AGENDA July 27,2010

COUNTY ADMINISTRATOR

SUSAN s. MURANI5HI DONNA L.fNTON

COUNTY AOMINISTRATOR ASSISTANT COUNTY ADMINIS1"RATOR

July 13,2010

Industrial Development Authority of Alameda County Administration Building Oakland, CA 94612

Dear Authority Members:

SUBJECT: AUTHORIZE THE ISSUANCE AND SALE OF UP TO $6,000,000 IN VARIABLE RATE INDUSTRIAL DEVELOPMENT BONDS TAX-EXEMPT SERIES 2010A FOR MARK H. K. CHIM AND MARILYN M. CHIM, AND THEIR SUCCESSORS AND ASSIGNS, (THE "APPLICANT") ALL TO BE LEASED TO XINTEC CORPORATION, D/B/A CONVERGENT LASER TECHNOLOGIES, AND ITS SUCCESSORS ANn ASSIGNS (THE "USER") AND THE EXECUTION AND APPROVAL OF RELATED DOCUMENTS, AGREEMENTS AND ACTIONS

RECOMMENDATION:

It is recommended that the Authority adopt the attached resolution authorizing the issuance and sale of up to $6,000,000 of tax-exempt Industrial Development Bonds (IDS) for the Mark H. K. Chim and Marilyn M. Chim, and their successors and assigns, (collectively, the "Borrower"), all to be leased to Xintec Corporation d/b/a Convergent Laser Technologies, and its successors and assigns (the "User") project and authorize the execution and approval of related documents, agreements and actions.

DISCUSSION/SUMMARY:

The Authority will express its intention to issue a separate series of variable rate, tax-exempt lOB for Mark H. K. Chim and Marilyn M. Chim with the adoption of an Approving Resolution on July 27, 2010.

The $6,000,000 in tax-exempt bonds will be used to finance the acquisition and renovation of a building totaling 60,000 square feet located on three acres of land; and acquire, purchase and install fumiture and equipment therein, located at 1201 Harbor Way Parkway, Alameda, California, all of which will be utilized by Xintec Corporation d/b/a Convergent L~5er Technologies.

Convergent Laser Technologies needs to supplement the facility It currently occupies at 1660 South Loop Road, Alameda, California, where 20 people are employed. The new facility is located one-half mile from the current location. within the same city, so the existing workforce will be retained. The new facility is needed to accommodate current and future groWJ1 of the business and will support the creation of 20 additional jobs over lhe next two years. ID8· financing will allow the business to

1221 OAK STREET' SUITE 555 • OAKl.AND. CALIFORNIA 94612 • (510) 272-6984

FAX (510) 272·3784

Industrial Development Authority 2 July 13,2010

purchase the new facility, expand and increase its investment in equipment and number of employees much faster than ifthey used conventional financing.

The property, machinery and equipment will be used for the manufacture of medical laser equipment and associated accessories. The facility will also be used to provide temporary storage of related raw materials and finished products, and may provide administrative offices for Convergent Laser Teclmo I0 gies' manufact uring activi ties.

Since the Applicant will pay all County costs and the project will retain 20 and add an estimated 20 jobs, my office is recommending that your Authority approve the issuance and sale of these bonds.

FINANCING;

The project will retain jobs, create employment and increase the property tax base at no cost to the County.

Very truly yours,

Susan S. Muranishi County Administrator

SSM:KS V:\EDlKSIIDB\BOS IDAIFINA LIConvergent Laser 2010 AuLhorizing Leller.doc

Attachment

cc: County Counsel Auditor-Controller Treasurer-Tax Collector Beverly Johnson, Mayor, City of Alameda AIm Marie Gallant, Interim City Manager, City of Alameda Dorene Soto, Business Development Manager, City of Alameda William M. Lofton, Lofton & JeIIDlngs Marilyn Chim, Convergent Laser Technologies

INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF ALAMEDA

RESOLUTION NO. R-2010-_

RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF NOT TO EXCEED $6,000,000 PRINCIPAL AMOUNT OF INDUSTRIAL DEVELOPMENT AUTHORITY OF THE COUNTY OF ALAMEDA VARIABLE RATE DEMAND REVENUE BONDS (CONVERGENT LASER TECHNOLOGIES PROJECT) SERIES 2010, AND AUTHORlZING THE EXECUTION OF AND APPROVING RELATED DOCUMENTS, AGREEMENTS AND ACTIONS

WHEREAS, the Industrial Development Authority of the County of Alameda (the "Authority") is authorized and empowered, by virtue of the California Industrial Development Financing Act, being Title 10 of the California Government Code (the "Act"), to adopt this Resolution and to carry out its provisions~ and

WHEREAS, the Authority by resolution adopted the date hereof, preliminarily agreed to issue its revenue bonds to provide financing to Mark H. K. Chim and Marilyn M. Chim, and their successors and assigns (collectively. the "Borrower"), for a portion of the costs necessary to (i) acquire an approximately 60,000 square foot structure located at 1201 Harbor Bay Parkway, Alameda, California 94502; (ii) acquire and construct tenant improvements within such structure; and (iii) the acquisition and installation of equipment and furnishings within such structure, all to be leased to Xintec Corporation d/b/a Convergent Laser Technologies, and its successors and assigns (the "User") for use as a facility for the manufacture of medical laser equipment and associated accessories (collectively, the "Project");

WHEREAS, the Project constitutes "facilities" and the Borrower is a "company" witbln the meaning of the Act~ and

WHEREAS, it has been determined that the estimated amount necessary to fmance a portion of the costs of the Project, including necessary expenses incidental to the issuance of the revenue bonds, will require the issuance, sale and delivery of revenue bonds in the aggregate amount of $6,000,000 bearing interest excludable from gross income for federal income tax purposes; and

WHEREAS, final approval of the terms of the sale of such bonds is now sought; and

WHEREAS, the Board of Directors of the Authority, the Board of Supervisors of the County of Alameda and the California Industrial Development Financing Advisory Conunission (the "Commission") have made all necessary findings, detenninations, and given all necessary approvals as required by the Act preliminary to the adoption of this Resolution;

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NOW, THEREFORE, BE IT RESOLVED by the Authority, as follows:

Section 1. The Authority fmds and determines that the foregoing recitals are true and correct.

Section 2. Pursuant to the Act, tax~exempt revenue bonds a f the Authority, designated as the "Industrial Development Authority of the County of Alameda Variable Rate Demand Revenue Bonds (Convergent Laser Technologies Project) Series 2010 (the "Bonds") In an aggregate principal amount not to exceed $6,000,000, are authorized to be issued.

Section 3. The proper officers of the Authority are hereby authorized to sell the Bonds at any time within one hundred and eighty (180) days after receipt of a certified copy of this Resolution, at private sale, in such final principal amounts at a price equal to the principal amount thereof and maturing on such date or dates, not more than 30 years after the date of issuance thereof, as such officers, with the advice of Authority Counsel and the consent of the Borrower, may determine, bearing interest as determined in accordance with the terms of the Indenture (hereinafter described) at a rate not greater than 12% per annum, as such officers, with the advice of Authority Counsel and the approval of the Borrower, may determine; provided that the Bonds shall not be delivered to the underwriter thereof until the Commission shall have given any final approval by the Act.

Section 4. The proposed form of Loan Agreement between the Authority and the Borrower, as presented to this meeting, is hereby approved. The President and Vice President are each hereby authorized and directed, for and on behalf of and in the name of the Authority, to execute and deliver to the Borrower the Loan Agreement in substantially said form and the Secretary is hereby authorized and directed to attest thereto, with such changes therein as the officer executing the same, with the advice of the Authority Counsel, may require or approve, such approval to be conclusively evidenced by execution and delivery thereof.

Section 5. The proposed form of Indenture between the Authority and Wells Fargo Bank, National Association (the "Trustee"), as presented to this meeting, is hereby approved. The President and Vice President are each hereby authorized and directed, for and in the name on behalf of the Authority, to execute and deliver to the Trustee, the Indenture in substantially the form presented to this meeting and the Secretary is hereby authorized and directed to attest thereto, with such changes therein as the officer executing the same, with the advice of Authority COlUlsel, may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The date, maturity dates, interest payment dates, denominations, forms, registration privileges, place or places of payment, terms of redemption and other terms of the Bonds shaH be as provided in such Indenture, as finally executed.

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Section 6. The proposed fOITI1 of Bond Purchase Contract among the Authority, the Borrower and Westhoff, Cone & Holmstedt (the "Underwriter"), as presented to this meeting, is hereby approved. The President and Vice President of the Authority are each hereby authorized and directed for and in the name and on behalf of the Authority to execute a Bond Purchase Contract in substantially said form, with such changes therein as the officer executing the same, with the advice of Authority COWlSel, may require or approve, such approval to be conclusively. evidenced by the execution and deli very thereof.

Section 7. The proposed fOITI1 of Official Statement relating to the Bonds, as presented to this meeting, is hereby approved. The President and Vice President are each hereby authorized and directed, for and on behalf of the Authority, to execute said Official Statement in substantially said form, with such changes therein as such officer, with the advice of the. Authority Counsel, may require or approve, such approval to be conclusively evidenced by the execution and delivery thereof. The Underwriter is hereby.authorized to distribute and deliver copies of said Official-Btatement to purchasers of the Bonds, with such changes therein as may be approved or required by Authority Counsel. The distribution of copies said Official Statement in preliminary form is hereby authorized and approved.

Section 8. The President or Vice President, and the Secretary are hereby authorized and directed to execute the Bonds, in the name and on behalf of the Authority and under its seal, in an aggregate principal amount not to exceed $6,000,000 in accordance with said Bond Purchase Contract and said Indenture and in the form set forth herein.

Section 9. The Bonds, when so executed, shall be delivered to the Trustee under the Indenture for authentication by the Trustee. The Trustee is hereby requested and directed to authenticate the Bonds by executing the Trustee's certificate of authentication appearing thereon, and - to deliver the Bonds, when duly executed and authenticated, to the Underwriter in accordance with written instructions executed on behalf of the Authority by the President or Vice President, which instructions said officer 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 Underwriter upon payment of the purchase price thereof.

Section 10. The Authority hereby dedicates and confIrms its allocation to the Bonds of a portion of its private activity bond limit, transferred to the Authority by the Commission from its allocation received from the California Debt Limit Allocation Committee, in the amount of $6,000,000 representing the principal amount of the Series A Bonds to be issued and delivered, so as to satisfy the requirements of Section 146(e) of the Internal Revenue Code of 1986 with respect to the Bonds. In no event shall the Series A Bonds be issued in any amount greater than the final amount of allocation received from the Commission.

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Section 11. All actions heretofore taken by the officers and agents of the Authori ty 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 docwnents, including a Tax Certificate and Agreement, which they or bond counsel may deem necessary or advisable in order to consummate the issuance, sale and delivery of the Bonds and otherwise to effectuate the purposes of this Resol ution.

Section 12. This Resolution shall take effect immediately upon its passage.

* * * * *

Approved as to Fonn: RICHARD E. WINNIE, County Counsel

By:

K { (QCA'<d.&=~L DeputyC1{vVt-~/e \ () M

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The foregoing resolution was passed and adopted by the Industrial Development Authority of the County of Alameda on July 27, 2010, by the following vote:

AYES:

NOES:

ABSTENTIONS:

EXCUSED:

President

ATTEST:

Secretary

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STATE OF CALIFORNIA ) )

COUNTY OF ALAMEDA )

CERTIFICATE

I, Crystal Hishida Graff, the duly appointe~ a qualified and acting Secretary of the Industrial Development Authority of the County of Alameda, do hereby certify that attached hereto is a true, complete and correct copy of Resolution R-2010-_, adopted at a duly called meeting of the Board of Directors of said Authority held in accordance with law on July 27, 2010, at which meeting a quorum was present and acting throughout, all as appears in the records of the Board of Directors of said Authority in my custody as the Secretary of the Authority.

IN WITNESS WHEREOF, I have hereWlto subscribed my name this _ day of-, 2010.

Crystal Hishida Graff, Secretary Industrial Development Authority of the County of Alameda

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