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HomeMy WebLinkAboutResolution No. 401-09 RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF $29,800,000 TAX EXEMPT LOAN PARTICIPATION NOTE (SAMARITAN BETHANY, INC. PROJECT), SERIES 2009 BE IT RESOLVED by the Common Council of the City of Rochester, Minnesota (the "City"), as follows: 1. Authority. The City is, by the Constitution, its City Charter, and laws of the State of Minnesota, including Minnesota Statutes, Chapter 462A and 462C, as amended (the "Act"), authorized to issue and sell its revenue bonds or other obligations for the purpose of financing or refinancing the cost of acquiring and constructing combination housing and health care facilities, including skilled nursing facilities, and to enter into agreements necessary or convenient in the exercise of the powers granted by the Act. 2. Description of Project. Samaritan Bethany, Inc., a Minnesota nonprofit corporation (the "Borrower"), has requested that the City issue its revenue obligations pursuant to the Act to (a) refund the City's Health Care Housing Revenue Bonds, Series 2003A (Samaritan Bethany, Inc. Project) (the "Prior Bonds"), (b) expand and improve its existing senior housing with services assisted living and nursing home facilities located in the City, (c) fund a portion of the interest payable on the Note, hereinafter defined, and (d) pay certain transaction • costs (collectively, the "Project"). 3. Plan of Financing. The Borrower has proposed to this Council that, in order to (a) refund the Prior Bonds and finance the expansion and improvements, and (b) to use the proceeds thereof to finance the Project, the City issue its $29,800,000 Tax Exempt Loan Participation Note (Samaritan Bethany, Inc. Project) Series 2009 (the "Series 2009 Note"). The Note will be purchased by Piper Jaffray Lending LLC (the "Lender"). The City and the Piper Jaffray Lending LLC (the Servicer") will enter into a Servicing Agreement dated as of November 1, 2009 (the "Servicing Agreement"). The proceeds of the Note will be loaned to the Borrower pursuant to a Loan Agreement dated as of November 1, 2009 among the City, the Borrower and the Lender (the "Loan Agreement") and advanced pursuant to the Disbursing Agreement dated as of November 1, 2009, among the Borrower, the Lender and a title insurance company (the "Disbursing Agreement"). Repayment of the Notes will be secured by collateral provided by the Borrower including the Combination Mortgage, Security Agreement and Fixture Financing Statement and Assignment of Leases and Rents, dated as of November 1, 2009, from the Borrower to the Lender (the "Mortgage"), by which the Borrower grants to the Lender a mortgage lien on and security interest in the Project, as security for the payment of the Note and assigns to the Lender its interests in all leases and rents with respect to the mortgaged property. Pursuant to a Guaranty Agreement dated as of November 1, 2009, the Borrower's obligations under the Loan Agreement will be guaranteed by Samaritan Bethany Foundation (the "Guaranty"). Pursuant to an Escrow Agreement dated as of November 1, 2009 (the "Escrow Agreement") a portion of the proceeds of the Note will be deposited with the U.S. Bank National Association, in its capacity as trustee for the Prior Bonds and used to prepay the Prior Bonds then outstanding on October 1, 2010. 2392305v2 4. Documents Presented. Forms of the following documents related to the N have been submitted to the City: ote (a) The Loan Agreement; (b) The Servicing Agreement; (c) The Mortgage (not executed by the City); (d) The Disbursing Agreement (not executed by the City); (e) The Guaranty (not executed by the City); and (f) The Escrow Agreement. 5. Findings. It is hereby found, determined and declared that: (a) Based on Borrower's representations to the City, the Project constitutes a healthcare/skilled nursing project authorized by and described in the Act. (b) There is no litigation pending or, to the City's actual knowledge, threatened against the City relating to the Note, the Loan Agreement or the Servicing Agreement (collectively, the "City Note Documents") or questioning the due organization of the City, or the powers or authority of the City to issue the Note and undertake the transactions contemplated hereby. (c) The execution, delivery and performance of the City's obligations under the City Note Documents do not and will not violate 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. (d) It is desirable that the Note be issued by the City upon the terms set forth in the Servicing Agreement under the provisions of which the City's interest in the Loan Agreement will be pledged to the Lender, as security for the payment of principal of, premium, if any, and interest on the Note. (e) Under the provisions of the Act, and as provided in the City Note Documents, the Note is not to be payable from nor charged upon any funds other than amounts payable pursuant to the Loan Agreement and amounts realized under the Mortgage and moneys in the funds and accounts held by the Lender which are pledged to the payment thereof, the City is not subject to any liability thereon; no owners of the Note shall ever have the right to compel the 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 general or moral obligation of the City or a charge, lien or encumbrance, legal or equitable, upon any property of the City (other than the 2392305v2 2 • interest of the City in the loan repayments to be made by the Borrower under the Loan Agreement); and the Note issued shall recite that the Note, including interest thereon, shall not constitute or give rise to a charge against the general credit or taxing powers of the City. 6. Approval and Execution of Documents. The forms of the Note and the City Note Documents are approved. The City Note Documents are authorized to be executed in the name and on behalf of the City by the Mayor and the City Clerk, at such time, if any, as they may deem appropriate, or executed or attested by other officers of the City, 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 shall be delivered to the Lender. Modifications to the forms of the Mortgage, the Guaranty and the Disbursing Agreement and other collateral security documents may be made at the discretion of the parties thereto. 7. Approval, Execution and Delivery of Notes. The City is authorized to issue the Note, in the principal amount of not to exceed $29,800,000, in the form and upon the terms set forth in the Servicing Agreement, which terms are for this purpose incorporated in this resolution and made a part hereof; provided, however, that the interest rate on the Note shall be as set forth in the Servicing Agreement, to be approved, executed and delivered by the officers of the City authorized to do so by the provisions of this Resolution, which approval shall be conclusively evidenced by such execution and delivery. The Lender has agreed to purchase the Note at par. The Mayor, the City Clerk and other City officers are authorized to execute the Note as prescribed in the Servicing Agreement at such time, if any, as they may deem appropriate, and to deliver them to the Lender, together with a certified copy of this Resolution and the other documents required by the Servicing Agreement, for authentication, registration and delivery to the Lender. 8. Bank Qualified. Based solely on representations made by the Borrower, the City will issue the Note as a "qualified tax exemption obligation" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended. 9. Certificates, etc. The Mayor, the City Clerk and other officers of the City are authorized at such time, if any, as they may deem appropriate, to prepare and furnish to bond counsel and the Lender, certified copies of all proceedings and records of the City relating to the Notes, 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 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. 2392305v2 3 Passed and adopted by the Common Council of the City of Rochester, this 21St day of September, 2009. President of said Common Council Attest: Jerk Approved this ZZ. day of 55-0J� , 2009 Mayor i 2392305v1 4