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HomeMy WebLinkAboutAuthorizing the execution of an agreement with South Bend Forge, Inc.RESOLUTION NO. 754 -80 Passed by the Common Council of the City of South Bend, February 11, Yq 80 City Clerk k/ �/ ` President o Common Council Attest: - f Presented by me to the Mayor of the City of South Bend, Approved and signed by me February 12. rg 80 City Clerk RESOLUTION NO. 21�7- Rd A RESOLUTION AUTHORIZING THE EXECUTION OF AN AGREEMENT WITH SOUTH BEND FORGE, INC., RELATING TO THE ACQUISI- TION, CONSTRUCTION AND INSTALLATION OF ADDITIONAL ECONOMIC DEVELOPMENT FACILITIES TO BE USED AS A HOT FORGING PRESS FACILITY WITHIN THE BOUNDARIES OF THE CITY OF SOUTH BEND,.INDIANA WHEREAS, the City of South Bend, Indiana (the "Issuer "), by virtue of the laws of the State of Indiana, including the Municipal Economic Development Act of 1965, as amended, Indiana Code of 7.971, Title 18, Article 6, Chapter 4.5 (the "Act "), is authorized and empowered, among other things, (a) to provide funds to pay costs of additional economic development facilities within the boundaries of the Issuer (the "Facility "), to be owned and used by South Bend Forge, Inc. (the "Company "), (b) to issue additional economic development revenue bonds for the purpose of paying the costs of such additional acquisition, construction and financing, (c) to secure such additional economic development revenue bonds by an indenture, including the pledge and assianment of revenues derived from such additional economic development facilities to the payment of said revenue bonds and the assignment of a mortgage on such facilities for the benefit of the bondholders, and (d) to enter into the loan agreement hereinafter mentioned; and WHEREAS, the Common Council of the Issuer previously has authorized and issued its economic development revenue bonds in the aggregate principal amount of $6,000,000 for the purpose of financing a hot forqing press facility owned and operated by the Company; and WHEREAS, the Company desires to expand the facility and to finance such expansion with additional economic development revenue bonds of the Issuer; and WHEREAS, it is the desire of the members of the the Common Council of the Issuer that the additional jobs and employment opportunities resulting from the Facility be provided at the earliest possible moment and that the economic improvement produced by the operation of the Facility within the Issuer occur at the earliest possible time; and WHEREAS, under the provisions of the Pct it will be necessary for the South Vend Economic Development Commis- sion (the "Commission ") and the Common Council of the Issuer to undertake certain proceedings and adopt certain legislation prior to the issuance of any additional economic development revenue bonds to provide funds for the additional acquisition, construction and installation of such Facility and prior to the execution of any loan agreement therefor; and WHEREAS, this Common Council desires to initiate certain formal steps necessary to secure the commitment of the Company to acquire and use the Facility and to Provide for other matters incidental thereto;. NOW, THEF.EFORE, BE IT RESOLVED by the Common Council of the City of South Rend, Indiana, that: SECTION 1. It does hereby approve a finding and determination by the Commission that: a. The real and personal property to be included in the Facility will be an "economic development facility" within the meaning of those terms in the Act. b. That the utilization of such real and personal property in the creation and location of the Facility would be economically sound and will benefit the health, prosperity, economic stability and general welfare of the Issuer and that because of existing insufficient employment opportunities and insufficient diversification of industry within the Issuer, the economic welfare of the Issuer woul(? be benefitted by the acquisition and use of the Facility by the Company. SECTION 2. In order to overcome insufficient employment opportunities and insufficient diversifications of industry which the Common Council of the Issuer has heretofore found to exist in the Issuer, this Common Council determines to commence negotiations with the Company concerning the terms of a supplemental loan agreement and desires to initiate certain formal steps to secure the commitment of the Company to acquire and use the Facility and to provide for other matters incidental thereto. SECTION 3. Upon the approval and execution by the Commission of an Agreement containing substanially the same terms and conditions as Exhibit ?. attached hereto, the Mayor is authorized and directed to execute such Aqreement in the form attached hereto as Exhibit n and such Agreement as attached hereto is hereby in all respects approved. SECTION A. This resolution shall be in full force and effect from and after its passage by the Common Council, signed by the President of the Common Council and approved by the "layor. President, Common Council Adopted by the Common Council on the day of February, 1980, and approved by the Mayor on the day of February, 1980. BLEB �i� �1 - ,i' S Ei�� SCE PRESENTED. F ER 6 City Clerk NOT APPROVED 1e Gammon ADOPTED /� 11 C n, SDUW BEND, IND. A G !2 1, I; N1 E N T THIS AGREEMENT, entered into as of the day of February, 1980, between the City of South Eer_d, Indiana in the County of St. Joseph, a municipality and political subdivision of the State of Indiana, organized and existing under the Constitution and laws of the State of Indiana (the "Issuer "), acting pursuant to a resolution of the South Bend Economic Development Commission (the "Commission ") a depart- ment of development duly established by ordinance of the Common Council of the City of South Bend, Indiana, pursuant to the Municipal Economic Development Z\ct of 1965, as amended, Indiana Code of 1971, Title 18, Prticle 6, Chapter 4.5 (the "Act "), acting pursuant to a resolution of the Issuer's Common Council and South Bend Forge, Inc., a corporation for profit organized under the laws of the State of Indiana (the "Company "), for the purpose of assisting in the reduction of insufficient employment opportunities and insufficient diversification of industry, thereby improving the economic welfare of the City of South Pend, Indiana; WHEREAS, the Company has heretofore constructed a hot forging press facility within the boundaries of the Issuer with the proceeds derived from the sale of the Issuer of $6,000,000 City of South Bend, Indiana Fconomic Development First Mortgage Revenue Bonds (South Bend Forae, Inc. Project) (ABS Industries, Inc. - Guarantor), dated as of July 1, 1979; and WHEREAS, the Company desires to acquire, construct and install certain additional property (herein called the "Facility ") constituting an Economic Development Facility, as those terms are defined in the Pct within the boundaries of the City of South Bend; and WHEREAS, the Company has evidenced a desire to finance such additional acquisition, construction anO installation from the proceeds of additional Economic Development Revenue Bonds (the "Series 1980 Bonds ") issued pursuant to the authority of the F..ct; and WHEREAS, such additional acquisition, construction and installation will provide additional employment and job opportunities within the Issuer together with diversification of industry and improve the economic welfare in the area of the Issuer and its people; and WHEREAS, it will be necessary under the provisions of the Act for the Common Council of the Issuer to conduct certain proceedings and adopt certain legislation prior to the issuance of the Series 1980 Bonds; and WHEREAS, it is the desire of the Issuer_ that the increased. number of jobs and employment opportunity and diversification of industry resulting from the Facility be provided at the earliest date possible and that the benefit to the economic welfare in the area of the Issuer produced by such additional acquisition, construction and installation occur at the earliest possible time; W I T N E S S E T H: 1. The Company shall immediately commence the acquisi- tion, construction and installation of the Facility, which will improve the economic welfare of the Issuer and State of Indiana, as well as provide additional jobs and employment opportunities and diversification of industry and the Company will provide, or cause to be provided, at its own expense, the necessary interim financing to permit such additional acquisition, construction and installation to commence immediately. Upon the issuance of the Series 1980 Bonds, the Issuer will enter into an acreement (the "Financing Agreement ").with respect to the Facility and the financing therefor with the Company. The Financing Agreement shall be in the form of a supplemental loan agreement whereby the Issuer will make a loan to provide funds to finance such additional acquisition, construction and installation. The Financing Agreement shall contain such terms and conditions as provided or permitted under the Act and desired by the purchasers of the Series 1980 Bonds; provided, however, that the Financing Agreement shall require payments sufficient to pay the principal of and premium, if any, and interest on the Series 1980 Bonds. In order to secure the payment of the principal of and premium, if anv, and interest on the Series 1980 Bonds, the parties hereto agree that the Facility will be subject to a mortgage in favor of the holders of the Series 1980 Bonds with such terms and conditions as may be provided or permitted under. the Act. Upon request of the purchasers of the Series 1980 Ponds, TBS Industries, Inc., the parent of the Company, shall give the holders of the Series 1980 Bands a guaranty of the full and prompt payment of the principal of and premium, if anv, and interest on the Series 1980 Bonds. The Issuer shall not have any financial responsibility with respect to the Series 1980 Bonds or the Facility except from the revenues and receipts derived by the Issuer with respect to the Series 1980 Fonds, the Financing Agreement and the Facility. -he parties hereto understand and agree that the Company will utilize the Facility to further the purposes of the Act. 2. Upon receipt of a request from the Company, the Issuer will promptly issue the Series 1980 Bonds, in an amount not exceeding Three Million Dollars ($3,000,000) and maturing at such times, bearing interest at such rate or rates, payable on such dates and containing such optional and mandatory redemption features and prices as are requested by the Company and the purchasers of the Series 1980 Bonds, and will deliver the Series 1980 Bonds to the purchasers thereof and cooperate to its fullest extent in consummating the transaction. 3. That, subject to the requirements and provisions of the Act, the Common Council of the Issuer will adopt the legislation necessary to authorize the issuance of the Series 1980 Bonds, and the execution of such Financing Agreement on behalf of the Issuer. 4. In order to induce the Issuer to execute and deliver this Agreement and ultimately to issue the Series 1980 Bonds, the Company hereby agrees to defend, indemnify and hold the Issuer and anv and all officials thereof harmless against any and all loss, cost, expense, claims or actions arising out of or connected with the extension of this r Agreement and the preparation of the proceedings for, and the issuance, sale or delivery of, the Series 1980 Bonds. IN WITNESS WHEREOF, the Issuer, pursuant to a resolution adopted on February , 1980, has caused this Agreement to be executed by the Mayor, and the Company has caused this Agreement to be executed by a Vice President as of the day and year .first above written. Attest: City Cler South Rend Forae, Inc. By title CITY OF SOUTH BEND, INDIANA By Mayor