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HomeMy WebLinkAboutResolutions - No. IDA-4A Resolution No. INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF LODI Dart Container Corporation of California Project RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF VARIABLE RATE DEMAND LIMITED OBLIGATION REVENUE BONDS IN THE PRINCIPAL AMOUNT OF $8,000,000 TO LOAN THE BOND PROCEEDS TO THE COMPANY TO FINANCE THE ACQUISITION OF AND CONSTRUCTION OF THE PROJECT FOR THE COMPANY, AUTHORIZING THE EXECUTION AND DELIVERY OF THE LOAN AGREEMENT, THE INDENTURE, THE BOND PURCHASE AGREEMENT, ACKNOWLEDGING THE REIM- BURSEMENT AGREEMENT, LETTER OF CREDIT, REMARKETING AGREEMENT AND THE GUARANTY AND AUTHORIZING AND DETERMINING OTHER MATTERS RELATIVE THERETO. PREMISES The Industrial Development Authority of the City of Lodi (the "Issuer") is empowered under Title 10 of the Government Code of the State of California as supplemented and amended, (the "Act"), to assist in the financing of certain projects and facilities through the issuance of its limited obligation revenue bonds. Dart Container Corporation of California (the "Company") has proposed that the Company acquire and construct a manufacturing facility and the site therefore in the City of Lodi, California, and acquire certain machinery and equipment for use in connection with such facility (the "Project"), and as an inducement therefor, has requested the Issuer to assist in the financing of the Project in the following general manner (as detailed in the Loan Agreement (the "Agreement")): The Issuer would issue its limited obligation revenue bonds in the principal amount of $8,000,000 (the "Bonds") under the Act and would loan the proceeds of the Bonds to the Company to be used to finance the acquisition and construction of the Project as the Company causes the Project to be acquired and constructed. Under the terms of the Agreement the Company would make loan repayments (the "Loan Repayments") in amounts sufficient to pay the principal and interest on the Bonds, and would be responsible for paying any costs of the Project (as defined in the Agreement) exceeding the amount of the Bonds, maintaining and insuring the Project and paying all taxes and expenses relating to the Project. The Issuer would enter into a Trust Indenture (the "Indenture") with Comerica Bank -Detroit, as Trustee wherein the Issuer would assign and pledge its right, title and interest in the Agreement, if any, to the Trustee as security for the Bonds. Upon full payment of the Bonds or provision therefor, the Agreement would be terminated. It is also the Issuer's understanding that payment of both the principal of, and interest on the Bonds in an amount not in excess of 110% of the principal amount of the Bonds outstanding will be further secured by an irrevocable Letter of Credit issued by Comerica Bank -Detroit, (the "Credit Bank") pursuant to a Reimbursement Agreement between the Company and the Credit Bank. As additional security for the Bonds, Dart Container Corporation (the "Guarantor"), will guaranty the payment of the Bonds to the Trustee for the benefit of the bondholders pursuant to a certain guaranty agreement dated as of December 1, 1984 (the "Guaranty"). The Issuer's participation in the financing of the Project is to enable the Company to utilize applicable provisions of the United States Internal Revenue Code (the "Code"). Section 103 of the Code encourages the construction of certain facilities and the public financing thereof through limited obligation revenue bonds by providing that the interest on such bonds, as contrasted with any bonds issued by the Company itself, will be exempt from federal income tax. This tax exemption enables the bond purchaser to accept a lower rate of interest, and since the Company in effect pays the interest on the Bonds, reduces the interest cost of the Project financing to the Company. On each interest payment date, the interest rate borne by the Bonds is subject to adjustment as provided in the Indenture and in connection therewith the holders of the Bonds may tender their Bonds for purchase on such dates. Bonds tendered for purchase may be remarketed pursuant to a Remarketing Agreement between Essex Company, as remarketing agent, the Company and the Trustee. On the basis of representations of the Company and the advice of Bond Counsel that the Issuer has the authority to issue the Bonds, and loan the Bond proceeds to the Company; and in order to induce acquisition, installation and construction of the Project, and thereby serve the purposes of the Act, the Issuer has previously determined to issue the Bonds, subject to the following condition: principal and interest on the Bonds and any other cost or liability relating to the Bond or the issuance or sale thereof, the Project, or the ownership or financing of the Project and the performance of any obligation of the Issuer under the Agreement, the Indenture or the Bond Purchase Agreement 2 040839-0001-187-2777c between the Issuer, the Company, the Credit Bank and (the "Purchaser"), shall never be payable from tax revenues or other public or general funds of the Issuer, the State of California or any political subdivision thereof, but shall be payable only from the Security (as defined in the Indenture) or otherwise by the Company. The Company has estimated Project Costs to be not less than $8,000,000 and has tentatively arranged the financial terms and sale of the Bond in that amount to the Purchaser for a purchase price of 100% thereof. The Issuer, the Company, the Purchaser and the Credit Bank have completed negotiation and drafting of the Agreement, the Indenture, the Reimbursement Agreement, the Letter of Credit, the Remarketing Agreement and the Bond Purchase Agreement and have submitted these documents to the Issuer for review and action. It is now appropriate for the Issuer to act on the proposed documents and the proposed issuance and sale of the Bonds. NOW, THEREFORE, BE IT RESOLVED: SECTION 1. Determination of Necessity. The Project increases or retains employment in and adds to the prosperity and general welfare of an area of critical labor surplus and constitutes a public purpose under the Act. The issuance of the Bonds is necessary to induce the Company to locate in the area of critical labor surplus and thereby obtain the employment and economic benefits. SECTION 2. Issuance of Bonds, Limited Obligation. The Bonds shall be issued by the Issuer in the principal amount of $8,000,000, in such form and denomination as provided in the Indenture. SECTION 3. Approval of Agreement. The form of Agreement on file with the Secretary of the Issuer ("Secretary") is hereby approved. SECTION 4. Approval of the Indenture. The form of the Indenture on file with the Secretary is hereby approved. SECTION 5. Approval of the Bond Purchase Agreement. The form of Bond Purchase Agreement on file with the Secretary is hereby approved. SECTION 6. Execution and Delivery of the Agreement, the Indenture and Bond Purchase Agreement and Changes Therein. The Chairperson or any other officer of the Issuer ("Chairperson") is hereby authorized to execute and deliver and the Secretary of the Issuer (the "Secretary") or 3 040839-0001-187-2777c any other officer of the Issuer is authorized to attest and seal the Agreement, the Indenture and the Bond Purchase Agreement all in the forms approved, with such changes and insertions in such documents as may be necessary or desirable, permitted by the Act and otherwise by law, and not materially adverse to the Issuer. SECTION 7. Acknowledgment of Other Agreements. The forms of the Letter of Credit, the Guaranty and the Remarketing Agreement are hereby acknowledged in substantially the form presented and such changes and insertions therein as may be necessary or desirable by the parties thereto. SECTION 8. Sale and Delivery of the Bonds. The Bonds shall be sold by the Issuer to the Purchasers under the Bond Purchase Agreement at a purchase price of 100% of the principal amount thereof. Upon compliance with the terms and conditions of the Bond Purchase Agreement, the Chairperson and the Secretary or any other officer of the Issuer shall execute, (by manual or facsimile signature) seal and deliver the Bonds upon receipt by the Trustee of the proceeds therefor to the credit of the Project Fund and the Bond Fund (both as defined in the Agreement) in accordance with the Indenture. SECTION 9. The Approval of Filings and Submissions with Other Governmental Agencies. The Chairperson, Vice - Chairperson, Secretary, or Treasurer, members, staff and counsel for the Issuer, or any of them, are authorized on behalf of the Issuer to apply for such rulings, orders and approvals and file or submit such elections or other documents to any governmental agency, in order that the Bonds may be validly issued and the interest thereon be exempt from Federal income taxation, and to execute such powers of attorney as may be appropriate in connection with the foregoing. SECTION 10. Authorization of Other Documents. The Chairperson, Vice -Chairperson, Secretary, or Treasurer, members, staff and counsel for the Issuer or any of them, are hereby authorized to execute and deliver such other certificates, documents, instruments, and opinions and other papers as may be required by the Agreement, the Indenture and the Bond Purchase Agreement or as may be necessary or convenient to effectuate the sale and delivery of the Bonds in accordance with the terms of the Agreement, the Indenture and the Bond Purchase Agreement. SECTION 11. Conflict and Effectiveness. All resolutions and parts of resolutions or other proceedings of 4 040839-0001-187-2777c I hereby certify that the foregoing constitutes a true and complete copy of a Resolution duly adopted by the Industrial Development Authority of the City of Lodi, at a Special Meeting held the 26th day of December, 1984, and that said meeting was conducted and that due and proper notice of the meeting as required by law was given to the Members, and that the minutes of said meeting were kept and will be or have been made available as required by said Act. I further certify that the following Members were present at said meeting: Council Members - Hinchman, Olson, Pinkprtnn, andSnider (Mayor/ and that the following Members were absent: Council Member Reid I further certify that Member Hinchman moved adoption of said Resolution, and that said motion was supported by Member Olson I further certify that the following Members voted for adoption of said Resolution: Council Members - Hinchman, Olson, Pinkerton, and Snider (Mayor) , and that the following Members voted against adoption of said Resolution: Council Members - None 6 040839-0001-187-2777c