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HomeMy WebLinkAboutResolution - 84-287 - MIDB's Portnoy - $2,750,000 - 10/16/1984 FINAL NOTE RESOLUTION CITY OF EDEN PRAIRIE $2, 7 50, 000 COMMERCIAL DEVELOPMENT REVENUE NOTE OF 1984 (GERALD A. PORTNOY PROJECT ) _ ADOP`L ED : October 16 , 1984 NOTE RESOLUTION (This Table of Contents is not a part of this Resolution, but is included for convenience only) TABLE OF CONTE:,TTS Page ARTICLE ONE - DEFINITIONS , LEGAL AUTHORIZATION AND FINDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Section 1-.1 . Definitions . . . . . . . . . . . . . . . . . . . . . . 1 Section 1-2 . Legal Authorization. . . . . . . . . . . . . . 3 Section 1-3 . Findings . . . . . . , . . . . . . . . . . . . . . . . 3 Section 1-4 . Authorization and Ratification ofProject . . . . . . . . . . . . . . . . . . . . . . . 5 ARTICLE TWO - NOTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 2-1 . Authorized Amount and Form of 'Tote. . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 2-2 . The Note . . . . . . . . . . . . . . . . . . . . . . . . . 6 Section 2-3 . Execution. . . . . . . . . . . . . . . . . . . . . . . . 6 Section 2-4 . Delivery of Note. . . . . . . . . . . . . . . . . 6 Section_ 2-5 . Disposition of Note Proceeds . . . . . 7 Section 2-6 . Registration of Transfer. . . . . . . . . 8 Section 2-7 . Mutilated, Lost or Destroyed Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Section 2-8 . Ownership of t>ioce. . . . . . . . . . . . . . . . 9 Section 2-9 . Limitation on Note Transfers . . . . . 9 ARTICLE THREE - GENERAL COVENANTS . . . . . . . . . . . . . . . . . . . . . 10 Section 3-1 . Payment of Principal and Interest. 10 Section 3-2 . Performance of and Authority for Covenants . . . . . . . . . . . . . . . . . . . . . 10 Section 3--3 . Enforcement and Performance of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . 10 Section 3-4 . Nature of Security . . . . . . . . . . . . . . . . 11 ARTICLE FOUR - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Section 4-i . Severability. . . . . . . . . . . . . . . . . . . . . . 12 Section 4-2 . Authentication of Transcript. . . . . . 12 Section 4-3 . Registration of Resolution. . . . . . . . 12 Section 4-4 . Authorization to Execute Agreements . . . . . . . . . . . . . . . . . . . . . . . . 12 SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 NOTE RESOLUTION BE IT RESOLVED by the City Council of the City of Eden Prairie, 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: Gerald A. Portnoy, his heirs and assigns , or any transferee entity which may assume its obligations under the Loan Agreement.; City: the City of Eden Prairie, Minnesota, its successors and assigns; Code: the Internal Revenue Code of 1954 , as amended; Construction Fund: the fund established by the City pursuant to this eso ution and Section of the Construction Loan Agreement and 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 ; ,aP' 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 Pau]_, 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 Statutory Mortgage, Assignment. of Leases and Rents, Security Agreement and Fixture Financing Statement to be executed by the Borrower and Barbara A. Portnoy, husband and wife, as mortgagors, to the Lender, as mortgagee, securing payment of the Note and interest thereon, t:To-te : the $2 , 750, 000 Commercial Development Revenue Note of 1984 (Gerald A. Portnoy Project) , to be issued by the City pursuant to this Resolution and the Loan Agreement; .Tote Register : the records kept by the City to provide Eor the registration of transfer of ownership of the Note; Plans and Specifications : the plans and specifications Eor 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 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; Principal Balance: so much of the principal sum on the Note as remains ixnpaid 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, ,�� 2 Resolution: this Resolution of the City adopted October lo , 1984, together with any supplement or amendment -the re to, Security Agreement : the Security Agreement to be executed by the Borrower in favor of the Lender. 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 Resol.ution 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 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 econornically sound industry and commerce so as to pre-vent, 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 3 the community ' s existing investment in educational and public service facilities ; the halting of the movement of talented, educated personnel of al L 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) 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 'Mote in the principal amount of $2 , 750 , 000 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 Project, (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 Mote or interest thereon; ( 7 ) the Note is an industrial development bond within the meaning of Section 103 (b) of the Internal Revenue Code and is to be issued within the exemption provided under subparagraph ( D) of Section 103 (b ) (6) of the Code with respect to an issue of $10 ,000, 000 or less; provided that nothing herein shall prevent the City from hereafter qualifying the Note under a different exemption if, and to the extent , such exemption is permitted by law and consistent with the objects and purposes of. the Project; and ( 8 ) no member of the City Council nor any member of his or her immediate family has a. personal financial interest in the sale of the Mote or in the Project or will personally benefit financially therefrom, and the allocation of a portion of the "Private Activity Bond Limit ", as defined in Section 103 ( n) of the Code, available to the City to the Project was not made in consideration of any bribe , gift, gratuity or direct or indirect contribution to political campaign,- 4 (9 ) the City has received $9 , 239, 314 pursuant to the Act as an allocation of State authority to issue private activity bonds, as such term is defined in Section 103 (A ) of the Code, and part of such authority must be allocated to the Note in order to make its interest exempt from federal income taxation; (10 ) there is no litigation of any nature now pending, or to our knowledge, threatened seeking to restrain or enjoin the issuance, sale, execution or delivery of the Note, or any of the documents described in the Resolution, or questioning the authority or proceedings pursuant to which the Note is being issued, the validity of the Note or any provision made for the payment thereof, or the power of. the City to assist in financing the Improvements as defined in the Loan Agreement; and (11 ) neither the existence of the City nor the rights of the present officials of tfie City to their respective offices is being contested and no authority or proceeding for the issuance of the Note or the execution and delivery of the Pledge Agreement, the Loan Agreement, or the Construction Loan Agreement have been modified, repealed, revoked or rescinded. 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 '[,can Agreement , to provide for the construction and installation of the Project pursuant to the Plans and Specifications by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for bids as may be required for the construction and acquisition of municipal facilities . $ 2, 750, 000 of the State allocation to the City of authority to issue private activity bonds, as such term is defined in Section 103 ( n) of the Code , shall be allocated to, and utilized by, the issuance of the Note. 5 ARTICLE TWO J NOTE 2-1 . Authorized Amount and Form of Note . The Note issued pursuant to this Resolution shall be in substantially the form set forth on Exhibit A attached hereto, 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 -Tote that may be outstanding hereunder is expressly limited to $2 , 750 , 000 unless a duplicate Note is issued pursuant to Section 2-7 . 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 Manager and shall be sealed with the seal of the City. In case any officer whose signature shall appear on the ?Vote 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 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) the following items : ( 1 ) an executed copy of each of the following documents : (A ) the Loan Agreement; (B ) the Pledge Agreement; 6 (C ) the Mortgage; (n) the Security Agreement; (F } the Construction Loan Agreement; (F) a Sworn Cost Statement signed by the Borrower certifying the use of the proceeds of. the Note . (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; (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 . (lj 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 amour-it of the 'Tote 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 Lender or Rorrower shall provide the City with a full accounting of all funds disbursed for Project Costs . ( 2 ) Any surplus in the Construction Fund 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 81-22 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 Votes will not be jeopardized, the surplus funds may be invested at a yield greater than the yield on the Note. 7 2-6 . Registration of Transfer . The City will cause to be kept at the office of. the City Clerk a Note. Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note . The t,Tote 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 instrilment of transfer satisfactory to the City Clerk, duly executed by the Lender or its duly authorized agent . The following form of assignment shall be sufficient for said purpose. For value received I ereby sells, assigns and transfers unto _ the within Note of the City of Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said City with fall 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 the City Clerk shall note the date of registration and the name and address of the new Lender in the ;Dote 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 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 n 8 expenses and charges of the City in connection therewith, and a in the case of a Vote 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 Nlote has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new ,Vote 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 Mote for the purpose of receiving 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 Tote be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements . 9 ARTICLE THREE i 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, the Security Agreement 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, the Security Agreement 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 kgreement in the manner and to the extent set forth in this Resolution, the rTote, 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 thei eof: has been duly and effectively taken; and that the Vote 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 10 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 Security Agreement, 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 ^7ote 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 liabi I.ity 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 Tote 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 Security Agreement, 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 render,- 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 . 11 ARTICLF, FOUR ' MI SCELLANEWS 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 ci rcurnstarice, 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 . The officers of the City are directed to furnish to Rond Counsel certified conies of this Resolution and all documents referred to herein, and affidavits or certificates as to aL l other matters which 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 . 4-3 . Registration of Resolution. The Clerk 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 12 necessary and appropriate and approved by the City Attorney and 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: October 16, 1984 Mayor of tY� City of Eden Prairie Attest: 1 Clerk 13 U^1T'i'Ili S`P:'1Ti�S OF' i+iIi�fZI^:1 STATI OP M [:;,',II?SOTA C�JIlPJr1'Y OF ileIJt'Ii:Plr: ,l Deg c l rit , e - nu > No`:e off P)8-'1 era!(I 7 . Portnoy Project ) $2 , 750 , 000 POR VALUE, R :CEIVED the CITY OF EDEN PRAIRIE, Ilennepi.n County, Minnesota ( the "Cit-y" ) hereby promises to ,day The First National i3an'r_ of Saint Piaui , in Saint Paul , Minnesota, its successors or re:3isterecl assigns ( the "Lender" ) , solely from the source and in tale manner hereinafter provided, the principal stem of Two Million Soven Hundred and fifty Thousand AND No/100 DOLLARS ( $2, 750 , 000 ) , with interest thereon at the rate of �_ _ percent (ti{ % ) per annum or at such higher or lower rate as hereinafter pro 71L-—1 iC1 paragraphs 1 (d) and ( e ) �r hereof, in a rly coin or curre_ncy whic,(7 at the time or times of payment_ is legal t,,nder for the payment oC= public or private debts in t(1e? T_Tnitec? States of t'1merlc"t, In accordance, with the terins hereinafter set forth . 1 . (a) From and after the date hereof_ and until the "Amortizati.on Date" ( the first day of the calendar month next succeeding completion of the Project in accordance with tine Construction Loan Agreement hereinafter referred to, but in any event no later than Januar,r 31 , 1986 unless extended by the Lender) , interest only shall be paid. Interest shrill accrue from and after the date hereof and shall be payable on the first day of the calendar month next succeeding the date upon which the first advance is made, and on the first day of each and every month thereafter . (b) On the date hereof, as and for additional interest for the period from the date hereof through December 31 , 1984 the sum of $55 , 000 . 00 ; (c) From and after the Amortization Date, this Note, shall be amortized and paid in equal consecutive blended monthly installments of $ a. (A�, (�j� principal and accrued interest, payable on the fi st day of each month commencing on the first day of the calendar month next succeeding the Amortization Date and continuing until October 1 , 1994 , at which time, unless called by Lender pursuant to paragraph 1 ( e ) t1i1C� Not.(_, S 11 j7_1 j I I I A mil e(I-i-I'll L - - t�- S -' ")a's, p:�, L an�] acc: it�tc- ,'.- until 1, 1999, at Which t i 1-C.,e "_I"­.I'-'-2-'..' Cal ID, to :)11-1 1 ( e 01-Itstian,Hrig principa-I of-' tl'i.s be -Ide it-, equal conseci-i -_.-Lv - bIe principal ai-ir inter,2s-L based year anti ()ct�)bt�r 1 , 200-'r at �ih4ch called b'/ pursuant to para�ji-z-q)ii 1 ( e) - �i,ere­of, t1le tl'on pri-t-icipal ball-ince ,-Dj-Jr7 this 104- siial'L '.)e amortize=l an(I 1pai(A_ iri equal corisecL.ative iDle-cidecl of principal and accuue(A it-it-eres !I based L.Ij.)(DI-, LI thin-Ly ye a-­:oi:-tizaIr-- ion until OctoL)ec I. , 20(J9, a'-- wh I c t 4 (2alloc" 1:,y Lender pUrSLIant- to pF-i apl-i rac jrz e) hereof, tiie t_`I:oi-_ 4 pritm ipaL balance of this Note shall_ be- an 1-d in equal co'nse-cutLve blended montlily iiista_11.1',Ieits of principal and accrueci intere-st based upon -i tll-ii_rt- y ye�',_z until_ October 1 , 2U14 (the " J_"irial. i.Iaturii- a t; _jr wllich tj,�I e till' t 'jen P :ir-ici.pal B a I a r-ice plus '_In y LIII-)a'iA accrlt��cl interest hereon shall be paid in full . Pj_iv.,.'Lenl: s shall be applied first to interest (due on the Flrincinal Bale-inco-- and thereafter to re,lucLiorl of the Pril-ici- pal- BaIance. ki ) ( i "F.n the event that receives a a -ia f t( thi:-� interc_�st 1 --abilitv (. -, hereii --r defined) rate on tlliis Note shai-I b i_, increase:l , r,�-_troaCt_i.vel:,' eff-eCtiv,a- from and zii=',=,r the Date of Taxability tJ the follo,,.%ring int'3rest rcit-es _-'or the peri.oc_! indicated : Period Interest Rate prate o-ff Ta:ia1bili-ty t1irough Base Rate as of 30, the date lit:-)reof. October 1 , 1. 994 t1hroi-igh Base Rate on S e LD t r 30, Octoloer 1 , 1994 October 1 , 1, 999 through Rase Rate on S(---p t e i i i b e r 30, 2004 October 1 , 1999 October 1 , 2004 through Base Rate on September 30, 2009 October 1. , 2004 October 1 , 2009 until Base Rate on v3aid in full October 1 , 2009 Unless coijti,?st.-2(_I in accordance with parracjraph 1 ( d) ( iii.) below, the City shall immediately upon demancl pay to the Lender and to each prior holder affected by such Determination of Taxability 2 i f3 rl;-i:1(D 1_1 1 t J, i r(3 LS t -j r e _?LY 1 su(::'ii i r 41 �_3 T L I-i L..,, L 0 t I! i; t _ Ol" l:?'J:..,'n,_ ie::C( f. 1:� t1i:-3 0 1: 1 L e S t:.U1 Y <0:2C21711C.-i to th,' _,_!Iy Prior ho s 1-a I I 1, 1 I(J S,-1 i d e f ID (:such <3 1)1 i,:::a ti on t-I A e in -fuLl thf_-_ f thi S j, t Fol: the tc-n-,i " Uast_- Rat---I" sli::illl Ills` 2i7 - jr-apil 7 liereo `) on Lll1-2 :)lu,; two arallum. T�-,.-_ r3a:_Zc_? 7"'atc as nercocL pe.r ff t!1(2 (1 F1 f,' 11 -_2 S J- i i 'Nle terms "Det.ermL!iatiori Ta:,�ilDility" and "N,-_)tiLce c_-;f Ta.--ablility" as s1,-i;_-,1L li.av,2 the a'sc-r-i-iDed t,-) such tor.iis iL-1 4 . 07 of TF;ol­n A1jr(_'(Di,,,.,7_,nt, c!,7tL,(-_--d the he�-e-Olff- "T­DZ�111 r4-yret2— th,,' and (se ra.lcl A. ( iii ) Th,,-3 Lencler s1lal-1. give rlotic.e, as Soon any but i'll a eve,-.t be fore the riylllt '11--o zipr)eal sLic1h Notice oc Tll:,a _) Llity has tll,e Bcrrower -iii(I the City of its receLi)!-_ of an- Notice of Taxability arldl purm-Lit the litigate or ap,:)eal tho sam.e at Dorrc_)w(-_, r-' s In the event any such contest, litiya-tion or appeal is urlclertal,:en, the increase--i interest pral.7ideri in para- graph 1 ( d) ( i) snail , rit.,:.7ertheless, be rpayable to the Lender and , to any pT.-_1_or and s'nall be h I eld by the in an interest bear ;_-Liq (_,scrow a("r--ount. j(-D L71 CD S,�l Ch (2 G-1-I t,0.13 t i ti f i i sQ�-3 LL_ ( ri 0 r Za pj)E-,j I pI:UV1(]reCl - 4-1-1�-� Borrower si-laLL indel-Linify and hold t',ja I- - _ harmless the Lericle-r and -_'ach such prior holder from any and all pe n.-1 I L i e , int-rest oc other liabilities w1iic'n Learider and eacl. sucil prior holcler mia- v incur on accomit- oE such contest, 1.i t- ig at i o i-i or a 1?1--)e a, I . I f the final disposition of Such Contest is such tiiat interest on this Note is determined to lbe exa.,lot fraiLi Laxatiori, Borro,,qer shall 1)e erititle(l t:o rec ve a.11 sums it deposJ ted in S�7_-,icl escrow account. ( including , but not 1-imited to, rill interest, earnings thereori) , otherwise the T,ender and etch such prior holder ( as the ciase may be) shall be entitled to Eill suins in the escr(--)w account ( iriclLdinq, but not limite('I to, all interest earnings thereon) . ( e ) Notwithstanding the foregoing, on Octo- ber 1 , 1994 , Oct(-,)I:)er 1 , 1999, October 1 , 2004, October 1 , 20C9 ( hereinafter each of which dates will. be referred to as a "Call Diate" ) , the Lender shall, have the right to demand payment of the entire Principal Balance plus accrued interest thereon by giving City and Borrower at least ninety (90 ) days prior written notice ( such notice to be given in the manner specified by Section 7 .01 of the Loan Agreei,,ient) of Len-der ' s intent to demand paymerit of the Mote on the Call Date. if the Lender doer not. exercise its right to demand tDaymerit of this Note pursuant to this paragraph I ( e) , on each Call Data the rate of interest charged hereon shall be changed to the Designated 3 L-S 17, _:7 U, I",a t- T_at,-, E r 01 it '71,1 --1 i- the e, Ca 1, T I S -j 4 t J 1 1. t tD t(D17)(--.I: I- 2000 Cr111. until_ this Notf_ i.'s pcIL"], it full . For y I C_-r(2 o ff r:I i e si e sr,L Al 1 C, L�10 R,,_ ff( rc�l;­t­ cl) `',-If t,_"1 1 'bus i rlC Ss - le 1"(21 SSIOC to t1 J to C!A,_' Da 0 'D S I.,,C[I i 311 I R .,12c-� TP a "A:--s i I-)e t 11 i i ir:)i i lb I c I �.i.nn c)�i r..c �)v L e n(] L-,r For tne "R�:?ferf-_llcc sll_ill the rate jDU,)1_ L21V a,.,3 SuC11-1 'b'I" lending r a t e s i_-he to at-er borr-viers mall be at, above or 1:1"(2 a,_l to . 2 . In ainv ev,-_-._nr_, the i:,- %,r1erit.,�3 Ii ereul,.clo- sl-liall '::�e s ul t-�1 L o iii s f: (_iue, as suclh p r i t I a I-I ati,_i to pav any pre_p c i yf-ii e r i I_- p e t at I L I a t 11 7 1- U.-'On or- I ri te r e s t sI-a1.1. be c oj i 11)u L _1 on of: a 360 day ycar, but cl-larded C_)f OF­rs C.-,jCL-Dse(_j. ri_ncipai ar,_cl interest and prepla.ynlent penalty due i y a!:)1-e 7t. t1i-,(' r:-)r i[i a I of IL is e, c D I e Len(.1,3z- , ur Cif. s�:(­t j ­a'y d e s r _)tier rA.-ac�e as the Lc-ri(lor r,, -.,ate in Wr S iSSU(- '-D� T, the City to provide furid.z-; f�Dr a projelct, as 1(3 4 S-uh(A v in Sr c L o n 4 4 . 0 2 , l, L i : s o n 1.a,- of ti-ic, acquisition of re-al e S cl 7,_ a 1 1 tho -) E cm office service building , L-1 f-1, n, (I r' _:-ic-i Li LY anC� re.Lc Le,_-1 iii,,proveri'Lent:� thereon, -1a n L to the aiicl this Note_ is further issued pursul-A,ni: to ,_Ind in full compliance with th..-� Constitution and laws the I io-- of �-'J_mriesotaj pzcrl-icuLarl_�y Chapter t 47 iff a ji) e r- 4 r( I U ti 0 n of the City CC-)Unc,il. (duly crl (�Ctfober 16 , 19f34 ( t.-Iie "Ress(.-A-ution" ) . 5 . T!a i ! Hotel i,,-; secure,;_l by c-ii Pledge Agreement of ev m (Iatc,_ herewith by tlie city to the lender ( tile "I.Dledge a StatuLory ;1,ssignment of Leas',s and i:.'ents, Security A:::ireement and Fixtur,z: ri-riancing StaLement, of d�_:tte hert;,.witn executed bv Borrower and Barbara JAL. Portnoy, Ills wife, cis mortcjago- , in favor of the Lender , as raortgagee ( the "mortgage" ) , and a Secur-ity Agreement of even date heretaitli executed by Borrower in favor of Lender ( the "Security Agreement" ) grantIng the Lender a secur-tty interest in a certain Collateral described ti-lerei-n . The proceeds of the 11ote shall be placed in the Construction Fund established Pursuant to the Resolution and that certain Construction Loan Agreement of eve.,i date by and among L(-r1der, City c- the v and Borrower ( the "­onsLruction Loan Ayreeinc:*_�ri,:" ) and the disburse-- 111ollf: of the of this Note from the Construction Fund is subject, to the terms and conditions of a Construction Loan Agreement . Pursuant to Section 8 of the Construction Loan 4 C- ij�,':1 :-5('(- — u r t v r- i c-)L 11 I -­i'c: o i. - T i i, C' tv f o r i t s e 'L f t.:3 u S11-) S (2, -1, pCeserltrRt 11 L 1 '2:'i --a r 11 C e of 11C1 ;--1 2_- Ln Ia t 11­ no Ic-i(2 t?_ e 11( L)ri Y D Lllrt.. CWII: (_C (fir (),L: 'ally sl_"Ojf�c't t,:) t'11e ('-j(Drt'j.aCJ0 Or t :L v ii L11 i- ::S f r e c u I l C C'I"tl 0 C L i'D n v;i t- 11 t 1-1 i S 'N 0 t e_ to thc' from n- r o t-11 v i s e i-,i o,:' E tl-ie date c--)r- diate!s or ainount 01- of z-.!)ovc-2 recited, cr the L,2ilder iiiay froi-Li L(D tL11C., 1-CD S(2 L'.!-!y part or parts (-)J- L!­`� propei:tv and t:) Morttggacje, tlie Secur-it"', or to from the with or vjitliott CC not as a result tiereof Llie interest is no iol­jr=.t: exeriipt from Fe feral taxation, tlla in r1r) event i-iiay the Final. Maturity D'ate be beyo-_­id t1j_irLv (30 ) years fro)-.,I the date hereof . In any Citv , subject to the Iii-Litati-or, of the City s Z , (,,,, sh,-_--ill , to tntz'.' e:,71cent periiiitted by law, coritiniie to be liable to pay the unpai,_" balance Of tlie inde'S.DL 2,1rie.SS C.Vjdence,:.' liereb-v as so ended, renewed or rr1cdifLHeo1 an(I riot withs taridin� any such releas(-' . 7. Tiais Not,:? ii[iay be prep_, id iti fi-ilL Or pai-_-t at any ZJ ' that- it: at thin tLipte of anv such �-1 C I 1_'(l 11.'Dt "U:), a J.-)replay;ilei-lt as .-1 01: acceleratictL of the Note ia.Ctei: tlhc-- C,C C I 011- a -i off I.Iel­ault, as clef fined 'Ln r-he [,call ret:�iii e?it, or a-3 I-A of the a-P D.F tht� proceeds Of J '. a Ily Or award as described in Section 5 OF ) F Yield is less t1la- 11 t1le Base Rat,_, (as clefi-ried in par,:.,grzipii l . d . ( i ) above) ori the nearer Of- tn(? Gill=@ hece(Df "llie inr)st rec(,?rill previol_,,s Call Date, the Rorru.vie-i- -will lj,�, _L to ;may in fL111 on tho date of the prepavir-,ent a prepay.-iient penalty cz--t1cullated as Eollows '. The- a, (')'u,I t c)f the I r d_11C 4L_ 'i)a L Balance so prepaid shcall be iiiul-ti.plie(l by ( a) the art(Dunt by villicl-I Base Rate exceeds the Government Yiel(l' de- teriiiined as of tli(--, prepayrnerlL date times ( b) a fraction, the nuinerator of which is the riuznber of days reiiiaiidn(j to the next Call Date and the denominator of which is 360 . resi-7.1ting product shall then be divided by the number of whole months then remaining to the next Call Date, yielding a quotient- ( the "Quotient The ariiount of the prepayment preiiiii.iiii shall be tile present value on the Prepayment Date hisiric a_-:i the (-discount factor tlie Goverrltnent Yield determined as of tne Pr(21-:>aviiient- Date ), of a streamof equal itiontlily in to the riuirib,?r of whole nit.-niths rer-iiainirlcj to tlie ilex - Call. Date, With the aMOUrIt of eFIC11 hypothetical lilontlily payment equal to the Quotient and with the first pay,'nerlL payable on Sikh Prepayment Date The term "Government 5 Yield" lmw�lls , an o E vile date of (hate rul klat Pal, QlU yield konverwol as macassory to th(�: e(_11 C oull" C I: on u . s I ry f-;ec-,-I ri ti.,:!s a:� piiiji of__ Y(3rk) 11av1ng a nuiturit ilcite- cic)s,: SL ) tlni2 nemot (Call. Wite . "U . S . Treasury n"e:'an's t r, - ti . ` :y bilLs arml notas and, - f laotne than 0 1 a k2l 15 S 1"c_! of U S securities is t(J 111rItUre at or about t11n next Call Date, thc-ti t(D e::Lent rec,(_nt j_ssue (late will. 1% chased as MW bElSiS for LI-C' yi(---IrI3 - the rore- tio prepayment penalty shall M, puyabbe. on any ipr'�ipayment ninet-',, (rj(j ) days t-0 a call lDate- f -tills - C_e e :E_­1 1,7�le mmit of prepaym,,:�nt_ a I is NO a;:)j-)1y any suc-1-. agiainst t1le oranium. if any, tholl ugrjjnst int(OX. EtSt an the Prink pal Halancc and finally Princil),al arilGLlrl I - -i - rt-. i( - -ii ,�3 umi( r f he Note pro rat,: to the re "ainil ulip�_ _d princi )all_ h�.'reon . I ii t,i e ev e ri t Of prepayment , tho mcnithly payments due Inerecon snall be recalcul-7-t--ec'l tat Uvj into acCO,ij,.­l-_ to provide- for a level ble_ncleil 7_.,n(_Drtizatian of the rwaahAng Princlpal Balance and accrue(! 1.rlterost 9 . As provi0ed in the. Resolution _-md subject to certain set forth there-i-r-i, this t,7,oto- is only transfarable upon Lhe books of the Clity at I"ne OfCicE? 0.1 the City Cjer,­: , lu,7 tl-le T,ender in or by Inis a'gell'n riuly autihorize,l im m. iting . at the Lena = ' s expenan, upon surretWer bereof togoLher with a written inst-ruracn-it (-).[ transf,�r sati- s- fac_,tory to the CLty Clark, duly ex(:-2cmuO:-1 by the Loncler or his duly agont . Upoil such tonsisfer the City Clelzk �Aiill note t1ne (IaLe o:_ r,-:1;istration a.,-,,-I trla,'ne acl'. address Of tho I I c w r e g_Lst-erocl 1,erula1': in Me zeclisty7ition blaL-i 1) (:)"%7 Tne City may dean and treat the persori in Wlnose name tlie Note L.s last registered upon the books of tl-ie City Wit-1-1 such regi!_-, trat-_i,,_-)ri noted c)1-1 tjj(' .-JS the VAIDE;OlUte OWnO_r liereoff, ,;liether or not overdue, for the purj)(:)se of receivirig payqmint of or on Idie account, of ME- Princij?al BaLzince, rede-nption price or interest and for all (:)tjl,E!r LID'ur.poses, anti aLl such payments so ma(-le to the Londer or quor-i his order shall be valid and effective to satisfy and discharge the liability Upol-, the j..jote to tj-jo:_ extent of the su.,-n or sums so paid, and the City shall not be affected by any notice to the contrary. 10 . of the agreements , conditions , covenants , provisions an(I stipulations contained in the Resolution, the Mortgage, the Security AgreeineriL, the Loan Agreement , the Pledge Agreement- and the Construction Loan Ayrec merit are Hereby macle a part of i`T<Dte to the extent and with the same fc)r-c,-- ilrid (effect_ as if they were fully set forth herein. N io t -t,Y aL-,(-! Co 0: 1 t V 'd i L I I i 1-1 th,') 0 1: F1 11',,7 con s ti_t,_, I::-ioi L or ,-i i L(D r 1. 1 i-ti 1-_a t i D not payaiDle frc;ln or a u,:-on t-nall L,I),-- I: s, lanci o r � t_ tot 2C ) U7 L i t v o t 11 e Ci ty r)r, t(-) th-I� e,­Lenf-_ p- i t b, I ix,-1 o 1- ally of itti officors , a"jer1i-_-,3 (:),- e i-ijp I(--,y,.:!e F, , an(l no hclder G ev,2r- have t1io_ ri,,I-i" to any o N' if I: 110 t:C.I.z I, C i t C 1 t! ote r -3 1D ow( ,D I-I t r,_-_�s t 1 D r 1Cr i- e r 1 f o r C. p u 1 n t r c-,c f a13t:i1.17cit a n y City, anti thi:�, il,Tot,-3 -,(De,3 naL C I lr;rJ, 0 _ a 0 2: i?q u i 111)(:31 ai­ r(D t" " ty - ftj-ie City to L)e rfarm t , the ac41 o - CJ. -m -I ancl Gthc--�­ IS Dr of the c-ove"'al -s f_)r(_)VL5 Lot liere.in ref`erre�.'L t-J:j shaLl i:(_ at aLl tines to t 11 e, avail.ai-Di"Lit-v oj� Or otijor for such Tozm Aqr,-lement, suff7icierit-1 to si-iaLl , for all of t-177-5 Note, b( CUn+ Lc3i1.1_rl'j and lb, cjj_ve*�-i FulL -Lorce and effect, -�I—w i "n s t a n,d anytli;­1-1�j Olse�� to the (__�,ontrary i s i',I<D t-e I ic ing 1. it j.53 that timr:, is of Lhe ess--3nce of this NO t(e T E: al i Tr_',,;-_n-,t <)f De f as t ii;­._t_ is define(-, j.ii Llie ID F) -1 M o r o_, tli�D St :Ltd C(DC1St1-.-UC t_. men't oZ t'll', shall. cDccur, tll,,en t_-',,,.e Lender shall ',-L: (jhi,_ an o�ption to decl_are th.e Balance, and accr;i,:',i III-Ifz! plu's <-in_y or servic-t,:� c'n-arge:- , sl-all b(_� a n(I S - 1 1; 1 ' piity,_-_,ble, 5ut colt-ly from avail-al, le ur-I'der t- Loan tho the bons truc- ticr-1 Loan a j 1 -, file Scr- yA( It Fa ii urc,� t o( at. illy' time sl-,all not Qonst-itute a of the right to exercise thQ same at- any subsecpuent time. I) The re"lle-dies of th,, Lc:'.ncler, as provideC! lierein and 1_:I t I I e 7110 r "-Ya 9(�, -,-1-1 e Security A g I:e C---I rt e,n t, t h e Lean Agreement, the Ple(lcje Agreement and the Construction Load 11,(jrecmient, are, not exclusive and shall he cumulative and concur-_,-( rit and may be pursued singly, successively or together, at tli(-3 sole discretion of the Lender, and may be exercised as often as occasion therefor shall occur; and the failure to exercise an,,/ such right or remedy shall- in no event be constru(-:d as a waiver or release thereof. 14 . They F,en,,Ier shall not be deemed, by any act of olilissior, or comm-Lssion, to have waived any of its rights or renieclies hereunder unless such waiver is in writing and signed by Lli(z2 Lender and, then only to the extent specifically set fortl-i in the writing . A waiver witli 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. -7 15 . This mote haS bOC!-) ie�jist.r_aticn Undr'Y.' f=atF or L'eJeral or oL'Tier SE3(2urltle 1 AWS, ` UrShciTlt to all C.x(_'ITl,:;tL_1L)i1 for ,,l_1CI1 issuance; aC'iC. the ;`iOte may not- {JE' _c 11f'c.1 or transferre-a 1.T1 "v;�"IOIE o_� �]c.rt, nor ICliay it "-icipatt;]Tl interest lit t,-Ie 4ote be ,rsl.ant tG any 1rttCl.L.FI ::LJn aC -2ITIeri , P_XCE�`7t lIl aCC01 d_iT1Cf3 `ri].} _1 317 3h 11CF1b1.E'. E :iEiilUt.L ]tl Ir':�I,1 .SL1C11 reciistrat--ion r(�2quirP_i11onts IT IS I1=:IZI i3Y C:EPTT_I'IED 2',—ND 2ECI'I'i;i) that all Con(iitloris, acts and tI11n(Js rc�,qu .red tG exist, hr-iZD Ori al-id be 1)t"'1:forllrY,1 I rL =`'cI(-ijt. t0 Or In the isSL1.-:�.nc( of this Note do exist, havr_• ha.p_Dened and have br-en perforlr,ed in r =_gul r and clue fold jss required :]y law. INWI'INr.S .: ^1 IL.I�liO� , the C.i �_v has cause, this No tE:. to bt� duly executed in its, naIli�? by the lilanLlr3l sign..- -:Ares of the Mayor and City 1Manager and h":s Caused the corporate seal to be affixed hereto, and has causc_d tIiis 110i_C to be dated CIT',17 0 F EDEN_ PRA.II.?IL, MINNE'SOTA t l� � 4 lag e=r 8 .1 T PROIT S -0 IINIS AS R T'lle ownership oC- the uj-p:jj.ca Princi-,-)al. Balance of this Niote and the iriteres !-- accruing thereon is registc-2re(I on tlll�'- )--F Eden -Iame -- t holde— j,, of the City T, ( an Prairie in th,:-� i oil- the I last note,", belo%-i. Date of Namo and aciciress Signature of T-R.e a i s t ra,t 0 n Reqj.sterecl Owner City Nanjqj The Fi-csf-- National Bank of Saint Paul 332 Stroet 1984 St. Paul , Minnesotca 55101