95-092 RES
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RESOLUTION 95 - 9L
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION APPROVING EXTENSION AGREEMENT FOR
INDUSTRIAL DEVELOPMENT REVENUE BOND
(JAY MORRELL & JOHN PLAISTED 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"), Jay Morrell and John Plaisted
Partnership, a Minnesota general partnership (the
"Partnership"), and Highland Bank (formerly Security State
Bank of St. Michael), a Minnesota banking association (the
"Bank"), the City has issued its $400,000 City of Elk River
Industrial Development Revenue Bond (Jay Morrell and
John Plaisted 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,
\VHEREAS, John Plaisted and the Bank have represented to the City
that the Partnership has been dissolved, the Bank has
released Jay Morrell from all obligations under the Loan
Agreement and the Bond, and John Plaisted (the "Borrower")
is the successor in interest to the Partnership and has
assumed the obligations of the Partnership under the Loan
Agreement and 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,
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'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
schedule, which payments commenced on February 1, 1986;
and,
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WHEREAS, the Bond provides for a final pa~rment on January 1, 1996, of
all principal and interest due on the Bond (the "Balloon
Payment"); and,
WHEREAS, the Borrower and the Bank desire to eliminate the Balloon
Payment and extend the final maturity of the Bond until
January 1,2006, as provided herein.
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 on 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 21st day of December 1995.
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ATTEST:
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Sandra A. Thackeray, City Clerk