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RES 1981-04 - 00006121y RESOLUTION NO. 4 - 1981 A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF A REVENUE NOTE PURSUANT TO THE MINNESOTA MUNICIPAL INDUSTRIAL DEVELOPMENT ACT TO PROVIDE FUNDS TO BE LM ED TO BARBEE COMPANY, A MINNESOTA PARTNERSHIP, FOP. AN INDUSTRIAL PROJECT AND APPROVING THE DISBURSING AGREEMENT, LOAN AGREEMENT, ASSIGNMENT OF LOAN AGREEMENT, MORTGAGF AND SECURITY AGREEMENT, LEASE AMID ASSIGNMENT OF RENTS AND LEASES. BE IT RESOVED by the City Council 1this "Council ") of the City of Fridley, Minnesota Ithe "City "), as follows: 1. Authority. The City is, by the constitution and the laws of the State of Minnesota, including the Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended Ithe "Act ") authorized to issue and sell its revenue bonds for the purpose of financing the acquisition, construction and equipping of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. Documents Presented. This Council proposes that the City shall issue and sell its Industrial Development Revenue Note 1Win Stephens Datsun North, Inc. Project) in substantially the form set forth in Exhibit A attached hereto (the "Note ") and loan the proceeds thereof to Barbee Company, a Minnesota partnership $the "Company ") to partially pay the cost of acquiring, constructing and equipping an expansion to an existing automobile dealership building and related facilities, together with necessary exterior utilities and site improvements Ithe "Project "), all pursuant to the Act. Forms of the following documents relating to the Note and the Project have been submitted to this Council and are now on file in the office of the City Clerk: $a) Disbursing Agreement, dated as of January 1, 1981, between the Mortgagee, hereinafter defined, and the Company, providing for the purchase of the Note by the Mortgagee and the making of advances thereunder in accordance with the terms and conditions set forth therein (this document will not be executed by the City); Ib) Loan Agreement, dated as of January 1, 1981, between the City and the Company whereby the City agrees to make a loan to the Company of the funds advanced by the Mortgagee, hereinafter defined, under the Disbursing Agreement and the Company agrees to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of and interest on the Note; (c) Assignment of Loan Agreement dated as fo January 1, 1981 Ithe "Loan Assignment ") by the City in favor of Midwest Federal Savings and Loan Association of Minneapolis Ithe "Mortgagee ") whereby the City assigns certain of its interest in the Loan Agreement to the Mortgagee as security for the Note; 1d) Mortgage and Security Agreement dated as of January 1, 1981 Ithe "Mortgage "), by the Company in favor of the Mortgagee by which the Company grants to the Mortgagee a first mortgage lien on and security interest in the Project and all improvements thereto as security for the Note (this document will not be executed by the City); (e) Lease dated as of January 1, 1981 Ithe "Lease ") , between the Company, as lessor, and Win Stephens Datsun North, Inc., as lessee (this document will not be executed by the City); If) Assignment of Rents and Leases dated as of January 1, 1981 Ithe "Assignment of Rents "), by the Company in favor of the Mortgagee whereby the Company assigns its interest in the rents and leases of the Project to the Mortgagee as additional security for the Note $this document will not be executed by the City). 3. Findings. It is hereby found, determined and declared that: (a) The City is a duly organized and existing municipal corporation under the constitution and the laws of the State of Minnesota with the powers and authority, among others, to issue the Note under the Act. l� , Page 2 -- RESOLUTION 4 - 1981 (b) The Project, comprised of the buildings, improvements and equipment described in the Loan Agreement and the Mortgage, constitutes a "project" authorized by and described in Section 474.02, Subd. 1 of the Act. (c) The purpose of the Project is and the effect thereof will be to promote the public welfare by: the encouragement and promotion of employment opportunities within the City and its surrounding areas; the development of sound industry and commerce to use the available resources of the City, in order to retain the benefit of the City's exising investment in educational and public service facilities; halting the movement of talented, educated personnel to other areas and thus preserving the economic and human resources needea as a base for providing governmental services and facilities; and increasing the tax base of the City, county and school district in which the Project is located. (d) The Project has been approved by the Commissioner of Securities, Minnesota Department of Commerce, as tending to further the purposes and policies of the Act. (e) The issuance and sale of the Note, the execution and delivery of the Loan Agreement and the Loan Assignment and the performance of all covenants and agreements of the City contained in the Note, Loan Agreement and Loan Assignment and of all other acts of the City to make the Loan Agreement, Loan Assignment and Note valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (f) To the best knowledge of the members of this Council, there is no litigation, action, suit, proceeding or investigation at law or in equity before or by any court, public board or body pending or threatened against, or affecting the City wherein an unfavorable decision, ruling or finding would adversely affect the transactions contemplated by or the validity or enforceability of this Note Resolution, the Note, Loan Agreement or Loan Assignment in accordance with their respective terms. (g) There are no agreements to which the City is a party, ordinances or resolutions of the City or court orders directed to the City affecting the validity or enforceability of this Note Resolution, the Note, Loan Agreement of Loan Assignment provided, however, that this finding is made solely for the purpose of estopping the City from denying the validity of the Note, Loan Agreement or Loan Assignment by reason of the existence of any facts contrary to this finding. (h) It is desirable that the City of Fridley, Minnesota Industrial Development Revenue Note (Win Stephens Datsun North, Inc. Project) in the amount of $600,000.00 be issued by the City upon the terms set forth herin, and that certain of the City's interest in the Loan Agreement be assigned to the Mortgagee as security for the payment of principal of and interest on the Note. (i) The Loan Agreement provides for payments by the Company to the Mortgagee for the account of the City of such amounts as will be sufficient to pay the princpal of and interest on the Note 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, including adequate insurance, taxes and special assessments. (j) Under the provisions of Section 474.10 of the Act, and as provided in the Loan Agreement, the Note 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; the City is not subject to any liability thereon; no holder of the Note shall ever have the right to compel the 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, other than its rights under the Loan Agreement; the Note shall recite that the Note, including interest thereon, shall not constitue nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and that the Note does not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. Page 3 -- RESOLUTION NO. 4 - 1981 (k) The Company has all necessary licenses and permits required by the City for the construction of the Project. 4, Approval and Execution of Documents. The forms of Disbursing Agreement, Loan Agreement, Loan Assignment, Mortgage, Lease and Assignment of Rents referred to in Paragraph 2 hereof are approved. The Loan Agreement shall be executed in the name and on behalf of the City by the Mayor and the City Clerk, upon execution thereof by the Company, 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 conclusively evidenced by the execution thereof. The Loan Assignment shall also be executed in the name and on behalf of the City by the Mayor and the City Clerk in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other laws, as may be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all documents shall be delivered and filed as provided therein. The Disbursing Agreement, Mortgage, Lease and Assignment of Rents may contain such revisions as may be approved by the Mortgagee and the parties executing the same. 5. Approval, Execution and Delivery of Note. The City shall proceed forthwith to issue its Industrla Deve opment Revenue Note (Win Stephens Datsun North, Inc. Project), to be dated the date of delivery, in the principal amount of $600,000.00 in the form and containing the terms set forth in the form of Note attached hereto as Exhibit A, which terms are for this purpose incorporated in the Note Resolution and made a part hereof. The proposal of the Mortgaqee to purchase the Note at a price of $600,000.00 (100% of its par value) by making advances in accordance with the Disbursing Agreement is hereby found and determined to be reasonable and is hereby accepted. The Mayor and the City Clerk are authorized and directed to prepare the Note in typewritten form substantially in the form set forth in Exhibit A attached hereto. The Note shall be executed by the manual signatures of the Mayor and the City Clerk and the official seal of the City shall be affixed thereto. When so prepared and executed the Note shall be delivered to the Mortgagee. The Note proceeds will be paid to the parties entitled thereto in accordance with the Disbursing Agreement and the Loan Agreement. The Note 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. 6. Registration Records. The City Clerk, as bond registrar (the "Bond Registrar" , sha eep a bond register (the "Bond Register ") in which the City shall provide for the registration of the Note and for transfers of the Note. The principal of and interest on the Note shall be payable to the Mortgagee or registered assigns in lawful money of the United States of America at the address of the Mortgagee or registered assigns as shown on the Bond Register. 7. Mutilated, Lost, Stolen or Destroyed Note. If the Note is mutilated, lost, stolen or destroyed, the City may execute and deliver to the registered owner a new Note of like date, number, maturity and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Note shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Note, there shall be first furnished to the City and the Company evidence of such loss, theft or destruction satisfactory to the City and the Company together with indemnity satisfactory to them. The City may charge the holder of the Note with its reasonable fees and expenses in this connection. 8. Transfer of Note; Person Treated as Owner. The Note shall be transferable by the registered owner on the Bond Register of the City, upon presentation of the Note for notation of such transfer thereon at the office of the City Clerk, as Bond Registrar, accompanied by a written instrument of transfer in form satisfactory to the Bond Registrar duly executed by the registered owner or its attorney duly authorized in writing. The registered owner seeking to transfer ownership of the Note shall also give written notice thereof to the Company. The Note shall continue to be subject to successive transfers at the option of the registered owner of the Note. No service charge shall be made for any such transfer, but the Bond Registrar may n 1 Page 4 -- RESOLUTION NO. 4 -, 1981 require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The Bond Registrar shall give written notice to the Company of any transfer of ownership recorded on the Bond Register immediately upon effectuating same. The person in whose name the Note shall be registered from time to time shall be deemed and regarded as the absolute owner thereof for all purposes, and payment of or on account of the principal of and interest on the Note shall be made only to or upon the order of the registered owner thereof, or its attorney duly authorized in writing, and neither the City, the Bond Registrar nor the Company shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid. 9. Amendments, Changes and Modifications. The City shall not, without the written consent of t e Mortgagee, enter into any agreement, change, modification, alteration or termination of the Loan Agreement, the Loan Assignment or this Note Resolution. 10. Proceedings and Records Relating to Note. The Mayor, City Manager and City Clerk and other officers of the City are authorized and directed to prepare and furnish to the purchaser of the Note, certified copies of all proceedings and records of the City relating to the Note, 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. PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 12TH DAY OF JANUARY, 1981. ATTEST: CITY C D C. INMAAN�� 0090A/0890A MAYOR - WILLIAN� y NEE 7 Page 5 -- RESOLUTION NO. 4 - 1981 UNITED STATES OF AMERICA STATE OF MINNESOTA CITY OF FRIDLEY COUNTY OF ANOKA No. R -1 Industrial Development Revenue Note (Win Stephens Datsun North, Inc. Project) EXHIBIT "A" $600,000.00 The City of Fridley, Minnesota, a municipal corporation in the County of Anoka and State of Minnesota (the "City "), for value received, hereby promises to pay to the order of Midwest Federal Savings and Loan Association of Minneapolis, its successors or registered assigns (the "Mortgagee "), at thge principal office of the Mortgagee or at such other place as the Mortgagee may designate in writing, solely from the revenues derived by the City from the Loan Agreement hereinafter described, the principal sum of SIX HUNDRED THOUSAND AND NO /100 DOLLARS ($600,000.00), or such portion thereof as may be advanced under the Disbursing Agreement hereinafter described, and to pay interest on the principal amount hereof unpaid from time to time (the "Principal Balance ") from the date hereof until this Note is fully paid at the rate of ten percent (10 %) per annum (computed on the basis of a 360 -day year, 30 -day month). the Principal Balance and interest thereon shall be payable as hereinafter set forth. From and after the date hereof until the Amortization Commencement Date hereinafter defined, interest only on the Principal Balance each month shall be due and payable on the first day of the month following the month during which the initial advance under the Disbursing Agreement is made and on the first day of each succeeding thereafter. Commencing on the first day of the second month following the date of the final advance under the Disbursing Agreement, but in no event later than December 1, 1981 (the "Amortization Commencement Date "), the Principal Balance and interest thereon shall be paid together in installments of Five Thousand Four Hundred Fifty -two and 201100 Dollars ($5,452.20) per month and the same amount on the same day of the next two hundred thirty -eight (238) months thereafter continuing until the first day of the two hundred fortieth (240th) month next succeeding the Amortization Commencement Date, when the remaining Principal Balance together with the accrued interest thereon shall be paid. All such payments are to be applied first to interest due on the Principal Balance and the remainder in reduction of the Principal Balance. In the event of a Determination of Taxability, as defined in the Loan Agreement, the rate of interest hereon shall be increased to fifteen percent (15%) per annum effective as of the Date of Taxability, as defined in the Loan Agreement. In the event of a Determination of Taxability, monthly payments of principal and interest from and after the Date of Taxability shall be recomputed at the applicable rate set forth above using the amortization period used in the original computation of the payments due hereunder and the City shall (a) promptly pay to the registered owner and to any prior registered owner the aggregate difference between (i) the amounts actually paid hereunder between the Date of Taxability and the effective date of such rate increase and (ii) the amounts which would have been paid to such registered owner during such period if the increased rate had been in effect and (b) pay to the registered owner hereof after the effective date of such rate increase monthly payments of principal and interest as so recomputed. The foregoing obligation for an increased rate of interest hereon in the event of a Determination of Taxability shall survive payment of this Note. This Note is issued under the Minnesota Municipal Industrial Development Act, Chapter 474, Minnesota Statutes, as amended (the "Act "), and in conformity with the provisions, restrictions and limitations thereof. This Note does not represent a debt or pledge the faith or credit of the City or grant to the registered owner of this Note any right to have the City levy any taxes or appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Note a general obligation of the City or the individual officers or agents thereof. This Note and interest hereon are payable solely and only out of the moneys received under the Loan Agreement or realized from the enforcement of the security hereinafter described. z Page 6 -- RESOLUTION NO. 4 - 1981 This Note is issued and sold pursuant to a resolution of the City adopted by its City Council on January 12, 1981 (the "Note Resolution ") in order to provide funds to be loaned to Barbee Company, a Minnesota partnership ('the Company ") pursuant to a Loan Agreement dated as of January 1, 1981 (the "Loan Agreement ") between the City and the Company for the purpose of financing the acquisition, construction and equipping of an expansion to an existing automobile dealership building and related facilities, together with appurtenant site improvements (the "Project "). Under the Loan Agreement, the Company has agreed to construct and equip the Project and has agreed to make certain Loan Repayments, as defined in the Loan Agreement, in amounts and at ' times sufficient to pay the principal of, premium, if any, and interest on this Note when due. Pursuant to an Assignment of Loan Agreement dated as of January 1, 1981 executed by the City in favor of the Mortgagee (the "Loan Assignment"), the City has pledged and assigned its interest in the Loan Agreement (except its rights under Sections 4.02(b), 6.01, 7.04 and 7.05 thereof relating to expenses, indemnity and advances of the City) to the registered owner hereof. This Note is further secured by (i) a Mortgage and Security Agreement dated as of January 1, 1981 (the "Mortgage ") by which the Company has granted to the Mortgagee a first mortgage lien on and security interest in the Project and (ii) an Assignment of Rents and Leases dated as of January 1, 1981 (the "Assignment of Rents ") by which the Company has assigned to the Mortgagee its interests in all rents and leases of the Mortgaged Property, as defined in the Mortgage. Advances o funds for the Project will be made pursuant to a Disbursing Agreement dated as of January 1, 1981 (the "Disbursing Agreement ") between the Mortgagee and the Company. Reference is hererby made to the Note Resolution, Loan Agreement, Loan Assignment, Disbursing Agreement, Mortgage and Assignment of Rents for a complete description of the covenants and agreements therein contained, the nature and extent of the security thereby created and the rights, duties and immunities of the City thereunder. This Note may not be prepaid on or before the Amortization Commencement Date, but thereafter, at the direction of the Company and upon thirty (30) days prior written notice to the registered owner hereof, this Note may be prepaid at any time, either in whole or in part, but in case of prepayment of any ' amount or amounts in any Loan Year, as hereinafter defined, there shall also be paid, over and above the interest accrued under the terms of this Note, an amount equal to ten percent (10 %) of the sum(s) prepaid during the first Loan Year following the Amortization Commencement Date, the percentage declining by one percent (1 %), which percentage shall be payable for the remaining term of this Note. The term "Loan Year" as used herein shall mean a twelve (12) month period commencing on the Amortization Commencement Date and on each anniversary thereof. At the direction of the Company, this Note may also be prepaid in whole or in part without premium in the event of a Determination of Taxability as provided in the Loan Agreement. Notice of any such prepayment shall be deemed sufficient if mailed by the Company to the registered owner of this Note at least 30 days prior to the prepayment date; provided, however, such prepayment shall occur within six (6) months following a Determination of Taxability. This Note is also subject to prepayment without premium in certain instances of damage to or destruction or condemnation of the Project as provided in the Loan Agreement and the Mortgage. All prepayments, wheter voluntary or otherwise, shall be applied in inverse order of maturity and shall not reduce or postpone the payments otherwise due hereunder If any installment or payment is paid more than 10 days after the due date ' thereof, the City agrees to pay a reasonable late payment charge in the amount of five percent (5 %) of the installment or payment to cover the expenses of collection. The registered owner hereof may make a reasonable charge to cover the expense of changing its record of ownership, or the giving of information relating to the unpaid balance of this indebtedness, in connection with any conveyance of the property covered by the Mortgage. to Page 7 -- RESOLUTION NO.4 - 1981 The registered owner hereof may extend the times of payments of interest and /or principal of this Note without notice to or consent of any party liable hereon without releasing any such party. As provided in the Note Resolution, this Note is transferable only by the registered owner hereof in person or its duly appointed attorney by registration hereon and on the books of the City kept for that purpose at the office of the City Clerk. By acceptance of this Note, the registered owner agrees to provide to the City Clerk, at the City Clerk's request, a verified statement of the dates , and amounts of all payments of principal, premium and interest received in respect to this Note. It is agreed that time is of the essence in the performance of this Note. In the event of default in the payment of principal or interest hereof or if an Event of default as defined in the Mortgage, Loan Agreement or Disbursing Agreement occurs, the registered owner hereof shall have the right and option to declare, without notice, all the remaining indebtedness of unpaid principal and accrued interest evidenced by this Note immediately due and payable. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. It is hereby certified and recited and the City Council has found: That the Project is an eligible "project" defined in Section 474.02, Subdivision 1 of the Act; that the issuance of this Note and the acquisition, construction and equipping 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 Securities 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 Note have been properly doe, have happened and have been performed in regular and due time, form and manner as required by law; and that this Note does not constitute a debt of the City within the meaning of any constitutional or statutory limitation. IN WITNESS WHEREOF, THE CITY OF FRIDLEY, MINNESOTA, by its City Council, has , caused this Note to be signed in its behalf by the signatures of the Mayor and the City Clerk and sealed with the corporate seal of the City, this day of January, 1981. CITY OF FRI DL:EY, MINNNNEESSOTAA By� 1 _ Mayor (Seal) And By City Clerk CERTIFICATE OF REGISTRATION It is hereby certified that, at the request of the holder of the within Note, the City of Fridley, Minnesota has this day registered it as to principal and ' interest, in the name of such holder, as indicated in the registration blank below, on the books kept by the undersigned for such purpose: Name of Authorized Registered Date of Signature Owner Registration of City Clerk Midwest Federal Savings and Loan Association of Minneapolis January 1981 0090A/0890A