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HomeMy WebLinkAboutAuthorozong Revenue Bonds Char-King Inc� Wk. rel � Passed by the Common. Council of the City of South Bend, Indiana A August 14 Yq 78 IRENE K. GAMMON Presented by me to the Mayor of the City of South Bend, Indiana Approved and signed by A uaust 15 r9 78 Clerk of Common Council City Clerk IRENE K. GAMMON -EN 11615 08/03/78 100103 -C /mrr ORDINANCE NO. AN ORDINANCE of the CITY OF SOUTH BEND, INDIANA authorizing the issuance and sale of additional revenue bonds for the purpose of loaning the proceeds to CHAR -KING, INC. for the purpose of financing the completion of certain economic development facilities which were originally financed by the City; autho- rizing the execution and delivery of a First Supplemental Loan Agreement between the City and Char -King, Inc.; authorizing the execu- tion and delivery of a First Supplemental Mortgage and Indenture of Trust securing said bonds; and confirming the sale of said bonds to the purchaser hereof, and certain other related matters. The City of South Bend, Indiana, a municipal corpor- ation organized and existing under and by virtue of the laws of the State of Indiana (hereinafter referred to as the "Issuer "), is authorized and empowered by the provisions of Title 18, Arti- cle 6, Chapter 4.5 of the Indiana Code of 1971, as amended (the "Act ") to issue its economic development revenue bonds to finance in whole or in part the cost of the acquisition and construction of certain economic development projects in order to provide for the diversification of economic development facilities and provide an additional tax base in and near the City of South Bend. The Issuer is further authorized by the Act to secure such revenue bonds by a pledge of the income and revenues derived by the Issuer from such facilities, and the Act provides that the financing agreement between the Issuer and the user of the facili- ties shall provide for payments in an amount not less than an amount sufficient to pay the principal of, premium, if anv, and interest on the bonds authorized for the financing of the facili- ties. The Issuer has heretofore issued its Economic Develop- ment Revenue Bonds (Char -King, Inc. Project) in the principal amount of $1,100,000 (the "Series 1975 Bonds ") under the provi- sions of the Act and a Mortgage and Indenture of Trust dated as of December 15, 1975 (the "Original Indenture ") from the Issuer and Char -King, Inc (-he "company") to s,. Joseph Ea k' and Trust Company, as Trustee (the 'Trustee "), in order to zrovlde funds with which to finance the acquisition, construction and equipping of the Project, as defined in the Loan Agreement by and between the Issuer and the Company (the "Original Loan Acreement ") dated as of December 15, 1975. Pursuant to an ordinance duly adopted by the Common Council of the Issuer on December 15, 1975 and approved and signed by the Mayor of the Issuer on December 17, 1975, the Issuer has heretofore executed and delivered to the Trustee the Original Indenture, whereby the Issuer granted, bargained and conveyed to the Trustee, and its successors in said trust, cer- tain property of the Company including the Project to be held by the Trustee in trust in accordance with the provisions of the Original Indenture for the equal and proportionate benefit, security and protection of all bonds issued and to be issued thereunder in accordance with the provisions thereof. The Issuer is authorized by law and deems it necessary to borrow additional moneys for the purpose or paying the cost of completing the Project and carrying out its obligations under the First Supplemental Loan Agreement, as hereinafter defined. It is necessary to amend the Original Indenture to, among other things, authorize the issuance of additional parity bonds, and the Issuer desires to provide for the issuance under the Original Indenture, as supplemental and amended by the First Supplemental Indenture, as hereinafter defined (said Original Indenture as supplemented by the First Supplemental Indenture is hereinafter referred to as the "Indenture ") of a new series, namely the Series 1978 Bonds, as hereinafter defined, to be dated and to mature as provided herein and to be secured by and to contain such terms and provisions as are set forth in the Inden- ture. The Issuer has made the necessary arrangements with the Company for the financing of the completion of the Project. The issuance of revenue bonds by the Issuer as herein- after authorized will in all respects conform to the provisions and requirements of the Act. It has now been determined that the estimated amount necessary to finance the cost of completing the Project, includ- ing necessary expenses incidental thereto, requires that addi- tional revenue bonds of the Issuer in the principal amount of $400,000 be authorized as hereinafter provided and that such bonds shall be designated Economic Development Revenue Bond, Series 1978 (Char -King, Inc. Project) (hereinafter referred to as the "Series 1978 Bond "). The proposed plan of financing has been submitted for approval to the South Bend Economic Development Commission. The South Bend Economic Development Commission has rendered its Report Making Certain Estimates on the financing of proposed economic development facilities for the Company and the South Bend Plan Commission has commented favorably thereon. The South Bend Economic Development Commission, after public hearing, adopted a resolution on the same date, which resolution has been previously transmitted hereto, finding that the additional financing of certain economic development facili- ties for the Company complies with the purposes and provisions of I.C. (1971) 18- 6 -4.5, as amended, and that such additional financ- ing will be of benefit to the health and welfare of the citizens of the City of South Bend. The South Bend Economic Development Commission has heretofore approved and recommended the adoption of the proposed form of ordinance by this Common Council. Necessary arrangements have been made for the issuance and sale of the Series 1978 Bond. The Issuer has caused to be prepared and presented to this meeting proposed forms of the following instruments: (a) a form of First Supplemental Loan Agreement (the "First Supplemental Loan Agreement ") dated as of July 1, 1978 by and between the Issuer and the Company; and -3- (b) a form of First Supplemental Mortgage and Indenture of Trust dated as of July 1, 1978 (the "First Supplemental Indenture "), by and between the Issuer and the Trustee. It appears that each of the instruments above referred to which are now before this meeting is in appropriate form and is an appropriate instrument to be executed and delivered for the purposes intended. Pursuant to and in accordance with the provisions of the Act, the Issuer is now prepared to sell its Series 1978 Bond and the Issuer is willing to loan the proceeds thereof to the Company and the Company will agree to repay the loan in amounts sufficient to pay the principal of, premium, if any, and interest on the Series 1978 Bond, together with related expenses, all as set forth in the First Supplemental Loan_ Agreement. It is necessary to authorize the sale of said Series 1978 Bond to St. Joseph. Bank and Trust Company, South Bend, Indiana (the "Bond Purchaser ") and to authorize certain other matters in connection therewith. NOW, THEREFORE, Be It Ordained by the Common Council of the City of South Bend, St. Joseph County, Indiana, as follows: Section 1. Ordinance No. 5436 -75 adopted by the Issuer on December 15, 1975 is hereby found to be in the best interest of the Issuer and is in all respects approved, ratified, con- firmed, readopted and declared to be and remain in full force and effect from and after the date of its adoption and execution. Section 2. Based upon representations made by the Com- pany to the Issuer, the Issuer hereby determines that the aggre- gate cost of the Project upon completion will be not less than 51,500,000; that the location of the Project within the bound- aries of the City of South Bend, Indiana, will promote the pur- poses of the act; and it is hereby determined that the completion of the Project will require additional financing of an amount not less than 8400,000, will be in furtherance of the public purposes of the act by increasing employment opportunities, providing for -1- the d ie_sifiC wCn of ecCnom -c development f-- c itles and pro- viding an additional tax base in and near the City of South Bend,. Indiana, and is hereb' =,, approved; and that, therefore, providing for the completion of the Project through the issuance and sale of the Series 1978 Bond is in the public interest and complies with the purposes and provisions of the Act and is hereby ap- proved. Section 3. It is hereby found that the financing of the completion of the Project, referred to in the First Supple - mental Loan Agreement, previously approved by the South Bend Economic Development Commission and presented to this Common Council, the issuance and sale of the Series 1978 Bond, the lending of the proceeds thereof to the Company for the completion of the Project, the payment of the Series 1978 Bond by the Note payments of the Company under the First Supplemental Loan Agree- ment and First Supplemental Note of the Company to the Issuer (the "First Supplemental Note "), and the securing of the Series 1978 Bond by the mortgaging of the completed Project to the Trustee under the indenture will be of benefit to the health and welfare of the City of South Bend, and its citizens. It is further found that the proposed facilities will not have an adverse competitive effect on similar facilities already con- structed and operating in the City of South Bend, Indiana. Section 4. The forms of the First Supplemental Loan Agreement, the First Supplemental Note and First Supplemental indenture approved by the South Bend Economic Development Com- mission are hereby approved and all such documents (hereinafter collectively referred to as the "Financing Agreements ") shall be incorporated herein by reference and shall be inserted in the minutes of the Common Council and kept on file by the City Clerk. Section 5. For the purpose of financing the cost of completing the Project, including necessary expenses incidental thereto, there is hereby authorized to be issued the Economic Development Revenue Bond, Series 1978, (Char -King, Inc. Project) -5- the �� Series '978 Bond ") o.: t e issuer in the p-Y_; rl-^ y pal amount o� Four Hundred Thousand Dollars (5400,000), to be issued in com- pliance with and under authority of the provisions of the Act, this ordinance and the Indenture, which Series 1978 Bond will be payable as to principal, premium, if any, and interest from the First Supplemental Note payments made by the Company under the First Supplemental Loan Agreement and First Supplemental Note and from other revenues and income relized under the First Supple- mental Loan Agreement, or as otherwise provided in the above described First Supplemental Indenture. The Series 1978 Bond shall never constitute a general obligation of, an indebtedness of, or a charge against the general credit of the City of South Bend, Indiana. Section 6. The City Clerk is authorized and directed to sell the Series 1978 Bond to St. Joseph Bank and Trust Company, at a rate of interest not to exceed 7 -3/4% per annum and at a price of 100% of the principal amount thereof. The Series 1978 Bond shall be issuable as a single fully registered bond without coupons; shall be dated July 1, 1978, and shall mature on June 15 of each of the years and in the principal amount as follows: Year Principal Amount 1979 $33,000 1980 33,000 1981 33,000 1982 33,000 1983 33,000 1984 33,000 1985 33,000 1986 33,000 1987 34,000 1988 34,000 1989 34,000 1990 34,000 The Series 1978 Bond shall be subject to redemption at the times, under the circumstances, in the manner, at the prices and with the.effect as prescribed in Article III of the Indenture, which terms are, by this reference, incorporated herein. Section_ 7. The Mayor and City Clerk are authorized and directed to execute the documents constituting the Financing Agreements a- prove herein on behalf Of the City of Soup;^ =e 1 � nu and an,,,, other document which may be necessary or desirable to consummate the transaction, including the Series 1978 Bond au- thorized herein. The Series 1978 Bond shall be executed in the name and on behalf of the Issuer by the manual or facsimile Official signature of the Mayor and attested by the manual or facsimile official signature of the City Clerk, the Series 1978 Bond shall have the corporate seal of the Issuer impressed or reproduced thereon and shall be authenticated by the endorsement of the Trustee under the Indenture. The Series 1978 Bond may be signed and sealed on behalf of the Issuer by those persons who, at the actual date of the execution of the Series 1978 Bond, shall be the proper officers of the Issuer, although at the nominal date of the Series 1978 Bond any such person shall not have been such officer of the Issuer. The City Clerk is author - ized to arrange for delivery of the Series 1978 Bond to the Bond Purchaser, payment for which will be made to the Trustee. The Trustee is hereby authorized to receive and receipt for the proceeds of said Series 1978 Bond on behalf of the Issuer and to hold, invest and disburse said proceeds in accordance with the provisions of the Indenture. .Section 8. The provisions of the Ordinance and the First Supplemental Indenture securing the Series 1978 Bond shall constitute a binding contract between the Issuer and the holder of the Series 1978 Bond, and after the issuance of said Series 1978 Bond, this Ordinance shall not be - repealed or amended in any respect which would adversely affect the rights of such holder, so long as said Series 1978 Bond or the interest thereon remains unpaid. Section 9. The Series 1978 Bond shall be issued in compliance with and under authority of the provisions of the Act, this ordinance and the Indenture. Section 10. while the Series 1978 Bond shall remain outstanding and unpaid, the Issuer hereby covenants and agrees -7- with the holders from tine to time of the Series 1978 Bond that it will not issue any additional bonds or incur any obligations of any sort secured by a lien prior to or on a parity with the lien of the Series 1978 Bond, except as expressly permitted under the provisions of the Indenture. Section 11. The maintenance and repair costs of the Project, all taxes in connection therewith and other charges, all as specified in the Original Loan Agreement, as supplemented and amended by the First Supplemental Loan Agreement (the Original Loan Agreement as supplemented and amended by the First Supple - mental Loan Agreement in hereinafter referred to as the "Loan Agreement ") will be assumed and paid by the Company under the Loan Agreement and, accordingly, the Issuer has no obligation with respect thereto and all such costs, expenses, taxes, fees and charges shall be paid by the Company, as provided in the Loan_ Agreement. Section 12. It is hereby found, determined and declared by the Issuer that the amounts payable under the Loan Agreement are the amounts necessary in each year to pay the principal of and interest on the Series 1978 Bond and that the payments and other monetary obligations undertaken by the Company in the Loan Agreement are sufficient to satisfy monetary obligations required by the Act to be undertaken by the Company in the Project. The Loan Agreement, provides that the Company shall operate and maintain the Project and carry all proper insurance with respect thereto. Section 13. The Series 1978 Bond shall be limited a obligation of the Issuer, and, except to the extent payable from the Series 1978 Bond proceeds or the investment thereof, the principal of and interest on which shall be payable solely from the sources specified in, and be secured as provided by, the Indenture. The Series 1978 Bond and the interest thereon shall not be deemed to evidence a debt of the Issuer or a loan or credit -8- e l-ar,aed 1by _ ithin t'-he mean_ ng o � �i: °J const? ill �1oT? 1 or s to tu- _ a tory provision. Further, the Series 1978 Bond and the interest thereon shall not be deemed to- constitute a debt or liability of the Issuer or the State of Indiana or of any political subdivi- sion thereof within the meaning of any constitutional or statu- tory provision of the State of Indiana, and its issuance shall not, directly or indirectly or contingently, obligate the State of Indiana or any political subdivision thereof to levy any form of taxation therefor or to make any appropriation for its payment. Nothing in the Series 1978 Bond or in the Indenture or the proceed- ings of the Issuer authorizing the issuance of the Series 1978 Bond or in the Act shall be construed to authorize the Issuer to create a debt or liability of the State of Indiana or any political subdivision thereof within the meaning of any constitutional or statutory provision of the State of Indiana. The nature of the obligation represented by the Series 1978 Bond is as more fully set forth in the Indenture. Nothing in this resolution, the Loan Agreement or the Indenture, shall be construed as an obligation or commitment by the Issuer to expend any of its funds other than (i) the proceeds of the sale of the Series 1978 Bond, (ii) certain of the revenues and receipts to be received from the Project as provided in the Indenture, (iii) any proceeds accruing to the issuer of insurance on the Project, (iv) any moneys accruing to the Issuer on account of any taking or condemnation of title to the whole or any part of the Project, (v) any other moneys derived from or accruing to the Issuer from the Project, and (vi) any moneys arising out of the investment or reinvestment of said proceeds, revenues or moneys. Section 14. The Mayor and City Clerk for and on behalf of the Issuer, be and they are hereby authorized and directed to do any and all things necessary to effect the execution and delivery of the Loan Agreement by the Company, the execution and delivery of the Indenture and acceptance thereof by the Trustee, -9- the performance of all obligations of the Issuer under and our- suart to the Loan agreement and -the Indenture, the execution and delivery of the Series 1978 Bond, and the performance of all other acts of whatever nature necessary to effect and carry out the authority conferred by this ordinance and by the Loan Agree- ment, and the Indenture. The Mayor and the City Clerk be, and they are hereby further authorized and directed for and on behalf of the Issuer, to execute all papers, documents, certificates and other instruments that may be required for the carrying out of the authority conferred by this ordinance and by the Loan Agree- ment and the Indenture, or to evidence the said authority and its exercise. The Trustee is hereby authorized to receive and receipt for the proceeds of the Series 1978 Bond on behalf of the issuer and to hold, invest and disburse said proceeds in accordance with the provision of the Indenture. All provisions of the Indenture, including those with respect to the acquisition and construction of the Project, the issuance and delivery of the Series 1978 Bond and the receipt, custody, investment and application of the proceeds of the Series 1978 Bond and the payments and other revenues to be derived from the Project, are hereby in all respects adopted, ratified and confirmed for and on behalf of the Issuer. Section 15. This Common Council hereby elects to have the provisions of Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, applied to the One Million One Hundred Thousand dollar ($1,100,000.00) principal amount of Series 1975 Bonds previously authorized on December 15, 1975, together with the Four Hundred Thousand dollars ($400,000) principal amount of the Series 1978 Bond herein authorized (aggregated amount of the issues is One Million rive Hundred Thousand dollars ($1,500,000)]; and that the Mayor and City Clerk be and they hereby are authorized, empowered and directed to take any and all further action which may be required to implement and effectuate such election, including without limitation the preparation and filing of such statement -?0- or statements or other document or documents as may be deemed by them to be necessary or advisable in order to comply with the procedures set forth in Section 1.103- 10(b)(2)(vi) of the Income Tax Regulations (26 CFR Part 1) under Section 103 of the Internal Revenue Code of 1954, as amended, and all acts heretofore taken by them in this connection are hereby ratified and confirmed. Sec_ tion 16. It is hereby recognized that the St. Joseph Bank and Trust Company, South Bend, Indiana, is Trustee under the Indenture. The Issuer hereby recognizes, agrees to and approves the deposit of the proceeds of the Series 1978 Bond with the St. Joseph Bank and Trust Company, as Trustee which amount shall be held by the Trustee in accordance with the provisions of the Indenture. The Mayor and City Clerk of the Issuer are hereby authorized to direct the Trustee to authenticate and deliver the Series 1978 Bond. Section 17. The Mayor and the City Clerk are hereby authorized and directed to cause to be prepared an issue of $400,000 principal amount of the Series 1978 Bond in the form, bearing interest at the rate, and having the other terms and provisions specified in the First Supplemental Indenture. Section 18. The Mayor and the City Clerk, as appro- priate, are hereby authorized and directed to execute such cer- tifications, financing statements, assignments, documents and other instruments as are in the opinion of counsel to the Issuer and nationally recognized bond counsel necessary to perfect the pledges set forth in the First Supplemental Indenture and the First Supplemental Loan Agreement and any such other documents and instruments as may be required to effectuate any portion of the financing transcation. Section 19. The provisions of this Ordinance are hereby declared to be separable and if any section, phrase or provision shall for any reason be declared by a court of com- petent jurisdiction to be invalid or unenforceable, such declara- tion shall not affect the validity of the remainder of the Sec- tions, phrases and provisions hereof. -11- Section 20 . Sou.h Bend Ordinance N043 _ gassed by the Common Council On July 24, 1978 is hereby repealed, and all other Ordinances or resolutions in conflict herewith are, to the extent of such conflict, hereby repealed. Section 21. This Ordinance shall be in full force and effect from and after its passage by the Common Council and approval by the Mayor. FILED IN CLERK'S OFFICE 1st READINd $ -1 PUBLIC HEARINd S— 2nd READING 8� y �� AUG 81978 NOT APPROVED REFERRED Irene Gammon PASSED �'- l q- -> 8 • •o GM MR& SOUTH BEND. IND. -12- WILLIAM E.VOOR GUY H.McMICHAEL LLOYD M. ALLEN KENNETH P. FEDDER GEORGE E. HERENDEEN MICHAEL P.BARNE5 JOHN B. RAMMING ANTHONY D. KOWALS BRIAN J. MAY VOOR, MCMICHAEL, ALLEN, FEDDER 8 HERENDEEN ATTORNEYS 8 COUNSELORS AT LAW 300 FIRST BANK BUILDING SOUTH BEND, INDIANA 46601 August 8, 1978 Members of the South Bend Common Council County -City Building 4th Floor South Bend, Indiana 46601 RE: Ordinance of Economic Developement Bond (CHAR KING, INC. PROJECT) Dear Gentlemen: AREA CODE 219 234 -6061 OF COUNSEL: WILLIAM 0. JACKSON On July 24, 1978, the Council enacted Ordinance No. 6398 -78, pertaining to the above captioned. I have this date filed a new form ordinance pertaining to the project wherein I have in said Section 20, specifically requested that the Council repeal Ordinance No. 6398 -78, which was passed by the Common Council on July 24, 1978. The purpose for the filing of the new ordinance is to correct and clarify the necessary prerequisite insofar as having the Common Council make the necessary election pursuant to the Internal Revenue Code of 1954. KPF %gwo pectfully, KENNETH P. FEDDER ATTORNEY FOR THE ECONOMIC VELOPMENT COMMISSION Fit ED IN CLERK'S Of FICE AUG 81978 Ire11e Gararmon C IT Y CLERk SOUT" aft 1N0,