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Res 78 - 101 Bond Resolution, $215,000, Commercial Development Revenue NoteBOND RESOLUTION $215,000 COMMERCIAL DEVELOPMENT REVENUE NOTE (ESSLINGER, PROJECT) CITY OF MENDOTA HEIGHTS ADOPTED: OCTOBER 3, 1978 / � �S. �7� �a/ u (This table of contents is not a par� o� this Resalution, but is included for convenience only) TABLE OF CONTENTS �_. ARTICLE ONE - DEFINITI�NS, LEGAL AUTHORIZATION AND FINDINGS 1 Section I-I. De�initions s I Sectian 1-2. Legal Authorizatian 3 Section 1-3. �indings 3 Section 1-4. Authorization and Ratification of Project 4 ARTICLE TWO - NOTE 5 Section 2-l. Au�horized Amount and Form of Tax Exempt Note 5 Section 2-2. The Initial Tax Exempt Note 33 Sectian 2-3. Executian 13 Section 2-4. Delivery of Initial Tax Exemp� Note 13 Section 2-5. Issuance�o� New Tax Exemp� Notes 14 Section 2-6. Registration of Transf er s 14 Section 2-7. Mutilated, Lost or Destroyed Tax Exempt Note 14 Section 2-8. Ownership of Tax Exempt Note 15 Section 2-9. Limitation on �ax Exem�t Note Transfers 15 ARTICLE THREE - REDEMPTION OF NOTE BEFORE MATURITY 16 Section 3-l. Rede�nptian 16 Section 3-2. Termination of Interest 16 ARTICLE FOUR - GENERAL COVENANTS 17 Section 4-l. Paymen� of Principal and In�erest 27 Section 4-2. Performance of and Authority for Covenants 17 Section 4-3. Enforcement and Performance af Cavenants 17 Section 4-4. Nature of Security 18 ARTICLE FIVE Section Section Section Section - MISCELLANOUES 5-1. Severability 5-2. Authentication of Transcript 5-3. Registration of Resolution 5-4. Authorization to Execute Agreements Pa e 19 19 19 19 19 SIGNATURES 20 BOND RESOLUTION BE IT RESOLVED by the City Council of the City of Mendota 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. (1) Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended; (2) Assignment of Loan Agreement: the agreement to be executed by the City and the Lender assigning the Loan Agreement to the Lender; (3) Bond Counsel: the firm of Briggs and Morgan, Pro- fessional Association, of St. Paul, Minnesota, and any opinion of Bond Counsel shall be a written opinion signed by such Counsel; (4) Borrowers: Karl F. Esslinger and Teresa A. Esslinger, husband and wife, and their heirs, successors or assigns (collectively the "Borrowers" and individually "Borrower") and any transferee business entity which may assume their obligations under the Loan Agreement; (5) City: the City of Mendota Heights, Minnesota, its successors and assigns; (6) Construction Loan Agreement: the agreement to be executed by the City, Company and Lender, relating to acquisi- tion of the Project and the construction and installation of the Improvements; (7) Event of Default: any of the events described in Section 6.01 of the Loan Agreement; (8) Improvements: the building and other improve- ments to be constructed by Borrowers on the Land in accordance with the Plans and Specifications; (9) Land: the real estate described in Exhibit A attached to the Loan Agreement on which the Existing Facility is located and on which the Project is to be located; '(10) Lease: The Lease Agreement dated September 26, 1978, between the Borrower and the Tenant, relating to the lease of the Improvements. (11) Lender: American National Bank and Trust Company of Saint Paul, Minnesota, its successors and assigns; (12) Loan Agreement: the agreement to be executed by the City and the Borrowers, providing for the loan of construction funds to the Borrowers, including any amendments or supplements thereto made in accordance with its provisions; (13) Mortgage: the Mortgage and Security Agreement to be executed by the Borrowers as mortgagor, to the Lender as Mortgagee, providing for the mortgaging of the Project to secure payment of the Tax Exempt Note and interest thereon; (14) Note Register: the records kept by the City Clerk to provide for the registration of transfer of ownership of the Tax Exempt Note; (15) Plans and Specif ications: the plans and specifi- cations for the construction of the Improvements on the Project Premises, which are approved by the Lender, together with such modifications thereof and additions thereto as are reasonably determined by the Borrowers to be necessary or desirable for the completion of the Improvements and are approved by the Lender; (16) Principal Balance: so much of the principal sum __ on the Tax Exempt Note as from time to ti.me may have been advanced to or for the benefit of the City and remains unpaid; -2- (17) Project: the Land and the Improvements as they may at any time exist; (18) Resolution: this Resolution of the City adopted October 3, 1978 pursuant to which the Tax Exempt Note is authorized to be issued, togetner with any supplement or amendment thereto; and 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; (19) Tax Exempt Note: the Commercial Development Revenue Note (Esslinger Project) to be issued by the City pursuant to this Resolution, to evidence the loan of $215,000 made by Lender to the City; (20) Tenant: Esslinger & Co., Inc.r a Minnesota Corporation, its successors and assigns, which corporation will enter into the Lease with the Borrowers, and the common stock of which corporation is owned by the Borrowers. 1-2. Legal Authorization. The City is a political subdivision of the State of Mirinesota and is authorized under the Act to initiate the revenue producing project herein referred to, and to issue and sell bonds in the form of the Tax Exempt 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. �T.he City ,Council ��has ,.he-retofo._re ,dete,r.mined, and does 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 Company for the establishment within the City of a Project consisting of certain property all as more fully described in the Loan Agreement with the Borrowers 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, Assignment of Loan Agreement, Tax Exempt Note and Construction Loan Agreement, specifying the terms and conditions of the construction and financing of the Improvements to be included in the Project; (3) in authorizing the Project the City's purpose is, and in its judgment the effect thereof will be, to promote -3- the public welfare by: the encouragement and promotion of economically sound development and additional employment opportunities for residents of the City and surrounding area; and the Project has been approved by the Commissioner of Economic Development of the State of Minnesota as tending to further the purposes and policies of the Act; (4) the amount estimated to be necessary to finance the Project Costs, including the costs and estimated costs per- ' mitted by Section 474.05 of the Act, will require the issu- ance of the Tax Exempt Note in the aggregate principal amount of $215,000 as hereinaf ter provided; (5) it is desirable, feasible and consistent with the objects and purposes of the Act to issue the Tax Exempt Note for the purpose of financing the Improvements to the Project; (6) the Tax Exempt 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 Tax Exempt Note or interest thereon; and (7) the Project has been and under the terms of the Loan Agreement is required during the term of the Loan Agree- ment to continue to be used exclusively for nonsectarian purposes. 1-4. Authorization and Ratification of Pro'ect. The City has heretofore and does hereby authorize the Borrowers, in accordance wit�h the provisions of Section 474.03(6) of the Act and subject to the terms and conditions set forth in the Construction Loan Agreement, to provide for the construction of the Improvements included in the Project under the Plans and Specifications by such means as shall be available to the Borrowers and in the manner determined by the Borrowers, and without advertisement for bids as may be required for the construction and acquisition of any other municipal facilities; and the City hereby ratifies, affirms, and approves all actions heretofore taken by the Borrowers consistent with and in anticipation of such authority and in compliance with the Plans and Specifications. -4- ARTICLE TWO TAX EXEMPT NOTE 2-1. Authorized Amount and Form of Tax Exempt Note. The Tax Exempt Note issued pursuant to this Resolution shall be in substantially the form set forth herein, with such appropriate variations, omissions and insertions as are perm_itted or required by this Resolution, and in accordance with the further provisions of this Article; and the total principal amount of the Tax Exempt Note that may be outstanding hereunder is expressly limited to $215,000 unless a duplicate Tax Exempt Note is issued pursuant to Section 2-7. Said Tax Exempt Note shall be in substantially the following form: -5- UNITED STATES OF AMERICA STATE OF MSNNESOTA CCiUNTY OF DAK�TA CITY OF MENDOTA HEIGHTS Commerical Development Revenue Note of 1978 (Esslinger Project) $215,000 FOR VALUE RECEIVED the City of Mendota Fieights, Dakata County, Minnesota, hereby promises to pay to the order af American National Bank and Trust Company {the "Payee"), Saint Paul, Minnesata, its succes�ors or registered assigns, from the source and in the manner hereinafter provided, the principal sum of TWO IiUNDRED AND FIFTEEN THOUSAND DOLLARS� ($215,000.00), or �o much thereof as may have been advanced to or for the benefit of the City and remains unpaid from time to time (the "Principal Balance"), with interest thereon at the rate of eight and twenty-five hundredths percent {8.25�} per annum, in any coin or currency which at the time or times o� payment is legal tender for the payment of public or private debts in the United States of America, and in accordance wi�h the terms hereinafter set forth. 1. (a) From and after the date hereof and until the "Amortization Date", (the first day of the calendar month next succeed3.ng completion of the Project in accordance with the Can,struction Loan Agreement hereinafter referred to, but in any event no later than March 1, 1979 unless extended by the Payee}, the City shall pay interest only upon the Principai Balance at the rate of�ei,ghtsand �wenty-�ive hundredths percent {8.25�) per annum, Said interest shalZ accrue from and after the date of each and every advance so made under this Note and shall be payable on the first day of the calendar rnonth next suceeeding the date ugon which the first advance is made, and on the first day of each and every month therea�ter, {b} From and after the Amortiaation Date, this Note shall be amor�.ized and paid in 240 equal month].y in- stal.lments of One Thousand Eight Hundred and Thirty-One Dollars and ninety-five cents ($I,83I.95}, payable on the first day of � each month commencing on the first day of the calendar month next succeeding the Amortization Date and continuing until the Principal Balance and accrued interest thereon shall have been paid (the "Final Maturity Date"). Payments shall be applied first to interest due on the Principal Balance and thereafter to reduction of the Principal Balance. (c) If the interest on this Note should become subject to federal or Minnesota state income taxation pursuant to a"Determination of Taxability" as that term is defined in Section 4.07 of the Loan Agreement, upon receipt by the Borrower from the Payee of notice of the "Determination of Taxability," the interest rate shall be immediately increased to ten and fif ty hundredths percent (10.50�) per annum, and each monthly installment thereafter payable shall be accordingly increased to amortize the remaining Principal Balance by the Final Maturity Date with interest at said increased rate; and in addition the Payee shall be entitled to receive an amount equal to the aggregate difference between (i) the monthly payments theretofore made to the Payee on this Note between the "Date of Taxability" as that term is defined in the Loan Agreement and the effective date of the rate increase and (ii) the monthly payments which would have been made during such period if the increased rate had been in effect; all as provided in Section 4.07 of the Loan Agreement hereinafter referred to. 2. Interest shall be computed on the basis of a 30 day month and a 360 day year, but charged for the actual number of days principal is unpaid. 3. If the Payee should not receive on the first day of any month all of the principal and interest then due on the No,te, and .if � the AC�ity �should •cont-inue to be in arrears • through the tenth day of such month, then, in addition to all other sums due hereunder, the Payee shall be entitled to receive on the eleventh day of such month a service charge equal to four percent (4.00$) of the delinquent principal and interest. 4. Principal and interest and any penalty or premium due hereunder shall be payable at the principal office of the Payee, or at such other place as the Payee may designate in writing. 5. This Note is issued by the City to provide funds for a Praject, as defined in �ection 474.02, Subdivision 1(a} Minnesota Statutes, consisting of the construction af an office-warehau�e facility, under a Loan Agreement of even date herewith between the Payee, the City, and Karl F. and Teresa A. Esslinger {the latter twa individuals the "Barrowers"}, and thi� Note is further issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly Chapter 4i4, Minnesota Statutes, and pursuant to resolution of the City Council duly adopted on September 5, I978 {the "Resoluta.on" } . 6. This Note is secured by an assignment of the Loan Agreement by the City to the Payee, by a Mortgage of even date herewith between Karl F. Esslinger and Teresa A. Esslin- ger ("Esslingers"), as Mortgagor, and the Payee as Mortgagee, by a Guarantee Agreement between the Esslingers and the Payee, by an Assignment of Life Insurance Agreement between Karl A. Esslinger and the Payee and by an Assignment of Leases and Ren�s from the Borrowers to the Payee. The disbursement of the proceeds of the loan covered by this Note is subject to the terms and conditions of a Canstruction Loan Agreement o� even date herewith between the Payee, City and Borrower. 7. The Payee may extend the ta.mes of payments of interest andjar pr3nczpal of or any penalty or premium due on thi� Note, without notice to ar cansent of any party liable hereon and without releasing any such party. 8. This Note may be prepaid at any time, eithsr in whole or in part, but in case af prepayment of any amount or amounts in any cal.endar year the total of which �xceeds 20� of said ora.ginal Principal Ba2ance as of Amortization Date, then there shall also be paid, over and above the interest accrued under the terms of this Note, a premium in an amount equal to the interest for 1$0 days, at the rate a� which interest is at the time of such prepayment being paid on this Note, on �hat portion of such total prepayment which is in excess of 20� of said original Principal Balance. Any such prepayment shall be applied first to accrued interest with the balance appiied to installments of principal in the inverse order of their maturity. . 9. This Note is further subject to prepayment, with- out a premium, in whole or in part, upon the occurrence of , certain events of damage, destruction or condemnation to the " Project, or, in whole but not in part, upon the Borrower receiving notice fram the Payee that the interest on the Note is subject to �ederal or Minnesota state income taxation pursuant to a"Determination of Taxability," all as specified in the Laan Agreement and Resoiution. � . 10. No prepayment which does not result in the entire Principal Balance and interest thereon and any applicable prepayment premium being paid in full shall reduce the amount of the monthly payments due hereunder pursuant to paragraph 2 hereof, which payments shall continue until the entire Principal Balance has been paid. Notice of prepayment of this Note in whole or part shall be given in accordance with the terms of the Resolution. _• 11. As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the City at the office of the City Clerk, by the Payee in person or by his agent duly authorized in writing, at the Payee's expense, upon surrender hereof together with a written instrument of trnasfer satisfactory to the City Clerk, duly executed by the Payee or his duly authorized agent. Upon such transfer the City Clerk will note the date of registration and the name and address of the new registered Payee in the registration blank appearing below. Alternatively, the City will at the request of the Payee and at the Payee's expense issue new notes in aggregate principal amount equal to the unpaid Principal Balance of this Note, and of Iike tenor except as to number, principal amount, and the amount of the monthly installments payable thereunder, and registered in the name of the Payee or such transferee as may be designated by the Payee. 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 account of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Payee or upon his order shall be valid and effectual to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. � 12. All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, Mortgage, Assignment of Leases and Rents, Loan Agreement, Guaranty Agreement, Assignment of Life Insurance Agreement and 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. �� I 13. This Note and interest thereon and any penalty or premium due hereunder are payable solely from the revenues ; and proceeds derived from the Loan Agreement, the Mortgage, and Assignment of Leases and Rents, and the Guaranty Agree- t ment, Assignment of Life Insurance Agreement and do not � i � constitute a debt of the City within the meaning of any constitutional or statutory limitation, are not payable from or a charge upon any funds other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the City nor, 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 thereon, or to , enforce payment thereof against any property of the City, and this Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shal.l 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. 14. It is agreed that time is of the essence of this Note. In the event of failure by the City to pay any monthly installment of principal or interest within ten days after the due date, or any premium or penalty due hereunder, or if an Event of Default shall occur, as defined in the Mortgage, the Assignment of Leases and Rents, or in the Loan Agreement, then the Payee shall have the right and option to declare, upon ten (10) days written notice, all the remaining indebtedness of unpaid nrincipal and accrued interest, evidenced by this Note, immediately due and payable. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. 15. The remedies of the Payee, as provided herein and in the Mortgage, Assignment of Leases and Rents, Loan Agreement, Guaranty Agreement, Life Insurance Assignment Agreement and Construction Loan Agreement, shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Payee, and may be exercised as of ten 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. 16. The Payee 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 writir.g and signed by the holder and, then only to the extent specifically -10- 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. 17. The Note has been issued without registra- tion under state or other securities laws, pursuant to an exemption for �uch 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 �o any participation agreement, except in accordance with applicable registration requirements or an applicable exemption �rom such registration requirements. TT IS HEREBY CERTIFSED AND REC�TED tha� all conditions, acts and things required to exist, happen and be per�ormed 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. TN W2TNE�S WHEREOF, the City has caused this Note to be duly executed in its name by the manual signatures of the Mayor and City Clerk and the corporate seal to be a£fixed hereto, and has caused this Note to be dated October , 1g7$. Counter�igned City Clerk (SEAL) CITY 4F MENDflTA HEIGHTS, MITtNES{3TA -11- Mayor . a . S PROVISIONS AS TO REGISTRATION The ownership of the unpaid Principal Balance of this Note and the interest accruing thereon is registered on the books of the City of Mendota Heights in the name of the holder last noted below. Date of Name of Registration Registered Owner American National Bank and Trust Company -12- Signature of City Clerk and in the be subject therein. 2-2. The Initial Tax Exempt Note. The Tax Exempt Note shall be payable at the times manner, shall bear interest at the rate, and shall to such other terms and conditions as are set forth 2-3. Execution. The Tax Exempt Note shall be executed on behalf of the City by the signatures of its Mayor and City Clerk and shall be sealed'with the seal of the City. In case any officer whose signature shall appear on the.Tax Exempt Note shall cease to be such officer before the delivery of the Tax Exempt Note, such signature shall nevertheless be valid and sufficient for all purposes, the same as if he had remained in office until delivery. 2-4. Delivery of Initial Tax Exempt Note. Before delivery of the Tax Exempt Note of this issue there shall be filed with the City Clerk the following items: (1) (A) an original of the Loan Agreement and Assign- ment of the same; (B) an original of the Mortgage with evidence to establish that the same has been recorded in the office of the County Recorder of Dakota County, Minnesota; (C) an original of the Construction Loan Agreement, Guaranty Agreement and Assignment of Life Insurance Agreement; (D) an original of the Assignment of Leases and Rents; (2) an opinion of Counsel that the Borrowers have good and marketable title to the premises described in Exhibit A, free and clear of all liens and encumbrances except encumbrances approved by the Lender; (3) an opinion of Counsel for the Borrowers in scope and substance reasonably satisfactory to Bond Counsel as to the authority of the Borrower to enter into the Loan Agreement, Mortgage, Construction Loan Agreement, Guaranty Agreement and Assignment of Life Insurance Agreement and other related matters; -13- (4) the manually signed opinion of Bond Counsel approv- ing the legality of the Tax Exempt Note issued pursuant to this Resolution; (5) such other documents and opinions as Bond Counsel may reasonably require for purposes of rendering its opinion required in subsection (4) above. Upon delivery of the Tax Exempt Note, the Lender shall, on behalf of the City, advance funds for payment of Project Costs upon receipt of such supporting documentation as the Lender may deem reasonably necessary, incl�ding compliance with the provisions of the Construction Loan Agreement. The Lender or Borrower shall provide the City with a full accounting of all funds disbursed for Project Costs. 2-5. Issuance of New Tax Exempt Notes. Subject to the provisions of Section 2-9, the City shall, at the request and expense of the holder issue new tax exempt notes, in aggregate outstanding principal amount equal to that of the Tax Exempt Note surrendered, and of like tenor except as to number, principal amount, and the amount of the monthly installments payable thereunder, and registered in the name of the holder or such transferee as may be designated by the holder. 2-6. Registration of Transfer. The City will cause to be kept at the office of the City Clerk a Note Register in which, subject to such reason- able regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Tax Exempt Note. Said Tax Exempt Note shall be transferable upon the Note Register by the holder thereof in person or by its attorney duly authorized in writing, upon surrender of the Tax Exempt Note together with a written instrument of transfer satisfactory to the City Clerk, duly executed by the holder of its duly authorized attorney. Upon such trnasfer the City Clerk shall note the date of registration and the name and address of the new holder in the Tax Exempt Note Register and in the registration blank appearing on the Tax Exempt Note. 2-7. Mutilated, Lost or Destroyed Tax Exempt Note. In case any Tax Exempt 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 deliver- ed, a new Tax Exempt Note of like outstanding principal -14- amaunt, number and tenor in exchange and substitution for and upon cancellation of such mutilated Tax Exempt Note, or in lieu of and in substitution for such Tax Exempt Note destroyed or lost, upon the holder's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Tax Exempt Note destroyed or lost, the filing with the City of evidence satisfactory to the City that such Tax Exempt Note was destroyed or lost, and furnishing the City with indemnity satisf actory to it. If the mutilated, destroyed or lost Tax Exempt Note has already matured or been called for redemption in accordance with its terms it shall not be , necessary to issue a new Tax Exempt Note prior to payment. 2-8. Ownership of Tax Exempt Note. The City may deem and treat the person in whose name each Tax Exempt Note is last registered in the Note Register and by notation on the Tax Exempt Note whether or not such Tax Exempt Note shall be overdue, as the absolute owner of such Tax Exempt 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 Tax Exempt Note Transfers. The Tax Exempt Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance. The City acknowledges that the Lender may, however and shall have the right to, sell participation interests in the Promissory Note and the Tax Exempt Note. The Lender covenants and agrees, however, that all such sales shall be in accordance with all laws and regulations under which it operates as a bank in compliance with applicable feder.al �.and state ,s�ecur.ities laws and in such a manner, in the opinion of counsel acceptable to the Bond Counsel, that the interest on the Tax Exempt Note will not become subject to registration or federal or state income taxes. In the event any of Lender's participants shall require any additional items, the City shall use all reasonable efforts to obtain and deliver such items. All expenses incurred by the City pursuant to this Section shall be paid or reimbursed by the Borrowers. -15- ARTICLE THREE REDEMPTION OF TAX EXEMPT NOTE BEFORE MATURITY 3-1. Redemption. (1) In the event of (a) damage to or destruction of the Project or Condemnation of the Project or any part thereof and (b) restoration is not required or the Borrowers do not elect to restore the Project pursuant to Section 2.03 of the Mort- � gage, the Tax Exempt Note shall be subject to prepayment by the City from funds furnished by the Borrowers at the time, to the extent and in the manner set forth in Section 5.02 of the Loan Agreement. (2) The Tax Exempt Note may be prepaid at any time, sub- ject, however, to the provisions of the Tax Exempt Note. 3-2. Termination of Interest. Upon deposit of the redemption price with the Mort- gagee and the giving of any notice required by law, the princi- pal amounts prepaid shall, after such date, cease to bear interest. -16- ARTICLE FOUR GENERAL COVENANTS 4-1. Payment of Principal and Interest. The City covenants that it will promptly pay or cause ta be paid the principal of ana interest on the Tax Exempt Note at the place, on the dates and in the manner provided herein and in said Tax Exempt Note. The principal and interest are payable solely from revenues and proceeds derived from the Loan Agreemen� covering the Project and the Borrowers' mortgage thereof, which revenues and proceeds are her�by specifically pledged to the payment thereof in the manner and to the extent speci�ied in �he Tax Exempt Note and Mortgag�, and nothing in the Tax Exempt Note or in this Resolution shail be considered as assigning, p2edging or otherwise encumbering any other funds or assets of the City, 4-2. Per�ormance of and Authority for Covenants. The City covenant� that it will faithfully perform at all times any and al1 cavenants, unaertakingsl stipulations and provisians containea in this Resolution, in the Tax Exempt Note executed, authenticatea and delivered hereunder and in ail proceeazngs of the City Council pertaining thereta; that it is duly autharized under the Constitution and laws of �he State a£ Minnesota inc�uding particularly and without limitation the Act, to issue the Tax Exempt Note autharized hereby, pledge �he revenues and assign the Loan Agreement in the manner and to the extent set forth in �his Resolution, the Tax Exempt Note, the Mortgage and �he Assignment of Loan ,Agreement; that allwaction an its part fo:r.the issuance of the Tax Exempt Note and for the execution and delivery thereof has been duly and e�f ec�ively taken; and that the Tax Exempt Note in the hands of the holder thereof is and will be a valid and enforceable ohlzgation of the City according to the terms thereof. 4-3. Enforcement and Performance of Covenan�s. The City agrees to enforce all covenants and obli- gations of the Borrower under the Loan Agreement and Construc- tion Loan Agreement, and to perform all cavenants and other provisions contained in the Tax Exempt Note, the Loan Agreement and the Canstructian Loan Agreement. -17- 4-4. Nature of Security. Notwithstanding anything contained in the Tax Exempt Note, Mortgage, Loan Agreement or any other document referred to in Section 2-4 to the contrary, under the provisions of the Act the Tax Exempt Note may not be payable from or be a charge upon any funds of the City other than the revenues pledged to the payment thereof, nor shall the City be subject to any liability thereon, nor shall the Tax Exempt Note otherwise contribute or give rise to a pecuniary liabi'lity of the City or, to the extent permitted by law, any of the City's officers, employees and agents. No holder of the Tax Exempt Note shall ever have the right to compel any exercise of taxing power of the City to pay the Tax Exempt Note or the interest thereon, or to enforce payment thereof against any property of the City; and the Tax Exempt Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Tax Exempt 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 holder of the Tax Exempt Note to enforce the covenants made for the security thereof as provided in this Resolution, the Mortgage and in the Act, and by authority of the Act the City has made the covenants and agreements herein for the benefit of the holder of the Tax Exempt Note; provided that in any event, the agreement of the City to perform the covenants and other provisions contained in the Tax Exempt Note, the Loan 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. -18- � � ARTICLE FIVE MISCELLANEOUS 5-1. Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unen- forceable as applied in any particular case in any jurisdic- tion or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions or 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 pro- vision 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. 5-2. Authentication of Transcri t. The officers of the City are directed to furnish to Bond Counsel certified copies of this Resolution and all docu- ments referred to herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Tax Exempt 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. 5-3. Registration of Resolution. The City C.lerk is authorized and directed to cause a copy of this Resolution to be filed with the County Auditor of Dakota County, and to obtain from said County Auditor a certi- ficate that the Tax Exempt Note as a bond of the City has been duly entered upon his bond register. 5-4. Authorization to Execute A reements. The forms of the proposed Loan Agreement, Construc- - tion Loan Agreement and Assignment of Loan Agreement are hereby approved and the Mayor and Administrator of the City are authorized to execute the same in the name of and on -19- � . behalf of the City and such other doculents as Bond Counsel consider appropriate in connection with the issuance of the Tax Exempt Note. In the event of the absence or disability of the Mayor or 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 officials. Adopted: October 3, 1978. Attest: �'.���, � �. _� City Clerk /������o���� Mayor of the City of Mendota Heights -20-