HomeMy WebLinkAbout1543 Approving Plan for Industrial Revenue Bonds for Premium Waters $9,000,000 BILL NO. 2017-041 ORDINANCE NO. L7 ,
AN ORDINANCE APPROVING A PLAN FOR AN INDUSTRIAL DEVELOPMENT PROJECT
FOR PREMIUM WATERS, INC., A MINNESOTA CORPORATION; AUTHORIZING THE CITY
OF RIVERSIDE, MISSOURI TO ISSUE ITS TAXABLE INDUSTRIAL REVENUE BONDS
(PREMIUM WATERS, INC. PROJECT), SERIES 2017, IN A PRINCIPAL AMOUNT NOT TO
EXCEED $9,000,000 TO FINANCE THE COSTS OF A PROJECT FOR PREMIUM WATERS,
INC., CONSISTING OF THE ACQUISITION AND INSTALLATION OF NEW EQUIPMENT
AND MACHINERY AT THE EXISTING PLANT; AUTHORIZING AND APPROVING CERTAIN
DOCUMENTS; AND AUTHORIZING CERTAIN OTHER ACTIONS IN CONNECTION WITH
THE ISSUANCE OF THE BONDS.
WHEREAS, the City of Riverside, Missouri, a fourth-class city and political subdivision of
the State of Missouri (the "City"), is authorized and empowered pursuant to the provisions of
Article VI, Section 27(b) of the Missouri Constitution, as amended, and Sections 100.010 through
100.200, inclusive, of the Revised Statutes of Missouri, as amended (RSMo) (collectively, the
"Act"), to purchase, construct, extend and improve certain projects (as defined in Section 100.010
RSMo) and to issue industrial development revenue bonds for the purpose of providing funds to
pay the costs of such projects and to lease or otherwise dispose of such projects to private
persons or corporations for manufacturing, commercial, warehousing and industrial development
purposes upon such terms and conditions as the City shall deem advisable; and
WHEREAS, Section 100.050 RSMo requires the City to prepare a plan (the "Plan") in
connection with any industrial development project undertaken pursuant to the Act; and
WHEREAS, a Plan for an Industrial Development Project (the "Plan") for Premium
Waters, Inc., a Minnesota corporation (the "Company"), was prepared and distributed to the
taxing jurisdictions along with notice of a public hearing to be held by the City on June 6, 2017;
and
WHEREAS, on June 6, 2017 the public hearing on the Plan was held by the City; and
WHEREAS, the City has and does hereby find and determine that it is desirable for the
economic development of the City and within the public purposes of the Act that the City
approve the Plan; and
WHEREAS, the City desires to finance the costs of the Project out of the proceeds of
industrial development revenue bonds to be issued under the Act (the 'Bonds"); and
WHEREAS, the City has and does hereby find and determine that it is desirable for the
economic development of the City and within the public purposes of the Act that the City
proceed with the issuance of the Bonds for the purpose described above; and
WHEREAS, because the Bonds will be payable solely out of payments, revenues and
receipts derived by the City from the lease of the Project to the Company and from no other
source, the City has determined that it is appropriate that the Bonds be sold to the Company
pursuant to Section 108.170 of Revised Statutes of Missouri, as amended, which provides that
notwithstanding any other provisions of any law to the contrary, industrial development revenue
bonds may be sold at private sale; and
WHEREAS, the City further finds and determines that it is necessary and desirable in
connection with approval of the Plan and the issuance of the Bonds that the City enter into
certain documents, and that the City take certain other actions and approve the execution of
certain other documents as herein provided;
NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF ALDERMEN OF THE
CITY OF RIVERSIDE, MISSOURI, AS FOLLOWS:
SECTION 1. PROMOTION OF ECONOMIC DEVELOPMENT. The Board of Aldermen
hereby find and determines that the Project will promote the economic welfare and the
development of the City, and the approval of the Plan and the issuance of the Bonds by the City
to pay the costs of the Project will be in furtherance of the public purposes set forth in the Act.
SECTION 2. APPROVAL OF THE PLAN. The Board of Aldermen hereby finds that:
(a) proper notice as required by the Act was properly given to all taxing jurisdictions regarding
the proposed Plan and (b) it has fairly and duly considered all comments submitted to the Board
of Aldermen regarding the proposed Plan. The Board of Aldermen hereby approve the Plan in
the form of Exhibit A attached hereto.
SECTION 3. AUTHORIZATION AND SALE OF THE BONDS. The City is hereby
authorized to issue and sell its Taxable Industrial Revenue Bonds (Premium Waters, Inc. Project),
Series 2017, in an aggregate principal amount not to exceed $9,000,000, for the purpose of
providing funds to pay the costs of the Project. The Bonds shall be issued and secured pursuant
to the herein authorized Trust Indenture and shall bear such date, shall mature at such time,
shall be in such denominations, shall bear interest at such rate (not to exceed 6.00%), shall be
in such form, shall be subject to redemption, shall have such other terms and provisions, shall
be issued, executed and delivered in such manner and shall be subject to such provisions,
covenants and agreements as are specified in the Trust Indenture upon the execution thereof,
and the signatures of the officers of the City executing the Trust Indenture shall constitute
conclusive evidence of their approval and the City's approval thereof. The sale of the Bonds to
the Company at private sale pursuant to the provisions of Section 108.170 of Revised Statutes
of Missouri, as amended, at the interest rate and upon the terms set forth in the Trust Indenture
is hereby approved.
SECTION 4. LIMITED OBLIGATIONS. The Bonds and the interest thereon shall be
limited obligations of the City payable solely out of the payments, revenues and receipts derived
by the City from the herein authorized Lease Agreement, and such payments, revenues and
receipts shall be pledged and assigned to the Trustee as security for the payment of the Bonds
as provided in the Trust Indenture. The Bonds and interest thereon shall not be deemed to
constitute a debt or liability of the City within the meaning of any constitutional provision or
statutory limitation and shall not constitute a pledge of the full faith and credit of the City. The
issuance of the Bonds shall not, directly, indirectly or contingently, obligate the City to levy any
form of taxation therefore or to make any appropriation for their payment.
SECTION 5. APPROVAL AND AUTHORIZATION OF DOCUMENTS. The following
documents (the "City Documents") are hereby approved in substantially the forms presented to
the Board of Aldermen at this meeting (copies of which documents shall be filed in the records
of the City), and the City is hereby authorized to execute and deliver the City Documents with
such changes therein as shall be approved by the officials of the City executing such
documents, such officials' signatures thereon being conclusive evidence of their approval
thereof:
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(a) Trust Indenture dated as of the date set forth therein (the "Trust
Indenture"), between the City and the bond trustee named therein (the "Trustee"),
pursuant to which the Bonds shall be issued and the City shall pledge and assign the
payments, revenues and receipts received pursuant to the Lease Agreement to the
Trustee for the benefit and security of the owners of the Bonds upon the terms and
conditions as set forth in the Trust Indenture;
(b) Lease Agreement dated as of the date set forth therein (the "Lease
Agreement"), between the City and the Company, under which the City will provide
funds for the purchase and installation of the Project and lease the Project to the
Company pursuant to the terms and conditions in the Lease Agreement, in consideration
of rental payments by the Company which will be sufficient to pay the principal of,
premium, if any, and interest on the Bonds;
(c) Bond Purchase Agreement dated as of the date set forth therein, between
the City and the Company, pursuant to which the Company agrees to purchase the
Bonds; and
(d) Performance Agreement dated as of the date set forth therein, between
the City and the Company, pursuant to which the City has granted the Company certain
rights with respect to the abatement of ad valorem personal property taxes on the
Project in consideration for the Company's agreement to maintain a certain level of
employment at the Project site.
SECTION 6. CREATION OF BOND FUND. The City is hereby authorized to establish
with the Trustee pursuant to the Indenture, a special trust fund in the name of the City to be
designated the "City of Riverside, Missouri, Bond Fund — Premium Waters, Inc. Project" and the
City shall cause all sums required by the Indenture to be deposited therein and shall create all
accounts therein required by the Indenture.
SECTION 7. EXECUTION OF DOCUMENTS. The City is hereby authorized to enter
into and the Mayor and City Clerk are hereby authorized and directed to execute and deliver, for
and on behalf of and as the act and deed of the City, the City Documents and the Bonds and
such other documents, certificates and instruments as may be necessary or desirable to carry
out and comply with the intent of this Ordinance.
SECTION 8. SEVERABILITY. The sections, paragraphs, sentences, clauses and
phrases of this Ordinance shall be severable. In the event that any such section, paragraph,
sentence, clause or phrase of this Ordinance is found by a court of competent jurisdiction to be
invalid, the remaining portions of this Ordinance are valid, unless the court finds the valid
portions of the Ordinance are so essential to and inseparably connected with and dependent
upon the void portion that it cannot be presumed that the Board of Aldermen has enacted the
valid portions without the void ones, or unless the court finds that the valid portions, standing
alone, are incomplete and are incapable of being executed in accordance with the legislative
intent.
SECTION 9. FURTHER AUTHORITY. The officers of the City, including the Mayor
and the City Clerk, are hereby authorized and directed to execute all documents and take such
actions as they may deem necessary or advisable in order to carry out and perform the
purposes of this Ordinance and to make ministerial alterations, changes or additions in the
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foregoing agreements, statements, instruments and other documents herein approved,
authorized and confirmed which they may approve, and the execution or taking of such action
shall be conclusive evidence of such necessity or advisability.
SECTION 10. GOVERNING LAW. This Ordinance shall be governed exclusively by
and construed in accordance with the applicable laws of the State of Missouri.
SECTION 11 - CONFLICTS. All ordinances or parts of ordinances in conflict herewith
are hereby repealed.
SECTION 12. EFFECTIVE DATE. This Ordinance shall take effect and be in full force
from and after the date of its passage by the Board of Aldermen.
BE IT REMEMBERED that the above was read two times by heading only, passed and
approved by a majority of the Board of Aldermen and APPROVED by the Mayor of the City of
Riverside, Missouri, this day of June, 2017.
• Ka leen L. Rose, Mayor
a
ATTEST:
Robin,.Kincaid, City Clerk
APPROVED AS TO FORM:
City Attorney
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$9,000,000
(Aggregate Maximum Principal Amount)
CITY OF RIVERSIDE,MISSOURI
TAXABLE INDUSTRIAL REVENUE BONDS
(PREMIUM WATERS,INC.PROJECT)
SERIES 2017
DATED AS OF JUNE 1,2017
BOND PURCHASE AGREEMENT
City of Riverside,Missouri
City Hall
2950 N.W. Vivion Road
Riverside,Missouri 64150
Ladies and Gentlemen:
On the basis of the representations, and covenants and upon the terms and conditions contained in
this Bond Purchase Agreement, Premium Waters, Inc., a Minnesota corporation (the "Purchaser"), offers
to purchase from the City of Riverside, Missouri (the "City"), the above-referenced series of Taxable
Industrial Revenue Bonds (the "Bonds"), to be issued by the City, under and pursuant to Ordinance No.
passed by the governing body of the City on June _, 2017 (the "Ordinance") and a Trust
Indenture dated as of June 1, 2017 (the "Indenture"), by and between the City and Wells Fargo Bank,
National Association, Denver, Colorado, as trustee (the "Trustee"). Capitalized terms not otherwise
defined herein shall have the meanings set forth in Section 101 of the Indenture.
SECTION 1. REPRESENTATIONS AND AGREEMENTS
(a) By the City's acceptance hereof,the City hereby represents to the Purchaser that:
(1) The City is a fourth-class city and political subdivision duly organized and
validly existing under the laws of the State of Missouri. The City is authorized under Article VI,
Section 27(b)of the Missouri Constitution and Sections 100.010 through 100.200 of the Revised
Statutes of Missouri, as amended,and its municipal code to authorize, issue and deliver the Bonds
and to consummate all transactions contemplated by this Bond Purchase Agreement, the
Ordinance, the Indenture, the Lease, the Performance Agreement and any and all other
agreements relating thereto. The proceeds of the Bonds shall be used to finance the Project for
Premium Waters, Inc., a Minnesota corporation (the "Company"), and to pay for the costs
incurred in connection with the issuance of the Bonds.
(2) There is no controversy, suit or other proceeding of any kind pending or
threatened wherein or whereby any question is raised or may be raised, questioning, disputing or
affecting in any way the legal organization of the City or its boundaries, or the right or title of any
of its officers to their respective offices, or the legality of any official act leading up to the
issuance of the Bonds or the constitutionality or validity of the indebtedness represented by the
Bonds or the validity of the Bonds,the Lease,the Indenture or the Performance Agreement.
(b) The Purchaser represents as follows:
(1) The Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Minnesota and authorized to transact business in the State
of Missouri;
(2) The execution, delivery and performance of this Bond Purchase Agreement by
the Purchaser has been duly authorized by all necessary action of the Purchaser and does not and
will not conflict with or result in the breach of any of the terms, conditions or provisions of, or
constitute a default under, its organizational documents, any law, court or administrative
regulation, decree or order applicable to or binding upon the Purchaser, or, to the best of its
knowledge, any agreement, indenture, mortgage, lease or instrument to which the Purchaser is a
party or by which it is bound;
(3) When executed and delivered by the Purchaser, this Bond Purchase Agreement
will be, and is, a legal, valid and binding obligation, enforceable in accordance with its terms,
subject, as to enforcement, to any applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting the enforcement of creditors' rights generally and further subject to the
availability of equitable remedies;and
(4) Any certificate signed by an authorized officer or agent of the Purchaser and
delivered to the County shall be deemed a representation and warranty by Purchaser to such
parties as to the statements made therein.
SECTION 2. PURCHASE,SALE AND DELIVERY OF THE BONDS
On the basis of the representations and covenants contained herein and in the other agreements
referred to herein, and subject to the terms and conditions herein set forth and in the Indenture, the
Purchaser agrees to purchase from the City and the City agrees to sell to the Purchaser the Bonds on the
terms and conditions set forth herein.
The Bonds shall be sold to the Purchaser by the City on the Closing Date (hereinafter defined)
upon payment of an amount equal to the Closing Price(hereinafter defined) for the Bonds, which amount
shall be deposited in the Project Fund as provided in the Indenture and shall thereafter on the Closing
Date immediately be applied to the payment of Project Costs as provided in the Lease. From time to time
after the Closing Date as additional Project Costs are incurred, the Purchaser may make additional
payments with respect to the Bonds ("Additional Payments") to the Trustee under the Indenture, which
Additional Payments shall be deposited in the Project Fund and applied to the payment of Project Costs;
provided that the sum of the Closing Price and all such Additional Payments for the Bonds shall not, in
the aggregate, exceed$9,000,000.
As used herein, the term "Closing Date" shall mean June 2017, or such other date as shall
be mutually agreed upon by the City and the Purchaser; the term"Closing Price"shall mean,with respect
to the Bonds, that certain amount specified in writing by the Purchaser and agreed to by the City as the
amount required to fund the initial disbursement from the Project Fund on the Closing Date.
The Bonds shall be issued under and secured as provided in the Ordinance and in the Indenture
and the Lease authorized thereby and the Bonds shall have the maturity, interest rate and shall be subject
to redemption as set forth therein. The delivery of the Bonds shall be made in definitive form as a fully
registered bond in the maximum aggregate principal denomination of $9,000,000; provided, that the
principal amount of the Bonds outstanding at any time shall be that amount recorded in the official bond
registration records of the Trustee and further provided that interest shall be payable on the Bonds only on
the outstanding principal amount of the Bonds,as more fully provided in the Indenture.
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The Company agrees to indemnify and hold harmless the City, the Trustee, and any member,
officer, official or employee of the City or of the Trustee within the meaning of Section 15 of the
Securities Act of 1933, as amended (collectively, the "Indemnified Parties"), against any and all losses,
claims, damages, liabilities or expenses whatsoever caused by any violation or failure to comply with any
federal or state securities laws in connection with the offering and sale of the Bonds to the Purchaser,
unless such loss, claim, damage, liability or expense arises as a result of the breach of any representation
or warranty by the City hereunder.
In case any action shall be brought against one or more of the Indemnified Parties based upon the
foregoing indemnification and in respect of which indemnity may be sought against the Company, the
Indemnified Parties shall promptly notify the Company in writing and the Company shall promptly
assume the defense thereof, including the employment of counsel, the payment of all expenses and the
right to negotiate and consent to settlement. Any one or more of the Indemnified Parties shall have the
right to employ separate counsel in any such action and to participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Indemnified Party or Indemnified Parties
unless employment of such counsel has been specifically authorized by the Company. The Company
shall not be liable for any settlement of any such action effected without its consent by any of the
Indemnified Parties, but if settled with the consent of the Company or if there be a final judgment for the
plaintiff in any such action against the Company or any of the Indemnified Parties, with or without the
consent of the Company, the Company agrees to indemnify and hold harmless the Indemnified Parties to
the extent provided herein.
SECTION 3. CONDITIONS TO THE PURCHASER'S OBLIGATIONS
The Purchaser's obligations hereunder shall be subject to the due performance by the City of the
City's obligations and agreements to be performed hereunder on or prior to the Closing Date and to the
accuracy of and compliance with the City's representations contained herein, as of the date hereof and as
of the Closing Date,and are also subject to the following conditions:
(a) There shall be delivered to the Purchaser on or prior to the Closing Date a duly
executed copy of the Ordinance, the Trust Indenture and the Lease and any other instrument
contemplated thereby shall be in full force and effect and shall not have been modified or
changed except as may have been agreed to in writing by the Purchaser;
(b) The City shall confirm on the Closing Date by a certificate that at and as of the
Closing Date the City has taken all action necessary to issue the Bonds and that there is no
controversy, suit or other proceeding of any kind pending or threatened wherein any question is
raised affecting in any way the legal organization of the City or the legality of any official act
shown to have been done in the transcript of proceedings leading up to the issuance of the Bonds,
or the constitutionality or validity of the indebtedness represented by the Bonds or the validity of
the Bonds or any proceedings in relation to the issuance or sale thereof;
(c) The Company shall execute a certificate, dated the Closing Date, to the effect
that (i) no litigation, proceeding or investigation is pending against the Company or its affiliates
or, to the knowledge of the Company, threatened which would (A) contest, affect, restrain or
enjoin the issuance, validity, execution, delivery or performance of the Bonds, or(B) in any way
contest the existence or powers of the Company, (ii) no litigation, proceeding or investigation is
pending or, to the knowledge of the Company, threatened against the Company that could
reasonably be expected to adversely affect its ability to perform its obligations hereunder,(iii)the
representations and warranties of the Company herein were and are true and correct in all
material respects and not misleading as of the date made and as of the Closing Date, and(iv)such
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other matters as are reasonably requested by the other parties in connection with the issuance of
the Bonds;and
(d) Receipt by the Purchaser and the Company of an approving opinion from
Gilmore&Bell,P.C., in form and substance satisfactory to the Purchaser and the Company.
SECTION 4. THE PURCHASER'S RIGHT TO CANCEL
The Purchaser shall have the right to cancel its obligation hereunder to purchase the Bonds by
notifying the City in writing of its election to make such cancellation at any time prior to the Closing
Date.
SECTION 5. CONDITIONS OF OBLIGATIONS
The obligations of the parties hereto are subject to the receipt of the approving opinion of
Gilmore & Bell, P.C., Bond Counsel, with respect to the validity of the authorization and issuance of the
Bonds.
SECTION 6. REPRESENTATIONS AND AGREEMENTS TO SURVIVE DELIVERY
All of the representations and agreements by either party shall remain operative and in full force
and effect,and shall survive delivery of the Bonds to the Purchaser.
SECTION 7. PAYMENT OF EXPENSES
The Company shall pay all reasonable expenses and costs to effect the authorization, preparation,
issuance, delivery and sale of the Bonds. To the best of the City's knowledge and belief, the only
expenses payable by the Company in connection with the issuance of the Bonds are the following: (1)the
legal fees of Gilmore&Bell, P.C., as Bond Counsel in the amount of$ plus reimbursement for
out-of-pocket expenses of$ , (2) publication costs and filing fees, if any, and (3) the Trustee's
initial acceptance fee and first year's administrative fee totaling$
SECTION 8. NOTICE
Any notice or other communication to be given to the City under this Agreement may be given by
mailing or delivering the same in writing to the City of Riverside, Missouri, 2950 N.W. Vivion Road,
Riverside, Missouri 64150, Attention: City Clerk; any notice or other communication to be given to the
Purchaser or the Company under this Agreement may be given by delivering the same in writing to the
following:
Premium Waters,Inc.
2100 Summer Street NE, Suite 200
Minneapolis, Minnesota 55413
ATTN: Mike Van Rossum
Facsimile: (612)623-0363
SECTION 9. APPLICABLE LAW;ASSIGNABILITY
This Bond Purchase Agreement shall be governed by the laws of the State of Missouri and may
be assigned by the Purchaser with the written consent of the City.
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SECTION 10. EXECUTION OF COUNTERPARTS
This Bond Purchase Agreement may be executed in several counterparts, each of which shall be
regarded as an original and all of which shall constitute one and the same document.
Very truly yours,
PREMIUM WATERS,INC.,
as Purchaser
Date of Execution: By:
Name: Bernard A. Zarda
June_ 2017 Title: Senior Vice President
Bond Purchase Agreement S-1
Riverside(Premium Waters,Inc.Project)
Series 2017
Accepted and Agreed to this day of June, 2017.
CITY OF RIVERSIDE,MISSOURI
BX
Nthleen L. Rose
Title: Mayor
[SEAL]
ATTEST:
By:
Name: Robin Kincaid
Title: City Clerk
Bond Purchase Agreement S_2
Riverside(Premium Waters,Inc.Project)
Series 2017
CITY OF RIVERSIDE,MISSOURI,
The City,
AND
WELLS FARGO BANK,NATIONAL ASSOCIATION,
As Trustee
TRUSTINDENTURE
Dated as of June 1,2017
Relating to:
$9,000,000
(Aggregate Maximum Principal Amount)
City of Riverside,Missouri
Taxable Industrial Revenue Bonds
(Premium Waters,Inc.Project)
Series 2017
TRUST INDENTURE
TABLE OF CONTENTS
Page
Parties ..............................................................................................................................1
Recitals ............................................................................................................................1
GrantingClauses .............................................................................................................2
ARTICLE I
DEFINITIONS
Section 101. Definitions of Words and Terms.......................................................................................3
Section 102. Rules of Interpretation......................................................................................................8
ARTICLE II
THE BONDS
Section 201. Title and Amount of Bonds...............................................................................................9
Section202. Nature of Obligation.........................................................................................................9
Section 203. Denomination,Number and Dating of the Bonds............................................................9
Section 204. Method and Place of Payment of Bonds...........................................................................9
Section 205. Execution and Authentication of Bonds.........................................................................10
Section 206. Registration,Transfer and Exchange of Bonds...............................................................10
Section 207. Persons Deemed Owners of Bonds.................................................................................l l
Section 208. Authorization of the Bonds.............................................................................................l l
Section 209. Authorization of Additional Bonds.................................................................................13
Section 210. Mutilated,Lost, Stolen or Destroyed Bonds...................................................................15
Section 211. Cancellation and Destruction of Bonds Upon Payment.................................................15
ARTICLE III
REDEMPTION OF BONDS
Section301. Redemption of Bonds.....................................................................................................15
Section 302. Effect of Call for Redemption.........................................................................................16
Section 303. Notice of Redemption.....................................................................................................16
ARTICLE IV
FORM OF BONDS
Section 401. Form Generally...............................................................................................................16
ARTICLE V
CUSTODY AND APPLICATION OF BOND PROCEEDS
Section 501. Creation of Funds ...........................................................................................................17
Section 502. Deposits into the Project Fund........................................................................................17
Section 503. Disbursements from the Project Fund............................................................................17
Section 504. Completion of the Project...............................................................................................17
Section 505. Deposits into and Disbursements from the Costs of Issuance Fund...............................17
Section 506. Disposition Upon Acceleration.......................................................................................18
ARTICLE VI
REVENUES AND FUNDS
Section 601. Creation of the Bond Fund..............................................................................................18
Section 602. Deposits Into the Bond Fund..........................................................................................18
Section 603. Application of Moneys in the Bond Fund ......................................................................18
Section 604. Payments Due on Days Other Than Business Days.......................................................19
Section 605. Nonpresentment of Bonds..............................................................................................19
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 701. Moneys to be Held in Trust.............................................................................................19
Section 702. Investment of Moneys in Project Fund and Bond Fund.................................................20
Section703. Record Keeping..............................................................................................................20
ARTICLE VIII
GENERAL COVENANTS AND PROVISIONS
Section 801. Payment of Principal and Interest...................................................................................20
Section 802. Authority to Execute Indenture and Issue Bonds...........................................................20
Section 803. Performance of Covenants..............................................................................................21
Section 804. Instruments of Further Assurance...................................................................................21
Section 805. Recordings and Filings...................................................................................................21
Section 806. Inspection of Project Books............................................................................................21
Section 807. Enforcement of Rights Under the Lease.........................................................................21
ARTICLE IX
DEFAULT AND REMEDIES
Section 901 Events of Default;Notice;Opportunity to Cure.............................................................22
Section 902. Acceleration of Maturity in Event of Default.................................................................22
Section 903. Surrender of Possession of Trust Estate; Rights and Duties of Trustee
inPossession...............................................................................................................22
Section 904. Appointment of Receivers in Event of Default...............................................................23
Section 905. Exercise of Remedies by the Trustee..............................................................................23
Section 906. Limitation on Exercise of Remedies by Owners............................................................23
Section 907. Right of Owners to Direct Proceedings..........................................................................24
Section 908. Application of Moneys in Event of Default....................................................................24
Section 909. Remedies Cumulative.....................................................................................................25
Section 910. Waivers of Events of Default..........................................................................................25
(ii)
ARTICLE X
THE TRUSTEE
Section 1001. Acceptance of the Trusts.................................................................................................26
Section 1002. Fees, Charges and Expenses of the Trustee....................................................................28
Section 1003. Notice to Owners if Default Occurs...............................................................................29
Section 1004. Intervention by the Trustee.............................................................................................29
Section 1005. Successor Trustee Upon Merger, Consolidation or Sale.................................................29
Section 1006. Resignation of Trustee....................................................................................................29
Section1007. Removal of Trustee.........................................................................................................29
Section 1008. Appointment of Successor Trustee.................................................................................29
Section 1009. Vesting of Trusts in Successor Trustee...........................................................................30
Section 1010. Right of Trustee to Pay Taxes and Other Charges..........................................................30
Section 1011. Trust Estate May be Vested in Co-Trustee......................................................................30
Section1012. Accounting......................................................................................................................31
Section 1013. Performance of Duties Under the Lease.........................................................................31
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 1101. Supplemental Indentures Not Requiring Consent of Owners.........................................31
Section 1102. Supplemental Indentures Requiring Consent of Owners................................................32
Section 1103. Company's Consent to Supplemental Indentures...........................................................32
Section 1104. Opinion of Counsel.........................................................................................................32
ARTICLE XII
SUPPLEMENTAL LEASES
Section 1201. Supplemental Leases Not Requiring Consent of Owners...............................................33
Section 1202. Supplemental Leases Requiring Consent of Owners......................................................33
Section1203. Opinion of Counsel.....................................................................;...................................33
ARTICLE XHI
SATISFACTION AND DISCHARGE OF INDENTURE
Section 1301. Satisfaction and Discharge of this Indenture..................................................................33
Section 1302. Bonds Deemed to be Paid...............................................................................................34
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 1401. Consents and Other Instruments by Owners...................................................................34
Section 1402. Limitation of Rights Under this Indenture......................................................................35
Section1403. Notices............................................................................................................................35
Section1404. Severability.....................................................................................................................36
Section 1405. Execution in Counterparts ..............................................................................................36
Section1406. Governing Law...............................................................................................................36
Section 1407. Electronic Storage...........................................................................................................36
(iii)
Signaturesand Seal.......................................................................................................S-1
Exhibit A: Description of Project Site
Exhibit B: Project Equipment
Exhibit C: Form of Bonds
Exhibit D: Form of Representation Letter
(iv)
TRUST INDENTURE
THIS TRUST INDENTURE dated as of June 1, 2017, between the CITY OF RIVERSIDE,
MISSOURI, a fourth-class city and political subdivision organized and existing under the laws of the
State of Missouri (the"City"), and WELLS FARGO BANK,NATIONAL ASSOCIATION, a national
banking association duly organized and existing and authorized to accept and execute trusts of the
character herein set forth under the laws of the United States of America,with a designated corporate trust
office located in the City of Denver, Colorado,as Trustee(the"Trustee");
RECITALS:
1. The City is authorized and empowered pursuant to the provisions of Article VI,
Section 27(b) of the Missouri Constitution and Sections 100.010 through 100.200, inclusive, of the
Revised Statutes of Missouri, as amended (collectively, the "Act"), to purchase, construct, extend and
improve certain projects (as defined in Section 100.010 of the Revised Statutes of Missouri, as amended)
and to issue Industrial Revenue bonds for the purpose of providing funds to pay the costs of such projects
and to lease or otherwise dispose of such projects to private persons or businesses for manufacturing,
commercial, research and development, warehousing and industrial development purposes upon such
terms and conditions as the City shall deem advisable.
2. Pursuant to the Act, the Board of Aldermen of the City gave notice to the affected taxing
jurisdictions in accordance with Section 100.059.1 of the Act and the financing of the costs of a project
(the "Project") for Premium Waters, Inc., a Minnesota corporation (the "Company"), consisting of the
acquisition and installation of new equipment and machinery (the "Project Equipment," as more fully
described on Exhibit B hereto) at the Company's existing facility located on certain real property in
Riverside, Missouri (the"Project Site,"as more fully described on Exhibit A hereto), out of the proceeds
of the Industrial Revenue bonds to be issued under the Act to provide funds to pay the costs of the
Project, and to lease or sell the Project to the Company for the purpose of financing the costs of the
Project.
3. Following such notice to affected taxing jurisdictions,the Board of Aldermen of the City
adopted Ordinance No. on June , 2017, approving a plan for the Company's economic
development project to be financed through the issuance of $9,000,000 principal amount of Taxable
Industrial Revenue Bonds(Premium Waters, Inc. Project), Series 2017(the"Bonds").
4. Pursuant to Ordinance No. (the "Ordinance") adopted by the Board of
Aldermen of the City on June _, 2017, the City is authorized to execute and deliver (a) this Trust
Indenture for the purpose of issuing and securing the Bonds, (b)the Lease Agreement with the Company,
as lessee, under which the City, as lessor,will purchase and equip the Project and will lease the Project to
the Company, in consideration of rentals which will be sufficient to pay the principal of and interest on
the Bonds, and(c)the Performance Agreement for the purpose of setting forth the terms and conditions of
the Project's exemption from ad valorem personal property taxes and certain payments in lieu of taxes to
be made by the Company with respect to the Project.
5. All things necessary to make the Bonds, when authenticated by the Trustee and issued as
in this Indenture provided, the valid and legally binding obligations of the City, and to constitute this
Indenture a valid and legally binding pledge and assignment of the Trust Estate herein made for the
security of the payment of the principal of and interest on the Bonds, have been done and performed, and
the execution and delivery of this Indenture and the execution and issuance of the Bonds, subject to the
terms hereof,have in all respects been duly authorized.
NOW,THEREFORE,THIS TRUST INDENTURE WITNESSETH:
GRANTING CLAUSES
That the City, in consideration of the premises, the acceptance by the Trustee of the trusts hereby
created,the purchase and acceptance of the Bonds by the Owners thereof, and of other good and valuable
consideration, the receipt of which is hereby acknowledged, and in order to secure the payment of the
principal of and interest on all of the Bonds issued and outstanding under this Indenture from time to time
according to their tenor and effect, and to secure the performance and observance by the City of all the
covenants, agreements and conditions herein and in the Bonds contained, does hereby pledge and assign
to the Trustee and its successors and assigns forever, the property described in paragraphs(a), (b)and(c)
below(said property being herein referred to as the"Trust Estate"),to-wit:
(a) All right, title and interest in and to the Project together with the tenements,
hereditaments, appurtenances, rights, easements, privileges and immunities thereunto belonging
or appertaining and, to the extent permissible, all permits, certificates, approvals and
authorizations;
(b) All right, title and interest of the City in, to and under the Lease (excluding the
City's right to receive moneys for its own account and the City's rights to indemnification or to
be protected from liabilities by insurance policies required by the Lease, as provided therein or
herein), and all rents, revenues and receipts derived by the City from the Project including,
without limitation, all rentals and other amounts to be received by the City and paid by the
Company under and pursuant to and subject to the provisions of the Lease; and
(c) All moneys and securities from time to time held by or now or hereafter required
to be paid to the Trustee under the terms of this Indenture, and any and all other real or personal
property of every kind and nature from time to time hereafter, by delivery or by writing of any
kind, pledged, assigned or transferred as and for additional security hereunder by the City or by
anyone in its behalf, or with its written consent, to the Trustee, which is hereby authorized to
receive any and all such property at any and all times and to hold and apply the same subject to
the terms hereof.
TO HAVE AND TO HOLD, all and singular, the Trust Estate with all rights and privileges
hereby pledged and assigned or agreed or intended so to be,to the Trustee and its successors and assigns
forever;
IN TRUST NEVERTHELESS,upon the terms and subject to the conditions herein set forth,for
the equal and proportionate benefit, protection and security of all Owners from time to time of the Bonds
outstanding under this Indenture, without preference, priority or distinction as to lien or otherwise of any
of the Bonds over any other of the Bonds except as expressly provided in or permitted by this Indenture;
PROVIDED, HOWEVER, that if the City pays, or causes to be paid, the principal of and
interest on the Bonds, at the time and in the manner mentioned in the Bonds, according to the true intent
and meaning thereof, or provides for the payment thereof(as provided in Article XIII hereof) and pays
or causes to be paid to the Trustee all other sums of money due or to become due to it in accordance with
the terms and provisions hereof, then upon such final payments this Indenture and the rights thereby
granted shall cease, determine and be void; otherwise,this Indenture shall be and remain in full force and
effect.
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THIS INDENTURE FURTHER WITNESSETH, and it is hereby expressly declared,
covenanted and agreed by and between the parties hereto, that all Bonds issued and secured hereunder are
to be issued,authenticated and delivered and that all the Trust Estate is to be held and applied under, upon
and subject to the terms, conditions, stipulations, covenants, agreements, trusts, uses and purposes as
hereinafter expressed, and the City does hereby agree and covenant with the Trustee and with the
respective Owners from time to time, as follows:
ARTICLE I
DEFINITIONS
Section 101. Definitions of Words and Terms. In addition to words and terms defined in the
Lease, which definitions shall be deemed to be incorporated herein, and terms defined elsewhere in this
Indenture, the following words and terms as used in this Indenture shall have the following meanings,
unless some other meaning is plainly intended:
"Act" means, collectively, Article VI, Section 27(b) of the Missouri Constitution, as amended,
and Sections 100.010 through 100.200 of the Revised Statutes of Missouri, as amended.
"Additional Bonds" means any additional parity bonds issued pursuant to Section 209 of this
Indenture.
"Additional Rent"means the additional rental described in Section 5.2 and 6.2 of the Lease.
"Authorized City Representative" means the Mayor, City Clerk or such other person at the
time designated to act on behalf of the City as evidenced by written certificate furnished to the Company
and the Trustee containing the specimen signature of such person and signed on behalf of the City by its
Mayor. Such certificate may designate an alternate or alternates each of whom shall be entitled to
perform all duties of the Authorized City Representative.
"Authorized Company Representative" means the person at the time designated to act on
behalf of the Company as evidenced by written certificate furnished to the City and the Trustee containing
the specimen signature of such person and signed on behalf of the Company by authorized officers. Such
certificate may designate an alternate or alternates each of whom shall be entitled to perform all duties of
the Authorized Company Representative.
"Basic Rent"means the rental described in Section 5.1 of the Lease.
"Bond" or "Bonds" means the Taxable Industrial Revenue Bonds (Premium Waters, Inc.
Project), issued, authenticated and delivered under and pursuant to this Indenture, including an initial
series of Taxable Industrial Revenue Bonds(Premium Waters, Inc. Project), Series 2017, in the maximum
aggregate principal amount of$9,000,000 and, upon the issuance of any Additional Bonds pursuant to
Section 209 of this Indenture,the term"Bonds"shall include such Additional Bonds.
"Bond Fund" means the "City of Riverside, Missouri, Bond Fund -- Premium Waters, Inc."
created in Section 601 of this Indenture.
"Bond Purchase Agreement" means the agreement by that name with respect to the Bonds by
and between the City and the Purchaser.
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"Business Day" means any day other than a Saturday or Sunday or legal holiday or a day on
which banks located in the city in which the designated corporate trust office or the principal payment
office of the Trustee are required or authorized by law to remain closed.
"City" means the City of Riverside, Missouri, a fourth-class city and political subdivision
organized and existing under the laws of the State of Missouri, and its successors and assigns.
"Closing Date" means the date identified in the Bond Purchase Agreement for the initial
issuance and delivery of the Bonds.
"Closing Price" means the amount specified in writing by the Purchaser and agreed to by the
City as the amount required to pay for the initial issuance of the Bonds on the Closing Date, which
amount shall be equal to any Project Costs spent by the Company from its own funds before the Closing
Date, including costs of issuance.
"Company" means Premium Waters, Inc., a Minnesota corporation, and its successors or
assigns.
"Completion Date" means the dates of execution of the certificates with respect to each
component portion of the Project and the date of execution of the certificate with respect to the entire
Project required by Section 4.5 of the Lease and Section 504 of this Indenture and filed with the Trustee.
"Costs of Issuance Fund" means the "City of Riverside, Missouri, Costs of Issuance Fund --
Premium Waters,Inc."created in Section 501 of this Indenture.
"Cumulative Outstanding Principal Amount" means the aggregate principal amount of all
Bonds outstanding under the provisions of this Indenture, not to exceed $9,000,000, as reflected in the
records maintained by the Trustee as provided in the Bonds and this Indenture.
"Event of Default" means, with respect to this Indenture, any Event of Default as defined in
Section 901 hereof and, with respect to the Lease, any Event of Default as described in Section 12.1 of
the Lease.
"Financing Document" means any loan agreement, credit agreement, security agreement,
mortgage, participation agreement, lease agreement, sublease, ground lease, hedging agreement or other
document executed by or on behalf of a Financing Party.
"Financing Party" means any Person providing debt, lease or equity financing(including equity
contributions or commitments)or hedging arrangements, or any renewal, extension or refinancing of any
such financing or hedging arrangements, or any guarantee, insurance, letters of credit or credit support for
or in connection with such financing or hedging arrangements, in connection with the development,
ownership, lease, operation or maintenance of the Project or interests or rights in the Lease, or any part
thereof, including any trustee or agent acting on any such Person's behalf.
"Full Insurable Value" means the reasonable replacement cost of the Project less physical
depreciation and exclusive of land, excavations, footings, foundation and parking lots as determined in
accordance with Section 7.2(a)of the Lease.
"Government Securities"means direct obligations of,or obligations the payment of principal of
and interest on which are unconditionally guaranteed by,the United States of America.
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"Indenture" means this Trust Indenture, as from time to time amended and supplemented by
Supplemental Indentures in accordance with the provisions of Article XI hereof.
"Investment Securities"means any of the following securities:
(a) Government Securities;
(b) obligations of Fannie Mae, the Government National Mortgage Association, the
Federal Financing Bank, the Federal Intermediate Credit Corporation, Federal Banks for
Cooperatives, Federal Land Banks, Federal Home Loan Banks, Farmers Home Administration
and Federal Home Loan Mortgage Corporation;
(c) direct and general obligations of any state of the United States of America,to the
payment of the principal of and interest on which the full faith and credit of such state is pledged,
provided that at the time of their purchase under this Indenture such obligations are rated in either
of the two highest rating categories by a nationally-recognized bond rating agency;
(d) certificates of deposit, whether negotiable or nonnegotiable, issued by any bank
or trust company organized under the laws of any state of the United States of America or any
national banking association (including the Trustee or any of its affiliates), provided that such
certificates of deposit shall be either (1)continuously and fully insured by the Federal Deposit
Insurance Corporation, or (2)continuously and fully secured by such securities as are described
above in clauses (a) through (c), inclusive, which shall have a market value at all times at least
equal to the principal amount of such certificates of deposit and shall be deposited with the
Trustee or a custodian bank, trust company or national banking association. The bank, trust
company or national banking association holding each such certificate of deposit required to be so
secured shall furnish the Trustee written evidence satisfactory to it that the aggregate market
value of all such obligations securing each such certificate of deposit will at all times be an
amount at least equal to the principal amount of each such certificate of deposit and the Trustee
shall be entitled to rely on each such undertaking;
(e) shares of a fund registered under the Investment Company Act of 1940, as
amended, whose shares are registered under the Securities Act of 1933, as amended, having
assets of at least$100,000,000,and which shares,at the time of purchase,are rated by Standard&
Poor's and Moody's in one of the two highest rating categories (without regard to any
refinements or gradation of rating category by numerical modifier or otherwise)assigned by such
rating agencies for obligations of that nature;or
(f) any other investment approved in writing by the Authorized City Representative
and the Owners of all of the Outstanding Bonds.
"Lease" means the Lease Agreement dated as of June 1, 2017, between the City, as lessor, and
the Company, as lessee, as from time to time amended and supplemented by Supplemental Leases in
accordance with the provisions thereof and of Article XII of this Indenture.
"Lease Term" means the period from the effective date of the Lease until the expiration thereof
pursuant to Section 3.2 of the Lease.
"Leasehold Mortgage" means any leasehold mortgage, leasehold deed of trust, assignment of
rents and leases, security agreement or other agreement relating to the Project permitted pursuant to the
provisions of Section 10.4 of the Lease.
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"Net Proceeds" means, when used with respect to any insurance or condemnation award with
respect to the Project, the gross proceeds from the insurance or condemnation award remaining after
payment of all expenses (including attorneys' fees, trustee's fees and any extraordinary expenses of the
City and the Trustee) incurred in the collection of such gross proceeds.
"Outstanding," when used with reference to Bonds, means, as of a particular date, all Bonds
theretofore authenticated and delivered,except:
(a) Bonds theretofore cancelled by the Trustee or delivered to the Trustee for
cancellation;
(b) Bonds deemed to be paid in accordance with the provisions of Section 1302
hereof;and
(c) Bonds in exchange for or in lieu of which other Bonds have been authenticated
and delivered pursuant to this Indenture.
"Owner" means the registered owner of any Bond as recorded on the bond registration records
maintained by the Trustee.
"Paying Agent" means the Trustee and any other bank or trust company designated by this
Indenture as paying agent for the Bonds at which the principal of or interest on the Bonds shall be
payable.
"Payment Date"means the date on which principal of or interest on any Bond is payable, which
shall be December 1 of each year that the Bonds are Outstanding.
"Performance Agreement" means the Performance Agreement dated as of June 1, 2017,
between the City and the Company,as amended and supplemented from time to time.
"Permitted Encumbrances" means, as of any particular time, as the same may encumber the
Project Site (a)liens for ad valorem taxes and special assessments not then delinquent, (b) the Indenture,
the Lease and the Performance Agreement, (c) utility, access and other easements and rights-of-way,
mineral rights, restrictions, exceptions and encumbrances that will not materially interfere with or impair
the operations being conducted on the Project Site or easements granted to the City, (d) such minor
defects, irregularities, encumbrances, easements, mechanic's liens, rights-of-way and clouds on title as
normally exist with respect to properties similar in character to the Project Site and as do not in the
aggregate materially impair the property affected thereby for the purpose for which it was acquired or is
held by the City, (e) liens or security interests granted pursuant to any Leasehold Mortgage or any
Financing Documents, and (f) any other lien, encumbrance, lease, easements, restrictions or covenants
consented to in writing by the Company and the Owners of 100% of the principal amount of the Bonds.
Nothing in this definition shall authorize or permit any party other than the Company to create or consent
to the creation of any Permitted Encumbrance.
"Person" means an individual, partnership, corporation, business trust, joint stock company,
limited liability company, bank, insurance company, unincorporated association, joint venture or other
entity of whatever nature.
"Plans and Specifications" means the plans and specifications prepared for and showing the
Project, as amended by the Company from time to time before the Completion Date, the same being on
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file at the office of the Company and which shall be available for reasonable inspection during normal
business hours and upon not less than one Business Day's prior notice by the City and its duly appointed
representatives.
"Project" means the project referred to in the recitals of this Indenture, located on the Project
Site, such project including the Project Equipment, and all additions, modifications, improvements,
replacements and substitutions made to the Project pursuant to the Lease as they may at any time exist.
"Project Costs" means all costs of purchase and installation of the Project, including the
following:
(a) all costs and expenses necessary or incident to the acquisition and installation of
Project Equipment on the Project Site, that the Company conveys to the City;
(b) fees and expenses of architects, appraisers,surveyors and engineers for estimates,
surveys, soil borings and soil tests and other preliminary investigations and items necessary to the
commencement of construction,preparation of plans,drawings and specifications and supervision
of construction, as well as for the performance of all other duties of professionals and consultants
in relation to the purchase and installation of the Project or the issuance of the Bonds;
(c) all costs and expenses of every nature incurred in purchasing and installing the
Project Equipment, including the actual cost of labor and materials, machinery, furnishings and
equipment as payable to contractors, builders and materialmen in connection with the purchase
and installation of the Project, but excluding any real property improvements;
(d) interest accruing on the Bonds during the installation period of the Project;
(e) reasonable expenses of administration, supervision and inspection properly
chargeable to the Project, legal fees and expenses, fees and expenses of accountants and other
consultants, publication and printing expenses, and initial fees and expenses of the Trustee to the
extent that said fees and expenses are necessary or incident to the issuance and sale of the Bonds
or the purchase and installation of the Project;
(f) all other items of expense not elsewhere specified in this definition as may be
necessary or incident to: (1) the authorization, issuance and sale of the Bonds, including costs of
issuance of the Bonds; (2) the purchase and installation of the Project; and (3) the financing
thereof; and
(g) reimbursement to the Company or those acting for it for any of the above
enumerated costs and expenses incurred and paid by them before or after the execution of the
Lease.
"Project Equipment" means all items of equipment or other personal property acquired or
installed or acquired for installation on the Project Site pursuant to Article IV of the Lease and paid for in
whole or in part from the proceeds of Bonds, as described in Exhibit B attached hereto and by this
reference made a part hereof, and all replacements thereof and substitutions therefor which, pursuant to
Section 8.2 of the Lease,constitute part of the Project Equipment.
"Project Fund" means the "City of Riverside, Missouri, Project Fund -- Premium Waters, Inc."
created in Section 501 of this Indenture.
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"Project Site" means all of the real estate as described in Exhibit A attached hereto and by this
reference made a part hereof.
"Purchaser" means the entity identified in the Bond Purchase Agreement as the purchaser of the
Bonds.
"Qualified Institutional Buyer" has the meaning set forth in Rule 144A (17 CFR 230.144A)
promulgated by the Securities Exchange Commission under the Securities Act of 1933, as amended.
"State"means the State of Missouri.
"Supplemental Indenture" means any indenture supplemental or amendatory to this Indenture
entered into by the City and the Trustee pursuant to Article XI hereof.
"Supplemental Lease" means any supplement or amendment to the Lease entered into pursuant
to Article XII hereof.
"Trust Estate"means the Trust Estate described in the Granting Clauses of this Indenture.
"Trustee" means Wells Fargo Bank, National Association, in the City of Denver, Colorado, a
national banking association duly organized and existing under the laws of the United States of America,
and its successor or successors and any other corporation which at the time may be substituted in its place
pursuant to and at the time serving as Trustee under this Indenture.
Section 102. Rules of Interpretation.
(a) Unless the context shall otherwise indicate, the words importing the singular number
shall include the plural and vice versa, and words importing Persons shall include firms, associations and
corporations, including public bodies, as well as natural Persons.
(b) Wherever in this Indenture 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.
(c) All references in this instrument to designated "Articles," "Sections" and other
subdivisions are, unless otherwise specified, to the designated Articles, Sections and subdivisions of this
instrument as originally executed. The words "herein,""hereof,""hereunder"and other words of similar
import refer to this Indenture as a whole and not to any particular Article, Section or subdivision.
(d) Whenever an item or items are listed after the word "including," such listing is not
intended to be a listing that excludes items not listed.
(e) The Table of Contents and the Article and Section headings of this Indenture shall not be
treated as a part of this Indenture or as affecting the true meaning of the provisions hereof.
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ARTICLE H
THE BONDS
Section 201. Title and Amount of Bonds. No Bonds may be issued under this Indenture
except in accordance with the provisions of this Article. The Bonds authorized to be issued under this
Indenture shall be designated as "City of Riverside, Missouri, Taxable Industrial Revenue Bonds
(Premium Waters, Inc. Project), Series 2017." The maximum total principal amount of Bonds that may
be issued hereunder is hereby expressly limited to$9,000,000 in one or more series of Bonds.
Section 202. Nature of Obligation. The Bonds and the interest thereon shall be special
obligations of the City payable solely out of the rents, revenues and receipts derived by the City from the
Project and the Lease, and not from any other fund or source of the City. The Bonds are secured by a
pledge and assignment of the Trust Estate to the Trustee in favor of the Owners, as provided in this
Indenture. The Bonds and the interest thereon shall not constitute general obligations of the City, the
State or any political subdivision thereof, and neither the City, the State or related political subdivision
thereof shall be liable thereon, and the Bonds shall not constitute an indebtedness within the meaning of
any constitutional, charter or statutory debt limitation or restriction, and are not payable in any manner by
taxation.
Section 203. Denomination,Number and Dating of the Bonds.
(a) The Bonds shall be issuable in the form of one fully-registered Bond, in substantially the
form set forth in Exhibit C hereto, in the denomination of$0.01 or any multiple thereof.
(b) The Bonds shall be dated by the Trustee as of the date of initial delivery thereof as
provided herein. If the Bonds are at any time thereafter transferred,any replacement Bonds shall be dated
as of the date of authentication thereof.
Section 204. Method and Place of Payment of Bonds.
(a) The principal of and interest on the Bonds shall be payable in any coin or currency of the
United States of America which on the respective dates of payment thereof is legal tender for payment of
public and private debts.
(b) Payment of the principal of the Bonds shall be made upon the presentation and surrender
of such Bonds at the principal payment office of any Paying Agent named in the Bonds. The payment of
principal on the Bonds shall be noted on the Bonds on Schedule I thereto and the registration books
maintained by the Trustee pursuant to Section 206. Payment of the interest on the Bonds shall be made
by the Trustee on each Payment Date to the Person appearing on the registration books of the Trustee
hereinafter provided for as the Owner thereof on the fifteenth day(whether or not a Business Day)of the
calendar month next preceding such Payment Date by check or draft mailed to such Owner at such
Owner's address as it appears on such registration books.
(c) The Bonds and the original Schedule I thereto shall be held by the Trustee in trust,unless
otherwise directed in writing by the Owner. If the Bonds are held by the Trustee, the Trustee shall, on
each Payment Date, send a revised copy of Schedule I via facsimile or other electronic means to the
Owner, the Company (if not the Owner) and the City. Absent manifest error, the amounts shown on
Schedule I as noted by the Trustee shall be conclusive evidence of the principal amount paid on the
Bonds.
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(d) If there is one Owner of the Bonds, the Trustee is authorized to make the final or any
interim payments of principal on such Bonds by internal bank transfer or by electronic transfer to an
account at a commercial bank or savings institution designated in writing by such Owner and located in
the continental United States. The Trustee is also authorized to make interest payments on such Bonds by
internal bank transfer or by electronic transfer to an account at a commercial bank or savings institution
designated by such Owner and located in the continental United States. If the Company is the Owner of
all the Bonds Outstanding, payments of principal and interest on the Bonds may be made via a transaction
entry on the trust records held by the Trustee and Paying Agent.
Section 205. Execution and Authentication of Bonds.
(a) The Bonds shall be executed on behalf of the City by the manual or facsimile signature of
its Mayor and attested by the manual or facsimile signature of the City Clerk, and shall have the corporate
seal of the City affixed thereto or imprinted thereon. If any officer whose signature or facsimile thereof
appears on the Bonds ceases to be such officer before the delivery of such Bond, such signature or
facsimile thereof shall nevertheless be valid and sufficient for all purposes,the same as if such Person had
remained in office until delivery. Any Bond may be signed by such Persons as at the actual time of the
execution of such Bond are the proper officers to sign such Bond although at the date of such Bond such
Persons may not have been such officers.
(b) The Bonds shall have endorsed thereon a Certificate of Authentication substantially in the
form set forth in Exhibit C hereof, which shall be manually executed by the Trustee. No Bond shall be
entitled to any security or benefit under this Indenture or shall be valid or obligatory for any purposes
until such Certificate of Authentication has been duly executed by the Trustee. The executed Certificate
of Authentication upon any Bond shall be conclusive evidence that such Bond has been duly
authenticated and delivered under this Indenture. The Certificate of Authentication on any Bond shall be
deemed to have been duly executed if signed by any authorized signatory of the Trustee.
Section 206. Registration,Transfer and Exchange of Bonds.
(a) The Trustee shall keep books for the registration and for the transfer of Bonds as
provided in this Indenture.
(b) The Bonds may be transferred only upon the books kept for the registration and transfer
of Bonds upon surrender thereof to the Trustee duly endorsed for transfer or accompanied by an
assignment duly executed by the Owner or such Owner's attorney or legal representative in such form as
shall be satisfactory to the Trustee. In connection with any such transfer of the Bonds, the City and the
Trustee shall receive an executed representation letter signed by the proposed assignee in substantially the
form of Exhibit D hereto. Upon any such transfer, the City shall execute and the Trustee shall '
authenticate and deliver in exchange for such Bond a new fully registered Bond or Bonds, registered in
the name of the transferee, of any denomination or denominations authorized by this Indenture, in an
aggregate principal amount equal to the outstanding principal amount of such Bond, of the same maturity
and bearing interest at the same rate.
(c) The Bonds may only be transferred (1)to the City or the Company, (2)pursuant to a
registration statement which has been declared effective under the 1933 Act, or (3)to institutional
"accredited investors" as defined in Rule 501(a) under the 1933 Act, or Qualified Institutional Buyers.
Each purchaser of Bond a shall (1) represent that it is(i)an institutional accredited investor or a fiduciary
or agent (other than a United States bank or savings and loan association) that is acting on behalf of an
institutional accredited investor and that the Bond is being acquired for investment and not with a view to
distribution, or (ii)a Qualified Institutional Buyer acting on behalf of itself or another Qualified
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Institutional Buyer (and, if it is a Qualified Institutional Buyer, acknowledges that it is aware that the
seller may rely on an exemption from the provisions of Section 5 of the 1933 Act pursuant to Rule 144A),
and (2)agrees that any resale of the Bond will be made only in a transaction exempt from registration
under the 1933 Act and only to an institutional accredited investor or to a Qualified Institutional Buyer in
a transaction made pursuant to Rule 144A under the 1933 Act, to the City or the Company or pursuant to
an effective registration statement filed under the 1933 Act or pursuant to another available exemption
from the registration under the 1933 Act. Each shall bear a legend containing substantially the
information set forth in this paragraph.
The Trustee and the City shall have the right, prior to any offer, sale or transfer of the Bonds other than to
the City or the Company, to require the delivery of an opinion of counsel, certifications or other
information satisfactory to each of them with respect to the lawfulness of such offer, sale or transfer.
(d) In all cases in which Bonds are exchanged or transferred hereunder the provisions of any
legend restrictions on the Bonds shall be complied with and the City shall execute and the Trustee shall
authenticate and deliver at the earliest practicable time Bonds in accordance with the provisions of this
Indenture. All Bonds surrendered in any such exchange or transfer shall forthwith be cancelled by the
Trustee. The City or the Trustee may make a reasonable charge for every such exchange or transfer of
Bonds sufficient to reimburse it for any tax, fee or other governmental charge required to be paid with
respect to such exchange or transfer, and such charge shall be paid before any such new Bond shall be
delivered. Neither the City nor the Trustee shall be required to make any such exchange or transfer of
Bonds during the 15 days immediately preceding a Payment Date on the Bonds or, in the case of any
proposed redemption of Bonds, during the 15 days immediately preceding the selection of Bonds for such
redemption or after such Bonds or any portion thereof has been selected for redemption.
(e) If any Owner fails to provide a certified taxpayer identification number to the Trustee,the
Trustee may make a charge against such Owner sufficient to pay any governmental charge required to be
paid as a result of such failure, which amount may be deducted by the Trustee from amounts otherwise
payable to such Owner under such Owner's Bond.
Section 207. Persons Deemed Owners of Bonds. As to any Bond,the Person in whose name
the same is registered as shown on the bond registration books required by Section 206 hereof shall be
deemed and regarded as the absolute owner thereof for all purposes. Payment of or on account of the
principal of and interest on any such Bond shall be made only to or upon the order of the Owner thereof
or a legal representative thereof. All such payments shall be valid and effectual to satisfy and discharge
the liability upon such Bond, including the interest thereon,to the extent of the sum or sums so paid.
Section 208. Authorization of the Bonds.
(a) The Bonds are authorized for the purpose of providing funds to pay a portion of the costs
of the Project. The Bonds shall be dated as provided in Section 203(b) hereof, shall become due on
December 1, 2027 (subject to prior redemption as provided in Article III) and shall bear interest as
specified in Section 2080 hereof,payable on the dates specified in Section 2080 hereof.
(b) The Trustee is hereby designated as the Paying Agent. The Owners of a majority of
Bonds then outstanding may designate a different Paying Agent upon written notice to the City and the
Trustee.
(c) The Bonds shall be executed without material variance from the form and in the manner
set forth in Exhibit C hereto and delivered to the Trustee for authentication. Prior to or simultaneously
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with the authentication and delivery of the Bonds by the Trustee, there shall be filed with the Trustee the
following:
(1) An original or certified copy of the ordinance passed by the Board of Aldermen
authorizing the issuance of the Bonds and the execution of this Indenture and the Lease;
(2) Original executed counterparts of this Indenture, the Lease, the Performance
Agreement and the Bond Purchase Agreement;
(3) A representation letter from the Purchaser in substantially the form attached as
Exhibit D hereto;
(4) A request and authorization to the Trustee on behalf of the City, executed by the
Authorized City Representative, to authenticate the Bonds and deliver the same to the Purchaser
upon payment, for the account of the City, of the purchase price thereof specified in the Bond
Purchase Agreement. The Trustee shall be entitled to conclusively rely upon such request and
authorization as to names of the purchaser and the amount of such purchase price;
(5) An opinion of counsel nationally recognized on the subject of municipal bonds to
the effect that the Bonds constitute valid and legally binding limited and special revenue
obligations of the City;
(6) An opinion of counsel nationally recognized on the subject of municipal bonds
stating that the Bonds are exempt from registration under the Securities Act of 1933,as amended,
and the Indenture is exempt from qualification under the Trust Indenture Act of 1939, as
amended;and
(7) Such other certificates, statements, receipts, opinions and documents as the City
shall reasonably require for the delivery of the Bonds.
(d) When the documents specified in subsection (c) of this Section have been filed with the
Trustee,and when the Bonds have been executed and authenticated as required by this Indenture,either:
(1) The Purchaser shall pay the Closing Price to the Trustee, and the Trustee shall
endorse the Bonds in an amount equal to the Closing Price and then either hold the Bonds in trust
or if so directed in writing deliver the Bonds to or upon the order of the Purchaser;or
(2) The Company shall submit a requisition certificate in accordance with
Section 4.4 of the Lease, in an amount equal to the Closing Price, and the Trustee shall
authenticate and endorse the Bonds in an amount equal to the Closing Price and then either hold
the Bonds in trust or if so directed in writing deliver the Bonds to the Company (or another
purchaser designated by the Company).
In either case, the Purchaser shall be deemed to have paid over to the Trustee, and the Trustee shall be
deemed to have deposited into the Project Fund,an amount equal or up to the Closing Price.
(e) Following the initial issuance and delivery of the Bonds, the Company may submit
additional requisition certificates in accordance with Section 4.4 of the Lease, and the Trustee shall
endorse the Bonds in an amount equal to the amount set forth in each requisition certificate. The date of
endorsement of each Principal Amount Advanced as set forth on Schedule I to the Bonds shall be the
date of the City's approval of each requisition certificate. The Trustee shall keep a record of the total
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requisitions submitted, and shall notify the City if the requisitions submitted exceed the amounts
permitted in the form of the requisition certificate.
(f) The Bonds shall bear interest at the rate of 2% per annum on the Cumulative Outstanding
Principal Amount of the Bonds. Such interest shall be payable in arrears on each December 1,
commencing on December 1, 2017, and continuing thereafter until the Cumulative Outstanding Principal
Amount is paid in full; provided that the aggregate maximum principal amount shall not exceed
$9,000,000 (except as such amount may be increased in connection with the issuance of Additional
Bonds)and further provided that the Bonds shall be paid in full no later than December 1, 2027. Interest
shall be calculated on the basis of a year of 360 days consisting of twelve months of 30 days each.
(g) The Trustee shall keep and maintain a record of the amount deposited into the Project
Fund pursuant to the terms of this Indenture as "Principal Amount Advanced" and shall enter the
aggregate principal amount of the Bonds then Outstanding on its records as the"Cumulative Outstanding
Principal Amount." On each date upon which a portion of the Cumulative Outstanding Principal Amount
is paid to the Owners, pursuant to the redemption provisions of this Indenture, the Trustee shall enter on
its records the principal amount paid on the Bonds as "Principal Amount Redeemed," and shall enter the
then Outstanding principal amount of the Bonds as "Cumulative Outstanding Principal Amount" The
records maintained by the Trustee as to amounts deposited into the Project Fund or principal amounts
paid on the Bonds shall be the official records of the Cumulative Outstanding Principal Amount for all
purposes and shall be in substantially the form of the Table of Cumulative Outstanding Principal Amount
as set out in the form of Bonds in Exhibit C hereto. If any moneys are deposited by the Trustee into the
Project Fund,then the Trustee shall provide a statement of receipts and disbursements with respect thereto
to the City and the Company on a monthly basis. After the Project has been completed and the certificate
of payment of all costs is filed as provided in Section 504 hereof, the Trustee, to the extent it has not
already done so pursuant to this Section or Section 1012 hereof, shall file a final statement of receipts and
disbursements with respect thereto with the City and the Company.
Section 209. Authorization of Additional Bonds.
(a) Additional Bonds may be issued under and equally and ratably secured by this Indenture
on a parity(except as otherwise provided in this Section)with the Bonds and any other Additional Bonds
at any time and from time to time, upon compliance with the conditions set forth in this Section for any of
the following purposes: (1) to provide funds to pay the costs of completing the Project, the total of such
costs to be evidenced by a certificate signed by an Authorized Company Representative, (2) to provide
funds to pay all or any part of the costs of repairing, replacing or restoring the Project in the event of
damage, destruction or condemnation thereto or thereof, (3)to provide funds to pay all or any part of the
costs of acquisition, construction or installation of such additions to the Project (buildings or equipment)
as the Company may deem necessary or desirable and as will not impair the nature of the Project as a
"project" within the meaning and purposes of the Act, and (4) to provide funds for refunding all or any
part of the Bonds of any series then Outstanding, including the payment of any premium thereon and
interest to accrue to the designated redemption date and any expenses in connection with such refunding.
(b) Before any Additional Bonds are issued under the provisions of this Section, the City
shall pass an ordinance(a)authorizing the issuance of such Additional Bonds, fixing the principal amount
thereof and describing the purpose or purposes for which such Additional Bonds are being issued, (b)
authorizing the City to enter into a Supplemental Indenture for the purpose of issuing such Additional
Bonds and establishing the terms and provisions of such series of Bonds and the form of the bonds of
such series, (c) authorizing the City to enter into a Supplemental Lease Agreement with the Company to
provide for lease payments at least sufficient to pay the principal of, redemption premium, if any, and
interest on the Bonds and Additional Bonds then to be Outstanding(including the Additional Bonds to be
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issued) as the same become due, and to extend the term of the Lease if the maturity of any of the
Additional Bonds would otherwise occur after the expiration of the term of the Lease, (d)authorizing the
City to enter into a supplemental performance agreement with the Company to provide for payments in
lieu of taxes with respect to the property being financed by the Additional Bonds, and (e) providing for
such other matters as are appropriate because of the issuance of the Additional Bonds, which matters, in
the judgment of the City,are not prejudicial to the City or the owners of the Bonds previously issued.
(c) Such Additional Bonds shall have the same general title as the Bonds, except for an
identifying series letter or date, shall be dated, shall mature on such dates, shall be in such denominations,
shall be numbered, shall bear interest at such rates not exceeding the maximum rate then permitted by law
payable at such times, and shall be redeemable at such times and prices (subject to the provisions of
Article III of this Indenture), all as provided by the Supplemental Indenture authorizing the issuance of
such Additional Bonds. Except as to any difference in the date,the maturities,denominations,the rates of
interest or the provisions for redemption, such Additional Bonds shall be on a parity with and shall be
entitled to the same benefit and security of this Indenture as the Bonds and any other Additional Bonds.
(d) Such Additional Bonds shall be executed in the manner set forth in Section 205 hereof
and shall be deposited with the Trustee for authentication, but prior to or simultaneously with the
authentication and delivery of such Additional Bonds by the Trustee,and as a condition precedent thereto,
there shall be filed with the Trustee the following:
(1) An original or certified copy of the ordinance passed by the Board of Aldermen
authorizing the issuance of such Additional Bonds and the execution of the Supplemental
Indenture, Supplemental Lease, a supplement to the Performance Agreement and supplements to
any other documents as may be necessary;
(2) Original executed counterparts of the Supplemental Indenture, the Supplemental
Lease Agreement and a supplement to the Performance Agreement;
(3) A representation letter from the Purchaser in substantially the form attached as
Exhibit D hereto;
(4) A request and authorization to the Trustee on behalf of the City, executed by the
Authorized City Representative, to authenticate the Additional Bonds and deliver the same to the
Purchaser upon payment, for the account of the City,of the purchase price thereof specified in the
bond purchase agreement executed in connection with the purchase of the Additional Bonds. The
Trustee shall be entitled to conclusively rely upon such request and authorization as to names of
the purchaser and the amount of such purchase price;
(5) An opinion of counsel nationally recognized on the subject of municipal bonds to
the effect that the Additional Bonds constitute valid and legally binding limited and special
revenue obligations of the City;
(6) An opinion of counsel nationally recognized on the subject of municipal bonds
stating that the Additional Bonds are exempt from registration under the Securities Act of 1933,
as amended,and the Indenture, as amended and supplemented, is exempt from qualification under
the Trust Indenture Act of 1939,as amended; and
(7) Such other certificates, statements, receipts, opinions and documents as the City
shall reasonably require for the delivery of the Additional Bonds.
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(e) When the documents specified above have been filed with the Trustee, and when such
Additional Bonds have been executed and authenticated as required by this Indenture, the Trustee shall
deliver such Additional Bonds to or upon the order of the Purchaser thereof, but only upon payment to the
Trustee of the purchase price of such Additional Bonds. The proceeds of the sale of such Additional Bonds
(except Additional Bonds issued to refund Outstanding Bonds), including accrued interest and premium
thereon, if any, shall be immediately paid over to the Trustee and shall be deposited and applied by the
Trustee as provided in Article IV hereof and in the Supplemental Indenture authorizing the issuance of
such Additional Bonds. The proceeds of all Additional Bonds issued to refund Outstanding Bonds
(excluding accrued interest and premium, if any, which shall be deposited in a separate account in the Debt
Service Fund) shall be deposited by the Trustee, after payment or making provision for payment of all
expenses incident to such financing,to the credit of a special trust fund,appropriately designated,to be held
in trust for the sole and exclusive purpose of paying the principal of, premium, if any, and interest on the
Bonds to be refunded,as provided in Section 1101 hereof and in the Supplemental Indenture authorizing the
issuance of such refunding Bonds.
Section 210. Mutilated, Lost, Stolen or Destroyed Bonds. If any Bond becomes mutilated,
or is lost, stolen or destroyed, the City shall execute and the Trustee shall authenticate and deliver a new
Bond of like series, date and tenor as the Bond mutilated lost, stolen or destroyed; provided that, in the
case of any mutilated Bond, such mutilated Bond shall first be surrendered to the Trustee, and in the case
of any lost, stolen or destroyed Bond,there shall be first furnished to the City and the Trustee evidence of
such loss, theft or destruction satisfactory to City and the Trustee, together with indemnity satisfactory to
the City and the Trustee to save each of the City and the Trustee harmless. If any such Bond has matured,
instead of delivering a substitute Bond, the Trustee may pay the same without surrender thereof. Upon
the issuance of any substitute Bond, the City and the Trustee may require the payment of an amount
sufficient to reimburse the City and the Trustee for any tax or other governmental charge that may be
imposed in relation thereto and any other reasonable fees and expenses incurred in connection therewith.
Section 211. Cancellation and Destruction of Bonds Upon Payment.
(a) All Bonds which have been paid or redeemed or which the Trustee has purchased or
which have otherwise been surrendered to the Trustee under this Indenture, either at or before maturity
shall be cancelled by the Trustee immediately upon the payment, redemption or purchase of such Bonds
and the surrender thereof to the Trustee.
(b) All Bonds cancelled under any of the provisions of this Indenture shall be destroyed by
the Trustee in accordance with its customary practices and applicable retention laws.
ARTICLE III
REDEMPTION OF BONDS
Section 301. Redemption of Bonds.
(a) The Bonds are subject to redemption and payment at any time before the stated maturity
thereof, at the option of the City, upon written instructions from the Company, (1) in whole, if the
Company exercises its option to purchase the Project and deposits an amount sufficient to effect such
purchase pursuant to the Lease on the applicable redemption date, or(2) in part, if the Company prepays
additional Basic Rent pursuant to the Lease. If only a portion of the Bonds are to be redeemed, (1) Bonds
aggregating 10%of the maximum aggregate principal amount of Bonds authorized hereunder shall not be
subject to redemption and payment before the stated maturity thereof, and (2) the Trustee shall keep a
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record of the amount of Bonds to remain outstanding following such redemption. Any redemption of
Bonds pursuant to this paragraph shall be at a redemption price equal to the par value thereof being
redeemed,plus accrued interest thereon,without premium or penalty,to the redemption date.
(b) The Bonds are subject to mandatory redemption, in whole or in part, to the extent of
amounts deposited in the Bond Fund pursuant to Sections 9.1(a) or 9.2(c) of the Lease, in the event of
substantial damage to or destruction or condemnation of substantially all of the Project. Bonds to be
redeemed pursuant to this paragraph shall be called for redemption by the Trustee on the earliest
practicable date for which timely notice of redemption may be given as provided hereunder. Any
redemption of Bonds pursuant to this paragraph shall be at a redemption price equal to the par value
thereof being redeemed, plus accrued interest thereon, without premium or penalty, to the redemption
date. Before giving notice of redemption to the Owners pursuant to this paragraph (b), money in an
amount equal to the redemption price shall have been deposited in the Bond Fund.
(c) At its option, the Company may deliver to the Trustee for cancellation any Bonds owned
by the Company and not previously paid, and the Company shall receive a credit against the amounts
payable by the Company for the redemption of such Bonds in an amount equal to the principal amount of
the Bonds so tendered for cancellation, plus accrued interest.
Section 302. Effect of Call for Redemption. Before or on the date fixed for redemption,
funds, Government Securities, or a combination thereof, shall be placed with the Trustee which are
sufficient to pay the Bonds called for redemption and accrued interest thereon, if any, to the redemption
date. Upon the happening of the above conditions and appropriate written notice having been given, the
Bonds or the portions of the principal amount of Bonds thus called for redemption shall cease to bear
interest on the specified redemption date, and shall no longer be entitled to the protection, benefit or
security of this Indenture and shall not be deemed to be Outstanding under the provisions of this
Indenture. If the Bonds are fully redeemed before maturity and an amount of money equal to the
Trustee's and the Paying Agent's agreed to fees and expenses hereunder accrued and to accrue in
connection with such redemption is paid or provided for, the City shall, at the Company's direction,
deliver to the Company the items described in Section 11.2 of the Lease.
Section 303. Notice of Redemption. If the Bonds are to be called for redemption as provided
in Section 301(a) hereof, the Company shall deliver written notice to the City and the Trustee that it has
elected to redeem all or a portion of the Bonds at least 40 days (10 days if the Company is the Owner)
prior to the scheduled redemption date. The Trustee shall then deliver written notice to the Owners at
least 30 days(five days if the Company is the Owner)prior to the scheduled redemption date by facsimile
and by first-class mail stating the date upon which the Bonds will be redeemed and paid, unless such
notice period is waived by the Owners in writing.
ARTICLE IV
FORM OF BONDS
Section 401. Form Generally. The Bonds and the Trustee's Certificate of Authentication to
be endorsed thereon shall be issued in substantially the forms set forth in Exhibit C. The Bonds may
have endorsed thereon such legends or text as may be necessary or appropriate to conform to any
applicable rules and regulations of any governmental authority or any custom, usage or requirements of
law with respect thereto.
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ARTICLE V
CUSTODY AND APPLICATION OF BOND PROCEEDS
Section 501. Creation of Funds. There are hereby created and ordered to be established in
the custody of the Trustee the following separate special trust funds in the name of the City:
(a) "City of Riverside, Missouri, Project Fund -- Premium Waters, Inc." (herein
called the"Project Fund"); and
(b) "City of Riverside, Missouri, Costs of Issuance Fund -- Premium Waters, Inc."
(herein called the"Costs of Issuance Fund").
Section 502. Deposits into the Project Fund. The proceeds of the sale of the Bonds(whether
actually paid or deemed paid under Section 208(d)and(e)hereof), including, at the direction of the City,
Additional Payments provided for in the Bond Purchase Agreement, when received, excluding such
amounts required to be paid into the Bond Fund pursuant to Section 602 hereof, shall be deposited by the
Trustee into the Project Fund. Any money received by the Trustee from any other source for the purpose
of purchasing, constructing and installing the Project shall pursuant to any directions from the Person
depositing such moneys also be deposited into the Project Fund.
Section 503. Disbursements from the Project Fund.
(a) The moneys in the Project Fund shall be disbursed by the Trustee for the payment of, or
reimbursement to the Company(or any other party that has made payment on behalf of the Company) for
payment of, Project Costs upon receipt of requisition certificates signed by the Company in accordance
with the provisions of Article IV of the Lease. The Trustee hereby covenants and agrees to disburse such
moneys in accordance with such provisions.
(b) If, pursuant to Section 208(d), the Trustee is deemed to have deposited into the Project
Fund the amount specified in the requisition certificates submitted by the Company, the Trustee shall
upon endorsement of the Bonds in an equal amount be deemed to have disbursed such funds from the
Project Fund to the Company (or such other purchaser designated by the Company) in satisfaction of the
requisition certificate.
(c) In paying any requisition under this Section,the Trustee may rely as to the completeness
and accuracy of all statements in such requisition certificate if such requisition certificate is signed by the
Authorized Company Representative. If the City so requests in writing, a copy of each requisition
certificate submitted to the Trustee for payment under this Section shall be promptly provided by the
Trustee to the City. The City hereby authorizes and directs the Trustee to make disbursements in the
manner and as provided for by the aforesaid provisions of the Lease.
Section 504. Completion of the Project. The completion of the Project and all costs and
expenses incident thereto shall be evidenced by the filing with the Trustee of the certificate required by
the provisions of Section 4.5 of the Lease. As soon as practicable any balance remaining in the Project
Fund shall without further authorization be transferred to and deposited in the Bond Fund and applied as
provided in Section 4.6 of the Lease.
Section 505. Deposits into and Disbursements from the Costs of Issuance Fund. Money
deposited by the Company in the Costs of Issuance Fund shall be used solely to pay costs of issuing the
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Bonds or refunded to the Company as hereinafter provided. The Trustee shall without further
authorization disburse from the Costs of Issuance Fund, to the extent available, money sufficient to pay
the amounts shown in a closing memorandum provided to the Trustee on or before the date of delivery of
the Bonds, which shall have attached thereto the statements, invoices and related items described in said
closing memorandum. The Trustee may rely conclusively on the amounts due as shown in the closing
memorandum and will not be required to make any independent inspection or investigation in connection
therewith. Any of such money not used to pay costs of issuance by August 1, 2017, shall be refunded to
the Company.
Section 506. Disposition Upon Acceleration. If the principal of the Bonds has become due
and payable pursuant to Section 902 hereof, upon the date of payment by the Trustee of any moneys due
as hereinafter provided in Article IX, any balance remaining in the Project Fund shall without further
authorization be deposited in the Bond Fund by the Trustee, with advice to the City and to the Company
of such action.
ARTICLE VI
REVENUES AND FUNDS
Section 601. Creation of the Bond Fund. There is hereby created and ordered established in
the custody of the Trustee a special trust fund in the name of the City to be designated the "City of
Riverside, Missouri, Bond Fund--Premium Waters, Inc., Series 2017"(herein called the"Bond Fund").
Section 602. Deposits Into the Bond Fund. The Trustee shall deposit into the Bond Fund, as
and when received, (a)all accrued interest on the Bonds, if any, paid by the Purchaser, (b)all Basic Rent
payable by the Company to the City specified in Section 5.1 of the Lease; (c) any Additional Rent
payable by the Company specified in Section 5.2 of the Lease; (d)any amount in the Project Fund to be
transferred to the Bond Fund pursuant to Section 504 hereof upon completion of the Project or pursuant
to Section 505 hereof upon acceleration of the Bonds; (e)the balance of any Net Proceeds (as defined in
the Lease) of condemnation awards or insurance received by the Trustee pursuant to Article IX of the
Lease; (f)the amounts to be deposited in the Bond Fund pursuant to Sections 9.1(a) and 9.2(c) of the
Lease; (g)all interest and other income derived from investments of Bond Fund moneys as provided in
Section 702 hereof, and (h)all other moneys received by the Trustee under and pursuant to any of the
provisions of the Lease when accompanied by directions from the Person depositing such moneys that
such moneys are to be paid into the Bond Fund.
The Trustee shall notify the Company in writing, at least 15 days prior to each date on which a
payment is due under Section 5.1 of the Lease, of the amount that is payable by the Company pursuant to
such Section.
Section 603. Application of Moneys in the Bond Fund.
(a) Except as provided in Section 605 and Section 908 hereof or in Section 4.6(a) of the
Lease, moneys in the Bond Fund shall be expended solely for the payment of the principal of and the
interest on the Bonds as the same mature and become due or upon the redemption thereof prior to
maturity; provided, however, that any amounts received by the Trustee as Additional Rent under
Section 5.2 of the Lease and deposited to the Bond Fund as provided in Section 602 above, shall be
expended by the Trustee for such items of Additional Rent as they are received or due without further
authorization from the City.
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(b) The City hereby authorizes and directs the Trustee to withdraw sufficient funds from the
Bond Fund to pay the principal of and the interest on the Bonds as the same become due and payable and
to make said funds so withdrawn available to the Paying Agent for the purpose of paying said principal
and interest.
(c) Whenever the amount in the Bond Fund from any source whatsoever is sufficient to
redeem all of the Bonds Outstanding and to pay interest to accrue thereon prior to such redemption, the
City covenants and agrees, upon request of the Company, to take and cause to be taken the necessary
steps to redeem all such Bonds on the next succeeding redemption date for which the required redemption
notice may be given or on such later redemption date as may be specified by the Company. The Trustee
may use any moneys in the Bond Fund to redeem a part of the Bonds Outstanding in accordance with and
to the extent permitted by Article III hereof so long as the Company is not in default with respect to any
payments under the Lease and to the extent said moneys are in excess of the amount required for payment
of Bonds theretofore matured or called for redemption and past due interest, if any, in all cases when such
Bonds have not been presented for payment.
(d) After payment in full of the principal of and interest, if any, on the Bonds (or provision
has been made for the payment thereof as provided in this Indenture), and the fees, charges and expenses
of the Trustee, the City and any Paying Agent and any other amounts required to be paid under this
Indenture, the Lease and the Performance Agreement, all amounts remaining in the Bond Fund shall be
paid to the Company upon the expiration or sooner termination of the Lease.
Section 604. Payments Due on Days Other Than Business Days. In any case where the
date of maturity of principal of or interest, if any, on the Bonds or the date fixed for redemption of any
Bonds is not a Business Day,then payment of principal or interest, if any,need not be made on such date
but may be made on the next succeeding Business Day with the same force and effect as if made on the
date of maturity or the date fixed for redemption, and no interest, if any, shall continue to accrue for the
period after such date.
Section 605. Nonpresentment of Bonds. If any Bond is not presented for payment when the
principal thereof becomes due, either at maturity or otherwise, or at the date fixed for redemption thereof,
if funds sufficient to pay such Bond shall have been made available to the Trustee, all liability of the City
to the Owner thereof for the payment of such Bond shall forthwith cease, determine and be completely
discharged, and thereupon it shall be the duty of the Trustee to hold such fund or funds, without liability
for interest thereon, for the benefit of the Owner of such Bond who shall thereafter be restricted
exclusively to such fund or funds for any claim of whatever nature on his part under this Indenture or on,
or with respect to, said Bond. If any Bond is not presented for payment within one year following the
date when such Bond becomes due, whether by maturity or otherwise, the Trustee shall without liability
for interest thereon repay to the Company the funds theretofore held by it for payment of such Bond, and
such Bond shall, subject to the defense of any applicable statute of limitation, thereafter be an unsecured
obligation of the Company, and the Owner thereof shall be entitled to look only to the Company for
payment, and then only to the extent of the amount so repaid,and the Company shall not be liable for any
interest thereon and shall not be regarded as a trustee of such money.
ARTICLE VII
SECURITY FOR DEPOSITS AND INVESTMENT OF FUNDS
Section 701. Moneys to be Held in Trust. All moneys deposited with or paid to the Trustee
for account of the Bond Fund or the Project Fund under any provision of this Indenture, and all moneys
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deposited with or paid to any Paying Agent under any provision of this Indenture, shall be held by the
Trustee or Paying Agent in trust and shall be applied only in accordance with the provisions of this
Indenture and the Lease, and, until used or applied as herein provided, shall constitute part of the Trust
Estate and he subject to the lien hereof. Neither the Trustee nor any Paying Agent shall be under any
liability for interest on any moneys received hereunder except such as may be agreed upon in writing.
Section 702. Investment of Moneys in Project Fund and Bond Fund. Moneys held in the
Project Fund and the Bond Fund shall, pursuant to written direction of the Company, signed by the
Authorized Company Representative, be separately invested and reinvested by the Trustee in Investment
Securities which mature or are subject to redemption by the Owner prior to the date such funds will be
needed. The Trustee is specifically authorized to implement its automated cash investment system to
assure that cash on hand is invested and to charge its normal cash management fees and cash sweep
account fees, which may be deducted from income earned on investments; provided that any such fees
shall not exceed the interest income on the investment. Any such Investment Securities shall be held by
or under the control of the Trustee and shall be deemed at all times a part of the fund in which such
moneys are originally held,and the interest accruing thereon and any profit realized from such Investment
Securities shall be credited to such fund, and any loss resulting from such Investment Securities shall be
charged to such fund. After the Trustee has notice pursuant to Section 1001(h)hereof of the existence of
an Event of Default, the Trustee shall direct the investment of moneys in the Bond Fund and the Project
Fund. The Trustee shall sell, at the direction of the Company, and reduce to cash a sufficient amount of
such Investment Securities whenever the cash balance in any Fund is insufficient for the purposes of such
Fund. In determining the balance in any Fund, investments in such Fund shall be valued at the lower of
their original cost or their fair market value as of the most recent Payment Date. The Trustee may make
any and all investments permitted by the provisions of this Section through its own bond department or
any affiliate or short-term investment department. Although the Company recognizes that it may obtain a
broker confirmation or written statement containing comparable information at no additional cost, the
Company agrees that confirmations of permitted investments are not required to be issued by the Trustee
for each month in which a monthly statement is rendered and that no statement need be rendered for any
fund or account if not activity occurred in such fund or account during such month.
Section 703. Record Keeping. The Trustee shall maintain records designed to show
compliance with the provisions of this Article and with the provisions of Article VI hereof for at least six
years after the payment of all of the Outstanding Bonds.
ARTICLE VIII
GENERAL COVENANTS AND PROVISIONS
Section 801. Payment of Principal and Interest. The City covenants and agrees that it will,
but solely from the rents, revenues and receipts derived from the Project and the Lease as described
herein, deposit or cause to be deposited in the Bond Fund sufficient sums payable under the Lease
promptly to meet and pay the principal of and the interest on the Bonds as they become due and payable
at the place, on the dates and in the manner provided herein and in the Bonds according to the true intent
and meaning thereof. Nothing herein shall be construed as requiring the City to operate the Project as a
business other than as lessor or to use any funds or revenues from any source other than funds and
revenues derived from the Project.
Section 802. Authority to Execute Indenture and Issue Bonds. The City covenants that it is
duly authorized under the Constitution and laws of the State to execute this Indenture, to issue the Bonds
and to pledge and assign the Trust Estate in the manner and to the extent herein set forth;that all action on
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its part for the execution and delivery of this Indenture and the issuance of the Bonds has been duly and
effectively taken;that the Bonds in the hands of the Owners thereof are and will be valid and enforceable
obligations of the City according to the import thereof.
Section 803. Performance of Covenants. The City covenants that it will faithfully perform at
all times any and all covenants, undertakings, stipulations and provisions contained in this Indenture, in
the Bonds and in all proceedings of its governing body pertaining thereto. The Trustee may take such
action as it deems appropriate to enforce all such covenants, undertakings, stipulations and provisions of
the City hereunder.
Section 804. Instruments of Further Assurance. The City covenants that it will do, execute,
acknowledge and deliver, or cause to be done, executed, acknowledged and delivered, such Supplemental
Indentures and such further acts, instruments, financing statements and other documents required for the
better pledging and assigning unto the Trustee the property and revenues herein described to the payment
of the principal of and interest, if any, on the Bonds. The City covenants and agrees that, except as herein
and in the Lease provided, it will not sell, convey, mortgage, encumber or otherwise dispose of any part
of the Project or the rents, revenues and receipts derived therefrom or from the Lease, or of its rights
under the Lease.
Section 805. Recordings and Filings. The City shall file or cause to be kept and filed all
financing statements, and hereby authorizes the Trustee to file or cause to be kept and filed continuation
statements with respect to such originally filed financing statements related to this Indenture and all
supplements hereto and such other documents as may be required under the Uniform Commercial Code in
order to fully preserve and protect the security of the Owners and the rights of the Trustee hereunder. The
City will cooperate in causing this Indenture and all Supplemental Indentures, the Lease and all
Supplemental Leases and all other security instruments to be recorded and filed in such manner and in
such places as may be required by law in order to fully preserve and protect the security of the Owners
and the rights of the Trustee hereunder. The Trustee shall cause to be filed continuation statements to the
financing statements under the Uniform Commercial Code of the State, with the appropriate filing office
of the State, in such manner as may be required by the Uniform Commercial Code of the State. The
Company shall be responsible for the reasonable fees and costs, including fees and costs of counsel or
other experts, incurred by the Trustee in the preparation and filing of all continuation statements
hereunder. Notwithstanding anything to the contrary contained herein, the Trustee shall not be
responsible for any initial, amendment, or other filings of any financing statements or the information
contained therein (including the exhibits thereto), the perfection of any such security interests, or the
accuracy or sufficiency of any description of collateral in such initial filings or for filing any
modifications or amendments to the initial filings or any amendments or other changes to Article 9 of the
Uniform Commercial Code of the State. The Trustee shall be fully protected in relying on information
with respect to such initial filing delivered to it by or on behalf of the City or the Company, as applicable,
and descriptions in filing any continuation statements required.
Section 806. Inspection of Project Books. The City covenants and agrees that all books and
documents in its possession relating to the Project and the rents, revenues and receipts derived from the
Project shall at all times be open to inspection by such accountants or other agencies as the Trustee may
from time to time designate.
Section 807. Enforcement of Rights Under the Lease. The City covenants and agrees that it
will enforce all of its rights and all of the obligations of the Company (at the expense of the Company)
under the Lease to the extent necessary to preserve the Project in good repair and reasonably safe
operating condition, and to protect the rights of the Trustee and the Owners hereunder with respect to the
pledge and assignment of the rents, revenues and receipts coming due under the Lease; provided that,the
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City and the Trustee, as its assignee, shall refrain from enforcing any such right or obligation (except for
the rights of the City or the Trustee to receive payments owing to either of them for their own account
under the Indenture, the Lease, the Performance Agreement or any other agreement related to the Bonds
or for their rights of indemnification or to be protected from liabilities by insurance policies required by
the Lease) if so directed in writing by the Owners of 100% of the Outstanding Bonds. The City agrees
that the Trustee, as assignee of the rentals and other amounts to be received by the City and paid by the
Company under the Lease, or in its name or in the name of the City, may enforce all rights of the City to
receive such rentals and other amounts and all obligations of the Company to pay such rentals and other
amounts under and pursuant to the Lease for and on behalf of the Owners, whether or not the City is in
default hereunder. So long as not otherwise provided in this Indenture,the Company shall be permitted to
possess,use and enjoy the Project and appurtenances so as to carry out its obligations under the Lease.
ARTICLE IX
DEFAULT AND REMEDIES
Section 901. Events of Default; Notice; Opportunity to Cure. If any of the following
events occur, it is hereby defined as and declared to be and to constitute an "Event of Default":
(a) Default in the due and punctual payment of the principal on any Bond,whether at
the stated maturity or accelerated maturity thereof, or at any date fixed for redemption thereof,
(b) Default in the due and punctual payment of the interest on any Bond, whether at
the stated maturity or accelerated maturity thereof,or at any date fixed for redemption thereof; or
(c) Default as specified in Section 12.1 of the Lease shall have occurred.
No default specified above shall constitute an Event of Default until actual notice of such default
by registered or certified mail has been given by the City, the Company, the Trustee or by the Owners of
25% in aggregate principal amount of all Bonds Outstanding to the Company or the City(as the case may
be), and the Company or the City (as the case may be) has had 30 days after receipt of such notice to
correct said default or cause said default to be corrected and has not corrected said default or caused said
default to be corrected within such period; provided, however, if any such default(other than a default in
the payment of any money) is such that it cannot be corrected within such period, it shall not constitute an
Event of Default if corrective action is instituted by the Company or the City(as the case may be)within
such period and diligently pursued until the default is corrected.
Section 902. Acceleration of Maturity in Event of Default. If an Event of Default has
occurred and is continuing after the notice and cure period described in Section 901 elapses, the Trustee
may, and upon the written request of the Owners of not less than 25% in aggregate principal amount of
Bonds then Outstanding, shall, by notice in writing delivered to the City and the Company, declare the
principal of all Bonds then Outstanding and the interest accrued thereon immediately due and payable,
and such principal and interest and all other amounts due hereunder shall thereupon become and be
immediately due and payable.
Section 903. Surrender of Possession of Trust Estate; Rights and Duties of Trustee in
Possession. If an Event of Default has occurred and is continuing, the City, upon demand of the Trustee,
shall forthwith surrender the possession of, and it shall be lawful for the Trustee,by such officer or agent
as it may appoint,to take possession of all or any part of the Trust Estate, together with the books, papers
and accounts of the City pertaining thereto, and including the rights and the position of the City under the
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Lease, and to hold, operate and manage the same, and from time to time make all needful repairs and
improvements. The Trustee may lease the Project or any part thereof, in the name and for account of the
City, and collect, receive and sequester the rents, revenues and receipts therefrom, and out of the same
and any moneys received from any receiver of any part thereof pay, and set up proper reserves for the
payment of all proper costs and expenses of so taking, holding and managing the same, including without
limitation (a)reasonable compensation to the Trustee, its agents and counsel, (b)any reasonable charges
of the Trustee hereunder, (c)any taxes and assessments and other charges prior to the lien of this
Indenture, (d)all expenses of such repairs and improvements, and (e) any amounts payable under the
Performance Agreement. The Trustee shall apply the remainder of the moneys so received in accordance
with the provisions of Section 908 hereof. Whenever all that is due upon the Bonds has been paid and all
defaults cured, the Trustee shall surrender possession of the Trust Estate to the City, its successors or
assigns, the same right of entry, however, to exist upon any subsequent Event of Default. While in
possession of such property, the Trustee shall render annually to the City and the Company a summarized
statement of receipts and expenditures in connection therewith.
Section 904. Appointment of Receivers in Event of Default. If an Event of Default has
occurred and is continuing, and upon the filing of a suit or other commencement of judicial proceedings
to enforce the rights of the Trustee and of the Owners under this Indenture, the Trustee shall be entitled,
as a matter of right, to the appointment of a receiver or receivers of the Trust Estate or any part thereof,
pending such proceedings,with such powers as the court making such appointment shall confer.
Section 905. Exercise of Remedies by the Trustee.
(a) Upon the occurrence of an Event of Default, the Trustee may pursue any available
remedy at law or in equity by suit, action, mandamus or other proceeding to enforce the payment of the
principal of and interest on the Bonds then Outstanding and all other amounts due hereunder, and to
enforce and compel the performance of the duties and obligations of the City or the Company as herein
set forth or as set forth in the Lease, respectively.
(b) If an Event of Default has occurred and is continuing after the notice and cure period
described in Section 901 elapses, and if requested to do so by (1) the City (in the case of an Event of
Default pursuant to Section 12.1(b), (c), (d) or (e) of the Lease), or(2) the Owners of 25% in aggregate
principal amount of Bonds then Outstanding and indemnified as provided in subsection (1) of
Section 1001 hereof,the Trustee shall be obligated to exercise such one or more of the rights and powers
conferred by this Article as the Trustee, being advised by counsel, shall deem most expedient and in the
interests of the City or the Owners,as the case may be.
(c) All rights of action under this Indenture or under any of the Bonds may be enforced by
the Trustee without the possession of any of the Bonds or the production thereof in any trial or other
proceedings relating thereto, and any such suit or proceeding instituted by the Trustee shall be brought in
its name as Trustee without necessity of joining as plaintiffs or defendants any Owners, and any recovery
of judgment shall, subject to the provisions of Section 908 hereof, be for the equal benefit of all the
Owners of the Outstanding Bonds.
Section 906. Limitation on Exercise of Remedies by Owners. No Owner shall have any
right to institute any suit, action or proceeding in equity or at law for the enforcement of this Indenture or
for the execution of any trust hereunder or for the appointment of a receiver or any other remedy
hereunder, unless (a)a default has occurred of which the Trustee has been notified as provided in
Section 1001(h) or of which by said subsection the Trustee is deemed to have notice, (b)such default has
become an Event of Default, (c)the Owners of 25% in aggregate principal amount of Bonds then
Outstanding have made written request to the Trustee, have offered it reasonable opportunity either to
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proceed for such reasonable period not to exceed 60 days following such notice and to exercise the
powers hereinbefore granted or to institute such action, suit or proceeding in its own name, and have
offered to the Trustee indemnity as provided in Section 1001(1), and (d)the Trustee thereafter fails or
refuses to exercise the powers herein granted or to institute such action, suit or proceeding in its own
name; such notification, request and offer of indemnity are hereby declared in every case,at the option of
the Trustee,to be conditions precedent to the execution of the powers and trusts of this Indenture, and to
any action or cause of action for the enforcement of this Indenture, or for the appointment of a receiver or
for any other remedy hereunder it being understood and intended that no one or more Owners shall have
any right in any manner whatsoever to affect, disturb or prejudice this Indenture by their action or to
enforce any right hereunder except in the manner herein provided, and that all proceedings at law or
equity shall be instituted, had and maintained in the manner herein provided and for the equal benefit of
the Owners of all Bonds then Outstanding. Nothing in this Indenture contained shall, however, affect or
impair the right of any Owner to payment of the principal of and interest on any Bond at and after the
maturity thereof or the obligation of the City to pay the principal of and interest on each of the Bonds
issued hereunder to the respective Owners thereof at the time, place, from the source and in the manner
herein and in the Bonds expressed.
Section 907. Right of Owners to Direct Proceedings.
(a) The Owners of a majority in aggregate principal amount of Bonds then Outstanding shall
have the right, at any time, by an instrument or instruments in writing executed and delivered to the
Trustee,to direct the time, method and place of conducting all proceedings to be taken in connection with
the enforcement of the terms and conditions of this Indenture, or for the appointment of a receiver or any
other proceedings hereunder; provided that such direction shall not be otherwise than in accordance with
the provisions of law and of this Indenture, including Section 1001(1)hereof.
(b) Notwithstanding any provision in this Indenture to the contrary, including paragraph (a)
of this Section, the Owners shall not have the right to control or direct any remedies hereunder upon an
Event of Default under Section 12.1(b),(c),(d)or(e)of the Lease.
Section 908. Application of Moneys in Event of Default.
(a) All moneys received by the Trustee pursuant to any right given or action taken under the
provisions of this Article shall, after payment of the cost and expenses of the proceedings resulting in the
collection of such moneys and of the fees, expenses, liabilities and advances incurred or made by the
Trustee(including any attorneys fees and expenses)or amounts to be paid pursuant to Section 903 hereof,
be deposited in the Bond Fund and all moneys so deposited in the Bond Fund shall be applied as follows:
(1) Unless the principal of all the Bonds shall have become or shall have been
declared due and payable,all such moneys shall be applied:
FIRST -- To the payment to the Persons entitled thereto of all installments of
interest, if any, then due and payable on the Bonds, in the order in which such
installments of interest became due and payable,and, if the amount available shall not be
sufficient to pay in full any particular installment, then to the payment ratably, according
to the amounts due on such installment, to the Persons entitled thereto, without any
discrimination or privilege;
SECOND -- To the payment to the Persons entitled thereof of the unpaid
principal of any of the Bonds which shall have become due and payable (other than
Bonds called for redemption for the payment of which moneys are held pursuant to the
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provisions of this Indenture), in the order of their due dates, and, if the amount available
shall not be sufficient to pay in full Bonds due on any particular date, together with such
interest, then to the payment, ratably, according to the amount of principal due on such
date,to the Persons entitled thereto without any discrimination or privilege.
(2) If the principal of all the Bonds shall have become due or shall have been
declared due and payable, all such moneys shall be applied to the payment of the principal and
interest, if any, then due and unpaid on all of the Bonds, without preference or priority of
principal over interest or of interest over principal or of any installment of interest over any other
installment of interest or of any Bond over any other Bond,ratably, according to the amounts due
respectively for principal and interest, to the Person entitled thereto, without any discrimination
or privilege.
(3) If the principal of all the Bonds shall have been declared due and payable, and if
such declaration shall thereafter have been rescinded and annulled under the provisions of
Section 910, then, subject to the provisions of subsection (2) of this Section in the event that the
principal of all the Bonds shall later become due or be declared due and payable, the moneys shall
be applied in accordance with the provisions of subsection(1)of this Section.
(b) Whenever moneys are to he applied pursuant to the provisions of this Section, such
moneys shall be applied at such times and from time to time as the Trustee shall determine, having due
regard to the amount of such moneys available and which may become available for such application in
the future. Whenever the Trustee shall apply such moneys, it shall fix the date(which shall be a Payment
Date unless it shall deem another date more suitable)upon which such application is to be made and upon
such date interest on the amounts of principal to be paid on such dates shall cease to accrue.
(c) Whenever all of the Bonds and interest thereon, if any, have been paid under the
provisions of this Section, and all fees, expenses and charges of the City and the Trustee and any other
amounts required to be paid under this Indenture and the Lease have been paid (including any amounts
payable under the Performance Agreement), any balance remaining in the Bond Fund shall be paid to the
Company as provided in Section 603 hereof.
Section 909. Remedies Cumulative. No remedy by the terms of this Indenture conferred
upon or reserved to the Trustee or to the Owners is intended to be exclusive of any other remedy,but each
and every such remedy shall be cumulative and shall be in addition to any other remedy given to the
Trustee or to the Owners hereunder or now or hereafter existing at law or in equity or by statute. No
delay or omission to exercise any right, power or remedy accruing upon any Event of Default shall impair
any such right, power or remedy or shall be construed to be a waiver of any such Event of Default or
acquiescence therein; every such right, power or remedy may be exercised from time to time and as often
as may be deemed expedient. If the Trustee has proceeded to enforce any right under this Indenture by
the appointment of a receiver, by entry, or otherwise, and such proceedings have been discontinued or
abandoned for any reason, or have been determined adversely, then and in every such case the City, the
Company,the Trustee and the Owners shall be restored to their former positions and rights hereunder, and
all rights, remedies and powers of the Trustee shall continue as if no such proceedings had been taken.
Section 910. Waivers of Events of Default. The Trustee shall waive any Event of Default
hereunder and its consequences and rescind any declaration of maturity of principal of and interest, if any,
on Bonds, and only upon the written request of the Owners of at least 50% in aggregate principal amount
of all the Bonds then Outstanding, provided, however, that (1) there shall not be waived without the
consent of the City an Event of Default hereunder arising from an Event of Default under
Section 12.1(b), (c), (d) or(e) of the Lease, and (2) there shall not be waived without the consent of the
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Owners of all the Bonds Outstanding (a)any Event of Default in the payment of the principal of any
Outstanding Bonds when due(whether at the date of maturity or redemption specified therein),or(b)any
Event of Default in the payment when due of the interest on any such Bonds, unless prior to such waiver
or rescission, all arrears of interest, or all arrears of payments of principal when due, as the case may be,
and all reasonable expenses of the Trustee and the City (including attorneys' fees and expenses), in
connection with such default, shall have been paid or provided for. In case of any such waiver or
rescission, or in case any proceeding taken by the Trustee on account of any such default shall have been
discontinued or abandoned or determined adversely, then and in every such case the City, the Company,
the Trustee and the Owners shall be restored to their former positions, rights and obligations hereunder,
respectively, but no such waiver or rescission shall extend to any subsequent or other default, or impair
any right consequent thereon.
ARTICLE X
THE TRUSTEE
Section 1001. Acceptance of the Trusts. The Trustee hereby accepts the trusts imposed upon
it by this Indenture, but only upon and subject to the following express terms and conditions, and no
implied covenants or obligations shall be read into this Indenture against the Trustee:
(a) The Trustee,prior to the occurrence of an Event of Default and after the curing or
waiver of all Events of Default that may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. If any Event of Default has
occurred and is continuing, subject to Section 1001(1) below, the Trustee shall exercise such of
the rights and powers vested in it by this Indenture,and shall use the same degree of care and skill
in their exercise, as a prudent Person would exercise or use under the circumstances in the
conduct of its own affairs.
(b) The Trustee may execute any of the trusts or powers hereunder or perform any
duties hereunder either directly or through agents, affiliates, attorneys or receivers and shall not
be responsible for any misconduct or negligence on the part of any agent, attorney or receiver
appointed or chosen by it with due care. The Trustee may conclusively rely upon and act or
refrain from acting upon any opinion or advice of counsel, who may be counsel to the City or to
the Company, concerning all matters of trust hereof and the duties,hereunder,and may in all cases
pay such reasonable compensation to all such agents, attorneys and receivers as may reasonably
be employed in connection with the trusts hereof. The Trustee shall not be responsible for any
loss or damage resulting from any action or nonaction by it taken or omitted to be taken in good
faith in reliance upon such opinion or advice of counsel addressed to the City and the Trustee.
(c) The Trustee shall not be responsible for any recital herein or in the Bonds(except
with respect to the Certificate of Authentication of the Trustee endorsed on the Bonds),or except
as provided in the Lease and particularly Section 10.8 thereof, for the recording or rerecording,
filing or refiling of this Indenture or any security agreement in connection therewith (excluding
the continuation of Uniform Commercial Code financing statements), or for insuring the Project
or collecting any insurance moneys, or for the validity of the execution by the City of this
Indenture or of any Supplemental Indentures or instruments of further assurance, or for the
sufficiency of the security of the Bonds. The Trustee shall not be responsible or liable for any
loss suffered in connection with any investment of funds made by it in accordance with
Article VII hereof.
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(d) The Trustee shall not be accountable for the use of any Bonds authenticated and
delivered hereunder. The Trustee, in its individual or any other capacity, may become the Owner
or pledgee of Bonds with the same rights that it would have if it were not Trustee. The Trustee
shall not be accountable for the use or application by the City or the Company of the proceeds of
any of the Bonds or of any money paid to or upon the order of the City or Company under any
provision of this Indenture.
(e) The Trustee may rely and shall be protected in acting or refraining from acting
upon any resolution, certificate, statement, instrument, opinion, report, notice, request, direction,
consent, order, affidavit, letter, telegram or other paper or document provided for under this
Indenture believed by it to be genuine and correct and to have been signed, presented or sent by
the proper Person or Persons. Any action taken by the Trustee pursuant to this Indenture upon the
request or authority or consent of any Person who, at the time of making such request or giving
such authority or consent is an Owner, shall be conclusive and binding upon all future Owners of
the same Bond and upon Bonds issued in exchange therefor or upon transfer or in place thereof.
(f) As to the existence or nonexistence of any fact or as to the sufficiency or validity
of any instrument, paper or proceeding, or whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to taking, suffering or
omitting any action hereunder,the Trustee shall be entitled to rely upon a certificate signed by the
Authorized City Representative or an Authorized Company Representative as sufficient evidence
of the facts therein contained, and prior to the occurrence of a default of which the Trustee has
been notified as provided in subsection (h) of this Section or of which by said subsection it is
deemed to have notice, the Trustee shall also be at liberty to accept a similar certificate to the
effect that any particular dealing, transaction or action is necessary or expedient, but may at its
discretion secure such further evidence deemed necessary or advisable, but shall in no case be
bound to secure the same.
(g) The permissive right of the Trustee to do things enumerated in this Indenture
shall not be construed as a duty, and the Trustee shall not be answerable for other than its
negligence or willful misconduct.
(h) The Trustee shall not be required to take notice or be deemed to have notice of
any default hereunder except failure by the City to cause to be made any of the payments to the
Trustee required to be made in Article VI hereof, unless the Trustee is specifically notified in
writing of such default by the City or by the Owners of at least 25% in aggregate principal
amount of all Bonds then Outstanding.
(i) At any and all reasonable times and subject to the Company's reasonable and
standard security procedures, the Trustee and its duly authorized agents, attorneys, experts,
engineers, accountants and representatives shall have the right, but shall not be required, to
inspect any and all of the Project, and all books, papers and records of the City pertaining to the
Project and the Bonds, and to take such memoranda from and in regard thereto as may be desired.
The Trustee shall treat all proprietary information of the Company as confidential.
0) The Trustee shall not be required to give any bond or surety in respect to the
execution of its trusts and powers hereunder or otherwise in respect of the Project.
(k) The Trustee shall have the right, but shall not be required, to demand, in respect
of the authentication of any Bonds, the withdrawal of any cash,the release of any property,or any
action whatsoever within the purview of this Indenture, any showings, certificates, opinions,
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appraisals or other information, or corporate action or evidence thereof, in addition to that by the
terms hereof required, as a condition of such action by the Trustee deemed desirable for the
purpose of establishing the right of the City to the authentication of any Bonds, the withdrawal of
any cash, or the taking of any other action by the Trustee.
(1) Notwithstanding anything in the Indenture or the Lease to the contrary, before
taking any action under this Indenture other than the payments from moneys on deposit in the
Project Fund or the Bond Fund, as provided herein, the Trustee may require that satisfactory
indemnity be furnished to it for the reimbursement of all costs and expenses to which it may be
put and to protect it against all liability which it may incur in or by reason of such action, except
liability which is adjudicated to have resulted from its gross negligence or willful misconduct by
reason of any action so taken.
(m) Notwithstanding any other provision of this Indenture to the contrary, any
provision relating to the conduct of, intended to provide authority to act, right to payment of fees
and expenses, protection, immunity and indemnification to the Trustee, shall be interpreted to
include any action of the Trustee, whether it is deemed to be in its capacity as Trustee, bond
registrar or Paying Agent.
(n) The Trustee agrees to accept and act upon instructions or directions pursuant to
this Indenture sent by unsecured e-mail, facsimile transmission or other similar unsecured
electronic methods; provided, however, that the City and the Company shall provide to the
Trustee an incumbency certificate listing designated persons authorized to provide such
instructions, which incumbency certificate shall be amended whenever a person is to be added or
deleted from the listing. If the City and the Company elect to give the Trustee e-mail or facsimile
instructions(or instructions by a similar electronic method)and the Trustee in its discretion elects
to act upon such instructions, the Trustee's understanding of such instructions shall be deemed
controlling. The Trustee shall not be liable for any losses, costs or expenses arising directly or
indirectly from the Trustee's reliance upon and compliance with such instructions
notwithstanding such instructions conflict or are inconsistent with a subsequent written
instruction. The City and the Company agree: (i)to assume all risks arising out of the use of such
electronic methods to submit instructions and directions to the Trustee, including without
limitation the risk of the Trustee acting on unauthorized instructions, and the risk of interception
and misuse by third parties; (ii)that they are fully informed of the protections and risks associated
with the various methods of transmitting instructions to the Trustee and that there may be more
secure methods of transmitting instructions than the method(s) selected by the City or the
Company; and (iii) that the security procedures (if any) to be followed in connection with their
transmission of instructions provide to them a commercially reasonable degree of protection in
light of their particular needs and circumstances.
Section 1002. Fees, Charges and Expenses of the Trustee. The Trustee shall be entitled to
payment of and/or reimbursement for reasonable fees for its ordinary services rendered hereunder and all
advances, agent and counsel fees and other ordinary expenses reasonably made or incurred by the Trustee
in connection with such ordinary services. If it becomes necessary for the Trustee to perform
extraordinary services, it shall be entitled to reasonable extra compensation therefor and to reimbursement
for reasonable extraordinary expenses in connection therewith; provided that if such extraordinary
services or extraordinary expenses are occasioned by the neglect or willful misconduct of the Trustee, it
shall not be entitled to compensation or reimbursement therefor. The Trustee shall be entitled to payment
and reimbursement for the reasonable fees and charges of the Trustee as Paying Agent for the Bonds.
Pursuant to the provisions of Section 5.2 of the Lease, the Company has agreed to pay to the Trustee all
reasonable fees, charges and expenses of the Trustee under this Indenture. The Trustee agrees that the
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City shall have no liability for any reasonable fees, charges and expenses of the Trustee, and the Trustee
agrees to look only to the Company for the payment of all reasonable fees, charges and expenses of the
Trustee and any Paying Agent as provided in the Lease. Upon the occurrence of an Event of Default and
during its continuance,the Trustee shall have a lien with right of payment prior to payment on account of
principal of or interest on any Bond, upon all moneys in its possession under any provisions hereof for the
foregoing reasonable advances,fees,costs and expenses incurred.
Section 1003. Notice to Owners if Default Occurs. If a default occurs of which the Trustee is
by Section 1001(h) hereof required to take notice or if notice of default is given as in said subsection (h)
provided, then the Trustee shall give written notice thereof to the last known Owners of all Bonds then
Outstanding as shown by the bond registration books required by Section 206 to be kept at the corporate
trust office of the Trustee.
Section 1004. Intervention by the Trustee. In any judicial proceeding to which the City is a
party and which, in the opinion of the Trustee and its counsel,has a substantial bearing on the interests of
Owners, the Trustee may intervene on behalf of Owners and, subject to the provisions of Section 1001(l)
hereof, shall do so if requested in writing by the Owners of at least 25%of the aggregate principal amount
of Bonds then Outstanding.
Section 1005. Successor Trustee Upon Merger, Consolidation or Sale. With the prior
written consent of the Company, any corporation or association into which the Trustee may be merged or
converted or with or into which it may be consolidated, or to which it may sell or transfer its corporate
trust business and assets as a whole or substantially as a whole,or any corporation or association resulting
from any merger, conversion, sale, consolidation or transfer to which it is a party, shall be and become
successor Trustee hereunder and shall be vested with all the trusts, powers, rights, obligations, duties,
remedies, immunities and privileges hereunder as was its predecessor, without the execution or filing of
any instrument or any further act on the part of any of the parties hereto.
Section 1006. Resignation of Trustee. The Trustee and any successor Trustee may at any time
resign from the trusts hereby created by giving 30 days' written notice to the City, the Company and the
Owners, and such resignation shall take effect at the end of such 30 days, or upon the earlier appointment
of a successor Trustee by the Owners or by the City.
Section 1007. Removal of Trustee. The Trustee may be removed at any time, with or without
cause, by an instrument or concurrent instruments in writing(a)delivered to the Trustee,the City and the
Company and signed by the Owners of a majority in aggregate principal amount of Bonds then
Outstanding, or(b) so long as no Event of Default under this Indenture or the Lease shall have occurred
and be continuing,delivered to the Trustee,the City and the Owners and signed by the Company.
Section 1008. Appointment of Successor Trustee. If the Trustee hereunder resigns or is
removed, or otherwise becomes incapable of acting hereunder, or if it is taken under the control of any
public officer or officers or of a receiver appointed by a court, a successor Trustee (a) reasonably
acceptable to the City may be appointed by the Company (so long as no Event of Default has occurred
and is continuing), or (b) reasonably acceptable to the City and the Company may be appointed by the
Owners of a majority in aggregate principal amount of Bonds then Outstanding, by an instrument or
concurrent instruments in writing; provided, nevertheless, that in case of such vacancy, the City, by an
instrument executed and signed by its Mayor and attested by its City Clerk under its seal, may appoint a
temporary Trustee to fill such vacancy until a successor Trustee shall be appointed in the manner above
provided. Any such temporary Trustee so appointed by the City shall immediately and without further
acts be superseded by the successor Trustee so appointed as provided above. Every such Trustee
appointed pursuant to the provisions of this Section shall be a trust company or bank in good standing and
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qualified to accept such trust having, or whose obligations are guaranteed by a financial institution
having, a reported capital, surplus and undivided profits of not less than $50,000,000. If no successor
Trustee has been so appointed and accepted appointment in the manner herein provided, the Trustee or
any Owner may petition any court of competent jurisdiction for the appointment of a successor Trustee,
until a successor shall have been appointed as above provided.
Section 1009. Vesting of Trusts in Successor Trustee. Every successor Trustee appointed
hereunder shall execute, acknowledge and deliver to its predecessor and also to the City and the Company
an instrument in writing accepting such appointment hereunder, and thereupon such successor shall,
without any further act, deed or conveyance, become fully vested with all the trusts, powers, rights,
obligations, duties, remedies, immunities and privileges of its predecessor and the duties and obligations
of such predecessor hereunder shall thereafter cease and terminate; but such predecessor shall,
nevertheless, on the written request of the City, execute and deliver an instrument transferring to such
successor Trustee all the trusts, powers, rights, obligations, duties, remedies, immunities and privileges of
such predecessor hereunder; every predecessor Trustee shall deliver all securities and moneys held by it
as Trustee hereunder to its successor. Should any instrument in writing from the City be required by any
predecessor or successor Trustee for more fully and certainly vesting in such successor the trusts, powers,
rights, obligations, duties, remedies, immunities and privileges hereby vested in the predecessor, any and
all such instruments in writing shall,on request, be executed,acknowledged and delivered by the City.
Section 1010. Right of Trustee to Pay Taxes and Other Charges. If any tax, assessment or
governmental or other charge upon, or insurance premium with respect to, any part of the Project is not
paid as required herein or in the Lease, the Trustee may, but shall not be obligated to, pay such tax,
assessment or governmental charge or insurance premium, without prejudice, however, to any rights of
the Trustee or the Owners hereunder arising in consequence of such failure; any amount at any time so
paid under this Section,with interest thereon from the date of payment at the rate of 10%per annum,shall
become an additional obligation secured by this Indenture, and the same shall be given a preference in
payment over any payment of principal of or interest on the Bonds, and shall be paid out of the proceeds
of rents, revenues and receipts collected from the Project, if not otherwise caused to be paid; but the
Trustee shall be under no obligation to make any such payment unless it shall have been requested to do
so by the Owners of at least 25% of the aggregate principal amount of Bonds then Outstanding and shall
have been provided adequate funds for the purpose of such payment.
Section 1011. Trust Estate Maybe Vested in Co-Trustee.
(a) It is the purpose of this Indenture that there shall be no violation of any law of any
jurisdiction (including particularly the State) denying or restricting the right of banking corporations or
associations to transact business as trustee in such jurisdiction. It is recognized that in case of litigation
under this Indenture or the Lease, and in particular in case of the enforcement of either on default or in
case the Trustee deems that by reason of any present or future law of any jurisdiction it may not exercise
any of the powers, rights or remedies herein granted to the Trustee,or take any other action which may be
desirable or necessary in connection therewith, it may be necessary or desirable that the Trustee appoint
an additional individual or institution as a co-trustee or separate trustee, and the Trustee is hereby
authorized to appoint such co-trustee or separate trustee.
(b) If the Trustee appoints an additional individual or institution as a co-trustee or separate
trustee (which appointment shall be subject to the approval of the Company), each and every remedy,
power, right, claim, demand, cause of action, immunity, title, interest and lien expressed or intended by
this Indenture to be exercised by the Trustee with respect thereto shall be exercisable by such co-trustee
or separate trustee but only to the extent necessary to enable such co-trustee or separate trustee to exercise
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such powers, rights and remedies, and every covenant and obligation necessary to the exercise thereof by
such co-trustee or separate trustee shall run to and be enforceable by either of them.
(c) Should any deed, conveyance or instrument in writing from the City be required by the
co-trustee or separate trustee so appointed by the Trustee for more fully and certainly vesting in and
confirming to such co-trustee such properties, rights, powers, trusts, duties and obligations, any and all
such deeds, conveyances and instruments in writing shall, on request, be executed, acknowledged and
delivered by the City.
(d) If any co-trustee or separate trustee shall die, become incapable of acting, resign or be
removed, all the properties, rights, powers, trusts, duties and obligations of such co-trustee or separate
trustee, so far as permitted by law, shall vest in and be exercised by the Trustee until the appointment of a
successor to such co-trustee or separate trustee.
Section 1012. Accounting. The Trustee shall render an annual accounting for the period
ending December 31 of each year to the City, the Company and to any Owner requesting the same and,
upon the request of the Company or the Owner, a monthly accounting to the Company and the Owner,
showing in reasonable detail all financial transactions relating to the Trust Estate during the accounting
period and the balance in any funds or accounts created by this Indenture as of the beginning and close of
such accounting period.
Section 1013. Performance of Duties Under the Lease. The Trustee hereby accepts and
agrees to perform all duties and obligations assigned to it under the Lease.
ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 1101. Supplemental Indentures Not Requiring Consent of Owners. The City and
the Trustee may from time to time, without the consent of or notice to any of the Owners, enter into such
Supplemental Indenture or Supplemental Indentures as shall not be inconsistent with the terms and
provisions hereof, for any one or more of the following purposes:
(a) To cure any ambiguity or formal defect or omission in this Indenture, or to make
any other change which is not to the material prejudice of the Trustee or the Owners;
(b) To grant to or confer upon the Trustee for the benefit of the Owners any
additional rights, remedies, powers or authority that may lawfully be granted to or conferred upon
the Owners or the Trustee or either of them;
(c) To more precisely identify any portion of the Project or to add additional
property thereto;
(d) To conform the Indenture to amendments to the Lease made by the City and the
Company;
(e) To subject to this Indenture additional revenues,properties or collateral; or
(f) To issue Additional Bonds as provided in Sections 209 hereof.
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Section 1102. Supplemental Indentures Requiring Consent of Owners.
(a) Exclusive of Supplemental Indentures covered by Section 1101 hereof and subject to the
terms and provisions contained in this Section, and not otherwise, the Owners of not less than a majority
in aggregate principal amount of the Bonds then Outstanding shall have the right, from time to time,
anything contained in this Indenture to the contrary notwithstanding, to consent to and approve the
execution by the City and the Trustee of such other Supplemental Indenture or Supplemental Indentures
as shall be deemed necessary and desirable by the City for the purpose of modifying,amending,adding to
or rescinding, in any particular, any of the terms or provisions contained in this Indenture or in any
Supplemental Indenture; provided, however, that without the consent of the Owners of 100% of the
principal amount of the Bonds then Outstanding, nothing in this Section contained shall permit or be
construed as permitting (1)an extension of the maturity or a shortening of the redemption date of the
principal of or the interest, if any, on any Bond issued hereunder, or (2)a reduction in the principal
amount of any Bond or the rate of interest thereon, if any, or (3) a privilege or priority of any Bond or
Bonds over any other Bond or Bonds, or(4)a reduction in the aggregate principal amount of Bonds the
Owners of which are required for consent to any such Supplemental Indenture.
(b) If at the time the City requests the Trustee to enter into any such Supplemental Indenture
for any of the purposes of this Section, the Trustee shall cause notice of the proposed execution of such
Supplemental Indenture to be mailed to each Owner as shown on the bond registration books required by
Section 206 hereof. Such notice shall briefly set forth the nature of the proposed Supplemental Indenture
and shall state that copies thereof are on file at the corporate trust office of the Trustee for inspection by
all Owners. If within 60 days or such longer period as may be prescribed by the City following the
mailing of such notice,the Owners of not less than a majority in aggregate principal amount of the Bonds
Outstanding at the time of the execution of any such Supplemental Indenture shall have consented to and
approved the execution thereof as herein provided, no Owner shall have any right to object to any of the
terms and provisions contained therein, or the operation thereof, or in any manner to question the
propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same
or from taking any action pursuant to the provisions thereof.
Section 1103. Company's Consent to Supplemental Indentures. Anything herein to the
contrary notwithstanding, a Supplemental Indenture under this Article that affects any rights of the
Company shall not become effective unless and until the Company shall have consented in writing to the
execution and delivery of such Supplemental Indenture. The Trustee shall cause notice of the proposed
execution and delivery of any Supplemental Indenture (regardless of whether it affects the Company's
rights)together with a copy of the proposed Supplemental Indenture to be mailed to the Company at least
15 days prior to the proposed date of execution and delivery of the Supplemental Indenture.
Section 1104. Opinion of Counsel. In executing, or accepting the additional trusts created by,
any Supplemental Indenture permitted by this Article or the modification thereby of the trusts created by
this Indenture, the Trustee and the City shall receive, and, shall be fully protected in relying upon, an
opinion of counsel addressed and delivered to the Trustee and the City stating that the execution of such
Supplemental Indenture is permitted by and in compliance with this Indenture and will, upon the
execution and delivery thereof, be a valid and binding obligation of the City. The Trustee may, but shall
not be obligated to, enter into any such Supplemental Indenture which affects the Trustee's rights, duties
or immunities under this Indenture or otherwise.
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ARTICLE XII
SUPPLEMENTAL LEASES
Section 1201. Supplemental Leases Not Requiring Consent of Owners. The City and the
Trustee shall, without the consent of or notice to the Owners, consent to the execution of any
Supplemental Lease or Supplemental Leases by the City and the Company as may he required (a)by the
provisions of the Lease and this Indenture,(b)for the purpose of curing any ambiguity or formal defect or
omission in the Lease, (c)so as to more precisely identify the Project or add additional property thereto,
(d) in connection with the issuance of Additional Bonds under Section 209, or(e) in connection with any
other change therein which does not materially and adversely affect the Trustee or security for the
Owners.
Section 1202. Supplemental Leases Requiring Consent of Owners. Except for Supplemental
Leases as provided for in Section 1201 hereof, neither the City nor the Trustee shall consent to the
execution of any Supplemental Lease or Supplemental Leases by the City or the Company without the
mailing of notice and the obtaining of the written approval or consent of the Owners of not less than a
majority in aggregate principal amount of the Bonds at the time Outstanding given and obtained as
provided in Section 1102 hereof. If at any time the City and the Company shall request the consent of the
Trustee to any such proposed Supplemental Lease, the Trustee shall cause notice of such proposed
Supplemental Lease to be mailed in the same manner as provided in Section 1102 hereof with respect to
Supplemental Indentures. Such notice shall briefly set forth the nature of such proposed Supplemental
Lease and shall state that copies of the same are on file in the corporate trust office of the Trustee for
inspection by all Owners. If within 60 days or such longer period as may be prescribed by the City
following the mailing of such notice, the Owners of not less than 50% in aggregate principal amount of
the Bonds Outstanding at the time of the execution of any such Supplemental Lease shall have consented
to and approved the execution thereof as herein provided, no Owner shall have any right to object to any
of the terms and provisions contained therein, or the operation thereof, or in any manner to question the
propriety of the execution thereof, or to enjoin or restrain the Trustee or the City from executing the same
or from taking any action pursuant to the provisions thereof.
Section 1203. Opinion of Counsel. In executing or consenting to any Supplemental Lease
permitted by this Article, the City and the Trustee shall receive, and shall be fully protected in relying
upon, an opinion of counsel addressed to the Trustee and the City stating that the executing of such
Supplemental Lease is authorized or permitted by the Lease and the applicable law and will upon the
execution and delivery thereof be valid and binding obligations of the parties thereof.
ARTICLE XIII
SATISFACTION AND DISCHARGE OF INDENTURE
Section 1301. Satisfaction and Discharge of this Indenture.
(a) When the principal of and interest on all the Bonds have been paid in accordance with
their terms or provision has been made for such payment, as provided in Section 1302 hereof, and
provision also made for paying all other sums payable hereunder and under the Lease and the
Performance Agreement, including the reasonable fees and expenses of the Trustee, the City and Paying
Agent to the date of retirement of the Bonds, then the right, title and interest of the Trustee in respect
hereof shall thereupon cease, determine and be void. Thereupon, the Trustee shall, upon receiving an
opinion of counsel stating that any and all conditions precedent to the satisfaction and discharge of the
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Indenture have been complied with, cancel, discharge and release this Indenture and shall upon the
written request of the City or the Company execute,acknowledge and deliver to the City such instruments
of satisfaction and discharge or release as shall be required to evidence such release and the satisfaction
and discharge of this Indenture, and shall assign and deliver to the City (subject to the City's obligations
under Section 11.2 of the Lease) any property at the time subject to this Indenture which may then be in
its possession, except amounts in the Bond Fund required to be paid to the Company under Section 603
hereof and except funds or securities in which such funds are invested held by the Trustee for the payment
of the principal of and interest on the Bonds.
(b) The City is hereby authorized to accept a certificate by the Trustee that the whole amount
of the principal and interest, if any, so due and payable upon all of the Bonds then Outstanding has been
paid or such payment provided for in accordance with Section 1302 hereof as evidence of satisfaction of
this Indenture, and upon receipt thereof shall cancel and erase the inscription of this Indenture from its
records.
Section 1302. Bonds Deemed to be Paid.
(a) Bonds shall be deemed to be paid within the meaning of this Article when payment of the
principal of and interest thereon to the due date thereof(whether such due date be by reason of maturity
or upon redemption as provided in this Indenture,or otherwise),either(1)have been made or caused to be
made in accordance with the terms thereof, or (2)have been provided for by depositing with the Trustee
or other commercial bank or trust company having full trust powers and authorized to accept trusts in the
State in trust and irrevocably set aside exclusively for such payment (i)moneys sufficient to make such
payment or (ii)Government Securities maturing as to principal and interest in such amount and at such
times as will insure the availability of sufficient moneys to make such payment,or(3)have been provided
for by surrendering the Bonds to the Trustee for cancellation. At such time as Bonds are deemed to be
paid hereunder, as aforesaid, they shall no longer be secured by or entitled to the benefits of this
Indenture,except for the purposes of such payment from such moneys or Government Securities.
(b) Notwithstanding the foregoing, in the case of Bonds which by their terms may be
redeemed before the stated maturities thereof, no deposit under clause (2) of the immediately preceding
paragraph shall be deemed a payment of such Bonds as aforesaid until, as to all such Bonds which are to
be redeemed before their respective stated maturities, proper notice of such redemption shall have been
given in accordance with Article III of this Indenture or irrevocable instructions shall have been given to
the Trustee to give such notice.
(c) Notwithstanding any provision of any other section of this Indenture which may be
contrary to the provisions of this Section, all moneys or Government Securities set aside and held in trust
pursuant to the provisions of this Section for the payment of Bonds shall be applied to and used solely for
the payment of the particular Bonds, with respect to which such moneys and Government Securities have
been so set aside in trust.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
Section 1401. Consents and Other Instruments by Owners. Any consent, request, direction,
approval, objection or other instrument required by this Indenture to be signed and executed by the
Owners may be in any number of concurrent writings of similar tenor and may be signed or executed by
such Owners in Person or by agent appointed in writing. Proof of the execution of any such instrument or
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of the writing appointing any such agent and of the ownership of Bonds (other than the assignment of
ownership of a Bond) if made in the following manner, shall be sufficient for any of the purposes of this
Indenture, and shall be conclusive in favor of the Trustee with regard to any action taken, suffered or
omitted under any such instrument, namely:
(a) The fact and date of the execution by any Person of any such instrument may be
proved by the certificate of any officer in any jurisdiction who by law has power to take
acknowledgments within such jurisdiction that the Person signing such instrument acknowledged
before him the execution thereof, or by affidavit of any witness to such execution.
(b) The fact of ownership of Bonds and the amount or amounts, numbers and other
identification of such Bonds, and the date of holding the same shall be proved by the registration
books of the City maintained by the Trustee pursuant to Section 206 hereof.
Section 1402. Limitation of Rights Under this Indenture. With the exception of rights herein
expressly conferred, nothing expressed or mentioned in or to be implied from this Indenture or the Bonds
is intended or shall be construed to give any Person other than the parties hereto, and the Owners, if any,
any right, remedy or claim under or in respect to this Indenture, this Indenture and all of the covenants,
conditions and provisions hereof being intended to be and being for the sole and exclusive benefit of the
parties hereto and the Owners,as herein provided.
Section 1403. Notices. It shall be sufficient service of any notice, request, complaint, demand
or other paper required by this Indenture to be given or filed with the City, the Trustee, the Company or
Owners if the same is duly mailed, postage prepaid, sent by overnight delivery or other delivery service or
sent by facsimile:
(a) To the City:
City of Riverside,Missouri
2950 N.W.Vivion Road
Riverside, Missouri 64150
ATTN: City Clerk
Facsimile: (816)746-8349
(b) To the Trustee:
Wells Fargo Bank,National Association,as Trustee
MAC C7300-107
1700 Lincoln Street, I&Floor
Denver, Colorado 80202
ATTN: Corporate Trust Department
Facsimile: (303)863-5645
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(c) To the Company:
Premium Waters,Inc.
2100 Summer Street NE, Suite 200
Minneapolis,Minnesota 55413
ATTN: Mike Van Rossum
Facsimile: (612)623-0363
(d) To the Owners if the same is duly mailed by first class, registered or certified mail
addressed to each of the Owners of Bonds at the time Outstanding as shown by the bond registration
books required by Section 206 hereof to be kept at the corporate trust office of the Trustee.
All notices given by certified or registered mail as aforesaid shall be deemed fully given as of the
date they are so mailed. All notices given by overnight delivery or other delivery service shall be deemed
fully given as of the date when receipted. All notices given by facsimile shall be deemed fully given as of
the date when receipted. A duplicate copy of each notice, certificate or other communication given
hereunder by either the City or the Trustee to the other shall also be given to the Company. The City,the
Company and the Trustee may from time to time designate, by notice given hereunder to the others of
such parties, such other address to which subsequent notices, certificates or other communications shall
be sent.
Section 1404. Severability. If any provision of this Indenture shall be held or deemed to be
invalid, inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions
or in all jurisdictions, or in all cases because it conflicts with any other provision or provisions hereof or
any constitution or statute or rule of public policy, or for any other reason, such circumstances shall not
have the effect of rendering the provision in question inoperative or unenforceable in any other case or
circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative or
unenforceable to any extent whatever.
Section 1405. Execution in Counterparts. This Indenture may be executed in several
counterparts, each of which shall be an original and all of which shall constitute but one and the same
instrument.
Section 1406. Governing Law. This Indenture shall be governed exclusively by and construed
in accordance with the applicable laws of the State.
Section 1407. Electronic Storage. The parties agree that the transaction described herein may
be conducted and related documents may be stored by electronic means. Copies, telecopies, facsimiles,
electronic files and other reproductions of original executed documents shall be deemed to be authentic
and valid counterparts of such original documents for all purposes, including the filing of any claim,
action or suit in the appropriate court of law.
[Remainder of Page Intentionally Left Blank.]
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IN WITNESS WHEREOF, the City has caused this Indenture to be signed in its name and
behalf by its City Manager and the seal of the City to be hereunto affixed and attested by the City Clerk,
and to evidence its acceptance of the trusts hereby created, the Trustee has caused this Indenture to be
signed in its name and behalf by its duly authorized officer,all as of the date first above written.
CITY OF RIVERSIDE,MISSOURI
By:
[SEAL] Mayor
ATTEST:
By:
City Clerk
Trust Indenture S-1
Premium Waters,Inc.
WELLS FARGO BANK, NATIONAL
ASSOCIATION,
as Trustee
[SEAL]
By
Name:
Title:
ATTEST:
By
Name:
Title:
Trust Indenture S-2
Premium Waters,Inc.
EXHIBIT A
DESCRIPTION OF PROJECT SITE
LOT 1,ARGO INNOVATION PARK, a subdivision in Riverside, Platte County,Missouri
A-1
EXIMIT B
PROJECT EQUIPMENT
All equipment and personal property items designated by the Company now or hereafter
procured, assembled, manufactured or installed on the Project Site by the Company paid for with Bond
proceeds and all additions, replacements, alterations, substitutions thereto now or hereafter effected and
specifically designated by the Company. A replacement item may be included by the Company as a part
of the Project Equipment under the conditions set forth in the Lease.
B-1
EXHIBIT C
FORM OF BONDS
[THIS BOND OR ANY POR TION HEREOF MAYBE TRANSFERRED,ASSIGNED
OR NEGOTIATED ONLY AS PROVIDED IN THE HEREIN DESCRIBED
INDENTURE.]
[THE OWNER OF THIS BOND BY ITS ACCEPTANCE HEREOF AGREES TO
OFFER, SELL OR OTHERWISE TRANSFER SUCH BOND (A) TO THE CITY OR
THE COMPANY, (B)PURSUANT TO A REGISTRATION STATEMENT WHICH
HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OF 1933
(THE "SECURITIES ACT'), (C) FOR SO LONG AS THE BONDS ARE ELIGIBLE
FOR RESALE PURSUANT TO RULE 144A UNDER THE SECURITIES ACT
("RULE 144A9, TO A PERSON IT REASONABLY BELIEVES IS A "QUALIFIED
INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A THAT PURCHASES
FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED
INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER
IS BEING MADE IN RELIANCE ON RULE 144A, (D) TO AN INSTITUTIONAL
"ACCREDITED INVESTOR" WITHIN THE MEANING OF
SUBPARAGRAPHS(a)(1), (2), (3) OR (7) OF RULE 501 UNDER THE
SECURITIES ACT THAT IS ACQUIRING THE SECURITY FOR ITS OWN
ACCOUNT FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TO, OR
OFFER OR SALE IN CONNECTION WITH,ANYDISTRIBUTIONIN VIOLATION
OF THE SECURITIES ACT, OR (E)PURSUANT TO ANOTHER AVAILABLE
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE
SECURITIES ACT, SUBJECT TO THE CITY'S AND THE TRUSTEE'S RIGHT
PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (i)PURSUANT TO
CLAUSE(D) OR (E) TO REQUIRE THE DELIVERY OF AN OPINION OF
COUNSEL, CERTIFICATIONS OR OTHER INFORMATION SATISFACTORY TO
EACH OF THEM, AND (ii)IN EACH OF THE FOREGOING CASES
(CLAUSES(A) THROUGH (E)), TO REQUIRE THAT A CERTIFICATE OF
TRANSFER IN FORM AND SUBSTANCE ACCEPTABLE TO THE CITY AND
THE TRUSTEE BE COMPLETED AND DELIVERED BY THE TRANSFEROR TO
THE TRUSTEE AND THE CITY.]
No. 1 Not to Exceed
$9,000,000
UNITED STATES OF AMERICA
STATE OF MISSOURI
CITY OF RIVERSIDE,MISSOURI
TAXABLE INDUSTRIAL REVENUE BOND
(PREMIUM WATERS,INC.PROJECT)
SERIES 2017
C-1
Interest Rate Maturity Date Dated Date
2% December 1,2027 June_,2017
OWNER:
MAXIMUM PRINCIPAL AMOUNT: NINE MILLION DOLLARS AND 00/100
THE CITY OF RIVERSIDE, MISSOURI, a fourth-class city and political subdivision
organized and existing under the laws of the State of Missouri (the "City"), for value received, promises
to pay,but solely from the source hereinafter refdrred to,to the Owner named above,or registered assigns
thereof, on the Maturity Date shown above, the principal amount shown above, or such lesser amount as
may be outstanding hereunder as reflected on Schedule I hereto held by the Trustee as provided in the
hereinafter referred to Indenture. The City agrees to pay such principal amount to the Owner in any coin
or currency of the United States of America which on the date of payment thereof is legal tender for the
payment of public and private debts, and in like manner to pay to the Owner hereof, either by check or
draft mailed to the Owner at a stated address as it appears on the bond registration books of the City kept
by the Trustee under the within mentioned Indenture or, in certain situations authorized in the Indenture,
by internal bank transfer or by wire transfer to an account in a commercial bank or savings institution
located in the continental United States. Interest on the Cumulative Outstanding Principal Amount (as
hereinafter defined) at the per annum Interest Rate stated above, payable in arrears on each December 1,
commencing on December 1, 2017, and continuing thereafter until the earlier of the date on which said
Cumulative Outstanding Principal Amount is paid in full or the Maturity Date. Interest on each
advancement of the principal amount of this Bond shall accrue from the date that such advancement is
made,computed on the basis of a year of 360 days consisting of 12 months of 30 days each.
As used herein, the term "Cumulative Outstanding Principal Amount" means all Bonds
outstanding under the terms of the hereinafter-defined Indenture, as reflected on Schedule I hereto
maintained by the Trustee.
THIS BOND is one of a duly authorized series of Bonds of the City designated "City of
Riverside, Missouri, Taxable Industrial Revenue Bonds (Premium Waters, Inc. Project), Series 2017," in
the maximum aggregate principal amount of$9,000,000 (the "Bonds"), to be issued for the purpose of
acquiring and installing new equipment and machinery (the "Project Equipment") at the existing facility
located on certain real property in Riverside,Missouri (the"Project Site"). The City will lease the Project
Equipment (collectively, along with the Project Site, the "Project") to Premium Waters, Inc., a
corporation duly incorporated and existing under the laws of the State of Minnesota and authorized to do
business in Missouri (the "Company"), under the terms of a Lease Agreement dated as of June 1, 2017
(said Lease Agreement, as amended and supplemented from time to time in accordance with the
provisions thereof, being herein called the "Lease"), between the City and the Company, all pursuant to
the authority of and in full compliance with the provisions,restrictions and limitations of the Constitution
and statutes of the State of Missouri, including particularly the Act, the charter of the City and pursuant to
proceedings duly had by the Board of Aldermen of the City.
THE BONDS are issued under and are equally and ratably secured and entitled to the protection
given by a Trust Indenture dated as of June 1, 2017 (said Trust Indenture, as amended and supplemented
from time to time in accordance with the provisions thereof,being herein called the"Indenture"), between
the City and Wells Fargo Bank, National Association, Denver, Colorado, as trustee (the "Trustee").
Capitalized terms not defined herein shall have the meanings set forth in the Indenture.
C-2
Subject to the terms and conditions set forth therein, the Indenture permits the City to issue
Additional Bonds (as defined in the Indenture) secured by the Indenture on a parity with the Bonds.
Reference is hereby made to the Indenture for a description of the provisions, among others, with respect
to the nature and extent of the security for the Bonds, the rights, duties and obligations of the City, the
Trustee and the Owners, and the terms upon which the Bonds are issued and secured.
THE BONDS are subject to redemption and payment at any time before the stated maturity
thereof, at the option of the City, upon written instructions from the Company, (1) in whole, if the
Company exercises its option to purchase the Project and deposits an amount sufficient to effect such
purchase pursuant to the Lease on the applicable redemption date, or(2) in part, if the Company prepays
additional Basic Rent pursuant to the Lease; provided, however, if only a portion of the Bonds are to be
redeemed, Bonds aggregating 10% of the maximum principal amount of Bonds authorized under the
Indenture shall not be subject to redemption and payment before the stated maturity thereof. Any
redemption of Bonds pursuant to this paragraph shall be at a redemption price equal to the par value
thereof being redeemed, plus accrued interest thereon, without premium or penalty, to the redemption
date.
THE BONDS are subject to mandatory redemption, in whole or in part,to the extent of amounts
deposited in the Bond Fund pursuant to Sections 9.1(1) or 9.2(c) of the Lease, in the event of substantial
damage to or destruction or condemnation of substantially all of the Project. Bonds to be redeemed
pursuant to this paragraph shall be called for redemption by the Trustee on the earliest practicable date for
which timely notice of redemption may be given as provided hereunder. Any redemption of Bonds
pursuant to this paragraph shall be at a redemption price equal to the par value thereof being redeemed,
plus accrued interest thereon, without premium or penalty, to the redemption date. Before giving notice
of redemption to the Owners pursuant to this paragraph, money in an amount equal to the redemption
price shall have been deposited in the Bond Fund.
If the Bonds are to be called for optional redemption, the Company shall deliver written notice to
the City and the Trustee that it has elected to redeem all or a portion of the Bonds at least 40 days
(10 days if there is one Owner) prior to the scheduled redemption date. The Trustee shall then deliver
written notice to the Owner of this Bond at least 30 days (five days if there is one Owner) before the
scheduled redemption date by facsimile and by first-class mail stating the date upon which the Bonds will
be redeemed and paid.
THE BONDS, including interest thereon, are special obligations of the City and are payable
solely out of the rents, revenues and receipts derived by the City from the Project and the Lease and not
from any other fund or source of the City, and is secured by a pledge and assignment of the Project and of
such rents, revenues and receipts, including all rentals and other amounts to be received by the City under
and pursuant to the Lease, all as provided in the Indenture. The Bonds do not constitute a general
obligation of the City or the State of Missouri, and neither the City nor said State shall be liable thereon,
and the Bonds shall not constitute an indebtedness within the meaning of any constitutional, charter or
statutory debt limitation or restriction, and are not payable in any manner by taxation. Pursuant to the
provisions of the Lease, rental payments sufficient for the prompt payment when due of the principal of
and interest on the Bonds are to be paid by the Company directly to the Trustee for the account of the City
and deposited in a special fund created by the City and designated the"City of Riverside, Missouri, Bond
Fund-- Premium Waters, Inc."
THE OWNER of this Bond shall have no right to enforce the provisions of the Indenture or to
institute action to enforce the covenants therein, or to take any action with respect to any event of default
under the Indenture, or to institute, appear in or defend any suit or other proceedings with respect thereto,
except as provided in the Indenture. In certain events, on the conditions, in the manner and with the effect
C-3
set forth in the Indenture, the principal of all the Bonds issued under the Indenture and then Outstanding
may become or may be declared due and payable before the stated maturity thereof,together with interest
accrued thereon. Modifications or alterations of this Bond or the Indenture may be made only to the
extent and in the circumstances permitted by the Indenture.
THIS BOND is transferable, as provided in the Indenture, only upon the books of the City kept
for that purpose at the above-mentioned office of the Trustee by the Owner hereof in Person or by such
Person's duly authorized attorney, upon surrender of this Bond together with a written instrument of
transfer satisfactory to the Trustee duly executed by the Owner or such Person's duly authorized attorney,
and thereupon a new fully registered Bond or Bonds, in the same aggregate principal amounts, shall be
issued to the transferee in exchange therefor as provided in the Indenture, and upon payment of the
charges therein prescribed. The City,the Trustee and any Paying Agent may deem and treat the Person in
whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment of,
or on account of, the principal or redemption price hereof and interest due hereon and for all other
purposes.
THE BONDS are issuable in the form of one fully-registered Bond in the maximum principal
amount of$9,000,000.
THIS BOND shall not be valid or become obligatory for any purposes or be entitled to any
security or benefit under the Indenture until the Certificate of Authentication hereon shall have been
executed by the Trustee.
IT IS HEREBY CERTIFIED AND DECLARED that all acts, conditions and things required
to exist, happen and be performed precedent to and in the execution and delivery of the Indenture and the
issuance of this Bond do exist, have happened and have been performed in due time, form and manner as
required by the Constitution and laws of the State of Missouri.
IN WITNESS WHEREOF,City of Riverside, Missouri, has caused this Bond to be executed in
its name by the manual or facsimile signature of its Mayor, attested by the manual or facsimile signature
of its City Clerk and its corporate seal to be affixed hereto or imprinted hereon.
CERTIFICATE OF AUTHENTICATION CITY OF RIVERSIDE,MISSOURI
This Bond is one of the Bonds
of the issue described in the
within-mentioned Resolution. By:
Mayor
Registration Date:
WELLS FARGO BANK,
NATIONAL ASSOCIATION,
as Trustee ATTEST: (Seal)
By
Authorized Signatory City Clerk
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SCHEDULEI
TABLE OF CUMULATIVE OUTSTANDING PRINCIPAL AMOUNT
CITY OF RIVERSIDE,MISSOURI
TAXABLE INDUSTRIAL REVENUE BOND
(PREMIUM WATERS,INC.PROJECT)
SERIES 2017
Bond No. 1
Cumulative
Outstanding Notation
Principal Amount Principal Amount Principal Made
Date Advanced Redeemed Amount B
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FORM OF ASSIGNMENT
(NOTE RESTRICTIONS ON TRANSFERS)
FOR VALUE RECEIVED,the undersigned hereby sells,assigns and transfers unto
Print or Typewrite Name,Address and Social Security or
other Taxpayer Identification Number of Transferee
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books kept by the Trustee
for the registration and transfer of Bonds,with full power of substitution in the premises.
Dated:
NOTICE: The signature to this assignment must
correspond with the name as it appears upon the
face of the within Bond in every particular.
Signature Guaranteed By:
(Name of Eligible Guarantor Institution as
defined by SEC Rule 17 Ad-15 (17 CFR 240.17
Ad-15))
By
Title:
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EXHIBIT D
FORM OF REPRESENTATION LETTER
City of Riverside, Missouri
Riverside,Missouri
Wells Fargo Bank,National Association
Denver,Colorado
ATTN: Corporate Trust Department
Re: $9,000,000 Maximum Principal Amount of Taxable Industrial Revenue Bonds(Premium
Waters, Inc. Project), Series 2017, of City of Riverside, Missouri
Ladies and Gentlemen:
In connection with the purchase of the above-referenced Bonds (the "Bonds"), the undersigned
purchaser of the Bonds hereby represents,warrants and agrees as follows:
1. The undersigned purchaser fully understands that (a) the Bonds have been issued under
and pursuant to a Trust Indenture dated as of June 1, 2017 (the "Indenture"), between the City of
Riverside, Missouri (the "City") and Wells Fargo Bank,National Association, as trustee (the "Trustee"),
and (b) the Bonds are payable solely out of certain rents, revenues and receipts to be derived from the
leasing or sale of the Project (as defined in the Indenture) to Premium Waters, Inc., a corporation duly
incorporated and existing under the laws of the State of Minnesota and authorized to do business in
Missouri (the"Company"),under a Lease Agreement dated as of June 1, 2017 (the"Lease"), between the
City and the Company, with certain of such rents, revenues and receipts being pledged and assigned by
the City to the Trustee under the Indenture to secure the payment of the principal of and interest on the
Bonds.
2. The undersigned purchaser understands that the Bonds are transferable only in the
manner provided for in the Indenture and discussed below and warrants that it is acquiring the Bonds for
its own account with the intent of holding the Bonds as an investment, and the acquisition of the Bonds is
not made with a view toward its distribution or for the purpose of offering, selling or otherwise
participating in a distribution of the Bonds.
3. The undersigned purchaser agrees not to attempt to offer, sell, hypothecate or otherwise
distribute the Bonds to others unless authorized by the terms of the Indenture and upon receipt of any
required opinion of counsel acceptable to the City, the Company and the purchaser that all registration
and disclosure requirements of the Securities and Exchange Commission and all other appropriate federal
and Missouri securities laws and the securities law of any other applicable state are complied with.
D-1
4. The Company has (a)furnished to the undersigned purchaser such information about
itself as the undersigned deems necessary in order for it to make an informed investment decision with
respect to the purchase of the Bonds, (b)made available to the undersigned, during the course of this
transaction, ample opportunity to ask questions of, and to receive answers from, appropriate officers of
the City and the terms and conditions of the offering of the Bonds, and(c)provided to the undersigned all
additional information which it has requested.
5. The undersigned purchaser is now, and was when it agreed to purchase the Bonds,
familiar with the operations of the Company and fully aware of terms and risks of the Bonds. The
undersigned believes that the Bonds which it is acquiring is a security of the kind that it wishes to
purchase and hold for investment and that the nature and amount thereof are consistent with its
investment program.
6. The undersigned is fully aware of and satisfied with (a) the current status of the title to
the Project and any issues related thereto and (b) the terms, amounts and providers of the insurance
maintained pursuant to Article VII of the Lease, and the undersigned is purchasing the Bonds with full
knowledge of such matters.
7. The undersigned understands and agrees that the interest on the Bonds is subject to
federal and state income taxation.
8. The undersigned hereby directs the Trustee to hold the Bonds in trust pursuant to
Section 204(c)of the Indenture.
[9. The undersigned is familiar with Regulation D promulgated under the 1933 Act and is a
sophisticated institutional investor and an"accredited investor"within the meaning of Regulation D. The
undersigned understands that the Bonds may be resold, pledged or transferred only to a person who the
seller reasonably believes is (a) a "qualified institutional buyer" as defined in Rule 144A promulgated
under the 1933 Act,that purchases for its own account or for the account of a qualified institutional buyer,
or (b) a sophisticated institutional investor and an "accredited investor" as defined in Regulation D, that
purchases for its own account.]
Dated: 20_
[PURCHASER OF BONDS]
By:
Name:
Title:
D-2
CITY OF RIVERSIDE,MISSOURI,
As Lessor,
AND
PREMIUM WATERS,INC.,
As Lessee
LEASE AGREEMENT
Dated as of June 1,2017
Relating to:
$9,000,000
(Aggregate Maximum Principal Amount)
City of Riverside,Missouri
Taxable Industrial Revenue Bonds
(Premium Waters,Inc.Project)
Series 2017
The interest of the City of Riverside, Missouri (the "City"), in this Lease Agreement has been
pledged and assigned to Wells Fargo Bank, National Association, Denver, Colorado, as Trustee
under the Trust Indenture dated as of June 1,2017,between the City and the Trustee.
LEASE AGREEMENT
TABLE OF CONTENTS
Page
Parties................................................................................................................................ 1
Recitals ............................................................................................................................. 1
ARTICLE I
DEFINITIONS
Section I.I. Definitions of Words and Terms.........................................................................................2
Section 1.2. Rules of Interpretation. ......................................................................................................2
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the City................................................................................................3
Section 2.2. Representations by the Company.......................................................................................4
ARTICLE III
GRANTING PROVISIONS
Section 3.1. Granting of Leasehold Estate.............................................................................................4
Section3.2. Lease Term.........................................................................................................................4
Section 3.3. Possession and Use of the Project......................................................................................4
Section3.4. Title to the Project..............................................................................................................5
ARTICLE IV
PURCHASING AND INSTALLING THE PROJECT
Section 4.1. Issuance of the Bonds. .......................................................................................................5
Section 4.2. Purchase and Installation of the Project.............................................................................5
Section4.3. Project Costs. .....................................................................................................................6
Section 4.4. Payment for Project Costs..................................................................................................6
Section 4.5. Establishment of Completion Date....................................................................................6
Section 4.6. Surplus or Deficiency in Project Fund...............................................................................6
Section 4.7. Project Property of City......................................................................................................7
Section 4.8. Personal Property Purchased by the Company...................................................................7
Section 4.9. Environmental Matters.......................................................................................................7
ARTICLE V
RENT PROVISIONS
Section5.1. Basic Rent..........................................................................................................................7
Section5.2. Additional Rent..................................................................................................................8
Section 5.3. Obligations of Company Absolute and Unconditional. .....................................................8
Section 5.4. Prepayment of Basic Rent..................................................................................................9
ARTICLE VI
MAINTENANCE,TAXES AND UTILITIES
Section 6.1. Maintenance and Repairs...................................................................................................9
Section 6.2. Taxes,Assessments and Other Governmental Charges......................................................9
Section6.3. Utilities.............................................................................................................................10
Section 6.4. Property Tax Exemption...................................................................................................10
ARTICLE VII
INSURANCE
Section 7.1. Insurance Generally..........................................................................................................10
Section 7.2. Property Insurance. ..........................................................................................................11
Section 7.3. Commercial General Liability Insurance.........................................................................l l
Section 7.4. Workers'Compensation...................................................................................................I1
Section 7.5. Blanket Insurance Policies; Self-Insurance......................................................................l l
ARTICLE VIII
ALTERATION OF THE PROJECT
Section 8.1. Additions,Modifications and Improvements to the Project. ...........................................12
Section 8.2. Removal and Replacement of Portions of the Project......................................................12
Section8.3. [Reserved]........................................................................................................................12
Section 8.4. Permits and Authorizations..............................................................................................13
Section8.5. Mechanics'Liens. ............................................................................................................13
ARTICLE IX
DAMAGE,DESTRUCTION AND CONDEMNATION
Section 9.1. Damage or Destruction....................................................................................................13
Section9.2. Condemnation..................................................................................................................14
Section 9.3. Bondowner Approval.......................................................................................................15
(ii)
ARTICLE X
SPECIAL COVENANTS
Section 10.1. No Warranty of Condition or Suitability by the City; Exculpation and
Indemnification...........................................................................................................16
Section 10.2. Surrender of Possession...................................................................................................16
Section 10.3. City's Right of Access to the Project................................................................................16
Section 10.4. Permitted Encumbrances; Equipment Financing Documents..........................................16
Section 10.5. Indemnification of City and Trustee. ...............................................................................18
Section 10.6. Depreciation, Investment Tax Credit and Other Tax Benefits..........................................19
Section 10.7. Company to Maintain its Corporate Existence. ...............................................................19
Section10.8. Security Interests..............................................................................................................20
ARTICLE XI
OPTION AND OBLIGATION TO PURCHASE THE PROJECT
Section 11.1. Option to Purchase the Project.........................................................................................20
Section 11.2. Conveyance of the Project. ..............................................................................................21
Section 11.3. Relative Position of Option and Indenture.......................................................................21
Section 11.4. Obligation to Purchase the Project...................................................................................21
ARTICLE XII
DEFAULTS AND REMEDIES
Section12.1. Events of Default. ............................................................................................................22
Section 12.2. Remedies on Default........................................................................................................22
Section 12.3. Survival of Obligations....................................................................................................23
Section 12.4. Performance of the Company's Obligations by the City..................................................23
Section 12.5. Rights and Remedies Cumulative....................................................................................23
Section12.6. Waiver of Breach..............................................................................................................23
Section 12.7. Trustee's Exercise of the City's Remedies.......................................................................24
ARTICLE XHI
ASSIGNMENT AND SUBLEASE
Section 13.1. Assignment; Sublease......................................................................................................24
Section 13.2. Assignment of Revenues by City.....................................................................................25
Section 13.3. Restrictions on Sale or Encumbrance of Project by City.................................................25
ARTICLE XIV
AMENDMENTS,CHANGES AND MODIFICATIONS
Section 14.1. Amendments,Changes and Modifications. .....................................................................25
(iii)
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section15.1. Notices.............................................................................................................................25
Section 15.2. City Shall Not Unreasonably Withhold Consents and Approvals....................................25
Section15.3. Net Lease..........................................................................................................................25
Section 15.4. Limitation on Liability of City.........................................................................................26
Section15.5. Governing Law.................................................................................................................26
Section15.6. Binding Effect..................................................................................................................26
Section15.7. Severability.......................................................................................................................26
Section 15.8. Electronic Storage............................................................................................................26
Section 15.9. Execution in Counterparts................................................................................................26
Section 15.10. Complete Agreement........................................................................................................26
Signaturesand Seals ......................................................................................................S-1
Exhibit A: Project Site
Exhibit B: Project
Exhibit C: Form of Requisition Certificate
(iv)
LEASE AGREEMENT
THIS LEASE AGREEMENT, dated as of June I, 2017 (the "Lease"), between the CITY OF
RIVERSIDE,MISSOURI,a fourth-class city and political subdivision organized and existing under the
laws of the State of Missouri, as lessor (the "City"), and PREMIUM WATERS, INC., a Minnesota
corporation, as lessee(the"Company");
RECITALS:
1. The City is authorized under Article VI, Section 27(b) of the Missouri Constitution and
Sections 100.010 through 100.200 of the Revised Statutes of Missouri, as amended (the "Act"), to
purchase,construct, extend and improve certain "projects" (as defined in Section 100.010 of the Act)and
to issue industrial development revenue bonds for the purpose of providing funds to pay the costs of such
projects and to lease or otherwise dispose of such projects to private persons or corporations for
manufacturing, commercial, warehousing and industrial development purposes upon such terms and
conditions as the City shall deem advisable.
2. Pursuant to the Act, the Board of Aldermen of the City gave notice to the affected taxing
jurisdictions in accordance with Section 100.059.1 of the Act and the financing of the costs of a project
(the "Project," as more fully described on Exhibit B hereto) for the Company consisting of the
acquisition and installation of new equipment and machinery(the"Project Equipment")at the Company's
existing facility located on certain real property in Riverside, Missouri (the "Project Site," as more fully
described on Exhibit A hereto), out of the proceeds of the industrial development revenue bonds to be
issued under the Act to provide funds to pay the costs of the Project, and to lease or sell the Project to the
Company for the purpose of financing the costs of the Project.
3. Following such notice to affected taxing jurisdictions,the Board of Aldermen of the City
adopted Ordinance No. on June ' 2017, approving a plan for the Company's economic
development project to be financed through the issuance of $9,000,000 principal amount of Taxable
Industrial Revenue Bonds(Premium Waters,Inc. Project), Series 2017(the"Bonds").
4. Pursuant to Ordinance No. (the "Ordinance") adopted by the Board of
Aldermen of the City on June , 2017, the City is authorized to execute and deliver (a) the Trust
Indenture for the purpose of issuing and securing the Bonds,(b)this Lease Agreement with the Company,
as lessee, under which the City, as lessor, will purchase, install and equip the Project and will lease the
Project to the Company, in consideration of rentals which will be sufficient to pay the principal of and
interest on the Bonds, and (c) the Performance Agreement for the purpose of setting forth the terms and
conditions of the Project's exemption from ad valorem personal property taxes and certain payments in
lieu of taxes to be made by the Company with respect to the Project.
5. Pursuant to the foregoing, the City desires to lease the Project to the Company and the
Company desires to lease the Project from the City, for the rentals and upon the terms and conditions
hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual representations,
covenants and agreements herein contained,the City and the Company do hereby represent,covenant and
agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1. Definitions of Words and Terms. In addition to any words and terms defined
elsewhere in this Lease and the words and terms defined in Section 101 of the Indenture which
definitions are hereby incorporated herein by reference,and terms defined,the following words and terms
as used in this Lease shall have the following meanings:
"Equipment Financing" means any financings which the Company may undertake with an
Equipment Lender with respect to the Project or any portion thereof.
"Equipment Financing Documents" means all loan agreements, notes, security documents,
UCC financing statements,acknowledgements, assignments and other documents securing, evidencing or
otherwise pertaining to any Equipment Financing.
"Equipment Lender" means all third parties entering into any Equipment Financing Documents
or receiving delivery of or the benefit from any Equipment Financing Documents, including the
Equipment Lender's designee,nominee,assignee,transferee,purchaser in foreclosure or receiver.
"Environmental Law" means and includes the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, the Superfund
Amendments and Reauthorization Act of 1986, any other "Superfund" or "Superlien" law, or any other
federal, state or local statute, law, ordinance, code, rule, regulation, order or decree regulating, relating to,
or imposing liability or standards of conduct concerning any Hazardous Materials, as now or at any time
hereafter in effect.
Section 1.2. Rules of Interpretation.
(a) Words of the masculine gender shall be deemed and construed to include correlative
words of the feminine and neuter genders.
(b) Unless the context shall otherwise indicate, words importing the singular number shall
include the plural and vice versa, and words importing persons shall include firms, associations and
corporations, including governmental entities,as well as natural persons.
(c) Wherever in this Lease 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.
(d) All references in this instrument to designated "Articles," "Sections" and other
subdivisions are, unless otherwise specified, to the designated Articles, Sections and subdivisions of this
instrument as originally executed. The words "herein," "hereof.. "hereunder" and other words of similar
import refer to this Lease Agreement as a whole and not to any particular Article, Section or other
subdivision.
(e) The Table of Contents and the Article and Section headings of this Lease shall not be
treated as a part of this Lease or as affecting the true meaning of the provisions hereof.
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(f) Whenever an item or items are listed after the word "including," such listing is not
intended to be a listing that excludes items not listed.
ARTICLE II
REPRESENTATIONS
Section 2.1. Representations by the City. The City makes the following representations as
the basis for the undertakings on its part herein contained:
(a) The City is a fourth-class city and political subdivision duly organized and validly
existing under the laws of the State of Missouri. Under the provisions of the Act, the City has lawful
power and authority to enter into the transactions contemplated by this Lease and to carry out its
obligations hereunder. By proper action of its governing body, the City has been duly authorized to
execute and deliver this Lease, acting by and through its duly authorized officers;
(b) The City proposes to purchase, equip and install the Project or cause the Project to be
purchased, equipped and installed. The City will lease the Project to the Company and sell the Project or
any portion thereof to the Company if the Company exercises its option to purchase the Project or any
portion thereof as provided herein,all for the purpose of furthering the public purposes of the Act,and the
governing body of the City has found and determined that the purchase and installation of the Project will
further the public purposes of the Act;
(c) To finance the costs of the Project, the City proposes to issue the Bonds which will be
scheduled to mature as set forth in Article II of the Indenture and will be subject to redemption prior to
maturity in accordance with the provisions of Article III of the Indenture;
(d) The Bonds are to be issued under and secured by the Indenture, pursuant to which the
Project and the net earnings therefrom, including all rents,revenues and receipts to be derived by the City
from the leasing or sale of the Project, will be pledged and assigned to the Trustee as security for payment
of the principal of and interest on the Bonds;
(e) The City will not permit a lien to be placed on the Project or pledge the revenues derived
therefrom for any bonds or other obligations other than the Bonds except with the written consent of the
Authorized Company Representative;
(f) The City shall have no authority to operate the Project as a business or in any other
manner except as the lessor thereof;
(g) The purchase and installation of the Project and the leasing of the Project by the City to
the Company will further the public purposes of the Act; and
(h) No member of the governing body of the City or any other officer of the City has any
significant or conflicting interest, financial, employment or otherwise, in the Company or in the
transactions contemplated hereby.
-3-
Section 2.2. Representations by the Company. The Company makes the following
representations as the basis for the undertakings on its part herein contained:
(a) The Company is a corporation duly incorporated, validly existing and in good standing
under the laws of the State of Minnesota and is authorized to conduct business in the State of Missouri;
(b) The Company has lawful power and authority to enter into this Lease and to carry out its
obligations hereunder and by proper corporate action of the Board of Directors of the Company has been
duly authorized to execute and deliver this Lease, acting by and through its duly authorized officers;
(c) The execution and delivery of this Lease, the consummation of the transactions
contemplated hereby, and the performance of or compliance with the terms and conditions of this Lease
by the Company will not conflict with or result in a material breach of any of the terms, conditions or
provisions of, or constitute a material default under, any mortgage, deed of trust, lease or any other
corporate restrictions or any agreement or instrument to which the Company is a party or by which it or
any of its property is bound, or the Company's Articles of Incorporation or bylaws or any order, rule or
regulation applicable to the Company or any of its property of any court or governmental body, or
constitute a material default under any of the foregoing, or result in the creation or imposition of any
prohibited lien,charge or encumbrance of any nature whatsoever upon any of the property or assets of the
Company under the terms of any instrument or agreement to which the Company is a party;
(d) The estimated costs of purchasing and installing the Project are in accordance with sound
accounting principles; and
(e) The Project is located wholly within the corporate limits of the City of Riverside,
Missouri.
ARTICLE III
GRANTING PROVISIONS
Section 3.1. Granting of Leasehold Estate. The City hereby rents, leases and lets the
Project to the Company, and the Company hereby rents, leases and hires the Project from the City, subject
to Permitted Encumbrances, for the rentals and upon and subject to the terms and conditions herein
contained.
Section 3.2. Lease Term. This Lease shall become effective upon its delivery, and subject to
sooner termination pursuant to the provisions of this Lease, shall have a term commencing as of the date
of this Lease and terminating on December 1,2027.
Section 3.3. Possession and Use of the Project.
(a) The City covenants and agrees that as long as neither the City nor the Trustee has
exercised any of the remedies set forth in Section 12.2(b)following the occurrence and continuance of an
Event of Default, the Company shall have sole and exclusive possession of the Project (subject to
Permitted Encumbrances and the City's and the Trustee's right of access pursuant to Section 10.3 hereof)
and shall and may peaceably and quietly have, hold and enjoy the Project during the Lease Term. The
City covenants and agrees that it will not take any action, other than expressly pursuant to Article XII of
this Lease, to prevent the Company from having quiet and peaceable possession and enjoyment of the
Project during the Lease Term and will, at the request and expense of the Company, cooperate with the
-4-
Company in order that the Company may have quiet and peaceable possession and enjoyment of the
Project and will defend the Company's enjoyment and possession thereof against all parties.
(b) Subject to the provisions of this Section, the Company shall have the right to use the
Project for any lawful purpose allowed by law and contemplated by the Act, this Lease and the
Performance Agreement. The Company shall comply in all material respects with all statutes, laws,
ordinances, orders,judgments, decrees, regulations, directions and requirements of all federal, state, local
and other governments or governmental authorities, now or hereafter applicable to the Project or to any
adjoining public ways, as to the manner of use or the condition of the Project or of adjoining public ways.
In the event of demonstrated noncompliance with such statutes, laws, ordinances, orders, judgments,
decrees, regulations, directions and requirements the Company will take all reasonable steps to comply
with such statutes, laws, ordinances, orders,judgments, decrees, regulations, directions and requirements.
The Company shall also comply with the mandatory requirements, rules and regulations of all insurers
under the policies carried under the provisions of Article VII hereof. The Company shall pay all costs,
expenses, claims, fines, penalties and damages that may in any manner arise out of, or be imposed as a
result of, the failure of the Company to comply with the provisions of this Section. Notwithstanding any
provision contained in this Section, however, the Company shall have the right, at its own cost and
expense, to contest or review by legal or other appropriate procedures the validity or legality of any such
governmental statute, law,ordinance,order,judgment,decree,regulation,direction or requirement,or any
such requirement, rule or regulation of an insurer, and during such contest or review the Company may
refrain from complying therewith.
Section 3.4. Title to the Project. The City shall be the sole owner of the Project during the
Lease Term.
ARTICLE IV
PURCHASING AND INSTALLING
THE PROJECT
Section 4.1. Issuance of the Bonds. To provide funds for the payment of Project Costs, the
City agrees that it will issue, sell and cause to be delivered to the purchaser thereof the Bonds in
accordance with the provisions of the Indenture and the Bond Purchase Agreement. The proceeds of the
sale of the Bonds, when received, shall be paid over to the Trustee for the account of the City. The
Trustee shall promptly deposit such proceeds,when received, as provided in the Indenture,to be used and
applied as hereinafter provided in this Lease and in the Indenture.
Section 4.2. Purchase and Installation of the Project. The City and the Company agree that
the City will and the Company as the agent of the City shall, but solely from the Project Fund, purchase,
equip and install the Project as follows:
(a) Concurrently with the execution of this Lease, the City will acquire that portion
of the Project currently complete, and a bill of sale with respect thereto will be delivered to the
City.
(b) The Company will, on behalf of the City, purchase, equip and install the Project
in accordance with the Plans and Specifications. Except as provided in the next sentence, title to
the Project shall be evidenced by bills of sale or other instruments of transfer, including purchase
orders or other instruments pursuant to which the City acquires title to personal property directly
from the vendor thereof. Subject to Section 8.2, all portions of the Project substituted by the
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Company shall automatically become part of the Project subject to this Lease, and full title and
ownership of such Project shall be automatically vested in the City, without the requirement of a
bill of sale or other instrument of conveyance unless otherwise requested by the City. In any
event,on or before March 1 of each year,the Company shall furnish to the City and the Trustee a
list of items (based on the Company's internal record keeping) comprising the Project as of
January 1 of such year. The improper inclusion or exclusion of any item in the Project pursuant
to such list may be rectified by the Company within 30 days notice of such improper inclusion or
exclusion. The improper inclusion or exclusion of an item from such list shall not affect the items
comprising the Project for the purpose of this Lease or title thereto as intended by the parties
hereto. The Company shall provide such information to the City as may be requested in order to
ensure that such list corresponds to the list of items comprising the Project maintained by the City
pursuant to Section 10.8.
(c) The Company agrees that it will use reasonable efforts to cause the purchase and
installation of the Project to be completed as soon as practicable with all reasonable dispatch. In
the event such purchase and installation commences prior to the receipt of proceeds from the sale
of the Bonds,the Company agrees to advance all funds necessary for such purpose.
Section 43. Project Costs. The City hereby agrees to pay for, but solely from the Project
Fund, and hereby authorizes and directs the Trustee to pay for, but solely from the Project Fund, all
Project Costs upon receipt by the Trustee of a certificate pursuant to Section 4.4 hereof.
Section 4.4. Payment for Project Costs. All Project Costs as specified in Section 4.3 hereof
shall be paid by the Trustee from the Project Fund as more fully provided in the Indenture, and the City
hereby authorizes and directs the Trustee to make disbursements from the Project Fund, upon receipt by
the Trustee of certificates in substantially the form attached hereto as Exhibit C,signed by an Authorized
Company Representative. The Trustee may rely conclusively on any such certificate and shall not be
required to make any independent investigation in connection therewith. The submission of any
requisition certificate by an Authorized Company Representative shall constitute unto the Trustee an
irrevocable determination that all conditions precedent to the payments requested have been satisfied.
Section 4.5. Establishment of Completion Date. The Completion Date shall be evidenced
to the Trustee by a certificate signed by the Authorized Company Representative stating (a)the purchase
and installation of the Project has been completed in accordance with the Plans and Specifications, (b)
that all costs and expenses incurred in the purchase and installation of the Project have been paid except
costs and expenses the payment of which is not yet due or is being retained or contested in good faith by
the Company, and(c) amounts to be retained by Trustee with respect to item(b)above. Notwithstanding
the foregoing, such certificate shall state that it is given without prejudice to any rights against third
parties which exist at the date of such certificate or which may subsequently come into being. The
Company and the City agree to cooperate in causing such certificate to be furnished to the Trustee.
Section 4.6. Surplus or Deficiency in Project Fund.
(a) Upon receipt of the certificate described in Section 4.5 hereof, the Trustee shall, as
provided in Section 504 of the Indenture, transfer any remaining moneys then in the Project Fund to the
Bond Fund to be applied as directed by the Company solely to(1)the payment of principal and premium,
if any, of the Bonds through the payment (including regularly scheduled principal payments, if any) or
redemption thereof at the earliest date permissible under the terms of the Indenture, or(2)at the option of
the Company, to the purchase of Bonds at such earlier date or dates as the Company may elect. Any
amount so deposited in the Bond Fund may be invested as permitted by Section 702 of the Indenture.
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(b) If the Project Fund shall be insufficient to pay fully all Project Costs and to complete the
Project free of liens and encumbrances other than Permitted Encumbrances, the Company shall pay, in
cash,the full amount of any such deficiency by making payments thereof directly to the contractors and to
the suppliers of materials and services as the same shall become due,and the Company shall save the City
and the Trustee whole and harmless from any obligation to pay such deficiency.
Section 4.7. Project Property of City. The Project and all additions thereto or thereof, the
Project as fully completed, anything under this Lease which becomes, is deemed to be, or constitutes a
part of the Project, and the Project as repaired, rebuilt, rearranged, restored or replaced by the Company
under the provisions of this Lease, except as otherwise specifically provided herein, shall immediately
when acquired and/or installed become the absolute property of the City, subject only to this Lease, the
Indenture and any Permitted Encumbrances. Nothing herein shall limit the Company's right to own
personal property which is not a part of the Project as described in Section 4.8 hereof.
Section 4.8. Personal Property Purchased by the Company. Any item of personal property
the entire purchase price of which is paid for by the Company with the Company's own funds,and no part
of the purchase price of which is paid for from funds deposited pursuant to the terms of this Lease in the
Project Fund, shall be the sole and absolute property of the Company and shall not be subject to the terns
of this Lease or the Performance Agreement.
Section 4.9. Environmental Matters. The Company acknowledges that is it responsible for
maintaining the Project in compliance with all Environmental Laws. In the event that the Company fails
to undertake to comply with any final, non-appealable order issued by any local, state or federal authority
under applicable Environmental Law, the City or the Trustee, immediately after notice to the Company,
may elect(but shall not be required)to undertake such compliance. Any moneys expended by the City or
the Trustee in efforts to comply with any applicable Environmental Law (including the reasonable cost of
hiring consultants, undertaking sampling and testing, performing any cleanup necessary or useful in the
compliance process and reasonable attorneys' fees) shall be due and payable as Additional Rent
hereunder with interest thereon at the average rate of interest per annum on the Bonds, plus two (2)
percentage points, from the date such cost is incurred. There shall be unlimited recourse to the Company
to the extent of any liability incurred by the City or the Trustee with respect to any breaches of the
provisions of this section.
The Company shall and does hereby indemnify the City, the Trustee and the Bondowners and
agree to defend and hold them harmless from and against all loss, cost, damage and expense (including,
without limitation, reasonable attorneys' fees and costs associated incurred in the investigation, defense
and settlement of claims) that they may incur, directly or indirectly, as a result of or in connection with
the assertion against them or any of them of any claim relating to the presence on,escape or removal from
the Project during the term of this Lease of any hazardous substance or other material regulated by any
applicable Environmental Law, or compliance with any applicable Environmental Law, whether such
claim is raised before, during or after the term of this Lease, including claims relating to personal injury
or damage to property; provided, however, this indemnity shall only relate to claims resulting from the
City's ownership of the Project and the Trustee's acceptance of its duties as Trustee hereunder.
ARTICLE V
RENT PROVISIONS
Section 5.1. Basic Rent. The Company covenants and agrees to pay to the Trustee in same
day funds for the account of the City during this Lease Term, for deposit in the Bond Fund on or before
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10:00 a.m., Trustee's local time, on or before each December 1, commencing December 1, 2017 and
continuing until the principal of and interest on the Bonds shall have been fully paid, an amount which,
when added to any collected funds then on deposit in the Bond Fund and available on such Payment Date,
shall be equal to the total amount payable on each December 1 as interest on the Bonds. On December 1,
2027 (or such earlier date as the Company may elect to redeem the Bonds), the Company shall also pay
an amount equal to all principal then due on the Bonds in connection with such maturity or redemption.
All payments of Basic Rent provided for in this Section shall be paid directly to the Trustee and shall be
deposited in accordance with the provisions of the Indenture into the Bond Fund and shall be used and
applied by the Trustee in the manner and for the purposes set forth in this Lease and the Indenture,
provided that if the Company is the Owner of all the Bonds Outstanding, payment of Basic Rent as
provided for in this Section may be made via a transaction entry on the trust records held by the Trustee
and the Paying Agent consistent with Section 204(d) of the Indenture. Any Basic Rent paid by the
Company which exceeds the total amount payable on such payment dates shall be immediately paid to the
Company by wire transfer. At its option, on the final Payment Date, the Company may deliver to the
Trustee for cancellation Bonds not previously paid and the Company shall receive a credit against the
Basic Rent payable by the Company in an amount equal to the principal amount of the Bonds so tendered
for cancellation plus accrued interest thereon.
Section 5.2. Additional Rent. The Company shall pay as Additional Rent, within 30 days
after receiving an itemized invoice therefor,the following amounts as and when the same become due:
(a) all reasonable fees, charges and expenses, including agent and counsel fees, of
the Trustee incurred under the Indenture, this Lease, or any other document entered into in
connection with the Bonds,as and when the same become due;
(b) all costs incident to the payment of the principal of and interest on the Bonds as
the same becomes due and payable, including all costs and expenses in connection with the call,
redemption and payment of all outstanding Bonds;
(c) all reasonable costs which are reasonably incurred in connection with the
enforcement of any rights against the Company or the Project or in connection with a failure of
the Company to perform its obligations under this Lease, the Indenture or the Performance
Agreement by the City,the Trustee or the Bondowners, including counsel fees and expenses;
(d) all amounts payable under the Performance Agreement; or
(e) all other payments of whatever nature which Company has agreed to pay or
assume under the provisions of this Lease.
Notwithstanding the foregoing, the Trustee may conclusively rely on the invoices presented to it in
accordance with this Section 5.2 as complete authorization for and shall incur no liability for
disbursements made pursuant thereto.
Section 53. Obligations of Company Absolute and Unconditional.
(a) The obligations of the Company under this Lease to make payments of Basic Rent and
Additional Rent on or before the date the same become due, and to perform all of its other obligations,
covenants and agreements hereunder shall be absolute and unconditional, without notice or demand, and
without abatement, deduction, set-off, counterclaim, recoupment or defense or any right of termination or
cancellation arising from any circumstance whatsoever, whether now existing or hereafter arising, and
irrespective of whether the Project shall have been started or completed,or whether the City's title thereto
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or to any part thereof is defective or nonexistent, and notwithstanding any damage to, loss, theft or
destruction of, the Project or any part thereof, any failure of consideration or frustration of commercial
purpose, the taking by eminent domain of title to or of the right of temporary use of all or any part of the
Project, legal curtailment of the Company's use thereof, the eviction or constructive eviction of the
Company, any change in the tax or other laws of the United States of America, the State of Missouri or
any political subdivision thereof, any change in the City's legal organization or status, or any default of
the City hereunder, and regardless of the invalidity of any action of the City, and regardless of the
invalidity of any portion of this Lease.
(b) Nothing in this Lease shall be construed to release the City from the performance of any
agreement on its part herein contained or as a waiver by the Company of any rights or claims the
Company may have against City under this Lease or otherwise, but any recovery upon such rights and
claims shall be had from the City separately, it being the intent of this Lease that the Company shall be
unconditionally and absolutely obligated to perform fully all of its obligations, agreements and covenants
under this Lease (including the obligation to pay Basic Rent and Additional Rent) for the benefit of the
Bondowners. The Company may, however, at its own cost and expense and in its own name or in the
name of the City, prosecute or defend any action or proceeding or take any other action involving third
persons which the Company deems reasonably necessary in order to secure or protect its right of
possession, occupancy and use hereunder, and in such event the City hereby agrees to cooperate fully
with the Company and to take all action necessary to effect the substitution of the Company for the City
in any such action or proceeding if the Company shall so request.
Section 5.4. Prepayment of Basic Rent. The Company may at any time and from time to
time prepay all or any part of the Basic Rent provided for hereunder (subject to the limitations of
Section 301(a)of the Indenture relating to the partial redemption of the Bonds). During such times as the
amount held by the Trustee in the Bond Fund shall be sufficient to pay, at the time required,the principal
of and interest on all the Bonds then remaining unpaid, the Company shall not be obligated to make
payments of Basic Rent under the provisions of this Lease. At its option,the Company may deliver to the
Trustee for cancellation Bonds owned by the Company and not previously paid, and the Company shall
receive a credit against amounts payable by the Company for the redemption of Bonds in an amount equal
to the principal amount of the Bonds so tendered for cancellation, plus accrued interest thereon(principal
to be credited against principal and interest to be credited against interest).
ARTICLE VI
MAINTENANCE,TAXES AND UTILITIES
Section 6.1. Maintenance and Repairs. Throughout the Lease Term the Company shall, at
its own expense, keep the Project in as reasonably safe condition as the operation thereof will permit, and
keep the Project in good repair and in good operating condition, making from time to time all necessary
repairs thereto and renewals and replacements thereof it determines to be necessary. Without limiting the
generality of the foregoing,the Company shall at all times remain in compliance with all provisions of the
City's code relating to maintenance and appearance.
Section 6.2. Taxes,Assessments and Other Governmental Charges.
(a) Subject to subsection (b) of this Section, the Company shall promptly pay and discharge,
as the same become due, all taxes and assessments, general and special, and other governmental charges
of any kind whatsoever that may be lawfully taxed, charged, levied, assessed or imposed upon or against
or be payable for or in respect of the Project, or any part thereof or interest therein (including the
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leasehold estate of the Company therein) or any buildings, improvements, machinery and equipment at
any time installed thereon by the Company, or the income therefrom, including any new taxes and
assessments not of the kind enumerated above to the extent that the same are lawfully made, levied or
assessed in lieu of or in addition to taxes or assessments now customarily levied against real or personal
property, and further including all utility charges, assessments and other general governmental charges
and impositions whatsoever, foreseen or unforeseen, which if not paid when due would impair the
security of the Bonds or encumber the City's title to the Project; provided that with respect to any special
assessments or other governmental charges that are lawfully levied and assessed which may be paid in
installments, the Company shall be obligated to pay only such installments thereof as become due and
payable during the Lease Term.
(b) The Company shall have the right, in its own name or in the City's name, to contest the
validity or amount of any tax, assessment or other governmental charge which the Company is required to
bear, pay and discharge pursuant to the terms of this Article by appropriate legal proceedings instituted at
least 10 days before the tax, assessment or other governmental charge complained of becomes delinquent
if and provided (1) the Company, before instituting any such contest, gives the City and the Trustee
written notice of its intention so to do, (2) the Company diligently prosecutes any such contest, at all
times effectively stays or prevents any official or judicial sale therefor, under execution or otherwise, and
(3) the Company promptly pays any final judgment enforcing the tax, assessment or other governmental
charge so contested and thereafter promptly procures record release or satisfaction thereof. The City
agrees to cooperate fully with the Company in connection with any and all administrative or judicial
proceedings related to any tax, assessment or other governmental charge. The Company shall save and
hold harmless the City and the Trustee from any costs and expenses the City and the Trustee may incur
related to any of the above.
(c) Nothing in this Lease shall be construed to require the Company to make duplicate tax
payments. The Company shall receive a credit against any payments in lieu of taxes due under the
Performance Agreement to the extent of any ad valorem taxes imposed and paid by the Company with
respect to the Project paid pursuant to this Section.
Section 6.3. Utilities. All utilities and utility services used by the Company in, on or about
the Project shall be paid for by the Company and shall be contracted for by the Company in the
Company's own name (or the name(s) of its Affiliates), and the Company shall, at its sole cost and
expense, procure any and all permits, licenses or authorizations necessary in connection therewith.
Section 6.4. Property Tax Exemption. The City and the Company agree that while the
Project is owned by the City and is subject to this Lease, the Project and the leasehold interest of the
Company in the Project will be exempt from all ad valorem personal property taxes by reason of such
ownership, and the City agrees that it will (at the expense of the Company) cooperate with the Company
to defend such exemption against all parties in accordance with the Performance Agreement.
Notwithstanding the foregoing, Company will annually pay to the City the payments with respect to the
Project set forth in the Performance Agreement.
ARTICLE VII
INSURANCE
Section 7.1. Insurance Generally. The Company agrees to maintain the insurance required
by this Article VII. The Trustee shall have no obligation to purchase insurance if the Company fails to
maintain the insurance required by this Article VII.
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Section 7.2. Property Insurance.
(a) The Company shall at its sole cost and expense obtain and shall maintain throughout the
Lease Term, a policy or policies of insurance (including, if appropriate, builder's risk insurance) to keep
the Project constantly insured against loss or damage by fire, lightning and all other risks covered by the
extended coverage insurance endorsement then in use in the State of Missouri in an amount equal to the
Full Insurable Value thereof(subject to reasonable loss deductible provisions), or such other amount as
may be approved by the Owners of 100% in principal amount of the Bonds outstanding and the City,
which consent shall not be unreasonably withheld. The insurance required pursuant to this Section shall
be maintained with a generally recognized responsible insurance company or companies authorized to do
business in the State of Missouri or generally recognized international insurers or reinsurers with an A.M.
Best rating of B+ or the equivalent thereof or better as may be selected by the Company. Certificates of
the insurance policies required under this Section, together with a separate certificate of the Company
Representative stating that the Company is in compliance with the insurance requirements of this Section,
shall be delivered by the Company to the Trustee, annually, commencing on the date of execution of this
Lease. All such policies of insurance pursuant to this Section, and all renewals thereof, shall name the
City, the Trustee and the Company as insureds, as their respective interests may appear, and shall contain
a provision that such insurance may not be canceled by the issuer thereof without at least 10 days'
advance written notice to the County,the Company and the Trustee.
(b) In the event of loss or damage to the Project, the Net Proceeds of property insurance
carried pursuant to this Section shall be applied as provided in Article IX of this Lease, or as may be
directed by, or on behalf of,the Owners of 100% in principal amount of the Bonds outstanding.
Section 7.3. Commercial General Liability Insurance.
(a) The Company shall at its sole cost and expense maintain or cause to be maintained at all
times during the Lease Term general accident and commercial general liability insurance under which the
City, the Company and the Trustee shall be named as additional insureds, properly protecting and
indemnifying the City and the Trustee, in an amount not less than $1,000,000 per occurrence (subject to
reasonable liability retention amounts not to exceed the amounts normally or generally carried by the
Company or its affiliates). The policies of said insurance shall contain a provision that such insurance
may not be canceled by the issuer thereof without at least 10 days' advance written notice to the City, the
Company and the Trustee. Certificates of such policies, together with a separate certificate of the
Company Representative stating that the Company is in compliance with the insurance requirements of
this Section, shall be furnished to the Trustee annually commencing on the date of execution of this Lease
at the address shown in Section 1403 of the Indenture.
(b) In the event of a public liability occurrence, the proceeds of liability insurance carried
pursuant to this Section shall be applied toward the extinguishment or satisfaction of the liability with
respect to which such proceeds have been paid.
Section 7.4. Workers' Compensation. The Company agrees throughout the Lease Term to
maintain or cause to be maintained the Workers' Compensation coverage required by the laws of the State
of Missouri.
Section 7.5. Blanket Insurance Policies; Self-Insurance. The Company may satisfy any of
the insurance requirements set forth in this Article by using blanket policies of insurance, provided each
and all of the requirements and specifications of this Article respecting insurance are complied with.
Nothing in this Lease shall be construed from prohibiting the Company from self-insuring provided the
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Company, or in combination with its parent corporation, has a net worth in excess of$100,000,000, as
determined by generally accepted accounting principles.
ARTICLE VIII
ALTERATION OF THE PROJECT
Section 8.1. Additions, Modifications and Improvements to the Project. The Company
shall have and is hereby given the right, at its sole cost and expense, to make such additions,
modifications and improvements in and to any part of the Project as the Company from time to time may
deem necessary or desirable for its business purposes. All additions, modifications and improvements
made by the Company pursuant to the authority of this Section shall (a)be made in workmanlike manner
and will comply in all material respects with all laws and ordinances applicable thereto, (b) when
commenced, he prosecuted to completion with due diligence, and (c) when completed, be deemed a part
of the Project; provided, however, that additions of machinery and equipment installed on the Project Site
by the Company not purchased or acquired from funds deposited with the Trustee hereunder and not
constituting repairs, renewals or replacements of the Project shall remain the property of the Company
and may be removed by the Company. Such property shall be not be exempt from ad valorem taxes;
provided, however, that nothing herein shall be deemed to be a waiver by the Company of any claim for
exemption from ad valorem taxes not arising pursuant to this Lease.
Section 8.2. Removal and Replacement of Portions of the Project.
(a) The Company may, if it is not in default in making payments of Basic Rent or Additional
Rent hereunder, remove from the Project and sell, exchange, replace or otherwise dispose of, without
responsibility or accountability to the City or the Trustee with respect thereto,any items of machinery and
equipment, or parts thereof, which constitute a part of the Project and which have become inadequate,
obsolete, worn out, unsuitable, undesirable or unnecessary or which, in the sound discretion of the
Company, are otherwise no longer useful to the Company in its operations. Prior to any such removal,
the Company shall deliver to the City and the Trustee a certificate signed by an Authorized Company
Representative containing a complete description, including the make, model and serial numbers, if any,
of any machinery or equipment constituting a part of the Project that the Company proposes to remove.
Upon request, the City will execute and deliver a bill of sale that transfers full and complete title to the
Company of such portion of the Project removed. Notwithstanding anything contained herein to the
contrary, title to any item of the Project removed from the Project Site shall automatically vest in the
Company without further instrument or action, and such vesting of title shall be self-operative effective
upon removal. Upon any removal of portions of the Project, the portions of the Project so removed shall
no longer be entitled to the benefits of the Performance Agreement.
(b) In all cases,the Company shall pay all of the costs and expenses of any such removal and
shall immediately repair at its expense all damage to the Project caused thereby. The Company's rights
under this Section to remove machinery and equipment constituting a part of the Project is intended only
to permit the Company to maintain an efficient operation by the removal of machinery and equipment
which is no longer suitable for any of the reasons set forth in this Section, and such right is not to be
construed to permit a removal under any other circumstances and specifically is not to be construed to
permit the Company to make a wholesale removal of the Project.
Section 8.3. [Reserved].
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Section 8.4. Permits and Authorizations. The Company shall not do or permit others under
its control to do any work on the Project related to any repair, rebuilding, restoration, replacement,
modification or addition to the Project, or any part thereof, unless all requisite municipal and other
governmental permits and authorizations shall have been first procured. All such work shall be done in a
good and workmanlike manner and in material compliance with all applicable building, zoning and other
laws, ordinances, governmental regulations. In the event of demonstrated noncompliance with such laws,
ordinances, governmental regulations and requirements the Company will take all reasonable steps to
comply with laws,ordinances, governmental regulations and requirements.
Section 8.5. Mechanics' Liens.
(a) The Company will not directly or indirectly create, incur, assume or suffer to exist any
lien on or with respect to the Project, except Permitted Encumbrances, and the Company shall promptly
notify the City of the imposition of such lien of which the Company is aware and shall promptly, at its
own expense,take such action as may be necessary to fully discharge or release any such lien. Whenever
and as often as any mechanics' or other similar lien is filed against the Project, or any part thereof,
purporting to be for or on account of any labor done or materials or services furnished in connection with
any work in or about the Project,the Company shall discharge the same of record. Notice is hereby given
that the City shall not be liable for any labor or materials furnished the Company or anyone claiming by,
through or under the Company upon credit, and that no mechanics' or other similar lien for any such
labor, services or materials shall attach to or affect the reversionary or other estate of the City in and to
the Project or any part thereof.
(b) Notwithstanding paragraph (a)above, the Company may contest any such mechanics' or
other similar lien if the Company (i) within 60 days notifies the City and the Trustee in writing of its
intention so to do,(ii)diligently prosecutes such contest,(iii)at all times effectively stays or prevents any
official or judicial sale of the Project, or any part thereof or interest therein, under execution or otherwise,
(iv) promptly pays or otherwise satisfies any final judgment adjudging or enforcing such contested lien
claim and (v) thereafter promptly procures record release or satisfaction thereof. The Company may
permit the lien so contested to remain unpaid during the period of such contest and any appeal therefrom
unless the Company is notified by the City that, in the opinion of counsel, by nonpayment of any such
items, the interest of the City in the Project will be subject to loss or forfeiture. In that event, the
Company shall promptly, at its own expense, take such action as may be necessary to duly discharge or
remove any such mortgage, pledge, lien, charge,encumbrance or claim if the same shall arise at any time.
The Company shall save and hold harmless the City from any loss, costs or expenses the City may incur
related to any such contest. The Company shall reimburse the City for any expense incurred by it in order
to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim. The City shall
cooperate fully with the Company in any such contest.
ARTICLE IX
DAMAGE,DESTRUCTION AND CONDEMNATION
Section 9.1. Damage or Destruction.
(a) If the Project shall be damaged or destroyed by fire or any other casualty, whether or not
covered by insurance,the Company,as promptly as practicable, may elect to do any of the following:
(i) repair, restore, replace or improve the Project as nearly as may be practicable to the
condition and character of the Project immediately prior to such damage or destruction.
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(ii) if the Company shall determine that repairing, restoring, replacing or improving the
Project or any portion thereof is not practicable and desirable, any Net Proceeds of property
insurance required by Article VII hereof received with respect to such damage or loss shall be
paid into the Bond Fund and shall be used to redeem Bonds on the earliest practicable redemption
date or to pay the principal of any Bonds as the same become due.
(b) If the Company shall elect to replace any equipment, for all purposes of this Lease, any
reference to the words "Project" shall be deemed to also include any such new equipment and all
additions thereto and all replacements and alterations thereof.
(c) The Net Proceeds of property insurance required by Article VII hereof received with
respect to any damage or loss to the Project shall be paid to the Company. The insurance monies, if any,
paid to the Company as provided under this Article, on account of any loss or destruction to the Project,
shall be held by it in trust and applied only as provided in subsection(a)above.
(d) If any of the insurance monies paid by the insurance company to the Company as
hereinabove provided, shall remain after the completion of such repairs, restoration or replacement, and
this Lease shall not have terminated,the excess shall be deposited in the Bond Fund. If the Net Proceeds
shall be insufficient to pay the entire cost of such repairs, restoration or replacement, the Company shall
pay the deficiency.
(e) In the event of any such damage by fire or any other casualty,the provisions of this Lease
shall be unaffected and the Company shall remain and continue liable for the payment of all Basic Rent
and Additional Rental and all other charges required hereunder to be paid by the Company, as though no
damage by fire or any other casualty has occurred.
(f) The City and the Company agree that they will cooperate with each other, to such extent
as such other party may reasonably require, in connection with the prosecution or defense of any action or
proceeding arising out of, or for the collection of any insurance monies that may be due in the event of,
any loss or damage, and that they will execute and deliver to such other parties such instruments as may
be required to facilitate the recovery of any insurance monies.
(g) The Company agrees to give prompt notice to the City and the Trustee with respect to all
fires and any other casualties occurring in, on, at or about the Project which damage a material portion of
the Project.
(h) The Company shall not, by reason of its inability to use all or any part of the Project
during any period in which the Project is damaged or destroyed or is being repaired, rebuilt, restored or
replaced, nor by reason of the payment of the costs of such rebuilding, repairing, restoring or replacing,
be entitled to any reimbursement from the City, the Trustee or the Bondowners or to any abatement or
diminution of the rentals payable by the Company under this Lease or of any other obligations of the
Company under this Lease except as expressly provided in this Section.
Section 9.2. Condemnation.
(a) If during the Lease Term, title to, or the temporary use of, all or any part of the Project
shall be condemned by or sold under threat of condemnation to any authority possessing the power of
eminent domain, to such extent that the claim or loss resulting from such condemnation is greater than
$1,000,000, the Company shall, within 90 days after the date of entry of a final order in any eminent
domain proceedings granting condemnation or the date of sale under threat of condemnation, notify the
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City and the Trustee in writing as to the nature and extent of such condemnation or loss of title and
whether it is practicable and desirable to acquire substitute equipment.
(b) If the Company shall determine that such substitution is practicable and desirable, the
Company shall proceed promptly with and complete with reasonable dispatch the acquisition and
installation of such substitute equipment, so as to place the Project in substantially the same condition as
existed prior to the exercise of the said power of eminent domain, including the acquisition of other
equipment suitable for the Company's operations (which equipment will be deemed a part of the Project
and available for use by the Company without the payment of any rent other than herein provided, to the
same extent as if such other equipment were specifically described herein and demised hereby); provided,
that such equipment will be acquired by the City subject to no liens, security interests or encumbrances
prior to the lien and/or security interest afforded by the Indenture other than Permitted Encumbrances. In
such case, any Net Proceeds received from any award or awards with respect to the Project or any part
thereof made in such condemnation or eminent domain proceedings, or of the sale proceeds, shall be
applied in the same manner as provided in Section 9.1 hereof(with respect to the receipt of property
insurance proceeds).
(c) If the Company determines that it is not practicable and desirable to acquire replacement
equipment, any Net Proceeds of condemnation awards received by the Company shall, after payment of
all Additional Rent then due and payable, be paid into the Bond Fund and shall be used to redeem Bonds
on the earliest practicable redemption date or to pay the principal of any Bonds as the same becomes due
and payable, all subject to the rights of any Equipment Lender under the Equipment Financing
Documents.
(d) The Company shall not, by reason of its inability to use all or any part of the Project
during any such period of restoration or acquisition nor by reason of the payment of the costs of such
restoration or acquisition, be entitled to any reimbursement from the City,the Trustee or the Bondowners
or to any abatement or diminution of the rentals payable by the Company under this Lease nor of any
other obligations hereunder except as expressly provided in this Section.
(e) The City shall cooperate fully with the Company in the handling and conduct of any
prospective or pending condemnation proceedings with respect to the Project or any part thereof, and
shall, to the extent it may lawfully do so, permit the Company to litigate in any such proceeding in the
name and on behalf of the City. In no event will the City voluntarily settle or consent to the settlement of
any prospective or pending condemnation proceedings with respect to the Project or any part thereof
without the prior written consent of the Company.
Section 9.3. Bondowner Approval. Notwithstanding anything to the contrary contained in
this Article 1X, the proceeds of any insurance received subsequent to a casualty or of any condemnation
proceedings (or threats thereof) may prior to the application thereof by the City or the Trustee be applied
as directed by the Owners of 100%of the principal amount of Bonds outstanding, subject and subordinate
to the rights of the City and the Trustee to be paid all their expenses(including reasonable attorneys' fees,
trustee's fees and any extraordinary expenses of the City and the Trustee) incurred in the collection of
such gross proceeds. For purposes of this Section only, any person to whom Bonds have been pledged in
good faith shall be deemed to be the Owner of the Bonds.
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ARTICLE X
SPECIAL COVENANTS
Section 10.1. No Warranty of Condition or Suitability by the City; Exculpation and
Indemnification. The City makes no warranty, either express or implied, as to the condition of the
Project or that it will be suitable for the Company's purposes or needs. The Company releases the City
and the Trustee from, agrees that the City shall not be liable for and agrees to hold the City and the
Trustee harmless against, any loss or damage to property or any injury to or death of any person that may
be occasioned by any cause whatsoever pertaining to the Project or the use thereof; unless such loss is the
result of the City's or the Trustee's respective gross negligence or willful misconduct. This provision
shall survive termination of this Lease.
Section 10.2. Surrender of Possession. Upon accrual of the City's right of repossession of the
Project because of the Company's default hereunder or upon the cancellation or termination of this Lease
for any reason other than the Company's purchase of the Project pursuant to Article XI hereof, the
Company shall peacefully surrender possession of the Project to the City in good condition and repair,
ordinary wear and tear excepted. All repairs to and restorations of the facilities containing the Project
required to be made because of such removal shall be made by and at the sole cost and expense of the
Company.
Section 10.3. City's Right of Access to the Project. The Company agrees that the City and
the Trustee and their duly authorized agents shall have the right at reasonable times during business
hours, subject to 24 hours' advance written notice and the Company's usual safety and security
requirements, to enter upon the Project Site(a)to examine and inspect the Project without interference or
prejudice to the Company's operations, (b) as may be reasonably necessary to cause to be completed the
purchase and installation provided for in Section 4.2 hereof, (c) performing such work in and about the
Project Site made necessary by reason of the Company's default under any of the provisions of this Lease,
and(d)exhibiting the Project to prospective purchasers, lessees or trustees.
Section 10.4. Permitted Encumbrances; Equipment Financing Documents.
(a) If no Event of Default under this Lease shall have happened and be continuing, the
Company may at any time or times incur Permitted Encumbrances.
(b) The Company may request the City to(i)pledge, assign or otherwise hypothecate all or a
portion of its interest in and to the Project in connection with any Equipment Financing, and/or (ii)
acknowledge any Equipment Financing and the rights and remedies of any Equipment Lender thereunder.
Subject to the terms and conditions of this Section, the City promptly will execute and deliver or
authorize the filing of, at the Company's request and expense, all Equipment Financing Documents. The
City and the Trustee will not be liable for any of the indebtedness evidencing the Equipment Financing or
for any other obligations of the Company, as borrower under the Equipment Financing Documents in the
Company's own name or as the authorized agent for the City even if such agency relationship is not
specified. No separate signature or authorization from the City will be required for the execution and
delivery of any Equipment Financing Documents. Each Equipment Lender will be entitled to rely upon
the Equipment Financing Documents as having been executed by the Company as the agent for the City
unless the Equipment Lender has actual notice that the agency granted in this Lease has been terminated
because of an uncured Event of Default under this Lease. The City appoints the Company as its
irrevocable attorney-in-fact, coupled with an interest, to execute and deliver on behalf of the City each
Financing Document, subject to the limitations of liability set forth above.
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(c) In the event of an Equipment Financing by which all or a portion of the Project is pledged
as collateral under the Equipment Financing Documents, each of the following provisions will apply in
addition to,but not excluding,provisions of the Equipment Financing Documents:
(1) This Lease may not be modified, amended, canceled or surrendered by
agreement between the City and the Company, without the prior written consent of each
Equipment Lender of which the City and the Trustee have received written notice.
(2) There will be no merger of title between the leasehold estate created by this
Lease and the ownership interest of the City in the Project, notwithstanding that this Lease or the
leasehold estate and ownership interest will be owned by the same person or persons,without the
prior written consent of each Equipment Lender.
(3) If the mailing address of the Equipment Lender is provided to the City and the
Trustee in writing, the City will send each Equipment Lender a copy of each notice of default and
each notice of termination given to the Company under this Lease, at the same time such notice is
sent to the Company. No notice to the Company will be effective unless a copy thereof is served
upon each Equipment Lender of which the City and the Trustee has received written notice.
(4) Each Equipment Lender will have the same time period after receipt of notice
within which to remedy or cause to be remedied any payment default under this Lease plus thirty
(30)days, and the City will accept performance by the Equipment Lender as timely performance
by the Company.
(5) The Equipment Lender will not be required to continue possession or continue
legal proceedings under this Section if the particular default has been cured.
(6) The City may exercise any of its rights or remedies with respect to any other
default by the Company, subject to the rights of the Equipment Lender under this Section as to
such other defaults.
(7) In case of default by the Company under this Lease or the Performance
Agreement, other than a default in the payment of money, the City will take no action to effect a
termination of this Lease or the Performance Agreement by service of a notice or otherwise
without first giving notice to the Equipment Lender and allowing the Equipment Lender a
reasonable time within which either to (i) obtain possession of the Project and to remedy such
default, or (ii) institute and, with reasonable diligence, complete legal proceedings or otherwise
acquire the Company's leasehold estate under this Lease. The City's right to terminate this Lease
and the Performance Agreement by reason of a default that is not susceptible of being remedied
by the Equipment Lender will end with respect to such default when the Equipment Lender
obtains possession of the Project or portion thereof financed by an Equipment Financing. The
Equipment Lender will pay or cause to be paid to the City and the Trustee all expenses, including
reasonable counsel fees, court costs and disbursements incurred by the City or the Trustee in
connection with any such default.
(8) If this Lease terminates prior to the expiration of the Lease Term, the City will
enter into a new lease for the Project with the Equipment Lender for the remainder of the term,
effective as of the date of such termination, at the same rent and upon the same terms, covenants
and conditions contained herein, except that such new lease shall not guarantee possession of the
Project to the new Company as against the Company and/or anyone claiming under the Company,
and the City, simultaneously with the execution and delivery of such new lease,turns over to the
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new lessee all monies, if any, then held by the City under the Lease on behalf of the Company, on
condition that:
(A) the Equipment Lender will make written request for such new lease
within thirty(30)days after the date of such termination,and
(B) on the commencement date of the term of the new lease, the new tenant
cures all defaults of the Company under this Lease (susceptible of being cured by the
Equipment Lender)which remain uncured on that date, and pays or causes to be paid all
unpaid sums which at such time would have been payable under this Lease but for such
termination, and pays or causes to be paid to the City and the Trustee on that date all
expenses, including reasonable counsel fees, court costs and disbursements, incurred by
the City and the Trustee in connection with any such default and termination as well as in
connection with the execution and delivery of such new lease.
If more than one Equipment Lender requests a new lease, a new lease will be made with and
delivered to the Equipment Lender whose security interest is prior in lien to those of any other
Equipment Lender.
(9) If the Equipment Lender becomes the owner of this Lease and the Equipment
Lender assigns this Lease, the Equipment Lender assigning this Lease shall be released from all
liability accruing from and after the date of such assignment with the express written consent of
the City.
(d) In the event the City or the Trustee engages counsel to review Equipment Financing
Documents in connection with any request for the City to execute any Equipment Financing Documents
or otherwise pledge the Project as collateral, the Company will reimburse the City and the Trustee for
their reasonable counsel fees and expenses incurred in connection with such review.
Section 10.5. Indemnification of City and Trustee. The Company shall indemnify and save
and hold harmless the City and the Trustee and their governing body members, officers, agents and
employees (collectively, the "Indemnified Parties") from and against all claims, demands, costs,
liabilities, damages or expenses, including reasonable attorneys' fees, by or on behalf of any person, firm
or corporation arising from the issuance of the Bonds and the execution of this Lease, the Indenture or
any other documents entered into in connection with the Bonds and from the conduct or management of,
or from any work or thing done in or on the Project during the Lease Term, and against and from all
claims, demands, costs, liabilities, damages or expenses, including reasonable attorneys' fees, arising
during the Lease Term from (a) any condition of the Project, (b) any breach or default on the part of the
Company in the performance of any of its obligations under this Lease or any related document, (c) any
contract entered into in connection with the purchase, construction, extension or improvement of the
Project,(d)any act of negligence of the Company or of any of its agents,contractors, servants, employees
or licensees, (e) unless the Company has been released from liability pursuant to Section 13.1(c), any act
of negligence of any assignee or sublessee of the Company, or of any agents, contractors, servants,
employees or licensees of any assignee or sublessee of the Company, (f) obtaining any applicable state
and local sales and use tax exemptions for materials or goods that become part of the Project, and(g) any
claim relating to the presence on, escape or removal from the Project during the term of the Lease of any
hazardous substance or other material regulated by any applicable Environmental Law, or compliance
with any applicable Environmental Law,whether such claim arises before, during or after the term of this
Lease, including claims relating to personal injury or damage to property; provided, however, the
indemnification contained in this Section 10.5 shall not (i) extend to the City if such claims, demands,
costs, liabilities,damages or expenses, including attorneys' fees, are the result of work being performed at
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the Project by employees of the City or the result of gross negligence or willful misconduct by the City,
or (ii) extend to the Trustee if such claims, demands, costs, liabilities, damages or expenses, including
attorneys' fees, are the result of the gross negligence or willful misconduct of the Trustee or(iii) if such
claims, demands, costs, liabilities, damages or expenses, including attorneys' fees, are the result of the
performance or failure to perform by the City of its obligations under the Performance Agreement. Upon
notice from the City or the Trustee, the Company shall defend them or either of them in any such action
or proceeding. This Section 10.5 shall survive any termination of this Lease, the satisfaction and
discharge of the Indenture or the resignation or removal of the Trustee.
In case any action shall be brought against one or more of the Indemnified Parties based upon the
foregoing indemnification and in respect of which indemnity may be sought against the Company, the
Indemnified Parties shall promptly notify the Company in writing and the Company shall promptly
assume the defense thereof, including the employment of counsel,the payment of all reasonable expenses
and the right to negotiate and consent to settlement. If the Company shall have wrongfully failed to
assume the defense of such action, the reasonable fees and expenses of counsel retained by the
Indemnified Party shall be paid by the Company. If any of the Indemnified Parties is advised by counsel
retained by the Company to defend such action that there may be legal defenses available to it which are
adverse to or in conflict with those available to the Company or any other Indemnified Party, and that the
defense of such Indemnified Party should be handled by separate counsel,the Company shall not have the
right to assume the defense of such Indemnified Party, but shall be responsible for the reasonable fees and
expenses of counsel retained by such Indemnified Party in assuming its own defense. Any one or more of
the Indemnified Parties shall have the right to employ separate counsel in any such action and to
participate in the defense thereof. The Company shall not be liable for any settlement of any such action
effected without its consent by any of the Indemnified Parties, but if settled with the consent of the
Company or if there be a final judgment for the plaintiff in any such action against the Company or any of
the Indemnified Parties, with or without the consent of the Company, the Company agrees to indemnify
and hold harmless the Indemnified Parties to the extent provided herein.
Section 10.6. Depreciation, Investment Tax Credit and Other Tax Benefits. The City
agrees that any depreciation, investment tax credit or any other tax benefits with respect to the Project or
any part thereof shall be made available to the Company, and the City will fully cooperate with the
Company in any effort by the Company to avail itself of any such depreciation, investment tax credit or
other tax benefits.
Section 10.7. Company to Maintain its Corporate Existence. The Company agrees that
until the Bonds are paid or payment is provided for in accordance with the terms of the Indenture, it will
maintain its corporate existence, and will not dissolve or otherwise dispose of all or substantially all of its
assets; provided, however, that the Company may, without violating the agreement contained in this
Section, consolidate with or merge into another domestic corporation(i.e., a corporation incorporated and
existing under the laws of one of the states of the United States) or permit one or more other domestic
corporations to consolidate with or merge into it, or may sell or otherwise transfer to another domestic
corporation all or substantially all of its assets as an entirety and thereafter dissolve, provided, the
surviving, resulting or transferee corporation either (A) becomes, in connection with the consolidation,
merger or sale of assets becomes the Owner of 100% in principal amount of the Bonds outstanding and
expressly assumes in writing all of the obligations of the Company contained in this Lease and the
Performance Agreement, or(B) if not the Owner of 100% in principal amount of the Bonds outstanding,
expressly assumes in writing all the obligations of the Company contained in this Lease; and, further
provided, that if not the Owner of 100% in principal amount of the Bonds outstanding, the surviving,
resulting or transferee corporation, as the case may be, has a consolidated net worth(after giving effect to
said consolidation, merger or transfer) at least (i) equal to or greater than that of the Company
immediately prior to said consolidation, merger or transfer, or (b) $100,000,000. The term "net worth",
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as used in this Section, shall mean the difference obtained by subtracting total liabilities(not including as
a liability any capital or surplus item) from total assets of the Company and all of its subsidiaries. In any
such consolidation, merger or transfer the Company shall comply with the provisions of Section 10.1
hereof to the extent applicable.
Section 10.8. Security Interests. At the written request of the Owner of the Bonds, the City
and the Company agree to enter into all instruments (including financing statements, statements of
continuation and termination statements)necessary for perfection of,the continuance of,the perfection of,
and termination of the security interests of the City and the Trustee in the Project. Upon the written
instructions of the Owner of the Bonds, the Trustee, at the Company's expense, shall file all instruments
the Owner of the Bonds shall deem necessary to be filed to continue or cause to be continued or
terminated the liens of such instruments for so long as the Bonds shall be Outstanding. The City and the
Company shall cooperate with the Trustee in this regard by executing such continuation or termination
statements and providing such information required to renew or terminate such liens. Notwithstanding
anything to the contrary contained herein,the Trustee shall not be responsible for any initial filings of any
financing statements or the information contained therein (including the exhibits thereto), the perfection
of any such security interest, or the accuracy or sufficiency of any description of collateral in such initial
filings or for filing any modifications or amendments to the initial filings required by any amendments to
Article 9 of the Uniform Commercial Code. In addition, unless the Trustee shall have been notified in
writing by the City that any such initial filing or description of collateral was or has become defective,the
Trustee shall be fully protected in (i) relying on such initial filing and descriptions in filing any financing
or continuation statements or modifications thereto pursuant to this Section 10.8 and (ii) filing any
continuation statements in the same filing offices as the initial filings were made. The Trustee shall cause
to be filed a continuation statement with respect to each Uniform Commercial Code financing statement
relating to the Bonds in such manner and in such places as the initial filings were made, provided that a
copy of the filed original financing statement is timely delivered to the Trustee.
ARTICLE XI
OPTION AND OBLIGATION TO PURCHASE THE PROJECT
Section 11.1. Option to Purchase the Project. The Company shall have, and is hereby
granted,the option to purchase the Project at any time,upon payment in full of all Bonds then outstanding
or provision for their payment having been made pursuant to Article XIII of the Indenture. To exercise
such option the Company shall give written notice to the City and to the Trustee, and shall specify therein
the date of closing such purchase, which date shall be not less than 15 nor more than 90 days from the
date such notice is mailed, and in case of a redemption of the Bonds in accordance with the provisions of
the Indenture, the Company shall make arrangements satisfactory to the Trustee for the giving of the
required notice of redemption. Notwithstanding the forgoing, if the City or the Trustee provides notice of
its intent to exercise its remedies hereunder(a"Remedies Notice"),the Company shall be deemed to have
exercised its repurchase option under this Section on the 29th day following the issuance of the Remedies
Notice without any further action by the Company; provided said notice has not been rescinded by such
date (such option to take place on the 29th day following the issuance of the Remedies Notice). The
Company may rescind such exercise by providing written notice to the City and the Trustee on or prior to
the 291" and by taking such action as may be required to cure the default that led to the giving of the
Remedies Notice. The purchase price payable by the Company in the event of its exercise of the option
granted in this Section shall be the sum of the following:
(a) an amount of money which, when added to the amount then on deposit in the
Bond Fund,will be sufficient to redeem all the then outstanding Bonds on the earliest redemption
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date next succeeding the closing date, including, without limitation, principal and interest to
accrue to said redemption date and redemption expense;plus
(b) an amount of money equal to the Trustee's agreed to and reasonable fees,charges
and expenses under the Indenture accrued and to accrue until such redemption of the Bonds;plus
(c) an amount of money equal to all payments due and payable pursuant to the
Performance Agreement through the end of the calendar year in which the date of purchase
occurs;plus
(d) the sum of$100.00.
At its option, to be exercised at least 5 days prior to the date of closing such purchase, the
Company may deliver to the Trustee for cancellation Bonds not previously paid, and the Company shall
receive a credit against the purchase price payable by the Company in an amount equal to 100% of the
principal amount of the Bonds so delivered for cancellation,plus the accrued interest thereon.
Section 11.2. Conveyance of the Project. At the closing of the purchase of the Project
pursuant to this Article, the City will upon receipt of the purchase price deliver to the Company the
following:
(a) If the Indenture shall not at the time have been satisfied in full,a release from the
Trustee of the Project from the lien and/or security interest of the Indenture.
(b) Documents conveying to the Company legal title to the Project, as it then exists,
subject to the following: (1) those liens and encumbrances, if any, to which title to the Project
was subject when conveyed to the City; (2)those liens and encumbrances created by the
Company or to the creation or suffering of which the Company consented; (3) those liens and
encumbrances resulting from the failure of the Company to perform or observe any of the
agreements on its part contained in this Lease; (4) Permitted Encumbrances other than the
Indenture and this Lease; and(5) if the Project or any part thereof is being condemned, the rights
and title of any condemning authority.
Section 11.3. Relative Position of Option and Indenture. The options and obligation to
purchase the Project granted to the Company in this Article shall be and remain prior and superior to the
Indenture and may be exercised whether or not the Company is in default under this Lease, provided that
such default will not result in nonfulfillment of any condition to the exercise of any such option and
further provided that all options herein granted shall terminate upon the termination of this Lease.
Section 11.4. Obligation to Purchase the Project. As additional consideration for the
Company's use of the Project,the Company hereby agrees to purchase,and the City hereby agrees to sell,
the Project upon the occurrence of(a) the expiration of the Lease Term following full payment of the
Bonds or provision for payment thereof having been made in accordance with the provisions of the
Indenture, and(b)the final payment due under the Performance Agreement. The amount of the purchase
price under this Section shall be $100 plus an amount sufficient to redeem all the then Outstanding
Bonds, plus accrued interest and the reasonable fees and expenses of the City and the Trustee.
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ARTICLE XII
DEFAULTS AND REMEDIES
Section 12.1. Events of Default. If any one or more of the following events shall occur and be
continuing, it is hereby defined as and declared to be and to constitute an "Event of Default"or"default"
under this Lease:
(a) Default in the due and punctual payment of Basic Rent;or
(b) Default in the due and punctual payment of Additional Rent for a period of 30
days following written notice to the Company by the City or the Trustee; or
(c) Default in the due observance or performance of any other covenant, agreement,
obligation or provision of this Lease on the Company's part to be observed or performed, and
such default shall continue for 30 days after the City or the Trustee has given the Company
written notice specifying such default (or such longer period as shall be reasonably required to
cure such default; provided that (1)the Company has commenced such cure within said 30-day
period, and(2)the Company diligently prosecutes such cure to completion); or
(d) The Company: (1) admits in writing its inability to pay its debts as they become
due; or (2) files a petition in bankruptcy or for reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the Bankruptcy Code as now or in the
future amended or any other similar present or future federal or state statute or regulation, or files
a pleading asking for such relief; or (3) make an assignment for the benefit of creditors; or (4)
consents to the appointment of a trustee, receiver or liquidator for all or a major portion of its
property or fails to have the appointment of any trustee, receiver or liquidator made without the
Company's consent or acquiescence,vacated or set aside; or(5) is finally adjudicated as bankrupt
or insolvent under any federal or state law; or(6) is subject to any proceeding, or suffers the entry
of a final and non-appealable court order, under any federal or state law appointing a trustee,
receiver or liquidator for all or a major part of its property or ordering the winding-up or
liquidation of its affairs, or approving a petition filed against it under the Bankruptcy Code, as
now or in the future amended, which order or proceeding, if not consented to by it, is not
dismissed, vacated, denied, set aside or stayed within 90 days after the day of entry or
commencement; or(7)suffers a writ or warrant of attachment or any similar process to be issued
by any court against all or any substantial portion of its property, and such writ or warrant of
attachment or any similar process is not contested, stayed, or is not released within 60 days after
the final entry, or levy or after any contest is finally adjudicated or any stay is vacated or set
aside; or
(e) The Company vacates or abandons the Project, and the same shall remain
vacated or abandoned for a period of at least 90 days; or
(f) The occurrence and continuance of an "Event of Default" by the Company under
the Performance Agreement following any applicable notice and grace period provided therein.
Section 12.2. Remedies on Default. If any Event of Default referred to in Section 12.1 hereof
has occurred and continues beyond the period provided to cure, then the City may at the City's election
(subject, however, to any restrictions against acceleration of the maturity of the Bonds or termination of
this Lease in the Indenture), then or at any time thereafter, and while such default continues, take any one
or more of the following actions:
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(a) cause all amounts payable with respect to the Bonds for the remainder of the term
of this Lease to become due and payable after giving ten(10) days prior written notice thereof to
the Company, as provided in the Indenture; or
(b) give the Company written notice of intention to terminate this Lease on a date
specified therein, which date shall not be earlier than 30 days after such notice is given, and if all
defaults have not then been cured, on the date so specified, the Owners shall tender or be deemed
to have tendered the outstanding principal amount of the Bonds for cancellation with instruction
that such tender is in lieu of payment in accordance with Section 11.1 hereof, the Company's
rights to possession of the Project shall cease and this Lease shall thereupon be terminated, and
the City may take possession of the Project or, if the Company has paid all obligations due and
owing under the Indenture and the Performance Agreement, convey the Project in accordance
with Section 11.2 hereof.
Section 12.3. Survival of Obligations. The Company covenants and agrees with the City and
Owners that those of its obligations under this Lease which by their nature require performance after the
end of the term of this Lease, or which are expressly stated herein as intended to survive expiration or
termination of this Lease, shall survive the cancellation and termination of this Lease,for any cause.
Section 12.4. Performance of the Company's Obligations by the City. If the Company shall
fail to keep or perform any of its obligations as provided in this Lease in the making of any payment or
performance of any obligation, then the City, or the Trustee in the City's name, may (but shall not be
obligated so to do) upon the continuance of such failure on the Company's part for 30 days after written
notice of such failure is given the Company by the City or the Trustee, and without waiving or releasing
the Company from any obligation hereunder, as an additional but not exclusive remedy, make any such
payment or perform any such obligation, and all reasonable sums so paid by the City or the Trustee and
all incidental reasonable costs and expenses incurred by the City or the Trustee (including, without
limitation, attorneys' fees and expenses) in performing such obligations shall be deemed Additional Rent
and shall be paid to the City or the Trustee on demand,and if not so paid by the Company,the City or the
Trustee shall have the same rights and remedies provided for in Section 12.2 hereof in the case of default
by the Company in the payment of Basic Rent.
Section 12.5. Rights and Remedies Cumulative. The rights and remedies reserved by the
Trustee,the City and the Company hereunder and those provided by law shall be construed as cumulative
and continuing rights. No one of them shall be exhausted by the exercise thereof on one or more
occasions. The Trustee, the City and the Company shall each be entitled to specific performance and
injunctive or other equitable relief for any breach or threatened breach of any of the provisions of this
Lease, notwithstanding availability of an adequate remedy at law, and each party hereby waives the right
to raise such defense in any proceeding in equity.
Section 12.6. Waiver of Breach. No waiver of any breach of any covenant or agreement
herein contained shall operate as a waiver of any subsequent breach of the same covenant or agreement or
as a waiver of any breach of any other covenant or agreement, and in case of a breach by the Company of
any covenant,agreement or undertaking by the Company, the Trustee or the City may nevertheless accept
from the Company any payment or payments hereunder without in any way waiving the Trustee or the
City's right to exercise any of its rights and remedies provided for herein with respect to any such breach
or breaches of the Company which were in existence at the time such payment or payments were accepted
by the Trustee or the City.
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Section 12.7. Trustee's Exercise of the City's Remedies. Whenever any Event of Default
shall have occurred and be continuing, the Trustee may, but except as otherwise provided in the Indenture
shall not be obliged to, exercise any or all of the rights of the City under this Article, upon notice as
required of the City unless the City has already given the required notice. In addition, the Trustee shall
have available to it all of the remedies prescribed by the Indenture.
ARTICLE XIII
ASSIGNMENT AND SUBLEASE
Section 13.1. Assignment; Sublease.
(a) The Company may assign, transfer, encumber or dispose of this Lease or any interest
therein or part thereof for any lawful purpose under the Act. With respect to any assignment, the
Company shall comply with the following conditions:
(1) Such assignment shall be in writing, duly executed and acknowledged by the
assignor and in proper form for recording;
(2) Such assignment shall include the entire then unexpired term of this Lease;and
(3) A duplicate original of such assignment shall be delivered to the City and the
Trustee within 10 days after the execution thereof, together with an assumption agreement, duly
executed and acknowledged by the assignee in proper form for recording, by which the assignee
shall assume all of the terms, covenants and conditions of this Lease on the part of the Company
to be performed and observed.
(b) The Company shall have the right to sublet all or any part of the Project to a single entity
for any lawful purpose under the Act. The Company shall, within 10 days after the delivery thereof,
furnish or cause to be furnished to the City and the Trustee a true and correct copy of each such sublease.
Any sublease may provide, at the Company's option, that the City's consent shall not be required in
respect of any further subletting thereunder if such further subletting is for a similar purpose as the
original sublease and is for a purpose permissible under the Act.
(c) Notwithstanding the foregoing, the right of the Company to assign or sublease any
interests in this Lease without the prior written consent of the City shall only apply to assignments made
(A) to any entity whose long-term debt, or the long-term debt of an entity controlled by, under common
control with or controlling such entity has at least a rating in any of the top three long term debt rating
categories by any nationally recognized rating agency; (B) so long as the Company shall remain
secondarily liable, to any such entity; (C) to an entity controlled by or under common control with or
controlling the Company, so long as such entity has a net worth of at least$5,000,000 at the time of such
assignment or sublease; or (D) to an entity that, prior to or concurrently with such assignment or
subletting, becomes the Owner of 100% in principal amount of the Bonds outstanding. Any assignee of
all the rights of the Company shall agree to be bound by the terms of this Lease and any other documents
related to the issuance of the Bonds. Upon such assignment of all the rights of the Company and
agreement by the assignee to be bound by the terms of this Lease and any other documents related to the
Bonds, the Company shall be released from and have no further obligations under this Lease or any
agreement related to the issuance of the Bonds.
-24-
Section 13.2. Assignment of Revenues by City. The City shall assign and pledge any rents,
revenues and receipts receivable under this Lease, to the Trustee pursuant to the Indenture as security for
payment of the principal of, interest and premium, if any, on the Bonds and the Company hereby consents
to such pledge and assignment. The City and the Company recognize that the Trustee is a third party
creditor-beneficiary of this Lease.
Section 13.3. Restrictions on Sale or Encumbrance of Project by City. During this Lease
Term, the City agrees that, except to secure the Bonds to be issued pursuant to the Indenture, it will not
sell, assign, encumber,transfer or convey the Project or any interest therein, but may assign its interest in
and pledge any moneys receivable under this Lease to the Trustee pursuant to the Indenture as security for
payment of the principal of and interest on the Bonds..
ARTICLE XIV
AMENDMENTS,CHANGES AND MODIFICATIONS
Section 14.1. Amendments, Changes and Modifications. Except as otherwise provided in
this Lease or in the Indenture, subsequent to the issuance of Bonds and prior to the payment in full of the
Bonds (or provision for the payment thereof having been made in accordance with the provisions of the
Indenture), this Lease may not be effectively amended, changed, modified, altered or terminated without
the prior written consent of the Trustee,given in accordance with the provisions of the Indenture.
ARTICLE XV
MISCELLANEOUS PROVISIONS
Section 15.1. Notices. All notices, certificates or other communications required or desired to
be given hereunder shall be in writing and shall be governed by Section 1403 of the Indenture.
Section 15.2. City Shall Not Unreasonably Withhold Consents and Approvals. Wherever
in this Lease it is provided that the City shall, may or must give its approval or consent, or execute
supplemental agreements or schedules, the City shall not unreasonably, arbitrarily or unnecessarily
withhold or refuse to give such approvals or consents or refuse to execute such supplemental agreements
or schedules; provided, however, that nothing in this Lease shall be interpreted to affect the City's rights
to approve or deny any additional project or matter unrelated to the Project subject to zoning, building
permit or other regulatory approvals by the City.
Section 15.3. Net Lease. The parties hereto agree (a)that this Lease shall be deemed and
construed to be a net lease, (b)that the payments of Basic Rent are designed to provide the City and the
Trustee funds adequate in amount to pay all principal of and interest accruing on the Bonds as the same
become due and payable, (c)that to the extent that the payments of Basic Rent are not sufficient to
provide the City and the Trustee with funds sufficient for the purposes aforesaid, the Company shall be
obligated to pay,and it does hereby covenant and agree to pay, upon demand therefor,as Additional Rent,
such further sums of money, in cash, as may from time to time be required for such purposes, and(d)that
if after the principal of and interest on the Bonds and all costs incident to the payment of the Bonds
(including the fees and expenses of the City and the Trustee)have been paid in full the Trustee or the City
holds unexpended funds received in accordance with the terms hereof such unexpended funds shall, after
payment therefrom of all sums then due and owing by the Company under the terms of this Lease, and
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except as otherwise provided in this Lease and the Indenture, become the absolute property of and be paid
over forthwith to the Company.
Section 15.4. Limitation on Liability of City. No provision, covenant or agreement contained
in this Lease, the Indenture or the Bonds, or any obligation herein or therein imposed upon the City, or
the breach thereof, shall constitute or give rise to or impose upon the City a pecuniary liability or a charge
upon the general credit or taxing powers of the City or the State of Missouri.
Section 15.5. Governing Law. This Lease shall be construed in accordance with and
governed by the laws of Missouri.
Section 15.6. Binding Effect. This Lease shall be binding upon and shall inure to the benefit
of the City and the Company and their respective successors and assigns.
Section 15.7. Severability. If for any reason any provision of this Lease shall be determined to
be invalid or unenforceable, the validity and enforceability of the other provisions hereof shall not be
affected thereby.
Section 15.8. Electronic Storage. The parties hereto agree that the transaction described
herein may be conducted and related documents may be stored by electronic means. Copies, telecopies,
facsimiles, electronic files and other reproductions of original executed documents shall be deemed to be
authentic and valid counterparts of such original documents for all purposes, including the filing of any
claim, action or suit in the appropriate court of law.
Section 15.9. Execution in Counterparts. This Lease may be executed simultaneously in
several counterparts,each of which shall be deemed to be an original and all of which shall constitute but
one and the same instrument.
Section 15.10 Complete Agreement. The Company and the City understand that oral
agreements or commitments to loan money, extend credit or to forbear from enforcing repayment of a
debt including promises to extend or renew such debt are not enforceable. To protect the Company and
the City from misunderstanding or disappointment, any agreements the Company and the City reach
covering such matters are contained in this Lease and in the Performance Agreement, which are the
complete and exclusive statements of the agreement between the Company and the City, except as the
Company and the City may later agree in writing to modify this Lease and the Performance Agreement.
[Remainder of this page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Lease to be executed in their
respective names by their duly authorized signatories,all as of the date first above written.
CITY OF RIVERSIDE,MISSOURI
By: .
Name: athleen L. Rose
Title: Mayor
[SEAL]
ATTEST:
By:
Name: Robin Kincaid
Title: City Clerk
ACKNOWLEDGMENT
STATE OF MISSOURI )
SS.
COUNTY OF PLATTE )
On this day of June, 2017, before me, the undersigned, a Notary Public, appeared
Kathleen L. Rose and Robin Kincaid,to me personally known, who,being by me duly sworn,did say that
they are the Mayor and City Clerk, respectively, of the CITY OF RIVERSIDE, MISSOURI, and that
the seal affixed to the foregoing instrument is the corporate seal of said City,and that said instrument was
signed and sealed on behalf of said City by authority of its governing body, and said officers
acknowledged said instrument to be executed for the purposes therein stated and as the free act and deed
of said City.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day
and year last above written.
Typed or Printed Name:
Notary Public in and for said State
[SEAL]
My commission expires:
Lease Agreement
Riverside(Premium Waters,Inc.Project) S-1
PREMIUM WATERS,INC.,
a Minnesota corporation
By:
Name: Bernard A.Zarda
Title: Senior Vice President
ACKNOWLEDGMENT
STATE OF MISSOURI )
SS.
COUNTY OF JACKSON )
On this_day of June, 2017, before me appeared Bernard A. Zarda, to me personally known,
who,being by me duly sworn,did say that he is a Senior Vice President of PREMIUM WATERS,INC.,a
Minnesota corporation, and that said instrument was signed in behalf of said corporation by authority of its
Board of Directors; and said individual acknowledged said instrument to be the free act and deed of said
corporation and that said corporation has no corporate seal.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my notarial seal the day
and year last above written.
Typed or Printed Name:
Notary Public in and for said State
[SEAL]
My commission expires:
Lease Agreement
Riverside(Premium Waters,Inc.Project) S-2
EXHIBrr A
DESCRH'TION OF PROJECT SITE
LOT 1,ARGO INNOVATION PARK,a subdivision in Riverside, Platte County,Missouri
A-1
EXHIBIT B
PROJECT
All machinery, equipment and other personal property located or to be located on the Project Site
pursuant to Article IV hereof and paid for in whole or in part from the proceeds of Bonds(either directly
or by reimbursement of the Company), and all replacements thereof and substitutions therefor made
pursuant to this Lease.
B-1
EXHIBIT C
[FORM OF REQUISITION CERTIFICATE]
Requisition No.
Date:
REQUISITION CERTIFICATE
TO: WELLS FARGO BANK,NATIONAL ASSOCIATION, AS TRUSTEE UNDER A TRUST
INDENTURE DATED AS OF JUNE 1, 2017, BETWEEN THE CITY OF RIVERSIDE,
MISSOURI,AND THE TRUSTEE,AND LEASE AGREEMENT DATED AS OF JUNE 1,
2017, BETWEEN THE CITY OF RIVERSIDE, MISSOURI, AND PREMIUM WATERS,
INC.
The undersigned hereby request that a total of$ be paid for Project Costs (as
defined in said Lease) in such amounts, to such payees and for such purposes as set forth on Schedule 1
attached hereto.
We hereby state and certify that: (i)the amounts requested are or were necessary and appropriate
in connection with the acquisition, installation and equipping of the Project, have been properly incurred
and are a proper charge against the Project Fund, and have been paid by or are justly due to the persons
whose names and addresses are stated on Schedule 1, and have not been the basis of any previous
requisition from the Project Fund; (ii) as of this date, except for the amounts referred to above, there are
no, to the best of our knowledge, outstanding statements which are due and payable for labor, wages,
materials, supplies or services in connection with the acquisition, installation and equipping of the Project
which, if unpaid, might become the basis of a vendors', mechanics', laborers' or materialmen's statutory
or similar lien upon the Project or any part thereof; and (iii)no part of the several amounts paid or due as
stated above has been or is being made the basis for the withdrawal of any moneys from the Project Fund
in any previous or pending application for payment made pursuant to said Lease.
PREMIUM WATERS,INC.
By:
Name:
Title:
C-1
SCHEDULE 1 TO REQUISITION CERTIFICATE
Amount Payee and Address Description
C-2
NOTICE TO TAXING JURISDICTIONS
To: Taxing Jursidictions(Distribution List attached)
Re: Notice of Public Hearing—Premium Waters,Inc.Project
On behalf of the City of Riverside, Missouri ("City"), please find enclosed a copy of the
proposed Plan for an Industrial Development Project ("Plan') for Premium Waters, Inc.
("Company"),which also contains a Cost Benefit Analysis on the affected taxing jurisdictions.
It is anticipated that the Company or the lessee of the personal property will make payments in
lieu of taxes for each year that any personal property is owned by the City in an amount equal to
75%of the property taxes that otherwise would have been payable on such personal property.
It is anticipated that the personal property constituting a part of the Project will be exempt from
state and local sales taxes.
The City anticipates considering an Ordinance to approve the Plan at its regular meeting on
Tuesday, June 6, 2017 at 7:00 PM at City Hall located at 2950 N.W. Vivion Road, Riverside,
Missouri. The Plan, if approved, consists of acquiring and installing certain machinery and
equipment for the Company's facility generally located at 4301 NW Mattox Road in the City of
Riverside, Missouri, for industrial development purposes as further described in the attached
Plan.
The City invites all affected taxing districts to attend the meeting on June 6, 2017 and to make
oral comments on the proposed Plan to the City or to provide written comments to the City on the
Plan prior to the meeting. All comments of the taxing districts will be fairly and duly considered
by the City.
A copy of the Plan and Cost Benefit Analysis for the proposed project is enclosed and also will be
on file in the office of the City Clerk and will be available for public inspection during normal
business hours.
Any questions should be directed to Mike Duffy, Director of Community Development for the
City at(816)741-3993.
Dated: May 17,2017
CITY OF RIVERSIDE,MISSOURI
2950 N.W. Vivion Road
Riverside, Missouri 64150
CITY OF RIVERSIDE,MISSOURI
PLAN FOR AN INDUSTRIAL DEVELOPMENT PROJECT
AND
COST-BENEFIT ANALYSIS
FOR
PREMIUM WATERS,INC.
GILMORE BELL
TABLE OF CONTENTS
Page
I. PURPOSE OF THIS PLAN..........................................................................................................1
II. DESCRIPTION OF CHAPTER 100 FINANCINGS..................................................................1
General............................................................................................................................................1
Issuance and Sale of Bonds............................................................................................................1
Property Tax Abatement...............................................................................................................2
III. DESCRIPTION OF THE PARTIES............................................................................................2
Premium Waters,Inc.....................................................................................................................2
Cityof Riverside,Missouri............................................................................................................2
IV. REQUIREMENTS OF THE ACT................................................................................................2
Description of the Project........................._...................................................................................2
Estimate of the Costs of the Project.............................................................................................3
Source of Funds to be Expended for the Project.........................................................................3
Statement of the Terms Upon Which the Project is to be Leased or Otherwise
Disposed of by the City..............................................................................................................3
Affected Taxing Jurisdictions.......................................................................................................3
Current Assessed Valuation..........................................................................................................3
Payments in Lieu of Taxes.............................................................................................................3
Cost-Benefit Analysis and Discussion of Exhibits.......................................................................4
V. ASSUMPTIONS AND BASIS OF PLAN.....................................................................................4
ATTACHMENT A-SUMMARY OF KEY ASSUMPTIONS
EXHIBIT 1 -PROJECT ASSUMPTIONS
EXHIBIT 2- SUMMARY OF COST BENEFIT ANALYSIS
EXHIBIT 3- PROJECTED TAX REVENUES WITHOUT ABATEMENT ON PROJECT EQUIPMENT
EXHIBIT 4- PROJECTED TAX ABATEMENT ON PROJECT EQUIPMENT
EXHIBIT 5-PROJECTED PILOT AMOUNTS ON PROJECT EQUIPMENT
CITY OF RIVERSIDE,MISSOURI
PLAN FOR AN INDUSTRIAL DEVELOPMENT PROJECT
AND
COST-BENEFIT ANALYSIS
FOR
PREMIUM WATERS,INC.
I. PURPOSE OF THIS PLAN
The Board of Aldermen of the City of Riverside,Missouri(the"City")will consider an ordinance
approving this Plan (defined below) and authorizing the issuance by the City of its taxable industrial
development revenue bonds in the aggregate principal amount of not to exceed$9,000,000(the"Bonds"),
to finance the costs of equipping an industrial development project(the "Projece) for Premium Waters,
Inc., a Minnesota corporation (the "Company"), as more fully described and defined herein. The Bonds
will be issued pursuant to the provisions of Sections 100.010 to 100.200 of the Revised Statutes of
Missouri, as amended, and Article VI, Section 27(b) of the Missouri Constitution, as amended
(collectively,the"Act').
Gilmore & Bell, P.C. has prepared this Plan for an Industrial Development Project and Cost-
Benefit Analysis (the "Plan") to satisfy requirements of the Act and to analyze the potential costs and
benefits, including the related tax impact on all affected taxing jurisdictions, of using industrial
development revenue bonds to finance the Project and to facilitate abatement of ad valorem taxes on the
bond-financed property.
H. DESCRIPTION OF CHAPTER 100 FINANCINGS
General. The Act authorizes cities, counties, towns and villages to issue industrial development
bonds to finance the purchase, construction, extension and improvement of warehouses, distribution
facilities, research and development facilities,office industries, agricultural processing industries, service
facilities that provide interstate commerce, industrial plants and other commercial facilities. Bond
proceeds may be used to finance land,buildings,fixtures and machinery.
Issuance and Sale of Bonds. Revenue bonds issued pursuant to the Act do not require voter
approval and are payable solely from revenues received from the project. The municipality issues its
bonds pursuant to a trust indenture entered into between the municipality and a bank or trust company
acting as trustee. In exchange, the benefited company promises under a lease agreement to make rental
payments that are sufficient to pay the principal of and interest on the bonds as they become due. Thus,
the municipality merely acts as a conduit for the financing.
If proceeds of the revenue bonds are to be used to pay the costs, or reimburse the costs, of
purchasing and installing personal property,concurrently with the closing of the bonds,the company will
convey to the municipality title to the personal property included in the project. (The municipality must
be the legal owner of the property while the bonds are outstanding for the property to be eligible for tax
abatement, as further described below.) At the same time, the municipality will lease the personal
property back to the benefited company pursuant to a lease agreement. The lease agreement will require
the company, acting on behalf of the municipality, to use the bond proceeds to pay, or reimburse, the
costs of purchasing and installing the project,as applicable.
GILMOkEBELL
Under the lease agreement, the company typically: (1) will unconditionally agree to make
payments sufficient to pay the principal of and interest on the bonds as they become due;(2)will agree,at
its own expense,to maintain the project, to pay all taxes and assessments with respect to the project, and
to maintain adequate insurance; (3) has the right, at its own expense, to make certain additions,
modifications or improvements to the project; (4) may assign its interests under the lease agreement or
sublease the project while remaining responsible for payments under the lease agreement; (5) will
covenant to maintain its corporate existence during the term of the bond issue; and (6) will agree to
indemnify the municipality for any liability the municipality might incur as a result of its participation in
the transaction.
Property Tax Abatement. Under Article X, Section 6 of the Missouri Constitution and Section
137.100 of the Revised Statutes of Missouri, all property of any political subdivision is exempt from
taxation. In a typical transaction, the municipality holds fee title to the project and leases the project to
the benefited company. Although the Missouri Supreme Court has held that the leasehold interest is
taxable, it is taxable only to the extent that the economic value of the lease is less than the actual market
value of the lease. See Iron County v. State Tax Commission, 437 S.W.2d 665 (Mo. 1968)(en banc)and
St. Louis County v. State Tax Commission,406 S.W.2d 644(Mo. 1966)(en banc). If the rental payments
under the lease agreement equal the actual debt service payments on the bonds, the leasehold interest
should have no "bonus value" and the bond-financed property should be exempt from ad valorem
taxation and personal property taxation so long as the bonds are outstanding.
If the municipality and the company determine that partial tax abatement is desirable, the
company may agree to make "payments in lieu of taxes." The amount of payments in lieu of taxes is
negotiable. The payments in lieu of taxes are payable by December 31 of each year,and are distributed to
the municipality and to each political subdivision in the same manner and in the same proportion as
property taxes would otherwise be distributed under Missouri law.
III. DESCRIPTION OF THE PARTIES
Premium Waters,Inc. The Company is a Minnesota corporation authorized to conduct business
in the State of Missouri, and is a manufacturer of bottled water. The Company's facility in Riverside is
located at 4301 NW Mattox Road.
City of Riverside, Missouri. The City is a fourth-class city and municipal corporation organized
and existing under the laws of the State of Missouri. The City is authorized and empowered pursuant to
the provisions of the Act to purchase, construct, extend and improve certain projects (as defined in the
Act) and to issue industrial development revenue bonds for the purpose of providing funds to pay the
costs of such projects and to lease or otherwise dispose of such projects to private persons or corporations
for manufacturing, commercial, warehousing and industrial development purposes upon such terms and
conditions as the City deems advisable.
IV. REQUIREMENTS OF THE ACT
Description of the Project The project to be financed by the Bonds consists of acquiring and
installing certain machinery and equipment at the Company's manufacturing facility in the City. The
Company's existing manufacturing facility is referred to herein as the"Project Site." The new equipment
and machinery being purchased and installed is referred to herein as the "Project Equipment." The
purchase and installation of the Project Equipment is referred to herein as the"Project."
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GILMOPxEBELL
Estimate of the Costs of the Project The Company expects the investment in Project Equipment
for the Project to be approximately$9,000,000. The investment in Project Equipment is assumed to occur
in 2017 and consist of 7-year MACRS class life property. The Cost-Benefit Analysis is based on this
expected investment. The Bonds will be issued in a principal amount not to exceed$9,000,000.
Source of Funds to be Expended for the Project The sources of funds to be expended for the
Project will be the proceeds of the Bonds in the maximum principal amount of$9,000,000, to be issued
by the City and purchased by the Company, as bondholder, and, if needed, other available funds of the
Company. The Bonds will be payable solely from the revenues derived by the City from the lease or
other disposition of the Project (as further described below). The Bonds will not be an indebtedness or
general obligation, debt or liability of the City or the State of Missouri. The Bonds shall be issued upon
such terms,in such amounts and at such time as shall be satisfactory to the City and the Company.
Statement of the Terms Upon Which the Project is to be Leased or Otherwise Disposed of by
the City. The Company will transfer the Project Equipment to the City pursuant to a bill of sale, subject
to any permitted encumbrances. The City will lease the Project to the Company under a lease agreement
(the "Lease"). The lease payments under the Lease will equal, and will be used to pay, the principal of
and interest on the Bonds. The Company will also make certain payments in lieu of taxes to the City for
distribution to the affected taxing districts,as further described herein. Under the terms of the Lease with
the City,the Company will have the option to purchase the Project at any time. The Lease will terminate
on December 31,2027,unless terminated sooner pursuant to the terms thereof.
Affected Taxing Jurisdictions. The following are the taxing jurisdictions affected by the Project:
• Platte County,Missouri
• City of Riverside,Missouri(does not impose property tax)
• Clay,Platte,Ray Mental Health Tax Levy Board(Tri-County Mental Health
Services,Inc.)
• Platte County Health Department
• Platte County Board of Services for the Developmentally Disabled
• Mid-Continent Public Library
• Senior Citizens Tax Authority
• Park Hill School District R-V
• Parkville Special Road District
• Metropolitan Community College
• State of Missouri Blind Pension Fund
Current Assessed [valuation. The most recent equalized assessed valuation of the personal
property included in the Project is $0 (because no existing personal property is included in the Project).
The estimated equalized assessed valuation of the Project Equipment upon completion of the Project
(2018) is $2,678,432, after deducting for depreciation. These valuations were calculated based upon an
investment of$9,000,000 in Project Equipment, minus depreciation, multiplied by the assessment rate of
33-1/3%for the Project Equipment.
Payments in Lieu of Taxes If this Plan is approved by the Board of Aldermen,the City intends
to issue the Bonds and to extend tax abatement to the Company in the amount of 25% for a period of 10
years. The personal property that comprises the Project Equipment would otherwise be exempt from ad
valorem personal property taxes during the entire tens of abatement, therefore the Company will make a
payment in lieu of taxes ("PILOT") to the City on or before December 31 of each year, commencing
December 31, 2018, in an amount equal to 75% of the ad valorem personal property taxes which would
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GILMOP,EBELL
otherwise be due with respect to the Project Equipment. Such PELOTs would, after reduction for actual
costs of the City for distributing such payments, be distributed among the taxing jurisdictions in
proportion to the amount of taxes which would have been paid in each year had the Project not been
exempt from taxation,pursuant to Section 100.050.3 of the Act.
Cosi-Benefit Analysis and Discussion of Exhibits. In compliance with Section 100.050.2(3) of
the Act, this Plan has been prepared to show the costs and benefits to the City and to other taxing
jurisdictions affected by the tax abatements and exemptions of the Project.The following is a summary of
the exhibits attached to this Plan that show the direct tax impact the Project is expected to have on each
taxing jurisdiction.This Plan does not attempt to quantify the overall economic impact of the Project.
Project Assumptions. Exhibit 1 presents a list of the assumptions related to the
determination of assessed valuations and the tax formulas.
Summary of Cost-Benefit Analysis. Exhibit 2 presents a summary for each affected
taxing district of(1)the total estimated tax revenues that would be generated if the Project did not
receive tax abatement, and(2)the total estimated value of the abatement to the Company. Please
note that the actual value of the Project may differ from the estimated value assumed in this Plan
and may impact the value of the PELOT amounts to be paid by the Company.
Personal Property Tax Revenues. Exhibit 3 provides the projected tax revenues that
would be generated from the Project Equipment without tax abatement. Exhibit 4 provides the
projected value of the personal property tax abatement to the Company. Exhibit 5 provides the
projected PILOT amounts on the Project Equipment.
V. ASSUMPTIONS AND BASIS OF PLAN
In preparing this Plan, we have made some key assumptions to estimate the fiscal impact of the
abatement and exemptions proposed for the Project. See ATTACHMENT A for a summary of these
assumptions.
In addition to the foregoing,in order to complete this Plan,we have generally reviewed and relied
upon information furnished to us by, and have participated in conferences with, representatives of the
City, representatives of the Company, and other persons as we have deemed appropriate. We do not
assume any responsibility for the accuracy,completeness or fairness of any of the information provided to
us and make no representation that we have independently verified the accuracy,completeness or fairness
of such information.
s s s
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GILMOP,EBELL
ATTACHMENT A
SUMMARY OF KEY ASSUMPTIONS
1. The cost of acquiring the Project Equipment is estimated at$9,000,000.
2. The equipping of the Project will occur in 2017 and consist of 7-year MACRS class life
property.
3. The Project will be owned by the City and leased to the Company with an option to
purchase. As long as the Project is owned by the City,it will be exempt from ad valorem taxes.
4. The Project Equipment placed in service in 2017 will be excluded from the calculation of
ad valorem personal property taxes for the period of 2018 through 2027.
5. During the entire term of the Bonds through 2027, the Company will make payments in
lieu of taxes in accordance with that portion of Section IV above in the Plan entitled"Payments in Lieu of
Taxes."
6. The assessed value of the Project Equipment is calculated using the following formula:
(Cost*Depreciation Factor) *Assessment Ratio of 33-1/3%
7. In determining the assessed valuation of the personal property comprising the Project, a
depreciation factor is applied at the end of each year which depends on the recovery period of such
personal property. The Company has represented the personal property comprising the Project has a
seven-year recovery period. The depreciation factors for the Project Equipment are as follows:
Depreciation
Year Factor
0 100.00%
1 89.29
2 70.16
3 55.13
4 42.88
5 30.63
6 18.38
7 10.00
8 10.00
9 10.00
10 10.00
8. The tax rates used in this Plan reflect the rates in effect for the tax year 2016. The tax
rates were held constant through the 2027 tax year.
*
The Cost/Benefit Analysis has been prepared on the basis of factual information and assumptions
provided to Gilmore& Bell,P.C. by, or on behalf of,the City and the Company. This information
is provided in conjunction with our legal representation of the City, as its bond counsel, for this
transaction. It is not intended as financial advice or a financial recommendation to the Company,
the City or any other taxing jurisdiction that may be affected by the Project. Gilmore& Bell,P.C.
is not a financial advisor or a "municipal advisor" as defined in the Securities Exchange Act of
1934,as amended.
A-1
City of Riverside,Missouri
(Premium Waters,Inc.)
COST BENEFIT ANALYSIS
PLAN FOR INDUSTRIAL DEVELOPMENT PROJECT
GILMOkEBELL
Table of Contents
I Project Assumptions 1
II Summary of Cost Benefit Analysis 2
III Projected Tax Revenues Without Abatement on Project Equipment 3
1V Projected Tax Abatement on Project Equipment 4
V Projected PILOT Amount on Project Equipment 5
Ibis information is provided based on the factual information and assumptions provided to Gilmore&Bell,P.C.by a
party to or a representative of a party to the proposed transaction.This information is intended to provide factual
information only and is provided in conjunction with our legal representation.It is not intended as financial advice or a
financial recommendation to any party.Gilmore&Bell,P.C.is not a financial advisor or a"municipal advisor"as
defined in the Securities Exchange Act of 1934,as amended.
City of Riverside,Missouri
(Premium Waters,Inc.)
Cost Benefit Analysis 4117/2017
Exhibit 1
Project Assumptions
• Appraised value of project equipment $ 9,000,000
• Assessed value as a percentage of appraised value of project equipment 33.33%
• Assessed value of project equipment $ 2,999,700
• Terms of abatement(2018-2027) 25%
• Project Equipment is depreciated using the following 7 year recovery period schedule:
Year Recovery Period in Years
3 5 71 10 15 20
0 100.00% 100.00% 100.00%1 100.00% 100.00% 100.00%
1 75.00% 85.00% 89.29%1 92.50% 95.00% 96.25%
2 37.50% 59.50% 70.16% 78.62% 85.50% 89.03%
3 12.50% 41.65% 55.13% 66.83% 76.95% 82.35%
4 5.00% 24.99% 42.88% 56.81% 69.25% 76.18%
5 5.00% 10.00% 30.63% 48.07% 62.32%1 70.46%
6 5.00% 10.00% 18.38% 39.33% 56.09% 65.18%
7 5.00% 10.00% 10.00% 30.59% 50.19% 60.29%
g 5.00% 10.00% 10.00% 21.85% 44.29% 55.77%
9 5.00% 10.00% 10.00%1 15.00% 38.38% 51.31%
10 5.00% 10.00% 10.00%1 15.00% 32.48% 46.85%
11 5.00% 10.00% 10.00%1 15.00% 26.57% 42.38%
12 5.00% 10.000/0 10.00%1 15.00% 20.67% 37.92%
13 5.00% 10.00% 10.00% 15.00010 15.00%1 33.46%
14 5.00% 10.00% 10.00% 15.00% 15.00% 29.00%
15 5.00% 10.000/0 10.00% 15.00% 15.00%1 24.54%
16 5.00% 10.00% 10.00% 15.00% 15.00%1 20.08%
17 5.00% 10.00% 10.00% 15.00% 15.00%1 20.00%
City of Riverside,Missouri
(Premium Waters,Inc)
Cost Benefit Analysis -1- 4/17/2017
Exhibit 2
Summary of Cost Benefit Analysis
Projected Tax
Revenues Projected Projected
Without Tax PILOT
Abatement on Abatement Amounts on
Project on Project Project
Tax Distribution Tax Rate Equipment Equipment Equipment
State of Missouri Blind Pension Fund 0.0300 $ 3,118 $ 779 $ 2,338
Platte County,Missouri 0.0600 6,236 1,559 4,677
Clay,Platte,Ray Mental Health Tax Levy Board 0.1000 10,393 2,598 7,795
Platte County Board of Services for the Developmentally Disabled 0.1300 13,511 3,378 10,133
Mid-Continent Public Library 0.3153 32,769 8,192 24,577
Senior Citizens Tax Authority 0.0500 5,197 1,299 3,897
Platte County Health Department 0.0800 8,314 2,079 6,236
Park Hill School District R-V 5.5290 574,632 143,658 430,974
Parkville Special Road District 0.2661 27,656 6,914 20,742
Metropolitan Community College 0.2339 24,309 6,077 18,232
6.7943 $ 706,136 $ 176,534 $ 529,602
City of Riverside,Missouri
(Premium Waters,Inc.)
Cost Benefit Analysis -2- 411712017
Exhibk3
Projected Tex Revenues Without Abatement
on Project Equipment
Estimated Assessed Valu:ofProjeot Equipment $2,678,432 $2,104,590 $1,653,735 $1,286,271 $918,808 $551,345 $299,970 $299,970 5299970 5299970
Tax Rate
Taxing Jurisdiction per 5100 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total
State of Missouri Blind Pension Fund 0.0300 $ 804 $ 631 S 4% S 386 $ 276 S 165 S 90 $ 90 S 90 $ 90 $ 3,118
Platte County,Missouri 0.0600 1,607 1,263 992 772 $51 331 180 180 180 180 6,236
Clay,Platte,Ray Mental Heahh Tax Levy Board 0.1000 2,678 2,105 1,654 1,286 919 551 300 300 300 300 109393
Plink County Board ofSesvices for the Developmentally Disabled 0.1300 3,482 2,736 2,150 1,672 1,194 717 390 390 390 390 13,511
Mid-Cantmm Public Library 0.3153 8,445 6,636 5,214 4,056 2,897 1,738 946 946 946 946 32,769
Senior Ciumeoa Tax Authority 0.0500 1,339 1,052 827 643 459 276 150 150 150 150 5,197
Plane County Health Department 0.0800 2,143 1,684 1,323 1,029 735 441 240 240 240 740 8,314
Pads Hill School District R-V 5.5290 148,091 116,363 91,435 71,118 50,801 30,484 16,585 16,585 16,585 16,585 574,632
Pativige Special Road District 0.2661 7,127 5,600 49401 3,423 2,445 1,467 798 798 798 798 27,656
Metropolitan Community College 02339 6,265 4,923 3,868 3,009 2,149 1,290 702 702 702 702 24,309
6.7943 $ 181,981 $ 142,992 S 112.360 $ 87,393 S 62,427 S 37,460 S 20.381 S 20,381 $ 20,381 S 20,381 S 706,136
PenoW Property Assessed Value 7-Year
2018 2019 2020 2021 2022 2023 2024 2025 2026 2027
9,000,000 2,678,432 2,104,590 1,653,735 1,286,271 918,808 551,345 299,970 299,970 299,970 299,970
9,100,000 2,678,432 2,104,590 1,653,735 1,286271 918,808 551.345 299,970 299,970 299,970 299,970
City ofRisersW Mivonf
(Premnium waters,Ina)
CessRenefuAndysis -3- 4/17/1017
Exhibit 4
Projected Tax Abatement
on Project Equipment
Estimated Assessed Value ofPmject Equipment $2,678,432 $2,104,590 $1,653,735 $1,286,271 1918,808 $551,345 $299,970 $299,970 $299,970 $299,970
Abatement Percentage 25% 25% 25% 25% 25% 25% 25% 25% 25% 25%
u
Taxing Jurudwtmet pm 5100 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 Total
State of Missouri Blind Pension Fund 0.0300 S 201 $ 158 $ 124 $ 96 $ 69 $ 41 S 22 S 22 S 22 $ 22 S 779
Phate County,Missouri 0.0600 402 316 248 193 138 83 45 45 45 45 1,559
Clay,Platte,Ray Mental Heahh Tu Levy Board 0.1000 670 526 413 322 230 138 75 75 75 75 2,598
Platte County Bound of Services for the Developmentally Disabled 0.1300 870 684 537 418 299 179 97 97 97 97 3,378
Mid-Comment Public L&my 0.3153 2,111 1,659 1,304 1,014 724 435 236 236 236 236 8,192
Senior Citvms Tu Ambnity 0.0500 335 263 207 161 115 69 37 37 37 37 1,299
Platte County Heahh Departmem 0.0800 536 421 331 257 - 184 110 60 60 60 60 2,079
Park Hill School District R-V 5.5290 37,023 29,091 22,859 17,779 12,700 7,621 4,146 4,146 4,146 4,146 143,658
Patkville Special Road District 02661 1,782 1,400 1,100 856 611 367 200 200 200 200 6,914
Metropolitan Cm®mtiry College 0.2339 1,566 1,231 967 752 537 322 175 175 175 175 6,077
6.7943 S 45,495 $ 35,748 S 28,090 $ 21,848 S 15,607 $ 9,365 S 5,095 S 5,095 S 5,095 $ 5,095 S 176,534
City ofRirarsida,Missouri
(Premium Wales,)w)
Cort Benj&Analysis -4- 4,77/2017
Exhibit 5
Projeeted PILOT Amounts
on Project Equipment
Est®eted Assessed Value of Project Equipment $2,678,432 S 2,104,590 S 1,653,735 S1,286,271 $918,808 $551,345 S 299,970 $299,970 S 299,970 S 299,970
PILOT Poymemt 75% 75% 75% 75% 75% 75% 75% 75% 75% 75%
Tu Raft
Tracing Jurisdiction Per$100 2018 2019 2020 2021 2022 2023 2024 2025 20M 2027 Total
State of Miasom Blind Pension Fund 0.0300 $ 603 $ 474 S 372 S 289 $ 207 S 124 S 67 S 67 $ 67 S 67 S 2,338
Platte County,Missouri 0.0600 1,205 947 744 579 413 248 135 135 135 135 4,677
Clay,Platte,Ray Mental Heahh Tax Levy Board 0.1000 2,009 1,578 1,240 965 689 414 225 225 225 225 7,795
Plane County Board of Serviccs for the Developmentally Msebled 0.1300 2,611 2,052 1,612 1,254 896 538 292 292 292 292 10,133
MidCoatircm Public Library 0.3153 6,334 4,977 3,911 3,042 2,173 1,304 709 709 709 709 24,577
Senior Citizens Tax Authority 0.0500 1,004 789 620 482 345 207 112 112 112 112 3,897
Platte County Health Departokm 0.0800 1,607 1,263 992 772 551 331 180 180 180 180 6,236
Petr Hill School District R-V 5.5290 111,068 87,272 68,576 53,338 38,101 22,863 12,439 12,439 12,439 12,439 430,974
Parkvgk Spacial Road Di rict 02661 5,345 4,200 3,300 2,567 1,834 1,100 599 599 599 599 20,742
Mehopolibn Community College 0.2339 4,699 3,692 2,901 2,256 1,612 967 526 526 526 526 18,232
6.7943 $ 136,486 S 107,244 S 84,270 S 65.545 S 46,820 $ 28,095 S 15,286 S 15,286 S 15,286 S 15,286 5529,602
Cky ofJbverald4 Mlasoad
(Premium Waters,INC)
Costl1mok4ndys7s -5- 4//7/2017