HRA Resolution 1998-5f
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i
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
RESOLUTION NO. 98 -5
RESOLUTION AWARDING THE SALE OF, AND
PROVIDING THE FORM, TERMS, COVENANTS AND
DIRECTIONS FOR THE ISSUANCE OF ITS $5009000
TAXABLE TAX INCREMENT REVENUE NOTE, SERIES
1998.
BE IT RESOLVED BY the Board of Commissioners ( "Board ") of the Housing and
Redevelopment Authority in and for the City of Monticello (the "Authority ") as follows:
Section 1. Authorization; Award of Sale.
1.01. Authorization. The Authority and City of Monticello ( "City ") have heretofore
approved the establishment of Tax Increment Financing District No. 1 -22 (the "TIF District ")
within Redevelopment Project No. 1 ( "Project "), and have adopted a tax increment financing plan
for the purpose of financing certain improvements within the Project.
Pursuant to Minnesota Statutes, Section 469.178, the Authority is authorized to issue and
sell its bonds for the purpose of financing a portion of the public development costs of the
Project. Such bonds are payable from all or any portion of revenues derived from the TIF
District and pledged to the payment of the bonds. The Authority hereby finds and determines that
it is in the best interests of the Authority that it issue and sell its $500,000 Taxable Tax
Increment Revenue Note, Series 1998 (the "Note ") for the purpose of financing certain public
costs of the Project.
1.02. Issuance, Sale, and Terms of the Note. The Authority hereby delegates to the
Executive Director the determination of the date on which the Note is to be delivered, in
accordance with that certain Contract for Private Development between the Authority and the
Owner dated March 20, 1998 (the "Agreement "). The Note shall be sold to BBF PROPERTIES,
INC. (the "Owner "). The Note shall be dated as of the date of delivery thereof and shall bear
interest at the rate of 7.5% per annum to the earlier of maturity or prepayment. The Authority
shall receive in exchange for the sale of the Note the agreement of the Owner to pay the Public
Redevelopment Costs as defined in the Agreement.
Section 2. Form of Note. The Note shall be in substantially the following form, with
the blanks to be properly filled in and the principal amount, interest rate and payment schedule
adjusted as of the date of issue:
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UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WRIGHT
HOUSING AND REDEVELOPMENT AUTHORITY
IN AND FOR THE CITY OF MONTICELLO
No. R -1
TAXABLE TAX INCREMENT REVENUE NOTE
SERIES 1998
Rate
7.5%
$500,000
Date
of Original Issue
The Housing and Redevelopment Authority in and for the City of Monticello (the
"Authority "), for value received, certifies that it is indebted and hereby promises to pay to BBF
PROPERTIES, INC. or registered assigns (the "Owner "), the principal sum of $500,000 and to
pay interest thereon at the above - stated rate, as and to the extent set forth herein.
1. Payments. Principal and interest ( "Payments ") shall be paid on August 1, 2000
and each February 1 and August 1 thereafter to and including February 1, 2020 ( "Payment
Dates ") in the amounts and from the sources set forth in Section 3 herein. Payments shall be
applied first to accrued interest, and then to unpaid principal.
Payments are payable by mail to the address of the Owner or such other address as the
Owner may designate upon 30 days written notice to the Authority. Payments on this Note are
payable in any coin or currency of the United States of America which, on the Payment Date,
is legal tender for the payment of public and private debts.
2. Interest. Interest at the rate stated herein shall accrue on the unpaid principal,
commencing on the date of original issue. Interest shall be computed on the basis of a year of
360 days and charged for actual days principal is unpaid. Interest accruing from the date of
original issue to the first Payment Date shall be compounded semiannually on February 1 and
August 1 of each year and added to principal.
3. Available Tax Increment. Payments on this Note are payable on each Payment
Date in the amount of and solely from "Available Tax Increment," which shall mean, on each
Payment Date, the Tax Increment attributable to the Redevelopment Property and paid to the
Authority by Wright County in the six months preceding the Payment Date, all as such terms are
defined in the Contract for Private Development between the Authority and Owner dated as of
March 20, 1998 (the "Agreement "), subject to the following limitations and conditions:
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(a) Available Tax Increment does not include the first 10 percent of Tax Increment
received by the Authority during such six -month period, which amount may be retained
by the Authority and is not pledged to the Note;
(b) Available Tax Increment does not include the next $22,500 in Tax Increment received
by the Authority during such six -month period, which amount may be retained by the
Authority and is not pledged to the Note; and
(c) Available Tax Increment includes the balance of Tax Increment received by the
Authority during such six -month period and available after operation of clauses (a) and
(b) above; and
Available Tax Increment shall not include any Tax Increment if, as of any Payment Date,
there is an uncured Event of Default under the Agreement. The Authority shall have no
obligation to pay principal of and interest on this Note on each Payment Date from any source
other than Available Tax Increment and the failure of the Authority to pay the entire amount of
principal or interest on this Note on any Payment Date shall not constitute a default hereunder
as long as the Authority pays principal and interest hereon to the extent of Available Tax
Increment. The Authority shall have no obligation to pay unpaid balance of principal or accrued
interest that may remain after the final Payment on February 1, 2020.
The Authority makes no warranty or representation that Available Tax Increment will be
sufficient to pay all or any portion of the principal or interest on this Note. The Authority's
calculation of Available Tax Increment shall be conclusive.
4. Optional Prepayment. The principal sum and all accrued interest payable under
this Note is prepayable in whole or in part at any time by the Authority without premium or
penalty. No partial prepayment shall affect the amount or timing of any other regular payment
otherwise required to be made under this Note.
5. Termination. At the Authority's option, this Note shall terminate and the
Authority's obligation to make any payments under this Note shall be discharged upon the
occurrence of an Event of Default on the part of the Developer as defined in Section 9.1 of the
Agreement, but only if the Event of Default has not been cured in accordance with Section 9.2
of the Agreement.
6. Nature of Obligation. This Note is one of an issue in the total principal amount
of $500,000, all issued to aid in financing certain public development costs and administrative
costs of a Project undertaken by the Authority pursuant to Minnesota Statutes, Sections 469.001
through 469.047, and is issued pursuant to an authorizing resolution (the "Resolution ") duly
adopted by the Authority on July 1, 1998, and pursuant to and in full conformity with the
Constitution and laws of the State of Minnesota, including Minnesota Statutes, Sections 469.174
to 469.179. This Note is a limited obligation of the Authority which is payable solely from
Available Tax Increment pledged to the payment hereof under the Resolution. This Note and the
interest hereon shall not be deemed to constitute a general obligation of the State of Minnesota
or any political subdivision thereof, including, without limitation, the Authority. Neither the State
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of Minnesota, nor any political subdivision thereof shall be obligated to pay the principal of or
interest on this Note or other costs incident hereto except out of Available Tax Increment, and
neither the full faith and credit nor the taxing power of the State of Minnesota or any political
subdivision thereof is pledged to the payment of the principal of or interest on this Note or other
costs incident hereto.
7. Registration and Transfer. This Note is issuable only as a fully registered note
without coupons. As provided in the Resolution, and subject to certain limitations set forth
therein, this Note is transferable upon the books of the Authority kept for that purpose at the
principal office of the Authority, by the Owner hereof in person or by such Owner's attorney
duly authorized in writing, upon surrender of this Note together with a written instrument of
transfer satisfactory to the Authority, duly executed by the Owner. Upon such transfer or
exchange and the payment by the Owner of any tax, fee, or governmental charge required to be
paid by the Authority with respect to such transfer or exchange, there will be issued in the name
of the transferee a new Note of the same aggregate principal amount, bearing interest at the same
rate and maturing on the same dates.
This Note shall not be transferred to any person other than an affiliate, or other related
entity, of the Owner unless the Authority has been provided with an opinion of counsel or a
certificate of the transferor, in a form satisfactory to the Authority, that such transfer is exempt
from registration and prospectus delivery requirements of federal and applicable state securities
laws.
8. Additional Obligations. If the Authority issues the Supplemental Note as defined in
the Agreement, the pledge of Available Tax Increment hereunder shall be on a parity basis with
the Supplemental Note. The Authority shall issue no obligation secured in whole or in part by
Available Tax Increment other than the Supplemental Note, unless the pledge to such obligation
is subordinate to the pledge to this Note and the Supplemental Note.
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 exist, to happen, and to be
performed in order to make this Note a valid and binding limited obligation of the Authority
according to its terms, have been done, do exist, have happened, and have been performed in due
form, time and manner as so required.
IN WITNESS WHEREOF, the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Monticello has caused this Note to be executed
with the manual signatures of its Chair and Executive Director, all as of the Date of Original
Issue specified above.
d�
Executive Director
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Housing and Redevelopment Authority in
and fo the i of nticello
Chair
REGISTRATION PROVISIONS
The ownership of the unpaid balance of the within Note is registered in the bond register
of the City Finance Director, in the name of the person last listed below.
Date of Signature of
Registration Registered Owner City Finance Director
BBF Properties, Inc.
Federal Tax I.D. No. 41 -189 -3246
Section 3. Terms, Execution and Delivery.
3.01. Denomination, Payment. The Note shall be issued as a single typewritten note
numbered R -1.
The Note shall be issuable only in fully registered form. Principal of and interest on the
Note shall be payable by check or draft issued by the Registrar described herein.
3.02. Dates; Interest Payment Dates. Principal of and interest on the Note shall be
payable by mail to the owner of record thereof as of the close of business on the fifteenth day
of the month preceding the Payment Date, whether or not such day is a business day.
3.03. Registration. The Authority hereby appoints the City Finance Director to perform
the functions of registrar, transfer agent and paying agent (the "Registrar "). The effect of
registration and the rights and duties of the Authority and the Registrar with respect thereto shall
be as follows:
(a) Register. The Registrar shall keep at its office a bond register in which the
Registrar shall provide for the registration of ownership of the Note and the registration of
transfers and exchanges of the Note.
(b) Transfer of Note. Upon surrender for transfer of the Note duly endorsed by the
registered owner thereof or accompanied by a written instrument of transfer, in form reasonably
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 shall authenticate and deliver, in the
name of the designated transferee or transferees, a new Note of a like aggregate principal amount
and maturity, as requested by the transferor. Notwithstanding the foregoing, the Note shall not
be transferred to any person other than an affiliate, or other related entity, of the Owner unless
the Authority has been provided with an opinion of counsel or a certificate of the transferor, in
a form satisfactory to the Authority, that such transfer is exempt from registration and prospectus
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delivery requirements of federal and applicable state securities laws. The Registrar may close the
books for registration of any transfer after the fifteenth day of the month preceding each Payment
Date and until such Payment Date.
(c) Cancellation. The Note surrendered upon any transfer shall be promptly cancelled
by the Registrar and thereafter disposed of as directed by the Authority.
(d) Improper or Unauthorized Transfer. When the Note is presented to the Registrar
for transfer, the Registrar may refuse to transfer the same until it is satisfied that the endorsement
on such Note or separate instrument of transfer is legally authorized. The Registrar shall incur
no liability for its refusal, in good faith, to make transfers which it, in its judgment, deems
improper or unauthorized.
(e) Persons Deemed Owners. The Authority and the Registrar may treat the person
in whose name the Note is at any time registered in the bond register as the absolute owner of
the Note, whether the Note shall be overdue or not, for the purpose of receiving payment of, or
on account of, the principal of and interest on such Note and for all other purposes, and all such
payments so made to any such registered owner or upon the owner's order shall be valid and
effectual to satisfy and discharge the liability of the Authority upon such Note to the extent of
the sum or sums so paid.
(f) Taxes, Fees and Charges. For every transfer or exchange of the Note, the
Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for
any tax, fee, or other governmental charge required to be paid with respect to such transfer or
exchange.
(g) Mutilated, Lost, Stolen or Destroyed Note. In case any Note shall become
mutilated or be lost, stolen, or destroyed, the Registrar shall deliver a new Note of like amount,
maturity dates and tenor in exchange and substitution for and upon cancellation of such mutilated
Note or in lieu of and in substitution for such Note lost, stolen, or destroyed, upon the payment
of the reasonable expenses and charges of the Registrar in connection therewith; and, in the case
the Note lost, stolen, or destroyed, upon filing with the Registrar of evidence satisfactory to it that
such Note was lost, stolen, or destroyed, 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, in which both the Authority and the Registrar shall be named as obligees. The Note so
surrendered to the Registrar shall be cancelled by it and evidence of such cancellation shall be
given to the Authority. If the mutilated, lost, stolen, or destroyed Note has already matured or
been called for redemption in accordance with its terms, it shall not be necessary to issue a new
Note prior to payment.
3.04. Preparation and Delivery. The Note shall be prepared under the direction of the
Executive Director and shall be executed on behalf of the Authority by the signatures of its Chair
and Executive Director. In case any officer whose signature shall appear on the Note shall cease
to be such officer before the delivery of the Note, such signature shall nevertheless be valid and
sufficient for all purposes, the same as if such officer had remained in office until delivery.
When the Note has been so executed, it shall be delivered by the Executive Director to the Owner
in accordance with the Agreement.
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Section 4. Security Provisions.
4.01. Pled -ge. The Authority hereby pledges to the payment of the principal of and
interest on the Note all Available Tax Increment as defined in the Note.
Available Tax Increment shall be applied to payment of the principal of and interest on the Note
in accordance with the terms of the form of Note set forth in Section 2 of this resolution.
4.02. Bond Fund. Until the date the Note is no longer outstanding and no principal
thereof or interest thereon (to the extent required to be paid pursuant to this resolution) remains
unpaid, the Authority shall maintain a separate and special "Bond Fund" to be used for no
purpose other than the payment of the principal of and interest on the Note. The Authority
irrevocably agrees to appropriate to the Bond Fund in each year Available Tax Increment
necessary to pay principal and interest due on the Note in such year. Any Available Tax
Increment remaining in the Bond Fund shall be transferred to the Authority's account for TIF
District No. 1 -22 shall be transferred to the Authority's account for the TIF District upon the
payment of all principal and interest to be paid with respect to the Note.
Section 5. Certification of Proceedings.
5.01. Certification of Proceedings. The officers of the Authority are hereby authorized
and directed to prepare and furnish to the Owner of the Note certified copies of all proceedings
and records of the Authority, and such other affidavits, certificates, and information as may be
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,
shall be deemed representations of the Authority as to the facts recited therein.
Section 5. Effective Date. This resolution shall be effective upon full execution of the
Agreement.
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Adopted this 1 st day of July 1998.
Chair' .
ATTEST:
cn� \4�,Crl.
Executive Director
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