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HomeMy WebLinkAbout2006 Final Note Resolution FINAL NOTE RESOLUTION CITY OF OAK PARK HEIGHTS, MINNESOTA $10,000,000 HEALTH CARE REVENUE NOTE OF 2006 (BOUTWELLS LANDING CARE CENTER PROJECT) ADOPTED: December 12, 2006 1850404v2 TABLE OF CONTENTS Page ARTICLE 1 DEFINITIONS, LEGAL AUTHORIZATION AND FINDINGS 1 1.1 Definitions 1 1.2 Legal Authorization 2 1.3 Findings 2 1.4 Authorization and Ratification of Project 3 ARTICLE 2 NOTE 3 2.1 Authorized Amount and Form of Note 3 2.2 The Note 4 2.3 Execution 4 2.4 Delivery of Note 4 2.5 Disposition of Note Proceeds 5 2.6 Registration of Transfer 5 2.7 Mutilated, Lost or Destroyed Note 5 2.8 Ownership of Note 6 2.9 Limitation on Note Transfers 6 2.10 Issuance of New Notes 6 ARTICLE 3 GENERAL COVENANTS 6 3.1 Payment of Principal and Interest 6 3.2 Performance of and Authority for Covenants 7 3.3 Enforcement and Performance of Covenants 7 3.4 Nature of Security 7 3.5 Designation of Qualified Tax Exempt Obligations 8 ARTICLE 4 MISCELLANEOUS 8 4.1 Severability 8 4.2 Authentication of Transcript 8 4.3 Authorization to Execute Agreements 8 1850404v2 i NOTE RESOLUTION BE IT RESOLVED by the City Council of the City of Oak Park Heights, Minnesota, as follows: ARTICLE 1 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: Minnesota Statutes, Section 469.152 through .1651, as amended; Bond Counsel: the firm of Briggs and Morgan, Professional Association, of Minneapolis, Minnesota, and any opinion of Bond Counsel shall be a written opinion signed by such Counsel; Borrower: VSSA Care Center, LLC, a Minnesota limited liability company, its successors, assigns, and any surviving, resulting or transferee business entity which may assume its obligations under the Loan Agreement; City: the City of Oak Park Heights, Minnesota, its successors and assigns; Disbursing Agreement: the Disbursing Agreement to be executed among the Borrower and the Purchaser; Land: the real property and any other easements and rights described in Exhibit A attached to the Loan Agreement; Loan Agreement: the agreement to be executed by the City and the Borrower, providing for the issuance of the Note and the loan of the proceeds thereof to the Borrower to finance the Project, including any amendments or supplements thereto made in accordance with its provisions; Note: the $10,000,000 Health Care Revenue Note of 2006 (Boutwells Landing Care Center Project), to be issued by the City pursuant to this Resolution and the Loan Agreement; Note Register: the records kept by the City Administrator to provide for the registration of transfer of ownership of the Note; 1850404v2 Pledge Agreement: the agreement to be executed by the City and the Purchaser pledging and assigning the Loan Agreement to the Purchaser; Principal Balance: so much of the principal sum on the Note as has been disbursed and remains unpaid at any time; Project: (a) the acquisition of the Land which is adjacent to the Company's existing facilities located at 5600 Norwich Avenue, Oak Park Heights; and (b) the construction and equipping of a 110 -bed, approximately 127,000 square foot, skilled nursing facility thereon; Project Costs: the total of all "Acquisition Costs" and "Loan and Carrying Charges," as those terms are defined in the Loan Agreement; Purchaser: Piper Jaffray Co., a Delaware corporation, Minneapolis, Minnesota, its successors and assigns; Refunding: the issuance of bonds to redeem and refund the Note and finance the Project; Resolution: this Resolution of the City adopted December 12, 2006, together with any supplement or amendment thereto; All references in this instrument to designated "Articles," "Sections" and other subdivisions are to the designated Articles, Sections and subdivisions of this 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 political subdivision of the State of Minnesota and is authorized under the Act to initiate the multifamily housing development herein referred to, and to issue and sell the Note for the purpose, in the manner and upon the terms and conditions set forth in the Act and in this Resolution. 1.3 Findings. The City Council has heretofore determined, and does hereby determine, as follows: (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 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 1850404v2 2 Agreement, the Pledge Agreement and the Note, which documents specify the terms and conditions of the refinancing of the Project; (3) the proceeds of the Note will be used to finance the Project Costs, including the costs and estimated costs permitted by the Act; (4) it is desirable, feasible and consistent with the objects and purposes of the Act to issue the Note, for the purpose of financing the Project; (5) 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 (6) the Note is a "qualified 501(c)(3) bond" within the meaning of Section 145(a) of the Internal Revenue Code of 1986 (the "Code and is to be issued within the exemption provided under Section 103(a) of the Code; 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; and (7) the City hereby designates the Note as a "qualified tax- exempt obligation" under Section 265(b)(3) of the Code. 1.4 Authorization and Ratification of Project. The City has heretofore and does hereby authorize the Borrower, in accordance with the provisions of the Act and subject to the terms and conditions set forth in the Loan Agreement, to provide for financing the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower, and without advertisement for bids as may be required for the construction 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. ARTICLE 2 NOTE 2.1 Authorized Amount and Form of Note. The Note issued pursuant to this Resolution shall be in substantially the form set forth on Exhibit A hereto, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, olution and in accordance with the further provisions hereof; and the total 1850404v2 3 principal amount of the Note that may be outstanding hereunder is expressly limited to $10,000,000 unless a duplicate Note is issued pursuant to Section 2.7. 2.2 The Note. The Note shall be dated as of the date of delivery, shall be payable at the times and in the manner, shall bear interest at a rate not to exceed 8% per annum, and shall be subject to such other terms and conditions as are set forth in the Note on the date of delivery of the Note. Execution of the Note by the Mayor and Administrator shall constitute fixing of the interest rate and final maturity date for purposes of the Act. 2.3 Execution. The Note shall be executed on behalf of the City by the signatures of its Mayor and Administrator 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 it had remained in office until delivery. In the event of the absence or disability of the Mayor or the Administrator such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the City Council execute and deliver the Note. 2.4 Delivery of Note. Before delivery of the Note there shall be filed with the Purchaser (except to the extent waived by the Purchaser) the following items: (1) an executed copy of each of the following documents: (a) the Loan Agreement; (b) the Pledge Agreement; (c) the Disbursing Agreement; (d) a Cost Certificate signed by the Borrower certifying the use of the proceeds of the Note. (2) an opinion of Counsel for the Borrower as prescribed by Bond Counsel and Purchaser; (3) the opinion of Bond Counsel as to the validity and tax exempt status of the Note; 1850404v2 4 (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 Purchaser may reasonably require for the closing. 2.5 Disposition of Note Proceeds. Upon delivery of the Note, the Purchaser shall, on behalf of the City, advance at least $50,000 into the Construction Fund held by the Purchaser on behalf of the City as provided in the Disbursing Agreement. Until the Refunding, no amounts in the Construction Fund (except for interest earnings thereon) may be disbursed. If the Refunding has not occurred by December 1, 2007, amounts in the Construction Fund shall be applied to prepay the Note on such date. Earnings on amounts in the Construction Fund may be disbursed to pay interest on the Note. The Purchaser or the Borrower shall provide the City with a full accounting of all funds disbursed for Project Costs. 2.6 Registration of Transfer. The City will cause to be kept at the office of the Administrator a Note Register in which, subject to such reasonable regulations as it may prescribe, the City shall provide for the registration of transfers of ownership of the Note. The Note shall be initially registered in the name of the Purchaser and shall be transferable upon the Note Register by the Purchaser 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 Administrator, duly executed by the Purchaser or its duly authorized agent. The following form of assignment shall be sufficient for said purpose. For value received hereby sells, assigns and transfers unto the within Note of the City of Oak Park Heights, Minnesota, and does hereby irrevocably constitute and appoint attorney to transfer said Note on the books of said City with full power of substitution in the premises. The undersigned certifies that the transfer be made in accordance with the provisions of Section 2.9 of the Resolution relating to the above Note. Dated: Registered Owner Upon such transfer the Administrator shall note the date of registration and the name and address of the new Purchaser in the Note Register and in the registration blank appearing on the Note. 2.7 Mutilated, Lost or Destroyed Note. In case any Note issued hereunder shall become mutilated or be destroyed or lost, the City shall, if not then prohibited by law, cause to be executed and delivered, a new Note of like 1850404v2 5 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 Purchaser's paying the reasonable expenses and charges of the City in connection therewith, and in the case of a Note destroyed or lost, the filing with the City of evidence satisfactory to the City with indemnity satisfactory to it. If the mutilated, destroyed or lost Note has already matured or been called for redemption in accordance with its terms it shall not be necessary to issue a new Note prior to payment. 2.8 Ownership of Note. The City may deem and treat the person in whose name the Note is last registered in the Note Register and by notation on the Note whether or not such Note shall be overdue, as the absolute owner of such Note for the purpose of receiving payment of or on account of the Principal Balance, redemption price or interest and for all other purposes whatsoever, and the City shall not be affected by any notice to the contrary. 2.9 Limitation on Note Transfers. The Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly the Note may not be assigned or transferred in whole or part, nor may a participation interest in the Note be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. 2.10 Issuance of New Notes. Subject to the provisions of Section 2.9, the City shall, at the request and expense of the Purchaser, issue new notes, in aggregate outstanding principal amount equal to that of the Note surrendered, and of like tenor except as to number, principal amount, and the amount of the monthly installments payable thereunder, and registered in the name of the Purchaser or such transferee as may be designated by the Purchaser. ARTICLE 3 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, solely from the source and in the manner provided herein and in the Note. The principal and interest are payable solely from and secured by revenues and proceeds derived from the Loan Agreement, the Pledge Agreement and the Disbursing Agreement, and which revenues and proceeds are hereby specifically pledged to the payment thereof in the manner and to the extent specified in the Note, the Loan Agreement, the Pledge Agreement and the Disbursing Agreement; and nothing in the Note or in this Resolution 1850404v2 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, the Pledge Agreement and the Disbursing 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 Purchaser is and will be a valid and enforceable special limited 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 Disbursing Agreement, upon request of the Purchaser and being indemnified to the satisfaction of the City for all expenses and claims arising therefrom, and to perform all covenants and other provisions pertaining to the City contained in the Note and the Loan Agreement and subject to Section 3.4. 3.4 Nature of Security. Notwithstanding anything contained in the Note, the Loan Agreement, the Pledge Agreement or any other document referred to in Section 2.4 to the contrary, under the provisions of the Act the Note may not be payable from 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 other than the revenues pledged under the Pledge Agreement; and the Note shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City; and the Note shall not constitute a debt of the City within the meaning of any constitutional or statutory limitation; but nothing in the Act impairs the rights of the Purchaser to enforce the covenants made for the security thereof as provided in this Resolution, the Loan Agreement, the Pledge Agreement and the Disbursing Agreement, and in the Act, and by authority of the Act the City has made the covenants and agreements herein for the benefit of the Purchaser; 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, the Pledge Agreement and the Disbursing 1850404v2 7 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. 3.5 Designation of Qualified Tax Exempt Obligations. The Note is designated by the City as a "qualified tax exempt obligation" for purposes of Section 265(b)(3) of the Code. ARTICLE 4 MISCELLANEOUS 4.1 Severability. If any provision of this Resolution shall be held or deemed to be or shall, in fact, be inoperative or unenforceable as applied in any particular case in any jurisdiction or jurisdictions or in all jurisdictions or in all cases because it conflicts with any provisions of any constitution or statute or rule or public policy, or for any other reason, such circumstances shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or circumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The invalidity of any one or more phrases, sentences, clauses or paragraphs in this Resolution contained shall not affect the remaining portions of this Resolution or any part thereof. 4.2 Authentication of Transcript. The officers of the City are directed to furnish to Bond Counsel certified copies of this Resolution and all documents referred to herein, and affidavits or certificates as to all other matters which are reasonably necessary to evidence the validity of the Note. All such certified copies, certificates and affidavits, including any heretofore furnished, shall constitute recitals of the City as to the correctness of all statements contained therein. 4.3 Authorization to Execute Agreements. The forms of the proposed Loan Agreement and Pledge Agreement are hereby approved in substantially the form heretofore presented to the City Council, together with such additional details therein as may be necessary and appropriate and such modifications thereof, deletions therefrom and additions thereto as may be necessary and appropriate and approved by Bond Counsel prior to the execution of the documents, and the Mayor and of the Administrator of the City are authorized to execute the Loan Agreement and the Pledge Agreement in the name of and on behalf of the City and such other documents as Bond Counsel consider appropriate in connection with the issuance of the Note. In the event of the absence or disability of the Mayor or the Administrator such officers of the City as, in the opinion of the City Attorney, may act in their behalf, shall without further act or authorization of the City Council do all things and execute all instruments and documents required to be done or executed by such absent or disabled officers. The execution of any instrument by the appropriate officer or officers of the I850404v2 8 City herein authorized shall be conclusive evidence of the approval of such documents in accordance with the terms hereof. Adopted: December 12, 2006 Mayor of the City of Oak Park Heights Attest: Administrator 1850404v2 9 EXHIBIT A UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF WASHINGTON CITY OF OAK PARK HEIGHTS HEALTH CARE REVENUE NOTE OF 2006 (BOUTWELLS LANDING CARE CENTER PROJECT) No. R -1 $10,000,000 FOR VALUE RECEIVED the CITY OF OAK PARK HEIGHTS, Washington County, Minnesota (the "City hereby promises to pay PIPER JAFFRAY CO., in Minneapolis, Minnesota, its successors or registered assigns (the "Purchaser from the source and in the manner hereinafter provided, the principal sum of TEN MILLION AND N0 /100 DOLLARS ($10,000,000), or so much thereof as has been advanced and remains unpaid from time to time (the "Principal Balance with interest thereon at the rate of percent per annum or at such higher rate as hereinafter provided in paragraph 1(b,) hereof, 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, in accordance with the terms hereinafter set forth. (1) (a) Interest shall accrue on the Principal Balance from and after the date hereof. Interest shall be due and payable on the earlier of (i) date of the Refunding (as defined in the Resolution authorizing this Note), (ii) December 1, 2008, (iii) the date the Purchaser transfers this Note to another person through assignment or purchase, (iv) the date of payment in full of this Note, and (v) on December 1, 2036 (the "Final Maturity Date at which time the entire remaining Principal Balance and accrued interest shall be fully due and payable. (b) If the interest on this Note should become subject to federal income taxation pursuant to a "Determination of Taxability" as that term is defined in Section 4.07 of the Loan Agreement (the "Loan Agreement of even date herewith between the City and VSSA Care Center, LLC, a Minnesota limited liability company (the "Borrower and the Purchaser delivers to the Borrower a copy of the notice of the "Determination of Taxability the interest rate shall be immediately adjusted to be equal to ten percent (10 and each monthly installment thereafter payable shall be accordingly adjusted. In addition the Purchaser shall be entitled to receive upon demand an amount equal to the aggregate difference between (i) the monthly payments theretofore made to the Purchaser on this Note between the "Date of Taxability as that term is defined in Section 4.07 of the Loan Agreement, and the date of receipt by the Borrower of 1850404v2 A -1 notice of such "Determination of Taxability and (ii) the monthly payments which would have been made during such period if the adjusted rate had been in effect throughout such period. (2) In any event, the payments hereunder shall be sufficient to pay all principal and interest due, as such principal and interest becomes due, and to pay any premium, at maturity, upon redemption, or otherwise. Interest shall be computed on the basis of a 360 day year but shall be payable on the actual days elapsed. (3) Principal and interest and premium due hereunder shall be payable at the principal office of the Purchaser, or at such other place as the Purchaser may designate in writing. (4) This Note is issued by the City to provide funds for a project, as defined in Section 469.153, Minnesota Statutes, consisting of the acquisition of land and the construction thereon of a 110 -bed, approximately 127,000 square foot, skilled nursing facility by the Borrower, and this Note is further issued pursuant to and in full compliance with the Constitution and laws of the State of Minnesota, particularly Section 469.152 through .1651, Minnesota Statutes, and pursuant to a resolution of the City Council duly adopted on December 12, 2006 (the "Resolution (5) This Note is secured by a Pledge Agreement of even date herewith by the City to the Purchaser (the "Pledge Agreement Amounts held by the Purchaser relating to the Note shall be disbursed pursuant to the Disbursing Agreement of even date herewith among the Borrower and the Purchaser (the "Disbursing Agreement The Purchaser shall authorize disbursements from the Construction Fund to or at the order of the Borrower upon compliance with the terms and conditions of the Disbursing Agreement. The Lender shall authorize disbursements from the Construction Fund to or at the order of the Borrower upon compliance with the terms and conditions of the Disbursing Agreement. (6) The City, for itself, its successors and assigns, hereby waives demand, presentment, protest and notice of dishonor; and to the extent permitted by law, the Purchaser may extend interest and /or principal of or any service charge or premium due on this Note, or release any part or parts of the property and interest subject to any security document from the same, all without notice to or consent of any party liable hereon or thereon and without releasing any such party from such liability and whether or not as a result thereof the interest on the Note is no longer exempt from the Federal income tax. In no event, however, may the Final Maturity Date be extended beyond December 1, 2036. (7) This Note may be prepaid in whole on any date on or after January 1, 2007 at the option of the Company, at a redemption price equal to the Principal Balance of the Note plus accrued interest thereon. The Note is subject to extraordinary mandatory redemption in whole but not in part on December 1, 2008, unless extended as provided below, if the Refunding of the Note has not occurred on or before such date, without 1850404v2 A -2 notice, at a redemption price equal to the Principal Balance to be redeemed plus accrued interest thereon, without premium. The extraordinary mandatory redemption date shall be extended one or more times to a date not later than December 1, 2009 with the consent of the Purchaser and upon delivery to the Purchaser of an opinion of Bond Counsel to the effect that such extension will not adversely affect the tax exempt status of interest paid on the Note. (8) In the event of prepayment of this Note, the Purchaser shall apply any such prepayment first against accrued interest on the Principal Balance and then against the principal amounts due under the Note. The monthly payments due under paragraph 1 hereof, shall continue to be due and payable in full until the entire Principal Balance and accrued interest due on this Note have been paid regardless of any partial prepayment made hereunder unless otherwise agreed to by the Purchaser. (9) As provided in the Resolution and subject to certain limitations set forth therein, this Note is only transferable upon the books of the City at the office of the Administrator by the Purchaser in person or by its agent duly authorized in writing, at the Purchaser's expense, upon surrender hereof together with a written instrument of transfer satisfactory to the Administrator, duly executed by the Purchaser or its duly authorized agent. Upon such transfer the Administrator will note the date of registration and the name and address of the new registered Holder in the registration blank appearing below. The City may deem and treat the person in whose name the Note is last registered upon the books of the City with such registration noted on the Note, as the absolute owner hereof, whether or not overdue, for the purpose of receiving payment of or on the account, of the Principal Balance, redemption price or interest and for all other purposes, and all such payments so made to the Purchaser or upon its order shall be valid and effective to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid, and the City shall not be affected by any notice to the contrary. (10) All of the agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Loan Agreement, the Pledge Agreement and the Disbursing Agreement 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. (11) This Note and interest thereon and any service charge or premium due hereunder are payable solely from the revenues and proceeds derived from the Loan Agreement, the Pledge Agreement and the Disbursing Agreement and do not constitute a debt of the City within the meaning of any constitutional or statutory limitation, are not payable from or a charge upon any funds other than the revenues and proceeds pledged to the payment thereof, and do not give rise to a pecuniary liability of the City or, to the extent permitted by law, of any of its officers, agents or employees, and no holder of this Note shall ever have the right to compel any exercise of the taxing power of the City to pay this Note or the interest thereon, or to enforce payment thereof against any property of the City, and this Note does not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the City, and the agreement of the City to perform or cause the performance of the covenants and other provisions herein referred to shall be 1850404v2 A -3 subject at all times to the availability of revenues or other funds furnished for such purpose in accordance with the Loan Agreement, sufficient to pay all costs of such performance or the enforcement thereof. (12) It is agreed that time is of the essence of this Note. If an Event of Default (as that term is defined in the Disbursing Agreement or the Loan Agreement) shall occur, then the Purchaser shall have the right and option to declare the Principal Balance and accrued interest thereon, immediately due and payable, whereupon the same, plus any Reinvestment Charge, default prepayment, premium or service charges, shall be due and payable, but solely from sums made available under the Loan Agreement, the Pledge Agreement and Disbursing Agreement. Failure to exercise such option at any time shall not constitute a waiver of the right to exercise the same at any subsequent time. (13) The remedies of the Purchaser, as provided herein and in the Loan Agreement, the Pledge Agreement and the Disbursing Agreement are not exclusive and shall be cumulative and concurrent and may be pursued singly, successively or together, at the sole discretion of the Purchaser, 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 construed as a waiver or release thereof. (14) The Purchaser shall not be deemed, by any act of omission or commission, to have waived any of its rights or remedies hereunder unless such waiver is in writing and signed by the Purchaser 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. (15) This Note has been issued without registration under state or federal 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. (16) This Note has been designated by the City as a "qualified tax exempt obligation" for purposes of Section 165(b)(3) of the Internal Revenue Code of 1986, as amended. 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 as required by law. 1850404v2 A -4 IN WITNESS WHEREOF, the City has caused this Note to be duly executed in its name by the manual signatures of the Mayor and Administrator and has caused the corporate seal to be affixed hereto, and has caused this Note to be dated December /2- 2006. CITY OF OAK PARK HEIGHTS, MINNESOTA OPP 4 ayor Attes i A---410' As istrator (SEAL) 1850404 A-5 r 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 Oak Park Heights in the name of the holder last noted below. Date of Name and address Signature of Registration Registered owner Administrator Piper Jaffray Co. 800 Nicollet Mall, l3 Floor December 2006 Minneapolis, MN 55402 1850404v2 A_6