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23 of 1981 - A RESOLUTION OF INTENT TO ISSUE INDUSTRIAL REVENUE BONDS TO FINANCE A PROJECT UNDER THE UTAH INDUSTR 1 *M b AS TO FORM Self Lake Cify Affornoy's Office •• By .. RESOLUTION OF INTENT A RESOLUTION OF INTENT TO ISSUEINDUSTRIAL REVENUE BONDS TO FINANCE A PROJECT UNDER THE UTAH INDUSTRIAL FACILITIES DEVELOPMENT ACT AND AUTHORIZING THE EXECUTION OF A MEMORANDUM OF AGREEMENT BY AND BETWEEN SALT LAKE CITY AND A & K RAILROAD MATERIALS, INC. WHEREAS, A & K RAILROAD MATERIALS, INC., a Utah corporation (the "Company") wishes to acquire and construct certain real estate and buildings, improvements and equipment to be located thereon for use as an office and sales facility, and has requested Salt Lake City, Utah (the "Issuer") to issue its industrial revenue bonds to provide all or part of the cost of such facilities; WHEREAS, the Issuer is authorized and empowered by the provisions of Chapter 17, Title 11, Utah Code Annotated 1953, as amended, known as the "Utah Industrial Facilities Development Act", to issue revenue bonds to provide such facilities, and the Issuer deems it necessary and advisable that it take such action as may be required under applicable statutory provisions to authorize and issue such revenue bonds; and WHEREAS, a Memorandum of Agreement has been presented to the Issuer under the terms of which the Issuer agrees, subject to the provisions of such agreement, to issue its industrial revenue bonds to provide such facilities; NOW, THEREFORE, the City Council of Salt Lake City, Utah, hereby resolves as follows: 1. That the Mayor of the Issuer is hereby authorized to execute, and the Recorder of the Issuer is hereby authorized to attest and affix the seal of the Issuer to a Memorandum of Agreement with the Company in substantially the form of such agreement as was presented to this meeting or with such minor changes therein as shall be approved by the officers executing the same. 2. That the Council finds that the acquisition and equipping of the Project by the Company is consistent with and in furtherance of the development of Salt Lake City, Utah, and the promotion of the welfare of the citizens of the City and of the State of Utah. 3. That the officers and employees of the Issuer are hereby authorized to take such further action as is necessary to carry out the intent and purposes of the Memorandum of Agreement as executed and to issue its industrial revenue bonds in an amount not exceeding Ten Million Dollars ($10,000,000.00) or such other amount as may be authorized by statute upon the terms and conditions and for the purposes stated in said Memorandum of Agreement, which is hereby made a part of this resolution. 4. That it presently appears that the law firm of Ray, Quinney & Nebeker, Salt Lake City, Utah, will serve as Bond Counsel with respect to the Bonds, with the approval of th Issuer. The foregoing resolution, together with the attached Memorandum of Agreement, were passed and approved by the Council of Salt Lake City, Utah, on this 31st day of March, 1981. SALT LAKE CITY, UTAH ATTEST: ///�//� 60L/ klieY1A4" /�By ��4� f 4,Lit.s Recorder - Acting ^' yarX Chairman -2- MEMORANDUM OF AGREEMENT THIS MEMORANDUM OF AGREEMENT is by and between Salt Lake City, Utah (the "Issuer") and A & K Railroad Materials, Inc., a Utah corporation (the "Company"). 1. Preliminary Statement. Among the matters of mutual inducement which have resulted in this agreement are the following: (a) The Issuer is authorized and empowered by the provisions of the Utah Industrial Facilities Development Act (the "Act") to issue industrial revenue bonds for the purpose of financing, in whole or in part, the cost of any "Project" (as said term is defined in the Act). (b) The Company desires to obtain satisfactory assurance from the Issuer that the proceeds of the sale of the industrial revenue bonds of the Issuer may be made available to finance all or part of the costs of certain real estate, buildings, improvements and equipment for use as an office and sales facility all to be located in Salt Lake City, Utah and generally described in Exhibit "A" hereto (the "Project"). (c) Subject to due compliance with all requirements of law, the Issuer, by virtue of such statutory authority as may now or hereafter be conferred by the Act, and by the Internal Revenue Code of 1954, as amended, will issue and sell its revenue bonds in an amount not exceeding Ten Million Dollars ($10,000,000.00) or such other amount and during such period of time as may be authorized by statute hereafter. It is actually anticipated that the costs of the Project to be paid from industrial revenue bond proceeds will be approximately $850,000, and of the authority granted by state and federal statute, the Issuer hereby declares its intent to issue for the Project as presently planned, its industrial revenue bonds in an amount not to exceed Eight Hundred Fifty Thousand Dollars ($850,000.00) (the "Bonds"). 2. Undertakings on the Part of the Issuer. Subject to the conditions above stated, the Issuer agrees as follows: (a) That it will authorize the issuance and sale of the Bonds under a Bond Ordinance to be subsequently adopted for the Bonds pursuant to the terms of the Act as then in force, when and if it is requested to do so by the Company, and if the Company is then in compliance with the Issuers rules, regulations and ordinances. (b) That if it issues the Bonds, it will, if requested by the Company, enter into a Financing Agreement, containing such terms as are mutually agreeable to the parties, which will permit use of Bond proceeds for acquisition and construction of the Project, and provide for use of the Project by the Company, or by any affiliates of the Company as therein described. (c) That the aggregate payments under the Financing Agreement (i.e., the amounts to be paid by the Company in consideration of its use of the Project and the financing thereof by the Bonds) will be used to pay the principal, interest and premium, if any, on the Bonds, together with any fees and costs in connection therewith, including those of a trustee, if any. (d) That the Issuer will also participate with the Company in execution of a Trust Indenture, Mortgage, Trust Deed, Security Agreement or other documents, containing such terms as are mutually agreeable to the parties, as may be necessary for the purpose of providing a first lien on the Project and all property associated therewith for the benefit of bondholders. (e) That the obligations under the Bonds will represent limited obligations of the Issuer and will not constitute or give rise to a general obligation or liability of the Issuer of a charge against its general credit or taxing powers. The Bonds will be payable solely from the revenues of the Project, including payments of the Company pursuant to the Financing Agreement. (f) That this Memorandum of Agreement and the Resolution of which it is a part shall represent official action of the Issuer pursuant to I.R.S. Regulation § 1. 103-8(a) (5) (6) or other applicable law. 3. Undertakings on the Part of the Company. Subject to the conditions herein stated, the Company agrees as follows: (a) That, if it requests the Issuer to issue the Bonds, it will use all reasonable efforts to find a purchaser for the Bonds on a negotiated purchase basis, without the requirement of a public underwriting or official statements or other disclosures in connection therewith. If, however, official statements become necessary, in the opinion of Bond Counsel, such -.- • shall be prepared at the Company's expense, and in any event the Issuer shall have the right to approve the Purchaser and the underwriter, if any. (b) That if it requests the Issuer to issue the Bonds, then contemporaneously with the delivery of the Bonds, it will enter into a Financing Agreement, a Trust Indenture, a Mortgage, Trust Deed, Security Agreement or other instrument, all of a form acceptable to the parties, for the purpose of providing a first lien on the property for the benefit of the bondholders; the Company will also obligate itself pursuant to the Financing Agreement and a promissory note thereunder to pay to or for the account of the Issuer sums sufficient in the aggrgate to pay the principal of, interest, premium, if any, on the Bonds as and when the same shall become due and payable, together with any and all costs and fees associated therewith, including those incurred by any trustee which may be appointed to administer funds in connection with issuance of the Bonds. (c) That the Company proposes to locate the Project within the boundaries of the Issuer at a location designated in Exhibit "A", such location to be made definite prior to adoption of the Bond Ordinance. (d) That the Company will assume all responsibilities for negotiating construction contracts and supervising construction of the facilities on the real estate, including all equipment and appurtenances pertaining thereto. The construction will conform to all zoning and building codes and ordinances of the Issuer. (e) That the Company will pay to the Issuer a fee of Two Hundred and Fifty Dollars ($250.00) upon passage of the Resolution of which this Agreement is a part and the sum of $1,250.00 upon the issuance of the Bonds as full and complete payment of all financing, legal and accounting fees and expenses incurred by the Issuer in connection with the authorization, sale and issuance of the Bonds including review and execution of the Resolution, the Bond Ordinance and all subsequent proceedings. The costs of execution and filing of any instruments and the preparation of all other documents in connection with the authorization, sale and issue of the Bonds shall be paid for by the Company. It is contemplated that some of such expenses shall be paid from the proceeds from the sale of the Bonds. (f) That the Company will arrange for purchase of the Bonds only by Purchasers which have knowledge and experience -3- in financial and business matters and which are capable of evaluating the merits and risks of purchasing the Bonds; that the Purchasers will have knowledge of the business and properties of the Company; that the Purchasers will have access upon request to the same kind of information as might be used in various registration statements under the Securites Act of 1933, relative to the business of the Company to the extent that the Company possesses such information or can acquire it without unreasonable effort or expense; that the Purchasers will acknowledge that they are not relying on the representations of the Issuer with respect to the financial quality of the Bonds and the Purchasers will acknowledge that they rely solely on statements and representations of the Company and on their own knowledge and investigation of the facts and circumstances relating to the purchase of the Bonds; and that the contents of this subsection will substantially be included in one or more agreements between the Company, the Issuer and/or any Purchasers of the Bonds. 4. General Provisions. (a) All agreements of the Issuer under Paragraph 2 hereof and of the Company under Paragraph 3 hereof are subject to the conditions that within one year from the date hereof (or such other later date as shall be mutually satisfactory to the Issuer and the Company), the Issuer and the Company shall have agreed to mutually acceptable terms and conditions of the Financing Agreement, Trust Indenture, Mortgage, Trust Deed, Security Agreement, or other similar documents referred to, and all other instruments or proceedings relating to the Bonds. (b) If the events set forth in (a) of this paragraph do not take place within the time set forth or any extension thereof, and the Bonds in an amount of approximately the amount stated above are not sold within such time, the Company agrees that it will reimburse the Issuer for all reasonable and necessary direct out-of-pocket expenses which the Issuer may have incurred at the Company's request and arising from the execution of this agreement and the performance by the Issuer of its obligations hereunder, and this agreement shall thereupon terminate. (c) If the Bonds are issued as contemplated by this agreement, the Company will not expect the Issuer to assume any substantial obligation with regard to administering the proceeds of the Bonds or the construction of the Project, and will arrange for the bond purchaser and First Security Bank of Utah, N.A., as trustee to handle all such financial administration, and will -4- handle construction supervision either in its own name or through an affiliated company. The Company will also hold harmless the Issuer from any costs or expenses in connection with the execution of this agreement, the issuance of the Bonds or the administration of the proceeds thereof, or the construction or use of the Project. (d) The Bonds, if issued, shall not constitute, nor give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers. IN WITNESS WHEREOF, the parties hereto have entered into this agreement by their officers thereunto duly authorized as of this 31st day of March, 1981. SALT LAKE CITY, UTAH ATTEST: Recorder - Acting s Mayor A & K RAILROAD MATERIALS, INC. BY \C(.Zm 0.0-4,n(51": Its f,A)b.,r The foregoing resolution, together with the Memorandum of Agreement, were passed and approved by the Council of Salt Lake City, Utah, on this 31st day of March , 1981 . SALT LAKE CITY, UTAH �I-ATTEST: ` a ti//t!/rtr� K 6/144 BY f 1 L 4//i e v1 ecorder Acting I• aAVM Chairman -5- Resolution No. By City Council xx Resolution of Intent to issue Industrial Revenue Bonds and authorizing the execution of a Memorandum of Agree- ment with A &K Railroad Materials, Inc.