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Res 2009- 67 Approving Sale of Revenue Note Ser. 2009Extract of Minutes of a Meeting of the City Council of the City of Mendota Heights Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Mendota Heights was duly held in the City of Mendota Heights, Minnesota, on Tuesday, August 18, 2009, at 7:00 o'clock P.M. The following members were present: Huber, Krebsbach, Duggan, Schneeman and Vitelli and the following were absent: None its adoption: During said meeting Duggan_ introduced the following resolution and moved RESOLUTION NO. 09-67_ RESOLUTION APPROVING THE ISSUANCE AND SALE OF A RECREATIONAL FACILITIES REVENUE REFUNDING NOTE, SERIES 2009 AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO (SAINT THOMAS ICE ARENA PROJECT) The motion for the adoption of the foregoing resolution was duly seconded by Member Schneeman_, and after fall discussion thereof and upon vote being taken thereon, the following voted in favor thereof All and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. 2389004v1 RESOLUTION APPROVING THE ISSUANCE AND SALE OF A RECREATIONAL FACILITIES REVENUE REFUNDING NOTE, SERIES 2009 AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO (SAINT THOMAS ICE ARENA PROJECT) (a) The purpose of Minnesota Statutes, Chapter 469.152 to 469.1651 (the "Act "), as found and determined by the legislature, is to promote the welfare of the state by the active attraction and encouragement and development of economically sound industry and commerce to prevent so far as possible the emergence of blighted and marginal lands and areas of chronic unemployment; (b) Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and 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 of land use which will provide an adequate tax base to finance these increased costs and the need for access to education and employment opportunities for such population; (c) The City of Mendota Heights, Minnesota (the "City ") issued its $2,900,000 Recreational School Facilities Revenue Note, Series 2003 (Saint Thomas Academy Ice Arena Project) (the "Prior Note ") to assist in financing the acquisition, construction and equipping of an approximately 50,500 square foot ice arena located at 950 Mendota Heights Road (the "Project "). (d) Saint Thomas Academy Ice Arena (the "Borrower ") desires to refund the Prior Note through the City's issuance of the Recreational Facilities Revenue Refiuzding Note, Series 2009 (the "Note "), extend the repayment term and refinance certain existing taxable debt of the Borrower previously incurred in connection with the Project. (e) The Project is owned and operated by the Borrower on real estate leased from Saint Thomas Academy, a Minnesota nonprofit corporation pursuant to a Ground Lease Agreement (the "Ground Lease "). (f) The City has been advised by representatives of the Borrower that conventional, commercial financing to pay the capital cost of the Project is available only on a limited basis and at such high costs of borrowing that the economic feasibility of operating the Project would be significantly reduced; (g) Based on representations of the Borrower, no public official of the [Issuer Defined Term] has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project; and (h) A public hearing on the Project was held on July 7, 2009, after notice was published and materials made available for public inspection at the City Hall, all as required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended, at which public 2389004vl 2 hearing all those appearing who desired to speak were heard and written comments were accepted.. BE IT RESOLVED by the City Council of the City of Mendota Heights, Minnesota (the "City "), as follows: SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findings. The City hereby finds, determines and declares as follows: (a) The City is a political subdivision of the State of Minnesota and is authorized under the Act to assist the revenue producing project herein referred to, and to issue and sell the Note, as hereinafter defined, for the purpose, in the manner and upon the terms and conditions set forth in the Act and in t11is Resolution. (b) The issuance and sale of the Recreational Facilities Revenue Refunding Note, Series 2009 (Saint Thomas Ice Arena Project) (the "Note ") by the City, pursuant to the Act, is in the best interest of the City, and the City hereby determines to issue the Note and to sell the Note to Wells Fargo Brokerage Services, LLC (the "Lender "), as provided herein. The City will loan the proceeds of the Note (the "Loan") to the Borrower in order to refinance the Project. (c) Pursuant to a Loan Agreement (the "Loan Agreement ") to be entered into between the City and the Borrower, the Borrower has agreed to repay the Note in specified amounts and at specified times sufficient to pay in full when due the principal of, prerniuin, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the maintenance and operation of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the City and the Borrower deem necessary or desirable for the refinancing the Project. A draft of the Loan Agreement has been submitted to the City Council. (d) Pursuant to a Pledge Agreement to be entered into between the City and the Lender, the City has pledged and granted a security interest in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain rights of indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the City Council. (e) Pursuant to an Amended and Restated Mortgage, Security Agreement, Assignment of Leases and Rents and Fixture Financing Statement (the "Mortgage "), the Borrower will grant an interest in the Project to the Lender. (f) Pursuant to a First Amendment to Assignment of Lease (the "Assignment of Lease ") the Borrower will further secure the Note and assign to the Lender its interest in and to the Ground Lease. (g) The Note will be a special limited obligation of the City. The Note shall not be payable from or charged upon any funds other than the revenues pledged to the payment thereof, nor shall the City be subject to any liability thereon. No holder of the 23890041 Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the City. The Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. (h) It is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note for the purpose of refinancing the costs of the Project. SECTION 2. THE NOTE. 2.1 Authorized Amount and Forin of Note. The Note is hereby approved and shall be issued pursuant to this Resolution in substantially the form submitted to the City Council with such appropriate variations, omissions and insertions as are necessary and appropriate and are permitted or required by this Resolution, and in accordance with the further provisions hereof; and the total aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $3,000,000, unless a duplicate Note is issued pursuant to Section 2.7. The Note shall bear interest at a rate as set forth therein. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, shall be payable at the times and in the manner, shall bear interest at the rate, and shall be subject to such other terns and conditions as are set forth therein. 2.3 Execution. The Note shall be executed on behalf of the City by the signatures of its Mayor and Finance Director and shall be sealed with the seal of the City; provided that the - ? seal may be intentionally omitted as provided by law. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if had remained in office until delivery. In the event of the absence or disability of the Mayor or the Finance Director such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the City Council execute and deliver the Note. 2.4 Delivery of Initial Note. Before delivery of the Note there shall be filed with the Lender (except to the extent waived by the Lender) the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; (b) the Pledge Agreement; (c) Mortgage; and (d) Assignment of Lease. (2) an opinion of Counsel for the Borrower as prescribed by the Lender and Bond Counsel; 23890041 4 (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; (4) a 501(c)(3) determination letter fiom the Internal Revenue Service evidencing that the Borrower is exempt fiom income taxation under Section 501(c)(3) of the Code; (5) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2.5 Disposition of Note Proceeds. Upon delivery of the Note to Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note to the Borrower to refinance the Project in accordance with the terms of the Loan Agreement. 2.6 Registration of Transfer. The City will cause to be kept at the office of the City Finance Director a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be initially registered in the name of the Lender and shall be transferable upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the Note together with a written instrument of transfer satisfactory to the City Finance Director, duly executed by the Lender or its duly authorized agent. The following form of assignment shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the City of Mendota Heights, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said City with full power of substitution in the premises. The undersigned certifies that the transfer is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the City Finance Director shall note the date of registration and the name and address of the new Lender in the Note Register and in the registration blank appearing on the Note. 2.7 Mutilated Lost or Destroyed Note. In case the Note issued hereunder 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 outstanding principal amount, niunber and tenor in exchange and substitution for and upon cancellation of such mutilated Note, or in lieu of and in substitution for such Note destroyed or lost, upon the Lender's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the 23890041 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 Note prior to payment. 2.8 Ownership of Note. The City may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the Principal Balance, redemption price or interest and for all other purposes whatsoever, and the City shall not be affected by any notice to the contrary. 2.9 Limitation on Note Transfers. The Note will be issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except (i) in amounts not less than $100,000, (ii) to not more than 35 persons each of whom have knowledge and experience in financial business matters and that are capable of evaluating the merits and rules of the investment in the Note and are not purchasing for more than one account or with a view to distributing the Note or their interest therein. Any such sale, assignment or participation shall also be (i) in full good faith compliance with all securities registration, broker, anti -fraud and other provisions of the applicable state and federal laws, (ii) with full and accurate disclosure of all material facts to the prospective purchaser(s) or transferee(s), and (iii) under effective federal and state registration statements (which neither the City nor the Borrower shall in any way be obligated to provide) or under exemptions from such registrations. 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the City shall, at the request and expense of the Lender, issue a new note, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount, and the amount of the periodic installments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. SECTION 3. MISCELLANEOUS. 3.1 Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 3.2 Authentication of Transcript. The officers of the City are directed to fiirnish to Bond Counsel certified copies of this Resolution and all documents referred to herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore fiunished, shall constitute recitals of the City as to the correctness of all statements contained therein. 23890041 6 3.3 Authorization to Execute Agreements. The forms of the proposed Loan Agreement and the Pledge Agreement are hereby approved in substantially the forms presented to the City Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution of the documents, and the Mayor and Finance Director of the City are authorized to execute the Loan Agreement and the Pledge Agreement and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note in the name of and on behalf of the City. In the event of the absence or disability of the Mayor or the Finance Director such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without fiu-ther act or authorization of the City Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. 3.4 Qualified Tax Exempt Obligation. In order to qualify the Note as a "qualified tax - exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "), the City hereby makes the following factual statements and representations; (a) the Note will be issued after August 7, 1986, and between January 1, 2009 and December 31, 2010; (b) the Note is not treated as a "private activity bond" under Section 265(b)(3) of the Code; (c) the Borrower has designated the Note as a qualified tax- exempt obligation for purposes of Section 265(b)(3) of the Code; (d) the reasonably anticipated amount of tax- exempt obligations (other than obligations described in clause (ii) of Section 265(b)(3)(C) of the Code) which will be issued by the Borrower (and all entities whose obligations will be aggregated with those of the Borrower) during the calendar year 2009 will not exceed $30,000,000; and (e) not more than $30,000,000 of obligations issued by the Borrower during the calendar year 2009 have been designated for purposes of Section 265(b)(3) of the Code. 2389004vi 7 Adopted by the City council of the City of Mendota Heights, Minnesota, this 18th day of August, 2009. "n / -) ) / ATTEST: ty Clerk 2389004v1 STATE OF MINNESOTA COUNTY OF DAKOTA CITY OF MENDOTA HEIGHTS 1, the undersigned, being the duly qualified and acting Clerk of the City of Mendota Heights, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council duly called and held on the date therein indicated, insofar as such minutes relate to a resolution authorizing the issuance of a revenue note. WITNESS my hand this & day of August, 2009. deric 2389004vl 9