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HomeMy WebLinkAboutR-1496-5-97RESOLUTION NO. 1996-5-97(R) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, AUTHORIZING AND APPROVING A LOAN FROM AMERICAN NATIONAL BANK TO THE ALLEN ECONOMIC DEVELOPMENT CORPORATION, TO FUND THE PURCHASE OF REAL PROPERTY; AUTHORIZING THE EXECUTION AND DELIVERY OF ALL NECESSARY LOAN AGREEMENTS AND OTHER RELATED INSTRUMENTS; APPROVING THE PROPOSED PURCHASE IN CONCEPT AND EXPENDITURES TO BE FUNDED BY SUCH LOAN; APPROVING CERTAIN RESOLUTIONS OF THE ALLEN ECONOMIC DEVELOPMENT CORPORATION; MAKING OTHER FINDINGS AND PROVISIONS RELATED TO THE SUBJECT; AND DECLARING AN EFFECTIVE DATE. WHEREAS, the Allen Economic Development Corporation was established by ordinance of the City Council subsequent to an election to impose and assess a one-half cent sales tax for economic development within the City of Allen: and WHEREAS, one of the purposes for which the Allen Economic Corporation was established is to provide ' for the creation of jobs in the City of Allen; and WHEREAS, the Board of Directors of the Allen Economic Development Corporation intends to recruit companies to construct facilities in the proposed property to be purchased which will provide jobs: and, WHEREAS, the Board of Directors of the Allen Economic Development Corporation has duly reviewed and approved the purchase, as well as, the financing of the property and the loan agreement related to the indebtedness. WHEREAS, American National Bank has committed to enter into a Loan Agreement to assist in funding this purchase; and WHEREAS, there has been presented to the City Council of the City of Allen, a Letter of Loan Commitment (Exhibit A) for their consideration, from American National Bank pursuant to which American National Bank will lend to the Allen Economic Development Corporation an amount to be used to purchase and develop the proposed property. WHEREAS, Section 25(f) of the Economic Development Corporation Act of 1979, Article 5190.6, Texas Revised Civil Statues, as amended, requires that the governing body of the City of Allen approve the resolutions of the Allen Economic Development Corporation providing for the assumption of indebtedness no more than sixty days prior to the execution and delivery of the documents evidencing such evidence; and, WHEREAS, it is deemed necessary and advisable that this resolution be adopted: NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, COLLIN COUNTY, TEXAS, THAT: SECTION 1. There is hereby authorized and approved a loan in an amount not to exceed $5,000,000 from American National Bank to the Allen Economic Development Corporation for the purpose of property purchase and development in Allen, Texas. SECTION 2. The resolution of the Board of Directors of the Allen Economic Development Corporation authorizing the purchase and approving a loan from the American National Bank and pledging sales tax money to the repayment of that loan from American National Bank, adopted by the Allen Economic Development Corporation on April 29, 1997. SECTION 3. The project and expenditure authorized and contemplated by the Allen Economic Development Corporation Board of Directors will be specified and detailed in the American National Bank Loan Agreement are hereby in all things authorized. SECTION 4. The Mayor and the City Secretary of the City of Allen and the officers of the City of Allen are hereby authorized, jointly and severally, to execute and deliver the American National Bank Loan Agreement and any and all other such instruments, certificates, documents, or papers necessary and advisable to carry out the intent and purpose of this resolution. SECTION 5. This resolution was approved by the City Council of the City of Allen, Collin County, Texas on May 1, 1997, at which meeting a quorum was present and voting. ' DULY PASSED AND APPROVED BY THE CITY COUNCIL OF THE CITY OF ALLEN, TEXAS, ON THE 1st DAY OF MAY , 1997. APPROVED: k;iQ Stephen`Ta 11, MAYOR ATTEST: 6idy Mqoison, CMC, CITY SECRETARY ' Resolution No. 1996-5-97 (gl Page 2 EXIIIBIT"A" AMERICAN NATIONAL BANK esrnsuseen 1875 April 25, 1997 Mr. Victor Black Economic Development Assistant AEDC Argus Building 400 E. Bethany Road Allen, Texas 75002 Re: Loan Commitment to finance the acquisition of real property (55.3 acres just across D.S. Highway 75 from AFDC's Millennium Technology Park, Allen, Texas ) for the purpose of development and attraction of industrial/commercial businesses. ' Dear Mr. Black: We are please to advise you that your application for financing the acquisition of real property for the purpose of development and attraction of industrial/commercial businesses which provide positive economic benefits for the City of Allen has been approved by The American National Bank of Texas ("Lender")subject to the following terms and conditions: A. Terms of Loan 1. Borrower: Allen Economic Development Corporation ("AFDC^) 2. Amount: Not to exceed $5,000,000.00 3. Interest Rate and Origination Fee: The interest rate will be /calculated on a 365 day year. Borrower may choose: [/ Option I: During years 1 through 5, the interest rate will be fixed at 7.75%. Beginning with year 6 and annually thereafter, the interest rate will adjust to be equal to the Prime Rate as quoted in the Money Rate Section of the Wall Street Journal. Each change in the rate charged is effected without notice to the Borrower on the rate change date. Whenever adjustments occur in the interest rate, Lender will adjust Borrower's payments to insure Borrower's loan will be paid in full by its original final maturity date. There will be no origination fee. Option II: During years I through 5, the interest rate will be fixed at 7.50%. Beginning with year 6 and annually thereafter, the interest rate will adjust to be equal to the Prime Rate as quoted in the Money Rate Section of the Wall Street Journal. Each change in the rate charged is effected without notice to the Borrower on rate change date. Whenever adjustments occur in the interest rate, Lender will adjust Borrower's payments to insure Borrower's loan will be paid in full by its original final maturity date. There will be a $50,000 origination fee. If the interest charged on the loan and received by Lender is exempt from federal income taxation under the Internal Revenue Code of 1986, as amended, the Borrower may choose: There will be a $50,000 origination fee. 4. Maturity: 16 years 5. Repayment terms: During year 1 interest only will be paid monthly, quarterly, or semiannually, (Borrower may choose one option). During year 1 Borrower may request draws and advances will be made subject to the terms and conditions set forth in the Loan Agreement. Option III: During years 1 through 5, the interest rate will be fixed at 5.04%. Beginning with year 6 and annually thereafter, the interest rate will adjust to be equal to sixty five percent (65%) of the Prime Rate as quoted in the Money Bate Section of the Wall Street Journal. Each change in the rate charged is effected without notice to the Borrower on the rate change date. Whenever adjustments occur in the interest rate, Lender will adjust Borrower's payments to insure Borrower's loan will be paid in full by its original final maturity date. There will be no origination fee. Option IV: During years 1 through 5 the interest rate will be fixed at 4.88%. Beginning with year 6 and annually thereafter, the interest rate will adjust to be equal to sixty five percent (65%) of the Prime gate as quoted in the Money Rate Section of the Wall Street Journal. Each change in the rate charged is effected without notice to the Borrower on the rate change date. Whenever adjustments occur in the interest rate, Lender will adjust Borrower's payments to insure Borrower's loan will be paid in full by its original final maturity date. There will be a $50,000 origination fee. 4. Maturity: 16 years 5. Repayment terms: During year 1 interest only will be paid monthly, quarterly, or semiannually, (Borrower may choose one option). During year 1 Borrower may request draws and advances will be made subject to the terms and conditions set forth in the Loan Agreement. Beginning year 2, the principal balance outstanding will be converted to a 15 year payout. Borrower may choose: a. 180 equal monthly payments, ($47,063.78 estimated monthly payment, including principal and interest, assuming a rate of 7.75% throughout the life of the loan and an original principal balance of $5,000,000) or b. 60 equal quarterly payments, ($141,671.45 estimated quarterly payment, including principal and interest, assuming a rate of 7.75% throughout the life of the loan and an original principal balance of $5,000,000) or c. 30 equal semi-annual payments ($284,778.10 estimated semi-annual payment, including principal and interest, assuming a rate of 7.75% throughout the life of the loan and an original principal balance of $5,000,000) 6. Prepayment: The note may be prepaid in part or whole at anytime without notice to the bank and without penalty. 7. Commitment fee: The Lender will not charge Borrower a commitment fee. B. Security: First priority lien and security interest in tax proceeds paid to Borrower under Section 4A of the Development Corporation Act of 1979. Article 5190.6, Vernon's Annotated Texas Civil Statutes, as amended. 9. Reserves: The Borrower will not be required to maintain or place any amount of money in an account reserved for the purpose of paying scheduled principal and interest payments. 10. Loan Closing: If this commitment is accepted, the loan must be closed by August 1, 1997 or Lender's obligations herein shall terminate. Note: Lender can comply with Borrower's request to close and fund loan by May 16, 1997. Conditions of Loan 1. Current Indebtedness: Borrower will provide Lender evidence that Borrower's current indebtedness ($2.5 million) to Texas Department of Commerce (Texas Leverage Fund) has been paid in full prior to Lender funding the loan committed to herein. 2. Closing Attorney: This loan shall be closed by Lender's counsel. Lender's counsel shall prepare all documents to be used in connection with the closing and funding of this loan and Borrower shall pay the Lender's counsel fees/costs thereof, not to exceed $5,000. If, in the event the interest charged on the loan and received by Lender is exempt from federal income taxation under the Internal Revenue Code of 1986, as amended, and Borrower chooses Interest Rate and Origination Fee Option III or IV, Borrower shall pay all of Lender's counsel fees/cost thereof and all other fees in connection with this tax exempted transaction including but not limited to the Attorney General Fee. 3. Opinion of Counsel to Lender: At the time of closing of the loan, Lender's closing attorney shall deliver an opinion addressed to Lender in term, scope, and substance satisfactory to Lender's general counsel concerning all aspects of the loan transaction including legality, validity, and binding effect of all required loan documents. 4. Opinion of Counsel to Borrower: At the time of closing of the loan, Borrower's counsel shall deliver an opinion addressed to Lender in term, scope, and substance satisfactory to Lender's general counsel concerning all aspects of the loan transaction including the legality, validity, and binding effect of all required loan documents. 5. Cost and expenses: Borrower shall pay all costs and expenses incurred by the Lender in connection with the preparation for and the closing of the loan, whether the loan is closed or not, including but limited to the Closing Attorney fees as stated in paragraph two (2) above, the fees charged by its counsel to prepare and deliver the opinion notated in paragraph four (4) above, legal fees for its attorney to review Lender's documents, an approving opinion of the Attorney General of the State of Texas, if required, and filing fees. 6. Representation of Borrower: The validity of this commitment is subject to the accuracy of all information, representatives, and materials submitted with or in support of the application for this loan, and any failure of accuracy, material changes, or deliberate misstatement in Borrower's submissions shall, at the option of Lender, operate to terminate this commitment and all of Lender's obligations under it. 7. Nonassignability: Neither this commitment nor the loan proceeds shall be assignable by Borrower without the prior written consent of Lender, and any attempt at assignment without consent shall be void. B. Modifications and Amendments: No change in the provisions of this commitment shall be binding unless in writing and executed in the name of and by an officer of Lender. 9. Miscellaneous Provisions: A. Texas Law To Apply: This Agreement, the loan transaction contemplated under it, and all loan documents executed pursuant to it, shall be construed in accordance with the laws of the State of Texas, and all obligations of the parties are performable in Kaufman County, Texas. B. Parties Bound: This Agreement shall be binding on and inure to the benefits of the parties toitand their respective heirs, executors, administrators, legal representatives, successors, and assigns, except as otherwise expressly provided in this commitment. C. Legal Construction: In case any one or more of the provisions contained in this Agreement shall, for any reason, be held to be invalid, illegal, or unenforceable in any respect, such invalidity, illegality, or unenforceability shall not affect any other provision, and this Agreement shall be construed as if such invalid, illegal, or unenforceable provision had never been a part of it. D. Prior Agreement Superseded: This Agreement constitutes the sole and only agreement of the parties to it and supersedes any prior understandings or written or oral agreements between the parties respecting this subject matter. E. Attorney's Fees: If any action at law or in equity, including an action for declaratory relief, is brought to enforce or interpret the provisions of this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees from the other party. These fees may be set by the court in the trial of the underlying action or may be enforced in a separate action brought for that purpose. These fees shall be in addition to any other relief that may be awarded. G. Notice: Unless otherwise provided by this Agreement, any notice, tender, or delivery to be given under it by either party to the other may be effected by personal delivery in writing or by registered or certified mail, postage prepaid, return receipt requested, and shall be deemed received as of the date of mailing. 10. Voidability of Commitment: This commitment shall be voidable at the option of Lender if any of the following events occur: A. A proceeding is commenced by or against Borrower under any bankruptcy or insolvency law. B. Borrower's business is discontinued or suspended for any reason. C. There is any material adverse change in Borrower's business or financial condition. D. Borrower defaults on any other obligation it may have to Lender. D. Documentation of Loan 1. Documents Required: Lender shall obtain or be furnished with security and credit instruments as Lender shall deem necessary for its protection. In addition to any other documents that may be required by Lender, the following documents shall be required on or before the closing. A. Promissory Note B. Loan Agreement containing the terms set forth in this commitment and the standard affirmative and negative covenants, events of default, and representation and warranties customarily found in credit agreements of this nature including but not limited to the following: 1. Audited financial statements of Borrower within 120 days ' of each fiscal year end. 2. Quarterly internally prepared financial statements of Borrower within 45 days of each quarter end. 3. Accounting of monthly tax collection amounts within 15 days of receipt. 4. Agreement not to encumber future revenue/sales tax Proceeds or incur additional debt in excess of -$100,000 without the prior written consent of Lender. C. Security Agreement D. DCC Financial Statement E. Certificate of Non -Litigation F. Certificate of Affirmation G. Statue of Frauds Notice H. Evidence of authority of Borrower to make the loan including but not limited to articles of incorporation, bylaws, minutes of meeting authorizing transaction, resolutions authorizing transaction and designating signators from Borrower and the City of Allen as required. I. If Borrower is a corporation, current Certification of Good Standing. J. Closing Statement signed by the Borrower and Lender. 2. Approval of Documents: All loan documents and the validity and priority of all loan documents shall be satisfactory in all respects to Lender and its counsel. E. Acceptance of Commitment The American National Bank appreciates the opportunity to submit this commitment. This loan commitment expires July 1, 1997. Should this commitment not be accepted by July 1, 1997, the Lender shall have no further obligation to extend credit to Borrower. On return by Borrower to Lender of a fully executed copy of this commitment, this letter shall constitute an agreement obligating Lender to make and Borrower to accept a loan in accordance with the terms and conditions set out above. Sincerely, THE AMERICAN NATIONAL BANK OF TERAS Worley E. Stein Vice President ACCEPTED THIS _DAY 01,_r/ i� wn . ' 1997. ALLEN ECONOMIC DEVELOPMENT CORPORATION LJ /O Title TRACT d CO-MMERCIAV OFFICE I7A AC 6 LM 09cm. "WA TRAC1' 1 �A / -- / OF-FICElFiIGH UETSI'IY k 4ROPQSFU'ST - 1 R"IDFATIAL TRACI'7 119 AC/ / 'I'RACf S r COMMRRCP OFFICE OFFICE 490 AC - L,AYEARPARKRK 1 s.'rn+ac rnaa ��� 28 AC W+mas'eannol II�,I OYIIRUNE / • ��(JJ SITE TRACT 10 II II HOSPITAL&CONIMERCI'LAr rIA, TRACI'2/Y Fust/IC+InE (rRACI3 RFj'M P.MI ,� CRPARK : l I �x/AsIa131L'R- 7.I5 AC PNIFAUVE - tl-i(Atl M ,� LTUNDSY\ / u7u ' TRACF6 COMMERCIAL/ OFFICE 166 AC ro:.+nv:novco TZ � L"M 1W m .. mcr GOOD FULD