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HomeMy WebLinkAbout1985-01-14 85-78 ORDER85-]8 Introduced by Councilor Gass, January 14, 1985 CITY OF BANGOR (TRIS) (Prbfr Auth zing BxeG tion of Inducement Agreement And. Application to Finance Authority of Maine for Revenue Obligation Securities - Superior Paper Products, Inc. By Us COY caused oftu COW of Banlpr: ORDERED, THAT the City Manager is hereby authorized, on behalf of the City of Bangor, to execute and.deliver an Inducement Agreement, copy of which is attached hereto and on file in the office of the City Clerk, between the City of Bangor and Superior Paper Products, Inc., which Agreement provides for the issuance by the City of up to Six Hundred Fifty Thousand Dollars ($650,000) of Revenue Obligation Securities for the purpose of paying a portion of the costs of acquiring, constructing and equipping the R. B. Dunning building, so-called, located at 130 Rice Street, Bangor, Maine,said building to be used as a wholesale distribution center. and be it further ORDERED THAT the Bangor City Council hereby evidences its present intent to issue the City's Revenue Obligation Securities in an amount not to exceed $650,000, upon the conditions set forth in the Inducement Agreement and subject to the approval of the Finance Authority of Maine, and further authorizes the City Manager to prepare and to submit to the Finance Authority of Maine, on behalf of the City of Bangor, a municipal application seeking approval for the issuance of such Revenue Obligation Securities, and to take such other steps as he may deem necessary or appropriate in order to obtain a Certificate of Approval from the Finance' Authority of Maine pursuant to 10 M.R.S.A. g 1063. IN CM COUNCIL January 14, 1985 P ed CITY 85-18 ORDER Title, A�tltoxizi:.g 0[ecution of I�Wvicemant - Agxearent and Application to Finance ....................................... Authority of [Nine for Revenue @ligation Securities Supe No Products, Inc. rn anal ea by uncilmen 85-]8 INDUCEMENT AGREEMENT THIS AGREEMENT between the CITY OF BANGOR, MAINE (hereinafter called the "City") and SUPERIOR PAPER PRODUCTS, INC., a Maine corporation, or nominee (hereinafter collectively called the "Applicant") - 1. Preliminary Statement. Among the matters of mutual inducement which have been previously discussed by the parties and have resulted in the execution of this Agreement are the following: (a) The City is authorized under the provision of Chapter 110 of Title 10 of the Maine Revised Statutes, as amended, the Finance Authority of Maine Act (the "Act"), to issue revenue obligation securities of the City to finance the acquisition, construction, reconstruction, renewal and replacement of eligible projects within the City (subject to the approval of the Finance Authority of Maine) and to enter into agreements with private persons to provide forpaymentswhich will be sufficient to pay the prin- cipal of,.and interest on, such securities as the same become due and payable, all for the purpose of providing enlarged Opportunities for gain- ful employment by the people, and to insure the betterment of the econo- my of the State and the living standards and health of its inhabitants. (b) The Applicant desires to acquire, construct and equip the .R. B. Dunning building, so-called, located at 120 Rice Street, Bangor, Maine, said building to be used as a wholesale distribution center, provided that certain. financial arrangements can be made, and the City desires to have such Project undertaken. (c) Subject to execution of this Agreement by the Applicant and the execution by the Applicant of financing documents as contemplated by Section 3(b) hereof, the City is willing to take such steps as are nec- essary to provide revenue bond financing for the cost of such -z - construction and other expenses related thereto, all of which will have an estimated cost of up to $650,000 and are herein sometimes called the "Project". - (d) The Applicant and the City anticipate that the Project will help to preserve and to further the economic well being of the City and to insure preservation and betterment of the living standards and health of the inhabitants of the City. (a) The City is desirous of the Applicant's undertaking the Project, and the City- wishes to induce such undertaking and to assist the Applicant therein by providing revenue bond financing for the Project to the extent contemplated by this Agreement. (f)' The Applicant wishes to obtain the assurances contained in this Agreement before proceeding further with substantial expenditures for the. Project. (g) The City wishes to indicate its approval of the Project andits present intent to issue its Revenue Obligation Securities to pay the cost' of the Project, and to take its initial official action with respect thereto. 2. Undertakings of the Part of the City. Subject to the conditions herein stated, the City agrees as follows: (a) That, subject to the prior approval of the Finance Authority of. Maine and subject to adoption of a formal bond resolution by the City Council, after notice and hearing, it will take the necessary steps to au- thorize the issuance and sale of an issue of its revenue obligation secu- rities, pursuant to the terms of the Act, in an aggregate amount not ex- ceeding $650,600 for the purpose of financing the Project. (b) That it will, at the proper time and subject in all respects to the prior advice of counsel for the City, cause a public hearing, after notice, to be held for the purpose of adopting such proceedings, and au- thorize the execution of such documents as may be necessary and &M advisable for the authorization, issuance, and sale of such securities for the acquisition and construction M the Project, as aforesaid, and for temporary notes in anticipation of the issuance of such securities, all as shall be authorized by law and mutually satisfactory to the City and the Applicant. (a) That the aggregate basic payments (i.e., the payments to be used to pay the principal, interest and premium, if any, on such secu- rities) payable: to the City by the Applicantshall be such sums as shall be sufficient to pay the principal of, .and interest on, and redemption _.premium, if any, of such securities as and when the same shall become due and payable. (d) That it will take or cause to be taken such other acts and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may deem appropriate in pursuance there- of. 3. Undertakings on the Part of the Applicant. Subject to the conditions stated above, the Applicant agrees as follows: (a) To proceed with the Project and use best efforts to cause it to be completed, subject to the availability of proceeds from the issuance of said securities. (b) To contemporaneously with the delivery of such securities, enter into appropriate financing documents with the City under the terms of which the Applicant will be obligated to pay to the City .payments sufficient in the aggregate to pay the principal of and interest on and redemption premium, if any, on such securities as andwhenthe same shall become due and payable, such financing documents to contain provisions required by law, and such other provisions as shall be mutually acceptable to the City and the Applicant. -4- (c) To take such further action and adopt such further proceedings as may be required to implement the aforesaid undertakings or as it may be appropriate in pursuance thereof. (d) To indicate to the City the number and types of employment opportunities, both construction and permanent, which it is expected would be created through the Project. (e) To release the City from and indemnify and hold it harmless from any and all. losses, claims, damages, liabilities, or expenses whatsoever, whether based on a tort, contractual, or other claim of any nature whatsoever including, but not limited to, any loss or damage to Property or injury to or deathof any persons, that arise out of the acquisition, construction, or operation of the Project or the failure of the Applicant to perform any obligations relating to the Project. The Applicant further agrees to pay promptly upon receipt of an invoice, bill, or other evidence of any expense incurred, all reasonable and neceseary out-of-pocket expenses, including attorney's fees, which the City may have incurred arising from the execution of this Agreement and the performance by the City of its obligations hereunder, and whath- er or not the said securities are issued. In addition, the Applicant shall keep in force Comprehensive General Liability Insurance in amounts reasonably satisfactory to the City. In case any action shall is brought against the City as a result of or concerning the Project, the Applicant shall promptly assume the defense thereof, including the employment of counsel, and payment of all expenses; and the City shall have the right to employ separate counsel in any such action and to participate in the defense thereof, including the right to negotiate and consent to a settlement. The Applicant acknowledges that the issuance of such securities for the Project shall not directly or indirectly obligate the City to levy or to -5 - pledge any form of taxation whatsoever therefor, or to make any ap- propriation for their payment, and shall not constitute any debt or liabil- ity of the City, or a pledge of the faith and credit of the City, but shall be payable solely from revenues of the Project. The failure of the City to insist upon strict performance of any of the obligations of the Applicant throughout and pursuant to the Project shall not be taken as a waiver of the right to insist upon strict perfor- mance by the Applicant or the right to exercise any remedy on account a any further breach thereof. This paragraph 3(e) shall survive the payment in full of such secu- rities and the termination of any and.. all documents including any lease or sale agreement, related to the Project. This paragraph 3(e) shall inure to the benefit of and be binding up- on the City and the Applicant and their respective successors and as- signs. 4. General Provisions. (a) All commitments of the City under Paragraph 2 hereof and of the Applicant under Paragraph 3 hereof are subject to the conditions that on or before twelve months from the date hereof (or such other date as shall be mutually satisfactory to the City and the Applicant), the City and the Applicant shall have agreed to mutually acceptable terms for such securities and for the sale and delivery thereof, and mutually acceptable terms and conditions of the financing documents referred to in Paragraph 3 and the proceedings referred to in Paragraphs 2 and 3 hereof. In the event that such securities are not sold this Agreement shall thereupon terminate, subject to Paragraph 3(e) above. (b) At the 'request of the Applicant, the City hereby agrees that Messrs. Bernstein, Shur, Sawyer and Nelson of Portland, Maine shall be independent bond counsel to supervise proceedings and to approve the Qa legality of the issue of such securities, compensation of such bond coun- sel to be paid or provided for by the Applicant. (c) The City will, to the extent necessary and at the request of the Applicant, and at the Applicant's expense, become a co -applicant with the Applicant for any necessary licenses from the Maine Board of Environmental Protection. (d) The Applicant's rights under this Agreement may be assigned in whole or in part to a nominee. .. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the day of January, 1985. WITNESS: CITY OF BANGOR, MAINE 3057.035 By: Its City Manager SUPERIOR PAPER PRODUCTS, INC. By: Its President