HomeMy WebLinkAbout2-82 RESOLUTION•
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RESOLUTION NO. 0 -'0
A RESOLUTION AUTHORIZING A MEMORANDUM OF INTENT BY
AND BETWEEN THE CITY OF FAYETTEVILLE, ARKANSAS, AND
ARKANSAS WESTERN GAS COMPANY, AN ARKANSAS CORPORATION
PERTAINING,TO THE ISSUANCE OF INDUSTRIAL DEVELOPMENT
REVENUE BONDS FOR FINANCING THE COSTS OF ACQUIRING,
CONSTRUCTING AND EQUIPPING INDUSTRIAL FACILITIES;
AND PRESCRIBING OTHER MATTERS RELATING THERETO.
BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY OF
FAYETTEVILLE, ARKANSAS:
Section 1. That there be, and there is hereby authorized,
the execution and delivery of a Memorandum of Intent by and
between the City of Fayetteville, Arkansas, (the "Municipality"),
and Arkansas Western Gas Company, an Arkansas corporation,
Cthe "Company"), in substantially the form and with substantially
the contents hereinafter set forth, and the Mayor and City
Clerk be, and they are hereby, authorized .to execute and
deliver the Memorandum of Intent for and on behalf of the
Municipality. The form and contentof the Memorandum of
Intent, which are approved and which are made a part hereto,
shall be substantially as follows:
PASSED AND APPROVED this 6 day of �,�1,� Ar. , 1982.
5OFESrT;�y
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APPROVED:
624? MAYOR
1Y1 r1.1•4 .e ..ui.. r.. ' ,✓re
MEMORANDUM OF INTENT
This Memorandum of Intent is between the City of
Fayetteville, Arkansas, party of the first part (hereinafter
referred to as the "Municipality"), and Arkansas Western
Gas Company, an Arkansas corporation, party of the second
part (hereinafter referred to as the "Company").
IN CONSIDERATION of the undertakings of the parties set
forth herein and the benefits to be derived therefrom and of
o ther good and valuable considerations, receipt of which is
hereby acknowledged by the parties, the Municipality and the
Company agree:
1. Preliminary Statement.
(a) The Municipality is a duly organized and
existing city of the first class under the laws of the State
o f Arkansas and is authorized by the laws of the State of
Arkansas, including particularly Act No. 9 of the First
Extraordinary Session of the Sixty -Second General Assembly
o f 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 (as defined andauthorized by Act 9) and to lease
and/or sell the same for such rentals and payments and upon
such terms and conditions as the Municipality deems advisable.
(b) In order to secure and develop industry which
will furnish substantial employment and payrolls (in furtherance
of the public purpose of Act 9), it is proposed. that the
acquisition, construction and equipment of a
new industrial plant (consisting of lands, buildings,
improvements and facilities) (the "Project") be acquired,
constructed and equipped..
(c) The Company has determined that it must
obtain a commitment from the Municipality that it will issue
revenue bonds under Act 9. as the Company and the Municipality,
upon advice of counsel, shall deem appropriate-and_make the
proceeds available for the permanent financing of any part
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of the costs and expenses incurred in acquiring, constructing
and equipping the Project.
(d) The Municipality is willing to so commit and
to proceed with the .issuance of such bonds as and when
requested by the Company, in principal- amounts necessary to
furnish such permanent financing subject to compliance with
all conditions set forth in Act 9.
(e) The Municipality considers that the acquiring,
constructing and equipping of the Project and the leasing or
sale thereof to the Company, will secure and develop industry
and thereby promote the general health and economic welfare
of the inhabitants of the Municipality and adjacent areas.
2. Undertakings on the Part of the Municipality.
Subject to the conditions above stated, the Municipality
agrees as follows:
-(a) That when requested by the Company, it will
authorize and take, or cause to be taken, the necessary
steps to issue bonds under Act 9, in the aggregate principal
amount necessary to furnish the permanent financing of any
part of the costs of accomplishing the Project. In this
regard, it is estimated at this time that the cost of the
Project will be in an amount not to exceed $1.10.00,
000.00. Thus,
. industrial development revenue bonds will be issued under -
Act 9 in such amount as shall.be requested by the Company
for accomplishing all or any part of the Project (the "Bonds").
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(b). -That it will, at the 'propertime and_ -subject v � ___:�
in all respects to the recommendation and approval of the
Company, have the Bonds underwritten and will adopt, or
cause to be adopted, such proceedings and authorize the
execution of such documents as may be necessary and advisable
for the authorization, sale and issuance of the Bonds, the
acquiring, constructing and equipping of the Project, and
for the leasing or sale thereof to the Company, all in
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conformity with Act 9 and any other applicable federal and
state laws and upon terms and conditions mutually satisfactory
to the Municipality and the Company.
(c) That the aggregate basic rents or payments
(i.e., the rents or payments to be used to pay the principal
of, premiums, if any, and interest on the Bonds when due. The
leases or sale agreements shall contain such provisions as
are necessary or desirable, consistent with the authority
conferred by Act 9.
(d) That it will take or cause to be taken such
other acts and adopt such further proceedings as may be
required to implement the aforesaid undertakings or as it
may deem appropriate in pursuance thereof.
3. Undertakings on the Part of the Company. Subject to
the conditions above stated, the Company agrees as follows:
(a) That it will cooperate with the Municipality .
in the sale and issuance of the Bonds to the end of achieving
timely and favorable marketing thereof. - Toward this end,
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Stephens, Inc. of Little Rock, Arkansas has been retained as
underwriter. -
(b) That it will enter into such leases, sales
agreements or other appropriate agreements with the Municipality
under which the Company will obligate itself to pay to the
Municipality rents or payments sufficient to pay the principal
on, -premiums, if any, and interest on the Bonds. when _due and
containing suchother provisions'asare necessary or desirable
consistent with the authority conferred by Act 9.
(c) That it will take such further action and
adopt such further proceedings as_ may be required to implement ..
its aforesaid undertakings or as it may deem appropriate in
pursuance thereof.
4. General provisions.
(a). This Memorandum shall continue in full force
and effect until the Project and their financing by Bonds,
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as herein specified, is accomplished, and in this regard it
is understood that there may be separate issues of Bonds,
and separate series within a particular issue, with different
maturities, interest rates, redemption provisions and other
details. In the case of each issue, and of each series, the
Municipality will take appropriate action by ordinance or
resolution to sell and authorize the Bonds and to authorize
and execute such agreements and documents as may be determined
necessary or desirable by the Municipality and the Company.
(b) If the project is leased to the Company, the
Company agrees that it will make payments in lieu of ad -
valorem taxes for distribution to the ad valorem taxing
authorities on all facilities financed by the Bonds in the
same amount as it would have paid in ad valorem taxes had it
owned such facilities and assessed and paid ad valorem taxes
thereon along with the other properties in the Project.
IN WITNESS WHEREOF, the parties hereto have entered
into this Memorandum by their officers thereunto duly
authorized as of the 5' day of
ATTEST:
.CITY OF FAYETTEVILLE, ARKANSAS
, 1982.
MAYOR
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CITYY.CLER
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ATTEST:
ARKANSAS WESTERN GAS COMPANY, AN
ARKANSAS CORPORATION
r. By.
SECRETARY
PRESIDENT
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Section 2. That the Mayor and City Clerk be, and they
are hereby authorized and directed, for and on behalf of the
Municipality, to do all things, execute all instruments and
otherwise take all action necessary to the realization of
the Municipality's obligations under the Memorandum of
Intent.
PASSED AND APPROVED this day of
1982.
APPROVED:
.1q/z? $0-kiY
ATTEST:
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FAYETTEVILLE, ARKANSAS
POSTAL DRAWER F
December 22, 1981
OFFICE OF CITY ATTORNEY
72701 (501) 521-7700
Mr. Charles Scharlau
President
Arkansas Western Gas Co.
P.O. Box 1288
C Fayetteville, AR 72702
RE: City of Fayetteville $850,000.00
Industrial Development Revenue Bonds - Arkansas
Western Gas Company Project
Dear Mr. Scharlau:
In response to your letter dated December 18, 1981, to City
Manager Don Grimes, I have prepared the enclosed Inducement
Agreement and authorizing Resolution. In addition, I have confirmed
with Mr. Jim Buttry of Friday, Eldredge and Clark, attorneys at
law, that the project outlined in your letter does qualify for
Act 9 financing. The Friday firm has served as bond counsel for
several industrial development projects in the City. Arkansas
DWestern Gas Company, however,is free to select bond counsel of
../its choice. Please have all documents prepared by whomever you
select as bond counsel forwarded to this office for my review.
As you are no doubt aware, there is legislation pending in
Congress which would severely curtail, if not eliminate, the
ability of municipal corporations to issue tax exempt industrial
development revenue bonds. This legislation, if enacted, could
apply to pending bond issues which have not been closed even if
an inducement resolution or bond ordinance has been adopted by
the issuer. As a result, the sale of any Act 9 bonds approved by
the City Board for Arkansas Western Gas Company should be closed
as expeditiously as possible.
Should you have any questions, do not hesitate to contact
me. I will have the enclosed Resolution placed on the agenda for
the next regular City Board meeting, which will be January 5, 1982.
JNM:tr
Encls.
cc: Mr. Don Grimes
Sincerely,
CITY ATTORNEY
iu -- / /%L/ 1;/
James N. McCord