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HomeMy WebLinkAbout19838ORDINANCE NO. 19,838 2 3 AN ORDINANCE AUTHORIZING THE ISSUANCE OF INDUSTRIAL 4 DEVELOPMENT REVENUE BONDS UNDER THE MUNICIPALITIES s AND COUNTIES INDUSTRIAL DEVELOPMENT REVENUE BOND 6 LAW FOR THE PURPOSE OF SECURING AND DEVELOPING 7 INDUSTRY (WELSPUN TUBULAR LLC); AUTHORIZING THE SALE 8 OF THE BONDS AND THE APPROVAL OF A BOND PURCHASE 9 AGREEMENT; AUTHORIZING THE EXECUTION AND DELIVERY 10 OF A FIRST SUPPLEMENTAL TRUST INDENTURE SECURING THE 11 BONDS; AUTHORIZING AND PRESCRIBING CERTAIN MATTERS 12 PERTAINING TO THE INDUSTRIAL PROJECT, THE ACQUISITION, 13 CONSTRUCTION, AND EQUIPPING THEREOF, AND THE 14 FINANCING THEREOF; AUTHORIZING THE EXECUTION AND 15 DELIVERY OF A FIRST AMENDMENT TO LEASE AGREEMENT 16 RELATING TO THE PROJECT; PRESCRIBING OTHER MATTERS 17 RELATING THERETO; AND DECLARING AN EMERGENCY. 18 19 WHEREAS, the City of Little Rock, Arkansas is authorized by the Municipalities 20 and Counties Industrial Development Revenue Bond Law, Ark. Code Ann. §§ 14 -164- 21 201 to —224 (the "Act "), to acquire lands, construct and equip industrial buildings, 22 improvements, and facilities, and incur other costs and expenses and make other 23 expenditures incidental to and for the implementing and accomplishing of the conduct 24 of industrial operations; and Ordinance Authorizing $50,000,000 Taxable Act 9 Bonds for Welspun Tubular LLC [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 assigned its interest in the Agreement to Issue Bonds to its 10 affiliate, Welspun Tubular LLC (the "Company "), with the consent of the City; and I 1 WHEREAS, the necessary arrangements have been made with the Company for 12 a substantial industrial project consisting of the acquisition of approximately 800 acres 13 of land, construction of buildings, and acquisition of equipment, all located at 9301 14 Frazier Pike, Little Rock, Arkansas 72206 (the "Project "), to be utilized in the Company's 15 business of manufacturing steel pipes; and 16 WHEREAS, the Project has been leased to the Company pursuant to the terms of 17 a Lease Agreement, dated as of August 1, 2007 (the "Lease Agreement "), for a term of 18 30 years; and 19 WHEREAS, to provide permanent financing of a portion of the Project costs, 20 necessary costs and expenditures incidental thereto, and the cost of the issuance of 21 bonds, the City issued an initial series of its taxable industrial development revenue 22 bonds under the provisions of the Act designated "City of Little Rock, Arkansas 23 Taxable Industrial Development Revenue Bonds (Welspun Tubular, L.L.C. Project), 24 Series 2007 -A," in the principal amount of $11,000,000 (the "Series 2007 -A Bonds "); and 25 WHEREAS, to provide permanent financing of an additional portion of the 26 Project costs, necessary costs and expenditures incidental thereto, and the cost of the 27 issuance of bonds, the City will issue additional series of its taxable industrial [Page 2 of 7] I development revenue bonds under the provisions of the Act designated "City of Little 2 Rock, Arkansas Taxable Industrial Development Revenue Bonds (Welspun Tubular 3 LLC Project), Series 2007 -B," in the principal amount of $50,000,000 (the "Series 2007 -B 4 Bonds "); and s WHEREAS, the Series 2007 -A Bonds were issued pursuant to the provisions of a 6 Trust Indenture, dated as of August 1, 2007 (the "Trust Indenture "), between the City 7 and Regions Bank, as Trustee (the "Trustee "); and 8 WHEREAS, the Series 2007 -B Bonds will be issued pursuant to the provisions of 9 a First Supplemental Trust Indenture, dated as of November 1, 2007 (the "First 10 Supplemental Trust Indenture "), to be entered into between the City and the Trustee; 11 and 12 WHEREAS, an open public hearing on the question of the issuance of the Bonds 13 was held before the Board of Directors of the City on July 10, 2007, following 14 publication of notice in the Arkansas Democrat - Gazette on June 30, 2007; and 15 WHEREAS, the City proposes to sell the Series 2007 -B Bonds to Export- Import 16 Bank of India (the "Series 2007 -B Purchaser ") pursuant to a Series 2007 -B Bond 17 Purchase Agreement by and between the City and the Series 2007 -B Purchaser; 18 WHEREAS, the completion of the Project will furnish additional employment 9 and other benefits to and be in the best interest of the City and its residents; 20 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS 21 OF THE CITY OF LITTLE ROCK, ARKANSAS that: 22 Section 1. There be, and there is hereby authorized and directed the following: 23 (a) The issuance of the Series 2007 -B Bonds in the principal amount of $50,000,000 24 and the sale of the Series 2007 -B Bonds to the Series 2007 -B Purchaser for a price of 25 $50,000,000 upon the terms and conditions set forth in the Series 2007 -B Bond Purchase 26 Agreement. [Page 3 of 7] I (b) The execution and delivery of the Series 2007 -B Bond Purchase Agreement by 2 the Mayor on behalf of the City, in substantially the form submitted to this meeting, 3 with such changes as shall be approved by such persons executing the document, their 4 execution to constitute conclusive evidence of such approval. An executed copy of the 5 Series 2007 -B Bond Purchase Agreement shall be filed in the office of the City Clerk. 6 Section 2. The Series 2007 -B Bonds shall be dated the date of their initial 7 authentication and delivery, shall bear interest from such date, shall mature (subject to s prior redemption) or be subject to mandatory sinking fund redemption in 20 equal 9 quarterly installments commencing one year from the date of commencement of 10 commercial production of the Project provided that the final maturity date shall be not 11 later than seven years following their dated date, and shall bear interest at a floating 12 rate of interest as described in the First Supplemental Trust Indenture. The Series 2007 -B 13 Bonds shall be issued on a parity of security with the Series 2007 -A Bonds. 14 To provide the terms and conditions upon which the Series 2007 -B Bonds are to 15 be secured, executed, authenticated, issued, accepted, and held, the Mayor is hereby 16 authorized and directed to execute and acknowledge the First Supplemental Trust 17 Indenture, and the City Clerk is hereby authorized and directed to execute and 18 acknowledge the First Supplemental Trust Indenture and to affix the seal of the City 19 thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the 20 First Supplemental Trust Indenture to be accepted, executed, and acknowledged by the 21 Trustee. The First Supplemental Trust Indenture is hereby approved in substantially the 22 form submitted to this meeting, and the Mayor is hereby authorized to confer with the 23 Trustee, the Company, and the Series 2007 -B Purchaser in order to complete the First 24 Supplemental Trust Indenture in substantially the form submitted to this meeting with 25 such changes as shall be approved by such persons executing the documents, their 26 execution to constitute conclusive evidence of such approval. [Page 4 of 7] I (Notice is given that, pursuant to the Act, a copy of the First Supplemental 2 Trust Indenture, in substantially the form authorized to be executed, is on 3 file with the City Clerk of the City of Little Rock and are available for 4 inspection by any interested person.) 5 Section 3. There be, and there is hereby, authorized and directed the execution 6 and delivery of the First Amendment to Lease Agreement, and the Mayor and City 7 Clerk are hereby authorized to execute, acknowledge, and deliver the First Amendment 8 to Lease Agreement for and on behalf of the City. The First Amendment to Lease 9 Agreement is hereby approved in substantially the form submitted to this meeting, and 0 the Mayor is hereby authorized to confer with the Company, the Trustee, and the Series 11 2007 -B Purchaser in order to complete the First Amendment to Lease Agreement in 12 substantially the form submitted to this meeting, with such changes as shall be 13 approved by such persons executing the document, their execution to constitute 14 conclusive evidence of such approval. 15 (Notice is given that, pursuant to the Act, a copy of the First Amendment 16 to Lease Agreement, in substantially the form authorized to be executed, 17 is on file with the City Clerk of the City of Little Rock and is available for 18 inspection by any interested person.) 19 Section 4. The Mayor and City Clerk, for and on behalf of the City, be, and they 20 are hereby authorized and directed to do any and all things necessary to effect the 21 execution of the First Amendment to Lease Agreement, the performance of the City's 22 obligations under the Lease Agreement, as supplemented by the First Amendment to 23 Lease Agreement, the execution and delivery of the First Supplemental Trust Indenture, 24 its execution and acceptance by the Trustee, the performance of all obligations of the 25 City under and pursuant to the Trust Indenture, as supplemented by the First 26 Supplemental Trust Indenture, the execution and delivery of the Series 2007 -B Bonds, 27 the execution and delivery of the Series 2007 -B Bond Purchase Agreement, and the [Page 5 of 7] I performance of all other acts of whatever nature necessary to effect and carry out the 2 authority conferred by this Ordinance. The Mayor and the City Clerk are further 3 authorized and directed, for and on behalf of the City, to execute all papers, documents, 4 certificates, and other instruments that may be required for the carrying out of such 5 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 10 this particular industrial project. This action is taken by the Board of Directors pursuant 11 to applicable laws of the State of Arkansas, including particularly the Act. 12 Section 7. All actions heretofore taken by the City, the Company, and the Series 13 2007 -B Purchaser in connection with the offer and sale of the Series 2007 -B Bonds are 14 hereby in all respects ratified and approved. 15 Section 8. Severability. In the event any title, section, paragraph, item, sentence, 16 clause, phrase, or word of this ordinance is declared or adjudged to be invalid or 17 unconstitutional, such declaration or adjudication shall not affect the remaining 18 portions of this ordinance, which shall remain in full force and effect as if the portion so 19 declared or adjudged invalid or unconstitutional was not originally a part of this 20 ordinance. 21 Section 9. Repealer. All ordinances or resolutions of the City in conflict herewith 22 are hereby repealed to the extent of such conflict. 23 Section 10. There is hereby found and declared to be an immediate need for the 24 securing and developing of substantial industrial operations in order to provide 25 additional employment, alleviate unemployment, and otherwise benefit the public 26 health, safety, and welfare of the City and the inhabitants thereof, and the issuance of 27 the Bonds authorized hereby and the taking of the other action authorized herein are [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 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: October 16, 2007 ATTEST: APPROVED: / Nan Wo d, City Clerk Mark Stodola, Mayor APPROVED AS TO LEGAL FORM: Thomas M. Carpenter, City t orney H H H H H H H H H H H H H [Page 7 of 7]