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GRDIi~ANCE NO. ~ 5~
AN ORDII~TANCE F.UT~ORIZING A L:~ASE AND AGREEI~;ENT
BY AND BETS. .EN :~: ~:, CITY OF ~~^.`'ST ~ ;•~?;-aS, ARit11,NSAS
,_ AS LESSOR Ai•:J F~,ia1~T STEEL COnPORATiON, AS .ESSEE,
IN SUBSTANTuLLl' TAE FORM AND WITH SUBSTANTIALLY
THE CONTENTS SET FORTH IN AND MADE A PART OF THIS
ORDINANCE; AUTHORIZING THE EXECUTION AND DELIVERY
OF SAID LEASE AND P.GREEMENT BY THE MAYOR AND CITY
CLERK FOR A~vD ON BEHALF OF THE CITE'; PRESCRIBING
OTHER MATT~~tS PER TAINING THERETO; AND DECLARING
AN EMERGENC4'.
BE IT ORDAItiF.D by the City Council of the City of West Memphis,
Arkansas:
Section l . :atr.~.ere be, and there is hereby, authorized the
execution and delivery of a Lease and Agreement w,~erein the City of West
Memphis, Arkansas (herein called "City") is Lessor and Flint Steel Corporation,
a corporation organized ,_•.rder and existing by virtue of the laws of the State of
Oklahoma but authorized to do uusiness in the State of Arkansas, is Lessee,
in substantially the form and wit ;substantially the contents hereinafter set
forth, and the Mayor and City Clerk be, and t,ey are '..ereby, authorized to
execute, acknowledge ar.~ deliver said Lease and Agreement for and on behalf
of the City. The form and coraents of said Lease and Agreement which are hereby
approved and which are :wade a ,part hereof shall be substantially as follows:
(Advice is hereby given that a copy of t.,e Lease and
Agreement is on fife in the office of the City Clerk,
and reference may be had thereto by ary interested
person.)
LEASE AND AGREEMENT
THIS LEASE AND AGREEMENT made this 1st day of 1Viarch
1966, by and between the CITY OF WEST MEMPHIS, ARKANSAS (called "Lessor")
and FLINT STEEL CORPORATION, a corporation organized under and existing by
virtue of the laws of the State of Oklahoma but authorized to do business in the
State of Arkansas (called "Lessee"):
~TITNESSETH:
WHEREAS Lessor is a duly organized and existing municipality,
a City of the first class, under the laws of the State of Arkansas with full and
lawful power and authority to enter into this Lease and Agreement, acting by
and through its City Council, in the public interest and for a public purpose,
in securing and developing industry, providing employment and adding to the
welfare and prosperity of the Lessor and its inhabitants, all pursuant to the
provisions of Act No. 9 of the First Extraordinary Session of the Sixty-second
General Assembly of the State of Arkansas, approved January 21, 1960, as
amended (called "Act No . 9"); and
V~THEREAS Lessee is authorized under its Articles of Incorporation
and By-Laws and under the laws of the State of its incorporation to enter into
this Lease and Agreement and to perform all covenants and obligations on its
part to be performed under and pursuant to this Lease and Agreement; and
WHEREAS Lessee is not prohibited under the terms of any out-
standing trust indentures , deeds of trust, mortgages , loan agreements or other
instruments or evidences of indebtedness of whstever nature from entering into
this Lease and Agreement and discharging and performing all covenants and
obligations on its part to be performed under and pursuant to this Lease and
Agreement and affirmatively so represents to Lessor; and
~`VHEREAS Lessor and Lessee hereby recite knowledge that Lessor
Yeas undertaken to furnish permanent financing of the Project (hereafter described)
by the issuance of Industrial Development Revenue Bonds under Act No. 9
~-
(herein called "bonds") in an amount not to exceed Two Million Dollars
($2, 000, 000), and pursuant to its undertaking to furnish said permanent financ-
ing the Lessor submitted to the electors the question of issuing the bonds under
Act No . 9 , at which election the electors approved the issuance of the bonds;
and
WHEREAS Lessor and Lessee recite knowledge that a bank or
trust company will be Trustee for the holders and registered owners of the bonds
being issued by Lessor under Act ;Jo. 9 with the original Trustee being First
National Bank of Memphis, Memphis, Tennessee, and the bonds will be secured
by a Trust Indenture executed and delivered by and between Lessor and the said
Trustee (the Trustee will be herein referred to as the "Trustee" , and the Trust
Indenture, which sets forth the nature and extent of the security for the payment
of the principal of and interest on the bonds, the rights and obligations of
Lessor, the Trustee and the holders and registered owners of the bonds , and which
will otherwise state the terms and conditions upon which the bonds are issued and
secured, will be herein sometimes referred to as the "Trust Indenture" or the
"Indenture" );
NOW, THEREFORE, for valuable consideration receipt of which
is hereby acknowledged by Lessor and Lessee, and in consideration of the
mutual benefits and covenants herein contained, Lessor and Lessee AGREE as
follows
ARTICLE I
CGNSTRTJCTION OF PRGIECT
Section 101. Lessor agrees to construct and equip the Project in accordance
with the plans , specifications , drawings , architects or engineers , contractors ,
contract prices and contracts approved by Lessor and Lessee. And, Lessor
agrees to execute such further contracts as may be necessary to accomplish
the constructing and equipping of the Project , with all contracts , contractors ,
and contract prices to be subject to the approval of the Lessee. As soon as
awarded, all contracts shall be initialed by a duly designated representative
of Lessee and an initialed copy delivered to Lessor and to Lessee, and such
initialed copies are by reference made a part of this Lease and Agreement.
Lessor shall obtain all necessary approvals from any and all
governmental agencies requisite to the constructing and equipping of the
Project, and the Project shall be constructed and equipped in compliance with
all State and local laws , ordinances and regulations applicable thereto . Upon
completion of the constructing and equipping of the Project, the Lessor will
furnish to the Lessee all required occupancy permits and authorizations from
appropriate authorities, if any be required, authorizing the occupancy and uses
of the Project for the purposes contemplated by the Lessee. The Lessor shall
not amend, modify, authorize or undertake any changes, alterations, extras or
additions to or from the plans, specifications and drawings prepared pursuant
to the Architectural Contract and any contracts entered into with contractors
and equipment and material manufacturers and suppliers uziless and until the
same shall have been submitted to Lessee, and both Lessor and Lessee shall
have agreed to and approved the said changes, alterations, extras and additions
in writing, prior to their being made. Lessor shall, however, cause to be made
and shall authorize all reasonable requests by Lessee for changes in the plans,
specifications and drawings or for additions or extra work . All requests ,
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approvals and agreements required on the part of Lessor and on the part of
Lessee shall be in writing, signed by a duly designated representative of the
party making such request, granting such approval, or entering into such agree-
ment. The Lessor and Lessee shall, concurr~~itly wi~~h the delivery of this
Lease and Agreement, notify each other of the representative of each. It is
agreed that each party may have more than one representative and may change
the representative or representatives from time to time, with each such change
to be in writing forwarded to the other party. The representative of each party
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 party hereto represented by him, and the other party to this agreement
shall be entitled to rely upon the duly designated representative as having full
authority to bind the party hereto represented by him .
The Lessor agrees to purchase, from time to time, machinery,
equipment and personal property to be installed in the Project as shall be
specified in the plans, specifications and drawings hereinabove referred to or
as shall be requested and designated in writing by the duly designated repre-
sentative of Lessee. Lessor shall see that there is in full force and effect,
from the date of purchase of any such machinery, equipment and personal
property, or from the date the risk of loss, under governing substantive law,
is on the Lessor as purchaser if such date be after the date of purchase, and
until the insurance required to be carried by Lessee under the provisions of
this Lease and Agreement shall be placed in full force and effect, the usual
fire and extended coverage casualty insurance, with the insurance to be in
the amount of the full insurable value of the machinery, equipment and personal
property involved, and with the premiums thereon to be considered part of the
Project costs (hereafter defined), and the Trustee shall be made a party insured
as its interest may appear.
Section 102. Lessor and Lessee agree that the necessary steps
shall be taken to see that there is in full force and effect at all times during
the constructing and equipping of the Project the usual insurance coverage
applicable to similar construction projects, all of which shall be subject to
the prior written approval as to amount and companies by the Lessee and which
shall be made payable to the Lessor and the Lessee as their interests may appear
and with a standard mortgagee payment clause in the case of the builder's risk
insurance payable to the Trustee as its interest may appear. The premiums
thereon shall be considered part of the Project costs (hereafter defined) .
Section 103. Costs incurred by Lessor in discharging its obliga-
tions under Section 101 hereof shall be referred to as "Project costs" and it is
agreed that the Project costs will rvt exceed the sum of Two Million Dollars
($ 2 , 000, 000) , or the principal ai:~ount of all Series of bonds actually delivered
by Lessor if less than $2, 000, 000 is ultimately delivered, plus any income or
other gains from investments of moneys in the Construction Fund (hereafter
referred to) and less any losses on investments of moneys in the Construction
Fund, and that if the Project costs should exceed said amount, the Project
will be completed, and the Lessee hereby agrees to pay the entire amount of
ary such excess . Project costs, as that term is used in this Lease and Agree-
ment, shall include all costs and expenses of every nature incurred in the
completion of the Protect, all costs and expenses incidental thereto, all costs
and expenses incurred in connection with the issuance of the bonds, and the
amount necessary to pay interest on the bonds until lease rentals are available
hereunder in a sufficient amount therefor, including, wit=~~.out limitation, the
following
(1) All amountN paid by Lessor in discharge of its obligations
under Section 101 hereof, including without limitation, all amounts paid under
all Architectural, Engineering, Construction or other Contracts;
(2) All amounts paid by Lessor for extras, changes or additions
agreed to by Lessor and Lessee in accordance with provisions of Section 101;
`~IrrM~
(3) All payments incurred in acquiring machinery, equipment and
personal property and paying premiums for insurance coverage in connection
therewith as specified in Section 101 hereof;
(4) All costs and expenses incurred in installing machinery,
equipment and personal property ir_ the Project;
(S) All amounts ne~,essary to reimburse Lessee for any work,
materials, or expenditures made h4 T,essee pertaining to or in connection with
the Project and its operation;
(6) Any cost or expense, not otherwise provided for herein,
incurred by Lessor under and pursuant to the provisions of this Article I pertain-
ing to the constructing and equipping of the Project;
(7) Interest on bonds until lease rentals are available under the
provisions of the Lease and Agreement in sufficient amounts therefor;
(8) All costs and expenses incurred by Lessor in the issuance
of the bonds except those, if any, paid by the purchasers of the bonds;
(9) The cost of any policy or policies of title insurance, if
requested by Lessee, and the cost of any performance bonds and insurance
procured in connection with the constructing and equipping of the Project;
(10) Such other and additional fees , costs , expenses and
expenditures of whatever nature incidental or pertaining to the Project, includ-
ing Trustee' s fees and expenses and Paying Agent's fees, as may from time to
time be agreed upon in writing by Lessor and Lessee in accordance with the
provisions of Section 101 as constituting part of the Project costs .
It is understood that the electors of Lessor have authorized the
issuance of not to exceed $2,000,000 in principal amount of bonds and that
the initial issue is to be designated "Series A" and is to be in the principal
amount of $1, 5'00, OOQ,which will leave the balance of the total authorized
issue to be issued in series from time to time in the future . It is agreed that
in the case of the delivery of each series there will be deducted from the total
sale proceeds (being the purchase price paid by the purchaser plus accrued
interest from the date of the bonds to the date of delivery) the amount necessary
to cover interest requirements, if any amount be necessary, until lease rentals
are available hereunder in sufficient amounts therefor and that the amount so
deducted will be deposited in a Bond Fund (herein someti..*r.es ra31Qd "Act No. 9
Bond Fund" or simply "Bond Fund") to be established pursuant :o the provisions
of the Trust Indenture securing the bonds , and that the remainder of the total
sale proceeds in the case of the delivery of each series shall be deposited in
a Construction Fund to be established pursuant to the provisions of the Trust
Indenture . Lessor agrees that it vr~ill execute and deliver from time to time,
pursuant to the written reques*_ c;{ the Lessee, additional series of bonds of
said total authorized principal amount, and Lessee shall have and hereby
assumes full responsibility for finding purchasers for said additional bonds .
Said additional bonds shall be issued in accordance with and pursuant to the
conditions set forth in the Trust Indenture pertaining thereto.
It shall be provided in the Trust Indenture (and Lessor agrees
to cause appropriate provisions to be made therein) that the moneys in the
Construction Fund shall be expended solely for the payment of the Project
costs . Disbursements shall be made from the Construction Fund in accordance
with the provisions of the Trust Indenture pertaining thereto. Any amount re-
maining in the Construction Fund after payment of all Project costs shall be
transferred to and deposited in the Bond Fund, and the Lessee shall be credited
with said amount against Lessee's basic rent obligations set forth in Section
203 of this Lease and Agreement, with such credit to be against the basic rent
obligations as the same become due and payable under Section 203, beginning
with the first installment of basic rent due thereafter, and the Lessee shall not
be required to pay any basic rent thereafter, except when and to the extent
basic rent has become due and payable in excess of such credit.
Section 104. Lessee and its agents , servants , employees and
representatives shall have free access to the Project during the construction
thereof, and Lessee agrees that, immediately upon completion of the construct-
ing and equipping of the Project, it will enter into full possession of and
occupy the same under and pursuant to the terms of this Lease and Agreement.
Lessee and its agents, servants, employees and representatives shall have
the right to store and install machinery, equipment, fixtures, supplies and
personal property during construction so long as such activities on the part
of Lessee do not unreasonably interfere with work under construction and
equipment contracts . Lessor covenants that the Lessee, upon paying the
rentals and performing all covenants , obligations and agreements on the part
of Lessee to be performed under this Lease and Agreement, shall and may
peaceably and quietly have, hold and enjoy the leased premises for the term
of this Lease and Agreement.
Section 105. A. Lessor covenants that it will take such action
and institute such proceedings as shall be necessary 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, with all expenses incurred by Lessor in
connection with the performance of its obligations under this Section 105 to be
considered part of the Project costs as defined in Section 103, and Lessor
agrees that the Lessee may, from time to time, in its own name, or in the
name of Lessor, take such action as may be necessary or advisable, as
determined by Lessee, to Insure the construction of the Project in accordance
with the terms of the construction contract and the installation of machinery
and equipment in accordance with any applicable contract pertaining thereto,
to insure the peaceable and quiet enjoyment of the leased premises for the
term of the Lease and Agreement, and to insure the performance by Lessor
of all covenants and obligations of Lessor under this Lease and Agreement,
with all costs and expenses incurred by Lessee in connection therewith to be
considered as part of the Project costs as defined in Section 103.
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B. Lessor will assign and extend to Lessee all vendors'
warranties received by Lessor in connection with machinery and equipment
purchased by Lessor for the Project, together with any warranties given by
contractors, manufacturers or service organizations who perform construction
work or install any machinery and equipment on the leased premises . If re-
quested, Lessor will execute and deliver instruments of assignment to Lessee
to accomplish the foregoing.
ARTICLE II
TERM OF LEASE AND RENTAL
Section 201. Lessor, for and in consideration of the rents,
covenants and agreements herein reserved, mentioned and contained, on the
part of Lessee to be paid, kept and performed, agrees to and does hereby lease
to Lessee, and Lessee agrees to, and does hereby, lease, take and hire from
Lessor, subject to the terms, conditions and provisions of this Lease and
Agreement expressed, the following:
(a) The lands and rights of way situated in Crittenden County,
Arkansas, described in Exhibit A attached hereto and made a part hereof;
(b) The buildings , structures , improvements and facilities
erected or at any time hereafter erected and installed on the lands and rights
of way described in (a) above;
(c) All accretions, easements, rights of way and appurtenances
belonging or in any wise appertaining to the lands and improvements described
in (a) and (b) above; and
(d) All machinery, equipment and other personal property of
every kind and nature whatever acquired by Lessor and paid for out of the
Construction Fund and placed on or in the lands and improvements described
in (a) and (b) above, or elsewhere, including, without limitation, all replace-
ments and substitutions which become the property of the Lessor pursuant to
the provisions of this Lease and Agreement. All such machinery, equipment and
personal property shall be identified in a ledger, one copy of which shall be
filed with the Trustee and one copy maintained by Lessee on the leased
premises . In this regard, all machinery, equipment and other personal property
of whatever nature situated on and in the lands and improvements described in
(a) and (b) above shall be conclusively deemed to be owned by Lessor rather
than Lessee, unless purchased and placed by Lessee and marked by an
appropriate tag or other device as being the property of the Lessee. The said
machinery, equipment and other personal property leased hereby shall be
referred to herein as "Lessor's machinery and equipment" .
The properties described in (a), (b), (c) and (d) above are herein
collectively referred to as the "leaped premises" .
TO HAVE AND TO HOLD the leased premises unto the Lessee for the
term of this Lease and Agreement as hereafter set forth.
Section 202. The term of this Lease and Agreement shall commence
March 1, 1966, and shall end at midnight on March 1, 1986.
Section 203. (a) Basic Rent.
(1) Subject to the credit provided for in Section 103 and Section 1301,
Lessee covenants to pay to Lessor, in the manner hereafter provided in Section 204,
basic annual rent as follows , payable semiannually on the dates and in the
amounts indicated:
February 20, 1967 $ 79, 656.25
August 20, 1967 33,643.75
February 20, 1968 83,643.75
August 20,
February 20, 1969 1968 32,518.75
82,518.75
August 20, 1969 31, 268.75
February 20, 1970 86, 268.75
August 20, 1970 29,893.75
February 20, 1971 84, 893.75
August 20, 1971 28,518.75
February 20, 1972 88, 518.75
August 20, 1972 27,018.75
February 20, 1973 87,018.75
August 20, 1973 25,518.75
February 20, 1974 90, 518.75
August 20, 1974 23, 893.75
February 20, 1975 88, 893.75
August 20, 1975 22,268.75
February 20, 1976 92,268.75
August 20, 1976 20, 518.75
February 20, 1977 95, 518.75
August 20, 1977 18, 925.00
February 20, 1978 98,925.00
August 20, 1978 17, 225.00
February 20, 1979 97,225.00
August 20, 1979 15, 525.00
February 20, 1980 100,525.00
August 20, 1980 13, 612.50
February 20, 1981 103, 612.50
August 20, 1981 11,587.50
February 20, 1982 106, 587.50
August 20, 1982 9,450.00
February 20, 1983 109, 450.00
August 20, 1983 7, 200.00
February 20, 1984 112, 200.00
August 20, 1984 4,837.50
February 20, 1985 109, 837.50
August 20, 1985 2,475.00
February 20, 1986 112,475.00
~r-~
In the event a basic rent pay~rient date falls on a non-
banking day of the Trustee and Paying Agent, the basic rent payment involved
shall not be due and payable until the time of opening for business on the next
succeeding day thereafter that is a banking day.
It is understood that of the $2, 000, 000 in principal amount of
bonds of the City authorized for the purpose of financing the Protect costs as
aforesaid, only $l, 500,000 in principal amount are being initially issued. It
is hereby agreed that when additional bonds of said total authorized principal
amount are issued and delivered, a supplemental Lease and Agreement will be
executed and delivered by and be*°~~een the Lessor and Lessee increasing the
basic rent above set forth in the amount necessary to provide for the debt
service requirements on the bonds additionally issued. It is further agreed
that the execution and delivery of said Supplemental Lease and Agreement or
Agreements, as aforesaid, by the officials of the Lessor and the officers of
the Lessee is expressly authorized, and additional action to authorize the
same on the part of the governing body of the Lessor or on the part of the
Board of Directors of the Lessee is not necessary.
(2) If, during any year while any of the bonds shall be out-
standing, the above specified basic rent shall be insufficient to pay the princi-
pal of and interest on the bonds as the same become due, the amount of the
insufficiency shall be paid by the Lessee as additional basic rent. If at any
time the amount in the Bond Fund, hereinabove referred to and hereafter des-
cribed in Section 204, is sufficient to pay in full the principal of (including
redemption premiums, if any), interest on and the Trustee's and Paying Agent's
fees in connection with alt of the outstanding bonds of the Lessor, either at
maturity or on earlier redemption, then no further basic rent shall be payable
hereunder, and any funds representing payment of basic rent which are then
held in the Bond Fund and are in excess of the amount required to pay in full
the principal of (including redemption premiums , if any) , interest on and the
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Trustee's and Paying Agent's fees in connection with all outstanding bonds of
the Lessor, either at maturity or on earlier redemption, shall be refunded to
Lessee as excess rent.
""" (b) Additional Rent. During the term hereof, Lessee shall pay
as additional rent the fees and expenses of the Paying Agent for the payment of
the principal of and interest on the bonds and the expenses and charges payable
to the Trustee, as provided in the Trust Indenture, and all impositions (as
defined in Section 301), expenses, liabilities, obligations and other payments
of whatever nature which Lessee has agreed to pay or assume under the pro-
visions of this Lease and Agreement. If at any time any amounts paid by
Lessee as additional rent hereunder are or become in excess of the amounts
required for the purpose for which they were paid, such excess amounts shall
be refunded to the Lessee.
~r. (c) So long as any of the bonds, or coupons relating thereto,
shall be outstanding and unpaid, or until payment thereof has been duly pro-
vided for, the basic rent and the additional rent shall be certainly payable on
the dates or at the times specified without notice or demand, 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:
(1) The unavailability of the leased premises for use and
occupancy by the Lessee at any time for reason of the failure to complete the
Project by any particular time or at all or by reason or any other contingency,
N'r
~+ occurrency or circumstance whatsoever;
(2) Damage to or destruction of the leased premises, or any
part thereof (except in the event Lessee exercises the option to purchase and
pays the purchase price specified in Section 1303 hereof);
(3) Legal curtailment of Lessee's use and/or occupancy of the
leased premises, or any part thereof;
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(4) Change in Lessor's legal organization or status;
(5) The taking of title to or the temporary use of the whole or
any part of the leased premises by condemnation as provided in Article XIV
hereof (except in the case cf t':e taking of title to all or substantially all and
the payment by Lessee of the additional rent in the amount that the total bond
redemption expense exceeds the net amount awarded as damages plus the funds
in the Bond Fund, as specified in Section 1401A, and except in the event
Lessee exercises the option to purchase and pays the purchase price specified
in Section 1403);
(6) Any assignment under the provisions of Article XV, including,
without limitation, an assignment as part of a transaction involving merger,
consolidation or sale of all or substantially all of Lessee's assets, as provided
in Section 1501; subject, however, to the provisions of Section 1501 that
performance by an assignee or sub-lessee shall be considered as performance
pro tanto by Lessee;
(7) Any termination of this Lease and Agreement for any reason
whatsoever, including, without limitation, termination under Article XVIII;
subject, however, to the provisions of Article XVIII;
(8) Failure of consideration or commercial frustration of
purpose;
(9) Any change in the tax or other laws of the United States of
America or of the State of Arkansas; or
(10) Any default of the Lessor under this Lease and Agreement,
or any other fault or failure of the Lessor whatsoever.
Lessee covenants that it will not enter into any contract, inden-
ture or agreement of any nature whatsoever which shall in any way limit, restrict
or prevent Lessee from performing any of its obligations under this Lease and
Agreement .
Section 204. Payments of basic rent shall be made to Lessor by
Lessee remitting the same directly to the Trustee, for the account of Lessor, and
shall be deposited by the Trustee in the trust account provided for in the Trust
Indenture designated "West 1V~a~nphis , Arkansas 1966 Industrial Development
Bond Retirement Fund -Flint Project" (sometimes called the "Bond Fund") , to
be used by the Trustee as provided in the Trust Indenture. Lessor agrees at
Lessee's request to cause the Trustee to furnish to Lessee at reasonable intervals
an accounting of the funds in the Bond Fund, including, the amount of bonds
paid and outstanding. Additional rent specified in Section 203 (b) shall be paid
by Lessee remitting the same directly to the Trustee, for the account of Lessor,
in the case of the Paying Agent's fees and in the case of Trustee's expenses and
charges, and either making direct payment in the case of impositions and other
i
costs , expenses , liabilities , obligations and payments assumed and agreed to
be paid by Lessee under this Lease and Agreement, or reimbursing Lessor or
Trustee, if, pursuant to the provisions of this Lease and Agreement, Lessor or
Trustee shall make payment thereof .
L
ARTICLE III
TAXES AND ASSESSMENTS (IMPOSITIONS).
Section 301. Subject to the provisions of Section 302 , Lessee
shall pay all taxes and assessments, general and specific, if any, levied and
assessed on the leased premises during the term, and all water and sewer
charges, assessments, and other governmental charges and impositions what-
soever, foreseen and unforeseen, which if not paid when due, would impair the
lien of the Trust Indenture on the leased premises or the security of the bonds,
or encumber Lessor's title, all of which are herein called "impositions"; pro-
vided, however, that any imposition relating to a fiscal period of the taxing
authority, part of which extends beyond the term, shall be apportioned as of
the expiration of the term, Lessor shall promptly forward to Lessee any notice,
bill or other statement received by Lessor concerning any imposition. Lessee
rr.
may pay any imposition in installments if so payable by law, whether or not
interest accrues on the unpaid balance .
Section 302. The parties hereto recite knowledge of the decision
of the Supreme Court of the State of Arkansas in Wayland v. Snapp, 232 Ark. S7,
334 S.W. 2d 633, concerning the exemption of properties owned by municipal-
ities and used for securing and developing industry under and pursuant to the
provisions of Act No. 9. The Lessor covenants that it will not part with title
to the leased premises or any part thereof during the 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 leased premises .
The Lessor and the Lessee acknowledge that (a) under their and
other interpretations of present law, no part of the leased premises will be
subject to ad valorem taxation by the State of Arkansas or by any political or
taxing subdivision thereof, and (b) this factor among others, materially induced
the Lessee to enter into this Lease and Agreement. However, the Lessee will
'rr./~
pay all taxes and assessments , if any, in connection with the Project, which
may be lawfully levied or assessed upon the leased premises, when the same
shall become due, but only if and to the extent that such taxes or assessments,
if any, shall result in a lien or charge upon the leased premises; provided, how-
ever, the Lessee shall not be required to pay any such taxes or assessments so
long as the Lessee shall contest the same, unless by such action the title of
the Lessor to any part of the Project shall be materially endangered or the
Project or any part thereof shall become subject to loss or forfeiture, in which
event such taxes or assessments shall be paid prior to becoming delinquent.
The Lessor hereby agrees that it will cooperate with the Lessee fn resisting
any such taxes or assessments if and to whatever extent the Lessee may
request .
ARTICLE N
INSURANCE
Section 401. A. Lessee shall, at Lessee's sole cost and
expense, keep all improvements constituting part of the leased premises and
Lessor's machinery and equipment insured against loss or damage in accordance
with the customary insurance practices of Lessee:
(i) Against the perils of fire and the hazards ordinarily included
under standard extended coverage endorsements in amounts equal to the full
insurable value thereof within the terms of applicable policies .
(ii) Against war risk as and when a state of war or national or
public emergency exists and such insurance is obtainable from a department or
agency of the United States Government, upon reasonable terms, in the full
amount of their then full insurable value , or, if such amounts be not obtainable ,
then in the highest amount which can be so obtained.
The term "full insurable value" means such value as shall be
determined from time to time at the request of Lessor, Lessee or Trustee (but
not more frequently than once in every forty-eight (48} months) by one of the
insurers selected by Lessee.
B. At all times during the term, Lessee shall, at no cost or
expense to Lessor, maintain or cause to be maintained:
(i) General Public Liability insurance against claims for bodily
injury or death occurring upon, in or about the leased premises, with such
insurance to afford protection to the limits of not less than $200,000 in respect
of bodily injury or death to any one person and to the limit of not less than
$500, 000 in respect of any one accident; and
(ii) Property damage insurance against claims for damage or
injury to property occurring upon, in or about the leased premises with such
insurance to afford protection to the limit of not less than $100, 000 in respect
of damage to the property of any one owner .
C . The insurance required by this Article IV shall be maintained
in full force and effect at all times during the term of this LEasa and Agreement,
except:
(i) The insurance required by Section. 441 A. (ij as to improve-
ments and Lessor's machinery and equipment need not be placed in force and
effect until the completion of the construction of Shp Project, provided, however,
that in no event shall the insurance required by Section 401 A . (i) be placed into
force and effect later than the expiration of the builder's risk insurance carried
pursuant to the provisions of the Construction Contract or the insurance initially
taken out pursuant to the provisions of Article I hereof concerning Lessor's
machinery and equipment, with the end in view of having full insurance coverage
at all times;
(11) The insurance required by Section 401 B. need not be placed
into force and effect until Lessee occupies the Project, either upon completion
or before completion in the event Lessee undertakes to perform work or store
materials and supplies in the Project prior to completion as permitted by the
provisions of Article I hereof .
D. Copies or certificates of the insurance provided for by this
Article, each bearing notations evidencing payment of the premiums or other
evidence of payment satisfactory to the Lessor, and the Trustee, shall be
delivered by Lessee to the Lessor and the Trustee. And, in the case of expiring
policies throughout the term, copies or certificates of any new or renewal
policies , each bearing notations evidencing payment of the premiums or other
evidence of payment satisfactory to the Lessor and the Trustee, shall be
delivered by Lessee to Lessor and the Trustee.
E. Policies of insurance provided for in Section 401 A. of this
Article N shall name the Lessor and the Lessee as insureds as their respective
interests may appear, provided, however, that the Trustee shall also be named
as a party insured pursuant to a standard mortgagee clause as its interests
may appear.
F. All insurance required by this Section 401 shall be effected
with insurance companies selected by the Lessee. Lessee shall cause appro-
priate provisions to be inserted in each insurance policy making each policy
noncancellable without at least ten (10) days prior written notice to Lessor,
Lessee and the Trustee. Also, it is agreed that no claim shall be made and
no suit or action at law or in equity shall be brought by Lessor or by anyone
claiming by, through or under Lessor, against Lessee for any damage to the
improvements or Lessor's machinery and equipment covered by the insurance
provided for by this Article IV, however caused, but nothing in this sub-
section F. shall diminish Lessee's obligation to repair or rebuild as provided
in Article XIII. The Lessee shall have the sole right and responsibility to adjust
any loss with the insurer involved and to conduct any negotiations in connection
therewith .
~1r+~
ARTICLE V
REPAIRS AND MAINTENANCE OF
PREMISES AND ALTERATIONS
Section 501. Lessee shall throughout the term, at no cost
and expense to Lessor, maintain, or cause to be maintained, and at the
expiration of the term hereof subject to the provisions of Article XIX hereof,
yield up or cause to be yielded up, in good and tenantable repair, order
and condition, reasonable wear and tear excepted, the buildings and improve-
ments now or at any time erected on the lands included in the leased premises
and promptly at no cost and expense to Lessor make or cause to be made all
necessary repairs, interior and exterior, structural and non-structural, fore-
seen as well as unforeseen, to the buildings and improvements constituting
part of the leased premises .
Section 502. Lessee shall have the right from time to time to
make additions, alterations and changes in or to the improvements constituting
part of the leased premises and shall have the right to construct any improve-
ments , provided, however, that no alterations shall be made which would impair
the usefulness of the leased premises or change the character of the structures
thereon so that the same will not be appropriate and usable for manufacturing
purposes . It is understood and agreed that in the event the Lessee makes any
additions , alterations and changes in or to the improvements constituting part
of the leased premises as authorized by this Section 502, the Lessee shall be
under no obligation to restore the leased premises to their original condition
prior to such additions, alterations or changes at the expiration of the term.
Section 503. All structural improvements and alterations made
on the leased premises by or on behalf of Lessee shall immediately upon com-
pletion thereof be and become the property of the Lessor without payment
therefor by Lessor but subject to this Lease and Agreement. All machinery and
equipment, trade fixtures, movable partitions, furniture and furnishings and
other property installed at the expense of Lessee shall remain the property of
the Lessee with the right of removal, whether or not affixed and/or attached
to the real estate, and the Lessee shall, so long as it is not in default here-
under, be entitled but shall not be obligated to remove the same, or any part
thereof, during the term, or within a reasonable time thereafter, but Lessee
shall at its own cost and expense repair any and all damage to the leased
premises resulting from or caused by their removal therefrom .
Section 504. All property of any kind which may be on the
leased premises (whether belonging to the Lessor, Lessee or to any third
person) shall be at the sole risk of Lessee and those claiming by, through or
under Lessee or to said third persons for any injury, loss or damage to any
person or property on the leased premises .
Section 505. Lessee shall throughout the term, at no cost and
expense to Lessor, maintain or cause to be maintained, and, subject to the
provisions of Articles XIX and XXIV hereof, at the expiration of the term hereof
yield up, or cause to be yielded up, in good repair, order and condition,
reasonable wear and tear excepted, Lessor's machinery and equipment.
ARTICLE VI
USE OF PREMISES -COMPLIANCE WITH ORDERS , ETC .
Section 601. Subject to the following provisions of this
Section 601, Lessor and Lessee agree that Lessee may use the premises for
any lawful purpose. Lessee shall during the term promptly comply with all
valid statutes , laws , ordinances , orders , judgments , decrees , regulations ,
directions and requirements of all federal, state, local and other governments
or governmental authorities , now or hereafter applicable to the leased premises
or to the adjoining public ways, as to the manner of use or the condition of the
leased premises or of adjoining public ways . Lessee shall, however, have
the right to contest any of the foregoing, and if compliance therewith may
legally be held in abeyance during such contest without incidence of any liens
on the leased premises, Lessee may postpone compliance until final determina-
tion of such contest, provided such contest shall be prosecuted with due dili-
gence; and even though a lien against the leased premises may be incurred by
reason of such non-compliance, Lessee may nevertheless delay compliance
therewith during contests thereof, provided Lessee, if required, furnishes
Lessor reasonably satisfactory security against any loss by reason of such
lien and effectively prevents foreclosure thereof. Lessee shall during the
term comply with the mandatory requirements , rules and regulations of all
insurers under the policies required to be carried under the provisions of this
Lease and Agreement.
Section 602. Lessor covenants that, to the full extent permitted
by law, it will not attempt to impose upon the use or occupancy of the premises
by the Lessee any laws, ordinances, rules or regulations more burdensome or
restrictive than these in effect upon the date of execution of this Lease and
Agreement .
"`/
ARTICLE VII
WORK PERFORMED BY LESSEE
Section 701. Lessee shall not do or permit others under its
+...
control to do any work on the leased premises related to any repair, rebuilding,
alteration of or addition to the improvements constituting part of the leased
premises unless Lessee shall have first procured and paid for all requisite
municipal and other governmental permits and authorizations . Lessor shall
join in the application for any such permit or authorization whenever required,
but Lessee shall indemnify and hold Lessor harmless against and from all
costs and expenses which may be thereby incurred by Lessor. All such work
shall be done in a good and workmanlike manner and in compliance with all
applicable building, zoning, and other laws, ordinances, governmental regula-
tions and requirements and in accordance with the requirements , rules and
regulations of all insurers under the policies required to be carried by the
provisions of this Lease and Agreement.
ARTICLE VIII
MECHANICS' LIEiVS
``~
Section 801. If any lien shall be filed against the interest
of Lessor, Lessee, or the Trustee in the leased premises or asserted against
any rent payable hereunder, by reason of work, labor, services or materials
supplied or claimed to have been supplied on or to the leased premises at the
request or with the permission of Lessee, or anyone claiming under Lessee,
Lessee shall, within thirty (30) days after receipt of notice of the filing
thereof or the assertion thereof against such rents , cause the same to be
discharged of record, or effectively prevent the enforcement or foreclosure
thereof against the leased premises or such rents, by contest, payment,
deposit, bond, order of Court or otherwise. Nothing contained in this Lease
and Agreement shall be construed as constituting the express or implied consent
to or permission of Lessor for the performance of any labor or services or the
furnishing of any materials that would give rise to any such lien against
Lessor's interest in the premises.
ARTICLE IX
~~
INDEMNIFICATION OF LESSOR AND TRUSTEE
Section 901. Commencing with the completion of the Project or when
the Lessee takes possession if prior to the completion of the Project, Lessee shall
and agrees to indemnify and save Lessor and the Trustee harmless against and from
all claims by or on behalf of any person, firm or corporation arising from the conduct
or management of, or from any work or thing done on, the leased premises during the
term, and against and from all claims arising during the term from (a) any condition
of the leased premises, (b) any breach or default on the part of Lessee in the per-
lormance of any of its obligations under this Lease and Agreement, (c) any act or
negligence of Lessee or of any of its agents , contractors , servants , employees or
s licensees, or (d) any act or negligence of any assignee or sublessee of Lessee, or of
any agents, contractors, servants, employees or licensees of any assignee or sub-
lessee of Lessee. Lessee shall indemnify and save Lessor and the Trustee harmless
from and against all costs and expenses incurred in or in connection with any such
claim arising as aforesaid, or in connection with any action or proceeding brought
thereon, and upon notice from Lessor, or the Trustee, Lessee shall defend them or
either of them in any such action or proceeding.
E
ARTICLE X
LESSOR MAY PERFORM LESSEE'S OBLIGATIONS
Section 1001. If Lessee shall fail to keep or perform any of its obli-
gations as provided in this Lease and Agreement in respect of: (a) maintenance of
insurance; (b) payment of impositions; (c) repairs and maintenance of the leased
premises; (d) compliance with legal or insurance requirements; (e) keeping the leased
premises lien free; or (f) making of any other payment or performance of any other
obligations, then Lessor may (but shall not be obligated to do so), upon the con-
tinuance of such failure on Lessee's part for thirty (30) days after written notice to
Lessee, and without waiving or releasing Lessee from any obligation, and as an
additional but not exclusive remedy, make any such payment or perform any such
obligation, and all sums so paid by Lessor and all necessary incidental costs and
}
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expenses incurred by Lessor in making such payment or performing such obligation
shall be deemed additional rent and shall be paid to Lessor on demand, or at Lessor's
option may be added to any installment of basic rent thereafter falling due, and
added to any installment of basic rent thereafter falling due, and if not so paid by
Lessee, Lessor shall have the same rights and remedies as in the case of default by
Lessee in the payment of basic rent.
s
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ARTICLE XI
PUBLIC UTILITIES AND CHARGES
~~
tion 1tQ1. Lessee agrees to pay or cause to be paid all charges
for water, gas, sewer, electricity, light, heat or power, telephone or other service
used, rendered or supplied to or for the Lessee upon or in connection with the leased
premises throughout the term of this Lease and Agreement, and to indemnify Lessor
and save it harmless against any liability or damage on such account.
L
ARTICLE XII
INSPECTION OF PREMISES BY LESSOR
Section 1201. Lessee shall permit Lessor and the Trustee or either
of them, by their respective authorized representatives , to enter the leased premises
at all reasonable times during usual business hours for the purpose of inspection, and
for the performance of any work therein made necessary by reason of Lessee's default
under any of the provisions of this Lease and Agreement. Lessor may, during the
progress of any such work, keep and store on the leased premises all necessary
materials , supplies and equipment and shall not be liable for inconvenience , an-
noyance, disturbance, loss of business or other damage to Lessee suffered by reason
of the performance of any such work or the storage of materials , supplies and equip-
me nt .
irr.
ARTICLE XIII
DAMAGE AND DESTRUCTION
~~
Section 1301. A. Lessee covenants and agrees that in the event of
damage to or destruction of the leased premises , or any part thereof , by fire or other
casualty, the Lessee shall immediately notify the Lessor and the Trustee. If the
damage is in the amount of $100,000, or less, Lessee shall proceed to restore, re-
pair, rebuild or replace the leased premises to the same extent, if any, required so .
that in the judgment of the Lessee, the Project is suitable for use for Lessee's pur-
pose uder this Lease and Agreement. If the damage exceeds $100, 000 Lessee shall,
at no cost and expense to Lessor or Trustee, proceed to restore, repair, rebuild or
replace the leased premises as nearly as possible to the condition they were in
immediately prior to such damage or destruction, subject to such alterations as
~ Lessee may elect to make in conformity with the provisions of Article V hereof. Any
item of machinery and equipment acquired as a replacement hereunder, or any
.item acquired, in whole or in part, out of insurance proceeds under this Article XIII,
whether or not a replacement of or substitute for any item of damagedor destroyed
machinery and equipment, if the insurance proceeds with which such item of
machinery and equipment was purchased, in whole or in part, were derived from
insurance on property which was part of Lessor's machinery and equipment, shall be
end become the property of Lessor and shall be part of Lessor's machinery and
:quipment and subject to this Lease and Agreement. Such restoration, repairs, re-
placements or rebuilding shall be commenced promptly and prosecuted with reasonable
diligence .
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B. All insurance money paid on account of such damage or de-
struction shall be paid to the Trustee and applied as hereinafter set forth to the pay-
ment of the cost of the aforesaid restoration, repairs, replacements or rebuilding,
including expenditures made for temporary repairs or for the protection of property
pending the completion of permanent restoration, repairs, replacements, or rebuilding,
or to prevent interference with the business operated thereon (sometimes referred to
as the "restoration"). In the case of damage involving a loss of $100,000 or less,
the insurance proceeds shall be ;paid by the Trustee to the Lessee upon receipt by
Lessor and the Trustee of a certificate signed by an officer of Lessee that the re-
storation has been made, or is in the process of being made in accordance with the
provisions of sub-section A. hereof pertaining to Lessee's obligation to restore . In
the case of damage involving a loss of more than $100,000, the insurance proceeds
r shall be paid by the Trustee to the Lessee upon receipt by Lessor and the Trustee of:
A certificate signed by an officer of the Lessee
(i) requesting payment of a specified amount
of such insurance proceeds;
(ii) detailing the progress of the restoration
and repair work;
(iii) stating that such specified amount does
not exceed the estimated cost of the work and
materials in connection with the restoration,
including as part thereof the estimated fees
of any architect or engineer, if any; and
(iv) stating that no part of such cost has
previously been made the basis of any request
for the withdrawal of insurance proceeds under
this Article .
The Trustee shall have no responsibility as to the application by the Lessee of the
ir.~
insurance proceeds .
If the insurance money shall be insufficient to pay all costs of the
restoration, the Lessee shall pay the deficiency and shall nevertheless proceed
+~•~ to complete the restoration and pay the cost thereof. Any balance of the insurance
proceeds remaining over and above the cost of the restoration shall be paid by
the Trustee into the Bond Fund upon receipt by the Lessor and the Trustee of
certificates as required by this Article to the effect that the restoration has been
completed, and the Lessee shall be credited with said amount against Lessee's
basic rent obligations set forth in Section 203 of this Lease .and Agreement, with
such credit to be against the basic rent obligations as the same become due and
payable under Section 203, beginning with the first installment of basic rent there-
after, except when and to the extent basic rent has become nue and payable in
excess of such credit.
The total amount collected under any and all policies of insurance
covering such damage or destruction shall be paid into a special fund and the
same may be invested in any investments in which the Trustee may invest amounts
in the Construction Fund under this Indenture. Such investments shall be made by
the Trustee as directed and designated by the Lessee.
Section 1302. Lessee's obligation to make payment of the basic
rent and all other charges on the part of Lessee to be performed shall not be
affected by any such destruction or damage, and Lessee hereby waives the
provisions of any statute or law now or hereafter in effect contrary to such obliga-
tion of Lessee as herein set forth, or which releases Lessee therefrom.
Section 1303. Notwithstanding the provisions of the foregoing
~~,,,,, sections of this Article XIII, Lessee shall not be required to repair, restore,
replace or rebuild the leased premises, or any part thereof, if Lessee, pursuant
to the provisions of Article XIX, shall elect to purchase the leased premises and
shall proceed to pay the specified purchase price . If Lessee shall so elect,
the proceeds of all insurance may be used as part of the purchase price and
upon the request of Lessee shall be so applied. If there be any excess insurance
proceeds over and above the amount necessary to pay the purchase price, such
excess shall be paid to and shall belong to the Lessee.
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ARTICLE XIV
CONDEMNATION
~ Section 1401. A. If during the term of this Lease and Agreement
~:
E
~""' title to all or substantially all of the leased premises shall be taken or condemned
by a competent authority for any public use or purpose, then this Lease and Agree-
ment shall terminate at midnight on the fifteenth day after the vesting of title in
such authority and rent shall be paid to and adjusted as of that day. In that event,
subject to the subsequent provisions of this Section, the condemnation award shall
belong to the Lessor and the Lessee hereby assigns the award to the Lessor. In the
event the net amount awarded as damages or paid as a result of such taking (after
deducting all attorney's fees and other expenses and costs fn the condemnation pro-
seeding) together with the amount then in the Bond Fund, shall be insufficient to pay
in full, on the first interest paying date after receipt of the award and after the re-
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r.r. quired bond redemption notice can be given, the amount necessary to pay all princi-
pal, interest, the Trustee's and Paying Agent's fees, redemption premiums, and all
other costs of redemption (all of which, for purposes of this Section, shall be called
"total bond redemption expense ") , Lessee agrees to pay, promptly upon payment of
the condemnation award, as additional rent hereunder, the amount by which the total
bond redemption expense shall exceed the net amount awarded as damages or paid
(less such fees, expenses and costs) as a result of such taking plus the amount then
on deposit in the Bond Fund. The Lessee's agreement pertaining to this Section 1401
shall survive such termination. For purposes of this Article XIV "all or substantially
all of the leased premises" shall be deemed to mean a taking of all of the leased
premises or a taking of such substantial portion of the leased premises that
s
the Lessee as determined by the Lessee fn its sole discretion cannot reason-
ably operate in the remainder in substantially the same manner as before .
In the event the net amount awarded as damages or paid as a result of such
taking as defined above, together with the amount then in the Bond Fund,
shall be in excess of the amount necessary to pay the total bond redemp-
tion expense, if Lessee is not in default in any of its other obli-
gations under this Lease and Agreement involving monetary matters, such excess
shall belong to and be paid to the Lessee, and if Lessee is in default with reference
~•~• to any of its monetary obligations, the amount of the excess in excess of the amount
necessary to satisfy said monetary obligations with reference to which Lessee is in
default shall be paid to Lessee. The Lessor agrees that it will not voluntarily accept,
without the prior approval of the Lessee, any amount as damages for a taking which
shall be less than the "total bond redemption expense" , and the Lessor agrees that
it will cooperate with the Lessee with reference to any award with the end in view of
obtaining the maximum possible award justifiable as damages for the taking.
B. If less than substantially all of the leased premises shall be
taken or condemned by a competent authority for any public use or purpose, neither
the term nor any of the obligations of either party under this Lease and Agreement
shall be affected or reduced in any way, and
(i) If any part of the improvements owned by Lessor
on the leased premises (improvements as used herein
shall include an item of Lessor's machinery and equip-
ment) is taken, Lessee shall proceed to repair or
rebuild (repair or rebuild shall include replacement
of any item of Lessor's machinery and equipment) the
remaining part as nearly as possible to the condition
existing prior to such taking, to the extent that the
same may be feasible, subject to the right on the part
of the Lessee to make alterations so as to improve
the efficiency of the improvements; and
(ii) The entire condemnation award shall be
paid to the Lessee, and the Lessor hereby assigns
tie same to the Lessee for the use of the Lessee
in repairing and rebuilding as provided in (i)
above. The said award shall be transferred to the
Lessee in the same manner as is provided in
Section 1301 with respect to insurance pro-
ceeds, provided that the words "1<iosurance proceeds"
there referred to shall for purposes of this sub-
paragraph (ii) refer to "condemnation award" .
If the net condemnation award applicable to
property owned by the Lessor is in excess of
the amount necessary to repair and rebuild as
specified in (i) above, such excess shall be
paid to and belong to the Lessor and the Lessee
shall be credited against basic rent next there-
after provided to be paid by Lessee under the
provisions of Section 203 hereof, and Lessee
shall not be required to pay any basic rent there-
after except when and to the extent basic rent
becomes due and payable in excess of the
amount so credited. If such excess is more than
the remaining total basic rent obligations of the
Lessee hereunder, and if at that time Lessee is
not in monetary default with respect to any of
its obligations under this Lease and Agresment,.
only that portion thereof equal to the regaining
total basic rent obligations of Lessee shall be
paid to and belong to the Lessor, and the excess
shall belong to and shall be paid to the Lessee.
If Lessee is in default ~~yith reference to any of its
monetary obligations, the amount of excess over
and above the amount necessary to satisfy said mone-
tary obligations with reference to which Lessee is in
default shall be paid to Lessee. If the net condem-
nation award is less than the amount necessary for
~ the Lessee to repair and rebuild as set forth in (1)
above, the Lessee shall nevertheless complete
the repair and rebuilding work and pay the cost
~""' thereof; and
(iii) If no part of the improvements is taken, the
net condemnation award shall be paid to Lessor
and credited against basic rent obligations next
thereafter provided to be paid by Lessee under the
provisions of Section 203 hereof, and the Lessee
sha21 not be required to pay any basic rent there-
after except when and to the extent basic rent be-
comes due and payable in excess of the amount so
credited .
C. In the event of a taking under either A or B above, the Lessee
shall have the right to participate in and to prove in the condemnation proceedings
and to receive any award (by way of negotiation, settlement or judgment) which may
be made for damages sustained by Lessee by reason of the condemnation; provided,
however, nothing in this sub-section C shall be construed to diminish or impair in
any way Lessee's obligation under sub-section A of this Section 1401 to pay as
additional rent the amount of any insufficiency of th~e~ net condemnation award and
she funds in the Bond Fund to pay the total bond redemption expense as therein de-
fined .
rrnll~
D. If the use for a limited period of all or part of the leased premises
shall be taken by right of eminent domain, this Lease and Agreement shall not be
thereby terminated and the parties shall continue to be obligated under all of its
terms and provisions . If such taking is for a period of time ending on or prior to
the expiration of the term, Lessee shall be entitled to receive the entire amount
of the award made for such taking, whether by way of damages, rent or otherwise.
If such taking is for a period of t~rne which extends be ~~ end the expiration of the
term, Lessee shall be entitled to receive the entire award, with the exception of
an amount sufficient to pay and discharge all sums due Lessor from Lessee from the
time Lessee's right of possession is terminated to the expiration of the term.
Section 1402. In the event of a taking of all or substantially all of
the leased premises as provided in Section 1401 A, notwithstanding the provision
therein that the rent shall be paid to and adjusted as of the fifteenth day after
vesting of title in the taking authority, the Lessee agrees to continue to make pay-
ment of the basic rent and the additional rent until the condemnation award shall
be actually received by the Lessor; provided, however, the Lessee shall be repaid
solely out of the net condemnation award the amount of rent so paid after the date
provided in Section 1401 A. for the adjustment of rent. This agreement to repay
shall not be construed in any way to impair or diminish Lessee's obligations under
Section 1401 to pay as additional rent the amount of any insufficiency of the net
condemnation award and the funds in the Bond Fund to pay the total bond redemption
expense as therein defined.
Section 1403. Notwithstanding the fact that all or any part of the
leased premises shall be taken by right of eminent domain, Lessee shall have the
right to exercise any option granted to it by the provisions of Article XIX hereof and
the foregoing provisions of this Article XIV shall be construed in the light of the
effect of any option so exercised by Lessee. In the event of the exercise of an
option under Article XIX and payment of the required amount, whether before or after
such taking, the entire condemnation award shall belong to Lessee.
v
Section 1404. Lessee shall have the right to participate in its own
name in any negotiations or condemnation proceedings, but at its own expense, to
resist or defend condemnation and to make any presentation or conduct any pro-
ceeding in its discretion to the end of obtaining any proper relief and, if the
condemnation is concluded, to the end of obtaining the maximum condemnation
award justified by the taking.
Section 1405. Lessor covenants that it will not take or condemn
any part of the leased premises, or attempt to do so.
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ARTICLE XV
ASSIGNMENT
Section 1501. A. Lessee may assign this Lease or sublet the premises
or part thereof provided that no such assignment or subletting and no dealings or
transactions between the Lessor or the Trustee and any sublessee or assignee shall
relieve the Lessee of any of its obligations under this Lease and Agreement and
Lessee shall remain as fully bound as though no assignment or subletting had been
made, and performance by any assignee or sublessee shall be considered as per-
formance pro tanto by Lessee; provided, however that Lessee may assign this
Lease in connection with a transaction involving merger, consolidation or sale
as permitted under Section 2209 (a) provided the requirements thereof are met
and be thereby relieved of further obligation hereunder.
B. It is understood and agreed that this Lease and Agreement and/or
the rents hereunder will be assigned to the Trustee as security for the payment of
the principal of and interest on the bonds, but otherwise the Lessor shall not
assign, encumber, sell or dispose oil all or any part of its rights, title and interest
in and to the leased premises and this Lease and Agreement, except to the Lessee
in accordance with the provisions of the Lease Agreement and to the Trustee under
the Trust Indenture, but subject to the provisions of Article XVI hereof, without
the prior written consent of the Lessee.
••..
ARTICLE XVI
PRIORITY OF LEASE
Section 1601. Notwithstanding anything to the contrary in this
Lease and Agreement, this Lease and Agreement (and any amendment or supplement
hereto executed in accordance with and pursuant to the provisions of this Lease
and Agreement) and the estate of Lessee hereunder are and shall continue to be
superior and prior to the Trust Indenture (and all supplements thereto) and any
other and all encumbrances, mortgages, deeds of trust and trust indentures, or
any of them, constituting or granting a lien upon the leased premises or any part
thereof or interest therein.
ARTICLE XVII
REMEDIES ARE CUMULATIVE - NO IMPLIED WAIVER
Section 1701. Lessor, Lessee and the Trustee shall each be entitled
to specific performance, and injunctive or other appropriate equitable relief for any
breach or threatened breach of any of the provisions of this Lease and 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. The specific
remedies provided for in this Lease and Agreement are cumulative and are not
exclusive of any other remedy. The failure of either party to insist in any one or
more cases upon strict performance shall not be construed as a waiver or re-
linquishment for the future. No acceptance of rent with knowledge of any default
shall be deemed a waiver of such default.
~'
ARTICLE XVIII
DEFAULT PROVISIONS
S~,ection 1801. This Lease is made on condition also that if any one or
more of the following events (herein referred to as an "event of default") shall
happen:
(a) Lessee shall default in the due and punctual payment of the
basic rent or any additional rent payable hereunder, and such default shall continue
for fifteen (15) days after receipt of written notice from Lessor or the Trustee of such
non-payment; or
(b) Lessee shall neglect or fail to perform or observe any of the
covenants herein contained on Lessee's part to be performed or observed (other
than those referred to in sub-section (a) of this Section 1801) and Lessee shall fail
to remedy the same within sixty (60) days after Lessor or the Trustee shall have
given to Lessee written notice specifying such neglect o* failure (or within such
additional period, if any, as may be reasonably required to cure such default if it
is of such nature that it cannot be cured within said sixty (60) day period because
of governmental restriction or any other cause beyond the control of the Lessee); or
(c} This Lease or the premises or any part thereof shall be taken
upon execution or by other process of law directed against the Lessee, or shall be
taken upon or subject to any attachment at the instance of any creditor of or
claimant against the Lessee, and said attachment shall not be discharged or dis-
posed of within ninety (90) days after the levy thereof; or
(d) Lessee shall be involved in financial difficulties as evidenced
below and shall not cure the same within ninety (90) days after notice from the
Lessor,
(i) by its admitting in writing its inability
to pay its debts generally as they become due , or
(ii) by its filing a petition in bankruptcy or for
reorganization or for the adoption of an arrange-
ment under the Bankruptcy Act (as now existing
or fn the future amended) or an answer or other
fir. pleading admitting the material allegations of
such a petition or seeking, consenting to or
acquiescing in the relief provided for under such
Act, or
(iii) by its making an assignment of all or a
substantial part of its property for the benefit
of its creditors, or
(iv) by its seeking or consenting to or acquiescing
in the appointment of a receiver or trustee for all
or a substantial part of its property or of the leased
premises or of its interest in this Lease, or
(v) by its being adjudicated a bankrupt or in-
solvent, or
(vi) by the entry of a court order without its
consent which order shall not be vacated, set
aside or stayed within ninety (90) days from the
date of entry (1) appointing a receiver or trustee
for all or a substantial part of its property or (2 )
approving a petition filed against it for the effecting
of an arrangement in bankruptcy or fora reorgani-
zation pursuant to said Bankruptcy Act or for any
other judicial modification or alteration of the rights
of creditors; then:
In any such event, Lessor shall have the right at its election, then or
at any time thereafter while such event of default shall continue, either
(1) To give Lessee written notice of intention to terminate this Isase
on the date of such notice or on any later date specified therein, and on the date
specified in such notice Lessee's right to possession of the premises shall cease
and this Lease shall thereupon be terminated, or
(2) Without demand or notice, to re-enter and take possession of the
t
js,,,,,, premises or any part thereof and repossess the same as of Lessor's former estate
and expel Lessee and those claiming through or under Lessee and remove the
effects of both or either (forcibly, if necessary) without being deemed guilty of any
manner of trespass and without prejudice to any remedies for arrears of rent or
preceding breach of covenant. Should Lessor elect to re-enter as provided in this
paragraph (2) or should Lessor take possession pursuant to legal proceedings or
pursuant to any notice provided for by law, Lessor may (a) terminate this Lease, or
(b) from time to time, without terminating this Lease, relet the premises or any
part thereof for such term or terms and at such rental or rentals and upon such
other terms and conditions as Lessor may deem advisable, with the right to make
alterations and repairs to the premises. No such re-entry or taking of possession
of the premises by Lessor shall be construed as an election on Lessor's part to
terminate this Lease unless a written notice of such intention be given to Lessee or
unless the termination thereof be decreed by a court of competent jurisdiction.
Section 1802. In the event of any such termination, Lessee shall
nevertheless pay the basic rent and all additional rent and other sums as herein-
before provided up to the time of such termination, and thereafter Lessee, until
the end of what would have been the term of this Lease in the absence of such
termination, and whether or not the leased premises shall have been relet, shall be
liable to Lessor for, and shall pay to Lessor, as liquidated current damages,
(a) The basic rent and additional rent and other sums as herein-
before provided which would otherwise be payable hereunder if such termination had
not occurred, less,
(b) The net proceeds , if any, of any reletting of the leased premises ,
after deducting all of Lessor's expenses in connection with such reletting, in-
eluding, without limitation, all repossession costs, brokerage commissions, ex-
penses of employees , alteration costs and expenses of preparation for such
reletting .
Lessee shall pay such liquidated current damages on the days on
which the basic rent would have been payable hereunder if this Lease had not been
terminated.
At any time after such termination, whether or not Lessor shall have
collected any such current damages, Lessor shall be entitled to recover from Lessee,
and Lessee shall pay to Lessor, on demand, as liquidated final damages in lieu of
all such current damages beyond the date of such demand an amount equal to
~rrrl'
(x) The basic rent and additional rent and other sums
as hereinabove provided which would be payable here-
under from the date of such demand (or, if it be earlier,
the date to which Lessee shall have satisfied its obli-
gations under this Section 1802 to pay current damages)
for what would be the then unexpired term of this Lease
if the same remained in effect, less
(y) The applicable one of the following:
(i) if there has been a reletting the net proceeds
to be received from such reletting for the
balance of what would be the then unexpired
term, or
(ii) if there has been no reletting there shall
be no deduction of the amount due under (x)
above but Lessor shall pay over to Lessee, or
Lessee's successors and assigns the net pro-
ceeds received from any reletting at any time
during the balance of what would be the then
unexpired term but not to exceed the amount
actually received by Lessor under (x) above.
If any statute or rule of law gaverning a proceeding in which such
liquidated final damages are to be proved shall validly limit the amount thereof to
an amount less than the amount agreed upon hereinabove, Lessor shall be en-
titled to the maximum amount allowable under such statute or rule of law.
Section 1803. In the event of a termination of this Lease by Lessor
and prior to the time Lessor may have demanded final liquidated damages, Lessee
shall have the right, from time to time, to provide Lessor with a tenant for the
leased premises for a substantial portion of the unexpired term of this Lease as it
existed immediately prior to such termination, and
(a) If Lessor does not accept such tenant, or
(b) If Lessor does accept such tenant
then in either event the current liquidated damages payable by Lessee hereunder
shall be reduced by the amount such tenant paid, or would have been obligated to
pay if the tenant had been accepted by Lessor, less Lessor's expenses in con-
nection with such reletting as defined in sub-paragraph (b) of Section 1802 hereof.
Section 1804. The foregoing provisions of this Article relating to the
payment of basic rent and additional rent beyond the termination of this Lease, the
payment of liquidated current damages or liquidated final damages , and the receipt
of rents by Lessor upon a reletting, are each to be construed as providing that all
such payments by Lessee or others shall be made into the Act No. 9 Bond Fund
referred to in Section 204 and Lessee's said obligations shall further be subject to
the provisions of Section 203 (a) (2).
ARTICLE XIX
LESSEE'S OPTIONS
Section 1901. Lessee shall have and is hereby granted the option to
extend this Lease and Agreement for six (6) extension terms of five
(5) years each for a basic annual rental of One Hundred Dollars
(5100.00 )per year, payable in advance on the first business day of each year of
the extension term, plus the additional rentals heretofore provided in Article II here-
of and otherwise upon the terms , conditions and provisions of this Lease and Agree-
ment. The option granted in this Section 1901 may be exercised by Lessee's giving
written notice to Lessor of its intention to so exercise the option, which notice
shall be mailed at least thirty (30) days prior to the end of the initial term and
which notice shall be by certified or registered mail (with or without return re-
ceipt requested) . Whenever used in this Lease and Agreement the words "extension
term" or "renewal term" sh311 have the same meaning and shall refer to the term con-
cerning which the option to extend is granted by this Section 1901. Furthermore,
whenever the unqualified word "term" appears in this Lease and Agreement the
reference shall include the initial and any extension terms unless the context
otherwise clearly indicates a contrary meaning .
Section 1902. A. Prior to March 1, 1979, the
Lessee shall have the right and option to purchase the leased premises if, but
only if
(i) Lessor shall default in the performance of
any of its obligations under this Lease and
Agreement;
(ii) The leased premises shall sustain major
damage or destruction;
(iii) Title to or the temporary use of the whole
or any part of the leased premises shall be con-
demned as provided in Article XIV hereof;
(iv) As a result of changes in the Constitution
of the United States or of the State of Arkansas,
or of legislative action, or by the final decree,
judgment or order of any court or administrative
body entered after Lessee's contest thereof in
good faith, this Lease and Agreement becomes void
or unenforceable or impossible of performance in
accordance with the intent and purposes of the
parties as expressed in this Lease and Agreement,
or unreasonable burdens or excessive liabilities
are imposed upon either party to it.
The term "major damage or destruction" as used in sub-section (11) is
defined to mean any damage or injury to or destruction of the leased premises or any
part thereof (whether or not resulting from an insured peril) such that the leased pre-
mises cannot reasonably be restored to its condition immediately preceding such
damage, injury or destruction within a period of seventy-five (75) working days, or
which would prevent Lessee from carrying on its manufacturing operations therein
for a period of seventy-five (75) working days or the restoration cost of which would
exceed the total amount of insurance carried on the leased premises in accordance
with the provisions of Article IV hereof, or such that it would not be economically
feasible for the Lessee to repair the leased premises, as determined by the Lessee
in Its discretion.
B. On and after March 1, 1979, and during the remainder of the initial
term or any extension term hereof, Lessee shall have the unconditional right and
option to purchase the leased premises at any time .
C . At the expiration of the term and for a period of ninety (90) days
thereafter (if the purchase options under the provisions of Paragraphs A and B have
not been exercised) Lessee shall have the further unconditional right and option to
purchase the leased premises for the purchase price hereafter stated in "D" hereof .
L. Purchase Price. The purchase price payable if the Lessee
exercises Lessee's option to purchase the leased premises under the provisions of
Paragraphs A, 8 or C of this Section, shall be in the full amount necessary under
the provisions of the Trust Indenture to pay or redeem (on the first date thereafter on
which all outstanding bonds may be redeemed after giving the necessary notice) all
outstanding bonds (including, without limitation, principal, interest, redemption
premiums , if any, expenses of redemption and the Trustee's and Paying Agent's
fees) , but after deduction of any amount then in the Bond Fund and available for
`~~y#
payment and redemption. In any case, if no bonds shall be outstanding at the time
of purchase, or the redemption or payment of the bonds shall be or have been other-
wise provided for, the purchase price of the leased premises shall be One Hundred
Dollars ($100.00).
E. Any of the foregoing options may be exercised by giving written
notice to Lessor of the exercise thereof specifying the time and place of closing.
At the closing, Lessor shall, upon payment of the purchase price hereinabove
specified, deliver to Lessee a general warranty deed, bills of sale and other
appropriate conveyance instruments transferring good and merchantable title to the
leased premises free and clear of all liens and encumbrances except those to which
title was subject when leased hereunder, or resulting from any failure of Lessee to
perform any of its obligations under this Lease and Agreement; provided, however,
that if such closing shall be prior to the redemption of the bonds , such purchase
price shall be paid to the Trustee with instructions to apply said proceeds to such
redemption at the earliest possible time, in which event such bonds and the Trust
Indenture may continue to be a lien on the leased premises until redemption; and
provided, further, however, that if such option is exercised under the provisions of
sub-paragraph A (iii) of this Section, such title may be subject to the rights, titles
and interest of any party having taken or who is attempting to take title to or use
of all or part of the leased premises by eminent domain.
ARTICLE XX
NOT
wr
Section 2001. All notices, demands and requests which may or are
required to be given by either party to the other or to the Trustee shall be in writing,
and each shall be deemed to have been properly given when served personally on an
executive officer of the party to whom such notice is to be given, or when sent
postage prepaid by first class mail by deposit thereof in a duly constituted United
States Post Office or branch thereof located in one of the present states of the
United States of America in a sealed envelope addressed as follows:
If intended for Lessee:
Flint Steel Corporation With Copy to:
West Memphis, Arkansas
If intended for Lessor:
City of West Memphis , Arkansas
Office of the Mayor
City Hall
West Memphis, Arkansas
If intended for the Trustee
First National Bank of Memphis
Memphis, Tennessee
Attention: Trust Officer
Flint Steel Corporation
P. O. Box 1289
Tulsa, Oklahoma 74101
Attention: Secretary
Any party or the Trustee may change the address and name of
addressee to which subsequent notices are to be sent by notice to the other parties
given as aforesaid.
ARTICLE XXI
RECORDING
`~~
Section 2101, This Lease and Agreement and every assignment and
modification thereof shall be recorded in the office of the Circuit Clerk and Ex
Officio Recorder of Crittenden County, Arkansas .
ARTICLE XXII
GENERAL
Section 2201. This Lease and Agreement shall be construed and
enforced in accordance with the laws of the State of Arkansas . Wherever in
this Lease and Agreement it is provided that either party shall or will make
any payment or perform or refrain from performing any act or obligation, each
such provision shall, even though not so expressed, be construed as an
express covenant to make such payment or to perform, or not to perform, as
the case may be, such act or obligation.
Section 2202. If any provision of this Lease and Agreement or
the application thereof to any person or circumstances shall, to any extent, be
determined to be invalid or unenforceable, the remainder of this Lease and
Agreement and the application of its provisions to persons or circumstances
Irr
other than those as to which it has been determined to be invalid or unenforce-
able, shall not be affected thereby, and each provision of this Lease and Agree-
ment shall be valid and shall be enforced to the fullest extent permitted by
law .
Section 2203. The article captions in this Lease and Agreement
are for convenience and reference only and in no way define, limit or describe
the scope or intent of this Lease and Agreement or any part thereof , or in
anywise affect this Lease and Agreement and shall not be considered in any
construction thereof .
~ Section 2204. It is agreed that after the bonds are fully paid
t
and discharged, or adequate provision is made for their payment and discharge,
#~.
and all proper fees and expenses of the Trustee and Paying Agent are paid or
adequate provision made for their payment, the Trustee shall cease to have any•
right, title and interest in, to or under this Lease and Agreement. Thereafter,
all rights of approval or other rights herein specified with reference to the
Trustee shall inure to the benefit of and be applicable to Lessor.
Section 2205. It is agreed that in the event of any non-
payment of rent by Lessee or the failure or refusal by Lessee to observe,
keep or perform any other covenant, condition, promise or agreement set
forth in this Lease and Agreement to be observed, kept or performed by the
Lessee, the Trustee shall be entitled, in the name of the Lessor, or in its
own name (in accordance with the provisions of the Trust Indenture) to en-
force each and every right or remedy herein accorded in this Lease and Agree-
ment to Lessor in the event of the non-performance or non-observance by
Lessee of any such promise, covenant or agreement.
Section 2206. The provisions of this Lease and Agreement shall
bind and inure to the benefit of the parties hereto and their respective successors,
assigns and sublessees (it being understood that assignments and subleasing are
governed by the provisions of Article XV hereof) .
~w Section 2207. It is agreed that the Lessor and the Lessee shall
not alter, modify or amend any of the terms of this Lease and Agreement without
the prior written approval of the Trustee, which consent will not be unreasonably
withheld .
Section 2208. Lessee shall furnish to Lessor and to the
Trustee at the time that Lessee shall publish its Annual Report to Stockholders
for the preceding fiscal year, but in any event within 120 days after the end
of the preceding fiscal year, a balance sheet of Lessee as at the end of such
fiscal year and the related statements of income and surplus for each fiscal
year, all in reasonable detail and accompanied by a report or certificate of
independent certified public accountants of recognized standing, who may be
the accountants regularly employed by the Lessee, in the manner normally
reported by the Lessee to its shareholders .
Section 2209. (a) The Lessee will maintain its corporate existence
and will not, without the consent of the Trustee, dissolve, sell, lease or
otherwise dispose of all or substantially all of its assets; provided, however,
that the Lessee may, without the consent of the Trustee, consolidate with or
merge into another corporation, or sell to another corporation substantially all
of its business and assets, on the condition that (i) the successor or purchaser
corporation, as evidenced by financial statements prepared by independent
certified public accountants of recognized standing, has a net worth at least
equal to the net worth of the Lessee as evidenced by the annual statements of
both corporations for their respective last completed fiscal years and meets the
requirement of sub-paragraph (b) next following; and (ii) such corporation shall
expressly assume in writing all of the obligations of Lessee contained in this
Lease. In the event of the sale of all, or substantially all, of its business and
assets by the Lessee, as permitted by this sub-section, and the assumption by
the purchaser corporation of the obligations hereof, the Lessee shall be relieved
from all further obligations hereunder. Nothing herein contained shall prohibit
the Lessee from consolidating with or merging into,- or selling all or any part of
its business and assets to, a wholly owned subsidiary df the Lessee.
(b) The actual value of the consolidated current assets of the Lessee and
• its subsidiaries shall at all times be at least 1.5 times the actual value of the
consolidated current liabilities of the Lessee and its subsidiaries; the consolidatecL.,,,
working capital of the Lessee and its subsidiaries shall at all times be maintained
in an amount of not less than Three Million Dollars ($3 , 000, 000); and the consoli-
dated net worth of the Lessee and its subsidiaries shall at all times be not less
than Five Million Dollars ($5, 000, 000) . The term "current assets" means cash
on hand and in banks , inventory of products (valued at the lower of cost or market) ,
materials and supplies, both manufactured and in process of manufacture, accounts
receivable, after proper deduction for doubtful accounts, notes and bills receivable,
after proper deduction for doubtful items, prepaid expenses, United States
Government bonds and other marketable securities . The term "current liabilities"
means accounts payable, trade acceptances, bills current and notes current, and
all other liabilities for borrowed money which are payable within the next succeed-
ing twelve (12) months, except any such liabilities which are renewable by their
terms or any other agreement relating thereto . The term "working capital" means
the excess of current assets over current liabilities. The terms consolidated current
assets, consolidated current liabilities, consolidated working capital and consoli-
dated net worth mean the current assets, current liabilities, working capital and
net worth of the Lessee and those corporations which, at such time, are subsi-
diaries, determined on a consolidated basis in accordance with sound and generally
accepted accounting principles applied on a basis consistent with the accounting
practice of the Lessee as reflected in its annual statement for the fiscal year
ended December 31, 1965.
.....
ARTICLE XXIII
EXPANSION OF FACILITIES
Section 2301. The progress of Lessee's business may justify
an expansion of the industrial plant or the construction of additional indus-
trial facilities (herein referred to as "additional facilities") beyond those
that can be financed out of the proceeds of the bonds ($2, 000, 000) or beyond
those that Lessee desires to finance out of the proceeds of the bonds (in the
event that less than $2,000,000 in aggregate principal amount have been
delivered) to such an extent that Lessee may not desire to proceed under the
provisions of Section 502 to construct such facilities. Therefore, it is agreed,
subject to all of the provisions of this Article XXIII, as follows:
(a) If Lessee desires to construct additional facilities, it
shall notify Lessor by first class mail and Lessor agrees to proceed under
the provisions of Act No. 9 (or any similar then existing legislation authoriz-
ing municipalities in the State of Arkansas to issue bonds for the purpose of
securing and developing industry) to issue additional bonds , otherwise than
under the Indenture, subject to the requirements of Act No. 9 or any such then
existing law, to finance such additional facilities . In that event, the Lessor
and the Lessee agree to execute a separate Lease and Agreement covering the
financing of such additional facilities and the leasing thereof to Lessee upon
the same terms and conditions as set forth in this Lease and Agreement, subject
to any changes or additions that may then be agreed upon by Lessor and Lessee,
but there must be included provision for basic annual rent in the amount
necessary to provide for the payment of the principal of and interest on any
such additional bonds , and the land involved in such expansion program shall
automatically be withdrawn from this Lease and Agreement upon becoming subject
to a separate Lease and Agreement between Lessor and Lessee.
(b) If for any reason the additional facilities cannot be
financed under Act No. 9, or any then existing similar law, as provided in
sub-paragraph (a) above, or if for any reason Lessee does not desire to so
proceed, Lessee shall have the right, upon wr{tten notice to Lessor by certified
or registered mail (with or without return receipt requested), to require Lessor
to the extent permitted by Section 2304 to ccn-!ey the land to be involved in
said expansion program to Lessen by general v~~arranty deed free and clear of
all encumbrances except those to which title was su?aject when leased here-
under.
Section 230? . Lessor shall make apr~~opriate provisions in
the Trust Indenture for a release of the lands to be involved in any expansion
program (under either Section 2301 (a) or Section 2301 (b) )from t?~e lien of
the Trust Indenture. The consideration to be paid by Lessee to LESSOr upon
conveyance of the lands pursuant to the provisions of Sect~e~n 2301 (b) shall be
One Dollar ($1.00) per acre and the mutual benefits to be derived by the parties
from such expansion program .
Section 2303. The fact that tha land involved in such expansion
program shall cease to be subject to this Lease and Agreement by virtue of
becoming subject to a separate Lease and Agreement or being acquired by
Lessee shall not relieve, and shall not result in the relieving of, Lessee of
its obligation to pay basic rent and additional rent or any of the other covenants
and obligations on the part of Lessee to be performed under this Lease and
Agreement, or result in any diminution thereof .
Section 2304. Lessee's expansion program and the land subject
to said separate Lease and Agreement or said acquisition by Lessee pursuant to
the provisions of Section 2301 may include only such portion of the lands
originally leased and demised by this Lease and Agreement as shall not at
such time be improved with a building or buildings or other structure or struc-
tures or be necessary for adequate ingress and egress to and from said build-
ings and structures plus such additional land adjacent to said buildings and
structures, as may be reasonably necessary for the proper and efficient use
of such buildings and structures .
~rr/r
Section 2305. The rights conferred upon Lessee by this
- Article XXIII shall be in addition to and not in limitztion of any of the options
granted to Lessee by the provisions of Article XIX hereof, and the provisions of
this Article XXIII are in ad~?ition to and not a limitata.on upon Lessee's rights
under Section 502 hereof .
ARTICLE XXIV
REMOVAL AND DISPOSAL GF PROPERTY
Section 2401. The Lessee may, provided Lessee is not in
default in the payment of basic rent or additional rent as required by the
provisions of this Lease and Agreement and has not received notice of any
other default on its part hereunder, remove , free of any right or claim of
Lessor or the Trustee, any building service equipment (hereinafter defined),
subject however, in all cases to the following:
(a) Building service equipment may be so removed upon the
substitution thereof , then or theretofore , by Lessee of other building service
equipment of a utility or value at least equal to that, at the time of removal,
of the building service equipment removed;
(b) Worn out or obsolete building service equipment may be
so removed and building service equipment added by Lessee after the full
completion of a building (and not by way of repair, replacement or the like)
may be removed, provided the original efficiency, utility and value of the
building is not impaired;,
(c) Lessee shall pay all the costs and expenses of any such
removal and shall immediately repair at its expense all damage caused thereby.
The term "building service equipment" is intended to refer to
such things as are affixed to or incorporated in a building for its operation,
such as boilers , pumps , tanks , electrical panel switchboards , sprinklers ,
lighting equipment and wiring, heating, plumbing and ventilating equipment,
elevators , escalators , refrigerating , air conditioning and air cooling equipment ,
and items similar in general to any of the foregoing.
Section 2402. The Lessor and the Lessee recognize that
after Lessor's machinery and equipment is installed portions thereof may be-
come inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary
in the operation of the Project as a modern manufacturing plant. The Lessor
shall not be under any obligation to renew, repair or replace any such inade-
quate, obsolete, worn out, unsuitable, undesirable or unnecessary items of
Lessor's machinery and equipment. In any instance where the Lessee in its
sound discretion determines that any items of Lessor's machinery and equip-
ment have become inadequate, obsolete, worn out, unsuitable, undesirable
or unnecessary in the operation of the Project as a modern manufacturing
plant,
(a) The Lessee may remove such items of Lessor's machinery
and equipment from the Project and, (on behalf of the Lessor)
sell, trade-in, exchange or otherwise dispose of them without
any responsibility or accountability to the Lessor or the
Trustee therefor, provided that the Lessee substitute (either
by direct payment of the cost thereof or by advance to Lessor
of the funds necessary therefor, as hereinafter provided) and
install anywhere in the Project other machinery or equipment
having equal or greater utility (but not necessarily the same
function) 1n the operation of the Project as a modern manufac-
turing plant, and provided further that such removal and sub-
stitution shall not impair the operating unity of the Project .
All such substituted machinery or equipment shall be the sole
property of the Lessor, shall be and become a part of Lessor's
machinery and equipment subject to this Lease and Agreement
and shall be held by the Lessee on the same terms and condi-
tions as items originally comprising Lessor's machinery and
equipment .
(b) The Lessee may remove such items of Lessor's machinery
and equipment from the Project and sell , trade in or exchange
them (in whole or in part) on behalf of the Lessor, either to
itself or to another, or scrap them (in whole or in part),
without being required to substitute and install in the Project
other items of machinery or equipment in lieu thereof, provided
(i) that in the case of the sale of any such machinery or equip-
ment to anyone other than itself or in case of the scrapping
thereof, the Lessee pays into the Bend Fund the proceeds
from such sale or the scrap value thereof, as the case may be,
(ii) that in the case of the trade in of such machinery or equfp-
ment for other machinery or equipment not to be installed in
the Project, the Lessee pays into the Bond Fund the amount of
the credit received by it on such trade in, and (iii) that in the
case of the sale of any such machinery or equipment to the
Lessee, the Lessee pays into the Bond Fund an amount equal
to the original cost thereof less depreciation at rates calcu-
lated in accordance with generally accepted accounting
practice .
In any case where the Lessee purchases, installs and substi-
tutes in the Project any item of machinery or equipment, the Lessee may, in
lieu of purchasing and installing said items of machinery and equipment itself,
advance to the Lessor the funds necessary therefor, whereupon the Lessor will
purchase and install such machinery or equipment in the Project.
The Lessee will promptly report such removals , substitutions ,
sales and other dispositions of items of Lessor's machinery and equipment to
the Trustee, will pay to the Trustee such amounts as are required by the pro-
visions of the preceding sub-section (b) to be paid into the Bond Fund promptly
after the sale, trade-in or scrapping requiring such payment, and will execute
and deliver to the Lessor and the Trustee such documents as may from time to
time be requested to confirm the title of the Lessor (subject to this Lease and
Agreement) to any items of machinery and equipment that under the provisions
of this section are to become a part of Lessor's machinery and equipment.
~~
The Lessee will pay any costs (including counsel fees) incurred in subjecting
to the lien of the Indenture any items of machinery or equipment that under
the provisions of this section are to become a part of Lessor's machinery and
equipment. The Lessee will not remove, or permit the removal of any of
Lessor's machinery and equipment from the leased premises except in accord-
ance with the provisions of this section .
Section 2403. If requested by Lessor, Lessee shall furnish
to Lessor, within sixty (60) days after the end of each calendar year,
Lessee's certificate setting forth a summary description of all removals made
pursuant to Sections 2401 and 2402.
IN WITNESS WHEREOF, the parties hereto have caused this Lease and
Agreement to be signed in several counterparts , each of which may be considered are
original without the presentation of the others , by their duly authorized officials and
officers as of the day and year first hereinabove written.
(SEAL)
ATTEST: ,
City Clerk
ATTEST:
CITY OF WEST MEMPHIS , ARKANSAS
L E S S R
By
Mayor
FLINT STEEL CORPORATION
L E S S E E
By
(SEAL)
ACKNOWLEDGMENT
S'.fATE OF ARKANSAS )
COUNTY OF CRITTENDEN)
\~
On this day of 1966, 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
Mayor and City Clerk, respectively of City of West Memphis, Arkansas, a
municipality of the State of Arkansas , to me personally known, who stated that they
were duly authorized in their respective capacities to execute the foregoing instru-
ment for and in the name of said City, and further stated and acknowledged that
they had signed, executed and delivered said foregoing instrument for the consider-
ation, uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and official
seal this day of 1966.
Notary Public
My commission expires:
ACKNOWLEDGMENT
STATE OF )
)
COUNTY OF )
On this day of 1966, 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 Flint Steel Corporation, an Oklahoma corporation authorized to
do business in the State of Arkansas , to me personally well known, who stated
that they were duly authorized in their respective capacities to execute the fore-
going instrument for and in the name and behalf of said corporation, and further
stated and acknowledged that they had so signed, executed and delivered said
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 this day of 1966.
Notary Public
My Commission expires:
EXHIBIT A
I (Referred to in Section 201 (a))
~..
The following described property situated in the County of Crittenc~.;~r:,
State of Arkansas, to wit:
A lot lying in Section 23, Township 6 North, Range 8 East, South
of the Rock Island Railroad, in Crittenden County Arkansas, and
more particularly described as follows:
Commencing at the intersection of the west line of Section 23,
T-6N, R-8-E, and the center line of Rainer Avenue (County Road);
thence North 76 degrees 26 minutes east 711.25 feet along the
center line of Rainer Road, thence South 13 degrees 34 minutes
east 30.0 feet to the point of beginning on the south right of
way line of said Rainer Road, thence north 76 degrees 26 minutes
east 2537.38 feet along the south right of way line of Rainer
Road, thence south 15 degrees 40 minutes west 1100.11 feet,
thence south 76 degrees 26 minutes west 2000.12 feet on a line
parallel to the south right of way line of .Rainer Avenue, thence
north 13 degrees 34 minutes west 960 feet to the point of be-
rr.
ginning, containing 50.0 acres, more or less.
L
Y
Page 2
Section 2. Th at ti:e Mayor and City Clerk be, and they are hereby,
au+~.horized and directed, :ar anc; on behalf of the Ci,-y, to do all things, execute
all instruments and othe:~vise take all action necessary to the realization of the
City's rights and to the discharge of the City's obligations as Lessor under said
Lease and Agreement.
Section 3 , That t.e provisions of this Ordinance are hereby declared
to be separable, and if a;:y section, phrase or provision shall for any reason be
declared to be invalid, such declaration shall not affect the validity of the
remainder of the sections, prrases or provisions .
Section 4. That all ordinances and parts of ordinances in conflict
herewith are hereby repealed to the extent of such conflict.
Section 5. That t.ere is hereby found and declared to be an immediate
need for a substantial development of industry within the City of West Memphis,
Arkansas in order to provide adc;~tional employment and increased payrolls,
alleviate unemployment, and provide other benefits incidental to the operation of
a substantial industry, and the execution and delivery of the Lease and Agreement
authorized by this Ordinance is necessary for the accomplishment of these public
benefits and purposes. it is, therefore, declared that an emergency exists; and
this Ordinance, being necessar<.~ for the immediate preservation of the public
health, safety and welfare, s:~a~l be in force and take effect immediately upon
and after its passage.
PASSED: MARCH 17 1966.
APPROVED:
Mayor
ATTEST:
'.-,'~ J
City Clerk
(SEAL)
~, ~
CERTIFICATE
The undersigned, City Clerk of the City of West Memphis,
Arkansas, hereby certifies that the foregoing pages are a true and compared
copy of an Ordinance passed at a rPg,]lar session of the City Council
of West Memphis, Arkansas held at the regular meeting place of the Council
of said City at 3:00 0' clock _~, m . , on the 1 th day of March ,
1966, and that said Ordir~arce is of record in Ordinance Record Book ~_,
page 23 ,now in my possession.
GIVEN under my hand and seal this 30th day of March ,
1966.
.,
~-- ~
__
City Clerk
(SEAL)