-------------------------------------------------------------------------------
$3,320,000
MINNESOTA AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD
MINNESOTA SMALL BUSINESS DEVELOPMENT LOAN PROGRAM
REFUNDING REVENUE BONDS
SERIES 1998B, LOT 2
BOND PURCHASE AGREEMENT
June 26, 1998
-------------------------------------------------------------------------------
$3,320,000
MINNESOTA SMALL BUSINESS DEVELOPMENT LOAN
PROGRAM REFUNDING REVENUE BONDS
SERIES 1998B, XXX 0
XXXX XXXXXXXX XXXXXXXXX
Xxxxxxxxx Agricultural and June 26, 1998
Economic Development Board
Xx. Xxxx, Xxxxxxxxx 00000
Xxxxxxx/May Inc.
Xxx Xxxxxxx Xxxxxx, Xxxxxx Xxxx
Xx. Xxxx, XX 00000
Ladies and Gentlemen:
We, Xxxxxxxxx Summit Securities LLC and Xxxxx Xxxxxxx Inc. (sometimes
herein referred to as the "Underwriters") hereby offer to purchase upon the
terms and conditions hereinafter specified, $3,320,000 principal amount of
Minnesota Small Business Development Loan Program Refunding Revenue Bonds,
Series 1998B, Lot 2, dated as of July 1, 1998 (the "Bonds") to be issued by the
Minnesota Agricultural and Economic Development Board, St. Xxxx, Minnesota (the
"Issuer"). The Bonds are described in and will be offered for sale by the
Underwriters pursuant to an Official Statement dated July 7, 1998 prepared in
connection with the issuance of the Bonds (together with the Appendices thereto,
the "Official Statement"). The Underwriters have approved a form of a
Preliminary Official Statement relating to the Bonds (the "Preliminary Official
Statement"). If and when accepted by all of you, this document shall constitute
our Bond Purchase Agreement.
1. BACKGROUND. The Bonds are to be issued by the Issuer pursuant
to, and will be secured as provided in, the Minnesota Small Business
Development Loan Program Revenue Bonds General Bond Resolution, as amended
(the "General Bond Resolution") and the Series 1998B, Lot 2 Bond Resolution
(the "Lot Bond Resolution") adopted June 29, 1998. The net proceeds of the
Bonds will be used to refund the Issuer's Series 1990B, Lot 1 Bonds, finance
the costs of constructing a manufacturing building (the "Project") which is
owned by Xxxxxxx/May Inc., a Minnesota corporation (the "Borrower"). Prior
to the issuance of the Bonds, the Issuer and the Borrower will amend an
existing Loan Agreement (as amended, the "Loan Agreement") under which the
Borrower will agree, among other things, to borrow the proceeds of the Bonds
from the Issuer and to pay loan repayments in amounts sufficient to pay the
principal of, premium, if any, and interest on the Bonds when due. The
proceeds of the Bonds will be disbursed by U.S. Bank Trust National
Association, as agent for U.S. Bank National Association (formerly First
National Bank of Minneapolis) (the "Trustee"), pursuant to the General Bond
Resolution. The Bonds and redemption premium, if any, and interest thereon
do not constitute a debt of the Issuer or the State of Minnesota within the
meaning of any
constitutional or statutory limitation or provision and shall not constitute or
give rise to any pecuniary liability of the Issuer or charge against the
Issuer's general credit or taxing powers, if any, and shall not constitute a
charge or encumbrance, legal or equitable, upon the property of the Issuer
except as may be provided in the General Bond Resolution, the Lot Bond
Resolution, the General Guaranty Fund Resolution (described below) or the Loan
Agreement.
The Bonds are secured by the Lot Bond Resolution, the General Bond
Resolution, the General Guaranty Fund Resolution adopted September 26, 1984,
as amended, (the "General Guaranty Fund Resolution") and the General Guaranty
Fund Pledge and Escrow Agreement dated as of September 26, 1984, as amended,
(the "General Guaranty Fund Pledge and Escrow Agreement") between U.S. Bank
National Association (formerly First National Bank of Minneapolis), as Escrow
Holder and the Issuer. The Loan Agreement is secured by a mortgage and
certain other instruments (the "Security Instruments"). Xxxxxxx Corporation
(the "Guarantor") will confirm its guaranty of the Loan Agreement pursuant to
a Confirmation of Guaranty (the "Confirmation"). The Issuer and the Trustee
will enter into a Continuing Disclosure Agreement dated as of July 1, 1998
for the benefit of the holders of the Bonds.
The Bonds will mature and bear interest and contain certain other
terms as set forth in the Lot Bond Resolution.
The Bonds will be sold by us pursuant to the Preliminary Official
Statement and the Official Statement.
2. REPRESENTATIONS OF THE ISSUER. The Issuer makes the following
representations:
(a) The Issuer is an agency duly organized and existing under
the laws of the State of Minnesota, with full power and authority to
act on behalf of the State of Minnesota (within the meaning of Rev.
Rul. 63-20) to adopt the General Bond Resolution, the Lot Bond
Resolution and the General Guaranty Fund Resolution, to issue the
Bonds, to pledge the loan repayments and other sums to be received
pursuant to the Loan Agreement and to conduct its corporate purposes
as described in the Official Statement. The Issuer has full power and
authority to execute and deliver the Loan Agreement, the General
Guaranty Fund Pledge and Escrow Agreement and this Bond Purchase
Agreement and to carry out the terms thereof and hereof.
(b) This Bond Purchase Agreement has been duly and validly
authorized. This Bond Purchase Agreement, when executed and
delivered, will be in full force and effect and is a legal, valid,
binding and enforceable obligation of the Issuer in accordance with
its terms. The General Guaranty Fund Pledge and Escrow Agreement, the
Loan Agreement, and the Bonds, when executed and delivered, shall have
been duly and validly authorized, executed and delivered, shall be in
full force and effect and shall be legal, valid, binding and
enforceable obligations of the Issuer in accordance with their terms,
respectively, except to the extent limited by any future proceedings
under
2
bankruptcy, reorganization, or other laws of general application relating to or
affecting the enforcement of creditors' rights.
(c) The consummation of the transactions contemplated by the
Loan Agreement, the Official Statement and this Bond Purchase
Agreement and the carrying out of the terms thereof and hereof shall
not result in the violation of any provision of or restriction
contained in any agreement to which the Issuer is a party or by which
it is bound; provided, however, that the representations in this
paragraph shall not apply to the qualification of the Bonds under
state or federal securities or Blue Sky laws or the law of any
jurisdiction outside the United States.
(d) To the best knowledge of the Issuer there is no action,
suit, proceeding or investigation, at law or in equity, before or by
any court, public board or body, pending or threatened against or
affecting the Issuer wherein an unfavorable decision, ruling or
finding would materially adversely affect the transactions
contemplated by the Loan Agreement, the Official Statement and this
Bond Purchase Agreement.
(c) Any certificate signed by any official of the Issuer and
delivered to the Underwriters on or prior to the Closing Date shall be
deemed a representation by the Issuer to the Underwriters as to the
truth of the statements therein contained.
3. THE BORROWER'S AND GUARANTOR'S REPRESENTATIONS. The Borrower and
the Guarantor make the following warranties and representations:
(a) The Borrower is a corporation duly organized and validly
existing under the laws of the State of Minnesota with full power and
authority to own the Project and otherwise conduct its business as
described in Appendix B to the Official Statement. To the best of its
knowledge, the Borrower is conducting its business in substantial
compliance with all applicable and valid laws, rules and regulations
of each jurisdiction where it owns or leases substantial property or
where it transacts material intrastate business.
(b) The Guarantor is a corporation duly organized and validly
existing under the laws of the State of Minnesota with full power and
authority to operate the Project and otherwise conduct its business as
described in Appendix B to the Official Statement. To the best of its
knowledge, the Guarantor is conducting its business in substantial
compliance with all applicable and valid laws, rules and regulations
of each jurisdiction where it owns or leases substantial property or
where it transacts material intrastate business.
(c) The Borrower has full power and authority to execute and
deliver the Loan Agreement and this Agreement and to carry out the
terms thereof. The Guarantor has full power and authority to deliver
the Confirmation and this Agreement. This Agreement and the Loan
Agreement, when executed and delivered by the Borrower, will have been
duly and validly authorized, executed and delivered by the Borrower,
will be in full force
3
and effect and will be valid and binding instruments of the Borrower,
enforceable in accordance with their terms, except as limited by
bankruptcy, insolvency or other laws affecting creditors' rights generally.
This Agreement and the Confirmation, when executed and delivered by the
Guarantor, will have been duly and validly authorized, executed and
delivered by the Guarantor, will be in full force and effect and will be
valid and binding instruments of the Guarantor, enforceable in accordance
with their terms, except as limited by bankruptcy, insolvency or other laws
affecting creditors' rights generally.
(d) The consummation of the transactions herein contemplated and
carrying out of the terms hereof will not result in a material
violation of any provision of, or a default under the Articles of
Incorporation or Bylaws of the Borrower or the Guarantor or any
indenture, mortgage, deed of trust, indebtedness, agreement, judgment,
decree, order, statute, rule or regulation to which the Borrower or
Guarantor is a party or by which the property of either is bound;
provided, however, that the representations and warranties in this
paragraph shall not apply to the qualification of the Bonds under
state or federal securities or Blue Sky Laws or the law of any
jurisdiction outside the United States.
(e) Except as described in the Official Statement, to the best
of their knowledge, no approval, authorization, consent or other order
of any public board or body (other than the authorization of the
Issuer and registration under and compliance with the federal or
securities or Blue Sky laws of various states) is legally required for
the transactions contemplated hereby.
(f) Neither the Guarantor nor the Borrower is in violation of
any material provision of its Articles of Incorporation or Bylaws.
Neither the Borrower nor the Guarantor is in violation of any
provision of, or in material default under, any indenture, mortgage,
deed of trust, indebtedness agreement, instrument, judgment, decree,
order, statute, rule or regulation to which it is a party or by which
it or its property is bound.
(g) There are no legal or governmental proceedings pending or,
to the best of its knowledge, threatened or contemplated by
governmental authorities or threatened by others to which the Borrower
or Guarantor is or may become a party or of which any property of the
Borrower or Guarantor is or may become subject, other than as is set
forth in the Official Statement, which, if determined adversely to the
Borrower or Guarantor, would have a material and adverse effect on the
financial condition of the Borrower or Guarantor.
(h) The information contained in the Official Statement under
the heading "THE SERIES 1998B BONDS - Lot 2 Estimated Sources and Uses
of Funds", and the information concerning the Borrower and Guarantor
in Appendix B thereto is accurate in all material respects.
(i) Subsequent to the respective dates as of which information
is given in the Official Statement and prior to the Closing Date
hereinafter mentioned, except as
4
described to the Underwriters and Issuer or set forth in or contemplated by
the Official Statement, (1) neither the Borrower nor the Guarantor shall
have incurred any material liabilities or obligations, direct or
contingent, except in the ordinary course of business, or shall have
entered into any material transaction not in the ordinary course of
business, (2) there has not been any material adverse change in the
business of the Borrower or Guarantor or the financial position or results
of operations of the Borrower or Guarantor, (3) no loss or damage (whether
or not insured) to the property of the Borrower or Guarantor has been
sustained which materially and adversely affects the operations of the
Borrower or Guarantor, and (4) no legal or governmental proceedings
affecting the transactions contemplated by this Agreement have been
instituted or threatened which are material.
4. PURCHASE, SALE AND DELIVERY OF THE BONDS. On the basis of the
representations and warranties and subject to the terms and conditions set forth
herein, we agree to purchase, and the Issuer agrees to sell to us, the total
principal amount of the Bonds at a purchase price of $3,320,000 plus interest
accrued from the date of the Bonds to the Closing Date. From other available
funds, the Borrower shall pay us an underwriting fee of $83,000. Payment for
the Bonds shall be made to the Issuer or its order by wire transfer or by
certified or official bank check or checks payable in immediately available
funds at the office of Xxxxxxxxx & Xxxxxx P.L.L.P., Bond Counsel, in
Minneapolis, Minnesota, at 10 a.m. Central Time, on July 15, 1998, or at such
later date as may be agreed upon by an appropriate officer of the Issuer, the
Borrower and us against delivery of the Bonds to us. The date and time of such
payment and delivery are herein called the "Closing Date". The Bonds will be
delivered to us on the Closing Date in the office of the bond counsel in
Minneapolis, Minnesota, in fully registered form, as requested by us before the
Closing Date, and the Bonds shall be made available to us for inspection at
least one day prior to the Closing Date. The Bonds shall bear CUSIP numbers,
provided that neither the printing of a wrong number on any Bond nor the failure
to print a number thereon shall constitute cause to refuse delivery of a Bond.
5. COVENANTS OF THE BORROWER. The Borrower:
(a) except in connection with the issuance of additional obligations
under the General Bond Resolution or changes in the Guaranty Fund Amount,
if at any time for a period of six months after the date of the Official
Statement an event shall have occurred as a result of which it is necessary
to amend or supplement the Official Statement in order to make the
statements therein with respect to the Borrower and Guarantor not untrue or
misleading, notify us promptly thereof and furnish to us an appropriate
amendment or a supplement that will correct the statements in the Official
Statement in order to make the statements therein with respect to the
Borrower and Guarantor not untrue or misleading; and
(b) advise the Underwriters promptly upon obtaining knowledge thereof
of the institution of any proceedings by any governmental agency or
otherwise affecting the use of the Official Statement or in connection with
the sale and distribution of the Bonds.
5
The Issuer, the Borrower and the Guarantor shall cooperate with the
Underwriters to maintain the eligibility of the Bonds for secondary market
trading in the State of Minnesota, provided, however, in no event shall the
Issuer be required to expend any moneys or funds to maintain such eligibility
and if moneys or funds need be expended therefor such expenditures shall be the
sole obligation of the Borrower. For this purpose the Borrower and the
Guarantor shall provide the information necessary for the Issuer to furnish the
Underwriters with an annual report in the form required and the Issuer shall
furnish such annual report to the Underwriters and the Borrower and the
Guarantor shall pay any annual fee of the State of Minnesota required in this
connection.
6. CONDITIONS OF OBLIGATIONS OF UNDERWRITERS AND ISSUERS. Our
obligation to purchase and pay for the Bonds, and the obligation of the
Issuer to issue the Bonds is subject to the following conditions:
(a) The representations and warranties of the Borrower and Guarantor
shall be true and correct as of the date hereof and the Closing Date.
(b) At the Closing Date, the Borrower and the Guarantor shall have
performed all of its obligations hereunder theretofore to be performed.
(c) At the Closing Date, there shall be delivered to us and dated as
of the Closing Date:
(i) opinions of Xxxxxxxxx & Xxxxxx P.L.L.P., Minneapolis,
Minnesota, as Bond Counsel, addressed to the Issuer substantially in
the form set forth as Exhibit A and a separate opinion of Bond
Counsel, addressed to us, substantially in the form set forth as
Exhibit B.
(ii) one or more opinions of counsel to the Borrower and
Guarantor, addressed to us and the Issuer, substantially in the form
set forth as Exhibit C.
(iii) certificate of an authorized representative of the Issuer,
substantially in the form of Exhibit D.
(iv) opinion of the Office of the Attorney General of the State
of Minnesota, as counsel to the Issuer, addressed to us and the
Issuer, substantially in the form set forth as Exhibit E.
In rendering the above opinions, counsel may rely upon customary
certificates.
(d) The General Guaranty Fund Pledge and Escrow Agreement, the Loan
Agreement, the Continuing Disclosure Agreement and the Confirmation, in
substantially the forms existing on the date hereof, with such changes
therein as may be mutually agreed upon by the parties thereto and us, and
all instruments contemplated thereby, shall
6
have been duly authorized, executed and delivered by the respective parties
thereto and shall be in full force and effect on the Closing Date.
(e) All proceedings and related matters in connection with the
authorization, issue, sale and delivery of the Bonds shall have been
satisfactory to Bond Counsel, and such counsel shall have been furnished
with such papers and information as they may have reasonably requested to
enable them to pass upon the matters referred to in this Section 6.
(f) The Borrower shall have furnished or caused to be furnished to us
on the Closing Date certificates satisfactory to us as to the accuracy of
all representations and warranties contained herein as of the date hereof
and as of the Closing Date and as to the performance by the Borrower of all
of their obligations hereunder to be performed at or prior to the Closing
Date.
(g) The offer and sale of the Bonds shall be exempt from registration
under the Securities Act of 1933, as amended.
(h) The Bonds shall be registered under the Blue Sky laws of the
State of Minnesota and registered or exempt from registration for sale in
such states as the Underwriters and the Issuer shall have mutually agreed
upon and the Underwriters shall have been furnished one or more memoranda
to such effect by Faegre & Xxxxxx.
All such opinions, certificates, letters and documents will be in
compliance with the provisions hereof only if they are in all material respects
satisfactory to us.
If any condition of our obligation hereunder to be satisfied prior to
the Closing Date is not so satisfied, this Agreement may be terminated by us by
notice in writing or by telegram to the Borrower and the Issuer.
We may waive in writing compliance by the Borrower and Guarantor or
the Issuer with any one or more of the foregoing conditions or extend the time
for their performance.
7. INDEMNIFICATION. The Borrower will indemnify and hold harmless
the Underwriters and the Issuer and each person, if any, who controls the
Underwriters and the Issuer (in this paragraph separately and collectively
referred to as the "defendants") within the meaning of the Securities Act of
1933, as amended, and the Securities Exchange Act of 1934, as amended, from and
against any and all losses, claims, damages, expenses or liabilities, joint or
several, to which they or any of them may become subject under the Securities
Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended, or
under any other statute or at common law or otherwise, and, except as
hereinafter provided, will reimburse the Underwriters, the Issuer and each such
controlling person, if any, for any legal or other expenses reasonably incurred
by them or any of them in connection with investigation or defending any actions
whether or not resulting in any liability, insofar as such losses, claims,
damages, expenses, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact
7
or failure to state a material fact contained in the Official Statement (or the
Official Statement as from time to time amended or supplemented) under, and only
under, the heading "THE SERIES 1998 BONDS - Lot 2 Estimated Sources and Uses of
Funds" or that portion of Appendix B relating to the Borrower and Guarantor.
Promptly after receipt by the Underwriters, the Issuer or any such controlling
person of notice of the commencement of any action in respect of which indemnity
may be sought against the Borrower and Guarantor under this Section, such person
will notify the Borrower and Guarantor in writing of the commencement of any
action in respect of which indemnity may be sought against the Borrower and
Guarantor under this Section, such person will notify the Borrower and Guarantor
in writing of the commencement thereof, and, subject to the provisions
hereinafter stated, the Borrower and Guarantor shall assume the defense of such
action (including the employment of counsel, who shall be counsel satisfactory
to the Underwriters, the Issuer or such controlling person, as the case may be,
and the payment of expenses) insofar as such action shall relate to any alleged
liability in respect of which indemnity may be sought against the Borrower and
Guarantor. The issuer or any such controlling person shall have the right to
employ separate counsel in any such action and to participate in the defense
thereof, and the fees and expenses of such counsel shall be at the expense of
the Borrower and Guarantor. The Borrower and Guarantor shall not be liable to
indemnify any person for any settlement of any such action effected without its
consent.
To the same extent as the foregoing indemnity contained in this
Section from the Borrower and Guarantor to the Underwriters and the Issuer and
each person, if any, who controls the Underwriter and the Issuer, the
Underwriters agree to indemnify and hold harmless the Borrower and Guarantor and
the Issuer and each person, if any, who controls the Borrower and Guarantor and
the Issuer within the meaning of the Securities Act of 1933, as amended, and the
Securities Exchange Act of 1934, as amended (hereinafter in this paragraph
separately and collectively referred to as the "defendants"), but only with
reference to information furnished by us specifically for use in the preparation
of the Official Statement and Preliminary Official Statement. In case any such
claim shall be presented in writing or any action shall be brought against any
of the defendants based on the Official Statement or Preliminary Official
Statement, in respect of which indemnity may be sought from the Underwriters on
account of its agreement contained in this Section, the Underwriters shall have
the rights and duties given to the Borrower and Guarantor in the above paragraph
and the defendants shall have the rights and duties given by the above paragraph
to the persons therein referred to as "defendants".
8. OFFERING BY UNDERWRITERS. We propose to offer the Bonds for sale
to the public under the applicable securities laws in the states in which the
Bonds will be reoffered as set forth in the Official Statement. Concessions
from the offering price may be allowed to selected dealers and special
purchasers. The offering price and concessions vary after the initial offering
and the Bonds may be offered at prices other than the par value thereof. The
Borrower and Guarantor hereby confirm and the Issuer hereby consents to the
authority and use by the Underwriters of the Preliminary Official Statement and
the Official Statement.
9. REPRESENTATIONS, WARRANTIES AND AGREEMENTS TO SURVIVE DELIVERY.
The representations, warranties, indemnities, agreements and other statements of
the Borrower, the Guarantor, the Issuer and the Underwriters or their officers
and authorized representatives set forth in or made pursuant to this Agreement
will remain operative and in full force and effect regardless of any
investigation or statement as to the results thereof made by or on behalf of the
8
Borrower, the Guarantor, the Issuer or the Underwriters or any controlling
person and will survive delivery of and payment for the Bonds.
10. PAYMENT OF COSTS AND EXPENSES. There shall be paid by the
Borrower and Guarantor the following: the fees and disbursements of
Underwriters' counsel, the costs of registration or filing fees with the various
states; fees and disbursements of bond counsel and staff for the State of
Minnesota or Issuer, costs of preparation and any printing of the General Bond
Resolution, and any similar documents, if any; costs of printing the Preliminary
Official Statement and the final Official Statement; the initial fees of the
Trustee, the Escrow Holder and paying agents. The Borrower shall, in addition,
pay the underwriting fee of $83,000 referred to in Section 4 on the Closing
Date.
11. TERMINATION OF AGREEMENT. This Agreement may be terminated at
any time prior to the Closing Date by us by written notice to the Issuer and
the Borrower if in our judgment it is impracticable to offer for sale or to
enforce contracts made by the Underwriters for the resale of the Bonds agreed
to be purchased hereunder by reason of (i) trading in securities on the New
York Stock Exchange, Inc. or the American Stock Exchange having been
suspended or limited or minimum prices having been established on either such
Exchange, (ii) a banking moratorium having been declared by either Federal or
applicable state authorities, (iii) an outbreak of major hostilities or other
national or international calamity having occurred, (iv) any action having
been taken by any government in respect of its monetary affairs which, in our
opinion, has a material adverse effect on the United States securities
markets, (v) legislation is introduced in Congress, or a decision rendered by
any court, or any order, ruling, regulation or statement issued by any agency
of the United States which, in our opinion, would result in the interest
payable on the Bonds being subject to United States income taxes or the
Bonds, Loan Agreement, Lot Bond Resolution, General Bond Resolution, General
Guaranty Fund Resolution being subject to registration or qualification with
the Securities and Exchange Commission, (vi) by reason of a default with
respect to any security issued by a state or any subdivision or
instrumentality of a state having a population of more than one million,
which, in our opinion, has a material adverse effect on the United States
securities markets or (vii) the occurrence of any event, or knowledge to that
effect, which makes untrue, incorrect or misleading in any material respect
any statement or information contained in the Official Statement, or has the
effect that the Official Statement contains an untrue, incorrect or
misleading statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements made
therein, in light of the circumstances under which they were made, not
misleading. If this Agreement shall be terminated pursuant to Section 6 or
this Section 11, or if the purchase provided for herein is not consummated
because any condition to our obligation hereunder is not satisfied or because
of any refusal, inability or failure on the part of the Borrower, the
Guarantor or the Issuer to comply with any of the terms or to fulfill any of
the conditions of this Agreement, or if for any reason the Borrower, the
Guarantor or the Issuer shall be unable to perform all of their respective
obligations under this Agreement, neither the Borrower, Guarantor nor the
Issuer shall be liable to us for damages on account of loss of anticipated
profits arising out of the transactions covered by this Agreement, but the
Borrower and Guarantor shall remain liable to the extent provided in Section
10 hereof, and the Borrower and Guarantor shall pay all reasonable
out-of-pocket expenses incurred by us, Bond Counsel, Issuer's Counsel and
9
Underwriters' Counsel hereunder, including the fees and disbursements of such
Counsel in contemplation of the purchase and sale of the Bonds.
12. NOTICES AND GOVERNING LAW. All communications hereunder shall
be in writing and, except as otherwise provided, shall be delivered at, or
mailed or telegraphed to, the following addresses: if to the Underwriters, to
Xxxxxxxxx Summit Securities, LLC, 00 Xxxxx Xxxxxxx Xxxxxx, 0000 Xxxxxxx
Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000 Attention: Xxxx Xxxxxxxxxxx; if to the
Borrower and Guarantor, addressed to them at Xxx Xxxxxxx Xxxxxx, Xx. Xxxx, XX
00000 Attention: Xxxx Xxxxx; if to the Issuer, addressed to it at 000 Xxxxx
Xxxxxx, 000 0xx Xxxxx Xxxx, Xx. Xxxx, Xxxxxxxxx 00000, Attention: Chair.
This Agreement shall be governed by and construed in accordance with the laws
of the State of Minnesota.
13. PARTIES IN INTEREST. This Agreement shall be binding upon and
shall inure to the benefit of the Underwriters, the Borrowers and the Issuer,
and, to the extent expressed, any person controlling the Issuer, the
Underwriters, the Borrower, the Guarantor and their respective executors,
administrators, successors and assigns, and no other person shall acquire or
have any right under or by virtue of this Agreement. The term "successors and
assigns" shall not include any purchaser, as such purchaser, from the
Underwriters of the Bonds.
14. TIME. Time shall be of the essence of this Agreement.
15. COUNTERPARTS. This Agreement may be executed in any number of
counterparts.
16. SURVIVABILITY. The covenants, representations, and warranties
contained in this Bond Purchase Agreement shall survive the purchase, sale, and
delivery of the Bonds.
[This page intentionally left blank.]
10
If the foregoing is in accordance with your understanding of the
Agreement, kindly sign and return to us the enclosed duplicate copies hereof,
whereupon it will become a binding agreement among the Issuer, the Borrower and
the Underwriters in accordance with its terms.
Very truly yours,
XXXXXXXXX SUMMIT SECURITIES LLC
For and On behalf of the Underwriters and Itself
By /s/ Xxxx Xxxxxxxxxxx
--------------------------------------
Its Executive Vice President
Confirmed and accepted as of the date first
above written.
MINNESOTA AGRICULTURAL AND
ECONOMIC DEVELOPMENT BOARD
By /s/ [Illegible]
----------------------------------------
Executive Director
XXXXXXX/MAY INC.
By /s/ Xxxx Xxxxxx
-----------------------------------------
Its
--------------------------------------
XXXXXXX CORPORATION
By /s/ Xxxx Xxxxxx
----------------------------------------
Its
--------------------------------------
11
EXHIBIT A
[Xxxxxxxxx & Xxxxxx Letterhead]
[CLOSING DATE], 1998
Minnesota Agricultural and Economic
Development Board
000 Xxxxx Xxxxxx
000 0xx Xxxxx Xxxx
Xx. Xxxx, Xxxxxxxxx 00000
Xxxxxxxxx Summit Securities, LLC
00 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Xxxxx Xxxxxxx Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
RE: $________Minnesota Agricultural and Economic Development Board
Minnesota Small Business Development Loan Program Revenue Bonds,
Series 1998B, Lot 2
[Bond Counsel's opinion substantially similar to the form
attached as Appendix D to Preliminary Official Statement dated
_______, 1998]
Very truly yours,
12
EXHIBIT B
[Xxxxxxxxx & Xxxxxx Letterhead]
[CLOSING DATE], 1998
Minnesota Agricultural and Economic
Development Board
000 Xxxxx Xxxxxx
000 0xx Xxxxx Xxxx
Xx. Xxxx, Xxxxxxxxx 00000
Xxxxxxxxx Summit Securities, LLC
00 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Xxxxx Xxxxxxx Inc.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
RE: $________Minnesota Agricultural and Economic Development Board
Minnesota Small Business Development Loan Program Revenue Bonds,
Series 1998B, Lot 2
[Form of opinion to be substantially as follows:]
1. The Bonds, the General Bond Resolution and other documents
securing the Bonds, except the Loan Agreement, are exempt from registration
pursuant to the Securities Act of 1933, as amended; the Bonds constitute
"municipal securities" within the meaning of the Securities and Exchange Act of
1934, as amended; and the General Bond Resolution is exempt from qualification
under the Trust Indenture Act of 1939, as amended.
2. The statements in the Official Statement relating to the Bonds
under the headings "THE SERIES 1998B BONDS", "SECURITY FOR THE BONDS", "SUMMARY
OF CERTAIN PROVISIONS OF GENERAL BOND RESOLUTION", "SUMMARY OF CERTAIN
PROVISIONS OF GENERAL GUARANTY FUND PLEDGE AND ESCROW AGREEMENT", "SUMMARY OF
CERTAIN PROVISIONS OF LOAN AGREEMENTS, COLLATERAL AND SECURITY INSTRUMENTS" and
"TAX EXEMPTION", are true and accurate and do not omit a material fact necessary
to be included therein for the purpose for
13
which they were intended. In preparation of the remaining portions of the
Official Statement, the Underwriters have been represented by their counsel and
we have not examined or verified such other provisions in the Official
Statement, or appendices thereto, and accordingly express no opinion thereon.
We further express no opinion with respect to the adequacy of disclosure in the
Official Statement with respect to any Borrowers described therein or any
documents to which they are a party or any collateral which they have provided.
We hereby consent to the use of our firm name on the cover page and
under the headings "TAX EXEMPTION" and "APPROVAL OF LEGAL MATTERS" in the
Official Statement.
Very truly yours,
14
EXHIBIT C
15
EXHIBIT D
CERTIFICATE OF ISSUER
Xxxxxxxxx Summit Securities, LLC
Minneapolis, Minnesota
Xxxxx Xxxxxxx Inc.
Minneapolis, Minnesota
RE: $_________ Minnesota Agricultural and Economic Development Board
Minnesota Small Business Development Loan Program, Series 1998B, Lot 2
The Minnesota Agricultural and Economic Development Board (the
"Board") does hereby certify in connection with the issuance of the
above-captioned Bonds which were purchased by you pursuant to a Bond Purchase
Agreement dated ___________, 1998 among you, the Board, and Xxxxxxx/May Inc.
(the "Borrower") that to the best of its knowledge as of this date the
Official Statement, except as noted below, does not contain any untrue
statement of material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances in which they were
made, not misleading. The Board has relied on the information furnished by
the Borrower in preparing the sections under the heading "THE SERIES 1998B
BONDS -- Lot 2 Estimated Sources and Uses of Funds" and in Appendix B.
Date:__________ MINNESOTA AGRICULTURAL AND ECONOMIC
DEVELOPMENT BOARD
By___________________________
Its________________________
16
EXHIBIT E
[Letterhead of the Office of the Attorney General]
[CLOSING DATE], 1998
Minnesota Agricultural and Economic
Development Board
000 Xxxxx Xxxxxx
000 0xx Xxxxx Xxxx
Xx. Xxxx, Xxxxxxxxx 00000
Xxxxxxxxx Summit Securities, LLC
00 Xxxxx Xxxxxxx Xxxxxx
0000 Xxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Xxxxx Xxxxxxx Inc.
Xxxxx Xxxxxxx Tower
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
RE: $_________ Minnesota Agricultural and Economic Development Board
Minnesota Small Business Development Loan Program Revenue Bonds,
Series 1998B, Lot 2
[Form of opinion to be substantially as follows:]
1. The Board was duly created and is validly existing under the
provisions of the Act as a Board authorized to act on behalf of the State
(within the meaning of Rev. Rul. 63-20) with full power and authority to adopt
the General Resolution, the Lot Resolution and the General Guaranty Fund
Resolution; to issue, execute, sell and deliver the Bonds; and to execute,
deliver and perform the Bond Purchase Agreement, the Escrow Agreement and the
Loan Agreement.
2. The General Resolution, the Lot Resolution and the General
Guaranty Fund Resolution have been duly adopted by, and the Bond Purchase
Agreement, the Escrow Fund Resolution and the Loan Agreement have been duly
authorized, executed and delivered by the Board, and constitute valid, binding
and legal obligations of the Board enforceable in accordance with their
respective terms except to the extent that the enforceability thereof may be
limited by
17
bankruptcy, insolvency or other laws affecting creditors' rights generally or
because the obligations are held to be contrary to public policy.
3. The indebtedness of the Board, including that represented by the
Bonds, is within every limit, constitutional, statutory or other, prescribed by
any regulations or statute or law.
All capitalized terms used in this opinion and not otherwise defined
shall have the same meanings as in the General Resolution.
Very truly yours,
---------------------
Special Assistant
Attorney General
18
**$210,000**
UNITED STATES OF AMERICA
STATE OF MINNESOTA
MINNESOTA AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD
MINNESOTA SMALL BUSINESS DEVELOPMENT
LOAN PROGRAM REFUNDING REVENUE BOND
SERIES 1998B XXX 0
Xx. XX00X0-0 Xxxxx Xx. 000000XX0
INTEREST RATE MATURITY DATE DATED DATE
------------- ------------- ----------
4.20% August 1, 1999 July 1, 1998
Minnesota Agricultural and Economic Development Board (the "Board"),
constituted as an authority to act on behalf of the State of Minnesota (the
"State") created and existing by virtue of the laws of the State, acknowledges
itself indebted and for value received hereby promises to pay, solely from the
sources and as hereinafter provided, to
CEDE & CO
or registered assigns,
the principal sum of **TWO HUNDRED TEN THOUSAND*****************DOLLARS
on the maturity date set forth above, unless redeemed prior thereto as
hereinafter provided, upon presentation and surrender of this bond at the
corporate trust office of U.S. Bank National Association, Minneapolis, Minnesota
(the "Trustee" or the "Paying Agent"), and to pay interest (calculated on the
basis of a 360-day year of twelve 30-day months) on such principal sum from the
date hereof at the interest rate set forth above per annum until such principal
sum is paid, payable on the first days of February and August of each year
commencing February 1, 1999. Interest hereon shall be payable by check or draft
mailed from said office of the Trustee to the person in whose name this bond is
registered at the close of business on the 15th day of the calendar month next
preceding each semiannual interest payment date. In case an event of default,
as defined in the General Resolution (hereinbelow described), shall occur, the
principal of this bond may be declared due and payable in the manner and with
the effect provided in the Resolutions (defined below). Amounts paid on this
bond after such declaration shall be paid by the Trustee to the person in whose
name this bond is registered as of a special record date to be fixed by the
Trustee, notice of which is to be mailed to the registered owners of all Bonds
then outstanding. The principal or redemption price, if any, of and interest on
this bond are payable in any coin or currency of the United States of America
which at the time of payment is legal tender for the payment of public and
private debts; provided, however, that interest on this fully registered bond
shall be paid by check or draft as set forth above.
This bond is one of a duly authorized lot of bonds of the board designated
"Minnesota Agricultural and Economic Development Board Minnesota Small Business
Development Loan Program Refunding Revenue Bonds, Series 1998B, Lot 2 (the
"Single Lot Bonds") issued by the Board in the aggregate principal amount of
$3,320,000 under and pursuant to (i) that act of the legislature of the State,
enacted as Chapter 547 of the Laws of Minnesota for 1980, as amended and
supplemented (and set forth in MINNESOTA STATUTES 1986, Chapter 116M
notwithstanding the subsequent repeal thereof by Minnesota Laws of 1987, Chapter
386) and MINNESOTA STATUTES, Chapter 41A (collectively, the "Act"), (ii) the
Minnesota Small Business Development Loan Program Revenue Bonds General Bond
Resolution duly adopted by the Minnesota Energy and Economic Development
Authority (the "Authority"), as amended and supplemented (the "General
Resolution") and (iii) the Single Lot Resolution, as amended, authorizing the
issuance of the Single Lot Bonds (the "Single Lot Resolution") duly adopted by
the Board (the General Resolution and the Single Lot Resolution are herein
collectively called the "Resolutions"). The Board is the statutory successor to
the Authority with respect to General Resolution and the Program (as therein
defined). The Board and the Authority are collectively referred to herein as
the "Board". The Single Lot Bonds are all of the like date and tenor except as
to number, dates, denominations, interest rate and maturity, and are issued for
the purposes of acquiring a Business Loan to provide financing for the costs of
a project to be used by a Business in its business operations (as such
capitalized terms are defined in the Resolutions) and for other proper purpose
of the Authority as provided by the Resolutions. Reference is hereby made to
the Resolutions, as the same may be amended and supplemented from time to time,
for a description of the rights, limitations of rights, obligations, duties and
immunities of the Board, the Trustee, the Paying Agent and the holders of the
bonds. (All bonds issued under the General Resolution, including the Single Lot
Bonds, are herein collectively called the "Bonds"). Certified copies of the
Resolutions are on file in the corporate trust office of the Trustee in St.
Xxxx, Minnesota nd in the principal office of the Authority in Saint Xxxx,
Minnesota.
As provided in the General Resolution, Bonds issued thereunder shall be
special obligations of the Board, the principal or redemption price, if any, of
and interest on the Bonds which are payable solely from and secured solely by
the revenues, funds and other property or assets of the Board described in the
Resolutions and pledged therefor.
It is provided, however, that Bonds issued under the General Resolution
shall be secured by the General Guaranty Fund, created as an account of the
Economic Development Fund under MINNESOTA STATUTES 1986, Section 116M.06, Subd.
2 and Subd. 4 (now repealed) as transferred to the Agricultural and Economic
Development Fund and renamed the Agricultural and Economic Development Account
of the Special Revenues Fund in the State Treasury (herein, such account to the
extent it has received such transferred moneys is referred to as the "General
Guaranty Fund"). The General Guaranty Fund is held under and in accordance with
the terms and provisions of the General Guaranty Pledge and Escrow Agreement
dated as of September 26, 1984, as amended and supplemented, by and between the
Board and U.S. Bank National Association, Minneapolis, Minnesota, as escrow
holder (the "Escrow Holder") thereunder. Amounts from time to time on deposit
in the General Guaranty Fund are pledged and allocated to
-2-
guarantee the payment of debt service payments and prepayments due on such bonds
that correspond to unpaid payments of principal and interest then due on the
related Business Loan with respect to such Bonds, whether due upon scheduled
payment dates or upon acceleration prior to the occurrence of such scheduled
payment dates. Reference is hereby made to the General Resolution and the
General Guaranty Fund Pledge and Escrow Agreement, as the same may be amended
and supplemented from time to time, for a description of the rights, limitations
of rights, obligations, duties and immunities of the Board, the Trustee, the
Escrow Holder and the holders of the Bonds, all with respect to the General
Guaranty Fund.
THIS BOND DOES NOT CONSTITUTE A DEBT OR LOAN OF CREDIT OF THE STATE OF
MINNESOTA OR ANY AGENCY OR ANY POLITICAL SUBDIVISION THEREOF (OTHER THAN THE
BOARD) OR THE UNITED STATES OF AMERICA OR ANY AGENCY OR DEPARTMENT THEREOF AND
NEITHER THE STATE OF MINNESOTA OR ANY AGENCY OR ANY POLITICAL SUBDIVISION
THEREOF (OTHER THAN THE BOARD) NOR THE UNITED STATES OF AMERICA OR ANY AGENCY OR
DEPARTMENT THEREOF SHALL BE LIABLE ON THIS BOND. NEITHER THE FAITH AND CREDIT
NOR THE TAXING POWER OF THE STATE OF MINNESOTA OR ANY AGENCY OR ANY POLITICAL
SUBDIVISION THEREOF OR OF THE UNITED STATES OF AMERICA OR ANY AGENCY OR
DEPARTMENT THEREOF IS PLEDGED TO THE PAYMENT OF THE PRINCIPAL OF OR THE INTEREST
ON THIS BOND.
With respect to the creation of the General Guaranty Fund and the pledge
and allocation and guarantee obligation undertaken in connection therewith, the
Board includes and recites in this bond the following covenant of the State as
set forth in Section 116M.06, Subd. 2 of the Act.
The State covenants with all holders of the Board's bonds interested in the
disposition of money in the Economic Development Fund or its accounts
(including the General Guaranty Fund) which money the Board has irrevocably
pledged and allocated for any authorized purpose described in Section
116M.06, Subd. 2 of the Act, that the State will not take any action to
limit the effect of the pledge and allocation and will not take any action
to limit the effect of contracts entered into as authorized in section
116M.06, Subd. 2 of the Act with respect to the pledge and allocation and
will not limit or alter the rights vested in the Board or the State to
administer the application of money pursuant to the pledge and allocation
and to perform its obligations under the contracts.
As provided in the General Resolution, additional Bonds have been issued
and may be issued from time to time, all pursuant to additional lot resolutions,
in one or more series or lots and in various principal amounts, which may mature
at different times, may bear interest at different rates and otherwise may vary
as provided in the General Resolution or any resolution amendatory thereof or
supplemental thereto. The aggregate principal amount of Bonds that may be
issued under the General Resolution is not limited except as provided therein
and in the Act and all Bonds issued and to be issued thereunder are and will be
equally secured by the pledge and
-3-
covenants made therein, except as otherwise expressly provided or permitted in
the General Resolution.
To the extent and in the manner permitted by the terms thereof, the
Resolution and any resolution amendatory thereof or supplemental thereto may be
modified or amended, provided, however, that no such modification or amendment
shall permit a change in the terms of redemption or maturity of the principal of
any outstanding Bond or of any installment of interest thereon or a reduction in
the principal amount of redemption price thereof or in the rate of interest
thereon without the consent of the holder of such Bond, or shall reduce the
percentage of Bonds, the consent of the registered owners of which is required
to effect any such modification or amendment without the consent of the
registered owners of all Bonds then outstanding.
The Single Lot Bonds maturing in any particular year are issuable in the
form of fully registered bonds, without coupons, in denominations of $5,000 or
of any integral multiple thereof, not exceeding the aggregate principal amount
of Single Lot Bonds maturing in such year.
This Bond is transferable, as provided in the General Resolution, only upon
the books of the Board kept for that purpose at the corporate trust office of
the Trustee by the registered holder thereof in person or by his duly authorized
attorney, (i) upon surrender of this Bond together with a written instrument of
transfer satisfactory to the Trustee duly executed by the registered holder or
his duly authorized attorney and (ii) upon payment of the charges prescribed in
the General Resolution. Thereupon a new Bond of the same aggregate principal
amount, series or Lot and maturity shall be issued in the name of the transferee
in exchange therefor as provided in the General Resolution. The Board, the
Trustee and any other paying agent may deem and treat the person in whose name
this Bond is registered as the absolute owner hereof for the purpose of
receiving payment of or on account of the principal or redemption price hereof
and interest due hereon and for all other purposes.
The Single Lot Bonds are subject to redemption prior to maturity as
hereinafter set forth in each instance at the respective redemption prices set
forth (expressed as percentages of the principal amount of any Single Lot Bonds
or portions thereof to be so redeemed) together with accrued interest to the
redemption date.
(a) The Bonds maturing on and after August 1, 2005, are redeemable on
August 1, 2004 and on any date thereafter, at the option of the Board, at a
redemption price of par plus accrued interest to the date of redemption, all in
the manner provided by the General Bond Resolution.
(b) All Single Lot Bonds are subject to redemption prior to maturity, in
whole or in part on any bond payment date at 100% of the principal amount of
such Single Lot Bonds to be so redeemed on such bond payment date in an amount
equal to (i) the net proceeds received by the Board on account of an involuntary
acceleration or prepayment of the Related Business Loan that are deposited in or
transferred to the Special Redemption Account created with respect
-4-
thereto or (ii) Bond proceeds and certain other moneys that are transferred from
time to time to said Special Redemption Account, provided such redemptions must
equal or exceed $5,000, all as more fully described in the Resolutions.
(c) On and after August 1, 1998, the Board may issue Bonds to refund the
Single Lot Bonds and to effect such refunding, deposit the proceeds thereof into
the Special Redemption Account, such proceeds to be applied as otherwise
provided in clause (b) above. This special redemption may be made at the
discretion of the Board notwithstanding the fact that the Single Lot Bonds may
not be optionally redeemed pursuant to Section 2.7 of the Single Lot Resolution.
(d) The Single Lot Bonds are subject to mandatory redemption, in whole and
not in part at a redemption price of 103% of their principal amount plus accrued
interest to the date of redemption, in the event that the Business, after the
occurrence of a Determination of Taxability (as defined in the Loan Agreement),
deposits sufficient funds in the Related Lot Special Redemption Account to
effect such redemption pursuant to its obligation under the Loan Agreement.
Such redemption will occur on the first interest payment date following such
deposit for which notice of redemption may be timely given.
If less than all of the Single Lot Bonds are to be redeemed, bonds shall be
redeemed from each maturity of the Single Lot Bonds in the proportion which the
amount of bonds then outstanding of such maturity bears to the total of all
bonds of such Lot then outstanding if less than all of the Single Lot Bonds of
like maturity are to be redeemed, the particular bonds to be redeemed shall be
selected by the Trustee at random in such manner as the Trustee in its
discretion may deem fair and appropriate. Fully registered Single Lot Bonds in
a denomination of more than $5,000 may be redeemed in part from time to time in
one or more units of $5,000 in the manner provided in the General Resolution.
In addition to the foregoing, the Single Lot Bonds due August 1, 2010 are
subject to redemption prior to maturity by payment of Sinking Fund Installments
as provided in the Single Lot Resolution, at 100% of the principal amount of
such Single Lot Bonds or portions thereof to be so redeemed, together with
accrued interest to the redemption date.
In the event that any Single Lot Bond is to be called for redemption as
aforesaid, notice of such redemption setting forth in the place or places of
payment, shall be given to the registered holder of each Single Lot Bond to be
redeemed in whole or in part at the address shown on the registration books by
mailing a copy of the redemption notice by first class mail not less than 30
days (unless a shorter notice period is required to maintain the exemption of
interest on the Single Lot Bonds from Federal income taxation) nor more than 60
days prior to the redemption date.
On the specified redemption date, all Single Lot Bonds or portions thereof
so called for redemption shall cease to bear or accrue interest and shall not
longer be secured by the Resolution provided moneys for their redemption are on
deposit at the place of payment at that time.
-5-
The holder of this Single Lot Bond shall have no right to enforce the
provisions of the Resolutions, or to institute any action to enforce the
covenants therein, or to take any action with respect to any event of default
under the Resolution, or to institute, appear in or defend any suit or other
proceedings with respect thereto, except as otherwise expressly provided in the
Resolutions. In addition, the right of the holder of this Bond to institute or
prosecute a suit for the enforcement of payment hereof or to enter a judgment in
any such suit is limited to the extent that such action would result in the
surrender, impairment, waiver or loss of the security provided under the
Resolutions for the equal and ratable benefit of all holders of Bonds.
The Act provides that neither the members of the Board nor any authorized
person executing bonds issued pursuant to the Act shall be liable personally on
the Bonds or subject to any personal liability or accountability by reason of
the issuance thereof.
It is hereby certified and recited by the Board that all acts, conditions
and things necessary to be done precedent to and in the issuance of the Single
Lot Bonds in order to make the Single Lot Bonds the legal, valid and binding
special obligations of the Board in accordance with their terms, have been done,
have happened and have been performed in regular and due form as required by
law, and that the issuance of the Single Lot Bonds does not exceed or violate
any constitutional, statutory or other limitation upon the amount of
indebtedness prescribed bylaw of by the Resolutions.
This Bond shall not be valid or obligatory for any purpose and shall not be
subject to the benefits of the guaranty provided by the General Guaranty Fund
until the certificate of authentication hereon shall have been signed by the
Trustee.
-6-
IN WITNESS WHEREOF, Minnesota Agricultural and Economic Development Board
has caused this bond to be executed in its name and on its behalf by the manual
or facsimile signature of the Chair and attested to by the manual or facsimile
signature of its Executive Director, all as of the date of original issue, being
the 1st day of July, 1998.
MINNESOTA AGRICULTURAL AND
ECONOMIC DEVELOPMENT BOARD
(Seal)
By /s/ Xxxxx [Illegible]
---------------------------------
Its Chair
Attest:
By /s/ [Illegible]
----------------------------
Its Executive Director
Authentication Date: 7/15/98
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This Bond is one of the bonds described in the within mentioned
Resolutions. The undersigned has received from the Escrow Holder a certificate
that the amounts in the General Guaranty Fund are pledged to guarantee the
payment of debt service payments and certain mandatory prepayments due on this
bond in the manner and to the extent set forth in said General Guaranty Fund
Pledge and Escrow Agreement and this Bond is subject to the benefits of the
guaranty provided by the General Guaranty Fund.
U.S. BANK NATIONAL ASSOCIATION, as
Trustee
By /s/ [Illegible]
----------------------------
Authorized Signature
(END OF FORM OF CERTIFICATE OF AUTHENTICATION)
-7-
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers
unto ______________________ the within Bond and all rights and title thereunder,
and hereby irrevocably constitutes and appoints _______________________________
attorney to transfer the within Bond on the books kept for registration thereof,
with full power of substitution in the premises.
Dated:
Medallion Signature Guarantee:
Address of transferee
Social security or other tax
identification number of
transferee:
------------------------------------------------
NOTICE: The signature of this assignment must
correspond with the name as it appears on the face
of the within bond in every particular without
alteration or enlargement or any change whatever.
The following abbreviations, when used in the inscription on the face of
this Bond, shall be construed as though they were written out in full according
to the applicable laws or regulations:
TEN COM - as tenants UTMA
in common ......Custodian.......
(Cust) (Minor)
TEN ENT - as tenants
by the entireties
under Uniform Transfer
JT TEN - as joint tenants Gifts to Minors Act...
with right of (State)
survivorship and
not as tenants in
common
Additional abbreviations may also be used,
though not in the above list.
---------------
-8-
DOCUMENT NO. 27
$3,320,000
MINNESOTA AGRICULTURAL AND ECONOMIC DEVELOPMENT BOARD
MINNESOTA SMALL BUSINESS DEVELOPMENT
LOAN PROGRAM REFUNDING REVENUE BONDS
SERIES 1998B, LOT 2
NON-ARBITRAGE CERTIFICATE OF THE BORROWER
I, the undersigned, President, on behalf of Xxxxxxx/May, Inc. (the
"Borrower") do hereby certify and declare with respect to the $3,320,000
Minnesota Agricultural and Economic Development Board Minnesota Small Business
Development Loan Program Refunding Revenue Bonds, Series 1998B, Lot 2 (the
"1998B Lot 2 Bonds") as follows:
1. This Certificate is given to certify certain facts regarding the
expenditure of the proceeds of the 1998B Lot 2 Bonds, pursuant to Section 148 of
the Internal Revenue Code of 1986, as amended.
2. The 1998B Lot 2 Bonds are initially dated as of July 1, 1998, and are
issued pursuant to the General Resolution of the Minnesota Agricultural Economic
Development Authority (now the Minnesota Agricultural and Economic Development
Board (the "Board"), as adopted on December 22, 1986, as amended (the "General
Bond Resolution"), and the Single Lot Resolution with the respect to the
Minnesota Small Business Loan Development Program Revenue Bonds, Series 1990B,
Lot 1 (the "1990B Lot 1 Bonds"), dated June 29, 1990 as amended by the Amendment
to Single Lot Resolution dated June 29, 1998 with respect to the 1998B Lot 2
Bonds (the "Single Lot Resolution") (the General Bond Resolution and the Single
Lot Resolution are herein collectively referred to as the "Resolutions"),
pursuant to which the U.S. Bank National Association is serving as Trustee (the
"Trustee").
3. The Board will receive $3,326,706.39 from the purchaser of the 1998B
Lot 2 Bonds. That amount represents a payment of 100% of the principal of the
1998B Lot 2 Bonds less $-0- original issue discount, plus $6,706.39 representing
accrued interest on the 1998B Lot 2 Bonds from their date to the date of
delivery. All of the money received by the Board from the purchase of the 1998B
Lot 2 Bonds will be made available to the Borrower for refunding the 1990B Lot 1
Bonds and will be so used, provided that the accrued interest will be deposited
in the Holding Account and to be used to pay interest on the 1998B Lot 2 Bonds
due on August 1, 1998 if certain conditions are met in the Loan Agreement dated
July 1, 1990 as amended and supplemented by the First Amendment to Loan
Agreement dated December 31, 1993 and as further amended and supplemented by the
Second Amendment to Loan Agreement dated July 1, 1998 (collectively, the "Loan
Agreement") and provided further that $332,000 in the Business Loan Reserve
Account established for the 1990B Lot 1 Bonds will be deposited into the related
Business Loan Reserve Account established with respect to the 1998B Lot 2 Bonds.
4. The amounts to be received by the Board from the proceeds of the 1998B
Lot 2 Bonds, less the costs of issuance of the 1998B Lot 2 Bonds, do not exceed
the amounts to be spent by the Borrower to refund the 1990B Lot 2 Bonds.
5. The Project (as defined in the Loan Agreement) has not been and is not
expected to be sold or otherwise disposed of by the Borrower during the term of
the Bonds.
6. The principal of and interest on the 1998B Lot 2 Bonds is to be paid
from the Holding Account established under the Resolutions. All moneys
deposited in the Holding Account, including investment income are expected to be
used to pay principal of or interest on the 1998B Lot 2 Bonds on August 1, 1998.
All amounts are transferred out of the related Revenue Accounts and Holding
Accounts within twelve months of the date such moneys were so deposited
principally to pay fiduciary expenses and debt service through the Holding
Account, except for an amount not to exceed the greater of (A) 1 year's earnings
on the portions of such Funds and Accounts used to pay debt service or (B)
1/12th of the annual debt service on the 1998B Lot 2 Bonds. It is not
reasonably expected that any amounts ever will be on deposit in the Special
Redemption Account, the Optional Redemption Account, the Reimbursement Account
or the Reconstruction Account for the 1998B Lot 2 Bonds.
7. On the basis of the foregoing, it is not expected that the proceeds of
the 1998B Lot 2 Bonds will be used in a manner that would cause the Bonds to be
arbitrage bonds under Section 148 of the Internal Revenue Code of 1986, as
amended, and the Regulations prescribed under that Section.
8. To the best of the Borrower's knowledge and belief, the expectations
of the Borrower, as set forth above, are reasonable and there are no facts,
estimates or circumstances other than those mentioned above that would
materially change the foregoing conclusions.
9. To the extent they are within the knowledge, belief or control of the
Borrower, the facts, circumstances, and expectations set forth in the arbitrage
certificate of the Board may be relied upon by the Board and its bond counsel
with respect to the 1998B Lot 2 Bonds, and the expectations set forth in such
arbitrage certificate are the expectations of the Borrower.
-2-
IN WITNESS WHEREOF, I have signed this certificate this 15th day of July,
1998.
XXXXXXX/MAY, INC.
By /s/ Xxxx Xxxxxx
------------------------------
Its President
--------------------------
Signature page of Document No. 27, Non-Arbitrage Certificate of the Borrower
-3-
