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99-074 - 09-07 - Authorze Issuance Sale of $2,000,000 Industrial Development Revenue Bond (Courage Center Project) Series 1999Resolution 99-74 September 7, 1999 • Member Johnson introduced the following resolution and moved its adoption: RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $2,000,000 INDUSTRIAL DEVELOPMENT REVENUE BOND (COURAGE CENTER PROJECT) SERIES 1999 BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota (the "City"), as follows: 1. The City has received a proposal from Courage Center, a Minnesota nonprofit corporation (the "Borrower"), that the City undertake to finance the Project described herein pursuant to Minnesota Statutes, Sections 469.152 to 469.165, as amended (the "Act"), through issuance by the City of its Industrial Development Revenue Bond (Courage Center Project), Series 1999, in a principal amount of $2,000,000 (the "Bond"). 2. It is proposed that, pursuant to a Loan Agreement dated as of September 1, 1999, between the City and the Borrower (the "Loan Agreement"), the City lend the proceeds of the Bond to the Borrower to finance a portion of the cost of acquisition and installation of computer equipment to be installed in the Borrower's facilities located at 3915 Golden Valley Road in the City, and which equipment will be owned and operated by the Borrower (the "Project"). The loan repayments to be made by the Borrower under the Loan Agreement are . fixed so as to produce revenue sufficient to pay the principal of, premium, if any, and interest on the Bond when due. It is further proposed that the City assign its rights to the loan repayments and certain other rights under the Loan Agreement to Norwest Investment Services, Inc. (the "Lender") as security for payment of the Bond under an Assignment of Loan Agreement dated as of September 1, 1999, among the City, the Lender and the Borrower. Payment of the Bond is additionally secured by a Security Agreement dated as of September 1, 1999 (the "Security Agreement"), from the Borrower to the Lender. 3. Forms of the Loan Agreement, the Assignment of Loan Agreement and the Security Agreement have been prepared and submitted to the City for approval and are on file with the Director of Finance: 4. It is hereby found, determined and declared that: (a) as required by the Act and by Section 147(f) of the Internal Revenue Code, the City Council conducted a public hearing on September 7, 1999, on the Project and the issuance of the Bond for the financing thereof, and the Project and the issuance of the Bond for the financing thereof are hereby approved for all purposes under the Act and Section 147(f) of the Internal Revenue Code. (b) it is desirable that the Bond be issued by the City upon the terms set forth in the form of Bond attached as Exhibit A hereto; 0 Resolution 99-74 - Continued September 7, 1999 • (c) the Loan Agreement provides that the Borrower is required to pay loan repayments which are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Bond when due, and all expenses of the operation and maintenance of the Project Equipment, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof; and (d) under the provisions of the Act, and as provided in the Loan Agreement, the Bond is not to be payable from or charged upon any funds other than the revenue 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 any exercise by the City of its taxing powers to pay any principal of the Bond or interest or premium thereon, or to enforce payment thereof against any property of the City except the interests of the City in the Loan Agreement which have been assigned to the Lender under the Assignment of Loan Agreement; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the interests of the City in the Loan Agreement which have been assigned to the Lender under the Assignment of Loan Agreement; the Bond shall recite that the Bond is issued without obligation on the part of the state or its political subdivisions, and that the Bond, including interest thereon, is payable solely from the revenues pledged to the payment thereof; and the Bond shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. • 5. As required by the Act, the Mayor and City Manager are authorized and directed to submit an application to the Minnesota Department of Trade and Economic Development for approval of the Project. Subject to the final approval of Bond Counsel and approval of the Project by the Minnesota Department of Trade and Economic Development pursuant to the Act, the Loan Agreement, the Assignment of Loan Agreement, the Security Agreement and exhibits thereto are approved, substantially in the forms submitted. The Loan Agreement and the Assignment of Loan Agreement are directed to be executed in the name and on behalf of the City by the signatures of the Mayor and City Manager. Any other documents and certificates necessary to the transaction described above shall be executed and delivered by the appropriate City officials. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in the Loan Agreement and Security Agreement. 6. The City shall proceed forthwith to issue the Bond, substantially in the form and upon the terms set forth in Exhibit A hereto. The offer of the Lender to purchase the Bond at a price of par, bearing interest at the rate described in Exhibit A is hereby accepted. The Mayor and City Manager are authorized and directed to prepare and execute the Bond and to deliver the Bond to the Lender. 0 Resolution 99-74 - Continued September 7, 1999 • 7. The Mayor, the City Manager and other officers of the City are authorized and directed to prepare and furnish to the Lender and to Bond Counsel certified copies of all proceedings and records of the City relating to the Bond, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Bond as such facts appear 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. 8. The approval hereby given to the various documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the officials authorized herein to execute said documents, which approval shall be conclusively evidenced by the execution thereof. • • • 0 Resolution 99-74 - Continued EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF GOLDEN VALLEY Industrial Development Revenue Bond (Courage Center Project) Series 1999 No. R-1 September 7, 1999 $2,000,000 The City of Golden Valley, a statutory city and political subdivision of the State of Minnesota (the "City"), for value received, hereby promises to pay to Norwest Investment Services, Inc., or its registered assigns (the "Lender;" the Lender and any subsequent owner of this Bond being also hereinafter referred to as the "Holder"), by such means and manner as the Holder may designate in writing, solely from the source and in the manner hereinafter provided, the unpaid principal balance of the principal sum of Two Million Dollars on September _, 2004, subject to optional prepayment and to prepayment in installments as set forth herein. This Bond shall bear interest on the unpaid principal amount theretofore advanced by the Lender at the rate of 5.518% per annum. Payment of the principal of and interest on this Bond shall be made in coin or currency of the United States of America which at the time of payment is legal tender for payment of public and private debts, in monthly installments. Commencing March , 2000, and on each March and September thereafter until this Bond is fully paid, the sum of $231,584.65 shall be paid, to be applied first to accrued but unpaid interest on the unpaid principal amount of this Bond, and second to the unpaid principal of this Bond. On September , 2004, all accrued and unpaid interest and the unpaid principal balance of this Bond shall be paid. In the event interest on this Bond shall become subject to federal income taxation pursuant to a Determination of Taxability (as defined in the Loan Agreement, dated as of September 1, 1999 (the "Loan Agreement"), between Courage Center (the "Borrower") and the City), the interest rate on this Bond shall be increased to that rate of interest per annum which is equal to 2.00 percent per annum greater than the prime rate, as publicly announced by Norwest Bank Minnesota, National Association from time to time, which rate shall change as and when the prime rate shall change (the "Taxable Rate"), retroactively effective from and after the Date of Taxability (as defined in the Loan Agreement). Resolution 99-74 - Continued September 7, 1999 If a semiannual installment is not paid when due, a late charge equal to $ shall be payable to cover the expenses in handling delinquent payments. Late charges shall not be payable on installments which would have fallen due after acceleration upon default, unless the Holder later waives such acceleration and accepts payment of all principal then due with accrued interest at the Default Rate. Late charges shall be added to and become a part of the next succeeding semiannual payment. This Bond is subject to prepayment or mandatory redemption as follows: (a) In whole or in part, on any date upon 30 days' notice to the City and the Holder, from insurance proceeds in accordance with Article V of the Loan Agreement or from the proceeds of a condemnation award in accordance with Article VI of the Loan Agreement. (b) In whole, at the option of the Holder, following a Determination of Taxability, on any date upon 30 days' notice to the City and the Borrower. (c) In whole, at the option of the Holder, following a "Default" under the Loan Agreement, the Security Agreement or any other Collateral Loan Document (all as defined in the Loan Agreement), or a default on this Bond. To effect any such prepayment, the City shall pay or cause to be paid to the Holder an amount equal to the then applicable "After Payment Termination Value" as set forth in Exhibit A hereto and accrued and unpaid interest on this Bond to the date of such prepayment. Any partial prepayments shall be applied in inverse order of maturity. This Bond is a duly authorized obligation of the City designated as "Industrial Development Revenue Bond (Courage Center Project), Series 1999 (herein called the "Bond"), issued under a resolution of the City Council adopted on September 7, 1999 (the "Resolution"). This Bond is issued by the City in the aggregate principal sum of $2,000,000 for the purpose of making the Loan of the proceeds thereof to the Borrower under the provisions of the Loan Agreement. Under the provisions of the Loan Agreement, the Borrower has agreed to use the proceeds of the loan to pay a portion of the costs of acquisition and installation of computer equipment in the Borrower's facilities located at 3915 Golden Valley Road in the City (the "Project"). Under the Loan Agreement, the Borrower has agreed to repay the Loan, together with interest thereon, in installments scheduled to be sufficient to pay the principal of and interest on this Bond when due. As security for the obligations of the Borrower under the Loan Agreement, the Borrower has agreed to convey a first lien on the Project Equipment to be evidenced by the Security Agreement (as defined in the Loan Agreement). The City has also assigned and pledged to the Lender the City's interest in the Loan Agreement. The City makes no representations as to the sufficiency of the amounts, if any, that may be realized from the Security Agreement in order to pay the principal of or the interest on this Bond in the case of a default by the Borrower under the Loan Agreement. Reference is hereby made to the Loan Agreement for a description of the agreements and covenants of the Borrower contained therein. Resolution 99-74 - Continued September 7, 1999 This Bond is issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Sections 469.152 to 469.165, as amended, and pursuant to the Resolution. This Bond is not a general obligation of the City, and the taxing power or general assets or revenues of the City are not pledged to the payment of this Bond or the interest thereon. This Bond is a special limited obligation of the City. Principal of and interest on this Bond is payable solely out of the revenues derived from the Loan Agreement and enforcement of the Security Agreement. The State of Minnesota, the County of Hennepin and the City shall not in any event be liable for the payment of the principal of or interest on this Bond or for the performance of any pledge, mortgage, obligation or agreement of any kind whatsoever that may be undertaken by the City. Neither this Bond nor any of the agreements or obligations of the City shall be construed to constitute an indebtedness of the State of Minnesota, the County of Hennepin or the City within the meaning of any constitutional or statutory provisions whatsoever, nor constitute or give rise to a pecuniary liability or be a charge against the general credit or taxing powers of the State, the County or the City. This Bond shall be registered and shall be transferable upon the books of the City at the office of the Lender by the Holder hereof in person or by the Holder's attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the Lender, duly executed by the Holder or the Holder's duly authorized attorney. Upon such transfer the Lender 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 bond or bonds in an aggregate principal amount equal to the unpaid principal balance of this Bond, 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 Bond is last registered upon the books of the City with such registration also noted on the Bond, 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 Bond to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. Time is of the essence under this Bond. If a "Default" occurs under the Loan Agreement, the Security Agreement or any other Collateral Loan Document (all as defined in the Loan Agreement), or if any other event occurs which entitles the Holder to accelerate payment under the Loan Agreement, the Security Agreement, or any other Collateral Loan Document, then the Holder may at its right and option (subject, however, to such notice as may be required under the Loan Agreement, the Security Agreement or any other Collateral Loan Document) declare immediately due and payable the principal balance of this Bond, the premium, if any, due hereon, 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 0 event this Bond shall be prepaid in accordance with the provisions hereof. Resolution 99-74 - Continued September 7, 1999 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 subsequent event. It is intended that this Bond 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 things required to exist, happen, and be performed precedent to or in the issuance of this Bond do exist, have happened and have been performed in regular and due form as required by law. PROVISIONS AS TO REGISTRATION The ownership of the unpaid principal balance of this Bond and the interest accruing thereon is registered on the books of the City of Golden Valley, in the name of the registered holder last noted below. Date of • Registration Name and Address of Signature of Lender, Registered Holder as Bond Registrar September , 1999 Norwest Investment Services, Inc. 608 Second Avenue South, 9th Floor Minneapolis MN 55479-0146 Attention: — Anz z 9 Mary E. A derson, Mayor ATTEST: Shirley J. Is , 6ity 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, LeSuer, and Micks; 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.