4.3. SR 07-27-1998 - Laserfiche WebLink

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AGREEMENT COMPENSATING THE CITY OF ELK RIVER, MINNESOTA FOR INABILITY TO DESIGNATE BANK QUALIFIED BONDS SOLD AFTER AUGUST 1, 1998 THROUGH DECEMBER 31, 1998 This Agreement is dated as of July 27, 1998; is by and among the City of Elk River, Minnesota, (the "City") and Guardian Angels of Elk River, Inc. ("Guardian Angels") and provides as follows: 1. Recitals. a. Guardian Angels represent that they have asked the City to issue, in 1998, for their benefit approximately $15,000,000.00 of bonds (the "Bonds") which would be "qualified 501 (c) (3) bonds" under section 145 of the Internal Revenue Code of 1986, as amended (the "Code") for the purpose of constructing new facilities and refinancing pre-existing similar obligations issued for the benefit of Guardian Angels. b. Guardian Angels acknowledges and agrees that the issuance of the Bonds is subject to the final approval of the City Council in its sole discretion, and nothing in this Agreement shall be construed to constitute a commitment by the City to Issue any of the Bonds. c. Prior to this Agreemem's execution, the City could have reasonably expected to be a"qualified small issuer" under Section 265 (b) (3) of the Code, which generally requires that no more than $10,000,000 of tax exempt 5;01 (c) (3) bonds or bonds issued by the city for its own purposes be issued in said calendar year. d. The City and Guardian Angels recognize that the issuance of bank qualified, small issuer tax-exempt obligations in the market conditions currently prevailing would result in lower interest rates for the City's bonds, than those sold as non-bank qualified, tax exempt obligations. e. The Guardian Angels Bonds would be counted against the City's $10,000,000 maximum for 1998, and would thus disqualify the City as qualified small issuer for the current calendar year, 1998. f. The City anticipates that it will need to issue its own bonds in 1998 in one or more series, the purposes amounts and terms are estimated as follows: (i) $1,800,000.00 General Obligation Improvement Bonds with an estimated term of 15 years (ii) $ 500,000.00 General Obligation Water Bonds with an estimated term of 15 years 0ii) $ 125,000.00 General Obligation Equipment Certificate (iv) $2,800,000.00Park/Pool Bond Issue $5,225,000.00 Total Nothing in this agreement shall prevent or require the City Council in its judgment, from issuing bonds it deems necessary to conduct the business of the City of Elk River. This Agreement shall not apply to "conduit" 501 (c) (3) bonds issued for the benefit of other borrowers.