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HomeMy WebLinkAbout6725 •2 - RESOLUTION NO. 6,725 A RESOLUTION AUTHORIZING A MEMORANDUM OF INTENT BY AND BETWEEN THE CITY OF LITTLE ROCK, ARKANSAS, AND HOOVER UNIVERSAL, INC. PERTAINING TO THE ISSUANCE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS UNDER ACT 9 OF 1960, AS AMENDED, 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 Hoover Universal', Inc. (the "Company") , in substantially the form and with substantially the contents hereinafter set forth as Exhibit A and the Mayor and City Clerk be, and they are hereby, authorized to execute and deliver the 4 Memorandum of Intent for and on behalf of the Municipality. The form and contents of the Memorandum of Intent, which are approved and which are made a part hereto, shall be substantially as set forth as Exhibit A. Section 2. That the Mayor and the 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 4 necessary to the realization of the Municipality's obligations under the Memorandum of Intent. Section 3. This Board finds and determines that all formal actions of this Board concerning and relating to the adoption of this resolution were adopted in an open meeting of this Board, and that all deliberations of this Board that resulted in such formal action, were in meetings open to the public, in compliance with all legal re- 4 N 1„ - 2 - quirements of the State of Arkansas, including the "Freedom of Infor- mation Act", Act No. 93 of the Acts of Arkansas of 1967, as amended. PASSED AND APPROVED this 13th day of January, 1982. APPROVED: Mayor ATTEST: iL Ci 7 Clerk '"'" (SEAL) 1. EXHIBIT A MEMORANDUM OF INTENT This Memorandum of Intent is between the City of Little Rock, Arkansas, party of the first part (hereinafter referred to as the "Muni- cipality"), and Hoover Universal, Inc. , party of the second part (here- inafter 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 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 parti- cularly Act 9 of the First Extraordinary Session of the Sixty-Second General Assembly of the State of Arkansas approved on January 21, 1960, as amended (the "Act") , to issue revenue bonds for financing the costs of acquiring, constructing and equipping industrial facilities (as defined and authorized by the Act) and to lease and/or sell the same for such rentals and payments and upon such terms and conditions as the Municipality deems advisable. (b) In order to secure, retain and develop industry which will furnish and retain substantial employment and payrolls (in furtherance of the public purpose of the Act) , it is proposed that the Company acquire and improve the existing facilities of North American Metals, Inc. ("North American") located within the Municipality (the "Project") , as more particularly described as Exhibit I hereto. - 2 - (c) North American has incurred substantial losses in the operation of its facilities and as a result has commenced a pro- ceeding under Chapter 11, Title 11 of the United States Bankruptcy Code. Absent the purchase of the Company of North American's facilities, it is likely that the facilities will be closed and present employees laid off, and accordingly, the purchase of the facilities by the Company will maintain employment at the facilities. (d) The Company has determined that it must obtain a commitment from the Municipality that it will issue revenue bonds under the Act as the Company and the Municipality, upon advice of counsel, shall deem appropriate and make the proceeds available for the permanent financing or temporary financing in anticipation of such per- manent financing of any part of the costs and expenses incurred in acquiring, constructing and equipping the Project. (e) The Municipality is willing to so commit and to proceed with the issuance of such bonds as and when requested by the Company, in principal amounts necessary to furnish such permanent or temporary financing subject to compliance with all conditions set forth in the Act. (f) The Municipality considers that the acquiring, constructing and equipping of the Project and the leasing or sale thereof to the Company, will secure, retain and develop industry and provide for the health, safety and physical and economic welfare of the people of the State of Arkansas, including the inhabitants of the Municipality. 2. Undertakings on the Part of the Municipality. Subject to the conditions above stated, the Municipality agrees as follows: 4 - 3 - (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, in the aggregate principal amount necessary to furnish the permanent or temporary financing of any part of the costs of accomplishing the Project. The Municipality agrees that it will autho- rize and issue, one or more series of revenue bonds in the principal aggregate amount now estimated not to exceed $2,500,000 (the "Bonds") , which amount is the present estimated cost of the Project, or such greater amount as is necessary to pay the actual costs of the Project pursuant to the Act. (b) That it will, at the proper time and subject in all respects to the recommendation and approval of the Company, have the Bonds sold and will adopt, or cause to be adopted, such proceedings and authorize the execution of such documents as may be necessary and ad- visable for the authorization, sale and issuance of the Bonds, the acquiring, constructing and equipping of the Project, and for the leasing or sale thereof, all in conformity with the Act and any other applicable federal and state laws and upon terms and conditions mutually satisfactory to the Municipality and the Company. (c) That the aggregate basic rents or installment payments (i.e. , the rents or payments to be used to pay the principal of, premium, if any, and interest on the Bonds) payable under leases or sale agreements between the Municipality and the Company, shall be sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. The leases or sale agreements shall contain such pro- visions as are necessary or desirable, consistent with the authority conferred by the Act. 1 . - 4 - i (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 or as it may deem appropriate in pursuance 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 Municipality in the sale and issuance of the Bonds to the end of achieving timely and favorable marketing thereof. (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 to the Municipality rents or installment payments sufficient to pay the principal of, premium, if any, and interest on the Bonds when due and containing such other pro- visions as are necessary or desirable consistent with the authority conferred by the Act. (c) To reimburse, indemnify and hold harmless the Municipality for all reasonable and necessary out-of-pocket expenses and fees which the Municipality may incur at the Company's request arising from the execution of this Memorandum and the performance by the Munici- pality of its obligations hereunder. (d) 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 continue in full force and effect until the Project and its financing by Bonds is accomplished, -5 and in this regard it is understood that there may be separate issues of Bonds, and separate series within a particular issue, with different maturities, interest rates, redemption provisions and other details. In the case of each issue, and of each series, the Municipality will take appropriate action by ordinance or resolution to sell and authorize the Bonds and to authorize and execute such agreements and documents as may be determined necessary or desirable by the Municipality and the Company. (b) The Company agrees that it will make annual payments to the City as follows: A. .3% of the total amount of bonds issued as the City's charge for use of its credit rating; continuing administrative costs, and the many services provided by the City. B. 1.2% of amount of bonds issued for distri- bution by the City to local tax entities. IN WITNESS WHEREOF, the parties hereto have entered into this Memorandum by their officers thereunto duly authorized as of the 13th day of January, 1982. CITY OF LITTLE ROCK, ARKANSAS By: `! Mayor ATTEST: • C f Y CLERK '4.7 HOOVER UNIVERSAL, INC. ATTEST: By: Title: EXHIBIT I Project Description The Project will consist of the acquisition and improvement of North American Metals, Inc. existing facilities in the City of Little Rock, Arkansas. With the proceeds of the Bonds, the Company will purchase the assets of North American Metals, Inc. , including real estate, two buildings and existing equipment presently on site. The costs of such acquisition will be approximately $1,500,000. In addition, the Company expects to acquire additional equipment estimated to cost approximately $1,000,000.