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-----------------------------------
LEASE
DATED AS OF FEBRUARY 1, 2001
-----------------------------------
BETWEEN
UNIFIED GOVERNMENT OF WYANDOTTE COUNTY/KANSAS CITY, KANSAS,
AS THE ISSUER
AND
KANSAS EPA LABORATORY, LLC,
AS THE TENANT
$22,075,000
TAXABLE INDUSTRIAL REVENUE BONDS
(EPA LABORATORY PROJECT)
SERIES 2001
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<PAGE>
LEASE
TABLE OF CONTENTS
PAGE
Parties......................................................
1
Recitals.....................................................
1
ARTICLE I
DEFINITIONS
Section 1.1.
Definitions..................................................
1
ARTICLE II
REPRESENTATIONS AND WARRANTIES
Section 2.1. Representations of the
Tenant................................ 1
Section 2.2. Representations of the
Issuer................................ 2
ARTICLE III
LEASE OF THE PROJECT
Section 3.1. Granting of Leasehold
Estate................................. 2
Section 3.2.
Possession...................................................
2
Section 3.3. Access to the
Project........................................ 3
Section 3.4. Granting of
Easements........................................ 3
ARTICLE IV
ISSUANCE OF BONDS; PURCHASE AND CONSTRUCTION OF THE PROJECT
Section 4.1. Issuance of Series
2001 Bonds; Additional Bonds.............. 3
Section 4.2. Initial Acquisition of
Land and Improvements from Tenant..... 3
Section 4.3. Acquisition, Purchase,
Construction and Installation
of the Project...............................................
3
Section 4.4. Project Contracts;
Project Documents......................... 3
Section 4.5. Payment of Project
Costs for Buildings, Structures,
Facilities, Additions and Improvements.......................
4
Section 4.6. Payment of Project
Costs for Machinery, Equipment and
Personal Property............................................
5
Section 4.7. Completion of
Project........................................ 5
Section 4.8. Deficiency of Project
Fund................................... 5
Section 4.9. Surplus in Project
Fund...................................... 5
Section 4.10. Right of Entry by the
Issuer................................. 5
Section 4.11. Machinery, Equipment or
Personal Property Purchased
by the Tenant................................................
5
Section 4.12. Project is Property of the
Issuer............................ 5
Section 4.13. Kansas Retailers' Sales
Tax.................................. 5
Section 4.14. No Warranty by the
Issuer.................................... 6
Section 4.15. Enforcement of Contracts and
Surety Bonds.................... 6
(i)
<PAGE>
ARTICLE V
RENTAL PAYMENTS
Section 5.1. Basic
Rent...................................................
6
Section 5.2. Acquisition of Bonds
by the Tenant........................... 6
Section 5.3. Additional
Rent.............................................. 6
Section 5.4. Prepayment of Basic
Rent..................................... 7
Section 5.5. Rent Payable Without
Abatement or Setoff..................... 7
Section 5.6. Deposit and
Application of Rent by Trustee................... 7
Section 5.7. Net
Lease....................................................
7
ARTICLE VI
INSURANCE
Section 6.1. Insurance as a
Condition to Disbursement..................... 7
Section 6.2. Insurance After
Completion................................... 8
Section 6.3. General Insurance
Provisions................................. 8
Section 6.4. Title
Insurance..............................................
8
ARTICLE VII
IMPOSITIONS
Section 7.1.
Impositions..................................................
8
Section 7.2. Receipted
Statements......................................... 8
Section 7.3. The Issuer May Not
Sell Its Ownership Interest............... 8
Section 7.4. Contest of
Impositions....................................... 9
ARTICLE VIII
USE AND MAINTENANCE OF THE PROJECT
Section 8.1. Use of
Project............................................... 9
Section 8.2. Repairs and
Maintenance...................................... 9
Section 8.3. Environmental
Matters........................................ 9
Section 8.4.
Utilities....................................................
9
Section 8.5. Liability of
Tenant.......................................... 9
ARTICLE IX
SUBLEASE AND ASSIGNMENT
Section 9.1. Sublease by the
Tenant....................................... 9
Section 9.2. Assignment of
Lease.......................................... 10
ARTICLE X
ADDITIONAL COVENANTS
Section 10.1. Surrender of
Possession...................................... 10
Section 10.2. Indemnification by the
Tenant................................ 10
Section 10.3. Continuing
Disclosure........................................ 10
Section 10.4. Financial Statements and
Annual Budget....................... 10
Section 10.5. Investment Tax Credit;
Depreciation.......................... 11
Section 10.6. Security
Interests........................................... 11
Section 10.7. Additional Covenants of the
Tenant........................... 11
Section 10.8. Additional Covenants of the
Issuer........................... 11
ARTICLE XI
REMOVAL OF MACHINERY AND EQUIPMENT; IMPROVEMENTS TO THE PROJECT
Section 11.1. Removal, Disposition and
Substitution of Machinery
and Equipment................................................
12
Section 11.2. Additions, Improvements,
Modifications and Alterations
to the Project...............................................
12
Section 11.3. Additional Improvements on
the Land.......................... 12
Section 11.4. Permits and
Authorizations................................... 13
Section 11.5. Mechanics'
Liens............................................. 13
(ii)
<PAGE>
ARTICLE XII
OPTION TO EXTEND TERM
Section 12.1. Option to Extend
Term........................................ 13
ARTICLE XIII
OPTION TO PURCHASE PROJECT
Section 13.1. Option to Purchase
Project................................... 13
Section 13.2. Quality of
Title............................................. 13
Section 13.3. Purchase
Price............................................... 14
Section 13.4. Closing of
Purchase.......................................... 14
Section 13.5. Effect of Failure to
Complete Purchase....................... 14
Section 13.6. Application of Condemnation
Awards if the Tenant
Purchases Project............................................
14
Section 13.7. Obligation to Purchase
Project............................... 14
ARTICLE XIV
OPTION TO PURCHASE UNIMPROVED PORTIONS OF LAND
Section 14.1. Option to Purchase
Unimproved Portions of Land............... 14
Section 14.2. Quality of
Title............................................. 15
Section 14.3. Purchase
Price............................................... 15
Section 14.4. Closing of
Purchase.......................................... 15
Section 14.5. Effect of Purchase on
Lease.................................. 15
Section 14.6. Effect of Failure to
Complete Purchase....................... 15
ARTICLE XV
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 15.1. Damage and
Destruction....................................... 15
Section 15.2.
Condemnation.................................................
16
ARTICLE XVI
TERMINATION BY REASON OF CHANGE OF CIRCUMSTANCES
Section 16.1. Termination by Reason of
Change of Circumstances............. 16
ARTICLE XVII
REMEDIES ON DEFAULT
Section 17.1. Remedies on
Default.......................................... 16
Section 17.2. Survival of
Obligations...................................... 17
Section 17.3. Performance of the Tenant's
Obligations by the Issuer........ 17
ARTICLE XVIII
MISCELLANEOUS PROVISIONS
Section 18.1. Rights and
Remedies.......................................... 17
Section 18.2. Waiver of
Breach............................................. 17
Section 18.3. The Issuer Shall Not
Unreasonably Withhold Consents
and Approvals................................................
17
Section 18.4.
Amendments...................................................
18
Section 18.5.
Notices......................................................
18
Section 18.6. Construction and
Enforcement................................. 18
Section 18.7.
Severability.................................................
18
Section 18.8. Successors and
Assigns....................................... 18
Section 18.9.
Headings.....................................................
18
Section 18.10.
Counterparts.................................................
18
Section 18.11. Governing
Law................................................ 18
Signatures...................................................S-1
Acknowledgments..............................................S-1
Appendix A - Form of Certificate for Payment of Project Costs
Schedule I - Property Subject to Lease
(iii)
<PAGE>
LEASE
THIS
LEASE, made and
entered into as of February 1, 2001, by and between
the UNIFIED GOVERNMENT OF WYANDOTTE
COUNTY/KANSAS
CITY, KANSAS, a municipal
corporation and political subdivision of the State of
Kansas, as Issuer,
and
KANSAS EPA LABORATORY, LLC, a Missouri
limited liability company, as Tenant.
WITNESSETH:
WHEREAS,
the Issuer is a municipal corporation and political
subdivision
duly organized and existing under the laws
of the State, with
full lawful power
and authority to enter into this Lease by
and through its governing body; and
WHEREAS,
the Issuer,
in furtherance of the purposes and
pursuant to the
provisions of the Act, and in order to promote, stimulate and develop the
general economic welfare and prosperity of the Issuer and the State, has
proposed and does hereby propose that it
shall:
(a) construct the Project;
(b) lease the Project
to the Tenant for the
rentals and upon the
terms and
conditions hereinafter set forth; and
(c) issue, for the
purpose of paying the costs of the Project, the
Bonds
under and pursuant to and subject to the provisions of the Act and
the
Indenture, said
Indenture being incorporated herein by reference and
authorized
by an ordinance of the governing body of the Issuer; and
WHEREAS,
the Tenant,
pursuant to the
foregoing proposals of
the Issuer,
desires to lease the Project from the Issuer for the rentals
and upon the terms
and conditions hereinafter set forth;
NOW,
THEREFORE, in
consideration of the premises and the mutual covenants
and agreements herein set forth, the Issuer and the Tenant do
hereby covenant
and agree as follows:
ARTICLE I
DEFINITIONS
SECTION
1.1. DEFINITIONS. In addition to the words, terms and phrases
elsewhere defined in this Lease,
capitalized
words, terms and phrases as used
herein shall have the meanings given to
such words, terms and phrases in SECTION
101 of the Indenture (which definitions are hereby
incorporated by
reference),
unless the context or use indicates another
or different meaning or intent.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
SECTION
2.1. REPRESENTATIONS
OF THE TENANT. The
Tenant hereby represents
and warrants to the Issuer as follows:
(a) The Tenant (i) is a limited liability company duly organized,
validly
existing and in good standing under the laws of the State of
Missouri,
and is qualified to transact business under the laws of the
State,
(ii) has the power and
authority to own its
properties and assets
and to
carry on its business as now being conducted and as contemplated
by
this
Lease and (iii) has
the full legal right,
power and authority to
execute
and deliver this Lease and to perform all the undertakings of the
Tenant
thereunder.
(b) The execution,
delivery and
performance
of this Lease by
the
Tenant,
the consummation of the transactions contemplated hereby, and the
fulfillment of the
terms and conditions hereof do not and will not
conflict
with or result in a
breach of any of the terms or conditions of
its
Articles of
Organization or Operating Agreement or any restriction,
agreement
or instrument to which
the Tenant is now a party or by which it
is bound
or to which any property of the Tenant is subject, and do not
and
will not
constitute a default under any of the foregoing, or to the best
of the
Tenant's knowledge, cause the Tenant to be in violation of any
law,
ordinance,
decision, order, decree, rule or regulation of any court
or
governmental
authority having
jurisdiction
over the Tenant or its
properties, including
the Project, and do
not and will not result in the
creation
or imposition of any lien, charge or encumbrance of any nature
upon any
of the property or assets of the Tenant contrary to the terms of
any
instrument or
agreement to which the Tenant is a party or by which it
is
bound.
(c) There are no actions, suits, proceedings, inquiries or
investigations at law
or in equity pending
or, to the knowledge
of the
Tenant,
threatened
against the Tenant or any of its members or any
property
of the Tenant or any of its members in any court or before
any
federal,
state, municipal or
other governmental agency, which, if decided
adversely
to the Tenant or any of its members, would have a material
adverse
effect upon the Tenant
or any of its members or upon the business
or
properties
of the Tenant or any
of its members or upon
their power,
authority
and right to enter
into this Lease.
Neither the Tenant nor any
of its
members is in default with respect to any order of any court
or
governmental agency.
<PAGE>
(d) The operation of the Project in the manner presently
contemplated and as
described herein will not conflict in any material
respect
with any existing zoning, water or air pollution or other
ordinance,
order, law or
regulations applicable
thereto. To the best
of
the
Tenant's knowledge the
Project has been
designed in accordance
with
all
applicable
federal, state and local laws, ordinances, rules and
regulations relating
to zoning, building, safety and environmental
quality.
All necessary permits,
licenses, consents and permissions with
respect to
the Project have been
obtained as of the
date of execution of
this Lease
to the extent that the same are obtainable as of such date.
(e) Neither
the Tenant nor any of
its members (i) is in default in
the
payment of the
principal of or interest on any indebtedness for
borrowed
money or (ii) is in
default under any
instrument
or agreement
under and
subject to which any
indebtedness for
borrowed money has
been
issued.
(f) The Tenant has filed all federal and state income tax returns
which,
to the knowledge of the Tenant,
are required to be
filed and has
paid all
taxes shown on said returns and all assessments and governmental
charges
received by it to the extent that they have become due.
(g) To the best of the Tenant's knowledge, no member of the
governing
body of the
Issuer or any other
officer of the Issuer
has any
significant or conflicting interest, financial, employment or otherwise,
in the
Tenant, the Project or in the transactions contemplated hereby.
SECTION
2.2. REPRESENTATIONS
OF THE ISSUER. The
Issuer hereby represents
and warrants to the Tenant as follows:
(a) The Issuer is a municipal corporation and political
subdivision
duly
organized and existing under the Constitution and laws of the
State.
(b) Under the
provisions of the Act,
the Issuer has the power to
enter into
and perform the transactions contemplated by this Lease and the
Indenture
and to carry out its obligations hereunder and thereunder. By
proper
action of its governing body, the Issuer has duly authorized the
execution
and delivery of this
Lease and the
Indenture and the issuance,
execution
and delivery of the Bonds.
(c) The execution,
delivery and
performance of this
Lease and the
Indenture
by the Issuer, the consummation of the transactions
contemplated
hereby,
and the fulfillment of
the terms and conditions hereof do not and
will
not conflict with or result in a breach of any of the terms or
conditions
of any restriction, agreement or instrument to which the Issuer
is now a
party or by which it is bound or to which any property of the
Issuer is
subject, and do not
and will not constitute a default under any
of the
foregoing,
or to the best of the
Issuer's knowledge, cause the
Issuer to
be in violation of any law, ordinance, decision, order, decree,
rule
or regulation of any court or governmental authority having
jurisdiction over the Issuer or its properties, including the
Project, and
do not and
will not result in the
creation or imposition of any lien,
charge or
encumbrance of any
nature upon any of the property or assets of
the Issuer
contrary to the terms
of any instrument or
agreement to which
the Issuer
is a party or by which it is bound.
(d) The Issuer
has not, in whole or in part, assigned, leased,
hypothecated or
otherwise created any
other interest in, or disposed of,
or
caused or permitted any lien, claim or encumbrance to be placed
against,
the Project,
except for this Lease,
the Sublease and the pledge
of the Project pursuant to the
Indenture.
(e) The Issuer has
obtained the consent
to and/or approval of
the
issuance
of the Bonds by each municipal corporation or political
subdivision the consent or approval of which is required by the
provisions
of the
Act.
(f) To the
best of the Issuer's knowledge, no member of the
governing
body of the
Issuer or any other
officer of the Issuer
has any
significant or conflicting interest, financial, employment or otherwise,
in the
Tenant, the Project or in the transactions contemplated hereby.
ARTICLE III
LEASE OF THE PROJECT
SECTION
3.1. GRANTING OF LEASEHOLD ESTATE. The Issuer hereby rents,
leases
and lets to the Tenant, and the Tenant hereby rents, leases and hires from
Issuer, the Project, subject to Permitted
Encumbrances, for the rentals and upon
and subject to the terms and conditions
contained herein, for the Basic Term.
The Tenant agrees that it will not create
or allow to be created any Encumbrance
upon the Project other than Permitted
Encumbrances
SECTION
3.2. POSSESSION.
The Issuer covenants
and agrees that as long as
the Tenant shall not be in default
hereunder,
the Tenant
shall have sole
and
exclusive possession of the Project (subject to the Issuer's
right of access
pursuant to SECTION 3.3 hereof and subject
to the Sublease
pursuant to
SECTION
9.1 hereof) and shall and may peaceably and quietly have, hold and enjoy the
Project during the Term. The Issuer covenants and agrees that it will
not take
any action, other than pursuant to ARTICLE XVII hereof,
to prevent the
Tenant
from having quiet and peaceable
possession
and enjoyment of the
Project during
the Term and will, at the request and
expense of the Tenant,
cooperate with the
Tenant in order that the Tenant may have
quiet and peaceable possession and
enjoyment of the Project and will defend
the Tenant's enjoyment
and possession
thereof against all parties.
2
<PAGE>
SECTION
3.3. ACCESS TO THE
PROJECT. The Issuer,
for itself and its
duly
authorized representatives and agents,
including the Trustee, reserves the right
to enter the Project at all reasonable times during usual business hours
throughout the Term for the purpose of (a)
examining and
inspecting the
same,
(b) performing such work made necessary by
reason of the Tenant's
default under
any of the provisions of this Lease,
and (c) while a Lease
Event of Default is
continuing hereunder, for the purpose of exhibiting the
Project to prospective
purchasers, lessees or mortgagees.
The Issuer may, during
the progress of said
work mentioned in (b) above, keep and store on the Project all necessary
materials, supplies and equipment and shall not be liable for necessary
inconvenience, annoyances, disturbances, loss of business or other damage
suffered by reason of the performance of any such work or the storage of
such
materials, supplies and equipment.
SECTION
3.4. GRANTING OF
EASEMENTS.
If no Lease Event of
Default under
this Lease shall have occurred and be
continuing, the Tenant may, at any time or
times, (a) grant easements, licenses and other rights or privileges in the
nature of easements with respect to any
property included in
the Project, free
from any rights of the Issuer or the
Owners, or (b) release existing easements,
licenses, rights-of-way and other rights or privileges, all with or without
consideration and upon such terms and conditions
as the Tenant shall determine,
and the Issuer agrees, to the extent that it may legally do so, that it will
execute and deliver any instrument
necessary or appropriate to confirm and grant
or release any such easement, license,
right-of-way or other
right or privilege
or any such agreement or other arrangement,
upon receipt by the Issuer of: (i) a
copy of the instrument of grant or release or of the agreement or other
arrangement, (ii) a written application signed by the Authorized Tenant
Representative requesting such instrument,
and (iii) a
certificate executed by
the Tenant stating that (A) such grant or
release is not
detrimental
to the
proper conduct of the business of the
Tenant, and (B) such grant or release will
not impair the effective use or interfere
with the efficient and economical
operation of the Project and will not
materially adversely
affect the
security
of the Owners. If the instrument of grant
shall so provide, any such easement or
right and the rights of such other parties
thereunder
shall be superior to
the
rights of the Issuer and the Owners and
shall not be affected by any termination
of this Lease or default on the part of the
Tenant hereunder. If
no Lease Event
of Default shall have happened and be continuing, any payments or other
consideration received by the Tenant for any such grant
or with respect to
or
under any such agreement or other
arrangement
shall be and remain
the property
of the Tenant, but, in the event of the
termination
of this Lease
because of
Default of the Tenant, all rights then
existing of the Tenant with respect to or
under such grant shall inure to the benefit
of and be exercisable by the Issuer.
ARTICLE IV
ISSUANCE OF BONDS; PURCHASE AND CONSTRUCTION OF THE PROJECT
SECTION
4.1. ISSUANCE OF SERIES 2001 BONDS; ADDITIONAL BONDS.
(a) In
order to provide funds
for the payment of the
Project Costs and
Costs of Issuance, the Issuer agrees that
it will issue and sell the Series 2001
Bonds and cause the Series 2001 Bonds to be delivered to the Series 2001
Placement Agent as provided in the
Indenture.
The proceeds of the
sale of the
Series 2001 Bonds shall be paid over to the
Trustee for the account of the
Issuer. The Trustee shall promptly deposit
the proceeds of the sale of the Bonds
into the funds and accounts provided in the
Indenture, to be used and applied as
provided in the Indenture.
(b) The
Issuer may in its discretion authorize the issuance of
Additional
Bonds from time to time upon the terms
and conditions and for the purposes
provided in SECTION 209 of the Indenture. If the Tenant is not in default
hereunder, the Issuer will, at the request
of the Tenant, from time to time, use
its best efforts to issue the amount of Additional Bonds specified by the
Tenant; provided, however, that the terms and provisions of such Additional
Bonds, the purchase price to be paid therefor and the manner in which the
proceeds therefrom are to be disbursed shall have been approved in
writing by
the Tenant; and provided further that the Tenant and the Issuer
shall, if
necessary, have entered into an amendment to this Lease to provide for
additional Rental Payments in an amount at
least sufficient to pay the principal
of, premium, if any, and interest on the
Additional Bonds when
due. The terms
and provisions of any Additional
Bonds shall be set
forth in the
Supplemental
Indenture authorizing such Additional
Bonds.
SECTION
4.2. INITIAL ACQUISITION OF LAND AND IMPROVEMENTS FROM TENANT.
The
Tenant shall prior to or concurrently with
the issuance of the Bonds, convey or
cause to be conveyed to the Issuer the Land
and such of the
Improvements as are
then completed, installed or in progress.
Concurrently with such conveyance, the
Tenant shall deliver a deed and any other
necessary instruments of transfer to
the Issuer and make provisions for the discharge of any liens or
encumbrances
incurred by it in connection with the
construction,
installation or development
of the Project.
SECTION
4.3. ACQUISITION,
PURCHASE, CONSTRUCTION
AND INSTALLATION OF THE
PROJECT. The Issuer and the Tenant agree
that the Issuer will,
but solely from
the moneys in the Project Fund and the accounts contained therein, and the
Tenant will, as the agent of the Issuer, acquire, purchase, construct and
install the Project in accordance with the
Plans and Specifications. The Tenant
may make minor changes in and to the Plans
and Specifications, but major changes
shall only be made with the prior
written approval of the Trustee.
The Tenant
agrees that it will use its best
efforts to cause the
acquisition,
purchase,
construction and installation of the Project to be completed as soon as
practicable with all reasonable
dispatch.
SECTION
4.4. PROJECT CONTRACTS; PROJECT DOCUMENTS.
(a) It is
recognized
by the parties
hereto that prior to
the execution
hereof the Tenant has entered into a
contract or contracts
with respect to
the
acquisition and/or construction of the Improvements
(the "PROJECT
CONTRACTS").
Prior to the execution hereof, certain work has been or may have
been performed
on the Project pursuant to said Project Contracts or otherwise. The Tenant
hereby conveys, transfers and assigns to
the Issuer all of the Tenant's interest
in the Project Contracts and the Issuer hereby designates the Tenant as the
Issuer's agent for the purpose of executing and performing the Project
Contracts. After the execution hereof, the Tenant shall cause the Project
Contracts to be fully performed by the contractor(s) thereunder in accordance
with the terms thereof, and the Tenant
covenants to cause the Improvements to be
acquired, constructed and/or completed in
accordance with the Project Contracts.
The Tenant warrants that the construction
and/or acquisition of the Improvements
in accordance with said Project Contracts will result in the Project
being
suitable for use by the Tenant for its
purposes. Any and all amounts received by
the Issuer, the Trustee or the Tenant from any of the contractors or other
suppliers by way of breach of contract,
refunds or
adjustments
shall become a
part of and be deposited in the Project
Fund or the accounts contained therein.
3
<PAGE>
(b) The Tenant, at its own cost and expense,
will deliver to the
Trustee
copies of the following documents (which shall be collectively referred to
herein as the "PROJECT DOCUMENTS") concurrently with the initial issuance and
delivery of the Series 2001 Bonds or at such time as such
documents become
available and in any event by such time as
work is commenced on
the portion of
the Project to which they relate:
(i) Plans and Specifications. All Plans and Specifications.
(ii) Construction
Contracts. The
guaranteed maximum
price general
contractor's contract for the Project.
(iii) Performance and
Payment Bonds.
Performance and payment bonds
in amounts
equal to one-hundred
percent of the Project Costs insuring the
Tenant,
the Issuer and the
Trustee, as their
respective
interests may
appear
against all delays in
completion of all
construction
contracts,
against
failure timely to complete the Project in accordance with the
Plans and
Specifications,
and against
claims for payment to
cover labor
and
material used or reasonably required for use in the performance of
the
construction contracts.
(iv) Title Insurance.
A standard ALTA
leasehold policy or policies
of title
insurance, or a
commitment therefor,
showing the Trustee as the
insured
party, with respect to
the Project, together
with an endorsement
equivalent
to ALTA 9 and an
appropriate ALTA
zoning endorsement,
in an
aggregate
amount not less than
the principal
amount of the Series
2001
Bonds,
which policy or policies shall insure that the Tenant holds
good
and
marketable leasehold
title to the Project,
subject only to Permitted
Encumbrances.
(v) Survey. Survey of
the Land, prepared by
a surveyor licensed in
the State
of Missouri in accordance with the standard detail requirements
for land
title surveys adopted
by ALTA and ACSM, as revised and in effect
on the
date of such survey,
and certified to the Trustee not more than 90
days prior
to the date of
original issuance
of the Series
2001 Bonds,
indicating
location of any
existing facilities on
the real property,
or
such
surveys to be in such other form as may be acceptable to the
Trustee.
(vi) Environmental Audit. A phase I and phase II environmental
audit
of the
Project.
(vii) Insurance.
Certificate(s)
of insurance demonstrating
compliance
with the provisions of ARTICLE VI hereof.
(viii) Assignment of Construction Documents and General Contractor
Consent.
An assignment of the
construction
documents from the
Tenant to
the
Trustee and a consent to such assignment from the general contractor
employed
for the Project and the agreement of such general contractor,
to
the effect
that upon a Lease
Event of Default by the Tenant under this
Lease,
said general contractor will, at the request of the Trustee,
continue
performance under its contract with the Tenant in accordance
with
the terms
thereof, provided it is reimbursed in accordance with said
contract
for all services,
work, labor and materials rendered under such
contract.
(ix) Assignment
of Architectural and Engineering Documents and
Architect
Consent. An assignment of the architectural and engineering
documents
from the Tenant to the Trustee and a consent to such assignment
from the
architect employed for the Project and the agreement of the
architect,
to the effect that
upon a Lease Event of Default by the Tenant
under this
Lease, said
architect will, at the request of the Trustee,
continue
performance under its contract with the Tenant in accordance
with
the terms
thereof, provided it is reimbursed in accordance with said
contract
for all services rendered under such contract.
(x) Sublease. A fully-executed copy of the Sublease for the
Project.
The
Tenant covenants and agrees to obtain and
thereafter
promptly to
deliver to the Trustee all remaining
construction
contracts,
purchase orders,
approvals, licenses and permits required or
necessary for the Project.
SECTION
4.5 PAYMENT OF PROJECT COSTS FOR BUILDINGS, STRUCTURES,
FACILITIES, ADDITIONS AND IMPROVEMENTS. The
Issuer hereby agrees to pay for the
construction and installation of the buildings, structures, facilities,
additions and improvements constituting a part of the
Improvements, but
solely
from the Project Fund and the accounts
contained therein, and
hereby authorizes
and directs the Trustee to pay for the same,
but solely from the
Project Fund
and the accounts contained therein, from time to time, upon receipt by the
Trustee of a certificate signed by the
Authorized Tenant Representative and Koll
Construction, L.P. and approved by the Project
Consultant in the form set forth
by APPENDIX A hereto which is incorporated herein by reference. The sole
obligation of the Issuer under this section shall be to cause the Trustee
to
make such disbursements upon receipt of such certificates. The Tenant agrees
that the maximum amount of funds to be disbursed
from the Project Fund for Cost
of Issuance is $155,556.09 and the maximum
amount for non-construction contract
Project Costs disbursements from the
Project Fund is $1,156,812.50. Any Costs of
Issuance or non-construction contract project costs
disbursement requests shall
be made on the form set forth in APPENDIX A signed by the Authorized Tenant
Representative, but shall not require
signatures from Koll Construction, L.P. or
the Project Consultant. The Trustee may rely fully on any
such directions
and
shall not be required to make any
investigation in connection therewith, except
that the Trustee shall investigate
requests for
reimbursements made directly to
the Tenant and shall require such
supporting evidence as
would be required by a
reasonable and prudent trustee.
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SECTION
4.6. PAYMENT OF PROJECT COSTS FOR MACHINERY, EQUIPMENT AND
PERSONAL PROPERTY. The Issuer hereby agrees to pay for the purchase and
acquisition of any machinery, equipment and personal
property constituting a
part of the Improvements, but solely from the Project Fund and the accounts
contained therein, and hereby authorizes and directs
the Trustee to pay for the
same, but solely from the Project Fund and
the accounts contained therein, from
time to time, upon receipt by the Trustee of a certificate signed by the
Authorized Tenant Representative and approved by the Project
Consultant in the
form provided by APPENDIX A hereto
which is incorporated
herein by
reference,
which certificate is accompanied by the
following specific information:
(a) name of the seller;
(b) name of the manufacturer;
(c) a copy of the
seller's invoice,
purchase order or other like
document
evidencing the
purchase by the Tenant of such machinery and/or
equipment;
(d) common descriptive name of machinery or equipment;
(e) manufacturer's or seller's technical description of machinery
or
equipment;
(f) capacity or similar designation;
(g) serial number, if any; and
(h) model number, if any.
The sole obligation of the Issuer under this Section shall be to cause the
Trustee to make such disbursements upon receipt of said certificates and
information. The Trustee may rely fully on
any such certificate and shall not be
required to make any independent
investigation in
connection therewith,
except
that the Trustee shall investigate
requests for
reimbursements made directly to
the Tenant and shall require such
supporting evidence as
would be required by a
reasonable and prudent trustee.
All machinery,
equipment and personal
property
acquired, in whole or in part, from funds deposited in the
Project Fund or any
accounts contained therein pursuant to this Section
shall be and become a part
of the Project.
SECTION
4.7. COMPLETION OF PROJECT. The Tenant warrants that the
Project,
when completed, will be necessary or useful in its
development for use by
the
Tenant for its purposes. The Issuer and the Tenant each
covenant and agree
to
proceed diligently to complete the Project on or
before the Completion
Date.
Upon completion of the Project and
acceptance of the
Project by the Subtenant,
the Tenant shall cause the Authorized Tenant Representative to deliver a
Certificate of Completion to the
Trustee.
SECTION
4.8. DEFICIENCY OF PROJECT FUND. If the Project Fund and the
accounts contained therein shall be
insufficient to pay fully all Project Costs
and to fully complete the Project,
lien free,
the Tenant
covenants to pay
the
full amount of any such deficiency by making payments directly to the
contractors and to the suppliers of
materials, machinery,
equipment,
property
and services as the same shall become due,
and the Tenant shall
indemnify and
hold harmless the Issuer from any
obligation to pay such deficiency.
SECTION
4.9. SURPLUS IN
PROJECT FUND. In the event funds are remaining in
the Project Fund or any of the accounts contained therein on the date the
Certificate of Completion is furnished to Trustee
or on the Completion
Date,
whichever shall first occur, such remaining funds shall be transferred by
the
Trustee to the applicable account within
the Debt Service Fund on the Completion
Date and shall be applied in accordance with the provisions of SECTION 504 of
the Indenture.
SECTION
4.10. RIGHT OF ENTRY BY THE ISSUER. The duly authorized agents of
the Issuer shall have the right at any
reasonable
time prior to the
completion
of the Project to have access to the Project or any parts thereof for the
purpose of inspecting and supervising the acquisition, installation or
construction thereof.
SECTION
4.11. MACHINERY,
EQUIPMENT OR PERSONAL
PROPERTY PURCHASED BY THE
TENANT. Any item of machinery, equipment or personal property for which the
entire purchase price is paid by the Tenant
with the Tenant's own funds, and no
part of the purchase price of which is paid
from funds deposited
in the Project
Fund or any of the accounts contained therein pursuant to the terms of this
Lease or the Indenture, then such item of machinery, equipment or personal
property shall be deemed the property of the Tenant and shall not be
deemed a
part of the Project.
SECTION
4.12. PROJECT IS PROPERTY OF THE ISSUER. Except as otherwise
specifically provided herein, all
buildings,
improvements and work constituting
a part of the Project, all work and materials on the Project as such work
progresses, and the Project as fully
completed, anything
under this Lease which
becomes, is deemed to be, or constitutes a
part of the Project,
and the Project
as repaired, rebuilt, rearranged, restored or replaced by the Tenant
under the
provisions of this Lease, shall immediately
when erected or installed become the
absolute property of the Issuer.
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SECTION
4.13. KANSAS RETAILERS' SALES TAX.
(a) The
parties have entered into this Lease in contemplation that, under
the existing provisions of K.S.A.
79-3606(d) and other applicable laws, sales of
tangible personal property or services
purchased in connection with construction
of the Project are entitled to exemption from the tax imposed by the
Kansas
Retailers' Sales Tax Act. The parties agree that the Issuer shall, upon the
request of and with the Tenant's
assistance, promptly
obtain from the State and
furnish to the contractors and suppliers an exemption certificate for the
construction of the Project. The Tenant covenants that said exemption
shall be
used only in connection with the purchase of tangible personal property or
services becoming a part of the
Project.
(b) The
parties further acknowledge that, under the existing provisions
of
K.S.A. 79-3603(h), a tax may be levied at the
currently lawful rate upon the
gross receipts derived by the Issuer from the renting or leasing of personal
property, if any, purchased from the
proceeds of the Bonds. The Tenant agrees to
pay, as Additional Rent hereunder, the full amount of any such tax as
hereinafter determined. Such payments, if required,
shall be made at the
same
time as the installments of Basic Rent provided for hereby,
and shall be made
directly to the Issuer, or in such other manner as the Issuer may from time
to
time direct in writing. It shall be the duty of the Issuer
to promptly file any
returns and remit any such taxes to the
State, or to make
suitable provision
therefor, in accordance with applicable laws, rulings and regulations. The
Issuer's taxable gross receipts shall be
determined by multiplying that portion
of each installment of Basic Rent which
represents the payment
of principal of
the Bonds by a fraction in which the total proceeds of the Bonds is the
denominator, and the amount expended from Bond proceeds for
the acquisition of
personal property (which amount shall be
determined by the Tenant and set forth
in a certificate delivered to the Issuer,
the Tenant and the Trustee immediately
following completion of construction of the Project) is the
numerator.
The
amount of each installment of tax due shall be determined by
multiplying
the
Issuer's taxable gross receipts determined in accordance with the preceding
sentence (unless a different determination has been made in a judicial or
administrative proceeding as hereinafter provided), by such other tax rate
percentage as may from time to time be imposed by applicable law.
Notwithstanding the foregoing provisions, if it shall be determined in any
judicial or administrative proceeding that the Issuer's
taxable gross receipts
are in an amount other than the amount determined by applying the foregoing
provisions, the Tenant shall be obligated to pay and hereby
agrees to pay the
full amount of such tax, based upon such judicially or administratively
determined gross receipts, it being the
intent of this provision that the Tenant
shall pay in full the amount of any such tax, but no more than such amount,
which the Issuer is obligated to collect
under the present or any future laws of
the State.
SECTION
4.14. NO WARRANTY BY THE ISSUER.
The Tenant
recognizes
that,
because the components of the Project have been and are
to be designated
and
selected by it, THE ISSUER HAS NOT MADE AND
WILL NOT MAKE AN
INSPECTION OF THE
PROJECT OR OF ANY FIXTURE OR OTHER ITEM
CONSTITUTING A PORTION THEREOF, AND THE
ISSUER MAKES NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED OR OTHERWISE,
WITH RESPECT TO THE SAME OR THE LOCATION, USE, DESCRIPTION, DESIGN,
MERCHANTABILITY, FITNESS FOR USE FOR ANY PARTICULAR PURPOSE, CONDITION OR
DURABILITY THEREOF, OR AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN,
IT BEING AGREED THAT ALL RISKS INCIDENT THERETO ARE TO BE BORNE BY THE
TENANT.
IN THE EVENT OF ANY DEFECT OR DEFICIENCY OF ANY NATURE IN THE PROJECT OR ANY
FIXTURE OR OTHER ITEM CONSTITUTING A
PORTION THEREOF,
WHETHER PATENT OR LATENT,
THE ISSUER SHALL HAVE NO RESPONSIBILITY
OR LIABILITY WITH
RESPECT THERETO.
THE
PROVISIONS OF THIS SECTION 4.14 HAVE BEEN
NEGOTIATED
AND ARE INTENDED TO BE
A
COMPLETE EXCLUSION AND NEGATION OF ANY WARRANTIES OR REPRESENTATIONS BY THE
ISSUER, EXPRESS OR IMPLIED, WITH RESPECT
TO THE PROJECT OR ANY FIXTURE OR OTHER
ITEM CONSTITUTING A PORTION
THEREOF, WHETHER ARISING PURSUANT TO THE UNIFORM
COMMERCIAL CODE OR ANY OTHER LAW NOW OR
HEREAFTER IN EFFECT.
SECTION
4.15. ENFORCEMENT OF CONTRACTS AND SURETY BONDS. In the event of
a
material default of any contractor or subcontractor under any construction
contract or any other contract made in connection
with the Project,
or in the
event of a material breach of warranty with respect to any materials,
workmanship or performance, the Tenant will promptly proceed,
either separately
or in conjunction with others, to pursue diligently the remedies of the
Tenant
against the contractor or subcontractor in default and against any surety
on a
bond securing the performance of such
contract. Any amounts
recovered by way of
damages, refunds, adjustments or otherwise in connection
with the
foregoing,
after deduction of expenses incurred in
such recovery and after reimbursement to
the Tenant of any amounts theretofore paid by the Tenant and not previously
reimbursed to the Tenant for correcting or remedying of the
default which gave
rise to the proceedings against the
contractor,
subcontractor or surety, shall
be paid into the Project Fund if received
before the date of
completion of the
Project, and otherwise shall be deposited
into the Debt Service Fund and applied
as provided in SECTION 604 of the
Indenture.
ARTICLE V
RENTAL PAYMENTS
SECTION
5.1. BASIC RENT. The Issuer reserves and the Tenant covenants and
agrees to pay to the Trustee during the Basic Term, for the account of the
Issuer, for deposit in the Debt Service
Fund and the accounts contained therein,
on each Basic Rent Payment Date, Basic Rent
in immediately available funds.
SECTION
5.2. ACQUISITION OF
BONDS BY THE TENANT.
In the event the Tenant
acquires any Outstanding Bonds, it may present the same to the Issuer for
cancellation, and upon such cancellation,
the Tenant's
obligation to pay Basic
Rent shall be reduced accordingly, but in
no event shall the Tenant's obligation
to pay Basic Rent be reduced in such a
manner that the Trustee shall not have on
hand in the Debt Service Fund or the
accounts contained therein funds sufficient
to pay the maturing principal of, premium,
if any, and interest
on Outstanding
Bonds as and when the same shall become due
and payable in
accordance with
the
provisions of the Indenture.
SECTION
5.3. ADDITIONAL
RENT. Within thirty (30) days after receipt
of
written notice thereof, the Tenant shall pay to the
Trustee, for the account of
the Issuer, as Additional Rent, the
following amounts:
(a) all reasonable fees, charges and expenses, including agent and
counsel
fees, of the Trustee
and the Paying Agents
incurred under this
Lease, the
Indenture or any other document entered into in connection with
the
Bonds;
6
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(b) all reasonable
costs incident to the payment of the
principal
of,
premium, if any, and interest on the Bonds as the same becomes due
and
payable,
including all costs and expenses in
connection
with the call,
redemption
and payment of all Outstanding Bonds;
(c) all reasonable fees, charges and expenses, including agent and
counsel
fees, reasonably
incurred in connection
with the enforcement
of
any
rights against the Tenant or the Project under this Lease or the
Indenture
by the Issuer, the Trustee or the Owners, provided, however,
the
Tenant
shall not be obligated
to pay for such fees,
charges and expenses
as may be
incurred by the Issuer or the Trustee solely as a result of its
own gross
negligence or wrongful misconduct;
(d) an amount
sufficient to
reimburse the Issuer
for all expenses
reasonably
incurred by the Issuer
hereunder and in
connection
with the
performance of its obligations under this Lease or the Indenture;
and
(e)
all other payments
of whatever nature which the Tenant has
agreed to
pay or assume under the provisions of this Lease, the Indenture
or any
other document entered into in connection with the Bonds.
SECTION
5.4. PREPAYMENT OF
BASIC RENT. The Tenant
may at any time prepay
all or any part of the Basic Rent.
SECTION
5.5. RENT PAYABLE WITHOUT ABATEMENT OR SETOFF. The Tenant
covenants and agrees with and for the express benefit of the Issuer and the
Owners that all payments of Basic Rent and
Additional Rent shall
be made by the
Tenant as the same become due, and that the Tenant shall perform all of its
obligations, covenants and agreements hereunder without notice or demand and
without abatement, deduction, setoff,
counterclaim, recoupment or defense or any
right of termination or cancellation
arising from any
circumstance
whatsoever,
whether now existing or hereafter arising, and irrespective of whether the
Improvements shall have been acquired, started or completed, or whether the
Issuer's title to the Project or any part
thereof is defective or non-existent,
and notwithstanding any failure of consideration or
commercial frustration
of
purpose, the eviction or constructive eviction of the Tenant,
any Change of
Circumstances, any change in the tax or other laws of the United States of
America, the State, or any municipal corporation or political
subdivision of
either, any change in the Issuer's legal
organization or status, or any default
of the Issuer hereunder, and regardless of the invalidity
of any action of the
Issuer or any other event or condition whatsoever, and regardless of the
invalidity of any portion of this Lease, and the Tenant hereby waives the
provisions of any statute or other law now or
hereafter in effect
contrary to
any of its obligations, covenants or agreements under this Lease or which
releases or purports to release the Tenant therefrom. Nothing in this Lease
shall be construed as a waiver by the
Tenant of any rights or claims the Tenant
may have against the Issuer under this
Lease or otherwise, but any recovery upon
such rights and claims shall be had from the Issuer
separately,
it being the
intent of this Lease that the Tenant
shall be unconditionally and absolutely
obligated to perform fully all of its obligations, agreements and covenants
under this Lease (including the obligation to pay Basic Rent and Additional
Rent) for the benefit of the Owners.
SECTION
5.6. DEPOSIT AND APPLICATION O
