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Home My WebLink About800410.tiff RESOLUTION RE: ACCEPT WITHDRAWAL OF APPLICATION OF AGRI-FLEX FOR INDUSTRIAL REVENUE BONDS. WHEREAS, the Board of County Commissioners of Weld County, Colorado, pursuant to Colorado statute and the Weld County Home Rule Charter, is vested with the authority of administering the affairs of Weld County, Colorado, and WHEREAS, Agri-Flex has requested that it be allowed to with- draw its application for Industrial Revenue Bonds, and WHEREAS, Agri-Flex has further requested that the application fee and all materials submitted be returned, and WHEREAS, the Board of County Commissioners deems it advisable to accept the withdrawal of the application of Agri-Flex. However, the application fee cannot be returned nor can the materials submitted be returned as they are a part of the County' s records. NOW, THEREFORE, BE IT RESOLVED by the Board of County Com- missioners of Weld County, Colorado that the withdrawal of the application of Agri-Flex for Industrial Revenue Bonds be, and hereby is, accepted. BE IT FURTHER RESOLVED by the Board that the application fee shall not be returned nor shall be materials submitted in regard to said application be returned. The above and foregoing Resolution was, on motion duly made and seconded, adopted by the following vote on the 9th day of January, A.D. , 1980.. BOARD OF COUNTY COMMISSIONERS ATTEST:`--x, -7Y WELD COUNTY, COLORADO Weld Countylerk and Recorder (, //,�� 11/ (Aye) and Clerk to the 874 C. W. Kirby, ,Chairman 'By: • ,2n i b€t /( 'l' ' i c� ,, e lkrt. (Aye) Deputy County C erk eonard L. Roe ,�, AI ROV D AS TO FORM: £jL4►--_ (Aye) N ] l Norman Carlson V 0 County Attorney (Aye) Lyd Dunbar (ABSENT) -June K. Steinmark original resolution lost 800410 DATE PRESENTED: JANUARY 16 , 1980 J. ROLLIN MILLER LAWYER ONE PARK CENTRAL -SUITE 690 1 1515 ARAPAHOE STREET PHONE (3031 629-0043 DENVER, COLORADO 80202 December 31 , 1979 Don Warden, Director of Finance P.O. Box 758 Greeley, Colorado 80632 In Re : Withdrawal of Agri-Flex Application for Industrial Revenue Bond Dear Mr. Warden: Agri-Flex has reached its decision that it should not own its own building and land at this time . This decision obviates the Industrial Revenue Bond method of financing. There- fore, Agri-Flex respectively requests that its tenative application be withdrawn from consideration. It is further requested that all material heretofore submitted and all copies of said material be returned to this office, and that no further information contained in said appli- cation be released to third parties . Please also advise us as to whether the application fee submitted is in any part refundable. We sincerely thank you for your consideration and patience in this matter and we trust that Agri-Flex and Weld County will have a mutually beneficial relationship henceforth. Very truly yours , (j -e„e/ui "J. Rollin Miller t fi JRM/jf cc : Harry Spendlow OFFICE OF FINANCE & ADMINISTRATION PHONE (303)356-4000 EXT.218 P.O.BOX 758 • GREELEY,COLORADO 80632 WIIDc. January 4 , 1980 COLORADO J. Rollin Miller Attorney At Law One Park Central-Suite 690 1515 Arapahoe Street Denver, CO 80202 Dear Mr. Miller : In response to your December 1 , 1979 letter concerning the withdrawal of Agri-Flex' s application for industrial revenue bonds submitted to Weld County, the following is offered. In accordance with County policy, all industrial revenue bond applications submitted are filed with the Clerk to the Board and at that time become part of the official pro- ceedings of the Board of County Commissioners which, in turn, become permanent public record. Therefore , it is impossible to return the copy that is filed as a part of the proceedings of the Board of County Commissioners ' meeting. We can comply with your request, in part , by returning all copies other than the copy filed as part of the Board pro- ceedings ; however, there is no guarantee that copies of the permanent record will not be made . From a practical point- of-view, I doubt that anyone will read or copy the Agri-Flex file . The application fee of $250 to defray the cast of the County ' s analysis of the proposal is a non-refundable application fee and, therefore , cannot be returned to the applicant . If at any time in the future we can be of assistance to Agri-Flex concerning the issuance of industrial revenue bonds or any other matter, please do not hesitate to contact me or any other representative of Weld County. Ma- onald Warden Director of Finance and Administration DDW/clb J. ROLLIN MILLER LAWYER ONE PARK CENTRAL - SUITE 690 1515 ARAPAHOE STREET DENVER, COLORADO 80202 PHONE (3031 629-0043 December 17 , 1979 CERTIFIED MAIL #861794 Mr. Don Warden Administrator of Finance Weld County 915 10th Street Greeley, Colorado 80631 In Re: Agri-Flex, Inc . Industrial Revenue Bond Dear Don: Enclosed please find the Inducement Resolution in connection with the application of Agri-Flex, Inc . for an Industrial Revenue Bond together with the original opinion letter of bond counsel, Wilson & Lamm. This letter states that the proposed purchase complies with the intent of the General Assembly. As I mentioned earlier there will be an amended application submitted in the near future concerning this matter. Looking forward to hearing from you. Very truly yours , J. Rollin Miller JRM/jf f Enc. cc : Harry Spendlow WILLSON & LAMM A PROFESSIONAL CORPORATION ATTORNEYS AT LAW 818 AMERICAN NATIONAL BANK BUILDING SIB SEVENTEENTH STREET DENVER, COLORADO 80202 JAMES G. WI LLSON, JR. TELEPHONE (303) 825-1284 IN ASSOCIATION WITH WILLIAM 0. LAMM WILLSON LAMM EOSTROM & STOWE ATTORNEYS AT LAW DAVID EDSTROM ERICK 0STOWE CHEYENNE,WYOMING I30J) 635-0221 MARY ANN BRAVMER December 14 , 1979 DEE P WISOR BARBARA E. BONDS' •LICENSED ONLY IN WYOMING Board of County Commissioners Weld County , Colorado Re: Industrial Development Revenue Bonds (Agri-Flex, Inc. Project) Gentlemen: I have been asked to offer my opinion as to the legal qualification of the manufacturing facility for Agri-Flex , Inc. within the legislative intent of the County and Municipality Development Revenue Bond Act ( the "Act" ) . The legislative intent of the Act is set forth in part, at Subsection 29-3-102 (1) Colo- rado Revised Statutes 1973 , as amended, as follows: " ( 1 ) It is the intent of the general assembly by the passage of this article to authorize counties and municipalities to fi- nance , acquire , own, lease , improve , and dispose of properties to the end that such counties and municipalities may be able to promote industry and develop trade or other economic activity by inducing profit and non-profit manufac- turing . . enter rises to locate , expand or remain in this state . . . " It is our understanding that Agri-Flex , Inc . intends to locate a facility in Weld County for the manufacture of flexible irrigation systems . It is our opinion that such a manufacturing facility is within the legislative intent of the Act. If you have any questions, please do not hesitate to write or call . Very tru, y`yourst /1- ! '_--__.------ rick D. Stowe i EDS:rmm pc: J . Rollin Miller, Esq. @-J J.MILTON NEWTON,INCORPORATED armedmord Sakai ONE PLAZA PLACE, N.E. SUITE 1400, ST, PETERSBURG, FLORIDA 33701 (813) 822-4236 December 11, 1979 Mr. Harry Spendlow, President Ms. Lisa Whaley, General Manager Agri-Flex, Inc. 4550 Wadsworth Boulevard Denver, Colorado 80033 Re: $1,300,000 Weld County, Colorado First Mortgage Industrial Revenue Bonds (Agri-Flex, Inc. , Mortgagor) , Series 1980 Dear Mr. Spendlow and Ms. Whaley: On the basis of information furnished us regarding the above styled project (the "Project") , J. Milton Newton, Incorporated (the "Underwriter") does hereby agree to offer on a best efforts, all or none basis, the $1,300,000 Weld County First Mortgage Industrial Revnue Bonds (Agri-Flex, Inc. , Mortgagor) , Series, 1980, to be dated on or before February 1, 1980 at 94% of the face amount of the issue, subject to the following terms and conditions: 1. That Weld County, Colorado, or other appropriate authority, will issue Bonds in the approximate amount stated above with the Bonds being dated on or before February 1, 1980. 2. That the Bonds will be in $5,000.00 denominations. 3. That the Bonds will be amortized over a period not to exceed twenty-two (22) years including two years of interest only payments. The Bonds shall be both serial and term bonds as set forth in the Preliminary Maturity Schedule which is attached hereto as Exhibit "A" and incorporated herein. 4. The average coupon on the Bonds shall not exceed 9.90%. The Underwriter reserves the right to make such market adjustments as may be required to meet current market conditions. 5. The proceeds of the Bonds will be used to acquire and fund the cost of land, buildings, railroad sidings, equipment and machinery to be used by Agri-Flex, Inc. to manufacture, sell and distribute Agri-Flex Flexible Tubing Irrigation Systems. Bond issue proceeds shall also include the costs and expense of the issue, including a debt service reserve fund, all as set out and contained in the "Proposed Application of Proceeds" which is attached hereto as Exhibit "B" and incorporated herein by reference. 5. The redemption provisions and premiums, if any, shall be determined by the Underwriter with the approval and consent of the borrower. Ft. Lauderdale-Ft. Myers-Jacksonville-Miami-Tampa/St.Petersburg-Winter Park,FM. Jackson,MISS.-Highlands,N.C.-Houston,Tx.-Phoenix-Tucson,Az.-Albuquerque,N-M. Agri-Flex, Inc. (the "Borrower") December 11, 1979 Page 2. 7. Interest on the Bonds shall be exempt from Federal Income Taxes to the holders thereof within the meaning of Section 103(b) of the Internal Revenue Code of 1954, as amended. Further, the Bonds will be accompanied at the time of their delivery to the Underwriter by the unqualified approving legal opinion of Messrs. Willson & Lamm, Attorneys at Law, Denver, Colorado (the "Bond Counsel") as to the legality of the issue and the Federal tax exempt status of the interest thereon, and such executed certificates and other delivery papers in customary market form as are normal in issues of this type, and as may be required by Bond Counsel or the Underwriter's Counsel. 8. All expenses incurred in connection with the issuance of the Bonds shall be paid from the Bond proceeds, including but not limited to the fees of legal counsel, fiscal planning, management and advisory fees, brokerage charges, the printing of the Bonds and the Official Statement(s) , the cost of delivery of the Bonds to our designated depository bank, recording fees, title insurance premiums, transportation and other costs incidental to the closing of the transaction, all of which are generally set forth and contained in Schedule "B" attached. 9. The Bonds will be registerable where appropriate in the states of Florida, Arizona, New Mexico, Georgia, Mississippi, North Carolina and Tennessee. The U .P.r shall ewiply with all filing or registration requirements of the Colorado Securities Department as same may be applicable to the Project. ADMINISTRATIVE APPROVALS You shall obtain all necessary and required City, County, State and/or Federal permits, licenses and occupancy certificates for the construction and operation of the Project. The land, buildings, improvements, furniture, fixtures, machinery and equip- ment shall be -retired by the lien of a valid first deed of trust and security agree- ment at the time of the delivery of the Bonds. All funds required to purchase land, construct buildings and acquire machinery and equipment after the date of closing shall be deposited with the Trustee or approved paying agent subject to an irrevocable title insuring agreement with an approved title insurance agency or company and subject to the terms of a disbursing agreement between the Trustee and all concerned builders, contractors, laborers and materialmen for which funds shall be escrowed. FINANCIAL FEASIBILITY STUDY The Underwriter shall be provided with an executed Financial Feasibility Study prepared by May, Zima and Company, C.P.A., Atlanta, Georgia, said Feasibility Study to be in a form and contain financial data, including debt service coverage ratios, and other data acceptable to the Underwriter and which shall clearly demonstrate the economic and financial feasibility of the Project. Agri-Flex, Inc. (the "Borrower") Deceirber 11, 1979 Page 3. REPRESENTATIONS 1. That all financial information regarding the Project shall be substantially as represented to the Underwriter, including projections for future years of operation which have been prepared in good faith and according to reasonably attainable estimates. 2. That you and all persons connected with the management and operation of the Project at this time will provide the Underwriter with such assistance and information as it may reasonably request to prepare the Official Statement(s) to be u,cd in connection with the offering of the Bonds and that you will review the same and give your written approval of the contents thereof prior to the date of the offering and delivery of the Bonds. THE UNDERWRITER 1. The Underwriter agrees to make payment for said Bonds within thirty (30) days of the offering thereof on a best efforts, all or none basis, provided that all of the Bonds have been subscribed for, otherwise, the Underwriter agrees to make payment for said Bonds within thirty (30) days after all subscriptions for the entire offering have been received, whichever shall be the later. 2. The Underwriter will pay 94% of the face amount of the Bond Issue for the Bonds. 3. J. Milton Newton, IncoLpJrated, as Fiscal Advisor, will receive a financial advisory fee in an amount equal to three (3%) percent of the total bond issue proceeds or not to exceed $39,000. The Underwriter will offer a maximum $1,300,000 Industrial Revenue Bonds or such lesser amount as shall be determined between the Issuer, Borrower and the Underwriter as based upon actual costs, as adjusted, when firmly determined. 4. The Bonds shall be offered on a best efforts, all or none basis, upon the preparation, registration where necessary and release by Bond Counsel and Underwriter's Counsel of a Preliminary Official Statement permitting the offering of the Bonds. MISCELLANEOUS We are prepared to proceed immediately and continue working with all due dili- gence towards completing this financing. Therefore, the Underwriter and Fiscal Agent agree to act and you agree to retain the Underwriter and Fiscal Agent as your exclus- ive source of financing for the Bond Issue detailed herein for a term of 120 days from the date hereof. Any delay in the issuing and/or bringing to market of the subject Bonds not caused by the Underwriter or Fiscal Agent will extend this agency for an Agri-Flex, Inc. (the "Borrower") December 11, 1979 Page 4. equal period of time. If the foregoing is acceptable to you, kindly execute a copy of this agreement and return same to the Underwriter or Fiscal Agent on or before December 19, 1979. Very truly yours, J. MILTON NE LCN, INCORPO (the "Underwriter") , by r ller, r. , Underwri 's Counsel and Authorized Agent Accepted this day of December, 1979 for Borrower. AGRI-FLEX, INC. (the "Borrower") by Vice President Confirmation by Underwriter J. MILTON NEWI'ON, INCORPORATED by Acknowledged: Vice President-Underwriting COLONIAL WESTERN FINANCIAL CORPORATION by Leonard A. Metallo, President And By: Ire F. Sutliffe, Fiscal Agent SCHEDULE "A" @-D J.MII.TON NEWTON,INCORPORATED ONE PLAZA PLACE, N.E. SUITE 1400, ST. PETERSBURG, FLORIDA 33701 (813) 822-4236 PROPOSED $1,300,000 WELD COUNTY, COLORADO INDUSTRIAL REVENUE BONDS (AGRI-FLEX, INC. ,BORROWER) SERIES 1980 Proposed Issue Date: January 2, 1980 Proposed Denominations: $5,000.00 If the Issue is offered and sold, the principal and semi-annual interest pay- ments (due July 1 and January 1) will be payable at the University National Bank (the "Trustee") , Denver, Colorado, and the first interest coupon will be due and payable at the Truster Bank on July 1, 1980. Proposed Maturity Schedule Fiscal Mandatory Annual Total Annual Year Rate Principal Sinking Fund Interest Debt Service 1981 $126,532 $126,532 1982 126,532 126,532 1983 8.00 10,000 126,532 136,532 1984 8.15 15,000 125,732 140,732 1985 8.30 20,000 124,509 144,509 1986 8.45 25,000 122,849 147,849 1987 8.60 30,000 120,736 150,736 1988 8.75 35,000 118,156 153,156 1989 8.90 40,000 115,093 155,000 1990 9.05 45,000 111,533 156,533 1991 9.95 50,000 107,460 157,460 1992 9.95 55,000 102,485 157,485 1993 9.95 60,000 97,012 157,012 1994 9.95 65,000 91,042 156,042 1995 9.95 70,000 84,574 154,574 1996 9.95 80,000 77,609 157,609 1997 9.95 90,000 69,649 159,649 1998 9.95 100,000 60,694 160,694 1999 9.95 110,000 50,744 160,744 2000 9.95 120,000 39,799 159,799 2001 9.95 130,000 I 27,857 157,857 2002 9.95 1,080,000 150,000 14,924 164,924 1,300,000 1,080,000 2,042,055 3,342,055 Terms of the Issue are interest only for the first two years; thereafter, Serial Bonds due annually beginning in 1983 thru and including 1990; thereafter, accumulated $1,080,000 Sinking Fund Balance due and payable, in full, in year 2002. Mandatory deposits to the sinking fund are required annually beginning in 1991. All payments by the Borrower to the Trustre will be made monthly. Annual Average Coupon Rate: 9.73% Annual Average Debt Service: $151,912 (Subject to Market Adjustment) Ft. Lauderdale- Ft.Myers-Jacksonville-Miami-Tampa/St.Petersburg-Winter Park, Fla. Jackson, Miss.-Highlands, N.C.- Houston,Tx.-Phoenix-Tucson, Z.-Albuquerque,N.M. SCHEDULE "B" PRELIMINARY WORKSHEET PREPARED BY: L.F.S. DATE: 12-3-79 AMOUNT OF BOND ISSUE: $ 1,300,000 ISSUER: Weld County, Colorado REVISION 1: 12-11-79 REVISION 2: PROJECT NAME: Agri-Flex, Inc. REVISION 3: PST LOCATION: Zadel Ranch, Firestone, Colorado PROPOSED APPLICATION OF BOND ISSUE PISS ACQUISITION OF PROPERTY & PROPOSED CONSTRUCTION Land: Building: Railroad Siding: Furniture: Equipment: Machinery: $ 993,000 ADMINISTRATIVE COSTS & EXPENSES M.A.I. APPRAISAL $ FINANCIAL FEASIBILITY REPORT 12,500 PRINTING & ENGRAVING 3,500 TITLE INSURANCE PREMIUMS 4,000 TRAVEL COSTS & EXPENSES 4,000 CLOSING COSTS & RECORDING EXPENSE 1,000 TUTAL ADMINISTRATIVE OUSTS: $ 25,000 LEGAL FEES & PROFESSIONAL EXPENSES BOND COUNSEL Willson & Lamm, Denver, Colo. $ 13,500 UNDERWRITER'S COUNSEL George E. Mueller, Esq. 13,500 ISSUER'S COUNSEL 3,500 USER'S COUNSEL James R. Miller, Esq. 3,500 TRUSTEE'S FEE University National Bank 5,000 FISCAL MANAGER Lee F. Sutliffe 13,000 Financial Broker Colonial Western Financial Corp. 19,500 Planner Jane Ross 3,000 TUT'AL LEGAL & PROFESSIONAL EXPENSE: $ 74,500 UNDEPWRITER'S FEES & EXPENSES BOND'DISCOUNT 6 % $ 78,000 FISCAL ADVISORY EKE J. Milton Newton, Inc. 39,000 IUFAL UNDERWRITING FEES & DISCOUNTS: $ 117,000 OTHER FUNDED COSTS OR EXPENSES. DEBT SERVICE RESERVE FUND $ 80,000 CONTINGENCY ACCOUNT 10,500 OTHER COSTS & EXPENSES: $ 90,500 IUTAL APPLICATION OF BOND ISSUE PROCEEDS: $ 1,300,000 " COLONIAL WESTERN FINANCIAL CORPORATION December 13 , 1979 Mr. Donald D. Warden, Director Finance and Administration Weld County, Colorado 915 10th Street Greeley, Colorado 80631 Re: Proposed $1, 300 ,000 Weld County, Colorado Industrial Revenue Bonds (Agri-Flex, Inc. , Borrower) , Series 1980 ; Firestone, Colorado Dear Mr. Warden : Agri-Flex, Inc. , a Colorado Corporation, respectfully submits its application and requests that the Board of County Commissioners of Weld County, Colorado favorably consider and approve the issuance of $1, 300 ,000 Industrial Revenue Bonds to assist in financing the cost of land, buildings, site improvements, railroad siding, equip- ment and machinery to be used by the applicant in connection with the manufacture, sales and distribution of Agri-Flex Flexible Tubing Irrigation Systems. The proposed plant will be located in the industrial area of the Frank Zadel Ranch in the Town of Firestone, Weld County, Colorado. The following is an outline of the proposed project (the "Project") and is a synopsis of more detailed information contained in the attached Preliminary Bond Issue Summary as well as the presentation of information made by the Borrower as part of this application : 1. Amount of Bond Issue: $1, 300 ,000 2 . Bond Issue Term: Twenty-two (22) Years. The Bonds will be repaid interest only for the first two years; serial bonds in varying principal amounts over the next eight years ; and one 22 Year Term Bond due in the year 2002. 3 . Interest Rate: The maximum average interest coupon rate will not exceed 9 . 9% per annum although the enclosed preliminary maturity schedule provides for an annual average coupon rate of 9 . 73% oer annum. 309 JERRY STREET, SUITE 110 • CASTLE ROCK. COLORADO 80104 • (303) 688-5371 Mr. Donald D. Warden December 13, 1979 Page 2. 4 . Use of Bond Proceeds : The proceeds of the proposed Revenue Bond Issue will be used as outlined on Page 19 of the attached Preliminary Bond Issue Summary. 5. Working Capital : The applicant has sufficient working capital with which to commence business at the new plant site. Additional shares of stock are being issued to Paul A. Whaley who will become Vice President for Manufacturing. Also, a $100 ,000 line of credit has been approved by the Platte Valley Bank, Frederick , Colorado. Initial preliminary operating projections indicate that the applicant can demonstrate sufficient earnings and revenues to repay the Bonds in full with better than average debt service ratios. 6 . Security for the Bonds : The proposed Bonds will be secured by the lien of a valid first deed of trust on land and buildings and a security agreement on equip- ment and machinery. The Underwriter is not requiring that the Bonds be personally guaranteed because of the unusually high debt service ratios. 7. The Underwriter : J. Milton Newton, Inc. , St. Peters- burg, Florida (the "Underwriter") has issued its letter of agreement to offer the Bonds on a best efforts, all or none basis. A copy of the letter agreement is attached to and forms a part of this application. It is the intention of the Underwriter to enter into a Bond Purchase Agreement with Weld County at closing to purchase the Bonds at 94% of the face amount of the Bond Issue. It is anticipated that this closing will take place on or before February 15, 1980 . 8. May, Zima and Company, C.P.A. , Atlanta, Georgia, has been retained by the Borrower-applicant to conduct an independent economic and market feasibility study to determine that the Project is feasible and economically sound. This report will be an integral part of the Bond Issue and the Offering Statements. 9 . Authority for Bond Issue : Chapter 29 , Article 3, Section 101, et seq. , Revised Statutes of Colorado (the "County and Municipality Development Revenue Bond Act") . 10 . Debt or Pledge of Weld County: The Proposed Industrial Revenue Bond Issue will not constitute a debt or a pledge of the full faith or credit of Weld County. The Mr. Donald D. Warden December 13, 1979 Page 3. Revenue Bonds will be payable solely from the income and revenue which the Borrower will generate from the operation of the Project. 11. Property Tax Exemption: The proposed Revenue Bonds will not be exempt from real estate taxes or assessments and there will be no loss of income to the citizens and taxpayers of Weld County as a result of the approval and issuance of the Bonds. Taxes will be increased as a result of new construction. 12 . Public Purposes : The Borrower proposes to provide 15 initial new employment opportunities with a maximum potential of 25 new employees within the first year of operation. The Bond Issue will provide (i) new employment in the County, (ii) an increase in the ad valorem tax base, (iii) will enhance, maintain, promote and help to maintain a stable, balanced and diversified economy within the County, and (iv) will promote the agricultural resources of the State of Colorado. 13 . Bond Counsel: The Underwriter has selected Messrs . Willson & Lamm, Attorneys at Law, Denver, Colorado, to act as Bond Counsel . At the time of the delivery of the Bonds to the Underwriter, the Bonds will be accompanied by an unqualified approving legal opinion of Bond Counsel as to the legality of the issue. 14. Trustee : The University National Bank, Denver, Colorado as agreed to act as Trustee for the Bondholders. The Platte Valley Bank, Frederic, Colorado will participate as a paying agent with the Trustee. 15. Urgency: We respectfully request that the Board of County Commissioners invoke their emergency powers in adopting a Preliminary Inducement Resolution to authorize the Bonds . The applicant is governed by the growing season and must be in production no later than June 30 , 1980 in order to meet production schedules and delivery dates for its product. 16 . Construction Schedule : The applicant proposes to begin construction within 15 days of closing of the Bond Issue and all construction and subcontract agreements will provide for ample penalties beyond a 105 day completion date. Machinery and equipment must be ordered by Mr. Donald D. Warden December 13, 1979 Page 4. January 1, 1980 in order that delivery may be assured by June 1, 1980 . We have taken the liberty to prepare and enclose herewith for your consideration, a form of Resolution suitable for our purposes in order that the applicant may undertake contract negotiations and place orders for machinery and equipment. We have complied with all of the requirements of Ordinance No. 25, as amended by Ordinance No. 43 with the exception of the opinion of Bond Counsel which must by necessity accompany the Bonds when they are delivered to the Underwriter. We respectfully request your favorable consideration and approval of this application and ask that this matter be placed on the agenda for the regular meeting of the Board of County Commissioners of Weld County on December 19 , 1979 . There will be no cost or expense to Weld County in connection with this transaction and all costs will be paid from Bond Proceeds or by the applicant. Your kind consideration will be most appreciated. Most respectfu y, Leonard Metal o President, Agent for the Applicant LAM; lfs;p Enclosures (7 copies) cc: Agri-Flex, Inc. James R. Miller, Esq. George E. Mueller, Esq. Erick D. Stowe, Esq. Lee F. Sutliffe, Fiscal Agent J. Milton Newton, Inc. I r II il li I r,,, i ril re w w r?2« 4 o-- rig( f I V A. A Ili 'w -t':^ _ al I( / JS Ui L 11 u' rttiv AGRI - FLEX , INC. $1, 300 , 000 WELD COUNTY, COLORADO INDUSTRIAL REVENUE BONDS (AGRI-FLEX, INC. ,BORROWER) SERIES 1980 j,ll .11l Ali n„ nn tit I 41t. 'Vc(y P, 'W. 0 1 .- 11 Illi' ' ` , IIIIIIII lhIIIIlhIIIIIIII IIIIIII� a'' � VY r m0 ^ti II ifl i 1 i I �II ' ( .r� r 1 la` tr Ca THE PROPOSED REVENUE BONDS WILL NOT CONSTITUTE A DEBT OF WELD COUNTY OR THE STATE OF COLORADO, NOR A PTFMF OF THE FULL FAITH OR CREDIT OF WEIR COUNTY OR THE STATE OF COLORADO THIS SUMMARY IS NCT FOR PUBLIC USE OR DISTRIBUTION THIS MEMORANDUM IS A SUMMARY OF CERTAIN ASPECTS OF A PROPOSED INDUSTRIAL REVENUE BOND ISSUE TO FINANCE THE COST OF ACQUISITION OF LAND, THE COST OF CONSTRUCTION OF BUILDINGS, IMPROVEMENTS AND RAILROAD SIDING, AND THE COST OF ACQUISITION AND INSTALLATION OF MACHINERY AND EQUIPMENT TO BE LOCA1'r;D IN THE TON OF FIRESTONE, WELD COUNTY, COLORADO AND IS INTENDED SOLELY TO ACQUAINT REPRESENTATIVES OF THE ISSUER, THE UNDERWRITER, FISCAL ADVISORY AGENTS AND RESPECTIVE COUNSEL AS TO THE PRELIMINARY FACTS AND FEASIBILITY OF ISSUING INDUSTRIAL REVENUE BONDS TO ASSIST IN FINANCING THE PROJECT. THIS IS NOT AN OFFERING STATEMENT NOR IS ANY OFFERING OF SECURITIES MADE OR INTENDED HEREBY THERE ARE FACTS AND ECONOMIC CIRCUMSTANCES WHICH CAN OR MAY CHANGE SIGNIFICANTLY IN THE NEAR FUTURE WHICH COULD AFFECT THE MANAGEMENT AND OPERATION OF THE BUSI- NESS OF THE BORROWER IF THE PROJECT IS DELAYED SINCE THE BULK OF THE BORROWER'S BUSINESS IS DIRECTLY RE- LATED TO THE AGRICULTURE INDUSTRY AND RELATED GROWING SEASONS. THE INFORMATION CONTAINED HEREIN HAS BEEN OBTAINED FROM THE BORROWER, HOWEVER, THE INFORMATION IS PRELIMINARY IN NATURE AND THERE IS NO GUARANTEE AS TO THE ACCURACY THEREOF. WHILE PROJECTIONS ARE BASED UPON RELIABLE SOURCES AND FORECASTS, THERE IS NO ASSURANCE THAT THE GOALS CAN BE ATTAINED UNDER CON- STANTLY CHANGING MARKET CONDITIONS. NO BROKER, DEALER, SALESMAN OR OTHER PERSON IS AUTHORIZED BY THE ISSUER, THE BORROWER OR THE PROPOSED UNDERWRITER TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION WITH RESPECT TO THE OEbLRING OF ANY SECURITIES. IF THE PROPOSED INDUSTRIAL BOND ISSUE IS APPROVED BY WELD COUNTY, COLORADO AND THE BONDS ARE ACTUALLY OFFERED, ALL DEALERS, BROKERS OR OTHER CONCERNED PERSONS SHALL RELY SOLELY UPON TEE INFORMATION WHICH WIT,T BE CONTAINED IN THE OFFICIAL STATEMENT WHICH SHALL BE ISSUED IN CONNECTION THEREWITH. 2 THE PROJECT Agri-Flex, Inc. , a Colorado CoLporation (the "Borrower") proposes to acquire a two acre tract of land in the industrial area of the Frank Zadell Ranch in Firestone, Colorado. The land will include paved streets, curb, gutter and utilities. Further, the land abuts the main line of the Santa Fe Railroad and a spur track to the property will be constructed. The Borrower also proposes to contract for the construction of a manufacturing and warehouse building, storage bins and the railroad spur track as well as acquire and install machinery and equipment to be used in connection with the manufacture, sale and distribution of Agri-Flex Flexible Tubing Irrigation Systems (see "Description of Property and Improvements") . The Borrower is requesting Weld County, Colorado to approve and issue Industrial Bonds in the principal amount of $1,300,000 to finance the cost of the land, buildings, improvements, machinery and equipment as well as pay the other lawful costs and expenses of the Bond Issue (see "Proposed Application of Bond Issue Proceeds" on page 19 of this Summary) . The Bonds will be secured by the lien of a valid first deed of trust and security agreement on the land, buildings and equipment. The security instruments will be assigned to the University National Bank, Denver, Colorado, as Trustee for the Bondholders (the "Trustee") . The land, buildings, improvemeits, furniture, fixtures, equipment and machinery will either be owned by the Borrower or will be owned by a limited partnership comprised of the shareholders, officers and directors of the Borrower and leased to the Borrower for operation. A determination of the owning entity for tax purposes will be made prior to the release of the Official Statement permitting 3 the Underwriter to offer the Bonds. All of the expenses of the Bond Issue, in- cluding the expenses of Weld County will be paid fran the proceeds of the Issue. THE PROPOSED INDUSTRIAL REVENUE BCFIDS AND THE INTEREST THEREON WILL NOT CONSTITUTE A DEBT OR A PLEDGE OF THE FULL FAITH AND CREDIT OF WELD COUNTY OR THE STATE OF COLORADO OR ANY OTHER DVPARFMENT, AUTHORITY OR AGENCY THEREOF. THE REVENUE BONDS WILL BE A LIMITED OBLIGATION PAYABLE SOT,FT Y FROM THE INCOME AND OTHER WHICH THE BORROWER WILL GENERATE FROM MANUFACTURE, SALES AND OPERATIONS. Agri-Flex, Inc. is a relatively new company which enjoys a strong market position because of its superior production design, method of distribution and manufacturing capability which will provide controlled quality and delivery. More important, Agri-Flex can service the waiting irrigation market with practically no cvunietitive restraint. (see "Operations by Borrower") Projected Operating Statements included as part of this Summary will indicate and clearly demonstrate the ability of the Project to generate sufficient inane adequate to repay debt and maintain debt service ratios required by the Under- writer. A Debt Service Reserve F nd will be funded as part of the Bond Issue and the proceeds will deposited with the TrustPe as security for future debt service payments. THE PROJECT WILL NOT BE EXEMPT FROM REAL ESTATE TAXES OR ASSESSMENTS AND THERE WILL BE NO REDUCTION OR MONETARY LASS TO THE CITIZENS AND TAXPAYERS OF WELD COUNTY, THE TOWN OF FIRESTONE, THE LOCAL SCHOOL DISTRICT OR ANY OTHER TAXING AUTHORITY WHICH NOW RECEIVES OR DERIVES TAX BENEFITS AND REVENUES FROM THE PROJECT OR PROPOSED IMPROVEMENTS. 4 Financial Feasibility May, Zima and Company, C.P.A., Atlanta, Georgia, an independent firm of certified public accountants knowledgable in the real estate, manufacturing and distribution industries has been engaged to prepare a financial feasibility study in support of the economic potential available from the operation of the Project to repay the Industrial Revenue Bonds in full as they mature. The financial feasibility study must indicate that there will be sufficient projected debt service coverages available to further insure semi-annual interest payments as well as payments of principal on serial bonds and annual sinking fund deposits for term bonds. The financial feasibility report will be included as an integral part of the Official Statement(s) issued in connection with the offering of the proposed Bonds. The Underwriter J. Milton Newton, Incorporated, St. Petersburg, Florida (the "Underwriter") has issued its letter of intent to offer the proposed $1,300,000 Weld County Industrial Revenue Bonds on a best efforts, all or none basis. At closing, the Underwriter intends to enter into a bond purchase agreement with the Issuer to purchase the Bonds at 94% of the face amount of the issue. The Underwriter will also act as Fiscal Advisor to the Borrower. J. Milton Newton, Inc. is a highly respected regional investment banking firm which has successfully offered and sold a great number of Revenue Bond Issues over the past several years. Employment, Economic and other Public Purposes The Project will be the demands for a rapidly developing market serving the agriculture industry both in and out of the State of Colorado. Based upon present projections (without the benefit of available ancillary market and product development) , the Borrower will employ a minimum of 15 employees initially with an almost immediate need for 10 additional employees. It is estimated that new annual payroll will range from a minimum of $156,000 to a maximum of $260,000 during the first year of operations. The annual payroll and the number of new employees could be further increased with the Borrower's initial indication that the new plant will operate on a 24 hour daily basis to meet anticipated production needs. The Project will further add to the property tax base of the County and will enhance the economic base by providing new buying power. The Borrower will bank with a Weld County Bank. Finally, the Borrower's products will enhance the use and development of the natural resources and agriculture producing area of the State of Colorado. 5 A Ft. Collins Loveland 25 Greeley 52 Longmont 62 Fire tone Boulder 85 70 Denver • DESCRIPTION OF PROPERTY AND IMPROVEMENTS The Borrower will acquire a 2 acre site which is part of the Zadel Ranch in the Town of Firestone, Colorado. The land, being acquired for $1.10 per square foot will include paved streets, gutters, curbs and utilities to the site. Agri-Flex, Inc. proposes to construct a railroad spur from the main line of the Santa Fe Railroad to a point on the property which will be utilized for receiving resins which are used to manufacture the company's flexible tubing. A rail siding is essential and will result in savings up to .10 per pound versus having the raw materials shipped in by truck. The proposed building will be a masonry, steel and prestressed concrete structure containing approximately 10,240 square feet which will be used for manufacturing, warehousing and office functions. The buildings will have a 20' height for warehouse use and a 56' height in the rear manufacturing area. In addition, there will be two exterior bins constructed for storage of raw materials. Major machinery and equipment will include three polyethelene extruders to mold raw polyethelene resin into circular tube form where it is cooled, flattened and rolled into rolls of varying length ready for shipment and use in the fields. Other equipment will include a bagging machine, fork-lift, a four-wheel drive truck and other business vehicles and equipment. The manufacturing process is inherently clean and emits no harmful or objection- able noise, air pollutants or effluents. The rolls, ranging upward to 1,400 feet in length, are boxed and palletized for shipment by truck to independent distributors. Included with each roll of tubing are polyeurothane gates which are inserted in the tubing to release water in appropriate areas in the fields. 7 AGRI-FLEX FLEXIBLE TUBING IRRIGATION SYSwTh Agri-Flex, Inc. is currently engaged in the business of selling and distributing its Agri-Flex Flexible Tubing Irrigation System. The product is now manufactured by subcontractors according to company specifications. Because of the rapidly growing market and demand for the product, Agri-Flex Management has determined that it must now engage in the manufacture of its product to keep up with pending orders. The company now sells through an independent distribution network and conducts training seminars for sales personnel and retail users. The company has entered into supply agreements with Union Carbide to supply raw polyethelene resin in pellet form and with Ampacet & Norteck, Inc. , a Division of Northern Petrochemical Coapuration to supply the concentrate needed to wuplete the manufacturing process. The rolled tubing is sold in varying sizes from 150 to 160 pounds and upwards to 1400 feet in length. The tubing is unrolled on the surface of the ground and is connected to a water supply source. Special gates which are supplied with the tubing are installed in the tubing at various distances so that water may be released to irrigate a field or specific crop alignment. The rolled tubing is usually good during one growing season because the sun breaks down the polyethelene tube. Therefore, the system is relatively inexpensive even with an annual re- placement of the tubing. The gates are reusable from year to year. The average list cost of the tubing at the consumer level is .31C per foot and the gates are .51C each. An average 160 acre tract requires 7 rolls of tube plus seven cartons of gates (270 gates per carton) and while the cost is approximately $4,000 to the consumer, the overall cost even with annual tube replacement is far less then conventional underground or above-ground irrigation pipe. 8 The company anticipates selling a minimum of 9,600 rolls of tubing during its initial year of manufacture and already has distribution estimates of 6,600 rolls from its largest distributor customer, Farmland Industries, Inc. By-Product Potential As a direct by-product of the tubing material, the company can manufacture without additional cost, a Baler Bag which is used to bale potatoes. There is a large potential for this product and one customer in Oregon estimates its use at 6 million Baler Bags per year (selling price: $25 per 1000) which could produce an additional $150,000 annually which is not included in current operating projections. Another direct product would be a Carden-Pak which could be sold at a retail level through department and hardware stores with an estimated additional net profit of $54,000 available which is also not included in current operating projections. Gates will continue to be supplied by a subcontractor. PRODUCT ADVANTAGES There are three basic advantages which makes Agri-Flex Flexible Tubing Irrigation Systems superior to any other type of irrigation system on today's market. 1. The Product SAVES about ONE-THIRD of the grower's water because of the ease of control. There is practically no evaporation as their is with high pressure systems. 2. The Product SAVES about FIFTY PERCENT of the grower's labor cost connected with irrigation of his fields and crops. 3. The Product SAVES about ONE-THIRD of the grower's power bill. These advantageous savings continue even with replacement of the tubing on an annual basis. 9 AGRI-FLEX, INC. UNAUDITED BALANCE SHEET - NOVEMBER 30 , 1979 ASSETS Current Assets Cash on hand and in banks $ 32,096 Accounts Receivable (net of $7,868 allowance for doubtful accounts) 138,651 Inventory 55,000 Total Current Assets $ 225,747 Other Assets Automobiles and trucks 10,700 Office Equipment 1,022 Machinery and Equipment 3,952 $ 15,674 Less Accumulated Depreciation 3,628 Net Property and Equipment $ 12,046 Total Assets $ 237,793 LIABILITIES AND STOCKHOLDER'S EQUITY Current Liabilities Trade Accounts Payable $ 13,864 Advances from Stockholders 26,411 Corporate Income Taxes Payable 41,318 Accrued Interest Payable 3,000 Current Note Payable-Stockholder 30,000 Total Current Liabilities $ 114,593 Stockholder's Equity Common Stock, no par value-50,000 shares authorized; 10,000 shares issued $ 10,000 Retained Earnings 113,200 Total Stockholder's Equity $ 123,200 Total Liabilities & Stockholder's Equity $ 237,973 10 AGRI-FLEX, INC. UNAUDITED BALANCE SHEET AUGUST 31, 1979 ASshaS Current Assets Cash on hand and in banks $ 15,049 Accounts Receivable (net of $7,868 allowance for doubtful accounts 181,980 Inventory 55,000 Total Current Assets $ 252,029 Other Assets Property and Equipment at cost Automobiles and trucks $ 10,700 Office Equipment 960 Machinery and Equipment 3,952 15,612 Less Accumulated Depreciation 3,021 Net Property and Equipment $ 12,591 Total Assets $ 264,620 LIABILITIES AND STOCKBOI,nFR'S EQUITY Current Liabilities Trade Accounts Payable $ 100,130 Advances from Stockholders 26,456 Corporate Incare Taxes Payable 25,653 Accrued Interest Payable 2,100 Current Note Payable-Stockholder 30,000 Total Current Liabilities $ 184,339 Stockholder's Equity Common Stock, no par value-50,000 shares authorized; 10,000 shares issued and outstanding $ 10,000 Retained Earnings 70,281 Total Stockholder's Equity $ 80,281 Total Liabilities & Stockholder's Equity $ 264,620 11 AGRI-FLEX, INC. UNAUDITED STATEMENT OF INCOME AND RETAINED EARNINGS ' FOR THE SEVEN MONTHS ENDED AUGUST 31, 1979 Percent of Sales Sales $ 569 ,958 100 . 00% Cost of Sales : Material & Supplies 393 , 268 69 .00 Salaries 9 ,635 1. 69 Shipping Costs 8, 511 1. 49 Commissions 2 ,143 . 38 Total Cost of Sales $ 413,557 72 . 56 Gross Profit $ 156 , 401 27. 44 Operating Expenses 56 , 329 9 . 88 Operating Income $ 100 , 072 17 . 56 Other Expenses : Interest Expense 4, 138 . 73 Income Before Provision for Income Taxes 95,934 16 . 83 Provision for Income Taxes 25, 653 4 . 50 Net Income $ 70 , 281 12 .33% Retained Earnings $ 70 ,281 The foregoing Balance Sheet and Statement of Income and . Retained Earnings has been prepared without audit by Combellick, O'Connor & Reynolds, Inc. , Certified Public Accounts, Denver, Colorado. Accordingly, no opinion is expressed thereon. 12 COMIC tli44 0Cocnnor 'f ckcynoisis, Ono. Professional Corporation of Certified Public Accountants The Board of Directors Agri-Flex, Inc. Erie, Colorado 80516 Members of the Board: The accompanying projections have been presented in the form of financial state- ments from information that is the representation of management. We have not audited these projections and, accordingly, do not express an opinion or any other form of assu- rance on them. Respectfully submitted, COMBELLICK, O'CONNOR & REYNOLDS, INC. Certified Public Accountants September 14, 1979 3333 (So. cI3arnnoc��Suite 780 (Eng. Co. Rono (303)761-6161 13 AGRI-FLEX, INC. UNAUDITED PROJECTED BALANCE SHEETS DECEMBER 31 , 1979, 1980, 1981 AND 1982 ASSETS 1979 1980 1981 1982 (In Thousand Dollars) Current Assets: Cash $ 31 $ 411 $ 833 $ 1 ,309 Accounts receivable - trade 137 231 272 310 Inventory (Note 2) 55 160 200 240 Total Current Assets 223 802 1,305 1,859 Plant, Property and Equipment, at cost: Machinery and equipment 4 329 329 329 Building -- 205 205 205 Land -- 56 56 56 Land improvements -- 34 34 34 Vehicles 7 37 37 37 Office furniture and equipment -- 10 10 10 11 671 671 671 Less accumulated depreciation (Note 2) 3 51 99 147 Net Plant, Property and Equipment 8 620 572 524 Total Assets $ 231 $ 1 ,422 $ 1 .877 $ 2.383 14 LIABILITIES AND STOCKHOLDERS' EQUITY 1979 1980 1981 1982 (In Thousand Dollars) Current Liabilities: Accounts payable - trade $ 100 $ 139 $ 155 $ 174 Corporate income taxes payable 9 209 314 382 Note payable' (Note 2) -- 250 250 250 Current portion of long-term 66 debt -- 66 66 Total Current Liabilities 109 664 785 872 Long-Term Debt (Note 2): Industrial revenue bonds -- 594 528 462 Less current portion above -- 66 66 66 Net Long-Term Debt -- 528 462 396 Stockholders' Equity: Common stock, no par value, 50,000 shares authorized, 10,000 shares issued and 10 outstanding 10 10 10 Retained earnings 112 220 620 1, 105 Total Stockholders' Equity 122 230 630 1, 115 Total Liabilities and Stockholders' Equity $ 231 $ 1 ,422 $ 1 ,877 $ 2,383 15 AGRI-FLEX, INC. UNAUDITED PROJECTED STATEMENTS OF INCOME FOR THE FOUR MONTHS ENDING DECEMBER 31, 1979 AND FOR THE YEARS ENDING DECEMBER 31 , 1980, 1981 AND 1982 Four Mos. Ending 1979 1980 1981 1982 (In Thousand Dollars) Gross Sales (Note 2) $ 546 $ 2,770 $ 3,258 $ 3,714 Less Freight 15 193 214 240 Net Sales 531 2,577 3,044 3,474 Cost of Sales 399 1 ,664 1,856 2,092 Gross Profit 132 913 1, 188 1 ,382 Operating Expense: Marketing 64 216 246 276 Administrative 19 111 133 155 Total Operating Expense 83 327 379 431 Operating Income 49 586 809 951 Other Expense - Interest (Note 2) -- 90 85 79 Income Before Provision for Income Taxes 49 496 724 872 Provision for Income Taxes (Note 2) 9 209 314 382 Net Income $ 40 $ 287 $ 410 $ 490 Net Income Per Common Share $ 4 $ 29 $ 41 S 49 16 AGRI-FLEX, INC. UNAUDITED PROJECTED STATEMENTS OF CASH FLOW FOR THE FOUR MONTHS ENDING DECEMBER 31, 1979 AND FOR THE YEARS ENDING DECEMBER 31 , 1980, 1981 AND 1982 1979 1980 1981 1982 (In Thousand Dollars) Receipts: Gross collections from sales $ 409 $ 2,678 $ 3,214 $ 3,677 Proceeds from borrowing (Note 2) -- 250 250 250 Capital investment (Note 2) -- 660 -- Total Cash Received 409 3,588 3,464 3,927 Disbursements: Cost of sales 299 1 ,625 1,840 2,073 Marketing expenses 64 216 246 276 Retirement of debt (Note 2) -- 250 250 250 Freight 11 181 212 238 Corporate income taxes paid (Note 2) -- 9 209 314 Administrative expenses 19 111 133 155 Interest expense (Note 2) -- 90 85 79 Retirement of capital investment (Note 2) -- 66 66 66 Capital expenditures -- 660 -- -- Total Disbursements 393 3,208 3,041 3,451 Excess Receipts over Disbursements 16 380 423 476 Beginning Cash 15 31 411 834 Ending Cash $ 31 $ 411 $ 834 $ 1 ,310 17 (-J� aJ.MILTON NEWTON,INCORPORATED aeett ent "'¢ ONE PLAZA PLACE, N.E. SUITE 1400, ST. PETERSBURG, FLORIDA 33701 (813) 822-4236 PROPOSED $1,300,000 WELD COUNTY, COLORADO INDUSTRIAL REVENUE BCIES (AGRI-FLEX, INC. ,BORRCWER) SERIES 1980 Proposed Issue Date: January 2, 1980 Proposed Denominations: $5,000.00 If the Issue is offered and sold, the principal and semi-annual interest pay rents (due July 1 and January 1) will be payable at the University National Bank (the "Trustee") , Denver, Colorado, and the first interest coupon will be due and payable at the Trustee Bank on July 1, 1980. Proposed Maturity Schedule Fiscal Mandatory Annual Total Annual Year Rate Principal Sinking Fund Interest Debt Service 1981 $126,532 $126,532 1982 126,532 126,532 1983 8.00 10,000 126,532 136,532 1984 8.15 15,000 125,732 140,732 1985 8.30 20,000 124,509 144,509 1986 8.45 25,000 122,849 147,849 1987 8.60 30,000 120,736 150,736 1988 8.75 '35,000 118,156 153,156 1989 8.90 40,000 115,093 155,000 1990 9.05 45,000 111,533 156,533 1991 9.95 50,000 107,460 157,460 1992 9.95 55,000 102,485 157,485 1993 9.95 60,000 97,012 157,012 1994 9.95 65,000 91,042 156,042 1995 9.95 70,000 84,574 154,574 1996 9.95 80,000 77,609 157,609 1997 9.95 90,000 69,649 159,649 1998 9.95 100,000 60,694 160,694 1999 9.95 110,000 50,744 160,744 2000 9.95 120,000 39,799 159,799 2001 9.95 130,000 I 27,857 157,857 2002 9.95 1,080,000 150,000 14,924 164,924 1,300,000 1,080,000 2,042,055 3,342,055 Terms of the Issue are interest only for the first two years; thereafter, Serial Bonds due annually beginning in 1983 thru and including 1990; thereafter, accumulated $1,080,000 Sinking Fund Balance due and payable, in full, in year 2002. Mandatory deposits to the sinking fund are required annually beginning in 1991. All payments by the Borrower to the Trustee will be made monthly. Annual Average Coupon Rate: 9.73% Annual Average Debt Service: $151,912 (Subject to Market Adjustment) Ft. Lauderdale-Ft. Myers-Jacksonville-Miami-Tampa/St.Petersburg-Winter Park,Fla. Jackson, Miss.-Highlands,N.C.-Houston,Tx.-Phoenix-Tucson,Az.-Albuquerque, N.M. 18 AGRI-FLEX, INC. WELD COUNTY, COLORADO PROPOSED APPLICATION OF BOND ISSUE PROCEEDS ACQUISITION OF PROPERTY & PROPOSED CONSTRUCTION Land & Utilities 173,932 Building 191,628 Railroad Siding 45,000 Machinery 462,500 Equipment 63,000 Construction Interest 56,940 $ 993,000 ADMINISTRATIVE COSTS & EXPENSES Financial Feasibility Report 12,500 Printing and Engraving 3,500 Title Insurance Premiums 4,000 Travel Costs & Expenses 4,000 Closing Costs and Recording Expense 1,000 LEGAL FEES AND PROFESSIONAL EXPENSE Bond Counsel Messrs. Willson & Lamm 13,500 Underwriter's Counsel George E. Mueller, Esq. 13,500 Issuer's Counsel Weld County Attorney 3,500 Borrower's Counsel James R. Miller, Esq. 3,500 Initial Trustee Fee University National Bank 5,000 Fiscal Planning Agent Lee F. Sutliffe 13,000 Financial Broker Colonial Western Corp. 19,500 Pre-Construction Planner Jane Ross 3,000 UNDERWRITERS FEES AND EXPENSES Bond Discount J. Milton Newton, Inc. 78,000 Fiscal Advisory Fee J. Milton Newton, Inc. 39,000 OTHER FUNDED C.uSTS AND EXPENSES Initial Debt Service Reserve Fund 80,000 Provision for Contingent Expenses 10,500 Total Application of Bond Issue Proceeds $ 1,300,000 Note: Costs are preliminary and may be adjusted within the composition of the total $1,300,000 Bond Proceeds. Surplus funds, if any, will be transferred to the Bond Fund and applied to reduce interest or principal payments 19 J.MILTON I LTON NEWTON,INCORPORATED azaabieerd ONE PLAZA PLACE, N.E. SUITE 1400, ST. PETERSBURG, FLORIDA 33701 (813) 822-4236 December 12, 1979 Ms. Lisa Whaley, General Manager Agri-Flex, Inc. 4550 Wadsworth Boulevard Denver, Colorado 80033 Re: $1,300,000 Weld County, Colorado First Mortgage Industrial Revenue Bonds (Agri-Flex, Inc. , Borrower) Caries 1980 Dear Ms. Vhtaley: We are pleased to enclose our Letter Ayteerrent to offer the above styled Industrial Revenue Bonds on a hest efforts, all or nothing basis. While our efforts rust be confined to a hest efforts offering under new regulations just reloased by the National Association of Security Dealers, we wish to advise you that it is our intention to enter into an agreement with Weld County at closing to purchase the Bonds. We are hojnful that inducement resolutions approving the Bonds will be adopted by Weld County as soon as possible so that we may prepare a preliminary official statement and begin offering the Bonds in time to arrange for a closing not later than February 15, 1980. Unfortunately, new regulations just issued by NASD requires that we charge our net capital im:ediately upon issuing any type of conmitrrent whether the sane be con- ditional or not. Since we now have a number of commitments outstanding, we could not be in a position to connit a firm underwriting covering your transaction before May, 1980 without seriously restricting our net capital requirements. Therefore, we are offering you the alternative of a best efforts offering which we feel can be offered, sold and closed well in advance of the tine when we could give you a firm underwriting commitment. You may he assured that your project will receive the sane attention and diligent effort that you would receive with a firm commitment. We will be pleased to furnish you with appropriate references of clients who can readily assure you of our ability and past history in closing every transaction in which we have committed or otherwise been involved. Very truly yours, Gorge E. Mueller, Jr. Underwriter's Counsel GEM;ls;p Enclosures Ft. Lauderdale•Ft. Myers-Jacksonville-Miami-Tampa/St. Petersburg-Winter Park,Fla. Jackson, Miss.- Highlands, N.G.-Houston,TX.-Phoenix-Tucson,Az.-Albuquerque,N.M. BR'- CL. FLEXIBLE TUBING IRRIGATION SYSTEM Box 355 / Erie, Colorado 80516 / (303)828-3255 RESUMES OF KEY EMPLOYEES OF APPLICANT The growth of sales of Agri-Flex, Inc. can be attributed to the marketing experience of its President, Harry Spendlow who also developed the company' s unique adjustable irrigation gate. Lisa Whaley, because of her understanding of agriculture and unique background, has bolstered the company sales even higher. Realizing its need to manufacture its own product, the company sought an ex- tremely experienced Vice President of Operations, Paul Whaley. The following are the individual resumes of these key employees of Agri-Flex, Inc . President: Harry Spendlow Educational Background: University of Northern Colorado - 2 years - Physical Education Major Employment History : Nov. 1960 - Dec . 1964 U.S . Army Experienced and successful in sales and marketing activities: Feb. 1964 - Dec . 1965 : Fellows - Testagar, Detroit, Michigan Ethical Pharmaceuticals - Detail Man Jan. 1966 - Nov. 1976 : Beecham Products , Clifton, New Jersey Health and Beauty Products - Territory Salesman - (served 1 years as Area Manager, assistant to Regional Manager in San Francisco) Territory: Colorado, Wyoming, Montana and Nebraska Arneson Farms , Erie, Colorado: 1/3 owner and General Manager of Arneson Farms of Erie, Colorado, a Colorado corporation engaged in agriculture production. Arneson Farms consists of 1, 500 acres of owned and leased farm land. During this time period was conceived the idea of developing the flexible irrigation system. Nov. 1976 to present: O' S Gold, Parkersburg, Iowa Agriculture seed - Dealer - sales and service to farmers and ranchers . SRN f Resumes CLE Page 2. FLEXIBLE TUBING IRRIGATION SYSTEM Box 355 / Erie, Colorado 80516 / (303)828-3255 Farmers Marketing Association, Denver, CO Agriculture Seed - Dealer, sales and ser- vice to farmers and ranchers Private business of baler twine - sales to local farmers and ranchers. Aug. 1978 to present: Agri-Flex, Inc. , Erie, Colorado Sole owner of Agri-Flex, Inc. (formerly Agri-Flex Company. ) Vice President of Operations: Paul Whaley Educational Background: BS and MS degrees in Industrial Engineering, Virginia Polytechnical Institute - Blacksburg, Virginia. Employment History: 3 years: Vice President and General Manager, Weld Equipment Division of Hobart Brothers , Co. , Troy, Ohio 12 years : Hobart Brothers Co. , Troy, Ohio, Vice President of manufacturing all products. 2 years: Warner Electric Brake and Clutch Co. , South Belor, Indiana - Works Manager 3 years : Dyna Color Corp. - Plant Manager, 3 plants in Chicago, Los Angeles , Dallas - Processing photographic film. 10 years: Delco Applicance Div. of General Motors, Corp. , Rochester, New York - in various engineering and production supervision responsibilities leading to Chief Industrial Engineer. 1 year: Gates Rubber, Co. , Denver, Colorado - product design engineer. Resumes GRI- Page 3. rLE FLEXIBLE TUBING IRRIGATION SYSTEM Box 355 / Erie, Colorado 80516 / (303)828-3255 Corporate Secretary and Marketing Manager: Lisa Whaley Educational Background: Ohio State University, Columbus, Ohio June 1972 - April 1973 Pre-veterinary Science Major Westerville School of Nursing, Westerville, Ohio Sept 1973 - May 1974 Medical Assistant -LPN equivalent Eastern Wyoming College, Torrington, Wyoming Sept 1974 - May 1976 Associate Degree in Veterinary Technology University of Wyoming, Laramie, Wyoming Sept 1976 - July 1978 B.S . in Animal Science Employment History: April 1973 - June 1973 : Chittenden Veterinary Clinic , Columbus Ohio - receiptionist as wll as some veterinary technican' s duties. Sept 1973 - May 1974: Doctor ' s Hospital, Columbus, Ohio Ward secretary - transferred doctor' s orders from patient ' s charts to medical books as well as making sure each depart- ment is aware of tests , x-rays, etc. ordered for each patient. 1972 - 1976 (off and on) Dr. W:J. Lavelle, D.V.M. , Troy, Ohio Assisted in large animal treatments to minor small animal surgery. During this time I learned to be a great time-saving asset. By knowing Dr. Lavelle ' s procedures well enough, I was able to help the clinic handle twice as many clients in less time, and also my work allowed Dr. Lavelle to have more time away from the Clinic for farm calls. Sept 1974 - May 1976 : Dr. John Simons , D.V.M. , Torrington, Wyo Veterinary Technologist, large and small animal treatments, some minor surgery, laboratory work and radiology. H f Resumes GRI Page 4 . . GLE FLEXIBLE TUBING IRRIGATION SYSTEM Box 355 / Erie, Colorado 80516 / (303)828-3255 Sept 1974 - May 1976 : Torrington Livestock Auction, Torrington,• Wyo, Worked through the Veterinary Clinic for the livestock auction, collecting and testing blood samples from cattle in order to deter- mine presence of Brucellosis for sanitary and shipping requirements . Sept 1978 - Jan 1979 : Empire Corporation, Denver, Colorado, Outside salesperson, selling farm and ranch supplies and miscellaneous equipment to dealers in Colorado, Kansas, Oklahoma and part of Utah. Feb 1979 - present: Agri-Flex, Inc. , Wheatridge, Colorado, Hired by Harry Spendlow as a salesperson for flexible irrigation systems. My responsibilities have broadened to one of general management, including setting up pricing for the coming year, sales programs, hiring, etc. Qir Ia I Bank 5th and Oak Street Platte Valley Frederick, Colorado 80530 December 10, 1979 Board of County Commissioners County of Weld Greeley, Colorado 80631 Re:Agri-Flex, Inc. Dear Commissioners: The Platte Valley Bank of Weld County serves as principal bank for Agri-Flex, Inc. The relationship with our bank includes a business checking account as well as a $100,000.00 Line of Credit. It is my opinion, that Agri-Flex, Inc. , based on the past performance for the first 6 months of this year, will have no problem to meet the expenses for the proposed bond issue. The completion of the facility will enhance the business operation and will enable them to meet the demand and increase their production. I am extremely elated that Agri-Flex, Inc. has chosen our area and the total impact will be a great asset to our Community. The economic impact both from a tax base and employment standpoint are much needed for us. • It/my pleasure to submit this letter to you, if I can be of further service or assistance, please feel free to call me. Cordially, Mary Jane Hall Assistant Vice President MJH/s GRI- CLE FLEXIBLE TUBING IRRIGATION SYSTEM Box 355 / Erie, Colorado 80516 / (303)828-3255 AGRI-FLEX ACCOUNTS MAJOR DISTRIBUTORS Empire Corporation $249,083.13 Farmland Industries 143,749.99 Intermountain Farmers 161,048.05 Mid States 56,306.27 Solex 23,343.16 Total - $633,530.60 INDIVIDUAL ACCOUNTS Sales 1979 $ 73,416.62 Sales 1978 68,093.25 Hello