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HomeMy WebLinkAboutResolution - 84-307 - Final Approval MIDB's Edenvale II Apartments $2,750,000 - RESOLUTION NO. A RESOLUTION OF THE CITY OF EDEN PRAIRIE, MINNESOTA, AUTHORIZING THE ISSUANCE OF THE $2,750,000 HOUSING DEVELOPMENT REVENUE NOTE (EDEN INVESTMENTS PARTNERSHIP PROJECT), SERIES 1984, OF THE CITY OF EDEN PRAIRIE, MINNESOTA, WHICH NOTE AND THE INTEREST THEREON SHALL BE PAYABLE SOLELY FROM THE REVENUES PLEDGED THERETO; PRESCRIBING. THE FORM OF AND AUTHORIZING THE EXECUTION OF A LOAN AGREEMENT AND A PLEDGE AGREEMENT; PRESCRIBING THE FORM OF AND AUTHORIZING THE EXECUTION OF A DISBURSING AGREEMENT; AUTHORIZING THE EXECUTION AND SALE OF THE NOTE AND DIRECTING DELIVERY THEREOF; PRESCRIBING THE FORM OF AND AUTHORIZING THE EXECUTION OF A REGULATORY AGREEMENT; AUTHORIZING THE FORMS OF A COMBINATION MORTGAGE, SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT, AN ASSIGNMENT OF LEASES AND RENTS, AND A DECLARATION OF RESTRICTIVE COVENANTS; AND PROVIDING FOR THE SECURITY, RIGHTS AND REMEDIES OF THE IfOLDERS OF SAID REVENUE NOTE. WHEREAS, the City of Eden Prairie, Minnesota (the "City"), is duly organized as a statutory city under and pursuant to the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to the laws of the State of Minnesota, particularly, Minnesota Statutes, Chapter 462C, as amended (the "Act"), the City is authorized to carry out the public purposes described therein and contemplated thereby by issuing its revenue bonds to defray, in whole or in part, the development costs of a multifamily rental housing development, and by entering into any agreements made in connection therewith and pledging them as security for the payment of the principal of and interest on any such revenue bonds; and WHEREAS, the City Council (the "Council") of the City has developed the Housing Plan for Local Housing Bonds for the City (the "Housing Plan") in compliance with the Act; and WHEREAS, the Housing Plan was adopted by the Council on February 2, 1982, at a public hearing held at Eden Prairie City Hall; and WHEREAS, the Acts define the term "multifamily housing development" to include a housing development in which at least 20 percent of the dwelling units are held for occupancy by families or individuals with adjusted gross incomes not in excess of 80% of the median family income estimated by the United States Department of Housing and Urban Development for the Minneapolis-St. Paul area; l and 1 WHEREAS, the City and representatives of Eden Investments Partnership, a Minnesota general partnership (the "Developer"), have prepared a program for the issuance of bonds by the City to make a loan to the Developer to finance the acquisition and construction of a multifamily rental housing facility (the "Program"), located northeast of the intersection of Mitchell Road and Valley View Road, to the east of the Edenvale Apartments, in the City, in accordance with the Acts and the requirements of the Local Bond Program Procedural Guide for the Submission of Local Housing Programs to the Minnesota Housing Finance Agency; and WHEREAS, the City is authorized by the Act to make a loan or loans for the acquisition and preparation of a site and the construction of a new development thereon; and WHEREAS, Minnesota Statutes, Section 462C.04, Subdivision 2 requires that a public hearing shall be held on each program after one publication of notice in a newspaper circulating generally in the City, at least 15 days before the hearing; and WHEREAS, a public hearing was held on the Program on July 17, 1984, by the Counc it of the City after publication of notice thereof on June 26, 1984, in the Minneapolis Star and Tribune; and WHEREAS, Minnesota Statutes, Section 462C.04, Subdivision 2, further requires that each program shall be submitted to the Minnesota Housing Finance s Agency (the "MHFA") for review and approval; and WHEREAS, the Program was approved by the MHFA at their regularly scheduled meeting held on August 23, 1984; and WHEREAS, pursuant to the Act and the Loan Agreement, as hereinafter defined, the City proposes to undertake the Program, and for the financing thereof, to authorize, issue and sell its Housing Development Revenue Note (Eden Investments Partnership Project), Series 1984 (the "Note"), in the aggregate principal amount of $2,750,000 payable from the revenues of the Program; and WHEREAS, the City proposes to enter into a Loan Agreement, a Pledge Agreement, a Disbursing Agreement and a Regulatory Agreement (all as hereinafter defined) in connection with the issuance, sale and delivery of the Note; and WHEREAS, no covenant, provision or agreement of the City herein or in the Note or in any other document executed by the City in connection with the issuance, sale and delivery of the Note, or any obligation herein or therein imposed upon the City or breach thereof, shall give rise to a pecuniary liability of the City or a charge a;ainst its general credit or taxing powers or shall obligate the City financially in any way except with respect to the Loan Agreement and the application of revenues therefrom and the proceeds of the Note. No failure of the City to comply with any term, condition, covenant or agreement therein shall subject the City to liability for any claim for damages, costs or other financial or 2 pecuniary charges except to the extent that the same can be paid or recovered from the Loan Agreement or revenues therefrom or proceeds of the Note. No execution on any claim, demand, cause of action or judgment shall be levied upon or collected from the general credit, general funds or taxing powers of the City. In making the agreements, provisions and covenants set forth herein, the City has not obligated itself with respect to the Loan Agreement and the application of revenues thereunder as provided therein. The Note consitutes a special obligation of the City, payable solely from the revenues pledged to the payment thereof pursuant to the Loan Agreement and this Resolution, and does not now and shall never constitute an indebtedness or a loan of the credit of the City, the State of Minneosta or any political subdivision thereof or a charge against general taxing powers within the meaning of any constitutional or statutory provision whatsoever. The City shall incur no pecuniary liability hereunder and shall not be liable for any expenses related hereto, all of which the Borrower agrees to pay pursuant to the Loan Agreement. The liability of the City is further restricted as provided in Section 474.10 of the Act. WHEREAS, the financing of the Project, the issuance and sale of the Note, the execution and delivery of the Loan Agreement, the Pledge Agreement, the Regulatory Agreement, the Disbursing Agreement, and the performance of all covenants and agreements of the City contained in the Loan Agreement, the Pledge Agreement, the Disbursing Agreement, and the Regulatory Agreement are authorized by the Act. All other acts and things required under the Constitution and the laws of the State of Minnesota to be done, to exist or to be performed to make the Note, the Loan Agreement, the Pledge Agreement, the Disbursing Agreement, and the Regulatory Agreement when executed and delivered as therein and herein provided, valid and binding obligations of the City enforceable in accordance with their terms, have been done, do exist and have been performed as so required; and WHEREAS, the issuance of the Note and the execution and delivery of the Loan Agreement, Pledge Agreement, Disbursing Agreement, and Regulatory Agreement will not conflict with or constitute a breach of, or a default under, any existing law or 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 Lonn Agreement, Pledge Agreement, Disbursing Agreement, Regulatory Agreement, and Note by reason of the existence of any facts contrary to this finding; and WHEREAS, 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, deivery or validity of the Loan Agreement, the Pledge Agreement, the Regulatory Agreement, or the Disbursing 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 Developer, 3 NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY: Section 1. The Council of the City acknowledges, finds, determines, and declares that the preservation of the quality of life in the City is dependent upon the maintenance, provision, and preservation of an adequate housing stock, that accomplishing this is a public purpose, and that many would-be providers of housing units in the City are either unable to afford mortgage credit at present market rates of interest or are unable to obtain mortgage credit because the mortgage credit market is severely restricted. Section 2, The Council of the City further finds, determines, and declares that the purpose of the Program is to issue the Note, the proceeds of which will be loaned to the Developer pursuant to the Loan Agreement to finance the acquisition and construction of a multifamily rental housing development located in the City, which will be affordable to persons and families of low and moderate income. Section 3. That for the purpose of financing the Program there is hereby authorized the issuance of the $2,750,000 Housing Development Revenue Note (Eden Investments Partnership Project), Series 1984. The Note shall bear interest at such rate, shall be dated, shall mature, shall be subject to prepayment prior to maturity, shall be in such form and shall have such other details and provisions as are prescribed by the form of the Note attached hereto as "Exhibit All with such insertions, additions or changes as may be necessary in connection therewith. Section 4. That the Note shall be a special obligation of the City payable solely from the revenues of the Program. The Council of the City hereby authorize and direct the Mayor and the City Clerk of the City (the "Mayor" and the "City Clerk") to execute the Note under the corporate seal of the City and do hereby authorize and direct the execution of the Note and the delivery thereof to the initial purchaser of the Note in accordance with the terms and conditions, covenants, rights, obligations, duties and agreements of the City as set forth therein and in this resolution. All of the provisions of the Note, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Note shall be substantially in the form on file with the City, which is hereby approved, with such necessary and appropriate variations, omissions and insertions as do not change the substance thereof, or as the Mayor, in his discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. Section 5. That the Mayor and the City Clerk are hereby authorized and directed to execute, under the corporate seal of the City, the Loan Agreement (the "Loan Agreement") by and between the City and the Developer. Ail of the provisions of the Loan agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Loan Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not change the substance thereof, or as the Mayor, in his discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. 4 Section: 6. That the Mayor and the City Clerk are hereby authorized Rnd directed to execute, under the corporate seal of the City, the Pledge Agreement (the "Pledge Agreement") between the City and First National Bank of Minneapolis (the "Lender"). All of the provisions of the Pledge Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Pledge Agreement shall be substantially in the form on file with the City which is hereby approved, with such ommissions and insertions as do not change the substance thereof, or as the Mayor, in his discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. Section 7. That the Mayor and the City Clerk are hereby authorized and directed to execute, under the corporate seal of the City, the Disbursing Agreement (the "Disbursing Agreement") between and among the City, the Developer, the Lender and Title Insurance Company of Minnesota. All of the provisions of the Disbursing Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent a� if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Disbursing Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not change the substance thereof or as the Mayor, in his discretion, shall determine, and the execution thereof by the Mayor shall be conclusive evidence of such determination. Section 8. That the Mayor and the City Clerk are hereby authorized and directed to execute, under the corporate seal of the City, the Regulatory Agreement (the "Regulatory Agreement") between and among the City, the ' Developer and the Lender. All of the provisions of the Regulatory Agreement, when executed and delivered as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and effect from the date of execution and delivery thereof. The Regulatory Agreement shall be substantially in the form on file with the City which is hereby approved, with such omissions and insertions as do not change the substance thereof, or as the Mayor, in his discretion, shall determine, and the execution thereof by the 'Mayor shall be conclusive evidence of such determination. Section 9. That all covenants, stipulations, obligations a•Zd agreements of the City c— ontalried in this resolution and contained in the Loan Agreement, the Pledge Agreement, the Disbursing Agreement, the Regulatory Agreement and all certificates of the City shall be deemed to be the covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the City. Except as otherwise provided in this resolution, all rights, powers and privileges conferred and duties and liabilities imposed upon the City or the Council thereof by the provisions of this resolution or of the Loan Agreement, the Pledge Agreement, the Disbursing Agreement or the Regulatory Agreement shall be exercised or performed by the City or by the Council, officers, board, body or agency as may be required or authorized by lave to exercise such powers and to perform such duties. 5 No covenant, stipulation, obligation or agreement herein contained or (contained in the Loan Agreement, the Pledge Agreement, the Disbursing Agreement or the Regulatory Agreement shall be deemed to be a covenant, stipulation, obligation or agreement of the Council, or any officer, agent or employee of the City in that person's individual capacity, and neither the Council of the City nor any officer executing the Note shall be liable personally on the Note or be subject to any personal liability or accountability by reason of the issuance thereof. Section 10. That except as herein otherwise expressly provided, nothing in this Resolution or in the Loan Agreement, the Pledge Agreement, the Disbursing Agreement or the Regulatory Agreement expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation other than the respective parties thereto, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provision hereof or of the Loan Agreement, the Pledge Agreement, the Disbursing Agreement or the Regulatory Agreement of any provision thereof; this resolution, the Loan Agreement, the Pledge Agreement, the Disbursing Agreement or the Regulatory Agreement and all of their provisions being intended to be and being for the sole and exclusive benefit of the parties there to. Section 11. That in case any one or more of the provisions of this resolution, or of the aforementioned documents, or of the Note issued hereunder shall for any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, or of the aforementionc-d docu rnents, or of the dote, but this resolution, the aforementioned documents, and the Note shall be construed and endorsed as if such illegal or invalid provision had not been contained therein. Section 1.2. That all acts, conditions and things required by the laws of the State of Minnesota, relating to the adoption of this resolution, to the issuance of the Note and to the execution of the Loan Agreement, the Pledge Agreement, the Disbursing Agreement and the Regulatory Agreement to happen, exist and be performed precedent to and in the enactment of this resolution, and precedent to the issuance of the Note and precedent to the execution of the Loan Agreement, the Pledge Agreement, the Disbursing Agreement and the Regulatory Agreement have happened, exist and have been performed as so required by law. Section 13. That the Council, officers of the City, attorneys, engineers and other agents or employees of the City are hereby authorized to do all acts and things required of there by or in connection with this resolution and the aforementioned documents for the full, punctual and complete performance of all the terms, covenants and agreements contained in the Note, the agreements referred to above and this resolution. Section 14. The Mayor and City Clerk of the City are authorized and directed to execute and deliver any and all certificates, agreements or other documents which sire required by the Loan Agreement, the Pledge Agreement, the Disbursing Agreement or the Regulatory Agreement, or any ether certificates of documents which are deemed necessary by bond counsel to evidence the validity or enforceability of the Note or the documents referred to in this resolution, or to evidence compliance with Section 102(b)(4)(A) or Section 103(c) of the Internal 6 Revenue Code, as amended; and all such agreements, certifications or representations when made shall be deemed to be agreements, certifications or representations, as the case may be, of the City. Section 15. That this resolution shall be in full force and effect from and after its passage. PASSED AND APPROVED this day of 1984. (SEAL) CITY OF /PRAIRIFfNf�TNESQTA lei /Mayor ATTEST: City Clerk 7 UNITED STATES OF A MERICA STATE OF MINNESOTA CITY OF EDEN PRAIRIE Housing Development Revenue Note (Eden Investments Partnership Project) Series 1984 R-1 $2,750,000 FOR VALUE RECEIVED the City of Eden Prairie, Minnesota (the "City"), hereby promises to pay to the order of First National Bank of Minneapolis, a national banking association, (the "Lender"), or registered assign (the "Holder"), solely from the source and in the manner hereinafter provided, the principal sum of Two '.Million Seven Hundred and Fifty Thousand Dollars ($2,750,000), or so much thereof as remains unpaid from time to time (the "Principal Balance"), with interest on the unpaid Principal Balance at the rates set forth in paragraph 1(a) hereof (the "Tax-Exempt Rates") or at the higher rate specified in paragraph 1(b) hereof (the 'Taxable Rate") upon a Determination of Taxability, as hereinafter defined, 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, and in accordance with the terms hereinafter set forth. 1. This Note shall bear interest and be payable as follows: (a) W Interest shall accrue on the unpaid principal balance of. this Note from and after the date of this Note to and including the first Call Date (ace hereinafter defined) at the following Tax-Exempt Rates: (A) From the date of this Note to and including November 1, 1985 at the. rate of 14 1/8% per annum; and (B) From and after November 1, 1985 to and including November 21, 1994 at the rate of 11 1/8% per annum. 00 Interest shall accrue on the unpaid principal balance of this Note from and after each Call Date (commencing with the first Call Date) to and including the earlier of the next succeeding Cali Date or the Final Maturity Date (as hereinafter defined) at a Tax-Exempt Rate Equal to the Adjusted Rate (as hereinafter defined) determined as of the Call Date which begins each such accrual period. (iii) Interest only at the Tax-Exempt Rate specified in paragraph 1(a)(i) hereof shall be payable on December 1, 1984 and on the first day of each month thereafter to and including November 1, 1989. 1 (iv) Commencing on December 1, 1989 and on the first day of each calendar month thereafter, the Principal Balance and interest thereon shall be paid in equal monthly installments in the amount necessary to amortize the Principal Balance over the remaining term of the Note to the Final Maturity Date plus five (5) years. The amount of the monthly installments due hereunder shall be increased or decreased on each Call Date or any date on which there is an adjustment in interest rate due to a Determination of Taxability to reflect any adjustments to the rate of interest borne by this Note pursuant to the terms hereof. (v) The entire unpaid principal balance hereof, together with all accrued but unpaid interest thereon, and all other indebtedness due hereunder, shall be due and payable on the Final Maturity Date. (b) W In the event that the interest on this Note shall become subject to federal income taxation pursuant to a Determination of Taxability (as hereinafter defined), the interest rate on `:his Note shall be increased, retroactively effective frorn and after the Date of Taxability (as hereinafter defined) to a Taxable Rate equal to the Tax Exempt Rate plus six percent (6%) per annum. The City shall immediately upon demand pay to the Holder and to each prior Holder affected by such Determination of Taxability an amount equal to the amount by which the interest accrued retroactively at the Taxable Rate from the Date of Taxability to the date of payment exceeds the amount of interest actually accrued and paid to the Holder and any such prior Holder during said period. Such obligation of the City shall survive the payment in full of the principal amount of this Note. 00 The Holder shall permit the Borrower (as hereinafter defined) to contest, litigate or appeal any Determination of Taxability at the Borrower's sole expense, provided that (A) the Holder is provided with an opinion of nationally recognized bond counsel acceptable to the Holder and the Borrower that there is a meretorious basis for such contest or appeal and that there is a reasonable chance of success, (B) the Borrower institutes such contest or appeal promptly and proceeds with due diligence to a final disposition thereof at the earliest possible date, and (C) the increased interest provided in paragraph 1(b)(i) hereof shall, nevertheless, be payable to the lIolder and shall be held by the Holder in escrow (without interest thereon) pending final disposition of such contest, litigation or appeal, at which time such deposit and the earnings thereon shall either be paid to the Borruwer, if successful, or, if not successful, shall be retained by the Holder; provided that the Borrower shall indemnify and hold harmless the Holder and each prior Holder from any and all penalties, interest or other liabilities which they may incur on account of such contest, litigation or appeal. (c) As used herein, the following terms have the following meanings: W "Adjusted Rate" means, as of the date of reference, a rate per annum which equals one percent (1%) plus the average yield to 2 maturity stated in the "20-Bond (G.O. Bond) Index" appearing in The Bond BUy2r for each of the four weeks prior to such date of reference (rounded to the nearest one-tenth of one percent) or if The Bond Buyer or the '120-Bond (G.O. Bond) Index" is no longer published, a rate which equals one percent (1.00%) plus the closing yield to maturity on such date of reference of United States Treasury Bonds maturing on the earlier of the next succeeding Call Date or the Final tMaturity Date. (ii) "Assignment of Leases" means the Assignment of Leases and Rents, dated the date hereof, from the Borrower to the Lender. (iii) "Borrower" rneans Eden Investments Partnership, a Minnesota general partnership, and its successors and assigns permitted under the Loan Agreement. (iv) "Call Dates" mean November 21, 1994, November 21, 1999, November 21, 2004, and November 21, 2009. (v) "Date of Taxability" means that time, as specified in or required by the notice of deficiency, ruling proceedings, action or statutory change referred to in the definition of Determination of Taxability herein, as of which the interest payable on the Note becomes includable in the gross income of the Holder of the Note. (vi) °'Determination of Taxability" has the definition given in Section 3.05 of the Loan Agreement. i (vii) "Disbursing Agreement" means the Disbursing Agreement, dated the date hereof, between and among the Borrower, the City, the Lender and Title Insurance Company of Yliruiesota. (viii) "Final Maturity Date" means November 21, 2014. (ix) "Loan Agreement" means the Loan Agreement, dated the date hereof, between the City and the Borrower. (x) "Mortgage" means the Combination Mortgage, Security :agreement and Fixture Financing Statement, dated the date hereof, from the Borrower, as mortgagor, to the Lender, as mortgagee. 2. Interest shall be computed on the basis of the actual number of days elapsed and a year of 360 days. 3. Principal and interest and any penalty or premium due hereunder shall be payable at the principal office of the Holder hereof, or at such other place as the Holder may designate in writing. 4. This Note is issued by the City to provide funds for a project, consisting of the acquisition of land and construction of a new development 3 consisting of seventy (70) rental units, under the Loan Agreement, of even date herewith between the City and the Borrower, and this Note is further issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Chapter 462C and pursuant to Preliminary Resolution No. 84-178 of the City adopted July 17, 1984, and pursuant to Resolution No. of the City duly adopted on November 20, 1984 (the "Resolution"). 5. This Note is secured by the Pledge Agreement by the City to the Lender, by the Mortgage, and by the Assignment of Leases. The disbursement of the proceeds of the Note is subject to the terms and conditions of the Disbursing Agreement. 6. Until the Final Maturity Date, the Note shall be subject to prepayment as follows: (i) Prepayment in full or in increments of $100,000, at the option of the Borrower on behalf of the City, on the first day of any month upon at least thirty (30) days' prior written notice to the Lender. (ii) Prepayment in full,--at the option of the Lender, after a Determination of Taxability, upon at least thirty (30) days' prior written notice to the Borrower and the City. r (iii) Prepayment in full or in part, at the option of the Lender, from any insurance proceeds or condemnation awards resulting from the damage, destruction or condemnation of the Project, subject to the terms of the ;Mortgage. (iv) Prepayment in full, at the option of the Lender, in the event that Borrower sells, transfers, conveys or assigns all or any part of or interest in the Project other than a sale, transfer, conveyance, or assignment permitted by the terrns of the Loan Agreement, without obtaining the prior written approval of the Lender, or in the event of default resulting in acceleration of the Note or any related loan docu ments. (v) Prepayment in full, at the direction of the Lender at its option, on any Call Date, upon at least thirty (30) days prior written notice to the Borrower and the City. (vi) Prepayment in full, at the option of the Borrower, on any Call Date, upon at least thirty (30) days prior written notice to the Lender and the City. (vii) Prepayment in part, to the extent of excess moneys in the Construction Fund on the Completion Date in accordance with Section 2.01(d) of the Disbursing Agreement. f Prepayment on a Call Date in accordance with the notice requirements hereof shall be without premium or penalty. Any prepayment or acceleration occurring on a date other than a Call Date shall be paid with a premium equal to 4 one and one-half percent (1-1/2%) of the principal amount being prepaid. In addition, if, on the date of any such prepayment or acceleration, the yield on U.S. Treasury securities (as published by the Federal Reserve Bank of New York) having a maturity date closest to the next Call Date (the "Government Yield"), as determined by the Holder as of the date of prepayment or acceleration, is less than two and one-half percent in excess of the interest rate then payable hereon, the Borrower shall pay a premium calculated as follows: (a) The amount of principal so prepaid shall be multiplied by M the amount by which the sum of two and one-half percent plus the interest rate then payable hereon exceeds the Government Yield as of the date of prepayment or acceleration, times (ii) a fraction, the numerator of which is the number of days remaining to the next Call Date and the denominator of which is 360. (b) The resulting product shall then be divided by the number of whole months then remaining to the next Cali Date, yielding a quotient (the "Quotient"). (c) The amount of the prepayment premium payable under this paragraph shall be the present value; on the date of prepayment or acceleration (using the Government Yield as of the date of prepayment or acceleration as the discount factor) of a stream of equal month payments in number equal to the number of whole months remaining to the next Call Date, with the amount of each such hypothetical monthly payment equal to *.he Quotient and with the first payment payable on the date of prepayment or acceleration. 7. All partial prepayments shall be applied to installments of the Principal Balance in inverse order of maturity and shall not reduce the amount of the payments due pursuant to paragraph 1 hereof, which payments shall continue until the entire Principal. Balance has been paid. 8. If, as a result of a change in any law or regulation or interpretation thereof after the date of this Note, there is imposed on the Lender, or the Lender is made subject to, Any reserve, special deposit, minimum income tax, loss of income tax deduction or other requirement, condition or consequence the result of which is to materially increase the cost to the Lender of purchasing or carrying the Note, as determined by the Lender, the City shall pay to the Lender such additional arnounts, as determined by the Lender, as will compensate the Lender for such increased costs. 9. As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the City at the office of the Finance Officer for the City, by the Holder hereof in person or by his attorney duly authorized in writing, at the Holder's expense, upon surrender hereof together with a written instrument of transfer satisfactory to the Finance Officer, duly executed by the Holder or his duly authorized attorney. Upon such transfer the Finance Officer will note the date of registration and the name and address of the new registered Holder 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 City, with such registration noted on the Note, as the absolute owner hereof, whether or riot overdue, for the purpose of receiving payment of or on account of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Holder or upon his order shall be valid and effectual 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. 4, 5 10. All of the agreements, conditions, covenants, provisions and stipula- tions contained in the Resolution, Loan Agreement, Disbursing Agreement, and any other related documents are hereby made a part of this Rote to the same extent and with the same force and effect as if they were fully set forth herein. 11. This Note and interest thereon and any penalty or premium or other charge hereunder, however designated, are payable solely from the revenues and proceeds derived from the 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 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, the interest thereon, or penalty, premium, or other charge 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. 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. z 12. It is agreed that time is of the essence of this Note. In the event of failure by the City to pay any principal or interest when due, or any premium or penalty due hereunder, or if an Event of Default shall occur, as defined in the ;Mortgage, Loan Agreement, or Disbursing Agreement, then the Lender shall have the right and option to declare the entire Principal Balance and all accrued interest imrnedi.ately 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. 13. The remedies of the Lender, as provided herein and in the Mortgage, Loan Agreement, Disbursing Agreement, and any other related documents, 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. 14. The Lender shall not be deemed, by any act of omission or com- mission, 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 evetut shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. IT IS HEREBY CERTIFIED AND RECI'TED 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. 6 i IN WITNESS WHEREOF, the City has caused this Note to be duly executed in its name by the signatures of the Mayor and the City Manager of the City and the corporate seal to be affixed hereto, and has caused this Note to be dated November 21, 1984. CITY OF EDEN PRAIRIE, MINNESOTA By (SEA L) / ayor i BY ` City Manager i c 7 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 City in the name of the Holder last noted below. Date of Name and address of Signature of Registration Registered Holder Finance Officer First National Bank of Minneapolis First Bank Place Minneapolis,MN 55480