Exhibit 10.44
TENANT FACILITIES USE
AGREEMENT - E & Z Lines
FR Countermeasures Inc. and
American Ordnance LLC
This TENANT FACILITIES USE AGREEMENT
(“Agreement”) is between American Ordnance LLC, a
Delaware limited liability company, with an office at 2280 Highway
104 West, Suite 2, Milan, TN 38358 (AO) and FR Countermeasures,
Inc., a Delaware corporation, an affiliate of Flight Refuelling
Limited, with an office c/o FR Holdings Inc., at 10 Cobham Drive,
Orchard Park, New York, 14127 (“TENANT”) shall be
effective as of the date of the last signature.
The U. S. Government is the owner of
the Milan Army Ammunition Plant (“MLAAP”) and AO is the
U. S. Government’s Contractor at the MLAAP. AO has the
authority (Appendix A) to grant to the TENANT the right to use and
occupy Lines E and Z (more fully described on attached Appendix B,
which consists of approximately 102,531 square feet of useable
building space on 48.80 associated acres of land together with
reasonable access for cars, trucks and other vehicular traffic (the
Lines, land and access rights are collectively referred to as the
“Facilities”) for the manufacturing of pyrotechnic
devices, infrared countermeasure devices and related uses. The
right to use and occupy granted shall be in consideration of and
subject to this Agreement, which is accepted and agreed to by AO
and the TENANT. The TENANT acknowledges that this Agreement does
not convey any ownership interest in the Facilities to the
TENANT.
|
2.
|
DELIVERY OF
RIGHT TO USE THE FACILITIES
|
AO shall deliver the right to use
the Facilities to the TENANT on the effective date as determined in
the preamble above and such day also shall be deemed the
commencement date. Within five (5) business days of the
satisfaction of the conditions set forth in the preamble above, AO
and TENANT shall mutually agree upon the effective date and
commencement date in writing.
Unless sooner terminated as herein
provided, this Agreement shall be in effect for a term of ten
(10) years from the commencement date. This Agreement may be
extended for a ten-year bi-lateral period by written notice from
TENANT to AO at least ninety (90) days prior to the expiration
of the initial term or any preceding renewal term; said extension
shall be on the same terms and conditions as stated in this
Agreement, if approved by the U. S. Government as indicated in
Appendix A.
|
4.
|
FACILITIES USE
PAYMENT
|
Except as otherwise provided in this
Article 4, the TENANT shall pay to AO a monthly payment of $18,000
. Payment shall be paid to AO by the TENANT within fifteen
(15) calendar days of the monthly anniversary following the
effective date of this Agreement. The monthly payment excludes all
utilities, the responsibility of which is that of the TENANT to
supply. Notwithstanding the foregoing, in the event that AO is able
to obtain Armament Retooling and Manufacturing Support (ARMS)
funding for the repair, renovation and re-equipping of the
Facilities in an amount and otherwise upon terms and conditions
acceptable to TENANT, for the first seven (7) years of the
Term the monthly payment shall be the greater of $18,000 or one
eighty-fourth (1/84) of the amount of the ARMS funding. For
years 8 through 10 of this Agreement, the monthly payment shall be
as follows:
Year 8
$18,000
Year 9
$18,540
Year 10 $19,100
TENANT has provided at Appendix E
Flight Refuelling Limited’s guarantee for all obligations in
this Agreement.
|
|
|
|
|
|
|
|
|
American Ordnance
LLC
|
|
Page 1 of 8
|
|
E & Z 10-28-02
|
|
Company Confidential &
Proprietary Information
|
|
|
a.
|
Security-Deposit. Within fifteen
(15) business days of the effective date of this Agreement,
TENANT shall pay a security deposit to AO in an amount equal to the
amount of one (1) monthly payment as stated in Article 4.
above as security for the faithful performance of the
TENANT’s obligations under this Agreement (the
“Security Deposit”), AO may claim and retain such
amount of the Security Deposit as is reasonably necessary to cure
any defaults of the TENANT. If AO applies any part of the Security
Deposit to cure any default of the TENANT, the TENANT shall deposit
with AO upon demand, the amount so applied, so that AO shall have
the full amount of the initial Security Deposit on hand at all
times during the term of this Agreement. AO may commingle the
Security Deposit with other AO funds. The Security Deposit shall be
retained by AO for no more than thirty (30) days after the
termination of this Agreement; and thereafter, AO shall return the
Security Deposit or any remaining balance thereof, if any, to the
TENANT and AO shall pay TENANT interest accumulated on any
undisbursed amount of the Security Deposit at the rate of
2% per annum simple interest.
|
|
|
b.
|
Disposal
Deposit. Within fifteen (15) business days of the effective
date of this Agreement, TENANT shall pay a disposal deposit of
$56,250 to AO to cover the cost of disposal of any material
remaining at the Facilities after the end of the lease term
(“the Disposal Deposit”). AO may commingle the Disposal
Deposit with other AO funds. The Disposal Deposit shall be retained
by AO for no more than thirty (30) days after the termination
of this Agreement; and thereafter, AO shall return the Disposal
Deposit or any remaining balance thereof, if any, to the TENANT and
AO shall pay TENANT interest accumulated on any undisbursed amount
of the Disposal Deposit at the rate of 2% per annum simple
interest.
|
|
6.
|
CONDITION,
CARE, MAINTENANCE AND ALTERATION OF FACILITIES
|
|
|
a.
|
Representations
by AO regarding condition of the Facilities. AO represents and
warrants to TENANT that:
|
|
|
1)
|
The Facilities
have a right of access to a public road.
|
|
|
2)
|
Except for the
agreement between the TENANT and AO and AO’s prime contract
with the U.S. Government, AO has no knowledge of any other
outstanding leases or other agreements relating to the
Facilities.
|
|
|
3)
|
There are no
employees of AO that would, by reason of any governmental
regulations, employment contract or other reason become employees
of TENANT as a result of this Agreement.
|
|
|
4)
|
All utilities
necessary to service the Facilities are available to the Facilities
without the consent of any other person, other than the payment of
service charges to the utility provider. There are no facts or
conditions in existence that will result in the termination of the
present access from the Facilities to any utility services or to
existing highways and roads and AO has not done any act which will
result in the termination of such access or services, to the best
of AO’s knowledge.
|
|
|
5)
|
The Facilities
are serviced by water and sewer (sanitary and storm service) and
all plumbing, heating, HVAC, sewer, electrical and lighting
fixtures and systems at the Facilities are currently in good
working order and shall be in good working order on a mutually
agreed upon date.
|
|
|
6)
|
There are no
claims, actions, litigation, arbitration or other proceedings
pending against AO which relates to the Facilities or the
transaction contemplated by this Agreement and to the best of
AO’s knowledge, there is currently no governmental
investigation, threatened litigation or arbitration proceedings to
which AO is or would be a party which relates to the Facilities
except for those described in Appendix D, Paragraph 1.
|
|
|
7)
|
To the best of
AO’s knowledge, except as disclosed in the reports listed on
attached Appendix D (the “Appendix D Reports”),
complete copies of which reports shall be made available to TENANT
prior to the effective date of this Agreement, the Facilities are
not in violation of any federal, state or local law, ordinance or
regulation relating to any Hazardous Materials, as hereafter
defined, industrial hygiene or other environmental conditions on,
under or about the Facilities including but not limited to soil and
ground water conditions. Hazardous Materials (“Hazardous
Materials”) shall mean any flammable explosives, radioactive
materials, hazardous wastes or substances, toxic waste or
substances, and other related materials including without
limitation any substances defined as or included in the definition
of “Hazardous Substances”, “Hazardous
Waste”, “Hazardous Materials” or “Toxic
Substances” under any applicable federal, state or local law
or regulations.
|
|
|
b.
|
Care. The TENANT shall exercise
due diligence in the use of the Facilities from any and all causes.
TENANT shall not be responsible for any condition that exists at
the Facilities prior to the effective date (“Pre-existing
Condition”). The TENANT shall be responsible for and at
“All Risk” for any and all loss of or damage to the
Facilities only to the
|
|
|
|
|
|
|
|
|
|
American Ordnance
LLC
|
|
Page 2 of 8
|
|
E & Z 10-28-02
|
|
Company Confidential &
Proprietary Information
|
|
|
extent that such loss or damage
is caused by the acts or omissions of the TENANT or the
TENANT’s agents, representatives, tenants or invitees. The
TENANT shall promptly repair or replace, to the reasonable
satisfaction of AO, any of the foregoing property described in
Article 1 so lost or damaged or upon mutual agreement, pay to AO,
at AO’s option, an amount equal to the decrease in value or
replacement cost.
|
|
|
c.
|
Maintenance.
After the delivery of the Facilities by AO to the TENANT, the
TENANT, at the TENANT’s own expense and at all times, shall
maintain the Facilities in good, safe, neat, clean and sanitary
condition, to include the perimeter fencing and associated land
areas inside as well as the parking areas outside the fence, and
shall surrender the Facilities, upon the termination of this
Agreement, in as good condition as received, normal wear and tear
excepted. Tenant shall not be responsible for structural repairs to
the roof, load bearing walls, floors or foundation unless such
repairs are required due to the acts or omissions of TENANT, its
employees, agents or invitees.
|
|
|
d.
|
Alterations.
The TENANT shall not make any alterations, additions or
improvements, in, to or about the Facilities without the prior,
written approval of an authorized AO official representative, which
approval shall not be unreasonably withheld.
|
|
|
e.
|
Unsafe
Conditions. If AO or the TENANT discovers any condition that arises
out of the TENANT’s activity at the MLAAP that presents an
immediate threat to the safety or health of any person or that
threatens to endanger life, property or the environment the TENANT
shall take immediate steps to correct the condition or activity and
eliminate the danger. If the TENANT fails to take such immediate
steps, AO, in addition to any other right AO may have, including
the right to terminate this Agreement if the condition or activity
constitutes a breach of this Agreement, may deny the TENANT access
to the MLAAP and AO may-take action to correct the condition or
activity and collect the cost of doing so from the TENANT. The
TENANT shall have no claim for damages against AO, the U. S.
Government or any director, officer, employee, other tenant or
agent of either of them on account of action taken in good faith
pursuant to this provision, nor shall AO’s failure to take
action pursuant to this provision relieve the TENANT of any
obligations the TENANT has under this Agreement. If AO or the
Tenant discovers any Pre-existing Condition or any condition that
arises out of AO’s activity at the MLAAP that presents an
immediate threat to the safety or health of any person or that
threatens to endanger life, property or the environment, AO shall
take immediate steps to correct the condition or activity and
eliminate the danger. If AO fails to take such immediate steps,
TENANT, in addition to any other right TENANT may have, including
the right to terminate this Agreement if the condition or activity
constitutes a material breach of this Agreement, may take action to
correct the condition or activity and collect the cost of doing so
from AO, including the right to set off such cost from the
facilities use payment due under the terms of Article 4 of this
Agreement.
|
|
|
a.
|
Minimum Scope
and Coverage. The TENANT, at the TENANT’s own expense, shall
maintain during the term of this Agreement the following insurance
coverage written with insurance companies that are A. M.
Best’s rated A except that Workers’ Compensation
insurance may be provided through the Tennessee State
Workers’ Compensation Fund:
|
|
|
1)
|
All insurance
coverage provided by the TENANT under this Agreement shall contain
or be endorsed to contain, coverage of the U. S. Government and AO
as additional insureds (except for the Workers’ Compensation
Coverage) and insurance coverage will not be canceled or reduced
without the insurer providing AO with at least thirty
(30) days (ten [10] days for notice of cancellation for
non-payment) written notice.
|
|
|
2)
|
Workers’
Compensation insurance in compliance with statutory requirements
and with Employer’s Liability insurance of $100,000 each
accident, $100,000 each employee and $500,000 policy limit. The
coverage shall contain or be endorsed to contain, a waiver of
subrogation in favor of AO.
|
|
|
3)
|
Commercial
General Liability (CGL) insurance written on an occurrence basis
with Combined Single Limits for bodily injury and property damage
of not less than $1,000,000 per occurrence and $2,000,000 in
the aggregate and a deductible of not more than $1,000 per
occurrence. The CGL policy shall provide coverage for Facilities
Operations, Broad Form Property Damage, and Contractual Liability.
Automobile Liability insurance with Combined Single Limits for
bodily injury and property damage of $500,000 per
occurrence.
|
|
|
b.
|
Verification of Coverage. Prior
to the delivery of the use of the Facilities to the TENANT and for
the coverage required to be provided by the TENANT by this
Agreement, the TENANT shall deliver to AO a Certificate of
Insurance signed by a person authorized by the insurer. The receipt
by AO of an incomplete, inaccurate or invalid
|
|
|
|
|
|
|
|
|
|
American Ordnance
LLC
|
|
Page 3 of 8
|
|
E & Z 10-28-02
|
|
Company Confidential &
Proprietary Information
|
|
|
Certificate of Insurance shall not
relieve or decrease the liability of the TENANT for the
TENANT’s obligations under this Article 7 of this Agreement.
If requested by AO, the TENANT, at the TENANT’s expense,
shall provide AO with certified copies of all insurance policies
required by this Agreement.
|
|
|
c.
|
TENANT shall
insure Facilities for loss or property damage from fire or other
casualty from an insurance company licensed in the State of
Tennessee in an amount of at least $5,000,000 or an amount which
will not otherwise result in coinsurance and with TENANT, AO and
the U.S. Government as named insureds as their interest may appear.
TENANT shall provide to AO a Certificate of Insurance fifteen
(15) days after the effective date.
|
|
8.
|
ORDINANCES,
STATUTES-AND PERMITS
|
|
|
a.
|
The TENANT
shall condu
|
|
