125441 RESOLUTION NO. 12,544
2
3 A RESOLUTION AUTHORIZING THE ENTRY INTO AN AGREEMENT
4 TO ISSUE BONDS FOR THE PURPOSE OF ASSISTING IN THE
5 FINANCING OF INDUSTRIAL FACILITIES WITHIN OR NEAR THE
6 CITY OF LITTLE ROCK, ARKANSAS, TO BE LEASED TO WELSPUN
7 PIPES, INC. PURSUANT TO THE AUTHORITY OF THE LAWS OF THE
8 STATE OF ARKANSAS, INCLUDING PARTICULARLY AMENDMENT
9 65 TO THE ARKANSAS CONSTITUTION AND THE MUNICIPALITIES
10 AND COUNTIES INDUSTRIAL DEVELOPMENT REVENUE BOND LAW.
11
12 WHEREAS, the City of Little Rock, Arkansas, is authorized under the provisions
13 of Amendment 65 to the Arkansas Constitution and the Municipalities and Counties
14 Industrial Development Revenue Bond Law, Ark. Code Ann. §§ 14- 164 -201 to -224 (the
15 "Act "), to own, acquire, construct, equip, and lease facilities to secure and develop
16 industry and to assist in the financing thereof by the issuance of bonds payable from the
17 revenues derived from such facilities; and
18 WHEREAS, Welspun Pipes, Inc. (the "Company "), has evidenced its interest in
19 acquiring, constructing, and equipping an industrial facility within or near the City if
20 the permanent financing can be provided through the issuance of bonds under the
21 authority of the Act; and
22 WHEREAS, the City desires to assist the Company in order to secure and
23 develop industry within or near the City, and to aid in the financing thereof under the
24 provisions of the Act; and
25 WHEREAS, it is desirable that the City enter into an Agreement to Issue Bonds
26 for such purpose.
27 NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF
28 THE CITY OF LITTLE ROCK, ARKANSAS that:
29 Section 1. The Mayor and the City Clerk of the City are hereby authorized to
30 enter into an Agreement to Issue Bonds in substantially the form and substance as
31 follows:
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1 AGREEMENT TO ISSUE BONDS
2 THIS AGREEMENT is made as of July 10, 2007, by and between the City of
3 Little Rock, Arkansas, a city of the first class under the laws of the State of Arkansas (the
4 "City "), and Welspun Pipes, Inc. (the "Company "), for the purpose of carrying out the
5 purposes set forth in the Municipalities and Counties Industrial Development Revenue
6 Bond Law, Ark. Code Ann. §§ 14- 164 -201 to -224 (the "Act ").
7 WITNESS ETH:
8 WHEREAS, the City is authorized by Amendment 65 to the Arkansas
9 Constitution and the Act to own, acquire, construct, reconstruct, extend, equip,
10 improve, operate, maintain, sell, lease, or contract concerning, or otherwise deal in or
11 dispose of any land, buildings, or facilities of any and every nature that can be used in
12 securing or developing industry within or near the City; and
13 WHEREAS, the City has determined that such purposes may be served by
14 cooperation with the Company in the acquisition, construction, and equipping of an
15 industrial facility within or near the City, consisting of acquisition of land, construction
16 of buildings and improvements, and acquisition and installation of equipment for the
17 manufacture of steel pipes (the "Project "); and
18 WHEREAS, the City and the Company desire to cooperate in the acquisition,
19 constructing, and equipping of the Project and to have the costs of the Project financed
20 from the proceeds of revenue bonds of the City (the "Bonds ") to be issued pursuant to
21 the Act in an aggregate principal amount now estimated not to exceed $100,000,000
22 (excluding any bonds issued to refund the Bonds); and
23 WHEREAS, the City and the Company intend to enter into a Lease Agreement
24 (the "Lease ") of the real and personal property constituting the Project, which
25 contemplates that the Project will be leased to the Company, with an option to purchase
26 for a nominal price, and the rental payments therefor together with other moneys
27 available shall be sufficient to pay debt service on the Bonds and all related costs;
28 NOW, THEREFORE, in consideration of the premises and other good and
29 valuable consideration under the mutual benefits, covenants, and agreements herein
30 expressed, the City and the Company agree as follows:
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1 1. Proceedings. All proceedings in connection with the issuance of the Bonds
2 shall be consistent with the requirements of the Act. All references contained herein to
3 the issuance of the Bonds shall be subject to compliance with the formalities of the Act
4 when the facts required to do so are determined.
5 2. Acquisition, Construction, and Equipping. The City and the Company will
6 cooperate in causing to be commenced and continued the required acquisition,
7 construction, and equipping of the Project, and the Company may provide, or cause to
8 be provided, the necessary interim financing to permit work on the Project to
9 commence and continue expeditiously pending the issuance of Bonds. Not later than
10 the date of issuance of the Bonds, the Company will convey and transfer or cause to be
11 conveyed and transferred to the City, for an amount approximately equal to that then
12 expended by the Company (including at the Company's option any costs of interim
13 financing), the Project or portions thereof theretofore acquired, constructed, and
14 equipped. There shall also be conveyed to the City any easements and rights -of -way
15 necessary to permit construction, equipping, installation, operation, and maintenance of
16 the Project.
17 3. Lease. The City and the Company shall enter into the Lease under which the
18 Company will lease the Project, with an option to purchase for a nominal price, from the
19 City and will agree to make rental payments sufficient to pay the principal of and
20 premium, if any, and interest on the Bonds, together with all charges of any Trustee and
21 any Paying Agent for the Bonds.
22 4. Sale of Bonds, Security. The City will take such steps as are necessary to issue,
23 sell, and deliver the Bonds, pursuant to the terms of the Act, for the purposes of
24 financing the costs of the Project, in each case only upon receipt of the written
25 designation by the Company of the purchaser(s) or underwriter(s) thereof, such Bonds
26 to be in such principal amount, to mature in such amount and times, to bear interest at
27 such rate or rates, to be payable on such dates, and to have such optional and
28 mandatory redemption features and prices as are determined by the City and approved
29 in writing by the Company. The City further agrees that it will enter into the Lease and
30 a trust indenture with a bank or trust company, qualified to exercise trust powers where
31 necessary, for the purpose of providing rental payments sufficient, with other amounts
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available from the Company or directly or indirectly from the proceeds of the Bonds, to
pay the principal of and premium, if any, and interest on the Bonds as they become due
together with the charges of any Trustee and Paying Agent for the Bonds, and pledging
and otherwise securing the payment of such rental payments for the benefit of the
holder(s) of the Bonds. The Lease, the trust indenture, other related documents, and the
Bonds shall contain such terms and conditions as are agreed upon by the City and the
Company. The City will cooperate in consummating the transactions so contemplated.
5. 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 constitute a
general obligation, indebtedness, or pledge of the credit of the City within the meaning
of any constitutional 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.
6. Conditions of Issuance. The Bonds may be issued either at one time or in
several series from time to time, in such aggregate principal amount or amounts as the
Company shall request in writing; provided, however, that all conditions of the Act
shall have been met.
7. 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; fees and out -of- pocket expenses of Rose Law Firm, a
Professional Association, as bond counsel; fees and expenses of any trustee; fees and
expenses, if any, required in connection with the underwriting or placement of the
Bonds; recording costs; rating agency's fees, if any; 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.
8. Termination. In the event that the Bonds shall not be sold within three years
from the date hereof, this Agreement shall automatically terminate unless the parties
hereto shall agree in writing to its extension for a further period of time specified in
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such writing, which agreement on the part of the City shall not be unreasonably
withheld. The Company may unilaterally terminate this Agreement without liability to
the City (except for any amounts due and owing by the Company to the City arising out
of the transactions occurring on or before the time of such termination, which shall be
promptly paid by the Company 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. The Company 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. The Company will at all times indemnify and
hold harmless the City against any and all losses, costs, damages, expenses, and
liabilities of whatsoever nature directly or indirectly resulting from, arising out of, or
related to matters in connection with this Agreement.
10. Ad Valorem Taxation Exemption. The City and the Company recognize that
under the Arkansas Constitution and decisions of the Supreme Court of Arkansas and
in accordance with Ark. Code Ann. §§ 14 -164 -701 to -703, the Project will be exempt
from ad valorem taxation. The City agrees that the Company shall be required to enter
into an Agreement for Payments in Lieu of Taxes ( "PILOT Agreement ") with the City in
substantially the form submitted to this meeting, providing for payments in lieu of a
portion of the ad valorem taxes that would otherwise be levied by local public bodies
with taxing authority.
11. Purpose and Effect. The Bonds are to be issued, sold, and delivered under the
authority of the Act and all related actions and documents shall be in conformity
therewith. The City intends this Agreement to be the expression of its present intent,
pursuant to the terms hereof, to issue the Bonds up to $100,000,000 aggregate principal
amount outstanding at any one time, and also to issue additional Bonds if the Project
costs exceed such amount, and to expend the Bond proceeds to defray the costs of the
Project.
12. Assignment. The Company may assign this Agreement and the PILOT
Agreement in whole or in part to an affiliate of the Company without the prior written
consent of the City and to an entity which is not an affiliate of the Company with the
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prior written consent of the City, which consent shall not be unreasonably withheld.
Notwithstanding the foregoing, no assignment and no dealings or transactions between
the City and any assignee shall relieve the Company of any of its obligations under this
Agreement.
IN WITNESS WHEREOF, the City of Little Rock, Arkansas, acting pursuant to a
Resolution of its Board of Directors, has caused its name to be hereunto subscribed by
its Mayor and the Company has caused its corporate name to be subscribed hereto by
its duly authorized officer, all as of the year and date first above written.
CITY OF LITTLE ROCK, ARKANSAS
By:
Mayor
WELSPUN PIPES, INC.
By:
General Manager
Section 2. The PILOT Agreement is hereby approved in substantially the form
submitted to this meeting.
Section 3. This Resolution shall be in full force and effect from and after its
adoption
Section 4. Severability. In the event any title, section, paragraph, item, sentence,
clause, phrase, or word of this resolution is declared or adjudged to be invalid or
unconstitutional, such declaration or adjudication shall not affect the remaining
portions of this resolution, which shall remain in full force and effect as if the portion so
declared or adjudged invalid or unconstitutional was not originally a part of this
resolution.
Section 5. Repealer. All ordinances or resolutions of the City in conflict herewith
are hereby repealed to the extent of such conflict.
PASSED: July 10, 2007
ATTEST: APPROViVD—: n
/ 74 - � �,, �,, 9 - 2 & 6 Z, �-'Z ��z N�4�V4'
Na cy Wood ity Clerk Stacy Hurst, Vi e Mayor
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APPROVED AS TO LEGAL FORM:
61-� �Y. j�44A �A"__
Thomas M. Carpenter, C' Attorney
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[Page 7 of 7]
ROSE ]LAW FIRM
A P R O F E S S I O N A L A S S O C I A T I O N
ATTORNEYS
WRITER'S TELEPHONE 120 East Fourth Street WRITER'S ELECTRONIC MAIL
(501) 377 -0312 Little Rock, Arkansas jdickey@roselawfirm.com
72201 -2893
501 - 375 -9131
501- 375 -1309 FAX
www.roselawfirm.com
June 29, 2007
Mr. James R. Sharp
15306 Hartford Street
Little Rock, Arkansas 72223
Re: Notice of Approval of an Agreement for Payments in Lieu of Taxes/Welspun Pipes, Inc.
Dear Mr. Sharp:
Enclosed please find a Notice of Approval of an Agreement for Payments in Lieu of Taxes for
your acknowledgment, along with a copy of the Payment in Lieu of Taxes Agreement. Please sign
where indicated to acknowledge receipt of this notice and return to me in the enclosed self -
addressed postage -paid envelope at your earliest convenience.
Sincerely,
M. Jane Dickey
Enclosures
Affidavit
STATE OF ARKANSAS )
) SS.
COUNTY OF LONOKE )
ae& Al-nj�J ,being duly sworn, deposes and says that he /she is associated with Rose
Law Firm, in the City of Little Rock, Arkansas, and that on June 29, 2007, he /she personally
delivered a Notice of Approval of an Agreement for Payments in Lieu of Taxes ( "PILOT"') by
Welspun Pipes, Inc. or its affiliate in connection with the issuance of industrial development
revenue bonds by the City the receipt of which is to be acknowledged by James R. Sharpe,
Superintendent of Schools, Pulaski County Special School District.
SWORN AND SUBSCRIBED to before me on June 30, 2007.
lee
Notary Public
My Commission Expires:
1\OSE 1AW FIRM
A P R O F E S S I O N A L A s S o C I A T I O N
ATTORNEYS
WRITER'S TELEPHONE 120 East Fourth Street WRITER'S ELECTRONIC MAIL
(501) 377 -0312 Little Rock, Arkansas jdickey @roselawfirm.com
72201 -2893
501 - 375 -9131
501 - 375 -1309 FAX
www.roselawfirm.com
June 29, 2007
Mr. Richard Weiss
Arkansas Department of Finance and Administration
1509 West 7 Street, Room 400
Little Rock, Arkansas 72201
Re: Notice of Approval of an Agreement for Payments in Lieu of Taxes/Welspun Pipes, Inc.
Dear Mr. Weiss:
Enclosed please find a Notice of Approval of an Agreement for Payments in Lieu of Taxes for
your acknowledgment, along with a copy of the Payment in Lieu of Taxes Agreement. Please sign
where indicated to acknowledge receipt of this notice and return to me in the enclosed self -
addressed postage -paid envelope at your earliest convenience.
Sincerely,
M. Jane
"Doi ee
Dickey
MJD:nr
Enclosures
Affidavit
STATE OF ARKANSAS )
) SS:
COUNTY OF LONOKE )
being duly sworn, deposes and says that he /she is associated with Rose
Law Firm, in the City of Little Rock, Arkansas, and that on June 29, 2007, he /she personally
delivered a Notice of Approval of an Agreement for Payments in Lieu of Taxes ( "PILOT ") by
Welspun Pipes, Inc. or its affiliate in connection with the issuance of industrial development
revenue bonds by the City the receipt of which is to be acknowledged by Richard Weiss, Chief
Fiscal Officer, State of Arkansas.
SwoRN AND SUBSCRIBED to before me on June 30, 2007.
Notary Public
Expires:
TA
•10.201
90