1997-040T \WPDOCS\ORD\AIPC ORD
ORDI.ANCE NO. 7 ¥0
AN ORDINANCE OF THE CITY OF DENTON AUTHORIZING THE MAYOR TO EXECUTE
ON BEHALF OF THE CITY OF DENTON A MEMORANDUM OF UNDERSTANDING WITH
N.W. REALTY, INC. AND TERRANO REALTY, INC RELATING TO ECONOMIC
DEVELOPMENT PROGRAM INCENTIVES FOR INTERNATIONAL ISOTOPES, INC.
(AIPC) TO EFFECTUATE AN EXPANSION OF OPERATIONS AND AN INCREASE IN
EMPLOYMENT LEVELS OF AIPC IN DENTON BY LOCATING FACILITIES IN THE
454 ACRE NORTH TEXAS RESEARCH CENTER AND DECLARING AN EFFECTIVE
DATE.
THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS:
SECTION I. That the Mayor of the City of Denton is hereby
authorized to execute on behalf of the City of Denton a Memorandum
of Understanding with N.W. Realty, Inc. and Terrano Realty, Inc
relating to Economic Development Program Incentives for
International Isotopes, Inc., formerly Applied Isotope Products
Corporation (AIPC), to effectuate an expansion of operations and an
increase in employment levels of AIPC in Denton by locating
facilities in the 454 acre North Texas Research Center, ~n
accordance with the attached Memorandum of Understanding, which is
~ncorporated herein and made a part hereof for all purposes
SECTION II. That this ordinance shall become effective
immediately upon its passage and approval
PASSED AND APPROVED this the //~ day of ~, 1997
ATTEST:
JENNIFER WALTERS, CITY SECRETARY
APPROVED AS TO LEGAL FORM:
HERBERT L. PROUTY, CITY ATTORNEY
STATE IOF TEXAS S
MEMORANDI~M OF UNDERHTAN1)ZNG
COUNTY OF DENTON S
ECONOMIC DEVELOPMENT PROGRAM INCENTIVES FOR
INTERNATIONAL IBOTOPEBv INC. (ALPC)
These Economic Development Program Incentives (hereinafter
referred to as "Agreement") is made and entered into by N.W.
Realty, Inc. and Terrano Realty, Inc. (referred to jointly as
"Joint Venturer') and City of Denton (City) pursuant to S380.001 of
the Texas Local Government Code and by Ordinance of the City, for
the purposes and consideration stated below:
RECXTALS~
WHEREAS, Joint Venture owns approximately 434 acres (not
subject to any liens or deeds of trust) and AIPC owns 20 acres
situated in the City of Denton east of Woodrow Lane, south of E.
McKinney Street and west of Loop 288, known generally as the North
Texas.Research Center, a portion of which Joint Venture desires to
develop in conjunction with International Isotopes, Inc., (formerly
Applied Isotope Products Corporation) (AIPC); and
WHEREAS, AIPC is not agreeable to developing 1ts portion of
the 454 acre North Texas Research Center unless a divided, four-
lane,.asphaltic roadway, 3232 feet in length ("roadway"), beginning
at Woodrow Lane and traveling east is constructed at an estimated
cost of $606,000.00; and
WHEREAS, Joint Venture has requested the city to construct the
needed roadway in consideration for the construction of certain
improvements, the purchase of certain personal property and the
employment of a certain level of employees by AIPC and others in
the North Texas Research Center; NOW, THEREFORE,
In consideration of the mutual benefits and promises contained
herein and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. This agreement shall be effective as of the date of
execution of this agreement by City after approval by the city
Council. The parties understand that this Agreement shall not
be effective until it is approved by action of the City
Council. The Joint Venture must execute this agreement prior
to execution by the City and provide the City, prior to city's
execution of the agreement, documentation reflecting official
action by Joint Venturer corporations authorizing each
signatory to execute the agreement in its behalf. The
resolution, ordinance and other action by the parties
authorizing execution of this Agreement shall be attached to
this Agreement as exhibits and incorporated herein.
~OpONHIBILITIES OF AIPC/~OINT VENTURE
2. AIPC, or in the alternative, Joint Venture or its
successors and assigns agree that within three years of the
execution of this agreement the following improvements will be
completed and thresholds will be reached in the 454 acre North
Texas Research Center:
a. IMPROVEMENTS-one structure consisting of not less
than 35,000 square feet at a construction cost of
approximately $4 Million and another structure consisting
of not less than 27,000 square feet at a construction
cost of approximately $750,000.00.
b. PERSONAL PROPERTY-both structures to be equipped
with total personal property valued at approximately $7.5
Million.
c. EMPLOYMENT LEVELS-a payroll of $4 Million by end of
4th quarter of 1999.
RESPONSIBILITIES OF CITY
3. City agrees upon receipt of a formal written request
(Notice to Proceed) from Joint Venture to city Manager no
later than December 31, 1997 to construct the divided, four-
lane, asphaltic roadway 3232 feet in length referenced in the
recitals above to City's standard plans and specifications for
such roadways in the City. The roadway is to be completed
within 18 months after the Joint Venture provides City its
Notice to Proceed with construction or within 12 months if
Joint Venture provides at its own costs with its Notice to
Proceed with construction complete roadway design plans and
specifications ready for bidding. Exhibit "A" reflecting the
alignment and length of the roadway is attached hereto and
made a part hereof for all purposes. City is not required to
perform any design work or let the construction contract for
Kid until after the Notice to Proceed with construction of the
roadway and the instrument dedicating the right-of-way needed
to construct the 3232 feet roadway reflected in Exhibit "A"
have been delivered to the City. The dedication instrument
must comply with the right-of-way requirements of City's
subdivision rules and regulations and be in a form agreeable
to the City Attorney and Joint Venture. Under no
circumstances will the City be required to expend construction
costs and expenses in excess of $606,000.00 and design and
engineer supervision costs and expenses in excess of
$103,000.00
LIABILITIES OF JOINT VENTURE
4.(a) Joint Venture or its successors and assigns agree that
if the Improvements, Personal Property and Employment Payroll
levels set forth in paragraph 2 above are not met within three
years of the execution of this agreement, Joint Venture will
PAGE 2
pay the outstanding balance due and payable under the Note
described in 4(b) below and the joint venture will have no
further liability. Joint Venture will be entitled to a
discount or reduction in the principal of the note described
in 4(b) below in the amount of the projected increase in
revenue to city in ad valorem taxes over the amount of such
taxes that accrued in 1996 on the 454 acre North Texas
Research Center by reason of the construction of any
improvements or the equ~pplng of such improvements with
personal property for the years 2000 though 2009. In other
words, Joint Venture will receive a credit for any real estate
and personal property taxes which accrue on the 454 acre North
Texas Research Center in 1999 an excess of the taxes that
accrued in 1996 on such acreage times 10 years. For example,
assume City taxes on 454 acre North Texas Research Center in
1996 are $30,000 and the taxes in 1999 are $90,000. The
$60,000 excess is multiplied by 10 to equal a $600,000
discount to the possible $709,000 note that comes due in 2000.
(b) Joint Venture will execute a non interest bearing
Promissory Note in the amount of (1) $709,000 for the cost for
constructing the roadway 3232 feet In length (including
independent consulting and professional fees expended by the
City subsequent to January 1, 1997 for the design, supervision
and construction of such roadway); or (2) $606,000 if Joint
Venture elects to cover the costs for preparation of the
roadway design plans and specifications referenced in
paragraph 3 above; with a deed of trust (or appropriate
substitute document approved by the city Attorney and Joint
Venture) as collateral covering the approximately 434 acres of
the North Texas Research Center for the purpose of reimbursing
City if the improvements, personal property and employment
payroll levels set forth above are not met by AIPC or others
within three years of the execution of this document. Such
note and deed of trust to the city of Denton shall be executed
by Joint Venture concurrently with the Joint Venture filing
its Notice to Proceed with construction of the roadway and
dedication instrument as set forth in paragraph 3 above. If
Joint Venture desires to sell a portion of the 434 acres of
the North Texas Research Center, Joint Venture shall be
entitled to part~al releases from the Deed of Trust referenced
above in consideration for substituting an Escrow Agreement
(composed in a form agreeable to the City Attorney and Joint
Venture) funded at $1500 per acre (if Joint Venture provides
roadway design plans and specifications at 1ts own cost) or
$1700 per acre, if City under this agreement is responsible
for roadway design costs, for each acre Joint Venture desires
to sell or transfer. This escrow can be drawn upon by City ~f
Joint Venture fails to timely pay the note above when due, ~f
applicable, to reduce the principal of such note. city agrees
that up to 20 acres of the 434 acres of the North Texas
Research Center still owned by Joint Venture sub]ect to th~s
agreement may be released from the deed of trust without an
escrow funding if such acreage is sold or transferred to AIPC
or the University of North Texas to effectuate its expansion
PAGE 3
of operations and employment payroll in Denton as referenced
in the "Responsibilities of AIPC/JOINT VENTURE paragraph
above. If Joint Venture sells or transfers any portion of its
remaining 434 acres of the North Texas Research Center without
City's prior written consent, city may declare the debt
secured by this deed of trust immediately payable. In that
event City will notify Joint Venture that the debt is payable
and if it is not paid within thirty days after notice to Joint
Venture, City may without further not~ce or demand to Joint
Venture invoke any remedies provided at law, including, but
not limited to, foreclosure of that portion of the 434 acres
of the North Texas Research Center not released for sale or
transfer by City. The deed of trust shall be released by the
City if the escrow funding above equals the amount of the
note. Joint Venture may substitute either a Performance Bond
or Escrow Agreement in the amount of the above cost for
constructing the roadway (both documents must be composed
a form agreeable to the City Attorney and Joint Venture)
lieu of the note and deed of trust. If Deed of Trust option
for collateral is selected by Joint Venture, a title
commitment letter will be required, five working days prior to
Joint Ventures filing its Notice to Proceed with construction
of the roadway, reflecting no deeds of trust or liens
(Judgment or otherwise) outstanding on the 434 acres of the
North Texas Research Center st~ll owned by Joint Venture.
Joint Venture agrees that during the term of this Agreement
and for at least three years from the date of execution of
this Agreement it will not incur any additional lien, security
agreement or encumbrance on or sell any portion of the 434
acres of the North Texas Research Center unless it receives
the written consent of the City or has provided the City (a)
an escrow fund in the amount of the entire note, (b) an escrow
fund in the amount per the $1,700/$1,500 per acre release
price or (c) the performance bond, as all three are referenced
above.
(c) city shall be entitled to access to records of Joint
Venture or others in association with Joint Venture to verify
incentives set forth in the paragraph entitled
"RESPONSIBILITIES OF AIPC/JOINT VENTURE" above are met.
Additionally, City shall be provided access to and be
authorized to inspect the improvements, personal property and
employment levels of the premises envisioned ~n paragraph 2 of
this agreement. Further, Joint Venture shall certify annually
to the city that Joint Venture is in compliance with the terms
of this agreement. Lastly, ~f Joint Venture falls to comply
with the terms of this paragraph, such failure will constitute
a default. If the default is not remedied within 30 days
after written not~ce to Joint Venture, City may invoke the
remedies set forth in paragraph 4(b) above.
PAGE 4
TERMXNATION OF A~REEMENT
5. Joint Venture may terminate this agreement before the
Notice to Proceed is provided to the City for the construction
of the roadway above.
~S~BLL~NEOUS PROVISIONS
6. ENTIRE AGREEMENT-This agreement contains the entire
agreement between the parties with respect to the transaction
contemplated herein.
7. AMENDMENT-This agreement may only be amended, altered or
revoked by written instrument signed by Joint Venture and
authorized by City's governing body.
8. SUCCESSORS AND ASSIGNS-This agreement shall be binding on
and inure to the benefit of the parties, their respective
successors and assigns. This agreement shall be recorded in
the Deed Records of Denton County to place all successors and
assigns on notice of the terms and conditions of this
agreement. The Joint Venture may assign all or part of its
rights and obligations hereunder only upon prior written
approval of City's City Council, which approval shall not be
unreasonably withheld or delayed.
9. NOTICE-Any notice required above shall be forwarded to
the parties by hand delivery or certified mail with return
receipt requested, postage prepaid, addressed to the
appropriate party at the following addresses or at such other
addresses provided by the parties in writing as follows:
JOINT VENTURE CITY
N.W. Realty, Inc. city Manager
1303 Campbell Road 215 E. McKinney
Houston, Texas 77055 Denton, Texas 76201
Terrano Realty, Inc.
1303 Campbell Road
Houston, Texas 77055
10. APPLICABLE LAW-This agreement is made, and shall be
construed and interpreted under the laws of the State of Texas
and venue shall lie in Denton County, Texas.
11. SEVERABILITY-In the event any provision of this agreement
is illegal, invalid or unenforceable under present or future
laws, then, and in that event, 1t is the intention of the
parties hereto that the remainder of thls Agreement shall not
be affected thereby.
PAGE 5
_~ EXECUTED by the City of Denton, Texas this the //~ day
of-~~~.__, 1997
JOINT VENTURE
TERRANO REALTY, INC. ~ ~
CIT~ OF DE~ON
JACK MILLER ATTEST:
t~ S~etary
APPROVED AS TO FO~:
Herbert L. Prouty, City Attorney
STATE OF TEXAS
COUNTY OF DENTON
BEFORE ME the undersigned authority, a Notary Public in and
for said State of Texas, on this day personally appeared
<~/~a/ /f~_~/~- , on behalf of N.W. Realty, Inc., known to me
to be the person who signed and executed the foregoing instrument,
and acknowledged to me that this instrument was executed for the
purposes and consideration therein expressed.
~ ~ . GIVEN~ ~DER MY, ~D1997.~D SEAL OF OFFICE this the //~day of
PAGE 6
STATE OF TEXAS
COUNTY OF DENTON
BEFORE ME the undersigned authority, a Notary Public in and
for said State of Texas, on this day personally appeared
.~O~ ~oa~4~F- , on behalf of Terrano Realty, Inc., known to
me to be the' person who signed and executed the foregoing
instrument, and acknowledged to me that this instrument was
executed for the purposes and consideration therein expressed.
, 1997.
~(*~ ~ COMMI~ION ~IRE8 ~} ~e of TeXas
My Co~szo~
STATE OF TEXAS S
COUNTY OF DENTON ~
BEFORE ME the undersigned authority, a Notary Public in and
for said State of Texas, on this day personally appeared Jack
Miller, Mayor for the City of Denton, known to me to be the person
who signed and executed the foregoing instrument, and acknowledged
to me that this instrument was executed for the purposes and
consideration therein expressed.
_ GIVEN UNDER MY HAND AND SEAL OF OFFICE this the //~ day of
~ ~,~~ , 1997.
~.*~f} ~ OOMMI~ION EXPIRES It
T,\WPDOCS\K\FOUTS093.K
PAGE 7
000.
Lmm~ S~Tll
I"-],.,,.~..,~ ('~']~** NORTH TI1XAS RRSnARC;H CRNTRR
F~b-07-~7 04~45P Vts ,1~ Ch&nges~ ;nc, ( ])gfl4-2632 P.~O
UNANIMOUS CONSENT OF Tile BOARD OF
DIRECTORS AND SHARi~-HOLDERS
IN LIEU OF ANNUAL
Puriuant to lbo terms und 0;~vJoioM ot'Arlide MEETING OF'
TERRANO REALTY, INC.
9.10B OF th~ Tern Businm Corpomtioo Act nd in lieu of on .rani mo~ing of'
Board of' DIM~fs, Ihe undo~tsned, constrain8 tho solo Director of'
TERRAlqO RF. ALTY, ~C., ~ Tern Coqxntion (the 'Comps"). does hereby
lho~Gompm~ to lmve JOHN AL MeC'ORMACIG Preddent etot (m bolulr of'the
hoeuiiv~ for lnMflulbul Isotopes, Ino. with tho C~ty ol'Detdon. ~ the
IN W?NESS WHEREOF, the undersiSJJod i'~_~ Ires executed this
~,mmnt ~ tho 7th day ~ Fobruary. 1~7 /;,~
Fmb-07-~7 04:4~P Vl~ ,~e Change~, %nc. ( 3)gB4-2632 p.~x
UNANIMOUS CONSENT OF THE BOARD OF
DIRECTORS AND SHAREHOLDERS
IN LlglJ OF ANNUAL
PuT, mint to the tram md Imwiskms of A~/cl~ MEgTING OF
NW RI~ALTV, INC.
9.10B of~ T~as Business ~ Act md/n Heu of'an ~mual meet/rig of
lUt~'rY', n~c., a T~ C, oq~a~ (t~'C~mm~, d~ ~ unantnou~y
~ to, adopt md ~ lbo followi~
f
~ WHERBA~ I1~ Board of ~ 4~nn il lo I~ in I1~ Ix~ ~ of
con.~ ~ ~ ?~h ~ of ~, ~7. /