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HomeMy WebLinkAbout19837I ORDINANCE NO. 19,837 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 (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 SECOND SUPPLEMENTAL TRUST INDENTURE SECURING 11 THE BONDS; AUTHORIZING AND PRESCRIBING CERTAIN 12 MATTERS PERTAINING TO THE INDUSTRIAL PROJECT, THE 13 ACQUISITION, CONSTRUCTION, AND EQUIPPING THEREOF, 14 AND THE FINANCING THEREOF; AUTHORIZING THE 15 EXECUTION AND DELIVERY OF A SECOND AMENDMENT TO 16 LEASE AGREEMENT RELATING TO THE PROJECT; PRESCRIBING 17 OTHER MATTERS RELATING THERETO; AND DECLARING AN 18 EMERGENCY. Irej 20 WHEREAS, the City of Little Rock, Arkansas is authorized by the Municipalities 21 and Counties Industrial Development Revenue Bond Law, Ark. Code Ann. §§ 14 -164- 22 201 to —224 (the "Act "), to acquire lands, construct and equip industrial buildings, 23 improvements, and facilities, and incur other costs and expenses and make other 24 expenditures incidental to and for the implementing and accomplishing of the conduct 25 of industrial operations; and Ordinance Authorizing $39,000,000 Taxable Act 9 Bonds for Welspun Tubular LLC [Page 1 of 71 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, s 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 11 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 A Bonds "), and 25 authorized a second series of its taxable industrial development revenue bonds under 26 the provisions of the Act designated "City of Little Rock, Arkansas Taxable Industrial [Page 2 of 7] i Development Revenue Bonds (Welspun Tubular LLC Project), Series 2007 -B," in the 2 principal amount of $50,000,000 (the "Series B Bonds "); and 3 WHEREAS, to provide permanent financing of an additional portion of the 4 Project costs, necessary costs and expenditures incidental thereto, and the cost of the s issuance of bonds, the City will issue additional series of its taxable industrial 6 development revenue bonds under the provisions of the Act designated "City of Little 7 Rock, Arkansas Taxable Industrial Development Revenue Bonds (Welspun Tubular s LLC Project), Series 2007 -C," in the principal amount of $39,000,000 (the "Series C 9 Bonds "); and 10 WHEREAS, the Series A Bonds were issued pursuant to the provisions of a Trust 11 Indenture, dated as of August 1, 2007 (the "Trust Indenture "), between the City and 12 Regions Bank, as Trustee (the "Trustee ") and the Series C Bonds will be issued pursuant 13 to the provisions of a First Supplemental Trust Indenture, dated as of November 1, 2007 14 (the "First Supplemental Trust Indenture "), between the City and the Trustee; and 15 WHEREAS, the Series C Bonds will be issued pursuant to the provisions of a 16 Second Supplemental Trust Indenture, dated as of November 1, 2007 (the "Second 17 Supplemental Trust Indenture "), to be entered into between the City and the Trustee; 18 and 19 WHEREAS, an open public hearing on the question of the issuance of the Bonds 20 was held before the Board of Directors of the City on July 10, 2007, following 21 publication of notice in the Arkansas Democrat - Gazette on June 30, 2007; and 22 WHEREAS, the City proposes to sell the Series C Bonds to Welspun Pipes, Inc. 23 (the "Series C Purchaser ") pursuant to a Series C Bond Purchase Agreement by and 24 between the City and the Series C Purchaser; 25 WHEREAS, the completion of the Project will furnish additional employment 26 and other benefits to and be in the best interest of the City and its residents; [Page 3 of 7] I NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS 2 OF THE CITY OF LITTLE ROCK, ARKANSAS that: 3 Section 1. There be, and there is hereby authorized and directed the following: 4 (a) The issuance of the Series C Bonds in the principal amount of $39,000,000 and 5 the sale of the Series C Bonds to the Series C Purchaser for a price of $39,000,000 upon 6 the terms and conditions set forth in the Series C Bond Purchase Agreement. 7 (b) The execution and delivery of the Series C Bond Purchase Agreement by the 8 Mayor on behalf of the City, in substantially the form submitted to this meeting, with 9 such changes as shall be approved by such persons executing the document, their 10 execution to constitute conclusive evidence of such approval. An executed copy of the 11 Series C Bond Purchase Agreement shall be filed in the office of the City Clerk. 12 Section 2. The Series C Bonds shall be dated the date of their initial 13 authentication and delivery, shall bear interest from such date, shall mature (subject to 14 prior redemption) or be subject to mandatory sinking fund redemption in 20 equal 15 quarterly installments commencing one year from the date of commencement of 16 commercial production of the Project provided that the final maturity date shall be not 17 later than seven years following their dated date, and shall bear interest at a floating 18 rate of interest as described in the Second Supplemental Trust Indenture. The Series C 19 Bonds shall be subordinate in security to the Series A Bonds and the Series B Bonds. 20 To provide the terms and conditions upon which the Series C Bonds are to be 21 secured, executed, authenticated, issued, accepted, and held, the Mayor is hereby 22 authorized and directed to execute and acknowledge the Second Supplemental Trust 23 Indenture, and the City Clerk is hereby authorized and directed to execute and 24 acknowledge the Second Supplemental Trust Indenture and to affix the seal of the City 25 thereto, and the Mayor and City Clerk are hereby authorized and directed to cause the 26 Second Supplemental Trust Indenture to be accepted, executed, and acknowledged by 27 the Trustee. The Second Supplemental Trust Indenture is hereby approved in [Page 4 of 7] I substantially the form submitted to this meeting, and the Mayor is hereby authorized to 2 confer with the Trustee, the Company, and the Series C Purchaser in order to complete 3 the Second Supplemental Trust Indenture in substantially the form submitted to this 4 meeting with such changes as shall be approved by such persons executing the 5 documents, their execution to constitute conclusive evidence of such approval. 6 (Notice is given that, pursuant to the Act, a copy of the Second 7 Supplemental Trust Indenture, in substantially the form authorized to be s executed, is on file with the City Clerk of the City of Little Rock and are 9 available for inspection by any interested person.) 10 Section 3. There be, and there is hereby, authorized and directed the execution 11 and delivery of the Second Amendment to Lease Agreement, and the Mayor and City 12 Clerk are hereby authorized to execute, acknowledge, and deliver the Second 13 Amendment to Lease Agreement for and on behalf of the City. The Second Amendment 14 to Lease Agreement is hereby approved in substantially the form submitted to this 15 meeting, and the Mayor is hereby authorized to confer with the Company, the Trustee, 16 and the Series C Purchaser in order to complete the Second Amendment to Lease 17 Agreement in substantially the form submitted to this meeting, with such changes as 18 shall be approved by such persons executing the document, their execution to constitute 19 conclusive evidence of such approval. 20 (Notice is given that, pursuant to the Act, a copy of the Second 21 Amendment to Lease Agreement, in substantially the form authorized to 22 be executed, is on file with the City Clerk of the City of Little Rock and is 23 available for inspection by any interested person.) 24 Section 4. The Mayor and City Clerk, for and on behalf of the City, be, and they 25 are hereby authorized and directed to do any and all things necessary to effect the 26 execution of the Second Amendment to Lease Agreement, the performance of the City's 27 obligations under the Lease Agreement, as supplemented by the First Amendment to [Page 5 of 7] I Lease Agreement and the Second Amendment to Lease Agreement, the execution and 2 delivery of the Second Supplemental Trust Indenture, its execution and acceptance by 3 the Trustee, the performance of all obligations of the City under and pursuant to the 4 Trust Indenture, as supplemented by the First Supplemental Trust Indenture and the s Second Supplemental Trust Indenture, the execution and delivery of the Series C Bonds, 6 the execution and delivery of the Series C Bond Purchase Agreement, and the 7 performance of all other acts of whatever nature necessary to effect and carry out the 8 authority conferred by this Ordinance. The Mayor and the City Clerk are further 9 authorized and directed, for and on behalf of the City, to execute all papers, documents, 10 certificates, and other instruments that may be required for the carrying out of such 11 authority or to evidence the exercise thereof. 12 Section 5. Since the City is here involved with the acquisition, constructing, and 13 equipping of a complex industrial project, requiring highly specialized work and 14 specialized types of machinery and equipment, it has been and is hereby determined by 15 the Board of Directors that competitive bidding be, and the same is hereby, waived as to 16 this particular industrial project. This action is taken by the Board of Directors pursuant 17 to applicable laws of the State of Arkansas, including particularly the Act. 18 Section 7. All actions heretofore taken by the City, the Company, and the Series 19 C Purchaser in connection with the offer and sale of the Series C Bonds are hereby in all 20 respects ratified and approved. 21 Section 8. Severability. In the event any title, section, paragraph, item, sentence, 22 clause, phrase, or word of this ordinance is declared or adjudged to be invalid or 23 unconstitutional, such declaration or adjudication shall not affect the remaining 24 portions of this ordinance, which shall remain in full force and effect as if the portion so 25 declared or adjudged invalid or unconstitutional was not originally a part of this 26 ordinance. [Page 6 of 7] I Section 9. Repealer. All ordinances or resolutions of the City in conflict herewith 2 are hereby repealed to the extent of such conflict. 3 Section 10. There is hereby found and declared to be an immediate need for the 4 securing and developing of substantial industrial operations in order to provide 5 additional employment, alleviate unemployment, and otherwise benefit the public 6 health, safety, and welfare of the City and the inhabitants thereof, and the issuance of 7 the Bonds authorized hereby and the taking of the other action authorized herein are 8 immediately necessary in connection with the securing and developing of substantial 9 industrial operations and deriving the public benefits referred to above. It is therefore, 10 declared that an emergency exists and this Ordinance, being necessary for the 11 immediate preservation of the public health, safety, and welfare, shall be in force and 12 take effect immediately upon and after its passage. 13 PASSED: October 16, 2007 14 ATTEST: 15 16 17 Nan y Woo , City Clerk 18 APPROVED AS TO LEGAL FORM: 19 20 21 Thomas M. Carpenter, Cit Attorney 22 // 23 // 24 // 25 // 26 H 27 APPROVED: ��/ I /",,/ � 'K0, , Mark Stodola, Mayor [Page 7 of 7]