS, CONDITIONS, COVENANTS AND AGREEMENTS ON TENANT’S PART TO BE OBSERVED AND PERFORMED UNDER THIS LEASE, MAY PEACEABLY, AND QUIETLY ENJOY THE DEMISED PREMISES FOR THE BUSINESS USES PERMITTED HEREUNDER, SUBJECT, NEVERTHELESS, TO THE TERMS AND CONDITIONS OF THIS LEASE.

 

RECORDING

ARTICLE XXVII.TENANT SHALL NOT RECORD THIS LEASE OR ANY MEMORANDUM HEREOF WITHOUT THE WRITTEN CONSENT OF LANDLORD.  HOWEVER, UPON THE REQUEST OF EITHER PARTY HERETO, THE OTHER PARTY SHALL JOIN IN THE EXECUTION OF A MEMORANDUM LEASE FOR THE PURPOSES OF RECORDATION.  SAID MEMORANDUM LEASE SHALL DESCRIBE THE PARTIES, THE DEMISED PREMISES, AND THE TERM OF THE LEASE AND SHALL INCORPORATE THIS LEASE BY REFERENCE, BUT SHALL NOT SET FORTH THE AMOUNT OF THE BASE RENT, ADDITIONAL RENT OR OTHER AMOUNTS DUE HEREUNDER.  THIS ARTICLE 27 SHALL NOT BE CONSTRUED TO LIMIT LANDLORD’S RIGHT TO FILE THIS LEASE UNDER ARTICLE 22 OF THIS LEASE.

 

  

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OVERDUE PAYMENTS

ARTICLE XXVIII.ALL MONIES DUE UNDER THIS LEASE FROM TENANT TO LANDLORD SHALL BE DUE ON DEMAND, UNLESS OTHERWISE SPECIFIED AND IF NOT PAID WHEN DUE, SHALL RESULT IN THE IMPOSITION OF A SERVICE CHARGE FOR SUCH LATE PAYMENT IN THE AMOUNT OF TWO PERCENT (2%) OF THE AMOUNT DUE.

 

SURRENDER

ARTICLE XXIX.ON THE EXPIRATION DATE OR UPON THE TERMINATION HEREOF ON A DAY OTHER THAN THE EXPIRATION DATE, TENANT SHALL PEACEABLY SURRENDER THE DEMISED PREMISES BROOM-CLEAN IN GOOD ORDER, CONDITION AND REPAIR, REASONABLE WEAR AND TEAR AND DAMAGE DUE TO CASUALTY EXCEPTED.  ON OR BEFORE THE EXPIRATION DATE OR UPON

 

termination of this Lease on a day other than the Expiration Date, Tenant shall, at its expense, remove all trade fixtures, personal property, equipment and signs, together with any fixtures, alterations or improvements Tenant desires to remove, from the Demised Premises and any property not removed shall be deemed to have been abandoned.  Any damage caused in the removal of such items shall be repaired by Tenant and at its expense.  All alterations, additions, improvements and fixtures (other than trade fixtures) which shall have been made or installed by Landlord or Tenant upon the Demised Premises and all floor covering so installed, at Tenant’s option, shall remain upon and be surrendered with the Demised Premises as a part thereof, without disturbance, molestation or injury, and without charge, at the expiration of termination of this Lease, except any such items identified under Section 25 hereof.  If the Demised Premises are not surrendered on the Expiration Date or the date of termination, Tenant shall indemnify Landlord against loss or liability arising out of or relating to any claims resulting from such failure, including without limitation, any claims made by any succeeding Tenant founded on such delay.  Tenant shall promptly surrender all keys for the Demised Premises to Landlord at the place then fixed for payment of rent and shall inform Landlord of combinations of any locks and safes on the Demised Premises.

 

HOLDING OVER

ARTICLE XXX.IN THE EVENT OF A HOLDING OVER BY TENANT AFTER EXPIRATION OR TERMINATION OF THIS LEASE WITHOUT THE CONSENT IN WRITING OF LANDLORD, TENANT SHALL BE DEEMED A TENANT AT SUFFERANCE AND SHALL PAY RENT FOR SUCH OCCUPANCY AT THE RATE OF ONE AND ONE-HALF THE LAST-CURRENT AGGREGATE BASE RENT AND ADDITIONAL RENT, PRORATED FOR THE ENTIRE HOLDOVER PERIOD, PLUS ALL ATTORNEY’S FEES AND EXPENSES INCURRED BY LANDLORD IN ENFORCING ITS RIGHTS HEREUNDER, PLUS ANY OTHER DAMAGES OCCASIONED BY SUCH HOLDING OVER.

 

  

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INTENTIONALLY DELETED

ARTICLE XXXI.INTENTIONALLY DELETED.

 

CONSENTS BY LANDLORD

ARTICLE XXXII.WHENEVER PROVISION IS MADE UNDER THIS LEASE FOR TENANT SECURING THE CONSENT OR APPROVAL BY LANDLORD, SUCH CONSENT OR APPROVAL SHALL ONLY BE VALID IF IT IS MADE IN WRITING.

 

NOTICES

ARTICLE XXXIII.ANY NOTICE REQUIRED OR PERMITTED UNDER THIS LEASE SHALL BE DEEMED SUFFICIENTLY GIVEN OR SECURED IF SENT BY REGISTERED OR CERTIFIED RETURN RECEIPT MAIL TO TENANT AT 800 W. 47TH STREET, #421, KANSAS CITY, MO 64112 AND TO LANDLORD AT THE ADDRESS THEN FIXED FOR THE PAYMENT OF RENT AS PROVIDED IN ARTICLE 4 OF THIS LEASE, AND EITHER PARTY MAY BY LIKE WRITTEN NOTICE AT ANY TIME DESIGNATE A DIFFERENT ADDRESS TO WHICH NOTICES SHALL SUBSEQUENTLY BE SENT.

 

RULES AND REGULATIONS

ARTICLE XXXIV.TENANT SHALL OBSERVE AND COMPLY WITH SUCH RULES AND REGULATIONS AS LANDLORD MAY FROM TIME TO TIME PRESCRIBE, ON WRITTEN NOTICE TO TENANT, FOR THE SAFETY, CARE, CLEANLINESS AND OPERATION OF THE BUILDING PROVIDED SUCH RULES AND REGULATIONS ARE UNIFORMLY AND NON-DISCRIMINATORILY APPLIED.

 

INTENT OF PARTIES

 

ARTICLE XXXV.EXCEPT AS OTHERWISE PROVIDED HEREIN, THE TENANT COVENANTS AND AGREES THAT IF IT SHALL AT ANY TIME FAIL TO PAY ANY COST OR EXPENSE REQUIRED TO BE PAID BY TENANT HEREUNDER, OR FAIL TO TAKE OUT, PAY FOR, MAINTAIN OR DELIVER ANY OF THE INSURANCE POLICIES ABOVE REQUIRED, OR FAIL TO MAKE ANY OTHER PAYMENT OR PERFORM ANY OTHER ACT ON ITS PART TO BE MADE OR PERFORMED AS IN THIS LEASE PROVIDED, THEN THE LANDLORD MAY, BUT SHALL NOT BE OBLIGATED SO TO DO, AND WITHOUT NOTICE TO OR DEMAND UPON THE TENANT AND WITHOUT WAIVING OR RELEASING THE TENANT FROM ANY OBLIGATIONS OF THE TENANT IN THIS LEASE CONTAINED, PAY ANY SUCH COST OR EXPENSE, EFFECT ANY SUCH INSURANCE COVERAGE AND PAY PREMIUMS THEREFOR, AND MAY MAKE ANY OTHER PAYMENT OR PERFORM ANY OTHER ACT ON THE PART OF THE TENANT TO BE MADE AND PERFORMED AS IN THIS LEASE PROVIDED, IN SUCH MANNER AND TO SUCH EXTENT AS THE LANDLORD MAY DEEM DESIRABLE, AND IN EXERCISING ANY SUCH RIGHT, TO ALSO PAY ALL NECESSARY AND INCIDENTAL COSTS AND EXPENSES, EMPLOY COUNSEL AND INCUR AND PAY REASONABLE ATTORNEYS’ FEES.  ALL SUMS SO PAID BY LANDLORD AND ALL NECESSARY AND INCIDENTAL COSTS AND EXPENSES IN CONNECTION WITH THE PERFORMANCE OF ANY SUCH ACT BY THE LANDLORD, TOGETHER WITH INTEREST THEREON AT THE RATE OF TEN PERCENT (10%) PER ANNUM FROM THE DATE OF MAKING OF SUCH EXPENDITURE, BY LANDLORD, SHALL BE DEEMED ADDITIONAL RENT HEREUNDER, AND SHALL BE PAYABLE TO LANDLORD ON DEMAND.  TENANT COVENANTS TO PAY ANY SUCH SUM OR SUMS WITH INTEREST AS AFORESAID AND THE LANDLORD SHALL HAVE THE SAME RIGHTS AND REMEDIES IN THE EVENT OF THE NONPAYMENT THEREOF BY TENANT AS IN THE CASE OF DEFAULT BY TENANT IN THE PAYMENT OF THE BASE RENT PAYABLE UNDER THIS LEASE.

 

  

23

  

 

LANDLORD DEFAULT

 

ARTICLE XXX VI.Section 36.1   ANY OF THE FOLLOWING OCCURRENCE, CONDITIONS OR ACTS BY LANDLORD SHALL CONSTITUTE A “LANDLORD DEFAULT”:  (A) LANDLORD’S FAILURE TO MAKE ANY PAYMENTS OF MONEY DUE TENANT HEREUNDER WITHIN TEN (10) DAYS AFTER THE RECEIPT OF WRITTEN NOTICE FROM TENANT THAT SAME IS OVERDUE; OR (B) LANDLORD’S FAILURE TO PERFORM ANY NONMONETARY OBLIGATION OF LANDLORD HEREUNDER WITHIN THIRTY (30) DAYS AFTER RECEIPT OF WRITTEN NOTICE FROM TENANT TO LANDLORD SPECIFYING SUCH DEFAULT AND DEMANDING THAT THE SAME BE CURED; PROVIDED THAT, IF SUCH DEFAULT CANNOT WITH DUE DILIGENCE BE WHOLLY CURED WITHIN SUCH THIRTY (30) DAYS, LANDLORD SHALL HAVE SUCH LONGER PERIOD AS MAY BE REASONABLY NECESSARY TO CURE THE DEFAULT, SO LONG AS LANDLORD PROCEEDS PROMPTLY TO COMMENCE THE CURE OF SAME WITHIN SUCH THIRTY (30) DAY PERIOD AND DILIGENTLY PROSECUTES THE CURE TO COMPLETE.

 

	 	
Section 

	
36.2         Upon the occurrence of a Landlord Default, at Tenant’s option, in addition to any other remedies which it may have, and without its actions being deemed a cure of Landlord’s default, Tenant may (i) pay or perform such obligations and offset Tenant’s reasonable and actual cost of performance, plus interest at the Default Rate, against the Base Rent

 

unless, by written notice to Tenant, Landlord contests whether a Landlord Default has occurred or is continuing, in which case such right of offset shall only be effective if final, non-appealable judgment against Landlord shall have been entered by a court of competent jurisdiction; or (ii) sue for damages.

 

  

24

  

 

GENERAL

 

ARTICLE XXXVII.Section 37.1     THE LEASE DOES NOT CREATE THE RELATIONSHIP OF PRINCIPAL AGENT OR OF PARTNERSHIP OR OF JOINT VENTURE OR OF ANY ASSOCIATION BETWEEN LANDLORD AND TENANT, THE SOLE RELATIONSHIP BETWEEN THE PARTIES HERETO BEING THAT OF LANDLORD AND TENANT.

 

	 	
Section 

	

37.2         No waiver of any default of Tenant hereunder shall be implied from any omission by Landlord to take any action on account of such default if such default persists or is repeated, and no express waiver shall affect any default other than the default specified in the express waiver and that only for the time and to the extent therein stated.  One or more waivers by Landlord shall not then be construed as a waiver of a subsequent breach of the same covenant, term or condition.  The consent to or approval by Landlord of any act by Tenant requiring Landlord’s consent or approval shall not waive or render unnecessary Landlord’s consent to or approval of any subsequent similar act by Tenant shall be construed to be both a covenant and a condition.  No action required or permitted to be taken by or on behalf of Landlord under the terms or provisions of this Lease shall be deemed to constitute an eviction or disturbance of Tenant’s possession of the Demised Premises.  All preliminary negotiations are merged into and incorporated in this Lease.  The laws of the State of Kansas shall govern the validity, performance and enforcement of this Lease.

 

	 	
Section 

	
37.3        This Lease and the exhibits, if any, attached hereto and forming a part hereof, constitute the entire agreement between Landlord and Tenant affecting the Demised Premises and there are no other agreements, subsequent alteration, amendment, change or addition to this Lease shall be binding upon Landlord or Tenant unless reduced to writing and executed in the same form and manner in which this Lease is executed.

 

	 	
Section

	
37.4         If any agreement, covenant or condition of this Lease or the application thereof to any person or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Lease, or the application of such agreement, covenant or condition to persons or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each agreement, covenant or condition of this Lease shall be valid and be enforced to the fullest extent permitted by law..

 

	 	
Section

	
37.5         The submission of this Lease for examination does not constitute a reservation of or option for the Demised Premises and this Agreement of Lease shall become effective as a Lease only upon execution and delivery thereof by Landlord and Tenant.

 

  

25

  

 

HAZARDOUS MATERIAL

 

ARTICLE XXXVIII.Section 38.1    THE DEMISED PREMISES HEREBY LEASED SHALL BE USED BY AND/OR AT THE SUFFERANCE OF TENANT ONLY FOR THE PURPOSE SET FORTH IN ARTICLE 11 ABOVE AND FOR NO OTHER PURPOSES.  TENANT SHALL NOT USE OR PERMIT THE USE OF THE DEMISED PREMISES IN ANY MANNER THAT WILL TEND TO CREATE WASTE OR A NUISANCE, OR WILL TEND TO UNREASONABLY DISTURB OTHER TENANTS IN THE BUILDING OR THE DEMISED PREMISES.  TENANT, ITS EMPLOYEES AND ALL PERSON VISITING OR DOING BUSINESS WITH TENANT IN THE DEMISED PREMISES SHALL BE BOUND BY AND SHALL OBSERVE THE REASONABLE RULES AND REGULATIONS MADE BY LANDLORD RELATING TO THE DEMISED PREMISES, THE BUILDING OR THE DEMISED PREMISES OF WHICH NOTICE IN WRITING SHALL BE GIVEN TO THE TENANT, AND ALL SUCH RULES AND REGULATIONS SHALL BE DEEMED TO BE INCORPORATED INTO AND FORM A PART OF THIS LEASE.

 

	 	
Section 

	
38.2        Tenant covenants through the Lease Term, at Tenants sole cost and expense, promptly to comply with all laws and ordinances and the orders, rules and regulations and requirements of all federal, state and municipal governments and appropriate departments, commission, boards, and officers thereof, and the orders, rules and regulations of the Board of Fire Underwriters where the Demised Premises are situated, or any other body now or hereafter as well as extraordinary, and whether or not the same require structural repairs or alterations, which may be applicable to the Demised Premises, or the use or manner of use of the Demised Premises.  Tenant will likewise observe and comply with the requirements of all policies of public liability, fire and all other policies of insurance at any time in force with respect to the building and improvements on the Demised Premises and the equipment thereof provided the Demised Premises are delivered to Tenant in compliance with Environmental Laws.

 

	 	
Section

	
38.3        In the event any Hazardous Material (hereinafter defined) is brought or caused to be brought into or onto the Demised Premises, the Building, or the Demised Premises by Tenant, its agents, employees, contractors, or invitees, Tenant shall handle any such material in compliance with all applicable federal, state and/or local regulations.  For purposes of this Article, “Hazardous Material” means and includes any hazardous, toxic or dangerous waste, substance or material defined as such in (or for purposes of) the Comprehensive Environmental Response, Compensation, and Liability Act, any so-called “Superfund” or “Superlien” law, or any federal, state or local statute, law, ordinance, code, rule, regulation, order decree regulating, relating to, or imposing liability or standards of conduct concerning, any hazardous, toxic or dangerous waste, substance or materials, as now or at any time hereafter in effect (collectively, “Environmental Laws”).  Tenant shall submit to Landlord on an annual basis copies of its approved hazardous materials communication plan, OSHA monitoring plan, and permits required by the Resource, Recovery and Conservation Act of 1976, if Tenant is required to prepare, file or obtain any such plans or permits.  Tenant will indemnify and hold harmless Landlord from any losses, liabilities, damages, costs or expenses (including reasonable attorney’s fees) which Landlord may suffer or incur as a result of Tenant’s breach of this Section 37 or its introduction into or onto the Demised Premises, Building or Demised Premises of any Hazardous Material.  This Article shall survive the expiration or sooner termination of this Lease.

 

  

26

  

 

	 	
Section 

	
38.4        Landlord represents and warrants to Tenant that, except as otherwise disclosed in any environmental assessment or report delivered by Landlord to Tenant, there are no Hazardous Materials located within the Demised Premises or otherwise on or about the Property which require removal or remediation under applicable Environmental Laws.  Landlord agrees to indemnify and hold Tenant harmless from and against any and all claims or damages resulting from any violation or falsity of the representation set forth above or as a result of any leak, spill, discharge, emission or other release of Hazardous Materials on or about the Property caused by Landlord, its agents or employees from and after the date hereof.

 

FORCE MAJEURE

 

ARTICLEXXXIX.EITHER PARTY’S FAILURE TO PERFORM THE TERMS AND CONDITIONS OF THIS LEASE, IN WHOLE OR IN PART, OTHER THAN ANY TERM REQUIRING THE PAYMENT OF MONEY, SHALL NOT BE DEEMED A BREACH OR A DEFAULT HEREUNDER OR GIVE RISE TO ANY LIABILITY OF SUCH PARTY TO THE OTHER IF SUCH FAILURE IS ATTRIBUTABLE TO ANY UNFORESEEABLE EVENT BEYOND SUCH PARTY’S REASONABLE CONTROL AND NOT CAUSED BY THE NEGLIGENT ACTS OR OMISSIONS OR THE WILLFUL MISCONDUCT OF SUCH PARTY, INCLUDING, WITHOUT LIMITATION, FLOOD, DROUGHT, EARTHQUAKE, STORM, PESTILENCE, LIGHTNING, AND OTHER NATURAL CATASTROPHES AND ACTS OF GOD; EPIDEMIC, WAR, RIOT, CIVIC DISTURBANCE OR DISOBEDIENCE, AND ACT OF THE PUBLIC ENEMY; FIRE, ACCIDENT, WRECK, WASHOUT, AND EXPLOSION; STRIKE, LOCKOUT, LABOR DISPUTE, AND FAILURE, THREAT OF FAILURE, OR SABOTAGE OF SUCH PARTY’S FACILITIES; DELAY IN TRANSPORTATION OR CAR SHORTAGES, OR INABILITY TO OBTAIN NECESSARY LABOR, MATERIALS, COMPONENTS, EQUIPMENT, SERVICES, ENERGY, OR UTILITIES THROUGH SUCH PARTY’S USUAL AND REGULAR SOURCES AT USUAL AND REGULAR PRICES; AND ANY LAW, REGULATION, ORDER OR INJUNCTION OF A COURT OR GOVERNMENTAL AUTHORITY, WHETHER VALID OR INVALID AND INCLUDING, WITHOUT LIMITATION, EMBARGOES, PRIORITIES, REQUISITIONS, AND ALLOCATIONS OR RESTRICTIONS OF FACILITIES, EQUIPMENT OR OPERATIONS.  IN THE EVENT OF THE OCCURRENCE OF SUCH A FORCE MAJEURE EVENT, THE PARTY UNABLE TO PERFORM PROMPTLY SHALL NOTIFY THE OTHER PARTY

 

TENANT IMPROVEMENTS

 

ARTICLE XL.ALL IMPROVEMENTS TO THE DEMISED PREMISES PROPOSED TO BE CONSTRUCTED BY EITHER LANDLORD OR TENANT PRIOR TO THE COMMENCEMENT DATE SHALL BE CONSTRUCTED IN ACCORDANCE WITH THE TERMS AND PROVISIONS SET FORTH ON THE PLANS AND SPECIFICATIONS ATTACHED HERETO AND INCORPORATED HEREIN AS EXHIBIT C.  IT IS THE INTENT OF THE PARTIES THAT LANDLORD SHALL DELIVER THE DEMISED PREMISES TO TENANT IN A TURN-KEY CONDITION PURSUANT TO THE PLANS AND SPECIFICATIONS.  LANDLORD ACKNOWLEDGES THAT THE BUILD OUT OF THE TENANT IMPROVEMENTS ACCORDING TO THE PLANS AND SPECIFICATIONS IS NOT EXPECTED TO EXCEED $500,000.00.  IF THE BUILD OUT OF THE TENANT IMPROVEMENTS ACCORDING TO THE PLANS AND SPECIFICATIONS EXCEEDS $500,000.00, THEN LANDLORD SHALL BEAR THE COST INCREASE ABOVE $500,000.00.  IF TENANT REQUESTS A CHANGE TO THE PLANS AND SPECIFICATIONS THAT INCREASES THE COST OF THE TENANT IMPROVEMENTS AND IS APPROVED BY LANDLORD (SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD), THEN TENANT SHALL BEAR THE COST OF THE INCREASE TO THE EXTENT THE COST OF THE TENANT IMPROVEMENTS EXCEEDS $500,000.00.  ANY ADDITIONAL AMOUNTS TO BE PAID BY TENANT SHALL BE PAID BY TENANT ON THE COMMENCEMENT DATE.

 

  

27

  

 

CAPTIONS

ARTICLE XLI.THE CAPTIONS ARE INSERTED ONLY AS A MATTER OF CONVENIENCE AND FOR REFERENCE, AND IN NO WAY DEFINE, LIMIT OR DESCRIBE THE SCOPE OF THIS LEASE NOR THE INTENT OR ANY PROVISION THEREOF.

 

ATTACHMENTS

 

ARTICLE XLII.SEE EXHIBITS A THROUGH E, INCLUSIVE, WHICH EXHIBITS ARE ATTACHED HERETO AND MADE A PART HEREOF.

 

	 	
EXHIBIT

	
DESCRIPTION

	 	
Exhibit A

	
Legal Description

	 	
Exhibit B

	
Demised Premises

	 	
Exhibit C

	
Improvements

	 	
Exhibit D

	
Building Rules and Regulations

	 	
Exhibit E

	
Sign Criteria

SUBMISSION

ARTICLE XLIII.SUBMISSION OF THIS INSTRUMENT TO TENANT OR PROPOSED TENANT OR ITS AGENTS OR ATTORNEYS FOR EXAMINATION, REVIEW, CONSIDERATION OR SIGNATURE DOES NOT CONSTITUTE OR IMPLY AN OFFER TO LEASE, RESERVATION OF SPACE, OR OPTION TO LEASE, AND THIS INSTRUMENT SHALL HAVE NO BINDING LEGAL EFFECT UNTIL EXECUTION HEREOF BY BOTH LANDLORD/OWNER AND TENANT OR ITS AGENTS.

 

COMMISSIONS

 

ARTICLE XLIV.IT IS AGREED AND UNDERSTOOD THAT GRUBB & ELLIS / THE WINBURY GROUP, AGENT OR BROKER WITH WELSH LENEXA II, LLC IS REPRESENTING WELSH LENEXA LLC, LANDLORD, AND PAT MCGANNON WITH J.P. FOGEL, IS REPRESENTING CABLE-TECH INDUSTRIES, L.L.C., TENANT.  TENANT INDEMNIFIES LANDLORD FOR ANY CLAIM MADE BY OR COMMISSION PAYABLE TO ANY OTHER BROKER OR AGENT IN CONNECTION WITH TENANT’S LEASING THE DEMISED PREMISES.

 

RIGHT OF FIRST REFUSAL

ARTICLE XLV.LANDLORD GRANTS TO TENANT A RIGHT OF FIRST REFUSAL TO LEASE ALL OR A PART OF THE AVAILABLE SPACE IN THE BUILDING.  THROUGHOUT THE TERM OF THIS LEASE, UPON RECEIPT OF A WRITTEN LETTER OF INTENT REFLECTING A BONA-FIDE OFFER TO LEASE SPACE IN THE BUILDING WITH INFORMATION IDENTIFYING THE PROPOSED TENANT (“OFFER”), LANDLORD SHALL OFFER THE SPACE SUBJECT TO THE OFFER TO TENANT UPON THE SAME TERMS AND CONDITIONS CONTAINED IN THE OFFER.  TENANT SHALL HAVE FIVE (5) BUSINESS DAYS WITHIN WHICH TO ACCEPT OR REJECT THE OFFER.  THIS RIGHT OF FIRST REFUSAL SHALL BE ONGOING WHEREBY A FAILURE TO EXERCISE THE RIGHT TO ACCEPT AN OFFER AT ONE OPPORTUNITY DOES NOT TERMINATE THIS RIGHT OF FIRST REFUSAL FOR ANY OTHER OFFER.

 

  

28

  

 

LEASE TERMINATION

ARTICLE XLVI.PROVIDED TENANT IS IN COMPLETE POSSESSION OF DEMISED PREMISES AND NOT IN DEFAULT, TENANT SHALL HAVE THE RIGHT TO CANCEL THIS LEASE EFFECTIVE ON THE SIXTY - SIX MONTH ANNIVERSARY OF THE COMMENCEMENT DATE.  IN ORDER TO TERMINATE THE LEASE, TENANT WILL PROVIDE SIX (6) MONTH ADVANCE WRITTEN NOTICE BY CERTIFIED MAIL TO LANDLORD AND MAKE A CASH PAYMENT IN THE AMOUNT OF TWO HUNDRED TWENTY- FIVE THOUSAND AND NO/100 DOLLARS ($225,000.00) ON THE EFFECTIVE DATE OF THE TERMINATION.

 

OPTION TO RENEW

ARTICLE XLVII.LANDLORD GRANTS TO TENANT THE RIGHT TO EXTEND THE TERM OF THIS LEASE AN ADDITIONAL TERM OF FIVE (5) YEARS ON THE SAME TERMS AND CONDITIONS CONTAINED IN THIS LEASE, EXCEPT THAT RENT SHALL BE AT THEN EXISTING MARKET RATES OF COMPARABLE BUILDINGS IN THE AREA (“OPTION”).  TENANT MUST EXERCISE THE OPTION BY PROVIDING WRITTEN NOTICE TO LANDLORD AT LEAST SIX (6) MONTHS PRIOR TO THE EXPIRATION DATE.

 

IN WITNESS WHEREOF, the Landlord and the Tenant have caused these presents to be executed in form and manner sufficient to bind them at law, as of the day and year first above written.

 

	TENANT:	 	LANDLORD:
	 	  	 	 	  
	Cable-Tech Industries, L L.C.	 	Welsh Lenexa II, LLC
	 	  	 	 	  
	
By: 

	/s/ Henry H. Newell	 	
By:

	/s/ Vice President
	 	  	 	 	  
	
Its: 

	Member	 	
Its:

	Vice President

 

  

29

  

 

Exhibit A

LEGAL DESCRIPTION

Lot 4, College Crossover West — Second Plat, a subdivision in the City of Lenexa, Johnson County, Kansas according to the recorded plat thereof.  Together with a non-exclusive common driveway as established by the Agreement recorded under File No. 1974637 in Volume 3238, Page 712, re-recorded under File No. 1986960 in Volume 3267, Page 82.

 

  

1

  

 

	
Exhibit B

DEMISED PREMISES

	 

 

 

  

1

  

 

	
Exhibit B

DEMISED PREMISES

	 

 

 

 

2

 

 

	
Exhibit B

DEMISED PREMISES

	 

 

 

  

3

  

 

Exhibit C

IMPROVEMENTS

 

  

4

  

 

Exhibit C

Cabletech

October 9, 2001

COST BREAKDOWN & SCOPE OF WORK

 

	
PERMITS

	 	 	4,612.00	 
	
ARCHITECTURAL FEES

	 	 	5,850.00	 
	
MASONRY

	 	 	6,240.00	 
	
CHAIN LINK FENCE & GATES

	 	 	3,075.00	 
	
CONCRETE FLATWORK

	 	 	625.00	 
	
CONCRETE WALL SAWING

	 	 	1,275.00	 
	
CLEAN UP

	 	 	5,832.00	 
	
PARTITIONS

	 	 	97,210.00	 
	
DOORS, FRAMES & HARDWARE

	 	 	10,216.00	 
	
TOILET PARTITIONS & ACCESSORIES

	 	 	4,165.00	 
	
GLASS & GLAZING

	 	 	885.00	 
	
CASEWORK

	 	 	17,245.00	 
	
:ACOUSTICAL CEILING W/R-11

	 	 	11,227.00	 
	
FLOORING & BASE

	 	 	15,898.00	 
	
PAINTING & VWC

	 	 	13,650.00	 
	
FIRE SPRINKLER

	 	 	7,323.00	 
	
PLUMBING

	 	 	38,065.00	 
	
H.V.A.C.  — 62 TONS

	 	 	144,540.00	 
	
ROOF PATCH

	 	 	8,200.00	 
	
ELECTRICAL — 400 amp

	 	 	74,844,00	 
	
OVERHEAD & PROFIT

	 	 	28,259.00	 
	
TOTAL

	 	$	499,236.00	 
	
ALTERNATES:

	 	 	 	 

 

	
1.   Construct one trash enclosure

	
ADD

	 	$	5,970.00	 
	
2.   Furnish & install one edge of dock level

	
ADD

	 	$	1,160.00	 
	
3.   Furnish & install one 5,000 lb. scissor life

	
ADD

	 	$	9,250.00	 
	
4.   Delete 2 vanities/add one 1⁄2 Bradley

	
ADD

	 	$	1,325.00	 

NOTE:  HVAC includes integral screens.

EXCLUSIONS:

Fire Extinguishers, Window Treatments, TIP fees,

Telephone and related voice/data work, Signage,

Any additional work or fees required by any governing body having jurisdiction over this project.

 

  

1

  

 

Exhibit 10.39

 

 

  

2

  

 

Exhibit 10.39

 

Exhibit D

RULES AND REGULATIONS

 

	
1.

	
No Lessee shall do or permit anything to be done in said premises or bring or keep anything therein which will in any way increase the rate of fire insurance on said Building, or on property kept therein, or obstruct or interfere with the rights of other Lessees, or in any way injure or annoy them, or conflict with the laws relating to fire, or with any regulations of the fire department, or with any insurance policy upon said buildings or any part thereof, or conflict with any rules or ordinances of the local Board of Health or any governing bodies.

 

	
2.

	
No awning or other projection shall be attached to the outside walls of the Building.  No curtains, blinds, shades, or screens visible from the exterior of the Premises shall be attached to or hung in, or used in connection with any window or door of the Premises without the prior written consent of Lessor.  Such curtains, blinds, shades, screens or other fixtures must be of quality, type, design, and color attached in the manner approved in advance by Lessor.

 

	
3.

	
Lessee, its servants, employees, customers, invitees and guests shall not obstruct sidewalks, entrances, passages, corridors, vestibules, or halls, in and about the Building which are used in common with other tenants and their servants, employees, customers, guests and invitees, and which are not a part of the Demised Premises of Lessee.

 

	
4.

	
Lessee assumes full responsibility for protecting its space from theft, robbery, and pilferage; which includes keeping doors locked and other means of entry to the Demised Premises closed and secured after normal business hours.

 

	
5.

	
The water and wash closets, drinking fountains and other plumbing fixtures shall not be used for any purpose other than those for which they were constructed, and no sweepings, rubbish, rags, coffee grounds, or other substances shall be thrown therein.  All damages resulting from any misuse of the fixtures shall be borne by the Lessee who; or who servants, employees, agents, visitors, or licensees; shall have caused the same.  No person shall waste water by interfering or tampering with the faucets or otherwise.

 

	
6.

	
Lessee shall keep Premises at a temperature sufficiently high to prevent freezing of water pipes and fixtures.

 

	
7.

	
The outside areas immediately adjoining the Demised Premises, including sidewalks, docks, dock, and loading and delivery areas, shall be kept clean by Lessee and Lessee shall not place or permit any obstructions, trash, or merchandise in such areas.

 

	
8.

	
The use of parking shall be subject to reasonable regulations as Lessor may promulgate from time to time uniformly to all Tenants.  Lessee agrees that it will not use more than its prescribed number of stalls or dock or loading or delivery areas at any one time, and will not use or permit the use by its employees of the parking area for the overnight storage of automobiles, or other vehicles or equipment except as provided in the Lease.  However, one truck or fully connected truck with trailer may be parked overnight at each dock.  There will not be any assigned exclusive parking spaces available to any Lessee of the building except with prior, written consent of the Lessor.  Lessee agrees that upon written notice from the Lessor, it will furnish to Lessor, within five (5) days from receipt of such notice, the state automobiles license numbers assigned to the automobiles of the Lessee and its employees.  Owners and Lessor shall not be liable for any vehicle of the Lessee or its employees that the Lessor shall have towed from the premises when illegally parked.  Owner and Lessor will not be liable for damage to vehicles in the parking areas or for theft of vehicles, personal property from vehicles or equipment from vehicles.

 

  

3

  

 

Exhibit 10.39

 

	
9.

	
Lessee will refer all contractors, contractors’ representatives, and installation technicians rendering any service on or to the Premises for Lessee to Lessor for Lessor’s approval and supervision before performance of any contractual service.  This provision shall apply to all work performed in the Building, including but not limited to the installation of telephone and telegraph equipment, electrical devices and attachments and installations of any nature affecting floors, walls, woodwork, trim, windows, ceilings, equipment or any other physical portion of the Building.  Such approval, if given, shall in no way make Lessor or Owner a party to any contract between Lessee and any such contractor, and Lessor and Owner shall have no liability therefore.

 

	
10.

	
Employees of the Building will at all times keep a pass key, and agents of the Lessor shall at all times be allowed reasonable admittance to said Lessee Demised Premises.

 

	
11.

	
No additional external locks shall be placed upon any doors without written consent of the Lessor.  All keys to the Demised Premises shall be furnished by the Lessor in a reasonable number commensurate with the square footage leased.  Additional keys shall be furnished at Lessee’s cost.  Upon termination of this Lease, all keys shall be surrendered, and the Lessee shall then give the Lessor or his agents explanation of the combination of all locks upon any doors or vaults.

 

	
12.

	
Ninety (90) days prior to the expiration of the Lease, Lessor or its agents may show the Demised Premises and may place on the windows or doors thereof, or upon a bulletin board, a notice “For Rent.”

 

	
13.

	
No electric heaters are allowed on the Demised Premises without the prior written consent of Lessor.

 

	
14.

	
No sign, advertisement, or notice shall be inscribed, painted, or affixed on any part of the inside or outside of said Building.  Landlord will supply building standard signage for Tenant’s suite entrance, at Tenant’s cost.  Any additions, deletions, or changes to the door signage after the original signage is installed shall also be at Tenant’s cost.

 

	
15.

	
No person shall disturb the occupants of the Building by the use of any musical instruments, the making of unseemly noises, or any unreasonable noise.  No animals or pets of any kind will be allowed in the building.

 

	
16.

	
No portion of the Building shall be used for the purpose of lodging rooms for any immoral or unlawful purposes.

 

	
17.

	
All glass, locks and trimmings in or about the doors and windows and all electrical fixtures belonging to the Building shall be kept whole, and whenever broken by anyone shall be immediately replaced or repaired and put in order at Tenant’s cost under the direction and to the satisfaction of Landlord, and on removal shall be left whole and in good repair.

 

	
18.

	
Lessee and its servants, employees, agents and visitors and licensees shall observe faithfully and comply strictly with the foregoing rules and regulations and such other and further appropriate rules and regulations as Lessor or its agent may from time to time adopt Lessor shall give written notice of any additional rules and regulations.

 

	
19.

	
Lessor reserves the right at any time and from time to time as reasonably necessary to rescind, alter, or waive, in whole or in part, any of these Rules and Regulations when it is deemed necessary, desirable, or proper, in Lessor’s judgment, for its best interest or for the best interest of the Lessees of the Building.

 

  

4

  

 

Exhibit 10.39

 

 

  

5

  

 

Exhibit 10.39

 

FIRST AMENDMENT TO LEASE

 

THIS Lease Amendment made and entered into the _____ day of June 2003, amends that certain Lease dated the 11th of October, 2001, by and between Welsh Lenexa II, LLC (“Landlord”) and Cable-Tech Industries, L.  L C., a Kansas limited liability (“Tenant”), for the property located at 11000-11068 Strang Line Road, Lenexa, Kansas 66219.

 

The Lease Agreement shall be modified as follows:

 

	
  

	
1.

	
Page 1, The second paragraph under DEFINITIONS shall be amended to read as follows:

 

“Buildings” — Those certain office/warehouse buildings containing approximately 154,070 square feet located upon the Property and commonly described as 11000 - 11068 Strang Line Road, Lenexa, Kansas 66215-2113 “

 

	
  

	
2.

	
Page 1, The third paragraph under DEFINITIONS shall be amended to read as follows:

 

“Demised Premises” - That certain portion of the Building located at 11064 Strang Line Road and designated as Bays 9 through 12, consisting of approximately 25,862 square feet (4,563 square feet of office and 21, 299 square feet of warehouse space) as measured from the outside walls of the Demised Premises to the center of the demising wall, as shown on the floor plan attached hereto as Exhibit B and made a part hereof.  The Demised Premises include the non-exclusive right of access to common areas, as hereinafter defined, and all licenses and easements appurtenant to the Demised Premises.”

 

	
  

	
3

	
Page 20, Paragraph 33 under NOTICES shall be amended to read as follows:

 

“Any notice required or permitted under this Lease shall be deemed sufficiently given or secured if sent by registered or certified return receipt mail to Tenant at 11064 Strang Line Road, Lenexa, Kansas 66215-2113 and to Landlord at the address then.  fixed for the payment of rent as provided in Article 4 of this Lease, and either party may by like written notice at any time designate a different address to which notices shall subsequently be sent “

 

	
  

	
3

	
Page 2, The first line in section 3 (a) shall be amended to read as follows:

 

“A sum equal to sixteen point seventy-nine percent (16.79%) (which represents the ratio of the Demised Premises to the area of the Building) of the Real Estate Taxes payable during the term of this Lease”

 

  

1

  

 

Exhibit 10.39

 

	
  

	
4.

	
Page 3, The first line in section 3 (b) shall be amended to read as follows:

 

“Except as set forth below, a sum equal to sixteen point seventy-nine percent (16,79%) (which represents the ratio of the Demised Premises to the area of the building) of the annual aggregate Operating expenses incurred by Landlord in the operation, maintenance and repair of the Property.”

 

All of the terms and conditions of the original Lease Agreement shall remain in full force and effect, with the exception of the items noted herein

 

Both parties have executed this document in triplicate as noted below

 

Sincerely,

	WELSH LENEXA II, LLC	  	CABLE-TECH INDUSTRIES,
	 	  	L.L.C., a Kansas limited liability
	 	  	  	 	  
	
By:

	/s/ Vice President	  	
By:

	/s/ Henry H. Newell
	 	  	  	 	  
	
Date:

	July 17, 2003	  	
Date:

	July 16, 2003

 

  

2

  

 

SECOND AMENDMENT TO LEASE

 

THIS Lease Amendment made and entered into the 15 of November, 2003, amends that certain Lease dated the 11th of Célèbre, 2001, and the First Amendment To Lease, dated July 17th, 2003, by and between Welsh Lenexa TI, LLC (“Landlord”) and Cable-Tech Industries, L.L.C., a Kansas limited liability (“Tenant”), for the property located at 11000-11068 Strang Line Road, Lenexa, Kansas 66210,

 

The Lease Agreement and the First Amendment To Lease shall be modified as follows:

 

	
  

	
1.

	
In addition to the “Demised Premises” as defined in the Lease, Landlord agrees to lease the adjacent two (2) Bays 7 & 8), containing 12,884 square feet on a temporary month to month basis beginning December 1, 2003.  Tenant shall pay to Landlord $4.00 per square foot, or 54,294.67 per month, as base rent to lease this space.  Tenant shall not be obligated to pay “Additional Rent” (Taxes, Insurance, and Common Area Maintenance charges) on this temporary space.

 

	
  

	
2.

	
This Second Amendment To Lease may be terminated at any time by either party providing 14 days advance written notice.

 

	
  

	
3.

	
Upon Landlord request, Tenant, at Tenant’s sole cost, shall close the ‘opening and repair all damage (to Landlord’s satisfaction) to the demising waft that separates the original “Demised Premises” and this temporary adjacent space.

 

All of the terms and conditions of the original Lease Agreement and the First Amendment To Lease shall remain in full force and effect, with the exception of the Items noted herein.

 

Both parties have executed this document in triplicate as noted below.

 

Sincerely,

 

	WELSH LENEXA II, LLC	  	CABLE-TECH INDUSTRIES,
	 	  	
L.L.C., a Kansas limited liability

	 	  	  	 	  
	
By:

	/s/ Vice President	  	
By:

	/s/ Henry H. Newell
	 	  	  	 	  
	
Date:

	January 8, 2004	  	
Date:

	December 15, 2003

 

  

  

  

 

THIRD AMENDMENT TO LEASE

 

	
THE STATE OF KANSAS

	
)

	  
	  	
)

	
KNOW ALL PERSONS BY THESE PRESENTS:

	
COUNTY OF JOHNSON

	
)

	  

THIS is the THIRD AMENDMENT TO LEASE (this “Third Amendment to Lease”) by COLLEGE CROSSING ASSOCIATES, LLC, Successor to Welsh Lenexa Ii, LLC (“Lessor”) and CT Systems, LLC , a Kansas Limited Liability Company (“Lessee’) for the property located at 11064 Strang Line Road, Lenexa, Kansas.

 

RECITALS:

 

CT Systems, L.L C , successor in interest to Cable Tech, entered into that certain Lease dated October 11, 2001, and amended by the First Amendment to Lease dated July 17, 2003, and amended by the Second Amendment to Lease dated November 16, 2003, pursuant to which Lessee leased from Lessor approximately 25,862 rentable square feet of floor area (the “Premises”) in those certain improvements located at 11064 Strang Line Road, Lenexa, Kansas and more particularly described in the Lease (the “Premises”)

 

Lessor and Lessee desire to execute this Third Amendment to Lease in order to (I) provide an extension of the lease term and (ii) to evidence their agreement to amend the Lease, all as more particularly set forth in this Third Amendment to Lease

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which Is hereby acknowledged, Lessor and Lessee agree as follows:

 

Article I

 

CERTAIN AMENDMENTS

 

Section 1 entitled “TERM”: The Term of this Lease is extended from July 1, 2009 thru June 30, 2010

 

Section 47, entitled “OPTION TO RENEW In the event that this Lease shall be in full force and effect and Lessee shall be in full and complete possession of the Premises, and shall not be in default, then in this event only, Lessee is hereby granted the sole and exclusive right to extend this Lease for one (1) additional term of five (5) years commencing on July 1, 2010 and ending on June 30, 2015, at the annual rental calculated at fair market value which is defined as the market rent for like-kind space in Johnson County, Kansas.  Notice of Lessee’s intent to so renew this Lease as is provided herein shall be furnished to Lessor in writing on or before December 31, 2009

 

Except as expressly provided herein, the Lease is unamended, except for this Third Amendment to Lease, as noted in the Recitals, the parties hereby ratify the Lease, First Amendment to Lease, Second Amendment to Lease and this Third Amendment to Lease as herein modified In the event of conflict or ambiguity of the terms of the lease and the provisions of this Third Amendment, the provisions of this Third Amendment shall govern and control

 

This Agreement:

 

Constitutes the entire agreement among the parties hereto with respect to the subject matter hereof;

 

shall be construed and governed by the laws of the State of Kansas;

 

shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns

 

  

1

  

 

Exhibit 10.39

 

may not be amended, except by written agreement of the parties hereto; and,

 

may be executed in multiple counter-parts whether of the entire Agreement or of the signature page or both, all of which counter-parts taken together shall constitute the complete Agreement

 

IN WITNESS WHEREOF, this Third Amendment to Lease is executed as of the date(s) below

 

	
LESSOR

	 	LESSEE
	  	  	 	 	  
	
COLLEGE CROSSING ASSOCIATES, LLC

	 	CT Systems, L.L.C.
	
A Missouri Limited Liability Company

	 	a Kansas Limited Liability Company
	  	  	 	 	  
	
BY:

	
BK PROPERTIES, LLC, Managing Member

	 	
BY:

	/s/ Bruce R. Breckenridge
	 	  	 	 	
Bruce R. Breckenridge, Member

	
BY:

	/s/ Kenneth G. Block	 	 	  
	 	
Kenneth G. Block, Trustee

	 	 	  
	 	
Of the Kenneth G. Block Trust

	 	 	  
	 	
Dated January 11, 1991, as

	 	 	  
	 	
Amended,

	 	 	  
	 	
Managing Member

	 	 	  

 

	
DATE:

	December 31, 2008	 	
DATE:

	December 31, 2008	 

 

SIGNATURE PAGE FOR THAT CERTAIN

THIRD AMENDMENT TO LEASE

BY AND BETWEEN

COLLEGE CROSSING ASSOCIATES, LLC, LESSOR

AND

CT Systems, LLC, A Kansas Limited Liability Company, LESSEE

FOR THE PROPERTY LOCATED AT

11064 STRANG LINE ROAD

LENEXA, KANSAS

 

  

2

  

 

FOURTH AMENDMENT TO LEASE

 

	
THE STATE OF KANSAS

	
)

	  
	  	
)

	
KNOW ALL PERSONS BY THESE PRESENTS:

	
COUNTY OF JOHNSON

	
)

	  

THIS Is the FOURTH AMENDMENT TO LEASE (this “Fourth Amendment to Lease”) by COLLEGE CROSSING ASSOCIATES, LLC, Successor to Welsh Lenexa 11, LLC (“Lessor”) and CT Systems, L L.C., a Kansas Limited Liability Company (lessee”) for the property located at 11064 Strang Line Road, Lenexa, Kansas.

 

RECITALS:

 

CT Systems, L.L.C., successor in Interest to Cable Tech, entered into that certain Lease dated October 11, 2001, and amended by the First Amendment to Lease dated July 17, 2003, and amended by the Second Amendment to Lease dated November 15, 2003 and amended by the Third Amendment to Lease dated December 31, 2008, pursuant to which Lessee leased from Lessor approximately 25,862 rentable square feet of floor area (the “Premises”) in those certain improvements located at 11064 Strang Line Road, Lenexa, Kansas and more particularly described In the Lease (the “Premises”).

 

Lessor and Lessee desire to execute this Fourth Amendment to Lease in order to (i) provide an extension of the lease term and (ii) to evidence their agreement to amend the Lease, all as more particularly set forth in this Fourth Amendment to Lease.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which Is hereby acknowledged, Lessor and Lessee agree as follows:

 

Article I

CERTAIN AMENDMENTS

 

Section 1 entitled “TERM”: The Term of this Lease is extended from July 1, 2010 thru June 30, 2011.

 

Section 45 entitled “RIGHT OF FIRST REFUSAL”: The phrase reading “Landlord shall offer the space subject to the Offer to Tenant upon the same terms and conditions contained in the Offer” shall be deleted in its entirety and replaced with the following:

 

“Landlord shall offer the space subject to the Offer to Tenant in writing upon the same terms and conditions contained in the Offer”

 

Except as expressly provided herein, the Lease is unamended, except for this Fourth Amendment to Lease, and as noted in the Recitals and the parties hereby ratify the Lease, First Amendment to Lease, Second Amendment to Lease, Third Amendment to Lease, and this Fourth Amendment to Lease as herein modified.  in the event of conflict or ambiguity of the terms of the Lease or any of the Amendments thereto, as noted herein, and the provisions of this Fourth Amendment to Lease, the provisions of this Fourth Amendment to Lease, shall govern and control.

 

This Agreement:

 

Constitutes the entire agreement among the parties hereto with respect to the subject matter hereof;

 

shall be construed and governed by the laws of the State of Kansas;

 

shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

 

  

  

  

 

Exhibit 10.39

 

may not be amended, except by written agreement of the parties hereto; and,

 

may be executed in multiple counter-parts whether of the entire Agreement or of the signature page or both, all of which counter-parts taken together shall constitute the complete Agreement.

 

Page 1 of 2

 

IN WITNESS WHEREOF, this Fourth Amendment to Lease is executed as of the date(s) below.

 

	
LESSOR

	 	LESSEE
	  	  	 	 	  
	

COLLEGE CROSSING ASSOCIATES, LLC

	 	CT Systems, L.L.C.
	

A Missouri Limited Liability Company

	 	
a Kansas Limited Liability Company

	  	  	 	 	  
	
BY:

	

BK PROPERTIES, LLC, Managing Member

	 	
BY:

	/s/ Bruce R. Breckenridge
	 	  	 	 	

Bruce R. Breckenridge, Member

	
BY:

	/s/ Kenneth G. Block	 	 	  
	 	

Kenneth G. Block, Trustee

	 	 	  
	 	

Of the Kenneth G. Block Trust

	 	 	  
	 	

Dated January 11, 1991, as

	 	 	  
	 	

Amended,

	 	 	  
	 	

Managing Member

	 	 	  

 

	
DATE:

	March 1, 2010	 	
DATE:

	March 1, 2010	 

 

SIGNATURE PAGE FOR THAT CERTAIN

FOURTH AMENDMENT TO LEASE

BY AND BETWEEN

COLLEGE CROSSING ASSOCIATES, LLC, LESSOR

AND

CT SYSTEMS, LLC, LESSEE

FOR THE PROPERTY LOCATED AT

11064 STRANG LINE ROAD

LENEXA, KANSAS

 

  

  

  

 

FIFTH AMENDMENT TO LEASE

 

	
THE STATE OF KANSAS

	
)

	  
	  	
)

	
KNOW ALL PERSONS BY THESE PRESENTS:

	
COUNTY OF JOHNSON

	
)

	  

THIS is the FIFTH AMENDMENT TO LEASE (this “Fifth Amendment to Lease”) by COLLEGE CROSSING ASSOCIATES, LLC, and Successor to Welsh Lenexa II, LLC (“Lessor”) and VALENT AEROSTRUCTURES - LENEXA, LLC, a Kansas Limited Liability Company and Successor to CT Systems, LLC (lessee”) for the property located at 11064 Strang Line Road, Lenexa, Kansas

 

RECITALS:

 

VALENT AEROSTRUCTURES - LENEXA, LLC, successor in interest to CT Systems, L.L.C., successor in interest to CABLE-TECH INDUSTRIES, L L.C., entered into that certain Lease dated October 11, 2001, and amended by the First Amendment to Lease dated July 17, 2003, and amended by the Second Amendment to Lease dated November 15, 2003 and amended by the Third Amendment to Lease dated December 31, 2008, and amended by the Fourth Amendment to Lease dated March 1, 2010, pursuant to which Lessee leased from Lessor approximately 25,862 rentable square feet of floor area (the “Premises”) in those certain improvements located at 11064 Strang Line Road, Lenexa, Kansas and more particularly described in the Lease (the “Premises”).

 

Lessor and Lessee desire to execute this Fifth Amendment to Lease in order to (i) provide an extension of the lease term and (ii) to evidence their agreement to amend the Lease, all as more particularly set forth in this Fifth Amendment to Lease.

 

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Lessor and Lessee agree as follows:

 

Article I

CERTAIN AMENDMENTS

 

Section 1 entitled “TERM”: The Term of this Lease is hereby extended from July 1, 2011 thru June 30, 2014.

 

Section 2 entitled “BASE RENT”: The Base Rent is hereby changed as follows:

 

	
July 1, 2011 – June 30, 2012

	
$11,314.63 per month

	
July 1, 2012 – June 30, 2013

	
$11,530.14 per month

	
July 1, 2013 – June 30, 2014

	
$11,853.42 per month

Section 27 entitled “EARLY RIGHT TO TERMINATE”: This is a new Section of the Lease and under this Section, Lessee and Lessor hereby acknowledge that Lessee shall have the sole and exclusive one-time right to terminate this Lease on December 31, 2012, by delivering written notice to Lessor of its intention to so terminate the Lease, on or before June 30, 2012, In the event Lessee does elect to exercise its right to early termination, pursuant to this Section 27, both Lessee and Lessor shall continue to be obligated for all of their obligations under the Lease through December 31, 2012.  Lessee and Lessor further acknowledge that there will be no penalty for such early termination, should it occur, if such is in accordance with the terms of this Section 27.

 

Except as expressly provided herein, the Lease is unamended, except for this Fifth Amendment to Lease, and as noted in the Recitals and the parties hereby ratify the Lease, First Amendment to Lease, Second Amendment to Lease, Third Amendment to Lease, Fourth Amendment to Lease, and this Fifth Amendment to Lease as herein modified.  In the event of conflict or ambiguity of the terms of the Lease or any

 

of the Amendments thereto, as noted herein, and the provisions of this Fifth Amendment to Lease, the provisions of this Fifth Amendment to Lease, shall govern and control

 

  

  

  

 

This Agreement:

 

Constitutes the entire agreement among the parties hereto with respect to the subject matter hereof; shall be construed and governed by the laws of the State of Kansas;

 

shall inure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

 

may not be amended, except by written agreement of the parties hereto; and,

 

may be executed in multiple counter-parts whether of the entire Agreement or of the signature page or

 

both, all of which counter-parts taken together shall constitute the complete Agreement.

 

IN WITNESS WHEREOF, this Fifth Amendment to Lease is executed as of the date(s) below.

 

	
LESSOR

	 	LESSEE
	  	  	 	 	  
	

COLLEGE CROSSING ASSOCIATES, LLC

	 	
VALENT AEROSTRUCTURES – LENEXA, LLC

	

A Missouri Limited Liability Company

	 	

a Kansas Limited Liability Company

	  	  	 	 	  
	
BY:

	

BK PROPERTIES, LLC, Managing Member

	 	
BY:

	/s/ Bruce R. Breckenridge
	 	  	 	 	

Bruce R. Breckenridge, Member

	
BY:

	/s/ Kenneth G. Block	 	 	  
	 	

Kenneth G. Block, Trustee

	 	 	  
	 	

Of the Kenneth G. Block Trust

	 	 	  
	 	

Dated January 11, 1991, as

	 	 	  
	 	

Amended,

	 	 	  
	 	

Managing Member

	 	 	  

 

	
DATE:

	May 24, 2011	 	
DATE:

	May 23, 2011	 

 

SIGNATURE PAGE FOR THAT CERTAIN

FIFTH AMENDMENT TO LEASE

BY AND BETWEEN

COLLEGE CROSSING ASSOCIATES, LLC, LESSOR

AND

VALENT AEROSTRUCTURES – LENEXA, LLC, LESSEE

FOR THE PROPERTY LOCATED AT

11064 STRANG LINE ROAD

LENEXA, KANSAS

 

 

2

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