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HomeMy WebLinkAbout84-137 CERTIFICATION OF MINUTES RELATING TO $1,500,000 INDUSTRIAL DEVELOPMENT REVENUE NOTE (RJTP Company Project) Issuer: City of Lakeville, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A ~~~c~~~ meeting, held on October 9 1.984, at '7:00 o'clock P.M., at the. City Hall. Members present : Nelson, Zaun, Sindt, Enright, Harvey Members absent : None Documents Attached: Minutes of said meeting (pages): RESOLUTION N0. ~4-137 RESOLUTION RELATING TO $1,500,000. INDUSTRIAL DEVELOPMENT REVENUE NOTE; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA .STATUTES, CHAPTER 474. I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the obligations referred to in the title of this certificate, certify that the documents attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct .and complete copies of~all resolutions and other actions taken and of all docum nts approved by the governing body at said meeting, so far as they relate to said ogligations; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such cor ng ficer this 9th day of October, 1984. T Patrick McGar ey, City Clerk-Administrator Name and Title (SEAL) . Member xarvey introduced the following resolution and moved its adoption: fESOLUTION NO. 84-137 RESOLUTION RELATING TO $1,500,000 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 Lakeville, 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: RJTP Company, a Minnesota general partnership, its successors or .permitted assigns; City: the City of Lakeville, Minnesota, its successors and assigns; Disbursing Agreement: the Escrow and Disbursing .Agreement to be entered into among the City, the Borrower, the Lender and Title Services, Inc., as agent for Commonwealth Land Title Insurance Company. o ~ Guarantors: Star-Tex Corporation, a Minnesota corporation, Russell Laitala, Jerome Laitala, Thomas Laitala and Paul Laitala, 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; Le-~c~er: First National Bank of Minneapolis, in Minneapolis, Minnesota, its successors and .assigns; Loan Agreement: the Loan Agreement to be executed by and .between the City and the Borrower; -2- Mortgage: the Combination Mortgage, .Security Agreement and Fixture Financing Statement, from the Borrower, as mortgagor, to the Lender, as mortgagee; Note: the City of Lakeville, Minnesota, Industrial Development Revenue Note (RJTP Company Project), in the original aggregate principal amount of $1,500,000, 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 manufacturing facility to be constructed and equipped thereon pursuant to the Loan Agreement and the Disbursing Agreement; Project Costs: those items of Project Costs defined in Section 1.01 of the Loan Agreement; and Resolution: this. resolution of the City, adopted October 9, 1984 authorizing the issuance of the Note. 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 1 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 acccr~iingly 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; -3- (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 Zoan 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 (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 -4- 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 Approval. By preliminary resolution duly adopted by the Council June 18, 1984 (the Preliminary Resolution), after a public hearing duly called, noticed and held, this Council approved the sale. of the Note in the approximate amount of $2,000,000 pursuant to the Act and the loan of the proceeds to the Borrower for the acquisition, construction and equipping of a manufacturing facility on the .Land and authorized the preparation of documents appropriate to the financing of the Project. 3.03. Approval of Documents. Pursuant to the above, there have been prepared and 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-Administrator: (a) Loan Agreement; (b) Mortgage; (c) Disbursing Agreement; (d) Pledge Agreement; (e) Guaranty Agreement; and (f ) form of Note. The. forms of the documents listed in (a) through (f) above .are approved, with such variations, insertions and additions as are deemed appropriate by the parties and approved by legal counsel to the City. -5- 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 Clerk-Administrator 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 $1,500,000. The terms of the Note are set forth therein and in the Indenture, 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 d behalf of the City by the signatures of the Mayor and the City Clerk-Administrator, 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 $1,500,000, together with a copy, duly certified by the Ci~y Clerk-Administrator, of this Resolution and such closing certificates as are required by bond counsel. - . -6- 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 Agreement 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 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 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. . 7. Election. The City hereby elects that the provisions of Section 103(b)(6)(D) of the Internal Revenue Code . of 1954, as amended, apply to the Note, and the Mayor and the City Clerk-Administrator are hereby authorized and directed to execute and file with the Internal Revenue Service a statement of such election. _ Adopted: October 9, 1984. y/7 Mayo r _ Attest: - City Clerk- dmi istrator (SEAL) -7- The motion for the adoption of the foregoing resolution was duly seconded by Member Enright and upon vote being taken thereon, the following voted in favor thereof: Harvey, Nelson, Zaun, Sindt, Enright and the following voted against the same: None whereupon the resolution was declared duly passed and adopted. .g_ EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF LAKEVILLE Industrial Development Revenue Note (RJTP Company Project) No, R-1 $1,500,000 The City of Lakeville, 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 ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000}, 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 and including the Final Maturity Date (as hereinafter defined) at a Tax-Exempt Rate which shall at all times be equal to . eighty percent (80%) of the Reference Rate (as hereinafter defined), which Tax-Exempt Rate shall change effective as of .each change in the Reference Rate. (ii) Interest only at the Tax-Exempt Rate specified in paragraph 1(a)(i) hereof shall be payable on November 1, 1984 and on the first day of each month thereafter to and including January 1, 1985. (iii) Commencing on February 1, 1985, and continuing on the first day of each month thereafter to and including the Final Maturity Date, the principal of this Note shall be payable in the amount of $15,000, together with . interest on the unpaid principal balance at the Tax-Exempt Rate specified in paragraph 1(a)(i) hereof. (iv) 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.. (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 rate specified in paragraph 1(a}(i) hereof shall be increased, retroactively effective from and after the Date of Taxability (as hereinafter defined) to a Taxable Rate equal to the Reference Rate plus two percent (2%) per annum; which Taxable Rate shall change effective as of each change in the Reference Rate. 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 undertaken and carried forward in .good faith, diligently and with reasonable dispatch. In the event any such contest or appeal is undertaken, the increased interest provided in paragraph 1(b)(i) hereof 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 -2- 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) In addition to the interest for which provision is otherwise made in paragraphs 1(a) an 1(b) hereof, this Note shall bear interest, for the period that begins on the date of closing-and ends on the first anniversary thereof,. in an amount equal to one and one-half percent {1 1/2%) of the original principal amount of this Note, payable in full on the date hereof. (d) As used herein, the following terms have the following meanings: (i) "Reference-Rate" means, the rate per annum publicly announced .from time to time by the Lender as its .reference rate . (ii) "Final Maturity Date" means January 1,.1995. (iii) "Put Date" means January 1, 1990. (iv) .The terms "Determination of Taxability" and "Date of Taxability" as used herein shall have the meanings ascribed to such terms. in the Loan Agreement, dated the date hereof (the "Loan Agreement"), between the City and RJTP Company, a Minnesota general partnership (the "Borrower"). 2. All interest hereon shall be comguted on the basis of the actual number of days elapsed and a year of three hundred sixty (360) days. 3. This Note is subject to prepayment as follows: (a) Prepayment in whole or in part in increments of $100,000 at the option of the Borrower, on the first day of any month upon at least thirty (30) days' written notice to the Holder (or such shorter. period of notice as may be acceptable to the Holder). (b) Prepayment in whole, at .the option of the Holder, on any date following a Determination of Taxability (subject to paragraph 1(b){ii) hereof) upon at least thirty (30) days' written notice to the Borrower (or such shorter period of notice as may be acceptable to the Borrower). - (c) Prepayment in whole, at the option of the Holder, on any date upon the occurrence of certain "Events of Default" under the Loan Agreement or any Collateral Document, as defined in the Loan Agreement, including the Disbursing Agreement, as hereinafter defined, and the Mortgage, as hereinafter defined. -3- (d) Mandatory prepayment pursuant to the Disbursing Agreement in the event that there shall be any amount in the Escrow Fund under the Disbursing Agreement on the Completion Date (as defined therein) after payment of all Project Costs (as defined therein). (e) Prepayment in whole or in part, at the option of the Holder, upon the occurrence of certain events of damage,. _ destruction or condemnation as provided in the Mortgage. To effect any such prepayment, the City shall pay or cause. to be paid to the Holder an amount equal to the principal amount being so prepaid (applying first to such prepayment any amount then held in the Escrow Fund under the Disbursing. Agreement), plus accrued interest on this Note to the date of such prepayment. .Any partial prepayments shall be applied in inverse order of principal installments payable under paragraph 1(a) hereof. 4. The Holder shall have the option to require the City to purchase this Note or cause this Note to be purchased on the Put Date or on any date within six months thereafter at a price equal to the unpaid principal balance thereof plus accrued interest thereon to such date. The Holder shall give the Borrower at least ninety (90) days' written notice of its intention to exercise such option. 5. This Note constitutes an issue in the maximum. authorized face amount of $1,500,000. 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 1, consisting of the acquisition, construction, and equipping of an addition to an existing manufacturing facility to be owned by the Borrower (the "Project") and leased to Star-Tex Corporation, 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 October 9, 1984, the LoanyAgreement and an Escrow and Disbursing Agreement, dated the date hereof (the "Disbursing Agreement"), among the City, the Borrower, the Lender and Title Services, Inc., as agent. for Commonwealth Land 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 with respect to the Project (the "Mortgage"), from the Borrower to the Lender, a Pledge Agreement between the City and the Lender, and a Guaranty Agreement (the ".Guaranty") from the Lessee and the partners of the Borrower, to the Lender, all of even date herewith. _4_ . 6. This Note shall be registered and shall be transferable upon the books of the City at the office of the City Clerk-Administrator 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-Administrator, duly executed by the Holder or ' its duly authorized attorney. Upon such transfer the City Clerk-Administrator 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 last 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 Guaranty 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 Guaranty or any Collateral Document, then the Holder may at its-right and option (subject, however,. to such notice as may be required under the Loan Agreement, the Mortgage, the Disbursing Agreement, the Guaranty 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 Gity be subject to any liability thereon. No Holder or Holders -5- 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 solely 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 commiss-ion, 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. 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 things 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 9th day of October, 1984. CITY O LAKEVILLE, MINNESOTA By a r (SEAL) Attest 'ty Clerk-Admi istrator -6-