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3004 RESOLUTION NO . 3,004 A RESOLUTION AUTHORIZING THE MAYOR AND CITY CLERK TO EXECUTE ON BEHALF Oi THE CITY OF LITTLE ROCK A CONTRACT WITH DOWSMITH, INC. , FOR THE PAYMENT OF CERTAIN SUMS IN LIEU OF TAXES; AND FOR OTHER PURPOSES . WHEREAS, it is in the mutual interest of the City of Little Rock and DowSmith, Inc. , that the said DowSmith, Inc. , pay to the City of Little Rock certain moneys in lieu of taxes upon the pro- perty improved by the City of Little _ ock for use by DowSmith, Inc . , pursuant to Act 9 of the First 'Extraordinary Session of the General Assembly of the State of Arkansas, approved January 21, 1960, as amended; and WHEREAS, a stipulated sum has been agreed upon between the City of Little Rock and DowSmith, Inc. , as a consideration for the issuance of the bonds pursuant to the said >ct 9 , as amended; NOW THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS: SECTION 1. The Mayor and City Clerk are hereby authorized and directed to execute a Contract on behalf of the City of Little Rock with DowSmith, Inc. , which Contract is fully set forth in Section 2 hereof. SECTION 2 . The Contract referred to in Section 1 hereof small be in form and substance as follows : DOWSMITH INC. BOX 2369 • MILWAUKEE 12, WISCONSIN • UPTOWN 3-3414 • AREA CODE 4 May 3, 1963 City of Little Rock City Hall Little Rock, Arkansas Gentlemen: The City of Little Rock, Arkansas (hereinafter sometimes referred to as the "City" ) proposes to issue Industrial Development Revenue Bonds under the provisions of Act No. 9 of the First Extraordinary Session of the 62nd General Assembly of the State of Arkansas , approved January. 21, 1960, as amended by Act No. 48 of the General Assembly of the State of Arkansas for the year 1961 (hereinafter sometimes referred to as "Act No. 9" ) in the amount of Two Million Five Hundred Thousand Dollars ($2, 500,000) (hereinafter sometimes referred to as the "bonds" ) , for the purpose of financing the cost of the acquisition of lands and the construction of a manufacturing building and facilities thereon (hereinafter sometimes referred to as the "Project" ) . The Project has been leased by the City to the undersigned by a Lease and Agreement dated as of the 3rd day of May, 1963, which is to be recorded in the office of the Circuit Clerk and ex officio Recorder of Pulaski County, Arkansas (herein called "Lease and Agreement" ) . The bonds of the City are secured by a pledge of all revenues derived from the Project including particularly the lease rentals paid under the Lease and Agreement between the City and the undersigned and are secured by a mortgage lien on the Project . Article III of the Lease and Agreement between the City and the I undersigned provides that the undersigned is obligated to pay all taxes and assessments, general and special, levied and assessed on the Project during the term, and all water and sewer charges, assessments and other governmental charges and impositions whatso- ever, all of which are therein designated as "impositions" . The undersigned is informed and understands that, notwithstanding the said provisions of Article III of the said Lease and Agreement, under the decision of the Supreme Court of the State of Arkansas in the case of Wayland v. Snapp, 232 Ark. 57, 334 S.W. 2d 633, the Project will be exempt from ad valorem taxes because owned by the City and used for a public purpose within the meaning of the applicable Constitutional provision affording the exemption. Thus, the undersigned understands that it, as Lessee of the Project owned by the City, will, in fact, have no ad valorem taxes to pay under the provisions of Article III of the said Lease and Agreement. The City has indicated a reluctance for the authorities to lose all tax revenues which would otherwise be received by the authorities if the properties involved were privately owned. Therefore, to induce the City to proceed with the issuance of the bonds for the purposes GLASS FIBER REINFORCED EPDXY PIPE, ELECTRICAL AND OTHER PRODUCTS . . . -2- City of Little Rock Little Rock, Arkansas May 3, 1963 indicated, which will inure to the benefit of the undersigned, and for other valuable considerations, the receipt of which is hereby acknowledged by the City, the undersigned agrees with the City as follows : 1 . The undersigned will pay to the City the sum of Ten Thousand Dollars ($10,000) annually with the first such payment to be made on April 20, 1965 , and with payments in said amount to be made on each April 20 during the initial and any renewal term of the Lease and Agreement, and with such payments being a required business ex- pense of the undersigned. After the third annual payment has been made the undersigned will discuss with the City the feasibility of adjusting subsequent annual payments to a figure that is commensurate with the then current status of its business . The undersigned re- serves the right to make monthly, rather than annual, payments and if the undersigned elects to make monthly payments it- agrees to pay one-twelfth ( 1/12) of the specified annual payment on the first business day of each month. 2. The said annual payments to be made by the undersigned, pursuant to this instrument as aforesaid, are intended to be in lieu of all ad valorem taxes that would have to be paid on the Project leased by the undersigned in said Lease and Agreement to the State of Arkansas, Pulaski County, the City, School Districts and/or other political sub- divisions of the State of Arkansas if the Project were not exempt from ad valorem taxes under the provisions of Article 16, Section 5 of the Constitution of the State of Arkansas as interpreted by the Supreme Court of the State of Arkansas in Wayland v. Snapp, supra. 3. If by reason of a change in the Constitution, a change by the Supreme Court of the State of Arkansas in its interpretation of the Constitution or otherwise, the undersigned is required to pay any tax which the payments specified herein are intended to be in lieu of (as defined in paragraph 2 hereof) , the undersigned may deduct the aggregate of any such payments made by it from the amount herein agreed to be paid in lieu of taxes and need only pay the difference to the City. Furthermore, inasmuch as the payment herein agreed to be made by the undersigned is intended to be in lieu of taxes, it is agreed that said payment shall not as to any year be in an amount greater than would be payable for such year in ad valorem taxes, in the aggregate, by a private corporation on account of its ownership of the Project. 4. The agreement herein made by the undersigned shall terminate and be of no further force and effect from and after the date that the Lease and Agreement shall terminate for any purpose other than a default on the part of the undersigned. If such termination shall be at a point constituting a portion of a year, the undersigned shall pay for the year in which termination occurred that proportion of the specified annual payment that the number of days in such year that the undersigned was Lessee prior to the termination bears to 365 days . --3 _>' City of Little Rock • Little Rock, Arkansas April 11, 1963 The reference to "year" shall mean the fiscal year beginning May 1 of each year and ending April 30 of the following year. 5. This agreement shall be binding upon the successors and assigns of the undersigned, but no assignment shall be effective . to relieve the undersigned of any of its obligations hereunder unless expressly authorized and approved in writing by the City. If the foregoing is acceptable, please so indicate by executing the acceptance set forth below and returning one copy to the undersigned, whereupon this instrument shall constitute a valid and binding con- tract between the undersigned and the City. DOWSMITH, INC. ATTEST: By Secretary Vice President (SEAL) • Accepted and agreed to this 3rd day of May, 1963. CITY OF LITTLE ROCK, ARKANSAS ATTEST: 1 By / Mayor City Clerk (SEAL) • . , . ... , , ._ . _ . . ,„ . . , .. . , . , . _ _, , ,,, . _ 0 . .. , .., ,,., _ .' _ SECTION 3 . This resolution shall be in full force and effect from and after its adoption. ADOPTED: May 6, 1963 k___ xem) APPROVED: 4 /2. City Clerk ayor .