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ORDINANCE INO.
AN ORDINANC9 AUTHORIZING A LEASE AND AGREE-
MENT BYAND 'BETWEEN THE CITY OF BATESVILLE,
ARKANSAS AS LESSOR AND WESTPORT CASUALS, INC.,
AN ARKANSAS CORPORATION, AS LESS -L" , IN
SUBSTANTIALLY THE FORM AND WITH SUBSTANTIALLY
THE CONTENTS SET FORTH IN AND MADE A PART OF
THIS ORDINANCE; AUTHORIZING THE EXECUTION
AND DELIVERY OF SAID LEASE AND AGREEMENT;
PRESCRIBING OTHER MATTERS RELATING THERETO;
AND DECLARING AN EMERGENCY.
BE IT ORDAINED by the City Council of the 'City of Batesville,
Arkansas:
Section 1. That there be, and there is hereby authorized the
execution and delivery of a Lease and Agreement wherein the City of
Batesville, Arkansas ("City") is Lessor and Westport Casuals, Inc.,
an Arkansas corporation ("Westport") 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 said Lease and Agreement for and on behalf of the City. The
form and contents of said Lease and Agreement, which are hereby approved
and which are made a part hereof, shall be substantially as follows:
STATE OF Ai K, NSf`�S
County of INDEPENDENCE
1, Dala.s Hucj'.e's, C!c;rk of 11l'' lircuif Co.`ra.
cor der within sr.d fcr ;Ise Cour,',J,:t�i
file ann=z:� nrd Lc_rG^.1 �,�}'`irUiii'.Cilt t;� .'.F "�'6 f'L3j for
record f,. {^'/ GTiI ;1- J(J vl1+-- G 07L'r----
A.D. 190_-8 -t _ 10 :30 A
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LEASE AND AGREEMENT
This LEASE AND AGREEMENT made as of this first day of December,
1968, by and between the CITY OF BATESVILLE, ARKANSAS ("Lessor") and
WESTRORT CASUALS, INC., a corporation organized under and existing
by virtue of the laws of 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 pur-
pose, 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 out-
standing trust indenture, 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 anci affirmatively so represents to Lessor; and
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WHEREAS the industrial undertaking will consist of lands, build-
ings, improvements, machinery, equipment and facilities; and
WHEREAS Lessor and Lessee hereby recite knowledge that Lessor
has undertaken to furnish permanent financing of the Project costs, expenses
of authorizing and issuing the bonds and making provision for interest during
construction, if necessary, by the issuance of Industrial Development Revenue
Bonds under Act No. 9 (the "bonds") in an amount not to exceed Five Hundred
Thousand Dollars ($500,000), and pursuant to its undertaking to furnish said
permanent 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; and
WHEREAS the bonds are being sold and issued in series, with
there being initially issued Series A in the principal amount of $375,000, and
whenever the unqualified word "bonds" appears herein the reference shall be
to all bonds regardless of series; and
WHEREAS Lessor and Lessee recite knowledge that a bank or trust
company will be Trustee for the holders and registered owners of the bonds
being issued by Lessor under Act No. 9 with the original Trustee being
First National Bank of Kansas City, Kansas City, Missouri, and the bonds
will be secured by a Trust Indenture executed and delivered by and between
Lessor and the said Trustee (the Trustee will be herein referred to as the
"Trustee", and the Trust Indenture, which sets forth the nature and extent
of the security for the payment of the principal of and interest on the bonds,
the rights and obligations of Lessor, the Trustee and the holders and
registered owners of the bonds, and which will otherwise state the terms and
conditions upon which the bonds are issued and secured, will be herein
sometimes referred to as the "Trust In&nture" or the "Indenture");
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WHEREAS Lessee is a subsidiary of Stern -S legman -Prins Company,
a Missouri corporation ("Stern") and Stern has agreed to unconditionally guarantee
performance by the Lessee of its obligations under this Lease by an instrument
identified as the "Stern Guaranty Agreement"; and
WHEREAS Stern is authorized under its Articles of Incorporation and
By -Laws and under the laws of the State of its incorporation to enter into the Stern
Guaranty Agreement and to perform its covenants and obligations thereunder and
Stern is not prohibited under the terms of any outstanding Trust Indentures, deeds
of trust, mortgages, loan agreements or other instruments or evidences of in-
debtedness of whatever nature from entering into the Stern Guaranty Agreement
and discharging and performing all covenants and obligations of its part thereunder
and has affirmatively so represented to Lessor;
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:
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ARTiC LE I
CONSTRUCTION OF PROIECT
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Section 101. Lessor agrees that it will acquire the land described
in Exhibit A attached hereto and made a part hereof and the improvements thereon
and will construct additional improvements and facilities (the "Project") accord-
ing to plans, specifications and drawings supplied by Lessee and at a contract
price, and otherwise as provided in a construction contract or contracts approved
in writing by Lessee. Lessor also agrees that it will at its own expense purchase
and install in the Project machinery, equipment and other personal property, of
such type, and purchased from such suppliers and at such prices, as Lessee
shall designate or approve in writing. As soon as awarded, all contracts in
connection with the Project shall be initialed by a duly designated representative
of Lessee and an initialed copy delivered to Lessor and to Lessee, and such
initialed copies are by reference made a part of this Lease and Agreement.
Lessor shall obtain all necessary approvals from any and all govern-
mental agencies requisite to the constructing and equipping of the Project, and
the Project shall be constructed and equipped in compliance with all State and
local laws, ordinances and regulations applicable thereto. Upon completion of
the constructing and equipping of the Project, the Lessor will furnish to the
Lessee all required occupancy permits and authorizations from appropriate
authorities, if any be required, authorizing the occupancy and uses of the Project
for the purposes contemplated by the Lessee. The Lessor shall not amend, modify,
authorize or undertake any changes, alterations, .extras or additions to or from the
plans, specifications and drawings supplied by Lessee as hereinabove provided for
or any contracts entered intc with contractors and equipment and material manufac-
turers and suppliers unless and until the same shall have been submitted to
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Lessee, and both Lessor and Lessee shall have agreed to and approved the said
changes, alterations, extras and additions in writing, prior to their being made.
Lessor shall, however, cause to be made and shall authorize all reasonable
requests by Lessee, for changes in the plans, specifications and drawings or
for additions or extra work. All requests, approvals and agreements required on
the part of Lessor, and on the part of Lessee shall be in writing, signed by a duly
designated representative of the party making such request, granting such approval,
or entering into such agreement. The Lessor and Lessee shall, concurrently with
the delivery of this Lease and Agreement, notify each other of the representative
of each. It is agreed that each party may have more than one representative and
may change the representative or representatives from time to time, with each
such change to be in writing forwarded to the other party. The representative of
each party so designated shall be authorized to enter .into and execute any con-
tracts 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 agree-
ment 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 pur-
chased by it as hereinabove provided, or from the date the risk of loss, under
governing substantive law, is on the Lessor as purchaser if such date be after
the date of purchase, and until the insurance required to be carried by Lessee
under the provisions of this Lease and Agreement shall be placed in full force and
effect, the usual fire and extended coverage casualty insurance, with the insur-
ance to be in the amount necessary to prevent the application of the co-insurance
provisions of the subject policies but not less than 80' of the full insurable value
of the machinery, equipment and other personal property involved, and with the
premiums thereon to be considered part of the Project costs (hereafter defined),
and the Trustee shall be made a party insured as its interest may appear.
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Section 102. Lessor I -Md L esSOI- agree that the necessary steps
shall be taken to see that there is in full force and effect at all times during
the constructing and equipping of the Project the usual insurance coverage
applicable to similar construction projects, all of which shall be subject to
the prior written approval as to amount and companies by the Lessee and which
shall be made payable to the Lessor and the Lessee as their interests may ap-
pear and with a standard mortgagee payment clause in the case of the builder's
risk insurance payable to the Trustee as its interest may appear. The premiums
thereon shall be considered part of the Project costs (hereafter defined).
Section 103. Costs incurred by Lessor in discharging its obliga-
tions under Section 101 hereof and in other sections of this Article I shall be
referred to as "Project costs" and it is agreed that the Project costs will not
exceed the sum of Five Hundred Thousand Dollars ($500,000) , or the avail-
able proceeds received from the sale of the bonds , or any series thereof if
less than the total authorized principal amount has been delivered plus any
income or other gains from investments of moneys in the Construction Fund
(hereafter referred to) and less any losses on investments of moneys in the
Construction Fund, and that if the Project costs should exceed said amount,
the Project will be completed, and the Lessee hereby agrees to pay the entire
amount of any such excess. Project costs, as that term is used in this Lease
and 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 con-
struction, including, without limitation, the following:
(1) All amounts paid by Lessor in discharge of its obligations
under Section 101 hereof, including without limitation, all amounts paid under
all construction, engineering, architectural or other contracts;
(2) All amounts paid by Lessor for extras, changes or additions
agreed to by Lessor and Lessee in accordance with provisions of Section 101;
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(3) All payments incurred in acquiring machinery, equipment and
other personal property and paying premiums for insurance coverage in connection
therewith as specified in Section 101 hereof;
(4) All costs and expenses incurred in installing machinery, equip -
meat and other personal property in the building;
(5) All amounts necessary to reimburse Lessce for any work performed,
materials purchased or expenditures incurred by Lessee pertaining to or in con-
nection with the Project and its operation including, without limitation, the
charges of any architects or engineers retained by Lessee to prepare plans,
specifications 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) The amount necessary to refinance the indebtedness secured
by the existing industrial facilities;
(7) The amount necessary to permanently fund part of the existing
industrial facilities;
(8) 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;
(9) The cost of any policy or policies of title insurance, if requested
by Lessee, and the cost of any performance bonds and insurance procured in
connection with the constructing and equipping of the Project; and
(10) 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 prw isions of Section
101 hereof and other sections of this Article I as constituting part of the Project
costs .
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It is understood that the electors of Lessor have authorized the
issuance of not to exceed $500, 000 in principal amount of boners and that the
initial issue is to be designated "Series A" and is to be in the principal amount
of $375,000, which will leave the balance of the total authorized issue to be
issued in series from time to time in the future. It is agreed that in the case of the
delivery of each series there will be deducted from the total sale proceeds (being
the purchase price paid by the purchaser plus accureci interest from the date of
the bonds to the date of delivery) the amount necessary to cover interest require-
ments, if any amount be necessary, until lease rentals are available hereunder in
sufficient amounts therefor and that the amount so deducted will be dcoosited in
a Bond Fund (called "Act No. 9 Bond Fund" or "Bond Fund") to be established
pursuant to the provisions of the Trust Indenture securing the bonds, and that the
remainder of the total sale proceeds in the case of the delivery of each series
shall be deposited in a Construction Fund to be established pursuant to the pro-
visions of the Trust Indenture. Lessor agrees that it will execute and deliver
from time to time, pursuant to the written request of the Lessee, additional series
of bonds of said total authorized principal amount, and Lessee shall have and
hereby assumes full responsibility for finding purchasers for said additional bonds.
Said additional bonds shall be issued in accordance with and pursuant to the
conditions set forth in the Trust Indenture pertaining thereto.
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It shall be provided in the Trust Li,fenture (and. L,:.ssor agrees to cause
appropriate provisions to be made tliereir_) that t1.1e moneys in the Construction
Fund shall be expended solely for the payment of the Project costs. Disburse-
ments shall be made from the Construction Fund in accordance v,7ith 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, and the Lessee shall be credited with said amount against Lessee's
basic rent obligations set forth in Section 203 of this Lease and Agreement, with
such credit to be against the basic rent obligations as the same become due and
payable under Section 203, beginning with the first installment of basic rent due
thereafter, and the Lessee shall not be required to pay any basic rent thereafter,
except when and to the extent basic rent has become due and payable in excess
of such credit.
Section 104. Lessee and its agents, servants, employees and
representatives shall have free access to the Project during the construction
thereof, and Lessee agrees that, immediately upon completion_ of the construct -
inn, and equipping of the Project, it will enter into full possession of and occupy
the same under and pursuant to the terms of this Lease and Agreement. Lessee
and its agents , servants , employees and representatives shall have the right to
store and install machinery, equipment, fixtures , supplies and other personal
property in the Building during construction so long as such activities on the
part of Lessee do not unreasonably interfere with work under construction and
equipment contracts. Lessor covenants that the Lessee, upon paying the rentals
and perfonning all covenants, obligations and agreements on the part of Lessee
to be performed under this Lease and Agreement, shall and may peaceably and
quietly have, hold and enjoy the leased premises (as hereafter defined) for the
term of this Lease and Agreement.
Section 105. A. Lessor covenants that it will take such action and
institute such proceedings as shall be necessary to cause and require all
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contractors and material suppliers to coriiplete ti-eir contracts diligently in
accordance with the terms of said contrac.:ts, including, without limitation, the
correcting of any defective work, t,; ith all e.�penses hricurred by Lessor in con-
nection with the performance of its obligations under this Section 105 to be con-
sidered part of the Project costs as defined in Section 103, and Lessor agrees
that the Lessee may, from time to time, in its own name, or in the name of Lessor,
take such action as may be necessary or advisable, as determined by Lessee, to
insure the construction of the Project in accordance with the terms of the con-
struction contract and the installation of machinery and equipment in accordance
with any applicable contract pertaining thereto, to insure the peaceable and quiet
enjoyment of the leased premises (as hereafter defined) for the term of the Lease
and Agreement, and to insure the performance by Lessor of all covenants and
obligations of Lessor under this Lease and Agreement, with all costs and expenses
incurred by Lessee in connection therewith to be considered. as part of the Project
costs as defined in Section 103.
B. Lessor will assign and extend to Lessee all vendor's warranties
received by Lessor in connection with machinery and equipment purchased by
Lessor for the Project, together with any warranties given by contractors,
manufacturers or service organizations who perform construction work or install
any machinery and equipment on the leased premises (as hereafter defined). If
requested, Lessor will execute and deliver instruments of assignment to Lessee
to accomplish the foregoing.
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!\-RTICLL- II
TERM OF L -LASE AND RENTAL
Section 201. Lessor, for and in consideration of Lhe rents, coven-
ants and agreements herein reserved, mentioned and contained, on the part
of Lessee to be paid, kept and performed, agrees to and does hereby lease
to Lessee, and Lessee agrees to, and does hereby lease, take and 'hire from
Lessor, subject to the terms, conditions and provisions of this Lease and
Agreement expressed the following:
(a) The .land situated in Independence County, Arkansas described
in Exhibit A attached hereto (the "Land");
(b) The buildings, structures and other improvements now or at
any time hereafter erected and installed on the Land;
(c) All accretions, casements, rights of way and appurtenances
belonging or in any wise appertaining to the Land and/or the improvements
described in (a) and (b) above; and
(d) All machinery, equipment and other personal property of every
kind and nature whatever acquired by Lessor and paid for out of the Construc-
tion Fund and placed on or in the Land and/or the improvements described in
(b) above, or elsewhere, including, without limitation, all replacements and
substitutions which become the property of the Lessor pursuant to the pco-
visions 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 on the leased pre-
mises (as hereafter defined) and shall be marked by an appropriate tag, or
other device, as being the property of the Lessor, The said machinery, equip-
ment and other personal property leased hereby shall be referred to herein as
"Lessor's machinery and equipment".
In
The properties described in (a), (b), (c) and (d) above are herein
collectively referred to as the "leased premises".
TO HAVE AND TO HOLD the leased premises unto the Lessee for
the term of this Lease and Agreement as hereafter set forth.
Section 202.
The term of this Lease and Agreement shall com-
mence December 1, 1968, and shall end at midnight on December 1, 1988.
Section 203. (a) Basic Rent.
(1) Subject to the credit provided in Section 103, Section 1301,
and Section 1401 B (ii) , Lessee covenants to pay to Lessor, in the manner
hereafter provided in Section 204, basic an,aual rent as follows, paya.ble
semiannually on the dates and in the amounts indicated:
Nr vow
November 20,
1969
$ 21, 250.00
May 20,
1970
10, 950.00
November 20,
1970
20, 950.00
May 20,
1971
10, 650.00
November 20,
1971
20, 650.00
May 20,
1972
10,350.00
November 20,
1972
20, 350.00
May 20,
1973
10, 050.00
November 20,
1973
25,050.00
May 20,
1974
9, 600.00
November 20,
1974
24, 600.00
May 20,
1975
9, 150.00
November 20,
1975
24, -150.00
May 20,
1976
8, 700.00
November 20,
1976
23, 700.00
May 20,
1977
8, 250.00
November 20,
1977
23, 250.00
May 20,
1978
7, 800.00
November 20,
1978
22, 800.00
May 20,
1979
7, 350.00
November 20,
1979
27, 350.00
May 20,
1980
6, 750.00
November 20,
1980
26, 750.00
May 20,
1981
6, 150.00
November 20,
1981
26, 150.00
May 20,
1982
5,550.00
November 20,
1982
25,550.00
May 20,
1983
4, 950.00
November 20,
1983
29, 950.00
May 20,
1984
4, 200.00
November 20,
1984
29, 200.00
May 20,
1985
3,450.00
November 20,
1985
28,450.00
May 20,
1986
2, 700.00
November 20,
1986
32, 700.00
May 20,
1987
1,800.00
November 20,
1987
31,800.00
May 20,
1988
900.00
November 20,
1988
30, 900.00
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In the event a basic rent pairrnenu date falls on a non -banking
day of the Trustee , the basic rent payr=t involved shall not be due and
payable until the time of opening for business on the next succeeding day
thereafter that is a banking day.
It is understood that of the $500,000 in principal amount of bonds
of the City authorized for the purpose of fi?zancing the Project costs as aforesaid,
only $375, 000 in principal amount are being initially issued. It is hereby agreed
that when additional bonds of said total authorized principal amount are issued
and delivered, a supplemental Lease and Agreement will be executed and delivered
by and between the Lessor and Lessee increasing the basic rent above set forth
in the amount necessary to provide for the debt service requirements on the bonds
additionally issued. It is further agreed that the execution and delivery of said
Supplemental Lease and Agreement or Agreements, as aforesaid, by the officials
of the Lessor and of the officers of the Lessee is expressly authorized, and addi-
tional action to authorize the same on the part of the governing body of the Lessor
or on the part of the Board of Directors of the Lessee is not necessary,
(2) If, during any year while any of the bonds shall be out-
standing the above specified basic rent shall be insufficient to pay the
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 204, is sufficient to pay in full the principal
of (including redemption premiums, if any), interest on and the Trustee's
and Paying Agent's fees in connection with 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.
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(b) Additional Rent. During the term hercof, Lessee small 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 de_`ined in
Section 301), 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 additional rent
hereunder are or become in excess of the amounts required for the purpose for
which they were paid, such excess amounts shall be refunded to the Lessee.
(c) So long as any of the bonds, or coupons relating thereto, 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
on the dates or at the times specified without notice or demand, and without
abatement or set-off, and regardless of any contingencies whatsoever, and not-
withstanding any circumstances or occurrences that may now exist or that may
hereafter arise or take place, including, but without limiting the generality of the
foregoing:
(1) The unavailability of the leased premises for use and occupancy
by the Lessee at any time by reason of the failure to complete the Project by any
particular time or at all or by reason of any other contingency, occurrence or cir-
cumstance whatsoever (except in the event Lessee exercises the option to purchase
and pays the purchase price as specified in Section 1902 hereof);
(2) Damage to or destruction of the leased premises, or any part
thereof (except in the event Lessee exercises the option to purchase and pays
the purchase price as specified in Section 1303 hereof);
(3) Legal curtailment of Lessee's use and/or occupancy of the leased
premises, or any part thereof (except in the event Lessee exercises the option to
purchase and pays the purchase price as specified in Section 1902 hereof);
(4) Change in Lessor's legal organization or status;
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(5) The taking of title to or the temporary use of the whole or any
part of the leased premises by condemnation as provided in Article XIV hereof
(except in the case of the taking of title to all or substantially all of the leased
premises and the payment by Lessee of the additional rent in the amount that
the total bond redemption expenses exceeds the net amount awarded as dam-
ages plus the funds in the Bond Fund, as specified in Section 1401 A, and
except in the event Lessee exercises the option to purchase and pays the pur-
chase price as specified in Section 1403);
(6) Any assignment under the provisions of Article XV, including
without limitation, an assignment as part of a transaction involving merger,
consolidation or sale of all or substantially all of Lessee's assets, as pro-
vided in Section 1501; subject, however, to the provisions of Section 1501
that performance by an assignee or sub -lessee shall be considered as per-
formance pro tanto by Lessee;
(7) Any termination of this Lease and Agreement for any reason
whatsoever, including, without limitation, termination under Article XVIII,
subject, however, to the provisions of Article XVIII;
(8) Failure of consideration or commercial frustration of purpose;
(9) Any change in the tax or other laws of the United States of
America or of the State of Arkansas; or
(10) Any default of the Lessor under this Lease and Agreement,
or any other fault or failure of the Lessor whatsoever (except in the event
Lessee exercises the option to purchase and pays the purchase price as
specified in Section 1902 hereof);
Section 204. Payments of basic rent shall be made to Lessor
by Lessee remitting the same directly to the Trustee, for the account of
Lessor, and shall be deposited by the Trustee in the trust account provided for
in the Trust Indcnture designatec'i 'Bate.sville, .IrkCinsas 1968 Industrial
Development Bond Fund- Westport Project" (the "Bond Fund"), to be used by
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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 Pond Fund, including the amount of bonds paid and outstanding.
Additional rent specified in Section 203 (b) shall be paid by Lessee remitting the
same directly to the Trustee, for the account of Lessor, in the case of the Paying
Agent's fees and 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 provi-
sions of this Lease and Agreement, Lessor or Trustee shall make payment thereof.
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ARTICLE III
TAXES AND ASSESQNIENTS IMPOSITIONS
Section 301. Subject to the provisions of Section 302, Lessee
shall pay all taxes and assessments, general and specific, if any, levied
and assessed on the leased premises during the term, and all water and
sewer charges, assessments, and other governmental charges and impositions
whatsoever, foreseen and unforeseen, ,which if not paid when due, would
impair the lien of the Trust Indenture on the leased premises or the security
of the bonds, or encumbar Lessor's title, 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 concerning
any imposition. Lessee may pay any imposition in installments if so payable
by law, whether or not interest accrues on the unpaid balance.
Section 302. The parties hereto recite knowledge of the decision
of the Supreme Court of the State of Arkansas in Wayland M. Snapp, 232 Ark.
57, 334 S.W.2d 633, concerning the exemption of properties owned by
municipalities and used for securing and developing industry under and
pursuant to the provisions of Act No. 9. The Lessor covenants that it will
not part with title to the leased premises or any part thereof during the term
or take any other affirmative action which may reasonably be construed as
tending to cause or induce the leer or assessment of ad valorem taxes on the
leased premises.
The Lessor and the Lessee acknowledge that (a) under their and
other interpretations of present law, no part of the leased premises will be
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subject to ad valorem taxation by the State of Arkansas or by any political
or tai>ing sub -division thereof, and (b) this factor, among others, materially
induced the Lessee to enter into this Lease and Agreement. However, the
Lessee will pay all taxes and assessments, if any, in connection with the
Project, which may be lawfully levied or assessed upon the leased premises,
when the same shall become due, but only if and to the extent that such
taxes or assessments, if any, shall result in a lien or charge upon the
leased premises; provided, however, that Lessee shall not be required to pay
any such taxes or assessments so long as the Lessee shall contest the same,
unless by such action the title of the Lessor to -Iny part of the Project
shall be materially endangered or the Project or any part thereof shall become
subject to loss or forfeiture, in which event such taxes or assessments shall
be paid prior to becoming delinquent. The Lessor hereby agrees that it will
cooperate with the Lessee in resisting any such taxes or assessments if and
to whatever extent the Lessee may request.
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ARTICLE IV
IT\Tq FT RAT\TrF
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Section 401 A. Lessee shall, at Lessee's sole cost and expense, keep
all improvements constituting part of the leased premises and Lessor's machinery
and equipment insured against loss or damage in accordance with the customary
insurance practices of Lessee:
(i) Against the perils of fire and the hazards ordinarily in-
cluded under standard extended coverage endorsements in
amounts necessary to prevent the application of the co-
insurance provisions of the applicable policies but not
less than 80% of the full insurable value thereof within
the terms of applicable policies.
(ii) Against war risk as and when a state of war or national
or public emergency exists and such insurance is obtainable
from a department or agency of the United. States Government,
upon reasonable terms, in the full amount necessary to prevent
the application of the co-insurance provisions of the applicable
policies but not less than 80% of their then full insurable value,
or, if such amounts be not obtainable, then in the highest
amount which can be so obtained.
(iii) If there are boilers or pressure vessels, from boiler or
pressure vessel explosion in an amount customarily carried
in the case of similar industrial operations.
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:
(i) General Public Liability insurance against claims for bodily injury
or death occurring upon, in or about the leased premises, with such insurance to
afford protection to the limits of not less than $100,000 in respect of bodily injury
or death to any one person and to the limit of not less than $300,000 in respect of
any one accident; and
(ii) Property damage insurance against claims for damage to property
occurring upon, in or about the leased premises with such insurance to afford
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protection to the limit of not less than $100, 000 in respect of damage to the
property of any one owner.
C . The insurance required by this Article IV shall l:,e maintained
in full force and effect at all tunes during the term of this Lease and Agreement,
except:
(i) The insurance required by Section 401 A. (i) as to improvements
and Lessor's machinery and equipment need not be placed in force and effect until
the completion of the construction of the Project, provided, however, that in no
event shall the insurance required by Section 401 A. (i) be placed into force and
effect later than the expiration of the builder's risk insurance carried pursuant to
the provisions of any contracts entered into with contractors or the insurance
initially taken out pursuant to the provisions of Article I hereof concerning Lessor's
machinery and equipment, with the end in -view of having full insurance coverage
at all times;
(ii) The insurance required by Section 401 B. need not be placed
into force and effect until Lessee occupies 'the Project, either upon completion or
before completion in the event Lessee undertakes to perform work or store materials
and supplies in the Project prior to completion as permitted by the provisions of
Article I hereof.
D. Copies or certificates of the insurance provided for by this
Article 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.
E. Policies of insurance provided for in Section 401 A. of this
Ailicle IV shall name the Lessor and the Lessee as insureds as their respective
interests may appear, provided, however, that the Trustee shall also be named
as a party insured pursuant to a standard mortgagee clause as its interests may
appear.
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F. All insurance required by this Section 401 shall be effected
with insurance companies selected by the Lessee. Lessee shall cause appro-
priate provisions to be inserted in each insurance policy making each policy
noncancellable without at least ten (10) days prior written notice to Lessor,
Lessee and the Trustee. Also, it is agreed that no claim shall be made and no
suit or action at law or in equity shall be brought by Lessor or by anyone
claiming by, through or under Lessor, against Lessee for any damage to the
improvements or Lessor's machinery and equipment covered by the insurance
provided for by this Article IV, however caused, but nothing in this sub-
section F. shall diminish Lessee's obligation to repair or rebuild as provided
in Article XIII. The Lessee shall have the sole right and responsibility to adjust
any loss with the insurer involved and to conduct any negotiations in connection
therewith.
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ARTICLE V
REPAIRS AND NIAINTENANCE OF
PREMISES AND ALTERATIONS
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Section 501. Lessee shall throughout the term, at no cost and expense
to Lessor, maintain, or cause to be maintained, and at the expiration of the term
hereof subject to the provisions of Article XIX hereof, yield up or cause to be
yielded up, in good and tenantable repair, order and condition, reasonable wear
and tear excepted, the buildings and improvements now or at any time erected on
the lands included in the leased premises and promptly at no cost and expense to
Lessor make or cause to be made all necessary repairs, interior and exterior,
structural and non-structural, foreseen as well as unforeseen, to the buildings
and improvements constituting part of the leased premises.
Section 502. Lessee shall have the right from time to time to make
additions, alterations and changes in or to the improvements constituting part of
the leased premises and shall have the right to construct any improvements,
provided, however, that no alterations shall be made which would change the
character of the structures thereon so that the same will not be appropriate and
usuable for manufacturing purposes. It is understood and agreed that in the event
the Lessee makes any additions, alterations and changes in or to the improvements
constituting part of the leased premises as authorized by this Section 502, the
Lessee shall be under no obligation at the expiration of the term. to restore the
leased premises to their original condition prior to such additions, alterations or
changes.
Section 503. All structural improvements and alterations made
on the leased premises by or on behalf of Lessee shall immediately upon
completion thereof be and become the property of the Lessor without payment
therefor by Lessor but subject to this Lease and Agreement. All machinery and
equipment, trade fixtures, movable partitions, furniture and furnishings and
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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 to the leased premises resulting from or
caused by their removal therefrom.
Section 504. All property of any kind which may be on the leased
premises (whether belonging to the Lessor, Lessee or to any third person) shall be
at the sole risk of Lessee and those claiming by, through or under Lessee 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 leased premises .
Section 505. Lessee shall throughout the term, at no cost and
expense to Lessor, maintain or cause to be maintained, and, subject to the pro-
visions of Articles XLX and XXIV hereof, at the expiration of the term hereof
yield up, or cause to be yielded up, in good repair, order and condition, reason-
able wear and tear excepted, Lessor's machinery and equipment.
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ARTICLE VI
USE OF PREMISES - COT 1PLTANCE WITH OP.DERS, ETC.
Section 601. Subject to the following provisions of this Section
601, 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 govern-
ments or governmental authorities, now or hereafter applicable to the leased
premises. Lessee shall, however, have the right to contest any of the fore-
going, 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 non-compliance,
Lessee may nevertheless delay compliance therewith during contests thereof,
provided Lessee, if required, furnishes Lessor reasonably satisfactory
security against any loss by reason of such lien and effectively prevents
foreclosure thereof. Lessee shall during the term comply with the mandatory
requirements, rules and regulations of all insurers under the policies required
to be carried under the provisions of this Lease and Agreement.
Section 602. Lessor covenants that, to the full extent permitted
by law, it will not attempt to impose upon the use or occupancy of the leased
premises by the Lessee any laws, ordinances, rules or regulations more
burdensome or restrictive than those in effect upon the date of execution of
this Lease and Agreement.
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ARTICLE VII
WORK PERFORMED BY LESSEE
Section 701. Lessee shall not do or permit others under its
control to do any work on the leased premises related to any repair, rebuild-
ing, alteration of or addition to the improvements constituting part of the
leased premises unless Lessee shall have first procured and paid for all
requisite municipal and other governmental permits and authorizations.
Lessor shall join in the application for any such permit or authorization
whenever required, but Lessee shall indemnify and hold Lessor harmless
against and from all costs and expenses which may be thereby incurred by
Lessor. All such work shall be done in a good and workmanlike manner and
in compliance with all applicable building, zoning, and other laws, ordinances,
governmental regulations and requirements and in accordance with the reason-
able requirements, rules and regulations of all insurers under the policies
required to be carried by the provisions of this Lease and Agreement.
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ARTICLE VIII
MECHANICS' LIENS
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Section 801. If any lien shall be filed against the interest of
Lessor, Lessee, or the Trustee in the leased premises or asserted against
any rent payable hereunder, by reason of work, labor, services or materials
supplied or claimed to have been supplied on or to the leased premises at
the request or with the permission of Lessee, or anyone claiming under
Lessee, Lessee shall, within thirty (30) days after receipt of notice of the
filing thereof or the assertion thereof against such rents, cause the same to
be discharged of record, or effectively prevent the enforcement or fore-
closure thereof against the leased premises or such rents, by contest,
payment, deposit, bond, order of Court or otherwise. Nothing contained
in this Lease and Agreement shall be construed as constituting the express
or implied consent to or permission of Lessor for the performance of any labor
or services or the furnishing of any materials that would give rise to any such
lien against Lessor's interest in the premises.
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ARTICLE IX
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INDEMNIFICATION OF LESSOR AND TRUSTEE
Section 901. Commencing with the completion of the Project or
when the Lessee takes possession if prior to the completion of the Project,
Lessee shall and agrees to indemnify and save Lessor and the Trustee harm-
less against and from all claims by or on behalf of any person, firm or
corporation arising from the conduct or management of, or from any work
or thing done on, the leased premises during the term, and against and
from all claims arising during the term from (a) any condition of the leased
premises, (b) any breach or default on the part of Lessee in the performance
of any of its obligations under this Lease and Agreement, (c) any act or
negligence of Lessee or of any of its agents, contractors, servants, employees
or licensees, or (d) any act or negligence of any assignee or sublessee of
Lessee, or of any agents, contractors, servants, employees or licensees
of any assignee or 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
connection with any action or proceeding brought thereon, and upon notice
from Lessor, or the Trustee, Lessee shall defend them or either of them in any
such action or proceeding.
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ARTICLE X
LESSOR MA -Y PERFORM LESSEE'S OBL.IGATT_ONS
Section 1001 . If Lessee shall fail to keep or perform any of its
obligations as provided in this Lease and Agreemeit in respect of (a)
maintenance of insurance; (b) payment of impositions; (c) repairs and
maintenance of the leased premises; (d) compliance with legal or insurance
requirements; (e) keeping the leased premises lien free; or (f) making of any
other payment or performance of any other obligations , then Lessor may (but
shall not be obligated to do so) , upon the 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 sums so paid by Lessor and all necessary incidental costs and
expenses incurred by Lessor in making such payment or performing such
obligation shall be deemed additional rent and shall be paid to Lessor on
demand, or at Lessor's option may be added to any installment of basic rent
thereafter falling due, and if not so paid by Lessee, Lessor shall have the
same rights and remedies as in the case of default by Lessee in the payment
of basic rent.
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ARTICLE XI
PUBLIC UTILITIES AND CHARGES
Section 1101. Lessee agrees to pay or cause to be paid all
charges for water, gas, sewer, electricity, light, heat or power, telephone
or other service used, rendered or supplied to or for the Lessee upon or in
connection with the leased premises throughout the term of this Lease and
Agreement, and to indemnify Lessor and save it harmless against any liability
or damage on such account.
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ARTICLE XII
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INSPECTION OF PREMISES BY LESSOR
Section 1201. Lessee shall permit Lessor and the Trustee or
either of them, by their respective authorized representatives, to enter the
leased premises at all reasonable times during usual business hours for the
purpose of inspection, and for the performance of any work therein made
necessary by reason of Lessee's default under any of the provisions of this
Lease and Agreement. Lessor may, during the progress of any such work,
keep and store on the leased premises all necessary materials, supplies
and equipment and shall not be liable for inconvenience, annoyance,
disturbance, loss of business or other damage to Lessee suffered by
reason of the performance of any such work or the storage of materials,
supplies and equipment.
ARTICLE XIII
DAMAGE AND DESTRUCTION
Section 1301. A. Lessee covenants and agrees that in the event of
damage to or destruction of the leased premises, or any part thereof, by fire or
other casualty, the Lessee shall immediately notify the Lessor and the Trustee.
If the damage is in the amount of $25,000 or less, Lessee shall proceed to re-
store, repair, rebuild or replace the leased premises to the same extent, if any,
required so that in the judgment of the Lessee, the Project is suitable for use for
Lessee's purpose under this Lease and Agreement. If the damage exceeds
$2.5,000 Lessee shall, at no cost and expense to Lessor or Trustee, proceed to
restore, repair, rebuild or replace the leased premises as nearly as possible to
the condition they were in immediately prior to such damage or destruction,
subject to such alterations as Lessee may elect to make in, conformity with the
provisions of Article V hereof. Any item of machinery and equipment acquired
as a replacement hereunder, or any item required, 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 damaged or destroyed machinery and equipment, if the
insurance proceeds with which such item of machinery and equipment was pur-
chased, in whole or in part, were derived from insurance on property which was
part of Lessor's machinery and equipment, shall be and become the property of
Lessor and shall be part of Lessor's machinery and equipment and subject to
this Lease and Agreement. Such restoration, repairs, replacements or rebuild-
ing shall be commenced promptly and prosecuted with reasonable diligence.
B. All insurance money paid on account of such damage or de-
struction shall be paid to the Trustee and applied as hereinafter set forth to
the 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 inten.erence with the business operated
thereon (sometimes referred to as the "restoration"). In the case of damage in-
volving a loss of $ 25 , 000 or less, the insurance proceeds shall be paid by the
Trustee to the Lessee upon receipt by Lessor and the Trastce of a certificate
signed by ar officer of Lessee that the restoration has been made, or is in the
process of being made in accordance with the provisions of sub -section A. hereof
pertaining to Lessee's obligation to restore. In the case of damage involving a
loss of more than $25,000 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
(i) requesting payment of a specified amount of
such insurance proceeds;
(ii) detailing the progress of the restoration and
re pair work;
(iii) stating that such specified amount does not
exceed the estimated cost of the work and
materials in connection with the restoration, in-
cluding as part thereof the estimated fees of any
architect or engineer, if any; and
(iv) stating that no part of such cost has previously
been made the basis of any request for the with-
drawal of insurance proceeds under this Article.
The Trustee shall have no responsibility as to the application by the Lessee of
the insurance proceeds.
If the insurance money shall be insufficient to pay all costs of the
restoration, the Lessee shall pay the deficiency and shall nevertheless proceed
to complete the restoration and pay the cost thereof. Any balance of the insurance
proceeds remaining over and above the cost of the restoration shall be paid by the
Trustee into the Bond Fund upon receipt by the Lessor and the Trustee of certificates
as required by this Article to the effect that the restoration has been completed, and
the Lessee shall be credited with said amount against Lessee's basic rent obliga-
tions set forth in Section 203 of this Lease and Agreement, with such credit to be
against the basic rent obligations as the same become due and payable under
Section 203, beginning with the first installment of basic rent thereafter, and
Lessee shall not be required to pay any basic rent thereafter e=ept when and to
the extent basic rent has become due and payable in excess of such credit.
The total amount collected under any and all policies of insurance
covering such damage or destruction shall be placed in a special fund and the
same may be invested in any investments in which the Trustee may invest amounts
in the Construction Fund under the Trust 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 covenants on the part of Lessee to be performed shall not be
affected by any such destruction or damage, and Lessee hereby waives the pro-
visions of any statute or law now or hereafter in effect contrary to such obliga-
tion of Lessee as herein set forth, or which releases Lessee therefrom.
Section 1303. Notwithstanding the provisions of the foregoing
sections of this Article XIII, Lessee shall not be required to repair, restore,
replace or rebuild the leased premises, or any part thereof, (a) if Lessee,
pursuant to the provisions of Article XIX, shall elect to purchase the leased
premises and shall proceed to pay the specified purchase price or (b) if the full
amount necessary under the provisions of the Trust Indenture to pay or redeem
all outstanding bonds shall have been paid and Lessee has not elected to
purchase the leased premises. If Lessee shall so elect to purchase, the proceeds
of all insurance may be used as part of the purchase price and upon the request
of Lessee shall be so applied. If there be any excess insurance proceeds over
and above the amount necessary to pay the purchase price, such excess shall be
paid to and shall belong to the Lessee. If Lessee shall have paid the full amount
necessary to pay or redeem all outstanding bonds, any insurance proceeds shall
be paid to and shall belong to Lessee.
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ARTICLE XIV
CONDEMNATION
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Section 1401. A. If during the term of this Lease and 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 this
Lease and Agreement shall terminate at midnight on the fifteenth day after
the vesting of title in such authority and rent shall be paid to and adjusted
as of that day. In that event, subject to the subsequent provisions of this
Section, the condemnation award shall belong to the Lessor and the Lessee
hereby assigns the award to the Lessor. In the event the net amount awarded
as damages or paid as a result of such taking (after deducting all attorney's
fees and other expenses and costs in the condemnation proceeding) together
with the amount then in the Bond Fund, shall be insufficient to pay in full,
on the first interest paying date after receipt of the award and after the
required bond redemption notice can be given, the amount necessary to pay
all principal, interest, the Trustee's fees, redemption premiums , and all
other costs of redemption (all of which, for purposes of this Section, shall
be called "total bond redemption expense"), Lessee agrees to pay, promptly
upon payment of the condemnation award, as additional rent hereunder, the
amount by which the total bond redemption expense shall exceed the net
amount awarded as damages or paid (less such fees, expenses and costs)
as a result of such taking plus the amount then on deposit in the Bond Fund.
The Lessee's agreement pertaining to this Section 1401 shall survive such
termination. For purposes of this Article XIV "all or substantially all of the
leased premises" shall be deemed to mean a taking of all of the leased
premises or a taking of such substantial portion of the leased premises
that the Lessee as determined by the Lessee in its sole discretion cannot
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reasonably operate in the remainder in sul_,stantially the same as before.
In the event the net amount awarded as damages or paid as a result of such taking
as defined above, togehter with the amount then in the Bond Fund, shall be in ex-
cess 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 and Agreement in-
volving monetary matters, such excess shall belong to and be paid to the Lessee,
and if Lessee is in default with reference to any of its monetary obligations, the
amount of the excess in excess of the amount necessary to satisfy said monetary
obligations with reference to which Lessee is in default shall be paid to Lessee.
The Lessor agrees that it will not voluntarily accept, without the prior approval of
the Lessee, any amount as damages for a taking which shall be less than the "total
bond redemption expense" , and the Lessor agrees that it will cooperate with the
Lessee with reference to any award with the end in view of obtaining the maximum
possible award justifiable as damages for the taking.
B. If less than substantially all of the leased premises shall be taken
or condemned by a competent authority for any public use or purpose, neither the
term nor any of the obligations of either party under this Lease and Agreement shall
be affected or reduced in any way, and
(i) If any part of the improvements owned by Lessor
on the leased premises (improvements as used herein
shall include an item of Lessor's machinery and equip-
ment) is taken, Lessee shall proceed to repair or
rebuild (repair or rebuild shall include replacement of
any item of Lessor's machinery and equipment) the
remaining part as nearly as possible to the condition
existing prior to such taking, to the extent that the
same may be feasible, subject to the right on the part
of the Lessee to make alterations so as to improve the
efficiency of the improvements; and
(ii) The entire condemnation award shall be paid to the Lessee,
and the Lessor hereby assigns the same to the Lcssee
for the use of the Lessee in repairing and rebuilding as
provided in (i) above. The said award shall be trans-
ferred to the Lessee in the same manner as is provided
in Section 1301 with respect to insurance proceeds,
provlc cu tna t the �,VC)rcis "1n'sur'C?nce p1OC:eeas" there
referred to shall for purposes Of this sub -paragraph
(ii) refer to "condemnation award" . If the net
condemnation award applicable to property owned
by t!ie Lessor is in excess of the amount necessary
to repair and rebuild as specified in (i) above, such
(--:_cess shall be paid to and belong to the T css,_)r and the
amount of such excess small be credited against basic rent
next thereafter provided to be paid by Lessee under
the provisions of Section 203 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
and Agreement, only that portion thereof equal to
the remaining total basic rent obligations of Lessee
shall be paid to and belong to 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 condemna-
tion award is less than the amount necessary for the Lessee
to repair and rebuild as set forth in (i) above, the Lessee
shall nevertheless complete the repair and rebuilding
work and pay the cost thereof; and
(iii) If no part of the improvements is taken, the
net condemnation award shall be paid to Lessor
and credited against basic rent obligations next
thereafter provided to be paid by Lessee under the
provisions of Section 203 hereof, and the Lessee
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 pro-
ceedings and to receive any award (by way of negotiation, settlement or
judgment) which may be made for damages sustained by Lessee by reason
of the condemnation; provided, however, nothing in this sub -section C shall
be construed to diminish or impair in any way Lessee's obligation under sub-
section A of this Section 1401 to pay as additional rent the amount of any
insufficiency of the net condemnation award and the funds in the Bond Fund
to pay the total bond redemption expense as therein defined.
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D. If the use of the %%-hole or any part of ti,e leased
premises shall be taken by right of eminent domain, this Lease and Agree-
ment shall not be thereby terminated and the parties shall continue to be
obligated under all of its terms and provisions. If such taking is for a
period of time ending on or prior to the expiration of the term, Lessee
shall be entitled to receive the entire amount of the award made for such
taking, whether by way of damages , rent or otherwise. If such taking is
for a period of time which extends beyond the expiration of the ten -n,
Lessee shall be entitled to receive the entice award, with the exception
of an amount sufficient to pay and discharge all sums due Lessor from
Lessee from the time Lessee's right of possession is terminated to the
expiration of the term.
Section 1402.
In the event of a taking of all or substantially
all of the leased premises as provided in Section 1401 A, notwithstanding
the provision therein that the rent shall be paid to and adjusted as of the
fifteenth day after vesting of title in the taking authority, the Lessee agrees
to continue to make 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. Notwithstanding the fact that all or any part of the
leased premises shall be taken by right of eminent domain, Lessee shall
14me
have the right to exercise any option granted to it by the provisions of
Article XIX hereof and the foregoing provisions of this Article XIV shall
be construed in the light of the effect of any option so exercised by
Lessee. In the event of the exercise of an option under Article XIX and
payment of the required purchase price, whether before or after such
taking, the entire condemnation award shall belong to Lessee.
Section 1404. Lessee shall have the right to participate in its
own name in any negotiations or condemnation proceedings, but at its
own expense, to resist or defend condemnation and to make any presenta-
tion or conduct any proceeding in its discretion to the end of obtaining
any proper relief and, if the condemnation is concluded, to the end of
obtaining the maximum condemnation award justified by the taking.
Section 1405. Lessor covenants that it will not take or condemn
any part of the leased premises, or attempt to do so.
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ARTICLE XV
ASSIGNMENT
Section 1501. A. Lessee may assign this Lease or sublet the
leased premises or part thereof provided that no such assignment or sub-
letting and no dealings or transactions between the Lessor or the Trustee
and any sublessee or assignee shall relieve the Lessee of any of its
obligations under this Lease and Agreement and Lessee shall remain as
fully bound as though no assignment or subletting had been made, and
performance by any assignee or sublessee shall be considered as per-
formance pro tanto by Lessee; provided, however, that Lessee may assign
this Lease, and be thereby relieved of further obligation hereunder, in
connection with a transaction involving merger, consolidation or sale as
permitted under Section 2209 provided the requirements thereof are met.
B. It is understood and agreed that this Lease and Agreement
and/or the rents hereunder will be assigned to the Trustee as security for
the payment of the principal of and interest on the bonds, but otherwise
the Lessor shall not assign, encumber, sell or dispose of all or any part
of its rights, title and interest in and to the leased premises and this
Lease and Agreement, except to the Lessee in accordance with the pro-
visions of the Lease Agreement and to the Trustee under the Trust Indenture,
but subject to the provisions of Article XVI hereof, without the prior written
consent of the Lessee.
05
ARTICLE XVI
PRIORITY OF LEASE
.9001
Section 1601. Notwithstanding anything to the contrary in this
Lease and Agreement, this Lease and Agreement (and any amendment or
supplement hereto executed in accordance with and pursuant to the pro-
visions of this Lease and Agreement) and the estate of Lessee hereunder
are and shall continue to be superior and prior to the Trust Indenture (and
all supplements thereto) and any other and all encumbrances, mortgages,
deeds of trust and trust indentures, or any of them, constituting or
granting a lien upon the leased premises or any part thereof or interest
therein.
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ARTICLE XVII
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REMEDIES ARE CUT'iUIL;TIVE - 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 pro-
visions of this Lease and Agreement, notwithstanding the availability of
an adequate remedy at law, and each party hereby waives the right to
raise such defense in any proceeding in equity. The specific remedies
provided for in this Lease and Agreement are cumulative and are not
exclusive of any other remedy. The failure of either party to insist in
any one or more cases upon strict performance shall not be construed as
a waiver or relinquishment for the future. No acceptance of rent with
knowledge of any default shall be deemed a waiver of such default.
In
ARTICLE XVIII
DEFAULT PROVISION
0
Section 1801. This Lease is made on condition also that if any one
or more of the following events (herein referred to as "event of default") shall
happen:
(a) Lessee shall default in the due and punctual payment of the
basic rent or any additional rent payable hereunder, and such default shall continue
f or ten (10) days after receipt of written notice from Lessor or the Trustee of
such non-payment; or
(b) Lessee shall neglect or fail to perform or observe any of the
covenants herein contained on Lessee's part to be performed or observed (other than
those referred to in sub -section (a) of this Section 1801) and Lessee shall fail to
remedy the same within sixty (60) clays after Lessor or the Trustee shall have
given to Lessee notice specifying such neglect or failure (or within such additional
period, if any, as may be reasonably required to cure such default if it is of such
nature that it cannot be cured within said sixty (60) day period because of govern-
mental restriction or any other cause beyond the control of the Lessee); or
(c) This Lease and Agreement or the leased premises or any part
thereof shall be taken upon execution or by other process of law directed against
the Lessee, or shall be taken upon or subject to any attachment at the instance of
any creditor of or claimant against the Lessee, and said attachment shall not be
discharged or disposed of within ninety (90) days after the levy thereof; or
(d)LFssee shall be involved in financial difficulties as evidenced
below and shall not cure the same within ninety (90) days after notice from the
Lessor,
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(i) by its admitting in writing its inability to
pay its debts generally as they become due, or
(ii) by its filing a petition in bankruptcy or for
reorganization or for the adoption of an arrange-
ment under the Bankruptcy Act (as now existing
or in the future amended) or an answer or other
pleading admitting the material allegations of
such a petition or seeking, consenting to or
acquiescing in the relief provided for under such
Act, or
(iii) by its making an assignment of all or a
substantial part of its property for the benefit
of its creditors, or
(iv) by its seeking or consenting to or acquiescing
in the appointment of a receiver or trustee for all
or a substantial part of its property or of the leased
premises or of its interest in this Lease and Agree-
ment, or
(v) by its being adjudicated a bankrupt or insolvent, or
(vi) by the entry of a court order without its consent
which order shall not be vacated, set aside or stayed
within ninety (90) days from the date of entry (1)
appointing a receiver or trustee for all or a substantial
part of its property or (2) approving a petition filed
against it for the effecting of an arrangement in
bankruptcy or for a reorganization pursuant to said
Bankruptcy Act or for any other judicial .modification
or alteration of the rights of creditors; then:
In any such event, Lessor shall have the right at its election,
then or at any time thereafter while such event of default shall continue,
either
(1) To give Lessee notice of intention to terminate this Lease
and Agreement on the date of such notice or on any later date specified
therein, and on the date specified in such notice Lessee's ria'nt to possession
of the 'Leased premises shall cease and this Lease and Agreement shall there-
upon be terminated, or
(2) Without demand or notice, to re-enter and take possession
of the premises or any part thereof and repossess the same as of Lessor's
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former estate and expel Lessee and diose claiming thiocgh or under Lessee
and remove the effects of both or either (forci.bly, if necessary) ,%-ithout
being deemed guilty of any manner of trespass and �,vithout prejudice to
any remedies for arrears of rent or preceding breach of covenant. Should
Lessor elect to re-enter as provided in this paragraph (2) or should Lessor
take possession pursuant to legal proceedings or pursuant to any notice
provided for by law, Lessor may (a) terminate this Lease and Agreement, or
(b) from time to time, without terminating this Lease and Agreement, relet the
leased premises or any part thereof for such term or terms and at such rental
or'rentals and upon such other terms and conditions as Lessor may deem
advisable, with the right to make alterations and repairs to the leased
premises. No such re-entry or taking of possession of the leased premises
by Lessor shall be construed as an election on Lessor's part to terminate
this Lease and Agreement unless a notice of such intention be given to
Lessee or unless the termination thereof be decreed by a court of competent
jurisdiction.
Section 1802. In the event of any such termination, Lessee shall
nevertheless pay the basic rent and all additional rent and other sums as
hereinbefore provided up to the time of such termination, and thereafter
Lessee, until the end of what would have been the term of this Lease and
Agreement in the absence of such termination, and whether or not the leased
premises shall have been relet, shall be liable to Lessor for, and shall pay
to Lessor, as liquidated current damages,
(a) The basic rent and additional rent and other sums as herein-
before provided which would otherwise be payable hereunder if such termination
had not occurred, less,
(b) The net proceeds, if any, of any reletting of the leased
premises, after deducting all of Lessor's expenses in connection with such
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reletting, including, without limitation, all repossession costs, brokerage
connmissions, expenses of employees, altaration costs and expenses of
preparation for such reletting .
Lessee shall pay such liquidated current damages on the days
on which the basic rent would have been payable hereunder if this Lease
and Agreement had not been terminated.
At any time after such termination, whether or not Lessor shall
have collected any such current damages, Lessor shall be entitled to recover
from Lessee and Lessee shall pay to Lessor, on demand, as liquidated final
damages in lieu of all such current damages beyond the date of such demand
an amount equal to
(z) The basic rent and other then definitely ascertainable
sums as hereinabove provided which would be payable
hereunder from the date of such demand (or, if it be earlier,
the date to which Lessee shall have satisfied its obliga-
tions under this Section 1802 to pay current damages) for
what would be the then unexpired term of this Lease and
Agreement if the same remained in effect, less
(y) The then fair net rental value of the leased premises
for the same period.
If any statute or rule of law governing a proceeding in which such
liquidated final damages are to be proved shall validly limit the amount
thereof to an amount less than the amount agreed upon hereinabove, Lessor
shall be entitled to the maximum amount allowable under such statute or
rule of law.
Section 1803. In the event of a termination of this Lease and
Agreement by Lessor, or in the event of entry as aforesaid by Lessor without
termination, and prior to the time Lessor may have demanded final liquidated
damages, Lessee shall have the right, from time to time, to provide Lessor
with a tenant for the leased premises for a substantial portion of the unexpired
term of this Lease as it existed immediately prior to such termination, and
1w
(a) If Lessor does not accept tr,iant, or
(b) If Lessor does accept such tenant
then in either event the current liquidated damages payable by L<�ssee here-
under shall be reduced by the amount such tenant paid, or would have been
obligated to pay if the tenant had been accepted by Lessor, less Lessor's
expenses in connection with such reletting as defined in sub -paragraph (b)
of Section 1802 hereof.
Section 1804. The foregoing provisions of this Article relating
to the payment of basic rent and additional rent beyond the termination of
this Lease and Agreement, the payment of liquidated current damages or
liquidated final damages, and the receipt of rents by Lessor upon a reletting
are each to be construed as providing that all such payments by Lessee or
others shall be made into the Bond Fund referred to in Section 204 and Lessee's
said obligations shall further be subject to the provisions of Section 203 (a) (2).
on
hR'r1C Lr XIX
LESSEE'S OPTIONS
En
Section 1901. Lessee shall have and is (.ranted the
option to extend this Lease and Agreement for extension terms
of year each for a basic annual rental of ���-�<".��., Dollars
per year, payable in advance on the first business day of each
year of the extension term; plus the additional rentals heretofore provided
in Article II hereof and otherwise upon the terms, conditions and provisions
of this Lease and Agreement. The options 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 certi-
fied or. registered mail (with or without return receipt requested) that Les-
see does not elect to have the lease term extended beyond the then current
initial or extension term. Whenever used in this Lease and Agreement the
words "extension term" or "renewal term" shall have the same meaning and
shall refer to the term concerning which the option to extend is granted by
this Section 1901. Furthermore, whenever the unqualified word "term"
appears in this Lease and Agreement, the referencs shall include the initial
and any extension terms.
Section 1902. A. Prior to December 1., 1978 the Lessee shall have
the right and option to purchase the leased premises if, but only if:
(i) Lessor shall default in the performance of any of
its obligations under this Lease and Agreement; or
(ii) The leased premises shall sustain major damage
or destruction; or
(iii) `l'itle to or the temporary use of all or substantially
all of the leased premises shall be condemned as
provided in Article XIV hereof; or
(iv) As a result of ciianges in Lhc Coratitution of. the
United States or Cf the State of Arkansas, or of
legislative action, or by the final decree, judg-
ment or order of any court or administrative body
entered after Lessee's contest thereof in good
faith, this Lease and agreement become void
or unenforceable or impossible of performance
in accordance with the intent and purposes of the
parties as expressed in this Lease and Agreement,
or unreasonable burdens or excessive liabilities
are imposed upon either party to it; or
(v) 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 sub -section (iii).
The term "major damage or destruction" as used in sub -section
(ii) 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 carry-
ing on its manufacturing operations therein for a period of seventy-five (75)
days or the restoration cost of which would exceed the total amount of in-
surance carried on the leased premises in accordance with the provisions
of Article IV hereof, or such that it would not be economically feasible for
the Lessee to repair the leased premises, as determined by the Lessee in
its discretion.
B. On and after December 1, 1978 and during the remainder of the
initial and during any extension term hereof, Lessee shall have the uncondi-
tional right and option to purchase the leased premises at any time.
C. At the expiration of the initial or any extension term and for
a period of ninety days thereafter (if the purchase options under the pro-
visions of Paragraphs A and B have not been exercised) Lessee shall have the
further unconditional right and option to purchase the leased premises.
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D. Purchli_e Price. The purcii se p?_ice payable if the Lessee
exercises Lessee's option to purchase the leased premises under the provisions
of Paragraphs A, 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, 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 purchase price of the leased
premises shall be One Hundred Dollars ($100.00).
E. Any of the foregoing options may be exercised by giving written
notice to Lessor of the exercise thereof specifying the time and place of closing.
At the closing, Lessor shall, upon payment of the purchase price hereinabove
specified, deliver to Lessee a general warranty deed, bills of sale and other
appropriate conveyance instruments transferring good and merchantable title to
the leased premises free and clear of all liens and encumbrances except those
to which title was subject when leased hereunder, or resulting from any failure
of Lessee to perform any of its obligations under this Lease and Agreement; pro-
vided, however, that if such option is exercised under the provisions of sub-
paragraph A (iii) of this Section, such title may be subject to the rights, titles
and 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.
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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, or when sent postage prepaid by first class mail by deposit
thereof in a duly constituted United States Post Office or branch thereof
located in one of the present States of the United States of America in a
sealed envelope addressed as follows:
If intended for Lessee:
Westport Casuals, Inc.
Batesville, Arkansas
copy to: Stern -S legman -Prins Company
If intended for Lessor:
City of Batesville, Arkansas
Office of Mayor
Batesville, Arkansas
If intended for Trustee:
First National Bank of Kansas City
Kansas City, Missouri 64141
Any party 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.
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ARTICLE YXI
RECORDING
ection 2101 This Lease and Agreement and every assign -
meat and modification thereof shall be recorded in the office of the Circuit
Clerk and Ex Officio Recorder of Independence County, Arkansas.
En
ARTICLE XXII
Section 2201. This Lease and Agreement shall be construed and
enforced in accordance with the laws of the State of Arkansas . Wherever in this
Lease and Agreement it is provided that either party shall or will make any payment
or perform or refrain from performing any act or obligation, each such provision shall,
even though not so expressed, be construed as an express covenant to make such
payment or to perform, or not to perform, as the case may be, such act or obligation.
Section 2202. If any provision of this Lease and Agreement or the
application thereof to any person or circumstances shall, to any extent, be determined
to be invalid or unenforceable, the remainder of this Lease and Agreement and the
application of its provisions to persons or circumstances 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 and Agreement shall be valid and shall be enforced to
the fullest extent permitted by law.
Section 2203.
The Article captions in this Lease and Agreement are
for convenience and reference only and in no way define, limit or describe the scope
or intent of this Lease and Agreement or any part thereof, or in any wise affect this
Lease and Agreement and shall not be considered in any construction thereof.
Section 2204. It is agreed that after the bonds are fully paid and
discharged, or adequate provision is made for their payment and discharge, and
all proper fees and expenses of the Trustee and Paying Agent are paid or adequate
provision made for their payment, the Trustee shall cease to have any right, title and
interest in, to or under this Lease and Agreement. Ti ereafter, all rights of apprn�.%al
or other rights herein specified with reference to the Trustee shall inure to the benefit
of and be applicable to Lessor.
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Sect -_on 2205. it Is agreed +hat in the event of - r:y :o_: -payment of
rent by Lessee or the failure or refusal by Lessee to observe, keep or perform any
other covenant, condition, promise or agreement set forth in this Lease and Agree-
ment 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 or remedy herein accorded
in this Lease and Agreement to Lessor in the event of tie non-performance or non-
observance by Lessee of any such promise, covenant or agreement.'
Section 2206. The provisions of this Lease and Agreement shall bind and
inure to the benefit of the parties hereto and their respective successors, assigns
and sublessees (it being understood that assignments and subleasing are governed
by the provisions of Article XV hereof).
Section 2207. It is agreed that the Lessor and the Lessee shall not alter,
modify or amend any of the terms of this Lease and Agreement without the prior
written approval of the Trustee, which consent will not be unreasonably withheld.
Section 2208. Lessee shall furnish to Lessor and to the Trustee at the
time that Lessee shall publish its Annual Report to Stockholders for the preceding
fiscal year, but in any event within 120 days after the end of the preceding fiscal
year, a balance sheet of Lessee as at the end of such fiscal year and the related
statements of income and surplus for such fiscal year, all in reasonable detail and
accompanied by a report or certificate of independent registered public accountants
of recognized standing, who may be the accountants regularly employed by the
Lessee, in the manner normally reported by the Lessee to its shareholders.
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Sectlon 2'/09. '.Cl:e Lessce %;vill alr_!al.i7 Its corporate cxlste'nce and
will not, without the consent of t? -le Trustee, dissolve, sell, lease Dr othorwise
dispose of all or substantially all of its assets; provided, hog -,ever, that the
Lessee May, without the consent of the Trustee, consolidlate with L,: merge into
another corporation, or sell to another corporation substantially all of its busi-
ness and assets, on the condition that such corporation shall expressly assume
in writing all of the obligations of Lessee contained in this Lease and Agreement
and that the net worth of the other, corporation after t, -Ie consolidation; merger or
sale be at least equal to the net worth of Lessee immediately prior to such consoli-
dation, 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 sub -section, and the assu_inption by
the other corporation of the obligations hereof, the Lessee shall be relieved from
all further obligations hereunder.
in
ARTICLE XXIII
EXP __ NSION Or r HCl LITIES
Section 2301. The progress of Lessee's business may justify an
expansion of the Project or the construction of additional industrial facilities
(herein referred to as "additional facilities") beyond those that can be financed
out of the proceeds of the bonds to such an extent that Lessee may not desire
to proceed under the provisions of Section 502 to construct such facilities. There-
fore, it is agreed, subject to all of the provisions of this Article Y III, as follows:
(a) If Lessee desires to construct additional facilities, it shall notify
Lessor and Lessor agrees to proceed under the provisions of Act No. 9 (or any
similar then existing legislation authorizing municipalities in the State of Arkansas
to issue bonds for the purpose of securing and developing industry) to issue addi-
tional bonds, otherwise than under the Indenture, subject to the requirements of
Act No. 9 or any such then existing law, to finance such additional facilities.
In that event, the Lessor and the Lessee agree to execute a separate: Lease and
Agreement covering the financing of such additional facilities and the leasing
thereof -to Lessee upon the same terms and conditions as set forth in this Lease
and Agreement, subject to any changes or additions that may then be agreed upon
by Lessor and Lessee, but there must be included provision for basic annual rent
in the amount necessary to provide for the payment of the principal of and interest
on any such additional bonds, and the land involved in such expansion program
shall automatically be withdrawn from this Lease and Agreement upon becoming
subject to a separate Lease and Agreement between Lessor and Lessee.
(b) If for any reason the additional facilities cannot be financed under Act
No. 9, or any then existing similar law, as provided in sub -paragraph (a) above, or if
for any reason Lessee does not desire to so proceed, Lessee shall have the right, upon
notice to Lessor, to require Lessor to the extent permitted by Section. 2304 to convey
**4
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the land to be involved in said expc:nsiOn L�rogrc�m to T:Ossee by jeneral warranty
deed free and clear of all encumbrances c>,,rcegt those to �n7hich title lvas subject
wlien leased hereunder.
Section 2302. Lessor shall make appropriate provisions in the Trust
Indenture for a release of the lands to be involved in any expansion grogram (under
either Section 2301 (a) or Section 2301 (b)) from the lien of the Trust Tnd:orrture. The
consideration to be paid by Lessee to Lessor upon conveyance of the lands pursuant
to the provisions of Section 2301 (b) shall be One Dollar ($1.00) per acre and the
mutual benefits to be derived by the parties from such expansion program.
Section 2303. The fact that the land involved in such expansion
program shall cease to be subject to this Lease and Agreement by virtue of becoming
subject to a separate Lease and Agreement or being acquired by Lessee shall_ not re-
lieve, and shall not result in the relieving of Lessee of its obligation to pay basic
rent and additional rent or any of the other covenants and obligations on the part of
Lessee to be performed under this Lease and Agreement, or result in any diminution
thereof.
Section 2304. Lessee's expansion program and the land subject to
said separate Lease and Agreement or said acquisition by Lessee pursuant to the pro-
visions of Section 2301 may include only such portion of the Land originally leased
and demised by this Lease and Agreement as shall not at such time be improved with
a building or buildings or other structure or structures or be necessary for adequate
ingress and egress to and from said buildings and structures plus such additional
land adjacent to said buildings and structures, as may be reasonably necessary for the
proper and efficient use of such buildings and structures.
Section 2305. The rights conferred upon Lessee by this A fticle XXIII
shall be in addition to and not in limitation of any of the options granted to Lessee by the
provisions of .Article XIX hereof, and the provisions of this Article XXIII are in addition
to and not a limitation upon Lessee's rights under Section 502 hereof.
• 'rr
ARTICLE XXIV
INW
REMOVAL AND DISPOSAL OF PROPERTY
Section 2401. The Lessee may, provided Lessee is not in default in the
payment of basic rent or additional rent as required by the provisions of this Lease
and Agreement and has not received notice of any other default on its part hereunder,
remove, free of any right or claim of Lessor or the Trustee, any building service
equipment (hereinafter defined), subject however, in all cases to the following:
(a) Building service equipment may be so removed upon the substitution
therecf, then or theretofore, by Lessee of other building service equipment of a
utility or value at least equal to that, at the time of removal, of the building service
equipment removed;
(b) Worn out or obsolete building service equipment rnay be so removed and
building service equipment added by Lessee after the full completion of a building
(and not by way of repair, replacement or the like) may be removed, provided the
original efficiency, utility and value of the building is not impaired;
(c) Lessee shall pay all the costs and expenses of any such removal and
shall immediately repair at its expense all damage caused thereby.
The term "building service equipment" is intended to refer to such things
as are affixed to or incorporated in a building for its operation, such as boilers,
pumps, tanks, electrical panel switchboards, sprinklers, lighting equipment and
wiring, heating, plumbing and ventilating equipment, elevators, escalators, refrigera-
ting, air conditioning and air cooling equipment, and items similar in general to any
of -the foregoing.
Section 2402. The Lessor and the Lessee recognize that after Lessor's
VMW
machinery and equipment is installed portions thereof may becor:e .inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary in the operation of
the Project as a modern manufacturing plant. The Lessor shall not be under any
obligation 'to renew, repair or replace any such inadequate, obsolete, worn out,
unsuitable, undesirable or unnecessary items of Lessor's machinery a:,d'equip-
ment. In any instance where the Lessee in its sound discretion determines that
any items of Lessor's machinery and equipment have become inadequate, obsolete,
worn out, unsuitable, undesirable or unnecessary in the operation of the Project
as a modern manufacturing plant,
(a) The Lessee may remove such items of Lessor's machinery
and equipment from the Project, and (on behalf of the Lessor)
sell, trade-in, exchange or otherwise dispose of them without
any responsibility or accountability to the Lessor or the Trustee
therefor, provided that the Lessee substitute (either by direct
payment of the cost thereof or by advance to the Lessor of the
funds necessary therefor, as hereinafter provided) and install
anywhere in the Project other machinery or equipment raving
equal or greater utility (but not necessarily the same function)
in the operation of the Project as a modern manufacturing plant,
and provided further that such removal and substitution shall not
impair the operating unity of the Project, and x.11 suc' subs'Jtuted
machinery or equipment shall be the sole property of the Lessor,
shall be and become a part of Lessor's machinery and equipment
subject to this Lease and Agreement and shall be held by the Lessee
on the same terms and conditions as items originally comprising Les-
sor's machinery and equipment; or
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(b) The Lessee may remove such items of Lessor's machinery
and equipment from the Project and sell, trade in or exchange
them (in whole or in part) on behalf of the Lessor, either to
itself or to another, or scrap them (in whole or in part), without
being required to substitute and install in the Project other items
of machinery or equipment in lieu thereof, provided (i) that in
the case of the sale of any such machinery or equipment to any-
one other than itself or in case of the scrapping thereof, the
Lessee pays into the Bond Fund the proceeds from such sale or
the scrap value thereof, as the case may be, (ii) that in the case
of the trade in of such machinery or equipment for other machinery
or equipment not to be installed in the Project, the Lessee prays
into the Bond Fund t1—_ amount of the credit received by it on such
trade in, and (iii) that in the case of the sale of any such machinery
or equipment to the Lessee, the Lessee pays into 'the Bond Fund an
amount equal to the original cost thereof .less depreciation at rates
calculated in accordance with generally accepted accounting
practice.
In any case where the Lessee purchases, installs and substitutes in the
Project any item of machinery or equipment, the Lessee may, in lieu of purchasing
and installing said items of machinery and equipment itself, advance to the Lessor
the funds necessary therefor, whereupon the Lessor will purchase and install such
machinery or equipment in the Project.
The Lessee will promptly report such removals, substitutions, sales and
other dispositions of items of Lessor's machinery and equipment to the Trustee,
will pay to the Trustee such amounts as are required by the provisions of the preceding
subsection (b) to be paid into the Bond Fund promptly after the sale,trade-in or scrapping
I
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requiring such payment, and will enecute arid clieliver to the Lessor and the Trustee
such documents as may from time to time be equested to co .firm the title of the
Lessor (subject to this Lease and Agreement) to any items of machinery and equip-
menti}at under the provisions of this section are to become a part of Lessor's
machinery and equipment. The Lessee will pay any costs (including counsel fees)
incurred in subjecting to the lien of the Indenture any items of machinery or equip-
ment that under the provisions of this section are to become a part of Lessor's
machinery and equipment. The Lessee will not remove,or permit the removal of
any of Lessor's machinery and equipment from the leased premises except in
accordance with the provisions of this section.
Section 2403. if requested by Lessor, Lessee shall furnish to Lessor,
within sixty (60) days after the end of each calendar year, Lessee's certificate
setting forth a summary description of all removals made pursuant to Sections
2401 and 2402.
im
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 BATESVILLE , ARKANSAS
LESSOR
Mayor
ATTEST:
City Clerk
(SEAL)
WESTPORT CASUALS, INC.
LESSEE
(Title)
ATTEST:
(Title)
(SEAL)
En
S TAT E OF ARKANSAS )
COUNTY OF INDEPENDENCE )
rn
ACKNOWI,EDGw1ENT
On this day of 1968, before me, 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 Batesville, Arkansas, a municipality of the State of Arkansas,
to me personally known, who stated that they were duly authorized in their
respective capacities to execute the foregoing instrument for and in the
name of the City, and further stated and acknowledged that they had signed,
executed and delivered said foregoing instrument for the consideration ,
uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and offi-
cial seal this day of __ 1968.
Notary Public
My commission expires:
(SEAL)
0
ACKNOWLEDGI ENT
STATE OF )
COUNTY OF )
in
On this day of 1968, 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 Westport Casuals, Inc., an Arkansas corporation, 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 said corporation, and further stated and acknowledged that they had
so signed, executed and delivered said foregoing instrument for the considera-
tion, uses and purposes therein mentioned and set forth.
IN TESTIMONY WHEREOF, I have hereunto set my hand and
official seal this day of December, 1968.
Notary Public
My commission expires:
(SEAL)
EXHIBIT A
THE LEASE AND AGREEMENT BY AND BETWEEN THE CITY
OF BATESVILLE , ARKANSAS AND WESTPORT CASUALS, INC.
The following described real estate situated in Independence
County, Arkansas, to wit:
fir' ,,/►, ,
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 said 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 thereof in conflict
herewith 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 within 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 andAgree-
ment 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 immeidately upon and after its passage.
PASSED: ,1968.
ATTEST:
City Clerk
(S EAL)
APPROVED:
Mayor
y,
CERTIFICATE
The undersigned, City Clerk of Batesville,
Arkansas, hereby certifies that the foregoing pages are
a true and perfect copy of Ordinance No.
,passed
at a session of the City Council of Bates-
ville, Arkansas, held at the regular meeting place of the
City Council at o'clock —•m, , and that said
Ordinance is of record in Ordinance Record Book
page , now in m '
y possession.
GIVEN under my hand and seal this
day of , 1968.
City Clerk
(SEAL):