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RESOLUTION AUTHORIZING THE ISSUANCE AND SALE OF
<br />$1,000,000 INDUSTRIAL DEVELOPMENT REVENUE BOND
<br />(METAL CRAFT MACHINE & ENGINEERING, INC. PROJECT), SERIES 2008A
<br />AND
<br />$4,000,000 INDUSTRIAL DEVELOPMENT REVENUE BOND
<br />(METAL CRAFT MACHINE & ENGINEERING, INC. PROJECT), SERIES 2008B
<br />TO FINANCE A PROJECT
<br />BE IT RESOLVED by the City Council of the City of Elk River (the "Issuer"), as
<br />follows:
<br />1. The City Council has received a proposal from Metal Craft Machine &
<br />Engineering, Inc., a Minnesota corporation ("Metal Craft") and Mowry Properties, LLC, a
<br />Minnesota limited liability company ("Mowry" and together with Metal Craft the "Borrower"),
<br />that the Issuer undertake to finance a certain Project as herein described, pursuant to Minnesota
<br />Statutes, Sections 469.152 through 469.1651 (the "Act"), through issuance by the Issuer of its
<br />$1,000,000 Industrial Development Revenue Bond (Metal Craft Machine & Engineering, Inc.
<br />Project), Series 2008A (the "Series 2008A Bond") and its $4,000,000 Industrial Development
<br />Revenue Bond (Metal Craft Machine & Engineering, Inc. Project), Series 2008B (the "Series
<br />2008B Bond," and together with the Series 2008A Bonds, the "Bonds"). The Issuer held a
<br />public hearing with respect to the Project on July 21, 200.8 after duly publishing notice thereof.
<br />2. The Project consists of the construction of an approximately 63,000 square foot
<br />manufacturing facility for medical devices, including related equipment and furnishings, located
<br />at 13760 Business Center Drive in the City of Elk River, Minnesota (the "Property") and the
<br />acquisition and installation of equipment (the "Equipment") therein.
<br />3. It is proposed that, pursuant to (a) a Loan Agreement dated as of August 1, 2008,
<br />among the Issuer, GE Government Finance, Inc. (the "Lender") and the Borrower (the
<br />"Equipment Loan Agreement"), the Issuer loan the proceeds of the Series 2008A Bond to Metal
<br />Craft to finance the Equipment, and (2) a Loan Agreement dated as of August 1, 2008, among
<br />the Issuer, the Lender and the Borrower (the "Property Loan Agreement"), the Issuer loan the
<br />proceeds of the Series 2008B Bond to Mowry to finance the Property. The Property and the
<br />Equipment are hereafter referred to as the "Project". The Property Loan Agreement and the
<br />Equipment Loan Agreement are hereafter referred to as the "Loan Agreement". Proceeds of the
<br />Bonds will be funded by the Lender and disbursed from (a) an escrow fund pursuant to the terms
<br />of an Escrow Agreement dated as of August 1, 2008 by and among the Lender, the Issuer, the
<br />Borrower (the "Property Escrow Agreement") and the escrow agent named therein, and (b) an
<br />escrow fund pursuant to the terms of an Escrow Agreement dated as of August 1, 2008 by and
<br />among the Lender, the Issuer, the Borrower (the "Equipment Escrow Agreement") and the
<br />escrow agent named therein, collectively the Property Escrow Agreement and the Equipment
<br />Escrow Agreement are referred to as the "Escrow Agreement." The loan payments to be made
<br />by the Borrower under the Loan Agreement are fixed so as to produce revenues sufficient to pay
<br />the principal of, premium, if any, and interest on the Bonds when due. Payment of the Bonds
<br />will be secured as provided in the Loan Agreement and the Escrow Agreement.
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<br />Elk River Metal Craft RESOLUTION AUTHORIZING ISSUANCE AND SALE.DOC
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