ASSET PURCHASE AGREEMENT EXHIBIT 10.71
ASSET PURCHASE AGREEMENT, dated as of August 20, 1999 (the "Agreement"), by
and among ▇▇▇▇▇▇ CORPORATION, a Delaware corporation ("▇▇▇▇▇▇"), ▇▇▇▇▇▇
BUILDING SYSTEMS, INC., a Delaware corporation ("▇▇▇▇▇▇"), and ▇▇▇▇▇▇ BUILDING
SYSTEMS OF KANSAS, INC., a Kansas corporation and a wholly owned subsidiary of
▇▇▇▇▇▇ ("MBSK").
MBSK is a wholly-owned subsidiary of ▇▇▇▇▇▇ and is engaged in the engineering,
design, manufacturing and sale of concrete shelters (the "Business"). ▇▇▇▇▇▇,
MBSK and ▇▇▇▇▇▇ have determined that it is in their respective best interests to
consummate the purchase and sale provided for in this Agreement, in which ▇▇▇▇▇▇
shall purchase from MBSK, and MBSK shall sell to ▇▇▇▇▇▇, certain assets used in
the Business, on the terms and subject to the conditions contained in this
Agreement.
NOW, THEREFORE, in consideration of the mutual covenants, representations,
warranties and agreements contained herein, the parties agree as follows:
ARTICLE I.
PURCHASE AND SALE
1.1. Purchase and Sale of Assets; Excluded Assets.
(a) On the terms and subject to the conditions of this Agreement, at the
Closing (as hereinafter defined), MBSK shall sell, convey, transfer, assign and
deliver to ▇▇▇▇▇▇, and ▇▇▇▇▇▇ shall acquire from MBSK, all of the right, title
and interest in and to the assets listed below free and clear of all Liens (as
hereinafter defined), other than Permitted Liens (as hereinafter defined)
(collectively, the "Acquired Assets"): (i) all of the machinery, equipment,
furniture, tangible personal property and other fixed assets owned by MBSK and
located at the Burlington Facility (as defined in Section 2.18), substantially
all of which are listed on Schedule 2.14 (the "Fixed Assets"), except the two
forklifts located at the Burlington Facility; (ii) all raw materials of MBSK
located at the Burlington Facility (the "Raw Materials"); (iii) all books and
records of MBSK relating solely to the Fixed Assets, Raw Materials or
Burlington Facility; (iv) all permits and licenses of MBSK, if any, related to
the Burlington Facility, to the extent assignable to ▇▇▇▇▇▇; (v) all of MBSK's
rights to the Revised Burlington Lease (as defined in Section 2.18) and, subject
to Section 4.6, the Burlington Purchase Option Lease (as defined in Section
2.18); (vi) any office supplies, inventory (other than work-in-process or
finished goods inventory), wrapping, packaging or other similar items located at
the Burlington Facility; (vii) all of MBSK's rights under the Assumed Contracts
(as defined in Section 1.3).
(b) Notwithstanding any other provision of this Agreement, MBSK's rights
in and to the following assets (collectively, the "Excluded Assets"), although
they may relate to the Business, are to be retained by MBSK and are not to be
sold, conveyed, assigned or transferred to ▇▇▇▇▇▇: (i) this Agreement and all
rights of MBSK hereunder; (ii) the capital stock of MBSK; (iii) all assets of
Employee Benefit Plans; (iv) the corporate charter of MBSK and all
qualifications to conduct business as a foreign corporation, taxpayer
identification numbers, seals, and original minute books, stock record and
transfer books, and other documents relating to the organization, maintenance,
and existence of MBSK as acorporation; (v) all work-in-process and finished
goods inventory of MBSK as of the Closing Date; (vi) all cash, cash equivalents
and accounts receivable of MBSK; (vii) the "▇▇▇▇▇▇ Building Systems" name;
(viii) all other assets of MBSK that are not Acquired Assets hereunder; and
(ix) all designs, patents, trademarks, service marks, copyrights, software
and systems and all other intellectual property or proprietary rights of MBSK
or ▇▇▇▇▇▇; provided, however, that to the extent that any software or source
code owned by MBSK or ▇▇▇▇▇▇ is required to operate any of the Fixed Assets,
▇▇▇▇▇▇ agrees to grant to ▇▇▇▇▇▇, without payment of additional consideration
or royalty, a perpetual license, in a form mutually acceptable to the parties,
to use such software or source code to operate the Fixed Asset. MBSK agrees,
at its expense, to promptly, but in any event by not later than 30 days
following the Closing Date, remove from the Burlington Facility all tangible
assets and properties of MBSK constituting Excluded Assets. In effecting such
removal, MBSK agrees not to unreasonably interfere with the operations of
▇▇▇▇▇▇ and agrees to repair any damage caused by such removal.
1.2. Purchase Price; Allocation.
(a) The aggregate purchase price (the "Purchase Price") for the Acquired Assets
and the other obligations of MBSK and ▇▇▇▇▇▇ hereunder shall be $3,500,000.00,
which Purchase Price consists of the Base Purchase Price (as defined below) and
Contingent Purchase Price (as defined below). At the Closing, upon the terms
and subject to the conditions set forth herein, ▇▇▇▇▇▇ shall pay and deliver to
MBSK $1,000,000 (the "Base Purchase Price"), by wire transfer of immediately
available funds to an account designated in writing by ▇▇▇▇▇▇. Upon the terms
and subject to the conditions set forth in Section 5.4, ▇▇▇▇▇▇ shall pay and
deliver to MBSK, $2,500,000 (the "Contingent Purchase Price"), by wire transfer
of immediately available funds to an account designated in writing by ▇▇▇▇▇▇.
(b) The parties agree (i) to determine prior to Closing an allocation of
the Purchase Price among the Acquired Assets to be used by the parties for all
purposes (including financial accounting and tax purposes) consistent with the
requirements of Section 1060 of the Internal Revenue Code of 1986, as amended
(the "Code"), and attach such allocation to this Agreement as the "Allocation
Schedule", and (ii) to jointly complete and separately file in a timely
manner Internal Revenue Service Form 8594 with their respective federal income
tax returns for the tax year in which the Closing Date occurs.
1.3. Assumption of Liabilities. Upon the terms and subject to the conditions
contained herein, at the Closing or the Effective Time (as defined below), as
the case may be, ▇▇▇▇▇▇ shall assume (the "Assumed Liabilities"): (a) the
payment and performance obligations arising from and after the Closing Date
under the contracts listed on Schedule 1.3 (the "Assumed Contracts"); (b) the
payment and performance obligations arising from and after the Closing Date
under the Revised Burlington Lease; (c) the payment and performance obligations
under the Burlington Purchase Option Lease arising from and after the effective
time (the "Effective Time") of the assignment of the Burlington Purchase Option
Lease to ▇▇▇▇▇▇; (d) as set forth in Section 4.5; (e) as provided in Section 4.8
(d). ▇▇▇▇▇▇ agrees to pay, discharge and perform all such Assumed Liabilities
promptly as and when due.
1.4. Excluded Liabilities. Subject to the indemnification provisions of
Section 6.2, other than the Assumed Liabilities, ▇▇▇▇▇▇ shall not retain or
assume or be obligated to pay, perform, discharge, or otherwise be responsible
for, any liabilities or obligations of MBSK or ▇▇▇▇▇▇ with respect to MBSK,
whether actual or contingent, direct or indirect, matured or unmatured,
liquidated or unliquidated, or known or unknown, whether arising out of
occurrences prior to, at or after the date hereof (collectively, the "Excluded
Liabilities"). ▇▇▇▇▇▇ acknowledges and agrees that it is retaining the Excluded
Liabilities, and ▇▇▇▇▇▇ agrees to pay, discharge and perform all such
liabilities and obligations promptly as and when due. Without limiting the
generality of the foregoing, ▇▇▇▇▇▇ shall not assume or be obligated to pay,
perform or discharge any liabilities, obligations or commitments of MBSK or
▇▇▇▇▇▇ with respect to MBSK relating to or arising out of any of the following:
(a) accounts or notes payable or purchase orders; (b) any liability or
obligation of MBSK for fees, costs and expenses of attorneys; (c) all
liabilities or obligations of MBSK for any Taxes, workers' compensation
liabilities, payroll, consulting fees or for fees or other expenses of MBSK;
(d) any claims by any present or former MBSK employee to any Employee Benefit
Plan or other employee benefits of MBSK or ▇▇▇▇▇▇; and (e) all liabilities and
obligations, if any, under the Original Burlington Lease (as defined in
Section 2.18) or under the Revised Burlington Lease relating to the period
ending on or before the Closing Date or under the Burlington Purchase Option
Lease relating to the period ending on or before the Effective Time.
1.5. Closing Costs; Transfer Taxes and Fees. Notwithstanding any other
provision herein, any documentary and transfer Taxes and any sales, use or other
Taxes imposed on the seller by reason of the sale, assignment and/or transfer of
Acquired Assets or the Assumed Liabilities provided hereunder and any
deficiency, interest or penalty asserted with respect thereto shall be borne
by MBSK, and any documentary and transfer Taxes and any sales, use or other
Taxes imposed on the buyer by reason of the sale, assignment and/or transfer of
Acquired Assets or the Assumed Liabilities provided hereunder and any
deficiency, interest or penalty asserted with respect thereto shall be borne
by ▇▇▇▇▇▇.
1.6. Closing. (a) The closing of the transactions contemplated herein,
except the assignment and transfer of the Burlington Purchase Option Lease
which will occur subsequent to the closing (the "Closing"), will take place
on Friday, August 20, 1999, at 10:00 a.m., local time, at the offices of
▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ or at such
other time and place as the parties may mutually determine. The parties will
execute and deliver this Agreement at the Closing. The actual date on which
the Closing occurs is referred to herein as the "Closing Date," and the
Closing shall be deemed effective as of 12:01 a.m. on the Closing Date. The
assignment and transfer of the Burlington Purchase Option Lease will occur
subsequent to the Closing at the offices of ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇ within
5 days after the satisfaction (or waiver) of the conditions set forth in
Sections 5.4 and 5.5 or at such other time and place as the parties may
mutually determine.
(b) At the Closing, MBSK shall deliver to ▇▇▇▇▇▇ ▇▇▇▇ and sufficient bills
of sale, assignments, release of liens and other instruments to convey to ▇▇▇▇▇▇
▇▇▇▇ and valid title to the Acquired Assets, free and clear of all Liens, except
the Permitted Liens, together with the other documents, agreements, opinions,
instruments and certificates contemplated by this Agreement.
(c) At the Closing, ▇▇▇▇▇▇ shall pay the Base Purchase Price to MBSK by
wire transfer of immediately available funds to an account designated by ▇▇▇▇▇▇
in writing to ▇▇▇▇▇▇.
(d) Upon the satisfaction (or waiver) of the conditions set forth in
Sections 5.4 and 5.5, MBSK shall deliver to ▇▇▇▇▇▇ such documents, assignments,
agreements, opinions, instruments and certificates as may be reasonably
necessary or advisable in order to consummate the transactions contemplated in
respect to the Burlington Purchase Option Lease, and ▇▇▇▇▇▇ shall pay the
Contingent Purchase Price to MBSK by wire transfer of immediately available
funds to an account designated by ▇▇▇▇▇▇ in writing to ▇▇▇▇▇▇.
1.7. Fixed Assets. On Thursday, August 19, 1999, the parties shall
conduct a physical walk-through of the Burlington Facility for the purpose of
confirming the existence of substantially all of the Fixed Assets.
1.8. Raw Materials. ▇▇▇▇▇▇ agrees to deliver Raw Materials to ▇▇▇▇▇▇ at
the Closing with a net book value of approximately $380,000 or more. On
Thursday, August 19, 1999, the parties shall conduct a physical walk-through of
the Burlington Facility for the purpose of confirming that the Raw Materials
located at the Burlington Facility have a net book value of approximately
$380,000 or more.
ARTICLE II.
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
▇▇▇▇▇▇ represents and warrants to ▇▇▇▇▇▇ as follows:
2.1. Authorization of MBSK; Approvals. The execution, delivery and
performance by each of MBSK and ▇▇▇▇▇▇ of this Agreement and each of the other
agreements, documents and instruments (the "Ancillary Documents") to be executed
and delivered by each of MBSK and ▇▇▇▇▇▇ in connection with the transactions
contemplated by this Agreement have been duly authorized. Each of ▇▇▇▇▇▇ and
MBSK has all necessary corporate power and authority to consummate the
transactions contemplated by this Agreement. This Agreement constitutes, and
each of the Ancillary Documents to be executed by MBSK or ▇▇▇▇▇▇ will
constitute, the valid and binding obligations of MBSK and ▇▇▇▇▇▇, as the case
may be, enforceable against MBSK and ▇▇▇▇▇▇, as the case may be, in accordance
with their respective terms. Each of ▇▇▇▇▇▇ and MBSK has obtained all
consents, authorizations and approvals of, and has made all declarations and
filings with, all federal and state governmental authorities required on the
part of ▇▇▇▇▇▇ or MBSK in connection with the consummation of the transactions
contemplated by this Agreement, except to the extent that the lack of any such
consent, authorization or approvals, individually or in the aggregate, will not
have a Material Adverse Effect (as defined in Section 2.2) on MBSK or ▇▇▇▇▇▇.
2.2. Organization, Standing, Qualification and Ownership of MBSK. MBSK is
a corporation duly organized, validly existing and in good standing under the
laws of the State of Kansas and has full power and authority to own, lease and
operate its properties and assets and to conduct its business as presently
conducted. MBSK is duly qualified to do business as a foreign corporation and
in good standing in the state of Texas, and there is no other jurisdiction in
which the failure to so qualify and be in good standing could reasonably be
expected to have a material adverse effect on the condition (financial or
otherwise), business, results of operations, prospects, assets, properties,
liabilities or operations ("Material Adverse Effect") of MBSK. ▇▇▇▇▇▇ owns all
of the outstanding capital stock of MBSK.
2.3. Capitalization of MBSK. The authorized capital stock of MBSK consists
of 1,000 shares of common stock, par value $0.01 per share (the "MBSK Common
Stock"), of which 1,000 shares are issued and outstanding. ▇▇▇▇▇▇ is the record
owner and beneficial owner of all of the issued and outstanding shares of MBSK
Common Stock. MBSK has no (and has never had any) subsidiaries and does not own
any interest in or control, directly or indirectly, any other corporation,
limited liability company, trust, partnership, association or other entity.
2.4. No Conflict or Violations; Consents. The execution, delivery and
performance by each of MBSK and ▇▇▇▇▇▇ of this Agreement and each of the
Ancillary Documents, the consummation of the transactions contemplated hereby
and the compliance by MBSK and ▇▇▇▇▇▇ with any of the provisions hereof or
thereof, will not (a) violate any provision of the Certificate of Incorporation
(or Articles of Incorporation) or Bylaws of ▇▇▇▇▇▇ or MBSK, (b) to ▇▇▇▇▇▇'▇
knowledge, upon obtaining the ▇▇▇▇▇▇ County Consents (as defined below), violate
or result in a material breach of any provision of, or constitute a default (or
an event which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration under, or
materially increase the amount payable by ▇▇▇▇▇▇ or MBSK under, or result in the
creation of any Lien upon any of the assets or properties of ▇▇▇▇▇▇ or MBSK
under, any of the terms, conditions or provisions of any material contract or
lease (i) to which ▇▇▇▇▇▇ or MBSK is a party or (ii) by which ▇▇▇▇▇▇ or MBSK is
bound, or (c) to ▇▇▇▇▇▇'▇ knowledge, violate in any material respect any
statute, rule, regulation, ordinance, code, order, judgment, ruling, writ,
injunction, decree or award by which ▇▇▇▇▇▇ or MBSK is bound. ▇▇▇▇▇▇ County (as
hereinafter defined) has consented to the assignment and transfer of the Revised
Burlington Lease to ▇▇▇▇▇▇, as evidenced by the minutes of the meeting of ▇▇▇▇▇▇
County to be provided to ▇▇▇▇▇▇ within ten days after the Closing Date and,
subject to Section 4.6, will have consented to the assignment and transfer of
the Burlington Purchase Option Lease to ▇▇▇▇▇▇ at or prior to the Effective Time
(collectively, the "▇▇▇▇▇▇ County Consents").
2.5. Financial Statements. ▇▇▇▇▇▇ has previously provided to ▇▇▇▇▇▇
complete and correct copy of the unaudited interim balance sheet of MBSK as of
May 22, 1999 (the "Interim Balance Sheet"). The Interim Balance Sheet is in
accordance with the books and records of MBSK and fairly presents in all
material respects the financial position of MBSK as of the date thereof. The
Interim Balance Sheet, including any notes thereto, has been prepared in
accordance with generally accepted accounting principles ("GAAP") consistently
applied during the periods involved, subject to normal year-end adjustment,
inventory verification and absence of footnote disclosure. The books and
records of MBSK have been, and are being, maintained in all material respects
in accordance with all applicable legal requirements and GAAP.
2.6. Labor Agreement and Actions. MBSK is not bound by or subject to any
contract with any labor union and, to the knowledge of ▇▇▇▇▇▇, no labor union
has requested or has sought to represent any of the employees of MBSK. There is
no strike or other labor dispute involving MBSK pending, or to the knowledge of
▇▇▇▇▇▇ threatened, and MBSK is not aware of any labor organization activity
involving its employees.
2.7. Undisclosed Liabilities. MBSK has no material liabilities (absolute,
accrued, contingent or otherwise), except liabilities (a) reflected on the
Interim Balance Sheet, or (b) incurred since the date of the Interim Balance
Sheet, in the ordinary course of business consistent with past practice, which
are of the same nature as those set forth on the Interim Balance Sheet (other
than any liabilities resulting from, arising out of, relating to, in the nature
of, or caused by any breach of contract, breach of warranty, tort, infringement
or violation of law).
2.8. Compliance With Law; Permits. To ▇▇▇▇▇▇'▇ knowledge, neither MBSK nor
▇▇▇▇▇▇ with respect to MBSK has materially violated, and MBSK and ▇▇▇▇▇▇ with
respect to MBSK are in material compliance with, all laws, statutes, ordinances,
regulations, rules, licenses, permits, franchises, approvals and consents and
orders of any foreign, federal, state or local governmental authority. ▇▇▇▇▇▇
has previously provided to ▇▇▇▇▇▇ a complete and correct list of all material
governmental licenses, permits, franchises, approvals and consents (the
"Permits") which are, to ▇▇▇▇▇▇'▇ knowledge, required to be received or obtained
by MBSK (or by ▇▇▇▇▇▇ with respect to MBSK) to conduct its business. The
Permits are in full force and effect as of the date hereof and, to the extent
assignable to ▇▇▇▇▇▇, to ▇▇▇▇▇▇'▇ knowledge, will be in full force and effect
with respect to ▇▇▇▇▇▇ immediately after the Closing, except to the extent that
the failure of any such Permit to be in full force and effect will not,
individually or in the aggregate, have a Material Adverse Effect on the
Business.
2.9. Taxes.
(a) MBSK (or ▇▇▇▇▇▇ with respect to MBSK) has timely filed all Tax Returns
(as defined below) that are required by it and all such Tax Returns are correct
and complete in all material respects. To ▇▇▇▇▇▇'▇ knowledge, MBSK (or ▇▇▇▇▇▇
with respect to MBSK) has paid or made provision for the payment of all Taxes
due from MBSK. The assessment of any additional Taxes for periods for which Tax
Returns have been filed by MBSK (or by ▇▇▇▇▇▇ with respect to MBSK) shall not
exceed the recorded liability therefor on the Interim Balance Sheet. The Tax
Returns of MBSK (and ▇▇▇▇▇▇ with respect to MBSK) have not been audited by any
taxing authority, and there are no waivers in effect of the applicable statute
of limitations for any period. No examination or audit of any Tax Return or
report of MBSK (or ▇▇▇▇▇▇ with respect to MBSK) by any applicable taxing
authority is currently in progress. No deficiency assessment or proposed
adjustment of Taxes of MBSK (or ▇▇▇▇▇▇ with respect to MBSK) is pending, and
▇▇▇▇▇▇ has no knowledge of any proposed liability for any Tax to be imposed on
MBSK (or ▇▇▇▇▇▇ with respect to MBSK), except in the ordinary course of
business. To ▇▇▇▇▇▇'▇ knowledge, MSBK (or ▇▇▇▇▇▇ with respect to MBSK) has
withheld and paid all Taxes required to have been withheld in connection with
amounts paid to any employee, independent contractors, creditors, or other third
parties.
(b) MBSK (nor ▇▇▇▇▇▇ with respect to MBSK) is not obligated to make
payments, and is not a party to an agreement that could obligate it to make any
payments, that would not be deductible under Section 280G of the Code. No claim
has ever been made in writing to ▇▇▇▇▇▇ or MBSK by a taxing authority in a
jurisdiction where MBSK does not file Tax Returns that MBSK is or may be subject
to Taxes assessed by such jurisdiction. There are no Liens for Taxes (other
than for current Taxes not yet due and payable) upon the assets of MBSK. MBSK
has not been a member of an Affiliated Group (as defined below) other than the
one of which ▇▇▇▇▇▇ was the common parent, or filed or been included in a
combined, consolidated or unitary income Tax Return, other than one filed by
▇▇▇▇▇▇ or MBSK. MBSK has not been a United States real property holding
corporation within the meaning of Section 897(c)(2) of the Code within the
applicable period specified in Section 897(c)(1)(A)(ii) of the Code. ▇▇▇▇▇▇
will not be required to deduct and withhold any amount pursuant to Section
1445(a) of the Code upon the transfer of the Acquired Assets to ▇▇▇▇▇▇.
(c) For purposes of this Agreement: (i) "Affiliated Group" means any
affiliated group of corporations within the meaning of Section 1504 of the Code
(and any corresponding provision of state, local or foreign income Tax law);
(ii) "Tax" or "Taxes" means any federal, state, local or foreign income, gross
receipts, franchise, estimated, alternative minimum, add-on minimum, sales,
use, transfer, registration, value added, excise, natural resources, severance,
stamp, occupation, premium, windfall profit, environmental, customs, duties,
real property, personal property, capital stock, social security, unemployment,
disability, payroll, license, employee or other withholding, or other tax, of
any kind whatsoever, including any interest, penalties or additions to tax or
additional amounts in respect of the foregoing; and (iii) "Tax Returns" means
returns, declarations, reports, claims for refund, information returns or other
documents (including any related or supporting schedules, statement or
information) filed or required to be filed in connection with the determination,
assessment or collection of Taxes of any party or the administration of any
laws, regulations or administrative requirements related to Taxes.
2.10. Contracts and Commitments. Except for the Assumed Contracts, the
Assumed Liabilities do not consist of any written or oral contract, agreement
or arrangement (a) involving any annual expenditure of more than $15,000 or
$15,000 in the aggregate, (b) involving a term of more than 6 months that is
not terminable by MBSK upon 30 days prior notice to the other party thereto at
any time for any reason, without payment of additional consideration, (c)
involving employment of persons as employees or consultants, (d) prohibiting or
restricting MBSK from freely engaging in any business or competing anywhere in
the world, or (e) involving indebtedness of or a guaranty by MBSK in favor of
any person or entity, except in the case of clauses (a) and (b) above in respect
to the Revised Burlington Lease and the Burlington Purchase Option Lease.
Neither MBSK nor, to ▇▇▇▇▇▇'▇ knowledge, the other party to the Assumed
Liabilities is in material breach or default and no event has occurred which
with notice or lapse of time would constitute a material breach or default, or
permit termination, modification, or acceleration, under the Assumed
Liabilities.
2.11. Litigation. No action, suit, proceeding or governmental inquiry or
investigation ("Action') is pending or, to the knowledge of ▇▇▇▇▇▇, threatened
against MBSK or ▇▇▇▇▇▇ with respect to MBSK or any of MBSK's officers, directors
or employees (in their capacity as such) before any court, arbitration board or
tribunal or administrative or other governmental agency, nor is ▇▇▇▇▇▇ aware of
any facts or circumstances that could reasonably be expected to give rise to any
such Action.
2.12. Fees and Commissions. No person or entity will be entitled to any
brokerage commissions, finder's fees or similar compensation arising out of or
due to any act of ▇▇▇▇▇▇ or MBSK (including their officers, directors, employees
and agents) in connection with the transactions contemplated by this Agreement.
2.13. ERISA. Except as disclosed on Schedule 2.13, neither ▇▇▇▇▇▇ nor
MBSK maintains, sponsors, or contributes (or has during the last 5 years been
obligated to maintain, sponsor or contribute) to, or has any liability with
respect to, any program or arrangement that is an "employee pension benefit
plan", an "employee welfare benefit plan", or a "multi-employer plan", as
those terms are defined in Sections 3(1), 3(2) or 3(37) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any deferred
compensation, bonus, incentive compensation, savings, stock option or fringe
benefit plan or arrangement with respect to any employee of MBSK who will be
employed by ▇▇▇▇▇▇ following the Closing. The plans, programs and arrangements
referred to in the preceding sentence are collectively called "Employee
Benefit Plans". Neither ▇▇▇▇▇▇ nor MBSK nor any person that is a member of
MBSK's controlled group of corporations or a trade or business under common
control with MBSK as defined in Section 414 of the Code has, maintains, sponsors
or contributes or has during the last 5 years been obligated to maintain,
sponsor or contribute) to any benefit plan subject to Title IV of ERISA or a
multi-employer plan. With respect to the Employee Benefit Plans, individually
and in the aggregate, to the knowledge of ▇▇▇▇▇▇, all such plans have been
maintained and operated in accordance with their terms and applicable laws,
including compliance with all material reporting and disclosure requirements
(except to the extent that any failure to do so would not, individually or in
the aggregate, have a Material Adverse Effect on MBSK or ▇▇▇▇▇▇) and no event
has occurred, and, to the knowledge of ▇▇▇▇▇▇, there exists no condition or
set of circumstances in connection with which MBSK could be subject to any
material liability under ERISA, the Code (including Consolidated and Omnibus
Recovery Act ("COBRA")) or any other applicable law or to any person. With
respect to the Employee Benefit Plans, individually and in the aggregate, to
▇▇▇▇▇▇'▇ knowledge, there are no material benefit obligations for which
contributions have not been made or properly accrued in accordance with GAAP,
on the Interim Balance Sheet, and accounted for by reserves if unfunded. Each
Employee Benefit Plan that is intended to be tax qualified, other than a plan
that is a standardized prototype plan, has received an Internal Revenue Service
determination letter covering all Code requirements for which the remedial
amendment period has expired. Neither ▇▇▇▇▇▇ nor MBSK has any liability to
provide post-retirement welfare benefits to any former or current employee of
MBSK.
2.14. Title to Properties; Encumbrances. MBSK owns no real property.
MBSK has good and valid title to all assets reflected on the Interim Balance
Sheet and to be reflected on the Closing Schedule, free and clear of all
encumbrances, liens, security interests, claims, charges or other restrictions
of any nature or kind (collectively, "Liens"), other than (collectively,
"Permitted Liens"): (a) Liens for current taxes, assessments or governmental
charges or levies on property not yet due and delinquent; and (b) statutory
Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen
and other similar person or entities. To the knowledge of ▇▇▇▇▇▇, no Liens
have been filed against the assets or properties of MBSK other than Liens that,
in the aggregate, do not materially affect the Acquired Assets. To the
knowledge of ▇▇▇▇▇▇, the assets and properties owned or used by MBSK are in
reasonably good working order and condition, ordinary wear and tear excepted.
Schedule 2.14 contains a complete and correct list of all of the Fixed Assets,
which Schedule 2.14 contains substantially the same Fixed Assets as the list
provided to ▇▇▇▇▇▇ on June 21, 1999 and is substantially representative of the
fixed assets located at the Burlington Facility.
2.15. Environmental Liability.
(a) To ▇▇▇▇▇▇'▇ knowledge, at all times prior to the Closing, MBSK has
complied in all material respects with all Environmental Laws (as defined
below). MBSK has not received any notice, report, or information (including
information that any Action of any kind is pending or threatened) regarding
any liabilities (whether accrued, absolute, contingent, unliquidated, or
otherwise), or any corrective, investigatory, or remedial obligations,
arising under Environmental Law relating to MBSK or the occupation or use of
any of its assets or real properties currently or formerly owned or leased by
MBSK. To ▇▇▇▇▇▇'▇ knowledge, MBSK holds all licenses, consents and permits
under Environmental Laws necessary for the conduct of its business as presently
being conducted, and such licenses, consents and permits are valid and in full
force and effect, except to the extent that the failure to have or maintain in
full force and effect any such licenses, consents, or permits would not,
individually or in the aggregate, have a Material Adverse Effect on MBSK or
▇▇▇▇▇▇. "Environmental Laws" means any and all federal, state, county, local
and foreign laws, statutes, codes, ordinances, rules, regulations, judgments,
orders, decrees, permits, concessions, grants, franchises, licenses, agreements
or governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including
but not limited to those related to hazardous substances or wastes, air
emissions and discharges to waste or public systems; and
(b) To ▇▇▇▇▇▇'▇ knowledge, no Hazardous Materials (as defined below) have
been, or are currently, located at, in, or under or emanating from the assets or
properties currently or formerly owned or operated by MBSK at the Burlington
Facility in a manner which: (i) violates in any material respect any applicable
Environmental Laws, or (ii) requires response, remedial, corrective action or
cleanup of any kind under any applicable Environmental Laws. "Hazardous
Material" means any and all pollutants, toxic or hazardous wastes or any other
substances that might pose a hazard to health or safety, the removal of which
may be required or the generation, manufacture, refining, production,
processing, treatment, storage, handling, transportation, transfer, use,
disposal, release, discharge, spillage, seepage, or filtration of which is or
shall be restricted, prohibited or penalized by any applicable Environmental Law
(including asbestos, urea formaldehyde foam insulation and polychlorinated
biphenyls).
2.16. Books and Records. To ▇▇▇▇▇▇'▇ knowledge, the books and records of
MBSK are complete and correct in all material respects and accurately and fairly
reflect all material information relating to its business, the nature,
acquisition, maintenance, location and character of its assets, and the
nature of all transactions giving rise to its balance sheet assets and
liabilities.
2.17. Employees. To the knowledge of ▇▇▇▇▇▇, no executive or key employee
of MBSK and no group of MBSK employees has any plans to terminate employment
with MBSK, with the exception of ▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇ who will become
employees of ▇▇▇▇▇▇ or an affiliate thereof, prior to the Closing. ▇▇▇▇▇▇ has
previously provided to ▇▇▇▇▇▇ a complete and correct list as of the date of this
Agreement of all employees of MBSK and their current compensation (salary and
bonus and other compensation) and compensation for the calendar year 1998.
2.18. Leases. The Lease Agreement dated August 12, 1996 (the "Original
Burlington Lease") between Board of County Commissioners of ▇▇▇▇▇▇ County,
Kansas ("▇▇▇▇▇▇ County"), as landlord, and MBSK, as tenant, has been superceded
in its entirety by the Lease Agreement dated August 6, 1999 between ▇▇▇▇▇▇
County and MBSK, a correct and complete copy of which is attached as Schedule
2.18-A (the "Revised Burlington Lease"). The Revised Burlington Lease is the
only lease or sublease of real property to which MBSK is a party or bound.
Attached as Schedule 2.18-B is a true and correct copy of the form of Lease
Agreement between ▇▇▇▇▇▇ County and MBSK containing a purchase option for the
premises (the "Burlington Purchase Option Lease") that ▇▇▇▇▇▇ will use its
reasonable best efforts to cause to supercede in its entirety the Revised
Burlington Lease upon, and only in the event of, its authorization and approval
by ▇▇▇▇▇▇ County in accordance with the provisions of Section 19-211 of the
Kansas Statutes ("Section 19-211") and any other applicable legal requirements
and its execution and delivery by the parties thereto. The Revised Burlington
Lease is the legal, valid, binding obligation of MBSK and, to ▇▇▇▇▇▇'▇
knowledge, of ▇▇▇▇▇▇ County, enforceable against MBSK and, to ▇▇▇▇▇▇'▇
knowledge, ▇▇▇▇▇▇ County in accordance with its terms, and is in full force and
effect. If the Burlington Purchase Option Lease is assigned by MBSK to ▇▇▇▇▇▇
in accordance with this Agreement, then the Burlington Purchase Option Lease
will be at or before the Effective Time the legal, valid, binding obligation of
MBSK and, to ▇▇▇▇▇▇'▇ knowledge, of ▇▇▇▇▇▇ County, enforceable against MBSK and,
to ▇▇▇▇▇▇'▇ knowledge, ▇▇▇▇▇▇ County in accordance with its terms, and in full
force and effect. As of the Closing Date, the Revised Burlington Lease will be
assigned and transferred by MBSK to ▇▇▇▇▇▇ in accordance with this Agreement and
will be, to ▇▇▇▇▇▇'▇ knowledge, the legal, valid and binding obligations of
▇▇▇▇▇▇ County, enforceable against ▇▇▇▇▇▇ County by ▇▇▇▇▇▇ in accordance with
its terms and will be in full force and effect. If the Burlington Purchase
Option Lease is assigned by MBSK to ▇▇▇▇▇▇ in accordance with this Agreement,
then as of the Effective Time the Burlington Purchase Option Lease will be,
to ▇▇▇▇▇▇'▇ knowledge, the legal, valid and binding obligations of ▇▇▇▇▇▇
County, enforceable against ▇▇▇▇▇▇ County by ▇▇▇▇▇▇ in accordance with its
terms and will be in full force and effect. Except in respect to the survival
of certain rights of MBSK as provided in the Original Burlington Lease and
reflected in the Revised Burlington Lease, neither party to the Revised
Burlington Lease is (and neither party to the Burlington Purchase Option Lease
will be) in material breach or default and no event has occurred (or will have
occurred in respect to the Burlington Purchase Option Lease) which with notice
or lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under the Revised Burlington Lease or Burlington
Purchase Option Lease, as the case may be. The real property and premises
subject to the Revised Burlington Lease and the Burlington Purchase Option
Lease are referred to herein as the "Burlington Facility."
2.19. Disclosure. The representations and warranties of ▇▇▇▇▇▇ in this
Agreement do not include any untrue statement of a material fact nor do they
omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF ▇▇▇▇▇▇
▇▇▇▇▇▇ represents and warrants to ▇▇▇▇▇▇ and MBSK as follows:
3.1. Authorization of ▇▇▇▇▇▇; Approvals. The execution, delivery and
performance by ▇▇▇▇▇▇ of this Agreement and each of the Ancillary Documents to
be executed and delivered by ▇▇▇▇▇▇ in connection with the transactions
contemplated by this Agreement have been duly authorized. ▇▇▇▇▇▇ has all
necessary corporate power and authority to consummate the transactions
contemplated by this Agreement. This Agreement constitutes, and each of the
Ancillary Documents to be executed and delivered by ▇▇▇▇▇▇ in connection with
the transactions contemplated by this Agreement will constitute, the valid and
binding obligations of ▇▇▇▇▇▇, enforceable against ▇▇▇▇▇▇ in accordance with
their respective terms. ▇▇▇▇▇▇ has obtained all consents, authorizations and
approvals of, and has made all declarations and filings with, all federal and
state governmental authorities required on the part of ▇▇▇▇▇▇ in connection with
the consummation of the transactions contemplated by this Agreement, except to
the extent that the lack of any such consent, authorization or approvals,
individually or in the aggregate, will not have a Material Adverse Effect on
▇▇▇▇▇▇.
3.2. No Conflict or Violations; Consents. The execution, delivery and
performance by ▇▇▇▇▇▇ of this Agreement and each of the Ancillary Documents to
which ▇▇▇▇▇▇ is a party, the consummation of the transactions contemplated
hereby and the compliance by ▇▇▇▇▇▇ with any of the provisions hereof or
thereof, will not (a) violate any provision of the Certificate of Incorporation
or Bylaws of ▇▇▇▇▇▇, (b) to Andrew's knowledge, violate or result in a material
breach of any provision of, or constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in a
right of termination or acceleration under, or increase the amount payable by
▇▇▇▇▇▇ under, or result in the creation of any Lien upon any of the assets or
properties of ▇▇▇▇▇▇ under, any of the terms, conditions or provisions of any
material contract or lease (i) to which ▇▇▇▇▇▇ is a party or (ii) by which
▇▇▇▇▇▇ is bound, or (c) to Andrew's knowledge, violate in any material respect
any statute, rule, regulation, ordinance, code, order, judgment, ruling, writ,
injunction, decree or award by which ▇▇▇▇▇▇ is bound.
3.3. Fees and Commissions. No person or entity will be entitled to any
brokerage commissions, finder's fees or similar compensation arising out of or
due to any act of ▇▇▇▇▇▇ (including its officers, directors, employees and
agents) in connection with the transactions contemplated by this Agreement.
3.4. Financial Resources. ▇▇▇▇▇▇ has reasonably sufficient financial
resources to perform its obligations under this Agreement and the documents to
be executed and delivered in connection with this Agreement.
3.5. Disclosure. The representations and warranties of ▇▇▇▇▇▇ in this
Agreement do not include any untrue statement of a material fact nor do they
omit to state a material fact necessary in order to make the statements made,
in light of the circumstances under which they were made, not misleading.
ARTICLE IV.
ADDITIONAL AGREEMENTS
4.1. Closing Efforts; Additional Agreements. Each of the parties will use
its reasonable best efforts to take all action and to do all things necessary,
proper or advisable in order to consummate and make effective the transactions
contemplated by this Agreement (including the satisfaction, but not waiver of
the Closing conditions set forth in this Article V). In case at any time after
the Closing any further action is necessary or desirable (a) to carry out the
intents and purposes of this Agreement or (b) to ▇▇▇▇ ▇▇▇▇▇▇ with full title to
the Acquired Assets, the proper officers and directors of each party to this
Agreement shall take all such reasonably necessary or advisable action.
4.2. Non-Solicitation. For a period of 3 years, neither ▇▇▇▇▇▇ nor MBSK
shall directly, or indirectly through another entity, (1) induce or attempt to
induce any employee providing services at the Burlington Facility to leave the
employ of ▇▇▇▇▇▇, or in any way interfere with the relationship between ▇▇▇▇▇▇
and any such employee thereof, or (2) hire any person to provide services within
a 100 mile radius of the Burlington Facility who was an employee of ▇▇▇▇▇▇
providing services relating to the Burlington Facility at any time during the 6
month period immediately prior to the date on which such hiring would take place
(it being conclusively presumed by the parties so as to avoid any disputes under
this Section 4.2 that any such hiring within such 6 month period is in
violation of clause (1) above).
4.3. Certain Tax Matters.
(a) Tax Returns. ▇▇▇▇▇▇ shall prepare or cause to be prepared in a manner
consistent with past practice (unless otherwise required to comply with
applicable law) and timely file or cause to be filed with the appropriate
taxing authorities all Tax Returns of MBSK required to be filed for all taxable
years or periods ending on, before or after the Closing Date and with respect to
the tax matters described in Section 1.5.
(b) Cooperation Regarding Tax Matters. The parties hereto shall provide
such necessary information as any other party hereto may reasonably request in
connection with the preparation of such party's Tax Returns related to the
transactions contemplated by this Agreement, or to respond to or contest any
audit, litigation or other proceeding, prosecute any claim for refund or credit
or otherwise satisfy any legal requirement relating to taxes of each party
hereto or their respective affiliates relating to the transactions contemplated
by this Agreement. Until the expiration of the applicable statute of
limitations and any extensions thereof, ▇▇▇▇▇▇ shall, and shall cause MBSK to,
retain, and neither destroy nor dispose of, all Tax Returns, books and records
(including computer files) of, or with respect to, the activities of MBSK for
all taxable periods ending prior to the Closing Date and to make such books and
records available to ▇▇▇▇▇▇ on a reasonable basis.
4.4. Survey; Title Insurance.
(a) ▇▇▇▇▇▇, at its expense, has delivered to ▇▇▇▇▇▇ a survey (the
"Survey") of the Burlington Facility made by a State of Kansas licensed
surveyor. The Survey shall set forth (i) the boundaries of the Burlington
Facility, (ii) the square footage of and/or acreage of the Burlington Facility,
(iii) all improvements (including the square footage thereof) located on the
Burlington Facility, (iv) any encroachments onto the Burlington Facility and any
encroachments by improvements on the Burlington Facility onto adjoining real
property, and (v) a metes and bounds legal description of the Burlington
Facility.
(b) ▇▇▇▇▇▇, at its expense, has delivered to ▇▇▇▇▇▇ a title search report
for the Burlington Facility from the ▇▇▇▇▇▇ County Land Title Company or its
successor (the "Title Company") bearing a date later than August 10, 1999.
At least ten days before the Effective Time, ▇▇▇▇▇▇, at its expense, shall
deliver to ▇▇▇▇▇▇ a commitment for a leasehold title insurance policy for the
Burlington Purchase Option Lease (the "Title Commitment") bearing a date
after the Closing Date issued by the Title Company in such amount as is agreed
upon by the parties, on its standard ALTA form, and containing extended coverage
over the general exceptions, a 3.0 zoning endorsement, an access endorsement,
and, at Andrew's sole expense, such other endorsements as ▇▇▇▇▇▇ shall
reasonably require. The Title Commitment shall show the leasehold interest
in ▇▇▇▇▇▇ in the condition required herein as of the Effective Time, as the case
may be. ▇▇▇▇▇▇ shall cause to be issued to ▇▇▇▇▇▇ an updated Title Commitment
not later than 1 day prior to the Effective Time, and at the Effective Time, a
policy of the required title insurance (the "Title Policy") pursuant to the
Title Commitment, all at ▇▇▇▇▇▇'▇ expense.
4.5. Prorations. In order to facilitate the allocation of certain
ongoing expenses and liabilities of MBSK related solely to the Burlington
Facility (e.g., utilities), ▇▇▇▇▇▇ shall pay to ▇▇▇▇▇▇ within 30 days after the
Closing an amount in cash equal to the net pro rata portion of all accruing
expenses and liabilities ("Accrual Liabilities") listed on Schedule 4.5, which
are incurred in the ordinary course of business by MBSK for the billing period
prior to the Closing Date based on the amounts of such expenses incurred during
the billing period immediately prior to the billing period in which the Closing
Date occurs. Such payment by ▇▇▇▇▇▇ shall fully discharge ▇▇▇▇▇▇'▇ liability
for the Accrual Liabilities.
4.6. Burlington Purchase Option Lease. As soon as reasonably practicable
after the Closing, but in any event no later than May 31, 2000, ▇▇▇▇▇▇, at its
expense, shall use its reasonable best efforts to (a) cause the Burlington
Purchase Option Lease to be duly authorized and approved by ▇▇▇▇▇▇ County in
accordance with Section 19-211 and any other applicable legal requirements, and
(b) cause the assignment of the Burlington Purchase Option Lease from MBSK to
▇▇▇▇▇▇ to be duly authorized and approved by ▇▇▇▇▇▇ County in accordance with
any applicable legal requirements. At the Effective Time, ▇▇▇▇▇▇ agrees to
duly assign and transfer all of its right, title and interest in and to the
Burlington Purchase Option Lease to ▇▇▇▇▇▇, on the term and subject to the
conditions of this Agreement. ▇▇▇▇▇▇ will reasonably cooperate with ▇▇▇▇▇▇'▇
efforts toward causing the authorization, approval and assignment to ▇▇▇▇▇▇ of
the Burlington Purchase Option Lease.
4.7. Bulk Transfer Laws. The parties agree to waive compliance with the
requirements of any applicable bulk sales law provisions of the uniform
commercial codes of the states in which the Acquired Assets are situated or
which may otherwise be applicable to the transactions contemplated hereby;
provided, however, that ▇▇▇▇▇▇ shall be liable for and shall pay and discharge
any amount (including Taxes) owed under or as a result of such laws, whether as
a result of waiving such compliance or otherwise.
4.8. Employees and Employee Benefit Plans.
(a) ▇▇▇▇▇▇ shall extend offers of employment, to be effective immediately
upon the Closing, to all current employees of MBSK, except ▇▇▇▇ ▇▇▇▇▇▇▇▇ and
▇▇▇▇ ▇▇▇▇, (such employees who accept such offers of employment are hereinafter
referred to as "Rehired Employees"); provided, however, that any such offer
of employment shall not be construed to limit the ability of ▇▇▇▇▇▇ to terminate
any such employee following the Closing Date for any reason at any time. MBSK
shall terminate the employment of all Rehired Employees immediately prior to the
Closing and any cost, expense or liability resulting from, or incurred in
connection with, such terminations accrued on or prior to the Closing Date,
shall be the sole responsibility of ▇▇▇▇▇▇.
(b) ▇▇▇▇▇▇ agrees that service with MBSK by each Rehired Employee prior to
the Closing Date shall be treated as service with ▇▇▇▇▇▇ for purposes of
determining such employee's eligibility for and determining the amount of
benefit entitlement for holidays, sick days, vacations and also for purposes
of determining eligibility (including waiting periods under group health plans),
vesting and benefits provided under any other employee benefit plan, program,
policy or other arrangement of ▇▇▇▇▇▇ covering such Rehired Employee after the
Closing Date; provided, however, that such crediting of service shall not
operate to duplicate any benefit or the funding of any such benefit for any
such period of service and shall be granted to Rehired Employees only
to the extent permissible under the applicable plan of ▇▇▇▇▇▇.
(c) With respect to the 401(k) plan of ▇▇▇▇▇▇, the parties hereto agree
that MBSK shall offer each employee of MBSK on the date hereof the option to
(i) transfer his or her 401(k) account to an Individual Retirement Account;
(ii) take a lump sum distribution of such account or (iii) take a lump sum
distribution of such account and roll the distribution to Andrew's 401(k) plan.
(d) ▇▇▇▇▇▇ shall provide COBRA health insurance coverage to the Rehired
Employees until January 1, 2000; provided, however, that, during the above time
period, ▇▇▇▇▇▇ shall fully reimburse ▇▇▇▇▇▇ for all out-of-pocket expenses
incurred by ▇▇▇▇▇▇ as a result of providing such COBRA health insurance to the
Rehired Employees who are not covered by Andrew's own health coverage plan(s),
including, without limitation, all premiums, claims and third party
administrative and processing fees, notwithstanding any termination of
employment of any Rehired Employee for any reason. The parties acknowledge and
agree that ▇▇▇▇▇▇ ▇▇▇, at its option, enroll the Rehired Employees into its own
health coverage plan(s), in lieu of the above COBRA health insurance coverage,
at any time prior to January 1, 2000. ▇▇▇▇▇▇ shall provide health coverage to
each Rehired Employees under its health plan(s) no later than January 1, 2000,
provided that each Rehired Employee elects such coverage in accordance with
Andrew's normal election procedures, with no liability to ▇▇▇▇▇▇ whatsoever.
4.9. Legal Opinion for Burlington Purchase Option Lease. Prior to the
Effective Time, ▇▇▇▇▇▇ agrees to use its reasonable efforts to obtain an opinion
of legal counsel to ▇▇▇▇▇▇ County, upon which ▇▇▇▇▇▇ ▇▇▇ rely upon, as to due
authorization, execution and delivery and validity of the Burlington Purchase
Option Lease.
4.10. MBSK Work-in-Progress. For period not to exceed 45 days after the
Closing Date, ▇▇▇▇▇▇ agrees to provide ▇▇▇▇▇▇ reasonable access during normal
business hours to the Burlington Facility, its employees, equipment and raw
materials for the purposes of completing the production and shipment of the
approximately ten shelters of MBSK that are in-process. In completing such
production and shipment, ▇▇▇▇▇▇ will not unreasonably interfere with Andrew's
operations at the Burlington Facility, will complete such production and
shipment as soon as reasonably practicable and will reimburse ▇▇▇▇▇▇ for its
costs, including labor, as mutually agreed among the parties.
ARTICLE V.
CONDITIONS PRECEDENT
5.1. Conditions to Each Party's Obligation To Effect the Transactions. The
respective obligation of each party to consummate the Closing or the subsequent
assignment and transfer of the Burlington Purchase Option Lease shall be subject
to the satisfaction at or prior to the Closing or the Effective Time, as the
case may be, of the following conditions:
(a) No Proceedings, Injunctions or Restraints; Illegality. No Action by
any governmental authority or other third person or entity shall have been
commenced that challenges the validity or legality of the transactions
contemplated by this Agreement. No judgment, order, injunction or decree issued
by any governmental authority or other legal restraint or prohibition preventing
the consummation of the transactions contemplated by this Agreement shall be in
effect. No law, statute, rule, regulation, order, injunction or decree shall
have been enacted, entered, promulgated or enforced by any governmental
authority which prohibits, materially restricts or makes illegal the
consummation of the transactions contemplated by this Agreement.
5.2. Conditions to Obligations of ▇▇▇▇▇▇ to the Closing. The obligation of
▇▇▇▇▇▇ to effect the Closing is also subject to the satisfaction of or waiver by
▇▇▇▇▇▇ at or prior to the Closing of the following conditions:
(a) Representations and Warranties. The representations and warranties
of ▇▇▇▇▇▇ set forth in this Agreement that are qualified with reference to a
Material Adverse Effect or materiality shall be true and correct, and the
representations and warranties of ▇▇▇▇▇▇ that are not so qualified shall be
true and correct in all material respects, in each case as of the date of this
Agreement (except to the extent such representations and warranties speak as of
an earlier date).
(b) Performance of Obligations of MBSK/▇▇▇▇▇▇. ▇▇▇▇▇▇ and MBSK shall have
performed in all material respects all its obligations required to be performed
by it under this Agreement at or prior to the Closing.
(c) Legal Opinion; Closing Certificates and Documents. ▇▇▇▇▇▇ shall have
received from Much Shelist Freed ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, P.C., counsel to
MBSK, an opinion as to due authorization, execution and delivery of MBSK, in a
form mutually agreed upon by counsel to the parties. In addition, ▇▇▇▇▇▇ shall
provide ▇▇▇▇▇▇ with such customary closing documents and certificates as ▇▇▇▇▇▇
or its counsel shall reasonably request.
(d) Transfer of Revised Burlington Lease. ▇▇▇▇▇▇ County shall have duly
consented to the assignment and transfer of the Revised Burlington Lease from
MBSK to ▇▇▇▇▇▇ in a form reasonably acceptable to ▇▇▇▇▇▇.
(e) Material Adverse Change. There shall not have occurred any Material
Adverse Effect on the Acquired Assets or the Burlington Facility.
(f) Raw Materials. ▇▇▇▇▇▇ shall be satisfied that the Raw Materials
located at the Burlington Facility on the Closing Date have a net book value of
approximately $380,000 or more.
5.3. Conditions to Obligations of ▇▇▇▇▇▇ and MBSK to the Closing. The
obligation of ▇▇▇▇▇▇ and MBSK to effect the Closing is also subject to the
satisfaction of or waiver by ▇▇▇▇▇▇ and MBSK at or prior to the Closing of the
following conditions:
(a) Representations and Warranties. The representations and warranties of
▇▇▇▇▇▇ set forth in this Agreement that are qualified with a reference to a
Material Adverse Effect or materiality shall be true and correct, and the
representations and warranties of ▇▇▇▇▇▇ that are not so qualified shall be
true and correct in all material respects, in each case, as of the date of this
Agreement (except to the extent such representations and warranties speak as of
an earlier date).
(b) Performance of Obligations of ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Closing.
(c) Legal Opinion; Closing Certificates and Documents. ▇▇▇▇▇▇ shall have
received from ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇, counsel to ▇▇▇▇▇▇, an opinion as to due
authorization, execution and delivery of ▇▇▇▇▇▇, in a form mutually agreed upon
by counsel to the parties. In addition, ▇▇▇▇▇▇ shall provide ▇▇▇▇▇▇ with such
customary closing documents and certificates as ▇▇▇▇▇▇ or its counsel shall
reasonably request.
5.4. Conditions to Obligations of ▇▇▇▇▇▇ with respect the Burlington
Purchase Option Lease. The obligation of ▇▇▇▇▇▇ to effect the assignment and
transfer of the Burlington Purchase Option Lease is also subject to the
satisfaction of or waiver by ▇▇▇▇▇▇ at or prior to the Effective Time of the
following conditions:
(a) Closing. The Closing shall have occurred.
(b) Representations and Warranties. The representations and warranties of
▇▇▇▇▇▇ set forth in Sections 2.1, 2.2, 2.4, 2.12, 2.18, 2.19 of this Agreement
that are qualified with reference to a Material Adverse Effect or materiality
shall be true and correct, and the representations and warranties of ▇▇▇▇▇▇ that
are not so qualified shall be true and correct in all material respects, in each
case as of the Effective Time (except to the extent such representations and
warranties speak as of an earlier date).
(c) Performance of Obligations of MBSK/▇▇▇▇▇▇. ▇▇▇▇▇▇ and MBSK shall have
performed in all material respects all its obligations required to be performed
by it under this Agreement at or prior to the Effective Time.
(d) Closing Certificates and Documents. ▇▇▇▇▇▇ shall provide ▇▇▇▇▇▇ with
such customary closing documents and certificates as ▇▇▇▇▇▇ or its counsel shall
reasonably request.
(e) Approval and Transfer of Burlington Purchase Option Lease. On or
before May 31, 2000, ▇▇▇▇▇▇ County shall have duly authorized and approved the
Burlington Purchase Option Lease in accordance with Section 19-211 and
applicable law, and ▇▇▇▇▇▇ County shall have duly consented to the assignment
and transfer of the Burlington Purchase Burlington Lease from MBSK to ▇▇▇▇▇▇ in
a form reasonably acceptable to ▇▇▇▇▇▇. In addition, the Burlington Purchase
Option Lease shall be in full force and effect.
5.5. Conditions to Obligations of ▇▇▇▇▇▇ and MBSK with respect the
Burlington Purchase Option Lease. The obligation of MBSK and ▇▇▇▇▇▇ to
effect the assignment and transfer of the Burlington Purchase Option Lease is
also subject to the satisfaction of or waiver by MBSK and ▇▇▇▇▇▇ at or prior
to the Effective Time of the following conditions:
(a) Closing. The Closing shall have occurred.
(b) Representations and Warranties. The representations and warranties
of ▇▇▇▇▇▇ set forth in Sections 3.1, 3.2, 3.3, 3.4 and 3.5 of this Agreement
that are qualified with a reference to a Material Adverse Effect or materiality
shall be true and correct, and the representations and warranties of ▇▇▇▇▇▇
that are not so qualified shall be true and correct in all material respects, in
each case, as of the Effective Time (except to the extent such representations
and warranties speak as of an earlier date).
(c) Performance of Obligations of ▇▇▇▇▇▇. ▇▇▇▇▇▇ shall have performed in
all material respects all obligations required to be performed by it under this
Agreement at or prior to the Effective Time.
(d) Approval and Transfer of Burlington Purchase Option Lease. ▇▇▇▇▇▇
County shall have duly authorized and approved the Burlington Purchase Option
Lease in accordance with Section 19-211 and applicable law, and ▇▇▇▇▇▇ County
shall have duly consented to the assignment and transfer of the Burlington
Purchase Burlington Lease from MBSK to ▇▇▇▇▇▇. In addition, the Burlington
Purchase Option Lease shall be in full force and effect.
ARTICLE VI.
INDEMNIFICATION
6.1. Indemnification by ▇▇▇▇▇▇.
(a) On the terms and subject to the conditions of this Agreement, ▇▇▇▇▇▇
shall indemnify and hold harmless ▇▇▇▇▇▇ and its affiliates, and their
respective stockholders, officers, directors, employees and agents
(collectively, the "▇▇▇▇▇▇ Indemnitees"), from and against, and will pay them
the amount of, any and all losses, costs, claims, liabilities, damages,
penalties and expenses (including reasonable attorneys' and auditors' fees and
the costs of investigation and defense) (collectively, the "Losses"), incurred
or suffered by the ▇▇▇▇▇▇ Indemnitees relating to or arising out of or in
connection with any of the following: (i) any breach or inaccuracy as of the
Closing Date or Effective Time in any representation or warranty made by ▇▇▇▇▇▇
in this Agreement (except Section 2.12 (commissions)) or any Ancillary Document;
(ii) any breach or nonfulfillment by ▇▇▇▇▇▇ or MBSK of any of its covenants, or
agreements or other obligations in this Agreement or any Ancillary Document;
(iii) any breach or inaccuracy of the representations and warranties contain in
Section 2.12(commissions); (iv) any claims or liabilities relating to periods
prior to the Closing Date with respect to any Employee Benefit Plan or any
termination of any employee benefits or Employee Benefit Plan or the termination
of employment of any employee of the MBSK prior to the Closing Date; and (v) any
claims relating to ▇▇▇▇▇▇'▇ or MBSK's ownership, use or operation of the
Acquired Assets or the Burlington Facility and any product manufactured or
service provided by ▇▇▇▇▇▇ or MBSK prior to the Closing at the Burlington
Facility, including, claims of injuries to persons or property, product
liability, warranty claims (whether arising under contract or tort law), and
recalls of products ordered by governmental authorities. For the purpose of
calculating the aggregate amount of Losses incurred or suffered by the ▇▇▇▇▇▇
Indemnitees, the representations and warranties contained in Sections 2.4(b),
2.4(c), 2.8, 2.9 and 2.15 will be read without regard to any "knowledge"
qualifier in any such representations or warranties.
(b) Notwithstanding anything to the contrary contained in this Article VI,
no claim or claims shall be made for payment by ▇▇▇▇▇▇ pursuant to Section
6.1(a)(i) above, unless and until the aggregate amount of all claims for payment
by ▇▇▇▇▇▇ pursuant to this Section 6.1 (excluding claims based on Sections
6.1(a)(ii), (iii), (iv) and (v)) exceeds $50,000, whereupon all such claims for
payment by ▇▇▇▇▇▇ pursuant to Section 6.1(a)(i) above such amount may be
asserted and pursued; provided, however, that in respect to the second to the
last sentence in Section 2.14, no claim or claims shall be made for payment by
▇▇▇▇▇▇ pursuant to Section 6.1(a)(i) above, unless and until the aggregate
amount of all claims for payment by ▇▇▇▇▇▇ in respect to the second to the last
sentence in Section 2.14 exceeds $25,000, whereupon all such claims for payment
by ▇▇▇▇▇▇ in respect to the second to the last sentence in Section 2.14 above
such amount may be asserted and pursued in accordance with the terms of this
Agreement.
6.2. Indemnification by ▇▇▇▇▇▇.
(a) On the terms and subject to the conditions of this Agreement, ▇▇▇▇▇▇
shall indemnify and hold harmless ▇▇▇▇▇▇ and its affiliates, and their
respective stockholders, officers, directors, employees and agents
(collectively, the "▇▇▇▇▇▇ Indemnitees"), from and against, and will pay them
the amount of, any and all Losses, incurred or suffered by the ▇▇▇▇▇▇
Indemnitees relating to or arising out of or in connection with any of the
following: (i) any breach or inaccuracy as of the Closing Date or Effective
Time in any representation or warranty made by ▇▇▇▇▇▇ in this Agreement (except
Section 3.3(commissions)) or any Ancillary Document; (ii) any breach or
nonfulfillment by ▇▇▇▇▇▇ of any of its covenants, or agreements or other
obligations in this Agreement or any Ancillary Document; (iii) any breach or
inaccuracy of the representations and warranties contain in Section 3.3
(commissions); (iv) any claims or liabilities relating to periods after the
Closing Date with respect to any Employee Benefit Plan of ▇▇▇▇▇▇ or any
termination of any employee benefits or Employee Benefit Plan of ▇▇▇▇▇▇ or the
termination of employment of any employee by ▇▇▇▇▇▇ who was an employee of MBSK
prior to the Closing Date which takes place after the Closing Date; and (v)
any claims relating to Andrew's ownership, use or operation of the Burlington
Facility and any product manufactured or service provided by ▇▇▇▇▇▇ at the
Burlington Facility after the Closing, including, claims of injuries to persons
or property, product liability, warranty claims (whether arising under contract
or tort law), and recalls of products ordered by governmental authorities.
(b) Notwithstanding anything to the contrary contained in this Article VI,
no claim or claims shall be made for payment by ▇▇▇▇▇▇ pursuant to Section
6.2(a)(i) above, unless and until the aggregate amount of all claims for payment
by ▇▇▇▇▇▇ pursuant to this Section 6.2 (excluding claims based on Sections
6.2(a)(ii), (iii) and (v)) exceeds $50,000, whereupon all such claims for
payment by ▇▇▇▇▇▇ pursuant to Section 6.2(a)(i) above such amount may be
asserted and pursued.
6.3. Claims. If a claim for indemnification is to be made by an
indemnified party, the indemnified party shall promptly give notice to the
indemnifying party of such claim, including the amount the indemnified party
will be entitled to receive hereunder from the indemnifying party; provided,
however, that the failure of the indemnified party to promptly give notice shall
not relieve the indemnifying party of its obligations under this Article VI,
except to the extent of actual prejudice to the indemnifying party. If the
indemnifying party does not object in writing to such claim within 20 days
after receiving notice thereof, the indemnified party shall be entitled to
recover, on the 21st day after such notice was given, from the indemnifying
party the amount of such claim, and no later objection by indemnifying party
shall be permitted or effective. If the indemnifying party agrees that it has
an indemnification obligation under this Article VI with respect to such claim,
but timely objects as to the amount of such claim, the indemnified party
shall nevertheless be entitled to recover, on the 21st day after such notice
was given, from the indemnifying party the undisputed lesser or liquidated
amount of such claim, without prejudice to the indemnified party's claim for
the difference. In addition to the amounts recoverable by the indemnified
party from the indemnifying party pursuant to this Article VI, the indemnified
party shall also be entitled to recover from indemnifying party interest on
such amounts at the rate of 10% per annum from, and including, the 21st day
after such notice of an indemnification claim is given, but not including the
date such recovery is actually made by the indemnified party.
6.4. Survival. All representations, warranties, covenants and agreements
contained in this Agreement and the Ancillary Documents shall survive the
Closing and shall be deemed to have been relied upon and shall not be affected
in any respect by the Closing, any investigation conducted by any party or by
any information which any party may receive. Notwithstanding the foregoing
provision, the representations and warranties contained in this Agreement (other
than Sections 2.9(taxes) and 2.14(title)(as to title only) and 2.15
(environmental)) and Ancillary Documents shall terminate one year after the
Effective Time; the representations and warranties contained in Sections 2.9
(taxes) shall survive until the expiration of the applicable statute of
limitations; the representations and warranties contained in Sections 2.15
(environmental) shall survive for a period of three years after the Closing
Date.; and the representations and warranties in Section 2.14(title)(as to title
only) shall survive without limitation as to time.
ARTICLE VII.
TERMINATION AND AMENDMENT
7.1. Termination. At any time before the Closing, this Agreement may be
terminated (a) by mutual written consent of the parties; (b) by either ▇▇▇▇▇▇ or
▇▇▇▇▇▇ (provided that the terminating party is not then in material breach of
any representation, warranty, covenant or other agreement contained herein),
if there shall have been a material breach of any of the representations or
warranties or any of the covenants or agreements set forth in this Agreement
on the part of the other party, which breach is not cured within 15 days
following written notice to the party committing such breach, or which breach,
by its nature or timing, cannot be cured prior to September 30, 1999; or (c)
by ▇▇▇▇▇▇ or ▇▇▇▇▇▇, if the Closing shall not occur on or before September 30,
1999, unless the failure of the Closing to occur by such date shall be due to
the action or failure to act of the party seeking to terminate this Agreement,
which action or fail ure to act constitutes a breach of this Agreement.
7.2. Effect of Termination. In the event of the termination of this
Agreement pursuant to Section 7.1, written notice thereof shall forthwith be
given to the other party specifying the provision hereof pursuant to which
such termination is made, and this Agreement shall forthwith become null and
void and of no further force or effect, and no party (or any of its affiliates,
directors, officers, agents or representatives) shall have any liability or
obligation hereunder (except for any liability of any party then in breach);
provided, however, that the provisions of Sections 8.2 (notice) and 8.6
(expenses) shall survive any such termination.
ARTICLE VIII.
MISCELLANEOUS
8.1. Assignment; No Third Parties. Neither this Agreement nor any of the
rights, interests or obligations set forth herein shall be assigned by either of
the parties (whether by operation of law or otherwise) without the prior written
consent of the other party. This Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective successors
and permitted assigns. This Agreement and the Ancillary Documents (including
the disclosure schedules, exhibits, documents and instruments referred to
herein) are not intended to confer upon any person or entity other than the
parties any rights or remedies hereunder.
8.2. Notices. All notices, requests, demands and other communications that
are required or may be given under this Agreement shall be in writing and shall
be deemed to have been duly given when received, if personally delivered; when
transmitted, if transmitted, by telecopy; the next business day after it is
sent, if sent for next day delivery to a domestic address by recognized
overnight delivery service (e.g., Federal Express); and upon receipt, if sent by
certified or registered mail, return receipt requested. In each case notice
shall be sent to:
If to ▇▇▇▇▇▇,
addressed to: ▇▇▇▇▇▇ Building Systems, Inc.
58120 C.R. ▇ ▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇/▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: Much Shelist Freed ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
If to any ▇▇▇▇▇▇,
addressed to: ▇▇▇▇▇▇ Corporation
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Attorney, Legal Department
Fax No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇, Carton & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Fax No: ▇▇▇-▇▇▇-▇▇▇▇
or to such other place and with such other copy as either party may designate
as to itself by written notice to the others, which notice shall be effective
only upon receipt.
8.3. Choice of Law. This Agreement shall be construed, interpreted and the
rights of the parties determined in accordance with the laws of the State of
Illinois (without reference to the choice of law provisions).
8.4. Entire Agreement; Amendments and Waivers. This Agreement and the
Ancillary Documents, together with all exhibits and schedules hereto and
thereto, constitute the entire agreement between the parties pertaining to the
subject matter hereof and supersede all prior agreements, understandings,
negotiations and discussions, whether oral or written, of the parties. This
Agreement may not be amended except by an instrument in writing signed on behalf
of each of the parties. No amendment, supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby. No waiver of any of the provisions of this Agreement shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
8.5. Counterparts; Facsimile. This Agreement may be executed and delivered
in counterparts, all of which shall be considered one and the same agreement.
This Agreement may be executed and delivered by facsimile transmission, and a
facsimile of this Agreement or of a signature of a party thereto shall be as
effective as an original.
8.6. Expenses. Except as set forth in Article VI, and regardless of
whether the Closing shall occur, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby shall be paid by
the party incurring such costs and expenses.
8.7. Invalidity. In the event that any one or more of the provisions
contained in this Agreement or the Ancillary Documents for any reason, be held
to be invalid, illegal or unenforceable in any respect, then to the maximum
extent permitted by law, such invalidity, illegality or unenforceability shall
not affect any other provision of this Agreement or Ancillary Documents.
8.8. Publicity. Except as otherwise required by applicable law or the
rules of The Nasdaq Stock Market, Inc., National Market, neither ▇▇▇▇▇▇ nor
▇▇▇▇▇▇ shall, or shall permit any of their respective affiliates to, issue or
cause the publication of any press release or other public announcement with
respect to, or otherwise make any public statement concerning, the transactions
contemplated by this Agreement without the prior consent of the other party,
which consent shall not be unreasonably withheld.
8.9. Knowledge. As used in this Agreement, "knowledge" or "awareness" of
any entity means the actual knowledge or awareness of such entity's officers.
8.10. Construction. The parties have participated jointly in the
negotiation and drafting of this Agreement and the Ancillary Documents. In the
event an ambiguity or question of intent or interpretation arises, this
Agreement and Ancillary Documents shall be construed as if drafted jointly by
the parties and no presumptions or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any of the provisions of
this Agreement or the Ancillary Documents. Any reference to any federal, state,
county, local or foreign law or statute shall be deemed also to refer to all
rules and regulations promulgated thereunder, unless the context requires
otherwise.
8.11. Interpretation. When a reference is made in this Agreement to
sections, schedules or exhibits, such reference shall be to a section of or
schedule or exhibit to this Agreement unless otherwise indicated. The headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of this Agreement. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed to be followed by the words "without limitation." No provision of this
Agreement or the Ancillary Documents shall be construed to require ▇▇▇▇▇▇ or
▇▇▇▇▇▇ or any of their respective affiliates to take any action which would
violate any applicable law, rule or regulation.
8.12. Cumulative Remedies. All rights and remedies of either party are
cumulative of each other and of every other right or remedy such party may
otherwise have at law or in equity, and the exercise of one or more rights or
remedies shall not prejudice or impair the concurrent or subsequent exercise
of other rights or remedies.
8.13. Confidentiality. For a period of two years after the date of this
Agreement, ▇▇▇▇▇▇ and ▇▇▇▇▇▇ shall maintain in confidence, and shall cause their
respective directors, officers, employees, agents and advisors to maintain in
confidence, any confidential or proprietary information obtained from the other
party in connection with this Agreement unless (a) such information is already
known to such party or to others not bound by a duty of confidentiality or such
information becomes publicly available through no fault of such party, (b) the
use of such information is necessary or appropriate in making any filing or
obtaining any consent or approval required pursuant to the terms of this
Agreement or (c) the furnishing or use of such information is necessary or
appropriate in connection with any law, regulation or legal proceedings. If the
transactions contemplated by this Agreement are not consummated, each party will
return or destroy any such information as the other party may request.
[SIGNATURE PAGE FOLLOWS]
[THE NEXT PAGE IS PAGE NUMBER 26]
IN WITNESS WHEREOF, ▇▇▇▇▇▇, ▇▇▇▇▇▇ and MBSK have caused this ASSET
PURCHASE AGREEMENT to be duly executed as of the date first above written.
▇▇▇▇▇▇ CORPORATION ▇▇▇▇▇▇ BUILDING SYSTEMS, INC.
By: \▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ By: \▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Group President Title: Secretary/Treasurer
▇▇▇▇▇▇ BUILDING SYSTEMS OF KANSAS, INC.
By: \▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Secretary/Treasurer
Allocation Schedule
[Intentionally Omitted]
Schedule 4.5
Monthly Expenses to be Pro Rated
1. Electricity
2. Water
3. Gas
4. Telephone
5. Garbage disposal
6. Cleaning Service
7. Revised Burlington Lease Rental
8. Health Insurance Claims, Premiums and Fees
9. Payroll Taxes
Schedule 1.3
Assumed Contracts
1. Equipment Lease Agreement dated November 27, 1996 between ▇▇▇▇▇▇ and GE
Capital.
2. Smart Business Lease dated December 28, 1996 between ▇▇▇▇▇▇ and Pitney
▇▇▇▇▇ Credit.
3. Contract dated August 1, 1999 between ▇▇▇▇▇▇ and Jem LP Gas.
Schedule 2.13
ERISA
1. 401(k) plan
2. Medical insurance
3. Life insurance
4. Long-term disability
Schedule 2.14
Fixed Assets
[See Attached List]
Schedule 2.18 B
Form of Burlington Purchase Option Lease
LEASE AGREEMENT
This Lease Agreement ("Lease") is entered into on this __16th__ day of
August, 1999, between, Board of County Commissioners of ▇▇▇▇▇▇ County, Kansas
(County) and ▇▇▇▇▇▇ Building Systems of Kansas, Inc. (▇▇▇▇▇▇), of Elkhart,
Indiana. In consideration of the mutual covenants, representations, warranties
and agreements contained herein, the parties agree as follows:
1. Lease of Property. ▇▇▇▇▇▇ wishes to lease, and County desires to
lease a certain tract of real property, referred to hereinafter as "Property"
and more fully described in the legal description set forth in Exhibit A
attached hereto and incorporated herein by reference.
2. Representations and Covenants by County. County makes the
following representations and covenants as the basis for the undertaking of its
part of the Lease contained herein:
A. That ▇▇▇▇▇▇ County is a county governmental unit
existing under and pursuant to the laws and constitution
of the State of Kansas. Under the statutes of the State
of Kansas, County has the power to enter into and
perform the transactions contemplated by this Lease
and to carry out its obligations hereunder.
B. That County has fee simple title to the Property subject
only to easements and restrictions of record and
apparent, none of which will interfere with or prevent
▇▇▇▇▇▇'▇ use of the property as a manufacturing facility.
C. County 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 property
leased hereunder, except for and subject to the Lease as
set forth in this instant document and that certain lease
with ▇▇▇▇▇▇ dated the _____day of August, 1999.
D. Except as otherwise provided herein, County will not
during the basic term of this Lease, 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 Property
leased herein.
E. County has duly authorized the execution of this Lease
pursuant to a formal action of the Board of County
Commissioners, ▇▇▇▇▇▇ County, Kansas.
3. Representations and Covenants by ▇▇▇▇▇▇. ▇▇▇▇▇▇ makes the
following representations and covenants as the basis for undertaking its part
of the Lease contained herein.
▇. ▇▇▇▇▇▇ is a duly qualified and existing corporation under
the laws of the State of Kansas and will be duly
authorized and qualified to do business in the State of
Kansas prior to the commencement date of this Lease,
with lawful power and authority to enter into this Lease,
acting by and through its duly authorized officers and
has received its authority by its Board of Directors and
officers to authorize ▇▇▇▇▇▇ ▇▇▇▇▇, President, to sign
this Lease.
▇. ▇▇▇▇▇▇ shall:
(1) maintain and preserve its existence and
organization as a corporation and its authority to do
business in the State of Kansas; and
(2) not initiate any proceedings of any kind
whatsoever to dissolve or liquidate without first
securing the prior written consent of County and making
provision for the payment in full of the basic rent and to
comply with all other obligations for this Lease as they
apply.
C. Neither the execution or delivery of this Lease, the
consummation of the transaction contemplated herein,
nor the fulfillment of or compliance with the terms and
conditions of this Lease contravenes any provisions of
▇▇▇▇▇▇'▇ Articles of Incorporations or Bylaws, nor does
anything contained herein conflict with or result in a
breach of the terms, conditions or provisions of any
mortgage, debt, agreement, indenture, or instrument to
which ▇▇▇▇▇▇ is a party or by which ▇▇▇▇▇▇ is bound, or to
which ▇▇▇▇▇▇ or any of the properties of ▇▇▇▇▇▇ is
subject, or would constitute a default (without regard to
any required notice or the passage of any period of time)
under any of the following, or would result in a creation
or imposition of any lien, charge or encumbrance,
whatsoever, upon any of the property or assets of ▇▇▇▇▇▇
under the terms of any mortgage, debt, agreement,
indenture or instrument, or violate any existing law,
administrative regulation or court order including
consent decrees to which ▇▇▇▇▇▇ is subject.
D. This Lease constitutes a valid and legal binding
obligation on ▇▇▇▇▇▇ enforceable in accordance with its
terms.
E. That ▇▇▇▇▇▇ has obtained or will obtain if it becomes
necessary in the future, any and all permits,
authorizations, licenses and franchises to enable ▇▇▇▇▇▇
to operate and utilize the property for the purposes for
which the property is being leased to ▇▇▇▇▇▇ under the
terms of this Lease and that ▇▇▇▇▇▇ will operate in
accordance with all local, state and federal laws to
insure compliance with any licensing, permit,
authorization or franchise requirement.
4. Term. The initial term of this Lease shall be five (5) years
commencing on the effective date and ending five (5) year from the date of the
lease. As used herein the expression "term hereof" refers to this initial term.
5. Basic Rent. County reserves and ▇▇▇▇▇▇ agrees to pay in the manner
herein after specified to County without demand, the rent on the property in the
amount of $100,000 the term of this Lease. The payments shall be made at the
rate of Two Thousand Five Hundred and 00/100 Dollars ($2500.00) per month for
sixty (60) months. Rent shall be paid to County in advance on the first day of
the month in which the rent shall become due without deduction or offset at a
place or places as may be designated from time to time by County. In the event
that ▇▇▇▇▇▇ should fail to make a payment by the fifteenth of any given month,
interest shall attach to the given monthly payment at the rate of 1.5 percent
(1.5%) per month or eighteen percent (18%) per annum. Additionally, as allowed
by law, County reserves the right to advance all payments, including balloon
payments, due in the event that ▇▇▇▇▇▇ should fail or refuse to make payment
under the terms of this Lease within thirty (30) days after a given payment is
due. Further, County reserves the right to waive any one payment, without
being subject to or stopped from enforcing these remedies should a future
monthly payment be delayed for more than thirty (30) days. In other words, if
County does not instigate advancement and liquidation of this Lease in a month
in which ▇▇▇▇▇▇ is more than thirty (30) days late, this does not preclude
County from asserting the same rights as to a future month. This right to
advance payments should ▇▇▇▇▇▇ be more than Thirty (30) days late shall not be
implicitly waived by the County, unless both parties agree to a waiver of this
provision in writing. This paragraph shall be governed by sections 27 and 28
of this Lease.
6. Building Purchase. During the term hereof, ▇▇▇▇▇▇ shall have the
option to purchase the Property (the "Option"). This purchase Option will be
contingent upon the County complying with Kansas law for such a purchase,
including K.S.A. 19-211. Upon successful completion of the requirements of
Kansas law and K.S.A. 19-211, (the "Statutory Requirements") and if ▇▇▇▇▇▇ is
the successful bidder, ▇▇▇▇▇▇ shall have the option to pay the County the sum
of One Hundred Seventy-Five Thousand an 00/100 Dollars ($175,000.00) hereinafter
referred to as the Balloon Payment and accept ownership of the Property. If
▇▇▇▇▇▇ tenders the Balloon Payment, County shall deed the property to ▇▇▇▇▇▇ in
Fee Simple by Warranty Deed subject only to easements and restrictions of record
as of the date hereof and free and clear of all liens and encumbrances (except
as caused or permitted by ▇▇▇▇▇▇). Provided ▇▇▇▇▇▇ declines to take ownership
of the property, any subsequent lease between the parties shall be at fair
market value rate. The Balloon Payment shall be reduced by Full-Time Employee
Reduction (FTE) in accordance with a yearly FTE schedule as shown herein. The
Balloon Payment shall be divided into five (5) parts of $35,000.00 for each
year, however, payment will be due only at the conclusion of the initial term.
For each given year, the payment due shall be reduced as provided herein. In
other words, for each year that the FTE is met in full, a $35,000.00 reduction
shall be made to the Balloon Payment. If the entire FTE number is not met such
representative portion of the Balloon Payment for that given year shall be
reduced by the applicable percentage. The FTE reductions shall be computed
by taking the total number of hours worked (includes paid holiday, vacation,
personal days and sick days) at the property by employees of ▇▇▇▇▇▇ during the
preceding twelve months and dividing by two thousand eight (2,080). The FTE
shall be computed on the anniversary date of this Lease being executed and
binding in accordance with the Statutory Requirements (the "Effective Date"),
and computed for the preceding twelve months. ▇▇▇▇▇▇ shall submit to County a
certified statement of employment not more than thirty days after the
anniversary date of the Effective Date of this Lease. The statement shall be
provided to County by ▇▇▇▇▇▇ and shall be certified by an independent accounting
firm authorized to make such certification for ▇▇▇▇▇▇ in accordance with the
Generally Accepted Rules of Accounting to the extent they apply. The FTE shall
be as follows:
Reduction 100% 90% 80% 70% 60%
Year Concluding FTE FTE FTE FTE FTE
1st year ▇▇ ▇▇-▇▇ ▇▇-▇▇ 8-9 6-7
2nd year ▇▇ ▇▇-▇▇ ▇▇-▇▇ ▇▇-▇▇ ▇▇-▇▇
3rd year ▇▇ ▇▇-▇▇ ▇▇-▇▇ ▇▇-▇▇ ▇▇-▇▇
4th-5th years ▇▇ ▇▇-▇▇ ▇▇-▇▇ ▇▇-▇▇ ▇▇-▇▇
7. Uses Prohibited. ▇▇▇▇▇▇ shall not use, or permit the
leased premises, or any part thereof, to be used, for any purpose or purposes
other than those allowed by the laws of ▇▇▇▇▇▇ County, the State of Kansas, the
Environmental Protection Agency, or the United States of America and no use
shall be made or permitted to be made of the leased premises, or acts done,
which will cause the cancellation of any insurance policy covering the building
located on the premises, or any part thereof, or any other portion of the leased
premises, any act which may be prohibited by the applicable fire insurance
policies or other terms of insurance hereon. ▇▇▇▇▇▇ shall, at its sole cost,
comply with all requirements, pertaining to the leased premises, of any
insurance organization or company, necessary for the maintenance of insurance,
as herein provided, covering any building or appurtenances at any time located
on the leased premises. ▇▇▇▇▇▇ shall prevent any activity which produces
substantial hazardous waste, emissions or odors in violation of the rules and
regulations of the Environmental Protection Agency and any other local, state,
or federal law and hold County harmless and indemnify County for any violation
of such rules, regulations or laws.
8. Uses Permitted. ▇▇▇▇▇▇ shall use this facility for themanufacture
and shipping of prefabricated buildings and uses associated therewith. Other
uses may be agreed to by the parties, in writing signed by both parties, and
the County's consent thereto will not be unreasonably withheld.
9. General Accident and Liability Insurance. ▇▇▇▇▇▇ shall,
at all times after acceptance of possession of the leased premises under the
terms and conditions as contained herein, and at all times during the term of
the Lease thereafter, at ▇▇▇▇▇▇'▇ sole expense, keep all improvements which are
now or hereafter a part of the premises insured against loss or damage by fire
and the extended coverage hazards for one hundred percent (100%) of the full
replacement value of such improvements as established by yearly review with a
company authorized to do business and authorized to sell insurance in the State
of Kansas, with loss payable to County and ▇▇▇▇▇▇ as their interests may appear.
Any loss adjustment shall require the written consent of both County and ▇▇▇▇▇▇.
The cost of full replacement will be reviewed annually by the parties hereto.
10. Personal Injury Liability Insurance. ▇▇▇▇▇▇ shall maintain in effect
throughout the term of this Lease personal injury liability insurance covering
the leased premises and its appurtenances, sidewalks and parking lot thereon in
an amount not less than the maximum liability of a governmental entity for
claims arising out of a single occurrence as provided by the Kansas Tort Claims
Act or other supplemental laws; which policy shall provide that such insurance
may not be canceled by the issuer thereof without at least thirty (30) days
advance written notice to ▇▇▇▇▇▇ and County. Such insurance shall be maintained
throughout the life of this Lease and will be obtained through a company
authorized to do business in the State of Kansas.
11. County's Right to Pay Premiums On Behalf of ▇▇▇▇▇▇. All of the
policies of insurance referred to in this section shall be written in form
satisfactory to County. ▇▇▇▇▇▇ shall pay all of the premiums therefore during
the term of this Lease and deliver such policies, or certificates thereof, to
County, and in the event of the failure of ▇▇▇▇▇▇, either to effect such
insurance in the names herein called for or to pay the premiums therefore, or
to deliver such policies, or certificates thereof, to County, said action shall
be a default of this Lease and County shall be entitled, but shall have no
obligation, to effect such insurance and pay the premiums therefore, which
premiums shall be repayable to County with the next installment of rent and/or
County may proceed with all available remedies under the default provisions
herein.
12. Cost of Insurance Deemed Additional Rent. The cost of insurance
required to be carried by ▇▇▇▇▇▇ in this section shall be deemed to be
additional rent hereunder. Each insurer mentioned in this section shall agree,
by endorsement on the policy or policies issued by it, or by independent
instrument furnished to County, that it will give to County thirty (30) days
written notice before the policy or policies in question shall be altered or
canceled. County agrees it will not unreasonably withhold its approval as to
the form or to the insurance companies selected by ▇▇▇▇▇▇.
13. Taxes and Assessments. The parties agree that the Property has been
and will continue to be deemed to be exempt from state, county and/or municipal
real property taxes by the Board of Tax Appeals of the State of Kansas. County
agrees to take reasonable action to ensure that the property remains exempt
during the term of this Lease. If the Property shall nevertheless become subject
to real property taxes, then ▇▇▇▇▇▇ shall, during the life of this Lease, bear,
pay and discharge, before the delinquency thereof, any and all taxes and
assessments. In the event any taxes and assessments may be lawfully paid in
installments, ▇▇▇▇▇▇ shall be required to pay only such installment thereof as
becomes due and payable during the life of this Lease, as and when the same
becomes due and payable. County covenants that without ▇▇▇▇▇▇'▇ written consent
it will not, unless required by law, take any action which may reasonably be
construed as tending to cause or induce the levying of any tax or assessment
(other than special assessments levied on account of special benefits or other
taxes or assessments for benefits or service uniformly imposed) which ▇▇▇▇▇▇
would be required to pay under this section and that should any such tax or
assessment be threatened or occur, County shall, at ▇▇▇▇▇▇'▇ request, fully
cooperate with ▇▇▇▇▇▇ in all reasonable ways to prevent any such tax or
assessment. In the event that either the Federal government or the State of
Kansas determines that the demised Property is not exempt from taxation by the
tax guidelines of either agency, because the leased property is not meeting
requirements for non-taxability then and in that event, all tax assessments
shall be the sole and separate liability of ▇▇▇▇▇▇ upon possession by ▇▇▇▇▇▇
as set forth herein.
14. Receipted Statements. Unless ▇▇▇▇▇▇ exercises its right to contest
any tax or assessment in accordance with the following paragraph hereof, ▇▇▇▇▇▇
shall deliver to County a photostatic or other suitable copy of the statement
issued therefore duly receipted to show the payment of taxes within thirty (30)
days after the last date for payment.
15. Contesting Taxes and Assessments. If ▇▇▇▇▇▇ shall in good faith
desire to contest the validity or amount of any tax, assessment, levy, or other
governmental charge herein agreed to be paid by ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall be
permitted to do so in accordance with established legal procedures. ▇▇▇▇▇▇ shall
give County fifteen (15) days written notice of its intent to contest the charge
prior to its delinquency date and post a surety bond covering any such tax levy
or assessment of damage arising therefrom prior to the delinquency date.
16. Quiet Enjoyment and Possession. So long as ▇▇▇▇▇▇ shall not be in
default under the terms of this Lease, ▇▇▇▇▇▇ shall and may peaceably and
quietly have, hold, and enjoy the leased premises. County shall deliver all
systems, equipment, fixtures, structural components, the roof and foundation to
▇▇▇▇▇▇ in good operating condition, ordinary wear and tear excepted.
17. County's Right of Entry. County, its agents and employees shall have
the right to enter into and upon the leased premises as is necessaryat
reasonable times and upon reasonable notice for the purpose of inspecting the
premises. County's right of entry on the premises shall be subject to
maintaining any confidentiality requirement that ▇▇▇▇▇▇ may reasonably request
of County.
18. Alteration of Leased Premises. ▇▇▇▇▇▇ shall have and is hereby given
the right, at its sole cost and expense, to make such additions, improvements,
changes and alterations in and to any part of the leased premises as ▇▇▇▇▇▇ from
time to time may deem necessary or advisable; provided, however, ▇▇▇▇▇▇ shall
not make any major addition, improvement, change or alteration which will
adversely affect the intended use of or the structural strength to any part of
the leased premises. All such major changes, alterations, improvements and
additions shall require the prior written consent of the County. County shall
not unreasonably withhold such consent. All additions, improvements, changes
and alterations made by ▇▇▇▇▇▇ pursuant to the authority of this section 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 deemed a part of the leased
premises; provided, however, that additions of machinery, equipment and/or
personal property of ▇▇▇▇▇▇, shall remain the separate property of ▇▇▇▇▇▇ and
may be removed by ▇▇▇▇▇▇ prior to expiration of the term of this Lease; provided
further, however, that all such additional machinery, equipment and/or personal
property which remain on the leased premises after the termination of this Lease
for any cause other than the purchase of the premises pursuant to Section 6
hereof, shall if not removed within thirty (30) days after request by County,
upon and in the event of such termination, become the separate and absolute
property of County.
19. County Purchase of Scales/Heating Modification Loan. County will
purchase or provide proof of purchase of certifiable scales for the Property.
▇▇▇▇▇▇ is responsible for the installation and maintenance of the scales. Once
installed, the scales shall be deemed a fixture of the Property, and shall not
be removed by ▇▇▇▇▇▇ unless and until ▇▇▇▇▇▇ becomes the owner of the Property
or ▇▇▇▇▇▇ and County agree in writing to the disposal or removal of the scales.
Further, upon ▇▇▇▇▇▇'▇ request, County will make a loan to ▇▇▇▇▇▇ from County's
Revolving Loan Fund in an amount net to exceed Seventy-Five Thousand Dollars
($75,000) for heating conversion, should ▇▇▇▇▇▇ determine that a modification
in the heating system in the facility should be necessary. In no event should
the County make a loan to ▇▇▇▇▇▇ for an amount in excess of the cost of the
heating conversion. This loan shall have a term of not more than five (5) years,
and an interest rate of not more than 7.5 percent (7.5%). ▇▇▇▇▇▇ shall repay
County in monthly installments beginning the first day of the month after any
payments are made to ▇▇▇▇▇▇ under the terms of the loan. ▇▇▇▇▇▇ may request
this loan within the first five (5) years of this Lease. ▇▇▇▇▇▇ shall provide
corporate guarantees on the loan. At the time that ▇▇▇▇▇▇ requests such loan,
documentation shall be prepared and executed by the parties evidencing the loan
in more complete terms as fully set out at the time of the loan.
20. Maintenance of Improvements. ▇▇▇▇▇▇ shall, throughout the term of this
Lease, at its own cost, and without any expense to County, keep and maintain
the leased premises, including all buildings and improvements of every kind
or nature including equipment which may be a part thereof, and all appurtenances
in good sanitary and neat order, condition and repair. ▇▇▇▇▇▇ is expressly
prohibited from selling, mortgaging, encumbering, hypothecating or disposing of
this Property in any way except as authorized by County and except in the
ordinary course of business. ▇▇▇▇▇▇ may sell or otherwise dispose of such
Property when obsolete, worn out, inadequate, unserviceable or unnecessary in
the operation of the Property, and ▇▇▇▇▇▇ may replace such Property with other
property at least equal in value to that disposed of. County shall not be
obligated to make any repairs, replacements, or renewals of any kind, nature
or description, whatsoever to the leased premises, including buildings or
equipment. ▇▇▇▇▇▇ shall also comply with and abide by all federal, state,
county, municipal, and other governmental statutes, ordinances, laws and
regulations affecting the leased premises, the improvements thereon, or any
activity or condition on or in such premises. County shall have the right to
repair and maintain the improvements and in the event of failure to do so by
▇▇▇▇▇▇, reasonable wear and tear excepted, and all charges for repair and
maintenance shall be chargeable to ▇▇▇▇▇▇ and be promptly paid by ▇▇▇▇▇▇ to
County upon submission or verification of such repair or maintenance charges,
and all such charges shall be deemed additional rent payable without regard
to any other provisions or requirements herein, on the part of ▇▇▇▇▇▇. ▇▇▇▇▇▇
may not dispose of, sell, encumber or remove any of the improvements attached to
the building or that reasonably becomes a fixture without written approval of
County. It is understood that due to normal and reasonable wear and tear on the
improvements or fixtures, said improvements and fixtures may wear out and the
cost of repair of refurbishing will exceed the cost of replacing the
improvement or fixture, and in that event, if not replaced with an improvement
or a fixture of equal or greater value, then ▇▇▇▇▇▇ will provide a notice of
said intent to dispose of worn out or unrepairable improvements or fixtures to
County and only upon written consent by County, may said property be disposed of
or removed.
21. Damage to and Destruction of Improvements. The damage, destruction,
or partial destruction of any building or other improvements or fixtures which
are part of the premises shall not release ▇▇▇▇▇▇ from any obligation hereunder,
and in case of damage to or destruction of any such building, improvement or
fixtures, ▇▇▇▇▇▇ shall, at its own expense, promptly repair and restore the
same to a condition as good or better than that which existed prior to such
damage or destruction. Without limiting such obligations of ▇▇▇▇▇▇, it is agreed
that the proceeds of any insurance covering such damage or destruction shall
be made available to ▇▇▇▇▇▇ for such repair or replacement. ▇▇▇▇▇▇ shall have
the right to purchase business interruption insurance to insure itself against
loss due to substantial damage or destruction of the demised premises. The
parties shall mutually cooperate on adjusting any loss or damage on the demised
premises with the insurance carrier. All costs in excess of insurance proceeds
necessary to restore the premises to good or better condition than existed at
the time of such damage or destruction, shall be borne by ▇▇▇▇▇▇. All building
plans for restoration shall be by mutual agreement of the parties hereto.
22. Utilities. ▇▇▇▇▇▇ shall fully and promptly pay for all water, gas,
heat, light, power, telephone service, and other public utilities of every kind
furnished to the leased premises throughout the term hereof, and all other costs
and expenses of every kind whatsoever of or in connection with the use,
operation and maintenance of the premises including deposits, and all activities
conducted thereon, and County shall have no responsibility of any kind for any
portion thereof. All future expansion, alteration or change of utility services
shall be at expense of ▇▇▇▇▇▇.
23. Mechanic's Liens. ▇▇▇▇▇▇ shall keep all of the leased premises and
every part thereof and all buildings and other improvements at any time located
thereon free and clear of any and all mechanic's or other similar lien. Whenever
and so often as any mechanic's or other similar lien is filed against the leased
premises, or any part thereof, ▇▇▇▇▇▇ shall discharge the same of record within
thirty (30) days after the date of filing. Notice is hereby given that County
does not authorize or consent to and shall not be liable for any labor or
materials furnished to ▇▇▇▇▇▇ or anyone claiming by, through or under ▇▇▇▇▇▇,
upon credit, and that no mechanic's or other similar lien for any such labor,
services or materials shall attach to or take effect through reversionary or
other estate of County in and to the leased premises, or any part thereof.
▇▇▇▇▇▇ shall give County written notice no less than thirty (30) days in advance
of the commencement of any construction, alteration, addition, improvement, or
repair estimated to cost in excess of Thirty Thousand Dollars ($30,000) in
order that County may post appropriate notices of County's non-responsibility.
County shall have the right but will not be required to pay any uncontested
liens and charge all payments so made to ▇▇▇▇▇▇, to be paid in the next monthly
rental payment due from ▇▇▇▇▇▇.
24. Contesting Liens. ▇▇▇▇▇▇, notwithstanding the above, shall have the
right to contest any such mechanic's or other similar lien if within thirty (30)
days of filing, it (i) notifies County in writing of its intention to do so,
and if requested by County, deposits with County a surety bond issued by a
surety company acceptable to County as surety, in favor of County or cash, in
the amount of lien claimed so contested, indemnifying and protecting County
from and against any liability, loss, damage, cost and expense of whatever
kind of nature growing out of or in any way connected with said asserted lien
and the contest thereof, and (ii) diligently prosecutes such contest, at all
times effectively staying or preventing any official or judicial sale of the
premises or any part thereof or interest therein under execution or otherwise,
and (iii) promptly pays or otherwise satisfies any judgment adjudging or
enforcing such contested lien claim and thereafter promptly procures record
release or satisfaction thereof.
25. Indemnification. ▇▇▇▇▇▇ shall and hereby covenants and agrees to
indemnify, protect, defend and save County harmless from and against any
and all claims, demands, litigation and liability of any nature, costs,
including reasonable attorneys' fees and discovery expense arising from damage
or injury, factual or claimed, of whatsoever kind of character, to property
or persons, occurring in, on or about the premises during the term hereof,
and upon timely written notice from County, ▇▇▇▇▇▇ shall defend County in any
action or proceeding brought thereon; provided, however, that nothing contained
in this section shall be construed as requiring ▇▇▇▇▇▇ to indemnify County for
any claim resulting from any act or omission of County, County's agents or
employees.
26. Default by Involuntary Assignment. Neither this Lease nor the
leasehold estate of ▇▇▇▇▇▇ nor any interest of ▇▇▇▇▇▇ hereunder in the leased
premises or in the building or improvements or equipment therein shall be
subject to involuntary assignment, transfer, or sale, or to assignment,
transfer, or sale by operation of law in any manner whatsoever and any such
attempt at involuntary assignment, transfer, or sale without the consent of
County shall be void and of no effect, such consent will not be unreasonably
withheld.
27. Actions Constituting Default. The following shall be considered a
substantial or material breach of the terms and conditions of this Lease and
constitute a default and entitle County to elect and pursue all remedies
pursuant to sections 29 through 32 of this Lease.
A. Voluntary bankruptcy.
B. Failure to name ▇▇▇▇▇▇ Building Systems of Kansas, Inc., as a
qualified and existing corporation under the laws of the State of
Kansas or under the ownership of its heirs and assigns.
C. Non-payment of rent pursuant to this Agreement within fifteen (15)
days of the date due.
D. Failure to maintain accident and liability insurance.
E. Failure to maintain fire and casualty insurance.
F. Failure to maintain personal injury liability insurance.
G. Failure to pay taxes and assessments.
28. Other Actions Constituting Default. Any breach of the following terms
or conditions shall constitute a non-material default and upon non-compliance by
▇▇▇▇▇▇ after notice pursuant to section 33 by County, County shall have the
right to pursue all remedies pursuant to sections 29 through 32 of this Lease.
Non-material breach conditions are as follows:
A. Any breach of any term or condition of this Lease.
B. Duty to maintain and repair demised properly as provided in Section
20.
C. Failure to allow access to County at reasonable times and places
pursuant to section 17 of this Lease.
D. Engaging in a prohibited use pursuant to section 7 of this Lease.
E. Failure to secure County's consent to changes.
F. Failure to pay utility bills.
G. Failure to pay mechanic liens pursuant to section 23 and 24.
H. Attempting to sublet demised premises without consent of County,
which consent shall not be unreasonably withheld.
I. Any attempted assignment of leased premises without express written
consent of County, which consent shall not be unreasonably withheld.
J. The failure to discharge or pay any mechanic or artisan lien within
thirty (30) days of the filing thereof, pursuant to section 23 and 24.
29. Remedies on Default. Whenever any substantial or material event of
default shall have happened or be continuing, County may take any one or more of
the following remedial actions.
A. Give ▇▇▇▇▇▇ written notice of intention
to terminate this Lease on the date
specified therein, which date shall not
be earlier than thirty (30) days after
such notice is given, and, if all defaults
have not then been cured on the date so
specified(except that this thirty (30) day
period shall be extended for a
reasonable period of time if the
alleged default is not reasonably
capable of cure within said thirty
(30) day period), ▇▇▇▇▇▇'▇ right to
possession of the leased premises
shall cease, and this Lease shall
thereupon be terminated and County
shall reenter and take possession of
the premises and all personalty
therein. County shall be entitled to
immediate possession after ▇▇▇▇▇▇
has failed to cure such default within
the period herein provided, without
the necessity to resort to legal
process.
B. Whenever any non-material event of
default shall have happened or be
continuing, County shall give ▇▇▇▇▇▇
written notice of intention to
terminate this Lease on the date
specified (except that this sixty (60)
day period shall be extended for a
reasonable period of time if the
alleged default is not reasonably
capable of cure within said sixty (60)
day period) therein, which date shall
not be earlier than sixty (60) days
after such notice is given, and, if all
defaults have not been cured on the
date so specified, ▇▇▇▇▇▇'▇ right to
possession of the leased premises
shall cease, and this Lease shall
thereupon be terminated, and
County shall re-enter and take
possession of the premises and all
personalty therein. Any costs for
repair of equipment necessitated by
other than reasonable wear shall be
chargeable to ▇▇▇▇▇▇ and shall be in
addition to the liquidated damages
as set forth herein.
30. No Remedy Exclusive. No remedy herein conferred upon or reserved
to County 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 in statute. 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 to be expedient. In
order to entitle County to exercise any remedy referred to in sections 29
through 32, it shall not be necessary to give any notice, other than notice
required herein. Any cost of litigation necessitated under this Lease including
reasonable attorney fees shall be at the expense of ▇▇▇▇▇▇ and shall be the
responsibility of ▇▇▇▇▇▇. This provision shall not apply if the litigation is
caused by the action of County, unless said action is for default against
▇▇▇▇▇▇. Conversely, ▇▇▇▇▇▇ shall be entitled to any cost of litigation
necessitated if County should violate the provisions of this Lease including but
not limited to reasonable attorney fees.
31. Rights and Remedies. The rights and remedies reserved by County and
▇▇▇▇▇▇ hereunder and those provided by law shall be construed as cumulative and
continuing rights. No right or remedy shall be exhausted by the exercise thereof
on one or more occasions. County and ▇▇▇▇▇▇ 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.
32. Waiver of Breach. No waiver shall be effective unless in writing. The
waiver of, or the failure to take action with respect to any breach of any term,
covenant, or condition herein contained shall not be deemed to be a waiver of
such term, covenant, or condition or subsequent breach of the same, or any other
term, covenant, or condition herein contained. Payment or payments or
performance may be accepted hereunder without in any way waiving the right to
exercise any rights or remedies provided for herein or otherwise with respect
to any breach which was in existence at the time such payment or payments or
performance was accepted.
33. Notice. All notice required or desired to be given hereunder shall be
in writing and shall be delivered in person or mailed by registered or certified
mail to:
COUNTY: ▇▇▇▇▇▇ ▇▇▇▇
County Clerk
▇▇▇▇▇▇ County Courthouse
▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
▇▇▇▇▇▇ Building Systems of Kansas, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Much Shelist Freed ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
All notices given by certified or registered mail as aforesaid shall be
deemed duly given as of the date they are so mailed.
34. Construction and Enforcement. This Lease shall be construed and
enforced in accordance with the laws of the State of Kansas. 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.
35. Sublease. ▇▇▇▇▇▇ agrees that it will in no way sublease, or attempt
to sublease the demised premises, including equipment without the express
written consent of County, such consent shall not be unreasonably withheld. The
final terms and conditions of any sublease agreement must be approved of in
writing by both County and ▇▇▇▇▇▇. In the event of any such subleasing, ▇▇▇▇▇▇
shall remain fully liable for the performance of its duties and obligations
hereunder, and no such subleasing and no dealings or transactions between
County and any such sublessee shall relieve ▇▇▇▇▇▇ of any of its duties and
obligations hereunder.
36. Voluntary Assignment. ▇▇▇▇▇▇ agrees that it will in no way assign, or
attempt to assign, the leased premises, including equipment, without the express
written consent of County, which consent County shall not unreasonably withhold.
In the event of any such assignment ▇▇▇▇▇▇ shall remain fully liable for the
performance of its duties and obligations hereunder.
37. Amendments. Amendments of the term hereon, the basic rental
payments, or of any and all other provisions of this Lease may be made only
pursuant to the express written consent of County and ▇▇▇▇▇▇. The language of
this contract is controlling and supersedes all oral agreements and
representations of the parties hereto. All prior agreements by and between
the parties hereto are hereby merged within the terms and conditions of this
Lease and this Lease represents the complete agreement of the parties hereto
and shall be binding upon all parties.
38. Net Lease The parties hereto agree that this lease is intended to be
a triple net lease.
39. Invalidity of Provisions Lease. If, for any reason, any provision of
this Lease shall be deemed to be invalid or unenforceable, the validity and
effect of the remaining provisions hereof shall not be affected thereby.
40. Covenants Binding on Successors end 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, assigns,
devisees, heirs, legatees, and beneficiaries.
41. Section Captions. The section captions appearing with the section
numbered designations of this Lease are for convenience purposes only and are
not a part of this Lease and do not in any way limit or amplify the terms and
provisions of this Lease.
42. Filing of Lease Memo. The parties hereto agree that a Memorandum of
this Lease will be filed with the Register of Deeds of ▇▇▇▇▇▇ County, Kansas.
43. Termination. Any lease of the property in existence with ▇▇▇▇▇▇
upon the delivery, by the County, of an executed, binding lease with the Option
in accordance with the statutory requirements shall be deemed terminated when
and if ▇▇▇▇▇▇ exercises the option herein and ▇▇▇▇▇▇ or its permitted assignees
has a binding legal interest in said property. Lease may be terminated by
▇▇▇▇▇▇ when and if ▇▇▇▇▇▇ exercises its option to purchase herein and said
purchase is completed.
IN WITNESS WHEREOF, the parties have executed this Lease on the date first
above written.
BOARD OF COUNTY COMMISSIONERS ▇▇▇▇▇▇ BUILDING SYSTEMS OF KANSAS, INC.
▇▇▇▇▇▇ COUNTY, KANSAS
By: \▇▇▇▇▇▇▇ ▇. ▇▇▇▇ BY: \▇▇▇▇▇▇ ▇. ▇▇▇▇▇ PRES
ATTEST: \▇▇▇▇▇▇ ▇▇▇▇▇
APPROVED: \▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
Schedule 2.18 A
Revised Burlington Lease
LEASE AGREEMENT
This Lease Agreement ("Lease") is entered into on this __6th__ day of
August, 1999, between, Board of County Commissioners of ▇▇▇▇▇▇ County, Kansas
(County) and ▇▇▇▇▇▇ Building Systems of Kansas, Inc. (▇▇▇▇▇▇), of Elkhart,
Indiana.
RECITALS
The parties recite and declare:
A. County and ▇▇▇▇▇▇ entered into that certain Lease Agreement dated
August 12, 1996, amended December 30, 1996 ("Original Lease") whereby ▇▇▇▇▇▇
leased from the County the Property (defined in Section 1. below).
B. The County in the Original Lease represented and covenanted that under
the statutes of the State of Kansas, it had the power to enter into and perform
the transactions contemplated by the Original Lease and to carry out its
obligations under that Original Lease.
C. The County has determined that K.S.A. 19-211 does not allow the County
to comply with all of the terms of the Original Lease including Paragraph 6.
D. The parties desire to terminate the Original Lease except for Paragraph
2.A., and 30 through 32 which survive and the rights with respect to Paragraph 6
and enter into this new Lease. It is understood that ▇▇▇▇▇▇ by entering into
the new Lease does not waive any legal rights it might have had in Paragraph
2.A., 6, and 30 - 32 of the Original Lease and specifically reserves those
rights herein.
NOW THEREFORE in consideration of the mutual covenants, representations,
warranties and agreements contained herein, the parties agree as follows:
1. Lease of Property. ▇▇▇▇▇▇ wishes to lease, and County desires to
lease a certain tract of real property, referred to hereinafter as "Property"
and more fully described in the legal description set forth in Exhibit A
attached hereto and incorporated herein by reference.
2. Representations and Covenants by County. County makes the following
representations and covenants as the basis for the undertaking of its part of
the Lease contained herein:
A. That ▇▇▇▇▇▇ County is a county governmental unit existing under
and pursuant to the laws and constitution of the State of Kansas.
Under the statutes of the State of Kansas, County has the power
to enter into and perform the transactions contemplated by this
Lease and to carry out its obligations hereunder.
B. That County has fee simple title to the Property subject only to
easements and restrictions of record and apparent, none of which
will interfere with or prevent ▇▇▇▇▇▇'▇ use of the property as a
manufacturing facility.
C. County 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 property leased hereunder,
except for and subject to the Lease as set forth in this instant
document.
D. Except as otherwise provided herein, County will not during the
basic term of this Lease, 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 Property leased herein.
E. County has duly authorized the execution of this Lease pursuant
to a formal action of the Board of County Commissioners, ▇▇▇▇▇▇
County, Kansas.
3. Representations and Covenants by ▇▇▇▇▇▇. ▇▇▇▇▇▇ makes the following
representations and covenants as the basis for undertaking its part of the Lease
contained herein.
▇. ▇▇▇▇▇▇ is a duly qualified and existing corporation under the
laws of the State of Kansas and will be duly authorized and
qualified to do business in the State of Kansas prior to the
commencement date of this Lease, with lawful power and
authority to enter into this Lease, acting by and through its
duly authorized officers and has received its authority by its
Board of Directors and officers to authorize ▇▇▇▇▇▇ ▇▇▇▇▇,
President, to sign this Lease.
▇. ▇▇▇▇▇▇ shall:
(1) maintain and preserve its existence and organization as a
corporation and its authority to do business in the State of
Kansas; and
(2) not initiate any proceedings of any kind whatsoever to
dissolve or liquidate without first securing the prior
written consent of County and making provision for the
payment in full of the basic rent and to comply with all
other obligations for this Lease as they apply.
C. Neither the execution or delivery of this Lease, the consummation
of the transaction contemplated herein, nor the fulfillment of or
compliance with the terms and conditions of this Lease
contravenes any provisions of ▇▇▇▇▇▇'▇ Articles of Incorporations
or Bylaws, nor does anything contained herein conflict with or
result in a breach of the terms, conditions or provisions of any
mortgage, debt, agreement, indenture, or instrument to which
▇▇▇▇▇▇ is a party or by which ▇▇▇▇▇▇ is bound, or to which ▇▇▇▇▇▇
or any of the properties of ▇▇▇▇▇▇ is subject, or would
constitute a default (without regard to any required notice or
the passage of any period of time) under any of the following, or
would result in a creation or imposition of any lien, charge or
encumbrance, whatsoever, upon any of the property or assets of
▇▇▇▇▇▇ under the terms of any mortgage, debt, agreement,
indenture or instrument, or violate any existing law,
administrative regulation or court order including consent
decrees to which ▇▇▇▇▇▇ is subject.
D. This Lease constitutes a valid and legal binding obligation on
▇▇▇▇▇▇ enforceable in accordance with its terms.
E. That ▇▇▇▇▇▇ has obtained or will obtain if it becomes necessary
in the future, any and all permits, authorizations, licenses and
franchises to enable ▇▇▇▇▇▇ to operate and utilize the property
for the purposes for which the property is being leased to ▇▇▇▇▇▇
under the terms of this Lease and that ▇▇▇▇▇▇ will operate in
accordance with all local, state and federal laws to insure
compliance with any licensing, permit, authorization or franchise
requirement.
4. Term. The initial term of this Lease shall be five (5) years
commencing August 1, 1999 and ending July 31, 2004. As used herein the
expression "term hereof" refers to this initial term and any renewal term.
▇▇▇▇▇▇ shall have five (5) options to renew the Lease of the Property each for
an additional five (5) year term if ▇▇▇▇▇▇ is in material compliance with all
the terms of the Lease and upon written notice to County of intent to renew
sixty (60) days prior to the expiration of the current term.
5. Basic Rent. County reserves and ▇▇▇▇▇▇ agrees to pay in the manner
herein after specified to County without demand, the rent on the property in the
amount of $150,000 for each five (5) year term of this Lease. The payments
shall be made at the rate of Two Thousand Five Hundred and 00/100 Dollars
($2500.00) per month for sixty (60) months. Rent shall be paid to County in
advance on the first day of the month in which the rent shall become due without
deduction or offset at a place or places as may be designated from time to
time by County. In the event that ▇▇▇▇▇▇ should fail to make a payment by the
fifteenth of any given month, interest shall attach to the given monthly payment
at the rate of 1.5 percent (1.5%) per month or eighteen percent (18%) per annum.
Additionally, as allowed by law, County reserves the right to advance all
payments, due in the event that ▇▇▇▇▇▇ should fail or refuse to make payment
under the terms of this Lease within thirty (30) days after a given payment is
due. Further, County reserves the right to waive any one payment, without
being subject to or stopped from enforcing these remedies should a future
monthly payment be delayed for more than thirty (30) days. In other words, if
County does not instigate advancement and liquidation of this Lease in a month
in which ▇▇▇▇▇▇ is more than thirty (30) days late, this does not preclude
County from asserting the same rights as to a future month. This right to
advance payments should ▇▇▇▇▇▇ be more than Thirty (30) days late shall not be
implicitly waived by the County, unless both parties agree to a waiver of this
provision in writing. This paragraph shall be governed by sections 27 and 28
of this Lease.
6. Intentionally Deleted.
7. Uses Prohibited. ▇▇▇▇▇▇ shall not use, or permit the leased
premises, or any part thereof, to be used, for any purpose or purposes other
than those allowed by the laws of ▇▇▇▇▇▇ County, the State of Kansas, the
Environmental Protection Agency, or the United States of America and no use
shall be made or permitted to be made of the leased premises, or acts done,
which will cause the cancellation of any insurance policy covering the building
located on the premises, or any part thereof, or any other portion of the
leased premises, any act which may be prohibited by the applicable fire
insurance policies or other terms of insurance hereon. ▇▇▇▇▇▇ shall, at its
sole cost, comply with all requirements, pertaining to the leased premises, of
any insurance organization or company, necessary for the maintenance of
insurance, as herein provided, covering any building or appurtenances at any
time located on the leased premises. ▇▇▇▇▇▇ shall prevent any activity which
produces substantial hazardous waste, emissions or odors in violation of the
rules and regulations of the Environmental Protection Agency and any other
local, state, or federal law and hold County harmless and indemnify County for
any violation of such rules, regulations or laws.
8. Uses Permitted. ▇▇▇▇▇▇ shall use this facility for the manufacture
and shipping of prefabricated buildings and uses associated therewith. Other
uses may be agreed to by the parties, in writing signed by both parties, and the
County's consent thereto will not be unreasonably withheld.
9. General Accident and Liability Insurance. ▇▇▇▇▇▇ shall, at all
times after acceptance of possession of the leased premises under the terms and
conditions as contained herein, and at all times during the term of the Lease
thereafter, at ▇▇▇▇▇▇'▇ sole expense, keep all improvements which are now or
hereafter a part of the premises insured against loss or damage by fire and
the extended coverage hazards for one hundred percent (100%) of the full
replacement value of such improvements as established by yearly review with a
company authorized to do business and authorized to sell insurance in the State
of Kansas, with loss payable to County and ▇▇▇▇▇▇ as their interests may appear.
Any loss adjustment shall require the written consent of both County and ▇▇▇▇▇▇.
The cost of full replacement will be reviewed annually by the parties hereto.
10. Personal Injury Liability Insurance. ▇▇▇▇▇▇ shall maintain in
effect throughout the term of this Lease personal injury liability insurance
covering the leased premises and its appurtenances, sidewalks and parking lot
thereon in an amount not less than the maximum liability of a governmental
entity for claims arising out of a single occurrence as provided by the Kansas
Tort Claims Act or other supplemental laws; which policy shall provide that such
insurance may not be canceled by the issuer thereof without at least thirty (30)
days advance written notice to ▇▇▇▇▇▇ and County. Such insurance shall be
maintained throughout the life of this Lease and will be obtained through a
company authorized to do business in the State of Kansas.
11. County's Right to Pay Premiums On Behalf of ▇▇▇▇▇▇. All of the
policies of insurance referred to in this section shall be written in form
satisfactory to County. ▇▇▇▇▇▇ shall pay all of the premiums therefore during
the term of this Lease and deliver such policies, or certificates thereof, to
County, and in the event of the failure of ▇▇▇▇▇▇, either to effect such
insurance in the names herein called for or to pay the premiums therefore, or to
deliver such policies, or certificates thereof, to County, said action shall
be a default of this Lease and County shall be entitled, but shall have no
obligation, to effect such insurance and pay the premiums therefore, which
premiums shall be repayable to County with the next installment of rent and/or
County may proceed with all available remedies under the default provisions
herein.
12. Cost of Insurance Deemed Additional Rent. The cost of insurance
required to be carried by ▇▇▇▇▇▇ in this section shall be deemed to be
additional rent hereunder. Each insurer mentioned in this section shall
agree, by endorsement on the policy or policies issued by it, or by independent
instrument furnished to County, that it will give to County thirty (30) days
written notice before the policy or policies in question shall be altered or
canceled. County agrees it will not unreasonably withhold its approval as to
the form or to the insurance companies selected by ▇▇▇▇▇▇.
13. Taxes and Assessments. The parties agree that the Propertyhas been
and will continue to be deemed to be exempt from state, county and/or municipal
real property taxes by the Board of Tax Appeals of the State of Kansas. County
agrees to take reasonable action to ensure that the property remains exempt
during the terms of this Lease. If the Property shall nevertheless become
subject to real property taxes, then ▇▇▇▇▇▇ shall, during the life of this
Lease, bear, pay and discharge, before the delinquency thereof, any and all
taxes and assessments. In the event any taxes and assessments may be lawfully
paid in installments, ▇▇▇▇▇▇ shall be required to pay only such installment
thereof as becomes due and payable during the life of this Lease, as and when
the same becomes due and payable. County covenants that without ▇▇▇▇▇▇'▇ written
consent it will not, unless required by law, take any action which may
reasonably be construed as tending to cause or induce the levying of any tax or
assessment (other than special assessments levied on account of special benefits
or other taxes or assessments for benefits or service uniformly imposed) which
▇▇▇▇▇▇ would be required to pay under this section and that should any such tax
or assessment be threatened or occur, County shall, at ▇▇▇▇▇▇'▇ request, fully
cooperate with ▇▇▇▇▇▇ in all reasonable ways to prevent any such tax or
assessment. In the event that either the Federal government or the State of
Kansas determines that the demised Property is not exempt from taxation by the
tax guidelines of either agency, because the leased property is not meeting
requirements for non-taxability then and in that event, all tax assessments
shall be the sole and separate liability of ▇▇▇▇▇▇ upon possession by ▇▇▇▇▇▇ as
set forth herein.
14. Receipted Statements. Unless ▇▇▇▇▇▇ exercises its right to contest any
tax or assessment in accordance with the following paragraph hereof, ▇▇▇▇▇▇
shall deliver to County a photostatic or other suitable copy of the statement
issued therefore duly receipted to show the payment of taxes within thirty
(30) days after the last date for payment.
15. Contesting Taxes and Assessments. If ▇▇▇▇▇▇ shall in good faith
desire to contest the validity or amount of any tax, assessment, levy, or other
governmental charge herein agreed to be paid by ▇▇▇▇▇▇, ▇▇▇▇▇▇ shall be
permitted to do so in accordance with established legal procedures. ▇▇▇▇▇▇
shall give County fifteen (15) days written notice of its intent to contest the
charge prior to its delinquency date and post a surety bond covering any such
tax levy or assessment of damage arising therefrom prior to the delinquency
date.
16. Quiet Enjoyment and Possession. So long as ▇▇▇▇▇▇ shall not be in
default under the terms of this Lease, ▇▇▇▇▇▇ shall and may peaceably and
quietly have, hold, and enjoy the leased premises. County shall deliver all
systems, equipment, fixtures, structural components, the roof and foundation
to ▇▇▇▇▇▇ in good operating condition, ordinary wear and tear excepted.
17. County's Right of Entry. County, its agents and employees shall have
the right to enter into and upon the leased premises as is necessary
at reasonable times and upon reasonable notice for the purpose of inspecting
the premises. County's right of entry on the premises shall be subject to
maintaining any confidentiality requirement that ▇▇▇▇▇▇ may reasonably request
of County.
18. Alteration of Leased Premises. ▇▇▇▇▇▇ shall have and is hereby
given the right, at its sole cost and expense, to make such additions,
improvements, changes and alterations in and to any part of the leased premises
as ▇▇▇▇▇▇ from time to time may deem necessary or advisable; provided, however,
▇▇▇▇▇▇ shall not make any major addition, improvement, change or alteration
which will adversely affect the intended use of or the structural strength to
any part of the leased premises. All such major changes, alterations,
improvements and additions shall require the prior written consent of the
County. County shall not unreasonably withhold such consent. All additions,
improvements, changes and alterations made by ▇▇▇▇▇▇ pursuant to the authority
of this section 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
deemed a part of the leased premises; provided, however, that additions of
machinery, equipment and/or personal property of ▇▇▇▇▇▇, shall remain the
separate property of ▇▇▇▇▇▇ and may be removed by ▇▇▇▇▇▇ prior to expiration of
the term of this Lease; provided further, however, that all such additional
machinery, equipment and/or personal property which remain on the leased
premises after the termination of this Lease for any cause shall if not removed
within thirty (30) days after request by County, upon and in the event of such
termination, become the separate and absolute property of County.
19. County Purchase of Scales/Heating Modification Loan. County will
purchase or provide proof of purchase of certifiable scales for the Property.
▇▇▇▇▇▇ is responsible for the installation and maintenance of the scales. Once
installed, the scales shall be deemed a fixture of the Property, and shall not
be removed by ▇▇▇▇▇▇ unless and until ▇▇▇▇▇▇ becomes the owner of the Property
or ▇▇▇▇▇▇ and County agree in writing to the disposal or removal of the scales.
Further, upon ▇▇▇▇▇▇'▇ request, County will make a loan to ▇▇▇▇▇▇ from County's
Revolving Loan Fund in an amount net to exceed Seventy-Five Thousand Dollars
($75,000) for heating conversion, should ▇▇▇▇▇▇ determine that a modification in
the heating system in the facility should be necessary. In no event should the
County make a loan to ▇▇▇▇▇▇ for an amount in excess of the cost of the heating
conversion. This loan shall have a term of not more than five (5) years, and an
interest rate of not more than 7.5 percent (7.5%). ▇▇▇▇▇▇ shall repay County in
monthly installments beginning the first day of the month after any payments are
made to ▇▇▇▇▇▇ under the terms of the loan. ▇▇▇▇▇▇ may request this loan within
the first five (5) years of this Lease. ▇▇▇▇▇▇ shall provide corporate
guarantees on the loan. At the time that ▇▇▇▇▇▇ requests such loan,
documentation shall be prepared and executed by the parties evidencing the loan
in more complete terms as fully set out at the time of the loan.
20. Maintenance of Improvements. ▇▇▇▇▇▇ shall, throughout the
term of this Lease, at its own cost, and without any expense to County, keep and
maintain the leased premises, including all buildings and improvements of every
kind or nature including equipment which may be a part thereof, and all
appurtenances in good sanitary and neat order, condition and repair. ▇▇▇▇▇▇ is
expressly prohibited from selling, mortgaging, encumbering, hypothecating or
disposing of this Property in any way except as authorized by County and except
in the ordinary course of business. ▇▇▇▇▇▇ may sell or otherwise dispose of such
Property when obsolete, worn out, inadequate, unserviceable or unnecessary in
the operation of the Property, and ▇▇▇▇▇▇ may replace such Property with other
property at least equal in value to that disposed of. County shall not be
obligated to make any repairs, replacements, or renewals of any kind, nature or
description, whatsoever to the leased premises, including buildings or
equipment. ▇▇▇▇▇▇ shall also comply with and abide by all federal, state,
county, municipal, and other governmental statutes, ordinances, laws and
regulations affecting the leased premises, the improvements thereon, or any
activity or condition on or in such premises. County shall have the right to
repair and maintain the improvements and in the event of failure to do so by
▇▇▇▇▇▇, reasonable wear and tear excepted, and all charges for repair and
maintenance shall be chargeable to ▇▇▇▇▇▇ and be promptly paid by ▇▇▇▇▇▇ to
County upon submission or verification of such repair or maintenance charges,
and all such charges shall be deemed additional rent payable without regard to
any other provisions or requirements herein, on the part of ▇▇▇▇▇▇. ▇▇▇▇▇▇ may
not dispose of, sell, encumber or remove any of the improvements attached to the
building or that reasonably becomes a fixture without written approval of
County. It is understood that due to normal and reasonable wear and tear on
the improvements or fixtures, said improvements and fixtures may wear out and
the cost of repair of refurbishing will exceed the cost of replacing the
improvement or fixture, and in that event, if not replaced with an improvement
or a fixture of equal or greater value, then ▇▇▇▇▇▇ will provide a notice of
said intent to dispose of worn out or unrepairable improvements or fixtures to
County and only upon written consent by County, may said property be disposed of
or removed.
21. Damage to and Destruction of Improvements. The damage, destruction,
or partial destruction of any building or other improvements or fixtures which
are part of the premises shall not release ▇▇▇▇▇▇ from any obligation hereunder,
and in case of damage to or destruction of any such building, improvement or
fixtures, ▇▇▇▇▇▇ shall, at its own expense, promptly repair and restore the
same to a condition as good or better than that which existed prior to such
damage or destruction. Without limiting such obligations of ▇▇▇▇▇▇, it is agreed
that the proceeds of any insurance covering such damage or destruction shall
be made available to ▇▇▇▇▇▇ for such repair or replacement. ▇▇▇▇▇▇ shall have
the right to purchase business interruption insurance to insure itself against
loss due to substantial damage or destruction of the demised premises. The
parties shall mutually cooperate on adjusting any loss or damage on the demised
premises with the insurance carrier. All costs in excess of insurance proceeds
necessary to restore the premises to good or better condition than existed at
the time of such damage or destruction, shall be borne by ▇▇▇▇▇▇. All building
plans for restoration shall be by mutual agreement of the parties hereto.
22. Utilities. ▇▇▇▇▇▇ shall fully and promptly pay for all water, gas,
heat, light, power, telephone service, and other public utilities of every kind
furnished to the leased premises throughout the term hereof, and all other costs
and expenses of every kind whatsoever of or in connection with the use,
operation and maintenance of the premises including deposits, and all activities
conducted thereon, and County shall have no responsibility of any kind for any
portion thereof. All future expansion, alteration or change of utility services
shall be at expense of ▇▇▇▇▇▇.
23. Mechanic's Liens. ▇▇▇▇▇▇ shall keep all of the leased premises and
every part thereof and all buildings and other improvements at any time located
thereon free and clear of any and all mechanic's or other similar lien. Whenever
and so often as any mechanic's or other similar lien is filed against the leased
premises, or any part thereof, ▇▇▇▇▇▇ shall discharge the same of record within
thirty (30) days after the date of filing. Notice is hereby given that County
does not authorize or consent to and shall not be liable for any labor or
materials furnished to ▇▇▇▇▇▇ or anyone claiming by, through or under ▇▇▇▇▇▇,
upon credit, and that no mechanic's or other similar lien for any such labor,
services or materials shall attach to or take effect through reversionary or
other estate of County in and to the leased premises, or any part thereof.
▇▇▇▇▇▇ shall give County written notice no less than thirty (30) days in advance
of the commencement of any construction, alteration, addition, improvement, or
repair estimated to cost in excess of Thirty Thousand Dollars ($30,000) in
order that County may post appropriate notices of County's non-responsibility.
County shall have the right but will not be required to pay any uncontested
liens and charge all payments so made to ▇▇▇▇▇▇, to be paid in the next monthly
rental payment due from ▇▇▇▇▇▇.
24. Contesting Liens. ▇▇▇▇▇▇, notwithstanding the above, shall have the
right to contest any such mechanic's or other similar lien if within thirty (30)
days of filing, it (i) notifies County in writing of its intention to do so, and
if requested by County, deposits with County a surety bond issued by a surety
company acceptable to County as surety, in favor of County or cash, in the
amount of lien claimed so contested, indemnifying and protecting County from and
against any liability, loss, damage, cost and expense of whatever kind of nature
growing out of or in any way connected with said asserted lien and the contest
thereof, and (ii) diligently prosecutes such contest, at all times effectively
staying or preventing any official or judicial sale of the premises or any part
thereof or interest therein under execution or otherwise, and (iii) promptly
pays or otherwise satisfies any judgment adjudging or enforcing such contested
lien claim and thereafter promptly procures record release or satisfaction
thereof.
25. Indemnification. ▇▇▇▇▇▇ shall and hereby covenants and agrees
to indemnify, protect, defend and save County harmless from and against any and
all claims, demands, litigation and liability of any nature, costs, including
reasonable attorneys' fees and discovery expense arising from damage or injury,
factual or claimed, of whatsoever kind of character, to property or persons,
occurring in, on or about the premises during the term hereof, and upon timely
written notice from County, ▇▇▇▇▇▇ shall defend County in any action or
proceeding brought thereon; provided, however, that nothing contained in this
section shall be construed as requiring ▇▇▇▇▇▇ to indemnify County for any claim
resulting from any act or omission of County, County's agents or employees.
26. Default by Involuntary Assignment. Neither this Lease nor the
leasehold estate of ▇▇▇▇▇▇ nor any interest of ▇▇▇▇▇▇ hereunder in the leased
premises or in the building or improvements or equipment therein shall be
subject to involuntary assignment, transfer, or sale, or to assignment,
transfer, or sale by operation of law in any manner whatsoever and any such
attempt at involuntary assignment, transfer, or sale without the consent of
County shall be void and of no effect, such consent will not be unreasonably
withheld.
27. Actions Constituting Default. The following shall be considered a
substantial or material breach of the terms and conditions of this Lease and
constitute a default and entitle County to elect and pursue all remedies
pursuant to sections 29 through 32 of this Lease.
A. Voluntary bankruptcy.
B. Failure to name ▇▇▇▇▇▇ Building Systems of Kansas, Inc., as a
qualified and existing corporation under the laws of the State of
Kansas or under the ownership of its heirs and assigns.
C. Non-payment of rent pursuant to this Agreement within fifteen (15)
days of the date due.
D. Failure to maintain accident and liability insurance.
E. Failure to maintain fire and casualty insurance.
F. Failure to maintain personal injury liability insurance.
G. Failure to pay taxes and assessments.
28. Other Actions Constituting Default. Any breach of the following terms
or conditionsshall constitute a non-material default and upon non-compliance by
▇▇▇▇▇▇ after notice pursuant to section 33 by County, County shall have the
right to pursue all remedies pursuant to sections 29 through 32 of this Lease.
Non-material breach conditions are as follows:
A. Any breach of any term or condition of this Lease.
B. Duty to maintain and repair demised properly as provided in
Section 20.
C. Failure to allow access to County at reasonable times and places
pursuant to section 17 of this Lease.
D. Engaging in a prohibited use pursuant to section 7 of this Lease.
E. Failure to secure County's consent to changes.
F. Failure to pay utility bills.
G. Failure to pay mechanic liens pursuant to section 23 and 24.
H. Attempting to sublet demised premises without consent of County, which
consent shall not be unreasonably withheld.
I. Any attempted assignment of leased premises without express written
consent of County, which consent shall not be unreasonably withheld.
J. The failure to discharge or pay any mechanic or artisan lien within
thirty (30) days of the filing thereof, pursuant to section 23 and 24.
29. Remedies on Default. Whenever any substantial or material event of
default shall have happened or be continuing, County may take any one or more of
the following remedial actions.
A. Give ▇▇▇▇▇▇ written notice of intention to
terminate this Lease on the date specified
therein, which date shall not be earlier than
thirty (30) days after such notice is given,
and, if all defaults have not then been cured
on the date so specified (except that this
thirty (30) day period shall be extended for
a reasonable period of time if the alleged
default is not reasonably capable of cure
within said thirty (30) day period), ▇▇▇▇▇▇'▇
right to possession of the leased premises
shall cease, and this Lease shall thereupon
be terminated and County shall reenter and
take possession of the premises and all
personalty therein. County shall be entitled
to immediate possession after ▇▇▇▇▇▇ has
failed to cure such default within the period
herein provided, without the necessity to
resort to legal process.
B. Whenever any non-material event of
default shall have happened or be
continuing, County shall give ▇▇▇▇▇▇
written notice of intention to terminate this
Lease on the date specified (except that this
sixty (60) day period shall be extended for
a reasonable period of time if the alleged
default is not reasonably capable of cure
within said sixty (60) day period) therein,
which date shall not be earlier than sixty
(60) days after such notice is given, and, if
all defaults have not been cured on the date
so specified, ▇▇▇▇▇▇'▇ right to possession of
the leased premises shall cease, and this
Lease shall thereupon be terminated, and
County shall re-enter and take possession
of the premises and all personalty therein.
Any costs for repair of equipment
necessitated by other than reasonable wear
shall be chargeable to ▇▇▇▇▇▇ and shall be in
addition to the liquidated damages as set
forth herein.
30. No Remedy Exclusive. No remedy herein conferred upon or reserved to
County 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 in statute. 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 to be expedient. In
order to entitle County to exercise any remedy referred to in sections 29
through 32, it shall not be necessary to give any notice, other than notice
required herein. Any cost of litigation necessitated under this Lease including
reasonable attorney fees shall be at the expense of ▇▇▇▇▇▇ and shall be the
responsibility of ▇▇▇▇▇▇. This provision shall not apply if the litigation is
caused by the action of County, unless said action is for default against
▇▇▇▇▇▇. Conversely, ▇▇▇▇▇▇ shall be entitled to any cost of litigation
necessitated if County should violate the provisions of this Lease including but
not limited to reasonable attorney fees.
31. Rights and Remedies. The rights and remedies reserved by County and
▇▇▇▇▇▇ hereunder and those provided by law shall be construed as cumulative and
continuing rights. No right or remedy shall be exhausted by the exercise thereof
on one or more occasions. County and ▇▇▇▇▇▇ 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.
32. Waiver of Breach. No waiver shall be effective unless in writing. The
waiver of, or the failure to take action with respect to any breach of any term,
covenant, or condition herein contained shall not be deemed to be a waiver of
such term, covenant, or condition or subsequent breach of the same, or any other
term, covenant, or condition herein contained. Payment or payments or
performance may be accepted hereunder without in any way waiving the right to
exercise any rights or remedies provided for herein or otherwise with respect to
any breach which was in existence at the time such payment or payments or
performance was accepted.
33. Notice. All notice required or desired to be given hereunder shall be
in writing and shall be delivered in person or mailed by registered or certified
mail to:
COUNTY: ▇▇▇▇▇▇ ▇▇▇▇
County Clerk
▇▇▇▇▇▇ County Courthouse
▇▇▇ ▇. ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President
▇▇▇▇▇▇ Building Systems of Kansas, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Much Shelist Freed ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇, P.C.
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
All notices given by certified or registered mail as aforesaid shall be
deemed duly given as of the date they are so mailed.
34. Construction and Enforcement. This Lease shall be construed and
enforced in accordance with the laws of the State of Kansas. 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.
35. Sublease. ▇▇▇▇▇▇ agrees that it will in no way sublease, or attempt
to sublease the demised premises, including equipment without the express
written consent of County, such consent shall not be unreasonably withheld. The
final terms and conditions of any sublease agreement must be approved of in
writing by both County and ▇▇▇▇▇▇. In the event of any such subleasing, ▇▇▇▇▇▇
shall remain fully liable for the performance of its duties and obligations
hereunder, and no such subleasing and no dealings or transactions between County
and any such sublessee shall relieve ▇▇▇▇▇▇ of any of its duties and obligations
hereunder.
36. Voluntary Assignment. ▇▇▇▇▇▇ agrees that it will in no way assign, or
attempt to assign, the leased premises, including equipment, without the express
written consent of County, which consent County shall not unreasonably withhold.
In the event of any such assignment ▇▇▇▇▇▇ shall remain fully liable for the
performance of its duties and obligations hereunder.
37. Amendments. Amendments of the term hereon, the basic rental payments,
or of any and all other provisions of this Lease may be made only pursuant to
the express written consent of County and ▇▇▇▇▇▇. The language of this contract
is controlling and supersedes all oral agreements and representations of the
parties hereto. All prior agreements by and between the parties hereto are
hereby merged within the terms and conditions of this Lease and this Lease
represents the complete agreement of the parties hereto and shall be binding
upon all parties.
38. Net Lease The parties hereto agree that this lease is intended to be
a triple net lease.
39. Invalidity of Provisions Lease. If, for any reason, any provision of
this Lease shall be deemed to be invalid or unenforceable, the validity and
effect of the remaining provisions hereof shall not be affected thereby.
40. Covenants Binding on Successors end 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, assigns,
devisees, heirs, legatees, and beneficiaries.
41. Section Captions. The section captions appearing with the section
numbered designations of this Lease are for convenience purposes only and are
not a part of this Lease and do not in any way limit or amplify the terms and
provisions of this Lease.
42. Filing of Lease Memo. The parties hereto agree that a Memorandum of
this Lease will be filed with the Register of Deeds of ▇▇▇▇▇▇ County, Kansas.
43. Incorporation of Recitals. The Recitals to this Lease are hereby
incorporated in this Lease by this reference.
44. Termination. This Lease will automatically terminate upon the parties
entering into a new binding lease with an option to purchase in accordance with
Section 19-211 of the Kansas Statutes, a copy of such lease to be attached as
Exhibit "B" upon finalizing the terms of such Lease.
IN WITNESS WHEREOF, the parties have executed this Lease on the date first
above written.
BOARD OF COUNTY COMMISSIONERS ▇▇▇▇▇▇ BUILDING SYSTEMS OF KANSAS, INC.
▇▇▇▇▇▇ COUNTY, KANSAS
By: \▇▇▇▇▇▇▇ ▇. ▇▇▇▇ By: \▇▇▇▇▇▇ ▇. ▇▇▇▇▇
PRES/CEO
ATTEST: \▇▇▇▇▇▇ ▇▇▇▇ by
▇▇▇▇ ▇▇▇▇▇ Chief Deputy
APPROVED: \▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
