2359 ORDINANCE NO. 035-1
AN ORDINANCE AUTHORIZING THE ISSUANCE OF INDUSTRIAL
DEVELOPMENT REVENUE BONDS UNDER THE MUNICIPALITIES
AND COUNTIES INDUSTRIAL DEVELOPMENT REVENUE BOND
LAW FOR THE PURPOSE OF SECURING AND DEVELOPING
INDUSTRY (THE PARTICULAR INDUSTRIAL PROJECT IS
DESCRIBED IN THE ORDINANCE); AUTHORIZING THE SALE OF
THE BONDS AND THE APPROVAL OF A BOND PURCHASE
AGREEMENT AND A PAYMENT IN LIEU OF TAXES AGREEMENT IN
CONNECTION THEREWITH; AUTHORIZING THE EXECUTION AND
DELIVERY OF A TRUST INDENTURE SECURING THE BONDS;
AUTHORIZING AND PRESCRIBING CERTAIN MATTERS
PERTAINING TO THE INDUSTRIAL PROJECT, THE ACQUISITION,
CONSTRUCTION, AND EQUIPPING THEREOF, AND THE FINANCING
THEREOF; AUTHORIZING THE EXECUTION AND DELIVERY OF A
LEASE AGREEMENT RELATING TO THE PROJECT; PRESCRIBING
OTHER MATTERS RELATING THERETO; AND DECLARING AN
EMERGENCY.
WHEREAS, the City of West Memphis, Arkansas is authorized by the Municipalities and
Counties Industrial Development Revenue Bond Law, as amended, Ark. Code Ann. §§ 14-164-
201 et seq. (the "Act"), to acquire lands, construct and equip industrial buildings, improvements,
and facilities, and incur other costs and expenses and make other expenditures incidental to and
for the implementing and accomplishing of the conduct of industrial operations; and
WHEREAS, the City is authorized by the Act to issue industrial development revenue bonds
payable from revenues derived from the industrial project so acquired, constructed, and
equipped; and
WHEREAS, BASF Corporation (the "Company") has evidenced its interest in acquiring and
installing machinery, equipment, and other personal property (the "Project") at its existing
industrial facility located at 100 Bridgeport Cove, West Memphis, Arkansas 72301, if the
permanent financing can be provided through the issuance of bonds under the authority of the
Act; and
WHEREAS, to provide permanent financing of a portion of the costs of the Project, the City
will issue its taxable industrial development revenue bonds under the provisions of the Act
designated "City of West Memphis, Arkansas Taxable Industrial Development Capital
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Improvement Revenue Bonds (BASF Corporation Project), Series 2014," in the principal amount
of$30,000,000 (the "Bonds");
WHEREAS, the Bonds will be issued pursuant to the provisions of a Trust Indenture, dated
as of December 1, 2014 (the "Trust Indenture"), between the City and Regions Bank, as Trustee
(the "Trustee"); and
WHEREAS, the Project will be leased to the Company pursuant to a Lease Agreement,
dated as of December 1, 2014 (the "Lease Agreement"), by and between the City and the
Company; and
WHEREAS, to induce the City to proceed with the issuance of the Bonds for the purposes
indicated, which will inure to the benefit of the Company, the City and the Company will enter
into a Payment in Lieu of Taxes Agreement (the "PILOT Agreement") with respect to the
Project; and
WHEREAS, an open public hearing on the question of the issuance of the Bonds and the
provisions of the PILOT Agreement was held before the City Council of the City on
November 20, 2014, following publication of notice in the Evening Times on November 7, 2014,
and that having heard all persons desiring to be heard in the matter, the City took under
advisement the comments and statements of such persons, and declared the public hearing duly
closed; and
WHEREAS, the City proposes to sell the Bonds to BASF Catalyst Holding, LLC (the
"Purchaser") pursuant to a Bond Purchase Agreement by and between the City and the
Purchaser; and
WHEREAS, the Project will furnish additional employment and other benefits to and be in
the best interest of the City and its residents;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY
OF WEST MEMPHIS, ARKANSAS that:
Section 1. There be, and there is hereby authorized and directed the following:
(a) The issuance of the Bonds in the principal amount of $30,000,000 and the sale of the
Bonds to the Purchaser for a price of par upon the terms and conditions set forth in the Bond
Purchase Agreement.
(b) The execution and delivery of the Trust Indenture, Lease Agreement, Bond Purchase
Agreement, and PILOT Agreement by the Mayor on behalf of the City generally in the form
[Page 2 of 5]
r
submitted to this meeting, it being understood that subsequent changes thereto shall be approved
by the Mayor, his execution to constitute conclusive evidence of such approval without further
consent or approval by the City. Executed copies of the Trust Indenture, Lease Agreement, Bond
Purchase Agreement, and PILOT Agreement shall be filed in the office of the City Clerk.
(c) The acquisition and installation of the Project, and, in connection therewith, the execution
of any necessary contracts or the acceptance of an assignment of any such contracts previously
executed by the Company for the acquisition and installation of the Project.
(d) The performance of all obligations of the City under the Lease Agreement pertaining to
the acquisition and installation of the Project.
(e) The collateral assignment of the Lease Agreement to the Trustee as security for the
payment of the Bonds.
Section 2. The Bonds shall be dated the date of their initial authentication and delivery, shall
bear interest from such date, shall mature (subject to prior redemption) on the twentieth
anniversary of the issuance date of the Bonds, and shall bear interest at the rate of 5.00% per
annum payable as described in the Indenture.
Section 3. To provide the terms and conditions upon which the Bonds are to be secured,
executed, authenticated, issued, accepted, and held, the Mayor and City Clerk are hereby
authorized and directed to execute, acknowledge, and deliver the Trust Indenture, and the City
Clerk is hereby authorized and directed to acknowledge the Trust Indenture and to affix the seal
of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the
Trust Indenture to be accepted, executed, and acknowledged by the Trustee without further
consent or approval by the City. The Trust Indenture is hereby approved in generally the form
submitted to this meeting, and the Mayor is hereby authorized to confer with the Trustee, the
Company, and the Purchaser in order to complete the Trust Indenture in generally the form
submitted to this meeting, it being understood that subsequent changes thereto shall be approved
by the Mayor, his execution to constitute conclusive evidence of such approval without further
consent or approval by the City.
(Notice is given that, pursuant to the Act, a copy of the Trust Indenture, in
generally the form authorized to be executed, is on file with the City Clerk of the
City of West Memphis and are available for inspection by any interested person.)
[Page 3 of 5]
Section 4. There be, and there is hereby, authorized and directed the execution and delivery
of the Lease Agreement, and the Mayor and City Clerk are hereby authorized to execute,
acknowledge, and deliver the Lease Agreement for and on behalf of the City. The Lease
Agreement is hereby approved in generally the form submitted to this meeting, and the Mayor is
hereby authorized to confer with the Company, the Trustee, and the Purchaser in order to
complete the Lease Agreement in generally the form submitted to this meeting, it being
understood that subsequent changes thereto shall be approved by the Mayor, his execution to
constitute conclusive evidence of such approval without further consent or approval by the City.
(Notice is given that, pursuant to the Act, a copy of the Lease Agreement, in
generally the form authorized to be executed, is on file with the City Clerk of the
City of West Memphis and is available for inspection by any interested person.)
Section 5. The Mayor and City Clerk, for and on behalf of the City, be, and they are hereby
authorized and directed to do any and all things necessary to effect the execution of the Lease
Agreement and the performance of the City's obligations under the Lease Agreement; the
execution and delivery of the Trust Indenture, its execution and acceptance by the Trustee, and
the performance of all obligations of the City under and pursuant to the Indenture; the execution
and delivery of the Bonds, the Bond Purchase Agreement, and the PILOT Agreement; and the
performance of all other acts of whatever nature necessary to effect and carry out the authority
conferred by this Ordinance. The Mayor and the City Clerk are further authorized and directed,
for and on behalf of the City, to execute all papers, documents, certificates, and other instruments
that may be required for the carrying out of such authority or to evidence the exercise thereof.
Section 6. Since the City is here involved with the acquisition, constructing, and equipping
of a complex industrial project, requiring highly specialized work and specialized types of
machinery and equipment, it has been and is hereby determined by the City Council that
competitive bidding be, and the same is hereby, waived as to this particular industrial project.
This action is taken by the City Council pursuant to applicable laws of the State of Arkansas,
including particularly the Act.
Section 7. All actions heretofore taken by the City, the Company, and the Purchaser in
connection with the offer and sale of the Bonds are hereby in all respects ratified and approved.
Section 8. Severability. In the event any title, section, paragraph, item, sentence, clause,
phrase, or word of this ordinance is declared or adjudged to be invalid or unconstitutional, such
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declaration or adjudication shall not affect the remaining portions of this ordinance, which shall
remain in full force and effect as if the portion so declared or adjudged invalid or
unconstitutional was not originally a part of this ordinance.
Section 9. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby
repealed to the extent of such conflict.
Section 10. There is hereby found and declared to be an immediate need for the securing and
developing of substantial industrial operations in order to provide additional employment,
alleviate unemployment, and otherwise benefit the public health, safety, and welfare of the City
and the inhabitants thereof, and the issuance of the Bonds authorized hereby and the taking of the
other action authorized herein are immediately necessary in connection with the securing and
developing of substantial industrial operations and deriving the public benefits referred to above.
It is therefore, declared that an emergency exists and this Ordinance, being necessary for the
immediate preservation of the public health, safety, and welfare, shall be in force and take effect
immediately upon and after its passage.
PASSED: November 2014
ATTEST: APPROVED:
P iOara, City Clerk William H. Johnson, Mayor
[Page 5 of 5]
City of West Memphis,Arkansas
Taxable Industrial Development Revenue Bonds (BASF Corporation Project), Series 2014
CITY CLERK'S CERTIFICATE
STATE OF ARKANSAS )
ss
COUNTY OF CRITTENDEN )
I hereby acknowledge that forms of the following documents (unexecuted) have been filed in
my office on this date:
1. Trust Indenture between the City of West Memphis, Arkansas and Regions Bank, as
Trustee, dated as of December 1, 2014.
2. Lease Agreement between the City and BASF Corporation, dated as of December 1, 2014.
3. Payment in Lieu of Taxes Agreement between the City and BASF Corporation, dated
December 20, 2014.
4. Bond Subscription Agreement between the City and BASF Catalyst Holding, LLC, dated
December 20, 2014.
All of the documents identified above relate to $30,000,000 City of West Memphis, Arkansas
Taxable Industrial Development Revenue Bonds (BASF Corporation Project), Series 2014, and
are marked: "As presented to the West Memphis City Council 11/20/2014."
IN TESTIMONY WHEREOF, I have hereunto set my hand and affixed the Seal of said City
on this November 20, 2014.
Phillip Para,City Clerk
4
As presented to the West Memphis City Council
11/20/2014
BOND SUBSCRIPTION AGREEMENT
December 22, 2014
City of West Memphis,Arkansas
P.O. Box 1728
West Memphis, AR 72303
Re:$30,000,000 City of West Memphis, Arkansas Taxable Industrial Development
Revenue Bonds (BASF Corporation Project), Series 2014
Ladies& Gentlemen:
The undersigned (the "Purchaser") hereby agrees to purchase at a price of [Principal Amount]
plus accrued interest, if any, and does hereby evidence its subscription for, a bond numbered R-1,
bearing interest at the rate of 5.00% per annum, and maturing on December 22, 2034, constituting
all of the above-captioned issue of bonds (the "Bonds") issued by the City of West Memphis,
Arkansas (the"Issuer"), all as more fully described in the Indenture (hereinafter defined).
The Bonds will be issued pursuant to an Indenture of Trust dated as of December 1, 2014 (the
"Indenture"), between the Issuer and Regions Bank, as trustee (the "Trustee"), for the purpose of
providing funds for a substantial industrial project for the manufacture of water treatment and
specialty monomer products, consisting of machinery, equipment, and other personal property,
located at 100 Bridgeport Cove, West Memphis, Arkansas 71730 (the "Project"), which will be
leased to BASF Corporation, a Delaware corporation (the "Company"), pursuant to a Lease
Agreement dated as of December 1, 2014 (the"Agreement"),between the Issuer and the Company.
The Purchaser hereby covenants, represents, and warrants to you that:
1. The Purchaser is an accredited investor within the meaning of such term under Rule 501(a) of
Regulation D promulgated by the Securities and Exchange Commission pursuant to Section
4(2) of the Securities Act of 1933, as amended;
2. The Purchaser has sufficient knowledge and experience in financial and business matters,
including the purchase and ownership of municipal and other tax-exempt obligations,to be able
to evaluate the risks and merits of an investment in the Bonds;
3. The Purchaser is aware that the operations of the Company involve certain economic variables
and risks that could affect adversely the security of an investment in the Bonds;
4. The Purchaser understands that the Bonds are payable as to principal and interest solely from
the sources described in the Indenture and the Agreement, copies of which have been made
available;
•
Bond Subscription Agreement
December 22, 2014
Page 2
5. The Purchaser acknowledges and understands that the Bonds do not constitute general
obligations of the Issuer and under no circumstances shall the Bonds be payable from, nor
shall the holders thereof have any rightful claim to, any income, revenues, funds, or assets of
the Issuer other than those pledged under the Indenture as security for the payment of the
Bonds;
6. The Purchaser has had the opportunity to ask questions and receive answers from
knowledgeable individuals concerning the Company, the Bonds, and the security therefor, so
that as a reasonable investor, the Purchaser has been able to make its own informed decision to
purchase the Bonds;
7. The Purchaser understands that the Bonds (i) are not registered under the Securities Act of 1933,
as amended, and are not registered or otherwise qualified for sale under the"Blue Sky" laws and
regulations of any state, (ii)are not listed on any stock or other securities exchange, (iii) carry no
rating from any rating service, and(iv)have no trading market applicable thereto; and
8. The Purchaser represents that it is able to bear the economic risk of investment in the Bonds,
and in this regard (i) is acquiring the Bonds for investment and not with a view to resale or
distribution, (ii) does not have an overall commitment to investments which are not readily
marketable, including the Bonds, disproportionate to its net worth, and (iii) has adequate means
for providing for its current and anticipated needs and contingencies and does not anticipate in
the foreseeable future any need to sell any Bonds purchased.
BASF CATALYST HOLDING, LLC
By:
Name:
Title:
ACCEPTED:
CITY OF WEST MEMPHIS, ARKANSAS
By:
William H. Johnson,Mayor
Date: December 22, 2014
Bond Subscription Agreement
December 22, 2014
Page 3
APPROVED AND ACCEPTED:
BASF CORPORATION
By:
Name:
Title:
Date: December 22,2014
As presented to the West Memphis City Council
11/20/2014
LEASE AGREEMENT
between
CITY OF WEST MEMPHIS, ARKANSAS, as Lessor
and
BASF CORPORATION, as Lessee
Dated as of December 1, 2014
The interest of the Lessor in this Lease Agreement has been assigned to Regions
Bank, as Trustee, under the Trust Indenture, dated as of December 1, 2014, securing
$30,000,000 City of West Memphis, Arkansas Taxable Industrial Development
Revenue Bonds (BASF Corporation Project), Series 2014.
Prepared by:
Rose Law Firm
a Professional Association
120 East Fourth Street
Little Rock, Arkansas 72201-2893
Attention: M. Jane Dickey
Bond Counsel
LEASE AGREEMENT
TABLE OF CONTENTS*
Page
ARTICLE I
Section 1.1. Definitions
Section 1.2. Rules of Interpretation
ARTICLE II
Representations
Section 2.1. Representations by Issuer
Section 2.2. Representations by Company
ARTICLE III
Demising Clauses and Warranty of Title
Section 3.1. Demise of the Project
Section 3.2. Warranty of Title
Section 3.3. Quiet Enjoyment
ARTICLE IV
Acquisition and Installation of the Project; Issuance of the Bonds
Section 4.1. Agreement to Acquire and Install the Project
Section 4.2. Disbursements from Project Fund
Section 4.3. Furnishing Documents to Trustee
Section 4.4. Company Required to Pay in Event Bond Proceeds Insufficient
Section 4.5. Enforcement of Contracts
Section 4.6. Ownership of Tax Benefits
Section 4.7. Investment of Moneys
Section 4.8 Agreement to Issue Bonds; Application of Bond Proceeds
ARTICLE V
Effective Date of This Agreement; Definition of Lease Term;Rental Provisions
Section 5.1. Effective Date of this Agreement; Duration of Lease Term
Section 5.2. Delivery and Acceptance of Possession
Section 5.3. Basic Rent and Additional Rent Payable
Section 5.4. Place of Rental Payments
Section 5.5. Obligations of Company Hereunder Unconditional
Section 5.6. Credit for Bonds Surrendered
The Table of Contents shall be solely for convenience of reference and shall neither constitute a
part of this Agreement nor affect its meaning, construction or effect.
.
ARTICLE VI
Maintenance, Modifications, Impositions, and Insurance
Section 6.1. Maintenance and Modifications of Project by Company
Section 6.2. Removal of Leased Equipment
Section 6.3. Impositions
Section 6.4. Insurance
Section 6.5. Release and Indemnification Covenants
Section 6.6. PILOT Agreement
ARTICLE VII
Condemnation; Use of Net Proceeds
Section 7.1. Rights of Parties in Event of Condemnation; Bonds Protected in Any
Event
Section 7.2. Company Obligated to Continue Basic and Additional Rental
Payments Until Condemnation Award Available
Section 7.3. Right of Company to Participate in Condemnation Proceedings
Section 7.4. Issuer's Covenant Not to Condemn
ARTICLE VIII
Special Covenants
Section 7.1. No Warranty of Condition or Suitability by Issuer
Section 7.2. Inspection of the Project
Section 7.3 Company to Maintain its Existence; Conditions Under Which
Exceptions Permitted
Section 7.4. Inspection of Project
ARTICLE IX
Assignment, Subleasing, Pledging, and Selling; Redemption;
Optional and Mandatory Prepayment of Rent; Abatement of Rent
Section 8.1. Assignment and Subleasing
Section 8.2. Restrictions on Sale, Mortgage, or other Conveyance of Project by
Issuer
Section 8.3. Redemption of Bonds
Section 8.4. Prepayment of Rents
Section 8.5. Company Entitled to Certain Rent Abatement if Bonds Paid Prior to
Maturity
Section 8.6. Reference to Bonds Ineffective After Bonds Paid or Cancelled
ARTICLE X
Events of Default and Remedies
Section 9.1. Events of Default
Section 9.2. Remedies on Default
Section 9.3. No Remedy Exclusive
ii
Section 9.4. Agreement to Pay Attorneys' Fees and Expenses
Section 9.5. No Waiver
Section 9.6. Notice of Default
Section 9.7. Equitable Relief
ARTICLE XI
Option in Favor of Company
Section 10.1. Extraordinary Optional Redemption
Section 10.2 Option to Acquire Legal Title Upon Full Payment, Cancellation, or
Return of the Bonds
Section 10.3 Conveyance on Exercise of Option to Acquire Legal Title
ARTICLE XII
Miscellaneous
Section 11.1. Notices
Section 11.2. Binding Effect
Section 11.3. Severability
Section 11.4. Amendments,Changes, and Modifications
Section 11.5. Priority of Agreement
Section 11.6. Execution Counterparts
Section 11.7. Captions
Section 11.8. Security Agreement; Recording and Filing
Section 11.9. Law Governing Construction of Agreement
Execution
Exhibit A Project Description A-1
Exhibit B Form of Requisition Certificate B-1
iii
LEASE AGREEMENT
This LEASE AGREEMENT, dated as of December 1, 2014, is between the City of West
Memphis, Arkansas (the "Issuer"), a county organized and existing under the laws of the State of
Arkansas (the "State"), as lessor; and BASF Corporation (the "Company"), a corporation organized
and existing under the laws of the State of Delaware, as lessee:
WITNESSETH:
WHEREAS,the Issuer is authorized by the Municipalities and Counties Industrial Development
Revenue Bond Law, Ark. Code Ann. §§ 14-164-201 to -224 (the "Act"), to acquire lands, construct
and equip industrial buildings, improvements, and facilities, incur other costs and expenses, and
make other expenditures incidental to and for the securing and developing of industry; and
WHEREAS, the Issuer is authorized by the Act to issue taxable industrial development revenue
bonds payable from revenues derived from the industrial project so acquired, constructed, and
equipped and secured by a lien thereon and security interest therein; and
WHEREAS, the necessary arrangements have been made with the Company for a substantial
industrial project for the manufacture of water treatment and specialty monomer products,
consisting of the acquisition and installation of machinery, equipment, and other personal property,
located on at 100 Bridgeport Cove, West Memphis, AR 72301, and to lease the same to the
Company; and
WHEREAS, the Company desires that the Issuer issue its $30,000,000 Taxable Industrial
Development Revenue Bonds (BASF Corporation Project), Series 2014 (the "Bonds"), to provide
funds to acquire, equip, and install the project identified above, and the Issuer has agreed to do the
same; and
WHEREAS, pursuant to a Trust Indenture, dated as of the date hereof, between the Issuer and
Regions Bank, as Trustee, having all requisite power and authority to act as trustee, and having a
corporate trust office in Mobile, Alabama, as Trustee, the Issuer intends to assign to the Trustee as
security for the Bonds its interest in this Agreement (except for the reimbursement of certain
expenses and payments for indemnification of the Issuer); and
NOW, THEREFORE, in consideration of the respective representations and agreements
hereinafter contained, the Issuer and the Company agree as follows (provided, that in the
performance of the agreements of the Issuer herein contained, any obligation it may thereby incur
for the payment of money shall not be a general debt on its part, but shall be payable solely out of
the proceeds derived from this Agreement, the sale of the Bonds, and the insurance and
condemnation awards as herein provided):
ARTICLE I
Defmitions
Section 1.1 Definitions. All terms defined in the Indenture shall have the same meanings for
purposes of this Agreement and of any amendment hereto. In addition, unless the context requires
1
otherwise, the terms defined in this Article shall, for all purposes of this Agreement and any
amendment hereof,have the meanings herein specified:
"Agreement" means this Lease Agreement, dated as of December 1, 2014, between the Issuer
and the Company, as amended or supplemented from time to time.
"Authorized Company Representative"means the person at the time designated to act on behalf
of the Company by written certificate furnished to the Issuer and the Trustee containing the
specimen signature of such person and signed on behalf of the Company by its President or any
Vice President.
"Basic Rent"means the amounts payable as basic rent pursuant to Section 5.3(a).
"Bond Subscription Agreement" means the Bond Subscription Agreement, dated December 22,
2014, from the Purchaser to the Issuer, and approved by the Company.
"Company" means BASF Corporation, a corporation organized and existing under the laws of
the State of Delaware, and,to the extent permitted by Section 7.3, its lawful successors and assigns.
"Company Documents"means this Agreement and the PILOT Agreement.
"Indenture" means the Trust Indenture, dated as of December 1, 2014, between the Issuer and
the Trustee, as Trustee, as amended or supplemented from time to time, pursuant to which the
Bonds are authorized to be issued.
"Issuer" means the City of West Memphis, Arkansas, a county under the laws of the State of
Arkansas, and its successors and assigns.
"Lease Term" means the duration of the Company's right to use and occupy the Project as
specified in Section 5.1.
"Leased Equipment" means those items of machinery, equipment, and other personal property
located at 100 Bridgeport Cove, West Memphis, Arkansas, and acquired with proceeds from the
sale of the Bonds and any item of machinery, equipment, and other personal property acquired in
substitution therefor pursuant to the provisions of this Agreement, but not including the Company's
own machinery, equipment, and personal property installed under the provisions of this Agreement.
The Leased Equipment shall be identified in a ledger which shall be maintained by the Company.
"Net Proceeds"when used with respect to any insurance or condemnation award, shall mean the
gross proceeds from the insurance or condemnation award, with respect to which that term is used,
remaining after payment of all expenses (including attorney's fees and any extraordinary fee of the
Trustee) incurred in the collection of such gross proceeds.
"PILOT Agreement"means the Agreement for Payments in Lieu of Taxes, dated the Issue Date,
between the Company and the Issuer.
2
"Project" means the Leased Equipment, and any other property now or hereafter located at 100
Bridgeport Cove, West Memphis, Arkansas and financed out of the proceeds of the Bonds, as they
may at any time exist.
"Unassigned Issuer's Rights" means the Issuer's rights to payments pursuant to Section
5.3(b)(1), the Issuer's rights to reimbursement pursuant to Section 6.6, and the Issuer's rights to
indemnification pursuant to Section 6.5.
Section 1.02 Rules of Interpretation. For purposes of this Agreement, except as otherwise
expressly provided or the context otherwise requires:
(a) The words "herein," "hereof," and "hereunder" and other similar words refer to this
Indenture as a whole and not to any particular Article, Section, or other subdivision.
(b) The definitions in this Article are applicable whether the terms defined are used in the
singular or the plural.
(c) All accounting terms which are not defined in this Agreement have the meanings assigned to
them in accordance with then applicable generally accepted accounting principles.
(d) Any pronouns used in this Indenture include both the singular and the plural and cover both
genders.
(e) Any terms not defined in this Agreement but which are defined in the Indenture have the
same meaning in this Agreement as are given to them in the Indenture.
(f) Any terms defined elsewhere in this Indenture have the meanings attributed to them where
defined.
(g) Words referring to the redemption or calling for redemption of Bonds shall not be deemed to
refer to the payment of Bonds at their stated maturity.
(h) The captions or headings herein are for convenience only and in no way define, limit, or
describe the scope or intent, or control or affect the meaning or construction, of any provisions or
sections hereof.
(i)Any references to Section numbers are to Sections of this Agreement unless stated otherwise.
ARTICLE II
Representations
Section 2.1. Representations by Issuer. The Issuer makes the following representations as the
basis for the undertakings on its part herein contained:
(a)Under the provisions of the Act and the Constitution of the State,the Issuer is authorized
to enter into the transactions to be performed by it under this Agreement, the Indenture, and the
PILOT Agreement and to carry out its obligations hereunder and thereunder. The Issuer has
3
been duly authorized to execute and deliver this Agreement, the PILOT Agreement, and the
Indenture.
(b) The Issuer will perform all of its obligations with reference to the acquisition and
installation of the Project as specified in Article IV.
(c)Notwithstanding anything herein contained to the contrary, it is the intention of the Issuer
that any obligation it may hereby incur for the payment of money shall not be a general debt on
its part but shall be payable solely from the proceeds derived from this Agreement, the sale of
the Bonds, and the insurance and condemnation awards as herein provided.
(d) The Issuer has been induced to enter into this undertaking by the promise of the
Company to locate industrial facilities within the corporate limits of the Issuer.
(e) In order to furnish necessary moneys for the payment of Project Costs, the Issuer has
authorized the issuance of the Bonds.
(f) The Bonds are to be issued under and secured by the Indenture, pursuant to which the
Issuer's interest in this Agreement and the revenues and receipts derived by the Issuer from the
leasing of the Project will be pledged to the Trustee as security for payment of the principal of
and interest on the Bonds.
(g) The Issuer covenants that it will not pledge the amounts derived from this Agreement
other than to secure the Bonds.
(h)Nothing in this Agreement shall be construed to require the Issuer to operate the Project.
(i) The Mayor of the Issuer has no pecuniary interest in the Company.
Section 2.2. Representations by Company. The Company makes the following representations
as the basis for the undertakings on its part herein contained:
(a) The Company is a corporation duly organized and existing under the laws of the State of
Delaware, is in good standing under the laws of the State of Delaware, is in good standing under
the laws of the State and qualified to do business in the State, and has power to enter into the
Company Documents and to perform all obligations contained herein and therein, and by proper
corporate action,has been duly authorized to execute and deliver the Company Documents.
(b) Neither the execution and delivery of the Company Documents, the consummation of
the transactions contemplated hereby and thereby, nor the fulfillment of or compliance with the
terms and conditions hereof and thereof conflicts with or results in a material breach of the
terms, conditions, or provisions of the Certificate of Incorporation or Bylaws of the Company or
any agreement or instrument to which the Company is now a party or by which the Company is
bound, or constitutes a material default under any of the foregoing, or results in the creation or
imposition of any lien, charge, or encumbrance whatsoever upon any of the property or assets of
the Company under the terms of any instrument or agreement except as provided herein.
4
(c) There is no action, suit, proceeding, inquiry, or investigation, at law or in equity, before
or by any court or public board or body, known to be pending or threatened against or affecting
the Company, nor to the best of the knowledge of the Company is there any basis therefor,
wherein an unfavorable decision, ruling, or finding would materially adversely affect the
transactions contemplated by the Company Documents or which, in any way, would materially
adversely affect the validity or enforceability of the Bonds, the Company Documents, or any
other agreement or instrument to which the Company is a party used or contemplated for use in
the consummation of the transactions contemplated hereby.
(d) The Company agrees to cooperate with the Issuer in the performance of the Issuer's
obligations under the Indenture.
(e)No actions will be taken by the Company which shall in any way impair the qualification
of the Project under the Act.
(f) The agreement by the Issuer to enter into this undertaking has induced the Company to
acquire, construct, and equip an industrial enterprise within the corporate limits of the Issuer.
(g) The Company will operate the Project upon its completion as a manufacturing facility
for water treatment and specialty monomer products until the expiration or earlier termination of
the Lease Term as provided herein, and for such other uses as the Company may deem
appropriate, all to the extent that such operation is, in the Company's judgment, commercially
desirable. Additionally,the Company shall have sole control and discretion over its operations.
(h) The Project consists of machinery, equipment, and other personal property that can be
used to secure and develop industry within the City of West Memphis, Arkansas, and its
estimated Project Costs are not less than$30,000,000.
(i) The proceeds from the sale of the Bonds will be used only for the payment of the Project
Costs.
(j) The Company covenants that, anything in this Agreement to the contrary
notwithstanding, so long as any of the Bonds are Outstanding, there shall be no abatement or
reduction of the rent payable by the Company except as provided in Section 8.5.
ARTICLE III
Demising Clauses and Warranty of Title
Section 3.1. Demise of the Project. The Issuer demises and leases to the Company, and the
Company leases from the Issuer, the Project at the rental set forth in Section 5.3 and in accordance
with the provisions of this Agreement.
TO HAVE AND TO HOLD the Project unto the Company for the Lease Term as hereafter set
forth.
Section 3.2. Warranty of Title. The Issuer warrants that it lawfully owns and is lawfully
possessed of the Project and that it has good and merchantable title and estate therein, free from all
encumbrances,but it has no liability in regard thereto.
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Section 3.3. Quiet Enjoyment. The Issuer covenants and agrees that the Company,upon paying
the rent herein and upon performing and observing the covenants, conditions, and agreements
hereof, shall and may peaceably hold and enjoy the Project during the Lease Term without any
interruption or disturbance, subject however,to the terms of this Agreement.
ARTICLE IV
Acquisition and Installation of the Project; Issuance of the Bonds
Section 4.1. Agreement to Acquire and Install the Project. All payments necessary to acquire
and install the Project shall be made out of the Project Fund. The obligations of the Issuer hereunder
are subject to the provisions of this Agreement limiting the obligations of the Issuer to the extent of
moneys in the Project Fund.
The Company shall, concurrently with the delivery of this Agreement, notify the Issuer and the
Trustee of the Authorized Company Representative. It is agreed that the Company may have more
than one Authorized Representative and may change the Authorized Representative or
Representatives from time to time, with each such change to be in writing forwarded to the Issuer
and the Trustee. The Authorized Company Representative so designated shall be authorized to enter
into and execute any contracts or agreements or to grant any approvals or to take any action for and
on behalf of the Company, and the Issuer shall be entitled to rely upon the duly designated
Authorized Company Representative as having full authority to bind the Company.
Section 4.2. Disbursements from Project Fund.
(a) Except as provided in the Indenture in case of certain Events of Default with respect to the
Bonds,the Trustee shall disburse proceeds of the Bonds in accordance with this Section.
(b) The Issuer has, in the Indenture, authorized and directed the Trustee to make disbursements
from the Project Fund for payment of Project Costs for the purpose acquiring the Project from the
Company. The Trustee shall disburse proceeds of the Bonds from the Project Fund to pay Project
Costs upon receipt of a requisition in substantially the form provided in Exhibit B to this
Agreement.
(c) In making any payment from the Project Fund, the Trustee may rely conclusively on
requisitions and certificates delivered to it pursuant to this Section, and the Trustee and the Issuer
shall be relieved of all liability with respect to the accuracy of such requisitions and certificates and
the making of such payments in accordance with such requisitions and certificates and all liability to
see to the proper application thereof by the Company.
(d) In the event of the recording of any notice of contractor's or mechanic's lien relating to the
Project, the Company shall promptly notify the Trustee of such event and shall cause any such
recording to be removed forthwith or to be bonded, secured, or insured in a manner reasonably
satisfactory to the Trustee.
Section 4.3. Furnishing Documents to Trustee. The Company agrees to cause such
requisitions to be directed to the Trustee as may be necessary to effect payments out of the Project
Fund in accordance with Section 4.2. The Trustee shall retain a record of all such requisitions.
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Section 4.4. Company Required to Pay in Event Bond Proceeds Insufficient. In the event
the proceeds of the Bonds available for payment of the Project Costs should not be sufficient to pay
the Project Costs in full, the Company agrees to complete the Project and to pay that portion of the
Project Costs in excess of the moneys available therefor from Bond proceeds. The Issuer does not
make any warranty, either express or implied, that the proceeds of the Bonds and available for
payment of the Project Costs will be sufficient to pay all of the Project Costs. The Company agrees
that if, after exhaustion of the proceeds of the Bonds, the Company should pay any portion of the
Project Costs pursuant to the provisions of this Section, the Company shall not be entitled to any
reimbursement therefor from the Issuer,the Trustee, or the owners of any of the Bonds,nor shall the
Company be entitled to any diminution of the amounts payable under Section 5.3.
Section 4.5. Enforcement of Contracts.
(a) The Issuer covenants that it will take any action and institute any proceedings requested by
the Company, or cooperate with the Company in the case of such proceedings instituted by the
Company, to cause and require all contractors and material suppliers to complete their contracts
diligently in accordance with the terms of said contracts, including, without limitation, the
correcting of any defective work. All expenses incurred by the Issuer in connection with the
performance of its obligations under this subsection may be considered part of the Project Costs,
and the Issuer agrees that the Company may, from time to time, in its own name, or in the name of
the Issuer, take such action as may be necessary or advisable, as determined by the Company, to
insure the acquisition and installation of machinery, equipment, and other personal property in
accordance with any applicable contract pertaining thereto, to insure the peaceable and quiet
enjoyment of the Project for the Lease Term. All costs and expenses incurred by the Company in
connection therewith may be considered part of the Project Costs.
(b) If requested by the Company, the Issuer will assign and extend to the Company any vendor's
warranties received by the Issuer in connection with machinery, equipment, and other personal
property purchased by the Issuer for the Project, together with any warranties given by contractors,
manufacturers, or service organizations who install any machinery, equipment, and other personal
property on or in the Project. If requested, the Issuer will execute and deliver instruments of
assignment to the Company to accomplish the foregoing.
Section 4.6. Ownership of Tax Benefits. It is the intention of the parties that any tax benefits
resulting from ownership of the Project and any tax credit or comparable credit which may ever be
available with respect to the Project shall accrue to the benefit of the Company, and the Company
shall, and the Issuer upon advice of Counsel may, make any election and take other action in
accordance with the Internal Revenue Code and the regulations promulgated thereunder as may be
necessary to entitle the Company to have such benefit and credit.
Section 4.7. Investment of Moneys. Money held for the credit of any fund or account created in
the Indenture shall, to the extent practicable, be invested and reinvested in Eligible Investments
which shall mature not later than the date or dates on which the money held for credit of the
particular fund shall be required for the purposes intended. The Trustee shall so invest and reinvest
pursuant to written instructions from the Company.
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The Trustee may make any and all such investments through its own investment department or
the investment department of any bank or trust company under common control with the Trustee.
The Issuer shall have no responsibility for control of or directing such investments and shall not be
held accountable for any losses resulting from any such investments. All such investments and the
income thereon shall at all times be a part of the fund (the Project Fund, the Debt Service Fund, or
such other fund, as the case may be) from which the moneys used to acquire such investments shall
have come, and all losses on such investments shall be charged against such fund. All investments
shall be registered in the name of the Trustee, as Trustee under the Indenture.
Section 4.8. Agreement to Issue Bonds; Application of Bond Proceeds. In order to provide
funds for payment of the Project Costs, the Issuer, concurrently with the execution of this
Agreement, will issue, sell, and deliver the Bonds and deposit the proceeds thereof with the Trustee
in the Project Fund.
ARTICLE V
Effective Date of This Agreement; Definition of Lease Term; Rental Provisions
Section 5.1. Effective Date of this Agreement; Duration of Lease Term. This Agreement
shall become effective upon its delivery, and the leasehold estate created herein shall then begin,
and, subject to the provisions of this Agreement (including particularly Sections 5.3 and 7.1 and
Articles VI, IX, and X), shall continue until the later of(a) such date as payment has been made in
full of the Bonds or provision for such payment has been made as provided in the Indenture or(b)at
midnight, Little Rock, Arkansas time, December 22, 2034. The Company has the option to
terminate this Agreement at any time upon 60 days' notice in writing upon deposit of an amount in
the Debt Service Fund sufficient to pay all of the Outstanding Bonds (when due at maturity or upon
redemption as permitted in the Indenture), the interest thereon, and the related Issuer's, Trustee's,
and Paying Agent's fees.
Section 5.2. Delivery and Acceptance of Possession. The Issuer agrees that the Company shall
have possession of the Project (subject to the right of the Trustee to enter thereon for inspection
purposes and to the other provisions of Section 7.2) whenever such possession is desired by the
Company.
Section 5.3.Basic Rent and Additional Rent Payable.
(a) Basic Rent. On or before the Business Day preceding each Interest Payment Date until the
principal of and interest on the Bonds shall have been fully paid or provision for the payment
thereof shall have been made in accordance with the Indenture, the Company shall pay to the
Trustee as Basic Rent for the Project a sum equal to the interest and principal, if any, to be paid on
the Bonds on the next succeeding Interest Payment Date, as provided in the Indenture. The
Company, on any date on which all the Bonds shall be declared to be and shall become due and
payable prior to their stated maturity pursuant to the provisions of the Indenture, shall also pay
directly to the Trustee the aggregate amount of principal and interest so becoming due and payable
on all the Bonds. In the event any Basic Rent payment under this Section shall be insufficient to pay
the total amount of principal and interest payable on the next succeeding Interest Payment Date or
redemption date,and if at any said payment date the balance in the Debt Service Fund is insufficient
8
to make required payments of principal and interest on such date, the Company shall forthwith pay
any such deficiency.
Anything herein to the contrary notwithstanding, any amount at any time held by the Trustee in
the Debt Service Fund shall be credited against the next succeeding Basic Rent payment and shall
reduce the payment to be made by the Company to the extent such amount is in excess of the
amount required for payment of Bonds theretofore matured or called for redemption and past due
interest in all cases where such Bonds have not been presented for payment; and further, if the
amount held by the Trustee in the Debt Service Fund should be sufficient to pay at the times
required the principal of and interest on the Bonds then remaining unpaid,the Company shall not be
obligated to make any further Basic Rent payments under the provisions of this subsection. It is
understood and agreed that all payments payable by the Company under this subsection are assigned
by the Issuer to the Trustee for the benefit of the owners of the Bonds. The Company assents to such
assignment.
(b)Additional Rent.
(1) The Company will pay the reasonable fees and expenses of the Issuer related to the
issuance of the Bonds or in connection with the Project and incurred upon the written request of
the Company, such reasonable fees and expenses to be paid directly to the Issuer for the Issuer's
own account, as and when such reasonable fees and expenses become due and payable.
(2) The Company will pay the reasonable fees and expenses of the Trustee and any Paying
Agents, such reasonable fees and expenses to be paid directly to the Trustee or any Paying
Agents for the Trustee's or any such Paying Agents' own account, as and when such reasonable
fees and expenses become due and payable, and any reasonable expenses in connection with
any redemption of the Bonds.
(c) In the event the Company should fail to make any of the payments required in this Section,
the item or installment so in default shall continue as an obligation of the Company until the amount
in default shall have been fully paid, and the Company agrees to pay the same with interest thereon
or with respect to payments to the Trustee or the Issuer with interest thereon, to the extent permitted
by law, from the date thereof at the highest rate of interest borne by the Bonds. The provisions of
this Section shall be subject to the provisions of Section 8.5.
Section 5.4. Place of Rental Payments. The Basic Rent provided for in Section 5.3 shall be
paid directly to the Trustee for the account of the Issuer and will be deposited in the Debt Service
Fund. The Additional Rent payments provided for in Section 5.3 shall be paid directly to the
Trustee or the Issuer, as the case may be, for their own use or for disbursement to the Paying
Agents.
Section 5.5. Obligations of Company Hereunder Unconditional. Subject to the provisions of
Section 8.5 hereof, the obligations of the Company to make the payments required in Section 5.3
and to perform and observe the other agreements on its part contained herein shall be absolute and
unconditional, and the payments required in Section 5.3 shall be certainly payable on the dates and
at the times specified without notice or demand (except that failure to pay Additional Rent as
required in Section 5.3 shall not constitute an event of default until continuation of such failure for a
9
period of seven days following notice as set forth in Section 9.1(b)), and without abatement or set-
off, and regardless of any contingencies whatsoever, and notwithstanding any circumstances or
occurrences that may now exist or that may hereafter arise or take place, including, but without
limiting the generality of the foregoing:
(a) The unavailability of the Project or any part thereof for use by the Company at any time
by reason of the failure to complete the overall industrial project by any particular time or at all
or by reason of any other contingency, occurrence, or circumstance whatsoever;
(b)Damage to or destruction of the Project or any part thereof;
(c) Legal curtailment of the Company's use of the Project or any part thereof;
(d) Change in the Issuer's legal organization or status;
(e) The taking of title to or the temporary use of the whole or any part of the Project by
condemnation;
(f) Any termination of this Agreement for any reason whatsoever (other than in connection
with the acquisition of the Project by the Company hereunder);
(g)Failure of consideration or commercial frustration of purposes;
(h)Any change in the tax or other laws of the United States of America or of the State; or
(i) Any default of the Issuer under this Agreement or any other fault or failure of the Issuer
whatsoever.
Nothing contained in this Section shall be construed to release the Issuer from the performance
of any of the provisions of this Agreement on its part to be performed.
The Company covenants that it will not enter into any contract, indenture, or agreement of any
nature whatsoever which shall in any way limit, restrict, or prevent the Company from performing
any of its obligations under this Agreement.
Section 5.6. Credit for Bonds Surrendered. The Company shall have the right to surrender
Bonds acquired by it to the Trustee. Bonds so redeemed, purchased, or surrendered shall be
forthwith cancelled and the principal amounts thereof shall be applied as credits upon the Basic
Rent payments due and payable with respect to the respective maturity dates or redemption dates of
Bonds.
ARTICLE VI
Maintenance,Modifications,Impositions, and Insurance
Section 6.1. Maintenance and Modifications of Project by Company.
(a) The Company agrees that during the Lease Term it will at its own expense keep the Project
in reasonably safe condition as its operations shall permit.
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(b)The Company may from time to time, in its sole discretion and at its own expense,make any
additions or modifications at the Project location, including installation of additional machinery,
equipment, furniture, or fixtures, which it may deem desirable for its business purposes. All
machinery, equipment, furniture, and fixtures so installed by the Company shall remain the sole
property of the Company (other than interest of a secured party) in which neither the Issuer nor the
Trustee shall have any interest, and may be sold, encumbered, modified, or removed at any time
while the Company is not in default under this Agreement; provided that any damage to the Project
occasioned by such modification or removal shall be repaired by the Company at its own expense.
(c) The Company will not permit any mechanics',materialmen's, or other liens to be established
or remain against the Project for labor or materials furnished in connection with any addition,
modifications, improvements, repairs, renewals, or replacements so made by it; provided, that if the
Company shall first notify the Trustee of its intention so to do, the Company may in good faith
contest any mechanics' or other liens filed or established against the Project, and in such event may
permit the items so contested to remain undischarged and unsatisfied during the period of such
contest and any appeal therefrom unless the Issuer or the Trustee shall notify the Company that, in
the opinion of Counsel, by nonpayment of any such items the security of the Bondowners, as to any
part of the Project, will be materially endangered or the Project or any substantial part thereof will
be subject to loss or forfeiture, in which event the Company shall promptly pay and cause to be
satisfied and discharged or bond (if legally permissible) all such unpaid items. The Issuer will
cooperate fully with the Company in any such contest.
Section 6.2. Removal of Leased Equipment. The Issuer shall not be under any obligation to
renew,repair, or replace any inadequate, obsolete, worn-out, unsuitable,undesirable, or unnecessary
Leased Equipment. In any instance where the Company in its sound discretion determines that any
items of Leased Equipment have become inadequate, obsolete, worn-out,unsuitable, undesirable, or
unnecessary, the Company may remove such items of Leased Equipment from the Project location
and (on behalf of the Issuer) sell, trade-in, exchange, or otherwise dispose of them(as a whole or in
part)without any responsibility or accountability to the Issuer or the Trustee therefor.
The removal from the Project of any portion of the Leased Equipment pursuant to the provisions
of this Section shall not entitle the Company to any abatement or diminution of the rents payable
under Section 5.3.
Section 6.3. Impositions. The Company shall, during the Lease Term, bear, pay, and discharge,
before the delinquency thereof, all taxes and assessments, general and special, if any, which may be
lawfully taxed, charged, levied, assessed, or imposed upon or against or be payable for or in respect
of the Project, or any part thereof, or any improvements at any time thereon or the Company's
interest in the Project under this Agreement, including any new lawful taxes and assessments not of
the kind enumerated above to the extent that the same are lawfully made, levied against real and
personal property, and further including all water and sewer charges, assessments, and other
governmental charges and impositions whatsoever, foreseen or unforeseen, which if not paid when
due would encumber the Issuer's title to the Project (all of the foregoing being herein referred to as
"Impositions"). In the event any special assessment taxes are lawfully levied and assessed which
may be paid in installments, the Company shall be required to pay only such installments thereof as
become due and payable during the Lease Term as and when the same become due and payable.
11
Any Impositions which the Company is required to bear, pay, and discharge shall be remitted
directly to the authority which is entitled to the payment thereof.
Within 30 days after the last day for payment, without penalty or interest, of an Imposition
which the Company is required to bear, pay, and discharge pursuant to the terms hereof, the
Company shall deliver to the Issuer upon its written request a reproduced copy of the statement
issued therefor duly receipted to show the payment thereof.
The Company shall have the right, in its or the Issuer's name, to contest in good faith the
validity or amount of any Imposition which the Company is required to bear, pay, and discharge
pursuant to the terms of this Section by appropriate legal proceedings provided the Company,
before instituting any such contest in the Issuer's name, gives the Issuer written notice of its
intention so to do and the Company diligently prosecutes any such contest, at all times effectively
stays or prevents any official or judicial sale therefor, under execution or otherwise, and promptly
pays any final judgment enforcing the Imposition so contested and thereafter promptly procures
record release or satisfaction thereof. The Company shall hold the Issuer whole and harmless from
any costs and expenses the Issuer may incur related to any such contest.
The Issuer covenants that it will not part with title to the Project or any part thereof during the
Lease Term or take any other affirmative action which may reasonably be construed as tending to
cause or induce the levy or assessment of ad valorem taxes on the Project. The Issuer and the
Company acknowledge that under present law no part of the Project will be subject to ad valorem
taxation by the State or by any political or taxing subdivision thereof.
Section 6.4. Insurance.
(a) Insurance Required. Throughout the Lease Term, the Company shall keep the Project
continuously insured against such risks as are customarily insured against by business of like size
and type,paying as the same become due all premiums in respect thereto.
(b) Payment of Insurance Premiums. The Company shall pay as they become due all
premiums for the insurance required by subsection (a) of this Section and shall renew or replace
each policy prior to the expiration date thereof or otherwise maintain the coverage so required
without any lapse in coverage.
Section 6.5. Release and Indemnification Covenants.
(a) The Company shall and hereby agrees to indemnify and save the Issuer (including but not
limited to past, present, and future officials, officers, directors, agents, and other persons acting on
the Issuer's behalf) and the Trustee, and their officers, agents, and employees, harmless against and
from all claims by or on behalf of any person, firm, corporation, or other legal entity arising from
the conduct or management of, or from any work or thing done on, the Project during the Lease
Term, including without limitation, (1)any condition of the Project, (2) any breach or default on the
part of the Company in the performance of any of its obligations under this Agreement, (3) any act
or negligence of the Company or of any of its agents, contractors, servants, employees, or licensees,
or(4) any act or negligence of any assignee or lessee of the Company, or of any agents, contractors,
servants, employees, or licensees of any assignee or lessee of the Company. The Company shall
indemnify and save the Issuer and the Trustee harmless from any such claim arising as aforesaid, or
12
in connection with any action or proceeding brought thereon, and upon notice from the Issuer or the
Trustee,the Company shall defend them or either of them in any such action or proceedings.
(b)It is the intention of the parties hereto that the Issuer shall not incur any pecuniary liability by
reason of the terms of this Agreement or the undertakings required of the Issuer hereunder, by
reason of the issuance of the Bonds, by reason of the execution of the Indenture, or by reason of the
performance of any act requested of the Issuer by the Company, including all claims, liabilities, or
losses arising in connection with the violation of any statutes or regulations pertaining to the
foregoing; nevertheless, if the Issuer should incur any such pecuniary liability, then in such event
the Company shall indemnify and hold the Issuer, its officials, officers, directors, agents, and
employees harmless against all claims by or on behalf of any person, firm, or corporation or other
legal entity arising out of the same and all costs and expenses reasonably incurred in connection
with any such claim or in connection with any action or proceeding brought thereon, and upon
notice from the Issuer, the Company shall defend the Issuer in any such action or proceeding.
(c)Nothing contained in this Section shall be construed to indemnify or release the Issuer from
its liability in connection with the Project arising from the wanton negligence or intentional acts or
failure to act on the part of the Issuer, its employees, agents, or representatives acting in their
capacities as such.
Section 6.6. PILOT Agreement. The Company has entered into the PILOT Agreement for
payments in lieu of ad valorem taxes that would otherwise be levied by local public bodies with
taxing authority. The Company covenants and agrees that it will pay all amounts required to be paid
under the PILOT Agreement.
ARTICLE VII
Special Covenants
Section 7.1. No Warranty of Condition or Suitability by Issuer. THE ISSUER MAKES NO
WARRANTY,EITHER EXPRESS OR IMPLIED,AS TO THE CONDITION OF THE PROJECT
OR THAT IT WILL BE SUITABLE FOR COMPANY'S PURPOSES OR NEEDS.
Section 7.2. Inspection of the Project. The Company agrees that the Trustee and the Issuer and
their duly authorized agents shall have the right at all reasonable times during business hours to
enter upon the location of the Project and to enforce its rights under this Agreement without
interference or prejudice to the Company's operations.
Section 7.3. Company to Maintain its Existence; Conditions under which Exceptions
Permitted. The Company will maintain its existence as a corporation and will not dissolve or
otherwise dispose of all or substantially all of its assets and will not consolidate with or merge into
another entity or permit one or more other entities to consolidate with or merge into it; provided,
however, the Company may, without violating such agreement, consolidate with or merge into
another entity, or permit one or more other entities to consolidate with or merge into it, or sell or
otherwise transfer to another legal entity all or substantially all of its assets as an entirety and
thereafter dissolve on the condition that such surviving, resulting, or transferee entity shall expressly
assume in writing all of the obligations of the Company contained in the Company Documents, and
that the net tangible assets (determined in accordance with International Financial Reporting
13
Standards) of the other entity after the consolidation, merger, or sale shall be at least equal to the net
tangible assets of the Company immediately prior to such consolidation, merger, or sale. In the
event of the consolidation with or merger into another entity or the sale of all, or substantially all, of
its business and assets by the Company, as permitted by this Section, and the assumption by the
surviving, resulting, or transferee entity of the obligations hereof, Company shall be relieved from
all further obligations hereunder. Ninety days after such consolidation, merger, or sale, the
Company shall give notice thereof to the Issuer and the Trustee. Nothing in this Section shall be
deemed to prevent or restrict the Company from selling or issuing securities in a public offering or
private placement. This section, however, does not apply to a merger or consolidation of the
Company with or into an affiliate or related entity so long as the surviving entity assumes the
obligations herein and the Company provides notice to the Issuer of the subject transaction.
Section 7.4. Inspection of Project. So long as any of the Bonds are Outstanding, the Company
will permit, after receiving reasonable notice, any representatives of the Trustee, at its expense, to
visit and inspect the Project, to examine all of the Company's books of account, records, reports,
and other papers, to make copies and extracts therefrom, and to discuss its affairs, finances, and
accounts relating to the Project with its officers, employees, and independent public accountants
(and by this provision the Company authorizes its accountants to discuss the same) all at such
reasonable times and as often as may be reasonably requested; provided, however, that the Trustee
shall hold such information in confidence and shall not use such information for any purpose other
than to determine whether the covenants, terms, and provisions of this Agreement have been
complied with by the Company and to protect its interest under this Agreement or where disclosure
may be required by law. Nothing herein shall be deemed to constitute a waiver of any accountant-
client privilege during the pendency of litigation between the Trustee and the Company.
ARTICLE VIII
Assignment,Pledging, and Selling; Redemption; Optional and Mandatory Prepayment of
Rent; Abatement of Rent
Section 8.1. Assignment. The Company may assign this Agreement or part thereof without the
prior written consent of the Issuer. Notwithstanding the foregoing, no assignment and no dealings or
transactions between the Issuer or the Trustee and any assignee shall relieve the Company of any of
its obligations under this Agreement, and the Company shall remain as fully bound as though no
assignment had been made, and performance by any assignee shall be considered as performance
pro tanto by the Company.
It is understood and agreed that this Agreement (and the leased equipment and rents hereunder)
will be assigned and pledged to the Trustee as security for the payment of the principal of and
interest on the Bonds, but otherwise the Issuer shall not, without the prior written consent of the
Company, assign, encumber, sell, or dispose of all or any part of its rights, title, and interest in and
to the leased equipment and this Agreement, except to the Company in accordance with the
provisions of this Agreement and to the Trustee under the Indenture, but subject to the provisions
set forth below, without the prior written consent of the Company.
Section 8.2. Restrictions on Sale, Mortgage, or other Conveyance of Project by Issuer. The
Issuer agrees that, except for the assignment of this Agreement and the rentals hereunder to the
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Trustee pursuant to the Indenture, it will not sell, assign, mortgage, pledge, transfer, or convey the
Project during the Lease Term, except as specifically provided in this Agreement.
Section 8.3. Redemption of Bonds. The Issuer, at the request at any time of the Company and
if the Bonds are then callable, shall forthwith take all steps that may be necessary under the
applicable redemption provisions of the Indenture to effect redemption of all or part of the then
outstanding Bonds, as may be specified by the Company, on the earliest redemption date on which
such redemption may be made under such applicable provisions or upon the date set for the
redemption by the Company pursuant to Section 10.1.
Section 8.4. Prepayment of Rents. To permit the redemption of Bonds pursuant to the exercise
of any options of the Company hereunder, and solely for that purpose,there is expressly reserved to
the Company the right, and the Company is authorized and permitted, at any time it may choose, to
prepay all or any part of the rents payable under Section 5.3, and the Issuer agrees that the Trustee
may accept such prepayment of rents when the same are tendered by the Company. All rents so
prepaid shall be credited on the rental payments specified in Section 5.3, in the order of their
maturities, and shall be used for the redemption of the Bonds in accordance with the Indenture.
Section 8.5. Company Entitled to Certain Rent Abatement if Bonds Paid Prior to
Maturity. If at any time the moneys in the Debt Service Fund shall be sufficient to retire, in
accordance with the provisions of the Indenture, all of the Bonds Outstanding, and to pay all fees
and charges of the Trustee due or to become due through the date on which the last of the Bonds is
retired, under circumstances not resulting in termination of the Lease Term, and if the Company is
not at the time otherwise in default hereunder, the Company shall be entitled to use and occupy the
Project from the date on which such aggregate moneys are in the hands of the Trustee to and
including the date on which the last of the Bonds is retired, without the payment of Basic Rent
during the interval (but otherwise on the terms and conditions hereof, in the absence of exercise of
the purchase option provided for in Section 10.2).
Section 8.6. Reference to Bonds Ineffective After Bonds Paid or Cancelled. Upon payment
in full or cancellation of the Bonds or the return thereof marked paid in full (or provision for
payment thereof having been made in accordance with the provisions of the Indenture) and all fees
and charges of the Trustee, all references in this Agreement to the Bonds and the Trustee shall be
ineffective and neither the Trustee nor the Bondowners shall thereafter have any rights hereunder,
saving and excepting those that shall have theretofore vested.
ARTICLE IX
Events of Default and Remedies
Section 9.1 Events of Default. Each of the following shall be an Event of Default:
(a) The Company shall fail to pay any Lease Payment on or prior to the date on which
such Lease Payment is due and payable.
(b) The Company shall default in the performance of or breach of any agreement,
covenant, warranty, or representation contained in this Agreement (other than as specified in
subsection (a) of this Section), and the continuation of such failure for a period of 90 days
after notice thereof shall have been given to the Company by the Issuer or the Trustee, or for
15
such longer period as the Issuer and the Trustee may agree to in writing; provided, that if the
failure is other than the payment of money and is of such nature that it can be corrected but
not within the applicable period, that failure shall not constitute an Event of Default so long
as the Company institutes curative action within the applicable period and diligently pursues
that action to completion.
(c) The Company shall (1) institute a voluntary case under Bankruptcy Law; (2) consent
to the appointment or taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, or other similar official of the Company or any substantial portion of its
property; (3) make any assignment for the benefit of creditors; (4) admit in writing its
inability generally to pay its debts generally as they become due; or (5) take corporate action
in furtherance of any of the foregoing.
(d) (1) A decree or order for relief by a court having jurisdiction of the Company
adjudging the Company as insolvent or approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition in respect of the Company in an
involuntary case under Bankruptcy Law shall have been filed with respect to the Company;
(2) a receiver, liquidator, assignee, custodian, trustee, sequestrator, or other similar official of
the Company or of any substantial portion of the Company's property shall have been
appointed; or (3) a decree for the winding up or liquidation of the Company's affairs shall
have been entered and such decree or order shall have continued unstayed and in effect for a
period of 60 consecutive days.
(e)An event of default shall occur under the Indenture.
(f) The Trustee shall receive notice from the Issuer of a failure by the Company to
comply with the terms and conditions set forth in the PILOT Agreement.
Notwithstanding the foregoing, if, by reason of Force Majeure (as hereinafter defined), the
Company is unable to perform or observe any agreement, term, or condition hereof which would
give rise to an Event of Default under subsection (b) of this Section, the Company shall not be
deemed in default during the continuance of such inability. However, the Company shall
promptly give notice to the Trustee and the Issuer of the existence of an event of Force Majeure
and the Company shall use its best efforts to remove the effects thereof; provided that the
settlement of strikes or other industrial disturbances shall be entirely within its discretion. The
term Force Majeure shall mean, without limitation, the following: acts of God; strikes, lockouts,
or other industrial disturbances; acts of public enemies; orders or restraints of any kind of the
government of the United States of America or of the State or any of their departments, agencies,
political subdivisions, or officials, or any civil or military authority; insurrections; civil
disturbances; riots; epidemics; landslides; lightning; earthquakes; fires; hurricanes; tornadoes;
storms; droughts; floods; arrests; restraint of government and people; explosions; breakage,
malfunction or accident to facilities, machinery, transmission pipes, or canals; partial or entire
failure of utilities; shortages of labor, materials, supplies, or transportation; or any other cause,
circumstance or event not reasonably within the control of the Company.
16
Section 9.2. Remedies on Default. Whenever an Event of Default shall have happened and
be continuing, the Issuer (with the consent of the Trustee if the Indenture has not been
discharged) or the Trustee any one or more of the following remedial steps may be taken:
(a) If acceleration of the principal amount of the Bonds has been declared pursuant to
Section 7.02 of the Indenture, declare all Lease Payments to be immediately due and
payable, whereupon the same shall be and become immediately due and payable.
(b) Re-enter and take possession of the Project without terminating this Agreement and
sublease the Project for the account of the Company, holding the Company liable for the
difference in the rent and other amounts payable by such sublessee in such subleasing and the
Basic Rent and Additional Rent payable by the Company hereunder.
(c) Terminate the Lease Term, exclude the Company from possession of the Project, and
use its best efforts to lease the Project to another for the account of the Company.
(d) Have access to, inspect, examine, and make copies of the books, records, accounts,
and financial data of the Company pertaining to the Project.
(e) Pursue all remedies now or hereafter existing at law or in equity to collect all amounts
then due and thereafter to become due under this Agreement or to enforce the performance
and observance of any other obligation or agreement of the Company hereunder.
Notwithstanding the foregoing, the Issuer shall not be obligated to take any step which in its
opinion will or might cause it to expend time or money or otherwise incur liability unless and
until a satisfactory indemnity bond has been furnished to the Issuer at no cost or expense to the
Issuer. Any amounts collected as Lease Payments or applicable to Lease Payments and any other
amounts which would be applicable to the payment of amounts due under this Agreement and
the Indenture collected pursuant to action taken under this Section shall be paid into the Debt
Service Fund and applied in accordance with the provisions of the Indenture or, if the
Outstanding Bonds have been paid and discharged in accordance with the provisions of the
Indenture, shall be paid as provided in the Indenture for transfers of remaining amounts in the
Bond Fund.
The provisions of this Section are subject to the further limitation that the rescission by the
Trustee of its declaration that all of the Bonds are immediately due and payable may but need not
constitute an annulment of any corresponding declaration made pursuant to paragraph (a) of this
Section and a waiver and rescission of the consequences of that declaration and of the Event of
Default with respect to which that declaration has been made, provided that no such waiver or
rescission shall extend to or affect any subsequent or other default or impair any right consequent
thereon.
Section 9.3. No Remedy Exclusive. No remedy conferred upon or reserved to the Issuer or
the Trustee by this Agreement is intended to be exclusive of any other available remedy or
remedies, but each and every such remedy shall be cumulative and shall be in addition to every
other remedy given under this Agreement now or hereafter existing at law, in equity, or by
statute. No delay or omission to exercise any right or power accruing upon any default shall
impair that right or power or shall be construed to be a waiver thereof, but any such right and
17
power may be exercised from time to time and as often as may be deemed expedient. In order to
entitle the Issuer or the Trustee to exercise any remedy reserved to it in this Article, it shall not
be necessary to give any notice, other than any notice required by law or for which express
provision is made herein.
Section 9.4. Agreement to Pay Attorneys' Fees and Expenses. If an Event of Default
should occur and the Issuer or the Trustee should incur expenses, including attorneys' fees, in
connection with the enforcement of this Agreement, or the collection of sums due hereunder, the
Company shall reimburse the Issuer and the Trustee, as applicable, for the reasonable expenses
so incurred upon demand.
Section 9.5. No Waiver. No failure by the Issuer or the Trustee to insist upon the strict
performance by the Company of any provision hereof shall constitute a waiver of the right to
strict performance and no express waiver shall be deemed to apply to any other existing or
subsequent right to remedy the failure by the Company to observe or comply with any provision
hereof.
Section 9.6. Notice of Default. The Company or the Issuer shall notify the Trustee
immediately if it becomes aware of the occurrence of any Event of Default hereunder or of any
fact, condition or event which, with the giving of notice or passage of time or both, would
become an Event of Default.
Section 9.7. Equitable Relief. The Issuer, the Company, and the Trustee shall each be entitled
to specific performance, injunctive, or other appropriate equitable relief for any breach or threatened
breach of any of the provisions of this Agreement, notwithstanding the availability of an adequate
remedy at law, and each party hereby waives the right to raise such defense in any proceeding in
equity.
ARTICLE X
Options in Favor of Company
Section 10.1. Extraordinary Optional Redemption. The Company shall have, subject to the
conditions hereinafter imposed, the option to direct the redemption of the entire unpaid principal
balance of the Bonds in accordance with Section 3.06 of the Indenture and other applicable
provisions of the Indenture upon the occurrence of any of the following events.
(a) The Project shall have been damaged or destroyed to such an extent that (1) it cannot
reasonably be expected to be restored, within a period of six months, to the condition thereof
immediately preceding such damage or destruction or (2) its normal use and operation is
reasonably expected to be prevented for a period of six consecutive months.
(b) As a result of any changes in the Constitution of the State, the Constitution of the
United States of America, or state or federal laws or as a result of legislative or
administrative action (whether state or federal) or by final decree,judgment, or order of any
court or administrative body (whether state or federal) entered after the contest thereof by the
Issuer or the Company in good faith, this Agreement shall have become void or
unenforceable or impossible of performance in accordance with the intent and purpose of the
parties as expressed in this Agreement, or if unreasonable burdens or excessive liabilities
18
mow
shall have been imposed with respect to the Project or the operation thereof, including,
without limitation, federal, state, or other ad valorem, property, income, or other taxes not
being imposed on the date of this Agreement other than ad valorem taxes presently levied
upon privately owned property used for the same general purpose as the Project.
To exercise its option provided for in this Section, the Company, within 90 days following
the event authorizing the exercise of that option, shall give notice to the Issuer and the Trustee
specifying the date on which the Company will deliver the funds required for redemption, which
date shall be not more than 90 days from the date that notice is mailed, and shall make
arrangements satisfactory to the Trustee for the giving of the required notice of redemption.
The amount payable by the Company in the event of its exercise of the option granted in this
Section shall be the sum of the following:
(A) An amount of money which, when added to the moneys and investments held to the
credit of the Debt Service Fund, will be sufficient pursuant to the provisions of the Indenture
to pay, at par, and discharge all then Outstanding Bonds on the earliest applicable redemption
date,plus
(B) An amount of money equal to all other payments, fees, and expenses relating to the
Bonds accrued and to accrue until actual final payment and redemption of the Bonds,
including amounts to be paid to the Trustee.
The requirement of (B) above with respect to additional payments to accrue may be met if
provisions satisfactory to the Trustee and the Issuer are made for paying those amounts as they
accrue.
The rights and options granted to the Company in this Section may be exercised whether or
not the Company is in default hereunder; provided, that such default will not relieve the
Company from performing those actions which are necessary to exercise any such right or option
granted hereunder.
Section 10.2. Option to Acquire Legal Title upon Full Payment, Cancellation, or Return of
the Bonds. The Company shall have and is hereby granted an option to purchase and acquire legal
title to and the Issuer agrees to sell the Project at or at any time during or after the expiration or
sooner termination of the Lease Term following full payment or cancellation of the Bonds (or
provision for payment thereof having been made in accordance with the provisions of the Indenture)
or the return to the Issuer of the Bonds marked "Paid in Full" for a price of$10. At the closing of
the foregoing purchase,the Issuer will deliver to the Company the documents referred to in Section
10.3.
The rights and options granted to the Company in this Section may be exercised whether or
not the Company is in default hereunder; provided, that such default will not relieve the
Company from performing those actions which are necessary to exercise any such right or option
granted hereunder.
Section 10.3. Conveyance on Exercise of Option to Acquire Legal Title. At the closing of the
purchase pursuant to the exercise of any option to acquire legal title granted herein, or upon
19
payment in full of its obligations pursuant to subsection A of Section 7.1 or Section 10.1, the Issuer
will upon receipt of the purchase price deliver to the Company the following:
(a) If the Indenture shall not at the time have been satisfied in full, a release from the Trustee
of the property being acquired from the lien of the Indenture.
(b) Documents conveying to the Company good and marketable title to the property being
acquired, as such property then exists, subject to the following: (1) those liens and
encumbrances, if any, to which title to said property was subject when conveyed to the Issuer;
(2) those liens and encumbrances created by the Company or to the creation or suffering of
which the Company consented; and (3) those liens and encumbrances resulting from the failure
of the Company to perform or observe any of the agreements on its part contained in this
Agreement.
ARTICLE XI
Miscellaneous
Section 11.1. Notices. All notices, certificates, or other communications hereunder shall be
sufficiently given and shall be deemed given when mailed by registered or certified mail, return
receipt requested,postage prepaid, addressed as follows:
Company: BASF Corporation
100 Park Ave
Florham Park. NJ 07932
Attn: Real Estate Counsel
With a copy to:
Rose Law Firm, a Professional Association
120 East Fourth Street
Little Rock,AR 72201
Issuer: City of West Memphis,Arkansas
P.O. Box 1728
West Memphis,AR 72303
Trustee: Regions Bank
P.O. Box 2527
Mobile,AL 36622
Attention: Corporate Trust Department
A duplicate copy of each notice, certificate, or other communication given hereunder by either
the Issuer or the Company to the other shall also be given to the Trustee. The Issuer, the Company,
and the Trustee,may, by notice given hereunder, designate any further or different address to which
subsequent notices, certificates, or other communications shall be sent.
Section 11.2. Binding Effect. This Agreement shall inure to the benefit of and shall be binding
upon the Issuer, the Company, and their respective successors and assigns, subject, however, to the
limitations contained in Sections 8.1 and 8.2.
20
Section 11.3. Severability. In the event any provision of this Agreement shall be held invalid or
unenforceable by any court of competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 11.4. Amendments,Changes, and Modifications. Except as otherwise provided in this
Agreement or in the Indenture, subsequent to the initial issuance of Bonds and prior to their
payment in full (or provision for the payment thereof having been made in accordance with the
provisions of the Indenture), this Agreement may not be effectively amended, changed, modified,
altered, or terminated without the concurring written consent of the Trustee, given in the manner
and subject to the approval of owners of the Bonds as provided in Section 10.08 of the Indenture.
Section 11.5. Priority of Agreement. This Agreement (as it may be amended or supplemented
pursuant to the provisions hereof) and the estate of the Company hereunder are and shall continue to
be superior and prior to the Indenture (as it may be amended or supplemented).
Section 11.6. Execution Counterparts. This Agreement may be executed in counterparts, each
of which shall be an original and all of which shall constitute one and the same instrument.
Section 11.7. Captions. The captions or headings of this Agreement are for convenience only
and in no way define, limit, or describe the scope or intent of any provisions of this Agreement.
Section 11.8. Security Agreement; Recording and Filing.
(a) This Agreement is also a security agreement under the Uniform Commercial Code of the
State, and it is contemplated by the parties that a security interest (1) in the rentals and other money
due from the Company to the Issuer hereunder and (2) certain other interests of the Issuer, will be
granted to the Trustee pursuant to the Indenture.
(b) This Agreement or a memorandum thereof and the Indenture may be recorded in the Office
of the Circuit Clerk and Ex-Officio Recorder of Crittenden County, Arkansas, or in such other
office as may at the time be provided by law as the proper place for the recordation thereof.
Section 11.9. Law Governing Construction of Agreement. This Agreement shall be governed
by, and construed in accordance with,the laws of the State of Arkansas.
[The balance of this page left blank intentionally.]
21
IN WITNESS WHEREOF, the parties hereto have executed these presents as of the day and
year first above written.
CITY OF WEST MEMPHIS, ARKANSAS
By:
William H. Johnson, Mayor
ATTEST:
Phillip Para, City Clerk
Signature Pages of the Lease Agreement
BASF CORPORATION
By:
ATTEST:
Signature Pages of the Lease Agreement
ACKNOWLEDGMENT
STATE OF ARKANSAS )
) ss
COUNTY OF CRITTENDEN )
On this day of December, 2014, before me, a Notary Public duly commissioned, qualified
and acting, within and for the County and State aforesaid, appeared in person the within named
William H. Johnson and Phillip Para, Mayor and City Clerk, respectively, of the City of West
Memphis, Arkansas, a county of the State of Arkansas, to me personally known, who stated that
they were duly authorized in their respective capacities to execute the foregoing instrument for and
in the name of the County, and further stated and acknowledged that they had signed, executed, and
delivered the foregoing instrument for the consideration, uses, and purposes therein mentioned and
set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on the date first
above written.
Notary Public
My commission expires:
Acknowledgment Pages of the Lease Agreement
ACKNOWLEDGMENT
STATE OF NEW JERSEY )
) ss
COUNTY OF MORRIS )
On this day of December, 2014, before me, a Notary Public duly commissioned, qualified
and acting, within and for the County and State aforesaid, appeared in person the within named
and , and , respectively, of BASF Corporation,
a corporation, to me personally known, who stated that they were duly authorized in
their respective capacities to execute the foregoing instrument for and in the name and behalf of the
company, and further stated and acknowledged that they had so signed, executed, and delivered the
foregoing instrument for the consideration,uses,and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on the date first
above written.
Notary Public
My commission expires:
Acknowledgment Pages of the Lease Agreement
Immo
EXHIBIT A
Project Description
A-1
EXHIBIT B
Form of Requisition Certificate
Requisition No.: Date:
Regions Bank, as Trustee:
This certificate is provided to you pursuant to Section 4.2 of the Lease Agreement, dated as
of December 1, 2014 (the "Agreement"), between the City of West Memphis, Arkansas (the
"Issuer"), and BASF Corporation (the "Company"), and in accordance with Section 4.02 of the
Trust Indenture, dated as of December 1, 2014 (the "Indenture"), between the Issuer and you, as
Trustee. Capitalized terms used in this certificate have the same meanings given such terms in
the Agreement. You are authorized to make the following described payment from the Project
Fund:
Name and Address of Payee:
Amount of Payment:
General Classification of the Expenditure:
The undersigned hereby certifies that the obligations stated above and the amount thereof
have been expended or are owing for a proper expense of, or pertaining to, the Project, and that
each item thereof is a proper charge against the Project Fund and has not been included in a
former requisition, and that the undersigned person is authorized to deliver this Requisition
Certificate on behalf of the Company pursuant to the Agreement and the Indenture. The
undersigned further certifies as follows:
(i) that all property to be acquired with the proceeds of the disbursement will be owned by
the Issuer;
(ii) that such obligation has been properly incurred, is a proper charge against the Project
Fund, is a proper cost of the Project as defined in the Act, and has not been the basis of any
previous withdrawal;
(iii) that the undersigned has no written notice of any mechanics', materialmen's, or other
liens or rights to liens or other obligations (other than those being contested in good faith) which
should be satisfied or discharged before payment of such obligation is made;
(iv) that such payment does not include any amount which is then entitled to be retained
under any holdbacks or retainages provided for in any agreement; and
(v) that there exists no event of default under the Agreement or any event which, with notice
or the passage of time or both, would result in any event of default under the Agreement;
B-1
Attached hereto is a bill or statement of account for such obligation and, upon request of the
Trustee, invoices or other documentation in connection herewith will be provided.
BASF Corporation
By:
Name/Title:
B-2
As presented to the West Memphis City Council
11/20/2014
PAYMENT IN LIEU OF TAXES AGREEMENT
City of West Memphis, Arkansas Date: December 22, 2014
P.O. Box 1728
West Memphis, AR 72303
Attention: City Council and Mayor
Re: $30,000,000 West Memphis, Arkansas Industrial Development Revenue Bonds
(BASF Corporation Project), Series 2014
Ladies and Gentlemen:
The City of West Memphis (the "City")proposes to issue the Bonds identified above under the
provisions of the Municipalities and Counties Industrial Development Revenue Bond Law, Ark.
Code Ann. §§ 14-164-201 et seq. (the "Act") for the purpose of financing a substantial industrial
project consisting of the acquisition and installation of machinery, equipment, and other personal
property, all located at 100 Bridgeport Cove, West Memphis, Arkansas 72301, within the West
Memphis School District (the "Project"). The Project will be owned by the City and leased to
BASF Corporation (the "Company") pursuant to a Lease Agreement (the "Lease") for a period
of approximately 20 years for rentals sufficient to pay debt service on the Bonds. The Company
will use the bond proceeds to acquire and install such equipment and other personal property for
purposes of its existing operations for the manufacture of water treatment and specialty monomer
products.
The City issued its Industrial Development Revenue Bonds (CPS Chemical Project), Series
1982, Series 1983, and Series 1984 (collectively, the "Prior Bonds") under the provisions of the Act
for the purpose of financing a substantial industrial project consisting of the acquisition of land,
construction of buildings, and acquisition and installation of equipment, all located at 100
Bridgeport Cove, West Memphis, Arkansas 72301, within the West Memphis School District
(the "Prior Project"). The Prior Project is leased by the City to the Company pursuant to a
separate Lease Agreement. The City entered into a Payment in Lieu of Taxes Agreement with
respect to the Prior Project (the "Prior PILOT Agreement"). Nothing in this Agreement shall
affect the Prior PILOT Agreement.
Article V of the Lease provides that the Company is obligated to pay all taxes and
assessments levied and assessed on the Project during the term of the Lease dated as of
December 1, 2014, (the "Lease"). The Company is informed and understands that,
notwithstanding the provision of Article V of the Lease, under Article 16, Section 5 of the
Constitution of the State of Arkansas, as interpreted by the Arkansas Supreme Court in Wayland v.
Snapp, 233 Ark. 57, 334 S.W. 2d 633 (1960), and Pulaski County v. Jacuzzi Bros. Div., 332 Ark.
91, 964 S.W.2d 788 (1998), and Ark. Code Ann. §§ 14-164-701 et seq., the Project will be exempt
from ad valorem taxes because it is owned by the City and used for a public purpose within the
meaning of the applicable Constitutional and statutory provisions affording the exemption.
Thus, the Company understands that it, as Lessee of the Project owned by the City, will, in
fact, pay no ad valorem taxes on the Project property under the provisions of Article V of the
1
BASF Corporation
PILOT Agreement
Page 2
Lease. The City has indicated a reluctance to lose all tax revenues which would otherwise be
received by it if the property involved was privately owned.
Therefore, to induce the City to proceed with the issuance of the Bonds for the purpose
indicated, which will inure to the benefit of the Company, and for other valuable consideration,
the receipt of which is hereby acknowledged, the Company agrees with the City as follows:
1. In lieu of ad valorem taxes, the Company will pay to the City an annual sum equal to 35%
of the amount which would be payable as ad valorem taxes that would have to be paid on the
Project to the State of Arkansas, Crittenden County, West Memphis School District, and/or other
political subdivisions of the State of Arkansas (the "taxing authorities") if the Project were not
exempt from ad valorem taxes under the provisions of Article 16, Section 5 of the Constitution
of the State of Arkansas, as interpreted by the Supreme Court of the State of Arkansas in
Wayland v. Snapp, supra, and Pulaski County v. Jacuzzi Bros. Div., supra, and Ark. Code Ann.
§§ 14-164-701 et seq. Payments for each calendar year are due not later than the date regular ad
valorem taxes are due (currently October 15); provided, however, that all payments accrued
through the date of termination of the Lease shall be due no later than the date of termination of
this agreement pursuant to paragraph 6. Payments not paid when due shall bear interest at 5%per
annum until paid.
2. The payments to be made pursuant to paragraph 1 are intended to be in lieu of all ad
valorem taxes that would have to be paid on the Project to the taxing authorities if the Project
were not exempt from ad valorem taxes under the provisions of Article 16, Section 5 of the
Constitution of the State of Arkansas, as interpreted by the Supreme Court of the State of
Arkansas in Wayland v. Snapp, supra, and Pulaski County v. Jacuzzi Bros. Div., supra, and Ark.
Code Ann. §§ 14-164-701 et seq., but are not intended to be in lieu of(i) any licenses, occupation
or privilege tax, or fee imposed upon the Company for or with respect to its right to carry on its
business in the State of Arkansas, (ii) any special benefit or local improvement tax or
assessment, or (iii) fees or charges for utility services rendered, such as for water or sewer
services.
3. Representatives of the Company will meet annually with the Assessor of Crittenden
County and determine the assessed valuation of the property comprising the Project. The
determination shall be made by mutual agreement if possible, and if not shall be made by the
Assessor as though the Project were privately owned. The amount to be paid each year shall be
determined by applying the millage that would be applicable to the Project for that year if the
Project were privately owned. The Company shall be entitled to any refund occasioned by
overpayment or a reduction in millage which requires a refund by the taxing authorities.
Moreover, the Company shall have the right to appeal any and all tax assessments.
4. The City agrees to distribute each payment under paragraph 1 among the taxing
authorities in the proportion that the millage collected bears to the total millage collected by all
during the year taxes would have been levied.
5. The City and the Company agree to cooperate in sustaining the enforceability of this
Agreement. However, if by reason of a change in the Constitution of the State of Arkansas, a
2
BASF Corporation
PILOT Agreement
Page 3
change by the Supreme Court of the State of Arkansas in its interpretation of the Constitution, a
change by the General Assembly of the State of Arkansas, or otherwise the Company is required
to pay any tax for which the payments specified in paragraph 1 are intended to be in lieu, the
Company may deduct the aggregate of any such payments made by it from any amount herein
agreed to be paid under paragraph 1. Furthermore, inasmuch as the payments in paragraph 1
herein agreed to be made are intended to be in lieu of taxes, it is agreed that said payments shall
not as to any year be in an amount greater than would otherwise be payable for such year in ad
valorem taxes, in the aggregate, on account of its ownership of the Project.
6. The agreement herein made by the Company shall terminate and be of no further force
and effect from and after the date that the Lease shall terminate for any purpose other than a
default on the part of the Company. If such termination shall be at a point constituting a portion
of a year, the Company shall pay for the year in which termination occurred that portion of the
specified annual payment that the number of days in such year that the Project was exempt prior
to the terminations bears to 365 days (366 days in a leap year).
7. This agreement shall be binding upon the successors and assigns of the Company, but no
assignment shall be effective to relieve the Company of any of its obligations hereunder unless
expressly authorized and approved in writing by the City.
When executed, this instrument shall constitute a valid and binding contract between the
Company and the City.
Very truly yours,
BASF CORPORATION
By:
[Name/Title]
ACCEPTED:
WEST MEMPHIS, ARKANSAS
By:
William H. Johnson, Mayor
3
As presented to the West Memphis City Council
11/20/2014
TRUST INDENTURE
between
CITY OF WEST MEMPHIS, ARKANSAS
and
REGIONS BANK, as Trustee
$30,000,000
City of West Memphis, Arkansas
Taxable Industrial Development Revenue Bonds
(BASF Corporation Project), Series 2014
Dated as of December 1, 2014
Prepared by:
Rose Law Firm
a Professional Association
120 East Fourth Street
Little Rock, Arkansas 72201-2893
Attention: M. Jane Dickey
Bond Counsel
TABLE OF CONTENTS*
RECITALS
ARTICLE I. DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions
Section 1.02. Rules of Interpretation
ARTICLE II. AUTHORIZATION, EXECUTION, AUTHENTICATION, REGISTRATION,
AND DELIVERY OF BONDS
Section 2.01. Authorization of Bonds; Limitation
Section 2.02. Bonds Special Obligations
Section 2.03. Details of Bonds
Section 2.04. Execution of Bonds
Section 2.05. Authentication of Bonds
Section 2.06. Form of Bonds
Section 2.07. Delivery of Bonds
Section 2.08. Registration of Transfer and Exchange of Bonds; Persons Treated as
Bondholders
Section 2.09. Temporary Bonds
Section 2.10. Mutilated, Lost, or Destroyed Bonds
Section 2.11. Cancellation and Disposition of Bonds
ARTICLE III. REDEMPTION OF BONDS
Section 3.01. Redemption Dates and Prices
Section 3.02. Optional Redemption of Bonds
Section 3.03. Extraordinary Redemption from Insurance and Condemnation
Proceeds
Section 3.04. Selection of Bonds for Redemption
Section 3.05. Notice of Redemption
Section 3.06. Purchase at Any Time
ARTICLE IV. FUNDS AND ACCOUNTS
Section 4.01. Creation of Funds
Section 4.02. Project Fund
Section 4.03. Debt Service Fund
Section 4.04. Revenues to Be Held for All Bondholders, With Certain Exceptions
Section 4.05. Repayment to the Company from Amounts Remaining in Any Funds
Section 4.06. Disposition of Unclaimed Funds
Section 4.07. Additional Funds and Accounts
* The Table of Contents shall be solely for convenience of reference and shall neither constitute a
part of this Indenture nor affect its meaning, construction or effect.
ARTICLE V. INVESTMENT OR DEPOSIT OF FUNDS
Section 5.01. Deposits and Security Therefor
Section 5.02. Investment or Deposit of Funds
Section 5.03. Valuation of Funds
ARTICLE VI. COVENANTS AND AGREEMENTS OF THE ISSUER
Section 6.01. Covenants and Agreements of the Issuer
Section 6.02. Observance and Performance of Covenants, Agreements, Authority
and Actions
Section 6.03. Enforcement of Issuer's Obligations
ARTICLE VII. EVENTS OF DEFAULT AND REMEDIES
Section 7.01. Events of Default Defined
Section 7.02. Remedies Upon Default
Section 7.03. Additional Remedies
Section 7.04. Marshaling of Assets
Section 7.05. Trustee May File Proofs of Claim
Section 7.06. Possession of Bonds Not Required
Section 7.07. Notice and Opportunity to Cure Certain Defaults
Section 7.08. Priority of Payment Following Event of Default
Section 7.09. Bondholders May Direct Proceedings
Section 7.10. Limitations on Rights of Bondholders
Section 7.11. Unconditional Right of Bondholder to Receive Payment
Section 7.12. Restoration of Rights and Remedies
Section 7.13. Rights and Remedies Cumulative
Section 7.14. Delay or Omission Not Waiver
Section 7.15. Waiver of Defaults
Section 7.16. Notice of Events of Default
Section 7.17. Right to Cure
ARTICLE VIII. THE TRUSTEE
Section 8.01. Duties and Responsibilities of the Trustee
Section 8.02. Certain Rights of the Trustee
Section 8.03. Trustee Not Responsible for Recitals
Section 8.04. Trustee May Own Bonds
Section 8.05. Compensation and Expenses of the Trustee
Section 8.06. Qualifications of Trustee
Section 8.07. Resignation or Removal of Trustee; Appointment of Successor Trustee
Section 8.08. Acceptance of Appointment by Successor Trustee
Section 8.09. Merger, Succession, or Consolidation of Trustee
Section 8.10. Notices to Bondholders; Waiver
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ARTICLE IX. DISCHARGE AND DEFEASANCE
Section 9.01. Discharge
Section 9.02. Defeasance; Deposit of Funds for Payment of Bonds
Section 9.03. Notice of Defeasance
ARTICLE X. SUPPLEMENTAL INDENTURES AND AMENDMENTS
Section 10.01. Supplemental Indentures Without Bondholders' Consent
Section 10.02. Supplemental Indentures Requiring Bondholders' Consent
Section 10.03. Consents of Bondholders and Opinions
Section 10.04. Exclusion of Certain Bonds
Section 10.05. Notation on Bonds
Section 10.06. Delivery of Counsel's Opinion with Respect to Supplemental
Indentures
Section 10.07. Amendments to Lease Documents Not Requiring Bondholders'
Consent
Section 10.08. Amendments to Lease Documents Requiring Bondholders' Consent
Section 10.09. Delivery of Opinion of Counsel with Respect to Amendments
Section 10.11. Consent to Supplemental Indentures and Amendments
Section 10.11. Effect of Supplemental Indentures
ARTICLE XI. MISCELLANEOUS PROVISIONS
Section 11.01. Limitation of Rights
Section 11.02. Severability
Section 11.03. Notices
Section 11.04. Holidays
Section 11.05. Counterparts
Section 11.06. Applicable Law
Section 11.07. Limitation of Liability of Officials of the Issuer
Section 11.08. Successors and Assigns
Section 11.09. Form of Documents Delivered to Trustee
Section 11.10. Consent of Holders
APPENDIX A FORM OF BOND A-1
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TRUST INDENTURE
THIS TRUST INDENTURE (the "Indenture") dated as of December 1, 2014, is made by and
between the City of West Memphis, Arkansas (the "Issuer"), a city organized and existing under
the laws of the State of Arkansas, and Regions Bank (the "Trustee"), a state banking corporation
duly organized and existing under the laws of the State of Alabama, and duly authorized to
accept and administer trusts of the character hereinafter set forth:
WITNESSETH:
WHEREAS,the Issuer is authorized by the Municipalities and Counties Industrial Development
Revenue Bond Law, as amended, Ark. Code Ann. §§ 14-164-201 to -224 (the "Act"), to acquire
lands, construct and equip industrial buildings, improvements, and facilities, incur other costs and
expenses, and make other expenditures incidental to and for the securing and developing of
industry; and
WHEREAS, the Issuer is authorized by the Act to issue industrial development revenue bonds
payable from and secured by revenues derived from the industrial project so acquired and
constructed; and
WHEREAS, the necessary arrangements have been made with BASF Corporation, a Delaware
corporation (the "Company"), for a substantial industrial project for the manufacture of water
treatment and specialty monomer products, consisting of the acquisition and installation of
machinery, equipment, and other personal property, located at 100 Bridgeport Cove, West
Memphis, Arkansas 72301, and for the Issuer to lease such facilities to the Company pursuant to
the terms of a Lease Agreement dated as of December 1, 2014 (the "Agreement"), wherein the
Issuer is lessor and the Company is lessee; and
WHEREAS,permanent financing of the costs the facilities described above, necessary costs and
expenditures incidental thereto, and the costs of the issuance of bonds is being furnished by the
Issuer issuing bonds in the aggregate principal amount of$30,000,000 to be designated Taxable
Industrial Development Revenue Bonds (BASF Corporation Project), Series 2014 (the "Bonds");
and
WHEREAS, the execution and delivery of this Indenture and the issuance of the Bonds have
been in all respects duly and validly authorized by ordinance of the City Council of the Issuer,
pursuant to the Act; and
WHEREAS, the Issuer has determined that, in the issuance and sale of the Bonds, it will be
acting to further the public purposes of the Act; and
WHEREAS, all things necessary to make the Bonds, when issued, executed, and delivered
by the Issuer and authenticated by the Trustee, to the extent required pursuant to this Indenture,
the valid, binding, and legal special obligations of the Issuer, and to constitute this Indenture as a
valid assignment and pledge of the revenues herein pledged to the payment of the principal of
and interest on the Bonds and a valid assignment and pledge of certain rights of the Issuer has
been done and performed, and the creation, execution, and delivery of this Indenture, and the
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execution, issuance, and delivery of the Bonds, subject to the terms hereof, have in all respects
been duly authorized;
NOW, THEREFORE, THIS INDENTURE WITNESSETH, that to secure the payment of
principal of and interest on the Bonds according to their true intent and meaning, and all other
amounts due from time to time under this Indenture, including those due to the Trustee, to secure
the performance and observance of all of the covenants, agreements, obligations, and conditions
contained in the Bonds and in this Indenture, and to declare the terms and conditions upon and
subject to which the Bonds are and are intended to be issued, held, secured, and enforced and in
consideration of the premises and the acceptance by the Trustee of the trusts created herein and
of the purchase and acceptance of the Bonds by the Bondholders and for other good and valuable
consideration, the receipt of which is acknowledged, the Issuer has executed and delivered this
Indenture and absolutely and irrevocably grants, bargains, sells, conveys, delivers, pledges, and
assigns to the Trustee and to its successors in trust, on the basis set forth herein, and its and their
assigns, all right, title, and interest of the Issuer in and to the Trust Estate as defined in Article I.
TO HAVE AND TO HOLD unto the Trustee and its successors in trust and its and their
assigns forever;
BUT IN TRUST,NEVERTHELESS, and subject to the provisions hereof,
(a) for the equal and proportionate benefit, security, and protection of all Bonds,
(b) for the enforcement of the payment of the principal of and interest on the Bonds, and
all other amounts due from time to time under this Indenture, including those due to the
Trustee, when payable, according to the true intent and meaning thereof and of this
Indenture, and
(c) to secure the performance and observance of and compliance with the covenants,
agreements, obligations, terms, and conditions of this Indenture and the Lease Documents,
in each case, without preference, priority, or distinction, as to lien or otherwise except as
provided herein, of any one Bond over any other by reason of designation, number, date of the
Bonds, or of authorization, issuance, sale, execution, authentication, delivery, or maturity
thereof, or otherwise, so that each Bond and all Bonds shall have the same right, lien, and
privilege under this Indenture and shall be secured equally and proportionately by this Indenture,
it being intended that the lien and security of this Indenture shall take effect from the date hereof,
without regard to the date of the actual issue, sale, or disposition of the Bonds, as though upon
that date all of the Bonds were actually issued, sold, and delivered to purchasers for value;
provided, however, that, upon satisfaction of and in accordance with the provisions of Article IX,
the rights assigned hereby shall cease, determine, and be void to the extent described therein;
otherwise, such rights shall be and remain in full force and effect;
IT IS DECLARED that all Bonds issued under and secured by this Indenture are to be issued,
authenticated, and delivered, and that all Revenues assigned or pledged hereby are to be dealt
with and disposed of under, upon, and subject to, the terms, conditions, stipulations, covenants,
agreements, obligations, trusts, uses, and purposes provided in this Indenture; and the Issuer has
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agreed and covenanted, and agrees and covenants with the Trustee and with each and all
Bondholders, as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATIONS
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this
Article shall, for all purposes of this Indenture and of any indenture supplemental hereto, have
the meanings herein specified:
"Act" means the Municipalities and Counties Industrial Development Revenue Bond Law, as
amended, Ark. Code Ann. §§ 14-164-201 to -224.
"Affiliate" of any specified entity means any other entity directly or indirectly controlling or
controlled by or under direct or indirect common control with such specified entity and "control,"
when used with respect to any specified entity, means the power to direct the management and
policies of such entity, directly or indirectly, whether through the ownership of voting securities, by
contract, or otherwise; and the terms "controlling" and "controlled" have meanings correlative to
the foregoing.
"Agreement" means the Lease Agreement, dated as of December 1, 2014,wherein the Issuer is
lessor and the Company is lessee, as further amended or supplemented from time to time.
"Authorized Company Representative" means the Authorized Company Representative as
defined in the Agreement.
"Authorized Denomination" means $5,000 and any multiple thereof.
"Authorized Issuer Representative" means the Authorized Issuer Representative as defined in
the Agreement.
"Authorizing Ordinance" means the authorizing action of the City Council of the Issuer.
"Bankruptcy Law" means Title 11 of the United States Code, as it is amended from time to
time, and any successor to or replacement of such Title and any other applicable federal or state
bankruptcy, insolvency, or other similar law.
"Basic Rent" means the amounts payable as basic rent pursuant to Section 5.3(a) of the
Agreement.
"Bond Counsel" means Rose Law Firm, a Professional Association, Little Rock, Arkansas,
or any other firm of attorneys experienced in the matters covered by the opinion selected by the
Company and not unacceptable to the Trustee.
"Bond Register" and "Bond Registrar" shall have the respective meanings specified in
Section 2.08.
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"Bonds" means the Issuer's $30,000,000 Taxable Industrial Development Revenue Bonds
(BASF Corporation Project), Series 2014.
"Bondholder" or "holder of Bonds" or "Owner of Bonds" means the Person who owns a
Bond, provided that, pursuant to Section 2.08, the Person in whose name a Bond is registered in
the Bond Register shall be regarded for all purposes as such owner.
"Business Day means a day on which banks shall remain open for business in New York.
"Company" means BASF Corporation, a corporation organized and existing under the laws
of the State of Delaware, and, to the extent permitted by the Agreement, its lawful successors
and assigns.
"Conditional Redemption" means a redemption where the Company has stated in the
redemption notice to the Trustee that (a) the redemption is conditioned upon deposit of funds or
(b) the Company has retained the right to rescind the redemption, as further described in Section
3.05.
"Counsel" means an attorney or law firm (who may be counsel for the Issuer or the
Company), acceptable to the Trustee.
"Debt Service Fund" means the trust fund so designated which is described in Section 4.03.
"Defeasance Obligations" means obligations of the type described in(a), (b), (c), or(d) of the
definition of"Eligible Investments."
"Eligible Investments" means: (a) Governmental Obligations; (b) obligations of any of the
following federal agencies which represent full faith and credit of the United States of America:
Farmers' Home Administration, General Services Administration, United States Maritime
Administration, Small Business Administration, Government National Mortgage Association,
United States' Department of Housing and Urban Development, and Federal Housing
Administration; (c) U.S. dollar denominated deposit accounts fully insured to the holder by the
Federal Deposit Insurance Corporation in commercial banks; (d) U.S. dollar denominated deposit
accounts, federal funds, and banker's acceptances with commercial banks (foreign or domestic)
which have a rating on their short term certificates of deposit on the date of purchase of"A-1" or
"A-1+" by S&P and "P-1" by Moody's and maturing no more than 360 days after the date of
purchase; (e) money market funds rated in the highest rating category of S&P or Moody's which
are monitored quarterly; (f) pre-refunded municipal obligations, which obligations shall be limited
to bonds or other obligations of any state of the United States or of any agency, instrumentality, or
local governmental unit of any such state (1) which are not callable at the option of the obligor
prior to maturity or as to which irrevocable notice has been given by the obligor to call on the date
specified in the notice; (2) which are fully secured as to principal and interest by a fund consisting
only of cash or obligations described in paragraph (a) above, which fund may be applied only to
the payment of such principal of and interest on such bonds or other obligations on the maturity
date or dates thereof or the specified redemption date or dates pursuant to such irrevocable
instructions, as appropriate; (3) which fund is sufficient, as verified by an independent accountant,
to pay principal of and interest on the bonds or other obligations described in this paragraph on the
maturity date or dates thereof or the redemption date or dates specified in the irrevocable
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instructions referred to in subclause (1) of this paragraph, as appropriated; and (4) which are rated,
based on the escrow, in the highest rating category of S&P and Moody's or any successors thereto;
and (g) U.S. dollar denominated certificates of deposit in commercial banks properly secured at all
times by collateral security described in(a) and (b) above.
"Event of Bankruptcy" means the filing of a petition in bankruptcy (or other commencement
of a bankruptcy or similar proceedings) by or against the Issuer or the Company, as debtor, under
Bankruptcy Law.
"Event of Default" means any of the events specified in Section 7.01 to be an Event of
Default. A "default" means any event which, with the giving of notice or the lapse of time or
both, would constitute an Event of Default.
"Funds" means the Project Fund, the Debt Service Fund, and any account within each such
Fund and any other Fund designated as such with respect to a Series.
"Governmental Obligations" means (a) noncallable, nonredeemable direct obligations of the
United States of America, (b) obligations the timely payment of the principal of and interest on
which is fully and unconditionally guaranteed by the United States of America, and (c) securities
or receipts evidencing ownership interests in obligations or specified portions (such as principal
or interest) of obligations described in (a) or(b).
"Immediate Notice" means notice transmitted by electronic means, in writing, by telecopier,
or by telephone (promptly confirmed in writing), and received by the party addressed.
"Indenture"means this Trust Indenture as amended or supplemented from time to time.
"Interest Payment Date" means (a) January 1 and July 1 of each year beginning July 1, 2015,
(b) for Bonds subject to redemption in whole or in part on any date, the date of such redemption,
and (c) for all Bonds any date determined by the Trustee pursuant to Section 7.08.
"Issuance Costs" means costs incurred by or on behalf of the Company in connection with
the lease of the Project by the Issuer to the Company including, without limitation, the following:
payment of financial, legal, accounting, and appraisal fees, expenses, and disbursements, the
Issuer's fees and expenses attributable to the issuance of the Bonds, the cost of printing,
engraving, and reproduction services, legal fees and expenses for Bond Counsel, Issuer's
counsel, Trustee's counsel, Purchaser's counsel, and Company's counsel relating to the issuance
of the Bonds, the initial or acceptance fee of the Trustee, and all other fees, charges, and
expenses incurred in connection with the issuance of the Bonds and the preparation and filing or
recording of this Indenture and of any document, including the Lease Documents, relating to the
issuance of the Bonds.
"Issue Date"means the date of issuance and delivery of the Bonds to the Purchaser.
"Issuer"means the City of West Memphis, Arkansas and its successors and assigns.
"Lease Documents" means the Agreement and the PILOT Agreement.
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"Lease Payments" means the amounts required to be paid by the Company as Basic Rent or
otherwise pursuant to the provisions of the Lease Documents (not including amounts required to
be paid by the Company to the Issuer or the Trustee for their reasonable fees and expenses, as
reimbursement of advances made by them, or their rights to indemnification) or all amounts
realized by the Trustee thereunder in accordance with Article VII.
"Lease"means the lease of the Project by the Issuer to the Company.
"Moody's" means Moody's Investors Service, its successors and assigns.
"Office of any Paying Agent" means the office of any Paying Agent designated in writing to
the Trustee.
"Office of the Trustee" means the designated corporate trust office or offices of the Trustee,
which office or offices at the date of acceptance by the Trustee of the duties and obligations
imposed on the Trustee by this Indenture are set out in Section 11.03.
"Officer's Certificate" of the Issuer or the Company means, respectively, a written
certificate, statement, request, direction, or order signed in the name of the Issuer by its Mayor,
City Clerk, an Authorized Issuer Representative, or such other person as may be designated and
authorized in writing to sign for the Issuer and forwarded to the Trustee, or signed in the name of
the Company by an Authorized Company Representative.
"Outstanding," in connection with Bonds means, as of the date in question, all Bonds
authenticated and delivered under this Indenture, except (a) Bonds theretofore cancelled or
delivered to the Trustee for cancellation under Section 2.11; (b) Bonds which are deemed to be
no longer Outstanding in accordance with Article IX; and (c) Bonds in substitution for which
other Bonds have been authenticated and delivered pursuant to Article II. In determining
whether the owners of a requisite aggregate principal amount of Bonds Outstanding have
concurred in any request, demand, authorization, direction, notice, consent, or waiver under the
provisions hereof, Bonds which are held by or on behalf of the Company or an Affiliate (unless
all of the Outstanding Bonds are then owned by the Company or an Affiliate) shall be
disregarded for the purpose of any such determination.
"Paying Agent" or "Co-Paying Agent" means any national banking association, state bank,
bank and trust company, or trust company appointed by the Company and meeting the
qualifications of, and subject to the obligations of, the Trustee in Article VIII. Initially, the
Trustee shall be the Paying Agent.
"Person" or "person" means an individual, corporation, firm, association, partnership, limited
liability company, trust, or other legal entity or group of entities, including a governmental entity
or any agency or political subdivision thereof.
"PILOT Agreement" means the Agreement for Payments in Lieu of Taxes, dated the Issue
Date,between the Company and the Issuer.
"Project"means the Project, as defined in the Agreement.
6
11111.
"Project Costs," "Cost of the Project," or "Costs" means all costs and items permitted to be
financed under the provisions of the Act, including but not limited to: (i) the cost of all machinery,
equipment, furnishings, and facilities necessary or incident to the equipping of the Project so that it
may be placed in operation; (ii) the cost of financing charges and interest prior to the Completion
Date and for a maximum of six months after the Completion Date; (iii) Issuance Costs; and (iv) all
direct and indirect costs of the Issuer incurred in connection with providing the Project, including
without limitation reasonable sums to reimburse the Issuer for time spent by its agents or
employees with respect to providing the Project and the financing thereof
"Project Fund" means the trust fund so designated which is described in Section 4.02.
"Record Date" means, (a) with respect to any Interest Payment Date described in subsection
(a) of that defined term, the Trustee's close of business on the 15th day of the calendar month
next preceding such Interest Payment Date, regardless of whether such day is a Business Day,
and (b)with respect to any other Interest Payment Date, a date selected by the Trustee.
"Responsible Officer," when used with respect to the Trustee, means any officer in the
corporate trust department (or any successor thereto) of the Trustee, or any other officer or
representative of the Trustee customarily performing functions similar to those performed by any
of such officers and also means, with respect to a particular corporate trust matter, any other
officer of the Trustee to whom such matter is referred because of that officer's knowledge of and
familiarity with the particular subject.
"Revenues" means (a) the Lease Payments, (b) all amounts payable to the Trustee with
respect to the principal of or interest on the Bonds (1) by the Company as required under the
Agreement and (2) upon deposit in the Debt Service Fund from the proceeds of the Bonds, and
(c) investment income with respect to any moneys held by the Trustee in the Project Fund and
the Debt Service Fund.
"S&P" means Standard & Poor's Ratings Group, a division of The McGraw-Hill
Companies, Inc., a corporation organized and existing under the laws of the State of New York,
its successors and assigns.
"State"means the State of Arkansas.
"Trust Estate" means all right, title, and interest of the Issuer in and to (a) the Project, (b) the
Lease Documents (except for Unassigned Issuer's Rights), (c) Revenues, (d) Funds, and (e) all
other property of every name and nature from time to time hereafter by delivery or by writing
mortgaged, pledged, delivered, or hypothecated as and for additional security under this
Indenture by the Issuer or by anyone on its behalf or with its written consent in favor of the
Trustee.
"Trustee" means Regions Bank and any successor trustee under this Indenture, acting in its
trust capacity.
"Unassigned Issuer's Rights"means Unassigned Issuer's Rights as defined in the Agreement.
"Purchaser" means BASF Catalyst Holding, LLC.
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Section 1.02 Rules of Interpretation. For purposes of this Indenture, except as otherwise
expressly provided or the context otherwise requires:
(a) The words "herein," "hereof," "hereunder," and other similar words refer to this Indenture
as a whole and not to any particular Article, Section, or other subdivision.
(b) The definitions in this Article are applicable whether the terms defined are used in the
singular or the plural.
(c) All accounting terms which are not defined in this Indenture have the meanings assigned
to them in accordance with then applicable generally accepted accounting principles.
(d) Any pronouns used in this Indenture include both the singular and the plural and cover
both genders.
(e) Any terms not defined in this Indenture but which are defined in the Lease Documents
have the same meaning in this Indenture as are given to them in the Lease Documents.
(f)Any terms defined elsewhere in this Indenture have the meanings attributed to them where
defined.
(g) Words referring to the redemption or calling for redemption of Bonds shall not be
deemed to refer to the payment of Bonds at their stated maturity.
(h) The captions or headings herein are for convenience only and in no way define, limit, or
describe the scope or intent, or control or affect the meaning or construction, of any provisions or
sections hereof.
(i) Any references to Section numbers are to Sections of this Indenture unless stated
otherwise.
ARTICLE II
AUTHORIZATION, EXECUTION, AUTHENTICATION, REGISTRATION, AND
DELIVERY OF BONDS
Section 2.01. Authorization of Bonds; Limitation. The Bonds are hereby authorized to be
issued as revenue bonds of the Issuer in the aggregate principal amount of $30,000,000
designated "Taxable Industrial Development Revenue Bonds (BASF Corporation Project), Series
2014."No obligations may be issued by the Issuer or the Company (a) which are senior in claim
on the Trust Estate to the Bonds or (b) which have a claim on the Trust Estate in parity with the
Bonds. The Issuer and the Company may issue obligations which are junior or subordinate in
claim on the Trust Estate to the Bonds.
Section 2.02 Bonds Special Obligations. The Bonds shall be special obligations of the
Issuer, payable solely from the Trust Estate. The Bonds shall constitute a valid claim of the
respective owners thereof against the Trust Estate, which is pledged to secure the payment of the
principal of and interest on the Bonds, and which shall be utilized for no other purpose, except as
8
expressly authorized in this Indenture. The Bonds shall not constitute general obligations of the
Issuer and under no circumstances shall the Bonds be payable from, nor shall the holders thereof
have any rightful claim to, any income, revenues, funds, or assets of the Issuer other than those
pledged hereunder as security for the payment of the Bonds.
Section 2.03 Details of Bonds. The Bonds shall be issued in Authorized Denominations,
shall be dated the Issue Date of the Bonds, shall be numbered from R-1 upward, and shall bear
interest (calculated on the basis of a 360-day year of twelve 30-day months) payable on each
Interest Payment Date for the Bonds at the rate of 5.00% per annum.
The Bonds shall mature (subject to prior redemption) on December 22, 2034.
All Bonds shall bear interest (a) from their Issue Date, if authenticated prior to the first
Interest Payment Date, or (b) otherwise from the Interest Payment Date that is, or that
immediately precedes, the date on which such Bond is authenticated (unless payment of interest
is in default, in which case such Bond shall bear interest from the date to which interest has been
paid).
If any principal of or interest on any Bond is not paid when due (whether at maturity, by
acceleration, call for redemption, or otherwise), then the overdue installments of principal and, to
the extent permitted by law, interest shall bear interest until paid at the same rate set forth in such
Bond plus liquidated damages in the amount of 2.0% of the amount in default.
Section 2.04 Execution of Bonds. The Bonds shall be signed by the manual or facsimile
signature of the Mayor of the Issuer and attested by the manual or facsimile signature of the City
Clerk of the Issuer. The Bonds shall bear the seal of the Issuer or a fCaacsimile thereof will be
affixed to or imprinted on the Bonds. In case any officer whose signature or a facsimile of whose
signature shall appear on any Bond shall cease to be such officer before the delivery of such
Bond, such signature or facsimile shall nevertheless be valid and sufficient for all purposes as if
such officer had remained in office until such delivery.
Section 2.05. Authentication of Bonds. The Bonds shall bear a certificate of authentication,
substantially in the form set forth in Appendix A, duly executed by the Trustee. The Trustee shall
authenticate each Bond with the manual signature of a Responsible Officer of the Trustee, but it
shall not be necessary for the same Responsible Officer to authenticate all of the Bonds of a
Series. Only such authenticated Bonds shall be entitled to any right or benefit under this
Indenture. Such certificate on any Bond issued hereunder shall be conclusive evidence that the
Bond has been duly issued and is secured by the provisions hereof.
Section 2.06 Form of Bonds. The Bonds shall be substantially in the form set forth in
Appendix A with such appropriate variations, legends, omissions, and insertions as permitted or
required by this Indenture.
Section 2.07. Delivery of Bonds. The Trustee shall authenticate and deliver the Bonds when
there have been filed with it the following:
(a) A copy certified by the City Clerk of the Issuer of the Authorizing Ordinance
authorizing (1) the execution and delivery of the Agreement and the assignment of the
9
Agreement, (2) the execution and delivery of this Indenture, and (3) the issuance, sale,
execution, and delivery of the Bonds;
(b) An original executed counterpart of this Indenture;
(c) An original executed counterpart of the Agreement;
(d) An opinion or opinions of Bond Counsel, addressed to the Issuer and the Trustee, to
the effect that this Indenture and the Bonds have been validly authorized, are binding and
enforceable against the Issuer, subject to bankruptcy and equitable principles, that the
issuance of the Bonds has been duly authorized, and that interest on the Bonds is exempt
from income taxation by the State of Arkansas;
(e) A request and authorization of the Issuer, signed by its Mayor, to the Trustee to
authenticate and deliver the Bonds to such person or persons named therein upon payment
for the account of the Issuer of a specified sum plus accrued interest to the date of delivery;
and
(f) An opinion of Counsel to the Company, addressed to the Issuer, the Trustee, and Bond
Counsel, to the effect that the Lease Documents have been duly authorized, executed, and
delivered by the Company and are enforceable against the Company, subject to bankruptcy
and equitable principles.
Simultaneously with the delivery of the Bonds, the Trustee shall apply, or arrange for the
application of, the proceeds thereof in accordance with an Officer's Certificate of the Issuer, and
dated the Issue Date.
Section 2.08. Registration of Transfer and Exchange of Bonds; Persons Treated as
Bondholders. The Trustee shall act as bond registrar(the "Bond Registrar") and in such capacity
shall maintain a bond register (the "Bond Register") for the registration and transfer of Bonds.
Upon surrender of any Bonds at the Office of the Trustee, together with an assignment duly
executed by the current Bondholder of such Bonds or such Bondholder's duly authorized
attorney or legal representative in such form as shall be satisfactory to the Trustee, such Bonds
may, at the option of the Bondholder, be exchanged for an equal aggregate principal amount of
Bonds of the same Series and maturity, of Authorized Denominations, and bearing interest at the
same rate and in the same form as the Bonds surrendered for exchange, registered in the name or
names requested by the assignee of the then Bondholder; provided the Trustee is not required to
exchange or register the transfer of Bonds after the giving of notice calling such Bond for
redemption in whole or in part. The Issuer shall execute and the Trustee shall authenticate any
Bonds whose execution and authentication is necessary to provide for exchange of Bonds
pursuant to this Section and the Issuer may rely on a representation from the Trustee that such
execution is required.
Any exchange or registration of transfer of Bonds shall be at the expense of the Company
except that the Trustee may make a charge to any Bondholder requesting such exchange or
registration in the amount of any tax or other governmental charge required to be paid with
respect thereto but will not impose any other charge.
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Prior to due presentment for registration of transfer of any Bond, the Trustee shall treat the
Person shown on the Bond Register as owning a Bond as the Bondholder and the Person
exclusively entitled to payment of principal thereof and interest thereon and, except as otherwise
expressly provided herein, the exercise of all other rights and powers of the owner thereof, and
neither the Issuer, the Company, the Trustee, nor any agent of the Issuer, the Company, or the
Trustee shall be affected by notice to the contrary.
Section 2.09. Temporary Bonds. Prior to the preparation of definitive Bonds of a Series the
Issuer may issue temporary Bonds in registered form and in such denominations as the Issuer
may determine but otherwise in substantially the form provided for definitive Bonds of such
Series with appropriate variations, omissions, and insertions. The Issuer shall promptly prepare,
execute, and deliver to the Trustee before the first Interest Payment Date for such Bonds,
definitive Bonds and, upon presentation and surrender of Bonds in temporary form, the Trustee
shall authenticate and deliver in exchange therefor definitive Bonds of the same Series and
maturity for the same aggregate principal amount. Until exchanged for definitive Bonds, Bonds
in temporary form shall be entitled to the lien and benefit of this Indenture.
Section 2.10. Mutilated, Lost, or Destroyed Bonds. If any Bond has been mutilated, lost, or
destroyed, the Issuer shall execute, and the Trustee shall authenticate and deliver to the
Bondholder, a new Bond of like date and tenor in exchange and substitution for, and upon
cancellation of, such mutilated Bond or in lieu of and in substitution for such lost or destroyed
Bond but only if the Bondholder has paid the reasonable expenses and charges of the Issuer and
the Trustee in connection therewith and, in the case of a lost or destroyed Bond, (a) filed with the
Trustee evidence satisfactory to the Trustee that such Bond was lost or destroyed and (b)
furnished to the Trustee, the Issuer, and the Company indemnity satisfactory to each. If any such
Bond has matured or been called for redemption and is payable, instead of issuing a new Bond
the Trustee may pay the same without issuing a replacement Bond.
If, after the delivery of such replacement Bond, the original Bond in lieu of which such
replacement Bond was issued is presented for payment or registration, the Trustee shall seek to
recover such replacement Bond from the person to whom it was delivered or any person taking
therefrom and shall be entitled to recover from the security or indemnity provided therefor to the
extent of any loss, damage, cost, or expense incurred by the Trustee, the Company or the Issuer
in connection therewith.
Section 2.11. Cancellation and Disposition of Bonds. The Issuer or the Company may
deliver Bonds to the Trustee for cancellation at any time and for any reason and the Trustee is
hereby authorized to cancel such Bonds. All Bonds that have been paid (whether at maturity or
by acceleration, upon redemption, or pursuant to Section 3.06) or delivered to the Trustee for
cancellation shall not be reissued. Unless otherwise directed by the Issuer or the Company, the
Trustee shall treat such Bonds in accordance with its document retention policies or as may be
directed by state law.
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ARTICLE III
REDEMPTION OF BONDS
Section 3.01. Redemption Dates and Prices. The Bonds may not be called for redemption
by the Issuer except as provided in this Article.
Section 3.02. Optional Redemption of Bonds. The Bonds are subject to redemption by the
Issuer at the direction of the Company in whole or in part at any time from any moneys that may
be available for such purpose, at a redemption price equal to 100% of the principal amount of
Bonds to be redeemed)plus interest accrued to the redemption date.
Section 3.03. Extraordinary Redemption from Insurance and Condemnation Proceeds.
The Bonds are subject to redemption in whole or in part (and if in part in Authorized
Denominations; provided that no Bond may be redeemed in part if the principal amount to be
Outstanding following such partial redemption is not an Authorized Denomination) from any net
insurance or condemnation proceeds deposited with the Trustee for the purpose of redemption
pursuant to Sections 7.2 and 7.5 of the Agreement. Such redemption shall occur on any Business
Day selected by the Company for which adequate notice pursuant to Section 3.05 may be given,
at a redemption price equal to 100% of the aggregate principal amount of the Bonds to be
redeemed plus accrued interest to the redemption date.
Section 3.04. Selection of Bonds for Redemption. If less than all of the Bonds are called for
redemption, they shall be redeemed in inverse order of maturity, and by lot within any maturity,
subject to selection by the Trustee as provided below. The portion of any Bond to be redeemed
shall be an Authorized Denomination or any multiple thereof and in selecting Bonds for
redemption, each Bond shall be considered as representing that number of Bonds which is
obtained by dividing the principal amount of such Bond by the minimum Authorized
Denomination. If a portion of a Bond shall be called for redemption, a new Bond in principal
amount equal to the unredeemed portion thereof shall be issued to the Bondholder upon the
surrender thereof. If for any reason the principal amount of Bonds called for redemption would
result in a redemption of Bonds less than the Authorized Denomination, the Trustee,to the extent
possible within the principal amount of Bonds to be redeemed, is hereby authorized to adjust the
selection of Bonds for such purpose in order to minimize any such redemption.
Section 3.05 Notice of Redemption.
(a) When Bonds (or portions thereof) are to be redeemed pursuant to Section 3.02, 3.03, or
3.04, the Company shall give or cause to be given notice of the redemption of the Bonds to the
Trustee no later than 45 days prior to the redemption date or such shorter time as may be
acceptable to the Trustee. In the case of an optional redemption under Section 3.02, the notice
may state (1) that it is conditioned upon the deposit of moneys, in an amount equal to the amount
necessary to effect the redemption, with the Trustee no later than the redemption date or (2) that
the Company retains the right to rescind such notice on or prior to the scheduled redemption date
(in either case, a "Conditional Redemption"), and such notice and optional redemption shall be
of no effect if such moneys are not so deposited or if the notice is rescinded as described in
subsection (d) of this Section. The Trustee, at the expense of the Company, shall send notice of
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any redemption, identifying the Bonds to be redeemed, the redemption date, the method and
place of payment, and the information required by subsection (b) of this Section, by first class
mail to each holder of a Bond called for redemption to the holder's address listed on the Bond
Register. Such notice shall be sent by the Trustee by first class mail not less than 30 days prior to
the scheduled redemption date. If notice is given as stated in this paragraph (a), failure of any
Bondholder to receive such notice, or any defect in the notice, shall not affect the redemption or
the validity of the proceedings for the redemption of the Bonds.
(b) On or before the date fixed for redemption, subject to the provisions of subsections (a)
and (d) of this Section, moneys shall be deposited with the Trustee to pay the principal of and
interest accrued to the redemption date on the Bonds called for redemption. Upon the deposit of
such moneys, unless the Company has given notice of rescission as described in subsection(d) of
this Section, the Bonds shall cease to bear interest on the redemption date and shall no longer be
entitled to the benefits of this Indenture (other than for payment and transfer and exchange) and
shall no longer be considered Outstanding.
(d) Any Conditional Redemption may be rescinded in whole or in part at any time prior to
the redemption date if the Company delivers an Officer's Certificate to the Trustee instructing
the Trustee to rescind the redemption notice. The Trustee shall give prompt notice of such
rescission to the affected Bondholders. Any Bonds subject to Conditional Redemption where
redemption has been rescinded shall remain Outstanding, and the rescission shall not constitute
an Event of Default. Further, in the case of a Conditional Redemption, the failure of the Issuer or
the Company to make funds available in part or in whole on or before the redemption date shall
not constitute an Event of Default, and the Trustee shall give Immediate Notice to the affected
Bondholders that the redemption did not occur and that the Bonds called for redemption and not
so paid remain Outstanding.
Section 3.06. Purchase at Any Time. The Trustee, upon the written request of the Company,
shall purchase Bonds as specified by the Company in the open market at a price not exceeding a
price set by Company. Such purchase of Bonds shall be made with funds provided by the
Company and not with any portion of the Trust Estate or any Defeasance Obligations. Upon
purchase by the Trustee, such Bonds shall be treated as delivered for cancellation pursuant to
Section 2.11. Nothing in this Indenture shall prevent the Company from purchasing Bonds on the
open market without the involvement of the Trustee and delivering such Bonds to the Trustee for
cancellation pursuant to Section 2.11. The principal amount of Bonds to be redeemed by optional
redemption under this Indenture may be reduced by the principal amount of Bonds purchased by
the Company or the Issuer, at the request of the Company, and delivered to the Trustee for
cancellation at least 45 days prior to the redemption date.
ARTICLE IV
FUNDS AND ACCOUNTS
Section 4.01. Creation of Funds. The following funds are hereby created and the proceeds
of the Bonds and all Revenues received by the Trustee are, subject to the provisions of Section
7.08, to be deposited by it in the Funds described herein and held in trust for the purposes set
forth herein:
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(a)Project Fund.
(b)Debt Service Fund.
Section 4.02 Project Fund. The Project Fund shall be used for the payment of Project Costs.
The Project Fund shall consist of the amounts required or permitted to be deposited therein
pursuant to any provision hereof or of the Lease Documents, and the proceeds of the Bonds shall
be deposited therein in the amount set out in an Officer's Certificate of the Issuer. Separate
accounts within the Project Fund shall be maintained by the Trustee for future capital
acquisitions and improvements if the Issuer or the Company determines that separate accounts
are desirable with respect to particular capital acquisitions and improvements or designated
portions of capital acquisitions and improvements. Payments from the Project Fund, including
any account so established, shall be made by the Trustee as follows:
(a) Payments from the Project Fund shall be made only upon receipt by the Trustee of a
requisition executed by the Company in the form required by the Agreement.
(b) Upon completion or abandonment of the Project (as evidenced by a certificate of the
Company delivered to the Trustee), any moneys remaining in the Project Fund shall be
transferred to the Debt Service Fund to redeem Bonds pursuant to Section 3.04, unless the
Company directs that such moneys be applied to any other use.
(c) Notwithstanding anything to the contrary herein, to the extent an Event of Default
described in clause (a) or (b) of Section 7.01 shall have occurred and be continuing and no other
moneys are available under this Indenture to cure such Event of Default, no moneys on deposit
in the Project Fund shall be applied in accordance with subsection (b) of Section 4.02. In such
event, moneys on deposit in the Project Fund shall be applied by the Trustee in accordance with
Article VII.
Section 4.03 Debt Service Fund.
(a)The Trustee shall deposit into the Debt Service Fund (1) the portion of the proceeds of the
Bonds, if any, representing accrued interest as set out in an Officer's Certificate of the Issuer, (2)
all payments hereafter made by the Company for deposit in such Fund pursuant to the
Agreement (including any insurance or condemnation moneys required to be deposited therein
pursuant to the Agreement), and (3) all other amounts required or permitted hereunder to be
deposited in the Debt Service Fund.
(b) Moneys on deposit in the Debt Service Fund shall be applied as follows:
(1) to the payment of interest, when due, on all Outstanding Bonds, including any accrued
interest due in connection with redemptions of Bonds; and
(2) to the payment, when due, of the principal of the Bonds then payable at maturity or upon
redemption.
Section 4.04. Revenues to Be Held for All Bondholders, With Certain Exceptions. Until
applied as herein provided and except where moneys have been deposited with or paid to the
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Trustee pursuant to an instrument restricting the application of such moneys to particular Bonds,
the moneys and investments held in all Funds established hereunder and the proceeds of any
remedies exercised under Article VII shall be held in trust pursuant to the terms of this Indenture
for the equal and proportionate benefit of the holders of all Outstanding Bonds, except that: (a)
on and after the date on which the interest on or principal of any particular Bond or Bonds is due
and payable from the Debt Service Fund or, with respect to which a call for redemption has been
given and funds for such redemption have been deposited with the Trustee and, if a Conditional
Redemption, the rescission date has passed, the unexpended balance of the amount deposited or
reserved in the Debt Service Fund for the making of such payments shall, to the extent necessary
therefor, be held solely for the benefit of the Bondholder or Bondholders entitled thereto; and (b)
any special redemption fund established in connection with the defeasance of any Bonds in
accordance with Article IX shall be held for the benefit of the holders of Bonds being defeased.
Section 4.05. Repayment to the Company from Amounts Remaining in Any Funds. Any
amounts remaining in any Funds (a) after all of the Outstanding Bonds shall be deemed paid and
discharged under the provisions of this Indenture and (b) after payment of all fees, charges, and
expenses of the Trustee, the Bond Registrar, and any Paying Agents and of all other amounts
required to be paid under this Indenture or the Lease Documents, shall be paid to the Company
as provided in the Agreement to the extent that such amounts are in excess of those necessary to
effect the payment and discharge of the Outstanding Bonds, if any.
Section 4.06. Disposition of Unclaimed Funds. Notwithstanding any provisions of this
Indenture, and subject to applicable unclaimed property laws, any money deposited with the
Trustee or any Paying Agent in trust for the payment of principal of or interest on the Bonds
remaining unclaimed for one year after the payment thereof, to the extent permitted by
applicable law, shall be paid to the Company, whereupon all liability of the Issuer and the
Trustee with respect to such money shall cease, and the holders of the Bonds shall thereafter look
solely to the Company for payment of any amounts then due. All moneys held by the Trustee or
any Paying Agent and subject to this Section shall be held uninvested and without liability for
interest thereon.
Section 4.07. Additional Funds and Accounts. In addition to the funds and accounts
specifically authorized under this Article, the Trustee shall have the authority to create and
maintain such other funds and accounts as it may deem necessary for proper administration
hereunder.
ARTICLE V
INVESTMENT OR DEPOSIT OF FUNDS
Section 5.01. Deposits and Security Therefor. All moneys received by the Trustee under
this Indenture for deposit in any Fund established hereunder shall be considered trust funds. All
moneys on deposit with the Trustee shall, to the extent not insured, be secured in the manner
required or permitted by State or other applicable law. Subject to the foregoing requirements as
to security, if at any time the commercial department of the Trustee is unwilling to accept such
deposits or unable to secure them as provided above, the Trustee may deposit such moneys with
any other depository which is authorized to receive and secure them as aforesaid and the deposits
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of which are insured by the Federal Deposit Insurance Corporation. All security for deposits
shall be perfected in such manner as may be required or permitted under applicable law in order
to grant to the Trustee a perfected lien on or security interest in such deposits.
Section 5.02. Investment or Deposit of Funds. Moneys on deposit in the Funds established
pursuant to Article IV shall be invested and reinvested by the Trustee as follows:
(a) All moneys on deposit in Funds shall be invested in Eligible Investments which shall
mature, or be subject to repurchase, withdrawal without penalty, or redemption at the option of
the holder on or before the dates on which the amounts invested are reasonably expected to be
needed for the purposes hereof
(b) All purchases or sales of Eligible Investments shall be made at the direction of the
Company (given in writing or orally, confirmed in writing), or in the absence of such direction,
by the Trustee in obligations of the type described in subsection (a), (b), (c), or (d) of the
definition of"Eligible Investments"payable on demand.
(c) (1) Any securities or investments held by the Trustee may be transferred by the Trustee, if
required in writing by the Company, from any of the Funds or accounts mentioned in Article IV
to any other Fund or account mentioned in Article IV at the then current market value thereof
without having to be sold and purchased or repurchased; provided, however, that after any such
transfer or transfers, the investments in each such Fund or account shall be in accordance with
the provisions as stated in this Indenture; and (2) whenever any other transfer or payment is
required to be made from any particular Fund, such transfer or payment shall be made from such
combination of maturing principal, redemption premiums, liquidation proceeds, and withdrawals
of principal as the Trustee deems appropriate for such purpose.
(d)Neither the Issuer nor the Trustee shall be accountable for any depreciation in the value of
Eligible Investments or for any losses incurred upon any authorized disposition thereof
(e) Subject to the foregoing, the Trustee is expressly authorized to invest moneys in two or
more Funds in a single investment, provided that a portion of the investment allocable to each
such Fund, and all payments received with respect to such allocable portion, shall be applied in
accordance with the applicable provisions governing such Fund hereunder.
(f) Unless otherwise provided in an applicable supplemental indenture, prior to the
completion of the Project, investment income on amounts on deposit in the Debt Service Fund
shall be transferred to the Project Fund to the extent that no deficiency will exist in the Debt
Service Fund after such transfer or shall be applied to such other purpose or purposes as directed
by the Company. In all other situations, earnings from investment shall remain in the respective
Fund where earned.
Section 5.03. Valuation of Funds. The Trustee shall determine the market value of the assets
in each of the Funds established hereunder on, or on a date not earlier than three days prior to,
January 1 of each year. As soon as practicable after each such valuation date, the Trustee shall
furnish to the Company a report of the status of each Fund as of such date. The Trustee shall also
advise the Company at such time of the amount then available in the Debt Service Fund as a
credit against future deposits prior to the next valuation date in direct order of the due dates of
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such deposits. In computing the value of assets in any Fund, investments shall be valued at the
fair market value thereof and shall include accrued but unpaid interest on each investment, and
all investments (valued as aforesaid) and accrued interest thereon shall be deemed a part of such
Funds. All investments that mature within six months of any valuation date or are payable on
demand shall be valued at par plus any accrued and unpaid interest. Upon the request of the
Company, the Trustee shall also provide the Company with monthly or other periodic statements
showing amounts deposited into and withdrawn from each Fund, the investments made with
amounts in each Fund, and the investment income received from such investments.
ARTICLE VI
COVENANTS AND AGREEMENTS OF THE ISSUER
Section 6.01. Covenants and Agreements of the Issuer. In addition to any other covenants
and agreements of the Issuer contained in this Indenture or the Agreement, the Issuer further
covenants and agrees with the Bondholders and the Trustee as follows:
(a) Payment of Principal and Interest. The Issuer will pay all principal of and interest on the
Bonds or cause them to be paid solely from the sources provided herein on the dates, at the
places, and in the manner provided in this Indenture and the Agreement.
(b) Revenues and Assignment of Revenues. The Issuer will not assign the Revenues or create
or authorize to be created any debt, lien, or charge thereon, other than the assignment thereof
under this Indenture.
(c) Recordings and Filings. At the expense of the Company, the Issuer will cooperate with
the Company in the Company's performing the Company's obligation to cause this Indenture, or
any related instruments or documents relating to the assignment made by the Issuer under this
Indenture to secure the Bonds, to be recorded and filed in the manner and in the places which
may be required by law in order to preserve and protect fully the security of the holders of the
Bonds and the rights of the Trustee hereunder.
(d) Inspection of Project Books. All books, instruments, and documents in the Issuer's
possession relating to the Project and the Revenues shall be open to inspection at all times during
the Issuer's regular business hours by any accountants or other agents of the Trustee which the
Trustee may designate from time to time or by the holders of 25% or more in principal amount of
the Bonds then Outstanding, or a designated representative thereof.
(e) Register. At reasonable times and under reasonable regulations established by the Bond
Registrar, the Bond Register may be inspected and copied by or delivered to the Company, the
Issuer, the Trustee, holders of 25% or more in principal amount of any Series of the Bonds then
Outstanding, or a designated representative thereof.
(f) Rights and Enforcement of the Agreement. The Trustee may enforce, in its name or in the
name of the Issuer, all rights of the Issuer for and on behalf of the Bondholders, except for
Unassigned Issuer's Rights, and may enforce all covenants, agreements, and obligations of the
Company under and pursuant to the Agreement, regardless of whether the Issuer is in default in
the pursuit or enforcement of those rights, covenants, agreements, or obligations. The Issuer,
17
however, will do all things and take all actions on its part necessary to comply with covenants,
agreements, obligations, duties, and responsibilities on its part to be observed or performed under
the Agreement, and will take all actions within its authority to keep the Agreement in effect in
accordance with the terms thereof.
Section 6.02. Observance and Performance of Covenants, Agreements, Authority, and
Actions. The Issuer hereby agrees to observe and perform at all times all covenants, agreements,
authority, actions, undertakings, stipulations, and provisions to be observed or performed on its
part under the Agreement, this Indenture, the Authorizing Ordinance, and the Bonds which are
executed, authenticated, and delivered under this Indenture, and under all proceedings of its City
Council pertaining thereto.
The Issuer represents and warrants that:
(a) It is duly authorized by the Constitution and laws of the State, including particularly
and without limitation the Act, to issue the Bonds, to execute and deliver this Indenture and
the Lease Documents to which it is a party, and to provide the security for payment of the
principal of and interest on the Bonds in the manner and to the extent set forth in this
Indenture.
(b) All actions required on its part to be performed for the issuance, sale, and delivery of
the Bonds and for the execution and delivery of this Indenture and the Lease Documents to
which it is a party have been or will be taken duly and effectively; provided no representation
is made as to compliance with any state securities or"Blue Sky" laws.
(c) The Bonds will be valid and enforceable special obligations of the Issuer according to
their terms, subject to bankruptcy and equitable principles.
Section 6.03. Enforcement of Issuer's Obligations. So long as no Event of Default
hereunder shall have occurred and be continuing, the Issuer may exercise all its rights under the
Lease Documents or any other lease, agreement, or contract, or supplement or amendment
thereto, provided that, except as permitted hereby or by the Lease Documents, the Issuer shall
not amend any of the same so as to affect adversely the Issuer's ability to perform its covenants
under this Indenture or change the payments or term of the Lease Documents.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES
Section 7.01 Events of Default Defined. Each of the following is an "Event of Default"
hereunder:
(a) Default in the payment of any installment of interest on any Bond when it becomes
due and payable;
(b) Default in the payment of principal of any Bond when it becomes due and payable;
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(c) Subject to the provisions of Section 7.07, default in the performance, or breach, of
any covenant, warranty, or representation of the Issuer contained in this Indenture (other than
a default under subsections (a) and (b) of this Section);
(d) The occurrence of any Event of Default under the Lease Documents; or
(e) (1) An Event of Bankruptcy of the Issuer; (2) the appointment of a receiver,
liquidator, assignee, custodian, trustee, sequestrator, or other similar official of the Issuer or
of any substantial portion of its property; or (3) the ordering of the winding up or liquidation
of its affairs and the continuance of any such involuntary filing, appointment, or order
unstayed and in effect for a period of 60 consecutive days.
Section 7.02. Remedies Upon Default.
(a) If an Event of Default under Section 7.01 occurs and is continuing, the Trustee may, and
upon the written request to the Trustee by the holder or holders of not less than a majority in
aggregate principal amount of the Bonds then Outstanding shall, subject to the requirements of
subsection (e) of Section 8.02, by written notice to the Issuer and the Company, declare the
principal of the Bonds and all interest accrued thereon to the date of acceleration to be
immediately due and payable.
(b) At any time after such a declaration of acceleration has been made and before the entry of
a judgment or decree for payment of the money due, the Trustee may, or the holders of not less
than a majority in aggregate principal amount of the Bonds then Outstanding, may by written
notice to the Issuer and the Trustee, and subject to the requirements of subsection (e) of Section
8.02, direct the Trustee to, rescind and annul such declaration and its consequences if:
(1) there has been paid to or deposited with the Trustee by or for the account of the
Issuer, or provision satisfactory to the Trustee has been made for the payment of a sum
sufficient to pay: (A) all overdue installments of interest on the Bonds; (B) the principal of
any Bonds which have become due other than by such declaration of acceleration and interest
thereon; (C) to the extent lawful, interest upon overdue installments of interest; and (D) all
sums paid or advanced by the Trustee hereunder, together with the reasonable compensation,
expenses, disbursements, and advances of the Trustee, its agents and Counsel, prior to the
date of notice of rescission; and
(2) all Events of Default, other than the nonpayment of principal of and interest on the
Bonds which have occasioned such acceleration, have been cured or waived.
(c) No such rescission and annulment shall affect any subsequent default or impair any
consequent right.
Section 7.03. Additional Remedies.
(a) The Trustee, upon the occurrence of an Event of Default may, and upon the written
request of the holders of not less than a majority in aggregate principal amount of the Bonds
Outstanding, and subject to the requirements of subsection (e) of Section 8.02, shall: (a) exercise
any or all rights of the Issuer under the Lease Documents; and (b) proceed to protect and enforce
19
its rights and the rights of the holders of the Bonds under this Indenture by a suit or suits in
equity or at law, either for the specific performance of any covenant or agreement contained in
this Indenture or in the Lease Documents or in aid of the execution of any power herein or
therein granted, or for the enforcement of any other appropriate legal or equitable remedy, and
the Trustee in reliance upon the advice of Counsel may deem most effective to protect and
enforce any of the rights or interests of the holders of the Bonds under the Bonds or this
Indenture.
(b) Without limiting the generality of the foregoing, the Trustee shall at all times have the
power to institute and maintain such proceedings as it may deem expedient: (1) to prevent any
impairment of the Trust Estate by any acts which may be unlawful or in violation of this
Indenture or the Lease Documents, and (2) to protect its interests and the interests of the
Bondholders in the Trust Estate and in the issues, profits, revenues, and other income arising
therefrom, including the power to maintain proceedings to restrain the enforcement of or
compliance with any governmental enactment, rule, or order which may be unconstitutional or
otherwise invalid, if the enforcement of, or compliance with, such enactment, rule, or order
would impair the Trust Estate or be prejudicial to the interests of the Bondholders or the Trustee.
Section 7.04. Marshaling of Assets.
Upon the occurrence of an Event of Default, all moneys in all Funds shall be available to be
utilized by the Trustee in accordance with this Article. The rights of the Trustee under Section
8.05 shall be applicable. During the continuance of any such Event of Default, all provisions of
this Indenture relating to the utilization of Funds, including but not limited to those set out in
Article IV, shall be superseded by this Article. Subsequent to the curing or waiver of any such
Event of Default, the provisions of this Indenture relating to utilization of Funds, including the
provisions of Article IV, shall be reinstated.
Section 7.05. Trustee May File Proofs of Claim.
(a) In case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition, or other judicial proceeding under the
Bankruptcy Law relating to the Issuer or the Company, any other obligor upon the Bonds or any
property of the Issuer or Company, the Trustee (whether or not the principal of the Bonds shall
then be due and payable by acceleration or otherwise, and whether or not the Trustee shall have
made any demand upon the Issuer or the Company for the payment of overdue principal and
interest) shall be entitled and empowered, by intervention in such proceeding or other means:
(1) to file and prove a claim for the whole amount of the principal and interest owing and
unpaid in respect of the Bonds then Outstanding or for breach of this Indenture or the Lease
Documents and to file such other papers or documents as may be necessary or advisable in
order to have the claims of the Trustee (including any claim for the reasonable compensation,
expenses, disbursements, and advances of the Trustee, its agents and Counsel) and of the
holders allowed in such proceeding; and
(2) to collect and receive any moneys or other property payable or deliverable on any
such claims and to distribute the same;
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and any receiver, assignee, trustee, liquidator, sequestrator, or similar official in any such judicial
proceeding is hereby authorized by each holder to make such payments to the Trustee, and, in the
event that the Trustee shall consent to the making of such payments directly to the holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses, disbursements,
and advances of the Trustee, its agents and Counsel, and any other amounts due the Trustee
under Section 8.05.
(b) No provision of this Indenture empowers the Trustee to authorize or consent to or accept
or adopt on behalf of any holders of the Bonds any plan of reorganization, arrangement,
adjustment, or composition affecting any of the Bonds or the rights of any holder thereof, or to
authorize the Trustee to vote in respect of the claim of any holder in any proceeding described in
subsection (a) of this Section.
Section 7.06. Possession of Bonds Not Required. All rights under this Indenture, the Lease
Documents, and the Bonds may be enforced by the Trustee without possession of any Bonds or
the production of them at trial or other proceedings. Any proceedings instituted by the Trustee
may be brought in its name for itself or as representative of the Bondholders without the
necessity of joining Bondholders as parties, and any recovery resulting from such proceedings
shall, subject to Section 7.08,be for the ratable benefit of the Bondholders.
Section 7.07 Notice and Opportunity to Cure Certain Defaults. No default under
subsection (c) of Section 7.01 shall constitute an Event of Default until written notice of such
default shall have been given to the Company by the Trustee or by the holders of at least 25% in
aggregate principal amount of the Bonds Outstanding, and the Company shall have had 30 days
after receipt of such notice to correct such default or cause such default to be corrected, and shall
have failed to do so. In the event, however, that the default be such that it cannot be corrected
within such 30-day period, it shall not constitute an Event of Default if corrective action is
instituted by the Company within such period and diligently pursued (as determined by the
Trustee) until the default is corrected. The Trustee shall send a copy of each such notice to the
Issuer, but receipt of such notice by the Issuer shall not be a condition precedent to further action
by the Trustee.
Section 7.08. Priority of Payment Following Event of Default.
(a) If at any time after the occurrence of an Event of Default the moneys held by the Trustee
under this Indenture shall not be sufficient to pay the principal of and interest on the Bonds as the
same become due and payable, whether by their terms or as a result of acceleration pursuant to
Section 7.03, such moneys, together with any moneys then available or thereafter becoming
available for such purpose, whether through the exercise of remedies in this Article or otherwise,
shall, subject to subsections (b) and (c) of this Section, be applied by the Trustee as follows:
(1) first, to the payment of all amounts due the Trustee under Section 8.05;
(2) second, to the payment of all installments of interest on the Bonds then due and
payable in the order in which such installments became due and payable, and, if the amount
available shall not be sufficient to pay in full any particular installment, then to the payment,
21
ratably, according to the amounts due on such installments, without discrimination or
preference; and
(3) third, to the payment of the unpaid principal amount of any of the Bonds which shall
have become due and payable, in the order of due dates (other than Bonds called for
redemption or contracted to be purchased for the payment of which moneys are held pursuant
to the provisions of this Indenture), with interest upon the principal amount of the Bonds
from the respective dates upon which they shall have become due and payable, and, if the
amount available shall not be sufficient to pay in full the principal of such Bonds due and
payable on any particular due date, together with such interest, then to the payment first of
such interest, ratably, according to the amount of principal due on such date, without any
discrimination or preference.
(b) If the principal of all Bonds shall have become due and payable, whether by their terms or
by a declaration of acceleration, and subject to subsection (a)(l) of this Section regarding
payment to the Trustee, all such moneys shall be applied to the payment of the principal and
interest then due and unpaid upon the Bonds, without preference or priority of principal over
interest or of interest over principal, or of any installment of interest over any other installment
of interest, or of any Bond over any other Bond, ratably, according to the amounts due
respectively for principal and interest, without any discrimination or preference.
(c) Whenever moneys are to be applied pursuant to the provisions of this Section, the Trustee
may, in its discretion, establish and maintain a reserve for future fees and expenses, and may
apply moneys to be distributed at such times, and from time to time, as the Trustee shall
determine, having due regard for the amount of such moneys available for application and the
likelihood of additional moneys becoming available for such application in the future. Whenever
the Trustee shall apply such funds, it shall fix a date (which shall be an Interest Payment Date
unless it shall deem another date more suitable) upon which such application is to be made and
upon such date interest on the amounts of principal to be paid on such dates, and for which
moneys are available, shall cease to accrue. The Trustee shall also select a Record Date for such
payment date. The Trustee shall give such notice as it may deem appropriate of the deposit with
it of any moneys and of the fixing of any such Record Date and payment date, and shall not be
required to make payment to the holder of any Bond until such Bond shall be presented to the
Trustee for appropriate endorsement or for cancellation if fully paid.
Section 7.09. Bondholders May Direct Proceedings. The owners of a majority in aggregate
principal amount of the Bonds Outstanding shall, subject to the requirements of subsection (e) of
Section 8.02, have the right, by an instrument or instruments in writing executed and delivered to
the Trustee, to direct the method and place of conducting all remedial proceedings by the Trustee
hereunder, provided that such direction shall not be in conflict with any rule of law or this
Indenture and that the Trustee shall have the right to decline to follow any such direction which
in the opinion of the Trustee would be unduly prejudicial to the rights of Bondholders not parties
to such direction or would subject the Trustee to personal liability or expense. Notwithstanding
the foregoing, the Trustee shall have the right to select and retain Counsel of its choosing to
represent it in any such proceedings. The Trustee may take any other action which is not
inconsistent with any direction under this Section.
22
.r.rr.rr
Section 7.10. Limitations on Rights of Bondholders.
(a) No Bondholder shall have any right to pursue any other remedy under this Indenture or
the Bonds unless: (1) an Event of Default shall have occurred and is continuing; (2) the owners
of not less than a majority in aggregate principal amount of all Bonds then Outstanding have
requested the Trustee, in writing, to exercise the powers hereinabove granted or to pursue such
remedy in its or their name or names; (3) the Trustee has been offered indemnity satisfactory to it
against costs, expenses, and liabilities reasonably anticipated to be incurred; (4) the Trustee has
declined to comply with such request, or has failed to do so, within 60 days after its receipt of
such written request and offer of indemnity; and (5) no direction inconsistent with such request
has been given to the Trustee during such 60-day period by the holders of a majority in aggregate
principal amount of the Bonds Outstanding.
(b) The provisions of subsection (a) of this Section are conditions precedent to the exercise
by any Bondholder of any remedy hereunder. The exercise of such rights is further subject to the
provisions of Sections 7.09, 7.11, and 7.14. No one or more Bondholders shall have any right in
any manner whatever to enforce any right under this Indenture, except in the manner herein
provided. All proceedings at law or in equity with respect to an Event of Default shall be
instituted and maintained in the manner herein provided for the equal and ratable benefit of the
Bondholders of all Bonds Outstanding.
Section 7.11. Unconditional Right of Bondholder to Receive Payment. Notwithstanding
any other provision of this Indenture, any Bondholder shall have the absolute and unconditional
right to receive payment of principal of and interest on the Bonds on and after the due date
thereof and to institute suit for the enforcement of any such payment.
Section 7.12. Restoration of Rights and Remedies. If the Trustee or any Bondholder has
instituted any proceeding to enforce any right or remedy under this Indenture or the Lease
Documents, and any such proceeding has been discontinued or abandoned for any reason, or has
been determined adversely to the Trustee or such Bondholder, then the Company, the Trustee,
and the Bondholders shall, subject to any determination in such proceeding, be restored to their
former positions hereunder, and all rights and remedies of the Trustee and the Bondholders shall
continue as though no such proceeding had been instituted.
Section 7.13 Rights and Remedies Cumulative. No right or remedy herein conferred upon
or reserved to the Trustee is intended to be exclusive of any other right or remedy, but each such
right or remedy shall, to the extent permitted by law, be cumulative of and in addition to every
other right or remedy given hereunder or now or hereafter existing at law, in equity, or
otherwise. The assertion or employment of any right or remedy hereunder shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
Section 7.14 Delay or Omission Not Waiver. No delay or omission by the Trustee or any
Bondholder to exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of such Event of Default. Every right and remedy
given by this Article or by law to the Trustee or the Bondholders may be exercised from time to
time, and as often as may as deemed expedient, by the Trustee or the Bondholders, as the case
may be.
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Section 7.15. Waiver of Defaults. The holders of a majority in aggregate principal amount
of the Outstanding Bonds may, by written notice to the Trustee and subject to the requirements
of subsection (e) of Section 8.02, waive any existing default or Event of Default and its
consequences, except an Event of Default under subsections (a) or(b) of Section 7.01. Upon any
such waiver, the default or Event of Default shall be deemed cured and shall cease to exist for all
purposes. No waiver of any default or Event of Default shall extend to or effect any subsequent
default or Event of Default or shall impair any right or remedy consequent thereto.
Section 7.16 Notice of Events of Default. If an Event of Default occurs of which the Trustee
has or is deemed to have notice under subsection (h) of Section 8.02, the Trustee shall give
Immediate Notice thereof to the Issuer and the Company. Within 30 days thereafter (unless such
Event of Default has been cured or waived), the Trustee shall give notice of such Event of
Default to each holder of Bonds then Outstanding, provided, however, that except in the instance
of an Event of Default under subsections (a) or (b) of Section 7.01, the Trustee may withhold
such notice to Bondholders if and so long as the Trustee in good faith determines that the
withholding of such notice is in the interests of Bondholders, and provided, further, that notice to
Bondholders of any Event of Default under subsection (c) of Section 7.01 shall be subject to the
provisions of Section 7.07 and shall not be given until the grace period has expired.
Section 7.17 Right to Cure. If the Issuer shall, for whatever reason, at any time fail to pay
any amount or perform any act which it is obligated to pay or perform and, as a result, a default
or Event of Default occurs or may occur, the Company shall have the right to perform such act or
pay such amount on behalf of the Issuer and thereby cure or prevent such default or Event of
Default.
ARTICLE VIII
THE TRUSTEE
Section 8.01 Duties and Responsibilities of the Trustee.
(a) Prior to the occurrence of an Event of Default of which it has or is deemed to have notice
hereunder, and after the curing or waiver of any Event of Default which may have occurred:
(1) the Trustee undertakes to perform such duties and only such duties as are specifically
set forth in this Indenture, and no implied covenants or obligations shall be read into this
Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed therein, upon certificates
or opinions furnished to the Trustee that conform to the requirements of this Indenture; but
the Trustee is under a duty to examine such certificates and opinions to determine whether
they conform to the requirements of this Indenture.
(b) In case an Event of Default of which the Trustee has or is deemed to have notice
hereunder has occurred and is continuing, the Trustee shall exercise such of the rights and
powers vested in it by this Indenture, and use the same degree of care and skill in their exercise,
as a prudent person would exercise or use in the conduct of such person's own affairs.
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(c) No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful misconduct, except
that:
(1) this subsection shall not be construed to limit the effect of subsection (a) of this
Section;
(2) the Trustee is not liable for any error of judgment made in good faith by a
Responsible Officer, unless it is proven that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee is not liable with respect to any action it takes or omits to be taken by it in
good faith in accordance with the direction of the Bondholders under any provision of this
Indenture relating to the time, method and place of conducting any proceeding for any
remedy available to the Trustee, or exercising any trust or power conferred upon the Trustee
under this Indenture; and
(4) no provision of this Indenture shall require the Trustee to expend or risk its own funds
or otherwise incur any liability in the performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it has reasonable grounds for believing that the
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(d) Whether or not expressly so provided, every provision of this Indenture relating to the
conduct or affecting the liability of or affording protection to the Trustee is subject to the
provisions of this Section.
Section 8.02. Certain Rights of the Trustee. Except as otherwise provided in Section 8.01:
(a) the Trustee may rely and is protected in acting or refraining from acting upon any
resolution, certificate, statement, instrument, opinion, report, notice, request, direction, consent,
order, approval, bond, debenture, or other paper or document believed by it to be genuine and to
have been signed or presented by the proper party or parties;
(b)any request, direction, order, or demand of the Company under this Indenture shall be
sufficiently evidenced by an Officer's Certificate (unless other evidence thereof is specifically
prescribed) and any resolution of the City Council of the Company may be sufficiently
evidenced by a copy thereof certified by an Authorized Company Representative;
(c) whenever in the administration of this Indenture the Trustee deems it desirable that a
matter be proved or established prior to taking, suffering, or omitting any action hereunder, the
Trustee (unless other evidence thereof is specifically prescribed) may, in the absence of bad faith
on its part, rely upon an Officer's Certificate;
(d) the Trustee may consult with Counsel and the written advice of such Counsel or an
opinion of Counsel shall be full and complete authorization and protection for any action taken,
suffered, or omitted by it in good faith and in accordance with such advice or opinion;
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(e) the Trustee is under no obligation to exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of the Bondholders unless such holders have
offered to the Trustee security or indemnity satisfactory to the Trustee as to its terms, coverage,
duration, amount, and otherwise with respect to the costs, expenses, and liabilities which may be
incurred by it in compliance with such request or direction, and the provision of such indemnity
shall be mandatory for any remedy taken upon direction of the holders of a majority in aggregate
principal amount of the Bonds;
(f) the Trustee is not required to make any inquiry or investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, approval, bond, debenture, or other paper or document but the Trustee,
in its discretion, may make such further inquiry or investigation into such facts or matters as it
may see fit and, if the Trustee determines to make such further inquiry or investigation, it is
entitled to examine the books, records, and premises of the Issuer and the Company, in person or
by agent or attorney;
(g) the Trustee may execute any of its trusts or powers or perform any duties under this
Indenture either directly or by or through agents or attorneys, and may in all cases pay, subject to
reimbursement as provided in Section 8.05, such reasonable compensation as it deems proper to
all such agents and attorneys reasonably employed or retained by it, and the Trustee shall not be
responsible for any misconduct or negligence of any agent or attorney appointed with due care
by it;
(h) the Trustee is not required to take notice or deemed to have notice of any default or Event
of Default hereunder, except Events of Default under subsections (a) and (b) of Section 7.01,
unless a Responsible Officer of the Trustee has actual knowledge thereof or has received notice
in writing of such default or Event of Default from the Issuer, the Company or the holders of at
least 25% in aggregate principal amount of the Outstanding Bonds, and in the absence of any
such notice, the Trustee may conclusively assume that no such default or Event of Default exists;
(i) the Trustee is not required to give any bond or surety with respect to the performance of
its duties or the exercise of its powers under this Indenture;
(j) in the event the Trustee receives inconsistent or conflicting requests and indemnity from
two or more groups of holders of Bonds, each representing less than a majority in aggregate
principal amount of the Bonds Outstanding, pursuant to the provisions of this Indenture, the
Trustee, in its sole discretion, may determine what action, if any, shall be taken;
(k) the Trustee's immunities and protections from liability and its right to indemnification in
connection with the performance of its duties under this Indenture shall extend to the Trustee's
officers, directors, agents, attorneys, and employees. Such immunities and protections and right
to indemnification, together with the Trustee's right to compensation, shall survive the Trustee's
resignation or removal,the discharge of this Indenture, and final payment of the Bonds;
(1) the permissive right of the Trustee to take the actions permitted by this Indenture shall not
be construed as an obligation or duty to do so; and
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(m) except for information provided by the Trustee concerning the Trustee, the Trustee shall
have no responsibility for any information in any offering memorandum or other disclosure
material distributed with respect to the Bonds, and the Trustee shall have no responsibility for
compliance with any state or federal securities laws in connection with the Bonds.
Section 8.03. Trustee Not Responsible for Recitals. The recitals contained in this Indenture
and in the Bonds (other than the certificate of authentication on the Bonds) are statements of the
Issuer and the Trustee assumes no responsibility for their correctness. The Trustee makes no
representations as to the value, condition, or sufficiency of any assets pledged or assigned as
security for the Bonds, the right, title, or interest of the Issuer therein, the security provided
thereby or by this Indenture, the technical or financial feasibility of the Project, or the
compliance of the Project with the Act. The Trustee is not accountable for the use or application
by the Company of any of the Bonds or the proceeds of the Bonds or for the use or application of
any moneys paid over by the Trustee in accordance with any provision of this Indenture or the
Agreement.
Section 8.04. Trustee May Own Bonds. The Trustee, in its commercial banking or in any
other capacity, may in good faith buy, sell, own, hold, and deal in any of the Bonds and may join
in any action which any Bondholder may be entitled to take with like effect as if it were not
Trustee. The Trustee, in its commercial banking or in any other capacity, may also engage in or
be interested in any financial or other transaction with the Issuer or the Company and may act as
depository, trustee, or agent for any committee of Bondholders secured hereby or other
obligations of the Issuer as freely as if it were not Trustee. The provisions of this Section shall
extend to affiliates of the Trustee.
Section 8.05. Compensation and Expenses of the Trustee. The Company has covenanted
and agreed, pursuant to the Agreement:
(a)to pay to the Trustee compensation for all services rendered by it hereunder and under
the other agreements relating to the Bonds to which the Trustee is a party in accordance with
terms agreed to from time to time, and, subsequent to default, in accordance with the
Trustee's then-current fee schedule for default administration (the entirety of which
compensation shall not be limited by any provision of law regarding compensation of a
trustee of an express trust);
(b) to reimburse the Trustee upon its request for all reasonable expenses, disbursements,
and advances incurred or made by the Trustee in accordance with any provision of this
Indenture, any other agreement relating to the Bonds to which it is a party or in complying
with any request by the Company or the Issuer, including the reasonable compensation,
expenses, and disbursements of its agents and Counsel, except any such expense,
disbursement, or advance attributable to the Trustee's negligence or bad faith; and
(c) to indemnify, defend, and hold the Trustee harmless from and against any loss,
liability, or expense incurred without negligence or bad faith on its part, arising out of or in
connection with the acceptance or administration of the office of Trustee under this Indenture
and the Lease Documents, including the costs of defending itself against any claim or
27
liability in connection with the exercise or performance of any of its powers or duties
hereunder or thereunder.
In the event the Trustee incurs expenses or renders services in any proceedings under
Bankruptcy Law relating to the Issuer or the Company, the expenses so incurred and
compensation for services so rendered are intended to constitute expenses of administration
under Bankruptcy Law.
As security for the performance of the obligations of the Company under this Section, the
Trustee shall have a lien, which it may exercise through a right of setoff, prior to the Bonds upon
all property or funds held or collected by the Trustee pursuant to this Indenture for the payment
of principal of and interest on the Bonds. The obligations of the Company to make the payments
described in this Section shall survive discharge of this Indenture, the resignation or removal of
the Trustee, and payment in full of the Bonds.
Section 8.06. Qualifications of Trustee. There shall at all times be a trustee hereunder which
shall be a corporation or banking association organized and doing business under the laws of the
United States of America or of any state, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000, or an affiliate of a
corporation or banking association meeting that requirement which guarantees the obligations
and liabilities of the proposed trustee, and subject to supervision or examination by federal or
state banking authority. If such corporation or banking association publishes reports of condition
at least annually, pursuant to law or the requirements of any supervising or examining authority
above referred to, then for purposes of this Section, the combined capital and surplus of such
corporation or banking association shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. If at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, it shall resign promptly in the
manner and with the effect specified in this Article.
Section 8.07. Resignation or Removal of Trustee; Appointment of Successor Trustee.
(a) No resignation or removal of the Trustee and no appointment of a successor Trustee
pursuant to this Article shall become effective until the acceptance of appointment by the
successor Trustee under Section 8.08.
(b) The Trustee may resign at any time by giving written notice to the Issuer and the
Company. Upon receiving such notice of resignation, the Issuer shall promptly appoint a
successor Trustee by an instrument in writing. If an instrument of acceptance has not been
delivered to the resigning Trustee within 30 days after the giving of such notice of resignation,
the resigning Trustee or any holder of a Bond then Outstanding may petition a court of
competent jurisdiction for the appointment of a successor Trustee.
(c) Prior to the occurrence and continuance of an Event of Default hereunder, or after the
curing or waiver of any such Event of Default, the Issuer, the holders of a majority in aggregate
principal amount of the Outstanding Bonds, or the Company may remove the Trustee and shall
appoint a successor Trustee. In the event there shall have occurred and be continuing an Event of
Default hereunder, the holders of a majority in aggregate principal amount of the Outstanding
28
Bonds may remove the Trustee and shall appoint a successor Trustee. In each instance such
removal and appointment shall be accomplished by an instrument or concurrent instruments in
writing signed by the Issuer, such holders, or the Company, as the case may be, and delivered to
the Trustee, the Issuer, the Company, and holders of the Outstanding Bonds.
(d) If at any time: (1) the Trustee shall cease to be eligible and qualified under Section 8.06
and shall fail or refuse to resign after written request to do so by the Issuer, the Company, or the
holder of any Bond, or (2) the Trustee shall become incapable of acting or shall be adjudged
insolvent, or a receiver of the Trustee or its property shall be appointed, or any public officer
shall take charge or control of the Trustee, its property or affairs for the purpose of rehabilitation,
conservation, or liquidation, then in either such case (A) the Issuer or the Company may remove
the Trustee and appoint a successor Trustee in accordance with the provisions of subsection (c)
of this Section; or (B) any holder of a Bond then Outstanding may, on behalf of the holders of all
Outstanding Bonds, petition a court of competent jurisdiction for removal of the Trustee and
appointment of a successor Trustee.
(e) The Company shall give written notice of each resignation or removal of the Trustee and
each appointment of a successor Trustee to each holder of Bonds then Outstanding as listed in
the Bond Register. Each such notice shall include the name and address of the applicable
corporate trust office of the successor Trustee.
Section 8.08. Acceptance of Appointment by Successor Trustee.
(a) Every successor Trustee appointed hereunder shall execute, acknowledge, and deliver to
the Issuer, the Company, and the predecessor Trustee an instrument accepting its appointment.
The resignation or removal of the retiring Trustee shall thereupon become effective, and the
successor Trustee shall, without further act, deed, or conveyance become vested with all the
estates, properties, rights, powers, and duties of the predecessor Trustee. Upon the request of the
Issuer, the Company, or the successor Trustee, the predecessor Trustee shall execute and deliver
an instrument transferring to the successor Trustee all the estates, properties, rights, powers, and
duties of the predecessor Trustee under this Indenture, and shall duly assign, transfer, deliver,
and pay over to the successor Trustee all the Trust Estate and moneys and other property then
held under this Indenture, subject, however, to the lien provided for in Section 8.05. The
successor Trustee shall promptly give written notice of its appointment to the holders of all
Bonds Outstanding in the manner prescribed herein, unless such notice has previously been
given.
(b) No successor Trustee shall accept appointment as provided in this Section unless, as of
the date of such acceptance, it is eligible and qualified under the provisions of Section 8.06.
Section 8.09. Merger, Succession, or Consolidation of Trustee. Any corporation or
association: (a) into which the Trustee is merged or with which it is consolidated; (b) resulting
from any merger or consolidation to which the Trustee is a party; or (c) succeeding to all or
substantially all of the corporate trust business of the Trustee shall be the successor Trustee
without the execution or filing of any document or the taking of any further action. Any such
successor must nevertheless be eligible and qualified under the provisions of Section 8.06.
29
Section 8.10. Notices to Bondholders; Waiver. Where this Indenture provides for notice to
Bondholders of any event, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to each Bondholder
affected by each event, at his or her address as it appears on the Bond Register, not later than the
latest date, and not earlier than the earliest date, prescribed for the first giving of such notice. In
any case where notice to Bondholders is given by mail, neither the failure to mail such notice,
nor any default in any notice so mailed to any particular Bondholder shall affect the sufficiency
of such notice with respect to other Bondholders. Where this Indenture provides for notice in any
manner, such notice may be waived in writing by the Person entitled to received such notice,
either before or after the event, and such waiver shall be the equivalent of such notice. Waivers
of notice by Bondholders shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
Where this Indenture provides for notice to the Bondholders of any event, the form of the
notice shall prominently include a title block, separate from the body of the notice, which shall
include the following information: (i) the complete title of the Bonds; (ii) the complete name of
the Issuer and of the Company; (iii) the entire nine-digit CUSIP number of each affected
maturity of the Bonds; and (iv)the Record Date.
ARTICLE IX
DISCHARGE AND DEFEASANCE
Section 9.01. Discharge. If
(a) the principal of any Series of the Bonds and the interest due or to become due thereon
prior to maturity shall be paid, is caused to be paid, or is provided for under Section 9.02, at
the times and in the manner to which reference is made in the Bonds, according to the true
intent and meaning thereof, or the outstanding Bonds shall have been paid and discharged in
accordance with this Article, and
(b) all of the covenants, agreements, obligations, terms, and conditions of the Issuer
under this Indenture shall have been kept, performed, and observed and there shall have been
paid to the Trustee, the Bond Registrar, and the Paying Agents all sums of money due or to
become due to them in accordance with the terms and provisions hereof,
then the right, title, and interest of the Trustee in the Trust Estate shall thereupon cease and the
Trustee, on request of the Issuer and at the expense of the Company, shall release this Indenture
and the Trust Estate and shall execute such documents to evidence such release as may be
reasonably required by the Issuer and shall turn over to the Company, or to such other Person as
may be entitled to receive the same, all balances remaining in any Funds hereunder except for
amounts required to pay such Bonds or held pursuant to Section 4.06.
Section 9.02. Defeasance; Deposit of Funds for Payment of Bonds. If the Issuer or the
Company deposits with the Trustee moneys or Defeasance Obligations which, together with the
earnings thereon, are sufficient to pay the principal of any particular Bond or Bonds becoming
due, either at maturity, by means of call for optional redemption or otherwise, together with all
interest accruing thereon to the due date or Redemption Date, and pays or makes provision for
30
payment of all fees, costs, and expenses of the Issuer and the Trustee due or to become due with
respect to such Bonds, all liability of the Issuer with respect to such Bond or Bonds shall cease,
such Bond or Bonds shall be deemed not to be Outstanding hereunder, and the holder or holders
of such Bond or Bonds shall be restricted exclusively to the moneys or Defeasance Obligations
so deposited, together with any earnings thereon, for any claim of whatsoever nature with respect
to such Bond or Bonds, and the Trustee shall hold such moneys, Defeasance Obligations, and
earnings in trust for such holder or holders. In determining the sufficiency of the moneys and
Defeasance Obligations deposited pursuant to this Section, together with the earnings thereon,
the Trustee shall receive, at the expense of the Company, and may rely upon: (a) a verification
report of a firm of nationally recognized independent certified public accountants or other
qualified firm acceptable to the Issuer, the Company, and the Trustee; and (b) an opinion of
Bond Counsel to the effect that all conditions set forth in this Article have been satisfied. Upon
such defeasance all rights of the Issuer and the Company, including its right to provide for
optional redemption of Bonds on dates other than planned pursuant to such defeasance, shall
cease unless specifically retained by filing a written notification thereof with the Trustee at the
time the Defeasance Obligations are deposited with the Trustee.
Section 9.03 Notice of Defeasance.
(a) In case any of the Bonds, for the payment of which moneys or Defeasance Obligations
have been deposited with the Trustee pursuant to Section 9.02, are to be redeemed on any date
prior to their maturity, the Issuer shall give to the Trustee in form satisfactory to it irrevocable
instructions to give notice of redemption of such Bonds on the redemption date for such Bonds
as provided in Section 3.05.
(b) In addition to the foregoing notice, in the event such Bonds to be redeemed are not by
their terms subject to redemption within the next succeeding 65 days, the Trustee shall give
further notice to the Bondholders that the deposit required by Section 9.02 has been made with
the Trustee and that said Bonds are deemed to have been paid in accordance with this Article and
stating the maturity or redemption date or dates upon which moneys are to be available for the
payment of the principal of said Bonds; such further notice shall be given promptly following the
making of the deposit required by Section 9.02; and such further notice also shall be given in the
manner set forth in subsection (b) of Section 3.05; but no defect in said further notice nor any
failure to give all or any portion of such further notice shall in any manner defeat the
effectiveness of the deposit.
(c) If the Issuer or the Company has retained any rights pursuant to the last sentence of
Section 9.02, notice thereof shall be sent to Bondholders of such Bonds as soon as practicable
and not later than any notice required by subsections (a) or(b) of this Section.
ARTICLE X
SUPPLEMENTAL INDENTURES AND AMENDMENTS
Section 10.01. Supplemental Indentures Without Bondholders' Consent. The Issuer and
the Trustee may from time to time and at any time enter into trust indentures supplemental to this
31
Indenture, without the consent of or notice to any Bondholder, to effect any one or more of the
following:
(a) cure any ambiguity or defect or omission or correct or supplement any provision
herein or in any supplemental indenture;
(b) grant to or confer upon the Trustee for the benefit of the Bondholders any additional
rights, remedies, powers, authority, or security that may lawfully be granted to or conferred
upon the Bondholders or the Trustee which are not contrary to or inconsistent with this
Indenture as then in effect or to subject to the pledge and lien of this Indenture additional
revenues, properties, or collateral including Defeasance Obligations;
(c) add to the covenants and agreements of the Issuer in this Indenture other covenants
and agreements thereafter to be observed by the Issuer or to surrender any right or power
herein reserved to or conferred upon the Issuer which are not contrary to or inconsistent with
this Indenture as then in effect;
(d)permit the appointment of a co-trustee under this Indenture;
(e) modify, alter, supplement, or amend this Indenture in such manner as shall permit the
qualification of this Indenture, if required, under the Trust Indenture Act of 1939 or the
Securities Act of 1933, as from time to time amended, or any similar federal statute hereafter
in effect; and
(f) make any other change herein that is determined by the Trustee to be not materially
adverse to the interests of the Bondholders and which does not involve a change described in
Section 10.02 requiring consents of specific Bondholders.
The Trustee shall not be obligated to enter into any such supplemental indenture which
adversely affects the Trustee's own rights, duties, or immunities under this Indenture.
Section 10.02. Supplemental Indentures Requiring Bondholders' Consent. The Issuer
and the Trustee, at any time and from time to time, may execute and deliver a supplemental
indenture for the purpose of making any modification or amendment to this Indenture, but only
with the written consent, given as provided in Section 10.03, of the holders of at least two-thirds
in aggregate principal amount of the Bonds Outstanding at the time such consent is given, and in
case less than all of the Bonds then Outstanding are affected by the modification or amendment,
of the holders of at least two-thirds in aggregate principal amount of the Bonds so affected and
Outstanding at the time such consent is given; provided, however, that if such modification or
amendment will, by its terms, not take effect so long as any Bonds so affected remain
Outstanding, the consent of the holders of such Bonds shall not be required and such Bonds shall
not be deemed to be Outstanding for the purpose of any calculation of Outstanding Bonds under
this Section. Notwithstanding the foregoing, no modification or amendment contained in any
such supplemental indenture shall permit any of the following, without the consent of each
Bondholder whose rights are affected thereby: (a) a change in the terms of stated maturity or
redemption of any Bond or of any installment of interest thereon; (b) a reduction in the principal
amount of any Bond or in the rate of interest thereon or a change in the coin or currency in which
such Bond is payable; (c) the creation of a lien on or a pledge of any part of the Trust Estate, or
32
the money or assets pledged under this Indenture or any part thereof; (d) the granting of a
preference or priority of any Bond or Bonds over any other Bond or Bonds; (e) a reduction in the
aggregate principal amount of Bonds of which the consent of the Bondholders is required to
effect any such modification or amendment; or (f) a change in the provisions of Section 7.15.
Notwithstanding the foregoing, the holder of any Bond may extend the time for payment of the
principal of or interest on such Bond;provided, however, that upon the occurrence of an Event of
Default, funds available hereunder for the payment of the principal of and interest on the Bonds
shall not be applied to any payment so extended until all principal and interest payments which
have not been extended have first been paid in full. Notice of any supplemental indenture
executed pursuant to this Section shall be given to the Bondholders promptly following the
execution thereof by the Trustee.
Section 10.03. Consents of Bondholders and Opinions. Each supplemental indenture
executed and delivered pursuant to the provisions of Section 10.02 shall take effect only when
and as provided in this Section. A copy of such supplemental indenture (or brief summary
thereof or reference thereto in form approved by the Trustee), together with a request to
Bondholders for their consent thereto in form satisfactory to the Trustee, shall be sent by the
Trustee or the Company to Bondholders, at the expense of the Company, by first class mail,
postage prepaid, provided that a failure to mail such request shall not affect the validity of the
supplemental indenture when consented to as provided hereinafter. Such supplemental indenture
shall not be effective unless and until there shall have been filed with the Trustee (a) the written
consents of Bondholders of the percentage of Bonds specified in Section 10.02 given as provided
in Section 11.10 and (b) the opinion of Counsel described in Section 10.06. Any such consent
shall be binding upon the Bondholder giving such consent and upon any subsequent holder of
such Bonds and of any Bonds issued in exchange therefor or in lieu thereof(whether or not such
subsequent Bondholder has notice thereof), unless such consent is revoked in writing by the
Bondholder giving such consent or a subsequent holder of such Bonds by filing such revocation
with the Trustee prior to the date the Trustee receives the material required in subsections (a) and
(b) of this Section.
Section 10.04. Exclusion of Certain Bonds. Bonds owned or held by or for the account of
the Issuer, the Company, or an Affiliate shall not be deemed Outstanding for the purpose of
consent or other action or any calculation of Outstanding Bonds provided for in this Article, and
the Issuer, the Company, or an Affiliate shall not be entitled with respect to such Bonds to give
any consent or take any other action provided for in this Article or elsewhere in this Indenture.
At the time of any consent or other action taken under this Article or elsewhere in this Indenture,
the Issuer, the Company, or an Affiliate shall furnish the Trustee an Officer's Certificate of the
Issuer,the Company, or an Affiliate, upon which the Trustee may rely, describing all Bonds so to
be excluded.
Section 10.05. Notation on Bonds. Bonds authenticated and delivered after the effective date
of any action taken as provided in this Article may, and, if the Issuer or the Company so
determines, shall bear a notation by endorsement or otherwise in form approved by the Trustee
as to such action, and in that case upon demand of the holder of any Outstanding Bond at such
effective date and presentation of such Bond for the purpose at the Office of the Trustee, or upon
any transfer of any Bond Outstanding at such effective date, suitable notation shall be made on
such Bond or upon any Bond issued upon any such transfer by the Trustee as to any such action.
33
If the Issuer shall so determine, new Bonds so modified as in the opinion of the Trustee and the
Issuer to conform to such action shall be prepared, authenticated, and delivered, and upon
demand of the holder of any Bond then Outstanding shall be exchanged, without cost to such
Bondholder for Bonds then Outstanding, upon surrender of such Bonds for Bonds of an equal
aggregate principal amount and of the same Series, maturity, and interest rate, in any Authorized
Denomination.
Section 10.06. Delivery of Counsel's Opinion with Respect to Supplemental Indentures.
Subject to the provisions of Section 8.01, the Trustee in executing or accepting the additional
trusts permitted by this Article or the modifications thereby of the trusts created by this Indenture
may rely, and shall be fully protected in relying, on an opinion of Counsel acceptable to it stating
that (a) the execution of such supplemental indenture is authorized or permitted by this Indenture
and (b) all conditions precedent to the execution and delivery of such supplemental indenture
have been complied with.
Section 10.07. Amendments to Lease Documents Not Requiring Bondholders' Consent.
Without the consent of or notice to the Bondholders, the Issuer and the Trustee may consent to
any amendment, change, or modification of the Lease Documents as may be required (a) by the
provisions of the Agreement or this Indenture, (b) for the purpose of curing any ambiguity,
inconsistency, defect, or omission in the Lease Documents, (c) in connection with an amendment
or to effect any purpose for which there could be an amendment of this Indenture pursuant to
Section 10.01, or (d) in connection with any other change therein which is not to the material
prejudice of the Trustee or the Bondholders.
Section 10.08. Amendments to Lease Documents Requiring Bondholders' Consent.
Except for the amendments, changes, or modifications contemplated in Section 10.07, neither the
Issuer nor the Trustee shall consent to:
(a) any amendment, change, or modification of the Lease Documents which would change
the amount or time as of which Lease Payments are required to be paid, without the giving of
notice as provided in Section 10.03 of the proposed amendment, change, or modification and
receipt of the written consent thereto of the Bondholders of all of the then Outstanding Bonds; or
(b) any other amendment, change, or modification of the Lease Documents without the
giving of notice as provided in Section 10.03 of the proposed amendment, change, or
modification and receipt of the written consent thereto of the Bondholders of not less than two-
thirds in aggregate principal amount of the Bonds then Outstanding.
The notices to and consent of the Bondholders to any amendments shall be obtained as
provided in Section 10.03 with respect to supplemental indentures. Notice of any amendment
pursuant to this Section shall be given to the Bondholders promptly following the execution
thereof.
Section 10.09. Delivery of Opinion of Counsel with Respect to Amendments. In
consenting to an amendment, change, or modification to the Lease Documents permitted by this
Article, the Issuer and the Trustee shall be entitled to receive, and (subject, with respect to the
Trustee, to Section 8.01) shall be fully protected in relying upon, an opinion of Counsel
34
acceptable to each of them stating that (a) the execution of such consent, amendment, change, or
modification is authorized or permitted by this Indenture and the applicable Lease Document and
(b) all conditions precedent to the execution and delivery of such consent, amendment, change,
or modification have been complied with.
Section 10.10 Consent to Supplemental Indentures and Amendments. No supplemental
indenture or amendment, change, or modification to the Lease Documents under this Article
shall become effective unless and until the Company shall have consented to the execution and
delivery thereof.
Section 10.11. Effect of Supplemental Indentures. Upon the execution and delivery of any
supplemental indenture under this Article, this Indenture shall be modified in accordance
therewith, and such supplemental indenture shall form a part of this Indenture for all purposes;
and every holder of any Bond theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Limitation of Rights. With the exception of rights herein expressly conferred,
nothing expressed or mentioned in or to be implied from this Indenture or the Bonds is intended
or shall be construed to give to any Person other than the parties hereto, the Company, and the
Bondholders any legal or equitable right, remedy, or claim under or in respect to this Indenture.
This Indenture and all of the covenants, conditions, and provisions hereof are intended to be and
are for the sole and exclusive benefit of the parties hereto, the Bondholders, and the Company as
herein provided. Notwithstanding the above, the rights of the Company hereunder shall be
construed in all cases as junior to the rights of the Bondholders.
Section 11.02. Severability. If any term or provision of this Indenture or the Bonds shall be
invalid, inoperative, or unenforceable as applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions, or in all cases because it conflicts with any other provision or
provisions hereof or any constitution or statute or rule of public policy, or for any other reason,
such circumstances shall not have the effect of rendering the provision in question inoperative or
unenforceable in any other case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or unenforceable to any extent whatever, and
such term and provision shall be valid and enforced to the fullest extent permitted by law.
Section 11.03. Notices. Except as otherwise provided herein, all notices, certificates or other
communications hereunder shall be in writing and shall be deemed given upon receipt, by hand
delivery, mail, overnight delivery, telecopy or other electronic means addressed as follows:
Company: BASF Corporation
100 Park Ave
Florham Park NJ, 07932
35
With a copy to:
Rose Law Firm,a Professional Association
120 East Fourth Street
Little Rock,AR 72201
Issuer: City of West Memphis, Arkansas
P.O. Box 1728
West Memphis, AR 72303
Trustee: Regions Bank
P.O. Box 2527
Mobile, AL 36622
Attention: Corporate Trust Department
In case by reason of the suspension of regular mail service, it shall be impracticable to give
notice by first class mail of any event to any Bondholder, the Issuer, or the Company when such
notice is required to be given pursuant to any provisions of this Indenture, then any manner of
giving such notice as shall be satisfactory to the Trustee shall be deemed to be sufficient giving
of such notice. The Issuer, the Trustee, and the Company may, by notice pursuant to this Section,
designate any different addresses to which subsequent notices, certificates, or other
communications shall be sent. A duplicate copy of each notice, approval, consent, request,
complaint, demand, or other communication given hereunder by the Issuer, the Company, or the
Trustee to any one of the others shall also be given to the others. For purposes of this Section and
the definition of Immediate Notice, "electronic means" shall mean telecopy or facsimile
transmission or other similar electronic means of communication which produces evidence of
transmission.
Notwithstanding the foregoing, notices to the Trustee shall be effective only upon receipt.
Section 11.04. Holidays. If the date for making any payment or the last date for performance
of any act or the exercising of any right, as provided in this Indenture, is not a Business Day,
such payment may be made or act performed or right exercised on the next succeeding Business
Day with the same force and effect as if done on the nominal date provided in this Indenture and
no interest shall accrue on the payment so deferred during the intervening period.
Section 11.05. Counterparts. This Indenture may be executed in any number of
counterparts, each of which when so executed and delivered shall constitute an original, but all
of which, when taken together, shall constitute but one and the same instrument, and shall
become effective when copies hereof shall be delivered to each of the parties hereto, which
copies,when taken together, bear the signatures of each of the parties hereto.
Section 11.06. Applicable Law. This Indenture shall be governed in all respects including
validity, interpretation, and effect by, and shall be enforceable in accordance with, the laws of
the United States of America and of the State.
Section 11.07. Limitation of Liability of Officials of the Issuer. Notwithstanding anything
to the contrary contained herein, for payment of the obligations of the Issuer under this Indenture
36
and the Bonds, the Trustee, the Bondholders, and any other party entitled to seek payment from
the Issuer under or to enforce this Indenture and the Bonds will be entitled to look solely to
amounts on deposit with and held by the Trustee for the benefit of the Bondholders, subject to
the terms of this Indenture, the Project, and such collateral, if any, as may now or hereafter be
given to secure the payment of the obligations of the Issuer under this Indenture and the Bonds,
and no other property or assets of the Issuer or any officer or director of the Issuer shall be
subject to levy, execution, or other enforcement procedure for the satisfaction of the remedies
hereunder, or for any payment required to be made under this Indenture and the Bonds, or for the
performance of any of the covenants or warranties contained herein.
THE BONDS AND THE INTEREST THEREON ARE NOT GENERAL OBLIGATIONS
OF THE ISSUER OR A DEBT, LIABILITY, OR OBLIGATION OF THE STATE OF
ARKANSAS OR OF ANY POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING
OF ANY CONSTITUTIONAL OR STATUTORY LIMITATION, OR A PLEDGE OF THE
FAITH AND CREDIT OF THE ISSUER, THE STATE OF ARKANSAS, OR ANY
POLITICAL SUBDIVISION THEREOF, BUT ARE PAYABLE SOLELY FROM PAYMENTS
DUE UNDER THE AGREEMENT AND FROM OTHER AMOUNTS AS DESCRIBED IN
THIS INDENTURE. NO BONDHOLDER SHALL HAVE THE RIGHT TO COMPEL THE
EXERCISE OF THE TAXING POWER OF THE ISSUER, THE STATE OF ARKANSAS, OR
ANY POLITICAL SUBDIVISION THEREOF FOR THE PAYMENT OF THE PRINCIPAL
OF OR INTEREST ON THE BONDS.
Section 11.08. Successors and Assigns. All the covenants, promises, and agreements in this
Indenture contained by or on behalf of the Issuer, or by or on behalf of the Trustee, shall bind
and inure to the benefit of their respective successors and assigns, whether so expressed or not.
Section 11.09. Form of Documents Delivered to Trustee. In any case where several matters
are required to be certified by, or covered by an opinion of, any specified person, it is not
necessary that all such matters be certified by, or covered by the opinion of, only one such
person, or that they be so certified or covered by only one document, but one such person may
certify or give an opinion with respect to some matters and one or more other such persons as to
other matters, and any such person may certify or give an opinion as to such matters in one or
several documents.
Any Officer's Certificate of the Issuer or the Company may be based, insofar as it relates to
legal matters, upon a certificate or opinion of, or representations by, Counsel, unless such official
or officer knows, or in the exercise of reasonable care should know, that the certificate or opinion
or representations with respect to the matters upon which his or her certificate or opinion is based
are erroneous. Any opinion of Counsel may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an official or officials of the Issuer or an officer
or officers of the Company stating that the information with respect to such factual matters is in
the possession of the Issuer or the Company, unless such Counsel knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations with respect to
such matters are erroneous.
37
Where any person is required to make, give, or execute two or more applications, requests,
consents, certificates, statements, opinions, or other instruments under this Indenture, they may,
but need not,be consolidated and form one instrument.
Section 11.10. Consent of Holders. Any consent, request, direction, approval, objection, or
other instrument required by this Indenture to be signed and executed by the Bondholders may
be in any number of concurrent writings of similar tenor and must be signed or executed by such
Bondholders in person or by agent appointed in writing. Proof of the execution of any such
consent, request, direction, approval, objection, or other instrument or of the writing appointing
any such agent and of the ownership of Bonds, if made in the following manner, shall be
sufficient for any of the purposes of this Indenture, and shall be conclusive in favor of the
Trustee with regard to any action taken by it under such request or other instrument, namely:
(a) The fact and date of the execution by any person of any such writing may be proved by
the certificate of any officer in any jurisdiction who by law has power to take acknowledgments
within such jurisdiction that the person signing such writing acknowledged the execution thereof,
or by an affidavit of any witness to such execution.
(b) The Trustee may establish a Record Date for the purpose of identifying Bondholders
entitled to issue any such consent, request, direction, approval, or instrument.
[The balance of this page left blank intentionally.]
38
IN WITNESS WHEREOF, the Issuer has caused this Indenture to be signed in its name by
its Mayor and attested by its City Clerk, and the Trustee, in acceptance of the trusts created
hereunder, has caused this Indenture to be signed in its corporate name by its officer thereunder
duly authorized all as of the day and year first above written.
CITY OF WEST MEMPHIS, ARKANSAS
By:
William H. Johnson, Mayor
ATTEST:
Phillip Para, City Clerk
Signature Pages of the Indenture
Regions Bank, as Trustee
By:
Barbara M. Hory, Vice President and
Corporate Trust Officer
Signature Pages of the Indenture
mow
ACKNOWLEDGMENT
STATE OF ARKANSAS )
) ss
COUNTY OF CRITTENDEN )
On this day of December, 2014, before me, a Notary Public duly commissioned, qualified
and acting, within and for the County and State aforesaid, appeared in person the within named
William H. Johnson and Phillip Para, Mayorand
ofto dCity Arkansas, pe ersonally known,spectively, of the who stated
ty of West
Memphis, Arkansas, a municipality of the
that they were duly authorized in their respective capacities to execute the foregoing instrument for
and in the name of the City, and further stated and acknowledged that they had signed, executed,
and delivered the foregoing instrument for the consideration, uses, and purposes therein mentioned
and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on the date first
above written.
Notary Public
My commission expires:
Acknowledgment Pages of the Indenture
ACKNOWLEDGMENT
STATE OF ALABAMA )
) ss
COUNTY OF )
On this day of December, 2014, before me, a Notary Public duly commissioned, qualified
and acting, within and for the County and State aforesaid, appeared in person the within named
Barbara M. Hory, Vice President and Corporate Trust Officer of Regions Bank, to me personally
known, who stated that she was duly authorized in her capacity to execute the foregoing instrument
for and in the name and behalf of the bank, and further stated and acknowledged that she had so
signed, executed, and delivered the foregoing instrument for the consideration, uses, and purposes
therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal on the date first
above written.
Notary Public
My commission expires:
Acknowledgment Pages of the Indenture
APPENDIX A
FORM OF BOND
UNITED STATES OF AMERICA
STATE OF ARKANSAS
R- $
CITY OF WEST MEMPHIS, ARKANSAS
TAXABLE INDUSTRIAL DEVELOPMENT REVENUE BOND
(BASF CORPORATION PROJECT), SERIES 2014
MATURITY DATE: December 22, 2034 INTEREST RATE: 5.00%
PRINCIPAL AMOUNT: DOLLARS
BONDHOLDER:
DATE OF INITIAL AUTHENTICATION AND DELIVERY:
The City of West Memphis, Arkansas, a municipality of the State of Arkansas (the "Issuer"),
for value received, hereby promises to pay (but only out of the Revenues, as defined in the
Indenture hereinafter mentioned, and other assets pledged therefor as hereinafter mentioned) to
the registered owner identified above, or registered assigns, on the maturity date identified above
(subject to any right of prior redemption hereinafter mentioned), the principal amount identified
above in lawful money of the United States of America; and to pay interest on the principal
amount hereof in like lawful money from the Date of Initial Authentication and Delivery shown
above until payment of such principal amount shall be discharged as provided in the Indenture, at
the rates per annum as set forth, payable, on January 1 and July 1 of each year (or, if such day is
not a Business Day, on the next succeeding Business Day) in each year, commencing July 1,
2015 (each, an "Interest Payment Date"). The principal hereof is payable upon presentation
hereof upon maturity, redemption, or acceleration, at the principal corporate trust office of
Regions Bank (together with any successor as paying agent under the Indenture, the "Paying
Agent"). Interest hereon is payable by check or draft mailed to the owner of Bonds (as defined in
the Indenture) hereof, or by wire transfer if the owner hereof owns at least $100,000 in aggregate
principal amount of Bonds as provided in the Indenture. Such interest is payable to the person
whose name appears on the bond registration books of the Trustee, as Bond Registrar, as the
owner hereof as of the close of business on the Business Day preceding the Interest Payment
Date, at such person's address as it appears on such registration books.
This Bond is one of a duly authorized issue of bonds of the Issuer designated as "City of
West Memphis, Arkansas Taxable Industrial Development Revenue Bonds (BASF Corporation
Project), Series 2014" (the "Bonds"), issued in the aggregate principal amount of$30,000,000,
pursuant to the provisions of an ordinance of the Issuer adopted on November 20, 2014 (the
"Authorizing Ordinance"), and pursuant to the Indenture. The Bonds are issued for the purpose
of acquiring and installing equipment and other personal property within the City of West
B-1
Memphis, Arkansas (the "Project"), and shall be as described in, and shall be issued and secured
under and pursuant to, that certain Trust Indenture, dated as of December 1, 2014 (the "Indenture"),
between the Issuer and Regions Bank, as trustee, paying agent, and registrar (herein "Trustee,"
"Paying Agent," and "Bond Registrar," respectively). The Project will be leased by the Issuer to
BASF Corporation, a Delaware corporation (the "Company"), pursuant to the terms of a Lease
Agreement dated as of December 1, 2014 (the "Agreement").
The Bonds are special obligations of the Issuer and are not a lien or charge upon the funds or
property of the Issuer, except to the extent of the aforementioned pledge and assignment.
Reference is hereby made to the Indenture and the Agreement for a description of the rights,
duties, and obligations of the Issuer, the Trustee, the Company, and the owners of the Bonds and
the terms upon which the Bonds are issued and secured.
THE BONDS ARE ISSUED PURSUANT TO AND IN FULL COMPLIANCE WITH THE
CONSTITUTION AND THE LAWS OF THE STATE OF ARKANSAS, INCLUDING
PARTICULARLY THE MUNICIPALITIES AND COUNTIES INDUSTRIAL DEVELOPMENT
REVENUE BOND LAW (ARK. CODE ANN. § 14-164-201 TO —224), AND PURSUANT TO
THE AUTHORIZING ORDINANCE AUTHORIZING THE INDENTURE. THE BONDS AND
THE INTEREST THEREON ARE NOT GENERAL OBLIGATIONS OF THE ISSUER OR A
DEBT, LIABILITY, OR OBLIGATION OF THE STATE OF ARKANSAS OR OF ANY
POLITICAL SUBDIVISION THEREOF WITHIN THE MEANING OF ANY
CONSTITUTIONAL OR STATUTORY LIMITATION, OR A PLEDGE OF THE FAITH AND
CREDIT OF THE ISSUER, THE STATE OF ARKANSAS, OR ANY POLITICAL
SUBDIVISION THEREOF, BUT ARE PAYABLE SOLELY FROM PAYMENTS DUE UNDER
THE AGREEMENT AND FROM OTHER AMOUNTS AS DESCRIBED IN THE INDENTURE.
NO BONDHOLDER SHALL HAVE THE RIGHT TO COMPEL THE EXERCISE OF THE
TAXING POWER OF THE ISSUER, THE STATE OF ARKANSAS, OR ANY POLITICAL
SUBDIVISION THEREOF FOR THE PAYMENT OF THE PRINCIPAL OF OR INTEREST ON
THE BONDS.
Reference is hereby made to the Indenture and the Agreement (copies of which are on file at
the principal corporate trust office of the Trustee), and all indentures and agreements
supplemental thereto and to the Authorizing Ordinance for a description of the rights thereunder
of the Registered Owners of the Bonds of the nature and extent of the security, of the rights,
duties, and immunities of the Trustee and of the rights and obligations of the Issuer and the
Company thereunder, to all the provisions of which Indenture the Registered Owner of this
Bond, by acceptance hereof, assents and agrees.
The Bonds and the interest thereon are payable from Revenues that are available to the
Trustee pursuant to the Indenture, as and to the extent provided in the Indenture. The Bonds and
the interest thereon are secured by a pledge and assignment of said Revenues and of amounts
held in the funds and accounts established pursuant to the Indenture, subject only to the
provisions of the Indenture permitting the application thereof for the purposes and on the terms
and conditions set forth in the Indenture.
The Bonds are subject to redemption by the Issuer prior to maturity any time in whole or in
part (and if in part from maturities in such order as determined by the Issuer, and by lot within
B-2
any maturity, subject to selection by the Trustee), at a redemption price equal to 100% of the
principal amount of Bonds to be redeemed) plus interest accrued to the redemption date.
The Bonds are subject to extraordinary redemption at a redemption price equal to the
principal amount thereof redeemed plus accrued interest to the redemption date upon damage to
or condemnation of the Project, as provided in the Indenture, in whole or in part at any time.
If this Bond is called for redemption and payment is duly provided therefor as specified in
the Indenture, interest shall cease to accrue hereon from and after the date fixed for redemption.
Notice of any redemption of Bonds shall be given by mail to the Registered Owners of Bonds
to be redeemed not less than 30 days prior to the date fixed for redemption.
It is hereby certified and recited that any and all conditions, things, and acts required to exist,
to have happened, and to have been performed precedent to and in the issuance of this Bond do
exist, have happened, and have been performed in due time, form, and manner as required by the
Indenture, and by the Constitution and laws of the State, and that the amount of this Bond is not
in excess of the amount of Bonds permitted to be issued under the Indenture.
This Bond shall not be entitled to any benefit under the Indenture, or become valid or
obligatory for any purpose, until the certificate of authentication hereon shall have been signed
by the Trustee.
IN WITNESS WHEREOF, the Issuer has caused this Bond to be executed in its name and on
its behalf by the manual or facsimile signature of its Mayor and attested by the manual or
facsimile signature of its City Clerk and its corporate seal (or a facsimile thereof)to be impressed
or imprinted hereon all as of December 1, 2014.
CITY OF WEST MEMPHIS, ARKANSAS
By:
Mayor
Attest:
By:
City Clerk
(SEAL)
B-3
•
FORM OF CERTIFICATE OF AUTHENTICATION
This is one of the Bonds referred to in the within-mentioned Indenture, and is one of the
Issuer's Taxable Industrial Development Revenue Bonds (BASF Corporation Project), Series
2014.
Date of Authentication:
REGIONS BANK, as Trustee
By:
Authorized Signatory
FORM OF ASSIGNMENT
For value received the undersigned does hereby sell, assign, and transfer unto
the within-mentioned registered Bond and hereby irrevocably
constitute(s) and appoint(s) attorney, to transfer the same on the books of
the Bond Registrar with full power of substitution in the premises.
Bondholder
NOTE: The signature on this assignment
must correspond with the name as it appears
upon the face of the within Bond in every
particular, without alteration or enlargement
or any change whatever.
Dated:
Signature guaranteed:
NOTE: Signature must be guaranteed by a
member firm of the New York Stock
Exchange or a commercial bank or trust
company.
B-4