85-7122Rof
RESOLUTION N0. 7122
RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF
$400,000 COMMERCIAL DEVELOPMENT REVENUE NOTE OF 1985
(ORECR PLAZA PRQJECT)
PURSUANT TO MZN~TESOTA STATUTES, CHAPTER 474
WHEREAS, the City of Richfield (City) is authorized by the Minnesota
Municipal Industrial Development _Act, as amended, (Act) to issue its
revenue bonds and to make secured or unsecured loans to finance the acqui-
sition of real property and the acquisition or construction of buildings
aad improvements on such real property aad the installation of machinery
aad equipment of any and aII kinds and any other personal proper-ties deemed
necessary in connection with a project, as defined in the Act; and
WHEREAS, the City has made the necessary arrangements-with Michael C.
Oreck and Susan R. Oreck, husband and wife residing in the State of
Minnesota, (Borrowers), for the acquisition, construction, and rehabilita-
tion by the Borrowers of a commercial facility (Project), which will be of
tike character contemplated by and.will accomplish the purposes provided by
the Act; and
WHEREAS, it has been determined that a note in the principal•amount of
$400,000 should be issued, sold and delivered to provide proceeds for a
Loan to be made to the Borrowers to pay a portion of the cost of the
Project; and
NOW, THEREFORE, BE IT RESOLVED By the Citq Council of the City of
Richfield, Minnesota, as follows:.
Section 1. Definition, Exhibits and General Provisions.
1.01. .Definitions. Zn this Resolution the following terms have the
following. respective meanings unless the context hereof clearly requires
o herwise:
I.02. Art: the Minnesota .Municipal Industrial Development Act,
Minnesota Statutes, Chapter 474, as amended;
I.03. Note Register: the register maintained by the City pursuant to
Section 4.02 hereof;
1.04. Citq: the City of Richfield, Minnesota, its successors and
assigns;
1.05. Construction Loaa As~reement: the Construction Loan Agreement
among Bank, Citq, Borrowers and Title Services, Znc.;
i.06. Holder: the Registered Holder of the Note;
1.07. Loan Agreement: the Loan Agreement between the City and the
Borrowers aad anp amendments or supplements thereto;
I.09. Mort a e: that certain Mortgage, Security Agreement and
Fixture Financing Statement by the~Borrowers to the Bank;
1.10. Note: the Commercial Development Revenue Note of 1985 (Oreck
Plaza Project) in the aggregate principal amount of $400,000, to be issued
by the City pursuant to this Resolution.
1.11. Payment i?ate; a date on which an installment of interest or o
principal aad interest is due on the Note;
1.12. P2edge_Agreement~ the Pledge Agreement by which the City;°
assigns to Purchaser certaiai of its rights under the Loan Agreement as
security for the Note;
1.13. Purchaser: Pirst National Bank of Minneapolis, Minneapolis,
Minnesota (sometimes eferred~~to as "the Bank");
I.14. resolution: thisResolution, including any amendment there o.
Note.
Section 2.
2.01. Authori~ation.The City is authorized by the Act to issue
revenue bonds aad loan the proceeds thereof to business enterptises to
finance the acquisition, rehabilitation and construction of projects as
defined in the Act, aad to make aII contracts, execute aIT instruments, and
do all things necessary or convenient is the exercise of such authority.
2.02. Preliminary City Approval: Approval b~ the Energy and Economic
Development Auth°rit.Y,• By ra~sol.utioa duly adopted by this Council on
September 9, 1985, the Council gave preliminary approval•to the sale of
revenue bonds and the loan of proceeds to the Borrowers for the
construction of the Project, and authorized the preparation of such
documents as may be agpropriat~ to the Project aad the issuance and sale o
the Note. The Project has received approval from the Minnesota Energy ;aad
Economic Development Authority''on September 25, 1.985..
2.~3. Approval of Documents. Pursuant to the above, there have been
pzepared and presented to this Council copies of the following documents,
all of which are now, or shall be placed on file fa the office of the City
Clerk, and which are approved 'substantially is the form .presented, subject
to such modifications as are. acceptable to the parties and the City Attor-
ney:
(a)• the Loan Agreement;
(b) the Pledge Agreement;
(c) the Construction Loan Agreement;
(d) the \Tote; aad
(e) the Mortgage (not to be executed by the City).
2.04. Form and Authorized Amount. The Note shall be issued substan-
tially is the form set forth is Exhibit A attached to the Loan Agreement,
with such appropriate variation's, omissions and insertions as are permitted
or required by this Resolution, and in accordance with the further~provi-
sions of this Section and Section Three.. The total principal amount of the
Note to be delivered hereunder is expresslq limited to X400,000.
2.05. Execution. The Note may be in typewritten form. and shall be
executed on behalf of the City by the manual signatures of the Mayor and
the City Manager., and shall have the official -seal of the City affixed or
imprinted thereon. In case any officer whose signature appears on the Note
shall cease to be such officer before the delivery of the Note, such signa-
ture shall nevertheless be valid and sufficient for all purposes, the same
as if such officer had .remained in office until delivery.
2.06. Mutilated, Lost and Destroyed Note. In case the Note shall
become mutilated or be destroyed or lost, the City shall, if not then
prohibited by law, cause to be executed and delivered, a new Note of like
amount, number, maturity date and tenor in exchange and substitution for
and upon cancellation of such mutilated hone or in lieu of and in substi-
tution for such Notre destroyed or lost, upon the Holder's paying the
reasonable expenses and charges of the City in connection therewith, and,
in case of a Note destroyed or Lost, its filing with the City evidence of
such Toss or destruction satisfactory to it together with the indemnity
required by Section 475.70 of the Act. If the mutilated, destroyed or lost
Note has already matured or been called for redemption in accordance with
its terms it shall not be necessary to issue a new r?ote prior to payment.
2.07. Redemption. The Note is subject to redemption and grepagment
without premium in whole or in part, the City at the direction of t::e
Borrowers on any Payment Date. The Note may also be prepaid in whole but
not in part at the option of the Borrowers upon certain conditions
involving damage to or destruction of the Project or taking of the Project
by eminent domain. The Note is also further subject to redemption in whole
but not in part by the City at the direction of the Holder upon certain
events specified in Article 5 of the Loan Agreement.
2.08. Cancellation. When the Note has been redeemed or otherwise
paid in full, it shall be cancelled by the City and shall not be reissued.
The Holder shall deliver to the City either the cancelled Note or a certif-
icate of a responsible officer bf the Holder certifying as to the destruc-
tion thereof..
2.09. Registration: Securities Act. The Note has not bees regis-
tered under the Securities Act of 1933, as amended, or under any state
securities laws for initial distribution, and the Note has been sold
initially only to the Bank pursuant to the investment representation of the
Bank as Purchaser.
2.10. Registration of Transfer. The City will cause to be kept at
the office of the City Clerk a Note Register in which, subject to such
reasonable regulations as it may prescribe, the Citq shall provide for the
registration of transfers of ownership of the Note. The Note shall be
transferable only upon the Note Register by the the Registered Holder
thereof in person or by its attorney duly authorized in writing, upon
surrender of the Note together with a written instrument of transfer
satisfactory to the City Clerk and the City Attorney, duly executed by the
Registered Holder or its duly
Citq shall note the date of ~
new registered owner in the
appearing on the Note. Alter:
expense of the registered Hold
principal amount equal to tha
except as to principal amount,
Holder or such transferee as
The City may deem and treat
registered in the Nate Registe
owner thereof, whether or not
overdue,-for the purpose of
principal balance, redemption
The Note shall be initially re
authorized attorney. Upon such transfer the
egistratioa and the name and. address of the
!iote Register and in the registration blank
iatively, the City shall, at the request and
er, issue a new Note in aggregate outstanding
of the note surrendered, and of like tenor
and registered in the name of-the registered
map be designated by the registered. Holder.
the. person in whose name the Note is last
rand by notation on the. Note as the absolute
the principal balance or any part thereof is
receiving payment of or on account of the
price or interest and for all other purposes.
;istered in the name of the Bank.
2.31. Cessation and Continuation of Interest. Interest oa the Note
shall cease on its payment full. If the Dote is not presented for
payment when due, and if funds sufficient to pay the Note shall have been
paid to the Holder, (i) all obligations of the City for payment of the Note
shall forthwith cease and (ii)Ithe Holder of .the Note shall thereafter have
ao rights with respect thereof ''except to receive payment therefor.
Section 3. Authorization'',and Sale: Terms and Conditions of the Note.
3.03. proval of Terms.l The City shall forthwith issue and sell the
Note the principal amount of x',400,000. The Note shall be in substantially
the form set forth in Exhibit A to the Laan Agreement, which terms and
provisions are hereby approved and incorvorated herein.. Principal and
{~tcast shall be payaole 'i,at rirst National Bank of Minneapolis,
Minneapolis, Minnesota 55402.
3.02. Sale of Note. The offer of the Bank to purchase the Note at a
price of the par value thereo'';f in accordance with the terms of the Loan
Agreement is hereby found to be reasonable and is accepted.
3.03. Delivery of the Note. The Note shall be delivered to the. Bank
upon payment of the purchase price, and upon compliance with .all conditions
of Section 3 of the Loan Agreement relating to closing and delivery.
Section. 4. Approvals and Authorization: Limitations of City
Obligation.
4.01.. Authorization: Authentication of Transcript. Upon the execu-
tion of the documents approved in Section 2 hereof, the Mayor and City
Manager are authorized and dir'~ected to ~ - ~ the Note on behalf of the
City and to deliver it to thejBank, and to execute such other certifica-
tions, documents or instructions as map be required by the Loan Agreement,
or as cote counsel or counsel] for the Bank shall require, and all-such
certifications, recitals and representations of the City, including any
heretofore furnished, shall constitute a representation of the City as to
the accuracy of .all- statements contained therein. Upon delivery of the
Note, the procaeds thereof shall be disbursed to the Borrowers pursuant to
the Construction Loan`Agreement. Execution of any instrument or document
by one or more appropriate officers of the City shall constitute, and shall
be deemed the conclusive evidence of, the approval and authorization by the
Citq and the Council of the instrument, or document so executed. In the
event of the absence or disability of the Mayor or City Manager,. such
officers of the City as, in the opinion of the City Attorney, may act ir.
their behalf, shall without further act or authorization of the Council do
all things and execute all instruments and documents required to be done or
executed by such absent or disabled officials.
4.02. Registration Records. The Citq Clerk, as note registrar, shall
keep a note register in which the Citp shall provide. for the registration
of the Note and for transfers of the Note. The principal of and interest
on the Note shall be paid to the Bank for the account of the Holder enti-
tied thereto in Federal or other immediatelq available funds. The City
Clerk is .authorized and directed to deliver a certified copy of this Note
Resolution to the Director of Property Taxation of Hennepin County, togeth-
er with such other information as said officer may require, and to obtain
the certificate as to entrq of the Note on the bond register as required by
the Act and Minnesota Statutes, Section .475.63
4.03. Limitation of the City's Obligations. Notwithstanding anything
contained in the. Note or the Loan Agreement or nay other documents relating
thereto, the Note shall not constitute a debt of the City within the
meaning of any constitutional, statutory, or charter limitation, and shall
not be payable from or charged upon any funds other than the revenue
pledged to the payment thereof, and the Citq shall not be subject to aaq
liability thereon, and no holder of the Note shall ever have the right to
compel anq exercise of the taxing power of the City to pap the Note or t~:Q
interest thereon, or to enforce payment thereof against any property of the
City, and the Note shall not constitute a charge, Lien or encumbrance,
legal or equitable, upon any property of the City. The agreement of the
City to perform the covenants and other provisions contained is the Note
and the Loan Agreement shall be subject at all times to the availability of
revenues furnished by the Company sufficient to pay all. costs of such
performance or the enforcement thereof, and neither the City nor any of its
officials, officers, agents or emplagees shall be subject to any personal
Liability thereon.
4.04. Execution and Deliverq. The Mayor, the Manager, the Clerk and
the City Attorney are authorized and directed to take all actions necessary
to carry out the provisions of this Resolution relating to the execution
and delivery of the Note and the other documents described herein.
Thomas P. Ferber City Clerk