2025 r fl
RESOLUTION NO. vt Cris"
A RESOLUTION TO AUTHORIZE THE ENTRY INTO AN
AGREEMENT TO ISSUE BONDS AND TO APPROVE A PAYMENT IN
LIEU OF TAXES AGREEMENT FOR THE PURPOSE OF ASSISTING IN
THE FINANCING OF INDUSTRIAL FACILITIES WITHIN OR NEAR
THE CITY OF WEST MEMPHIS,ARKANSAS, TO BE LEASED TO
BASF CORPORATION PURSUANT TO THE AUTHORITY OF THE
LAWS OF THE STATE OF ARKANSAS, INCLUDING PARTICULARLY
AMENDMENT 65 TO THE ARKANSAS CONSTITUTION AND THE
MUNICIPALITIES AND COUNTIES INDUSTRIAL DEVELOPMENT
REVENUE BOND LAW; AND FOR OTHER PURPOSES.
WHEREAS, the City of West Memphis, Arkansas, is authorized under the provisions of
Amendment 65 to the Arkansas Constitution and the Municipalities and Counties Industrial
Development Revenue Bond Law, as amended, Ark. Code Ann. §§ 14-164-201 et seq. (the
"Act"), to own, acquire, construct, equip, and lease facilities to secure and develop industry and
to assist in the financing thereof by the issuance of bonds payable from the revenues derived
from such facilities; and
WHEREAS,the City has previously issued its Industrial Development Revenue Bonds
(CPS Chemical Project), Series 1982, Series 1983, and Series 1984 for the purpose of financing
the acquisition, construction, and equipping of an industrial project located at 100 Bridgeport
Cove, West Memphis,Arkansas 72301 (the "Original Project"), which is leased to BASF
Corporation(the"Company"), which acquired its interest in the Original Project from a
successor to CPS Chemical Company of Arkansas, and utilized in the Company's business of
manufacturing water treatment and specialty monomer products; and
WHEREAS, the Company has evidenced its interest in acquiring,constructing, and
equipping improvements and additions to the Original Project(the "Project") if the permanent
financing can be provided through the issuance of bonds under the authority of the Act; and
WHEREAS, notice of a hearing before this Council at this time and on this date,
regarding approval of in-lieu-of-tax payments with respect to the Project, was delivered to the
Superintendent of Schools for the West Memphis School District,which is the school district in
which the Project is located, and to the Chief Fiscal Officer for the State of Arkansas not less
than 10 days prior to this date as required under Arkansas Code Annotated § 16-164-704; and
WHEREAS,the City of West Memphis desires to assist the Company in order to secure
and develop industry within the County, and to aid in the financing thereof through the issuance
of industrial development revenue bonds and the entry into an agreement for payments in lieu of
ad valorem taxes to provide for the payments equal to 35%of the aggregate amount of ad
valorem taxes that would be paid if the Project were on the tax rolls for a period of 20 years
under the provisions of the Act; and
WHEREAS, it is desirable that the City enter into an Agreement to Issue Bonds for such
purpose; and
Page 1 of 6
WHEREAS, it is desirable that the City approve and execute the PILOT Agreement
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF WEST MEMPHIS, ARKANSAS:
SECTION 1. The Mayor and the City Clerk of the City are hereby authorized to enter
into an Agreement to Issue Bonds in substantially the form and substance as follows:
AGREEMENT TO ISSUE BONDS
THIS AGREEMENT TO ISSUE BONDS (the "Agreement") is made as of
May 16, 2013, by and between the City of West Memphis, Arkansas, a city of the
first class under the laws of the State of Arkansas (the "City"), and BASF
Corporation(the "Company"), for the purpose of carrying out the purposes set
forth in the Municipalities and Counties Industrial Development Revenue Bond
Law, as amended, Ark. Code Ann. § 14-164-201 et seq. (the "Act").
WITNESSETH:
WHEREAS, the City is authorized by Amendment 65 to the Arkansas
Constitution and the Act to own, acquire, construct, reconstruct, extend, equip,
improve, operate, maintain, sell, lease, or contract concerning, or otherwise deal in
or dispose of any land, buildings, or facilities of any and every nature that can be
used in securing or developing industry within or near the City; and
WHEREAS, the City has previously issued its Industrial Development
Revenue Bonds (CPS Chemical Project), Series 1982, Series 1983, and
Series 1984 for the purpose of financing the acquisition, construction, and
equipping of an industrial project located at 100 Bridgeport Cove, West Memphis,
Arkansas 72301 (the "Original Project"), which is leased to the Company, which
acquired its interest in the Original Project from a successor to CPS Chemical
Company of Arkansas, and which is utilized in the Company's business of
manufacturing water treatment and specialty monomer products; and
WHEREAS, the Company has evidenced its interest in acquiring,
constructing, and equipping improvements and additions to the Original Project
(the "Project"), and the City has determined that such purposes may be served by
cooperation with the Company in the acquisition, construction, and equipping of
the Project; and
WHEREAS, the City and the Company desire to cooperate in the
acquisition, constructing, and equipping of the Project and to have the costs of the
Project financed from the proceeds of revenue bonds of the City (the "Bonds") to
be issued pursuant to the Act in an aggregate principal amount now estimated not
to exceed $30,000,000 (excluding any bonds issued to refund the Bonds); and
Page 2 of 6
WHEREAS, the City and the Company are parties to a Lease Agreement
dated March 1, 1982, of the real and personal property constituting the Original
Project(the "Original Lease"), which by its terms, assuming exercise of all
renewal options, will expire on January 1, 2025; and
WHEREAS,the City and the Company intend to enter into a Lease
Agreement (the "Lease") of the real and personal property constituting the Project,
which contemplates that the Project will be leased to the Company for a period of
20 years from the date of issuance of the Bonds, with an option to purchase for a
nominal price,and the rental payments therefor together with other moneys
available shall be sufficient to pay debt service on the Bonds and all related costs;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration under the mutual benefits, covenants, and agreements
herein expressed,the City and the Company agree as follows:
1. Proceedings. All proceedings in connection with the issuance of the
Bonds shall be consistent with the requirements of the Act. All references
contained herein to the issuance of the Bonds shall be subject to compliance with
the formalities of the Act when the facts required to do so are determined.
2. Acquisition, Construction, and Equipping. The City and the Company
will cooperate in causing to be commenced and continued the required
acquisition, construction, and equipping of the Project, and the Company may
provide, or cause to be provided, the necessary interim financing to permit work
on the Project to commence and continue expeditiously pending the issuance of
Bonds.Not later than the date of issuance of the Bonds,the Company will convey
and transfer or cause to be conveyed and transferred to the City, for an amount
approximately equal to that then expended by the Company(including at the
Company's option any costs of interim financing),the Project or portions thereof
theretofore acquired, constructed, and equipped to the extent that the Project or
such portions thereof are not already owned by the City.
3. Lease. The City and the Company shall enter into a Lease Agreement
between the parties under which the Company will lease the Project from the City
for a period of approximately 20 years from the date of issuance of the Bonds,
with an option to purchase for a nominal price, and will agree to make rental
payments sufficient to pay the principal of and interest on the Bonds, together
with all charges of any Trustee and any Paying Agent for the Bonds.
4. Sale of Bonds, Security. The City will take such steps as are necessary
to issue, sell, and deliver the Bonds, pursuant to the terms of the Act, for the
purposes of financing the costs of the Project, in each case only upon receipt of
the written designation by the Company of the purchaser(s) or underwriter(s)
thereof, such Bonds to be in such principal amount,to mature in such amount and
times,to bear interest at such rate or rates,to be payable on such dates, and to
have such optional and mandatory redemption features and prices as are
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determined by the City and approved in writing by the Company. The City further
agrees that it will enter into a Lease and a trust indenture with a bank or trust
company, qualified to exercise trust powers where necessary, for the purpose of
providing rental payments sufficient, with other amounts available from the
Company and/or directly or indirectly from the proceeds of the Bonds, to pay the
principal of and interest on the Bonds as they become due together with the
charges of any Trustee and Paying Agent for the Bonds, and pledging and
otherwise securing the payment of such rental payments for the benefit of the
holder(s) of the Bonds. The Lease,the trust indenture, other related documents,
and the Bonds shall contain such terms and conditions as are agreed upon by the
City and the Company. The City will cooperate in consummating the transactions
so contemplated.
5. Bonds to be Special Obligations. The City shall have no financial
responsibility with respect to the Project, the Bonds, or the costs associated with
either, and the Bonds shall be special obligations of the City and shall never
constitute a general obligation, indebtedness, or pledge of the credit of the City
within or near the meaning of any constitutional or statutory provision and shall
never be paid in whole or in part out of any funds raised or to be raised by taxation
or any other revenues or other funds of the City except those (including
unexpended Bond proceeds) derived from or in connection with the sale or lease
of the Project as provided for herein.
6. Conditions of Issuance. The Bonds may be issued either at one time or
in several series from time to time, in such aggregate principal amount or amounts
as the Company shall request in writing; provided, however,that all conditions of
the Act shall have been met.
7. Costs to be Financed. The costs of the Project may include any costs
permissible under the Act, including but not limited to reasonable and necessary
costs, expenses, and fees incurred by the Company in acquiring, constructing, and
equipping of the Project; reasonable and necessary costs, expenses, and fees
incurred by the City in connection with the issuance of the Bonds or in connection
with the Project; fees and out-of-pocket expenses of Rose Law Firm, a
Professional Association, as bond counsel; fees and expenses of any trustee; fees
and expenses, if any, required in connection with the underwriting or placement of
the Bonds; recording costs; and printing and publication costs. The City will upon
request provide or cause to be provided any data or information which may be
reasonably required to verify any of the costs, expenses, and fees enumerated
above.
8. Termination. In the event that the Bonds shall not be sold within or near
three years from the date hereof, this Agreement shall automatically terminate
unless the parties hereto shall agree in writing to its extension for a further period
of time specified in such writing, which agreement on the part of the City shall not
be unreasonably withheld. The Company may unilaterally terminate this
Agreement without liability to the City(except for any amounts due and owing by
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the Company to the City arising out of the transactions occurring on or before the
time of such termination, which shall be promptly paid by the Company to the
City) by giving notice by ordinary mail,postage prepaid, to the City specifying
therein the date of termination, which may be the date of the notice.
9. Protection to the City. The Company shall pay all of the City's costs and
expenses reasonably and necessarily incurred in connection with this Agreement
or any other related document or instrument. The Company will at all times
indemnify and hold harmless the City against any and all losses, costs, damages,
expenses, and liabilities of whatsoever nature directly or indirectly resulting from,
arising out of, or related to matters in connection with this Agreement.
10. Ad Valorem Taxation Exemption. The City and the Company
recognize that under the Arkansas Constitution and decisions of the Supreme
Court of Arkansas and in accordance with Ark. Code Ann. §§ 14-164-701 et seq.,
the Project will be exempt from ad valorem taxation. The City agrees that the
Company shall be required to enter into an Agreement for Payments in Lieu of
Taxes("PILOT Agreement")with the City providing for payments in lieu of a
portion of the ad valorem taxes that would otherwise be levied by local public
bodies with taxing authority. The terms of the PILOT Agreement shall be
approved by the City only after giving notice as required by law.
11. Purpose and Effect. The Bonds are to be issued, sold, and delivered
under the authority of the Act and all related actions and documents shall be in
conformity therewith. The City intends this Agreement to be the expression of its
present intent, pursuant to the terms hereof,to issue the Bonds up to $30,000,000
aggregate principal amount outstanding at any one time, and also to issue
additional Bonds if the Project costs exceed such amount, and to expend the Bond
proceeds to defray the costs of the Project.
12. Assignment. The Company may assign this Agreement and the PILOT
Agreement in whole or in part to an affiliate of the Company without the prior
written consent of the City and to an entity which is not an affiliate of the
Company with the prior written consent of the City, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing,no assignment and no
dealings or transactions between the City and any assignee shall relieve the
Company of any of its obligations under this Agreement.
IN WITNESS WHEREOF,the City of West Memphis, Arkansas, acting
pursuant to a Resolution of its City Council, has caused its name to be hereunto
subscribed by its Mayor and the Company has caused its corporate name to be
subscribed hereto by its duly authorized officer, all as of the year and date first
above written.
Page 5 of 6
CITY OF WEST MEMPHIS, ARKANSAS
By:
Mayor
BASF CORPORATION
By:
[Title]
SECTION 2. The City hereby approves the PILOT Agreement in substantially the form
submitted to the City Council at this meeting. The Mayor is hereby authorized and directed to
execute the approval of the PILOT Agreement, his execution shall constitute conclusive evidence
of such approval.
SECTION 3. Severability. In the event any title, section, paragraph, item, sentence,
clause, phrase, or word of this resolution is declared or adjudged to be invalid or
unconstitutional, such declaration or adjudication shall not affect the remaining portions of this
resolution, which shall remain in full force and effect as if the portion so declared or adjudged
invalid or unconstitutional were not originally a part of this resolution.
SECTION 4. Repealer. Resolution No. 1913 of the City, adopted April 2, 2009,
authorizing the execution and delivery of a special warranty deed with respect to the Original
Project from the City to CIBA Corporation, formerly known as CPS Chemical Company of
Arkansas, is hereby repealed. All other ordinances or resolutions of the City in conflict herewith
are hereby repealed to the extent of such conflict.
PASSED AND APPROVED this 16th day of May, 2013.
WILLIAM H. JOHNSON, MAYOR
ATTEST:
)
PHILLIP PARA, CITY CLERK
SPONSORED BY:
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As Presented to West Memphis City Council on 5/16/2013
PAYMENT IN LIEU OF TAXES AGREEMENT
City of West Memphis, Arkansas Date: [Dated Date]
205 S Redding Street
West Memphis, AR 72301
Attention: City Council and Mayor
Re: $30,000,000 West Memphis, Arkansas Industrial Development Revenue Bonds
(BASF Corporation Project), Series 2013
Ladies and Gentlemen:
The City of West Memphis (the "City") issued The City of West Memphis, Arkansas,
Industrial Development Revenue Bonds (CPS Chemical Project), Series 1982, Series 1983, and
Series 1984(collectively, the"Prior Bonds")and proposes to issue the Bonds identified above under
the provisions of the Municipalities and Counties Industrial Development Revenue Bond Law, Ark.
Code Ann. §§ 14-164-201 et seq. (the "Act") for the purpose of financing a substantial industrial
project consisting of the acquisition of land, construction of buildings, and acquisition and
installation of equipment, all located at 100 Bridgeport Cove, West Memphis, Arkansas 72301,
within the West Memphis School District (the "Project"). The Project is leased by the City to
BASF Corporation (the "Company") pursuant to a Lease Agreement (the "Lease") for a period
of approximately 20 years for rentals sufficient to pay debt service on the Bonds. The Company
will use the bond proceeds to acquire, construct, and equip improvements and additions to its
existing operations, which manufacture water treatment and specialty monomer products.
Article V of the Lease provides that the Company is obligated to pay all taxes and
assessments levied and assessed on the Project during the term of the Lease dated as of [dated
date], (the "Lease"). The Company is informed and understands that, notwithstanding the
provision of Article V of the Lease, under Article 16, Section 5 of the Constitution of the State of
Arkansas, as interpreted by the Arkansas Supreme Court in Wayland v. Snapp, 233 Ark. 57, 334
S.W. 2d 633 (1960), and Pulaski County v. Jacuzzi Bros. Div., 332 Ark. 91, 964 S.W.2d 788
(1998), and Ark. Code Ann. §§ 14-164-701 et seq., the Project will be exempt from ad valorem
taxes because it is owned by the City and used for a public purpose within the meaning of the
applicable Constitutional and statutory provisions affording the exemption.
Thus, the Company understands that it, as Lessee of the Project owned by the City, will, in
fact, pay no ad valorem taxes on the Project property under the provisions of Article V of the
Lease. The City has indicated a reluctance to lose all tax revenues which would otherwise be
received by it if the property involved was privately owned.
Therefore, to induce the City to proceed with the issuance of the Bonds for the purpose
indicated, which will inure to the benefit of the Company, and for other valuable consideration,
the receipt of which is hereby acknowledged, the Company agrees with the City as follows:
1. In lieu of ad valorem property taxes, the Company will pay to the City an annual sum
equal to 35% of the amount which would be payable as ad valorem taxes that would have to be
paid on the Project to the State of Arkansas, Crittenden County, West Memphis School District,
1
BASF Corporation
PILOT Agreement
Page 2
and/or other political subdivisions of the State of Arkansas (the"taxing authorities") if the Project
were not exempt from ad valorem taxes under the provisions of Article 16, Section 5 of the
Constitution of the State of Arkansas, as interpreted by the Supreme Court of the State of
Arkansas in Wayland v. Snapp,supra, and Pulaski County v. Jacuzzi Bros. Div., supra, and Ark.
Code Ann. §§ 14-164-701 et seq. Payments for each calendar year are due not later than the date
regular ad valorem taxes are due (currently October 15); provided, however, that all payments
accrued through the date of termination of the Lease shall be due no later than the date of
termination of this agreement pursuant to paragraph 6. Payments not paid when due shall bear
interest at 5% per annum until paid.
2. The payments to be made pursuant to paragraph 1 are intended to be in lieu of all ad
valorem taxes that would have to be paid on the Project to the taxing authorities if the Project
were not exempt from ad valorem taxes under the provisions of Article 16, Section 5 of the
Constitution of the State of Arkansas, as interpreted by the Supreme Court of the State of
Arkansas in Wayland V. Snapp, supra, and Pulaski County v. Jacuzzi Bros. Div., supra, and Ark.
Code Ann. §§ 14-164-701 et seq., but are not intended to be in lieu of(i) any licenses, occupation
or privilege tax, or fee imposed upon the Company for or with respect to its right to carry on its
business in the State of Arkansas, (ii) any special benefit or local improvement tax or
assessment, or (iii) fees or charges for utility services rendered, such as for water or sewer
services.
3. Representatives of the Company will meet annually with the Assessor of Crittenden
County and determine the assessed valuation of the properties comprising the Project. The
determination shall be made by mutual agreement if possible, and if not shall be made by the
Assessor as though the Project were privately owned. The amount to be paid each year shall be
determined by applying the millage that would be applicable to the Project for that year if the
Project were privately owned. The Company shall be entitled to any refund occasioned by
overpayment or a reduction in millage which requires a refund by the taxing authorities.
4. The City agrees to distribute each payment under paragraph 1 among the taxing
authorities in the proportion that the millage collected bears to the total millage collected by all
during the year taxes would have been levied.
5. The City and the Company agree to cooperate in sustaining the enforceability of this
Agreement. However, if by reason of a change in the Constitution of the State of Arkansas, a
change by the Supreme Court of the State of Arkansas in its interpretation of the Constitution, a
change by the General Assembly of the State of Arkansas, or otherwise the Company is required
to pay any tax for which the payments specified in paragraph I are intended to be in lieu, the
Company may deduct the aggregate of any such payments made by it from any amount herein
agreed to be paid under paragraph 1. Furthermore, inasmuch as the payments in paragraph 1
herein agreed to be made are intended to be in lieu of taxes, it is agreed that said payments shall
not as to any year be in an amount greater than would otherwise be payable for such year in ad
valorem taxes, in the aggregate, on account of its ownership of the Project.
2
BASF Corporation
PILOT Agreement
Page 3
6. The agreement herein made by the Company shall terminate and be of no further force
and effect from and after the date that the Lease shall terminate for any purpose other than a
default on the part of the Company. If such termination shall be at a point constituting a portion
of a year, the Company shall pay for the year in which termination occurred that portion of the
specified annual payment that the number of days in such year that the Project was exempt prior
to the terminations bears to 365 days (366 days in a leap year).
7. This agreement shall be binding upon the successors and assigns of the Company, but no
assignment shall be effective to relieve the Company of any of its obligations hereunder unless
expressly authorized and approved in writing by the City.
When executed, this instrument shall constitute a valid and binding contract between the
Company and the City.
Very truly yours,
BASF CORPORATION
By:
[Name/Title]
ACCEPTED:
WEST MEMPHIS, ARKANSAS
By:
William H. Johnson, Mayor
3
AGREEMENT TO ISSUE BONDS
THIS AGREEMENT TO ISSUE BONDS (the "Agreement") is made as
of May 16, 2013, by and between the City of West Memphis, Arkansas, a city of
the first class under the laws of the State of Arkansas (the"City"), and BASF
Corporation (the "Company"), for the purpose of carrying out the purposes set
forth in the Municipalities and Counties Industrial Development Revenue Bond
Law, as amended, Ark. Code Ann. §§ 14-164-201 et seq. (the"Act").
WITNESSETH:
WHEREAS, the City is authorized by Amendment 65 to the Arkansas
Constitution and the Act to own, acquire, construct, reconstruct,extend, equip,
improve, operate, maintain, sell, lease, or contract concerning, or otherwise deal
in or dispose of any land, buildings, or facilities of any and every nature that can
be used in securing or developing industry within or near the City; and
WHEREAS, the City has previously issued its Industrial Development
Revenue Bonds (CPS Chemical Project), Series 1982, Series 1983, and Series
1984, for the purpose of financing the acquisition, construction, and equipping of
an industrial project located at 100 Bridgeport Cove, West Memphis, Arkansas
72301 (the"Original Project"), which is leased to the Company,which acquired
its interest in the Original Project from a successor to CPS Chemical Company of
Arkansas, and which is utilized in the Company's business of manufacturing
water treatment and specialty monomer products; and
WI IEREAS, the Company has evidenced its interest in acquiring,
constructing, and equipping improvements and additions to the Original Project
(the "New Project";the Original Project, as improved and added to by the New
Project, is referred to as the "Project"), and the City has determined that such
purposes may be served by cooperation with the Company in the acquisition,
construction, and equipping of the New Project; and
WHEREAS, the City and the Company desire to cooperate in the
acquisition, constructing, and equipping of the New Project and to have the costs
of the New Project financed from the proceeds of revenue bonds of the City (the
"Bonds") to be issued pursuant to the Act in an aggregate principal amount now
estimated not to exceed $30,000,000 (excluding any bonds issued to refund the
Bonds); and
WHEREAS, the City and the Company are parties to a Lease Agreement
of the real and personal property constituting the Original Project (the"Original
Lease"), which by its terms, assuming exercise of all renewal options, will expire
on January 1, 2025; and
WHEREAS, the City and the Company intend to enter into an amendment
to the Original Lease (the Original Lease, as amended, is referred to as the
"Lease") of the real and personal property constituting the Project, which
Page 1 of 5
� . w
contemplates that the Project will be leased to the Company for a period of 20
years from the date of issuance of the Bonds, with an option to purchase form
nominal price, and the rental payments therefor together with other moneys
available shall be sufficient to pay debt service on the Bonds and all related costs;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration under the mutual benefits, covenants,and agreements
herein expressed, the City and the Company agree as follows:
I. Proceedings. All proceedings in connection with the issuance of the
Bonds shall be consistent with the requirements of the Act. All references
cmo1uio�db�rciotmtn: isouno�enf the ]�nodmshall hosubject to compliance with
the formalities of the Act when the facts required to do so are determined.
2. cquisition. Construction,and Equipping. The City and the Company
will cooperate in causing to be commenced and continued the required
oc�uimidVo, 00nn1rwcdou` uod �guippioQof the New Project, and1beComnpaoy
may provide, or cause to be provided,the necessary interim financing to permit
work on the New Project ject to commence and continue expeditiously pending the
issuance of Bonds. Not later than the date of issuance of the Bonds, the Company
will convey and transfer or cause to be conveyed and transferred to the City, for
an amount approximately equal to that then expended by the Company (including
at the Company's option any costs of interim financing), the New Pr ject or
portions thereof theretofore acquired,constructed, and equipped to the extent that
the New Pr 'ectnruoobpor\ionn \hcccofazenotu\rcadyovvm:dbythe City.
3. Lease. The City and the Company shall enter into an amendment to the
existing Lease Agreement between the parties under which the Company will
continue to lease the Original Project and 10 lease the New Project from the City
for a period of approximately 20 years from the date of issuance of thc Bonds,
with an option to purchase for a nominal price, and will agree to make rental
payments sufficient to pay the principal of and interest on the Bonds, together
with all charges of any Trustee and any Paying Agent for the Bonds.
4. Sale of Bonds, Security. The City will take such steps as are necessary
to issue, sell, and deliver the Bonds,pursuant to the terms of the Act, for the
purposes of financing the costs of the Project, in each case only upon receipt of
thewritteodcmi&ua1ioo6ythcConmpuoyof the purchaser(s) or underwriter(s)
thereof, such Bonds to be in such principal amount, to mature in such amount and
times, to bear interest at such rate or rates,to be payable on such dates, and to
have such optional and mandatory redemption features and prices as are
determined by the City and approved in writing by the Company. The City further
agrees that it will enter into the amendment to the Lease and a trust indenture with
a bank or trust company, qualified to exercise trust powers where necessary, for
the purpose of providing rental payments sufficient, with other amounts available
from the Company and/or directly or indirectly from the proceeds of the Bonds, to
pay the principal of and interest on the Bonds as they become due together with
Page 2 of 5
the charges of any Trustee and Paying Agent for the Bonds, and pledging and
otherwise securing the payment of such rental payments for the benefit of the
holder(s)of the Bonds. The amendment to the Lease,the trust indenture, other
related documents, and the Bonds shall contain such terms and conditions as are
agreed upon by the City and the Company. The City will cooperate in
consummating the transactions so contemplated.
5. Bonds to be Special Obligations. The City shall have no financial
responsibility with respect to the Project, the Bonds, or the costs associated with
either, and the Bonds shall be special obligations of the City and shall never
constitute a general obligation, indebtedness, or pledge of the credit of the City
within or near the meaning of any constitutional or statutory provision and shall
never be paid in whole or in part out of any funds raised or to be raised by
taxation or any other revenues or other funds of the City except those (including
unexpended Bond proceeds)derived from or in connection with the sale or lease
of the Project as provided for herein.
6. Conditions of Issuance. The Bonds may be issued either at one time or
in several series from time to time, in such aggregate principal amount or amounts
as the Company shall request in writing; provided, however, that all conditions of
the Act shall have been met.
7. Costs to be Financed. The costs of the New Project may include any
costs permissible under the Act, including but not limited to reasonable and
necessary costs, expenses, and fees incurred by the Company in acquiring,
constructing, and equipping of the New Project; reasonable and necessary costs,
expenses, and fees incurred by the City in connection with the issuance of the
Bonds or in connection with the Project; fees and out-of-pocket expenses of Rose
Law Firm, a Professional Association, as bond counsel; fees and expenses of any
trustee; fees and expenses, if any, required in connection with the underwriting or
placement of the Bonds; recording costs; and printing and publication costs. The
City will upon request provide or cause to be provided any data or information
which may be reasonably required to verify any of the costs,expenses, and fees
enumerated above.
8. Termination. In the event that the Bonds shall not be sold within or near
three years from the date hereof; this Agreement shall automatically terminate
unless the parties hereto shall agree in writing to its extension for a further period
of time specified in such writing, which agreement on the part of the City shall
not be unreasonably withheld. The Company may unilaterally terminate this
Agreement without liability to the City (except for any amounts due and owing by
the Company to the City arising out of the transactions occurring on or before the
time of such termination, which shall be promptly paid by the Company to the
City) by giving notice by ordinary mail, postage prepaid, to the City specifying
therein the date of termination,which may be the date of the notice.
Page 3 of 5
9. Protection to the City. The Company shall pay all of the City's costs
and expenses reasonably and necessarily incurred in connection with this
Agreement or any other related document or instrument. The Company will at all
times indemnify and hold harmless the City against any and all losses,costs,
damages, expenses, and liabilities of whatsoever nature directly or indirectly
resulting from, arising out of, or related to matters in connection with this
Agreement.
10. Ad Valorem Taxation Exemption. The City and the Company
recognize that under the Arkansas Constitution and decisions of the Supreme
Court of Arkansas and in accordance with Ark. Code Ann. §§ 14-164-701 et seq.,
the Project will be exempt from ad valorem taxation. The City agrees that the
Company shall be required to enter into an Agreement for Payments in Lieu of
Taxes ("PILOT Agreement") with the City providing for payments in lieu of a
portion of the ad valorem taxes that would otherwise be levied by local public
bodies with taxing authority. The terms of the PILOT Agreement shall be
approved by the City only after giving notice as required by law.
11. Purpose and Effect. The Bonds are to be issued, sold, and delivered
under the authority of the Act and all related actions and documents shall be in
conformity therewith. The City intends this Agreement to be the expression of its
present intent, pursuant to the terms hereof, to issue the Bonds up to $30,000,000
aggregate principal amount outstanding at any one time, and also to issue
additional Bonds if the Project costs exceed such amount, and to expend the Bond
proceeds to defray the costs of the Project.
12. Assignment. The Company may assign this Agreement and the PILOT
Agreement in whole or in part to an affiliate of the Company without the prior
written consent of the City and to an entity which is not an affiliate of the
Company with the prior written consent of the City, which consent shall not be
unreasonably withheld.Notwithstanding the foregoing, no assignment and no
dealings or transactions between the City and any assignee shall relieve the
Company of any of its obligations under this Agreement.
IN WITNESS WHEREOF, the City of West Memphis, Arkansas, acting
pursuant to a Resolution of its City Council, has caused its name to be hereunto
subscribed by its Mayor and the Company has caused its corporate name to be
subscribed hereto by its duly authorized officer, all as of the year and date first
above written.
CITY OF WEST MEMPHIS, ARKANSAS
By:
Mayor
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BASF CORPORATION
By:
[Title]
izECEiV1. 0
CH; ICE
DATE 5- 0
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