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83-6752R76 ItESOLUTI(3N N0. 6752 FINAL NO'T'E :2ESOLUTION' MINNESOTA MINI-STORAGE BE IT RESOLVE L? by the City Council of the City of R.ichfied, Minnesota, as follows: ARTICLE ONE DEFINITIONS, LEGAL AU'T'HORIZATION AND FINDINGS 1-l. Definitions. The terms used herein, unless the context hereof shall require otherwise shall have the following meanings, and any other terms defined in the Loan Agreement shall have the same meanings when used herein as assigned to them in the Loan Agreement unless the context or use thereof indicates another ©s different meaning or intent. Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Assignment of Rents and Leases: the agreement to be executed by the 3orrower assigning all the leases, rents, issues and profits derived from the Project to the Lender to secure the repayment of the Note and interest thereon; 3ond Counsels the fire <~f Briggs and Morgan, Pro~ession«1 Associatiacz, of 3t. Paul and Minneapolis, ~Ki nnesota, and any opinion of Bond Counsel shall be a written opinion signed by such Counsel; Borrower: Minnesota t~!ini-Storage II, a Minnesota general partnership consisting of E. H. Jaroszews}ci and W. Bruce Hubbard, i s successors, assigns, and any surviving, resulting or transferee business entity which may assume its obligations under tine Loan Agreement; Czty: the City of Richfield, Minnesota, its successors and assigns; Construction Fund: the fund established by the City pursuant to this Resolution; the proceeds of the Note will be deposited into the Proceeds Account of the Construction Fund; Constructicn Loan ~A~rreerRent: the a5reernent to be executed b~ the City, the 3orrower and the Lender, relating to the dzsbur se:nAnt and pay:,7e~,t of 'rolect Costs out of th° Construction =und .for ~.he acquisition of the .and and .the construction and insta~.lation of the improvements; Guarantors.: collectively, E. 'ri. Jaroszewski .and W. 3ruce Hubbard; Guara~: the personal guaranty to be executed by the Guarantors in favor of ~~ the Lender; T_:-nnroverner_ts: the structures and otner improvements, includinn5 any tangible ,personal property, to be constructed or ~~:stal,led bar the Borro~?er on the Lana in accordance with the pays anti ~peoficati:ors, but specifically excluding any portion of the facility used as a residence; Land: the real property and any other easements and rights described in Exhibit A attached to the Loan Agreement; Lender: First National dank o= Minneapolis, Minneapolis, Minnesota, its successors and assigns; Letter of Credit:' the 575,000 Letter of Credit issued in favor of the Lender; iAan Agreement: the agreement to be executed by the City _ and t~.'ze 3orrower, providing fcr. the issuanr. a. of the Note and the '_oan of the proceeds thereof to the Borrower, including any amendments or supplements thereto made in accordance with its provisions; Mortgage: the Combination Mortgage, Security Agreement and r^ixture r^inancing Statement from the Borrower, as mortgagor, to the Lender, as mortgagee, securing payment of the vote and interest thereon, including any mortgage supplemental thereto entered into in accordance with the provisions t:~ereof; Vote: the 51,500,'000 Commercial development Revenue Vote of 1983 {Minnesota Mini-Storage IT Project), to be issued by the City pursuant to this Resolution; Note Register: file records 'kept by the City Clerk to provi3e 'o`r the registration of transfer of owners'r.ip of the Note ; 2~ Plans and Svecifcations: the plays and specifications for the construction and ins~allation of the Improvements on the Land, which are approved by the Lender, together with such modif.catcans thereof and additions thereto as are reasonably determined by the Borrower to be necessary or desirable for the ,completion of the Improvements and are approved by the Lender; P1.e~~d e~___Agreement. the agreement to be executed by the City an~-the Lender pledging and assigning the Loan Agreement to the Lender; Project: the Land and Improvements as they may at any time exist; Project Casts: the total of all "Construction Costs" and "Loan and carrying Charges," as those terms are defined in the Loan Agreement; Resolution: this Resolution of the City adapted April 25, 1983, together with any supplement or amendment thereto. All references in this instrument to designated "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and subdivisions of this instrument as originally executed. The words "'Herein," "hereof" and "hereunder" and other words of similar import refer to this Resolution as a whole not to any particular Article., Section or subdivision. 1-2. Legal- Authorization. The City is a political subdivisior. or" the State of Minnesota and is authorized under the Act to initiate the revenue producing project 'Herein referred to, and to issue and sell the dote for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution. 1-3. Findings. The City Council has heretofore dete ~~ined, and does hereby determine, as follows: (1) The City is authorized by the Act to enter into a Loan Agreement for the public purposes expressed in the Act; (2) The City has made the necessary arrangements with the 3orrower for the establishment within the City of a Project consisting of certain property all as more fully described i?1 the Lawn Agreement and which will be of the character and 3 accomplish t'n4 purposely provided by the Act, and the City has - by t-:a.s Resolution autlhorized the Project and execution of the ©ari• Ag'ree^,ter?t, the ~ pledge Agreement, the L7ote ancT the Construction Loan Agreement, which documents specify the terry and conditions of the '~acguisition and financing of the Project, (3) in authorizing the Project the City's purpose is, and in its judgment the ef~ect thereof will be, to promote tze public welfare by: the attraction, encouragement and develop- merit of economically sound industry and commerce so as to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment; the deveio_o- me t of revenue-producing-enterprises to use the available resources of tine community, in order to retain the benefit of the G~~~ltttunity' s existi.~g invest+-nent in educational and public service facilities; the halting of the movement of talented, educated personnel of all ages to other areas thus preserving the economic and hu,-nan resources needed as a base for providing governmental services and facilities; the provision cf acces- sible employment opportunities far residents in the area; the expansor. of an adequate tax base to finance the cost of governmental services, including educational services for the school district serving the community in which the Project is situated; (4) the amount estimated to be necessary to partially finance the U~-oject Costs, including the costs and estmate3 costs permitted by Sec~ion 4'74.05 of the Act, will recruire the issuance of the Note in tine principal amou~:zt of $1,500,000 as herEinafter provided; CS) it is desirable, feasible and consistent with the objects and purposes of the Act to issue the Vote, for the purpose of partially financing the Project; ~(o) the Note and ',the interest accruing t'nereon do not constitute an indebtedness of tine City within the meaning of any constitutional or statutory Limitation and do not constitute or give rise to a pecuniary liability or a charge against the general credit or taxing powers of the City and neither the full faith and credit nor the taxing power of the City is pledged for the payment of the vote or interest thereon; and (7) The Note is an industrial development bond within the meaning of Section 103(b) of the Internal Revenue Code and is to be issued within the exemption provided under subparagraph 4~ (D) of Section 103(b)(6) of tine Cade with respect to an issue of 510,000,000 or less; provided that nothing herein shall pr-event the City from hereafter qualifying the Vote under a difze-rent sxemption if, and to the extent, such exemption is pernitted by law and consistent with the objects and purposes of the Droject. 1-4. Authorization and ratification of Project. T'he City has heretofore and does hereby authorize the Borrower, in accordance with the provisions of Section 474.03(7) of the Act and. subject to the tex^ns and conditions set forth in the Construction Loan Agreement, to provide for the construction and installation of the project pursuant to the Plans and Specifications by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for. bids as may be rewired for the construction and acquisition of municipal faci lines; and the City hereby ratifies, affirms, and approves all actions heretofore taken by the Borrower consistent with. and in anticipation of such authority and in compliance with the Plans and Specifications. ARTICLE TWO ~ NOTE 2-1. Authorized A.mourt anal Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form set fortz herein, with such appropriate variations,, ornis5ions and insertions as are perntted or required by this Resolution, and in accordance with the furtler provisions hereof; and the total. principal amount of the Vote that may be outstanding hereunder is expressly li*nited to $1',500,000 unless a duplicate Note is issued pursuant to Section 2--7, The Vote shall be in sti`.astant.al~.y the following form: b. UNI'T'ED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF RICHFIELD Commercial Development Revenue Note of 1983 (Minnesota Mini-Storage II Project) $1, 500,, 000 FOR VALUE RECEIVED the CITY OF RICHFIELD, :-iennepin County, Minnesota, (the "City") hereby promises to pay First National Sank of Minneapolis, in Minneapolis, Minnesota, its successors or registered assigns (the "Lender" and .any such successor or registered assignee being also sometimes herein- after referred to as the "Holder"), from the source and in the manner hereinafter provided, the principal sum of ONE MILLION FIVE F~UNDRED THOUSAND AND NO/100 DOLLARS ($1,500,000.00), or so much thereof as remains unpaid from time to time (the "Principal 3alanee"), with interest thereon at the rate specisied in paragraphs l(a) and 1(b) hereof (the "Tax Lxempt Rate") or at such higher rate as hereinafter provided in paragraph 1(c) hereof (the "Taxable Rate"), in any Coi.~z or curr~:ncy which al the lima or times of payment is legal tender for she payment Jf public or privat% debts in the United States of Ame=ica, in accordance with the terms hereinafter set forth. 1. (a) r^rom and after the date hereof through and including November 1, 1984, interest only shall be paid at the rate of 12 $ per annum. Interest shall accrue from and after the gate hereof and shall be payable on the first day of the calendar month next succeeding the date hereof, and on the first day of each and every month thereafter through and including November 1, 1984. (b) Commencing on December 1, 1984 and on the first day of each calendar month thereafter, the Principal 3alance shall be amortized in equal consecutive monthly installments of principal and interest the amount of each of whic;~ is to be calculated on an assumed twenty-five year amortization with interest from November 1, 1984 at the rate 7 ~'~ 12 ~ per annum and a final installment on November 1 2009 (t:Ze "cfinal ~Satur'~ity Date") which shad be equal to the unpaid Principal 3alanlce and accrued interest thereon. Any pay*~7ert shall be applied first to accrued. interest and thereafter to reductio',n of the Principal Balance. {c){i) In the event that the interest on this Note shall become subject to federal income taxation pursuant to a ,Determination of Taxability (as hereinafter defined), the interest rate on this Note shall. be increased, retroactively effective from and after the Date of Taxability (as hereinafter defined) to 15 1!2 ~ per annum (the "Taxable Rate")• The City shall i,.'nmediately'upon 3emand pay tc the Holder and to each prior Holder affected by such Determination of Taxability an amount equal. to the amount by which the interest accrued recraactively at such increased rate from the Date of Taxability to the date,of payment exceeds t:~e amount of interest actually accrued and paid to the Holder and any such prior Holder during said period. (Such obligation of the City shall survive the payment in full of the principal amount of this Note.) Commencing on the first day of the month next following the date of payment of such additional interest and continuing on the first day of each month thereafter (unless the ciolder shall accelerate tine maturity of the Note pursuant to clause {ii) of thislparagraph (c}), tnis vote sha1,I be payable as Follows: (A) if'amortizatian of the Principal balance had nat t'r..eretofore commenced under. cara- graph (b} hereof, the monthly payments of~ interest only hereunder shall be increased to 'reflect the accrual of interest at the Taxable Rate and the monthly installments of principal and interest payable commenc- ing'. with the December 1, 1984 payment shall be recomputed on the basis of the Taxable Rate on an assumed twenty-five year amortization; or (B) if amortization of the Principal Balance had theretofore commenced under paragraph (b) hereof, the monthly installments of principal and interest payable commencing with the next succeeding payment shall be recomputed on the basis of the Taxable-Rate and amortization over the remaining portion of. the original assumed amortization. 8• (ii) Upon a Determination of Taxability, the Solder :gay declar= the entire Principal 3alance of t'nis Note together with accrued interest thereon at such retroactively incr-eased Taxable date to be immediately due and payable,. plus the prepayment pre.*nium, calculated in accordance with paragraph 7 hereof. (iii} The Holder shall give notice, as soon as practicable, to the borrower (as hereinafter defined) of any notice of Taxability (as hereinafter defined) received by the Holder and permit the Borrower to contest, litigate or appeal tie sa:-ne at its so.e expense; provided that any such contest, litigation or appeal is, in the reasonable opinion of the Holder, being undertaken and carried forward in good faith, diligently and with reasonable dispatch. In the event any such contest, litigation or appeal is undertaken, the increased interest provided in paragraph (b}(i) shall, nevertheless, be payable to the Holder and shall be held by the ~?old.er in escrow (without paying nterestthereon) Wending final disposition of such contest, litigation or appeal, provided that the Borrower shall indemnify and hold harmless the Bolder and each prior Holder from any and all penalties, interest or other liabili- ties which they may incur on account of such contest, litiga- tion or appeal. (iv) The terms "Determination of Taxability," "Date of Taxability" and "Notice of Taxability" as used herein shall have the meanings ascribed to. such terms in Section 4.07 of. the Loan ~.gree.~nent of even •3ate :~erewit'z ( the "Loan agreement") between the City end Minnesota Mini-Storage II, a Minnesota general partnership consisting of E. 3. Jaroszewski and W. Bruce Hubbard (the "Borrower"). 2. In any event, the payments hereunder shall be sufficient to pay all principal and interest due, as such principal and interest becomes due, and to pay any premium or service charge, at maturity,. upon. redemption, or otherwise. Lnterest shall be computed on the basis of a 300 day year, but charged for the actual number of days elapsed.. 3. Principal and interest and premium or service charge due hereunder shall be payable at t:-~e principal office of the Lender, or at such other place as the Lender may designate in writing. • • 4. This Note is issued by the City to provide funds for a project, as defined in Section 474.02, Subdivision la, Minnesota Statutes, consisting of the acquisition of real 9 estate, and the constructior. of a self- ~ ~ ~ - s~orage _ac~l~,v they eor_, pursuant to t'he Loan Agzzdttent, -and this Note further issued pursuant to and is i,n full compliance w;,th the Constitution and lawso° the State of Minnesota, particularl Chapter ?7d, Mi.nnesotal Statutes, and pursuant to a resolution of the City Council duly adopted on April 25, 1983 (the "Resolution") . 5 • 'T`his Note is secured by a Pledge Agreement of even date herewith by the City to t e Lender t o A reement" h ( he Pl~dge g ) a Combination Mortgage, Security Agreement a_na rixture Financing Statement, of even date herewith between the 3orrower, as mortgagor; and the Lender, as mortgagee (the "Mortgage"), a Guaranty of even date herewith from E. ci. Ja.roszewsk and +~7. Bruce Hubbard to the Linder {the Guaranty}, an Assig;ZZnent ~f Rents ', and Leases, of even date herewith from the 3orrower to the Lender (the "Assignment of Rents and Leases") and by a $75,000 Letter of Credit issued ~n favor of the Lender (the "Letter of Credit"). The proceeds-of the Note shall be pla€ed in the '.proceeds Account of the Construction r^und established pursuant to.the Resolution and the Construction loan Agreement of even .date among the Lender, the City and the norrower {'.the "Construction Loan Agreement") {hereinafter referred too), and the disbursement of the proceeds of t'ris Note from the Construction Tuna is subject to the terms. and conditions of the Construction Loan Agreement, 6: The Principal 3alance may be prepaid in whole or in part in increments o'f $? 00, Ofl0 on the f:? rst day of a.~y month upon at leas.. 30 Says advance written notice to the molder (or such lesser period of notice as the :older may approve) and upon payment of an amouizt equal to the principal amount bein so prepaid, plus accrued interest hereon Lo the date of prepay- ment, plus the prepayment premium calculated in accordance with paragraph 7 hereof. This Note is also subject to mandatory prepayment in whole or in part pursuant to 5ectior_ 3.1 of the Construction moan Agreement in the amount of any su~-ns remaining in the Proceeds Account'of the Construction 'und at the Corrfpietion Date {as suc: terms are defined in the Construction Loan Agreement), in which event a prepayment premium shall also be payable in accordant= witn paragraph 7 hereof, and the time of such prepayment may riot be extended. U pon the occurrence of certain "Events of Default" under tine Construction Loan Agree- ment, the Loan Agreement and/or under the Mortgage, and as provided in paragraph 11 hereof, the Holder. may declare the 10 Principal. Balance and accrued interest on this Note to be i.-amediately due and payable (and such action and any similar action pursuant to paragraph 1(c}(ii) hereof being hereinafter referred to as an "acceleration" of this Note}, in which event a prepayment premium shall also be payable in accordance with paragraph '~ hereof. Upon the occurrence of certain events of damage, destruction or condemnation, the Holder may, as provided in Article Five of the Mortgage and Section 5.02 of the Loan Agreement, apply the net proceeds of any insurance or condemnation award to the prepayment, in whole or in part, of the Principal Balance in which event a prepayment premium may be payable in accordance with paragraph 7 hereof. This Note may be called for redemption and prepay- merit, in whole, at the option of the Holder, on May 1, 1993 (or at any time within six months following May 1, 1993) (the "Call Date"), upon at least thirty (30) days advance written notice to the Borrower (or such lesser period of notice as the Borrowex may approve). The 3orrower has the right under this Note on the-Call Date (if the Holder has given the required notice),. in lieu of redemption of this Note, upon five (~) days advance written notice yarior to the Call Date, to purchase the Note from the Molder or give notice to the ciolder that it has secured a purchaser for the Note. The Holder agrees, in lieu of rede.~cpton of this Note to sell the Note to the Borrower or such. purchaser on the Gall Date at a purchase price equal to ~che ~?-incipal Bal=:~ce and accrued interest. 7. (a} If at the time of any prepayment on or prior to May 1, 1988 or acceleration of this Note occurring prior to May 1,.1988, the Borrower shall pay, together with the pre*nium, if any, set forth in paragraph (b) hereof, an amount equal to 2$ of the amount or principal so prepaid. notwithstanding the foregoing, no such prepayment premium shall be payable with respect to a prepayment made at the option of the Hoiden pursuant to Article Five of the Mortgage or Section 5.02 of the Loan Agreement, unless an Lvent of Default had occurred under the Loan Agreement, Construction Loan Agreement or the Mortgage and remains uncured at the time such prepayment is made. (b} If at the time of any prepayment or. acceleration of this Note, occurring prior to May I, 1993 the yield on U. S. Treasury securities (as published by the Federal Reserve Bank of New York) having a maturity date closest to May 1, 1993 (the "Governmental Yield"), as dete reined by the I1 3clder as of the date ~f preoayrr~ent or acceleration, is less than ~ the borrower small pay a premium calcula tea as ,glows : ' (~, ) the amount of principal so pra_aa i d shall be multipled by ~(i) the amount by which ~ exceeds the ~over~.ment Yield as of the date of prepayment or acceleration, times ( i ],. ) d fraCtlon, the numerator Of Wh1.Ch i5 the number of days name%ning to ~2ay 1, 1993 and the der_ominator of which is 360, (b) the resulting product shall then be divided by the number of whole :aonths then remaining to tray 1, 1993 yielding a quotient (the "Quotient"), (c) the amount of the prepayment premium payable under this paragraphn shall be the present value on tree Gate of prepayment or acceleration (using the Covernmen~ Vie1d as of the date of prepay;nent or accelerat~.on as the discount factor) of a stream of equal momchly payments in number equal to the number o= whole months remaining to May 1, 1993, with the amount of each such hypothetical monthly payment equal. to the Quotient and with the first payment payable on the date of prepayment or acceleration. Notwithstanding the foregoing, no such prepayment premi~.un shall be payable with respect to a prepayment made at the'opti.on of the Molder pursuant to Article Five of the Mortgage or Section 5.02 of the Loan Agreement unless an Event of Default had occurred under the Loan Agreement, Construction Loan Agreement, or the Mortgage and remains uncured at the time such prepayment is mace. 8. The monthly payments due under paragraph I hereof shall continue to be dus and payable in r"ull until the entire Principal Balance and accrued interest due on this vote have been paid regardless o any partial prepaij~nent made hereunder, 9. As provided in the Resolution and subject to certain limitations set forth therein, this Vote is transferable upon the books of the City at the office of the City Clerk, by the Molder in person or by his agent duly authorized in writing,~,at the Molder's expense, upon surrender hereof together with a,written instrume~-~t of transfer satisfactory to the City Cler'~c, duly executed by the Holder or his duly authorized agent. Upon such transfer the City Clerk will note the date of registration and the name and address of the new registered Holder in the registration blank appeasing below. 'I'he City ;nay deem and treat the person. in whose name the vote is last registered upon the books of the City with such registration noted on the Note, as the absolute owner hereof, whether or not ,overdue, for the purpose of receiving 12 paymer:t of qr on the account, of the principal Balance, -- redemptivn price or interest and for a1.I other purposes, and all such payments so made to the folder or upon his order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the swm or sums so paid, and the City shall. not be affected by any notice to the contrary. i0. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Mortgage, the Assignment of Rents. and Leases, the Loan Agreement, the pledge Agreement and the onstruction Loan Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. I1. This Note and interest herein and any service charge or premium due hereunder are payable solely from the revenues and proceeds derived from the Loan Agreement, the Mortgage, the Guaranty, the Assignment of Rents and Leases, and the Letter of Credit and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation., are not payable from or a charge upon any funds other than the revenues and proceeds pledged to the payment thereof., and do not give rise to a pecuniary liability of the City or, to the extent pe r.~itted by law, of any of its officers, agents or employees, and no holder of this Note shall ever have the right. to compel any exercise of the taxing power of the City to pay this Note or the interest thereon, or to enforce payment thereof against any property of the City, and thi~~ Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues or other funds furnished for such purpose in accordance with the Loan Agree:^.ient, sufficient to pay all costs of such performance or the enforcement thereof. 12. It is agreed that time is of the essence of this Note. If the City defaults in the payment when due of any installment of principal or interest or any premium or penalty due hereunder, or an Event of default shall occur, as set forth in the i~iortgage, the Assignment of Rents and Leases, the Construction Loan Agreement or the Loan agreement or the Little Canada Loan Documents (as defined in the Loan Agreement), then the Lender shall have the right and option to declare the principal Balance and accrued interest thereon, together with the premium, if any, payable under paragraph 7 hereof, 13 ismediately d:ue aid ,oav~lable, but solely from the sources spec.fed ;.n pa~agrar~h '11 hereof. r^ailure to exercise such option at any ta.:me snal~,l not constitute a •~'aiver of .the right t0 eXerCl.Se the salLte at'; any subsec7ue.^.t ti.'ile. 13. 'i':+-se remed~i es of the rioiaer, as provided herein and in the Mortgage, thie Assignment of Rents and Leases, the Guar~.nty, the Loan Agreement, the Pledge Agreement, the Letter of Credit and the Const'ructior. Loan Agreement, are not exclusive and shall be !cumulative and concurrent and may be pursued singly, successively or together, at t.-~e sole discretion of the Holder, and may be exercised as often as occasion therefor shall',occur; and the failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereon. 14. The Solder shall not be deemed, by any act of omission or commission,', to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Solder and, then', only to the extent specifically set forth in the writing. ~ waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. IT I5 HEREBY CERTIFIED AI`tD RECITED that all conditions, a4ws and th~.ngs required to exist, happen a.~d be perforneci precedent to or in the issuance of this mote do- exist, have happened and have been performed in regular and dun fore as req~ii red 5y law'. h7 WITNESS WHEREOF, the City has caused this Vote to be. duly executed in its'name by the manual signatures of the Mayor and the City Cler'~c and has caused the corporate seal to be affixed hereto, and has caused this. Note to be dated April 1983. CITY OF R_TCHFIELD, MINNESOTA. Mayor attest: City uanager (S F..AL ) 11 DROVISSONS AS TO REGISTRATION The ownership of the unpaid Principal 3alance of this Note and the interest accruing thereon is registered on the hooks of the City of Richfield in the name of the holder last noted below. Date of name and address Signature of Registration Registered Owner Clerk rr^irst National dank of ~inneaaolis First ~ank~Place April ,.19.83 .Mills, MN. 55480 15 2-2 The Note • The Note shallll be dated as of t'ne date of .delivery, shall be payable at the times and in the manner, sha ll bear interest at the rate, and shall be subject to such other terms and conditions as are set forth therein. 2-3. Execution. ' The Mote shall be executed on behalf of the City by the signatures of its Mayor and City Manager and shall be sealed with the seal of the City. In case any officer whose signature shall appear 'on the Notz shall cease to be such officer Before the delilvery of the Vote, such signature shall never. ~:hel~ss be valid ~~,nd sufficient for all purposes, the same as "~. ' ~'~3d remained in office until delivery. In the event of the absence or disabili',ty of the Mayor or the City Manager such officers of the City as', in the opinion of the City Attorney, :nay act in their behalf', shall without turf,-per act or authorization of the City Council execute and deliver the Vote.. 2-4. Delivery of Note. The offer of 'the Lender to purchase the Note upon the terms recited herein and in the Loan Agreement, at a price equal to the total principal amount of the Note, is found to be reasonable and advantageous to the City and is hereby accepted. Before ~,elivery of ~:he Note t'ner~~ shall be f :led wi~.h the Lender (except to the extent waived by the Lender) the following items: (1) an executed copy of each of the following documents: {A) the Loan Agreement; (B} the Pledge Agreement; {C) the Mortgage; (D) the Assiyrment of Rents and Leases; (E} the Cons ruction Loar. Agreement; (F) the Guaranty; Io (G) a Cost Certificate signed by the 3orrower certifying the use of the proceeds of the vote; (:d) the Letter of Credit. (2) an opinion of Counsel. for the 3orrower as in scope and substance satisfactory to 3ond Counsel and Lender as to the authority of the 3orrower to enter into the transaction and other related matters; (3) the opinion of 3ond Counsel as to the validity and tax exempt status of the Note; (4) such other documents and opinions as 3ond Counsel may reasonably require for purposes- of rendering its opinion required in subsection (3) above or that the Lender may reasonably regu:.re for the closing. 2-5. Disposition of Note Proceeds. There is hereby established with the Lender a Construction Fund to be held by Title Insurance Company of Minnesota ("Title") as a separate account of the City as provided in the Construction Loan Agreement. Upon delivery of the Note to Lender, -the proceeds of such Note shall 'fle credited to the Proceeds Account of the Construction rr^und, at which time the entire principal amount of the Note shall be deemed advanced. The. Lender shall, on behalf of the City, direct Title to disburse. funds from the Construction r^^und for payment of Project Costs upon receipt of sur:h suppJrting documentation as the Lender or Title may deem reasonably necessary, including compliance with the provisions of the Construction Loan Agreement. The Lender, Title or the 3orrower shall provide the City upon request with a full accounting of all funds disbursed for Project Costs. 2-6. Registration of Transfer. The City will cause to be kept at the office of the City Clerk a Vote Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be initially registered in the name of the Lender and shall be transferable upon the Note Register by the Lender in person or by its agent duly authorized in writing, upon surrender of the vote together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the Leader or its duly authorized agent. l~ Upon such trans°er the City Cierk shall note tine date of registration and the :lame and address of the new Lender in the vote-Register 3r.~ in the registration blank appearing on the Mote. 2-7. 1"2utilated, Lost or Destroyed Note. In case any Note issued 'Hereunder shall 'Become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like outstanding principal amount, number and tenor in exchange and substitution for and upon cancellation of such mutilated Note, or in lieu of and in substitution for such Note destroyed or Lost, upon the Lender's paying the reasonable expenses .and charges of t're City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City that such Note was destroyed or Zost, and furnishing the City with indemnity satisfactory to it. If the mutilated, destroyed or lost dote has already matured or been called for redemption in accordance. with its terms it shall. not be necessary to issue a new Note prior to payment. 2-8. ownership of Note. ..~._~ The City may' deem and treat the person in whose na*ne the vote is last registered in the Note Register and by notation on the Note whether or not such Note shall 'oe overdue, as tre absolute o-aner of such Note for the purposa of receiving payr~iant of or on sccount of tree Principal 3alance, redemption price ar interest and for all other purposes whatsoever, and the City shall not be affected by any notice to the contrary. 2-9. Limitation on Note Trans~ers. The Note has been issued without registration under state or other securities laws, pursuant to an exemptior. for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Vote be given pursuant to any participation agreement, except in accordance with an applicable exemptior. from such registration requirements. 18 ARTICLE THREE GENERAL COVENANTS 3-i. Payment of Prircioal and Interest. The City covenants that it will promptly pay or cause to be paid the principal of and interest on the Note at the place, on the dates, solely from the source and in the manner provided herein and in the Note. The principal, interest and any premium or service charge are payable solely from and secured by revenues and proceeds derived from the Loan Agreement, the fledge Agreement, the Mortgage, the Construction Loan Agreement, the Guaranty, the Letter of Credit and the. Assignment of Rents and Leases, which revenues and proceeds are hereby specifically pledged to the payment thereof. in the manner and to the extent specified in the Note, the Loan Agreement, the Pledge Agreement, the Mortgage, the Construction Loan Agreement, the Guaranty, the Letter of Credit and the Assignment of Rents and Leases; and nothing in the Note or in, this Re olution shall be considered as assigning, pledging or otherwise encumbering any other funds or assets of the City. 3-2. .Performance of and Authority for Covenants.. The City covenants that it will faithfully perform at all Mimes any and all covenants, undertakings, stipulations and pro~~isions contained ir. this Resolution, i~z the Nate executed, authenticated and delivered 'Hereunder and in all proceedings of the City Council pertaining thereto; that it is duly authorized under the. Constitution and laws of the State of Minnesota including particularly and without limitation the Act, to issue the Note authorized-hereby, pledge the revenues and assign the Loan Agreement in the manner and to the extent set forth in this Resolution, the Note, the Loan Agreement and the Pledge. Agreement; that all action on its part for the issuance of the vote and for the execution and delivery thereof has been duly and effectively takzn; and that the Note in the hands of the Lender is and will be a valid and enforceable special limited. obligation of the City according to the terms thereof. 3-3. Enforcement and Performance of Covenants. The City agrees to enforce all covenants and obligations of the Borrower under the Loan Agreement and Construction Loan Agreement, and to perform all covenants and 19 other provisions pertaining to the City contained in the Ncte, the ~,oan Agr cement and ~~ the Cons tr uctior. Loan Agreement and subject to erection 3-Q 3-4. ~fature'',of Security. Notwithstanding anything contained in the Vote, the Mortgage, the Assigrsnent of Rents and Leases, the Loan Agreement, the Pledge agreement or any other document referred to in Section 2-4 to the contrary, under the provisions of the Act she Note may not be payable from or be a charge upon any funds of the City other than the revenues and proceeds pledged to the payment thereof,. nor shall the City be subject to any liability thereon, nor s'nall the Note otherwise contribute or give rise to a pecuniary liability of the City or, to the extent permitted by Iaw, any of the City's of~icers, employees and agents. No holder of the Note shall ever have the right to compel. any exercise of 'the taxing power of the City to pay the Nate or the interest t:i!ereon, or to enforce payment thereof against any property of the City other than the revenues pledged under the P1edg',e Agreement; and the vote shall not constitute a charge, li',en or encumbrance, legal or equitable, upon any property of th'e City; and the Note shall not constitute a debt of th'e City within the meaning of any constitutional or statutory limitation; but nothing in the Act impairs the rights of the Lender to enforce the covenants made for the securi*y thereof as provided in this Resolution, the moan t~grew*nent, the Pledge Agreement, the t~iortgage, the Assi~3nment of Rents and' Leases, the Ccnstr~action Loan Agre~.:nent, the Guaranty', the Letter of Credit and in ttie Act, and by authority of the', Act the City has made the covenants and agreements herein for the benefit of the Lender; provided that in any event, the agreement of the City to perform or enforce the covenants and other provisions contained in the Note, the Loan Agreement, the Pledge Agreement and the Construction Loan Agreement shall be subject at all times to the availability of revenues under t.~e Loan Agreement sufficient to pay all costs of such pert©rmance or the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon. 20 ARTICLE FOUR MISCELLANEOUS g-1. Severabiiity. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for .any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any ogler provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any Dart t:Hereof. 4-2. Authentication of Transcript. The officers of the City are directed to furnish to Bond Counsel cer~ified copies of this Resolution and all documents referred to 'Herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, cert~.rcates and affidavits, =.ncluding any :~eretofore furnished, shall constitute recitals of the City as tc the correctness of all statements contained therein. 4-3. Registration of Resolution. The City Mangzr is authorized and directed to cause a copy of this Resolution to be filed wish the County Auditor of Hennepin County, and to obtain from said County Auditor a certificate that the Note as a bond of the City has been duly entered upon his bond register. 4-4. Authorization to Execute Acrreements, The forms of the proposed Loan Agreement, the 'ledge Agreement and the Construction Loan Agreement, are hereby approved in substantially the form heretofore presented to the City Council,. together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be 21 necessary aZd appropriate and aparoved by 3ond Counsel prior to the^execu4ion o° the do~,cuments. 'The Mayor and City Manz er are aut:,criTed ~o exec~:te the Loan Agreement, '-he 2ledge Agreement grid he Cor.S trT;c tion Loan Agreement ? n the `name of and on behalf or" the Ci~y and such other documents as 3ond Counsel. consider aparopriate in, connection with the issuance of the vote. In the event of the absence or disability of the Mayor or the Manager such off~.cers of the City as, in the opinion of the City Attorney, may act in their behalf, sha11 without Further act or authorization of the City Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. ~,e execution of any instrument by the appropriate officer or officers of the City herein authorized shall 'oe cgnclusive evidence of the approval of such documents in accordance with the to ns 'Hereof . Adopted: April Attest: Syl a K. Bergh City 'erk 22