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HomeMy WebLinkAboutResolution - 80-35 - Relating to $1,075,000 Industrial Development Revenue Note and Authorizing Issuance - 02/19/1980 q 1 l • Member introduced the following resolution and moved its adoption: RESOLUTION NO. -35 RESOLUTION RELATING TO A $1, 075, 000 INDUSTRIAL DEVELOPMENT REVENUE NOTE; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA STATUTES, CHAPTER 474. 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; Assignment of Rents: the Assignment of Rents and Leases to be executed by the Partnership to the Lender; Building: the approximately 57, 500 square foot office/warehouse/light manufacturing building and related facilities and improvements to be constructed on the Land by the Partnership in accordance with the terms of the Loan Agreement; Buy and Sell Agreement: the Buy and Sell Agreement among the City, the Lender, the Partnership and the Permanent Lender; City: the City of Eden Prairie, Minnesota, its successors and assigns; Construction Loan Agreement: the Construction Loan Agreement among the City, Lender and Partnership; Fixtures: those items defined as Fixtures in Section 1-1 of the Mortgage; Guaranty: the Guaranty Agreement, executed by the Partnership and individual general partners of the Partnership; Holder: the Lender or any person to whom the Note has been assigned pursuant to Section. 5. 04 of this Resolution; Land: the real estate described in Exhibit A to the Mortgage; Lender: Northwestern National Bank of St. Paul, a national banking association, its successors and assigns; Loan Agreement: the Loan Agreement to be executed by and between the City and the Partnership; Loan Assignment: the Assignment of Loan Agreement, to be executed by the City in favor of the Lender; Mortgage: the Mortgage and Security Agreement, between t e Partnership, as mortgagor, and the Lender, as mortgagee; Note: the Industrial Development Revenue Note (E and H Properties Project) in the total authorized -principal amount of $1, 075, 000, or so much thereof as may be advanced thereunder, to be issued by the City pursuant to this Resolution; Partnership: E and H Properties, a Minnesota general partnership, its successors and assigns, which may assume its obligations in accordance with the Loan Agreement; Permanent Lender: The Aetna Casualty and Surety Company, a Connecticut corporation, its successors and assigns; Project: the Land, the Building and the Fixtures as they, may at any time exist; Project Costs: those costs defined as Project Costs in Section 1. 01 of the Loan Agreement; and Resolution: this resolution of the City authorizing the issuance of the Note. Section 2. Authorization and Sale. 2. 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, construction and equipping of "projects" 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. 2. 02. Preliminary City Approval. By preliminary resolution adopted by the Council on May 15, 1979, this Council approved the sale of a revenue note pursuant to the Act and the loan of the proceeds to the Partnership for the acquisition of the Land and construction thereon of the Project suitable and designed for use as an office/ warehouse/light manufacturing building and authorized the preparation of such documents as may be appropriate to* the Project. 2. 03. Receipt of Documents. Pursuant to the above, there have been prepared and presented to this Council copies of the following documents, all of which have been reviewed by the City Attorney and which are now, or shall be, placed on file in the office of the City Clerk : (a) Assignment of Rents; (b)_; Buy and Sell Agreement; (c) Guaranty; (d) Loan Agreement; (e) Loan Assignment; (f) Mortgage; and (g) Construction Loan Agreement 2. 04. Findings of Fact. It is hereby found and determined that: (a) There is no litigation of any nature now pending or to the best of the City' s knowledge, threatened against the City, seeking to restrain or enjoin the issuance, sale, execution or delivery of the Note or any of the documents referred to in Section 2. 03, or questioning the authority or proceedings pursuant to which the Note is being issued, the validity of the Note or any of said documents, or the power of the City to assist in financing the Project as defined in said documents. 4 • ( b). Neither the existence of the City nor the right of the present officials of the City to their respective offices is being contested. (c) To the best of the City' s knowledge, the execution and delivery of the documents referred to in Section 2. 03 will not conflict with or constitute a breach of any resolution, ordinance, agreement or other instrument to which the City is subject or is a party or by which it is bound. Section 3. Authorizations. The Mayor and City Manager are hereby authorized and directed to execute the Loan Agreement, Loan Assignment, Construction Loan Agree- ment and Buy and Sell Agreement on behalf of the City, together with the Note in substantially the form set forth in paragraph 4. 01 hereof and such other certifications, documents or instruments as bond counsel or counsel for the Lender shall require, subject to the approval of the City Attorney. Execution of any instrument or document by one or more appropriate officers . of the City shall consti- tute, and shall be deemed the conclusive evidence of, the approval and authorization by the City and the Council of the instrument or document so executed. Section 4. The Note. . 4. 01. Form and Authorized Amount. The Note shall be issued substantially in the form of that set forth in Exhibit A attached hereto and made a part hereof, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, in the total authorized principal amount of $1, 075, 000, or so much thereof as may be advanced thereunder. The terms of the Note are set forth therein, and such terms, including but not limited to provisions as to interest rate, dates _ and amounts of payment of principal and interest and prepayment privileges, are incorporated by reference herein. 4. 02. Execution. The Note shall be executed on behalf of the City by the signatures of the Mayor and the City Manager, and shall be sealed with its corporate seal. In case any officer whose signature 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. 4. 03. 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 substitution for such note destroyed or lost, upon the Holder' s paying the reasonable expenses and charges of the City in connection therewith, and, in case the Note is destroyed or lost, upon filing with the City evidence satisfactory to it of such loss or destruction. 4. 04. Assignment. The Note may be assigned by the Holder, from time to time, by endorsement thereon or ' by separate written instrument, provided that notice of - any such assignment shall be given in writing to the City and the Partnership in the manner provided in the Loan Agreement. 4. 05. Delivery and Use of Proceeds. Prior to - delivery of the Note, the documents referred to in Section 2. 03 hereof shall be completed and executed in form and substance as approved by the City Attorney and an original, executed counterpart of each such document shall be delivered to the Lender. The City shall thereupon deliver to the Lender the Note, together with a copy, duly certified by�the City Clerk, of this Resolution and such closing certificates as are required by bond counsel. • Upon delivery of the Note and the above items to the Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note to the Partnership in payment and reimbursement of Project Costs pursuant to the provisions of the Loan Agreement, the Construction Loan Agreement and the Buy and Sell Agreement. - Section 5. Limitations of the City' s Obligations. Notwithstanding anything contained in the Note, the Loan Agreement, the Construction Loan Agreement, the Loan Assignment or any other document referred to in Section 2. 03 hereof, the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation and shall not be payable from or charged upon any funds other than the revenue pledged to the payment thereof; 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 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 this Resolution or the Note, or the other documents listed in Section 2. 03 hereof shall be subject at all times to the availability of revenues furnished by the Partnership sufficient to pay all costs of such performance, and the City shall never be subject to any personal or pecuniary liability. Adopted: February 19, 1980. ayor Attest : Clerk The motion for the adoption of the foregoing resolution was duly seconded by Member and upon vote being taken thereon, the following voted in favor thereof : and the following voted against the same : whereupon said resolution was declared duly passed and adopted. • UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE Industrial Development Revenue Note (E and H Properties Project) $1, 075, 000 FOR VALUE RECEIVED, The CITY OF EDEN PRAIRIE, MINNESOTA, a municipal corporation and political . subdivision of the State of Minnesota (the City) , hereby promises to pay to the order of NORTHWESTERN NATIONAL BANK OF ST. PAUL, a national banking association, or assign (the Holder) , at its principal office in St. Paul, Minnesota, or- at such other place as the Holder may • designate in writing, from the source and in the manner hereinafter provided, the principal sum of ONE MILLION SEVENTY FIVE THOUSAND DOLLARS ($1, 075, 000) , or so much thereof as may be advanced hereunder, together with interest on the unpaid principal balance thereof at the annual rate set forth below, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America. This Note is payable in installments due as follows: (a) From and after the date hereof until the Assignment Date (as hereinafter defined) , the City shall pay interest only on the amount of principal that shall from time to time be advanced hereunder, computed at the rate of nine percent (9. 00%) per annum. Interest shall accrue from and after the date of each and every advance made by the Holder and payments of accrued interest shall be due on the first day of the month next succeeding the date on which the first .advance is made, on the first day of each and every month thereafter, and on the Assignment Date. (b) On the first day of the month following the Assignment Date, the City shall pay interest only on the principal that shall have been advanced under the Note, computed at the rate of" eight and three-eighths percent (8 3/8%) per annum. (c) Commencing on the date which is the first day of the second month following the Assignment Date (the Amortization Date) and continuing on the first day of each month thereafter until the payment payable pursuant to paragraph (d) hereof is due, the principal balance hereof, together with interest thereon, shall be due and payable in monthly installments, each in the amount of Eight Thousand One Hundred Seventy-eight and 96/100 Dollars ($8,178. 96) (said payment being calculated on an assumed 30 year amortization with interest at the rate of 8 3/80 per annum) . Provided, however, that in the event that less than the full amount of this Note shall have been advanced as of the Amortization Date, said monthly payment will be computed by basing the principal portion of the payment on the full amount of this Note and the interest portion of the payment on the amount actually advanced. Monthly payments so computed will continue to be due and payable until additional funds are advanced, in which case new monthly payments will be similarly computed. In the further event that, as of the date on or before which qualification for additional disbursements may occur pursuant to the Commitment (as hereinafter defined) , less • than the full amount of this Note shall have been advanced, the monthly payments of principal and interest thereafter due will be computed by determining the monthly payment necessary to amortize the then outstanding balance of this Note over the then remaining portion of the assumed 30 year term of this Note at the stated interest rate. As used herein, the term "Commitment" refers to the mortgage loan application of the Partnership (as hereinafter defined) , dated July 25, 1979, the commitment letter of The Aetna Casualty and Surety Company (Aetna) to- the Partnership, dated October 5, 1979, and the commitment letter of Aetna to the Partnership, dated December 11, 1979, all pertaining to the loan evidenced hereby. (d) - Payment of the entire unpaid principal balance hereof, together with all accrued but unpaid interest thereon, and all other indebtedness due hereunder, shall be due on the date which is fifteen (15) years subsequent to the Amortization Date. All interest hereon shall be computed on the basis of the actual number of days elapsed and on the assumption that each month contains thirty (30) days. All payments hereunder shall be applied first to interest due on the unpaid principal balance and the balance to reduction of principal. -2- From .and after the Assignment Date in the event of a default in the payment of any principal, interest or other indebtedness due hereunder, interest will accrue on the outstanding balance due hereunder at the rate of four percent (4%) above the interest rate otherwise due hereunder. Additionally, from and after the Assignment Date, in the event any payment due hereunder is not made when due, the City shall pay to the Holder, together with such payment, a late charge equal to four cents (459) for each one dollar ($1. 00) of such payment overdue. As used herein the term "Assignment Date" shall mean the date on which Aetna becomes the holder hereof. If the Assignment Date has not occurred on or before December 31 1980, the entire unpaid principal balance hereof together with interest accrued thereon shall, at the option of the Holder, become due and payable immediately upon demand. Notwithstanding the foregoing, in the event at- any time of a Determination of Taxability, as defined in Section 4. 07(3) of that certain Loan Agreement of .even date herewith (the Loan Agreement) between E and H Properties, a- Minnesota general partnership (the Partnership) , and the City, the rate of interest hereon • shall be automatically increased, effective as of the Date of Taxability, as defined in Section 4. 07(3) of the' Loan Agreement, to eleven percent (11%) per annum (the "increased permanent interest rate") and the payments required under paragraphs (b) , (c) and (d) above shall be increased accordingly. If the Date of Taxability is deemed to have occurred prior to the Assignment Date, the interest rate on the Note shall, for the period prior to the Assignment Date, be increased to two percent (2s) over the prime rate of interest charged by Northwestern National Bank of St. Paul from time to time on short-term borrowings, which annual rate (the "increased interim interest rate") will change when and as such prime rate shall change and which increased interim interest rate will in no event be less than eleven percent (11%) , and the payments required pursuant to paragraph (a) hereof shall be increased accordingly. In the event of such Determination of Taxability, the City shall, within ninety (90) days after such Determination of Taxability, pay to the' appropriate Holder (s) the difference- between (i) the amounts actually paid hereunder between the Date of Taxability and the effective date of the rate increase(s) and (ii) the amounts which would have been paid during such period(s) if the increased permanent interest rate and increased interim interest rate, as the case may be, -3- had been in effect, together with any interest and penalties incurred by the Holder (s) hereof as a result of such Determination of Taxability. Prior to the expiration of the first ten (10) loan years, no principal payments other than the required monthly installment payments above provided may be made. Beginning with the eleventh (llth) loan year, additional principal payments in multiples of $1, 000. 00 may be made provided that such additional principal payments shall be subject to a prepayment premium equal to five percent (5%) of such amount prepaid, which premium shall decrease at the rate of one percent (1%) during every loan year thereafter. As used herein the term "loan year" shall mean a year consisting of twelve (12) calendar months, the first day of such first loan year being the Amortization Date. Any prepayments shall be made after the expiration of at least sixty (60) days advance written notice to the Holder, shall be made on a regularly scheduled installment payment date and shall not suspend or reduce required installment payments. The proceeds of this Note are to be. disbursed in part pursuant- to the terms and conditions of that certain Construction Loan Agreement of even date herewith (the "Construction Loan Agreement" ) by and among the City, the Partnership and the Northwestern National Bank of St. Paul. Provisions to the contrary, if any, contained in this Note notwithstanding, the Construction Loan Agreement shall no longer constitute a part of this Note from and after the date on which Aetna becomes the Holder hereof, and no defenses, offsets or counterclaims available to the Partnership arising out of said Construction Loan Agreement shall be valid or effective as against the indebtedness evidenced by this Note or against Aetna or its successors or assigns; , all of such defenses, offsets and counterclaims being then waived by the Partnership insofar as said indebtedness and Aetna and its successors and assigns are concerned. This Note constitutes an issue in the total authorized face amount of $1, 075, 000, or so much thereof as may be advanced hereunder. 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 1, . consisting of acquisition of certain real estate and construction and equipping of improvements thereon, . and paying necessary expenses incidental thereto, such funds -4- to be loaned by the City to the Partnership pursuant to a Resolution, adopted February 19, 1980, by the City (the . Resolution) , the Loan Agreement and the Construction Loan Agreement, thereby assisting activities in the public interest and for the public welf are. of the City of Eden Prairie. This Note is secured by a Mortgage and Security Agreement, of even date herewith, between the Partnership, as Mortgagor, and the Holder, as Mortgagee (the Mortgage) , and by an Assignment of Rents and Leases, of even date herewith, from the Partnership to the Holder (the Assignment) . All of the agreements, conditions, covenants, provisions and stipulations contained in the Mortgage, the Loan Agreement, the Construction Loan Agreement, the Assignment and any other loan or security document collateral hereto 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. Time is of the essence hereof. In the event of any default in the payment of any principal, interest or other indebtedness due hereunder, or if an Event of Default (as defined in the Mortgage, the Loan Agreement, the Construction Loan Agreement, the Assignment or any other loan or security document collateral hereto) occurs, then the Holder may at its right and option declare immediately due and payable the principal balance of this Note and interest accrued thereon to the date of declaration, together with any attorneys' fees incurred by the Holder in collecting or enforcing payment thereof, whether suit be brought or not, and all other sums due hereunder or under the Mortgage, the Assignment, the Construction Loan Agreement or the Loan Agreement, anything to -the contrary therein notwithstanding, 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 the Note, in the Assignment, in the Construction -Loan Agreement 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 such party. The City, for itself its successors and assigns, hereby waives demand, presentment, notice of nonpayment, protest, notice of protest, notice of dishonor, and diligence in collection and agrees that without any notice the Holder hereof may take and/or release additional security herefor, or the Holder hereof may from time to -5- time release any part or parts of the property and interests subject to said Mortgage with or without consideration, and that in any such case the City shall continue liable to pay the unpaid balance of the indebtedness evidenced hereby as so additionally secured, extended, renewed or modified and notwithstanding any such release, subject to the limitations of the City's liability as set forth herein. This Note and the interest hereon shall never constitute a debt of the City within the meaning of any constitutional or statutory limitation, and is not payable from or a charge upon any funds other than the revenue pledged to the payment hereof. No Holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest hereon or to enforce payment thereof against any property of the City, and this Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City. The agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues of the Project or other funds furnished to the City in accordance with the • documents hereinabove referred to sufficient to pay all costs of such performance or the enforcement thereof. The provisions of this paragraph are controlling and shall not be construed as being limited by any other provisions of this Note. The remedies of the Holder, as provided herein and in the documents hereinabove referenced, shall be cumulative and concurrent, and may be pursued singly, successively or together, at the sole discretion of the Holder, and may be exercised as often 'as occasion therefor 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 may, in its discretion, waive any default hereunder and its consequences and rescind any declaration of acceleration of principal; provided, however, that no action or inaction by the Holder shall be deemed a waiver of any of the Holder' s rights or remedies unless the Holder specifically agrees in writing that such action or inaction will constitute a waiver of its rights or remedies. Any waiver shall only apply to the particular instance for which it was agreed. No delay in exercising and no failure in exercising any right or remedy hereunder or afforded by law shall be a waiver of 7 or preclude the exercise of any right or remedy hereunder or provided by law whether on such occasion or any future occasion, nor shall such delay be construed as a waiver of any default or acquiescence therein. The exercise or the beginning of the exercise of one right or remedy shall not be deemed a waiver of the right to exercise at the same time or thereafter any other right or remedy. As provided in the Resolution, this Note may be assigned by the Holder, from time to time, by an endorsement hereon or by other writing; provided that notice of such assignment shall be given in writing to the City and the Partnership. It is intended that this Note is made with reference to and shall be governed by and construed in accordance with the- laws of the State of Minnesota. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen and be performed precedent 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 authorized officers and its corporate seal to be hereunto affixed, all on February 19 , 1980. CITY OF EDEN PRAIRIE, MINNES / BY yor Attes (SEAL) i nager -7-