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HomeMy WebLinkAbout16478 1 RESOLUTION NO. 16,478 2 3 A RESOLUTION TO AUTHORIZE THE MAYOR TO ENTER 4 INTO A LETTER OF INTENT WITH BERNHARD ENERGY,LLC, 5 AND THE BILL, HILLARY & CHELSEA CLINTON FOUNDA- 6 TION TO CREATE A SUSTAINABLE ENERGY DISTRICT; TO 7 DETERMINE THE FEASABILITY OF THE CITY TO PARTICI- 8 PATE IN SUCH A PROGRAM;AND FOR OTHER PURPOSES. 9 10 WHEREAS, Bernhard Energy, LLC ("Bernhard") is interested in working with the Bill, Hillary & 11 Chelsea Clinton Foundation("the Foundation")to create a sustainable energy district, and has invited the 12 City of Little Rock,Arkansas("the City")to participate in such a district;and, 13 WHEREAS,such a project is consistent with the City's desire to maximize the creation of energy with 14 the least damage to the environment;and, 15 WHEREAS,the Letter of Intent attached as Exhibit A to this Resolution sets forth the initial planning 16 phases for such a process; 17 NOW,THEREFORE,BE IT RESOLVED BY THE BOARD OF DIRECTORS OF THE CITY 18 OF LITTLE ROCK,ARKANSAS: 19 Section 1. The Mayor is authorized to execute a Letter of Intent with Bernhard and the Foundation to 20 work towards the fmal planning and structuring of the Clinton Sustainable Energy District, and to further 21 negotiations and documentation to consummate and complete such a district. 22 Section 2. Severability. In the event any title, section, paragraph, item, sentence, clause, phrase, or 23 word of this resolution is declared or adjudged to be invalid or unconstitutional, such declaration or adju- 24 dication shall not affect the remaining portions of the resolution,which shall remain in full force and effect 25 as if the portion so declared or adjudged invalid or unconstitutional were not originally a part of the reso- 26 lution. 27 Section 3. Repealer. All laws,ordinances,resolutions,or parts of the same,that are inconsistent with 28 the provisions of this resolution,are hereby repealed to the extent of such inconsistency. 29 ADOPTED: October 15,2024 30 ATTEST: APPROVED: 31 • 32 33 Allison Segars,Ac`;*'' ity Clerk Frank Scott,Jr.,M 34 • [Page 1 of 10] 1 APPROVED AS TO LEGAL FORM: 2 3 ACM• 4 Thomas M.Carpenter,City Atto ey 5 // 6 // 7 // 8 // 9 // 10 // 11 // 12 // 13 // 14 // 15 // 16 // 17 II 18 /1 19 // 20 // 21 // 22 // 23 // 24 // 25 // 26 // 27 // 28 // 29 // 30 // 31 // 32 // 33 // 34 // [Page 2 of 10] 1 Exhibit A 2 LE ITER OF INTENT 3 4 [date],2024 5 6 Bill,Hillary,and Chelsea Clinton Foundation 7 Attn: Stephanie Streett,Executive Director 8 [55 West 125th Street, 14th Floor 9 New York,NY 10027] 10 [email] 11 12 City of Little Rock,Arkansas 13 Attn: [name] 14 [address 1] 15 [address 2] 16 [email] 17 18 Bernhard Energy,LLC 19 Attn: [name] 20 1 Allied Drive,Building 2, Suite 2600 21 Little Rock,AR 72202 22 [email] 23 24 25 This letter of intent("LOI") outlines a proposed Clinton Sustainable Energy District("CSED")to be ini- 26 tially created, developed, operated, maintained, and managed by the Bill, Hillary, and Chelsea Clinton 27 Foundation("Foundation"),the City of Little Rock,Arkansas("City"),and Bernhard Energy,LLC("Bern- 28 hard"). 29 30 1. Purpose and Intent. This LOI confirms the parties' agreement in principle to the proposed CSED, subject to the terms and conditions of the LOI.While this LOI is not a binding agreement,the parties agree 32 to work together in good faith and to move as quickly as is practicable to fmal planning and structuring for 33 the CSED and the negotiation and execution of defmitive documentation to consummate and complete the 34 CSED. [Page 3 of 101 1 2. CSED Details.Upon successful completion of due diligence,and satisfaction or waiver of all other 2 conditions set out in this LOI,the parties agree to create,develop,operate,maintain,and manage the CSED 3 as follows: 4 a. The Foundation will execute an energy-as-a-service("EaaS")transaction with Bernhard. 5 i. Bernhard (via a special purpose entity ("Bernhard SPE")) will take a concession 6 of the Foundation's energy assets at the Clinton Presidential Center("CPC"). 7 ii. Bernhard (via the Bernhard SPE) will pay the Foundation an advance lease pay- 8 ment in exchange for the concession of the energy assets. 9 iii. The Foundation will use a portion of the advance lease payment to fund improve- 10 ments necessary to operate the USED, including installing district chilled water 11 piping to the western edge of its property line,adding the chillers and cooling tow- 12 ers necessary to provide chilled water capacity to serve the CSED,and developing 13 an off-site solar PV array that will provide renewable energy certificates that can 14 offset carbon emissions associated with the purchased utilities required to operate 15 the CSED. 16 b. The City will execute a separate EaaS transaction with Bernhard. 17 i. Bernhard(via the Bernhard SPE)will take a concession of certain energy assets of 18 the City at various locations relevant to the CSED, including the Statehouse Con- 19 vention Center("SCC"). 20 ii. Bernhard (via the Bernhard SPE) will pay the City an advance lease payment in 21 exchange for the concession of the energy assets. 22 iii. The City will use a portion of the advance lease payment to fund improvements 23 necessary to operate the CSED,including installing district chilled water piping to 24 interconnect its buildings (including various buildings in the vicinity of City Hall 25 and the SCC)and adding the equipment necessary to provide chilled water capac- 26 ity to serve the CSED. 27 c. Bernhard(via the Bernhard SPE) will operate and maintain the CSED during the term of 28 the EaaS arrangements. 29 d. Bernhard (via the Bernhard SPE)will install necessary CSED chilled water piping to in- 30 terconnect third-party CSED subscribers to the sponsors of the CSED. 31 e. The Foundation and the City will pay to Bernhard(via the Bernhard SPE)thermal services 32 charges ("TS Charges") in exchange for Bernhard(via the Bernhard SPE)providing ther- 33 mal services to each party during the term of their respective EaaS arrangements. [Page 4 of 10] 1 f. As sponsors of the CSED,the Foundation and the City will receive credits(in an amount 2 to be negotiated)against their respective TS Charges if and when third parties take service 3 from the CSED, if said third party service is provided by thermal service assets funded 4 with the sponsor's capital. 5 6 The parties acknowledge and agree that the final terms,conditions,and responsibilities of,and with respect 7 to,the CSED will be determined,negotiated,and agreed upon on an ongoing basis by the parties,depending 8 upon strategic priorities and needs. 9 10 3. Development and Due Diligence.To ensure the timely and successful consummation of the CSED, 11 the parties will (i) promptly and mutually determine the timeline, schedule, terms, conditions, and other 12 development and due diligence requirements of the parties; (ii)promptly provide to each other party rea- 13 sonable access to all properties and information reasonably related to the CSED; (iii) promptly continue 14 and complete all necessary due diligence investigations on the CSED and the parties;(iv)promptly engage 15 all necessary fmancial, legal, and other advisors; (v)participate in all meetings reasonably requested by a 16 party with all reasonably requested personnel(e.g.,management,fmance, operations, facilities, and legal, 17 as applicable); and(vi)prioritize and dedicate sufficient time,funding,and management resources for the 18 performance and completion of this LOI. 19 20 4. Conditions.The parties acknowledge and agree that consummation of the CSED is conditioned on 21 the following: 22 23 a. Each party, in its sole determination, concluding that the CSED makes operational and 24 economic sense; 25 b. Each party completing satisfactory due diligence review of the CSED and the other parties; 26 c. Each party agreeing to a transaction and consideration structure; 27 d. Each party obtaining and/or making all necessary approvals,consents,and filings from and 28 with all necessary boards,officers,third parties,and governmental agencies; 29 e. Each party satisfying all applicable legal and regulatory requirements; 30 f. The absence of any material adverse change in the business, operations, financial condi- 31 tion, or properties of the parties, or any event that may result in such material adverse 32 change;and 33 g. The negotiation and execution of definitive documentation for the CSED and correspond- 34 ing EaaS arrangements. [Page 5 of 10] 1 5. Defmitive Documentation. The complete and final terms for the CSED and corresponding EaaS 2 arrangements will be set out in definitive documentation,which will be executed by the parties.The defm- 3 itive documentation will contain customary terms,conditions,responsibilities,representations,and warran- 4 ties for transactions of this nature.Bernhard will provide the Foundation and the City with initial drafts of 5 the definitive documentation for the CSED and corresponding EaaS arrangements.The parties will use their 6 best efforts to consummate the definitive documentation within 120 days after the date of this LOI as first 7 set out above("Effective Date"). 8 9 6. Term;Termination.The term of this LOI will start on the Effective Date and end on December 31, 10 2024.At the end of the term,the parties may continue the relationship as mutually agreed in writing.Not- 11 withstanding anything to the contrary in this LOI, each party has the right to terminate the LOI upon no 12 less than [30] days written notice to each other party. 13 14 7. Statement of Intention Only.This LOI constitutes a non-binding statement of the parties'respective 15 intentions with respect to the CSED.No party will be obligated by this LOI to enter consummate the CSED 16 or into an EaaS arrangement or other transaction.A binding commitment with respect to the CSED will 17 result only from the parties' subsequent execution of defmitive documentation.Notwithstanding the fore- 18 going, the parties acknowledge and agree that the sections "Statement of Intention Only," "Expenses," 19 "Confidentiality/Proprietary Rights," "Publicity," "Relationship of the Parties," "Governing Law," and 20 "Dispute Resolution"in this LOI are binding and enforceable legal and contractual obligations of the parties 21 that will survive termination and expiration of this LOI. 22 23 8. Expenses.Unless otherwise expressly provided in this LOI or in subsequent definitive documenta- 24 tion,each party will bear its own costs and expenses in connection with this LOI and the CSED, including 25 the negotiation and consummation of any definitive documentation.Notwithstanding the foregoing, if the 26 parties consummate an EaaS arrangement via definitive documentation, Bernhard may include its costs 27 incurred in developing the EaaS proposals and final EaaS arrangements as part of the project costs. 28 29 9. Confidentiality; Proprietary Rights. Each party has obtained and will obtain Confidential Infor- 30 mation(as defined below) from or on behalf of each other party. Except as required by applicable law or 31 an order of a court or governmental authority, each party will keep all Confidential Information strictly 32 confidential and,with respect to each other party's Confidential Information,will not directly or indirectly 33 (i)use it for any purpose other than performing this LOI; (ii)publish,disclose,or otherwise make it avail- 34 able to any third party;(iii)use it in competition with or to the detriment of the other party,or for the benefit 35 of any third party;or(iv)otherwise misappropriate it in any manner,except as permitted by the other party [Page 6 of 10] 1 in writing. For this LOI, "Confidential Information" means all non-public information that would be un- 2 derstood by a reasonable person to be confidential or proprietary in a commercial context,including but not 3 limited to all non-public information(whether written or verbal)exchanged by the parties about or related 4 to their respective operations and organizations. Confidential Information expressly excludes any infor- 5 mation that: (i) is or becomes generally available to the public on a non-confidential basis, including from 6 a third party,provided that such third party is not in breach of an obligation of confidentiality with respect 7 to such information;(ii)a party had in its possession prior to the receipt of such information from the other 8 party;or(iii)a party authorizes in writing may be disclosed.Except as expressly permitted in this LOI,each 9 party retains all rights in and to its respective Confidential Information.For clarity,the EaaS arrangements 10 and their specific terms,and all know-how used by Bernhard to create the EaaS proposals and develop the 11 potential EaaS arrangements,are Confidential Information of and proprietary to Bernhard.After the end of 12 the term of this LOI,each party has a continuing obligation to maintain the confidentiality of the Confiden- 13 tial Information of the other parties and to avoid its unauthorized use or disclosure. 14 15 Notwithstanding any language set out above, as it relates to the City, whether to release information ob- 16 tained by the City pursuant to this LOI shall be governed by the Arkansas Freedom of Information Act. In 17 the event the City is asked to disclose confidential information pursuant to a request duly made under the 18 Arkansas Freedom of Information Act,as determined by the City,the City will use its best efforts to notify 19 Bernhard and/or the Foundation,as applicable, immediately of the pending request,providing cooperation 20 with Bernhard and/or the Foundation, as applicable, in seeking an appropriate protective order to limit the 21 disclosure of information subject to redaction.The final decision as to what information is subject to release 22 shall be made by the City Attorney for the City. 23 24 10. Other Proposals.During the term of this LOI and for 24 months after expiration or termination of 25 this LOI, in consideration of the time and resources that the parties have previously devoted and will con- 26 tinue to devote to the CSED,and the various diligence review activities undertaken by the parties and their 27 respective affiliates, the parties will not, directly or indirectly through any director, employee, affiliate, 28 representative,agent,or otherwise: (i)solicit, initiate,encourage,or assist in the submission of any inquir- 29 ies,proposals,or offers from any person or other entity or group relating to any project similar to the CSED 30 (an"Alternative Proposal");(ii)participate in any discussions or negotiations regarding an Alternative Pro- 31 posal or provide any person or entity any information concerning the CSED; or (iii) otherwise assist or 32 participate in,facilitate or encourage,any effort to make or enter into an Alternative Proposal. If any party 33 receives any inquiry, proposal, or offer for an Alternative Proposal,the party agrees to inform each other 34 party promptly of the terms thereof and the identity of the party making the inquiry,proposal,or offer. If a [Page 7 of 10] 1 party has already received any such inquiries,proposals or offers,the party agrees that after the execution 2 of this LOI, it will not pursue those inquiries, proposals or offers. Nothing in the foregoing will prohibit 3 the parties from developing separate transactions with Bernhard,nor will anything in this LOI obligate the 4 parties to develop or consummate said transactions simultaneously or contemporaneously. 5 6 11. Publicity.The parties agree to consult with each other prior to,and otherwise cooperate in the prep- 7 aration and issuance of,any statements or communication to the public or press regarding or relating to the 8 CSED. No party will issue any statement or publication without each other party's prior written consent, 9 unless required under applicable law or regulation.Each party will give adequate prior notice to each other 10 party of any such required statement or communication in order to provide time for consultation and coop- 11 eration.Notwithstanding the foregoing,the parties acknowledge and agree that the first public announce- 12 ment of the CSED is anticipated to be made in connection with a CPC event currently scheduled for No- 13 vember 2024, and the parties agree to consult with each other prior to, and otherwise cooperate in the 14 preparation and issuance of,the statements and communications to the public and press for such event. 15 16 12. Relationship of the Parties.The parties are independent contractors and will not be considered un- 17 der this LOI or otherwise as having employee,joint venture, or partner status, and no party nor its agents 18 and employees will be eligible to receive or participate in any benefit plans offered by either other party. 19 20 13. Governing Law.This LOI will be governed by and construed according to the laws of the State of 21 Arkansas without regard to the conflicts of law principles. 22 23 14. Dispute Resolution.All disputes,controversies,or claims("Disputes")arising out of or relating to 24 this LOI will in the first instance be the subject of a meeting between a representative of each party who 25 has decision making authority with respect to the matter in question. Should the meeting either not take 26 place or not result in a resolution of the Dispute within 20 business days after notice of the Dispute is given 27 to the parties,then (i)with respect to Disputes of fact,the parties will resolve such Dispute by arbitration 28 administered by the American Arbitration Association under its Commercial Arbitration Rules; or(ii)with 29 respect to non-fact Disputes,the parties will resolve such dispute,first,by mediation under terms and con- 30 ditions mutually agreeable to the applicable parties,and, second, if mediation does not take place or is not 31 successful, by applicable legal proceedings. The venue for all dispute resolution matters will be in Little 32 Rock,Pulaski County,Arkansas. 33 34 15. Entire Agreement.This LOI represents the entire agreement between the parties with respect to the 35 subject matter of the LOI and supersedes all prior agreements and understandings,oral or written,between [Page 8 of 10] 1 the parties with respect to the subject matter.This LOI may be amended and modified only by the written 2 agreement of each party. 3 4 16. Counterparts. The parties may execute this LOI in counterparts, each of which is an original, in- 5 eluding electronic or PDF copies,all of which together will constitute one and the same agreement. 6 7 [Signatures are on the following page 8 9 [Page 9 of 10] • 1 ACCEPTED AND AGREED as of the Effective Date: 2 3 4 BILL,HILLARY,AND CHELSEA BERNHARD ENERGY,LLC 5 CLINTON FOUNDATION 6 7 Signature: Signature: 8 Name: Name: 9 Title: Title: 10 11 CITY OF LITTLE ROCK,ARKANSAS 12 13 14 Signature: 15 Name: 16 Title: 17 18 19 20 [Signature page to Letter of Intent for CSED J [Page 10 of 10]