HomeMy WebLinkAbout20737 2013045637 Received: 6/20/2013 11:03:42 AM
Recorded: 06/20/2013 11:10:22 AM Filed&
Recorded in Official Records of Larry Crane,
PULASKI COUNTY CIRCUIT/COUNTY CLERK
1 ORDINANCE NO. 20,737 ees$40.00
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 AN AMENDED PAYMENT IN LIEU OF TAXES
11 AGREEMENT IN CONNECTION THEREWITH; AUTHORIZING THE
12 EXECUTION AND DELIVERY OF A SECOND SUPPLEMENTAL
13 TRUST INDENTURE SECURING THE BONDS; AUTHORIZING AND
14 PRESCRIBING CERTAIN MATTERS PERTAINING TO THE
15 INDUSTRIAL PROJECT, THE ACQUISITION, CONSTRUCTION, AND
16 EQUIPPING THEREOF, AND THE FINANCING THEREOF;
17 AUTHORIZING THE EXECUTION AND DELIVERY OF A SECOND
18 AMENDMENT TO LEASE AGREEMENT RELATING TO THE
19 PROJECT; PRESCRIBING OTHER MATTERS RELATING THERETO;
20 AND DECLARING AN EMERGENCY.
21
22 WHEREAS, the City of Little Rock, Arkansas is authorized by the Municipalities and Counties
23 Industrial Development Revenue Bond Law, as amended, Ark. Code Ann. §§ 14-164-201 to -224 (the
24 "Act"), to acquire lands, construct and equip industrial buildings, improvements, and facilities, and incur
25 other costs and expenses and make other expenditures incidental to and for the implementing and
26 accomplishing of the conduct of industrial operations; and
27 WHEREAS, the City is authorized by the Act to issue Industrial Development Revenue Bonds
28 payable from revenues derived from the industrial project so acquired, constructed, and equipped;and
29 WHEREAS, the City has previously issued its Twenty-Six Million, Two Hundred Fifty Thousand
30 Dollars ($26,250,000) Taxable Industrial Development Revenue Bonds (Welspun Tubular LLC Pro ot);""1 ,,''.,
31 Series 2012-A, dated May 29, 2012, and Five Million Dollars ($5,000,000) Taxable I$ ?
Y�
:L...Y
•
32 Development Subordinate Lien Refunding Revenue Bonds (Welspun Tubular LLC Project), Seri 1 ` G=_
[Page 1 of 61 %:°4 \ % `1/40o;
'''h c0'UNM,`,,,,,
1 B, dated May 29, 2012, and its Twenty-Eight Million, Seven Hundred Fifty Thousand Dollars
2 ($28,750,000) Taxable Industrial Development Revenue Bonds (Welspun Tubular LLC Project), Series
3 2012-C (ERW), dated August 24, 2012, pursuant to a Trust Indenture, dated as of April 1, 2012, as
4 supplemented by a First Supplemental Trust Indenture, dated as of July 1, 2012 (the Trust Indenture, as
5 supplemented by the First Supplemental Trust Indenture, is referred to as the "Original Indenture"), by
6 and between the City and Regions Bank, as Trustee (the "Trustee"), for the purpose of financing and
7 refinancing a substantial industrial project consisting of the acquisition of land and buildings,construction
8 and renovation of buildings, and acquisition and installation of equipment, all located at 8200 Frazier
9 Pike, Little Rock, Arkansas, 72206 (the "Original Project"), which is leased to Welspun Tubular, LLC
10 (the "Company"), pursuant to a Lease Agreement, dated as of April 1, 2012, as amended by a First
11 Amendment to Lease Agreement, dated as of July 1, 2012 (the Lease Agreement, as amended by the First
12 Amendment to Lease Agreement, is referred to as the "Original Lease"), and utilized in the Company's
13 business of manufacturing steel pipes;and
14 WHEREAS, the Company has evidenced its interest in acquiring, constructing, and equipping
15 improvements and additions to the facilities located at 8200 Frazier Pike(the "2013 Project"; the Original
16 Project together with the 2013 Project is referred to as the "Project") if the permanent financing can be
17 provided through the issuance of bonds under the authority of the Act; and
18 WHEREAS, to provide permanent financing of a portion of the costs of the 2013 Project, the City
19 will issue a series of its taxable Industrial Development Revenue Bonds under the provisions of the Act
20 designated "City of Little Rock, Arkansas Taxable Industrial Development Subordinate Lien Revenue
21 Bonds (Welspun Tubular LLC Project), Series 2013 (ERW)," in the principal amount of Ten Million
22 Dollars ($10,000,000) (the "Series 2013 (ERW) Bonds"; the Series 2012-A Bonds, the Series 2012-B
23 Bonds,the Series 2012-C (ERW) Bonds, and the Series 2013 (ERW) Bonds are referred to collectively as
24 the"Bonds"); and
25 WHEREAS, the Series 2012-C (ERW) Bonds will be issued pursuant to the provisions of the
26 Original Indenture, as supplemented by a Second Supplemental Trust Indenture, dated as of July 1, 2013
27 (the"Second Supplemental Trust Indenture"), between the City and the Trustee; and
28 WHEREAS, the Original Lease will be amended to add the 2013 Project and make other provisions
29 relating to the Series 2013 (ERW) Bonds pursuant to a Second Amendment to Lease Agreement, dated as
30 of July 1, 2013 (the "Second Amendment to Lease Agreement"; the Original Lease, as amended by the
31 Second Amendment to Lease Agreement, is referred to as the "Lease Agreement"), by and between the
32 City and the Company; and
33 WHEREAS, to induce the City to proceed with the issuance of the Series 2013 (ERW) Bonds for the
34 purposes indicated, which will inure to the benefit of the Company, the City and the Company will enter
[Page 2of61
1 into an Amended Payment in Lieu of Taxes Agreement(the "Amended PILOT Agreement") with respect
2 to the Project; and
3 WHEREAS, an open public hearing on the question of the issuance of the Series 2013 (ERW)Bonds
4 was held before the Board of Directors of the City of Little Rock on March 6, 2012, following publication
5 of notice in the Daily Record on February 23, 2012, and the Arkansas Democrat-Gazette on February 25,
6 2012, and that having heard all persons desiring to be heard in the matter, the City took under advisement
7 the comments and statements of such persons, and declared the public hearing duly closed; and
8 WHEREAS, the City proposes to sell the Series 2013 (ERW) Bonds to Welspun Pipes, Inc. (the
9 "Purchaser"), pursuant to a Bond Purchase Agreement by and between the City and the Purchaser; and
10 WHEREAS, the 2013 Project will furnish additional employment and other benefits to and be in the
11 best interest of the City and its residents;
12 NOW, THEREFORE, BE IT ORDAINED BY THE BOARD OF DIRECTORS OF THE CITY
13 OF LITTLE ROCK,ARKANSAS that:
14 Section 1. There be, and there is hereby authorized and directed the following:
15 (a) The issuance of the Series 2013 (ERW) Bonds in the principal amount of Ten Million Dollars
16 ($10,000,000) and the sale of the Series 2013 (ERW) Bonds to the Purchaser for a price of par upon the
17 terms and conditions set forth in the Bond Purchase Agreement.
18 (b) The execution and delivery of the Bond Purchase Agreement by the Mayor on behalf of the City
19 generally in the form submitted to this meeting, it being understood that subsequent changes thereto shall
20 be approved by the Mayor or such other person or persons executing the document, their execution to
21 constitute conclusive evidence of such approval without further consent or approval by the City. An
22 executed copy of the Bond Purchase Agreement shall be filed in the office of the City Clerk.
23 (c) The execution and delivery of the Amended PILOT Agreement by the Mayor on behalf of the
24 City, with such changes as shall be approved by such persons executing the document, its execution to
25 constitute conclusive evidence of such approval. An executed copy of the Amended PILOT Agreement
26 shall be filed in the office of the City Clerk.
27 (d)The acquisition, construction, and equipping of the 2013 Project, and, in connection therewith, the
28 execution of any necessary architectural, engineering, or construction contracts or the acceptance of an
29 assignment of any such contracts previously executed by the Company for the construction and equipping
30 of the 2013 Project.
31 (e) The performance of all obligations of the City under the Lease Agreement pertaining to the
32 acquisition, construction, and equipping of the Project.
33 (0 The granting in favor of the Trustee of mortgage liens encumbering the Project and the granting of
34 security interests in and the equipment and personal property located within the Project.
[Page 3 of 61
1 (g) The collateral assignment of the Lease Agreement and all amendments thereto to the Trustee as
2 security for the payment of the Bonds.
3 Section 2. The Series 2013 (ERW) Bonds shall be dated the date of their initial authentication and
4 delivery, shall bear interest from such date, shall mature (subject to prior redemption) on July 1, 2018,
5 and shall bear interest at the rate of 5.50% per annum payable as described in the Indenture. The Series
6 2013 (ERW) Bonds shall be subordinate as to security, repayment, and interest with the Series 2012-A
7 Bonds the Series 2013-C (ERW) Bonds, and bonds issued on a parity of security with the Series 2012-A
8 Bonds and the 2013-C (ERW) Bonds, if any. The Series 2013 (ERW) Bonds shall be on a parity of
9 security with the Series 2012-B Bonds.
10 Section 3. To provide the terms and conditions upon which the Series 2013 (ERW) Bonds are to be
11 secured, executed, authenticated, issued, accepted, and held, the Mayor is hereby authorized and directed
12 to execute and acknowledge the Second Supplemental Trust Indenture, and the City Clerk is hereby
13 authorized and directed to execute and acknowledge the Second Supplemental Trust Indenture and to
14 affix the seal of the City thereto, and the Mayor and City Clerk are hereby authorized and directed to
15 cause the Second Supplemental Trust Indenture to be accepted, executed, and acknowledged by the
16 Trustee without further consent or approval by the City. The Second Supplemental Trust Indenture is
17 hereby approved in generally the form submitted to this meeting, and the Mayor is hereby authorized to
18 confer with the Trustee, the Company, and the Purchaser in order to complete the Second Supplemental
19 Trust Indenture in generally the form submitted to this meeting, it being understood that subsequent
20 changes thereto shall be approved by the Mayor or such other person or persons executing the documents,
21 their execution to constitute conclusive evidence of such approval without further consent or approval by
22 the City with such changes as shall be approved by such.
23 (Notice is given that, pursuant to the Act, a copy of the Second Supplemental Trust
24 Indenture, in generally the form authorized to be executed, is on file with the City Clerk
25 of the City of Little Rock and are available for inspection by any interested person.)
26 Section 4. There be, and there is hereby, authorized and directed the execution and delivery of the
27 Second Amendment to Lease Agreement, and the Mayor and City Clerk are hereby authorized to execute,
28 acknowledge, and deliver the Second Amendment to Lease Agreement for and on behalf of the City. The
29 Second Amendment to Lease Agreement is hereby approved in generally the form submitted to this
30 meeting, and the Mayor is hereby authorized to confer with the Company, the Trustee, and the Purchaser
31 in order to complete the Second Amendment to Lease Agreement in generally the form submitted to this
32 meeting, it being understood that subsequent changes thereto shall be approved by the Mayor or such
33 other person or persons executing the document, their execution to constitute conclusive evidence of such
34 approval.
lPage 4 of 61
1 (Notice is given that, pursuant to the Act, a copy of the Second Amendment to Lease
2 Agreement, in generally the form authorized to be executed, is on file with the City Clerk
3 of the City of Little Rock and is available for inspection by any interested person.)
4 Section 5. The Mayor and City Clerk, for and on behalf of the City, be, and they are hereby
5 authorized and directed to do any and all things necessary to effect the execution of the Second
6 Amendment to Lease Agreement and the performance of the City's obligations under the Lease
7 Agreement; the execution and delivery of the Second Supplemental Trust Indenture, including without
8 limitation the mortgage lien and security interests granted therein, its execution and acceptance by the
9 Trustee, and the performance of all obligations of the City under and pursuant to the Indenture; the
10 execution and delivery of the Series 2013 (ERW) Bonds, the Bond Purchase Agreement, and the
11 Amended PILOT Agreement; and the performance of all other acts of whatever nature necessary to effect
12 and carry out the authority conferred by this Ordinance. The Mayor and the City Clerk are further
13 authorized and directed, for and on behalf of the City, to execute all papers, documents, certificates, and
14 other instruments that may be required for the carrying out of such authority or to evidence the exercise
15 thereof.
16 Section 6. Since the City is here involved with the acquisition, constructing, and equipping of a
17 complex industrial project, requiring highly specialized work and specialized types of machinery and
18 equipment, it has been and is hereby determined by the Board of Directors that competitive bidding be,
19 and the same is hereby, waived as to this particular industrial project. This action is taken by the Board of
20 Directors pursuant to applicable laws of the State of Arkansas, including particularly the Act.
21 Section 7. All actions heretofore taken by the City, the Company, and the Purchaser in connection
22 with the offer and sale of the Series 2013 (ERW) Bonds are hereby in all respects ratified and approved.
23 Section 8. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or
24 word of this ordinance is declared or adjudged to be invalid or unconstitutional, such declaration or
25 adjudication shall not affect the remaining portions of this ordinance, which shall remain in full force and
26 effect as if the portion so declared or adjudged invalid or unconstitutional was not originally a part of this
27 ordinance.
28 Section 9.Repealer. All ordinances or resolutions of the City in conflict herewith are hereby repealed
29 to the extent of such conflict.
30 Section 10. There is hereby found and declared to be an immediate need for the securing and
31 developing of substantial industrial operations in order to provide additional employment, alleviate
32 unemployment, and otherwise benefit the public health, safety, and welfare of the City and the inhabitants
33 thereof, and the issuance of the Series 2013 (ERW) Bonds authorized hereby and the taking of the other
34 action authorized herein are immediately necessary in connection with the securing and developing of
[Page 5 of 6J
1 substantial industrial operations and deriving the public benefits referred to above. It is therefore, declared
2 that an emergency exists and this Ordinance, being necessary for the immediate preservation of the public
3 health, safety,and welfare, shall be in force and take effect immediately upon and a -r its passage.
4 PASSED: June 18,2013
5 ATTEST: APPROVE .
7 •� /
8 Susan . gle , ' Clerk Mark Stodola;Mayor
9 APPR I D S T LEGAL FORM:
10 wJ /2 /il
12 Thomas M. Carpenter,City Attornj� v
13 // u
14 //
15 //
16 //
17 //
18 //
19 //
20 //
21 //
22 //
23 //
24 //
25 //
26 //
27 //
28 //
29 //
30 //
31 //
32 //
33 //
34 //
35 //
[Page 6 of 61