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1992 EDALAW OFFICES B]RIGGS AND MOPGAN PROFESSIONAL ASSOCIATION W1?ITEA�S DI$ECT DZAL NUMHEA (612) 223-6628 EXPRESS MAIL Stanley Ellison Radzwill Law Office 705 Central Avenue East P.O. Box 369 St. Michael, MN 55376 2200 FIRST NATIONAL BANII BUILDING SAINT PAULA MINNESOTA 66101 TELEPHONE (012) 223 - 6600 FACSIMILE (612) 223 - 6460 December 29, 1992 MINNEAPOLIS OFFICE 2400 I D S CENTER h1INNEAPOLIS� MINNESOTA 55402 TELEPHONE (012) 334-8400 FACSIMILE (012) 034-8650 RE: Economic Development Authority of the City of Otsego, Minnesota - $450,000 Public Project Revenue Bond, Series 1993 (City of Otsego Lease with Option to Purchase Project) Dear Stan: Enclosed pursuant to our conversation of today, at your request and at the direction of Mary Ippel of this office in connection with the above referenced matter please find a copy of the revised operative and closing documents. Also enclosed please find multiple signature pages to each document for execution by the appropriate individual, sealed where indicated and notarized where applicable. Please do not date any of the documents as they are to be dated as of the date of closing. I trust this will be sufficient for your purposes and please do not hesitate to call either Mary or me should you have any questions or comments regarding this matter. Very truly yours, � e Todd J. Iageri Paralegal TJH:kmi LAW OFFICES BRIGGS AND MORGAN PROFESSIONAL ASSOCIATION 2200 FIRST NATIONAL BAND BUILIIINO SAINT PAULA MINNESOTA 66101 WAITER'S DIRECT DIAL NUMBER (612) 223-6628 VIA CERTIFIED MAIL Stanley A. Ellison RADZWILL LAW OFFICE 705 Central Avenue East P.O. Box 369 St. Michael, Minnesota 55376 TELEPHONE (012) 223-0000 FACSIMILE (012) 223 - 6460 May 25, 1993 MINNEAPOLIS OFFICE 2400 I D S CENTER MINNEAPOLISo MINNESOTA 55402 TELEPHONE (612) B84-8400 FACSIMILE 1312) 334-8050 RE: Economic Development Authority of the City of Otsego, Minnesota - $450,000 Public Project Promissory Non -Recourse Note, Series 1993 (City of Otsego Lease With Option to Purchase Project) Dear Stan: Enclosed at your request and at the direction of Mary Ippel of this office in connection with the above referenced matter please find the documents needed from our office for you to complete the bond transcripts. I have enclosed one copy of each document along with originally executed signature pages that could be salvaged from the prior structure. I believe you have on file the re -executed signature pages to the current note documents as well as the Mortgage and Assignment of Leases and Rents drafted by your office. I apologize for the delay and hope this will be sufficient for your purposes. Thank you for your cooperation and please do not hesitate to call either Mary or me should you have any questions or comments. Very truly yours, .6 Todd J. Hagen Paralegal TJH:kmi Field EEngfneenn91 Titc-. Y WA1'E.K ANALYSIS 7608119th Lane North Champlin, Minnesota 55316 ° a Telephone: 42T0826 Approved Minnesota State Board of Health, Licensed Laboratory 027-053=113 Wisconsin Dept. of Health & Social Services Licensed Laboratory 994 FED. ID #411443773 T0: riCALPINE BROTHERS, INC. BOX 115 ROGERS, MINNESOTA, 55374 9 . & 11 October 1992 TEST #: UNIQUE #: Date drawn: TIME: FROM: Date tested: Re: Water test at: 8899 Nashua Ave, Otsego, Mn Owner: City of Otsego Owners address: 13474 NE 95th 46 Otsego, Ma Field Engineering tested the water thatwas drawn by John McAlpine at the above .address and the results were as follows: 60919 517928 9 October 1 3:30 p.m. Well lU October Nitrate Nitrogen -per Electrode Method less than 1.0 mgil (Maximum allowable limits, less than 10.0 mgil) Coliform Bacteria -per MF Method less than 1 per lUU ml (Maximum allowable limits, less than 1 per l0U ml) This water DOES meet FHA, VA, and U.S.P.H.S specifications. Field Engineering, Inc. is authorized to perform these .tests by the Minnesota Environmental Health Division, Well Department. _ Sincerely Yours, Marvin �. Wenzel lOa�llp Name ��� �, TOWrrohip N0. ., Range NO. Section No. Fredlefl � �! -�+r" (Gm_ } �•H�L . J "R Date Work Can{�lelad s. sgy '� ��; Oti 5 0 ,�. � 121IQ :� .23w Y7 • 'SE,. 88i s�OOf>�¢4=�,'� ,�^ IO-09-92 "� ,. ' .. Numerical -Street Address end Cityof WeH locatlarr •, .� ,,, or Fke Hamper : DRIWNt3 MET1iOD � r' _ , . - r L ,., �8991�ai ;�,: _ - hue Avs t � - �]3c River � � Mn. "5533 � � �Q F �- . a Drwan ❑ D„g �s`� r � �. ;� y /W .-�❑ Auger ; - , .; �tary _ ❑ ,tatted ` ` Show aped klcefion;o} web In,aectlon grid wtth 'X ''; Sket��ap d wep kx aatlon. ' ' Rt��' �;; � _ '' r � " � - {�_ ^,_; ��� : •N r.;«t' �. � n9 Prrooppearrt(yy Imes;. `. a.,. � R - T .roads end bulldirlga. DRIWNf3 FLU1D � : �. ,.. ��' Q d l}' �t�W �:�i '�<. ;��� �~` ,r r ' '� '`'2=r :•tt ❑ ilea 1 : � �*,,�"x ��g + , []. Domestk: � r r. �'- � ❑Monitoring � � �� E �3 r 3'sgi 4�Q liTlpetlon r-+..wti� • a `;�ublic . ; `..❑ T �� _ II Ted WeN� ,�.,, �'r ^O Dewatering ; � Remedial _ ' � .. e .., �_ tS ai. CASING �> ;,;;. � Dove Shoe? ,',[Yea ❑ No HOLE DIAM 1 Steel ���w�� Ttlreaded .=1] Welded -i• M+..;y• • • CASINaDIAMETER rt,• �', I„ WEIGHT-�„�iy, .�„G PROPERTY OWNER'S NAME �y ,,•_..� - � f �t+"�'.Mi. Oo�."`'�'L�,� R r` ' � .11 , �� '. i ; - hAaNlrg address N different than property address Indicated above. ;y} ' ,� '• lI6 to � �° ' `' R H �' f psm, �, ��� • ' _ �'�7��;-� 98 th.� . �+!�+-�ru.,.n ,. 4 ,� t�Y ' ` � r t :� � t"OPEN HOLE � '; �_ '. �� � r Oiseo Ma. 88330 .� .. t t �.�-���.,�'�.� ���: ; F.L. non; ,�to �` �ft � � , x,. r �` q r++ ,r. • l+A'r -`* w.-a ';•"-�� 'y 14�Sr, n ' 'Bn..Diam.. ++nR�1 'k J - '�'� rir ���,� , ��, y L }/ a � �� a8st__bslwaan'`�,�"' � �;I„ilt. and • ft- FI'iTiNOS ,c _ � t3TATICWATE7iLEVEL ��;-a.:� a' •.�t' .r :.y ..,,.t�- r �,yr`�• 8E060GICAL MATERIALS �OL.pI} .; HARDNESS OF FROM ``�"'''' `�� �� yew •p above tarid aurtace • =date measured_�� �. 14fATERIAL Gl'eve� _ � � - !� ,PING LEVEL Iand suAace ,, ,. .. �,V BroWII SOft 0 �:; 2�.� " s - �''�h'ft aoiter�:k ' �' �'�',�.�. a�,..,< .ix �.. Clay7 � .�� _ 4 ' •� )N {/yam IIVW VMNIrLGIMF �'ky , ' • ��+ IYwJN01 Y '„q,�„r, �'tlN•h'ye � ^� �'.� ��� 27 T Z �Y. i.w.�. .. / h. 1 R' '�i�'L. F�' �� � :, `. � =�WIY=NWIO� Monitor •�-� ,, e[x, ., � ., '�.r' !, ¢ "-�«�',r a!`C��`�r;#k,'�k- kux: _ "' 21n: above _ .. J > � .5. ' � L f�1 '!i' f; H !S) � ` • . ♦ .N f � tide C1ay�Ro � Bra%Gra Hard ':_ 49 �' S � .. � ��..-�x;��= f. .� ,t :; ,�-,pwounNotNFORwinnoK � S� , . . ,"�"'� �'.,�y'✓ � t...-ac L �ti- � WeN grorrfed� ��N •�� � (�0 �y�'j � �fiF;`� {-s' s ti .{ L .. Clay �Y � �" '� Iat.-Gra Mediumr 55 62 tirout8latarW '� H.ai �ant«,na .. _ � : �- ,�y++ 3 �'/� �" ' ,y'� .,• .: � .... - - r ram. �iF:ij�����n��' b��R. _'� = yda, ❑ D: _ Clay. �" S ticky". � Gtay -Hard � .62 .,. 83 � r _ ������t� ��T� b �. � ❑ yds., d bf �'..1�- � .ter lb+.b R _.-❑' yds. � b � NEAREST KNOWN taOURCE OF CONTAMINATION • - : -c • - . Grave - Sra�n � Soft 83 � 89 :.;>r: �� ��, ,�:..:...... ,.. -s' � ' iiii--�°t s . ,�i�o'i-Crri��� ,. , p ., ... -, �, ,• WeM diekllected upon oomplsHon2 � Yea ❑ No - . Clay .., - Red '' -3oft 89 9S � " � . - _ _ PUMP ,t..� a��� r .: ','. _ .. .,, .: ' ' =" � Not hu�llert - -,_ Shale- � ...: Green •. � Soft �� - 96 iI0 Mrer'a narrh ` '� � *�,. � = .. . 1 s� ion � � ... .. �lA _• A • _ �' Model number • �xiY=iS�1I ' 'HP �_ Vdta ,_ Shale � Xe/Bra "Soft 110 Y3Q� • "` _�_� 'P', Shale � .� Greeen Mediwa •130 13S •-� � submeoflWs ❑ L' S: Ttubine O Reaprocatlng ❑Jet ❑ _ . . ,, ' _ ABANDONED WELLS • � �. ys��l�88a�loCiC Gs�a/Bra azBW.ijm 135 1/ 8� �° y Rave arty not In use and r►ot sealed well(s)? ❑Yes • � No e. - v` j WELL CONTRACTOR CERTIFlCATION .. ; . _ :.. _ . r . '� ' ��:��� �iiite aicdi� 178 188 ' Thlaweq wee drtiled,under my cupervislon end In accordance with Minnesota Rules. Chapter 4?25. The information contsined In thla report to true to the best of my knowledge. �� wfiiaYV VirA ntaai lrc �ii�iy �V8 LOO d- -�. -' y ,� __ .. `�� USB a SSL+Wrd Sheet !f needed .. . � r V � '•y _ REMARKS, ELEVATION, SOURCE OF DATA, etc. l r � r_ 1 j.� �f T. 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( 7 , '' of A, I�1. F �'AV t�i}' C`•.. t' `ALI g t If v IA °kTILL :; ALI t i a r Q \\ r w ; JJ...11K1W��rK fF .IN I It I IN f AN rLW o \AN Z= IN �7 x 1 `�=.1 k NQ4 w >if a' or Jr; l i ,r I.�P•.i(�, AJ!••pr �.y y' ..� I of , It I No A Np IN a F if f / J I�i� ram' 1 I olI: r :1 ia• ` No IF ,yp . It t ..�,,.FILL. ' AtallatoNA To whom it may concern Tanuary 29, 1993 Re: New Otsego City Ha11 Otsego, MN The following is a list of equipment or items that are considered replaceable due to wear or natural phenomenen such as fire and water damage: Underground submersible pump , , $ 1,053, Water pressure tank 953. Structural and miscellaneous metal 29089. Rough carpentry including penthouse and finish carpentry 98,853• Membrane roofing and caulking , , 30,371, Hollow metal and wood doors and finish hardware 15,043, Aluminum doors, windows and glass 8,9000 Coiling fire shutters 3,540, Drywall work , , , , , , , , , , , , , , , , , , , , , , , 183,995o Ceramic tile work 1,0000 Resilient flooring and vinyl base 3,180, Carpet 6,6119 Acoustical the , , , , , , , , a , , , , , , . , , 7, 845 , Painting 5,450. Toilet partitions 1,800, Toilet accessories 1,0000 Kitchen equipment, , , , , , , 0 , , , , , , , , , , , , 203000 . Folding partitions 17,147, Vinyl wall covering 630000 Mechanical furnaces, condensers, make up air unit, exhaust fans and duct work, grills etc , , , , , , , , , , , , , 48,0000 Mechanical plumbing vents, pipes etc above the slab but not including porcelain plumbing fixtures 28,111, If you have further questions regarding this matter please contact me, Signed: Don Mez ardt Architect cc: City of Otsego Payment Month Date Year EXHIBIT B SCHEDULE Or RENTAL PAYMENTS Payment Number 6 1 1993 1 12 1 1993 2 6 1 1994 3 12 1 1994 4 6 1 1995 5 12 1 1995 6 6 1 1996 7 12 1 1996 8 6 1 1997 9 12 1 1997 10 6 1 1998 11 12 1 1998 12 6 1 1999 13 12 1 1999 14 6 1 2000 15 12 1 2000 16 6 1 2001 17 12 1 2001 18 6 1 2002 19 12 1 2002 20 6 1 2003 21 12 1 2003 22 6 1 2004 23 12 1 2004 24 6 1 2005 25 12 1 2005 26 6 1 2006 27 12 1 2006 28 6 1 2007 29 12 1 2007 30 TOTAL PRINCIPAL * Interest interest formula note. Total Principal Component $22,000.00 $22,000.00 $22,000.00 $22,000.00 $22,000.00 $26,000.00 $26,000.00 $26,000.00 $26,000.00 $26,000.00 $42,000.00 $42,000.00 $42,000.00 $42,000.00 $42,000.00 $450,000.00 Interest Rental Component Payment $13,500.00 $131500900 $121840.00 $12,840.00 $12,180.00 $12,180.00 $11,520.00 $11,520.00 $101860.00 $101860.00 $101200.00 $10,200.00 $13,500.00 $351500.00 $121840.00 $341840.00 $121180.00 $341180.00 $11,520.00 $33f520.00 $10,860.00 $32,860.00 $101200.00 $361200.00 for this period will be calculated according to the percentage applicable at that time based on the stated in the note and the resolution authorizing the ** Rental payments for these periods will be calculated based on the interest due for the relevant period. EXHIBIT C SCHEDULE OF PURCHASE OPTION PRICE AND CASUALTY VALUES After Payment Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Purchase option any other interest PURCHASE OF PROJECT Purchase Option Price` $4501000.00 $4281000.00 $428,000.00 $4061000.00 $4061000.00 $384,000.00 $384,000.00 $362,000.00 $362,000900 $340,000.00 $340,000.00 $314,000.00 $314,000.00 $288,000.00 $288,000.00 $262,000.00 $262,000.00 $236,000.00 $236,000.00 $210,000.00 $210,000.00 $168,000.00 $168,000.00 $126,000.00 $126,000.00 $84,000900 $84,000.00 $42,000.00 $42,000.00 $0.00 price will also include any accrued interest or payment required to bring the bond debt current. Appraisers Malcolm Watson Appraiser Phone: 788-2714 Forseth 222 Little Canada Road Phone: 486-9550 Cyphers Appraisal Phone: 251-6101 Kurt DesMarais Appraiser/Realtor Phone 682-1730 (W) 675-3601 (H) Dick Field Appraiser Phone: 497-2596 434-3316 Campbell Appraisal Co. Inc. 8609 Lyndale Ave. 5o. Bloomington, MN 55420 Phone: 888-1236 Appraisal Engineering 4442 Central Ave. NE Mpls., MN 55421 Phone: 788-8673 $450,000 PUBLIC PROJECT PROMISSORY NON -RECOURSE NOTE, SERIES 1993 (CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT) ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, MINNESOTA PART II. Basic Agreements and Documents 1. Note Resolution (including Resolution No. 92-52) 2. Lease With Option to Purchase Agreement 3. Short Form Lease 4. Mortgage 5. Assignment of Leases and Rents Additional Documents from Citv 1. 2. 3. 4. 5. 6. 7. Resolution of City Approving Lease Certificate of City Resolution Calling Public Hearing on Redevelopment Plan Redevelopment Plan Resolution Approving Treasurer's Receipt Warranty Deed PART III. Documents from Authority Plan for Note Proceeds Redevelopment 1. Resolution of Authority 2. Certificate of Authority 3. Nonarbitrage Certificate 4. Financing Statements PART IV. Documents from County 1. County Auditor's Certificate as to Registration PART V. Documents from Note Registrar 1. Note Registrar's Certificate 2. Specimen Note Register PART VI. Additional Documents 1. Specimen Note 2. Certificate of Purchaser 3. Informational Statement (Form 8038-G) and Transmittal Letter PART VII. Opinions 1. Legal Opinion of Bond Counsel 2. Legal Opinion of City Attorney 233157 PUBLIC HEAATNG NOTICE ESTABLISMdENT OF ECONOMIC DEVELOPMENT AIITEORI` Y NOTICE IS HEREBY GX�EN that the City Council o the City of Otsego will meet at 18474 95th Street NE in the City Hall in Otsego, Minnesota at 7;30 PM or as soon thereafter -as parties may be heard on 14 September 1992, The City Council will consider the establishment of an Economic Development Authority pursuant to Minnesota Statutes 469,091 through 469,108, The City Council will consider an enabling resolut�.on setting forth the membership, powers and authority, issuance of bonds, reporting responsibilities and ability to levy a tax. The purpose of the public hearing is to obtain citizen views and input upon the proposed Economic Development Authority. Copies of the enabling resolution are on file with the City Clerk and are available to the public at 13474 95th Street NE, Otsego, Minnesota between the hours of 8:30 AM and 4s30 PM, Monday through Friday. Jerome Perrault, City C�,ex':� e. �• �' Tal'�I �5 "�� 1c��5 �rT'_,EGOTC?l�U•I'=�HIF' �, F'.1�'1 GZT�'•�?.P pTSEU� .. . GOUPV7.°Y OF WRIC;ti�T . The Qity oC Otis�o Council �will�'�odn- duct aPublic Heanng on jl3onday, No-� ; vcuaber �, 1gta2 at 7:UU'p.m. 'ak thA':Oity of Otsego• Hall st 1S97g .NF 95th fit., . Cktaego, l�N 6&83(). 'fie 1,ppttt�r, to ;be , heard; i$ the o 7Jcronomic Oeyelop- . went Aas4aiation. Redevefppiment .den. far 'tbe •Otsego Commupity 'Cepter PrbjeGt �x,d �t�blf�ha�at of a rp+�r}'el- opment pproject at�ee. Copies of'tttia ply sire ,�t the Ofa�ga Cfty �i�,ll Off�� �G Yfi4?a 1vE 95�h 5�., Otsego, Minnesota farraview. •' •• �• ' • '•� • A,it inte�taci partfea fx�vit�d ,t�, �attendtlteHearix�Staexpres�theircfue�, . tipriis Alatl • cA�1d0rA�%4t��k►rx�bil#•$..ii'� ybLY ' would like further iaif'arp�t►tlan regard•. ' tag the �bdve detu�-ibod Hearing and the Retievdlppa�at PX�n �ing.coasidarad> " please pelf tl� G�,i�Y pf•�%td9gp 8,t'•�j,- .4419•in advance of the meeting. ' ,l��ated; OctuGhar22, �9�2 ' ' ' Elaine l�eatty, ; Deputy C1erkPl oning Admini®tratar' STATE QF MIZ�]�Sc�TA ) )ss, �C7UNTY �,'?F SHERBT]RNE) being duly sworn, on oath says tha�he/$he i� the publisher or autheri-red gent and employee of the publisher of the newspa- per known as'Z`he ,1✓1k liver Star rT'ews, and has full knowledge of the facts which are stated below; (A)'1'he newspaper has complied with all the requirements constituting qualification as � qu�ali�ed newspaper, as provided by l�irmesota Statute �31A,�ft�, '$�,A,0'r �ritl otliei-�pplica%le which is attached was cut from the columns cf said newspaper, and was printed and published once each week, for __��c- cessiveweeks;itwasfirstpublishedoni7Vednesc�ay,;:lie f. ,�-�• day of,�"1 ,�,�, 1�J�c�--, and was thereafter printed and p�xblished qn every Wedlnesday to and includinf; Wednssd�ay�, the day of __ _ ,1�T; and printed below is a copy of the lower case alphabet frort� A to Z, both inclusive, which is he�re�ay acl�.t���vledged as being the size end kind of type used in the cQmpQ�itiQn find p�xi�Xxcation of the notice. a 'bbdef,ghijkl�n4pgrstuvwxyz « '.� RA�`It' I1C�� ., (�,) I,awest elassifed rate paid. kid: ;':;,,. commQrcial users fox cQnap�.xalale space (.�) Maximum r$te allowed by law for the above ri�'iatter (3) Rate actually charged for the 7JfJ"fARY P�1tiLfA - ;�f;r;�,1.:4)�'i Fl CIfQxa Ct�1J;'4'i'•Y '�� Cnmmissi�n Gzg',�ex ,1u�,1e 1G, 19l1v JAM 2 4"; 12:45 r,_?T';EGOTOU'I':HIF' 46 Affi i STATE OF MI-NNESMA ) )ss, C7UNTY OF SHERBURNE) '1 being duly sworn, on oath says tha he/she is the publisher or authorized agent and employee of the publisher of the newspa- per known as The Elk River Star News, and has full knowledge of the facts which are stated below, - (A) The newspaper has complied with all the requirements G1� OF oTSEGO COUNTY OF WIUGHT constituting qualification as a qualified newspaper, as provided P. MA"AwMinnesota Statute' �MX02 '33IA..O'T wid other applicable licable --=- -- - ----- -- by p� oil' laws. The Qity of SittsMogo a Ft1DliC H UMN on ZVlonday, No- . vombor 9,1092 at 7;Up'p.zn.'at th4',Oity of Otsego, Hall at• 19474 .N�1 95th $t., oteego, MW 858$0. 1%8 MAtter. to be heard•' is the sego Economic Develop- ment Assodlatio� n.Rodevelopment.T�)an. for'tbe •Otsego Community 'Cepter P"Jwt aad+�t$blishmat of iodool- opmentpproject araea, Copies ofthis 01&n A" At tb.e OtM6 City 13�U 01noes et 1,2474 NE 95th St., Otsego, Minnesota for review. AU"iistemsted paxtioa axe Savliod 011 tlpY]f!GA�Cornx�%CtyYxir�0i4th, .1f' ybq would like further infarmatlan rc-lord- lng the abovo deacribod hearing and the wevelapawat Plaa bolag.coasidemd, pl se 1 tho G1ty of otaogq at4P441W 4414•in advance of the meating. Doted: OqW er. 22,102 Elaine Baatty, ,1 eputy Clerkaoning Administrator ., . ((2at28) . laws, amended, (in I Meprnted cgqkee which is attached was cut from the colunms of said newspaper, and was printed and published ante each week, for C cessive weeks; it was first published on Wednesday, the day of f, 2E 19 q�c1, and was thereafter printed and published on every Wednesday to and including Wednesday, the day of ,19T; and printed below is a copy of the lower case alphabet from A to Z, both inclusive, which is hereby acknowledged as being the size and kind of type used in the composition and publication of the noticea Sty,bscribed d sworn it<7 before me on this . �� day of 19 613"V (X) bowest classified rate paid. by:A,,, commercial users for comparable space (�) Maximum rate allowed by law for the above matter (3) Date actually charged for the above matter CIQ$1VQKA Ct;�U''�T'Y �C;r Cnmmiss'run Gxp',�ex Juf,c 1G, t973 $,S.C7G q'- JHfW „� .) 1 E : 45 0TSEG'CiTr._ LJ1�I' ;H T P P.1/1 STATE VIr ) )ss, COUNTY OF SHERBURNE) being duly OWUrIL, on oath says that he/she is fthe publisher or authorized agent and employee of the publisher of the newspa- per known as The Elk River Star News, and has full knowledge of the facts which are stated below; O11Y OF UTSE(jf] (A)'I`he newspaper has complied with all the requirements �GQ>71�i1"Y �►F WRIGHT:constituting qualification as a qualified newspaper, as provided E 'AIP- j A . Itimesota Statute• �331A,�t7 ' , _ pp . r Ai?�3G':.',,; -- by , 33'tA U'7- and other applicable WtiVaQ 1'3' 1VJAi U�JLVRi�,'iKlV The 4iZy of Ott'se1c Council •will 'con- duct o Public Hearing on Monday, No-1 vemb$r 9,1992 at 7:(4'p.m. 'at the:City of Otsego Hall: at 13474 M 95th St., . otaaeeg�o, MN 55880. The Spatter to be' heard, is the o rxonomic Develop- . went Aasodiation, Redevelopment pjan, far 'the •Otsego Community 'Cepter , prnject and #stnbtishmeat of a redevel- opmentProject area,. Copies Ofthi,s',01" " ALt the Otsego City XA4 offices ,at 13474 NE 95th St,, otsego, Minnesota for review. ' r A,1.1 'intemstad partiNoe are iaorited Ito., attendth eHearingto e?cprasa their ques• . . Go�#QerAe0uu�4�iltb..if you ' would like further is ormntion regard•, ing the above described Hearing and the wevelopment flan beiag.eoiidend, please 1 tlfe arty of Otsego at'441- 4414•in advance of the meeting, Aatad:O*her.22o 02 1.Elaine Beatty, ]deputy Clerk/Zoning A%izninistrator' i � . - A"IM which is attached was cut from the columns of said newspaper, and was printed and published once each week, for-•-sy,c- cessive weeks; it was first published on Wednesday, the ON day of, i, 19 o, and was thereafter printed and published on every Wednesday to and including Wednesday, the day of ,19 and printed below is a copy of the lower cease alphabet from A to Z, both inclusive, which is hereby acknowledged asbeing'the size and kind of type used in the composition and publication of the notice. �3ttbseribed d sworn io beft�re me on this .� �y� C-N , 19c--. (X) Iaowest classified rate paid.lciy,.: �;,�. commercial users for comparable space Maximum rate allowed by law for the above matter () Rate actually charged for the above matter NQ"fA;iY i'�.1C�1.lG - ht;r;n,1:4,'t�'if1 �q �Amm138iGli C•xp�'ea lU'fit il,, f9h3 R� 25 "D3 12145 0T':34EG iTOIJI`ISHIF' A ffi'davit t Gl�"Y,QF oTsE�ta •.. . COUNTY 1G�tFl[ WIUGHT NIP Ogg r;'.. TO: WHOM IT MAY CQNQIJRN The Qity of Otlse�o 4aunoii�•will'�odn- duct a Public Bearing on ,Monday, No-� vembor 9, N92 at 7:GU'p"m.'at th6Xity of Ot®ego, Hall: at IS474 NE 95th St., otse�o, MN 85330. 'lie wAtter to b* heard' is the o Emnomic Develep- . went Aasocistio0 n Redevelopment Flan. far 'tbe •Otsego Community Cepter . Qraj�t agQ,�st�blishme»t 4f a red�vel- opment projeet area, Copies of this'plaz elks at the Otsego Ctity �i�lt woes at 10474 NE 95th St.,, Otsego, Minnesota for review. . " • A4 3htar�stdd parties 1 "O iOited ,to" attendthe'Hearingtoexprc�theiflqui6 � tio& 'Aod eanceru oa ute..If' ybu would like further information regards, ing the abavo ascribed Hearing and the Redevelopment Plaa boing.e6iWdemd, pledse I ths CAY of Otsego 0 441,- .44144n advance of the meeting. I?ated: Oqtoher. 22,102 Elaine Beatty, Ijeputy Clerk/Zoning Administrator' ict28) ' . STATE V'r MIININlaMjTA ) )ss, CC7UNTY OF SHERBURNE) F' . 1:' 1 being duly SWbrn, on oath says that he/she is the publisher or authorized agent and employee of the publisher of the newspa- per known as The Elk ,River ,Star Dews, and has full knowledge of the facts which are stated below,' (A) The newspaper )',as complied with all the requirements constituting qualification as a qualified newspaper, as provided by Afinnesota Statute' '33IV02, 231,A.07, aricl"othei applicable laws, � amended, .., e (B)The which is attached was cut from the Columns of said newspaper, and was printed and published once each week, for fst c- cessiveweeks; it was first me day of.. ' 14'tl '? , 19 tic -, and was thereafter printed and pnblished on every Wednesday to and including Wednesday, the day of and printed below is a copy of the lower case alphabet from A to Z, both inclusive, which is hereby acknowledged as being the size $r►d kind of type used in the composition and publication of the notice. subscribed d sworn io before me on this � 19 �c�- u (l.) I.owvest classified rate paid. kiy �;,,,, commercial users for comparable space (2) Maximum rate allowed by law for the above matter (3) Rate actually charged for the above matter NQfA�iY Pi1pt1G • hlfr;nl:�;t?•if1 rltQxa cc,U;'�T•Y �� eommissiin GxF?•e� du?„� 1G, i9h3 d.. ��., Jal`I '�� "�:-� 1���`� ��TE;E��c]TC:�IAU•I'=HIF' F'.1��1 STATE �?F 1vl�i�uCYi'A- ) )ss, CC7UNTY t�F SHERBT�RNE) n , beiri�' duly sworiY, on oath says that he/she is #,he publisher or authorized went and employee of the publisher of the newspa- per known as The l�lk 2�•iver Star News, and has full knowledge of the facts which are stated below,' -� �-.-• �,• C�YQ.�o�sEGta (A)'i`he newspaper leas complied with all the requirements ' ' QQUnTT'Y C►F WR.IC�#�T � , , constituting qualificakion as � quali�xed ne+,vsp�,per, as prbvid�d -'��A7 [�.� A ' �rnrtosota Statute' �,•t7�, 3�"�A.O'7-" Pp ` . . e� - - -- - �':' •.:: •---. _...... _„ . , by ,aril?-�thei ��: � ' hcable iY. FI ii V'Ni ii iRYi'ii VYi�YiI�!\i� " 't$eJ ('illyy of �t,�e$o Oouncil •will 'son• duct a Public Hesr►ng on ,112onday, No-� vamb'e�' �, 19�2 at 7.UG►'p•m•'at tbA':City' of 4ieego� Aall at 13474 .Nk} 95th St., , ego, 86334. '"lie rpgtter. t0 :be h, eard,' is the o Z�conomic Develop- , meat Asageistion. RexieYelgpment �+jan, for 'the Qtaego Community �Cepter . praj�t nad �tublisiut�nt of a red�+rel- opment rojeet area. Copies o;f thi.� plea dxe at a Otaago City Fia,11 Off�� �t Y3474 NE 95$h fit., Otsego, Minnesota for review. �' � . ' � •� ' � ''� A,1.1 �intere�tw�1 partiHa � ia�t�d to tiaY1N ' a�tcl • caaaes�ur/Garuta:.If' yop ' would like furthex iJ�oroaetxon rc-,gard•, ' Ing the nbaVe di3�tribad Hearing and the Ftadavalapp�wat Flan i�ing.cor�idaxed�, ' prise r,�+11 tl�► G,i#,Y af,Utaago at'•,�#1- 4419,in advance of the meeting. ' ��ated: Ogtoher.22, �,�2 ,' Elaine Beatty, ; Deputy plerkFLoning Aslmini®trator' Taws, a� ame�xded, _ _ (l�)Tlxepted which is attached was cut from the columns of said newspaper, and was printed and published once each week, for __�et�c- cessiveweeks; itwasffrstpubiishedon�7ednesday,thee' ,�,,~- day of„�.�-�(J�-e.�7 ��, 19 �I�o�, and was thereafter printed �ancl published pn every Wednesday to and including Wednesday, the day of ,1��; and printed below is a copy of the lower case alpkabet frarn A to Z, both inclusive, which is hereby acktaa�vled�ed as being the size sand kind of type used in the composi#�an and pcxblicatiax, of the notice. w '4, nA:. F.vk J J U 3.�.. .. .. .. .. .. .. 4.. .. ... .. .. .. Subscxikred d sworn io before me on this � clay of J I�,A�c� ir�c�,, (�.) l�r�est classified rate paid. lay: ,. commercial users fox cornpaxable space f.2) Maximum rate allowed by law for �e abiove mattex (�) Rate AGtu•ally Ghmrged for the above matter N4TA;�Y �i1Cil,JC - h1;r;n,i;�i0'if1 rlr+a+�oxa cuu��'�r �';� e�mmissian Lxgt�et Stu?,� iG, 19lty PUBLIC PROJECT (CITY OF OTSEGO LEASE ECONOMIC DEVELOPMENT $450,000 REVENUE BOND, SERIES 1993 WITH OPTION TO PURCHASE PROJECT) AUTHORITY OF THE CITY OF OTSEGO, MINNESOTA PART I. Basic Agreements and Documents 1. Revenue Bond Resolution 2. Lease With Option to Purchase Agreement PART II. Additional Documents from Citv 1. Resolution of City Approving Lease 2. Certificate of City 3. Resolution Calling Public Hearing on Redevelopment Plan 4. Redevelopment Plan 5. Resolution Approving Redevelopment Plan 6. Treasurer's Receipt for Bond Proceeds 7. Quitclaim Deed PART III. Documents from Authority 1. Resolution of Authority 2. Certificate of Authority 3. Nonarbitrage Certificate 4. Financing Statements PART IV. Documents from County 1. County Auditor's Certificate as to Registration PART V. Documents from Bond Registrar 1. Bond Registrar's Certificate 2. Specimen Bond Register PART VI. Additional Documents 1. Specimen Bond 2. Certificate of Purchaser 3. Informational Statement (Form 8038-G) and Transmittal Letter PART VII. Opinions 1. Legal Opinion of Bond Counsel 2. Legal Opinion of City Attorney 230437 NOTE REGISTER $450,000 PUBLIC PROJECT PROMISSORY NON -RECOURSE NOTE, SERIES 1993 (CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT) OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, MINNESOTA This Note Register is maintained for the above Issue by the Secretary of the Economic Development Authority of the City of Otsego, Minnesota, as Note Registrar. The ownership of the Note 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 Date Amount Registration Registered Owner The Bank of Elk River 630 Main Street $4508000 014193* Elk River, MN 55330 Signature of Secretary Additional Notations: *Date indicated was actual date of delivery. 233157 Notations of Interest INSTRUCTIONS FOR COMPLETING THE WELL DISCLOSURE CERTIFICATE A $10.00 FEE MUST BE ATTACHED TO THIS FORM WHEN SUBMITTING THIS FORM TO THE COUNTY RECORDER'S OFFICE, THE FEE IS TO BE PAID BY THE BUYER OR PERSON FILING THE DEED. PLEASE MAKE THE CHECK PAYABLE TO THE COUNTY RECORDER, A. PROPERTY DESCRIPTION — provide the county, house number, street name, street type, street direction (if applicable), city, and zip code; and, if applicable, the lot number, block number, and addition name (for example, White Pine Addition, block 4, lot 12). If the property is located in a rural area without a lot number, block number, addition name, attach a complete legal description of the property. B. PROPERTY BUYER MAILING ADDRESS AFTER CLOSING —provide the buyer's full name (or company name, if buyer is a company), full address, and phone number (including area code). Be sure to include a complete mailing address. If the property is jointly owned, provide the name of a contact person. C. CERTIFICATION BY SELLER OR BUYER —The seller should sign this certificate before it is submitted to the county recorder's office. If the seller is unable to sign the document, the buyer may sign the certificate before it is submitted to the county recorder's office. Where deeds are given in fulfillment of a CONTRACT FOR DEED the well disclosure certificate MUST be signed by the BUYER. WELL INFORMATION Provide the following information for EACH WELL BEING DISCLOSED. WELL LOCATION Provide the county name, quartile (one quarter section is required), section number, township number, and range number. WELL STATUS INFORMATION Indicate the status of each well. CHECK ONLY 1 BOX. In Use — A well is "in use" if the well is operated on a daily, regular, or cyclic basis. A well in use includes a well that operates for the purpose of irrigation, fire protection, or emergency pumping. Not In Use — A well is "not in use" if the well does not meet the definition of "in use" above and has not been sealed by a licensed well contractor. Sealed — A well is "sealed" if a licensed contractor has completely filled a well by pumping grout material throughout the entire borehole after removal of any obstructions from the well. If the well described has been sealed by a licensed well contractor, indicate the year when the well was sealed, if known. SKETCH MAP Complete the sketch map as instructed. NOTE: If a well is not in use it must be SEALED by a licensed well contractor or a well owner must obtain a MAINTENANCE PERMIT from the Minnesota Department 'of Health and pay an annual maintenance fee of $50. Maintenance permits are not transferrable. If a well is operable and properly maintained, a maintenance permit is not required. If you have any questions, please contact the Minnesota Department of Health, Division of Environmental Health, Section of Water Supply and Well Management, at 627-5408 (metropolitan Minneapolis —St. Paul) or 1-800-383-9808 (greater Minnesota). M:/WMGROUP/ORIGS/DISCLOSU.INS 11/92R NOTE REGISTER $450,000 PUBLIC PROJECT PROMISSORY NON -RECOURSE NOTE, SERIES 1993 (CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT) OF THE ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, MINNESOTA This Note Register is maintained for the above Issue by the Secretary of the Economic Development Authority of the City of Otsego, Minnesota, as Note Registrar. The ownership of the Note of the above Issue and the interest accruing thereon is registered on the books of the Economic Development Authority 574 the City of Otsego, Minnesota, in the name of the holder noted below. "Notations of Interest" may include cancellation, date MR cancellation, date of transfer, numbered bond replacng, amount after partial prepayment, etc. Maturity Principal Date Amount $450,000 Date of Registration Name and Address of Registered Owner of Elk River Street _& Additional Notations: *Date indicated was actual date of delivery. 233157 Notations of Interest UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO $450,000 Public Project Promissory Non -Recourse Note, Series 1993 (City of Otsego Lease With Option to Purchase Project) The ECONOMIC DEVELOPMENT AUTHORITY OF TH CI �,OF OT5EG0 a public body corporate and politic and a pol' division in the County of Wright and State of Minneso (th`.. ority"), for value received, hereby promises to a ly rom its Series 1993 Public Project Note Fund (;< to F d"), to The Bank of Elk River or registered as 'gn , h r: cipal sum of FOUR HUNDRED FIFTY THOUSAND DOL �IN4 , 0 on the 1st day of December in the years and amount a , Year Amount Year `��, Amount 1994 22, .-�� 26, 000 1995 22�00 003 42,000 1996 "� 2004 42,000 ' 1997 , 0 A, 2005 42,000 1998,�#� 2006 42, 000 1999 6, 0 2007 42,000 2000 0 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 Note 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, 20039 The interest rate shall be adjusted on these dates to a rate equal to 233163 3°6 above the Discount Rate currently in effect but not to exceed A above the interest rate on the Note 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 Note Register or any successor named pursuant to the terms of the Note 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 Note 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 Note Registrar. Any such interest not punctually paid or provided for will cease to be payable on such regular record dates and such de ulted interest may be paid to the person in whose name this to hall be registered at the close of business on aej re ord date for the payment of such defaulted interest ethe Authority pursuant to the Note Resolut' This Note is issued in or '� eit an authorizing resolution (the "Note Resolutio ') y a, p by the Authority, setting forth the terms upon i h o is issued and describing the security the o h` Note Resolution reference is made for a 1 descr tm' n of such terms, condi- tions and security. No is'' s ed by the Authority for the purpose of financi a r,#e e "Project") consisting of the construction and q 'h ion o :-' building or buildings, improve- ments and equ' a #br nereinafter called Project) pursuant to Minnesota yet -. u 'rt , Se ions 469.001 through 469.048 and 469.090 thro :`; 8 including the payment of all expenses incidental th veto ad the leasing of the Project under the provisions of se With Option to Purchase Agreement (the "Lease") between he Authority and the City of Otsego (the "Lessee"), dated January 1, 1993. The Note is secured by the Note Resolution and by a mortgage (the "Mortgage") granted to the Noteholders in the Project and an assignment of leases and rents (the "Assignment"), and reference is made to the Lease, the Mortgage, the Assignment and Note Resolution and amendments thereof for a description of the revenues pledged to secure the payment of the Note, the nature and extent of the security thereby created, the rights of the registered owner of the Note, the rights, duties, immunities and obligations of the Authority and the rights, duties and obligations of the Lessee. The obligation of the Lessee under 233163 2 the Lease to make Lease Payments sufficient to pay the principal of and interest on the Note 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. The entire principal amount of the Note 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 Ca alty Value of the Project under Section 6.6 of the Lease, o first day of the month next succeeding such payment be w th timely notice of redemption can be given under a io the Note Resolution, all installments of princip - o e e shall be called for and are subject to rede io d re)tent in whole and not in part, at a redemption r e %rm ar plus accrued interest. If an Event of Def t h` c ir and subsist under the Lease or if the Lease sh b IbbbU m` ted on account of a Non -appropriation pursua It Secti 1 of the Lease, all I of princi on e It then outstanding may, at the option of the A INt., „s 11, at the request of the Ly Noteholders, beco odecla due and payable before the stated maturit� �' ��,•.q er with interest accrued thereon, all as providZ in �' Not esolution. Prior�to edate on which any installments of principal on th e 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 Note to be redeemed to be mailed to the Paying Agent and the Noteholder, at the address shown on the Note Register. All installments of principal on the Note so called for redemption will cease to bear interest on the specified redemption date, provided funds for their redemption have been duly deposited. This Note is issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, and pursuant to the Note Resolution adopted and approved by the Authority, which resolutions authorized the Project and the issuance of the Note as a special obligation payable solely from 233163 3 revenues derived by the Authority from the Project. Lease Payments are to be paid to the Authority and credited to the Note Fund as a special trust fund account created by the Authority and have been and are hereby pledged for that purpose. The Note 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, 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 Note or interest thereon. This Note has been designated by the Iss er as a "qualified tax-exempt obligation" for purposes of ction 265(b) (3) of the Internal Revenue Code of 1986, asja e The holder of this Note issue er t'� ;m Resolu- tion shall have the right to institute �y ee 'ng, judicial or otherwise, for the enforcement th"o an herein con - a venants and tained, and may enforce the perf m ie oil duties of the Authority andr o i'y et forth in the Note Resolution, includin ,no li d to, the collection and proper segregation c of all funds described in the Note Resolution._ IT H�B� C:�2TI��IE15, RECITED AND DECLARED that the Authority ha�� y ��at�`s,�id Note Fund and has pledged and appropriatedkett,certain rentals from the Project referred to in said Lease;i,, k will promptly give all notices and do all other acts and �;th`gs required under the terms of said Lease for the performance'` its obligations and for the enforcement of all obligations of the Lessee and for the collection of all rentals when due, that this Note is secured by a pledge of and first lien upon said rentals from said Project as more fully provided in the Note Resolution authorizing this Note 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 Note 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 233163 C! required; and that the issuance of this Note does not cause the special or general indebtedness of the Authority to exceed any constitutional or statutory limitation. 233163 5 IN WITNESS WHEREOF, the Economic Development Authority of the City of Otsego has caused this Note 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 permitted by law and has caused this Note to d ed as of January _, 1993.._ President a 233163 CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount %J the within Note may be made only by the registered owner or his, her or its legal representative last noted below. DATE OF REGISTRATION January 1993 233163 REGISTERED OWNER The Bank of Elk River 670 Main Street Elk River MN 55330 SIGNATURE OF NOTE REGISTRAR REGISTER OF PARTIAL PAYMENTS The principal amount of the attached Note has been prepaid on the dates and in the amounts noted below. Date Amount Signature of Noteholder Signature of Note Registrar If a notation is made on this register, such notation has the effect stated in the attached Note. Partial payments do not require the presentation of the attached Note to the Note Registrar, and a Holder could fail to note the partial payment here. 233163 The following abbreviations, when used in the inscription on the face of this Note, 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 - as joint tenants with right of survivorship and not as tenants in common UTMA - as Custodia or (Gust) p ) under the y �U.' fo (Sta A Transfers taiffiko& Ca 233163 FOR VALUE RECEIVED, ("Transferor"), the undersigned, hereby sells, assigns and transfers unto Social Security or Federal Employer Identification No. ), the within Note and all rights thereunder, and hereby irrevocably constitute and appoints ("Transferee") as attorney to transfer the within Note 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 Note shall have occurred to or to the date of this transfer, the within Note shall not be registered and the Transferee shall be entitled to receive payment with respect to the within Note upon presentation thereof as assignee of the Transferor. Date: Signature Gua NOTICE: Signatu�) must be guaranteed by a member firm of the New York Stock Exchange or a commercial bank or trust company. 233163 10 N E: � '�Io��" rans r will be e e a new Note 1u in the name of foree, unless the i�a ire(s) to this assign - en 11N correspond(s) with the ame(s) as it (they) appear(s) upon the face of the within Note in every particular, without alteration or enlargement of any change whatever and the Social Security or Federal Employer Identification numbers of the settlor and beneficiaries of the trust, the date of the trust, the date of the trust and the name of the trustee should be supplied. ASSIGNMENT OF LEASES AND RENTS CITY OF OTSEGO ECONOMIC DEVELOPMENT AUTHORITY ASSIGNMENT OF LEASE 1, PURPOSE: By this agreement the City of Otsego Economic Development Authority, a political subdivision of the State of Minnesota, hereinafter Assignor, agrees to assign to the Bank of Elk River, hereinafter Assignee, all rights to revenue arising under the resolution (the Resolution) adopted by the governing body of the Mortgagor on January 28, 1993 authorizing issuance of a Note, under the Note described below and under the lease described below or any subsequent lease or rental arising during the period of the Note. 2. NOTE: That certain Public Project Promissory Non -Recourse Note, Series 1993, dated January 29, 1993 between the Bank of Elk River and the City of Otsego Economic Development Authority. 3. LEASE: That certain lease dated January 1, 1993 between the City of Otsego Economic Development Authority, Lessor, and the City of Otsego, Lessee., 4. MORTGAGE: Where used in this document the term mortgage indicates that certain mortgage entered into between the Otsego Economic Development Authority and the Bank of Elk River dated January 29, 2993. 5. ASSIGNMENT: The Assignor hereby assigns to the Assignee all project rentals paid the Assignor regardless of the source as long as any amounts are due on the Note. 6. ACCEPTANCE: The Assignee accepts the assignment of all rights and interest in rental payments as stated above and agrees to apply any and all rents obtained under this assignment to the Note indebtedness according to the terms of the Note and Mortgage. Dated this 29th day of January, 1993 x' ASSIG OR ASSIGNEE �° 4166 By Lard Fournier BY Z s President Its z ° y Jerome Perrault BY Its Secretary Its V,_f_I STATE OF MINNESOTA ss. COUNTY OF The foregoing instrument 9thth day of January, 1992 by the President and Secretary of Authority, Assignor. 2 NOTARIAL STAMP OR SEAL wa L s acknowledged before me this arry Fournier and Jerome Perrault the Otsego Economic Development SIGNATURE OF NOTARY PUBLIC STATE OF MINNESOTA ss. COUNTY OF The foregoing instrument was acknowledged before me this 29thth day of January, 1992 by the of the Bank of Elk River, Assignee. NOTARIAL STAMP OR SEAL SIGNATURE OF NOTARY PUBLIC LAW OFFICES WAITERS DIBECT DIAL NIIMBER BRIGGS AND MOBGAN PROFESSIONAL ASSOCIATION 2200 FIRST NATIONAL BAN$ BUILDING SAINT PAULA MINNESOTA 66101 TELEPFIONE (612) 223 - 6600 FACSIMILE (612) 223-6450 $450,000 MINNEAPOLIS OFFICE 2400 IDS CENTER E MINNAPOLIS, MINNESOTA 55402 TELEPHONE (612) 334-8400 FACSIMILE (612) 334-3660 PUBLIC PROJECT PROMISSORY NON -RECOURSE NOTE, SERIES 1993 (CITY OF OTSEGO LEASE WITH OPTION TO PURCHASE PROJECT) ECONOMIC DEVELOPMENT 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 Promissory Non -Recourse Note, Series 1993 (City of Otsego Lease With Option To Purchase Project), bearing a date of original issue as of the date hereof (the "Note"). 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 Note, 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. BAIGGS Aivn MOAGAN 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 rigi onals 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) The proceedings show lawful authority for the issuance of the Note according to its terms under the Constitution and laws of the State of Minnesota now in force. (2) The Note 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 January 1, 1993 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 Note to the original purchaser, the interest on the Note 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 BF2IGGS AivD MOEiGAN 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 Note 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 Note in gross income and taxable net income retroactive to the date of issuance of the Note. We express no opinion regarding other state or federal tax consequences caused by the receipt or accrual of interest on the Note or arising with respect to ownership of the Note. Dated at Saint Paul, 1993. (move/' / f / Professional_ •• i 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 January, 1993 Drafted By: Briggs and Morgan 2200 First National Bank Building Saint Paul, MN 55101 233138 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 of Lessee . . . . . . 0 0 . . . . . . . 8 Section 2.2. Tax -Exempt Status of the Note; Rebate 9 Section 2.3. Representations, Covenants and Warranties of Lessor . . . . . . . . . . . . . . 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 0 . . . . . . . 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. Termination of 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 0 22 233138 ARTICLEVIII - TITLE 0 . . . . . . . . . . a . . . . 23 Section 8.1. Title . . 0 0 . . . . . . . . . . 0 23 Section 8.2. Security Interest . . . . . . . 23 Section 8.3. Liens 0 . . .. . . . . . 23 Section 8.4. Installation of Lessee's Equipment . 24 Section 8.5. Modification of Project 24 Section 8.6. Easements and Utility Access. 25 Section 8.7. Release of Unimproved Land. . . 26 Section 8.8. Covenant For the Benefit of the Noteholder. . . . . . . . . . 0 27 ARTICLE IX - PROJECT WARRANTIES 28 Section 9.1. Selection of Project . . . . . 0 0 . . . 28 Section 9.2. Construction and Maintenance of Project 28 Section 9.3. Contractors' Warranties 0 28 Section 9.4. Disclaimer of Warranties 0 28 ARTICLE X - PREPAYMENT 29 Section 10.1. When Available . . 0 0 . . . . . . . . 29 Section 10.2. Exercise of Purchase Option . . . . 29 Section 10.3. Release of Lessor's Interest . . . 0 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 33 Section 12.3. Return of Project . . . . 34 Section 12.4. No Remedy Exclusive . . 0 35 Section 12.5. Agreement to Pay Attorneys' Fees and Expenses . . . . . . . . . . . . . . . 35 Section 12.6. Late Charge . . . . . . . . . . . . . 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 Section 13.7. Further Assurances and Corrective Instruments . . . . . . . . . . . . 36 Section 13.8. Execution In Counterparts . . . . . . . 36 Section 13.9. Applicable Law . . . . . . . . . . 4 37 233138 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . 3 1 , 38 ACKNOWLEDGEMENTS . . . . . . . . . . . . . . . . . . . . . . 39 EXHIBITS 233138 THIS LEASE WITH OPTION TO PURCHASE AGREEMENT dated as of January 1, 1993 (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 of the mutual covenants herein contained, the parties hereto recite and agree as follows: 233138 ARTICLE I DEFINITIONS AND EXHIBITS Section 1.1. Definitions. requires, the terms defined in Resolution shall, for all purpc meanings herein specified. Unless the context otherwise this Section or in the Note ses of this Lease, have the 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. Business Day: Any day other than a Saturday, Sunday, legal holiday 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 Note plus unpaid interest thereon until the earliest date on which they may be called for extraordinary redemption under Section 3-1(2) of the Note Resolution, less all sums held in the Note 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 Note Resolution. Contractor: Each of the contractors from whom Lessee has ordered or will order or with whom Lessee has .contracted or will 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 sea., the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et sea., the Hazardous Materials Transportation Act, §1802 et sea., the Federal Water Pollution Control Act, 33 U.S.C. §1251 et sea., 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. State ch. 115B, the Minnesota Petroleum Tank Release Cleanup Act, Minn. State ch. 115C, and any 233138 2 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 Statutes, Sections 469.001 through 468.047 and 469.090 through 469.108. Mortgage: the Mortgage granted by the Lessor to the holder of the Note to secure payment of the Note. 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 Lessee to appropriate money for any Fiscal 233138 governing body of 3 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. Note Fund: The Note Fund created pursuant to Section 5-6 of the Note Resolution. Note Resolution: The resolution its Board of Commissioners on January issuance and sale of the Series 1993 amended, modified or supplemented by modifications thereof. Note: The Series 1993 Note. of the Lessor adopted by 26, 1993, authorizing Note, as the same may be any amendments or 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 and (v) the Mortgage. Principal: The portion of any Rental Payment designated as principal in the attached Exhibit B. Project: The Project Improvements, the Project Equipment aAld 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 Note Resolution for the purpose of accounting for proceeds of the Notes 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 233t38 4 other preliminary investigations and items necessary for the commencement of construction, preparation of plans, drawings 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 Notes 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. Project 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 Notes and all replacements thereof and substitutions therefor made pursuant to the Lease. Protect 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. 233138 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 the Note is registered as provided in the Note 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 Be Series 1993 Note: The Public Project Promissory Recourse Note, Note, Series 1993 (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 January 1, 1993 and ending on December 31, 2007, 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 of the Project being leased by Lessee pursuant to this Lease. 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. 233138 6 Exhibit D: A form of Certificate of Incumbency of Lessee relating to the offices or positions, signatures and qualifications of the persons executing on behalf of Lessee this Lease and other documents relating thereto. 233138 7 ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES Section 2.1. Representations, Covenants and Warranties of Lessee. Lessee represents, covenants and warrants as follows. (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 Notes 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 Notes, all within the meaning of Section 141 of the Code or causing the Notes to be an "arbitrage bond" 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. 233138 8 (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 substantially completed in accordance with the Specifications on or before June _, 1993. (1) Neither the execution and delivery hereof, or 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 Note; 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 Note, 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 Note, 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 1993 Note, 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 233138 9 with their terms, are authorized and have been duly authorized by the Note 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 Note Resolution. (f) To finance the cost of the Project, Lessor proposes to issue the Series 1993 Note as provided in the Act and Note Resolution in the aggregate principal amount of $450.000. (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 Note 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. 233138 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 Note 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 Note except for sums deposited in the Note Fund as provided in the Note 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 Note 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 appropria- tions 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 Specifica- tions 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. For purposes of executing any such 233138 11 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 the Project to Lessee, and Lessee hereby leases 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. 233138 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 Projectlin 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 of such 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 233138 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. (a) the termination thereof by Lessee in accordance with Section 4.z, (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. 233138 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 Note 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 Note. 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 Note 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 233138 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. 233138 16 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 Compensation Insurance. If required 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. 233138 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 Indemnitee for, 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 shall survive satisfaction and termination of this Lease. Th hereunder shall be in addition which the Indemnities may have under this Lease or any other 233138 Lessee to indemnify the Indemnities payment in full of the Notes, e rights of the Indemnities to any other rights and remedies against the Land and the Lessee document or at law or in equity. (4) Notwithstanding anything in this Lease to the contrary, if Lessor should, after the leasing 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 (1) 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 Project. 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 replace- ment 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 233138 19 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. 233138 20 ARTICLE VII OTHER OBLIGATIONS OF LESSEE Section 7.1. Use; Permits. 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 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 by 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 233138 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. 233138 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 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 233138 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 233138 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 Notes remain outstanding under the Note 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 Note Resolution; (2) a copy of the easement (or if Section 8.7 is appli- cable, release) executed or to be executed by Lessor; 233138 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 Note 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 Notes remain outstanding under the Note 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, reductIon, or diminution of any rents payable under this Lease; 233138 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 Note Fund. Section 8.8. covenant For the Benefit of the Noteholder. 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 Note. Each of the terms and provisions of this Lease is a covenant for the use and benefit of the holder of the Note, so long as any thereof shall remain outstanding; but upon payment in full of the Note and of all fees and charges of the Paying Agent, all references in this Lease to the Note shall be ineffective, and the holder of the Note shall thereafter have no rights hereunder, save and except those that shall have theretofore vested. 233138 27 f� �lWR I"01M 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. Section 9.4. Disclaimer 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. 233138 28 f`c71Ti L�0Mr1 PREPAYMENT 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 Proj ect . 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. 233138 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. 233138 30 M q.IL"MOWS ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING Section 11.1. 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 Note 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 Note. Section 11.3. Restriction on Mortgage or Sale of Project 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. 233138 r 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 (1) 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 maj,eure 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 233138 32 paragraph, Lessee shall not be deemed in default during the continuance ,of such inability. The term "force maieure" 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 in the 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 233138 33 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. (i:ii) 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 at law or in equity to require Lessee to perform In no event however, shall the Lessee be liable under Article 12 in excess of the moneys appropriated by it any on 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; (i) 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 233138 34 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. Agreement 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 Charae. Whenever any event of default referred to in Section 12.1, Clause (i) 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. 233138 35 ARTICLE XIII ADMINISTRATIVE PROVISIONS Section 13.1. 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 I nvalidate or render unenforceable any other provision hereof. Section 13.5. Amendments, Changes 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. SectionCaptions. 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. 233138 36 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 233138 37 CITY OF OTSEGO, Lessee By Its Mayor Its Clerk Signature page to Lease With Option to Purchase Agreement. 233138 38 STATE OF MINNESOTA COUNTY OF WRIGHT The foregoing instrument was acknowledged before we this day of , 199_, by Norman F. Freske, the Mayor, and Jerome Perrault, the City Clerk of Otsego, Minnesota, a un micipal corporation on behalf of said corporation. Notary Public STATE OF MINNESOTA COUNTY OF WRIGHT The foregoing instrument was acknowledged before me this day of , 199_1 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 233138 39 EXHIBIT A DESCRIPTION OF PROJECT AND LAND An approximately 81600 square foot community center to be located on the following described parcel: The north 535.00 feet of the south 885.00 feet of the east 480.00 feet of the north half of the Northwest Quarter of Section 20, Township 121, Range 23, Wright County, Minnesota. 233138 Month 233138 SCHEDULE OF RENTAL PAYMENTS Total Payment Payment Principal Date Year Number Component Interest Rental Component Payment EXHIBIT C SCHEDULE OF PURCHASE OPTION PRICE AND CASUALTY VALUES PURCHASE OF PROJECT After Payment Number 233138 Purchase Option Price EXHIBIT D 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 January 1, 1993 (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: January _, 1993. CITY OF OTSEGO Lessee Its Treasurer Subscribed and sworn to before me this day of 199_. Notary Public Notarial Seal his Certificate of Lessee different from in the text hereof. 233138 Incumbency must be executed by an officer of those persons whose signatures are listed 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. 230434 ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, Lessor President It ,/ Secretary 37 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. 230434 ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, Lessor retary 37 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 — It ecretary 230434 37 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 Its President Secreta 230434 37 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. 230434 ECONOMIC CITY OF DEVELOPMENT AUTHORITY OF THE OTSEGO, Lessor ry 37 I` CITY OF OTSEGO, Lessee B� Its Mayor It Clerk Signature page to Lease With Option to Purchase Agreement. 230434 CITY OF OTSEGO, Lessee B� Its Mayor It Clerk Signature page to Lease With Option to Purchase Agreement. 230434 CITY OF OTSEGO, Lessee Its Mayor Its Clerk Signature page to Lease With Option to Purchase Agreement. 230434 CITY OF OTSEGO, Lessee Its Mayor Itl� Clerk Signature page to Lease With Option to Purchase Agreement. 230434 CITY OF OTSEGO, Lessee Itsi' Clerk Signature page to Lease With Option to Purchase Agreement. 230434 38 CITY OF OTSEGO, Lessee Its Mavor It�'Cler Signature page to Lease With Option to Purchase Agreement. 230434 38 FORM NO. 9-M �::� ••••• • •• a• • Form No. 9-M-WARRANTY DEED Corporation or Partnership to Corporation or Partnership No delinquent taxes and transfer entered; Certificate of real estate value ( ) filed ( ) not required; Certificate of Real Estate Value Number County Auditor by Deputy STATE DEED TA% DUE HEREON: $ Date: , 1992 ( (reserved for recording data) FOR VALUABLE CONSIDERATION, the City of Otsego, a Municipal Corporation under the laws of the State of Minnesota, Grantor, hereby conveys and warrants to the Otsego Economic Development Authority, a Political Subdivision of the State of Minnesota, Grantee, real property in Wright County, Minnesota described as follows: 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. together with all hereditaments and appurtances belonging thereto, subject to the following exceptions: Easements, restrictions and reservations of record, if any. Seller certifies this transaction totals less than $500. Affix Deed Tax Stamp Fiere Zts Mayor is Clerk STATE OF MINNESOTA SS. COUNTY OF WRIGHT _ The foregoing instrument was acknowledged before me this iS th day of Q e c -e w� � e ✓' , 1992, by Norman Freske, the Mayor of the City of Otsego, a Municipal Corporation under the laws of Minnesota on behalf of the City. NOTARIAL STAMP OR SEAL THIS INSTRU!ffiIT WAS DRAFTED BY Radzwill Law Office P.O. Box 369 705 Central Avenue East St. Michael, Minnesota 55376 SIGNATURE OF NOTARY PUBLIC Tax Statements for the real property described in this instrument should be sent to: City of Otsego 13474 N.E. 95th Street Elk River, MN 55330 Tax ID # 118-500-202100 FORDS NO. 9-H Form No. 9--M-WARRANTY DEED Corporation or Partnership to Corporation or Partnership No delinquent taxes and transfer entered; Certificate of real estate value ( ) filed ( ) not required; Certificate of Real Estate Value Number County Auditor by Deputy STATE DEED TA% DUE HEREON: $ Date: T� �� � � �� 1992 ( (reserved for recording data) FOR VALUABLE CONSIDERATION, the City of Otsego, a Municipal Corporation under the laws of the State of Minnesota, Grantor, hereby conveys and warrants to the Otsego Economic Development Authority, a Political Subdivision of the State of Minnesota, Grantee, real property in Wright County, Minnesota described as follows: 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. together with all hereditaments and appurtances belonging thereto, subject to the following exceptions: Easements, restrictions and reservations of record, if any. Seller certifies this transaction totals less than $500. �i it'il7!T �I 1�:'�7�'S73� Mayor s Clerk STATE OF ?SINNSSOTA SS. COUNTY OF WRIGHT _ The foregoing instrument was acknowledged before me this tlS th day of � z c-� � � � � , 1992, by Norman Freske, the Mayor of the City of Otsego, a Municipal Corporation under the laws of Minnesota on behalf of the City. NOTARIAL STAMP OR SEAL tt � 1 i � �• � � a c. THIS INSTRUMSt�]T WAS DRAFTED BY Radzwill Law Office P.O. Box 369 705 Central Avenue East St. Michael, Minnesota 55376 SIGNATURE OF NOTARY PUBLIC i Tax Statements for the real property described in this instrument should be sent to: City of Otsego 13474 N.E. 95th Street Elk River, MN 55330 Tax ID # 118-500-202100 FORM NO. 9-M DEEDORPORATION OR PARTNERSHIP TO CORPORATION OR PARTNERSHIP Form No. 9-M-WARRANA x DEED Corporation or Partnership to Corporation or Partnership No delinquent taxes and transfer entered; Certificate of real estate value ( ) filed ( ) not required; Certificate of Real Estate Value Number County Auditor by Deputy STATE DEED TA% DUE HEREON: Date: Minnesota Uniform Conveyancing Blanks (1978) 1992 I (reserved for recording data) FOR VALUABLE CONSIDERATION, the City of Otsego, a Municipal Corporation under the laws of the State of Minnesota, Grantor, hereby conveys and warrants to the Otsego Economic Development Authority, a Political Subdivision of the State of Minnesota, Grantee, real property in Wright County, Minnesota described as follows: 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. together with all hereditaments and appurtances belonging thereto, subject to the following exceptions: Easements, restrictions and reservations of record, if any. Seller certifies this transaction totals less than $500. Ell I SS. instrument was By Norman Fresk Its Mayor rome Perra Clerk acknowledged before me this 1S th day of 1992, by Norman � � � Freskethe Mayor of the a Municipal Corporation under the l ,aws of Minnesota on behalf NOTARIAL STAMP OR SEAL ,ult i 1 r u THIS INSTRUMENT WAS DRAFTED BY Radzwill Law Office P.O. Box 369 705 Central Avenue East St. Michael, Minnesota 55376 City of Otsego, of the City. Tax Statements for the real property described in this instrument should be sent to: City of Otsego 13474 N.E. 95th Street Elk River, MN 55330 Tax ID # 118-500-202100 ..._i .... _ :... �. ____ �. 1......� N�:�'•�,' 10 "�� 1'�� 1t� fJT:-;E�=t_�T�:=�LJNSHIF' st;�— - - � �-...... f�Y/ � �l l'!/AAf � l�"�t .. �I/'�'' �_ F'. 1:'r, 4' �7/� !.-/t yL 7 "JtrJ�LLL�--�i�i Post�ItTM brand fax transmiitat memo 7671 dot pages ► To Ftom Y �Q- . Co. 1�ePt. Phone # . Fax � Fax # . ,� .. . `'L..� ..._...__.y _.. � � �� :,' ��' . �-- / L_J.«�._.____..._ -_ ____...-. t-____.., __ i� ., gyp. ,.. / .. �; ., ^J ..- •�� f 1 ;j '1 ��J �� i _ �� �� ff� r'i / �-�/ / ,� t, I �� � . f ✓ ; :}i ·,\:l;:i:;,kt:ri\: . ·U·LJLJ· ;=.i.: ... .-,.-.... i;,�•:.,·,i ._:, I, ':1/::::''.' f : .. '.',: { ,., ... '.;;' .\'i.' I 11:r. Norman F. Freske Mayor City Hall J,' i. . ' . 13474 - 95th Street Northeast Otsego, MN' 55330 July 29, 1992 Investment Securities Since 1939 Minnesota .. Mutual Life Center 400 North Robert Street -Suite 800 Saint Paul, Minnesota 5510,.2091 , Telephone 612/224-1500 Toll Free 1-800•950-4666 __ :rel�QQPiei:...§.12/22.4-5.124 "f!.?/f ;i. -g.cfS"" �A-1 Post-It™ brand x transmittal memo 7671 Dear Mayor, Council and Administration: Please find enclosed the revised cash flow analyses as you requested at the Monday, July 27, 1992 City Council Meeting. I hope this provides you with the information you desired. As you will note, I have enclosed the following: 1.A $300,000 issue over a ten year period. 2.A $500,000 bond spread over ten years. 3.A revised $500,000 issue over twenty years. f�m�rm�r�i ! h��� m�2� t�� 2�!�� 1�!� ��F����: !� !??� ��� �!��n�ted the I c>pl,,JlzcJ kterest Jactor Lorn JI Jie anJyscs. f have also con�/�J luA counsel and was informed that the legal opinion would not be $8 1 000; but rather a fee not to exceed $4 1 000. I look forward to meeting with you at your August 1 0t 1992 City Council 1-'Ieeting to discuss this matter with your further. Should you desire any additional information prior to that time, please· do not hesitate to contact mo. Thank you for your time and consi_deration. 1PT/eh enclosure cc: Jerome Perrault Elaine Beatty James Barthel Ronald Black Very truly yours, ' . JURAN & MOODY, INC. �?P Thomas P. Truszinski Vice President LAW OFFICES B]RIGGS AND MOICGAN PHOFESSIONAE ASSOCIATION WEZTERS DIRECT DIAL NTtMBER (612) 223-6628 Stanley Ellison Radzwill Law Office 705 Central Avenue East P.O. Box 369 St. Micheal, MN 55376 2200 FIRST NATIONAL BANg BUILDING SAINT PAUL� MINNESOTA 55101 TELEPHONE (g12) 223 - g600 FACSIMILE (g12) 223-g450 October 28, 1992 MINNEA.POLIS OFFICE 2400 I D S CENTER MINNF.APOLIS� MINTNESOTA 55402 TELEPHONE (612) 334-8400 FACSIMILE (612) 334-8650 RE: Economic Development Authority of the City of Otsego, Minnesota - $540,000 Public Project Revenue Bonds, Series 1992 (City of Otsego Lease with Option to Purchase Project) Dear Mr. Ellison: Enclosed at the direction of Mary Ippel of this office in connection with the above referenced matter, please find FIRST DRAFTS of the operative as well as closing documents for your review and comments. Please do not hesitate to caIl either Mary or me should you have any questions or comments regarding this matter. ery truly yours, Paralegal TJH:kmi ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO, MINNESOTA $540,000 PUBLIC PROJECT REVENUE BONDS, 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 $540,000 Public Project Revenue Bonds, Series 1992 (City of Otsego Lease With Option to Purchase Project) (the "Bonds"). The proceeds of the Bonds are being used to finance a project (the "Project"), as defined in a Lease With Option to Purchase Agreement dated 11 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 real property on which the Project is to be constructed will be transferred by the City to the Authority by a Ground Lease Agreement dated 11 1992 (the "Ground Lease"). The Authority has adopted a Revenue Bond Resolution on 1992 to, among other things, secure the payment of the Bonds. The Bonds have been purchased by (the "Purchaser"). Upon discharge of the Bonds 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 Members o paragraph zz�s7o Office Mayor Councilmember Councilmember Councilmember Councilmember Clerk Deputy Clerk Treasurer Attorney Term Appointed Appointed Appointed Appointed f the City Council and the City officials listed in this were the duly elected, qualified and acting members at the time the resolution identified in paragraph 3 below was adopted. 3. Resolution. A resolution (the "Resolution") authorizing the execution of the Lease and the Ground Lease was adopted at a meeting of the City Council on , 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 and the Ground Lease. 5. AuthorizincL Action. The City has authorized by all necessary action the execution, delivery and due performance of the Lease and the Ground 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 Ground 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 are no 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 I the Ground Lease and the Revenue Bond Resolution and compliance by the City with the provisions thereof and of the Bonds 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 instrument 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 and the Ground Lease will not be in default in the performance and observance of any of the terms or conditions of the Lease and the Ground Lease on its part to be performed or observed. 22�a�o 2 10. 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 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, the Ground Lease or the Revenue Bond Resolution or in any way contesting or affecting any authority for or the validity of the Bonds, the Resolution, the Lease, the Ground 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 Bonds or any of the documents described in the Resolution, or questioning the authority or proceedings pursuant to which the Bonds are being issued, the validity of the Bonds 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, the Ground 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. z27s7o 3 IN WITNESS WHEREOF, the undersigned have hereunto CITY OF OTSEGO, MINNESOTA By Mayor By Clerk ( SEAL) set Signature Page of CERTIFICATION OF THE CITY OF OTSEGO, MINNESOTA, relating to $540,000 Public Project Revenue Bonds, Series 1992 (City of Otsego Lease With Option to Purchase Project) zz�s�o 4 Cur Second Century MEMBER FDIC December 13 1992 4dilliam S. Radzwill City of Otsego 705 Central Ave. St. Michael, MN 55376 RE: City of Otsego EDA loan request Dear Bill: The Bank of Elk River has approved a loan to the City of Otsego Economic Development Authority. Terms of the loan will be: 1. $450,000 or a maximum of 70% of the appraised value of the property, whichever is lower. 2. 15 year term, interest payable semiannually, principal payable annually. 3. Interest rate will be 6% for the first 5 years and will adjust to 300 basis points above the Federal Reserve Discount rate in effect on the 5th and 10th year anniversaries of the loan. A 100 basis point cap will be placed on each adjustment. 4. There will be no prepayment penalty 5. The loan will be secured by a mortgage on the property and an assignment of the lease payments from the City to the EDA. Conditions: 1. A Briggs and Morgan opinion stating this mortgage is a bank qualified tax exempt obligation. 2. A Briggs and Morgan opinion stating the Otsego EDA has the authority under Minnesota law to enter into this transaction. 3. The appraisal be done by a federal general certified appraiser at the expense of the City. 4. The lease between the City and the EDA have the same term as the mortgage. If you have any questions,,piease call me at 441-1000. Si ely, Patrick H. Dwyer, Sr. V.P. IIs We're banking on our town! BANx OF ELK mvEp, 630 MAIN, ELK RIVER, MN 55330 PHONE 441-1000 Area Code (612) FAX 441-0847 DATE: T 0 : e' i I FROM: PAGES TO FOLLOW Please contact at (612) 441-1000 if problems with transmission occur. C r NO'V 30 '92 17:45 BANK OF ELK RIMER F'. 1i2 Wealr Umldng on our town -BANIK OF EILK IRJ:VJE IR - 630 Iv CMM", ELK :RIVER, MN 55334 P�i�NE 1-IOQO Area Code (612) FAX 441-0�7 DATE: T0:c�c�� FROM: PAGES TO FOLLOW 1?lease contact at (412) 441-1000 it problems with transmission occur. �<Ow - N� \ter' f SS) � lc3� q4,4. 1 �kqc �4 IA�LCJ 1A d� 673 NOV 30 '9E 17:46 ERNK OF ELK RIVER TVe're banking on our town! 'FJW IRANK OF ELK MVEn 630 MAIN STf, ELK R VM MN 55330 rH40NE 4414000 ELK R rER MALT:, 846 FREEP©RT AVE, i PHONE 441w9000 Cw Second Centw7 mlimbes PIMC. Dec@mbar 1, 1992 �iilliam S, Radzwill City of Otsego 705 Central Ave. St. Michael, MN 55376 RE: City of Otsego EDA loan request Dear Bill: Ths Bark of Elk River has approved a loan to the City of Otsego Economic Development Authority. Terms of the loan wi i 1 be; 1. $450y000 or a maximum of 70� of the appraised value of the property, whichever is lower. �. 15 year term, interest payable semiannually, principal payable annually. 3. Interest rate will be 6% for the first 5 years and will adjust to 300 basis points above the Federal Reserve Discount rate in effect on the 5th and 10th year anniversaries of the loan. A 100 basis point cap will be placed on each adjustment. 4. There will be no prepayment penalty 5. The loan will be secured by a mortgage on the property and an assignment of the lease payments from the City to the EDA. Conditions: I A Griggs and Morgan opinion stating this mortgage is a beak qualified tax exempt obligation. 2. A Briggs and Morgan opinion Stating the Otsego EDA has the authority under Minnesota law to enter into this transaction. 3. The appraisal be done by a federal general certified appraiser at the expense of the City. 4, The lease between the City and the EDA have the same term as the mortgage. If you have any questions, please call me at 441-1000. Si ely, Patrick H. Dwyer, sr, v.P. UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WRIGHT ECONOMIC DEVELOPMENT AUTHORITY OF THE CITY OF OTSEGO $450,000 Public Project Promissory Non -Recourse Note, Series 1993 (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 Series 1993 Public Project Note Fund (the "Note 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 26,000 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 Note 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, 20030 The interest rate shall be adjusted on these dates to a rate equal to 233163 3% above the Discount Rate currently in effect but not to exceed 1% above the interest rate on the Note 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 Note Register or any successor named pursuant to the terms of the Note 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 Note 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 Note 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 Note 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 Note Resolution. This Note is issued in accordance with an authorizing resolution (the "Note Resolution") duly adopted by the Authority, setting forth the terms upon which such Note is issued and describing the security therefor, to which Note Resolution reference is made for a full description of such terms, condi- tions and security. The Note 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 January 1, 1993. The Note is secured by the Note Resolution and by a mortgage (the "Mortgage") granted to the Noteholders in the Project and an assignment of leases and rents (the "Assignment"), and reference is made to the Lease, the Mortgage, the Assignment and Note Resolution and amendments thereof for a description of the revenues pledged to secure the payment of the Note, the nature and extent of the security thereby created, the rights of the registered owner of the Note, the rights, duties, immunities and obligations of the Authority and the rights, duties and obligations of the Lessee. The obligation of the Lessee under 233163 2 the Lease to make Lease Payments sufficient to pay the principal of and interest on the Note 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. The entire principal amount %J the Note 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 Note Resolution, all installments of principal on the Note 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 Note then outstanding may, at the option of the Authority, or shall, at the request of the Noteholders, become or be declared due and payable before the stated maturity thereof, together with interest accrued thereon, all as provided in the Note Resolution. Prior to the date on which any installments of principal on the Note 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 Note to be redeemed to be mailed to the Paying Agent and the Noteholder, at the address shown on the Note Register. All installments of principal on the Note so called for redemption will cease to bear interest on the specified redemption date, provided funds for their redemption have been duly deposited. This Note is issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, and pursuant to the Note Resolution adopted and approved by the Authority, which resolutions authorized the Project and the issuance of the Note as a special obligation payable solely from 233163 3 revenues derived by the Authority from the Project. Lease Payments are to be paid to the Authority and credited to the Note Fund as a special trust fund account created by the Authority and have been and are hereby pledged for that purpose. The Note 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, 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 Note or interest thereon. This Note 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 Note issued under the Note 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 Note Resolution, including, but not limited to, the collection and proper segregation and application of all funds described in the Note Resolution. IT IS HEREBY CERTIFIED, RECITED AND DECLARED that the Authority has duly created said Note 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 Note is secured by a pledge of and first lien upon said rentals from said Project as more fully provided in the Note Resolution authorizing this Note 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 Note 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 233163 0 required; and that the issuance of this Note does special or general indebtedness of the Authority constitutional or statutory limitation. 233163 5 not cause the to exceed any IN WITNESS WHEREOF, the Economic Development Authority of the City of Otsego has caused this Note 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 permitted by law and has caused this Note to be dated as of January Z, 1993. I zl� S1 233163 CERTIFICATE OF REGISTRATION The transfer of ownership of the principal amount of the within Note may be made only by the registered owner or his, her or its legal representative last noted below. DATE OF REGISTRATION Januar Z9 1993 233163 REGISTERED OWNER SIGNATURE OF NOTE REGISTRAR The Bank of Elk River � 670 Main Street Elk River, MN 55330�, REGISTER OF PARTIAL PAYMENTS The principal amount of the attached Note has been prepaid on the dates and in the amounts noted below: Date Amount Signature of Noteholder Signature of Note Registrar If a notation is made on this register, such notation has the effect stated in the attached Note. Partial payments do not require the presentation of the attached Note to the Note Registrar, and a Holder could fail to note the partial payment here. 233163 0 The following abbreviations, when used in the inscription on the face of this Note, 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 - as joint tenants with right of survivorship and not as tenants in common UTMA - as Custodian for (Cust) under the (State) Transfers to Minors Act 233163 (Minor) Uniform