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Extract of Minutes of a Meeting of the
City Council of the City
of Chanhassen, Minnesota
~e..sDlL-lt\o~ '63-65'
Pursuant to due call and notice thereof, a
reqular
meeting of the City Council of the City of Chanhassen,
Minnesota, was duly called and held at the City Hall in said
City on Monday, the 2lst day of November, 1983, at 7:30 o'clock
P.M.
The following members were present: Acting Mayor
Geving, Councilmembers Watson, Swenson and Horn.
and the following were absent: Mayor Hamilton
Councilmember
Horn
introduced the
following resolution and moved its adoption:
FINAL NOTE RESOLUTION
$l,450,000 COMMERCIAL DEVELOPMENT REVENUE NOTE OF 1983
(CHANHASSEN LAKE BUSINESS CENTER PROJECT)
The motion for the adoption of the foregoing resolu-
tion was duly seconded by Councilmember
, and
Swenson
upon vote being taken thereon the following voted in favor
thereof:
Acting Mayor Geving, Councilmembers Swenson,
Watson and Horn.
and the following voted against the same:
None
whereupon said resolution was declared duly passed and adopted.
.
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FINAL NOTE RESOLUTION
CITY OF CHANHASSEN
$1,450,000 COMMERCIAL DEVELOPMENT REVENUE NOTE
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(CHANHASSEN LAKE BUSINESS CENTER PROJECT)
ADOPTED: November 2l, 1983
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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
ARTICLE ONE - DEFINITIONS, LEGAL AUTHORIZATION
AND FINDINGS....................................
Section 1-1.
Section l-2.
Section 1-3.
Section 1-4.
Definitions..................... .
Legal Authorization..............
Findings. . . . . . . . . . . . . . . . . . . . . . . . .
Authorization and Ratification
of Pro j ect. . . . . . . . . . . . . . . . . . . . . . .
ARTICLE '!WO - NOTE...................................
Section 2-1. Authorized Amount and Form
Section 2-2.
Section 2-3.
Section 2-4.
Section 2-5.
e Section 2-6.
Section 2-7.
Section 2-8.
Section 2-9.
of Note..........................
The Note.........................
Execu t ion. . . . . . . . . . . . . . . . . . . . . . . .
Delivery of Note.................
Disposition of Note Proceeds.....
Registration of Transfer.........
Mutilated, Lost or Destroyed
No t e. . .. .........................
Ownership of Note................
Limitation on Note Transfers.....
~RTICLE THREE - GENERAL COVENANTS. .....................
Section 3-1. Payment of Principal and Interest.
Section 3-2. Performance of and Authority
for Covenants.....................
Section 3-3.
Section 3-4.
Performance of Covenants..........
Nature of Security................
Page
1
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3
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4
6
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18
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19
19
20
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20
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21
21
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~RTICLE FOUR - MISCELLANEOUS. ......................... 23
Section 4-1. Severability...................... 23
Section 4-2. Authentication of Transcript. ..... 23
Section 4-3. Registration of Resolution........ 23
Section 4-4. Authorization to Execute
Agreements. . . . . . . . . . . . . . . . . . . . . . . . 23
SIGNA TUR E S. . . . . .. . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 24
re
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NOTE RESOLUTION
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BE IT RESOLVED by the City Council of the City of
Chanhassen, Minnesota, as follows:
ARTICLE ONE
DEFINITIONS, LEGAL AUTHORIZATION AND FINDINGS
l-l. Definitions.
The terms used herein, unless the context hereof
requires 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,
Hinneseta Statutes, Chapter 474, as amended:
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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: the firm of Briggs and Morgan, Professional
Association, of Saint Paul and Minneapolis, Minnesota, and any
opinion of Bond Counsel shall be a written opinion signed by
such Counsel:
Borrower: Alscor Investors Joint Venture, a Minnesota
partnership, its successors, assigns, and any surviving,
resulting or transferee business entity which may assume its
obligations in accordance with the provisions of the Loan
Agreement:
City: the City of Chanhassen, Minnesota, its successors
and assigns:
Equipment: any and all machinery, equipment, furniture
and other tangible personal property purchased or to be
purchased by the Borrower with the proceeds of the Loan,
including, without limitation, those items of machinery, equip-
ment, furniture and other personal property more particularly
listed and described on Granting Clause B of the Mortgage:
Improvements: the approximately 5l,140 square foot
office/warehouse building and other improvements, including the
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Equipment and any other tangible personal property and fix-
tures, 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;
Lender: Investors Syndicate of America, Inc., a Delaware
corporation, 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 and 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;
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Note: the $l,450,OOO Commercial Development Revenue Note
of 19~Chanhassen Lake Business Center Project}, to be issued
by the City pursuant to this Resolution and the Loan Agreement;
Note Register: the records kept by the City Manager/Clerk
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 City's interest
in the Loan Agreement to the Lender to the extent provided
therein;
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; and
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Resolution: this Resolution of the City adopted
November 2l, 1983, 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
Resolution as originally adopted. 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 does
hereby determine, as follows:
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(I) 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 construction 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 and the Note, which
documents specify the terms and conditions of the acquisition
and financing of the Improvements to be included in the
Project:
(3) After publication of notice of a public hearing, the
City did conduct a public hearing on the Project on November
21, 1983 and all parties in attendance were given an
opportunity to express their views with respect to the same;
(4) 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
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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 community in which the Project is
situated;
(5) 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 $1,450,000 as
hereinafter provided;
(6) 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 Improvements to be included
in the Project;
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(7) 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
(8) 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.
l-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 to provide for the construction and
installation of the Improvements to be included in 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
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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
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NOTE
Authorized Amount and Form of Note.
2-l.
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 $1,450,000 unless a duplicate Note is
issued pursuant to Section 2-7. The Note shall be in
substantially the following form:
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CITY OF CHANHASSEN
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COMMERCIAL DEVELOPMENT REVENUE NOTE
(CHANHASSEN LAKE BUSINESS CENTER PROJECT)
FOR VALUE RECEIVED, the City of Chanhassen, Minnesota a
municipal corporation and political subdivision of the State of
Minnesota (the "City") hereby agrees and promises to pay to
Investors Syndicate of America, Inc., a Delaware corporation,
or its registered assigns (the "Holder") at its principal
office at IDS Tower, Minneapolis, Minnesota 55402, or such
other place as the Holder, or its register~ assigns, may from
time to time designate in writing, solely from the source and
in the manner hereinafter provided, the principal sum of One
Million Four Hundred Fifty Thousand and 00/100 Dollars
($1,450,000.00), and to pay, solely from the source and in the
manner hereinafter provided, interest on the unpaid principal
balance from the date hereof until this Note is fully paid at
the rate of ten and one-half percent (10 1/2%) per annum. Both
the unpaid principal balance and interest thereon shall be
payable in coin or currency which at the time of payment is
legal tender for the payment of public and private debts in the
United States of America. The principal of and interest on
this Note are payable in installments due as follows:
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(1) On the first day of the first calendar month
subsequent to the date of the initial sale of this
Note, there shall be paid an interest only payment
equal to interest accrued from the date hereof to the
first day of said month.
(2) On the first day of the second calendar month
subsequent to the date of the initial sale of this
Note, and on the first day of each month thereafter,
there shall be paid a monthly principal and interest
payment equal to Thirteen Thousand Two Hundred Sixty-
Three and 72/l00 Dollars ($13,263.72), until
November 1, 2013, on which date the entire unpaid
principal balance, together with accrued interest if
not sooner paid, shall become due and payable.
If the Holder receives notice of a Determination of
Taxability (as defined in the Loan Agreement) and notifies the
Borrower, as defined below, in writing of the Determination of
Taxability, the rate of interest then payable under this Note
shall automatically be changed, effective as of the Date of
Taxability (as defined in the Loan Agreement), to a per annum
rate equal to fourteen percent (14%) per annum. The monthly
installment payments of interest and principal required in
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paragraphs (l) and (2) of this Note from and after the Date of
Taxability shall be recomputed at such modified interest rate,
and the City shall promptly pay to the Holder hereof and to any
prior Holder affected thereby, as their interests may appear,
at the address listed in its books, and solely from the source
and in the manner hereinafter provided, within ten (lO) days
after receipt of a notice setting forth the amount of such
difference, the aggregate difference between (i) the amounts
actually paid hereunder between the Date of Taxability and the
date of such payment, and (ii) the amounts which would have
been due during such period if the modified interest rate had
been in effect. The provisions of this paragraph shall survive
the payment of this Note. The Holder shall notify in writing
the City and the Borrower, as soon as practicable, after the
receipt thereof, of its receipt of a Determination of
Taxability and of the consequent change in interest rate and
monthly installment payments required hereunder. In addition
to the increase in interest rate, the Holder, at its option,
may, at any time within ninety (90) days after receipt of
notice of a Determination of Taxability, call this Note for
redemption and declare the unpaid principal balance of this
Note, together with accrued interest thereon and any other
indebtedness due hereunder, due and payable in full, upon at
least ninety (90) days prior written notice to the City and the
Borrower in which event the City shall pay to the Holder on the
date specified in said notice, solely from the source and in
the manner hereinafter provided, an amount equal to the entire
unpaid principal balance of this Note, plus accrued interest
thereon and any other indebtedness due hereunder. In the event
that the interest due hereon is increased as a result of a
Determination of Taxability, the Borrower shall have the option
to prepay this Note in full without payment of a prepayment
premium upon thirty (30) days prior written notice to the City
and the Holder, which notice shall be given within ninety (90)
days after receipt of written notice from the Holder of an
increase in the interest rate.
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Per diem interest shall be computed on the basis of a 360
day year but shall be payable on the actual days elapsed during
the term of this Note.
All payments made under this Note shall be applied first
to interest and then to principal, except that if any advances
made by the Holder under the terms of any instruments securing
the Note are not repaid, any moneys received, at the option of
the Holder may first be applied to repay such advances, plus
interest thereon at a rate of interest equal to fourteen per-
cent (l4%) per annum, and the balance, if any, shall be applied
on account of any installments then due.
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During the first four (4) loan years, as hereinafter
defined, the City shall have the right to prepay this Note, in
full but not in part, provided that such additional principal
payment shall be subject to a prepayment premium equal to ten
and one-half percent (10-l/2%) of such amount prepaid. Beginn-
ing with the fifth (5th) loan year, the City may prepay this
Note in full but not in part provided that such additional
principal payment shall be subject to a prepayment premium of
four percent (4%) of such amount prepaid, which premium shall
thereafter decrease one percent (l%) during every loan year
thereafter to one percent (l%) during the eighth (8th) loan
year. Beginning with the ninth (9th) loan year and thereafter,
this Note may be prepaid in full but not in part at any time
without prepayment premium. As used herein, the term "loan
year" shall mean a year consisting of twelve (12) calendar
months, the first day of such first loan year being the date on
which the Borrower is obligated to make its first required
monthly installment payment of principal and interest as pro-
vided for herein. Any prepayments shall be made on a regularly
scheduled installment payment date, shall be made only upon
ninety (90) days advance written notice to the Holder, and
shall not suspend required installment payments. In the event
of default hereunder and following acceleration of maturity by
Holder as provided herein, a tender of payment of the amount
necessary to satisfy the entire unpaid principal balance
declared due and payable shall be deemed to constitute an
attempted evasion of the aforesaid restrictions on the right of
prepayment and shall be deemed a voluntary prepayment hereunder
and such payment must therefore include the appropriate prepay-
ment premium described above.
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In the event that any payment required hereunder is not
paid within ten (10) days after its due date, the City agrees
to pay, solely from the source and in the manner hereinafter
provided; a late charge of four percent (4%) of the unpaid
payment in order to defray the costs of the Holder incident to
collecting such late payment. This provision shall not be
deemed to excuse a late payment or be deemed a waiver of any
other rights the Holder may have including the right to declare
the entire unpaid principal and interest immediately due and
payable.
The Holder, at its option, may call this Note for redemp-
tion and declare the unpaid principal balance of this Note,
together with accrued interest thereon and any other indebted-
ness due hereunder, due and payable in full, if as a result of
changes in the Constitution of the State of Minnesota or the
Unites States of America or of legiSlative or administrative
action (whether state or federal) or of a final decree, judg-
ment, or order of any court or administrative body (whether
state or federal), the Loan Agreement shall have become void or
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unenforceable or impossible of performance in accordance with
the intent and purpose of the parties expressed therein, upon
at least ninety (90) days' prior written notice to the City and
the Borrower, in which event the City shall, solely from the
sources and in the manner hereinafter provided, pay to the
Holder on the date specified in said notice an amount equal to
the entire unpaid principal balance of this Note, plus accrued
interest thereon and any other indebtedness due hereunder.
Upon the occurrance of certain events of damage to or
destruction or condemnation of the Project hereinafter referred
to, the Holder, at its option, may apply the insurance proceeds
or condemnation awards, as the case may be, against the unpaid
principal balance in inverse order of maturity, with no
premium, all as provided in Article Four of the Mortgage
hereinafter referred to. Additionally, upon the occurrance of
certain events described in Section 1.4 of the Mortgage
hereinafter referred to, the Holder may declare the entire
principal and interest evidenced by this Note due and payable
in full and call for payment of the same in full at once.
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This Note is issued by the City for the purpose of
providing funds to be loaned to Alscor Investors Joint Venture,
a Minnesota general partnership (the "Borrower"), pursuant to
the terms of a Loan Agreement, of event date herewith (the
"Loan Agreement"), between the City and the Borrower, which
funds are to be used to provide permanent financing for a
project, within the meaning of Minnesota Statutes, Section
474.02, Subdivision lea), consisting of the construction and
equipping of an approximately 5l,140 square foot office-
warehouse building and related facilities and improvements
located in the City of Chanhassen, Minnesota (the building and
related improvements hereinafter collectively referred to as
the "Improvements" and the Improvements and the land upon which
it is located hereinafter collectively referred to as the
"Project"). The obligations of the Borrower under the Loan
Agreement and the obligations of the Borrower under the
Mortgage and Assignment of Leases and Rents hereinafter
referred to are non-recourse with respect to the partners of
the Borrower, all such liability being expressly waived,
provided, however, nothing contained in this release of
liability shall be deemed to limit the City's and the Holder's
right to seek a judgment against the Borrower and its assets
nor to limit the City's and the Holder's right to enforce the
Loan Agreement, the Mortgage, the Assignment of Leases and
Rents, or any other security given for payment of this Note, it
being expressly understood and agreed that this exculpation of
liability is personal to said partners only and shall not be
deemed to affect the obligations or liabilities of the
Borrower.
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This Note is secured by a Pledge Agreement, of even date
herewith, by the City to the Holder, by a Mortgage and Security
Agreement and Fixture Financing Statement (the "Mortgage") of
even date herewith from the Borrower, as mortgagor, to the
Holder, as mortgagee, by which the Borrower has granted to the
Holder a mortgage lien on and security interest in the Project,
and by an Assignment of Leases and Rents (the "Assignment") of
even date herewith, from the Borrower to the Holder by which
the Borrower has assigned to the Holder its interest in all
rents and leases of the Project. All of the agreements,
conditions, covenants, provisions and stipulations contained in
the Loan Agreement, the Mortgage and the Assignment 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.
Reference is hereby made to such documents for a complete
description of the covenants and agreements therein contained,
the nature and extent of the security thereby created, and the
rights, duties, and immunities of the City thereunder.
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This Note is issued pursuant to and in full compliance
with the Constitution and laws of the State of Minnesota,
including Minnesota Statutes, Chapter 474, and pursuant to
resolutions duly adopted by the City Council on November 15,
1982, and November 2l, 1983, (the ReSOlutions) and, this Note
and interest hereon and any premiums, penalties, late charges
or other amounts payable hereunder, however designated, do not
represent a debt or pledge of the faith or credit of the City
or grant to the Holder hereof any right to have the City levy
any taxes or appropriate any funds for the payment of the
principal hereof or interest or premium hereon, nor is this
Note a general obligation of the City or the individual
officers or agents thereof. This Note and interest hereon,
premiums, penalties, late charges, processing fees, and any
other payments required herein, however designated, are payable
solely and only out of the moneys received under the Loan
Agreement and pledged to the payment thereof pursuant to the
Pledge Agreement or realized from the enforcement of the other
security described above. The liability of the City hereunder
is further restricted in all respects as set forth in Minnesota
Statutes Section 474.l0. The provisions of this paragraph are
controlling and shall not be construed as being limited by any
other provisions of this Note.
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It is agreed that time is of the essence of this Note. If
an Event of Default occurs and is continuing under the terms of
the Loan Agreement, then the Holder may at its right and option
declare immediately due and payable without notice the princi-
pal balance of this Note and interest accrued thereon, together
with any reasonable attorneys' fees incurred by the Holder in
collecting or enforcing payment thereof, whether suit be
brought or not, and all other sums due hereunder or under the
Mortgage, the Loan Agreement or the Assignment, anything to the
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contrary therein notwithstanding, and payment thereof may be
enforced and recovered in whole or in part, at any time, by one
or more of the remedies provided in this Note, the Mortgage,
the Loan Agreement, the Assignment, or any other document
securing this Note.
The remedies of the Holder, as provided herein and in the
Mortgage, the Loan Agreement and the Assigr~ent, shall be
cumulative and concurrent~ may be pursued singlely, succes-
sively or together and at the sole discretion of the ~older~
and may be exercised as often as occasion therefor shall occur.
The delay, omission, or failure to exercise any such right or
remedy shall in no event be construed as a waiver or release
thereof.
The City, for itself, its successors and assigns, hereby
waives diligence, demand, presentment, protest and notice of
dishonor and suretyship defenses generally, and agrees that,
except as otherwise expressly provided herein or in the r~an
Agreament, without any notice, the ~older hereof and any
present or future owner or owners of any property and interests
covered by the Mortgage or any other document given to secure
this Note, or executed in connection with this Note, may from
time to time release any part or parts of the property and
interests SUbject to said Mortgage or to any such other
document from the same, with or without consideration.
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The City shall register this Note by registration hereon
and upon the books of the City kept for that purpose at the
office of the City Manager/Clerk. Upon such registration, this
Note shall be transferable only by (i) the ~older hereof in
person or by its agent duly authorized in writing surrendering
this Note together with a written instrument of transfer satis-
factory to the City Manager/Clerk duly executed by the Holder
or its duly authorized agent, and (ii) the City Manager/Clerk
noting the date of registration and the name and address of the
new Holder upon the books of the City and in the registration
blank appearing below. The transfer shall not be effective
until the City Manager/Clerk has registered the name and
address of the new Holder upon the books of the City and in the
registration blank appearing below as aforesaid. Except as
otherwise provided herein, the City may deem and treat the
person in Whose name this Note is last registered upon the
books of the City, with such registration also noted on this
Note, as the absolute owner hereof, whether or not overdue, for
the purpose of receiving payment of or on account of the
principal hereof, interest hereon or any other sums payable
hereunder, and for all other purposes, and all such payments so
made to the Holder or upon its order shall be valid and
effectual to satisfy and discharge the liability on this Note
to the extent of the sum or sums so paid, and the city shall
not be affected by any notice to the contrary.
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If any term of this Note, or the application thereof to
any person or circumstances, shall, to any extent, be invalid
or unenforceable, the remainder of this Note, or the applica-
tion of such term to persons or circumstances other than those
as to which it is invalid or unenforceable, shall not be
affected thereby, and each term of this Note shall be valid and
enforceable to the fullest extent permitted by law.
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In the event the Borrower sells, conveys, transfers,
further mortgages, or encumbers or disposes of the Project, or
any part thereof, or any interest therein, or agrees so to do
or if any general partnership interest in the Borrower is sold,
conveyed, transferred, further mortgaged, pledged, or encum- _
bered without the written consent of the Holder being first
obtained, then at the sole option of the Holder, the Holder may
declare the entire principal and interest evidenced by this
Note due and payable in full and call for payment of the same
in full at once. It is not the intention of the Holder to
consent to any such transaction, however, in the event the
Borrower shall request the consent of the Holder in accordance
with this Note, the Borrower shall deliver a written request to
the Holder, together with complete information regarding such a
conveyance or encumbrance, and shall allow the Holder thirty
(30) days for evaluation of such request. If such a conveyance
or encumbrance is approved, the Borrower shall pay a processing
fee in an amount to be determined by the Holder based upon the
Holder's actual out-of-pocket costs of processing the request,
but in any event not less than Two Thousand and 00/100 Dollars
($2,000.00) to compensate the Holder for processing the
request. Any approval Which may be given by the Holder may be
conditioned upon the Borrower remaining fully liable hereunder
and upon any such purchaser ass~~ing in full all liability
under the terms of this Note, the Loan Agreement, the Mortgage
and any other instruments securing this Note. Any such
approval shall also be subject to such other modifications of
the loan terms as the Holder may establish, such modifications
to include but not be limited to maturity dates, interest rate
and call options. No such conveyance or encumbrance or modifi-
cation to the loan terms shall be permitted if the effect
thereof would be to impair the validity or tax exempt status of
this Note or to cause the Note to be deemed issued in violation
of the requirement under Section 474.02, Subdivision Id, of the
Act that no portion of the Improvements to be financed from
Note proceeds be acquired in Whole or part for sale. In that
connection, the Borrower shall provide the Holder with such
assurances, including opinions of counsel, as the Holder shall
require. The Borrower agrees that, except for an Exempt Trans-
fer, as defined below, no request for any conveyance or encum-
brance shall be made to the Holder during the first (1st) "loan
year" as defined herein. Consent as to anyone transaction
shall not be deemed to be a waiver of the right to require con-
sent to future or successive transactions. If the Borrower's
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interest in the Project shall ever be sold, conveyed or trans-
ferred to a partnership or a corporation with the consent of
the Holder as provided herein, a subsequent transfer of a
partnership interest or a voting stock interest shall consti-
tute a sale, conveyance or transfer for purposes of this para-
graph and shall require the consent of the Holder. Notwith-
standing the above restrictions and conditions upon the convey-
ance of the Project, tenant leases and utility and similar
easements which do not adversely affect the Project and which
are entered into in the normal course of business shall not be
considered transfers, conveyances or encumbrances of the Pro-
ject for purposes of this paragraph. The execution or modifica-
tion of leases on the Project shall be governed by the terms of
Section 5.1 of the Mortgage and paragraph 1 of the Assignment.
In addition, notwithstanding the above restrictions and condi-
tions upon the conveyance of the Project, a conveyance of the
Project or an interest therein to Gerald Rauenhorst, individ-
ually, or to Opus corporation or American Linen Supply Co., or
to a partnership in which either Gerald Rauenhorst, individ-
ually, or Opus Corporation, American Linen Supply Co. or the
Borrower is a general partner with a controlling interest of at
least fifty percent (50%) in such partnership, will be con-
sented to by the Holder without imposition of a transfer fee or
modification of the loan terms provided the following condi-
tions are met: (i) the acquiring entity shall have assumed
full liability for all obligations under the terms of this
Note, the Loan Agreement, the Mortgage and any other instru-
ments securing this Note, (ii) such transfer shall not reduce
or adversely affect the Holder's security nor impair the valid-
ity or tax exempt status of this Note nor cause the Note to be
deemed issued in violation of the requirement under Section
474.02, Subdivision ld, of the Act that no portion of the
Project to be financed from Note proceeds be acquired in whole
or part for sale, and (iii) the Borrower shall have given the
Holder written notice of such proposed transfer at least thirty
(30) days prior to any such permitted conveyance and shall have
supplied the Holder with any information reasonably requested
by the Holder in order for the Holder to verify that the trans-
fer is an exempt transfer pursuant to this paragraph (any such
transfer being hereinafter referred to as an "Exempt Trans-
fer"). The Borrower shall be released from personal liability
for all the indebtedness hereunder and under the Mortgage and
other documents securing this Note in the event of an Exempt
Transfer to an entity having a net worth equal to or greater
than $5,000,000. In all other cases the Borrower shall con-
tinue to remain fully liable hereunder and under the Mortgage
and other documents securing this Note.
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In the event that the net worth of the Borrower, its
successors or assigns, exclusive of the net worth of the
individual partners shall not equal or exceed Five Million and
00/100 ($5,000,OOO.00) Dollars, the Holder shall have the right
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to call this Note for redemption and declare the unpaid
principal balance of this Note, together with acrued interest
thereon and any other indebtedness due hereunder immediately
due and payable in full upon ninety (90) days prior written
notice, provided such notice is given within one hundred twenty
(120) days after receipt by the Holder of actual notice that
the net worth of the Borrower is less than Five Million and
00/100 ($5,000,000.00) Dollars. The Borrower covenants and
agrees to immediately give the Holder written notice of any
significant or material change in the Borrower's financial
condi tion.
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The Holder may one hundred twenty (l20) days prior to the
end of the tenth loan year give written notice to the Borrower
and the City of its intent to declare the outstanding principal
balance and accrued interest due and payable at the end of the
tenth loan year in full unless the Borrower locates a purchaser
for this Note or purchases this Note itself. If the Holder
shall have given such notice and if the Borrower shall deliver
to the Holder and the City within forty-five (45) days prior to
the end of the tenth loan year a written agreement by the
Borrower or another purchaser to purchase this Note prior to
the end of the tenth loan year the Lender shall assign to the
purchaser on or prior to the end of the tenth loan year this
Note, and its interest in the Mortgage, the Assignment and the
Pledge Agreement, without recourse and without any warranties
other than that it is the holder of such documents and without
cost or expense to the Holder, upon payment by the purchaser of
the outstanding principal of this Note and upon payment by the
City of all accrued interest and upon payment by the Borrower
of all other sums due under the Loan Agreement and all security
documents relating thereto. Provided that if the purchaser who
has agreed to purchase this Note as provided in the previous
sentence has not purchased this Note by the end of the tenth
loan year or if no purchaser has, within forty-five (45) days
prior to the end of the tenth loan year, agreed in writing to
purchase this Note as provided in the previous sentence, then
the outstanding principal of the Note shall immediately become
due and payable at the end of the tenth loan year.
This Note applies to, inures to the benefit of, and is
binding not only on the parties hereto, but on their successors
and assigns. The term "Holder" shall mean the registered
holder and owner of this Note, whether or not named as Holder
herein.
This Note may not be amended, modified or changed nor
shall any waiver of any provision hereof be effective, except
only by an instrument in writing and signed by the party
against whom enforcement of any waiver, amendment, change,
modification or discharge is sought.
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It is intended that this Note is made with reference to
and shall be construed as a Minnesota contract and governed by
the laws thereof.
For purposes of this Note, all notices shall be given in
the manner prescribed in the Loan ~greement.
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, time
and manner as required by law.
IN WITNESS WHEREOF, the City has caused this Note to be
duly executed by its duly authorized officers and its corporate
seal to be affixed hereto, all as of this day of
, 1983.
CITY OF CHANHASSEN, MINNESOTA
By~/~~-Zb
Mayor
[SEAL]
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And
City Manager/Clerk
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PROVISIONS AS TO REGISTRATION
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The ownership of the unpaid principal balance of this
Note and the interest accruing thereon is registered on the
books of the City of Chanhassen in the name of the holder last
noted below.
Date of
Registration
Name and address
Registered Onwer
Signature of
City Manager/Clerk
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2-2. The Note.
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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 City Manager/Clerk 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 City
Manager/Clerk 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.
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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:
( l) an executed copy of each of the following documents:
(A) the Loan Agreement;
(B) the Pledge Agreement;
( C) the Mortgage;
(0 ) the Assigrunent of Leases and Rents;
(E) a Cost Certificate signed by the Borrower
certifying the use of the proceeds of the Note and a receipt
indicating receipt by the Borrower of $1,450,000 from the City;
(F) Leases now existing:
(G) A Certificate of the Lender acknowledging
receipt of the Note from the City.
(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.
Simultaneously with the delivery of the Note, the
Lender shall purchase the Note from the City by advancing to
the Borrower on behalf of the City, $1,450,000 for payment of
Project Costs. The Borrower shall provide the City with a full
accounting of all funds disbursed for Project Costs.
2-6. Registration of Transfer.
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The City will cause to be kept at the office of the
City Manager/Clerk 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/Clerk
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 and the Note.
Dated:
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Registered Owner
Upon such transfer the City Manager/Clerk 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.
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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 connection therewith, and
in the case of a Note destroyed or lost, the filing with the
City of evidence satisfactory to the City that such Note was
destroyed or lost, and furnishing 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.
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Except as otherwise provided in the Note and Section
4.07 of the Loan ~greement 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 unpaid
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. Limitatiou 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 in accordance with an applicable exemption from such
registration requirements.
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ARTICLE THREE
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GENERAL COVENANTS
3-1.
Payment of Principal and Interest.
The City covenants that it will promptly payor 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 and pledged under the Pledge
Agreement, and from sums derived from the Mortgage, and the
Assignment of Leases and Rents, which revenues and proceeds are
hereby specifically pledged to the payment thereof in the
manner and to the extent specified in the Note, the Loan
Agreement, the Pledge Agreement, the Mortgage 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.
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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 relating to the City 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 limita-
tion the Act, to issue the Note authorized hereby, to pledge
the revenues and to 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 enforce-
able special limited obligation of the City according to the
terms thereof.
3-3. Performance of Covenants.
Subject to Section 3-4, the City agrees to perform
all covenants and other provisions pertaining to the City
contained in the Note and the Loan Agreement.
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3-4. Nature of Security.
Notwithstanding anything contained in the Note, the
Mortgage, the Assignment of Leases and Rents, the Loan
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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 nor 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 to
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 consti-
tute a debt of the City within the meaning of any constitu-
tional 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 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 its covenants and other
provisions relating to it contained in the Note, the Loan
Agreement and the Pledge Agreement shall be subject at all
times to the availability of revenues under the Loan Agreement
sufficient to pay all costs of such performance, and the City
shall not be subject to any personal or pecuniary liability
thereon.
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ARTICLE FOUR
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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.
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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 City Manager is authorized and directed to cause
copies of this Resolution to be filed with the County Auditors
of Carver and Hennepin Counties, and to obtain from said County
Auditors a certificat~ that the Note as a bond of the City has
been duly entered upon their bond registers.
4-4. Authorization to Execute Agreements.
The forms of the proposed Loan Agreement, the Pledge
Agreement, the Mortgage and the Assignment of Leases and Rents
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 the
City Attorney and the City officials authorized herein to
execute said documents prior to the execution of the documents
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~
and said City officials are hereby authorized to approve said
changes on behalf of the City. The Mayor and City
Manager/Clerk 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 considers
appropriate in connection with the issuance of the Note. In
the event of the absence or disability of the Mayor or the City
Manager/Clerk such officers of the City as, in the opinion of
the City Attorney, may act in their ~ehalf, 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: November 21, 1983
Attest:
.L2
City Manager
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i (
t' "
I
STATE OF MINNESOTA
)
)
) ss
)
COUNTIES OF CARVER
AND HENNEPIN
I, the undersigned, being the fully qualified and acting
City Manager/Clerk of the City of Chanhassen, Minnesota, DO
HEREBY CERTIFY that the attached extract of minutes of a
regular
meeting of the City Council of said City duly
called and held on November 21, 1983, is a full, true and
correct transcript therefrom insofar as the same relates to
authorizing the issuance of the $1,450,000 Commercial
Development Revenue Note of 1983 (Chanhassen Lake Business
Center Project) of the City.
WITNESS my hand and the seal of the City officially as
said City Manager/Clerk this 21st day of November, 1983.
71 0l:;E6
City Manager/Clerk
,,' '. {(
.... ,.' '1/)
" I {\. [SEAL]
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