1992 Original EDA Bylaws ResolutionsSECTION
NUMBER
DOCUMENT
EXECUTED
1
EDA enabling resolution
yes
2
EDA organizing resolution with amendment
and bylaws
yes
3
Resolution setting salary for
Commissioners
yes
4
EDA resolution accepting Redevelopment
Plan
yes
5
Planning Commission resolution accepting
plan
yes
6
Redevelopment Plan
yes
7
City Council Resolution accepting plan
yes
8
Resolution authorizing execution and
delivery of a lease with option to
purchase
no
9
Bonding resolution
no
10
Lease
no
11
Certification of City
no
12
Certification of EDA
no
13
Certificate of bond registrar
no
14
Certificate of purchaser
no
15
County Auditors Certificate as to
registration
no
16
EDA non -arbitrage certificate
no
17
Sample bonding attorney letter
no
18
Sample city Attorney letter
no
19
Treasurers receipt for bonds
no
20
Form 8038-G
no
21
UCC-i (optional, for equipment)
no
{
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO* 92-
RESOLUTION ESTABLISHING AN ECONOMIC DEVELOPMENT AUTHORITY
FOR THE CITY OF OTSEGO
THE 14TH DAY OF SpptT embo� 1992
WHEREAS, the City Council of the City of Otsego recognizes the need
for economic development within the City; and
WHEREAS, the City Council of Otsego desires .to encourage, attract,
promote and develop economically sound industry and commerce within
the City; and
WHEREAS, such economic development will enhance the community and
the economic welfare of the citizens of the City of Otsego; and
WHEREAS, the above said economic development requires the
encouragement of the City and assistance in making suitable land
available for development; and
WHEREASthe above said economic development requires control by
,
the City to prevent conflicts with the City of Otsego Comprehensive
Plan and the desired orderly development of the City; and
WHEREASthe establishment of an economic development authority
,
will promote and enhance the above said economic development; and
WHEREAS, a notice of public hearing to consider the need for an
economic development authority was duly published in the
Elk River Star News once a week for two weeks on
eptem er 9, 1992 and S-eptomhar 16, '99i and
WHEREAS, a public hearing was held on cept- 14 19 and all
concerned members of the public were heard; and
WHEREAS, the City Council has considered the comments made at the
hearing and the facts presented there;
NOW, THEREFORE, BE IT RESOLVED that the Otsego City Council hereby
establishes an Economic Development Authority to be known as the
Otsego Economic Development Authority, The Otsego Economic
Development Authority shall be established in the form and shall
and operate with the powers established in the attached document
titled "Governing Resolution, City of Otsego Economic Development
Authority" and that said document is incorporated herein and made
part of this resolution.
By order of the City Council of the City of Otsego.
CITY OF OTSEGO
Norman Freske, Mayor
AT ST:
I 7; bm_e Perrault, City Clerk
GOVERNING RESOLUTION, CITY OF OTSEGO ECONOMIC DEVELOPMENT
AUTHORITY
1. Authority to Establish, Governing Law:
a. The City of Otsego Economic Development Authority
(hereinafter the "Authority") is established under the
authority of Minnesota Statutes 469.090 through 469.1081,
as amended, and the organization, powers and activities
of the Authority shall be governed by those said statutes
and this resolution.
2. Commission Size Appointmentl Compensation and Removal of
commissioners*
a. Size: The Authority Commission shall consist of the
members of the serving City Council.
b. Terms and Appointment of Commissioners: The members of
the Commission shall serve as Commissioners during their
regularly elected term of -office as a member of the
Otsego City Council.
c. Increase in Commission Members: The Authority Commission
may be increased in number from five to seven members by
a resolution adopted by the City Council following the
same procedure used to pass this resolution or that
prescribed by Minnesota Statute 469.095, Subdivision 3,
as amended.
d. Compensation and Reimbursement: Commissioners, including
the President, shall be paid for attending each regular
or special meeting of the Authority in an amount to be
set by resolution of the City Council. In addition to
the said payment for attending regular and special
meeting Commissioners shall be reimbursed for actual
expenses incurred in doing official business of the
Authority. All money paid for compensation or
reimbursement shall be drawn form -the Authority's budget.
e. Removal for Cause: A Commissioner may be removed by the
City Council for inefficiency, neglect of duty or
misconduct in office. Such removal shall be preceded by
a hearing wherein the Commissioner charged shall be given
an opportunity to be heard in person or by counsel. The
Commissioner charged shall be provided a written copy of
the charges at least ten days before any hearing. If
written charges are submitted against a Commissioner the
City Council may temporarily suspend the said
Commissioner. When any Commissioner is removed for cause
a record of the proceedings of the hearing shall be filed
in the office of the City Clerk together with the charges
and findings of fact.
3. Authority Officers Duties and Organizational Matters:
a. The Authority shall adopt bylaws, rules of procedure and
an official seal.
b. Officers Required: The Authority shall elect a
president, vice president, secretary, treasurer and an
assistant treasurer. The president, treasurer and
secretary shall be elected on an annual basis. The
office of president and vice-president shall not be held
by the same Commissioner, the other offices may be held
by the same Commissioner. The offices of secretary and
assistant treasurer need not be held by a Commissioner.
c. Duties and Powers of Officers:
i. The officers shall have the usual duties and powers
of their offices. They may be granted other duties
and powers by resolution of the Authority.
ii.
Treasurers Duties: The treasurer:
(1) shall receive, and is responsible for, all
Authority monies;
(2) is responsible for the acts of the assistant
treasurer;
(3) shall disburse money by check only,
(4) shall keep an account of the source of all
receipts, and the nature, purpose and
authority of all disbursements; and
(5) shall file the Authorities detailed financial
statement with its secretary at least once a
year at times to be set by the Authority.
iii.
Assistant Secretary: The assistant treasurer has
the powers and duties of the treasurer if the
treasurer is absent or disabled.
iv.
Treasurers Bond: The treasurer shall give bond to
the state conditioned for the faithful discharge of
official duties. The said bond shall be approved
as to form and surety by resolution of the
Authority and shall be for twice the amount of
money likely to be on hand at any one time as
determined annually by the Authority. In no case
shall the bond exceed $300,000.
v.
Public Money: Authority money is public money.
vi.
Checks: All Authority checks must be signed by the
treasurer and one other officer named by resolution
of the Authority. The check must state the name of
the payee and the nature of the claim for which
the check is issued.
d. Financial Statement:
i. Contents: The Authority's financial statement must
show all receipts and disbursement, their nature,
the money on hand, the purposes to which the money
on hand is to be applied, the authorities credits
and assets and its outstanding liabilities in the
form required for the financial statements of the
City of Otsego.
ii. Examination and Approval: The Authority shall
examine the financial statement along with the
treasurers vouchers. If the Authority finds the
financial statement and vouchers are correct the
Authority shall approve them by resolution and
enter the said resolution in its records.
4. Emplovees, Services and Supplies:
a. Emplovees: The Authority may employ an executive
director, a chief engineer, other technical experts and
agents and other employees as it may require and
determine their duties, qualifications and compensation.
b. Contracts for Services: The Authority may contract for
the services of consultants, agents, public accountants
and other persons needed to perform its duties and
exercise its powers.
c. Legal Services: The Authority shall use the services of
the City Attorney and said City Attorney shall serve as
its chief legal advisor.
d. Supplies: The Authority may purchase the supplies and
materials it needs to carry out its duties and exercise
its authority as prescribed by this resolution and
Minnesota Statue 469.090 to 469.108, as amended.
e. City Purchasing: The Authority may use the facilities of
the City of Otsego in connection with construction work
and to purchase equipment, supplies or materials.
f. City Facilities and Services: The City of Otsego may
furnish any offices, structures and space, and
stenographic, clerical, engineering or other assistance
to the Authority required in the performance of its
duties or the exercise of its powers.
5. Conflict of Interest: Except as authorized in Minnesota
Statute 471.88 a Commissioner, officer or employee of the
Authority shall not acquire any financial interest, direct or
indirect, in any project or any property included or planned
to be included in any project, nor shall the said party have
an financial interest, direct or indirect, in any contract or
proposed contract for materials or service to be furnished or
used in connection with any project.
6. Depositories Default and Collateral:
a. Depositories: Every two years the Authority shall name
a national or state chartered bank located within the
State of Minnesota as a depository. Before acting as a
depository the named bank shall give the Authority a bond
approved as to form and surety by the Authority. The
said bond shall be conditioned for the safekeeping and
prompt repayment of all deposits and shall be at least
equal in amount to the maximum sums expected to be
deposited at any one time. The Authority nlay deposit all
funds from any source in one account.
b. Liability for Deposits: When Authority funds are
deposited in a bonded depository, the treasurer and the
surety of the treasurer official bond are exempt from
liability for the los of those said deposits because of
the failure, bankruptcy or other act or default of the
depository. The Authority may accept assignments of
collateral from its depository to secure deposits just as
assignments of collateral are permitted by law to secure
deposits of the City of Otsego.
7. Obligations:
a. Taxes and Assessments Prohibited: The Authority must not
levy a tax or special assessment, except as otherwise
provided in Minnesota Statutes 469.090 to 469.108, pledge
the credit of the State of Minnesota or the City of
Otsego or incur an obligation enforceable on any property
not owned by the Authority.
b. Budget to the City: Annually, at a time to be fixed by
resolution or ordinance of the City of Otsego, the
Authority shall send its budget to the Otsego City
Council. The budget must include a detailed written
estimate of the amount of money that the Authority
expects to need from the City of Otsego to do Authority
business during the next fiscal year. The needed amount
shall be that amount in excess of any expected receipts
from other sources.
c. Fiscal Year: The fiscal year of the Authority shall be
the same as the fiscal year of the City of Otsego.
d. Annual Report: Annually, at a time and in the form fixed
by the Otsego City Council, the Authority shall make a
written report to the Otsego City Council giving a
detailed account of the Authorities receipts and
expenditures during the preceding calendar year together
with additional matters and recommendations the Authority
deems advisable for the economic development of the City
of Otsego.
e. Audits: The financial statements of the Authority shall
be prepared, audited, filed and published or posted in
the manner required for the financial statements of the
City of Otsego. The Authorities financial statements
shall be such form to permit comparison and
reconciliation with the City of Otsego accounts and
financial reports. The above said financial report shall
be filed with the state auditor by June 30 of each year.
The auditor shall review the Authorities financial report
and may accept it or, in the public interest, audit the
books of the Authority.
f. Compliance Examinations: At the request of the City of
Otsego, or on the state auditor's initiative, the state
auditor may make a legal compliance examination of the
Authority for the City of Otsego in accordance with
Minnesota Statute 469,100, Subdivision 6, as amended.
8. Powers of the Authority, General obligation Bonds, Revenue
Bonds
a. Powers: The Authority shall have all of the powers
listed and granted in Minnesota Statute 469,101, as
amended.
b. General Obligation Bonds: The Authority shall have the
authority to issue such bonds in the amounts and by the
process established by Minnesota Statute 469.102, as
amended.
c. Revenue Bonds: The Authority shall have the authority to
issue such bonds in the amounts and by the process
established by Minnesota Statute 469.103, as amended.
9. City Tax Levv:
a. The City of Otsego may levy a tax in any year for the
benefit of the authority. The said tax must not be more
that 0.01813 percent of the taxable market value. The
amount levied must be paid by the City of Otsego
treasurer to the treasurer of the Authority to be spent
by the Authority.
b. The Authority shall request the levy of the above said
tax in a manner set by the City Council.
c. The City of Otsego may increase its levy for the
Authority's purposes in accordance with Minnesota Statute
469.107, Subdivision 2, as amended.
EDA4A
2
OTSEGO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION AMENDING THE ORGANIZING RESOLUTION
Resolution No.
At a meeting of the Board of Commissioners of the Economic
Development Authority of the City of Otsego held on the 15th day
of October 1992, at 3:00 o'clock p.m., the following
Commissioners were present:
Larry Fournier Norman Freske
Floyd Roden Douglas Lindenfelser
Ron Black
Commissioner offered the following
Resolution:
WHEREAS, the City Council of the City of Otsego, Minnesota
(the "City"), pursuant to a resolution of the City Council
established the Economic Development Authority of the City of
Otsego (the "Authority"); and
WHEREAS, the Authority Board of Commissioners (hereinafter
"Commissioners") met of October 12, 1992 for purposes of
organizing; and
WHEREAS, the Board elected certain officers at the said
meeting; and
WHEREAS, the Board has further considered the duties and
functions of the officers elected,
NOW,
THEREFORE, BE IT RESOLVED by the Economic
Development
Authority
of the City of Otsego
that the Resolution
Organizing
the Otsego
Economic Development
Authority be amended
as follows:
2. Adoption of Bylaws and of Appointment of Officers. The
Board hereby approves (1) the Bylaws of the EDA, as
presented for the Board's consideration, and (2) appoints
and approves the following officers of the EDA:
President
Larry
Fournier
Vice -President
Norman
Freske
Secretary
Jerome
Perrault
Ass-istant Secretary
Elaine
Beatty
Treasurer
Floyd
Roden
Assistant Treasurer
Jim Barthel
Said Resolution was duly seconded by Commissioner
and put to a vote. Voting in favor were
Commissioners:
Larry Fournier
Floyd Roden
Ron Black
Adopted this day of
Norman Freske
Douglas Lindenfelser
zc;��✓
arry Fod nier,President
ATTEST:
jrome Perra lt, Secretary
EDA5B
1992.
OTSEGO ECONOMIC DEVELOPMENT AUTHORITY
A RESOLUTION ORGANIZING THE OTSEGO ECONOMIC
DEVELOPMENT AUTHORITY
Resolution No.
IT IS HEREBY RESOLVED by the Board of Commissioners (the
"Board") of the Otsego Economic Development Authority (the "EDA")
as follows:
1. Recitals.
(a) On September 28, 1992, the City of Otsego, Minnesota
(the "City"), acting through its City Council, adopted a
certain enabling resolution establishing the EDA pursuant
to Minnesota Statutes, Section 469,090 through 469.108.
(b) The Board is meeting for the purpose of organizing
the EDA.
2. Adoption of Bylaws and of Appointment of Officers. The
Board hereby approves (1) the Bylaws of the EDA, as presented
for the Board's consideration, and (2) appoints and approves
the following officers of the EDA:
President
Vice -President
Secretary
Treasurer
Assistant Treasurer
Larry Fournier
Norman Freske
Douglas Lindenfelser
Floyd Roden
Ron Black
The President shall be the chief presiding officer of the
Board and shall have such other responsibilities as may be required
by law or conferred on the President by resolution of the Board.
In the absence of the President, the Vice -President shall assume
all of said responsibilities of the President. The offices of
President, Treasurer, and Secretary shall be elected annually, as
required by law. The Secretary shall act as the chief recording
officer for the Board and shall maintain a file of minutes of Board
meetings and resolutions.
In accordance with Minnesota Statutes, Section 469.096,
Subdivision 8, all checks of the EDA shall be signed by the
Treasurer and the Assistant Treasurer and shall state the nature of
the claim for which the check is issued. As required by law, the
EDA shall adopt an official seal.
Adopted by the Board of Commissioners of the Otsego Economic
Development Authority this day of , 19_
Secretary's Certificate
The undersigned, being the duly appointed and acting Secretary
of the Otsego Economic Development Authority, hereby certifies that
a meeting of the Board of Commissioners therefor was duly called
and regularly held in the Otsego City Hall on
19 and that at said meeting Commissioner
moved the adoption of the foregoing resolution, relating to the
organization of the Otsego Economic Development Authority, which
resolution upon vote being taken thereon, the following
Commissioners voted in favor thereof:
and the following voted against the same:
whereupon said resolution was declared duly passed and adopted.
Witness my hand as the Secretary of the Otsego Economic
Development Authority this day of , 19_
Secretary
Otsego Economic Development
Authority
EDA5A
BYLAWS OF THE CITY OF OTSEGO
ECONOMIC DEVELOPMENT AUTHORITY
ARTICLE I - THE AUTHORITY
Section 1. Name of Authority. The name of the Authority shall be
the " Otsego Economic Development Authority" (which may sometimes
be referred to as the "EDA" or the "Authority"), and its
governing body shall be called the Board of Commissioners (the
"Board"). The Board shall be the body responsible for the
general governance of the Authority and shall conduct its
official business at meetings thereof.
Section 2. Seal of Authority. The Authority shall have an
official seal, as required by Minnesota Statutes, Section
469,096, Subdivision 1. The form of the seal shall be set by
resolution of the Board.
Section 3. Office of Authority. The offices of Authority shall
be located at the City Hall of the City of Otsego, County of
Wright, State of Minnesota, wherever that City Hall may be
located.
ARTICLE II - OFFICERS
Section 1. Officers. The officers of the Authority shall be a
President, a Vice -President, a Treasurer, an Assistant Treasurer,
and a Secretary. The President, the Vice -President and the
Treasurer shall be members of the Board and shall be elected
annually at a regularly scheduled meeting of the Board at which a
quorum attends. No Commissioner may be both President and Vice -
President simultaneously.
Section 2. President. The President shall preside at all
meetings of the Board. Except as otherwise authorized by
resolution of the Board, the President and the Secretary (the
Vice -President, in the Secretary's absence or incapacity) shall
sign all contracts, deeds, and other instruments made of executed
by the Authority, except that all checks of the Authority shall
be signed by the Treasurer and Assistant Treasurer. At each
meeting the President shall submit such recommendations and
information as he or she may consider proper concerning the
business, affairs, and policies of the Authority.
Section 3. Vice -President. The Vice President shall perform the
duties of the -President in the absence or incapacity of the
President; and in case of the resignation or death of the
President, the Vice -President shall perform such duties as are
I
mposed on the President until such time as the Board shall
select a new President.
Section 4. Secretary. The Secretary shall keep minutes of all
meetings of the Board and shall maintain all records of the
Authority. The Secretary shall also have such additional duties
and responsibilities as the Board may from timeto time and by - --..-
resolution prescribe.
Section 5. Treasurer, The Treasurer shall have the care and
custody of all funds of the Authority and shall deposit the same
in the name of the Authority in such bank or banks as the Board
may select. The Treasurer and Assistant Treasurer shall sign all
orders and checks for the payment of money and shall pay out and
disburse such moneys under the direction of the Board. The
Treasurer shall keep regular books of accounts showing receipts
and expenditures and shall render to the Board, at least annually
(or more often when requested), an account of such transactions
and also of the financial condition of the Authority. The
Assistant Treasurer shall act as the Treasurer's agent and
assistant to perform the above -described duties, subject to the
Treasurer's approval thereof.
Section 6. Additional Duties. The officers of the Authority
shall perform such other duties and functions as may from time to
time be required by the Board or the bylaws or rules and
regulations of the Authority.
Section 7. Vacancies. Should the office of President, President, Treasurer, Treasurer, Assistant Treasurer, or Secretary become
vacant, the Board shall elect a successor from its membership at
the next regular meeting, or at a special meeting called for such
purpose, and such election shall be for the unexpired term of the
said officer.
Section 8. Advisory Committee. A five (5) member Advisory
Committee shall be established with the members being chosen by
the Board from amongst persons qualified to advise the Board on
business and economic matters. This Committee shall serve at the
will of the Board.
Section 9. Additional Personnel. The Board may from time to time
employ such personnel as it deems necessary to exercise its
powers, duties, and functions. The selection and compensation of
such personnel shall be determined by the Board.
ARTICLES III - MEETINGS
Section 1. Regular Meetings. The Board may hold regular meetings
according to a meeting schedule, if any, adopted or revised from
time to time by resolution of the Board.
Section 2. Special Meeting. Special meetings of the Board may be
called by the President or any two members of the Board for the
purpose of transacting any business designated in the call. The
call for a special meeting may be delivered at any time prior to
the time of the proposed meeting to each member of the Board or
may be mailed to the business or home address of each member of
the Board at least three (3) days prior to the date of such
special meeting. At such special meeting no business shall be
considered other than as designated in the call, but if at least
four members of the Board are present at a special meeting, any
and all businesses may be transacted at such special meeting.
Notice of any special meeting shall be posted and/or published as
may be required by law.
Section 3. Emergency Meetings. Emergency meetings shall be held
pursuant to Minnesota Statutes, Chapter 471,705, as amended.
Section 4. Quorum. The powers of the Authority shall be vested
in the Board. Three Commissioners shall constitute a quorum for
the purpose of conducting the business and exercising the powers
of the Authority and for all other purposes, but a smaller number
may adjourn from time to time until a quorum is obtained. When a
quorum is in attendance, action may be taken by the Board upon a
vote of majority of the Commissioners present.
Section 5. Order of Business. At the regular meetings of the
Board the following shall be the order of business.
1.Ro11 Call.
2.Approval of the minutes of previous meetings.
3.Bills and communications.
4.Reports.
5.Unfinished business.
6.New business.
7.Adjournment.
All resolutions shall be written or transcribed and shall be
retained in the journal of the proceedings maintained by the
Secretary.
Section
6. Adoption
of Resolution.
Resolutions
of the Board
shall be
deemed
adopted if approved by not less
than a simple
majority
of all
Commissioners present, unless a
different
requirement
for
adoption is prescribed by law.
Resolution may,
but need
not be,
read aloud prior to vote taken
thereon and may,
but need
not be,
executed after passage.
Section 7. Rules of Order. The meeting of the Board shall be
governed by the most recent edition of Robert's Rules of Order.
ARTICLE IV - MISCELLANEOUS
Section 1. Amendments to Bylaws. The bylaws of the Authority
shall be amended only by resolution approved by at least three of
the members of the Board.
Section
2. Fiscal
Year.
The
fiscal
year
of
the Authority shall
coincide
with the
fiscal
year
of the
City
of
Otsego.
Dated: , 19
By the Board of Commissioners of the Otsego Economic Development
Authority:
President
EDASC
OTSEGO ECONOMIC DEVELOPMENT AUTHORITY
A RESOLUTION ESTABLISHING AN OFFICIAL
DEPOSITORY FOR THE AUTHORITY
Resolution No.
WHEREAS, the City of Otsego has established an Economic Development
Authority known as The Otsego Economic Development Authority
(hereinafter "Authority"); and
WHEREAS, the Authority has met and passed an organizing resolution
and adopted bylaws; and
WHEREAS, Minnesota Statutes, Chapter 469.099 requires the Authority
to establish a depository for its funds; and
WHEREAS, the above said depository must be located within the State
of Minnesota; and
WHEREAS, the depository is required to post bond, conditioned for
safekeeping and prompt repayment of deposits, for the projected
maximum daily balance on deposit, and
WHEREAS, the estimated maximum daily balance is ; and
WHEREAS, located in the State of Minnesota and
has agreed to post bond in the above said amount;
NOW THEREFORE BE IT RESOLVED that ,located at
shall be the depository for the Authority; and
BE IT ORDERED that the Treasurer review the bond provided by
and verify that it is sufficient in amount and form; and
BE IT FURTHER ORDERED, that the Treasurer open one account at the
depository and deposit all Authority monies in that account and use
that account to make all disbursements of the Authority.
Passed by the Board of Commissioners of the Otsego Economic
Development Authority this day of , 19_
President
Attest:
Secretary
EDASD
OTSEGO ECONOMIC DEVELOPMENT AUTHORITY
A RESOLUTION ACCEPTING THE BOND
OFFERED BY THE TREASURER
Resolution No.
WHEREAS, the City of Otsego has established an Economic Development
Authority known as The Otsego Economic Development Authority
(hereinafter "Authority"); and
WHEREAS, the Authority has met and passed an organizing resolution
and adopted bylaws; and
WHEREAS the Board of Commissioners has duly elected
as the Treasurer; and
WHEREAS, Minnesota Statutes, Chapter 469.096, Subdivision 6
requires the Authority Treasurer to post bond, conditioned for the
faithful discharge of official duties, for twice the amount likely
to be on hand, not to exceed $300,000; and
WHEREAS, the Treasurer has sought bonding from in
the amount of ; and
WHEREAS, is registered and licensed to
perform bonding in the State of Minnesota; and
WHEREAS, the bond offered by the Treasurer is sufficient in amount
and form to meet the statutory obligation;
NOW THEREFORE BE IT RESOLVED that the bond offered by the Treasurer
I
n the amount of said bond to be held by
is hereby accepted by the Board as a proper bond.
Passed by the Board of Commissioners of the Otsego Economic
Development Authority this day of 19_
President
ATTEST:
Secretary
(= D f1 S C-
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNE50TA
A RESOLUTION ESTABLISHING SALARIES
FOR COMMISSIONERS OF THE OTSEGO
ECONOMIC DEVELOPMENT AUTHORITY
WHEREAS, the City of Otsego has duly established an Economic
Development Authority by resolution passed on the day of
1992; and
WHEREAS, the Otsego Economic Development Authority must meet and
establishe bylaws, a depository, a budget and address various
other matters; and
WHEREAS, the time required of the Commissioners in performing
their duties has been considered; and
WHEREAS, this Council has considered the salary level that would
represent fair compensation for that time and meet the budgetary
restraints of the City;
NOW THEREFORE BE IT RESOLVED, that the salary for the
Commissioners of the Otsego Economic Development Authority be set
in the following amounts:
( 1. President: $ per meeting and all
justifiable and necessary expenses incurred performing the
business of the Authority.
2. Vice President: $ per meeting and all
justifiable and necessary expenses incurred performing the
business of the Authority.
3. Commissioners: $ per meeting and all
justifiable -and necessary expenses incurred performing the
business of the Authority.
BE IT FURTHER RESOLVED that the Board of Commissioners of the
Otsego Economic Development Authority shall set the salary to be
paid to the Treasurer, Assistant Treasurer and Secretary for
performance of their duties outside of regular meetings, subject
to approval by the City Council.
Passed this day of
City Council
ATTEST:
Jerome Perrault, City Clerk
1992 by the Otsego
Norman Freske, Mayor
LDt�S�'
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
A RESOLUTION ESTABLISHING SALARIES
FOR COMMISSIONERS OF THE OTSEGO
ECONOMIC DEVELOPMENT AUTHORITY
WHEREAS, the City of Otsego has duly established
Development Authority by resolution passed on the
September , 1992, and
WHEREAS, the Otsego
establish bylaws, a
other matters; and
n Economic
14TH day of
Economic Development Authority must meet and
depository, a budget and address various
WHEREAS, the
time
required of the
Commissioners
in performing
their duties
has
been considered,
and
WHEREAS, this Council has considered the salary level that would
represent fair compensation for that time and meet the budgetary
restraints of the City,,
NOW THEREFORE BE IT RESOLVED, that the salary for the
Commissioners of the Otsego Economic Development Authority be set
in the following amounts:
1. President: $ 25 00 per meeting and all
justifiable and necessary expenses incurred performing the
business of the Authority.
2. Vice President: $ 25 00 per meeting and all
justifiable and necessary expenses incurred performing the
business of the Authority.
3. Commissioners: $ 25 00 per meeting and all
justifiable and necessary expenses incurred performing the
business of. the Authority.
BE IT FURTHER RESOLVED that the Board of Commissioners of the
Otsego Economic Development Authority shall set the salary to be
paid to the Treasurer, Assistant Treasurer and Secretary for
performance of their duties outside of regular meetings, subject
to approval by the City Council.
Passed -this 12thday of October , 1992 by the Otsego
City Council j� �" j%
k
Norman Fres e, Mayor
ATT ST: Norman F Freske, Mayor
Je ome Perra lt, City Clerk
CITY SEAL
OTSEGO ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION APPROVING A CERTAIN REDEVELOPMENT PLAN
At a meeting of
Development Authority
October 1992, at 2:30
were present:
Larry Fournier
Floyd Roden
Ron Black
the Board of Commissioners of the Economic
of the City of Otsego held on the 20th day of
o'clock p.m., the following Commissioners
Norman Freske
Douglas Lindenfelser
Commissioner Ron Black offered the following Resolution:
WHEREAS, the City Council of the City of Otsego, Minnesota
(hereinafter "City"), pursuant to a resolution of the City Council
established the Economic Development Authority. of the City of
Otsego (hereinafter "Authority") which has the powers contained in
Minnesota Statutes, Section 469.090 to 469.108, the powers of a
Housing and Redevelopment Authority under Minnesota Statutes,
Section 469,001 to 469,047 or any other law, and powers of a city
under Minnesota Statutes, Section 469,124 to 469.134 or any other
law: and
WHEREAS, it is desirable and in the public interest that the
Authority, undertake and carry out a redevelopment plan pursuant to
Minnesota Statutes, Section 469.001 to 469.047, encompassing the
area which is indicated on Exhibit A attached hereto and made a
part hereof, (hereinafter "Redevelopment Area" or "Project"), and
WHEREAS, the Authority has reviewed the "Redevelopment Plan
for the Otsego Community Center Project", dated October 15, 1992
(hereinafter "Plan"), which sets forth a redevelopment plan for the
Redevelopment Area; and
WHEREAS, the Authority is required to submit the Plan to the
Otsego Planning commission for review; and
WHEREAS, Minnesota Statutes, Section 469.028, Subd. 1 requires
that the Authority, after determination that the Project should be
undertaken, shall apply to the City for approval of said Plan; and
WHEREAS, the Plan was presented to this meeting of the
Authority for consideration and approval.
NOW, THEREFORE, BE IT RESOLVED by the Economic Development
Authority of the City of Otsego as follows:
Section 1. That the Redevelopment Area described in the Plan
is a Redevelopment Project within the meaning of Minnesota
Statutes, Section 469.002, Subdivision 14.
Section 2. That said Plan and Project will carry out the
purpose and policy of Minnesota Statutes, Chapter 469.001 to
469.047, and Section 469.124 to 469.134.
Section 3. That said Plan is all respects is approved, subject
to the approval of the Otsego Planning Commission and the secretary
is hereby directed to file said Plan with the minutes of this
meeting.
Section 4.
That the plan
be submitted to the Otsego
Planning
Commission for
review.
"
Section
4. That application
is hereby made to the
City Council
of the City
of Otsego,
subject
to prior approval by the Otsego
Planing Commission,
for
approval
of said Plan and the
staff of the
Authority is
directed to
transmit a copy of the Plan,
along with a
copy of this
resolution
and the
written opinion of
the Planning
Commission, to the City
Council,
Section 5. That the City Council is hereby requested to hold
a public hearing on the Plan after giving published notice of the
date, time, place and purpose of such hearing in a newspaper of
general circulation in the City, such notice to be published at
least ten days and no more than thirty days prior to the date of
the hearing.
Section 6. That the City Council is hereby requested to
approve said Plan and Project and to find by resolution that: (A)
the land in the Project area would not be made available for
redevelopment without the financial aid to be sought; (B) the Plan
for the Project area in the locality will afford maximum
opportunity, consistent with the sound needs of the locality as a
whole, for the redevelopment of such area by private enterprise;
and (C) the Plan conforms to a general plan for the development of
the city as a whole.
Said Resolution was duly seconded by Commissioner Norm Freske
and put to a vote. Voting in favor were Commissioners:
Larry Fournier
Floyd Roden
Ron Black
Norman Freske
Douglas Lindenfelser
Adopted this 20th day of October, 1992.
arry F t nier, President
ATTEST:
J bme Perra lt, Secretary
5
PLANNING COMMISSION OF THE CITY OF OTSEGO
RESOLUTION ACCEPTING THE EDA REDEVELOPMENT PLAN
Resolution No.
WHEREAS, the Economic Development Authority of the City of
Otsego ( the "Authority"), pursuant to a Resolution dated October
201 1992 has requested review of and comment on the Redevelopment
Plan for the Otsego Community Center Project (hereinafter
"Plan")dated October 20, 1992; and
WHEREAS, the Plan has been received by the Otsego Planning
Commission (hereinafter "Commission"); and
WHEREAS, the Authority has transmitted the Plan and, by
resolution, has applied to the City Council of the City of Otsego,
Minnesota (hereinafter "City"), for approval of the Plan; and
WHEREAS, the Commission has reviewed the Plan and finds that
the Plan will contribute to the development of increased economic
activity in the City, and
WHEREAS, the Commission finds that the Plan will increase the
likelihood of low and moderate income housing development in
certain portions of the City, and
WHEREAS, it is desirable and in the public interest that the
Authority undertake and carry out the Plan pursuant to Minnesota
Statutes, Section 469.001 to 4699047; and
WHEREAS, the Commission finds the Plan to be in conformance
with the City Plan and City; projected and planned development within the
NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of
the City of Otsego, Minnesota, that the Commission recommends
approval of the Redevelopment plan as submitted by the Board of
Commissioners of the Otsego Economic Development Authority, said
plan dated October 15, 1992.
Approved this day of
Otsego Planning Commission.
ATTEST:
EDA6G
1992 by the
REDEVELOPMENT PLAN
FOR
OTSEGO COMMUNITY CENTER PROJECT
October 20, 1992
TABLE OF CONTENTS
INTRODUCTION AND LEGAL BASIS 1
Intent 1
Statement 1
Redevelopment Area Boundaries 2
Statement of Authority 2
Findings and Declaration 2
REDEVELOPMENT PROGRAM 2
Redevelopment Plan Objectives 2
Land Use . . . . . . . . a 3
Redevelopment Activities 3
Financing Plan . . 4
Development Standards 5
Environment Controls 5
Administration of Project 5
Modification of Plan 0 5
I.INTRODUCTION AND LEGAL BASIS
A. Intent
The Economic Development Authority of the City of Otsego
(hereinafter "EDA") proposes to cause to be constructed an
approximately 8600 square foot Community Center (hereinafter
"Center"). The City of Otsego (hereinafter "City") will
lease the Center from the EDA with an option to purchase
pursuant to a lease with option to purchase agreement. A
revenue bond in the principal amount not to exceed $ 540,000
is proposed to be sold by the EDA to finance the
construction of the Center. The revenue bond will be
secured by the payments to be made by the City under the
lease with option to purchase agreement.
B. Statement
The City and EDA have determined that conditions exist
within the Redevelopment Area which have prevented
development and redevelopment of land by private enterprise.
It has been found that the Redevelopment Area is potentially
more useful and valuable for contributing to the public
health, safety and welfare than has been realized under
existing development.
The Redevelopment Area currently consists of unused and
under used land. A functionally obsolete, non-residential
building exists on the property. No residential clearance
activity will be required in the Redevelopment Area.
Beneficial aspects of the natural environment existing in
the City will be enhanced or preserved by maintenance of
open space. This will also enhance the potential for low
and moderate income housing by providing an area where such
housing can be developed while meeting requirements for open
space and park land connected with the development.
The urban environment will be enhanced by completion of the
Redevelopment Project within the Redevelopment Area. The
Center is an essential public facility intended to serve as
a focal point and stimulus for a community identity for the
newly organized City which has no organized downtown area at
this time. The Center is also intended to become a central
location for facilitating housing, economic and other
development and redevelopment in the City. It is hoped that
the Center and the Redevelopment Area will serve as a
nucleus for a future downtown area.
The development of these parcels is not attainable in the
foreseeable future without the intervention of the EDA in
the private development process. The EDA has prepared the
Redevelopment Plan, which provides for the elimination of
1
these conditions, thereby making the land useful and
valuable for contributing to the public health, safety and
welfare.
C. Redevelopment Area Boundaries
The boundaries of the Redevelopment Area are outlined on the
Redevelopment Area Boundary Map, Exhibit A.
All land included in the Project Area is within the legal
boundaries of the City.
D. Statement of Authority
Minnesota Statutes Section 469.001-469.047 (Housing and
Redevelopment Authority Act) grants municipalities the
authority to designate redevelopment areas within the
boundaries of the municipalities. Within these areas, the
municipality may adopt a redevelopment plan and establish a
project consistent with the municipality's public purpose.
The project as contemplated by this plan consists of a
redevelopment project as defined in Section 469.001,
Subdivision 14. The lease with option to purchase agreement
is authorized under Minnesota Statutes, Section 465.71.
E. Findings and Declaration
The City of Otsego and the Economic Development Authority of
the City of Otsego make the following findings.
1. The certain parcels of land in the project area
would not be made available for redevelopment
without some public financial aid.
2. The redevelopment plans for the Redevelopment Area
in Otsego will afford maximum opportunity,
consistent with the needs of the locality as a
whole, for the redevelopment of the area by
private enterprise.
3. The Redevelopment Plan conforms to the general
plan for development of the locality as a whole.
II. REDEVELOPMENT PROGRAM
A. Redevelopment Plan Objectives
The EDA, through implementation of this plan, seeks to
achieve the following objectives:
1. To promote and seek the orderly and harmonious
development of the Redevelopment Area and its
surrounding land.
2. To provide logical and organized land use for the
Redevelopment Area and the land surrounding it
2
consistent with the Comprehensive Land Use Plan
and the Zoning Ordinance of the City.
3. To promote the prompt development of property near
the Redevelopment Area with a minimal adverse
impact on the environment.
4. To provide general design guidance in conjunction
with a suitable development contract in order to
enhance the physical environment of fhe area.
5. To provide adequate utilities, other public
improvements and facilities and essential public
services to enhance the Redevelopment Area and the
City for new and existing development.
6. To assist the financial feasibility of private
projects to the extent necessary and where there
is a corresponding level of public benefit.
7. To enhance the overall economy of the City and
surrounding area by retaining current, and
providing additional, employment opportunities for
the residents of the City and the surrounding
community.
8. To increase the City's tax base.
stimulate development and investment within the
Redevelopment Area by private interests including
development of housing and commercial property.
B. Land Use
The proposed land use for the Redevelopment Area is
commercial office space, other lot intensity commercial
use types and low to moderate income housing. This may
include some retail or service commercial land uses.
Public facilities necessary for the public health,
safety and welfare are allowed uses by conditional use
permit.
C. Redevelopment Activities
1. Acquisition
The City presently owns the property in the
Redevelopment Area on which the Center will be
located. Other than that property, no property is
contemplated to be acquired by the EDA at the
present time.
2. Relocation
It is not expected that any persons will be
displaced as a result of this Redevelopment Plan.
3
3. Rational
The EDA proposes to cause construction of the
Center within the Redevelopment Area. The choice
of site was based on several factors including the
proximity to the current Community Center
structure, limits on expansion of current
structures, central location in the City and
current land uses on the Area.
The City selected the site because the land within
the Redevelopment Area has been unproductive for a
long period and the Area is located near the
current Community Center and City Hall.
Expansion or reconstruction of the current City
facility is impossible due to the Mississippi
River Wild and Scenic River zoning regulations
imposed by the Minnesota Department of Natural
Resources by Rule. These rules and regulations
post date the current structures and effectively
prevent any modification or further construction
in the vicinity of the current structures.
The completed facility will be sold to the City
under a lease with option to purchase agreement.
D. Financing Plan
1. Project Budget
The following budget details estimated development
costs associated with the Center.
Discount
Bond Counsel/Disbursements $ 17,000.00
Miscellaneous Costs of Issuance $ 3/000000
Construction $ 600,000.00
Land Acquisition $ 130,000.00
Less: Est. Cash Contribution
by City $ 210,000.00
Total Project Cost
To Be Bonded $ 540,000.00
The items of cost and the costs thereof shown
above are estimated to be necessary based upon the
qualified appraisers, consultants, legal and cost
information now available. It is anticipated that
the items of cost and the costs thereof show in
each category above may decrease or increase, but
that the total project cost will not exceed the
amount shown above.
2. Source of Funds and Security
0
The City is entering into the lease with option to
purchase agreement with the EDA pursuant to
Minnesota Statutes, Section 465,71, The lease
with option to purchase agreement is payable from
general sources including taxes, and its payment
is not limited to a specific fund or specific
source of revenues.
3. Bond Issue Details
The EDA will issue approximately $ 5�0,000 in
public project revenue bonds. The bonds would
have a maximum 20 year maturity with a five (5)
year call and be retired in the year 2012.
E. Development Standards
The EDA will consider among other things, the following
factors when evaluating development proposals for
projects within the Redevelopment Area seeking public
assistance and support:
1. Degree to which redevelopment objectives are
provided for or enhanced.
2. Consistency with this plan and the Otsego
Comprehensive Plan.
3. Any private developer's ability to perform from a
standpoint of the developer's financial ability to
perform, the developer's experience and expertise
to complete the proposed development and the
City's ability to administer the City ordinances
and regulations concerning such development.
F. Environment Controls
It is presently anticipated that the proposed
development in the Redevelopment Area will not present
major environmental problems. All municipal actions,
public improvements, and private development will be
carried out in a manner that will comply with
applicable environmental standards. The environmental
controls to be applied within the area are contained
within the codes and ordinances of the City of Otsego.
G. Administration of Project
The Otsego City Council has authorized the Economic
Development Authority of the City of Otsego to be
responsible for seeing that the contents of this plan
are promoted, implemented and enforced.
H. Modification of Plan
A Redevelopment Plan may be modified at any time. The
modification must be adopted by the EDA and the City,
5
upon notice and after the public hearing required for
the original adoption of the Redevelopment Plan.
Changes that do not alter or affect the exterior
boundaries and do not substantially alter or affect the
general land use established in the plan, shall not
constitute a modification of the Redevelopment Plan,
or require approval by the City.
0
,I
I � o
I ,
I I
' 1 , 'I • ,
ST. _
TOWNSITE o * I OTSEOO
gyp• ;; 3
I o 961h RE 6 I�
II (NE195(h ST)Lj
0
ME Z
I '
3rd ' 1 E ¢ 941h
a
Z = f I
U
w--------------- z '�
Z I a I
i
Z i l
N.E. 91st ST. r I
ape
Lj
G
Z I V� rJ7I N.E 901h T. ' I
I
I N.E. 89th ST. I
p , 4
I I I 1
j Proposed 0 a
Redevelopment
I I ¢ OTSEGO IL E lat TION i c
Area I Z
N.E. 87th ST. N.E. 88th ST. ; BBIh
,
I I '
I I W 1
z N.E. B7th ST, V5�5lld
�
I I OpUf
I ' 1
----
N.E. 85th ST.
N,E. 83rd EVE UE a
------------= --
w o
w
I
a I w z h pP
¢ CC Q
z �r 2
Z
29' z N.E. Both ST.
I
Z 79Ih ST. ?�
I w
I >
¢
Z
I
¢
a)N.E. 78
' I
REDEVELOPMENT PLAN
FOR
OTSEGO COMMUNITY CENTER PROJECT
EXHIBIT A
REDEVELOPMENT AREA
LEGAL DESCRIPTION ATTACHED
I
q
> i Z
e 8jS10
1 0
` 0 Z
HE
H
C
th STREET
N '
REDEVELOPMENT PLAN FOR THE
OTSEGO COMMUNITY CENTER PROJECT
LEGAL DESCRIPTION FOR EXHIBIT A
The North Half of the Northwest Quarter of Section 20, Township
121, Range 23, Wright County, Minnesota except the south 350.00
feet of the east 696.03 feet of said North Half of the Northwest
Quarter. Containing 73.71 acres and subject to public rights of
way and subject to easements of record.
Subject to the following described proposed easements for
drainage and utility purposes over, under and across.
The north 10.00 feet of the North Half of the Northwest
Quarter of Section 20, Township 121, Range 23, Wright
County, Minnesota lying west of the west right of way
Line of N.E. Nashua Avenue.
The west 10.00 feet of the North Half of the Northwest
Quarter of Section 20, Township 121, Range 23, Wright
County, Minnesota.
The south 10.00 feet of the North Half of the Northwest
Quarter of Section 20, Township 121, Range 23, Wright
County, Minnesota lying west of the east 696.03 feet of
said North Half of the Northwest Quarter.
The west 5.00 feet of the east 701.03 feet of the south
355.00 feet of the North Half of the Northwest Quarter
of Section 20, Township 121, Range 23, Wright County,
Minnesota.
The north 5.00 feet of the south 355.00 feet of the
North Half of the Northwest Quarter of Section 20,
Township 121, Range 23, Wright County, Minnesota lying
west of the west right of way line of N.E. Nashua
Avenue.
That part of the North Half of the Northwest Quarter of
Section 20, Township 121, Range 23, Wright County,
Minnesota being 10.00 feet in width as measured at
right angles to and lying west of the west right of way
line of N.E. Nashua Avenue and lying north of the south
350.00 feet of said North Half of the Northwest
Quarter.
7
CITY COUNCIL RESOLUTION
At a meeting of the City Council of the City of Otsego,
Minnesota, which meeting was duly called and held on the day
of 1992, at o'clock _.m., the following
Councilmembers were present:
The following Councilmembers were absent:
The following Resolution was offered by Councilmember
who duly moved for its adoption:
WHEREAS, the Economic Development Authority of the City of
Otsego ( the "Authority"), pursuant to a Resolution dated
1992 approved the Redevelopment Plan for
Project dated , 1992 proposed
by the Economic Development Authority of the City of Otsego (the
"Plan"); and
WHEREAS, the Authority has transmitted the Plan and, by
resolution, has applied to the City Council of the City of Otsego,
Minnesota (the"City"), for approval of the Plan, and
WHEREAS,, it is desirable and in the public interest that the
Authority undertake and carry out the Plan pursuant to Minnesota
Statutes, Section 469.001 to 469.047, and is indicated on Exhibit
A attached hereto and made a part thereof, (which area is herein
called the "Redevelopment Area" or the "Project"); and
WHEREAS, the City on the date hereof, after having published
a notice of public hearing in the official newspaper of the City,
conducted a public hearing on the Plan and received public comments
on the same.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the
City of Otsego, Minnesota, as follows:
Section 1. That the area described as the Redevelopment Area
in said Plan is a Redevelopment Project within the meaning of
Minnesota Statutes, Section 469,002, Subd. 14.
Section 2. That said Plan and. Project will carry out the
purpose and policy of Minnesota Statutes, Chapter 469.
Section 3. That the land in the Project area would not be made
available for redevelopment without the financial aid to be sought.
Section 4. That the Redevelopment Plan for the Project area
will afford maximum opportunity, consistent with sound needs of the
city as a whole, for the redevelopment of the such area by private
enterprise.
Section 5. That it
Redevelopment Plan for
booklet conforms to the
City as a whole.
is hereby found and determined that the
the Project area set forth in the Plan
general plan for the development of the
Section 6. That the City
Minnesota does hereby approve the
entitled "Redevelopment Plan for
dated , 1992.
ounc
Cil of the City
Plan as presented in
Said Resolution was duly seconded by
and put to vote.
thereof were Councilmembers
voting against said Resolution.
Approved this
Mayor
ATTEST:
City Clerk
EDA6C
of Otsego,
the booklet
Project",
Councilmember
Voting in favor
1992.
EXTRACT OF MINUTES OF A MEETING OF THE
CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA
HELD: December 14, 1992
Pursuant to due call and notice thereof,
The following members were present:
and the following were absent:
a
Member introduced the following
resolution and moved its adoption:
RESOLUTION AUTHORIZING
THE EXECUTION AND DELIVERY OF A
LEASE WITH OPTION
TO PURCHASE AGREEMENT
The motion for the adoption of the foregoing
was duly seconded by member and upon
taken thereon the following voted in favor thereof:
and the following voted against the same:
resolution
vote being
whereupon said resolution was declared duly passed and adopted.
230437
RESOLUTION AUTHORIZING
THE EXECUTION AND DELIVERY OF A
LEASE WITH OPTION
TO PURCHASE AGREEMENT
BE IT RESOLVED by the Council of the City of Otsego,
Minnesota (the "City"), as follows.
1. Authority. The City is authorized pursuant to
Minnesota Statutes, Section 465.71, to enter into a Lease With
Option to Purchase Agreement with the Economic Development
Authority of the City of Otsego, Minnesota (the "Authority"), a
public body corporate and politic and a political subdivision
duly organized and existing under the laws of the State of
Minnesota, to finance the costs of acquisition and construction
of a community center and related facilities in the City (the
"Project").
2. Authorization of Bond• Documents Presented. The
Authority proposes to issue a $450,000 Public Project Revenue
Bond, Series 1992 (City of Otsego Lease With Option to Purchase
Project) (the "Bond") payable from rental payments to be made
under the Lease. Forms of the following documents relating to
the Bond and the Project have been submitted to the City Council
and are now on file in the office of the Clerk:
230437
(a) a Lease With Option to Purchase Agreement
dated as of December 1, 1992 (the "Lease"), between the
Authority and the City which, among other things,
provides for the construction and installation of the
Project and pursuant to which the City is required to
pay rental payments sufficient to pay the principal and
interest on the Bond when due, and
(b) a Revenue Bond Resolution adopted by the
Authority on December 14, 1992 (the "Resolution"),
setting forth the form and details of the Bond and
their issuance, and pledging the rental payments
derived from the Lease to the payment of the Bond.
2
3. Approval and Execution of Lease With Option to
Purchase Agreement. The Mayor and the Clerk are hereby
authorized and directed to execute, and deliver the Lease in
substantially the form on file with the Clerk. All of the
provisions of the Lease when executed and delivered as authorized
herein shall be deemed to be a part of this resolution as fully
and to the same extent as if incorporated herein and shall be in
full force and effect from the date of execution and delivery
thereof.
4. Approval of Revenue Bond Resolution. The City
hereby approves the form of the Resolution and the terms of the
Bond described therein.
5. Authorized to Execute. The Mayor and Clerk are
hereby designated and authorized to act on behalf of the City to
execute the Lease or other documents relating thereto.
6. Furnishing of Certificates and Proceedings. The
Mayor and Clerk and other officers of the City are authorized and
directed to prepare and furnish to the Purchaser and Bond
Counsel, certified copies of all proceedings and records of the
City relating to the Bond, and such other affidavits and
certificates as may be required to show the facts relating to the
legality of the Bond as such facts appear from the books and
records in the officers' custody and control or as otherwise
known to them, and all such certified copies, certificates and
affidavits, including any heretofore furnished, shall constitute
representations of the City as to the truth of all statements
contained therein.
7. Modifications to Documents. The approval hereby
given to the various documents referred to above includes
approval of such additional details therein as may be necessary
and appropriate and such modifications thereof, deletions
therefrom and additions thereto as may be necessary and appro-
priate and approved by the City Attorney and the City officials
authorized herein to execute said documents. Said City officials
are hereby authorized to approve said changes on behalf of the
City. The execution of any instrument by the appropriate officer
or officers of the City herein authorized shall be conclusive
evidence of the approval of such documents in accordance with the
230437
K
terms hereof. In the absence of the Mayor or Clerk, any of the
documents authorized by this resolution to be executed may be
executed by the Acting Mayor or the Acting Clerk respectively.
Passed: December 14, 1992.
Attest:
Clerk
230437
Mayor
STATE OF MINNESOTA )
COUNTY OF WRIGHT ) SS
CITY OF OTSEGO )
I, the undersigned, being the duly qualified and acting
Clerk %a I of Byron, Minnesota, hereby certify that I have
carefully compared and attached the foregoing extract of minutes
of a meeting of the City Council of said City held December 14,
1992, with the original thereof on file and of record in my
office and the same is a full, true and complete transcript
therefrom insofar as the same relates to the execution of a Lease
With Option to Purchase Agreement.
WITNESS my hand and the seal of said City this 14th day of
December, 1992.
( SEAL)
230437
Clerk
5
RESOLUTION NO.
REVENUE BOND RESOLUTION
$450,000
PUBLIC PROJECT REVENUE
BOND, SERIES 1992
(CITY OF OTSEGO, LEASE PURCHASE PROJECT)
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO
ADOPTED: December 14, 1992
230433
m
LEASE WITH OPTION TO PURCHASE AGREEMENT
BETWEEN
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO
as Lessor
and
CITY OF OTSEGO
as Lessee
Dated as of the 1st day of December, 1992
Drafted By; Briggs and Morgan
2200 First National Bank Building
Saint Paul, MN 55101
23tu�
TABLE OF CONTENTS
ARTICLE I - DEFINITIONS AND EXHIBITS 2
Section 1.1. Definitions 2
Section 1.2. Exhibits 6
ARTICLE II - REPRESENTATIONS, COVENANTS AND WARRANTIES . . . 8
Section 2.1. Representations, Covenants and Warranties
ofLessee . . . . . . . . . . - . . . . . 8
Section 2.2. Tax -Exempt Status of the Bond; Rebate 9
Section 2.3. Representations, Covenants and Warranties
ofLessor . . . . . . . . . . . . . . 9
ARTICLE III - CONSTRUCTION AND LEASE OF PROJECT 11
Section 3.1. Cost of Project; Financing 11
Section 3.2. Construction of Project; Payment of Cost 11
Section 3.3. Lease and Sublease 12
Section 3.4. Possession and Enjoyment 12
Section 3.5. Lessor Access to Project 12
ARTICLE IV - TERM OF LEASE 13
Section 4.1. Lease Term 13
Section 4.2. Termination by Lessee 13
Section 4.3. Intent to Continue Lease Term;
Appropriations and Property Taxes 13
Section 4.4. Effect of Termination 13
Section 4.5. Nonsubstitution . . . 14
Section 4.6. Terminationoof Lease Term 14
ARTICLE V - RENTAL PAYMENTS 15
Section 5.1. Rental Payments . . . . . . . . . . . . . 15
Section 5.2. Interest Component . . . . . . . . . . . 15
Section 5.3. Rental Payments to be Unconditional 15
Section 5.4. Current Expense . . . . . . . . 16
ARTICLE VI - INSURANCE AND INDEMNIFICATION 17
Section 6.1. Liability Insurance 17
Section 6.2. Property Insurance 17
Section 6.3. Worker's Compensation Insurance 17
Section 6.4. Requirements For All Insurance 17
Section 6.5. Indemnification; Hazardous Substance 18
Section 6.6. Damage to or Destruction of Project 19
ARTICLE VII - OTHER OBLIGATIONS OF LESSEE 21
Section_ 7.1. Use; Permits 21
Section 7.2. Maintenance of Project by Lessee 21
Section 7.3. Taxes, Other Governmental Charges and
Utility Charges 21
Section 7.4. Advances 0 # 22
2304�
ARTICLE VIII - TITLE . . . . . . . . . . . . . . . . . . 23
Section 8.1. Title 0 . . . . . . . . . . 0 . . . . 23
Section 8.2. Security Interest . . . . . . . . . . . . 23
Section 8.3. Liens . . . . . . . . . . . . . . . 23
Section 8.4. Installation of Lessee's Equipment . . . . 24
Section 8.5. Modification of Project 0 24
Section 8.6. Easements and Utility Access. 0 25
Section 8.7. Release of Unimproved Land. 0 26
Section 8.8. Covenant For the Benefit of the
Bondholder. 0 27
ARTICLE IX - PROJECT WARRANTIES . . . . . . 0 28
Section 9.1. Selection of Project . . . . . . 0 0 28
Section 9.2. Construction and Maintenance of Project 28
Section 9.3. Contractors' Warranties 28
Section 9.4. Disclaimer of Warranties 28
ARTICLE X - PREPAYMENT 29
Section 10.1. When Available . . . . . . . . . . . 29
Section 10.2. Exercise of Purchase Option 29
Section 10.3. Release of Lessor's Interest 29
Section 10.4. Partial Prepayment . . . . 29
Section 10.5. Exercise of Partial Prepayment 29
Section 10.6. Credit for Partial Prepayment 30
ARTICLE XI - ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING 31
Section 11.1. Assignment by Lessor 31
Section 11.2. Assignment and Subleasing by Lessee 31
Section 11.3. Restriction on Mortgage or Sale of
Project by Lessee 31
ARTICLE XII - EVENTS OF DEFAULT AND REMEDIES 32
Section 12.1. Events of Default Defined 32
Section 12.2. Remedies on Default 0 33
Section 12.3. Return of Project a 34
Section 12.4. No Remedy Exclusive . . 35
Section 12.5. Agreement to Pay Attorneys' Fees and
Expenses 0 35
Section 12.6. Late Charge 0 35
ARTICLE XIII - ADMINISTRATIVE PROVISIONS 36
Section 13.1. Notices 36
Section 13.2. Financial Information 36
Section 13.3. Binding Effect 36
Section 13.4. Severability 36
Section 13.5. Amendments, Changes and Modifications 36
Section_13.6. Captions . . . . . . . . . . . . . 36
2304�
Section 13.7. Further Assurances and Corrective
Instruments. . . . . . . . . . . . . . 36
Section 13.8. Execution In Counterparts . . . 36
Section 13.9. Applicable Law 37
SIGNATURES 37,38
ACKNOWLEDGEMENTS 39
xf
THIS LEASE WITH OPTION TO PURCHASE AGREEMENT dated as of
December 1, 1992 (the "Lease"), by and between the Economic
Development Authority of the City of Otsego,. a public body
corporate and politic and a political subdivision duly organized
and existing under the laws of the state of Minnesota as Lessor
("Lessor") whose address is Otsego City Hall, 13474 95th Street
Northeast, Otsego, Minnesota 55330, and the City of Otsego, a
municipal corporation and political subdivision duly organized
and existing under the laws of the state of Minnesota as Lessee
("Lessee"), whose address is City Hall, 13474 95th Street
Northeast, Otsego, Minnesota 55330,
WITNESSETH:
WHEREAS, Lessee is authorized by law to acquire such items
of real and personal property as are needed to carry out its
governmental functions, and to acquire such real and personal
property by entering into lease with option to purchase
agreements; and
WHEREAS, Lessee has determined that it is necessary for it
to acquire under this Lease certain real and personal property
described herein as the Project; and
WHEREAS, Lessor is willing to finance the acquisition and
construction of the Project Improvements and to lease the Project
to Lessee pursuant to this Lease and the Lessee is willing to
rent the Project from Lessor, pursuant to this Lease;
NOW, THEREFORE, in the joint and mutual exercise of their
powers, and in consideration %J the mutual covenants herein
contained, the parties hereto recite and agree as follows:
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1. Definitions. Unless the context otherwise
requires, the terms defined in this Section or in the Bond
Resolution shall, for all purposes of this Lease, have the
meanings herein specified.
Act: Collectively, the Lessor Powers Act and the Lessee
Powers Act.
Board of Commissioners: The board of commissioners of the
Issuer, or its successor as governing body of the Issuer.
Bond Counsel: The firm of Briggs and Morgan Professional
Association, in St. Paul, Minnesota, or any other law firm
nationally recognized as bond counsel in the municipal bond
industry.
Bond Fund: The Bond Fund created pursuant to Section 5-6 of
the Bgnd Resolution.
Bond Resolution: The resolution of the Lessor adopted by
its Board of Commissioners on December 14, 1992, authorizing
issuance and sale of the Series 1992 Bond, as the same may be
amended, modified or supplemented by any amendments or
modifications thereof.
Bond: The Series 1992 Bond.
Business Day: Any day. other than a Saturday, Sunday, legal
holidaI or a day on which banking institutions in the City of St.
Paul, Minnesota, are authorized by law or executive order to be
closed.
Casualty Value of the Project: As of the date of payment,
the principal amount of the Outstanding Bond plus unpaid interest
thereon until the earliest date on which they may be called for
extraordinary redemption under Section 3-1(2) of the Bond
Resolution, less all sums held in the Bond Fund.
City: The City of Otsego, Minnesota.
Code: Internal Revenue Code of 1986, as amended.
Condemnation: The meaning given that term in Section 1-1 of
the Bond Resolution.
Contractor: Each of the contractors from whom Lessee has
ordered or will order or with whom Lessee has contracted or will
rF
2
contract for the acquisition., construction and installation of
any portion of the Project.
Environmental Law: The Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. §9601 et
seq., the Resource Conservation and Recovery Act, 42 U.S.C. §6901
et sect., the Hazardous Materials Transportation Act, §1802 et
seq., the Federal Water Pollution Control Act, 33 U.S.C. §1251 et
seg., the Clean Water Act, 33 U.S.C. §1321 et sea. the Clean Air
Act, 42 U.S.C. §7401 et sea., the Minnesota Environmental
Response and Liability Act, Minn. Stat. ch. 115B, the Minnesota
Petroleum Tank Release Cleanup Act, Minn. Stat. ch. 115C, and any
other federal, state, county, municipal, local or other statute,
law, ordinance or regulation which may relate to or deal with
human health or the environment, all as may be from time to time
amended.
Fiscal Year: The fiscal year January 1 to December 31 of
the Lessee.
Governmental Unit:- A "governmental unit" within the meaning
of Section 141 of the Code.
Hazardous Substances: Asbestos, unreaformaldehyde,
polychlorinated biphenyls ("PCBs".), nuclear fuel or material,
chemical waste, radioactive material, explosives, known
carcinogens, petroleum products and by-products and other
dangerous, toxic or hazardous pollutants, contaminants,
chemicals, materials or substances listed or identified in, or
regulated by, any Environmental Law.
Independent Counsel: An attorney duly admitted to the
practice of law before the highest court of the State who is not
a full-time employee of Lessor or Lessee.
Independent Engineer: An Independent engineer or
engineering firm or an Independent architect or architectural
firm qualified to practice the profession of engineering or
architecture under the laws of Minnesota and who is not an
officer of Lessee or Lessor.
Interest: The portion of any Rental Payment designated as
and comprising interest as shown in the attached Exhibit B.
Land: The real property described in Exhibit A hereto.
Lessee Powers Act: Minnesota Statutes, Sections 465.71 and
469.041, as from time to time amended.
Lessor Powers Act: Minnesota
through 468.047 and 469.090 through
z3o4�
3
Statutes, Sections 469.001
469.108.
Net Proceeds: Any property insurance proceeds or
Condemnation award, paid with respect to the Project, remaining
after payment therefrom of all expenses incurred in the
collection thereof.
Non -appropriation: The failure of the governing body of
Lessee to appropriate money for any Fiscal Year of Lessee
sufficient for the continued performance of this Lease by Lessee,
as evidenced by the passage of an ordinance or resolution
specifically prohibiting Lessee from using any moneys to pay the
Rental Payments due under this Lease for a designated Fiscal Year
and all subsequent Fiscal Years.
Payment Date: The date as provided in Exhibit B attached
hereto, prior to which date a Rental Payment is required to be
paid as provided in Section 5.1 hereof.
Permitted Encumbrances: As of any particular time: (i)
liens for taxes and assessments not then delinquent, or which
Lessee may, pursuant to provisions of Section 7.3 hereof, permit
to remain unpaid, (ii) this Lease and amendments hereto, (ill)
Lessor's interest in the Project, (iv) any mechanic's, laborer's,
materialmen's, supplier's.or vendor's lien or right not filed or
perfected in the manner prescribed by law, and any such lien
which Lessee may, pursuant to Article VIII hereof, permit to
remain unpaid.
Principal: The portion of any Rental Payment designated as
principal in the attached Exhibit B.
Project: The Project Improvements, the. Project Equipment
and the Land which are being. leased to the City pursuant to this
Lease and which are more fully described in the attached
Exhibit A.
Project Acquisition Fund: The account by that name
established by Lessee under Section 5-1 of the Bond Resolution
for the purpose of accounting for proceeds of the Bonds used to
pay Project Costs.
Project Costs or Cost of the Project or Cost: All costs of
purchase, construction and installation of the Project including
the following.
(a) all costs and expenses necessary or incident
to the acquisition of the Project Improvements and Project
Equipment;
(b) fees and expenses of surveyors and engineers
for estimates, surveys, soil borings and soil tests and
other preliminary investigations and items necessary for the
commencement of construction, preparation of plans, drawings
zso4�
4
and specifications and supervision of construction, as well
as for the performance of all other duties of surveyors and
engineers in relation to either the construction, furnishing
and equipping of the Project or the making of the Lease,
(c) all costs and expenses of every nature
incurred in purchasing and constructing the Project
Improvements and purchasing and installing the Project
Equipment including the actual cost of labor, materials,
machinery, furnishings and equipment as payable to
contractors, builders and materialmen in connection with the
construction, furnishing -and equipping the Project;
(d) the cost of any insurance and performance and
payment bonds maintained during the construction period in
accordance therewith;
(e) expenses of administration, supervision and
inspection properly chargeable to the Project, underwriting
expenses, legal fees and expenses, fees and expenses of
accountants and other consultants, publication and printing
expenses and other fees and expenses which are necessary or
incidental and to the making of the Lease and the issuance
of the Bonds or to the acquisition, purchase, construction,
installation, furnishing and equipping of the Project;
(f) all other items of expenses not elsewhere
specified in this definition as may be necessary or incident
to: (1) the making of the Lease, (ii) the acquisition,
purchase, construction, installation, equipping and
furnishing of the Project; and (iii) the financing thereof;
and
(g) reimbursement to Lessee or Lessor or those
acting for it for any of the above -enumerated costs and
expenses incurred and paid by them before or after the
execution of the Lease.
Protect Equipment: All items of machinery, equipment or
other personal property installed or acquired or to be acquired
for installation in the Project Improvements or elsewhere on the
Land and paid for in whole or in part from the proceeds of the
Bonds and all replacements thereof and substitutions therefor
made pursuant to the Lease.
Project Improvements: All buildings, structures,
improvements and fixtures located on or to be purchased,
constructed and otherwise improved on the Land and all additions,
alterations, modifications and improvements thereof made pursuant
to the Lease.
23a4�
5
Purchase Option Price: The amount payable, at the option of
the Lessee, on any applicable Payment Date set forth on the
attached Exhibit C, for the purpose of terminating the Lease and
purchasing the Project, which amount shall be equal to the amount
provided in the attached Exhibit C.
Registered Holder: The person or persons in whose name any
Outstanding Bond is registered.as provided in the Bond
Resolution.
Rental Payment: The payment due from Lessee to Lessor prior
to each Payment Date during the Term of this Lease, as provided
in Section 5.1 hereof and shown on the attached Exhibit B.
Series 1992 Bond: The Public Project Revenue Bond, Series
1992 (City of Otsego Lease With Option to Purchase Project)
issued by the Authority.
Specifications: The bid specifications and/or similar
document pursuant to which Lessee has contracted for.any portion
of the Project from a Contractor.
State: The State of Minnesota.
State and Federal Law or Laws: The Constitution and any law
of the State and any rule or regulation of any agency or
political subdivision of the State, and any law of the United
States, and any rule or regulation of any federal agency.
Term of this Lease or Lease Term: The period commencing as
of December _, 1992 and ending on subject to
earlier termination in accordance with the provisions of the
Lease.
Section 1.2. Exhibits.
The following Exhibits are attached to and by reference made
a part of this Lease:
Exhibit A: A description
Lessee pursuant to this Lease.
of the Project being leased by
Exhibit B.A schedule indicating the date and amount of
each Rental Payment coming due during the Lease Term and the
amount of each Rental Payment comprising Principal and Interest.
Exhibit C: A schedule showing as of each applicable Payment
Date the price at which Lessee may exercise its option to
purchase Lessor's interest in the Project in accordance with
Article X.
2304�
6
Exhibit D: A form of Certificate of Incumbency
relating to the offices or positions, signatures and
qualifications of the persons executing on behalf of
Lease and other documents relating thereto.
2304�
7
L of essee
Lessee this
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties
of Lessee. Lessee represents, covenants and warrants as follows.
z3o4�
(a) Lessee is a municipal corporation and
political subdivision of the State, duly organized and
existing under the Constitution and laws of the State.
(b) The Project constitutes an authorized project
under the Act.
(c) Lessee is authorized under the Constitution
and laws of the State to enter into this Lease and the
transactions contemplated hereby, and to perform all of its
obligations hereunder.
(d) The officers of Lessee executing this Lease
have been duly authorized to execute and deliver this Lease
under the terms and provisions of a resolution of Lessee's
governing body, or by other appropriate official action.
(e) In authorizing and executing this Lease,
Lessee has complied with all public bidding and other State
and Federal Laws applicable to this Lease and the
acquisition of the Project by Lessee.
(f) Lessee will not pledge, mortgage or assign
this Lease, or its duties and obligations hereunder to any
other person, firm or corporation except as provided under
the terms of this Lease.
(g) The Project will be used during the Term of
this Lease only to carry out the governmental purposes of
Lessee.
(h) During the Term of this Lease, Lessee will
not take any action which will cause the interest on the
Bonds to become subject to Federal income taxation,
including, but not limited to, permitting any person who is
not a governmental unit to use, directly or indirectly, any
portion of the Project in a trade or business so as to
impair the tax exempt status of the Bonds, all within the
meaning of Section 141 of the Code or causing the Bonds to
be "arbitrage bonds" within Section 148 of the Code.
(i) Upon the execution of this Lease, Lessee will
provide to Lessor a Certificate of Incumbency in the form
attached hereto as Exhibit D.
E�
(j) The Project will comply with all applicable
land use, environmental control, building and zoning
- ordinances and regulations, if any.
(k) Lessee will cause the Project to be
constructed in accordance with the Specifications on or
before ,
(1) Neither the execution and delivery hereof,
nor the fulfillment of or compliance with the terms and
conditions hereof, nor the consummation of the transactions
contemplated hereby, conflicts with or results in a breach
of the terms, conditions, and provisions of any restriction
or any agreement or instrument to which the Lessee is now a
party or by which the Lessee is bound, or constitutes a
default under any of the foregoing.
Section 2.2. Tax -Exempt Status of the Bond; Rebate.
Lessee shall 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 Bond, including
without limitation (1) requirements relating to temporary periods
for investments, (2) limitations on amounts invested at a yield
greater than the yield on the Bond, and (3) the rebate of excess
investment earnings to the United States. This covenant shall
survive termination of this Lease.
Section 2.3. Representations, Covenants and Warranties
of Lessor. Lessor represents, covenants and warrants as follows:
(a) Lessor is a public body corporate and politic
and a political subdivision duly organized and existing
under the laws of the state of Minnesota.
(b) The Project constitutes an authorized project
under the Act.
(c) The governing body of Lessor has made all
necessary investigation and has. determined that the Project
will promote the public interest and welfare of the State of
Minnesota and the City and the people thereof through the
provision of public facilities required for the purpose of
providing various services to the City residents and
promoting economic development within the City.
(d) The acquisition and construction of the
Project, the issuance and sale of the Series 1992 Bond, the
execution and delivery of this Lease and the performance of
all covenants and agreements of the Lessor contained in this
Lease and of all other acts and things required under the
Constitution and laws of the State of Minnesota to make this
Lease valid and binding obligations of Lessor in accordance
z3o4�
9
with their terms, are authorized and have been duly
authorized by the Bond Resolution.
(e) Lessor has not made, done, executed or
suffered and warrants that it will not make, do, execute or
suffer any act or thing whereby its Lessor's interest in the
Project shall or may be -impaired or charged or encumbered,
except as provided in the Bond Resolution.
(f) To finance the cost of the Project, Lessor
proposes to issue the Series 1992 Bond as provided in the
Act and Bond Resolution in the aggregate principal amount of
$450.0000
(g) There is no litigation pending or, to the
best of its knowledge threatened, against Lessor relating to
the acquisition, installation, construction or financing of
the Project or to the Bond or to this Lease or questioning
the organization, powers or authority of Lessor.
(h) Neither the execution and delivery of this_
Lease, nor the fulfillment of or compliance with the terms
and conditions thereof, nor the consummation of the
transactions contemplated thereby, conflicts with or results
in a breach of the terms, conditions or provisions of any
restriction or any agreement or instrument to which Lessor
is now a party or by which Lessor is bound, constitutes a
default under any of the foregoing, or results in the
creation or imposition of any lien, charge or encumbrance
whatsoever upon any of the property or assets of Lessor, or
upon the Project except Permitted Encumbrances.
z3a4�
10
ARTICLE III
CONSTRUCTION AND LEASE OF PROJECT
Section 3.1. Cost of Project; Financing. Lessee has
entered or will enter into one or more contracts for the Project
with Contractors providing for the construction and installation
of the Project. Any property to be acquired from the proceeds of
the Bond shall be deemed acquired on behalf of, but without
liability to, the Lessor. Lessor and Lessee agree that, in order
to ensure Lessee that moneys sufficient to pay the Project Costs
will be available for this purpose when required, upon the
execution of this Lease, Lessor shall deposit with the Lessee in
a Project Acquisition Fund the proceeds derived from the sale of
the Bond except for sums deposited in the Bond Fund as provided
in the Bond Resolution. Such moneys shall be deposited in a
separate fund of the Lessee to be designated the Project
Acquisition Fund and shall be used exclusively to pay Project
Costs; provided that upon completion of the Project and payment
of the Cost thereof, any excess monies in the Project Acquisition
Fund may be applied towards the payment or prepayment of Rental
Payments.
Section 3.2. Construction of Project; Payment of Cost.
Lessee shall contract for the construction of the Project in
accordance with State law. If the proceeds derived from the sale
of the Bond and -deposited in the Project Acquisition Fund shall
be insufficient to pay fully all Project Costs and to complete
fully the Project free of liens, the Lessee shall pay the full
amount of any such deficiency by making payments therefor
directly to the contractor and to the suppliers of materials and,
services as the same shall become due, and the Lessee shall save
the Lessor whole and harmless from any obligation to pay such
deficiency, provided that the Lessee's obligation to pay any such
deficiency shall be limited to its current budgeted
appropriations for the Project, and the Lessee shall have no
obligation to appropriate additional funds therefor.
Notwithstanding the foregoing, the Lessee shall authorize no
change in Specifications which would reduce the fair market value
of the Project unless the Costs of the Project are reduced by at
least as great amount and the Lessee shall not authorize any
change in the Specifications which would increase the cost of the
Project unless Lessee provides additional funds to pay the
increased cost of the Project. If as a result of the change of
Specifications, a change in the description of any Project
Equipment set forth in Exhibit A must also be made, Lessor and
Lessee shall at Lessee's expense, amend this Lease to reflect
that change, and each party shall, at the request of the other
party but solely at Lessee's expense execute such other
documents, such as a UCC termination statement or a supplemental
financing statement, as the party reasonably determined is
necessary or desirable to properly identify Project Equipment.
11
For purposes of executing any such amendment or document, Lessor
may require and in good faith conclusively rely upon a written
statement of Lessee that such amendment or document complies with
the provisions of this Section 3.2. The Lessee shall exercise
due care in the construction, use, operation and maintenance of
the Project, and shall not install, use, operate or maintain the
Project improperly, carelessly, in violation of any state and
federal Law or for a purpose or in a manner contrary to that
contemplated by the Lease. The Lessee shall obtain all permits
and licenses necessary for the construction, operation,
possession and use of the Project. The Lessee shall comply with
all State and federal laws applicable to the construction, use,
possession and operation of the Project, and if compliance with
any such state and federal law requires changes or additions to
be made to the Project, such changes or additions shall be made
by Lessee at its expense.
Section 3.3. Lease and Sublease. Lessor hereby leases
or, as to the Land, subleases the Project to Lessee, and Lessee
hereby leases or, as to the Land, subleases the Project from
Lessor, upon the terms and conditions set forth in this Lease.
Section 3.4. Possession and Enjoyment. Lessor hereby
covenants to provide Lessee during the Term of this Lease with
the quiet use and enjoyment of the Project, and Lessee shall
during the Term of this Lease peaceably and quietly have and hold
and enjoy the Project without suit, trouble or hindrance from
Lessor, except as expressly set forth in this.Lease. Lessor
will, at the request of Lessee and at Lessee's cost, join in any
legal action in which Lessee asserts its right to such possession
and enjoyment to the extent Lessor lawfully may do so.
Section 3.5. Lessor Access to Project. Lessee agrees
that Lessor shall have the right at all reasonable times upon
reasonable notice to examine and inspect the Project. Lessee
further agrees that Lessor shall have such rights of access to
the Project as may be reasonably necessary to cause the proper
maintenance of any portion of the Project in the event of failure
by Lessee to perform its obligations hereunder.
230434
12
ARTICLE IV
TERM OF LEASE
Section 4.1. Lease Term. This Lease shall be in
effect for a Lease Term commencing upon its date of execution and
ending on the date the last Rental Payment is due and payable as
shown in Exhibit B unless terminated by Lessee at the end of any
Fiscal Year of Lessee occurring prior thereto in accordance with
Section 4.2, or unless terminated as provided in Section 4.6.
Section 4.2. Termination by Lessee. In the sole event
of Non -appropriation, Lessee shall have the right to terminate
this Lease, in whole but not in part, at the end of any Fiscal
Year of Lessee, in the manner and subject to the terms specified
in this Section and Sections 4.4 and 4.5. Lessee may effect such
termination by giving Lessor a written notice of termination and
by paying to lessor any Rental Payments and any other amount due
pursuant to Section 4.4 which.are due and have not been paid and
any other amount due pursuant to Section 4.4 at or before the end
of its then current Fiscal Year. Lessee shall give notice of
termination not less than sixty (60) days prior to the end of
such Fiscal Year, and shall notify Lessor of any anticipated
termination. In the event of termination of this Lease as
provided in this Section, Lessee shall convey to Lessor and
release its interest in the -Project in accordance with Section
12.3 immediately after termination of this Lease.
Section 4.3. Intent to Continue Lease Term;
Appropriations and Property Taxes. _Lessee presently intends to
continue this Lease for its entire Term and to pay all Rental
Payments specified in Exhibit B. Lessee's Clerk will include in
his or her annual budget request an appropriation.of an amount
sufficient to meet Lessee's.obligations under this Lease.
Subject to the provisions in Section 4.2 and subject to
applicable law, Lessee shall levy ad valorem property taxes on
all taxable property within the jurisdiction of the Lessee if and
to the extent such taxes are necessary to pay when due all Rental
Payments.
Section 4.4. Effect of Termination. Upon termination
of this Lease as provided in Section 4.2, Lessee shall not be
responsible for the payment of any additional Rental Payments
coming due with respect to succeeding Fiscal Years. However, in
consideration of use of the Project by Lessee through the end of
the Fiscal Year then in effect, Lessee shall pay to Lessor on the
Last day of1such Fiscal Year such pro rata portion of the next
succeeding Rental Payment as it relates to the period of time
from the date of the last Rental Payment paid by Lessee (as shown
on Exhibit B) to the end of such Fiscal Year. If Lessee does not
deliver possession of the Project to Lessor in accordance with
Section 12.3 and convey to Lessor or release its interest in the
13.
Project immediately after the termination of this Lease, the
termination shall nevertheless be effective, but Lessee shall be
responsible for the payment of damages in an amount equal to the
amount of the Rental Payments coming due under Exhibit B which
are attributable to the number of days after termination of the
Lease during which Lessee fails to take such actions and for any
other loss suffered by Lessor as a result of Lessee's failure to
take such actions as required.
Section 4.5. Nonsubstitution. If this Lease is
terminated by Lessee in accordance with Section 4.2, Lessee
agrees, to the extent permitted by law, not to purchase, lease or
rent property to perform the same functions as, or functions
taking the place of, those performed by the Project for a period
of ninety days, provided, however, that these restrictions shall
not be applicable in the event the Project shall be sold by
Lessor and the amount received from such sale, less all costs of
such sale, is sufficient to pay the then applicable Purchase
Option Price as set forth in Exhibit C. or to the extent that the
application of these restrictions would affect the validity of
this Lease.
Section 4.6. Termination of Lease Term. The Term of
this Lease will terminate upon the occurrence of the first of the
following events:
230434
(a) the termination thereof by Lessee in
accordance with Section 4.2;
(b) the exercise by Lessee of its option to
purchase or otherwise acquire Lessor's interest in the
Project pursuant to Article X.
(c) a default by Lessee and Lessor's election to
terminate this Lease pursuant to Article XIII or
(d) the payment by Lessee of all Rental Payments
shown on Exhibit B hereto and the expiration of the Lease
Term as stated in Section 4.1.
14
ARTICLE V
RENTAL PAYMENTS
Section 5.1. Rental Payments. Subject to the
prepayment options set forth in Article X hereof, Lessee shall
pay Rental Payments with respect to the moneys provided by Lessor
under Section 3.1 hereof, on the Business Day immediately
preceding each Payment Date and in the amount specified in the
attached Exhibit B as of that Payment Date. Such Rental Payments
comprise Principal and Interest as shown in Exhibit B. All
Rental Payments shall be paid directly to the Lessor for deposit
in the Bond Fund, and Lessee shall not be responsible for the use
or application of such Rental Payments. Lessor represents and
covenants that the Rental Payments shall be applied exclusively
towards the payment of principal of and interest on the Bond.
Nothing herein shall affect Lessor's rights under this Lease in
the event of default in the timely payment of any Rental Payment
by Lessee. Any money, other than Rental Payments, deposited in
the Bond Fund under the provisions of this Lease shall be
credited against the last installments of Rental Payments due
under this Lease but only if this Lease has not been terminated
under Section 4.6(a) or (c) hereof.
Section 5.2. Interest Component. A portion of each
Rental Payment is paid as and represents the payment of Interest.
Exhibit B sets forth the Interest component of each Rental
Payment.
` Section 5.3. Rental Payments to be Unconditional.
Except as provided in Section 4.2, the obligation of Lessee to
make Rental Payments required hereunder, and to perform and
observe all other covenants and agreements of Lessee contained
herein, shall be absolute and unconditional in all events and the
obligation to make such Rental Payments shall remain notwith-
standing any dispute between Lessee and Lessor or any other
person unless the Lessor shall violate the Lessee's right to
quite enjoyment of the Project to such a degree that Lessee no
longer enjoys its right of possession to the Project. Lessee
shall make all Rental Payments and other payments required
hereunder when due and shall not withhold any Rental Payment or
other payment pending final resolution of such dispute nor shall
Lessee assert any right of setoff or counterclaim against its
obligation to make such Rental Payments or other payments
required under this Lease. Lessee shall have the right pursuant
to Section 7.3 to in good faith contest taxes, special assess-
ments, utility or other charges in accordance with the provisions
of Section 7.3. However, nothing herein shall be construed to
release Lessor from the performance of its obligations hereunder;
and if Lessor should fail to perform any such obligation, Lessee
may institute such legal action against Lessor as Lessee may deem
2304�
15
necessary to compel the performance of such obligation or to
recover damages therefor.
Section 5.4. Current Expense. The obligations of
Lessee under this Lease, including its obligation to pay the
Rental Payments due with respect to the Project, in any Fiscal
Year for which this Lease is in effect, shall constitute a
current expense of Lessee for such Fiscal Year. The Lessee's
obligations hereunder shall be from year to year only and shall
not constitute an indebtedness, liability or mandatory payment
obligation of Lessee in any ensuing Fiscal Year beyond the then
current Fiscal Year. No provision herein shall be construed or
interpreted as creating a general obligation or other indebted-
ness of the Lessee within the meaning of any Constitutional or
statutory debt limitation. Except for the lien herein created in
the Project and the proceeds thereof, nothing herein shall be
construed to pledge or to create a lien on any taxes or on any
other class or source of money of the Lessee, nor shall any
provision herein restrict the future issuance of any bonds of the
Lessee or obligations payable from any class or source of Lessee
moneys.
ARTICLE VI
INSURANCE AND INDEMNIFICATION
Section 6.1. Liability Insurance. The Lessee shall,
at its own expense, cause comprehensive liability and property
damage insurance to be carried and maintained with respect to the
activities to be undertaken by and on behalf of the Lessee in
connection with the use of the Project substantially the same as
insurance carried by the Lessee with respect to other
governmental activities.
Section 6.2. Property Insurance. The Lessee shall
cause casualty and property damage insurance to be carried and
maintained with respect to the Project in an amount at least
equal to the outstanding.Principal amount with a deductible not
to exceed the deductible carried by the Lessee with respect to
other similar governmental buildings.
Section 6.3. Worker's ComQensation Insurance. If
requi
red red by State law, Lessee shall carry Worker's Compensation
Insurance covering all employees on, in, near or about the
Project, and upon request, shall furnish to Lessor certificates
evidencing such coverage throughout the Term of this Lease.
Section 6.4. Requirements For All Insurance. All
insurance policies (or riders) required by this Article shall be
taken out and maintained with responsible insurance companies
organized under the laws of one of the states of the United
States and qualified to do business in the State, and shall
contain a provision that the insurer shall not cancel or revise
coverage thereunder without giving written notice to the insured
parties at least thirty (30) days before the cancellation or
revision becomes effective. All insurance policies or riders
required by Sections 6.1 and 6.2 shall name Lessee and Lessor as
insured parties and, with respect to the property insurance,
shall also name Lessor as loss payee. During the period of
construction of the Project, the requirement that Lessor be named
as an insured party under the liability insurance may be satis-
fied by having Lessor named as additional insureds under the
liability insurance policy carried by the General Contractor.
Lessee shall deposit with Lessor policies (and riders) evidencing
any such insurance procured by it, or a certificate or certifi-
cates of the respective insurers stating that such insurance is
in full force and effect. Before the expiration of any such
policy (or rider), Lessee shall furnish to Lessor evidence that
the policy has been renewed or replaced by another policy
conforming to the provisions of this Article.
z3o4�
17
Section 6.5. Indemnification: Hazardous Substance.
(1) Lessee assumes all risks and liabilities, whether or
not covered by insurance, for loss or damage to the Project or
any portion thereof and for injury to or death of any person or
damage to any property, in any manner arising out of or incident
to any possession, use, operation or condition of the Project or
any portion thereof, whether such injury or death be with respect
to agents or employees of Lessee or of third parties, and whether
such property damage be to Lessee's property or the property of
others to the maximum extent permitted by law, Lessee hereby
assumes responsibility for and agrees to indemnify, protect, save
and keep harmless Lessor from and against any and all
liabilities, obligations, losses, damages, penalties, claims,
actions, costs and expenses (including reasonable attorney's
fees) of whatsoever kind and nature, imposed on, incurred by or
asserted against Lessor that in any way relate to or arise out of
the possession, use, operation or condition of the Project or the
financing related thereto, unless caused by Lessor or its agents.
(2) Lessee hereby agrees to defend, indemnify :and hold --- ---
harmless Lessor, their officers, employees, agents, successors
and assigns (hereinafter collectively referred to as the
"Indemnities") from and against, and shall reimburse each such
Indemnitie0for, any and all loss, claim, liability, damage,
judgment, penalty, injunctive relief, injury to person, property
or natural resources, cost, expense, action or cause of action
arising in connection with or as the result of any past, present
or future existence, use, handling, storage, transportation,
manufacture, release or disposal of any Hazardous Substance in,
on or under the Land, whether foreseeable or unforeseeable,
regardless of the source, the time of occurrence or the time of
discovery (hereafter collectively referred to as "Loss"). The
foregoing indemnification against Loss includes, without
limitation, indemnification against all costs in law or in equity
of removal, response, investigation, or remediation of any kind,
and disposal of such Hazardous Substances, all costs of
determining whether the Land is in compliance with, and of
causing the Land to be in compliance with, all applicable
Environmental Laws, all costs associated with claims for damages
to persons, property, or natural resources, and the Indemnities'
reasonable attorneys' and consultants' fees, court costs and
expenses incurred in connection with any thereof.
(3) The obligations of Lessee to
shall survive satisfaction and payment
termination�of this Lease. The rights
hereunder shall be in addition to any
which the Indemnities may have against
under this Lease or any other document
indemnify the Indemnities
in full of the Bonds,
of the Indemnities
other rights and remedies
the Land and the Lessee
or at law or in equity.
(4) Notwithstanding anything in this Lease to the contrary,
if Lessor should, after the subleasing the Land to the Lessee as
provided herein, subsequently terminate the Lease and -reacquire
possession of the Land subject the Land Lease (the date on which
this event occurs being the "Transfer Date"), this Indemnity
shall not apply to any Loss incurred by Lessor as a direct result
of affirmative actions of Lessor as lessee and operator of the
Land after Lessor has acquired possession of the Land if such
affirmative actions of the Lessor are the sole and direct cause
of the introduction and initial release of a Hazardous Substance
in, on or under the Land; provided, however, that the Indemnitor
shall bear the burden of proof that the introduction and initial
release of such Hazardous Substance (i) occurred subsequent to
the Transfer Date, (ii) did not occur as a result of any action
of the Indemnitor, and (iii) did not occur as a result of a
continuing migration or.release of any Hazardous Substance
introduced prior to the Transfer Date in, on, under or near the
Project.
(5) Except as expressly provided for in this Section 6.5,
this indemnity shall remain in full force and effect, including,
without limitation, with respect to Hazardous Substances which
are discovered or released in, on or under the Land after the
Transfer Date, and with respect to the continuing migration or
release of any Hazardous Substance previously introduced in, on,
under or near the Land. The foregoing limitations shall not
affect or impair any rights, remedies or claims the Lessor may
have outside the scope of this indemnity, at law or in equity,
with respect to the Indemnitor or others.
Section 6.6. Damage to or Destruction of Proj ect. If.
after the execution of this Lease with respect to all or a
portion of the Project all or any part of the Project is lost,
stolen, condemned, destroyed or damaged beyond repair, Lessee
shall as soon as practicable after such event either:
(i) replace the same at Lessee's sole cost and expense, such
replacement to be of equal or greater value to the Project or any
portion thereof, immediately prior to the time of the loss
occurrence, whereupon such replacement shall be substituted in
this Lease by appropriate endorsement; or (ii) exercise its
option to purchase or otherwise acquire the Project as provided
in Article X hereof. Lessee shall, within ninety (90) days after
the loss occurrence, notify Lessor of which course of action it
has taken or will take. If Lessee fails or refuses to so notify
Lessor within the required period, Lessor may, at its option,
require the Lessee to purchase the Project at the applicable
Casualty Value of the Project, in which event said amount shall
become immediately due and payable, and Lessee shall be obligated
to pay the same to the Lessor. The Net Proceeds payable with
respect to the loss shall be used to discharge Lessee's obliga-
tion under this Section. Upon Lessee purchasing or otherwise
acquiring the Project as provided in this Section 6.6, this Lease
shall terminate and Lessee thereupon shall become entitled to the
Project AS IS, WITHOUT WARRANTIES, EXPRESS OR IMPLIED, INCLUDING
WARRANTIES OF MERCHANTABILITY OR.FITNESS FOR ANY PARTICULAR
PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY Lessee, except
that the Project shall not be subject to any lien or encumbrance
created by or arising through Lessor, except Permitted
Encumbrances. To evidence the foregoing, the Lessor shall, at
the request and expense of Lessee, execute such documents as
Lessee reasonably determines are required to convey and release
to Lessee, any and all of their remaining right, title and/or
interest in and to the Project.
z3o4�
20
ARTICLE VII
OTHER OBLIGATIONS OF LESSEE
Section t.L Use; Permits. Lessee shall exercise due
,are in the construction, use, operation and maintenance of the
Project, and shall not install, use, operate or maintain the
Project improperly, carelessly, in violation of any State and
federal Law or for a purpose or in a manner contrary to that
contemplated by this Lease. Lessee shall obtain all permits and
licenses necessary for the construction, operation, possession
and use of the Project. Lessee shall comply with all State and
federal laws applicable to the construction, use possession and
operation of the Project, and if compliance with any such State
and federal law requires changes or additions to be made to the
Project, such changes or additions shall be made by Lessee at its
expense.
Section '7.2. Maintenance of Project b� Lessee. Lessee
shall, at its own expense, maintain, preserve and keep the
Project in good repair, working order, condition and/or
operation, and shall from time to time make all repairs and
replacements necessary to keep the Project in such condition.
Lessor shall have no responsibility for any of these repairs or
replacements.
Section 7.3. Taxes, Other Governmental Charges and
Utility Charges. Except as expressly limited by this Section,
Lessee shall pay all taxes and other charges of any kind which
are at any time lawfully assessed or levied against or with
respect to the Project, or which become due during the Term of
this Lease, whether assessed against Lessee or Lessor. Lessee
shall also pay when due all gas, water, steam, electricity, heat,
power, telephone, and other charges incurred in the operation,
maintenance, use, occupancy and upkeep of the Project, and all
special assessments and charges lawfully made by any governmental
body for public improvements -that may be secured by a lien on the
Project; provided that with respect to special assessments or
other governmental charges that may lawfully be paid in install-
ments Lessee shall only be required to pay such installments,
during the Term of this Lease as and when the same become due.
Lessee shall not be required to pay any federal, state or local
income, inheritance, estate, succession, transfer, gift, fran-
chise, gross receipts, profit, excess profit, capital stock,
corporate, or other similar tax payable by Lessor, its successors
or assigns, unless such tax is made in lieu of or as a substitute
for any tax,_assessment or charge which is the obligation of
Lessee under -this Section.
Lessee may, at its own expense and in its own name, in
good faith contest any such taxes, assessments, utility and other
charges and shall notify the Lessor of such good faith contest
z3o4�
21
and, in the event of any such contest, may permit the taxes,
assessments, utility or other charges so contested to remain
unpaid during the period of such contest and any appeal therefrom
but only if nonpayment of any such items will not materially
endanger the interest of Lessor in the Project will be materially
endangered or the Project, nor subject to loss or forfeiture, the
Project or any part thereof. If this condition is not satisfied
Lessee shall promptly pay such taxes, assessments, utility or
other charges or provide Lessor with full security against any
loss which may result from nonpayment, in form satisfactory to
Lessor.
Section 7.4. Advances. If Lessee shall fail to
perform any of its obligations under this Article, Lessor may,
but shall not be obligated to, take such action as may be
necessary to cure such failure, including the advancement of
money, and Lessee shall be -obligated to repay all such advances
on demand with interest from the date of the advance to the date
of repayment. The interest rate on the advance shall be 200
basis points greater than (1) the rate of interest at which the
Lessor borrowed the money advanced or, (2) if the Lessor did not
borrow the money, the rate of interest then being charged by The
Bank of Elk River as its reference rate.
230434
22
ARTICLE VIII
TITLE
Section 8.1. Title. During the Term of this Lease
title to the Project and any and all repairs, replacements,
substitutes and modifications to it shall be in Lessor. Upon
termination of this Lease for the reason specified in Section
4.6, Clause (a) or (c) thereof, full and encumbered title to the
Project, but not the Land, shall pass to Lessor, and Lessee shall
have no further interest in the Project under this Lease. In
such event Lessee shall execute and deliver to Lessor such
documents as Lessor may request to evidence passage of legal
title to the Project to Lessor and the termination of this Lease
and of Lessee's interest in the Project thereunder, and upon
request by Lessor, Lessee shall deliver possession of the Project
to Lessor, in accordance with Section 12.3. Upon termination of
this Lease for the reason specified in Section 4.6, Clause-(b) or
(d) thereof, Lessor's title to and security or other interest in
the Project shall terminate, and Lessor shall, at Lessee's -
expense, execute and deliver to Lessee such documents as Lessee
may request to evidence the termination of Lessor's title to and
security or other interest in the Project.
Section 8.2. Security Interest. Lessee hereby grants
Lessor a security interest in all portions of the Project that
are deemed personal property or fixtures pursuant to applicable
law, the proceeds thereof and all repairs, replacements,
substitutions and modifications thereto or thereof made pursuant.
to Section 8.5 and a security interest in the proceeds of all
insurance policies, in order to secure Lessee's payment of all
Rental Payments due during the Term of this Lease and the
performance of all other obligations herein to be performed by
Lessee. Lessee will cause to be executed, filed and recorded all
instruments, including financing statements and continuation
statements, and will perform such acts as are required to
establish and maintain a valid and perfected security interest in
such portions of the Project.
Section 8.3. Liens. During the Term of this Lease,
Lessee shall not, directly or indirectly, create, incur, assume
or suffer to exist any mortgage, pledge, lien, charge, encum-
brance or claim on or with respect to the Project, other than the
respective rights of Lessor and Lessee as herein provided and
Permitted Encumbrances. Except as expressly provided in Section
7.3 and this Article, Lessee shall promptly, at its own expense,
take such action as may be necessary to duly discharge or remove
any such mortgage, pledge, lien, charge, encumbrance or claim if
the same shall arise at any time; provided that if any such lien
for labor or materials is established against the Project and
Lessee shall first notify Lessor of Lessee's intention to do so,
Lessee may in good faith contest any such lien, and in such event
z3o4�
23
may permit the lien so contested to remain undischarged and
unsatisfied during the period of such contest and any appeal
therefrom but only if (1) nonpayment of any such item will not
materially endanger the interest of Lessor in the Project, nor
subject to loss or forfeiture the Project or any part thereof,
and (2) the Lessee files with the Lessor an opinion of
Independent Counsel stating in effect that neither event will
occur. Lessee shall reimburse Lessor for any expense incurred by
Lessor in order to discharge or remove any such mortgage, pledge,
lien, charge, encumbrance or claim.
- Section 8.4. Installation of Lessee's Equipment.
Lessee may at any time and from time to time, in its sole
discretion and at its own expense, install items of fixtures,
equipment and other personal property in or upon the Project.
All such items shall remain the sole property of Lessee, in which
Lessor shall have no interest, and may be modified or removed by
Lessee at any time provided that Lessee shall repair and restore
on a timely basis any and all damage to the Project resulting
from the installation, modification or removal of any such items.
Nothing in this Lease shall prevent Lessee from purchasing items
to be installed pursuant to this Section under a conditional sale
or lease -purchase contract, or subject to a vendor's lien or
security agreement, as security for the unpaid portion of the
purchase price thereof, or from entering into any -other loan
agreement secured by a lien or security interest in such property
provided that no such lien or security interest shall attach to
any part of the Project. Lessor shall, at the request and
expense of Lessee, execute such releases and other documents as
Lessee reasonably determines is necessary to facilitate such
purchase or loan and as are consistent with the rights of the
parties under this Lease, and as a condition to executing such
documents, Lessor may require and in -good faith conclusively rely
upon a written statement of Lessee that the documents comply with
the provisions of this Section 8.4.
Section 8.5. Modification of Project. Subject to
Lessee's rights under Section-8.4, Lessee shall, at -its own
expense, have the right to make repairs to the Project, and to
make repairs, replacements, substitutions and modifications to
all or any of the parts thereof. All such work and any part or
component used or installed to make a repair or as a replacement,
substitution or modification, shall thereafter comprise part of
the Project and be subject to the provisions of this Lease. Such
work shall not in any way damage the Project or cause it to be
used for purposes other than those authorized under the pro-
visions of State and Federal Law or those contemplated by this
Lease, and the Project, upon completion of any such work shall be
of value which is not less than the value of the Project prior to
the commencement of such work. Any property for which a replace-
ment or substitution is made pursuant to this Section may be
disposed of by Lessee in such manner and on such terms as are
230434
24
determined by Lessee. If as a result of such replacement or
substitution, a change in the description of any Project Equip-
ment set forth in Exhibit A must also be made, Lessor and Lessee
shall, at Lessee's expense, amend this Lease to reflect that
change, and each party shall, at the request of the other party
but solely at Lessee's expense execute such other documents, such
as a UCC termination statement or a supplemental financing
statement, as the party reasonably determines is necessary or
desirable to properly identify Project Equipment. Lessor shall
also at Lessees expense execute such other releases from the
provisions of the Lease for any replacement equipment as Lessee
may reasonably request. For purposes of executing any such
amendment or document, Lessor may require and in good faith
conclusively rely upon a written statement of Lessee that such
amendment or document complies with the provisions of the Section
8.5. Lessee will not permit any mechanic's or other lien to be
established or remain against the Project for labor or materials
furnished in connection with any repair, replacement, substitu-
tion or modification made by Lessee pursuant to this Section,
provided that Lessee may in good faith contest any such lien upon
satisfaction of the conditions for contesting the lien set forth
in Section 8.3 hereof. Lessor will cooperate fully with Lessee
in any such contest, upon the request and at the expense of
Lessee.
Section 8.6. Easements and Utility Access. Lessee
may, at Lessee's expense, at any time and from time to time
request Lessor to convey an easement affecting the Land to a
railroad, corporate utility or public body, or any other person,
upon written certification by an Independent Engineer that in his
or her opinion the easement is necessary or desirable to provide
rail, road or other access or utility service for the Project or
other property and will not impair the usefulness of the Project
for the purposes contemplated in this Lease and will not destroy
the means of ingress therefrom and egress therefrom. No such
easement shall result in any abatement of rents or other sums
payable by Lessee under this Lease. Lessor will execute the
easement and join in the execution of a supplement to this Lease,
providing for the subordination of this Lease to any such
easement; but if at any time any Bonds remain outstanding under
the Bond Resolution, the subordination shall not become effective
until the following items are filed with, and/or where
applicable, executed by, the Lessor:
(1) an executed duplicate of.the Lease supplement, stating
the purpose thereof and that neither Lessor nor Lessee is then in
default under this Lease or the Bond Resolution;
(2) a copy of the easement (or if Section.8.7 is appli-
cable, release) executed or to be executed by Lessor;
2304�
25
(3) a plat or survey of the Land prepared and certified by
a registered Minnesota land surveyor, showing the land to be
subjected to the easement as described in the easement (or if
Section 8.7 is applicable, the land to be released) and the
location in relation thereto of all buildings, structures and
permanently installed equipment on the land, and all other
easements, roads, tracks and utility installations;
(4) evidence of the authority of the officers executing the
lease supplement and easement (or, if Section 8.7 is applicable,
the release) on behalf of Lessor and Lessee, including a
certified copy of an authorizing resolution of the governing body
of Lessor and of Lessee; and
(5) the certificate of the Independent Engineer.
Any money received by Lessee for the easement shall be remitted
to the Lessor and credited to the Bond Fund. For purposes of
executing the instruments described in this Section 8.6, Lessor
may require and in good faith conclusively rely upon a written
statement of Lessee that the provisions of this Section 8.6 have
been fully satisfied.
Section 8.7. Release of Unimproved Land. Lessee may,
at Lessee's expense, at any time and from time to time request
Lessor to release from the provisions of the Lease and Ground
Lease any part of the Land on which no building, structure or
permanently installed equipment is situated, upon written
certification by an Independent Engineer stating that in his or
her opinion the land proposed to be released is not needed for
the operation of the Project for the purposes stated in this
Lease, and that the release will not impair the usefulness of the
Project for these purposes and will not destroy the means of
ingress thereto and egress.therefrom. Lessor will join in.the
execution of a supplement to this Lease providing for the release
thereof, subject to the following conditions.
(1) if at the time any Bonds remain outstanding under the
Bond Resolution, the release shall not become effective until the
filing with the Lessor of the following items:
(A) the items described in paragraphs (1) to (5),
inclusive, of Section 8.6. and
(B) an opinion of Independent Counsel stating that the
above documents satisfy the requirements of this Section and that
the release is in appropriate form for execution by the
respective parties; and
(2) the Lessee shall not be entitled to any abatement,
eduction, or di
rminution of any rents payable under this Lease;
230434
26
(3) any money received by Lessee for the sale of the
released land to a third party shall be remitted to the Lessor
and credited to the Bond Fund.
section 8.8. covenant For the Benefit of the
Bondholder. Lessee recognizes the authority of the Lessor to
pledge all moneys receivable under this Lease, including any
proceeds from the sale of all or a part of the Project, as
security for the payment of the principal of and interest and
redemption premiums, if any, on the Bond. Each of the terms and
provisions of this Lease is a covenant for the use and benefit of
the holder of the Bond, so long as any thereof shall remain
outstanding; but upon payment in -full of the Bond and of all fees
and charges of the Paying Agent, all references in this Lease to
the Bond shall be ineffective, and the holder of the Bond shall
thereafter have no rights hereunder, save and except those that
shall have theretofore vested.
2304�
27
ARTICLE IX
PROJECT WARRANTIES
Section 9.1. Selection of Project. The Project and
the Contractors have been selected by Lessee, and Lessor shall
have no responsibility in connection with the selection of the
Project, its suitability for the use intended by Lessee, the
selection of the Contractors, or any delay or failure by the
Contractors to construct the Project.for use by Lessee.
Section 9.2. Construction and Maintenance of Project.
Lessor shall have no obligation to construct, inspect or maintain
the Project or any portion thereof under any circumstances, but
such actions shall be the obligation of Lessee or the
Contractors.
Section 9.3. Contractors' Warranties. Lessor hereby
assigns to Lessee for and during the Term of this Lease, all of
its interest in all Contractors' warranties and guarantees,
express or implied, issued on or applicable to the Project, and
Lessor hereby authorizes Lessee to obtain the customary services
furnished in connection with such warranties and guarantees at
Lessee's expense.
SectionDisclaimer of Warranties. THE PROJECT IS
LEASED AS IS, AND LESSOR MARES NO WARRANTY OR REPRESENTATION,
EITHER EXPRESS OR IMPLIED, AS TO THE VALUE, DESIGN, CONDITION,
MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS
FOR THE USE CONTEMPLATED BY LESSEE OF THE PROJECT, OR ANY OTHER
REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROJECT.
230434
28
ARTICLE X
Section 10.1. When Available. Lessee shall have the
option to purchase Lessor's interest in the Project on any date
for the then applicable Purchase Option Price plus past due
Rental Payments and only in the manner provided in this Article.
Section 10.2. Exercise of Purchase Option. Lessee
shall give notice to Lessor of its intention to exercise its
purchase option not less than thirty (30) days prior to the date
on which the option is to be exercised and shall deposit with the
Lessor on the date of exercise an amount equal to all Rental
Payments and any other amounts then due or past due and the
applicable Purchase Option Price. The purchase shall be on the
date on which the option is to be exercised at the office of
Lessor.
Section 10.3. Release of Lessor's Interest. Upon
exercise by Lessee of its option to purchase Lessor's interest in
the Project, this Lease shall terminate and Lessee thereupon
shall become entitled to the Project AS IS, WITHOUT WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR ANY PARTICULAR PURPOSE OR FITNESS FOR THE USE
CONTEMPLATED BY Lessee, except that the Project shall not be
subject to any lien or encumbrance created by or arising through
Lessor other than any Permitted Encumbrances. To evidence the
foregoing, Lessor shall, at the request and expense of Lessee,
execute such documents as Lessee reasonably determines are
necessary to convey and release to Lessee, any and all of
Lessor's remaining right, title and/or interest in and to the
Project.
Section 10.4. Partial Prepayment. Lessee shall have
the option to prepay on any. date, in increments of $1,000, the
Principal portion of any Rental Payment selected by the Lessee
and scheduled to become due under the Lease, and to be thereby
relieved of any obligation to pay any Interest on said Principal
portion that would otherwise accrue.from and after the prepayment
date.
Section 10.5. Exercise of Partial Prepayment. Lessee
shall give notice to Lessor of its intention to exercise its
option to partially prepay Rental Payments in whole or part, as
provided in Sections 10.4 and 10.5 above. Lessee shall give such
notice not less than thirty (30) days prior to the date on which
the Principal portion of any Rental Payments is to be prepaid, in
whole or part, or the Optional Purchase Price is to be paid, and
shall deposit with the Paying Agent on the date of exercise the
sum required to effect such prepayment.
230434
29
Section 10.6. Credit for Partial Prepayment. If
Lessee partially prepays any Rental Payments under Section 10.5
hereof and thereafter elects to acquire the Project as provided
in this Article X, the Lessee shall be entitled to credit against
the applicable Purchase Option Price an amount equal to the
Principal of the Rental Payments scheduled to come due after the
Payment Date as of which the applicable Purchase Option Price is
calculated and taken into account at the time such partial
prepayment.
ARTICLE XI
ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section n.1. Assignment by Lessor. Subject to
Section 8.8 hereof, Lessor shall not assign its obligations under
this Lease, and no purported assignment thereof shall be
effective. The Lessor's sole obligation is to provide to the
Lessee quiet enjoyment of the Project. Any and all of Lessor's
rights, title and/or interest in and to this Lease, the Rental
Payments and other amounts due hereunder and the Project may be
assigned and reassigned in whole or in part to one or more
assignees or sub -assignees by Lessor at any time pursuant to the
Bond Resolution or otherwise, without the consent of Lessee. No
such assignment shall be effective as against Lessee unless and
until the assignor shall have filed with Lessee a copy or written
notice thereof identifying the assignee. Lessee shall pay all
Rental Payments due hereunder to or at the direction of Lessor or
the assignee named in the most recent assignment or notice of
assignment filed with Lessee.
Section 11.2. Assignment and Subleasing by Lessee.
Neither this Lease nor Lessee's_interest in the Project may be
assigned or subleased by Lessee without the written consent of
Lessor and any such assignment or sublease shall not relieve
Lessee from its obligation to make the Rental Payments hereunder,
provided that Lessor's consent to a sublease shall not be
required if (1) the sublease provides that the sublessee will not
take any action in derogation of Lessee's obligations hereunder,
(2) a copy of the sublease is filed with Lessor and the Paying
Agent, and (3) either (A) the sublease is to a Governmental Unit
or (B) an opinion of Bond -Counsel is first filed with the Lessor
and the Paying Agent stating in effect that the sublease.will not
impair the tax exempt status of the Bond.
Section 11.3. Restriction on Mortgage or Sale of
Pro'iect by Lessee. Lessee will not sell, transfer or convey its
interest in the Project or any portion thereof during the Term of
this Lease, without the written consent of Lessor.
z3o4�
31
ARTICLE XII
EVENTS OF DEFAULT AND REMEDIES
Section 12.1. Events of Default Defined. The
following shall be "events of default" under this Lease and the
terms "events of default" and "default" shall mean, whenever they
are used in this Lease, with respect to the Project, any one or
more of the following events:
(i) Failure by Lessee to pay any Rental Payment
or other payment required to be paid under this Lease at the
time specified herein and, except in the case of a failure
to pay when due any Rental Payment, the continuation of said
failure for a period of seven days.
(ii) Failure by Lessee to observe and perform any
covenant, condition or agreement on its part to be observed
or performed, other than as referred to in Clause (i) of
this Section, for a period of thirty (30) days after written
notice specifying such failure and requesting that it be
remedied has been given to Lessee by Lessor, unless Lessor
shall agree in writing to an extension of such time prior to
its expiration, provided, however, if the failure stated in
the notice cannot be corrected within the applicable period,
Lessor will not unreasonably withhold its consent to an
extension of such time if corrective action is instituted by
Lessee within the applicable period and diligently pursued
until the default is corrected.
(iii) The filing by Lessee of a voluntary..
petition in bankruptcy; or failure by Lessee promptly to
lift any execution, garnishment or attachment of such
consequence as would impair the ability of Lessee to carry
on its governmental or proprietary function; or adjudication
of Lessee as a bankrupt; or assignment by Lessee for the
benefit of creditors, or the entry by Lessee into an
agreement of composition with creditors, or the approval by
a court of competent jurisdiction of a petition applicable
to Lessee in any proceedings instituted under the provisions
of the Federal Bankruptcy Statute, as amended, or under any
similar acts which may hereafter be enacted.
(iv) The vacation or abandonment by the Lessee of
the Project for a period of 90 consecutive days.
The provisions of this Section 12.1 and Section 12.2 are subject
to the following limitation: if by reason of force majeure
Lessee is unable in whole or in part to carry out its obligations
under this Lease with respect to the Project, other than its
obligation to pay Rental Payments with respect thereto which
shall be paid when due notwithstanding the provisions of this
32
paragraph, Lessee shall not be deemed in default during the
continuance of such inability. The term "force ma:eure" as used
herein shall mean, without limitation, the following: acts of
God; strikes, lockouts or other labor disturbances; acts of
public enemies, orders or restraints of any kind of the
government of the United States of America or the State or their
respective departments, agencies or officials, or any civil or
military authority; insurrections; riots, landslides;
earthquakes, fires; storms; droughts, floods; explosions,
breakage or accident to machinery, transmission pipes or canals,
or any other cause or event not reasonably within the control of
Lessee and not resulting from its negligence. Lessee agrees,
however, to remedy with all reasonable dispatch the cause or
causes preventing Lessee from carrying out its obligations under
this Lease, provided that the settlement of strikes, lockouts and
other labor disturbances shall be entirely within the discretion
of Lessee and Lessee shall not be required to make settlement of
strikes, lockouts and other labor disturbances by acceding to the
demands of the opposing party or parties when such course is, in
the judgment of Lessee, unfavorable to Lessee.
Section 12.2. Remedies on Default. Whenever any event
of default referred to in Section 12.1 hereof shall have happened
and be continuing with respect to the Project, Lessor shall have
the right, -at its option and without any further demand or
notice, to take one or any combination of the following remedial
steps:
(i) Lessor, with or without terminating this
Lease, may declare all Rental Payments due or to become due
during the Term of the Lease to be immediately due and
payable by Lessee, whereupon such Rental Payments shall be
immediately due and payable. If Lessor has not terminated
the Lease and has not declared all Rental Payments
immediately due and payable and if Lessee has cured the
event of default and pays the late charge provided in
Section 12.6, if applicable, the Lessee shall be restored to
its former position before the event of default occurred.
(ii) Lessor, with or without terminating this_
Lease, may repossess the Project or any portion thereof by
giving Lessee written notice to vacate the Project,
whereupon Lessee shall do so in the manner provided in
Section 12.3. or inthe event Lessee fails to do so within
ten (10) days after receipt of such notice, Lessor may enter
upon the Project and take possession of the Project and
charge_Lessee for costs incurred in repossessing such
portion of the Project, including reasonable attorneys'
fees. Lessee hereby expressly waives any damages occasioned
by such repossession. If the Project or any portion of it
has been destroyed, wasted, or damaged beyond repair, Lessee
shall pay the applicable Purchase Option Price of the
Project, as set forth in Exhibit C (less credit for Net
Proceeds), to Lessor. Lessee shall continue to be
responsible for the payment of Rental Payments. If this
Lease has not been terminated, Lessor shall return the
Project or any portion thereof to Lessee at Lessee's expense
when the event of default is cured.
If the Lessor terminates this Lease and
takes possession of the Project or any portion thereof,
Lessor, shall have the right to sell the Project or any
portion thereof in a commercially reasonable manner at
public or private sale in accordance with applicable State
laws. Lessor shall apply the proceeds of such sale to pay
the following items in the following order; (a) all costs
incurred in securing possession of the Project, (b) all
expenses incurred in completing the sale, (c) the applicable
Purchase Option Price of the Project; and (d) the balance of
any accrued Rental Payments owed by Lessee. Any sale
proceeds remaining after the requirements of Clauses (a),
(b), (c) and (d) have been met may be retained by the
Lessor.
(iv) Lessor may take any other remedy available
at law or in equity to require Lessee to perform any of its
obligations hereunder.
In no event however, shall the Lessee be liable under this
Article 12 in excess of the moneys appropriated by it on a yearly
basis (other than for any additional Rental Payments due if the
Lessee occupies the Project after termination of the Lease
pursuant to Section 4.4 hereof).
Section 12.3. Return of Project. Upon the termination
of this Lease prior to the payment of all Rental Payments in
accordance with Exhibit B, Lessee, shall vacate the Project in
the condition, repair, appearance and working order -required in
Section 7.2, reasonable wear and tear damage by the elements and
insured damage excepted in the following manner as may be
specified by Lessor; (1) by executing such documents as Lessor
reasonably deems necessary to transfer all of Lessee's right,
title and interest under this Lease in and to the Project to
Lessor and (ii) by paying all reasonable costs and expenses
whether incurred by the Lessor (including attorneys fees) with
respect to such transfer of the property. If Lessee refuses to
return the Project in the manner designated, Lessor may repossess
the Project and charge to Lessee the costs of such repossession
or pursue any remedy described in Section 12.2. In addition to
all other remedies provided in this Lease, Lessor shall also have
the right in its sole discretion to abandon the Project or any
portion thereof, and upon such abandonment Lessor shall have no
further interest in or any obligation with respect to the Project
or the portion thereof being abandoned. In such event Lessor
shall execute such documents as Lessee reasonably deems necessary
to transfer all of Lessor's right, title and interest in and to
the Project or the portion thereof being abandoned to Lessee.
Section 12.4. No Remedy Exclusive. No remedy
conferred upon or reserved to Lessor by this Article is intended
to be exclusive and every such remedy shall be cumulative and
shall be in addition to every other remedy given under this
Lease. No delay or omission to exercise any right or power
accruing upon any default shall -impair any such right or power or
shall be construed to be a waiver thereof but any such right and
power may be exercised from time to time and as often as may be
deemed expedient by Lessor.
Section 12.5. Actreement to Pay Attorneys' Fees and
Expenses. In the event either party to this Lease should default
under any of the provisions hereof and the non -defaulting party
should employ attorneys and/or incur other expenses for the
collection of moneys or for the enforcement of performance or
observance of any obligation or agreement on the part of the
defaulting party herein contained, the defaulting party agrees
that it will on demand therefor pay to the non -defaulting party
the reasonable fee of such attorneys and/or such other reasonable
expenses so incurred by the non -defaulting party.
Section 12.6. Late Charge. Whenever any event of
default referred to in Section 12.1, Clause (1) hereof shall have
happened and be continuing with respect to the Project, Lessor
shall have the right, at its option and without any further
demand or notice, to require a late payment charge equal to four
percent (4%) of the delinquent amount or such lesser amount as
may be permitted by Minnesota law if four percent (4%) exceeds
Minnesota law, and Lessee shall be obligated to pay the same
immediately upon receipt of Lessor's written invoice therefor;
provided, however, that this Section 12.6 shall not be applicable
if or to the extent that the application thereof would affect the
validity of this Lease.
2so4�
35
ARTICLE XIII
ADMINISTRATIVE PROVISIONS
Section n .1. Notices. A11 notices, certificates,
legal opinions or other communications hereunder shall be
sufficiently given and shall be deemed given when delivered or
deposited in the United States -mail in registered or certified
form with postage fully prepaid, provided that Lessor and Lessee,
by notice given hereunder, may designate different addresses to
which subsequent notices, certificates, legal opinions or other
communications will be sent.
Section 13.2. Financial Information. Lessee shall
annually provide Lessor with current financial statements and
budgets, and such other financial information relating to the
ability of Lessee to continue this Lease as may be requested by
Lessor.
Section 13.3. Binding Effect. This Lease shall inure
to the benefit of and shall be binding upon Lessor and Lessee and
their respective successors and assigns.
Section 13.4. Severability. In the event any
provision of this Lease shall be held invalid or unenforceable by
any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any other provision hereof.
Section 13.5. Amendments, Chances and Modifications.
This Lease may be amended or any of its terms modified only by
written document duly authorized, executed and.delivered by
Lessor and Lessee.
Section 13.6. Captions. The captions or headings in
the Lease are for convenience only and in no way define, limit or
describe the scope or intent of any provision, Article, Section
or Clause of this Lease.
Section 13.7. Further Assurances and Corrective
Instruments. Lessor and Lessee agree that they will, from time
to time, execute, acknowledge and deliver, or cause to be
executed, acknowledged and delivered, such supplements hereto and
such further instruments as may reasonably be required for
correcting any inadequate or incorrect description of the Project
hereby leased or intended so to be, or for otherwise carrying out
the expressed intention of this Lease.
Section 13.8. Execution In Counterparts. This Lease
may be simultaneously executed in several counterparts, each of
which shall be an original and all of which shall constitute but
one and the same instrument.
230434
Section 13.9. Applicable Law. This Lease shall be
governed by and construed in accordance with the laws of the
State.
IN WITNESS WHEREOF, Lessor has caused this Lease to be
executed in its corporate name by its duly authorized officer;
and Lessee has caused this Lease to be executed in its name by
its duly authorized officer, as of the date first above written.
ECONOMIC DEVELOPMENT AUTHORITY OF THE
CITY OF OTSEGO, Lessor
By
Its President
By
Its
Secretary
2304�
37
CITY OF %%J L ,
Lessee
By
Its
s
yor
lerk
C
Signature page to Lease With Option to Purchase Agreement.
230L34
38
STATE OF MINNESOTA
ss.
COUNTY OF WRIGH'I'
The foregoing instrument was acknowledged before me this
day of December, 1992, by Norman F. Freske, the Mayor, and
Jerome Perrault, the City Clerk of Otsego, Minnesota, a municipal
corporation on behalf of said corporation.
STATE OF MINNESOTA
ss.
COUNTY OF WRIGHT
Notary Public
The foregoing instrument was acknowledged before me this
day of December, 1992, by , the President,
and , the Secretary, of the Economic
Development Authority of the City of Otsego, a public body
corporate and politic and a political subdivision of the state of
Minnesota, on behalf of said public entity.
Notary Public
EXHIBIT A
DESCRIPTION OF PROJECT AND LAND
An approximately 8,600 square foot community center to be
located on the following described parcel:
The north 535.00 feet of the south 885.00
feet for the east 480.00 feet of the north
half of the Northwest Quarter of Section 20,
Township 121, Range 23, Wright County,
Minnesota.
z3o4�
Month
Payment
Date
EXHIBIT B
SCHEDULE OF RENTAL PAYMENTS
Total
Payment Principal
Year Number Component
Interest Rental
Component Payment
EXHIBIT C
SCHEDULE OF PURCHASE OPTION PRICE AND CASUALTY VALUES
PURCHASE OF PROJECT
After Payment Number
z3o4�
Purchase Option Price
fflkVYiMMM
CERTIFICATE OF INCUMBENCY
I, the undersigned, hereby certify that I am the duly
qualified and acting Treasurer of the City of Otsego ("Lessee");
and, with respect to the Lease With Option to Purchase Agreement,
dated as of December 1, 1992 (the "Lease"), by and between Lessee
and the Economic Development Authority of the City of Otsego
("Lessor"), that I am well acquainted with the persons listed
below and with their signatures; that said persons hold the
respective offices or positions set forth opposite their
signatures below; that the signatures below written are true and
correct signatures of said persons; and that as of the date of
execution of the Lease, the Ground Lease referred to therein or
other documents relating thereto by any of said persons, such
persons were duly qualified and acting as the officers or
position holders indicated below and duly authorized to execute
the same.
Name Office or Position Signature
Norman F. Freske Mayor
Jerome Perrault City Clerk
Dated: December 1992.
CITY OF OTSEGO
Lessee
Its Treasurer
Subscribed and sworn to before me
this day of December, 1992.
Notary Public
(Notarial Seal
This
Certificate of
Lessee different from
in the text hereof.
z3o4�
Incumbency must be executed by an officer of
those persons whose signatures are listed
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, MINNESOTA
$450,000
PUBLIC PROJECT REVENUE BOND, SERIES 1992
(CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT)
CERTIFICATION OF CITY OF OTSEGO, MINNESOTA
The undersigned Mayor and Clerk of the City of Otsego,
Minnesota, a municipal corporation of the State of Minnesota (the
"City"), acting for the City, do hereby certify as follows:
1. Introduction. This Certificate relates to the
issuance and sale of the Economic Development Authority of the
City of Otsego's $450,000 Public Project Revenue Bond, Series
1992 (City of Otsego Lease With Option to Purchase Project) (the.
"Bond"). The proceeds of the Bond are being used to finance a
project (the "Project"), as defined in a Lease With Option to
Purchase Agreement dated December 1, 1992 executed by the
Economic Development Authority of the City of Otsego, Minnesota,
as lessor (the "Authority") to the City, as lessee (the "Lease").
The Authority has adopted a Revenue Bond Resolution on
December 14, 1992 to, among other things, secure the payment of
the Bond. The Bond has been purchased by The Bank of Elk River
(the "Purchaser"). Upon discharge of the Bond in accordance with
Article X of the Lease, the Authority will reconvey the real
property and the Project to the City.
2. Officials. The officials of the City. and their
terms of office are as follows.
Name
Norman F. Freske
Ronald Black
Larry Fournier
Doug Lindenfelser
Floyd Roden
Jerome Perrault
Elaine Beatty
James Barthel
Radzwill Law Office
Office
Mayor
Councilmember
Counci.lmember
Councilmember
Councilmember
Clerk
Deputy Clerk
Treasurer
Attorney
Term
Appointed
Appointed
Appointed
Appointed
Members of the City Council and the City officials listed in this
paragraph were the duly elected, qualified and acting members at
the time the resolution identified in paragraph 3 below was
adopted. r
230437
3. Resolution.' A resolution (the "Resolution")
authorizing the execution of the Lease was adopted at a meeting
of the City Council on December 14, 1992, is in full force and
effect as of the date hereof, and has not been rescinded,
modified or amended in any respect, and notice of the meeting was
duly given in accordance with law.
4. Execution and Delivery. In our official capacities
as the Mayor and Clerk, we have duly executed and delivered, on
behalf of the City, the Lease.
5. Authorizing Action. The City has authorized by all
necessary action the execution, delivery and due performance of
the Lease, and any and all such other agreements and documents as
may be required to be executed and delivered by the City in order
to carry out, give effect to and consummate the transaction
contemplated by the Lease, the Revenue Bond Resolution and the
Resolution.
6. Authority and Proceedings in Effect. None of the
authority and none of the proceedings or records which have been
certified to the Purchaser or to the attorneys approving the
Legality thereof has been in any manner modified, repealed,
revoked, rescinded, amended or changed, except as shown by the
proofs furnished.
7. No Contest. There areno proceedings, pending or
threatened, contemplating the liquidation or dissolution of the
City or threatening its existence, organization or boundaries nor
the rights of the present officers and members of the City
Council to their respective offices.
8. No Resulting Breaches. The consummation of the
transactions contemplated by the Lease and the Revenue Bond
Resolution and compliance by the City with the provisions thereof
and of the Bond will not result in any breach of any of the
terms, conditions or provisions of, or constitute a default
under, any indenture, contract, loan agreement or other
I
nstrument to which the City is a party or by which the City may
be bound, or result in any violation of any provision of law.
9. Performance of Agreements. The City is not and
upon execution of the Lease will not be in default in the
performance and observance of any of the terms or conditions of
the Lease on its part to be performed or observed.
1Q. No Default. The City is not in default in the
payment of principal of or interest on any of its indebtedness
for borrowed money and is not in default under any instruments or
230437
2
agreements under and subject to which any indebtedness for
borrowed money has been incurred, and no event has occurred and
is continuing under the provisions of any such instrument or
agreement which, with the lapse of time or the giving of notice,
or both, would constitute an event of default thereunder.
11. Pending Litigation. No controversy or litigation
is pending, or, to the knowledge of the undersigned, threatened,
to restrain or enjoin the payment, collection or application of
rentals and other moneys and securities pledged or to be pledged
under the Lease or the Revenue Bond Resolution or in any way
contesting or affecting any authority for or the validity of the
Bond, the Resolution, the Lease, the Revenue Bond Resolution or
the existence of powers of the City, and there are no proceedings
of any kind or nature pending, or to the knowledge of the
undersigned threatened, in any way contesting or affecting the
title of the members of the City Council to their respective
offices by or before any federal, state or local governmental or
administrative authority or agency. There is no litigation of
any nature now pending, or to our knowledge threatened, seeking
to restrain or enjoin the issuance, sale, execution or delivery
of the Bond or any of the documents described in the Resolution,
or questioning the authority or proceedings pursuant to which the
Bond is being issued, the validity of the Bond or any provision
made for the payment thereof.
12. No Conflict of Interest. To the best of our
knowledge after due inquiry, the adoption of the Resolution
identified in paragraph 3 above and the execution and delivery of
the Lease and any other agreements contemplated thereby will not
violate any existing law or ordinance relating to any conflict of
interest or other matters pertaining to the interest or
qualifications of the members of the City's governing body or its
officers.
230437
3
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands and the seal of the City this day of December,
19920
CITY OF OTSEGOI MINNESOTA
By
Mayor
By
Clerk
( SEAL )
Signature Page of CERTIFICATION OF THE CITY OF OTSEGO, MINNESOTA,
relating to .a $450,000 Public Project Revenue Bond, Series 1992
(City of Otsego Lease With Option to Purchase Project)
230437
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, MINNESOTA
$450,000 PUBLIC PROJECT REVENUE BOND,
SERIES 1992
(CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT)
CERTIFICATION OF THE
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGOI MINNESOTA
The undersigned President of the Board of Commissioners
and Secretary of the Economic Development Authority of the City
of Otsego, Minnesota, a public body corporate and politic and a
political subdivision duly organized and existing under the laws
of the State of Minnesota (the "Authority"), acting for the
Authority, do hereby certify and request as follows:
1. Introduction. This Certificate relates to the
Authority's issuance and sale of a $450,000 Public Project
Revenue Bond, Series 1992 (City of Otsego Lease With Option to
Purchase Project) (the "Bond"). The Bond is being purchased by
The Bank of Elk River (the "Purchaser"). The proceeds of the
Bond will be used to finance a project (the "Project"), as
defined in a Lease With Option to Purchase Agreement dated
December 1, 1992 executed by the Authority, as lessor to the City
of Otsego, Minnesota (the "City"), as lessee (the "Lease"). The
Authority has adopted a Revenue Bond Resolution on December 14,
1992 to, among other things, secure the payment of the Bond.
Upon payment or discharge of the Bond in accordance with Article
X of the Lease, the Project will be reconveyed to the City.
2. Officials. The officials of the Authority and
their terms of office are as follows:
Name
Office
President/Member
Vice President/
Member
Secretary/Member
Treasurer/Member
Term
Members of the Board of Commissioners and Authority officials
listed in this paragraph were the duly elected, qualified and
acting members at the time the resolution identified in paragraph
3 below were adopted.
230437
3. Revenue Bond Resolution. A resolution (the
"Resolution") authorizing the issuance of the Bond and the
execution of the Lease was adopted at a meeting of the Board of
Commissioners on December 14, 1992, is in full force and effect
as of the date hereof, and has not been rescinded, modified or
amended in any respect; and notice of the meeting was duly given
in accordance with law.
4. Execution and Delivery. In our official capacities
as the President and Secretary, we have duly executed, on behalf
of the Authority, the Bond in registered form (by our manual
signatures) as provided in the Resolution, for delivery on the
date hereof. In addition, we have executed and delivered on
behalf of the Authority, the Lease.
5. Authorizing Action. The Authority has authorized
by all necessary action, the execution, delivery and due perform-
ance of the Bond, the Lease and any and all such other agreements
and documents as may be required to be executed and delivered by
the Authority in order to carry out, give effect to and
consummate the transaction contemplated by the Bond, the Lease
and the Resolution.
6. Proceedinc{s. The Bond has been in all respects
duly executed for delivery pursuant to authority conferred upon
us as such officers; no other obligations have been issued
pursuant to such authority, and none of the authority and none of
the proceedings or records which have been certified to the
Purchaser or to the attorneys approving the legality thereof has
been in any manner modified, repealed, revoked, rescinded,
amended or changed, except as shown by the proofs furnished.
7. No litigation. There is no litigation of any
nature now pending, or to our knowledge threatened, seeking to
restrain or enjoin the issuance, sale, execution or delivery of
the Bond or any of the documents described in the Resolution, or
questioning the authority or proceedings pursuant to which the
Bond is being issued, the validity of the Bond -or any provision
made for the payment thereof, or the power of the Authority to
assist in financing the Project.
8. No Contest. Neither the existence, organization or
boundaries of the Authority nor the rights of the present
officials of the Authority to their respective offices is being
contested.
9. Performance of Agreements. All agreements to be
complied with and obligations to be performed by the Authority on
or prior to the date hereof under the Bond, the Resolution and
230437
2
the Lease have been complied with and performed on or prior to
the date hereof.
10. No Breaches. The consummation of the transactions
contemplated by the Resolution, the Bond and the Lease and
compliance by the Authority with the provisions thereof and of
the Bond will not result in any breach of any of the terms,
conditions or provision of, or constitute a default under, any
indenture, lease, loan agreement or other instrument to which the
Authority is a party or by which the Authority may be bound, or
result in the creation or imposition of any lien, charge or
encumbrance upon any properties or.assets of the Authority other
than the Project, or result in any violation of any provisions of
law.
11. No Default. The Authority is not, and upon the
issuance of the Bond will not be, in default in the performance
and observance of any of the terms or conditions of the Lease on
its part to be performed or observed, and all conditions
precedent provided in the Resolution or the Authority relating to
the issuance of the Bond have been complied with.
12. No Conflict of Interest. To the best of our
knowledge after due inquiry, the adoption of the resolution
identified in paragraph 3 above and the execution and delivery of
the Bond, the Resolution and the Lease and any other agreements
contemplated thereby will not violate any existing law or
ordinance relating to any conflict of interest or other matters
pertaining to the interest or qualifications of the members of
the Authority's governing body or its officers.
13. Financing Statements. The Authority is hereby
requested to cause financing statements
Uniform Commercial Code to be filed and
Secretary of State of Minnesota and the
County with respect to the assignment o
under the Lease.
230437
3
under
the Minnesota
continued with the
County Recorder of Wright
f the Authority's rights
IN WITNESS WHEREOF, the undersigned have hereunto set
their hands this day of December, 1992.
ECONOMIC DEVELOPMENT AUTHORITY
OF THE CITY OF OTSEGO, MINNESOTA
By
President
By
Secretary
Signature Page of CERTIFICATION AND
DEVELOPMENT AUTHORITY OF THE CITY O
to a $450,0-00 Public Project Revenue
Otsego Lease With Option to Purchase
230437
4
REQUEST OF THE ECONOMIC
F OTSEGO, MINNESOTA, relating
Bond, Series 1992 (City of
Project)
CERTIFICATE OF BOND REGISTRAR
ECONOMIC DEVELOPMENT AUTHORITY OF
THE CITY OF OTSEGO, MINNESOTA
$450,000 PUBLIC PROJECT REVENUE BOND, SERIES 1992
(CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT)
I, DO HEREBY CERTIFY, that I am the
dulI qualified and acting Secretary of the Economic Development
Authority of the City of Otsego, Minnesota, and as such official
DO HEREBY FURTHER CERTIFY as follows:
1. I am the official charged with the responsibility of
acting as Bond Registrar for, and registering the ownership and
transfer of, the $450,000 Public Project Revenue Bond, Series
1992 (City of Otsego Lease With Option to Purchase Project), of
the Economic Development Authority of the City of Otsego,
Minnesota.
2. On the date hereof I have registered said Bond delivered
this day.
3. Attached hereto is a true and correct copy of my Bond
Register for said Bond.
IN WITNESS WHEREOF I have set forth my hand this day of
December, 1992.
Secretary
230437
BOND REGISTER
$450,000 PUBLIC PROJECT REVENUE BOND, SERIES 1992
(CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT)
OF THE
ECONOMIC DEVELOPMENT AUTHORITY OF
THE CITY OF OTSEGO, MINNESOTA
This Bond Register is maintained for the above Issue by the
Secretary of the Economic Development Authority of the City of
Otsego, Minnesota, as Bond Registrar. The ownership of the Bond
of the above Issue and the interest accruing thereon is
registered on the books of the Economic Development Authority of
the City of Otsego, Minnesota, in the name of the holder noted
below. "Notations of Interest" may include cancellation, date of
cancellation, date of transfer, numbered bond replacing, amount
after partial prepayment, etc.
Maturity Principal Date of Name and Address of Signature of Notations
Date Amount Registration Registered Owner Secretary of Interest
The Bank of Elk River
630 Main Street
5450,000 12- -92* Elk River, MN 55330
Additional Notations:
*Date indicated was actual date of delivery.
230437
ECONOMIC DEVELOPMENT AUTHORITY OF
THE CITY OF OTSEGO, MINNESOTA
$450,000 PUBLIC PROJECT REVENUE BOND, SERIES 1992
(CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT)
CERTIFICATE OF PURCHASER
I, Pat Dwyer, being the duly qualified and acting
of The Bank of Elk River, Elk River,
Minnesota (the "Purchaser"), hereby certify and acknowledge that
on the date of this instrument I received from
the Treasurer of the Economic Development Authority of the City
of Otsego, Wright County, Minnesota (the "Authority") in the
total principal amount of $450,000, designated the $450,000
Public Project Revenue Bond, Series 1992 (City of Otsego Lease
With Option to Purchase Project) of the Authority (the "Bond").
The Purchaser will hold the Bond as its investment, and
is not offering the Bond to others for purchase in the reasonably
foreseeable future; hence, the Authority may rely on the $450,000
purchase price as the issue price of the Bond in calculating
yield for arbitrage purposes under Section 148 of the federal
Internal Revenue Code of 1986, as amended.
The Bond is payable from the City's Project Acquisition
Fund. The Purchaser hereby consents to the payment of the Bonds
from said fund.
WITNESS our hands this day of December, 1992,
THE BANK OF ELK RIVER
Its
230437
COUNTY AUDITOR'S CERTIFICATE
AS TO REGISTRATION
STATE OF MINNESOTA
COUNTY OF WRIGHT
I, the undersigned, being the duly qualified and acting
County Auditor of -Wright County, Minnesota (the "County"), DO
HEREBY CERTIFY that on the day of December, 1992, there was
filed in my office, a copy of the Revenue Bond Resolution,
adopted on December 14, 1992 by the Board of Commissioners of the
Economic Development Authority of the -City of Otsego, Minnesota
(the "Authority") authorizing the issuance of the $450,000 Public
Project Revenue Bond, Series 1992 (City of Otsego Lease With
Option to Purchase Project) and that said obligation has been
entered in the Bond Register of Wright County, Minnesota.
Witness my hand and the seal of the County Auditor this
day of December, 1992.
( SEAL)
230437
County Auditor
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO,
MINNESOTA
$450,000 PUBLIC PROJECT REVENUE BOND,
SERIES 1992
(CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT)
NONARBITRAGE CERTIFICATE
The undersigned are the duly qualified an3 acting
President of the Board of Commissioners, Secretary and Treasurer
of the Economic Development Authority of the City of Otsego,
Minnesota (the "Authority" or "Issuer"), charged, either alone or
with others, with the responsibility of issuing the Issuer's
$450,000 Public Project Revenue Bond, Series 1992 (City of Otsego
Lease With Option to Purchase Project), dated December 1, 1992,
as the date of original issue (the "Bonds"). This Certificate is
being executed in accordance with the income tax regulations
relating to arbitrage bonds (the "Regulations") and may be relied
upon as a certification under Section 1.103-13(a)-(2)(ii) of the
Regulations as modified by Section 148 of the Internal Revenue
Code of 1986, as amended (the "Code"). The undersigned, having
made an investigation of the facts, circumstances and estimates
pertaining.to and in connection with the Bond, hereby certify and
reasonably expect as follows with respect to the Bond:
1. Purpose. The proceeds of the Bond will be used to
finance the costs of construction and acquisition of a community
center, improvements and equipment therein (hereinafter referred
to as the "Project").
2. Proceeds and Uses. Th
for on the date of this Certificate;
costs of construction of the
and (iii) below);
(ii)
proceeds
Bond was delivered and paid
the estimated
interest
the Bond to be paid
and
the expenses anticipated to be
incurred in connection with the issuance of the Bond.
230437
J. Governmental Purposes; No Over -issuance. The
stated purposes of the Bond are governmental purposes within the
meaning of applicable law and regulations. Proceeds of the Bonds
in an amount equal to the face amount of the Bond (less the
amount of any issuance expenses), together with estimated
earnings thereon, will not exceed the estimated dollar cost of
constructing the Project less all other funds to be expended for
paying such costs.
4. Funds. The Bond is payable from the Project
Acquisition Fund (for the construction of the Project)
established in a Lease With Option to Purchase Agreement, dated
December 1, 1992 between the Issuer and the City of Otsego,
Minnesota (the "City") and the Bond Fund (for payment of debt
service on the Bond) established in the Revenue Bond Resolution
adopted by the Issuer on December 14, 1992W
5. P_ro?ect Acquisition Fund: Time Test; Due Diligence
Test; Expenditure Test.
(a) Costs of Construction and Issuance. The costs of
constructing the Project and issuing the Bond will be paid from
the Project Acquisition Fund.
(b) Time Test. Binding contracts or commitments for
constructing the Project obligating the expenditure of not less
than $ have heretofore been entered into or made or
will be entered into or made within six (6) months from the date
hereof. All such contracts are, or will be, binding obligations
of the Issuer.
(c) Due Diligence Test. The construction of the Project
has proceeded and will continue to proceed with due diligence to
completion, and the Project is estimated to be completed by
of 19.9_.
(d) Expenditure Test. Any contract or commitment for the
construction of the Project heretofore or hereafter executed has
provided or will provide for the construction of the Project in
Less than three (3) years from the date hereof; and proceeds of
the Bond in an amount equal to at least eighty-five percent (85%)
of the face amount of the Bond will be spent in paying the cost
of the construction of the Project within three (3) years from
the date hereof.
(e) Costs of Issuance, Transfer. The costs of issuing the
Bond will be incurred and paid within three (3) years from the
date hereof. Any moneys remaining in the Project Acquisition
230437
2
Fund after completion of the Project and payment of the costs of
issuing the Bond will be transferred to the Bond Fund.
(f) Investments. The Issuer shall not cause amounts in the
Project Acquisition Fund to be invested at a yield materially
higher than the yield on the Bond or in obligations exempt from
federal income taxation under Section 103(a) of the Code if and
to the extent moneys remain therein after the earlier of (i)
construction of the Project is complete or, (ii) three (3) years
from the date hereof.
6. Bond Fund: New Money Issue. For purposes of
Section 1.103-14(b)(12) of the Regulations, and based upon (1)
the estimated receipt of moneys which have been pledged to the
payment of debt service on the Bond, and (2) the estimated
investment earnings thereon, as much debt service on the Bond has
been scheduled for payment as is practicable in each year before
the first call date.
7. Bond Fund: Funding; Investment Covenants.
(a) The principal and interest on the Bond are payable from
the Bond Fund. Any sums from time to time held in the Project
Acquisition Fund and the Bond Fund (or any other fund of the
Issuer which will be used to pay debt service on the Bond in
excess of amounts which under then applicable federal arbitrage
regulations may be invested without regard to yield (after taking
into account all temporary periods) shall not be invested at a
yield in excess of the applicable yield restrictions imposed by
said arbitrage regulations on such investments. Besides the Bond
Fund, there is no other fund or account of cash or securities
which the Issuer has set aside and expects to invest or maintain
at a yield greater than the yield on the Bond for the purpose of
paying debt service on the Bond.
(b) The Bond Fund is both: (1) a bona fide debt service
fund (within the meaning of Section 1.103-13(b)(12) of the
Regulations) which achieves a proper matching of revenues and
debt service in each year and is depleted at least once a year
except for a reasonable carryover equal to the earnings in the
year or 1/12 of annual debt service, and (2) a sinking fund
(within the meaning of Section 1.103-13(g)(2) of the Regula-
tions). As a.result of the statements made in paragraph 6
hereof, all receipts in the Bond Fund may be invested for a
temporary period terminating on the earlier of the date ten (10)
years from the date hereof or on the first call date for the
Bond. After that date, (x) amounts deposited in the Bond Fund
which are to be used to pay debt service on the Bond within
thirteen (13) months of their receipt will be invested without
230437
3
regard to yield and (y) receipts in the Bond Fund which will not
be used to pay debt service on the Bond within thirteen (13)
months of their receipt will be invested without regard to yield
to the extent they do not exceed an amount equal to the lesser of
$100,000 or 5% of the issue price of the Bond. All receipts in
the Bond Fund may be invested without regard to yield for a
temporary period of thirty (30) days from receipt, and investment
earnings on such sums may be invested without regard to yield for
a longer temporary period of one (1) year from receipt. Amounts
not entitled to a temporary period or within said zinor portion
will not be invested at a yield materially higher than the yield
on the Bond, or will be invested without regard to yield in
obligations exempt from federal income taxation under Section
103(a) of the Code.
8. Not Disqualified Issuer. The Issuer has not been
notified of any listing or proposed listing of it by the Internal
Revenue Service as a disqualified issuer whose arbitrage
certificates may not be relied upon.
9. No Other Facts. To the best of the knowledge and
belief of the undersigned, there are no other facts, estimates or
circumstances which would materially change the -foregoing facts
and conclusions.
10. Yield Determination; Materially Higher. The
Issuer shall, for purposes of determining the yield on the Bond
and yields which are materially higher than such yield, make
calculations on the basis of the issue price of the Bond within
the meaning of Sections 1273 or 1274 of the Code. A "materially
higher" yield is understood to be one -eighth of one percent
(0.125%), in most circumstances.
11. Rebate. The Issuer is subject to the rebate
requirement imposed by Section 148(f) of the Code. The Issuer
shall pay to the United States rebates of excess investment
earnings in amounts at least equal to the amounts, and at times
no later than the times, required by Section 148(f) of the Code
and any regulations promulgated pursuant thereto. On the date
hereof, the yield of the Bond has been calculated to be
this yield on the Bond will be recalculated if and as required by
the Code or the Regulations. The Issuer will purchase
investments at fair market value. The Issuer shall make annual
determinations of the yield on the Bond and the yield on
investments within thirty (30) days after the end of each fifth
bond year and finally within sixty (60) days of the final payment
or redemption of the Bond, and shall maintain records thereof
until six (6) years after the retirement of the last of the Bond.
230437
0
L
12. Intentional Acts. The Issuer shall not inten-
tionally use any portion of the proceeds of the Bond directly or
indirectly to acquire higher yielding investments or to replace
funds which were used directly or indirectly to acquire higher
yielding investments except to the extent such investments would
not have caused the Bond to be arbitrage bonds if reasonably
expected on the date hereof.
13. Basis For Expectations. The facts and estimates
on which the foregoing expectations are based are the
documents included in the "Bond Transcript" prepared for the Bond
Closing, (b) all engineering and architectural estimates,
drawings, reports and plans and specifications heretofore
furnished the Issuer with respect to the Project, (c) all
contracts, if any, heretofore executed for the construction of
the Project, (d) all expenditures which were heretofore made by
the Issuer for the construction of the Project and which are to
be reimbursed out of the proceeds of the Bond, and (e) such other
facts and estimates, if any, as may be set forth in an Exhibit A
attached hereto.
14. Familiarity; Conclusion. We are generally
familiar with the requirements of the Regulations, and nothing
has been called to our attention to cause us to believe that the
proceeds of the Bond will be used in a manner which would cause
the Bond to be arbitrage bonds within the meaning of Section 148
of the Code.
230437
5
WITNESS our hands this
day of December, 1992.
ECONOMIC DEVELOPMENT AUTHORITY OF
THE CITY OF OTSEGO, MINNESOTA
President
Secretary
Treasurer
Signature Page of NONARBITRAGE CERTIFICATE, relating to a
$450,000 Public Project Revenue Bond, Series 1992 (City of Otsego
Lease With Option to Purchase Project)
230437
PUBLIC PROJECT
(CITY OF OTSEGO LEASE
ECONOMIC DEVELOPMENT
$450,000
REVENUE BOND, SERIES 1992
WITH OPTION TO PURCHASE PROJECT)
AUTHORITY OF THE CITY OF OTSEGO,
MINNESOTA
We have acted as bond counsel in connection with the
issuance by the Economic Development Authority of the City of
Otsego, Minnesota (the "Issuer"), of its $450,000 Public Project
Revenue Bond, Series 1992 (City of Otsego Lease With Option To
Purchase Project), bearing a date of original issue as of the
date hereof (the "Bond"). We have examined the law and such
certified proceedings and other documents as we deem necessary to
render this opinion.
We have not been engaged or undertaken to review the
accuracy, completeness or sufficiency of any offering material
relating to the Bond, and we express no opinion relating thereto.
As to questions of fact material -to our opinion, we
have relied upon the certified proceedings and other certifica-
tions of public officials furnished to us without undertaking to
verify the same by independent investigation.
230437
Based upon such examinations, and assuming the
authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us
as certified or photostatic copies and the authenticity of the
originals of such documents, and the accuracy of the statements
of fact contained in such documents, and based upon present
Minnesota and federal laws (which excludes any pending
legislation which may have a retroactive effect on or before the
date hereof), regulations, rulings and decisions, it is our
opinion that:
(1) IV show lawful authority for the issuance
of the Bond according to its terms under the Constitution and
Laws of the State of Minnesota now in force.
(2) The Bond is a valid and legally binding special
obligation# of the Issuer, enforceable in accordance with its
terms, payable as to principal and interest from and secured by a
valid and enforceable lien on the pledge of the revenues derived
from the Lease With Option to Purchase Agreement, dated as of
December 1, 1992 and executed by the City of Otsego, Minnesota
(the "City") and the Issuer (the "Lease"), and from certain other
revenues described in the Lease, all in the manner provided in
the Lease.
(3) The Lease has been duly and validly authorized by the
parties thereto, has been duly and validly executed and
delivered, and is a legally binding obligation of the parties
thereto, except as the enforceability of such obligations may be
limited by general principles of equity or by bankruptcy,
insolvency or other laws affecting creditor's rights generally.
The Lease is not a general obligation of the City, and the full
faith and credit and ad valorem taxing powers of the City are not
pledged to the payment of the rental payments under the Lease.
The Lease is subject to annual non -appropriation by the City in
which event the Lease is terminated and there is no obligation of
the City for future rental payments.
(4) At the time of the issuance and delivery of the Bond to
the original purchaser, the interest on the Bond is excluded from
gross income for United States income tax purposes and is
excluded, to the same extent, from both gross income and taxable
net income for State of Minnesota income tax purposes .(other than
Minnesota franchise taxes measured by income and imposed on
corporations and financial institutions), and is not an item of
tax preference for purposes of the federal alternative minimum
tax imposed --on individuals and corporations or the Minnesota
alternative minimum tax applicable to individuals, estates or
trusts; it should be noted, however, that for the purpose of
230437
computing the federal alternative minimum tax imposed on
corporations, such interest is taken into account in determining
adjusted current earnings. The opinions set forth in the
preceding sentence are subject to the condition that the Issuer
comply with all requirements of the Internal Revenue Code of
1986, as amended, that must be satisfied subsequent to the
issuance of the Bond in order that interest thereon be, or
continue to be, excluded from gross income for federal income tax
purposes and from both gross income and taxable net income for
State of Minnesota income tax purposes. Failure to comply with
certain of such requirements may cause the inclusion of interest
on the Bond in gross income and taxable net income retroactive to
the date of issuance of the Bond.
We express no opinion regarding other state or federal tax
consequences caused by the receipt or accrual of interest on the
Bond or arising with respect to ownership of the Bond.
Dated at Saint Paul, Minnesota, this day of December,
1992.
Professional Association
230437
[City Attorney Letterhead]
December 1992
City ofOtsego
City Hall
13474 95th Street Northeast
Otsego, MN 55330
Economic Development Authority
of the City of Otsego
Otsego City Hall
13474 95th Street Northeast
Otsego, MN 55330
Briggs and Morgan,
Professional Association
2200 First National Bank Bldg.
St, Paul, MN 55101
Re: $450,000 Economic Development Authority of the City of
Otsego, Minnesota Public Project Revenue Bond, Series
1992 (City of Otsego Lease With Option to Purchase
Project)
Ladies and Gentlemen:
I have acted as counsel to the Economic Development
Authority of the City of Otsego, Minnesota (the "Authority") and
the City of Otsego, Minnesota (the "City")_in connection with the
Authority's $450,000 Public Project Revenue Bond, Series 1992
(City of Otsego Lease With Option to Purchase Project) (the
"Bond"), the proceeds of which will be used to finance the costs
of construction and acquisition of a community center,
improvements and equipment thereon and related facilities (the
"Project"). I have examined the following.
1. Applicable resolutions, state statutes, policies, rules
ar:d regulations of the Authority and City;
230437
2. The resolution of the Authority relating to the Bond
adopted December 14, 19921
3. A resolution of the City, dated December 14, 1992
relating to the Lease described below;
4. The Lease With Option to Purchase Agreement (the
"Lease"), dated December 1, 1992, by and between the
Authority, as lessor, and the City, a municipal
corporation, as lessee; and
5. Such other documents and records as I have deemed
relevant and necessary as a basis for the opinion set
forth herein.
Based upon such examination and pertinent law of the State
of Minnesota, I am of the opinion that.
1. The Authority is a public body corporate and politic
and a political subdivision duly organized and existing
under the laws of the State of Minnesota, with full
power and authority to execute and deliver the Lease
and to carry out its terms.
2. The City is a statutory city and a political
subdivision duly organized and existing under the laws
of the State of Minnesota, with full power and
authority to execute and deliver the Lease and to carry
out its terms.
3. The Lease has been duly and validly executed and
delivered by the City and is in full force
as to the City and is a valid and binding instrument of
the City enforceable against the City in accordance
with its terms, except to the extent enforceability may
be limited by state and federal laws affecting remedies
and by bankruptcy, reorganization or other laws of
general application affecting the enforcement of
creditors' rights generally.
4. The Lease has been duly and validly executed .and
delivered by the Authority and is in full force and
effect as to the Authority and is a binding instrument
of the Authority enforceable against the Authority in
accordance with its terms, except to the extent
enforceability may be limited by state and federal laws
affecting remedies and by bankruptcy, reorganization or
other laws of general application affecting the
enforcement of creditors' rights generally.
230437
5. To the best of my knowledge, there are no legal or
governmental proceedings, pending or threatened, or any
basis therefor, wherein an unfavorable decision, ruling
or finding would have a material, adverse effect on the
validity or security of the Bond, the Lease or the
transaction contemplated -thereby.
6. No member of the Board of Commissioners and no officer
of the Authority has any personal financial interest,
direct or indirect, in the Bond, the Lease or in the
Project which creates or would create a conflict of
interest prohibited by Minnesota Statutes, Section
471.87.
7. All meetings of the City and the Authority with respect
to the Bond and the Project have been held in
compliance with the Minnesota Open Meeting Law,
Minnesota Statutes, Section 471.705,
We hereby consent to the use of ouz
our opinion in the opinion of Briggs and,
Association, of even date herewith, and
rendering its opinion Briggs and Morgan,
will rely upon our opinion.
230437
name and reference to
Morgan, Professional
we understand that in
Professional Association
Very truly yours,
City Attorney
m
TREASURER'S
RECEIPT FOR BOND PROCEEDS
I, IDO HEREBY CERTIFY that I am
the Treasurer of the Economic Development Authority of the City
of Otsego,.Minnesota, and that on the day of December, 1992,
I received from the purchaser thereof, the purchase price of a
$450,000 Economic Development Authority of the City of Otsego,
Minnesota, Public Project Revenue Bond, Series 1992 (City of
Otsego Lease With Option to Purchase Project), dated December 1,
1992, said purchase price being $450,000.
IN WITNESS WHEREOF I have executed this Receipt this
day of December, 1992.
ECONOMIC DEVELOPMENT
THE CITY OF OTSEGO,
Treasurer
230437
AUTHORITY OF
MINNESOTA
Fo•m U U Q U tl
► Under Section 149(e) Cf.',5 No :5=5-0723
(Fev. October icge)
► See separate Instructions Expires 5-31-92
�epa^.nen; of :bile'reasury (Use Form 8038-GC if 4.1ie -Is s-ue price is under 51000000)
rte•ra! Reven,e service
Reportin Authority Check box if Amended Return ►
2 Issuer's employer idenLfica:!on cumber
1 !ssuer's name
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, MN 41—
3 .'Dumber and street
OTSEGO CITY HALL — 13474 95th Street Northeast
5 Ct:y or tcwn, s:a:e, and ZIP code
Otsego, MN 55330
7 !.acme of Issue $ 450, 000 Public
(City of Otsego Lease with
,I Tvoe of Issue (check box(es
Pro
ject Revenue Bond, Series 1992
Option to Purchase Project)
I that applies and enter the Issue Price)
9 Check bcz if obligations are taxer other revenue anticipation bonds►► ❑
10 Check bcx if obligations are in the form of a lease or Instalin-eltt save ► ❑
11 ❑ Education, . . . . . . . . . . . . . . .
12 ElHea!th and hospital .
13 ❑ Transportation
14 ❑ Public safety
15 ❑ Environment (including sewage bonds)
16 ❑ Housing
17 ❑ Utilities
livil
18 ® Other. Describe (see Instructions) low community center
4 Fepe t number
G19 92 —
6 Ca:e of issue
8 CUSIP Number
N/A
Description of Obli ations
a c
�) O Staved reedemption
LRcturay date Ir;eres; rate Issue once price at maturityv z
19 Final maturity VR w, 42 , 000 42 , 000 Ei
20 Entire issue . . %//,�//'//%////%/�////�%��.,� 450,000 450,000
Uses of Ori inal Proceeds of Bond Issues (includingunderwriters' discount
21 Proceeds used for accrued interest . . . . . . . . . . . . . . . . .
22 Issue price of entire issue (enter line 20c) . . . . . . . . . . .
23 Proceeds used for bond issuance costs (including underwriters' discount) . 23
24 Proceeds used for credit enhancement . 24
25 Proceeds allocated to reasonably required reserve or replacement fund 25
26 Proceeds used to refund prior issues . 26
27 Total (add lines 23, 24, 25, and 26) .
28 Nonrefundin proceeds of the issue (subtract line 27 from line 22 and enter amount here
Description of Refunded Bonds (complete this part only for refunding bone
1'Jeighted
(e)
—0—
—0—
!slue price
450,000
Net interest
Yeld cost
21 —0—
22� 450f000
E�3
29 Enter the remaining weighted average maturity of the bonds to be refunded- . ► years
30 Enter the last date on which the refunded bonds will be called >
31 Enter the dates the refunded bonds were issued ►
• _ . Miscellaneous
32 Enter the amount of the state volume cap allocated to the issue ► —U
33 Enter the amount of the bonds designated by the issuer under section 265(bx3)(BXixlll) (small
issuer exception) Opp 450 , 000
34 Pooled financings:
a Enter the amount of the proceeds of this issue that are to be used to make loans to other governmental units ► —0—
b Check box if this issue is a loan made from the proceeds of another tax-exempt issue ► ❑ and enter the name of the
issuer ► and the date of the issue ►
Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief,
they are true, correct, and,complete.
Please
Sign
Here
Signature of officer
Treasurer
Daft Type or print name and title
For Paperwork Reduction Act Notice, see page 1 of the instructions. Form 8038•G (Rey, 1011189)
*U.S' Go•*z+r.nt hSntiwj officer 1)o1-1i2-151 /oo01f
STATE OF MINNESOTA UNIFORM COMMERCIAL CODE STANDARD FORM UCC-1
.FINANCING STATEMENT
city or Owego
• :.. City Hall
74 961th Street Northeast
• :.. Minnesota
1. The financing statement covers the following types (or items) of property:
•ption to Purchase Agreement. December
arty, as lessor.
X_ Additional sheets presented
Debtor is transmitting utility as defined in M.S. 336-9.105
X For Filing with the Secretary of State of Minnesota
For Filing with the County Recorder _County
_ For Filing in Uniform Commercial Code Records
Signatures) of Debtor(s): (Required in most cases -see instruction #5)
230437
STATE OF MINNESOTA UNIFORM COMMERCIAL CODE STANDARD FORM UCC-1
FINANCING STATEMENT
--
City Of Owego
• :.. City Hall
74 95th Street Northeast
• :.. Mtnrwsota 55330
1. The financing statement covers the following types (or items) of property:
ption to Purchase Agreement dated December 1, 19W, executed by the Debtor as lessee to the Secured
arty, as lessor.
X_ Additional sheets presented
_ Debtor is transmitting utility as defined in M.S. 336-9.105
For Filing with -the Secretary of State of Minnesota
X For Filing with the County Reorder Wright County
For Filing in Uniform Commercial Code Records
Assignee of Secured Part�r
230437
DESCRIPTION OF PROJECT AND LAND
• 11 • • 11 • : 1 11 • : • •
Northwest Quarter of Section1 Township 121, Range 23, Wright•
innesot&
230437
ARTICLE ONE - DEFINITIONS, EXHIBITS, LEGAL AUTHORIZATION
AND FINDINGS 1
1-1. Definitions 1
1-2. Exhibits 5
1-3. Legal Authorization 5
1-4. Findings . . . . . . . . . . . . . .- . . . . . 5
ARTICLE TWO - BOND 8
2-1. Authorized Amount and Form of Bond 8
2-2. Initial Issue 0 18
2-3 Execution . . . . . . . . . 18
2-4. Delivery of Initial Issue 19
2-5. Mutilated, Lost or Destroyed Bond 19
2-6. Ownership of Bond 20
2-7. Registration, Transfer and Exchange of Bond 20
2-8. Interest Rights Preserved, Dating of
Registered Bond 21
2-9. Other Revenue Bonds 21
ARTICLE THREE - REDEMPTION BEFORE MATURITY 22
3-1. Redemption . . . . . . . . . . . . . . . . 22
3-2. Notice of Redemption . 22
3-3. Cancellation . . & 23
ARTICLE FOUR - GENERAL COVENANTS 24
4-1. Payment of Principal and Interest . . . . . . . . 24
4-2. Performance of and Authority for Covenants . . 0 24
4-3. Title and Instruments of Further Assurance . . . . 24
4-4. Taxes, Assessments and Charges 25
4-5. Maintenance and Repair 25
4-6. Recording and Filing 25
4-7. Books and Records 25
4-8. Name of Bondholder 26
4-9. Nature of Security . . . . . . . . 26
4-10. Disposition of Pledged Funds 26
4-11. Enforcement of Covenants 27
4-12. Covenant to Lease, Sell and Operate 29
4-13. Acceleration . . . . . . . . . . 29
4-14. Tax Exempt Status of Bond . . . . 29
4-15. Conditions to Authority Action. . . . . . . 29
ARTICLE FIVE - FUNDS AND ACCOUNTS 31
5-l. Deposit of Bond Proceeds 31
5-2, Intentionally Omitted 31
5-3. Intentionally Omitted 31
Z30433
5-4. Intentionally Omitted 31
5-5. Intentionally Omitted 31
5 - 6 . Bond Fund . . . . 31
5-7. Intentionally Omitted 32
5-8. Intentionally Omitted. 32
5-9. Deposit of Funds with Paying Agent . . . 32
5-10. Application of Moneys . . . . . 0 32
ARTICLE SIX - POSSESSION, USE AND RELEASE OF PROPERTY 33
6-1. Possession and Use _ 33
6-2. Easement for Access or Utility Service 33
6-3. Release of Encumbered Equipment 33
6-4. Release of Unimproved Land 33
ARTICLE SEVEN - INVESTMENTS 35
7-1. Investments by AUTHORITY 35
7-2. Return on Investments 35
ARTICLE EIGHT - DISCHARGE OF OBLIGATIONS TO BONDHOLDER 36
8-1. Conditions of Discharge 36
8-2. Payment of Bond 0 0 36
ARTICLE NINE - SUPPLEMENTAL -AND AMENDATORY RESOLUTIONS 37
9-1. Supplemental and Amendatory Resolutions
Not Requiring Consent of Bondholder 37
9-2. Supplemental and Amendatory Resolutions
Requiring Consent of Bondholder 37
ARTICLE TEN -AMENDMENT TO LEASE 39
10-1. Amendments Without Bondholder Consent 39
10-2. Amendments Requiring Bondholder Consent 39
ARTICLE ELEVEN - MISCELLANEOUS 40
11-1. Consent of Bondholder 40
11-2. Severability 40
11-3. Authentication of Transcript 41
11-4. Limitation of Liability . . . . . 41
11-5. Registration of Bond Resolution 41
11-6. Approval of Lessee . . . . . 41
11-7. Authorization to Execute Lease
and Incidental Documents 41
SIGNATURES 42
EXHIBITS
230433
REVENUE BOND RESOLUTION
BE IT RESOLVED by the Economic Development Authority of
the City of Otsego:
ARTICLE ONE
DEFINITIONS, EXHIBITS, LEGAL AUTHORIZATION AND FINDINGS
1-1. Definitions.
The term used herein, unless the context hereof shall
require otherwise shall have the following meanings, and any
other terms defined in the Lease shall have the same meanings
when used herein as assigned to them in the Lease unless the
context or use thereof indicates another or different meaning or
intent.
Act: collectively the Issuer Powers Act and the Lessee
Powers Act as amended from time to time.
Authenticating Agent: the Paying Agent.
AUTHORITY: the Economic Development Authority of the City
of Otsego and any successor public entity.
Bond: the Public Project Revenue Bond, Series 1992 (City of
Otsego Lease Purchase Project).
Bond Closing: the date on which there is delivery of and
payment for the Bonds.
Bond Counsel: the firm of Briggs and Morgan, Professional
Association, of Saint Paul and Minneapolis, Minnesota, or any
other attorney designated by the AUTHORITY duly admitted to
practice law before the highest court of any state and nationally
recognized in the field of municipal finance, and any opinion of
Bond Counsel shall be a written opinion of such Counsel.
Bond Find: the Bond Fund created under Section 5-6 hereof.
Bond Register: the register maintained by the Bond
Registrar pursuant to Section 2-9.
Bond Registrar: the Secretary of the AUTHORITY and any duly
appointed successor Bond Registrar.
230433
Bondholder: any Holder of a Bond.
Business Day: any day other than a Saturday, Sunday, legal
holiday or a day on which banking institutions in the City were
the principal office of the Paying Agent is located are
authorized by law or executive order to close.
Condemnation: requisition or taking by governmental
authority or by a person, firm or corporation acting under
governmental authority and a conveyance made under -threat of
Condemnation provided such conveyance is made with the approval
of the AUTHORITY, which approval shall not be unreasonably
withheld, and Condemnation award shall include payment for
property taken or requisitioned or conveyed under threat of
Condemnation.
County Recorder: the County Recorder for Wright County.
Financial Journal: Northwestern Financial Review or any
other newspaper or journal devoted to financial news circulated
n the English language in Minneapoli
is and St. Paul, Minnesota.
Holder: the person in whose name the Bond is registered, as
shown on the Bond Register maintained by the Bond Registrar.
Independent: any person who is not a full time employee of
the AUTHORITY or the Lessee.
Independent Accountant: a certified public accountant or
firm of certified public accountants registered, Independent and
qualified to practice as such under the laws of Minnesota, and
not regularly employed by the AUTHORITY or the Lessee except to
perform independent audits of the books and records of either or
both of them or to make other similar periodic reviews.
Independent Counsel: an attorney or firm of attorneys
designated by the AUTHORITY, Independent and duly admitted to
practice law before the highest court of any state.
Independent Engineer:
architectural or engineering
Independent, and registered
profession under the laws of
Internal Revenue Code:
as amended.
an architect or engineer or
firm designated by the AUTHORITY,
and qualified to practice such
Minnesota.
the Internal Revenue Code of 1986,
Issuer Powers Act: Minnesota Statutes, Section 469 through
469.048 and 469.090 to 469.108, as from time to time amended.
230433
2
Lang: the parcel or parcels or other interests in real
estate described in Exhibit A to the Lease.
Lease: the Lease with Option to Purchase Agreement dated
December 1, 1992, whereby the AUTHORITY proposes to -lease, or
sublease as to the Land, the Project to the Lessee, a form of
which Lease is on file in the office of the AUTHORITY.
Lease Payments: rental payments payable to the AUTHORITY
under Section 5.1 of the Lease.
ssee: the City of Otsego, Minnesota, or any successor to
its functions.
Lessee Powers Act: Minnesota Statutes, Section 469.041 and
465.71, as from time to time amended.
Net Proceeds: with respect to any property insurance pay-
ment or Condemnation award, the amount remaining after deduction
of all expenses reasonably incurred by the AUTHORITY in the
collection thereof, including but not limited to attorneys' fees,
witness fees and any extraordinary expenses of the AUTHORITY.
Net Revenues:- all sums realized from the operation of all
or any part of the Project by the AUTHORITY after deducting all
necessary reasonable current costs of operation of the Project
incurred by the AUTHORITY determined in accordance with accepted
accounting practice, including, but without limitation,
administrative expenses incurred solely with respect to the
operation of the Project, current maintenance and repairs
necessary to maintain the Project in adequate repair and
operating condition; labor and the cost of material and supplies
necessarily used for such current operation, maintenance and
repairs, insurance of the premises against risks and in amounts
for which insurance is usually carried by prudent owners of like
properties, including but not limited to insurance required by
the Lease, insurance of the AUTHORITY and its officers and
employees against liability for damage to persons and property
incurred in connection with such operation, in amounts such as
are usually carried by prudent operators of similar enterprises,
or in lesser amounts to which AUTHORITY`s liability may be
limited by law; and charges for the accumulation of appropriate
reserves for the payment of operating costs which recur
periodically but in varying amounts. The operating costs of the
Project shall also include the cost of any renewal, replacement
or improvement of or additions to capital assets incurred by the
AUTHORITY to facilitate the lease, sale or other disposition of
the Project after any termination of the Lease. The operating
costs of the Project shall not, however, include any allowance of
230433
3
payment for depreciation; any portion of the salary or wages paid
to any officer or employee of the AUTHORITY, except such portion
as represents reasonable compensation for the performance of
duties necessary exclusively for the operation of such Project,
and not for other operations of the AUTHORITY, or any liability
incurred by the AUTHORITY or any officer or employee for damage
to persons or property, in excess of the amount of such liability
compensated by insurance. The Net Revenues from the operation of
the Project constitute all of the revenues from time to time
received from the operation of the Project, including any
improvements thereto, in excess of said operating costs incurred
and payable or to become payable within one month and any
reasonable reserve therefor. In addition Net Revenues shall
include all sums realized from the sale of all or any part of the
Project after deducting all necessary reasonable costs of the
sale incurred by the AUTHORITY.
Outstandinct: used as any particular time with reference to
the Bond, means all bonds theretofore executed and delivered by
the AUTHORITY under this Resolution except: (i) bonds
theretofore canceled by the AUTHORITY or surrendered to the
AUTHORITY for cancellation; (ii) bonds fully paid or otherwise
discharged under Article Eight hereof, and (iii) bonds in lieu of
or in substitution for which other bonds shall have been executed
and delivered by the AUTHORITY pursuant to the terms of Section
2-6 of the Resolution pertaining to replacement of bonds.
Paying Agent: the Secretary of the AUTHORITY, or any other
bank designated pursuant to this Resolution as the agent of the
AUTHORITY to receive and disburse the principal and interest on
the Bond.
Proiect Acquisition Fund: the Project Acquisition Fund
described in Section 5-1.
Purchaser: The Bank of Elk River, in Elk River, Minnesota.
�tepresentative: the President of the AUTHORITY or the Mayor
of the Lessee, or any other person at any time designated to act
on behalf of the AUTHORITY or the Lessee as the case may be, as
evidenced by a written certificate furnished to the other party
containing a specimen signature of such person and signed for the
AUTHORITY by its President or for the Lessee by its Mayor.
Resolution: this resolution of the AUTHORITY. All
references in this Resolution to designated "Articles," "Sec-
tions" and other subdivisions are to the designated Articles,
Sections and subdivisions of this instrument as originally
executed. The words "herein," "hereof" and "hereunder" and other
230433
4
words of similar import refer to this Resolution as a whole not
to any particular Article, Section or subdivision.
1-2. Exhibits.
The following Exhibits are attached to and by reference
made a part of this Resolution.
(1) Exhibit A: legal description of the Land, and
(2) Exhibit Bo.description of equipment to be included in
the Project.
1-3. Legal Authorization.
The AUTHORITY is a body corporate and politic organized
and existing under the Issuer Power Act, and is authorized under
said laws to initiate the Project herein referred to, and to
issue and sell bonds for that purpose in the manner and upon the
terms and conditions set forth in the Issuer Power Act, and in
this Resolution.
1-4 . Findincts .
The AUTHORITY has heretofore determined, and does
hereby determine, as follows:
(1) the AUTHORITY is authorized by the Issuer Powers Act to
acquire the Land for the public purposes expressed in the Issues
Powers Act, provided for installation and construction of the
Project Equipment and Improvements therefor and to lease, or as
for the Land sublease, the Project upon the terms set forth
thereon.
(2) the AUTHORITY has made the necessary arrangements with
- the Lessee, for the establishment within the City of Otsego,
Minnesota of a Project consisting of property to be used as a
community center, all as more fully described in the Lease and
which will be of the character and accomplish the purposes
provided by the Issuer Powers Act; and the AUTHORITY has by this
Resolution authorized the Project and execution of the Lease,
specifying the terms and conditions of the acquisition,
installation, improvement and construction of the Project and of
the leasing or, as for the Land, subleasing of the same to the
Lessee,
(3) in authorizing the Project the AUTHORITY's purpose is,
and in its judgment the effect thereof will be, to promote the
public welfare by providing publicly owned facilities required
230433
5
for governmental services needed for: the attraction,
encouragement and development of economically sound industry so
as to prevent, so far as possible, the emergence of blighted and
marginal lands and areas of chronic unemployment, the development
of industry to use the available resources of the community in
order to retain the benefit of the community's existing invest-
ment in educational and public service facilities and to halt the
movement of talented, educated personnel of mature age to other
areas, thus preserving the economic and human resources needed as
a base for providing governmental services and facilities; the
provision of accessible employment opportunities for residents in
the area; and the expansion of an adequate tax base of the City
of Otsego to finance the increase in the amount and cost of
governmental services, including educational services for the
School District of the City,
(4) the amount estimated to be necessary to finance the
Cost of the Project will require the issuance, sale and.delivery
of the Bond in the aggregate principal amount of $450,000 as
hereinafter provided,
(5) it is desirable, feasible and consistent with the
objects and purposes of the Issuer Powers Act to issue the Bond,
for the purpose of acquiring, constructing, improving and
installing the Project;
_ (6) the Bond and the interest thereon do not constitute an
indebtedness of the AUTHORITY or the City of Otsego within the
meaning of any constitutional or statutory limitation and do not
constitute or give rise to a pecuniary liability or a charge
against the general credit or taxing powers of the AUTHORITY or
the City and neither the faith and credit nor the taxing powers
of the AUTHORITY or the City is pledged for the payment of the
Bond or interest thereon, and
230433
6
(7) the Purchaser has offered to purchase said Bond at a
purchase price of $450,000 in accordance with the terms and
conditions of this Resolution.
230433
7
ARTICLE TWO
2-l. Authorized Amount and Form of Bond.
The Bond issued pursuant to this Resolution shall be in
substantially the form set forth herein, with such appropriate
variations, omissions and insertions as are permitted or required
by this Resolution, and in accordance with the further provisions
of this Article, and the total principal amount of the Bond that
may be outstanding hereunder is expressly limited to $450,000
unless a duplicate Bond is issued pursuant to Section 2-5. Said
Bond shall be in substantially the following form:
230433
8
[FORM OF BOND]
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF WRIGHT
ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO
$450,000
Public Project Revenue Bond, Series 1992
(City of Otsego Lease With Option to Purchase Project)
The ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO a
public body corporate and politic and a political subdivision in
the County of Wright and State of Minnesota (the "Authority"),
for value received, hereby promises to pay, but only from its
3eries-1992 Public Project Revenue Bond Fund (the "Bond Fund"),
to The Bank of Elk River or registered assigns, the principal sum
of FOUR HUNDRED FIFTY THOUSAND DOLLARS ($450,000) on the 1st day
of December in the years and amounts as follows:
Year Amount Year Amount
1993 $22,000 2001 $26,000
1994 22,000 2002 2611
1995 22,000 2003 42,000
1996 22,000 2004 42,000
1997 22,000 2005 42,000
1998 26,000 2006 42,000
1999 26,000 2007 42,000
2000 26,000
upon the presentation and surrender hereof, and to pay to the
registered owner hereof interest on such principal sum from time
to time remaining unpaid, from such Bond Fund at the rate of 6%
on the basis of the actual number of days elapsed in a year of
365 or 366 days, as applicable, from the date hereof, or the most
recent interest payment date to which interest has been paid or
duly provided for, as specified below, commencing on June 1, 1993
and semiannually thereafter on June 1 and December 1 of each year
until said principal sum is paid, provided that the interest rate
shall be adjusted on December 1, 1998 and December 1, 2003s The
interest rate shall be adjusted on these dates to a rate equal to
230433
9
3% above the Discount Rate currently in effect but not to exceed
1% above the interest rate on the Bond currently in effect.
"Discount Rate" means the rate published as the federal discount
rate in the Federal Reserve Bulletin published monthly by the
Federal Reserve Bank Board of Governors. Principal and interest
are payable in lawful money of the United States of America at
the office of the Secretary of the Authority, as Paying Agent and
Bond Register or any successor named pursuant to the terms of the
Bond Resolution hereinafter described. Interest shall be paid on
each June 1 and December 1 interest payment date by check or
draft mailed to the person in whose name this Bond is registered
at the close of business on the preceding May 15 and November 15
(whether or not a business day) at the address set forth on the
registration books maintained by the Bond Registrar. Any such
interest not punctually paid or provided for will cease to be
payable on such regular record dates and such defaulted interest
may be paid to the person in whose name this Bond shall be
registered at the close of business on a special record date for
the payment of such defaulted interest established by the
Authority pursuant to the Bond Resolution.
This Bond is issued in accordance with an authorizing
resolution (the "Bond Resolution") duly adopted by the Authority,
setting forth the terms upon which such Bond is issued and
describing the security therefor, to which Bond Resolution
reference is made for a full description of such terms, condi-
tions and security. The Bond is issued by the Authority for the
- purpose of financing a project (the "Project") consisting of the
construction and acquisition of a building or buildings, improve-
ments and equipment thereon (hereinafter called Project) pursuant
to Minnesota Statutes, Sections 469.001 through 469.048 and
469.090 through 469.108 including the payment of all expenses
incidental thereto, and the leasing of the Project under the
provisions of a Lease With Option to Purchase Agreement (the
"Lease") between the Authority and the City of Otsego (the
"Lessee"), dated December 1, 1992.
The Bond is secured by the Bond Resolution, and reference is
made to the Lease and Bond Resolution and amendments thereof for
a description of the revenues pledged to secure the payment of
the Bond, the nature and extent of the security thereby created,
the rights of the registered owner of the Bond, the rights,
duties, immunities and obligations of the Authority and the
rights, duties and obligations of the Lessee. The obligation of
the Lessee under the Lease to make Lease Payments sufficient to
pay the principal of and interest on the Bond when due is a
binding and enforceable obligation of the Lessee, but is subject
to a right to terminate the Lease at the end of any fiscal year
during its term, as more fully provided in the Lease.
230433
10
The entire principal amount of the Bond remaining unpaid, or
such lesser portion thereof as the Authority may determine upon,
is subject to redemption and prepayment in integral multiples of
$1,000, at the option of the Authority acting at the direction of
the Lessor, on any date at a redemption price equal to par plus
accrued interest. If (a) all or.any part of the Project is lost,
stolen, condemned, destroyed or damaged beyond repair, (b) Lessee
fails to notify the Authority of which course of action Lessee
plans to take as required under Section 6-6 of the Lease and (c)
Lessee pays to the Authority a sum equal to the Casualty Value of
the Project under Section 6.6 of the Lease, on the first day of
the month next succeeding such payment before which month timely
notice of redemption can be given under Section 3-2 of the Bond
Resolution, all installments of principal on the Bond shall be
called for and are subject to redemption and prepayment in whole
and not in part, at a redemption price equal to par plus accrued
interest. If an Event of Default should occur and subsist under
the Lease or if the Lease should be terminated on account of a
Non -appropriation pursuant to Section 4.1 of the Lease, all
installments of principal on the Bond then outstanding may, at
the option of the Authority, become or be declared due and
payable before the stated maturity thereof, together with
interest accrued thereon, all as provided in the Bond Resolution.
Prior to the date on which any installments of
principal on.the Bond are directed by the Authority to be
redeemed in advance of maturity, the Authority will cause notice
of the call thereof for redemption identifying the installments
of principal on the Bond to be redeemed to be mailed to the
Paying Agent and the Bondholder, at the address shown on the Bond
Register. All installments of principal on the Bond so called
for redemption will cease to bear interest on the specified
redemption date, provided funds for their redemption have been
duly deposited.
This Bond is issued pursuant to and in full compliance
with the Constitution and laws of the State of Minnesota, and
pursuant to the Bond Resolution adopted and approved by the
Authority, which resolutions authorized the Project and the
issuance of the Bond as a special obligation payable solely from
revenues derived by the Authority from the Project. Lease
Payments are to be paid to the Authority and credited to the Bond
Fund as a special trust fund account created by the Authority and
have been and are hereby pledged for that purpose. The Bond does
not constitute an indebtedness of the Authority or the Lessee
within the meaning of any constitutional provision or statutory
limitation and does not constitute nor give rise to a pecuniary
liability or moral obligation of the Authority or the Lessee or,
to the extent permitted by law, any of their respective officers,
230433
11
employees and agents, nor a charge against their general credit
or taxing powers of the Authority or the Lessee; and neither the
full faith and credit nor the taxing powers of the Authority or
the Lessee is pledged for the payment of the Bond or interest
thereon.
This Bond has been designated by the Issuer as a
"qualified tax-exempt obligation" for purposes of Section 265(b)
(3) of the Internal Revenue Code of 1986, as amended.
The holder of this Bond issued under the Bond Resolu-
tion shall have the right to institute any proceedings, judicial
or otherwise, for the enforcement of the covenants therein con-
tained, and may enforce the performance of all covenants and
duties of the Authority and its officials as set forth in the
Bond Resolution, including, but not limited to, the collection
and proper segregation and application of all funds described in
the Bond Resolution.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that the
Authority has duly created said Bond Fund and has pledged and
appropriated thereto certain rentals from the Project referred to
in said Lease; that it will promptly give all notices and do all
other acts and things required under the terms of said Lease for
the performance of its obligations and for the enforcement of all
obligations of the.Lessee and for the collection of all rentals
when due; that this Bond is secured by a pledge of and first lien
- upon said rentals -from said Project as more fully provided in the
Bond Resolution authorizing this Bond and the Lease, and no addi-
tional revenue bonds or other obligations will be issued and made
payable from such rentals and Net Revenues on a parity herewith
except as specifically provided in the aforesaid resolution; 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 Bond a valid and
binding special obligation of the Authority according to its
terms have been done, do exist, have happened and have been
performed in regular and due form, time and manner as so
required, and that the issuance of this Bond does not cause the
special or general indebtedness of the Authority to exceed any
constitutional or statutory limitation.
IN WITNESS WHEREOF, the Economic Development Authority
of the City of Otsego has caused this Bond to be executed in its
behalf by the manual signatures of its President and Secretary,
the seal of the Authority having been intentionally omitted as
230433
12
permitted by law and has caused this Bond to be dated as of
December _, 19920
President
230433
13
Secretary
CERTIFICATE OF REGISTRATION
The transfer of ownership of the principal amount of the
within Bond may be made only by the registered owner or his, her
or its legal representative last noted below.
DATE OF SIGNATURE OF
REGISTRATION REGISTERED OWNER BOND REGISTRAR
The Bank of Elk River
670 Main Street
December 1992 Elk River, MN 55330
230433
14
REGISTER OF PARTIAL PAYMENTS
The principal amount of the attached Bond has been prepaid on the
dates and in the amounts noted below:
Date
Amount
Signature of
Bondholder
Signature of
Bond Registrar
If a notation is made on this register, such notation has the
effect stated in the attached Bond. Partial payments do not
requi
re re the presentation of the attached Bond to the Bond
Registrar, and a Holder could fail to note the partial payment
here.
230433
15
The following abbreviations, when used in the
inscription on the face of this Bond, shall be construed as
though they were written out in full according to applicable laws
or regulations:
TEN COM - as tenants in common
TEN ENT - as tenants by entireties
JT TEN
230433
- as joint tenants with right of survivorship
and not as tenants in common
(Gust)
under the
as Custodian for
(Minor)
Uniform
(State)
Transfers to Minors Act
16
FOR VALUE RECEIVED,
("Transferor"), the undersigned, hereby sells, assigns and
transfers unto Social Security or Federal Employer
Identification No. ). The within Bond and
all rights thereunder, and hereby irrevocably constitute and
appoints ("Transferee") as attorney to transfer the within Bond
on the books kept for registration thereof, with full power of
substitution in the premises, provided, however, that if any
default with respect to the Bond shall have occurred to or to the
date of this transfer, the within Bond shall not be registered
and the Transferee shall be entitled to receive payment with
respect to the within Bond upon presentation thereof as assignee
of the Transferor.
Date.
NOTICE: No transfer will be
registered and no new Bond
will be issued in the name of
the Transferee, unless the
signature(s) to this assign-
ment correspond(s) with the
name(s) as it (they) appear(s)
Signature Guaranteed: upon the face of the within
Bond in every particular,
without alteration or
enlargement of any change
NOTICE: Signature(s) whatever and the Social
must be guaranteed by Security or Federal Employer
a member firm of the Identification numbers of the
New York Stock Exchange settlor and beneficiaries of
or a commercial bank or a the trust, the date of the
trust company. trust, the date of the trust
and the name of the trustee
should be supplied.
730433
17
2-2. Initial Issue.
The Bond initially issued, in the aggregate principal
amount of $450,000, shall be dated as of the date of delivery, as
the original issue date and shall mature on December 1 in the
years and amounts set forth below, with installments of principal
on the Bond maturing in such years and amounts bearing interest
from the original issue date until paid or discharged as herein
at the rate set forth in the form of Bond computed on the basis
of the actual number of days elapsed in a year of 365 or 366
days, as applicable:
Year Amount ear. Amount
1993 $22,000 2001 $26,000
1994 22,000 2002 26,000
1995 22,000 2003 42,000
1996 22,000 2003 42,000
1997 22,000 2004 42,000
1998 26,000 2005 42,000
1999 26,000 2006 42,000
2000 26,000
The installments of principal on the Bond shall be
subject to�redemption and prior payment at the times and prices
and in the amounts and manner provided in Article Three. The
interest on the Bond shall be payable on June 1, 1993, and
semiannually thereafter on each June 1 and December 1 until the
Bond is fully paid or discharged. Both principal and interest
shall be payable by check or draft mailed to the Holder of the
Bond by the Bond Registrar at the last address thereof as shown
on the Bond Register on the 15th day of the calendar month next
preceding said interest payment date (whether or not a Business
Day), or, if on any interest payment date there are insufficient
funds to pay in full the interest then due on the Bond, to the
Holder as of a special record date established by the AUTHORITY.
2-3 Execution.
The Bond shall be executed on behalf of the AUTHORITY
by the manual signature of the President of the AUTHORITY and by
the manual signature of the Secretary of the AUTHORITY. In the
event of the disability or resignation or other absence of either
such officer, the Bond may be signed by the manual signature of
that officer who under the bylaws of the AUTHORITY may act in
behalf of such absent or disabled officer. The Bond may be
sealed with the seal of the AUTHORITY; provided that the seal of
the AUTHORITY may be a printed facsimile and provided further
that the seal may be omitted. In case any officer whose
230433
18
signature shall appear on the Bond shall cease to be such officer
before delivery of the Bond, such signature shall nevertheless be
valid and sufficient for all purposes, the same as if he had
remained in office until delivery.
2-4. Delivery of Initial Issue.
Before delivery of the Bond of this issue there shall
be filed with the Secretary of the AUTHORITY the following items:
(1) an original of the Lease of which shall be fully
executed;
(2) the opinion of counsel for the Lessee as prescribed by
Bond Counsel;
(3) the manually signed opinion of Bond Counsel relating to
the legality and tax exempt status of the Bond issued pursuant to
this Res-olution;
(4) such other documents and opinions as Bond Counsel may
reasonably require for purposes of rendering its opinion required
in subsection (5) above,
provided, however, that the President or Secretary of the
AUTHORITY, with the consent of Bond Counsel, may waive the
requirement that one or more of the foregoing items (except the
item required in clause (3) above) be filed on or before Bond
Closing upon the AUTHORITY receiving adequate assurances that
such item or items will be filed with the Secretary as soon as
practicable following delivery of the Bond.
2-5. Mutilated, Lost or Destroyed Bond.
Zn case the Bond issued hereunder shall become
mutilated or be destroyed or lost, the AUTHORITY shall, if not
then prohibited by law, cause to be executed and delivered, a new
Bond of like amount, number, maturity date and tenor in exchange
and substitution for and upon cancellation of such mutilated Bond
if any, or in lieu of and in substitution for such Bond, if any,
destroyed or lost upon the Holder's or owner paying the
reasonable expenses and charges of the AUTHORITY in connection
therewith, and in case of a Bond destroyed or lost, the filing
with the AUTHORITY of evidence satisfactory to the AUTHORITY that
such Bond was destroyed or lost, and of the ownership thereof,
and furnishing the AUTHORITY with indemnity satisfactory to it.
230433
19
2-6. Ownership of Bond.
The AUTHORITY and Paying Agent may deem and treat the
Holder of the Bond whether or not such Bond shall be overdue, as
the absolute owner of such Bond for the purpose of receiving
payment thereof and for all other purposes whatsoever, and the
AUTHORITY shall not be affected by any notice to the contrary.
2-7. Reclistration, Transfer and Exchancte of Bond.
(1) The AUTHORITY will cause to be kept at the
rinci ppal corporate trust office of the Bond Registrar a Bond
Register in -which, subject to such reasonable regulations as the
Bond Registrar may prescribe, the AUTHORITY shall provide for the
registration of transfers of the Bond entitled to be registered
or transferred as herein provided.
(2) Upon surrender for transfer of the Bond at the
principal corporate trust office of the Bond Registrar, the
AUTHORITY shall execute and deliver, in the name of the
designated transferee, a new Bond of like aggregate principal
amount, having the same stated maturity and interest rate, as
requested by the transferor.
(3) The Bond surrendered -upon any transfer provided
for in this Bond Resolution shall be promptly canceled by the
Bond Registrar and thereafter disposed of a directed by the
AUTHORITY.
(4) The Bond delivered in exchange for or upon
transfer shall be a valid special obligation of the AUTHORITY
evidencing the same debt, and entitled to the same benefits under
this Bond Resolution, as the Bond surrendered for such exchange
or transfer.
(5) The Bond presented or surrendered for transfer
shall (if so required by the AUTHORITY) be duly endorsed or be
accompanied by a written instrument of transfer, in form
satisfactory to the AUTHORITY and the Bond Registrar, duly
executed by the Holder thereof or his attorney duly authorized in
writing.
(6) No service charge shall be made to the Holder for
any transfer, but the AUTHORITY may require payment of a sum
sufficient to cover any tax or other governmental charge that may
be imposed in connection with any transfer or exchange of the
Bond, other than exchanges expressly provided in this Bond
Resolution to be made without expense or without charge to
Bondholder, and the cost of printing a new Bond.
230433
20
(7) The AUTHORITY and the Bond Registrar shall not be
required (i) to transfer or exchange the Bond for a period of 15
days next preceding any interest payment date, or (ii) to
transfer or exchange any installment of principal on the Bond
called or being called for redemption in whole or in part.
2-8. Interest Rights Preserved; Datinct of
Registered Bond.
The Bond delivered upon transfer of another Bond shall
carry all the rights to interest accrued and unpaid, and to
accrue, which were carried by such other Bond, and such Bond
shall be so dated, that neither gain nor loss in interest shall
result from such transfer.
The Bond shall be dated by the Bond Registrar as of the
last interest payment date preceding the date of execution to
which the Bond has been paid or made available for payment,
unless the date of execution is an interest payment date to which
interest has been paid or made available for payment, in which
case the Bond shall be dated as of the date of execution.
2-9. Other Revenue Bonds.
Nothing contained herein shall however prevent the
issuance by the AUTHORITY at the request of the Lessee of other
bonds without consent of the Bondholder for any of the purposes
authorized under the Act, including any improvement to the
Project, payable from revenues furnished by the Lessee but not
pledged and appropriated to the Bond Fund whether or not the
obligation of the Lessee to make such payments is secured by
tangible property or other collateral (except for the Project and
revenues derived by the AUTHORITY therefrom under the Bond
Resolution), so long as such other bonds are in no way secured by
any of the provisions of the Bond Resolution and an effect
thereof would not be to subject the interest payable on the Bond
to federal or state income taxes.
230433
21
ARTICLE THREE
REDEMPTION BEFORE MATURITY
3-1. .Redemption.
(1) Optional Redemption. The entire principal on the Bond
remaining unpaid, or such lesser portion thereof as the AUTHORITY
may determine upon, is subject to redemption and prepayment, in
integral multiples of $1,000, at the option of the 7AUTHORITY
acting at the direction of the AUTHORITY, on any date at a
redemption price equal to par plus accrued interest thereon to -
the redemption date.
(2) Extraordinary Redemption. If (a) all or any part of
the Project is lost, stolen, condemned, destroyed or damaged
beyond repair, (b) Lessee fails to notify the AUTHORITY of which
course of action Lessee plans to take as required under Section
6-6 of the Lease and (c).Lessee pays to the AUTHORITY a sum equal
to the Casualty Value of the Project under Section 6.6 of the
Lease, on the first day of the month next succeeding such payment
before which month timely notice of redemption can be given under
Section 3-1 hereof, all installments of principal on the Bond
shall be called for and are subject to redemption and prepayment
in a whole and not in part, at a redemption price equal to par
plus accrued interest thereon to the redemption date.
(3) .Except as provided in this SectionSection
the installments of principal on the Bond shall not be subject to
redemption prior to their stated maturity date.
3-2. Notice of Redemption.
Notice of the call for any redemption pursuant to Sec-
tion 3-1 shall be mailed by the AUTHORITY but at the expense of
the Lessee, at least 30 days but not more than 60 days prior to
the redemption date, to the Paying Agent and to the Bondholder,
at the address shown on the Bond Register. The notice shall
refer to the Bond to be redeemed by the date on which and the
place where it shall be presented for redemption. On or before
the date fixed for redemption, funds sufficient to redeem such
installments of principal on the Bond, including accrued interest
thereon to the redemption date, shall be deposited with the
Paying Agent. The installments of principal on the Bond thus
called shall not, on or after the specified redemption date, bear
interest.
230433
22