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0272 --- ORDINANCE NO. 2 70 AN ORDINANCE AUTHORIZING A LEASE AND AGREEMENT BY AND BETWEEN THE CITY OF JACKSONVILLE, ARKANSAS, AS LESSOR, AND FRANKLIN ELECTRIC CO., INC., AS LESSEE, IN SUBSTANTIALLY THE FORM AND WITH SUB- STANTIALLY THE CONTENTS SET FORTH IN AND MADE A PART OF THIS ORDINANCE; AUTHORIZING THE EXECU- TION AND DELIVERY OF THE LEASE AND AGREEMENT; PRESCRIBING OTHER MATTERS RELATING THERETO; AND DECLARING AN EMERGENCY. BE IT ORDAINED by the City Council of the City of Jacksonville, Arkansas: Section 1. That there be, and there is hereby, authorized the execution and delivery of a Lease and Agreement wherein the City of Jacksonville, Arkansas (the "City "), is Lessor and Franklin Electric Co. , Inc. , an Indiana corporation ( "Franklin ") is Lessee, in substantially the form and with substantially the contents hereafter set forth, and the Mayor and City Clerk be, and they are hereby, authorized to execute, acknowledge and deliver the Lease and Agreement for and on behalf of the City. The form and contents of the Lease and Agreement which are hereby approved and which are made a part hereof, shall be sub- stantially as follows: AGt Ora nee i 4 LEASE AND AGREEMENT - between CITY OF JACKSONVILLE, ARKANSAS LESSOR and FRANKLIN ELECTRIC CO. , INC. LESSEE ORD. BOOK - PAGE rr �3 • LEASE AND AGREEMENT • TABLE OF CONTENTS Page • ARTICLE I DEFINITIONS Section 101 Definitions 3 Section 102 _Use of Words 5 ARTICLE II ACCOMPLISHING THE PROJECT Section 201 Obligation of Lessor to Construct Improvements and T 6 Purchase and Install Machinery and Equipment and Maintain Insurance Thereon Section 202 Itemization of Project Costs; Bond Proceeds to be Deposited in Construction Fund; Authorized Disburse- " ments From Construction Fund - 7 • ARTICLE III DEMISING CLAUSES, WARRANTY OF TITLE, DURATION OF LEASE TERM AND RENTAL PROVISIONS _ Section 301 Demise of Leased Premises g Section 302 Term of Lease Agreement 9 Section 303 Basic Rent; Additional Rent; Absolute and Unconditional Obligation to Pay Basic Rent and Additional Rent 9 Section 304 Method of Payment of Basic Rent and Additional Rent 13 ARTICLE IV TAXES AND ASSESSMENTS (IMPOSITIONS) Section 401 Taxes and Assessments (Impositions) 14 Section 402 Leased Premises Excempt From Ad Valorem Taxes; Contest of Attempted Levy Authorized - 14 ARTICLE V INSURANCE Section 501 Insurance Required ';; 15 • ARTICLE VI REPAIRS, MAINTENANCE AND . . ALTERATIONS Section 601 Lessee Obligated to Maintain the Leased Premises 17 Section 602 Property on Leased Premises at Sole Risk of Lessee 17 • • ORD. BCOK # 2 P!C 7 Section 603 Machinery, Equipment and Other Property Installed at Lessee's Expense Remain Its Property With Right of Removal 17 ARTICLE VII USE - COMPLIANCE WITH ORDERS, ETC. Section 701 Permitted Use of Leased Premises and Compliance with Laws, :Etc. 18 Section 702 Lessor's Covenant Not to Impose Burdensome Laws, Etc. 18 ARTICLE VIII • WORK PERFORMED BY LESSEE Section 801 Obligations of Parties Concerning Work on Leased Premises and Obtaining Necessary Permits 19 ARTICLE IX INDEMNIFICATION OF LESSOR AND TRUSTEE • Section 901 Lessee to Keep Leased Premises Free of Construction Liens 20 ARTICLE X LESSOR MAY PERFORM LESSEE'S OBLIGATIONS Section 1001 Lessor May Perform Lessee's Obligations; Lessee to Reim- burse Lessor for Costs and Expenses Incurred in Doing So 21 • ARTICLE XI PUBLIC UTILITIES AND CHARGES Section 1101 Lessee to Pay Public Utility Charges 22 • ARTICLE XII INSPECTION OF LEASED PREMISES Section 1201 Lessor and Trustee to Have Right of Inspection Subject to Certain Restrictions 23 ARTICLE XIII DAMAGE AND DESTRUCTION Section 1301 Lessee to Restore in Event of Damage or Destruction; Appli- cation of Insurance Moneys 24 Section 1302 No Diminution in Lessee's Obligation to Pay Basic Rent and Perform Other Covenants 25 ARTICLE XIV CONDEMNATION - Section 1401 Rights of Parties in Event of Condemnation; Bonds Protected in Any Event 26 Section 1402 Lessee Obligated to Continue Basic and Additional Rental Payments Until Condemnation Award Available 29 • Section 1403 Right of Lessee to Participate in Condemnation Proceedings 29 Section 1404 Lessor's Covenant Not to Condemn 29 ARTICLE XV ASSIGNMENT • Section 1501 Assignment and Subletting Permitted but Lessee Not Relieved of Obligations; Assignment to Trustee Permitted 30 ARTICLE XVI PRIORITY OF LEASE Section 1601 Lease and Agreement Superior and Prior 32 ARTICLE XVII REMEDIES ARE CUMULATIVE - NO IMPLIED WAIVER Section 1701 Specific Relief; Remedies are Cumulative; No Implied Waiver 33 ARTICLE XVIII DEFAULT PROVISIONS Section 1801 Events of Default 34 Section 1802 Remedies - - 35 Section 1803 Remedies Not Exclusive 35 Section 1804 Rental, Damages and Reletting Go Into Bond Fund 36 Section 1805 Lessee's Covenants with Respect to Capital Expenditures Under 103 (c) (6) (D) of Internal Revenue Code of 1954 36 Section 1806 Lessor and Lessee Covenant Not to Take Any Action or Permit Any Action Which May Cause Interest on the Bonds to be Subject to Federal Income Taxation 37 ARTICLE XIX - - - - LESSEE'S OPTIONS • Section 1901 Extension Options 38 Section 1902 Purchase Options 38 ARTICLE XX NOTICES Section 2001 Notices 41 •ARTICLE XXI LIMITATION OF LESSOR'S LIABILITY Section 2101 Limitation of Lessor's Liability 42 rP AGE' ` • • ARTICLE XXII • General Section 2201 Arkansas Law Applicable 43 Section 2202 Severability 43 Section 2203 Captions for Reference Only 43 Section 2204 Trustee's Rights Cease When Bonds and Trustee's Fees Paid or Provided For 43 Section 2205 Enforcement Rights of Trustee 44 Section 2206 Provisions Binding on Successors and Assigns 44 Section 2207 Trustee's Consent Required for Modification 44 ARTICLE XXIII - Removal and Disposal of Property Section 2301 Lessee's Rights and Obligations Concerning Removal and Disposal of Lessor's Machinery and Equipment 45 Section 2302 Lessee to Report Upon Request Dispositions or Removals under Section 2201 46 Section 2303 No Diminution of Lessee's Obligations to Pay Basic and Additional Rental 49 ARTICLE XXIV Recording Section 2401 Recording , 48 • • • CCA ". • • LEASE AND AGREEMENT This LEASE AND AGREEMENT made as of this first day of September, 1972, by and between the CITY OF JACKSONVILLE, ARKANSAS ( "Lessor" or "City "), and FRANKLIN ELECTRIC CO., INC., a corporation organized under and existing by virtue of the laws of the State of Indiana, but authorized to do business in the State of Arkansas ("Lessee"): WITNESSETH: 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 ( "Act No. 9"); and WHEREAS, Lessee is authorized under its Certificate 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 outstanding trust indentures, deeds of trust, mortgages, loan agreements or other instruments or evidences of indebtedness of whatever 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 WHEREAS, the industrial undertaking will consist of machinery, equip- ment and facilities (the "Project "); and 1 ��!elTSerrw— • I WHEREAS, Lessor and Lessee hereby recite knowledge that Lessor I has undertaken to furnish permanent financing of the Project costs and expenses of authorizing and issuing the bonds, by the issuance of Industrial Development Revenue Bonds under Act No. 9 in an amount not to exceed Three Million Dollars ($3,000,000) (the "bonds ") and pursuant to its undertaking to furnish the perma- nent financing 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. 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: Qqp 5p Off F.„< • • 2 A 4cz. S\� • • • ARTICLE I DEFINITIONS Section 101. In addition to the words and terms elsewhere defined in this Lease Agreement, the following words and terms as used in this Lease Agreement shall have the following meanings unless the context clearly indicates a different meaning or intent. "Act No. 9" - 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. "bonds" - The City of Jacksonville, Arkansas Industrial Development Revenue Bonds - Franklin Project, issued under and secured by the Indenture in the total principal amount of $3,000,000. "Bond Fund" or "Jacksonville, Arkansas 1972 Industrial Development Revenue Bond Fund - Franklin Project" - The fund created by Section 501 of the Indenture into which the moneys specified in Section 502 of the Indenture are to be deposited and out of which disbursements are to be made for paying the principal of and interest on the bonds in the manner and for the purposes specified in Article V of the Indenture. "Construction Fund " or "Industrial Development Revenue Bond Construction Fund - Franklin Project" - The fund created by Section 601 of the Indenture into which the portion of the proceeds of the sale of the bonds specified in Section 601 is to be deposited and out of which disbursements are to be made for Project costs in the manner and for the purposes specified in Article VI of the Indenture. Cr "Indenture" or "Trust Indenture" - The Trust Indenture between the City and the Trustee, of even date herewith, which is recorded in the office of the Circuit Clerk and Ex- Officio Recorder of Pulaski County, Arkansas and which sets forth the details pertaining to the bonds, the nature and extent of the security_and the rights, duties and obligations of the City, the Trustee and the holders and registered owners of the bonds and the terms under which the bonds are secured. "Lease Agreement" - The within Lease and Agreement between the City as Lessor and Franklin Electric Co., Inc. as Lessee. "leased premises" - The machinery, equipment and facilities covered by the Lease Agreement and defined in Section 301 (a) of the Lease Agreement. "lease term" or "term" - The initial term of the Lease Agreement set forth in Section 302 plus any extension or renewal terms pursuant to the provisions of Section 2001 hereof. "Lessor's machinery and equipment" - The machinery and equipment owned by Lessor and leased to Lessee by this Lease Agreement and specifically defined in Section 301 of this Lease Agreement. "Authorized Lessee Representative" - The person at the time designated to act in behalf of the Lessee by written certificate furnished to the Lessor and the Trustee containing the specimen signature of such person and signed on behalf of the Lessee by the president or any vice president of the Lessee. Such certificate may designate an alternate or alternates. "Authorized Lessor Representative" - The person at the time designated to act in behalf of the Lessor by written certificate furnished to the Lessee and the Trustee containing the specimen signature of such person and signed on behalf of the Lessor. Such certificate may designate an alternate or alternates. "Project" - The machinery, equipment and facilities embodied in and pertaining to the industrial project constituting the leased premises and leased to Franklin Electric Co., Inc. under this Lease Agreement. ORD• BOOM, P AGE . • • • • "Trustee" - The Trustee for the time being, whether original or successor, with the original Trustee being The Trustee is also the Paying Agent. Section 102. Words of the masculine gender shall be deemed and construed to include the correlative words of the feminine and neuter genders. Unless the context shall otherwise indicate, words shall include the plural, as well as the singular, number. } 5 !Pgrr it 9 __ • 0 ARTICLE I I ACCOMPLISHING THE PROJECT Section 201. Lessor has leased to Lessee land, a manufacturing building and improvements, which land is situated in Pulaski County, Arkansas and described on Exhibit A attached hereto and made a part hereof. Lessor will purchase machinery, equipment and other personal property, in accordance with written requests of Lessee, which will be utilized by Lessee in its manu- facturing and commercial operations in the building and improvements on such land. All requests, approvals and agreements required on the part of Lessor and on the part of Lessee shall be in writing, signed by a duly designated repre- sentative of the party making such request, granting such approval, or entering into such agreement. The Lessor and Lessee shall, concurrently with the delivery of this Lease 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. Lessor shall see that there is in full force and effect, from the date of purchase of any machinery, equipment and other personal property to be purchased as hereinabove provided, or from the date the risk of loss, which 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 Agreement shall be placed in force and effect, the usual fire and extended coverage casualty insurance, with the insurance to be in the amount necessary to prevent the application of the co insurance provisions of the policies but not less than 80% of the full • • _ insurable value of the property involved, and with the premiums thereon to be considered part of the Project costs. The Trustee shall be made a party insured as its interest may appear. Section 202. Costs incurred by Lessor in discharging its obligations under Section 201 hereof and in other sections of this Article II shall be referred to as "Project costs" and it is agreed that the Project costs will not exceed the sum of Three Million Dollars ($3,000,000) or the available proceeds received from the sale of the bonds, or any series thereof if less than the total autho- rized principal amount has been delivered 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 any such excess. Project costs, as that term is used in this Lease Agreement, shall include all costs and expenses of every nature incurred by Lessor in accomplishing the Project, 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 during construction, including, without limitation, the following: (1) All amounts paid by Lessor in discharge of its obligations under Section 201 hereof; (2) All amounts paid by Lessor for extras, changes or additions agreed to by Lessor and Lessee; (3) All payments incurred in acquiring machinery, equipment and other personal property and paying premiums for insurance coverage in connection therewith; (4) All costs and expenses incurred in installing machinery, equip- • ment and other personal property in the building; (5) All amounts necessary to reimburse Lessee for any work performed, materials purchased or expenditures incurred by Lessee pertaining to or in connection with the Project, including, without limitation, the charges of any architects or engineers retained by Lessee to prepare plans, specifications 7 0717). rani _ • va..r'visa `� " 1 - ha:.::.a'._....r -. • • and drawings for the Project, the cost of architectural or other supervisory personnel in connection with the construction of the building and the charges of any surveyors or engineers employed to make plans, or conduct tests or analyses, with respect to the-land. { (6) Any cost or expense, not otherwise provided for herein, incurred by Lessor under and pursuant to the provisions of this Article I pertaining to the constructing and equipping of the Project; (7) Such other additional fees, costs, expenses and expenditures of whatever nature incidental or pertaining to the Project, including 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 201 hereof and other sections of this Article II as constituting part of e the Project costs. It is agreed that the bond sale proceeds shall be deposited in a Construction Fund to be established pursuant to the provisions of the Trust Indenture. 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 remaining in the Construction Fund after payment of all Project costs shall be transferred to and deposited in the Bond Fund established pursuant to the provisions of the Trust Indenture, and the Lessee shall be credited with that amount against Lessee's basic rent obligations set forth in Section 303 of this Lease and Agreement, with such credit to be against the basic rent obliga- tions as the same become due and payable under Section 303, 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. 8 (i E"n!; . " ____ � "1g 4 ) 3 ARTICLE III DEMISING CLAUSES, WARRANTY OF TITLE, DURATION OF LEASE TERM AND RENTAL PROVISIONS Section 30 -1. 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 Agreement expressed, all machinery, equipment and other personal property of every kind and nature what- ever acquired by Lessor and paid for out of the Construction Fund and placed on or in the land described on Exhibit A hereto and all improvements thereon or elsewhere, including, without limitation, all replacements and substitutions which become the property of the Lessor pursuant to the provisions of this Lease and Agreement. All such machinery, equipment and other personal property shall be identified in a ledger, one copy of which shall be filed with the Trustee and one copy maintained by Lessee in the improvements situated on the lands described in Exhibit A hereto and shall be marked by an appropriate tag, or other device, as being the property of the Lessor. The said machinery, equipment and other personal property leased hereby shall be referred to herein as the "leased machinery and equipment" or the "leased premises ". Section 302. This Lease Agreement and the lease term shall become effective as of September 1, 1972, and shall continue until midnight of November 1, 1992. Section 303. (a) Basic Rent. (1) The Lessee agrees to make the following payments as basic rent, payable on the dates and in the amounts indicated: 9 „�_�3 0 BASIC RENT SCHEDULE 0 April 20, 1973 $131,766.67 October 20, 1973 98,825.00 April 20, 1974 98,825.00 October 20, 1974 98,825.00 April 20, 1975 98,825.00 October 20, 1975 98,825.00 April 20, 1976 98, 825.00 October 20, 1976 98,825.00 April 20, 1977 98,825.00 October 20, 1977 98,825.00 April 20, 1978 98,825.00 October 20, 1978 98,825.00 April 20, 1979 98, 825.00 October 20, 1979 233,825.00 April 20,1980 93, 931.25 October 20, 1980 238,931.25 :April 20, 1981 88, 856.25 October 20, 1981 243,856.25 April 20, 1982 83,431.25 October 20, 1982 248,431.25 April 20, 1983 77,656.25 October 20, 1983 252,656.25 April 20, 1984 71,531.25 October 20, 1984 256,531.25 April 20, 1985 65,056.25 October 20, 1985 265,056.25 April 20, 1986 58,056.25 October 20, 1986 273,056.25 April 20, 1987 51,068.75 October 20, 1987 281,068.75 April 20, 1988 43,593.75 October 20, 1988 288,593.75 April 20, 1989 35,937.50 October 20, 1989 295,937.50 April 20, 1990 27, 812.50 October 20, 1990 307,812.50 April 20, 1991 19, 062.50 October 20, 1991 314,062.50 April 20, 1992 9, 843.75 October 20, 1992 324,843.75 The above basic rent payments shall be reduced by the amount of any moneys in, or credits to, the Bond Fund established pursuant to the provisions of the Indenture on each basic rent payment date from any other sources whatever, including deposits or credits pursuant to any provisions of this Lease Agreement and pursuant to any provisions of the Trust Indenture,,° ORD. BOOK # r( PAGE fir` "43 • • In the event a basic rent payment date falls on a non - banking day of the Trustee, 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. (2) If, during any year while any of the bonds shall be outstanding the above specified basic rent shall be insufficient to pay the principal 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 described in Section 304, 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 all 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 Trustee'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 Paying Agent's fees and expenses and charges payable to the Trustee, as provided in the Trust Indenture, and all impositions (as defined In Section 401), expenses, liabilities, obligations and other payments of whatever nature which Lessee has agreed to pay or assume under the provisions of this Lease Agreement. If at any time any amounts paid by Lessee as addi- tional rent hereunder are or become in excess of the amounts required for the purposes for which they were paid, such excess amounts shall be refunded to the Lessee. 11 ORD. C 7 4= 3 • • • (c) So long as any of the principal of or interest on the bonds shall be outstanding and unpaid, or until payment thereof has been duly provided for, Lessee's obligation to pay basic rent and additional rent shall be absolute and unconditional and the basic rent and the additional rent shall be certainly payable oft 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 Project or the leased machinery and _ equipment, or any part thereof, for use by the Lessee at any time by reason of the failure to complete the overall industrial project by any particular time or at all or by reason of any other contingency, occurrence or circumstance whatsoever; (2) Damage to or destruction of the Project or the leased machinery and equipment, or any part thereof; (3) Legal curtailment of Lessee's use of the Project or the leased machinery and equipment, or any part thereof; (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 Project or the leased machinery and equipment by condemnation; (6) Any assignment under the provisions of Article XIV including, without limitation, an assignment as part of a transaction involving merger, con- solidation 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 XVII; • 12 D 113 1 (8) Failure of consideration or commercial frustration of purposes; (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. Section 304. 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 "Jacksonville, Arkansas 1972 Industrial Development Bond Fund - Franklin Project" (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 303 (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 the Trustee's expenses and charges, and either making direct payment in the case of impositions and other 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. • 13 y3 • • /ARTICLE IV TAXES AND ASSESSMENTS (IMPOSITIONS) Section 401. Subject to the provisions of Section 302, Lessee shall pay all lawfully assessed 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 whatsoever, foreseen and unforeseen, . which if not paid when due, would impair the security of the bonds, encumber Lessor's title or impair the right of the Lessor and the Trustee to receive the rents hereunder or in any manner whatsoever diminish the amounts thereof, all of which are herein called "impositions "; provided, 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 con- cerning any imposition. Lessee may pay any imposition in installments if so payable by law, whether or not interest accrues on the unpaid balance. Section 402. (a) Lessor and Lessee recite knowledge of the decision of the Supreme Court of the State of Arkansas in Wayland v. Snapp, 232 Ark. 57, 334 S.W.2d 633, concerning the exemption of properties owned by municipalities and used for developing industry and this factor was material in the decision of Lessee to enter into this Lease Agreement. - (b) Lessee reserves the right to contest any such tax or assess- ment and shall not be required to pay the same so long as it is conducting any such contest as long as Lessee takes such action as shall be necessary to prevent the leased premises or any part thereof from being subjected to loss or forfeiture. The Lessor hereby agrees that it will cooperate with the Lessee in resisting any such taxes or assessments if and to whatever extent the Lessee may request. Also, 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 Impositions on the leased1ptiemises. ORD. BOOK ARTICLE V • INSURANCE Section 501. A. Lessee shall, at Lessee's sole cost and expense, keep the leased premises insured against loss or damage in accordance with the customary insurance practices of Lessee: fi) Against the perils of fire and hazards ordinarily included under standard extended coverage endorsements in amounts equal to the full insurable value thereof within the terms of applicable policies; with the right in Lessee to include a deductible in accordance with customary insurance practices of Lessee and other similar operations, as determined by Lessee in the exercise of its reasonable discretion; (ii) Boiler and pressure vessel insurance to the amount determined by Lessee in the exercise of its reasonable discretion as affording adequate protection against explosion and damage if and so long as any boiler or pressure vessel is operated on the land described in Exhibit A. (iii) 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 deter- mined 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: 5 ORD. 8001( PA^ (1) 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. Copies or certificates of the insurance provided for by this Article 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 shall be delivered by Lessee to Lessor and the Trustee. D. Policies of insurance provided for in Section 501 of this Article V shall name the Lessor, the Lessee and the Trustee as insureds as their respective interests may appear. E. All insurance required by this Section 501 shall be effected with insurance companies selected by the Lessee which are qualified in Arkansas. Lessee shall cause appropriate provisions to be inserted in each insurance policy making each policy non - cancellable 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 the leased premises covered by the insurance provided for by this Article V, however caused, but nothing in this subsection E shall diminish Lessee's obligation to repair or rebuild as pro- vided 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. 16 ORD. EDO PACE LR • • • ARTICLE VI REPAIRS, MAINTENANCE AND ALTERATIONS Section 601. 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 XXIII 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, the leased premises. Section 602. All property of any kind which may be on the Project (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, and Lessor shall not be liable to Lessee or to 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 Project. Section 603. 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 hereunder, 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 resulting from or caused by their removal therefrom. 17 ARTICLE VII USE - COMPLIANCE WITH ORDERS, ETC. Section 701. Subject to the following provisions of this Section 701, Lessor and Lessee agree that Lessee may use the leased 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 govern- mental authorities, now or hereafter applicable to the leased premises, as to the manner of use or the condition of the leased premises. Lessee shall, how- ever, 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 determination of such contest, provided such contest shall be prosecuted with due diligence; and even though a lien against the leased premises may be incurred by reason of such noncompliance, 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 effecitvely 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 Agreement. Section 702. Lessor covenants that, to the fullest extent permitted by law, it will not attempt to impose upon the use or occupancy of the leased premises by the Lessee any law, ordinances, rules or regulations more bur- densome or restrictive than those in effect upon the date of execution of this Lease Agreement. ORD. BOOK #PAGE # y3 • �8 �,..ri • • • ARTICLE VIII - WORK PERFORMED BY LESSEE .Section 801. Lessee shall not do or permit others under its control to do any work related to any repair, rebuilding, alteration orreplacement 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 laws, ordinances, governmental regulations and requirements and in accordance with the reasonable requirements , rules and regulations of all insurers under the policies required to be carried by the provisions of this Lease Agreement, • ORD. BOOK 19 PAGE #—L= ARTICLE DC INDEMNIFICATION OF LESSOR AND TRUSTEE Section 901. 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 any work or thing done on the leased premises during the term, and against and from all claims arising during the term from (1) any condition of the leased premises; (2) any breach or default on the part of Lessee in the performance of any of its obligations under this Lease Agreement; (3) any act or negligence of Lessee or of its agents, contractors, servants, employees or licensees; or (4) any act or negligence of any assignee or sublessee of Lessee, or of any agents, contractors, servants, employees or licensees of any assignee or sublessee 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 con- nection 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. • ,; CRD. • e oo ; 20 .m •_ .i. .z ..3�5m� • • ARTICLE X LESSOR MAY PERFORM LESSEE'S OBLIGATIONS Section 1001. If Lessee shall fail to keep or perform any of its obligations as provided in this Lease Agreement in respect of: (1) maintenance of insurance (as provided for in Article V hereof); (2) payment of impositions (as provided for in Article IV hereof); (3) repairs and maintenance of the leased premises (as provided for in Article VI hereof; (4) compliance with insurance requirements; (5) keeping the leased premises free of liens and encumbrances; (6) making of any other payments or performance of any other obli- gation, then, in that case, Lessor may (but shall not be obligated so to do) upon the continuance 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 such sums paid by Lessor and all necessary inci- dental costs and expenses incurred by Lessor in making such payment or perform- ing such obligation shall be paid by Lessee to Lessor on demand, or at Lessor's option may be 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 the Lessee in the payment of basic rent.. 1 y3 21 1 i s • ARTICLE XI PUBLIC UTILITIES AND CHARGES Section 1101. Lessee agrees to pay or cause to be paid all charges for utility services used, rendered or supplied to or for the Lessee upon or in connection with the leased premises throughout the term of this Lease Agree- ment and to indemnify Lessor and save it harmless against any liability or damage on such account; provided, Lessee shall have the right to contest any such charges which it considers unreasonable or not due and need not pay any such charges during the contest so long as it does not permit the leased premises or the interest of Lessor or Lessee therein to be foreclosed or encumbered. / 1 C p 22 • 1. " / +. .aM A kgaillataillialraillliAthigaitialraillalliaidatilbalitaabillialaiSIN 0 • ARTICLE XII INSPECTION OF LEASED PREMISES Section 1201. Lessee shall permit Lessor and the Trustee or either of them, by their respective authorized representatives , to have access to the leased premises for the purposes of inspecting the leased premises and per- forming any work made necessary by reason of Lessee's default under any of the provisions of this Lease Agreement; provided, however, the right of inspection conferred hereby shall not apply to any item of leased premises which Lessee, in the exercise of its discretion, determines to be secret because of technological design or otherwise and the rights conferred upon Lessor by this Section shall, to the extent possible, be exercised so as not to interfere with Lessee's business operations. Lessor shall not be liable for inconvenience, annoyance, disturbance, loss of business or other damage to Lessee suffered by reasonvof the performance of any such work or the taking of any such action. 23 • • • ARTICLE XIII DAMAGE OR 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. 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 Lessee's rights under Article XXIII 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 - leased machinery and equipment damaged or destroyed, 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 the leased premises, shall be part of the leased premises and subject to this Lease Agreement. Such restoration, repairs, replacements or rebuild- ing shall be commenced as promptly as possible and prosecuted with reasonable diligence. B. All insurance money paid on account of such damage or destruction shall be paid to the Trustee and applied as hereinafter set forth to the payment 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 "). 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 the Lessee (1) requesting payment of a specified amount of such insurance proceeds; (2) detailing the restoration work involved; - and (3) stating that no part of such cost has previously been made the basis of any request for the with- - drawal of insurance proceeds under this Article. 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 to the Lessee upon receipt by the Lessor and the Trustee of certificates as required by this Article to the effect ttat the restoration has been completed. Pending disbursements as herein provided, 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 invest- ments in which the Trustee may invest amounts in the Construction Fund under the 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 paid and Lessee's obligation to perform all other covenants and agreements 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 obligation of Lessee as herein set forth, or which releases } Lessee therefrom. ORD. BOOK v • • • • ARTICLE XIV CONDEMNATION Section 1401. A. If during the term of this Lease Agreement 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 the Lease term 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 but the award shall be paid to the Trustee. In the event the net amount awarded as damages or paid as a result of such taking (after deducting all attorneys' fees and other expenses and costs in the condemnation proceedings) 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 for which the required bond redemption notice can be given, all principal, interest, 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, 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 such a portion that the Lessee, as determined by the Lessee in its sole discretion, cannot reasonably operate in substantially the same manner as before. The Trustee ORD. BOCK r _°?.a_ 06 is to apply the moneys in its hands to the payment and redemption of all the outstanding bonds and in the event the net amount awarded as damages or paid as a result of such taking (less such fees, expenses and costs), together with the amount then in the Bond Fund, shall be in excess of the amount necessary to pay the total bond redemption expense, if Lessee is not in default in any of its other obligations under this Lease 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, 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 all or substantially all of the leased premises (as defined in A above) 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 Agreement shall be affected or reduced in any way, and (1) If any part of the leased premises is taken, Lessee shall proceed to replace the same so as to maintain substantially the same operating capacity and efficiency, to the extent feasible, subject to Lessee's rights under Article XXIII hereof; and (2) The entire condemnation award shall be paid to the Trustee and by it to the Lessee, and the Lessor hereby assigns the same to the Lessee for the use of the Lessee in proceeding as provided in (1) above. The award shall be transferred to the Lessee in the same manner as is provided in Section 1201 with respect to insurance proceeds, provided that the words "insurance proceeds" there referred to shall for pur- poses of this subparagraph (2) refer to "condemnation - award." If the net condemnation award is in excess of the • amount necessary to replace as specified in (1) above, such excess shall be paid to and belong to the Lessor and the amount of such excess shall be credited against basic rent • ti7 . • next thereafter provided to be paid by Lessee under the provisions of Section 304 hereof, and Lessee shall not be required to pay any basic rent thereafter 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 Agreement, only that portion thereof equal to the remaining 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 with reference to any of its monetary obligations, the amount of excess over and above the amount necessary to satisfy said monetary obligations with reference to which Lessee is in default shall be paid to Lessee. If the net condemnation award is less than the amount necessary for the Lessee to replace as set forth in (1) above, the Lessee shall nevertheless complete the replacement and pay the cost thereof; and (3) If no part of the leased premises 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 304 hereof, and the Lessee shall not be required to pay any basic rent thereafter except when and to the extent basic rent becomes 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 proceed- ings 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 condem- nation; provided, however, nothing in this subsection C shall be construed to diminish or impair in any way Lessee's obligation under subsection A of this 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. 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 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 ORD. BOOK # c& PAGE # y 3 /c. CC77 • award, with the exception of an amount sufficient to pay and discharge all sums due Lessor from Lessee hereunder from the time Lessee's right of possession is terminated to the expiration of the term; provided, however, nothing herein shall interfere with Lessee's options to renew under Section 1901 which shall be applicable even though the use has been taken hereunder. • 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 payment 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. 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 proceedings 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 1404. Lessor covenants that it will not take or condemn, or attempt to take or condemn, all or any part of the leased premises, and hereby expressly waives any right of eminent domain with reference to the leased premises. 'ORD. BOOK ;p r . -, , ARTICLE XV ASSIGNMENT - CONSOLIDATION, MERGER OR SALE Section 1501. A. Lessee may assign this Lease or sublet the leased 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 except as otherwise provided by Section 1501 C relieve the Lessee of any of its obligations under this Lease 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 perform- ance pro tanto by-lessee. B. It is understood and agreed that this Lease Agreement and /or the rents hereunder may be assigned to the Trustee as security for the payment of the principal of and interest on the bonds, but otherwise the Lessor shall make no conveyance or assignment or disposition of all or any part of its rights, title and interests in and to the leased premises and this Lease Agreement without the prior written consent of the Lessee. C. 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 such corporation shall expressly assume in writ- s . by all of the obligations of lessee contained in this Lease and that the net worth of the other corporation after the consolidation, merger or sale be at least equal to the net worth of the Lessee immediately prior to such consolidation, rn 43 00 �h,. .J ld,a ..• e � n.u. ,i } • �. 'Yf� is u a. -1 "f� _._ merger or sale. In the event of the consolidation with or merger into another corporation or the sale of all, or substantially all, of its business and assets by the Lessee, as permitted by this subsection, and the assumption by the other corporation of the obligations hereof, the Lessee shall be relieved from all further obligations hereunder. - DRD. BOOK is 31 ARTICLE XVI PRIORITY OF LEASE Section 1601. Notwithstanding anything to the contrary in this Lease Agreement this Lease Agreement (and any amendment or supplement hereto executed in accordance with and pursuant to the provisions of this Lease Agree- ; ment) and the estate of Lessee hereunder are and shall continue to be superior and prior to the Trust Indenture. 32 ORD. BOOK u___ _PAGE r 4/ 3 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 Agree- ment, notwithstanding the availability of an adequate remedy at law, and each party hereby waives the right to raise such defense in any proceedings in equity. The specific remedies provided for in this Lease 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 relinquishment for the future. No acceptance of rent with knowledge of any default shall be deemed a waiver of such default. • • • ARTICLE XVIII DEFAULT PROVISIONS Section 1801. The following shall be "events of default" under this Lease Agreement and the terms "event of default" or "default" shall mean, whenever they are used in this Lease Agreement, any one or more of the following events: (a) Failure by the Lessee to pay the basic rent, any additional rent payable hereunder or any part thereof and (1) continuation of said failure for a period of five (5) days after notice by telegram or if telegraphic service is not available after notice by mail given to it by either the Lessor or the Trustee for the Lessor that the rent referred to in such notice has not been received or (ii) continuation of said failure for a period of ten ..(10) days. (b) Failure to insure the leased premises to the extent and in the manner required by Section 501 of this Lease Agreement. (c) Failure by the Lessee to observe and perform any covenant, condition or agreement on its part to be observed or performed, other than as referred to in subsection (a) of this Section, for a period of thirty (30) days after written notice, specify- ing such failure and requesting that it be remedied, given to the Lessee by the Lessor or the Trustee unless the Lessor and the Trustee shall agree in writing to an extension of such time prior to its expiration. (d) The dissolution or liquidation of the Lessee or the filing by the Lessee of a voluntary petition in bankruptcy, or failure by the Lessee promptly to lift any execution, garnishment or attach- ment of such consequence as will impair its ability to carry on its operations at the Project, or the commission by the Lessee of any act of bankruptcy, or adjudication of the Lessee as a bankrupt, or assignment by the Lessee for the benefit of its creditors, or the entry by the Lessee into an agreement of composition with its creditors, or the approval by a court of competent jurisdiction of a petition applicable to the Lessee in any proceeding for its reorganization insti- tuted under the provisions of the general bankruptcy act, as • amended, or under similar act which may hereafter be enacted. The term "dissolution or liquidation of the Lessee," as used in this subsection, shall not be construed to include the cessation of the corporate existence of the Lessee resulting either from a merger or consolidation of the Lessee into or with another corporation or a dissolution or liquidation of the Lessee . following a transfer of all or substantially all of its assets as an entirety, under the conditions permitting such actions con- tained in this Lease Agreement. ORD. BOOK #_ PAGE # 3 34 • • Section 1802. Whenever any event of default shall happen, the Lessor or the Trustee may take any of the following remedial steps: (a) The Lessor or the Trustee may, at its option, declare all installments of rent payable for the remainder of the Lease term to be immediately due and payable, whereupon the same shall become immediately due and payable. (b) The Lessor or the Trustee may re -enter and take possession of the leased premises without terminating this Lease Agree- ment, and sublease the leased premises for the account of the Lessee, holding the Lessee liable for the difference in the rent and other amounts payable by such sublessee in such subleasing and the rents and other amounts payable by the Lessee hereunder. (c) The Lessor or the Trustee may terminate the Lease term, exclude the Lessee from possession of the leased premises and use its best efforts to lease the leased premises to another for the account of the Lessee, holding the Lessee liable for all rent and other payments due up to the effective date of any such leasing. (d) The Lessor or the Trustee shall have access to and inspect, examine and make copies of the books and records and any and all accounts, data and income tax and other tax returns of the Lessee. (e) The Lessor or the Trustee may take whatever action at law or in equity may appear necessary or desirable to collect the rent and any other amounts payable by Lessee hereunder, then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Lessee under this Lease Agreement. Any amounts collected pursuant to action taken under this Section shall be paid into the Bond Fund and applied in accordance with the provisions of the Indenture. Section 1803. No remedy herein conferred upon or reserved to the • Lessor or the Trustee is intended to be exclusive of any other available remedy or remedies, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power accruing upon any default shall impair any such right or power or shall be construed to be a waiver thereof but any such right or power may be exercised from time to time as often as may be deemed expedient. • 35 ORD. BOOK • Section 1804. The foregoing provisions of this Article relating to the receipt of moneys by Lessor as the result of an acceleration, upon a reletting or otherwise, are each to be construed as providing that all such payments by Lessee or others shall be made into the Bond Fund referred to in Section 304 and Lessee's said obligations shall further be subject to the provisions of Section 302(a)(2). Section 1805. The Lessor is issuing the bonds pursuant to an election made by it under Section 103 (c) (6) (D) of the Internal Revenue Code of 1954, as amended by Public Law 90 -364. It is the intention of the parties hereto that the interest on the bonds remain free from federal income taxation and to that end the Lessee covenants with the Lessor, with the Trustee and with each of the future holders of any of the bonds or interest coupons appertaining thereto, as follows: (1) Lessee covenants and agrees that it will never permit the occurrence of the circumstances set forth in said Section 103 (c) (6) (D) and (E) so as to cause the loss of federal income tax exemption on the interest on the bonds. (2) Should the interest on the bonds become taxable because of the occurrence of the circumstances set forth in Section 103 (c) (6) (D) and (E) of the Internal Revenue Code of 1954, as amended, Lessee agrees that within 30 days after de- mand by the Trustee it will either, (i) Purchase the leased premises (in which event Lessor agrees to sell the leased premises) for a purchase price of the full amount necessary under the provisions of the Trust Indenture to pay or redeem (on the first day thereafter on which all outstanding bonds may be redeemed after giving the necessary notice) all outstanding bonds (including,with - out 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 payment and redemption, or (ii) Prepay rent in the full amount necessary under the provisions of the Trust Indenture to pay or redeem (on the first day thereafter on whi ch 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 pay - ment and redemption, and thereafter to continue in possession as Lessee with all provisions of the Lease Agreement (except Lessee's basic rent obligations which shall be discharged) . to continue in full force and effect at the extension annual rental specified in Section 2001. TS • • The obligation of the Lessee to either purchase or prepay rent, as above specified, shall be mandatory and shall supersede any other option hereunder so that upon redemption the redemption premium specified in the Trust Indenture as applicable to a redemption by virtue of this Section 1805 must be paid. The amount set forth above (the specified purchase price in (i) or the specified amount of rent to be prepaid in (ii) shall constitute total compensation to the Lessor and the •holders of the bonds as a result of an occurrence of the circumstances set forth in Section 103(c)(6)(D) and (E) of the Internal Revenue Code of 1954, as amended, and the resultant loss of federal income tax exemption of interest on the bonds. (3) The Lessor and Lessee will cooperate to the end of . complying with any regulations, including any filing or reporting requirements, that may be promulgated pursuant to S ection 103(c)(6)(D) and (E) of the Internal Revenue Code of 1954, as amended. A copy of each such filing or report shall be promptly furnished to the Trustee. If Lessor or Lessee is advised that an official determination has been made that interest on the bonds has become taxable because of the occurrence of the circumstances set forth in Section 103(c)(6)(D) and (E) of the Internal Revenue Code of 1954, as amended, Lessor or Lessee shall promptly notify the Trustee of the same. Section 1806. The Lessor and the Lessee covenant that neither of them shall take any action or suffer or permit any action to be taken or condition to exist which causes or may cause the interest payable on the bonds to be subject to federal income taxation. Without limiting the generality of the fore- going, the Lessor and the Lessee covenant that the proceeds of the sale of bonds will not be used directly or indirectly in such manner as to cause the bonds to be treated as "arbitrage bonds" within the meaning of Section 103(d) of the Internal Revenue Code of 1954, as amended. If ORD. BOOK # _ Z PAGE # V-3 37 • • l 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 ($100) 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 III hereof and otherwise upon the terms, conditions and provisions of this Lease Agreement. The option provided for herein shall be deemed automatically exercised by Lessee (without requirement of any notice of exercise) unless thirty (30) days prior to the end of the initial term or any extension term Lessee shall give Lessor written notice by certified or registered mail (with or without return receipt requested) that Lessee does not elect to have the lease term extended beyond the then current initial or extension term. Section 1902. A. Prior to November 1, 1982, the Lessee shall have the right and option to purchase the leased premises if, but only if: (1) The leased premises shall sustain major damage or destruction; or Title to all or substantially all of the leased premises shall be condemned as provided in Article XV hereof; or (iii) 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 administra- tive body entered after Lessee's contest thereof in good faith, or change in Lessor's legal organization or status, this Lease Agreement becomes void or unenforceable or impossible of per- , forrnance in accordance with the intent and purposes of the parties as expressed in this Lease Agreement, or unreasonable burdens or excessive liabilities are imposed upon either party to it; or (iv) There is legal curtailment of Lessee's use and occupancy of all or substantially all of the leased premises for any reason other than condemnation referred to in subsection (ii); or (v) This Lease Agreement is terminated prior to expiration of its initial term, or any extension term, for any reason other than default by the Lessee. ORD. EOOK '// �PAGE 5 , g 4/3 ..., 3S The term "major damage or destruction" as used in subsection (1) 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 premises 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 manu- • facturing operations therein for a period of seventy -five (75) days or the resto- ration cost of which would exceed the total amount of insurance carried on the leased premises in accordance with the provisions of Article V 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 November 1, 1982, and during the remainder of the initial term and during any extension term, Lessee shall have the unconditional right and option to purchase the leased premises at any time. C. At the expiration of the initial term or any extension term and for a period of ninety days thereafter (if the purchase options under the pro- visions of Paragraphs A, B or C of this Article XX have not been exercised) Lessee shall have the further unconditional right and option to purchase the leased premises. D. Purchase Price . The purchase price payable if the Lessee exer- cises Lessee's option to purchase the leased premises under the provisions of Paragraphs A and B or C of this Section, shall be 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 payment and redemption. In any case, oZ -_ If no bonds shall be outstanding at the time of purchase, or the redemption or payment of the bonds shall be or have been otherwise provided for, the the purchase price of the leased premises shall be One Hundred Dollars ($100). E. Any of the foregoing options may be exercised by giving written notice to Lessor, with a copy to the Trustee, of the exercise thereof speci- fying the:time and place of closing. At the closing, Lessor shall, upon pay- ment 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 Agreement; provided, however, that if such option is exercised under the provisions of subparagraph A(iii) of this Section, such title may be subject to the rights, titles and interests 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. !% ORD. BOOK PAGE • ARTICLE XX NOTICES 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 (in the case of the Lessee any such personal service must be on an executive officer at Lessee's home office in Bluffton, Indiana), or when sent postage prepair by first class mail by deposit thereof in a duly constituted United States Post Office of 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: Franklin Electric Co, , Inc. Jacksonville, Arkansas 72076 Attention: Plant Manager with copy to: Franklin Electric Co., Inc. Bluffton, Indiana 46714 Attention: President If intended for Lessor: City of Jacksonville, Arkansas • Office of the Mayor Jacksonville, Arkansas 72076 - If intended for Trustee: Any part or the Trustee may change the address and the name of addressee to which subsequent notices are to be sent by notice to the other parties given as aforesaid. ORD. BOOK g & PAGE xt 11- 41 • • • I \ ARTICLE XXI LIMITATION OF LESSOR'S LIABILITY Section 2101. This Lease Agreement is entered into under and pursuant to the provisions of Act No. 9 and no provision hereof shall be construed so as to give rise to a charge against the general credit of Lessor and any liability of Lessor hereunder is limited to the interest of Lessor in the bond proceeds, the leased premises, rentals and revenues derived from the leased premises, insurance proceeds, condemnation proceeds and other avails thereof. • LH 2 N • ..... -.- • • ARTICLE XXII GENERAL Section 2201. This Lease Agreement shall be construed and enforced in accordance with the laws of the State of Arkansas. Wherever in this Lease Agreement is 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 Agreement or the appli- cation thereof to any person or circumstance shall, to any extent, be deter- mined to be invalid or unenforceable, the remainder of this Lease Agreement and the application of its provisions to persons or circumstances other than those as to which it has been determined to be invalid or unenforceable, shall not be affected thereby, and each provision of this Lease Agreement shall be valid and shall be enforced to the fullest extent permitted by law. Section 2203. The Article captions in this Lease Agreement are for convenience and reference only and in no way define, limit or describe the scope or intent of this Lease Agreement or any part thereof, or in anywise affect this Lease Agreement, and shall not be considered in any construction thereof. Section 2204. It is agreed that after the bonds are fully paid and discharged, or adequate provision is made for their payment and discharge, and all proper fees and expenses of the Trustee are paid or adequate pro- vision made for their payment, the Trustee shall cease to have any right, title and interest in, to or under this Lease Agreement. Thereafter, all DGn• BOOK PAGE • • 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 per- form any-other covenant, condition, promise or agreement set forth in this Lease 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 enforce each and every right and remedy herein accorded in this Lease Agreement 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 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). Section 2207. It is agreed that the Lessor and the Lessee shall not alter, modify or amend any of the terms of this Lease Agreement without the prior written approval of the Trustee, which consent will not be unreasonably withheld. • y;) D. BOOK PAGE '.' r ' • • ARTICLE XXIII REMOVAL AND DISPOSAL OF PROPERTY Section 2301. The Lessor and the Lessee recognize that after the leased machinery and equipment is installed portions thereof may become inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary in the operation of the improvements in which the leased machinery and equip- ment is installed as a modern manufacturing plant. The Lessor shall not be under any obligation to renew, repair or replace any such inadequate, obso- lete, worn out, unsuitable, undesirable or unnecessary items of the leased machinery and equipment. In any instance where the Lessee in its sound discretion determines that any items of the leased machinery and equipment have become inadequate, obsolete, worn out, unsuitable, undesirable or - unnecessary, A. The Lessee may remove such items of the leased machinery and equipment and (on behalf of the Lessor) sell, trade iri, exchange or otherwise dispose of them without any responsi- bility 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 any - where in the improvements other machinery or equipment having equal or greater utility (but not necessarily the same function) in the operation of the improvements as a modern manufacturing plant, and provided further than such removal and substitution shall not impair the operating unity of the _ improvements. All such substituted machinery or equipment shall be the sole property of the Lessor, shall be and become a part of the leased machinery and equipment subject to this Lease Agreement and shall be held by the Lessee on the same terms and conditions as items originally comprising the machinery and equipment, or B. .The Lessee may remove such items of the leased machinery and equipment from the improvements 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 improvements other items of machinery or equipment in lieu thereof, provided (1) that in the case of the sale of any such leased machinery or equipment to anyone other than itself or in case of the scrapping thereof, the Lessee pays into the 45 Bond Fund the proceeds from such sale or the scrap value thereof, as the case may be, (2) that in the case of the trade in of such leased machinery or equipment for other machinery or equipment not to be installed in the improve- ments, the Lessee pays into the Bond Fund the amount of the credit received by it on such trade in, and (3) that in the case of the sale of any such leased 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 • - calculated in accordance with generally accepted accounting practice. In any case where the Lessee purchases and installs and substitutes 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 and equipment. The Lessee will promptly report such removals, substitutions, sale s and other dispositions of items of the leased machinery and equipment to the Trustee, will pay to the Trustee such amounts as are required by the provisions of the preceding Subsection 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 conform the title of the Lessor (subject to this Lease Agreement) to any items of machinery and equipment that under the provisions of this Section are to become' a part of the leased machinery and equipment. The Lessee will not remove, or permit the removal of any of the leased machinery and equipment from the premises except in accordance with the provisions of this Lease Agreement. Section 2302. 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 Section 2301. ORD. LOOK PAGE # L /3 46 • • Section 2303. Nothing in this Article XXIII, nor any acts of Lessee or Lessor pursuant to the provisions of this Article XXIII, shall in any manner modify, diminish or otherwise affect Lessee's basic and additional rent obli- gations or any other obligations of Lessee hereunder. • • • • - ARTICLE XXIV RECORDING i Section 2401. This Lease and Agreement and every assignment and modification thereof shall be recorded in the office of the Circuit Clerk and Ex- OfficiorRecorder of Pulaski County, Arkansas. • J • • /1 • , 33 = ORD, cC ■ IN WITNESS WHEREOF, the parties hereto have caused this Lease and Agreement to be signed in several counterparts, each of which may be considered an original without the presentation of the others, by their duly authorized officials and officers as of the day and year first hereinabove written. CITY OF JACKSONVILLE, ARKANSAS LESSOR By • Mayor ATTEST: City Clerk (SEAL) FRANKLIN ELECTRIC CO. , INC. LESSEE By Title ATTEST: Title (SEAL) • -r• tr n tr 'W 49 • • ACKNOWLEDGMENT STATE OF ARKANSAS COUNTY OF PULASKI' On this day of , 1972, 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 the City of Jacksonville, Arkansas, a municipality of the State of Arkansas, to me persona lly known, who stated that they were duly authorized in their respective capacities to execute the foregoing instrument for and in the name of the City, and further stated and acknowledged that they had signed, executed and delivered the foregoing instrument for the consideration, uses and purposes therein mentioned and set forth. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this day of , 1972. Notary Public • • My commission expires: • 1/ • I 3 ORD. BOOK - u - - - JO • ACKNOWLEDGMENT STATE OF • ) COUNTY OF On this day of , 1972, 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 Franklin Electric Co., Inc., an Indiana 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 foregoing instrument for and in the name and behalf of the corporation, and further stated and acknowledged that they had so signed, executed and delivered the foregoing instrument for the consideration, uses and purposes therein mentioned and set forth. IN TESTIMONY WHEREOF, I have hereunto set my hand and official seal this day of , 1972. Notary Public My commission expires: (SEAL) ORD. BOOK # 'Z PAGE # 5�` 51 i - �+t i • • EXHIBIT A TO LEASE AND AGREEMENT BY AND BETWEEN THE CITY OF JACKSONVILLE, ARKANSAS AND FRANKLIN ELECTRIC CO. , INC. The following described real estate situated In Pulaski County, Arkansas, to wit: • • • • • • .1 • • ORD. B00} `_PAGE 0 Kr Section 2. That the Mayor and City Clerk be and they are hereby authorized and directed, for and on behalf of the City, to do all things, execute all instruments and otherwise take all action necessary to the realization of the City's rights and to the discharge of the City's obligations as Lessor under the Lease and Agreement. Section 3. That the provisions of this Ordinance are hereby declared to be separable, and if any 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, phrases or provisions. Section 4. That all ordinances and parts of ordinances in conflict here- with are hereby repealed to the extent of such conflict. Section 5. That there is hereby found and declared to be an immediate need for the securing and developing of industry at the City in order to provide additional 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 are necessary for the accomplishment of these public benefits and purposes. It is, therefore, declared that an emergency exists, and this Ordinance, being necessary for the immediate preservation of the public health, safety and welfare, shall be in force and take effect immediately upon and after its passage. PASSED: „i „ , 1972 APPR*'ED• i / ay or ATTEST: Cfty Clerk (SEAL) APPROVED AS TO FORM; 2 � QRD BOOK PAGE # #_ . E _. Race; GI by 11. Lta rney 4 • CERTIFICATE • The undersigned, City Clerk of the City of Jacksonville, Arkansas, hereby certifies that the foregoing pages are a true and compared copy of an Ordinance passed at a session of the City County of Jacksonville, Arkansas, held at the regular meeting place of the Council of said City at o'clock .m. on the day of 1972, and that said Ordinance is of record in Ordinance Record Book page , now in my possession. GIVEN under my hand and seal this day of 1972. City Clerk (SEAL) •