Loading...
HomeMy WebLinkAbout84-218 - ADMIN Resolution - City Council - 1984/12/17(SEE ALSO RES. 84-225) RESOLUTION 84-218 FINAL NOTE RESOLUTION SHEEHAN CORPORATE CENTER PARTNERSHIP PROJECT COMMERCIAL D1:VELOPM1:1gT BONDS $2,779,150 BE IT RESOLVED by the City Council of the City of St. Louis Park, Minnesota, as follows: ARTICLE ONE DEFINITIONS, LEGAL AUTHORIZATION AND FINDINGS 1-1. 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 or different meaning or intent. Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; Bond Counsel: the firm of Briggs and Morgan, Professional Association, of St. Paul and Minneapolis, Minnesota, and any opinion of Bond Counsel shall be a written opinion signed by such Counsel; Borrower: Sheehan Corporate Center Partnership, a Minnesota general partnership comprised of Frantz Klodt & Son, Inc., a Minnesota corporation, Commers Enterprises, a Minnesota general partnership comprised of Clement J. Commers, Frederick H. Commers, Daniel P. Commers and Joseph E. Commers, and Mark R. Sheehan, its successors and assigns, and any transferee business entity which may assume its obligations under the Loan Agreement; City: the City of St. Louis Park, Minnesota, its successors and assigns; Construction Fund: the fund established by the City pursuant to this Resolution and the Construction Loan Agreement into which the proceeds of the Note will be deposited; Construction Loan Agreement: the agreement to be executed by the City, the Borrower and the Lender, relating to the disbursement and payment of Project Costs out of the Construction Fund for the acquisition of the Land and the construction and installation of the Improvements; Guarantors: Frantz Klodt & Son, Inc., a Minnesota Corporation, Commers Enterprises, a Minnesota general partnership, Clement J. Commers, Frederick H. Commers, Daniel P. Commers, Joseph E. Commers, Paul Klodt, and Mark R. Sheehan, jointly and severally; Guaranty: the Guaranty executed by the Guarantors whereby the Guarantors guaranty payment of, among other things, the principal of and interest on the Note; Improvements: the structures and other improvements, including any tangible personal property, to be constructed or installed by the Borrower on the Land in accordance with the Plans and Specifications; Land: the real property and any other easements and rights described in Exhibit A attached to the Loan Agreement; Lender: The First National Bank of Saint Paul, a national banking association, its successors and assigns; Loan Agreement: the agreement to be executed by the City and the Borrower, providing for the issuance of the Note and the loan of the proceeds thereof to the Borrower, including any amendments or supplements thereto made in accordance with its provisions; Mortgage: the Mortgage, Security Agreement and Fixture Financing Statement to be executed by the Borrower, as mortgagor, to the Lender, as mortgagee, securing payment of the it Note and interest thereon; Note: the $2,799,150 Commercial Development Revenue Note of 1984 Tsheehan Corporate Center Partnership Project), to be issued by the City pursuant to this Resolution and the Loan Agreement; Note Register: the records kept by the Note Registrar; Note Registrar: The First National Bank of Saint Paul, a national banking association, Saint Paul, Minnesota, its successors and assigns; Plans and Specifications: the plans and specifications for the construction and installation of the Improvements on the Land, which are approved by the Lender, together with such modifications thereof and additions thereto as are reasonably determined by the Borrower to be necessary or desirable for the completion of the Improvements and which are approved by the Lender; Pledge Agreement: the agreement to be executed by the City and the Lender pledging and assigning the Loan Agreement to the Lender; 6 Principal Balance: so much of the principal sum on the Note as remains unpaid at any time; Project: the Land and Improvements as they may at any time exist; Project Costs: 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 adopted December 17, 1984, 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 subdivision of 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 Note 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 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 necessary arrangements with the Borrower for the establishment within the City of a Project consisting of certain property all as more fully described in the Loan Agreement and which will be of the character and accomplish the purposes provided by the Act, and the City has by this Resolution authorized the Project and execution of the Loan Agreement, the Pledge Agreement, the Note and the Construction Loan Agreement, which documents specify the terms and conditions of the acquisition and financing of the Improvements to be included in the Project; (3) in authorizing the Project the City's purpose is, and in its judgment the effect thereof will be, to promote the public welfare by: the attraction, encouragement and development of economically sound industry and commerce so as 3 to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment; the develop- ment of revenue-producing enterprises to use the available resources of the community, in order to retain the benefit of the community's existing investment 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 human resources needed as a base for providing governmental services and facilities; the provision of acces- sible employment opportunities for residents in the area; the expansion 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) based only upon each representations as have been made by The Borrower to the City, the amount estimated to be necessary to partially finance the Project Costs, including the costs and estimated costs permitted by Section 474.05 of the Act, will require the issuance of the Note in the principal amount of $2,799,150 as hereinafter provided; (5) it is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of partially financing the Improvements to be included in the Project and the Borrower has advised the City that the Project would not be undertaken but for the availability of this financing; 41 (6) the Note and the,interest accruing thereon do not constitute an indebtedness of the 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 powers of the City is pledged for the payment of the Note or interest thereon; and (7) No elected official of the City, the City Clerk or the City Manager has either a direct or indirect financial interest in any of the persons, projects or entities listed on the attached Exhibit A, nor will any elected official of the City, the City Clerk or the City Manager either directly or indirectly benefit financially from the Project within the meaning of Minnesota Statutes, Sections 412.311 and 471.87. 1-4. Authorization and Ratification of Project. The 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 terms and conditions set forth in the Construction Loan Agreement, to provide for the construction and installation of the Improvements to be 4 r i included in the Project pursuant to the Plans and Speci- fications 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 required for the construction and acquisition of municipal facilities; 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. 5 ARTICLE TWO NOTE 2-1. Authorized Amount and Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form set forth herein, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions hereof; and the total principal amount of the Note that may be outstanding hereunder is expressly limited to $2,799,150 unless a duplicate Note is issued pursuant to Section 2-7. The Note shall be in substantially the following form: M UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF ST. LOUIS PARK Commercial Development Revenue Note of 1984 (Sheehan Corporate Center Partnership Project) $2,799,150 FOR VALUE RECEIVED the CITY OF ST. LOUIS PARK, Hennepin County, Minnesota (the "City") hereby promises to pay The First National Bank of Saint Paul, a national banking association, in Saint Paul, Minnesota, its successors or registered assigns (the "Lender"), from the source and in the manner hereinafter provided, the principal sum of TWO MILLION SEVEN HUNDRED NINETY NINE THOUSAND ONE HUNDRED FIFTY DOLLARS ($2,799,150), or so much thereof as may be advanced from time to time and remains unpaid (the "Principal Balance"), together with interest on said principal sum at the rates and at the times hereinafter described in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America, in accordance with the terms hereinafter set forth. 1. The principal of and interest on this Note shall accrue and be payable as follows: (a) Interest. (i) On the earlier of the following dates (i) February 1, 1985, or (ii) the date that the first disbursement of proceeds of this Note is made from the Construction Fund (as defined and provided in the hereinafter defined Construction Loan Agreement), as and for additional interest for the period from the date hereof through December 31, 1985, the sum of $55,983. (ii) Commencing on the date hereof and con- tinuing thereafter until the Principal Balance is paid in full, interest shall accrue on the Principal Balance at the rate of % per annum (Said rate shall be set and determined by the Lender prior to the execution and delivery of this Note, provided that such rate shall not be less than 9% nor more than 13%, and further provided that said rate is acknowledged and ratified by the Mayor Pro Tem and City Clerk, or the City Council prior to such execution and delivery.) (b) Payments. 7 (i) Commencing on the first day of the month following the delivery of this Note and continuing on the first day of every month thereafter through and including December 1, 1989, there shall be payable to the Lender installments of accrued interest only at the rate set forth in paragraph 1(a)(ii) above. (ii) Commencing on January 1, 1990 and con- tinuing on the first day of every month thereafter until and including November 1, 2014, there shall be payable to the Lender equal blended monthly instal- lments of principal and interest of $ each (Said amount to be set and determined by the Lender based upon the interest rate as set forth in paragraph la(ii) above and an amortization of 25 years.) (iii) Payment of the Principal Balance and all unpaid accrued interest hereon and all indebtedness hereunder shall be due and payable in full on December 1, 2014 (the "Final Maturity Date"), or such earlier date as the maturity of this Note may be accelerated pursuant to the terms of this Note. 2. (a) 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 on this Note due pursuant to paragraph 1(a)(ii) hereof shall be changed, retroactively effective from and after the Date of Taxability (as hereinafter defined) and shall be rate equal to % per annum (Said rate shall be rate as determined in accordance with paragraph 1(a)(ii) above, plus 4%). The City shall immediately upon demand pay to the Lender and to each prior holder affected by such Determination of Taxability an amount equal to the amount by which the interest due under paragraph l(a)(ii) hereof accrues retroactively at such increased rate from the Date of Taxability to the date of payment exceeds the amount of interest actually accrued and paid to the Lender and any such prior holder during said period pursuant to said paragraph. Such obligation of the City shall survive the payment in full of this Note. (b) The terms "Determination of Taxability" and "Date of Taxability" as used herein shall have the meanings ascribed to such terms in Section 4.07 of the Loan Agreement (the "Loan Agreement") dated the date hereof between the City and Sheehan Corporate Center Partnership, a Minnesota general partnership comprised of Frantz Klodt & Son, Inc., a Minnesota corporation, Commers Enterprises, a Minnesota general partnership and Mark R. Sheehan (the "Borrower"). (c) The Lender will use its best efforts to give notice (but Lender will not be liable to the Borrower or the City or any prior holder of this Note for damages or otherwise in the event of failure to give such notice) as soon as practicable, but in any event before the right to appeal such Determination of Taxability has expired, to the Borrower, the City and any prior holder of this Note of its receipt of any Determination of Taxability and permit the Borrower to contest, litigate or appeal the same at its sole expense. In the event any such contest, litigation or appeal is undertaken, the increased interest provided in paragraph 2(a) hereof shall, nevertheless, be payable to the Lender and, to the extent applicable, any prior holder and shall be held by the Lender and any such prior holder in escrow pending final disposition of such contest, litigation or appeal, provided that the Borrower shall indemnify and hold harmless the Lender and each such prior holder from any and all penalties, interest or other liabilities which they may incur on account of such contest, litigation or appeal. In the event a Determination of Taxability is successfully appealed by the Borrower, the Lender and any prior holder shall return to the Borrower the amount of interest paid (together with interest thereon at a rate equal to that which is then available on basic saving accounts available to the Borrower with the Lender) to the Lender and such prior holder pursuant to paragraph 2(a) hereof. 3. 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 applicable prepayment premium or late charge, at maturity, upon accelera- tion, or otherwise. All interest accruing upon this Note shall be computed on the basis of a 360 day year, but charged for the actual number of days elapsed. 4. Principal and interest and prepayment premiums and late charges due hereunder shall be payable at the E office of the Lender, or at such other place as the Lender may designate in writing. 5. 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 estate, and the construction of a multi -tenant office building thereon (collectively, the "Project"), pursuant to the Loan Agreement and this Note is further issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly Chapter 474, Minnesota Statutes, and pursuant to a resolution of the City Council duly adopted on December 17, 1984 (the "Resolution"). 6. This Note is secured by, inter alia, a Pledge Agreement of even date herewith by the City to the Lender (the "Pledge Agreement"), a Mortgage, Security Agreement and Fixture 6 Financing Statement, executed by the Borrower, as mortgagor, in favor of the Lender, as mortgagee, of even date herewith (the "Mortgage"), and certain other agreements between the Borrower and the Lender. The proceeds of the Note shall be disbursed by the Lender pursuant to the Construction Loan Agreement of even date herewith among the Lender, the City and the Borrower (the "Construction Loan Agreement") and the disbursement of the proceeds of this Note is subject to the terms and conditions of the Construction Loan Agreement. 7. The City, for itself, its successors and assigns, hereby waives demand, presentment, protest and notice of dishonor and agrees that without any notice, the Lender and any present or future owner or owners of any property and interests subject to the Mortgage or any other document given to secure this Note, or executed in connection with this Note, may, to the extent permitted by law, from time to time extend, renew, or otherwise modify the date or dates or amount or amounts of payment above recited, or the Lender may from time to time release any part or parts of the property and interests subject to the Mortgage or to any such other document from the same, with or without consideration; whether or not as a result thereof the interest on the Note is no longer exempt from Federal income taxation; provided that in no event may the Final Maturity Date be extended beyond thirty (30) years from the date hereof. In any such case, the City, subject to the limitation of the City's liability expressed herein, shall, to if the extent permitted by law, continue to be liable to pay the unpaid balance of the indebtedness evidenced hereby as so extended, renewed or modified and notwithstanding any such release. 8. The Lender may demand prepayment of the Principal Balance of this Note and all unpaid accrued interest thereon on the tenth (10th) anniversary of this Note, or at any time thereafter upon thirty (30) days prior written notice to the City and the Borrower, in which event all said amounts shall be immediately due and payable. 9. (a) The outstanding Principal Balance of this Note may be prepaid in whole, but not in part (except as otherwise expressly provided in paragraph 9(b) hereof), on the first day of any month upon at least thirty (30) days advance written notice to the Lender (or such lesser period of notice as the Lender may approve) and upon payment of all accrued unpaid interest hereon to the date of prepayment, plus the prepayment premium calculated in accordance with paragraph 10 hereof, except that such prepayment premium shall not be payable if such prepayment occurs after the tenth (10th) anniversary of the date of this Note. Upon a Determination of Taxability as described in paragraph 2(a) hereof or upon the 10 occurrence of certain "Events of Default" under the Construction Loan Agreement, the Loan Agreement and/or under the Mortgage, and as provided in paragraph 15 hereof, the Lender may declare the Principal Balance and all unpaid accrued interest on this Note to be immediately due and payable (and such action being sometimes herein referred to as an "accelera- tion" of this Note), in which event the said prepayment premium shall also be payable in accordance with paragraph 10 hereof, except that such prepayment premium shall not be payable if such acceleration occurs after the tenth (10th) anniversary of the date of this Note. (b) Upon the occurrence of certain events of damage, destruction or condemnation, the City or the Borrower may, as provided in Article III of the Mortgage and Article 5 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 of this Note, in which event the prepayment premium described in paragraph 10 hereof shall be due and payable, unless such prepayment occurs after the tenth (10th) anniversary of the date of this Note. 10. There shall be due, owing and payable, at the time of any prepayment, in whole or in part, or acceleration of this Note occurring prior to the tenth (10th) anniversary of the date of this Note, in addition to the amounts otherwise payable hereunder, a premium equal to the present value on the date of prepayment'or acceleration (using the Treasury Rate, as hereinafter defined, calculated as of the date of prepayment or acceleration as the discount factor) of the stream of monthly payments in amount equal to the product of the Principal Balance prepaid times the Quotient (as hereinafter defined) and in number equal to the number of whole months between the date of prepayment or acceleration and the Calculation Date (as hereinafter defined) with the first such payment payable on the date of prepayment or acceleration. The Treasury Rate means the yield on United States Treasury Securities (as most recently published by the Federal Reserve Bank of New York before the date of prepayment or acceleration) having a maturity date closest to said Calculation Date. The Quotient means the result obtained by multiplying (i) the difference between % (said rate to be determined by the Lender, subject to acknowledgment and ratification as provided in paragraph 1(a)(i) hereof) and the Treasury Rate, determined as of the date of prepayment or acceleration, by (ii) a fraction with a numerator equal to the number of days between the date of prepayment or acceleration and said Calculation Date and a denominator equal to 360 times the number of whole months between the date of prepayment or Acceleration and said Calculation Date. For the purposes of this Note, the Calcu- lation Date shall mean December _, 1994 (10th Anniversary of the Note). Examples of how this formula is applied and the calculation of this prepayment premium is made are set forth in Exhibit A attached to this Note and hereby made a part of this Note. 11 11. All payments under this Note, whether regularly scheduled payments or prepayments, shall be first applied to any reasonable expenses and disbursements incurred by the Lender in connection with the collection hereof, then to accrued and unpaid interest, then to applicable prepayment premiums and late charges, if any, then to advances made by the Lender under this Note, the Mortgage, the Loan Agreement or the Construction Loan Agreement and thereafter to the installments of principal in the inverse order of their maturity. The payments due under paragraph 1 hereof shall continue to be due and payable in full until the Principal Balance and all unpaid accrued interest due on this Note have been paid, regardless of any partial prepayment made hereunder. 12. As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the Note Registrar, by the Lender in person or by his agent duly authorized in writing, at the Lender's expense, upon surrender hereof together with a written instrument of transfer satisfactory to an authorized officer of the Note Registrar, duly executed by the Lender or his duly authorized agent. Upon such transfer the said authorized officer will note the date of registration and the name and address of the new registered Lender in the registration blank appearing below. The City may deem and treat the person in whose name the Note is last registered upon the books of the Note Registrar with such registration noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on the account, of the Principal Balance or interest and for all other purposes, and all such payments so made to the Lender or upon its order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. 13. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Mortgage, the Loan Agreement, the Pledge Agreement and the Construction 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. 14. This Note and interest thereon and any premium due hereunder are payable solely from the revenues and proceeds derived from the Loan Agreement and the Mortgage and such other security as the Lender has required pursuant to the Construction Loan Agreement, 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 12 City or, to the extent permitted 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 this 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 Agreement, sufficient to pay all costs of such performance or the enforcement thereof. 15. It is agreed that time is of the essence of this Note. If an Event of Default (as that term is defined in the Mortgage, the Construction Loan Agreement or the Loan Agreement) shall occur, then the Lender shall have the right and option to declare the entire Principal Balance hereof and accrued interest thereon immediately due and payable, whereupon the same, plus any late charges and prepayment premiums, shall be due and payable. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. 16. The remedies of the Lender, as provided herein and in the Mortgage, the Loan Agreement, the Pledge Agreement and the Construction Loan Agreement, are not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Lender, 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 thereof. 17. Any payment hereunder not made by the City within twenty (20) days of the due date shall be subject to a late payment charge equal to 2$ of such delinquent payment and shall e immediately due by the City to the Lender. 18. The Lender 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 Lender and, then only to the extent specifically set forth in the writing. A 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. 19. This Note has been issued without registration under state or federal or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not 13 be assigned or transferred in whole or part, nor may a participation interest in;the Note be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen and be performed precedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. IN WITNESS WHEREOF, the City has caused this Note to be duly executed in its name by the manual signatures of the Mayor Pro Tem and City Manager and has caused the corporate seal to be affixed hereto, and has caused this Note to be dated December 31 , 1984. By /s/ James L. Brimeyer City Manager (SEAL) CITY OF ST. LOUIS PARK, MINNESOTA By /s/ Keith J. Meland Mayor Pro Tem 14 EXHIBIT A PREPAYMENT PREMIUM EXAMPLES The prepayment penalty is calculated as follows: The difference between : (i) *%, and (ii) The yield as determined on the prepayment or accelera- tion date on United States Treasury Securities having a maturity closest to December **, 1994. Multiplied by: The number of days re- maining from the date of prepayment or acceleration to December **, 1994. Divided by: The number of whole months remaining from the date of prepayment or acceleration to December **, 1994, times 360. The result of this calculation is called the "Quotient." The amount of the prepayment premium is the present value on the date of prepayment or acceleration (using as the discount factor the Treasury Rate on the prepayment or acceleration date, which Treasury Rate is the yield on United States Treasury Securities having a maturity date closest to December **, 1994) of a stream of equal monthly payments in number equal to the number of whole months remaining to December **, 1994, with the amount of each hypothetical monthly payment equal to the Quotient times the principal amount prepaid or accelerated and with the first payment payable on the date of prepayment or acceleration. Example: Assume: Prepayment or acceleration five (5) years prior to December **, 1994. Amount prepaid = $500,000 * (same rate as in paragraph 10b of the Note) ** (10th annivesary of this IJgte) Case I - Treasury Rate on date of prepayment or acceleration on five year securities (five years prior to December **, 1994) is greater than or equal to *** %. Prepayment Premium: None Case II - Treasury Rate on date of prepayment or acceleration on five year securities (five years prior to December **, 1994) = 13% Difference 360 times Amount In Interest No. of Days* No. of Months* $500,000 X (*** - .1300) x (365 x 5) * 360 x (5 x 12) = $ Present value of a monthly annuity (payable in advance) of $ for 60 months discounted at 13.00% (1.083% per month) Prepayment Premium: $ *to December **, 1994 ** (10th anniversary of this Note) *** (same rate as in paragraph 10b of the Note) 16 i PROVISIONS AS TO REGISTRATION The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the Note Registrar in the name of the holder last noted below. Signature of an authorized Date of Name and address officer of Note Registration Registered Owner Registrar The First National Bank of Saint Paul 332 Minnesota Street December 1984 St. Paul, Mn. 55101 17 2-2. The Note. The Note shall be dated as of the date of delivery, shall be payable at the times and in the manner, shall bear interest at the rate, and shall be subject to such other terms and conditions as are set forth therein. 2-3. Execution. The Note 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 Note shall cease to be such officer before the delivery of the Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if had remained in office until delivery. In the event of the absence or disability of the Mayor or the 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 execute and deliver the Note. 2-4. Delivery of Note. Before delivery of the Note there shall be filed with the Lender (except to the extent waived by the Lender and Bond Counsel) the following items: (1) an executed copy of each of the following documents: , it (A) the Loan Agreement; (B) the Pledge Agreement; (C) the'Mortgage; (D) the Construction Loan Agreement; (E) the Guaranty; (F) a Cost Certificate signed by the Borrower certifying the use of the proceeds of the Note; (G) UCC -1 financing statements required by the terms of the Construction Loan Agreement. (2) an opinion of Counsel for the Borrower as prescribed by Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; 18 (4) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (3) above or that the Lender may reasonably require for the closing. 2-5. Disposition of Note Proceeds. (1) There is hereby established with the Lender a Construction Fund to be held by the Lender as a separate account of the City as provided in the Construction Loan Agreement. Upon delivery of the Note to Lender, the proceeds of the Note shall be credited to the Construction Fund held by the Lender on behalf of the City, at which time the entire principal amount of the Note shall be deemed advanced, and the Lender shall, on behalf of the City, disburse funds from the Construction Fund for payment of Project Costs upon receipt of such supporting documentation as the Lender may deem reasonably necessary, including compliance with the provisions of the Construction Loan Agreement. The Borrower shall provide the City with a full accounting of all funds disbursed for Project Costs. (2) Any surplus in the Construction Fund shall be applied towards the prepayment of the Note as provided in the Construction Loan Agreement and shall not be invested to produce a yield greater than the yield on the Note, as required by Internal Revenue Service Revenue Procedure 79-5, Revenue Procedure 51-22 and 26 CFR 601.201 (and any subsequent amendments, modifications or replacements thereof); provided that, if the Lender receives an opinion of Bond Counsel that the exemption from federal income taxation of interest on the Note will not be jeopardized, the surplus funds may be invested at a yield greater than the yield on the Note. 2-6. Registration of Transfer. The First National Bank of Saint Paul, a national banking association in Saint Paul, Minnesota, is hereby appointed to act as the Note Registrar and shall do so until a successor Note Registrar is appointed by the City. The Note Registrar will keep at its principal office a Note Register in which, subject to such reasonable regulations as it may prescribe, the Note Registrar shall provide for the regis- tration 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 Note together with a written instrument of transfer satis- factory to an authorized officer of the Note Registrar, duly executed by the Lender or its duly authorized agent. The following form of assignment shall be sufficient for said purpose. 19 For value received _ hereby sells, assigns and transfers unto the within Note of the City of St. Louis Park, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of the Note Registrar with full power of substitution in the premises. The undersigned certifies that the transfer be made in accordance with the provisions of Section 2-9 of the Resolution authorizing said Note. Dated.: Registered Owner Upon such transfer an authorized officer of the Note Registrar shall note the date of registration and the name and address of the new Lender in the Note Register and in the registration blank appearing on the Note. 2-7. Mutilated, 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 if 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 the 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 with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for prepayment 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 name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving J 20 I : i payment of or on account of the Principal Balance, redemption price or 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 Transfers. The Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. 2-10. Issuance of New Notes. Subject to the provisions of Section 2-9, the City shall, at the request and expense of the Lender, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount, and the amount of the monthly installments payable thereunder, and registered in the name of the Lender or such transferee as may be designated by the Lender. 21 ARTICLE THREE GENERAL COVENANTS 3-1. Payment of Principal 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 and interest are payable solely from and secured by revenues and proceeds derived from the Loan Agreement, the Pledge Agreement, the Mortgage, and the Construction Loan Agreement, 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, and the Construction Loan Agreement; 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. 3-2. Performance of and Authority for Covenants. The 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 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 Note and for the execution and delivery thereof has been duly and effectively taken; 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, upon request of the Lender and being indemnified to the satisfaction of the City for all 22 fl expenses and claims arising therefrom, and to perform all covenants and other provisions pertaining to the City contained in the Note, the Loan Agreement and the Construction Loan Agreement and subject to Section 3-4. 3-4. Nature of Security. Notwithstanding anything contained in the Note, the Mortgage, 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 the 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 shall the Note otherwise contribute or give rise to a pecuniary liability of the City or, to the extent permitted by law, any of the City's officers, 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 Note or the interest thereon, or to enforce payment thereof against any property of the City other than the revenues pledged under the Pledge Agreement; and the Note shall not 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 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 security thereof as provided in this Resolution, the Loan Agreement, the Pledge Agreement, the Mortgage, the Construction Loan Agreement, and in the 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 the Loan Agreement sufficient to pay all costs of such performance or the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon. 23 ARTICLE FOUR MISCELLANEOUS 4-1. Severability. 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 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 remaining portions of this Resolution or any part thereof. 4-2. Authentication of Transcript. il The officers of the City are directed to furnish to Bond Counsel certified 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, is certificates and affidavits, including any heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 4-3. Registration of Resolution. The City Manager is authorized and directed to cause a copy of this Resolution to be filed with 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 Agreements. The forms of the proposed Loan Agreement, the Pledge 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 J 24 f i necessary and appropriate and approved by Bond Counsel prior to the execution of the documents, and the Mayor and City Manager of the City are authorized to execute the Loan Agreement, the Pledge Agreement and the Construction Loan Agreement in the name of and on behalf of the City and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Mayor or the 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 and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. Adopted by the St. Louis Park City/ -1 December 17, 1984 City Clerk Reviewed for administration: 9U'� ty Manager &MA2�' or Pro Tem Apprpvved as to form and legality: N City ttorney -25-