06-11-2003 Council Agenda - Laserfiche WebLink

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RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A SUPPLEMENTAL INDENTURE OF TRUST RELATING TO THE $1,965,000 COMMERCIAL DEVELOPMENT REVENUE REFUNDING BONDS, SERIES 1993 (RLF OF MINNESOTA PROJECT) BE IT RESOLVED, by the council of the City of Little Canada (the "City ") as follows: 1. On March 31, 1993, the City issued its $1,965,000 Commercial Development Revenue Refunding Bonds, Series 1993 (RLF of Minnesota Project) (the "Bonds ") pursuant to an Indenture of Trust dated as of March 1, 1993 (the "Indenture ") between the City and U.S. Bank National Association, a national banking association, successor in interest to First Trust National Association (the "Trustee ") and pursuant to a Loan Agreement dated as of March 1, 1993 (the "Loan Agreement ") between the City and RLF of Minnesota, a Minnesota general partnership ( "RLF ") loaned the proceeds of the Bonds to RLF to refund certain prior tax - exempt bonds of the Issuer which were issued to finance a portion of the cost of the acquisition, installation and construction of an office /warehouse facility located at 100 South Owasso Boulevard (the "Project "), and as security for the Bonds, RLF granted to the Trustee a first mortgage lien and security interest on the Project. 2. On November 19, 1993, RLF sold the Project to Larson Enterprises, a Minnesota general partnership (the "Company ") and the Company assumed all rights and liability of RLF under the Loan Agreement and the Bonds. The Project is now leased to Slumberland, Inc. 3. The Bonds currently bear tax - exempt interest at 7.1% per annum and the Company has requested that the interest rate on the Bonds be reduced to 5% per annum. 4. Section 10 -2 of the Indenture provides that the Issuer and the Trustee may not enter into a Supplemental Indenture intending to reduce the interest rate on the Bonds without the consent of the holders of 100 percent of the principal amount of then outstanding bonds. First American Minnesota Tax -Free Fund (the "Holder ") holds 100% of the principal amount of the outstanding bonds and has agreed to reduce the interest rate on the Bonds to 5% per annum. 5. A form of Supplemental Indenture of Trust has been prepared by Briggs and Morgan, P.A., as Bond Counsel, and has been submitted to the Council for approval. 1533424v1 4-