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HomeMy WebLinkAbout1998-05-01-R . 1%W 4 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF BATESVILLE, ARKANSAS AUTHORIZING THE ENTRY INTO AN AGREEMENT TO ISSUE BONDS FOR THE PURPOSE OF ASSISTING IN THE FINANCING OF AN INDUSTRIAL FACILITY TO BE LOCATED NEAR THE CITY. WHEREAS, the City of Batesville, Arkansas (the "City"), is authorized under the provisions of the Municipalities and Counties Industrial Development Revenue Bond Law, Arkansas Code Annotated (1998 Repl.) §§ 14-164-201 to -224 (the "Act"), to own, acquire, construct, reconstruct, extend, improve, equip, operate, maintain, sell, lease, or contract concerning, or otherwise deal in or dispose of any land, buildings or facilities for securing and developing industry within or near the City and to assist in the financing thereof by the issuance of bonds payable from the revenues derived in connection with such land, buildings or facilities; and WHEREAS, Professional Dental Technologies, Inc., a Nevada corporation engaged in the business of the manufacture of dental products (the "Company"), has evidenced its interest in acquiring, constructing and equipping an industrial facility to be located near the corporate boundaries of the City if permanent financing can be provided through the issuance of bonds under the authority of the Act; and WHEREAS, the City desires to assist the Company in order to secure and develop industry near the City, and to aid in the financing thereof under the provisions of the Act; and WHEREAS, it is desirable that the City enter into an Agreement to Issue Bonds for such purpose; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF BATESVILLE, ARKANSAS, THAT: Section 1. The Mayor and the City Clerk of the City be authorized and directed to enter into an Agreement to Issue Bonds in substantially the form and substance as follows: AGREEMENT TO ISSUE BONDS THIS AGREEMENT is made as of May 26, 1998, by and between the CITY OF BATESVILLE, ARKANSAS, a municipal corporation organized and existing under the laws of the State of Arkansas (the "City"), and PROFESSIONAL DENTAL TECHNOLOGIES, INC., a Nevada corporation (the "Company"), for the purpose of carrying out the purposes set forth in the Municipalities and Counties Industrial Development Revenue Bond Law, Arkansas Code Annotated (1998 Repl.) §§ 14-164-201 to -224 (the "Act"). WITNESSETH: WHEREAS, the City is authorized by the Act to own, acquire, construct, reconstruct, extend, improve, equip, operate, maintain, sell, lease, or contract concerning, or otherwise deal in or dispose of any land, buildings or facilities for securing and developing industry within or near the City and to assist in the financing thereof by the issuance of bonds payable from the revenues derived in connection with such land, buildings or facilities; and WHEREAS, the City has determined that such purposes may be served by cooperation with the Company in the acquisition, construction and equipping of an industrial facility and related improvements to be located on Highway 167 approximately three miles north of the corporate limits of the City, consisting of the acquisition of approximately 62 acres of real property, the construction of a building of approximately 150,000 square feet, and the acquisition of certain manufacturing equipment, all to be used as a manufacturing facility for the production of dental products and for other lawful purposes of the Company as may be profitable to it (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 (the "Bonds") to be issued pursuant to the Act in an aggregate principal amount now estimated not to exceed $7,000,000 (excluding any bonds issued to refund the Bonds); and WHEREAS, the City and the Company contemplate that the Project will be owned by the City and leased to the Company, with an option to purchase, with lease payments in connection therewith, together with other available moneys, sufficient in amount 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 the Act, including notice to all state agencies and the publication of notice. All references contained herein to the issuance of the Bonds shall be subject to compliance with the formalities of the Act when the facts required to do so are determined. 2. Project. The City and the Company will cooperate in causing to be commenced and continued the required acquisition, construction and equipping of the Project, and the Company may provide, or cause to be provided, the necessary interim financing to permit such work on the Project to commence and continue expeditiously pending the issuance of the Bonds. Not later than the date of issuance of the Bonds, the Company will convey and transfer, or cause to be conveyed and transferred, to the City, for an amount approximately equal to that amount PDIndResol.001 052698 —2 then expended by the Company for the Project or portion thereof to be financed by the Bonds then issued (including, at the Company's option, any costs of interim financing), the Project or portion thereof theretofore acquired, constructed and equipped. There shall also be conveyed to the City any easements and rights-of-way necessary to permit the construction, equipping, operation and maintenance of the Project. 3. Lease. The City and the Company shall enter into a lease agreement under which the Company will lease the Project, with an option to purchase for a nominal price, from the City and will agree to make rental payments sufficient to pay the principal of and 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 the Bonds, pursuant to the terms of the Act, for the purpose of financing the costs of the Project in the aggregate amount necessary to furnish the permanent financing of all or any part of the costs of accomplishing the Project, in each case only upon receipt of a written designation by the Company of the purchaser(s) or underwriter(s) thereof. It is presently estimated by the Company that Bonds in the aggregate principal amount of not to exceed $7,000,000 will be issued. However, the City's commitment is to issue the Bonds, pursuant to the terms of the Act, in such amounts as shall be requested by the Company for accomplishing all or any part of the Project, whether or not such amounts are more or less than the above estimate and whether or not the facilities and improvements finally acquired, constructed and equipped are identical to or different from the facilities presently expected to constitute the Project. The Bonds shall mature in such amounts and times and shall bear interest at such rate or rates, to be payable on such date or dates, and to have such optional and mandatory redemption features and prices as are mutually agreed upon in writing by the City and the Company. The City further agrees that it will enter into a lease agreement with the Company and into an indenture of trust with a bank or trust company qualified to exercise trust powers where necessary, for the purpose of providing rental payments sufficient, together with other amounts available from the Company or directly or indirectly from the proceeds of the Bonds, to pay the principal of and 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 owner(s) of the Bonds. The lease agreement, the indenture, other related documents and the Bonds shall contain such terms and conditions as are agreed upon by the City and the Company. The City will cooperate in consummating the transactions so contemplated and in attempting to realize the desire of the parties hereto that the interest on all Bonds be excluded from gross income for purposes of Federal income taxation. 5. Bonds to be Special Obligations. The City shall have no financial responsibility with respect to the Project, 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 credit of the City within the meaning of any constitutional or statutory provision, and the Bonds shall never be paid in whole or in part out of any funds raised or to MndResol.001 052698 -3- (Moe 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 Project or the loan of Bond proceeds as provided for herein. 6. Conditions of Issuance. 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 in writing; provided, however, that all conditions of the Act and this Agreement 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 bonds" within the meaning of Section 148 of the Internal Revenue Code of 1986, as amended (the "Code"), and applicable regulations promulgated thereunder. 7. Costs to be Financed. The costs of the Project may include any costs permissible under the Act, including but not limited to reasonable 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 expenses incurred by any employee of the City; fees and expenses of Kutak Rock, as bond counsel, and any trustee and/or paying agent; underwriting and placement agent fees and expenses, if any, required in connection with the underwriting or placement of the Bonds; recording costs; rating agency's fees, if any; and printing costs. Upon request, the City will provide or cause to be provided to the Company 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 no Bonds are sold within two years from the date hereof, this Agreement shall automatically terminate 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 promptly paid by the Company to the City) by giving notice to the City by ordinary mail, postage prepaid, specifying therein the date of termination, which may be the date of the notice. 9. Company's Expectations. The Company declares that it is its intent to use Bond proceeds to reimburse itself for all original expenditures incurred in acquiring, constructing or equipping the Project made between the date hereof and the date the Bonds are issued. 10. 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 the City and hold it 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. 11. Exemption from Ad Valorem Taxes. The City and the Company recognize that under Article 16, Section 5, of the Constitution of the State of Arkansas, as interpreted under past decisions of the Supreme Court of the State of Arkansas applicable to facilities financed pursuant to the Act, including particularly the case of Wayland v. Snapp, 232 Ark. 57, 334 S.W.2d 663 (1960), the Project will be exempt from ad valorem taxation. The City makes no MndResol.001 052698 -4 • err+ �r1� representation as to the continued precedential value of such past decisions. The Company agrees to enter into an agreement requiring the Company to make negotiated payments in lieu of all ad valorem taxes which would otherwise be levied by local public bodies with taxing power. Such payments in lieu of ad valorem taxes shall be in such amounts and on such terms as shall be acceptable to the City and the Company and as provided by law. IN WITNESS WHEREOF, the City of Batesville, Arkansas, acting pursuant to a resolution of its City Council, has caused its name to be hereunto subscribed, and the Company has caused its name to be subscribed hereto by its duly authorized officers, all as of the year and date first above written. CITY OF BATESVILLE, ARKANSAS r By: ATTEST: Mayor City Clerk (SEAQ PROFESSIONAL DENTAL TECHNOLOGIES, INC. By: zci� Title: ATTEST: By: - Title: (S E A Q 7 iM a r MndResol.001 052698 -5- f VAW Section 2. The Bonds authorized in the Agreement To Issue Bonds set forth in the preceding section 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 resolution to be the expression of its present intent, pursuant to the terms hereof and in the Agreement to Issue Bonds, to issue the Bonds in an aggregate principal amount of up to $7,000,000, and also to issue additional bonds if the Project costs exceed such amount, and to expend the Bond proceeds to defray the costs of the Project. The City considers this resolution to be its "declaration of official intent" to reimburse an original expenditure with proceeds of an obligation for all purposes of the Internal Revenue Code of 1986, as amended, and the regulations promulgated thereunder. Section 3. This Resolution shall be in full force and effect from and after its adoption. L ADOPTED this ' day of 1998. CITY OF BATESVILLE, ARKANSAS By: Mayor ATTEST: By: L)"', City Clerk (SEAL] MndReso1.001 052698 -6- CERTIFICATE The undersigned, Clerk of the City of Batesville, Arkansas, hereby certifies that the foregoing is a true and perfect copy of Resolution NOS- i adopted by the City Council of Batesville, Arkansas, at its regular meeting held at City Hall in said City, ats'3o o'clock, p.m., on the 26th day of May, 1998. GIVEN under my hand and seal on thiOo f?-day of `i , 1998. City Clerk (SEAL) PDIndResol.001 052698 -7-