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HomeMy WebLinkAbout75-025 . , , . o . <-.--7 - ~:/U. 7.p:-.q,fJ RESOLUTION AMENDING PRELIMINARY RESOLUTION AND AUTHORIZING EXECUTION OF NEW UNDERWRITING AGREEMENT WHEREAS, (a) The City CouncIl of the City of Arden HII Is adopted on March 31, 1975 a Preliminary Resolution relatIng to the lssuance of approximately S3,000,000 In Industrial Development Revenue Bonds to finance a Project for Cardiac Pacemakers, Inc.; (b) Miller & Schroeder MunicIpals, Inc, has submitted a new Underwriting Agreement pursuant to whIch SI,OOO,OOO In Industrial Revenue Bonds are proposed to be issued under a Loan Agreement with the balance of the costs of the Project financed from private sources. NOW, THEREFORE, BE IT RESOLVED by the City Councl I of the City of Arden Hills, MInnesota, as follows: I. Said Preliminary Resolution Is hereby amended by deleting the ~S3,000,000~ set forth in paragraph I there~ of and Inserting Instead ~SI,OOO,OOO,~ 2. The Mayor and City Clerk are hereby authorIzed and directed to execute on behalf of the City said new Under- writing Agreement, a copy of which is attached hereto as Exhibit A, and to submIt a new application for approval of the Project by the Commissioner of Economic Development consistent with said new UnderwritIng Agreement. Adopted by the City Councl I of the City of Arden Hills, Minnesota this 16th day of June, 1975. Attest: ~~h7b@il/k~ CIty Clerk " .. , 'NORTHWESTERN FINANCIAL CENTER, 7900 XERXES AVENUE SOUTH, MINNEAPOLIS, MINNESOTA 55431 BRA.NCH OFfiCES D) iller & chroeder II Jon._ ,-,I,loon.. 920)1 '911 Ht'$H'I' ..."pnu" SUllo. .10 (7UI4~."5J Ml..,.,uOOII., ",",,,.,ol.l5llo402 1001 NOI1I,....UI.'.. 8...... B\Jlld'l\Q LDI "'''011.$ C'I,tO'"'~ '!lOO'" 1S1' W, thlt Sl....'. Su.te 900 '2131 ..,~.oa' J Ctuuoo. Ilhnc>>t OOGQA. _ 209 50",11'1 L. S..nt St'"." SUlllt '709 .3121 340.'....'" Ne"'" YO.k, Ney. YO'k '{k)O~ S'J.lyWatt Towe' 12121 .:I'~.'983 MUNICIPALS, INC. TEL 612-831-1500 Honorable City Council City of Arden Hills Arden Hills, Minnesota Cardiac Pacemakers, Inc. 1140 Red Fox Road St. Paul, Minnesota 55HZ Gentlemen: You have advised us that it has been proposed the the City of Arden Hills (the "Issuer") issue its Industrial [)::;velopment Revenue Bonds (the "Bonds") under the provisions of Minnesota Statutes, Chapter 474, to finance, together with such additional private financing as may be required, a project (the "Project") consisting generally of the construction of one or more buildings, to be used by Cardiac Pacemakers, Inc. (the "Company") in connection with manufacturing, inclLlding research and development activity. On the basis of information furnished us to date with respect to this Project, we understand that the amount of Bonds required is presently estimated as follows:, Construction Legal Fees and Miscellaneous Underwriting Bond Reserve $ 815,000 35,000 50,000 100,000 $1, 000, 000 We hereby offer to purchase $1,000,000 principal amount of the Bonds of the Issuer Issued to help finance this Project, subject to'the following terms and conditions: I 1. Before or simultaneously with delivery of the Bonds to us, the Issuer shall have entered into an agreement (the" Loan Agreement") with the Company, whereby the Issuer shall lend Bond proceeds to the Company for the purposes set forth therein and the Company shall be obllgated under one or more promissory notes (the "Notes") corresponding to the Bonds In terms of the principal amount, Interest rates and re- demption provision, to pay an amount sufficient to discharge when due the principal and Interest on ~he Bonds. The Loan Agreement will be substantially in the form and tenor customary with respect to slmUar transactions Including, without limitation, the fol- lowing provisions: ----. A. , .. ...~.. , " ~ Miller & -~~hroeder Honorable City Council City of Arden Hills Arden Hills, Minnesota . Cardiac Pacemakers, Inc. 1140 Red Fox Road St. Paul, Minnesota 55112 -2- a) The Company shall agree to acquire, construct and equip the Project substantially In accordance with its plans and specifications; b) The Company shall agree to pay monthly sums in amounts and at all times sufficient to pay fully and promptly the principal, call premium, if any, and interest on the Bonds; c) Earnings from investment of the Bond Reserve and the monthly pay- ments shat! accrue to the benefit of the Company; d) The Company shall agree to ma inta in the Project in good working order and free of liens other than those specifically permitted; e) The Company shall agree to procure and maintain in its name and name of the Issuer, insurance with respect to the Project in amounts and against risks customary with respect to such properties including Title Insurance; , f) The Company shall agree to pay fully and promptly at! taxes, assess- ments and other governmental charges that may become due with respect to the Project; I g) The Company shall have the option to discharge the Bonds and its under- lying obligation under the Notes upon payment of a sum sufficient to pay the Bonds upon their final maturity or earlier 'redemption and shat! be obligated to pay a sum sufficient to discharge the Bonds upon the occurrence of certain events relating to condemnation or destruction of the Projec:t, in the event the Company properly decides not to repair, restore or reconstruct the Project, and also upon the occurrence of certain events rendering the covenants contained in the Loan Agreement impossible of performance, or in the further event that interest on the Bonds becomes taxable due to action or Inaction of the Company; h) The Company shall require all contractors working on the Project to procure payment and performance bonds In the form and amount acceptable to the Issuer and Underwriter; I) The Company sh 11 pay the annual charges of the Trustee and the bank which shall serve as paying agen with respect to the Bonds; J) The Notes shall secured by a second mortgage on the Project. ] __u . I " 'm Miller & '-~~hroeder , Honorable Clty Council Clty of Arden Hills Arden Hills, Minnesota Cardiac Pacemakers, Inc. 1140 Red Fox Road St. Paul, Minnesota 55112 .I. -3- 2. Before or,simultaneo sly with delivery of the Bonds to us, the lssuer shall have authorized the issuance of th Bonds pursuant to a Resolution (the" Resolution") in substantially the form and tenor crstomary with respect to similar transactions. 3. Prior to the delivery bf the Bonds to us, the Company shall have entered Into one or more firm contracts f r construction of the improvements on the Project site substantially in accordance w th the Company's plans and specifications, and shall have secured such additional fina cing as is necessary to ensure payment of the ba lance of the costs of the Project constru tion. In the event that the Bonds issued hereunder, together with all other funds paid nto the Construction Fund at the time of clOSing, are not sufficient for the completion 0 the Project, the Company shall provide additional funds necessary for the completio of the Project. 4. Before or simultaneo sly with the delivery of the Bonds to us, the Issuer shall have entered into a deed of t ust and indenture (the" lndenture"), whereby the Issuer pledges and mortgages its ntire interest in the Project and Loan Agreement and revenues therefrom to a Trustee or the benefit of the Bondholders. The Trustee shall be a national or state bank having trust pow~rs, designated by us and acceptable to the Company. The Indenture shall be in substantia lly the form and tenor customarily used In connection with transactions of a similar nature, including deta ils of the Bonds. 5. The Bonds are to bea interest payable semi-annually at a rate or rates specifled by us. The interest rate will be mutually agreeable to the Underwriter and the Company and will be determin d at the time the Bonds are available for offering to the general public in the States designated by'the Underwriter. Notwithstanding the final rate or rates of interest to borne by the Bonds, the Underwriter reserves the right to reoffer the Bonds to the p blic at prices other than the par value thereof, in- cluding a premium over par or a iscount below par, as the Underwriter, in its sole judgement and discretion, may de m necessary. The term of the Bonds shall be fifteen years. 6. The Bonds shall be s bject to redemption and prepayment In whole or in part In Inverse order of their ser al numbers at the option of the Company beginning 5 years from date of issue, and 0 ' any interest payment date thereafter, at a premium of 102 percent and reducing one-q arter of 1% per annum to 101 In 1984 and thereafter. 1 ........ " m Miller & -Schroeder Honorable City Council City of Arden I-fills Arden -Hills, Minnesota . Cardiac Pacemakers, Inc. 1140 Red Fox Road St. Paul, Minnesota 55112 -4- 7. We will pay for the Bo ds upon their delivery to us if the Bonds are de- livered to us on or before August 15, 1975. If not delivered to us on or before that date, we reserve the right to refuse the Bonds. The B<;mds are to be accompanied by the unqualified approving opinion f Messrs. Briggs and Morgan, P_A., whose opinion shall state in substance that the B nds are valid and binding special obligations of the Issuer under the Loan Agreement and secured also by the Indenture, and stating that interest payabI(! on the Bonds, in he hands of a person not a user of the Project, is exempt from federal income taxe under then existing laws, regulations, rulings and decisions_ You agree to cooperat in obtaining this opinion and will also furnish opinions of your counsel as to you authority to enter into this transaction and as to title to the Project. 8. You agree to cooperat with us, Bond counsel, counsel for the Underwriter and others in the preparation of d uments and proceedings reasonably necessary to the completion of this transaction and the Company shall make available to us such information and documents with r spect to its financial affairs and operations as re- quested. The Company shall pro ide any requested information for use in the Official Statement, including, among othe s, the sections thereof entitled" Fipanc ia I Statements", "Company" and the "Project" _ In connection with the registration of the Bonds for offer- ing to the general public, certain opinions of Company counsel and Company auditors will be required, which opinions he Company agrees to provide at its sole expense_ , 9. Before delivery of the onds to us, appropriate officers of both the Issuer and the Company shall have revie ed the Official Statement prepared to offer the Bonds for sale so ,that they will be prep red upon delivery of the Bonds to us to certify that the Information furnished by them co rained therein as of the date thereof is true and correct and does not contain any untrue s tement or misleading statement of a material fact nor omlt to state any material fa t required to be stated therein or necessary to make the statements therein not mislea ing, and authorizing our use of the Official Statement. 10. Simultaneously with d livery of the Bonds to us, we shall receive the written oplnion of counsel for the Compa y that the Company has duly authorized the execution and delivery of the Loan Agreem nt and Notes; that the obligations assumed by the Com- pany may be and have been validl assumed and do not violate any restrlction imposed upor It by law, charter or other mater al Instrument to which It Is a party, together with such other documents and Inform tlon as shall be reasonably required by Bond counsel and Underwrlter's counsel In ord r to effectuate the transactions herein contemplated. , ' l ., ,--01. , . 'L1J Miller & , -S~hroeder Honorable City Council City of Arden Illlls Arden Hills, Minnesota . Cardiac Pacemakers, Inc. 1140 Red Fox Road St. Paul, Minnesota 55112 -5- 11. I3etween the date here f and the date of delivery of the Bonds to us, there shall not have been any material a verse change in the business, properties, financial position or results of operations 0 the Company, nor ~ha 11 there be pending nor threatened on such date any legal roceedings to which the Issuer or Company is a party and which will have a mater al adverse effect on the transactions contemplated by the Loan Agreement, Resolutio or Indenture, except any such action of which we shall have been advised prior to t e date hereof. 12. Upon delivery of the nds to us, we shall pay to the Issuer, or to the Trustee for the account of the Iss er, the purcha se price of the Bonds plus accrued interest from their date of issue t the date of such deliv~ry. The purchase price to be paid will be 95% of the par valu of the Bonds, provided the Official Statement with respect to this bond offering, req ired to permit sales to individuals if) Minnesota, has been accepted for registration. I not accepted for registration prior to the closing, we may accept and place the Bond at our option, but are not required to do so. The Underwriter shall apply for the registration of the Bonds as soon as practicable after the date hereof and both the Unde writer's and the Company's representatives shall diligently pursue the registration f the Bonds. 13, The Company will pa all expenses in connection with the proposed offering, Including, among others, fees an expenses of Company counsel, fiscal agent, counsel for the Issuer, Bond counsel, Und rwriter's counsel, Blue Sky counsel, Company auditors, Blue Sky fees and Invest ent Ratlng Agency fees, together with all costs and expenses incurred in conjunct on with the preparation and printing of all documents required to .consummate this offe ing, Including the Official Statement. 14. If, prior to the deliIT ry of the Bonds, either the Company or the Under- writer should, for any reason (in luding the inablllty of the Company and the Under- writer to mutually agree upon the interest rates to be borne by the Bonds), other than a willful refusal to proceed, wish to term inate the financing arrangement contemplated 'hereby, either may do so by sub' itting a written notice of withdrawal to the other party and the Issuer. In either such eIT nt, the Company shall be obligated to pay all costs enumerated in paragraph 13 here f (but without limitation as to amount) incurred prior ,to receipt of such written notice. Notwithstanding the foregoing, in the event of a ter- mination by either the Company 0 the Underwriter other than as a result of either the Company's or the Underwrite's willful refusal to proceed, the Company's obligation under thls paragraph w th respect to out-of-pocket expenses Incurred by the UnderWriter in conjunction wi h this financing (including Underwriter's counsel fees, printing expenses, travel expense , postage, telegraph and telephone charges) shall __not exceed the sum of $10,000. -,. I, '. .. -m Miller & -~~hroeder Honorable City Council City of Arden Hills Arden Hills, MinnesoUl . Cardiac Pacemakers, Inc. 1140 Red Fox Road St. Paul, MinnesoUl 55112 15. Interest earned fro excess funds therein not required benefit of the Company. I -6- the investment of the Construction Fund and anv .or completion of the Project shall accrue to the 16. The Company shall t the extent permitted by law have the right at its option and expense to proceed und r and pursuant to the terms of MSA 474_ 03(10) to refund the Bonds issued pursuant t and in contemplation of this agreerre nt and the net benefit of such refunding shall accrue to the Company in the form of adjusted lease payments, to coincide with t e schedules agreed to under the terms and conditions of the refunding issue. 17. For purposes hereof, the terms "Bolid Reserve", "Construction Fund" and "Bond Fund" shall be such as are efined and referred to in the Loan Agreement and Indenture to be executed and delivered in connection with this Bond offering. 18. This Agreement sha I supercede the previous Underwriting Agreement dated March 26, 1975 between the parties hereto relating to the same subject matters. If the foregoing proposal is acceptable to both of you, plea,se indicate by en- dorsing a copy hereof and returni g the copy so endorsed to us. Until and unless accepted by both of you, this prop sal may be withdrawn by us at any time by a tele- gram addressed to both of you_ I this proposa 1 is accepted but for any reason Bonds are not issued and delivered as h~rein contemplated, the Issuer shall be reimbursed by the Company for all expenses t eretofore incurred by the Issuer in connection with th~ proposed Project. I Dlted: ~'--I It, /'17) Very truly yours, MILLER & SCHROEDER MUNICIPA LS, INC. By ~ 0)' {?~J--ft:? '1 1 ... '. . II Miller & -S~hroeder Honorable City Council City of Arden Hills Arden Hills, Minnesota . Cardiac Pacemakers, Inc_ 1140 Red Fox Road St. Paul, Minnesota 55112 -7 - 9- Accepted by the City of Arden I-Hils, AAA fl_ , 1975. Minnesota this ~-;;;.Lday of ^'~ (!Jl~ By Accepted by Cardiac Pacemakers, Inc_ this 1(, ~ day of V fA' W " 1975. Attest: ~ .~S"'~~ . It . ~~ .J.:,~J':":". ~~, ,~- ~~ 111 ~Jf . ;:;~~ , - 1