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1673RESOLUTION NO. I b~3 A RESOLUTION AUTHORIZING A MEMORANDUM OF INTENT BETWEEN THE CITY OF WEST MEMPHIS, ARKANSAS AND LANGSTON COMPANIES, INC. PERTAINING TO THE ISSUANCE OF INDUSTRIAL DEVELOPMENT 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 Langston Companies, Inc., a Tennessee corporation (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 May authorized and directed, for and things, execute all instruments necessary to the realization of Memorandum of Intent. PASSED: November 2, 2000. ATTEST: Clerk or and City Clerk are hereby on behalf of the City, to do all and otherwise take all action the City's obligations under the APPROVED: Mayo (SEAT, ) DECEIVED CITY CLERKS OFFICE DATE Ib ~27 ~b p Sl: 3SN-'+~ MEMORANDUM OF INTENT This MEMORANDUM OF INTENT is between the CITY OF WEST MEMPHIS, ARKANSAS (hereinafter referred to as the "City"), and LANGSTON COMPANIES, INC., a Tennessee corporation (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 other good and valuable considerations, receipt of which is hereby acknowledged by the parties, the City and the Company AGREE: 1. Preliminary. (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 "Act"), to issue revenue bonds for financing the costs of acquiring, constructing and equipping industrial facilities (as defined in and authorized by the Act). (b) The Company presently operates an industrial plant within the corporate limits of the City (the "Plant") for the manufacture of multiwall paper bags. It is proposed that the City issue its revenue bonds under the Act for the purpose of financing certain additional facilities as part of an expansion of the Plant (the "Project") . It is expected at this time that the Project will consist of an approximately 50,000 square foot addition to the Plant, together with various machinery, equipment and other personal property to be installed in the Plant and related renovations and improvements to the Plant. (c) In order to secure and develop industry in furtherance of the public purpose of the Act, 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 Act. (d) The City considers that the acquiring, constructing and equipping of each phase 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. Undertakings. 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 Act in the aggregate principal amount necessary to furnish the permanent financing of all or any part of the costs of accomplishing the Project. It is estimated at this time that revenue bonds in the aggregate principal amount of up to $3,600,000 will be issued. However, revenue bonds shall be issued in such amounts as shall be requested by the Company for accomplishing all or any part of the Project, whether those amounts are more or less 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 thereof to the Company, all in conformity with the Act 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 and interest on the bonds when due, and containing such other provisions as are necessary or desirable consistent with the authority conferred by the Act. (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 are informed and understand that all or part of the properties comprising the Project may be exempt from ad valorem taxes by virtue of their ownership by the City, and in such case, the Company will agree to make payments to the City in lieu of ad valorem taxes as the parties shall negotiate. The amount and other details concerning such payments will be embodied in an appropriate agreement between the City and the Company which is mutually acceptable. 4. General Provisions. (a) This Memorandum of Intent, and the Resolution authorizing it, are intended as official intent toward 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 Act, 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. (c) The revenue bonds issued as provided herein may be issued under laws of the State of Arkansas other than the Act 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) It is understood that at the request of the Company, all or a portion of the Project may be leased or sold or loans made therefor by the City to a separate corporation, limited liability company or other entity for the ultimate use by the Company. In such event such corporation, limited liability company or other entity shall be entitled to complete or perform the undertakings of the Company pursuant to this Memorandum of Intent. The details concerning the use of the Project or portion thereof by the Company will be embodied in a sublease or other appropriate agreement between the Company and such corporation, limited liability company or other entity. (f) 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 WITNESS WHEREOF, the City and the Company have entered into this Memorandum of Intent by their officers thereunto duly authorized, as of the 2nd day of November, 2000. CITY OF WEST MEMPHIS, ARKANSAS ATTEST: ~;` / / Mayo •' y Clerk (SEAL ) LANGSTON COMPANIES, INC. By Title