HomeMy WebLinkAboutOrdinance 39-1981I
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ORDTNANCE NO. 39-81
AN ORDINANCE PROVIDING FOR THE ISSUANCE AND SALE OF
A REVENUE BOND PURSUANT TO CHAPTER 9-54,
SOUTH DAKOTA CODIFIED LAWS, AS AMENDED,
TO PROVIDE FUNDS TO BE LOANED TO
COAST-TO-COAST STORES (CENTRAL ORGANIZATION) , INCORPORATED
FOR ECONOMIC DEVELOPMENT PROJECT
BE IT ORDAINED by the Common Council of the City of
Brookings, South Dakota (the "City" ) , as follows: .
l. Authority. The City is, by the Constitution and
laws of the State of South Dakota, including Chapter 9-54, South
Dakota Codified Laws, as amended (the "Act" ) , authorized to issue
and sell its revenue bonds for the purpose of undertaking autho-
rized projects and to enter into contracts necessary or convenient •
in the exercise of the powers granted by the Act and to pledge
revenues of such projects and otherwise secure such bonds.
2 . Authorization of Project. The Common Council
hereby determines that it is necessary and expedient to autho-
rize, and the Common Council does hereby authorize, the issuance
of a revenue bond of the City pursuant to the Act to provide funds
to be loaned to Coast-to-Coast Stores (Central Organization) ,
Incorporated, a Delaware corporation (the "Borrower" ) , in order
that the Borrower may acquire, construct and equip an addition to
a warehouse facility, for the use of the Borrower in its business,
together with the necessary exterior utilities and site improve- •
ments therefor (as more fully described in the Loan Agreement men-
tioned below, the "Project" ) .
3 . Documents Presented. Forms of the following docu-
ments relating to the Pro�ect and the financing thereof have been
submitted to and examined by the Common Council and are now on
file in the office of the Finance Officer:
(a) Loan and Purchase Agreement (the "Loan Agree-
ment" ) , dated as of January 1, 1982, by and among the
City, the Borrower and RepublicBank Dallas, National
Association, in Dallas, Texas (the "Lender" ) , whereby,
among other things, the City agrees to sell and the
Lender agrees to purchase the City' s $2,400, 000 Industrial
Development Revenue Bond (Coast-to-Coast Stores (Central
Organization) , Incorporated Project) (the "Bond" ) , the
City agrees to make a loan to the Borrower of the pro-
ceeds of the sale of the Bond, and the Borrower cove-
nants to pay amounts sufficient to provide for the full
and prompt payment when due of the principal of and
interest on the Bond; and
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ceeds of the sale of the Bond, and the Borrowers cove•
nant/�to pay amounts sufficient to provide for the ful�
and prompt payment when due of the principal of and
interest on the Bond; and
� (b) Loan Agreement Assignment (the "Loan Agree-
ment Assignment" ) dated as of January 1, 1982 , from th�•
City to the Lender, whereby the City assigns to the
Lender all of its interest in the Loan Agreement and
Loan Repayments of the Borrowers thereunder (except its
rights under Sections 5 . 02 , 7 . 0�, 8 . 04 and 8 . 05 thereof
relating to indemnity, expenses and advances of the
City) , for the purpose of securing the full and prompt
payment of the Bond (the form of Loan Agreement Assignment
attached as Exhibit 2 hereto) .^ �
4. Findings . It is hereby found, determined and
declared that:
(a) The Project, as described in paragraph 2
� hereof and in the Loan Agreement, constitutes a "project"
authorized by and described in Section 9-54-2 of the
Act. .
(b) The purpose of the Project is to stimulate
. and develop the general economic welfare and prosperity
of the state through the promotion and advancement of
industrial, comr,iercial, manufacturing, agricultural,
natural resources , research, data collection, health
service, housing for the elderly, housing for the
handicapped, or recreational development or the reduction
of water and air pollution resulting from such developments;
to encourage and assist in the location of new business
and industry in the state or the expansion of existing
business development; and to promote the economic
stability of the state by providing greater employment �
opportunities ar.d �iversification of industr�� thus
promoting the general welfare of the citizens .
(c) The Project has been approved by a preliminary
resolution of the Common Council duly adopted on March 25,
1980 .
(d) The issuance and sale of the Bond, the execu-
tion and delivery of the Loan Agreement and the Loan
Agreement Assignment (together the "Bond Documents" ) ,
and the performance of all covenants and agreements of
the City contained in the Bond and the Bond Documents,
and of all other acts and things required under the
Constitution and laws of the State of South Dakota to
make the Bond and the Bond Documents valid and binding
obligations of the City in accordance with their terms,
are authorized by the Act.
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(e) There is no litigation pending or, to the
best of its knowledge threatened, against the City
relating to the Project or the Bond or the Bond Documents
or questioning the organization of the City or its
power or authority to issue the Bond or execute and
deliver the Bond Documents .
( f) The execution, delivery and performance of
the City' s obligations under the Bond and the Bond
Documents have been fully authorized by all requisi�A
action and do not and will not violate any law, any
order of any court or other agency of government, or
any indenture, agreement or other instrument to whicli
the City is a party or by which it or any of its prop-
erty 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.
(g) The Loan Agreement provides for payments by
the Borrowersy to the Lender for the account of the City
of such amounts as will be sufficient to pay the princi-
pal of and interest on the Bond when due. The Loan
Agreement obligates the Borrowers to provide for the
operation and maintenance of the Project facilities,
including provision for adequate insurance, taxes and
special assessments.
(h) Under the provisions of Section 9-54-6 of the
Act, the Bond shall not be and the Bond shall recite
that it is not to be a general obligation of the City
and is not to be payable from nor charged upon any
funds other than the revenue received from the Project,
including amounts payable by the Borrowers pursuant to
the Loan Agreement, which amounts are ple�ged to the
payment thereof; nthe City is not subject to any liability
thereon; no Holder of the Bond shall ever- have the
right to cor�pel the exercise of the taxing power of the
City to pay the Bond or the interest thereon, nor to
enforce payment thereof against the general funds or
property of the City; the Bond shall not constitute a
charge, lien or encumbrance, legal or equitable, upon
any property of the City; and the Bond does not con-
stitute an indebtedness of the City within the meaning
of any constitutional or statutory limitation.
(i ) No member of the Common Council (i ) has a
direct or indirect interest in the Project, the Bo�d or
the Bond Documents, (ii ) owns any capital stock of or
other interest in the Projec� or the Borrower�,/�(iii )
is an employee, officer or director of either of the
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Borrowers, (iv) will be invol.ved In sup::rv�sing the
conipletion of the Project, or (v) will receive any
commission, bonus or other remuneration for or in
respect of the Project, the Bond or the Bond Documents .
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5. A�p��oval and Execution of Documents . The forms ; �
the Loan Agreemerii:, Lhe Loan Agreement Assignment,^as referred to
in paragraph 3 hereof, are approved. The Loan Agreement � t:�
Loan Agreement Assignment shall be executed in the name ar��l oi�
behalf of the City by the T�Iayor and the Finance Officer, or. otr.er
appropriate officers of the City authorized to execute documents
on behalf of such officers , � in substantially the form on f�.le,
but with all such changes therein, not inconsistent with tt�e A��
or other law, as may be approved by the officers executing the
same, which approval shall be conclusively evidenced by th�.
execution thereof./�
6. Approval of Terms and Sale of Bond. The City shall
proceed forthwith �to issue the Bond in the authorized principal
amount of $2,400, 000 , substantially in the form, maturing, bearing
interest/�and othei�wise containing the provisions set forth in the
form of Bond attac:hed hereto as Exhibit 1 , which terms and provis-
ions are hereby ax�proved and incorporated in this Grdinance anc
made a part hereo�.
A single fully registered Bond, substantially in the
form of Exhibit 1 to this Ordinance, shall be issued and deliv-
ered to the Lendei- in the authorized principal amount of $2,400, 000
as authorized by t.he Act. Payment of the purchase price of the
Bond shall be mad� as provided in the Loan Agreement. Principal
of and interest on tr.e Bond shall be payable at the office of the
registered owner t:hereof as it appears on the registration records
maintained by the Finance Officer in lawful mcney of the United
States . The proposal of the Lender to �urchase the Bond at a
price of S2 ,400, OG0 ( 100% of the par value thereof) is hereby
found and determined to be reasonable and is hereby accepted.
7. Execution, Delivery and Endorsement of Bond. The
Bond may be in ty�ewritten or printed iorm and shall be executed
by the manual sigr�atures of the Mayor and Finance Officer and the
official seal of the City shall be affixed thereto .
, attorney-at-la;a, licensed to practice law in'�the State
of South DaY>ota and actually residing tllerein, is nereby appointed
to countersign the Bond, as provided by Section 6-8-8, South
Dakota Codified Laws , as amended. When so prepared and executed,
the Bond shall be deli-iered to the Lender, upon payment of the
purchase price therefor, and upon receipt of the signed legal
opinion of Faegre & Benson, of Minneapolis , Minnesota, bond
counsel , pursuant to the Loan Agreement. The 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 is::uance thereof .
8 . Registration Records . The Finance Officer, as bond
registrar, shall keep a bond register in which the City shall
provide for the registration of the Bond and for transfers of the
Bond.
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9 . Mtttilated, Lost, Stolen or Destroyed Bond. If the
Bond is mutilated, lost, stolen or destroyeci, the City may execute
and deliver to the Holder a new Bond of like amount, date, number
and tenor as that mutilated, lost, stolen or destroyed; provided
that, in the case of mutilation, the mutilated Bond shall first
be surrendered to the City, and in the case of a lost, stolen or
dest�oyed Bond, there shall be first furnished to the City and
the 3orrowers evidence of such loss, theft or destruction satis-
factory to the City and the Borrowers, together with indemnity
satisfactory to them ( and if RepublicBank Dallas, National Associa-
tion, shall be the Holder of the lost stolen destro ed or
mutiiate Bond, an aqreement of indemnity from such Holder shall
be satisfactorv indemnitv to the City and the Borrower) . The
City and Borrowers may charce the Holder with their reasonable
fees and ex_penses'in replacing any mutilated, lost, stolen or
dest_oved Bond.
10. Transfer of Bonds ; Persan Treated as Holder. The
Bond shall be transferable by the Holder on the bond register of
the City, upon presentation of the Bond for notation of such
transfer thereon at the office of the Finance Officer, as bond
registrar, accompanied by a written instrument of transfer in
form satisfactory to the Finance Officer and the City Attorney
duly executed by the Holder or its attorney duly authorized in
writing. The Bond shall continue to be subject to successive
. transfers at the option of the Holder of the Bond. No service
charge shall be made for any such transfer, but the Finance
Officer may require payment of a sum sufficient to cover any tax
or other governmental charge payable in connection therewith.
The person in whose name the Bond shall be issued or, if trans-
ferred, shall be registered from time to time sh�ll be deemed and
regarded as the absolute Holder thereof for all purposes , and
payment of or on a�count of the principal of and interest on the
Bond shall be made only to or upon the order of the Holder thereof,
or his attorney duly authorized in writing, and neither the City,
the Finance Officer, the Borrowers, nor the Lender shall be �
affe�ted by any nctice to the contrary. All such payments shall
be valid and effectual to satisfy and discharge the liability
upon the Bond to the extent of the sum or sums so paid. The Bond
shal� be initially registered in the name of the Lender.
11 . Amendments, Chanaes and Modifications to Bond
and Eond Ordinance. Except pursuant to Section 9 . 09 of the Loan
Agree�ent, the City shall not enter into or make any change,
modi�ication, alteration or termination of the Bond Documents or
this Bond Ordinance.
12 . Pledge to Holder. Pursuant to the Loan Agreement
Assic�ment, the City shall pledge and assign to the Lender and
its successor Holders of the Bond, all interest of the City in
the revenues of the Project and the Project facilities, including
all L�d;l Repa1rmer.ts to be mace by the Borro�Ters under the Loan
Agree�;�ent. All ccllectior�s of i�ior.eys by Lhe City in any proceeding
for enforcement of the obligations of the Borrower under any of
the Eond Documents or any other document shall be received, held
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13 . Covenants with Holder; Enforceabilitv. All provi-
sions of the Bond and of this Ordinance and all representations
and undertakings by the City in the Bond Documents are hereby
declared to be covenants between the City and the Lender and its
successor Holders of the Bond and shall be enforceable by any
Holder in a proceeding brought for that purpose.
14. $10 Million Election. The City hereby elects that
the $10 million "small issue" exemption set forth in Section
105(b) (6) (D) of the Internal Revenue Code of 1954, as amended,
shall be applicable to the Project and the Bond, and the Mayor or
Finance Officer shall execute and file on behalf of the City the
form of election required by said Section and the regulations
thereunder.
15. Definitions and Interpretation. Terms not other-
wise defined in this Ordinance but defined fn the Loan Agreement
or another of the Bond Documents shall have the same meanings in
this Ordinance, unless the context clearly requires otherwise,
and shall be interpreted herein as provided therein. Notices may .
be given as provided in Section 9.01 of the Loan Agreement. In
case any provision of this Ordinance is for any reason illegal or
invalid or inoperable, such illegality or invalidity or inoper-
ability shall not affect the remaining provisions of this Ordinance,
which shall be construed or enforced as if such illegal or invalid
or inoperable provision were not contained herein.
15. Certifications. The Mayor, Finance Officer and
other officers of the City are authorized and directed to prepare
and furnish to Faegre & Benson, bond counsel, to the Borrower, to
the Lender and to counsel for the Borrower and counsel for the
Lender, certified copies of all proceedings and records of the
City relating to the Project and the Bond, and such other affida-
vits and certificates as may be required to show the facts appear-
ing from the books and records in the officers ' custody and
control or as otherwise known to them; and all such certified
copies, certificates and affidavits, including any heretofore
furnished, shall constitute representations of the City as to the
truth of all statements contained therein. �_ _____
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Approved C �
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Attest � ��
Fi ance ffic
FIRST READING: December 29, 1981
SECOND READING: January 5, 1982
ADOPTED: January 5, 1982
PUBLISHED: January 6, 1982
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