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HomeMy WebLinkAboutResolution - 84-331 - Authorizing MIDB's Final Approval - Reynolds Printing $1,400,000 - BND-edenprail5 RESOLUT ION NO RESOLUTION RELATING TO A. $1, 400 , 000 - CITY OF EDEN PRAIRIE, MINNESOTA, 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" means the Minnesota Municipal Industrial Development Act , Minnesota Statutes , Chapter 474 , as amended; "Agreement" means the Loan Agreement , dated as of December 1 , 1984 , to be entered into among the City and the Company; "Building" means the Building as defined in the Agreement ; "City" means the City of Eden Prairie , a municipal corporation and political subdivision of the State of Minnesota, its successors and assigns ; "Comoanv" means Triple R Partnership, a Minnesota general partnership, its successors , and assigns ; "Construction Loan Agreement" means that certain Construction Loan Agreement, dated as of December 1 , 1984 , to be entered into between the City , the Company and the Lender. ; "Disbursing Agreement" means that certain Construc- tion Loan Disbursement Agreement, dated as of December 1984 , to be entered into between the City , the Lender , the Company and Title Services , Inc . , a Mi nne- sota corporation. ; "Guaranty" means the Guaranty, dated as of December 1 , 1984 , executed by James Reynolds , Robert Reynolds and Richard Reynolds in favor of the Lender with respect to issuance of the Note ; "Folder" means the Lender and any subsequent holder of the Note ; "Land" means the real property described in Exhibit A to the Agreement ; "Lender" means First National Bank of Hopkins , 3opkins , Minnesota, its successors and assigns ; "Mortgage" means that certain Mortgage and Security Agreement and Fixture Financing Statement and that: cer- tain Assignment of Leases and Rents , both dated as of December 1 , 1984 , to be- executed by the Company in favor of the Lander; "Note" means the $1 , 400 , 000 principal amount Com- mercial Development Revenue Note ( Triple R Partnership Project ) , issued by the City to the Lender pursuant to the Resolution; "Pledge Agreement" means the Assignment and Pledge Agreement, dated as of December 1 , 1984 , between the City and the Lender ; "Project" means the Building and the Equipment to be acquired , constructed and installed upon the Land, as defined in the Agreement ; and "Project Costs " means those costs defined as- Pro- ject Costs in the Agreement ; "Resolution" means this resolution of the City . Section 2 . Findings . 2 . 01 . It is hereby found and declared that ( a ) based upon representations made to the City by representatives of the Company as to the nature of the Project as described in the Agreement , the Project con- stitutes a project authorized by the Act ; ( b ) the purpose. of the Project is and the effect thereof shall be to promote the public welfare by the attraction , encouragement and development of economic- ally 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 un- employment , the retention of industry to use the avail- able resources of the community in order to retain the benefit of its existing investment in educational and 2 public service facilities, halting the movement of tal- ented, 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 avail- able in the comanun.ity ; ( c) it is desirable that the Note in the principal amount of $1 , 400 , 000 be issued by the City upon the terms set forth herein and that the City pledge its interest in the Agreement and grant a security interest therein to the Holder as security for the payment of the principal of, premium, if any, and interest on the Note ; ( d) the :Loari payments contained in the Agreement are fixed so as to produce income and revenue sufficient to provide for prompt payment of the principal of , pre- mium, if any, and interest on the Note when due , and the Agreement also provides that the Company is required to pay all expenses of the operation and maintenance of the Project , including, but not limited to , adequate insur- ance thereon and all taxes and special assessments levied upon or with respect to the Land and payable during the term of the Agreement ; ( e ) under the provisicns 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 reve- nue 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 may the Note or the interest thereon nor to enforce payment thereof" against any pro- perty of the City ; the Note , premium, if any, and in- terest thereon shall not constitute an indebtedness of the City within the meaning of any constitutional , char- ter or statutory limitation and shall not constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and shall not constitute a charge , lien or encumbrance, legal or equitable , upon any property of the City other than its interest in the Project ; ( f ) the execution and delivery of the Note , the Agreement , the Construction Loan Agreement , the Disburs- ing Agreement and the Pledge Agreement shall not con- flict 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 she City from denying the validity -- 3 - of the Note , the Agreement , or the Pledge Agreement by reason of the existence of any facts contrary to this finding ; ( g ) all acts and things required under the Consti- tution and the laws of the State of Minnesota to make the Note, the Agreement , the Construction Loan Agree- ment , the Disbursing Agreement and the Pledge Agreement the valid and binding obligations of the City in ac- cordance with their terms shall have been done upon adoption of this Resolution and execution of the Note, the Agreement and the Pledge Agreement; provided that this finding is made solely for the purpose of estopping the City from denying the " validity of the Note , the Agreement , the Construction Loan Agreement, the Dis- bursing Agreement or the Pledge agreement by reason of the existence of any facts contrary to this finding ; and ( h) the City, a municipal corporation and poli- tical subdivision of the State of Minnesota , 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 . ( i ) to the best knowledge of the undersigned , the consummation of the transactions contemplated by the Note Resolution and compliance by the City with the pro- visions thereof and of the Note , the Pledge Agreement , the Construction Loan Agreement , the Disbursing Agree- ment and the Agreement has not resulted in and wil-1 not result in the creation or imposition of any lien, charge or encumbrance ( other than the .Agreement, the Construc- tion Loan Agreement, the Disbursing Agreement , the Note Resolution and the Pledge Agreement) upon any properties or assets of the City other than its interest in the Project ; provided that. this finding is made solely for the purpose of estopping the City From deriving the validity of the Agreement , the Pledge Agreement , the Construction Loan Agreement , the Disbursing Agreement , the Note or any other document executed by the City by reason of the existence of any facts contrary to this finding . ( j ) to the best knowledge of the undersigned , the Citv is not and upon the issuance of the Note will not be in default in the performance and observance of any of the terms or conditions of the Note Resolution , the Fledge Agreement , the Construction Loan Agreement , the Disbursing Agreement and the Agreement on its part to be performed or observed , and all conditions precedent pro- vided in the Note Resolution relating to the issuance of the Note has been complied with ; provided that this - 4 - finding is made solely for the purpose of estopping the City from denying the validity of the Agreement , the Pledge Agreement , the Construction Loan Agreement , the Disbursing Agreement , the Note or any other document executed by the City by reason of the existence of any facts contrary to this finding .- Section 3 . Authorization and Sale . 3 . 01 . Authorization . The City is authorized by the Act to issue revenue bonds and loaf: the proceeds thereof to busindss enterprises to finance the acquisition, construc- tion and installation of facilities constituting a "proj- ect , " as defined in the Act , and to make all contracts , execute all instruments and do all things necessary or con- venient in the exercise of such authority. 3 . 02 . Preliminary City Approval . By preliminary re- solution duly adopted by the City Council on September 4 , 1984 , after a public hearing held on that date, this City Council approved the acquisition, construction and installa- tion or the Project and authorized the preparation of such documents as may be appropriate to the acquisition, con- structior, and installation of the Project . 3 . 03 . A-omroval of Documents . Pursuant to the fore- going, there have been prepared and presented to the City 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) the Loan Agreement ; ( b ) the Construction Loan Agreement ; ( c ) the Disbursing Agreement ; ( d ) the Pledge Agreement ; ( e ) the Mortgage ; and ( f ) the Guaranty . The forms of the documents listed in ( a ) through ( d ) above are approved, with such variations , insertions and additions as are deemed appropriate by the parties and approved by the City Attorney . The documents listed in ( e ) and ( f ) above , being a document to which the City is not a party , will not be executed by the City . 5 - Section 4 . Authorizations . 4 . 01 . Upon the completion of the Agreement , the Con- struction Loan Agreement , the Disbursing Agreement and the Pledge Agreement approved in Section 3 . 03 hereof , the Mayor and the City Manager shall execute the same on behalf of the City and the Mayor and the City Manager shall execute the Note , in substantially the Form approved in paragraph 5 . 01 hereof, on behalf of the City, and the Mayor, the City Man- ager , the City Clerk and other officers of the City shall execute such. other certifications , documents or instruments as bond counsel or counsel for the Lender shall require , subject to the approval of the City Attorney, and all cer- tifications ,- recitals and representations therein shall. constitute the certificates , recitals and representations of: the City . Execution of any instrument or document by one or more appropriate officers of the Cicy shall constitute and shall be deemed the conclusive evidence of the approval and authorization by the City and the City Council of the in- strument, or document so executed. Section 5 . The Note. 5 . 01 . Form and Authorized Amount . The Note shall be issued substantially in the fora presented to the City Coun- cil 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 principal amount of $l, 400 , 000 . The offer of the Lender to purchase the Note at a price of par is found reasonable and is ac- cepted . 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 privileges , are incorporated by reference herein . 5 . 02 . Execution . The Notre shall be executed on behalf of the City by the manual signatures of the Mayor and the City Manager . 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 Destroved Note . In case the Note shall become mutilated or be lost or destroyed, 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 nutilated Note or in lieu of and in substitution for such Note lost or destroyed , 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 , filing with the City evidence satisfactory to it of such loss or destructic.n. - 6 -- 5 . 04. Note Registrar ; Assignment . The City Clerk is hereby designated as Note Registrar ( the "Note Registrar" ) and shall keep a Note Register in which the Note Registrar shall provide Ear the registration of transfers of ownership of the Note. The Note shall be initially registered in the name of the Lender• and shall be transferable upon the Note Register by the registered owner of the Note at ary time in person or by its agent duly authorized in writing, upon surrender of the Note together with a written instrument of transfer duly executed by the Holder or its duly authorized agent in the Lollowing formr For value received hereby sells , assigns and transfers unto (Tax Identification or Social Security No . ) the within Note of the City of Eden Prairie , Minnesota , and does hereby irrevocably constitute and appoint attorney to transfer said Note an the books of the Note Registrar with full power of substitution in the premises . Upon such transfer the Note Registrar shall note the date of registration and the name, address and tax identifi- cation number or social security number of the new Holder of the Note in the Note Register and in the registration blank appearing on the Note . 5 . 05 . Delivery and Use of Proceeds . Prior to del_ivery 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. The City shall thereupon deliver to the Lender the Note in the principal amount of $1 , 400 , 000 together with a copy , duly certified by the City Clerk , oL this Resolution and such closing certificates as are required by bond coun- sel . Upon delivery of the Note and the above items to the Lender , the proceeds of the Note shall be deposited in a Project Fund initially maintained by the Lender and dis- bursement of such proceeds shall be made to the Company for payment or reimbursement of Project Costs upon the terms provided in the Agreement , the Construction Loan Agreement and the Disbursing Agreement . Any surplus in the Project Fund shall be applied toward ` prepayment of the Note as provided in the Agreement and shall not be inctested to produce a yield greater than the yield on the Note ( within the meaning of Section 10 3 ( c ) of 7 - ' the Internal Revenue Code of 1954 , as amended) , as required by Internal. Revenue Service Revenue Procedures 79-5 and 81-- 22 and any regulations promulgated thereunder and amendments or modifications thereto ; provided that if the Holder re- ceives an opinion of bond counsel that the exemption from federal income- taxation of -the interest on the PTote will not be jeopardized , the :surplus funds may be. invested at a yield greater than the yield on the Note _ 5 . 06 issuance of New Note. The City shall, at the request- and expense of the Holder', issue new Notes , in an aggregate outstanding principal amounJt--- equal to that of the Note surrendered, and of like tenor except as to number , principal amount , and the amount of the monthly payment payable thereunder, and be registered by the Note Registrar in the name of the Holder - Section 6 . Limitations of the City ' s obligations . 6 . 01 Notwithstanding anything contained in the Note , the Agreement or the Pledge Agreement or any other documents referred to in Section 3 . 03 hereof , the Note , premium, if any, and interest thereon shall not constitute an indebted- ness of the City within the meaning of any constitutional , charter or statutory Limitation and shall not constitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and shall not constitute a charge , lien or encumbrance , legal or equit- able , upon any property of the City other than its interest in the Project , 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 its interest in the Project. The agreement of the City to perform the covenants and other provisions contained in this Resolution or the Note , the Agreement or the Pledge Agree- ment and the other documents listed in Section 3 . 03 hereof shall be subject at all times to the availability of reve- nues furnished by the Company sufficient to pay all costs of such performance or the enforcement thereof , and neither the City nor any of its officers , employees or agents shall be subject to any personal or pecuniary liability thereon - No failure of the City to comply with any terms , conditions , or agreement therein shall subject the City or its officers , employees or agents to liability for any claim for damages , costs or other financial or pecuniary charges except to the extent that the same can be paid or -recovered from the Loan Agreement or revenues therefrom, or from proceeds of the Note . 8 - Section 7 . City Representative ; Statement of Election . 7 . 01 . The City Manager and the Mayor and City Clerk of the City are hereby designated and authorized to act on behalf of- the City as the City Representative and alternate City Representatives , respectively ( as defined in the Agree— ment ) . 7 .02 _ The principal amount of the Note being in excess of $1 , 000 , 000 , the Mayor is hereby authorized and directed- on behalf of the City to execute and cause to be filed with the Internal Revenue Service a statement of election to issue its obligations in excess of $1 , 000 , 000 as provided by Section 103 ( b) ( 6) ( 10 ) of the Internal. Revenue Code of 1954 , as amended, and Section 1. 103 ( b ) ( 2) ( vi) of the regulations promulgated thereunder . Adopted by the Eden Prairie City Council on December 20 , 1984 . 9 - y, Clerk ' s Certificate I', the undersigned, being the duly qualified and acting Clerk of the City of Eden Frairie , Minnesota , hereby certify that I have- carefully compared the attached and foregoing resolution with the original thereof on file in my office and further certify that the same is a full, true and com- plete transcript therefrom, insofar as the same relates to the approval of the issuance of a bond of the City to fi- nance a commercial or industrial development project for Triple R Partnership, a Minnesota general partnership . I certify that Councilmember Redpath intro- duced said resolution , Councilmember Redpath moved its adoption, which motion was duly seconded by Council- member Bentlev , and upon roll call ,- the "Ayes , " "Abstains " and "Nays" were as follows : AYES ABSTAINS NAYS Penzel Anderson Bentley Redpath Whereupon the resolution was declared duly passed and adopted . 1 further certify that said resolution was duly adopted by the Eden Prairie City Council at a duly called and regu- larly held regular or special meeting thereof . WITNESS my hand officially as such Clerk and the corpor- ate seal of the City this 20th day of December , 1984 . City Clerk Eden Prairie , Minnesota ( SEAL ) - 10 - Al CERTIFICATE OF REGISTRATION It is hereby certiLied that at the request of the Reg- istered Owner of the within Note the Note Registrar has this date registered it -as to principal and interest in the name of such Registered Owner. , as indicated in the registration blank below, on the books kept by the undersigned for such purpose : Name of Registered Date of Authorized Signature Owner R_2aistration of Note Registrar First National Bank of Hopkins a s CITY OF EDEN PRAIRIE, MINNESOTA COMMERCIAL DEVELOPMENT REVENUE NOTE (TRIPLE R PARTNERSHIP PROJECT) Minneapolis, Minnesota $1,400,000.00 December 1, 1984 FOR VALUE RECEIVED, the City of Eden Prairie, Minnesota, a political subdivision of the State of Minnesota (the "City") hereby agrees and promises to pay to First National Bank of Hopkins, a national banking association, or its registered assigns (the "Holder") at its principal office at 16 Ninth Avenue North, Hopkins, Minnesota 55343, or such other place as the Holder, or its registered assigns, may from time to time designate in writing, solely from the source and in the manner hereinafter provided, the principal sum of One Million Four Hundred Thousand and 00/100 ($1,400,000.00) Dollars or so much as may be advanced hereunder from time to time for the account of the City in accordance with the Construction Loan Agreement and the Construction Loan Disbursement Agreement hereinafter referred to, and to pay interest on the unpaid principal balance from the date hereof until this Note is fully paid at the rates of interest hereinafter set forth. Both the unpaid principal balance and interest thereon shall be payable in coin or currency which at the time 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: (1) From and after the date hereof until the Completion Date (as that term is defined in the Construction Loan Agreement), the City shall pay interest only on the outstanding principal balance of this Note at a per annum rate equal to eleven and one--Half percent (11 1/2%). Interest shall accrue from and after the date of each and every advance so made by the Holder and shall be payable on the first (1st) day of the calendar month next succeeding the date upon which the first advance is made, and on the first (1st) day of each and every calendar month thereafter, and on the Completion Date, provided that, in the event the Completion Date has not occurred on or prior to July 1, 1985, for any reason, the entire unpaid principal balance hereof, together with interest accrued thereon, shall, at the option of the Holder, become due and payable on demand. (2) Commencing on the Completion Date, the unpaid principal balance hereof shall bear interest at the rates of interest set forth below and principal and interest shall be repayable in installments as follows: a. On or before the first (1st) day of the calendar month next succeeding the Completion Date (unless the Completion Date occurs on the first (1st) day of a month), there shall be paid an interest only payment at the rate of eleven and one-half percent (11 1/2%) per annum, equal to accrued interest between the Completion Date and said first (1st) day of the month. b. On or before the first (1st) day of each and every calendar month thereafter (or after the Completion Date if such date occurs on the first (1st) day of a month) for the remainder of the first three (3) Loan Years, as hereinafter defined, principal and interest at the rate of eleven and one-half percent (11 1/2%) per annum, shall be payable in equal monthly installments of Fourteen Thousand Two Hundred Thirty and 571100 ($14,230.57) Dollars. C. The interest rate referred to herein shall be increased or decreased effective as of the first day of the fourth Oth), seventh (7th), tenth (10th) and thirteenth (13th) Loan Years, as hereinafter defined (the "Interest Adjustment Dates"), to a per annum rate of interest equal to 150 basis points over the average of the yields reflected in The Bond Buyer's 20 Bond Index as published in The laily Bond Buyer (or if said index is no longer published a comparable index selected by the Holder) during a thirteen (13) week period immediately preceding each Interest Adjustment Date. in the event of an increase or decrease in the interest rate on an Interest Adjustment Date, the monthly installment payments of principal and interest set forth in subparagraph 2(b) above shall be increased or decreased to an amount sufficient to reamortize the then unpaid principal balance of this Note together with interest at the revised rate in full in equal monthly installment payments over the then remaining portion of the original twenty-five (25) year amortization period, with a final payment of all unpaid principal and accrued interest being paid in any event on July 1, 2000 in accordance with clause 2(d) below. As used herein, the term "Loan Year" shall mean a year consisting of twelve (12) calendar months, the first day of the first (1st) Loan Year being the first day of the month immediately preceding the month on which the Borrower is obligated to make its first monthly installment payment of principal and interest as hereinbefore provided in subparagraph 2(b) above. Subsequent Loan Years shall run consecutively, each commencing upon the anniversary of the commencement of the first Loan Year. d. A final payment of all unpaid principal and accrued interest shall, in any event, be due and payable in full on July 1, 2000. If the Holder receives notice of a Determination of Taxability (as defined in the Loan Agreement), the rate of interest then payable under this Note shall, at the option of the Holder, be changed, effective as of the Date of Taxability (as defined in the Loan Agreement), to a per annum rate equal to two percent (2%) in excess of the rate of interest from time to time publicly announced by First National Bank of Minneapolis ("Bank") as its reference rate. The term "reference rate" means the rate publicly announced by the Bank from time to time as its -2- reference rate with the understanding that the Bank may lend to its customers at rates that are above or below the reference rate. In the event such reference rate has changed or does change at any time and from time to time from and after the Date of Taxability, such modified interest rate shall be increased or decreased, as the case may be, on the basis of the changes in such reference rate, effective as of the date that such changes in the reference rate were or are effective. The City shall promptly pay to the Holder and to any prior Holder affected thereby, as their interests may appear, within ten (10) days after receipt of a notice setting forth the amount of such difference, the aggregate difference between (i) the amounts actually paid hereunder between the Date of Taxability and the date of such payment, and (ii) the amounts which would have been due during such period if the modified interest rate had been in effect, if greater than the amount of interest previously paid. The monthly installment payments of principal and interest payable under subparagraph numbered (2) above shall thereafter remain at the same amount as was in effect on the date of receipt of the notice of a Determination of Taxability. To the extent that the interest pa able during any month thereafter, based upon the modified interest rate, is less than the amount of such monthly payment, then the balance of any such monthly payment shall be applied to the reduction of the outstanding principal balance of this Note. To the extent that the interest payable during any month thereafter, based upon the modified interest rate, is greater than the amount of such monthly payment, then the Borrower shall also pay such additional amount of interest to the Holder for any such month along with the monthly payment amount described above. The provisions of this paragraph shall survive the payment of this Note. The Holder shall notify the City and the Borrower in writing, as soon as practicable, of its receipt of a 'Determination of Taxability and of the consequent change in interest rate and monthly installment payments required hereunder. Per diem interest shall be computed on the basis of a 360 day year but shall be payable on the actual days elapsed during the term of this Note. All payments made under this Note shall be applied first to interest and then to principal, except that if any advances made by the Holder under the terms of any instruments securing the Note upon the occurrence of an event of default are not repaid, any moneys received, at the option of the Holder may first be applied to repay such advances, plus interest thereon, at a rate of interest equal to that provided for herein in the event of a Determination of Taxability, and the balance, if any, shall be applied on account of any installments of interest and/or principal then due. This Note may be prepaid in whole or in part at any time without premium. Any prepayment shall be made on thirty (30) days' advance written notice to the Holder, shall be accompanied by accrued interest, shall be made on a regularly scheduled payment date and shall not suspend required monthly installment payments. Any such prepayments shall be applied against the unpaid principal balance in inverse order of maturity and monthly payments of principal and interest due hereunder shall thereafter be decreased to an amount sufficient to reamortize the then unpaid principal balance of this Note together with interest thereon in full in equal monthly installment payments over the then remaining portion of the original twenty-five (25) year amortization period, with a final -3- payment of all unpaid principal and accrued interest being paid in any event on July 1, 1995. In the event that any payment required hereunder is not paid within ten (10) days after its due date, the City agrees to pay a late charge of four percent (40,60 of the unpaid payment in order to defray the costs of the Holder incident to collecting such late payment. This provision shall not be deemed to excuse a late payment or be deemed a waiver of any other rights the Holder may have including the right to declare the entire unpaid principal and interest immediately due and payable. Notwithstanding anything to the contrary contained in this Note, the Holder shall have the right to call for payment in full of the unpaid principal balance of this Note, together with all interest accrued thereon, at any time after February 15, 1985, upon three (3) days prior written notice, in the event that the Borrower has failed to comply with the requirements of the Construction Loan Agreement regarding qualification for disbursement of hard Construction Costs, as set forth therein, by February 15, 1985. Notwithstanding anything to the contrary contained in this Note, the Holder reserves the right to call for payment in full of the unpaid principal balance of this ;Vote, together with all interest accrued thereon, at the end of the tenth (10th) Loan Year. Such call shall be made by written notice to the Borrower and the City at their addresses as set forth in the Mortgage securing this Note and described below at least one hundred eighty (180) days prior to the end of the tenth (loth) Loan Year. The Holder, at its option, may, at any time after receipt of notice of a Determination of Taxability, call this Note for redemption and 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 thirty (30) days' prior written not_°ce to the City and the Borrower, in the manner prescribed in the Loan Agreement, 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. The Holder, at its option, may, call this Note for redemption and declare the unpaid principal balance of this :Vote, together with accrued interest thereon and any other indebtedness due hereunder, due and payable in full, if as a result of changes in the Constitution of the State of Minnesota or the United States of America or of legislative or administrative action (whether state or federal) or of a final decree, judgment, or order of any court or administrative body (whether state or federal), the Loan Agreement shall have become void or unenforceable or impossible of performance in accordance with the intent and purpose of the parties expressed therein, upon at least thirty (30) days' prior written notice to the City and the Borrower, in the manner prescribed in the Loan Agreement, 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. �r -4- Upon the occurrence of certain events of damage to or destruction or condemnation of the Project hereinafter referred to, the Holder, at its option, may apply the insurance proceeds or condemnation awards, as the case may be, against the unpaid principal balance in inverse order of maturity, with no premium, all as provided in Article Four of the Mortgage hereinafter referred to. Additionally, upon the occurrence of certain events described in Section 1.4 of the Mortgage hereinafter referred to, the Holder may declare the entire principal and interest evidenced by this Note due and payable in full and call for payment of the same in full at once. This Note is issued by the City for the purpose of providing funds to be loaned to Triple R Partnership, a Minnesota general partnership (the "Borrower"), pursuant to the terms of a Loan Agreement, of even date herewith (the "Loan Agreement"), between the City and the Borrower, which funds are to be used to pay the cost of a project, within the meaning of Minnesota Statutes, Section 474.02, Subdivision 1, consisting of the acquisition of certain land located in the City and the construction of an office-warehouse-manufacturing building containing approximately 30,000 net rentable square feet and related facilities and improvements (the land and improvements hereinafter collectively referred to as the "Project"). This Note is secured by an Assignment and Pledge of Loan Agreement, of even date herewith, by the City to Holder, by a Mortgage and Security Agreement and Fixture Financing Statement, of even date herewith (the "Mortgage") from the Borrower, as mortgagor, to the Holder, as mortgagee, by an Assignment of Leases and Rents, of even date herewith (the "Assignment") from the Borrower to the Holder, and by a Guaranty, of even date herewith (the "Guaranty"), from James Reynolds, Richard Reynolds, and Robert Reynolds to the Holder. The disbursement of the proceeds of this Note is governed by the terms and conditions of the Loan Agreement, a Construction Loan Agreement, of even date herewith (the "Construction Loan Agreement"), by and among the City, the Holder and the Borrower and a Construction Loan Disbursement Agreement, of even date herewith (the "Construction Loan Disbursement Agreement") by and among the Holder, the City, the Borrower, and Title Services, Inc. as agent for Commonwealth Land Title Insurance Company. All of the agreements, conditions, covenants, provisions and stipulations contained in the Loan Agreement, the Mortgage, the Assignment, the Guaranty, the Construction Loan Agreement and the Construction Loan Disbursement Agreement are hereby made a part of this Note to the same extent and with the same force and effect as if they were fully set forth herein. Reference is hereby made to such documents for a complete description of the covenants and agreements therein contained, the nature and extent of the security thereby created, and the rights, duties, and immunities of the City thereunder. It is agreed that time is of the essence of this Note. If a default occurs in any payment due under this dote or if any other event of default occurs under the terms of this Note, or in the Construction Loan Agreement, the Mortgage, the Assignment, the Loan Agreement, the Construction Loan Disbursement Agreement, or any other document securing this Note, 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, together with any reasonable attorneys' -5- 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, the Construction Loan Agreement, the Construction Loan Disbursement Agreement, 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, the Construction Loan Agreement, the Construction Loan Disbursement Agreement, the Assignment, or any other document securing this Note. The Holder may extend the time of payment of interest and/or principal of this Mote, without notice to or consent of any party liable hereon and without releasing any such party. This Note is issued pursuant to and in full compliance with the Constitution and laws of the Stage of Minnesota, including Minnesota Statutes, Chapter 474, and pursuant to a resolution duly adopted by the City Council on December 20, 1984 (the "Resolution"). This Note and the interest hereon and any penalty, charge, or premium, or any amounts payable hereunder, however designated, due hereunder are payable by the City solely from the revenues and proceeds derived from the Lean Agreement, 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 of the City other than the revenues and proceeds pledged by the City to the payment thereof, and do not give rise to a pecuniary liability of the City nor of any of its officers, agents, or employees, and no holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest hereon or any penalty, charge, or premium, or any amounts payable hereunder, however designated, do 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 purposes of this Note, be controlling and shall be given full force and effect, anything else to the contrary in this Note notwithstanding. The remedies of the Holder, as provided herein and in the Mortgage, the Loan Agreement, the Guaranty, the Construction Loan Agreement, the Construction Loan Disbursement Agreement, 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 delay, omissicn, or 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, hereby waives diligence, demand, presentment, protest and notice of dishonor and suretyship defenses generally, and agrees that, except as otherwise expressly provided herein or in the Loan Agreement, 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 Mote, or executed in connection with this Note, may from time to time extend, renew, or otherwise modify the date or dates -6- 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 continue to be liable to pay the unpaid balance of the indebtedness evidenced hereby as so extended, renewed or modified and notwithstanding any such release. The City shall register this Note by registration hereon and upon the books of the City kept for that purpose at -the office of the City Manager. Upon such registration, this Note shall be transferable only by Q) the Holder hereof, in person or by its attorney duly authorized in writing surrending this Note together with a written instrument of transfer satisfactory to the City Manager, duly executed by the Holder or its duly authorized attorney, and (ii) the City Manager noting the date of registration and the name and address of the new Holder upon the books of the City and in the registration blank appearing below. The transfer shall not be effective until the City Manager has noted the date of registration and the name and address of the new holder upon the books of the City and in the registration blank appearing below as aforesaid. 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 he:•eunder, and for all other purposes, and all such payments so trade 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 surn or sums so paid, and the City shall not be affected by any notice to the contrary. 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. In the event the Borrower sells, conveys, transfers, further mortgages or encumbers or disposes of the Projec,, or any part thereof, or any interest therein, or agrees so to do, or if any partnership interest in Borrower is sold, conveyed, pledged or transferred, without the written consent of Holder being first obtained, then at the sole option of Holder, the Holder may declare the entire Indebtedness Secured Hereby due and payable in full and call for payment of the same in full at once. In the event the Borrower ihall request the consent of the Holder in accordance with this Note, the Borrower shall deliver a written request to the Holder together with complete information regarding such a conveyance or encumbrance and shall allow the Holder thirty (30) days for evaluation of such request. Such approval may be subject to such other modifications of the loan terms as may be established by the Holder. Consent as to any one transaction shall not be deemed to be a waiver of the right to require consent to future or successive transactions. i -7- 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 registered holder and owner of this Note, whether or not named as Holder herein. 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. 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; alf-as of the day and year first above written. CITY OF EDEN PRAIRIE, MINNESOTA By: �.. Ma (Seal) -8- } CERTIFICATE OF REGISTRATION It is hereby certified that the City of Eden Prairie, Minnesota, has this day registered the within Note as to principal and interest, in the name of the party set forth in the registration blank below, on the books kept by the City Manager for such purposes: Name of Authorized Registered Date of Signature of Owner Registration City Manager First National Bank of Hopkins December 1984