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134641 2 RESOLUTION NO. 13,464 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 THE CITY 6 OF LITTLE ROCK, ARKANSAS, TO BE LEASED TO WELSPUN 7 TUBULAR, LLC, PURSUANT TO THE AUTHORITY OF THE LAWS OF 8 THE STATE OF ARKANSAS, INCLUDING PARTICULARLY 9 AMENDMENT 65 TO THE ARKANSAS CONSTITUTION AND THE 10 MUNICIPALITIES AND COUNTIES INDUSTRIAL DEVELOPMENT 11 REVENUE BOND LAW; AND FOR OTHER PURPOSES. 12 13 WHEREAS, the City of Little Rock, Arkansas, is authorized under the provisions of Amendment 65 14 to the Arkansas Constitution and the Municipalities and Counties Industrial Development Revenue Bond 15 Law, as amended, Ark. Code Ann. §§ 14- 164 -201 et seq. (the "Act "), to own, acquire, construct, equip, 16 and lease facilities to secure and develop industry and to assist in the financing thereof by the issuance of 17 bonds payable from the revenues derived from such facilities; and 18 WHEREAS, the City has previously issued its $11,000,000 Taxable Industrial Development 19 Revenue Bonds (Welspun Tubular, L.L.C. Project), Series 2007 -A, dated August 1, 2007; $50,000,000 20 Taxable Industrial Development Revenue Bonds (Welspun Tubular, LLC Project), Series 2007 -13, dated 21 January 30; 2008; $39,000,000 Taxable Industrial Development Revenue Bonds (Welspun Tubular, LLC 22 Project), Series 2007 -C, dated December 13, 2007; and $50,000,000 Taxable Industrial Development 23 Revenue Bonds (Welspun Tubular, LLC Project), Series 2008 -B, dated June 20, 2008, for the purpose of 24 financing a substantial industrial project consisting of the acquisition of approximately 800 acres of land, 25 construction of buildings, and acquisition of equipment, all located at 9301 Frazier Pike, Little Rock, 26 Arkansas 72206 (the "Original Project "), which is leased to Welspun Tubular LLC (the "Company "), and 27 utilized in the Company's business of manufacturing steel pipes; and 28 WHEREAS, the City has previously issued its $30,000,000 Taxable Industrial Development 29 Revenue Bonds (Welspun Tubular LLC, Project), Series 2010, dated August 31, 2010 (the "Series 2010 30 Bonds "), for the purpose of financing improvements to the Original Project and acquiring an additional 31 industrial facility located at 8200 Frazier Pike, Little Rock, Arkansas 72206 (the "2010 Project "), which 32 is leased to the Company and utilized in the Company's business of manufacturing steel pipes; and [Page 1 of 71 1 WHEREAS, the Company has evidenced its interest in acquiring, constructing, and equipping 2 improvements and additions to the 2010 Project (the "Project ") if the permanent financing can be 3 provided through the issuance of bonds under the authority of the Act; and 4 WHEREAS, the City desires to assist the Company in order to secure and develop industry within 5 the City, and to aid in the financing thereof under the provisions of the Act; and 6 WHEREAS, it is desirable that the City enter into an Agreement to Issue Bonds for such purpose. 7 NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY 8 OF LITTLE ROCK, ARKANSAS: 9 Section 1. The Mayor and the City Clerk of the City are hereby authorized to enter into an 10 Agreement to Issue Bonds in substantially the form and substance as follows: 11 AGREEMENT TO ISSUE BONDS 12 THIS AGREEMENT is made as of March 6, 2012, by and between the City of 13 Little Rock, Arkansas, a city of the first class under the laws of the State of Arkansas 14 (the "City"), and Welspun Tubular LLC (the "Company "), for the purpose of carrying 15 out the purposes set forth in the Municipalities and Counties Industrial Development 16 Revenue Bond Law, as amended, Ark. Code Ann. §§ 14 -164 -201 et seq. (the "Act "). 17 WITNESSETH: 18 WHEREAS, the City is authorized by Amendment 65 to the Arkansas Constitution 19 and the Act to own, acquire, construct, reconstruct, extend, equip, improve, operate, 20 maintain, sell, lease, or contract concerning, or otherwise deal in or dispose of any land, 21 buildings, or facilities of any and every nature that can be used in securing or developing 22 industry within the City; and 23 WHEREAS, the City has determined that such purposes may be served by 24 cooperation with the Company in the acquisition, construction, and equipping of an 25 industrial facility within the City, consisting of construction and renovation of buildings 26 and improvements and acquisition and installation of equipment for the manufacture of 27 steel pipes (the "Project "); and 28 WHEREAS, the City and the Company desire to cooperate in the acquisition, 29 constructing, and equipping of the Project and to have the costs of the Project financed 30 from the proceeds of revenue bonds of the City (the "Bonds ") to be issued pursuant to 31 the Act in an aggregate principal amount now estimated not to exceed $100,000,000 32 (excluding any bonds issued to refund the Bonds); and [Page 2 of 71 1 WHEREAS, the City and the Company intend to enter into a Lease Agreement (the 2 "Lease ") of the real and personal property constituting the Project, which contemplates 3 that the Project will be leased to the Company, with an option to purchase for a nominal 4 price, and the rental payments therefor together with other moneys available shall be 5 sufficient to pay debt service on the Bonds and all related costs; 6 NOW, THEREFORE, in consideration of the premises and other good and valuable 7 consideration under the mutual benefits, covenants, and agreements herein expressed, the 8 City and the Company agree as follows: 9 1. Proceedings. All proceedings in connection with the issuance of the Bonds shall 10 be consistent with the requirements of the Act. All references contained herein to the 11 issuance of the Bonds shall be subject to compliance with the formalities of the Act 12 when the facts required to do so are determined. 13 2. Acquisition. Construction, and Equipping. The City and the Company will 14 cooperate in causing to be commenced and continued the required acquisition, 15 construction, and equipping of the Project, and the Company may provide, or cause to be 16 provided, the necessary interim financing to permit work on the Project to commence 17 and continue expeditiously pending the issuance of Bonds. Not later than the date of 18 issuance of the Bonds, the Company will convey and transfer or cause to be conveyed 19 and transferred to the City, for an amount approximately equal to that then expended by 20 the Company (including at the Company's option any costs of interim financing), the 21 Project or portions thereof theretofore acquired, constructed, and equipped. There shall 22 also be conveyed to the City any easements and rights -of -way necessary to permit 23 construction, equipping, installation, operation, and maintenance of the Project. 24 3. Lease. The City and the Company shall enter into the Lease under which the 25 Company will lease the Project for a period of approximately 30 years from the date of 26 issuance of the Bonds, with an option to purchase for a nominal price, from the City and 27 will agree to make rental payments sufficient to pay the principal of and premium, if any, 28 and interest on the Bonds, together with all charges of any Trustee and any Paying Agent 29 for the Bonds. 30 4. Sale of Bonds, Security. The City will take such steps as are necessary to issue, 31 sell, and deliver the Bonds, pursuant to the terms of the Act, for the purposes of 32 financing the costs of the Project, in each case only upon receipt of the written 33 designation by the Company of the purchaser(s) or underwriter(s) thereof, such Bonds to (Page 3 of 71 1 be in such principal amount, to mature in such amount and times, to bear interest at such 2 rate or rates, to be payable on such dates, and to have such optional and mandatory 3 redemption features and prices as are determined by the City and approved in writing by 4 the Company. The City further agrees that it will enter into the Lease and a trust 5 indenture with a bank or trust company, qualified to exercise trust powers where 6 necessary, for the purpose of providing rental payments sufficient, with other amounts 7 available from the Company or directly or indirectly from the proceeds of the Bonds, to 8 pay the principal of and premium, if any, and interest on the Bonds as they become due 9 together with the charges of any Trustee and Paying Agent for the Bonds, and pledging 10 and otherwise securing the payment of such rental payments for the benefit of the 11 holder(s) of the Bonds. The Lease, the trust indenture, other related documents, and the 12 Bonds shall contain such terms and conditions as are agreed upon by the City and the 13 Company. The City will cooperate in consummating the transactions so contemplated. 14 5. Bonds to be Special Obligations. The City shall have no financial responsibility 15 with respect to the Project, the Bonds, or the costs associated with either, and the Bonds 16 shall be special obligations of the City and shall never constitute a general obligation, 17 indebtedness, or pledge of the credit of the City within the meaning of any constitutional 18 or statutory provision and shall never be paid in whole or in part out of any funds raised 19 or to be raised by taxation or any other revenues or other funds of the City except those 20 (including unexpended Bond proceeds) derived from or in connection with the sale or 21 lease of the Project as provided for herein. 22 6. Conditions of Issuance. The Bonds may be issued either at one time or in several 23 series from time to time, in such aggregate principal amount or amounts as the Company 24 shall request in writing; provided, however, that all conditions of the Act shall have been 25 met. 26 7. Costs to be Financed. The costs of the Project may include any costs permissible 27 under the Act, including but not limited to reasonable and necessary costs, expenses, and 28 fees incurred by the City in connection with the issuance of the Bonds or in connection 29 with the Project; fees and out -of- pocket expenses of Rose Law Firm, a Professional 30 Association, as bond counsel; fees and expenses of any trustee; fees and expenses, if any, 31 required in connection with the underwriting or placement of the Bonds; recording costs; 32 rating agency's fees, if any; and printing costs. The City will upon request provide or [Page 4 of 71 1 cause to be provided any data or information which may be reasonably required to verify 2 any of the costs, expenses, and fees enumerated above. 3 8. Termination. In the event that the Bonds shall not be sold within three years from 4 the date hereof, this Agreement shall automatically terminate unless the parties hereto 5 shall agree in writing to its extension for a further period of time specified in such 6 writing, which agreement on the part of the City shall not be unreasonably withheld. The 7 Company may unilaterally terminate this Agreement without liability to the City (except 8 for any amounts due and owing by the Company to the City arising out of the 9 transactions occurring on or before the time of such termination, which shall be promptly 10 paid by the Company to the City) by giving notice by ordinary mail, postage prepaid, to 11 the City specifying therein the date of termination, which may be the date of the notice. 12 9. Protection to the City. The Company shall pay all of the City's costs and 13 expenses reasonably and necessarily incurred in connection with this Agreement or any 14 other related document or instrument. The Company will at all times indemnify and hold 15 harmless the City against any and all losses, costs, damages, expenses, and liabilities of 16 whatsoever nature directly or indirectly resulting from, arising out of, or related to 17 matters in connection with this Agreement. 18 10. Ad Valorem Taxation Exemption. The City and the Company recognize that 19 under the Arkansas Constitution and decisions of the Supreme Court of Arkansas and in 20 accordance with Ark. Code Ann. §§ 14- 164 -701 et seq., the Project will be exempt from 21 ad valorem taxation. The City agrees that the Company shall be required to enter into an 22 Agreement for Payments in Lieu of Taxes ( "PILOT Agreement ") with the City in 23 substantially the form submitted to this meeting, providing for payments in lieu of a 24 portion of the ad valorem taxes that would otherwise be levied by local public bodies 25 with taxing authority. 26 11. Purpose and Effect. The Bonds are to be issued, sold, and delivered under the 27 authority of the Act and all related actions and documents shall be in conformity 28 therewith. The City intends this Agreement to be the expression of its present intent, 29 pursuant to the terms hereof, to issue the Bonds up to $100,000,000 aggregate principal 30 amount outstanding at any one time, and also to issue additional Bonds if the Project 31 costs exceed such amount, and to expend the Bond proceeds to defray the costs of the 32 Project. [Page 5 of 71 1 12. Assignment. The Company may assign this Agreement and the PILOT 2 Agreement in whole or in part to an affiliate of the Company without the prior written 3 consent of the City and to an entity which is not an affiliate of the Company with the 4 prior written consent of the City, which consent shall not be unreasonably withheld. 5 Notwithstanding the foregoing, no assignment and no dealings or transactions between 6 the City and any assignee shall relieve the Company of any of its obligations under this 7 Agreement. 8 IN WITNESS WHEREOF, the City of Little Rock, Arkansas, acting pursuant to a 9 Resolution of its Board of Directors, has caused its name to be hereunto subscribed by its 10 Mayor and the Company has caused its corporate name to be subscribed hereto by its 11 duly authorized officer, all as of the year and date first above written. 12 CITY OF LITTLE ROCK, ARKANSAS 13 By: 14 Mayor 15 WELSPUN TUBULAR LLC 16 By: 17 Vice President, Business Development 18 19 Section 2. The PILOT Agreement is hereby approved in substantially the form submitted to this 20 meeting. 21 Section 3. This Resolution shall be in full force and effect from and after its adoption 22 Section 4. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 23 word of this resolution is declared or adjudged to be invalid or unconstitutional, such declaration or 24 adjudication shall not affect the remaining portions of this resolution, which shall remain in full force 25 and effect as if the portion so declared or adjudged invalid or unconstitutional were not originally a part 26 of this resolution. 27 Section 5. Repealer. All ordinances or resolutions of the City in conflict herewith are hereby 28 29 30 31 32 33 repealed to the extent of such conflict. PASSED: March 6, 2012 APPROVE Mark Stodola, Mayor [Page 6 of 7] 1 APPROVED AS TO LEGAL FORM: 2 4 Thomas M. Carpenter, City Wttorney 5 // 6 // 7 // 8 // 9 // 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 // 18 // 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 29 30 // 31 // 32 // 33 // 34 // [Page 7 of 71