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HomeMy WebLinkAboutCity Council Resolution 1978-385�. • CERTIFICATE OF MINUTES RELATING TO $2,400,000 COMMERCIAL DEVELOPMENT REVENUE NOTE (Three H Investments Project) (F. C. Hayer Company, Lessee) ` Issuer: City of Plymouth, Minnesota Governing Body: City Council Kind, date, time and place of meeting: A speTial meeting, held on June 26, 1978, at 7:30 o'clock P.M., at Members present: Mayor Hunt, Councilmembers Hoyt, Neils, Seibold and Spaeth. Members absent: None. Documents Attached: Minutes of said meeting (pages): RESOLUTION NO. 78-385 RESOLUTION RELATING TO A $2,400,000 COMMERCIAL DEVELOPMENT REVENUE NOTE; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA STATUTES, CHAPTER 474 I, the undersigned, being the duly qualified and acting recording officer of the public corporation issuing the obligations referred to in the title of this certificate, certify that the docu- ments attached hereto, as described above, have been carefully compared with the original records of said corporation in my legal custody, from which they have been transcribed; that said documents are a correct and complete transcript of the minutes of a meeting of the governing body of said corporation, and correct and complete copies of all resolutions and other actions taken and of all documents approved by the governing body at said meeting, so far as they relate to said obligations; and that said meeting was duly held by the governing body at the time and place and was attended throughout by the members indicated above, pursuant to call and notice of such meeting given as required by law. WITNESS my hand officially as such recording officer this 27th day of June , 1978. J� Sig-,ature (SEAL) Loretta Garrity, City Clerk Name and Title Member Spaeth introduced the following resolution and moved its adoption: RESOLUTION NO. 78-385 RESOLUTION RELATING TO A $2,400,000 COMMERCIAL DEVELOPMENT REVENUE NOTE; AUTHORIZING THE ISSUANCE THEREOF PURSUANT TO MINNESOTA STATUTES, CHAPTER 474 BE IT RESOLVED by the City Council of the City of Plymouth, Minnesota, as follows: Section 1. Definitions 1.01. In this Resolution the following terms have the following respective meanings unless the context hereof or use herein clearly requires otherwise: Act: the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Chapter 474, as amended: Agreement: the Loan Agreement to be executed by and between the City and the Partnership; Assignment Date: the Assignment Date, as defined in Section 1.01 of the Agreement; Assignment of Rents and Leases: the Assignment of Rents and Leases, to be given by the Partnership to the Lender; Buy and Sell Agreement: the Buy and Sell Agreement among the Lender, the Partnership, the City and Midwest Federal Savings and Loan Association of Minneapolis; City: the City of Plymouth, Minnesota, its succes- sors and assigns; Commitment: the commitment letter of Midwest Federal Savings and Loan Association of Minaeapolis issued in favor of the Partnership, dated May 5, 1978; Construction Loan Agreement: the Construction Loan Agreement to be executed by and among the City, the Part- nership and the Lender; Equipment: those items defined as such in Section 1.01 of the Agreement; Fixtures: those items defined as such in Section 1-1 of the Mortgage; Improvements: the office, warehouse and distri- bution facility to be constructed by the Partnership in accordance with the Plans and Specifications (as defined in the Loan Agreement); Land: the real estate described in Exhibit A to the Mortgage; Lease: the Lease, dated May 10, 1978, as amended, between the Partnership and F. C. Hayer Company, Lessee; Lender: Northwestern National Bank of Minneapolis, its successors and assigns; Loan Agreement Assignment: the Assignment of I6an Agreement, to be executed by the City and accepted by the Lender; Mortgage_: the Combination Mortgage and Security Agreement, between the Partnership, as mortgagor, and the Lender, s mortgagee; Note: the $2,400,000 Commercial Development Revenue Note Three H Investments Project) (F. C. Hayer Company, Lessee) to be issued by the City pursuant to this Resolu- tion; Organizational Documents: the following documents, each of which shall be in form and substance acceptable to the Lender: (i) A copy of the Partnership Agreement of the Partnership, certified as of a current date by a partner of the Partnership; and (ii) An opinion or opinions of Counsel for the Partnership and for the City reasonably acceptable to the Lender indicating that each of the documents referred to in Section 3.03 of this resolution have been duly executed and delivered and are legal and binding obligations of the Partnership and the City, as the case may be, enforceable in accordance with their terms. Partnership: Three H Investments, a limited part- nership, its successors and assigns; -2- Project: the Land, the Improvements, the Equip- ment and the Fixtures, as they may at any time exist; Project Costs: those costs defined in Section 1.01 of the Agreement; and Resolution: this resolution of the City, adopted June 2T, 1978, authorizing the issuance of the Note. Section 2. Findings. It is hereby found and declared that: (a) the real property and improvements described in the Agreement and the Mortgage constitute a Project author- ized by the Act; (b) the purpose of the Project is, and 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 the emer- gence of or to rehabilitate, so far as possible, blighted and marginal lands and areas of chronic unemployment; the retention of industry to use the available resources of the community in order to retain the benefit of its exist- ing investment in educational and public service facilities; halting the movement of talented, educated personnel of mature age to other areas and thus preserving the economic and human resources needed as a base for providing govern- mental services and facilities; more intensive development of land available in the community to provide an adequate and better balanced tax base to finance the increase in the amount and cost of governmental services; (c) the Project when completed will add to the tax base of the City, and will accordingly be of direct bene- fit to the taxpayers of the City as well as those of the County and School District in which the City is located; (d) the Project has been approved by the Commissioner of Securities of the State of Minnesota as tending to fur- ther the purposes and policies of the Act; (e) the financing of the Project, the issuance and sale of the Note, the execution and delivery of the Con- struction Loan Agreement, of the Agreement, of the Buy and Sell Agreement and of the Loan Agreement Assignment, and the performance of all covenants and agreements of the City contained in the Construction Loan Agreement, the Agreement, the Buy and Sell Agreement and the Loan Agreement and of all other acts and things required under the Constitution and laws of the State of Minnesota to make the Construction Loan Agreement, the Agreement, the -3- MW MW Loan Agreement Assignment, the Buy and Sell Agreement and the Note valid and binding obligations of the City enforceable in accordance with their terms, are auth- orized by the Act; (f). it is desirable that the Commercial Develop- ment Revenue Note in the amount of $2,400,000 be issued by the City upon the terms set forth herein, and that the City assign its interest in the Agreement and grant a security interest therein to the Lender as security for the payment of the principal of and interest and premium, if any, on the Note; (g) the loan payments contained in the Agreement are fixed, and required to be revised from time to time as necessary, so as to produce income and revenue suffi- cient to provide for prompt payment of principal of and interest on the Note issued under this Resolution when due, and the Agreement also provides that the Partnership is required to pay all expenses of the operation and maintenance of the Project including, but without limita- tion, adequate insurance thereon and all taxes and special assessments levied upon or with respect to the Land and payable during the term of the Agreement; and (h) under the provisions of Minnesota Statutes, Section 474.10, and as provided in the Agreement and in the Mortgage, the Note is not to be payable from nor charged upon any funds of the City other than the revenue pledged to the payment thereof; the City is not subject to any liability thereon; no holder of the Note shall ever have the right to compel any exercise of the taxing power of the City to pay the Note or the interest thereon, nor to enforce payment thereof against any property of the City except the revenues payable under the Agreement; the Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City except the revenues payable under the Agreement; the Note issued hereunder shall recite that the Note, including interest thereon, is payable solely from the revenue pledged to the payment thereof; and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation. Section 3. Authorization and Sale 3.01. Authorization. The City is authorized by the Act to issue revenue bonds and loan the proceeds thereof to business enterprises to finance the acquisition and construction of "pro- jects" as defined in the Act, and to make all contracts, execute all instruments and do all things necessary or convenient in the exercise of such authority_ 3.02. Preliminary City Approval. By preliminary reso- lution duly adopted by the Council on April 17, 1978, this Council approved the sale of a revenue note pursuant to the Act and the -4- loan of the proceeds to the Partnership for the acquisition of the Land and construction thereon of the Project suitable and designed for use as an office, warehouse and distribution facil- ity and authorized the preparation of such documents as may be appropriate to the Project. 3.03. Approval of Documents. Pursuant to the above, there have been prepared and presented to this Council copies of the following documen'-s, all of which are now, or shall be, placed on file in the office of the Clerk: (a) Construction Loan Agreement; (b) Agreement; (c) Assignment of Loan Agreement; (d) Mortgage; (e) Assignment of Rents and Leases; and (f) Buv and Sell Agreement. The forms of the documents listed in (a) through (f) above are approved, with such variations, insertions and additions as are deemed appropriate by the parties and approved by the City Attorney. Section 4. Authorizations. Upon the completion of the Construction Loan Agreement, the Agreement, the Buy and Sell Agreement and the Loan Agreement Assignment, approved in Section 3.03 hereof, and execution thereof by the Partnership and the Lender, as the case may be, the Mayor, the City Clerk and the City Manager shall execute the same on behalf of the City and shall execute the Note in substantially the form set forth in paragraph 5.01 hereof on behalf of the City, and shall execute such other certifications, documents or instruments as bond counsel or coun- sel for the Lender shall require, subject to the approval of the City Attorney, and all certifications, recitals and representations therein shall constitute the certificates, recitals and representa- tions of the City. Execution of any instrument or document by one or more appropriate officers of the City shall constitute, and shall be deemed the conclusive evidence of, the approval and author- ization by the City and the Council of the instrument or document so executed. Section 5. The tote 5.01. Form and Authorized Amount. The Note shall be issued substantially in the form hereinafter set forth, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further previsions of this Section, in the total principal amount of $2,400,000: -5- '7ORM OF NOTE UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF PLYMOUTH Commercial Development Revenue Note (Three H Investments Project) (F. C. Hayer Company, Lessee) No. R-1 $2,400,000 The City of Plymouth, Minnesota, a municipal corpora- tion of the State of Minnesota (the City), for value received, hereby promises to pay to the order of NORTHWESTERN NATIONAL BANK OF MINNEAPOLIS, or registered assigns (the Holder) at its principal office in Minneapolis, Minnesota or such other place as the Holder may designate in writing, from the source and in the manner, and with interest thereon as hereinafter provided, the principal sum of TWO MILLION FOUR HUNDRED THOUSAND DOLLARS ($2,400,000), with interest on the unpaid principal amount at the rate of seven and three-eighths percent (7-3/88) per annum, in any coin or currency which at the time or times of payment is legal tender for the payment of public or private debts in the United States of America. This Note is payable in install- ments due on the first day of each month (or the next business day thereafter if the first is a holiday) as follows: (a) prior to the first day of the month following the Assignment Date, as defined in the Loan Agreement (the Loan Agreement) between the City and Three H Investments (the Partnership), an amount equal to the interest accrued during the pre- ceding month on the outstanding principal balance of the Note; and (b) comiaencing on the first day of the month follow- ing the Assignment Date, but no later than December 1, 1978, and on the first day of each month thereafter, the sum neces- sary to amortize the principal balance of the Note, in accordance with a standard 25 -year amortization table, which sum is cal- culated to be Seventeen Thousand Five Hundred Forty -One and 11/100 Dollars ($17,541.11). 0 • in the event interest on this Note becomes subject to federal or state income or franchise taxes pursuant to a Determination of Taxability, as defined in Section 4.06 of the Loan Agreement, the rate of interest hereon shall be automa- tically increased to ten and one-quarter percent. (10-1/48) per annum, or, if said Determination of Taxability occurs prior to the Assignment Date, the interest rate on this Note shall there- after remain equal to three percent (38) over the prime rate of interest charged by Northwestern National Bank of Minneapolis from time to time on 90 -day unsecured loans to its commercial borrowers of the highest credit rating, which annual rate shall change when and as such prime rate shall change, until the Assign- ment Date at which time the interest rate shall be ten and one- quarter percent (10-1/46) per annum. The monthly installment pay- ments hereunder from and after the Date of Taxability, as defined in Section 4.06 of the Loan Agreement, shall be computed at the applicable rate or rates set forth above and the City shall pay to the Holder and any prior Holder the aggregate difference be- tween (i) the amounts actually paid hereunder between said Date of Taxability and the effective date of such rate increase and (ii) the amounts which would have been paid to such Holder during such period if the increased rate had been in effect. All interest hereon shall be computed on the basis of the actual number of days elapsed on the assumptions that each month contains thirty (30) days and each year three hundred sixty (360) days, except that prior to the Assignment Date the payments required hereunder shall be made on the basis of actual days elapsed in a three hundred sixty (360)dal year. Payments shall be applied first to interest due on the unpaid principal and thereafter to reduction of the principal. This Note constitutes an issue in the total authorized face amount of $2,400,UOO. This Note is issued by the City pur- suant to the authority granted by Minnesota Statutes, Chapter 474, as amended (the Act), for the purpose of providing funds for a Project, as defined in Minnesota Statutes, Section 474.02, Sub- division la, consisting of certain real estate and construction of improvements thereon, and paying necessary expenses incidental thereto, such funds to be loaned by the City to the Partnership pursuant to a Resolution, adopted June 1978, by the City (the Resolution), the Loan Agreement, and a Construction Loan Agree- ment, of even date herewith, between the City, the Partnership and the Holder (the Construction Loan Agreement), thereby assist- ing activities in the public interest and for the public welfare of the City of Plymouth. This Note is secured by a Mortgage and Security Agreement, of even date herewith (the Mortgage), between the Partnership as Mortgagor and the Holder as Mortgagee, an As- signment of Loan Agreement, of even date herewith, from the City to the Holder, and an Assignment of Rents and Leases, of even date herewith, from the Partnership to the Holder. The principal of this Note is subject to prepayment, on any installment payment date subsequent to the Assignment Date, at a price equal to the principal amount prepaid plus accrued interest to the date of prepayment plus a prepayment fee as follows: -2- W W Within the first five anniversary years, a fee equal to seven percent (7%) of the remaining princi- pal balance of the Note; within the sixth anniver- sary year a fee equal to six percent (6%) of the remaining principal balance of the Note; within the seventh anniversary year a fee equal to five percent (5%) of the remaining principal balance of the Note; within the eighth anniversary year a fee equal to four percent (48) of the remaining principal balance of the Note; within the ninth anniversary year a fee equal to three percent (3%) of the remaining principal balance of the Note; within the tenth anniversary year a fee equal to two percent (2%) of the remaining principal balance of the Note; begin- ning with the eleventh anniversary year and continu- ing to the date of maturity, a fee equal to one percent (18) of the remaining principal balance of the Note. The term "anniversary year" as used here- in shall mean a period of 12 consecutive calendar months, the first of which shall commence on the first day of the first calendar month next succeed- ing the Assignment Date. Subsequent anniversary years shall run consecutively, each commencing upon an anniversary of the commencement of the first anni- versary year. In addition, the Partnership may direct the prepayment of part or all of the outstanding principal balance of the Note, upon a Determination of Taxability, as defined in Section 4.06 of the Loan Agreement. Upon such direction by the Partnership, the principal of the Note shall be subject to prepayment at a price equal to the principal amount so prepaid plus accrued interest, plus additional interest from the Date of Taxability to the date of prepayment as set forth above, and upon the fur- ther terms set forth in Section 4.06 of the Loan Agreement. All prepayments, after deduction of interest and fees shall be applied to reduce the principal balance of the Note. No prepayment shall reduce the amount or postpone the due dates of monthly installment payments due hereunder, nor shall any such prepayment reduce or postpone any other payments due here- under, which installments and other payments shall continue until the entire principal balance has been paid. As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the City at the office of the City Clerk, by the registered Holder hereof in person or by his attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Clerk, -3- %r W duly executed by the registered Ho -:der or his duly authorized attorney. Upon such transfer the City Clerk will note the date of registration and the name and address of the new registered Holder in the registration blank appearing below. Alternatively, the City will at the request of the registered Holder issue new notes in aggregate principal amount equal to the unpaid principal balance of this Note, and of like tenor except as to number and principal amount, and registered in the name of the registered Holder. The City may deem and treat the person in whose name this Note is last registered upon the books of the City with such registration noted on the Note =.s the ab- solute owner hereof, whether or not overdue, for the purpose of receiving payment of or on account of the principal balance, redemption price or interest and for all other purposes, and all such payments so made to the registered Holder or upon his order shall be valid and effectual to satisfy and discharge the liability upon this Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. All of the agreements, conditions, covenants, provi- sions and stipulations contained in the Mortgage, the Resolution, the Construction Loan Agreement, the Loan Agreement, the Assign- ment of Loan Agreement and the Assignment of Rents and Leases 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. If a default occurs under this Note, or under the Mortgage or the Loan Agreement or the Construction Loan Agreement or the Assign- ment of Rents and Leases, or if this Note is not purchased by Midwest Federal Savings and Loan Association of Minneapolis by December 1, 1978, then the Holder may at its right and option declare immediately due and payable the principal balance of this Note and interest accrued thereon to the date of declara- tion of such default, 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 Construction Loan Agreement, the Assignment of Rents and Leases or the Loan Agreement, anything to the contrary therein notwithstanding, and payment thereof may be enforced and recovered in whole or in part, at any time by one or more of the remedies provided in the Mortgage, in this Note, in the Con- struction Loan Agreement, in the Assignment of Rents and Leases or in the Loan Agreement. The Holder may extend the time of payment of interest or principal of this Note, without notice to or consent of any party liable hereon, and without releasing any such party. -4- This Note and the interest thereon shall never con- stitute a debt of the City within the meaning of any constitu- tional provision or statutory limitation, and shall never con- stitute or give rise to a pecuniary liability of the City or a charge against its general credit or taxing powers. This Note and the interest hereon are payable solely from the reve- nues pledged to the payment thereof pursuant to the Loan Agree- ment and secured by the provisions of the Mortgage and the Assignment of Rents and Leases, and the Holder of this Note shall never have the right to enforce payment thereof against any property of the City, except the revenues under the Loan Agreement, and this Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, except the revenues under the Loan Agreement, and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be subject at all times to the availability of revenues from the Loan Agreement, the Construction Loan Agreement, the Assignment of Rents and Leases or from the Mortgage, sufficient to pay all costs of such performance or the enforcement thereof. The remedies of the Holder, as provided herein, and in the Mortgage, the Construction Loan Agreement, the Assign- ment of Rents and Leases and the Loan Agreement, shall be ,zumulative and concurrent and may be pursued singly, succes- sively or together, and, except as provided in the Mortgage, at the sole discretion of the Holder, and may be exercised as often as occasion therefor shall occur; and the failure to exercise any such right or remedy shall in no event be con- strued as a waiver or release thereof. The Holder shall not be deemed, by any act of omis- sion or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Holder and then only to the extent specifically set forth in the writing. A waiver with reference to one event shall not be construed as continuing or as a bar to or waiver of any right or remedy as to a subsequent event. IT IS HEREBY CERTIFIED AND RECITED that all conditions, acts and things required to exist, happen and be performed pre- cedent to or in the issuance of this Note do exist, have happened and have been performed in regular and due form as required by law. -5- IN WITNESS WHEREOF, the City has caused this Note to be duly executed by its duly authorized officers and its cor- porate seal affixed all as of this day of , 197P. CITY OF PLYMOUTH, MINNESOTA By Mayor (SEAL) By City Manager Attest: City Clerk 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 Plymouth in the name of the .regis-- tered Holder last noted below. Date of Name of Signature of Registration Registered Holder City Clerk -6- w • 5.02. Note Terms. The Note shall be designated the Commercial Development Revenue Note (Three H Investments Project) (F. C. Hayer Company, Lessee), and shall: (a) be dated as of the date of delivery thereof to, and payment therefor, by the Lender; (b) be in the total principal amount of $2,400,000; (c) bear interest on the unpaid principal balance from date of issue until paid or discharged as herein provided at the rate of seven and three-eighths percent (7-3/88), except that in the event the interest on the Note becomes subject to federal or state income or fran- chise taxes pursuant to a "Determination of Taxability" as defined in Section 4.06 of the Agreement, the interest rate of the Note shall be automatically increased to ten and one-quarter percent (10-1/48) per annum or, if said Vatermination of Taxability occurs prior to the Assign- ment Date, the interest rate on the Note shall thereafter remain equal to three percent (38) over the prime rate of interest charged by Northwestern National Bank of Minnea- polis from time to time on 90 -day unsecured loans to its commercial borrowers of the highest credit rating, which annual _ate shall change when and as such prime rate shall change, until the Assignment Date at which time the inter- c3t rate shall be ten and one-quarter percent (10-1/48) per annum; (d) be payable in installments on the first day of each month as follows: (1) prior to the first day of the month following the Assignment Date, an amount equal to interest accrued monthly on the principal balance of the Note; and (2) commencing with the first day of of the month following the Assignment Date, and continuing until the first day of the month twenty-five years from the first day of the month following the Assignment Date, the sum necessary to amortize the Note in accordance with a standard twenty-five year amortization table which sum is calculated to be Seventeen Thousand Five Hundred Forty One and 11/100 Dollars ($17,541.11). (e) be payable as to both principal and interest to the registered holder thereof at the address shown on the Note Register; and (f) be subject to prepayment, on any installment payment date subsequent to the Assignment Date, at a price equal to the principal amount Prepaid plus accrued interest to the date of prepayment plus a prepayment fee as set forth below: -12- W W Within the first five anniversary years, a fee equal to seven percent (7%) of the remaining principal balance of the Note; within the sixth anniversary year a fee equal to six percent (6B) of the remaining principal balance of the Note; within the seventh anniversary year a fee equal to five percent (56) of the remaining principal balance of the Note; within the eighth anniversary year a fee equal to four percent (4$) of the remaining principal balance of the Note; within the ninth anniversary year a fee equal to three percent (38) of the remaining principal balance of the Note; within the tenth anniversary year a fee equal to two percent (28) of the remaining principal balance of the Note; beginning with the eleventh anniversary year and continuing to the date of maturity, a fee equal to one percent (18) of the remaining principal balance of the Note. The term "anniversary year" as used herein shall mean a period of 12 consecutive calendar months, the first of which shall commence on the first day of the first calendar month nextsucceeding the Assignment Date. Subsequent anniversary years shall run consecutively, each commencing upon an anniversary of the commencement of the first anni- versary year. 5.03. Execution. The Note shall be executed on behalf of the City by the signatures of the Mayor, the City Maniger and the City Clerk, and shall be sealed with its corporate s -=.1. In case any officer whose signature shall appear on the Note shall cease to be such officer before the delivery thereof, such signa- ture shall nevertheless be valid and sufficient for all purposes. 5.04. Mutilated, Lost and Destroyed Note. In case the Note shall become mutilated or be destroyed or lost, the City shall cause to be executed and delivered a new note of like outstanding principal amount and tenor in exchange and substitution for and upon cancellation of the mutilated note, or in lieu of and in sub- stitution for such note destroyed or lost, upon the holder's paying the reasonable expenses and charges of the City in connection therewith, and, in case the note is destroyed or lost, its filing with the City evidence satisfactory to it. 5.05. 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 registr.tion of transfers of ownership of the Note. The Note shall be transferabi: upon the Note Register by the holder thereof in person or by its attorney duly authorized in writing, upon surrender of the Note together with a written instrument of transfer satisfactory to the City Clerk, duly execu- ted by the holder or its duly authorized attorney. Upon such -13- W W transfer the City Clerk shall note the date of registration and the name and address of the new holder on the Note Register and in the registration blank appearing on the Note. Alternatively, the City shall, at t!« equest and expense of the holder issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount and the amount of the monthly install- ments payable thereunder, and registered in the name of the holder or such transferee as may be designated by the holder. The City may deem and treat the person in whose name each note is last registered in the Note Register and by notation on the note as the absolute owner thereof, whether or not the principal balance or any part thereof is overdue, for the purpose of receiv- ing payment of or on account of the principal balance, redemption price or interest and for all other purposes. 5.06. Delivery and Use of Proceeds. Prior to delivery of the Note, the documents referred to below shall be completed and executed in form and substance as approved by the City Attorney. The City shall execute and deliver to the Lender the Note in the total principal amount of $2,400,000, together with the following: (a) a copy, duly certified by the Clerk, of this Resolution; ane (b) original, executed counterparts of the Con- struction Loan Agreement, the Agreement, the Loan Agree- ment Assignment and the Buy and Sell Agreement; and (c) Organizational Documents; and ,fid) such closing certificates as are required by bond counsel. Upon delivery of the Note and the anove items to the Lender, the Lender shall, on behalf of the City, disburse the proceeds of the Note to the Partnership in reimbursement of Pro- ject Costs pursuant to the provisions of the Construction Loan Agreement. The Lender or the Partnership shall provide the City with a full accounting of all funds disbursed for Project Cats. Section 6. Limitations of the City's Obliga:iors. Not- withstanding anything contained in the Note, the Construction Loan Agreement, the Agreement, the Loan Agreement Assignment-., the Buy and Sell Agreement or any other documents referred to in Section 3.03, the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation, and shall not be payable from or charged upon any funds other than the revenue pledged to the payment thereof, and the City shall not be subject -14- to any liability thereon, and no holder of such 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 pay- ment 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 except the revenues payable under the Agreement. The agreement of the Cicy to perform the covenants and other provisions contained in the Note, the Construction Loan Agreement, the Agreement, the Loan Agreement Assignment Or the Buy and Sell Agreement and the other documents listed in Section 3.03 shall be subject at all times to the availability of revenues furnished by the Partnership sufficient to pay all costs of such performance by the enforcement thereof, and the City shall not be subject to any personal or pecuniary liability thereon except the revenues payable under the Agreement. Section 7. Statement of Election. The Mayor and City Manager are authorized and directedto execute and submit a "State- nent of Election to Issue Industrial Development Revenue Bonds in an Aggregate Amount Exceeding $1,000,000 But, Not Exceeding $5,000,000" pursuant to the requirements of Section 1. 03 (b) (6) (D) of the In- ternal Revenue Code of 1954, as amended, and Treasury Regulation 1.103-10. Adopted: June 26 , 1978. Attest: City Clerk The motion for the adoption of the foregoing resolution Was duly seconded by Member NSF -i I R , and upon vote being taken thereon, the following voted in favor thereof: M*w Font, COUIx lmmMers Hoyt, Neils and Spaeth and the following voted against the same: Couneilmember Seibold whereupon said resolution was declared duly passed and adopted. -15-