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HomeMy WebLinkAboutResolution - 89-88 - Refinancing $465,000 Kindercare Industrial Funding Revenue Bonds - 05/02/1989 f RESOLUTION AUTHORIZING THE ISSUANCE OF $465,000 INDUSTRIAL REFUNDING REVENUE BONDS (KINDER-CARE LEARNING CENTERS, INC. PROJECT) SERIES C TO REFUND COMMERCIAL DEVELOPMENT REVENUE BONDS HERETOFORE ISSUED TO FINANCE A PROJECT UNDER THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT BE IT RESOLVED by the Council of the City of Eden Prairie, Minnesota, as follows : 1. The Council has received a request from Kinder-Care Learning Centers, Inc. , a Delaware corporation (the "Company") that the City undertake to refund its $465,000 Commercial Development Revenue Bonds, Series 1984 (Kinder-Care Learning Centers , Inc. Project) heretofore issued on December 17, 1984 (the "Prior Bonds") in order to finance costs of acquiring, con- structing and equipping, as applicable, one or more child day-care facilities (the "Project") ; and that the City accomplish such refunding by the issuance, pursuant to the Minnesota Municipal Industrial Development Act, Sections 469. 152 through 469. 1651, Minnesota Statutes 1988, as amended (the "Act") , of its $465,000 Industrial Refunding Revenue Bonds (Kinder-Care Learning Cen- ters, Inc. Project) Series C (the "Bonds") , to be purchased by The Frazer Lanier Company Incorporated, Montgomery, Alabama (the "Bond Purchaser") , pur- suant to a Bond Purchase Agreement to be dated the date of issuance of the Bonds by and among the City (among other issuers) , the Company and the Bond Purchaser (the "Bond Purchase Agreement") . 2. It is proposed that, pursuant to a Loan Agreement between the City and the Company dated as of June 1 , 1989 (the "Loan Agreement") , the City loan the proceeds of the Bonds to the Company to refund. an equal principal amount of the Prior Bonds. The Company has agreed to furnish such amounts in addition to the proceeds of the Bonds as may be necessary to effect the com- plete refunding and payment in full of the Prior Bonds. The Company Payments as defined in and to be made by the Company under the Loan Agreement are fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Bonds when due . It is further proposed that the City assign its rights to the Company Payments and certain other rights under the Loan Agreement to First Alabama Bank, Montgomery, Alabama (the "Trustee") as security for payment of the Bonds under a Trust Indenture dated as of June 1, 1989 (the "Indenture") and that the Company procure an irrevocable letter of. credit (the "Letter of Credit") further to secure the payment of the Bonds and the interest and any premium thereon. 3. Forms of the following documents have been submitted to the Council for approval: (a) The Loan Agreement; (b) The Indenture; ,1 j (c) The Bond Purchase Agreement; and (d) The form of Offering Circular pursuant to which the Bonds are to be offered and sold (not executed by the City) . 4. It is hereby found, determined and declared that: (a) the Project described in the Loan Agreement and Indenture continues to constitute a Project authorized by the Act; (b) the purpose of the Project has been and will be to promote the public welfare by its use as a child day-care center; (c) the Project is located within the City limits, at a site which Is easily accessible to employees residing within the City and the surrounding communities; (d) the issuance and sale of the Bonds to refund the Prior Bonds, the execution and delivery by the City of the Loan Agreement, the Bond Purchase Agreement and the Indenture, and the performance of all cove- nants and agreements of the City contained in the Loan Agreement, the Bond Purchase Agreement and the Indenture and of all other acts and things required under the constitution and laws of the State of Minne- sota to make the Loan Agreement, the Bond Purchase Agreement, the Indenture and the Bonds valid and binding obligations of the City in accordance with their terms, are authorized by the Act; (e) it is desirable that the Bonds be issued by the City upon the terms set forth in the Indenture; (f) the Company Payments under and as defined in the Loan Agree- ment are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Bonds issued under the Indenture when due, and the Loan Agreement and the Security Document (as defined in the Loan Agreement) also provide that the Company is required to pay all expenses of the operation and main- tenance of the Project , including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the Project and payable during the term of the Loan Agreement and the Indenture; (g) under the provisions of the Act, and as provided in the Loan Agreement and the Indenture, the Bonds are not to be payable from or charged upon any funds other than the revenue pledged to the payment thereof; the City is not subject to any liability thereon; no holder of any Bonds shall ever have the right to compel any exercise by the City of its taxing powers to pay any of the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement which have been assigned to the Trustee under l:he Indenture; the Bonds shall not -2- constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the interests of the City in the Loan Agreement which have been assigned to the Trustee under the Indenture; the Bonds are issued without moral obligation on the part of the State or its political subdivisions, and the Bonds shall recite that the Bonds , including interest thereon, are payable solely from the revenues pledged to the payment thereof and that the Bonds shall not constitute a debt of the City within the meaning of any constitutional or statu- tory limitation; no provision, covenant or agreement contained in the Loan Agreement, the Indenture, the Bond Purchase Agreement, the Bonds , any Certificate executed by the City or any other documents executed by the City or any obligation herein or therein imposed upon the City, or the breach thereof, shall constitute, give rise to or impose upon the City or any of its officers, agents or employees, a pecuniary liability or a charge against the City's general credit or taxing powers; (h) no public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project; and (i) the matters set forth in Section 2. 1. of the Master Agreement attached as Exhibit B and incorporated as part of the Loan Agreement and in Sections 4(b) and (d) of the Bond Purchase Agreement are hereby incorporated by reference herein and adopted by the City. 5 . Subject to the approval of the City Attorney, the Loan Agreement, the Bond Purchase Agreement and the Indenture and exhibits thereto are ` approved substantially in the forms submitted . The Loan Agreement, the Bond Purchase Agreement and the Indenture are directed to be executed in the name and on behalf of the City b;r the Mayor and the City Manager. Any other documents and certificates necessary to the transaction described above shall be executed by the appropriate City officers . Copies of all the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in said Loan Agreement and Indenture. 6. The City shall proceed forthwith to issue its Bonds, in the form and upon the terms set forth in the Indenture. The offer of the Bond Purcha- ser to purchase the Bonds for $465,000 is hereby accepted. The Mayor and City Manager are authorized and directed to prepare and execute the Bonds as prescribed in the Indenture and to deliver them to the Trustee for authen- tication and delivery to the Bond Purchaser. The distribution and use by the Bond Purchaser of the Offering Circular relating to the Bonds, including for this purpose the preliminary draft thereof in the farm submitted to the City at the meeting at which this resolution is passed, are hereby approved. The City has not confirmed, and assumes no responsibility for, the accuracy, completeness or fairness of any of the information contained in the Offering Circular. , any amendments or supplements thereto or any reports, financial information, offering or dis- closure documents or other information in any way relating to the Letter of -3- J '.. •J i Credit, the Company or the Bond Purchaser, other than the information relat- ing to the City contained in the Offering Circular under the caption "THE ISSUERS". 7 . The Mayor, City Manager, City Clerk and other officers of the City are authorized and directed to prepare and furnish to the Bond Purchaser certified copies of all proceedings and records of the City relating to the Bonds, and such other affidavits and certif 1cates as may be required to snow the facts relating to the legality of the Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, includ- ing any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. 8. The City elects to have the provisions of subparagraph (D) , as modified by the provisions of subparagraph (H) , of Section 103(b) (6) of the Internal Revenue Code of 1954, as amended, applied to the Bonds. The execu- tion of this resolution by the Mayor of the City and the City Clerk and the filing of this resolution by the City Clerk in the records of the City are hereby declared to constitute notation of the books and records of the City that such election has been made. 9. The approval hereby given to the various documents referred to above includes approval of such additional details therein as may be neces- sary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the City Attorney and the City officials authorized herein to execute said docu- ments prior to their execution; and said City officials are hereby authorized to approve said changes on behalf of the City. The execution of any instru- ment by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the absence of the Mayor or City Manager, any of the documents authorized by this resolution to be executed may be executed by the Acting Mayor or the Acting City Manager, respectively. Passed: June 6, 1989 ayor. At test Cl ` Jerk —� ( S E A L ) -4-