6971329
RESOLUTION NO. 6,971
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
CITY OF LITTLE ROCK AUTHORIZING THE ENTRY
INTO AN AGREEMENT TO ISSUE BONDS FOR THE
PURPOSE OF SECURING AND DEVELOPING
INDUSTRY WITHIN OR NEAR THE CITY
WHEREAS, the City of Little Rock, Arkansas, is au-
thorized under the provisions of Act No. 9 of the Special
Session of the General Assembly of the State of Arkansas for
the year 1960, as amended ( "Act 9 "), to issue bonds to
assist in the securing and developing of industry; and
WHEREAS, Conestoga Wood Specialties, Inc. ( "Conestoga ")
has evidenced its interest in expanding its industrial
operations within the City of Little Rock if the costs of
the facility can be provided through the issuance of bonds
under the authority of said Act; and
WHEREAS, the City of Little Rock desires to assist
Conestoga to expand its operations in the City of Little
Rock and to aid in the financing thereof under the provisions
of said Act 9; and
WHEREAS, it is desirable that the City of Little Rock
enter into an Agreement to Issue Bonds for such purpose;
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS
OF THE CITY OF LITTLE ROCK, ARKANSAS, that:
1. The Mayor and the City Clerk of the City of
Little Rock, Arkansas, be authorized to enter into an
Agreement to Issue Bonds in substantially the form and
j substance as follows:
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AGREEMENT TO ISSUE BONDS
THIS AGREEMENT is made as of , 19
by and among the City of Little Rock, Arkansas, a municipal
corporation under the laws of the State of Arkansas (the
"City "), and Conestoga Wood Specialties, Inc., a Pennsylvania
corporation (together with any successor or assignee to its
rights and duties hereunder, "Conestoga "), for the purpose
of carrying out the purposes set forth in Act No. 9 of the
Special Session of the General Assembly of the State of
Arkansas for the year 1960, as amended ( "Act 9 ").
W I T N E S S E T H:
WHEREAS, the City is authorized by the Act to own,
acquire, construct, equip, operate, maintain, sell, lease
and contract concerning or otherwise deal in or dispose of
any land, buildings or facilities of any and every nature
whatever that can be used in securing or developing industry
within the City; and
WHEREAS, Conestoga currently conducts industrial opera-
tions in the City through the use of manufacturing and other
facilities and it proposes to undertake an expansion program
in the City, which will consist of the acquisition and
construction of land, buildings, and machinery, equipment
and facilities (the "Project ").
WHEREAS, the City has determined that the acquisition,
construction and equipping of the Project within the City
will secure and develop industry and make available employ-
ment and payrolls, in furtherance of the public purposes of
Act 9; and
WHEREAS, the City and Conestoga desire to cooperate in
the acquisition, construction and equipping of the Project
and to have the costs of the Project financed from the
proceeds of revenue bonds of the City (the "Bonds ") to be
issued pursuant to the Act in an aggregate principal amount
not to exceed $2,500,000 (excluding any bonds issued to
refund the Bonds); and
WHEREAS, the City and Conestoga contemplate that the
Project will be leased to Conestoga, with an option to
purchase, and the rental payments therefor together with
other moneys available shall be sufficient to pay debt
service on the Bonds and all related costs;
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NOW, THEREFORE, in consideration of the premises and
other good and valuable consideration under the mutual
benefits, covenants and agreements herein expressed, the
City and Conestoga agree as follows:
1. Sale of Bonds, Security. The City hereby agrees
that, when requested by Conestoga, it will take such steps
as are necessary to issue, sell and deliver, pursuant to the
terms of Act 9, the Bonds for the purposes of financing the
costs of the Project, the purchaser(s) or underwriter(s)
thereof to be designated by Conestoga, the Bonds to be in
such principal amount, to mature in such amount and times,
to bear interest at such rate or rates and to be payable on
such dates and to have such optional and mandatory redemption
features and prices as may be requested by Conestoga. The
City agrees that it will enter into the lease, and if required,
a mortgage or an indenture of trust with a bank or trust
company, qualified to exercise trust powers where necessary,
for the purpose of providing rental payments sufficient,
with other amounts available from Conestoga or directly or
indirectly from the proceeds of the Bonds, to pay the principal
of, premium if any, and interest on the Bonds as they become
due together with the charges of any Trustee and /or any
Paying Agent for the Bonds, and pledging and /or otherwise
securing the payment of such rental payments for the benefit
of the holder(s) of the Bonds. The City further agrees that
it will, at the proper time when requested by Conestoga,
adopt, or cause to be adopted, such proceedings and authorize
the execution of such documents as may be necessary and
advisable for the authorization, sale and issuance of the
Bonds, the acquiring, constructing and equipping of the
Project, and for the leasing to Conestoga, all in conformity
with Act 9 and other applicable federal and state laws upon
terms and conditions mutually satisfactory to the City and
Conestoga. The lease, the indenture and other related
documents, and the Bonds shall contain such terms and condi-
tions as are agreed upon by the City and Conestoga. The
City will cooperate in consummating the transaction so
contemplated and in attempting to realize the desire of the
parties hereto that the interest on all Bonds be exempt from
Federal income taxation.
2. Bonds to be Special Obligations. The City shall
have no financial responsibility with respect to the Project,
the Bonds or the costs associated with either, and the Bonds
shall be special obligations of the City and shall never
donstitute a general obligation, indebtedness or pledge of
the credit of the City within the meaning of any constitutional
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or statutory provision and shall never be paid in whole or
in part out of any funds raised or to be raised by taxation
or any other revenues or other funds of the City except
those (including unexpended Bond proceeds) derived from or
in connection with the sale or lease of the Project as
provided for herein.
3. Lease. The City shall enter into a lease, or
leases, under which Conestoga will lease, with an option to
purchase, from the City the Project or portions thereof and
will agree to make rental payments sufficient to pay the
principal of, premium, if any, and interest on the Bonds,
together with all charges of any Trustee and /or any Paying
Agent for the Bonds.
4. Conditions of Issuance. The Bonds may be issued
either at one time or in several series and /or issues from
time to time, in such aggregate principal amount or amounts
as Conestoga shall request in writing; provided, however,
that all conditions of the Act shall have been met. It is
further agreed that the proceeds of the Bonds shall not be
invested so as to constitute any of the Bonds as arbitrage
bonds within the meaning of Section 103(c) of the Internal
Revenue Code of 1954, as amended, and applicable regulations
promulgated pursuant thereto.
5. Costs to be Financed. The costs of the Project
may include any costs permissible under the Act, including
but not limited to reasonable and necessary costs, expenses
and fees incurred by the City in connection with the issuance
of the Bonds or in connection with the Project, such as
out -of- pocket expenses incurred by any employee of the City;
fees and out -of- pocket expenses of counsel for the City,
fees of the firm of Mitchell, Williams, Selig, Jackson &
Tucker, as Bond Counsel, and any trustee; fees and expenses
of the purchaser(s) or underwriter(s) of the proposed Bonds;
recording costs, and printing costs. The City will upon
request provide or cause to be provided any data or information
which may be reasonably required to verify any of the costs,
expenses and fees enumerated above.
6. Construction. The City and Conestoga will cooperate
in causing to be commenced and continued any required ac-
quisition, construction, reconstruction, extension, equipping
and improvement of the Project, and Conestoga may provide,
or cause to be provided, the necessary interim financing to
permit such work on the Project to commence and continue ex-
peditiously pending the issuance of interim and /or permanent
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bonds. Not later than the time of issuance of the Bonds for
any portion of the Project, Conestoga will convey and transfer
or cause to be conveyed and transferred to the City, for an
amount approximately equal to that then extended by the
Company for the Project or portions thereof which are financed
by the Bonds then issued (including at the Company's option,
any costs of interim financing), the Project or portions
thereof to be then financed. There shall also be conveyed
to the City any easements and rights -of -way necessary to
permit acquisition, construction, equipping, operation and
maintenance of the Project or such portion.
7. Proceedings. All proceedings in connection with
the issuance of the Bonds shall be consistent with the
requirements of Act 9, including notice to all state agencies,
and the publication of notice as required by Act No. 1239 of
the Extended Session of the General Assembly for the State
of Arkansas for the year 1976. All references contained
herein to the issuance of Bonds shall be subject to compliance
with the formalities of said Act 1239 when the facts required
to do so are determined.
8. Termination. This Agreement shall continue in
full force and effect until the Project and its financing by
Bonds, as herein specified, is accomplished. Conestoga may
unilaterally terminate this Agreement without liability to
the City (except for any amounts due and owing by Conestoga
to the City arising out of the transactions occurring on or
before the time of such termination, which shall be promptly
paid by Conestoga to the City) by giving notice by ordinary
mail, postage prepaid, to the City specifying therein the
date of termination which may be the date of the notice.
9. Protection to the City. Conestoga shall pay all
of the City's costs and expenses reasonably and necessarily
incurred in connection with this Agreement or any other
related document or instrument. Conestoga will at all times
indemnify and hold harmless the City against any and all
losses, costs, damages, expenses and liabilities of whatso-
ever nature directly or indirectly resulting from, arising
out of, or related to matters in connection with this Agree-
ment.
10. Payments in Lieu of Taxes. Conestoga shall make
payments in lieu of ad valorem taxes in accordance with the
policy of the City. Such payments shall be made under and
pursuant to an appropriate agreement between the City and
Conestoga to be entered into prior to the issuance of the
Bonds.
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11. Pur a Effect. The Bonds are to be issued,
sold and delivered under the authority of Act 9 and all
related actions and documents shall be in conformity there-
with. The City intends this Agreement to be its official
binding commitment, pursuant to the terms hereof, to issue
the Bonds up to $2,500,000 in aggregate principal amount
outstanding at any one time, and to expend the Bond proceeds
to defray the costs of the Project. The City considers this
Agreement and the Resolution of the Board of Directors
authorizing it to be official action toward the issuance of
industrial development bonds for all purposes of the Federal
Income Tax Regulations in that the Resolution has been
adopted and this Agreement has been executed prior to the
commencement of the acquisition or construction of the
Project.
12. Assignment. Conestoga shall have the right to
assign the Agreement and its rights, privileges and duties
hereunder to any subsidiary thereof, or with the consent of
the City to any other corporation, provided that such assignee
expressly assumes the obligations of Conestoga hereunder.
ATTEST:
City Clerk
CITY OF LITTLE ROCK, ARKANSAS
0
Mayor
CONESTOGA WOOD SPECIALTIES, INC.
ATTEST:
By
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2. The law firm of Mitchell, Williams, Selig,
Jackson & Tucker, Little Rock, Arkansas, is appointed Bond
Counsel for the bond issue described in the foregoing agree-
ment.
3. This Resolution shall be in full force and effect
from and after its adoption.
ADOPTED this 5th day of April, 1983.
ATTEST:
Ci clerk e� ech
335