1570RESOLUTION NO. ~"S 1 ~
A RESOLUTION AUTHORIZING A MEMORANDUM OF
INTENT B~ THE CITY OF WFST MEMPHIS,
ARKANSAS A1~TD STAFFORD RAIL.STEEL, L.L.C.
PERTAINING TO THE ISSUANCE OF REVENUE BONDS;
AND PRESCRIBING OTHER MATTERS RELATING
THERETO.
BE IT RESOLVED by the City Council of the City of West Memphis, Arkansas:
Section 1. There is hereby authorized the execution and delivery of a
Memorandum of Intent by and between the City of West Memphis, Arkansas (the "City") and
Stafford Railsteel, L.L.C., a Delaware limited liability company (the "Company"), and the
Mayor and City Clerk are hereby authorized to execute and deliver the Memorandum of Intent
for and on behalf of the City. The Memorandum of Intent is approved in substantially the form
submitted to this meeting.
Section 2. The Mayor and City Clerk are hereby authorized and directed, for
and on behalf of the City, to do all things, execute all instruments and otherwise take all action
necessary to the realization of the City's obligations under the Memorandum of Intent.
PASSED: July 21, 1998.
APPROVED:
A T: ~ ~U~
Mayor
_ ty k
(SEAL)
.:•
CERTIFICATE
The undersigned, City Clerk of the City of West Memphis, Arkansas, hereby
certifies that the foregoing is a true and compared copy of a resolution passed at a regular
session of the City Council of the City of West Memphis, Arkansas, held at the regular meeting
place of the Council at 1:30 o'clock p.m., on the 21st day of ~µly, 1998. ~
// ff i-
(SP,AL)
.;,
e
MIIVIORANDUM OF ~
This MEMORANDU~vI OF INTENT is between the CITY OF WEST MEMPHIS,
ARKANSAS (hereinafter referred'to as the "City"), and STAFFORD RAILSTEEL, L.L.C., a
Delaware limited liability company (hereinafter referred to as the "Company").
. INCONSIDERATION of the undertakings of the parties set forth herein and the .
benefits to be derived therefrom and. of other good and valuable considerations, receipt of which
is hereby acknowledged by the parties, the City and the Company AGREE:
1. ~reliminarv. (a) The City is authorized by the-laws of the State of
Arkansas, including particularly Title 14, Chapter 164, Subchapter 2 of the Arkansas Code of
1987 Annotated (the "Industrial Development Act"), to issue revenue bonds for financing the
costs of acquiring, constructing and equipping industrial facilities (as defined in and authorized
by the Industrial Development Act). The City is also authorized by the laws of the State of
Arkansas, including particularly Title 14, Chapter 267 of the Arkansas Code of 1987 Annotated
(the "Pollution .Control Act"), to issue revenue bonds for financing the costs of acquiring,
constructing and equipping facilities used by a company for the control of air and water
pollution, sewage and disposal of solid waste. The Industrial Development Act and the Pollution
Control Act aze hereinafter collectively referred to as the "Acts."
(b) It is proposed that the City issue its revenue bonds under the Act for the
purpose of financing certain industrial facilities (the "Project") to be located within the City for
use by the Company. It is expected at this time that the Project will consist of a ferrous
recycling facility, with operations to include an electric azc furnace, a ladle metallurgy furnace,
a continuous caster, preheat and reheat furnaces and a rolling mill, a rail welding facility, and
other ancillary equipment, for the production of steel rail and other steel products. The Project
site will include approximately 1,200 acres of land, and necessary sewage and solid waste
disposal facilities.
(c) In order to secure and develop industry in furtherance of the public
purpose of the Acts, the City is willing to proceed with the issuance of such revenue bonds as
and when requested by the Company, subject to compliance with all conditions set forth in the
Acts.
(d) The City considers that the acquiring, constructing and equipping of the
Project will furnish substantial employment and payrolls and will thereby promote the economic
welfare of the inhabitants of the City and adjacent areas.
2. Undertakiiiss. Subject to the conditions stated herein, the City and the
Company agree as follows: -~ .
(a) When requested by the Company, the City .will take the necessary steps
to issue revenue bonds under the Acts in the aggregate principal amount necessary to furnish the
•- ~~ permanent financing of all or arty part- of the' costs of accomplishing the Project; including- ~° - ~ ~~-~~ ~~
reimbursement for costs and payments made within 60 days of the date hereof. It is estimated
at this time that revenue bonds in the aggregate principal amount of $366,000,000 will be issued
for the Project, and that the issuance of such revenue bonds will be on both a.tax exempt and
taxable basis. However, revenue bonds shall be issued in such amounts and on such basis as
shall be requested by the Company for accomplishing all or any part of the Project, whether
those amounts aze more or lest than the above estimate.
(b) . The City will, at the proper time .and subject in all respects to the
recommendation and approval of the Company, adopt such proceedings .and authorize the
execution of such documents as may be necessary and advisable for the issuance of the bonds,
the acquiring, constructing and equipping of the Project, and the leasing or sale thereof or the
coaling of loans therefor to the Company, all in conformity with the Acts and any other
applicable federal and state laws and upon terms and conditions mutually satisfactory to the City
and the Company.
(c) Upon the issuance of revenue bonds as provided herein, the Company will
enter into appropriate agreements with the City obligating itself to pay to the City amounts
sufficient to pay the principal of, premium, if any, and interest on the bonds when due, and
containing such other provisions as aze necessary or desirable consistent with the authority
conferred by the Acts.
(d) The Company will pay all costs of the Project and all financing costs
(including all expenses of the City in authorizing and issuing the bonds) not paid from the
proceeds of the bonds.
(e) The City and the Company will take such further action and adopt such
further proceedings as may be required to implement the aforesaid undertakings or as it may
deem appropriate in pursuance .thereof.
3. Ad Valorem Taxation. The City and the Company aze informed and
understand that under the Arkansas Constitution and decisions of the Supreme Court of
Arkansas, particulazly the case of Wayland v. Snapp,-232 Ark. 57, 334 S.W. 2d 663 (1960),
the properties comprising the Project will be exempt from ad valorem taxes by virtue of its
ownership by the City. The Company and the City agree, however, to enter into an agreement
substantially in the form heretofore negotiated between the City and the Company, requiring the
Company to make payments in lieu of taxes.
4, general Provisions. (a) This Memorandum of Intent, and the Resolution .
authorizing it, are intended as official action towazd the issuance of the bonds as may be
required by the Internal Revenue Code of 1986, as amended, and applicable rulings and
regulations thereunder. •.'
" (b) As specified in the Acts, the revenue bonds issued as provided herein will
not"be general obligations of the City, but will be special obligations, and in no event will they
constitute . an indebtedness of the City within the meaning of any constitutional or statutory
limitation. `"
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(c) The revenue bonds issued as provided herein may be issued under laws of
the State of Arkansas other than the Acts as the City shall deem appropriate or desirable.
(d) The Company may revise the plans for the Project and the facilities
presently expected to comprise the Project at any time and from time to time in any respect,
including, without limitation, any changes therein, additions thereto, substitutions therefor and
deletions therefrom, and this Memorandum of Intent shall apply thereto.
(e) Any or all of the undertakings of the Company pursuant to this
. Memorandum of Intent may be completed or performed by any entity affiliated with or related
to the Company, including, without limitation, any subsidiary or division of the Company or of
the corporate parent of the Company, as may hereafter be determined by the Company.
(fl This Memorandum of Intent shall continue in full force and effect until the
Project and its financing by revenue bonds (including bonds issued in separate series) is
accomplished.
IN VV]LTNF.SS WHEREOF, the City and the Company have entered into this
Memorandum of Intent by their officers thereunto duly authorized, as of the 21st day of July,
1998.
ATTEST:
C
CITY OF WFST MEMPHIS, ARKANSAS
By Q-2
Mayor
(SEAL)
STAFFORD RAIISTEEL, L.L.C.
ATTEST:
By
(title)
(title)
(SEAL)