12-19-2007 Council Agenda - Laserfiche WebLink

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Section 3.4 Repayment. Subject to the prepayment provisions set forth in the Note, the Borrower agrees to repay the Loan by making all payments of principal, interest and any premium, penalty or charge that are required to be made by the City under the Note at the times and in the amounts provided therein. All payments shall be made directly to the Lender at its principal office for the account of the City. The Borrower represents and covenants that the source of payment of the Note is from revenues derived from the operation of the Project and other amounts available to the Borrower. Section 3.5 Borrower's Obligations Unconditional. All payments required of the Borrower hereunder shall be paid without notice or demand and without setoff, counterclaim, abatement, deduction or defense. The Borrower will not suspend or discontinue any payments, and will perform and observe all of its other agreements in this Agreement, and, except as expressly permitted herein, will not terminate this Agreement for any cause, including but not limited to any acts or circumstances that may constitute failure of consideration, destruction or damage to the Project, eviction by paramount title, commercial frustration of purpose, bankruptcy or insolvency of the City or the Lender, change in the tax or other laws or administrative rulings or actions of the United States of America or of the State of Minnesota or any political subdivision thereof, or failure of the City to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or connected with this Agreement. Section 3.6 City's Fee. Before or simultaneously with the issuance of the Note, the Borrower shall pay to the City as its one -time administrative fee an amount equal to one - quarter (1/4) of one percent of the stated maximum Principal Balance of the Note in the amount of Section 3.7 Bank Qualified Bonds. Pursuant to Section 265(b)(1) of the Code, in the case of a financial institution, no deduction is allowed for the portion of the interest expense of the financial institution that is allocable to the tax - exempt interest. This provision of the Code is applicable to tax - exempt bonds (as defined in Section 150 of the Code) acquired by a financial institution after August 7, 1986. Pursuant to Section 265(b)(3) of the Code, a "qualified tax - exempt obligation" that is acquired after August 7, 1986, will be treated as if it were acquired on August 7, 1986, if: (i) the obligation is issued by a "qualified small issuer "; (ii) is a "qualified 501(c)(3) bond; and (iii) the obligation is designated by the issuer for purposes of the Section 265(b)(3) of the Code. The City many designate its obligations for purposes of Section 265(b)(3) of the Code if the City and all subordinate entities of the City, reasonably anticipates the amount of such tax - exempt bonds (excluding private activity bonds other than qualified 501(c)(3) bonds) will not exceed $10,000,000 in the same calendar year. The City reasonably anticipates that the amount of such tax - exempt bonds will not exceed $10,000,000 in calendar year 2007 and designates the Note as a qualified tax - exempt obligation for purposes of Section 265(b)(3) of the Code. In the event the City and other subordinate entities of the City issue any tax - exempt bonds in 2007 after the date of the issuance of the Note that would be eligible for designations as "qualified tax - exempt obligations" but cannot be designated as "qualified tax - exempt obligations" because the issuance of qualified 501(c)(3) bonds by City in 2007 causes the 2110583v4 10-28-