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HomeMy Public PortalAbout032-1985- AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF FLOATING RATE DEMAND ECONOMIC DEVELOPMENT REVENUE REFUNDING BONDSORDINANCE NO. 32-1985 ORDINANCE' OF THE CITY OF RIC:HMOND, INDIANA AUTHORIZING AND PROVIDING FOR THE ISSUANCE OF FLOATING RATE DEMAND ECONOMIC DEVELOPMENT REVENUE REFUNDING BONDS (BEVERLY ENTERPRISES-INDIANA, INC_ PROJECT) SERIES 1985 IN A PRINICIPAL AMOUNT of ,$1.,450,008, TO FINANCE THE REFUNDING OF $1,4501.0Q0 CITY OF RICHMOND, INDIANA ECONOMIC DEVELOPMENT REVENUE BONUS (BEVERLY ENTERPRISES-INDIANA, INC. PROJECT) 1983 SERIES A, AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT PROVIDING FOR THE PAYMENT OF AMOUNTS SUFFICIENT TO PAY THE PRINCIPAL OF, PREMIUM, IF ANY, AND INTEREST ON SAID BONDS AND PROVIDING FOR THE SALE LOAN OF. THE PROCEEDS OF THE BONDS TO BEVERLY ENTERPRISES-INDIANA,INC.; AUTHORIZING THE EXECUTION OF AN INDENTURE OF TRUST; SETTING FORTH THE TERMS AND CONDITIONS UPON WHICH SUCH BONDS ARE TO BE ISSUED; AND PROVIDING FOR OTHER DIATTERS IN CONNECTION WITH THE ISSUANCE, SALE AND DELIVERY OF THE BONDS. WHEREAS, the City of Richmond, Indiana (the "Issuer") is a municipal corporation of the State of Indiana (the "State"); WHEREAS, the Issuer has full power and is duly authorized by law to issue and sell its obligations :for the purposes contemplated herein, pursuant to the provisions of the Indiana Code, §35-7--1-1 et sec o, as amended (the "Act"); WHEREAS, the Issuer issued, sold and delivered $1,450,000 in aggregate principal amount of its Economic Development: Revenue Bonds (Beverly Enterprises -Indiana, Inc. Project) 198? Series A (the "Series 1983 Bonds") 'to enable the- Company- to finance the cost of acquis.ition-, construction and equipping of_ - nursing home facilities (the "Project") Located ir.-i. f�Tayne County, Indiana; WHEREAS; the Issuer now intends to issug-s sell and deliver its Floating Rate Demand Economic Development Revenue Refunding Bonds (Beverly Enterprises -Indiana, Inc. Project) Series 1985 (the "Bonds"), to pay the cost of refunding the Series 1.98E Bonds, including necessary expenses incidental thereto and to loan such proceeds to the Company by causing such proceeds to be deposited in an escrow fund created in the hereafter -defined Indenture to provide funds for the refunding of the Series. 1.983 Bonds; WHEREAS, the terms and provisions of. said Bonds have now been substantially deterrained and resolved and. said Bonds be issued substantially in the form and with the terms and provisions set forth herein and in the, hereinafter-defi;ied Indenture; WHEREAS, the Issuer proposes to execute and deliver a Loan Agreement dated as of April 1, 1985 (the "Agreement") between the -.Issuer and Beverly Enterprises --Indiana, Inc. (.the "Company") pursuant to which Agreement the Issuer will loan the proceeds from the sale of the Bonds to the: Company; WHEREAS, the Issuer has determined that the payments required from the Company under the Agreement will be sufficient to pay the principal of, premium, if any, and interest on the Bonds; - WHEREAS, the Issuer, as security for the Bonds, will execute the Indenture of Trust dated as of April 1, 1985 (the "Indenture') between the Issuer and Merchants NE)tional Bank & Trust Company, Indianapolis, Indiana, as ' trustee (the "Trustee"), pursuant to which the Issuer will pledge the income and revenues received under the Agreement as security for the Bonds, - WHEREAS, as further security for the Bonds, Beverly Enterprises (the "Parent") will execute a Guaranty Agreement dated as of April 1, 1985 (the "Guaranty"), in favor of. the Trustee, pursuant to which Parent unconditionally guarantees payment of the principal of, premium, if any, and interest on the Bonds and the Company's payment obligations under -the Agreement; WHEREAS, the Company has advised the Issuer that it will request that the Issuer sell the Bonds on a negotiated basis to Stephens Inc. (the "Underwriter") pursuant to a Contract of Purchase substantially in the form attached hereto; - WHEREAS, the Underwriter will reoffer the Bands to certain institutions pursuant to an Official Statement (the "Official Statement"); WHEREAS, the Act authorizes the issuance of obligations such as the Bonds for the purpose of purchase, redemption or payment of outstanding bonds such as the Series 1983 Bends; WHEREAS, the Issuer desires to authorize the refunding of the Series 1983 Bonds through the issuance of the Bonds; WHEREAS, it is necessary that the Issuer designate Merchants National Bank & Trust ;_ompany, as Trustee under the. Indenture; WHEREAS, copies of the forms of the following docume:Its relating to the transactions described above have been filed with the Issuer: -2- i A. The Agreement; B. The Indenture; C. The Contract of Purchase; D. The Guaranty, and E. The Official Statement. WHEREAS, on the basis of the foregoing and in connection with the issuance of the Series 1983 Bonds, the Issuer has determined that the Project will promote the industrial development and economy of Wayne County, Indiana (the "County") and will be of benefit to the inhabitants of the County and the State and will increase their commerce and promote their safety, health, welfare, convenience or prosperity, and that the Issuer, in assisting with the financing of the acquisition, construction, equipping and installing of the Project and the refunding of the Series 1983 Bonds, will be acting in furtherance of the public. purposes of the Act; and WHEREAS, the Issuer. has determined that it is appropriate for the Issuer to issue the Bonds and use the proceeds thereof for the purposes set forth herein. NOW, THEREFORE, BE IT RESOLVED by the Issuer as follows: 1. It is hereby ascertained, determined and declared as follows: A. The Issuer is authorized and empowered by the .Act to loan the proceeds of the Bends to the Company to acquires construct, reconstruct, improve, rehabilitate and equip projects, as described in the Act, including nu):sing home facilities, including land, rights in land, buildings and other structures, machinery, equipment, appurtenances and facilities incidental thereto, and. other improvements. necessary or convenient therefor, all to improve the prosperity and welfare of the State and its inhabitants, to improve living conditions in the State, and to improve purchasing power and opportunities for gainful employment, and is further enpowered to issue its revenue refunding bonds to redeem bonds issued for such purposes. B. The Project constitutes and will .constitute a project within the meaning of the Act. -3- C. The Project is desirable and will further the public purposes of the Act, in that it will improve the health and welfare of the County and the State and their inhabitants, improve living conditions in the County and the State, and improve purchasing power and opportunities for gainful employment, for the Issuer to issue and sell the Bonds for the purpose of providing funds to refund the Series 1983 Bonds, as provided herein. D. The Project is appropriate to the needs and circumstances of, and shall make a significant Contribution to the ,growth of the County and the State, shall provide or preserve gainful employment, and shall serve. a public purpose by advancing the economic prosperity and the general welfare of the State and its people as set forth in the Act. E. Based upon the Financial information about the Company and the Parent filed with the Issuer, the Company and the Parent are financially responsible and fully capable and willing -to fulfill their obligations under the Agreement and the Guaranty, including the obligation to make payments in the amounts and at the times required, to operate, maintain and repair the Project at their own expense and to carry out the other responsibilities to be imposed under the Agreement, due consideration having been given to the Company's and the Parent's ratio of current assets to current liabilities, nef.worth, earning trends, coverage of all fixed charges, the nature of the nursing home industry, its inherent stability, and other factors determinative of the capability of the Company and the Parent, financially and otherwise, to fulfill their obligations consistently with the purposes of the tact. F. Adequate provision is made under the Agreement for the operation, repair and maintenance of the Project at the expense of the Company and for- the payment of the principal of, premium, if any, and interest on the Bonds - when and as the same become due and payable, and for the payment by the Company of all other costs incurred in connection with the financing, construction and administration of the Project and the refunding of the Series 1983 Bonds which are not paid out of the proceeds from the sale of the Bonds or otherwise. G. The costs to be paid from the proceeds of the Bonds shall be costs of a project within the meaning of the Act. H. A negotiated sale of the Bonds is required and necessary, and is in the best interest of the Issuer, For the following reasons: the Bonds will be special and limited obligations of the Issuer payable solely out of revenues and proceeds derived by the Issuer from the Project, and the Company will be obligated for the payment of all costs in connection with the financing, construction and administration of the Project which are not paid out of the Bond proceeds or otherwise and for operation and maintenance of the Project; the cost of issuance of the Bonds, which will be borne directly or indirectly by the Company, would be greater if the Bonds are sold at public sale by competitive bids than if the Bonds - are sold at negotiated sale, and a public sale by competitive bids would cause undue delay refunding the Series 1983 Bonds; revenue bonds having the characteristics of the Bonds are typically and usually sold at negotiated sale; the Company has indicated that it may be unwilling to proceed with - the Project unless a negotiated sale of the Bonds is authorized by the Issuer; and authorization pf a negotiated sale of the Bonds is necessary in order to serve the purposes of the Act. I. The purposes of the served by the acquisition, installing of the Project by the Agreement. Act will be most effectively construction, equipping and the Company, as provided in 2. The refunding of the Series 1983 Bonds as provided in the Agreement and the Indenture is hereby authorized. 3. For the purpose of paying- the cost, in whole or in part, of refunding the Series 1983 Bonds, the issuance of revenue bonds of the Issuer to be known as City of Richmond, Indiana Floating Rate Demand Economic Development Revenue Refunding Bonds (Beverly Enterprises -Indiana. Inca Project) Series 1985, is hereby authorized. The Company has agreed that if Bond proceeds are not- sufficient to pay all of the costs of refunding the Series 1983 Bonds,. including payment of principal of, accrued interest on and costs of issuance, the Company will pay all such excess costs in order to complete the refunding of the Series 1983 Bonds. Any such payments made by the Company shall. in no manner affect or reduce the payments required by the Agreement. 9. The Bonds will be dated their date of authentication, except as provided in the Indenture, and shall mature on September 1, 2008. Prior to the Conversion Date (as defined in the Indenture), the Bonds shall bear interest at a floating rate not to exceed fifteen percent (15a) per annum, and from -5- and after the Conversion. Date, a fixed rate calculated as set provided in the Indenture. the Bands will bear interest at forth in the Indenture, all as The Bonds are issued pursuant to the provisions of the Act and are not'in any respect a general obligation of the City ❑f Richmond, Indiana, the State, or any political subdivision thereof, nor are they payable in any manner from revenues raised by taxation, but such Bonds shall be payable solely from the revenues and moneys pledged therefor. The form of the Bonds and the provisions for signatures, authentication, payment, registration and redemption- shall be substantially as set forth in the Indenture hereinafter authorized. - The Bonds shall be issued in a principal amount ❑f $1,450,000. 5. The payments to be made by the Company under the Agreement (other than payments of certain expenses of Issuer relating to the Project and the Bonds) are sufficient to pay the principal of, premium, if any, and interest on the Bonds as the same become due and payable, and said payments shall be pledged for that purpose pursuant to the Indenture. 5. The execution, delivery and performance of the Agreement and the Indenture are hereby authorized. The Agreement and the Indenture shall be in substantially the forms submitted at this meeting, with such changes, insertions or omissions as may be approved by the Mayor of the Issuer, whose approval thereof shall be conclusively evidenced by his execution of each such instrument, 7. The execution and delivery of the Bonds to the Agent for authentication and the authentication and redelivery of the authenticated Bonds to or upon the order of the 'original, purchaser thereof ❑r its duly authorized attorney--in-fact against receipt by the Agent of the purchase price for the Bonds, are hereby authorized. -6- 8. The Clerk or deputy Clerk of the Issuer is hereby authorized to attest and affix the seal of the Issuer to the Bonds, the Indenture. the Agreement, and any other document executed by the Mayor of the Issuer pursuant to this Ordinance. 9. Merchants National Bank & Trust Company, Indianapolis, Indiana is hereby designated Trustee under the Indenture, and The Barak of New York is appointed Agent and bond registrar for the Bonds. 10_ The preparation and use of the Official Statement by the Underwriter in connection with the sale of the Bonds is hereby ratified, confirmed and approved. 11. The acceptance, execution, delivery and performance of the Contract of Purchase is hereby authorized. Such. document shall be in substantially the form submitted to this meeting, with such changes, insertions or omissions as may be approved by the Mayor of the Issuer whose approval thereof shall be conclusively evidenced by his execution of such instruments. The Mayor ..of the Issuer is hereby authorized to execute the Contract of Purchase and the official Statement. 12. The use of the proceeds from the sale of the Bonds to refund by redemption the Series 1983 Bonds is hereby authorized. Merchants National Bank & Trust Company as trustee under the Indenture of Trust pursuant to which the Series 1983 Bonds were issued is authorized to give the notice of redemption required thereunder at such time as directed by the Company or the Parent, provided that such redemption of the Series 1983 Bonds shall be completed within 180 days from the date of issuance of the Bonds. 13. The Mayor of the Issuer and Cleric or Deputy Clerk of the Issuer are hereby authorized to do and perform all s�:_ch things and acts as' each shall deem necessary or appropriate in furtherance of the issuance of the Bonds and the carrying out of the transactions authorized by this Ordinance or contemplated by the instruments referred to in this Ordinance. 14_ The Mayor of the Issuer- is authorized to Amake an election pursuant to Section 103(b)(6)(D) of the Internal Revenue Code of 1954, as amended, and to sign and file or cause to be filed all documents necessary to accomplish and perfect such election and such election and all actions heretofore made and taken or caused to be taken are in all respects approved., ratified and confirmed. 7... 15. The Indenture, the Agreement, the Contract of Purchase and the Guaranty are incorporated herein by reference hereto. 16. The mayor of the Issuer and the Clerk or Deputy Clerk are hereby authorized to approve any changes in any of the documents lasted in paragraph 15 above without any further action of the Issuer if such changes do not in the opinion of counsel to the Issuer materially adversely affect. the rights and obligations of the Issuer under the aforesaid documents_ 17. vo covenant, obligation or agreement herein contained or contained in the Indenture or the Agreement shall be deemed to be a covenant, obligation or agreement of any officer, member, agent or employee of the Issuer in his individual capacity, and no such officer, member, agent or employee of the issuer shall be personally liable on the Bonds or be subject to personal liability or accountability by reason of the issuance thereof. 18. The actions pf the Issuer herein described are undertaken only upon the condition that the company and the Parent, agree by its acknowledgment and acceptance hereof as shown below, to indemnify, defend and hold the Issuer and - its officers, members, agents, or employees harmless from and against any pecuniary liability, loss or damage, including claims, allegations, actions, suits or proceedings, and specifically including but not limited -`to any thereof arising out of or in connection with, arising out of or predicated upon the authorization, offering, underwriting, sale or issuance of the Bonds or the acquisition, construction,- equipping, ownership, operation, or maintenance of the Project, and to reimburse or otherwise pay on behalf of the Issuer ayj.Y and 8.11 expenses incurred by the Issuer its officers, members, agents or employees, including but not :limited to attorneys fees and costs of legal or administrative proceedings f in, cannecti.oz7 with any of the foregoing. This indemnity shall be superseded by a similar indemnity from the Company contained in the Agreement executed in connection with the issuance of the Bonds, and if the Bonds are. not issued and delivered, this indemnity shall survive the termination or revocation of this Ordinance. 19. if any section, paragraph, clause or provision of this Ordinance shall be held invalid, the invalidity thereof i shall not affect the remaining provisions.. SE 20. The dates of any of the documents referred to herein may be changed without any further action by the Issuer, and the eiecution of the same by the Mayor of the Issuer shall be sufficient in all respects to evidence the approval of said change by the Issuer. . 21. All motions, orders, resolutions, and parts thereof, in -conflict herewith, are hereby repealed, and this Ordinance shall take effect and be in force immediately after its passage and approval. Adopted this lst day of April, 1985. ATTEST : (SEAL) Clerk CITY OF RICHMOND, INDIANA f By �?�/e iding Off:Lce'�of �the Common Council Presented by me to the Mayor of the City of Richmond, Indiana on the day of , 1985, at the hour of /a: ao o`clock ra .m. Clerk ay �=day d and signed by me on of 4, 1985, at the hour of oico o clock Iq .m. Zayo r 5 L) H D �a H v 0 4 N 0 U V w ; tH 41 �� (Qji }.� ♦ •j • ill • if7 11+ • �7 El •