#076 09-15-81 Execute Construction Loan AgreementResolution #76
September 15, 1981 109 O9
Member Johnson introduced and read the following resolution and moved its
adoption:
NOTE RESOLUTION
BE IT RESOLVED by the City Council of the City of Golden Valley, Minnesota,
as follows:
ARTICLE ONE
DEFINITIONS, LEGAL AUTHORIZATION AND FINDINGS
1-1. Definitions.
The terms used herein, unless the context hereof shall require otherwise
shall have the following meanings, and any other terms defined in the Loan
Agreement shall have the same meanings when used herein as assigned to them in
the Loan Agreement unless the context or use thereof indicates another or
different meaning or intent.
Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes,
Chapter 474, as amended;
Assignment of Leases and Rents: the agreement to be executed by the
Borrower assigning all the rents, eases 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
St. Paul and Minneapolis, Minnesota, and any opinion of Bond Counsel shall be a
written opinion signed by such Counsel;
Borrower: Pondwood Associates, a Minnesota general partnership, consisting
of Thomas W. Prokasky, Richard A VanSickle, Charles K. Allen, Robert A. Olson,
Dean VanHorn, Gerald E. Mundt, Stanley M. Chasney, Richard W. Walker, Paul J. Harms,
and Douglas R. Iverson, its successors, assigns, and any surviving, resulting or
transferee business entity which may assume its obligations under the Loan
Agreement;
City: the City of Golden Valley, Minnesota, its successors and assigns;
Construction Loan Agreement: the agreement to be executed by the City, the
Borrower and the Lender, re ating to the disbursement and payment of Project
Costs for the construction and installation of the Improvements;
Guaranty: the Guaranty to be executed by each of the partners in the
Borrower in favor of the Lender;
Improvements: three one-story buildings to be used as commercial office
buildings, inc u ing any tangible personal property, 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;
Lender: First Robbinsdale State Bank, Robbinsdale, Minnesota its successors
and assigns;
Resolution #76 - Continued September 15, 1981
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Loan Agreement: the agreement to be executed by the City and the Borrower,
providing for t e 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, 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;
Note: the $588,000 Commercial Development Revenue Note of 1981 (Pondwood
Associates Project) to be issued by the City pursuant to this Resolution and the
Loan Agreement;
Note Register: the records kept by the City 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 Pledge Agreement to be executed by the City and the
Lender assigning and pledging the Loan Agreement to the Lender;
Principal Balance: so much of the principal sum on the Note as from time
to time may have been advanced to or for the benefit of the City and remains
unpaid at any time;
Project: the Land and Improvements as they may at any time exist;
Project Costs: the total of all "Construction Costs" and "Loan and
Carrying ar—g —es -,-Tr as those terms are defined in the Loan Agreement;
Rate Agreement: the Adjustable Rate Agreement to be executed by the City,
the Borrower and the Lender in connection with the interest rate changes in the
Note;
Resolution: this Resolution of the City adopted September 15, 1981,
together with any supplement or amendment thereto.
Subordination Agreements: collectively, the Subordination, Nondisturbance
and Attornment Agreements to be executed by each of the Tenants of the Project;
All references in this instrument to designated "Articles," "Sections" and
other subdivisions are to the designated Articles, Sections and subdivisions of
this instrument as originally executed. The words "herein," "hereof" and
"hereunder" and other words of similar import refer to this Resolution as a
whole not to any particular Article, Section or subdivision.
1-2. Legal Authorization.
The City is a politacal 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.
Resolution #76 - Continued September 15, 1981
1-3. Findings.
The City Council has heretofore determined, and does hereby determine, as
follows:
(1) The City is authorized by the Act to enter into a Loan Agreement for the
public purposes expressed in the Act;
(2) The City has made the necessary arrangements with the Borrower for the
establishment 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, the Note and the Construction Loan Agreement, which documents specify
the terms and conditions of the acquisition and financing of the Improvements to
be included in the Project;
(3) in authorizing the Project the City's purpose is, and in its judgment the
effect thereof will be, to promote 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 development of revenue-producing enterprises
to use the available 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
accessible employment opportunities for residents in the area; the expansion of
an adequate tax base to finance the increase in the amount and cost of governmental
services, including educational services for the school district serving the
community in which the Project is situated;
(4) 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 $588,000 as
hereinafter provided;
(5) 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;
(6) 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
(7) 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 (A) of Section 103(b)(6) of the Code with respect to an issue
of $1,000,000 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.
1 1 n Resolution #76 - Continued
1-4. Authorization and Ratification of Project.
September 15, 1981
The City has heretofore and does hereby authorize the Borrower, in accordance
with the provisions of Section 474.03(7) of the Act and subject to the terms and
conditions set forth in the Construction Loan Agreement, 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 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.
ARTICLE TWO
NOTE
2-1. Authorized Amount and Form of Note.
The Note issued pursuant to this Resolution shall be in substantially the
form set forth attached hereto as Exhibit A 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 $588,000
unless a duplicate Note is issued pursuant to Section 2-6.
2-2. The Note.
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 manual signatures
of its Mayor and City Clerk and shall be sealed with the seal of the City. In
case any officer whose signature shall appear on the 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 such officers had remained
in office until delivery.
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:
(1) an executed copy of each of the following documents:
(A) the Loan Agreement;
(B) the Pledge Agreement;
(C) the Mortgage;
(D) the Assignment of Leases and Rents;
(E) the Construction Loan Agreement;
(F) the Guaranty;
Resolution #76 - Continued September 15, 1981 1 1 3
(G) the Subordination Agreements;
(H) the Rate Agreement.
(2) an opinion of Counsel for the Borrower in scope and substance
satisfactory to Bond Counsel as to the authority of the Borrower to enter into
the transaction and other related matters;
(3) the opinion of Bond Counsel as to the validity and tax exempt statuts
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 require for the closing.
Upon delivery of the Note, the Lender shall, on behalf of the City,
advance funds for payment of the Project Costs upon receipt of such supporting
documentation as the Lender may deem reasonably necessary, including compliance
with the provisions of the Construction Loan Agreement. The Borrower shall
provide the City with a full accounting of all funds disbursed for Project Costs.
2-5. Registration of Transfer.
The City will cause to be kept at the office of the City Clerk a Note
Register in which, subject to such reasonable regulations as it may prescribe,
the City shall provide for the registration of transfers of ownership of the
Note. The Note 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 Clerk,
duly executed by the Lender or its duly authorized agent. Upon such transfer
the City 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.
2-6. 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 idemnity 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.
2-7. Ownership of Note.
The City may deem and treat the person in whose name the Note is last
registered in the Note Register and by notation on the Note whether or not such
Note shall be overdue, as the absolute owner of such Note for the purpose of
receiving payment of or on account of the Principal Balance, redemption price or
interest and for all other purposes whatsoever, and the City shall not be
affected by any notice to the contrary.
1 1 4 Resolution #76 - Continued September 15, 1981
2-8. Limitation on Note Transfers.
The Note has been issued without registration under state or other securities
laws, pursuant to an exemption for such issuance; and accordingly the Note may
not be assigned or transferred in whole or part, nor may a participation
interest in the Note be given pursuant to any participation agreement, except in
accordance with an applicable exemption from such registration requirements.
ARTICLE THREE
GENERAL COVENANTS
3-1. Payment of Principal and Interest.
The City covenants that it will promptly pay or cause to be paid the principal
of and interest on the Note at the place, on the dates, 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, the Mortgage, the Assignment of Leases and Rents and the Guaranty,
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 Mortgage, the Assignment of Leases and Rents and the Guaranty;
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.
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 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 limitation the Act, to issue the Note authorized hereby, pledge the
revenues and 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 enforceable obligation of the
City according to the terms thereof.
3-3. Enforcement and Performance of Covenants.
The City agrees to enforce all covenants and obligations of the Borrower
under the Loan Agreement and to perform all covenants and other provisions
pertaining to the City contained in the Note, the Loan Agreement, the Pledge
Agreement, the Construction Loan Agreement and the Rate Agreement.
1
Resolution #76 - Continued
September 15, 1981 11 5
3-4. Nature of Security.
Notwithstanding anything contained in the Note, the Mortgage, the Assignment
of Leases and Rents, the Loan 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 or 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 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; 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 consitutute
a debt of the City within the meaning of any constitutional 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 Mortgage, the Assignment of Leases and Rents, the
Construction Loan Agreement, the Guaranty 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 or
enforce the covenants and other provisions contained in the Note, the Loan
Agreement and the Construction Loan Agreement shall be subject at all times to
the availability of revenues under the Loan Agreement sufficient to pay all
costs of such performance or the enforcement thereof, and the City shall not be
subject to any personal or pecuniary liability thereon.
ARTICLE FOUR
MISCELLANEOUS
4-1. Severability.
If any provisions 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 or 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, sentances, 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.
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.
J
11 L Resolution #76 - Continued
4-3 Registration of Resolution.
The City Clerk is authorized and directed to
to be filed with the County Auditor of Hennepin
County Auditor a certificate that the Note as a
entered upon his bond register.
4-4 Authorization to Execute Agreements.
September 15, 1981
cause a copy of this Resolution
County and to obtain from said
bond of the City has been duly
The forms of the proposed Loan Agreement, the Pledge Agreement, the
Construction Loan Agreement and the Rate Agreement are hereby approved in
substantially the form heretofore presented to the City Council; and the Mayor
and City Clerk are authorized to execute the Loan Agreement, the Pledge
Agreement, the Construction Loan Agreement, and the Rate Agreement in the name
of and on behalf of the City and such other documents as Bond Counsel consider
appropriate in connection with the issuance of the Note. In the event of the
absence or disability of the Mayor or the City 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 do all things and execute all
instruments and documents required to be done or executed by such absent or
disabled officers.
Adopted: September 15, 1981
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ATTEST:
John Mu y, City Clerk
The motion for the adoption of the foregoing resolution was seconded by Member
Mitchell and upon a vote being taken thereon, the following voted in favor
thereof: Anderson, Johnson, Mitchell, Stockman and Thorsen, and the following
voted against the same: none, whereupon said resolution was declared duly
passed and adopted, signed by the Mayor and her signature attested by the Deputy
City Clerk.
1
C
Resolution #76 - Continued September 15, 1981 1 1 7
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF HENNEPIN
CITY OF GOLDEN VALLEY
Commercial Development Revenue Note of 1981
(Pondwood Associates Project)
$588,000
The City of Golden Valley, Minnesota, a municipal corporation of the State
of Minnesota (the City), for value received hereby promises to pay to the order
of First Robbinsdale State Bank or its assigns (the Holder) at its principal
office in Robbinsdale, Minnesota, or such other place as the Holder may designate
in writing, from the source and in the manner hereinafter provided, the
principal sum of FIVE HUNDRED EIGHTY-EIGHT THOUSAND DOLLARS ($588,000) or so
much thereof as may have been advanced to or for the benefit of the Obligator
(as hereinafter defined), with interest on the unpaid principal balance at an
annual rate equal to seventy-five percent (75%) of the Base Rate (as hereinafter
defined), in any coin or currency which at the time or times 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:
(a) On the first day of the calendar month next succeeding the date on
which the initial advance is made hereunder, and on the first day of each and
every month thereafter until the Completion Date (as defined in the Loan
Agreement hereinafter referred to), and also on said Completion Date if said
Completion Date does not occur on the first day of a month, interest only shall
be due in an amount equal to the interest accrued on the unpaid principal
balance.
(b) On the first day of the first calendar month following said Completion
Date (hereinafter the Amortization Date), interest only shall be due equal to
the interest accrued on the unpaid principal balance.
(c) Thereafter, the unpaid principal balance of this Note, together with
interest thereon, shall be due and payable initially in equal monthly installments
of principal and interest in amounts sufficient to amortize the then unpaid
principal balance of this Note, together with interest at the rate per annum
then payable hereunder, as adjusted in accordance with the provisions hereof, in
full by the twentieth anniversary of the Amortization Date (hereinafter the
Final Maturity Date). Such payments shall be due and payable on the first day
of the second calendar month following the Amortization Date and the first day
of each and every month thereafter, provided that in any event the entire unpaid
principal balance and all accrued interest shall be due and payable in full on
the Final Maturity Date. The rate of interest per annum payable under this Note
and the amount of the monthly installment payments of principal and interest
provided for in this paragraph (c) are further subject to adjustment as hereinafter
provided in this Note. All payments of principal and interest pursuant to this
paragraph (c) shall be applied first to interest due on the outstanding principal
balance and thereafter in reduction of said principal balance.
All interest hereon shall be computed on the basis of actual days elapsed in
a year of three hundred sixty-five (365) days.
11 $ Resolution #76 - Continued
September 15, 1981
In the event the City shall fail to make when due any interest payments or
principal and interest payments required under this Note, the interest payment
or principal and interest payment so in default shall continue as an obligation
of the City until the interest payment or principal and interest payment in
default shall have been fully paid with interest thereon at the interest rate
borne on this Note.
Base Rate
The Base Rate is the rate of interest from time to time publicly announced
by the First National Bank of Minneapolis as its prime rate (which annual rate
shall change effective on the first day following the effective date of any
change in such prime rate), or, if said prime rate is no longer announced by the
First National Bank of Minneapolis, the substitute or replacement then announced
by the First National Bank of Minneapolis, or, if there is no such replacement
or substitute rate for the prime rate, then 100% of the "Certificate of Deposit
Rate," which shall mean the rate per annum published from time to time by the
Federal Reserve System (presently the "Federal Reserve Statistical Release,"
Form H.9(511), entitled "Weekly Summary of Banking and Credit Measures, Average
of Daily Figures") as a weekly average of the daily three-month Certificate of
Deposit Rate (Secondary market), plus 4%.
Quarterly Adjustments of
Base Rate and Amortization c edule
The monthly installments of principal and interest required to be paid by
the City shall be in amounts sufficient to amortize the then unpaid prinicpal
balance of this Note, together with interest at the rate of interest per annum
then payable under this Note, as adjusted in accordance with the provisions of
this Note, in full, equal, monthly installment payments of principal and
interest by the Final Maturity Date. The Base Rate and the amount of monthly
installments of principal and interest to be made in each calendar quarter year
shall be adjusted quarterly on each January 1, April 1, July 1 and October 1,
commencing January 1, 1982.
Additional Adjustments to Interest Rate
(a) Determination of Taxability
If the Holder receives notice of a Determination of Taxability (as defined
in the Loan Agreement hereinafter referred to) the Holder, at its option, may
either: (i) 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 sixty (60) days prior written notice to the City
and the Obligor, in which event the City shall 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, plus the amount of additional federal and state income taxes and
penalties and interest thereon which the Holder estimates it will incur for or
with respect to its current and past tax years and the tax year in which the
date specified in said notice occurs, by reason of such Determination of
Taxability; or (ii) increase the annual rate of interest then payable under this
Note to one hundred thirty percent (130%) of the Base Rate, effective as of the
date of receipt by the Holder of the notice of such Determination of Taxability,
Resolution #76 - Continued September 15, 1981
in which event the monthly installment payments of principal and interest required
hereunder by the City in paragraph (c) above shall be increased, effective as of
the first day of the calendar month following such date of receipt, to an
amount sufficient to amortize the then unpaid principal balance of this Note,
together with interest at the rate of interest per annum then payable under this
Note, as increased in accordance with the provisions of this paragraph, in full,
in equal monthly installment payments of principal and interest, by the Final
Maturity Date, and the City shall also pay to the Holder, the aggregate difference
between (i) the amounts actually paid hereunder between the Date of Taxability
and the date of receipt of notice of a Determination of Taxability, and (ii) the
amounts which would have been due during such period if the increased interest
rate had been in effect, together with the amount of interest and penalties, if
any, incurred by the Holder as a result of such change in taxable status. The
provisions of this paragraph shall survie payment of this Note.
(b) The rate of interest payable on the unpaid principal balance of this
Note shall be adjusted as follows: (i) On the fifth anniversary of the
Amortization Date, to 80% of the Base Rate, unless an average amount of Free
Available Balances (as hereinafter defined) during the preceding 5 year period,
equal to 20% of the average principal amount of this Note outstanding during
such 5 year period, is maintained, in which event the adjustment shall be to a
rate equal to 70% of the Base Rate; (ii) On the tenth anniversary of the
Amortization Date, to 85% of the Base Rate, unless an average amount of Free
Available Balances during the preceding 5 year period equal to 20% of the
average principal amount of this Note outstanding during such 5 year period, is
maintained, in which event the adjustment shall be to a rate equal to 65% of the
Base Rate; (iii) On the fifteenth anniversary of the Amoritzation Date, to 90%
of the Base Rate, unless an average amount of Free Available Balances during the
preceding 5 year period, equal to 20% of the average principal amount of this
note outstanding during such 5 year period, is maintained, in which event the
adjustment shall be to a rate equal to 60% of the Base Rate. Nothing in this
Note or the Loan Agreement shall obligate the Obligor or any of its partners to
maintain any Free Available Advances.
For purposes of this paragraph (b) the term "Free Available Balances" shall
mean the balances in the Obligor's and in the Obligor's partners' non-interest
bearing accounts maintained with the Holder in excess of the amounts requried to
compensate the Holder for services rendered in accordance with the Holder's
standard system of analysis for similar accounts.
City's Right to Prepay Note
Any insurance proceeds or proceeds of condemnation awards applied by the
Holder to reduce the indebtedness evidenced by this Note, pursuant to the
Mortgage, Security Agreement and Fixture Financing Statement securing this Note,
shall be so applied without any prepayment penalty or premium.
The unpaid principal amount of this note may be prepaid in whole or in part
at any time, upon payment of a price equal to the principal amount being so
prepaid and accrued interest to the date of prepayment. Any prepayments
hereunder shall be made upon at least ten (10) days' advance written notice to
the Holder of this Note. Any prepayment shall be applied, first to the payment
of accrued interest and then to reduce the principal installments of this Note
in inverse order of maturity.
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120 Resolution #76 - Continued
Purpose and Security
September 15, 1981
This Note is issued by the City for the purpose of providing funds to be
loaned to Pondwood Associates, a Minnesota general partnership (herein called the
Obligor), pursuant to the terms of a Loan Agreement of even date herewith
(hereinafter called the Agreement), to be used to pay the cost of a Project, as
defined in Minnesota Statutes, Section 474.02, Subdivision 1(a) consisting of
the construction of three buildings, to be used as commercial office buildings.
This Note is secured by a pledge and assignment of the Agreement by the City
to the Holder (the Pledge Agreement), by a Mortgage, Security Agreement and
Fixture Financing Statement of even date herewith, between the Obligor, as
mortgagor, and the Holder, as mortgagee (the Mortgage), by an Assignment of
Rents and Leases, of even date herewith, from the Obligor to the Holder (the
Assignment), and by the personal guaranty of the general partners of the Obligor
(the Guaranty). The disbursement of the proceeds of this Note is subject to the
terms and conditions of a Construction Loan Agreement of even date herewith
among the Holder, the City and the Obligor (the Construction Loan Agreement).
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,
as amended, and pursuant to a resolution duly adopted by the City Council on
September 15, 1981 (the Resolution), and is a special obligation of the City
payable solely from payments to be received by the City pursuant to the
Agreement and from the property which secures payment of this Note. This Note
and the interest thereon shall never constitute a debt of the City within the
meaning of any constitutional provision or statutory limitation and shall never
constitute or give rise to a charge against its general credit or taxing powers,
and is not payable from nor a charge upon any funds of the City other than the
revenues pledged to the payment thereof. This Note does not constitute a charge,
lien or encumbrance, legal or equitable, upon any property of the City, except
the revenues to be received by the City under the Agreement, and the agreement
of the City to perform or cause the performance of the covenants and other
provisions herein referred to shall be limited at all times to the availabilty
of revenues from the Agreement, the Assignment, the Mortgage and the Guaranty,
sufficient to pay all costs of such performance or the enforcement thereof.
All of the agreements, conditions, covenants, provisons and stipulations
contained in the Mortgage, the Resolution, the Agreement, the Construction Loan
Agreement 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.
it is agreed that time is of the essence of this Note. If a default occurs in
any payment due under this Note, or if any Event or Default shall occur under the
Mortgage, the Agreement, the Construction Loan Agreement or the Assignment and is
not cured within any applicable grace period, then the Holder may at its right and
option declare immediately due and payable without notice the principal balance of
this Note and interest accrued thereon, and, to the extent permitted by law, the
applicable prepayment penalty, together with any 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 Agreement, the Construction
Loan Agreement or the Assignment, anything to the contrary therein notwithstanding,
any 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 Agreement,
the Construction Loan Agreement or the Assignment. The Holder may extend the time
of payment of interest and/or principal of this Note, without notice to or consent
of any party liable hereon and without releasing any such party.
Resolution #76 - Continued
September 15, 1981 12
1
The City, for itself, it successors and assigns, subject to limitation of
the City's liability, hereby guarantees payment of this Note and waives
diligence, demand, presentment, protest and notice of dishonor and suretyship
defenses generally, and agrees that without any notice, the Holder hereof and
any present or future owner or owners of any property and interest 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 extend, renew, or otherwise
modify the date or dates or amount or amounts of payment above recited. The
Holder hereof 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. In any such case, the City, subject to
limitation of the City's liability, shall continue to be liable to pay the unpaid
balance of the indebtedness evidenced hereby as so extended, renewed or modified
and notwithstanding any such release.
Negotiation
As provided in the Resolution, this Note may be assigned by the Holder, from
time to time, by an endorsement hereon or by other writing; provided, that notice
of such assignment shall be given in writing to the City and the Obligor and the
name and address of the new Holder shall be noted by the City Clerk on the
registration blank attached hereto.
Separability
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 application of such term to person 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.
Successors in Interest
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 holder and owner, including pledgees, of this Note, whether or
not named as Holder herein.
Modifications
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.
1
The remedies of the Holder, as provided herein
and in the
Mortgage, the
Agreement, the Construction Loan Agreement and the
Assignment,
shall be
cumulative and concurrent; may be pursued singly,
at the sole discretion of the Holder; and may be exercised
successively
as
or together and
often as occasion
therefor shall occur. The failure to exercise any
such right
or remedy shall in
no event be construed as a waiver or release thereof.
The City, for itself, it successors and assigns, subject to limitation of
the City's liability, hereby guarantees payment of this Note and waives
diligence, demand, presentment, protest and notice of dishonor and suretyship
defenses generally, and agrees that without any notice, the Holder hereof and
any present or future owner or owners of any property and interest 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 extend, renew, or otherwise
modify the date or dates or amount or amounts of payment above recited. The
Holder hereof 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. In any such case, the City, subject to
limitation of the City's liability, shall continue to be liable to pay the unpaid
balance of the indebtedness evidenced hereby as so extended, renewed or modified
and notwithstanding any such release.
Negotiation
As provided in the Resolution, this Note may be assigned by the Holder, from
time to time, by an endorsement hereon or by other writing; provided, that notice
of such assignment shall be given in writing to the City and the Obligor and the
name and address of the new Holder shall be noted by the City Clerk on the
registration blank attached hereto.
Separability
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 application of such term to person 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.
Successors in Interest
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 holder and owner, including pledgees, of this Note, whether or
not named as Holder herein.
Modifications
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.
1
122 Resolution #76 - Continued
September 15, 1981
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.
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 15th day of September, 1981.
(seal)
CITY OF GOLDEN VALLEY, MINNESOTA
By
Rosematly ThoLSefl.
ayor
a
Jo�y Murphy, City Cle
Provisions as to Registration
The ownership of the unpaid principal balance of this Note and the interest
accruing thereon is registered on the books of the City of Golden Valley in the
name of the registered holder last noted below:
Name and Address of
Date of Registration Registered Holder Signature of City Clerk
September 15, 1981 First Robbinsdale State Bank
4180 West Broadway
Robbinsdale, MN 55422
Ll
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