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RESOLUTION 84-37
FINAL NOTE RESOLUTION
CITY OF FALCON HEIGHTS
$1,400,000 COMMERCIAL DEVELOPMENT REVENUE NOTE OF 1984
(BULLSEYE GOLF CENTERS, INC. PROJECT)
ADOPTED: October ~, 1984
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NOTE RESOLUTION
(This Table of Contents is not a part of this
Resolution, but is included for convenience only)
TABLE OF CONTENTS
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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
of Project ....................._ 5
ARTICLE TWO - NOTE ................................... 6
Section 2-1. Authorized Amount and Form
of Note .......................... 6
Section 2-2. The Note ......................... 15
Section 2-3. Execution ........................ 15
Section 2-4. Delivery of Note ................. 15
Section 2-5. Disposition of Note Proceeds..... 16
Section 2-6. Registration of Transfer......... 16
Section 2-7. Mutilated, Lost or Destroyed
Note .... ........................ 17
Section 2-8. Ownership of Note ................ 17
Section 2-9. Limitation on Note Transfers..... 18
ARTICLE THREE - GENERAL COVENANTS ..................... 19
Section 3-1. Payment of Principal and Interest. 19
Section 3-2. Performance of and Authority
for Covenants ..................... 19
Section 3-3. Enforcement and Performance of
Covenants...... ................. 19
Section 3-4. Nature of Security ................ 20
ARTICLE FOUR - MISCELLANEOUS .......................... 21
Section 4-1. Severability............ ........ 21
Section 4-2. Authentication of Transcript...... 21
Section 4-3. Registration of Resolution........ 21
Section 4-4. Authorization to Execute
Agreements ........................ 21
SIGNATURES ... ......................................... 22
NOTE RESOLUTION
BE IT RESOLVED by the. City Council of the City of
Falcon Heights, 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;
Assignment of Leases and Rents: the. agreement to be
executed -by the Borrower assigning all the leases, rents,
issues and profits derived from the Project to the Lender to
secure the repayment of the Note and interest thereon;
. Bond Counsel: a nationally recognized fi nn of bond
counsel experienced in tax exempt industrial revenue bonds
financing and any opinion of Bond Counsel s'nall be a written
opinion signed by such Counsel;
Borrower: Bullseye Golf Centers, Inc., a Minnesota
corporation, its successors, assigns, and any surviving,
resulting or transferee business entity which may assume its
obligations under the Loan Agreement;
City: the City of Falcon Heights, Minnesota, its
successors and assigns;
Construction Fund: the fund established by the City
pursuant to this Resolution 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;
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Guarantor: collectively, Dennis E. Hunt and his spouse;
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Guaranty: the personal guaranty to be executed by the
Guarantor in favor of the Lender;
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;
Leases: all leases now or hereafter affecting the Land;
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Lender: National City Bank of Minneapolis, Minneapolis,
Minnesota, its successors and assigns;
Loan Agreement: the agreement to be executed by the City
and the Borrower, providing for the issuance of the Note and
the loan of the proceeds thereof to the Borrower, including any
amendments or supplements thereto made in accordance with its
provisions;
Mortgage: the Mortgage, Security Agreement and Fixture
Financing Statement to be executed by the Borrower, as
mortgagor, to the Lender, as mortgagee, securing payment of the
Note and interest thereon;
Note: the $1,400,000 Commercial Development Revenue Note
of 1984 (Bullseye Golf Centers, Inc. Project), to be issued by
the City pursuant to this Resolution and the Loan Agreement;
Note Register: the records kept by the City Clerk-Adminis-
trator to provide for the registration of transfer of ownership
of the Note;
Plans and Specifications: the plans and specifications
for the construction and installation of the Improvements on
the Land, which are approved by the Lender, together with such
modifications thereof and additions thereto as are reasonably
determined by the Borrower to be necessary or desirable for the
completion of the Improvements and 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;
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- ~ Principal Balance: so much of the principal sum on the
Note as remains unpaid at any time;
Project: the Land and Improvements as they may at any
time exist;
Project Costs: the total of all "Construction Costs" and
"Loan and Carrying Charges," as those terms are defined in the
Loan Agreement;
Resolution: this Resolution of the City adopted October
10, 1984, together with any supplement or amendment thereto.
All references in this instrument to designated
"Articles," "Sections" and other subdivisions are to the
designated Articles, Sections and subdivisions of this
instrument as originally executed. The words "herein,"
"hereof" and "hereunder" and other words of similar import
refer to this Resolution as a whole not to any particular
Article, Section or subdivision. -
1-2. Legal Authorization.
The City is a political subdivision of the State of
Minnesota and is authorized under the Act to initiate the
revenue producing project herein referred to, and to issue and
sell the Note for the purpose, in the manner and upon the terms
and conditions set forth in the Act and in this Resolution.
~~ 1-3. Findings.
The City Council has heretofore determined, and dues
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;
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(3) in authorizing the Project the City's purpose is, and
in its judgment the effect thereof will be, to promote the
public welfare by: the attraction, encouragement and
development of economically sound industry and commerce so as
to prevent, so far as possible, the emergence of blighted and
marginal lands and areas of chronic unemployment; the develop-
ment of revenue-producing enterprises to use the available
resources of the community, in order to retain the benefit of
the community's existing investment in educational and public
service facilities; the halting of the movement of talented,
educated personnel of all ages to other areas thus preserving
the economic and human resources needed as a base for providing
governmental services and facilities; the provision of acces-
sible employment opportunities for residents in the area; the
expansion of an adequate tax base to finance the cost of
governmental services, including educational services for the
school district serving the co~cimunity 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 Note in the principal amount of $1,400,000 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;
(&) the Note and the interest accruing thereon do not
constitute an indebtedness of the City within the meaning of
any constitutional or statutory limitation and do not
constitute or give rise to a pecuniary liability or a charge
against the general credit or taxing powers of the City and
neither the full faith and credit nor the taxing powers of the
City is pledged for the payment of the Note or interest
thereon; and
(7) 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.
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1-4. Authorization and Ratification of Project.
The City has heretofore and does hereby authorize the
Borrower, in accordance with the provisions of Section
474.03(7) of the Act and subject to the terms and conditions
set forth in the Construction Loan Agreement, to provide for
the construction and installation of the 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;
and the City hereby ratifies, affirms, and approves all actions
heretofore taken by the Borrower consistent with and in
anticipation of such authority and in compliance with the Plans
and Specifications.
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ARTICLE TWO
NOTE
2-1. Authorized Amount and Form of Note.
The Note issued pursuant to this Resolution shall be
in substantially the form set forth herein, with such
appropriate variations, omissions and insertions as are
permitted or required by this Resolution, and in accordance
with the further provisions hereof; and the total principal
amount of the Note that may be outstanding hereunder is
expressly limited to $1,400,000 unless a duplicate Note is
issued pursuant to Section 2-7. The Note shall be in
substantially the following form:
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_ UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF RAMSEY
CITY OF FALCON HEIGHTS
Commercial Development Revenue Note of 1984
(Bullseye Golf Centers, Inc. Project)
$1,400,000
FOR VALUE RECEIVED the CITY OF FALCON HEIGHTS, Ramsey
County, Minnesota, (the "City") hereby promises to pay National
City Bank of Minneapolis, in Minneapolis, Minnesota, its
successors or registered assigns (the "Lender"), from the
source and in the manner hereinafter provided, tY~e principal
sum of ONE MILLION FOUR HUNDRED THOUSAND AND 00/100 DOLLARS
($1,400,000.00), (the "Principal Balance"), with interest
thereon at the rate set forth below, in any coin or currency
which at the time or times of payment is legal tender for the
payment of public or private debts in the United States of
America, in accordance with the terms hereinafter set forth.
1. (a) From and after the date hereof and until
October 3~, 1985 (the "First Anniversary Date") interest on the
Principal Balance shall accrue at the rate of 85$ of the
publicly announced prime rate of the Lender calculated daily.
Interest only shall be paid on the Note until the First
Anniversary Date. Interest shall accrue from and after th e
date of this Note and shall be payable on the first day of the
calendar month next succeeding the date hereof, and on the
first day of each and every month thereafter.
(b) Commencing on the First Anniversary Date
and on the first day of each calendar month thereafter, the
Principal Balance shall be amortized in equal consecutive
monthly installments of principal and interest the amount of
each which is to be calculated on an assumed 30 year
amortization with a final. installment of all unpaid principal
and interest on October 3~, 2014 (the "Final Maturity Date')
which shall be applied first to accrued interest and thereafter
to reduction of the Principal Balance. From and after the
First Anniversary Date interest on the Principal Balance shall
accrue at an annual rate which (i) is not less than 115$ nor
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more than 135$ of the yield to maturity stated in the "25 Rev.
Bonds Index" appearing in the Credit Markets (or successor
,,~ publication) for the last week immediately prior to the First
Anniversary Date and (ii) will in the written opinion of the
Rate Setter (hereinafter defined) delivered to the City and
Lender on the First Anniversary Date, allow the Note to be
marketed on the First Anniversary Date at par. Rate Setter
shall mean Miller & Schroeder Municipals, Inc., its successors
and assigns and Bullseye Golf Centers, Inc., its successors and
assigns.
(c)(i) 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 this Note shall be increased, retroactively
effective from and after the Date of Taxability (as hereinafter
defined) to the fluctuating rate of 4$ over the publicly
announced prime rate of the Lender. The City shall immediately
upon demand pay to the Lender and to each prior holder affected
by such Determination of Taxability an amount equal to the
amount by which the interest accrued retroactively at such
increased rate from the Date of Taxability to the date of
payment exceeds the amount of interest actually accrued and
paid to the Lender and any such prior holder during said period
plus an amount equal to any interest, penalties, additions to
tax and additional amounts as referred to in Subchapter A of
Chapter 67 and Subchapters A and B of Chapter 68 of the
Internal Revenue Code (such interest, penalties, additions to
tax and additional amounts being referred to as "Additions to
Tax") which are payable to the United States as a consequence
of the failure to include the interest on the Note in federal
gross income. (Such obligation of the City shall survive the
payment in full of the principal amount of this Note.)
(ii) Upon a Determination of Taxability, the
Lender may declare the entire Principal Balance of this Note
together with accrued interest thereon at such retroactively
increased rate to be immediately due and payable, together with
the prepayment premium, if any, specified in paragraph 8
hereof.
(iii) The terms "Determination of Taxabilityt"
"Date of Taxability" and "Notice of Taxability" as used herein
shall have the meanings ascribed to such terms in Section 4.07
of the Loan Agreement, dated the date hereof (the "Loan
Agreement"), between the City and Bullseye Golf Centers, Inc.
(the "Borrower").
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_ ~ (iv) The Lender shall give notice, as soon as
practicable, but in any event before the right to appeal such
• Notice of Taxability has expired, to the Borrower, the City and
any prior holder of its receipt of any Notice of Taxability and
permit the Borrower to contest litigate or appeal the same at
its sole expense. In the event any such contest, litigation or
• appeal is undertaken, the increased interest provided in
paragraph 1(c)(i) shall, nevertheless, be payable to the Lender
and, to the extent applicable, any prior holder and shall be
held by the Lender and any such prior holder in escrow in an
interest bearing account pending final disposition of such
contest, litigation or appeal, provided that the Borrower shall
indemnify and hold harmless the Lender and each such prior
holder from any and all penalties, interest or other
liabilities which they may incur on account of such contest,
litigation or appeal.
2. In any event, the payments hereunder shall be
sufficient to pay all principal and interest due, as such
principal and interest becomes due, and to pay any"premium or
service charge, at maturity, upon redemption, or otherwise.
Interest shall be computed on the basis of a 360 day year.
3. Principal and interest and premium or servic e
charge due hereunder shall be payable at the principal office
of the Lender, or at such other place as the Lender may
designate in writing.
`~ 4. This Note is issued by the City to provide funds
for a project, as defined in Section 474.02, Subdivision la,
Minnesota Statutes, consisting of the acquisition of real
estate, and the construction of a retail strip shopping center
facility thereon, pursuant to the Loan Agreement and this Note
is further issued pursuant to and in full compliance with the
Constitution and laws of the State of Minnesota, particularly
Chapter 474, Minnesota Statutes, and pursuant to a resolution
of the City Council duly adopted on October 10, 1984 (the
"Resolution").
5. This Note is secured by a Pledge Agreement of
even date herewith by the City to the Lender (the "Pledge
Agreement"), a Mortgage, Security Agreement and Fixture
Financing Statement, of even date herewith between the
Borrower, as mortgagor, and the Lender as mortgagee (the
"Mortgage"), a Guaranty of even date herewith from Dennis E.
Hunt and Shirley K. Hunt to the Lender (the "Guaranty") and an
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Assignment of Leases and Rents, of even date herewith, from the
• Borrower to the Lender (the "Assignment of Leases and Rents").
The proceeds of the Note shall be placed in the Construction
Fund established pursuant to the Resolution and the
Construction Loan Agreement (hereinafter referred to), and the
disbursement of the proceeds of this Note from the Construction
Fund is subject to the terms and conditions of a Construction
Loan Agreement of even date herewith among the Lender, the City
and the Borrower (the "Construction Loan Agreement").
6. The City, for itself, its successors and assigns,
hereby waives demand, presentment, protest and notice of
dishonor; and to the extent permitted by law, the Lender may
extend interest and/or principal of or any service charge or
premium due on this Note, including the Final Maturity Date, or
release any part or parts of the property and interest subject
to the Mortgage or to any other security document from the
same, all without notice to or consent of any party liable _
hereon or thereon and without releasing any such party from
such liability and whether or not as a result thereof the
interest on the Note is no longer exempt from the Federal
income tax. In no event, however, may the Final Maturity Date
be extended beyond thirty (30) years from the date hereof.
7. This Note may not be prepaid during the first
five Loan Years, as hereinafter defined, except as otherwise
provided in paragraph 8 herein. During the sixth (6th) Loan
. Year, this Note may be prepaid in whole, or in part on any
monthly payment date upon payment of a premium of three percent
of the amount prepaid. During the eleventh (11th) Loan Year,
this Note may be prepaid in whole, or in part on any monthly
payment date upon payment of a premium of two percent of the
amount prepaid. During the sixteenth (16th) Loan Year, this
Note may be prepaid in whole, or in part on any monthly payment
date upon payment of a premium of one percent of the amount
prepaid. During the twenty-first (21st) Loan Year and
thereafter, this Note may be prepaid in whole, or in part on
any monthly payment date without payment of a premium.
8. This Note is further subject to prepayment by the
City, at any time, without a premium, in whole or in part, upon
the occurrence of certain events of damage, destruction or
condemnation of the property secured by the Mortgage, as
specified in Section 2.04 of the Mortgage. This Note is also
subject to prepayment to the extent that there are any surplus
sums held in the Construction Fund as provided under Section
6.11 of the Construction Loan Agreement.
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' 9. In the event of prepayment of this Note, the
Lender shall apply any such prepayment against the applicable
• prepayment premium, if any, then against the accrued interest
on the Principal Balance and finally against the final
principal amounts due under the Note. The monthly payments due
under paragraph 1 hereof, shall continue to be due and payable
in full until the entire Principal Balance and accrued interest
due on this Note have been paid regardless of any partial
prepayment made hereunder.
10. As provided in the Resolution and subject to
certain limitations set forth therein, this Note is only
transferable upon the books of the City at the office of the
Clerk-Administrator, by the Lender in person or by his agent
duly authorized in writing, at the Lender's expense, upon
surrender hereof together with a written instrtunent of transfer
satisfactory to the Clerk-Administrator, duly executed by the
Lender or his duly authorized agent. Upon such transfer the
Clerk-Administrator will note the date of registration and the_
name and address of the new registered Lender in the
registration blank appearing below. The City may deem and
treat the person in whose name the Note is last registered upon
the books of the City with such registration noted on the Note,
as the absolute owner hereof, whether or not overdue, for the
purpose of receiving payment of or on the account, of the
Principal Balance, redemption price or interest and for all
other purposes, and all such payments so made to the Lender or
upon his order shall be valid and effective to satisfy and
discharge the liability upon the Note to the extent of the stun
or stuns so paid, and the City shall not be affected by any
notice to the contrary.
11. All of the agreements, conditions, covenants,
provisions and stipulations contained in the Resolution, the
Mortgage, the Assignment of Leases and Rents, the Loan
Agreement, the Pledge Agreement and the Construction Loan
Agreement are hereby made a part of this Note to the same
extent and with the same force and effect as if they were fully
set forth herein.
12. This Note and interest thereon and any service
charge or premium due hereunder are payable solely from the
revenues and proceeds derived from the Loan Agreement, the
Mortgage, the Guaranty and the Assignment of Leases and Rent s•,
and do not constitute a debt of the City within the meaning of
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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
or the interest thereon, or to enforce payment thereof against
any property of the City, and this Note does not constitute a
charge, lien or encumbrance, legal or equitable, upon any
property of the City, and the agreement of the City to perfo nn
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.
13. It is agreed that time is of the essence of this
Note. A late payment charge of four percent of the amounts of
the payment shall be made in any payment is more than ten days
delinquent. If an Event of Default (as that term is defined in
the Mortgage, the Assignment of Leases and Rents, the
Construction Loan Agreement or the Loan Agreement) shall occur,
then the Lender shall have the right and option to declare the
Principal Balance and accrued interest thereon, immediately due
and payable, whereupon the same, plus any premiums or service
charges, shall be due and payable, but solely from sums made
available under the Loan Agreement, the Guaranty, the
Construction Loan Agreement, the Assignment of Leases and Resits
and the Mortgage. Failure to exercise such option at any time
shall not constitute a waiver of the right to exercise the same
at any subsequent time.
14. The remedies of the Lender, as provided herein
and in the Mortgage, the Assignment of Leases and Rents, the
Guaranty, the Loan Agreement, the Pledge Agreement and the
Construction Loan Agreement, are not exclusive and shall be
cumulative and concurrent and may be pursued singly,
successively or together, at the sole discretion of the Lender,
and may be exercised as often as occasion therefor shall occur;
and the failure to exercise any such right or remedy shall in
no event be construed as a waiver or release thereof.
15. The Lender shall not be deemed, by any act of
omission or commission, to have waived any of its rights or
remedies hereunder unless such waiver is in writing and signed
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- by the Lender and, then only to the extent specifically set
forth in the writing. A waiver with reference to one event
. shall not be construed as continuing or as a bar to or waiver
of any right or remedy as to a subsequent event.
16. This Note has been issued without registration
under state or federal or other securities laws, pursuant to an
exemption for such issuance; and accordingly the Note may not
be assigned or transferred in whole or part, nor may a
participation interest in the Note be given pursuant to any
participation agreement, except in accordance with an
applicable exemption from such registration requirements.
IT IS HEREBY CERTIFIED AND RECITED that all
conditions, acts and things required to exist, happen and be
performed precedent to or in the issuance of this Note do
exist, have happened and have been performed in regular and due
form as required by law.
IN WITNESS WHEREOF, the City has caused this Note to
be duly executed in its name by the manual signatures of the
Mayor and Clerk-Administrator and has caused the corporate seal
to be aff,ix~d hereto, and has caused this Note to be dated
October ~ 1984.
CI F FALCON HEIGHTS, MINNESOTA
i~
Mayor
Attest: ,;~:~~~~%~ _~.,.P~~
Clerk-Administrator
(SEAL)
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' PROVISIONS AS TO REGISTRATION
• The ownership of the unpaid
Note and the interest accruing thereon
books of the City of Falcon Heights in
last noted below.
Date of Name and address
Registration Registered Owner
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?rincipal Balance of this
is registered on the
the name of the holder
Signature of
Clerk-Administrator
National City Bank
P. O. Box E 1919
Minneapolis, MN 55480
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_ ~ 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 Clerk-Administrator and shall
be sealed with the seal of the City. In case any officer whose
signature shall appear on the Note shall cease to be such
officer before the delivery of the Note, such signature shall
nevertheless be valid and sufficient for all purposes, the same
as if had remained in office until delivery. In the event of
the absence or disability of the Mayor or the
Clerk-Administrator 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:
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(A) the Loan Agreement;
(B) the Pledge Agreement;
(C) the Mortgage;
(D) the Assignment of Leases and Rents;
(E) the Construction Loan Agreement;
(F) the Guaranty;
(G) a cost certificate 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;
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- (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.
(1) There is hereby established with the Lender a
Construction Fund to be held by the Lender as a separate
account of the City as provided in the Construction Loan
Agreement. Upon delivery of the Note to Lender, the proceeds
of the Note shall be credited to the Construction Fund held by
the Lender on behalf of the City, at which time the entire
principal amount of the Note shall be deemed advanced, and the
Lender shall, on behalf of the City, disburse funds from the
Construction Fund for payment of Project Costs upon receipt of
such supporting documentation as the Lender may deem reasonabiy
necessary, including compliance with the provisions of the
Construction Loan Agreement. The Lender or Borrower shall
provide the City upon its request with a full accounting of all
funds disbursed for Project Costs.
(2) Any surplus in the Construction Fund shall be applied
towards the prepayment of the Note as provided in the
Construction Loan Agreement and shall not be invested to
produce a yield greater than the yield on the Note, as required
by Internal Revenue Service Revenue Procedure 79-5, Revenue
Procedure 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
Notes will not be jeopardized, the surplus funds may be
invested at a yield greater than the yield on the Note.
2-b. Registration of Transfer.
The City will cause to be kept at the office of the
Clerk-Administrator 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 Note shall be initially registered in the name of•
the Lender and shall be transferable upon the Note Register oy
the Lender in person or by its agent duly authorized in
writing, upon surrender of the Note together with a written
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_ instrument of transfer satisfactory to the Clerk-Administrator,
duly executed by the Lender or its duly authorized agent. The
. following form of assignment shall be sufficient for said
purpose.
For value received
hereby sells, assigns and transfers unto
the within Note of the
City of Falcon Heights, Minnesota, and does
hereby irrevocably constitute and appoint
attorney to transfer
said Note on the books of said City with full
power of substitution in the premises. The
undersigned certifies that the transfer be
made in accordance with the provisions of
Section 2-9.
Dated:
Registered Owner
Upon such transfer the Clerk-Administrator shall note the date
of registration and the name and address of the new Lender in
the Note Register and in the registration blank appearing on
the Note.
2-7. Mutilated, Lost or Destroyed Note.
In case any Note issued hereunder shall become
mutilated or be destroyed or lost, the City shall, if not then
prohibited by law, cause to be executed and delivered, a new
Note of like outstanding principal amount, number and tenor in
exchange and substitution for and upon cancellation of such
mutilated Note, or in lieu of and in substitution for such Note
destroyed or lost, upon the Lender's paying the reasonable
expenses and charges of the City in connect-ion therewith, and
in the case of a Note destroyed or lost, the filing with the
City of evidence satisfactory to the City with indemnity
satisfactory to it. If the mutilated, destroyed or lost Note
has already matured or been called for redemption in accordance
with its terms it shall not be necessary to issue a new Note
prior to payment.
2-8. Ownership of Note.
The City may deem and treat the person in whose name
the Note is last registered in the Note Register and by
notation on the Note whether or not such Note shall be overdue,
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'. as the absolute owner of such Note 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 federal securities laws, pursuant to an
exemption for such issuance; and accordingly the Note may not
be assigned or transferred in whole or part, nor may a
participation interest in the Note be given pursuant to any
participation agreement, except in accordance with an
applicable exemption from such registration requirements.
,.
•
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ARTICLE THREE
GENERAL COVENANTS
3-1. Payment of Principal.and Interest.
The City covenants that it will promptly pay or cause
to be paid the principal of and interest on the Note at the
place, on the dates, solely from the source and in the manner
provided herein and in the Note. The principal and interest
are payable solely from and secured by revenues and proceeds
derived from the Loan Agreement, the Pledge Agreement, the
Mortgage, the Construction Loan Agreement, the Guaranty and the
Assignment of Leases and Rents, which revenues and proceeds are
hereby specifically pledged to the payment thereof in the
inanner and to the extent specified in the Note, the Loan
Agreement, the Pledge Agreement, the Mortgage, the Construction
Loan Agreement, the Guaranty and the Assignment of -Leases and
Rents; and nothing in the Note or in this Resolution shall be
considered as assigning, pledging or otherwise encumbering any
other funds or assets of the City.
3-2. Performance of and Authority for Covenants.
The City covenants that it will faithfully perform at
all times any and all covenants, undertakings, stipulations and
. provisions contained in this Resolution, in the Note executed,
authenticated and delivered hereunder and in all proceedings of
the City Council pertaining thereto; that it is duly authorized
under the Constitution and laws of the State of Minnesota
including particularly and without limitation the Act, to issue
the Note authorized hereby, pledge the revenues and assign the
Loan Agreement in the manner and to the extent set forth in
this Resolution, the Note, the Loan Agreement and the Pledge
Agreement; that all action on its part for the issuance of the
Note and for the execution and delivery thereof has been duly
and effectively taken; and that the Note in the hands of the
Lender is and will be a valid and enforcea'nle special limited
obligation of the City according to t'ne 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
•
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. - ~ 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 Assignment of Leases and Rents, the Loan
Agreement, the Pledge Agreement or any other document referred
to in Section 2-4 to the contrary, under the provisions of the
Act the Note may not be payable from or be a charge upon any
funds of the City other than the revenues and proceeds pledged
to the payment thereof, nor shall the City be subject to any
liability thereon, nor shall the Note otherwise contribute or
give rise to a pecuniary liability of the City or, to the
extent permitted by law, any of the City's officers, employees
and agents. No holder of the Note shall ever have the right to
compel any exercise of the taxing power of the City to pay the
Note or the interest thereon, or to enforce payment thereof
against any property of the City other than the revenues
pledged under the Pledge Agreement; and the Note shall not
constitute a charge, lien or encumbrance, legal or equitable,
upon any property of the City; and the Note shall not
constitute a debt of the City within the meaning of any
constitutional or statutory limitation; but nothing in the Act
impairs the rights of the Lender to enforce the covenants made
for the security thereof as provided in this Resolution, the
Loan Agreement, the Pledge Agreement, the Mortgage, the
Assignment of Leases and Rents, the Construction Loan
Agreement, the Guaranty and in the Act, and by authority of the
Act the City has made the covenants and agreements herein for
the benefit of the Lender; provided that in any event, the
agreement of the City to perform or enforce the covenants and
other provisions contained in the Note, the Loan Agreement, the
Pledge Agreement and the Construction Loan Agreement shall be
subject at all times to the availability of revenues under the
Loan Agreement sufficient to pay all costs of such performance
or the enforcement thereof, and the City shall not be subject
to any personal or pecuniary liability thereon.
•
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• ARTICLE FOUR
MISCELLANEOUS
4-1. Severability.
If any provision of this Resolution shall be held or
deemed to be or shall, in fact, be inoperative or unenforceable
as applied in any particular case in any jurisdiction or
jurisdictions or in all jurisdictions or in all cases because
it conflicts with any provisions of any constitution or statute
or rule or public policy, or for any other reason, such
circumstances shall not have the effect of rendering the
provision in question inoperative or unenforceable in any other
case or circumstance, or of rendering any other provision or
provisions herein contained invalid, inoperative, or
unenforceable to any extent whatever. The invalidity of any
one or more phrases, sentences, clauses or paragraphs in this
Resolution contained shall not affect the remaining portions of
this Resolution or any part thereof.
4-2. Authentication of Transcript.
The officers of the City are directed to furnish to
Bond Counsel certified copies of this Resolution and all
documents referred to herein, and affidavits or certificates as
to all other matters which are reasonably necessary to evidence
. the validity of the Note. All such certified copies,
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-Administrator is authorized and directed to
cause a copy of this Resolution to be filed with the County
Auditor of Ramsey 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, the Construction Loan Agreement, the Guaranty, the
Mortgage, the Assignment of Leases and Rents, the Subordination
Agreement, the Assignment and Agreement Regarding Development
Agreement are hereby approved in substantially the form
heretofore presented to the City Council, together with such
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additional details therein as may be necessary and appropriate
and such modifications thereof, deletions therefrom and
` additions thereto as may be necessary and appropriate and
approved by Bond Counsel prior to the execution of the
documents, and the Mayor and Clerk-Administrator 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 Clerk-Administrator 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 10 1984
Mayor of the Cit Falcon Heights
Attest:
`~'~,~~
-C . ~~ , y
Clerk-Administrator
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