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120351 2 RESOLUTION NO. 12,035 3 A RESOLUTION TO AUTHORIZE THE ENTRY INTO AN 4 AGREEMENT TO ISSUE BONDS FOR THE PURPOSE OF ASSISTING 5 IN THE FINANCING OF INDUSTRIAL FACILITIES WITHIN OR 6 NEAR THE CITY OF LITTLE ROCK, ARKANSAS, TO BE LEASED TO 7 RING CONTAINER TECHNOLOGIES, INC. PURSUANT TO THE 8 AUTHORITY OF THE LAWS OF THE STATE OF ARKANSAS, 9 INCLUDING PARTICULARLY AMENDMENT 65 TO THE ARKANSAS 10 CONSTITUTION AND THE MUNICIPALITIES AND COUNTIES 11 INDUSTRIAL DEVELOPMENT REVENUE BOND LAW; AND FOR 12 OTHER PURPOSES. 13 14 WHEREAS, the City of Little Rock, Arkansas, is authorized under the provisions 15 of Amendment 65 to the Arkansas Constitution and the Municipalities and Counties 16 Industrial Development Revenue Bond Law, Arkansas Code Annotated §§ 14- 164 -201 17 to -224 (the "Act "), to own, acquire, construct, equip, and lease facilities to secure and 18 develop industry and to assist in the financing thereof by the issuance of bonds payable 19 from the revenues derived from such facilities; and 20 WHEREAS, Ring Container Technologies, Inc. (the "Company "), has evidenced 21 its interest in acquiring, constructing, and equipping an industrial facility within or near 22 the City if the permanent financing can be provided through the issuance of bonds 23 under the authority of the Act; and 24 WHEREAS, the City desires to assist the Company in order to secure and 25 develop industry within or near the City, and to aid in the financing thereof under the 26 provisions of the Act; and 27 WHEREAS, it is desirable that the City enter into an Agreement to Issue Bonds 28 for such purpose. 29 NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF 3o THE CITY OF LITTLE ROCK, ARKANSAS: [Page 1 of 7] 1 Section 1. The Mayor and the City Clerk of the City are hereby authorized to 2 enter into an Agreement to Issue Bonds in substantially the form and substance as 3 follows: 4 AGREEMENT TO ISSUE BONDS 5 THIS AGREEMENT is made as of July , 2005, by and between the City of 6 Little Rock, Arkansas, a city of the first class under the laws of the State of Arkansas (the 7 "City "), and Ring Container Technologies, Inc. (the "Company "), for the purpose of 8 carrying out the purposes set forth in the Municipalities and Counties Industrial 9 Development Revenue Bond Law, Arkansas Code Annotated §§ 14- 164 -201 to -224 (the 10 "Act "). 11 WITNESSETH: 12 WHEREAS, the City is authorized by Amendment 65 to the Arkansas 13 Constitution and the Act to own, acquire, construct, reconstruct, extend, equip, 14 improve, operate, maintain, sell, lease, or contract concerning, or otherwise deal in or 15 dispose of any land, buildings, or facilities of any and every nature that can be used in 16 securing or developing industry within or near or near the City; and 17 WHEREAS, the City has determined that such purposes may be served by 18 cooperation with the Company in the acquisition, construction, and equipping of an 19 industrial facility within or near the City, consisting of acquisition of land, construction 20 of buildings and improvements, and acquisition and installation of equipment for the 21 manufacture of jars for food products (the "Project "); and 22 WHEREAS, the City and the Company desire to cooperate in the acquisition, 23 constructing, and equipping of the Project and to have the costs of the Project financed 24 from the proceeds of revenue bonds of the City (the 'Bonds ") to be issued pursuant to 25 the Act in an aggregate principal amount now estimated not to exceed $17,000,000 26 (excluding any bonds issued to refund the Bonds); and 27 WHEREAS, the City and the Company intend to enter into a Lease Agreement 28 (the "Lease ") of the real and personal property constituting the Project, which 29 contemplates that the Project will be leased to the Company, with an option to purchase 30 for a nominal price, and the rental payments therefor together with other moneys 31 available shall be sufficient to pay debt service on the Bonds and all related costs; [PAGE 2 OF 7] 1 NOW, THEREFORE, in consideration of the premises and other good and 2 valuable consideration under the mutual benefits, covenants, and agreements herein 3 expressed, the City and the Company agree as follows: 4 1. Proceedings. All proceedings in connection with the issuance of the Bonds 5 shall be consistent with the requirements of the Act. All references contained herein to 6 the issuance of the Bonds shall be subject to compliance with the formalities of the Act 7 when the facts required to do so are determined. 8 2. Acquisition, Construction, and Equipping. The City and the Company will 9 cooperate in causing to be commenced and continued the required acquisition, 10 construction, and equipping of the Project, and the Company may provide, or cause to 11 be provided, the necessary interim financing to permit work on the Project to 12 commence and continue expeditiously pending the issuance of Bonds. Not later than 13 the date of issuance of the Bonds, the Company will convey and transfer or cause to be 14 conveyed and transferred to the City, for an amount approximately equal to that then 15 expended by the Company (including at the Company's option any costs of interim 16 financing), the Project or portions thereof theretofore acquired, constructed, and 17 equipped. There shall also be conveyed to the City any easements and rights -of -way 18 necessary to permit construction, equipping, installation, operation, and maintenance of 19 the Project. 20 3. Lease. The City and the Company shall enter into the Lease under which the 21 Company will lease the Project, with an option to purchase for a nominal price, from the 22 City and will agree to make rental payments sufficient to pay the principal of and 23 premium, if any, and interest on the Bonds, together with all charges of any Trustee and 24 any Paying Agent for the Bonds. 25 4. Sale of Bonds, Security. The City will take such steps as are necessary to issue, 26 sell, and deliver the Bonds, pursuant to the terms of the Act, for the purposes of 27 financing the costs of the Project, in each case only upon receipt of the written 28 designation by the Company of the purchaser(s) or underwriter(s) thereof, such Bonds 29 to be in such principal amount, to mature in such amount and times, to bear interest at 30 such rate or rates, to be payable on such dates, and to have such optional and 31 mandatory redemption features and prices as are determined by the City and approved [PAGE 3 OF 7] 1 in writing by the Company. The City further agrees that it will enter into the Lease and 2 a trust indenture with a bank or trust company, qualified to exercise trust powers where 3 necessary, for the purpose of providing rental payments sufficient, with other amounts 4 available from the Company or directly or indirectly from the proceeds of the Bonds, to 5 pay the principal of and premium, if any, and interest on the Bonds as they become due 6 together with the charges of any Trustee and Paying Agent for the Bonds, and pledging 7 and otherwise securing the payment of such rental payments for the benefit of the 8 holder(s) of the Bonds. The Lease, the trust indenture, other related documents, and the 9 Bonds shall contain such terms and conditions as are agreed upon by the City and the 10 Company. The City will cooperate in consummating the transactions so contemplated 11 and in attempting to realize the desire of the parties hereto that the interest on all Bonds 12 be excluded form gross income for purposes of Federal income taxation. 13 5. Bonds to be Special Obligations. The City shall have no financial 14 responsibility with respect to the Project, the Bonds, or the costs associated with either, 15 and the Bonds shall be special obligations of the City and shall never constitute a 16 general obligation, indebtedness, or pledge of the credit of the City within the meaning 17 of any constitutional or statutory provision and shall never be paid in whole or in part 18 out of any funds raised or to be raised by taxation or any other revenues or other funds 19 of the City except those (including unexpended Bond proceeds) derived from or in 20 connection with the sale or lease of the Project as provided for herein. 21 6. Conditions of Issuance. The Bonds may be issued either at one time or in 22 several series from time to time, in such aggregate principal amount or amounts as the 23 Company shall request in writing; provided, however, that all conditions of the Act 24 shall have been met. It is further agreed that the proceeds of the Bonds shall not be 25 invested so as to constitute any of the Bonds as arbitrage bonds within the meaning of 26 section 148 of the Internal Revenue Code of 1986, as amended (the "Code), and 27 applicable regulations promulgated pursuant thereto. 28 7. Costs to be Financed. The costs of the Project may include any costs 29 permissible under the Act, including but not limited to reasonable and necessary costs, 30 expenses, and fees incurred by the City in connection with the issuance of the Bonds or 31 in connection with the Project, such as the administrative fees of the City required in [PAGE 4 OF 7] 1 connection with the issuance of the Bonds; fees and out -of- pocket expenses of Rose Law 2 Firm, a Professional Association, as bond counsel; fees and expenses of any trustee; fees 3 and expenses, if any, required in connection with the underwriting or placement of the 4 Bonds; recording costs; rating agency's fees, if any; and printing costs. The City will 5 upon request provide or cause to be provided any data or information which may be 6 reasonably required to verify any of the costs, expenses, and fees enumerated above. 7 8. Termination. In the event that the Bonds shall not be sold within three years 8 from the date hereof, this Agreement shall automatically terminate unless the parties 9 hereto shall agree in writing to its extension for a further period of time specified in 10 such writing, which agreement on the part of the City shall not be unreasonably 11 withheld. The Company may unilaterally terminate this Agreement without liability to 12 the City (except for any amounts due and owing by the Company to the City arising out 13 of the transactions occurring on or before the time of such termination, which shall be 14 promptly paid by the Company to the City) by giving notice by ordinary mail, postage 15 prepaid, to the City specifying therein the date of termination, which may be the date of 16 the notice. 17 9. Company's Expectations. The Company hereby declares its official intent 18 pursuant to United States Treasury Regulation § 1.150 -2 to reimburse itself for original 19 expenditures made in planning, designing, acquiring, constructing, and equipping the 20 Project between the date that is 60 days prior to the date of this Resolution and the date 21 the Bonds are issued, plus a de minimis amount and preliminary expenditures, as such 22 terms are defined in § 1.150 -2(f) of the Federal Income Tax Regulations. 23 10. Protection to the City. The Company shall pay all of the City's costs and 24 expenses reasonably and necessarily incurred in connection with this Agreement or any 25 other related document or instrument. The Company will at all times indemnify and 26 hold harmless the City against any and all losses, costs, damages, expenses, and 27 liabilities of whatsoever nature directly or indirectly resulting from, arising out of, or 28 related to matters in connection with this Agreement. 29 11. Ad Valorem Taxation Exemption. The City and the Company recognize that 30 under the Arkansas Constitution and decisions of the Supreme Court of Arkansas and 31 in accordance with Arkansas Code Annotated §§ 14- 164 -701 to -703, the Project will be [PAGE 5 OF 7] 1 exempt from ad valorem taxation. The City agrees that the Company shall be required 2 to enter into an Agreement for Payments in Lieu of Taxes ( "PILOT Agreement ") with 3 the City for payments in lieu of a portion of the ad valorem taxes that would otherwise 4 be levied by local public bodies with taxing authority. 5 12. Purpose and Effect. The Bonds are to be issued, sold, and delivered under the 6 authority of the Act and all related actions and documents shall be in conformity 7 therewith. The City intends this Agreement to be the expression of its present intent, 8 pursuant to the terms hereof, to issue the Bonds up to $17,000,000 aggregate principal 9 amount outstanding at any one time, and also to issue additional Bonds if the Project 10 costs exceed such amount, and to expend the Bond proceeds to defray the costs of the 11 Project. The City considers this Agreement to be its declaration of intent to reimburse an 12 original expenditure with proceeds of an obligations for all purposes of § 1.150 -2(f) of 13 the Federal Income Tax Regulations. 14 13. Assignment. The Company may assign this Agreement in whole or in part to 15 an affiliate of the Company without the prior written consent of the City and may 16 assign this Agreement in whole or in part to an entity which is not an affiliate of the 17 Company with the prior written consent of the City, which consent shall not be 18 unreasonably withheld. Notwithstanding the foregoing, no assignment and no dealings 19 or transactions between the City and any assignee shall relieve the Company of any of 20 its obligations under this Agreement. 21 IN WITNESS WHEREOF, the City of Little Rock, Arkansas, acting pursuant to a 22 Resolution of its Board of Directors, has caused its name to be hereunto subscribed by 23 its Mayor and the Company has caused its corporate name to be subscribed hereto by 24 its duly authorized officer, all as of the year and date first above written. 25 CITY OF LITTLE ROCK, ARKANSAS 26 By: 27 Mayor 28 RING CONTAINER TECHNOLOGIES, INC. 29 By: 30 Title: [PAGE 6 OF 7] 1 Section 2. Severability. In the event any title, section, paragraph, item, sentence, 2 clause, phrase, or word of this resolution is declared or adjudged to be invalid or 3 unconstitutional, such declaration or adjudication shall not affect the remaining 4 portions of this resolution, which shall remain in full force and effect as if the portion so 5 declared or adjudged invalid or unconstitutional was not originally a part of this 6 resolution. 7 Section 3. Repealer. All ordinances or resolutions of the City in conflict herewith 8 are hereby repealed to the extent of such conflict. 9 10 ADOPTED: July 12, 2005 11 12 ATTEST: APPROVED: 13 14 15 Nan y Wood ity Clerk Barbara Graves, Vice Mayor 16 17 APPROVED AS TO LEGAL FORM: 18 19 20 Thomas M. Carpente , City Attorney 21 // 22 // 23 24 // 25 26 // 27 // 28 29 30 // 31 // 32 // [PAGE 7 OF 7]