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HomeMy WebLinkAbout6951 - ADMIN Resolution - City Council - 1981/09/08[Resolution No. 6951 1 A resolution providing for the issuance and sale of revenue bond pursuant to Chapter 474, Minnesota Statutes, to provide funds to be loaned to K K Corporation for Industrial Development Project. RESOLVED BY THE CITY COUNCIL OF THE CITY OF ST. LOUIS PARK (the "City") as follows: 1. Authority. The City is, by the Constitution and Laws of the State of Minnesota, including Chapter 474, Minnesota Statutes, as amended (the "Act") authorized to issue and sell its revenue bonds for the purpose of undertaking an authorized project, and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act and to pledge revenues of the project and otherwise secure such bonds. 2. Authorization of Bond and Series of Bonds. The City Council hereby determines that it is desirable and expedient to authorize, and the City Council does hereby authorize, the issuance and sale of a revenue bond of the City in the aggregate principal amount of One Million Dollars ($1,000,000) pursuant to the Act to provide money to be loaned to K K Corporation, a Minnesota corporation (the "Company"), to finance costs of acquir- ing, constructing and equipping an office and retail sales facility in the City (the "Project Building") to be owned by the Company and leased to various tenants, together with necessary equipment (the "Project Equipment") to be located permanently in and become a part of the Project Building or the site thereof (the "Project Site"; <Lnd necessary site improvements (collectively the "Project" as more fu,ly defined in the Loan Agreement hereinafter mentioned). The City shall Issue and sell its $1,000,000 City of St. Louis Park Industrial Development Revenue Bond (K K Corporation Project) (the "Bond"). 3. Documents Presented. Forms of the following docu- ments relating to the Bond and the Project have been submitted to and examined by the City Council and are now on file in the office of the City Clerk: (a) Loan and Purchase Agreement (the "Loan Agree- ment"), dated as of September 1, 1981, by and among the City, the Company and the First Edina National Bank (the "Bank") whereby, among other things, the City agrees to sell and the Bank agrees to purchase the Bond, the City agrees to make a loan to the Company of the proceeds of the sale of the Bond and the Company covenants to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of and interest on the Bond; (b) Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage") dated as of September 1, 1981, by and between the Company and the Bank, whereby the Company mortgages the Project Site, the Project Building and the Project Equipment (the "Project Facilities") as security for the Bond (this document not to be executed by the City); and (c) Guaranty Agreement (the "Guaranty Agreement") dated as of September 1, 1981 from Paul Klodt (the "Guarantor") to the Bank whereby the Guarantor guaran- tees the payment of principal of, premium, if any, and interest on the Bond to the extent provided therein. (This document not to be executed by the City); (d) Loan Agreement Assignment (the "Assignment") dated as of September 1, 1981, whereby the City assigns to the Bank all of its interest in the Loan and Purchase Agreement and Loan Repayments of the Company thereunder (except its rights under Sections 5.02, 7.01, 8.04 and 8.05), for the purpose of securing the full and prompt payment of the Bond (the foim of Loan Agreement Assign- ment attached as Exhibit 2 hereto); and (e) Assignment of Rents and Leases (the "Lease Assignment") dated as of September 1, 1981 from the Company to the Bank whereby the Company assigns the rents and leases of the Project to the Bank as security for the Bond (this document not to be executed by the City). 4. Findings. It is hereby found, determined and declared that: (a) The Project, as described in paragraph 2 hereof and in the Loan Agreement, based upon the repre- sentations of the Company, constitutes a revenue produc- ing enterprise and is a project authorized by and described in Section 474.02, Subd. la of the Act. (b) The purpose of the Project is and the effect thereof will be to promote the public welfare by: preventing the emergence of blighted and marginal lands and areas of chronic unemployment; preventing economic deterioration; the development of sound industry and commerce to use the available resources of the community, in order to retain the benefit of the community's existing investment in educational and public service -2- facilities; halting the movement of talented, educated personnel to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; adding to the tax base of the'City and the county and school district in which the Project Facilities will be located. (c) The Project has been approved by preliminary resolution of the Council duly adopted July 6, 1981 after a public hearing thereon, duly called and held and has been approved by the Commissioner of Securities of the State of Minnesota as tending to further the purposes -and policies of the Act. (d) The issuance and sale of the Bond, the execu- tion and delivery of the Loan Agreement and the Assign- ment and the performance of all covenants and agreements of the City contained in the Bond, the Loan Agreement and the Assignment and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Bond, Loan Agreement and the Assignment valid and binding obligations of the City in accordance with their terms, are permitted by the Act. (e) There is no litigation pending or, to the best of its knowledge threatened, against the City relating to the Project or to the Bond or Loan Agree- ment, or questioning the organization of the City or its power or authority to issue the Bond or execute and deliver the Loan Agreement and the Assignment. (f) The execution and delivery of and performance of the City's obligations under the Bond, the Loan Agreement and the Assignment have been fully authorized by all requisite action and do not and will not violate any law, any provision of the City Charter, any order of any court or other agency of government, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) , default under any such indenture, agreement or other instrument. (g) The Loan Agreement provides for payments by the Company to the Holder of the Bond for the account of the City of such amounts as will be sufficient to pay the principal of and interest on the Bond when due. No reserve funds are deemed necessary for this purpose. The Loan Agreement obligates the Company to provide for the operation and maintenance of the Project Facil- ities, including adequate insurance, taxes and special assessments. (h) As required by the provisions of Section 474.10 of the Act, the Bond shall recite that, the Bond is not to be payable from nor charged upon any funds other than amounts payable by the Company pursuant to the Loan Agreement which are pledged to the payment thereof, and, in event of default, moneys derived from foreclosure or other enforcement of the Lease Assignment, the Guaranty Agreement or the Mortgage; the City is not subject to any liability thereon; no Holder of the Bond shall ever have the right to compel the exercise of the taxing power of the City to pay the Bond or the interest thereon, nor to enforce payment thereof against any property of the City; the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and such Bond does not con- stitute an -indebtedness of the City within the meaning of any constitutional, statutory or charter limitation. (i) Nothing has come to the attention of the City Council to indicate that any member of the City Council (i) has a direct or indirect interest in the Project, the Loan Agreement, the Lease Assignment, the Assignment, the Guaranty Agreement or the Bond, (ii) owns any capital stock of or other interest in the Project or the Bank, (iii) will be involved in supervising the completion of the Project on behalf of the Company, or (v) will receive any commission, bonus or other remune- ration for or in respect of the Project, the Loan Agreement or the Bond. 5. Approval and Execution of Documents. The forms of Mortgage, Loan Agreement, the Lease Assignment, the Guaranty Agreement and Assignment referred to in paragraph 3 are approved. The Loan Agreement and Assignment shall be executed in the name and on behalf of the City by the Mayor and the City Manager in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the officers executing the same, which approval shall be conclus- ively evidenced by the execution thereof. The Mortgage, the Guaranty Agreement and the Lease Assignment may contain such revisions a; may be approved by the Bank, the Company and the Guarantor. 6. Approval of Terms and Sale of Bond. The City shall proceed forthwith to issue its City of St. Louis Park Industrial Development Revenue Bond (K K Corporation Project), in the author- ized principal amount of $1,000,000 substantially in the form, maturing, bearing interest, payable in the installments and otherwise containing the provisions set forth in the form of Bond attached hereto as Exhibit 1, which terms and provisions are hereby approved and incorporated in this Bond Resolution and made a part hereof. -4- A single fully registered Bond, substantially in the form of Exhibit 1 to this Bond Resolution, shall be issued and delivered to the Bank in the authorized principal amount of $1,000,000 and as authorized by the Act, principal of and inter- est on the Bond shall be payable at the office of the registered owner thereof as it appears on the registration records maintained by the City Clerk in lawful money of the United States of America. The proposal of the Bank to purchase such Bond at a price of $1,000,000 (100% of par value) is hereby found and determined to be reasonable and is hereby accepted. 7. Execution, Delivery and Endorsement of Bond. The Bond may be in typewritten or printed form and shall be executed by the manual signatures of the Mayor and City Manager and shall be attested by the manual signature of the City Clerk and the official seal of the City shall be affixed thereto. When so prepared and executed, the Bond shall be delivered to the Bank upon payment of the purchase price therefore, and upon receipt of the signed legal opinion of Faegre & Benson, of Minneapolis, Minnesota, bond counsel, pursuant to the Loan Agreement. The Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 8. Registration Records. The City Clerk, as bond registrar, shall keep a bond register in which the City shall provide for the registration of the Bond and for transfers of the Bond. 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 Bond on his bond register as required by the Act and Section 475.63, Minnesota Statutes. 9. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond is mutilated, lost, stolen or destroyed, the City may execute and deliver to the Holder a new Bond of like amount, date, number and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Bond shall first be surrendered to the City, and in the case of a lost, stolen or destroyer' Bond, there shall be first furnished to the City and the Company evidence of such loss, theft or destruction satis- factory to the City and the Company, together with indemnity satisfactory to them. The City and Company may charge the Holder with their reasonable fees and expenses in replacing any muti- lated, lost, stolen or destroyed Bond. 10. Transfer of Bond; Person Treated as Holder. The Bond shall be transferable by the Holder on the bond register of the City, upon presentation of the Bond for notation of such transfer thereon at the office of the City Clerk, as bond regis- trar, accompanied by a written instrument of transfer in form satisfactory to the City Clerk and the City Attorney, duly exe- cuted by the Holder or its attorney duly authorized in writing. -5- The Holder seeking to transfer ownership of the Bond shall also give written notice thereof to the Company. The Bond shall continue to be subject to successive transfers at the option of the Holder of the Bond. No service charge shall be made for any such transfer, but the City Clerk, may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The person in whose name the Bond shall be issued or, if transferred, shall be registered from time to time shall be deemed and regarded as the absolute Holder thereof for all purposes, and payment of or on account of the principal of and interest on the Bond shall be made only to or upon the order of the Holder thereof,, or its attorney duly authorized in writing, and neither the City, the City Clerk, the Company, nor the Bank shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and dis- charge the liability upon the Bond to the extent of the sum or sums so paid. The Bond shall be initially registered in the name of the Bank. 11. Amendments, Changes and Modifications to Loan Agreement, Assignment and Bond Resolution. Except pursuant to Section 9.03 of the Loan Agreement, the City shall not enter into or make any change, modification, alteration or termination of the Loan Agreement, Assignment or this Bond Resolution. . 12. Pledge to Holder. Pursuant to the Assignment, the City shall pledge and assign to the Bank and its successor Holders of the Bond all interest of the City in the revenues of the Project and the Project Facilities, including all Loan Repayments to be made by the Company under the Loan Agreement and moneys derived from enforcement of the Lease Assignment, the Guaranty Agreement and the Mortgage. All collections of moneys by the City in any proceeding for enforcement of the obligations of the Company under the Loan Agreement shall be received, held and applied by the City for the benefit of the Holder of the Bond. 13. Covenants with Holders; Enforceability. All pro- visions of the Bond and of this Bond Resolution and all repre- sentations and undertakings by the City in the Loan Agreement are hereby declared to be covenants between the City and the Bank and its succ'Esor Holders of the Bond and shall be enforceable by the Bank or any Iolder in a proceeding brought for that purpose, provided that no.such covenant, representation or undertaking shall ever give rise to any pecuniary liability of the City, its employees, officers or agents or constitute a charge against its general credit or taxing powers. 14. Definitions and Interpretation. Terms not other- wise defined in this Bond Resolution but defined in the Loan Agreement shall have the same meanings in this Bond Resolution and shall be interpreted herein as provided therein. Notices may be given as provided in Section 9.01 of the Loan Agreement. In case any provision of this Bond Resolution is for any reason illegal or invalid or inoperable, such illegality or invalidity -6- or inoperability shall not affect the remaining provisions of this Bond Resolution, which shall be construed or enforced as if such illegal or invalid or inoperable provision were not con- tained herein. 15. Certifications. The Mayor, City Manager, City Clerk and other officers of the City are authorized and directed to prepare and furnish to Faegre & Benson, bond counsel, to the Company, to the Bank and to counsel for the Company and the Bank, certified copies of all proceedings and records of the City relating to the•Project and the Bond, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. -7- part, on any interest payment date on or after June 1, 1985, upon payment to the Bank of the principal amount of the Bond to be prepaid plus accrued interest, and a premium (expressed as a percentage of the principal amount to be prepaid) as follows: Redemption Date Premium June 1, 1985 to May 1, 1986 4.00% June 1, 1986 to May 1, 1987 3.00% June 1, 1987 to May 1, 1988 2.00% June 1, 1988 to May 1, 1989 1.00% June 1, 1989 and thereafter None Under any circumstances where the Holder may declare the entire principal balance of this Bond due and payable and where at such time no prepayment privilege exists under the terms of this Bond, such acceleration shall be deemed to be an evasion by the Company of the restrictions upon prepayment of this Bond and the amount of principal payable upon such acceleration shall bear the premium then applicable under the terms hereof, and, if at such time no prepayment is permitted, then the prepayment premium applicable at the earliest date on which prepayment is permitted. Notwithstanding anything herein to the contrary, if a Determination of Taxability (as defined in the Loan Agreement) shall be made, this Bond shall automatically bear interest on the unpaid balance at the interest rate that at all times is equal to one percent (1.00%) above the rate of interest publicly announced from time to time by The First National Bank of Saint Paul, as its prime rate of interest and shall be deemed to have borne such variable rate from the Date of Taxability (as defined in the Loan Agreement); and the Company shall within ten (10) days after a Determination of Taxability, pay to the Holder hereof as addi- tional interest the difference between the amount of interest actually paid from the Date of Taxability and the amount that would have been paid if such higher rate had been in effect from the Date of Taxability (regardless of whether the Bank is the present Holder or if the Bond has been paid or redeemed) and thereafter, the Company shall pay such increased installments of interest thereon at such rate for the remaining maturity of this Bond. Notice of any such prepayment shall be given to the owner or registered assigns of the Bond by certified or regis- tered mail, addressed to him at his registered address, not less than thirty (30) days prior to the date fixed for prepayment, and shall be published, if required by law, in a financial journal circulated in the English language in the cities of Minneapolis or St. Paul, Minnesota, at least once, not less than thirty (30) days before the date so fixed for prepayment. At -the date fixed for prepayment, funds shall be paid to the owner hereof at the office of the Bank or shall be deposited with the Bank, sufficient to pay the Bond, or the principal amount thereof to be prepaid and accrued interest thereon. Upon the happening of the above -3- conditions, the Bond thus called or the principal portions thereof prepaid shall not bear interest after the date of prepayment. This Bond is transferable, as provided in the Bond Resolution, only upon the bond register of the City Clerk, as bond registrar, by the owner hereof in person or by his duly authorized attorney, as provided in the Bond Resolution. In case an Event of Default as defined in the Loan Agreement occurs, this Bond and the Loan Repayments thereafter to become due under the Loan Agreement may become immediately due and payable, in the manner and with the effect and subject to the conditions provided in the Loan Agreement. The Holder of this Bond shall have the right to enforce the provisions of the Bond Resolution, Loan Agreement, Assignment, Lease Assignment, Guaranty Agreement and Mortgage. The terms and provisions of the Bond Resolution, Loan Agreement, Assignment, Lease Assignment, Guaranty Agreement and Mortgage, or of any instrument supplemental thereto, may be modified or altered pursuant to Section 9.03 of the Loan Agreement and paragraph 11 of the Bond Resolution. It is hereby certified and recited and the City Council has found: That the Project is an eligible "project" defined in Section 474.02, Subd. la of the Act; that the issuance of the Bond and the acquisition and construction of the Project will promote the public welfare and carry out the purposes of the Act; that the Project has been approved by the Commissioner of Securi- ties of the State of Minnesota as tending to further the purposes and policies of the Act; that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been properly done, have happened and have been performed in regular and due time, form and manner as required by law; and that this Bond does not constitute a debt of the City within the meaning of any constitutional, statutory or charter limitation. IN WITNESS WHEREOF, the City of St. Louis Park, by its City Council, has caused this Bond to be signed in its behalf by the manual signatures of the Mayor and the City Manager and attested by the manual signature of its City Clerk, and sealed with the corporate seal of the City, all as of the day of , 1951. Adopted by the City Council September 8, 1931 CITY OF ST. LOUIS PARK ATTEST: viewed for A ministration ity rlanager • And B ty Manager (SEAL Approveto form an legality -4- City Attorney 1 i r r (Form of Transfer) For value received, the undersigned owner does hereby assign and transfer the foregoing Bond to the named Assignee, and the undersigned City Clerk of the City of St. Louis Park as bond registrar hereby certifies that the foregoing Bond has been transferred and registered on the bond register in the name of such Assignee. Name of Assignee Signature of Owner -5- Signature of Date of City Transfer on Clerk Bond Register EXHIBIT 2 TO BOND RESOLUTION (Form of Loan Agreement Assignment) This Assignment is made as of the 1st day of September, 1981, between the CITY OF ST. LOUIS PARK, Minnesota, a municipal corporation in the County of Hennepin and State of Minnesota (herein called the "City") and the FIRST EDINA NATIONAL BANK (herein called the "Bank"). Recitals The City has executed and delivered to the Bank its single fully registered Industrial Development Revenue Bond (K K Corporation Project) in the principal amount of $1,000,000 dated the date of delivery, issued pursuant to a resolution adopted September 8, 1981 (the "Bond Resolution"). The proceeds of the Bond have been or are to be loaned to K K Corporation, a Minnesota corporation (the "Company") pursuant to a Loan and Purchase Agreement dated as of September 1, 1981, between the City, the Bank and the Company. The Bond is payable from and secured by the Loan Repay- ments to be made by the Company under the Loan Agreement and the Bank, as a condition to the purchase of the Bond, has required the execution of this Assignment. ACCORDINGLY, as authorized by the Bond Resolution and in consideration of the premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the City does hereby grant, transfer, assign and pledge to the Bank and its registered assigns of the Bond, all of the right, title and interest of the City in the Loan and Purchase Agreement and the Loan Repayments of the Company payable thereunder (except for the rights of the City under Section 5.02, 7.01, 8.04 and 8.05 thereof relating to expenses, indemnity and advances of the City), all for the purpose of securing the Bond. .N WITNESS WHEREOF, the City has executed this Assign- ment as of tho date first above written, but actually on the day of 1981. CITY By Attest And B ity Clerk ST. LOUIS PARK ty Manager 2A:Aitkg.Leerdr (Seal) viewed for administration Approves to form an,legality anager City At rney