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HomeMy WebLinkAbout02-13-1984 Industrial Development Corporation Board of Directors Meeting (2)~ ~ i Y AGENDA MEETING OF THE LA PORTE INDUSTRIAL DEVELOPMENT CORPORATION TO BE HELD FEBRUARY 13, 1984, IN THE CONFERENCE ROOM OF THE CITY HALL, 604 WEST FAIRMONT PARKWAY, LA PORTE, TEXAS, BEGINNING AT 7:00 P.M. 1. CALL TO ORDER 2. CONSIDER APPROVING THE MINUTES OF THE MEETING OF THE INDUSTRIAL DEVELOPMENT CORPORATION HELD DECEMBER 14, 1983 3. CONSIDER APPROVING APPLICATION FOR FINANCING FOR CONTECH ENGINEERING 4. CONSIDER PAYMENT OF BILLS 5. ADJOURNMENT • a MINUTES OF THE • LA PORTE INDUSTRIAL DEVELOPMENT CORPORATION DECEMBER 14, 1983 1. The meeting was called to order by Chairman Cline at 5:45 P.M. Members of the Board Present: Virginia Cline, Walter Springall, John. Longley, Jerry Dennis Members of the Board Absent: Lois Compton, Robert White, Jack Lawler 2. The Board considered issuance of Industrial Development Revenue Bonds for Fairmont Plaza Joint Venture. Motion was made by Walter Springall to approve issuance of Industrial Development Revenue Bonds for Fairmont Plaza Joint Venture. Second by John Longley. The motion carried, 4 ayes, 0 nays . C Ayes: Cline, Springall, Longley, Dennis Nays: None 3. The Board considered a resolution authorizing issuance of bonds and approving documents for Fairmont Plaza Joint Venture. Motion was made by Walter Springall to approve the resolution authorizing issuance of bonds and approving documents for Fair- mont Plaza Joint Venture. Second by John Longley. The motion carried, 4 ayes, 0 nays. Ayes: Cline, Springall, Longley, Dennis Nays : None 4. The board considered payment of legal fees. Motion was made by Walter Springall to table this item for further study. Second by John Longley. The motion carried, 4 ayes and 0 nays. Ayes: Cline, Springall, Longley, Dennis Nays: None Mr. Askins will review these bills for changes. 5. There being no further business to come before the Board, the meeting was duly adjourned at 5:57 P.M. • C Minutes, La Porte Industrial Development Corporation December 14, 1983, Page 2 Respectfully submitted: Jerry Dennis, Secretary Passed & Approved this the 13th day of February, 1984 Virginia Cline, President ~, ~r ~"IR ST ITY M First City Bank of La Porte DATE: RECEIVED FROM: THE SUM OF:_^- 19 ~ `~" FOR " - DOLLARS $ ~ G'C ~ `~ ~Z-~-nJ ~~ ~ - CHECK # l~ ~~ BY: ` ` ~~ i ~~We believe in you..." INDUSTRIAL DEVELOPMENT CORPORATION CITY OF LA PORTE a -,~ N0: f D ~ ~~ • •~ 7 _ CONTECH ENGINEERING February 1. 19@4 City Secretary, City of La Forte F. D. Pox 111 La Porte. TX 77571 Gentlemen: Attached for the consideration of the City of La Forte Industrial Development Corporation are two copies of our application for financing for our new home office facility here in La Forte. ~; We will appreciate the opportunity to ma4;e a presentation of our plans at the next regularly scheduled meeting of the Poard of Directors of the Gorporation. If in the meantime you have questions or require additional information, please give us a call at 711!471-BuiC~. Yours truly. CONTECH ENGINEERING. ING. ~~lihi~ - ~'''(/ I~ Charles R. Gipson } CRG:wp ` cc: t4nox W. AsE;ins -, .i __ CONTECH ENGINEERING, INC. P. 0. Box 923 La Porte, Texas 77571 (713) 471-8010 ~ CITY OF LA PORTS INDUSTRIAL DEPELOPPIENT CORPORATION - (a nonprofit corporation) APPLICATION FOR FINA:\CING The purpose of this application is to present to the City of La Porte Industrial Development Corporation (the "Corporation") a reasonably comprehensive outline of the project (the "Project") for which financing is being requested. Fill in all blanks, using "None" or "Not Applicable" where necessary. If additional space is needed, attach separate sheets as exhibits. The completed application, with supporting documents, is to be submitted in duplicate to the City Secretary of the City of La Por.te., Texas, at the following address: City Secretary, City of La Porte, Texas, 604 hest Fairmont Pk~,y. , P.O. Box 1115, La Porte, Texas 77571 Re: Application for Industrial Development Revenue Bonds. In addition, one copy of the completed application should be submitted to counsel to the Corporation, Knox 1~'. Askins, J.D., P.C., 702 ti'est Fair- mont Pkwy., P.O. Box 1218, La Porte, Texas 77571. At the time this application is submitted a non-refundable application fee must be paid to the Corporation as follows: if the amount of financing applied for is equal to or less than $500,000, then the fee is $500; if the amount of financing applied for is greater than $500,000, then the fee is $1,000. i ~ All applications for financing must be submitted to the Corporation for review and recommendation at least one (1) week prior to a meeting of the Board of Directors during which action upon said application will be taken. 1 1. General Information ' a. Legal name, address and telephone number of Applicant. Contech Engineering, In,c. P.O. Box 923, 110B North Bgroadwpoay b. Sta~e Poo~ti~icorpora~ioi~ or1 o)th7er 8fo~m of organization or as- sociation. Texas Corporation c. Re istered agent for service of process for the Applicant. ~harles R. Gipson 110B North Broadway La Porte, TX 77571 (713)471-8010 d. Person to whom questions and correspondence should be directed. Charles R. Gipson 110B North Broadway La Porte, TX 77571 (713)471-8410 r CI?'~~ OF LA PORTS I\DI;ST:~T.:~L DE~'ELOP;SE\T CORPOR9TI0\ Application for Financing Page 2 e. Kame, address and telephone ^~c~ber of counsel for Applicant '(this does not mean bond counsel;. Knox W. Askins • 702 West Fairmont Pkwy, P.O. Box 1218 La Porte, TX 77571 f. Dame, address an telephone numbe- of accounting firm. Mendelovitz & Attemus, P.C. Three Park West Plaza Baytown, TX 77520 (713)424-4545 ' g. Dame, address and telephone r.•~ber for bond counsel (if one has been chosen). Bob Casey, Jr. Bracewell & Patterson 2900 South Tower Pennzoil Place Houston, TX 77002 2. Description of Project a. Amount of financing applied for: $400,000.00 b. Total cost of Project: $400,000.00 c. Brief narrative description of ~~e Project including c.*hether land acquisition is included anc she major components of the Project, the estimated number and type of new jobs to be created in the City of La Porte ~~ the Project and the annual payroll of emplo}'e es working at t e Project. Contech proposes to construct a new home office facility on 81,500 square feet of land located in La Porte on the west side of Broadway about 250 feet south of Wharton-Weems Road. Land acquisition is included in the project and the major components are a 7,020 square foot building and 16,000 square feet of paved parking area. We estimate the creation of 20 new jobs in the City of La Porte by the end of 1984. This will bring Contech's total employment to 50 with an annual payroll of $1.8 million. r ~r t Ci i : Ut Ly rUhYE 1\DUS"I'Ki aL DEVELOP^1E\T CORPORATION' Application for Financing Paoe 3 d. If the Applicant is relying on the "small issue" exemption as the basis for the interest of the bonds being exempt from -- federal income taxes, complete and attach to this application the Industrial 'Development Bond Financing Questionnaire attached to this application as Exhibit A. Any questions in this regard should be addressed to bond counsel (if known). 3. Financial Arrangements a. Summarize the financing arrangements as planned as of this date including name and address of the financial institution(s) (bank, investment banking firm, etc.), if determined, which may be interested in purchasing the bonds if and when such bonds may be approved for sale: (It is the responsibility of the Applicant to arrange for the marketing of the bonds if the financing is approved, with the Corporation's concurrence.) ~ Bayshore National Bank, La Porte, Texas, has expressed an interest in purchasing bonds. b. If the Applicant has credit rating, please state the rating and agency: Dunn & Bradstreet Rating: DD2 c. Explain how the Project will be financed if all or a portion of the amount of the financing applied for herein is denied: Conventional financing will be sought. 4. Financial Statements a. Attach most recent Form 10-K to the Securities and Exchange Commission, together faith the most recent Form 10-Q. OR 1. A brief description of the form of organization and organizational structure, including parent, subsidiaries and affiliates; and 2. A brief statement of the history and type of business engaged in; and 3. The names and ages of executive or managing officers and directors and a brief account of all business experience of each such officer or director, including his principal occupations and employment and the name and principal r'~ -~-e • 'r 1 CITE' OF LA PORTS INDUSTRIAL DE~~LOPMENT CORPORATI023 Application for Financing Page 4 business of the corporation or other organization in ' which such occupations and employment were carried on; - and, 4. Audited financial statements (or if audited financial statements are not available, unaudited financial state- ments) for each of the three preceding fiscal years. ' b. Detail changes or events subsequent to the date of the most ' recent financial statements (including but not limited to pending or threatened litigation, claims, assessments, commit- ; ments, subsequent information regarding uncollectibility of receivables, valuation of assets, changes in corporate struc- ture or statements of prior period financial statements) which may have a material effect on the Applicant's financial position: No such changes or events. 5. Agreements of Applicant ~! ~.~ a. Indemnity: By its execution of this Application, the Applicant agrees that it will at all times indemnify and hold harmless the Corporation, the Board of Directors of the Corporation, the City of La Porte, Texas (the "Unit"), the City Council of the Unit and any of the officers, directors, employees, agents, servants and any other party acting for or on behalf of the Corporation or the Unit (such parties being hereinafter referred to as the "Indemnified Parties") against any and all losses, costs, damages, expenses and liabilities (collectively herein called "Losses") of whatsoever nature (including, but not limited to, attorneys' fees, litigation and court costs, amounts paid in settlement and amounts paid to discharge judgments) directly or indirectly resulting from, arising out of or relating to one or more Claims, as hereinafter defined, even if such Losses or Claims, or both, directly or indirectly result from, arise out of or relate to, or are asserted to have resulted from, arisen out of or related to, in whole or ~ in part, one or more negligent acts or omissions of the In- demnified Parties in connection with the issuance of the Bonds or in connection with the Project. The term "Claims" as used herein shall mean all claims, lawsuits, causes of action and other legal actions and proceedings of whatsoever nature, . •C • 1 CITl OF LA PORTS IA~i;Si:~I=.. DE~~LOPPIENT CCRPORATiO'~ Application for Financing Page 5 including but not limited to claims, lawsuits, causes of action and other legal actions and proceedings, involving ~- bodily or personal injury or death of any person or damage to any property (including, but not limited to, persons employed by the Corporation, the Unit, the applicant or any other person and all property owned or claimed by the Corporation, the Unit, the Applicant, any affiliate of the Applicant or any other person) or involving damages relating to the issuance, offering, sale or delivery of the Corporation's bonds to finance the Project (the "Bonds") brought against any Indemni- fied Party or ~:aich any Indemnified Party is a party, even if groundless, false or fraudulent, that directly or indirectly result from, arise out of or relate to the issuance offering, sale or delivery of the Bonds or the design, construction, installation, operation, use, occupancy, maintenance or owner- ship of the Project or any part thereof. None of the Indemnified Parties shall be liable to the Appli- cant for, and tie Applicant hereby releases each of them from all liability tc the Applicant for all injuries, damages or destruction of all or any part or parts of any property owned or'~claimed by the Applicant that directly or indirectly result from,. arise out of or relate to the design, construction, operation, use, occupancy, maintenance or ownership of the Project or any part thereof, even if such injuries, damages or destruction directly or indirectly result from, arise out of or relate to, in whole or in part, one or more negligent acts or omissions of the Indemnified Parties in connection with the issuance of the Bonds or in connection with the Project. Each Indemnified Party, as appropriate, shall reimburse the Applicant for payments made by the Applicant to the extent of any proceeds, net of all expenses of collection, actually received b}* them from any insurance with respect to the Loss sustained. Such Indemnified Party, as appropriate, shall have the duty to claim any such insurance proceeds and the Indemni- fied Party, as appropriate, shall assign its respective rights to such proceeds, to the extent of such required reimbursement, to the Applicant. In case any action shall be brought or to the knowledge of any Indemnified Party, threated against any of them in respect of which indemnity may be sought against the Applicant, the Indemnified Party shall promptly notify the Applicant in writing and the Applicant shall have the right to assume the investigation and defense thereof, including the emplo}Rnent of counsel and the payment of all expenses. The Indemnified Party shall have the right to employ separate counsel in any such action and participate in the investi- ~~~ • ~ r =-'~ CITT OF LA PORTS INDUSTRIAL DEVELOPPIENT CORPORATION Application for Financing Page 6 gation and defense thereof, but the fees and expenses of such counsel shall be paid by the Indemnified Party unless (a) the employment of such counsel has been specifically authorized by the Applicant, in writing, (b) the Applicant has failed to assume the defense and to employ counsel or (c) the named parties to any such action (including any impleaded parties) include both an Indemnified Party and the Applicant, and said Indemnified Party shall have been advised by such counsel that there may be one or more legal defenses available to it which are different from or additional to those available to the Applicant (in which case, if the Indemnified Party notifies the Applicant in writing that it elects to employ separate counsel at the Applicant's expense, the Applicant shall not have the right to assume the defense of such action on behalf of such Indemnified Party, it being understood, however, that the Applicant shall not, in connection with any one such action or separate but substantially similar or related actions in the same jurisdiction arising out of the same general allegations or circumstances, be liable for the reasonable fees and expenses of more than one separate firm of attorneys for the Tndemnified Party, which firm shall be designated in writing by said Indemnified Party). The Indem- nified Party, as a condition of such indemnity, shall use its best efforts to cooperate with the Applicant in the defense of any such action or claim. The Applicant shall not be laible for any settlement of any such action without its consent but, if any such action is settled with the consent of the Applicant or if there be final judgment for the plaintiff in any such action, the Applicant agrees to indemnify and hold harmless the Indemnified Parties from and against any Loss by reason of such settlement or judgment. b: Fees and Expenses: Applicant agrees to pay all reasonable and necessary costs, expenses and fees incurred by the Corporation in connection with the issuance of the bonds or in connection with the Project, including but not limited to the out-of-pocket expenses incurred by the Corporation's personnel; fees for legal services and out-of-pocket expenses of the Corporation's General Counsel and any special counsel (such legal services to be charged at the normal hourly rate multiplied by the number of hours spent); fees and out-of-pocket expenses for consulting advice of the Corporation's consuling engineers; '* fees and expenses required in connection with the underwriting or placement of the Bonds; fees and out-of-pocket expenses of Bond Counsel; fees and out-of-pocket expenses of the trustee; all recording costs; Blue Sky and legal investment survey costs, rating agencies; fees and printing costs; and all i DEb~LOPPfE:v'T CORPOR~TIO` Application for Financing a • incidental ea-pe~ses, costs and charges relating to the Project and the issuance of the Bonds not enumerated above. The Corporation ~:il'_ upon request provide or cause to be provided to the trustee uder the indenture of trust and/or the Applicant any data or in~~rmation which may be reasonably required to verify any o= :~e costs and expenses and fees enumerated above. With =es?ect to the costs, expenses and fees enumerated above, the Ap?1_cant shall at the Corporation's request advance on a monthly basis the amounts incurred by the Corporation pending reimbursement out of the proceeds from the sale of the Bonds. To the extent that the costs, expenses and fees enumerated above are not or cannot be paid or reimbursed from the proceeds of the bonds or if bonds are not issued, the Applicant sha'_1 ?ay the same. In addition, at the Mme the Application is forwarded to the Texas Industrial Commission, tie __-'.pplicant will be required to pay to the Texas Industrial Commis_io. a $1,500.00 application fee on behalf of the Corporation as required b;- the Texas Industrial Commission's Industrial Revenue Bond Program Rules. t. The undersigned ve:i'ies that he is duly authorized to submit the foregoing application ca behalf of the Applicant and that the foregoing information is true and ce_rect to the best of his knowledge and belief submitted on the ~sr cay of F~'f.~~Z(//~l~y , 198 Applicant B ~~.~:~~ i y Title • - r'ebruary 1 , lytS4 1 . INDUSTRIAL DEL~,LOPNtSNT BOND FINANCING }} .- QUESTIONNAIRE 1 . 1. A. Name, address and employer identification number of - the entity .(the ~~'rriiicipai usct" ) that will purchase or lease the Project to be acquired or constructed • with the proceeds of the bonds. Contech Engineering, Inc. P.0. Box 923 110B North Broadway i La Porte, TX 77571 I Employer Identification No. 74-2186548- _ B. Form of organization of Principal User (check one): .. x corporation partnership sole proprietorship, .~- 2. List the name and address.of any entity which, actually or constructively, is owned more than 50% by the Princi- pal.User. In addition, list the name and address o-f-any person and entity which, actually or constructively, ~ owns more than 50% of the Principal User. List all o-ther entities in which such "more than 50%" owner actually or constructively has a greater than 50% ~ interest and all family members (i.e., brothers and sisters, husband and wife, ancestors and lineal descendants) of such."more than 500" owner. If the Principal User is not a partnership, list any partner- ship in which such "more than SO o" owner has any actual or ccnstructive interest. If the Principal User is a part^.ership, list the name and address of all the part- ! recs. List all other entities in which any partner in the Principal User has a greater than 50% actual or constructive interest and all family members (as des- cribed above) of any partner. (The person and entities required to be lasted should be considered "Related Persons" to the Principal' User for purposes of this questionnaire.) ~ . More than 50% Owner: 228rJeffersonpson La Porte, TX 77571 . Bryn ,Gipson, Wife Mark Gipson, Son •C • l 3. Location of roject: - p ~- Incorporated Township Address Mu_*~icipality if any County . Not Assigned La Porte Texas NfA Harris • * Frontin on and west of Broadwa 250' south of Wharton-Weems Road. S Y The Incorporated Municipality or the County (if the Project is in an unicorporated area) in which the Project is located will be referred to as the "Politi- cal Jurisdiction." Please indicate whether the Project site is, (a) entirely within an incorporated municipality, . (b) entirely within the unicorporate-d area of the county or (c) partially in each. If there•is any _ question_as to the location of the•Project site, please so indicate. _ Entirely within an incorporated municipality. 4. Provide the following information regarding previous - tax-exempt financing used to finance the Project or any other facilities used by the Prri~ipal User or Related Persons wholly or partly within=the Political Jurisdiction. - J ~• Amount Outstanding Amount'of as of Estimated Date Date of Issue Issue '~ of Issue of the Bor_ds NONE f 4a. Please list all tax-exempt financings in the past year and all tax-exempt financings°currently being considered. in which the Company has or will be a user of the facili- ~ ties being fina_*~ced with bond proceeds. • NONE 5. Is the Project Site part of an industrial park that has been financed with tax exempt bonds? .. r - NO 6. Were or will any of the utilities for the Project site • (gas, electricity, water, sewage, telephone) be provided : • by a public utility or a State or local government unit?' How will they be paid for by the Principal User? Yes. Utilities will be paid directly by the Principal User. - --- - . ~._ - ---- -r--._ .._ - - ~ - - - - • --. _ . i i ! = i - 1 7. Is t_he Project site owned or leased by the Principal User? No. A . I f owned: N/A Date o~f optior. contract P.mount of option payment Date of purchase (i.e., closing date) Purchased from Purchase price Amount of mortgage Mortgagee - B. If leased: N/A - Lessor Date of_ Tease - Terms Is. there an option to purchase? - C. If Principal User does not now own the Project Site, but has an option to~purchase the site, please state: N/A ~- ' Date option-agreement signed _ with owner Amount of downpayment or - option payment Purchase price.' Estimated purchase date (i.e., closing date) D. Will all of the property purchased or leased be used for the project? YEs If not, give number of acres that will be used for Project N/A Is there any relationship legally or by virtue of common control - betaeen the Principal User and the seller of the Project Site? No - r _ 8. Describe the Project. (Number and size of buildings, equipment, expected use, etc.) 81,500 Square Feet of Land 7,020 Square Feet Office Building 16,000 Square Feet Paved Parking Area To be used for engineering and related services. _~_ ,~ ~-+~ 1 9. What is the expected date of issuance of the bonds? August 1, 1984 I 10. Expected use of bond proceeds: . ~ ~ Paid or incurred Paid or incur ' ~ ~ ~ ~ ~ ~ ~~ ~ ~ prior to expected after expecte issue Sate cf issue • date of _ Item Bonds Bonds Engineering $ 5 00o S Architecture 7.000 Building (s ) 211, o00 Machinery and Equipment 17 . o00 Land Acquisition (including legal and title fees ) 90,000 • Site Improvement 40.00.0 Capitalizeable interest and 20,000 taxes _ Issuance expenses 10,000 Underwriter's discount • . or placement agent's fees - TOTAL - ~40~ , 000 .. - I W' , 11. ill any of the bond proceeds be used for other than the acquisition, construction, reconstruction or imp=ovement of land or depreciable property? [Acquisi- .~ tion, construction, reconstruction or improvement of land or depreciable property includes, among others, the following: (a) modifying and installing equipment moved from another location and (b) the acquisition of stock of a corporation if the corporation is liquidated and the tax basis of the corporation's assets is stepped up to the acquirer's basis in the stock under IRC § 334(b)(2). Representative examples of the use of bond proceeds for other than the acquisition, con- struction, reconstruction or improvement of land or . depreciable property include, among others, the following: (a) financing working capital or inventory; (b) refinancing an existing mortgage or outstanding loan; or (c) moving of existing equipment from one of the Principal User's (or Related Person's) other . facilities to the Project.] Yes. Relocation of office equipment from Contech's existing facilities.. _d- • •~ • i 12. Lisp actual and reasonably tunes (not including those the bond proceeds) paid or re=pest to the Project. (, .. whe t~:er or not made by the Perscz, must be included.) expected capital exre^di- expenditures funded cut of incurred by anyone Wi j~.h - ~11 capital expenditures, Principal User or a :.elated Paid or Incurred in Three Years Prior to Ite*~s Date of Issue of Bonds Paid or Incurred in Three .ears After and Including Date of Issue of Bonds Organizat_onal - ExDenCi t'.:~eS None None Engine~ri^g Archi tec ~::. e _ Research ~.^_d - • Develc~r..ent Building(s) MacZinerv end EcuiD^e~~ - Land ( ircluCi ng - decal an - title fees ) Site Im~rcvement - CaDitalizE?ble _ _ Interest and -_ Taxes Bond Issua_ZCe Exner_ses Unde?-w~ri te= ' s Di scou_~t or Placeme*:t Agent' s ~ ee Other Total $ IVon~ S None Exre__^_ditures are capital expenditures if they a:e prcperly chargeable to the capital account or may be capi~alized under any provision of the Internal Revenue Coce. Attached as Exhibit "A" is a memorandum which sets out examples of capital and non-capital ex~endi- tures. 13. What capital expenditures (other than those for the ?rciect as listed in Paragraph 10 and 12 or thcse fira::ced with bonds listed in Question 4) have been or -~- • ~ • r- will be paid or incurred within the 6 year period described in Question 12 within the Political Jurisdiction for property used in connection with other _, facilities to be used by the Principal User or a ~. Related Person?.[All capital expenditures, whether or not made by the .Principal User or a Related Person, must be included (e.g., if the Principal User or a related person leases space in another building within ' _, the Political Jurisdiction, any capital expenditures by the lessor for the leased property made or to be made within the 6-year period must be included).] None 14. A. If any equipment or other facilities to be used in connection with the Project will be leased, please describe such items. Also, describe the lease terms and include a copy of the existing or proposed lease if available. B. If any equipment will be moved from another location, please describe. Office Furniture, Office Equipment, :and Minor Supplies ~- 15 . Type o f _ Work - Date Begun Site Clearan;,e None yet. Foundation Buildings 16. On what date .was official action taken by the Develop- ment Corporation that will issue the bonds? None yet. 17. What costs have been paid or incurred on the Project prior to the date in 16. above? Please state to whom such expenditures where made and the purpose of such expenditures. _ None 18. On what date were contracts entered into for fabrica- tion of major components of the Project or for con- struction of the building(s) for the Project? None -E- . •~ • On what date did fabricaticn, manufacturing or construc- tion begin? We expect to begin!,about March 1 , 1984. 19. If any part of the Project will be leased to ot~er than the Principal User, please indicate: . (a) total s~sare footage of Project: N/A (b) Amount to be leased to each tenant (if mo=~ than 10% in space or in value). N/A 20. A. On what date will the development and const=uction work with respect to the real property in connec- tion wits the Project be completed? . July 15, 1984 B. On what date will the personal property in ccnnec- tion with the Project be installed or Lir_=t put into use by the Principal _User, whichever is later. July 3~] , 1984 . _ ~. a/81 ~_~ • • ~~ -\ ~~ Exhibit A Treas. Reg. §1.103-10(b)(2)(ii)(e) - Capital Expenditures "Section 103(b)(6)(D) capital expenditures" are ~~ defined in Treas. Reg. §1.103-10(b)(2)(ii). That regulation. states for an expenditure to be a "Section 103(b)(6)(D) capi- tal experditure'~, inter ali a, it must be properly chargeable to the capital account wiTthout regard to any rule of the •- Internal Revenue Code which permits the expenditure to be treated as a current expense or it must be able to be capi- talized under any rule or election under the Code. The following are representative examples o= ex- - _ penditures which, within the meaning of Treas. Reg. §1.103- . 10(b)(2)(ii)(e), are properly chargeable to the capital account or may be capitalized under the Code: . .. 1. Costs allocable -to the accrui sition, cor_structi on, or erection of buildings, machinery and ea•uipment, furni- tune ar_d fixtures, and similar~p.~operty having a usezul life substantially beyond the taxable year. See Treas. _ Reg. §1.263(a)-2(a). See also Addressogra~h-Multigraph Coru., 4 T.C.M. 147 (19x5) (legal fees paid to acquire assets in a reorganization must be capitalized); Missis- •~ S1DD1 Vallev Trust Co. v. U.S., 61 F.Supp. 451 (E.D. Mo. 1945), rev'd on other issues sub nom. Bueltermar~ v. U.S., 155 F.2d 597 (8th Clr. 1946) (appraisal costs paid nor possession of premises must be capitalized); Southeastern Express Co., 19 B.T.A. 490 (1930), acQ. as to issue 1, X-1 C.B. 61 (1931) (one-half of corporate general coun- sel's salary. representing time spent in connection with organization of a corporation must. be capitalized). 2. Interest on a cor_struction loan, interest on a loan to purc:~ase real property, interest on a loan to purchase, transport, or install personal property, and interest on a mortgage of unimproved and unproductive real pro- perty and other items (including certain taxes and insurance payments) permitted to be capitalized under Section 266 of the CodeTand the regulations thereunder, even `hough deducted as expenses or. principal user's tax return. Rev: Rul. ~ 75-135, 1975-1 C.B. 43; Rev. Rul. 77-262, 1977-2 C.B. 41 (amount of capital ex~endi- • tunes not offset by income from investing proceeds • •~ i i i i a l during the te:~porary period). See also Treas. Reg. §1.256-i(b)(1)(iv) (taxpayer permitted to capitalize - "any ot~-~er taxes and carrying charges with respect -to - property, whic:Z in .the opinion of the Commissioner, are, u deg scund accounting principles, chargeable to CaDitx~ aCCOUnt"). 3. Issux_nce costs (underwriting fees, legal fees, printing • costs, ~ etc. ); but, of course, only if paid. other than out of -the bond proceeds. Rev. Rul. 77-23x, 1977-2 C.B. 39. a. P.mou^ts extended for securing a copyright and plates that remain the property of the person making the pay- ments. See Treas. Reg. §1.263(x)-2-(b). 5. Cost of defending or-perfecting title to property. See Treas. Re;. §1-263(x)-2(c). 6. F.~~cunts expended .for architect's services. See Treas. . Reg. §1.263(a}-2(d). ~~ 7.~ A corporation's cash acquisition of stock of another coracrati on followed by a licruia.ation of the acquired _ co~ora~ion to which Section 334(b)(2) of the Code ap- plies is in substance an .acquisition of underlying as- sets, and, therefore is a capi~i expenditure with re- . spect to the acquired corporation's facilities to the exter_t of the percentage of the corporation's fixed assets located in the county (or incorporated munici- pality). The capital expenditure, however, is reduced by t~.e amount expended by the acquired corporation from proceeds of an outstanding prior small issue for depre- ciable tangible assets located in the county (or incor- porated municipality). LTR 7916021. 8. Co~-nmissions paid in purchasing stock as described in "6." abov_. S=-° '"rea_=. Reg. §1.263(x)-2(e). 9. 10. Cost of goodwill or a covenant not to compete in con- nection with the acquisition of the assets of a going concern. Rev, Rul. 81-56, 1981-8 I.R.B. 7'; Rev. Rul. 81-55, 1981-8 I.R.B. 6. See Treas. Reg. §1.263(x)-2(h). TraCema_k xnd tradena.*~e •expenditures even ~~.hough amor- tizable under Section 177 of the Code. n 1 1. Cost of railroad rolling stock ever_ if amortizable under Section 184 of the Code. 12. Advertising costs which result in the acquisition of an . asset having a useful life substantially beyond the taxable year. See A. V. Simonson, 5 T.C.M. 718 (1946) . (cost of a promo tonal film not currently deductible). 13 . -Cost of trucks based at a trucki rg terminal facility with respect to the terminal facili ~y. Treas. Reg. § 1.103-10(f), Example (11). Comoare Rev. Rul. 80-12 (expenditures for trucks are not capital expenditures because they are not allocable to any specific facil- ity). 1?. Expenditures for ee•uip~ment or machinery which is moved into the courty or municipality wit_^.i n three years of _ _ the bond ~i ssue; however, -only- if ~'~.he expenditures for the ec~uip~ent are made within the six-year period. Treas. Reg. §1.103-10(f), Example (12). ~- 15 . Cost of molds used to manufactuwe c~~stom plasti c pro- ducts with respect to the manuf~c tort ng fact lity, re- gardless of whether the manufac-»rer or the customers . take title to the molds, if the molds have a useful . life substantially beyond the end of L~.he taxable year. Rev. Rul. 77-224, 1977-1 C.B. 25~ 16. If the principal user of a facility orders equipment for•the facility from a manufacturer, expenditures paid or incurred by the manufacturer are considered to have been incurred concurrently by the principal user. The amount which must be taken into account as a capital expenditure is determined by multiplying (a) the total purchase price payable for the equipment by the prin- cipal user times (b) the percentage of the manufactur- er's total expenditures paid ~withir. t~-lree years of the bond issue. Rev. Rul. 78-347, 1978-2 C.B. 101. See also Rev. Rul. 7c-485, 1974-2 C.B. 32 (capital expendi- tures by construction contractor attributed to prospec- tive owner .of building). Note that merely placing the purchase order or entering the construction contract does not incur any capital expenditu_e by itself. . - r - 17. Cost of timber incurred under a pay-as-cut timber con- tract when the timber is cut. Rev. Rul. 76-132, 1976-1 C.B. 16. _ ~ ~ l8. Cost of mobile buildings for use as temporary offices even though the mobile buildings later are sold to un- - - related parties. Rev. Rul. 75-208, 1975-1 C.B. a6. 19. Research and experimental expenditures (including com- puter software,.Rev. Proc. 69-21, 1969-2 C.B. 303) allo- cable to facilities where mer_~~fact•~r= ng will occur even though deducted as expenses. Rev. Rul. 77-27, 1977-1 C.3. 23; LTR 8052071. See Rev. R•11. 77-253, 1977-2 C.B. ~0. See also LTR 802136 (definition of research and experimental expenditures). 20. Circulation expenditures even though deductible under Section 173 of the Code. 2l . Ir_tangi ble dri lli ng comets even though dedi:cti ble under Section 263(c) of the Code. 22. Cost of property obtained under a lease which is treated as a sale for federal income tax-uurooses. Treas. Rec. - § 1.103=10 (b) (iii) ; Treas . Reg. §1..103-10 (f ) Exa.*~ple 13 . - -~ 4 23~. Assu.~notion of liabilities in connection with the pur- chase of property. See Crane v~:- Com_missi over, 331 U.S. 1 (197). 2~. Organizatior_ expenditures of a corporation or a pzrt- nership, even though amortized under Sections 2~8 or 709, respectively, of the Code. But see LTR~801a111 (organization expenditures not pa a or r_curred with respect to facilities in the city in which the financed facility is located and, therefore, not Section 103(b) (6)(D) capital expenditures). 25. Interest prepayments of a cash (or accrual) basis tax- payer. See IRC §461(g). 26 . In t_~,e case of an individual ( including a partner) , a subchapter S corporation or a personal holding company, real property and construction period interest and taxes required to be capitalized under Section 189 of the Code. 27. Cost of real property including water rights, ease- ments (see Rev. Rul. 80-100, 1980-1 C.B. 25) and the net cost of demolition of an existing building (LTR 802079). - i ~~~ 28 . Origination fee in cor~-:ection wi'~.h a lease . - 29. Fair market value of property given up in Section 1031 like-kind exchange. 30: Expenditures~to retire a portion of a prior exempt small issue; however, only to the exter_t pai d or in- curred within the six-year period. Treas. Reg. • --§1.103-10(f) Example 10; Rev. Rul. 76-98, 1976-1 C.B. 31. The following are representative examples of ex- penditures which are not "Section 103(b)(6)(D) capital ex- penditures": 1. Administrative costs, overhead, and wxges~(unless allo- cable to the acq-uisi~ion, cor_struction, or erection of property described in "1.~' above): 2. Cost of incidental repairs or maintenance. See Treas. Reg. §1.263(x)-1(b). ~-~ _ .f 3.' Cost of property which would properly be included in inventory if on hand at the erid~of the txxable yexr [i.e., direct inventory costs]. LTR 8015025. See IRC §§1221(1), 1231(b)(1)(A).~ • a. Purchase of cash, accounts receivable and prepaid expenses. LTR 8015025. 5. host of property held primarily fcr sale tc customers in the ordinary course of a trade or business if not used in the trade or business until sold. See IRC §§1221(1), 1231(b)(1)(B); Rev. Rul. 62-lal, 1962-2.C.B. 182. 6. Cost of supplies (defined as property which does not have a use~'ul li **"e substxntially bevond the taxable year when aca~uired). . 7. Periodic rent payments under a true lease for federal income tax purposes (Rev. Rul. 77-353, 1977-2 C.B. aa); but lessor's expenditures for the leased item are capi- tal expenditures' if made within the six-year period unless the leased-item is described in "7." below. -~ C 8. Cost to the lessor of personal property leased under a. true lease for federal income tax purposes either from ._ the manufacturer or from a person in the trade or'bu~si- ness of leasing similar property provided, pursuant to .. .general business practice,. property of this type ordi- narily is the subject of a lease. Treas. Reg. §1.103- - 10(b)(2)(iv)(b}; LTR 7925037. However, if ~;. t'rin- ~ -cipal user of a facility purchases the personal prop- erty within three years of L~he bond issue, sells it to a leasi*~g company, and re-leases it, a capital extiendi- ture was incurred on the occasion of the purchase in ' the amount thereof regardless of the subsequent sale and re=lease. Rev. Rul. 79-2a8, 1979-34 I.R.B. 5. But see Rev. ~tul. 80-162, 1980-25 I.R.B. 5 (no actual pur- chase even though purchase order submitted and down payment made). In addition, expenditures by the ground lessor wiL~.h respect to the facility on the leased ground - are capital expenditures; - but,' of course, only i f made . within three years of the date of the bond issue. LTR 7fi3301S; LTR 7951067; LTR 8011062. _ 9. I_=seance of stock or securities :for property in a tax- .~ free incorporation or other exchange under Section 351(a) of the Code. Treas. Reg:~§1.103-10(b)(2)(v)(c). If Section 351(a~) applies to a transfer during the 6- year period surrounding the date of issue, ar_d if, with respect to the property transfe-rred, expenditures made within such period would have been Section 103(b)(6~"(D) capital expenditures if the transferor and the trans- feree corporation had been related persons for such period, then such expenditures shall be considered to be Section 103(b)(6)(D) capital expenditures made by the transferee corporation. In addition, if a trans- feror and tra_*~sferee are related persons immediately following such transfer, such transferor and transferee shall also be treated as having been related persons for the portion of such 6-year period preceding the date of suc:~ transfer. Treas. Reg. §1.103-10(b)(2) (~) (d) . : ur thermore, the purchase by the shareholder or security holder of such property is a capital expen- diture if made within the 6-year period. 10. Exchange of consideration for assets in a tax-free re- organization or ~iguidation which qualifies under Sec- tion 381(a) of the Code (relating to carryover of tax attributes}; but the transferor and transferee are treated as related throughout the portion of the six- • '` • ~- _...! year period preceding the date of exchange. Treas. Reg. §1.103-10(b)(2)(v)(a), (b); Treas. Reg. §1.103-103- 10(f) Example 17 ("A" reorganization with boot). 11. Exchange of stock in a tax-free "3" reorganization; but the parent and subsidiary are treated as related through- out the six-year period. Rev. Rul. 75-~11, 1975-2 C.E. al, 12. A corporation's cash purchase of 100 percent o= the stock of another corporation (which later finances a facility with tax-exempt bonds) which will not be liqui- '' dated within two years, but which will be operated as an autonomous subsidiary of the acrn:iring corporation. The corporations will, however, be. treated as related parties throughout the-six-year period at least if they are related on the date of the issue. LTR 8008136. 13. Issuance of a partnership interest_in tax-free exchange under Section 721 of the Code for property, at least where •the partner purchased the: property more than 3 years before the- issuance of the bonds. Rev. Rul. 4 • 77-146, 1977-1 C.B. 2~. ~- 14. If the present owner purchased the facility within the six-year period; the purchase price is a capital ex- pendi tune, but the prior owner'-s~ capital expenditures • with respec~: to the facility may be disregarded to t_he ,~ extent they are reflected in the purchase price. Rev. Rul: 76-427, 1976-2: C.B. 28. See LTR 8011062. 15. Ccst to replace property damaged or cestroyed by fire, sto ^t, or other casualty to the extent not in excess of the fair market value (determined i~-znediately before the casualty) of the property replaced. Treas. Reg. §1.103-10(b)(2)(iv)(c). 16. Exnenditu=es b_v a Section 501(c)(3) charitable organiza- tior. for cha_ita:o le activities are not Section 103(b) (b)(D) capital expenditures for purposes of a related person's small issue financing of an unrelated facility. Rev. Rul. 74-289, 1974-1 C.B. 32. See LTR 8011062. 17. Expenditures by ~ political subdivision paid or incurred in carrying cut its statutory purposes are not Section 103(b)(6)(D) capital expenditures fcr purposes of a ~ srr.all issue financing of an unrelated facility. LTR •- 8012090. • ~` • r- ~?~ i i 18. Ex~enditu.es by a public utility which is not the prin-. cipal user .of the bond-financed facility wiy~.h respect to property of such company or by a Stzte or local go~- ernmental unit with respect to `she property of such ..unit, . if the following ..conditions are met: (i ) Such proper~y is used to provide gas, water, sewace disposal se~ ~ires, electric energy, or telephone ser-~icas; ( ii ) such property, though installed in or corrected to the facility, is not an integral part of the facility such that tiie cost of such property is ordinari lv included as part of the acrn.:isition, construction, or+reconstruc- tion cost of such facility; and (iii) such property is of a type normally paid for in the form of periodic fees based upon time or use. Trews Reg. §1.103-10(b) (2)(iv)(a)• _ 19. Cost of moving equipment or machinery (including removal and i rstallati on costs? ) except for taxes and Carr~;ing charges which may be capitalized under Section 250 of the Code. See Eastern. Shoe Manufactur_nc Co: 8 B.T.A.'•1169~(1927), acc., VI3-1:C.B. 9; Adcressoc?=a~h- h:ulticrach Corte ,~ a T.C.M. lc7 .(195). 20. Theoretical interest of a taxpayer. using his own funds. See Treas. Reg. .§1.266-1(b)(1)(iv). seal •~ • CONTECH ENGINEERING ir~C. BALANCE SHEET SEPTEMBER 30i 1983 ASSETS CUF2RcNT ASSETS CASH ACCOUNTS RECEIVA3LE NOTES -2ECEIVABLE TOTAL CURRENT ASSETS FIXED ASSETS LEASEHOLD IMPROVEMENTS FURNITURE 6 FIXTURES EQUIPMENT TRANSPORTATION EQUIPMENT COMPUTERS ~ SOFTWARE 97384.63 160171.23 17.428.97 5.044.21 12069.40 14015.88 27109.96 5.836.24 .. ti4~075.69 LESS ACCUMULATED-DEPRECIATION 23.939.00 TOTAL FIXED ASSETS. ACCOUNTS,'PAYABLE- .UNEMP. TAXES 428.22 ACCRUED.FEOERAI.''`-INCOME TAX 37365.00 NOTES PAYABLE-'CURRENT 5626.90 TOTAL CURRENT LIABILITIES TERM LIABILITIES NOTES PAYABLE 9.528.77 ~, TOTAL. TERM. LIABILITIES. OTHER LIABILLTIES DEFFERRED :INCOME.: 160171..23 TOTAL iOTNER. LIABILITIES . , ~. . TOTAL LIABILITIES STOCKHOLDERS EQUITY COMMON STOCK 1500.00 RETAINED EARNINGS 33.789.93 CURRENT INCOME OR LOSS 66711.47 SEc ACCOUNTANTS COMPILATION LCTTER. 274984.83 ____40~136~69_ 315121.52 43.420.12.. 9528.77 160171.23 213~120.1L ~ • CONTECH ENGINtERiNG I~vC. ~ BALANCE SHEET SEPTcMdEr~ 30~ 1983 TOTAL STOCKHOLUERS~ EQUITY TOTAL LIABILITIES ~ STOCKHOLDERS EG-UITY SEE ACCOUNTANTS COMPILATION LITTER. 102~0'O1 .40 315121.52 • INCOME SALES INTE.r~EST INCOME GROSS INCOME ~,~ < <'s COaT OF SALES ~~ ~ PURCHASES, ,SALARLES BLUE PRINTS . BLUE PR.INTS,SUPPLIES •_`~ 'DRAFTING SUPPLIES ~~.--COMPUTER SUPPLIES _ - } y ' _ '!~ ~:~.;, COST OF GOODS SOLO 1. t Pr~.. '~~"; ;GROSS 'PROF.T" t ~ , r, v1-1 ~ .1 t ? .3..,. .~l K'1 :.I ~.L. ~~: 1 r xy „?° EXPENSES ~: ~ s QFF.7CER ~;S~~5ALARY -` -• • ~~as . •.;xACLLCICINTL~NGl' b:= LEGAL ' CO'VTECH ENGI?d[~RING INC. STATEMENT OF INCOME ScPTEME3ER 30. 1983 THRtE MONTHS ENDED SEPTEMBER 30. 1983 • AMOUNT PERCENT ~~ '~_•~ ,~,r -ADVERT'IS'ING ~ ~ ~ X462.64`. '~ AUT(y REPAIRS: •.165.42- -~ ~ ';~ , ~ AUTO ,GAS~ G, OiLL;,, - + • 642.14 ' . s ~~ ~ a~ c ~~ua *: BANK CHARGES= ~ . ~ ~' •.00 ` ~ ''BOOKS ~ `_PUBL~II;AT I DNS: _120 :-22 CONTRAGT.~L'ABOR ~~.- 3 822..'32 : CONSULTING;; FEES- 2 X278.75_ ' •-. DEPRECIATION`, 4 ~ 55`6.00 ~~; . `DONATIONS - 82:50 . 1 , R IPTLONS . f :, ; DUES E SUBSC , :288.97 _ ~~ :'E000AT_ION ' ~ ' - X625:00 INSURA NC~ b~761.67 . > - INTEREST. ~ 537:.30 ~ ~ .~;; JANITORIAL 296.00 ~ ~ '~•~""``MtSCEt,.L~l,NE0U5 ~ _ ~~ EXPENSE •'• ~ ?'•~'" OFF`ICE u 20.69. 954. 80' , >, ,; ; . • ~, Ay 1, .f.' L A ~~ ~ POSTAG~;'~•6 FRELGHT , - : 2 i 1.:84 ` . E. .~ 'c Y1 ;RENT ~ `~ n-:~' •1. r ~ tJU i. { D 1 A ~ j'a .b ~. a~a r:REPAIRS'6 MAINtENANCE ":, ;SALE OF~'.ASSETS .• ' ` '' ~-''`SUPPLIES TAXES- .PAYROLL. TAXES= GENERAL TELEPHONE TRAVEL 6 ENTERTAINMENT UTILITIES 3000.00 -' 29.8.0 ` . _' :00 . 258.94 10~5(i7.18 28.55 1366.13 1 ~ 599.97 1.047.19 SIX MONTHS ENDED SEPTEMEER 30 ~ 1 983 AMOUNT' ~ ~ PERCEN i 99.7 487j271.81 99.8 .3 807.24 .L 100.0. 488~~079.05 100.0 . 1 > .~: ,.. 1;1 f-559.52 ' - 2.4 53.6 244094.61. 50.0 .0 100.07 .0 .L '500.06 .1 .0 112.66- .0 .0 390.64- .1 53.9 ~ 256 ~ 532.24:`-x'. 52.6 46.1 231546.81 : 47.4: 11.9 "~ ~ ~52y.000-.00 ~ 10.7; ~2 ~'1 x:155.-00 _ .2 .2. ,,901.15.. •2` . 1- -203.90 ' .0 ; .3 ~;2~813..`76 .6 .0 ~ 2:00 .0: p . ~ ~ 120.22 .0 1 .5 . ` :,'3°~ 822. ~2 .. . 8 `. .9 5598.75 1.1< i. 8 ?8823.00' ' 1.8` . . 1 _ =:1$2.50 •O: 1.7 11865.92 ~ 2.4 .2 1205.17 .2 • I, c777.00 .2 .0 215..52 .0 .4 ,.~.•1~939.10 : .4. 1 , r 4 98.3 0 ; ~ ~~~+~ . 1. ~- ~. • 0 fi -n ~ •> ,"29 i 80 •0 .0 , ;~1 ~ 043.00,..- .2° • i -~~~-•-327.34 ~ . 1 a.2 19578.65 4.0 .0 328.55 .1 .5 2769.26 .o .b 4.547.93 .9 .4 1555.58 .3 ScE ACCOUNTANTS COMPILATION LETTER• • TOTAL. EXPENScS CONTECH tNGIrIEcRING INC. STATEMENT OF INCOME 'SEPTEMBcR 30. 1y83 THREE MONTHS ENOEO SEPTEMBER 30~ 1983 A~~IOUNT PcRCENT SIX .MONTHS E~NOEO SEPTEMBcR 30~ 1983 AMOUNT PERCENT 69893.18 27..7 127470.34 26.1 NET INCOME BEFORE TAXES -- 46638=78_ -_18=5_ _-_304076.47_ _ _21~3- ' PROVISION.FOR FEDERAL INCO~NE.TAXES CURRENT - 37365-00 -6.3 1.00 _ 1599 7=7 - _ - _ _ . ,.~. s ,. ,... - - TOTAL';TAX -~; 15991.00: .6.3 37365.00 __ __ _ - _-- - 7.7 _ :NET INCOME - l l .,4-T -66 ~ 7 2. 1 30 ~ 647.78' ':1 - ~ ~ 13.7 ~ _ . . , .~,: ~L ~:a` ":i y acv ~ ~ SE CCOUNTANTS~ COMPILATION LETTER. • ;~, r r _ ~ • ~ 5 . „ ~ 1 • l r _ '.~(}~r 7':.~1 ..` ! l , (' x l _~~ ~~. s~~~ k~~tf' !C! 7 `, { h f Y":' ~' ~ r ` ~ A~ ''77".!~' r 3y,,: c~,rt.f;6~' w~ f ~ +~< a, J _-'fY '~$~~~SLS~rv~7.'~ i 7- T ~ ~: ~~ .t '.' 7 : ' . ' :r. - ~ , . "' _ ,t x ! ~ ;; . r - ~ t' ' i ~4~/ ~ ,L ~ ~ 1 ._., , ` ~y+. `f r of 1 . - tr ; ~ t .. -. ~. y` '..~ ~ ~ b m~r~ r r 7 r .; K r ~ A"~~a.~j~ 1~f4,~-~y~~ }~fT~.~'y'y ~ y -~ .E .;~~'c~''? r. ~•.~Wv~Y`f?n~+'f~ ~ ~ ~ ~ !r ~ ~ •. ~ ~ ~ y ~~,~ x'y~. ' ~^ ~ ~. ~ , f < < . r Y.• ~~ r ~~ F .`! , ... ~"zi z - ~ f r k t A ~ ~ :l ! fyty~L~ie~^A*) a ! } 4 !~ ~, ,~•j ~t 4 ~ yt .-J ~~~ IC~µr {~'~?,41~~ r t y.. ~ ; ~ t~f. 3Z :.l ~ u gyp, t`~ r r ' r , t , ~ ~~ 7 i ~~ ~ ~ ~ • ~ '' ~ ' .x ~' . j~ .~ ~ i r • n a ~ ^~ ~., ~. CI ~ zP , :~ ~~ f l t i~ KV i _ ~IS ~-~r 4 L~ ~!i Y. ~ '~ 't - . f ~ a' l, ~ 1~ ~ r.~:.., ( ~ ` f~~ t~ ~ „ ~ t ~ r _ ~~ n 1'e','~r 4 ~t ' ~~ , ~..-~`~,,, 4sa . ,` ., - r ~ f :i `-~` I ::','~. ONTECH ENGINEERING ORGANIZATIONAL CHART ..r ~~ • r WHO NEEDS FULL-TIME CONTROL SYSTEM ENGINEERS ... ON A PART-TIME BASIS? { Contech Process Instrum ent and Electrical Engin eers Offer. Basic Design Project Managmnent Contract Services • Field Surveys • Project Planning • Instrument & Electrical.Technicians • Project Definition • Progress Reporting • Instrument & Electrical Designers • Control Strategy Development • Cost Control • Instrument & Electrical Engineers t • Design Specifications • Schedule Control • Project Management Teams i • Budgetary Cost Estimates • Change Administration • Domestic and International I Detailed Engineering Procurement Services Typical Projects • Instrument Engineering Design • Purchase Specifications • Control Room Consolidations • Electrical Engineering Design • Inquiry & Bid Evaluations • Distributed Control and Computer • Related Mechanical and Process • Purchase Orders Additions Design • Expediting and Inspections • Power Distribution Revamps • Computer Record Systems • Factory Acceptance Testing • Control Improvement & L • Equipment Specifications Modernization • P&I Diagram Development Field Services • Programmable Controller • Detailed Installation Packages • Power Distribution Systems .Construction Ins ection p Applications • Grass Roots Control Center L • Substation & MCC Design .Calibration .Loo Check . Design • Distributed Control Configuration .Start Up Assistance L • Data Base Preparation • Analyzer System Design ~_ ` Who Needs Full-Time Control System Engineers on a Part-Time Basis? CONTECH ENGINEERING INC. Maybe You. Give Us a Call. PROCESS INSTRUMENT ENG/NtzERS L We'll Appreciate Your Business (713) 471.8010 P.O. Box 923 La Porte, TX 77571 r~-; • ~' CONTECH ENGINEERING, INC. Charles R. Gipson, P.E. Condensed Resume Background -+- B.S. Chemical Engineering, 1967 The University of Texas (Austin, Texas) + Registered Professional Engineer (Texas #34621) 1973 Experience + 1983 Project Manager, Utility Monitoring Project, ARCO Petroleum Products Company, Houston, Texas I ~ + 1982 Project Manager, Gasoline Blending Project, ARCO Petroleum Products Company, Houston, Texas + _1981 Project Manager, Warrengas Terminal Instrument & Power .Revamp, Warren Petroleum Company, Galena Park, Texas + 1980 Section Supervisor, Instrumentation and Electrical, Exxon Coal Liquefaction Plant, Baytown, Texas + 1979 Field Engineer, Exxon Project Management Team, Exxon Coal Liquefaction Plant, Baytown, Texas + 1978 Project Engineer, Exxon Project Management Team, Exxon Coal Liquefaction Project, Arthur G. McKee Offices, Cleveland, Ohio + 1977 Start-up Advisor, Alyeska Pipeline Service Company, Trans-Alaska Pipeline Start-up, Prudhoe Bay, Alaska + 1976 Project Engineer, Union Carbide, Ethylene Oxide Unit Analyzers and Sample Systems, Seadrift, Texas + .1975 Project Engineer, Exxon Chemical Company, Butyl . Rubber Plant Computerization, Baytown, Texas + 1974 Field Engineer, Exxon Project Management Team, Lago Hydrodesulfurization II, Aruba, Netherlands Antilles ~ + 1973 Project Engineer, Crude Topping Units Control Consolidation, Conoco, Inc., Ponca City, Oklahoma i_ + 1972 Instrument Start-up Engineer, Diamond Chemical Company Chrome Plant, Wilmington, North Carolina + 1971 Project Engineer, Armco Steel Company, Direct Reduction Unit Analyzers, Houston, Texas •~ • f Condensed Resume - C. R. Gipson (cont.) r' + 1970 Instrument Start-up Engineer, Occidental Petroleum Company, Ammonia/Urea Plant, Al Khobar, Saudia Arabia + 1969 Instrument Engineer, Exxon Chemical Company, Polyolefins Unit 1 and 3, Baytown, Texas • ~~ CONTECH ENGINEERING, INC. Joe L. Copeland, P.E. Condensed Resume Background +" B.S. Mechanical Engineering, 1968 Texas A&M University + Registered Professional Engineer (Texas #41199) 1966 Experience + 1982 Project Manager, BTPE Project, Exxon Chemical Americas, Baytown, Texas + 1981 Project Manager, Crude Units Reinstrumentation Project, TOSCO Corporation, E1 Dorado, Arkansas ~ + 1980 Project Manager, UNICORN Consolidation Project, Exxon Chemical Americas, Baytown, Texas + 1979 Project Engineer, Ethylene Oxide Unit Analyzer Revamp, Union Carbide, Seadrift, Texas + 1977 Project Engineer, Utilities Control Center Project, Exxon Company, U.S.A., Baytown, Texas + 1975 Instrument Engineer, Butyl Rubber Plant Computerization, -Exxon Chemical Company, Baytown, Texas 1 + 1974 Instrument Engineer, Boiler Controls Revamp, ~ E. I. Dupont, Orange, Texas + 1973 Instrument Engineer, Flue Gas Monitoring Systems, Houston Lighting and Power Company, Houston, Texas + 1972 Instrument Engineer, Power P1ant~Construction, Houston Lighting and Power Company, Houston, Texas • ' ~.! CONTECH ENGINEERING, INC. __ Joe M. Payne, P.E. Condensed Resume Background + B.S. Electrical Engineering, 1967 University of Houston + Registered Professional Engineer (Texas #33248) Experience + 1983 Project Engineer, Electrical Power and Controls, Gas Plant Refrigeration Compressor, Flying J, Incorporated, Cutback, Montana + 1982 Project Engineer, Electrical Power and Controls, Distillate Hydrotreater Unit, Southern Union Refining Company, Covington, New Mexico + 1980 Project Manager, 138KV Electrical Substation, Sigmor Refining Company, Three Rivers, Texas + 1980 Electrical Engineering Manager, Electrical Power and Controls, Fluidic Catalytic Cracking Complex, Sigmor Refining Company, Three Rivers, Texas + 1980 Project Engineer, Electrical Power and Controls, FCC Tank Farm adn LPG Truck Loading Facilities, Sigmor Refining Company, Three Rivers, Texas ~ + 1979 Project Engineer, Electrical Power and Controls, Products Terminal and Pipeline Pump Station, Sigmor Pipeline ~ Company, San Antonio, Texas + 1979 Project Engineer, Electrical Power and Controls, Vacuum ~ Distillation Unit and Refinery Electrical Distribution System Modernization, Crystal Oil Company, Longview, Texas - + 1978 Project Engineer, Electrical Power and Controls, Fertilizer Terminal, Sigmor Pipeline Company, Corpus Christi, Texas' + 1977 Project Engineer, Electrical Power and Controls, 2500 HP Gas Compressor, Amoco Chemicals Corporation, ~- Texas City, Texas + 1975 Project Engineer, Electrical Power and Controls, Waste Treatment Facilities, Amoco Chemicals Corporation, Texas City, Texas •~ • f I~ I. Condensed Resume - Joe M. Payne, P.E. + 1974 Project Manager, 13.8KV Power Distribution Modifications, GAF Corporation, Texas City, Texas + 1972 Project Engineer, Electrical Distribution System Coordination Study, GAF Corporation, Texas City, Texas ~ • CONTECH ENGINEERING, INC. ~~ Sam D. Tucker Condensed Resume Background +- B.S. Electrical Engineering, 1973 Texas A & M University + Registered Professional Engineer (Texas #45027) 1978 Experience + 1983 Project Engineer, Gasoline Blending Renovation Project, ARCO Petroleum Products Company, Houston, Texas + 1982 Project Engineer, Waste Heat Boiler Additions, Lone Star Steel Company, Lone Star, Texas + 1981 Project Engineer, 100 Megawatt Induction Furnace, Lone Star Steel Company, Lone Star, Texas + 1980 Project Engineer, Automatic Tubing Straightener and Saw Line, Lone Star Steel Company, Lone Star, Texas + 1979 Project Electrical Engineer, 50,000 BBL/DAY Petroleum Refinery, National Oil Company of Pakistan, Attock, Pakistan + 1977 Electrical Engineer, Utilities Control Center Project, 1978 Exxon Company, USA, Baytown, Texas + 1976 Electrical Engineer, Water Treatment Facilities, Monsanto, Luling, LA. + 1975 Electrical Engineer, Butyl Rubber Plant Computerization, Exxon Chemical Company, USA, Baytown, Texas + 1974 Electrical Engineer, Urea/Herbicide Grinding Facility, E.I. Dupont, La Porte, Texas ~` r-;..s CONTECH ENGINEERING, INC. Dennis G. Miller Condensed Resume Background +--B.S. Mechanical Engineering, 1972 Oklahoma State University + M.S. Mechanical Engineering, 1974 Oklahoma State University Experience + 1982 Project Engineer, Utilities Flow Meter Replacement Project, ARCO PEtroleum Products Company, Houston, Texas + 1981 Project Engineer, Pipeline Backpressure PLC Controls, Pipeline Surveillance and Custody Transfer Metering Projects, Exxon Pipeline Company, Houston, Texas + 1980 Project Engineer, Pipeline Surveillance and Custody Transfer Metering Projects, Exxon Pipeline Company, Houston, Texas + 1979 Field Instrument Engineer, Gas Plant ESD Control Systems Evaluation and Modification, Exxon Company • USA, Tyler, Texas + 1978 Startup Instrument Engineer, Pump Alaska Pipeline, Alyeska Pipeline Anchorage, Alaska + 1977 Startup Instrument Engineer, Pump Alaska Pipeline, Alyeska Pipeline Anchorage, Alaska i 1 Station 8, Trans Service Company, -rf Station 10, Trans Service Company, Startup Control Systems Engineer, Coal Liquefaction Pilot Facility, Liquefied Coal Development Corporation, Cresap, West Virginia + 1976 Startup Control Systems Engineer, NGL and-Crude Stabilization Facility, Union Oil Company, East Kalimantan, Indonesia + 1975 Control Systems Engineer, Gas/Oil Separation and NGL Processing Facilities, Aramco Services Company, Houston, Texas + 1974 Control Systems Engineer, HDLP Polyethylene Plant, Amoco Chemicals Company, Chocolate Bayou, Texas r` • CONTECH ENGINEERING, INC. -~ r~..~ Raymond L. Haak, P.E. Condensed Resume• Background --~ B.S. Electrical Engineering, 1969 The University of Houston + Registered Professional Engineer (Texas #41779) Experience + 1979- Manager of Technical Sales of Conventional and Analytical 1983 Process Instrumentation, Houston, Texas + 1978 .Vice-President Analytical Manufacturing Corporation for measurement of Carbon-in-Water and Oxygen Analyzers, Houston, Texas + 1977 Project Manager, Analytical Project for Shell Oil, Norco Louisiana involving over 200 process analyzers and sample; systems + 1976 Project Engineer, Mobile Effluent Monitoring trailer for Mobay Chemical, Baytown, Texas • + 1975 Instrument Engineer, Effluent Monitoring Stations, E.I. Dupont, Orange, Texas + 1974 Instrument Engineer, Boiler Controls Revamp, E.I. Dupont, Orange, Texas + 1972- Instrument Engineer, Gas Permeation Calibrator design, 1973 manufacture for KIN-TEK Labs, Texas City, Texas + 1969- Instrument Engineer, AMOCO Oil Company, Texas City, 1971 Provided instrument engineering and design service to major refinery for expansions, revamps and modernization projects. ~r CONTECH ENGINEERING, INC. Background + --B~.S. Chemical Engineering, 1944 Case Western Reserve University + M.S. Chemical Engineering, 1947 Frank A. Leisey Condensed Resume + Postgraduate work in process control Purdue University Illinois Institute of Technology + ISA Life Fellow '~ ~~ Experience - + 1981 .Engineering Associate consulting in the area of instrument 1983 and analyzer selection, application, system design, ` installation supervision, start-up, and troubleshooting. + 1972- Process Analyzer Specialist/Consultant, Amoco Oil Company, 1981 Texas City, Texas. Provided process analyzer application engineering and system design for major process unit expansions for. eight oil refineries as well as supporting similar work for Amoco Chemical Co. and Amoco Gas Co. + 1960- Senior Project Supervisor, Amoco Oil Co., Whiting, Indiana. 1972 Supervised selection, application, and installation of process analyzer systems for oil refineries and chemical plants. During this period Frank developed 18 custom-built analyzers for which he now holds 8 patents. Three of these analyzers are now commercially available. Frank has published and presented 12 technical papers in the area of process analyzer design and application. ~` • + 1947- Engineer, Project Engineer, Senior Project Engineer, 1960 Standard Oil Company. Specialized in the design and development of process analyzers and analyzer systems. t i i i 1 J i t i d , r • CONTECH ENGINEERING,. INC. •~ • Ben D. Stanton, P.E. Condensed Resume Background +_ B.S. Electrical Engineering University of California at Berkely + Registered Professional Engineer in Texas and California Experience + Ben Stanton worked for 28 years with Shell Development Company at Emeryville, California and Houston, Texas. There he specialized in the application of advanced control concepts, instrument evaluation, and analyzer design. + Since his retirement from Shell Development Company, Ben has consulted in the area of control systems conceptual design and computer applications to process control. + Ben Stanton enjoys a strong national reputation as an expert in instrumentation and process control. He has published widely and taught at the college level. ~f ~~ • ~_ -~ CONTECH ENGINEERING, INC. Milton C. Gaskin Condensed Resume Background +--Durham Business College 1961-1964 Experience + 1982 Senior Staff Designer, BTPE Project Exxon Chemical Americas, Baytown, Texas f + 1980- Senior Engineering Technician, UNICORN Consolidation 1981 Project, Exxon Chemical Americas, Baytown, Texas i ~ + 1978- Senior Engineering Technician, Instrument and Electrical 1979 Design Projects, Exxon Chemical Americas, Baytown, Texas + 1977 Senior Engineering Technician, Exxon Utilities Control ~~= Center, Exxon Company, U.S.A., Baytown, Texas + 1976 Design Group Leader, Injection Well Instrument and Electrical Systems, Texaco, Inc., Sour Lake, Texas + 1968- Senior Electrical Designer, Major Projects Design Work, 1974 Exxon Co., U.S.A., Baytown, Texas + 1963- Electrical Designer, Oil Movements Modernization, 1967 Exxon Co., U.S.A., Baytown, Texas CONTECH ENGINEERING, INC. ~r George H. Roberts Condensed Resume Background +_ Mechanical Technology University of Houston 1961-66 ~'~ ~.. Experience + 1982 Staff Designer, Control Modernization Project, Tenneco Refinery, Chalmette, La. + 1981 Staff Designer, Crude Units Reinstrumentation Project, TOSCO Corporation, E1 Dorado, Arkansas + 1980 Senior Designer, UNICORN Consolidation Project, Exxon Chemical Americas, Baytown, Texas + 1978 Senior Designer, Utilities Control Center Project, Exxon Company, U.S.A., Baytown, Texas + 1976 Senior Designer, 532 Crude Unit Instrument Modernization, ARCO Petroleum Products Company, Houston, Texas + 1975 Designer, Furfal Unit Reinstrumentation Project, Mobil Oil Corp., Beaumont, Texas + 1974 Designer, Boiler House Instrument Consolidation, E.I. DuPont, Orange, Texas •C • ~-+~, i r` CONTECH ENGINEERING, INC. Tommy Rogers Condensed Resume Background ±__.Electrical Technology & Pre-engineering 1973 to present San Jacinto Jr. College + Horieywell-Instrumentation & Industrial Controls Application, 1974 + Fluor Engineering-Instrumentation School, 1978 Experience + 1983 Staff Designer, Gasoline Blending Renovation Project, ~ ARCO Petroleum Products Company, Houston, Texas ( ~- + 19.82 Staff Designer, Plant Engineering Projects, ARCO j Petroleum Products Company, Houston, Texas _ + 1981 Sr. Electrical Designer, Sulfur Recovery Unit, Sigmor Refining Co., Three Rivers, Texas + 1979 Sr. Electrical Designer, Two months control panel inspection and check-out, Honeywell Plant, Philadelphia, Pa., for Aramco, Uthmaniyah, Saudi Arabia. :.Three .months field assignment-N.G.L. Plant, Aramco, Shedgum, ..Saudi Arabia '~ _ + 1978- Sr: Electrical Designer, N.G.L. Plant-Main .Power ! 1977 Substation, Aramco, Shedgum, Saudi Arabia f + 1976 .Electrical Designer, No. 2 Crude Unit, Tenneco Oil Co., Chalmette, La: ~ + 1975- Service Technician, Commercial & Industrial 1.968 Environmental Equipment, Rebuilding of boilers and compressors. ::.,.,.: a • +i CONTECH ENGINEERING, INC. ' J. K. Connor Condensed Resume Background I + Two years Mechanical Engineering University of Houston, Houston, Texas Experience + 1982 Supervisor of Checkout and Start-up Team, Mt. Belvieu Plant, Exxon Chemical Americas, Mt. Belvieu, Texas + 1980- Supervisor of Checkout and Loop Transfer Team, 1981 UNICORN Consolidation Project, Exxon Chemical America, Baytown, Texas f + 1979 Supervisor of .Checkout and Start-up Team, Baytown Olefins Plant, Exxon Company, U.S.A.,'Baytown, Texas 1 + 1978 Construction Inspector, VCM Plant, Diamond Shamrock Co., Pasadena, Texas ~ + 1976- Field survey Technician, Utilities Control Center 1977 Project, Baytown Refinery, Exxon Company, U.S.A., ' Baytown Refinery, Exxon Company, U.S.A:, Baytown, Texas + 1975 Supervisor of Checkout and Start-up Team, VCM Plant, 1 Shell Chemical Co., Deer Park, Texas + 1971- Engineering Technician, Various Sma11 Projects, ~ 1974 S&B Engineers, Houston, Texas + 1954- Instrument Technician, Rohm and Haas, Deer Park, 1969 Texas • 4 CONTECH ENGINEERING, INC. P.O. Box 923 110 B North Broadway La Porte, Texas 77571 (713)471-8010 PROJECT EXPERIENCE The following projects have been completed by CONTECH and are representative of our capabilities: + Paraxylene Unit-Control Room Systems: Design, Procurement, and Installation, Exxon Chemical Americas, Baytown, Texas + Refinery and Chemical Plant Utility Monitoring Systems, ARCO Petroleum Products Company, Houston, Texas + Warrengas Terminal Power Distribution Facilities, Warren Petroleum Company (Gulf Oil Corporation), Tulsa, Oklahoma + Gasoline Blending System Replacement, ARCO Petroleum Products Company, Houston, Texas _ + Paramins Unit-Control Room Systems Design, Exxon Chemical Americas, Baytown, Texas + Gas Plant Analyzer Systems, Shell Oil Company, Kalkaska, Michigan + Hexane Analyzer System Design and Fabrication, ARCO Chemical Company, Port Arthur, Texas + Aromatics Recovery Unit Distributed Control System Modernization, ARCO Chemical Company, Houston, Texas + Butyl Rubber Plant Chromatographs and Sample Conditioning Systems, Exxon Chemical Americas, Baytown, Texas + Emergency Shutdown Systems and Critical Instruments Test Program, Coal Liquifaction Plant, Exxon Company, U.S.A., Baytown, Texas + Allyl Alcohol Unit-Control Room Relocation and Instrument Systems Modernization, FMC Corporation, Pasadena, Texas + PVC Reactor Wash Systems-Programmable Controller System Design and fabrication, Shintech, Inc., Freeport, Texas ~~ ~~ + Coker and Magnaformer Unit Power Supply Systems Revamp, ARCO Petroleum Products Company, Houston, Texas ~ ~ ~t r~ ' + Process Plant Instrumentation Management Workshop, ARCO Chemical Company, Houston, Texas + Air Compression Facilities-Control Systems Engineering Support, E1 Paso Chemical Company, La Porte, Texas + Propylene Oxide Unit-Oxygen Analyzers, Chromatographs, and Sample Conditioning Systems Reva-np, ARCO Chemical Company, Pasadena, Texas + Polypropylene Catalyst Preparation Area, Field Survey and P&I Diagram Development, Rexene Polyolefins Company, Pasadena, Texas + Control Strategy Development and Testing, ARCO Chemical Company, Pasadena, Houston, Channelview, and Port Arthur, Texas and Beaver Valley, Pennsylvania + Ethylene Oxide Unit Startup, ARCO Chemical Company, Channelview, Texas + Emergency Shutdown Systems, Docks A,B,C, and D, ARCO Petroleum Products Company, Houston, Texas + Flare Gas Flow Metering Facilities, Houston Refinery, ARCO Petroleum Products Company, Houston, Texas + Mercury Flow Meter Replacement Project, Houston Refinery, ARCO Petroleum Products Company, Houston, Texas + Tank Farm Firewater Facilities-Instrument and Electrical Systems, ARCO Petroleum Products Company, Houston, Texas + LPS Unit Control Building Design Specifications, Exxon Chemical Americas, Baytown, Texas + PCU and CLEU High Accuracy Turbine Flow Metering, Exxon Chemical Americas, Baytown, Texas + Variable Speed Electric Motor Drives, Coal Liquifaction Plant, Exxon Company, U.S.A., Baytown, Texas + PCU Cabling Revamp and On-line Control Transfer, Exxon Chemical Americas, Baytown, Texas + RHB Unit-Critical Temperature Instruments, Exxon Chemical Americas, Baytown, Texas + Lead Additive Monitoring Systems, ARCO Petroleum Products Company, Houston, Texas In addition to these projects CONTECH personnel have had management roles in a number of major projects. These include: + Trans Alaska Pipeline Project, Alyeska Pipeline Service Company, Anchorage, Alaska • t ~ . + Utilities Control Center Project, Exxon Company U.S.A., Baytown, Texas + UNICORN Control Center South, Exxon Chemical Americas, Baytown, Texas + Elastomers Control Center/Computer Control Project, Exxon Chemical Americas, Baytown, Texas + Hydrodesulfurizatior_ Units-Control Systems and Electrical Facilities, Lago Oil and Transport Company, Aruba, Netherlands Antilles ~ ~ zr CONTECH ENGINEERING, INC. P.O. Box 923 110 B North Broadway La Porte, Texas 77571 (713)471-8010 RECENT CLIENT REFERENCES d ) R.C. Davis ARCO Petroleum Products Company P.O. Box 5094 Houston, Texas 77012 (713)475-4316 L.R. Lester Exxon Chemical Americas P.O. Box 4004 Baytown, Texas 77520 (713)425-1201 C.D. Corbell Exxon Chemical Americas P.O. Box 4004 Baytown, Texas 77520 (713)425-1199 J.A. Bernard ARCO Chemical Company 1200 Milam, Suite 3500 Houston, Texas 77002 (713)654-4676 Bill McIntyre FMC Corporation Specialty Chemicals Division 12000 Bay Area Blvd. Pasadena, Texas 77507 (713)474-4171 Gasoline Blender Renovation Utilities Monitoring Project Dock Shutdown Systems Mercury Meter Replacement Projec~ ARU Control Revamp Project. Paraxylene Unit-Control Center Systems, Design, Procurement, Installation, and Check out Paramins Project-Control Center Systems Design Ethylene Oxide Unit Start up Propylene Oxide Unit Analyzers Modcomp Computer Relocation Control Strategy Development Projects Allyl Alcohol Unit-Control Room Relocation and Instrument Modernization :~ • • No• 0132 IN~DICE ~'~~\~ of La Yoffie C1~ ~ I_a Porte, Texas 77571 P ~ gOx 1115 phone (7131 471.5020 ' ndustria~ Development ~0rp. ~ La Porte I 0, Box 1115 La Porte, TX 77571 J DESCRIPTION `I Charges GEN. LEDGER N ~ Express Del ~ VerJ ~O~GEDATE .GOO-203 Federa .001-600^V 2_27_83 DATE December 27~ 1983 AMOUNT ~ 36.50 INTEREST I _ _- -- CUSTOMER -- -` ~~_ ~~~ ~- ~~ AMOU ~~ $ 36.50