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3. Conversion. Pursuant to the Indenture and a Forward Bond Purchase Agreement,dated on
<br /> or after December 1,2024(the"Forward Bond Purchase Agreement"),to be entered into between the City,
<br /> the Borrower, Barings Affordable Housing Mortgage Fund III LLC, or an entity affiliated therewith or
<br /> related thereto (the "Permanent Lender"), and the Trustee, the Bonds will convert from construction
<br /> financing to permanent financing (the "Conversion"). Upon the satisfaction of certain conditions to
<br /> Conversion set forth in the Indenture and the Forward Bond Purchase Agreement, (i) the Bonds shall be
<br /> subject to mandatory tender,(ii)the purchase price of the Bonds shall be paid with amounts on deposit with
<br /> the Trustee,(iii)the Bonds shall convert to permanent financing; and(iv)the Bonds registered in the name
<br /> of and delivered to the Permanent Lender. In connection with Conversion, the Borrower will execute and
<br /> deliver an Amended and Restated Promissory Note (the "Amended and Restated Promissory Note") in
<br /> favor of the City to continue to secure its obligations under the Loan Agreement which will be assigned by
<br /> the City to the Trustee (the "Amended and Restated Assignment of Note"). The Amended and Restated
<br /> Promissory Note will replace and supersede the Promissory Note.
<br /> 4. Authorization of Bonds. For the purposes set forth above, there is hereby authorized the
<br /> issuance, sale, and delivery of the Bonds in one or more series in a principal amount not to exceed
<br /> $45,000,000. The Bonds shall bear interest at the rates, shall be designated, shall be numbered, shall be
<br /> dated, shall mature, shall be in the aggregate principal amount, shall be subject to redemption prior to
<br /> maturity, shall be in such form,and shall have such other terms,details,and provisions as are prescribed in
<br /> the Indenture, in substantially the form now on file with the City, with any necessary and appropriate
<br /> variations,omissions,and insertions(including but not limited to changes to the aggregate principal amount
<br /> of the Bonds, the stated maturity of the Bonds, the interest rate or rates on the Bonds and the terms of
<br /> redemption of the Bonds)as are approved as evidenced by the execution thereof as provided in this Section
<br /> and Sections 2 and 3. The City hereby authorizes the Bonds to be issued, in whole or in part, as "tax-
<br /> exempt bonds,"the interest on which is excludable from gross income for federal and State of Minnesota
<br /> income tax purposes;provided that,if necessary,certain Bonds may be issued as taxable obligations.
<br /> The Council hereby authorizes and directs the execution of the Bonds in accordance with the terms
<br /> of the Indenture, and hereby provides that the Indenture shall provide the terms and conditions,covenants,
<br /> rights,obligations,duties,and agreements of the owners of the Bonds,the City,and the Trustee as set forth
<br /> therein. The Trustee is hereby appointed as the Paying Agent and the Bond Registrar for the Bonds.
<br /> All of the provisions of the Bonds, when executed as authorized herein, shall be deemed to be a
<br /> part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full
<br /> force and effect from the date of execution and delivery thereof. The Bonds shall be substantially in the
<br /> form in the Indenture on file with the City, which form is hereby approved, with such necessary and
<br /> appropriate variations, omissions, and insertions (including but not limited to changes to the aggregate
<br /> principal amount of the Bonds, the stated maturities of the Bonds, the interest rates on the Bonds and the
<br /> terms of redemption of the Bonds) as the Mayor and the City Administrator(the"City Officials"),in their
<br /> discretion, shall determine. The execution of the Bonds with the manual or facsimile signatures of the City
<br /> Officials and the delivery of the Bonds by the City shall be conclusive evidence of such determination.
<br /> Upon Conversion, Bonds for the permanent financing shall bear interest at the rates, shall be
<br /> designated,shall be numbered,shall be dated,shall mature,shall be in the aggregate principal amount,shall
<br /> be subject to redemption prior to maturity, shall be in such form, and shall have such other terms, details,
<br /> and provisions as are prescribed in the Indenture, in substantially the form now on file with the City, with
<br /> necessary and appropriate variations, omissions, and insertions (including changes to the aggregate
<br /> principal amount of the Bonds, the stated maturity of the Bonds, the interest rates on the Bonds and the
<br /> terms of redemption of the Bonds) as are approved as evidenced by the execution thereof as provided in
<br /> Section 7.
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<br /> SA130-295-988488.v2
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