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City Council Resolution 2015-58CITY OF MONTICELLO WRIGHT COUNTY, MINNESOTA RESOLUTION NO. 2015 -058 ACCEPTING THE OFFER OF THE MINNESOTA PUBLIC FACILITIES AUTHORITY TO PURCHASE A GENERAL OBLIGATION SEWER REVENUE NOTE SERIES 2015A IN THE ORIGINAL AGGREGATE PRINCIPAL AMOUNT OF $2,391,483.00, PROVIDING FOR ITS ISSUANCE, AND AUTHORIZING THE EXECUTION OF A PROJECT LOAN AGREEMENT AND OTHER RELATED DOCUMENTS. BE IT RESOLVED By the City Council of the City of Monticello, Minnesota (the "City"), as follows: Section 1. Recitals. (a) The Minnesota Public Facilities Authority (the "PFA ") is authorized pursuant to Minnesota Statutes, Chapter 446A, as amended, and Minnesota Rules, Chapter 7380, as amended, to issue its bonds (the "PFA Bonds ") and to use the proceeds thereof, together with certain other funds of the agency available for such purpose in the Clean Water Revolving Fund, to provide loans to political subdivisions of the State of Minnesota (the "State ") to 'and eligible costs of construction of sanitary sewer collection systems (the "Program"). (b) The City is authorized to issue its obligations pursuant to Minnesota Statutes, Chapter 475, as amended, and Minnesota Statutes, Sections 115.46 and 444.075 (collectively, the "Act "), for the purpose of financing the construction of a chemical feed system for phosphorus removal and improvements to digesters (the "Project "). (c) The City has applied for a loan from the PFA pursuant to the Program, and the PFA has committed to make a loan to the City in the principal amount of $2,391,483, to be disbursed and repaid in accordance with the terms of a Bond Purchase and Project Loan Agreement, dated July 14, 2015 (the "Project Loan Agreement "), to be executed by the City and the PFA, in substantially the form now on file with the City Administrator and attached hereto as EXHIBIT A. The Project Loan Agreement, as executed, is incorporated herein by reference. The execution of the Project Loan Agreement is in accordance with the terms hereof. In addition, PFA will be providing a Point Source Implementation Grant in the amount of $1,165,043 (the "Grant ") to help finance the Project, pursuant to a Point Source Implementation Grant Project Grant Agreement, dated July .14, 2015 (the "Grant Agreement "), to be executed by the City and the PFA, in substantially the form now on file with the City Administrator. (d) In accordance with Section 475.60, subdivision 2(4) of the Act, the City is authorized to issue obligations to a board, department or agency of the State by negotiation and without advertisement for bids and the PFA is, and has represented that it is, a board, department or agency of the State. (e) Contracts for the Project have been or will be made by the City with the approval of the PFA and all other State and federal agencies of whose approval is required. 464960v1 MNI MN190 -149 Section 2. Acceptance of Offer; Payment. (a) The City hereby accepts the offer of the PFA to purchase the General Obligation Sewer Revenue Note, Series 2015A (the "Note "), to be issued by the City in the original aggregate principal amount of $2,391,483 at the rate of interest hereinafter set forth, and to pay therefor the par amount of the Note as provided below, and the sale of the Note is awarded to the PFA. Payment for the Note is to be disbursed in installments as eligible costs of the Project are reimbursed or paid, all as provided in the Project Loan Agreement. The terms set forth in this resolution relating to the Note are intended to be consistent with the provisions of the Project Loan Agreement, and to the extent that any provision in the Project Loan Agreement is in conflict with this resolution, the Project Loan Agreement shall control. (b) The Note is to be issued in the aggregate principal amount of $2,391,483, originally and nominally dated as of the date of delivery as a fully registered Note without coupons. The Note will be in the denomination of the entire principal amount thereof, numbered R -1, and will bear interest and mature in installment amounts as specified in EXHIBIT B attached hereto. (c) The Note is subject to redemption and prior payment as provided in the Project Loan Agreement. (d) Interest and principal in the installment amounts set out in the Note are payable by wire transfer, or if by check or draft of the City or its designated Registrar, mailed no later than five (5) business days prior to the payment date to the registered holder thereof at the holder's address as it appears on the bond register at the close of business on the fifteenth (15th) day (whether or not a business day) immediately preceding the interest payment date. Section 3. Date; Denomination; Interest Rate. The Note will be a fully registered negotiable obligation, dated as of date of delivery and issued forthwith. The Note shall be issued in substantially the form attached hereto as EXHIBIT B. Section 4. Execution. The Note is to be executed on behalf of the City by the manual or facsimile signatures of its Mayor and City Administrator, and is to be authenticated by the manual signature of the City Administrator, acting as authenticating agent of the City. In the event of disability or resignation or other absence of any of such officers, the Note may be signed by any officer who is authorized to act on behalf of such absent or disabled officer. If an officer whose signature will appear on the Note ceases to be such officer before the delivery of the Note, such officer's signature will nevertheless be valid and sufficient for all purposes, the same as if such officer had remained in office until delivery. Section 5. Delivery; Application of Proceeds. The Note when so prepared and executed will be delivered by the City Administrator to the PFA prior to disbursements pursuant to the Project Loan Agreement and the purchaser is not obliged to see to the proper application thereof. Section 6. Sewer Fund and Accounts. There shall be created and maintained a separate fiend in the City treasury designated as the Sewer Fund (the "Sewer Fund"). The City Administrator and all municipal officials and employees concerned therewith will establish and maintain financial records of the receipts and disbursements of the municipal sanitary sewer system (the "Sanitary Sewer System") in accordance with this resolution. There will be maintained in the Sewer Fund, in addition to any accounts previously created, the following three (3) separate accounts: (a) A Capital Account to which will be credited all proceeds from the sale of the Note. The Note is the only source of money to be credited to the Capital Account. It is recognized that the sale proceeds of the Note are received in reimbursement for costs expended on the Project or in direct 464960v1 MNIMN190 -149 2 payment of such costs, and that accordingly the money need not be placed in the Capital Account upon receipt but may be applied immediately to reimburse the source from which the expenditure was made. Money in the Capital Account is to be used solely for the purpose of paying for the cost of constructing the Project, including all costs enumerated in Section 475.65 of the Act, provided that such money may only be expended for costs and expenses which are permitted under the Project Loan Agreement. The PFA prohibits the use of proceeds of the Note to reimburse costs initially paid from proceeds of other obligations of the City unless otherwise specifically approved by the PFA. Upon completion of the Project and the payment of the costs thereof, any surplus is to be transferred to the Debt Service Account. (b) An Operation and Maintenance Account into which are to be paid all gross revenues and earnings derived from the operation of the Sanitary Sewer System, including all charges for the service, use and availability of and connection to the Sanitary Sewer System, when collected, and all money received from the sale of any facilities or equipment of the Sanitary Sewer System or any by- products thereof. From this account there will be paid all the normal, reasonable and current costs of operating, maintaining, and insuring the Sanitary Sewer System, including salaries, wages, costs of materials and supplies, necessary legal, engineering and auditing services, and all other items that, by sound accounting practices, constitute normal, reasonable and current costs of operating and maintenance, but excluding an;, allowance for depreciation, extraordinary repairs and payments into any debt service account. All money remaining in the Operation and Maintenance Account after paying or providing for the foregoing items constitutes, and is referred to in this resolution as, "net revenues." (c) A Debt Service Account into which are irrevocably pledged or credited (i) net revenues of the Sanitary Sewer System in an amount sufficient, with other money, to pay the principal of and interest on the Note when due; (ii) all collections of taxes which may hereafter be levied for the payment of the principal of and interest on the Note; (iii) all investment earnings on money held in the Debt Service Account; (iv) any amounts transferred from the Capital Account; and (v) any other money which is properly available and is appropriated by the City Council to the Debt Service Account. The money in this account may be used only to pay or prepay the principal of the Note and to pay interest on the Note and any other obligations hereafter issued and made payable from this account, and to pay any rebate due to the United States with respect to the PFA Bonds in connection with the Note. (d) Excess net revenues not required for the purposes of the Sewer Fund may be used for any proper municipal purpose. No portion of the proceeds of the Note may be used directly or indirectly to acquire higher yielding investments, or to replace funds which were used directly or indirectly to acquire higher yielding investments, except (i) for a reasonable temporary period until such proceeds are needed for the purpose for which the Note was issued, and (ii) in addition to the above in an amount not greater than the lesser of five percent (5 %) of the proceeds of the Note or $100,000. To this effect, any proceeds of the Note or any sums from time to time held in the Capital Account (or any other City account which will be used to pay principal of or interest on the Note) in excess amounts which under then applicable federal arbitrage regulations may be invested without regard to yield will not be invested at a yield in excess of the applicable yield restrictions imposed by the arbitrage regulations on such investments after taking into account any applicable "temporary periods" or "minor portion" made available under the federal arbitrage regulations. In addition, money in the Sewer Fund will not be invested in obligations or deposits issued by, guaranteed by or insured by the United States or any agency or instrumentality thereof if and to the extent that such investment would cause the Note to be 464960vl MNI MN190 -149 "federally guaranteed" within the meaning of Section 149(b) of the Internal Revenue Code of 1986, as amended (the "Code "). The City will observe the covenants of Sections 14, 15, 16, and 17 of this resolution and of Article III of the Project Loan Agreement with regard to the Sewer Fund. Section 7. Coverage Test; Pledge of Net Revenues, Excess Revenues. It is found, determined and declared that the net revenues of the Sanitary Sewer System are sufficient in amount to pay one hundred five percent (105 %) of the principal of and interest on the Note when due, and the net revenues of the Sanitary Sewer System are pledged to the payment of the Note, but solely to the extent required to meet, with other pledged sources, one hundred five percent (105 1/6) of the principal and interest requirements of-the Note as the same become due. Section 8. Pledge to Produce Revenues. In accordance with the Act the City hereby covenants and agrees with the holder of the Note that it will impose and collect charges for the service, use and availability of any connection to the Sanitary Sewer System at the times and in the amounts required to produce net revenues adequate to pay all principal and interest when due on the Note. Section 9. General l Obligation Pledge. The full faith and credit and tax?ng powers of the City will be and are irrevocably pledged for the prompt and full payment of the principal of and interest on the Note as the same respectively become due. If the net revenues of the Sanitary Sewer System appropriated and pledged to the payment of principal of and interest on the Note, together with other funds irrevocably appropriated to the Debt Service Account referred to in Section 6, are at any time insufficient to pay such principal and interest when due, the City covenants and agrees to levy, without limitation as to rate or amount, an ad valorem tax upon all taxable property in the City sufficient to pay such principal and interest as the same become due. If the balance in the Debt Service Account is ever insufficient to pay all principal and interest then due on the Note and any other obligations payable therefrom, the deficiency will be promptly paid out of any other funds of the City which are available for such purpose, and those other funds may be reimbursed, with or without interest, from the Debt Service Account when a sufficient balance is available in that account. Section 10. Certificate of Registration. The City Administrator is authorized and directed to file a certified copy of this resolution with the County Auditor/Treasurer of Wright County, Minnesota (the "County Auditor/Treasurer"), together with such other information as the County Auditor/Treasurer may require, and to obtain the certificate of the County Auditor/Treasurer that the Note has been entered in the Bond Register of the County Auditor/Treasurer. Section 11. Project Loan Agreement. The Project Loan Agreement is approved in substantially the form presented to the City Council of the City, and in the form executed is incorporated by reference and made a part of this resolution. The provisions of this resolution relating to the Note are intended to be consistent with the provisions of the Project Loan Agreement, and to the extent that any provision in the Project Loan Agreement is in conflict with this resolution as it relates to the Note, that provision controls. The execution and delivery of the Project Loan Agreement by the Mayor and City Administrator are hereby authorized and ratified. The execution of the Project Loan Agreement by the appropriate officers is conclusive evidence of the approval of the Project Loan Agreement in accordance with the terms hereof. The Project Loan Agreement may be attached to the Note, and must be attached to the Note if the holder of the Note is any person other than the PFA. Section 12. Grant Agreement. The Grant Agreement is approved in substantially the form presented to the City Council, and in the form executed is incorporated by reference and made part of this resolution. The execution and delivery of the Grant Agreement by the Mayor and City Administrator are 464960v1 MNI MN190 -149 4 hereby authorized and ratified. The execution of the Grant Agreement by the appropriate officers is conclusive evidence of the approval of the Grant Agreement in accordance with the terms hereof. Section 13. Records and Certificates. The officers of the City are hereby authorized and directed to prepare and furnish to the PFA, and to the attorneys approving the legality of the issuance of the Note, certified copies of all proceedings and records of the City relating to the Note and to the financial condition and affairs of the City, and such other affidavits, certificates and information as are required to show the facts relating to the legality and marketability of the Note as the same appear from the books and records under their custody and control, or as otherwise known to them, and all such certified copies, certificates and affidavits including any heretofore furnished, are to be deemed representations of the City as to the facts recited therein. Section 14. Negative Covenants as to Use of Proceeds and Project. The City covenants not to use the proceeds of the Note or to use the Project, or to cause or permit them to be used, or to enter into any deferred payment arrangements for the cost of the Project, in such a manner as to cause the Note to be a private activity bond within the meaning of Sections 103 and 141 through 150 of the Code. The City reasonably expects that no actions will be taken over the term of the Note that would cause it to be a private activity bond, and the average term of the Note is not longer than reasonably necessary for the governmental purpose of the issue. The City covenants not to use the proceeds of the Note in such a manner as to cause the Note to be a "hedge bond" within the meaning of Section 149(8) of the Code. Section 15. Tax- Exempt Status of the Note, Rebate. The City will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the Note, including without limitation (i) requirements relating to temporary periods for investments; (ii) limitations on amounts invested at a yield greater than the yield on the PFA Bonds; and (iii) the rebate of excess investment earnings to the United States. Section 16. Tax - Exempt Status of the PFA Bonds; Rebate. The City, with respect to the Note, will comply with requirements necessary under the Code to establish and maintain the exclusion from gross income under Section 103 of the Code of the interest on the PFA Bonds, including without limitation (i) requirements relating to temporary periods for investments; (ii) limitations on amounts invested at a yield in excess of the applicable yield restrictions imposed by the Code; and (iii) the rebate of excess investment earnings to the United States. The City covenants and agrees with the PFA and holders of the Note that the investments of proceeds of the Note, including the investment of any revenues pledged to the Note which are considered gross proceeds of the PFA Bonds under the applicable regulations, and accumulated sinking funds, if any, will be limited as to amount and yield in such manner that the PFA Bonds will not be arbitrage bonds within the meaning of Section 148 of the Code and any regulations thereunder. On the .basis of the existing facts, estimates and circumstances, including the foregoing findings and covenants, the City certifies that it is not expected that the proceeds of the Note will be used in such manner as to cause the PFA Bonds to be arbitrage bonds under Section 148 of the Code and any regulations thereunder. The Mayor and the City Administrator will furnish a certificate to the PFA embracing or based on the foregoing certification at the time of delivery of the Note to the PFA. Section 17. Qualified Tax - Exempt Obligations. In order to qualify the Note as a "qualified tax - exempt obligation" within the meaning of Section 265(b)(3) of the Code, the City makes the following factual statements and representations: (a) the Note is not a "private activity bond" as defined in Section 141 of the Code; (b) the City designates the Note as a "qualified tax- exempt obligation" for purposes of Section 265(b)(3) of the Code; 464960v1 MINI MIN 190 -149 (c) the reasonably anticipated amount of tax- exempt obligations (other than private activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the City (and all subordinate entities of the City) during calendar year 2015 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during calendar year 2015 have been designated for purposes of Section 265(b)(3) of the Code. Section 18. Reimbursement Intent. The City has incurred certain expenditures with respect to the Project that were financed temporarily from other sources but are expected to be reimbursed with proceeds of the Note. The City makes the following declaration of official intent to reimburse certain costs from the proceeds of the Note (the "Declaration") pursuant to Section 1.150 -2 of the Treasury Regulations (the "Reimbursement Regulations "): (a) The City reasonably expects to reimburse the expenditures made for certain costs of the Project from the proceeds of the Note in an estimated maximum principal amount of $2,391,483. All reimbursed expenditures will be capital expenditures, costs of issuance of the bonds, or other expenditures eligible for reimbursement under Section 1.150- 2(d)(3) of the Reimbursement Regulations. (b) This Declaration has been made not later than sixty (60) days after payment of any original expenditure to be subject to a reimbursement allocation with respect to the proceeds of Note, except for the following expenditures: (a) costs of issuance of bonds; (b) costs in an amount not in excess of $100,000 or five percent (5 %) of the proceeds of an issue; or (c) "preliminary expenditures" up to an amount not in excess of twenty percent (20 %) of the aggregate issue price of the issue or issues that finance or are reasonably expected by the City to finance the project for which the preliminary expenditures were incurred The term "preliminary expenditures" includes architectural, engineering, surveying, bond issuance, and similar costs that are incurred prior to commencement of acquisition, construction or rehabilitation of a project, other than land acquisition, site preparation, and similar costs incident to commencement of construction. (c) This Declaration is intended to constitute a declaration of official intent for purposes of the Reimbursement Regulations. Section 19. Severability. If any section, paragraph or provision of this resolution is held to be invalid or unenforceable for any reason, the validity or unenforceability of such section, paragraph or provision will not affect any of the remaining provisions of this resolution. Section 20. Headings. Headings in this resolution are included for convenience of reference only and are not a part hereof, and do not limit or define the meaning of any provision hereof. ADOPTED BY the City Council of the City of Monticello, Minnesota, thL.2-,7,'- of July, 2015. Brian Stumpf, Mayor ATTEST: Je , City Administrator 464960v1 MNI MN190 -149 6 Extract of Minutes of Meeting of the City Council of the City of Monticello, Wright County, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Monticello, Minnesota, was duly held in the City Hall in said City on Monday, July 27, 2015, commencing at 6:30 P.M. The following members were present: Mayor Brian Stumpf; Council Members Charlotte Gabler, Lloyd Hilgart, Tom Perrault, and Glen Posusta. and the following were absent: (None) The resolution was presented with the consent agenda by Member Tom Perrault, who moved its adoption; The motion for the adoption of the consent agenda was duly seconded by Member Lloyd Hilgart, and upon vote being taken thereon the following members voted in favor of the motion: Mayor Brian Stumpf, Council Members Charlotte Gabler, Lloyd Hilgart, Tom Perrault, and Glen Posusta. and the following voted against: (None) whereupon the resolution was declared duly passed and adopted. 464960v1 MNI MN 190-149 7 1:11: PROJECT LOAN AGREEMENT 464960v1 MNIMN190 -149 A -1 .8HN'-N'ESOTA PUBLIC FACILITIES AUTHORITY BOND PURCHASE AND PROJECT LOAN- AGREENTEEINT CLEAN WATER REVOLNT' G FU NM LO MN i T-AX-EXEIMPTNote from Borrowef) .NIPFA-1"004-R-FY16 THIS BOND PURCIUSE AND PROJECT LOAN AGREEMENT tthe "Agreement`*.), is between the Minnesota Public Facilities Authority i die "Authority") and the City of 'Monticello I the " Borrowef ) wid is dated July 14.2015. ARTICLE I - TERMS AND C T'ONDITIOS A Section 1.1. Terms. The Authority hereby comnifts, subject to 7the availability of funds and the conditions hereinafter set forth. and pursuant to.Mimesota Statutes, Stcaou 446A.0- .is amended, and 'Minnesota Rules, Chapter -380, as amended to provide TWO INIELLIONT THREE HUNDRED NriETY ONE THOUSAND FOUR HUNDRED EIGHTY THREE DOLIARS (S2,391,483) to the Borrower for the purpose of financing eligible project costs of the Clean Water Revoix-mg Fund project descrit as folloA-s: construction of chemical feed system for phosphorus removal and unprovements to digesters all as detailed in the project :eiTificalion dated June 3350, 2015 fthe -R.Djecr-i. The Pr,,-ljcct is funhet (kszribed in the Bon�oiver's application which is incorporated herein, The Project financing consists of a loan from the Clean NVoter Revolving Fund in the amount of TWO N11ILLION THREE HUN-DRED INTINETY ONE THOUSAN'D FOUR HUNDRED EIGHTY THREE DOLLARS (S2,391,493) (the "Loan") which shall be evidenced by the Note de -scribed in Section 1.3 of thi,4 Agreement (the -Note-i. The final maturity date of the Loan s ill be August 20, 2035. The aggregate principal amount of the Loan disbur,-ed and outstanding vdll bear interest and servicing fees collect.hi•ely at the rate of 1.063% per annum accruing from and after- the date of the Note described in Section 1.3 through the date on NNhich no principal of the Loan remain unpaid and all accmed interest and servicing fees therrou have bem paid. Section 1.2. Authoritv Sources of Funds The Borrower azkmowledges that the Loan provided by the Authority uuy be funded with the proceeds of one or more series of the Autharity's revenue bonds sthe "BcG&" federal capitalization grants, proceeds of state general obligation bonds or other ftuids- of the Nu uthority may, at any time� pledge the L -f , , -thonty. or a combination thereof. and that the A oan a-, iecurit5 or its Bonds. The Authority in its sole discretion may allocate the Loan to one or more such smirces of funds and .mar from time to time reallocate the Loan to one or more different sources of funds., mcludikiz one or more different series of Bonds OvIiether-or not such series of Bond,. refunded the series of Bands to which the Loan was originally allocate&, or may sell the Loan if permitted by the documents relating to its Bonds. At the written request of the Borro-A er. the Authority will proMe mb-ormation lNith rcspect to the Amdmg- of the Loan, from time to time, in such detail as may be reasonably required for the purpose of assisting the Borrower in complying --Mth any provision of Article III of this Agreement Section 1.3. Secui& (a) The Borrower shall issue to the Authorinr its General Obligation Re= enue'Note +the "Note" ' ), evidencing its obligation to repay the Loan. It is a condition of any disbursements hereunder that the Borrower deliver to the Authority the executed '-Note, a certified copy of resolution., or other authority by the fipprvpiiate governing body- or bodies as -41all legally authorize the execution =-d perfanriance of this Agreement and the Note, and such opinions, certificates and docuirients, as requested by and in a form acceptable to the Authority. SRF-Mai,wTeaVlaw. ew. Page I of 11 C%MF—M09bCeH0 T-1 (*;. T' 1-5 Tiny KX-15 464960v1 NIMMN190-149 A-2 kb i The BonoNx er hereby represents and specificallc agrees that the Note constitutes a 2eneral obligation debt of the Borrower and Nvill be shown as such ce its financial statements a W be treated in all respects ai, a general obligation debt of the Borrower. For purposes of permittmg sale of the Note to the Authority, the Authority represents that it is a "board, depa-tnmt or agency" of the State of -NI mnesota widen the meaning Of Minnesota Statutes. Section 475.60, subdt%*ion �, clause {4k. as amended. tc) The obligations of the Borrower under the Note evidence amoun, payable under the Loan. Each payment made pursuant, to the Note -Aill be deemed tai be a ciedit against the corresponding obligation -,f the BorrmAer under the Loan and any such pa�anent will fulfill the Borrower's "'bligation to pay such amoi= hemundei. Section 1.4. Disbursements. i a � No funds will be disbursed b-v• the Authontv to the Bonower until the Bonowei, has delivered its Note to the Authonty as set forth in Section 1.3. (b i All Borrower Islnu-Atmeut requests will, be subject to Autdiority appTeval and v-U be disbursed on a cost reimbursement basis, con:i,- tent ,,Alth the -budget presented in the Borrower's application. The Authority may withhold or disallow all or part of the amount requested if the Authority determines the request is not in compliance ikith this Apt-= eir- applienble federal and state Law-- regullbons 01 rules as then in efec ic) The Audioliny x%iff disburse funds- pursuant to approved diiNriement requests complying with the provisions of this Age—ement Each disburwment request must be for eligible costs for co fete work on the Project and nm-.t be sub=tted at such deadline-, established by the Authority and an a form prescribed by the Authority. Each disbursement request nuist include supporting invoices and billing statements and be signed by an employee or elected official of the Borrower. 0) The Authority will reimburse the Borrower for eligible Project costs incurred prior to the execution of this Agreement only to the extent approved in connect-ton with the Audioritv*s approval of the Borrower's application. The Authority rc-erves the right to reimbur"Ie the Borro-wer for approved costs incim-ed prior to the execution of this Agreement by making disbursements therefor over a &o-Near period in eight equal quarterly payments. (e) Disbursements will be made try the Authority to the Borrower x-dthin 30 days of receipt of the Borrower's request- rimless the Authcqin, deteiinines to witfihold disbursement in acct4 ice with the pik visions of this A=ement. The Authority will endeavor to pay disbursement requests submitted by the Borraiver not later tlh w the I 'I;" day of the mc�nth by the 215°' day of the same month. (D If the entire amount specified in Section 1.1 is not fiffly disbursed by June 30. 2019, no ft-ther, disbursements AU be made, In zwh event or if final eligible Project costs are less than the total financi4 amount specified in Section 1.1- the uudi.,bursed balance if the Loan amount notdistqn-A will be applied to the outstanding principal insiallments of the Loan on a pro rams basis or as otherwise determined by the Authority. The Authoriti will revise Exhibit A to this Agreement to reflect the reduction m principal amount and promptly deliver a copy to the Bomaiver. Section 1.5. 'Mandatorv, Pavment-,- a�i The principal amount -3f the Loan, together xNith accrued interest and servicing fees collectively, Nkill be repaid in the amounts and on the dates set forth in Exhibit A attached hereto (novx thstanding the rate of .Jisbimiemeat of the proceeds of the Loaw. subject to adjustment aw set forth in Section 14 or 1.6. The interest payment shcmmon Exhibit A is for inforinational purpc,�.-.esoiily, the &-MA interest paymient will be the amount of interest which has accrued to the date of pa4nient. The Awthority will be entitled to retain for its own purposes any interest eirukgs cm Loan prwceeds that are not disbursed and Avill not be obligated to credit against tiny required iepayment of principal or palmient of interest and sen-icing fees any such interest earnings. Any pay rnent of principal or interest received by the Authority in excess of the zmmints set forth in Exhibit A, as then in effect, which is not a. matiLtory W-Mai,trTeoplivmcm Page Z oflI CUTX-N-'GnftceIIo' 1fev,74) Jal� 14,20.5 464960A NMI MN190-149 A-3 M'ineiit as desi_qiated in paragr- aph (b*i, or not expressly designated by the Borrower to be treated as an optional prepayment may., in the sole discretion of the Alrthority, be q) 'held without interest pay-able by the Authority and applied to a future payment due on the Loan in a manner determined by the Ainhoriq% iii) treated as a piepaymemr of principal on the Loan, or 6ii; returned to the Borrower as on overpayment. Other than prepa3meats. the Andiwity will apply any payijients received under the Note as follows- first. to the payment of any costs or expense-, incurred by the --kuthority in enforcing any provii-Jonof the Note or this Agreement. second. to the payment of accrued and unpaid interest and setvicing fees on the Note. and third. to the payment ofprincipal zf the Note then due. Obi If !he Borrower has pledged to the repayment of the Loan revenues subject to prepayment or lump -slaty payment by a third party-, such as special assessments or connection charges fim another municipality, the Borrower agrees, to notify, the Amiltarity immediately upon receipt of any such paymient. The Authority, in its sale discretion, may direct the Borrower to use the funds for the payment of eIig ble construction casts of the Project, or to transmit the funds to the authority for payment on the Loan. immedin-tely or at a later date- Any such payment received by the Autherity may Ive applied to reduce each unpaid annual principal installment of the Loan in the proportion that such m5rallment bears- to the total of all unpaid principal installments, or. in the sole discretion of the Authority. array be applied to one or more future principal payments on the Loan in 3 manner determined by the Authority. Section 1.6. Optional Peery mwnh (A) The Loan may nw, be prepaid except upon iwitten consent of the Authoritv- If the Authority has consented, then upon 45 &N' prior -mmtten notice, to the Authority #or such lesser p-m'od as the Au"ty may accept),. the Borrower may prepay the Loan and the',,'+:ote- in v%Iiole or in part on any February 20 or August 2a at a price equal to 100% of the principal amount to be prepaid, together wil accrued interest and senticmg fees thereon to the redemption date and premium equal to all fees and expenses of the Authority, if any, in connection ix-Ith the ptep�mient, inchuhug any fees, expenses or other costs relating to the payment and redemption of its Bonds as detentlined by the Auffionty. T'he Authority may require that the Borrower, it its sole cost and expense. delwer to the Authority aji opinion from a law firm, elected by the Authority. having ariational reputation in the field of municipal law whose legal opinions are generally accepted by purchasas of municipal bonds t' "Bond Counsel"i to the effect that such prel�ayment yxU not cause the interest on the Note to be included in the ii"We of the recipient thereof for federal income tax purposes. (0 Airy prepagment of the Note shall be applied as follinvs: first, to the payment of fees, expenses and other costs of the Authority as provided in subsection (a;; second, to the payment of interest and servicing fee,, on the principal amount of the'Note to be prepaid; and, third, to the principal of the Note. The principal amount of a partial pitpaymew. Mll, in the sole discretion of the Authority. 6) be applied to one or imore ftlttire principal payments of the Loan in a manner determined by the Authority. or (iii be applied to reduce each unpaid :annual principal installment of the Loan in the proportion tLat:,uch installment bem - to the total of RU unpaid principal installments ".e.. the rmitning al pa�inetit scheduleMnall be re-amortized to prmide Princ ki .-I principal pi oportionately reduced principal patinents in each year i. SRF-Mawr a e.con Page 3 of 11 c '.ITX-II:MtPCOLo-2 (rev, 71�) JuIv 14,201' 464960v1 MNI MN190-149 A-4 ARTICLE H — BORROWER RESPONSIBILITIES AND PROJECT COMPLIANCE Section 2.1. Borrower Responsibilities with Respect to the Protect- 4,ki The Borrower shall meet Ml requirements in the loan application submitted to the kuthoritv as to Compliance wit federal and state laws. rules and reaulation-, and shall include in any contract or related to the Pri eject, provisions. requiring; cormtctor and subcontractor compliance with applicable state and federal late. The requirements, hiclaing compliance -%vith the reporting requirements of Miniieaota Stattutes. Section 16A.633 subdivision 4, "Report on Jobe Created or Retained7- in such loan application are hereby incorporated by reference. i b s The Borrower agrees to commence construction and complete the Project ath reasonable diligence. regardless of the sufficiency of loans or grants therefor fi-om the Authority to pay eligible projeLt costs. (c i The Borrower will not enter into aWe, lease, mzvisfer or other use age ement of any part 1 of the Project, or change the use of the Project, without tile prior written approval of the kuthority if such We, least, transfer. agreement or change in use would +i t violate the covenants set forth m Article III or Ancle IV. or (if) violate the conditions under v ficb any capimhzaw.n marts were hnniihed by de United States Emironmental Protection Agency (the "EPA";. or Aiiii otheiixise violze any terns or condidix-h of this Agreement. (d, The Borrower must maintain a&qtwe property insurance coverage for the PiL eject in such ainuant,; with such Ifinits as it determine,, in good kith to be reasonable or in such amontits and with such limits as miv be required by the Authority from time to time. The Borrower may substitute adekraatc, actuanally scvund ;elf- insurance or risk retention programi b) for property insurance coverage, so long as such proplalw s) are consistent with applicable laws and state and federal regulations. ile i The BcnTower must complete the Project in accoi-dance with all applicable federal, -state and local statutes. rules, regulations. ordinances,. reporting rcquire=nts, approv?d-, yid state agency certifications governing the design and construction of the Project, and will operate its clean water sy stem in compliance with all applicable federal and site laws and regulations and permit retpirements. kt) The Borrower agrees to exert all reasonable efforts to investigate claim& wluch the Borrower may have against third parties with respect to the construction <?f the Prcliect and.. in appropriate circumstances. take whatever action, including legal action, the BoiTower reastwuably determines to be appropriate. Section 2.2. Construction ConitAlance. S i The Borrower will comply -tvith the proNasions of pie---ailing, wage requirements set forth in MinneNota Statute;.., Sections 177.4 I to 1 —7.44. as then in effect. (bi In addition to the prevailing wage requirements under subseL-ticm tat, the Bormver will comply ans.41 require that all Laborers nad inechaincs emplqyed by contractors and zubcontractors on the Project be paid wages at rates not les:i than thoic prevailing on projects of a similar character in the locality as determined by the L, the Secretar; of Labor in accordance with Davi-�-Bictm A&,t t.40 T--.S.C-, sec. 2-6a through 276a-5). as amended. to If requested, the Borrower will submit to the Authority, lAithin'410 days of the end of the annual reporting period, EPA Form 5100-52A to repw on the award of prime contracts or subcontracts to any certified Minority and W%xuen Business Enterprise �MBEWBD firms until the Project is complete. (d; The Borrower will comply with Nfiniteiota Statutes, Section 21".9-05, as then in effect, by withholding to the extent ,o required eight percent (!311, i) of payments made to ill out-of-state coati actors once cumulative payments made to the contracts far -,,vtnk done 111 Nhnaesota exceed $50,000 in a calendar ye-u, unless an exemption is granted by the Department of Revenue. it amounts are required to be deposited with the Nihinesota Department of Reomuc- cRF-Nlas,tei Tft4latexu- Page 4 of I I C%MF N1100beeflo, My 14, Z015 464960v1 NINI MNI 90-149 A-5 e) The Borrower will comply with the.Aniericm Iron and Steel requirements of Section 608 of the Fedmral Water Pollution ConmA Act unless the Project is _granted a waiver from tine federal EPA. Section 2.3. Revenue Sufficiency Covenant The Borrower sliall impose and collect rates and charges in comp,hance with N, litmesoti Statutes and in accoidance with the Boirowel'i appioved sere ice charge -,,y,TML so that sufficient gross revenues are available for the payment of system :,cats, including operation and maintenance and, together with othei sources a, may be applicabie, debt semice. TLe Borrower shall m-inually revieu and assure the revenue stream is sufficient ft sr the pky ment of system costs, including debt service. ARTICLE M - TAX EXEMPTION Section 3.1. Covenants. The Borrower acknowledges that the'Note is intended To bear in=est which is excluded from mss income of the owner thereof for federal and State of Minnesota income tax ptuposes to Tax-exempt -Note") and may be flinded by the Authority from the proceeds of the Authoritys Bonds which are intended to bear inTeresta -hich is excluded from gross income of the owner thereof for federal and State of-%finnesota income tixpuipcoses f-'T.m-exempt Bonds" s, The Borrower also acknowledges that. regardles3 ,,f the ;oir,:e of bituding, the Authority may pledge the Loan and the related Nete a,& seemity tyr, and as a scourzee of. the payment of debt senvice, on am, or all of its, Tax-e-=Ttl Bonds. in consideration of these facts, the Borr,)-%,,.er covenants and agrees with the Authority, whether or not strict compliance with such agreements is required to maintain the Note as a Tax-exempt Note or the -Authority's Bonds as Tax-exempt 6M&I.. as foliu%,: f a , t The Borrower will not take, or to the extent under its control, permit- -my action which w ould cause the Note not to be a Tax-exempt'-Note or any _knthonty Bonds not to be Tax-exempt Bonds and will not omit from taking, or cause to be =ken, any action required to maitmin the 'Note as a Tax-aempl. Note or the Authority's Bonds as Tax-exempt Bonds. tbli The Borrower will take all. actions with respect to the Note necessary to comply with all. in;tructions and requests of the Authority relating to maintaining the Authority's Bonds a-, Tax-exempt Bonds and the Note n a Tax-exempt Note or compliance with the agreements set forth in this section or in any Tax Complimce Certificate ihereinafter defined). (1c t The Borrower agree* to comply with all requirements of any certificate or aLpeement t."Tax Compliance Certificate"t executed and delivered by it in cormectionaith the issuance of the Note. i.d i The BmTower v,111 prcviptl�v notiA, the Executive Director of the Authority in writing of -my action or event which adversely affect,.; the status of the Note as a Tax-e :erupt Note or airy ,,.f the Authority's Bonds as Tax-exempt Bonds. None of the proceeds of the Loan may be iised to-pay the costs of any facility used or to be used during the term of the loan for any private business use or to nmke a private lean within the meaning of Section 141 of the Internal Revenue Code of 19M as amended (the "Code-). f! No Loan repkimients may be made frowt, or secured by, property iv;ed or to be used for a private bu3iness use or payments in respect of such property within the meaning of Section 141 of the Code. except as specifically permitted in writing by the Authority. (v The Borrower will not establish any fund or account, other than a bona fide debt service fund, securing the payment of the Tax-exempt Note or Tax-exempt Bonds or from which the Borrower reasonably expects Page 5 Of 11 C%MF_ManhczUq_2 qev. 7 464960v1 MINI MN190-149 A-6 to gay dent sert�c-e on €he iean, ur in �� other reypec�t L�r�e�te `'Foss praceed�," ��ithtn the m� of the Cc*de, of €he Tai- exezu�t gate car Ta?�- e�ez�t Bads, e.�:s:ept as �pecifica�i� pernti� e� inn �•riti�� 1.5c the �uthor�ity. In addition.. uny moss proceeds mall nat he ittt�ested in c�hligatiorzs or ��pasits issued by, guaranteed. by or ir�ured ��- the United States or auy alter• ar iustruentaiit�r thereof if and €�� the extent sl�h irtte >truent �z =uu1� eau�e the Tax- E.xeuti.�t emote ear Tas�- exempt Bunris to he "fe�aetalit� �u�s:ntee�i„ t�ithin €fie riteasring of Section 1- ��r'�) afthe Code. ilti The &�raK-er till nest irtt °esz Win• nraneg� constituting .`grass praceeds" of the Taz- exen7pt �Ta €e ter Tax. - exerttp€ Bends other th<� in a fait market. arms' length uansaetion and at a yiel+3. ctithin the IilearliL"+� of the Code, .in etcess of the lese. of the �•ield on the Tax. - exempt �;�e or €he T�- exeu€f±€ Eonds a�piicabie tc� the Loan and shad appfy all Loan prca�:eeds t�itltin fire Sys of fire receipt thereof by the >�rratt�er �rtst4tent a��th the terma ofthe Barro,rer's drsixtrsemen€ rz�uest. �i� Ext�pt as perrnitted'wder Treas:u}• Regtriations. Sectian I_150 -�, and Sectian ? .-hd:� hereof: the Barrau-er :t�ii not use Laan proceeds tc� reimhtu�e itself for any pa'rnerats of p €i��ect costs �hi<h the B�znc�u�er made fre�m artier funds, if the ori�ital payruent tc�.s rzade prior to the earlier of the ss.rance of the :�uttic�rity Bonds used to fund the Lawn ar the exe.-tation and deliter}° of this Agreement ar if the csriginal pa�utent teas made ftotn the pt��ceeds of ather cTeht of tine Bc►rrt�at•er. �J1 tither than as ptrrided iu Secticut -t_I hereof the Barrauer agree> that the alloc�xtian �� fire A�rtht�rity of finds it uses €o purrxase the r oar:.. iricludiug diffe<eiat series of Tat -� € Bondh shah he ut €he sole disx:retion of the Authority, and. such alloF.ati�?n shall he binding an the Barratver. +iii iA°ith respect to any grass ptoreeds cif the Tom- exempt B:�nds cs�ea €eci the Baxrat� er, the Earroct er aliall be liable tt•! the Authz�rit3 for the ar€;�nuit rt�uired to be tested as exL'ess iIIt'estrtient earr€in to the L�uited States. l� The :authority mati�, in its sole discretion and. a*€ly upon recerpt of an aginic� �,f c�funsel tc� the AuthL�ity. tt•ait°e any- of the agreements set Earth in tixis Article III. �1RTiCI.E I3' — C�1i�iPLI�t.3iC`E I�TTH STATE BE}�� RE�jL'IREI►fE� 5e+ction -l.t. State Bond Financed Prnnert��. Tlie Barrat�er arid. the Autharii;.< actma�-ledge .uci agree tl�t the Born�uer's oturtership interest in the Prti�jec€ cansistiatg oaf renal pragsertf,-, anti, ifapplil.�le< all ft;'ilitic� Ick;ated, ter that u�ili he cortstnrcted and li�catetl can such real property attd all ecltiipmeni that is a I� thereof tlt eras purchased ��itli the proceeds of ge:�eral obligation b�Ynd pr,�:eeclfi corzstitute `' state Fond 1~'irr:nceci Praper� = ", as such terra is used in �iinneu�� S`�tatutes, Sectiau a6:�.�9; and tl�e 6el;r�tu�th Urder :�meni�g t�trdz�r of the L`on7ruissianer .�f 1 finance Relatua� to L'se and Sale of State Boni Fittauced Prop�t}-" da €ed It.:IY° :�f3.ti1� %;the `t�dei "} as 5iicli Wray be amen�ie�, auc�d>fieti, supp %mented. ar i�laceri fic�at ?inxe ire time an�i therefare, the pra��isians corrtai�d in such. statuie and artier apply io €he Borrau er' ow-nership interes€ in the Pri�,�e<�€ �d r L°se contrac€s r�iatirrg thereta, Tire Borrs1tver agrees ihat the procee<rs of ttae Lain must used and the .Pr���ect. must be operated in a ivatnlrr that �:omplies tt'iih Minnesota Statutes, Se4rian i�A.69� nd the t�rder. The 8c�rrot� er must file �e recgrrired state band financed property deelaruti��n as prot-ided in the f3rder and pror-ide a copy of the filed. dcciaratian to the :�..uuthc�rit;:. uuies� €he filing regturernent iJ trait <e�i in tt�iting t}y the Cnrrnriissianer cif Aiinnesc+ta lanagernent anti Btrdgei. �RF 1�:er :`.aiat�.dos: l�;ge � �f I 1 C4CFtF ?S_T�aticelly_ (fir,. " s �} IurS a4, ��}Ir 464960v1 M1VI MN190 -149 A -% Section 4.2. Lease or Management Contract. The Borrower agrees that: any least or management of similar contintct (each -a -Use Agreement" i enteted into by the Bom.vet with respect to property con-,tituting all or a part of the State Bond Financed Property must couVly with the following requirements- la) It umst be for the express purpose of carn= out of a governmental prograin estabh=hed or authorized by law and established kN,,Lf f icial action of the Borrower. p'b) It must be Vprcr,-ed, in writing, by the Comillisiioner ofMmuesota Management- and Budget, (c) It must be for a term, including any renewals that are solely at the option of the lessee or manager_ that is subsTannially less than the useful life of the property sub ject to such lease or managernent contract, but may allow renew,11 beyond that term upon dettrinhiption by the Bc1iroweef that the usecontinues to cmi} out the governmental program. (d) It must be terminable by the Borrower if the other contracting party defaults under the contract. or if the governmental program is terminated or changed. (e) It must proxide for oversight by the Borrower cT the operation of 'he prorerty that is the sub.,ject of the U. %e -Agreement (f, It must specifically identify the .tatute that provkies Ile Borrower authoritj te. ewer into the 1'.se Agreement �g► It must contain a poiision stating that the Use Agreement is being entered into in order t,-..i caqvLnit a governmental prograin and must Tedficaliv identif-, the go-. erninental program. Section 4.3. Sale. The Borrower must not sell any propert-, constituting all or a part of the State Bcmd Financed Property unless the sale complies with the following requirements: 'a? The Borrower determines by official action that such prop", is no longer usable or needed by the Borrcm er to carry out the goverrmwntaal program for iNfich it was acquired or constructed. fb) The sale must be made as authorized by law. (c) The sale must be for fair market value as defined in Nimnesota Statutes, Sections 16A.695 as then in efleim 4 d) The Borrower must obtain the prior written consent of the Commissioner of Ali atwita Management and Budget. Section 4.4. Changes to Minnesota Statute 16A.695 or the Order. In the event ftu.Nlimielkota Svitwtei Section 16A.695 or the Or-der is �wiended in a mariner that re�icees air; mquirenient imposed upon the Borrower, or it the Borrowet'a interest in the State Bond Financed Property is exempt from Mianesom Statutes. Section 16A.695 or the Order, then upon written request by the Borrower, the Authotity will enter into and execute an amendment to this Agreement to implement herein such amendment to or exempt the interest in the Project ftom Minnesota Statutes.. Section 16A.695 and the Chdff or both. Section 4.5. Watyer. The Authorih, may waive the requirements of Article IV at any time upon determination by the Authority, and after tecei,.*g approval by the Commissioner of Namesota 'anagement and Budget that the Loan has not been and �-dll not % ftinded from the proceeds of state gmeral obligation bonds. -Nb--r Templa!,-.Con Page 7 of 11 C%MF Nkntkeb� 2 iv- - .51 Jul- .; 464960vl MNI NINI 90-149 A-8 ARTICLE V - DISCLOSURE Section 5.1. Information for Disclosure Documents. ka..) The Borrower agrees to provide to the Authority such mf6imation with respect to the Borrower, its duties, operations and functions as may be reasonabh- mqueited by the Authmity, and hereb}r cow eats to its inclusion in the Aw horitys official slatemenr(s) used in connection with issuance and We or the re-marketing of ks Bonds or continuing di-,closure -,kith respect to it-z Bonds i.collectively, the "Disclosure Documeurs�'i, whether tit not all or a portion if the proceeds of Bonds were or will be leaned ta the Borrower. t.b) At the request of the Authority. the Borrower sill. certify and reprewnt that such information with respect to the Bmrow-c-- in anv Disclosure Document does not contain any, untrue statement of a material fact or omit to state a material faci necesa*- to make the statements made, in lot of the circumu tauces under which they ..-ere made, not nnsleading prm-ided, however. that in no event shall the Bonower be required to make any representation about any other information in the Disclosure Documents or as to any Disclosure Document in its entuetv. if for an-v reason the Borrower detemninei That it shall not be able to .make such certification and representation, it will provide such inforaLrdon to the AuThkrity as is necessary for inclusion in the Disclosure Documents so as to enable it to mA-e such certification and representation. i.c) If at any time during the period ending 90 days aftet the date the Borrower provides, infminition to Authority for inclusion in a Disclosure Document any event occurs; which the Borrower believes would cause the informa'don with respect to the Bo mwwer in the Disclo?suav Document to omit a material fact vi make the statements therein misleading, the Bcv.,rowet shall promptly notit . the Authority in writmg of such event and provide information for inclusion in the Disclosure Document or an amendment thereof or a supplement thereto. Al the request of the Authoim. the Botrower will also provide the certification and repitsentation required in ib) above with respect to such information. (d) Ibe Borrower will provide such information as may be reasonably requested by any rating agency in connection with rating the Bonds of die Authority. Section 5.2. Continuing Disclosure. If the Authority. in its sole discirtion determit es. at nail time prior to payment of the Loan in M, (i.) that the Borrower is a material "obligated person," as the term "obligated person'° is defined in Rule IkZ 12 promulgated by the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, as amended or supplemeuted, including any successor regulation or statute thereto i "Me 15x2 -12 "! or 6i.) that an event has occurred with respect to the Borrower or the Loan that must be disclosed under Rule 15c242. or that any other action of the Borrower has occurred which the Authority determines in its sole discretion is material to an investor in Bonds of the Audiontv- with materiality under clause (i) being determined by the Authority pursuant to criteria, esobli hed, from time to time., by the Authority in its sole discretion and set forth in a resolution or official statement of the Authority- the Borrower hereby covenants that it. will authorize and provide to the Authority for inclusion in a Disclosure Document, all statements and information relating to the Borrower deemed materkil by the Antherity for die purpose of iatts4-ing Rule l5c2-12 as well as Rule 10b-5 proinulgated pursuant to the Securities Exchange Act of 19341- as amended or supplemented, including any successor regulation or statute thereto i ` "Rule 1W 5"), includiikg certificates and %•itten representations -A die Borrower eiidencing satisfaction of the requirements of Rule 15c2-12 and Rule I Ob-5-- and the Borrower hereby further covenants that the Borrower if determined to be such a material obligated pmson) shall execute and deliver a continuing disclosure agreement, in such form as the Authority shall determine to be necessary. deikable or convenient, in its sole discretion, for the purpose of meeting the requirements of Rule and pursuant to the terms and provisions of such continuing disclosure agreement, die Bckrrower shall thereafter provide ongoing disclosure with respect to all annual and event inf6rination and financial statements relating to the Borrower required by a continuing disclosure undertaking provisions of such g under Rule 14c-12 and pursuant to the 1�rms and prox coutiminiq disclosure agreement, and the Borrower further agrees that the A:udlorlty sliall have the right to g SRFAbuff TempU*.,-on Page 8 of I I MMF July 14, 2015 464960v1 MNINlNI90-149 A-9 disclose my infmnation about the Borrower or the Loan, iviiether or not received from the Borrower, determined by the Authority in its sale discreticni, to be material xi ith respect to any of its Bonds, ARTICLE X-1 - DEFAULT AND RE-NEEDIES Section 6.1. Event,, of Default. Any of the follwxing are events of default under this Agreement: =a) Failure of the Borrerwer to make a payment when due: ,"bi Failure of the Borrowei to comply nifli =,y other provision of this Agreement or the Note afteriAritten notice from the Audiontv and the Bonovp er fails for a duet-mouth pened to cure such defauh or provide a written Jilin acceptable to the AuthoriTy providing foi such Lure or, if the Authority accepts a. plan fit =e. the Borrox% er fails to cure any defaults iNithin the time period specified. therein. Section 6.2. Remedies. tai For an event of default under Section 6.1ta) of.thisAgreement. the .Authority shall impose an interest Penalty as provided in Minii. Rules Part 73 80.0475. Subpmit 1. The Authority inay also exercise one or more of the following remedies: ( I ) withhold approval of any disbursement request,! 2 1 r<leict any pens arse application h,, the Boi-.ower for financiiI as;,4stance, (.3! to the meat permitted by law, demand immediate payment of the Loan and the Note in full and. upon such demand, the outstanding ptincipal anknint if the Loan and Note will be nin-lit-Jiately ducand pat able, with intere-t accrued theieon to the date of payment, or (4, exercise any other remedy available To the Authority at law or in equity. including under Minnesota Rules, Chapter'7380, as amended. b) For an event of default under Section 6. 1(,b.i of thin Agreement. the Authority shall impose an immediate increase in the interest rate on the Loan by eliminating all interest rate discounts that were applied in dete!,minnig the interest rate urozier Minnesora Rules, Pall 7.180.0442. The Authority may also exercise one or tuore of the followhig remedies: 11) withhold approN-A of any disbursement reques't' 42i reject any pending ?.ppkation by the Borrowei for finaticial assistance.. (3) to die went permitted by law, demand immediate payment of the Loan and the Note in full and, upon such demand, the outstaaiidiiig principal arnount of the Loan and Note will be immediately due and payable, v6th .interest accrued thereon to the date of"payment, or (4) exercise any other reniedv available to the Authorit-v at law or in equity, including under Minnesota Rules,, Chapter as amended- If the Authority subsequently determines that the Borrower has cured A, events of default, the interest rate on any unpaid Loan principal Nil' revert back to the original interest rate. ARTICLE VM - FLNVNCLAL RECORDS XND AUDITS Section '.1. Financial Recordkeeping. For 311 expenditures of funds made pursuant tc, this Agreement. the Borrower must kmT financial accounts and sect -rds in accordance with generally acccepted accepted accounting principles including invoices, contracts, receipts, vouchers and other documents sufficient to evidence in proper detail the nature md propnet,, of the expenditures and any investments made with procm-6 of the Loan of other "gross proceeds" of the Note or the Tax-exempt Bonds of the Authority. Such accounts and records shall be accessible and available for a mimmurn of six years from the date of initiation of operation of the Project and for so long as the Note is outstindirig for examination by anthorizzed iepresentatives of the Authority-, the Legislative Auditor, Office of the State Audit;-T and the EPA Office of Inspector Gerim-al. Section ".2. Annual Audit Reguirements Via) The Borrower must annually provide to the Authority for the term of the Lom a copy of M independent annual -audit. All audit reports must be submitted within 30 days after the completion of the audit but no later than one year after the end of the fiscal year to be audited. The audits must be conducted in accordance xvith generally accepted government auditing standards and m cimViiance,xith the single audit &-t requirements of the federal Office of Management and Budget, circular SRF-M�'-r T.tnW1atL.zca Page 9 of 11 C"%TF_M'Z*tiCe1:0 - 2 sm, 715.- Jule 14, 201_ -I 464960vl MNI MN190-149 A-10 A-133... or assuperseded by 2 CHR 200 Subpart F, effective for fiscal years beginning on or after December 26. 2014. tb) The Borrower must list the Note as meral obligation debt of the Borrower in its annual audits for the teen of the Lowan. ARTICLE NM - THIS ARTICLE LN'TENTIONNALLY LEFT BLANK ARTICLE IX — GOVERNINIEIN'T DATA PRACTICES Section .9.1. Geuertai Ilie Borrower agrees xA, ah respect ti} any data that it pos: -esws regarding the Project, to co ;ply ixith all of the proiisions and restrictions contained in the INfinnesota Government Data Practices Act contained in Chapter 13 of the Minnesota Statutes that exists as of the date of this Agreement and is such. may subsequently be amended, modified or replaced from time to time. I to &11.1 MM Section 10.1- -Aimendments. Any amendments to this Agreement niust be in mmting and be executed by the Borrow et, by, the same of ic�iaii Nvho signed. the Agreement, or f1leir iuccesiors. Section 10.1 Fe & The Borroixer acknowledges that the Authorm amy apply up to 2 0o of raiv loan rqayment to pad inentrcif administrative cost-, and that such 4)plicatickn shell not incleak the amount of any repayments of extend the period of repayment. Section 10.3. Notices, In addition to any notice required under applicable law to be given in another manner, airy notice,-, required hereunder must be m i,,,mang, and shall be sufficient if delivered by coimer or overnight delivery service or sent by certified inail t return receipt requesteat. postage prepaid. to the address of the party to whom it is directed. Such address shall be that address specified below or such different address as may hereafter be I)ecified. by either party by written notice to the other: In the case of the Authority. In the case of the Borrower'. Winne iota Public .Facilities Authority Cit'- of monticello Attention: Executive Director Attention: Mayor 332 Nfinriesota Street. Suite XV820 5015 Walnut Avenue. Sinte I St. Paul. INUN .55101 -1378 M.,onticello, _NLN' 55-362-8822 Section 1.0.4- Termination of Loan. The obligations of the Borrower under this Apeement otxcept the obligations set forth in Section 2.1 (,c l, sd ) and (e) and Article rV hereof) shall terminate mate when the Loan is hilly paid and retired. Page 10 of I I CIWMF Manticello 2 464960A MNIMN190-149 A -11 Project -Number: NIPFA-15-0004-R-FY16 Borrower Name, Cite of Monticello The Authority and the Borrower have married this Ageement to be duly executed by their dully authorized undersigned .representatives_ Statutory Cities nm,.t execute this Ageement as provided in --\ffime,-ota Statutes. Section 412.201, as amended. Home Rule Charter Cities must execute this Ageemen! as provided in Minuesota Statutes, Cbptei 410. as &,,nended. BORRONVER; We have read and we agite to all of the abo of this Agreement. B,v I Baran Stumpf Title Mavoi Date '113 & ( I -113 vFeill Title Adinmi-.trator Date 713,10of MINNESOTA PIMLIC FACILITIES AUTHORITY: BY Katie CUrk Sieben, of delegate Title Chair ENCUMBERED: 'inuesota Public Facifities Autorit• UA Date Enzimbeted B2401 :"-xxx " xx-`xxxx qndnidwl 4ping ewffied that mils have been ; miawibmd as reTw-ed by Mhmewta Statute 16.A:1 SW-I-v Luter Tenqdate.con Page 11 of 11 je-. - 15) 464960vI MNI MNI 90-149 A-12 CWRF _Nfonfizatlq-2 My 14, 2015 LN Pd*r FaLillas Aft:�vttv Monticello - cw02 firol bar, amourft: 2'1-)X' 4° CVt :,ate Low 231ance tmnl D:;bt S,*v Da-o Effe -bi-e 8mck. P- "ected )-,-,? 15 np Res IT,483.C10 2 21�"(WAND 12? 574.7 Q;,L 17 15.2 17 2;'WOO-X� 133,353,34 2 1,17 '.O:R " Q 2" 20 is Lti 2, (12,2 j 21 ,A2 "21 "21 02;2-` 22 1.1-ky, "a) 133A24.16 IIZ1Z^ D 1:5:2:'23 �2, 2 2"' 0-8"" "424 =-2,2 ' 25 1'1 .TLI—Xlo vIN- 25 512 -, :26 S20'26 v&2,127 02,2028 iS 2 -2r ?'OW10 12 6 3, W.00 w 5. f. O2.2 :'.61 1,143,0&x.00 1:33.125A, 02 122DWOO 5522_ a:t W-'2Ck 34 ONOS5 08.2-C&15 V.11 :0� cm_t.Imf1,,-Uq-62 Exhibit A L,an Araarhzatrm S,,-nedtia "APFA-154OD4-R-FY16 nrt,;ale ad! iN. Disbi-s"r,ent Repay mm 2:391,483DO -�&144 122 ',Q7 27 57 12 %Ale'.Ij�f 9,611.46 12701-1.1* 12445.56 7 9T2,":* 126-.'C72R 126 ;M5.33 126 712.35 128-U,5.05 128.426.'32 4772.S7 128 772.67 4,1 13.51 1 181 . 12 13;1.444.. t2 2.T69.12 iS.7Q.12 1:3'37.05 132.3&:T85 7011.6p, 132 701, -kcl %,6 »5,524 45 071"15 464960v1 NINI MN190-149 A-13 tnferc-M' 71073 11,5W.33 1 i'097-117 1 -007.37 `CA1 10`4 2CIC6? 7 0,?%.5' -. 7345.' 33 7. 34, It' 3 6,712.85 8712.&5 6,0755-05 5,429.62 5..42?B2 4,772.67 4172.67 +.444.12 2-769A2 2.7tV.',2 2.0&3.SCI 21068.80 701-Rs M11.58 2743,'.'5 .iean .inter sate Reivving Fund funIng d-ites-- 2,3'� t AKIO page 4 of 2 firol bar, amourft: 2'1-)X' 4° CVt Prrv�pal Low 231ance tmnl D:;bt S,*v 2, IT,483.C10 2 21�"(WAND 12? 574.7 2.2Q',.(Vv.00 IL'9,000.00 2;'WOO-X� 133,353,34 2 1,17 '.O:R " 1 '2,(.jOO K! 134.0 4.7.1 1.1-ky, "a) 133A24.16 1 I B4OC*. C-A 1'1 .TLI—Xlo WAIt 11. 16 1'! I 8MO) i 33.-945N ?'OW10 12 6 3, W.00 w 5. f. —O'C .90.00 1,143,0&x.00 1:33.125A, 1: 1 �O'Nrj' Inc; 122DWOO 10 774,U:: `.00 —6,0WOO -'4'� -.-)0 !34.2277.67 1,7,C00 00 r , "f "-A* I33.839.24 128,000.00 133638,24 UWWRI 22 6 �'4' 0 F3 . C, 0 1;32,177,60 2;-3.CQDQ.(AO 131 <000:0f) 132,00111.00 133..7'15.'1'0 "32,11 vn.o3. 16 page 4 of 2 NIN, Pub.: Pac-Mies AuhwIV Exhibit A Clean 'Wat-r Stane Re-: e-A.Jng Fund Lmn AnoVanon S^.1iedu'e Calculation of Loan Rate for Monticello - cwG2 FINAL [1'DFA-15-0G34-R-FY16 464960vl MNI MNI 90-149 A-14 07110115 -Own fivw u5ing pincipad Fresnt'Vrlue Ft,-FA-. Rate Scateq v: ,,e 4*, zrij thef-e*ate s - ales: and these rate 9,Aes ': P-i-i:,ipai F F,4 S,-. n is MVID AAA PFA Bonds 1,1*.I[ kAtA PFA &rd, HkTDAAA, -,39'; 436,00 ) 3 10 '2�3�;1,49--t 2 %226.33 IIDNIT� IN.483.00 '2-, 467.R 12' 57.1,,.,; 24,' 23. � 8 '7 llw .0WIN �,F 31 12? 433 ,S4 t Z 2". 5, � - 284VA5 2,1 PS-J4 2t', A "W1. CIO 0 w�. I N, 45 12,575)A; 22 O&Z, 19 1 12000,00 41 -0VT 3>4,9qu-40 124.;111.17 G2 20 2.) 24,WM60 21-7,QU5 G8,2�', 20 13, 000.( X# 132�c ,?7;'19U0 12r.241,44 C12&21 - 23-4?9,810 20,6S7,92 �18r2(i 21 114,03. 00 1 A ,2 7 �; -, 9 &', 118,411 Ye •2;2i-1:22 - 22735LO 19,31812 22 115.0010.00 1.83% V3,120 23 1 V,000.00 2.04S 8 SO 62-1 20,24 40,4f',-A 1;5 i5JI; u; 20.24 - [18Xk3QL0 2.188 10 110.354.02 :?,172-% 0 2O 25 1 tg,2000-00 2.3206 136,1712-:3!) 167,35?.59 +7,79250 i? 0 2 C, 2;1-' 2.4690 1 -3 7c,42-50 -4 H5.7a 62,Z,,,27 12, 2." 27 122,10N1.00 2,599c 13811 e_,;ri 1;,2 I : ;'IZ20, 26 14-742.70 1 74b k � 3i 2 0 4113 123 UoD.00 ZAN 13T742.70 13,101.65 0,7p 2G.2% 124,fYXIDD 2YSt 117,100.65 5 '30 2,,2C- I i 1,fq,5 65 7 895.2 08.20. 3,2 2,82% m2c, 11 f,75112R 3 i !27f1Q#0j.X! 2-8p. 1.1HA 1, 02,20 32 7,75 ♦ 75 M20.1 I 3,5.7'"x.25) &32737.255 0Z20133 5,ti,' Ff-5 3,796.72 03,'.13133 1134,N10,00 6e, 1115?;,44 0020'34 20-3.2t. O1-3 {20,34 51 39550 102:'10,35 - 2 * -13-00, 1-227-�," 13 ;2135 t,112,00-00 3.05% 134,013,00 &3,713.22 tows -- i9,259A0 yields ftt eTdates PV, of ",15n frVS to $-O-: 2 5Vi ie% discounts wpfied tc, the NigNer of V* two yields: bise diqwunc !JF I be! Y.-eloe: estimated savings: $394,927 1 WAM - A,..,g reslilerfnl 10.8 years L - — — — — — — — — cvLKVAmffq-Q2 -,3ge 2 of 2 464960vl MNI MNI 90-149 A-14 EXHIBIT B FORM OF NOTE No. R -1 UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT CITY OF MONTICELLO GENERAL OBLIGATION SEWER REVENUE NOTE SERIES 2015A Date of Original Issue: , 2015 The City of Monticello, a municipal corporation in Wright County, Minnesota (the "City"), certifies that it is indebted for value received and promises to pay to the Minnesota Public Facilities Authority or registered assigns, the principal sum of $2,391,483, or so much thereof as may have been disbursed on Aua.xst 20 irn the years and installments as follows: Year Installment Year Installment 2016 $100,483 2026 $120,000 2017 109,000 2027 122,000 2018 111,000 2028 123,000 2019 112,000 2029 124,000 2020 113,000 2030 126,000 2021 114,000 2031 127,000 2022 115,000 2032 128,000 2023 117,000 2033 130,000 2024 118,000 2034 131,000 2025 119,000 2035 132,000 and to pay interest on so much of the principal amount of the debt as may be disbursed from time to time as provided in the Project Loan Agreement (as defined below) and remains unpaid, from the date of this Note for disbursements made on or prior to that date or from the date of each later disbursement until the principal amount hereof is paid or has been provided for, at the rate of 1.063% per annum on each February 20 and August 20, commencing February 20, 2016. Principal and Interest Payments. Interest accrues only on the aggregate amount of this Note that has been disbursed under the Bond Purchase and Project Loan Agreement dated July 14, 2015 (the "Project Loan Agreement "), by and between the City and the Minnesota Public Facilities Authority (the "PFA "). The principal installments will be paid in the amounts scheduled above even if at the time of payment the full principal amount of this Note has not been disbursed, provided that to the extent any principal amount of this Note is never disbursed, the amount of the principal not disbursed is to be applied to reduce each unpaid principal installment in the proportion that such installment bears to the total of all unpaid principal installments (i.e., the remaining principal payment schedule is to be reamortized to provide similarly level annual installments of total debt service payments). Interest on this Note includes amounts treated by the PFA as service fees. Principal, interest and any premium due under this Note will be paid on each payment date by wire transfer of immediately available 464960v1 MNI MN190 -149 B -1 funds, or by check or draft mailed at least five (5) business days prior to the payment date to the person in whose name this Note is registered in any coin or currency of the United States of America which at the time of payment is legal tender for public and private debts. Redemption. This Note is subject to optional or mandatory redemption and prepayment in whole or in part as provided in the Project Loan Agreement. If redemption is in part, installments of principal payable last under this Note must be prepaid first, unless the City and the holder of this Note agree to a different manner of payment. Purpose; General Obligation. This Note has been issued pursuant to and in full conformity with the Constitution and laws of the State of Minnesota, for the purpose of providing money to finance eligible project costs of the City's municipal sanitary sewer system, and is payable out of the Debt Service Account of the Sewer Fund of the City, to which account have been pledged net revenues of the City's municipal sanitary sewer system. This Note constitutes a general obligation of the City, and to provide money for the prompt and full payment of said principal installments and interest when the same become due, the full faith and credit and taxing powers of the City have been and are hereby irrevocably pledged. Registration: Transfer. This Note must be registered in the name of the payee on the books of the City by presenting this Note for registration to the City Administrator, who will endorse the City Administrator's name and note the date of registration opposite the name of the payee in the certificate of registration attached hereto. Thereafter this Note may be transferred to a bona fide purchaser only by delivery with an assignment duly executed by the registered owner or owner's legal representative, and the City may treat the registered owner as the person exclusively entitled to exercise all the rights and powers of an owner until this Note is presented with such assignment for registration of transfer, accompanied by assurance of the nature provided by law that the assignment is genuine and effective, and until such transfer is registered on said books and noted hereon by the City Administrator. Fees Upon Transfer or Loss. The City Administrator may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection with the transfer of this Note and any legal or unusual costs regarding transfers and lost notes. Project Loan Agreement. The terms and conditions of the Project Loan Agreement are incorporated herein by reference and made a part hereof. The Project Loan Agreement may be attached to this Note and must be attached to this Note if the holder of this Note is any person other than the Minnesota Public Facilities Authority. Tax - Exempt Obligation. The City intends that the interest on this Note will be excluded from gross income for United States income tax purposes or from both gross income and taxable net income for State of Minnesota income tax purposes. Qualified Tax- Exempt Obligation. The City Council has designated this Note as a "qualified tax - exempt obligation" within the meaning of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code "), relating to disallowance of interest expense for financial institutions and within the $10 million limit allowed by the Code for the calendar year of issue. IT IS HEREBY CERTIFIED AND RECITED that all acts, conditions and things required by the Constitution and laws of the State of Minnesota to be done, to happen and to be performed precedent to and in the issuance of this Note, have been done, have happened and have been performed in regular and due form, time and manner required by law; that the City has covenanted and agreed with the holder of this Note that it will impose and collect charges for the service, use and availability of and connection to its municipal sanitary sewer system at the times and in amounts necessary to produce net revenues adequate to pay all principal and 464960v1 MNI MN190 -149 B -2 interest when due on this Note; that the City will levy a direct, annual, irrepealable ad valorem tax upon all of the taxable property in the City, without limitation as to rate or amount, if the net revenues from the municipal sanitary sewer system and any other revenues irrevocably appropriated to the Debt Service Account are insufficient therefor; and that this Note, together with all other debts of the City outstanding on the date hereof, being the date of its actual issuance and delivery, does not exceed any constitutional or statutory limitation of indebtedness. IN WITNESS WHEREOF, the City of Monticello, Wright County, Minnesota, has caused this Note to be executed with the manual signatures of its Mayor and City Administrator, both as of the nominal date of original issue specified above. CITY OF MONTICELLO, MINNESOTA By Its Mayor ®r, CERTIFICATE OF AUTHENTICATION AND REGISTRATION This is the Note described above and has been registered as to the principal and interest in the name of the Registered Owner identified below on the registration books of the City Administrator of the City. The transfer of ownership of the principal amount of this Note may be made only by the Registered Owner or by the Registered Owner's legal representative last noted below. Signature of Date of Registration Registered Owner City Administrator Minnesota Public Facilities Authority Federal Employer I.D. No. 41- 6007 162 464960v1 MNI MN190 -149 B -3 STATE OF MINNESOTA COUNTY OF WRIGHT) CITY OF MONTICELLO I, the undersigned, being the duly qualified and acting City Administrator of the City of Monticello, Minnesota (the "City "), do hereby certify that I have carefully compared the attached and foregoing extract of minutes of a regular meeting of the City Council of said City held on July 27, 2015, with the original thereof on file in my office and the same is a full, true and correct copy thereof, insofar as the same relates to the issuance and sale of the City's General Obligation Sewer Revenue Note, Series 2015A, in the original aggregate principal amount of $2,391,483. WITNESS my hand as such City Administrator and the corporate seal of the City this 30�day of 2015. City ator City of Monticello, Minnesota (SEAL) 464960v1 MNI MN190 -149 STATE OF MINNESOTA COUNTY OF WRIGHT CERTIFICATE OF COUNTY AUDITOR/TREASURER AS TO REGISTRATION WHERE NO AD VALOREM TAX LEVY I, the undersigned County Auditor /Treasurer of Wright County, Minnesota, hereby certify that a resolution adopted by the City Council of the City of Monticello, Minnesota (the "City "), on July 27, 2015, relating to the issuance of the City's General Obligation Sewer Revenue Note, Series 2015A, in the aggregate principal amount of $2,391,483, dated the date of delivery, has been filed in my office and said obligations have been registered on the register of obligations in my office. WITNESS my hand and official seal this (SEAL) 464960v1 MNI MN190 -149 day of 92015. COUNTY AUDITOR/TREASURER, WRIGHT COUNTY, MINNESOTA Its