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
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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
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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
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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.