1197,•
ORDINANCE NO. 1 / ~ /
AN ORDINANCE AUTHORIZING THE ISSUANCE OF INDUSTRIAL
DEVELOPMENT REVENUE BONDS UNDER ACT N0. 9 OF 1960, AS
AMENDED, FOR THE PURPOSE OF PROVIDING PERMANENT
FINANCING FOR THE COST OF SECURING AND DEVELOPING
INDUSTRY (THE PARTICULAR INDUSTRIAL PROJECT IS
DESCRIBED IN THE ORDINANCE); AUTHORIZING THE EXECUTION
AND DELIVERY OF A SECOND SUPPLEMENTAL TRUST INDENTURE
SECURING THE BONDS; AUTHORIZING THE EXECUTION AND
DELIVERY OF A SECOND AMENDMENT TO LEASE AGREEMENT
BETWEEN THE CITY OF WEST MEMPHIS, A5 LESSOR, AND CPS
CHEMICAL COMPANY OF ARKANSAS, AS LESSEE, IN
SUBSTANTIALLY THE FORM AND WITH SUBSTANTIALLY THE
CONTENTS SET FORTH IN AND MADE A PART OF THIS
ORDINANCE; AUTHORIZING THE SALE OF THE BONDS;
PRESCRIBING OTHER MATTERS RELATING THERETO; AND
DECLARING AN EMERGENCY.
WHEREAS, the City of West Memphis, Arkansas (the "City") is
authorized by Act No. 9 of the First Extraordinary Session of
the Sixty-Second General Assembly of the State of Arkansas,
approved January 21, 1960, as amended (the "Act"), to acquire
lands, construct, and equip industrial buildings, improvements,
and facilities and to incur other costs and expenss and make
other expenditures incidental to and for the implementing and
accomplishing of the conduct of industrial operations; and
WHEREAS, the City is authorized by the Act to issue
industrial development revenue bonds payable from revenues
derived from the industrial project so acquired and constructed
and secured by a lien thereon and security interest therein; and
WHEREAS, the City has previously issued $3,000,000 principal
~ amount of its Industrial Development Revenue Bonds (CPS Chemical
i Project), Series 1982, dated March 1, 1982 (the "Series 1982
~; Bonds") and $2,000,000 principal amount of Industrial
Development Revenue Bonds (CPS Chemical Project), Series 1983,
dated December 8, 1983 (the "Series 1983 Bonds"), pursuant to
the Act and under the terms of a Trust Indenture dated as of
March 1, 1982, as supplemented as of November 1, 1983
(collectively the "Indenture") between the City and First
Tennessee Bank National Association (formerly First Tennessee
Bank N.A. Memphis), of Memphis, Tennessee, as trustee (the
"Trustee"), for the purpose of providing funds to assist CPS
Chemical Company of Arkansas (the "Company") in acquiring,
constructing, and equipping an industrial facility within or
near the City (the "Project", which term shall include the
Expanded Facilities, as hereinafter defined), and the Project
has been leased by the City to the Company pursuant to the terms
of a Lease Agreement dated as of March 1, 1982, as amended as of
November 1, 1983 (collectively the "Lease Agreement") between
the City as lessor and the Company as lessee; and
WHEREAS, the City has determined to assist the Company in
order to enlarge, expand, and add to the Project, including
specifically the acquisition and installation of a process
reactor and associated equipment, building modifications and
site work, and the construction and installation of improvements
to existing reactors and associated equipment and buildings, and
for such other lawful purposes of the Company as may be
profitable to it (such enlarged, expaneded, and additional
facilities and equipment are herein called the "Expanded
Facilities"), with such Expanded Facilities to be and become a
part of the Project; and
WHEREAS, the City is authorized to issue additional bonds on
a parity with the Series 1982 Bonds and the Series 1983 Bonds,
from time to time under the Indenture, upon compliance with the
provisions of the Indenture; and
WHEREAS, the City has determined, for the purpose of
providing permanent financing of the costs of acquiring,
constructing, and installing the Expanded Facilities, to issue
and sell its Industrial Development Revenue Bonds (CPS Chemical
Project), Series 1984, dated the date of their delivery, in the
aggregate principal amount of $3,000,000 (the "Series 1984
Bonds"), under the provisions of the Act and Section 203 of the
Indenture, and pursuant to the provisions of an indenture
supplemental thereto (the "Second Supplemental Trust Indenture")
hereafter to be entered into between the City and the 'T'rustee,
to be dated as of December 1, 1984, to secure the Series 1984
Bonds, with the Series 1984 Bonds to be issued on a parity of
security with the Series 1982 Bonds and the Series 1983 Bonds,
to be secured by the Indenture, and to be equally and ratably
payable under the Indenture with the Series 1982 Bonds and the
Series 1983 Bonds; and
WHEREAS, the Expanded Facilities are to be acquired by the
City and leased to the Company pursuant to the provisions of the
Lease Agreement, as amended by a Second Amendment to Lease
Agreement (the "Second Amendment to Lease") (hereinafter
authorized), to be dated as of December 1, 1984, by and between
the~~City and the Company; and
WHEREAS, payment of the principal of, and premium, if any,
and interest on, the Series 1984 Bonds will be unconditionally
guaranteed by the Company pursuant to the terms of a Bond
Guaranty Agreement to be dated as of December 1, 1984, and by
CPS Chemical Company, Inc., a New Jersey corporation (the
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"Guarantor"), which owns all the
the Company, pursuant to the terms
Indemnification Agreement, to be
(the "Guaranty Agreements"): and
outstanding capital stock of
of a Guarantor's Guaranty and
dated as of December 1, 1984
WHEREAS, the Company has agreed to make the administrative
payments and payments in lieu of taxes established in Ordinance
No. 1104 of the City, adopted August 5, 1982, and the Company's
undertaking in this regard is set forth in the Second Amendment
to Lease; and
WHEREAS, the Project, including the Expanded Facilities,
will furnish additional employment and other benefits, and be in
the best interests of the City and its residents, and
specifically that (a) anticipated increased employment over the
next four years is estimated to be 175 persons; (b) a
substantial portion of the proceeds of the Series 1984 Bonds
will be expended with local businesses for a wide variety of
products and services; (c) many of the additional employees will
have special skills which will enrich the community, such as
skilled trades (plumbers, electricians, mechanics, pipefitters),
chemical engineers, chemists, accountants, business
administrators, clerical workers, and computer specialists; (d)
the high technology nature of the business of the Company and
the fact that the Company is capital and service intensive is
anticipated to have a broad, favorable impact on local
employment; (e) prior to being acquired by the Company, the
Project was in poor condition and threatened with being
shutdown, but it is now in excellent condition; and
WHEREAS, the City proposes to sell the Series 1984 Bonds at
par to First Tennessee Bank National Association (the
"Purchaser"), of Memphis, Tennessee.
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF WEST MEMPHIS, ARKANSAS:
Section 1. That there be, and there is hereby authorized
and directed the following:
(a) The sale of $3,000,000 Industrial Development Revenue
Bonds (CPS Chemical Project), Series 1984, to the
Purchaser at a price of par;
(b) The acquisition, construction, and installation of the
Expanded Facilities and, in connection therewith, the
execution of any necessary architectural, engineering,
or construction contracts or the acceptance of an
assignment of any such contracts previously executed by
CPS or the Company for the acquisition, construction,
or equipping of the Project; and
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(c) The performance of all obligations of the City under
the Second Amendment to Lease Agreement pertaining to
the acquisition, construction, and equipping of the
Expanded Facilities and the performance of all
obligations of the City under the contracts referred to
ab~:ve .
Section 2. That the Series 1984 Bonds shall be issued in
the aggregate principal amount of $3,000,000, subject to the
provisions of the Second Supplemental Trust Indenture
(hereinafter authorized) governing the issuance of bonds in
replacement of or substitution for lost, mutilated, or destroyed
bonds, shall be issued in fully registered form, shall be in the
denominations of $5,000 each or any integral multiple thereof,
shall be dated the date of delivery thereof to the Purchaser,
and shall mature (proportionately on each Series 1984 Bond on
the basis of the ratio which the principal amount of each such
Series 1984 Bond bears to the total principal amount of the
Series 1984 Bonds maturing on each maturity date), unless sooner
redeemed, on the dates set forth in and in the amounts set
opposite each date in the following schedule:
Maturity Date Principal Amount Maturity Date Principal Amount
7-1-86 $100,000 1-1-91 $165,000
1-1-87 100,000 7-1-91 175,000
7-1-87 130,000 1-1-92 175,000
1-1-88 130,000 7-1-92 185,000
7-1-88 145,000 1-1-93 185,000
1-1-89 145,000 7-1-93 210,000
7-1-89 165,000 1-1-94 210,000
1-1-90 165,000 7-1-94 225,000
7-1-90 165,000 1-1-95 225,000
The Series 1984 Bonds shall bear interest from date of
delivery to the Purchaser until maturity at a variable rate per
annum which shall from day to day be equal to the product of
(i) seventy-three percent (73%) of the Base Rate of First
Tennessee Bank National Association (as defined in the
Second Supplemental Trust Indenture hereinafter
authorized), multiplied by
(ii) the Margin Rate Factor (as defined in the Second
Supplemental Trust Indenture hereinafter authorized),
said interest being payable on January 1 and July 1 in each
year, commencing July 1, 1985.
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In addition to the interest computed as provided in the
preceding paragraph, the Series 1984 Bonds shall bear additional
interest, from time to time, in amounts sufficient to indemnify
and save harmless the holder thereof from and against (1) the
reduction of the after tax yield on the Series 1984 Bonds and
(2) any change in applicable state or local taxation of the
Series 1984 Bonds or any interest or other income earned
thereon, effective after the date of issuance thereof, as more
fully set forth in the Second Supplemental Trust Indenture
hereinafter authorized.
Nothwithstanding any other term or provision hereof to the
contrary, the indebtedness evidenced by the Series 1984 Bonds
shall not bear interest at a rate which shall exceed the lesser
of .
(i) thirteen and fifty one-hundredths percent (13.50%) per
annum; or
(ii) a rate which is equal to seventy-eight percent (78%) of
the Base Rate of First Tennessee Bank National
Association from time to time in effect.
The Series 1984 Bonds shall have such other provisions and shall
be issued all upon such other terms and conditions recommended
by the Company and as more particularly set forth in the Second
Supplemental Trust Indenture (hereinafter authorized).
Section 3. That, to provide the terms and conditions upon
which the Series 1984 Bonds are to be secured, executed,
authenticated, issued, accepted, and held, the Mayor is hereby
authorized and directed to execute and acknowledge a Second
Supplemental Trust Indenture by and between the City and First
Tennessee Bank National Association (formerly First Tennessee
Bank N.A. Memphis), of Memphis, Tennessee, as trustee (the
"Trustee"), to be dated as of December 1, 1984, and the City
Clerk is hereby authorized and directed to execute and
acknowledge the Second Supplemental Trust Indenture and to affix
the seal of the City thereto, and the Mayor and City Clerk are
hereby authorized and directed to cause the Indenture to be
accepted, executed, and acknowledged by the Trustee. The Second
Supplemental Trust Indenture is hereby approved in substantially
the form submitted to this meeting, and the Mayor is hereby
authorized to confer with the Trustee, the Company, and the
Purchaser in order to complete the Second Supplemental Trust
Indenture in substantially the form submitted to this meeting,
with such changes as shall be approved by such persons executing
the document, their execution to constitute conclusive evidence
of such approval.
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(Advice is given that, pursuant to the Act, a copy of the
Second Supplemental Trust Indenture in substantially the form
authorized to be executed is on file with the City Clerk of the
City of West Memphis, and is available for inspection by any
interested person.)
Section 4. That there be, and there is hereby, authorized
the execution and delivery of a Second Amendment to Lease
Agreement, dated as of December 1, 1984, by and between the City
as Lessor and the Company as Lessee (the "Second Amendment to
Lease"), and the Mayor and City Clerk be, and they are hereby,
authorized to execute, acknowledge, and deliver the Second
Amendment to Lease for and on behalf of the City. The Second
Amendment to Lease is hereby approved substantially in the form
submitted to this meeting, and the Mayor is hereby authorized to
confer with the Company, the Trustee, and the Purchaser in order
to complete the Second Amendment to Lease in substantially the
form submitted to this meeting with such changes as shall be
approved by such persons executing the document, their execution
to constitute conclusive evidence of such approval.
(Advice is given that, pursuant to the Act, a copy of the
Second Amendment to Lease in substantially the form authorized
to be executed is on file with the City Clerk of the City of
West Memphis, and is available for inspection by any interested
person.)
Section 5. That the Mayor and City Clerk, for and on behalf
of the City, be, and they are hereby, authorized and directed to
do any and all things necessary to effect the execution of the
Second Amendment to Lease, the performance of the City's
obligations thereunder, the execution and delivery of the Second
Supplemental Trust Indenture, its execution and acceptance by
the Trustee, the performance of all obligations of the City
under and pursuant to the Second Supplemental Trust Indenture,
the execution and delivery of the Series 1984 Bonds, and the
performance of all other acts of whatever nature necessary to
effect and carry out the authority conferred by this Ordinance.
That the Mayor and the City Clerk be, and they are hereby,
further authorized and directed, for and on behalf of the City,
to execute all papers, documents, certificates, and other
instruments that may be required for the carrying out of such
authority or to evidence the exercise thereof.
Section 6. That since the City is here involved with the
constructing and equipping of a complex industrial project,
requiring highly specialized work and specialized types of
machinery and equipment, it has been, and is hereby, determined
by the City Council that competitive bidding be, and the same is
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hereby, waived as to this particular industrial project. This
action is taken by the City Council pursuant to applicable laws
of the State of Arkansas, including particularly the Act.
Section 7. That Rose Law Firm, a Professional Association,
of Little Rock, Arkansas, is hereby appointed as Bond Counsel
with respect to the issuance of the Series 1984 Bonds, the fees
and expenses of which firm shall be costs of the Project.
Section 8. That the provisions of this Ordinance are hereby
declared to be severable, and if any section, phrase, or
provision shall for any reason be declared to be invalid, such
declaration shall not affect the validity of the remainder of
the sections, phrases, or provisions.
Section 9. That all ordinances, resolutions, and parts
thereof in conflict herewith are hereby repealed to the extent
of such conf 1 ict .
Section 10. That there is hereby found and declared to be
an immediate need for the securing and developing of
substantial industrial operations in order to provide
additional employment, alleviate unemployment, and otherwise
benefit the public health, safety, and welfare of the City and
the inhabitants thereof, and the issuance of the Series 1984
Bonds authorized hereby and the taking of the other actions
authorized herein are immediately necessary in connection with
the securing and developing of substantial industrial
operations and deriving the public benefits referred to above.
It is, therefore, declared that an emergency exists and this
Ordinance being necessary for the immediate preservation of the
public health, safety, and welfare shall be in force and take
D ~ ~ o n ~ i rnm o.-l i ~ ~ n 1 ~ s ~ ~ r..~..-. -, ,..] ., G ~- r..,. i ... ... ........ _ .....
(S E A L)
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