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1l. Approve Resolution Regarding Issuance of Refunding Bonds, Heritage Park ApartmentsII n LI BRUCE M.BATTERSON Attorney at Law Direct Dial (612) 337 -9259 KENNEDY & GRAVEN CHARTERED 470 Pillsbury Center, Minneapolis, Minnesota 55402 Telephone (612) 337 -9300 Facsimile (612) 337 -9310 August 21, 1996 �} City of Chanhassen 690 Coulter Drive Chanhassen, Minnesota 55317 ?rip,' RE: $2,605,000 City of Chanhassen, Minnesota Multifamily Housing Development Revenue Refunding Bonds (FHA Insured Mortgage Loan -- Heritage Park Apartments Project), Series 1996 Enclosed for consideration by the City Council on August 26, 1996 is a form of Resolution authorizing the issuance of refunding bonds to refinance the bonds issued in 1988 for Heritage Park Apartments. The refunding bonds are being issued under the Original Trust Indenture and Loan Agreement, which will be amended and supplemented by a First Supplemental Trust Indenture and First Amendment to Loan Agreement. The City of Chanhassen will not be obligated in any way on the 1996 Bonds. As with the 1988 Bonds, payments made by Heritage Park Apartments Limited Partnership and payments made by HUD pursuant to FHA Mortgage Insurance will be the sole source of payment for the 1996 Bonds. Our firm will be giving an opinion that the 1996 Bonds are valid and bear tax - exempt interest. Only the Bond documents will be modified in connection with this refinancing. The Development Agreement and tax increment financing arrangement are not affected. Please call me if there are any questions prior to the Council meeting. I plan to attend the meeting in case any questions arise there. ' Very truly yours, Bruce M. Batterson t BMB109112 C11135 -33 CITY OF CHANHASSEN, MINNESOTA RESOLUTION NO. AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF $2,605,000 MULTIFAMILY HOUSING DEVELOPMENT REVENUE REFUNDING BONDS (FHA INSURED MORTGAGE LOAN -- HERITAGE PARK APARTMENTS PROJECT) SERIES 1996, AUTHORIZING THE EXECUTION AND DELIVERY OF VARIOUS DOCUMENTS RELATING THERETO. AND PROVIDING FOR THE SECURITY, RIGHTS AND REMEDIES OF THE HOLDERS THEREOF WHEREAS, the City of Chanhassen, Minnesota (the "City ") is a municipal corporation duly organized and existing under the Constitution and laws of the State of Minnesota; and WHEREAS, pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Chapter 462C, as amended (the "Act "), the City is authorized to carry out the public purposes described therein and contemplated thereby by issuing its revenue bonds to defray, in whole or in part, the development costs of a multifamily rental housing development, or to refund any such revenue bonds, and by entering into any agreements made in connection therewith and pledging them as security for the payment of the principal of and interest on any such revenue bonds; and WHEREAS, the City has adopted a Program (the "Program ") relating to the Heritage Park Housing Project, a 60 -unit rental housing project located in the City (the "Project ") pursuant to and in conformity with the Act; and WHEREAS, pursuant to the Program, the City issued its Multifamily Housing Development Revenue Bonds (FHA Insured Mortgage Loan - Herritage Park Apartments Project), Series 1988 (the "1988 Bonds ") in the aggregate principal amount of $2,930,000, pursuant to a Trust Indenture dated as of November 1, 1988 (the "Original Indenture ") between the City and First Trust National Association, as trustee (the "Trustee "), for the purpose of financing the acquisition and construction of the Project; and WHEREAS, the City loaned the proceeds of the 1988 Bonds to Heritage Park Apartments Limited Partnership, a Minnesota limited partnership (the "Company "), owner of the Project, pursuant to a Loan Agreement dated as of November 1, 1988 (the "Original Loan Agreement ") to finance the acquisition and construction of the Project; and WHEREAS, the Company proposes that the City refinance the Project by the issuance of its $2,605,000 Multifamily Housing Development Revenue Refunding Bonds (FHA Insured Mortgage Loan - Heritage Park Apartments Project), Series 1996 (the 'Bonds ") under the Act pursuant to this Resolution; and WHEREAS, the Bonds will be issued under a First Supplemental Trust Indenture dated as of September 1, 1996 between the City and the Trustee which supplements the Original BMB109081 CH135 -33 1 J Indenture (as supplemented, the "Indenture "), and will be payable from revenues derived from the Original Loan Agreement, as amended by a First Amendment to Loan Agreement, dated as of September 1, 1996 between the City and the Company (the Original Loan Agreement, as supplemented, is referred to herein as the "Loan Agreement "), and secured by a mortgage lien on the Project pursuant to that certain Mortgage dated as of May 1, 1989, as modified with HUD approval to comply with the repayment terms of the Bonds, (the "Mortgage "), all in accordance with the terms of the Indenture, and the Bonds and the interest on the Bonds shall be payable solely from the revenue pledged therefor, and the Bonds shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation, nor shall the Bonds constitute nor give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers and shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City other than the City's interest in the Project; NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF CHANHASSEN, MINNESOTA, AS FOLLOWS: 1. For the purpose of refunding the 1988 Bonds, and thereby refinancing the Project, the City hereby authorizes the issuance, sale and delivery of the Bonds in the principal amount of $2,605,000, the proceeds of which shall be applied to redemption of the outstanding 1988 Bonds. The Bonds shall be in such principal amounts, shall bear interest at rates, shall be numbered, shall be dated, shall mature, shall be subject to redemption prior to maturity, and shall be in such form and have such other details and provisions as may be prescribed in the First Supplemental Trust Indenture, substantially in the form now on file with the City. The Bonds shall be special obligations of the City payable solely from the revenues provided by the Loan Agreement and other funds pledged pursuant to the Indenture. The Bonds are not to be payable from nor charged upon any funds of the City other than the revenues pledged to their payment, nor is the City subject to any liability thereon; no holders of the Bonds shall ever have the right to compel any exercise of the taxing power of the City to pay any of the principal of, premium, if any, or interest on the Bonds; the Bonds shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and each Bond shall recite that the Bonds, including interest thereon, are payable solely from the revenues pledged to the payment thereof and that no Bond shall constitute a debt of the City within the meaning of any constitutional or statutory limitation. The Bonds shall contain a recital that they are issued pursuant to the Act and such recital shall be conclusive evidence of the validity and regularity of the issuance thereof. The Mayor and City Manager are authorized and directed to prepare and execute by manual or facsimile signature the Bonds as prescribed in the Indenture and to deliver them to the Trustee, together with a certified copy of this resolution and other documents required by the Indenture, for authentication and delivery to Piper Jaffray Inc., as underwriter (the "Underwriter "). 2." "' The City Council hereby authorizes and directs the Mayor and the City Manager to execute and deliver the First Supplemental Trust Indenture, the First Amendment to Loan Agreement and the Bond Purchase Agreement by and among the City, the Company and the Underwriter (the "Bond Purchase Agreement "). All of the provisions of the Indenture, the Loan Agreement and the Bond Purchase Agreement, when executed as authorized herein, shall be deemed to be a part of this resolution as fully and to the same extent as if incorporated verbatim herein and shall be in full force and BMB109081 2 CH135 -33 effect from the date of execution and delivery thereof. The First Supplemental Trust Indenture, the First Amendment to Loan Agreement and the Bond Purchase Agreement shall be substantially in the forms on file with the City, which are hereby approved, with such necessary or desirable and appropriate variations, omissions and insertions as do not materially change the substance thereof, or as the officers executing the same, in their discretion, shall determine, and the execution thereof shall be conclusive evidence of such determination. 3. The Mayor and the City Manager of the City or either of them are hereby authorized to execute and deliver, on behalf of the City, such other documents and certificates as are necessary or appropriate in connection with the issuance, sale and delivery of the Bonds, including without limitation a request and authorization to the Trustee to authenticate and deliver the Bonds, a Tax Certificate and a Letter of Representations to The Depository Trust Company ( "DTC ") for appointment of DTC as securities depository for the Bonds. 4. The City hereby consents to the distribution of the Preliminary Official Statement relating to the Bonds and to the use by the Underwriter of a final Official Statement, substantially in the form of the Preliminary Official Statement. The Preliminary Official Statement and the Official Statement are the sole materials consented to by the City for use in connection with the offer and sale of the Bonds. The City has not participated in the preparation thereof and shall have no liability in connection with the contents of or use of such offering materials. 5. All covenants, stipulations, obligations and agreements of the City contained in this resolution and the aforementioned documents shall be deemed to be the covenants, stipulations, obligations and agreements of the City to the full extent authorized or permitted by law, and all such covenants, stipulations, obligations and agreements shall be binding upon the City. No covenant, stipulation, obligation or agreement herein contained or contained in the aforementioned documents shall be deemed to be a covenant, stipulation, obligation or agreement of any member of the City Council of the City, or any officer, agent or employee of the City in that person's individual capacity, and neither the City Council of the City nor any officer or employee executing the Bonds shall be liable personally on the Bonds or be subject to any personal liability or accountability by reason of the issuance thereof. No provision, covenant or agreement contained in the aforementioned documents, the Bonds or in any other document related to the Bonds, and no obligation therein or herein imposed upon the City or the breach thereof, shall constitute or give rise to any pecuniary liability of the City or any charge upon its general credit or taxing powers. In making the agreements, provisions, covenants and representations set forth in such documents, the City has not obligated itself to pay or remit any funds or revenues, other than funds and revenues derived from the Loan Agreement, the Mortgage and the Assignment, which are to be applied to the payment of the Bonds, as provided therein and in the Indenture. Except as herein otherwise expressly provided, nothing in this resolution or in the aforementioned documents, expressed or implied, is intended or shall be construed to confer upon any person or firm or corporation, other than the City, the Company or any holder of the Bonds issued under the provisions of this resolution, any right, remedy or claim, legal or equitable, under and by reason of this resolution or any provision hereof, this resolution, the aforementioned documents and all of their provisions being intended to be and being for the sole and exclusive benefit of the City, the Company and any holder from time to time of the Bonds issued under the provisions of this resolution. BMB109081 CH135 -33 3 ' 6. In case any one or more of the provisions of this resolution, or of the aforementioned documents, or of the Bonds issued hereunder shall for any reason be held to be legal or invalid, such illegality or invalidity shall not affect any other provision of this resolution, ' or of the aforementioned documents, or of the Bonds, but this resolution, the aforementioned documents, and the Bonds shall be construed and endorsed as if such illegal or invalid provision ' had not been contained therein. 7. The Bonds, when executed and delivered, shall contain a recital and such recital shall be conclusive evidence of the validity of the Bonds and the regularity of the issuance thereof, that all acts, conditions and things required by the laws of the State of Minnesota relating to the adoption of this resolution, to the issuance of the Bonds and to the execution of the 1 aforementioned documents to happen, exist and be performed precedent to and in the enactment of this resolution, and precedent to issuance of the Bonds and precedent to the execution of the aforementioned documents have happened, exist and have been performed as so required by law. ' 8. The officers of the City and its attorneys, agents and employees are hereby authorized to do all acts and things required of them by or in connection with this resolution, the 1 aforementioned documents, and the Bonds for the full, punctual and complete performance of all the terms, covenants and agreements contained in the Bonds, the aforementioned documents and this resolution. 9. This resolution shall be in full force and effect from and after its passage. BMB1090B1 4 CH135 -33 Adopted this 26th day of August, 1996. Mayor Attest: City Manager BMB109081 CH135 -33 5 I FIRST SUPPLEMENTAL TRUST INDENTURE 8/21/96 ' This FIRST SUPPLEMENTAL TRUST INDENTURE is entered into as of September 1, 1996, between the CITY OF CHANHASSEN, MINNESOTA, a Minnesota municipal corporation (the "Issuer "), and FIRST TRUST NATIONAL ASSOCIATION, a national banking ' association, as trustee (the "Trustee "). RECITALS Pursuant to a Trust Indenture dated as of November 1, 1988 (the "Original Indenture" and as amended hereby, the "Indenture "), between the Issuer and the Trustee, the Issuer has issued and sold its Multifamily Housing Development Revenue Bonds (FHA Insured Mortgage Loan -- Heritage Park Apartments Project), Series 1988 (the "1988 Bonds "). Proceeds of the 1988 Bonds ' were used to finance a loan to Heritage Park Apartments Limited Partnership, a Minnesota limited partnership (the "Owner "), pursuant to a Loan Agreement dated as of November 1, 1988 (the "Loan Agreement ") and used by the Owner to acquire, construct and equip a 60 -unit ' multifamily housing development (the "Project ") in the City of Chanhassen. The Company's repayment obligations under the Loan Agreement are evidenced by a Mortgage Note dated as of May 1, 1989 and amended as of September 1, 1996 (as so amended, the "Mortgage Note "), from ' the Owner to the Trustee. The Mortgage Note is secured by a Mortgage dated as of May 1, 1989, and amended as of September 1, 1996 (as so amended, the "Mortgage "), from the Owner to the Trustee. The Mortgage is insured by the Federal Housing Administration ( "FHA ") ' pursuant to Section 221(d)(4) of the National Housing Act of 1934. as amended. To refinance the Project, the Issuer will issue the 1996 Bonds described below as a series ' of Additional Bonds under the Indenture, and the 1988 Bonds will be called for optional redemption within 90 days after the issuance of the 1996 Bonds. In connection with the issuance of the 1996 Bonds and the redemption of the 1988 Bonds, the Original Indenture will be ' amended as set forth in this First Supplemental Indenture. The Issuer has authorized the issuance of the 1996 Bonds and the execution and delivery of this First Supplemental Indenture by resolution adopted by its City Council on August 26, 1996, and the Owner has approved this First Supplemental Indenture. ' ARTICLE I ' ISSUANCE OF 1996 BONDS; ADDITIONS TO INDENTURE 1.01. Section 201A is added to the Indenture, to read as follows: Section 201A. Issuance of 1996 Bonds. Pursuant to Section 214 of the Indenture, the Issuer will issue and sell a series of Additional Bonds designated "City of Chanhassen, Minnesota, Multifamily Housing Development Revenue Refunding Bonds (FHA Insured Mortgage Loan -- Heritage Park Apartments Project), Series 1996" (the "1996 Bonds "). The 1996 Bonds shall be BMB104580 -I- CH135 -33 issued in an aggregate principal amount of $ , shall be issued as fully registered bonds, without coupons, and shall be numbered from "R -1" upward in the order of their issuance. The 1996 Bonds shall be issued in the denomination of $5,000 principal amount or any integral multiple thereof, shall mature on the following dates in the following principal amounts, and shall bear interest at the following rates per annum: Maturitv Date Principal Amount Interest Rate January 1, 1997 $ 10,000 4.00% July 1, 1997 40,000 4.00 January 1, 1998 45,000 435 July 1, 1998 45,000 4.35 January 1, 1999 45,000 4.50 July 1, 1999 45,000 4.50 January 1, 2000 45,000 4.65 July 1, 2000 50,000 4.65 January 1, 2001 50,000 4.80 July 1, 2001 50,000 4.80 January 1, 2002 50,000 4.90 July 1, 2002 55,000 4.90 January 1, 2003 50,000 5.00 July 1, 2003 15,000 5.00 January 1, 2004 15.000 5.10 July 1, 2004 15,000 5.10 January 1, 2005 15,000 5.20 July 1, 2005 15,000 5.20 January 1, 2006 15,000 5.30 July 1, 2006 15,000 5.30 January 1, 2007 15,000 5.40 July 1, 2007 15,000 5.40 January 1, 2008 20,000 5.50 July 1, 2008 20,000 5.50 January 1, 2009 20,000 5.60 July 1, 2009 20,000 5.60 January 1, 2010 20,000 5.70 July 1, 2010 20,000 5.70 January 1, 2011 20,000 5.80 July 1, 2011 20,000 5.80 January 1, 2012 20,000 5.90 July 1, 2012 25,000 5.90 July 1, 2016 210,000 6.00 July 1, 2030 1,475,000 6.20 Interest on the 1996 Bonds shall be calculated on the basis of a 360 day year consisting of twelve 30 -day months. Notwithstanding any other provision of this Indenture, upon written BMB104580 CH135 -33 -2- J notice and instruction satisfactory to the Trustee, interest may be paid by wire transfer to the registered owner of 1996 Bonds in an aggregate principal amount of $1,000,000 or more. u No Penalty Interest shall be payable in the event of a Determination of Taxability with respect to the 1996 Bonds. Each 1996 Bond shall be dated as of the date of original issue thereof, and except as otherwise provided in this Section, shall bear interest from the date of original issue, or from the most recent date to which interest has been paid or duly provided for. The person in whose name any 1996 Bond is registered at the Regular Record Date with respect to an Interest Payment Date shall be entitled to receive the interest payable on such Interest Payment Date notwithstanding any transfer or exchange of such 1996 Bond subsequent to the Regular Record Date and prior to the Interest Payment Date; provided, however, that if and to the extent there is a default in the payment of the interest due on any Interest Payment Date, such defaulted interest shall be paid as provided in the next paragraph. Any interest on any 1996 Bond which is payable, but is not punctually paid or duly provided for on any Interest Payment Date ("Defaulted Interest) shall forthwith cease to be payable to the Bondholder on the relevant Regular Record Date by virtue of having been such Bondholder. The Trustee may elect to make payment of any Defaulted Interest to the persons in whose names the 1996 Bonds (or their respective predecessor 1996 Bonds) are registered at the close of business on a Special Record Date (as defined below) for the payment of such Defaulted Interest, which shall be fixed in the following manner. Upon receipt of funds adequate for such purposes, the Trustee shall determine the amount of Defaulted Interest proposed to be paid on each 1996 Bond and the date of the proposed payment, and shall fix a Special Record Date for the payment of such Defaulted Interest, which date shall be not more than 15 nor less than 10 days prior to the date of the proposed payment. The Trustee shall cause notice of the proposed payment of Defaulted Interest and the Special Record Date therefor to be mailed not less than 10 days prior to the Special Record Date, by first class mail, postage prepaid, to each 1996 Bondholder at the Bondholder's address as it appears in the Bond Register. Notice of the proposed payment of Defaulted Interest and the Special Record Date therefor having been mailed as aforesaid, such Defaulted Interest shall be paid to the persons in whose names the 1996 Bonds (or their respective predecessor 1996 Bonds) are registered on the Special Record Date. Pursuant to Sections 213 and 214 of the Original Indenture, the proceeds of the 1996 Bonds, net of accrued interest, if any (which shall be deposited in the Bond Fund), shall be deposited, together with any other moneys provided by the Owner for the purpose, in a special redemption fund held by the Trustee for the redemption and prepayment of the 1988 Bonds. Moneys in special redemption fund may be invested in Qualified Investments which mature or are subject to redemption at the option of the holder thereof no later than the date on which the 1988 Bonds are to be redeemed. On the redemption date, the Trustee shall apply the moneys in the special redemption fund to the payment of the redemption price of the 1988 Bonds, including accrued but unpaid interest. Any moneys remaining in the special redemption fund, after payment of the redemption price of all 1988 Bonds presented for payment on the redemption date and provision for payment of the redemption price of all 1988 Bonds not so presented, shall be paid to the Owner. BMB104580 -3- CH135-33 1.02. Section 216 is added to the Indenture, to read as follows: Section 216. Book Entry Svstem. The 1996 Bonds shall be issued only to a Depository to be held in a Book Entry System and: (i) the 1996 Bonds shall be registered in the name of the Depository or its nominee, as Bondholder, and immobilized in the custody of the Depository; (ii) unless otherwise requested by the Depository, there shall be a single 1996 Bond certificate for each 1996 Bond maturity; and (iii) the 1996 Bonds shall not be transferable or exchangeable, except for transfer to another Depository or another nominee of a Depository, without further action by the Issuer as set forth in the next succeeding paragraph of this Section. While the 1996 Bonds are in Book Entry Form, 1996 Bonds in the form of physical certificates shall only be delivered to the Depository. So long as a Book Entry System is in effect for the 1996 Bonds, except as hereinafter provided with respect to Beneficial Ownership Interests, the Issuer and Trustee shall recognize and treat the Depository, or its nominee, as the Holder of the 1996 Bonds for all purposes, including payment of principal of and interest on the 1996 Bonds, giving of notices, and enforcement of remedies. The crediting of payments of principal of and interest on the 1996 Bonds and the transmittal of notices and other communications by the Depository to the Direct Participants in whose Depository accounts the 1996 Bonds are recorded, and such crediting and transmittal by Direct Participants to Indirect Participants or Beneficial Owners and by Indirect Participants to Beneficial Owners, are the respective responsibilities of the Depository and the Direct Participants and Indirect Participants and are not the responsibility of the Issuer or the Trustee; provided, however, that the Issuer and the Trustee understand that neither the Depository or its nominee shall provide any consent requested of Holders of 1996 Bonds pursuant to this Indenture, and that the Depository will mail an omnibus proxy (including a list identifying the Direct Participants) to the Issuer which assigns the Depository's, or its nominee's, voting rights to the Direct Participants to whose accounts at the Depository the 1996 Bonds are credited as of the record date for mailing of requests for such consents. Upon receipt of such omnibus proxy, the Issuer shall promptly provide such omnibus proxy (including the list identifying the Direct Participants attached thereto) to the Trustee, who shall then treat such Direct Participants as Holders of the 1996 Bonds for purposes of obtaining any consents pursuant to the terms of this Indenture. As long as the 1996 Bonds are registered in the name of a Depository, or its nominee, the Trustee agrees to comply with the terms and provisions of the Letter of Representations, including the provisions of the Letter of Representations with respect to any delivery of the 1996 Bonds to the Trustee, which provisions shall supersede the provisions of this Indenture with respect thereto. If any Depository determines not to continue to act as a_Depository for the 1996 Bonds held in a Book Entry System, the Issuer may attempt to have established a securities depository/Book Entry System relationship with another Depository under this Indenture. If the Issuer does not or is unable to do so, the Issuer and the Trustee, after the Trustee has made provision for notification of the Beneficial Owners by appropriate notice to the then Depository, shall permit withdrawal of the 1996 Bonds from the Depository and shall authenticate and deliver 1996 Bond certificates in fully registered form to the assignees of the Depository or its nominee or to the Beneficial Owners. Such withdrawal, authentication and delivery shall be at the cost BM13104580 CH135 -33 -4- and expense (including costs of printing or otherwise preparing and delivering such replacement 1996 Bonds) of the Owner. Such replacement 1996 Bonds shall be in the denominations specified in Section 201A. ' 1.03. Section 301A is added to the Indenture, to read as follows: ' 301A. Redemption of 1996 Bonds,. (a) The 1996 Bonds are subject to mandatory redemption at a price of 100% of the principal amount thereof plus accrued interest to the date fixed for redemption as soon as practicable following the provision of due notice to owners: (i) ' in whole, at any time if HUD determines and notifies the Trustee that prepayment of the FHA Mortgage Note will avoid a mortgage insurance claim and is therefore in the best interest of the federal government; or (ii) in whole or in part, if and to the extent that FHA Mortgage Insurance Proceeds are payable to the Trustee; or (iii) in whole or in part, if insurance proceeds as a result of damage to the Project or condemnation awards are applied to prepayment under the Loan Agreement; or (iv) in whole or in part, if the Owner prepays the Loan without notice or ' prepayment penalty while under the supervision of a trustee in bankruptcy; or (v) in part from excess monies in the Bond Fund as determined pursuant to this Indenture. ' (b) The 1996 Bonds maturing on July 1, 2016 and July 1, 2030 are subject to mandatory sinking fund redemption at a price equal to the principal amount thereof plus accrued interest to ' the sinking fund redemption date, on the following dates and in the following principal amounts: 1996 Bonds Maturinp- July 1. 2016 Redemption Date Principal Amount January 1, 2013 $ 25,000 July 1, 2013 25,000 January 1, 2014 25,000 ' July 1, 2014 25,000 January 1, 2015 25,000 July 1, 2015 25,000 January 1, 2016 30,000 July 1, 2016 30,000 BMB104580 CH135 -33 52 1996 Bonds Maturine Julv 1, 2030 Redemption Date Principal Amount Redemption Date Principal Amount January 1, 2017 $ 30,000 January 1, 2024 $ 45,000 July 1, 2017 30,000 July 1, 2024 50,000 January 1, 2018 30,000 January 1, 2025 50,000 July 1, 2018 35,000 July 1, 2025 50,000 January 1, 2019 35,000 January 1, 2026 55,000 July 1, 2019 35,000 July 1, 2026 55,000 January 1, 2020 35,000 January 1, 2027 55,000 July 1, 2020 35,000 July 1, 2027 60,000 January 1, 2021 40,000 January 1, 2028 60,000 July 1, 2021 40,000 July 1, 2028 60,000 January 1, 2022 40,000 January 1, 2029 65,000 July 1, 2022 40,000 July 1, 2029 65,000 January 1, 2023 45,000 January 1, 2030 70,000 July 1, 2023 45,000 July 1, 2030 220,000 Such sinking fund installments shall be subject to reduction to the extent that the outstanding principal amount of the 1996 Bonds of the relevant maturity has been reduced by mandatory or optional redemption of 1996 Bonds (other than mandatory sinking fund redemption. (c) The 1996 Bonds maturing on or after January 1. 2007 are subject to optional redemption, but only from Eligible Funds, in whole or in part on any date on or after July 1, 2006, at a redemption price equal to the principal amount of each 1996 Bond to be redeemed, plus accrued interest to the redemption date, plus a premium, expressed as a percentage of the principal amount of each 1996 Bond to be redeemed as follows: Redemption Date Premium July 1, 2006 to June 30, 2007 2.00% July 1, 2007 to June 30, 2008 1.00% July 1, 2008 and thereafter None If less than all Outstanding 1996 Bonds are to be so redeemed, the Trustee shall select an amount of 1996 Bonds of each maturity to be redeemed so that the resulting decrease in debt service on the 1996 Bonds during each six month period ending on a Bond Payment Date thereafter is proportional, as nearly as practicable, to the decrease in the payments under the Loan Agreement in each such six month period. If less than all of the 1996 Bonds of a particular maturity are to be redeemed, the 1996 Bonds to be redeemed shall be selected by the Trustee by lot in the manner the Trustee in its discretion may determine (each portion of $5,000 principal amount being treated as one 1996 Bond for this purpose); provided, that the 1996 Bonds shall be redeemed only in integral multiples of $5,000 principal amount. Upon surrender of any 1996 Bond redeemed only in part, the Issuer shall execute and the Trustee shall authenticate and deliver to the Holder thereof, without expense to the Holder, a new 1996 Bond or Bonds of the BMIB104580 CH135 -33 -6- 1 same maturity and of authorized denominations equal in aggregate principal amount to the unredeemed portion of the 1996 Bond surrendered. 1.04. The form of 1996 Bond attached as Exhibit A to this First Supplemental Indenture is hereby added to the Indenture. ARTICLE II AMENDMENTS TO ORIGINAL INDENTURE 2.01. Amendments to Section 101.. (a) The definition of "Additional Bonds" in Section 101 of the Original Indenture is amended to read: "Additional Bonds" means any Bonds issued pursuant to Section 213 or 214 hereof. (b) The definition of "Bonds" in Section 101 of the Original Indenture is amended to read: "Bonds" means any of the Series 1988 Bonds, the 1996 Bonds and any other Additional Bonds issued from time to time hereunder. (c) The definition of "Indenture" in Section 101 of the Original Indenture is amended to read: "Indenture" means this Trust Indenture, as amended and supplemented by the First Supplemental Indenture, and as further amended and supplemented from time to time. (d) The definition of "Letter of Credit" in Section 101 of the Original Indenture is amended to read: "Letter of Credit" means an unconditional irrevocable letter of credit in favor of the Trustee authorizing payment thereunder upon presentation of a statement that payment is due, and drawn at the order of a person other than the Owner (but who may be a partner of the Owner) and issued or confirmed either by (i) a bank which has outstanding an issue of unsecured debt securities rated at least as high as the Outstanding Bonds by Moody's (or an equivalent short-term rating if the term of the Letter of Credit is one year or less), or (ii) any other bank which secures such Letter of Credit with Qualified Investments equal in value to 103% of the face value of the Letter of Credit, and which contains the terms described in Section 405 of this Indenture, provided that the Trustee receives confirmation from Moody's that such Letter of Credit will not adversely affect the rating on the Bonds. (e) The definition of "Loan Agreement" in Section 101 of the Original Indenture is amended to read: BMB104580 -7- CH135-33 "Loan Agreement" means the Loan Agreement dated as of November 1, 1988, between the Owner and the Issuer, as amended by the First Amendment to Loan Agreement dated as of September 1, 1996, between the Owner and the Issuer, and as further amended from time to time. read: (f) The definition of "Mortgage" in Section 101 of the Original Indenture is amended to "Mortgage" means the Mortgage dated as of May 1, 1989, from the Owner to the Trustee, as amended as of September 1, 1996, and as further amended and supplemented from time to time. (g) The definition of "Mortgage Note" in Section 101 of the Original Indenture is amended to read: "Mortgage Note" means the Mortgage Note dated as of May 1, 1989, executed by the owner and secured by the Mortgage, as amended as of September 1, 1996, and as further amended and supplemented from time to time. (h) The definition of "Qualified Investments" in Section 101 of the Original Indenture is amended to read: "Qualified Investments" means any of the following: (a) Direct general obligations of the United States of America; (b) Obligations the timely payment of the principal of and interest on which is unconditionally guaranteed or insured by the United States of America; (c) Shares (with a stable par value) of an investment company (1) registered under the Federal Investment Company Act of 1940, whose shares are registered under the Federal Securities Act of 1933; (2) whose only investments are in (i) securities described in clauses (a) or (b) above; (ii) general obligation tax- exempt securities rates "Aa3/Pl" or better by Moody's, and (iii) repurchase agreements fully collateralized by the securities described in clauses (a) or (b) above if the repurchase agreements are entered into only with those primary reporting dealers that report to the Federal Reserve Bank of New York and with the 100 largest United States commercial banks and (3) which provider is rated in the highest rating category assigned by Moody's; (d) Any general obligation of the State of Minnesota or any of its political subdivisions rated at least as high by Moody's as the rating on the Bonds; provided that securities described in clauses (a) or (b) above have been irrevocably deposited in escrow to effect discharge of the general obligations in the same manner and subject to the same conditions required to effect discharge of the Bonds under Article VII of the Indenture, and such escrow has been rated at least as high as the rating on the Bonds by Moody's; BM13104580 CH135 -33 -8- ' (e) Certificates of deposit with fixed maturities, time deposits, repurchase agreements or any other direct obligation with or of any national or state bank or Federal chartered savings and loan association whose senior unsecured debt obligations are rated ' "MIGI +" or better by Moody's or "Aaa" if the certificate of deposit or other obligation has a maturity greater than one year; ' (f) An investment agreement entered into with a financial institution whose senior unsecured debt obligations, or claims paying ability, is rated "Aaa" (or equivalent) by Moody's; (g) Prime commercial paper of a United States corporation, finance company or banking institution which commercial paper is rated in the highest category by ' Moody's; or (h) Any other investment allowed under Moody's investment criteria (at the time of the investment) that will not adversely affect the rating on the Bonds. (i) The definition of "Regular Record Date" in Section 101 of the Original Indenture is ' amended to read: "Regular Record Date" means, with respect to an Interest Payment Date, the close of business on the fifteenth day of the month preceding such Interest Payment Date, whether or not a business day. ' (j) The following definitions are added to Section 101 of the Original Indenture: "Beneficial Owner" means, with respect to Bonds, a person owning a Beneficial Ownership Interest therein, as evidenced to the satisfaction of the Trustee. C 0 "Beneficial Ownership Interest means the beneficial right to receive payments and notices with respect to Bonds which are held by the Depository under a Book Entry System. "Book Entry Form" or "Book Entry System" means, with respect to the Bonds, a form or system, as applicable, under which (i) the Beneficial Ownership Interests may be transferred only through a book entry and (ii) physical Bond certificates in fully registered form are registered only in the name of a Depository or its nominee as Holder, with the physical Bond certificates "immobilized" in the custody of the Depository. The Book Entry System maintained by and the responsibility of the Depository and not maintained by or - the responsibility of the Issuer or the Trustee is the record that identifies, and records the transfer of the interests of, the owners of book entry interests in the Bonds. "Depository" means any securities depository that is a clearing agency under federal law operating and maintaining, with its participants or otherwise, a Book Entry System to record ownership of book entry interests in Bonds, and to effect transfers of book entry interests in Bonds in Book Entry Form, and includes and means initially The Depository Trust Company (a limited purpose trust company), New York, New York. BMB104580 CH135 -33 W "Direct Participant" means a Participant as defined in the Letter of Representations "Eligible Funds" means the proceeds of a borrowing, moneys provided by HUD or another credit enhancement provider, moneys provided by the Owner and on deposit with the Trustee more than 90 days, during which time no petition has been filed by or against the Owner commencing a case under the United States Bankruptcy Code, and any other moneys delivered to the Trustee accompanied by an Opinion of Counsel satisfactory to the Trustee to the effect that the payment of such moneys would not be avoidable as a preference in the event a petition were filed by or against the Owner commencing a case under the United States Bankruptcy Code. "First Supplemental Indenture" means the First Supplemental Trust Indenture dated as of September 1, 1996, between the Issuer and the Trustee. "Indirect Participant" means a person utilizing the Book Entry System of the Depository by, directly or indirectly, clearing through or maintaining a custodial relationship with a Direct Participant. "Letter of Representations" means the Letter of Representations dated September 1, 1996, by and among the Issuer, the Trustee and the Depository. " Moody's" means Moody's Investors Service, if at the time Moody's Investors Service maintains a credit rating on the Bonds, and otherwise means any nationally recognized rating agency that at the time maintains a credit rating on the Bonds. "1996 Bonds" means the Issuer's City of Chanhassen, Minnesota, Multifamily Housing Development Revenue Refunding Bonds (FHA Insured Mortgage Loan -- Heritage Park Apartments Project), Series 1996, authorized by the First Supplemental Indenture. 2.02. Amendment to Section 201. Section 201 of the Original Indenture is amended by substituting the words "Series 1988 Bond" or "Series 1988 Bonds" for each appearance of the word 'Bond" or "Bonds" therein. 2.03. Amendment to Section 213. Clause (10) of Section 213 of the Original Indenture is amended by substituting the word " Moody's" for the phrase "any rating agency which, at the request of the Issuer or the Owner,maintains a rating on the Bonds ". 2.04. Deletion from Article II,. Article II of the Original Indenture is amended by deleting Sections 208, 209, 210 and 211. All references elsewhere in the Indenture to "Mandatory Tender" of Bonds or the "Mandatory Tender Date" or the "Purchase Payments Agreement" are of no further force or effect. 2.05. Amendment to Section 301. Section 301(a) of the Original Indenture is amended by substituting the words "Series 1988 Bond" for each appearance of the word "Bond" therein, and Sections 301(b) and 301(c) are hereby deleted. BMB104580 CH135 -33 -10- 2.06. Amendment to Section 404,. The fifth paragraph of Section 404 of the Original Indenture is amended by inserting the phrase "(other than amounts on deposit in the Assignment Fee Subaccount of the Bond Fund and the Interest Reserve Subaccount of the Bond Fund)" after ' the phrase "Excess amounts on deposit in the Bond Fund on any Interest Payment Date ". 2.07. Amendment to Section 409,. Section 409 of the Original Indenture is amended by ' deleting the phrase "in conjunction with an acceleration of the Bonds pursuant to Section 602 ". 2.08. Amendment to Section 601,. Section 601 of the Original Indenture is amended by ' deleting subsection (c). 2.09. Amendment to Section 602,. The first paragraph of Section 602 of the Original Indenture is amended to read: If an event of default described in subsection (a), (b) or (c) of Section 601 has ' occurred and is continuing and shall permit the Trustee to make a claim for Mortgage Insurance benefits, (i) the Trustee may with the written consent of HUD, and (ii) the Trustee shall, upon the written request of the holders of at least 25% of the Bond ' Obligation and the written consent of HUD, by notice in writing delivered to the Issuer and the Owner, declare the principal of all Bonds then outstanding and the interest accrued thereon immediately due and payable without premium, and such principal and ' interest shall thereupon become and be immediately due and payable. If an event of default described in subsection (d) of Section 601 has occurred and is continuing and shall ' permit the Trustee to make a claim for Mortgage Insurance benefits, (i) the Trustee may with the written consent of HUD, and (ii) the Trustee shall, upon the written request of the holders of 100% of the Bond Obligation and the written consent of HUD, by notice in writing delivered to the Issuer and the Owner, declare the principal of all Bonds then outstanding and the interest accrued thereon immediately due and payable without premium, and such principal and interest shall thereupon become and be immediately due and payable. 2.10. Amendment to Section 901. Section 901 of the Original Indenture is amended by inserting the phrase "Eligible Funds, in the form of after "Trustee" in clause (b) of the second paragraph thereof. ' ARTICLE III ADMINISTRATIVE PROVISIONS ' 3.01 - `Effective Date. This First Supplemental Indenture, and the amendments to the Indenture made hereby, shall be effective from and after September 1, 1996. 3.02. Confirmation of Original Indenture,. Except as expressly amended or modified hereby, the Original Indenture is hereby ratified and confirmed, and shall remain in full force and effect. BMB1045BO _11_ CH135 -33 3.03. Certain Defined Terms. Capitalized terms used but not defined in this First Supplemental Indenture and defined in the Original Indenture shall have the meanings given in the Original Indenture. 3.04. Governine Law. This First Supplemental Indenture shall be governed by the laws of the State of Minnesota. 3.05. Countemarts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall constitute an original, but all of which shall constitute only one instrument. [The balance of this page is intentionally left blank:.] BMB104580 CH135 -33 -12- IN WITNESS WHEREOF, the Issuer and the Trustee have caused this First Supplemental Indenture to be executed as of the date first above written. i BMB104580 CH135 -33 CITY OF CHANHASSEN, MINNESOTA By Mayor By City Manager -13- FIRST TRUST NATIONAL ASSOCIATION as Trustee Its BM13104580 0 t 1135 -33 -I "- I FIRST AMENDMENT TO LOAN AGREEMENT 8/21/96 ' This FIRST AMENDMENT TO LOAN AGREEMENT is entered into as of September 1, 1996, between the CITY OF CHANHASSEN, MINNESOTA, a Minnesota municipal corporation (the "Issuer "), and HERITAGE PARK APARTMENTS LIMITED PARTNERSHIP, ' a Minnesota limited partnership (the "Owner "). RECITALS Pursuant to a Trust Indenture dated as of November 1, 1988 (the "Original Indenture "), between the Issuer and First Trust National Association, as trustee (the "Trustee "), the Issuer has ' issued and sold its Multifamily Housing Development Revenue Bonds (FHA Insured Mortgage Loan -- Heritage Park Apartments Project), Series 1988 (the "1988 Bonds "). Proceeds of the 1988 Bonds were used to finance a loan to the Owner, pursuant to a Loan Agreement dated as of November 1, 1988 (the "Original Loan Agreement," and as amended hereby, the "Loan Agreement ") and used by the Owner to acquire, construct and equip a 60 -unit multifamily ' housing development (the "Project ") in the City of Chanhassen. The Company's repayment obligations under the Loan Agreement are evidenced by a Mortgage Note dated as of May 1, 1989 and amended as of September 1, 1996 (as so amended, the "Mortgage Note "), from the Owner to the Trustee. The Mortgage Note is secured by a Mortgage dated as of May 1, 1989, and amended as of September 1, 1996 (as so amended, the "Mortgage "), from the Owner to the Trustee. The Mortgage is insured by the Federal Housing Administration ( "FHA ") pursuant to ' Section 221(d)(4) of the National Housing Act of 1934, as amended. To refinance the Project, the Issuer will issue the 1996 Bonds described below as a series ' of Additional Bonds under the Indenture, and the 1988 Bonds will be called for optional redemption within 90 days after the issuance of the 1996 Bonds. In connection with the issuance of the 1996 Bonds and the redemption of the 1988 Bonds, the Original Indenture will be amended as set forth in a First Supplemental Trust Indenture dated as of September 1, 1996, between the Issuer and the Trustee. The Issuer has authorized the issuance of the 1996 Bonds and the execution and delivery of the First Supplemental Indenture and this First Amendment to Loan Agreement by resolution adopted by its City Council on August 26, 1996. ARTICLE I ' - AMENDMENTS TO ORIGINAL LOAN AGREEMENT ' 1.01. Amendments to Section 1.1,. (a) The definition of "Bonds" in Section 1.1 of the Original Loan Agreement is amended to read: ' "Bonds" means any of the Series 1988 Bonds, the 1996 Bonds and any other Additional Bonds issued from time to time under the Indenture. BMB105192 -I_ CH135 -33 (b) The definition of "Indenture" in Section 1.1 of the Original Loan Agreement is amended to read: "Indenture" means the Trust Indenture dated as of November 1, 1988, between the Issuer and the Trustee, as amended and supplemented by the First Supplemental Indenture, and as further amended and supplemented from time to time. (c) The definition of "Mortgage" in Section 1.1 of the Original Loan Agreement is amended to read: "Mortgage" means the Mortgage dated as of May 1, 1989, from the Owner to the Trustee, as amended as of September 1, 1996, and as further amended and supplemented from time to time. (d) The definition of "Mortgage Note" in Section 1.1 of the Original Loan Agreement is amended to read: "Mortgage Note" means the Mortgage Note dated as of May 1, 1989, executed by the owner and secured by the Mortgage, as amended as of September 1, 1996, and as further amended and supplemented from time to time. (e) The following definitions are added to Section 1.1 of the Original Loan Agreement: "First Supplemental Indenture" means the First Supplemental Trust Indenture dated as of September 1, 1996, between the Issuer and the Trustee. "Loan Agreement" means the Loan Agreement dated as of November 1, 1988, between the Owner and the Issuer, as amended by the First Amendment to Loan Agreement dated as of September 1, 1996, between the Owner and the Issuer, and as further amended from time to time. "1996 Bonds" means the Issuer's City of Chanhassen, Minnesota, Multifamily Housing Development Revenue Refunding Bonds (FHA Insured Mortgage Loan -- Heritage Park Apartments Project), Series 1996, authorized by the First Supplemental Indenture. 1.02. Amendment to Section 3.1. Section 3.1(a) of the Original Loan Agreement is amended to read: - -(a) In accordance with the terms and provisions of the Indenture, the Issuer has issued the Series 1988 Bonds and the 1996 Bonds and delivered the Series 1988 Bonds and the 1996 Bonds to the initial purchasers thereof. The proceeds derived from the sale of the Series 1988 Bonds and the 1996 Bonds are, under and pursuant to the terms of this Loan Agreement, loaned to the Owner. The proceeds of the Series 1988 Bonds were disbursed for the acquisition and construction of the Project, and the proceeds of the 1996 Bonds will be disbursed to redeem the Series 1988 Bonds on , 1996. BMB105192 CH135 -33 -2- ' 1.03. Amendment to Section 3.5.. Section 3.5(a) of the Original Loan Agreement is amended by substituting the phrase Series 1988 Bonds" for the word "Bonds" in the first sentence thereof and by inserting the following paragraph at the end thereof. ' "On the date of issuance of the 1996 Bonds, the Owner shall deposit in the Bond Fund cash (or Letters of Credit, if permitted by the Indenture) in amounts sufficient, ' together with amounts then on hand in the Bond Fund, to cause the balance in the Assignment Fee Subaccount to be $ , the balance in the Interest Reserve Subaccount to be $ , and the amount available to redeem the Series 1988 Bonds on , 1996 (including proceeds of the 1996 Bonds) to be sufficient to pay all principal of and interest on the Series 1988 Bonds on ' 1996. In addition, the Owner shall pay, from sources other than proceeds of the Series 1988 Bonds or the 1996 ' Bonds, all costs and expenses of issuance of the 1996 Bonds." Section 3.1(b) of the Original Loan Agreement is deleted. Section 3.1(c) of the Original Loan ' Agreement is amended by inserting the phrase "with respect to the Series 1988 Bonds" after the phrase "Determination of Taxability" in the first sentence. Section 3.1(d) of the Original Loan Agreement is amended by substituting the phrase "Series 1988 Bonds" for the word "Bonds." 1.03. Deletion from Loan Agreement. All references in the Loan Agreement to ' "Mandatory Tender" of Bonds or the "Mandatory Tender Date" or the "Purchase Payments Agreement" are of no further force or effect. I ARTICLE 11 ' ADMINISTRATIVE PROVISIONS 2.01. Consent to First Supplemental Indenture,. The Owner hereby consents to the ' execution, delivery and performance by the Issuer and the Trustee of the First Supplemental Indenture, and to the amendments to the Indenture made thereby. ' 2.02. Effective Date. This Amendment to Loan Agreement, and the amendments to the Loan Agreement made hereby, shall be effective from and after September 1, 1996. ' 2.03. Confirmation of Original Loan Agreement. Except as expressly amended or modified hereby, the Original Loan Agreement is hereby ratified and confirmed, and shall remain in full force and effect. 2.04:_ Certain Defined Terms,. Capitalized terms used but not defined in this First Amendment to Loan Agreement and defined in the Original Loan Agreement shall have the ' meanings given in the Original Loan Agreement. 2.05. Governing Law. This First Amendment to Loan Agreement shall be governed by the laws of the State of Minnesota. BMB105192 CH135 -33 -3- 2.06. Counterparts. This First Amendment to Loan Agreement may be executed in any number of counterparts, each of which shall constitute an original, but all of which shall constitute only one instrument. [The balance of this page is intentionally left blank.] BMB105192 CH135 -33 -4- 1 1 IN WITNESS WHEREOF, the Issuer and the Owner have caused this First Amendment to Loan Agreement to be executed as of the date first above written. 1 CITY OF CHANHASSEN, MINNESOTA 1 By Mayor 1 By City Manager 1 1 1 i 1 1 1 1 . 1 1 1 BMB105192 -5- CH135-33 1 HERITAGE PARK APARTMENTS LIMITED PARTNERSHIP General Partner BPMB105192 CH135 -33 -6-