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2008 ResolutionsRESOLUTION NO. Zoos-o2 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION AWARDING THE SALE OF PUBLIC PROJECT REVENUE REFUNDING BONDS, SERIES 2008A (CITY OF MONTICELLO, MINNESOTA LEASE OBLIGATION) BE IT RESOLVED By the Board of Commissioners of the City of Monticello Economic Development Authority (the "Authority") as follows: Section 1. Recitals. 1.01. The City of Monticello, Minnesota (the "City") is authorized by Minnesota Statutes, Section 465.71, as amended, to acquire real and personal property under lease-purchase agreements. 1.02. Pursuant to a Ground Lease, dated as of December 1, 1998 and amended as of March 1, 2000 (the "Original Ground Lease"), between the City and the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "HRA"), the HRA acquired a leasehold interest from the City in certain property located within the City (the "Site"). 1.03. Pursuant to aLease-Purchase Agreement, dated as of December 1, 1998 between the HRA and the City, the HRA leased the Site to the City in connection with the acquisition, construction and equipping of a community center, armory and city hall (the "Facilities") financed by the issuance of the HRA's $7,385,000 Temporary Public Project Revenue Bonds, Series 1998 (the "Series 1998 Bonds"). 1.04. The HRA refunded the Series 1998 Bonds by the issuance of its $7,555,000 Public Project Revenue Bonds, Series 2000A (the "Series 2000A Bonds"), which issuance required an Amendment No. 1 to the Lease-Purchase Agreement, dated as of March 1, 2000 (such agreement, as amended, is referred to as the "Original Lease"). 1.05. By Resolution No. 2007-85, adopted on October 22, 2007, the City Council of the City transferred the control, authority and operation of all projects of the HRA, including the Series 2000A Bonds and all agreements related thereto, to the City of Monticello Economic Development Authority (the "Authority"), pursuant to Minnesota Statutes, Section 469.094, Subdivision 2. 1.06. The Authority is authorized by Minnesota Statutes, Chapter 469, as amended, to issue and sell revenue bonds to finance the construction of the Facilities and related costs, and to issue bonds to refund such bonds. 1.07. In order to refund the Series 2000A Bonds in advance of maturity, the Authority proposes to issue a series of revenue bonds in the aggregate principal amount of $6,180,000, designated as "Public Project Revenue Refunding Bonds, Series 2008A (City of Monticello, Minnesota Lease Obligation)" (the "Bonds"). 1.08. Proceeds of the Bonds will be used to pay costs of issuance of the Bonds and to fund the escrow account established to effectuate refunding of the Series 2000A Bonds, all pursuant to the Escrow Agreement (Series 2008A), dated as of February 1, 2008 (the "Escrow Agreement"), between the Authority and U.S. Bank National Association, as escrow agent (the "Escrow Agent"). 1.09. Concurrent with the issuance of the Bonds, the Authority has deemed it necessary to enter into an Amended and Restated Ground Lease, dated as of February 1, 2008 between the City and the Authority (the "Ground Lease"), and an Amended and Restated Lease-Purchase Agreement, dated as of February 1, 2008 between the Authority and the City (the "Lease"), which supersede in all respects the Original Ground Lease and the Original Lease, respectively. 1.10. On January 16, 2008, the Authority received a proposal to purchase the Bonds from Bank of America, N.A. (the "Purchaser"), determined that such proposal was a reasonable offer, and accepted a commitment from the Purchaser subject to the Authority's approval of all terms of the sale. 1.11. Forms of the Ground Lease, the Lease and the Escrow Agreement have been prepared and submitted to the Authority and are on file with the Authority. Section 2. Sale of Bonds. 2.01. Acceptance of Offer. The proposal of the Purchaser to purchase the Bonds is hereby found and determined to be a reasonable offer and is hereby accepted, the proposal being to purchase the Bonds at a price of $6,180,000 plus accrued interest to date of delivery, for Bonds bearing principal and interest as follows: yeas Interest Rate 2009 3.20% 2010 3.20 2011 3.20 2012 3.20 2013 3.20 2014 3.20 2015 3.20 2.02. Ratifications. The Authority ratifies the execution of the commitment letter received from the Purchaser, dated January 16, 2008 and the execution of the Proposal Form for the Bonds, also dated January 16, 2008. 2.03. Issuance of the Bonds. The Authority will forthwith issue and sell the Bonds pursuant to Minnesota Statutes, Chapter 469, as amended (the "Act"), in the total principal amount of $6,180,000, originally dated February 20, 2008, in the denomination of the principal amount of 327951v3 AJP MN190-128 2 each maturity thereof, numbered No. R-1, upward, bearing interest as above set forth, and maturing serially on February 1 in the years and amounts as follows: yew Principal Amount 2009 $625,000 2010 63 5,000 2011 960,000 2012 990,000 2013 995,000 2014 990,000 2015 985,000 2.04. Redemption. The Bonds are not subject to optional redemption prior to maturity, except that each Bond is subject to extraordinary redemption on any Business Day (as defined in the Lease) in whole or in part, at a redemption price equal to par, plus accrued interest to the redemption date, at the election of the Authority, upon the happening of certain events of damage to or destruction or condemnation of the Site or the Facilities or change of law rendering the Lease unenforceable or impossible of performance, all as more fully provided in Section 7.7 of the Lease. Notice of any extraordinary redemption of the Bonds shall be mailed in the manner and to the extent required by this Bond Resolution. Prior to the date fixed for extraordinary redemption, funds shall be deposited with the Registrar sufficient to pay the Bonds called and accrued interest thereon. Upon the happening of the above conditions, any Bonds thus called shall not bear interest on or after the extraordinary redemption date, and except for the purpose of payment by application of the funds so deposited, shall no longer be protected by this Bond Resolution. Section 3. Registration and Payment. 3.01. Registered Form. The Bonds will be issued only in fully registered form. The interest thereon and, upon surrender of each Bond, the principal amount thereof, is payable by check or draft issued by the Registrar described herein. 3.02. Dates• Interest Payment Dates. Each Bond will be dated as of the last interest payment date preceding the date of authentication to which interest on the Bond has been paid or made available for payment, unless (i) the date of authentication is an interest payment date to which interest has been paid or made available for payment, in which case the Bond will be dated as of the date of authentication, or (ii) the date of authentication is prior to the first interest payment date, in which case the Bond will be dated as of the date of original issue. The interest on the Bonds is payable on February 1 and August 1 of each year, commencing August 1, 2008, to the registered owners of record thereof as of the close of business on the fifteenth day of the immediately preceding month, whether or not that day is a business day. 327951v3 AJP MN190-128 3.03. RegLstration. The Authority will appoint a bond registrar, transfer agent, authenticating agent and paying agent (the "Registrar"). The effect of registration and the rights and duties of the Authority and the Registrar with respect thereto are as follows: (a) Register. The Registrar must keep at its principal office a bond register in which the Registrar provides for the registration of ownership of Bonds and the registration of transfers and exchanges of Bonds entitled to be registered, transferred or exchanged. (b) Transfer of Bonds. Upon surrender for transfer of a Bond duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee or transferees, one or more new Bonds of a like aggregate principal amount and maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the fifteenth day of the month preceding each interest payment date and until that interest payment date. (c) Exchange of Bonds. When Bonds are surrendered by the registered owner for exchange the Registrar will authenticate and deliver one or more new Bonds of a like aggregate principal amount and maturity as requested by the registered owner or the owner's attorney in writing. (d) Cancellation. Bonds surrendered upon transfer or exchange will be promptly cancelled by the Registrar and thereafter disposed of as directed by the Authority. (e) Improper or Unauthorized Transfer. When a Bond is presented to the Registrar for transfer, the Registrar may refuse to transfer the Bond until the Registrar is satisfied that the endorsement on the Bond or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. (f) Persons Deemed Owners. The Authority and the Registrar may treat the person in whose name a Bond is registered in the bond register as the absolute owner of the Bond, whether the Bond is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Bond and for all other purposes and payments so made to registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. (g) Taxes Fees and Charges. The Registrar may impose a charge upon the owner thereof for a transfer or exchange of Bonds, sufficient to reimburse the Registrar 327951v3 AJP MN190-128 4 for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. (h) Mutilated Lost Stolen or Destroyed Bonds. If a Bond becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Bond of like amount, number, maturity date and tenor in exchange and substitution for and upon cancellation of the mutilated Bond or in lieu of and in substitution for a Bond destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case of a Bond destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to it that the Bond was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar of an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the Authority and the Registrar must be named as obligees. Bonds so surrendered to the Registrar will be cancelled by the Registrar and evidence of such cancellation must be given to the Authority. If the mutilated, destroyed, stolen or lost Bond has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Bond prior to payment. (i) Redemption. In the event any of the Bonds are called for extraordinary redemption, notice thereof identifying the Bonds to be redeemed will be given by the Registrar by mailing a copy of the extraordinary redemption notice by first class mail (postage prepaid) to the registered owner of each Bond to be redeemed at the address shown on the registration books kept by the Registrar and by publishing the notice if required by law. Failure to give notice by publication or by mail to any registered owner, or any defect therein, will not affect the validity of the proceedings for the redemption of Bonds. 3.04. Appointment of Initial Registrar. The Authority appoints the City Finance Director as the initial Registrar. The Authority reserves the right on any date to appoint a successor Registrar, which Registrar must be a bank or trust company authorized by law to conduct such business, in which event the predecessor Registrar must deliver all cash and Bonds in its possession to the successor Registrar and must deliver the bond register to the successor Registrar. The President and the Executive Director of the Authority are authorized to execute and deliver, on behalf of the Authority, a contract with any successor Registrar. The Authority agrees to pay, from Additional Lease Payments paid by the City under the Lease, the reasonable and customary charges of any successor Registrar for the services performed. 3.05. Execution Authentication and Delivery. The Bonds will be prepared under the direction of the Executive Director and executed on behalf of the Authority by the signatures of the President and the Executive Director, provided that all signatures may be printed, engraved or lithographed facsimiles of the originals. If an officer whose signature or a facsimile of whose signature appears on the Bonds ceases to be such officer before the delivery of any Bond, that signature or facsimile will nevertheless be valid and sufficient for all purposes, the same as if the officer had remained in office until delivery. Notwithstanding such execution, a Bond will not be valid or obligatory for any purpose or entitled to any security or benefit under this Resolution unless and until a certificate of authentication on the Bond has been duly executed by the manual 327951v3 AJP MN190-128 $ signature of an authorized representative of the Red sentah'veert1fThe executed cetrtifitcate of different Bonds need not be signed by the same p authentication on a Bond is conclusive evidence that it haasedbeexecut dnand authenti atedethe under this Resolution. When the Bonds have been so pry ent of the purchase price in Authority will deliver the same to the Purchaser upon paym accordance with the contract of sale heretofore made and executed, and the Purchaser is not obligated to see to the application of the purchase price. 3.06. Temporary Bonds. The Authority mayubstantiall lithe fo lrm s t forthin Section 4 Bonds one or more typewritten temporary Bonds ins y hereof with such changes as may be necessary to re efinitiverBonds the temporatry Bonds will temporary bond. Upon the execution and delivery of d be exchanged therefor and cancelled. Section 4. Form of Bond. The Bonds will be printed or typewritten in substantially the following form: UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY $__- No. R- Public Project Revenue Refunding Bonds, Series 2008A (City of Monticello, Minnesota Lease Obligation) Date of Interest Rate Maturit Original Issue 3.20% February 1, February 20, 2008 Registered Owner: BANK OF AMERICA, N.A. Principal Amount: The City of Monticello Economic Development Authority, a public body corporate and politic and political subdivision of the State of Minnes hereinafterudescrlbed,f to the Registered hereby promises to pay, but solely from the sources Owner specified above or registered assigns, the Principal Amount set forth above on the Maturity date specified above, upon the presentatio Amount fromesuch sources a~the Interest Registered Owner hereof interest on such Pnncipal Rate specified above from the Date of Original Issouedul f o rovided for asespecified below,r on payment date to which interest has been paid Y p 327951v3 AJP MN190-128 6 February 1 and August 1 of each year, commencing August 1, 2008, until said principal amount is paid. Principal and the redemption price are payable in lawful money of the United States of America by check or draft at the office of the City Finance Director of the City of Monticello, Minnesota (the "City"), or its successor, as Registrar. Interest shall be paid on each interest payment date by check or draft mailed to the person in whose name this Bond is registered at the close of business on the fifteenth (15th) day of the month immediately preceding such interest payment date (whether or not a business day) at the Owner's address set forth on the registration records maintained by the Registrar. Upon written request to the Registrar, delivered at least fifteen (15) days prior to an interest payment date by a registered Owner of the Bonds, payment of interest may be made by wire transfer to such registered Owner. Any such interest not punctually paid or provided for will cease to be payable on such regular record dates and such defaulted interest maybe paid to the person in whose name this Bond is registered at the close of business on a special record date for the payment of such defaulted interest established by the Registrar. It is hereby certified and recited and the Authority has found: that all acts, conditions and things required to be done precedent to and in the issuance of this Bond and the series of which it is a part have been properly done, have happened and have been performed in regular and due time, form and manner as required by law; and that this Bond and the series of which it is a part does not constitute a debt of the Authority within the meaning of any constitutional or statutory limitation. This Bond is issued pursuant to Minnesota Statutes, Chapter 469, as amended (herein called the "Act"), and in conformity with the provisions, restrictions and limitations thereof. This Bond does not constitute or give rise to a charge against the general credit or properties or taxing powers of the Authority, the City, or of any other governmental entity, and does not grant to the Owner of this Bond any right to have the Authority, the City, or any other governmental entity levy any taxes or appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation or a pecuniary liability of the Authority, the City, any other governmental entity, or the individual officers or agents thereof. This Bond does not constitute an indebtedness of the Authority, the City, or any other governmental entity within the meaning of any state constitutional provision or statutory limitation. This Bond and interest hereon are payable solely from Lease Payments to be paid by the City pursuant to an Amended and Restated Lease-Purchase Agreement, dated as of February 1, 2008 (the "Lease"), between the Authority and the City, or other moneys held in a Fund or Account appropriated to the payment of the Bonds of this series under Resolution No. _, adopted by the Board of Commissioners of the Authority on January 30, 2008 (the "Bond Resolution"). THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE IS SUBJECT TO ANNUAL APPROPRIATION BY THE CITY COUNCIL OF THE CITY. IN THE EVENT THE CITY COUNCIL DETERMINES NOT TO APPROPRIATE MONEY FOR THE PAYMENT OF LEASE PAYMENTS DUE IN A FISCAL YEAR, THE LEASE WILL TERMINATE AT THE END OF THE THEN-CURRENT FISCAL YEAR, AND THE CITY WILL HAVE NO FURTHER OBLIGATION TO MAKE LEASE PAYMENTS PURSUANT TO THE LEASE. 327951v3 AJP MN190-128 7 This Bond represents a duly authorized series of special, limited obligation Bonds (the "Bonds") in an aggregate principal amount of $6,180,000 in denominations of the principal amount maturing in any year, and numbered from R-1 upwards, and of like tenor and effect except as to serial number, denomination, interest rate, maturity and right of prior redemption, all of which have been authorized by law to be issued and have been issued or are to be issued by the Authority pursuant to the Bond Resolution to provide proceeds a portion of which will be deposited in an escrow fund to advance refund the aggregate principal amount of $7,555,000 Housing and Redevelopment Authority in and for the City of Monticello, Minnesota, Public Project Revenue Bonds, Series 2000A (the "Series 2000A Bonds"), pursuant to an Escrow Agreement (Series 2008A), dated as of February 1, 2008, between the Authority and U.S. Bank National Association, as escrow agent (the "Escrow Agreement"). The Bonds are equally and ratably secured by the Bond Resolution and the Lease. Reference is hereby made to the Ground Lease, dated as of February 1, 2008, between the City, as lessor, and the Authority, as lessee of the Site (the "Ground Lease"), the Lease, the Bond Resolution, the Escrow Agreement, and any amendments or supplements thereto for a description and limitation of the property, revenues and funds pledged and appropriated to the payment of the Bonds, the nature and extent of the security thereby created, the rights of the Owners of the Bonds, and the rights, immunities and obligations of the Authority and the City thereunder. Certified copies of the Bond Resolution and executed counterparts of the Ground Lease, the Lease, and the Escrow Agreement are on file at the office of the Authority. The Bonds are not subject to optional redemption prior to maturity, except that the Bonds are subject to extraordinary redemption on any Business Day in whole or in part in certain events of damage to or destruction or condemnation of the Site or the Facilities, or change of law as provided in the Lease, at a redemption price equal to par plus accrued interest. Notice of any such extraordinary redemption shall be given to the registered Owner of each Bond to be redeemed by first class mail, addressed to the Owner's registered address, not later than thirty (30) days prior to the date fixed for extraordinary redemption. Prior to the date fixed for extraordinary redemption, funds shall be deposited with the Registrar sufficient to pay the Bonds called and accrued interest thereon. Upon the happening of the above conditions, Bonds thus called shall not bear interest on or after the call date and, except for the purpose of payment from the funds so deposited, shall no longer be protected by the Bond Resolution. This Bond is transferable, as provided in the Bond Resolution, only upon the registration records maintained by the Registrar by the Registered Owner hereof in person or by the Owner's duly authorized attorney, upon surrender of this Bond for transfer at the principal office of the Registrar, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Registrar duly executed by, the Registered Owner hereof or the Owner's duly authorized attorney, and, upon payment of any tax, fee or other governmental charge required to be paid with respect to such transfer, one or more Bonds of the same maturity, aggregate principal amount and interest rate will be issued to the designated transferee or transferees. The Bonds are issuable only as fully registered bonds without coupons in denominations of the principal amount maturing in any year. As provided in the Bond Resolution and subject to certain limitations set forth therein, the Bonds are exchangeable for a like aggregate principal 327951v3 AJP MN190-128 amount of Bonds of the same maturity and interener'se~dul diauthorized attorneyeuponnsurrender requested by the Registered Owner or the Ow Y thereof to the Registrar. In case an Event of Default as defined in the Boe CRes the io~ncipal of this Bond and all the event of non-appropriation by the City Council of th y~ p able rior to the stated other Bonds Outstanding may be declared or may become due and pay p maturity hereof in the manner and with the effect and sunbje~t tt to enforce the ppo~isions oft e Bond Resolution, but no Owner of any Bond shall have y gh Bond Resolution, the Lease, the Ground Lease, or the Escrow Agreement except as provided in the Bond Resolution. With the consent of the Authority and the Registns of to Bond Resolutionithe Leaset he provided in the Bond Resolution, the terms and provisio Ground Lease, the Escrow Agreement, or of any insRemstered Ownernorl the rOwners of a modified or altered by the assent or authority of the gi majority in aggregate principal amount of to Bonds then Outstanding thereunder. This Bond shall not be valid or become obligatory for any purpose until it shall have been authenticated by the execution of the certificate hereon endorsed by the Registrar under the Bond Resolution. [The remainder of this page is intentionally left blank.] 327951v3 AJP MN190-128 9 IN WITNESS WHEREOF, the City of Monticello Economic Development Authority has caused this Bond to be executed in its name by the facsimile signatures of its duly authorized officers, all as of the Date of Original Issue specified above. CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY (Facsimile) President (Facsimile Executive Director This is one of the Bonds described in the within mentioned Bond Resolution. CITY OF MONTICELLO, MINNESOTA, as Registrar Date: BY~ Its: City Finance Director ABBREVIATIONS The following abbreviations, when used in the inscription on the face of this Bond, will be construed as though they were written out in full according to applicable laws or regulations: TEN COM -- as tenants UNIF GIFT MIN ACT Custodian in common (Gust) (Minor) TEN ENT -- as tenants under Uniform Gifts or by entireties Transfers to Minors Act............ JT TEN -- as joint tenants with right of survivorship and not as tenants in common (State) Additional abbreviations may also be used though not in the above list. 327951v3 AJP MN190-128 1Q ASSIGNMENT FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto (Please Print or Typewrite Name and Address of Transferee) oints e within Bond and all rights thereunder, and hereby o transfer the wwithin Bond pon the th attorney books kept for registration thereof, with full power of substitution in the premises. Dated: Please Insert Social Security Number or Other Identifying Number of Assignee Notice: The signature to this assignment must correspond with the name as 1 arti ulars on the face of this Bond in ev e whatever. without alteration or any chang PROVISIONS A5 TO REGISTRATION The ownership of the principal of and interest on the wite Bond has been registered on the books of the Authority in the name of the person last noted b Signature of Registrar Date of Re 'stration Registered Owner Bank of America, N.A. Federal ID # [End of Form of Bond] Section 5. Pa ent• Securit • Pled es and Covenants. .01. Debt Service Fund. The Bonds are payable from e ~eDebeby p dged tothe Debt 5 created, and the Lease Payments payable byahe o i~ and o the Debt Service Fund proceeds of the Service Fund. In addition, the Authority pp p Bonds in the amount of $1,512.94. 02. Lease Pa ents. The Authority covenants to apply all Lease Payments received by 5. ym ent of the principal of and interest on the Authority from the City pursuant to the Lease vetrise tea charge against the general credit or the Bonds. The Bonds shall not constitute or gi ' s or taxing powers of the Authority or the City and shall not grant to the Ofunds for the propertle an taxes or appropriate any Bonds any right to have the Authority or the City levy y 11 327951v3 AJP MN190-128 payment of the principal thereof or interest thereon, nor are the Bonds a general obligation or a pecuniary liability of the Authority or the City or the individual officers or agents thereof. The Bonds shall not constitute an indebtedness of the Authority or the City, within the meaning of any state constitutional provision or statutory limitation. The Bonds and interest thereon are payable solely from Lease Payments to be paid by the City pursuant to the Lease, or other moneys held by the Registrar in a Fund or Account appropriated to the payment of the Bonds. The obligation of the City to make Lease Payments pursuant to the Lease is subject to annual appropriation by the City Council of the City. In the event the City Council determines not to appropriate moneys for the payment of Lease Payments due in a fiscal year, the Lease will terminate at the end of the then-current fiscal year, and the City will have no further obligation to make Lease Payments pursuant to the Lease. In case an Event of Default (as defined in the Lease) occurs, or in the event of non- appropriation by the City Council of the City, the Authority may declare the principal of all Bonds Outstanding to be due and payable prior to the stated maturity thereof, and upon such declaration, the principal of all Bonds outstanding shall become due and payable. After such declaration, all moneys received by the Authority and applicable to the Bonds pursuant to the Lease shall be applied to the equal and proportional payment of all Bonds outstanding and claims for interest thereon, without priority of any Bond over another Bond, or of principal over interest or interest over principal. 5.03. Refiznding Fund. Out of the proceeds of the Bonds, the Authority shall deposit $6,178,487.06 to the Refunding Fund hereby created. All amounts deposited in the Refunding Fund shall be immediately disbursed to the Escrow Fund established under the terms of the Escrow Agreement. The money transferred to the Escrow Fund shall be invested by the Escrow Agent and applied to the redemption and prepayment of the Series 2000A Bonds and the payment of Costs of Issuance (as defined in the Lease), all in accordance with the terms of the Escrow Agreement. Section 6. Authentication of Transcri~t• Related Documents and Covenants. 6.01. Transcript. The officers of the Authority are authorized and directed to prepare and furnish to the Purchaser and to the attorneys approving the Bonds, certified copies of proceedings and records of the Authority relating to the Bonds and to the financial condition and affairs of the Authority, and such other certificates, affidavits and transcripts as may be required to show the facts within their knowledge or as shown by the books and records in their custody and under their control, relating to the validity and marketability of the Bonds, and such instruments, including any heretofore furnished, maybe deemed representations of the Authority as to the facts stated therein. 6.02. _Approval of the Ground Lease Lease and Escrow Agreement. The Ground Lease, the Lease, and the Escrow Agreement described in Section 1 are hereby approved. The President and one other officer of the Authority are authorized and directed to execute and deliver the Ground Lease, the Lease, and the Escrow Agreement on behalf of the Authority, substantially in the forms on file, but with all such changes therein as shall be approved by the officers executing the same, which approval shall be conclusively evidenced by the execution thereof. Copies of all of the transaction documents shall be delivered, filed and recorded as provided therein. The 327951v3 AJP MN190-128 12 President and other officers of the Authority are also authorized and directed to execute such other instruments as may be required to give effect to the transactions herein contemplated. 6.03. Other Certificates. The President and Executive Director are hereby authorized and directed to furnish to the Purchaser at the closing such certificates as are required as a condition of sale. Unless litigation shall have been commenced and be pending questioning the Bonds or the organization of the Authority or incumbency of its officers, at the closing the President and Executive Director shall also execute and deliver to the Purchaser a suitable certificate as to absence of material litigation, and the Executive Director shall also execute and deliver a certificate as to payment for and delivery of the Bonds. 6.04. Concerning the Lease. The Authority will take such action as may be necessary or advisable to enforce the covenants, terms and conditions of the Lease if such action shall be deemed to be in the best interests of the Authority. The Authority shall do or cause to be done all things on its part to be performed under the Lease so that the obligations of the City thereunder shall not be impaired or excused. 6.05. Liens: Further Assurances. Except as otherwise provided, the Authority agrees that it will not mortgage, sell or otherwise encumber its interest in the Site and the Facilities during the term of the Lease, except as such liens may constitute Permitted Encumbrances (as defined in the Lease). The Authority will execute or cause to be executed any and all further instruments that may reasonably be requested by the Registrar and be authorized by law to perfect the lien of this Bond Resolution on the property secured hereby, or to vest in the Registrar the right to receive and apply the revenues and income pledged to the payment or protection and security of the Bonds, and will execute, deliver, file or record any financing statement pursuant to the Uniform Commercial Code if such filing, registration or recording shall be necessary or convenient to effect, protect or confirm the pledge and lien of this Bond Resolution. The City shall pay all fees and expenses in connection with the preparation of such documents and all filing and registration taxes and fees in connection therewith. Section 7. Additional Bonds. 7.01. Generally. The Authority, upon request of the City, may issue additional bonds of any series in amounts which are sufficient to pay the cost of acquiring, constructing or equipping Improvements (as defined in the Lease), to pay the costs of issuing such additional bonds and, in the case of additional bonds issued to pay the cost of Improvements, to fund interest payable on such additional bonds for a period of time not to exceed six (6) months beyond the completion of any Improvements financed with the proceeds thereof. Additional bonds may be issued subject to this Section only if the City has not exercised its right of non-appropriation under the Lease and if an Event of Default (as defined in the Lease) has not occurred under the Lease. 7.02. Additional Bonds to Pay the Cost of Improvements. Additional bonds of any series may be issued, at one time or from time to time, subject to the conditions hereinafter described, in an aggregate amount sufficient with any other funds available and committed therefor, to pay 327951v3 AJP MN190-128 13 the cost of any Improvements, including Improvements located on real property contiguous with the Site, if such real property is to be acquired by the City and leased to the Authority pursuant to the Ground Lease; provided, however, that such real property, whether or not financed with the proceeds of additional bonds shall, as a condition to the issuance of such Additional Bonds, be subjected to the Ground Lease and the Lease and become part of the Site, and the City, the Registrar and the Authority shall take all action necessary to so provide. 7.03. Delivery of Additional Bonds. Additional bonds of any series may be executed by the Authority and delivered to the Registrar for authentication, but only upon receipt by the Registrar of the following: (a) An executed counterpart of an indenture or bond resolution creating such additional bonds; and (b) Executed counterparts of amendments to the Ground Lease and the Lease adding the property, if any, financed with the additional bonds to the leased property and providing for additional Lease Payments sufficient to provide for the payment of principal, premium, if any, and interest on all Bonds to be outstanding after the issuance of the additional bonds. Section 8. Tax Covenants. 8.01. General Tax Exemption Covenant. The Authority covenants and agrees with the holders from time to time of the Bonds that it will not take or permit to be taken by any of its officers, employees or agents any action which would cause the interest on the Bonds to become subject to taxation under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations promulgated thereunder, in effect at the time of such actions, and that it will take or cause its officers, employees or agents to take, all affirmative action within its power that may be necessary to ensure that such interest will not become subject to taxation under the Code and applicable Treasury Regulations, as presently existing or as hereafter amended and made applicable to the Bonds. 8.02. (a) Rebate. The Authority acknowledges and confirms that the maintenance of the tax-exempt status of interest on the Bonds is dependent, among other things, on compliance with the arbitrage requirements set forth in Section 148 of the Internal Revenue Code (the "Code") and Treasury Regulations promulgated thereunder. In order to confirm and carry out such understanding, the City has agreed under the Lease to make or cause to be made periodic computations and rebate payments to the United States as and when required by said Section 148 and applicable Treasury Regulations. (b) Payment of Rebate. The Authority expects that the proceeds of the Bonds in the Debt Service Fund will be exempt from the rebate requirements of Section 148 of the Code by reason of Section 148(fj(4)(A)(ii), relating to amounts earned in a bona fide debt service fund, and that all proceeds deposited in the Escrow Fund will be invested in permitted investments that do not earn interest at rates materially higher than the yield on the Bonds. Notwithstanding the foregoing, the City is to cause to be computed as and when required by Section 148 of the Code and 327951v3 AJP MN190-128 14 applicable Treasury Regulations (each such date a "Computation Date") all rebatable arbitrage earned with respect to nonpurpose investments made with gross proceeds of the Bonds. Payment of all rebate required to be made to the United States under the Lease shall be made from payments made by the City under Section 4.3(d) of the Lease or from other available funds held under this Bond Resolution. Such required rebate payments shall be made by the Authority in the minimum amounts required by said Section 148 and applicable Treasury Regulations not later than 60 days after each Computation Date. Not later than 60 days after the final Computation Date, the Authority shall, in accordance with instructions to be provided by the City, pay or cause to be paid from the sources described in the Lease and in this Bond Resolution, 100 percent of the aggregate amount described above not theretofore paid to the United States. Notwithstanding any other provision of this Section, any requirement imposed hereunder maybe deemed inapplicable and of no force or effect if an opinion of Bond Counsel is rendered to the Authority to the effect that the failure to impose such requirement will not adversely effect the tax-exempt status of interest on the Bonds. 8.03. Private Activity Bond Status. The Authority further covenants not to use the proceeds of the Bonds or to cause or permit them or any of them to be used, in such a manner as to cause the Bonds to be "private activity bonds" within the meaning of Sections 103 and 141 through 150 of the Code. 8.04. Qualified Tax-Exempt Obli atg ions. In order to qualify the Bonds as "qualified tax- exempt obligations" within the meaning of Section 265(b)(3) of the Code, the Authority makes the following factual statements and representations: (a) the Bonds are not "private activity bonds" as defined in Section 141 of the Code; (b) the Authority hereby designates the Bonds as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; (c) the reasonably anticipated amount oftax-exempt obligations (other than any private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the Authority (and all subordinate entities of the Authority) during calendar year 2008 does not and will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the Authority during calendar year 2008 have been or will be designated for purposes of Section 265(b)(3) of the Code. 8.05. Procedural Requirements. The Authority will use its best efforts to comply with any federal procedural requirements which may apply in order to effectuate the designations made by this Section. Section 9. No Official Statement or Prospectus. It is determined that no official statement or prospectus has been prepared or circulated by the Authority in connection with the sale 327951v3 AJP MN190-128 1$ of the Bonds and that the Purchaser has made its own investigations concerning the City as set forth in an investment letter of even date, receipt of which is hereby acknowledged. Section 10. No Requirement of Continuing Disclosure. Participating underwriters need not comply with the continuing disclosure requirements of Rule 15c2-12 promulgated by the Securities and Exchange Commission under the Securities Exchange Act of 1934 (the "Rule"), because the Bonds (i) are offered in authorized denominations of $100,000 or more; and (ii) will be sold to no more than thirty-five persons each of whom the Purchaser reasonably believes (A) has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the prospective investment; and (B) is not purchasing for more than one account or with a view to distributing the Bonds. Consequently, neither the Authority nor the City will enter into any undertaking to provide continuing disclosure of any kind with respect to the Bonds. Section 11. Defeasance. Section 11.01. Pa~rrlent and Discharge of Bonds. If the City or the Authority, their successors or assigns, shall: (a) pay or cause to be paid the principal of and interest on the Bonds at the time and in the manner stipulated therein and herein, or (b) provide for the payment of principal of the Bonds and interest thereon by depositing with the Registrar at or at any time before maturity amounts sufficient either in cash or in direct obligations of or obligations fully guaranteed as to principal and interest by the United States of America, the principal and interest on which when due and payable (or redeemable at the option of the holder thereof but not at the option of the issuer thereof) and without consideration of any reinvestment thereof shall be sufficient, to pay the entire amount due or to become due thereon for principal and interest to maturity of all said Bonds, or (c) deliver to the Registrar (1) proof satisfactory to the Registrar that notice of extraordinary redemption of all of the Bonds not surrendered or to be surrendered to it for cancellation has been given or waived pursuant to this Bond Resolution, or that arrangements satisfactory to the Registrar have been made insuring that such notice will be given or waived, or (2) a written instrument executed by the Authority and expressed to be irrevocable, authorizing the Registrar to give such notice for and on behalf of the Authority, or (3) a waiver of such notice of extraordinary redemption signed by the Owners of all outstanding Bonds, and in any such case, deposit with the Registrar before the date on which such Bonds are to be redeemed, as provided in this Bond Resolution, the entire amount of the extraordinary redemption price, including accrued interest, either in cash or direct obligations of or obligations fully guaranteed as to principal and interest by the United States of America and described below (which do not permit the prior redemption thereof at the option of the issuer) in such aggregate face amount, bearing interest at such rates and maturing at such dates as shall be sufficient to provide for the payment of such extraordinary redemption price on the date the Bonds are to be 327951v3 AJP MN190-128 16 redeemed and on such prior dates when principal of and interest on the outstanding Bonds is due and payable, and surrender to the Registrar for cancellation all Bonds for which payment is not so provided, and shall also pay all other sums due and payable hereunder by the Authority or the City, provided that if Bonds are to be defeased under either paragraph (b) or (c) above, an opinion of counsel by nationally recognized bond counsel shall be rendered to the Registrar to the effect that the tax-exempt status of interest on the Bonds shall not be impaired thereby, then and in that case, the Site and the Facilities shall revert to the Authority and the City as their interests may appear, and the entire right, title and interest of the Registrar and of the registered Owners of the Bonds in respect thereof shall thereupon cease, determine and become void; and the Registrar in such case, upon the cancellation of all Bonds for the payment of which cash or securities shall not have been deposited in accordance with the provisions of this Bond Resolution, shall, upon receipt of a written request of the Authority and of a certificate of the Authority and an opinion of counsel as to compliance with conditions precedent, and at the City's cost and expense, execute to the Authority, or its order, proper instruments acknowledging satisfaction of this Bond Resolution and surrender to the Authority and the City, as their interests appear, all cash and deposited securities, if any (other than cash or securities for the payment of the Bonds and interest thereon), which shall then be held hereunder. The investments for a defeasance must consist solely of one or more of the following: (i) cash; (ii) State and Local Government Series issued by the United States Treasury; (iii) United States Treasury bills, notes and bonds, as traded on the open market; (iv) Zero Coupon United States Treasury Bonds; and (v) Refcorp Interest Strips (stripped by the Federal Reserve Bank of New York). Nothing contained in this Section shall be construed to prohibit the defeasance of one or more, but not all, series of Bonds by any of the methods set forth in clause (a), (b) or (c) above, as the same would apply to the particular series of Bonds being discharged. 11.02. Bonds Deemed Not Outstanding After Deposits. When there shall have been deposited at any time with the Registrar for the purpose, cash or direct obligations of or obligations fully guaranteed by the United States of America the principal and interest on which shall be sufficient to pay the principal of any Bonds when the same become due, either at maturity or otherwise, or at the date fixed for the extraordinary redemption thereof, and to pay all interest with respect thereto at the due dates for such interest to maturity or to the date fixed for extraordinary redemption, for the use and benefit of the registered Owners thereof, then upon such deposit all such Bonds shall cease to be entitled to any lien, benefit or security of this Bond Resolution except the right to receive the funds so deposited, and such Bonds shall be deemed not to be outstanding hereunder; and it shall be the duty of the Registrar to hold the cash and securities so deposited for the benefit of the registered Owners of such Bonds, and from and after such date, extraordinary redemption date or maturity, interest on such Bonds called for redemption shall cease to accrue. 11.03. Unclaimed Money To Be Returned. Any moneys deposited with the Registrar pursuant to the terms of this Bond Resolution, for the payment of Bonds and remaining 327951v3 AJP MN190-128 17 unclaimed by the registered Owners of such Bonds on the date fixed for extraordinary redemption of the same, as the case may be, for a period of three (3) years after the due date, shall, upon the written request of the City, and if the Authority or any successor to the obligations of the Authority under this Bond Resolution and the Bonds shall not at the time, to the knowledge of the Registrar, be in default with respect to any of the terms and conditions contained in this Bond Resolution or in such Bonds, be paid to the City, and such registered Owners of the Bonds shall thereafter look only to the City for payment and then only to the extent of the amounts so received without interest thereon; PROVIDED, HOWEVER, that within thirty (30) days prior to the expiration of the three (3) year period mentioned above, the Registrar, before being required to make any such repayment, may, at the expense of the City cause to be published in a newspaper or journal devoted to financial news circulated in Minneapolis or St. Paul, Minnesota, a notice that after a date named therein said moneys will be returned to the City. If the City does not request that the money be returned to the City, the Registrar shall pay the money over to the State of Minnesota in accordance with applicable law. [The remainder of this page is intentionally left blank.] 327951v3 AJP MN190-128 I8 Approved by the Board of Commissioners of the City of Monticello Economic Development Authority this 30th day of January, 2008. President ATTEST: 327951v2 AJP MN190-128 19 STATE OF MINNESOTA ) COUNTY OF WRIGHT ) SS. CITY OF MONTICELLO ) I, the undersigned, being the duly qualified and acting Executive Director of the City of Monticello Economic Development Authority, do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a special meeting of the Authority held on January 30, 2008 with the original minutes on file in my office and the extract is a full, true and correct copy of the minutes insofar as they relate to the issuance and sale of $6,180,000 Public Project Revenue Refunding Bonds, Series 2008A of the Authority. sT WITNESS My hand officially as such Executive Director and the corporate seal of the Authority this j~ ~Y of O.M. 6,t~ 2008. Executive Director (SEAL) 327951v3 AJP MN190-128 20 RESOLUTION NO. 2008-01 CITY OF MONTICELLO ECONOMIC DEVELOPMENT AUTHORITY RESOLUTION AUTHORIZING ACCEPTANCE OF PROPOSAL FOR THE SALE OF PUBLIC PROJECT REVENUE REFUNDING BONDS, SERIES 2008A (CITY OF MONTICELLO, MINNESOTA LEASE OBLIGATION) BE IT RESOLVED By the Board of Commissioners of the City of Monticello Economic Development Authority (the "Authority"), as follows: Section 1. Recitals. 1.01. The City of Monticello, Minnesota (the "City") is authorized by Minnesota Statutes, Section 465.71, as amended, to acquire real and personal property under lease-purchase agreements. 1.02. Pursuant to a Ground Lease, dated as of December 1, 1998 and amended as of March 1, 2000, between the City and the Housing and Redevelopment Authority in and for the City of Monticello, Minnesota (the "HRA"), the HRA acquired a leasehold interest from the City in certain property located within the City (the "Site"). 1.03. Pursuant to aLease-Purchase Agreement, dated as of December 1, 1998 between the HRA and the City, the HRA leased the Site to the City in connection with the acquisition, construction and equipping of a community center, armory and city hall (the "Facilities") financed by the issuance of the HRA's $7,385,000 Temporary Public Project Revenue Bonds, Series 1998 (the "Series 1998 Bonds"). 1.04. The HRA refunded the Series 1998 Bonds by the issuance of its $7,555,000 Public Project Revenue Bonds, Series 2000A (the "Series 2000A Bonds"), which issuance required an Amendment No. 1 to the Lease-Purchase Agreement, dated as of March 1, 2000. 1.05. By Resolution No. 2007-85, adopted on October 22, 2007, the City Council of the City transferred the control, authority and operation of all projects of the HRA, including the Series 2000A Bonds and all agreements related thereto, to the Authority, pursuant to Minnesota Statutes, Section 469.094, Subdivision 2. 1.06. The Authority is authorized by Minnesota Statutes, Chapter 469, as amended, to issue and sell revenue bonds to finance the construction of the Facilities and related costs, and to issue bonds to refund such bonds. 1.07. In order to refund the Series 2000A Bonds in advance of maturity, the Authority authorized Ehlers & Associates, as financial advisor to the Authority, to solicit proposals for the sale of a series of revenue bonds in the aggregate principal amount of $6,180,000, designated as "Public Project Revenue Refunding Bonds, Series 2008A (City of Monticello, Minnesota Lease 327442v1 AJP MN190-128 Obligation)" (the "Bonds"), pursuant to a resolution adopted by the Authority on December 18, 2007. 1.08. The Authority's terms of proposal for the sale of the Bonds assumed a public sale of the Bonds and issuance thereof pursuant to a trust indenture, to be entered into by the Authority and a bond trustee. 1.09. The Authority received a commitment letter from Banc of America Public Capital Corp (the "Purchaser") on January 16, 2008 (the "Commitment"), requesting private placement of the Bonds with the Purchaser. 1.10. The Commitment does not include elements typically required of a public sale of lease-revenue bonds, such as a trust indenture, trustee, or paying agent. Section 2. Authorization. 2.01. The proposal of the Purchaser, substantially in the form contained in the Commitment on file with the Authority, is hereby approved, and the Authority's Executive Director is authorized to execute the Commitment. 2.02. Issuance and delivery of the Bonds to the Purchaser is contingent upon the Authority and the City Council of the City approving the terms of the sale of the Bonds in a sale resolution, as well as related documents related to the lease of the Site and the Facilities and an escrow agreement between the Authority and an escrow agent. 2.03. The Authority shall consider the terms of the sale of the Bonds at its next scheduled regular meeting or a special meeting called as soon as practicable after the adoption of this Resolution. (The remainder of this page is intentionally left blank.) 327442v1 AJP MN190-128 2 Approved by the Board of Commissioners of the City of Monticello Economic Development Authority this 16th day of January, 2008. r ,. %~Z ~'',~'~'J~R President ATTEST: 327442v1 AJP MN190-128