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City Council Resolution 1984-40RESOLUTION NO. 1984 #40 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF~ MONTICELLO, MINNESOTA ("CITY") AUTHORIZING THE ISSUANCE, SALE AND DELNERY OF THE $475,000 COMMERCIAL DEVELOPMENT REVENUE NOTE (FULFILLMENT SYSTEMS, INC. PROJECT), SERIES 1984 ("NOTE"), WHICH NOTE AND THE INTEREST AND ANY PREMIUM THEREON SHALL BE PAYABLE SOLELY FROM THE REVENUES DERNED FROM THE LOAN AGREEMENT; r APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELNERY OF A DISBURSING AGREEMENT, A LOAN AGREEMENT, AND AN ASSIGNMENT OF LOAN AGREEMENT; APPROVING THE FORM OF A COMBINATION MORTGAGE, SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT AND A GUARANTEE AGREEMENT; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELNERY OF THE NOTE; AND PROVIDING FOR THE SECURITIES, RIGHTS AND REMEDIES OF THE HOLDER OF SAID NOTE WHEREAS, the purpose of the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended (the "Act"), as found and determined by the Legislature of the State of Minnesota, is to promote the welfare of the State of Minnesota by the active attraction, encouragement and develop- ment of economically sound industry and commerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic unemployment, and for this purpose the State of Minnesota has encouraged action by -local governmental units; and WHEREAS, factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in urban and metropolitan areas, the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population, and the need for development and use of land which will provide an adequate tax base to finance these increased costs; and WHEREAS, the City of Monticello, Minnesota (the "City") desires to expand the business and employment opportunities, and the available tax base of the City and to promote the redevelopment of property within the City; and WHEREAS, the City is authorized by the Act to enter into a revenue agreement with any person, firm, or public or private corporation or federal or state governmental person, firm or public or private corporation or federal or state governmental subdivision or agency in such manner that payments required thereby to be made by the contracting party shall be fixed, and revised from time to time as necessary, so as to produce income and revenue sufficient to provide for the due, and the revenue agreement shall also provide that the contracting party shall be required to pay all expenses of the operation and maintenance of the project including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the project and payable during the term of the revenue agreement; and WHEREAS, the Act further authorizes the City to issue revenue bonds, in anticipation of the collection of revenues of a project, to finance, in whole or in part, the cost of acquisition, construction, reconstruction, improvement, betterment, or extension of such project; and WHEREAS, the City has received from Fulfillment Systems, Inc., a Minnesota corporation (the "Developer"), a proposal that the City finance a project for purposes consistent with the Act, said project to consist of the construction of a building expansion for use as an office and commercial facility (the "Project") in the City; and WHEREAS, by Resolution No. 1983 #86 adopted on November 14, 1983 (the "Preliminary Resolution"), the City determined that, on the basis of information provided to it by the Developer and others, the effect of the Project, if undertaken, would be to encourage the development of economically sound commerce in the City, increase the assessed value of property within the City, increase current employment opportunities for residents of the City and surrounding areas, and to facilitate the redevelopment of property within the City, all to the benefit of the residents and taxpayers of the City; and WHEREAS, by the Preliminary Resolution, the City approved the proposal of the Developer that the City undertake to provide financing for the Project and gave preliminary approval of the Project, including the issuance, sale and delivery of the $475,000 Commercial Development Revenue Note (Fulfullment Systems, Inc.) Series 1984 (the "Note"), subject to final approval by the City; and WHEREAS, the approval of this Project by the Commissioner of the Minnesota Energy and Economic Development Authority has been obtained and such approval is a requirement under the Act before the Note can be issued; and WHEREAS, the City proposes to finance the undertaking of said Project under the Act by the issuance of the Note of the City under this resolution as hereinafter defined; and WHEREAS, the Note issued under this resolution will be secured by a mortgage and lien on said Project and a pledge and assignment of the Loan Agreement, as hereinafter defined, and of the revenues derived by the City from the Loan Agreement and said Note and the interest on said Note shall be payable solely from the revenue pledged therefor and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation nor shall constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and shall not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City other than the City's interest in said Project. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MONTICELLO: 1. That the City Council of the City finds, determines and declares that the construction of the Project within the City will expand the business and employment opportunities within the City, will expand the tax base of the City, will promote the redevelopment of property within the City, and will generally aid and assist the City, the School District, and the County of Wright. 2. That for the purpose of financing the acquisition, construction and installation of the Project, there is hereby authorized the issuance, sale and delivery of the Note. The Note shall bear interest at the rate, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, shall be in such form, and shall have such other details and provisions as are prescribed in Exhibit A attached hereto. 3. That the Note shall be a revenue obligation of the City the proceeds of which shall be disbursed pursuant to the Disbursing Agreement, dated as of the date of the Note, and executed by Wright County State Bank of as lender and disbursing agent, (the "Lender"), the Developer, and the City (the "Disbursing Agreement"), and the principal, premium, if any, and interest on which shall be payable solely from the revenues derived from the Loan Agreement, dated as of the date of the Note, and executed by the City and the Developer (the "Loan Agreement") The Mayor of the City (the "Mayor") and the City Administrator of the City (the "City Administrator") are hereby authorized and directed to execute and deliver the Note. 4. That the Disbursing Agreement, the Loan Agreement, the Assignment of Loan Agreement, dated as of the date of the Note, and executed by the City, the Lender and the Developer (the "Assignment of Loan Agreement"), all in the form now on file with the City Administrator are hereby approved. The Mayor and City Administrator of the City are hereby authorized and directed to execute and deliver the Disbursing Agreement, Loan Agreement, and the Assignment of Loan Agreement. 5. That the Combination Mortgage Security Agreement and Fixture Financing Statement, dated as of the date of the Note, and executed by the Developer, and the Guarantee Agreement, dated as of the date of the Note and executed by John A. Peach and Trudence K. Peach as guarantors, are hereby approved in the form on file with the City Administrator. 6. That upon approval by the Mayor, and concurrence by the City Attorney, amendments may be made to the aforementioned documents to the extent not inconsistent with this resolution. Such approval and concurrence shall be evidenced by the execution of the aforementioned documents by the City and the delivery of the opinion of the City Attorney. 7. That the Mayor and City Administrator the City are hereby authorized to execute and deliver, on behalf of the City, such other documents as are necessary or appropriate in connection with the issuance, sale, and delivery of 3 the Note, including the No-Arbitrage Certificate, and all other documents and certificates as shall be necessary and appropriate in connection with the issuance, sale and delivery of the Note. 8. That all covenants, stipulations, obligations and agreements of the City contained in this resolution and the aforementioned documents shall be deemed to be the covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the City. Except as otherwise provided in this resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the City by the provisions of this resolution or of the aforementioned documents shall be exercised or performed by the City or by such members of the City Council, or such officers, board, body or agency thereof as may be required by law to exercise such powers and to perform such duties. No covenant, stipulation, obligation or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City Council of the City, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer executing the Note shall be liable personally on the Note or be subject to any personal liability or accountability by reason of the issuance thereof. 9. That except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City or any holder of the Note issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provision hereof, this resolution, the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City and any holder from time to time of the Note issued under the provisions of this resolution . 10. That in case any one or more of the provisions of this resolution, or of the aforementioned documents, or of the Note issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementioned documents, or of the Note, but this resolution, the aforementioned documents, and the Note shall be construed and endorsed as if such illegal or invalid provision had not been contained therein. 11. That the Note, when executed and delivered, shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity of the Note and the regularity of the issuance thereof, and that all acts, conditions and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Note and to the execution of the aforementioned documents to happen, exist and be performed precedent to and in the enactment of this resolution, and precedent to issuance of the Note and precedent to the execution of the aforementioned documents have happened, exist and have been performed as so required by law. 4 12. That the officers of the City, attorneys, engineers and other agents or employees of the City are hereby authorized to do all acts and things required of them by or in connection with this resolution, the aforementioned documents, and the Note for the full, punctual and complete performance of all the terms, covenants and agreements contained in the Note, the aforementioned documents and this resolution. In the event that the Mayor or City Administrator of the City are unable to carry out the execution of any of the documents provided herein, any other member of the City Council of the City or the City Finance Director shall be authorized to act in their capacity and undertake such execution on behalf of the City with full force and effect, which executions shall be valid and binding on the City. 13. That this resolution shall be in full force and effect from and after its passage. Adopted by the City Council of the City of Monticello this day of ~____ , 1984. Attest: City Ad 'nistrator (_-~ Mayor EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA CITY OF MONTICELLO Commercial Development Revenue Note (Fulfillment Systems, Inc., Project) R-1 $475,000 The City of Monticello, Minnesota, a public body corporate and politic, (the "City"), State of Minnesota, for value received, hereby promises to pay to Wright County State Bank, a Minnesota banking corporation (the "Lender"), or its assigns (the Lender and any assigns are hereinafter referred to as the "Holder"), at its designated principal office or such other place as the Holder may designate in writing, but solely from the revenues derived from a Loan Agreement (the "Loan Agreement"), of even date herewith, executed by Fulfillment Systems, Inc., a Minnesota corporation (the "Developer"), and the City providing for a loan of the proceeds from this Note to the Developer, the principal sum of Four Hundred Seventy-Five Thousand Dollars ($475,000), or so much thereof as has been advanced pursuant to the terms of the Disbursing Agreement, as hereinafter defined with interest as hereinafter provided, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America. The principal of and interest on this Note is payable in installments due as follows: (a) Commencing on the fifth day of the month following the delivery of this Note and on the fifth day of each month thereafter until and including the fifth day of the month preceding the Amortization Date (as hereinafter defined), interest accrued on the outstanding principal balance of this Note at the rate equal to the Interest Rate, as hereinafter defined, shall be payable. (b) Commencing on January 5, 1985, (the "Amortization Date") and continuing on the fifth day of each month thereafter until the Final Maturity Date (as hereinafter defined), principal and interest at the Interest Rate shall be payable, in consecutive monthly installments. The amount of each such installment of principal and interest shall be the amount required to fully amortize the principal amount of this Note, based upon a fifteen (15) year amortization schedule beginning on the Amortization Date with substantially equal monthly payments, calculated with interest accruing at the then current Interest Rate. (c) Payment of the entire unpaid principal balance of this Note, together with accrued but unpaid interest thereon, and all other indebtedness due due hereunder shall be payable on January 5, 2000 (the "Final Maturity Date"). If any payment of principal or interest is not paid when due, each and every such delinquent payment, including the entire principal balance and accrued interest in the event of an acceleration of this Note, shall bear interest to the extent permitted by law at the Interest Rate per annum then payable on this Note from its due date until payment. The interest rate payable on this Note (the "Interest Rate") shall be the Prime Interest Rate, as hereinafter defined, minus one percent (1%). The Interest Rate shall be adjusted quarterly on the fifth day of each January, April, July and October to a rate equal to one percent (1%) below the Prime Interest Rate in effect on the first day of each such January, April, July and October; provided that in no event shall the Interest Rate ever be less than ten percent (10%) per annum or greater than sixteen percent (16%) annum. The term "Prime Interest Rate" means the rate of interest from time to time publicly announced by First National Bank of Minneapolis, Minnesota, as its prime rate. In the event that such bank discontinues the practice of publicly announcing its prime rate, the term "Prime Interest Rate" shall mean the rate of interest upon ninety-day unsecured loans to the most responsible corporate, commercial borrowers, with the highest credit rating, in effect at the First National Bank of Minneapolis, Minneapolis, Minnesota, from time to time. In the event that the interest on this Note shall become subject to federal income taxation pursuant to a Determination of Taxability (as hereinafter defined), the Interest Rate on this Note shall be increased, retroactively effective from and after the Date of Taxability (as hereinafter defined) to the Prime Interest Rate plus four percent (4%) per annum, subject to adjustments quarterly as provided above; provided that such rate shall in no event be less than thirteen percent (13%) per annum. The City shall immediately upon demand pay to the Holder and to each prior Holder affected by such Determination of Taxability an amount equal to the amount by which the interest accrued retroactively at such increased rate from the Date of Taxability to the date of payment exceeds the amount of interest actually accrued and paid to the Holder and any such prior Holder during said period. Such obligation of the City shall survive the payment in full of the principal amount of this Note. Thereafter, the unpaid principal balance of the Note shall be payable in substantially equal monthly installments of principal and interest in amounts sufficient to amortize said unpaid principal balance over the remainder of the assumed 15-year amortization period specified in paragraph (b) above, with accrued interest on said unpaid principal balance to be payable with each principal installment, and with a final payment of the entire unpaid principal balance and all interest thereon and all other indebtedness due hereunder to be due on the Final Maturity Date. The Holder shall give notice to the Developer of its receipt of any Notice of Taxability (as hereinafter defined) and permit the Developer to contest, litigate, or appeal the same at its sole expense if a contest, litigation, or appeal is available to the Developer. In the event any such contest, litigation, or appeal is undertaken, the increased interest provided in the preceding paragraph shall, nevertheless, be payable to the Holder. All interest hereon shall be computed on the basis of a year of three hundred sixty (360) days and charged for actual days principal is unpaid. The terms "Determination of Taxability," "Date of Taxability" and "Notice of Taxability" as used herein shall have the meanings ascribed to such terms in the Loan Agreement. The City may prepay the principal of this Note, in whole or in part, at any time, without premium or penalty, upon payment of the principal amount being so prepaid, plus accrued interest hereon to the date of prepayment. After any partial prepayment hereunder, the Holder may elect to adjust the monthly installment payments of principal and interest required of the City under this Note to an amount sufficient to amortize the then unpaid principal blance of this Note, in full, in equal monthly installment payments of principal and interest by the Final Maturity Date, or the Holder may require that no adjustment in the amount of monthly installment payments due hereunder be made after any partial prepayment. This Note is issued under and pursuant to authority granted by the Minnesota Municipal Industrial Development Act, being Minnesota Statutes, Chapter 474, as amended, (the "Act"), for the purpose of providing funds for a project, as defined in Minnesota Statutes, Section 474.02, subdivision 1a, consisting of the acquisition of certain real estate and construction of improvements thereon, and paying necessary expenses incidental thereto, such funds to be loaned by the City to the Developer pursuant to a resolution adopted by the City (the "ftesolution") and the Loan Agreement, thereby assisting activities in the public interest and for the public welfare of the City of Monticello. The proceeds of the Note are being advanced to the Developer pursuant to the terms of a Disbursing Agreement, dated as of the date of the Note, between and among the City, the Developer and the Lender (the "Disbursing Agreement"). This Note is secured by, among other instruments, an Assignment of Loan Agreement, of even date herewith (the "Assignment of Loan Agreement"), from the City to Lender, a Mortgage, of even date herewith from the Developer to the Lender (the "Mortgage") and a Guaranty Agreement, of even date herewith (the "Guarantee") naming John A. Peach and Trudence K. Peach as guarantors. This Note and interest thereon and any penalty, premium, or other indebtedness due hereunder are payable solely from the revenues and proceeds derived from the Loan Agreement and the Mortgage, and do not constitute a debt of the City of Monticello within the meaning of any constitutional, or statutory limitation, are not payable from or a charge upon any funds other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the City of Monticello (other than from proceeds derived from the Loan Agreement), or, to the extent permitted by law, of any of its officers, agents, or employees, and no Holder of this Note shall ever have the right to compel any exercise of the taxing power of the City of Monticello to pay this Note or the interest thereon, or to enforce payment thereof against any property of the City of Monticello (other than proceeds derived from the Loan Agreement), and this Note does not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the City of Monticello (other than proceeds derived from the Loan Agreement), and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds furnished for such purpose in accordance with the Loan Agreement, sufficient to pay all costs of such performance or the enforcement thereof. On the date of issuance, the City will register this Note upon its books. Upon such registration, this Note shall be transferable upon the books of the City, by the Holder hereof in person or by its attorney duly authorized in writing, upon 3 surrender hereof together with a written instrument of transfer satisfactory to the City, duly executed by the Holder or its duly authorized attorney. Upon such transfer the City will note the date of registration and the name and address of the new Holder upon the books of the City and in the registration blank appearing below. The City may deem and treat the person in whose name this Note is last registered upon the books of the City with such registration also noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on account of the principal balance, redemption price, or interest, and for all other purposes, and all such payments so made to the Holder or upon its order shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. All of the agreements, conditions, covenants, provisions, and stipulations contained in the Mortgage, the Resolution, the Loan Agreement and the Assignment of Loan Agreement, or any instrument securing this Note and all of the agreements, conditions, provisions, and stipulations contained in the Disbursing Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. It is agreed that time is of the essence of this Note. If an Event of Default occurs under the Mortgage, the Loan Agreement, or the Disbursing Agreement, or any other instrument securing this Note, then the Holder of this Note may at its right and option declare immediately due and payable, in whole or in part, the principal balance of this Note and interest accrued thereon, and, to the extent permitted by law, the applicable prepayment premium, if any, together with any costs of collection including attorneys' fees incurred by the Holder of this Note in collecting or enforcing payment hereof, whether suit be brought or not, and all other sums due hereunder or under the Mortgage, the Loan Agreement, or Disbursing Agreement, or any instrument securing this Note, subject to the limitations contained therein. The remedies of the Holder of this Note as provided herein, and in the Mortgage, the Loan Agreement, the Disbursing Agreement, or any other instrument securing this Note, shall be cumulative and concurrent and may be pursued singly, successively, or together, and, at the sole discretion of the Holder of this Note, may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof. The Holder of this Note shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder of this Note and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. This Note may not be amended, modified, or changed except only by an instrument in writing signed by the party against whom enforcement of any such amendment, modification, or change is sought. If any term of this Note, or the application thereof to any person or circumstances, shall, to any extent, be invalid or unenforceable, the remainder of this Note, or the application of such term to persons or circumstances other than those to which it is invalid or unenforceable, shall not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest extent permitted by law. 4 1t is intended that this Note is made with reference to and shall be construed as a Minnesota contract and governed by the laws thereof. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts, and things required to exist, happen, and be performed precedent to or in the issuance of this Note do exist, have happened, and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the City of Monticello has caused this Note to be duly executed by its duly authorized officers and its corporate seal affixed all as of the day of , 1984 B ~~ ~- .~' Y Mayor (SEAL) .~ By City Ad inistrator CERTIFICATE OF REGISTRATION It is hereby certified that the undersigned has registered this Note in the name of the Holder, as indicated in the registration blank below, on the books of the City kept for that purpose. Name of Registered Holder Date of Registration Signature of City Official 6