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HomeMy WebLinkAboutCity Council Resolution 1978-741CITY OF PLYMOUTH Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Plymouth, Minnesota, was hel 6th day of November , 1978 . The following members were present: Mayor _ Mor Hunt, ouncilmembers Hoyt, Neils, Seibold and Spaeth The following members were absent: None max* Councilmember Neils introduced the following Resolution and moved s adoption: RESOLUTION NO. 78-741 A RESOLUTION PROVIDING FOR THE ISSUANCE AND SALE OF REVENUE BONDS PURSUANT TO CHAPTER 474, MINNESOTA STATUTES, TO PROVIDE FUNDS TO BE -LOANED TO GARLOCK EQUIPMENT CO. FOR AN INDUSTRIAL DEVELOPMENT PROJECT BE IT RESOLVED By the City C-incil of the City of Plymnuth, Minnesota, as follows: 1. Authority. The City is, by the Constitution and Laws of the State of Minnesota, including Chapter 474, Minnesota Statutes, 35 amended (the "Act") authorized to issue and sell its revenue bonds for the purpose of financing the cost of construction of authorized projects, and to enter into contracts necessary or convenient in the exercise of the powers granted by the Act and to pl�•dge revenues of the project and otherwise secure the revenue bonds. Z. Authorization of Series of Bonds. The City Council hereby determines that it is necessary and expedient to authorize, and the City Council does hereby authorize, the issuance of revenue bonds of the City in the aggregate principal amount of One Million One Hundred Fifty Thousand Dollars ($1,150,000) pursuant to the Act to provide money to be loaned to Garlock Equipment Co., a Minnesota corporation (the "Company"), to finance costs of constructing an industrial plant (the "Project Building") to be used by the Company in its business, together with necessary building service equipment (the "Project Equipment") to be located per- manently in and become a part of the Project Building or the site thereof (the "Project Site") and necessary site improvements (the "Project" as more fully defined in the Loan Agreement hereinafter mentioned). In order to provide Financing for the Project, the City shall issue and sell its $1,150,000 City of Plymouth Industrial Development Revenue Bond (Garlock Equipment Co. Project), Series 1978 (the "Bond"). 3. Documents Presented. Forms of the following do(.uments relating to the Bond and the Project have been submitted to and examined Dy the City Council and are now on file in the office of the City Clerk: (a) Loan and Purchase Agreement (the "Loan Agreement"), dated as of October 1, 1978, by and among the City, the Company and the Farmers & Mechanics Savings Bank of Minneapolis (the "Bank") whereby, among other things, the City agrees to sell and the Bank agrees to purchase the Bond, the City agrees to make a loan to the Company of the proceeds of the sale of the Bond and the Company covenants to complete the Project and to pay amounts sufficient to provide for the prompt payment of the principal of and interest on the Bond; and (b) Guaranty Agreement (the "Guaranty Agreement") dated as of October 1, 1978, between the Bank and the Company (the "Guarantor") whereby the Company guarantees the full and prompt payment of installments of principal of, premium (if any) and interest on the Bond when due (this document not to be executed by the City); and (c) Combination Mortgage and Security Agreement (the "Mortgage") dated as of October 1, 1978, by and between the Company and the Bank, whereby the Company mortgages the Project Site, the Project Building and the Project Equipment (the "Project Facilities") as security for the Bond (this document not to be executed by the City). (d) Assignment and Pledge Agreement whereby the City assigns to the Bank all of its interest in the Loan and Purchase Agreement and Loan Repayments of the Company thereunder, for the purpose of securing the Bond. (Attached hereto as Exhibit 2) 4. Findings. It is hereby found, determined and declared that: (a) The Project, as described in the Loan Agree- ment, constitutes a project authorized by and described in Section 474.02, Subd. 1 of the Act. (b) The purpose of the Project is and the effect thereof will be to promote the public welfare by: preventing the emergence of blighted and marginal lands and areas of chronic unemployment; preventing economic deterioration; the development of sound industry and commerce to use the available resources of the community, in order to retain the benefit of the community's existing investment in educational and public service facilities; halting the movement of talented, educated personnel to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities; and adding to the tax base of the City and the County and School District in which the Project Facilities will be located. -2- (c) The Project has been approved by preliminary resolution of the Council duly adopted August 14, 1978 and by the Commissioner of Securities of the State of Minnesota as tending to further the purposes and poli- cies of the Act. (d) The issuance and sale of the Bond, the execu- tion and delivery of the Loan Agreement and the perfor- mance of all covenants and agreements of the City contained in the Bond and the Loan Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Bond and Loan Agreement valid and binding obligations of the City in accordance with their terms, are authorized by the Act. (e) There is no litigation pending or, to the best of its knowledge threatened, against the City relating to the Project or to the Bond or Loan Agree- ment, or questioning the organization of the City or its power or authority to issue the Bonds or execute the Loan Agreement. (f) The execution, delivery and performance of the City's obligations under the Bond and the Loan Agreement have been fully authorized by all requisite action and do not and will not violate any law, any order of any court or other agency of government, or any indenture, agreement or other instrument to which the City is a party or by which it or any of its prop- erty is bound, or be in conflict with, result in a breach of, or constitute (with due notice or lapse of time or both) a default under any such indenture, agreement or other instrument. (g) The Loan Agreement provides for payments b the Company to the Holder of the Bond for the account of the City of such amounts as will be sufficient to pay the principal of and interest on the Bond when due. No reserve funds are deemed necessary for this purpose. The Loan Agreement obligates the Company to provide for the operation and maintenance of the Project Facilities, including adequate insurance, taxes and special assess- ments. (h) Under the provisions of Section 474.10 of the Act, and the Bond shall recite that, the Bond is not to be payable from nor charged upon any funds other than amounts payable by the Company pursuant to the Loan Agreement which are pledged to the payment thereof, payments to be made by the Guarantor under the Guaranty Agreement and, in event of default, moneys derived from foreclosure or other enforcement of the Mortgage; the City is not subject to any liability thereon; no Holder -3- of the Bond shall ever have the right to compel the exercise of the taxing power of the City to pay the Bond or the interest thereon, nor to enforce payment thereof against any property of the City; and the Bond shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and such Bond does not constitute an indebtedness of the City within the meaning of any constitutional or statutory limitation. (i) No member of the City Council (i) has a direct or indirect interest in the Project, the Loan Agreement or Bond, (ii) owns any capital stock of or other interest in the Project or the Company, (iii) is an officer or director of the Company, (iv) will be involved in supervising the completion of the Project on behalf of the Company, or (v) will receive any commission, bonus or other remuneration for or in respect of the Project, the Loan Agreement or the Bond. 5. Approval and Execution of Documents. The form of Loan Agreement and form of Assignment and Pledge Agreement, referred to in paragraph 3 is approved. The Loan Agreement shall be executed in the name and on behalf of the City by the Mayor and the City Manager upon execution thereof by the Bank and the Company, in substantially the form on file, but with all such changes therein, not inconsistent with the Act or other law, as may be approved by the Mayor, City Manager and the City Attorney, which approval shall be conclusively evidenced by the execution thereof. The Mortgage and Guaranty Agreement may contain such revisions as may be approved by the parties executing the same. The Mayor, City Clerk and City Manager are authorized to execute and deliver, on behalf of the City, such other documents as are required by the Loan Agreement. 6. Approval of Terms and Sale of Bond. The City shall proceed forthwith to ssue its City of Plymouth Industrial Develop- ment Revenue Bond (Garlock Equipment Co. Project), Series 1978 in the authorized principal amount of $1,150,000 substantially in the form and containing the provisions set forth in the form of Bond attached hereto as Exhibit 1, which provisions are hereby approved and incorporated in this Bond Resolution and made a part hereof. The terms of the Bond shall be as follows: Date The Bond shall be dated the date of delivery thereof. Interest The Bond shall bear interest on the principal amount thereof advanced and unpaid from time to time at the rate of 8.25% per annum, provided, however, that in the event the Bank shall ever be required by -4- final administrative determin- ation, court order, derision or statute to include interest on the Bond in gross income for federal income tax pur- poses, the Bond shall bear interest on the unpaid princi- pal amount at the rate of 9.75% per a:aum from and after the first day of the month following the date from which the interest on the Bond is determined to have been tax- able, interest to maturity payable December 1, 1978, and monthly thereafter on the 1st day of each month. Maturity ovember 1, 1994, but payable An installments on December 1, 11978, and monthly thereafter on the 1st day of each month. Installments Interest only payable December 1, 1978, and monthly thereafter to and including November 1, 1979. Principal and interest payable in 324 installments of $8,875 each on the 1st day of each month commencing December 1, 1979, to and including October 1, 1994, plus a final installment of $ payable November 1, 1994. Prepavment The Bond shall be subject to Privilege prepayment at any time at the option of the City, at the request of the Company in whole or in part as provided in Section 5.05 of the Loan Agreement upon sixty (60) days' prior mailed notice to the last known Holder at par, accrued interest plus a premium of the amount prepaid as follows: 5% premium if prepaid on or before November 1, 1989 4 1/2% premium if prepaid after November 1, 1989, but before November 1, 1990 -5- W W. 4% premium if prepaid after November 1, 1990, but before November 1, 1991 3 1/2% premium if prepaid after November 1, 1991, but before November 1, 1992 3% premium if prepaid after November 1, 1992, but before November 1, 1993 2 1/2% premium if prepaid after November 1, 1993, but before Noveber 1, 1994 Partial prepayments shall be applied to the principal installments last to become due in inverse order of due date. The Bond is also sub- ject to optional redemption at par plus accrued interest in certain events of damage, destruction or condemnation of the Project, change of law, as a result of a court order or decree or if the Bank agrees to finance any future project to be located on the Project Site as provided in Section 5.05 of the Loan Agreement. If a Determination of Taxability shall be made and the Company shall elect not to redeem the Bond, the Bond shall bear interest on the unpaid princi- pal amount at the interest rate of 9.75% per annum from the date from which the interest on the Bond is determined to have been taxable. A single Bond, substantially in the form of Exibit 1 to this Bond Resolution, shall be issued and delivered to the Bank in the -6- 0 authorized principal amount of $1,150,000 and as authorized by . the Act, principal of and interest on the Bond shall be payable at the office of the Bank in Minneapolis, Minnesota. The proposal of the Bank to purchase such Bond at a price of $1,150,000 (100% of par value) is hereby found and determined to be reasonable and is hereby accepted. Pursuant to the Loan Agreement the Bank has agreed to pay the purchase price of the Bond in installments up to the authorized principal amount of the Bond to pay Project Costs, as defined in the Loan Agreement, then due. 7. Execution, Deliver and Endorsement of Bond. The Bond may be in typewritten or printed form and shall be executed by the manual signatures of the Mayor and City Manager and the official seal of the City shall be affixed thereto. When so prepared and executed, the Bond shall be delivered to the Bank upon payment of all or part of the purchase price, and upon receipt of the signed legal opinions of Messrs. Faegre & Benson, and LeFevere, Lefler, Pearson, O'Brien & Drawz, of Minneapolis, Minnesota, co -bond counsel, pursuant to the Loan Agreement. At the time of delivery of the Bond (the "Initial Closing") the Authorized Company Representative shall endorse and acknowledge receipt on Annex A to the Bond the part of the total purchase price paid by the Bank at the Initial Closing and loaned by the City to the Company pursuant to the Loan Agreement at the Initial Closing. At each Subsequent Closing, the Authorized Company Representative shall endorse and acknowledge receipt on Annex A to the Bond the part of the total purchase price paid by the Bank at such Subsequent Closing and loaned by the City to the Company at such Subsequent Closing. The Authorized Municipal Representa- tive shall endorse and acknowledge payment on Annex A to the Bond at the Intitial Closing and each Subsequent Closing. The Bond shall bear interest only on the amount so paid, loaned and endorsed on Annex A, from time to time, and remaining unpaid. The Bond shall contain a recital that it is issued pursuant to the Act, and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. 8. Registration Records. The City Clerk, as bond registrar, shall keep a bond register in which the City shall provide for the registration of the Bond and for transfers of the Bond. The principal of and interest on the Bond shall be paid to the Bank for the account of the Holder entitled thereto in Federal or other immediately available funds. The City Clerk is autho- rized and directed to deliver a certified copy of this Bond Resolution to the County Auditor of Hennepin County, together with such other information as the County Auditor may require, and obtain the certificate of the County Auditor as to entry of the Bond on his bond register as required by the Act and Section 475.63, Minnesota Statutes. 9. Mutilated, Lost, Stolen or Destroyed Bond. If the Bond is mutilated, lost, stolen or destroyed, the City may execute and deliver to the Holder a new Bond of like amount, date, number -7- and tenor as that mutilated, lost, stolen or destroyed; provided that, in the case of mutilation, the mutilated Bond shall first be surrendered to the City, and in the case of a lost, stolen or destroyed Pond, there shall be first furnished to the City and the Company evidence of such loss, theft or destruction satis- factory to the City and the Company, together with indemnity satisfactory to them. The City and Company may charge the Holder with their reasonable fees and expenses in replacing any muti- lated, lost, stolen or destroyed Bond. 10. Transfer of Bond: Person Treated as Holder. The Bond shall be transferable by the Owner on the bond register of the City, upon presentation of the Bond for notation of such transfer thereon at the office of the City Clerk, as bond regis- trar, accompanied by a written instrument of transfer in form satisfactory to the City Clerk and the City Attorney duly executed by the Owner or its attorney duly authorized in writing. The Owner seeking to transfer ownership of the Band shall also give written notice thereof to the Company. The Bond shall continue to be subject to successive transfers at the option of the Owner of the Bond. No service charge shall be made for any such transfer, but the City Clerk may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith. The person in whose name the Bond shall be issued or, if transferred, shall be registered from time to time shall be deemed and regarded as the absolute Holder thereof for all purposes, and payment of or on account of the principal of and interest on the Bond shall be made only to or upon the order of the Holder thereof, or its attorney duly authorized in writing, and neither the City, the City Clerk, the Company, nor the Bank shall be affected by any notice to the contrary. All such payments shall be valid and effectual to satisfy and discharge the liability upon the Bond to the extent of the sum or sums so paid. The Series 1978 Bond shall be initially registered in the name of,the Bank. 11. Substitute Bond with Adjusted Installment schedule. If the Company has failed to borrow the full $1,150,000 authorized Principal amount of the Bond before October 1, 1979, or if the Company shall prepay a part of the outstanding principal amount of the Bond at any time, and if in either such case the Company and the Holder of the Bond shall so request, then the Mayor and City Manager are authorized to execute and issue a new Bond in exchange for the outstanding Bond and affix the official seal of the City thereto. The substitute Bond shall be in the same principal amount as the unpaid principal amount of the outstand- ing Bond and shall be in the same form as the outstanding Bond except as follows: (i) The date shall be the last date to which interest has been paid. (ii) The schedule of installments of principal and interest to be paid on the substitute Bond, includ- ing the amounts and dates of payment, may he adjusted in such -8- W W manner as the Company and the Holder agree to, provided that the final maturity date shall not be extended beyond November 1, 1994, and that neither the principal amount thereof nor the interest rate thereon shall be changed without the approval of the City given by resolution of the City Council. (iii) The form of Bond may be changed by deleting Annex A and by appropriate changes in the text of the Bond to delete references to Annex A. Prior to issuance of any such.substitute Bond, the Company and the Bank (or the successor Holder of the Bond) shall execute and deliver an amendment to the Loan Agreement setting forth the form of substitute Bond, the agreement of the Company to make the loan repayments as therein set forth, and the agreement of the Holder to accept the substitute Bond and the loan repayment schedule therein provided for, and the then Mayor and City Manager are authorized to execute on behalf of the City an amendment to the Loan Agreement executed pursuant to this paragraph 11 without further action or authorization of the City Council. 12. Amendments, Changes and Modifications to Loan Agreement and Bond Resolution. Except pursuant to paragraph 11 hereof or Section 9.03 of the Loan Agreement, the City shall not enter into or make any change, modification, alteration or ter- mination of the Loan Agreement or this Bond Resolution. 13. Pledge to Holders. The City does hereby and by the Assignment and Pledge Agreement, pledge and assign to the Bank and its successor Holders of the Bond all interest of the City in the revenues of the Project and the Project Facilities, including all Loan Repayments to be made by the Company under the Loan Agreement, payments to be made under the Guaranty Agreement and moneys derived from enforcement of the Mortgage. All such payments to be made under the Guaranty Agreement revenues and moneys, and all proceeds thereof, and any collections of moneys by the City in any proceeding for enforcement of the obligations of the Company under the Loan Agreement shall be received, held and applied by the City for the benefit of the Holder of the Bond. 14. Covenants with Holders; Enforceability. All pro- visions of the Bond and of this Bond Resolution, and all repre- sentations and undertakings by the City in the Loan Agreement are hereby declared to be covenants between the City and the Bank and its successor Holders of the Bond and shall be enforceable by the Bank or any Holder in a proceeding brought for that purpose. 15. Definitions and Interpretation. Terms not other- wise defined in this Bond Resolution but defined in the Loan Agreement shall have the same meanings in this Bond Resolution and shall be interpreted herein as provided therein. Notices may be given as provided in Section 9.01 of the Loan Agreement. In case any provision of this Bond Resolution is for any reason illegal or invalid or inoperable, such illegality or invalidity or inoperability shall not affect the remaining provisions of this Bond Resolution, which shall be construed or enforced as if such illegal or invalid or inoperable provision were not con- tained herein. -9- 16. Election under Internal Revenue Code. The City hereby elects that the provisions of Section 103(b)(6)(D) of the Internal Revenue Code of 1954 and Reg. 91.103-10(b)(2)(vi) there- under, permitting the issuance of tax exempt industrial develop- ment bonds in amounts up to $5,000,000 under certain conditions, shall apply to the Bond, and the Mayor and City Manager or either of them are authorized to execute and file the appropriate form of election under the Code and Regulations with the Internal Revenue service. 17. Certifications. The Mayor, City Manager and City Clerk and other officers of the City are authorized and directed to prepare and furnish to Messrs. Faegre & Benson and LeFevere, Lefler, Pearson, O'Brien & Drawz as co -bond counsel, to the Company, to the Bank and to counsel for the Company and the Bank, certifies copies of all proceedings and records of the City relating to the Project and the Bond, and such other affidavits and certificates as may be required to show the facts appearing from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute representations of the City as to the truth of all statements contained therein. The motion for the adoption of the foregoing Resolution was duly seconded by Councilmember Hoyt, and upon vote being taken thereon, the following voted in avor thereof: Mayor Hunt, Councilmembers Hoyt, Neils, Seibold and Spaeth. The following voted against or abstained: None. Whereupon the Resolution was declared duly passed and adopted. EXHIBIT 1 TO BOND RESOLUTION (Form of Bond) UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF PLYMOUTH Industrial Development Revenue Bond (Garlock Equipment Co. Project) Series 1978 No. 1 61,150,000 The City of Plymouth, a municipal corporation in the County of Hennepin and State of Minnesota (the "City"), for value received, hereby promises to pay, but solely from the source and in the manner hereinafter provided to Farmers & Mechanics Savings Bank of Minneapolis or registered assigns the outstanding and unpaid balance of advances on account of an authorized uriicipal sum of One Million One Hundred Fifty Thousand Dollars ($1,150,000), on November 1, 1994, upon the presentation and surrender hereof, and to make prepayments of said principal sum in installments as hereinafter provided, and to pay to the owner hereof interest on the outstanding and unpaid balance of advances on account of such principal sum from the date hereof until said balance of the principal sum is paid at the rate of Eight and twenty-fivz hun- dredths percent (8.25%) per annum. Interest is payable in monthly installments commencing December 1, 1978, and interest accruing hereon shall be payable on the 1st day of each month from December 1, 1978, to November 1, 1979, both inclusive. Principal and interest are payable in up to equal 324 monthly installments of $8,875 each commencing December 1, 1979, and continuing the 1st day of each month thereafter to and including October 1, 1994 (or such prior date when the outstanding and unpaid balance of advances on account of the authorized principal sum hereof plus interest thereon shall have been fully paid) plus a final installment (unless the outstanding and unpaid balance of advances on account of the authorized principal sum hereof plus interest thereon shall have been previously paid) on November 1, 1994, at which time the outstanding and unpaid balance of the authorized princi- pal sum hereof plus interest thereon shall become due and payable. Principal and interest shall be paid to the registered holder hereof in Federal or other mediately available funds at the main office of the Farmers & Mechanics Savings Bank of Minneapolis, in Minneapolis, Minnesota. W W This Bond is issued pursuant to the Minnesota Municipal Industrial Development Act, Chapter 474, Minnesota Statutes, as amended (the "Act"), and in conformity with the provisions, restrictions and limitations thereof. This Bond does not consti- tute a charge ag,inst the general credit or taxing powers of the City and does not grant to the owner or holder of this Bond any right to have the City levy any taxes or appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Bond a general obligation of the City or the individual officers or agents thereof. This Bond and interest hereon are payable solely and only from the moneys received under the Loan Agreement, Mortgage or Guaranty Agreement hereinafter mentioned, including loan repayments to be made by Garloc4r. Equipment Co., a Minnesota corporation (the "Company"). This Bond represents an authorized series of special obligation Bonds of an aggregate principal amount of $1,150,000, which have been authorized by law to be issued and have been issued for the purpose of funding a loan from the City to the Company to finance costs of a project for constructing an indus- trial plant in the City for use by the Company in its business (the "Project"). This Bond is issued pursuant to a Loan and Purchase Agreement (the "Loan Agreement") by and among the City, the Company and Farmers & Mechanics Savings Bank of Minneapolis dated as of October 1, 1978, and a Bond Resolution of the City duly adopted November , 1978. This Bond is secured by the Loan Agreement, the Bond Resolution a Comb3.nation Mortgage and Security Agreement (the "Mortgage") by the Company to the said Bank dated as of October 1, 1978 and a Guaranty Agreement (the "Guaranty Agreement") dated as of October 1, 1978 executed by the Company to said Bank to which Loan Agreement, Bond Resolution, Guaranty Agreement and Mortgage and amendments thereof reference is hereby made for a description and limitation of the revenues and funds pledged and appropriated to the payment of the Bond, the nature and extent of the security thereby created, the rights of the Holders of the Bond, the rights, duties and=:amunities of the Bank and the rights, immunities and obligations of the City thereunder. Certified copies of the Bond Resolution and executed counterparts of the Loan Agreement, Mortgage and Guaranty Agreement are on file at the office of the City Clerk. The outstanding and unpaid balance of advances on account of the authorized principal sum of this Bond is the aggregate of loans made by the City to the Company from Bond proceeds paid by the Bank under the Loan Agreement, as evidenced by the notations on Annex A attached to this Bond 4nd hereby made a part hereof, less repayments of principal made to the Holder hereof. As provided in the Loan Agreement, the notation of the -2- W W amount and date of an advance and receipt by the Authorized Company Representative set forth on Annex A is conclusive evidence of the amount and date of the payment by the Bank, the loan by the Municipality to the Company, and the receipt of the loan by the Company. The Bond shall be subject to prepayment at any time at the option of the City, at the request of the Company in whole or in part as provided in Section 5.05 of the Loan Agreement upon sixty (60) dayel prior mailed notice to the last known Holder at par, accrued interest plus a premium of the amount prepaid as follows: 5% premium if prepaid on or before November 1, 1989 4 1/2% premium if prepaid after November 1, 1989, but before November 1, 1990 4% premium if prepaid after November 1, 1990, but before November 1, 1991 3 1/2% premium if prepaid after November 1, 1991, but before November 1, 1992 3% premium if prepaid after November 1, 1992, but before November 1, 1993 2 1/2% prem. -Lam if prepaid after November 1 1993, but before November 1, 1994 Partial prepayments shall be applied to the principal installments last to become due in inverse order of due date. The Bond is also subject to optional redemption at par plus accrued interest in certain events of damage, destruction or condemnation of the Project, change of law, as a result of a court order or decree or if the Bank agrees to finance any future project to be located on the Project Site as provided in Section 5.05 of the Loan Agreement. If a Determination of Taxability shall be made and the Company shall elect not to redeem the Bond, the Bond shall bear interest on the unpaid principal amount at the interest rate of 9.75% per annum from the date from which the interest on the Bond is deter- mined to have been taxable. On or after November 1, 1993, but before November 1, 1994, the Municipality, at the request of the Holder of the Bond, shall have the option upon six months prior written notice to the Company, to declare the outstanding principal balance of the Bond to be due and payable in full at par plus accrued interest, thirty days from the exercise of the option. Notice of any such prepayment shall be given to the owner or registered assigns of the Bond by certified or registered mail, addressed to him at his registered address, not later than sixty (60) days prior to the date fixed for prepayment, and shall -3- W W be published, if required by law, in a financial journal circu- lated in the English language in the cities of Minneapolis or St. Paul, Minnesota, at least once, not less than sixty (60) days before the date so fixed for prepayment_ At the date fixed for prepayment, funds shall be paid to the owner hereof at the office of the Farmers & Mechanics Savings Bank of Minneapolis, Minneapolis, Minnesota, or shall be deposited with said Bank, sufficient to pay the Bond, or the principal amount thereof to be prepaid, and accrued interest thereon. Upon the happening of the above condi- tions, the Bond thus called or the principal portions thereof prepaid shall not bear interest after the date specified for prepayment. This Bond is transferable, as provided in the Bond Resolution, only upon the bond register of the City Clerk, as bond registrar, by the owner hereof in person or by his duly authorized attorney, as provided in the Bond Resolution. Under paragraph 11 of the Bond Resolution a substitute Bond may be issued in a principal sum equal to the outstanding and unpaid balance of advances on account of the authorized principal sum of this Bond, in certain cases, with an adjusted schedule of installment payments thereafter to be made hereon, subject to approval of the Holder hereof and the Company. In case this Bond shall become mutilated, lost or destroyed, a substitute Bond may be issued in the manner and subject to the conditions provided in the Bond Resolution. In case an Event of Default as defined in the Loan Agreement occurs, the Bond and the Loan Repayments thereafter to become due under the Loan Agreement may become immediately due and payable, in the manner and with the effect and subject to the conditions provided in the Loan Agreement. The Holder of the Bond shall hava the right to enforce the provisions of the Bond Resolution, Loan Agreement, Mortgage, and Guaranty Agreement. The terms and provisions of the Bond Resolution, Loan Agreement, Guaranty Agreement, and Mortgage, or of any instrument supplemental thereto, may be modified or altered pursuant to Section 9.03 of the Loan Agreement and paragraph 11 of the Bond Resolution. It is hereby certified and recited and the City Council has found: That the Project is an eligible "project" defined in Section 474.02, Subd. 1 of the Act; that the issuance of the Bond and the acquisition and construction of the Project will promote the public welfare and carry out the purposes of the Act; that the Project has been approved by the Commissioner of Securities of :.be State of Minnesota as tending to further the purposes and policies of the Act; that all acts, conditions and things required to be done precedent to and in the issuance of this Bond have been properly done, have happened and have been performed in regular and Niue time, form and manner as required by law; and that this Bond does not constitute a debt of the City within the meaning of any constitutional or statutory limitation. -4- W IN WITNESS WHEREOF, the City of Plymouth, by its City Council, has caused this Bond to be signed in its behalf by the manual signatures of the Mayor and the City Manager and sealed with the corporate seal of the City, all as of the6th day of November 1978. ` CITYOUTH =�.—j By/7 c<� (SEAL) Mayor and by ----I J 3S� ty Manager -5- (Form of Transfer) For value received, the undersigned owner does hereby assign and transfer the foregoing Bond to the named Assignee, and the undersigned City Clerk of the City of Plymouth as bond regis- trar hereby certifies that the foregoing Bond has been transferred and registered on the bond register in the name of such Assignee. Date of Name of Signature of Signature of Transfer on Assignee Owner City Clerk Bond Register (Form of Annex A) The undersigned Authorized Company Representative of Garlock Equipment Co. and the Authorized Municipal Representative, hereby certifies that Farmers & Mechanics Savings Bank of Minneapolis, as purchaser thereof, has made the following payment of an installment of the purchase price of the City of Plymouth, Minnesota, Industrial Development Revenue Bond (Garlock Equipment Co. Project), Series 1978, and that said payment has been loaned to and received by the Company pursuant to the Loan and Purchase Agreement dated as of October 1, 1978, by and among the City of Plymouth, Garlock Equipment Co. and Farmers & Mechanics Savings Bank of Minneapolis: Amount of Date of Payment Payment -6- Signature of Authorized Company Representative Signature of Authorized Municipal Representative EXHIBIT 2 TO BOND RESOLUTION ASSIGNMENT AND PLEDGE'AGREEMENT This Assignment is made as of the 1st day of November, 1978 between the CITY OF PLYMOUTH, Minnesota, a municipal corporation in the County of Hennepin and State of Minnesota (herein called the "City") and FARMERS & MECHANICS SAVINGS BANK (herein called the "Bondholder"). Recitals The City has executed and delivered to the Bondholder its single fully registered Industrial Development Revenue Bond (Garlock Equipment Co. Project) in the principal amount of $1,150,000 dated the date of delivery, issued pursuant to a resolution adopted November 6, 1978. The proceeds of the Bond have been loaned to Garlock Equipment Co. (the "Company") pursuant to a Loan and Purchase Agreement dated as of October 1, 1978, between the City and the Company. The mond is payable from and secured by the Loan Repay- ments to be made by the Company under the Loan Agreement and the Bondholder, as a condition to the purchase of the Bond, has required the execution of this Assignment. ACCORDINGLY, as authorized by the Bond Resolution and in consideration of the premises and other good and valuable consideration, the receipt of which is hereby acknowledged, the City does hereby grant, transfer and assign to the Bondholder and its registered assigns of the Bond, all of the right, title and interest of the City in the Loan and Purchase Agreement and the Loan Repayments of the Company payable thereunder (except for the rights of the City under Section 5.02, 7.01, 8.04 and 8.05 thereof relating to expenses, indemnity and advances of the City), all for the purpose of securing the Bond. IN WITNESS WHEREOF, the City has executed this Assignment as of the date first above written. CITY OF PLYMOUTH By _ ^� Mayor Attest ���i'���'� By •�.� .,�� City Clerk City Manager (seal)