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HomeMy WebLinkAbout12604 RESOLUTION NO. 12604 A RESOLUTION RESCINDING RESOLUTION 12576 AND APPROVING THE AMENDED AND RESTATED AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND WESTWIND WOOD SPECIALTIES, INC. AND THE PUEBLO DEVELOPMENT FOUNDATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID AMENDED AND RESTATED AGREEMENT BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO, that: SECTION 1. The City Council finds and determines that due to a subsequent change in circumstances, Resolution No. 12576, adopted on January 14, 2013, shall be and hereby is rescinded. SECTION 2. The City Council finds and determines that $810,000 in the form of a rent subsidy and purchase price concession when Westwind Wood Specialties, Inc. (“Company”) purchases the facility located at 33654 United Ave., Pueblo, CO 81001 after ten (10) years, described in the attached Agreement, meets and complies with the criteria and standards established by Pueblo Municipal Code Section 14-4-85 and will create employment opportunities justifying the expenditure of public funds. SECTION 3. The Amended and Restated Agreement dated February 11, 2013 nunc pro tunc February 1, 2013, between Pueblo, a Municipal Corporation and Westwind Wood Specialties, Inc. and the Pueblo Development Foundation ("PDF") relating to a job creating capital improvement project, a copy of which is attached hereto (“Amended and Restated Agreement”), having been approved as to form by the City Attorney, is hereby approved. The President of the City Council is authorized to execute and deliver the Amended and Restated Agreement in the name of the City and the City Clerk is directed to affix the seal of the City thereto and attest same. SECTION 4. Section 14-4-85 of the Pueblo Municipal Code contemplates that new employers, such as the Company, shall have two (2) years in which to create additional jobs within the City. City Council hereby finds and concludes that, in this case, a variance from the criteria and standards ordinance is appropriate due to the ongoing national economic recession. Company is hereby granted three (3) years from the beginning date of its operations to meet its employment commitment of ninety-one (91) new, full-time employees at its Pueblo facility. SECTION 5. The officers of the City are directed and authorized to perform any and all acts consistent with the intent of this Resolution and attached Amended and Restated Agreement to effectuate the transactions described therein. SECTION 6. This Resolution shall become effective upon final approval and passage. INTRODUCED: February 25, 2013 BY: Chris Nicoll Background Paper for Proposed RESOLUTION DATE: FEBRUARY 25, 2013 AGENDA ITEM # Q-3 DEPARTMENT: Law Department Daniel C. Kogovsek, City Attorney TITLE A RESOLUTION RESCINDING RESOLUTION NO. 12576 AND APPROVING THE AMENDED AND RESTATED AGREEMENT BETWEEN PUEBLO, A MUNICIPAL CORPORATION, AND WESTWIND WOOD SPECIALTIES, INC. AND THE PUEBLO DEVELOPMENT FOUNDATION RELATING TO A JOB CREATING CAPITAL IMPROVEMENT PROJECT AND AUTHORIZING THE PRESIDENT OF THE CITY COUNCIL TO EXECUTE SAID AMENDED AND RESTATED AGREEMENT ISSUE This Resolution rescinds, because of a subsequent change in circumstances, Resolution No. 12576, and approves an Amended and Restated Agreement between the City of Pueblo, Westwind Wood Specialties, Inc. (the “Company”) and PDF dated February 25, 2013. Under the Amended and Restated Agreement, the Company agrees to locate a manufacturing facility at Lot 58, Pueblo Memorial Airport Industrial Park Subdivision (“Facility”) on property it would lease, with an option to purchase. The Company would commit to invest not less than $2,000,000 in fixed assets at the Facility; and to employ not less than 30 full-time employees during its first year of operations; 51 full-time employees during its second year of operations and 91 full-time employees during its third year through tenth year of operations at the Facility. In exchange, the City would agree to provide a rent subsidy to Company of $810,000 over the course of its ten year lease of the Facility property, and a purchase price concession when the Company purchases the Facility after ten years. The Facility property is currently owned by PDF and PDF would agree to lease the Facility to the Company, and to remit the rents paid by the Company to the City, less 5% which would be retained by PDF in consideration of its management of the Facility. RECOMMENDATION PEDCO and PDF recommend approval of this Resolution. FINANCIAL IMPACT $810,000 in rent subsidy and purchase price concession when Westwind Wood Specialties purchases the facility after ten (10) years. • AMENDED AND RESTATED AGREEMENT THIS AMENDED AND RESTATED AGREEMENT ( "Agreement ") is entered into as of February 11, 2013, nunc pro tunc February 1, 2013, between Pueblo, a Municipal Corporation (the "City ") and Westwind Wood Specialties, Inc., a Kansas corporation (the "Company ") and Pueblo Development Foundation, a Colorado nonprofit corporation ( "PDF "). WHEREAS, Company has expressed a willingness to locate a manufacturing facility within the City of Pueblo, and in furtherance thereof has, through the Pueblo Economic Development Corporation, made application for economic incentives to the City, and WHEREAS, in connection with its application, Company has committed to invest not less than U.S. $2,000,000 in fixed assets in a manufacturing facility it will locate within the City of Pueblo, and to provide the employment described in section 6 of this Agreement; and WHEREAS, the City has approved such application and will make certain economic incentives available to Company subject to and upon the terms and conditions of this Agreement; and WHEREAS, PDF is the owner of the Facility (as defined below) and is experienced in performing management services with respect to the property to be leased by Company; NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, City and Company agree as follows: 1. The following terms as used in this Agreement shall have the following meaning unless the context clearly indicates otherwise: "Effective Date" means the date of approval of this Agreement by City Council of City. "Employment Commitment Date" means June 1. 2013 or •the issuance of a Cetificate of Occupancy, whichever occurs first. "Facility" means the manufacturing facility located at Lot 58, Pueblo Memorial Airport Industrial Park Subdivision, County of Pueblo, State of Colorado, also known and numbered as 33645 United Avenue, Pueblo CO 81001, wherein Company will conduct its manufacturing operations for production of goods for distribution and sale outside of Pueblo County, Colorado. The Facility is owned by PDF. "Full -Time Employee" means a person who actually performs work at the Facility for not less than thirty -five (35) hours per week whether employed by Company or by an outside entity acting as an agency to provide Full -Time Employees for Company. The term "Full -Time Employee" does not include independent contractors nor employees of independent contractors except employees performing work at the Facility who are employees of an independent contractor acting as an agency to provide Full -Time Employees for Company. 2346011.5 • "Lease" means a lease in substantially the same form and content as the Lease attached hereto as Exhibit "A." "Quarter" means three consecutive calendar months commencing January 1, April 1, July 1 and October 1 of each calendar year. "Quarterly Employees" means the sum of the aggregate number of Full -Time Employees on each business day of a Quarter, divided by the sum of the aggregate business days in such Quarter. "Salary" means direct compensation payable to an employee including vacation pay, bonuses, overtime compensation and the amount of any pretax benefits paid by the employee under flexible spending or other qualified plans. The term does not include employer paid payroll taxes nor benefits such as employer paid health insurance. 2. If Company is not in default hereunder, City will, after the Effective Date, make certain economic incentives available to Company and for the benefit of Company in the form of reduced rents, rent deferral and an option to purchase the Facility as set forth in Lease, subject to and contingent upon the following terms, conditions and covenants which Company and PDF, as applicable, agree to perform and comply with: (a) Company Filings. Company shall file in the office of the City Clerk copies of the following: (i) Company's certificate or other evidence of authority to transact business in the State of Colorado issued by the Colorado Secretary of State, together with Company's certificate of good standing issued by the governmental jurisdiction of Company's formation, (ii) certified copy of the resolution of the governing board of Company approving this Agreement and the Lease and authorizing its officers to execute and deliver this Agreement, the Lease and related documents in the name of Company, (iii) this Agreement and the Lease executed by authorized officers of Company, and (iv) evidence reasonably satisfactory to City that Company will commence manufacturing operations at the 'Facility. The date of the last to occur of the filings required under (i), (ii), (iii), and (iv) of this section 2(a) shall be referred to herein as "Closing ". If either the Effective Date or Closing does not occur on or before February 1, 2013, or such later date as Company and City shall mutually agree, City, at its sole option, may terminate this Agreement and City and Company shall thereafter be released and discharged from all obligations hereunder. 3. Within thirty (30) days after the Effective Date and subject to Company's compliance with section 2(a), but no later than the issuance of a building permit for the commencement of any work by Company within the Leased Premises, Company shall execute the Lease with PDF. 4. City and Company stipulate and agree that the total economic incentives provided by City to Company under this Agreement the value of the rent subsidy under the Lease, is U.S. $810,000.00 (the "Total Economic Incentives "). 5. (a) Company acknowledges and agrees that the primary purpose of City in entering into this Agreement and the sole benefit to the City for making the Total Economic 2 • Incentives available to Company hereunder is the creation of additional jobs within the City. Therefore, Company represents, covenants, and agrees that Company will perform as follows: (I) For the period from the Employment Commitment Date to the day prior to the first anniversary of the Employment Commitment Date, continuously conduct its business operations at the Facility and employ not less than thirty (30) Full -Time Employees at the Facility whose annual salary shall average at least U.S. $31,532.00, and a minimum annual salary of U.S. $26,000.00 for each employee; (II) From the first anniversary of the Employment Commitment Date to the day prior to the second anniversary of the Employment Commitment Date, continuously conduct its business operations at the Facility and employ not less than fifty -one (51) Full -Time Employees at the Facility whose annual salary shall average at least U.S. $33,468.00, and a minimum annual salary of U.S. $28,000.00 for each employee; (III) From the second anniversary of the Employment Commitment Date to the tenth (10 anniversary of the Employment Commitment Date, continuously conduct its business operations at the Facility and employ not less than ninety -one (91) Full -Time Employees at the Facility whose annual salary shall average at least U.S. $34,428.00, and a minimum annual salary of U.S. $30,000.00 for each employee (collectively, the "Employment Commitment "). (b) Company will use good faith efforts in accordance with its sound business practices to (i) employ residents of the County of Pueblo as Full -Time Employees including, without limitation, engaging in reasonable programs and posting of employment openings in the City of Pueblo, and (ii) engage engineers, architects, contractors and suppliers whose principal places of business are located in Pueblo County, Colorado, in construction work for or related to the Facility. 6. Notwithstanding anything contained in this Agreement to the contrary, if Company shall for any reason default in its Employment Commitment, Company shall repay to City a pro -rata share of the Total Economic Incentives based upon the number of Full -Time Employees employed by Company at the Facility (the "Repayment Obligation "), as follows: (a) During the ten (10) year period starting on the Employment Commitment Date and ending one - hundred- twenty (120) months thereafter (the "Repayment Period "), Company shall pay to City an amount for each Quarter equal to the Quarterly Employees less than the number of Full -Time Employees required for such period under the Employment Commitment employed at the Facility by Company multiplied by the Adjusted Quarterly Repayment Capitation (the "Company's Quarterly Payments "). The Adjusted Quarterly Repayment Capitation as of the date of this Agreement shall be U.S. $317.90. The Adjusted Quarterly Repayment Capitation shall be adjusted on February 1 each year beginning February 1, 2014 (and shall apply retroactively as of the preceding January 1) by the 12 month percentage increase over the previous year of the Consumer Price Index for "All Urban Consumers (CPI -U) All Items (1982 -1984 = 100)" for Denver - Boulder - Greeley published by the Bureau of Labor Statistics of the United States Department of Labor ( the "Bureau "); provided that if the Bureau ceases to publish the CPI -U or materially changes its composition, the City and Company shall 3 agree to and use a comparable published statistic or index to adjust the Adjusted Quarterly Repayment Capitation to adjust for inflation. For example, if for the second Quarter of the third year after the Employment Commitment Date the Adjusted Quarterly Repayment Capitation is U.S. $317.90, and such Quarterly Employees are 80, the amount payable by Company to City on or before the fifteenth (15th) day of the next calendar month would be (91 - 80) x U.S. $317.90 = U.S. $3,496.90. (b) Company's Quarterly Payments, if any, shall be paid to the City without notice, demand, deduction or setoff on or before the fifteenth (15th) day of the month following the end of each Quarter during the Repayment Period at the office of the Director of Finance of City, 150 Central Main Street, Pueblo, Colorado, 81003, or such other person or location as the City may designate. All past due Company's Quarterly Payments shall bear interest at the rate of eight percent (8 %) per annum ( "Default Interest ") until paid. Company's Quarterly Payments shall be in addition to rent and other amounts payable under the Lease. (c) Within fifteen (15) days after the end of each Quarter after the Employment Commitment Date and for one calendar month after the Repayment Period, Company will submit to City's Director of Finance Company's statements showing the Quarterly Employees for the preceding Quarter and their annual salary, together with the basis upon which Quarterly Employees and Company's Quarterly Payment, if any, were computed, certified by an officer of the Company to be true and correct. For purposes of verifying Company's employment and salary, for a period of three (3) years after receipt of a Quarterly Statement from the Company, City shall have access to and the right to audit Company's records relating to Company's employees employed at the Facility. (d) If Company defaults in any of its obligations under this Agreement including, without limitation, its Repayment Obligation, and such default is not cured within thirty (30) days after written notice specifying the default is given by City to Company, then in such event, the entire balance of Company's Repayment Obligation shall become due and payable, without notice, notice being hereby expressly waived, together with Default Interest from the date of default, and for such purpose, the entire balance of Company's Repayment Obligation shall be an `amount equal to 91 times the then applicable Adjusted Quarterly Repayment Capitation, multiplied by the remaining Quarters of the Repayment Period, plus the amount of Company's unpaid Quarterly Payments, if any, but in no event more than the amount of the Total Economic Incentives actually provided by City to Company, plus Default Interest from the date due until paid. Company's Repayment Obligation is absolute and unconditional and shall not be abated, reduced, diminished, modified, withheld or otherwise offset for any cause or reason whatsoever. 7. Company's Repayment Obligation under this Agreement shall be deemed to be a debt of Company payable to City until Company performs and discharges its obligations hereunder including, without limitation, its Repayment Obligation. 8. (a) Prior to instituting any proceeding to enforce Company's Repayment Obligation, City shall notify Company in writing of its intention to institute such proceedings. Company may request relief from its Repayment Obligation by delivering to City within twenty (20) days after the date of City's notice, Company's written request for relief specifying the 4 • grounds upon which such relief is sought together with documents supporting said grounds. Within ninety (90) days after receipt of Company's request, City will schedule a meeting with the City Council of City ( "City Council ") at which meeting Company may appear. City will notify Company of the time and place of the meeting. Failure of Company to timely deliver its complete written request for relief or to appear at the scheduled meeting with the City Council shall entitle City to immediately institute proceedings to enforce Company's Repayment Obligation. (b) City Council may or may not, in its sole and absolute discretion, relieve Company, in whole or in part, from Company's Repayment Obligation. Any action taken by the City Council relating to a request for relief shall be final and binding on Company, and not subject to judicial review. Any such action by City Council is, and shall constitute, a legislative measure. Nothing contained in this section 8 shall grant or be construed to grant to Company any right or claim to relief from its Repayment Obligation or hearing with respect thereto. (c) No delay by the City in scheduling a meeting, or failure by City to exercise its right to enforce this Agreement, including Company's Repayment Obligation, and no partial or single exercise of that right, shall constitute a waiver of that right. (d) Nothing contained herein is intended to alter or limit any rights or remedies of the City in the event of a default under the Lease by Company. 9. In the event of any litigation arising under this Agreement, the court shall award to the prevailing party its costs and reasonable attorney fees. Exclusive venue for any such litigation shall be Pueblo County, Colorado. All such litigation shall be filed in the District Court in and for the County of Pueblo, State of Colorado and each party submits to the jurisdiction of such District Court. To the extent allowed by law, each party waives its right to a jury trial. 10. This Agreement together with the Lease expresses the entire understanding of the parties and supersedes and abrogates any and all prior dealings and commitments, whether oral or written, with respect to the subject matter of this Agreement and may not be amended or modified except in writing signed by City and Company. Any waiver of any provision of this Agreement must be in writing and signed by the party whose rights are being waived. No waiver of any breach of any provision hereof shall be or be deemed to be a waiver of any preceding or subsequent breach of the same or any other provision of this Agreement. The failure of any party to enforce or seek enforcement of the terms of this Agreement following any breach shall not be construed as a waiver of such breach. 11. This Agreement shall be construed in accordance with and be governed by the laws of the State of Colorado without regard to conflict of law principles. 12. Any notices hereunder shall be sufficiently given if given in writing personally or mailed by first class, registered, or certified mail, postage prepaid, addressed: (a) if to City, City Manager, City of Pueblo, 200 S. Main Street, Pueblo, Colorado, 81003; and City Attorney, City of Pueblo, 503 N. Main Street, Suite 203, Pueblo, CO 81003; 5 (b) if to the Company, (c) if to PDF, c/o Pueblo Economic Development Corporation, 301 N. Main Street, Pueblo, CO 81003, Attention or to such other person or address as either party shall specify in written notice given to the other party pursuant to the provisions of this section 12. 13. Time is of the essence hereof. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, provided Company may not assign this Agreement or any interest herein without the express written consent of City, which consent shall not be unreasonably withheld. Any assignment or attempted assignment of this Agreement by Company without such consent shall be null and void. No such assignment nor City's consent thereto shall release or discharge Company from any obligation or liability under this Agreement. 14. The persons signing this Agreement in the name of and on behalf of Company, PDF and City each represent and warrant that they have the requisite power and authority on behalf of their respective entity to enter into, execute, and deliver this Agreement, and that this Agreement is a valid legally binding obligation of Company, PDF and City enforceable in accordance with its terms. 15. Company and PDF each represent and warrant that no person, entity, or organization has been employed or retained or will receive or be paid, directly or indirectly, any commission, percentage, contingent fee or any other remuneration, payment or receipt of which is contingent upon approval of this Agreement or City providing the Total Economic Incentives hereunder, or any part thereof. For breach or violation of this warranty, City shall have the right to terminate this Agreement, or recover the full amount of such commission, percentage, contingent fee or other remuneration, and /or to seek such other remedies legally available to City, which remedies shall be cumulative. 16. In no event shall City, its officers, agents or employees be liable to Company or PDF for damages, including without limitation, compensatory, punitive, indirect, special or consequential damages, resulting from or arising out of or related to this Agreement or the performance or breach thereof by City or the failure or delay of City in the performance of any covenant or provision under this Agreement on its part to be performed. In consideration of City entering into this Agreement, Company and PDF each hereby waives and discharges City, its officers, agents and employees from all claims for any and all such damages. No breach, default, delay or failure of City under this Agreement shall be or be construed to be a waiver, discharge or release of Company's Repayment Obligation. Notwithstanding the foregoing, if City defaults in any material covenant of this Agreement, Company and PDF shall have the right, without the showing or any special damages or an inadequate remedy at law, to seek specific enforcement thereof, but not for damages of any type or nature. 17. If any provision of this Agreement is declared by a court of competent jurisdiction to be invalid or unenforceable, such determination shall not affect the other provisions of this Agreement which shall remain in full force and effect. 6 18. None of the parties shall be, or hold itself out as, agent of any other party or as a joint venturer under this Agreement. 19. Each party acknowledges that this Agreement was fully negotiated by the parties and, therefore, no provision of this Agreement shall be interpreted against any party because such party or its legal representative drafted such provision. 20. The provisions of this Agreement are for the exclusive benefit of the parties hereto and their successors and permitted assigns, and no third party shall be a beneficiary, or have any rights by virtue of this Agreement. 21. This Agreement may be executed in any number of counterparts, and each such counterpart shall be deemed for all purposes to be an original, and all such counterparts shall together constitute but one and the same original. (Signatures on Following Page.) • 7 Executed at Pueblo, Colorado, as of the day and year first above written. Pueblo, a Muni ' . - A• 4 • ion a Attest: B — City Jerk " President of the City Council Westwind Wood Specialties, Inc. a ie 5 corporation Attest: By: Name: Name: .. .n1 Title: Title: rr S <AA 'T • • Pueblo Development Foundation, a Colorado nonprofit corporation By: Ai Name:: �� ��: Je Title: 8 LEASE THIS LEASE (this "Lease ") entered into as of February / , 2013 by and between Pueblo Development Foundation, a Colorado nonprofit corporation ( "Lessor ") and Westwind Wood Specialties, Inc., a Kansas corporation ( "Lessee "). WITNESSETH: WHEREAS, Lessor is the owner of Lot 58, Pueblo Memorial Airport Industrial Park Subdivision, Pueblo County, Colorado, consisting of 5.57 acres more or less (the "Land "), together with an approximately 51,024 square foot building (the "Facility ") located thereon and known by street and number as 33645 United Avenue, Pueblo, CO (collectively the Land and Facility are herein referred to as the "Leased Premises "), and WHEREAS, Lessee has occupied the Leased Premises since January 4, 2013 pursuant to a thirty day written lease agreement with Lessor, and Lessee is now desirous of leasing the Leased Premises for a longer term and in obtaining an option to purchase the Leased Premises upon the terms and conditions hereinafter set forth; NOW, THEREFORE, in consideration of the mutual promises, covenants and conditions contained herein, Lessor and Lessee hereby agree as follows: Article 1. Leased Premises. 1.01 Lessor hereby leases to Lessee and Lessee hereby leases from Lessor, subject to the covenants, provisions and conditions herein, the Leased Premises. 1.02 This Lease and Lessee's use of the Leased Premises are subject to the covenants, conditions, restrictions and limitations, if any, appearing of record, including those set forth in the Warranty Deed recorded in the office of the Clerk and Recorder of Pueblo County, Colorado on January 26, 2000 under Reception No. 1317690 (the "Warranty Deed "), and all applicable zoning and land use laws, ordinances, codes and regulations governing and regulating the Leased Premises and its use. Whenever the word "Company" appears in the Warranty Deed it shall be construed to mean and include Lessee. Article 2. Term. The Term of this Lease shall be ten (10) years commencing February 1, 2013 and ending ten (10) years thereafter on January 31, 2023, unless sooner terminated as provided herein (the "Termination Date "). Article 3. Rent. -1- • 3.01 Lessee shall pay to Lessor base rent for the Leased Premises for the full Term in the amount of $590,000.00, payable in installments of $5,462.97 per month (the "monthly rent "). Monthly rent is payable monthly in advance, without notice or demand, with the first monthly payment due on February 1, 2013, and subsequent payments due on the same day of each month thereafter; provided, however, that so long as Lessee is not in default under this Lease, or under the Agreement among the City of Pueblo (the "City "), Lessor and Lessee entered into February 11, 2013, nunc pro tune February 1, 2013 concerning the Leased Premises (the "City Agreement "), Lessee shall have no obligation to pay monthly rent during the first twelve (12) months of the Term. The monthly rent as set forth above has been calculated on the basis of the deferral of the first years rent. In the event that Lessee is not entitled to the deferral, then the monthly rent will be recalculated accordingly. 3.02 All payments shall be made at or mailed by United States mail to the following address: 301 North Main Street, Suite 210, Pueblo, Colorado, 81003, or such other address as Lessor may from time to time designate to Lessee in writing. 3.03 All monthly rent and other payments required to be made by Lessee hereunder which shall remain unpaid fifteen (15) days after their due dates shall bear interest at the rate often percent (10 %) per annum. Notwithstanding foregoing sentence, rent shall be due on the first day of each month of the Term and the existence of interest on late rent payments shall not alter, excuse, or change the obligation of Lessee to pay rent when due, nor shall it substitute for or replace any other remedy which Lessor may have under the terms of this Lease and under Colorado law for a failure to pay rent in a timely manner. All such remedies of Lessor shall be cumulative. 3.04 Lessee's obligation to pay rent hereunder is absolute and unconditional and rent shall not be offset, abated, reduced or withheld for any cause or reason whatsoever. 3.05 It is the intent of the parties hereto that Lessor incur no obligation, monetary or otherwise under this Lease. All amounts required to be paid by Lessee under this Lease, whether or not payable directly to Lessor and including without limitation, taxes, insurance, utilities and maintenance costs shall be considered "rent" under this Lease; and notwithstanding the base rent deferral contained in Section 3.01 above, all such amounts shall be due and payable during the entire Term of this Lease as is further set forth herein and such amounts shall not be subject to the deferral granted for base rent under Section 3.01 above. Article 4. Use of Leased Premises. 4.01 The Leased Premises shall be used and occupied by Lessee exclusively for manufacturing and distribution purposes associated with or incident to Lessee's business activities. 4.02 Lessee shall use the Leased Premises in a careful, safe and proper manner in compliance with all laws and regulations applicable to the Leased Premises and Lessee's use -2- thereof. Lessee shall not cause, maintain or permit any nuisance or waste in, on, or about the Leased Premises. 4.03 Lessee shall not abandon nor cease to conduct business on the Leased Premises for any period longer than 180 consecutive days. In the event that Lessee does so abandon or cease to conduct business in the Leased Premises, Lessor may, but shall not be required to, repossess and take control of the Leased Premises without the requirement of a court order and without prejudice to any of its other rights and remedies under this Lease and under Colorado law. 4.04 Lessee agrees and acknowledges that the City has reserved the right, in conjunction with its previous ownership of the Leased Premises, and without any obligation on its part to do so, to maintain and keep in repair the landing area of the airport and other public areas or facilities at the Pueblo Memorial Airport and to develop, modify, change, relocate, abandon, or improve the Pueblo Memorial Airport, or any part thereof, as it may determine in its sole and absolute discretion, at any time. Lessee further acknowledges and agrees that the City has not made, nor by any provision of this Lease shall the City be construed to have made any representation or warranty to the contrary relating thereto. Article 5. Condition of Premises. The taking of possession of the Leased Premises by Lessee on and after February 1, 2013 shall be conclusive evidence that Lessee accepts the Leased Premises in its then present condition "As Is" and that the Leased Premises are in good and satisfactory condition at the time such possession was taken. Lessor makes no representations or warranties of any kind as th the condition of the premises and /or as to the fitness of the Leased Premises for Lessee's intended uses. Article 6. Alterations and Improvements. 6.01 Lessee shall not make any additions, alterations or improvements in or to the Leased Premises ( "Alterations ") without Lessor's prior written consent. Lessee shall not permit or allow any lien to be filed or recorded against the Leased Premises or Lessor's interest therein and Lessee shall fully cooperate with Lessor in obtaining the protection afforded Lessor under Section 38 -22 -105, C.R.S. Notwithstanding the foregoing, no alterations, improvements and /or repairs of any nature shall be permitted without Lessor receiving, in advance, written and binding lien waivers from all persons or entities contracted to do any such additions, alterations, repairs, or improvements in or to the Leased Premises. The presentation of lien waivers shall be a condition precedent to the consent of Lessor hereunder. All Alterations made in or to the Leased Premises by Lessee shall become the property of Lessor and be surrendered with the Leased Premises at the termination of this Lease. 6.02 Lessor agrees that its approval or consent to such Alterations shall not be unreasonably withheld or delayed. -3- 6.03 All equipment, fixtures and improvements of a detachable or temporary nature installed or placed upon the Leased Premises by Lessee, including trade fixtures, shall remain the property of Lessee, subject to Lessee's right, at its option, to remove same not later than ten (10) days after termination of this Lease. Lessee, at its expense, shall promptly repair any damage resulting from such removal. The failure of Lessee to remove its equipment, fixtures and detachable improvements within ten (10) days after termination of this Lease shall, at the option of Lessor, be deemed an abandonment of such property. Article 7. Repairs and Maintenance. 7.01 Lessor shall not be obligated to repair, maintain or alter the Leased Premises or any part thereof. Lessee, at its expense, shall keep and maintain the Leased Premises, including, without limitation, the Facility, structural components, roofs, walls, equipment, fixtures, and electrical, heating, plumbing and air conditioning systems, in good condition and repair and in a good, clean and safe condition at all times during the effective term of this Lease and return the same to Lessor at Termination Date in as good condition and state of repair as the same were in as of February 1, 2013, except for loss occasioned by ordinary wear. 7.02 If Lessee becomes obligated to make repairs which are or may be covered by any manufacturer's or general contractor's warranty issued to or for the benefit of Lessor, Lessor will assign and transfer to Lessee its interest in any such warranty for the purpose of making such repairs. If any such warranty may not be legally assigned, Lessor, at the request and expense of Lessee, will enforce such warranty on behalf of Lessee. • • 7.03 If Lessee becomes obligated to make repairs caused by an occurrence covered by the insurance described in Article 12, the net proceeds of such insurance shall be made available to Lessee to offset the cost of such repairs. Article 8. Right of Entry. Lessor, or Lessor's officers, employees, agents and representatives, as the case may be, may enter the Leased Premises during normal business hours upon prior written notice to Lessee, except notice shall not be required in case of emergency, such as fire. Article 9. Assignment or Sublease. Lessee shall not voluntarily or by operation of law assign all or any part of the Lease or Lessee's interest therein without the express written consent of Lessor, which consent will not be unreasonably withheld. Lessor may withhold its consent if the proposed assignee's financial standing and responsibility at the time of the proposed assignment is insufficient in Lessor's sole discretion to give assurance of performance and compliance with all terms and conditions of this Lease and the City Agreement. Upon such an assignment and consent, Lessee shall be released from all obligations arising or occurring under this Lease after the effective date of such assignment and consent, provided that such assignee shall execute, acknowledge and deliver to -4- Lessor an assumption agreement in form and substances satisfactory to Lessor and the City, whereby assignee agrees to observe, perform and keep all the terms, provisions, covenants and conditions required to be observed, performed and kept by Lessee hereunder and under the City Agreement. Any assignment or attempted assignment of the Lease or an interest herein by Lessee without Landlord's express written consent shall be null and void. Notwithstanding the foregoing, Lessee may not assign or transfer the purchase option under Articles 16 and 17 independent or separate from an assignment or transfer of the Lease as a whole. Article 10. Insurance and Indemnification. 10.01 Lessee shall indemnify and hold Lessor harmless from and defend Lessor against any and all claims or liability, including cost of defense and reasonable attorney fees, for any injury or damage to Lessee or its officers, agents or employees, or to Lessee's property, or to any third person, or to the property of any third person: (a) occurring in, on or about the Leased Premises or any part thereof by or from any cause whatsoever except injury or damage caused by the negligent acts of Lessor, its officers or employees; or (b) arising out of or resulting from the Leased Premises, or any condition thereon, or from Lessee's use and occupancy of the Leased Premises, or any equipment therein or appurtenances thereto, or any activity conducted thereon. 10.02 Lessee shall secure and maintain in full force and effect, at its expense, during the effective period of this Lease, commercial liability insurance including personal injury, property damage and contractual coverage in the minimum amount of $2,000,000 combined single limits naming Lessor as an additional insured. 10.03 Lessee shall secure and maintain during the Term of this Lease Colorado Workers' Compensation insurance or other similar coverage in the statutorily mandated amounts. 10.04 A copy of each insurance policy, or certificate thereof, issued by an association or company authorized to issue such policy or policies under the laws of the State of Colorado and containing a provision prohibiting cancellation or material modification of the insurance except after thirty (30) days' notice to Lessor, shall be delivered to the Lessor within thirty (30) days after date of this Lease, and thereafter the Lessee will furnish to Lessor evidence of the continuance of the insurance coverage required herein within a reasonable time after the same has been issued. Article 11. Fire and Extended Coverage Insurance. 11.01 Lessee shall, at its expense, during the Term of this Lease, secure and maintain in full force and effect "All- Risk" casualty insurance (including, without limitation, fire, extended coverage and boiler insurance upon the Leased Premises). Such insurance shall be in an amount not less than the full replacement value of the Facility and improvements (without deduction for physical depreciation), and issued by an insurance company or association authorized to issue such policies under the laws of the State of Colorado and approved by Lessor, shall contain a deductible of not more than $10,000.00 and a standard Colorado mortgagee clause in favor of Lessor and any mortgagee of Lessor's interests in the Leased Premises, and shall not be subject to cancellation, -5- • • s ' reduction or modification upon less than thirty (30) days' written notice to Lessor. Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor, its officers, agents and employees, for any loss or damage resulting from covered perils. Lessee will furnish to Lessor evidence of such insurance on February 1, 2013 and will thereafter furnish evidence of its continuance during the Term of this Lease. 11.02 Lessee shall, at its expense, secure and maintain fire and extended coverage insurance on all fixtures, equipment and improvements installed by Lessee on the Leased Premises. Such insurance, by its terms or by endorsement, shall waive any right of subrogation of the insurer against Lessor, its officers, agents and employees, for any loss or damage resulting from covered perils. Article 12. Taxes and Assessments. 12.01 Lessor shall promptly pay and discharge as they become due and before delinquency any and all real property taxes, assessments, charges, governmental liens, levies or excises, whether general or special, or ordinary or extraordinary, of any name, nature and kind whatsoever which may be levied, charged, or imposed, or which may be come a lien or charge on or against the Leased Premises or any part thereof, the leasehold interest of Lessee herein, or the improvements situated on the Leased Premises during the term of this Lease. Lessee shall be responsible and pay Lessor for such real property taxes in accordance with the provisions of Section 12.03. 12.02 Lessee shall pay before delinquency any and all property taxes levied or charged ° against any of the personal property belonging to it and situated on the Leased Premises or used in connection with the operation and maintenance of the Facility on the Leased Premises. 12.03 Lessee shall pay to Lessor on the first day of each month during the term of this Lease an amount equal to 1/12 of the real property taxes on the Leased Premises which sum shall be based on the real property taxes assessed and paid for the prior year. The parties stipulate and agree that during the first year of the term of this lease the monthly payment due from Lessee for real property taxes shall be three thousand six hundred two dollars and eighty -five cents ($3,602.85). Said figure has been derived based upon the prior year taxes in the total amount of forty -three thousand two hundred thirty -four dollars and twelve cents ($43,234.12). Lessor agrees to provide Lessee with a copy of the Notice Of Valuation promptly following the once yearly receipt of the same from the governmental taxing entity. In conjunction with the provision to Lessee of the Notice Of Valuation, Lessor shall inquire of Lessee as to Lessee's opinion of the reasonableness of the Valuation, and shall give due consideration to Lessee's opinion of Valuation. Lessor shall give good faith consideration to protesting the valuation if Lessee so desires. Upon its payment of the property taxes, Lessor shall provide a copy of the receipt from the taxing authority to Lessee. Article 13. Utilities. -6- • • 13.01 Lessee shall pay before delinquent all charges for sewer, water, gas, electricity, telephone and all other utility services furnished to or used in or supplied to the Leased Premises. Lessor shall not be obligated to furnish or provide any utilities, facilities or services of any kind. 13.02 Lessee shall pay to the City the combined service fee required by paragraph 4(h) of the Warranty Deed referenced in Section 1.02 of this Lease. Article 14. Damage to or Destruction of Premises. If, during the Term of this Lease, the Leased Premises shall be damaged to such an extent that the repair of such damage and the restoration of the Leased Premises can be accomplished, with reasonable diligence, within one hundred twenty (120) days after such damage, Lessee shall promptly repair such damage and cause the Leased Premises to be restored to their condition prior to the event causing the damage. If, during the Term of this Lease, the Leased Premises shall be destroyed or damaged, or partially destroyed or damaged, to such an extent that the repair of such destruction or damage and the restoration of the Leased Premises cannot be accomplished, with reasonable diligence, within one hundred twenty (120) days after destruction or damage, then Lessee shall promptly notify Lessor in writing of such fact within forty-five (45) days after the destruction or damage, and Lessee shall thereafter have the right, during a period of thirty (30) days following such notification, to terminate this Lease by written notice to the Lessor, declaring this Lease to be terminated. If this Lease is so terminated all proceeds of insurance required to be maintained by Lessee under Article 11.01 (or, if Lessee fails to maintain the insurance required to be maintained by Lessee under Article 11.01, an amount equal to the insurance proceeds which would have been available but for such failure) shall be paitl to Lessor. Unless such notice of immediate termination shall be given within such 30 -day period, this Lease shall continue in full force and effect and Lessee shall promptly repair such destruction or damage and cause the Leased Premises to be restored to their condition prior to the event causing the destruction or damage. In the event the Leased Premises are destroyed or damaged, or partially destroyed or damaged, the monthly rent payable by Lessee shall remain in effect and shall not be reduced or abated. Article 15. Eminent Domain. If the whole or substantial part of the Leased Premises shall be taken or condemned by any competent authority for any public or quasi - public use or purpose under any statute or by the right of eminent domain, or purchased under threat of such taking, then this Lease shall terminate on the date when the condemning authority takes possession of the Leased Premises or the substantial part thereof so taken. There shall be no apportionment of the award for taking or condemnation, the entire award going to Lessor, provided Lessee shall have the right to recover any award which may be made for damages to or condemnation of Lessee's movable trade fixtures, equipment, furniture and furnishings. Article 16. Option to Purchase Leased Premises. 16.01 If Lessee is not in default hereunder or under the City Agreement, and has -7- • maintained its Employment Commitment by employing ninety -one (91) full -time employees at the Leased Premises for those periods required under the City Agreement, Lessee shall have the option to purchase the Leased Premises upon the terms and conditions contained in Article 17 for a purchase price as follows: (a) the option may be exercised during the last three (3) years of the Term, by Lessee giving written notice thereof to Lessor one hundred and twenty (120) days prior to the proposed closing date; but in no event less than one hundred twenty (120) days prior to the end of the Term of the Lease; and (b) the purchase price shall be an amount equal to the sum of the remaining monthly installments of rent which would otherwise have been due through the end of the Term. 16.02 If Lessee fails for any reason to give timely notice of its exercise of the option to purchase, the option rights granted hereby shall automatically terminate. Article 17. Conditions of Purchase Option. 17.01 Upon valid exercise of the purchase option, the terms of purchase and sale shall include the following conditions and requirements: (a) Closing to be held not later than 120 days after date of Lessee's written notice to exercise the option. • (b) Conveyance shall be made by general warranty deed to Lessee, free of liens and encumbrances, except those for general property taxes and those created by acts or defaults of Lessee, and subject to easements, rights -of -way, conditions, covenants, restrictions, reservations, encumbrances and limitations of record and those created by acts of Lessee. (c) Sale shall be contingent upon prior approval of the Federal Aviation Administration and its issuance of all Deeds of Release therefore. (d) The Leased Premises shall be conveyed and transferred in their condition at the time of sale "AS IS" and "WHERE IS" without any representation or warranty with respect to the Leased Premises, including without limitation, the quantity, quality or condition of the Leased Premises, environmentally or otherwise. Article 18. Holding Over. In the event that Lessee does not exercise its option to purchase under Article 16 and 17 and Lessee shall, with the consent of Lessor, retain possession of the Leased Premises after the expiration of the Term of this Lease, this Lease shall continue on a month -to -month basis upon all the terms, covenants and conditions herein specified, except Articles 16 and 17 shall automatically expire at the end of the original Lease Term and shall thereafter be of no further force and effect. -8- • Article 19. Quiet Possession. Lessee shall, and may peacefully have, hold and enjoy the Leased Premises, subject to the other terms hereof, provided that Lessee pays the monthly rent herein recited and performs all of Lessee's covenants and agreements contained herein and in the City Agreement. Article 20. Default. 20.01 In the event of default at any time by Lessee in the payment of the monthly rent herein provided for or in the performance of any other of its covenants herein contained or contained in the City Agreement, Lessor shall have the right, immediately for the non - payment of rent and any other amount due hereunder; and in the event of other defaults, after thirty (30) days' notice in writing to Lessee and Lessee's failure within said thirty (30) day period to cure said default, or if said default does not relate to the payment of money and cannot by its nature be cured within said thirty (30) day period, to undertake and diligently pursue action to cure said default, to either: (a) terminate this Lease and re -enter and take possession of the Leased Premises, and/or (b) pursue any remedy whatsoever provided by law; and /or • (c) re -enter and take possession of the Leased Premises and use its best efforts to re -let the same for and on account of Lessee for the then full remaining portion of the unexpired Term of this Lease or for any shorter period, and to collect and receive payment of rent therefore, but no such re -entry or re- letting shall be construed as a termination of this Lease or as a release of Lessee from Lessee's obligation to pay monthly rent provided during the full Term of this Lease, or from Lessee's obligation to perform any other covenant herein contained. It expressly being understood and agreed that in the event of any such re -entry or re- letting by Lessor such re -entry or re- letting shall not operate to terminate this Lease in any other particular or alter the obligation of Lessee to perform its covenants and to pay monthly rent pursuant to the terms hereof unless Lessor expressly so elects pursuant to Section 20.01(a) above. Lessor shall in no way be responsible or liable for any failure to re -let the Leased Premises, or any part thereof, or for any failure to collect any rent due upon such re- letting. No notice from Lessor hereunder or under a forcible entry and detainer statute or similar law constitutes an election by Lessor to terminate this Lease unless such notice specifically so states. Lessor reserves the right following any such re -entry and/or re- letting to exercise its right to terminate this Lease. It is the express intention of this Section that no notice shall be required of Lessor as a condition precedent to the exercise of its remedies for a failure to pay the monthly rent and any other required payment of money by Lessee. 20.02 If Lessor does not elect to terminate this Lease but takes possession as provided for -9- in Section 20.01(c), Lessee shall pay to Lessor the monthly rent and other charges at the times and in the manner as herein provided which would be payable if such repossession had not occurred, less the net proceeds, if any, of any re- letting of the Leased Premises after deducting all Lessor's reasonable expenses including, without limitation, all repossession costs, brokerage commissions, legal expenses, attorneys' fees, alteration and repair costs and expenses of preparation for such re- letting. 20.03 In the event the parties hereto become involved in a dispute arising out of this Lease, or the performance or breach thereof, the Court shall award costs, expenses, and attorney fees to the prevailing party. 20.04 If Lessee violates any of the terms and provisions of this Lease or defaults in any of its obligations hereunder other than the payment of monthly rent or other sum payable hereunder, such violation may be restrained or such obligation enforced by injunction at the instance and request of Lessor and without the showing of any special damages or other adequate remedy at law. Article 21. Waiver and Time of Essence. No waiver of any breach or breaches of any provision, covenant or condition of this Lease shall be construed to be a waiver of any preceding or succeeding breach of such provision, covenant or condition, or of any other provision, covenant or condition. Acceptance of monthly rent or partial monthly rent by Lessor shall not constitute a waiver of any then existing breach or default. ' Time is of the essence for each and every provision, tovenant and condition herein contained and on the part of Lessee to be done and performed. Article 22. Assignment by Lessor. Lessor shall have the right to transfer and assign, in whole or in part, all its right and obligations hereunder and in the Leased Premises, and in such event and upon Lessor's transferee assuming Lessor's obligations hereunder no further liability or obligation shall thereafter accrue against Lessor hereunder. Lessor shall give Lessee written notice of its intent to make an assignment or transfer of this Lease and a copy of the express (written) assumption agreement between Lessor and assignee or transferor. Article 23. Subordination to Mortgage. This Lease shall be and is hereby made subordinate to any mortgage or deeds of trust which may now or hereafter encumber the Leased Premises and to all renewals, modifications, consolidations, replacements and extensions thereof. This clause shall be self - operative and no further instrument of subordination need be required by any mortgagee. This clause shall be for the benefit of any mortgagee. In confirmation of such subordination, however, Lessee shall, at Lessor's request, execute promptly any appropriate certificate, subordination agreement or instrument that Lessor may request. Lessee hereby constitutes and appoints Lessor the Lessee's -10- attorney -in -fact to execute any such certificate, subordination agreement or instrument for and on behalf of Lessee. Notwithstanding the fact that this Lease is and shall be subordinate as provided above, Lessee will as a result of the enforcement of the default or foreclosure provisions of such mortgage or deed of trust, including conveyance by deed in lieu of foreclosure, automatically become the Lessee of the person or party succeeding to the interest of Lessor without change in the terms or other provisions of this Lease and Lessee agrees to attorn to such party; provided, however, that such mortgagee or successor in interest shall not (i) be bound by any amendment or modification to this Lease made without the written consent of such mortgagee or such successor in interest; (ii) be liable for any previous act or omission by Lessor under this Lease; or (iii) be subject to any offset which shall theretofore have accrued to Lessee against Lessor. Lessee further agrees, upon demand, to execute such non - disturbance and attornment agreements as any such mortgagee or successor shall request. The provisions of this Article shall not alter or otherwise affect, alter or modify the option to purchase granted by Articles 16 and 17 of this Lease nor shall the provisions of this Article operate to increase or otherwise alter the purchase price to be paid by Lessee upon exercise of the option in accordance with the provisions of Article 17. Article 24. Estoppel Certificate. At Lessor's request Lessee will execute either an estoppel certificate addressed to Lessor's mortgagee or any prospective successor of Lessor, or a third -party agreement among Lessor, Lessee and said mortgagee or successor, certifying to such facts (if true) regarding the status and terms of this Lease as may be requested, and agreeing to such notice provisions and other matters as such mortgagee or successor may reasonably require in connection with Lessor's financing or the conveyance of the LeasedPremises. Article 25. Notices. All notices, demands or communications of any kind which may be required or desired to be served, given or made by Lessee upon or to Lessor, under the terms of or in connection with this Lease, shall be sufficiently served, given or made (as an alternative to personal service upon Lessor) if such notice, demand or communication is sent by certified United States mail, addressed to: Pueblo Development Foundation 301 N. Main St., Suite 210 Pueblo, Colorado 81003 (or at such other address as may hereafter from time to time be designated for this purpose by Lessor to Lessee in writing). All notices, demands or communications of any kind which may be required or desired to be served, given or made by Lessor upon or to Lessee, under the terms of or in connection with this Lease, shall be sufficiently served, given or made (as an alternative to personal service upon Lessee) if such notice, demand or communication is sent by certified United States Mail, addressed to: -11- Westwind Wood Specialties, Inc. 33645 United Avenue Pueblo, CO 81001 (or to such other address as may hereafter from time to time be designated for this purpose by Lessee to Lessor in writing). Article 26. Environmental Provisions. 26.01. For the purpose of this Lease, "Hazardous Materials" means any hazardous or toxic substance, material or waste which is or become regulated by any local government authority, the State of Colorado or the United States government and shall include, but not be limited to (1) substances defined as "hazardous waste," "restricted hazardous waste," "hazardous substance" or "hazardous • material" under any applicable federal, state or local law or regulation ( "Environmental Regulations "), (2) asbestos - containing materials, (3) PCBs, (4) petroleum or petroleum based products, and (5) lead. 26.02 Lessee will comply with Environmental Regulations that are applicable to the Lessee and its use of the Leased Premises. No activity shall be undertaken by the Lessee, its employees, agents, licensees, invitees, contractors or subcontractors, on all or any portion of the Leased Premises which would cause or permit: (i) the presence, use, generation, release, discharge, storage or disposal of any Hazardous Material in, on, under, about, or from the Leased Premises or any part thereof in violation of any Environmental Regulations; (ii) any portion of the Leased Premises to become a hazardous waste treatment, storage or disposal facility without receiving proper governmental authorization, and in compliance with all Environmental Regulations; or (iii) the discharge of pollutants or effluents into any water source or system, or the discharge into the air of any emissions without receiving proper governmental authorization, and in compliance with all Environmental Regulations, including, without limitation, the Federal Water Pollution Control Act, U.S.C. Section 1251 et seq. and the Clean Air Act, 42 U.S.C. Section 7401 et seq. 26.03 Lessee agrees to indemnify and forever hold harmless the Leased Premises, Lessor, its agents, successors, and assigns and Lessor's mortgagee, as their interest may appear, from all claims, losses, damages, expenses and costs, including, but not limited to, attorneys' fees, remedial, and cleanup costs, incurred by reason of the use, storage, generation, release, discharge, maintenance, disposal, or removal of Hazardous Materials in, on, under, about, or from the Leased Premises, or any part thereof, by Lessee, its employees, agents, licensees, invitees, contractors and subcontractors. The provisions of Article 27 shall expressly survive the expiration of the Term or other termination of this Lease. Article 27. Escrow of Funds to Pay Taxes and Insurance. -12- • 27.01 Deposits for Taxes. Payments by Lessee for real property taxes shall be made in accordance with the provisions of Article 12 hereof. The purpose of these monthly deposit payments is to provide Lessor with funds on hand to pay all such taxes in a timely manner. Provided that no default exists under the Lease or under the City Agreement, Lessor will apply the amounts so deposited toward the payment of such taxes, assessments and other charges when due, but in no event will Lessor be liable for any interest on any amount so deposited, and the money so received may be held and commingled with Lessor's own funds. 27.02 Deposits for Premiums. Notwithstanding any other provision of this Lease, on February 1, 2013, Lessee shall deposit with Lessor an amount equal to 1 /12th of the amount that would have been required to make the last most recent annual payments of the premiums for the policies of insurance referred to Sections 10.02 and 11.01 above, multiplied by the number of whole and partial months that have elapsed since the most recent policy anniversary date for each such policy. Thereafter, with each monthly rent payment due under the Lease (or on or before the first day of each month during the period in which Lessee is not required to pay make monthly rent payments pursuant to Section 3.01 above), Lessee shall deposit with Lessor an amount equal to 1 /12th of the amount that would have been sufficient to pay the last most recent annual premium for each insurance policy referred to in Sections 10.02 and 11.01 above. The purpose of these deposits is to provide Lessor with sufficient funds on hand to pay all such premiums 30 days before the date on which they become past due. Provided that no default exists under the Lease or the City Agreement, Lessor will apply the amounts so deposited to the payment of such insurance premiums when due, but in no event will Lessor be liable for any interest on any amount so deposited, and the money so received may be held and commingled with Lessor's own funds. Article 28. Miscellaneous Provisions. 28.01 Colorado Law. This Lease shall be governed by the laws of the State of Colorado and shall be construed in accordance therewith. 28.02 Writing for Waiver or Modification. No provision of this Lease may be waived or modified except by an agreement in writing signed by the waiving party. A waiver of any term or provision shall not be construed as a waiver of any other term or provision. 28.03 Binding Effect. This Lease sets forth the entire and complete understanding and agreement of the parties hereto. Lessee acknowledges and agrees that it has not relied upon any statements, representations, agreements or warranties except such as are expressed herein. This Lease shall be binding on the parties, their successors and approved assigns. The parties agree to do any and all things lawful and necessary to effectuate the purpose of this Lease. 28.04 Construction. Throughout this Lease, the singular shall include the plural; the plural shall include the singular; and the masculine and neuter shall include the feminine, wherever the context so requires. 28.05 Text to Control. The headings of sections are included solely for convenience of -13- reference. If any conflict between any heading and the text of this Lease exists, the text shall control. 28.06 Severability. If any provisions of this Lease is declared by any court of competent jurisdiction to be invalid for any reason, such invalidity shall not effect the remaining provisions. On the contrary, such remaining provisions shall be fully severable, and this Lease shall be construed and enforced as if such invalid provisions had never been inserted in the Lease. 28.07 Venue and Jury Trial. Lessor and Lessee agree that the venue for all actions or causes of action relating to this Lease or the Leased Premises shall be in Pueblo County, Colorado. All such actions shall be filed in the District Court, County of Pueblo, State of Colorado and Lessor and Lessee submit to the jurisdiction of that Court. To the extent allowed by law, each party waives its right to a jury trial. 28.08 Lessee's Warranties. The persons signing this Lease on behalf of Lessee represent and warrant that such parties and Lessee have the requisite power and authority to enter into, execute and deliver this Lease and that this Lease is a valid and legally binding obligation of Lessee enforceable against Lessee in accordance with its terms. IN WITNESS WHEREOF, Lessor and Lessee, by their duly authorized representatives, have executed this Lease on the day and year first above written. PUEBLO DEVELOPMENT FOUNDATION WESTWIND WO • I SPECIALTIES, INC. ,i , By / By `_::/ Title:/ /,0 Title 7 [SEAL] [SEAL] Attest: Attest „„ r 41 11, Name: v- , Y C _ s h, M Name: Y1� y,e1A . Title: 71 ,,, {, Title: �c7 \ -14-