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HomeMy WebLinkAboutResolution - 80-103 - Authorizing Revenue Bonds and Providing for Issuance and sale of a Temporary Revenue Note for Vikings II, Inc. - 06/03/1980 •3 U [Bond Resolution] [RESOLUTION d O - lO 3 ] A RESOLUTION AUTHORIZING REVENUE BONDS AND PROVIDING FOR THE ISSUANCE AND SALE OF A TEMPORARY REVENUE NOTE PURSUANT TO CHAPTER 474, MINNESOTA STATUTES, TO PROVIDE FUNDS TO BE LOANED TO VIKINGS II, INC. FOR INDUSTRIAL DEVELOPMENT PROJECT 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 of Minnesota, 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 con- struction of authorized projects, to issue and sell notes to evidence temporary loans to be repaid from the proceeds of reve- nue bonds when issued, and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act and to pledge revenues of the project and otherwise secure such bonds and notes. 2. Authorization of Note and Bonds. The City Council hereby determines that it is desirable and expedient to autho- rize, and the City Council does hereby authorize, subject to final approval of the terms thereof by this Council, the issuance of revenue bonds of the City in the authorized principal amount of Six Million Dollars ($6,000,000) pursuant to the Act to provide money to be loaned to Vikings II, Inc. , a Minnesota corporation, (the "Company" ) , to finance costs of acquiring land in the City for, and to construct and equip, an office builidng and training and practice facilities (the "Project, " as more fully defined in the Loan Agreement hereinafter mentioned) to be leased to the Minnesota Vikings Football Club, Inc. (the "Lessee" ) . In antic- ipation of the issuance of the revenue bonds authorized by this paragraph, and in order to provide temporary financing for the Project, the City shall issue and sell its $4,000,000 City of Eden Prairie Industrial Development Revenue Note (Vikings II, Inc. Project) (the "Note" ) . 1 v • 3 . Documents Presented. Forms of the following docu- ments relating to the Note and the Project have been submitted to and examined by the City Council and are now on file in the office of the City Clerk: (a) Loan and Purchase Agreement (the "Loan Agree- ment" ) , dated as of June 1, 1980, by and among the City, the Company and First National Bank of Minneapolis (the "Bank" ) whereby, among other things, the City agrees to sell and the Bank agrees to purchase the Note, the City agrees to make a loan to the Company of the proceeds of the sale of the Note and the Company covenants to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of and interest on the Note; (b) Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage" ) dated as of June 1, 1980, by and between the Company and the Bank, whereby the Company mortgages to the Bank the Project Site, and the other Project Facilities, all as defined in the Loan Agreement, as security for the Note (this document not to be executed by the City) ; (c) Assignment of Rents (the "Assignment" ) dated as of June 1, 1980, from the Borrower to the Bank, • whereby the Company assigns to the Bank its interests in all leases and rents derived from the Project Facilities; (d) Pledge Agreement (the "Pledge Agreement" ) dated as of June 1, 1980, whereby the City assigns to the Bank all of its interest in the Loan Agreement and Loan Repayments of the Company payable thereunder (except its rights under Sections 5.02, 7.01, 8.04 and 8.05) , for the purpose of securing the Note; and (e) Escrow Agreement (the "Escrow Agreement" ) dated as of June 1, 1980 by and among the City, the Company and the Bank as Escrow Agent, whereby among other things the City directs that proceeds of the sale of the Note shall be paid to the Bank, as Escrow Agent, and held, administered and invested by the Escrow Agent and disbursed for the payment of Project Costs. 4. Findings. It is hereby found, determined and declared that: (a) The Project, as described in paragraph 2 hereof and in the Loan Agreement, based upon the re- presentations of the Company, constitutes a project authorized by and described in Section 474.02, Subd. la, of the Act. -2- t v . (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 com- munity, in order to retain the benefit of the com- munity's existing investment in educational and public service facilities; and halting the movement of talented, educated personnel to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; and providing a more adequate tax base to finance the costs of governmental services. (c) The Project has been approved by a prelim- inary resolution of the City Council duly adopted May 6, 1980, and by the Commissioner of Securities of the State of Minnesota as tending to further the pur- poses and policies of the Act. (d) The issuance and sale of the Note, the execu- tion and delivery of the Loan Agreement, the Pledge Agreement and the Escrow Agreement and the performance of all covenants and agreements of the City contained in the Note, the Loan Agreement, the Pledge Agreement and the Escrow Agreement and of all other acts and things required to make the Note, the Loan Agreement, the Pledge Agreement and the Escrow Agreement valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (e) There is no litigation pending or, to the best of its knowledge threatened, against the City relating to the Project or to the Note or Loan Agree- ment, or questioning the organization of the City or its power or authority to issue the Note or execute and deliver the Loan Agreement and the Pledge Agreement and the Escrow Agreement. (f) The execution, delivery and performance of the City's obligations under the Note, the Loan Agree- ment, the Pledge Agreement, and the Escrow Agreement have been fully authorized by all requisite action, including adoption of this resolution, and do not and will not violate any order or judgment of any court or other agency of government in any litigation to which the City is a party or by which it is bound, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument; provided, however, that this finding is made solely for the purpose of estopping the City -3- from denying the validity of the Note or any of the documents referenced in this paragraph by reason of the existence of any facts contrary to this finding. (g) The Loan Agreement provides for payments by the Company to the Bank as Holder of the Note for the account of the City of such amounts as will be suf- ficient to pay the principal of and interest on the Note when due. No reserve funds are deemed necessary for this purpose. The Loan Agreement obligates the Company to provide for the operation and maintenance of the Project Facilities, including adequate insurance, taxes and special assessments. (h) Under the provisions of Section 474.10 of the Act, and the Note shall recite that, the Note is not to be payable from nor charged upon any funds other than amounts payable by the Company pursuant to the Loan Agreement which are pledged to the payment thereof, and, in event of default, undisbursed moneys held under the Escrow Agreement and moneys derived from foreclo- sure or other enforcement of the Mortgage; the City is not subject to any liability thereon; no Holder of the Note shall ever have the right to compel the 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; and such Note does not con- stitute an indebtedness of the City within the meaning of any constitutional, statutory or charter limitation. (i) Nothing has come to the attention of the City Council to indicate that any member of the City Council (i) has a direct or indirect interest in the Project, the Loan Agreement, the Pledge Agreement, the Escrow Agreement or the Note, (ii) owns any capital stock of or other interest in the Project, the Company, the Lessee or the Bank, (iii) is an officer or director of either the Company, the Lessee, or the Bank, (iv) will be involved in supervising the completion of the Project on behalf of the Company, or (v) will receive any commission, bonus or other remuneration for or in respect of the Project, the Loan Agreement, the Escrow Agreement or the Note. (j ) The Municipality is a duly organized and existing municipal corporation under the laws of the State of Minnesota and has power to issue the Note under the Act. -4- 5. Approval and Execution of Documents. The forms of Loan Agreement, Pledge Agreement, Escrow Agreement, Mortgage and Assignment referred to in paragraph 3 are approved. The Loan Agreement, Escrow Agreement and Pledge Agreement shall be executed in the name and on behalf of the City by the Mayor, the City Manager and the City Clerk, upon execution of the Loan Agreement and Escrow Agreement by the Company and the Bank, or shall be executed by other appropriate officers of the City authorized to execute documents on behalf of such officers, in substantially the form on file, but with all such changes therein, not incon- sistent 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 Mortgage and the Assign- ment may contain such revisions as may be approved by the Bank and the Company. 6. Approval of Terms and Sale of Note. The City shall proceed forthwith to issue the Note, in the authorized principal amount of $4, 000, 000, substantially in the form, maturing, bearing interest, payable in the installments and otherwise containing the provisions set forth in the form of Note attached hereto as Exhibit 1, which terms and provisions are hereby approved and incorporated in this Bond Resolution and made a part hereof. A single Note, substantially in the form of Exhibit 1 . to this Bond Resolution, shall be issued and delivered to the Bank in the principal amount of $4,000, 000 and as authorized by the Act, the principal of and interest on the Note shall be payable at the office of the Bank in Minneapolis, Minnesota. The proposal of the Bank to purchase the Note at a purchase price of $4,000, 000 (100% of par value) is hereby found and determined to be reasonable and is hereby accepted. Pursuant to the Loan Agreement, the Bank has agreed to pay the purchase price to provide funds to be loaned by the City to the Company to pay Project Costs, as defined in the Escrow Agreement, when due. 7. Execution, and Delivery of Note. The Note may be in typewritten or printed form and shall be executed by the manual signatures of the Mayor and the City Manager and shall be attested by the manual signature of the City Clerk, and the official seal of the City shall be affixed thereto. When so prepared and executed, "the Note shall be delivered to the Bank upon payment of the purchase price, and upon receipt of the signed legal opinion of Faegre & Benson, of Minneapolis, Minnesota, bond counsel, pursuant to the Loan Agreement. The Note shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regular- ity of the issuance thereof. 8. Registration Records. The City Clerk, as note registrar, shall keep a note register in which the City shall provide for the registration of the Note and for transfers of the Note. The principal of and interest on the Note shall be paid to the Bank for the account of the Holder entitled thereto in Federal -5- or other immediately available funds. The City Clerk is autho- rized and directed to deliver a certified copy of this Bond Resolution to the Director of Finance and Records, acting as County Auditor, of Hennepin County, together with such other information as the County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Note on his bond register as required by the Act and Section 475.63, Minnesota Statutes. 9. Mutilated, Lost, Stolen or Destroyed Note. If the Note is mutilated, lost, stolen or destroyed, the City may execute and deliver to the Holder a new Note of like amount, date, number and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Note shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Note, there shall be first furnished to the City and the Company evidence of such loss, theft or destruction satis- factory to the City and the Company, together with indemnity satisfactory to them. The City and the Company may charge the Holder with their reasonable fees and expenses in replacing any mutilated, lost, stolen or destroyed Note. 10. Transfer of Note; Person Treated as Holder. The Note shall be transferable by the Holder on the note register of the City, upon presentation of the Note for notation of such • transfer thereon at the office of the City Clerk, as note regis- trar, accompanied by a written instrument of transfer in form satisfactory to the City Clerk duly executed by the Holder or its attorney duly authorized in writing. The Holder seeking to transfer ownership of the Note shall also give written notice thereof to the Company. The Note shall continue to be subject to successive transfers at the option of the Holder of the Note. No service charge shall be made for any such transfer, but the City Clerk may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The person in whose name the Note shall be issued or, if transferred, shall be registered from time to time shall be deemed and regarded as the absolute Holder thereof for all purposes, and payment of or on account of the principal of and interest on the Note shall be made only to or upon the order of the Holder thereof, or its attorney duly authorized in writing, and neither the City, the City Clerk, the Company, nor the Bank 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 Note to the extent of the sum or sums so paid. The Note shall be initially registered in the name of the Bank. 11. Amendments, Changes and Modifications to Loan Agreement, Pledge Agreement and Bond Resolution. Except pursuant to Section 9 .03 of the Loan Agreement, the City shall not enter into or make any change, modification, alteration or termination of the Loan Agreement, Pledge Agreement, Escrow Agreement or this Bond Resolution. -6- 12. Pledge to Holder. The City hereby pledges b and assigns to the Holder of the Note the proceeds of the revenue bonds authorized by paragraph 2 hereof, provided that the final terms of such revenue bonds shall be subject to final approval by the City Council, in anticipation of the issuance of which revenue bonds the Note is being issued. Pursuant to the Pledge Agreement, the City shall pledge and assign to the Bank and its successor Holders of the Note all interest of the City (other than certain rights to indemnity and repayment of advances and expenses) in the revenues of the Project and the Project Facilities, including all Loan Repayments to be made by the Company under the Loan Agreement and moneys derived from enforcement of the Mortgage. All collections of moneys by the City in any proceeding for enforcement of the obligations of the Company under the Loan Agreement shall be received, held and applied by the City for the benefit of the Holder of the Note. 13. Covenants with Holders; Enforceability. All provisions of the Note and of this Bond Resolution and all representations and undertakings by the City in the Loan Agreement are hereby declared to be covenants between the City and the Bank and its successor Holders of the Note and shall be enforceable by the Bank or any Holder in a proceeding brought for that purpose, provided that no such covenant, representation or• undertaking shall ever give rise to any general liability of the City, its employees, officers or agents or constitute a charge against its general credit or taxing powers. 14. Authorized Representative. The City Clerk is hereby designated as the Authorized Municipal representative for all purposes of the Loan Agreement with full authority to do on behalf of the City all those things required or authorized by the Loan Agreement to be done by action or certificate of the Authorized Municipal Representative. 15. Disbursement of Proceeds. There is hereby created and established with the Escrow Agent pursuant to the Escrow Agreement a trust fund in the name of the City to be designated "City of Eden Prairie Construction Fund - Vikings II, Inc. Project" (the "Construction Fund" ) into which all proceeds derived from the sale of the Note by the City will be deposited. The Escrow Agent shall hold, administer, invest and disburse the moneys in accordance with the terms of- the Escrow Agreement for the payment of authorized Project Costs as defined in Section 4 of the Escrow Agreement and of the Note pursuant to Section 3 or 9 of the Escrow Agreement. 16. Definitions and Interpretation. Terms not otherwise defined in this Bond Resolution but defined in the Loan Agreement shall have the same meanings in this Bond Resolution and shall be interpreted herein as provided therein. Notices may be given as provided in Section 9.01 of the Loan Agreement. In case any provision of this Bond -7- Resolution is for any reason illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the remaining provisions of this Bond Resolution, which shall be construed or enforced as if such illegal or invalid or inoperable provision were not contained herein. 17. Election Under Internal Revenue Code. The City hereby elects that the provisions of Section 103(b) (6) (D) of the Internal Revenue Code of 1954 and Reg. §1.103-10(b) (2) (vi) thereunder, permitting the issuance of tax exempt industrial development bonds in amounts up to $10, 000, 000 under certain conditions, shall apply to the Bond, and the Mayor, the City Manager or City Clerk or any of them are authorized to execute and file the appropriate form of election under the Code and Regulations with the Internal Revenue Service. 18. Certifications. The Mayor, City Manager, City Clerk, and other officers of the City are authorized and directed to prepare and furnish to Messrs. Faegre & Benson, bond counsel, to the Company, to the Bank and to counsel for the Company and the Bank, certified copies of all proceedings and records of the City relating to the Project and the Note, and such other affidavits and certifi- cates 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. Sidney Paul Acting May ATTEST: SEAL Joh rane, k Allb -8- -