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HomeMy WebLinkAbout20832 / off A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF REVENUE BONDS PURSUANT TO CHAPTER 474, MINNESOTA STATUTES, TO PROVIDE FUNDS TO BE LOANED TO ALSTON C. LUNDGREN AND JEAN 0. LUNDGREN FOR INDUSTRIAL PROJECT AND APPROVING MORTGAGE, ASSIGNMENT OF RENTS, LOAN AGREEMENT, GUARANTY AGREEMENT AND PLEDGE AGREEMENT BE IT RESOLVED by the City Council of the City of Eden Prairie, Minnesota, as follows: . 1. Authority. The City is, by the Constitution and Laws of the State oMinnesota, including Chapter 474, Minnesota Statutes, as amended (the "Act") authorized to issue and sell its revenue bonds for the purpose of financing the cost of construc- tion of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. Documents Presented. This Council proposes that the City shall issue and sell its City of Eden Prairie Industrial Development Revenue Bond (Lundgren Project) in substantially the form set forth in Exhibit A hereto (the "Bond") pursuant to the Act and loan the proceeds thereof to Alston C. Lundgren and Jean O. Lundgren (the "Borrowers") to pay the cost of construct- ing a medical. clinic building, together with necessary equipment, exterior utilities and site improvements (the "Project"), all pursuant to the Act. Forms of the following documents relating to the Bond and the Project have been submitted to the City Council and are now on file in the office of the City Clerk: (a) Loan Agreement, dated as of May 1, 1980, between the City and Alston C. Lundgren and Jean 0. Lundgren whereby the City agrees to make a loan to the Borrowers and the Borrowers agree to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of, premium, if any, and interest on the Bond; (b) Assignment and Pledge Agreement (the "Pledge Agreement") , dated as of May 1, 1980 from the City to The Ministers Life and Casualty Union (the "Mortgagee" ) whereby the City assigns its interest in the Loan Agreement to the Mortgagee as security for the Bond; (c) Combination Mortgage, Security Agreement, and Fixture Financing Statement (the "Mortgage" ), dated as of May 1, 1980, between the Borrowers and the Mortgagee by which the Borrowers will grant to the Mortgagee a mortgage lien on and security interest in the Project and all improvements thereto as security for the Bond (this document will not be executed by the City) ; (d) Assignment of Rents (the "Assignment"), dated May 1, 1980, from the Borrowers to the Mortgagee assigning the Borrowers' interests in leases of the Project to the Mortgagee as additional security for the Bond (this document will not be executed by the City) ; and 3. Findings. It is hereby found, determined and declared that: (a) The Project, comprised of the buildings, improvements and equipment described in the Loan Agree- ment and the Mortgage constitutes a project authorized by and described in Section 474.02, Subd. la of the Act. (b) The purpose of the Project is and the effect thereof will be to promote the public welfare by: preventing the emergence of blighted and marginal lands and areas of chronic unemployment, preventing economic deterioration; the development of sound industry and commerce to use the available resources of the commu- nity, in order to retain the benefit of the community's existing investment in educational and public service facilities; halting the movement of talented, educated personnel to other areas and thus preserving the eco- nomic and human resources needed as a base for provid- ing governmental services and facilities; and increasing the tax base of the city and the county and school district in which the Project is located. (c) The Project has been approved by the Commis- sioner of Securities of the State of Minnesota as tending to further the purposes and policies of the Act. (d) The issuance and sale of the Bond, the execu- tion and delivery of the Loan Agreement and the Pledge Agreement and the performance of all covenants and agreements of the City contained in the Bond, the Loan Agreement, and the Pledge Agreement and of all other acts of the City to make the Loan Agreement, the Pledge Agreement and Bond valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (e) It is desirable that the City of Eden Prairie Industrial Development Revenue Bond (Lundgren Project) in the amount of $287,250 be issued by the City upon the terms set forth herein, and that the City's interest in the Loan Agreement be assigned to the Mortgagee as security for the payment of principal and interest on the Bond. -2 (f) The Loan Agreement provides for payments by the Borrowers to the Mortgagee for the account of the City of such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the Bond when due. No reserve funds are deemed necessary for this purpose. The Loan Agreement obligates the Borrowers to provide for the operation and maintenance of the Project, including adequate insurance, taxes and special assessments. (g) Under the provisions of Section 474.10, Minnesota Statutes, and as provided in the Loan Agree- ment, the Bond is not to be payable from nor charged upon any funds other than amounts payable by the Bor- rowers pursuant to the Loan Agreement which are pledged to the payment thereof; the City is not subject to any liability'thereon; no holder of the Bond shall ever have the right to compel the exercise of the taxing power of the City to pay the Bond or the interest thereon, nor to enforce payment thereof against any property of the City; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, other than its rights under the Loan Agreement; the Bond shall recite that the Bond, including interest thereon, shall not constitute nor give rise to a pecuniary liability of the City or a • charge against its general credit or taxing powers and that the Bond does not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. (h) The Municipality is a duly organized and existing municipal corporation under the laws of Minne- sota and has power to issue the Bond under the Act. (i) The Project, the issuance and sale of the Bond, the execution and delivery of the Loan Agreement and the Pledge Agreement, the performance of all cove- nants and agreements of the Municipality contained in the Loan Agreement and Pledge Agreement are valid and binding obligations of the Municipality in accordance with their terms, and the loan of money thereunder are authorized and have been duly authorized by this reso- lution. (j ) There is no litigation pending or, to the best of its knowledge threatened, against the Munici- pality relating to the acquisition, construction and financing of the Project or to the Bond or this Loan Agreement or questioning the organization, powers or authority of the Municipality. i -3- (k) The execution, delivery and performance by the City of the Resolution, the Bond, the Pledge Agree- ment and the Loan Agreement will not conflict with or result in any breach of, any provisions of, or con- stitute a default under, any agreement or instrument to which the City is a party or by which it is bound; provided, however, that this finding is made solely for the purpose of estopping the City from denying the validity of the Bond, or of any of the documents refer- red to in this paragraph, by reason of the existence of any facts contrary to this finding. 4. Approval and Execution of Documents. The forms of Loan Agreement, Pledge Agreement, Combination Mortgage, Security Agreement and Fixture Financing Statement and Assignment of Rents referred to in .paragraph 2 are approved. The Loan Agreement shall be executed in the name and on behalf of the City by the Mayor and City Manager, upon execution thereof by the Borrowers, in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. The Pledge Agreement shall also be executed in the name and on behalf of the City by the Mayor and City Manager in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other laws, as may be approved by the officers executing • the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all documents shall be delivered and filed as provided therein. The Mortgage, and Assignment may- contain such revisions as may be approved by the Mortgagee and the parties executing the same. 5. Approval, Execution and Delivery of Bond. The City shall proceed forthwith to issue its City of Eden Prairie Indus- trial Development Revenue Bond (Lundgren Project), to be dated the date of delivery, in the principal amount of $287,250 in the form and containing the terms set forth in the form of Bond attached hereto as Exhibit A, which terms are for this purpose incorporated in this resolution and made a part hereof. The proposal of the Mortgagee to purchase such Bond at a price of $287,250 (100% of its par value) is hereby found and determined to be reasonable and is hereby accepted. The Mayor and City Manager are authorized and directed to prepare the Bond in type- written form substantially in the form set forth in Exhibit A. The Bond shall be executed by the manual signatures of the Mayor and City Manager and the official seal of the City shall be affixed thereto. When so prepared and executed the Bond shall be delivered to the Mortgagee upon receipt of the purchase price therefor, which may be paid to the parties entitled to receive the loan proceeds in accordance with the Loan Agreement. The Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. -4- • 6. Registration Records. The City Clerk, as Bond Registrar, shall keep a Bond register in which the City shall provide for the registration of the Bond and for transfers of the Bond. The principal of and interest on the Bond shall be payable to the Mortgagee or registered assigns in lawful money of the United States of America at the address of the Mortgagee or registered assigns as shown on the Bond register. 7. Mutilated toot Stolen or Destroyed Bond. If the Bond is mutilated, lost, stolen or destroyed, the City may exe- cute and deliver to the registered owner a new Bond, of like date, number, maturity and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Bond shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Bond, there shall be first furnished to the City and the Borrowers evidence of such loss, theft or destruc- tion satisfactory to the City and the Borrowers together with indemnity satisfactory to them. The City may charge the Bond- holder with its reasonable fees and expenses in this connection. 8. Transfer of Bond; Person Treated as Owner. The Bond shall be transferable by the registered owner on the Bond register of the City, upon presentation of the Bond for notation of such transfer thereon at the office of the City Clerk, as Bond registrar., accompanied by a written instrument of transfer in • form satisfactory to. the Bond registrar duly executed by the registered owner or its attorney duly authorized in writing. The registered owner seeking to transfer ownership of the Bond shall also give written notice thereof to the Borrowers. The Bond shall continue to be subject to successive transfers at the option of the registered owner of the Bond. No service charge shall be made for any such transfer, but the Bond registrar may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Bond registrar shall give written notice to- the Borrowers of any transfer of ownership recorded on the Bond register immediately upon effectuating same. The person in whose name the Bond shall be registered from time to time shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of and interest on the Bond shall be made only to or upon the order of the owner thereof, or its attorney duly authorized in writing, and neither the City, the Bond registrar nor the Borrowers shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. 9. Amendments Changes and Modifications to Loan Agreement, Pledge Aqreement and Bond Resolution. The City shall not, without the written- consent of the Mortgagee, enter into any agreement, change, modification, alteration or termination of the Loan Agreement, the Pledge Agreement. or this Bond Resolution. -5- • 10. The Mayor, City Manager and City Clerk and other officers of the City are authorized and directed to prepare and furnish to the purchaser of the Bond, certified copies of all proceedings and records of the City relating to the Bond, and subject to the approval of the City Attorney, such other affi- davits and certificates as may be required to show the facts appearing 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, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. c Approved )"C May Attest C Clerk' • -6- F • EXHIBIT A TO BOND RESOLUTION (Form of Bond) UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF EDEN PRAIRIE Industrial Development Revenue Bond (Lundgren Project) No. R-1 $287,250 The City of Eden Prairie, a municipal corporation in the County of Hennepin and State of Minnesota (the "City" ) , for value received, hereby promises to pay, but solely from the revenues derived by the City from the Loan Agreement hereinafter described, to THE MINISTERS LIFE AND CASUALTY UNION or its regis- tered assigns, the outstanding and unpaid balance of advances on account of an authorized principal sum of Two Hundred Eighty Seven Thousand Two Hundred Fifty Dollars ($287,250) , or such portion thereof as may be advanced under the Loan Agreement hereinafter described, upon the presentation and surrender hereof, not later than July 1, 2000, to make prepayments of said principal sum in installments as hereinafter provided, and to pay to the owner hereof interest on the outstanding and unpaid balance of such principal sum from the date hereof until said principal sum is paid at the rate of Ten and fifty hundredths percent (10.50%) per annum, which rate is subject to being increased to 14.00% in the event of a Determination of Taxability as is here- inafter provided. Interest only on this Bond accruing from the date hereof shall be paid on July 1, 1980. Thereafter, principal and interest shall be due and payable in consecutive monthly installments of principal and interest in the amount of $2,867.85 each on the first day of each month, commencing August 1, 1980 to and including June 1, 2000 and one final installment of all unpaid principal and interest shall be paid on July 1, 2000. Payments of such installments shall be applied, first to accrued and unpaid interest and next to unpaid principal. Principal and interest on this Bond shall be paid by check or draft mailed to the registered holder hereof at its address as it appears on the registration records maintained by the City Clerk. This Bond is issued pursuant to the Minnesota Municipal Industrial Development Act, Chapter 474, Minnesota Statutes, as • amended (the "Act" ) , and in conformity with the provisions, re- strictions and limitations thereof. This Bond does not consti- tute a charge against the general credit or taxing powers of the City and does not grant to the owner or holder of this Bond any right to have the City levy any taxes or appropriate any funds • for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation of the City or the individual officers or agents thereof. This Bond, the interest, premiums, penalties, late charges, processing fees and other payments required herein, however designated, are payable solely and only from the moneys received under the Loan Agreement hereinafter mentioned, including the loan repayments to be made by Alston C. Lundgren and Jean O. Lundgren, individuals residing in the City of Minnetonka, Minnesota (the "Borrowers") and from enforcement of the Mortgage and other security documents hereinafter described. The provisions of this paragraph are controlling and shall not be construed as being limited by any other provision of the Bond. This Bond represents an authorized series of special obligation Bonds in the aggregate principal amount of $287,250 which have been authorized by law to be issued and have been issued for the purpose of funding a loan from the City to the Borrowers to finance the costs of constructing a medical clinic building in the City (the "Project") . This Bond is issued pur- suant to a Loan Agreement (the "Loan Agreement" ) between the City and the Borrowers dated as of May 1, 1980, and a Bond Resolution of the City duly adopted June 3, 1980. This Bond is secured by the Loan Agreement, the Bond Resolution, a Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage") by the Borrowers to The Ministers Life and Casualty Union (the "Mortgagee" ) dated as of May 1, 1980, an Assignment of Rents (the • "Assignment" ) from the Borrowers to the Mortgagee dated as of May 1, 1980 an Assignment and Pledge Agreement (the "Pledge Agreement" ) dated as of May 1, 1980 whereby the Municipality has pledged its rights under the Loan Agreement to the Mortgagee to which Loan Agreement, Bond Resolution, Mortgage, Assignment, and Pledge Agreement and amendments thereof reference is hereby made for a description and limitation of the revenues and funds pledged and appropriated to the payment of the Bond, the nature and extent of the security thereby created, the rights of the Holder of the Bond, the rights, duties and immunities of the Borrowers, and the Guarantors and the rights, immunities and obligations of the City thereunder. Certified copies of the Bond Resolution and executed counterparts of the Loan Agreement, Mortgage, Assign- ment, and Pledge Agreement are on file at the office of the City Clerk. In the event of a Determination of Taxability, as defined in the Loan Agreement, this Bond shall bear interest at the rate of 14.00% per annum from the date from which interest the Bond is determined to have been taxable, and in such event monthly payments of principal and interest from and after the date from which the Bond is determined to have been taxable shall be increased as is necessary to amortize the then outstanding principal and interest thereon at the rate of 14.00% per annum for the remaining maturity of this Bond, and the Borrowers shall . promptly pay on behalf of the City to the registered owner the aggregate difference between (i) the amounts actually paid hereunder -2- • between the date from which the Bond is determined to have been taxable and the effective date of such rate increase and (ii) the amounts which would have been paid to such registered owner during such period if the increased rate had been in effect. The outstanding and unpaid balance of advances on account of the authorized principal sum of this Bond is equal to the aggregate of loans made by the City to the Borrowers from Bond proceeds paid by the .Mortgagee under the Loan Agreement, as evidenced by the notations on Annex A attached to this Bond and hereby made a part hereof, less repayments of principal made to the Holder hereof. The notation of the amount and date of an advance and receipt by the Authorized Borrowers Representative set forth on Annex A is conclusive evidence of the amount and date of the payment by the Mortgagee, the loan by the Munici- pality to the Borrowers, and the receipt of the loan by the Borrowers. This Bond is subject to prepayment, at the option of the City, at the request of the Borrowers, in whole or in part on any installment payment date on or after July 1, 1990 at par, plus accrued interest, plus a premium on the principal amount prepaid as follows: Prepayment Redemption Dates Premium July 1, 1990 to June 1, 1991 5% July 1, 1991 to June 1, 1992 4% July 1, 1992 to June 1, 1993 3% July 1, 1993 to June 1, 1994 2% July 1, 1994 and thereafter 1% This Bond is also subject to prepayment without premium in certain instances of damage to or destruction or condemnation of the Project as provided in the Loan Agreement and Mortgage. All prepayments, whether voluntary or otherwise, shall be applied in inverse order of maturity. Notice of any such prepayment shall be given to the owner or registered assigns of this Bond by certified or regis- tered mail, addressed to him at his registered address, not later than thirty (30) days prior to the date fixed for prepayment, and shall be published, if required by law, in a financial journal circulated in the English language in the cities of Minneapolis or St. Paul, Minnesota, at least once, not less than thirty (30) days before the date so fixed for prepayment. At the date fixed for prepayment, funds shall be paid to the registered owner hereof at its registered address, sufficient to pay the Bond, prepayment premium and accrued interest thereon. Upon the happen- ing of the above conditions, the Bond thus called shall not bear interest after the date specified for prepayment. -3- • This Bond is transferable, as provided in the Bond Resolution, only upon the Bond register of the City Clerk, as bond registrar, by the owner hereof in person or by his duly authorized attorney, as provided in the Bond Resolution. In case this Bond shall become mutilated, lost or destroyed, a substitute Bond may be issued in the manner and subject to the conditions provided in the Bond Resolution. In case an Event of Default as defined in the Loan Agreement occurs, the Bond and the Loan Repayments thereafter to become due under the Loan Agreement may become immediately due and payable, in the manner and with the effect and subject to the conditions provided in the Loan Agreement. The Holder of the Bond shall have the right to enforce the provisions of the Bond Resolution, Loan Agreement, Pledge Agreement, Assignment and Mortgage. The terms and provisions of the Bond Resolution, Loan Agreement, Mortgage and Assignment or of any instrument supple- mental thereto, may be modified or altered pursuant to Section 8.04 of the Loan Agreement and paragraph 9 of the Bond Resolution. It is hereby certified and recited and the City Council has found: That the Project is an eligible "project" defined in Section .474.02, Subd. la of the Act; that the issuance of the Bond and the acquisition and construction of the Project will • promote the public welfare and carry out the purposes of the Act; that the Project has been approved by the Commissioner of Secur- ities of the State of Minnesota as tending to further the purposes and policies of the Act; that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been properly done, have happened and have been performed in regular and due time, form and manner as required by law; and that this Bond does not constitute a debt of the City within the meaning of any constitutional or statutory limitation. IN WITNESS WHEREOF, the City of Eden Prairie, by its City Council, has caused this Bond to be signed in its behalf by the manual signatures of the Mayor and the City Clerk and sealed with the corporate seal of the City, all as of the day of 1980. CITY OF EDEN PRAIRIE By (Seal) Mayor And by City Clerk -4- i (Form of Transfer Endorsement) For value received, the undersigned owner does hereby assign and transfer the foregoing Bond to the named Assignee, and the undersigned City Clerk of the City of Eden Prairie as bond registrar hereby certifies that the foregoing Bond has been transferred and registered -on the note register in the name of such Assignee. Date of Name of Signature of Signature of Transfer on Assignee Owner City Clerk Bond Register (Form .of Annex A) The undersigned Authorized Borrowers Representative hereby certify that The Ministers Life and Casualty Union as purchaser thereof, has made the following payment of an install- ment of the purchase price of the City of Eden Prairie Industrial Development Revenue Bond (Lundgren Project) , and that said payment • has been loaned to and received by Alston C. Lundgren and Jean 0. Landgren (the "Borrowers" ) pursuant to the Loan Agreement dated as of May 1, 1980, between the City of Eden Prairie and the Borrowers. Signature of Amount of Date of Authorized Borrowers Payment Payment Representative -5-