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HomeMy Public PortalAbout1987-122RESOLUTION NO. g7 4,7, A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF INDUSTRIAL DEVELOPMENT REVENUE BONDS PURSUANT TO MINNESOTA STATUTES, SECTIONS 469.152 to 469.165, TO PROVIDE FUNDS FOR INDUSTRIAL DEVELOPMENT PROJECT ON BEHALF OF TEMROC METALS, INC. BE IT RESOLVED by the City Council of the City of Medina, Minnesota (the "City"), as follows: 1. Authority. The City is, by the Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.152 to 469.165, as amended (the "Act"), authorized to issue and sell its revenue bonds for the purpose of financing the cost of authorized projects and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act. 2. Authorization of Project: Documents Presented. The Borrower described below has proposed to this Council that the City issue and sell its $3,500,000 City of Medina Industrial Development Revenue Bonds (Temroc Metals, Inc Project), Series 1987, in substantially the form set forth in the hereinafter -mentioned Trust Indenture (the "Bonds") pursuant to the Act and loan the proceeds thereof to Temroc Metals, Inc. a corporation organized and existing under the laws of Minnesota (the "Borrower"), to finance the costs of acquiring, constructing and equipping a manufacturing facility in the City, to be located on Highway 55 at Willow Drive in the City, together with necessary site improvements (the "Project"), to be owned and operated by the Borrower. Forms of the following documents relating to the Bonds and the Project have been submitted to the City Council and are now on file in the office of the City Clerk -Treasurer: (a) Loan Agreement (the "Loan Agreement") dated as of November 1, 1987, between the City and the Borrower, whereby the City agrees to make a loan to the Borrower of the gross proceeds of sale of the Bonds and the Borrower agrees to complete the Project and to pay amounts in repayment of the loan sufficient to provide for the full and prompt payment of the principal of, premium, if any, and interest on the Bonds; and (b) Trust Indenture (the "Trust Indenture") dated as of November 1, 1987, between the City and Norwest Bank Minneapolis, National Association, as Trustee, pledging revenues, including those to be derived from the Loan Agreement, as security for the Bonds, and setting forth proposed recitals, covenants and agreements relating thereto; (c) Combination Mortgage, Security Agreement and Fixture Financing Statement (the "Mortgage"), dated as of November 1, 1987, from the Borrower to the Trustee, by which the Borrower grants to the Trustee a mortgage lien on and security interest in the Mortgaged Property, as defined therein, as further security for the payment of the Bonds (this document not to be executed by the City); and (d) Bond Purchase Agreement (the "Bond Purchase Agreement"), among Cronin & Co., Inc. (the "Underwriter"), the Borrower and the City, providing for the purchase of the Bonds from the City by the Underwriter and setting the terms and conditions of purchase; and (e) Remarketing Agreement (the "Remarketing Agreement") dated as of November 1, 1987, between the Borrower and Cronin & Co., Inc., as Remarketing Agent, providing for the remarketing of the Bonds on the Mandatory Purchase Date, as further provided therein (this document not to be executed by the City); and (f) Preliminary Offering Statement dated August 31, 1987, and form of final Offering Statement, including the Appendices thereto (together the "Offering Statement"), describing the offering of the Bonds, and certain terms and provisions of the foregoing documents. 3. Findings. It is hereby found, determined and declared that: (a) The Project, based upon information furnished by the Borrower, constitutes a project authorized by and described in Section 469.153, Subdivision 2a, of the Act. (b) The purpose of the Project is and the effect thereof will be to promote the public welfare by: preventing the emergence of blighted and marginal lands and areas of chronic unemployment; preventing economic deterioration; the development of sound industry and commerce to use the available resources of community, in order to retain the benefit of the community's existing 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 needed as a base for providing governmental services and facilities; and increasing the tax base of the City and the county and school district in which the -2- Project is located. In the judgment of the City Council, based upon the representations of the Borrower, the Project would not be undertaken by the Borrower but for the availability of industrial development bond financing. (c) The Project has been approved by the Department of Energy and Economic Development of the State of Minnesota as tending to further the purposes and policies of the Act. (d) There is no litigation pending or, to the best of its knowledge, threatened against the City relating to the Project or to the bonds, the Loan Agreement, the Bond Purchase Agreement or the Trust Indenture or questioning the organization, powers or authority of the City. (e) The execution, delivery and performance of the City's obligations under the Bonds, the Trust Indenture, the Bond Purchase Agreement and the Loan Agreement do not and will not violate any charter provision or any order of any court or other agency of government of which the City is aware or in which the City is a party, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its property is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. (f) It is desirable that the Bonds be issued by the City upon the terms set forth in the Trust Indenture, under the provisions of which the City's interest in the Loan Agreement will be pledged to the Trustee as security for the payment of principal of, premium, if any, and interest on the Bonds. (g) The Loan Agreement provides for payments by the Borrower to the Trustee for the account of the City of such amounts as will be sufficient to pay the principal of, premium, if any, and interest on the Bonds when due. The Loan Agreement obligates the Borrower to provide for the payment of operation and maintenance expenses, including adequate insurance, taxes and special assessments. No reserve fund has been deemed necessary to be established in connection with the issuance of the Bonds. (h) Under the provisions of the Act, and as provided in the Loan Agreement and Trust Indenture, the Bonds are not to be payable from nor charged upon any funds other than amounts payable pursuant to the Loan Agreement and moneys in the funds and accounts held by the Trustee which -3- are pledged to the payment thereof; the City is not subject to any liability thereon; no holders of the Bonds shall ever have the right to compel the exercise of the taxing power of the City to pay any of the bonds or the interest thereon, nor to enforce payment thereof against any property of the City; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and each Bond issued under the Trust Indenture shall recite that the Bond, including interest thereon, shall not constitute or give rise to a charge against the general credit or taxing powers of the City. 4. Approval and Execution of Documents. The forms of Loan Agreement, Trust Indenture, Bond Purchase Agreement, Mortgage and Remarketing Agreement, referred to in paragraph 2, are approved. The Loan Agreement and Trust Indenture shall be executed in the name and on behalf of the City by the Mayor and the City Clerk -Treasurer, 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, and then sall be delivered to the Trustee. The Bond Purchase Agreement shall be signed as provided therein. Copies of all documents shall be delivered and filed as provided therein. 5. Approval, Execution and Delivery of Bonds. The City shall proceed forthwith to issue the Bonds, to be dated November 1, 1987, in the aggregate principal amount of $3,500,00, in the form and upon the terms set forth in the Trust Indenture, which terms are for this purpose incorporated in this resolution and made a part hereof. The Underwriter has agreed pursuant to the provisions of the Bond Purchase Agreement to purchase the Bonds at the purchase price set forth in the Bond Purchase Agreement, and said purchase price is hereby found to be favorable and is hereby accepted. The Mayor and City Clerk -Treasurer are authorized and directed to prepare and execute the Bonds as prescribed in the Trust Indenture and to deliver them to the Trustee, together with a certified copy of this Resolution and the other documents required by Section 2.08 of the Trust Indenture, for authentication, registration and delivery to the Underwriter. As provided in the Trust Indenture, each Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 6. Offering Statement. The City hereby consents to the circulation by the Underwriter of the Offering Statement in offering the Bonds for sale; provided, however, that the City has not participated in the preparation of the Offering -4- Statement or independently verified the information in the Offering Statement and takes no responsibility for, and makes no representations or warranties as to, the accuracy or completeness of such information. 7. $10 Million Election. The City hereby elects that the $10 million election with respect to the Bonds and certain capital expenditures for the Project, as provided under Section 144(a) of the Internal Revenue Code of 1986, as amended, shall apply to the Bonds and the Project. 8. Certificates, etc. The Mayor, City Clerk -Treasurer, and other officers of the City are authorized and directed to prepare and furnish to bond counsel and the purchaser of the Bonds, when issued, certified copies of all proceedings and records of the City relating to the Bonds, 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 cntrol or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute represesntations of the City as to the truth of all statements contained therein. 9. Authorization. The City Clerk -Treasurer is authorized and directed to deliver a certified copy of this Bond Resolution to the County Auditor, together with such other information as such County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Bonds on his bond register as required by the Act and Section 475.63, Minnesota Statutes.