HomeMy WebLinkAbout1995-06-27; Industrial Development Authority; 002; Sale of Industrial Development Revenue Bonds.
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MTG. 6-23-95
TITLE: ISSUANCE AND SALE OF INDUSTRIAL
DEVELOPMENT REVENUE BONDS
FOR AALTO SClENTlFlC/ClP LIMITED
DEPT. ED
RECOMMENDED ACTION:
I CITY MG&&>
ADOPT Resolution No. 003
Industrial Development Revenue Bonds for Aalto Scientific TechnologieslCI P Limited, Series
1995, approving the documents in the form substantially presented subject to minor not-
substantive changes approved by the Chairperson or his designee, upon the advice of the City
Attorney, and authorizing the execution and delivery of the bonds and related documentatian,
including the agreement with bond counsel.
, authorizing the issuance and sale of up to $1,200,000 in
ITEM EXPLANATION:
The Industrial Development Authority of the City of Carlsbad is authorized by the California
Industrial Development Financing Act to issue its revenue bonds and enter into project
agreements to finance the cost of qualified and approved projects.
Representatives of CIP Limited, have proposed that the Authority issue and sell up to
$1,200,000 in Industrial Development Revenue Bonds, Series 1995 for the purpose of
defraying a portion of the costs of the Aalto Scientific Project. The proceeds of the Bonds wili
be loaned by the Authority to CIP Limited, who will agree to make payments sufficient to pay
the principal, premium, if any, and interest on the Bonds when due. The Authority will assign
certain interests in the Loan Agreement to a Trustee for the benefit of the holqers of the
Bonds. First Interstate Bank has agreed to purchase all Bonds in connection with this project.
On April 4, 1995, the Industrial Development Authority accepted the application for financing
and expressed its preliminary interest to approve the sale of Industrial Development Revenue
Bonds, and loan the proceeds to CIP Limited to finance the Asymtek project, and authorized
the preparation of appropriate documents related to the issue.
Documents have been prepared for execution and are on file in the Off ice of the Secretary of
the Authority. Documents Include (a) Loan Agreement, (b) Indenture, (c) Bond Purchase
Agreement, (d) Deed of Trust, Fixture Filling and Assignment of Rents, Assignment of Rents,
Leases, Income and Prof its, Security Agreement, Assignment of Project Agreements and
Environmental Indemnity, (e) Bond Counsel Agreement.
FISCAL IMPACT:
Issuance of Industrial Development Revenue Bonds does not create any financial obligation
for the City or the Industrial Development Authority. Any costs related to the issuance of
IDRB's will be paid by the private party benefitting from the bond issue. The City of
Carlsbad's costs related to this financing will be limited to minimal staff time to monitor the
bond issuance process. All direct costs, if any, will be funded through the debt issue.
EXHIBITS:
1. Resolution No. 003
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RESOLUTION NO. 003
RESOLUTION OF THE BOARD OF DIRECTORS OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OFTHE CITY OF CARLSBAD RELATING TO A PROJECT AND ITS FINANCING UNDER THE CALIFORNIA INDUSTRIAL DEVELOPMENT FINANCING ACT; AUTHORIZING THE ISSUANCE AND SALE OF UP TO $1,200,000 INDUSTRIAL REVENUE BONDS AALTO
IN CONNECTION THEREWITH, AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE BONDS AND RELATED DOCUMENTATION.
WHEREAS, The Authority is authorized by the California Industrial Development
Financing Act, California Government Code, Title 10, as amended (the "Act"), to issue its
revenue bonds and to enter into project agreements to finance the cost of a project as
defined in the Act.
PROJECT), SERIES 1995, APPROVING THE FORM OF DOCUMEN \ ATION
WHEREAS, representatives of CIP Limited, L. P., a California limited partnership (the
"Company"), have proposed that the Authority, acting under and pursuant to the Act, issue
and sell up to $1,200,000 Industrial Revenue Bonds (Aalto Project), Series 1995 (the
"Bonds") for the purpose of defraying a portion of the costs of a project (the "Project"),
more particularly described in the application of the company and Aalto Scientific, Ltd. on
file in the off ice of the Secretary. Pursuant to the proposal, the proceeds of the Bonds will
be loaned by the Authority to the Company, and the Company will agree to make
payments sufficient to pay the principal of, premium, if any, and interest on the Bonds
when due. The Authority will assign certain interests in the Loan Agreement (as
hereinafter defined) (but excluding the right of the Authority to reimbursement of expenses,
to indemnification and to notices) to a Trustee (as hereinafter designated) for the benefit
of holders of the Bonds.
WHEREAS, by resolution duly adopted on April 4, 1995, this Board has previously
accepted an application for financing and expressed its preliminary interest to approve the
sale of industrial development revenue bonds pursuant to the Act and the loan of the
proceeds hereof of the Company to finance the Project and authorized the preparation of
appropriate documents.
WHEREAS, representatives of the Company have advised this Board and this Board
hereby finds that the Cost of the Project is greater than the amount of the loan authorized
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hereunder. Under the Loan Agreement, the Company is obligated to pay costs of the
Project in excess of the proceeds of the Bonds from its own funds.
WHEREAS, there have been prepared and presented to this Board copies of the
following documents, all of which are now, or shall be, placed on file in the office of the
Secretary:
(a) a Loan Agreement (the "Loan Agreement"), to be dated as of June 1,
1995, proposed to be made and entered into between the Authority and the Company,
pursuant to which the Authority will loan the proceeds of the Bonds to the Company;
(b) an Indenture (the "Indenture"), to be dated as of June 1, 1995,
proposed to be made and entered into between the Authority and First Interstate Bank of
California, as Trustee (the "Trustee"), creating and author-izing the issuance of and
establishing the terms and conditions of the Bonds;
(c) a Bond Purchase Contract (the "Purchase Contract"), proposed to be
made and entered into among the Authority, the Company, and First Interstate Bank of
California, as purchaser (the "Purchaser'), pursuant to which the Authority agrees to sell
and the Purchaser agrees to purchase the Bonds; and
(d) a Deed of Trust, Fixture Filing and Assignment of Rents (Construction
Trust Deed), Assignment of Rents, Leases, Income and Profits, Security Agreement,
Assignment of Project Agreements and Environmental Indemnity (collectively, the Security
Documents) to be executed by the Company in connection with the issuance of the Bonds,
providing for additional security for the Bonds.
WHEREAS, in the Act, the California Legislature has declared it to be the policy of
the State, consistent with environmental, resource conversation and other policies, to
facilitate for and on behalf of private enterprise the acquisition, construction or rehabilitation
of facilities (as defined in the Act) through the issuance of revenue bonds by industrial
development authorities. The Legislature has found and determined that industry in the
State of California needs and requires new methods to finance the capital outlays required
to acquire, construct or rehabilitate facilities which will increase employment opportunities
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or otherwise contribute to economic development, and the alternate method of financing
provided in the Act is in the public interest, serves a public purpose and will promote the
health, welfare and safety of the citizens of the State. The Project would further the
general purposes contemplated and described in Sections 91501, 91502 and 91502.1 of
the Act, and would provide employment benefits and consumer benefits within the meaning
of Section 91502.1 of the Act.
WHEREAS, the properties comprising the Project constitute 'facilities' within the
meaning of the Act. The proposed use of the Project by the Company and Aalto, Inc.
constitutes an activity and use permitted by Section 91503(a)(l) of the Act, because such
use constitutes an industrial use with demonstrated job creation or retention potential. No
activity or use described in Section 91503(b) of the Act will occur at the Project;
WHEREAS, the Project and the Bonds are subjkt to review and approval by the
California Industrial Development Financing Advisory Commission, subject to review of final
documentation and the Authority must also receive an allocation of a portion of the State
private activity bond limit from the California Debt Limit Allocation Committee for the Project
and the Bonds;
WHEREAS, subject to receipt of the approvals described in subsection (c) above,
the financing of the Project, the issuance and sale of the Bonds in the aggregate principal
amount of up to $1,200,000, the execution and delivery of the Loan Agreement, the
Indenture, the Purchase Contract and the Security Documents to which the Authority is a
party and the performance of all covenants and agreements of the Authority contained in
the Loan Agreement, the Indenture, the Purchase Contract and the Security Documents
to which the Authority is a party and all other acts and things required under the
Constitution and laws of the State of California to make the Loan Agreement, the
Indenture, the Purchase Contract and the Security Documents to which the Authority is a
party and the Bonds valid and binding obligations enforceable in accordance with their
terms, are authorized by the Act;
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WHEREAS, it is desirable that the Bonds in the amount of up to $1,200,000 be
issued by the Authority upon the terms set forth in this resolution and the Indenture, under
the provisions of which certain of the Authority's interests in the Loan Agreement
thereunder will be pledged to the Trustee as security for the payment of the principal of,
premium, if any, and interest on the Bonds;
WHEREAS, the payments required by the Loan Agreement are fixed, and are
required to be revised from time to time as necessary, so as to produce income and
revenue sufficient to provide for the prompt payment of principal of, premium, if due, and
administration expenses which relate to the administration of the Loan Agreement, the
Indenture and the Bonds;
WHEREAS, under the provisions of Section 91541 of the Act and as provided in the
Loan Agreement and the Indenture, the Bonds are not to be payable from nor charged
upon any funds of the Authority other than the revenues pledged to the payment thereof;
the City, the State of California or any political subdivision thereof to pay any of the Bonds
or the interest thereon nor to enforce payment thereof against any property of the Authority
except its interest in the Loan Agreement; the Bonds shall not constitute a charge, lien or
encumbrance, legal or equitable, upon any property of the Authority except its interest in
the Loan Agreement; each Bond issued under the Indenture shall recite that the Bonds,
including the premium, if any, and interest thereon, are payable solely from the revenues
pledged to the payment thereof and that neither the faith and credit nor the taxing power
of the State of California or the City is pledged to the payment of the principal of, premium,
if any, or interest on any Bond, nor is the State or such City in any manner obligated to
make any appropriation for payment; and no Bond shall constitute a debt or liability of the
City, the State of California or any political subdivisions thereof; and
WHEREAS, the Bonds are issued for an authorized purpose of the Authority in the
exercise of the powers granted by California Government Code, Title 10, Article 2, as
amended.
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NOW, THEREFORE, BE IT RESOLVED by the Industrial Development Authority of
the City of Carlsbad, as follows:
1.
2.
That the above recitations are true and correct.
The forms of the Loan Agreement and Security Documents referred to as
items (a) through (d) are approved. The Chairperson of the Authority and the Secretary
of the Authority are hereby authorized and directed, for and in the name of the Authority,
to execute a Loan Agreement with the Company and such of the Security Documents to
which the Authority is a party, in substantially the form hereby approved, with such
changes therein as the officers executing the same may approve, such approval to be
conclusively evidenced by the execution and delivery thereby. The Indenture, with such
variations, insertions and additions as the Chairperson may hereafter deem appropriate,
is directed to be executed in the name and on behalf of the Authority by the Chairperson
and the Secretary and delivered to the Trustee. The Purchase Contract, with such
variations, insertions and additions as the Chairperson may hereafter deem appropriate,
is directed to be executed in the name and on behalf of the Authority by the Chairperson..
Copies of all the documents shall be delivered, filed and recorded as provided therein. The
Chairperson and the Secretary are also authorized and directed to execute such other
instruments and certificates as may be required to give effect to the transactions herein
contemplated, subject to approval by the Chairperson..
3. The Bonds will be sold to the Purchaser pursuant to the Purchase Contract.
The Authority has made no independent investigation with respect to the information
contained therein and assumes no responsibility for the sufficiency, accuracy, or
completeness of such information except to the extent expressly set forth therein.
4. In order to provide for the financing of the Project and in anticipation of the
collection of payments under the Loan Agreement, the Authority shall proceed forthwith
to issue under the Act its Bonds to be designated "Industrial Development Authority of the
City of Carlsbad, California, Industrial Revenue Bonds (Aalto Project) Series 1995 in the
aggregate principal amount of up to $1,200,000 the actual amount to be determined in the
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Purchase Contract, and conclusively determined by the Chairperson's execution thereof.
The Bonds shall be dated as of June 1, 1995, or the date of initial delivery thereof and
shall bear variable interest rate(s) as provided in the Indenture. The Chairperson's
execution of the Purchase Contract shall constitute conclusive evidence of the approval of
such rate(s) and other provisions and shall embody the form of the bond as set forth in the
Indenture.
5. The Chairperson is hereby authorized and directed to execute and sign any
and all approvals, certificates, statements, requests, requisitions and orders of the Authority
in connection with the issuance of the Bonds, including, but not limited to, a tax certificate
relating to the tax status of the Bonds.
The officers of the Authority are hereby authoriz-ed and directed, jointly and
severally, to do any and all things to execute and deliver iny and all documents which they
may deem necessary or advisable in order to consummate the issuance, sale and delivery
of the Bonds and administration of bond proceeds and the bond transaction following
delivery of the Bonds, and otherwise to effectuate the purposes of this resolution; and such
actions previously taken by such officers are hereby ratified and confirmed. Should the
Chairperson be unavailable to execute any of the documents specified above, then any
other Director is hereby authorized to sign such documents on behalf of the Authority and,
should the Secretary of the Board be unavailable to sign, then any deputy secretary may
sign in her place.
6.
7. The firm of Stradling, Yocca, Carlson & Rauth, A Professional Corporation
is hereby engaged to act as bond counsel to the Authority in connection with the Bonds
in accordance with the terms of engagement set forth in the Bond Counsel Agreement on
file with the Secretary. The Chairperson or his designee is hereby authorized and directed
to execute said Bond Counsel Agreement in substantially the form presented subject 'to
minor non-substantive changes approved by the Chairperson or his designed upon the
advice of the City Attorney.
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8. The Chairperson and the Secretary and other officers of the Authority are
authorized and directed to prepare and furnish to the Purchaser of the Bonds and the
attorneys approving the legality thereof certified copies of all proceedings and records of
the Authority and the City relating to the Bonds, and such other affidavits and certificates
as may be required to show the facts relating to the legality and marketability of the Bonds
as such facts appear from the books and records in the officers' custody and control or as
othetwise known to them; and all such certified copies, certificates and affidavits, including
any heretofore furnished, shall constitute representations of the Authority as to the truth of
all statements contained therein.
9. Anything to the contrary herein notwithstanding, all provisions and approvals
set forth in this resolution shall be subject to receipt by the Authority of the CIDFAC and
CDLAC approvals and the Authority hereby authorizes ind directs the modification of all
of the financing documents approved and referenced herein to conform to any conditions
imposed by CIDFAC or CDLAC with such approval.
10. This resolution shall become effective upon its passage, subject to receipt of
the approvals referenced. If said approvals are not received by September 1, 1995, this
resolution shall be of no further force and effect.
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PASSED, APPROVED AND ADOPTED at a regular meeting of the Industrial
, 1995, Development Authority of the City of Carlsbad held on the 27th day of
by the following vote, to wit:
JUNE
AYES: Board Members Lewis, Nygaard, Kulchin, Finnila, Hall
NOES: None
ABSENT: None
ATTEST:
Development Authority of the City of Carlsbai
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