RES 1984-97 - 00005509192
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF FRIDLEY,
MINNESOTA, AUTHORIZING THE MAKING OF A LOAN TO LONGVIEW
FIBRE COMPANY FOR THE PURPOSE OF FINANCING THE
ACQUISITION, CONSTRUCTION AND INSTALLATION OF TWO NEW
FOLDER: -- RS FOR THE PRINTING, SCORING, DIE- CUTTING,
FOLDING, GLUING AND BUNDLING OF CORIgMM BOXES, TOGETHER
WITH RELATED MACHINERY AND EQUIPMENT, AND CERTAIN
MODIFICATIONS AND ADDITIONS TO ITS EXISTING FACILITY, BY
IANGVIEW FIBRE COMPANY; AUTHORIZING THE ISSUANCE OF ITS
$3, 200,000 PRINCIPAL AMOUNT INDUSTRIAL DEVELOPMENT REVENUE
BOND (LONGVIEW FIBRE COMPANY PROJECT) PURSUANT TO
MINNESOTA STATUTES, CHAPTER 474, TO FUND SAID LOAN,
PRESCRIBING THE FORM OF A BOND PURCHASE AGREEMENT AND
AUTHORIZING THE EXECUTION THEREOF; PRESCRIBING THE FORM OF
THE LOAN AGREEMENT AND AUTHORIZING THE EXECUTION THEREOF;
PRESCRIBING THE FORM OF AN ASSIGNMENT AND AUTHORIZING THE
EXECUTION THEREOF; PRESCRIBING THE FORM OF A DEPOSITORY
AGREEMENT AND AUTHORIZING THE EXECUTION THEREOF; AND
AUTHORIZING ALL OTHER ACTIONS NECESSARY FOR THE
CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THIS
RESOLUTION
WHEREAS, the City of Fridley, Minnesota (the "City "), is authorized by
Minnesota Statutes, Chapter 474, as amended (the "Act ") , to issue nonrecourse
revenue bonds and to loan the proceeds thereof to finance the costs of
acquisition, construction and improvement of a "Project" as defined in the
Act; and
WHEREAS, any bonds issued to provide funds for such purposes must be payable
solely from the revenues received by the City from the payment of such loans
and from the proceeds of the security for payment of such loans, and such
bonds do not constitute an indebtedness of the State of Minnesota or of the
City of Fridley (the "City ") , or any other municipal corporation or
quasi - municipal corporation, political subdivision or agency of the State of
Minnesota within the meaning of any constitutional or statutory provisions
whatsoever; and
WHEREAS, the City Council, on March 26, 1984, gave preliminary approval to the
issuance of nonrecourse revenue bonds under the Act to provide financing to
Longview Fibre Company, a Delaware corporation (the "Company "), for the
acquisition, construction and installation within the City of a qualifying
project consisting or two new folder - gluers for the printing, scoring,
die- cutting, folding, gluing and bundling of corrugated boxes, togehter with
related machinery and equipment, and certain modifications and additions to
its existing facility (the "Project "); and
WHEREAS, the Company has asked the City to issue and sell its Industrial
Development Revenue Bond (Longview Fibre Company Project) in the aggregate
principal amount of $3,200,000 (the "Bond ") , for the purpose of making a loan
to the Company to finance all or a portion of the cost of the Project (as
hereinafter defined); and
WHEREAS, the City and the Company have agreed to enter into a Loan Agreement
(the "Loan Agreement "), dated as of August 1, 1984, pursuant to which the City
will lend to the Company the proceeds of the Bond under the terms and
conditions stated therein; and
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WHEREAS, the Company has agrees to execute a Security Agreement (the "Security
Agreement "), dated as of August 1, 1984, pursuant to which the Company will
pleage the Project in order to secure its obligations under the Loan
Agreement; and
WHEREAS, the City will enter into a Bond Purchase Agreement (the "Bond
Purchase Agreement ") with Chemical Bank (the "Purchaser ") , pursuant to which
the City will sell and the Purchaser will purchase the Bond; and
WHEREAS, the City, contemporaneously with the issuance, execution and delivery
' of the Bond, will assign and pledge certain of its rights in the Loan
Agreement and Security Agreement and duties following the issuance of the Bond
to the Purchaser, as security for payment of the indebtedness evidenced by the
Bond.
NOW, RHEREFURE, BE IT RESOLVED by the City Council of the City of Fridley,
Minnesota, as follows:
1.01. Definitions. Certain capitalized terms used in this Resolution are
hereinafter defined in this Section 1.01. When used herein, the following
terms shall have the following meanings unless the context clearly indicates
otherwise:
"Act" means Minnesota Statutes, Chapter 474, as the same is supplemented and
amendea from time to time.
"Administration Expenses" means the reasonable and necessary fees and expenses
incurred by the City pursuant to this Resolution and the Loan Agreement.
"Assignment" means the Assignment dated as of August 1, 1984, pursuant to
which the City assigns to the Purchaser for security purposes its right, title
and interest in and to the Loan Agreement and the Security Agreement.
"Bond" means the City's $3,200,000 Industrial Development Revenue Bond
(Longview Fibre Company Project) authorized to be issued by this Resolution,
substantially in the form and of the content of Exhibit C.
"Bond Counsel" means O'Connor and Hannan, Minneapolis, Minnesota, as bond
counsel to the City.
"Bond Purchase Agreement" means the Bond Purchase Agreement by and among the
City, the Purchaser and the Company which provides for the purchase of the
Bond by the Purchaser.
"Business Day" means any day other than a Saturday or Sunday on which banking
business is transacted, excluding any day on which banks in New York, New York
or Seattle, Washington, are authorized to be closed.
"Charter" means the Hone Rule Charter of the City.
"Authorized Company Representative" means such person at
the time and
from
time to time designated by written certificate furnished
to the City,
the
Depository and the Registered Owner containing the specimen
person and signed on behalf of the Company by the President
signature of
or any
such
Vice
President of the Company authorized to act on behalf of the
Company.
"Bond" means the City's $3,200,000 Industrial Development Revenue Bond
(Longview Fibre Company Project) authorized to be issued by this Resolution,
substantially in the form and of the content of Exhibit C.
"Bond Counsel" means O'Connor and Hannan, Minneapolis, Minnesota, as bond
counsel to the City.
"Bond Purchase Agreement" means the Bond Purchase Agreement by and among the
City, the Purchaser and the Company which provides for the purchase of the
Bond by the Purchaser.
"Business Day" means any day other than a Saturday or Sunday on which banking
business is transacted, excluding any day on which banks in New York, New York
or Seattle, Washington, are authorized to be closed.
"Charter" means the Hone Rule Charter of the City.
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"City" means the City of Fridley, Minnesota, a municipal corporation duly
organizea and validly existing under and pursuant to its Charter and the
Constitution and laws of the State of Minnesota.
"Cone" means the Internal Revenue Code of 1954, as amended, together with
corresponding and applicable regulations promulgated or proposed and revenue
rulings issued thereunder by the Department of the Treasury and the Internal
Revenue Service of the United States.
"Company" means Longview Fibre Company, a Delaware corporation, and includes
its successors and assigns as permitted under the Loan Agreement and this
Resolution.
"Completion Date" means the date of substantial completion of the Project as
that date shall be certified as provided in Section 4.01 of the Loan
Agreement.
"Construction Fund" means the Construction Fund created in Section 4.03 of
this Resolution.
"Construction Period" means the period between the beginning of acquisition
and installation of the Project and the Completion Date.
"Cost of the Project" means and includes the following items of cost and
expense:
(i) all costs of acquiring, constructing and installing the Project
(including fees and expenses for architectural, engineering and
supervisory services with respect thereto and governmental charges levied
or assessed on the Project during the Construction Period);
(ii) all fees, taxes, charges and other expenses for recording or f iling
the Loan Agreement, the Security Agreement and the Assignment;
(iii) all fees and expenses of administration, supervision and inspection
properly chargeable to the Project, legal expenses and fees, fees and
expenses of the placement agent in arranging for the sale or placement of
the Bond, financing charges, costs of preparing, issuing and selling the
Bond, and ail other items of expense, including those of the City,
incident to the acquisition, construction, installation and financing of
the Project;
(iv) interest on the Bond prior to the Completion Date to the extent such
interest is included in the "aggregate face amount" of the Bond as
requirea by Section 103(b) of the Code and will not result in less than
"substantially all" of the proceeds of the Bond being used in accordance
with Section 103(b)(6)(A) of the Code;
(v) reimbursement to the Company for any of the above - enumerated items of
cost or expense paid by it; and
(vi) any other costs authorized under the Act.
"Depository" means Rainier National Bank, a national banking association
having its principal offices in Seattle, Washington, as depository of the
Construction Fund.
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"Depository Agreement" means the Depository Agreement dated as of August 1,
1984, by and among the City, the Company and the Depository.
"Determination of Taxability" means establishing the existence of an Event of
Taxability in one of the following ways:
(i) any determination, decision or decree or the issuance of any private
ruling, technical advice or any other written communication by the
Commissioner or the Internal Revenue Service or any officer or agent of
the Internal Revenue Service competent to make such determinations, or by
any court of competent jurisdiction, that the interest payable on the
Bonds is includable in the gross income of any Registered Owner (other
than a Registered Owner who is a "substantial user" or a "related person"
within the meaning of Section 103(b) (13) of the Code, or any similar law
then in etfect) for federal income tax purposes; or
(ii) the delivery of written notice to the City and the Company by any
Registered Owner declaring that an Event of Taxability has occurred on a
specified date (other than by reason of an event described in
subparagraph (i) above) , and describing the Event of Taxability, said
notice to become effective thirty (30) days after the giving of the same
unless prior thereto the Company shall have delivered to the Registered
Owner, at the sole cost and expense of the Company, an opinion from
nationally recognized bond counsel satisfactory to such Registered Owner
to the effect that all amounts paid or payable as interest on the Bond
are and will remain exempt from federal income taxation, provided,
however, that if such written notice is based solely upon (or a necessary
factor for the basis of such notice is) the conclusion that such
Registered Owner is a "substantial user" or "related person" within the
meaning or Section 103(b) (13) of the Code or any similar law then in
effect, no such Determination of Taxability shall be deemed to have
occured in respect of such Registered Omer.
"Events of Default" means those defaults specified in Section 6 of the Bond
and Section 7.01 of the Loan Agreement.
t "Event of Taxability" means any change in law or fact, or in the
interpretation thereof, or the existence, occurence or recognition of a fact
or circumstance, which could cause, or have an effect similar in result to,
the inclusion at any time of any interest paid or payable on the Bond in the
gross income of the Registered Owner for federal income tax purposes, or which
could cause for any other reason the payment of federal income tax by the
Registered Owner as a result (in whole or in part) of the receipt of or right
to receive such interest.
"Guaranty Agreement" means the Guaranty and Tax Indemnification Agreement
dated as or August 1, 1984, between the Company and the Purchaser.
"Indemnification and Compensation Agreement" means the Indemnification and
Compensation Agreement dated as of August 1, 1984, by and between the City and
the Company.
"Loan" means the loan from the City to the Company of the proceeds of sale of
the Bond as provided in the Loan Agreement.
"Loan Agreement" means the Loan Agreement, dated as of August 1, 1984, between
the City and the Company, as supplemented and amended from time to time.
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"Loan Payments" means those payments required to be made by the Company
pursuant to Sections 3.01, 3.02 and 3.03 of the Loan Agreement.
"Official Action Resolution" means Resolution No. 38 - 1984, adopted by the
City Council on March 26, 1984, pursuant to which the City gave preliminary
approval to the issuance of its industrial development revenue obligation(s)
for the purpose or financing the Project.
"Permitted Investments" means any of the following investments approved in
writing by the Company:
(i) direct obligations of, or obligations the principal of and interest
on which are unconditionally guaranteed by, the United States of America;
(ii) direct obligations of, or obligations guaranteed by, any State of
the United States of America or the District of Columbia, or obligations
of the Federal Financing Bank, Federal National Mortgage Association,
Government National Mortgage Association, Federal Intermediate Credit
Bank, Banks for Cooperatives, Tennessee Valley Authority or Federal Home
Loan Banks;
(iii) commercial paper (other than commercial gaper issued by the Company
or any affiliated corporation) rated in any of the two highest rating
categories designated by a nationally recognized rating agency;
(iv) corporate bonds rated in any of the two highest rating categories
designated by a nationally recognized bond rating agency;
(v) repurchase agreements with banks or banker's acceptances insured or
guaranteed by institutions whose unsecured rating on short -term
obligations is in the highest rating category designated by a nationally
recognized rating agency; and
(vi) money market daily accounts, and deposits with or Certificates of
Deposit in banks (including the Purchaser) or savings and loan
' associations, provided, that such banks or savings and loan associations
have a combined capital and surplus of at least $100,000,000
"Prime Rate" means the rate per annum announced by Chemical Bank from time to
time as its prime rate in effect at its principal office in the City of New
Yor, New York; each change in such prime rate shall be effective on the date
such change is announced.
"Project" means the acquisition, construction and installation of two new
folder - gluers for the printing, scoring, die cutting, folding, gluing and
bundling or corrugated boxes, together with related machinery and equipment,
and certain modifications and additions to the Company's existing facility, to
be acquired, constructed and installed by the Company with the proceeds of
sale or the Bond.
"Purcnaser" means Chemical Bank, a banking corporation having its principal
corporate office in New York, New York, as the original purchaser and
Registered Owner of the Bond.
"Registered Owner" means the Purchaser and any subsequent owner of record of
the Bond as reflected on the bond registration books of the City.
"Resolution" means this Resolution,
and sold.
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pursuant to which the Bond is being issued
"Security Agreement" means the Security Agreement, dated as of August 1, 1984,
from the Company for the benefit of the City.
"State" means the State of Minnesota.
"Tax Incidence Date" means the first date on which interest on the Bond
becomes or became includable in the gross income of the Registered Owner for
federal income tax purposes as a result of an Event of Default.
"Trustee" means a bank or trust company qualified to act as a trustee under
the Act (including, without limitation, the Registered Owner) when acting as
Trustee, paying agent and Bond registrar pursuant to Article VII of this
Resolution.
1.02. Interpretation. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders.
Words imparting the singular number shall include the plural numbers and vice
versa unless the context shall otherwise indicate. Reference to Articles,
Sections and other subdivisions of this Resolution as originally adopted,
unless expressly stated to the contrary. The headings of this Resolution are
for convenience of reference only and shall not define or limit the provisions
hereof.
ARTICLE II
Findings of the City
2.01. Findings. The City finds and determines that:
(a) the Project constitutes a "project" within the meaning of Section
474.02, Subdivision la of the Act;
(b) it will be in furtherance of the purposes of the Act for the City (i)
to assist the Company in financing the Project in the manner provided in
this Resolution and in the Loan Agreement; (ii) to issue and sell its
$3,200,000 Industrial Development Revenue Bond (Longview Fibre Company
Project) under the terms and conditions set forth in this Resolution;
(iii) to enter into the Loan Agreement to evidence the Company's
obligation to repay the Loan; and (iv) to assign and pledge the City's
interest in the Loan Agreement (other than with respect to costs,
release, indemnification and waiver under Sections 3.06, 6.01, 7.07 and
7.08 thereof, which will not be assigned and pledged) and the Security
Agreement to the Purchaser;
(c) the purpose of the Project is, and the effect thereof will be to
promote the public welfare by the attraction, encouragement and
development of econanically sound commerce so as to prevent the emergence
of blighted and marginal lands and areas of chronic unemployment and to
preserve the existing investment of the community in facilities for
public service and preserving a tax base adequate to finance such
service;
(d) the Project when completed will add to the tax base of the City and
will accordingly 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, will increase employment and the level of economic activity in
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this area, and enhance the reputation of the City as a desirable location
for people and business;
(e) the Project has been approved by the Minnesota Energy and Economic
Development Authority as tending to further the purposes and policies of
the Act;
(f) the financing of the Project, the issuance and sale of the Bond, the
execution and delivery of the Loan Agreement and the Security Agreement,
and the performance of all covenants and agreements of the City contained
' in the Bond, the Loan Agreement, and the Security Agreement and of all
other acts and things required under the Charter and the Constitution and
laws of the State of Minnesota to make the Loan Agreement, the Security
Agreement, the Assignment, and the Bond valid and binding obligations of
the City in accordance with their terms, are authorized by the Act;
(g) it is desirable that the Bond in the aggregate principal amount of
$3,200,000 be issued by the City upon the terms set forth herein, and
that the City assign its interest in the Loan Agreement and the Security
Agreement to the Purchaser as security for the payment of the principal
of on the Bond;
(h) the Loan Payments contained in the Loan Agreement are fixed so as to
produce income and revenue sufficient to provide for prompt payment of
principal of and interest on the Bond issued under this Resolution when
due, and the Loan Agreement also provides that the Company is required to
pay all expenses of the operation and maintenance of the Project
including, without limitation, adequate insurance thereon and all taxes
and special assessments levied upon or with respect to the Project and
payable during the term of the Loan Agreement; and
(i) under the provisions of Minnesota Statutes, Section 474.10, and as is
provided in the Loan Agreement, the Bond is not to be payable from nor
chargea 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 Bond shall ever have the right to compel any 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; the Bond issued hereunder shall recite
that the Bond including interest thereon, is payable soley from the
revenue pleaged to the payment thereof; and the Bond shall not constitute
a debt or the City within the meaning of any constitutional, Charter or
statutory limitation.
ARTICLE III
Authorization, Terms, Execution and Issuance of Bond
3.01. Authorized Amount of Bond. No Bond may be issued under this Resolution
except in accordance with this Article. The total principal amount of the
Bond to be issued hereunder is hereby expressly limited to $3,200,000.
3.02. Bond Not a General Obligation of City. The Bond shall be payable soley
out of the revenues and other security assigned and pledged hereby and shall
not constitute and indebtedness of the City within the meaning of any
constitutional, Charter, or statutory limitation and shall never constitute or
give rise to a pecuniary liability of the City (other than a liability for
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payment from the revenues and security assigned and pledged hereby) or a
charge against its general credit or taxing powers.
3.03. Authorization of the Bond. A. Pursuant to the Act, there is hereby
authorized to be issued hereunder and secured as provided herein a bond issue
designated as the "City of Fridley, Minnesota, Industrial Development Revenue
Bond (Longview Fibre Company Project)."
The Bond shall be issued as a single fully registered bond numbered R -1, shall
be in the denomination of $3,200,000, shall be dated as of the date of its
' execution and delivery to the Purchaser. The provisions of the Bond are
hereby approved as though such provisions were set forth in full in this
Resolution. The Bond shall bear interest from the date thereof on the
oustanding principal balance at a variable rate equal to sixty -six percent
(66 %) of the Prime Rate. Any change in the interest rate on the Bond
resulting from a change in the Prime Rate shall be effective on the effective
date of such change in the Prime Rate announced by Chemcial Bank at its
principal office in New York, New York. Interest shall be calculated on the
basis of a 360 -day year and the actual number of days elapsed.
The Bond shall be payable in installments consisting of interest or principal
plus interest. Principal on the Bond shall be payable commencing on December
31, 1986, and semiannually thereafter on June 30 and December 31 of each year,
in the years and principal installments, respectively, as follows:
June 30 December 31
1986 -0- $320,000
1987 $320,000 $320,000
1988 $320,000 $320,000
1989 $320,000 $320,000
1990 $320,000 $320,000
1991 $320,000 -0-
Interest on unpaid principal amounts of the Bond shall be payable commencing
on December 31, 1984, and semiannually thereafter on June 30 and December 31
' of each year until the principal, amount of the Bond shall have been paid.
Installment payments shall be applied first to interest and then to principal.
Eacn such payment of the principal and interest on the Bond shall be made by
the Company on behalf of the City as provided in the Loan Agreement to the
Registered Owner or, if a Trustee is appointed hereunder, to the Trustee.
Each payment of interest or principal and interest shall be evidenced by a
notation on the grid printed on the Bond.
B. Upon a Determination of Taxability, the interest rate on the Bond shall be
autanatically adjusted as provided in Section 4 of the Bond.
3.04. Execution of Bond; Signatures. The Bond shall be executed on behalf of
the City by the manual signatures of the Mayor and City Manager and shall be
attested by the manual signature of the City Clerk- Treasurer and the seal of
the City may be need not be impressed thereon.
3.05. Registration and exchange of Bond; Persons Treated as Registered
Owners. A. The City shall cause books for the registration and transfer of
the Bond as provided in this Resolution to be kept by it, or by a Trustee who
may hereinafter be appointed as Bond registrar of the City for the Bond. The
Bond may be transferred only upon an assignement duly executed by the
Registered Owner or his attorney duly authorized in writing in such form as
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shall be satisfactory to the City or the Trustee, such transfer to be made on
such books by the City or the Trustee. The principal of and interest on the
Bond shall be payanle only to or upon the order of the Registered Onwer or his
legal representative. Upon surrender for transfer of the Bond at the
principal office of the City or the Trustee, duly endorsed for transfer or
accompanied by an assignment duly executed by the Registered Owner or his
attorney duly authorized in writing, and upon satisfaction of the requirements
of subsection B of this Section 3.05, the City shall execute and deliver in
the name of the trasferee or transferees a new Bond in the principal amount
equal to the oustanding principal balance of the Bond surrendered.
' The person in whose name the Bond shall be registered shall be deemed to be
the absolute owner thereof for all purposes, and payment of either principal
or interest on the Bond shall be made only to or upon the written order of the
Registered Owner or his legal representative, but such registration may be
change❑ as hereinabove provided. All such payments shall be valid and
effectual to satisfy and discharge the liability upon such Bond to the extent
of the sum or suns paid.
The City or the Trustee shall require the payment by any Registered Owner
requesting exchange or transfer of any tax or other governmental charge
required to be paid with respect to such exchange or transfer.
B. The Bond may be transferred only as a whole, and only with the consent of
the City to such transfer, provided, that such consent shall not be required
for any transfer to any subsidiary of the Registered Owner, any transfer
arising out of any merger or consolidation of the Registered Owner or by
operation of law, any transfer to a trustee in bankruptcy of the Registered
Owner, or any transfer in connection with a sale to any institutional
investor, provided that such institutional investor shall execute and deliver
to the City a written agreement to be bound by the restrictions on transfer
set forth in this Section 3.05 B. The Registered Owner who wishes to transfer
the Bond shall furnish to the City and the Company an opinion of counsel
satisfactory to the City and the Company that such proposed transfer will not
constitute or contribute to a violation of the registration requirements of
' the Securities Act of 1933, as amended, or any applicable state securities or
blue sky laws.
3.06. Lost, Stolen, Destroyed or Mutilated Bond. In the event that the Bond
is lost, stolen, destroyed, or upon surrender and cancellation of the Bond if
mutilated, (i) the City shall execute and deliver a new Bond in the principal
amount equal to the oustanding principal balance of the lost, stolen,
destroyed or mutilated Bond and of the same date and maturity, or (ii) if the
Bond shall have matured or have been called for redemption, in lieu of
executing and delivering the new Bonds as aforesaid, the City may pay such
Bond. The applicant for any such new Bond may be required to pay all expenses
and charges of the City and of the Trustee in conection therewith, if any, and
to furnish indemnity to the City, the City and the Trustee with respect
thereto.
3.07. Delivery of the Bond; Pledge of Loan Payments by the City. The City
shall execute and deliver the Bond to the Purchaser and deposit the proceeds
of sale thereof with the Depository upon receipt by the City of the following
documents:
(a) a fully executed copy or counterpart of the Bond Purchase Agreement
and all instruments, documents, certificates and opinions required to be
delivered pursuant to the terms thereof;
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(b) a fully executed copy or counterpart of the Loan Agreement and all
instruments, documents and certificates required to be delivered pursuant
to the terms thereof;
(c) a certificate signed by the Purchaser setting forth the then current
Prime Rate in effect;
(d) an executed copy or counterpart of the Depository Agreement; and
(e) an executed copy of the final approving legal opinion of Bond Counsel
as to the validity and tax exempt status of the Bond.
Upon the execution and delivery of the Bond, the City shall pledge the Loan
Payments and other receipts and revenues derived pursuant to the Loan
Agreement by assigning and pledging to the Purchaser for security purposes the
City's right, title and interest in and to (i) the Loan Agreement (except for
the City's rights under Sections 3.06, 6.01, 7.07 and 7.08 thereof, which will
not be assigned and pledged), and (ii) the Security Agreement.
ARTICLE IV
Disposition of Proceeds of the Bonds
Construction Fund
4.01. Source of Payment of the Bond. The Bond and all payments by the City
thereunder are not general obligations of the City but are limited, special
obligations of the City payable solely from the Loan Payments and other
revenues and receipts derived under the Loan Agreement and the Security
Agreement.
4.02. Disposition of Proceeds from the Sale of the Bond. The proceeds
received by the City from the sale of the Bond to the Purchaser shall be
deposited in the Construction Fund established pursuant to Section 4.03
hereof.
4.03. Construction Fund; Disbursements. There is hereby created and
established with the Depository a special fund designated the "City of
Fridley, Minnesota, (Longview Fibre Company Project) Construction Fund" (the
"Construction Fund ") . Interest and other income received on investments of
money in the Construction Fund shall be retained in the Construction Fund.
Such amounts shall be expended to pay the Cost of the Project in accordance
with the provisions of Sections 1.05 and 4.01 of the Loan Agreement. The
Depository is hereby authorized and directed to issue its checks drawn on the
Construction Fund for each payment in accordance with Section 4 of the
Depository Agreement.
Until the Project shall have been acquired, constructed and installed and a
certificate of completion of the Project filed as provided in Section 4.01(d)
of the Loan Agreement, the Depository shall, on the written request of either
the Company or the City, file with the Company and the City on a quarterly
basis a statement of income and disbursements with respect to the Construction
Fund.
4.04. Construction of the Project. The completion of the acquisition,
construction and installation of the Project and payment of the full Cost of
the Project shall be evidenced by the filing with the City, the Registered
Owner and the Depository of the certificate required by Section 4.01 of the
Loan Agreement. Any balance remaining in the Construction Fund shall be
applied as provided in the Section 6 of the Depository Agreement.
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Notwithstanding any other provisions of this Resolution or of the Loan
Agreement, any money to be applied against the principal of the Bond pursuant
to the preceding sentence shall not be invested at an interest rate in excess
of the yield on the Bond as determined in accordance with Section 103(c) of
the Code.
4.05. Repayment to the Company From the Construction Fund. Any amounts
remaining in the Construction Fund or otherwise held by the Depository
pursuant to the terms hereof or the Depository Agreement after payment in full
of the Bond (or after making provision for such payment) , the fees and
expenses of the Depository and the Trustee, the Administration Expenses, and
all other amounts required to be paid hereunder and under the Loan Agreement
and the Indemnification and Compensation Agreement, shall be paid to the
Company upon the expiration or sooner termination of the Loan Agreement.
4.06. Maintenance of Books and Records. The Depository shall keep and
maintain adequate records pertaining to the Construction Fund established
hereunder and all payments therefrom which shall be open to instpection by the
City, the Registered Owner and the Company or their duly authorized agents
during the normal business hours of the Depository.
ARTICLE V
Redemption of Bond Prior to Maturity
5.01. Redemption of the Bond. The Bond is redeemable by the City, at the
direction of the Company, in the manner and on the terms set forth in the
Bond. In addition, the Company may be required to prepay the Loan prior to
its stated maturity under certain conditions set forth in full in the Bond.
ARTICLE VI
Investments
6.01. Investment of Construction Fund. Any money held as part of the
Construction Fund shall be invested or reinvested by the Depository in
Permitted Investments pursuant to the written direction of the Authorized
Company Representative, or the oral instructions of the Authorized Company
Representative promptly confirmed in writing by such person (upon whom the
Depository is entitled to rely) . All investments either shall be subject to
redemption at any time at a fixed value at the option of the Depository, or
shall mature not later than the business day prior to the date on which the
proceeds are expected to be expended. For the purposes of any investment or
reinvestment under this Section, investments shall be deemed to mature at the
earliest date on which the obligor (or purchaser, in the case of a repurchase
agreement) is, on demand, obligated to pay a fixed sum in discharge of the
whole of such obligation.
6.02. Sate of Investments. The Depository shall sell and reduce to cash a
sufficient portion of such investments whenever the cash balance in the
Construction Fund is insufficient for the purposes of such fund.
ARTICLE VII
Default Provisions and Remedies of Registered Owners
7.01. Events of Default and Remedies. The events of default specified in the
Bond, in the Loan Agreement and in the Security Agreement and the remedies
specified therefor are hereby incorporated within this Resolution and
approved.
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ARTICLE VIII
Conditions for Delivery of Bond
Conditions as to Subsequent Sale of Bond
8.01. Stipulations and Agreements. Notwithstanding anything to the contrary
herein contained, the Bond shall not be delivered to the Purchaser unless and
until the Purchaser waives any "due diligence" requirement on the part of the
City Council of the City, and the Purchaser agrees to rely soley on statements
and repesentations of the Company and its own investigation of the facts and
circumstances relating to the purchase of the Bond.
8.02. Appointment of Trustee. Prior to any sale, conveyance or transfer of
all or any portion of the Bond to any sebsequent Registered Owner, an upon
payment of its costs and fees by the Registered Owner, the City may, in its
sole discretion, adopt a supplemental Resolution appointing as Trustee a bank
or trust company qualified to act as a trustee under the Act and prescribing
the rights, duties and obligations of said Trustee. Any entity acting as
Trustee hereunder shall not be liable for actions taken by it hereunder in
good faith, absent its own negligence or willful misconduct.
8.03. Separate Trustee. At any time for the purpose of exercising any
remedies upon an Event of Default granted in this Resolution, the Loan
Agreement or the Security Agrement, the City and the Registered Owner shall
have power, at the sole cost and expense of the Company, to appoint an
additional institution or individual as Trustee, and upon the request of the
Registered Owner, the City shall for such purpose join with the Registered
Owner in the execution, delivery and performance of all instruments and
agreements necessary or proper to appoint such institution or individual to
act as trustee, and to vest in such person or institution acting in such
capacity such rights, powers, duties, trusts or obligations as the City and
the Registered Owner may consider necessary or desirable.
If the City shall not have made such appointment within fifteen (15) days
after the receipt by it of a request to do so, or in case an Event of Default
shall have occurred and be continuing, the Registered Owner alone shall have
the power to make such appointment.
ARTICLE IX
Supplemental Resolutions
9.01. Resolution to Constitute Agreement. Subject to the rights of the
Company under Sections 9.02 and 9.03(b) hereof, this Resolution shall
constitute an agreement between the City and the Registered owner and shall
not be modified, amended or rescinded so long as any portion of the Bond
remains outstanding, except as otherwise provided herein.
9.02. Supplemental Resolutions Not Requiring Consent of Registered Owner.
The City may with the consent of the Company, and with notice to the
Registered Owner, adopt a resolution or resolutions supplemental to this
Resolution and shall not be inconsistent with the terms and provisions hereof
nor be materially adverse to the Registered Owner of the Bond for any one or
more of the following purposes:
A. to cure any ambiguity or formal defect or omission in this
Resolution; or
B. for the purposes specified in Article VIII hereof.
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9.03. Supplemental Resolutions Requiring Consent of Registered owner and
Company. A. The Registered Owner shall have the right from time to time,
anything contained in this Resolution to the contrary notwithstanding, to
consent to and approve the adoption by the City of such resolution or
resolutions supplemental hereto as shall be deemed necessary and desirable by
the City for the purpose of modifying, altering, amending, adding to or
rescinding, in any particular, any of the terms or provisions contained herein
or in any supplemental resolution; provided, however, that nothing is this
Section contained shall permit, or be construed as permitting (i) an extension
of the stated maturity or reduction in the principal amount of the Bond, or a
' reduction in the rate or extension of the time of payment of interest on the
Bond, without the consent of the City and the Registered owner; or (ii) the
creation of any interest in the Loan Payments or other moneys or amounts
derived from the Loan Agreement, the Security Agreement or the Assignment,
prior to or on a parity with the interest of the Registered Omer; or (iii) a
reduction in the aggregate principal amount of the Bond without the consent of
the Registered Owner.
B. The City shall cause notice of the proposed adoption of any such
supplemental resolution to be mailed to the Registered owner and to the
Company at least twenty (20) days prior to the proposed date of adoption of
any such supplemental resolution. No such supplemental resolution which would
affect the rights of the Company shall be effective without the Company's
having consented thereto. The Registered owner shall be deemed to have
consented to the adoption of any such supplemental resolution if the City does
not receive a letter of protest or objection thereto signed by or on behalf of
the Registered Owner on or before the twentieth (20th) day after the mailing
of said notice and a copy of the proposed supplemental resolution.
ARTICLE X
Amendements to the Loan Agreement
10.01. Amendments Requiring Consent of Registered owner. The City or the
Trustee, if any, shall not consent to any amendment, change or modification of
the Loan Agreement without notice to and the consent of the Registered owner
at the time given and procured in the same fashion as in Section 9.03 of this
Resolution providing for supplemental resolutions.
ARTICLE XI
Approval and Execution of Documents
Effectiveness of Resolution
11.01. Approval. The following documents (collectively referred to in this
Article as the "Loan Documents ") as presented to the City Council on this
date, are hereby in all respects authorized, approved and confirmed:
A. the Bond Purcnase Agreement;
B. the Idemnification and Compensation Agreement;
C. the Loan Agreement;
D. the Security Agreement;
E. the Assignment;
F. the Depository Agreement; and
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G. the Bond.
Pursuant to the Assignment, all right, title and interest in and to the Loan
Agreement and the Security Agreement shall be assigned to the Purchaser,
except for certain rights to indemnification and compensation as more fully
set forth in the Loan Agreement which rights are hereby specifically retained.
The Registered Owner is hereby authorized to exercise all rights granted to
the City under the Loan Documents, except for the rights of the City under the
Indemnification and Compensation Agreement and under Sections 3.06, 6.01, 7.07
and 7.08 of the Loan Agreement.
' The Loan Documents shall be in substantially the form as presented to this
meeting with such necessary and appropriate variations, omissions and
insertions as approved, permitted or required by the officer of the City
executing said Loan Documents, provided, that such changes shall be within the
scope of the transactions authorized by the Act. Such execution shall be
conclusive evidence of the due execution, on behalf of the City, of such Loan
Documents, which shall thereupon become binding upon the City in accordance
with their terms as authorized by the Act.
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11.02. Execution. The Mayor, the City Manager, and Clerk— Treasurer of the
City are hereby authorized to execute and deliver for and on behalf of the
City the Bond and the other Loan Documents in the fashion and within the scope
set forth in the proceding Section, as well as any additional certificates,
documents or other papers in connection therewith and to perform all other
acts as they deem necessary or appropriate to implement and carry out the
matters herein authorized.
11.03. Effectiveness of Resolution; Repealer. This Resolution shall be in
full force and effect from and after its adoption by the City Council of the
City, all as provided by law. All resolutions or orders, or parts thereof,
which oonflict with the provisions of this Resolutions are hereby rescinded to
the extent of such conflict.
ARTICLE XII
Miscellaneous
12.01. Consents and Other Instruments of Registered Owner. Any consent,
request, direction, approval, waiver, objection, appointment or other
instrument required by this Resolution to be signed and executed by the
Registered Owner may be signed and executed in any number of concurrent
writings of similar tenor and may be signed or executed by such Registered
Owner in person or by agent duly appointed in writing. Proof of the execution
of any such instrument, if made in the following manner, shall be sufficient
for any of the purposes of this Resolution, and shall be conclusive in favor
of the City with regard to any action taken under such instrument, namely:
A. The fact and date of the execution by any person of any such instrument
may be proved by the affidavit of a witness to such execution or by the
certificate of any notary public or other office of any jurisdiction,
authorized by the laws thereof to take acknowledgements of deeds, certifying
that the person signing such instrument acknowledged to him the execution
thereof. When such execution is by an officer of a corporation or association
or a member of a partnership on behalf of such corporation, association or
partnership, such affidavit or certificate shall also constitute sufficient
proof of his authority.
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B. Any request, consent or vote of the Registered Owner shall bind every
future Registered Owner of the same Bond and the Registered Owner of every
Bond issued in exchange therefor or in lieu thereof, in respect of anything
done or permitted to be done by the City in pursuance of such request, consent
or vote.
12.02. Limitation of Rights. With the exception of rights herein expressly
conferred, nothing expressed or to be implied from this Resolution or the Bond
is intended or shall be construed to give to any person other than the City,
the Company, the Depository and the Registered Owner any legal or equitable
right, remedy, or claim under or in respect to this Resolution or any
covenants, conditions and provisions hereof.
12.03. Severability. If any provision of this Resolution shall be held or
deemed to be, or shall in fact be, inoperative or unenforceable as applied in
any particular case in any jurisdication or jurisdications or in all
jurisdictions, or in all cases because it conflicts with any other provision
or provisons hereof or any constitution, statute, rule of law or public
policy, or for any other reason, such circumstances shall not have the effect
of rendering the provision in question inoperative or unenforceable in any
other case or circumstances, or of rendering any other provision or provisions
herein contained invalid, inoperative or unenforceable to any extent whatever.
The invalidity of any one or more phrases, sentences, clauses or sections of
this Resolution shall not affect the remaining portions of this Resolution, or
any part thereof.
12.04. Notices. All notices, certificates or other communications hereunder
shall be sufficiently given and shall be deemed given when mailed by certified
mail, return receipt requested, postage prepaid, and addressed as provided in
the Loan Agreement.
PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF FRIDLEY THIS 20TH DAY OF
AUGUST, 1984.
ATTEST:
L 'k"�
SIDNEY Y. IDIDW - CITY CLERK
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