95-085 RES
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RESOLUTION 95 - ~
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION APPROVING EXTENSION AGREEMENT FOR
INDUSTRIAL DEVELOPMENT REVENUE BOND
(SCHERER LIMITED PARTNERSHIP PROJECT)
WHEREAS, pursuant to a Loan and Purchase Agreement dated as of
December 1, 1985 (the "Loan Agreement"), among the City of
Elk River (the "City"), Scherer Limited Partnership, a
Minnesota limited partnership (the "Partnership"), and
Highland Bank (formerly Security State Bank of St.
Michael), a Minnesota banking association (the "Bank"), the
City has issued its $1,400,000 City of Elk River Industrial
Development Revenue Bond (Scherer Limited Partnership
Project) (the "Bond") to the Bank and loaned the proceeds of
the Bond to the Partnership; and,
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WHEREAS, the Loan Agreement obligates the Partnership to make Loan
Repayments in amounts and at times sufficient to pay
principal of and interest on the Bond; and,
WHEREAS, the Bond bears interest at a variable rate that is adjusted
quarterly, on January 1, April 1, July 1, and October 1 of
each year, to equal the rate which is one percent per annum
above the bond equivalent yield on United states Treasury
bills having maturities of 180 days, as established on the
date of each such interest rate adjustment, but which rate
shall never be less than 7.00 percent per annum nor greater
than 13.00 percent per annum; and,
WHEREAS, the Bond is payable in monthly installments of principal and
interest (the amount of which is adjusted on each interest
rate adjustment date), based on a twenty-year amortization
scheduled, which payments commenced on February 1, 1986;
and,
\VHEREAS, the Bond provides for a final payment on January 1, 1996, of
all principal of and interest due on the Bond (the "Balloon
Payment"); and,
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WHEREAS, the Partnership and the Bank desire to eliminate the :galloon
Payment and extend the final maturity of the Bond until
January 1, 2006, as provided herein.
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NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Elk River, Minnesota, that the form of Extension Agreement presented to
this meeting and the amendments to the Bond and the Loan Agreement
contemplated thereby, are hereby approved, and the Mayor and City Clerk
are authorized to execute and deliver the Extension Agreement on behalf of
the City, substantially in the form of file, but with all such changes therein
as may be approved by the officers executing the same, which approval shall
be conclusively evidenced by the execution thereof.
Passed and adopted by the City Council of the City of Elk River,
Minnesota, this 18th day of December, 1995.
ATTEST:
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Sandra A. Thackeray, City Clerk
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