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A RESOLUTION TO AUTHORIZE THE EXECUTION AND DELIVERY OF AN ESCROW DEPOSIT AGREEMENT IN CONNECTION WITH THE DEFEASANCE OF BONDS ISSUED TO SUPPORT COLSON CASTER LLC AND ITS AFFILIATES; TO AUTHORIZE THE CONVEYANCE OF REAL PROPERTY RELATED TO THE BONDS; AND FOR OTHER PURPOSES
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WHEREAS, the City previously issued its $11,000,000 Taxable Economic Development Revenue Bonds (ADFA/AEDC Guaranty Programs) (Colson Caster Project) Series 2022A (the “Series 2022A Bonds”) and its $4,000,000 Taxable Economic Development Revenue Bonds (Colson Caster Project) Series 2022B (the “Series 2022B Bonds,” and collectively with the Series 2022A Bonds, the “Defeased Bonds”) pursuant to the terms of a Trust Indenture dated as of April 19, 2022 between the City and First Security Bank (the “Trustee”); and
WHEREAS, contemporaneous with the issuance of the Defeased Bonds, the City issued its not to exceed $9,000,000 Taxable Economic Development Revenue Bonds (Colson Caster Project), Series 2022C (the “Series 2022C Bonds” and together with the Defeased Bonds, the “2022 Bonds”); and
WHEREAS, proceeds of the 2022 Bonds were loaned to Colson Caster LLC and its affiliates (the “Company”) to finance the acquisition and construction of manufacturing facilities, infrastructure and improvements and the acquisition and installation of facilities and equipment for the development, manufacture, warehousing and distribution of casters and wheels located at 2121 Barnhill Road, Jonesboro, Arkansas (the “Project”) ; and
WHEREAS, contemporaneous with the issuance of the 2022 Bonds, the Company (i) granted a mortgage to First Security Bank, as collateral agent, to secure the Company’s obligations under guarantees from the Arkansas Development Finance Authority and the Arkansas Economic Development Commission supporting the Series 2022A Bonds and the Company’s obligations with respect to the Series 2022B Bonds and (ii) implemented a sale-leaseback transaction with the City in order for the Project to be eligible for ad valorem property tax abatement; and
WHEREAS, the Project was constructed and is operational; and
WHEREAS, the Company is exercising its option to repurchase the real estate and buildings comprising the Project for a price that is sufficient to defease the Series 2022A Bonds and the Series 2022B Bonds; and
WHEREAS, the City, the Trustee, and the Escrow Agent (as defined below) will enter into an Escrow Deposit Agreement to make adequate provision for the retirement, at maturity and upon redemption prior to maturity on April 1, 2027, of the Defeased Bonds; and
WHEREAS, this resolution is adopted to authorize the execution of one or more deeds to transfer title to the referenced real estate upon the exercise of the option in compliance with the provisions of Ark. Code Ann. § 14-54-302 relating to the transfer of real property owned by a municipality.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF JONESBORO, ARKANSAS:
Section 1. That there be and is hereby authorized the execution and delivery of the Escrow Deposit Agreement (the “Escrow Deposit Agreement”) by and between the City, the Trustee, and First Security Bank, as escrow agent (the “Escrow Agent”), and the Mayor and City Clerk are hereby, authorized to execute, acknowledge and deliver the Escrow Deposit Agreement for and on behalf of the City. The Escrow Deposit Agreement is hereby approved substantially in the form submitted to this meeting.
Section 2. The Mayor and City Clerk are authorized to execute, acknowledge and deliver all papers, affidavits, statements, documents, certificates, deeds, releases, and other instruments that may be required to evidence the transfer of title to the real estate and buildings, to release or consent to the release of liens and encumbrances securing or related to the Defeased Bonds, and to satisfy the requirements of the title company assisting with the closing of the repurchase of such property. All such instruments shall be subject to the review and approval of the City Attorney prior to execution and delivery.
Section 3. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or word of this resolution is declared or adjudged to be invalid or unconstitutional, such declaration or adjudication shall not affect the remaining portions of the resolution which shall remain in full force and effect as if the portion so declared or adjudged invalid or unconstitutional were not originally a part of the resolution.
Section 4. Repealer. All laws, ordinances, resolutions, or parts of the same that are inconsistent with the provisions of this resolution, are hereby repealed to the extent of such inconsistency.