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HomeMy WebLinkAboutResolution - 78-224 - Relating to $600,000 IDR Note, Authorizing Sale & Issuance, & Authorizing Execution of Documents for Circle Rubber - '6c Y Member introduced the following resolution and moved its adoption: Resolution No. 78-224 RESOLUTION RELATING TO A $600,000 INDUSTRIAL DEVELOPMENT REVENUE NOTE; AUTHORIZING THE SALE AND ISSUANCE THEREOF UNDER THE MINNESOTA MUNI- CIPAL INDUSTRIAL DEVELOPMENT ACT, CHAPTER 474 MINNESOTA STATUTES, TO FINANCE A PROJECT THERE- UNDER, SECURED BY PAYMENTS TO BE RECEIVED PUR- SUANT TO A LOAN AGREEMENT AND AN ASSIGNMENT OF THE CITY'S INTEREST IN THE LOAN AGREEMENT AND PAYMENTS THEREUNDER TO THE-PURCHASER OF THE NOTE, AND AUTHORIZING THE EXECUTION OF DOCUMENTS. BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota (the City) , as follows: Section 1. Definitions 1. 01. In this Resolution the following terms have the following respective meanings unless the context hereof or use herein clearly requires otherwise: Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Agreement: the Loan Agreement to be made and entered into between the City and the Company; City: the City of Eden Prairie, Minnesota, its successors and assigns; Commitment: the commitment letter of National Farmers Union Property and Casualty Company issued in favor of the Company, dated April 21, 1978, as amended; Company: Circle Rubber Company, Eden Prairie, Minnesota, its successors and assigns; . Existing Facility: a 23, 600 square-foot office, manu- facturing, warehouse and distribution facility located on the Land, as it may at any time exist; Facilities: the Project, the Existing Facility and the Land, as they may at any time exist; Fixtures: those items defined as such in Section 1-1 of the Mortgage; F Land: the real estate described in Exhibit A to the Mortgage together with all additions thereto and substitu- tions therefor; Lender: National Farmers Union Property and Casualty Company, Denver, Colorado, its successors and assigns; Loan Agreement Assignment: the Assignment of Loan Agreement to be made and entered into by the City and accepted by the Lender; Mortgage: the Combination Mortgage and Security Agree- ment to be made and entered into between the Company and the Lender; Note: the $600,000 Industrial• Development Revenue Note (Circle Rubber Company Project) to be issued by the City pursuant to this Resolution; Organizational Documents: the following documents, each of which shall be in form and substance acceptable to the Lender: (i) A copy of the Articles of Incorporation of the Company, certified as of -a current date by the Secretary of the State of Minnesota; (ii) A copy of the Bylaws of the Company in • effect as of the date hereof; (iii) A certificate of good standing of the Company of the Secretary of the State of Minnesota of recent date; and (iv) An opinion or opinions of Counsel for the Company and for the City reasonably accept- able to the Lender indicating that each of the documents referred to in Section 3. 03 of this resolution has been duly executed and delivered and is a legal and binding obligation of the Company and the City, as the case may be, enforceable in accordance with their terms; Project: the 16,900 square-foot addition to the Existing Facility to be constructed by the Company on the Land as it may at any time exist; Project Costs: those costs defined in Section 1. 01 of the Agreement; and Resolution: this resolution of the City, adopted 1978, authorizing the issuance of the Note. • -2- Section 2. Findings. It is hereby found and declared that: (a) the City is duly organized and existing under the Constitution and the laws of the State of Minnesota and is authorized to issue the Note in accordance with the Act; (b) based upon representations made to the City as to the nature of the Project and the anticipated use of the proceeds of the Note, the properties described in the Agree- ment and the Mortgage constitute a project authorized by the Act; (c) the purpose of the Project, as defined in the Agreement and the Mortgage, is and. the effect thereof will be to promote the public welfare by the attraction, encourage- ment, retention and development of economically sound industry and commerce; the development and retention of industry to use the available resources of the community in order to retain the benefit of its existing investment in educational and public service facilities, by halting the movement of talented, educated personnel of mature age to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; more intensive development of land available in the community to provide an adequate tax base to finance the increase in the amount and cost of governmental services; and a better distri- bution of tax burdens between industrial or commercial pro- perties and residential properties within the City; (d) prior to closing, the Project will be approved by the Commissioner of Securities of the State of Minnesota as required by Section 474 .01, Subdivision 7 of the Act; (e) the financing of the Project, the issuance and sale of the Note, the execution and delivery of the Agreement and of the Loan Agreement Assignment, and the performance of all covenants and agreements of the City contained in the Agree- ment and the Loan Agreement Assignment and of all other acts and things required under the Constitution and the laws of the State of Minnesota to make the Agreement, the Loan Agreement Assignment and the Note valid and binding obligations of the City in accordance with their terms, are authorized by the Act; (f) it is desirable that the Industrial Development Revenue Note in the amount of $600, 000 be issued by the City upon the terms set forth herein, and that the City assign its interest in the Agreement and grant a security interest therein to the Lender as security for the payment of the principal of and interest and premium, if any, on the Note. (g) the loan payments contained in the Agreement are fixed, and required to be revised from time to time as necessary, so as to produce income and revenue sufficient to provide for prompt payment of principal of and interest on -3- the Note issued under this Resolution when due, and the Agree- ment also provides that the Company is required to pay all expenses of the operation and maintenance of the Project including, but without limitation, adequate insurance thereon and all taxes and special assessments levied upon or with respect to the Land and payable during the term of the Agree- ment; (h) under the provisions of Minnesota Statutes, Section 474 . 10, and as provided in the Agreement and the Mortgage, the Note is not to be payable from nor charged upon any funds of the City other than the revenue pledged to the payment thereof; the City is not subject to any liability thereon; no holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay' the Note or the interest thereon nor to enforce payment thereof against any property of the City; the Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; the Note issued hereunder shall recite that the Note, including interest thereon, is payable solely from the revenue pledged to the payment thereof; and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; (i) the execution and delivery of the Agreement, the Loan Agreement Assignment and the Note will not conflict with, or constitute on the part of the City a breach of, or a default • under, any existing agreement, indenture, mortgage, lease or other instrument to which the City is subject or is a party or by which it is bound; provided that this finding is made solely for the purpose of estopping the City from denying the validity of the Note, the Agreement or the Loan Agreement Assignment by reason of the existence of any facts contrary to this finding. (j) no litigation is pending, or, to the best knowledge of the members of this Council, threatened, against the City questioning the organization or boundaries of the City or the right of any officer of the City to hold his or her office, or in any manner questioning the right and power of the City to execute and deliver the Note, or otherwise questioning the validity of the Note or the execution, delivery or validity of the Agreement, or the Loan' Agreement Assignment, or ques- tioning the appropriation of revenues to payment of the Note or the right of the City to loan the proceeds of the Note to the Company; and (k) All acts and things required under the Constitution and the laws of the State of Minnesota to make the Note, the Agreement and the Loan Agreement Assignment the valid and bind- ing obligations of the City in accordance with their terms have been done provided that this finding is made solely for the purpose of estopping the City from denying the validity of the Note, the Agreement or the Loan Agreement Assignment by reason of the existence of any facts contrary to this finding. -4- Section 3. Authorization and Sale. 3. 01. Authorization. The City is authorized by the Act to issue revenue bonds and loan the proceeds thereof to business enterprises to finance the acquisition and construction of "pro- jects" as defined in the Act, and to make all contracts, execute all instruments, and do all things necessary or convenient in the exercise of such authority. 3. 02. Preliminary City Approval. By preliminary reso- lution duly adopted by the Council on March 7, 1978, this Council approved the sale of its revenue bonds pursuant to the Act and the loan of the proceeds to the Company for the construction on the Land of the Project suitable and designed for use as an office, manu- facturing, warehouse and distribution facility, and authorized the preparation of such documents as may be appropriate to the Project. 3. 03. Approval of Documents. Pursuant to the above, copies of the following documents, all of which are now or shall be placed on file in the office of the Clerk, have been prepared and presented to this Council: (a) Agreement; (b) Assignment of Loan Agreement; and (c) Mortgage. • The forms of the documents listed in (a) through (c) above are approved, with such variations, insertions and additions as are deemed appropriate by the parties and approved by the City Attorney. Section 4. Authorization. Upon completion of the Agree- ment and the Loan Agreement Assignment, approved in Section 3. 03 hereof, and the execution thereof by the Company and the Lender, as the case may be, the Mayor and City Manager shall execute the same, the Note (in substantially the form set forth in Section 5. 01 hereof) , and such other certifications, documents or instruments as bond counsel or counsel for the Lender shall require, on behalf of the City, subject to the approval of the City Attorney. All certifica- tions, recitals and representations therein shall constitute the certifications, recitals and representations of the City. Execu- tion of any instrument or document by one or more appropriate officers of the City shall constitute and shall be deemed the con- clusive evidence of the approval and authorization by the City and the Council of the instrument or documents so executed. Section 5. The Note. 5. 01. Form and Authorized Amount. The Note shall be issued substantially in the form hereinafter set forth, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions of this Section, in the total principal amount of $600 , 000 : -5- FORM OF NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE Industrial Development Revenue Note (Circle Rubber Company Project) No. R-1 $600,000 The City of Eden Prairie, Minnesota, a municipal corpo- ration of the State of Minnesota (the City) for value received hereby promises to pay to the order of NATIONAL FARMERS UNION PROPERTY AND CASUALTY COMPANY or registered assign (the Holder) at its principal office in Denver, Colorado, or such other place as the Holder may designate in writing, from the source and in the manner hereinafter provided, the principal sum of SIX HUNDRED THOUSAND DOLLARS ($600,000) with interest on the unpaid principal amount at the rate of six and twenty-five hundredths percent (6.25%) per annum in any coin or currency which at the time or times of payment is legal tender for payment of public or private debts in the United States of America. Both the principal of and interest on this Note shall be paid together in monthly installments in the amount of SIX THOUSAND SEVEN HUNDRED THIRTY-SIX and 81/100 DOLLARS • ($6 ,736.81) , each payable on the day of each month, commencing on the day of , 1978, and extending to the day of , 1988, when all remaining principal and accrued interest shall be payable. All interest hereon shall be computed on the basis of the actual number of days elapsed on the assumption that each month con- tains thirty (30) days and each year contains three hundred sixty (360) days. Payments shall be applied first to interest due on the unpaid principal and thereafter to reduction of the principal. This Note constitutes an issue in the total authorized face amount of $600,000. This Note is issued by the City pursuant to the authority granted by Minnesota Statutes, Chapter 474, as amended (the Act) , for the purpose of providing funds for a Project, as defined in Minnesota Statutes, Section 474.02, Subdivision la, consisting of certain real estate and construction of improvements thereon, and paying necessary expenses incidental thereto, such funds to be loaned by the City to Circle Rubber Company (the Com- pany) pursuant to a Resolution, adopted , 1978, by the City (the Resolution) and a Loan Agreement, of even date here- with, between the City and the Company (the Loan Agreement) , thereby assisting activities_ in the public interest and for the public welfare of the City. This Note is secured by a Mortgage and Secu- rity Agreement, of even date herewith (the Mortgage) , given by the • Company as Mortgagor to the Holder as Mortgagee and as Assignment of Loan Agreement, of even date herewith (the Loan Agreement Assign- ment) , from the City to the Holder. -6- There may be no prepayment of the Note for a period of five (5) years from the date thereof, provided that if the prime • rate at the Continental Illinois National Bank, in Chicago, Illinois, shall drop to five and seventy-five hundredths percent (5.75%) per annum during such five-year period, the Company may prepay the out- standing principal balance of the Note, in whole or in part, on any monthly installment payment date upon payment of a price equal to the principal amount being prepaid plus accured interest to the date of prepayment, but without prepayment premium or penalty. From and after the expiration of such five-year period, the Company may prepay the outstanding principal balance of the Note, in whole or in part, on any monthly installment payment date upon payment of a price equal to the principal amount being so prepaid plus accrued interest to- the date of prepayment but without prepayment premium or penalty. No prepayment shall reduce the amount or postpone the due dates of monthly installment payments due hereunder nor shall any such prepayment reduce or postpone any other payments due here- under, installments and other payments of which shall continue until the eintire principal balance has been paid. All prepayments, after deduction of interest and fees, shall be applied to reduce the prin- cipal balance of the Note. As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the City at the office of the City Clerk, by the registered • Holder hereof in person or by his attorney duly authorized in writ- ing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the reg- istered Holder or his duly authorized attorney. Upon such transfer, __the City Clerk will note the date of registration and the name and address of the newly registered Holder in the Note_Register main- tained by the City Clerk in the registration blank appearing below. Alternatively, the City will at the request of the registered Holder issue new notes in aggregate principal amount equal to the unpaid principal balance of this Note, and of like tenor except as to number and principal amount, and registered in the name of the registered Holder. The City may deem and treat the person in whose name this Note is last registered upon the books of the City, with such registration noted on the Note, as the absolute owner thereof for the purpose of receiving payment of or on account of the principal balance, redemption price or interest and for all other purposes; all such payments so made to the reg- istered Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. All of the agreements, conditions, covenants, provisions and stipulations contained in the Mortgage, the Resolution, the Loan Agreement and the Loan Agreement Assignment are hereby made a part of this Note to the same extent and with the same force and • effect as if they were fully set forth herein. If a default occurs -7- under this Note or under the Mortgage or the Loan Agreement, then • the Holder may at its right and option declare immediately due and payable the principal balance of this Note and the interest accrued thereon to the date of declaration of such default, together with any attorneys ' fees incurred by the Holder in collecting or enforc- ing payment thereof, whether suit be brought or not, and all other sums due hereunder or under the Mortgage or the Loan Agreement, anything to the contrary therein not withstanding and payment thereof may be enforced and recovered in whole or in part- at any time by one or more of the remedies provided in the Mortgage, in this Note or in the Loan Agreement. The Holder may extend the time of payment of interest and/or principal of this Note without notice to or consent of any party liable hereon and without releasing any such party. This Note and the interest thereon shall never constitute a debt of the City within the meaning of any constitutional provi- sion or statutory limitation and shall never constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers . This Note and the interest hereon are payable solely from the revenues pledged to the payment thereof pursuant to the Loan Agreement and secured by the provisions of the Mortgage and the Loan Agreement Assignment, and the Holder of this Note shall never have the right to. enforce payment thereof against any property of the City, except revenues under the Loan Agreement. This Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except revenues under the Loan Agreement. The agreement of the City to perform or cause the performance of the covenants and other provisions herein re- ferred to shall be subject at all times to the availability of rev- enues from the Loan Agreement or from the Mortgage, sufficient to pay all costs of such performance or the enforcement thereof. The remedies of the Holder, as provided herein and in the Mortgage and the Loan Agreement shall be cumulative and concur- rent, may be pursued singly, successively or together and, except as provided in the Mortgage, at the sole discretion of the Holder and may be exercised as often as occasion therefore shall occur. The failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Holder shall not be deemed, by any act of ommission or commission, to have waived any of its rights or remedies here- under unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as con- tinuing or as a bar to or waiver of any right or remedy as to a subsequent event. It is intended that this Note is made with reference to and shall be construed as a Minnesota contract and governed by the laws thereof. -8- IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen and be performed prece- dent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the City has caused this Note to be duly executed by its duly authorized officers and its corporate seal affixed, all on ,1978. CITY OF EDEN PRAIRIE, MINNESOTA r. BY ayor Attest: r (SEAL) • -9- r • PROVISIONS AS TO REGISTRATION The ownership of the unpaid principal balance of this Note and the interest accruing thereon is registered on the books of the City of Eden Prairie, Minnesota, in the name of the Regis- teres Holder last noted below. Date of Name of Signature of Registration Registered Holder City Clerk • -10- 5. 02. Note Terms. The Note shall be designated the Industrial Development Revenue Note (Circle Rubber Company Project) • and shall: (a) be dated as of the date of delivery thereof to, and payment therefor, by the Lender; (b) be in the total principal amount of $600, 000; (c) bear interest on the unpaid principal balance from date of issue until paid or discharged as herein provided at the rate of 6.25% per annum; (d) be .payable in installments on the first day of each month in the amount of Six Thousand Seven Hundred Thirty- Six and 81/100 Dollars ($6,736. 81) , commencing on the day of , 1978 , and extending to and including the day of , 1988, when all remaining principal and accrued interest shall be payable. (e) be payable as to both principal and interest to the registered holder thereof at the address shown on the Note Register; and (f) be subject to prepayment by the City from funds supplied by the Company at the times and prices set forth in Section 5. 01 of the Agreement. The prepayment price having • been so deposited, the principal amounts prepaid shall, after such date, cease to bear interest. 5. 03. Execution. The Note shall be executed on behalf of the City by the signatures of the Mayor and City Manager and shall be sealed with its corporate seal. In case any officer whose sig- nature shall appear on the note shall cease to be such officer before the delivery thereof, such signature shall nevertheless be valid and sufficient for all purposes. 5. 04. Mutilated, Lost and Destroyed Note. In case the Note shall become mutilated or be destroyed or lost, the City shall cause to be executed and delivered a new note of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated note, or in lieu of and in sub- stitution for such note destroyed or lost, upon the holder' s paying the reasonable expenses and charges of the City in connection there- with, . and, in case the note is destroyed or lost, its filing with the City evidence satisfactory to it. 5. 05. Registration of Transfer. The City will cause to be kept at the office of the City Clerk a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be transferable upon the Note Register by the holder thereof in person or by its attorney duly authorized • in writing, upon surrender of the Note together with a written -11- instrument of transfer satisfactory to the City Clerk, duly execu- ted by the holder or its duly authorized attorney. Upon such transfer the City Clerk shall note the date of registration and the name and address of the new holder in the Note Register and in the registration blank appearing on the Note. Alternatively, the City shall, at the request and expense of the holder issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, princi- pal amount, and the amount of the monthly installments payable thereunder, and registered in the name of the holder or such trans- feree as may be designated by the holder. The City may deem and treat the person in whose name each note is last registered in the Note Register and by notation on the note as the absolute owner thereof, whether or not the principal balance or any part thereof is overdue, for the purpose of receiving payment of or on account of the principal balance, redemption price or interest and for all other purposes. 5. 06. Delivery and Use of Proceeds . Prior to delivery of the Note, the documents referred to below shall be completed and executed in form and substance as approved by the City Attorney. The City shall execute and deliver to the Lender the Note in the total principal amount of $600,000, together with the following: (a) a copy, duly certified by the Clerk, of this Resolution; (b) original, executed counterparts of the Agreement, the Loan Agreement Assignment and the Mortgage; (c) organizational documents; and (d) such closing certificates as are required by bond counsel. Upon delivery of the Note, the Lender shall, on behalf of the City, disburse the proceeds of the Note to the Company in reim- bursement of Project Costs pursuant to the provisions of Section 3.02 of the Loan Agreement. The Lender or the Company shall provide the City with a full accounting of all funds disbursed for Project Costs. Section 6. Limitations of the City' s Obligations. Not- withstanding anything contained in the Note, -the Agreement, the Loan Agreement Assignment or any other documents referred to in Section 3. 03 hereof, the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limita- tion and shall not be payable from or charged upon any funds other than the revenue pledged to the payment thereof, and the City shall not be subject to any liability thereon. No holder of such Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon or to enforce payment thereof against any property of the City, and the -12- v ti Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City. The agreement of the • City to perform the covenants and other provisions contained in the Note, -the Agreement or the Loan Agreement Assignment shall be subject at all times to the availability of revenues furnished by the Company sufficient to pay all costs of such performance by the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon. Adopted , 1978. MO&Or Attest: -CQO Clerk -13-