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HomeMy WebLinkAbout5804 RESOLUTION NO 5,804 A RESOLUTION AUTHORIZING A MEMORANDUM OF INTENT BY AND BETWEEN THE CITY OF LITTLE ROCK, ARKANSAS AND CAMPBELL TAGGART, INC. PERTAINING TO THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS FOR FINANCING THE COSTS OF ACQUIRING, CONSTRUCTING AND EQUIPPING INDUSTRIAL FACILITIES; AND PRESCRIBING OTHER MATTERS RELATING THERETO. BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF LITTLE ROCK, ARKANSAS. SECTION 1 . That there be, and there is hereby authorized the execution and delivery of a Memorandum of Intent by and between the City of Little Rock, Arkansas (the "Municipality") , and Campbell Taggart, Inc. (the "Company") , in substantially the form and with substantially the contents hereinafter set forth, and the Mayor and City Clerk be, and they are hereby authorized to execute and deliver the Memorandum of Intent for and on behalf of the Munici- pality. The form and contents of the Memorandum of Intent, which are approved and which are made a part hereto, shall be substantially as follows : MEMORANDUM OF INTENT This MEMORANDUM OF INNTENT is between the City of Little Rock, Arkansas, party of the first part (hereinafter referred to as the "City") , and Campbell Taggart, Inc. , a Delaware corporation, party of the second part (hereinafter referred to as the "Company") . IN CONSIDERATION of the undertakings of the parties set forth herein and the benefits to be derived therefrom and of other good and valuable considerations , receipt of which is hereby ack- nowledged by the parties , the City and the Company AGREE: 1. Preliminary Statement. (a) The City is a duly organized and existing city of the first class under the laws of the State of Arkansas and is authorized by the laws of the State of Arkansas , including particularly Act No. 9 of the First Extraordinary Session of the Sixty-Second General Assembly of the State of Arkansas , approved January 21, 1960 , as amended ("Act 9") , to issue refunding bonds to refund revenue bonds issued under Act 9 for financing the costs of acquiring, constructing and equipping industrial facilities (as defined in and authorized by Act 9) , payable from revenues derived from, and secured by a lien on and security interest in, the industrial facilities involved. (b) In 1970 , to secure and develop industry, provide employment and add to the welfare and prosperity of the City and its inhabitants, the City, proceeding under Act 9 , furnished the permanent financing of the costs of acquiring, constructing and -2- equipping industrial facilities (the "Merico Project") by the issuance of City of Little Rock, Arkansas Industrial Development Revenue Bonds , Merico Project - Series A, dated December 1, 1970 , in the principal amount of $3 ,300 ,000 , maturing annually on December 1 in each of the years 1972 to 1990 , inclusive, but subject to optional redemption prior to maturity on and after December 1, 1980 (the "Outstanding Bonds") . The Project is owned by the City and leased to Merico, Inc. , a Texas corporation ("Merico") , by a Lease and Agreement dated as of December 1, 1970 (the "Out- standing Lease Agreement") . Merico, Inc. , is a wholly owned subsidiary of the Company and the Company has guaranteed performance by Merico under the Outstanding Lease Agreement by a document designated "Campbell Taggart Guaranty Agreement" , dated December 21, 1970 , accepted and relied upon by the City and The Commercial National Bank of Little Rock, Little Rock, Arkansas, Trustee for the Out- standing Bonds (the "Trustee") . The Outstanding Bonds are issued under and secured by the provisions of a Trust Indenture by and between the City and the Trustee, dated as of December 1, 1970 (the "Outstanding Indenture") . (c) The Company has requested the City to refund the Outstanding Bonds by issuing City of Little Rock, Arkansas Industrial Development Revenue Refunding Bonds - Merico Project, under Act 9 (the "Refunding Bonds") , pursuant to a refunding plan substantially as follows : The Refunding Bonds will be issued in the principal amount necessary to accomplish the refunding of the Outstanding Bonds and pay the expenses of authorizing and issuing the Refunding Bonds . -3- The necessary amount of the Refunding Bonds will be used to purchase U. S. Government obligations (Government Book Entry Securities purchased from the Federal Reserve System) which will be deposited in escrow pursuant to the terms of an escrow agreement between the City and the Trustee. The interest earned on the Govern- ment obligations will be used to pay interest on the Refunding Bonds until the first call date, December 1, 1980 , on which date the Out- standing Bonds will be called and paid with the proceeds received from the liquidation of the Government obligations. The rental pay- ments under the Outstanding Lease will be used to pay Debt Service on the Outstanding Bonds through December 1, 1980 , and thereafter, the lease rentals will be used to pay Debt Service on the Refunding Bonds . Thereafter, the Refunding Bonds will be secured by a pledge of revenues derived from the Project, including particularly the lease rentals and by a lien on and security interest in the Project. (d) The proposed refunding is in accordance with express authority set forth in Act 9 and is in furtherance of the public purposes of Act 9 in that it will result in a restructuring of the Company's obligations by lengthening the bond maturity schedule and lowering the interest rate, which will reduce the annual rental obligations , thus enhancing the Company's position to continue operations and employment at a high level and increase the Company' s ability to continue to add employees and payroll expenditures. 2 . Undertakings on the Part of the City. Subject to the conditions above stated, the City agrees as follows : -4- (a) That when requested by the Company, it will authorize and take, or cause to be taken, the necessary steps to issue the Refunding Bonds under Act 9 , in the aggregate principal amount necessary to accomplish the refunding of the Outstanding Bonds in accordance with the refunding plan set forth above. (b) That it will , at the proper time and subject in all respects to the recommendation and approval of the Company, have the Refunding Bonds underwritten and will adopt, or cause to be adopted, such proceedings and authorize the execution of such agreements and instruments as may be necessary and advisable for the authorization, sale and issuance of the Refunding Bonds , the defeasance and payment of the Outstanding Bonds in accordance with the refunding plan, and the carrying out of the refunding plan, all in conformity with the provisions of Act 9 and any other applicable federal and state laws and upon terms and conditions mutually satisfactory to the City and the Company. (c) That it will take or cause to be taken such other acts and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pur- suance thereof. 3 . Undertakings on the Part of the Company. Subject to the conditions above stated, the Company agrees as follows : (a) That it will cooperate with the City in the sale and issuance of the Refunding Bonds to the end of achieving timely and favorable marketing thereof. -5- (b) That it will enter into such agreements and other instruments as may be necessary for leasing of the Project for sufficient rentals (which will be guaranteed by the Company) to accomplish the refunding and to carry out the refunding plan. (c) That it will take such further action and adopt such further proceedings as may be required to implement its aforesaid undertakings or as it may deem appropriate in pursuance thereof. 4 . General Provisions . (a) This Memorandum shall con- tinue in full force and effect until the refunding, as herein specified, is accomplished in accordance with the refunding plan. (b) It is understood that Merico will continue as Lessee and the Company will continue as Guarantor and that the Company shall see that the necessary corporate authority from each cor- poration is taken in connection with all action required, by each corporation to accomplish the refunding in accordance with the refunding plan and to otherwise carry out the obligations of Merico and the Company set forth herein or contemplated hereby. IN WITNESS WHEREOF, the parties hereto have entered into this Memorandum by their officers thereunto duly authorized as of the day of , 1977 . CITY OF LITTLE ROCK, ARKANSAS ATTEST: By Mayor City Clerk (SEAL) t • -6- CAMPBELL TAGGART, INC. ATTEST: By (Title) (Title) (SEAL) -8- SECTION 2. That the Mayor and City Clerk be and they are hereby authorized and directed, for and on behalf of the Municipality to do all things , execute all instruments and otherwise take all action necessary to the reqlization of the Municipality ' s obligations under the Memorandum of Intent. SECTION 3 . This Resolution shall be in full force and effect from and after its adoption. ADOPTED: September 20, 1977 ATTEST: APPROVED: ‘• City Cler Mayor