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IDA84-02RESOLUTION NO. IDAA 84-2 A RESOLUTION AUTHORIZING THE ISSUANCE OF $1,000,000 PRINCIPAL AMOUNT OF INDUSTRIAL DEVELOPMENT AUTHORITY OF ANAHEIM INDUSTRIAL REVENUE BONDS (SANDERS ASSOCIATES PROJECT) WHEREAS, the Industrial Development Authority of Anaheim (the "Authority") is authorized pursuant to the California Industrial Development Financing Act, California Government Code Section 91500 et seq. (the "Act") to issue its industrial revenue bonds for the purpose of financing certain types of projects specified in the Act; and WHEREAS, Sanders Associates, Inc. (the "Company") has requested the Authority to issue and sell its industrial revenue bonds for the purpose of providing a permanent loan to the Company to finance the acquisition of certain equipment for a digital plotter manufacturing facility to be located at 2411 West La Palma Avenue in the City of Anaheim; and WHEREAS, the bonds authorized to be issued pursuant to this resolution will be subject to the restrictions set forth in the Governor's Proclamation allocating the State private activity bond ceiling under the Tax Reform Act of 1984 and the procedures to be outlined by the California Debt Limitation Allocation Committee created pursuant to the Proclamation. NOW, THEREFORE, BE IT RESOLVED by the Industrial Development Authority of Anaheim: Section 1. Definitions. In addition to the words and terms elsewhere defined in this Resolution or in the Agreement, the following words and terms as used in this Resolution shall have the following meanings unless the context or use clearly indicates another meaning or intent: "Agreement" means the Loan Agreement between the Authority, the Company and Chemical Bank dated as of September 1, 1984, as from time to time supplemented, modified or amended in accordance with the applicable provisions thereof. "Authorized Company Representative" means the person at the time designated pursuant to the Agreement to act on behalf of the Company. City" means the City of Anaheim, California, a chartered city and political subdivision duly organized and validly existing under the constitution of the State. "Code" means the Internal Revenue Code of 1954, as amended, and re-~nces to the Code and Sections of the Code shall include 0021I - 1 - relevant regulations and proposed regulations thereunder and any successor provisions to such Sections, regulations or proposed regulations. "Company" means Sanders Associates, Inc. a Delaware corporation duly authorized to do business in the State, and its lawful successors and assigns. "Debt Service Charges" for any time period means the principal, interest and prepayment premium, if any, required to be paid by the Authority on the Project Bond for such time period. Deed of Trust" means the Deed of Trust, if any, executed by the Company and delivered to the Owner to secure repayment of the Project Bond. "Eligible Investments" means (i) obligations issued or guaranteed by the United States or by any person controlled or supervised by or acting as an instrumentality of the United States pursuant to authority granted by Congress, (ii) obligations issued or guaranteed by any state or political subdivision thereof rated A or MIG-1, as applicable, of higher by b4oody's Investors Services, Inc., or by Standard & Poor's Corporation, both of New York, New York, or their successors; (iii) commercial or finance paper which is rated either P-1 or A-l, as applicable, or their equivalent by Moody's Investors Service, Inc., or Standard & Poor's Corporation, both of New York, New York, or their successors; (iv) banker's acceptances drawn on and accepted by commercial banks; (v) certificates of deposit of the Owner or any commercial bank affiliated with the Owner, or any other bank or trust company organized under the laws of the United States of America or any state thereof, having a reported capital and surplus of at least $50,000,000; and (vi) repurchase agreements fully secured by obligations of the type specified in (i) above; provided that any such investment or deposit is not prohibited by applicable law. "Executive" means the Executive Director of the Authority. "Financial Institution" means any life or casualty insurance company or any state or federally chartered commercial bank, savings and loan association or mutual savings association insured by either the Federal Deposit Insurance Corporation or the Federal Savings and Loan Insurance Corporation. "Loan" means the loan by the Authority to the Company of the procee~ received from the sale of the Project Bond. "Loan Payments" means the amounts required to be paid by the Company in repayment of the Loan pursuant to the terms of the Project Bond as provided in Section 201 of the Agreement. "Original Purchaser" means Chemical Bank, New York, New York. 00211 - 2 - "Owner" means the Original Purchaser, as the initial owner of the Project Bond or, in the event of transfer thereof, as permitted by its terms, and any subsequent owner of the Project Bond. "Person" or words importing persons means and include firms, associations, partnerships (including limited partnerships) societies, trusts, (public or private) corporations or other legal entities including public or governmental bodies as well as natural persons. Project" means that certain equipment for the digital plotter manufacturing facility comprising the Project, as defined in the Agreement. "Project Bond" means the $1,000,000 principal amount of Industrial Development Authority of Anaheim 1984 Industrial Revenue Bond (Sanders Associates Project) authorized in Section 5. hereof. "Project Purpose" means equipping the Project for use in the digital plotter manufacting operations of the Company, located at 2411 West La Palma Avenue in the City of Anaheim, California. "Resolution" means this Resolution as hereafter further duly amended, modified, or supplemented. "Revenues" means (a) the Loan Payments, (b) all other moneys received or to be received by the Authority, or the Owner for the account and on behalf of the Authority, in respect of repayment of the Loan, (c) unexpended moneys in the Escrow Account, (d) all income and. profit from the investment of the Loan Payments and such other moneys, and (e) any moneys received pursuant to the Guaranty. "State" means the State of California. Any reference herein to the Authority or to any member or officers thereof or to the Board of Directors, or to any member or officer of either, shall include those succeeding to their functions, duties or responsibilities pursuant to or by operation of law or lawfully performing their functions. Any reference to a section or provision of the Constitution of the State or the Act, or to a section, provision or chapter of any of the California Codes shall include such section or provision or chapter as from time to time amended, modified, revised, supplemented or superseded, provided that no such change in the Constitution or laws shall be applicable solely by reason of this provision if such change in any way constitutes an impairment of the rights or obligations of the Authority, the Owner or the Company under this Resolution, the Agreement or any other document executed in connection with any of the foregoing, 00211 - 3 - including, without limitation, any alteration of the obligation to pay the Debt Service Charges in the amount and manner, at the times, and from the sources provided in this Resolution, and the Agreement, except as otherwise herein permitted. Unless the context shall otherwise indicate, words importing the singular number shall include the plural number, and vice versa. The terms "hereof", "hereby", "herein", "hereto", "hereunder", and similar terms refer to this Resolution as a whole; and the term "hereafter" means after, and the term "heretofore" means before, the effective date of this Resolution. Words of the masculine gender include the feminine and the neuter, and when the terms so indicate, words of the neuter gender may refer to any gender. The captions and headings of this Resolution shall be solely for the convenience of reference and in no way define, limit or describe the scope of intent of any provisions of Sections of this Resolution. Section 2. Authorization and Terms of Project Bond. It is determined to be necessary to, and the Authority shall issue as provided and authorized herein and pursuant to the authority of the Ordinance, the Project Bond for the purpose of making a loan to assist the Company in the financing the costs of equipping the Project for the Project Purpose. The Project Bond shall be designated "Industrial Development Authority of Anaheim Industrial Revenue Bond, Series 1984 (Sanders Associates Project)". The Project Bond shall be issued as a single instrument in the denomination of $1,000,000, substantially in the fully registered form set forth in the Agreement (which is incorporated herein by reference and made a part hereof fully as if set forth in full herein), and shall be subject to optional prepayment, as set forth herein, in the Agreement and in said form of Project Bond at the place set forth therein. The Project Bond shall be dated as of September 1, 1984, but shall bear interest from the date of its delivery to the Original Purchaser (which date shall appear on the fact of the Project Bond), at the Exempt Rate, as defined in the Agreement, subject to adjustment, as thereinafter provided, until the payment of such principal sum has been made. The principal and interest accrued on the Project Bond shall be payable as set forth in the Project Bond form. The Project Bond shall be payable as to principal and interest in lawful money of the United States, shall be a negotiable instrument in accordance with the laws of the State, and shall express on its face the purpose for which it is issued and such other statements or legends as may be required by law. The Project Bond shall not be transferred by any Owner to other 00211 - 4 - than a Financial Institution and in accordance with its terms and any purported transfer to other than a Financial Institution shall be void and of no effect. Debt Service Charges on the Project Bond shall be payable at the principal office of the Owner. The Project Bond shall be manually signed in their official capacities by the Executive Director and the Secretary of the Authority, and shall bear the seal or a facsimile seal of the Authority. Section 3. Payment of and Security for the Project Bond. The Project Bond shall be payable solely from the Revenues and shall be secured by a pledge and assignment of the Revenues. Anything in this Resolution or the Project Bond to the contrary notwithstanding, neither this Resolution, the Project Bond, nor the Agreement shall constitute a debt or a pledge of the faith and credit of the Authority, and the Project Bond shall contain on the face thereof a statement to that effect and that the Project Bond is payable solely from the Revenues. Section 4. Allocation of Proceeds of Project Bond. The proceeds from the sale of the Project Bond shall be loaned to the Company as set forth in the Agreement. Section 5. Pledge and Assignment of Revenues. The Authority hereby pledges and assigns its right, title and interest in all Revenues to the Owner as security for the payment of the Debt Service Charges, including, without limitation, all Loan Payments which under the terms of the Agreement are to be paid by the Company directly to the Owner for application to the payment of such Debt Service Charges. Such pledge and assignment shall be, and is intended to be, immediately effective without further action; provided that, the Authority shall execute and deliver the Assignment and shall take such other action as may be deemed necessary or appropriate by the Executive to further evidence such pledge and assignment. Section 6. Covenants and Representations of Authority. In addition to other covenants and representations of the Authority contained in this Resolution, the Authority further covenants, represents and agrees with the Owner as follows: (a) Payment of Debt Service Charges. The Authority will, solely from the sources herein provided, pay or cause to be paid the Debt Service Charges on the Project Bond on the dates, at the places and in the manner provided in the Project Bond. (b) Performance of Covenants, Authority and Actions. The Authority will at all times faithfully observe and perform all agreements, covenants, undertakings, stipulations and provisions contained in the Agreement, the Assignment, this Resolution and the Project Bond and all proceedings of its Board of Directors 00211 - 5 - pertaining thereto, on its part to be performed or observed. The Authority represents that it is, and upon delivery of the Project Bond covenants that it will be, duly authorized by the Act, to issue the Project Bond, to execute the Agreement and the Assignment and to provide the security for payment of the Debt Service Charges in the manner and to the extent herein and in the Project Bond set forth; that all actions on its part for the issuance of the Project Bond and the execution and delivery of the Agreement and the Assignment have been or will be duly and effectively taken; and that the Project Bond in the hands of the Owner will be a valid and enforceable special obligation of the Authority according to the terms thereof. (c) Revenues and Assignment of Revenues. Except as otherwise provided in this Resolution and the Agreement, the Authority will not pledge or assign the Revenues or create or permit to be created any debt, lien, or charge thereon other than the pledge and assignment thereof under this Resolution and the Assignment. (d) Recordings and Filings. The Authority will, at the expense of the Company, cause the Agreement and any amendments or supplements to either and any related documents or instruments relating to the pledge and assignment made by it to secure the Project Bond, to be recorded and filed in such manner and in such places as may be required by law in order to fully preserve and protect the security of the Owner. (e) Inspection of Project Books. Ail books and documents in the Authority's possession relating to the Project and the Revenues shall at ail times during the Authority's regular business hours be open to inspection by such accountants or other agents of the Owner as the Owner may from time to time designate. (f) Rights and Enforcement of the Agreement. The Owner, in its name or ~n the name of the Authority, may enforce ali rights of the Authority except for the right of the Authority to any payment or reimbursement due the Authority pursuant to the Agreement and ali obligations of the Company under and pursuant to the Agreement~ whether or not the Authority is in default of the pursuit or enforcement of such rights and obligations. However, the Authority shall do all things and take all actions on its part necessary to comply with the obligations, duties and responsibilities on its part under the Agreement, and will take all actions within its authority to keep the Agreement in effect in accordance with the terms thereof. (g) Arbitrage Provisions. The Authority will restrict the use of the proceeds of the Project Bond in such manner and to such extent, if any, as may be necessary, after taking into account reasonable expectations at the time of the delivery of and payment for such Project Bond, so that the Project Bond will not constitute arbitrage bonds under Section 105(c) of the Code. 00211 - 6 - The Executive Director or any other officer of the Authority having responsibility for issuing the Project Bond is authorized and directed, alone or in conjunction with any of the foregoing or with any other officer, employee, consultant or agent of the Authority or with the Company or any employee, consultant or agent of the Company to give an appropriate certificate of the Authority, for inclusion in the transcript of proceedings for the Project Bond, setting forth the reasonable expectations of the Authority regarding the amount and use of the proceeds of the Project Bond and the facts, estimates and circumstances on which they are based, such certificate to be premised on the reasonable expectations and the facts, estimates and circumstances on which they are based as provided by the Company, all as of the date of delivery of and payment for the Project Bond. (h) Transcript of Proceedings. The Secretary of the Authority, or other appropriate officer of the Authority, shall furnish to the Owner a true transcript of the proceedings, certified by either of said officers, of ali proceedings had with reference to the issuance of the Project Bond along with such information from the records as is necessary to determine the regularity and validity of the issuance of the Project Bond. (i) Additional Financing. At the request of the Company, provided that the Company is not in default under the Agreement and to the extent then permitted by law, including the Act, the Authority shall use its best efforts to provide for the issuance of revenue obligations in addition to the Project Bond for the purpose of (i) acquiring, constructing or equipping additional property for use in connection with the Project or (ii) with the consent of the Owner refunding the Project Bond or any other such revenue obligations previously issued; provided, however, that the proceeds of any additional revenue obligations shall be used solely for the purposes permitted under the Act and in the issuance shall not result in the interest on the Project Bond becoming subject to federal income tax. Before additional revenue obligations are issued, there shall be delivered to the trustee or the Owner the items required by any indenture of trust and resolution providing for an authorizing their issuance. The additional revenue obligations shall be in such principal amounts, be dated, bear interest at such rate or rates, be subject to redemption at such times and. prices, and mature in such years as the resolution authorizing their issuance shall fix and determine. Section 7. Payment and Discharge. If the Authority shall pay or cause to be paid and discharged the Project Bond, the covenants, agreements and other obligations of the Authority hereunder and in the Project Bond, the Agreement and the Assignment shall be discharged and satisfied. 00211 - 7 - Section 8. Payments Due on Sundays and Holidays. In any case where the date of maturity of or due date of interest on or principal of the Project Bond shall be a Sunday or a day on which the Owner is required, or authorized or not prohibited, by law (including executive orders) to close and is closed, then payment of such interest or principal need not be made on such date but may be made on the next succeeding business day on which the Owner is open for business with the same force and effect as if made on the date of maturity or such due date and no interest shall accrue for the period after such date. Section 9. Benefits of Resolution Limited to Parties. Nothing in this Resolution, expressed or implied, is intended to give any person, other than the Authority, the Company, and the Owner, any right, remedy or claim under or by reason of this Resolution. Any covenants, stipulations, promises or agreements in this Resolution contained by and on behalf of the Authority shall be for the sole and exclusive benefit of the Owner. Section 10. Successor is Deemed Included in Ail References to Predecessor. Whenever in this Resolution either the Authority or the Owner is named or referred to, such reference shall be deemed to include the successors or assigns thereof, and all the covenants and agreements in this Resolution contained by or on behalf of the Authority or the Owner shall bind and inure to the benefit of the respective successors and assigns thereof whether so expressed or not. Section 11. Waiver of Personal Liability. No official, Boardmember, agent or employee of the Authority shall be individually or personally liable for the payment of the principal of or interest on the Project bond; but nothing herein contained shall relieve any such official, Boardmember, agent or employee from the performance of any official duty provided by law. Section 12. Authorization to Prosecute Validation Proceedings. Jones Hall Hill & White, A Professional Law Corporation, as bond counsel to the Authority in connection with the Project Bond and Project is hereby authorized and directed to, or cause to be, instituted and prosecuted to completion any proceedings in the local Superior Court deemed necessary by such firm to obtain a judgement upholding the validity of the Project Bond being issued hereunder. 00211 - 8 ~ Section 13. Effective Date. This Resolution shall effect from and after the date of its passage and adoption. take APPROVED, PASSED and SIGNED this 1984. llth day of September, INDUSTRIAL DEVELOPMENT AUTHORITY OF ANAHEIM ATTEST: Sec~'etary .C 00211 - 9 - STATE OF CALIFORNIA ) COUNTY OF ORANGE ) ss. CITY OF ANAHEIM ) I, LEONORAN. SOHL, Secretary of the Industrial Development Authority of Anaheim, do hereby certify that the foregoing Resolution No. IDAA84-2 was passed and adopted at the regular meeting of the Industrial Development Authority of Anaheim held on the llth day of September, 1984, by the following vote of the members thereof: AYES: AUTHORITY MEMBERS: Kaywood, Bay, 0verholt, Pickler and Roth NOES: AUTHORITY MEMBERS: None ABSENT: AUTHORITY MEMBERS: None AND FURTHER CERTIFY that the Chairman of the Industrial Development Authority of Anaheim signed said Resolution on the llth day of September, 1984. IN WITNESS WHEREOF, I have hereunto set my hand and seal this llth day of September, 1984. SECRETARY OF THE IND~ST DEVELOPMENT AU'I'HURITY OF ANAHEIM (SEAL)