RES NO 11-01-1978 RESOLUTION N0.
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:;j(; A RESOLUTION OF THE CITY COUNCIL OF THE
1 CITY OF VAN BUREN, ARKANSAS AUTHORIZING
THE ENTRY INTO AN AGREEMENT TO ISSUE
BONDS FOR THE PURPOSE OF SECURING AND •.'•f
DEVELOPING INDUSTRY WITHIN OR NEAR THE i
ia�. CITY. i
r f Fy 1 ',WHEREAS,' the City of Van Buren, Arkansas (the "City"), is authorized
LL:r. under the provisions of Act No 9 of the Special Session of the General.
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Assembly of the State of Arkansas for the year,1960, as amended "Act
9 to acquire, construct, and equip facilities to secure and develop
industry and to assist in the financing thereof by the issuance of bonds
1: payable from the revenues derived from such facilities; and
+.r: WHEREAS, Sigma Manufacturing Company, an Arkansas corporation (the
\-4'N "Company has evidenced its interest in expanding its manufacturing
facility in or near the City if the costs thereof can 'be provided through
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''r the issuance of bonds under the authority of said Act; and
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t It f WHEREAS, the City desires to assist the Company to expand its
T r! ope rations in or near the City, and 'to in the financing i
Y g thereof
under the provisions of said Act 9; and
WHEREAS, it is desirable that the City and the Company enter into
x an Agreement to Issue Bonds for such purpose;
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NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF. THE CITY OF
VAN BUREN, ARKANSAS, that:
1. The Mayor and the City Clerk of the City of Van Buren, Arkansas,
`:(F be authorized to enter into an Agreement to Issue Bonds in substantially
the form and substance as follows:
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1.4 7" REEMENT TO ISSUE BONDS 'j'
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t THIS AGREEMENT is made as of November, 1978, by and among the 7
City of Van Buren, Arkansas, a muncipal corporation under the laws of
the State of Arkansas (herein called "City and Sigma Manufacturing
Company, an Arkansas corporation (herein, together with any successor or
assignee to its rights and duties hereunder, called "Company for the
purpose of carrying out the purposes set forth in Act No. 9 of the
'r "Pi.- Special Session of the General Assembly of the State of Arkansas for, the.
;r year 1960, as amended (herein, together with any subsequent laws'autho'
'I rizing the issuance of the revenue bonds of the City for,:the,purposes
1.t described herein; called the "Act
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W I T N E S S E T H:
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WHEREAS, the City is authorized by the Act 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
WHEREAS, the City has determined that such purposes may be served
by cooperation with the Company for the expansion of the Company's
manufacturing facilities in or near the City for such industrial and
commercial purposes of the Company as may be profitable to it (such
industrial facilities are herein called the "Project and
WHEREAS, the City and the Company desire to cooperate in the
acquisition, construction and equipping of the Project and to have the
costs of the Project financed from the proceeds of revenue bonds of the
City (herein called the "Bonds 'to be issued pursuant to the Act in an
aggregate principal amount now estimated not to exceed $2,000,000 (excluding
4 any bonds issued to refund the Bonds); and
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WHEREAS, the City and the Company contemplate that the Project will
be leased to the Company, with an option to purchase, and the rental
payments therefor together with other moneys available shall be sufficient
to pay debt service on the Bonds and all related costs;
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration under the mutual benefits, covenants and agreements
herein expressed, the City and the Company agree as follows:
1. Proceedings. All proceedings in connection with the issuance of
the bonds shall be consistent with the requirements of Act 9, including
notice to all state agencies, and the publication of notice as required by
Act No. 1239 of the Extended Session of the General Assembly for the State.
of Arkansas for the year 1976. All references contained herein to the
issuance of the Bonds, shall be subject to compliance with the formal
ities of said Act 1239 when the facts required to do so are determined.
2. Construction. The City and the Company will cooperate in
causing to be commenced and continued the required acquisition, construc
tionre- construction, extension, equipping and improvement of. the
Project, and the Company may provide, or cause to be provided, the
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necessary interim financing to permit such work on the Project to com-
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,jr! mence and continue,expeditiously pending the issuance of interim and /or 0
permanent bonds. Not later than the time of issuance of the Bonds for
P,.' any portion of the Project, the Company will convey and transfer or >y
cause to be conveyed and transferred to the City, for an amount approx-
imately equal to that then extended by the Company for the Project or
portions thereof which are financed by the Bonds then issued (including
at the Company's option any costs of interim financing), the Project or
portions thereof to be then financed. There shall also be conveyed to
the City any easements and rights -of -way necessary to permit acquisi-
tion, construction, equipping, operation and maintenance of the Project
or such portion.
3. Lease. The City shall enter into a lease, or leases, under which
i the Company will lease, with an option to purchase, from the City, such
Project or portions thereof and will agree to make rental payments soffit-
Tent 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. Sale of Bonds, Security. The City will take such steps as are
necessary to issue, sell and deliver, pursuant to the terms of the Act, the
Bonds for the purposes of financing the costs of the Project, in each case
only upon receipt of the written designation by the Company of the purchaser(s)
or underwriter(s) thereof, such Bonds to be in such principal amount, to mature
in such amount and times, to bear interest at such rate or rates and to he
payable on such dates and to have such optional and mandatory redemption
features and prices as are determined by the City and approved in writing by
the Company. The City further agrees that it will enter into the lease,
and if required, an indenture of trust with a bank or trust company, qualified
to exercise trust powers where necessary, for the purpose of providing rental
{i payments sufficient, with other amounts available from the Company or directly
or indirectly from the proceeds of the Bonds, to pay the principal of, premium
if any, and interest on the Bonds as they become due together with the charges
of any Trustee and /or any Paying Agent for the Bonds, and pledging and /or
otherwise securing the payment of such rental payments for the benefit of
the holder(s) of the Bonds. The lease, the indenture, and other related
i documents, and the Bonds shall contain such terms and conditions as are f
agreed upon by the City and the Company. The City will cooperate in consum-
mating the transaction so contemplated and in attempting to realize the desire
of the parties hereto that the interest on all Bonds be exempt from Federal
income taxation. ,t
S. Bonds to be Special Obligations. The City shall have no
Y direct financial responsibility with respect to the Project, the .Bonds
s,.� 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 credit of the City within the meaning of
or.: an constitution or statutory provision and shall never he
y y p 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 unex-
i.. •pended Bond proceeds) derived from or in connection with the sale or
lease of the Project as provided for herein.
6. Conditions of Issuance. The Bonds may he 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 in writing; pro
t': vided, however, that all conditions of the Act shall have been met. :It is
further agreed that the proceeds of the Bonds shall not be invested so as
to constitute any of the Bonds as arbitrage bons within the meaning of
Section 103(c) of the Internal Revenue Code of 1954, as amended, and appli- oc
cable regulations promulgated pursuant thereto.
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7. Costs to be Fewnced. The costs of the Project may include any
i costs permissible under the Act, including but not limited to reasonable
Ti; and necessary costs, expenses and fees'incurred by the City in connection
with the issuance of the Bonds or in connection with the Project, such as
out -of- pocket expenses incurred by any employee of the City; fees and out
of- pocket expenses of counsel for the City, bond counsel, and any trustee;
fees and expenses, if any, required in connection with the underwriting or
T placement of the Bonds; recording costs; rating agency's fees 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.
8. Termination. In the event that the Bonds shall not be sold within
three years from the date hereof, this Agreement shall automatically ter
ta urinate unless the parties hereto shall agree in writing to its extension
for a further period of time specified in such writing_ The Company may
unilaterally terminate this Agreement without liability to the City (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 rom tl paid by the Company to the City) b
P P Y P Y P Y y by giving notice by
ordinary mail, postage prepaid, to the City specifying therein the date
of termination which may be the date of the notice. 5
9. 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 document or instrument. The Company
will at all times indemnify and hold harmlcr:: the City 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.
7,. 10. Purpose and Effect. The Bonds are to be issued, sold and delivered
under the authority of the Act and all related actions and documents shall be
in conformity therewith. The City intends this Agreement to he its official
binding commitment, pursuant to the terms hereof, to issue the Bonds up to
$2,000,000 aggregate principal amount outstanding at any one time, and also
to issue additional Bonds if the Project costs exceeds such amount, and to
expend the Bond
proceeds to defray the costs of the Project. The City con t
siders this Agreement to be an official action for all purposes of the
:er) Federal Income Tax Regulations. '•tl.
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IN WITNESS WHEREOF, the City of Van Buren, Arkansas, acting pursuant
to resolution of its City Council, has caused its name to be hereunto
subscribed and the Company has caused its corporate name to be subscribed
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hereto by its duly authorized officer, all as of the year and date first
above written.
CITY OF VAN BUREN, ARKANSAS
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By ^fl_�D� li�,,
ATTEST: r Mayor
4117
City Clerk
(S E A'L)
SIGMA MANUF'AC COMPANY
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President
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2. This Resolution shall be in full force and effect from and
after its adoption.
:ii' ADOPTED this a y of November, 1978.
1.;,;,: Mayor
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Vi''. ATTEST:
City Clerk
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