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RESOLUTION NO. 9610
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Resolution Authorizing a Loan Not To Exceed $13,000 In Urban Development Action Grant
Repayment Funds To Assist Hayes Office Supply In The Purchase of Equipment, and Working
Capital to allow for the company's expansion and increased employment
WHEREAS, Hayes Office Supply has applied for a UDAG loan, in the amount of $13,000 for the
purchase of equipment and working capital for their new business to be located in the Town of Pulaski;
and
WHEREAS, according to the UDAG application and business plan, the project's budget includes:
Purpose Amount Term
Purchase of Equipment $6,000 5 years
Inventory $7,000 5 years
TOTAL PROJECT (Town Portion) $13,000
In addition, Community National Bank will loan Hayes Office Supply $13,000 and extend a $5,000 line of
credit. Furthermore, Donnie Hayes will contribute a minimum of $25,000.
WHEREAS, Hayes Office Supply must comply with the attached budget, which is part of this ordinance.
Minor adjustment may be made within a category (Equipment, Working Capital), but in no case may the
category amount be exceeded without the prior approval of Town Council.
WHEREAS, due to the expressed need for a local business supply firm, Town Council is providing Hayes
Office Supply credit for the owner's investment of 45 percent and the Bank's participation of 32 percent of
the total project cost.
WHEREAS, the Town has available certain Urban Development Action Grant Repayment Funds, being repaid
by Pulaski Furniture Corporation and Magnox-Pulaski, Inc., and these funds have been segregated and
designated for specified activities including economic development and downtown revitalization.
NOW THEREFORE, be it RESOLVED by the Town Council of the Town of Pulaski, Virginia, sitting in
regular session on March 19, 1996, that:
Section 1. The amount not to exceed $13,000 from the Urban Development Action Grant Repayment Funds,
be, and hereby is, appropriated for expenditure, to be loaned to Hayes Office Supply for the purchase of
equipment and working capital for the new industry located in the Town of Pulaski.
Section 2. Said loans are contingent upon Hayes Office Supply upon the Town having a shared first position
on all inventory, accounts receivable, equipment (including vehicle), furniture fixtures, and general intangibles
used in the business now owned or hereafter acquired.
Section 3. The loan shall bear an interest rate of two-thirds of the prime lending rate at the time of loan
closing. The term for the equipment and working capital shall not exceed 5 years.
Sec i n 4. The disbursements must substantially be in conformance with the attached budget and in no case
may a category amount be exceeded without the prior approval of Town Council.
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Section 5. In addition to the terms previously mentioned, the borrower agrees to invest a minimum of
$25,000 and obtain a loan and line of credit from Community National Bank for the sum of $18,000.
Section 6. The Town Manager and Town Attorney are hereby authorized to draft, approve, and/or execute
appropriate loan documents not inconsistent with the terms of this resolution. Such documentation may
include appropriate provisions for the protection of Town, including but not limited to reservation of the right
of the Town to withhold payment or accelerate the maturity of indebtedness for good cause shown.
Section 7. Nothing contained herein shall be deemed a pledge of the full faith and credit of the Town, nor
shall it create a general obligation of the Town, nor shall any monies be loan from the General Fund of the
Town.
Section 8. This ordinance is effective upon adoption and is adopted by recorded vote of the Town Council of
the Town of Pulaski, Virginia, on this 19th day of March 1996 as follows:
John Johnston AYe Lane R. Penn Aye
Bettye H. Steger ~ W. Edgar Hale Aye
Roy H. D'Ardenne, Jr. Abstain W.H. Schrader, Jr. AYe
Alma H. Holston Aye Elbert G. Black Awe
TOWN F ULASKI, V GIN
By:
Andrew L. Graham, Mayor
Attest: `` I~
Ruth A. Harrell, Clerk of Council
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