6903.MAIN r M M M M M M M M M M M M1
RESOLUTION NO. 6,903
A RESOLUTION AUTHORIZING THE APPROVAL OF A
PROPOSAL BY CONESTOGA WOOD SPECIALTIES,
INC., TO ASSUME THE OBLIGATIONS AND TO
SUCCEED TO THE RIGHTS OF WRAPE FOREST
INDUSTRIES, INC., UNDER THE CITY OF LITTLE
ROCK, ARKANSAS INDUSTRIAL DEVELOPMENT
REVENUE BONDS ( WRAPE FOREST INDUSTRIES
PROJECT) DATED JANUARY 11 1980; AUTHORIZING
AND DIRECTING THE MAYOR AND CITY CLERK TO
EXECUTE AND DELIVER THE PROPOSAL ON BEHALF
OF THE CITY; AUTHORIZING AND DIRECTING THE
MAYOR AND CITY CLERK TO EXECUTE AND DELIVER
SUCH DOCUMENTS AS ARE NECESSARY TO PERMIT
THE ASSUMPTION BY CONESTOGA WOOD
SPECIALTIES, INC., INCLUDING, BUT NOT
LIMITED TO, A LEASE AND AGREEMENT AND
GUARANTY AGREEMENT; AND PRESCRIBING OTHER
MATTERS RELATING THERETO.
WHEREAS, the City of Little Rock, Arkansas (the "City"),
issued its Industrial Development Revenue Bonds under the
provisions of Act No. 9 of the First Extraordinary Session of
the Sixty- Second General Assembly of the State of Arkansas,
approved January
21, 1960,
as amended, in the
principal amount
of $1,000,000,
designated
City of Little
Rock, Arkansas
Industrial Development Revenue Bonds (Wrape Forest Industries
Project) dated January 1, 1980 (the "Bonds "); and
WHEREAS, pursuant to the provisions of Ordinance No.
13,763 of the Ordinances of the City approved December 4, 1979
(the "Authorizing Ordinance ") , the City, as lessor and Wrape
Forest Industries, Inc., as lessee, ( "Wrape "), entered into a
certain lease and agreement dated as of January 1, 1980 (the
"Lease ") by which the City leased to Wrape certain lands,
buildings, improvements, machinery, equipment and facilities
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225
located within the City (the "Project "); and
WHEREAS, under the terms of the Lease, Wrape agreed to pay
rent in an amount sufficient to pay the principal of, premium,
if any, and interest on the Bonds; and
WHEREAS, as an inducement to the City to issue the Bonds,
and as an inducement for the Arkansas Industrial Development
Commission ( "AIDC ") to issue its Guaranty of Payment of the
Bonds, the obligations of Wrape under the Lease and for the
payment of principal of, premium, if any, and interest on the
Bonds were guaranteed by Wrape Forest Industries, Inc., A. J.
Wrape, Jr., J. V. Wrape and W. R. Wrape, II (the "Guarantors ").
The corporate and individual guaranties were evidenced by a
guaranty agreement by and among the City, Worthen Bank & Trust
Company, N.A., as Trustee and the Guarantors (the "Wrape
Guaranty ") ; and
WHEREAS, on February 26, 1982, Wrape filed its voluntary
petition for reorganization pursuant to Chapter 11 of the
United States Bankruptcy Code, however, Wrape was unsuccessful
in its efforts to reorganize its operations and the Chapter 11
proceeding was subsequently converted to a Chapter 7
liquidation proceeding; and
WHEREAS, Wrape has ceased operations and is unable to meet
its obligations as set forth in the Lease and the Wrape
Guaranty and the Trustee, pursuant to Section 1902 of the
Lease, has exercised its right to terminate the Lease, exclude
Wrape from the premises and to lease the Project to another for
K
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the account of Wrape; and 226
WHEREAS, Conestoga Wood Specialities, Inc., a Pennsylvania
corporation duly authorized to transact business in the State
of Arkansas ( "Conestoga ") proposes to assume the obligations of
Wrape and to enter into such other agreements and
understandings with the City, the Trustee and the AIDC as more
specifically outlined in its Proposal, a copy of which is
attached hereto as Exhibit A; and
WHEREAS, Conestoga has agreed to effectuate its assumption
of Wrape's obligations by authorizing the execution and
delivery of a Lease and Agreement by and between the City and
Conestoga in substantially the form and with substantially the
content as that attached hereto as Exhibit B and made a part
hereof (the "Lease and Agreement "); and
I
WHEREAS, Conestoga has further agreed to unconditionally
guarantee the payment of the principal of, premium, if any, and
interest on the Bonds by authorizing the execution and delivery
of a guaranty agreement by and among Conestoga, the City and
the Trustee substantially in the form and with the content
attached hereto as Exhibit C and made a part hereof (the
"Conestoga Guaranty "); and
III WHEREAS, the Trustee and the AIDC, subject to approval of
the Proposal by the City, have each approved the terms of the
Conestoga Proposal; and
WHEREAS, in consideration of the assumption by Conestoga
of all of Wrape's obligations and the execution and delivery of
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227
the Lease and Agreement and the Conestoga Guaranty the AIDC
will agree to continue and extend its Guaranty of Payment on
the Bonds; and
WHEREAS, Conestoga respectfully submits its Proposal, in
the form attached hereto as Exhibit A for the review and
consideration of the Board;
NOW THEREFORE, BE IT RESOLVED by the Board of Directors of
the City of Little Rock, Arkansas:
gggt.3QII_1. That the Proposal of Conestoga Wood
Specialties, Inc. in the form and with the content attached
hereto as Exhibit A and made a part hereof, is hereby in all
respects approved and that consent is expressly given to the
assumption by Conestoga Wood Specialties, Inc. of all the
obligations of Wrape Forest Industries, Inc. in connection with
the Bonds.
SectiDn_2,. That the Mayor and City Clerk be, and they are
hereby authorized and directed, for and on behalf of the City,
to execute and deliver the Proposal and such other documents as
may be required thereby including a Lease and Agreement
substantially in the form and with the content attached hereto
as Exhibit B, a Guaranty Agreement substantially in the form
and with the content attached hereto as Exhibit C and such
other documentation as may be reasonably required and necessary
to preserve the tax - exempt status of the Bonds, and otherwise
to take all action necessary to effectuate the City's approval
and consent to the assumption by Conestoga Wood Specialties,
4
i
Inc. of the obligations of
connection with the Bonds.
,Uj;tiQn3. That this
and effect from and after it
RESOLVED this 7th day
ATTESTn: "
City CtWkk
(SEAL)
Wrape Forest Industries, Inc. in
Resolution shall be in full force
s passage and approval.
of December, 1982.
yor % —
Maayor
A
22-18