79-6038R. ra
19
RESOLUTION NO. 6038
RESOLUI^ION AUTHORIZING THE ,ISSUANCE AND SALE
OF A $ 2 , 550 , 000 COMMERCLAL D~VELOP~IE~IT REVENUE
NOTE OF 1979 (E`INANCIAL.PROPERTIES DEVELODERS,
INC. PROJECT - K MART LESSEE
BE IT RESOLVED by the City Council of the City of Richfield,..
Minnesota, as.follows:
ARTICLE ONE
DEFINITIONS, LEGAL AiJTHJRIZATION AND FINDINGS
1-l. Definitions.
The terms used herein, unless the context herecf shill
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 or
different meaning or intent.
(1) Act: the Minnesota ~4unicipal Industrial Development
Act, Minnesota Statutes, Chapter 474, as amended;
(2) Assignment of Rents: the agreement to be executed by
.the Company assigning the lease with the Tenant and the rents
derived therefrom to the Interim Lender;
(3) Assignment of Loan Agreement: the agreement to be
executed by the City and the Interim Lender assigning the Loan
Agreement to ..the .Interim .Lender;
(4) Bond Counsel: the firm of LeFevere, Lefler, Pearson,
O'Brien & Drawz, of Minneapolis, i~iinnesota, and any opinion of
Bond Counsel shall be a written opinion signed by such Counsel; _
(5) Buy-Sell ..Agreement: the agreement dated March 1, 1978,
between the City, Company, Interim Lender and Permanent Lender,
relating to the. long term financing of the Project;
(6) Citv: the City of Richfield, Minnesota, its successors
and assigns;
(7) Comoanv: Financial Properties Developers, Inc., a -
Georga corporation, its successors and assigns, and. any
surviving, resulting. or transferee business entity which may
assume its obligations .under. the Loan Agreement;.
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(8) Construction Loan.Agreer,ent: an agreement, dated March
1, 1979, between the City,', Company and Interim Lender, relating
to construction of the Improvements and payment of the Project
Costs;
(9) Guaranty: the agreement by Company, dated. March 1,
1979, guaranteeing payment', of the Note.
(10) Improvements: the structures and other improvements
to be constructed by the Company on the Land in accordance with....
the Plans. and Specifications;
(11) Interim'Lender:, The Fulton National Bank of Atlanta,
in Atlanta, Georgia, its successors and assigns;
(12) Land: the real, estate described in Exhibit A to the.
Loan agreement;
(13) Lender: prior to assignment of file Note to the
Permanent Lender, the Interim Lender;. subsequent to such;
assignment,. the Permanent Lender;
(14) Loan Agreement:', the. agr~emeizt dated as of ilarcn 1, ,
1.979 to be executed by oan',F.greement; - _
(15) Mortgage: the !~rlortgage and Security Agreement, dated
as of March 1, 1979 agreement to be: executed. between the Company
as mortgagor, and the Intetrm Lender as mortgagee, mortgaging the
Project to securepayment'oi the Note and interest thereon;
(lo) Note: the Commercial Development Revenue Note_of_1979
(Financial Properties Developers, Inc. Project. - K mart Les ee )
to be issued by the City pursuant to this P.esolution to nrovic~e
required construction fund' ;
(17) Note Reg inter:' the records kept. by the City
Clerk-Treasurer to provide for the registration of transfer of
ownership of the Note;
(18) Permanent Lender: Th`e Farmers and Mechanics Savings
Bank of Minneapolis, in Minneapolis, Minnesota, its successors
'and. assigns;
(19) Plans and Specifications: the plans and
specifications for the construction and installation of the
Improvements on the Land, ',which are approved by the Interim .and
Permanent Lenders, together with such modifications thereof and
additions thereto which are reasonably determined by' the Company
to be necessary or desirable for the completion of the
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ImpLovements and are apbroved by t~ze.Interim and Permanent
Lenders;
(20) Principal Balance: so much of the principal sum on
the Note as from time to time may have been advanced to or for
the benefit of the City-and remains unpaid;
(21) Project: the Land. and Improvements as they may at any
time. exist;
(22) Resolution: -this Resolution of the City adopted-
February 12, 1579 pursuant to which the Note is authorized to be
issued, together with any sunt~lement or amendaent thereto; acid
.all references in thin.instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles,
Sections. and subdivisions of this. instrument as originally
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executed. The words herein hereof and hereunder and other..
words of similar import .refer. to this Resolution as a ~,~'nole not
to any'particular.Article,..Section orsubdivision;
{23} Tenant: K mart Corporation, a r,?ichigan corporation,
its successors and assigns.
(24) City Manager:.-the duly appointed and acting :na.nager
of the City', including any person appointed by the council
pursuant to Section ~.Ol of the City Charter to serve in such
capacity during- a vacancy in the office of City ~•Ianager.
1-2. Legal Authorization.
The City is apolitical subdivision of the State of
Minnesota and is authorized under the Act to initiate the revenue
producing pT:oject herein refer:red to, and to issue and sell. bonds
in the form of the .Note for: the pur.-pose, in the manner and upon
the terms and conditions set foi:th in the Act and in this
Resolution.
1-3. Findings. _
.The City Council has heretofore determined, 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 necessai:y arrangements with the
Company for the establishment within the City of_ a Project
-consisting of certain pzoper.ty all as moire fully described in the
Loan Agi:eernent with the Company ;which c•rill be of the char-aster
and accomplish the purposes or.ovided by the pct;
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(3) in authorizing the Project, the Gty's purpdse. is, and
in its. judgment. the effect,thet:eof ~,v~.l be, to pronote the publis
welfare by: fihe -attiact~iori, encouragement and develo~?ment of:
economically sound industry and com:~erce so as to prevent, so far:
as possible, the emergence'of blighted and marginal lands and
areas of chronic unemployment and to aid in the redevelop:~ent or
areas of existing blight, ?nai:ginal land and persistent.
une;riploym~ent; the development o~ revenue-producing enterprises to
use the available resources of the community, in order to retain
-the benefit of the com~un~ity's existing :investment in educational
and public service facilities; halting the movenent of talented,
educated per:sonnet of mature age to other areas and thus
pzeserving the econo;nic and human resources needed as a base for
providing governmental serviczs and facilities; the provision of
accessible emD_loyment oppoz:tumities for- residents. in the area;
the expansion of an adequate tax base to finance the increase -in
the amount and cost of governmental services, including
educational se2:vices for the school district serving the:
community in whirir the' Pa:o~ect is itu~ted;
(4) the amount. estimated to be necessary o finance he
Project Costs, including the costs and estimated costs permitted
by Section 474.Q5 of the Act ,. will reauir.e the issuance of the
~Fote in the ;?r.incipal amount of $2,550,000 as hereinafter
provided;.
(5) it is desirable,'feasi~le and consistent with the.
objects and purposes of the Act to issue the Dote for. the purpose'
of financing: the Impz-ovements to the Project;
(6) the Note and the interest accruing thereon do .not
constitute an indebtedness 'of the City within the meaning of any
constitutional charter or statutory limitation and do not
constitute or give rise to<<a pecuniary liability or a ckrarge
against the general credit or taxing powers of the City and
neither-the full faith and ';credit nor-the. taxing powers of the.
City is pledged for the payment of the Note or interest thereon;. and
(7} the Note is an industrial development band within the
meaning of Section 103(b) of the Internal Revenue Code and is to -
be issued within the exempltion provided under subpar:agranh (~) of
Section lU3(b)(o} of the Code with ~:espect to an issue of
$1.0',.000,000 oz less; provided that nothing herein shall nr;event
•the City from hereafter qu,al ify ing .this Note undei: a different
exemption if, and to the extent, such exemption is permitted by
law and consistentwith th'e objects and nur:poses of the Project;
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~ 1-4. Authorization and Ratification of Pi: ofect.
The City has her.etofor.e, and does _hereby authoz:~ize the
Company, in accordance with the provisions of section 474.03(6}
of tYie Act and subject to the tee:ms and conditions set forth in
the Construction Loan Agreement, to provide for the construction
and installation of the Improvements included in the Pz:oject
under the Plans and S~ecif'icatons by such means ~s shall be
available to the Co~nr~any and in the manner` determined by the
Company, and .without advertisement for: bids as may be; required
for` the construction and acq~.~sition of .any other:' municipal
facilities; and the City hei:eby i:atifies, affirms, and approves
all actions her.etofor.e taken by the Co;npany consistent with and
in anticipation of such authority and. in compliance with the
Plans and_Bpecifications.
'ARTICLE TY1O
- NOTE
2-1. Authorized Amount and For: of Note.
The Note issued pursuant to this P.esolu ien shall be in
substantially the form set foxth herein,. with such appropriate.
variations, omissions and insertions as are permitted or required
by this Resolution, and in' accordance ~~rith the further provisions
of thin Article; and. the total principal amount of_ the Note that
i may be outstanding hereunder is expressly limited to ~2,550,0OG
unless a duplicate Nate is issued.pursuant to Section 2-7. The
Note shall. be in substantially the following form;
(Intentiona'lly Left Blank)-
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(Specimen).
U~tITED STATES OF A.i~IERIC?~
STATE OF MLiv~'ESOTA
COU~1I'Y OF HENNEPIN
CITY OF RICHFIELD
Commercial Develo?~;nent Revenue Note of_1979
(Financial Properties Developers, Inc. Project - K mart Lessee,)
$2,550,000
FOR VALUE RECEIVED, the City of Richfield, 3linnesota
(hereinafter referxed to as "City°), promises to pay to THE
FULTON NATIONAL 3.~~TK OF• ATLANTA (hereinafter referred to as
"Fulton"), or registered assigns, at the main office of Fulton in
Atlanta,. Georgia, or at such other place as Fulton shall
designa'ce in writing but solely from the revenues derived from a
Loan agreement, a copy of which is attached hereto as Exhibit "A"
and by this reference incorporated herein, of even date here~~ith
(hereinafter referred to ash"Loan Agreement"), between City and
Financial Properties Developers, Inc. (hereinafter referred to as
"Company"), the principal sum of Two Million Five Hundred Fifty
Thousand Dollars ($2,550,000) or so much thereof as may be
advanced for he benefit of the City, with interest thereon, as
follows:
From and after the date hereof, interest only at
the-rate of three quarters (3/4) of Fulton's
"Prime Rate", as hereinafter defined, on the
unpaid principal balance shall be payable monthly
on that portion of the principal sum from time to
time advanced for the benefit of City pursuant to -
a Construction Loan Agreement between Fulton, City
and. Company of even date her`with (the
"Construction Zoan Agremeent"), .Interest payments
shall commence on the first day of the calendar
month next succeeding the. date on which the first
such advance is made and shall continue on the
first day of each succeeding month thereafter
until the entire indebtedness evidenced hereby is
paid in full, provided, that if the interest on
this rfote should become subject to federal inco;ne
taxation pursuant to receipt by Fulton of a
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"Determination of Taxability", as that term is
defined in Section x.09 of the Loan Agreement, or
.subject to income taxation by the State of
.Minnesota,. the interest mate. shall be immediately
increased to two percent (2o)-per annum. above said-
"Prime Rate" as hereinafter defined, and City
shall further reimburse Fulton, but solely from
the revenues derived .from the Loan. Agreement, for
the aggregate difference between (i) the monthly
payments. actually made on this Note from either
(a} the "Date of ',Taxability" as that term is
defined in the Loan Agreement (in the event
interest on .this Note has become subject to
federal income taxation), or, (b) from the date
the interest becar~~e subject to income taxation. by
the State of yIinnesota, as the: case may be, and
(ii) the monthlyipayments-which would have been..
made during such r~eriod had the interest on this
..Note been at the rate of two percent (2%) above
said "Prime Rate". Principal and. all accrued
interest. unpaid shall be due and payable
`, 19.79, or at such later date as
.may be agreed to'in writing by Fulton and The
Farmers and Mechanics Savings. Bank of uinneapolis,-
its successors and assigns, hereinafter sometimes
referred to as "Farmers. and ~~echanics";
.Provided, however ,.. that. if Farmers and
Mechanics shall purchase this.. Note-and .other
instruments no~rr or hereafter evidencing and
securing the indebtedness evidenced hereby as
contemplated by that .certain Buy-Sell -Agreement of
evendate herewith. among City, Fulton, Company and
Farmers and Mechanics, then instead of paying
interest and principal as aforesaid, City-shall,
on the date of such purchase, pay to Fulton all
interest then due and accrued hereunder, and
thereafter shall',pa_y to Farmers and Mechanics, but -
solely from the revenues derived from the Lean
Agreement, the principal,; together with interest
computed on the .basis of a 360 day year. on the
unpaid principal balance at the rate of seven and
three eighths (7 3/80) per annum, in equal,
consecutive monthly installments of $17,017 each,.
commencing the first .day of the second month next
succeeding the month in which this Ncte is
purchased from Fulton by Farmers and Mechanics as
contemplated by said Buy-S'ell Agreement; and
continuing on the first day of each month
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thereafter through 2010.., with the
.principal balance and any accrued interest
_ thereon, unless sooner paid, being due and payable.
on ,2010 Each such. amortized
installment of principal and interest, when paid,
shall be appliedfirst to the payment of interest
accrued on the unpaid principal balance and the
residue thereof shall. be applied toward the
payment of principal; provided that if the
interest on this. Note should become'subject to
federal income taxation pursuant to receipt by
Farmers and ~~Iechanics of a-"Determination of
Taxability" as that term is defined in Section
4.09 of the Loan Agreement or subject to taxation
by the State of ?~nnesota at any time from: and
after the dateths Note is purchased by Farmers
and Mechanics, the interest rate shall be
immediately increased to nine and one quarter
percent (9 1/4%) per annum,. and City shall
forthwith pay to r^arme_rs and i~iechanics, but solely
from the revenues derived from the Loan Agreement,
an amount equal to the aggregate difference
between (i) the monthly payments actually made ta.
Farmers and Mechanics on this Mote from either (a)
.the.".Date of Taxability." as that term is defined
in the Loan agreement (in the event interest on
this Note has become subject to federal income
taxation) or, (b) from the date the interest
became subject to income taxation by the State of
Minnesota, as the case may be, and (ii) the
monthly vayments which would. have been made duri:~g
such period had the interest on this Note been at
the rate of nine and one quarter. (9 1/4%), and the
.consecutive monthly installments shall be
increased to amortize the remaining principal
balance by the final maturity date at such
increased rate.
Purpose of Note: This ~1ote is issued by the .City to
provide funds _for a Project, as defined in ~Sinnesota
Statutes, Section 474.02 (la), consisting of the acquisition
of certain realty and the acquisition, construction and
installation of a department store on said realty. This
Note is further issued pursuant to and in full compliance
with the Constitution and laws of the State of Minnesota,
particularly Chapter 474, i~iinnesota Statutes, and the. home.
rule charter of the. City, and pursuant to resolution of the
City Council duly adopted cn February 12, l~'19, hereinafter
referred to as the "Resolution".
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hereinafter. referred to.
The term "loan: year" as usEd herein shall mean a twelve
(12) month period commencing with the first .day of the first
calendar month next succeeding the calendar month in-which
-.this .Note is purchased from Payee by Farmers and Mechanics
or any anniversary thereof,
Section. 1.15 of the r~iortgage"and Security Agreement
Transfer to Permanent~ILender: Fulton and City
contemplate that this Note'',wi11 be purchased from Fulton by
Farmers and Pechanics on or before April 30, 1979,
pursuant to said Buy-Sell Agreement. Notwithstanding any
provision herein to the contrary, in the event this Note is
not purchased from Fulton by Farmers and Mechanics on or
before April 30, 1979., or such later. date as may be
.agreed upon in writing by Fulton and Farmers and Mechanics,
then on said date the balance of Arincipal then remaining
unpaid hereunder and any accrued interest shall be
immediately due and payable.
Prepayment Privilege:'' At any time during the .first. ten
"loan-years", as hereinafter defined, immediately following
the purchase of this Note from Fulton by Farmers and
Mechanics, .this Note may be prepaid in full or in part on
the first calendar day of any month upon thirty days prior
written notice to Farmers and Mechanics and payment to
Farmers. and NIechanics of a,premium equal to five (moo)
percent of the principal mount so prepaid. At any time
during and after the eleventh "loan year" this Note ma.y be
prepaid in full or in part 'on the first calendar day of any
month upon thirty days prior written notice to Farmers and
Mechanics and payment to Farmers and Mechanics of a prerniu
equal to three (3%) percent of the principal amount so
prepaid. This Note is further subject to prepayment,
without a premium, in wholei or in part, upon the occurrence.
of certain events as specified in Section 1.12 and/or
Collateral.. Thzs Note is secured spy, among other ~-
instru~r~ents, (i) a Mortgage and Security Agreement dated
March 1, 1979, executed by (Company and relating to certain
property lying and being in Hennepin County, Richfield,
.Minnesota, as the same is more particularly described in
said Iviortgage and Security Agreement,-(ii) a certain -
Assignment of Rents .dated March 1, 1979, and executed by
Company which assigns to Fulton Coiapany' s interest in
certain lAases and. rents and profits as described therein,-
and (iii) the Loan Agreemerrtt which has been assigned by City
to Fulton..
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Default: If City fails to pay when du e: .any amount.
payable hereunder or in_tha event of a default under the
terms of said Mortgage and ecurity Agreement securing this
Note., then, at the option of Fulton and without demand or
further notice of a.ny kind, the total unpaid principal
balance hereof, together with accrued interest, shall become
immediately due and: payable;
Provided, however,. that from and after the date. on
which Farmers and P~Iechanics-purchases this Note, and only in
such event, if City defaults by failing to pay when due any
amount payable hereunder or if a: default shall have occurred
under the Mortgage and Security Agreement and if either of
said defaults be continuing forea period of ten {IO)
calendar days from the date of occurrence of such default,
then the total unpaid principal balance hereof, together
with accrued interest, shall, at the option of Farmers and
Mechanics, become immediately due and payable..-
Limitation of City's Liability: This. Note and interest
thereon and. any-penalty or premium due hereunder do not:
constitute-a debt of City within the meaning of any
constitutional, charter or statutory limitation, are not
payable from or a charge upon any funds of City. other thane
the. revenues derived from said Loan Agreement, and do not
give. rise to a pecuniary liability of City or, to the extent
permitted by law, any of its. officers, agents or employees;.
and na holder of this Note shall ever have the right to
compel anv exercise of the taxing power of the City to pay
this Note or the interest or any penalty thereon, or to
enforce payment thereof against any property of City; and
this Note does not constitute a charge, lien or encumbrance,
legal or equitable, upon any property of City; and the
agreement of 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
said Loan Agreement, sufficient to pay all costs of such
performance or the enforcement thereof; provided, however.,
that nothing contained herein shall limit or be construed to
limit or impair the. rights and remedies of the holder of
.this Note against the real property covered by the aforesaid
Mortgage and security Agreement, the rents, issues, income
and profits from said real property and such other security
given to insure the payTnent of this Note; and, provided
further, however, that Company shall be liable on any and
all warranties and representation of title contained in the
aforesaid mortgage and security Agreement and any other
security documents given to secure the payment of this Note.
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'Waiver: Gity hereby ;wives demand, presentment,
dishonor, protest and notice of dishonor or protest and
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expressly agrees thatthis'Note and any payment coming due
hereunder may be extended from time to time without in any
manner affecting the invited liability of the City.
Forbearance: Payee s'nall not be deemed to waive any of
its. rights. under this Note unless such waiver be in writing
-and signed by Payee, and no delay or omission by.Payee in
exercising any of its rights shall overate as a waiver of
such rights. A waiver of any right in writing on one
occasion shall not be construed as a consent to or a waiver
of any other right or remedy then or thereafter existing.
Terms:
Payee: The word "Payee" 'as used herein shall
include r^ulton and Farmers and.~4echancs (in the event
that Farmers and P~echanics purchases this Note} and-the-
transferees and assignees of Payee, as registered by
City, and all rights of Payee shall inure to t_'ne
benefit of the .successor s. and assigns of Payee.
Prime. Pate: As used herein, the term "Prime:Rate"
shall mean the rate of interest from time to time
charged by Fulton to its commercial borrowers with the
highest credit standing for unsecured loans with
maximummaturitie of '.not more than ninety (90) days
from the date of each ,advance. Such rate which is in
effect as of the close of business on each. business day
shall be the effective applicable rateforthat day: and
for any succeeding. nori-business days. In the event
such rate is discontinued as a standard or becomes
unascertainable, Fulton-shall designate a comparable
rate as a substitute therefor:
This.Note is transferable, as provided in the Note
Resolution, only upon the note register of the City
Clerk-Treasurer, as note registrar, by the owner hereof in
person or by his duly authorized attorney, as provided in
the Note Resolution...
Under paragraph 11 of. the Tote Resolution a substitute
Note may be issued in a principal sum equal to the...
outstanding and unpaid balance of advances on account of the
authorized principal sum of this Note, in certain cases,
with an adjusted schedule of installment payments thereafter
to be made hereon., subjectlto approval of the Holder hereof
and the Company. In case this Note shall become mutilated;
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lost or destroyed, a substitute Note may be issued in the
manner and subject to the conc;itions provided in the Note
Resol-ution .
IT IS HEREBX CERTIFIED'AND RECITED that all conditions,
acts and things required to exist, happen and be performed
.precedent to or in the issuance of this.Not~ do exs have
happened and have been x~er€or:~ed 3n regular and due =orm as
required by law. ~-
IN 6~lITNESS W$EREOF, City has caused this Note to be
duly executed in its nave by the manual signatures..of the
Mayor and City Manager and has caused the corporate seal to
be affixed hereto; and has caused this Note to be dated
1979.
CITY OF RLCHFIELD
B y_ ____
<< Its idayor
By
Its City T~ianager
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~~ (Form of Transfer)
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For value received, the .undersigned owner does .hereby. assign.
and transfer the foregoing Note to the. named Assignee, and the
undersigned City Clerk-Treasurer of the City of Richfield as note
registrar .hereby certifies that the foregoing Bond has. been
transferred and registered on the note register in the name of
such Assignee,
Date of
Name of Signature of Signature of Transfer on
Assignee Qwner City Clerk-Treasurer Bond Register
,;..
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2-2. The Note.
-The Note shall be: payable at the times and in the manner,
shall bear interest at the rate or rates, and shall be subject to
such other terms and conditions as are set forth therein.
2-3. Execution.
The Plote shall be executed on behalf of the City by the
manual signatures of its i~!ayor and City Manager and shall be
sealed with the seal of the City., In case any officer whose
signature shall appear on 'the ?~Lote shall cease to b~ such officer
before the delivery of the yotesuch signature shall
never heless be valid and sufficientfor all purposes, the s~~e
as if he had remained in office utrtil delivery.
2-4. Delivery of Dlote.
Before del-ivery of the Note there shall. be filed -with the
City Clerk the .following iter~is
(1) (A) an executed. copy of the Loan Agreement and the
Assignment of Loan Agreement;
(B) an executed copy of the "fIortgage;
(C) an executed copy of the Construction Loan
Agreement;
(D) an executed copy of the Assignment of Rents;
(E) an executed copy of the Guaranty executed by .the
Company;
(F) an executed copy. of the Buy-Sell Agreement; and
(G )_ an executed copy of the Long Term Commitment;
(2) a mortgagee's title insurance commitment written by a
title insurance, company authorized. to do business in Minnesota
showing that title in fee simple to the Land is in the Company
subject only to such exceptions as are approved in writing by the
Interim and Permanent Lenders.
(3) an opinion of Counsel for the Company in scope and
substance reasonably satisfactory to Bond Counsel as to the
authority of the Company to enter into the Loan Agreement,
~~Iortgage, Construction Loan Agreement, the Buy-Sell Agreement,
and the Assignment of Rents and as to certain other matters;
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(4) the manually signed opinion of Bond Counsel approving
the legality of the: Note issued pursuant to this Resolution;
(5) such other documents and opinions as Bond Counsel. may
reasonably require for purposes of rendering its opinion required
in subsection. (4) above.
Jpon delivery of the Note, the Interim Lender shall, on
behalf of the City, advance funds for payment of Project Costs
upon receipt of such supporting documentation as the Interim
Lender may deem reasonably,necess~ry, including compliance with-
the provisions of the Construction Loan Agreement. The Interim
Lender or the Company shall. provide the: City .with a full
accounting of all funds disbursed for Project Costs.'
2-5. Intentionally. Omitted`.
2-b. Re istratian of Transfer.
The City will cause to be kept at the office of the
City Clerk-Treasurer a Note register in which, subject to such
reasonable regulations as it may prescribe, the Gity shall
provide for the registration of transfers of ownership of the
Note. The Note shall be transferable upon the Note Register by
the holder thereof in person or b_v its attorney duly authorized
in writing, upon surrender'of the Note together with a writteiz
instrument of transfer satisfactory to the City Clerk-Treasurer.
and the city attorney, duly executed by the holder or its duly
authorized attorney.- Upon'such transfer. the City Clerk-Treasurer
shall note the date of regstratonand the name and address of
the new holder in the Note',P.egister.
Z-7. Mutilated „ Lost or Destroyed Note.
In case the Piote'issuedhereunder shall become"
mutilated or be destroyed or lost, the City shall, if not then
prohibited by law,. cause to be executed and delivered, a nzw Note
of like outstanding principal-amount and tenor in exchange and
substitution for and upon cancellation of such mutilated Note, or
in lieu of and in substitution: for such Note aestroyed or Lost,
upon the holder`s paying the reasonable expenses and charges of
'the City in connection therewith, the filing with the City of
evidence satisfactory to the City that such Note was destroyed. or
lost, and the furnishing of the City'wit_h indemnity satis~actory
to it. If the mutilated, destroyed or`lost Note 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.
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2-8. , Os~nershin of Note.
The City may deem and treat the person in w'nose name
the Note was last registered in the Note Register, as the
absolute owner of such Note for the ?purpose of receiving payment
of the Principal Ealance, redemption premium or interest and for
all other pureoses whatsoever,_and the Citg shall not be affected
by any notice to the contrary.
2-~. Limitation on .Note Transfers.
The'Note has been issued ;without registration under
state or other securities laces, pursuan to an- exemption `for such
issuance;.and..accordinglythe ~Iotz ?nay not be assigned or
transferred-in whole or in part, nor may a participation interzst
in the Note be given pursuant 'to any participation agreement,
except in accordance with apnli-cable registration requirements or
.upon. receipt of a written ox~inion of Bond Counsel that an
exemption exists for such transfer.
i
ARTZGLE 1~REF_ ~
P.EDEMPTI01v OF MOTE EEFORE MATURITY
3-1. Redemption.
(1) In the event of (a) damage to the Project or
condemnation of the Project or any part thereof and. (h)
acceleration ofthe.Notepursuant to the terms of the Note
and Mortgage, the ~Iote sh-all be subject to prepayment to the
extent and in the manner set forth in Sect-ion 5.02 of the Loan
Agreement and the ~Iote.
(2) The Note may other vise b2 prepaid in accordance with
the provisions of the Note.
3-2. Terminatcn of Interest.
Upon deposit of the'redemntion price with the Lender
and the giving of any notice required by law, the principal
amounts prepaid shall, after such date, cease to bear interest..
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ARTICLE FOUR
_ GENERAL COVENA?~15
4-1. Payment of Principal and Interest.
The City cavenants that it will promptly pay or cause o
be paid the principal of and interest on the-Mote at the place,
on the dates and in the manner provided herein and in said P3ote.
The principal and interest on the Note are payable by the City
solely from revenues and proceeds derived from the Loan Agreement
covering the Project and nothing in the Note or in this
:Resolution shall be considered as assigning, pledging or
otherwise encumbering any other funds or assets of the City.
4-2. Performance of and Authority for Covenants.
`lhe City covenants that it will faithfully perform at
all times any and all covenants, undertakings, stipulations and
provisions contained in this Resolution, in the Note executed,
authenticated and delivered hereunder and in all proceedings of
.the City Council pertaining thereto; that it is duly authorized
under the Constitution, its City Charter, and. the lat~~s of the
State of Minnesota including particularly, but without
limitation,. the Act, to issue .the ~?ote authorized hereby, pledge
the revenues and assign the Loan Agreement in the manner and to
the extent set forth in this Resolution., the A]ote, the Loan
Agreement and the Assignment of Loan Agreement and Consent; that
all action on its part for the issuance of the Note. and for the
execution and delivery thereof has been .duly and effectively
taken; and that the Note in the hands of the holder thereof is
and will be a valid and. enforceable obligation of the City
according to ..the terms thereof .
4-3. Enforcement and Performance of Covenants.
The City agrees to enforce all covenants and
obligations of the Company under-the Loan Agreement and to
perform alI its covenants and other provisions contained in the
Note and the Loan Agreement.
4-4. Nature-of Security.
Notwithstanding anything contained in the Note,
r~iortgage, Loan Agreement or any other document referred to in
Section 2-4 to the contrary, under the provisions of the Act the
Note may not be .payable from or be a charge upon any funds of the
City other than the revenues pledged to the payment thereof, nor
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shall the City be subjectlto any,liahility thereon, nor shall the
.Note otherwise contribute or give rise to a pecuniary liability
of the City or, to th extent permitted by law, any of the City's
officers, employees and aa'ents. No holder of the Note shall ever
have the' right to compel a',ny exercise of the taxing, po~,~er of the
City to pay the Note or th',e interest thereon, or to enforce
payment thereof against any property of the-City; and the Note
.shall. note constitute a charge, lien-or encumbrance, legal or
equitable, upon any property of the City; and the Note shall not
constitute a debt of the C''ity ~~ithn themeanina of any
constitutional or statutory limitation. By Authority of the _Act
the City has made the covenants and agreements herein for the
benefit. of the holder of the Note; provided' that in any event,.
the agreement of the City to perform the covenants and other
provisions contained in the Note, the Loan Agreement, ~3uy-Sell
Agreement end the Construction Loan Agreement shall be subject at
all times to the availability of revenues under 'the Loan
Agreement sufficient to pay all costs of such performance or the
enforcement thereof, and neither the City nar any of its
officers, agents or emnloy~es shall be subject to any personal or
pecuniary liability thereon.
._ ,
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ARTICLE FIVE.
MISCELLA'dECUS
5-l. SeverabiLity.
If any provision of this Pesolution 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 or 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 of circums'tancz, az of rendering an_y other 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 rei~aininq portions af.
this Resolution or any part thereof.
5-2. Authentication of Transcript.
The of €cers of- the City are directed tofurnish to
Bond Counsel certified copies of this Resolution and all
documents referred to herein, and affidavits or certificates as
to all other Matters cvnich are reasonably necessary to evidence
the validity of the Note. All such certified copies,-
certificates and affidavits, including any heretofore furnished,.
shall constitute recitals of the City as to the correctness of
all statements contained therein.
5-3. Registration of Resolution.
The City Clerk.-Treasurer is authorized and directed to
cause a copy of .this Resolution to be filed ~~lith the County
Auditor of ~iennepin County, and to obtain a certificate that the -
Note as a bond of_ the City has been duly entered upon the bond
register as required b_y P~iinnesota Statutes, Sect ion 475.53.
. 5-4. Authorization to E:cecute Agreemecits.
The proposed forms of the Loan Agreement, Construction
Loan Agreement, I3uy-Sell Agreement and Assignment of Loan
Agreement are hereby approveca in substantially the form submitted
herewith to the City Council and on file c~~ith the Clerk-Treasurer
subject to such changes thereto as are aUproved by Bond Counsel;
and the i~iayor and City i9anager are authorized o execute the same-
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';
in the name and on behalf ofI'the.City and. to execute such other
documents as Bond Counssi considers appropriate in connection
with the issuance of the. Note. In the event of the. absence or
disability of the :Mayor or City Manager, such officers of the
City as,-in the opinion of the. City.-Attorney.,. may act in their-
behalf, shall without further act or authorization of the City
Council do all things acid execute all instruments and documents
required to be done or executed by such.aY~sent or disabled
officials.
Passed by the City Council of the City of Richfield., Minnesota,
this 12th day of February, 1~7~:
oren L . La - r"ayor
ATTEST:
Thomas J Moran City Clerk