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1484RESOLUTION NO. ~~ '~ A RESOLUTION AUTHORIZING A MEMORANDUM OF INTENT BETWEEN THE CITY OF WEST MEMPHIS, ARKANSAS AND WATKINS TERMINALS, 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 Watkins Terminals, Inc., a Georgia 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 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: April 4, 1996. APPROVED: ~`-'C~ Mayor 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 Counci- -- - '~ 4th day of April, 1996. (SEAL) r MEMORANDUM OF INTENT This MEMORANDUM OF INTENT is between the CITY OF WEST MEMPHIS, ARKANSAS (hereinafter referred to as the "City"), and WATKINS TERMINALS, INC., a Georgia 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: Preliminary. (a) The City is authorized by the 1. 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) 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 corporate boundaries of the City for use by the Company. It is expected at this time that the Project will consist of a truck terminal, shop and warehouse facility, to be accomplished in one or more phases. The Project will include necessary land and related equipment and other personal property. (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 $25,000,000 will be issued for all phases of the Project. 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 under the Arkansas Constitution and decisions of the Supreme Court of Arkansas, particularly the case of Wavland v. SnabD, 232 Ark. 57, 334 S.W. 2d 663 (1960), the properties comprising the Project will be exempt from ad valorem taxes by virtue of their ownership by the City. The Company and the City agree, however, to enter into an agreement substantially in the form attached hereto as Exhibit A requiring the Company to ~, make payments in lieu of taxes, in such amounts and on such terms as shall be acceptable to the City and the Company. ~" 4. General Provisions. (a) This Memorandum of Intent, and the Resolution authorizing it, are intended as official action 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) Any or all of the undertakings of the Company pursuant to this Memorandum of Intent may be completed or performed by any subsidiary or division of Watkins Associated Industries, '~ Inc., a Florida corporation and the corporate parent of the Company `~ (including, without limitation, Watkins Motor Lines, Inc., a +~,,: Florida corporation), as may hereafter be determined by the Company. (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 4th day of April, 1996. CITY OF WEST MEMPHIS, ARKANSAS By ~~ Mayor WATKINS TERMINALS, INC. A'1"1'!SS'1' (title) (SEAL) By (title) EXHIBIT A AGREEMENT FOR PAYMENTS IN LIEU OF TAXES City of West Memphis City Hall 205 South Redding West Memphis, Arkansas Attention: Mayor Watkins Terminals, Inc., a Georgia corporation (the "Company") has requested the City of West Memphis, Arkansas (the "City") to enter into a Memorandum of Intent pursuant to the authority of the laws of the State of Arkansas, including particularly Title 14, Chapter 164, Subchapter 2 of the Arkansas Code of 1987 Annotated (the "Act") for the purpose of assisting the Company in acquiring, constructing and equipping industrial facilities, consisting of a new truck terminal, shop and warehouse facility to be located within the City (the "Project"). The Project is expected to be completed in phases. To provide for the financing of the cost of all phases of the Project, it is proposed that the City issue up to $25,000,000 of industrial development revenue bonds under the authority of the Act (the "Bonds"). The Bonds will be secured by a pledge of revenues derived from the Project, including particularly lease rentals to be paid by the Company to the City under a lease agreement not to exceed thirty years (the "Lease") proposed to be entered into between the City and the Company. The Lease will provide that the Company is obligated to pay all taxes and assessments, general and special, levied and assessed on the Project during the term of the Lease, as well as water and sewer charges, assessments and other governmental charges and impositions. The Company and the City understand and agree that, notwithstanding such provisions in the Lease, under the decision of the Supreme Court of the State of Arkansas in the case of Wayland v. Snapp, 232 Ark. 57, 334 S.W.2d 663 (1960), the Project will be exempt from ad valorem taxes because it would be owned by the City and used for a public purpose within the meaning of the applicable Constitutional provision affording the exemption. Thus, the Company and the City agree that the Company, as lessee of the Project owned by the City, will, in fact, have no ad valorem taxes to pay under the provisions of the Lease. The City has indicated a reluctance to lose all tax revenues which would otherwise be received if the properties involved were privately owned. Therefore, to induce the City to proceed with the issuance of the Bonds and to induce the Company to build a substantial industrial project within the City, which will inure to the benefit of the Company and the City, and for other valuable consideration, the receipt of which is hereby acknowledged by the City, the Company agrees with the City as follows: 1. (a) The Company will make payments in lieu of taxes on or before October 1 in each of the following years and in the following amounts, expressed as percentages of ad valorem taxes which would be payable if the Project were subject to ad valorem taxes: (i) For five years commencing in the year following completion of the first phase of the Project, an amount equal to 30$ of the ad valorem taxes which would be payable if the Project were subject to ad valorem taxes, computed for the year in which the first phase of the Project is completed; and (ii) For the next succeeding fifteen years, an amount equal to 50~ of the ad valorem taxes which would be payable if the Project were subject to ad valorem taxes, computed for the year in which the first phase of the Project is completed. (b) In the event additional phases of the Project are completed, the foregoing payments shall be adjusted upwards by applying the applicable percentage in any year to the ad valorem taxes which would be payable with respect to such additional phase, computed for the year in which the additional phase is completed. 2. Representatives of the Company will meet with the Assessor of Crittenden County and determine the assessed valuation of the properties comprising the Project upon completion of each phase of the Project. The determination shall be made by mutual agreement if possible, and if not shall be made by the Assessor as though the Project were privately owned. The determination made with respect to each phase of the Project shall not change during the term of this Agreement. 3. The payments to be made by the Company pursuant to this Agreement are intended to be in lieu of all ad valorem taxes that would otherwise have to be paid to the State of Arkansas, Crittenden County, the City, and/or other taxing authorities (the "taxing authorities"). 4. The City agrees to distribute each payment hereunder among the taxing authorities in the proportion that the millage collected by each bears to the total millage collected by all during the year of distribution. 5. The City and the Company agree to use their best efforts to sustain the enforceability of this Agreement. However, if by reason of a change in the Constitution, or a change by the Supreme Court of the State of Arkansas in its interpretation of the Constitution or otherwise, the Company is required to pay any tax which the payments specified herein are intended to be in lieu of, the Company may deduct the aggregate of any such payments made by 2 it from the amount herein agreed to be paid in lieu of taxes and need only pay the difference to the taxing authorities. Furthermore, inasmuch as the payment herein agreed to be made by the Company is intended to be in lieu of taxes, it is agreed that said payment shall not as to any year be in an amount greater than would be payable for such year in ad valorem taxes, in the aggregate, on account of its ownership of the Project. 6. The agreement herein made shall terminate and be of no further force and effect from and after the date that the Lease shall terminate for any reason other than a default on the part of the Company. If such termination shall be at a point constituting ~,, a portion of a tax year, the Company shall pay for the year in which termination occurred that portion of the specified annual payment that the number of days in such tax year that the Company was Lessee prior to the termination bears to 365 or 366 days, as appropriate. 7. This agreement shall be binding upon the successors and assigns of the Company, but no assignment shall be effective to relieve the Company of any of its obligations hereunder unless expressly authorized and approved in writing by the City or unless the Company simultaneously assigns the Lease and under the terms thereof is thereby relieved of further obligations thereunder. 8. This agreement may be executed simultaneously in several counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this agreement to produce or account for more than one such counterpart. If the foregoing is acceptable, please so indicate by executing the acceptance set forth below, and returning to the Company, whereupon this instrument shall constitute a valid and binding contract between the Company and the City. DATED: 1996 ~" WATKINS TERMINALS, INC. By: Title: ACCEPTED: CITY OF WEST MEMPHIS, ARKANSAS By: ~~. Mayor 1996 3