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HomeMy WebLinkAbout6403 - ADMIN Resolution - City Council - 1979/10/15OCTOBER 15, 1979 8e 2.01 RESOLUTION NO. 6403 RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $1,500,000 INDUSTRIAL DEVELOPMENT REVENUE BONDS (CKR DEVELOPMENT COMPANY PROJECT - MINNESOTA RUBBER COMPANY, LESSEE) PURSUANT TO MINNESOTA STATUTES, CHAPTER 474 WHEREAS, the City of St. Louis Park (the "City") is authorized by the Minnesota Municpial Industrial Development Act, as amended, (the "Act") to issue its revenue bonds and to make secured or unsecured loans to finance the acquisition of real property and the acquisition or construction of buildings and improvements on such real property and the installation of machinery and equipment of any and all kinds and any other personal properties deemed necessary in connection, -with a project, as defined in the Act; and WHEREAS, the City has made the necessary arrangements with CKR Development Company (together with its successors and assigns, the "Company"), a Minnesota general partnership, for the construction of a project consisting of the improvement of land and construction thereon of an office building of approximately 25,000 square feet on land leased by the Company from Minnesota Rubber Company, a Minnesota corporation ("MRC"), which project will then be leased by the Company to MRC for use by MRC as a corporate headquarters in its business as a job supplier of precise molded parts (as more fully defined in the Agreement hereinafter referred to, the "Project"), which will be of the character contemplated by and will accomplish the purposes provided by the Act; and WHEREAS, it has been determined that bonds in the principal amount of $1,500,000 should -be issued, sold and delivered to provide proceeds for a loan to be made to the Company to pay a part or all of the cost of the Project; and NOW, THEREFORE, BE IT RESOLVED By the City Council of the City of St. Louis Park, Minnesota, as follows: • 1 ARTICLE ONE DEFINITION, EXHIBITS AND GENERAL PROVISIONS Section 1-1. Definitions. In this Resolution the following terms have the following respective meanings unless the context hereof clearly requires otherwise: Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Agreement: the Loan and Bond Purchase Agreement among the City, the Company and the Purchasers, dated as of October 1, 1979, including any li amendment thereof or supplement thereto entered into in accordance with the provisions thereof and hereof; Assignment: the Assignment of Rents and Leases to be entered into between Company and Purchasers assigning the Lease and the rents, issues and profits therefrom and from the Project to the Purchasers and attached to the Agreement as Exhibit Q; Bondholder: the Holder of any Outstanding Bond; Bonds: the Industrial Development Revenue Bonds (CKR Development Company Project - Minnesota Rubber Company, Lessee) Series 1979A and Series 1979B, in the aggregate principal amount of $1,500,000, to be issued by the City pursuant to this Resolution, sometimes referred to herein as "the Series 1979 Bonds" all of which Bonds shall be Fully Registered Bonds; Bond Register: the register maintained by the City pursuant to Section 2-14 hereof; City: the City of St. Louis Park, Minnesota, its successors and assigns; Code: the Internal Revenue Code of 1954, as amended; Company: CKR Development Company, a Minnesota general partnership and its successors and assigns, and any surviving, resulting or transferee entity which may assume its obligations in accordance with the provisions of the Agreement; Cost: the sum of the Project cost items enumerated in Section 4.04 of the Agreement; Fully Registered Bond: any Bond registered as to payment of both principal and interest; Guaranty: the Guaranty executed and delivered by MRC to the Purchasers, as from time to time amended or supplemented, by which MRC unconditionally guarantees payment of the principal of, premium (if any) and interest on the Bonds and the performance of Company's obligation under the Agreement; Holder: the Registered Holder of a Bond; Mortgage: that certain Combination Mortgage, Security Agreement and Fixture Financing Statement among the Company and MRC, as Mortgagers, and the Purchasers, as Mortgagees, and any amendents or supplements thereto. Payment Date: a date on which an installment of interest or of principal and interest is due on the Bonds; Pledge Agreement: the Pledge Agreement by which the City assigns to Purchasers its rights under the Agreement as security for the Bonds; Purchasers: Northwestern National Bank of Minneapolis, Minneapolis, Minnesota, (sometimes referred to as "the Bank") as purchaser of the Series 1979A Bond; and NWNL Property and Casualty Insurance Company, (sometimes referred to as "NWNLPC") as purchaser of the Series 1979B Bond; Registered Bond: any Fully Registered Bond; Resolution: this Resolution, including any amendment thereto; Registered Holder: the person in whose name a Registered Bond is registered in the Bond ,Register; Series 1979A Bond: the City of St. Louis Park Industrial Development Revenue Bond (CKR Development Company Project - Minnesota Rubber Company, Lessee) Series 1979A authorized by this Resolution. Series 1979B Bond: the City of St. Louis Park Industrial Development Revenue Bond (CKR Development Company Project - Minnesota Rubber Company, Lessee) Series 1979B authorized by this Resolution. Section 1-2. Rules of Interpretation. (1) This Resolution shall be interpreted in accordance with and governed by the laws of the State of Minnesota. (2) The words "herein" and "hereof" and "hereunder" and words of similar import, without reference to any particular section or subdivision, refer i to this Resolution as a whole rather than to any particular section or subdivision hereof. (3) References in this Resolution to any particular article, section or subdivision hereof are to the designated article, section or subdivision of this Resolution as originally adopted. (4) Any terms not defined herein but defined in the Agreement or the Mortgage shall have the same meaning herein unless the context hereof requires otherwise. (5) The headings of articles and sections hereof are for convenience only and are not a part of this Resolution. (6) Unless the context hereof clearly require otherwise, the singular shall include the plural and vice versa and the masculine shall include the feminine and vice versa. 2 ARTICLE TWO APPROVAL OF DOCUMENTS: GENERAL PROVISIONS RELATING TO THE BONDS Section 2-1. 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. Section 2-2. Preliminary City Approval: Approval by Commissioner of Securities. By preliminary resolution duly adopted by this Council on July 16, 1979, the Council gave preliminary approval to the sale of revenue bonds and the loan of proceeds to the Company for the construction of the Project, and authorized the preparation of such documents as may be appropriate to the Project and the issuance and sale of the Bonds. The Commissioner of Securities of the State of Minnesota approved the Project on August 6, 1979. Section 2-3. 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 City Clerk, and which are approved substantially in the form presented, subject to such modifications as are acceptable to the parties and the City Attorney: (a) the Agreement; (b) the Pledge Agreement; (c) the Mortgage; (d) the Assignment; and (e) the Guaranty. Section 2-4. Form and Authorized Amount. The Bonds shall be issued substantially in the form set forth in Article Three hereof with such appropriate 'variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions of this Article and Article Three. The total principal amount of the Bonds that may be delivered ,hereunder is expressly limited to $1,500,000. Section 2-5. Execution. The Bonds may be in typewritten form and shall be executed on behalf of the City by the manual signatures of the Mayor and City Manager and shall have the official seal of the City affixed or imprinted thereon. In case any officer whose signature appears on the Bonds shall cease to be such officer before the delivery of the Bonds, such signature shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until delivery. Section 2-6. Mutilated, Lost and Destroyed Bond. In case the Bonds shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Bond of like 3 amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of such mutilated Bond or in lieu of and in substitution for such Bond destroyed or lost, upon the Holder's paying the reasonable expenses and charges of the City in connection therewith, and, in case of a Bond destroyed or lost, his filing with the City evidence of such Toss or destruction satisfactory to it together with the indemnity required by Section 475.70 of the Act. If the mutilated, destroyed or lost Bond has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Bond prior to payment. Section 2-7. Redemption. (a) The Bonds shall be subject to redemption at the option of the Company in whole or in part, but if in part, only in multiples of $10,000 on any Payment Date subsequent to the fifth anniversary date of the initial issuance of the Bonds to the Purchasers at a price of the principal amount to be redeemed plus accrued interest to date of redemption, plus a premium, expressed as a percentage of the principal amount to be redeemed. Such premium shall be 8-1/4% reduced by .55% for each full year that has elapsed since the fifth anniversary date of the initial issuance of the Bonds to the Purchasers. Prior to the tenth anniversary date of the initial issuance of the Bonds to the Purchasers, (1) no such redemption may be effected with moneys received by the Company as a part of or in anticipation of any refunding operation that involves the incurring of indebtedness for borrowed money if such indebtedness has an interest cost to the Company equal to or Tess than the interest rate then in effect on the Bonds, and (ii) no such 1 partial redemption may be effected unless at the time thereof the Company shall on a consolidated basis (A) have on hand to fund such partial redemption excess or surplus funds not required in the conduct of its business in an amount at least equal to the amount of the partial redemption, (B) giving effect to such partial redemption, have outstanding no indebtedness other than indebtedness permitted by the Mortgage, and (C) have delivered to the Holders a certificate signed by a responsible officer of the Company to both such effects and to the effect that the partial redemption will not reduce the consolidated working capital of the Company below an amount which is considered adequate by the officers of the Company for the safe conduct of the business of the Company and its subsidiaries. (b) The Bonds shall also be subject to redemption at the option of the Company in whole but not in part in certain events upon damage to or destruction or condemnation of the Project, as contemplated by Sections 10 and 13 of the Mortgage. In addition, the Bonds are subject to redemption (i) upon a Determination of Taxability, as defined in the Agreement, as provided in Section 5.05(i) of the Agreement, and (ii) in certain events upon condemnation of the Project, as contemplated by Section 13 of the Mortgage. Section 2-8. Notice: Redemption. Notice of redemption shall be given by first class mail, postage prepaid, mailed by the Company not Tess than 30 days prior to the redemption date, to each Registered Holder of the Bonds at the last address appearing on the Bond Register. All notices of redemption shall state the redemption date, the principal date, the principal amount to be redeemed, the redemption price, the place at which the payment is to be made, and that on the redemption date the redemption price will become due and payable and interest on the principal amount to be redeemed shall cease to accrue on and after such time. The notice shall state the series designation, date of issue, Payment Dates and principal amount to be redeemed. 4 Section 2-9. Partial Redemptions. Except in the case of a redemption of Series 1979B Bonds under circumstances where Series 1979A Bonds will remain outstanding, as contemplated by Section 5.05(c) of the Agreement, in the event any redemption shall be of less than the entire principal amount of all Bonds then outstanding, such redemption shall be a pro rata redemption of Series 1979A Bonds and Series 1979B Bonds, the amount applied to the redemption of each such Series to be applied to payment of the last maturing installments of each such Series in inverse order of the due dates of such installments. Upon a partial redemption of the Bonds, the amount of all other remaining installments of principal and interest shall not be changed, but the Portions of each such installment allocable to principal and to interest shall be recalculated based upon the remaining unpaid principal amount of each Bond. Upon such redemption, a Bond may, upon the written request of the Holder accompanied by a certificate of the Company Representative that such redemption and prepayment has been made, be surrendered to the City which shall forthwith execute and deliver to the Holder thereof, without charge, a new Bond in the aggregate principal amount equal to the unredeemed portion of the Bond so surrendered. In case the entire principal amount of the Bond is redeemed and prepaid, the Bond shall be surrendered to the City for cancellation and shall not be reissued, and no new Bond shall be issued in lieu of the prepaid principal amount of the:Bond. Section 2-10. Exchange of Bonds. Subject to the provisions of Section 2-12, a Registered Holder may request the City to issue new bonds in multiples of $1,000 in exchange for the outstanding principal amount of the Bonds of such Holder. Such request shall be made in writing to the City at least thirty days in advance of the date of exchange, which date shall be a Payment Date, and upon surrender of the Bond to be exchanged at the office of the City Clerk in St Louis Park, Minnesota. The Registered Holder requesting such exchange shall bear all expenses in connection with such exchange. The new bonds shall bear interest at the same rate as the Bond to be exchanged and shall be in an aggregate principal amount equal to the then unpaid principal amount of such Bond, maturing serially and annually in the same amount, and on the same dates as the unpaid installments of principal of the Bond and shall be in such form, with necessary modifications thereto as shall be approved by the City Attorney and bond counsel to the City. Section 2-11. Cancellation. When a Bond has been redeemed and paid in full, it shall be cancelled by the City and shall not be reissued. The Holder shall deliver to the City either the cancelled Bond or a certificate of a responsible officer of the Holder certifying as to the destruction thereof. Section 2-12. Restriction on Transferability. The Bonds have not been registered under the Securities Act of 1933, as amended (the "Securities Act") or any state securities laws for initial distribution, and the Bonds have been sold initially only to the Purchasers pursuant to the investment representation made to the City by Purchasers. A Bond shall be transferable only in the event the City, the Company and the respective Holder shall have received an opinion from counsel employed by, or special counsel designated by, the Holder of the Bond stating that the proposed transfer may be made without registration under the Securities Act and any applicable state securities laws. Section 2-13. Registration of Transfer. The City will cause to be kept at the office of the City Clerk a Bond Register in which, subject to such 5 reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Bonds. The Bonds shall be transferable only upon the Bond Register by the the Registered Holder thereof in person or by its attorney duly authorized in writing, upon surrender of the Bonds together with a written instrument of transfer satisfactory to the Clerk and the City Attorney, duly executed by the Registered Holder or its duly authorized attorney. Upon such transfer the City shall note the date of registration and the name and address of the new registered owner in the Bond Register and in the registration blank appearing on the Bond. Alternatively, the city shall, at the request and expense of the registered Holder issue a new Bond, in aggregate outstanding principal amount equal to that of the bond sur4rendered, and of like tenor except as to principal amount, and registered in the name of the registered Holder or such transferee as may be designated by • the registered Holder. The City may deem and treat the person in whose name the Bond is last registered in the Bond Register and by notation on the Bond as the absolute owner thereof, whether or not the principal balance or any part thereof is overdue, for the purpose of receiving payment of or on account of the principal balance, redemption price or interest and for all other purposes. The Series 1979A and Series 1979B Bonds shall be initially registered in the name of their respective Purchaser. Section 2-14. Cessation and Continuation of Interest. Interest on the Bonds shall cease on their maturity dates, or on any prior date on which they shall have been duly called for redemption as herein provided; provided that funds sufficient for the payment thereof with accrued interest and any redemption premium have been deposited with the Holder on or before the maturity date or redemption date, as the case may be, and all other requirements applicable to such redemption have been complied with, or shall cease on any date after maturity on which such deposit has been made, including accrued interest to the date of deposit and interest, (to the extent permitted by law), on overdue installments of interest at the rate borne by the respective Bond, and the Holder shall have no further rights with respect to a Bond except to receive the payment so deposited. If a Bond is not presented for payment when due and funds sufficient to pay the Bond shall have been paid to the Holder, (i) all liability of the City for payment of such Bond shall cease; and (ii) the Holder of such Bond shall thereafter have no rights with respect thereof except to receive payment thereof. Section 2-15. Exercises of Option: Notice. The City hereby appoints the Company as its attorney-in-fact with full power and authority to give all notices required to be given under the Agreement and this Resolution in connection with the redemption of the Bonds. 6 ARTICLE THREE AUTHORIZATION AND SALE: TERMS AND CONDITIONS OF THE BONDS Section 3-1. Approval of Terms. The City shall forthwith issue and sell the Bonds in the principal amount of $1,500,000. The issue shall consist initially of two bonds, namely the Series 1979A Bond in the principal amount of $1,000,000 and the Series 1979B Bond in the principal amount of $500,000. The Bonds shall be in substantially the form set forth hereto in Exhibit A which terms and provisions are hereby approved and incorporated herein. Principal, premium, if any, and interest shall be payable by the Company for the account of the City by first class mail addressed to each Registered Holder at the address of such Holder appearing in the Bond Register, or, if so requested by a Holder, by Federal or other immediately available funds. Section 3-2. Sate of Series 1979A Bond. The offer of the Bank to purchase the Series 1979A Bond at a price of $1,000,000 is hereby found to be reasonable and is accepted. Pursuant to the Agreement, the Bank has agreed to pay the purchase price of the Series 1979A Bond in installments in the form of Advances to the City up to the authorized principal amount of the Series 1979A Bond to be loaned to the Company to pay Project Costs all as provided in Article 111 of the Agreement and in this Resolution. Section 3-3. Sale of Series 1979B Bond. The offer of NWNLPC to purchase the Series 1979B at a price of $500,000 is hereby found to be reasonable and is accepted. Pursuant to the Agreement NWNLPC has agreed to pay the purchase price of the Series 1979B Bond in installments in the form of Advances to the City up to the authorized principal amount of the Series 1979B Bond to be loaned to the Company to pay Project Costs, all as provided in Article 111 of the Agreement and in the Resolution. Section 3-4. Delivery and Endorsement of the Bonds. The Bonds shall be delivered to the Purchasers upon payment of all or part of the purchase price on the Closing Date as defined in the Agreement, and upon compliance with all conditions of Section 3.07 of the Agreement relating to closing and delivery. At the time of any Advance towards the price of the Bonds the Authorized Company Representative shall endorse and acknowledge the receipt thereof on Annex A to each Bond, and the City Representative shall then endorse and acknowledge such receipt on Annex A. The Bonds shall bear interest only on the amount so disbursed or advanced and endorsed on Annex A from time to time remaining unpaid. 7 ARTICLE FOUR APPROVALS AND AUTHORIZATION: LIMITATIONS OF CITY OBLIGATION Section 4-1. Authorization: Authentication of Transcript. Upon the execution of the documents approved in Article Two hereof, the Mayor, City Manager and City Clerk are authorized and directed to execute the Bonds on behalf of the City and to deliver them to the Purchasers, and to execute such other certifications, documents or instructions as may be required by the Ag►c'eement, or as bond counsel or counsel for the Purchaser shall require, subject to the approval of the City Attorney, and all certifications, recitals and representations of the City. Upon delivery of the Bonds, the proceeds thereof shall be disbursed to the Company pursuant to the Agreement. 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. In the event of the absence or disability of the Mayor, City Manager, or City Clerk, such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officials. Section 4-2. Election under Internal Revenue Code. The City hereby elects that the provisions of Section 103(b) (6) (D) of the Code and Reg. §1.103-10(b) (2) (vi) thereunder, permitting the issuance of tax exempt industrial development bonds in amounts up to $10,000,000 under certain conditions, shall apply to the Bonds, and the Mayor and City Manager or either of them are authorized to execute and file the appropriate form of election under the Code and Regulations with the Internal Revenue Service. Section 4-3. Registration Records. The City Clerk, as bond registrar, shall keep a bond register in which the City shall provide for the registration of the Bonds and for transfers of the Bonds. The City Clerk is authorized and directed to deliver a certified copy of this Bond Resolution to the County Auditor of Hennepin County, together with such other information as the County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Bonds on his bond register as required by the Act and Section 475.63, Minnesota Statutes. Section 4-4. Limitation of the City's Obligations. Notwithstanding anything contained in the Bonds or the Agreement or any other documents relating thereto, the Bonds shall not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation, and shall not be payable from or a charge 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 Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay the Bonds or the interest thereon, or to enforce payment thereof against any property of the City, and the Bonds 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 the Bonds and the Agreement shall be subject at all times to the availability of revenues furnished by the Company sufficient to 8 1 pay all costs of such performance or the enforcement thereof, and neither the City nor any of its officials, officers, agents or employees shall Ib'e subject to any personal liability thereon. I. Section 4-5. Execution and Delivery. The Mayor, the City''Manager, the City Clerk and the City Attorney are authorized and directed to take all actions necessary to carry out the provisions of this Resolution relating to the execution and delivery of the documents described herein. Adopted by the City Council Octo., 15 19 9 / d hjf Attest: 9 Approved as to form and legality: City ttorney