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e RESOLUTION 95 - ~ A RESOLUTION FOR THE CITY OF ELK RIVER A RESOLUTION APPROVING EXTENSION AGREEMENT FOR INDUSTRIAL DEVELOPMENT REVENUE BOND (SCHERER LIMITED PARTNERSHIP PROJECT) WHEREAS, pursuant to a Loan and Purchase Agreement dated as of December 1, 1985 (the "Loan Agreement"), among the City of Elk River (the "City"), Scherer Limited Partnership, a Minnesota limited partnership (the "Partnership"), and Highland Bank (formerly Security State Bank of St. Michael), a Minnesota banking association (the "Bank"), the City has issued its $1,400,000 City of Elk River Industrial Development Revenue Bond (Scherer Limited Partnership Project) (the "Bond") to the Bank and loaned the proceeds of the Bond to the Partnership; and, e WHEREAS, the Loan Agreement obligates the Partnership to make Loan Repayments in amounts and at times sufficient to pay principal of and interest on the Bond; and, WHEREAS, the Bond bears interest at a variable rate that is adjusted quarterly, on January 1, April 1, July 1, and October 1 of each year, to equal the rate which is one percent per annum above the bond equivalent yield on United states Treasury bills having maturities of 180 days, as established on the date of each such interest rate adjustment, but which rate shall never be less than 7.00 percent per annum nor greater than 13.00 percent per annum; and, WHEREAS, the Bond is payable in monthly installments of principal and interest (the amount of which is adjusted on each interest rate adjustment date), based on a twenty-year amortization scheduled, which payments commenced on February 1, 1986; and, \VHEREAS, the Bond provides for a final payment on January 1, 1996, of all principal of and interest due on the Bond (the "Balloon Payment"); and, e WHEREAS, the Partnership and the Bank desire to eliminate the :galloon Payment and extend the final maturity of the Bond until January 1, 2006, as provided herein.