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19783ORDINANCE NO. 19,783 2 3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF INDUSTRIAL 4 DEVELOPMENT REVENUE BONDS UNDER THE MUNICIPALITIES 5 AND COUNTIES INDUSTRIAL DEVELOPMENT REVENUE BOND 6 LAW FOR THE PURPOSE OF SECURING AND DEVELOPING 7 INDUSTRY (THE PARTICULAR INDUSTRIAL PROJECT IS 8 DESCRIBED IN THE ORDINANCE); AUTHORIZING THE SALE OF 9 THE BONDS AND THE APPROVAL OF A BOND PURCHASE 10 AGREEMENT AND A PAYMENT IN LIEU OF TAXES AGREEMENT 11 IN CONNECTION THEREWITH; AUTHORIZING THE EXECUTION 12 AND DELIVERY OF A TRUST INDENTURE SECURING THE 13 BONDS; AUTHORIZING AND PRESCRIBING CERTAIN MATTERS 14 PERTAINING TO THE INDUSTRIAL PROJECT, THE ACQUISITION, 15 CONSTRUCTION, AND EQUIPPING THEREOF, AND THE 16 FINANCING THEREOF; AUTHORIZING THE EXECUTION AND 17 DELIVERY OF A LEASE AGREEMENT RELATING TO THE 18 PROJECT; PRESCRIBING OTHER MATTERS RELATING THERETO; 19 AND DECLARING AN EMERGENCY. 20 21 WHEREAS, the City of Little Rock, Arkansas is authorized by the Municipalities 22 and Counties Industrial Development Revenue Bond Law, Ark. Code Ann. §§ 14 -164- 23 201 to —224 (the "Act "), to acquire lands, construct and equip industrial buildings, 24 improvements, and facilities, and incur other costs and expenses and make other 25 expenditures incidental to and for the implementing and accomplishing of the conduct 26 of industrial operations; and [Page 1 of 7] I WHEREAS, the City is authorized by the Act to issue industrial development 2 revenue bonds payable from revenues derived from the industrial project so acquired, 3 constructed, and equipped; and 4 WHEREAS, the City, pursuant to Resolution No. 12,544, adopted July 10, 2007, 5 has entered into an Agreement to Issue Bonds, dated July 10, 2007, with Welspun Pipes, 6 Inc. ( "Welspun "), to issue such bonds under the Act to the extent of not to exceed 7 $100,000,000 for the purposes hereinafter described for the benefit of Welspun or its 8 assignee, such bonds to be issued in one or more series as Welspun may request; and 9 WHEREAS, Welspun Pipes, Inc. intends to assign its rights under the Agreement 10 to Issue Bonds to an affiliate company, Welspun Tubular, L.L.C. (the "Company "), and 11 the City consents to such assignment; and 12 WHEREAS, the necessary arrangements have been made with Welspun for a 13 substantial industrial project consisting of the acquisition of approximately 800 acres of 14 land, construction of buildings, and acquisition of equipment, all located at 9301 Frazier 15 Pike, Little Rock, Arkansas 72206 (the "Project "), to be utilized in Welspun's business of 16 manufacturing steel pipes; and 17 WHEREAS, to provide permanent financing of a portion of the Project costs, 18 necessary costs and expenditures incidental thereto, and the cost of the issuance of 19 bonds, the City will issue an initial series of its taxable industrial development revenue 20 bonds under the provisions of the Act designated "City of Little Rock, Arkansas 21 Taxable Industrial Development Revenue Bonds (Welspun Tubular, L.L.C. Project), 22 Series 2007 -A," in the principal amount of $11,000,000 (the "Bonds "); and 23 WHEREAS, the Bonds will be issued pursuant to the provisions of a Trust 24 Indenture, dated as of August 1, 2007 (the "Trust Indenture "), to be entered into 25 between the City and Regions Bank, as Trustee (the "Trustee "); and [Page 2 of 7] I WHEREAS, the necessary arrangements have been made to lease the Project to 2 the Company pursuant to the terms of a Lease Agreement, dated as of August 1, 2007 3 (the "Lease Agreement "), for a term of 30 years; and 4 WHEREAS, to induce the City to proceed with the issuance of the Bonds for the 5 purpose indicated, which will inure to the benefit of Welspun and the Company, the 6 City and the Company will enter into a Payment in Lieu of Taxes Agreement ( "PILOT 7 Agreement ") in substantially the form approved in Resolution No. 12,544; and 8 WHEREAS, an open public hearing on the question of the issuance of the Bonds 9 was held before the Board of Directors of the City on July 10, 2007, following 1 o publication of notice in the Arkansas Democrat - Gazette on June 30, 2007, and that having i 1 heard all persons desiring to be heard in the matter, the City has taken under 12 advisement the comments and statements of such persons, and declared the public 13 hearing duly closed; and 14 WHEREAS, the City proposes to sell the Bonds to Morgan Keegan & Company, 15 Inc. (the "Underwriter ") pursuant to a Bond Purchase Agreement by and between the 16 City and the Underwriter; 17 WHEREAS, the completion of the Project will furnish additional employment 18 and other benefits to and be in the best interest of the City and its residents; 19 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS 20 OF THE CITY OF LITTLE ROCK, ARKANSAS that: 21 Section 1. There be, and there is hereby authorized and directed the following: 22 (a) The issuance of the Bonds in the principal amount of $11,000,000 and the sale 23 of the Bonds to the Underwriter for a price of $10,945,000 upon the terms and 24 conditions set forth in the Bond Purchase Agreement. 25 (b) The execution and delivery of the Bond Purchase Agreement by the Mayor on 26 behalf of the City, in substantially the form submitted to this meeting, with such 27 changes as shall be approved by such persons executing the document, their execution [Page 3 of 7] I to constitute conclusive evidence of such approval. An executed copy of the Bond 2 Purchase Agreement shall be filed in the office of the City Clerk. 3 (c) The execution and delivery of the PILOT Agreement by the Mayor on behalf 4 of the City, in substantially the form approved in Resolution No. 12,544, with such s changes as shall be approved by such persons executing the document, its execution to 6 constitute conclusive evidence of such approval. An executed copy of the PILOT 7 Agreement shall be filed in the office of the City Clerk. 8 (d) The acquisition, construction, and equipping of the Project, and, in 9 connection therewith, the execution of any necessary architectural, engineering, or 10 construction contracts or the acceptance of an assignment of any such contracts 11 previously executed by Welspun or the Company for the construction and equipping of 12 the Project. 13 (e) The performance of all obligations of the City under the Agreement 14 pertaining to the acquisition, construction, and equipping of the Project. 15 Section 2. The Bonds shall be dated the date of initial authentication and 16 delivery, shall bear interest from such date, shall mature (subject to prior redemption) 17 or be subject to mandatory sinking fund redemption on August 1 of the years 2008 18 through 2027, inclusive, and shall bear interest at the rates as described in the 19 Indenture. 20 To provide the terms and conditions upon which the Bonds are to be secured, 21 executed, authenticated, issued, accepted, and held, the Mayor is hereby authorized and 22 directed to execute and acknowledge the Indenture, and the City Clerk is hereby 23 authorized and directed to execute and acknowledge the Indenture and to affix the seal 24 of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to 25 cause the Indenture to be accepted, executed, and acknowledged by the Trustee. The 26 Indenture is hereby approved in substantially the form submitted to this meeting, and 27 the Mayor is hereby authorized to confer with the Trustee, Welspun, the Company, and [Page 4 of 7] I the Underwriter in order to complete the Indenture in substantially the form submitted 2 to this meeting with such changes as shall be approved by such persons executing the 3 documents, their execution to constitute conclusive evidence of such approval. 4 (Notice is given that, pursuant to the Act, a copy of the Indenture, in 5 substantially the form authorized to be executed, is on file with the City 6 Clerk of the City of Little Rock and are available for inspection by any 7 interested person.) s Section 3. There be, and there is hereby, authorized and directed the execution 9 and delivery of the Lease Agreement, and the Mayor and City Clerk are hereby 1 o authorized to execute, acknowledge, and deliver the Lease Agreement for and on behalf 11 of the City. The Lease Agreement is hereby approved in substantially the form 12 submitted to this meeting, and the Mayor is hereby authorized to confer with Welspun, 13 the Company, the Trustee, and the Underwriter in order to complete the Lease 14 Agreement in substantially the form submitted to this meeting, with such changes as 15 shall be approved by such persons executing the document, their execution to constitute 16 conclusive evidence of such approval. 17 (Notice is given that, pursuant to the Act, a copy of the Lease Agreement, 18 in substantially the form authorized to be executed, is on file with the City 19 Clerk of the City of Little Rock and is available for inspection by any 20 interested person.) 21 Section 4. The Mayor and City Clerk, for and on behalf of the City, be, and they 22 are hereby authorized and directed to do any and all things necessary to effect the 23 execution of the Lease Agreement, the performance of the City's obligations under the 24 Lease Agreement, the execution and delivery of the Trust Indenture, its execution and 25 acceptance by the Trustee, the performance of all obligations of the City under and 26 pursuant to the Trust Indenture, the execution and delivery of the Bonds, the execution 27 and delivery of the Bond Purchase Agreement, the execution and delivery of the PILOT [Page 5 of 7] I Agreement, and the performance of all other acts of whatever nature necessary to effect 2 and carry out the authority conferred by this Ordinance. The Mayor and the City Clerk 3 are further authorized and directed, for and on behalf of the City, to execute all papers, 4 documents, certificates, and other instruments that may be required for the carrying out 5 of such authority or to evidence the exercise thereof. 6 Section 5. Since the City is here involved with the acquisition, constructing, and 7 equipping of a complex industrial project, requiring highly specialized work and 8 specialized types of machinery and equipment, it has been and is hereby determined by 9 the Board of Directors that competitive bidding be, and the same is hereby, waived as to I o this particular industrial project. This action is taken by the Board of Directors pursuant I I to applicable laws of the State of Arkansas, including particularly the Act. 12 Section 6. There is hereby authorized, ratified, and confirmed the preparation 13 and distribution to various prospective and actual purchasers of the Bonds of a 14 preliminary official statement in the name of the City, describing the City, the Bonds, 15 the Project, Welspun, the Company, the Trust Indenture, and the Lease Agreement, and 16 setting forth such other information as may be determined to be necessary or desirable. 17 The Mayor, for and on behalf of the City, is authorized to cause the preliminary official 18 statement to be delivered for and in the name of the City, with such provisions therein 19 as shall be approved by the Mayor, who is authorized to execute and deliver to the 20 underwriter a certificate, when requested by the underwriter, to the effect that the 21 preliminary official statement is deemed final for the purposes of Securities and 22 Exchange Commission Rule 15c2 -12. The Mayor is also authorized to execute a final 23 official statement, an executed copy of which shall be filed in the permanent records of 24 the City. 25 Section 7. All actions heretofore taken by the City, Welspun, the Company, and 26 the Underwriter in connection with the offer and sale of the Bonds are hereby in all 27 respects ratified and approved. [Page 6 of 7] 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 Section 8. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or adjudication shall not affect the remaining portions of this ordinance, 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 ordinance. Section 9. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby repealed to the extent of such conflict. Section 10. There is hereby found and declared to be an immediate need for the securing and developing of substantial industrial operations in order to provide additional employment, alleviate unemployment, and otherwise benefit the public health, safety, and welfare of the City and the inhabitants thereof, and the issuance of the Bonds authorized hereby and the taking of the other action authorized herein are immediately necessary in connection with the securing and developing of substantial industrial operations and deriving the public benefits referred to above. It is therefore, declared that an emergency exists and this Ordinance, being necessary for the immediate preservation of the public health, safety, and welfare, shall be in force and take effect immediately upon and after its passage. PASSED: July 17, 2007 ATTEST: F C y Woo ,City Clerk APPROVED AS TO LEGAL FORM: Thomas M. Carpenter, Ci Attorney APPROVED: Mark Stodola, Mayor [Page 7 of 7]