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HomeMy WebLinkAbout6181 RESOLUTION 6,181 A RESOLUTION AUTHORIZING A MEMORANDUM OF AGREEMENT BY AND BETWEEN THE CITY OF LITTLE ROCK, ARKANSAS , AND ARKANSAS PRECISION MACHINING INC. PERTAINING TO THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS FOR FINANCING THE COSTS OF ACQUIRING, CON- STRUCTING AND EQUIPPING INDUSTRIAL DEVELOPMENT FACILITIES ; AUTHORIZING AN APPLICATION FOR GUARANTY OF THE BONDS BY THE ARKANSAS ECONOMIC DEVELOPMENT COMMISSION; 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 Agreement by and between the City of Little Rock, Arkansas (the "Municipality") , and Arkansas Precision Machining Inc. , an Arkansas corporation, in substantially the form and with substantially the contents herein- after set forth, and the Mayor and City Clerk be, and they are hereby, authorized to execute and deliver the Memorandum of Agreement for and on behalf of the Municipality. The form and contents of the Memorandum of Agreement, which are approved and which are made a part hereto, shall be substantially as follows: r i MEMORANDUM OF AGREEMENT This MEMORANDUM OF AGREEMENT is between the City of Little Rock, Arkansas, as party of the first part (hereinafter referred to as the "Municipality") , and Arkansas Precision Machining Inc. , an Arkansas 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 acknowledged by the parties, the Municipality and the Company AGREE: 1. Preliminary Statement. (a) The Municipality is a duly organized and existing municipal corporation 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 Extra- _ ordinary Session of the Sixty-Second General Assembly of the State of Arkansas, approved January 21, 1960 , as amended (the "Act") , to issue revenue bonds for financing the costs of acquiring, constructing and equipping facilities for securing or developing industry, and to lease, sell and/or make loans to finance the same for such rentals and payments and upon such terms and conditions as the Municipality deems advisable. (b) The Company proposes that certain industrial facilities be acquired, constructed and equipped at the Municipality and operated by the Company. The proposed undertaking is generally described on Exhibit A hereto and referred to herein as the "Project" . The Project can be financed by revenue bonds under the Act. (c) It is necessary that, prior to undertaking the Project, the Company obtain assurance from the Municipality that the Municipality will issue revenue bonds under the Act (the "Bonds") , as specified by the Company, and make the proceeds available specifically for financing the costs and expenses incurred in accomplishing the Project. (d) The Municipality is willing so to commit and proceed with the issuance of such Bonds as and when requested by the Company, in principal amounts necessary to furnish such financing, subject to compliance with requirements of the Act. (e) The Municipality considers that the acquiring, constructing and equipping of the Project facilities and the leasing or sale of such facilities to the Company, will promote _ the securing and developing of industry and thereby protect and enhance the general health and economic welfare of the Municipality and its inhabitants. (f) The Company has advised the Municipality that in order to market the Bonds on the most favorable terms it will be necessary for the Arkansas Economic Development Commission to guarantee Bond amortization payments pursuant to Arkansas Acts, 1967, No. 173 , as amended, Arkansas Acts, 1969 , No. 397 , as amended, and other application laws. 2. Undertakings on the Part of the Municipality. The Municipality agrees and commits as follows: _ (a) That when requested by the Company it will authorize and take, or cause to be taken, the necessary steps to issue bonds under the Act, as specified by the Company, in the aggregate principal amount necessary to furnish the financing of all or any part of the costs of accomplishing the Project. In this regard, it is estimated at this time that the Project will cost approximately $1,000 ,000 . On the basis of such estimate, Bonds will be issued by the Municiplaity in the approximate amount of $1,000 ,000 under the Act. The proceeds of the Bonds will be used to finance the costs of accomplishing the Project, and the Municipality' s commitment is to issue Bonds in the principal amount necessary therefor whether that amount be more or less than the above estimate. Further, the Municipality agrees to issue Bonds, if so requested by the Company, to handle the interim, as well as the permanent, financing of all or any part of the costs of the Project. (b) That the Municipality will, at the proper times and subject in all respects to the recommendation and approval of the Company, subject to the provisions of subparagraph 3 (a) , have the Bonds underwritten and will adopt and take, or cause to be taken such proceedings and authorize the execution of such documents as may be necessary and advisable for the authorization, sale and issuance of the Bonds, the acquiring, constructing and equipping of the Project facilities, as aforesaid, and for the leasing or sale thereof to the Company, all in conformity which the provisions of the Act and all other applicable laws . The Municipality will cooperate with the Company in obtaining an Arkansas Economic Development Commission guaranty of Bond amortization payments. (c) That the aggregate basic rents or payments (i.e. , the rents or payments to be used to pay the principal of, premiums, if any, and interest on the Bonds) payable under leases , or sale or loan agreements, between the Municipality and the Company shall be sufficient to pay the principal of, premiums, if any, and interest on the Bonds when due. The leases, or sale or loan agreements, shall contain the usual provisions appearing in similar revenue bond financings, consistent with the provisions of the Act. The Bonds will not constitute an indebtedness of the Municipality within the meaning of any constitutional or statutory limitation but will be special obligations payable solely from revenues derived by the Municipality from the Project facilities, including particularly rents or installment payments made by the Company. (d) 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 . 3 . Undertakings on the Part of the Company. The Company agrees as follows: (a) That it will be responsible for finding and recommending to the Municipality an underwriter to purchase the Bonds and the maturity, interest rates and all other details of the Bonds, and that it will cooperate with the Municipality in the sale and issuance of the Bonds . (b) That it will enter into such leases, sale agreements or other appropriate agreements with the Municipality under which the Company will obligate itself to pay the Municipality basic rent or payments sufficient to pay the principal of, premiums, if any, and interest on the Bonds when due, and containing such other provisions as are necessary or desirable, consistent with the provisions of the Act. (c) The Company is informed and understands that all or part of the Project facilities may be exempt from ad valorem taxes by virtue of their ownership by the Municipality, and as consideration to the Municipality to enter into this Memorandum of Agreement, the Company agrees to make payments, for distribution to the ad valorem taxing authorities, in the same amounts as would be paid if the properties comprising the Project facilities were not tax exempt. The details concerning such payments will be embodied in an appropriate agreement between the Municipality and the Company. (d) That it will pay all costs of the Project (including all costs of authorizing and issuing the Bonds) not paid from Bond proceeds . • (e) That it will take such further action and adopt such further proceedings as may be required to implement its aforesaid undertakings. 4 . General Provisions. This Memorandum shall continue in full force and effect until the Project facilities, and the issuance of the Bonds, as herein specified, are accomplished, and in this regard it is understood that there may be separate series of Bonds, with different maturities, interest rates, redemption provisions and other details . In the case of each issue, and of each series, the governing body of the Municipality will take appropriate action by ordinance or resolution to sell and authorize the Bonds together with such agreements and security instruments as may be determined necessary or desirable by the Municipality and the Company. • IN WITNESS WHEREOF, the parties hereto have entered into this Memorandum by their officers thereunto duly authorized this day of , 1979 . CITY OF LITTLE ROCK, ARKANSAS ATTEST: By Mayor City Clerk (SEAL) ARKANSAS PRECISION MACHINING INC. ATTEST: By President Secretary (SEAL) EXHIBIT A The Project referred to in the Memorandum of Agreement is described generally as follows: (1) the acquisition of approximately eleven (11) acres of land and an existing metal building situated thereon and containing approximately 52,000 square feet, located at 10, 800 Arch Street, Little Rock, Arkansas; (2) the renovation of the existing building to make it suitable for the Company' s operations; (3) the moving of certain equipment from the Company' s existing manufacturing facility on 9th Street to the new location; and (4) the acquisition and installation of certain additional equipment at the new location. 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 other- wise take all action necessary to the realization of the Municipality' s obligations under the Memorandum of Agreement. Section 3. That application by the Municipality to the Arkansas Economic Development Commission (the "Commission") for a guaranty by the Commission of the amortization payments on the Bonds described in the Memorandum of Agreement is approved and authorized. The application shall be submitted in accordance with the provisions of application law, including, without limitation, Arkansas Acts, 1967, No. 173 as amended, and Arkansas Acts , 1969 , No. 397 , as amended. The Mayor and other appropriate officials of the Municipality are authorized to execute such documents and - take such other action as may be necessary in connection with the application. Section 4 . This resolution shall be in full force and effect upon its adoption. PASSED: July 17 , 1979 . APPROVED: ATTEST- Mayor City rk (SEAL)