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RES-IDA-003 Authorizing Issuance of Variable Rate Demand Industrial Development Revenue BondsRESOLUTION NO. IDA- 003 A RESOLUTION OF THE INDUSTRIAL DEVELOPMENT AUTHORITY OF THE CITY OF ORANGE AUTHORIZING THE ISSUANCE OF THE AUTHORITY'S VARIABLE RATE DEMAND INDUSTRIAL DEVELOPMENT REVENUE BONDS (CONTROL AIR CONDITIONING PROJECT) ISSUE A OF 1997 IN AN AGGREGATE PRINCIPAL AMOUNT NOT EXCEEDING $5,000,000 AND PROVIDING THE TERMS AND CONDITIONS FOR THE ISSUANCE OF SAID BONDS AND CERTAIN OTHER MATTERS WHEREAS, the California Industrial Development Financing Act of the State of California, California Government Code Section 91500, ct ~., as amended (the "Act") permits an industrial development authority to issue revenue bonds for the purpose of financing the acquisition, construction and/or rehabilitation of facilities, including both real and personal property suitable for industrial uses such as assembling, fabricating, manufacturing, processing,or warehousing activities with respect to any products of forestry or manufacturing; and WHEREAS, the Industrial Development Authority of the City of Orange ( the Authority") is authorized by Ordinance No. 4-97 adopted February 11, 1997, of the City Council of the City of Orange, California to assist in financing the acquisition, construction, or rehabilitation of facilities in accordance with provisions of the Act; and WHEREAS, Control Air Conditioning Corporation, a California corporation and Ellis Enterprises (collectively, the "Company"), have requested the Authority to issue its bonds under the Act for the purpose of financing the acquisition, rehabilitation, construction, and equipping of a manufacturing facility located in the City of Orange, California ( the " Project");and WHEREAS, the Project constitutes "facilities", as defined in the Act, and the Company is a "company", as defined in the Act; and WHEREAS, the Authority, by its Resolution No. IDA-002 ( the "Official Action Resolution") adopted on February 11, 1997, accepted the application of the Developer requesting financing of the Project by the Authority which, by its terms, was intended to constitute an official action" toward the issuance of industrial development bonds within the meaning of and for the purposes of any applicable provisions of the Internal Revenue Code of 1986, as amended,and the regulations thereunder; and WHEREAS, the City Council of the City of Orange, by its Resolution No. 8752 adopted on March 25, 1997, approving the financing of the Project; and WHEREAS, the California Industrial Development Financing Advisory Commission ("CIDF AC"), by its duly adopted resolution, has approved the financing of the Project as required by the Act, a) the public benefits from the use of the Project will exceed any public detriment from the issuance of the Bonds, as hereinafter defined: b) neither the completion of the Project nor the operation of the Project will result in the relocation of any substantial operations of the user of the Project from one area to another to the prejudice of any locality within the State of California, or in the abandonment of any substantial operation of such user in any other area in the State of California; c) the Bonds (as hereinafter defined) will be adequately secured and the funds available from the Company will apparently be sufficient to pay the principal of and interest on the Bonds; and d) based on its review of the material submitted to it, the issuance of the Bonds will be fair, just and equitable to the purchaser of the Bonds and the methods to be used in issuing the Bonds are not such as will work a fraud upon the purchaser of the Bonds; and WHEREAS, the Authority wishes to Issue and sell its $5,000 aggregate principal amount Industrial Development Authority of the City of Orange Variable Rate Demand Industrial Development Revenue Bonds (Control Air Conditioning Project), Issue A of 1997 (the Bonds") for the foregoing purposes and to authorize the execution of certain other related documents and agreements; and WHEREAS, the Authority intends that the election of Section 144(a)(4) of the Internal Revenue Code of 1986, as amended, apply to the Bonds; and WHEREAS, there have been presented to this meeting the following: 1) a proposed form of Loan Agreement (the "Loan Agreement"), between the Authority and the Company, together with exhibits thereof; 2) a proposed form of Trust Indenture (the "Indenture"), between the Authority and First Trust of California, National Association, as Trustee (the "Trustee"), providing for the authorization and issuance of the Bonds; 3) a proposed form of Bond Purchase Agreement (the "Purchase Agreement") among the Authority, the Company and A.G. Edward & Sons, Inc. (the Underwriter") with respect to the sale and purchase of the Bonds; and 4) a proposed form of Remarketing Agreement (the "Remarketing Agreement") between the Company and A.G. Edwards & Sons, Inc. (the "Remarketing Agent") with respect to the purchase and remarketing of the Bonds; and 5) a proposed form of Preliminary Official Statement (the "Preliminary Official Statement") relating to the Bonds. NOW, THEREFORE, BE IT RESOLVED: Section 1.Recitals. The above recitals, and each of them, are true and correct. Section 2. Approval of Loan Agreement. The forms, terms, and provisions of the Loan Agreement are hereby approved, and the Chairman, Vice Chairman, or any other member of the Board of Directors is hereby authorized and empowered, acting alone, for, and in the name and on behalf of the Authority, to execute, and the Secretary is hereby authorized and empowered to attest and deliver the Loan Agreement in substantially the form presented to this meeting with such changes as may be approved by the officials executing the Loan Agreement, such approval to be conclusively evidenced by the execution thereof. Section 3. Approval of the Indenture. The forms, terms, and provisions of the Indenture, and the forms, terms, and provisions of the Bonds set forth therein are hereby approved, and the Chairman, Vice Chairman, or any other member of the Board of Directors or the Executive Director of the Authority is hereby authorized and empowered, acting alone, to execute for and in the name and on behalf of the Authority, and the Secretary is hereby authorized and empowered to attest and deliver to the Trustee the Indenture in substantially the form presented to this meeting, with such changes as may be approved by the officials executing the same, such approval to be conclusively evidenced by execution thereof. Section 4. Approval of Purchase Agreement and Sale of the Bonds. The form, terms, and provisions of the purchase Agreement, including the purchase of the bonds by AG. Edwards & Sons, Inc., are hereby approved, and subject to the provisions of Section 8 hereof, the Chairman, Vife Chairman, or any other member of the Board of Directors or the Executive Director of the' Authority is hereby authorized and empowered, acting alone, to execute, for and in the name and on behalf of the Authority, and the Secretary is hereby authorized and empowered to attest and deliver the purchase Agreement in substantially the form presented to this meeting, with such changes as may be approved by the officials executing the Purchase Agreement, and such matters as are authorized by Section 8 hereof, such approval to be conclusively evidenced by the execution thereof. Section 5. Approval of Remarketing Agreement and Remarketing Agreement. The form, terms, and provisions of the Remarketing Agreement are hereby approved together with the appointment of A.G. Edwards & Sons, Inc., as Remarketing Agent for the Bonds. Section 6. Approval of Preliminary Official Statement. The draft of the Preliminary Official Statement relating to the Bonds, presented at this meeting, is hereby approved in substantially the form presented, with such insubstantial changes thereto as may be approved by the Chairman or her designee, and the Chairman or the Executive Director is hereby authorized and directed, acting alone, for and in the name of the Authority, to execute the Final Official Statement, together with such insubstantial changes thereto as may be approved by the Chairman or her designee (collectively the "Official Statement") and the distribution of such Official Statement is connection with the sale of the Bonds is hereby authorized. Section 7. Issuance and Execution of the Bonds. Subject to the Authority receiving notice from CIDF AC that it has approved the financing of the Project and made the determinations required by Section 91531 of the Act or otherwise, and subject to the provisions of Section 8 hereof, the issuance of the Bonds in the principal amount of not to exceed 5,000,000 in accordance with the terms of and secured by the Indenture is hereby approved. Payment of the principal of any redemption premium and the interest on the Bonds shall be made solely from mone-ys held by the Trustee in the funds and accounts established pursuant to Indenture and the payments to be received by the Authority pursuant to the Loan Agreement and said Bonds shall not be deemed to constitute a debt or liability of the State of California or the City of Orange, California. The Chairman and/or the Vice Chairman are hereby authorized and empowered, acting alone, to execute the Bonds in the name and on behalf of the Authority, and the Secretary is hereby authorized to attest the Bonds, subject to the provisions of Section 8 hereof, in the principal amount of not to exceed $5,000,000, in accordance with the Indenture and substantially in the form set forth therein but with such changes as may be approved by the officials executing the Bonds, such approval to be conclusively evidenced by the execution thereof. Section 8. Executive Director or Designee Authorized to Establish Final Terms of Sale of Bonds. The Executive Director or his designee, based on such advice of the Authority staff ("Staff') as the Chairman may deem necessary, is hereby authorized and directed to act on behalf of the Board of Directors to establish and determine (i) the final principal amount of the Bonds, which amount shall not exceed $5,000,000; (ii) the Underwriter's fee for the placement of the Bonds, which amount shall not exceed 60 basis points of the principal amount of the Bonds; and (iii) such other matters as may relate to the final terms and provisions for the sale of the Bonds as may be consistent with the Indenture. The Executive Director or his designee, upon the determination of such matters, is further authorized and directed, in and for the name of the Authority, to execute any supplements or amendments to the Purchase Agreement as, based on such advice, may be necessary to include such matters as so determined to be a part of the Purchase Agreement. The authorization and powers delegated to the Executive Director or his designee by this Section 9 shall be valid for a period of 90 days from the date of adoption of this Resolution. Section 9. Authentication of the Bonds by the Trustee. The Bonds, when so executed, shall be delivered to the First Trust Company of California, National Association the "Fiscal Agent") for authentication by the Fiscal Agent. The Fiscal Agent is hereby requested and directed to authenticate the Bonds by executing the Certificate of Authentication appearing thereon, and to deliver the Bonds, when duly executed and authenticated, to the order of AG. Edwards & Sons, Inc., as the Underwriter thereof, in accordance with the provisions of the Purchase Agreement and in accordance with written instructions executed on behalf of the Authority by the Chairman or the Secretary or the Executive Director, which instructions either of said officers is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and to deliver to the Trustee. Such instructions shall provide for the delivery of the Bonds to the order of said Underwriter upon payment of the purchase price thereof. Section 10. Ap.vroval of Prior Actions. All actions heretofore taken by the officers and agents of the Authority with respect to the sale and issuance of the Bonds are hereby approved, confirmed, and ratified, and the officers of the Authority and their authorized deputies and agents are hereby authorized and directed, jointly and severally, to do any and all things, and to execute and deliver any and all certificates and other documents in addition to those enumerated which they or Best Best & Krieger LLP, Bond Counsel, may deem necessary or advisable in order to consummate the issuance, sale, and delivery of the Bonds, and otherwise to effectuate the purpose of this Resolution. Section 11.Effective Date. This Resolution shall take effect on its adoption. ADOPTED this 13thdayof May 1997. ATTEST: Secretary I hereby certify that the foregoing Resolution was duly and regularly adopted by Industrial Development Authority of the City of Orange at a regular meeting thereof held on the 13th day of May . 1997, by the following vote: AYES: MURPHY, COONTZ, SPURGEON, ALVAREZ NOES: NONE ABSENT: SLATER ABSTAIN: NONE Clw-6A~ i~~Secretary