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HomeMy WebLinkAboutResolution - 81-24 - Final Approval MIDB=s Eagle Drug - $1,160,000.00 - 02/26/1981 y f � r ',lembe r 4zzt1t introduced the following resolu ion and moved-its a option: RESOLUTION RELATING TO. A $1 , 1 60 ,0 00 COMMERCIAL DEVELOPMENT REVENUE NOTE ; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA STATUTES, CHAPTER 474 BE IT RESOLVED by the City Council of the City of Eden Prairie , Minnesota, as follows: Section 1 . Definitions . 1 .01 . In this Resolution the following terms have the following respective meanings unless the context hereof or use herein clearly requires otherwise: Act : the Minnesota Municipal Industrial Develooment Act , Minnesota Statutes, Chapter 474 , as amended; Assignment : the Assignment of Rents and Leases to be given by the_ Partnership to the Lender; City: the City of Eder Prairie , Minnesota , its successors and assigns; Commitment : the commitment of Lender issued in favor of the Partnership, consisting of a letter dated August 5 , 1980 , from the Lender to the Partnership; Guarantors: Clifford G . Olson, Douglas J . Olson , Roy H . Olson , George Setzer and David B . Clinton , individuals residing in the State of Minnesota ; Guaranty: the Guaranty to be given by the Guarantors to the Lender; Holder : the Lender or any person to whom the Bond has been assigned pursuant to Section 5 .04 of this 'Resolution; Improvements : the approximately 60 ,000-square foot office/warehouse building and related facilities and improvements located on the Land , which are to be acquired and constructed by the Partnership in accordance with the terms of the Loan Agreement ; -2- Land : the real estate located in the County of Hennepin , State of Minnesota , and legally described in Exhibit A to the Mortgage ; Lender_ : Unionmutual Stock Life Insurance Co . of America , a Maine corporation , its successors and assigns ; Loan Agreement : the Loan Agreement to be entered into between the City and the Partnership ; Mortgage : the Mortgage and Security Agreement and Fixture Financing Statement to be entered into between the Partnership, as mortgagor , and the Lender , as mortgagee ; Note : the $1 , 160 , 000 Commercial Development Revenue Note ( Eagle Drug Building Partnership Project) to be issued by the City pursuant to this Resolution ; organizational Documents : the following documents , each ot which s all be in form and substance acceptable to the Lender : ( i) A copy of the Partnership Agreement of the Partnership , certified by a partner . ( ii) An opinion or opinions of counsel reasonably acceptable to the Lender indicating that each of the documents referred to in Section 3 . 03 of this Resolution have been duly executed and delivered and are legal and binding obligations of the Partnership and the City, enforceable in accordance with their terms . Partnership: Eagle Drug Building Partnership, a Minnesota general partnership , and its permitted successors and assigns ; Pledge Agreement : the Pledge Agreement to be given by the City to the Lender ; Project : the Land and the Improvements , as they may at any time exist ; Project Costs : those costs defined as Project Costs in Section 1 . 01 of the Loan Agreement ; -3- Rate Agreement : the Adjustable Rate Agreement to be entered into among the City, the Partnership and the Lender ; and Resolution : this resolution of the City . Section 2 . Findings . It is hereby found and declared that : r ( a) based upon representations made to the City by representatives of the Partnership as to the nature of the Project , the real property and improvements described in the Loan Agreement and the Mortgage comprising the Project constitute a project authorized by the Act; ( b) the purpose of the Project is , and the effect thereof will be , to promote the public welfare by the attraction , encouragement and development of economically sound industry and commerce so as to prevent- the emergence of or to rehabilitate , so far as possible , blighted and marginal lands and areas of chronic unemployment ; the .retention of industry to use the available resources of the community in order to retain the benefit of its existing investment in educational and public service facilities ; halting the movement of talented , educated personnel of mature age to other areas and thus preserving the economic and human resources needed as a base for providing governmental services and facilities ; and more intensive development of land available in the community to provide an adequate and better balanced tax base to finance the increase in the amount and cost of governmental services; ( c ) the Project when completed will add to the tax base of the City , and will accordingly be of direct benefit to the taxpayers of the City as well as those of the County of Hennepin and the school district in which the City is located ; ( d ) the Project has been approved by the Commissioner of Securities of the State of Minnesota . ( e) the financing of the acquisition and construction of the Project , the issuance and sale o f the Note , the execution and delivery of the Loan Agreement , the Rate Agreement and the Pledge Agreement , and the performance of all covenants and agreements of the City contained in the Note , the Loan -4- Agreement , the Rate Agreement and the Pledge Agreement and of all other acts and things required under the Constitution and laws of the State of Minnasota to make the Note , the Loan Agreement , the Rate Agreement and the Pledge Agreement valid and binding obligations of the City in accordance with their terms , are authorized by the Act; ( f ) it is desirable that the Note in the amount of $ 1 ,160 ,000 be issued by the City upon the terms set forth herein , and that the City pledge its interest in the Loan Agreement and grant a security interest therein to the Lender as security for the payment of the principal of, premium and late charges, if any, and interest on the Note; (g ) the loan payments contained in the Loan Agreement are fixed, and required to be ravised from time to time as necessary , so as to produce income and revenue sufficient to provide -or prompt payment of principal of , premium and late charges, if any, and interest on the Note when due , and the Loan Agreement also provides that the Partnership is required to pay all expenses of the operation and maintenance of the Project , includina_ , but without limitation, adequate insurance thereon and all taxes and special assessments levied upon, or with respect to the Project and payable during the term of the Loan Agreement; (h ) under the provisions of Minnesota Statutes, Section 474 . 10 , the Note is not to be payable from nor charged upon any funds of the City other than the revenue pledged to the payment thereof; the City is not subject to any liability thereon; 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, nor to enforce payment thereof against any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement; the Note shall not constitute a charge , lien or encumbrance, legal or equitable , upon any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement; and the Note shall recite that the Note, including interest thereon , is payable solely from the revenue pledged to the payment thereof and shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; —5- ( i ) the execution and delivery of the Loan Agreement , the Rate Agreement , the Pledge Agreement and the Note will not conflict with ; or constitute on the part of the City a breach of or a default under , any existing agreement , indenture , mortgage , lease or other instrument to which the City is subject or is a party or by which it is bound , provided that this- - finding is made solely for the purpose of estopping the City from denying the validity of the Loan Agreement , the Rate Agreement , the Pledge Agreement or the Note by reason of the existence of any facts contrary to this finding; (j ) no litigation is pending or , to the best knowledge of the members of this Council , threatened against the City questioning the organization or boundaries of the City or the right of any officer of the City to hold his or her office , or in any manner questioning the right and power of the City to execute and deliver the Note , or otherwise questioning the validity of the Note or the execution , delivery or validity of the Loan Agreement , the Rate Agreement or the Pledge Agreement , or questioning the appropriation of revenues to payment of the Note or the right of the City to loan the proceeds of the Note to the Par trier ship ; ( k) all acts and things required under the Constitution and the laws of the State of Minnesota to make the Loan Agreement , the Rate Agreement , the Pledge Agreement and the Note the valid and binding obligations of the City in accordance with their terms will have been done upon adoption of this Resolution and execution of the Loan Agreement , the Rate Agreement , the Pledge Agreement and the Note , provided that this finding is made solely for the purpose of estopping the City from denying the validity of the Loan Agreement , the Rate Agreement , the Pledge Agreement or the Note by reason of the existence of any facts contrary to this finding ; and ( 1) the City is duly organized and existing under the Constitution and the laws of the State of Minnesota and is authorized to issue the Note in accordance with the Act . Section 3 . Authorization and Sale . 3 .01 . Authorization . The City is authorized by the Act to issue revenue bonds and loan the proceeds -6- thereof to business enterprises to finance the acquisition and construction of "projects" , as defined in the Act , and to make all contracts, execute all instruments and do all things necessary or convenient in the exercise of such authority. 3 .02 . Preliminary Citv Approval. By preliminary resolution duly adopted by the Council on December 4 , 1979 , after a public hearing held on that date , this Council approved the sale of a revenue obligation pursuant to the Act and the loan of the proceeds to the Partnership for the acquisition and construction of the Project suitable and designed for use as an office/warehouse building and authorized the preparation of such documents as may be appropriate to the Project. 3 .03 . A*71oroval of. Documents. Pursuant to the foregoing, there have been prepared and presented to the Council copies of the following documents , all of which are now, or shall be , placed on file in the office of the City Clerk : ( a) Assignment ; ( b) Guaranty; . ( c ) Loan Agreement ; ( d) Mortgage; ( e ) Pledge Agreement ; and ( f) Rate Agreement . The forms of the documents listed in ( a ) through ( f) above are approved, with such variations , insertions and additions as are deemed appropriate by the parties and approved by the City Attorney. Section 4 . Authorizations. Upon the completion of the Loan Agreement , the Pledge Agreement and the Rate Agreement approved in Section 3 . 03 hereof and the execution thereof by the Partnership and the Lender , as the case may be , the Mayor and the Acting City Manager shall execute the same on behalf of the City and , together with the City Clerk , shall execute the Note in substantially the form approved in paragraph 5 .01 hereof on behalf of the City , and shall execute such other certifications , documents or instruments as bond counsel or counsel for the Lender shall require , subject to the -7- i approval of the City Attorney, and all certifications , recitals and representations therein shall constitute the certifications , recitals and representations of the City. Execution of any instrument or document by one or more appropriate officers of the City shall constitute , and shall be deemed the conclusive evidence of , the approval and authorization by the City and the Council of the instrument or document so executed . ; Section 5 . The No to . 5 . 01 . Form and Authorized Amount. The Note shall be issued substantially in the form presented to the Council and set forth as Exhibit A to this Resolution with such appropriate variations , omissions and insertions as are permitted or required by this Resolution , in the total principal amount of $ 1 , 160 , 000 . The terms of the Note are set forth therein , and such terms , including but not limited to provisions as to interest rate , dates and amount of payment of principal and interest and prepayment orivileges , are incorporated by reference herein . 5 . 02 . Execution . The Note shall be executed on behalf of the City by the signatures of the Mayor and the Acting City Manager and shall be sealed with its corporate seal and attested by the City Clerk . In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery thereof, such signature shall nevertheless be valid and sufficient for all purposes . 5 . 03 . Mutilated , Lost and Destroyed Note . In case the Note shall become mutilated or 6e destroyed or lost , the City shall cause to be executed and delivered a new Note of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated Note , or in lieu of and in substitution for such Note destroyed or lost , upon the Holder ' s paying the reasonable expenses and charges of the City in connection therewith , and , in case the Note is destroyed or lost , its filing with the City evidence satisfactory to it of such loss or destruction . 5 . 04 . Assignment . The Note may be assigned by the Holder , from time to time , by endorsement thereon or by separate written instrument ; provided that, notice of any such assignment shall be given in writing to the City and the Partnership. At the request of the Holder , the Note shall be registered on the books of the City , subject to the conditions set forth in the form of the Note attached hereto as Exhibit A. -8- 5 . 05. Deliver and Use of Proceeds . Pr_ for to delivery of the Note , the documents referred to in Section 3 . 03 hereof shall be completed and executed in form and substance as approved by the City Attorney, and an original, executed counterpart of each such document shall be delivered to the Lender , together with the Or"ganizational Documents. The City shall thereupon deliver to the Lender the Note in the total principal amount of $1 , 160 ,000, together with a copy , duly certified by the City Cleric , of this Resolution and such closing certificates as are required by bond counsel. Upon delivery of the Note and the above items to the Lender , the Lender shall , on behalf of the City, disburse the proceeds of the Note to the Partnership in reimbursement of , or to its order for payment of, Project Costs pursuant to the provisions of the Loan Agreement. The Partnership shall provide the City with a full accounting of all funds disbursed for Project Costs . Section 6 . Limitations of the City' s Obligations . Notwithstanding anything contained in the Note , the Loan Agreement , the Rate Agreement or the Pledge Agreement or any other documents referred to in Section 3 . 03 hereof, the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation , and shall not be payable from nor charged upon any funds other than the revenue pledged to the payment thereof, and the City shall not be subject to any liability thereon , and 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 those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement , and the Note shall not constitute a charge , lien or encumbrance , legal or equitable , upon any property of the City other than those rights and interests of the City under the Loan Agreement which have been pledged to the Lender by the Pledge Agreement. The agreement of the City to perform the covenants and other provisions contained in this Resolution or the Note , the Loan Agreement, the Rate Agreement or the Pledge Agreement and the other documents _listed in Section 3 .03 hereof shall be subject at all times to the availability of revenues furnished by the Partnership sufficient to pay all costs of such performance or the enforcement thereof, -9- and the City shall not be subject to any personal or pecuniary liability thereon other than as stated above . Adopted: February 3 , 1981 . %i Mayor Attest: Clerk i I i -10- The motion for the adoption of the foregoing resolution was duly seconded by Member , and , upon vote being taken thereon, the following voted in favor thereof and the following voted against 'the same : whereupon said resolution was declared duly passed and adopted . r -11- EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN. CITY OF EDEN PRAIRIE Commercial Development Revenue Note ( Eagle Drug Building Partnership Project) No . R-1 $1 ,160 ,000 The City of Eden Prairie , Minnesota, a municipal corporation of the State of Minnesota ( the City) , for value received hereby promises to pay to the order of Unionmutual Stock Life Insurance Co . of America or its assigns ( the Holder ) at its principal office in Portland , Maine , or such other place as the Holder may designate in writing , from the source and in the manner hereinafter provided , the principal sum of ONE MILLION ONE HUNDRED SIXTY THOUSAND DOLLARS ( $1 ,160 , 000 ) , with interest on the unpaid principal balance at the annual rates set forth below, in any coin or currency which at the time or times of payment is legal tender for the payment of public and private debts in the United States of America . The principal of and interest on this Note are payable in installments due as follows : ( a) On or before March 1 , 1981 , an amount equal to $1 ,772 .22 , representing interest on the principal of this Note from the date hereof to March 1 , 1981 , at the rate of eleven percent ( 11% ) per annum. ( b ) On or before April 1 , 19 81 , and on or before the first day of each calendar month thereafter , to and including January 1 , 2011, an amount equal to Eleven Thousand and Forty-nine Dollars ( $11 ,0 49 ) , and on or before February 1 , 2011 , an amount equal to all remaining unpaid principal. and interest on this Note , such amounts representing payments of principal of this Note and interest hereon at an interest rate of eleven percent ( 11%) per. annum. The rate of interest per annum payable under this Note and the amount of the monthly installment payments of principal and interest provided for in the foregoing paragraph ( b) are subject to adjustment as hereinafter provided in this Note . All payments of principal and interest pursuant to the foregoing paragraph ( b) shall be applied first to interest due on the outstanding principal balance and thereafter in reduction of said principal balance . All interest hereon shall be computed on the assumption that each year contains three hundred sixty ( 360 ) days and is composed of twelve ( 12 ) thirty-day months . If any payment of principal and/or interest on this Note is not paid when due , each and every such delinquent payment, including the entire principal balance and accrued interest in the event of an acceleration of this Note, shall bear_ interest to the extent permitted by law at the rate of interest per annum equal to the rate of interest per annum then payable under this Note plus two percent (2% ) , from its due date until payment . If the Molder should not receive on or before the tenth day of any month all of the principal and interest due on this Note on the first day of such month, then , in addition to all other 'sums due hereunder , the Holder shall be entitled to receive on the eleventh day of such month a service charge for its uncovered administrative costs in handling late payments equal to four percent ( 4% ) of the delinquent principal and interest . Adjustments to Interest Rate If the Holder receives notice of a Determination of Taxability ( as defined in the Loan Agreement herein- after referred' to ) , the rate of interest then payable under this Note shall automatically be increased by two percent ( 2% ) per annum, effective as of the date of receipt by the Holder of the notice of such Determination of Taxability , in which event the monthly installment payments of principal. and interest required hereunder by the City in paragraph (b) above shall be increased , effective as of the first day of the calendar month following such date of receipt, to an amount sufficient to amortize the then unpaid principal balance of this Note, together with interest at the rate of interest per annum then payable under this Note , as increased in accordance with the provisions of this paragraph , in full , in equal monthly installment payments of principal and interest, by February 1 , 2011 . The Holder shall notify in writing the City and the Partnership hereinafter referred to , as soon as practicable after the receipt thereof, of its receipt of a Determination of Taxability and of the consequent increase in interest rate and monthly installment payments required hereunder . In addition, the Holder , at its option, may, within sixty (60 ) days after receipt of -2- notice of a Determination of Taxability, declare the unpaid principal balance of this Note , together with accrued interest thereon and any other indebtedness due hereunder , due and payable in full , upon at least six ( 6 ) months ' prior written notice to the City and the Partnership, in which event the City shall pay to the Holder on the date specified in said notice an amount , equal to the entire unpaid principal balance of this Note , plus accrued interest thereon and any other indebtedness due hereunder , and , if such Determination of Taxability is due to the breach of any covenant or warranty or falseness of any representation made by the Partnership in the Loan Agreement or in any other instrument or certificate delivered in connection with the issuance of this Note, or is otherwise due to any other act or omission on the part of the Partnership or any other "principal user" (within the meaning of Section .103 (b) ( 6 ) of the Internal Revenue Code of 1954 , as amended ) of the Project ( as defined in the Loan Agreement ) , a penalty equal to seven percent ( 7% ) of such unpaid principal balance , if such payment occurs prior to March 1 , 1986 , five percent ( 5% ) of such unpaid principal balance , if such payment occurs during the period from March 1 , 1986 , to March 1 , 1991 , or the premium that would be payable by the City, as described in the first paragraph of the section hereof entitled "City' s Right to Prepay Note , " if such payment occurs on or after March 1 , 1991 . In any event , the City shall pay to the current and any previous Holder of this Note , in addition to the other amounts set forth in this paragraph and within thirty ( 30 ) days of receipt of a notice setting forth such amounts , the amounts of additional federal income taxes, including penalties and interest thereon, which such Holder or Holders estimate they will incur by reason of such Determination of Taxability for or with respect to their current and past tax years for the period of time between the Date of Taxability ( as defined in the Loan Agreement) and the date of increase in interest rate on this Note . The provisions of this paragraph shall survive the payment of this Note. In the event a Determination of Taxability shall have occurred during the: period from March 1 , 1986 , to March 1 , 1991 , the City shall have the right , at its option, to prepay the entire outstanding principal amount of this Note by paying to the Holder such outstanding principal amount , together with an amount equal to five percent ( 5% ) of such outstanding principal amount and all accrued and unpaid interest hereon and any other sums due hereunder . In order to exercise such right, the City shall give the Holder sixty ( 60 ) days ' written notice -3- thereof within thirty ( 30 ) days after the Holder ' s notice to the City and the Partnership of its receipt of a Determination of Taxability. At the option of the Holder , the rate of interest payable on the unpaid principal balance of this Note may be increased as of March 1 of the years 1991 , 1996 , 2001 and 2006, upon no more than ninety ( 90) and no less than sixty ( 60 ) days' prior written notice to the City and the Partnership to the rate of interest per annum equal to three and one-half percent ( 3 1/2% ) per annum ( or five and one-half percent ( 5 1/2% ) per annum if the rate of interest hereunder has previously been increased by the Holder by two percent ( 2% ) per annum by reason of a Determination of Taxability as provided above ) in excess of the yield reflected in the Bond Buyer Index of Municipal Bond Average Yields ( 20 bond index) as most recently published in The Daily Bond Buyer ( or , if said Bond Buyer Index is no longer published , a comparable index selected by the Holder ) prior to the December 1 preceding the March 1 in question. In the event of any such increase in the rate of interest hereunder , and provided that the City does not prepay this Note as hereinafter provided in this paragraph, the monthly installment payments of principal and interest required by the City in paragraph. (b) above shall be increased , effective as of the April 1 following the March 1 in question , to an amount sufficient to amortize the then unpaid principal balance of this Note , together with interest at the rate of interest per annum then payable under this Note , as increased in accordance with the provisions of this paragraph, in full , in equal monthly installment payments of principal and interest , by February 1 , 2011 . Notwithstanding anything in this Note to the contrary , in the event the City and the Partnership receive written notice from the Holder of any such optional increase in the rate of interest on this Note pursuant to the provisions of this paragraph, the City shall have the right to prepay this Note in whole , but not in part, at any time prior to the effective date of such increase , without any penalty or premium. Notwithstanding anything in this Note to the contrary , in no event shall the rate of interest at any time payable on this Note exceed twenty-five percent ( 25% ) per annum. -4- Holder' s Right To Call Note At the option of the Holder , the unpaid principal balance of this Note , together with accrued interest thereon and any other indebtedness due hereunder, may be declared due and payable in full as of March 1 , 1996 , upon six ( 6 ) months ' prior written notice to the Partnership and the City , provided that in the event the Holder exercises such option , and this Note is paid in full by the City on or before the date specified in such notice , no prepayment penalty or premium' shall be payable with respect to such payment . City' s Right to Prepay Note Except as otherwise expressly provided in this Note , this Note may not be prepaid prior to the expiration of the tenth Loan Year ( as defined in the Loan Agreement ) . Beginning with the eleventh Loan Year and thereafter , upon sixty ( 60 ) days ' prior written notice to the Holder , the City may prepay the unpaid principal balance hereof, In whole or in part, on any installment payment date , upon payment of a premium of five percent ( 5% ) of the amount of such prepayment during the eleventh Loan Year . The premiUM for such prepayment shall decrease by one-half of one percent (1/2% ) for each Loan Year thereafter , until a premium of one percent ( 1% ) is reached , which premium shall be applicable until February 1 , 2011 , at which time no premium shall be payable . The Holder shall apply any such prepayment against the applicable prepayment premium, if any, and then against the unpaid principal amounts due hereunder , if the entire unpaid principal balance and interest thereon is not paid in full , and no partial prepayment shall postpone, defer or reduce the amount of the monthly installment payments otherwise due hereunder . To the extent permitted by law , ( i ) said prepayment premium shall be payable regardless of whether this Note is prepaid voluntarily or involuntarily, and ( ii) if the principal sum is involuntarily prepaid prior to the expiration of the tenth Loan Year , the premium payable in respect thereof shall be an amount equal to seven percent (7% ) of the principal sum prepaid . In the event the Holder applies the net proceeds of insurance or condemnation awards upon the occurrence of certain events of damage , destruction or condemnation of the property subject to the Mortgage and Security Agreement and Fixture Financing Statement hereinafter referred to to the payment of this Note , as provided in Sections 1 . 06 and 1 . 07 of said Mortgage, such application shall be made without any prepayment penalty or premium. -5- Purpose and Security This Note is issued by the City for the purpose of providing funds to be loaned to Eagle Drug Building Partnership, a Minnesota general partnership ( herein called the Partnership) , pursuant to the terms of a Loan Agreement, of even date herewith ( the Loan Agreement) , to be used to pay the cost of a project , within the meaning of Minnesota Statutes , Section 474 .02 , Subdivision 1 ( a) , consisting of the acquisition of certain land located in the City and the acquisition and construction thereon of an approximately 60 ,000-square foot office/warehouse building and related facilities and improvements. This Note is secured by a Pledge Agreement, of even date herewith , by the City to Unionmutual Stock Life Insurance Co. of America, a Maine corporation ( together with its successors and assigns, the Lender ) , by a Mortgage and Security Agreement and Fixture Financing Statement, of even date herewith ( the Mortgage) , between the Partnership , as mortgagor , and the Lender , as mortgagee, by an Assignment of Rents and Leases, of even date herewith ( the Assignment) , from the Partnership to the Lender , and by a Guaranty, of even date herewith ( the Guaranty) , from Clifford G. Olson , Douglas J. Olson, Roy H . Olson, George Setzer and David B. Clinton, individuals residing in the State of Minnesota ( the Guarantors) , to the Lender . The disbursement of the proceeds of this Note is subject to the terms and conditions of the Loan Agreement. This Note is issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, including Minnesota Statutes , Chapter 474 , and pursuant to a resolution duly adopted by the City Council on February 3 , 1981 ( the Resolution) , and , together with interest hereon and any premiums , penalties, late charges or other amounts payable hereunder , however designated , are special obligations of the City payable solely from payments to be received by the City pursuant to the Loan Agreement, from payments under the Guaranty and from disposition of the property which secures payment of this Note. This Note , the interest hereon and any premiums , penalties, late charges or other amounts payable hereunder , however designated , shall never constitute a debt of the City within the meaning of any constitutional provision or statutory limitation and shall never constitute or give rise to a charge against its general credit or taxing powers , and are not payable from nor a charge upon any funds of the City other than the revenues -6- pledged to the payment thereof. This Note , the interest hereon and any premiums , penalties, late charges or other amounts payable hereunder , however designated, do not constitute a charge , lien or encumbrance , legal. or equitable , upon any property of the City , except the revenues to be received by the City under the Loan Agreement, and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be limited at all times to the availability of revenues from the Loan Agreement , the Assignment, the Mortgage and the Guaranty, sufficient to pay all costs of such performance or the enforcement thereof . The provisions of this paragraph shall , for all purposes of this Note , be controlling and be given full force and effect, anything else to the contrary in this Note notwithstanding . All of the agreements, conditions , covenants , provisions and stipulations contained in the Mortgage , the Resolution , the Loan Agreement, the Assignment and the Adjustable Rate Agreement, of even date herewith , aniong the City , the Partnership and the Lender , are hereby made a part of this Note to 'he same extent and with the same force and effect as if they were fully set forth herein . It is agreed that time is of the essence of this Note . If a default occurs in any payment due under this Note and is not cured within ten ( 10 ) days after the date such payment is due , or if any Event of Default shall occur under the Mortgage or the Loan Agreement, then the Holder may at its right and option declare immediately due and payable without notice the principal balance of this Note and interest accrued thereon , and , to the extent permitted by law, the applicable prepayment penalty, together with any reasonable attorneys ' fees incurred by the Holder in collecting or enforcing payment thereof , whether suit be brought or not, and all other sums due hereunder or under the Mortgage, the Loan Agreement, the Guaranty or the Assignment, anything to the contrary therein notwithstanding , and payment thereof may be enforced and recovered in whole or in part, at any time , by one or more of the remedies provided in this Note , the Mortgage , the Loan Agreement , the Guaranty or the Assignment. The Holder may extend the time of payment of interest and/or principal of this Note , without notice to or consent of any party liable hereon and without releasing any such party. �M1 _ -7- The remedies of the Holder , as provided herein and in the Mortgage, the Loan Agreement, the Guaranty and the Assignment, shall be cumulative and concurrent; may be pursued singly, successively or together and at the sole discretion of the Holder ; and may be exercised as often as occasion therefor shall occur . The failure to exercise any such right or remedy shall in no event be construed as a waiver or release thereof . The City, for itself , its successors and assigns , subject to limitation of the Cit.y' s liability, hereby guarantees payment of this Note and waives diligence , demand , presentment, protest and notice of dishonor and suretyship defenses generally, and agrees that without any notice , the Holder hereof and any present or future owner or owners of any property and interests covered by the Mortgage or any other document given to secure this Note , or executed in connection with this Note , may from time to time extend , renew, or otherwise modify the date or dates or amount or amounts of payment above recited; or , the Holder hereof may from time to time release any part or parts of the property and interests subject to said Mortgage or to any such other document from the same , with or without consideration . In any such case , the City, . subject to limitation of the City' s liability, shall f continue liable to pay the unpaid balance of the indebtedness evidenced hereby as so extended , renewed or modified and notwithstanding any such release. Negotiation and Registration As provided in the Resolution, this Note may be assigned by the Holder , from time to time , by an endorsement hereon or by other writing; provided that notice of such assignment shall be given in writing to the City and the Partnership. Subject to the conditions set forth herein , the City will , upon request of the Holder , register this Note upon its books . Upon such registration, this Note shall be transferable only by the Holder hereof in person or by its attorney duly authorized in writing by registration hereon and on the books of the City kept for that purpose at the office of the City Clerk and upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk , duly executed by the Holder or its duly authorized attorney. Upon such transfer , the City Clerk will note the date of registration and the name and address of the new Holder upon the books of the City and in the registration blank -8- appearing below . The City may deem and treat the person in whose name this Note is last registered upon the books of the City , with such registration also noted on this Note, as the absolute owner hereof, whether or not overdue , for the purpose of receiving payment of or on account of the principal hereof, interest hereon or any other sums payable hereunder , and for all other purposes , and all such payments so made to the Holder or upon its order shall be valid and effectual to satisfy and discharge the liability on this Note to the extent of the sum or sums so paid , and the City shall not be affected by any notice to the contrary. Separability If any term of this Note, or the application thereof to any person or circumstances , shall , to any extent, be invalid or unenforceable , the remainder of this Note, or the application of such term to persons or circumstances other than those as to which it is invalid or unenforceable , shall not be affected thereby, and each term of this Note shall be valid and enforceable to the fullest extent permitted by law. Successors in Interest This Note applies to , inures to the benefit of, and is binding not only on the parties hereto , but on their successors and assigns . The term "Holder" shall mean the holder and owner , including pledgees , of this Note, whether or not named as Holder herein. Modifications This Note may not be amended , modified or changed nor shall any waiver of any provision hereof be effective , except only by an instrument in writing and signed by the party against whom enforcement of any waiver , amendment, change , modification or discharge is sought. It is intended that this Note is made with reference to and shall be construed as a Minnesota contract and governed by the laws thereof . 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, time and manner as required by law . -9- IN WITNESS WHEREOF , the City has caused this Note to be duly executed by its duly authorized officers and its corporate seal to be affixed hereto, all as of this 26th day of February, 1981 . CITY OF PRAIP,IE �' MANES A /� / / / By l� B. t _..C. � I ( MMayo r Attest _r Clerk Countersigned (SEAL) rig City Manager i i i i i I i I I I I i i ( -10- i I Certificate of Registration It is hereby certified that, at the request of the Holder of the within Note , the City of Eden Far it ie , Minnesota, has this day registered it as to principal and interest , in the name of such Holder , as indicated in the registration blank below , on the books kept by the undersigned for such purpose : Name of Authorized Registered Date of Signature Owner Registration of City Clerk Unionmutual Stock February 26 , 1981 Life Insurance Co. of America r , i i i i I -11-