Loading...
HomeMy WebLinkAboutResolution - 84-305 - Approve MIDB's Computer Depot, Inc. - $3,400,000 - RESOLUTION NO. A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF A REVENUE BOND PURSUANT TO THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT TO PROVIDE FUNDS TO BE LOANED TO COMPUTER DEPOT , INC . , A MINNESOTA CORPORATION, FOR A COMMERCIAL PROJECT AND APPROVING THE DISBURS- ING AGREEMENT , LOAN AGREEMENT, ASSIGNMENT AND PLEDGE OF LOAF: AGREEMENT , COMBINATION MORTGAGE, SECURITY AGREEMENT, AND FIXTURE FINANCING STATEMENT , AND ASSIGNMENT OF RENTS AND LEASES . BE IT RESOLVED by the City Council (this "Council" ) of the City of Eder, Prairie , Minnesota ( the "City" ) , as follows : 1 . Authority . The City is , by 'the Constitution and Laws of the State of Minnesota , including the Municipal Industrial Development Act, Minnesota Statutes , Chapter 474 , as amended (the "Act ") authorized to issue and sell its revenue bonds for the purpose of financing the acquisition , construction and equipping 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 Commercial Development Revenue Bond (Computer Depot , Inc . Project) in substantially the form set forth in Exhibit A attached hereto ( the "Bond" ) and loan the proceeds thereof to Computer Depot , Inc. , a Minnesota corporation (the "Company" ) to partially pay the cost of acquiring, con- structing and equipping an office-service-warehouse building and related facilities , together with necessary 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 this Council and are now on file in the office of -the City Clerk: a . Disbursing Agreement , dated as of November 1 , 1984 , among the Company , the Bank , hereinafter defined , and Title Services , Inc . , as agent for Commonwealth Land Title Insurar_ce Company , providing for the purchase of the Bond by the Bank and the making of advances thereunder in accordance with the terms and conditions set forth therein; b . Loan Agreement, dated as of November 1 , 1984 , between the City and the Company whereby the City agrees to make a loan to the company of the: funds advanced by the Bank, herein- after def=_ned , under the Disbursing Agreement and the Company agrees to complete the Project and to pay amounts sufficient to -2- •«7 provide for the prompt payment of -the principal of and interest on the Bond ; C . Assignment and Pledge Agreement of Loan Agreement datea as of November 1 , 1984 ( the "Pledge Agreement" ) by the City in favor of The First National Bark of St . Paul , a national banking association ( the "Bank" ) , whereby the City assigns certain of its interest in the Loan Agreement to the Barak as security for the Bond ; d . Combine(l rortgage , Security Agreement, and Fixture Einancing Statement, dated as of November 1 , 1984 (the "MortgagE:" ) , by the Company in favor of the Bark by which the Company grants tothe Bank a first 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) and e. Assignment of Rents and Leases dated as of Novem- ber 1 , 1984 (the "Assignment" ) , by the Company in favor of the Bank whereby the Company assigns its interest in the rents and leases of the Project to the Bank as additional security for the Bond ( ,this document will not be executed by the City) . 3 . Findings . At a public hearing , duly called , noticed and held on November 20 , 1984 , in accordance with Section 103 (k) of the Internal Revenue Code of 1954 , as amended, all parties desiring to appear were afforded an opportunity to be heard. Based upon such public hearing , the public hearing held on August 7 , 1984 , in accordance with the Act , and such other facts and circumstances as this Council deemed necessary , it is hereby found , determined and declared that : a . The City is a duly organized and existing municipal. corporation under_ the Constitution and the laws of the State of Minnesota with the powers and authority , among others , to issue the Bond under the Act . 17) . The Project, comprised of the building, improve- ments and equipment described in the Loan Agreement and the Mortgage , constitutes a project authorized by and described in Section 474 . 02 , Subd , la of the Act . C . The purpose of the Project is and the effect thereof will be to promote the public welfare by : the encourage- ment and promotion of employment opportunities within the City anO its surrounding areas; the development of sound industry and commerce to use the available resources of the City, in order to retain the benefit of the City ' s existing investment in educa- tional_ and public service facilities ; halting the movement of talented , educated personnel to other areas and thus preserving -3- i the economic and human resources needed as a base for providing governmental services and facilities; and increasing the tax base of the City , county and school district in which the Project is located . d The Project has been approved by the Minnesota Energy and Economic Development Authority . e . The issuance and sale of the Band , the execution and delivery of the Disbursing Agreement , Loan Agreement and Pledge Agreement and the performance of all covenants and acreements of the City contained in the Bond, Disbursi..-19 Agree- ment , Loan P.greeinent and Pledge Agreement and of all other acts of the City to make the Disbursing Agreement, Loan Agreement , Pledge Agreement and Bond valid and binding obligations of the City in accordance with their terms , are authorized by the Act. E . To the best knowledge of the members of this Council , there is no litigation , action , suit , proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against , or affecting the City wherein an unfavorable decision , ruling or finding would adversely affect the transactions contemplated by or the validity or enforceability of this 13ond Resolution , the Disbursing Agreement, Loan Agreement , or Pledge Agreement in accordance with their respective term . g . There are no agreements to which the City is a party , ordinances or resolutions of the City or court orders directed to the City affecting the validity.- or enforceability of this Bond Resolution , the Disbursing Agreement, Loan Agreement or Pledge Agreement provided , however, that this finding is made solely for the purpose of estopping the City from denying the validity of the Bond , Disbursing Agreement , Loan Agreement or Pledge Agreement by reason of the existence of any facts contrary to this finding . h . It is desirable that the City of Eden Prairie, Minnesota Commercial Development Revenue Bond (Computer Depot , Inc. Project) in the amount of $3 , 400 , 000 be issued by the City upon the terms set forth herein , and that certain of the City' s interest in the Loan Agreement be assigned to the Bank as security for the payment of principal of and interest on the Bond. i . The Loan Agreement provides for payments by the Company to the Bank for the account of the City of such amounts as will be sufficient to pay the principal of and interest on the Bond 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 , including adequate insurance, taxes and special assessments . -4- j . Under the provisions of Section 474 . 10 of the Act , and as provided in the Loan Agreement , the Bond 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; the City is not subject to any liability thereon; no holder o- Lhe 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 . 4 . Approval and Execution of Documents . The forms of Disbursinc Agreement, Loan Agreement , and Pledge Agreement referred to in Paragraph 2 hereof are approved . The Disbursing Agreement and the Loan Agreement shall be executed in the name and on behalf of the City by the Mayor and the City Manager , upon execution: thereof by the Company, 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 can behalf of the City by the Mayor and the 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 Bank and the parties executing the same. 5 . Approval , Execution and Delivery of Bond . The City shall proceed forthwith to issue its Commercial Development Revenue Bond (Computer Depot , Inc. Project) , to be dated the date of delivery , in the principal amount of $3 , 400 ,000 in the Form and containing the terms set forth in the form of Bond attached hereto as Exhibit A, which termF are for this purpose incorpo- rated in this resolution and made a part hereof . The proposal of the Bank to purchase the Bond at a price of $3 ,400 , 000 (100% of its par value) in accordance with the Disbursing Agreement is hereby found and determined to be reasonable and is hereby accepted . The Mayor and the City Manager are authorized and directed to prepare the Bond in typewritten form substantially in the form set forth in Exhibit A attached hereto. The Bond shall -5- be executed by the manual signatures of the Mayor and the 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 Bank upon receipt of the purchase price therefor , which may be paid to the parties entitled to receive the loan proceeds in accordance with the Disbursing Agreement and 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 . 6 . Capital Exnenelitures Elect--ion. The City hereby elects to have the Ten Mi:l lion Dollar ($1. 0 , 000 , 000) limitation set forth in Section 103 (b) (6 ) (D) of the Internal Revenue Code of 1954 , as amended from time to time (the "Code" ) , applicable to the Bond in lieu of the One Million Dollar ($1 , 000 , 000) limitation set forth in Section 103 (b) ( 6 ) (A) of the Code . The City Clerk shall execute and file , in the nano and on behalf of the City, the form of election required by Section 103 (b) ( 6) (D) of the Code and shall pr.-o�7ide the ins ormatior. required pursuant to the regula- tions promulgated thereunder. 7 . Registration Records_. The City Clerk , as bond regis- trar ( the "Bond Registrar" ) , shall keep a bond register (the "Bond Register" ) in which the City shall provide for the regi- stration of the Bond and for transfers of the Bond . The princi- pal of and interest on the Bond shall be payable to the Bank or registered assigns in lawful money of the United States of America at the address of the hank or registered assigns as shown on the Bond Register . 8 . Mutilated , _Lost , Stolen or Destroyed Bond . If the Bond is mutilated , lost , stolen or destroyed , the City may execute 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 Company evidence of such loss , theft or destruc- tion satisfactory to the City and the Company together with indemnity satisfactory to them . The City may charge the holder of the Bond with its reasonable fees and expenses in this connection . 9 . Transfer of Bond; Person Treated as Owner . The Bond shall be transferable by the registered owner on the Frond 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 -6- also give written notice thereof to the Company . 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 govern- mental charge payable in connection therewith . The Bond Regis- trar shall give written notice to the Company of any transfer of ownership recorded on the Bond Register immediately upon effec- tuating same . The parson 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 registered owner thereof , or its attorney duly authorized in writing, and neither the City , the Bone? Registrar nor the Company 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 . 10 . Amendments , Changes and Modifications . The City shall not, without the written consent of the Bank , enter into any agreement , change , modification, alteration or termination of the Disbursing Agreement , Loan Agreement , Pledge Agreement or this Bond Resolution. s 11 . Proceedings and Records Relating to Bond . 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 ali proceedings and records of the City relating to the Bond , and such other affidavits 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 , certifi- cates and affidavits , including any heretofore furnished , shall constitute representations of the City as to the truth of all stater—rits contained therein . 11) . Liability of City Limited . It is understood and agreed by the Company and the Bank that no covenant , provision or agree- ment of the City in any of the documents referred to in Para- graph 4 hereof, in the Bond, or in any other document executed by the City in connection with the issuance , sale and delivery of the Bond , shall give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers or shall obligate the City financially in any way except with respect to the Loan Agreement and the application of revenues therefrom and the proceeds of the Bond. No failure of the City to comply with any term, condition, covenant or agreement therein shall subject the City to liability for any claim for damages , costs or other financial or pecuniary charges except to the extent that the same can be paid or recovered from the Loan Agreement or revenues -7- therefrom or proceeds of the Bond . No execution on any claim, demand , cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City . In making the agreements , provisions and covenants set forth therein , the City has not obligated itself except with respect to the Loan Agreement and the application of revenues thereunder as therein provided . The Bond constitutes a special obligation of the City , payable solely from the revenues pledged to the payment thereof_ pursuant to the Loan Agreement , and does not now and shall never constitute an indebtedness or a loan of the credit of the City, the State of Minnesota or any political subdivision thereof or a charge against general taxing powers within the meaning of any constitutional or statutory provision whatsoever . It is further understood and agreed by the Company and the Bank that the City shall incur no pecuniary liability under the Loan Agreement and shall not be liable for any expenses related thereto, all of which the Company agrees to pay. if , notwithstanding the provisions of Section 8 . 04 of the Loan Agreement , the City incurs any expense , or suffers any losses , claims or damages or incurs any liabilities , the Company will indemnify and hold harmless the City from the same and will reimburse the City for any legal or other expenses incurred by the City in relation thereto , and this covenant to indemnify , hold harmless and reimburse the Citv shall survive delivery of y and payment for the Bond . The liability of the City is further restricted as provided in Section 474 . 10 of the Act. Approved : Wok ga;ig, Pe( zel , Mayor Attest : � JQhn 'D. Frar.e , City Clerk i Action on foregoing resolution : Motion for adoption : _ Seconded by . Voted in favor of : Voted against : Resolution adopted . -8-