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RES 08-058Extract of Minutes of a Meeting of the City Council of the City of Elk River, Minnesota Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Elk River, Minnesota, was duly held at the City Hall in said City on Monday, the 4th day of August, 2008, at 6:30 P.M. The following Council Members were present: Mayor Klinzing, Councilmembers Farber, Gumphrey, Motin and Zerwas and the following were absent: None During said meeting Council Member Zerwas then introduced the following resolution and moved its adoption: RESOLUTION NO. 08-58 AUTHORIZING THE ISSUANCE AND SALE OF $1,000,000 INDUSTRIAL DEVELOPMENT REVENUE BOND (METAL CRAFT MACHINE & ENGINEERING, INC. PROJECT), SERIES 2008A AND $4,000,000 INDUSTRIAL DEVELOPMENT REVENUE BOND (METAL CRAFT MACHINE & ENGINEERING, INC. PROJECT), SERIES 2008B TO FINANCE A PROJECT The motion for the adoption of the foregoing resolution was duly seconded by Council Member Gumphrey, and after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof: Mayor Klinzing, Councilmembers Farber, Gumphrey, Motin and Zerwas and the following voted against the same: None whereupon said resolution was declared duly passed and adopted. S:AIndustrial Siting~Metal Craft\IDB\PCDOCS-#2209123-v2- Elk River Metal Craft RESOLUTION_AUTHORIZING_ISSUANCE_AND_SALE.DOC • RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF $1,000,000 INDUSTRIAL DEVELOPMENT REVENUE BOND (METAL CRAFT MACHINE & ENGINEERING, INC. PROJECT), SERIES 2008A AND $4,000,000 INDUSTRIAL DEVELOPMENT REVENUE BOND (METAL CRAFT MACHINE & ENGINEERING, INC. PROJECT), SERIES 2008B TO FINANCE A PROJECT BE IT RESOLVED by -the City Council of the City of Elk River (the "Issuer"), as follows: 1. The City Council has received a proposal from Metal Craft Machine & Engineering, Inc., a Minnesota corporation ("Metal. Craft") and Mowry Properties, LLC, a Minnesota limited liability company ("Mowry" and together with Metal Craft the "Borrower"), that the Issuer undertake to finance a certain Project as herein described, pursuant to Minnesota Statutes, Sections 469.152 through 469.1651 (the "Act"), through issuance by the Issuer of its $1,000,000 Industrial Development Revenue Bond (Metal Craft Machine & Engineering, Inc. Project), Series 2008A (the "Series 2008A Bond") and its $4,000,000 Industrial Development Revenue Bond (Metal Craft Machine & Engineering, Inc. Project), Series 2008B (the "Series 2008B Bond," and together with the Series 2008A Bonds, the "Bonds"). The Issuer held a public hearing with respect to the Project on July 21, 2008 after duly publishing notice thereof. • 2. The Project consists of the construction of an approximately 63,000 square foot manufacturing facility for medical devices, including related equipment and furnishings, located at 13760 Business Center Drive in the City of Elk River, Minnesota (the "Property") and the acquisition and installation of equipment (the "Equipment") therein. 3. It is proposed that, pursuant to (a) a Loan Agreement dated as of August 1, 2008, among the Issuer, GE Government Finance, Inc. (the "Lender") and the Borrower (the "Equipment Loan Agreement"), the Issuer loan the proceeds of the Series 2008A Bond to Metal Craft to finance the Equipment, and (2) a Loan Agreement dated as of August 1, 2008, among the Issuer, the Lender and the Borrower (the "Property Loan Agreement"); the Issuer loan the proceeds of the Series 2008B Bond to Mowry to finance the Property. The Property and the Equipment are hereafter referred to as the "Project". The Property Loan Agreement and the Equipment Loan Agreement are hereafter referred to as the "Loan Agreement". Proceeds of the Bonds will be funded by the Lender and disbursed from (a) an escrow fund pursuant to the terms of an Escrow Agreement dated as of August 1, 2008 by and among the Lender, the Issuer, the Borrower (the "Property Escrow Agreement") and the escrow agent named therein, and (b) an escrow fund pursuant to the terms of an Escrow Agreement dated as of August 1, 2008 by and among the Lender, the Issuer, the Borrower (the "Equipment Escrow Agreement") and the escrow agent named therein, collectively the Property Escrow Agreement and the Equipment Escrow Agreement are referred to as the "Escrow Agreement." The loan payments to be made by the Borrower under the Loan Agreement are fixed so as to produce revenues sufficient to pay • the principal of, premium, if any, and interest on the Bonds when due. Payment of the Bonds will be secured as provided in the Loan Agreement and the Escrow Agreement. S:\Industrial Siting\Metal Craft\IDB\PCDOCS-#2209123-v2- Elk_River_Meta]_Craft_RESOLUTION_AUTHORIZING_ISSUANCE_AND_SAI,E. DOC • 4. Forms of the following documents (collectively, the "Bond Documents") have been submitted to the City Council for approval: (a) the Loan Agreement (b) the Escrow Agreement (c) the Tax Regulatory Agreement, dated as of August 1, 2008, among the Issuer, the Lender and the Borrower 5. It is hereby found, determined and declared that: (a} it is desirable that the Bonds be issued by the Issuer upon the terms set forth in the forms of the Loan Agreement and the Escrow Agreement and herein; (b) the loan payments under the Loan Agreement are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Bonds when due, and the Loan Agreement also provides that the Borrower is required to pay all expenses of the operation and maintenance of the Project, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all taxes and special assessments levied upon or with respect to the Project premises and payable during the term of the Loan Agreement; and • (c) under the provisions of Minnesota Statutes, Section 469.155, and as provided in the Loan Agreement, the Bonds are not to be payable from or charged upon any funds other than the revenues pledged to the payment thereof; the Issuer is not subject to any liability thereon; no holder of the Bonds shall ever have the right to compel any exercise by the Issuer of its taxing powers to pay the Bonds or the interest or premium thereon, or to enforce payment thereof against any property of the Issuer except the interests of the Issuer in the Loan Agreement; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Issuer; the Bonds shall recite that the Bonds, including interest thereon, is payable solely from the revenues pledged to the payment thereof; and, the Bonds shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation. 6. The forms of the Bond Documents and exhibits thereto shall be subject to the review and approval of the City. Administrator and the City Attorney, as appropriate. The Bond Documents are approved substantially in the form submitted. The Loan Agreement, the Escrow Agreement and the Tax Regulatory Agreement are directed to be executed in the name and on behalf of the Issuer by the Mayor and the City Administrator. Any other documents and certificates necessary to the transaction described above shall be executed and delivered by the appropriate Issuer officers. Copies of all of the documents necessary to the transaction herein described shall be delivered, filed and recorded as provided herein and in the Bond Documents. 7. The Issuer shall proceed forthwith to issue its Bonds, in the form and upon the terms set forth in the Loan Agreement and the exhibits thereto. The offer of the Lender to purchase the Bonds at par at the interest rate specified in the Loan Agreement (not exceeding 7% 2209123v2 2 • per annum) as of the date of issuance of the Bond, is hereby accepted. The Mayor and the Administrator are authorized and directed to confirm the interest rate or rates and prepare and execute the Bonds as prescribed in the Loan Agreement and to deliver it to the Lender. 8. The Mayor and the Administrator and other officers of the Issuer are authorized and directed to prepare and furnish to the Lender certified copies of all proceedings and records of the Issuer relating to the Bonds, and such other affidavits and certificates as may be required to show the facts relating to the legality of the Bonds as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the Issuer as to the truth of all statements contained therein. 9. The approval hereby given to the various documents referred to above includes approval of such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by the Issuer's Bond Counsel, the City Attorney and the Issuer officials authorized herein to execute said documents prior to their execution; and said Issuer officials are hereby authorized to approve said changes on behalf of the Issuer. The execution of any instrument by the appropriate officer or officers of the Issuer herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. In the absence of the Mayor or the Administrator, any of the documents authorized by this resolution to be executed maybe executed by an acting or duly designated official. • Adopted: August 4, 2008 ~_~~ May L (~ Cll. r-~. Administrator • 2209123v2 3