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2007-50 Extract of Minutes of a Meeting of the City Council of the City of Chanhassen Pursuant to due call and notice thereof, a regular meeting of the City Council of the City of Chanhassen was duly held in the City of Chanhassen, Minnesota, on Monday, July 23,2007, at 7:00 o'clock P.M. The following members were present: Mayor Furlong and council members Ernst, Litsey, Peterson and Tjomhom. and the following were absent: None During said meeting council member Peterson introduced the following resolution and moved its adoption: RESOLUTION NO. 2007-50 RESOLUTION APPROVING THE ISSUANCE AND SALE OF THE $6,300,000 EDUCATIONAL FACILITIES REVENUE NOTE, SERIES 2007 AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO (ST. HUBERT SCHOOL PROJECT) The motion for the adoption of the foregoing resolution was duly seconded by council member Ernst, and after full discussion thereof and upon vote being taken thereon, the following voted in favor thereof: Mayor Furlong and council members Ernst, Litsey, Peterson and Tjomhom and the following voted against the same: none whereupon said resolution was declared duly passed and adopted. 2047513vl RESOLUTION APPROVING THE ISSUANCE AND SALE OF THE $6,300,000 EDUCATIONAL FACILITIES REVENUE NOTE, SERIES 2007 AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO (ST. HUBERT SCHOOL PROJECT) WHEREAS, (a) Minnesota Statutes, Sections 469.152 to 469.1651, as amended (the "Act) authorizes cities to issue revenue bonds to finance industrial development projects to promote the welfare of the state by the active development of economically sound industry and commerce to meet the needs of an increasing population and the need for development of land use which will provide an adequate tax base to finance the increasing cost of governmental services and access to employment opportunities for such population; (b) Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land use which will provide an adequate tax base to finance these increased costs and the need for access to education and employment opportunities for such population; (c) The City Council of the City of Chanhassen, Minnesota (the "City") has received from St. Hubert Catholic Community, a Minnesota religious corporation (the "Borrower"), a proposal that the City assist in financing a Project hereinafter described through the issuance of a revenue note or obligation (in one or more series) (the "Note"), pursuant to the Act. The project to be financed by the Note is the refinancing of outstanding debt used to finance the acquisition, construction and equipping of the St. Hubert School facility located at 8201 Main Street in the City (the "Project"). The Project is owned and operated by the Borrower (d) The City desires to facilitate the selective development of the community, promote education for children, retain and improve the tax base and help to provide the range of services and employment opportunities required by the population; and the Project will assist the City in achieving those objectives and will enhance the image and reputation of the community; (e) The City has been advised by representatives of the Borrower that with the aid of municipal financing, and its resulting low borrowing cost, the Project is economically more feasible; (f) No public official of the City has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project. BE IT RESOLVED by the City Council of the City of Chanhassen, Minnesota (the "City"), as follows: 2047513vl 2 SECTION 1. LEGAL AUTHORIZATION AND FINDINGS. 1.1 Findings. The City hereby finds, determines and declares as follows: (a) The City is a political subdivision of the State of Minnesota and is authorized under the Act to assist the revenue producing project herein referred to, and to issue and sell the Note, as hereinafter defined, for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution. (b) As required by the Act and Section 147(f) of the Internal Revenue Code of 1986, as amended (the "Code"), the City has, on this same date, held a public hearing on the issuance of one or more revenue notes to finance the Project. (c) On the basis of information available to the City it appears, and the City hereby finds, that the Project constitutes properties, real and personal, used or useful in connection with a revenue producing enterprise within the meaning of Subdivision 2(b) of Section 469.153 of the Act; that the availability of financing under the Act and the willingness of the City to furnish the financing will be a substantial inducement to the Borrower to undertake the Project, and that the effect of the Project, if undertaken, will be to encourage the development of economically sound industry and commerce, to assist in the prevention of the emergence of blighted and marginal land, to help prevent chronic unemployment, to help the region retain and improve the tax base, to provide the range of services and employment opportunities required by the population and to help prevent the movement of talented and educated persons out of the state and to areas within the state where their services may not be as effectively used and to promote more intensive development and use of land within the region. (d) The issuance and sale of its approximately $6,300,000 Educational Facilities Revenue Note, Series 2007 (St. Hubert School Project) (the "Note") by the City, pursuant to the Act, is in the best interest of the City, and the City hereby determines to issue the Note and to sell the Note to KleinBank (the "Lender"), as provided herein. The City will loan the proceeds of the Note (the "Loan") to the Borrower in order to finance the Project. (e) Pursuant to a Loan Agreement (the "Loan Agreement") to be entered into between the City and the Borrower, the Borrower has agreed to repay the Note in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. In addition, the Loan Agreement contains provisions relating to the maintenance and operation of the Project, indemnification, insurance, and other agreements and covenants which are required or permitted by the Act and which the City and the Borrower deem necessary or desirable for the financing of the Project. A draft of the Loan Agreement has been submitted to the City Council. (f) Pursuant to a Pledge Agreement to be entered into between the City and the Lender, the City has pledged and granted a security interest in all of its rights, title, and interest in the Loan Agreement to the Lender (except for certain rights of 2047513vl 3 indemnification and to reimbursement for certain costs and expenses). A draft of the Pledge Agreement has been submitted to the City Council. (g) Pursuant to a Mortgage, Assignment of Leases and Rents, Security Agreement and Fixture Financing Statement (the "Mortgage") to be executed by the Borrower in favor of the Lender, the Borrower has secured payment of amounts due under the Loan Agreement and Note by granting to the Lender a mortgage and security interest in the property described therein. A draft of the Mortgage has been submitted to the City Council. (h) The Note will be a special limited obligation of the City. The Note shall not be payable from or charged upon any funds other than the revenues pledged to the payment thereof, nor shall the City be 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 pay the Note or the interest thereon, nor to enforce payment thereof against any property of the City. The Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. (i) It is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of financing the costs of the Project. (j) Nothing in this resolution or the documents prepared pursuant hereto shall authorize the expenditure of any municipal funds on the Project other than the revenues derived from the Project or otherwise granted to the City for this purpose. The Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property or funds of the City except the revenue and proceeds pledged to the payment thereof, nor shall the City be subject to any liability thereon. The holder of the Note shall never have the right to compel any exercise of the taxing power of the City to pay the outstanding principal on the Note or the interest thereon, or to enforce payment thereon against any property of the City, except such property as may be expressly pledged for the security of the Note. The Note shall recite in substance that the Note, including the interest thereon, are payable solely from the revenue derived from the Project and pledged to the payment thereof. The Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. 1.2 Authorization and Ratification of Proiect. The City has heretofore and does hereby authorize the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions imposed by the Lender, to provide for the acquisition, construction and equipping of the Project 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, acquisition and equipping of other 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. SECTION 2. THE NOTE. 2047513v] 4 2.1 Authorized Amount and Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form submitted to the City Council 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 aggregate principal amount of the Note that may be outstanding hereunder is expressly limited to $6,300,000, unless a duplicate Note is issued pursuant to Section 2.7. 2.2 The Note. The Note shall be dated as of the date of delivery to the Lender, 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 Manager and shall be sealed with the seal of the City; provided that the seal may be intentionally omitted as provided by law. 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 Manager 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 Initial 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: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Mortgage; (2) an opinion of Counsel for the Borrower as prescribed by the Lender and Bond Counsel; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; (4) a 501(c)(3) determination letter from the Internal Revenue Service evidencing that the Borrower is exempt from income taxation under Section 501(c)(3) of the Code; (5) 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. Upon delivery of the Note to Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note for payment of Project Costs in accordance with the terms of the Loan Agreement. 2047513vl 5 2.6 Registration of Transfer. The City will cause to be kept at the office of the City Manager 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 by the Lender in person or by its agent duly authorized in writing, upon surrender of the Note together with a written instrument of transfer satisfactory to the City Manager, 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 Chanhassen, 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 is made in accordance with the provisions of Section 2.9 of the Resolution authorizing the issuance of the Note. Dated: Registered Owner Upon such transfer the City Manager 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 Destroved 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 connection 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, 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 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 (i) in amounts not less than $100,000, (ii) not more than 35 persons each of whom have knowledge and experience in financial business matters and that are capable of evaluating the merits and rules of the 2047513vl 6 investment in the Note and are not purchasing for more than one account or with a view to distributing the Note or their interest therein. Any such sale, assignment or participation shall also be (i) in full good faith compliance with all securities registration, broker, anti-fraud and other provisions of the applicable state and federal laws, (ii) with full and accurate disclosure of all material facts to the prospective purchaser(s) or transferee(s), and (iii) under effective federal and state registration statements (which neither the City nor the Borrower shall in any way be obligated to provide) or under exemptions from such registrations. 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the City shall, at the request and expense of the Lender, issue new notes, in aggregate outstanding principal amount equal to that of the 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 Lender or such transferee as may be designated by the Lender. SECTION 3. MISCELLANEOUS. 3.1 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. 3.2 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. 3.3 Authorization to Execute Agreements. The forms of the proposed Loan Agreement, the Pledge Agreement and the Mortgage are hereby approved in substantially the form heretofore presented to the City Council, together with such 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 Manager of the City are authorized to execute the Loan Agreement and the Pledge 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 Manager 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. 2047513vl 7 3.4 Qualified Tax Exempt Obligation. In order to qualify the Note as a "qualified tax-exempt obligation" within the meaning of Section 265(b )(3) of the Internal Revenue Code of 1986, as amended (the "Code"), the City hereby makes the following factual statements and representations; (a) the Note is not treated as a "private activity bond" under Section 265(b)(3) of the Code; (b) the City hereby designates the Note as a qualified tax-exempt obligation for purposes of Section 265(b )(3) of the Code; (c) the reasonably anticipated amount of tax-exempt obligations (other than obligations described in clause (ii) of Section 265(b)(3)(C) of the Code) which will be issued by the City (and all entities whose obligations will be aggregated with those of the City) during the calendar year 2007 will not exceed $10,000,000; and (d) not more than $10,000,000 of obligations issued by the City during the calendar year 2007 have been designated for purposes of Section 265(b )(3) of the Code. of July, 2007. Adopted by the City council of the City of Chanhassen, Minnesota, this 23rd day lLA~ Mayor ~: 'W Ity Manager 2047513vl 8 STATE OF MINNESOTA COUNTIES OF CARVER AND HENNEPIN CITY OF CHANHASSEN I, the undersigned, being the duly qualified and acting Manager of the City of Chanhassen, DO HEREBY CERTIFY that I have compared the attached and foregoing extract of minutes with the original thereof on file in my office, and that the same is a full, true and complete transcript of the minutes of a meeting of the City Council duly called and held on the date therein indicated, insofar as such minutes relate to a resolution authorizing the issuance of a revenue note. WITNESS my hand this 23rd day of July, 2007. 2047513vl 9