RES NO 12-02-1984 12, 11
RESOLUTION NO. 2
A RESOLUTION OF THE THE CITY OF VAN
BUREN, ARKANSAS AUTHORIZING THE CITY TO
ENTER INTO AN AGREEMENT TO ISSUE BONDS
FOR THE PURPOSE OF SECURING AND DEVELOP-
ING INDUSTRY WITHIN THE CITY
WHEREAS, the City of Van Buren, Arkansas (the "City
is authorized under the provisions of Act 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 revenue bonds for financing the
costs of acquiring, constructing and equipping industrial
facilities and to lease and /or sell the same for such
rentals and payments and upon such terms and conditions as
the City deems advisable; and
WHEREAS, CMSI Leasing Company, a Tennessee partnership
(the "Company has evidenced its interest in constructing,
improving and expanding its industrial facilities in the
City if the cost thereof can be provided through the issu-
ance of bonds under the authority of the Act 9; and
WHEREAS, the City desires to assist the Company to
expand its operations in the City, and to aid in the financ-
ing thereof under the provisions of Act 9; and desires to
enter into an agreement to issue bonds for such purposes;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF VAN BUREN, ARKANSAS, that:
1. The Mayor and City Clerk of the City be and they
are hereby authorized to execute and enter into the follow-
ing agreement on behalf of the City:
e
MEMORANDUM
o OF
AGREEMENT TO ISSUE BONDS
THIS AGREEMENT is made by and between the City of Van
Buren, Arkansas, an Arkansas municipal corporation which is
a duly organized and existing city of the first class under
the laws of the State of Arkansas (the "City and CMSI
Leasing Company, a Tennessee partnership "Company
WITNESSETH:
1. Authorization. The City is authorized by Act 9 of
the First Extraordinary Session of the Sixty- Second General
Assembly of the State of Arkansas approved January 21, 1960,
as amended "Act 0) to own, acquire, construct, equip,
operate, maintain, sell, lease or contract concerning or
otherwise deal in or dispose of any land, buildings, or
facilities of any and every nature whatever that can be used
in securing or developing industry within or near the City;
and to issue revenue bonds to finance the cost thereof, and
to lease and /or sell such industrial facilities for such
rentals and payments and upon such terms and conditions as
the City shall determine. The Company has requested a
commitment from the City that it will issue revenue bonds
under Act 9 and make the proceeds available for the perma-
nent financing of all or any part of the costs and expenses
incurred in acquiring, constructing and equipping the
industrial facilities hereinafter described, and the City is
0 willing to make the commitment requested and to proceed with
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the issuance of such bonds, as and when requested by the
0 Company, in principal amounts necessary to furnish such
permanent financing subject to compliance with all con-
ditions set forth in Act 9. The City considers that the
industrial facilities will secure and develop industry and
continue and make available employment and payrolls, and the
City has determined that the purposes of Act 9 will thereby
be served by cooperation with the Company for the con-
struction and improvement, and leasing of the industrial
facilities as hereinafter described.
2. The Project. The City has issued $500,000 of
bonds under Act 9, however additional bonds are necessary to
complete the construction of its purposed facility with the
bond proceeds being used to finance costs of acquisition,
construction, and equipping of a maintenance, repair and
distribution facility, warehouse, and offices costing an
additional $300,000 (approximately) (the "Industrial
Facilities The City and the Company agree to cooperate
in the acquisition, construction and equipping of the
Industrial Facilities and to have the costs thereof financed
from the proceeds of revenue bonds of the City (the "Bonds
to be issued pursuant to Act 9 in an aggregate principal
amount now estimated not to exceed $300,000. The City and
the Company will cooperate in causing to be commenced and
continued the required acquisition, construction, equipping
and improvement of the Industrial Facilities and the Company
may provide, or cause to be provided, the necessary interim
financing to permit such work on the Industrial Facilities
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to commence and continue expeditiously pending the issuance
0 of interim and /or permanent bonds. At the time of issuance
of the Bonds for any portion of the Industrial Facilities,
the Industrial Facilities or portions thereof to be then
financed shall have then been transferred to the City.
There shall also be conveyed to the City any easements and
rights -of -way necessary to permit acquisition, construction,
equipping, operation and maintenance of the Industrial
Facilities or portion thereof.
3. Lease. The City and the Company agree to amend
the existing lease dated as of May 1, 1984, under which the
Company leased, with an option to purchase, from the City,
the Industrial Facilities and the Company will agree to make
additional rental payments sufficient to pay the principal
of, premium, if any, and interest on the Bonds, together
with all charges of any Trustee and /or any Paying Agent for
the Bonds.
4. Issuance of Bonds. The City will take such steps
as are necessary to issue, sell and deliver, pursuant to the
terms of Act 9, the Bonds for the purposes of financing the
costs of the Industrial Facilities. Such Bonds will be in
such principal amount, mature in such amount and times, bear
interest at such rate or rates, be payable on such dates and
have such optional and mandatory redemption features and
prices as are determined by the City and approved by the
Company. The City further agrees that it will, if required,
enter into an amended indenture of trust with a bank or
0 trust company qualified to exercise trust powers where
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necessary, for the purpose, among others, of pledging and /or
otherwise securing the payment of rental payments described
in the preceding paragraph for the benefit of the holder(s)
of the Bonds. The amended lease, the amended indenture, the
Bonds, and other related documents, shall contain such terms
and conditions as are agreed upon by the City and the
Company. The City will take or refrain from taking, such
action as may be necessary to cause the interest on all
Bonds to be exempt from federal income taxation. The City
shall have no direct financial responsibility with respect
to the Industrial Facilities, the Bonds or the costs
associated with either, and the Bonds shall be special
obligations of the City and shall never constitute a general
obligation, indebtedness, or pledge of the faith and credit
of the City within the meaning of any constitutional or
statutory provision and shall never be paid in whole or in
part out of any funds raised or to be raised by taxation or
any other revenues or other funds of the City except those
(including unexpended Bond proceeds) derived from, or in
connection with, the sale or lease of the Industrial Facil-
ities as provided for herein. Further in no event shall
they constitute an indebtedness for which the faith and
credit of the City of Van Buren or any of its revenues are
pledged. The Bonds may be issued either at one time or in
several series and /or issues from time to time, in such
aggregate principal amount or amounts as the Company shall
request; provided, however, that all conditions of Act 9
shall have been met. It is further agreed that the proceeds
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of the Bonds shall not be invested so as to constitute any
of the Bonds as arbitrage bonds within the meaning of
Section 103(c) of the Internal Revenue Code of 1954, as
amended, and applicable regulations promulgated pursuant
thereto.
5. Costs to be Financed. The costs of the Industrial
Facilities may include any costs permissible under Act 9,
including but not limited to reasonable and necessary costs,
expenses and fees incurred by the City in connection with
the issuance of the Bonds, and in connection with the
Industrial Facilities, such as out -of- pocket expenses of
counsel for the City, bond counsel, and any trustee; fees
and expenses required in connection with the underwriting or
placement of the Bonds; recording costs; and printing costs.
The City will, upon request, provide or cause to be provided
any data or information which may be reasonably required to
verify any of the costs, expenses, and fees enumerated
above.
6. Term. This Agreement shall continue in full force
and effect until the Industrial Facilities and its financing
by Bonds as herein described, are accomplished, provided,
however, the Company may unilaterally terminate this Agree-
ment without liability to the Company (except for any
amounts due and owing by the Company to the City arising out
of the transactions occurring on or before the time of such
termination, which shall be promptly paid by the Company to
the City upon giving notice by ordinary mail, postage
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prepaid, to the City specifying therein the date of termina-
e tion which may be the date of the notice.
7. Protection to the City. The Company shall pay all
of the City's costs and expenses reasonably and necessarily
incurred in connection with this Agreement or any other
related documents. The Company will at all times indemnify
and hold the City harmless against any and all losses,
costs, damages, expenses and liabilities of whatsoever
nature directly or indirectly resulting from, arising out
of, or related to matters in connection with this Agreement.
8. Payment in Lieu of Taxes. The Company agrees to
enter into, on or before the date of closing of the Bond
Sale, an agreement with the City for payment in lieu of
taxes to local public bodies with ad valorem taxing authori-
ty, in such amounts and on such terms as shall be acceptable
to the City and the Company.
9. Binding Effect of Agreement. The Bonds are to be
issued, sold and delivered under the authority of Act 9 and
all related actions and documents shall be in conformity
therewith. The City intends this Agreement to be its
official binding commitment, pursuant to the terms hereof,
to issue the Bonds up to $300,000 aggregate principal amount
outstanding at any one time, and also to issue additional
Bonds if the cost of the Industrial Facilities exceeds such
amount, and to expend the Bond proceeds to defray the costs
of the Industrial Facilities. The City considers this
Agreement to be an official action for all purposes of the
Federal Income Tax Regulations.
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IN WITNESS WHEREOF, the parties, acting by duly au-
thorized officers, have executed this Agreement as of the
17th day of December, 1984.
CITY OF VAN BUREN, ARKANSAS
ATTEST:
By
Mayor
City Clerk
(S E A L)
CMSI LEASING COMPANY (the
Company)
By
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2. This Resolution shall be in full force and effect
from and after this adoption.
ADOPTED this /f day of L� �L/4/ 1984.
4,
Mayor
ATTEST:
City C erc