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85-079 - 09-03 Relate $950,000 Industrial Development Revenue NoteResolution 85-79 September 3, 1985 Member Stockman introduced the following resolution and moved its adoption: RESOLUTION RELATING TO $950,000 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 Golden Valley, Minnesota, 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; Borrower: O'Connor & Vanderboom Partnership, a Minnesota general partnership, its successors or permitted assigns; City: the City of Golden Valley, Minnesota, its successors and assigns; Disbursing Agreement: the Escrow and Disbursing Agreement to be entered into between the City, the Borrower, the Lender and Minnesota Title Insurance Company. Guarantors: the Lessee, Steven A. Vanderboom and William A. O'Connor, their successors and permitted assigns; Guaranty: the Guaranty Agreement to be executed from the Guarantors to the Lender; Land: the real estate described in Exhibit A to the Mortgage; Lender: First National Bank of Minneapolis, in Minneapolis, Minnesota, its successors and assigns: Lessee: Pace Laboratories, Inc., a Minnesota corporation, its successors and assigns; Loan Agreement: the Loan Agreement to be executed by and between the City and the Borrower; Mortgage: the Combination Mortgage, Security Agreement and Fixture Financing Statement, from the Borrower, as mortgagor, to the Lender, as mortgagee; Note: the City of Golden Valley, Minnesota, Industrial Development Revenue Note Pace Laboratories, Inc. Project), in the original aggregate principal amount of $950,000, to be issued under this Resolution; Pledge Agreement: the Pledge Agreement to be executed by and between the City and the Lender; Project: the Land and the office and laboratory facility to be expanded, renovated and equipped thereon pursuant to the Loan Agreement and the Disbursing Agreement; Resolution 85-79 - Continued September 3, 1985 Project Costs: those items of Project Costs defined in Section 1.01 of the Loan Agreement; and Resolution: this resolution of the City, adopted September 3, 1985 authorizing the issuance of the Note; Security Agreement: the Security Agreement to be executed from the Lessee to the Lender; Section 2. Findings. It is hereby found and declared that: (a) the real property and improvements described in the Loan Agreement and Exhibit A to the Mortgage constitute a Project authorized by Section 474.02, Subdivision la of the Act; (b) the purpose of the Project is, and the effect thereof will be, to promote the public welfare by the attraction, encouragement and development of economically sound industry and commerce so as to prevent the emergence of or to rehabilitate, so far as possible, blighted and marginal lands and areas of chronic unemployment; the 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; more intensive development of land available in the community to provide an adequate and better balanced tax base to finance the increase in the amount and cost of governmental services; (c) the Project when completed will add to the tax base of the City, and will accordingly be of direct benefit to the taxpayers of the City as well as those of the county and school district in which the City is located; (d) the Project has been approved by the Minnesota Energy and Economic Development Authority as tending to further the purposes and policies of the Act; (e) the financing of the Project, the issuance and sale of the Note, the execution and delivery of the Loan Agreement, the Pledge Agreement and the Disbursing Agreement, and the performance of all covenants and agreements of the City contained in the Note, the Loan Agreement, the Pledge Agreement and the Disbursing Agreement, and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Loan Agreement, the Pledge Agreement, the Note and the Disbursing Agreement valid and binding obligations of the City in accordance with their terms, are authorized by the Act; (f) it is desirable that the Note be issued by the City upon the terms set forth herein and in the Note, and under the provisions of the Pledge Agreement the City's interest in the Loan Agreement and in all payments due thereunder (but excluding its rights to reimbursement of expenses and indemnification) will be assigned and pledged to the Lender, as security for the payment of the principal of and interest on the Note; (g) the payments contained in the Loan 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 the Note when due, and the Loan Agreement also provides that the Borrower 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 Loan Agreement; and Resolution 85-79 - Continued September 3, 1985 (h) under the provisions of Minnesota Statutes, Section 474.10, and as provided in the Loan Agreement, 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 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. 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 "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. 3.02. Preliminary City Aeproval. By preliminary resolution duly adopted by the Council April 16, 1985 the Preliminary Resolution), after a public hearing duly called, noticed and held, this Council approved the sale of the Note in the amount of $950,000 pursuant to the Act and the loan of the proceeds to the Borrower for the acquisition of land and the expansion, renovation and equipment of an office and laboratory facility on the Land and authorized the preparation of documents appropriate to the financing of the Project. 3.03. Allocation of Bond Issuance Authority. The City is an "entitlement issuer" under the Act and has been allocated an entitlement amount of bond issuance authority under the Act for the 1985 calendar year in the amount of $2,784,041. This Council hereby determines to allocate $950,000 of the City's available amount of bond issuance authority under the Act to the Project and the Note. This Council is the body of the City responsible for making such allocation, and adoption of this resolution is intended to be a certification within the meaning of Section 103(n)(12) of the Code under penalties of perjury, by members of the Council voting in favor hereof, that such allocation has not been made in consideration of any bribe, gift, gratuity, or direct or indirect contribution to any political campaign. The members of this Council and officers of the City are hereby authorized and directed to execute such documents as may be necessary to effectuate such allocation. 3.04. Approval of Documents. Pursuant to the above, there have been prepared an presented to this Council copies of the following documents, all of which are now, or shall be, placed on file in the office of the Clerk: (a) Loan Agreement; (b) Mortgage; (c) Disbursing Agreement; (d) Pledge Agreement; (e) Guaranty Agreement; Resolution 85-79 - Continued (f) Security Agreement; and (g) Form of Note. September 3, 1985 The forms of the documents listed in (a) through (g) above are approved, with such variations, insertions and additions as are deemed appropriate by the parties and approved by legal counsel to the City. Section 4. Authorizations. Upon the completion of the Loan Agreement, the Pledge Agreement and the Disbursing Agreement and the execution thereof by the other parties thereto, the Mayor and the City Manager shall execute the same on behalf of the City and shall execute the Note in substantially the form set forth as Exhibit A hereto on behalf of the City, and shall execute such other certifications, documents or instruments as bond counsel or counsel for the Lender shall require, subject to the approval of legal counsel to the City, and all certifications, recitals and representations therein shall constitute the certificates, recitals and representations of the City. Execution of any instrument or document by one or more appropriate officers of the City shall constitute, 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 5. The Note. 5.01. Form and Authorized Amount. The Note shall be issued substantially in the form set forth in Exhibit A hereto with such appropriate variations, omissions, and insertions as are permitted or required by this Resolution and shall be in the total principal amount of $950,000. The terms of the Note are set forth therein, provided that the interest rate to be inserted in paragraph 1(a)(i) shall not exceed 12.8% and the interest rate to be inserted in paragraph 1(a)(ii) shall not exceed 10.8%, and such terms, including but not limited to provisions as to interest rate, dates and amount of payment of principal and interest and prepayment privileges, are incorporated by reference herein. 5.02. 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. 5.03. Delivery and Use of Proceeds. Prior to delivery of the Note, the documents referred to in Section 3.03 hereof shall be completed and executed in form and substance as approved by legal counsel to the City 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 in the total principal amount of $950,000, 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, and payment made for the Note by the Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note to the Escrow Fund created under the Disbursing Agreeement and then disburse the proceeds of the Note to the Borrower for payment or reimbursement of Project Costs in accordance with the provisions of the Disbursing Agreement. The Lender or the Borrower shall provide the City with a full accounting of all funds disbursed for Project Costs. Resolution 85-79 - Continued September 3, 1985 Section 6. Limitations of the City's Obligations. Notwithstanding anything contained in the Note, the Loan Agreement, the Pledge Agreement, the Disbursing Agreement 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 limitation, 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 pledged to the payment thereof, and the City shall not be subject to any liability thereon, and 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, 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, the Loan Agreement, the Pledge Agreement or the Disbursing Agreement and the other documents listed in Section 3.03 hereof shall be subject at all times to the availability of revenues furnished by the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon. �s Mary er�on, Mayor ATTEST: Tr ey P on, City Clerk The motion for the adoption of the foregoing resolution was seconded by Member Bakken and upon a vote being taken thereon, the following voted in favor thereof: Anderson, Bakken, Johnson, Stockman and Thompson; and the following voted against the same: none, whereupon said resolution was declared duly passed and adopted, signed by the Mayor and her signature attested by the City Clerk. Resolution 85-79 - Continued EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF GOLDEN VALLEY Industrial Development Revenue Note (Pace Laboratories, Inc. Project) No. R-1 September 3, 1985 $950,000 The City of Golden Valley, Minnesota, a municipal corporation organized under the constitution and laws of the State of Minnesota (the "City"), for value received, hereby promises to pay to FIRST NATIONAL BANK OF MINNEAPOLIS (the "Lender") or its registered assigns (the Lender and any 'subsequent holder of this Note being also hereinafter referred to as the "Holder"), at its principal office in Minneapolis, 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 NINE THOUSAND FIFTY THOUSAND DOLLARS ($950,000), with interest on the unpaid principal amount at the rate set forth in paragraph 1(a) hereof (the "Tax -Exempt Rate") or at the higher rate specified in paragraph 1(b) hereof (the "Taxable Rate") upon a Determination of Taxability, as hereinafter defined, 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, in accordance with the terms hereinafter set forth: 1. This Note shall bear interest and be payable as follows: (a)(i) Interest shall accrue on the unpaid principal balance of this Note from and after the date of this Note to September 1, 1986 at a Tax -Exempt Rate equal to percent ( %) per annum. (ii) Interest shall accrue on the unpaid principal balance of this Note from and after September 1, 1986 to the first Call Date at a Tax -Exempt Rate equal to percent ( %) per annum. (iii) Interest shall accrue on the unpaid principal balance of this Note from and after the first Call Date to the second Call Date, from and after the second Call Date to the third Call Date, and from and after the Third Call Date to and including the Final Maturity Date at a Tax -Exempt Rate equal to the Adjusted Rate, as computed for each such period on the Call Dates. (iv) Commencing on October 1, 1985, and continuing on the first day of each month thereafter to and including the Final Maturity Date, the unpaid principal balance of this Note, together with interest thereon at the applicable Tax -Exempt Rate, shall be payable in monthly installments of principal and interest sufficient to amortize fully the unpaid principal balance, together with interest at the applicable Tax -Exempt Rate, as and when the Tax -Exempt Rate changes on the Call Dates, in equal monthly installment payments of principal and interest by September 1, 2010. (v) The entire unpaid principal balance hereof, together with all accrued but unpaid interest thereon, and all other indebtedness due hereunder, shall be due and payable on the Final Maturity Date. Resolution 85-79 - Continued September 3, 1985 (b)(i) In the event that the interest on this Note shall become subject to federal income taxation pursuant to a Determination of Taxability (as hereinafter defined), the interest rates specified in paragraph 1(a) hereof shall be increased, retroactively effective from and after the Date of Taxability (as hereinafter defined) to a Taxable Rate equal to eighteen percent (18%). The City shall immediately upon demand pay to the Holder and to each prior Holder affected by such Determination of Taxability an amount equal to the amount by which the interest accrued retroactively at the Taxable Rate from the Date of Taxability to the date of payment exceeds the amount of interest actually accrued and paid to the Holder and any such prior Holder during said period. Such obligation of the City shall survive the payment in full of the principal amount of this Note. Thereafter (unless the Holder shall require prepayment of this Note pursuant to paragraph 3(b) hereof), this Note shall be payable in monthly installments of interest and principal in amounts calculated in the manner specified in paragraph 1(a) hereof but substituting the Taxable Rate for the Tax -Exempt Rate which would otherwise have been applicable from time to time, with a final payment of the entire unpaid principal balance and all interest accrued thereon at the Taxable Rate and all other indebtedness due hereunder to be due and payable on the Final Maturity Date. (ii) The Holder shall permit the Borrower (as hereinafter defined) to contest or appeal any Determination of Taxability at the Borrower's sole expense, provided that the Holder receives an opinion of nationally recognized bond counsel that there is a meritorious basis for such contest or appeal and that there is a reasonable chance of success, and provided further that any such contest or appeal is, in the reasonable opinion of the Holder, being under taken and carried forward in good faith, diligently and with reasonable dispatch. In the event any such contest or appeal is undertaken, the Borrower shall continue to pay interest to the Holder at the Tax -Exempt Rate and the difference between the increased interest provided in paragraph 1(b)(i) hereof and interest at the Tax -Exempt Rate shall, nevertheless, be payable to the Holder and shall be held by the Holder in escrow (without paying interest thereon) pending final disposition of such contest or appeal, provided that the Borrower shall indemnify and hold harmless the Holder and each prior Holder from any and all penalties, interest or other liabilities which they may incur on account of such contest or appeal. (c) As used herein, the following terms have the following meanings: (i) "Adjusted Rate" means a fixed rate per annum equal to either (A)(i) two and one-half percent (2-1/2%) per annum, plus (ii) a rate per annum equal to the average of the yields to maturity stated in the "Twenty Bonds (G.O. Bond) Index" appearing in The Bond Buyer for each of the four (4) weeks prior to the Call Date, rounded to the nearest one-tenth of one percent, or (B), if The Bond Buyer or the "Twenty Bonds (G.O. Bond) Index" is no longer published, the fixed rate per annum equal to the closing yield to maturity, on the Call Date, on the United States Treasury Bond maturing on, or closest to the next succeeding Call Date or the Final Maturity Date. (ii) "Reference Rate" means, the rate per annum publicly announced from time to time by the Lender as its reference rate. (iii) "Final Maturity Date" means September 1, 2010. (iv) "Call Dates" means September 1, 1995, September 1, 2000 and September 1, 2005. Resolution 85-79 - Continued September 3, 1985 To effect any such prepayment, the City shall pay or cause to be paid to the Holder an amount equal, to (i) the principal amount being so prepaid (applying first to such prepayment any amount then held in the Escrow Fund under the Disbursing Agreement), (ii) accrued interest on this Note to the date of such prepayment and (iii) the premium, if any, which is applicable under paragraph 4 hereof. Any partial prepayments shall be applied in inverse order of principal installments payable under paragraph 1(a) hereof. 4. In the event of a prepayment of this Note on any date pursuant to paragraph 3 hereof, a prepayment premium or premiums shall be payable to the Holder as follows: If, at the time of any such payment, the Government Yield determined as of the date of prepayment is less than the Government Yield determined as of the date hereof plus two and one-half percent (2-1/2%), a prepayment premium shall be payable, calculated as follows: the principal amount so prepaid shall be multiplied by (a) the amount by which the Government Yield determined as of the date hereof plus two and one-half percent (2-1/2%) exceeds the Government Yield determined as of the date of prepayment, times (b) a fraction, the numerator of which is the actual number of days remaining to the next succeeding Call Date and the denominator of which is 360. The resulting product shall then be divided by the number of whole months then remaining to the next succeeding Call Date, yielding a quotient (the "Quotient"). The amount of the prepayment premium shall be the present value on the date of prepayment (using the Government Yield determined as of the date of prepayment as the discount factor) of a stream of equal monthly payments in number equal to the number of whole months remaining to the next succeeding Call Date with the amount of each such hypothetical monthly payment equal to the Quotient and with the first payment payable on the date of prepayment; provided, that in no case shall the amount of the prepayment premium be less than one and one-half percent (1-1/2%) of the principal amount so prepaid. 5. This Note constitutes an issue in the maximun authorized face amount of $950,000. 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 the acquisition of land and the expansion, renovation and equipping of an existing office and laboratory facility to be owned by the Borrower (the "Project") and leased to Pace Laboratories, Inc., a Minnesota corporation (the "Lessee"), and paying necessary expenses incidental thereto, such funds to be loaned by the City to the Borrower pursuant to a resolution adopted by the City on September 3, 1985, the Loan Agreement and an Escrow and Disbursing Agreement, dated the date hereof (the "Disbursing Agreement"), between the City, the Borrower, the Lender and Minnesota Title Insurance Company, as Disbursing Agent, thereby assisting activities in the public interest and for the public welfare of the City. This Note is secured by a Combination Mortgage, Security Agreement and Fixture Financing Statement to the Lender, a Pledge Agreement (the "Pledge Agreement"), between the City and the Lender, a Guaranty Agreement (the "Guaranty") from the Lessee and the partners of the Borrower, to the Lender, and a Security Agreement (the "Security Agreement") from the Lessee to the Lender all of even date herewith. Resolution 85-79 - Continued September 3, 1985 6. This Note shall be registered and shall be transferable upon the books of the City at the office of the City Clerk by the Holder hereof in person or by its attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the Holder or its duly authorized attorney. Upon such transfer the City Clerk will note the date of registration and the name and address of the new Holder upon the books of the City and in the registration blank appearing below. Alternatively, the City will at the request and expense of the Holder issue a new note or notes in an aggregate principal amount equal to the unpaid principal balance of this Note, and of like tenor except as to number, principal amount and the number and amount of the installments payable thereunder, and registered in the name of the Holder or such transferee as may be designated by the Holder. The City may deem and treat the person in whose name this Note is land registered upon the books of the City with such registration also noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on account of the principal balance, prepayment price or interest and for all other purposes, and all such payments so made to the Holder or upon its 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. 7. Time is of the essence under this note. If default occurs under this Note, or an Event of Default occurs under the Loan Agreement, the Disbursing Agreement the Mortgage, the Pledge Agreement, the Guaranty, the Security Agreement or under any other "Collateral Document," as defined in the Loan Agreement, or if any other event occurs which entitles the Holder to accelerate payment under the Loan Agreement, the Mortgage, the Disbursing Agreement, the Pledge Agreement, the Guaranty, the Security Agreement or any Collateral Document, then the Holder may at is right and option (subject, however, to such notice as may be required under the Loan Agreement, the Mortgage, the Disbursing Agreement, the Pledge Agreement, the Guaranty, the Security Agreement or such Collateral Document) declare immediately due and payable the principal balance of this Note and interest accrued thereon to the date of declaration of such default, 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, in which event this Note shall be prepaid in accordance with paragraph 3(c) hereof. 8. This Note shall not be payable from nor charged upon any funds of the City other than the revenue under the Loan Agreement pledged to the payment thereof, nor shall the City be subject to any liability thereon. No Holder or Holders of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note, the interest hereon or any premium, penalty, or expenses in connection herewith, nor to enforce payment thereof against any property of the City. This Note shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City. This Note, including interest and premium, if any, hereon, is payable soley from the revenue under the Loan Agreement pledged to the payment hereof. This Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 9. The Holder shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder 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 continuing or as a bar to or waiver of any right or remedy as to a subsequent event. Resolution 85-79 - Continued September 3, 1985 10. 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. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and thing 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 duly authorized officers and its corporate seal affixed all as of the day of September, 1985. CITY OF GOLDEN VALLEY, MINNESOTA By / (SEAL) Mayor Attest ty Manager PROVISIONS AS TO REGISTRATION The ownership of the unpaid principal balance of this Note and the interest accruing hereon is registered on the books of the City of Golden Valley, Minnesota in the name of the registered holder last noted below. Date of Registration September _, 1985 Name and Address of Registered Holder First National Bank of Minneapolis First Bank Place Minneapolis, Minnesota 55480 Signature of City Clerk