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HomeMy WebLinkAboutR87-273!'. 092 RESOLUTION NO. R87-273 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PLAINVIEW, TEXAS AUTHORIZING THE MAYOR TO EXECUTE A CONTRACT WITH EMCO FOR THE DISTRIBUTION OF TEXAS ECONOMIC DEVELOPMENT PROGRAM CONTRACT FUNDS AS DESCRIBED IN TEDPC CONTRACT NO. 7604572. WHEREAS, the City of Plainview is a recipient of Texas Economic Development Program Funds as described in Contract No. 7604572; and WHEREAS, EMCO is to receive a low interest loan from these funds; and WHEREAS, as a requirement of receipt of the funds the two parties involved, the City of Plainview and EMCO, must execute a Contract specifying the terms of the loan; and WHEREAS, a copy of said agreement is attached and hereby made a permanent part of this Resolution; and WHEREAS, on May 12, 1987, through the adoption of Resolution No. R87-246, the Mayor was authorized to execute a similar Contract; and WHEREAS, since that date amendments have been made to said Contract. NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Plainview, Texas that the Mayor is hereby authorized to execute a Contract between the City of Plainview and EMCO concerning the distribution of Texas Economic Development Program Funds as described in Contract No. 7064572 and the repayment of such. BE IT FURTHER RESOLVED that Resolution No. R87-246 is hereby repealed. I, Sheryl Owen, City Secretary for the City of Plainview, hereby certify that the above Resolution was adopted by the Plainview City Council at a Work Session held on July 23, 1987. ATTEST: ~H~.R~/LfOWEN% - ~fty Secretary STATE OF TEXAS COUNTY OF HALE LOAN AGREEMENT This agreement dated the __ day of July, 1987, by and between the City of Plainview, hereinafter called "City", and the EMCO Industries, Inc. hereinafter called "Firm"; WHEREAS, the City desires to expand its economic base with a primary emphasis on creating and retaining permanent jobs; WHEREAS~ the City is under a contractual agreement with the Texas Department of Community Affairs, hereinafter referred to as "TDCA", an agency of the State of Texas, to implement an Economic Development Program that will primarily benefit low and moderate income persons and positively impact the City's economic base; WHEREAS, the City, pursuant to an agreement with TDCA, has certain designated funds to lend to qualified businesses interested in maintaining and expanding the economic bases of such businesses; WHEREAS, the Firm is interested in maintaining and expanding its economic base in the City of Plainview and desires to borrow funds from 'the City to maintain and expand its economic base; WHEREAS, the City is willing to make a loan to the Firm on the terms and conditions hereinafter set forth; NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows: l. The City hereby agrees to lend to the Firm, and the Firm hereby agrees to borrow from the City and repay the City or its Assigns, the amount of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00), (hereinafter called the "Loan"). The obligation of the Firm to repay the Loan shall be evidenced by a promissory note of the Firm in a form satisfactory to the City dated the date on which the Loan is made, payable 'to the order of the City for the amount of the Loan with interest on the unpaid principal in the amount of three i3%1 percent per annum, unless the Firm elects to exercise its option set out below to repay the Loan in twenty (20) years at _five (5%) percent per annum. Should the Firm exercise its option to repay the loan in twenty (20) years at five (.5%) percent per annum interest, such twenty year term shall begin on the date on which the original loan was made. Furthermore, interest at the rate of five (5%) percent per annum shall be calculated from such date and added to 'the remaining balance upon the original note. Firm shall receive credit for all interest paid from the date of the original note through the date of Firm's election to change to suc~ twenty {20~ year Lets. 2, The term of such Loan sha].l be ten ~ t0) years. The note shall be repayable in ten (].0) equal annual installments. The first annual installment shall be due and payable elgh'teea (18) months after execution of this agreement or twelve ( 12 ) ' months af her all loan ~roceeds have been disbursed, whichever occurs first. AI'[ payments will be made promptly to the City of Plainview at the address designated below. The Firm shall have the option at any Lime, to elect to repay tile Loan in twenty (20) years in twenty (20) equal annual installments of principal and interest each. Such twenty (20) year term shall bear interest on 'the unpaid principal in the amount of five (5%) percent per annum. 3. The purpose of the Lean will be for' the expansion of the Firm's existing manufacturing concern. The Firm agrees that it will apply the funds received by it under this agreement in accordance with the use of lean proceeds as specified in this agreement. 4. The City shall provide information and guidance to the Firm on all Texas Community Development Program related compliance, record keeping, and reporting requirements. 5. The City shall be granted a second lien se.curity interest in all machinery and equipment purchased with the funds provided to the Firm by the City. 6. Tile City shall disburse to the Firm all loan proceeds within a reasonable time. Such funds shall be disbursed to Lhe Firm pursuant to a draw down schedule provided the City by the Firm. The Firm shall present all related documentation, including receipts, purchase orders, etc. to the City with any requests for a cash draw-down. 7. The Firm shall: a. Invest a minimum of TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS ($250,000.00) of its own funds from sources other than the sums loaned by the City under this agre~nent for use in the expangion of its existing manufacturing concern. The Firm shall provide the City with documentation of such investment and source of such investment prior to the disbursement of any loan proceeds hereunder. The Firm shall purchase two (2) container paint booths, one (1) truck paint booth, a chemical cleaning system, one (1) drying oven, one (1) drying booth, one (1) crane, conveyor e~uipment and associated equipment at a cost of at least TWO HUNDRED FIFTY THOUSAND AND NO/100 DOLLARS (S250,000.00). b. Hire four (4) additional employees for the following positions, to wit: TITLE/POSITION CLASSIFICATION 1. Welder Semi-Skilled 2. Painter Semi-Skilled 3. Machine ~perator Semi-Skilled 4. Machine Maintenance Helper Semi-Skilled c. Make every effort to target available job positions towards low to moderate income persons. This shall be done by utilizing the following hiring procedures, which such procedures the Firm agrees he) utilize: 1. Targeting jobs to the unemployed-via screening of the employment applica- tions as well as mnterviewing the clients referred to the Firm by the Texas Employment Commission's local office. 2. Targeting jobs to the unskilled through exploring the availability and use of local job training partnership act funds for private-sector job train- ing activities, 3. Following non-discrimination and equal employment opportunities provi- sions of State and Federal Laws. d. Make every reasonable effort to retain fifty szx (56) employees as a result of this Loan. Should employment ever drop below said fifty six (56) employees, Firm shall provide City with written documentation as to the cause and anticipated length of time 'that such employment shall remain below fifty six (56) employees. e. Reimburse the City the sum of EIGHT THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($8,500.00) for cost of administrative services provided the Firm by the City. f. Pay the City's cost associated with the required program fiscal and compliance audits. This cost shall not exceed ONE THOUSAND FIVE HUNDRED AND NO/100 DOLLARS ($1,500.00). g. Execute this Loan Agreement and Note in a form satisfactory to 'the City. h. Execute and deliver to the City a second lien security interest on the machinery and equipment purchased with the su~s advanced by the City. i. Punctually pay the principal and interest on the Note according to its terms and conditions. Each annual installment delinquent for ten (10) days or more shall incur a delinquency charge of five (5%) percent of such installment. j. At all times to maintain the property provided as security for this Loan in such condition and repair that the City's security will be adequately protected. The Firm also agrees to maintain during the term of the Loan adequate hazard insurance policies covering fire and exvended coverage and such other hazards as may be deemed appropriate in amounts and form sufficient to prevent the Firm from becoming a co-insurer unless approved by the City and issued by a company satisfactory to the City with an acceptable loss payee clauses in favor of the City. k. Pay and discharge all taxes, assessments, and governmental charges upon it or against any of its properties prior to the date on which the penal, ties attach thereto unless bona fide disputes exist as to the existence or amount thereof. 1. Maintain its corporate existence. m. Neither create nor suffer %o e~ist any mortgage , DJ. edge, Iien, c~arge ~ or encumbrance on the machines and. equipment, the subject of this agreement, other than specified in this Agreement. n. Not sell, conv~y, or suffer to be conveyed, lease, assign, or transfer, or otherwzse dispose of the machines and equipment that are referenced in this agreement, except in the case whereby F~rm has reduced the amonnt of the Loan by an amount su f L'J. cien t to cover the costs of the original purchase price of 'the machinery and/or equipment desired to be sold, conveyed, assigned or other- wise disposed of by the Firm. o. Indemnify and save the City or its Assigns harmless against any and all liability to, or resulting from, any delay in discharging any obligation of the Firm to 'the City. p. Give written notice to the City of any event, within fifteen (15) days of the event, which constitutes an event of default under this Loan Agreement. Such event of default shall be as follows: 1. Failure to make payment when due of any installment of principal or accrued interest on the Note, if such default should remain unremedied for thirty (30) days. 2. Failure of the Firm to create four (4) jobs, retain fifty six (56) jobs or maintain its business existence in the City of Plainview, open and operating, for the full term of this agreement except as permitted elsewhere in this agreement. 3. Any material misrepresentation made in conjunction with the execution and delivery of this Loan Agreement. 4. The Firm'shall default in 'the performance of any other term, covenant or agreement contained in this Loan Agreement, and such default shall continue unremedied for thirty (30) days after either: (i) it becomes known to an executive officer of the Firm; or (ii) w~itten notice thereof shall have been given to the Firm by 'the City. 5. If Firm shall become insolvent or cease to pay its debts as they mature or shall voluntarily file a petition seeking reorganization of, or the appointment of a receiver, trustee, or liquidation for it or a substantial portion of its assets or to effect a plan or other arrangement with creditors or shall adjudicated bankrupt or make a voluntary assignment for the benefit of creditors. 6. An involuntary petition shall be filed against the Firm under any bankruptcy, insolvency or similar law, and such is not dismissed within ninety (90) days after filing of same. 7. Any final judgment for the payment of any money is not fully covered by liabili ty insurance and is mn excess of TEN THOUSAND AND NO/100 DOLLARS ($10,000.00) shall be rendered against the Firm, and not compromised or settled within s~_x (6) months of date of such final judgmen%. In an event of default set forth above, the entire unpaid principal of the Note, and the interest then accrued thereon at a rate of three (3%) percent per annum, shall become and be immediately due and payable upon the written demand of the City or its Assigns, without any other notice of demand or any kind of any presentment or protest. This remedy shall be in addition to any other remedies at law or otherwise, that the City may have. 8. If at any time the Firm defaults on any provision of -'-this Loan Agreement, to pay the City or its Assigns, in addition to any other amounts that may be due from the Firm, an amount equal to the reasonable cost and expenses of collection, enforcement, correction or waiver of the default incurred by the City or its Assigns mn such collection, enforcement, correction or waiver of default. 9. No failure or delay on the part of the City in exercising any rights, power, or remedy hereunder shall operate as a waiver thereof nor shall any single or partial exercise of any such right, power or remedy preclude any other further exercise thereof or the exercise of any other right, power, or remedy hereunder. No modification or waiver of any provision of this Loan Agreement or of the Note, nor any consent to any departure by the Firm therefrom, shall in any event be effective unless the same shall be in writing and that such waiver or consent shall be effective only in this specific instance and for the specific ourpose for which it is given. No notice to or demand on the Firm in any case shall entitle the Firm to any other or further notice or demand in similar or other circumstances. 10. The Firm or its Assigns or the City or its Assigns, hereby expressly reserve all rights to amend any provisions of this Agreement, to consent to or waive departure from the provisions of the Note, and to release or otherwise deal with any collateral security for payment of the Note provided, however, that all amendments be in writing and executed by the City or its Assigns and the Firm. 11. Ail notices, consents, requests, demands and other communications hereunder shall be in writing and shall be deemed 'to have been duly given to a party hereto if mailed by certified mail, prepaid, to the City at its address set forth below and to the Firm at the address set forth below or at such other addresses as any party may have designated in writing to any other party hereto. 12. This Loan Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. 13. This Loan Agreement, the Note, and security interest shall be deemed contracts made under the laws of the State of Texas and for all purposes shall be construed in accordance with the laws of said state and also any governing federal law. IN WITNESS WHEREOF, the parties hereto have each caused this Loan Agreement to be duly executed as of the date and year first above written. FIRM: EMCO INDUSTRIES, INC. CITY: 'CITY OF PLAINVIEW By: By: Michael Mc Graw, President, E. ¥. gidlehuber, EMCO Industries, Inc. Mayor A'ttest: Attest: Secretary Sheryl Owen, City Clerk ADDRESS: ADDRESS: P. O. Box ]210 P. O. Box 1870 Plainview, Texas 79072 Plainview, Texas 79G72