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$713,000 Bonds 2004 Health Care Facilites People Incorporated Project - Destroy 082430BOND TRANSCRIPT City of New Hope, Minnesota Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) August 24, 2004 CITY OF NEW HOPE, MINNESOTA HEALTH CARE FACILITIES REVENUE NOTE, SERIES 2004 (PEOPLE INCORPORATED PROJECT) Closing Date: August 24, 2004 Parties: Issuer: City of New Hope, Minnesota Issuer's Counsel: Dorsey & Whitney LLP Borrower: People Incorporated Borrower's Counsel: Mary K. Martin Lender: St. Anthony Park State Bank Lender's Counsel: McGuigan & Holly, P.L.C. Transaction Manager: Midwest Healthcare Capital Bond Counsel: Fryberger, Buchanan, Smith & Frederick, P.A. Basic Documents: 1. Loan Agreement 2. Specimen Note 3. Pledge Agreement 4. Mortgage, Security Agreement and Fixture Financing Statement 5. Joint Powers Agreement 6. UCC -1 Financing Statement - Pledge Agreement 7. UCC -1 Financing Statement - Security Agreement Issuer Documents: 8. Certificate of Officials a. Resolution Calling for Public Hearing b. Affidavit of Publication C. Resolution Giving Preliminary Approval d. Evidence of Approval by the Department of Employment and Economic Development e. Authorizing Resolution 9. IRS Form 8038 10. Notice of Issue 11. Note Register Borrower Documents: 12. Officers' Certificate and Receipt a. Officers and Directors b. Incumbency Certificate C. Articles of Incorporation d. Bylaws e. Internal Revenue Service Determination Letter f Corporate Resolution g. Reimbursement Resolution 13. Arbitrage and Tax Certificate a. Endorsement to Arbitrage and Tax Certificate by Issuer b. Useful Life Calculation C. Project Description d. Endorsement to Arbitrage and Tax Certificate by Lender 14. Certificate of Good Standing 15. Title Insurance Lender Documents: 16. Certificate and Receipt of Lender Legal Opinions: 17. Opinion of Bond Counsel 18. Opinion of Counsel to the Borrower Miscellaneous: 19. Distribution List M. W,w 1557610000001 TOCIGJ455l. IVPD 2 Execution Copy --------------------------------- LOAN AGREEMENT BETWEEN CITY OF NEW HOPE, MINNESOTA and PEOPLE INCORPORATED Dated as of August 24, 2004 The interest of the City of New Hope, Minnesota, in this Loan Agreement (except for the Issuer's rights under Sections 2.0113, 2.03H, 3.03, 3.07D, 3.11, 4.03, 6.04, 6.06, 6.08 and 7.06 hereof) has been assigned to St. Anthony Park State Bank. This instrument was drafted by: Fryberger, Buchanan, Smith & Frederick, P.A. 302 West Superior Street, Suite 700 Duluth, Minnesota 55802 LAW OFFICES FRYBERGER, BUCHANAN, SMITH SL FREDERICK, P.A.ST PAUL OFFICE HAROL D A. FRE D E RICK DEXTE RLARSEN' JAMES H. STEW ART' ROBERT E. TOFTEY' MICHAEL K. DON OVAN N E AL J. HE S S E N' JOSEPH J. MIHA LEK' SHAWN M. DUNLEVY' DAVID R. OeERSTAR" MICHAELOOWLES' MARTHA M. MARKUSEN' STEPHANIE A. BALL' PAUL 8. KILGORE' MARY FRANCES SKALA' DANIEL D. MADOYI PAULA. LORAAS' DONALD O. ERIC NEON. BRIAN P. LUNDGREN KIMBERLY J. MAKI September 21, 2004 SUITE 700 302 WEST SUPERIOR STREET DULUTH, MINNESOTA 55802-1863 TELEPHONE (218) 722-0861 FAX12181725=6800 ww W.fryberger.com R. BRUCE BUCHANAN, COUNSEL NICK SMITH, COUNSEL H.B. FRYBERGER, JR (J906-1997) LOREN W. SANFORD (1931-1978) AMASA E. WHEELER (1889-1970) H.B. FRYBERGER, SR. (1865-1937I '.A SO LI..... IN hW>.tNn LLSU I.I[ I., sIA� I� Allt'I IIGAK TO THE ATTACHED DISTRIBUTION LIST The First Nailonal Bank.10Mn9 332 Mll,nes.I. St, Suite Nles11260 ST. PAUL.M NNESOTA 55101 (651)221.1044 FAX16511221=1035 KEVINT -WALLI MICHAEL J. MAHONEY SUPERIOR OFFICE 1619 TOWER AVENUE SUITE 102 SUPERIOR. WISCONSIN 54080 (11513927405 FAX 17151392=7407 IRON MOUNTAIN OFFICE 500 STEPHENSON AVENUE IRON MOUNTAIN, MICHIGAN 49801 (906)1764000 FAX12181725-0800 Writer's Direct Dial Number: (218)725-6807 E -Mail Address: mfskala@fryberger.com RE: City of New Hope, Minnesota cries 2004 (People Incorporated Project) Health Care Facilities Revenue Note, S In regard to the above-described issue, enclosed is your copy of the bond transcript. It was a pleasure working with each of you on this issue. If you have any questions, please contact me. Very truly yours, IrlArl, 5�lxk- Mary Frances Skala 0 Enclosure 61:},l,W 1155r610000001COXG5099614 PD DISTRIBUTION LIST CITY OF NEW HOPE, MINNESOTA HEALTH CARE FACILITIES REVENUE NOTE, SERIES 2004 (PEOPLE INCORPORATED PROJECT) Part • Contact/Address Telephone Number Fax Number E-mail Address Issuer Valerie Leone City Clerk (763) 531-5117 (763) 531-5136 vleone(ii ci.uew-hone nm ns City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Issuer's Counsel Jerry Gilligan Dorsey & Whitney LLP (612) 340-2962 (612)340-2643 gilliean.ierome,�)dorsev coni 50 South Sixth Street, Suite 1500 Minneapolis, MN 55402 Borrower's Counsel Mary K. Martin Attorney at Law (651) 451-0550 cell: (651) 451-8470 mninlxw(a aol con 2411 Francis Street (612) 245-7309 St. Paul, MN 55075 Transaction Manager Steve Fenlon Midwest Healthcare Capital (651) 455-8300 (651) 455-8484 nthcarI),clo, c ,1 cool 665 Woodridge Drive; Suite 100 Mendota Heights, MN 55118 Lender's Counsel Patrick J. McGuigan McGuigan & Holly, P.L.C. (651) 646-6325 (651) 646-8584 Pat(u(McGoivanIJojly con 176 Snelling Avenue North St. Pau] MN 55104-6322 M:IW V5576`0000001CORiGS09961VPD TABLE OF CONTENTS Page ARTICLE 1 - DEFINITIONS AND RULES OF INTERPRETATION ....................... 1 Section 1.01. Definitions....................................................... 1 Section 1.02. Rules of Interpretation .............................................. 5 Section 1.03. Exhibits......................................................... 5 ARTICLE 2 - REPRESENTATIONS................................................ 6 Section 2.01. Representations by the Issuer . ........................................ 6 Section 2.02. Representations by the Borrower ...................................... 6 Section 2.03. Tax Covenants .................................................... 9 Section 2.04. The Lender May Rely on Representations .............................. 12 ARTICLE 3 - THE LOAN ........................................................ 12 Section 3.01. Amount and Source of the Loan ..................................... 12 Section 3.02. Repayment of the Loan ............................................ 12 Section 3.03. Determination of Taxability ......................................... 12 Section 3.04. Notice of Proposed Taxability and Procedure Thereon .................... 13 Section 3.05. The Borrower's Obligations Unconditional ............................. 13 Section 3.06. Delivery of the Note ............................................... 14 Section 3.07. Closing......................................................... 14 Section 3.08. Disbursement of Note ............................................. 15 Section 3.09. Disbursement Procedure ........................................... 15 Section 3.10. Late Charge ..................................................... 16 Section 3.11. Administrative Fee ................................................ 16 ARTICLE 4 - THE BORROWER'S COVENANTS .................................... 16 Section 4.01. Assignment..................................................... 16 Section 4.02. General Covenants of the Borrower ................................... 16 Section 4.03. Indemnity....................................................... 18 Section 4.04. Reports to Governmental Agencies ................................... 19 Section 4.05. Execution of Additional Security Documents ........................... 19 Section 4.06. Reports and Notices to Lender ....................................... 19 Section 4.07. Financial Covenants ............................................... 20 ARTICLE 5 - THE BORROWER'S OPTIONS ........................................ 20 Section 5.01. Prepayment of the Loan Repayments and the Note ....................... 20 Section 5.02. Termination Upon Retirement of the Note ............................. 21 ARTICLE 6 - EVENTS OF DEFAULT AND REMEDIES ............................... 21 Section 6.01. Events of Default ................................................. 21 Section 6.02. Remedies....................................................... 22 Section 6.03. Manner of Exercise ............................................... 23 Section 6.04. Attorneys' Fees and Expenses ....................................... 23 Section 6.05. Effect of Waiver; No Effect on Liability ............................... 23 Section 6.06. Exercise of Remedies .............................................. 24 Section 6.07. Application of Money ............................................. 24 Page Section 6.08. Issuer's Enforcement Rights ..................................... 25 Section 6.09. Right of Offset ................................................... 25 ARTICLE 7 - GENERAL........................................................ 25 Section 7.01. Notices.........................................................25 Section 7.02. Binding Effect ................................................... 26 Section 7.03. Severability..................................................... 26 Section 7.04. Entire Agreement; Amendments, Changes and Modifications .............. 26 Section 7.05. Execution Counterparts ............................................ 27 Section 7.06. Limitation on the Issuer's Liability; Payment of All Expenses .............. 27 Section 7.07. Waiver of Payment and Performance Bonds ............................ 27 Section 7.08. Governing Law and Construction .................................... 27 Section 7.09. Consent to Jurisdiction ............................................. 28 Section 7.10. Waiver of Jury Trial ............................................... 28 11 This LOAN AGREEMENT (the "Loan Agreement") dated as of August 24, 2004, is entered into between the CITY OF NEW HOPE, MINNESOTA, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota (called herein the "Issuer"), and PEOPLE INCORPORATED, anonprofit corporation organized and existing under the laws ofthe State ofMinnesota (called herein the "Borrower"). WITNESSETH: that the Issuer and the Borrower, each in consideration of the representations, covenants and agreements of the other as set forth herein, mutually represent, covenant and agree as follows: ARTICLE 1 DEFINITIONS AND RULES OF INTERPRETATION Section 1.01. Definitions. In this Loan Agreement and the other Loan Documents, the following terms have the following respective meanings unless the context hereof clearly requires otherwise: Act: Minnesota Statutes, Sections 469.152 through 469.165, as heretofore and hereafter amended. ADA: the Americans with Disabilities Act of 1990, as heretofore and hereafter amended. Bond Counsel: the firm of Fryberger, Buchanan, Smith & Frederick, P.A., of Duluth, Minnesota, or any other firm of nationally recognized bond counsel experienced in tax-exempt financing, selected by the Issuer and acceptable to the Borrower and the Lender. Borrower: People Incorporated, a Minnesota nonprofit corporation, its successors and assigns. Business Dav means any day other than a Saturday, Sunday or other day on which the Lender is not open for business. Closing: the initial advance of moneys by the Lender to purchase the Note in an amount equal to the lesser of $50,000 or 5.00% of the stated principal amount of the Note. Closing Date: the date of this Loan Agreement. Code: the Internal Revenue Code of 1986, as amended. Date of Taxability: that point in time, as specified in a Determination of Taxability, that the interest payable on the Note becomes includable in the gross income of the Lender for federal income tax purposes. Default: the occurrence of any event under the Note or any of the Loan Documents, which with the giving of notice or passage of time (or both) would constitute an Event of Default hereunder. Determination of Taxability: the issuance of a statutory notice of deficiency by the IRS (or document of similar import), or a ruling of the National Office or any District Office of the IRS, or a final decision of a court of competent jurisdiction which holds in effect that the interest payable on the Note is includable in the gross income of the Lender for federal income tax purposes if the period, if any, for contest or appeal of such action, ruling or decision by the Borrower or Lender has expired without any such contest or appeal having been properly instituted by the Lender or the Borrower, and the effectiveness of such action, ruling or decision not having been stayed. Electronic Notice: notice transmitted through a facsimile machine or the Internet, if operative as between any two parties, for which a transmission confirmation has been received by the sender and which is confirmed in writing within 24 hours. ERISA: the federal Employee Retirement Income Security Act of 1974. Event of Default: the occurrence of any of the events specified in Section 6.01 hereof, as to which any requirement for notice or lapse of time (or both) has been satisfied. Facility or Facilities: the Project and the Mortgaged Property. FDIC: the Federal Deposit Insurance Corporation or any successor to its functions. Financial Statements: all balance sheets, income statements and statements of cash flow for the Borrower and any guarantors, delivered by the Borrower and any guarantors of the Secured Indebtedness or of the Obligations, to the Issuer or the Lender prior to the Closing Date or pursuant to the requirements hereof or of any of the Loan Documents. FIRREA: the Financial histitutions Reform, Recovery and Enforcement Act of 1989. Fiscal Year: Borrower's fiscal year, currently ending on each December 31. GAAP: generally accepted accounting principles as issued by the Financial Accounting Standards Board (FASB) from time to time, consistently applied. Host Municipalities: the Issuer and the Cities of Oakdale, Richfield and Brooklyn Park, all municipal corporations and political subdivisions of the State, and the Housing and Redevelopment Authority of the City of St. Paul, Minnesota, a public body corporate and politic, organized and existing under the laws of the State of Minnesota, their successors and assigns. The Host Municipalities may individually be referred to in this Loan Agreement as a "Host Municipality." Indemnified Matters: has the meaning given in Section 7.06 of this Loan Agreement. hidemnified Parties: has the meaning given in Section 7.06 of this Loan Agreement. IRS: the United States Internal Revenue Service. Issuance Costs: all fees and administrative costs incurred by the Host Municipalities in conjunction with the Joint Powers Agreement and the issuance of the Note and all transaction management fees, attorneys' fees and disbursements (including Bond Counsel and counsel for the Host Municipalities, the Borrower and the Lender), mortgage registration taxes and recording fees incurred by the Borrower or the Lender in connection with the acquisition and installation of the Project and any other costs which are treated as "issuance costs" within the meaning of Section 147(g) of the Code. Issuer: the City of New Hope, a municipal corporation and political subdivision of the State, its successors and assigns. 2 Joint Powers Agreement: the Joint Powers Agreement dated as of the Closing Date, among the Host Municipalities, including any amendment thereof or supplement thereto. Lender: St. Anthony Park State Bank, a Minnesota banking corporation, with an office located at the address set forth in Section 7.01 of this Loan Agreement, its successors and assigns. Loan: the loan by the Issuer to the Borrower of the Proceeds pursuant to this Loan Agreement. Loan Agreement: this Loan Agreement, dated as of the Closing Date, between the Issuer and the Borrower, including any amendment hereof or supplement hereto. Loan Documents: this Loan Agreement, the Pledge Agreement and the Mortgage and any documents referred to in the aforementioned documents. Loan Repayments: the payments required of the Borrower pursuant to Sections 3.02 and 3.03 of this Loan Agreement. Loan to Value Ratio: the ratio calculated by dividing the stated principal amount of the Note by the value of the Mortgaged Property as evidenced, by an appraisal issued in compliance with FIRREA covering the Real Property in form and substance satisfactory to the Lender. Make Whole Payments: any payments required to be made to or on behalf of the Issuer under the Unassigned Issuer's Rights. Mortgage: the Mortgage, Security Agreement and Fixture Financing Statement, dated as of the Closing Date, from the Borrower to the Lender, including any amendment thereof or supplement thereto. Mortgaged Property: the Real Property and Personal Property subject to the lien of the Mortgage, including the Real Property legally described on Exhibit A attached thereto. Note: the Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project), dated as of the Closing Date, to be issued by the Issuer pursuant to the Resolution to evidence the loan of $713,000 made by the Lender to the Issuer. Obligations: all present and future debts and other obligations of the Borrower to the Lender, whether arising by contract, tort, guaranty, overdraft or otherwise; whether or not the advances or events creating such debts or other obligations are presently foreseen; whether such obligations were originally payable to the Lender or are acquired by the Lender from another Person; and regardless of the class of the debts or other obligations, be they otherwise secured or unsecured. Without limiting the foregoing, the "Obligations" specifically include the obligation of the Borrower under this Loan Agreement and the other Loan Documents to perform the covenants and agreements contained therein and in any modification, extension or amendment thereof. Person oren rson: any individual, corporation, partnership, joint venture, association, joint stock company, limited liability company, trust, unincorporated organization, government or any agency or political subdivision thereof or any other form of entity. Personal Property: all trade fixtures and articles of personal property now or hereafter attached to or used or adopted for use in the operation of the Mortgaged Property or the Project (as more particularly defined in the Mortgage). Pledge Agreement: the Pledge Agreement, dated as of the Closing Date, among the Issuer, the Borrower and the Lender, including any amendment thereof or supplement thereto. Prior Debt: outstanding commercial indebtedness of the Borrower incurred with respect to the Project to be paid in full from the Proceeds. Proceeds: the $713,000 proceeds of the Note. Project: the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing: Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 4 7483 46th St. N. level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car 7708 45th % Av. N. attached, rambler New Hope, MN Upton House 3 BR upper level, egress window & 1 7720 Upton Av. S. addl BR added LL, rambler, 2.25 Richfield, MN bath, 2 car detached Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 4 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN Project Costs: all direct costs authorized by the Act and the Code paid for the Project, including but not limited to all costs of refinancing outstanding debt, acquisition of Real Property, facilities and equipment and labor, material and services paid or incurred by the Borrower and Issuance Costs, but not including the Borrower's overhead. Real Property: that certain real property described on Exhibit A to the Mortgage and all present and future fixtures, leases, rents and other appurtenant rights. Regulations: the U.S. Treasury Regulations promulgated under the Code, as amended from time to time. Resolution: the resolution adopted July 26, 2004, by the governing body of the Issuer authorizing the issuance of the Note and establishing the terms and conditions thereof. Secured Indebtedness: the indebtedness, now or hereafter secured by the Mortgage (as more particularly described in the Mortgage). State: State of Minnesota. Unassigned Issuer's Rights: the rights and interests of the Issuer provided in Sections 2.0113, 2.03H, 3.03, 3.07D, 3.11, 4.03, 6.04, 6.06, 6.08 and 7.06 of this Loan Agreement; provided, however, that any rights, benefits and interests inuring to the benefit of the Lender (either directly or by assignment hereof) pursuant to any of the foregoing sections shall not constitute Unassigned Issuer's Rights hereunder. Section 1.02. Rules of Interpretation. A. This Loan Agreement must be interpreted in accordance with and governed by the laws of the State. B. The words "herein," "hereof' and "hereunder" and words of similar import, without reference to any particular section or subdivision, refer to this Loan Agreement as a whole rather than to any particular section or subdivision hereof. C. The article and section headings and the Table of Contents in this Loan Agreement are for convenience of reference only and do not define, limit or affect the construction hereof. D. References in this Loan Agreement to any particular article, section or subdivision hereof are to the article, section or subdivision of this Loan Agreement as originally executed. E. All accounting terms not otherwise defined in this Loan Agreement have the meanings assigned to them in accordance with GAAP; and, unless otherwise expressly provided, all computations provided for in this Loan Agreement must be made in accordance with GAAP consistently applied and applied on the same basis as in prior years. F. Unless the context hereof clearly requires otherwise, the singular includes the plural and vice versa and the masculine includes the feminine and vice versa. G. Any opinion of counsel required hereunder must be a written opinion of such counsel. H. References to the Note as "tax exempt" or to the "tax exempt status of the Note" are to the exclusion of interest from gross income pursuant to Section 103(a) of the Code, irrespective of any taxation of the interest on the Note in limited contexts such as the alternative minimum tax and treatment of the Note as part of the adjusted current earnings therefor or as a part of effectively connected earnings and profits for purposes of the branch profits tax on foreign corporations, as is consistent with Section 59(i) of the Code. Section 1.03. Exhibits. There are no exhibits to this Loan Agreement. ARTICLE 2 REPRESENTATIONS Section 2.01. Representations by the Issuer. The Issuer makes the following representations as the basis for its covenants herein, upon which the Borrower and the Lender may rely: A. The Issuer is a municipal corporation and political subdivision, duly organized and existing under the laws of the State. B. In authorizing the issuance of the Note, the Issuer has relied entirely (and without independent investigation) on written representations and/or opinions provided by the Borrower, consultants to the Borrower and Bond Counsel that the Project is a "project" as defined in Section 469.153 of the Act and the Issuer assumes no responsibility for the accuracy of such representations and opinions. C. The matters relating to the Issuer set forth herein have been duly authorized by all requisite actions on the part of the Issuer, specifically resolutions ofthe governing body ofthe Issuer adopted at meetings thereof duly called and held, by the affirmative vote of not less than a majority of its members present at such duly constituted meetings. The Issuer has the power and authority to execute and deliver, and to perform its obligations under, this Loan Agreement, the Pledge Agreement and the Note and each such document has been duly executed and delivered by the Issuer and constitutes the legal, valid and binding obligation of the Issuer, enforceable against the Issuer in accordance with its terms, subject in all events to Section 7.06 hereof. D. The Issuer has called and held a public hearing on the financing of the Project in accordance with law. E. To the Issuer's actual knowledge, the Issuer's execution and delivery of Loan Documents to which it is a party and the Note will not constitute on the part of the Issuer a breach of, or a default under, any existing (i) provision of any special legislative act, charter, constitution or other proceeding establishing or relating to the establishment of the Issuer or its affairs or its resolutions or any applicable law, regulation, rule or ordinance, or (ii) any agreement, indenture, mortgage, lease or other instrument to which the Issuer is a party or by which it is bound. F. There is no pending or (to the Issuer's actual knowledge, but without independent investigation) threatened suit, action or proceeding against the Issuer before or by any court, arbitrator, administrative agency or other governmental authority which contests or seeks to restrain the Issuer's execution or delivery of the Note or the Loan Documents to which the Issuer is a party. Section 2.02. Representations by the Borrower. The Borrower makes the following representations, upon which the Lender and the Issuer may rely: A. The Borrower is a nonprofit corporation duly organized, validly existing and in good standing under the laws of the State; is qualified to do business in the State and other states in which it conducts its business, if any; owns, or upon completion of construction, will own the Facility; has full power to enter into this Loan Agreement and the other Loan Documents to which it is a party and to carry out its obligations hereunder and thereunder; and by proper corporate action has authorized the execution and delivery of the Loan Documents to which it is a party. B. The execution and delivery of the Loan Documents to which Borrower is a party and the consummation of the transactions contemplated hereby and thereby and the fulfillment of the terms and conditions hereof and thereof do not and will not conflict with or result in a violation or breach of any of the terms or conditions of the Articles of Incorporation or Bylaws, including any amendments of either, of the Borrower or of any of the terms and conditions of any court order, judgment or decree, or any other applicable law, regulation, rule or ordinance, or any mortgage, indenture, loan agreement or other restriction or any agreement or instrument to which the Borrower is a party or to which any property of the Borrower is subject (except any conflict, violation or breach which is not material or which has been waived in a writing duly executed by the party having authority to so waive such conflict, violation or breach), and do not and will not constitute an event of default under any of the foregoing or result in the creation or imposition of any lien, charge or encumbrance of any nature upon any property or assets of the Borrower contrary to the terms of any agreement or instrument to which the Borrower is a party or by which the Borrower is bound. C. The issuance and sale of the Note by the Issuer, and loan of the Proceeds to the Borrower, has induced the Borrower to complete the Project within the geographic boundaries ofthe Host Municipalities. D. The Borrower does not rely on any warranty of the Issuer, either express or implied, that the Project constitutes a "project" within the meaning of the Act or that the Project will be suitable to the Borrower's needs and recognizes that under the Act the Issuer is not authorized to operate the Project or to expend any funds thereon other than the revenues received by it therefrom or the proceeds of the Note or other funds granted to it for purposes contemplated in the Act. E. The Borrower is duly authorized and licensed to operate the Project and the Facility under the laws, rulings, regulations and ordinances of the State and the departments, agencies and political subdivisions thereof; and the Project is, or will be upon completion of construction, in compliance in all material respects with applicable federal, state and local laws, regulations, codes and ordinances. F. There is no suit, action, proceeding or investigation pending or threatened or any basis therefor at law or in equity or by or before any court, arbitrator, administrative agency or other federal, state or local governmental authority which individually or in the aggregate, if adversely determined, might have a material adverse effect on, or affect the validity as to the Borrower of any of the transactions contemplated hereby or the ability of the Borrower to perform its obligations hereunder or as contemplated hereby. G. The Proceeds, together with any other funds available to the Borrower for payment of Project Costs, will be sufficient to pay the Project Costs and Issuance Costs, and the Proceeds will be used only for the purposes contemplated hereby and allowable as Project Costs or Issuance Costs under the Act and the Code. H. The Borrower has reviewed and hereby approves and consents to the terms and conditions of the Note. I. To the best of the Borrower's knowledge (i) no member of the governing body or other officer of the Issuer is directly or indirectly financially interested in this Loan Agreement or any contract, agreement or job hereby contemplated to be entered into or hereby taken; (ii) no official or employee of the Issuer has or will have any personal interest, direct or indirect, in this Loan Agreement; (iii) the Borrower has not paid or given any official or employee of the Issuer any money or other consideration for obtaining this Loan Agreement; and (iv) other than payment of an administrative fee to certain of the Host Municipalities to cover out-of-pocket expenses, including legal costs associated with review of the Loan Documents, the Borrower has not paid, nor is it required to pay, the Host Municipalities any amounts as consideration for the financing contemplated by this Loan Agreement. J. The Borrower covenants that it will comply with all notice and filing requirements imposed under the Act, including but not limited to the requirements of Section 469.154, Subdivisions 5 and 7 of the Act. K. All financial information heretofore delivered to the Lender by or at the direction of the Borrower is true and correct in all respects, and does not fail to represent the financial conditions of the subjects thereof as of their respective dates and no material or adverse change has occurred in the financial conditions reflected therein. L. Borrower has not entered into any contracts or agreements for work or construction which could result in the imposition of a mechanic's or material person's lien on the Facility prior to or on parity with the lien of the Mortgage and security interest evidenced by the Loan Documents. M. The Borrower has the power and authority and has (or reasonably expects to timely obtain) all necessary licenses, permits and franchises to execute and deliver, and to perform its obligations under, and to grant the liens and security interests provided for in, each of the Loan Documents to which it is a party. Each of the Loan Documents to which the Borrower is a party has been duly executed and delivered by the Borrower and each constitutes the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms. N. Since December 31, 2003, there has not occurred (i) any material adverse change in the business, operations or financial condition of the Borrower or (ii) any material diminution of value of the Mortgaged Property or (iii) discovery of any adverse environmental conditions with respect to the Mortgaged Property. O. Except as disclosed in writing to the Lender: (i) the Borrower is not an employee benefit plan as defined in Section 3(1) of ERISA, whether or not subject to ERISA; (ii) no assets of the Borrower constitute assets of any such plan under ERISA regulations or rulings; (iii) with respect to any such plan that the Borrower sponsors, participates in or has fiduciary duties with respect to, the Borrower has materially complied with all federal and state laws, plan documents and funding requirements; (iv) the Borrower does not sponsor, participate in, or have fiduciary duties with respect to any defined benefit pension plan subject to Title IV of ERISA or any multi-employer pension plan as defined in Section 3(37)(A) of ERISA or any plan providing medical or other welfare benefits to retirees or other former employees (except as required by federal or state law); and (v) the Borrower is not (and has not ever been) a member of a group of trades or businesses (whether or not incorporated) that is treated as a single employer under Section 414 of the Code. P The Borrower has good and absolute title to all properties and assets reflected in its latest balance sheet delivered to the Lender prior to the date hereof, with respect to the Mortgaged Property, free and clear of all mortgages, security interests, liens and encumbrances, except for such covenants, restrictions, rights, easements and minor irregularities in title which do not materially interfere with the business or operations of the Borrower as presently conducted. Q. The Borrower is in substantial compliance with all provisions of all agreements, instruments, decrees and orders to which it is a party or by which it or its property is bound or affected, the breach or default of which could have a material adverse effect on the financial condition, properties or operations of the Borrower. Section 2.03. Tax Covenants. The Borrower makes the following covenants regarding issues raised by the Code, upon which the Lender may rely: A. General. Borrower will fulfill all conditions specified in Sections 103 and 141 through 150 of the Code and applicable Regulations as is necessary to maintain the tax-exempt status of the interestbome by the Note. B. Code Section 145. (1) Not more than 5% of the Proceeds will be used, directly or indirectly: (a) to finance or refinance property used in an unrelated trade or business of the Borrower determined by applying Section 513(c) of the Code; or (b) in the trade or business of any person other than an organization described in Section 501(c)(3) of the Code which has an exempt purpose substantially related to the exempt purpose of the Borrower and which will be using the rented or leased space in furtherance of their exempt purpose; or (c) to pay the Issuance Costs. (2) The payment of the principal of, or interest on, no more than 5% of the Proceeds is (under the terns of the Note or any underlying arrangement) directly or indirectly: (a) secured by any interest in: (i) property used or to be used for a private business use, or (ii) payments in respect of such property; or (b) to be derived from payments (whether or not to the Issuer) in respect of property, or borrowed money, used or to be used for a private business use as defined in Section 141 of the Code. (3) All of the property financed or otherwise provided by the Proceeds will be owned or leased by the Borrower, an organization described in Section 501(c)(3) of the Code. (4) The aggregate authorized face amount of obligations issued to finance capital expenditures incurred before August 6, 1997, and obligations issued to refund such obligations (when increased by the outstanding tax-exempt "qualified 501(c)(3) bonds" issued to finance capital expenditures incurred on or after August 6, 1997, other than "qualified hospital bonds," of the Borrower or any organization with which the Borrower is under common management or control and is a test -period beneficiary determined in accordance with Section 145(b) of the Code) does not exceed $150,000,000. (5) No portion of the Proceeds is to be used directly or indirectly to provide residential rental property for family units except as allowed by Section 145(d)(2) of the Code. (6) There is no action, proceeding or investigation pending or threatened or any basis therefor by the IRS or authorities of the State which, if adversely determined, might result in a modification of the status of the Borrower as a Section 501(c)(3) corporation. C. Code Section 147. (1) The weighted average maturity of the Note will not exceed the estimated economic life of the Project by more than 20%, all within the meaning of Section 147(b) of the Code. (2) While any portion of the Note remains outstanding, no portion of the Proceeds will be used to provide any airplane, skybox or other private luxury box, any facility primarily used for gambling, or a store, the principal business of which is the sale of alcoholic beverages for consumption off premises. (3) The Issuer held the public hearing required by Section 147(f) of the Code on July 26, 2004. The other Host Municipalities each held a public hearing required by Section 147(f) of the Code regarding the portion of the Project located in the respective Host Municipality. (4) The Issuance Costs financed by the Note will not exceed 2% of the Proceeds. D. Code Section 148. (l) The Borrower agrees it will not use the Proceeds in such a manner as to cause the Note to be an "arbitrage bond" within the meaning of Section 148 of the Code and applicable Regulations. (2) The Borrower will not invest, or permit to be invested, "gross proceeds" in any acquired nonpurpose obligations so as to deflect arbitrage otherwise payable to the United States as a "prohibited payment' to a third party. (3) Construction of the Project has been completed and the proceeds of the Prior Debt fully expended. (4) The Note is treated as meeting the rebate requirement of Code Section 148(f)(2) since the Borrower reasonably expects Proceeds will be spent to pay the Prior Debt in full no later than the date which is six months from the Closing Date and no rebate of arbitrage to the United States will be required. 10 (5) In the event Proceeds are not so spent, the Borrower will, at its sole expense, hire a qualified arbitrage rebate analyst to compute and cause the payment to the United States of all amounts required under the rebate requirement of Section 148(f) of the Code and the Regulations issued thereunder. E. Code Section 149. (1) The Borrower has not leased, sold, assigned, granted or conveyed and will not lease, sell, assign, grant or convey all or any portion of the Project or any interest therein to the United States or any agency or instrumentality thereof within the meaning of Section 149(b) of the Code. (2) A portion of the Proceeds will be used to prepay the Prior Debt. The prepayment is expected to occur on the Closing Date, but in any event will occur on a date which is less than 90 days from the Closing Date. The Borrower covenants that funds to be used to prepay the Prior Debt will not be advanced by the Lender until a date which is on or immediately before the date on which the Prior Debt will be prepaid, and further that such funds will remain uninvested subsequent to the advance thereof to prepay the Prior Debt. (3) Borrower will provide the information necessary to cause an IRS Form 8038 for the Note to be filed in a timely fashion as required by Section 149(e) of the Code. F. Code Section 150. (1) No portion of the Facility is or is expected by the Borrower to be used by an entity other than an entity described in Section 501(c)(3) of the Code which has an exempt purpose which is substantially related to the exempt purpose of the Borrower, or a governmental entity. (2) All expenditures incurred prior to the Closing Date and to be reimbursed from the Proceeds were expenditures incurred in accordance with Regulations Section 1.150-2. G. Code Section 501. (1) The Borrower is an organization described in Section 501(c)(3) of the Code and is exempt from federal income tax under Section 501(a) of the Code. (2) The Borrower is not a "private foundation" as defined in Section 509(a) of the Code. H. It is expressly understood and agreed that the Host Municipalities have not made any investigation and do not make any representation, express or implied, and assumes and shall have no responsibility with respect to whether the interest on the Note is or may remain tax exempt or otherwise excludable from gross income for any income tax purposes, and it is further expressly agreed and understood that the Issuer shall have no obligation to make any investigation respecting such tax exemption or to monitor compliance bythe Borrower with any of its "tax" or other covenants herein, or to determine whether the Borrower, the Lender or any other person has taken such actions (or refrained from acting, as the case may be) as may be necessary to preserve any such tax exemption; provided, however, that the Issuer does acknowledge that under present administrative requirements of the Internal Revenue Service, the Issuer is, 11 in connection with the issuance of the Note, required to execute an IRS Form 8038 (and, if applicable respecting future arbitrage rebate, IRS Form 8038-T), and/or such additional forms as may supplement or replace the same, if any, and the Issuer does agree to execute said forms upon request from the Borrower and/or the Lender, accompanied by said completed forms; provided that the Issuer shall have no responsibility to complete or file said forms or to investigate the accuracy of the information provided therein, as submitted to the Issuer by or on behalf of the Borrower and/or the Lender. Section 2.04. The Lender May Rely on Representations. The Borrower agrees that the representations of the Borrower contained in this Article 2 are, without limitation, for the use and benefit of the Lender, and the Lender will be entitled to rely thereon and has relied thereon in conjunction with entering into the Loan Documents to which it is a party and purchasing the Note. ARTICLE 3 THE LOAN Section 3.01. Amount and Source of the Loan. The Issuer agrees to lend to the Borrower and the Borrower agrees to borrow from the Issuer, upon the terms and conditions herein, in the Loan Documents and the Note, the aggregate principal sum of $713,000 by having the Proceeds applied and disbursed in accordance with the provisions of this Loan Agreement. Section 3.02. Repayment of the Loan. A. Subject to any rights of prepayment granted herein and in the Note, the Borrower agrees to repay the Loan in installments on the dates and in amounts sufficient to provide for the prompt payment of all principal, interest and premium, if any, due and payable by the Issuer pursuant to the Note, including interest payable pursuant to a Determination of Taxability. So long as no Default or Event of Default has occurred and is continuing, Loan Repayments must be applied as follows: (1) first, to reimbursement of any cost or expense incurred by the Lender and which is required to be reimbursed by the Borrower pursuant to any of the Loan Documents, (2) second, to late charges calculated hereunder or under the Note, (3) third, to interest due on the outstanding principal balance of the Note, and (4) fourth, to reduction of the principal balance of the Note. From and after the occurrence of a Default or Event of Default, the Lender may apply Loan Repayments in any order of application as it shall determine in its sole discretion. B. All Loan Repayments hereunder must be made directly to the Lender at its office identified in Section 7.01 for the account of the Issuer. Section 3.03. Determination of Taxabilitv. If the Lender receives notice of a Determination of Taxability, the rate of interest on the Note will be automatically increased, effective as of the Date of Taxability in accordance with the terms of the Note, in which event the Loan Repayments required hereunder by the Borrower will be adjusted accordingly with the increased payments required pursuant to the Note. In such case, the Borrower agrees also to pay to the Lender forthwith an amount equal to the aggregate 12 difference between (a) the amounts actually paid between the Date of Taxability and the date of receipt of notice of the Determination of Taxability and (b) the payments due during such period based upon the increased rate, together with the amount of interest and penalties, if any, incurred by the Lender as a result of such change in taxable status. The expenses of any contest or appeal of any action which may give rise to a Determination of Taxability must be paid by the party initiating the contest or appeal and neither the Borrower nor the Lender is required to contest or appeal any Determination of Taxability; provided that if the Lender elects in its sole discretion after consultation with the Borrower to contest or appeal such action, the Borrower must, at the request of the Lender, pay, or reimburse the Lender for the payment of, all reasonable costs incurred by the Lender in such contest or appeal (including any reasonable attorneys' fees), to which Borrower has consented in advance, which consent by Borrower will not unreasonably be withheld. Borrower additionally agrees to pay or reimburse the Issuer for reasonable expenses incurred by the Issuer in the event of a Determination of Taxability. The provisions of this Section survive payment or defeasance of the Note and termination or expiration of this Loan Agreement. Section 3.04. Notice of Proposed Taxability and Procedure Thereon. A. No Determination of Taxability, however, will be effective unless the Borrower has been given notice either (a) of the issuance of a Determination of Taxability within 60 days of such issuance; or (b) of the issuance of such ruling of the National Office or any District Office of the IRS within 3 months of such ruling (and if the ruling was requested by the Lender, the Borrower received written notice that a ruling would be requested at least 30 days prior to its submission and a copy of the request on or before the date of its submission to the National Office or any District Office of the IRS); or (c) of commencement of any such proceeding in any court of competent jurisdiction (in which proceeding the Borrower is allowed to intervene or to assume responsibility for the contest or appeal, or both, in the name of the Lender, if necessary in the Borrower's opinion) within 3 months of such commencement and before final judgment in such proceeding. B. In the event an investigation or audit is commenced by the IRS questioning the federal income tax exemption of the interest payable on the Note or in the event the Lender, or the Borrower on behalf of the Lender, chooses to contest any statutory notice of deficiency, ruling of the IRS or judgment of a court of competent jurisdiction, the Lender, at its election, may increase the rate of interest on the Note to the level set forth above, and require that the Borrower make Loan Repayments based upon such increased rate pending the final results of such investigation, suit or contest. The additional funds collected as a result of the rate increase must be placed in escrow by the Lender and must bear interest at a rate no greater than the original rate of interest on the Note. In the event the contest is resolved in favor of the Lender and the Borrower, and the interest on the Note continues to be exempt from federal income taxation, the funds held in such escrow account must be returned to the Borrower and must in no event be used to pay any interest or principal on the Note. In the event the contest is resolved against the Lender and the Borrower and interest payable on the Note is held to be subject to federal income taxation, the amount on hand in the escrow account must be applied to the additional Loan Repayments then due pursuant to this Section, with any excess returned to the Borrower. C. The provisions of this Section 3.04 survive payment or defeasance of the Note and termination or expiration of this Loan Agreement. Section 3.05. The Borrower's Obligations Unconditional. All Loan Repayments and all other payments required of the Borrower hereunder must be paid without notice or demand (except as provided herein and in the Note) and without set off, counterclaim, abatement, deduction or defense. The Borrower 13 will not suspend or discontinue any payments, and will perform and observe all of its other agreements in the Loan Documents to which it is a party and, except as expressly permitted herein, will not terminate the Loan Documents to which it is a party for any cause, including but not limited to any acts or circumstances that may constitute failure of consideration, destruction of or damage to the Facility, eviction by paramount title, commercial frustration of purpose, bankruptcy or insolvency of the Issuer or the Lender, change in the tax or other laws or administrative rulings or actions of the United States of America or of the State or any political subdivision thereof or failure of the Issuer or the Lender to perform and observe any agreement, whether express or implied, or any duty, liability or obligation arising out of or in connection with the Loan Documents or the Note. Section 3.06. Delivery of the Note. Forthwith upon the execution and delivery of this Loan Agreement and all other documents and instruments necessary to the transactions contemplated hereby and thereby and the recording and filing of such documents as may be required to be filed or recorded by the Lender or Bond Counsel, the Issuer will execute the Note and cause the delivery thereof to the Lender. Section 3.07. Closing. The Lender's obligation to advance the Proceeds to the Borrower is contingent on compliance with the following conditions, in each case to the satisfaction of the Lender in its sole and exclusive discretion: A. Receipt by the Lender of the Note and the Loan Documents, the Resolution and an approving opinion of Bond Counsel, each duly executed or certified, in the case of the Resolution, by or on behalf of each party thereto. B. Receipt by the Lender of an appraisal covering the Real Property and complying with all applicable requirements of FIRREA, in form and substance satisfactory to the Lender, that establishes a Loan to Value Ratio of not less than 75%. C. Receipt and approval by the Lender of a commitment for a mortgagee's policy of title insurance in an amount equal to the amount of the Note insuring the Mortgage as a valid first lien; in form satisfactory to Lender; showing good and marketable title to all the Mortgaged Property in Borrower; free and clear of all defects, encumbrances, security interest restrictions and easements, other than those acceptable to Lender on the day of the first disbursement hereunder; specifically insuring against mechanic's liens, rights of parties in possession and boundary line matters and including such additional endorsements as the Lender may require (including, without limitation, zoning and subdivision endorsements) subject only to: (1) customary ALTA exceptions but excluding those for mechanic's lien, survey and parties in possession; (2) taxes not yet due and payable; and (3) other exceptions acceptable to Lender. On the Closing Date, Borrower must assure that a title company is prepared to issue an ALTA mortgagee's title insurance policy subject only to Permitted Encumbrances (as defined in the Mortgage). 14 D. Reimbursement of the Lender and the Host Municipalities of all of their fees and out- of-pocket expenses, including (without limitation) all legal costs associated with issuance of the Note, the preparation and review of Loan Documents and the cost of any appraisal. E. Evidence that the Facility is not located in a HUD -identified flood hazard area or, in the alternative, evidence of adequate flood insurance coverage acceptable to the Lender. F. Receipt by Lender of a certificate of insurance coverage in a form satisfactory to the Lender, otherwise complying with the requirements ofthe Mortgage showing the standard mortgagee and lender's loss payable endorsements in favor of the Lender. G. Receipt by the Lender of an opinion of counsel to the Borrower regarding, among other things, Borrower's due incorporation; Code Section 501(c)(3) status; power and authority to enter into the Loan Documents to which Borrower is a party; enforceability of the Loan Documents to which Borrower is aparty; and such other matters as Lender or Bond Counsel reasonably requests. H. Receipt and approval by Lender of a certificate of good standing issued by the Minnesota Secretary of State with respect to Borrower. I. Receipt and approval by Lender of a certificate of Borrower's officers attesting to among other matters, Borrower's authorityto enter into the transactions contemplated hereunder, the names, titles and specimen signatures of officers authorized to execute the Loan Documents to which the Borrower is a party, with an attached approving resolution of Borrower's governing body and the Borrower's articles of incorporation and bylaws. J. Receipt by the Lender of a true and correct copy of a determination letter from the Internal Revenue Service as to Borrower's status under Code Section 501(c)(3). K. Borrower will have opened a depository account with Lender. L. Receipt by the Lender of such other documents as the Lender or its counsel may reasonably require. Notwithstanding any provision in this Agreement to the contrary, the Lender in its sole discretion may waive compliance with or extend the time for submission of any one or more of the foregoing requirements of this Section. Section 3.08. Disbursement of Note. Notwithstanding anything in this Loan Agreement to the contrary, the Lender may advance moneys directly to the Borrower on behalf of the Issuer. Costs. Section 3.09. Disbursement Procedure. A. Up to but not more than $14,260 of the Proceeds maybe disbursed for payment of Issuance 15 B. The Lender will, from time to time, disburse the portion of the Proceeds for payment of the Prior Debt. The Lender will disburse funds to Borrower upon receipt of payoff letters from the holders of the Prior Debt. The Lender has no duty to ascertain the correctness of any documents submitted in connection with any disbursement request. Upon Borrower making the final disbursement request, the Lender will credit the difference between the amounts actually drawn and $713,000 if any, to payments due under this Loan Agreement, or as a partial prepayment, subject to the instructions of the Borrower. Section 3.10. Late Charge. In the event that any Loan Repayment under Section 3.02 is made more than 5 days after the date due, such payment will bear interest payable to the Lender at the rate of 9.00% per annum. Section 3.11. Administrative Fee. On the Closing Date, and as a condition to issuance thereof, the Borrower must pay the Issuer an administrative fee equal to '/� of 1% of the stated principal amount of the Note, and said payment shall be in addition to all other amounts which are or may become payable to the Issuer pursuant to the terms of this Loan Agreement. ARTICLE 4 THE BORROWER'S COVENANTS Section4.01. Assignment. The Borrower recognizes the authority of the Issuer to assign its interest in and pledge all monies receivable under this Loan Agreement (other than the Unassigned Issuer's Rights) to the Lender as security for the payment of the principal of and interest on the Note and the payment of all fees and expenses of the Lender and others as provided herein and in the Loan Documents and consents to such assignment. Section 4.02. General Covenants of the Borrower. The Borrower covenants and agrees with the Issuer and the Lender as follows: A. Borrower will conduct the same general type of business as it presently conducts, maintain its existence as a Minnesota nonprofit corporation described in Section 501(c)(3) of the Code, remain duly qualified to do business in the State, not change its name or do business under any name other than the name used by Borrower in executing this Loan Agreement, and not dispose of all or substantially all of its assets or consolidate with or merge into another corporation or permit any other corporation to consolidate with or merge into it unless (i) the resulting, surviving or transferee corporation has tangible net worth at least equal to that of the Borrower as it existed as of the date of the merger, is qualified to do business in the State, is qualified as a political subdivision of the State or Section 501(c)(3) organization under the Code and, if other than the Borrower, assumes in writing all of the obligations of the Borrower; (ii) it provides the Issuer and the Lender with an opinion of Bond Counsel to the effect that such transaction will not adversely affect the tax-exempt status of the Note; and (iii) it receives the prior written consent of the Lender, which consent will not be unreasonably withheld. No disposition of assets, consolidation or merger may be undertaken by the Borrower if the effect thereof would be to cause the interest payable on the Note to become subject to federal income taxation. Every surviving, resulting or transferee corporation must be bound by all of the covenants and agreements of the Borrower herein with respect to any further sale or transfer. Consent as to any one transaction may not be deemed to be a waiver of the right to require consent to future or successive transactions; 16 B. Borrower will repay the Loan by making the Loan Repayments required to be made hereunder, which will be at all times sufficient to provide for the prompt payment of the principal of, interest on and any other sums and indebtedness due under the Note; C. Borrower will pay or cause to be paid all expenses of the operation and maintenance of the Facility and the Project, including property and liability insurance on the Facility and the Project in the amounts and with the coverage determined by the Borrower or required by the Mortgage, as the case may be, and pay or cause to be paid all taxes and special assessments levied upon or with respect to the Facility. To this end, the Borrower agrees to perform all of the terms and covenants of the Loan Documents to which it is a party as fully as if such terms and covenants were set forth in full herein; D. Borrower will use and maintain or cause the use and maintenance of the Facility and the Project to be kept in good repair and in good operating condition at its own cost, making such repairs and replacements as are necessary in the judgment of the Borrower so that the Facility and the Project will remain a "project" under the Act and that the interest on the Note will be exempt from federal income taxation; E. Except as provided in this subsection and Section 2.14 of the Mortgage, Borrower will not sell or lease the Facility, or any part thereof, or enter into an operating contract for the Facility without the consent of the Lender; provided however, that the Borrower may: (1) sell or lease the Facility or any part thereof to, or enter into an operating contract for the Facility or any part thereof with, (a) a political subdivision of the State or (b) a corporation described in Section 501(c)(3) of the Code, exempt from federal income taxation under Section 501(a) of the Code, with an exempt purpose that is substantially related to Borrower's exempt purpose and which will use the Facility in furtherance of its exempt purpose; or (2) enter into a contract with respect to the Facility or any part thereof with any person so long as the contract would not result in an impermissible private business use under IRS Revenue Procedure 97-13 or applicable Regulations; or (3) as to a sale, lease or contract with respect to the Facility which is not within either of the exceptions listed in clauses (1) and (2) of this subsection, enter into such sale, lease or contract with respect to the Facility with the express prior written consent of the Lender. F. Borrower will permit the use of the Facility and the Project only in furtherance of the lawful corporate purposes of the Borrower and not permit the use of the Facility or the Project or any part thereof primarily for sectarian instruction or study or as a place for devotional study or religious worship or in a manner which is prohibited by (i) the Establishment of Religion Clause of the First Amendment to the Constitution of the United States of America and the decisions of the United States Supreme Court interpreting the same, or (ii) any comparable provision of the constitution of the State and the decisions of the State Supreme Court interpreting the same. 17 G. If required by law, Borrower will maintain a license on the Facility and the Project, under current licensure statutes without substantial or repeated claims of licensure violation; and/or notice of limitation and/or revocation of licensure by the State Department of Human Services, or any other state or local agency. Borrower must remit substantial or repeated deficiency reports and current status of licensure reports, if any, to Lender, at least on an annual basis, and violation reports if and when received. H. Borrower will pay all Issuance Costs in excess of 2% of the Proceeds from its own funds on the Closing Date upon receipt of invoices therefor, or as soon as possible after the Closing Date upon receipt of invoices therefor. I. Borrower will, as promptly as practicable, notify the Lender or its assigns in writing of a Default or an Event of Default, together with a detailed written statement by a responsible officer of the Borrower setting forth the steps being taken by the Borrower to cure the effect of such events. J. Borrower will give prompt written notice to the Lender of the commencement of any action, suit or proceeding against the Borrower which, if determined adversely to the Borrower would materially adversely affect the Borrower's financial condition K. Borrower's true and correct name, state of incorporation and chief place of business are listed in Section 7.01 of this Loan Agreement and the Borrower must promptly notify the Lender and the Issuer of any change in such location or state of incorporation. L. Borrower will pay or discharge, when due, (a) all taxes, assessments and governmental charges levied or imposed upon it or upon its income or profits, upon any properties belonging to it prior to the date on which penalties attach thereto, (b) all federal, state and local taxes required to be withheld by it, and (c) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a lien or charge upon any properties of the Borrower; provided, however, that the Borrower shall not be required to pay any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate proceedings. M. Borrower warrants that (i) the Mortgaged Property complies and will at all times comply with the ADA, to the extent the ADA applies thereto; (ii) it will maintain the Mortgaged Property and perform all alterations, modifications and additions to the Mortgaged Property in compliance with the ADA. Section 4.03. Indemnity. The Borrower will pay all Issuance Costs, and will protect, indemnify and save the Host Municipalities and the Lender, their officers, employees and agents harmless from and against all liabilities, losses, damages (including consequential damages), costs, expenses (including reasonable attorneys' fees), causes of action, suits, claims, demands and judgments of any nature arising from: A. any injury to or death of any person or damage to property in or upon the Facility or the Project or growing out of or connected with the use, non-use, condition or occupancy of the Facility or the Project or any part thereof; 11.9 B. any violation of any agreement or covenant of the Loan Documents by Borrower; C. any violation of any contract, agreement or restriction by the Borrower relating to the Facility; D. any violation by Borrower of any law, ordinance or regulation affecting the Facility or any part thereof or the ownership, occupancy or use thereof; E. any statement or information relating to the expenditure of the Proceeds contained in the "arbitrage certificate" or similar document furnished by the Borrower to the Issuer or the Lender which, at the time made, is misleading, untrue or incorrect in any material respect; and any other information furnished by the Borrower to the Lender in connection with the transactions hereunder contemplated that is misleading, untrue or incorrect in any material respect; F. any investigation or audit commenced by the IRS relating to the federal income tax exemption of interest payable on the Note or any other action, ruling or decision which may give rise to a Determination of Taxability; and G. any other cause whatsoever pertaining to the issuance, sale and delivery of the Note, the acquisition, installation and operation of the Project, or any action taken in good faith by the Issuer or the Lender, their officers and employees, to carry out the transaction contemplated by this Loan Agreement. The provisions of this Section will survive payment or defeasance of the Note and termination or expiration of this Loan Agreement. The provisions of this Section shall not be construed to limit the indemnifications and other rights of the Issuer provided in Section 7.06 or any of the other Unassigned Issuer's Rights. Section 4.04. Reports to Governmental Agencies. The Borrower will furnish to agencies of the State such periodic reports or statements as they may reasonably require throughout the term of this Loan Agreement, or, to the extent the Issuer is required to furnish such reports, will cooperate with the Issuer in furnishing all information reasonably necessary and will indemnify the Issuer for any reasonable costs incurred. Section 4.05. Execution of Additional Security Documents. As additional security for the Lender, and to induce the Issuer to issue and deliver the Note, the Borrower agrees to execute and deliver to the Lender, or cause to be so executed and delivered, the Mortgage and such other documents as may be specified therein. Section 4.06. Reports and Notices to Lender. Borrower will provide Lender and the Issuer, upon the Issuer's request, the following financial reports and notices while any portion of the Note remains outstanding as follows: A. annual audited Financial Statements for Borrower within 150 days after the end of each Fiscal Year prepared by an independent firm of certified public accountants, certified as true and correct by an officer or other authorized representative of the Borrower; 19 B. immediately upon any officer of the Borrower becoming aware of (i) any Default or Event of Default, a notice describing the nature thereof and what action the Borrower proposes to take with respect thereto, (ii) notice of any material change in the management of the Borrower, (iii) notice of any material adverse changes, either individually or in the aggregate, in the assets, liabilities, financial condition, business, operations, affairs or circumstances of the Borrower from those reflected in Borrower's most recent Financial Statements submitted to the Lender or from the facts warranted or represented in any of the Loan Documents, (iv) any material Default by the Borrower under indebtedness to any person other than the Lender, (v) any material litigation commenced against the Borrower or (vi) any revocation, termination or suspension of a license, permit, authorization or designation necessary or advisable to the Borrower in the conduct of its business as currently conducted; C. from time to time, such other information regarding the business, operation and financial condition of the Borrower and the Project as the Lender may reasonably request. The 150 -day period described in this Section 4.06 may be extended at the discretion of the Lender. Section 4.07. Financial Covenants. A. The Borrower will keep adequate and proper records and books of account in which full and correct entries will be made of its dealings, business and affairs, including its use and operation of the Project. B. The Borrower will permit any person designated by the Lender, upon reasonable notice, (i) to visit and inspect any of the properties (including the Project), books and financial records of the Borrower; (ii) to examine and to make copies of the books of accounts and other financial records of the Borrower; and (iii) to discuss the affairs, finances and accounts of the Borrower with its officers at such reasonable times and intervals as the Lender may designate. ARTICLE 5 THE BORROWER'S OPTIONS Section 5.01. Prepayment of the Loan Repayments and the Note. A. The Borrower has, and is hereby granted, the option to prepay the Loan, in whole or in part, on 30 days' notice to Lender (or such shorter notice period as the Lender approves) at a price of par plus accrued interest, and without penalty. B. If the Borrower so requests, and if a partial prepayment is made which is equal to or greater than 5.00% of the then outstanding principal balance of the Note, the installments thereunder will be adjusted to amortize the then outstanding principal amount over the remaining term of the Note, payable commencing with the next installment due after such prepayment. C. In the event the Borrower elects to prepay the Loan in full, the Borrower must cause to be given in the name of the Issuer due notice of redemption or prepayment of the Note as required by the Note, 20 and in accordance with the terns hereof and of the Note. The Borrower agrees to give mailed notice of prepayment of the Note and, if required by law, published notice of prepayment of the Note. D. The Borrower must pay the prepayment price to the Lender when due. The prepayment price must be applied as follows: (1) First, to the payment of all costs and proper expenses, liabilities incurred or advances made hereunder by the Lender. (2) Second, to the payment of the Lender of any prepayment fee or penalty due on the Note as described in Section 5.01 of this Loan Agreement. (3) Third, to the payment of the Lender on behalf of the Issuer of the amount then owing or unpaid for interest due on the Note. (4) Fourth, to the payment of the Lender on behalf of the Issuer of the amount then owing or unpaid for principal due on the Note. (5) Fifth, to the payment of the Lender on behalf of the Issuer of any amounts to be applied towards prepayment of the principal of the Note in inverse order of maturity and in a manner consistent with the terms of the Note. (6) Sixth, if any surplus remains, to the Borrower. Section 5.02. Termination Upon Retirement of the Note. At such time as no principal balance on the Note remains outstanding, and arrangements satisfactory to the Lender and the Issuer have been made for the discharge of all other accrued liabilities, if any, under the Loan Documents, this Loan Agreement will terminate. ARTICLE 6 EVENTS OF DEFAULT AND REMEDIES Section 6.01. Events of Default. Anyone or more of the following events is an Event of Default under this Loan Agreement: A. if the Borrower fails to pay any Loan Repayment required under this Loan Agreement on or before the date that the payment is due and such payment continues unpaid for 10 business days after written notice thereof is given by the Lender to the Borrower; B. if the Borrower fails to observe and perform any other covenant, condition or agreement on its part to be observed or performed under this Loan Agreement or any other Loan Document to which it is a party for a period of 30 days after written notice to Borrower, specifying such Default and requesting that it be remedied, given to the Borrower by the Lender (or in the case of the Unassigned Issuer's Rights and Make Whole Payments only, by the Issuer) unless the Lender (or in the case of the Unassigned Issuer's Rights and Make Whole Payments only, the Issuer) agrees in writing to an extension of such time prior to its expiration; 21 C. if the Borrower becomes insolvent or generally does not pay its debts as they mature or files a petition in bankruptcy or for reorganization or for an arrangement pursuant to any present or future State law, or makes an assignment for the benefit of its creditors or admits in writing its inability to pay its debts generally as they become due, or if a petition or answer seeking a liquidation, reorganization, arrangement with creditors or similar relief under any present or future federal bankruptcy act or any similar federal or state law is filed in any court and such petition or answer is not discharged or denied within 45 days after the filing thereof, or a receiver, custodian, trustee or liquidator of the Borrower, or of all or substantially all of the assets of the Borrower, or of the Project or the Facility, is appointed in any proceeding brought by or against the Borrower and is not discharged within 45 days after such appointment or if the Borrower consents to or acquiesces in such appointment; D. if any "Event of Default" as described in any other Loan Document has occurred and is continuing, notwithstanding any other provisions of this Loan Agreement; E. if there is a determination that any representation or warranty made by the Borrower in this Loan Agreement, any other Loan Document or by the Borrower in any certificate, document or instrument furnished in connection with the issuance and sale of the Note or under the terms of this Loan Agreement is untrue in any material respect; F. a sale, transfer, conveyance or encumbrance of the Project or any part thereof or of all or any part of the Borrower's interest therein in violation of Section 2.09 of the Mortgage shall occur; G. a judgment or judgments for the payment of money in excess of the sum of $25,000 in the aggregate shall be rendered against the Borrower and either (i) the judgment creditor executes on such judgment or (ii) such judgment remains unpaid or undischarged for more than 30 days from the date of entry thereof or such longer period during which execution of such judgment shall be stayed during an appeal from such judgment; H. any execution or attachment shall be issued whereby any substantial part of the property of the Borrower shall be taken or attempted to be taken and the same shall not have been vacated or stayed within 30 days after the issuance thereof; or I. if Borrower fails to pay its obligations owed to persons or entities other than Lender as they become due in the usual and ordinary course of business, and such failure to pay materially threatens the Borrower's ability to perform under the Loan Documents. Section 6.02. Remedies. Subject to Section 6.08 hereof, whenever any Event of Default referred to in Section 6.01 has happened and is subsisting, any one or more of the following remedial steps may be taken by the Lender pursuant to Section 6.06 hereof. A. declare the entire principal amount of all Loan Repayments payable under this Loan Agreement for the remainder of the term of this Loan Agreement with interest accrued thereon (being an amount equal to that necessary to pay the Note in full, assuming acceleration of the Note, 22 and pay all other indebtedness thereunder) to be immediately due and payable, whereupon, without further notice, the same is immediately due and payable by the Borrower; or B. require the Borrower to furnish copies of all books and records of the Borrower pertaining to the Facility, the Project and the Mortgaged Property; or C. take whatever action at law or in equity as may appear necessary or appropriate to collect the payments then due and thereafter to become due, or to enforce performance and observance of any obligation, agreement or covenant of the Borrower under the Loan Documents; or D. enforce any right or remedy of the Mortgagee under the Mortgage; or E. take any action necessary to cure or prevent a default under any other lender's commitment to provide financing with respect to any or all of the Mortgaged Property; or F. enforce any remedy contained in any of the Loan Documents; or G. any combination or all of the above. Notwithstanding the foregoing, the Issuer may, without the consent of the Lender, exercise the remedies set forth in paragraph C above (and any other remedies available hereunder, at law or in equity) with respect to the Unassigned Issuer's Rights. Section 6.03. Manner of Exercise. No remedy herein conferred upon or reserved to the Lender is intended to be exclusive of any other available remedy or remedies, but each and every such remedy is cumulative and in addition to every other remedy given under the Loan Documents now or hereafter existing at law or in equity or by statute. No delay or omission to exercise any right or power may be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Lender to exercise any right reserved to it in this Article, it is necessary to give only such notice as may be herein or therein expressly required, but no remedy may be exercised by the Issuer without the prior written consent of the Lender (except as otherwise expressly provided for herein and in the Pledge Agreement). Section 6.04. Attorneys' Fees and Expenses. In the event the Borrower should default under any of the provisions of the Loan Documents to which it is a party and the Issuer or the Lender should employ attorneys or incur other expenses for the collection of payments or the enforcement of performance of any obligation or agreement on the part of the Borrower, the Borrower will on demand and receipt of an accounting therefor pay to the Issuer or the Lender, respectively, the reasonable fees of such attorneys and such other reasonable and necessary expenses incurred by the Issuer or the Lender. Section 6.05. Effect of Waiver; No Effect on Liability. A. Subj ect to Section 6.08 hereof, the Lender may, in its discretion, waive any Event of Default hereunder (except any Event of Default arising from Default under the Unassigned Issuer's Rights) and its consequences and rescind any declaration of acceleration of principal; provided, however, that no action or 23 inaction by the Lender may be deemed a waiver of any of the Lender's rights or remedies unless the Lender specifically agrees in writing that such action or inaction will constitute a waiver of its rights or remedies. Any waiver only applies to the particular instance for which it was agreed. No delay by either party in exercising and no failure by either party in exercising any right or remedy hereunder, or afforded by law, may be a waiver of or preclude the exercise of any right or remedy hereunder, or provided by law, whether on such occasion or any future occasion, nor may such delay be construed to be a waiver of any Event of Default or acquiescence therein. The exercise or the beginning of the exercise of one right or remedy may not be deemed a waiver of the right to exercise at the same time or thereafter any other right or remedy. Nothing in this Section permits the Lender to waive an Event of Default respecting any of the Unassigned Issuer's Rights without the written consent of the Issuer. B. Without affecting the liability of any other Person liable with respect to the Obligations and without affecting the lien or charge of the Mortgage upon any portion of the Mortgaged Property not then or theretofore released as security for the Obligations, the Lender may from time to time and without notice (i) release any Person so liable, (ii) extend the maturity or alter any of the terms of any of the Obligations, (iii) grant other indulgences, (iv) release or reconvey, or cause to be released or reconveyed, any parcel, portion or all of the Mortgaged Property, (v) take or release any other or additional security for the Obligations, or (vi) make compositions or other arrangement with debtors in relation thereto. No sale of the Mortgaged Property will in any way affect the liability of any party to this Loan Agreement, or any Person liable or to become liable with respect to the Obligations. The defenses of impairment of collateral and impairment of recourse and any requirement of diligence on the Lender's part in collecting the Obligations are hereby waived. Section 6.06. Exercise ofRemedies. Whenever any Event ofDefault has happened and is subsisting the Lender may, but is not obligated to, exercise any or all of the remedial rights under this Article 6; provided that nothing herein limits or otherwise qualifies the Issuer's enforcement and other rights under Section 6.08 hereof; beyond which the Issuer has no enforcement or remedial rights or obligations under this Article 6. Section 6.07. Application of Money. The proceeds and avails of any remedy hereunder must be applied as follows: A. First, to the payment of all costs and proper expenses (including reasonable attorneys' fees as provided herein or as otherwise permitted by law), liabilities incurred or advances made hereunder by the Issuer or the Lender; B. Second, to the payment to the Lender of any late fee; C. Third, to the payment to the Lender, on behalf ofthe Issuer, of all amounts then owing or unpaid for interest due on the Note; D. Fourth, to the payment to the Lender, on behalf of the Issuer, of all amounts then owing or unpaid for principal due on the Note; 24 E. Fifth, provided that all of the foregoing and all other amounts owing under this Loan Agreement have been paid, to the payment of any excess to the Borrower, its successors and assigns, or to whomsoever may be lawfully entitled to receive the same. Section 6.08. Issuer's Enforcement Rights. Notwithstanding any provision herein to the contrary: A. only the Issuer has the right to extend the 30 -day cure period under Section 6.0113 hereof with respect to any of the Unassigned Issuer's Rights and Make Whole Payments; B. only the Issuer has the right to waive an Event of Default with respect to any of the Unassigned Issuer's Rights or any due but unpaid Make Whole Payment; and for that purpose the provisions of Section 6.05 hereof apply as if the Issuer were the Lender; C. the Issuer has the right, without the consent of the Lender, to take whatever action at law or in equity as may appear necessary or appropriate to collect Make Whole Payments then due or thereafter due, provided that in no event may the Issuer, without the consent of the Lender, exercise the remedies in Section 6.02A hereof. Section 6.09. Right of Offset. In addition to the remedies set forth in Section 6.02 hereof, upon the occurrence of any Event of Default and thereafter while the same be continuing, the Borrower hereby irrevocably authorizes the Lender to set off all sums owing by the Borrower to the Lender against all deposits and credits of the Borrower with, and any and all claims of the Borrower against, the Lender. ARTICLE 7 GENERAL Section 7.01. Notices. All notices of an Event of Default hereunder will be sufficiently given when delivered in person to an officer of the Borrower or when deposited in the United States mail by certified or registered mail, postage prepaid, to the Borrower with proper address as indicated in this Section. All other notices, certificates and communications hereunder will be properly and sufficiently given when delivered in person, sent by commercial overnight delivery service or by Electronic Notice to an officer of the party to whom directed or when mailed to such party by regular mail, postage prepaid, with proper address as indicated in this Section. All notices, certificates and communications will be deemed given 3 days after the date of deposit in the mail or upon receipt of a transmission confirmation in the case of Electronic Notice. The Issuer, the Borrower and the Lender may, by written notice or Electronic Notice given by each to the others, designate any other address or addresses to which notices, certificates or other communications or matters to them must be sent when required as contemplated by this Loan Agreement. Until otherwise provided by the respective parties, all notices, certificates and communications required to be sent to one or more of them, as may be applicable, must be addressed as follows: 25 If to the Issuer: City of New Hope Attention: City Manager 4401 Xylon Avenue North New Hope, Minnesota 55428-4898 Telephone: (763) 531-5100 FAX:(763) 531-5136 If to the Borrower: People Incorporated Attention: Tim Burkett 317 York Avenue St. Paul, Minnesota 55101 (telephone) (651) 774-0011 (fax) (651) 774-0606 If to the Lender: St. Anthony Park State Bank Attention: Steven M. Johnson 2265 Como Avenue St. Paul, Minnesota 55108-1797 (telephone) (651) 523-7867 (fax) (651) 523-7885 Section 7.02. BindingEffect. ffect. This Loan Agreement inures to the benefit of and is binding upon the Issuer and the Borrower and their respective successors and assigns. Nothing contained herein or in any related document may be deemed to render the Lender or the Issuer a partner of the Borrower for any purpose. This Loan Agreement has been executed for the sole benefit of the Issuer and the Lender, and no third party is authorized to rely upon the Issuer's or the Lender's rights hereunder or to rely upon an assumption that either the Issuer or the Lender has or will exercise its rights under this Loan Agreement or under any document referred to herein. Section 7.03. Severability. If any term, condition or provision of this Loan Agreement or the application thereof to any person or circumstance is, to any extent, held to be invalid or unenforceable, the remainder hereof and the application of such term, provision and condition to persons or circumstances other than those as to whom it is held invalid or unenforceable will not be affected thereby, and this Loan Agreement and all the terms, provisions and conditions hereof will, in all other respects, continue to be effective and be complied with to the full extent permitted by law. Section 7.04. Entire Agreement; Amendments, Changes and Modifications. A. Except as otherwise provided in the Loan Documents, subsequent to the initial issuance of the Note and before the Loan Documents are satisfied and discharged in accordance with their terms, this Loan Agreement may not be effectively amended, changed, modified, altered or terminated without the written consent of the Lender. B. This Loan Agreement and the other Loan Documents represent the entire agreement between the parties concerning the subject matter hereof and thereof, and all oral discussions and prior agreements are merged herein and therein. Provided, if there is a conflict among any documents executed WO contemporaneously herewith with respect to the Obligations, the provision most favorable to the Lender will control. C. This Loan Agreement and the other Loan Documents have been negotiated by the parties with full benefit of counsel and should not be construed against any party as author. Section 7.05. Execution Counterparts. This Loan Agreement may be executed in several counterparts, each of which is an original and all of which constitute but one and the same instrument. Section 7.06. Limitation on the Issuer's Liability: Payment of All Expenses. A. It is understood and agreed by the Borrower (1) that no covenant, provision or agreement contained in this Loan Agreement, in the Note, in the Pledge Agreement, in the Mortgage or in any other agreement, certificate or document executed or delivered in connection with the issuance of the Note, and that no obligation herein or therein imposed upon the Issuer (or any other party) or respecting the breach thereof (collectively, the "Indemnified Matters"), shall give rise to a pecuniary liability of the Issuer or a charge against its general credit or taxing powers; (2) that the Note will be and constitute only a special and limited revenue obligation of the Issuer, payable solely from the revenues pledged to the payment thereof pursuant to the Pledge Agreement, the Mortgage and this Loan Agreement; and (3) that the Note does not now and will never constitute an indebtedness, a moral or general obligation or a loan of the credit of the Issuer or a charge, lien or encumbrance, legal or equitable, against the Issuer's property, general credit or taxing powers. The Borrower hereby indemnifies the Issuer and each of its officers, agents and employees (collectively, the "Indemnified Parties") and the Borrower agrees to hold the Indemnified Parties harmless against all expense, loss, claim, judgment, damage and any other liability respecting or arising out of the Indemnified Matters, and the Borrower will reimburse the Indemnified Parties for all legal and other expenses incurred by the Indemnified Parties in relation thereto, and this covenant to indemnify, hold harmless and reimburse the Indemnified Parties, together with all of the other Unassigned Issuer's Rights, shall survive delivery of and payment for or defeasance of the Note and the expiration or termination of this Loan Agreement. B. The Borrower will pay to the Issuer and agrees to hold the Issuer harmless from, all liabilities, costs and other expenses (including attorney's fees) of the Issuer suffered, incurred or paid at any time in connection with any actions, transactions or other matters contemplated by or taken pursuant (or relating in any manner whatsoever) to the Note, this Loan Agreement, the Pledge Agreement, the Mortgage or any of the other documents executed in connection with the issuance of or otherwise related to the Note, or as may arise in connection with any of the foregoing. The rights of the Issuer under this Section are supplementary to the Issuer's rights under the other Unassigned Issuer's Rights and the provisions thereof must not be interpreted as a limitation of the Issuer's rights under this Section 7.06. Section 7.07. Waiver ofPavment and Performance Bonds. Pursuant to Section 469.155, Subd. 16 of the Act, the Issuer hereby waives the furnishing of contractor's payment and performance bonds of the kind described in Minnesota Statutes, Section 574.26, as amended. Section 7.08. Governing Law and Construction. The validity, construction and enforceability of this Loan Agreement and the Note shall be governed by the internal laws of the State, without giving effect to conflict of laws or principles thereof, but giving effect to federal laws of the United States applicable to 27 national banks. Whenever possible, each provision of this Loan Agreement and any other statement, instrument or transaction contemplated hereby or relating hereto, shall be interpreted in such manner as to be effective and valid under such applicable law, but, if any provision of this Loan Agreement or any other statement, instrument or transaction contemplated hereby or relating hereto shall be held to be prohibited or invalid under such applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Loan Agreement or any other statement, instrument or transaction contemplated hereby or relating hereto. Section 7.09. Consent to Jurisdiction. At the option of the Lender, this Loan Agreement and the Note may be enforced in any federal court or State court sitting in Hennepin County, Minnesota; and the Borrower consents to the jurisdiction and venue of any such court and waives any argument that venue in such forums is not convenient. In the event the Borrower commences any action in another jurisdiction or venue under any tort or contract theory arising directly or indirectly from the relationship created by this Loan Agreement, the Lender at its option shall be entitled to have the case transferred to one of the jurisdictions and venues above described, or if such transfer cannot be accomplished under applicable law, to have such case dismissed without prejudice. Section 7.10. Waiver of Jury Trial. Each of the Borrower and the Lender irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Loan Agreement, the Note and any other Loan Documents or the transactions contemplated hereby or thereby. [remainder of page left blank intentionally] m IN WITNESS WHEREOF, the Issuer and the Borrower have caused this Loan Agreement to be executed in their respective names, all as of the Closing Date. /n �2" u� f 660000,%ZG�GrL-C� City Manager CITY OF NEW HOPE, MINNESOTA egae— Mayor S-1 THE UNDERSIGNED ACKNOWLEDGES A THOROUGH UNDERSTANDING OF THE TERMS AND CONDITIONS OF THIS LOAN AGREEMENT AND AGREES TO BE BOUND HEREBY. PEOPLE INCORPORATED By Its Executive Director S-2 ACKNOWLEDGMENT OF LENDER The undersigned duly authorized representative of the Lender described herein has read the preceding Loan Agreement dated as of the Closing Date, between the City of New Hope, Minnesota, and People Incorporated, and agrees that the Lender will be bound by provisions relating to the Lender therein. M. Wd Wj5761"OWILAGIGh'6455. IVPD ST. ANTHONY PARK STATE BANK By Its v;" S -J UNITED STATES OF AMERICA STATE OF MINNESOTA COUNTY OF HENNEPIN CITY OF NEW HOPE HEALTH CARE FACILITIES REVENUE NOTE, SERIES 2004 (PEOPLE INCORPORATED PROJECT) No. R-1 $713,000 Original Issue Date: August 24, 2004 Maturity Date: August 24, 2024 THIS NOTE HAS NOT BEEN REGISTERED UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF FOR VALUE, OR TRANSFERRED, WITHOUT (i) AN OPINION OF COUNSEL THAT SUCH SALE, DISPOSITION OR TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE FEDERAL SECURITIES 1 D PL T EC TIES LAWS, OR (ii) SUC S THE E T IS N I SUBJECT TO RESTRICTIO A S GOVERNING UNREGISTE TIES; S, TATIONS OF THE GOVERNMENTAL AGENCIES ADMINISTERING SUCH LAWS; AND (3) THE PROCEDURE ESTABLISHED TO EFFECT COMPLIANCE THEREWITH AND AGREED TO BY THE OWNER OF SUCH SECURITIES AND OTHER LIMITATIONS PROVIDED IN THE PLEDGE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL PURCHASER AND REGISTERED OWNER HEREOF. THIS NOTE HAS NOT BEEN REGISTERED UNDER CHAPTER 80A OF THE MINNESOTA SECURITIES LAWS OR APPLICABLE STATE BLUE SKY LAWS AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW. The CITY OF NEW HOPE, HENNEPIN COUNTY, MINNESOTA, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota (the "Issuer"), for value received, hereby promises to pay to the order of ST. ANTHONY PARK STATE BANK, a Minnesota banking corporation, at its offices in St. Paul, Minnesota, or registered assigns (the "Lender" or the "Holder"), or such other place as the Lender may designate in writing, solely from the source and in the manner hereinafter provided, the maximum principal sum of Seven Hundred Thirteen Thousand Dollars ($713,000), or a lesser amount which is advanced and outstanding hereunder, with interest on the outstanding principal balance as set forth below. The principal hereof and interest thereon must be paid in the amounts and at the times described below, 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. A. Schedule of Payments. Payments on this Note are due on the 24' day of each month commencing one month from the original issue date set forth above and ending on the maturity date set forth above (the "Payment Dates") as follows: Payments of principal and interest at the annual rate set forth below on the outstanding principal amount hereof will be payable commencing on the first Payment Date, continuing on each Payment Date thereafter through and including the maturity date set forth above. The entire outstanding principal balance and interest, if not sooner paid, must be paid in full on the maturity date set forth above. If any date on which a payment of principal of or interest on this Note is not a business day, such payment shall be payable on the next succeeding business day with the same effect as if paid on such date and without additional interest payable thereon. B. Calcul est. eur prentsEmCtIbMiEdNdaysin leap years) and actual days elapsed. Through and including the 60-month anniversary of the original issue date set forth above, interest will be payable at the rate of 4.25 percent per annum. Thereafter, interest will be payable at the Adjusted Rate described below. On the 60-,120- and 180-month anniversary of the original issue date set forth above (each such date, and the Date of Taxability defined below, an "Adjustment Date"), the interest rate on this Note will be adjusted to a rate per annum equal to the sum of (i) 0.625% and (ii) the 5-Year Treasury Rate in effect as of the Adjustment Date, (along with an increase pursuant to a Determination of Taxability as described below, the "Adjusted Rate"); provided, however, that in no event shall the interest rate on this Note be greater than 6.75% per annum. If any Adjustment Date does not fall on a business day, the Adjustment Date shall be the next succeeding business day. As used herein, "5-Year Treasury Rate" means the published monthly average yield on United States Treasury Notes adjusted to a constant maturity of five years for the most recent month available as of the date of determination, as published and made available by the Federal Reserve Board pursuant to its Federal Reserve Statistical Release (H.15(519)); provided, however, that in the event that such monthly 2 average yield is no longer published or otherwise made available, the 5-Year Treasury Rate shall be a substantially comparable index selected by the Lender in its sole discretion. C. Adjustment and Application of Payments. Monthly installments of principal and interest in the amount of $4,420.00 shall be payable for the first 60 months of the tern of this Note. Thereafter, monthly installments of principal and interest must be in an amount sufficient to amortize the then outstanding principal amount hereof at the interest rate then in effect over the remaining term of this Note. On each Adjustment Date, the installments hereunder will be adjusted to amortize the then outstanding principal amount over the remaining term of this Note at such Adjusted Rate, payable commencing on the Payment Date following each Adjustment Date. Payments on this Note will be applied in accordance with Section 3.02 of the Loan Agreement described below. Time is of the essence with respect to this Note. In the event of a failure to make when due any interest payment or principal and interest payment required under this Note, the interest payment orprincipal and interest payment so in default continues as an obligation until the interest payment or principal and interest payment in default has been fully paid. Late charges for late payments here 11 p an]c IMEN cc with Sectio '3.,10 of tile Loan A eement. D. Determnati xabilit In the event of a Determination of Taxability (as defined in the Loan Agreement hereinafter referred to), the rate of interest hereon will be automatically increased to an annual rate of interest equal to 150% of the tax exempt rate of interest payable hereon as the same is adjusted according to the terms hereof. Such increased rate is to be effective as of the Date of Taxability (as defined in said Loan Agreement) and will be considered an Adjustment Date hereunder. Pursuant to the Loan Agreement, the Borrower will forthwith pay to the Lender, as additional Loan Repayments, an amount (the "Tax Loss Amount') equal to (a) the aggregate difference between (i) the amounts actuallypaid hereunder between the Date of Taxability and the date of receipt of notice of the 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 (b) the amount of interest and penalties, if any, incurred by the Lender as a result of such change in taxable status. E. Prepayment. This Note is subject to prepayment in immediately available funds on any date at the option of the Borrower, in whole or in part and without penalty as provided in Section 5.01 3 I of the Loan Agreement. To exercise this option, the Borrower must give written notice in the name of the Issuer to the Lender not less than 30 days prior to the date fixed for prepayment; provided that the Lender may waive or provide alternative shorter notice requirements. The prepayment price is equal to the outstanding principal amount of this Note to be prepaid plus accrued interest. If the Borrower so requests, and if partial prepayment is made which is equal to or greater than 5.00 percent of the then outstanding principal balance of this Note, the installments hereunder will be adjusted to amortize the then outstanding principal amount over the remaining term of this Note, payable commencing with the next installment due after such prepayment. At the date fixed for prepayment, funds must be paid to the Lender at its registered address. All prepayments will be applied in accordance with Section 5.01 of the Loan Agreement. This Note is issued pursuant to the Constitution and laws of the State of Minnesota, particularly Minnesota Statutes, Sections 469.152 through 469.165 1, a Joint Powers Agreement dated the date hereof among the Issuer and the Minnesota Cities of Oakdale, Richfield and Brooklyn Park, and the Housing and Redevelopment Authority of the City of St. Paul, Minnesota, and pursuant to a resolution of the governing body of the Issuer -duly adopted on July -26, 2004 (the "k ation'',;:-This Note is e y the Issuer for the purpose of providing funds to bq loaned to Peopleln ,orporated.; a Minnesotan fi at the (the `Borrower"), pursuant to the terms-ofa Loan Agreement ofevgn date herewith bete Issuer and the Borrower (the"'Loan,A&ement"), to�be used for a p oject, as: damned in Mint�sot atutes, Section 469.153, Subd. 2, consisting of refinancing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing: Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 4 7483 46th St. N. level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, I car 7708 45th 1/2 Av. N. attached, rambler New Hope, MN Upton House 3 BR upper level, egress window & 1 7720 Upton Av. S. addl BR added LL, rambler, 2.25 Richfield, MN bath, 2 car detached El This Note is secured by an assignment of the Loan Agreement by the Issuer to the Lender pursuant to a Pledge Agreement of even date herewith, and a Mortgage, Security Agreement and Fixture Financing Statement, of even date herewith, from the Borrower, as mortgagor, to the Lender, as mortgagee (the "Mortgage"). The disbursement of the proceeds of this Note is subject to the terms and conditions of the Loan Agreement. The Issuer has assigned and granted to the Lender a security interest in all of the Issuer's right, title, and interest in the Loan Agreement (except the Unassigned Issuer's Rights). This Note is a special limited obligation of the Issuer payable solely from payments derived pursuant to the Loan Agreement, the Mortgage and from the property which secures payment of this Note. This Note and the interest hereon will never constitute a debt of the Issuer within the meaning of any constitutional provision or sta u . li an ever itutwoMen Me a�abil' or a general or moral obligati f e Issuer 'a Iiarge ag nst ge ert mg owMpe Note does not constitute a chaz b a e ; eg °or equita 0 o thcept revenues under the Lo and t a gt or cause the performance of t e covenants and other provisions herein referred to and is subject at all times to the availability of revenues from the Loan Agreement and the Mortgage sufficient to pay all costs of such performance or the enforcement thereof. As in the case of payment of the principal amount of this Note and interest thereon, the Issuer's obligation to pay the Tax Loss Amount and any penalty for late payments is a special and limited revenue obligation of the Issuer payable solely from payments derived pursuant to the Loan Agreement, the Mortgage and from property which secures payment of this Note. As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the Issuer at the office of the CityManager, by the registered Holder in person or by its attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Manager, duly executed by the registered Holder or its duly authorized attorney. Upon such transfer, the City Manager will note the date of registration and the name and address of the newly registered Holder in the registration blank appearing below. Alternatively, the City Manager will, at the request of the registered Holder, issue a new note in an 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 Manager may deem and treat the person in whose 5 Name and Address of Facility Size and Description of Facility Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 4 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN This Note is secured by an assignment of the Loan Agreement by the Issuer to the Lender pursuant to a Pledge Agreement of even date herewith, and a Mortgage, Security Agreement and Fixture Financing Statement, of even date herewith, from the Borrower, as mortgagor, to the Lender, as mortgagee (the "Mortgage"). The disbursement of the proceeds of this Note is subject to the terms and conditions of the Loan Agreement. The Issuer has assigned and granted to the Lender a security interest in all of the Issuer's right, title, and interest in the Loan Agreement (except the Unassigned Issuer's Rights). This Note is a special limited obligation of the Issuer payable solely from payments derived pursuant to the Loan Agreement, the Mortgage and from the property which secures payment of this Note. This Note and the interest hereon will never constitute a debt of the Issuer within the meaning of any constitutional provision or sta u . li an ever itutwoMen Me a�abil' or a general or moral obligati f e Issuer 'a Iiarge ag nst ge ert mg owMpe Note does not constitute a chaz b a e ; eg °or equita 0 o thcept revenues under the Lo and t a gt or cause the performance of t e covenants and other provisions herein referred to and is subject at all times to the availability of revenues from the Loan Agreement and the Mortgage sufficient to pay all costs of such performance or the enforcement thereof. As in the case of payment of the principal amount of this Note and interest thereon, the Issuer's obligation to pay the Tax Loss Amount and any penalty for late payments is a special and limited revenue obligation of the Issuer payable solely from payments derived pursuant to the Loan Agreement, the Mortgage and from property which secures payment of this Note. As provided in the Resolution and subject to certain limitations set forth therein, this Note is transferable upon the books of the Issuer at the office of the CityManager, by the registered Holder in person or by its attorney duly authorized in writing, upon surrender hereof together with a written instrument of transfer satisfactory to the City Manager, duly executed by the registered Holder or its duly authorized attorney. Upon such transfer, the City Manager will note the date of registration and the name and address of the newly registered Holder in the registration blank appearing below. Alternatively, the City Manager will, at the request of the registered Holder, issue a new note in an 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 Manager may deem and treat the person in whose 5 Name and Address of Facility Size and Description of Facility Londin House 4 BR, 2 bath, split entry name this Note is last registered upon the books of the City Manager, with such registration noted on this Note, as the absolute owner hereof for the purpose of receiving payment of or on account of the principal balance, prepayment price, or interest and for all other purposes; all such payments so made to the registered Holder or upon its order will 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 Manager will not be affected by any notice to the contrary. All ofthe agreements, conditions, covenants, provisions and stipulations contained in the Resolution, the Loan Agreement and the Mortgage 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 an Event of Default (as defined in the Loan Agreement) occurs under this Note and is not cured within the time periods set forth therein, or if a default occurs under the Mortgage or the Loan Agreement and is not cured within any applicable grace period, then the Lender may at its right and option declare immediately due and payable, without further notice, the principal balance of this Note and interest accrued thereon plus any costs and expenses incurred by the Lender in collecting or enforcing payment thereof, whether suit be brought or not, and all other sums due hereunder or under the Mortgage 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, this Note, or the Loan Agreement, The Lender may extend the time for payment of interest and/or principal of this Note, with ice con ny 'ab he • nkwiELt!e gsuch party. e reme f de vi -d he ein d t greement, are cumulativeane= may b ued s c si 1ee ep provided in the Mortgage, at the sole discretion of the Lender; and may be exercised as often as occasion therefor occurs. The failure to exercise any such right or remedy may in no event be construed as a waiver or release thereof. Except as may be provided in the Loan Agreement, the Lender may waive any default, except that any such waiver to be effective must be in writing and must not apply to any other act or default. The Lender will 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 Lender and then only to the extent specifically set forth in the writing. The Issuer waives demand, presentment, protest, and notice of dishonor and agrees that without any notice, the Holder hereof and any present or future owner or owners of any property and interests covered by the Mortgage or any other document given to secure this Note, or executed in connection with this Note, may from time to time extend, renew, or otherwise modify to the benefit of the Issuer the date or dates or amount or amounts ofpayment above recited. Or, the Holder hereof may from time to time release any part or parts of the property and interests subject to the Mortgage or to any such other document from the same, with or without consideration. In any case, the Borrower, subject to limitation of the Issuer's liability, continues to be liable to pay the unpaid balance of the indebtedness evidenced hereby as so extended, renewed, or modified and notwithstanding any such release, and further agrees, subject to limitation of the 6 Issuer's liability, to pay all costs of collection, including a reasonable amount for attorneys' fees, in case any payment is not made at maturity, and all costs and expenses, including attorneys' fees, incurred in protecting the security for this Note or in preserving the properties or interests or any part thereof described in the Mortgage and in any such other document, whether suit be brought or not. If any term of this Note, or the application thereof to any person or circumstances, is to any extent invalid or unenforceable, the remainder of this Note, or the application of such term to persons or circumstances other than those as to which it is invalid or unenforceable, will not be affected thereby, and each term of this Note is valid and enforceable to the fullest extent permitted by law. 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 terns "Lender" and "Holder" each mean the registered holder and owner of this Note, whether or not named as the holder herein. This Note may not be amended, modified or changed, except only by an instrument in writing and signed by the party against whom enforcement of any amendment, change, modification or discharge is sought. It is intended that this Note is made with reference to and construed as a Minnesota contract and governed by the laws thereof. The lia ss er this bte i i d r d rein an S ion 7.06 of the Loan Agreement. The Issuer has designated this Note as a "qualified tax-exempt obligation" pursuant to Section 265(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. 7 IN WITNESS WHEREOF, the Issuer has caused this Note to be duly executed by its duly authorized officers on the Original Issue Date first written above. City Manager CITY OF NEW HOPE, MINNESOTA X:;�4�r k' CM kyw SPECIMEN PROVISIONS AS TO REGISTRATION The ownership of the unpaid principal balance of this Note and the interest accruing therein is registered on the books of the City of New Hope, Minnesota, in the name of the registered Holder last noted below. Date of Name and Address of Registration Registered Holder Si ature of City Manager 8 /�J/04 St. Anthony Park State Bank 2265 Como Avenue St. Paul, MN 55108-1797 Federal Tax I.D. No. 41-0517100 P "v. 1. p 'fr. ASSIGNMENT For value received, the undersigned hereby sells, assigns and transfers unto the within Note and all rights thereunder, and does hereby irrevocably constitute and appoint attorney to transfer the said Note on the books kept for registration of the within Note, with full power of substitution in the premises. Dated: Notice:The assignor's signature to this assignment must correspond with the name as it appears upon the face of the within Note in every particular, without alteration or any change whatsoever. The City Manager will not effect transfer of this Note unless the information concerning the assignee requested below is provided. Name and Address: Taxpayer Identification Number: THIS TE T B N REG EWTI F .. ERAL TIES ACT OF 1933, AS AME A MAY RDISPOSE 'OF VALUE, OR TRANSFERRED, WITHOUT (i) AN OPINION OF COUNSEL THAT SUCH SALE, DISPOSITION OR TRANSFER MAY LAWFULLY BE MADE WITHOUT REGISTRATION UNDER THE FEDERAL SECURITIES ACT OF 1933, AS AMENDED AND UNDER APPLICABLE STATE SECURITIES LAWS, OR (ii) SUCH REGISTRATION. THE TRANSFERABILITY OF THIS NOTE IS SUBJECT TO RESTRICTIONS REQUIRED BY (1) FEDERAL AND STATE SECURITIES LAWS GOVERNING UNREGISTERED SECURITIES; (2) THE RULES, REGULATIONS, AND INTERPRETATIONS OF THE GOVERNMENTAL AGENCIES ADMINISTERING SUCH LAWS; AND (3) THE PROCEDURE ESTABLISHED TO EFFECT COMPLIANCE THEREWITH AND AGREED TO BY THE OWNER OF SUCH SECURITIES AND OTHER LIMITATIONS PROVIDED IN THE PLEDGE AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL PURCHASER AND REGISTERED OWNER HEREOF. THIS NOTE HAS NOT BEEN REGISTERED UNDER CHAPTER 80A OF THE MINNESOTA SECURITIES LAWS OR APPLICABLE STATE BLUE SKY LAWS AND MAY NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF FOR VALUE EXCEPT PURSUANT TO REGISTRATION OR OPERATION OF LAW. Mi doaV5576100WW0NDIGLI620 WFD PLEDGE AGREEMENT Execution Copy This PLEDGE AGREEMENT (the "Pledge Agreement"), dated as of August 24, 2004, is made and entered into among the CITY OF NEW HOPE, MINNESOTA, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota (hereinafter referred to as the "Issuer"), ST. ANTHONY PARK STATE BANK, a Minnesota banking corporation, having an office in St. Paul, Minnesota (hereinafter referred to as the "Lender"), and PEOPLE INCORPORATED, a nonprofit corporation organized and existing under the laws of the State of Minnesota (called herein the `Borrower"). WITNESSETH: A. The Issuer has authorized the issuance and sale to the Lender of its Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) of even date herewith (hereinafter referred to as the "Note") registered in the name of the Lender, which Note is in the principal amount of $713,000. B. The Issuer has entered into a Loan Agreement of even date herewith (hereinafter referred to as the "Loan Agreement") with Borrower, an entity described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, whereby the Issuer has agreed to loan the proceeds of the Note to the Borrower and the Borrower has agreed to repay the loan upon the terms set forth therein. C. The Issuer is willing to provide further security for the prompt payment of the principal, premium, if any, and interest due on the Note in order to induce the Lender to purchase the Note and to advance funds under the Note. NOW, THEREFORE, in order to induce the Lender to purchase the Note and to secure the due and punctual payment of the Note and all other sums due the Lender under any document securing or executed in connection with the Note, the Issuer, the Lender, and the Borrower hereby agree as follows: Assi ent. A. In order to secure the due and punctual payment of the Note, the Issuer does hereby assign to the Lender and grant to the Lender a security interest in all of the Issuer's right, title, and interest in and to the Loan Agreement, except the "Unassigned Issuer's Rights" as set forth and described in the Loan Agreement. B. The Issuer expressly understands and agrees that the Lender shall be entitled to receive all payments under the Loan Agreement (other than payments owed by the Borrower to the Issuer respecting the Unassigned Issuer's Rights). The Lender covenants and agrees that all payments which the Lender is entitled to receive under the Loan Agreement shall be applied to the payment of principal of, interest on, premium, if any, and other indebtedness, if any, on the Note and Loan Agreement. C. The Issuer hereby represents to the Lender that the Issuer has not assigned the Loan Agreement or the Loan Repayments to any person other than the Lender. D. The Issuer agrees, on request of the Lender, to execute and deliver to the Lender such other documents or instruments as shall be deemed necessary or appropriate by the Lender at any time to confirm or perfect the security interest hereby granted. 2. Exercise of Remedies. A. The Issuer will not: (1) except with respect to the Unassigned Issuer's Rights, exercise or attempt to exercise any remedies under the Loan Agreement, or terminate, modify, or accept a surrender of, or offer or agree to any termination, modification, or surrender of the same, or, by affirmative act, consent to the creation or existence of any security interest or other lien in the Loan Agreement to secure payment of any other indebtedness; or (2) receive or collect orpermit the receipt or collection of anypayments, receipts, rentals, profits, or other monies under the Loan Agreement (other than monies payable to the Issuer pursuant to the Unassigned Issuer's Rights), or assign, transfer, or hypothecate (other than to the Lender hereunder or with respect to any of the Unassigned Issuer's Rights) any of the same then due or to accrue in the future. B. The Lender agrees to provide the Issuer copies of any notices of the exercise of remedies given by the Lender to the Borrower under the Loan Agreement. The Lender further agrees that if it exercises its rights in the name of the Issuer, the Lender will provide the Issuer with notice of such exercise and copies of all pleadings. C. The Issuer agrees to provide the Lender with any notices it may receive with regard to a Determination of Taxability (as defined in the Loan Agreement). 3. Interpretation and Construction. A. Whenever any of the parties hereto is referred to, such reference shall be deemed to include the successors and assigns of such party, and all the covenants, promises, and agreements in this Pledge Agreement contained by or on behalf of the Issuer or the Lender shall bind and inure to the benefit of the respective successors and assigns of such parties whether so expressed or not. B. The unenforceability or invalidity of any provision or provisions of this Pledge Agreement shall not render any other provision or provisions herein contained unenforceable or invalid. C. This Pledge Agreement shall in all respects be construed in accordance with and governed by the laws of the State of Minnesota. This Pledge Agreement may not be amended or modified except in writing signed by the Issuer and the Lender; provided that the Issuer authorizes the Lender to execute amendments to the Loan Agreement without the consent of the Issuer, except amendments affecting the Unassigned Issuer's Rights. D. This Pledge Agreement may be executed, acknowledged, and delivered in any number of counterparts, each of which shall be an original and all of which together shall constitute but one and the same instrument. 2 E. The terms used in this Pledge Agreement which are defined in the Loan Agreement shall have the meanings specified therein unless the context of this Pledge Agreement otherwise requires, or unless such terms are otherwise defined herein. 4. Limitation of Issuer's Liability. A. The Lender recognizes and agrees to the limitations applicable to the Issuer pursuant to all of the Unassigned Issuer's Rights, including without limitation, the Issuer's reliance on the Borrower and Bond Counsel respecting qualification of the Project as a "project" under the Act, the Issuer's non - representation as to the tax -exemption of the interest on the Note and the limitation of the Issuer's liability as those particular limitations are set forth in Sections 2.01 B., 2.03H., and 7.06 of the Loan Agreement. The Lender further recognizes and understands that the Note is a special limited obligation of the Issuer payable solely from revenues derived pursuant to the Loan Agreement and from the property which secures payment of the Note. The Lender recognizes and understands that the Note and the interest thereon, together with any Tax Loss Amount (as defined in the Note) and penalties for late payment under the Note, shall never constitute a moral or general obligation of the Issuer or constitute a debt of the Issuer within the meaning of any constitutional provision or statutory limitation and shall never constitute or give rise to a pecuniary liability of the Issuer or a charge against the Issuer's general credit or taxing power. The Lender recognizes and understands that the Note does not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the Issuer, except revenues under the Loan Agreement. B. The Lender recognizes and agrees that the Issuerhas no obligation to investigate the financial position or prospects of the Borrower or the adequacy of terms of, or collateral security for, the Note, the Loan Agreement or any related agreement. The Lender recognizes and agrees that the Issuer has no liability in connection with the issuance or sale of the Note, including without limitation, liability concerning representations made by or for performance of the obligation of any person who is a party to a related transaction or agreement. C. If, notwithstanding the provisions of the immediately preceding sentence, the Issuer incurs any expense or suffers any losses, claims or damages or incurs any liabilities, the Borrower will indemnify and hold harmless the Issuer from the same and will reimburse the Issuer for any legal or other expenses incurred by the Issuer relating thereto, and this covenant to indemnify, hold harmless and reimburse the Issuer shall survive payment of the Note. 5. Representations of Lender. Lender represents and covenants that: A. the purchase of the Note will not cause it to exceed its legal lending limit with respect to the Borrower or any other person or entity liable with respect to payment of the Note and the Loan; B. the purchase of the Note and the execution, delivery and performance of this Pledge Agreement has been duly authorized by all necessary corporate action of the Lender; C. this Pledge Agreement constitutes the legal, valid and binding obligation of the Lender enforceable against the Lender in accordance with its terms (subject, as to enforceability, to 3 limitations resulting from bankruptcy, insolvency and other similar laws affecting creditors' rights generally); D. the Lender is an entity described in Minnesota Statutes, Section 80A.15, Subdivision 2, clause (g) and is duly and legally authorized to enter into this Pledge Agreement and purchase the Note, and has duly executed and delivered this Pledge Agreement; E. the Lender's purchase of the Note is authorized by the laws and regulations applicable to the Lender and is made for investment purposes and not for the purpose of redistribution except to the extent that the Lender may sell one or more participation interests therein pursuant to a participation agreement in which the participant makes representations and covenants identical to the representations and covenants set forth in this Section 5; F. no approval or prior review is required from anypublic, regulatory body with respect to the Lender entering into or performing this Pledge Agreement; G. the consummation of the transaction contemplated by this Pledge Agreement and the fulfillment of the terms thereof will not conflict with any present order, rule or regulation applicable to the Lender of any Court or of any federal or state regulatory body or administrative agency or other governmental agency having jurisdiction over the Lender; H. the Lender, in entering into this transaction, has relied solely upon credit investigations and due diligence review conducted by itself and/or its own advisors and has not relied upon any representation of the Issuer or any of its officers, agents or employees, or of Bond Counsel, other than written representations set forth in the opinion of Bond Counsel and this Pledge Agreement, the Note, the Loan Agreement and the Mortgage (collectively, the "Note Documents"), original executed copies of which the Lender has received and reviewed, along with original or copies of all other documents relating to the issuance of the Note, the review of which was deemed necessary by the Lender; I. the Lender has been offered by Borrower copies of or full access to all Note Documents and all records, reports, financial statements and other information concerning the Project and the Borrower and pertinent to the source of payment for the Note to which a reasonable investor would attach significance in making investment decisions; J. the Lender is sufficiently knowledgeable and experienced in financial and business matters, including the Borrower's business and the risks associated with the transaction and the purchase and ownership of municipal and other tax exempt special obligations, to be able to evaluate the risks and merits of the investment represented by the purchase of the Note and it is aware of the intended use of the proceeds of the Note and the risks involved therein; K. the Lender understands that the Note is a special limited obligation of the Issuer payable solely from payments derived pursuant to the Loan Agreement, or in the event of a default of the Loan Agreement, from the sale, releasing or other disposition of property which secures payment of the Note. The Lender further understands that the Note and the interest thereon do not constitute an indebtedness of the Issuer within the meaning of any State constitutional provision or 0 statutory limitation and do not constitute nor give rise to a charge against the Issuer's general credit or taxing powers or a pecuniary liability of the Issuer and that the Note will never represent or constitute a moral or general obligation, debt or bonded indebtedness of the Issuer, the State of Minnesota or any political subdivision thereof and that no right will exist to have taxes levied by the Issuer, the State of Minnesota or any political subdivision thereof for the payment of principal and interest on the Note; L. the Lender has been informed and acknowledges that, pursuant to exemptions under applicable law, (1) the Note is not being registered or otherwise qualified for sale under the "Blue Sky" laws and regulations of any state, or under federal securities laws or regulations, (2) no official statement or other disclosure document has been prepared or distributed in connection with the initial offering and sale of the Note, (3) no continuing disclosure documents will be prepared or distributed with respect to the Note, (4) the Note will not be listed on any stock or other securities exchange, (5) the Note will carry no rating of any rating service (6) the Note is not likely to be readily marketable and (7) the Note may not be assigned or transferred, in whole or in part (and no beneficial interest in the Note may be sold or transferred) except in accordance with an applicable exemption from the foregoing requirements; and M. the Lender will not offer, sell or otherwise dispose of all or any part of any interest in the Note, except: (1) in full good faith compliance with all securities registration, broker-dealer, antifraud and other provisions of applicable state and federal laws, (2) with full and accurate disclosure of all material facts to the prospective purchaser(s) or transferee(s), (3) under effective federal and state registration statements (which neither the Issuer, or the Borrower, shall in any way be obligated to provide) or under exemptions from such registrations, (4) pursuant to an agreement in substantially the form of this Pledge Agreement or a participation agreement in which the participant makes representations and covenants identical to the representations and covenants set forth in this Section 5, (5) in increments of not less than the lesser of (a) its entire interest in the Note or (b) $100,000, and (6) to financial institutions or other accredited investors (as described in Rule 501(a) of Regulation D promulgated under the Securities Act of 1933), and only to such financial institutions and other accredited investors with respect to which the Lender has a reasonable basis to conclude that such financial institutions and other accredited investors have sufficient experience in financial matters to appropriately evaluate the merits and risks of an investment in the Note. [remainder of page left blank intentionally] IN WITNESS WHEREOF, each of the Issuer, the Lender and the Borrower have caused this Pledge Agreement to be duly executed as of the day and year first above written. City Manager CITY OF NEW HOPE,, MINNESOTA Mayo S-1 ST. ANTHONY PARK STATE BANK By Its di c nisi �1 (Signature page to Pledge Agreement dated as of the date first above written among the City of New Hope, Minnesota, St. Anthony Park State Bank, and People Incorporated) S-2 PEOPLE INCORPORATED By �'� ( Its Executive Director Midoa1155I6100000014GMIGL2623. WPD (Signature page to Pledge Agreement dated as of the date first above written among the City of New Hope, Minnesota, St. Anthony Park State Bank, and People Incorporated) S-3 MORTGAGE REGISTRY TAX DUE HEREON: $1,639.90 Execution Copy THIS MORTGAGE IS EXEMPT FROM REGISTRY TAX PURSUANT TO MINNESOTA STATUTES §287.04. MORTGAGE, SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT from PEOPLEINCORPORATED to ST. ANTHONY PARK STATE BANK August 24, 2004 --------------------------------- This Mortgage secures the original principal amount of $713,000, which amount constitutes the "Initial Amount of the Debt" within the meaning of Minnesota Statutes, Section 287.03. This instrument drafted by: Fryberger, Buchanan, Smith & Frederick, P.A. 302 West Superior Street, Suite 700 Duluth, Minnesota 55802 TABLE OF CONTENTS Pape ARTICLE I - DEFINITIONS AND EXHIBITS ............................................ 4 Section 1.01 Definitions....................................................... 4 Section 1.02 Exhibits.........................................................6 ARTICLE II - GENERAL COVENANTS, AGREEMENTS, WARRANTIES .................... 6 Section 2.01 Payment of Indebtedness, Observance of Covenants; Incorporation by Reference......................................................6 Section 2.02 Maintenance; Repairs ............................................... 7 Section 2.03 Payment of Operating Costs; Prior Mortgages and Liens ................... 7 Section 2.04 Payment of Impositions ............................................. 7 Section 2.05 Escrow for Taxes and Insurance ...................................... 8 Section 2.06 Contest of Impositions, Liens and Levies ............................... 8 Section 2.07 Protection of Security ............................................... 8 Section 2.08 Additional Assurances .............................................. 9 Section 2.09 Due on Sale or Mortgaging, Etc . ...................................... 9 Section 2.10 Restriction on Bonuses ............................................. 9 Section 2.11 Rights Under Loan Agreement ....................................... 9 Section 2.12 Environmental Covenants ........................................... 9 Section 2.13 Compliance with Permitted Encumbrances and Laws ..................... 10 Section 2.14 Leases..........................................................10 Section 2.15 (Reserved)......................................................11 Section 2.16 Indemnity.......................................................II Section 2.17 Covenants Regarding Accessibility ................................... 11 ARTICLE III - INSURANCE; ENVIRONMENTAL INDEMNIFICATION ..................... I l Section 3.01 Property and Liability Insurance ..................................... 1 I Section 3.02 Environmental Indemnity ........................................... 13 ARTICLE N - UNIFORM COMMERCIAL CODE ....................................... 14 Section 4.01 Security Agreement ............................................... 14 Section 4.02 Fixture Financing Statement ........................................ 15 Section 4.03 Representations and Agreements ..................................... 15 Section 4.04 Replacement or Sale of Collateral .................................... 16 ARTICLE V - APPLICATION OF INSURANCE AND CONDEMNATION AWARDS .......... 17 Section 5.01 Casualty, Repair, Proof of Loss ...................................... 17 Section 5.02 Use of Insurance Proceeds .......................................... 17 Section 5.03 Condemnation...................................................18 Section 5.04 Use of Condemnation Proceeds ...................................... 18 ARTICLE VI - ASSIGNMENT OF RENTS AND LEASES ................................. 19 Section 6.01 Assigmnent of Rents and Leases ..................................... 19 Page ARTICLE VII - RIGHTS OF THE MORTGAGEE ........................................ 21 Section 7.01 Right to Cure Default .............................................. 21 Section 7.02 No Claim Against the Mortgagee .................................... 21 Section 7.03 Inspection....................................................... 21 Section 7.04 Waivers, Releases, Resort to Other Security, Etc ......................... 22 Section 7.05 Rights Cumulative ................................................ 22 ARTICLE VIII - EVENTS OF DEFAULT AND REMEDIES ................................ 22 Section 8.01 Events of Default ................................................. 22 Section 8.02 Remedies.......................................................22 Section 8.03 Right to Discontinue Proceedings; Restoration of Position ................. 25 Section 8.04 Waiver of Marshaling ............................................. 25 Section 8.05 Expenses of Exercising Rights, Powers and Remedies .................... 25 Section 8.06 Application of Monies ............................................. 25 ARTICLE IX - MISCELLANEOUS.................................................... 26 Section 9.01 Release and Partial Release of Mortgage ............................... 26 Section 9.02 Choice of Law ................................................... 26 Section 9.03 Changes of Ownership ............................................. 26 Section 9.04 Binding Effect on Successors and Assigns ............................. 27 Section 9.05 Unenforceability of Certain Clauses .................................. 27 Section 9.06 Captions and Headings ............................................ 27 Section 9.07 Notices.........................................................27 Section 9.08 Limitation of the Issuer's Liability .................................... 27 Section 9.09 Supplements or Amendments to this Mortgage .......................... 28 Section 9.10 Assignability; Participation Interests .................................. 28 Section 9.11 Waiver of Jury Trial ............................................... 28 Section 9.12 Effect..........................................................28 EXHIBITS Exhibit A — Legal Description Exhibit B — Permitted Encumbrances ii MORTGAGE, SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT This MORTGAGE, SECURITY AGREEMENT AND FIXTURE FINANCING STATEMENT is dated as of August 24, 2004 (this "Mortgage"), from PEOPLE INCORPORATED, a Minnesota nonprofit corporation, as mortgagor (the "Mortgagor"), to ST. ANTHONY PARK STATE BANK, a Minnesota banking corporation, as mortgagee (the "Mortgagee"). WITNESSETH: WHEREAS, the Mortgagor and the City of New Hope, a municipal corporation and political subdivision of the State of Minnesota (the "Issuer"), have entered into a Loan Agreement (the "Loan Agreement') of even date herewith, pursuant to which the Issuer will lend to the Mortgagor the proceeds of its Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) (the "Note") of even date herewith, pursuant to Minnesota Statutes, Sections 469.152 through 469.1651 as amended (the "Act'); and WHEREAS, under the Loan Agreement the proceeds of the Note are to be used to refinance commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing: Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 7483 46th St. N. 4 level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car 7708 45th 1/2 Av. N. attached, rambler New Hope, MN Upton House 3 BR upper level, egress window 7720 Upton Av. S. & 1 addl BR added LL, rambler, Richfield, MN 2.25 bath, 2 car detached Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 4 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN (as more fully defined in the Loan Agreement, the "Project'), and the Project facilities are to be owned by the Mortgagor; and WHEREAS, the Issuer and the Mortgagee, as purchaser of the Note have entered into a Pledge Agreement (the "Assignment") of even date herewith, pursuant to which the Issuerhas assigned and granted to the Mortgagee, the Loan Repayments and covenants and all other rights and interests of the Issuer in the Loan Agreement (except for the Unassigned Issuer's Rights as defined therein); and WHEREAS, the Mortgagor has agreed to mortgage and grant a security interest in the Mortgaged Property, as defined herein and described in Exhibit A hereto, to secure its obligations under the Loan Agreement, including its obligation to make Loan Repayments at times and in amounts sufficient to pay when due the principal of, premium, if any, and interest on the Note. NOW, THEREFORE, in consideration of the purchase of the Note by the Mortgagee and the issuance of the Note by the Issuer and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and to secure the due and punctual payment of any and all liabilities of the Mortgagor under the Loan Agreement, including (without limitation) Loan Repayments in the amounts and at times sufficient to pay the principal of, premium, if any, and interest on the Note; to secure payment of the Note and all interest accruing thereon; to secure the payment of all fees and expenses and advances of the Issuer or the Mortgagee under the Loan Agreement, the Assignment and this Mortgage; and to secure performance of all the covenants and agreements of the Mortgagor set forth in the Loan Agreement, the Mortgagor does hereby grant, bargain, sell, convey, and assign to the Mortgagee, its successors and assigns, a lien on and security interest in, and does hereby mortgage and pledge unto the Mortgagee, its successors and assigns, forever, with power of sale, the following: I All of its right, title and interest in and to the tracts, parcels and interests in land described in Exhibit A hereto (the "Land"), and the buildings, structures and other improvements now standing or at any time hereafter constructed or placed upon the Land (the "Building"), including but not limited to (i) all building materials, supplies and equipment now or hereafter located on the Land and suitable or intended to be incorporated in any building, structure, or other improvement located or to be erected on the Land, (ii) all heating, plumbing and lighting apparatus, motors, engines and machinery, electrical equipment, incinerator apparatus, air conditioning equipment, water and gas apparatus, pipes, faucets, and all other fixtures of every description which are now or may hereafter be placed or used upon the Land or in any building or improvement now or hereafter located thereon (the "Fixtures"), (iii) all additions, accessions, increases, parts, fittings, accessories, replacements, substitutions, betterments, repairs and proceeds to and of any and all of the foregoing, and (iv) all hereditaments, easements, appurtenances, estates, access rights, and other rights and interests now or hereafter belonging to or in any way pertaining to the Land or to the Building or any building or other improvement now or hereafter located thereon. 11 Any and all awards or compensation made by any governmental or other lawful authorities for the taking or damaging by eminent domain of the whole or any part of the Land, the Building or the Fixtures, including any award for a temporary taking, change of grade of streets or taking of access, and any and all insurance proceeds for loss or damage to the Building or the Fixtures (the "Awards"). 2 III All rents now due or which may hereafter become due under or by virtue of any lease, license, sublease, or agreement, whether written or verbal, for the use or occupancy on the Land or any part thereof (the "Rents"). iu All other rights and interests in property, whether tangible or intangible, required to be subject to the lien hereof, or from time to time by delivery or by writing of any kind conveyed, mortgaged, pledged, assigned or transferred as and for additional security hereunder by the Mortgagor or by anyone on its behalf or with its written consent to the Mortgagee, which is hereby authorized to receive any and all such property at any and all times and to hold and apply the same subject to the terms hereof. TO HAVE AND TO HOLD the Land, the Building, the Awards and the Rents (the "Mortgaged Property"), together with all privileges, hereditaments and appurtenances thereunto now or hereafter belonging, or in anywise appertaining, and the proceeds thereof, unto the Mortgagee, its successors and assigns forever. PROVIDED, NEVERTHELESS, that if the Mortgagor pays or causes to be paid to the Mortgagee by August 24, 2024, or such earlier time as may be required in the Loan Agreement and the Note, the principal sum of Seven Hundred Thirteen Thousand Dollars ($713,000), with interest, according to the terms of the Note, all of the terms of which are hereby made a part of this Mortgage to the same extent and with the same effect as if they were fully set forth herein, and also pays all other sums, with interest thereon, as may be advanced by the Mortgagee in accordance with this Mortgage, either to protect the lien of this Mortgage, or by way of additional loans or for any other purpose, and also keeps, performs and observes, all and singular, the conditions and covenants contained in this Mortgage and the Loan Agreement, which are to be kept, performed and observed by the Mortgagor, including without limitation the Unassigned Issuer's Rights (as defined in the Loan Agreement) then this Mortgage will be null and void, in which event the Mortgagee will execute and deliver to the Mortgagor, in form suitable for recording, a full release of this Mortgage, otherwise this Mortgage remains in full force and effect. And the Mortgagor, for itself, its successors and assigns, does covenant with the Mortgagee, its successors and assigns, that it is lawfully seized of the Land in fee simple; that it has good right and title to sell and convey the Mortgaged Property; that the Land and the Building are free from all encumbrances except as further stated on Exhibit B to this Mortgage (the "Permitted Encumbrances"); that the Mortgagor will quietly enjoy and possess the same; and that the Mortgagor will warrant and defend the title to the same against all lawful claims not specifically excepted in this Mortgage. This Mortgage constitutes an assignment of rents and profits within the meaning of Minnesota Statutes, Sections 559.17 and 576.01, and is intended to comply fully with the provisions thereof, and to afford Mortgagee, to the fullest extent allowed by law, the rights and remedies of a mortgage lender or secured lender pursuant thereto. 3 This Mortgage also constitutes a security agreement within the meaning of the Uniform Commercial Code as in effect in the State of Minnesota (the "UCC"), with respect to all property described herein as to which a security interest may be granted and/or perfected pursuant to the UCC, and is intended to afford Mortgagee, to the fullest extent allowed by law, the rights and remedies of a secured party under the UCC. The Mortgagor further covenants and agrees as follows: ARTICLE I DEFINITIONS AND EXHIBITS Section 1.01 Definitions. In this Mortgage the following terms have the following respective meanings unless the context hereof clearly requires otherwise: Accessibility Re lation: a State or federal law relating to accessibility of facilities or properties for disabled, handicapped and/or physically challenged persons, including, without limitation, the Americans With Disabilities Act of 1991, as amended. Assi anment: the Pledge Agreement, of even date herewith, among the Issuer, the Mortgagor and the Mortgagee. Casualtv: has the meaning given in Section 5.01 of this Mortgage. Collateral: the Fixtures, the Awards and the Rents. Condemnation: has the meaning given in Section 5.03 of this Mortgage. Default Rate: the highest rate in effect on the Note at any point in time. Electronic Notice: notice transmitted through a time-sharing terminal, facsimile machine or the Internet, if operative as between any two parties, for which a transmission confirmation has been received by the sender and which is confirmed in writing within 24 hours. Environmental Laws: the laws listed in the definition of "Hazardous Material," below and any other local, State or federal law or regulation governing Hazardous Material and disposal or release of Hazardous Material. Event of Default: any of the events referred to as such in Section 8.01 hereof. Expenses: has the meaning given in Section 3.02 of this Mortgage. Hazardous Material: (i) oil, flammable substances, explosives, radioactive materials, hazardous wastes or substances, toxic wastes or substances or any other substances, materials or pollutants which (1) pose a hazard to the Mortgaged Property, to adjacent premises or to persons on or about the Mortgaged Property or adjacent premises, (2) substances which cause the Mortgaged Property to be in violation of any local, state or federal law, rule, regulation or ordinance, or (3) substances which are defined as or included in the definition of "hazardous substances," 0 "hazardous wastes," "hazardous materials," or "toxic substances" or words of similar import under any applicable local, state or federal law or under the regulations, policy guidelines or other publications adopted or promulgated pursuant thereto, including, but not limited to: (A) the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. § 9601, et. sea.; (B) the Hazardous Materials Transportation Act, as amended, 49 U.S.C. § 1101, et seg.; (C) the Resource Conservation and Recovery Act, as amended, 42 U.S.C. § 6901, et seg.; (D) the Clean Air Act, 42 U.S.C. § 7412; (E) the Toxic Substance Control Act, 15 U.S.C. § 2601, et seq.; (F) the Clean Water Act, 33 U.S.C. § 1317 and 1321(b)(2)A and (G) rules, regulations, ordinances and other publication adopted or promulgated pursuant to the aforesaid laws; (ii) asbestos in any form which is or could become friable, urea formaldehyde foam insulation, and (iii) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any governmental authority or may or could pose a hazard to the health and safety or property interests of the Mortgagor or its employees, the occupants of the Mortgaged Property or the owners and/or occupants of property adjacent to or surrounding the Mortgaged Property. Imposition: has the meaning given in Section 2.04 of this Mortgage. Indemnified Party or Indemnified Parties: has the meaning given in Section 2.16 of this Mortgage. Issuer: the City of New Hope, Minnesota. Lease: any lease or other document or agreement, written or oral, permitting any person to use or occupy any part of the Mortgaged Property. Lender: the St. Anthony Park State Bank, a Minnesota banking corporation with an office located at the address set forth in Section 9.07 of this Mortgage, and its successors and assigns. Levy: has the meaning given in Section 2.03 of this Mortgage. Lien: has the meaning given in Section 2.03 of this Mortgage. Mortgage: this Mortgage, Security Agreement, and Fixture Financing Statement, including any mortgage supplemental hereto entered into in accordance with the provisions hereof and any amendments thereto. Mortgagee: the St. Anthony Park State Bank, a Minnesota banking corporation with an office located at the address set forth in Section 9.07 of this Mortgage, and its successors and assigns. Mortgaged Property: all interests of the Mortgagor in the Land, the Building, the Collateral and all other property covered by the granting clauses hereof, as they may at any time exist. Mo�gor: People Incorporated, a Minnesota nonprofit corporation, its successors and assigns. Note: the Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project), of even date herewith to be issued by the Issuer, pursuant to the Resolution, evidencing a loan made by the Mortgagee to the Issuer in the principal amount of Seven Hundred Thirteen Thousand Dollars ($711,000). Notices: has the meaning given in Section 3.02 of this Mortgage. Officers: Mortgagor's president, vice-president, chair, vice chair, secretary, treasurer, executive director or any other person having or exercising the duties of an officer as set forth in Mortgagor's articles of incorporation or bylaws or Minnesota Statutes, Chapter 317A. Permitted Encumbrances: those encumbrances specified in Exhibit B attached hereto or otherwise consented to by the Mortgagee in writing. Security Documents: the Resolution, the Note, this Mortgage, the Loan Agreement, the Assignment, financing statements and all other documents and agreements contemplated by this transaction which relate to the security of the Mortgagee and any amendments thereto. State: the State of Mimtesota. Tenant: any person or party using or occupying any part of the Mortgaged Property pursuant to a Lease; provided that disabled residents of the Mortgaged Property are not Tenants for purposes of this definition. UCC: the Uniform Commercial Code as in effect in the State. Capitalized terms not otherwise defined herein have the same meaning as set forth in Section 1.01 of the Loan Agreement. Section 1.02 Exhibits. Attached to and by reference made a part of this Mortgage are the following exhibits: (a) Exhibit A: a legal description of the Land. (b) Exhibit B: a list of Permitted Encumbrances. ARTICLE 11 GENERAL COVENANTS, AGREEMENTS, WARRANTIES Section 2.01 Payment of Indebtedness Observance of Covenants: Incorporation by Reference. Time is of the essence hereof. The Mortgagor must make all payments when due under the Loan Agreement, and must perform and comply with all covenants, agreements, conditions, provisions, stipulations and obligations set forth therein or in any other agreements or instruments delivered by the Mortgagor in comtection with the issuance of the Note on its part to be performed, at the times and in the manner required thereby. All of the covenants, obligations, agreements, warranties and representations of Mortgagor contained in the Loan Agreement and the other Security Documents and all of the terms and provisions thereof, are hereby incorporated herein and made a part hereof by reference as if fully set forth herein. Section 2.02 Maintenance; Repairs. The Mortgagor agrees that it will keep and maintain the Mortgaged Property in good condition, repair and operating condition free from any waste or misuse, ordinary wear and tear excepted, and will comply with all requirements of law, municipal ordinances and regulations, restrictions and covenants affectingthe Mortgaged Property and its use, and will promptlyrepair or restore any buildings, improvements or structures now or hereafter on the Land which may become damaged or destroyed to their condition prior to any such damage or destruction, unless the Mortgagee exercises its option to accelerate repayment of the Note as provided in Section 8.02 of this Mortgage and the Loan Agreement. The Mortgagor agrees not to acquiesce in any rezoning classification, modification or restriction which will adversely affect the present permitted uses of the Land and the Building. Section 2.03 Payment of Operating Costs: Prior Mortgages and Liens. Mortgagor makes the following representations and warranties: (a) Mortgagor owns the Mortgaged Property free from all Liens and other encumbrances, except the Permitted Encumbrances. All applicable zoning, environmental, land use, subdivision, building, fire, safety and health laws, statutes, ordinances, codes, rules, regulations and requirements affecting the Mortgaged Propertypermit the current use of the Mortgaged Property and occupancy thereof, and Mortgagor has obtained or reasonably expects to obtain all consents, permits and licenses required for such use. Mortgagor has examined and is familiar with all applicable covenants, conditions, restrictions and reservations, and with all applicable laws, statutes, ordinances, codes and governmental rules, regulations and requirements affecting the Mortgaged Property, and the Mortgaged Property materially complies with all of the foregoing. (b) The Mortgaged Property is not homestead property nor is it agricultural property or in agricultural use. (c) The Mortgaged Property is served by all necessary public utilities, and all such utilities are operational and have sufficient capacity. There is no contract or agreement providing for services to or maintenance of the Mortgaged Property which cannot be canceled upon 30 days' or less notice. (d) The Mortgagor agrees that it will pay all operating costs and expenses of the Mortgaged Property, keep the Mortgaged Property free from mechanics', materialpersons' and other liens not listed on Exhibit B as Pennitted Encumbrances ("Liens"), keep the Mortgaged Property free from levy, execution or attachment ("Levy") and will pay when due all indebtedness which may be secured by mortgage, lien or charge on the Mortgaged Property, superior or equal to the lien of this Mortgage, and upon request will exhibit to the Mortgagee satisfactory evidence of such payment and discharge. Mortgagor hereby waives its right to be subrogated to any Liens by virtue of Mortgagor's payment of the amount secured by such Liens that are superior to this Mortgage. Section 2.04 Payment of Impositions. The Mortgagor will pay when due and before any penalty and before they become delinquent all taxes, assessments, water charges, sewer charges, and other fees, taxes, charges and assessments of every kind and nature whatsoever assessed or charged against or constituting alien on the Mortgaged Property or any interest therein ("Impositions"), and will upon demand furnish to the Mortgagee proof of the payment of any such Impositions. Section 2.05 Escrow for Taxes and Insurance. If an Event of Default occurs and is continuing hereunder, and if demanded by the Mortgagee, the Mortgagor will, upon such demand, deposit with the Mortgagee each and every month accompanying each installment due under the Loan Agreement a sum which, in the estimation of the Mortgagee, is equal to one -twelfth of the annual taxes, assessments and insurance premiums; said deposits will be held bythe Mortgagee without interest, free of any liens or claims on the part of creditors of the Mortgagor and as part of the security of the Mortgagee, and must be used by the Mortgagee to pay current taxes and assessments and insurance premiums on the Mortgaged Property as the same accrue and are payable. If said deposits are insufficient to pay the taxes, if any, and assessments and insurance premiums in full as the same become payable, the Mortgagor will deposit with the Mortgagee such additional sum or sums as may be required in order for the Mortgagee to pay such taxes and assessments and insurance premiums in full. Section 2.06 Contest of Impositions, Liens and Levies. The Mortgagor is not required to pay, discharge or remove any Imposition, Lien or Levy so long as the Mortgagor in good faith contests the same or the validity thereof by appropriate legal proceedings which operate to prevent the collection of the Levy, Lien or Imposition so contested and the sale of the Mortgaged Property, or any part thereof to satisfy the same, provided that the Mortgagor, prior to the date such Levy, Lien or Imposition is due and payable, has deposited with Mortgagee 125.00% of the amount in controversy as security to insure compliance with any order, or to be used by Mortgagee to protect its interest in the Mortgaged Property against the contested claims. Any such contest must be prosecuted with due diligence and the Mortgagor must promptly after final determination thereof pay the amount of any such Levy, Lien or Imposition so determined, together with all interest and penalties, which maybe payable in connection therewith and further will indemnify and hold harmless the Issuer, the Lender and the Mortgagee against all losses in connection therewith. Notwithstanding the provisions of this Section, the Mortgagor must (and if the Mortgagor fails so to do, the Mortgagee, may, but is not required to) pay any such Levy, Lien or Imposition notwithstanding such contest if in the judgment of the Mortgagee's counsel, reasonably exercised, the Mortgaged Property is in danger of imminent loss by forfeiture or foreclosure. Section 2.07 Protection of Security. (a) The Mortgagor agrees to (i) promptly notify the Mortgagee of, (ii) take all appropriate steps to tender defense to the appropriate insurer of, and (iii) if necessary, appear in and defend: any suit, action or proceeding that affects the Mortgaged Property or the rights, interest, title to, possession of, or priority of the lien of this Mortgage. If appropriate appearance and defense is not entered, the Mortgagee may elect to appear in or defend any such action or proceeding and the Mortgagor agrees to indemnify and reimburse the Mortgagee from any and all loss, damage, expense or cost arising out of or incurred in connection with any suit, action or proceeding that affects the Mortgaged Property or the rights or interests of the Mortgagee, including costs of evidence of title and reasonable attorneys' fees. (b) Mortgagee shall have the power and authority, upon prior notice to Mortgagor, to institute and maintain any suits and proceedings as Mortgagee may deem advisable to: (i)prevent any impainnent of the Mortgaged Property by any act which may be unlawful or by any violation of this Mortgage, (ii) preserve or protect its interest in the Mortgaged Property, or (iii) restrain the enforcement of or compliance with any legislation or other governmental enactment, rule or order that maybe unconstitutional or otherwise invalid, if, in the sole opinion of Mortgagee, the enforcement of or compliance with such enactment, rule or order might impair the security hereunder or be prejudicial to Mortgagee's interest. Section 2.08 Additional Assurances. The Mortgagor agrees, upon reasonable request by the Mortgagee, to execute and deliver such further instruments, financing statements under the UCC and assurances and will do such further acts as may be necessary or proper to carry out more effectively the purposes of this Mortgage, and without limiting the foregoing, to make subject to the lien hereof any property agreed to be subjected hereto or covered by the granting clauses hereof, or intended so to be. The Mortgagor agrees to pay any recording fees, filing fees, stamp taxes or other charges arising out of or incident to the filing or recording of this Mortgage and such further assurances and instruments. Section 2.09 Due on Sale or Mortgaging. Etc. The Mortgagor shall not, without the prior written consent of the Mortgagee, voluntarily, involuntarily or by operation of law agree to cause, suffer or permit (i) any sale, transfer, lease, sublease or conveyance of any interest of the Mortgagor, legal or equitable, in the Mortgaged Property; (ii) any sale, transfer or encumbrance of any of the membership interests in the Mortgagor; or (iii) any mortgage, pledge, encumbrance or lien to be outstanding against the Mortgaged Property or any portion thereof, or any security interest to exist therein, except as created by this Mortgage or as explicitly permitted herein, without, in each instance, the prior written consent of the Mortgagee. If the Mortgagor breaches the foregoing covenant, the Mortgagee may, at its election, declare all amounts owing under the Loan Agreement and the other Loan Documents to be immediately due and payable, without notice to the Mortgagor, and upon such declaration all such amounts shall be immediately due and payable. Section 2.10 Restriction on Bonuses. (a) The Mortgagor must not, without the prior written consent of the Mortgagee, declare and pay any bonus to its Officers, except as hereinafter provided in Subsection (b) hereof. (b) The Mortgagor may, without violating the provisions of Subsection (a) of this Section 2.10, declare and pay bonuses to its Officers provided that such bonuses are payable only to the extent of current earnings, prior to bonuses, as reflected in the Mortgagor's amoral audited financial statement. Section 2.11 Rights Under Loan Agreement. The Loan Agreement sets forth the covenants and obligations of the Mortgagee and the Mortgagor, including a provision that the Loan Agreement may not be effectively amended, changed or modified without the written consent of the Lender, and reference is hereby made to the same for a detailed statement of said covenants and obligations. Section 2.12 Environmental Covenants. Except with respect to those wastes generated by Mortgagor in the ordinarycourse of providing shared housing services, which shall be handled in accordance with all applicable Enviromnental Laws or set forth in an environmental report provided to Lender, Mortgagor represents, warrants and covenants to Mortgagee and the Issuer: (a) that during the period of Mortgagor's ownership or use of the Mortgaged Property no Hazardous Material has been, is or will be stored, deposited, treated, recycled or disposed of on, under, in or about the Mortgaged Property; (b) that Mortgagor has no knowledge, of any prior use or existence of any Hazardous Material on the Mortgaged Property by any prior owner of or person using the Mortgaged Property; (c) that, without limiting the generality of the foregoing, Mortgagor has no knowledge, after due inquiry, that the Mortgaged Property contains asbestos, polychlorinated biphenyl components (PCBs) or underground storage tanks, except as Z have been previously disclosed to Mortgagee; (d) that there are no conditions existing currently or likely to exist during the term of this Mortgage which would subject Mortgagor to any damages, penalties, injunctive relief or clean-up costs in any governmental or regulatory action or third -party claim relating to any Hazardous Material; (e) that Mortgagor is not subject to any court or administrative proceeding, judgment, decree, order or citation relating to any Hazardous Material; and (f) that Mortgagor in the past has been, at the present is, and in the future will remain in compliance with all Environmental Laws. Section 2.13 Compliance with Permitted Encumbrances and Laws. Subject to Section 2.06, above, Mortgagor shall comply with all present and future statutes, laws, rules, orders, regulations and ordinances affecting the Mortgaged Property, any part thereof or the use thereof and shall also comply with all covenants, conditions and restrictions applicable to the Mortgagor which are contained in any document constituting a Permitted Encumbrance. Section 2.14 Leases. (a) Subject to the requirements of Section 4.02E of the Loan Agreement, Mortgagor shall not enter into or amend any Lease without Mortgagee's prior written consent, and shall furnish to Mortgagee, upon execution, a complete and fully executed copy of each Lease. Mortgagor shall have the right, without the prior written consent of Mortgagee, to enter into a Lease of a portion of the Mortgaged Property with a person or party not affiliated with Mortgagor provided that (I) the Tenant is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, has an exempt purpose substantially related to the exempt purpose of Mortgagor and is using the leased premises in furtherance of its exempt purpose; or (ii) Mortgagor is providing services to the Tenant thereunder and (iii) the proposed use of the premises covered by such Lease does not involve the storage, generation, treatment, handling, use or disposal of Hazardous Materials, except for minor quantities thereof used in the ordinary course of business in compliance with Environmental Laws, and is not offensive or illegal, or reasonably likely to constitute or cause a nuisance or result in a decrease in the value or reputation of the Mortgaged Property. Mortgagor shall provide Mortgagee with a copy of each proposed Lease requiring the consent of Mortgagee and with any information requested by Mortgagee regarding the proposed Tenant thereunder. Mortgagee may declare each Lease to be prior or subordinate to this Mortgage, at Mortgagee's option. (b) Mortgagor shall, at its cost and expense, perform each obligation to be performed by the landlord under each Lease; not borrow against, pledge or further assign any rents or other payments due thereunder; not permit the prepayment of any rents or other payments due for more than thirty (30) days in advance; and not permit any Tenant to assign its Lease or sublet the premises covered by its Lease, unless required to do so by the terms thereof and then only if such assignment does not work to relieve the Tenant of any liability for performance of its obligations thereunder. (c) If any Tenant shall default under its Lease, Mortgagor shall, in the ordinary course of business, exercise sound business judgment with respect to such default, but may discount, compromise, forgive or waive claims or discharge the Tenant from its obligations under the Lease or terminate or accept a surrender of the Lease. (d) If Mortgagor fails to perform any obligations of Mortgagor under any Lease or if Mortgagee becomes aware of or is notified by any Tenant of a failure on the part of Mortgagor to so perform, Mortgagee may, but shall not be obligated to, without waiving or releasing Mortgagor from any obligation in this ID] Agreement or any of the other Security Documents, remedy such failure, and Mortgagor agrees to repay upon demand all sums incurred by Mortgagee in remedying any such failure, together with interest thereon from the date incurred at the Default Rate. Section 2.15 Reserved Section 2.16 Indemnity. Mortgagor shall indemnify the Issuer and the Mortgagee and their directors, officers, agents and employees (collectively the "Indemnified Parties") against, and hold the Indemnified Parties harmless from, all losses, damages, suits, claims, judgments, penalties, fines, liabilities, costs and expenses by reason of or on account of, or in connection with the construction, reconstruction or alteration of the Mortgaged Property, or any accident, injury, death or damage to any person or property occurring in, on or about the Mortgaged Property or any street, drive, sidewalk, curb or passageway adjacent thereto unless caused by the gross negligence or intentional misconduct of the Indemnified Parties. The indemnity contained in this Section shall include costs of defense of any such claim asserted against an Indemnified Party, including attorneys' fees. The indemnity contained in this Section shall survive payment and performance of the Note and satisfaction and release of this Mortgage and any foreclosure thereof or acquisition of title by deed in lieu of foreclosure. Section 2.17 Covenants Regarding Accessibility. (a) Mortgagor will, promptly after obtaining actual knowledge thereof, give notice to Mortgagee of. (i) any governmental or regulatory actions instituted or threatened under any Accessibility Regulation affecting the Mortgaged Property, (ii) all claims made or threatened by any third party against any Indemnified Party or the Mortgaged Property relating to a violation of any Accessibility Regulations, (iii) discovery by Mortgagor of any occurrence or condition on or under the Mortgaged Property or on or under any real property adjoining or in the vicinity of the Mortgaged Property which could subject Mortgagor, Mortgagee or the Mortgaged Property to a claim under any Accessibility Regulation. Any such notice shall include copies of any written materials received by Mortgagor. (b) Mortgagor will comply with all Accessibility Regulations which are applicable to the Mortgaged Property. In the event that (i) Mortgagee reasonably believes that a material violation of an Accessibility Regulation may have occurred in connection with the Mortgaged Property; or (ii) Mortgagee receives notice from Mortgagor or otherwise has knowledge that an event described in Section 2.17(a) and pertaining to Accessibility Regulations has occurred; then, in any such event, Mortgagor shall at its cost obtain and deliver to Mortgagee an Accessibility Regulation compliance report relating to the Mortgaged Property or shall have anypreviously delivered materials updated and/or amplified, by a qualified consultant selected by Mortgagor and acceptable to Mortgagee; if Mortgagor fails to do so within 45 days after such request is made, Mortgagee shall have the right to do so, in which event Mortgagor shall reimburse Mortgagee for the cost incurred by Mortgagee in doing so within 10 days following demand therefor by Mortgagee. ARTICLE III INSURANCE; ENVIRONMENTAL INDEMNIFICATION Section 3.01 Property and Liability Insurance. (a) The Mortgagor must obtain or cause to be obtained and keep or cause to be kept in full force and effect during the term of this Mortgage at its cost and 11 expense, and at no expense to the Mortgagee: (1) insurance against loss by fire, lightning and risk customarily covered by standard extended coverage endorsement; (2) broad form boiler and machinery insurance on all equipment and pressure fired vehicles or apparatus customarily covered by such insurance and situated in the Building; (3) comprehensive general public liability insurance covering the liability of the Mortgagor against claims for bodily injury, death or property damage occurring on, in, or about the Land and the Building; (4) business interruption or rent loss insurance covering an interruption of Mortgagor's business for up to 12 months, but not less than the sum of (A) total debt service due on the Note in any Fiscal Year plus (B) real estate taxes due and owing during the same Fiscal Year; and (5) such other insurance, including, but not limited to, workers' compensation insurance, as is customarily carried by prudent owners of comparable property to the Mortgaged Property. (b) Notwithstanding the foregoing, (i) the insurance requirement of clause (4) of Section 3.01(a) need not be obtained by Mortgagor if it does not otherwise carry such insurance and (ii) while any building or other improvement is in the course of being constructed or rebuilt on the Land, the Mortgagor shall provide the hazard insurance described in clause (1) of Section 3.01(a) in builder's risk completed value form, including coverage available on the so-called "all-risk" non -reporting form of policy for an amount equal to 100% of the insurable replacement cost of such building or other improvement. (c) All such insurance policies must be written on forms and with insurance companies satisfactory to the Mortgagee. All property (including boiler and machinery) and liability insurance policies maintained by Mortgagor pursuant to this Section shall (i) include effective waivers by the insurer of all claims for insurance premiums against Mortgagee, and (ii) provide that any losses shall be payable notwithstanding (a) any act of negligence by Mortgagor or Mortgagee, (b) any foreclosure or other proceedings or notice of foreclosure sale relating to the Mortgaged Property, or (c) any release from liability or waiver of subrogation rights granted by the insured. All insurance policies maintained by Mortgagor pursuant to the foregoing provisions shall respond on a primary basis relative to any other insurance carried by Mortgagee in the event of loss. Insurance terms not otherwise defined herein shall be interpreted consistent with insurance industry usage. (d) The insurance required by clauses (1), (2) and (4) of Section 3.01(a) must name as the insured parties the Mortgagor and the Mortgagee as their interests may appear (standard mortgagee and lender's loss payable endorsements), must be in an amount equal to the full replacement value of the covered property and sufficient to prevent Mortgagor from becoming a coinsurer of any loss thereunder, must be in such minimum amounts, with such deductibles, and with such limits as the Mortgagee may reasonably require, and must bear a satisfactory mortgagee clause in favor of the Mortgagee with loss proceeds under any such policies to be made payable to the Mortgagee. The insurance required by subparagraphs (3) and (5) of clause (a) must contain policy limits no less than that customarily carried by prudent owners of business comparable to the Mortgagor's business and with comparable financial resources. (e) At the request of the Mortgagee, evidence of the payment of current premiums therefor must be delivered to the Mortgagee. (f) The Mortgagor must, upon execution of this Mortgage, and within 30 days prior to the expiration of any such policy, deliver original policies or certificates of the insurer evidencing such insurance. Each policy must contain a provision that the insurer will not cancel or modify it without giving 12 written notice to the Mortgagor and the Mortgagee at least 30 days before the cancellation or modification becomes effective. (g) Subject to existing law, in the event of foreclosure of this Mortgage or any acquisition of the Mortgaged Property by the Mortgagee all such policies and any proceeds payable therefrom, whether payable before or after a foreclosure sale, or during the period of redemption, if any, will become the absolute property of the Mortgagee to be utilized in its discretion. (h) In the event of foreclosure or the failure to obtain and keep any required insurance, the Mortgagor empowers the Mortgagee to effect insurance upon the Mortgaged Property at the Mortgagor's expense in the amounts and types aforesaid for a period of time covering the time of redemption from foreclosure sale, and if necessary therefor, to comply with any or all inspection reports and insurance recommendations received by Mortgagor from any insurer. Section 3.02 Environmental Indemnity. (a) The Mortgagor must comply with all regulations concerning the environment, health and safetyrelating to the generation, use, handling, production, disposal, discharge and storage of Hazardous Material, in, on, under, or about the Mortgaged Property. The Mortgagor must promptly take any and all necessary action in response to the presence, storage, use, disposal, transportation or discharge of any Hazardous Material in, on, under or about the Mortgaged Property by the Mortgagor or persons acting on behalf of or at the direction of the Mortgagor as all applicable laws, rules, regulations, or ordinances may require. In the event the Mortgagor undertakes any remedial action with respect to any Hazardous Material on, under or about the Mortgaged Property, the Mortgagor must immediately notify the Mortgagee of any such remedial action, and must conduct and complete such remedial action (1) in compliance with all applicable federal, state and local laws, regulations, rules, ordinances and policies, (2) to the reasonable satisfaction ofthe Mortgagee, and (3) in accordance with the orders and directives of all federal, state and local governmental authorities. For purposes of the notification requirement contained in this paragraph, "remedial action" does not include Mortgagor's routine disposal of medical waste, as defined in 42 U.S.C. § 6903(40), whether infectious or not infectious, provided such routine disposal is conducted in compliance with all applicable federal, state and local laws, regulations, rules, ordinances and policies. (b) The Mortgagor agrees to provide the Mortgagee with copies of any notification known to it of releases of Hazardous Material or of any environmental hazards or potential hazards which are given to any federal, state or local agencies or authorities or which are received by the Mortgagor from any federal, state or local agencies or authorities with respect to the Mortgaged Property. Such copies must be sent to the Mortgagee within 10 days after they are received by the Mortgagor. (c) The Mortgagor agrees to provide the Mortgagee with copies of all emergency and hazardous chemical inventory forms (hereinafter "Notices") with respect to the Mortgaged Property or the site thereof previously given to any federal, state or local governmental authority or agency as required pursuant to the Emergency Planning and Community Right -to -Know Act of 1986, U.S.C.A. Section 1011 et sea., and to provide the Mortgagee with copies of all such Notices subsequently sent to any such governmental authority or agency as required pursuant to the Emergency Planning and Community Right -to -Know Act of 1986. Such copies of subsequent Notices must be sent concurrently to the Mortgagee and any such governmental authority or agency. 13 (d) The Mortgagor must protect, indemnify and hold the Indemnified Parties, their directors, assignees, officers, employees and agents and any purchaser at a foreclosure sale pursuant to this Mortgage and any assignee of such purchaser, harmless from and against any and all claims, proceedings, lawsuits, liabilities, damages, losses, fines, penalties, judgments, settlements, awards, costs and expenses whatsoever (including, without limitation, reasonable attorneys' fees and costs and expenses of investigation and proof) which result (directly or indirectly) from the violation or alleged violation of any Environmental Law, permit, judgment or license or which result from, arise out of or relate in any way to any presence, generation, use, handling, production, transportation, disposal, storage, deposit, treatment, recycling, release or threat of a release, actual or alleged, of any Hazardous Material in, on, under, or about the Mortgaged Property or the transportation of any Hazardous Material to or from the Mortgaged Property by the Mortgagor or any person acting on behalf of or at the direction of the Mortgagor, whether previously or now located upon, delivered to or in transit to or from the Mortgaged Property or the site thereof and regardless of whether any such event occurred prior to the date hereof or hereafter occurs and regardless of whether such event occurs as the result of the negligence or misconduct of the Mortgagor or any Tenants, including, without limitation: (1) all foreseeable and all unforeseeable consequential damages directly or indirectly arising out of (A) the use, generation, storage, discharge or disposal of Hazardous Material by the Mortgagor, or persons acting on behalf of or at the direction of the Mortgagor, or (B) any residual contamination affecting any natural resources or the environment, and (2) the costs of any required or necessary repair, cleanup, or detoxification of the Mortgaged Property and the preparation of any closure or other required plans (all such costs, damages, and expenses referred to in this Section referred to as "Expenses"). In addition, the Mortgagor agrees that in the event any Hazardous Material is caused to be removed from the Mortgaged Property by the Mortgagor or any other person or entity, such Hazardous Material will be considered generated, transported or disposed of solely in the name of the Mortgagor and the Mortgagor must assume any and all liability for such removed Hazardous Material. The indemnification of the Mortgagee by the Mortgagor is a continuing indemnification and shall remain in full force and effect notwithstanding the expiration or termination of this Mortgage. (e) The Mortgagor must protect, indemnify and hold the Indemnified Parties, their directors, assignees, officers, employees and agents and any purchaser at a foreclosure sale pursuant to this Mortgage and any assignee of such purchaser, harmless from and against any and all claims, proceedings, lawsuits, liabilities, damages, losses, fines, penalties, judgments, settlements, awards, costs and expenses whatsoever (including, without limitation, reasonable attorneys' fees and costs and expenses of investigation and proof) which result (directly or indirectly) from, arising out of, or based upon the imposition of any governmental lien for the recovery of environmental clean-up costs expended under any Environmental Law. Mortgagor shall immediately notify Mortgagee in writing of any governmental or regulatory action or third -party claim instituted or threatened in connection with any Hazardous Material on, in, under or about the Mortgaged Property except those wastes generated by Mortgagor in the ordinary course of business. ARTICLE IV UNIFORM COMMERCIAL CODE Section 4.01 Security Agreement. This Mortgage constitutes a security agreement as defined in the UCC and the Mortgagor hereby grants to the Mortgagee a security interest within the meaning of the UCC in favor of the Mortgagee in the Collateral. 14 Section 4.02 Fixture Financing Statement. As to those items of Collateral described in this Mortgage that are, or are to become, fixtures relating to the real estate mortgaged herein, it is intended as to those items that THIS MORTGAGE IS EFFECTIVE AS A FINANCING STATEMENT FILED AS A FIXTURE FILING from the date of its filing in the real estate records of the county where the Mortgaged Property is situated. Name and Address of Debtor and Record Owner of the Mortgaged Property: Jurisdiction of Debtor's organization: Debtor's Taxpayer Identification No.: Debtor's Organizational No.: People Incorporated 317 York Avenue St. Paul, Minnesota 55101 Minnesota 41-0962296 H-891 Name and Address of Secured Party: St. Anthony Park State Bank Description of the types (or items) of property covered by this financing statement: 2265 Como Avenue St. Paul, Minnesota 55108-1797 Fixtures, Awards and Rents all as set forth in the granting clauses hereto Description of real estate to which all See Exhibit "A" attached hereto or a part of the Collateral is attached or upon which it is located: This document covers goods which are or are to become fixtures. Section 4.03 Representations and Agreements. (a) The Mortgagor is and will be the true and lawful owner of the Collateral mentioned in any financing statement, subject to no liens, charges, security interests and encumbrances other than the lien hereof and Permitted Encumbrances; (b) such Collateral is to be used by the Mortgagor solely for its corporate purposes and is installed or being installed upon the Land and the Building for Mortgagor's own use; (c) except as permitted under Section 4.04 below, such Collateral will be kept at the Building and will not be removed therefrom without the consent of the Mortgagee, may be affixed to the Building and will not be removed therefrom without the consent of the Mortgagee, and may be affixed to the Building but will not be affixed to any other real estate; (d) unless stated otherwise in this Mortgage, the only persons having any interest in the Collateral are the Mortgagor and the Mortgagee and no financing statement covering any such property and any proceeds hereof is on file in any public office except those securing the interest of the Mortgagee; (e) the remedies of the Mortgagee hereunder are cumulative and separate, and the exercise of any one or more of the remedies provided for herein or under the UCC may not be construed as a waiver of any of the other rights of the Mortgagee including having such Collateral deemed part of the realty upon any foreclosure thereof; (f) if notice to any party of the intended disposition of the Collateral is required by law in a particular instance, such notice will be deemed commercially reasonable if given at least ten days prior to such intended disposition and may be given by advertisement in a newspaper accepted for legal publications either separately or as part of a notice given to foreclose the real property or may be given by private notice if such parties are known to the 15 Mortgagee; (g) the filing of a financing statement pursuant to the UCC must never impair the stated intention of this Mortgage that all personal property and fixtures comprising the Collateral are and will be at all times and for all purposes and in all proceedings both legal or equitable regarded as part of the real property mortgaged hereunder irrespective of whether such item is physically attached to the real property or any such item is referred to or reflected in a financing statement; (h) the Mortgagor will on demand deliver all financing statements that may from time to time be required by the Mortgagee to establish and perfect the priority of the Mortgagee's security interest in the Collateral; and (i) the Mortgagor must give advance written notice of any proposed change in the Mortgagor's name, jurisdiction of organization, identity or structure and will execute and deliver to the Mortgagee prior to or concurrently with such change all additional financing statements that the Mortgagee may require to establish and perfect the priority of the Mortgagee's security interest. Section 4.04 Replacement or Sale of Collateral. (a) Subject to the provisions of this Section, if the Mortgagor in its sound discretion determines that any item subject to a security interest under this Mortgage has become inadequate, obsolete, worn out, unsuitable, undesirable or unnecessary for the operation of the Mortgaged Property, the Mortgagor may, at its expense, remove and dispose of it and substitute and install other items not necessarily having the same function if such removal and substitution does not impair the operating utility and unity of the Mortgaged Property, without first obtaining the consent of the Mortgagee; so long as the cost of replacement of any item of Collateral does not exceed $25,000. The Mortgagor may, at its expense, remove and dispose of an item and substitute and install other items not necessarily having the same function, only if: (a) such substituted items become a part of the Mortgaged Property and subject to the lien of this Mortgage and (b) either (i) the substituted items are already owned by the Mortgagor and not subject to any other lien or security interest, or (ii) the substituted items are new, in which case the Mortgagor may grant a purchase money security interest for the unpaid portion of the purchase price so long as the lien or security interest does not attach to any other part of the Mortgaged Property. Any amounts received or allowed the Mortgagor upon the sale or other disposition of the removed items of property must be applied first against the cost of acquisition and installation of the substituted items. Nothing herein contained may be construed to prevent any Tenant, subtenant, secured party, or occupant (other than the Mortgagor) from removing from the Land or Building trade fixtures, furniture and equipment installed by it and removable by same, or the subject of a security interest in its favor, on the condition, however, that the Tenant, subtenant or secured party must at its own cost and expense, repair any and all damages to the Mortgaged Property resulting from or caused by the removal thereof. (b) Mortgagee may sell the Collateral without giving any warranties as to the Collateral. Mortgagee may specifically disclaim any warranties of title or the like. This procedure will not be considered adversely to affect the commercial reasonableness of any sale of the Collateral. (c) If Mortgagee sells any of the Collateral upon credit, Mortgagor will be credited only with payments actually made by the purchaser, received by Mortgagee, and applied to the indebtedness of the purchaser. In the event the purchaser fails to pay for the Collateral, Mortgagee may resell the Collateral and Mortgagor shall be credited with the proceeds of the sale. 16 ARTICLE V APPLICATION OF INSURANCE AND CONDEMNATION AWARDS Section 5.01 Casualty, Repair, Proof of Loss. If any portion of the Mortgaged Property shall be damaged or destroyed (i.e. costing over $15,000 to repair) by any cause (a "Casualty"), Mortgagor shall: (a) give immediate notice to the Mortgagee; and (b) promptly commence and diligently pursue to completion (in accordance with plans and specifications approved by Mortgagee) the restoration, repair and rebuilding of the Mortgaged Property as nearly as possible to its value, condition and character immediately prior to the Casualty; and (c) if the Casualty is covered by insurance, immediately make proof of loss and collect all insurance proceeds, all such proceeds to be payable to Mortgagee or as Mortgagee shall direct. If an Event of Default shall be in existence, or if Mortgagor shall fail to provide notice to Mortgagee of filing proof of loss, or if Mortgagor shall not be diligently proceeding, in Mortgagee's reasonable opinion, to collect such insurance proceeds, then Mortgagee may, but is not obligated to, make proof of loss, and is authorized, but is not obligated, to settle any claim with respect thereto, and to collect the proceeds thereof. Mortgagor shall not accept any settlement of an insurance claim in excess of $25,000 without Mortgagee's prior written consent. Section5.02 Use of Insurance Proceeds. Mortgagee shall make thenet insurance proceeds received by it (after reimbursement of Mortgagee's out -of pocket costs of collecting and disbursing the same) available to Mortgagor to pay the cost of restoration, repair and rebuilding of the Mortgaged Property, subject to the following conditions: (a) There shall be no Event of Default in existence at the time of any disbursement of the insurance proceeds. (b) Mortgagee shall have determined, in its reasonable discretion, that the cost of restoration, repair and rebuilding is and will be equal to or less than the amount of insurance proceeds and other funds deposited by Mortgagor with Mortgagee. (c) Mortgagee shall have determined, in its reasonable discretion, that the restoration, repair and rebuilding can be completed within 18 months following the date of receipt of the insurance proceeds in accordance with plans and specifications approved by Mortgagee (such approval not to be unreasonably withheld), in accordance with codes and ordinances and in accordance with the terms, and within the time requirements in order to prevent termination of any Lease, and in any event not less than 6 months prior to the maturity date of the Note. (d) All funds shall be disbursed, at Mortgagee's option, in accordance with Mortgagee's customary disbursement procedures for construction loans. (e) The Casualty shall have occurred more than 12 months prior to the maturity date of the Note. 17 (f) Mortgagee shall have determined, in its reasonable discretion, that the fair market value of the Mortgaged Property following the Casualty and reconstruction will equal or exceed the fair market value of the Mortgaged Property on the date of this Mortgage. If any of these conditions shall not be satisfied, then Mortgagee shall have the right to use the insurance proceeds to prepay the Loan in accordance with the Note. If any insurance proceeds shall remain after (I) prepayment of the Loan in accordance with the Note or (ii) completion of the restoration, repair and rebuilding of the Mortgaged Property, they shall be disbursed to Mortgagor, or at the Mortgagee's discretion, used to prepay the Loan in accordance with the Note. Section 5.03 Condemnation. If any portion of the Mortgaged Property shall be taken, condemned or acquired pursuant to exercise of the power of eminent domain or threat thereof (a "Condemnation"), Mortgagor shall: (a) give immediate notice thereof to Mortgagee, and send a copy of each document received by Mortgagor in connection with the Condemnation to Mortgagee promptly after receipt; and (b) diligently pursue any negotiation and prosecute any proceeding in connection with the Condemnation at Mortgagor's expense. If an Event of Default shall be in existence, or if Mortgagor, in Mortgagee's reasonable opinion, shall not be diligently negotiating or prosecuting the claim, Mortgagee is authorized, but not required, to negotiate and prosecute the claim and appear at any hearing for itself and on behalf of Mortgagor and to compromise or settle all compensation for the Condemnation. Mortgagee shall not be liable to Mortgagor for any failure by Mortgagee to collect or to exercise diligence in collecting any such compensation. Mortgagor shall not compromise or settle any claim in excess of $25,000 resulting from the Condemnation without Mortgagee's prior written consent. All Awards shall be paid to Mortgagee. Section 5.04 Use of Condemnation Proceeds. Mortgagee shall make the net proceeds of any Condemnation received by it (after reimbursement of Mortgagee's out-of-pocket costs of collecting and disbursing the same) available to Mortgagor for restoration, repair and rebuilding ofthe Mortgaged Property, subject to the following conditions: (a) There shall be no Event of Default in existence at the time of any disbursement of the condemnation proceeds. (b) Mortgagee shall have determined, in its reasonable discretion, that the cost of restoration, repair and rebuilding is and will be equal to or less than the amount of condemnation proceeds and other funds deposited by Mortgagor with Mortgagee. (c) Mortgagee shall have determined, in its reasonable discretion, that the restoration, repair and rebuilding can be completed within 18 months following the date of receipt of the Award in accordance with plans and specifications approved by Mortgagee (such approval not to be unreasonably withheld), in accordance with codes and ordinances and in accordance with the terms, and within the time requirements in order to prevent termination of any Lease, and in any event not less than six (6) months prior to the maturity date of the Note. IN (d) All funds shall be disbursed, at Mortgagee's option, in accordance with Mortgagee's customary disbursement procedures for construction loans. (e) The Condemnation shall have occurred more than twelve (12) months prior to the maturity date of the Note. (f) Mortgagee shall have determined, in its reasonable discretion, that the fair market value of the Mortgaged Property following the Condemnation and reconstruction will equal or exceed the fair market value of the Mortgaged Property on the date of this Mortgage. If any of these conditions shall not be satisfied, then Mortgagee shall have the right to use the condemnation proceeds to prepay the Loan in accordance with the Note. If any condemnation proceeds shall remain after (1) prepayment of the Loan in accordance with the Note or (ii) completion of the restoration, repair and rebuilding of the Mortgaged Property, they shall be disbursed to Mortgagor, or at Mortgagee's discretion, used to prepay the Loan in accordance with the Note. ARTICLE VI ASSIGNMENT OF RENTS AND LEASES Section 6.01 Assignment of Rents and Leases. (a) The Mortgagor agrees that upon or any time after (i) the occurrence of an "Event of Default" as defined in Article 6 of the Loan Agreement; or (ii) the first publication of notice of sale for the foreclosure of this Mortgage pursuant to Minnesota Statutes, Chapter 580; or (iii) the commencement of an action to foreclose this Mortgage pursuant to Minnesota Statutes, Chapter 581; or (iv) the commencement of the period of redemption, if any, after foreclosure of this Mortgage, then in any such event the Mortgagee shall, upon application to the District Court in the county where the Mortgaged Property is located, by an action separate from the foreclosure under Chapter 580; in the foreclosure action under Chapter 581; or by independent action (it being understood and agreed that the existence of a foreclosure proceeding under Chapter 580 or a foreclosure action under Chapter 581 is not a prerequisite to any action for a receiver hereunder), be entitled to the appointment of a receiver for the Rents, upon a showing that an Event of Default has occurred and is continuing, including, without limitation, any violation of a covenant relating to any of the following: (1) payment when due of prior or current real estate taxes or special assessments with respect to the Mortgaged Property; (2) payment when due of premiums for insurance of the types required by the Loan Agreement; or (3) keeping of the covenants required of a lessor or licensor pursuant to Minnesota Statutes, Section 50413.161, Subdivision 1; or (4) repayment of Tenant security deposits, with interest thereon, as required by Minnesota Statutes, Section 50413.178, if applicable. 19 The Mortgagee shall be entitled to the appointment of a receiver without regard to waste, adequacy of the security or solvency of the Mortgagor. The District Court shall determine the amount of the bond to be posted by the receiver. (b) The receiver, who, at the sole discretion of Mortgagee, may be an experienced property manager, shall collect (until the indebtedness secured hereby is paid in full and, in the case of a foreclosure sale, during the entire redemption period, if any) the Rents, manage the Mortgaged Property so as to prevent waste, execute Leases without or beyond the period of the receivership, if approved by the District Court, and apply all rents, profits and other income collected by the receiver in the following order: (1) payment of the reasonable fees of the receiver; (2) the items listed in clauses (1) through (4) in paragraph (a) above (to the extent applicable) in the priority as numbered; (3) expenses for normal maintenance, operation and management of the Mortgaged Property; and (4) the balance to the Mortgagee (i) to be credited, before commencement of foreclosure, against the indebtedness secured hereby, in such order as the Mortgagee may elect, or (ii) to be credited, after commencement of foreclosure, to the amount required to be paid to effect a reinstatement prior to foreclosure sale, or (iii) to be credited, after a foreclosure sale, to any deficiency and then to the amount required to be paid to effect a redemption, pursuant to Minnesota Statutes, Sections 580.30, 580.23 and 581.10, or their successors, as the case may be, with any excess to be applied as provided in the Loan Agreement; provided, however, that if this Mortgage is not reinstated nor the Mortgaged Property redeemed, as and during the times provided by said Sections 580.30, 580.23 or 581.10, or their successors, the entire amount received pursuant hereto, after deducting therefrom the amounts applied by the Mortgagee to any deficiency, shall be the property of the purchaser of the Mortgaged Property at the foreclosure sale, together with all or any part of the Mortgaged Property acquired through foreclosure. (c) The receiver shall file periodic accountings as the District Court determines are necessary and a final accounting at the time of the receiver's discharge. The Mortgagee shall have the right, at any time and without limitation, as provided in Minnesota Statutes, Section 582.03, to advance money to the receiver to pay any part or all of the expenses which the receiver should otherwise pay if cash were available from the Mortgaged Property, and sums so advanced, with interest at the Default Rate from the date advanced, shall be apart of the sum required to be paid to redeem from any foreclosure sale. Said sums shall be proved by the affidavit of the Mortgagee, its agent or attorney, describing the expenses for which the same were advanced and describing the Mortgaged Property, which must be filed for record in the office where this Mortgage is recorded, and a copy thereof shall be furnished to the sheriff and the receiver at least ten (10) days before the expiration of any period of redemption. (d) Upon the happening of any of the events set forth above, or during any period of redemption after foreclosure sale and prior to the appointment of a receiver as hereinbefore provided, the Mortgagee shall have the right to collect the Rents and apply the same in the manner hereinbefore provided with respect to a receiver. The rights set forth in this Section shall be binding upon the occupiers of the Mortgaged 20 Property from the date of filing by the Mortgagee in the office in the county where this Mortgage is recorded, of a notice of default in the terms and conditions of this Mortgage and service of a copy of the notice upon the occupiers of the Mortgaged Property. Enforcement hereof shall not cause the Mortgagee to be deemed a mortgagee in possession, unless it elects in writing to be so deemed. For the purpose aforesaid, Mortgagee may enter and take possession of the Mortgaged Property and manage and operate the same and take any action which, in the Mortgagee's judgment, is necessary or proper to conserve the value of the Mortgaged Property. (e) The costs and expenses (including any receiver's fees, attorneys' fees, costs and agent's compensation) incurred by the Mortgagee pursuant to the powers herein contained shall be deemed to be immediately due and payable by the Mortgagor to the Mortgagee; shall be secured hereby; and shall bear interest from the date paid at the Default Rate. (f) The Mortgagee shall not be liable to account to the Mortgagor for any action taken pursuant hereto other than to account for any Rents actually received by the Mortgagee. ARTICLE VII RIGHTS OF THE MORTGAGEE Section 7.01 Right to Cure Default. If the Mortgagor fails to comply with any of the covenants or obligations of this Mortgage, the Mortgagee may, but is not obligated to, after telephonic notice or Electronic Notice to the Mortgagor and without waiving or releasing the Mortgagor from any obligation in this Mortgage contained, remedy such failure, and the Mortgagor agrees to repay upon demand all sums incurred by the Mortgagee in remedying any such failure, together with interest at the Default Rate. All such sums, together with interest as aforesaid, will become indebtedness secured by this Mortgage, but no such advance may be deemed to relieve the Mortgagor from any failure hereunder. Included in this right to remedy a default, the Mortgagor authorizes and empowers the Mortgagee, at its option, to effect such insurance, to pay unpaid premiums, to pay any Impositions, to cancel and discharge any Levies and Liens, and to enter upon and authorize others to enter upon any and all of the Mortgaged Property to perform any covenant, condition, or term which the Mortgagor fails to perform, meet or comply with or for any other purpose in connection with the protection or presentation of the Mortgagee's security, without becoming thereby liable to the Mortgagor or any person in possession holding under the Mortgagor. Section 7.02 No Claim Against the Mortgagee. Nothing contained in this Mortgage constitutes any consent or request by the Mortgagee, express or implied, for the performance of any labor or services or for the furnishing of any materials or other property in respect of the Mortgaged Property or any part thereof, nor as giving the Mortgagor or any party in interest with the Mortgagor any right, power or authority to contract for or permit the performance of any labor or services or the furnishing of any materials or other property in such fashion as would create any personal liability against the Mortgagee in respect thereof or would permit the making of any claim that any lien based on the performance of such labor or services or the furnishing of any such materials or other property is prior to the lien of this Mortgage. Section 7.03 Inspection. The Mortgagor will permit the Mortgagee's authorized representatives to enter the Land and the Buildings at all reasonable times for the purpose of inspecting the same; provided the Mortgagee has no duty to make such inspections and does not incur any liability or obligation for making or not making any such inspections. 21 Section 7.04 Waivers Releases, Resort to Other Security. Etc. Without affecting the liability of any party liable under any of the Security Documents or performance of any obligation contained herein, and without affecting the rights of the Mortgagee with respect to any security not expressly released in writing, the Mortgagee may, at any time, and without notice to or the consent of the Mortgagor or any party in interest to the Mortgaged Property or any of the Security Documents: (a) release any person liable under any of the Security Documents from performance of any obligation therein; (b) make any agreement extending the time or otherwise altering the terms of the Security Documents or modifying or waiving any obligation, or subordinating, modifying or otherwise dealing with the lien or charge hereof; (c) accept any additional security; (d) subject to the provisions of Section 9.01 of this Mortgage, release or otherwise deal with any property, real or personal, including any or all of the Mortgaged Property; or (e) resort to any security agreements, pledges, contracts or guarantee, or other security, and exhaust any one or more of said securities and the security hereunder, either concurrently or independently and in such order as it may determine. Section 7.05 Rights Cumulative. Each right, power or remedy herein conferred upon the Mortgagee is cumulative and in addition to every other right, power or remedy, express or implied, now or hereafter arising, available to the Mortgagee, at law or in equity, or under the UCC, or under any other agreement, and each and every right, power and remedy herein set forth or otherwise so existing may be exercised from time to time as often and in such order as may be deemed expedient by the Mortgagee and will not be a waiver of the right to exercise at any time thereafter any other right, power or remedy. No delay or omission by the Mortgagee in the exercise of any right, power or remedy arising hereunder or arising otherwise will impair any such right, power or remedy or the right of the Mortgagee to resort thereto at a later date or be construed to be a waiver of any default under this Mortgage. ARTICLE VIII EVENTS OF DEFAULT AND Section 8.01 Events of Default. An Event ofDefault, as defined in the Loan Agreement constitutes an Event of Default under this Mortgage. Section 8.02 Remedies. Upon the occurrence of an Event of Default described in Section 6.01 C. of the Loan Agreement, all of the indebtedness secured hereby will be accelerated and become immediately due and payable without notice or declaration to Mortgagor. Upon the occurrence of one or more other Events of Default, all of the indebtedness secured hereby, at the option of Mortgagee, may be accelerated and become immediately due and payable upon notice to Mortgagor. In either event, indebtedness secured hereby is due and payable without presentment, demand or further notice of any kind. Mortgagee has the right to proceed to protect and enforce its rights by one or more of the following remedies: (a) Mortgagee shall have the right to bring suit either for damages, for specific performance of any agreement contained in any Loan Document, for the foreclosure of this Mortgage, or for the enforcement of any other appropriate legal or equitable remedy. (b) Mortgagee shall have the right to sell the Mortgaged Property at public auction and convey the same to the purchaser in fee simple, as provided by law, and Mortgagor will remain liable for any deficiency. Said sale may be as one tract or otherwise, at the sole option of Mortgagee. In the event of any sale of the Mortgaged Property pursuant to any judgment or decree of any court or at public auction or otherwise in connection with the enforcement of any of the terms of this 22 Mortgage, Mortgagee, its successors or assigns, may become the purchaser, and for the purpose of making settlement for or payment of the purchase price, shall be entitled to deliver over and use the Note and any claims for interest accrued and unpaid thereon, together with all other sums, with interest, advanced or secured hereby and unpaid hereunder, in order that there may be credited as paid on the purchase price the total amount of the Note then due, including principal and interest on the Note and all other sums, with interest, advanced or secured hereby and unpaid hereunder or under any of the other Security Documents. (c) Mortgagee has the right to obtain the appointment of a receiver at any time after the occurrence of an Event of Default. Mortgagee may apply for the appointment of a receiver to the district court for the county where the Mortgaged Property or anypart thereof is located, by an action separate from any foreclosure of this Mortgage pursuant to Minnesota Statutes Chapter 580 or pursuant to Minnesota Statutes Chapter 581, or as apart of the foreclosure action under said Chapter 581 (it being agreed that the existence of a foreclosure pursuant to said Chapter 580 or a foreclosure action pursuant to said Chapter 581 is not a prerequisite to any action for a receiver hereunder). Mortgagee is entitled to the appointment of a receiver without regard to waste, adequacy of the security or solvency of Mortgagor. The receiver, who shall be an experienced property manager, shall collect (until the Note is fully paid and satisfied and, in the case of a foreclosure sale, during the entire redemption period) the Rents, and shall manage the Mortgaged Property, execute Leases within or beyond the period of the receivership if approved by the court and apply all rents, profits and other income collected by him in the following order: (i) to the payment of all reasonable fees of the receiver, if any, approved by the court; (ii) to the repayment ofTenant security deposits, with interest thereon, as required by Minnesota Statutes, Section 504B.178; (iii) to the payment when due of delinquent or current real estate taxes or special assessments with respect to the Mortgaged Property, or the periodic escrow for the payment of the same; (iv) to the payment when due of premiums for insurance of the type required by this Mortgage, or the periodic escrow for the payment of the same; (v) to the payment forthe keeping of the covenants required of a lessor or licensor pursuant to Minnesota Statutes, Section 504B.161; (vi) to the payment of all expenses for non -nal maintenance of the Mortgaged Property; (vii) to the payment of principal and interest on any prior mortgages on the Mortgaged Property; (viii) to the payment of any other prior liens or encumbrances; 23 (ix) to the payment of principal and interest on the Note; (x) to the payment ofany other liens or encumbrances on the Mortgaged Property; and (xi) the balance to Mortgagee (a) if received prior to the commencement of a foreclosure, to be applied to the Note, in such order as Mortgagee may elect and (b) if received after the commencement of a foreclosure, to be applied to the amount required to be paid to effect a reinstatement prior to foreclosure sale, or, after a foreclosure sale to any deficiency and thereafter to the amount required to be paid to effect a redemption, all pursuant to Minnesota Statutes, Sections 580.30, 580.23 and 581.10, with any excess to be paid to Mortgagor. Provided, that if this Mortgage is not reinstated nor the Mortgaged Property redeemed as provided by said Sections 580.30, 580.23 or 581.10, the entire amount paid to Mortgagee pursuant hereto shall be the property of Mortgagee togetherwith all or any part of the Mortgaged Property acquired through foreclosure. Mortgagee shall have the right, at any time and without limitation, as provided in Minnesota Statutes, Section 582.03, to advance money to the receiver to pay any part or all of the items which the receiver should otherwise pay if cash were available from the Mortgaged Property and sums so advanced, with interest at the Default Rate, shall be secured hereby, or if advanced during the period of redemption shall be part of the sum required to be paid to redeem from the sale. (d) Mortgagee has the right to collect the rents from the Mortgaged Property and apply the same in the manner hereinbefore provided with respect to a receiver. For that purpose, Mortgagee may enter and take possession of the Mortgaged Property and manage and operate the same and take any action which, in Mortgagee's judgment, is necessary or proper to collect the Rents and to conserve the value of the Mortgaged Property. Mortgagee may also take possession of, and for these purposes use, any and all of the Collateral. The expense (including any receiver's fees, attorneys' fees, costs and agent's compensation) incurred pursuant to the powers herein contained shall be secured by this Mortgage. Mortgagee shall not be liable to account to Mortgagor for any action taken pursuant hereto other than to account for any Rents actually received by Mortgagee. Enforcement hereof shall not cause Mortgagee to be deemed a mortgagee in possession unless Mortgagee elects in writing to be a mortgagee in possession. (e) Mortgagee has the right to enter and take possession of the Mortgaged Property and manage and operate the same in conformity with all applicable laws and take any action which, in Mortgagee's judgment, is necessary or proper to conserve the value of the Mortgaged Property. (f) Mortgagee has all of the rights and remedies provided in the Code including the right to proceed under the Code provisions governing default as to any Collateral separately from the real estate included within the Mortgaged Property, or to proceed as to all of the Mortgaged Property in accordance with its rights and remedies in respect of said real estate. If Mortgagee should elect to proceed separately as to such Collateral, Mortgagor agrees to make such Collateral available to Mortgagee at a place or places acceptable to Mortgagee, and if any notification of intended disposition of any of such Collateral is required by law, such notification shall be deemed reasonably 24 and properly given if given at least ten (10) days before such'disposition in the manner hereinafter provided. (g) Mortgagee has the right to file proof of claim and other documents as may be necessary or advisable in order to have its claims allowed in any receivership, insolvency, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceedings affecting Mortgagor, its creditors or its property, for the entire amount due and payable by Mortgagor in respect of the Note at the date of the institution of such proceedings, and for any additional amounts which may become due and payable by Mortgagor after such date. Section 8.03 Right to Discontinue Proceeding3 Restoration of Position. In the event the Mortgagee has proceeded to invoke any right, remedy or recourse permitted under this Mortgage and thereafter elects to discontinue or abandon the same for any reason, the Mortgagee has the unqualified right to do so and in such event the Mortgagor and the Mortgagee must be restored to their former positions with respect to the indebtedness secured hereby and this Mortgage, the Mortgaged Property and all the rights, remedies and recourse of the Mortgagee will continue as if the same had not been invoked. Section 8.04 Waiver of Marshaling. Mortgagor hereby waives its right to require the marshaling of its assets in the event of Mortgagor's insolvency or bankruptcy. Mortgagor, for itself and on behalf of all persons, parties and entities which may claim under Mortgagor, hereby waives all requirements of law relating to the marshaling of assets, if any, which would be applicable in connection with the enforcement by Mortgagee of its remedies for an Event of Default hereunder, absent this waiver. Mortgagee shall not be required to sell or realize upon any portion of the Mortgaged Property before selling or realizing upon any other portion thereof. Section 8.05 Expenses of Exercising Rights Powers and Remedies. The reasonable expenses (including any receiver's fees, attorneys' fees, appraisers' fees, environmental engineers' and/or consultants' fees, costs incurred for documentary and expert evidence, stenographers' charges, publication costs, costs (which may be estimated as to items to be expended after entry of the decree of foreclosure) of procuring all abstracts of title, continuations of abstracts of title, title searches and examinations, title insurance policies and commitments and extensions therefor, Torrens duplicate certificates of title, UCC and chattel lien searches, and similar data and assurances with respect to title as Mortgagee may deem reasonably necessary either to prosecute any foreclosure action or to evidence to bidders at any sale which may be had pursuant to any foreclosure decree the true condition of the title to or the value of the Mortgaged Property, and agent's compensation) incurred by Mortgagee after the occurrence of any Event of Default and/or in pursuing the rights, powers and remedies contained in this Mortgage shall be immediately due and payable by Mortgagor, with interest thereon from the date incurred at the Default Rate, and shall be added to the indebtedness secured by this Mortgage. Section 8.06 Application of Monies. Notwithstanding any provision of this Mortgage to the contrary, monies received or collected by Mortgagee pursuant to an Event of Default, whether through appointment of a receiver, foreclosure, or replevin, or in instances where there is a potential for insurance or condemnation proceeds to be realized, shall be applied in accordance with the priorities set forth in Section 6.07 of the Loan Agreement. 25 ARTICLE IX MISCELLANEOUS Section 9.01 Release and Partial Release of Mortgage. A. When all the obligations of the Mortgagor have been performed, including the making of all payments due under the Loan Agreement, this Mortgage and all assignments herein contained will be void and this Mortgage will be released by the Mortgagee at the cost and expense of the Mortgagor, otherwise this Mortgage will remain in full force and effect. Mortgagee, in its sole discretion is not prohibited from releasing portions of the Mortgaged Property from the lien of this Mortgage from time to time. B. Mortgagor and Mortgagee acknowledge and agree that each separate parcel ofthe Mortgaged Property is operated by Mortgagee as a unique and separate program. Mortgagee agrees to release a separate parcel (the entire amount of real property located at a single address) from the lien of this Mortgage so long as no Event of Default exists or is continuing, upon payment by Mortgagor to Mortgagee of the amounts set forth below, which amounts shall be applied as a prepayment on, and in accordance with, the terms of the Note: Order of Release % of Then -Outstanding Principal Balance of Note to be Paid to Mortgagee: First Parcel 20% Second Parcel 25% Third Parcel 33% Fourth Parcel 50% Section 9.02 Choice of Law. This Mortgage and the other Security Documents shall be construed and enforceable in accordance with, and be governed by, the laws of the State, without giving effect to conflict of laws or principles thereof. Whenever possible, each provision of this Mortgage and any other statement, instrument or transaction contemplated hereby or relating hereto, shall be interpreted in such manner as to be effective and valid under such applicable law, but, if any provision of this Mortgage or any other statement, instrument or transaction contemplated hereby or relating hereto shall be held to be prohibited or invalid under such applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Mortgage or any other statement, instrument or transaction contemplated hereby or relating hereto. Section9.03 ChangesofOwnership. Subject to the requirements of Section 2.14 of this Mortgage and 4.02 of the Loan Agreement, in the event that the ownership of the Mortgaged Property becomes vested in a person or persons other than the Mortgagor, the Mortgagee may continue to deal with the Mortgagor without any obligation to deal with such successor or successors in interest with reference to this Mortgage and the Loan Agreement until notified of such vesting. Upon such notification, the Mortgagee may thereafter deal with such successor in place of the Mortgagor without any obligation to thereafter deal with the Mortgagor and without waiving any liability of the Mortgagor hereunder or under the Loan Agreement. Kri The Mortgagor must give immediate written notice to the Mortgagee of any conveyance, transfer or change of ownership of the Mortgaged Property but nothing in this Section contained constitutes the consent of the Mortgagee to any such conveyance, transfer or change or negate any provisions elsewhere in this Mortgage giving the Mortgagee the right to declare a default under this Mortgage. Section 9.04 Binding Effect on Successors and Assigns. This Mortgage and each and every covenant, agreement and other provision hereof is binding upon the Mortgagor and its successors and assigns, including, without limitation, each and every record owner of the Mortgaged Property or any other person having an interest therein; it will run with the Land and inure to the benefit of the Mortgagee and its successors and assigns. Section 9.05 Unenforceability of Certain Clauses. The unenforceability of or invalidity of any provisions hereof will not render any other provision or provisions herein contained unenforceable or invalid. Section 9.06 Captions and Headings. The captions and headings of the various sections of this Mortgage are for convenience only and are not to be construed as confining or limiting in any, way the scope or intent oftheprovisions hereof Whenever the context requires or permits, the singular includes the plural, the plural includes the singular and the masculine, feminine and neuter are freely interchangeable. Section 9.07 Notices. All notices, certificates and communications hereunder are properly and sufficiently given when delivered in person, sent by commercial overnight delivery service or by Electronic Notice to an officer of the party to whom directed or when mailed to such party by regular mail, postage prepaid, with proper address as indicated in this Section. All notices, certificates and communications will be deemed given 3 days after the date of deposit in the mail or upon receipt of a transmission confirmation in the case of Electronic Notice. The Mortgagor, the Lender and the Issuer may, by written notice or Electronic Notice given by each other to the others, designate any other address or addresses to which notices, certificates or other communications or matters to them must be sent when required as contemplated by this Mortgage. Until otherwise provided by the respective parties, all notices, certificates and communications to each of them must be addressed as follows: To the Mortgagor: People Incorporated 317 York Avenue St. Paul, Minnesota 55101 (telephone) (651) 774-0011 (fax) (651) 774-0606 To the Mortgagee: St. Anthony Park State Bank 2265 Como Avenue St. Paul, Minnesota 55108-1797 (telephone) (651) 523-7867 (fax) (651) 523-7885 Section 9.08 Limitation ofthe Issuer's Liability. No covenants, agreements or provisions contained in this Mortgage nor any agreement, covenant or undertaking by the Issuer contained in any document executed by the Issuer in connection with the Mortgaged Property or the issuance, sale and delivery of the 27 Note will give rise to any pecuniary liability of the Issuer or a charge against its general credit or taxing powers within the meaning of any constitutional or statutory provision whatsoever, or obligate the Issuer financially in any way (a) except to the extent of its interest in the Mortgaged Property and the application of revenues therefrom and (b) other than making the proceeds of the Note available to the Mortgagor in accordance with the terms of the Loan Agreement. No failure of the Issuer to comply with any term, condition, covenant or agreement herein will subject the Issuer to liability for any claim for damages, costs or other financial or pecuniary charge except to the extent that the same can be paid or recovered from the Mortgaged Property or revenues therefrom or proceeds of the Note. No execution on any claim, demand, cause of action or judgment may be levied upon or collected from the general credit, funds or taxing powers of the Issuer. Section 9.09 Supplements or Amendments to this Mortgage. This Mortgage may not be supplemented or amended without the written consent of the Mortgagee and the Mortgagor. Section 9.10 Assignability; Participation Interests. (a) Mortgagee shall have the right to assign this Mortgage, in whole or in part, or sell participation interests herein, to any person obtaining an interest in the indebtedness secured hereby. Mortgagee will promptly provide Mortgagor of notice of such assignment. (b) The Mortgagor acknowledges that the Mortgagee may and will have the right to sell participation interests in the Note. In the event any of the Mortgagee's participants require any additional information, the Mortgagor will use all reasonable efforts to obtain and deliver such information. Section 9.11 Waiver of Jury Trial. Mortgagor and Mortgagee each irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or relating to this Mortgage or any of the other Security Documents or the transactions contemplated hereby or thereby. Section 9.12 Effect. This Mortgage is in addition and not in substitution for any other guarantees, covenants, obligations or other rights now or hereafter held by Mortgagee from any other person or entity in connection with the Note. IN WITNESS WHEREOF, the Mortgagor has caused these presents to be executed as of the date first above written. PEOPLE INCORPO By rVv-�-F 7 : � Executive Director NE STATE OF MINNESOTA ) ) ss. COUNTY OF HENNEPIN ) The foregoing instrument was acknowledged before me this AL— day of 2004, by 7—y r� %u,,Aµ.1 , the Executive Director of People Incorporated, a Minnesota nonprofit corporation, on behalf of the corporation. `A ^w'.. STEVEN R. FENICN Notary Public r Notary Public Minnesota My Commission EVIres Jan. 31, 2005 29 EXHIBIT A Legal Description Parcel 1: Lot 2, Block 3, Heather Ridge 2"d Addition, Washington County, Minnesota (Abstract); and Parcel 2: Lot 10, Block 4, Donnay's Brookdale Estates 5t° Addition, Hennepin County, Minnesota (Abstract); and Parcel 3: Lot 7, Block 2, Winnetka Hills 2nd Addition Hennepin County, Minnesota. (Torrens Certificate Number 1067085); and Parcel 4: Lot 4, Block 5, Meadow Lane Addition, Hennepin County, Minnesota. (Torrens Certificate Number 1078621); and Parcel 5: Lot 4, Block 1, Londin Hills, Ramsey County, Minnesota (Abstract). EXHIBIT B Permitted Encumbrances means, as of any particular time: (a) liens for ad valorem taxes and special assessments not then delinquent or, if then delinquent, being contested in accordance with Section 2.06 of this Mortgage; (b) utility, access, and other easements and rights-of-way, restrictions, and exceptions affecting the Land but which do not interfere with reasonable use or improvement of the Land; (c) such minor defects, irregularities, encumbrances, easements, rights-of-way, and clouds on title as normally exist with respect to property similar in character to the Land and as do not in the aggregate, in the opinion of Mortgagee's counsel, materially impair the property affected thereby for the purposes for which it was acquired or is held by the Mortgagor; (d) building and zoning laws; (e) this Mortgage; (f) any purchase money security interest permitted by Section 4.04 of this Mortgage; and (g) any exceptions listed in any policy of title insurance applicable to the Mortgaged Property and approved by the Lender in writing. M:IdxA1557&WOW1MOBIGN6<53.WFD JOINT POWERS AGREEMENT People Incorporated Project This JOINT POWERS AGREEMENT dated as of August 24, 2004 (this "Agreement') is being entered into among: the City of New Hope, Hennepin County, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota (the "Issuer"); ii. the City of Oakdale, Washington County, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota ("Oakdale"); iii. the City of Richfield, Hennepin County, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota ("Richfield"); iv. the Housing and Redevelopment Authority of the City of St. Paul, Minnesota, a public body corporate and politic, organized and existing under the laws of the State of Minnesota ("St. Paid"); and the City of Brooklyn Park, Hennepin County, a municipal corporation and political subdivision organized and existing under the laws of the State of Minnesota (`Brooklyn Park"). (The Issuer, Oakdale, Richfield, St. Paul and Brooklyn Park are collectively referred to herein as the "Parties.") Recitals. a. This Agreement is being entered into pursuant to Minnesota Statutes, Sections 471.59 and 471.656 (collectively, the "Act'). b. People Incorporated, a Minnesota nonprofit corporation and organization described in Section 501(c)(3) ofthe Internal Revenue Code of 1986, as amended and an organization that is primarily engaged in activities for mentally or physically disabled persons and providing social services, such as providing assistance to the poor, distressed, or underprivileged (the `Borrower"), wishes to finance the costs of a project (the "Project") described in Exhibit A attached hereto, all on behalf of and owned and operated by the Borrower. C. The Borrower proposes to finance the Project through an issuance of revenue obligations pursuant to Minnesota Statutes, Sections 469.152 through 469.165 (the "Municipal Industrial Development Act'). d. Portions of the Project are located within the jurisdictional limits of each of the Parties. e. The Borrower has requested that the Parties cooperate, through this Agreement, to finance the Project through the issuance of a revenue note in an amount not to exceed $713,000 pursuant to the Municipal Industrial Development Act (the "Obligations"). f The Borrower has requested that the Issuer issue the Obligations for the Project. 2. Findings. a. It is in the best interests of the Parties to cooperate with and facilitate the issuance of the Obligations by the Issuer as requested by the Borrower. b. The Issuer will receive substantial benefit from the Project which will provide services and facilities for mentally or physically disabled persons, including health care facilities, within the meaning of the Municipal Industrial Development Act, accessible and available on an equal basis to residents of each of the Parties. Statement of Purpose and Authority. This Agreement is entered into for the purpose of facilitating the issuance of the Obligations by the Issuer pursuant to the Municipal hidustrial Development Act to finance the Project. 4. Authorizations. a. Oakdale authorizes the Issuer to issue the portion of the Obligations allocable to that part of the Project located in Oakdale on its behalf in conformance with the terms and conditions set forth herein. Richfield authorizes the Issuer to issue the portion of the Obligations allocable to that part of the Proj ect located in Richfield on its behalf in conformance with the terms and conditions set forth herein. C. St. Paul authorizes the Issuer to issue the portion of the Obligations allocable to that part of the Proj ect located in St. Paul on its behalf in conformance with the terms and conditions set forth herein. d. Brooklyn Park authorizes the Issuer to issue the portion of the Obligations allocable to that part of the Project located in Brooklyn Park on its behalf in conformance with the terms and conditions set forth herein. C. The Issuer is authorized: i. to exercise the powers under the Act and the Municipal hidustrial Development Act by adopting, approving and executing such resolutions, documents and agreements as are necessary or convenient to authorize, issue and sell the Obligations and such other resolutions, documents and agreements are necessary or required in connection with the issuance of the Obligations and to give effect to or carry out the provisions 2 of this Agreement and the documents under which the Obligations are issued and/or secured and ii. to take all actions necessary or convenient in connection therewith and permitted by the Act and the Municipal Industrial Development Act. Aexeements. Each of the Parties will adopt a resolution (i) evidencing its intent to undertake the portion of the Project located within its jurisdictional boundaries, including a recital of the benefits to such Party from issuance of the Obligations to finance the portion of the Project located within its jurisdictional boundaries and (ii) authorizing the execution, delivery and performance of this Agreement. 6. Special Limited Obligations. The Obligations shall be special, limited obligations of the Issuer and shall not be payable from nor charged against any funds of any of the Parties, nor shall any of the Parties be subject to any liability thereon, nor shall any holder of the Obligations ever have the right to compel any exercise of the taxing power of any of the Parties to pay the Obligations or the interest thereon, nor to enforce payment against any property of any of the Parties, nor shall the Obligations constitute a charge, lien or encumbrance, legal or equitable, upon any property of any of the Parties, nor shall the Obligations constitute a debt of any of the Parties within the meaning of any constitutional or statutory limitation. Bank Qualification. The entire amount of the Obligations will be designated by the Issuer as "qualified tax-exempt obligations" under Section 265(b)(3) of the Internal Revenue Code of 1986, as amended (the "Code"). Oakdale, Richfield, St. Paul and Brooklyn Park have not made any allocation under Section 265 with respect to the Issuer or the Obligations. 8. Term. This Agreement shall terminate upon the earlier of: a. defeasance of the Obligations; b. final maturity and payment of the Obligations; or c. payment in full of the Obligations prior to their final maturity. 9. Distribution of Assets. Upon termination of this Agreement, any property acquired pursuant to this Agreement and any surplus moneys shall be distributed: first, according to the documents entered into by the Issuer in connection with its issuance of the Obligations, second according to the Municipal Industrial Development Act and third, to the Issuer. 10. Amendments. This Agreement may not be amended while any portion of the Obligations remains outstanding, unless such amendment has been requested by the Borrower, the Parties agree to such amendment in writing, and the Issuer has received the opinion of nationally -recognized bond counsel that such amendment will not adversely affect the tax-exempt status of the Obligations. 11. Counterparts. This Agreement may be executed in counterparts, each of which will be an original, but which together will constitute one and the same instrument. IN WITNESS WHEREOF, the Parties have caused their names to be signed by their respective officers thereunto duly authorized, as of the day and year first above written. CITY OF NEW HOPE, MINNESOTA Mayos C By City Manager 4 (Signature page to Joint Powers Agreement - People Incorporated Project) CITY OF OAKDALE, MINNESOTA I (Signature page to Joint Powers Agreement - People Incorporated Project) M. dxsV557610 0MWGMIGL2622. WPO M CITY OF RICHFIELD, MINNESOYA By%G�% (Signature page to Joint Powers Agreement - People Incorporated Project) HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF ST. PAUL, MINNESOTA By ir 1, J , Chair By4�G(� l�CtiLL Executive Director "epartment of Planning & Economic De elopment ByUO2t�L Director, Office of Financial Services The Housing and Redevelopment Authority of the City of St. Paul, Minnesota (the "Authority") has requested my approval of its authorization of the issuance of the Note described above by the City of New Hope, Minnesota. In support of the Authority's request, I have been presented with the following: (i) a copy of the publisher's affidavit evidencing publication of the notice of public hearing held on August 11, 2004, regarding the Note and the Project, (ii) a copy of the minutes of said hearing, and (iii) a copy of the resolution of the Authority adopted August 11, 2004, authorizing the issuance and delivery of the Note by the City of New Hope, Minnesota. Based upon the information and representations noted above, I hereby approve the authorization by the Authority of the issuance of the Note by the City of New Hope, Minnesota in the aggregate amount of not to exceed $771,000. n 7 The Housing and Redevelopment Authority of the City of Saint Paul, Minnesota (the Authority) has requested my approval of its authorization of the issuance of the Note described above by the City of New Hope, Minnesota. In support of the Authority's request, I have been presented with the following: (i) a copy of the publisher's affidavit evidencing publication of the notice of public hearing held on August 11, 2004, regarding the Note and the Project, (ii) a copy of the minutes of said hearing, and (iii) a copy of the resolution of the Authority adopted August 11, 2004, authorizing the issuance and delivery of the Note by the City of New Hope, Minnesota. Based upon the information and representations noted above, I hereby approve the authorization by the Authority of the issuance of the Note by the City of New Hope, Minnesota in the aggregate amount of not to exceed $771,000. CITY OF SAINT PAUL, MINNESOTA am 7—A (Signature page to Joint Powers Agreement - People Incorporated Project) CITY OF BROOKLYN PARK, MINNESOTA City Clerk EXHIBIT A PROJECT DESCRIPTION The project will consist of the refinancing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing: Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 7483 46th St. N. 4 level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car 7708 45th % Av. N. attached, rambler New Hope, MN Upton House 3 BR upper level, egress window 7720 Upton Av. S. & 1 addl BR added LL, rambler, Richfield, MN 2.25 bath, 2 car detached Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 4 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN Af. Idocv11559610000001AGAiIGN5481. WPD UCC FINANCING STATEMENT NAME & PHONE OF CONTACT AT FILER (optional) SEND ACKNOWLEDGMENT TO: (Name and Address) DA FRYBERGER BUCHANAN SMITH 302 West Superior Street 700 Lonsdale Building DULUTH MN 55802 DEBTOR'S EXACT FULL LEGAL NAME ORGANIZATION'S NAME NEW HOPE, CITY OF Mailing address 4401 XYLON AVENUE NORTH Tax ID #: SSN or EIN add'] info re Type of Organization organization MUNICIPALITY debtor SECURED PARTY'S NAME ORGANIZATION'S NAME ST. ANTHONY PARK STATE BANK Mailing address 2265 COMO AVENUE This Financing Statement covers the following collaterals: Filing NO: Filing Date Filing Time State of Minnesota 200412999438 08/24/2004 3:37:00 pm Processing office: Secretary of State Filed by: UCCOnlineFiling City NEW HOPE Jurisdiction of Organization USA MN THE RIGHTS, TITLE AND INTEREST OF THE DEBTOR IN PAYMENTS AND OTHER OBLIGATIONS OF PEOPLE INCORPORATED AS OBLIGOR UNDER THE LOAN AGREEMENT DATED AUGUST 24 , 2004, BETWEEN THE DEBTOR AND THE OBLIGOR, WHICH RIGHTS, TITLE AND INTEREST ARE PLEDGED AND ASSIGNED TO THE SECURED PARTY PURSUANT TO THE PLEDGE AGREEMENT, DATED AUGUST 24, 2004, BETWEEN DEBTOR AND THE SECURED PARTY. City SAINT PAUL State Postal Code Country MN 55428 USA Organizational ID #, if any State Postal Code Country MN 55108 USA ALTERNATIVE DESIGNATION El lessee consignee bailee 11 seller ag.lien non-ucc (if applicable) /lessor /consignor /bailor /buyer filing Check only if applicable and check only one box Debtor is a n fec Trust or I ]Trustee actine with respect to Drooerty held in trust or Check only if applicable and check only one box Debtor is a TRANSMITTING UTILITY Filed in connection with a Manufactured -Home Transaction - effective 30 ,years Filed in connection with a Public -Finance Transaction - effective 30 years OPTIONAL FILER REFERENCE DATA NATIONAL UCC FINANCING STATEMENT (FORM UCC] ). Decedent's Estate UCC FINANCING STATEMENT A. NAME 8 PHONE OF CONTACT AT FILER [optional] MARY FRANCES SKALA (218) 725-6807 B. SEND ACKNOWLEDGMENT TO: (Name and Address) F -1 FRYBERGER, BUCHANAN, SMITH & FREDERICK. P.A. 302 WEST SUPERIOR STREET, SUITE 700 DULUTH, MINNESOTA 55802-1863 L THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY I. DEBTOR'S EXACT FULL LEGAL NAME - insert only one debto, name (I. or 1b) - do not abbreviate or combine names Ia. ORGANIZATION'S NAME NEW HOPE, CITY OF OR tb.INDIVIDUAL'S LAST NAME FIRST NAME 1c. MAILING ADDRESS CITY 4401 XYLON AVENUE NORTH NEW HOPE DEBTOR (MUNICIPALITY 3. ANTHONY PARK STATE BANK uR 3b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 3c. MAILING ADDRESS CITY STATE POSTALOODE COUNTRY 2265 COMO AVENUE ST. PAUL MN 55108-1797 USA 4. This FINANCING STATEMENT covers the following collaleral: THE RIGHTS, TITLE AND INTEREST OF THE DEBTOR IN PAYMENTS AND OTHER OBLIGATIONS OF PEOPLE INCORPORATED AS OBLIGOR UNDER THE LOAN AGREEMENT DATED AUGUST 24, 2004, BETWEEN THE DEBTOR AND THE OBLIGOR, WHICH RIGHTS, TITLE AND INTEREST ARE PLEDGED AND ASSIGNED TO THE SECURED PARTY PURSUANT TO THE PLEDGE AGREEMENT, DATED AUGUST 24, 2004, BETWEEN DEBTOR AND THE SECURED PARTY. 8. OPTtOI ]5576 FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT (FORM UCC1) (REV. 07/29/98) UCC FINANCING STATEMENT ADDENDUM 9. NAME OF FIRST DEBTOR (1a or 1b) ON RELATED FINANCING CITY OF 10, MISCELLANEOUS - THE ABOVE SPACE IS FOR FILING OFFICE USE ONLY 11. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insect only ggg name (Ila or 11b) -do not abbreviate or combine names FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT ADDENDUM (FORM UCCIAcl) (REV. 07/29/98) 11a. ORGANIZATIONS NAME OR 11bANDIVDUAL'SLAST NAME FIRST NAME MIDDLE NAME SUFFIX 11c. MAILING ADDRESS CITY STATE POSTALOODE COUNTRY 1ld.TAXID# SSNOREIN ADDLINFORE 11 e.TYPEOFORGANIZATION 1 It. JURISDICTION OF ORGANIZATION 11 g. ORGANIZATIONAL ID k, if any ORGANIZATION DEBTOR NONE 12. 1 ADDITIONAL SECURED PARTY'S gt ASSIGNORS/P'S NAME- insert only= name(12a or 121b) 12a. ORGANIZATION'S NAME OR 12b. INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 12c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 13. This FINANCING STATEMENT covets11 timber to be cul or Hinsexhir.tied 16. Additional collateral description: collateral, or is filed as a 11 fixture filing. 14. Description W, A estate: 15. Name and address of a RECORD OWNER of abcvedescribed real estate (if Debtor does not have a recon interest). 17. Check gply if applicable and check gely one box. Debtor is a Trust orEl Trustee acting with respect to property held in trust or Decedent's Estate 18. Check g,& if applicable and check gD1Y one box. ElDebtor is a TRANSMITTING UTILITY 11 Filed in connection with a Manufactured -Home Transaction — effective 30 years FqFiled in connection with a Public -Finance Transaction — effective 30 years FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT ADDENDUM (FORM UCCIAcl) (REV. 07/29/98) UCC FINANCING STATEMENT NAME & PHONE OF CONTACT AT FILER (optional) SEND ACKNOWLEDGMENT TO: (Name and Address) DA FRYBERGER BUCHANAN SMITH 302 West Superior Street 700 Lonsdale Building DULUTH MN 55802 DEBTOR'S EXACT FULL LEGAL NAME ORGANIZATION'S NAME PEOPLE INCORPORATED Mailing address 317 YORK AVENUE Tax ID p: SSN or EIN add') info re organization debtor SECURED PARTY'S NAME ORGANIZATION'S NAME ST. ANTHONY PARK STATE BANK Mailing address 2265 COMO AVENUE Filing NO: 200412999844 Filing Date 08/24/2004 Filing Time 3:44:00 pm State of Minnesota Processing office: Secretary of State Filed by: UCCOnlineFiling City State Postal Code Country SAINT PAUL MN 55101 USA Type of Organization Jurisdiction of Organization Organizational ID k, if any NON-PROFIT CORPORATIC USA MN H-891 This Financing Statement covers the following collaterals : City State Postal Code Country SAINT PAUL MN 55108 USA All awards or compensation made by any governmental or other lawful authorities for the taking or damaging by eminent domain of the whole or any part of the property now or hereafter located at 7483 46th St. N., Oakdale, MN 7708 45th 1/2 Av. N., New Hope, MN 7720 Upton Av. S., Richfield, MN 384 Londin Place, St. Paul, MN and 7573 Scott Ave. N., Brooklyn Park, MN (the "premises"), including any award for a temporary taking, change of grade of streets or taking of access, and any and all insurance proceeds for loss or damage to the premises, the inventory or the equipment. All rents now due or which may hereafter become due under or by virtue of any lease, license, sublease, or agreement, whether written or verbal, for the use or occupancy of the premises or any part thereof. ALTERNATIVE DESIGNATION lessee [] consineegbailee 11 seller D ag.lien non-ucc /lessor /consignor /bailor /buyer £filing(ifapplicable) Check only if applicable and check only one box Debtor is a 11 Trust or []Trustee acting with respect to property held in trust or Decedent's Estate Check only if applicable and check only one box Debtor is a TRANSMITTING UTILITY Filed in connection with a Manufactured -Home Transaction -effective 30 years F1Filed in connection with a Public -Finance Transaction - effective 30 years OPTIONAL FILER REFERENCE DATA 15576 NATIONAL UCC FINANCING STATEMENT (FORM UC(' 1), UCC FINANCING STATEMENT A. NAME 8 PHONE OF CONTACT AT FILER [optional] MARY FRANCES SKALA (218) 725-6807 8. SEND ACKNOWLEDGMENT TO: (Name and Address) I FRYBERGER, BUCHANAN, SMITH & FREDERICK, P.A. 302 WEST SUPERIOR STREET, SUITE 700 DULUTH, MINNESOTA 55802-1863 L THE ABOVE SPACE IS FOR FILING 1. DEBTOR'S EXACT FULL LEGAL NAME - insed only one demur name (1a or 1b) -do not abbreviate or combine names 2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only= debtor name (2a or 2b) -do nm abbreviate or combine names 1 a. ORGANIZATION'S NAME Oft PEOPLE INCORPORATED OR 1b.INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 1c. MAILING ADDRESS CITY STATE IPOSTALCODE COUNTRY 317 YORK AVENUE ST. PAUL MN 55101 USA id.TAX1Df1: SSNOREIN ADO'LINFORE Ile. TYPE OF ORGANIZATION 11. JURISDICTION OFORGANIZATION III, ORGANIZATIONAL ID M, R any ORGANIZATION NONE DEBTOR NP CORPORATION MINNESOTA -891 LINONE 2. ADDITIONAL DEBTOR'S EXACT FULL LEGAL NAME - insert only= debtor name (2a or 2b) -do nm abbreviate or combine names 3. SECURED PARTY'S NAME (or NAME N TOTAL ASSIGNEE of ASSIGNOR SIP) - insert only one secured party name (3a or 3b) 2a. ORGANIZATION'S NAME Oft 3E INDIVIDUAL'S LAST NAME OR 2b. INDIVIDUAL'S LAST NAME FNRSINAME MIDDLE NAME SUFFIX 2c. MAILING ADDRESS CITY STATE 1 POSTAL CODE COUNTRY 2d.TAXIDN: SSNOREIN ADDLINFORE 12..WPEOFORGANIZAnON 2t. JURISDICTION OF ORGANIZATION 129. ORGANIZATIONAL ID p. if any ORGANIZATION DEBTOR NONE 3. SECURED PARTY'S NAME (or NAME N TOTAL ASSIGNEE of ASSIGNOR SIP) - insert only one secured party name (3a or 3b) 4. This FINANCING STATEMENT covers the Iallumnl, collateral: All awards or compensation made by any governmental or other lawful authorities for the taking or damaging by eminent domain of the whole or any part of the property now or hereafter located at 7483 46th St. N., Oakdale, MN; 7708 45th 1/2 Av. N., New Hope, MN; 7720 Upton Av. S., Richfield, MN; 384 Londin Place, St. Paul, MN; and 7573 Scott Ave. N., Brooklyn Park, MN (the "premises"), including any award for a temporary taking, change of grade of streets or taking of access, and any and all insurance proceeds for loss or damage to the premises, the inventory or the equipment. All rents now due or which may hereafter become due under or by virtue of any lease, license, sublease, or agreement, whether written or verbal, for the use or occupancy of the premises of any part thereof. 8. OPTIONAL FILER REFERENCE DATA 15576 FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT (FORM UCC]) (REV. 07129198) 3a. ORGANIZATIONS NAME ST. ANTHONY PARK STATE BANK Oft 3E INDIVIDUAL'S LAST NAME FIRST NAME MIDDLE NAME SUFFIX 3c. MAILING ADDRESS CITY STATE POSTAL CODE COUNTRY 2265 COMO AVENUE ST. PAUL MN 55108-1797 USA 4. This FINANCING STATEMENT covers the Iallumnl, collateral: All awards or compensation made by any governmental or other lawful authorities for the taking or damaging by eminent domain of the whole or any part of the property now or hereafter located at 7483 46th St. N., Oakdale, MN; 7708 45th 1/2 Av. N., New Hope, MN; 7720 Upton Av. S., Richfield, MN; 384 Londin Place, St. Paul, MN; and 7573 Scott Ave. N., Brooklyn Park, MN (the "premises"), including any award for a temporary taking, change of grade of streets or taking of access, and any and all insurance proceeds for loss or damage to the premises, the inventory or the equipment. All rents now due or which may hereafter become due under or by virtue of any lease, license, sublease, or agreement, whether written or verbal, for the use or occupancy of the premises of any part thereof. 8. OPTIONAL FILER REFERENCE DATA 15576 FILING OFFICE COPY— NATIONAL UCC FINANCING STATEMENT (FORM UCC]) (REV. 07129198) CERTIFICATE OF OFFICIALS CITY OF NEW HOPE, MINNESOTA This Certificate of Officials, dated as of August 24, 2004, is given by the undersigned, the Mayor and City Manager, respectively, of the City of New Hope, Hennepin County, Minnesota (the "Issuer"), acting for the Issuer. We hereby certify that the Issuer is a duly constituted and existing municipal corporation and political subdivision under the Constitution and Laws of the State of Minnesota, and further certify as follows: OFFICERS. A. We are the duly elected or appointed, qualified and acting Mayor and Clerk, respectively, and as such Mayor and Clerk are familiar with the books and records of the Issuer. B. As of the date of this certificate, the members of the governing body of the Issuer and other officers of the Issuer, the dates of their appointment or election, and the dates of the commencement and expiration of their terms of office are as follows: Name Office Date Term Commenced Date Term Expires Don Collier Mayor 4/1/04 12/31/04 Doug Andersen Councilmember 4/1/04 12/31/04 Sharon Cassen Councilmember 1/l/00 12/31/04 Mary Gwin-Lenth Councilmember 1/1/02 12/31/06 Steve Sommer Councilmember 1/1/02 12/31/06 Valerie Leone Daniel Donahue Clerk City Manager appointed C. Each of the above-named members and officers was duly appointed or elected and was or is the acting officer holding the respective office stated immediately following his or her name from the date of commencement of the term or terms indicated above to either (1) the date of expiration of the term or terms indicated above or (2) the date of this certificate, whichever is the earlier and prior to entering into his or her duties each of the above-named members and officers duly took and filed their oath of office in the manner and form required by law. II. ORGANIZATION. A. The Issuer is a statutory city organized under Chapter 412 of Minnesota Statutes. B. The official newspaper of the Issuer is the Sun -Post, a newspaper of general circulation, published in New Hope, Minnesota, weekly on Thursday. C. The regular meetings of the governing body of the Issuer are held on the 2"' and 4" Mondays of every month at 7:00 p.m. at the New Hope City Hall in the Issuer. D. The Issuer's employer identification number for federal purposes is 41-6008870. Ill. THE NOTE. A. The Issuer has duly authorized the issuance, execution and delivery of its Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) (the "Note"), in the amount of $713,000, initially bearing interest at the rate of 4.25%, subject to adjustment as provided therein and maturing twenty years from the date hereof. B. The Note has been duly executed by and on behalf of the Issuer with the signatures of the undersigned Mayor and City Manager and the delivery of the Note to St. Anthony Park State Bank, a Minnesota banking corporation, the registered holder of the Note (the "Lender") is hereby authorized. C. On the date of this instrument the Treasurer of the Issuer caused the Note to be delivered to the Lender. The proceeds of the Note will be disbursed by the Lender pursuant to the terms and conditions of the Loan Agreement described below. IV. THE DOCUMENTS. A. The Issuer has duly authorized the execution and delivery of the following (the "Documents"): the Loan Agreement, dated of even date herewith (the "Loan Agreement"), between the Issuer and People Incorporated, a Minnesota nonprofit corporation (the `Borrower"); the Pledge Agreement, dated of even date herewith, among the Issuer, the Borrower and the Lender (the "Pledge Agreement"); and the Joint Powers Agreement, dated of even date herewith, among the Issuer and the Cities of Oakdale, Richfield and Brooklyn Park, Minnesota, and the Housing and Redevelopment Authority of the City of St. Paul, Minnesota. B. The Documents have been duly executed by and on behalf of the Issuer with the signatures of the undersigned Mayor and City Manager and are in substantially the forms approved by the Authorizing Resolution hereinafter described, except for certain insubstantial changes determined subsequent to such meeting and deemed appropriate and approved by the Attorney of the Issuer. The officials of the Issuer named in such documents executed the same as indicated therein and were duly 2 elected or appointed and qualified to serve as such officers on the date of such execution. C. The representations of the Issuer contained in Section 2.01 of the Loan Agreement are true in all material respects as of the date hereof. V. NO LITIGATION. A. To the best of our knowledge, the execution and delivery of the Note and the Documents and the compliance by the Issuer with the provisions thereof will not constitute on the part of the Issuer a material breach of or a material default under any existing court or administrative decree or order or any agreement or other instrument to which the Issuer is subject or by which it or its properties is or may be bound. B. No litigation is pending, to which the Issuer is a party, or to the knowledge of the undersigned threatened, to restrain or enjoin the issuance or sale of the Note, the application of the proceeds thereof, or the payment, collection or application of monies pursuant to the Loan Agreement or in any way affecting any authority for or the validity of the Note or the Documents. C. No legal or governmental proceedings are pending or threatened against the Issuer wherein an unfavorable decision, ruling or finding would have a material adverse effect on the validity or security of the Note, the Authorizing Resolution, the Documents or the transactions contemplated thereby. D. Neither the corporate existence of the Issuer nor, to the best of our knowledge, the titles of the present officials of the Issuer to their respective offices are being contested and no authority or proceedings for the issuance of the Note, including the Authorizing Resolution, or the execution and delivery of the Documents have been modified, repealed, revoked or rescinded. E. The actions taken by the governing body of the Issuer and the Issuer's officers relating to (1) the adoption of the Authorizing Resolution providing for the issuance of the Note and (2) the execution and delivery of the Note, the Documents and any other agreements contemplated thereby will not violate any existing law relating to any conflict of interest or other matters pertaining to the interest or qualifications of the members of the governing body of the Issuer or its officers. VI. PROCEEDINGS. A. All proceedings and actions taken by the Issuer by and through its governing body and its Mayor and City Manager in connection with the issuance, sale and delivery of the Note and the execution and delivery by the Issuer of the Authorizing Resolution, the Documents and other applicable related documents were duly conducted and adopted in accordance with all procedural requirements imposed by law (including but not limited to all applicable notice and quorum requirements) and as represented in said documents. B. Attached hereto and identified as Exhibits are true and correct copies of each of the following: 1. Exhibit A Resolution Calling for Public Hearing - A true and correct copy of a resolution adopted by the Issuer at a meeting duly called and held on June 14, 2004, entitled Resolution Calling For a Public Hearing on a Project by People, Incorporated Under Minnesota Statutes, Chapter 469, which resolution remains in full force and effect on the date hereof in the form in which adopted. 2. Exhibit B Affidavit of Publication - A true and correct copy of an Affidavit of Publication of the Notice of Public Hearing held on July 26, 2004. 3. Exhibit C Resolution Giving Preliminary Approval - A true and correct copy of a resolution adopted by the Issuer at a meeting duly called and held on July 26, 2004, entitled Resolution Giving Preliminary Approval to a Project Under Minnesota Statutes, Sections 469.152 Through 469.165 Referring the Proposal to the Minnesota Department of Employment and Economic Development for Approval, and Authorizing Preparation of Necessary Documents, which resolution remains in full force and effect on the date hereof in the form in which adopted. 4. Exhibit D Evidence of Approval by the Department of Emplovment and Economic Development - A true and correct copy of the Application for Approval of Industrial Development Bond Project pursuant to Minnesota Statutes, Sections 469.152 through 469.165, indicating approval by the Commissioner. 5. Exhibit E Authorizing Resolution - A true and correct copy of a resolution adopted by the Issuer at a meeting duly called and held on July 26, 2004, entitled Resolution Approving the Issuance and Sale of a Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) in the Aggregate Amount of $713, 000 and Authorizing the Execution of Documents Relating Thereto, which resolution remains in full force and effect on the date hereof in the form in which adopted (the "Authorizing Resolution"). rd WITNESS our hands as of the date first above written. CITY OF NEW HOPE, MINNESOTA ay City Manager M.-IJOcsl Ii961000000VCERIGJll69JVPD STATE OF MINNESOTA) COUNTY OF HENNEPIN) ss CITY OF NEW HOPE ) I, the undersigned, being the duly qualified City Clerk of the City of New Hope, Minnesota, hereby attest and certify that: 1. As such officer, I have the legal custody of the original record from which the attached resolution was transcribed. 2. 1 have carefully compared the attached resolution with the original record of the meeting at which the resolution was acted upon. 3. 1 find the attached resolution to be a true, correct and complete copy of the original: RESOLUTION NO. 2004-114 RESOLUTION CALLING FOR A PUBLIC HEARING ON A PROJECT BY PEOPLE, INCORPORATED UNDER MINNESOTA STATUTES, CHAPTER 469 4. 1 further certify that the affirmative vote on said resolution was 5 ayes, 0 nayes, and 0 absent/abstention. 5. Said meeting was duly held, pursuant to call and notice thereof, as required by law, and a quorum was present. WITNESS my hand officially as such Clerk and the seal of said City, this 15th day of June, 2004. (Seal) Valerie Leone, City Clerk CITY OF NEW HOPE 4401 Xylon Avenue North • New Hope, Miruiesota 55428-4898 • www. ci.new-hope.mn.us City Hall: 763-531-5100 • Police (non -emergency): 763-531-5170 • Public Works: 763-592-6777 • TDD: 763-531-5109 ' City Hall Fax: 763-531-5136 • Police Fax: 763-531-5174 • Public Works Fax: 763-592-6776 i Councilor twin -tenth introduced the following Resolution and moved its adoption: RESOLUTION NO.04-114 RESOLUTION CALLING FOR A PUBLIC HEARING ON A PROJECT BY PEOPLE, INCORPORATED UNDER MINNESOTA STATUTES, CHAPTER 469 BE IT RESOLVED, by the governing body (the "Council') of the City of New Hope, Hennepin County, Minnesota (the "Issuer"), as follows: Authority. Minnesota Statutes Sections 469.152 through 469.165, as amended (the "Act"), authorizes a municipality or redevelopment agency to issue revenue obligations to finance a project consisting of any properties, real or personal, used or useful in connection with a revenue producing enterprise engaged in providing health care services, including hospitals, nursing homes, and related medical facilities and to refinance outstanding obligations oforganizations that are primarily engaged in activities for mentally or physically disabled persons or providing social services, such as providing assistance to the poor, distressed, or underprivileged. 2. The Proiect. a. Representatives of People, Incorporated, a Minnesota nonprofit corporation; an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended; and an organization that is primarily engaged in activities for mentally or physically disabled persons and providing social services, such as providing assistance to the poor, distressed, or underprivileged (the `Borrower"), have advised the Issuer that the Borrower desires to undertake the refinancing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing (the "Project"): Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 4 level split 7483 461" St. N. home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car attached, rambler 7708 45" 1/2 Av. N. New Hope, MN Name and Address of Facility Size and Description of Facility Upton House 3 BR upper level, egress window & 1 add] BR 7720 Upton Av. S. added LL, rambler, 2.25 bath, 2 car detached Richfield, MN Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 3 BR, 3 bath rambler 7573 Scott Av. N. Brooklyn Park, MN b. As described above, a portion of the Project is located within the jurisdiction of the Issuer and a portion of the Project is located in each of the Cities of Oakdale, Richfield, St. Paul and Brooklyn Park, Minnesota (collectively with the Issuer, the "Host Cities"). C. Fryberger, Buchanan, Smith & Frederick, P.A., bond counsel, has advised the Issuer that the proposed Project is a "project' under Section 469.153, Subdivision 2 of the Act. 3. The Obligations. The Borrower has represented that the economic feasibility of the Project will be greatly enhanced through the issuance of revenue obligations by the Issuer and has requested that the Issuer and the other Host Cities cooperate, through a joint powers agreement, to finance the Project through the issuance of obligations pursuant to the Act. The Borrower has requested that the Issuer issue such obligations, in an amount not to exceed $713,000, in one or more series, in order to finance the cost of the Project (the "Obligations"). 4. Issuance of Obligations. a. The Obligations shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Host Cities, and the Obligations, when, as and if issued, shall recite in substance that the Obligations, including interest thereon, are payable solely fro,;, the revenues received from the Borrower and the property pledged to the payment thereof and shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation b. All details of and conditions precedent to the issuance of the Obligations and the provisions for payment thereof shall be subject to final approval of the Issuer and the approval of the other Host Cities of a joint powers agreement. 5. Public Hearine. The Issuer will conduct a public hearing on the issuance ofthe Obligations and the proposal to undertake and finance the Project, pursuant to the requirements of Minnesota Statutes, Section 469.154, Subd. 4, and Section 147(f) of the Internal Revenue Code of 1986, as amended. Authorization to Staff. a. The administrative staff of the issuer are authorized and directed to cause the notice substantially in the form attached hereto as ExHbit ExhibitA to be published in the official newspaper of the Issuer and a newspaper of general circulation in the jurisdiction of the Issuer not less than 14 days nor more than 30 days prior to the date set for the public hearing; provided that if the official newspaper of the Issuer is a newspaper of general circulation in the jurisdiction of the Issuer, the notice may be published only once. b. The administrative staff of the Issuer and their agents are hereby authorized to take such further action necessary to cant' out the intent and purpose of this resolution and the requirements of the Act. Issuer Costs. Approval of this resolution is subject to the agreement by the Borrower that it will pay the administrative fees of the Issuer and pay, or, upon demand, reimburse the Issuer for payment of, any and all costs incurred by the Issuer in connection with the Project and the issuance of the Obligations, whether or not the Project is carried to completion, or the Obligations are issued. 8. Rights Reserved. Nothing in this resolution shall be construed as an indication of an intent to approve this Project and issue the proposed Obligations. The Council specifically reserves the right to approve or disapprove the request after said public hearing. Adopted: June 14, 2004 May r Attest: Clerk The motion for the adoption of the foregoing Resolution was duly seconded by Council Member Cassen , and upon vote being taken, the following voted in favor thereof Andersen, Cassen, Collier, Gwin-Lenth, Sommer and the following voted against the same: None and the following were absent: None whereupon, said Resolution was declared duly passed and adopted and approved and signed by the Mayor and attested by the Clerk. 11 EXHIBIT A NOTICE OF PUBLIC HEARING ON PROPOSED PROJECT AND THE ISSUANCE OF PRIVATE ACTIVITY BONDS CITY OF NEW HOPE, HENNEPIN COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that the City Council of New Hope, Minnesota (the "Issuer") will meet on Monday, July 26, 2004, at 7:00 p.m, or as soon thereafter as reasonably possible in the City Hall, 4401 Xylon Avenue North in New Hope, Minnesota, for the purpose of conducting a public hearing on the proposal that the Issuer issue its revenue obligations, in one or more series, under Minnesota Statutes, Sections 469.152 through 469.165, in order to undertake and finance the cost of a project. The proposed project will be owned by People, Incorporated, a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Borrower"), and will consist of the refinancing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing (the "Project'): Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 7483 46th St. N. 4 level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car 7708 45th 1/2 Av. N. attached, rambler New Hope, MN Upton House 3 BR upper level, egress window & 7720 Upton Av. S. 1 add] BR added LL, rambler, 2.25 Richfield, r,Ir bash, 2 car detached Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 3 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN The proposed obligations will be issued pursuant to the authority granted in a joint powers agreement among the Cities of Oakdale, Richfield, St. Paul and Brooklyn Park, Minnesota (collectively with the Issuer, the "Host Cities'). The estimated total amount of the proposed revenue obligations will not exceed $713,000. The obligations and the interest thereon shall be limited obligations of the Issuer and shall not be payable from nor charged upon any funds other than the revenue pledged to their payment, nor shall the Issuer or the other Host Cities be subject to any liability on them. No holder of the obligations shall ever have the right to compel any exercise of the taxing power of the Issuer or any of the other Host Cities to pay the obligations or the interest thereon, nor to enforce payment of them against any property of the Issuer except those projects, or portions thereof, mortgaged or otherwise encumbered. A draft copy of the proposed Application to the Minnesota Department of Employment and Economic Development for approval of the project, together with all attachments and exhibits thereto, is available for public inspection at the Issuer's administrative office at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota, between the hours of 8:00 a.m. and 4:30 p.m. Monday through Friday, except legal holidays. All persons interested may appear and be heard at the time and place set forth above or may submit written comments to the City Clerk or City Manager in advance of the hearing. U. W..11557610000001ROLIGH9612. WPO _QI M�� newspapers AFFIDAVIT OF PUBLICATION STATE OF MINNESOTA) SS. COUNTY OF HENNEPIN) don valley Sun•Poet/ihursday, Jury 1, 2004 Richard Hendrickson, being duly sworn on an oath states or affirms, that he is the Chief LEGAL Financial Officer of the newspaper known as Sun -Post and has full knowledge of the facts stated below: City Of New Hope (A) The newspaper has complied with all of the requirements constituting qualification as P1 Publication) Nori(Offio �Rurc a qualified newspaper, as provided by Minn. Stat. §331A.02, §331A.07, and other ON PROPOSED PROJECT AND THE ISSUANCE OF PRIVATE ACTIVITY BONDS applicable laws, as amended. CITY OF NEW HOPP, BENNEPH4 COUNTY, (B) The printed public notice that is attached was published in the newspaper once each MnvNE OTA NOTICE IS HEREBY GIVEN that the City Council of week,for one successive week(s); it was first published on Thursday, the 1 day New Hope, Minnesota (the'Iesser') will meet on Monday, July: 26, 2004, at 7.00 p.m., or ae soon thereafter as me- of July 2004, and was thereafter printed and published on every Thursday aonebly possible in the City Hall, 4401 Xylon Avenue xorth m New xope M for the purpose of con- onnnmota, decting a pubhe hearing the proposal that the lesuer to and including Thursday, the day of2004; and printed below issue ie " eoneothgaItems, in one ormom ac ss, under Minnesota Statutes, Sections 469.152 through 469.165, in is a copy of the lower case alphabet from A to Z, both inclusive, which is hereby finav order m undertake and as the coat of a project. Theproposed project will he owned by People, Incorporated ,a Minnesota nonprofit corporation and organization de - acknowledged as being the size and kind of type used in the composition and publica- scribed in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the `Borrowef), and will co.let of tion of the notice: the refinencing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons, with mental illness listed abcdefghijklmnopgrstuvwxyz below and the financing of a portion of the coats associa4 ed with the fireumog(the `Project"): - Name and Addeass Sis¢and Deemdption f F Cwty f Facility Heather Ridge - 5 bedroom - 3 bath, 7483 46th St. N. 3 car attached, BY: Oakdale, MN 4level split home CFO Jordan House 4 bedroom - 1.75 bath, 7708 45th 1!2 Av. N 1 car attached, rambler New Hope, MN Upton House 3 BR upper level, egress window Subscribed and sworn to or affirmed before me 7720 Upton As, S. A, 1 addl BE added LL, ramble; Richfield, MN 2.25 bath, 2 car detached on this 1St day of July 2004. LourimHouee 4 BR, 2 bath, split entry home 384 Leaden Place 1 St. Paul, MN Zf� Scott Donee 3 BR, 3 bath rambler Notary Public / 7573 Scott Ave. N. Brooklyn Park, MN ' The obligations and the interest thereon shall be limited obligations of the Isauer and shall not be payable from nor charged open any funds other than the revenue pledged to MARY ANN CARLSON their Payment, sorahallthe IssuerortheotherHost Cities NOTARY PUBLIC - MINNESOTA be suhjed w any liability on them. No holder ofthe oblig- ations shall ever have the right to compel any exercise of MY COMMISSION EXPIRES [3100 the mooing power of the Issuer or any of the other Host j Cities to pay the obligations or the interest thereon, nor to 110111011 enforce payment of them against any property of the Is- suer except those projects, or portions thereof mortgaged RATE INFORMATION or otherwise encumbered. A draft copy of the proposed Application to the Minnesota (1) Lowest classified rate paid by commercial users $ 2.85 per line Department of Employment and Economic Development for approval of the project, together with all attachments for comparable space and exhibits thereto, is available for public inspection at the lesuer's administrative office at City Hall, 4401 Xylan Maximum rate allowed by law $ 6.20 per line Avenue North, New Hope, Minnesota, between the hours of 8:00 a.m. and 4:30 p.m. Monday through Friday, except legal holidays. (3) Rate actually charged $ 1.40 per line All persons interested may appear and be heard at the time and place act forth above or may submit written mm- bo eormaysubmitw•rittenmm- meats meats to the City Clerk or City Manger in advance of the bearing. (published in the New Hope Golden Valley Sun Post on Joe 30, 2004) (July 1, 2004)P2Bonds People Iue/v.Lcone Council Member Cassen introduced the following resolution and moved its adoption: RESOLUTION NO. 2004-137 RESOLUTION GIVING PRELIMINARY APPROVAL TO A PROJECT UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.165 REFERRING THE PROPOSAL TO THE MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT FOR APPROVAL, AND AUTHORIZING PREPARATION OF NECESSARY DOCUMENTS BE IT RESOLVED, by the governing body (the "Council') of the City of New Hope, Hennepin County, Minnesota (the "Issuer"), as follows: Section 1. General Recitals. a. The purpose of Minnesota Statutes, Sections 469.152 through 469.165 as amended, relating to municipal industrial development (the "Act'), as found and determined by the legislature, is to promote the welfare of the State of Minnesota (the "State") by the active promotion, attraction, encouragement and development of economically sound industry and commerce through governmental action to prevent, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment. b. Factors necessitating the active promotion and development of economically sound industry and commerce are the increasing concentration of population in the metropolitan areas and the rapidly rising increase in the amount and cost of governmental services required to meet the needs of the increased population and the need for development of land uses which will provide access to employment opportunities for such population. Section 2. Description of the Project. a. People Incorporated (the "Borrower"), the corporate offices of which are located at 317 York Avenue in St. Paul, Minnesota, a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code") and an organization that is primarily engaged in activities for mentally or physically disabled persons and providing social services, such as providing assistance to the poor, distressed, or underprivileged, has proposed issuance of revenue obligations, in one or more series, in an amount not to exceed $713,000 (the "Note"), to refinance commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of portion of the costs associated with the financing (the "Project'): Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 4 level 7483 46th St. N. split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car attached, 7708 45th 1/2 Av. N. rambler New Hope, MN Upton House 3 BR upper level, egress window & 1 addl 7720 Upton Av. S. BR added LL, rambler, 2.25 bath, 2 car Richfield, MN detached Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 3 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN b. The Project will be owned and operated by the Borrower. C. Portions of the Project are located in the jurisdiction of the Issuer and in the Cities of Oakdale, Richfield, St. Paul and Brooklyn Park, Minnesota (collectively, with the Issuer, the "Host Cities"). Section 3. Recitals Relatins to the Joint Exercise of Powers. a. Under the Act, the Host Cities are each authorized and empowered to issue revenue bonds or a revenue note to undertake and or refinance all or any part of the costs of a project consisting of the refinancing of debt incurred with respect to acquisition and betterment of health care facilities or revenue-producing facilities of organizations described in Section 501(c)(3) of the Code primarily engaged in activities for mentally or physically disabled persons and providing social services, such as providing assistance to the poor, distressed, or underprivileged. b. The Borrower has requested that the Host Cities cooperate through a joint powers agreement (as required by Minnesota Statutes, Section 471.656) to finance the Project through the issuance of the Note pursuant to the Act. C. A draft copy of the Joint Powers Agreement among the Host Cities (the "Joint Powers Agreement") has been submitted to the Council and is on file in the office of the Clerk. Section 4. Recital of Representations Made by the Borrower. a. The Issuerhasbeen advised by representatives ofthe Borrowerthat: (i) conventional financing to pay the capital cost of the Project is available only on a limited basis and at such high costs ofborrowing that the economic feasibility of operating the Project would be significantly reduced; (ii) on the basis of information submitted to the Borrower and their discussions with representatives ofarea financial institutions and potential buyers of tax-exempt bonds, the Note could be issued and sold upon favorable rates and terms to finance the Project; and (iii) the Project would not be undertaken in their present form but for the availability of financing under the Act. b. The Borrower has agreed to pay any and all costs incurred by the Issuer and the other Host Municipalities in connection with the issuance of the Note, whether or not such issuance is carried to completion. C. The Borrower has represented to the Issuer that no public official of the Issuer has either a direct or indirect financial interest in the Project nor will any public official either directly or indirectly benefit financially from the Project. Section 5. Public Hearing. a. As required by the Act and Section 147(f) of the Code, an initial resolution was adopted by the Council on June 14, 2004, scheduling a public hearing on the issuance of the Note and the proposal to undertake and finance the Project. b. As required by the Act and Section 147(f) of the Code a Notice of Public Hearing was published in the New Hope Golden Valley Sun Post, the Issuer's official newspaper and a newspaper of general circulation, calling a public hearing on the proposed issuance ofthe Note and the proposal to undertake and finance the Project. C. As required by the Act and Section 147(f) Code, the Issuer has, on July 26, 2004, held a public hearing on the issuance of the Note and the proposal to undertake and finance the Project, at which all those appearing who desired to speak were heard and written comments were accepted. Section 6. Findings. It is hereby found, determined, and declared as follows: a. The welfare of the State and the Issuer requires the provision of necessary facilities for mentally or physically disabled persons so that such facilities are available to residents of the State and the Issuer at reasonable cost. b. The Issuer desires to facilitate the selective development of the community and help to provide the range of services and employment opportunities required by the population. The Project will assist the Issuer in achieving those objectives; help to stabilize market valuation ofthe Issuer; help maintain a positive relationship between assessed valuation and debt; and enhance the image and reputation of the community. C. On the basis of information made available to this Council by the Borrower it appears, and this Council hereby finds, that: (1) the Project constitutes refinancing of debt incurred with respect to properties, real and personal, used or useful in connection with a revenue producing enterprise within the meaning of Subdivision 2 of Section 469.153 of the Act; (2) the Project furthers the purposes stated in Section 469.152 of the Act; (3) the Project would not be undertaken but for the availability of financing under the Act and the willingness of the Issuer to furnish such financing; and (4) the effect of the Project, if undertaken, will be to: (i) encourage the development ofeconomically sound industry and commerce, (ii) assist in the prevention of the emergence of blighted and marginal land, (iii) help prevent chronic unemployment, (iv) provide the range of service and employment opportunities required by the population, (v) help prevent the movement of talented and educated persons out of the State and to areas within the State where their services may not be as effectively used, (vi) promote more intensive development and appropriate use of land within the Issuer, eventually to increase the tax base of the community; and (vii) provide adequate services to and facilities for mentally or physically disabled persons at a reasonable cost. d. The Issuer acknowledges, finds, determines and declares that the provision of necessary services and facilities for mentally or physically disabled persons so that such services and facilities are available to residents of the State at a reasonable cost is a public purpose. Section 7. Approval. a. The Project and the issuance of the Note are hereby given preliminary approval by the Issuer. b. In accordance with Subdivision 3 of Section 469.154 of the Act, the Mayor or the Clerk, or their designee, is authorized and directed to submit the proposal for the Project to the Department of Employment and Economic Development of the State ("DEED") requesting approval, and other officers, employees and agents of the Issuer are hereby authorized to provide DEED with such information as it may require. 4 C. The Borrower is hereby authorized to enter into such contracts, in their own names and not as agents of the Issuer, as may be necessary for the transactions described herein by any means available to them and in the manner they determine without advertisement for bids, but the Issuer will not be liable on such contracts. Section 8. Limited Obligation. The Note, when and if issued for the Project, shall not constitute a charge, lien or encumbrance, legal or equitable, upon any property of the Host Cities. (There will, however, be a charge, lien or encumbrance on the Project, which is not an asset of the Host Cities.) The Note, when and if issued, shall recite in substance that the Note and the interest thereon, are payable solely from revenues received from the Project and property pledged for payment thereof, and shall not constitute a debt of the Host Cities. Section 9. Approval and Execution of Joint Powers Agreement. a. The Joint Powers Agreement is hereby made a part of this Resolution as though fully set forth herein and is hereby approved in substantially the form presented to the Issuer Council. The Mayor and the Clerk are authorized and directed to execute, acknowledge, and/or deliverthe Joint Powers Agreement on behalf ofthe Issuerwith such changes, insertions, and omissions therein as the Issuer's Attorney may hereafter deem appropriate, such execution to be conclusive evidence of approval of such document in accordance with the terms hereof. b. The Mayor and Clerk are authorized and directed to execute and deliver such other documents or certificates needed from the Issuer for the sale of the Note. C. The approvals in this Section are specifically subject to approval of the Joint Powers Agreement by each of the Host Cities and approval of the Project by DEED. Adopted July 26, 2004. r ATTEST: Clerk The motion of the adoption of the foregoing Resolution was duly seconded by Member Sommer and, upon vote being taken, the following voted in favor thereof: Collier, Cassen, Andersen, Gwin—Lenth, Sommer the following voted against the same: None the following were absent: None whereupon, said Resolution was declared duly passed and adopted, and approved and signed by the Mayor and attested by the Clerk. M. Wo SII557610000001ROLIG1522I. WPO 0 n �+I '�V ■/ Department of Employment Il'1 J ,/Y anaEconomicDevelopment lYll'I�SGt� August 9, 2004 The Honorable Don Collier State File No. M-4196 Acting Mayor, City of New Hope 4401 Xyon Avenue North New Hope, MN 55428 RE: Health Care Facilities, Revenue Note, Series 2004 (People, Incorporated Project) Dear Mayor Collier: The Department of Employment and Economic Development has examined the application and exhibits submitted by you relating to the proposal to offer revenue bonds as authorized by the Municipal Industrial Development Act, Minn. Stats. Sections 469.152 through 469.1651. Based upon the information you submitted, approval of the project is hereby granted by the Department of Employment and Economic Development. Such approval shall not be deemed to be an approval by the Department or the State of Minnesota regarding the feasibility of the project or the terms of the revenue agreement to be executed or the bonds to be issued therefor, nor whether the project falls within regulations of Federal Law. This approval does not in any way constitute an approval of an allocation in excess of anuti8imOnt awa a pursuant to Minn. Stats. Sectio) 474.A. Accordingly, it relay i1e necessary for the issuer to seek an allocation under Minn. Stats. Section 474.A. Included with this letter is a Project Closing/Notice of Issue report which must be completed by the bond counsel and returned to this Department within five (5) days after the obligations are issued. Please refer to the "M" State File number when submitting the Project Closing/Notices of Issue report. Failure to file this report within the five day period will void the obligations if the obligations are subject to a federal limitation act. Department of Employment and Economic Development 500 Metro Square •121 7th Place East • Saint Paul, MN 55101.2146 - USA 651.297.1291 • 800.657-3858 • Fax 651.296.1290 • TTY/TDD: 651.282.6142 •800.366.2906 • www.deed.state.mn.us An equal opportunity employer and service provider. Page 2 Your cooperation in the timely submission of these reports will be sincerely appreciated. If you have any questions about your project approval, or the reports, please call Jean Cannefax at 651-296-5337. Sincerely, PAM:jmc Enclosures cc: Mary Francis Skala, Fryberger, Buchanan, Smith & Frederick, P.A. Valerie Leone, City Clerk PAM:jmc NewHope080904.2k. word Paul A. Moe Director. Business Finance PAM:jmc Enclosures cc: Mary Francis Skala, Fryberger, Buchanan, Smith & Frederick, P.A. Valerie Leone, City Clerk PAM:jmc NewHope080904.2k. word Revised January, 1990 STATE OF MINNESOTA MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT DIVISION OF COMMUNITY DEVELOPMENT APPLICATION FOR APPROVAL OF INDUSTRIAL DEVELOPMENT BOND PROJECT PURSUANT TO MINNESOTA STATUTES, SECTION 469.152 THROUGH 165 (please submit this form in duplicate - all supporting data in single copy only) Date: July 26, 2004 The governing body of the City of New Hope, County of Hennepin, Minnesota, hereby applies to the Minnesota Department of Employment and Economic Development (Department) for approval of a proposed Industrial Development Bond issue as required by Minn. Stat. 469.152-.165. Address of issuer 4401 Xvlon Avenue North, New Hope, Minnesota 55428 Attn: Kirk McDonald, Community Development Director Telephone: (763) 531-5119 We have entered into preliminary discussions with: Firm: People Incorporated Address: 317 York Avenue City: St. Paul State: MN 55101 Attorney: Mary K. Martin Address: 2411 Francis Street City: St. Paul State: MN 55075 Name of Project: Health Care Facilities Revenue Note, Series 2004 (People, Incorporated Project) This firm is engaged primarily in (nature of business): providing services to mentally and physically disabled persons The proceeds from the sale of the Industrial Development Bonds will be used to (describe the project): See Attachment A Address of Project: See Attachment A Proceeds from the sale of the bonds of approximately $713,000 will be applied toward payment of costs now estimated as follows: Acquisition of land: $0 New construction: $00 Demolition and site preparation: $0 Acquisition and Installation of Equipment: $0 Fees: Architectural, engineering, inspection, fiscal, legal, administrative, or printing:1$ 4,260 Construction Interest: $0 Initial Bond Reserve: $0 Contingencies: $0 Other: refinancing $698,740 It is presently estimated that construction will begin on or about N/A, and will be complete on or about N/A. When completed, there will be approximately N/A new jobs created by the project at an annual payroll of approximately $N/A, based upon currently prevailing wages. (If applicable) There are 30 existing jobs provided by business. (If applicable) There will be N/A jobs created by construction of the project. Number of hours N/A. Average wage level $N/A. Repayment of the proposed issue will be amortized over a period of 20 years. The following exhibits are furnished with this application and are incorporated herein by reference: An opinion of bond counsel that the proposal constitutes a project under Minn. Stat. 469.153, subd. 2. 2. A copy of the resolution by the governing body of the issuer giving preliminary approval for the issuance of its revenue bonds and stating that the project, except for a project under Minn. Stat. 469.153, subd. 2(g) or 0) would not be undertaken but for the availability of Industrial Development Bond financing. 3. A comprehensive statement by the municipality indicating how the project satisfies the public or purpose and policies of Minn. Stat. 469.152-.165. 4. A letter of intent to purchase the bond issue or a letter confirming the feasibility of the project from a financial standpoint. 5. A statement signed by the principal representative of the issuing authority to the effect that upon entering into the revenue agreement, the information required by Minn. Stat. 469.154, subd. 5 will be submitted to the Department (not applicable to project under Minn. Stat. 469.153, subd. 2(g) or 0). 6. A statement signed by the principal representative of the issuing authority that the project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. A statement signed by a representative of the issuing authority that a public hearing was conducted pursuant to Minn. Stat. 469.154, subd. 4. The statement shall include the date, time and place of the meeting and certify that a draft copy of this application with all attachments was available for public inspection and that all interested parties were afforded an opportunity to express their views. 8. Copies of notice(s) as published which indicate the date(s) of publication and the newspaper(s) in which the notice(s) were published. 9. Provide a plan for compliance of employment preference of economically disadvantaged or unemployed individuals. (See Minn. Stat. 469.154, subd. 7.) AEDP 1/10-2 We, the undersigned, are duly authorized and elected or appointed representatives of the City of New Homme, Minnesota and solicit your approval of this project at your earliest convenience so that we may cant' it to a final conclusion. Signed by: (Principal Officers or Representatives of Issuing Authority: type or print official's name on the line to the left of the signature line. Thank you.) Don Collier Mayor Valerie Leone City Clerk 4Sign Signature This approval shall not be deemed to be an approval by the Department or the State of the feasibility of the project or the terms of the revenue agreement to be executed or the bonds to be issued therefor. Authorized Signature, Minnesota Department of Date of Approval Employment and Economic Development Please return to: Minnesota Department of Employment and Economic Development Paul A. Moe, Director Office of Business Finance 500 Metro Square Building 121 Seventh Place East St. Paul, Minnesota 55101-2146 Phone: 651-297-1397 Fax: 651-296-5287 U. V.1155761WW 00MG15216. WPD ATTACHMENT A The project will consist of the refinancing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities forpersons with mental illness listed below and the financing of a portion of the costs associated with the financing: Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 4 7483 46th St. N. level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car attached, 7708 45th 1/2 Av. N. rambler New Hope, MN Upton House 3 BR upper level, egress window & 1 7720 Upton Av. S. addl BR added LL, rambler, 2.25 Richfield, MN bath, 2 car detached Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 3 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN MINNESOTA DEPARTMENT OF FINANCE CASH AND DEBT MANAGEMENT DIVISION NOTICE OF ISSUE Pursuant to Minnesota Statutes. Chapter 474A, as amended Due within 5 business days after issuance leach series if issued in series) or prior to 4:30 p.m. no the last business day m December (whichever occurs fust) Issuer's Name: Issuer's Address: Issuer's Employer Identification Number: Namc of Issue: Date of Issue: CUSIP Number: Allocation under which issuedEntitlement: ❑ Current year authority ❑ Carryforward authority ❑ . Pool Certificate of Allocation number. ❑ Not subject to annual volume cap Type of Qualified Bonds under Federal Tess law: ❑ Small Issue Bonds ❑ Residential Rental Project Bonds ❑ Redevelopment Bonds ❑ Public Facilities Bonds ❑ Mortgage Bonds ❑ ❑ Student loan Bonds ❑ Govommental Bonds ❑ Enterprise. Zone Facility Bonds 501 (c) (3) Name of enterprise: Nature of enterprise: Location of enterprise: Principal amount of this issue: S Additional series to be issued: S Dollar amount of bonds issued subject to the annual volume cap: S Term: Interest Rate: Equity contributed to project: S Other sources of financing (please specify): S Amount previously issued for this project: S Total cost of project S Original purchaserls) of bond issue: Submitted by. Signature. Send two original copies to: lone copy will be signed by Department of Finance and .emmed to bond counsel) Minnesota Department of Finance Cash and Debt Management Division An Mr. Lee Mehrkens 400 Cenrennial Building, 658 Cedar Street St. Paul, Minnesota 55155-1489 Title: Date: For manufacturing projects, send one additional copy to: Minnesota Department of Trade & Economic Development Atm: Mr. Paul A. Moe 500 Metro Square Building 121 7a Place East St. Paul, Minnesota 55101 Form L Notice of Issue Revised Jul 2002 Page I LAW OFFICES FRYBERGER, BUCHANAN, SMITH & FREDERICK, P.A. SUITE 700 302 WEST SUPERIOR STREET DULUTH, MINNESOTA 55802-1863 TELEPHONE (218)722-0861 FAX [218]725=6800 www.fryberger.com August 4, 2004 Commissioner Minnesota Department of Employment and Economic Development 500 Metro Square Building 121 Seventh Place East St. Paul, Minnesota 55101 RE: City of New Hope, Minnesota Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) We have reviewed a resolution adopted by the governing body of the City of New Hope, Minnesota (the "City"), on July 26, 2004, entitled "Resolution Giving Preliminary Approval to a Project Under Minnesota Statutes, Sections 469.152 through 469.165; Referring the Proposal to the Minnesota Department of Employment and Economic Development for Approval, and Authorizing Preparation of Necessary Documents" (the "Resolution"), relating to a proposal that the City issue its revenue bonds or revenue note under Minnesota Statutes, Sections 469.152 through 469.165 (the "Act'), to finance aproject (the "Project') on behalf of People Incorporated, a Minnesota nonprofit corporation (the "Borrower"). On the basis of our review of the Resolution and preliminary discussions with representatives of the Borrower as to the nature of the Project and the proposed financing thereof, it is presently our opinion that the Project constitutes a "project' within the meaning of Minnesota Statutes, Section 469.153, Subd. 2, and that the City is authorized, assuming further proceedings are taken in accordance with the provisions of the Act and any other applicable law, to issue its revenue note as proposed by the Resolution. It is further our opinion, based on such review and preliminary discussions, that the revenue bonds or revenue note to be issued by the City would constitute "qualified 501(c)(3) bonds" pursuant to Section 145 of the Internal Revenue Code of 1986, as amended (the "Code"), which are not subject to the volume cap imposed by Section 146 of the Code. Therefore, an allocation will not be required under Minnesota Statutes, Chapter 474A. FRYBERGER, BUCHANAN, SMITH & FREDERICK, P.A. By/?GG% d'L Mary Fran es Skala A4: dou115376100000010PAIG15222. e'PD MAYOR'S STATEMENT CONCERNING A PROPOSED PROJECT UNDER MINNESOTA STATUTES, SECTIONS 469.152 THROUGH 469.165 The undersigned, being the duly qualified and acting Mayor of the City of New Hope, Hennepin County, Minnesota (the "Issuer"), certifies that the governing body ofthe Issuer has been provided by People Incorporated, a Minnesota nonprofit corporation (the "Developer"), or its representatives, with certain information concerning a proposed Project under the Minnesota Municipal Industrial Development Act, Minnesota Statutes, Sections 469.152 through 469.165 (the "Act"). On the basis of such information the Issuer, by resolution adopted July 26, 2004 (the "Preliminary Resolution"), has given preliminary approval to the proposed project and the financing thereof by the issuance of a revenue obligation or obligations of the Issuer. The following are factors considered by the governing body of the Issuer in determining to give preliminary approval to said project: 1. The project is described in Attachment A to the State of Minnesota, Minnesota Department of Employment and Economic Development, Division of Community Development, Application for Approval of Industrial Development Bond Project Pursuant to Minnesota Statutes, Section 469.152 through 165 dated July 26, 2004, submitted for the project by the Issuer (the "Project"). The Developer intends to finance the Project through the use of tax-exempt obligations issued by the Issuer pursuant to a joint powers agreement (the "Joint Powers Agreement") among the Issuer and the Minnesota Cities of Oakdale, Richfield, St. Paul and Brooklyn Park. 2. Fryberger, Buchanan, Smith & Frederick, P.A., bond counsel for the Project, is of the opinion that the Project constitutes a "project" within the meaning of Minnesota Statutes, Section 469.153, Subdivision 2. 3. Based on an estimated total project cost of approximately $713,000, all of which will be financed with tax-exempt obligations and the representations of the other jurisdictions in which a portion of the Project is located, it is the opinion of the governing body of the Issuer that the Project, when completed, will provide necessary facilities so that adequate health care services are available to area residents at a reasonable cost. 4. The Developer estimates that, as a result of the Project, its operations will continue to remain competitive and continue to provide permanent employment opportunities for approximately 30 people. No new jobs will be created by the Project. The governing body of each jurisdiction in which a portion of the Project is located has represented its concern about the level of unemployment within its respective jurisdiction and the resulting movement of persons to other areas where jobs are more plentiful, and each has represented its belief that the existence of a portion of the Project within its respective jurisdiction would help alleviate those problems. The governing body of the Issuer is concerned about the level of unemployment within the jurisdiction of the Issuer and the resulting movement of persons to other areas where jobs are more plentiful, and believes that the existence of a portion of the Project within the Issuer would help alleviate those problems. 5. Based on representations of the Developer as to the nature of the Project, the governing body of the Issuer believes that the Project will be compatible with present and projected development in its areas of operation. 6. Nothing has come to the attention of the governing body of the Issuer to indicate that the proposed financing of the Project by the Issuer would adversely and unfairly affect any other business enterprise located within the jurisdiction of the Issuer. 7. Pursuant to the Preliminary Resolution, the Issuer will, upon entering into a revenue agreement, comply with the requirements of Minnesota Statutes, Section 469.154, Subd. 5. 8. Based on representations of the Developer as to the nature of the Project, the Project does not include any property to be sold or affixed to or consumed in the production of property for sale, and does not include any housing facility to be rented or used as a permanent residence. 9. A public hearing was conducted on July 26, 2004, at the City Hall, New Hope, Minnesota, at 7:00 p.m. pursuant to Minnesota Statutes, Section 469.154, Subd. 4, to consider the proposal that the Issuer undertake and finance the Project. A draft copy of the "Application for Approval of Industrial Development Bond Project Pursuant to Minnesota Statutes, Sections 469.152 through 469.165" with all attachments was available for public inspection. All interested parties were afforded an opportunity to express their views. 10. The Issuer and the Developer will undertake to encourage that the employment opportunities made available by the Project will, if feasible, be offered to individuals who are unemployed or economically disadvantaged as contemplated in Minnesota Statutes, Section 469.154, subdivision 7. The Issuer will comply with the reporting requirements set forth in said Section 469.154, subdivision 7. Dated: July 26, 2004. M.Wd 1115 3 7610 0 OWWOMG6:13. WPD MIDWEST HEALTHCARE CAPITAL Non -Profit Tax -Exempt Finance Specialists 665 Woodridge Drive Mendota Heights, Minnesota 55118 (651) 455-8300 FAX (651) 455.8484 Email: mhealthcao(a),aol com June 28, 2004 Commissioner Minnesota Department of Employment and Economic Development 500 Metro Square Building 121 Seventh Place East St. Paul, Minnesota 55101 At the request of People Incorporated, a Minnesota nonprofit corporation (the "Developer'), we have undertaken a study of the financing required to facilitate the cost of the project described in Attachment A to the State of Minnesota, Minnesota Department of Employment and Economic Development, Division of Community Development, Application for Approval of Industrial Development Bond Project Pursuant to Minnesota Statutes, Section 469.152 through 165, dated July 26, 2004, submitted for the project by the City of New Hope, Minnesota. This financing will be referred to as the City of New Hope, Minnesota, Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project). It is our opinion, on the basis of current financial information, that the revenue note or bonds of the City of New Hope can be successfully issued and sold. Sincerely, v Steven R. Fenlon 26 Programs. One Mission. A nonnrafit orgc -amn fork le ,Cnoi i .grim in i ci G.. _ 2i r I nueil; iTel III cs �iErltle ia,l _. dE" I i in �r c }✓a ADMINISTRATION' coyp666 65`-P, e -C'111 'J .. June 24, 2004 EXECUTIVE DIRECTOR Ll . Ti.r Burkett. Ph.D BOARD OF DIRECTORS n Mayor and City Council City Hall 7aee h�swa� New Hope, Minnesota 55428 I[ Dial Iv cn, �, SL ,al(- El.en am`.,^on RE: City of New Hope, Minnesota Far:- Be rf Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) lizabcn DeDef,-, Cur Cui is mi D,i mfinm Dear Mayor and City Council: dors enlon. :atom F,F'r1.8- Sides; Lain= In accordance with Minnesota Statutes, Section 469.154, subdivision 7 (the "Act"), People Incorporated K `F;a Minnesota non-profit corporation (the "Developer"), hereby agrees to make every effort to comply with BI?oabo ri"i:-,a the requirements of the Act for the purpose of providing employment to those individuals who are Thornton Fo.;eli unemployed or who are economically disadvantaged and who otherwise qualify for employment with the Pauida horkc. Charles schelr, In l.. Developer. Fa Der t t,,(, Mar; Whin It is the intent of the Developer to target employment opportunities to qualified individuals who are unemployed or economically disadvantaged as defined in the Federal Job Training Partnership Act of ADVISORY COUNCIL senate Eueo Nnr =rs(o, Chair 1982, Statutes at Large, Volume 96, page 1322. Ba; Ahrens Caroline Baillon. It further is the intent ofthe Developer to such reports to the Commissioner sa ni Banlstei provide of the Department of Employment and Economic Development of the State of Minnesota as may be required b the Act or Y 9 Y Senator ends Bsrn!In other laws of the State of Minnesota. t Bothe f'. Anuv Andy Boss Allan Boaiich PEOPLE INCORPORATED Fetor Calor. Bill Cammack Alden, Drerr Pete Feigal Dime Formal B fid- ZJ y Rarald Fcrs..h -� ,y>✓ ,!'� �N-�/T��. M1Lf+'� Gerrrls Susa n Gross Pal Hart Bill Healet Robed Y. Hr^,.cr... John: Kluznik, '9. D. Sue Liteckv f.1aicalni FL,;D ]rfi-,d Dave Nail Lae Nelson {a'd O'Feii'. i.orrn Fcee '.lar:: S'ac^hei Ei =_ei Star'.: Jul.n'.vestrc.� 26 Programs. One Mission. A nonnrafit orgc -amn fork le ,Cnoi i .grim in i ci G.. _ 2i r I nueil; iTel III cs �iErltle ia,l _. dE" I i in Council Member Cassen introduced the following Resolution and moved its adoption: RESOLUTION NO. 2004-138 RESOLUTION APPROVING THE ISSUANCE AND SALE OF A HEALTH CARE FACILITIES REVENUE NOTE, SERIES 2004 (PEOPLE INCORPORATED PROJECT) IN THE AGGREGATE AMOUNT OF $713,000 AND AUTHORIZING THE EXECUTION OF DOCUMENTS RELATING THERETO BE IT RESOLVED, by the governing body (the "Council') of the City of New Hope, Hennepin County, Minnesota (the "Issuer"), as follows: Section 1. Definitions. The terms used herein, unless the context hereof requires otherwise, have the following meanings, and any other terms defined in the Loan Agreement (hereinafter defined) have the same meanings when used herein as assigned to them in the Loan Agreement unless the context or use thereof indicates another or differing meaning or intent: a. Act: Minnesota Statutes, Sections 469.152 through 469.165, as amended. b. Bond Account: the account established pursuant to Section 11 of this Resolution. C. Borrower: People Incorporated being (as represented to the Issuer), a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended, the corporate offices ofwhich are located at 317 York Avenue in St. Paul, Minnesota. d. Bond Counsel: the law firm ofFryberger, Buchanan, Smith & Frederick, P.A. or any other firm of nationally -recognized bond counsel. e. Code: the Internal Revenue Code of 1986, as amended. f Council: the governing body of the Issuer. g. Coun : Hennepin County, Minnesota. h. Documents: the Joint Powers Agreement, the Loan Agreement, the Mortgage and the Pledge Agreement and other documents required for the issuance of the Note. DEED: the Minnesota Department of Employment and Economic Development. j. Host Municipalities: the Issuer and the Cities of Oakdale, Richfield, St. Paul and Brooklyn Park, municipal corporations and political subdivisions of the State. k. Issuer: City of New Hope, Hennepin County, a municipal corporation and political subdivision of the State. Issuer Documents: collectively, the Loan Agreement and the Pledge Agreement. in. Joint Powers Agreement: the Joint Powers Agreement among the Host Municipalities regarding issuance of the Note. n. Lender: St. Anthony Park Bank, a Minnesota banking corporation with an office located in St. Paul, Minnesota. o. Loan Agreement: the Loan Agreement to be entered into between the Issuer and the Borrower, pursuant to which the Borrower agrees to repay the loan made thereunder in specified amounts and at specified times sufficient to pay in full when due the principal of, premium, if any, and interest on the Note. p. Mortgage: the combination Mortgage, Security Agreement and Fixture Financing Statement from the Borrower to the Lender, pursuant to which the Borrower will secure its obligations with respect to the Note under the Loan Agreement, including the payment of amounts due under the Loan Agreement, by granting to the Lender a first mortgage interest in the property described therein. q. Note: the Issuer's Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) in the aggregate principal amount of $713,000. Pledge Agreement: the Pledge Agreement to be entered into among the Issuer, the Borrower and the Lender, pursuant to which the Issuer pledges and grants a security interest in all of its rights, title, and interest in the Loan Agreement (except for the Unassigned Issuer's Rights) to the Lender. S. Project: refinancing commercial indebtedness incurred forthe acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing: Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 4 level 7483 46th St. N. split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, I car attached, 7708 45th 1/2 Av. N. rambler New Hope, MN Upton House 3 BR upper level, egress window & 1 addl 7720 Upton Av. S. BR added LL, rambler, 2.25 bath, 2 car Richfield MN detached Name and Address of Facility Size and Description of Facility Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 3 BR, 3 bath rambler 7573 Scott Ave. N. Brooklyn Park MN Re iQ strar: bond registrar and transfer agent for the Note. U. State: the State of Minnesota. Section 2. Leeal Authorization. The Issuer is a municipal corporation and political subdivision duly organized under the laws of the State 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; provided, however, that the Issuer has relied without independent investigation on written representations and opinions of the Borrower, its consultants and Bond Counsel that the Project qualifies as a "project' within the meaning of the Act. Section 3. Recitals. a. Under the Act, the Issuer is authorized and empowered to issue revenue obligations to finance or refinance all or any part of the costs of a project consisting of the refinancing of debt incurred with respect to, or acquisition and betterment of, health care facilities or facilities oforganizations described in Section 501(c)(3) of the Code and to refund bonds previously issued under the Act. b. An initial resolution was adopted by the Council on June 14, 2004, scheduling a public hearing on the proposed issuance of revenue obligations, in one or more series, in an amount not to exceed $713,000 to finance the Project all with respect to the Borrower. C. The Issuer has, after due notice and publication thereof, on July 26, 2004, held a public hearing on the Project and the financing thereof, and persons in attendance wishing to speak on the Project and financing thereof were given an opportunity to do so at the hearing. d. Portions of the Project are located in the Host Municipalities. Each of the Host Municipalities has approved or, based on representations of the Borrower, will approve the Joint Powers Agreement. 3 e. A resolution was adopted by the Council on July 26, 2004, which gave preliminary approval to the issuance of revenue obligations and the proposal to undertake and finance the Project, approved the Joint Powers Agreement and referred the proposal regarding the issuance of revenue obligations in order to finance the cost of the Project on behalf of the Borrower to DEED. The findings of the Council contained in said resolution are hereby ratified and confirmed as though stated in full herein. Drafts of the following documents have been submitted to this Council and are on file in the office of the Clerk: the Loan Agreement; ii. the Pledge Agreement; iii. the Mortgage; and iv. the form of the Note. Section 4. Findings. The Council has heretofore determined, and does hereby determine, as follows: a. the Issuer is authorized by the Act to enter into a Loan Agreement for the public purposes expressed in the Act; b. the financing of the Project will further the public purposes set forth in the Act, including the promotion of the public welfare by (i) assisting in providing adequate services to and facilities for mentally or physically disabled persons, (ii) preventing, so far as possible, the emergence of blighted and marginal lands and areas of chronic unemployment, and the Issuer has by this Resolution authorized the Project and execution and delivery of the Note and the Issuer Documents, which documents specify the terms and conditions for financing the Project; C. the Borrower has informed the Issuer that the Project would not be undertaken at present but for the availability of the financing provided by the Notes, the aggregate amount of which will not exceed $713,000 as hereinafter provided; and d. the Note and the interest accruing thereon will not constitute an indebtedness of the Issuer within the meaning of any constitutional or statutory limitation of indebtedness and will not constitute or give rise to a pecuniary liability or a charge against the general credit or taxing powers of the Issuer and neither the full faith and credit nor the taxing powers of the Issuer, are pledged for the payment of the Note or interest thereon. 4 Section 5. Authorization and Ratification of the Project. The Issuer 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 the acquisition, construction and equipping of the Project by such means as shall be available to the Borrower and in the manner determined by the Borrower; and the Issuer hereby consents to all actions heretofore taken by the Borrower consistent with and in anticipation of such authority. Section 6. The Note. a. In order to provide for the financing of the Project, the Issuer hereby determines, based on representations of the Borrower, that the offer of the Lender to purchase the Note in an original principal amount of not to exceed $713,000, at an initial interest rate of not to exceed 4.25% per annum, subject to adjustment as provided in the Note, and upon the terms and conditions hereafter specified and specified in the Note is reasonable and is hereby accepted. The Issuer will loan the proceeds of the Note to the Borrower in order to finance the Project. b. The Loan Repayments to be made by the Borrower under the Loan Agreement are fixed to produce revenue sufficient to provide for the prompt payment of principal of, premium, if any, and interest on the Note when due, and the Loan Agreement also provides that the Borrower is required to pay all expenses of the operation and maintenance of the Project, including, but without limitation, adequate insurance thereon and insurance against all liability for injury to persons or property arising from the operation thereof, and all lawfully imposed taxes and special assessments levied upon or with respect to the Project and payable during the term of the Loan Agreement. C. The Note shall be in substantially the form submitted to the Council, with such appropriate variations, omissions and insertions as are permitted or required by this Resolution, and in accordance with the further provisions hereof as may be necessary and appropriate and approved by Bond Counsel and the Borrower prior to the execution thereof; and shall mature in the years and amounts, be subject to redemption, and bear interest at the rate as therein specified, subject to adjustment as therein specified. d. The Note shall be executed on behalf of the Issuer by the signatures of its Mayor and Clerk. The seal of the Issuer may be omitted as allowed by law. 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 officer had remained in office until delivery. In the event of the absence or disability of the Mayor or the Clerk such officers of the Issuer as may act in their behalf, shall without further act or authorization of the City Council execute and deliver the Note. Section 7. Disposition of Note Proceeds. Upon delivery of the Note, the Lender shall advance funds for payment of Project Costs upon compliance with the provisions of the Loan Agreement. Section 8. Approval and Execution of Documents. a. The Issuer Documents and the Note are hereby made a part of this Resolution as though fully set forth herein and are hereby approved in substantially the forms on file with the Council. The Mayor and the Clerk are authorized and directed to execute, acknowledge, and deliver the Issuer Documents and the Note on behalf of the Issuer with such changes, insertions, and omissions therein as the Issuer's attorney may hereafter deem appropriate, such execution by the Mayor and Clerk to be conclusive evidence of approval of such documents in accordance with the terms hereof. b. The Mayor, the Clerk and the Treasurer are authorized and directed to execute and deliver all other documents which may be required under the terms of the Issuer Documents or the Note or by Bond Counsel, and to take such other action as may be required or deemed appropriate for the performance of the duties imposed thereby to carry out the purposes thereof. C. The Mayor, Clerk, Treasurer and other officers of the Issuer are authorized to furnish certified copies of this Resolution and all proceedings and records of the Issuer relating to the Note, and such other affidavits and certificates as may be required to show the facts relating to the Issuer respecting the Note, as such facts appear from the books and records in the officers' custody and control or as otherwise known to them; and all such certified copies, certificates, and affidavits, including any heretofore furnished, shall constitute representations of the Issuer as to the truth of all statements contained therein. d. If for any reason the Mayor, Treasurer, Clerk, or any other officers, employees, or agents of the Issuer authorized to execute certificates, instruments, or other written documents on behalf of the Issuer shall for any reason cease to be an officer, employee, or agent of the Issuer after the execution by such person of any certificate, instrument, or other written document, such fact shall not affect the validity or enforceability of such certificate, instrument, or other written document. e. If for any reason the Mayor, Treasurer, Clerk, or any other officers, employees, or agents of the Issuer authorized to execute certificates, instruments, or other written documents on behalf of the Issuer shall be unavailable to execute such certificates, instruments, or other written documents for any reason, such certificates, instruments, or other written documents may be executed by a deputy or assistant to such officer, or by such other officer of the Issuer as in the opinion of the Issuer's attorney is authorized to sign such document and do all things and execute all instruments and documents required to be done or executed by such officers, with full force and effect, which executions or acts shall be valid and binding on the Issuer. Section 9. (Reserved) Section 10. Registration. a. Registered Form. The Note shall be issued only in fully registered form. The Note shall be numbered R-1 in a denomination equal to the principal amount thereof. b. Registration, Transfer and Exchange. The Issuer appoints the Clerk as Registrar. The effect of registration and the rights and duties of the Issuer with respect thereto are as follows: Register. The Registrar must keep a bond register for the Note in which the Registrar provides for the registration of ownership of the Note and the registration of transfers and exchanges of the Note. ii. Transfer of Note. Subject to the provisions of clause x of this subsection, upon surrender for transfer of a Note duly endorsed by the registered owner thereof or accompanied by a written instrument of transfer, in form satisfactory to the Registrar, duly executed by the registered owner thereof or by an attorney duly authorized by the registered owner in writing, the Registrar will authenticate and deliver, in the name of the designated transferee, one new note in an aggregate principal amount equal to the then outstanding principal amount of the Note so surrendered and of like maturity, as requested by the transferor. The Registrar may, however, close the books for registration of any transfer after the 15' day of the month preceding each interest payment date and until such interest payment date. iii. Issuance of New Notes. Subject to the provisions of clause x of this subsection, the Issuer shall, at the request and expense of the Lender, issue new notes in aggregate outstanding principal amount equal to that ofthe 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 Lender or such transferee as may be designated by the Lender. iv. Exchange of Note. When a Note is surrendered by the registered owner for exchange the Registrar will authenticate and deliver one new note in an aggregate principal amount equal to the then outstanding principal amount of the Note surrendered and of like maturity, as requested in writing by the registered owner or the owner's attorney. V. Cancellation. A Note surrendered upon any transfer or exchange will be promptly canceled by the Registrar and thereafter disposed of as directed by the Issuer. vi. Improper or Unauthorized Transfer. When a Note is presented to the Registrar for transfer, the Registrar may refuse to transfer the Note so presented until the Registrar is satisfied that the endorsement on the Note or separate instrument of transfer is valid and genuine and that the requested transfer is legally authorized. The Registrar will incur no liability for the refusal, in good faith, to make transfers which it, in its judgment, deems improper or unauthorized. vii. Persons Deemed Owners. The Issuer and the Registrar may treat the person in whose name a Note is registered in the bond register as the absolute owner of the Note, whether the Note is overdue or not, for the purpose of receiving payment of, or on account of, the principal of and interest on the Note and for all other purposes, and payment so made to a registered owner or upon the owner's order will be valid and effectual to satisfy and discharge the liability upon the Note to the extent of the sum or sums so paid. viii. Taxes, Fees and Charges. For a transfer or exchange of a Note, the Registrar may impose a charge upon the owner thereof sufficient to reimburse the Registrar for any tax, fee or other governmental charge required to be paid with respect to the transfer or exchange. ix. Mutilated, Lost, Stolen or Destroyed Note. If a Note becomes mutilated or is destroyed, stolen or lost, the Registrar will deliver a new Note of like amount, number, maturity date, redemption privilege and tenor in exchange and in substitution for and upon cancellation of the mutilated Note or in lieu of or in substitution for any Note destroyed, stolen or lost, upon the payment of the reasonable expenses and charges of the Registrar and Issuer in connection therewith; and, in the case of a Note destroyed, stolen or lost, upon filing with the Registrar of evidence satisfactory to the Registrar that the Note was destroyed, stolen or lost, and of the ownership thereof, and upon furnishing to the Registrar and Issuer of an appropriate bond or indemnity in form, substance and amount satisfactory to it and as provided by law, in which both the Issuer and the Registrar must be named as obligees. A Note so surrendered to the Registrar will be canceled by the Registrar. If the mutilated, destroyed, stolen or lost Note has already matured or been called for redemption in accordance with its terms it is not necessary to issue a new Note prior to payment. 0 X. Limitation on Transfers. The Note has been issued without registration under state or other securities laws, pursuant to an exemption for such issuance; and accordingly a Note may not be assigned or transferred in whole or part, nor may a participation interest in a Note be given pursuant to any participation agreement, except in accordance with an applicable exemption from such registration requirements. In no event may any participation interest in a Note be in an initial principal amount of less than $100,000. Section 11. Accounts. There is hereby established at the Lender a bond account into which all payments of the principal of and interest on the Note shall be deposited and immediately credited against the unpaid principal balance of the Note and interest accrued thereon. Section 12. General Covenants. a. Payment of Principal and Interest. The principal of and interest on the Note are payable solely from and secured by revenues and proceeds derived from the Note and the Documents, or credited to the Bond Account under Section 11, which revenues and proceeds are hereby specifically pledged to the payment thereof in the manner and to the extent specified herein and in the Note and the Documents; 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 Issuer. b. Agreements Binding. All agreements, covenants, and obligations of the Issuer contained in this Resolution and in the above -referenced documents shall be deemed to be the agreements, covenants, and obligations of the Issuer to the full extent authorized or permitted by law, and all such agreements, covenants, and obligations shall be binding on the Issuer and enforceable in accordance with their terms. No agreement, covenant, or obligation contained in this Resolution or in the above -referenced documents shall be deemed to be an agreement, covenant, or obligation of any member of the Council, or of any officer, employee, or agent of the Issuer in that person's individual capacity. Neither the members of the Council, nor any officer executing the Note, shall be liable personally on the Note or be subject to any personal liability or accountability by reason of the issuance of the Note. C. Rights Conferred. Nothing in this Resolution or in the above -referenced documents is intended or shall be construed to confer upon any person (other than as provided in the Note, the Loan Agreement, the Pledge Agreement, and the other agreements, instruments, and documents hereby approved) any right, remedy, or claim, legal or equitable, under and by reason of this Resolution or any provision of this Resolution. d. Nature of Security. The Note will be a special limited obligation of the Issuer. 0 ii. Notwithstanding anything contained in the Note or the Documents or any other document referred to herein 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 Issuer other than the Bond Account and the revenues and proceeds pledged to the payment thereof, nor shall the Issuerbe subject to any liability thereon, nor shall the Note otherwise contribute or give rise to a pecuniary liability of the Issuer or any of the Issuer's officers, employees and agents. Accordingly, the Note shall not be payable from or charged upon any funds other than the revenues pledged to the payment thereof, nor shall the Issuer be subject to any liability thereon. iii. No holder of the Note shall ever have the right to compel any exercise of the taxing power of the Issuer to pay the Note or the interest thereon, or to enforce payment thereof against any property of the Issuer 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 funds, assets or property of the Issuer, other than revenues under the Loan Agreement and sums held in the Bond Account; and the Note shall not constitute a debt of the Issuer within the meaning of any constitutional or statutory limitation of indebtedness. The Note will not constitute an indebtedness, a pecuniary liability, a moral or general obligation or a loan of the credit of the Issuer or a charge, lien or encumbrance, legal or equitable, against the Issuer's property, general credit or taxing powers. Section 13. Offering and Disclosure Materials. The Issuer has not participated in the preparation of or reviewed any offering or disclosure materials with respect to the offer and sale of the Note and the Issuer makes no representations or warranties regarding the necessity, sufficiency, accuracy, fairness, completeness or adequacy of any disclosure with respect to such offer and sale. Section 14. Bank Qualified. In order to qualify the Note as "qualified tax-exempt obligations" within the meaning of Section 265(b)(3) of the Code, the Issuer hereby makes the following factual statements and representations: a. based entirely upon representations of the Borrower and Bond Counsel, the Note, when issued, will be "qualified 501(c)(3) bonds" under Section 145 of the Code; b. the Issuer hereby designates the Note as "qualified tax-exempt obligations" for purposes of Section 265(b)(3) of the Code; C. the reasonably anticipated amount of tax-exempt obligations (other than obligations described in clause (ii) of Section 265(b)(3)(C) of the Code) which have been or will be issued by the Issuer (and all entities whose obligations will be aggregated with iff those of the Issuer) during the calendar year in which the Note is issued are not expected to exceed $ 10,000,000; and d. not more than $10,000,000 of obligations issued by the Issuer during the calendar year in which the Note is issued have been designated for purposes of Section 265(b)(3) of the Code. Section 15. Subject to DEED Approval. Notwithstanding anything in this Resolution to the contrary, the approvals and authorizations given herein are specifically subject to and contingent upon the receipt of approval of the Project by DEED. Section 16. 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. Section 17. Effective Date. This Resolution shall take effect and be in force from and after its approval. Adopted: July 26, 2004. ATTEST: Clerk 11 The motion of the adoption of the foregoing Resolution was duly seconded by Council Member Sommer and, upon vote being taken, the following voted in favor thereof: Collier, Andersen, Collier, Gwin-Lenth, Sommer the following voted against the same: None the following were absent: None whereupon, said Resolution was declared duly passed and adopted, and approved and signed by the Mayor and attested by the Clerk. At. WoaIIJS16Io000001ROLIGJ)1)4."D I 1 I II 1 12 EXHIBIT A NOTICE OF PUBLIC HEARING ON PROPOSED PROJECT AND THE ISSUANCE OF PRIVATE ACTIVITY BONDS CITY OF NEW HOPE, HENNEPIN COUNTY, MINNESOTA NOTICE IS HEREBY GIVEN that the City Council of New Hope, Minnesota (the "Issuer") will meet on Monday, July 26, 2004, at 7:00 p.m., oras soon thereafter as reasonably possible in the City Hall, 4401 Xylon Avenue North in New Hope, Minnesota, for the purpose of conducting a public hearing on the proposal that the Issuer issue its revenue obligations, in one or more series, under Minnesota Statutes, Sections 469.152 through 469.165, in order to undertake and finance the cost of a project. The proposed project will be owned by People, Incorporated, a Minnesota nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Borrower"), and will consist of the refinancing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing (the "Project"): Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 7483 46th St. N. 4 level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car 7708 45th 1/2 Av. N. attached, rambler New Hope, MN Upton House 3 BR upper level, egress window & 7720 Upton Av. S. 1 add] BR added LL, rambler, 2.25 Richfield, MN bath, 2 car detached Londin House 4 BR, 2 bath, split entry home 384 Londin Place St. Paul, MN Scott House 3 BR 3 bath rambler 7573 Scott Ave. N. Brooklyn Park, MN The proposed obligations will be issued pursuant to the authority granted in a joint among the Cities of Oakdale, Richfield, powers agreement St. Paul and Brooklyn Park, Minnesota (collectively with the Issuer, the "Host Cities"). The estimated total amount of the proposed revenue obligations will not exceed 5713,000. The obligations and the interest thereon shall be limited obligations of the Issuer and shall not be payable from nor charged upon any fiords other than the revenue pledged to their payment, nor shall the Issuer or the other Host Cities be subject to any liability on them. No holder of the obligations shall ever have the right to compel any exercise of the taxing power of the Issuer or any of the other Host Cities to pay the obligations or the interest thereon, nor to enforce payment of them against any property of the Issuer except those projects, or portions thereof, mortgaged or otherwise encumbered. A draft copy of the proposed Application to the Minnesota Department of Emplovment and Economic Development for approval of the project, together with all attachments and exhibits thereto, is available for public inspection at the Issuer's administrative office at City Hall, 4401 Xylon Avenue North, New Hope, Minnesota, between the hours of 8:00 a.m. and 4:30 p.m. Monday through Friday, except legal holidays. All persons interested may appear and be heard at the time and place set forth above or may submit written comments to the City Clerk or City Manager in advance of the heating. M-UrcS115SI610lR IROLIGH967I. WPO Form 8038 (Rev January2002) Department of the Treasury Internal Revenue Service Information Return for Tax -Exempt Private Activity Bond Issues OMB No 1545-0720 (Under Internal Revenue Code section 149(e)) ► See separate instructions. Part I Reporting Authority Check if Amended Return ► ❑ 1 Issuer's name - NEW HOPE, CITY OF 2 Issuer's employer identification number 41-6008870 3 Number and street (or P.O. box if mail is not delivered to street address) 4401 XYLON AVENUE NORTH Room/suite 4 Report number 1 01 5 City, town, or post office, state, and ZIP code NEW HOPE MN 55428-4898 6 Date of issue AUGUST 24, 2004 7 Name of issue $713,000 HEALTH CARE FACILITIES REVENUE NOTE, SERIES 2004 PEOPLE INCORPORATED PROJECT 8 CUSIP number NONE 9 Name and title of officer or legal representative whom the IRS may call for more information DANIEL DONAHUE, CITY MANAGER 10 Telephone number of officer or legal representative 763-531-5112 Part III Type of Issue (check the applicable box(es) and enter the issue price for each) Issue Price 11 Exempt facility bond: a ❑ Airport (sections 142(a)(1) and 142(c)) .............................................. b ❑ Docks and wharves (sections 142(a)(2) and 142(c)) .................................... c ❑ Water furnishing facilities (sections 142(a)(4) and 142(e)) ................................ d ❑ Sewage facilities (section 142(a)(5)) ................................................ e ❑ Solid waste disposal facilities (section 142(a)(6)) ...................................... I F] Qualified residential rental projects (sections 142(a)(7) and 142(d)), as follows: ............... Meeting 20-50 test (section 142(d)(1)(A)) .......................... ❑ Meeting 40-60 test (section 142(d)(1)(13)) .......................... ❑ Meeting 25-60 test (NYC only) (section 142(d)(6)) .................... ❑ Has an election been made for deep rent skewing (section 142(d)(4)(B))? .. ❑ Yes ❑ No g ❑ Facilities for the local furnishing of electric energy or gas (sections 142(a)(8) and 142(f)) ........ h ❑ Facilities allowed under a transitional rule of the Tax Reform Act of 1986 (see instructions)....... Facility type 11a 11b 11c 11d 11e 11f 11 11h 1986 Act section 1 ❑ Qualified enterprise zone facility bonds (section 1394) (see instructions) ..................... j ❑ Qualified empowerment zone facility bonds (section 1394(f)) (see instructions) ................ k ❑ District of Columbia Enterprise Zone facility bonds (section 1400A) (see instructions) ........... ❑ Qualified public educational facility bonds (sections 142(a)(13) and 142(k)) .................. m❑ Other. Describe (see instructions) ► 12 ❑ Qualified mortgage bond (section 143(a)) ............................................ 13 E] Qualified veterans' mortgage bond (section 143(b)) .................................. ► Check the box if you elect to rebate arbitrage profits to the United States ................. ❑ 14 ❑ Qualified small issue bond (section 144(a)) (see instructions) ........................... It, Check the box for $10 million small issue exemption ................................. ❑ 15 ❑ Qualified student loan bond (section 144(b)) .......................................... 16 ❑ Qualified redevelopment bond (section 144(c)) ........................................ 17 ❑ Qualified hospital bond (section 145(c)) (attach schedule — see instructions) ................. 18 ® Qualified 501(c)(3) nonhospital bond (section 145(b)) (attach schedule— see instructions) ...... Check box if 95% or more of net proceeds will be used only for capital expenditures ...... ► ❑ 19 ❑ Nongovernmental output property bond (treated as private activity bond) (section 141(d)) ........ 20 ❑ Other. Describe (see instructions) ► 11i 11- 11k 111 11m 12 13 14 15 16 17 18 713,000 19 20 Part III Description of Bonds (Complete for the entire issue for which this form is being filed.) For Paperwork Reduction Act Notice, see page 4 of the separate instructions. ISA STT FEM393F.I Form 8038 (Rev. 1-2002) (a) Final maturity date (b) Issue price (c) Stated redemption price at maturity (d) Weighted average maturity (e) Yield 21 8/24/24 $ 713,000 $ 713,000 12.06 years VR % For Paperwork Reduction Act Notice, see page 4 of the separate instructions. ISA STT FEM393F.I Form 8038 (Rev. 1-2002) Form 8038 2 22 Proceeds used for accrued interest .................................................... 22 0 23 713,000 23 Issue price of entire issue (enter amount from line 21, column (b)) ............................ 41 Check the box if the issue is comprised of qualified redevelopment, qualified small issue, or exempt 31a 24 Proceeds used for bond issuance costs (including underwriters' discount) .. 24 14,260 25 Proceeds used for credit enhancement ............................. 25 0 Buildings and structures ............................................................ Amount of issue not subject to the unified state volume cap or other volume limitations: ........... 26 Proceeds allocated to reasonably required reserve or replacement fund ....26 0 609 740 c 27 Proceeds used to currently refund prior issue (complete Part VI) ......... 27 0 Of bonds for governmentally owned solid waste facilities, airports, docks, wharves, environmental 31c 28 Proceeds used to advance refund prior issue (complete Part VI).......... 28 0 d Equipment with recovery period of 5 years or less ........................................ 29 Add lines 24 through 28............................................................ 29 14160 30 698 740 30 Nonrefunding proceeds of the issue (subtract line 29 from line 23 and enter amount here) .......... FFa­rt_V_F Description of Property Financed by Nonrefunding Proceeds Caution: The total of lines 31a through a below must equal line 30 above. Do not complete for qualified student loan bonds, aualdied mortaaae bonds. or qualified veterans' mortaace bonds. 31 Type of Property Financed by Nonrefunding Proceeds: I Amount aLand .......................................................................... 41 Check the box if the issue is comprised of qualified redevelopment, qualified small issue, or exempt 31a 89 000 b Buildings and structures ............................................................ Amount of issue not subject to the unified state volume cap or other volume limitations: ........... 31b 609 740 c Equipment with recovery period of more than 5 years ...................................... Of bonds for governmentally owned solid waste facilities, airports, docks, wharves, environmental 31c 0 d Equipment with recovery period of 5 years or less ........................................ enhancements of hydroelectric generating facilities, or high-speed intercity rail facilities ............ 31d 0 e Other (describe) Under a carryforward election. Attach a copy of Form 8328 to this return ....................... 31e 0 32 North American Industry Classification System (NAICS) of the projects financed by nonrefunding proceeds. Under transitional rules of the Tax Reform Act of 1986. Enter Act section ► 44c NAICS Code Amount of nonrefunding proceeds NAICS Code Amount of nonrefundina oroceeds a 6239`90 698 740 c $ b 1$ d Part VI I Description of Refunded Bonds (Complete this part only for refunding bonds.) 33 Enter the remaining weighted average maturity of the bonds to be currently refunded .............. ► years 34 Enter the remaining weighted average maturity of the bonds to be advance refunded .............. ► years 35 Enter the last date on which the refunded bonds will be called ............................... ► 36 Enter the date(s)the refunded bonds were issued ► 37 Name of governmental unit(s) approving issue (see the instructions) ► SEE ATTACHED SCHEDUULE 38 Check the box if you have designated any issue under section 265(b)(3)(B)(i)(III) ................. ► ❑X 39 Check the box if you have elected to pay a penalty in lieu of arbitrage rebate .................... ► ❑ 40 Check the box if you have identified a hedge (see instructions) ............................... ► ❑ 41 Check the box if the issue is comprised of qualified redevelopment, qualified small issue, or exempt 43 facilities bonds and provide name and EIN of the primary private user ......................... ► ❑ Name ill EIN Amount of issue not subject to the unified state volume cap or other volume limitations: ........... Amount 42 Amount of state volume cap allocated to the issuer. Attach copy of state certification............ 42 1 0 43 Amount of issue subject to the unified state volume cap .................................... 43 0 44 Amount of issue not subject to the unified state volume cap or other volume limitations: ........... 44 713,000 a Of bonds for governmentally owned solid waste facilities, airports, docks, wharves, environmental enhancements of hydroelectric generating facilities, or high-speed intercity rail facilities ............ 44a 0 b Under a carryforward election. Attach a copy of Form 8328 to this return ....................... 44b 0 c Under transitional rules of the Tax Reform Act of 1986. Enter Act section ► 44c 0 d Under the exception for current refunding (section 146(1) and section 1313(a) of the Tax Reform Act of1986)........................................................................ 44d 0 45a Amount of issue of qualified veterans' mortgage bonds .................................... 45a 0 b Enter the state limit on qualified veterans' mortgage bonds ................................ I 45b 0 46a Amount of section 1394(0 volume cap allocated to issuer. Attach copy of local government certification .............. 46a 0 b Name of empowerment zone ► 47 Amount of section 142(k)(5) volume cap allocated to issuer. Attach copy of state certification...... 47 0 Under penaltie perjury, I declare tha t� xamined this re m, and accompanying schedules and statements, and to the best of my knowledge and belief, they ora true, act, an Sign Here ' August 24, 2004 ^' Signature of officer Date Daniel Donahue City Manager Name of above officer (type or print) Title of officer Woe or orintl STF FED5393F.2 Form 8038 (Rev 1-2002) CERTIFICATE AS TO RECEIPT OF NOTICE OF ISSUE STATE OF MINNESOTA ) ss. COUNTY OF RAMSEY ) RE: State File No. M-4196 I, the undersigned, DO HEREBY CERTIFY that on the 24th day of August, 2004, there was filed in the office of the Department of Employment and Economic Development of the State of Minnesota, a Notice of Issue dated August 24, 2004, relating to the City of New Hope, Minnesota, Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project), in the amount of $713,000. STATE OF MINNESOTA DEPARTMENT OF EMPLOYMENT AND ECONOMIC DEVELOPMENT .By Its ✓J < <iLN Al.d/x 1155)610000001(EFIGJ7733. H'PD MINNESOTA DEPARTMENT OF FINANCE Form L CASH AND DEBT MANAGEMENT DIVISION Notice of Issue Revised July 2001 NOTICE OF ISSUE Page 1 of 2 Pursuant to Minnesota Statutes Chapter 474A, as amended Due within 5 business days after issuance (each series if issued in series) or prior to 4:30 p.m. on the last business day in December (whichever occurs first) Issuer's Name: Issuer's Address: 4401 Xvlon Avenue North, New Hope, Minnesota 55428 Issuer's Employer Identification Number: 41-6008870 Name of Issue: $713,000 Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) Date of issue: August 24. 2004 CUSIP Number: N/A Allocation under which issued: Entitlement: ❑ Current year authority ❑ Pool Certification of Allocation number: ® Not subject to annual volume cap Type of Qualified Bonds under Federal Tax Law: ❑ Small Issue Bonds ❑ Residential Rental Project Bonds ❑ Public Facilities Bonds ❑ Mortgage Bonds ❑ Governmental Bonds ❑ Enterprise Zone Facility Bonds Name of enterprise: People Incorporated Nature of enterprise: providing services to mentally and physically disabled persons Location of enterprise: New Hope. Oakdale, Richfield. St. Paul and Brooklyn Park, Minnesota Principal amount of this issue: $713,000 Additional series to be issued: $N/A Dollar amount of bonds issued subject to the annual volume cap: $-0- Term: 20 vears (final maturity 08/24/24) Interest Rate: 4.25% (variable) Equity contributed to project: S 0 Other sources of financing (please specify): $ none Amount previously issued for this project: $ none Total cost of project: Original purchaser(s) of bond issue: St. Anthony Park State Bank. St. Paul. MN ' Submitted by: Mary Frances Skala Title: Bond Counsel I Signature: Send two original copies to: (one copy will be signed by Department of Finance and re[urned to bond counsel) Minnesota Department of Finance Cash and Debt Management Division Attn: Mr. Peter Sausen 400 Centennial Buildine, 658 Cedar Street St. Paul, Minnesota 55155-1489 ❑ Carryforward authority ❑ Redevelopment Bonds ❑ Student Loan Bonds ® 501 (c) (3) Date: August 24, 2004 For manufacturing projects, send one additional copy to: Minnesota Department of Employment and Economic Development Attn: Mr. Paul A. Moe 500 Metro Square Building 121 7th Place East St. Paul, Minnesota 55101 Form L Notice of Issue Revised July 2001 Page 2 of 2 I OPINION OF BOND COUNSEL (as provided to the Minnesota Department of Finance) The undersigned has acted as bond counsel in connection with the issuance and delivery of the bonds named in this notice of issue. In this connection the undersigned has examined certificates of the issuer as m certain facts and circumstances and such other documents as deemed relevant and necessary in rendering this opinion. From such examination it is the opinion of the undersigned that the bonds meet the requirements of Minnesota Statutes, Chapter 474A. and Section 146 of the Internal Revenue Code of 1986. as amended, relating to the volume cap on private activity bonds. Additional comments (optional): The bonds of this issue are not subject to annual volume cap. By: (Name of Bond Counsel): Fryberger. Buchanan Smith & Frederick. P.A. Address: 302 West Superior Street Suite 700 Duluth. Minnesota 55802-1863 Signature: - I Date: August 24. 2004 CERTIFICATION BY THE DESIGNATED OFFICIAL OF THE MINNESOTA DEPARTMENT OF FINANCE Based on the information supplied to the department in this notice of issue and bond counsel opinion, the undersigned official ofthe Minnesota Department of Finance hereby certifies, pursuant to section 149(e) of the Internal Revenue Code of 1986, as amended ("the Code"), that the issue identified in this notice meets the requirements of Minnesota Statutes, Chapter 474A, and Section 146 of the Code relating to volume cap. By: (Name of Financial Official designated to provide this certification): Title: Date: Address: Minnesota Department of Finance 658 Cedar Street 400 Centennial Building St. Paul, MN 55155-1489 Al dorsi �57610WW1jV0rOJ7751. mPo F L O N %O+ G �7 R 04 � U a 0 v R v � C U O y � R C `C 0 o 0 o ti � R m � O a 0 z o � z o L d 0 v. 1� a � R �a db v i Q T a> C U A w R F PEOPLE INCORPORATED OFFICERS' CERTIFICATE AND RECEIPT This Officers' Certificate and Receipt, dated as of August 24, 2004, is given by the undersigned, who certify that they are respectively the President and Secretary of People Incorporated, a Minnesota nonprofit corporation (the `Borrower") and, as such officers, are familiar with (a) the properties, affairs and records of the Borrower and (b) the Project, as such term is defined in that certain Loan Agreement of even date herewith between the City of New Hope, Minnesota (the "Issuer") and the Borrower (the "Loan Agreement"). In conjunction therewith, the undersigned further certify, on behalf of the Borrower, as follows: L GENERAL A. The undersigned have been properly authorized and directed by proper action of the Board of Directors of the Borrower and the Bylaws of the Borrower to execute this Certificate, and any other certificates to be executed and delivered by the Borrower in connection with the issuance and sale of the Note, and the Documents described below, and have executed and delivered the Documents and this Certificate on behalf of the Borrower, by subscribing their manual signatures thereon. B. This Certificate is delivered in connection with the issuance, sale and delivery of the $713,000 City ofNew Hope, Minnesota Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) (the "Note") of the Issuer, under and pursuant to a resolution of the governing body of the Issuer adopted on July 26, 2004. C. The proceeds of the sale of the Note will be loaned to the Borrower and will be used, together with certain other moneys, to (i) pay for or reimburse the Borrower for the capital costs of the Project, and (ii) pay certain expenses incurred in connection with the issuance of the Note. D. The Borrower has all necessary funds required to pay Project Costs, as that term is defined in the Loan Agreement. E. The Borrower has received, reviewed, and approved the Note and the Pledge Agreement as to form and substance. F. The representations and covenants of the Borrower set forth in Sections 2.02 and 2.03 and Article 4 of the Loan Agreement are true and correct as of the date hereof. G. We have examined the Certificate of Officials of the Issuer, dated the date hereof, executed on behalf of the Issuer, and the facts recited in such certificate (except those facts which are solely within the knowledge of the Issuer or its officers, as to which we make no certifications) are, to the best of our knowledge, true and correct on the date hereof. H. All terms not otherwise defined herein shall have the same meaning as set forth in the Loan Agreement. II. THE DOCUMENTS A. The following documents have been executed and delivered this day on behalf of the Borrower (the "Documents"): 1. the Loan Agreement; 2. a Pledge Agreement, dated the date hereof, among the Issuer, the Borrower and the St. Anthony Park State Bank, a Minnesota banking corporation (the "Lender"); and 3. a Mortgage, Security Agreement and Fixture Financing Statement, dated the date hereof, securing payment of the Note (the "Mortgage") from the Borrower to the Lender. B. The Documents constitute valid, binding and enforceable obligations ofthe Borrower in accordance with their terms except as the same may be limited by bankruptcy, insolvency, fraudulent conveyance, and other laws affecting creditors' rights generally. C. The Borrower has full power and authorityto execute and deliver the Documents and to carry out the terms thereof. D. The execution, delivery and performance of the terms of the Documents will not violate any provision of, or constitute a default under, the Articles of Incorporation or Bylaws of the Borrower (collectively, the "Organizational Documents"), or any indenture, mortgage, deed oftrust, indebtedness, agreement, judgment, decree, order, statute, rule or regulation to which the Borrower is a party or by which it or its property is bound. E. Fryberger, Buchanan, Smith & Frederick, P.A. is authorized to prepare and file all Uniform Commercial Code financing statements necessary to perfect the security interest of the Lender in the Mortgaged Property (as defined in the Mortgage). III. APPROVALS A. By action of its Board of Directors, the Borrower has duly authorized the execution, delivery and performance of the Documents substantially in the forms executed and delivered on the date hereof and all other documents necessary in connection therewith and has authorized the Borrower to undertake the financing pursuant to the Documents. B. No approval, authorization, consent or other order of any public board or body (other than the authorization of the Issuer) is legally required for the transactions contemplated by the Documents. C. All approvals, consents, authorizations, certifications and other orders of any governmental authority, board, agency or commission having jurisdiction, and all filings with any such entities, which would constitute a condition precedent to or would materially adversely affect the performance by the Borrower of its obligations under the Documents have been duly obtained, except for such approvals as are not required with reference to the Project as of the date hereof. D. The Borrower has all necessary licenses and permits to own and operate its existing facilities. IV. NO LITIGATION; COMPLIANCE WITH REQUIREMENTS A. The Borrower is not in violation of any provision of its Organizational Documents, and it is not in violation of any provision of, or in default under, any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order, statute, rule or regulation to which it is a party or by which it or its property is bound, other than violations and defaults which would not have a material affect on the financial position or results of operation of the Borrower. B. The Borrower is not in any material way in breach of or in default under the Documents or any applicable law, administrative regulation, rule, judgment, decree, or order of the State of Minnesota or the United States. The consummation of the transactions contemplated by the Documents and approved by Borrower's Board of Directors, and compliance with the provisions thereof, will not result in any breach of any of the terms, conditions or provisions of, or constitute a default under, any lease, indenture, loan agreement or other instrument to which the Borrower is a party or by which it may be bound or result in any violation of any provisions of law. C. There is no action, suit, proceeding, inquiry or investigation, at law or in equity, before or by any court, governmental agency, public board or body pending or, to the best of the Borrower's knowledge, threatened, against the Borrower affecting the corporate existence of the Borrower or the titles of its officers to their respective offices or seeking to prohibit, restrain or enjoin the collection of revenues by the Borrower, other than collection proceedings in the ordinary course of business, or in any way contesting or affecting the validity or enforceability of the Documents or contesting the powers of the Borrower to execute and deliver or to consummate the 3 transactions contemplated in such documents wherein an unfavorable decision, ruling or finding would materially adversely affect the validity or enforceability of the Documents. D. There are no other legal or governmental proceedings pending or, to the best of the Borrower's knowledge, threatened or contemplated by governmental authorities or threatened by others contemplating the liquidation or dissolution of the Borrower or threatening its existence or to which the Borrower is or may become a party or of which any property of the Borrower is or may become subject, other than ordinary routine litigation incident to the kind of business conducted by the Borrower. E. There are no other legal or governmental proceedings pending or, to the best of the Borrower's knowledge, threatened or contemplated, seeking to restrain or enjoin the issuance, sale or delivery of the Note, or the payment, collection or application of the proceeds thereof, or other money and securities pledged or to be pledged under the Loan Agreement or any other agreement or in any way contesting or affecting the validity of the Note or the Documents, or the existence or powers of the Borrower or the right of the Borrower to finance the Project. F. All agreements of the Borrower set forth in the Documents to be complied with and obligations to be preformed by the Borrower on or prior to the date hereof under the Documents have been complied with and performed on or prior to the date hereof. G. No further approval, consent or withholding of objection on the part of any administrative or regulatory body, federal, state, or local, is required in connection with the execution and delivery by the Borrower of the Documents. V. STATUS OF BORROWER A. The Borrower is a nonprofit corporation organized, existing, and in good standing under the laws of the State of Minnesota, is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), exempt from federal income taxation under Section 501(a) of the Code and has full legal right, corporate power and authority to own and operate its properties. The ownership and operation of the Project and the facilities financed or refinanced from the proceeds of the Note are not "unrelated trades or businesses" of the Borrower within the meaning of Section 513 of the Code. The Borrower owns all the property constituting the Project and no part of the Project will be used in connection with an activity that constitutes an "unrelated trade or business" of the Borrower (within the meaning of Section 145 of the Code). Not more than 3% of the proceeds of the Note will be used in any unrelated trade or business (as such terms are used in Section 513(a) of the Code) of the Borrower. The Borrower will maintain its status an organization described in Section 501(c)(3) of the Code. El B. The true and correct legal name of the Borrower is People Incorporated and its true and correct mailing address is 317 York Avenue, St. Paul, Minnesota 55101. C. The Project consists of property owned and activities conducted in furtherance of the exempt purposes of Borrower. No portion of the proceeds of the Note is to be used for any purpose other than the exempt purposes of the Borrower. D. The proceeds of the Note will only be spent for eligible costs within the jurisdictional limits of the Issuer and the Cities of Oakdale, Richfield, St. Paul and Brooklyn Park, Minnesota. E. The Project will be owned by the Borrower so long as any portion of the Note is outstanding. The Borrower does not expect to sell or otherwise dispose of the Project during the term of the Note. VL RECEIPT A. On the date hereof, the Borrower received from the Lender, as purchaser, for the account of the Issuer, a portion of the proceeds of the Note, in an amount equal to at least $35,650, which is the lesser of 5% of principal amount of the Note or $50,000. VII. EXHIBITS A. Attached hereto and identified as Exhibits are the following: Exhibit A — Officers and Directors. A true and correct list, as of the date of this Certificate, of the members of the Board of Directors of the Borrower and other officers of the Borrower, the dates of their appointment or election and the dates of the commencement and expiration of their terms of office. 2. Exhibit B - Incumbency Certificate. The true and correct names, as of the date of this Certificate, of the officers of the Borrower specified therein, who have been duly elected to and do now hold the offices in the Borrower therein set forth; and their true and correct signatures which appear and are set forth opposite their respective name and title. This Exhibit may be prepared in several counterparts, all of which constitute one and the same Exhibit. 3. Exhibit C -- Articles of Incorporation. A true and complete copy of the Articles of Incorporation of the Borrower and all amendments thereto, duly adopted by the Borrower, and such Articles of Incorporation, as amended, are in full force and effect as of the date of this Certificate and have not been further amended from the form attached hereto, and the Board of Directors of the Borrower has taken no action for the purpose of effecting any further amendments or modifications thereto, since August 2, 2004, the date a true and correct copy of the Articles of Incorporation was most recently certified by the Minnesota Secretary of State. 4. Exhibit D -- Bylaws. A true and complete copy of the Bylaws of the Borrower and all amendments thereto, duly adopted by the Borrower, and such Bylaws, as amended, are in full force and effect as of the date of this Certificate and have not been further amended from the form attached hereto, and the Board of Directors of the Borrower has taken no action for the purpose of effecting any further amendments or modifications thereto. 5. Exhibit E -- Internal Revenue Service Determination Letter. A true and correct copy of a determination letter from the Internal Revenue Service. The Borrower has not been notified, since the date of the attached letter, that such letter has been modified, withdrawn, rescinded, amended, repealed or revoked and, to the best of our knowledge and belief, the determination expressed in the attached letter remains in full force and effect on the date hereof. The undersigned know of no adverse action being contemplated by the Internal Revenue Service with respect to the tax-exempt status of the Borrower or any meritorious reason therefor. The Borrower has not changed its purpose, character or method of operation since the date of the attached letter to any extent which would affect the tax-exempt status of the Borrower. Exhibit F -- Corporate Resolution. A true and complete copy of an extract of minutes which includes the action by the Board of Directors of the Borrower taken at a lawful meeting duly called and held on March 23, 2004, at which meeting a quorum was present and acting throughout, at which the Board of Directors approved financing for the Borrower through the Issuer, with the Lender and such action has not been amended, modified, rescinded or revoked and has been since its adoption and at all times thereafter, to and including the date hereof, in full force and effect. Exhibit G -- Reimbursement Resolution. A true and complete copy of a resolution of the Board of Directors of the Borrower, adopted at a lawful meeting duly called and held on March 23, 2004, at which meeting a quorum was present and acting throughout, at which the Board of Directors declared their official intent to incur expenditures with respect to the Project and reimburse expenditures from the proceeds of tax exempt obligations, and such resolution has not been amended, modified or rescinded and is in full force and effect on the date hereof. ll VIII. CONCLUSION To the best of our knowledge, information and belief, there are no other facts, estimates or circumstances that would materially change any of the foregoing certifications. The representations contained in this Certificate are made for the benefit of the Issuer, the Lender and Bond Counsel and my be relied upon by the Issuer, the Lender and Bond Counsel. (remainder of this page left intentionally blank) WITNESS our hands as of the date first above written. PEOPLE INCORPORATED MJdooll5576100000010ERIGJ7783. WPD EXHIBIT A OFFICERS OF THE BORROWER AND MEMBERS OF THE BOARD OF DIRECTORS Name Office or Member Term (month & year) Begin End Scott Sponheim, Ph. D. President June 1998 June 2007 Nancy McKillips Vice President June 1999 June 2007 Dick Nicholson Secretary June 2000 June 2006 Lee Carlson Treasurer June 1996 June 2005 Senator Ellen Anderson Member June 1996 June 2006 Marge Barrett Member June 2003 June 2006 Elizabeth DeBaut Member June 2002 June 2005 Commissioner Gail Dorfman Member June 2003 June 2006 Steve Fenlon Member June 2001 June 2007 Litton Field, Jr. Member June 2003 June 2007 Janice Hogan, Ph. D. Member June 1995 June 2007 Sidney Lange Member June 1984 June 2007 Bob Parish Member June 2000 June 2006 Thornton Powell Member June 2003 June 2007 Patricia Rorke Member June 2000 June 2006 Charles Schulz, M.D. Member June 2000 June 2006 Macey Wheeler Member June 2004 June 2007 Mary White Member June 1999 June 2005 Tim Burkett Executive Director Appointed NAME Scott Sponheim, Ph. D. Dick Nicholson Lee Carlson Tim Burkett EXHIBIT B INCUMBENCY CERTIFICATE OFFICE President Secretary SIGNATURE Treasurer Executive Director M ,� II Y)1 9c AH go 311hnm i[hroe Presents Shat (lfame, Oreering: Manor Articles of Incorporation, duly signed and acknowledged under oath, have been recorded in the office of the Secretary of State, on the _lst-- day of July , A. D. 1969__ for the incorporation of People, Incorporated under and in accordance with the provisions j the Minnesota Nonprofit Corporation Act, Minnesota Statutes, Chapter 317; Now, f41herefore, I, Joseph L. Donovan, Secretary of State of the State of Minnesota, 6y virtue of the powers and duties vested in me 6y law, dohereby certify that the said ----- People. Incorporated is a legally organized Corporation under the laws of this State. Witness my official signature hereunto sub- scribed and the Great Seal of the State of Minnesota hereunto affixed Yhis__..._=first—_.— ..... ___day of July -in the year of our Lord one thousand nine hundred and sixty–nine A Secretary o AD— I- i fr_- i 21 o � + ` n zza., a 5 .-. a:a•- .jnagc Lent: a: fact _ •- '[ i t:l t' i i:' [d S t, t mal care, Ii en k. r - h,c uP c _'ct a recc:.y j or ..t.... a c ' n t f• c'. t A xli i the'a:ore-:1 - 1 '6n I : ? xc era i v¢ra C.EJeT a '.ha < rat:Pc AvCe4e 1 C ,..e R .•. ota. �. P „♦ .h r.dra;irl 1,r.cx,� en :+ecv1 5n ie io. ..+'Neat., .v 'cher. I e ice t rl ers. �.� i i 11� i WOW+-atK��� ( 1 • � f f 289 The :5R11CLP V. - -. _' E' c:roe: at ., is ... .'.^,e C of [t. Paul ,: f.U.1 , ' t - ARTICLE VI. 'e5^ofshe 1 'C:::::4:b .rs hereat ani their Inst C:'E1 LP aLLieS$t5 ' am -af Ltl Ctt '- 111 T_Y.Chdr,S 2:. 1'a Yl, hi ..as. Ld: a - ys�; dkl IC1 P latic ..-Ve,ue ki tirtsc:a. ,Paul; DavidLtug :', c - 7 � eI1A - St. Pa.1 ;' M]rnesoca.R*o• :< v v i. Aa £hs 132o Cibbs Averru, Si Pa 1, Ht,.veseta, tints , 12 21 S. C.,r wce Re. Yd neap_i is, 1Ghre sou. / _tI 3 1 i _. .,7hfis r to . if shalloVve=• in z Ro.td ti _ I Iht- r( (s)-„ a,re ^. ,•oet2e„ (ic1 1 111 O 'lt '.f!.. (CY other tben the Errst ii�; 1 ]tree C15-.CCr5i3C n ` ja " I rz tha CLIC 6tPI :Y of hP71 A l X h l ai 4'1 '(r r6 tCn6 bt elected L i C !t p ep. .1 pDir[ I0.3II illn the fiL4 1 Z J ! p ch (I)Fea -rd .I chat SYCCe3 - 1. c an,, ( a fit z -ldt c._f-p address Cf path Dilrecz.rl as V ASc Paul, mossasota / kz¢ a3 u3 Per --lard AV p. "St - hGnvecota eicy ti.. rltterld ,C P ° _ }IinOe3e [d i Su r chs'. 172b CihbS - c o - ?..I .,,, ltlnvesota ,. '_ _^- *L—c c a Minveaodlis, ffiunaagca . t _ .e.. i.,i.e. a x. I't F'Rill- u , 4. St. Paul, Hi ..... ta. - 1 F s. � r cirat:l.n n,ce n, Us ( .he cvrnvrat ion.' - AqTicyz i L1 . Th'tn1 cc rpn. art. nal1 ha ?vrs.,^al Liability for, I ARTICLE U. The< ciYr has nI stock, and has' authnn tL m a y ,:,ai ,�^o tsaue stock. _ d t • 'a.` ter-?='� `.- . ,. ��._. e�t:�'�'1'a�°.�#r' .7"-�k '3.:i�"f". "�s`'�r���'. a� 3 r TR ff - - , CERTIFICATE OT HE t1MENT 'i's„ �We, the undersigned, David E. LingandGeorge ''$: MIerrisru, Jr., 1 respectLvely the president and secreeery of People, Incorporated, a non- pro if.F corporation, do hereby certify, that ar. a caetiag dt the cumbers of said corporation duly called' andheld is the Cicv of St. Yeut, Hirmesota, on May I', 1971,.at '8:30 o'elock P. H., at which meeting a Majority of the members were represented in person or b; prom ,.resolutions a' herein- after at forth, were adopted by a sjoricy v.-. of said_ seers - - _ "RESOLVED, chat the Aoticies of Ineurp.r.ti.. of•People-,'Pincor- ' ,,I,,ozaIed be, and the same hereby is, amended so as to add thereto an AP,TICLE 71*l,`y which satri AkTiCLE XI, reads as foiicws: ARTICLF XT. Upon dissoi urian of the corporation, the assets of the corporation sbali be dis¢>u tea exclusively to cheritAble ' oraanizltioeis thon.exer:'pt under Section 501.(,)(3) of tha 1 Internal Revenue Code, or to a local, state or federal r, government to be used exclustveiy for rublic purposes. RESOLVED FURTHER, that the'pre :Cera and secretarpbf this cur- - 1 poration-be and 'they hereby are, authorised andObyfected to make, ..9c.", and AtknEwledge a,certificate under the corporate sea! of this corporation erbiacimg the f going resolution, and to cause sucn certificate to be ' filed andivaco d in the manner required by LweP - d fur the ce.'Lifv h thesaid amendment we proposed by ane Boar n( 1ree,tors by es 1 cion _nc-maetina duly called and}hale on the m e v of April, 197.1,,.hid fesolution set forththe above proposed ') ama.Wnt and dtrecced that it be submitt,�'d for adoption at the meeting of the„bembers. Notice of the meeting of ;relbecs, stating that pyrposo; was gig{2n to,eacb member enc tied to date _ the proposed_ amendment, and :.n a e _ , 4ficer and director reg .less o_` h ing rights. —,his Cer tiftca to is exccv tee puts uant to v A 317, Sdbda r -ion i af� and procedure edopteld are in conformity h HSA 311 .27 Kbd -'moon ?, IN TESTIHOft WHEREOF, we h.-ahet cunni set ourr hands t i day of Septa be; •1"1971. IN THE PRESENCEOF: ' .PEOPLE, INCORPOR.ITED David -E. Ling, President By Knieri eman 0 aLSec eta STATE OF AISNESOTA -) _s. - COVNTY O R.V15IF 'On this tla5'ot Sept, le; i, before me, a Notari Public wichia and fou unty, personally ; said @a'appeared ;.via E. Ling and George S. Knieri en Jr., to ne perponeliy known, brho, being each by ME duly ss. -oro d d'say that ey ,to to actively the President and .Secretary of the corporatibn named -in th fore- going sur umen t, aha Rbat tire seal affixed to as id instrument is the corp rate' s..b: d '-said corporation, and :that said irtitruoent was •signed and sealed -I be- het t: -G:d,t orporatiarn by au&rityof'its- Board '�oi ,UiX4c to r,,` -aids. id aid Y:' 'ding nd poor ge S. Knit nenen, Jr. arRr,eledged card n 2iument to be ch�ee ,act a deed of said corporatibn. Y j K - r.a rcEt+ILMAHfltt - - t n r wcmmh sae+F Y' 5 e 3R 4P.bv y _%L•Ftl�..R9'�.rvi.YhS •�.nms...._.. .. - 0 X 1 i, e .3> 164 _ , _ STATE PriMINNEkTA ` Jptp GFS A • I by iij l -el t e t `ti.-' - - mSTrumen]'+yts },�: tc tr Uf en Its -f S ,• ,. T L � 5 A oN7cs Msup _hzy �• • { vrros+yuty rt of sta.e' ii✓✓ I, - % vi a; < � s r,, I M ,I�'` �•V1C7 Z -h 1r, 1 r .. 1 I-II r7 ��s� 1'�I .f�1 �s� J To -,11 To Whom These Presents Shall Come, Greeting: hsrec,s, an irorcement of Merger by anis between People, ;nc rorcte.'. ;n!' �cntral Pcnor, 1 innesoti nonprofit corpora— rilv n9 $lyd, certifier' %rnd acknowledyred under oath, has ;+n ^i'. 1',^ 'E-rrt? in +.his office on the 18t: day of December, " +''!` o'clock ..., for the merger of the above named corrorations into and under the name of People, Incorporated, nursuant to the provi^ions of the lAnnesota Nonprofit Corporation cl -.rter 77.7i; :"Annesota statutes. therefo-•e, T, Jn ..:lcrson rrovre, Secretary of .. to of the tate rf ; innrsot , i'.y virtue of the powers and ',IticF ,rr-=+.e` in rnr tv ;.•, ,io d,eret„v cert,'.-fy that said above ':':f,A ..... ].•'ti; ((p .; •••, 1C":'. h_J, =iIET`=''e-`I and m:2de al1 oxistill."' ”"rJ •... !'. 1.^a Un'le"' ❑[2 (Go `n.�}•�IC, LP.CJT'nJ T': tE"., �.itd: the Tbl9ers, ,:n'4 rri i', n sul;ject to td,e lilnititions, duties and restr'ictionr. cr}a -), ',y lair-orertain thereto. ':'ITNViS, my official s'i ;nature hereunto subscriled %nd thc= Ire&t '.cal of the .^,tate of Minnesota hereLnt.o affixed td',is eighteenth i,/ nn iec'61n1"er, ,. I. i.S%). (G�LCLct. *rC �lZ6L�Y +,i.CTC tr;r:! o- rt�ti;t) (;VVErNIT 01 (J9 !:aving nein .;Iv w—Irl"'I"Itod W!"", been duly in. of p•,ra ted ,',odert!,c M!�: k! r, I t il� Otn of organi Z1001's onder 1he lll'lviblic� if fill, L, 1;l I (,, ) ( I Rc: Inccrrov:t, WHEREAS, the Board of Directors of each PEOPLE, INCORPORATED and, CENTRAL MANOR dean, it advisable and in the best interest of each• corporation e as authorized by the laws and that CENTRAL MANOR and PEOPLE, INCORPORATED. mergCothe terms and conditions hErel-,,- statutes of the State of Minnesota and pursuant I it c corTOratio T)urr,-Liant t Act, cl,-Irt after set forth, NOW, THEREFORE, it is herebv agreed by and iVtweell the Bnarcll; ()' J)ircclor, Stnte of of PEOPLE, INCORPORATED and CEKTfUi),l` MANOR as fullllws; 1. MERGER PEOPLE, INCOKPOR,�JEL h,:rol,v mcry;es itself into C CENTRAL MANOR hereby merges itself into PEOPLE, INCORPORATED. PEOPLE, INCORPORATED shall be the surviving corporation. 11. The ARTICLES OF INCORPORATION Of the survivinv, corptiraLioll T-jfnt�, nnA be as follows: p%iiTICLE I tl The name of this shall he PEOPLF, ,file purposes and t.!.Q corpolat),,!, ;,r( to ill I P�-" ill Ill I ..... . of the world any all'i �l I i ()I th moult fully and to the salLit exLeFs, at; JLJLUY-11 do, viz; - 1,V To construct, establish, own, operate and manage residential facilities for individual., in Ll,e conaltlaity who }ave btion institutionalized (), !or other r•sson art no, ;11,lc to rei.,trn or remain with til,it fas,41v or some"imes known as loalfway holl 1, a'jV, 62 0 all the powers granted by law to carry out and the (urc MQ ng purposes inc lud 1. ill; the acquisition 1;!ud ❑pd Yly;ht� in land necC'Ssary or incident thereto, rroa Ir Wi. f.h are other agency nt , Local, county, state ,1 the Icd,ra1 novka rnment concerned rt th Lh, Lfel,cl of welfare, t,i ;,,a„_ Such ,out :art agreements and other arrangements with e nv, rnmcnt 1 Vies, or wit. In-.ivn to persons or agencies, as are n,cessary and 'c Lrthl to tatty out and fulfill the !I ,e -named purposes and to issue evidences of indebtedness in rcl;!t)on to any such contract, agreement or arrangement of mors Ra Fe, pledge or other hypothecation; To manufacrure, purchase or otherwise acquire, and to hold, own, murtRage nr otherwise lien, pledge, lease, sell, assign, cxchanr,c, transfer or in oily manner dispose of foods, wares, ,ar rchnnd i sc and personal property of any and every class and cic,s..-i.pti.on which may be necessary, incidental or proper to cite exc rc is.• of am, and al.l of the aforesaid purposes of the corporation; To transact d& carr: on all or any outlier business which may he necassarv, incidental, or proper to the exercise of any ':r rll of the r'sa d purpascs of the corporation; tui Loregning shall not Oe acid to limit or restrict, it manner, the general powers conferred on this corporation i the laws Of tie State of Plinnesota. ARTICLE ill The corporation does not ANON pecuniary.. gain, incidental ,r otf- i.se, to its me ... be IIs, - - AR'r I, I? -Ll "1^e corporation shall have perpetuel. existence. ARTICLE V .. rc;i.stered office of He corporation is in the City of PfudI 17iunesOta. h T1CLE VI 1're ;m. na _,emerit of this corporation shall be vested in a.Board of ui.rr:ctors composed of not leas than five (5) and not: more n.r a -cn (1,-,) i3il-Q_ctors. Terms and tenure in office of -,'.jrccnrs mai he set ov the By-laws. The new Board of ;)i.rc:ctnrs, cOnsistinh. of fourteen (14) in number, shall hold of! i.c .Intij the ir-SL meeting of the members of the corporation,.:. time ,o., Ju ectors shall be elected by the members of and if the members do not elect new Directors thV first Yoard of Directors shall hold office for one (1) •eut.Ji the it successors are duly elected and qualified.. ,anti -lost office address of each Director of the new ),rectors is as follows: tames .ant?” 1. Bourdaghs !iatte COWlea Addresses 2358 standridge Saint Paul,. Minnesota 55109 2201 -3rd Avenue South -x!`102 Minneapolis,Minnesota 55404 2003 West Skillman Avenue, Saint Paul., Minnesota 55113 Ernest E. Cutting 3145 -40th Avenue South Minneapolis, Minnesota 55406 Lawrence K. Davies 585 South Saratoga Saint Paul, Minnesota 5 _5 i 16 Marjorie Erickson 1423 West County Road F. Saint Paul, Minnesota 55112 Y' Diane. E. Follmer 1854 Laurel Avenue Rex,_Knowles Saint Paul, Minnesota 55117 Lincoln Richardson "otro Uri,— Be, BLoomington, "irinesorn rank A 'S t af Penson 762 Sout1hVU'X"C­ Fl Ell Directors of the corporotion need trot v corporation. AR'111r[,E VTT 1'he members of the corpor"' 10•: '1's31 for corporate o��ligaLluos� ARFICU ',!If] Thc cnrpornLloit I,ni; to caniLnI 'tocL L%t:o ms to 1!rsue-..n, capital EtLct, . O(Amb­r' "t�elcrt .r -'et id ! 61 C C Ina, a I t o0 se. . . . Upon (I is u L i o, r.ni:po.' !�_u 'i W c.orpor;3 t ',,I orgaaizario-,F. pope --c! !Tnt i the Piy-Law-; of ITUPLE, iNC0T0,'0ifilTMi b,? th' T'y-Lew-, of 0— Robert L. Hansen 3161 West Owasso Saint Paul, Minnesota 55112 Theodore .].Kern 109 SE First St-zeet New. Brighton, Minnesota 551I2 Rex,_Knowles 2690 North Oxford -41225 Roseville, Minne!;otA-55113 wii David E. Ling 3256 North Victoria Saint Paul, flinnegoti 55112 Marilyn McClure 1008 AroRn A,—ii,x. Saint Paul, Hinnesoti 55111 Lincoln Richardson "otro Uri,— Be, BLoomington, "irinesorn rank A 'S t af Penson 762 Sout1hVU'X"C­ Fl Ell Directors of the corporotion need trot v corporation. AR'111r[,E VTT 1'he members of the corpor"' 10•: '1's31 for corporate o��ligaLluos� ARFICU ',!If] Thc cnrpornLloit I,ni; to caniLnI 'tocL L%t:o ms to 1!rsue-..n, capital EtLct, . O(Amb­r' "t�elcrt .r -'et id ! 61 C C Ina, a I t o0 se. . . . Upon (I is u L i o, r.ni:po.' !�_u 'i W c.orpor;3 t ',,I orgaaizario-,F. pope --c! !Tnt i the Piy-Law-; of ITUPLE, iNC0T0,'0ifilTMi b,? th' T'y-Lew-, of 0— _J 2. The first annual meeting of .the members of the suirviving co+;;-. poration after the effective date hereof shall be the annual meeting provided-ity the By -Laws of PEOPLE, INCORPORATED for the year 1976. 3. The first regular meeting of the Board of Directors of the. i surviving corporation after the effective date hereof may be called or convened in the manner provided in the By -Laws of PEOPLE, INCORPORATED. 4. The surviving corporation shall pay all expenses of carrying this agreement into effect and of accomplishing the merger. 5. Upon the effective date hereof, the separate existence of CENTRAL, . MANOR shall cease and CENTRAL MANOR shall be merged into the surviving corporation in accordance with the provisions of this agreement. The surviving corporation shall possess all the rights, privileges, powers, and franchises and shall be i I _ subject to all of the restrictions, disabilities, and duties of each CENTRAL MANOR: 1 and PEOPLE, INCORPORATED. All _property, real, personal and mixed, and all debts - '? i j due to each constituent, corporation shall be vested in the surviving corporation. All property, rights and privileges, powers and franchises, and all `and every other interest shall be thec:aftcr as effectively the-property'of the surviving corporation as it was of the respective constituent corporations. The title of any real estate, whether by deed or otherwise-, vested in the respective constituent corporations shall not revert or be in any way impaired by reason of this agreement, provided thatall rights of creditors and all liens upon. the property of either' constituent corporation shall be preserved, unimpaired, and all debts, liabilities, and duties of each constituent corporation- shall attach to the surviving corpora- tion and may be enforced against it to the same extent as if -said debts, duties, and liabilities had been incurred or contractedby the surviving corporation. i 6. The surviving corporation reserves therigbt. to. amend, alter, , change, or repeal any provision contained in this agreement which may be contained in articles of Incorporation of a nonprofit corporation organized under the laws 01` r.a t.= of Minnea sot a. Ri:O'1JIS IONS FOR AGREEMENI' AND EXECUTION ' 1. This agreement shall be submitted to the members of the con- .r r: corporations at special meetings called for the purpose and, if approved, 0, xccutcd by rhe president and secretary of the constituent corporations :r: 1,ie offices of the Secretary of State of the State of Minnesota and - 11cv.1a 0 the '.;ounty of itemsey and State of Minnesota all in I 4 - �.-",iv' wl3 accordance nod pursuant !1-1 011 1-Irov'sion', of (ilt Mlillo:so:ci 0,)!,Ili Ll ]IM act. V. '.!�FIXTIVE D.,TC. T.E.fil0I tho rer' merger by the Secretary Of State. IN kIiITNESS WHERE0F, the COWtINICst Ct?rf0ra(-1011s have :10VELMLO caused these presents to be executed each 11V th,'IA' dine co",110ril-I'll officer= bV MIthii of their respcccivc Boards of Directors nW maM rs it accordance with Mnesotn Humes, Svctioc 21704, Sob" i, and io ao-,-cuywn,,I with 0, it respective Ar"cj,.,- of in.arpora: ion as of the. 15,0i day o! I c -I I., In p"same of: Wiest L. Gui:Ling' Its Prey lo�"L BY _As "Leo 'fz 0'rfice7s,` 0C PL0PLL Q t Cu Cowles, Its Secre tary 'Y 'Ce' NCORP L -Y TTC�ORP tATLD Impresume of As to the officers of CENTRAL/N'Nm CENTRO, ?"NOR fiy C01 -L R. SLIZI le I Its President. 15Y I John E. (it! this lith dal Ot. December, 1975, before me, a Notary Public a; nd;ck. s:li" County, personotty appeared Ernest E. Cutting and Bette Cowles, ,o mi perso.mlly i<irioiqri, Oij, !)eing each by Ric (July sworn did say that they are ie!::CLIVCIV the President and :he Secretary of PEOPLE, INCORPORATED, one of the corporations named in the [orei ing instrument, that the seal attached thereto ti the corporate seal of said corporation, and that said instrument was signed on betaI f of said corporation, by authority if its Board of Directors and said Ernest Cit " 1 Jr, ord 11-1-tO COwlei,r ncknowledized said instrument to he the free act and qTATE 0117 CoUr:TY OF "AlISEY this 15th day of Deceiriber, 1975, before me, a Notary Public Rams", COURLY, PiUrs0ilaily appeared Cort R. Strane and John E. t l me pa rs Ona Llv ;a,lown, i4no Deing each by me duly sworn did say that they 7 :: 'Plct lvl I tile President and the Secretary of CENTRAL MANOR, one of the C1'r,0r--31 i-li.S ilgPle, lin the fort"Cil i- 11stTklment, that said corporation has no rind rnat said instrument- was signed an behalf of said corporation its Beaten of Directors and said Cart R. Strane and John E. Baloga instrument to be tile free act and deed of said corporation. I 77i I J J 11 pv' "'! , � , "', I ' 1 11, 1 " I , LAII �!� , -I,- - I . �—%� M. CERTIFICATE Or APPROVAL We, Ernest E. Cutting, as President and Bette Cowles, os Secretary, respectively, of PEOPLE, INCORPORATED, a nonprofit col"POratiol, organized under the laws of the State of Minnesota, do hereby certify that at a special inecti1j, of the Board of Directors of said corporation held on the Ist clay of December, 1975' xV at 7:30 o'clock P.M., the following resolution approving the attached Agreement of Merger of PEOPLE, INCORPORATED and CENTRAL MANOR was adopted by said hoard, a,Lj directed to be submitted to the members of the corporation at a special meeting to be called for that purpose on December 15, 1975, with notice accompanied by a summary of the Agreement of Merger, and that at said special ',;,e said resolution was duly adopted by a majority of the members vctitig thereon, all in 'Statutes accordance with the provisions of Minnesotr� Sect ion 317.3" and the ticies of Incorporation and By-Laws hof PEOPLek6RPOITED, to-w-it: 4 -"RESOLVED that the proposed mer�,cr Into this corporation of CENTRAL MANOF,, a nonprifit corporation organized Under the laws of the State of lfiniiLsora, be and the same hereby is approved in-accorddnce wl.u-, tl-.e provisions Of a proposed AFrecment-01 Kerr--cr of PEQPT,'r'- INCORPORATED and CENTRAL KANOR, a COPY Of Which IS hereto 1U.,clIcd; and tnat said proposer? Agreement of Merger insofar as it constitutes an as1QnC'ir'1en1L of the Articles of Incorporation of tiiy ,jtrvjVj PEOPLE, is likcw-rez,j "RESOLVED FURTHER, that the llrcsicc.!;t -i, this Corporation be and tjjc; 'L,er�. k, v, to certify the adoption On thi� re 01-:' Of PEOPLE, TNCUaPOILA:T'ED and every ae!t -r IN WITNESS UERI.07, -z- PEOPLE, INCORPORATED this Decemhc.r' 1 pv' "'! , � , "', I ' 1 11, 1 " I , LAII �!� , -I,- - I . �—%� M. 0 1 I ;TQT. or PIIN,lEsorA ) L•�i 626 as. t:I4 Cii1 Uh 11"t-0SG� r Un this 15th day of December, 1975, before me, a Notary Public - ann for va i.J County, ers ovally a .� P ppeared Ernest E. Cutting and Bette Cowles �f personally Imown, who, being each by me duly sworn did say that they are p, rt. ivc l•: the President and Secretary of the corporation named in the foregoing c. ,pprovii, that the seal attached thereto is the corporate seal of +r por: u. ion, anti that said instrument was signed on behalf of said corporation v n, it:s Iinard of Directors and said Ernest E. Cutting and Bette Cowles tr wilent to he the tree act and deed of said corporation. 1,:• V4p 62T ;Ile, Cort !?" ntranc, as idont , jol 1 lialolgai. � 0C U, -Lary respecrivcly of CI ,'!"'."i .'NOR, " nonprolit , o' 1'. i ulder of the ,tete o, W", 9"0 - Ile J Oro D, , 1 r1 it: t hot ;it uli� Board of Diructn,v of Wd unr""SLin '"Id " r!, .t 7:30 AWS P,N,, W ""Kown" 1—din'. "K, oi ifer,k(r of PLARLF, LNCOrkiRml'¢heill'! - f, L� ,%:t W 1 dir"ted Co he QW104100 that said Hard of fArvotor Of $Aid tenSurs Qvip: nivqd poti,c d6a r'JUoQ"LY PdOjld O;V tC1111L!L-'Ii%, dL accordance with the pro visuKis of h4wa.,c _:i_ I'd E hI ArtiLIC6 Of TjjC,rp,j-,tjjjj .;:It! Lh( laws of the State a kmln� -ts, be and tho :Wjl, t r, o, im aitIPI 0'JL d III eiC-11' 0: !.C, sl I'Vle j rnj S I f j Ol Apmawnt of Wnwr ; !TX , eED z-110 k:- TI2AL KI.Nuil, a COPY of Which is ht MI -0 OMPA nd ; rMi that hyv! p",,,ed Aneownt uf f1rar insufar n� Q c.u1.1 it ur,b an of the Arvicks of jAcorporLj ,v ,,SurvivinE c," p,rat Wn, PEOPLE , J MC OR PO JPATED, u -,2j, ;jj,;,,ov,o "RESOLVED FUFTHF.1� , t ha t t Io it? 4— gi I t!nd LoCrcta'%- ai 03is curporacinin he and LhUy vercov ou 0DILKWHEW RK MCCLLO to certify the adoption of Qo; to on behaii ilf CENTR,d, said of ;i:ei Lo do n:1,; Lvory act. nee -.nary "I rrtiptir to she c,,rist,",natin of st,ij merger." IN WITNESS i-MEREof, we have ht-!LLIty sit t'til this j-'Lh !,jl.r "I December, 1975. fla 1011:1 iL:l let all STATE OF mi COUNTY OF R MIS& and Lo rte Perso respectivel �Cru,lican IaLd corpor �. aurnorit aclklto1,-106ge L, -,Hsi ti tit3 )ss, !" oil ;.hie 15th day of December, 1915, before me, a Notary Public ' ;nrc for 'am" :;aunty, personally appeared Cort R. Strane and John E. Baloga to me personally known, who, being each by me duly sworn aid say that they are respectively the President and the Secretary of the corporation named in the ioregoing instrument, that said corporation has no corporate seal, and said instrument was signed on behalf of said corporation by authority of its Board of U:.rCCLors and said Cort R. itrane and John E. Baloga acknowledged said instrument to i.,r„ the free rrct and deed of nid c:orpovation. vHi 1'J'±t?Ilt lv J 'Jed for r,- al o e on thelf diy of A. 0. 1'-D24�a-JLo'cloc'• R1.,.. ^.nd vii -13, uuly %.0;dad in Eooi,L ya Of 1,11corporaiions, on p48= S__retary of State I 789 CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION OF PEOPLE, INCORPORATED We, the undersigned, Ernest E. Cuttinq and Bonnie J. Zopfi, respectively the President and the Secretary of People, Incorporated, a non-profit corporation, do hereby certify that at a regular meeting of the members of said corporation, notice of such meeting, the proposal to amend, and the nature of such proposal having been mailed to each member entitled to vote thereon at least ten days and not more than thirty days prior to such meeting, duly called and held at Bethel. Seminary, 3900 Bethel Drive, in the City of Arden Hills, Minnesota, on May 12, 1980 at 7:30 P.M., at which meeting a quorum of the members were represented in person, resolutions, as hereinafter set forth, Were adopted by a majority of said members present and voting: RESOLVED, ghat Article IX of the Articles of Incorporation of P?ople, Incorporated he amended to read in its entirety as follows: ARTICLE IX. The Articles of the Board of Directors of this corporation shall be the only members of this corporation. Each member of the Board of Directors of this corporation automatically shall become and be a member of this corpora- tion concurrently with his or her becoming a member of such Board of Directors, shall continue to be a member of this corporation for so long as he or she is a member of the Board of Directorr., and automatically shall cease to be a member of this corporation concurrently with his orher ceasing to be a member of the Board of Directors of this corporation. The members of the Board of Directors shall have voting rights only as directors and shall have no voting rights as members. y-53 790 IN WITNESS WHEREOF, we have subscribed our names this 15th day of July, 1980. IN PRESENCE OF: "yC7�liY'a �.KCk.1.Cr.._<tib�_ STATE OF MINNESOTA) )Ss. COUNTY OF RAMSEY ) Ernest E. Ctting, President Bonnie J. r Secreta Ernest E. Cutting and Bonnie J. Zopfi, being first duly sworn, on oath, depose and say: that they are respectively the President and secretary of People, Incorporated, the corporation named in the foregoing certificate; that said certificate contains a true statement of the action of the members of said corporation, duly held as aforesaid; that said certificate is executed on behalf of said corporation, by its express authority; and they further acknowledge the same to be their free act and deed and the free act and deed of said corporation. Ernest E. Cutting, President Bonnie J. Secret Subscribed and sworn to before me this 15th day of July, 1980. 3r//conn 1 rotary- Public) r+} +•xa�•� 1 ]0, 1986 J STATE OF MINNESOTA DF.VA3T'AE@T OF STATE n - i t:a1e0/ cNtfy that the within ! �; .�snumenf halt filed fa record in tMs g clfce on the-1Z.day of s A. D. 19 -.&, at�o'dxk t and MS duly rcwrded in Book f N Incorporations, on Page' Y k SecrerarY N Qfite 1 Y r� , State of Minnesota f Office of the Secretary of State X2`79 '/ pc = Notice of Change of Registered Office—Registered Agent or Both Nemo of Corp«.non by Pursuant to Minnesota Statutes, Section 302A.123, 404.10, 317.19, 317A.123 or 308A.025 the undersigned hereby certifies that the Board of Directors of the above named Corporation has resolved to change the corporation's registered office and/or agent to: Aeent's 11 you do not wise to del! if 1:11 an ligan I, you must list "NONE" In this Iez. DO NOT LIST THE CORPORATE NAME (Please Print) FRknI)� 5�,k I"rFFNio.� Address (You may not Ilat a P.O. Boa, but you may list a rural route and Goa numoar) (No. s street) '3 "% q (.I A/ f vE2 S I T ✓ Yl; V>` CIry Sl. Pn✓L —1N County y i`RMS — 7Sp MN SJ JpJ Melling (It different then eddNl aonve—P.O. Boz le acceptable) Mdms City County Zip MN The new address may not be a post office box. It must be a street address, pursuant to Minnesota Statutes, Sec• tion 302A.011, Subd. 3., 303.02, Subd. 5., 317.02 Subd. 13., 317A.01 Subd. 2. This change Is effective on the day it is filed with the Secretary of State, unless you Indicate another date, no later than 30 days after fil- ing with the Secretary of Stale, In this box. I certify that I am authorized to execute this certificate and I further certify that I understand that by signing this certificate I am subject to the penalties of perjury as set forth In section 809.48 as if I had signed this certificate under oath. Name of ONiosr «Other Authorized Agent of Corporation signatuya (Please Print) FRknI)� 5�,k I"rFFNio.� The or Office Oats TKEY�SJREfE, i not write below this line. For Secretary of State's uw Filing Fee: E35.00 Return to: Business Services Division Office of the Secretary of State 180 State Office Building St. Paul, MN 55155 (812) 295.2803 Make checks payable to: Secretary of State STATE OF MINNESOTA DEPARTMENT OF STATE FILED MAY 2 3 1991 f�z4NAW.vd4w 6' vetary of sh" TO FILE THE REGISTRATION FOR THE 1980 CALENDAR YEAR YOU MUST ALSO COMPLETE THE REVERSE SIDE OF THIS FORM. 1 4 / 23 MINNESOTA SECRETARY OF STATE - 1i92 AMENDMENT OFARTICLES OF INCORPORATION BEFORE COMPLETING THIS FORM, PLEASE. READ INSTRUCTIONS LISTED BELOW. CORPORATE NAME:(List the name of the company prior to any desired name change) People, Incorporated This amendment is e0ectiva on the day it is filed with the Secretary of Slate, unless you Indicate another date, no later than 30 days after filing with the Secretary of State. July 26, 1994 The following amendment(s) of amides regulating the above corporation were adopted: (Aided fun text of newly amended argde(s) indicating which arffde(s) is (are) being amended or added.) II the fun text of the amendment win not fit in the space provided, attach additional numbered pages. (Total number of pages including this form _ ) ARTICLE r Section z. RF0_1S7C*F'0 ERMNMM. OFFICE, is amended to read (after striking everythingin this section): Its principal office shall be located at 317 York Avenue, Saint Paul, Minnesota 55101. Note: This is an amendment to People, Incorporated By Laws. Articles of Incorporated remain as before. This change is being filed to advise the Secretary that People, Incorporated cor- porate headquarters has moved to the above address. This amendment has been approved pursuant to Minnesota Statutes chapter 302A or 317A I certiy, Aral I am authorized to execute this amendment and I further certify that I understand that by signing this amendment. I am subject to the penalties of perjury as set forth in section b;...48 t8 ned this amer iment under oath. (Signature of Authorized person) INSTRUCjFAa593 1. Type or prim with black ink 2. A Fding Fee ct: $35.00, made payable to the Secretary of State. 3. Return completed forms to: Secretary of Slate 180 State Office Building 160 Constitution Ave. St. Paul, MN 55155.1299 (612)296-2603 0e 340 B .M FOR OFFICE USE ONLY STATE OF MINNESOTA DEPARTMENT OF STATE FILED AUG -51994 /w ^T, senefery Of &fete �- F I ARTICLES OF AMENDMENT AMENDING AND RESTATING THE ARTICLES OF INCORPORATION OF PEOPLE. INCORPORATED ARTICLES OF AMENDMENT AMENDING AND RESTATING THE ARTICLES OF INCORPORATION OF PEOPLE, INCORPORATED People, Incorporated, a Minnesota nonprofit corporation (the "Corporation"), acting through its President, hereby files these Articles of Amendment amending and restating in its entirety its Amended Articles of Incorporation as follows: ARTICLE Name The name of the corporation is People, Incorporated (the "Corporation'). ARTICLE H Purposes and Activities The Corporation is organized and shall be operated exclusively for charitable and educational purposes within the meaning of Sections 170(c)(2) and 501(c)(3) of the Internal Revenue Code of 1986, as amended ("the Code"). Within the limitations established by the preceding sentence, the Corporation is organized and shall be operated primarily to: Provide services and otherwise promote independence in community integration for people with mental illness and other disabled persons, many of whom have complex and neglected needs; Manufacture, purchase or otherwise acquire, and to hold, own, mortgage or otherwise lien, pledge, lease, sell, assign, exchange, transfer or in any manner dispose of goods, wares, merchandise and personal property of any and every class and description which may be necessary, incidental or proper to the exercise of any and all of the aforesaid purposes of the Corporation; Receive, hold, administer and disburse any monies, securities, or other property of any nature or description, on its own behalf, or as trustee, which may be transferred to the Corporation by gift, devise, bequest, or otherwise; Invest the assets, including the income therefore, of the Corporation, whether held on its own behalf or as tmstee, in property, whether real or personal, of any nature or description; G98;: Act as agent, custodian, trustee or otherwise, whether alone or in the company of others, as fully and to the same extent as natural persons might or could do and in any part of the world; Transact and carry on all or any other business which may be reasonably necessary, incidental, desirable, expedient or proper to the exercise of any or all of the aforesaid purposes of the Corporation; The enumeration of the foregoing shall not be held to limit or restrict, in any manner, the general powers conferred on the Corporation by the laws of the State of Minnesota. ARTICLE III Powers The Corporation shall have those powers which are required by, and are consistent with, the purposes enumerated in Article 1I above, subject to limitations provided in applicable federal or state law or in its articles or bylaws. Within those limitations, the Corporation may act on its own behalf or as the agent, trustee or representative of others; buy, lease, acquire, own, hold, improve, use, and deal in and with, real or personal property, or an interest in property wherever located; sell, convey, mortgage, create a security interest in, lease, exchange, transfer, or dispose of all or a part of its real or personal property, or an interest in property, wherever located; and exercise any other powers conferred on the Corporation by Minnesota Statutes Chapter 317A. ARTICLE IV Restrictions Notwithstanding any other provisions of these Articles of Incorporation ("Articles'), the restrictions in this Article IV shall govern the activities of the Corporation. The Corporation shall not engage in any activity which may not be carried on (a) by an organization which is exempt from federal income taxation under Section 501(a) of the Code by virtue of being described in Section 501(c)(3) of the Code or (b) by an organization contributions to which are deductible under Sections 170(c)(2), 2055(a) and 2522(a) of the Code. The Corporation shall not afford pecuniary gain, incidentally or otherwise, to its directors or officers, and no part of the net earnings of the Corporation shall inure to the benefit of any private individual, except that the Corporation shall be authorized and empowered to pay reasonable compensation for services rendered and goods received, to provide reimbursement for reasonable expenses incurred on behalf of the Corporation, to provide indemnification and pay premiums for insurance protection without reimbursement to the full extent permitted or required by applicable law, and to make payments and distributions in furtherance of the purposes set forth in Article 11 of these Articles. The Corporation shall not, as a substantial part of its activities, attempt to influence legislation by propaganda or otherwise. The Corporation shall neither directly nor indirectly participate in or intervene in any political campaign on behalf of, or in opposition to, any candidate for public office, whether by the publishing or distributing of statements or otherwise. The Corporation shall not lend money to or guarantee the obligation of a director, officer, or employee of the Corporation or a related organization, or of the spouse, parents, children and spouses of children's, brothers and sisters or spouses of brothers and sisters of the director, officer, or employee. 3 yb93 I J G894 ARTICLE V Registered Office The Corporation's registered office in the state shall be located at 317 York Avenue, St. Paul, Minnesota 55101. ARTICLE VI Board of Directors The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors. The Board of Directors shall consist of a minimum of five (5) individuals and a maximum of nineteen (19) individuals. To the extent consistent with these Articles and permissible under Minnesota Statutes Chapter 317A, the Bylaws of the Corporation shall specify the term of office, method of selection, removal, powers and duties of the directors of the Corporation, the time and place of their meetings, voting rights and such other regulations relating to the Board of Directors as may be desired. An action required or permitted to be taken at a Board meeting may be taken by written action signed by the number of directors that would be required or permitted to take such action at a meeting of the Board of Directors at which all directors were present. ARTICLE VII Membership The Corporation shall have no members. 4 •l 011195 ARTICLE VIII No Personal Liability The officers and directors of the Corporation shall not be personally liable for the payment of any debts or obligations of the Corporation, nor shall any property of any officer or director be subject to the payment of the debts or obligations of the Corporation. ARTICLE IX No Capital Stock The Corporation shall have no capital stock. ARTICLE X Amendments These Articles may be amended as set forth in the Bylaws of the Corporation. ARTICLE XI Dissolution The Corporation may be dissolved in accordance with the laws of the State of Minnesota Upon dissolution of the Corporation, the Board or the officers acting under the direction of the Board, shall distribute the assets of the Corporation in the following order of priority: (1) assets received and held for a special use or purpose in accordance with the uses and purposes for which the assets have been received and held; (2) costs and expenses of the dissolution proceedings, including attorney fees and disbursements, and (3) debts, obligations, and liabilities of the Corporation. Any property remaining after these payments shall be transferred, in such proportions as the Board of Directors of the Corporacion shall determine, to one or more organizations which are exempt from federal income taxation under Section 501(a) of the Code 5 0996 by virtue of being described in Section 501(c)(3) of the Code, or to the State of Minnesota or any political subdivision or agency of the State for exclusively public purposes. No provision of these Articles shall be construed to affect the disposition of property held by the Corporation upon trust or other condition, and upon dissolution of the Corporation, such property shall be transferred in accordance with the trust or condition imposed with respect to it. CERTIFICATION The foregoing amendments to the Amended Articles of Incorporation of the Corporation have been adopted pursuant to Minnesota Statutes 317A. PEOPLE, INCORPORATED Dated: , 1998 By. Its P i ent (Corporate Sean STATE OF MINNESOTA OVART nOr STATE OP:47R34 v2 AUG 031998 pwaA rAMR., 6 ? n VA -M 4 AMENDMENT NEOSFOTAARSTIECCLREETSAROYFOIFNCOftPORAnoN NEW WSTMX1110W UPW 1111111EILAM WYM COMPLETING THIS FOWL 1. TAmorprint inweek link. 2, Tliere In a SW" fee pay" to to Secretary of State for Ming this 'Amendmemol'Ardoles of Inoorporation. a PAkm Coon~ Amendment Form and Fee to the address listed on On bottom of the form. CORPORATE NAM:: (Usithenerve oft? =nPany prior to any desired name change) 7, People, Incorporated TMs smandman"s effective On the day it is fled with the Secretary Of State, unless yoga indicate another date, no later dw. 30 days after sing with the Secretary of Stale. 30 days after f1lift The killowiing amendment(s) to articles regulating the above corporation were adopted: (Insed full text of newly amended article(s) indicating which articles) is (we) being amended or If the full IPA of the amendment will not fit in the apex provided, allachi additional numbered pages. (Total number of pages lnc'jding this brrra—.) ARTICLE I The nae of this corporation In People Incorporated. This arneridVinent has been approved pursuant to Minnesota Statutes chaptei,3024 or 317A. I certify that I am authorized to execute tht amendment and I further certify that I understand that by signingamendment, I am subject to the penalties ffi of perjury as set forth in section W9.48 as if I had signed this amendment u th.. (SignablWAulli Person) Narne and fellei*ione nunTlivc1corylac! person: Mary Martin, AttOrROT 651) 451-0550 Please print legibly- AA sgI* AN of the wiftmation en this form is public and required In order to process this filing. Failure to provide the requested i11110171060in will PreveM the ON" from approvirig or further processing this Ming, of you have any q�zft&3 p^ssse contest ft Secretary of I State's office at ("11)2W2603. 5YA71 OF MNNWTA VWAXY#A1W 1W TE secrelaryofsh" FW 180 80111110 OMo@ BlIdg., 100 Constitution Ave. JAN - 3 ?QDn 11 1 01102130 am Villas St. Pad. MIN 561561299, (881 )2982803 94"* 734W" d bft AMENDED AND RESTATED BYLAWS OF PEOPLE, INCORPORATED Effective: ARTICLEi.......................................................................................................................1 Offices............................................................................................................................ 1 ................... Section 1. Registered Office..............................................................................................................................1 Section2. Principal Office...........................................................................................:....................................1 Section3. Other Offices....................................................................................................................................I ARTICLEII................................................................................... 1 Members ARTICLEIII................................................................. 1 Boardof Directors......................................................................................... Section 1. General Powers ................ - ......................................................1 Section 2. Number............................................................................................1 ....................... I .........-..................-. Section 3. Qualification s....... . . .............................. ................... Section 4. Term of Office and Election ........................................ .................................................... Section 4. Resignation ........................ ............................................................................................................2 Section5. Vacancy.................................................................................................................................... ......................................... .. ................................................-...................6 Section 5. President ................................. Section6. Removal of Directors.......................................................................................................................2 ................................................................. Section6. Vice President.... Section7. Resignation.......................................................................................................................................2 .. ....................4 Section 8. Compensation .................................. 2 icat•................................................................. Section 9. Meeting by Means of Electronic Communication ARTICLEIV.....................................................................................................................3 Meetingsof the Board of Directors.......................................................... .............................................. Section 1. Place of Meetings .................................................................................................. .............._.3 Section 2. Annual Meetings ..................................................... 3 ................... ................... Section 3. Regular Meetings ...............................................-...-..:.........- ....................... ...... ...... Section4. Special Meetings...............................................................................................................................3 ........................................ .................................................... Section 4. Resignation ........................ Section5. Notice of Meeting.............................................................................................................................3 ......................................... .. ................................................-...................6 Section 5. President ................................. Section 6. Quorum and Voting ................................................................. Section6. Vice President.... ......................... ..................................... .......................................... Section 7. Rules of Procedure .. ....................4 ...................................................................................................... Section S. Action without Meeting.................................5 ---------------------4 icat•................................................................. Section 9. Meeting by Means of Electronic Communication ........................................... ..........................5 ARTICLEV......................................................................................................................5 Officers.....................................................................................................................................................................5 Section1. Number................................................................................. Section 2. Election and Term of Office .5 ............................................................................................................5 Section 3. Removal and Vacancies ........................................ .................................................... Section 4. Resignation ........................ .---------.-_--------.-5 ......................................... .. ................................................-...................6 Section 5. President ................................. ................................................................. Section6. Vice President.... 6 ............................................................................................................................6 Section7. Treasurer..........................................................................................................................................6 SectionS. Secretary...........................................................................................................................................7 Section9. Other Officers..................................................................................................................................7 ARTICLEVI.....................................................................................................................7 Committees..............................................................................................................................................................7 Section1. Committees.......................................................................................................................................7 Section2. ExOffieio Member....................................................................................._....................................7 Section 3. Committee Procedures....................................................................................................................7 Section 4. Executive Committee.. 7 ARTICLEVII....................................................................................................................8 FiscalMatters..........................................................................................................................................................8 Section1. Accounting Year ..............................................................................................................................8 Section2. Contracts..........................................................................................................................................8 Section3. Loans.................................................................................................................................................8 Section4. Checks. Drafts, Etc.....................................................................................'....................................8 Section5. Deposits.............................................................................................................................................8 Section 6. Maintenance of Records: Audit......................................................................................................8 Section7. Corporate Seal..................................................................................................................................9 ARTICLEVIII...................................................................................................................9 Indemnification.......................................................................................................................................................9 ARTICLEIX.....................................................................................................................9 DirectorConflict ofInterest ...................................................................................................................................9 ARTICLEX......................................................................................................................9 C ii BYLAWS OF PEOPLE, INCORPORATED ARTICLE I Offices Section 1. Registered Office. The registered office of People, Incorporated (the "Corporation") in the State of Minnesota shall be as stated in the Articles of Incorporation of the Corporation (the "Articles"), or such other place within the State as the Board of Directors may designate from time to time. Section 2. Principal Office. The principal office of the Corporation shall be such place as the Board of Directors shall designate from time to time. The business of the Corporation shall be transacted from the principal office, and the records of the Corporation shall be kept there. Section 3. Other Offices. The Corporation may have such other offices within and without the State of Minnesota as the Board of Directors may determine. ARTICLE II Members This Corporation shall have no members. ARTICLE III Board of Directors Section 1. General Powers. The business and affairs of the Corporation shall be managed by or under the direction of a Board of Directors. In addition to the powers conferred upon the Board of Directors by these Bylaws, the Board of Directors may exercise all powers of the Corporation and perform all acts which are not prohibited to it by law, by the Articles,or by these Bylaws, all as may be amended. Section 2. Number. The Board of Directors of the Corporation shall be composed of not less than five (5) nor more than nineteen (19) members, as determined from time to time by the Board of Directors of the Corporation. No decrease in the number of Directors pursuant to this section shall effect the removal of any Director then in office. Section 3. Qualifications. Directors may only be adult natural persons. Each director shall demonstrate his or her willingness to accept responsibility for governance and his or her availability to participate actively in governance activities. Directors shall be selected to bring a variety of interests and expertise to the Corporation. Section 4. Term of Office and Election. The Board of Directors shall be divided into three (3) classes of Directors, based on the length of the term to be served by such Directors, so that the terms of office of approximately one-third of the Directors shall expire each year. Successor Directors of each class shall be elected for a term of three (3) years. A Director's term shall expire at the annual meeting of Directors at which the Director's class must stand for reelection and until a successor is elected and qualified, or tmtil the earlier death, resignation, removal or disqualification of the director. All Directors shall have equal voting rights. Section 5. Vacancy. If the office of any Director becomes vacant for any reason, the Board of Directors may choose a successor by the election of a Director by the remaining Directors of the Corporation, or the Board of Directors may reduce the number of Directors, but not below the minimum number of Directors set forth in Section 2 of this Article III. A Director elected to fill a vacancy shall hold office until the next election of members of the class of Directors which contains the vacancy. Section 6. Removal of Directors. An elected Director of the Corporation may be removed, at any time, with or without cause, upon the affirmative vote of a majority of all Directors of the Corporation then in office, excluding the Director proposed for removal. Section 7. Resignation. Any Director may resign at any time by giving written notice of such resignation to an officer of the Corporation. Such resignation shall be effective upon delivery, unless a later date is specified in the notice. Section S. Compensation. Directors shall not receive compensation for acting as such, but Directors shall be entitled to reasonable compensation for services rendered as employees in furthering the purposes of the Corporation as set forth in the Articles. The Corporation shall be entitled to purchase officers' and directors' liability insurance without obtaining reimbursement of all or any part of the premium without violating these Bylaws. ARTICLE IV Meetings of the Board of Directors Section 1. Place of Meetings. The Board of Directors may hold its annual, regular and special meetings at such places, within or without this state, as determined by the President of the Corporation or his or her designee. If no place is determined, the meeting shall be held at the Corporation's principal place of business. Section 2. Annual Meetings. The Board of Directors shall hold an annual meeting in the month of May of each year at such time and place as the Board of Directors shall determine. 2 If no place is determined, the annual meeting shall be held at the Corporation's principal place of business. At each annual meeting, the Board of Directors shall elect members of the Board of Directors; shall fix the maximum number of the Board of Directors, shall elect and determine the salaries of officers and shall conduct such other business as may properly come before it. Section 3. Regular Meetings. In addition to the amoral meeting, the Board of Directors shall hold regular meetings at such times and places as the Board of Directors, the President, or his or her designee, shall determine. At each regular meeting, the Board of Directors shall conduct such business as may properly come before the meeting. Section 4. Special Meetings. Special meetings of the Board of Directors may be called by: (a) the President, (b) a Vice President, or (c) upon written request of any two (2) or more Directors of the Corporation. A person entitled to call a special meeting of the Board of Directors may make a written request to the Secretary to call the meeting. The Secretary shall give written notice of the meeting in the manner provided below, and the meeting shall be held between three (3) and fourteen (14) days after receipt of the request to call a special meeting. If the Secretary fails to give notice of the meeting within three (3) days from the day on which the request was received by the Secretary, the person or persons who requested the special meeting may fix the time and place of meeting, and give notice thereof. If no place is identified, the meeting shall be held at the Corporation's principal place of business. By unanimous consent of the Directors, special meetings of the Board of Directors may be held without notice at any time and place. Section 5. Notice of Meeting. Not less than ten (10) days' written notice of the annual meeting of the Board of Directors, excluding the day of the meeting, shall be given to all Directors. Said notice shall include proposed agenda items, but the failure to include an agenda item in the notice shall not prevent action from being taken with respect to such item. Not less than three (3) days' written notice of a regular or special meeting of the Board of Directors, excluding the day of the meeting, shall be given to all Directors. No notice of any meeting, regular or special, need state the purpose of the meeting except as may be specifically required by these Bylaws or otherwise required by law. Notice of a meeting at which an amendment to the Articles of the Corporation will be proposed must contain the substance of the proposed amendment. Notice shall be delivered personally, sent by telecopier or facsimile machine, or mailed, first class, postage prepaid. Whenever written notice to Directors provides less -than five (5) days' prior written notice of the meeting, excluding the date of the meeting, reasonable effort shall be made to notify Directors by telephone of the meeting at the time of giving written notice, but the failure to contact any Director(s) by telephone shall not affect the validity of the meeting or any action taken at such meeting. Any Director may waive notice of any meeting of the Board of Directors in writing before, at or after a meeting. The attendance of a Director at any meeting shall constitute a waiver of notice of such meeting, unless he or she objects at the beginning of the meeting to the 3 transaction of business because the meeting is not lawfully called or convened and does not participate in the meeting. The waiver shall be filed with the person who has been designated to act as secretary of the meeting, who shall enter the waiver upon the records of the meeting. Section 5. Quorum and Voting. The presence of one-third (1/3) of the members of the Board of Directors, but not less than two (2) Directors, shall constitute a quorum for the transaction of business at any meeting of the Board of Directors, but the Directors present at any meeting, although less than a quorum, may adjourn the meeting from time to time. If a quorum is present when a duly called or held meeting is convened, the Directors present may continue to transact business until adjournment, even though the withdrawal of Directors originally present leaves less than the proportion or number otherwise required for a quorum. At any meeting of the Board of Directors, each Director present at the meeting shall be entitled to cast one (1) vote on any question coming before the meeting. Except as otherwise provided in these Bylaws, a majority vote of the Directors present at any meeting, shall be sufficient to transact any business. A director may give advance written consent or objection to a proposal to be acted upon at a meeting of the Board of Directors. If the director is not present at the meeting, consent or objection to proposal does not constitute presence for purposes of determining a quorum, but consent or objection shall be counted as a vote of a director present at the meeting in favor of or against the proposal and shall be entered in minutes or other record of action at the meeting, if the proposal acted upon at the meeting is substantially the same or has substantially the same effect as the proposal to which the director has consented or objected. Section 7. Rules of Procedure. The Board of Directors may adopt or establish rules of procedure for conducting meetings provided such rules are not inconsistent with the Corporation's Articles of Incorporation, these Bylaws or Minnesota law. In the absence of Board action the President may establish rules of procedure for conducting meetings provided such rules are not inconsistent with the Corporation's Articles, these Bylaws or Minnesota law. Section S. Action without Meeting. An action required or permitted to be taken at a Board Meeting may be taken by written action signed by the number of Directors that would be required to take the same action at a meeting of the Board of Directors at which all Directors were present. If any written action is taken by less than all of the Directors entitled to vote, all Director's entitled to vote shall be notified immediately of its test and effective date. The failure to provide such notice, however, shall not invalidate such written action. A director who has not signed or consented to the written action has no liability for the action or actions taken thereby. A written action is effective when it is signed by all of the Directors required to take the action unless a different effective time is provided in the written action. Section 9. Meeting by Means of Electronic Communication. A conference among Directors by a means of communication through which the Directors may simultaneously hear each other during the conference constitutes a meeting of the Board of Directors if the same notice is given of the conference as would be required for a meeting, and if the number of Directors participating in the conference would be sufficient to constitute a quorum at the meeting. Participation in a meeting. by this means is personal presence at the meeting. In 2 addition, a Director may participate in a meeting of the Board of Directors by any means of communication through which the Director, other Directors participating and all Directors physically present at the meeting may simultaneously hear each other during the meeting. ARTICLE V Officers Section 1. Number. The Corporation shall have the following officers: (a) a President; (b) a Treasurer; and (c) a Secretary. All officers must be natural persons that the Board of Directors elects or appoints. Subject to these Bylaws, the Board of Directors may also elect or appoint one or more additional officers or assistant officers as it may deem convenient or necessary. Except as provided in these Bylaws, the Board of Directors shall fix the powers and duties of all officers. Section 2. Election and Term of Office. All officers of the Corporation shall be elected annually by the Board of Directors. Officers of the Corporation other than the President need not be Directors of the Corporation and shall hold office at the discretion of the Board of Directors. An officer shall hold office until his or her successor shall have been elected or until his or her prior death, resignation or removal from office as hereinafter provided. An individual may hold more than one office of the Corporation at the same time other than those of President and Vice President and President and Secretary. Section 3. Removal and Vacancies. Any officer or agent elected or appointed by the Board of Directors shall hold office at the pleasure of the Board of Directors and may be removed at any time, with or without cause, by a resolution approved by the affirmative vote of a majority of the directors present. Any vacancy in an office of the Corporation shall be filled by action of the Board of Directors. The removal of any individual as an officer of the Corporation shall not automatically affect such individual's employee status with the Corporation. Section 4. Resignation. Any officer may resign at any time by giving written notice of such resignation to an officer of the Corporation. Such resignation shall be effective upon delivery, unless a later date is specified in the notice. Section 5. President. Unless provided otherwise by a resolution adopted by the Board of Directors, the President shall have general active management of the business of the Corporation, shall preside at meetings of the Board of Directors, shall see that all orders and resolutions of the. Board of Directors are carried into effect, shall sign and deliver in the name of the Corporation any deeds, mortgages, bonds, contracts, or other instruments pertaining to the business of the Corporation, except in cases in which the authority to sign and deliver is required by law to be exercised by another person or is expressly delegated by the Articles, these Bylaws, or the Board of Directors to some other officer or agent of the Corporation, may maintain records of and certify proceedings of the Board of Directors, and shall perform such other duties as may from time to time be prescribed by the Board of Directors. The President shall have the general powers and duties generally vested in the office of a chief executive officer of a corporation and 5 shall have such other powers and perform such other duties as the Board of Directors may prescribe from time to time. Section b. Vice President. A Vice President shall have such powers and perform such duties as the Board of Directors or the President may prescribe from time to time. In the absence of the President or in the event of the President's death, inability, or refusal to act, a Vice President shall perform the duties of the President, and, when so acting, shall have all the powers of and be subject to all of the restrictions upon the President. In the absence of the President, a Vice President shall preside at meetings of the Board of Directors. Section 7. Treasurer. Unless provided otherwise by a resolution adopted by the Board of Directors, the Treasurer shall be the chief financial officer of the Corporation and shall be responsible for ensuring that all drafts and checks received by and payable to the Corporation are properly endorsed for deposit to the credit of the Corporation, that all moneys, drafts and checks are deposited in the narne of and to the credit of the Corporation in such banks and depositories as the Board of Directors shall designate from time to time, that funds of the Corporation are invested in such financial instruments at such financial institution as shall be designated by the Board of Directors from time to time, that, upon proper authorization, checks or drafts drawn upon accounts maintained by the Corporation are issued on behalf of and in the name of the Corporation, that accurate financial records are kept for the Corporation and that reports of the financial position of the Corporation are provided to the Board of Directors from time to time. The Treasurer also shall perform such other duties as may be prescribed by the Board of Directors or the President from time to time. Section S. Secretary. The Secretary shall attend meetings of the Board of Directors and be responsible for ensuring that all actions and the minutes of all proceedings of the Board of Directors are recorded in a book to be kept for that purpose, and shall be responsible for all documents and records of the Corporation, except those connected with the office of the Treasurer. In the absence of the Secretary at any Board meeting, the President shall appoint a Director to act as Secretary of such meeting. He or she shall give or cause to be given any required notice of meetings of the Board of Directors, and shall mail to all Directors within thirty (30) days after each meeting copies of all said actions and minutes of said proceedings, and shall perform such other duties and have such other powers as the Board of Directors may from time to time prescribe. Section 9. Other Officers. The Board of Directors may appoint such Vice President(s), Assistant Secretary or Assistant Treasurer(s) to perform the duties of and exercise the powers of the President, Secretary or Treasurer, respectively in the absence or disability of.such officer Any other officers shall hold office at the discretion of the Board of Directors and shall have such powers, perform such duties and be responsible to such other officers as the Board of Directors may prescribe. 0 ARTICLE VI Committees Section 1. Committees. The Board of Directors may establish one or more committees. Such committees shall have the authority of the Board of Directors in the management of the business of the Corporation to the extent provided in such resolution. Such committees, however, shall at all times be subject to the direction and control of the Board of Directors. Committee members must be natural persons. Section 2. Ex Officio Member. The President of the Corporation, or a representative appointed by the President, shall be an ex officio member, without voting rights, of each committee of the Corporation. Section 3. Committee Procedures. The provisions of these Bylaws shall apply to committees and members thereof to the same extent they apply to the Board of Directors and Directors, including, without limitation, the provisions with respect to meetings and notice thereof, absent members, written actions and valid acts. Each committee shall keep regular minutes of its proceedings and report the same to the Board of Directors. Section 4. Executive Committee. The Board of Directors may, by a resolution adopted by two-thirds (2/3) of the total number of Directors, establish an Executive Committee of the Board of Directors and appoint two or more Directors to serve on such Committee, one of which shall be the President of the Corporation. All members of the Executive Committee shall be Directors. The Executive Committee shall act only during intervals between meetings of the Board of Directors and shall at all times be subject to the control and direction of the Board of Directors. During such intervals and subject to such control and direction, the Executive Committee shall have and may exercise all of the authority and powers of the Board of Directors in the management of the affairs of the Corporation, subject to such limitations as the Board of Directors may impose. The Executive Committee shall keep regular minutes of its proceedings and report the same to the Board of Directors. ARTICLE VII Fiscal Matters Section 1. Accounting Year. The accounting year of the Corporation shall be the calendar year. Section 2. Contracts. The Board of Directors may authorize such officer or officers, agent or agents, to enter into any contract or execute and deliver any instrument in the name of and on behalf of the Corporation, and such authority may be either general or confined to specific instances. Contracts and other instruments entered into in the ordinary course of business may be executed by the President or, in the absence of or pursuant to a delegation by the President, by 7 such officer or agent designated to actin the place of or in the absence of the President by the President, without specific Board of Directors authorization. Section 3. Loans. No loans shall_ be contracted on behalf of the Corporation, and no evidence of indebtedness other than checks, drafts or other orders for payment of money issued in the ordinary course of business shall be issued in its name unless authorized by the Board of Directors of the Corporation. Such authorization and approval may be general or confined to specific instances. Section 4. Checks, Drafts, Etc. All checks, drafts or other orders for the payment of money issued in the name of the Corporation shall be signed by such officer or officers, agent or agents of the Corporation in such manner as shall be determined by resolution of the Board of Directors. Section 5. Deposits. All funds of the Corporation not otherwise employed shall be deposited from time to time to the credit of the Corporation in such banks or other depositories as the Board of Directors or the President or Treasurer upon delegation by the Board of Directors may select. Section 6. Maintenance of Records; Audit. The Corporation shall keep at its registered office correct and complete copies of its Articles and Bylaws, accounting records, voting agreements, and minutes of meetings of the Board of Directors, and committees having any of the authority of the Board of Directors for the last six (6) years. All such records shall be open to inspection upon the demand of any member of the Board of Directors of the Corporation. The Board of Directors shall cause the books and records of account of the Corporation to be audited by certified public accountants, to be selected by the Board of Directors, at least once in each fiscal year and at such other times as it may deem necessary or appropriate. Section 7. Cornorate Seal. The seal of the Corporation shall consist of two concentric circles having between them the words PEOPLE, INCORPORATED, MINNESOTA, and in the center the words CORPORATE SEAL. ARTICLE VIII Indemnification The Corporation shall indemnify its officers, Directors and committee members against judgments, penalties, fines, including without limitation, excise taxes assessed against the person with respect to an employee benefit plan, settlements, and reasonable expenses, including attorneys' fees, and disbursements incurred by such persons in connection with a proceeding in which they are or are threatened to be made a party by reason of their action on behalf of the Corporation. In order to avail himself or herself of this indemnification provision, however, a person must: (1) not already be indemnified by another organization in connection to the same proceeding and the same acts or omissions; (2) have acted in good faith with respect to the acts or omissions complained of, (3) have received no improper personal benefit; (4) in the case of a 9 criminal proceeding, have had no reasonable cause to believe his or her conduct was unlawful; (5) in the case of a civil proceeding, have reasonably believed that he or she was acting in the best interests of the Corporation. The Corporation shall not indemnify employees of the Corporation. ARTICLE IX Direetor Conflict of Interest The President shall develop, for Board of Directors' approval, a conflict of interest policy that shall apply to all Directors, officers and committee members. Such policy shall require Directors, officers and committee members to annually acknowledge reviewing the conflicts of interest policy. ARTICLE X Amendments The Corporation's Articles of Incorporation and these Bylaws may be altered, amended or restated by the Board of Directors to omit or include any provision which could be lawfully omitted or included at the time of such amendment. Any number of amendments, or an entire revision or restatement of the Articles of Incorporation or these Bylaws, may be voted upon at a meeting of the Board of Directors, by action in writing or by means of electronic communication where due notice of the proposed amendment has been given and shall be adopted upon the affirmative vote of a majority of all Directors who are present at the meeting and entitled to vote on the proposed amendment or revision. CERTIFICATION The undersigned, as Secretary of People, Incorporated, a Minnesota nonprofit corporation, hereby certifies that the foregoing Amended and Restated Bylaws of the Corporation were adopted by resolution of the Board of Directors at a meeting held on the day of, 1998. Secretary . GP:477238 0 0 I I SEP -15-1999 12:59 EPEO CUSTERNER SEPUICE 513 684 5936 P.02/03 Internal Revenue Service District Director nate: September 14, 1999 People Incorporated 317 York Ave. St. Paul, MN 55101-4039 Dear Sir or Madam: Department of the Treasury P. O. Box 2508 Cincinnati, OH 45201 Person to Contact: Bob Edwards 31-04014 Customer Service Representative Telephone Number: 877-829-5500 Fax Number: 513-263-3756 Federal Identification Number: 41-0962296 This letter is in response to your request for a copy of your organization's determination letter. This letter will take the place of the copy you requested. Our records indicate that a determination letter issued in November 1969 granted your organization exemption from federal income tax under section 501(c)(3) of the Internal Revenue Code. That letter is still in effect. Based on information subsequently submitted, we classified your organization as one that is not a private foundation within the meaning of section 509(a) of the Code because it is an organization described in section 509(a)(2). . , lis classification was based on the assumption that your organization's operations would continue as stated in the application. If your organization's sources of support, or its character, method of operations, or purposes have changed, please let us know so we can consider the effect of the change on the exempt status and foundation status of your organization. Your organization is required to file Form 990, Return of Organization Exempt from Income Tax, only if its gross receipts each year are normally more than $25,000. If a return is required, it must be filed by the 15th day of the fifth month after the end of the organization's annual accounting period. The law imposes a penalty of $20 a day, up to a maximum of $10,000, when a return is filed late, unless there is reasonable cause for the delay. All exempt organizations (unless specifically excluded) are liable for taxes under the Federal Insurance Contributions Act (social security taxes) on remuneration of $100 or more paid to each employee during a calendar year. Your organization is not liable for the tax imposed under the Federal Unemployment Tax Act (FUTA). Drganizations that are not private foundations are not subject to the excise taxes under Chapter 42 of the Code. However, these organizations are not automatically exempt from other federal excise taxes. )onors may deduct contributions to your organization as provided in section 170 of the Code. Bequests, legacies, devises, transfers, or gifts to your organization or for its use are deductible for federal estate and gift `ax purposes if they meet the applicable provisions of sections 2055, 2106, and 2522 of the Code. SEP -15-1999 13:00 EPEO CUSTERMER SERIJiCE 513 6e4 5936 P.03/03 -2- r'eople Incorporated 41-0962296 Your organization is not required to file federal income tax returns unless it is subject to the tax on unrelated business income under section 511 of the Code. If your organization is subject to this tax, it must file an income tax return on the Form 990-T, Exempt Organization Business Income Tax Return. In this letter, we are not determining whether any of your organization's present or proposed activities are unrelated trade or business as defined in section 513 of the Code. The law requires you to make your organization's annual return available for public inspection without charge for three years after the due date of the return. You are also required to make available for public inspection a copy of your organization's exemption application, any supporting documents and the exemption letter to any individual who requests such documents in person or in writing. You can charge only a reasonable fee for reproduction and actual postage costs for the copied materials. The law does not require you to provide copies of public inspection documents that are widely available, such as by posting them on the Internet (World Wide Web). You may be liable for a penalty of $20 a day for each day you do not make these documents available for public inspection (up to a maximum of $10,000 in the case of an annual return). Because this letter could help resolve any questions about your organization's exempt status and foundation status, you should keep it with the organization's permanent records. If you have any questions, please call us at the telephone number shown in the heading of this letter. ms letter affirms your organization's exempt status. Sincerely, C. Ashley Bullard District Director TOTAL P.03 MINUTES OF THE BOARD OF DIRECTORS OF PEOPLE INCORPORATED March 23, 2004 MEMBERS PRESENT: Marge Barrett, Lee Carlson, Elizabeth DeBaut, Litton Field, Jan Hogan, Sidney Lange, Nancy McKillips, Pat Rorke, Scott Sponheim, Macey Wheeler, Mary White NOT PRESENT: Ellen Anderson, Gail Dorfman, Steve Fenlon, Dick Nicholson, Bob Parish, Thornton Powell, Charles Schulz STAFF PRESENT: Tim Burkett, Linda Eckhardt, Krystal Erickson, Mary Kay McJilton, Barbara Nichols, Jack Ruth, Joan White GUEST: Pat Peterson, Consultant; Nancy Wray, Advisory Council Member ADOPTION OF AGENDA: The meeting was called to order by President Jan Hogan at 3:00 P.M. at the Minnesota Police & Peace Officers Association Office, 327 York Avenue, St. Paul, MN. APPROVAL OF THE MINUTES: M/S/C to accept the minutes of the January Board meeting, as mailed. NOMINATING COMMITTEE UPDATE: Mary White introduced and welcomed Macey Wheeler to the Board meeting. The Nominating Committee nominated Macey Wheeler to the Board. M/S/C to elect Macey Wheeler as a Board member. Her term of membership is the Class of 2007. FINANCE COMMITTEE REPORT: Lee Carlson reported that the Finance Committee reviewed the 2003 audit report and recommends approval. Litton Field and Lee Carlson briefly reviewed the results. M/C to approve the audit. In addition, the Committee recommended approval of the Minnesota Charitable Organization Annual Report and the attached form 990. M/C to approve the Minnesota Charitable Organization Annual Report and the attached form 990. The Finance Committee also recommended the approval for Tax -Exempt Refinancing for 5 properties (Heather Ridge, Jordan, Upton, Londin and Scott) using Steve Fenlon, Midwest HealthCare Capital, as Transaction Manager. Steve Fenlon was not present during the finance committee's selection. However, he was determined to be the best vendor and was approved unanimously. M/C to approve Tax -Exempt Refinancing using Steve Fenlon, Midwest HealthCare Capital, as Transaction Manager. Also, the Finance Committee recommended approval of the Reimbursement Resolution for 7573 Scott Avenue Property stating that People Incorporated intends to finance the property from proceeds of an issue of tax-exempt obligation. MIS/C to approve the Reimbursement Resolution for the 7573 Scott Avenue property. PROGRAM COMMITTEE REPORT: Scott Sponheim reported that the committee reviewed the Program Abuse Prevention Plans for Jordan, Epilepsy Services and Housing with Services: Ruth, Londin and Edgebrook. M/C to approve the Program Abuse Prevention Plans Jordan, Epilepsy Services and Housing with Services: Ruth, Londin and Edgebrook. STRATEGIC PLANNING: Pat Peterson reviewed the process of strategic planning and Tim gave a State of the Agency report. Board members and Management Staff began the process by reviewing the data from all key stakeholders. The Board and Management Staff worked to come up with .'shared vision components' which Pat Peterson will use to draft the strategic plan. This draft will be shared with Board members at the May Board meeting. GOVERNANCE POLICY DEVELOPMENT: Due to lack of time, this agenda item was tabled to the May Board meeting. ADJOURNMENT: Meeting was adjourned at 9:00 P.M. Respectfully submitted, Minutes as taken by Krystal Erickson and reviewed by Dick Nicholson, Secretary RESOLUTION MAKING A DECLARATION OF OFFICIAL INTENT UNDER U.S. TREASURY REGULATIONS SECTION 1.150-2 WHEREAS, the Internal Revenue Code of 1986, as amended, and Treasury Regulations, Section 1.150-2, promulgated thereunder (the "Reimbursement Rules'), require that in order for a conduit borrower to use the proceeds of an issue of tax-exempt obligations to reimburse an original expenditure paid before the issue date of the obligations, a conduit borrower must adopt an official intent for the original expenditure not later than 60 days after payment thereof; and WHEREAS, People Incorporated (the "Obligor")is an organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended; and WHEREAS, the Obligor intends to finance the purchase of real property located at 7573 Scott Avenue, Brooklyn Park, Minnesota (the "Project', from proceeds of an issue of tax-exempt obligations (the "Obligations'); and WHEREAS, the Project was acquired on January 27, 2004, and it was necessary for the Obligor to temporarily finance certain costs of the Project by using either working capital and cash reserves which will be needed for other purposes or temporary loans from financial institutions or others prior to the issuance of the Obligations. NOW, THEREFORE, be it resolved by the Obligor as follows: The maximum principal amount of the Obligations is $250,000. The Obligor reasonably expects to incur expenditures with respect to the Project in advance of issuance of Obligations. The Obligor reasonably expects that expenditures for the Project will be reimbursed from the proceeds of the Obligations. 4. The reimbursement will occur not later than 18 months after the later of the date the original expenditure was paid or the date the Project is placed in service or abandoned, but in no event more than three years after the original expenditure is paid. 5. The Obligor has not previously adopted a resolution under the Reimbursement Rules for a project, the costs of which were not paid from the proceeds of an issue of tax-exempt bonds. Approved by the Obligor on March 23, 2004. ATTEST: E/((��t Secretary Al: Wor W99WIJWWWOVG984iJ.UD ARBITRAGE AND TAX CERTIFICATE This ARBITRAGE AND TAX CERTIFICATE, dated as of August 24, 2004, is given by the undersigned, who certify and declare that we are the duly qualified and acting President, Treasurer and Executive Director, respectively, of People Incorporated (the `Borrower"). We certify with respect to the issuance of the $713,000 Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) (the "Obligations") of the City of New Hope, Minnesota (the "Issuer"), as follows: 1. DEFINITIONS. For all purposes of this Certificate the following terms have the following meanings. Capitalized terms used but not defined herein shall have the meanings assigned to them in the Loan Agreement, the Resolution, the Code and Regulations: Adjusted Rate: a rate per annum equal to the sum of (i) 0.625% and (ii) the 5 -Year Treasury Rate in effect as of the Adjustment Date. Adjustment Date: the 60-, 120- and 180 -month anniversary of the Closing Date and the Date of Taxability. Bona Fide Debt Service Fund: has the meaning given in Regulations Section 1.148-1(b), and generally means a fund, which may include proceeds of an issue, that: (a) is used primarily to achieve a proper matching of revenues with principal and interest payments within each bond year; and (b) is depleted at least once each bond year, except for a reasonable carryover amount not to exceed the greater of: (i) the earnings on the fund for the immediately preceding bond year; or (ii) 1/12 of the principal and interest payments on the issue for the immediately preceding bond year. Bond Account: the account authorized by the Issuer in the Resolution to be created and held by Lender. Bond Transcript: the compilation of all documents necessary and required for closing and delivery of the Obligations, bound in book or similar form. Borrower: People Incorporated, a Minnesota nonprofit corporation, its successors and assigns. Capital Expenditures: costs of a type that would be properly chargeable to a capital account (or would be so chargeable with a proper election or with the application of the definition of "placed in service" under the Reimbursement Rules) under general federal income tax principles in effect at the time the cost is paid if the Borrower were a taxable corporation. Certificate: this Arbitrage and Tax Certificate. Closing Date: the date of this Certificate, which is the date of issuance of the Obligations. Code: the Internal Revenue Code of 1986, as amended as of the Closing Date. Control: the possession, directly or indirectly through others, of either of the following discretionary and non - ministerial rights or powers over another entity: (a) to approve and to remove without cause, a controlling portion of the governing body of the Controlled Entity; or (b) to require the use of funds or assets of the Controlled Entity for any purpose of the Controlling Entity. Controlled Entity: any entity or one of a group of entities that is subject to Control by a Controlling Entity or group of Controlling Entities. Controlled Group: a group of entities directly or indirectly subject to Control by the same entity or group of entities, including the entity that has the Control of the other entities. Controlling Entity: any entity of one or a group of entities directly or indirectly having Control of any entities or group of entities. Cost of Issuance or Issuance Costs: has the meaning given in Regulations Section 1.150-1(b), and is generally any and all costs and expenses incurred by the Host Municipalities in conjunction with the Joint Powers Agreement or relating to the issuance, sale and delivery of the Obligations, including, but not limited to, the underwriter's compensation or discount; all fees and expenses of legal counsel, financial consultants, feasibility consultants, underwriters and accountants; the initial fee of the Lender, if any; any fee or other charge to be paid to the Issuer; the cost of preparation and printing of the Borrower Documents, the Bond Indenture, any preliminary and final official statement, the Obligations and all other expenses relating to the issuance, sale and delivery of the Obligations. Exempt Person: any Person which is a Section 501(c)(3) Organization with an exempt purpose substantially related to the exempt purpose of the Borrower, or a governmental unit within the meaning of Section 141(b)(6) of the Code, as further defined in Code Section 150(a). 5 -Year Treasury Rate: means the published monthly average yield on United States Treasury Notes adjusted to a constant maturity of five years for the most recent month available as of the date of determination, as published and made available by the Federal Reserve Board pursuant to its Federal Reserve Statistical Release (H. 15(519)); provided, however, that in the event that such monthly average yield is no longer published or otherwise made available, the 5 -Year Treasury Rate shall be a substantially comparable index selected by the Lender in its sole discretion. Form 8038: IRS Information Return for Tax -Exempt Private Activity Bond Issues, Form 8038 (Rev. January 2002) to be filed by the Issuer with the IRS in connection with the issuance of the Obligations. Gross Proceeds: Gross Proceeds has the meaning given in Regulations Section 1.148-1(b) and is calculated as follows: Host Municipalities: collectively, the Issuer and Cities of Oakdale, Richfield and Brooklyn Park, and the Housing and Redevelopment Authority of the City of St. Paul, Minnesota. Investment Proceeds: any amounts actually or constructively received from investing Proceeds as further described in Regulations Section 1.148-1(b). Investment Property: means any investment property as defined in Sections 148(b)(2) and 148(b)(3) of the Code as: (a) any security (within the meaning of section 165(g)(2)(A) or (B); (b) any obligation; (c) any annuity contract; (d) any investment -type property; or (e) in the case of a bond other than a private activity Sale Proceeds $713,000 Plus Transferred Proceeds 0 Plus Investment Proceeds 0 Plus Replacement Proceeds 0 Equals Gross Proceeds Total $713 000 Host Municipalities: collectively, the Issuer and Cities of Oakdale, Richfield and Brooklyn Park, and the Housing and Redevelopment Authority of the City of St. Paul, Minnesota. Investment Proceeds: any amounts actually or constructively received from investing Proceeds as further described in Regulations Section 1.148-1(b). Investment Property: means any investment property as defined in Sections 148(b)(2) and 148(b)(3) of the Code as: (a) any security (within the meaning of section 165(g)(2)(A) or (B); (b) any obligation; (c) any annuity contract; (d) any investment -type property; or (e) in the case of a bond other than a private activity bond, any residential rental property for family units which is not located within the jurisdiction of the issuer and which is not acquired to implement a court ordered or approved housing desegregation plan. Issue Price: $713,000 determined pursuant to a certificate of the Lender dated the Closing Date. Issuer: City of New Hope, Minnesota, a municipal corporation and a political subdivision organized and existing under the laws of the State of Minnesota, its successors and assigns. Lender: St. Anthony Park State Bank, with an office in St. Paul, Minnesota, the registered holder of the Obligations. Loan: the loan by the Issuer to the Borrower of the proceeds of the Obligations, exclusive of any accrued interest paid by the Original Purchaser of the Obligations upon the delivery thereof, but including the underwriting discount, or other amount, if any, by which the amount received by or on behalf of the Issuer on the original sale of the Obligations to the Original Purchaser is less than the principal amount of such Obligations Loan Agreement: the Loan Agreement dated as of the Closing Date between the Issuer and the Borrower. Materially Higher: the Yield plus 1.50 percent. Minor Portion: the amount of Proceeds determined in accordance with Regulations Section 1.148-2(g), as follows: 1. Sale Proceeds $713,000 2. 5 percent of Line 1. $35,650 3. Lesser of Line 2. or $100,000 $35,650 4. Minor Portion $35 650 Net Proceeds: is calculated as follows: Net Sale Proceeds: has the meaning given in Regulations Section 1.148-1(b) and is calculated as follows: Sale Proceeds Sale Proceeds $713,000 Less: Reserve Fund 0 Plus: Investment Proceeds 0 Plus: Transferred Proceeds 0 Equals: Net Proceeds $713.0 Net Sale Proceeds: has the meaning given in Regulations Section 1.148-1(b) and is calculated as follows: Sale Proceeds $713,000 Less: Reserve Fund 0 Less: Minor Portion 35,650 Equals: Net Sale Proceeds $748 650 Non-exempt Person: any Person which is not an Exempt Person. Nonpurpose Investment: means any Investment Property (other than a Purpose Investment) in which Gross Proceeds are invested. Obligations or Notes or Bonds: the Issuer's $713,000 Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project), dated the Closing Date. Original Purchaser: the Lender, as the original purchaser of the Obligations. Person: any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization or government, or any agency or political subdivision thereof. Proceeds: has the meaning given in Regulations Section 1.148-1(b) and is calculated as follows: Sale Proceeds $713,000 Plus: Investment Proceeds 0 Plus: Transferred Proceeds 0 Equals: Proceeds $713.000 Project: the activities described in Exhibit Chereto. Project Costs: all direct costs authorized by the Act and the Code paid for the Project, including but not limited to all costs ofrefinancing outstanding debt, acquisition of Real Property, facilities and equipment and labor, material and services paid or incurred by the Borrower and Issuance Costs, but not including the Borrower's overhead. Purpose Investment: any Investment Property acquired to carry out the governmental purpose of the Obligations. Reasonably Required Reserve or Replacement Fund: has the meaning given in Regulations Section 1.148- 2(f)(2)(ii), and is generally a fund securing the Obligations which meets the Reserve Requirement. Reimbursement Rules: Regulations, Section 1.150-2. Reeulations: the income tax regulations promulgated by the IRS or the Department of the Treasury of the government of the United States of America, including without limitation Income Tax Regulations, Sections 1.103-8; 1.141-1 through 1.141-16; 1.148-1 through 1.148-11; 1.149(b)-1; 1.149(d)-1; 1.149(e)-1; 1.149(g)-1; 1.150-1 and 1.150-2. Replacement Proceeds: has the meaning given in Regulations Section 1.148-1(c) and are generally described as proceeds of an issue if the amounts have a sufficiently direct nexus or connection to the issue or to the governmental purpose of the issue to conclude that the amounts would have been used for that governmental purpose if the proceeds of the issue were not used or to be used for that governmental purpose. For this purpose, governmental purposes include the expected use of amounts for the payment of debt service on a particular date. Resolution: the resolution of the Issuer adopted July 26, 2004, authorizing the issuance and sale of the Obligations. Sale Proceeds: has the meaning given in Regulations Section 1.148-1(b), includes any amounts actually or constructively received from the sale of the Obligations [, of either Series thereof as the context may require,] including amounts used to pay the compensation of the Underwriters and accrued interest other than pre -issuance accrued interest (if any) calculated as follows: 4 Section 501(c)(3) Organization: any organization described in Section 501(c)(3) of the Code and exempt from federal income taxation under Section 501(a) of the Code. Transferred Proceeds: has the meaning given in Regulations Section 1.148-9 (or the applicable corresponding provision of prior law) and refers to the circumstance when proceeds of the refunding issue discharge any of the outstanding principal amount of the prior issue, proceeds of the prior issue become transferred proceeds of the refunding issue and cease to be proceeds of the prior issue. Yield: has the meaning given in Regulations Section 1.148-1(b), and, generally means the rate which, when used in computing the present value of all payments of principal of and interest on an obligation, produces an amount equal to the purchase price. II. GENERAL. A. Knowledge of Persons Si ue ing this Certificate. The undersigned: have supervision and control of the financial affairs of the Borrower; 2. are familiar with the properties, affairs and records of the Borrower; and are familiar with the facts set forth herein and the use of the Proceeds. B. Review of this Certificate. We have reviewed this Certificate with our attorneys and in the course of such review have reviewed: all agreements and understandings (whether written or oral) relating to the use of the Project; 2. the use and intended use of the Project by any Person other than the Borrower; and the Borrower's use and intended use of the Project. C. Purpose of this Certificate. This Certificate, including its exhibits and/or attachments, is made for the purpose of: 1. setting out various facts regarding the Obligations; 2. establishing the reasonable expectations of the Borrower and the Issuer as to the amount, expenditure and use of Proceeds; to establish the reasonable expectations of the Borrower, the Issuer and the Lender as to future events regarding the Obligations. Stated Princi al Amount $713,000 Plus: Net original issue premium 0 Less: Underwriter's discount 0 Plus: Accrued interest 0 Equals: Sale Proceeds Total $713.000 Section 501(c)(3) Organization: any organization described in Section 501(c)(3) of the Code and exempt from federal income taxation under Section 501(a) of the Code. Transferred Proceeds: has the meaning given in Regulations Section 1.148-9 (or the applicable corresponding provision of prior law) and refers to the circumstance when proceeds of the refunding issue discharge any of the outstanding principal amount of the prior issue, proceeds of the prior issue become transferred proceeds of the refunding issue and cease to be proceeds of the prior issue. Yield: has the meaning given in Regulations Section 1.148-1(b), and, generally means the rate which, when used in computing the present value of all payments of principal of and interest on an obligation, produces an amount equal to the purchase price. II. GENERAL. A. Knowledge of Persons Si ue ing this Certificate. The undersigned: have supervision and control of the financial affairs of the Borrower; 2. are familiar with the properties, affairs and records of the Borrower; and are familiar with the facts set forth herein and the use of the Proceeds. B. Review of this Certificate. We have reviewed this Certificate with our attorneys and in the course of such review have reviewed: all agreements and understandings (whether written or oral) relating to the use of the Project; 2. the use and intended use of the Project by any Person other than the Borrower; and the Borrower's use and intended use of the Project. C. Purpose of this Certificate. This Certificate, including its exhibits and/or attachments, is made for the purpose of: 1. setting out various facts regarding the Obligations; 2. establishing the reasonable expectations of the Borrower and the Issuer as to the amount, expenditure and use of Proceeds; to establish the reasonable expectations of the Borrower, the Issuer and the Lender as to future events regarding the Obligations. D. Reliance on Certificate. This Certificate is intended and may be relied upon as a certification under Sections 103, 141, 142, 145, 146, 147, 148, 149 and 150 of the Code and the Regulations, and is being executed and delivered as part of the record of proceedings in connection with the issuance of the Obligations; E. Purpose of Obligations. The Obligations are being issued to provide money to be loaned by the Issuer to the Borrower pursuant to the Loan Agreement in order to finance, or reimburse the Borrower for, costs of acquisition, construction, improvement and equipping of the Project pay a portion of the Cost of Issuance. F. Treatment as Single Issue. The Obligations are being treated as a single issue as permitted by Regulations Section 1.150-1(c). G. Reasonable Expectations. To the best of our knowledge and belief, the facts contained herein are accurate, timely, correct and complete and the expectations set forth herein are reasonable and there are no other facts or expectations that would materially change such facts and expectations. H. Simultaneous Delivery of Obligations. The Issuer is issuing and delivering the Obligations simultaneously with this Certificate. The Obligations were delivered and funds were disbursed to the Borrower thereunder on the Closing Date in an amount equal to the lesser of $50,000 or 5 percent of the Issue Price. The total Proceeds to be received by or on behalf of the Issuer on the sale of the Obligations is $713,000 (being the par amount of the Obligations). The Obligations are dated as of the Closing Date, therefore, there is no accrued interest. Loan Agreement. The Issuer and the Borrower have entered into the Loan Agreement with respect to the use of Proceeds and providing for the payment thereof. The certifications of the Borrower set forth in Section 2.03 of the Loan Agreement remain true and correct in their entirety. I. Exhibits. The exhibits to this Certificate are as follows: 1. Exhibit A — Endorsement to Arbitrage and Tax Certificate by Issuer 2. Exhibit B — Useful Life Calculation 3. Exhibit C — Project Description 4. Exhibit D - Endorsement to Arbitrage and Tax Certificate by Lender III. ALLOCATION OF PROCEEDS. A. Purchase Price. The Obligations have been sold by the Issuer to the Lender for the purchase price of $713,000. B. Proceeds. Sale Proceeds. The Sale Proceeds are being used to pay Project Costs and Cost of Issuance as shown on Exhibit B. The Project Costs for which Proceeds are to provide financing consist entirely of financing and refinancing Capital Expenditures, except to the extent of capitalized interest on the Obligations permitted under Treasury Regulations Section 1.148-6(d)(3)(ii)(A)(3), or except for related working capital expenditures, if any, to which the de minimus rule under Treasury Regulations Section 1.148-6(d)(3)(ii)(A)(5) applies. No portion of the Proceeds will be used to pay principal of or interest on any other issue of bonds or other obligations, except as specifically described above. The Borrower will be the sole underlying obligor on the entire amount of the Obligations. 2. Gross Proceeds. The estimated amounts for which Gross Proceeds, along with certain other funds of the Borrower available for Project Costs will be used are set forth in Exhibit B of this Certificate. 3. Transferred Proceeds. The Borrower will pay outstanding indebtedness incurred with respect to the Project in full on the Closing Date and there will be no Transferred Proceeds under Regulations Section 1.148-9. 4. Investment Proceeds. The Borrower expects that since the Proceeds will be advanced to immediately refinance Borrower's outstanding indebtedness or to pay Issuance Costs and there will be no investment of the Proceeds. 5. Replacement Proceeds. a. Amounts are Replacement Proceeds if the amounts have a sufficiently direct connection to the Obligations or the governmental purpose of the issue (including payment of principal or interest on the Obligations) to conclude that such amounts would have been used for the governmental purpose of the Obligations if the Proceeds were not used or to be used for that governmental purpose. b. The Issuer and the Borrower are the only "substantial beneficiaries" of the Obligations within the meaning of Section 1.148-1(c)(1) of the Regulations. It is not expected that the Issuer, the Borrower or any member of the same Controlled Group as the Issuer or the Borrower has on hand any property, including cash and securities, that has a sufficiently direct nexus (connection) to the purposes financed by the Obligations to support the conclusion that such property would have to have been applied for such purposes if the Obligations had not been issued. Therefor it is anticipated that there will not be any Replacement Proceeds. C. No other Replacement Proceeds arise under Section 1.148-1(c)(4)(i)(A) of the Regulations because the term of the Obligations has a weighted average maturity that does not exceed 120 percent of the average expected economic life of the Project, determined in the same manner as under Section 147(b) of the Code, and thereby qualifies for the safe harbor of Section 1.1484(c)(4)(i)(13)(3) of the Regulations. See Section IX.H. of this Certificate for further detail on the weighted average maturity of the Obligations and the average expected economic life of the Project. C. Expenditure of Proceeds. The Proceeds will be expended substantially as set forth in Exhibit B attached hereto. The Borrower acknowledges that if Proceeds are spent for non -capital purposes other than as permitted by this Section, a like amount of then available funds of the Borrower will be treated as unspent Proceeds and the Borrower may be in violation of one or more of the tax covenants set forth in the Loan Agreement. No proceeds received upon the condemnation or destruction of all or any portion of the Project will be used to construct or acquire property or facilities in a manner that results in the violation of any of the covenants contained in this Certificate, and any property or facilities acquired or otherwise obtained from the proceeds of, or as a result of, the condemnation or destruction of all or a portion of the Project will be subject to the covenants contained herein. D. No Overissuance. The Sale Proceeds, including Investment Proceeds, do not exceed the amount necessary for the Project. Sale Proceeds (less the amount of the Cost of Issuance), together with estimated Investment Proceeds, will not exceed the estimated dollar amount of Project Costs, less all other funds to be expended for paying such Project Costs. The Sale Proceeds do not exceed the amount required for the Project by an amount in excess of the Minor Portion. E. Working Capital. Except as otherwise permitted by Section 1.148-6(d)(3)(ii) of the Regulations relating to de minimus expenditures for certain specified purposes, all of the Sale Proceeds (including Investment Proceeds, if any) will be used, directly or indirectly, to refinance Capital Expenditures. IV. REIMBURSEMENT. The Borrower recognizes that the arbitrage regulations apply to the Proceeds until they are expended for the purposes for which the Obligations are issued. The Borrower intends to utilize a portion of the Proceeds to reimburse themselves for Project Costs previously paid from other sources. Other than the indebtedness to be refinanced, no costs with respect to the Project or Cost of Issuance (other than Preliminary Expenditures described below) were paid or incurred prior to a date which is 60 days prior to March 23, 2004, the effective date of the resolution adopted by the Borrower with respect to the Project. The aforementioned resolution evidenced the intent of the governing body adopting such resolution to borrow the allocable portion of Proceeds for the purpose of financing the Project, and, prior to the aforementioned date, the Borrower had not entered into any binding agreement in connection with the acquisition, construction, improving or equipping of the Project, no on-site workhad been commenced in connection with the construction of the Project and no off-site fabrication of any portion of the Project had been commenced. V. YIELD. A. Source of Payment. Payments ofprincipal, premium and interest with respect to the Obligations will be made solely from moneys derived from the Loan Agreement (other than to the extent payable from Proceeds or temporary investments). The Obligations are payable from revenues constructively received quarterly by the Issuer pursuant to the Loan Agreement (but actually paid directly to the Lender and applied to payment of the Obligations). The payments by the Borrower under the Loan Agreement exactly equal debt service payments on the Obligations. It is expected that the Borrower will not make any payments sooner than necessary under the Loan Agreement. The earnings and profits of any temporary investment of amounts held under the Loan Agreement, if any, will accrue to the Borrower, not to the Issuer. B. Materially Higher. The Yield restriction applicable to Proceeds is a Yield which is Materially Higher than the Yield. No portion of the Obligations is issued for the purpose of investing the proceeds thereof at a Materially Higher Yield. C. Single Issue. The Obligations are not (i) being sold and delivered to the Underwriter at substantially the same time; (ii) pursuant to the same plan of financing; and (iii) payable from substantially the same source of funds as any other issue of tax-exempt bonds. The Obligations are therefore not being combined with any other issue of tax-exempt bonds for purposes of calculating the Yield. D. Calculation of Yield. The Obligations initially bear interest at the rate of 4.25 percent per annum. On each Adjustment Date, the interest rate on the Obligations will be adjusted to the Adjusted Rate. Other than an interest rate increase pursuant to a Determination of Taxability, the maximum annual rate of interest payable on the Obligations will not exceed 6.75 percent per annum. E. Loan Agreement as Acuuired Purpose Obligation. For purposes of computing the Yield produced by the Loan Agreement as an acquired purpose obligation, the Issue Price is treated as the "purchase price" of the Loan Agreement. In addition, the Issuer will receive reimbursement of future costs of enforcing the Loan Agreement (not treated as Yield). F. Program Investments. The Borrower has agreed to pay an administrative fee to the Issuer in conjunction with the issuance of the Obligations in accordance with its established fee schedule for issuing "private activity bonds" as provided in Section 3.11 of the Loan Agreement, as follows: on the Closing Date, an amount equal to $3,565. 2. As used herein, the term "administrative costs" means the cost of issuing, carrying or repaying the Obligations and the cost of purchasing, carrying and selling or redeeming the acquired Purpose Investment with respect to the Obligations. The yield on the Loan Agreement and Obligations is not expected to exceed the Yield by more than 1 %percent (the yield spread permitted Program Investments pursuant to Section 1.148-2(d)(2)(iii) of the Regulations). G. Yield Restriction. All Gross Proceeds will be invested at market prices and at a yield not in excess of the Yield. The Borrower does not reasonably expect to use any portion of the Proceeds directly or indirectly to acquire Materially Higher yielding investments or replace funds which were used directly or indirectly to acquire higher yielding investments. Notwithstanding the foregoing, the Borrower does not elect to waive the right to invest in higher yielding investments during temporary periods. H. Temporary Periods. Thirteen -Month Period. Amounts on deposit in the Bond Account qualify for a temporary period of 13 months. Amounts treated as Proceeds because they are held in the Bond Account may be invested in higher yielding investments for a temporary period not exceeding 13 months from the date of their deposit in the Bond Account as permitted by Regulations Section 1.148-2(e)(5)(ii). 2. One -Year Period. Investment Proceeds which are not Gross Proceeds qualify for a temporary period of 1 year beginning on the date of receipt. Investment Proceeds for which no other temporary period is available may be invested in higher yielding investments for a temporary period of 1 year from the date of receipt of those investment earnings in accordance with Regulations Section 1.148-2(e)(6). Thirty -Day Period. Gross Proceeds not otherwise eligible for a temporary period qualify for a temporary period of 30 days beginning on the date of receipt. V1. REBATE. A. Bond Account. So long as the Bond Account retains its status as a Bona Fide Debt Service Fund within the meaning of Regulations, Section 1.148-1(b), it will be exempt from the payment of arbitrage rebate under Section 128(f) of the Code. B. Six -Month Spending Exemption. The Borrower expects all Proceeds will be spent within 6 months of the Closing Date and no rebate of arbitrage profits will be required. C. Rebate. In the event Proceeds are not so spent, the Borrower will compute and cause the payment to the United States of all amounts required under the rebate requirement of Section 148(f) of the Code and the Regulations issued thereunder and Section 2.03 of the Loan Agreement. VII. REFUNDING. A. No Refunding. No portion of the Proceeds will be used to pay principal, interest or the redemption price of another issue of tax-exempt obligations. B. Payment of Prior Debt. The entire outstanding amount of principal of and interest on the Borrower's outstanding indebtedness incurred with respect to the Proj ect will be paid in full on the Closing Date. VIII. OTHER ARBITRAGE REQUIREMENTS. A. Not to be Sold. The Borrower does not expect to sell or otherwise dispose of any property included in the Project before the final maturity of the Obligations, except such portions thereof that may be disposed of in the ordinary course which become inadequate, obsolete, worn-out, unfit or no longer necessary or useful to the operation of the Borrower's facilities. B. No Artifice or Device. The Obligations, including the issuance there of, are not and will not be part of a transaction or series of transactions that attempts to circumvent the provisions of Code Section 148 and the Regulations (1) enabling the Issuer or the Borrower to exploit the difference between tax-exempt and taxable interest rates to gain a material financial advantage and (2) overburdening the market for tax-exempt obligations. The Borrower shall not take any deliberate, intentional action after the Closing Date to earn arbitrage profit except to the extent such action would not have caused the Obligations to be arbitrage bonds had it been reasonably expected on the Closing Date. Neither the Issuer, the Borrower nor any member of the same Controlled Group as the Issuer or the Borrower has or will receive a rebate or credit resulting from any payments having been made in connection with the issuance of the Obligations. DC. OTHER REQUIREMENTS FOR TAX EXEMPTION. A. No Private Business Use. The payment of the principal of, or interest on, no more than 5 percent of the Gross Proceeds is (under the terms of the Obligations or any underlying arrangement) directly or indirectly: (1) secured by any interest in: (a) property used or to be used for a private business use, or (b) payments in respect of such property; or (2) to be derived from payments (whether or not to the Issuer) in respect of property, or borrowed money, used or to be used for a private business use as defined in Code Section 141. B. No Unrelated Trade or Business Disproportionate Use. Not more than 5 percent of the Gross Proceeds (in the aggregate) will be used, directly or indirectly: 10 I . to finance or refinance any private business use which is not related or is disproportionate to the governmental use financed by the Obligations; 2. to finance or refinance property used in any unrelated trade or business [as such terms are used in Section 513(a) of the Code and determined by applying Section 513(c) of the Code] of a Section 501(c)(3) Organization; or 3. in the trade or business of any Non-exempt Person; and 4. to pay the Cost of Issuance. C. Qualified 501(c)(3) Bond. 1. All of the property financed, refinanced or otherwise provided by the Proceeds will be owned by the Borrower or a Person under common management and control with Borrower and each of such Persons is or will be a Section 501(c)(3) Organization. 2. No portion of the Gross Proceeds is to be used directly or indirectly to provide residential rental property for family units except as allowed by Code Section 145(d)(2). 3. In order to comply with Section 145(a) of the Code, the Borrower represents that: a. all of the Net Proceeds will be applied to either: (1) refinancing outstanding indebtedness of the Borrower incurred with respect to the Project; or (2) payment of Cost of Issuance, b. no part of the Project is or will be used, directly or indirectly, in any activity which constitutes: (1) an unrelated trade or business activity of the Borrower or a Person under common management and control with the Borrower, determined by applying Section 513(a) of the Code, or (2) a trade or business of a Non-exempt Person. D. Qualified 501(c)(3) Bond - $150,000,000 Limitation. The Borrower, any organization with which the Borrower are under common management or control and any organization which may be a principal user of the Project do not have outstanding tax exempt obligations in an amount in excess of $150,000,000. E. Change of Use. The Borrower covenants that it shall make no use of the Project, including but not limited to entering into any agreement for the management of the Project or any similar agreement, the effect of which would cause the Obligations not to constitute "qualified 501(c)(3) bonds," within the meaning of Section 145 of the Code. 11 2. If any portion of the Project is used in a trade or business of any person other than the Borrower, another Exempt Person or in an unrelated trade or business of the Borrower or such other Exempt Person (the "Private Use Portion"), the Borrower shall be treated for federal income tax purposes as engaged in an unrelated trade or business as defined in Section 513(a) of the Code with respect to such Private Use Portion for such period and the registered holders of the Obligations will not be allowed to deduct interest paid on the portion of the Loan used to finance such Private Use Portion. In that event, the amount of gross income attributable to the Private Use Portion for any period will not be less than the fair rental value of the Private Use Portion for such period. The Borrower certifies that less than 3 percent of the principal amount of the Obligations will finance any Private Use Portion, 3. In determining whether all or any portion of the Project is used, directly or indirectly, in the trade or business of a Non-exempt Person, the Borrower acknowledges that use of a portion of, or direct or indirect benefit from, the Project by a Non-exempt Person pursuant to a lease, management contract or other arrangement must be examined. A lease, management contract or other arrangement between the Borrower and a Non-exempt Person with respect to the Project or any portion thereof will not result in the Project being used for federal income tax purposes in the trade or business of the Non-exempt Person (and, accordingly need not be taken into account for purposes of the representations made in the previous paragraph) if the guidelines set forth in the Code and the Regulations are met (those guidelines being presently set forth in Revenue Procedure 97-13). 4. The Borrower also acknowledges that if at any time during the period the Obligations are outstanding, the Project is no longer owned by the Borrower or another Exempt Person, interest payable on such owner's financing relating to the Project which accrues during the period of such ownership will not be deductible for federal income tax purposes. The tax consequences discussed in this paragraph are in addition to, and not a substitution for, the potential loss of the federal income tax exemption for interest on the Obligations as a result of the events referred to herein which may constitute a default by the Borrower with respect to its representations and covenants under the Loan Agreement. F. No Residential Rental Property. No portion of the Gross Proceeds is to be used directly or indirectly to provide residential rental property for family units except as allowed by Code Section 145(d)(2). G. Volume Caro. No allocation of bonding authority (volume cap) from the State of Minnesota in conformance with the requirements of Code Section 146 was required. H. Maturity/Economic Life. For the purpose of making the calculations described in this section, land was acquired with less than 25 percent of the Proceeds and, therefore, was not taken into account in determining the average economic life of the Project. 1. The weighted average maturity of the Obligations is 12.06 years. 2. The "average reasonably expected economic life" of the Project is 23.5320 years, as further shown on Exhibit B to this Certificate. 12 3. 120 percent of the adjusted economic life of the Project is 28.2384 years, which is in excess of the weighted average maturity of the Obligations. 4. In making the calculations described herein, the reasonably expected economic life of each asset has been determined as of the later of: (i) the Closing Date, or (ii) the date on which such asset is expected to be placed in service. In calculating such economic life, the individual items of property have each been assigned an estimated economic life by the Borrower. The actual economic life of each item is reasonably expected to equal or exceed the estimate assigned to such item by the Borrower, based on substantially similar property, taking into account obsolescence caused by technological changes. Prohibited Uses. As required by Code Section 147(e), while the Obligations remain outstanding, no portion of the Gross Proceeds will be used to provide any airplane, skybox or other private luxury box, health club facility, any facility primarily used for gambling, or a store, the principal business of which is the sale of alcoholic beverages for consumption off premises. J. Proceeds to be Spent in Jurisdiction of the Issuer Public Approval. The Proceeds will only be spent within the jurisdictional limits of the Host Municipalities. Pursuant to Code Section 147(f), the governing body of each of the Host Municipalities each held a public hearing on the Proj ect and the Obligations after 14 -days' published notice in a newspaper of general circulation within its jurisdiction. At this hearing all interested persons were invited and given an opportunity to comment upon the nature and location of the facilities comprising the Project and the financing thereof by the Obligations. K. Cost of Issuance. The Borrower will not use more than 2 percent of the Proceeds or any portion thereof treated as a separate issue (before rounding) (including, but not limited to, investment earnings, if any), to pay Cost of Issuance [within the meaning of Code Section 147(g)]. L. Registered Form. The Obligations are issued only in registered form as required by Code Section 149(a). M. No Federal Government Interest. The Borrower covenants that the Obligations will not be "federally guaranteed" within the meaning of Section 149(b) of the Code. For purposes of this Section, the Obligations are "federally guaranteed" if: the payment of principal or interest with respect to the Obligations is guaranteed, directly or indirectly, (in whole or in part) by the United States (or any agency or instrumentality thereof), or 2. 5 percent of more of the Proceeds is: a. used to make loans the payment of principal or interest with respect to which is to be guaranteed (in whole or in part) by the United States (or any agency of instrumentality thereof) or b. invested (directly or indirectly) in federally insured deposits or accounts. For purposes of the previous paragraph, the Obligations shall not be treated as "federally guaranteed" by reason of any investment of the Proceeds: 13 a. during the initial 3 -year temporary period until such proceeds are needed for the governmental purpose for which the Obligations are being issued, b. during the 13 -month temporary period applicable to Bona Fide Debt Service Fund investments, C. as part of a reserve which meets the requirements of Section 148(d) of the Code, d. in bonds issued by the United States Treasury or e. in any other investments permitted by the Regulations. N. Information Reporting. Pursuant to Code Section 149(e), the Borrower has provided the information contained in Form 8038. We have examined Form 8038 and to the best of our knowledge, all information contained therein is true and correct and the form and contents thereof are approved. 2. In such regard, the Borrower further certifies the following: a. the Borrower will cause the Issuer to timely file a Form 8038 Information Return respecting the Obligations with the IRS; b. the NAICS Code for the Project is 623990, group homes for the disabled without nursing care; C. the nonrefunding proceeds allocable thereto is $698,740; d. the federal employer identification number of the Borrower is 41-0962296; e. the amount of all other outstanding (non -hospital) tax-exempt bonds benefitting the Borrower is $1,269,211. The Borrower shall file or cause to be filed with the IRS such reports and other documents as may be required from time to time by the Code and the Regulations, in accordance with an opinion of Bond Counsel. O. Hedge Bonds. The Obligations are not "hedge bonds" since the Borrower reasonably expects that at least 85 percent of the Sale Proceeds will be used for the governmental purposes of the Obligations within 3 years of the Closing Date and that no more than 50 percent of the Proceeds will be invested in Nonpurpose Investments (other than tax-exempt obligations) having a substantially guaranteed yield for 4 years or more. No Other Obligations. Except for the Obligations, there are no other obligations of a state or political subdivision that: (i) are sold or are to be sold within 15 days of the sale of the Obligations; (ii) have been or are to be sold pursuant to the same plan of financing, including bonds for the same facility or related facilities; and (iii) are reasonably expected to be paid from substantially the same source of funds, determined without regard to guarantees from unrelated parties. 14 Q. Establishment Clause. The Borrower will not permit the use of the Project or any part thereof primarily for sectarian instruction or study or as a place for devotional study or religious worship or in connection with any part of the program of a school or department of divinity for any religious denomination or the training of ministers, priests, nuns, rabbis or other similar persons in the field of religion or in a manner which is prohibited by (i) the Establishment of Religion Clause of the First Amendment to the Constitution of the United States of America and the decisions of the United States Supreme Court interpreting the same, or (ii) any comparable provision of the constitution of the State and the decisions of the State Supreme Court interpreting the same. 2. To the extent any chapel areas are to be constructed or renovated in connection with, but not as part of, the Project, such construction, renovation or equipment costs will not be paid from Proceeds, but from other available moneys of the Borrower. X. CONCLUSION. A. The Borrower covenants that it will not make or permit any use of the Gross Proceeds which if such use had been reasonably expected on the Closing Date, would have caused the Obligations to be "arbitrage bonds" within the meaning of Code Section 148 and applicable Regulations, and further covenants that it will observe and not violate the requirements of Code Section 148 and the applicable Regulations. B. The facts and estimates on which the foregoing expectations of the Borrower are based are set forth in the following: (i) the documents included in the Bond Transcript; (ii) all engineering and architectural estimates, drawings and reports heretofore furnished the Borrower with respect to said Project; (iii) all contracts, if any, heretofore executed for the acquisition of the Project; (iv) all expenditures which were heretofore made by the Borrower for the acquisition, construction, and equipping of the Project and which are to be reimbursed out of the Proceeds; and (v) the covenants made by the parties to the Loan Agreement, the terms of which are incorporated herein by reference and made a part of this Certificate. C. The Borrower is not aware of any facts or circumstances that would cause it to question the accuracy of said representations and, to the best of the knowledge and belief of the Borrower, the expectations set forth herein are reasonable. On the basis of the foregoing, it is not expected by the Borrower that the Proceeds will be used in a manner that would cause the Obligations to be arbitrage bonds under Section 148 of the Code and the Treasury Regulations and, to the best knowledge and belief of the Borrower, there are no facts, estimates, or circumstances other than those mentioned above that would materially change the conclusion that it is not expected that the Proceeds will be used in a manner that would cause the Obligations to be arbitrage bonds under Section 148 of the Code and the Treasury Regulations. D. The representations contained in this Certificate are made for the benefit of the Issuer, the Underwriter, Bond Counsel, and others, and may be relied upon by the Issuer, the Underwriter, Bond Counsel and others in determining whether or not the Obligations constitute "arbitrage bonds" within the meaning of Section 148 of the Code and whether or not the interest on the Obligations is subject to income taxation by the United States or the State of Minnesota under existing statutes, regulations and decisions. W WITNESS our hands as of the date first above written. M: VkcsV557610M00010ERICN6555.IVPD PEOPLE INCORPORATED Treasurer ^ By S'1 Executive Director EXHIBIT A ENDORSEMENT TO ARBITRAGE AND TAX CERTIFICATE BY ISSUER This Endorsement to Arbitrage and Tax Certificate, dated as of August 1� , 2004 (this "Endorsement"), is given by the undersigned, being the duly elected or appointed and acting Mayor and City Manager, respectively, of the City of New Hope, Minnesota (the "Issuer"), who certify that: 1. Authority. We have been authorized to execute and deliver on behalf of the Issuer, the Issuer's $713,000 Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) (the "Obligations"). 2. Certificate. The undersigned has read the preceding Arbitrage and Tax Certificate dated as of the Closing Date (the "Certificate"), given by People Incorporated. Capitalized terms used but not defined in this Endorsement have the meanings given in the Certificate. 3. Reliance on Borrower's Representations. The facts, estimates and expectations of the Issuer expressed in this Certificate are based solely upon representations made by People Incorporated, a Minnesota nonprofit corporation (the `Borrower"). The Issuer is not aware of any facts or circumstances that would cause it to question the accuracy of the foregoing. 4. Reliance on Issuer's Certifications. The Commissioner of Internal Revenue has not published notice of, nor has the Issuer been notified of, any listing or proposed listing of the Issuer by the Internal Revenue Service as an issuer whose certification may not be relied upon for arbitrage purposes by the holders of its obligations. 5. Public Approval. Pursuant to Code Section 147(f), the governing body of the Issuer held a public hearing on the Project and the Obligations on July 26, 2004, after 14 -days' published notice in a newspaper of general circulation within its jurisdiction. At this hearing all interested persons were invited and given an opportunity to comment upon the nature and location of the facilities comprising the Project and the financing thereof by the Obligations. 6. No Common Plan of Financing. There are no other tax-exempt obligations of the Issuer which (a) are issued within 15 days of the issuance of the Obligations, (b) are sold pursuant to a common plan of financing together with the Obligations„ and (c) will be paid out of substantially the same source of funds or will have substantially the same claim to be paid out of substantially the same source of funds as the Obligations. 7. Governmental Purpose of Loan Agreement. The Loan Agreement was acquired for the governmental purposes of the Obligations and constitutes the Purpose Investment for the Obligations. The payments to be made pursuant to the Loan Agreement are equal to the payments due under the Obligations. 8. Status of Loan Agreement as a Program Investment. The Loan Agreement is an investment that is acquired by the Issuer to carry out the governmental purpose of the Obligations (a "Purpose Investment"), that is part of a governmental program: a. which involves the origination or acquisition of Purpose Investments; b. at least 95 percent [90 percent for qualified student loans under Section 144(b)(1)(A)] of the cost of the Purpose Investments acquired under the program represents one or more loans to a substantial number of persons representing the general public, States or political subdivisions, 501(c)(3) organizations, persons who provide housing and related facilities, or any combination of the foregoing; at least 95 percent of the receipts from the Purpose Investments are used to pay principal, interest, or redemption prices on issues that financed the program, to pay or reimburse administrative costs of those issues or of the program, to pay or reimburse anticipated future losses directly related to the program, to finance additional Purpose Investments for the same general purposes of the program, or to redeem and retire governmental obligations at the next earliest possible date of redemption; d. the program documents prohibit any obligor on a Purpose Investment financed by the program or any related party to that obligor from purchasing bonds of an issue that finance the program in an amount related to the amount of the Purpose Investment acquired from that obligor; and e. the Issuer has not waived the right to treat the investment as a program investment. 9. Bank Qualification. In order to qualify the Obligations as "qualified tax-exempt obligations" within the meaning of Code Section 265(b)(3), the Issuer makes the following factual statements and representations: a. based upon representations of the Borrower, the Obligations are qualified 501(c)(3) bonds under Code Section 145; b. the Issuer designates the Obligations as "qualified tax-exempt obligations" for purposes of Code Section 265(b)(3); the reasonably anticipated amount of tax-exempt obligations [other than obligations described in clause (ii) of Code Section 265(b)(3)(C)] which will be issued by the Issuer (and all entities whose obligations will be aggregated with those of the Issuer) during the calendar year in which the Obligations are issued will not exceed $10,000,000; d. not more than $10,000,000 of obligations issued by the Issuer during the calendar year in which the Obligations are issued have been or will be designated for purposes of Code Section 265(b)(3); and e. the Issuer will derive substantial benefit from the Project and has agreed with the Host Municipalities that such benefit bears a reasonable relationship to the respective benefits received by the Host Municipalities. 10. Conclusion. a. The Issuer shall not take any deliberate, intentional action after the Closing Date to earn arbitrage profit except to the extent such action would not have caused the Obligations to be arbitrage bonds had it been reasonably expected on the Closing Date. b. Based solely upon the statements, representations and covenants made by the Borrower, or otherwise contained in the documents executed in connection with or otherwise related to the issuance of the Obligations, including the foregoing Arbitrage and Tax Certificate, the undersigned reasonably expect that the Proceeds will be used for the purposes, in the amounts and in the manner set forth in the foregoing Arbitrage and Tax Certificate. C. While the undersigned have made no independent investigation with respect thereto, nothing has come to their attention which would cause them to question the representations set forth in the foregoing Arbitrage and Tax Certificate as to the use of the Proceeds; provided, however, that nothing herein is intended or will be construed as a representation or an endorsement by the Issuer respecting applicable law or legal conclusions. Exhibit A, page 2 WITNESS our hands as of the date first above written. M iAoa1155761WWOO10ERICN6555.WP0 CITY OF NEW HOPE, MINNESOTA -H May By City Manager Exhibit A, S-1 EXHIBIT B USEFUL LIFE CALCULATION Average reasonably expected economic life of the above [column (c) subtotal divided by column (a) total] = 23.5320 1 Includes all assets financed not only from the principal amount of the Obligations, but all earnings on the proceeds of the Obligations. 2 As of the expected date the item will be placed in service. 3 As of the Closing Date. The Borrower understands that the actual estimated economic life of the asset financed from the proceeds of the Obligations will depend on the actual placed in service date thereof. The economic life of an asset is expressed in years and is the reasonably expected economic life of the asset, but not longer than the "midpoint life" under the Asset Depreciation Range ("ADR") system, as set forth in Revenue Procedure 77-10,1977-1 C.B. 548, as modified by Revenue Procedure 83-85,1983-1 C.B. 745, where applicable, and the "guideline lives" under Revenue Procedure 62-21, 1962-2 C.B. 418, in the case of structures. A/Adoral 155J6100000010ERIGN6555.WPD (a) (b) (c) Allocation of Remaining Product of (a) Asset Financed' Proceeds Economic Life and (b) 1. Cost of Land to be refinanced with $89,000 0 years 0 Proceeds of Obligations' 2. Buildings and other Structures $504,605 27 years 13,624,335 acquisition costs to be refinanced with Proceeds of Obligations' 3. Buildings and other Structures $105,135 30 years 3,154,050 acquisition costs to be reimbursed with Proceeds of Obligations' 4. Subtotal $698,740 16,778,385 5. Cost of Issuance $14,260.00 6. TOTAL $713,000.00 Average reasonably expected economic life of the above [column (c) subtotal divided by column (a) total] = 23.5320 1 Includes all assets financed not only from the principal amount of the Obligations, but all earnings on the proceeds of the Obligations. 2 As of the expected date the item will be placed in service. 3 As of the Closing Date. The Borrower understands that the actual estimated economic life of the asset financed from the proceeds of the Obligations will depend on the actual placed in service date thereof. The economic life of an asset is expressed in years and is the reasonably expected economic life of the asset, but not longer than the "midpoint life" under the Asset Depreciation Range ("ADR") system, as set forth in Revenue Procedure 77-10,1977-1 C.B. 548, as modified by Revenue Procedure 83-85,1983-1 C.B. 745, where applicable, and the "guideline lives" under Revenue Procedure 62-21, 1962-2 C.B. 418, in the case of structures. A/Adoral 155J6100000010ERIGN6555.WPD EXHIBIT C PROJECT DESCRIPTION Refinancing of commercial indebtedness incurred for the acquisition, renovation or equipping of the shared housing facilities for persons with mental illness listed below and the financing of a portion of the costs associated with the financing: Name and Address of Facility Size and Description of Facility Heather Ridge 5 bedroom - 3 bath, 3 car attached, 7483 46th St. N. 4 level split home Oakdale, MN Jordan House 4 bedroom - 1.75 bath, 1 car 7708 45th % Av. N. attached, rambler New Hope, MN Upton House 3 BR upper level, egress window 7720 Upton Av. S. & 1 addl BR added LL, rambler, Richfield, MN 2.25 bath, 2 car detached Londin House 4 BR, 2 Bath, Split entry home 384 Londin Place St. Paul, MN Scott House 4BR, 3 Bath rambler 7573 Scott Ave. N. Brooklyn Park MN EXHIBIT D ENDORSEMENT TO ARBITRAGE AND TAX CERTIFICATE BY LENDER This Endorsement to Arbitrage and Tax Certificate by Lender, dated as of August 1.4. , 2004 (this "Endorsement"), is given by the undersigned, being the duly appointed and acting Vice President of St. Anthony Park State Bank (the "Lender"), who certifies that: 1. Purpose. This Endorsement is given in our capacity as registered holder of the City of New Hope, Minnesota $713,000 Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) (the "Obligations"). 2. Certificate. The undersigned has read the preceding Arbitrage and Tax Certificate dated as of the Closing Date (the "Certificate"), given by People Incorporated (the "Borrower"). Capitalized terms used but not defined in this Endorsement have the meanings given in the Certificate. 3. Reliance on Borrower's Representations. The facts, estimates and expectations of the Lender expressed in this Endorsement are based solely upon representations made by the Borrower. The Lender is not aware of any facts or circumstances that would cause it to question the accuracy of the foregoing Certificate. 4. Conclusion. a. The Lender shall not take any deliberate, intentional action after the Closing Date to earn arbitrage profit except to the extent such action would not have caused the Obligations to be arbitrage bonds had it been reasonably expected on the Closing Date. b. Based solely upon the statements, representations and covenants made by the Borrower, or otherwise contained in the documents executed in connection with or otherwise related to the issuance of the Obligations, including the foregoing Certificate, the undersigned reasonably expects that the Proceeds will be used for the purposes, in the amounts and in the manner set forth in the foregoing Certificate. C. While the undersigned has made no independent investigation with respect thereto, nothing has come to his attention which would cause him to question the representations set forth in the foregoing Certificate as to the use of the Proceeds; provided, however, that nothing herein is intended or will be construed as a representation or an endorsement by the Lender respecting applicable law or legal conclusions. d. To the best of the knowledge and belief of the Lender there are no other facts, estimates or circumstances that would materially change the conclusions, representations and expectations contained in the foregoing Certificate. WITNESS my hand as of the date first above written. ST. ANTHONY PARK STATE BANK By Its �` ,,,,axe of Minnesot SECRETARY OF STATE Certificate of Good Standing I, Mary Kiffineyer, Secretary of State of Minnesota, do certify that: The corporation listed below is a corporation formed under the laws of Minnesota; that the corporation was formed by the filing of Articles of Incorporation with the Office of the Secretary of State on the date listed below; that the corporation is governed by the chapter of Minnesota Statutes listed below; and that this corporation is authorized to do business as a corporation at the time this certificate is issued. Name: People Incorporated Date Formed: 07/01/1969 Chapter Governed By: 317A This certificate has been issued on 08/02/04. 07/21JU1.22.2004' 4; 10PV""'SAINTANTHONVPARKBANKS I NO. 629 P. 2 ' Chicago Title Insur ante Company Issued by its Agen nd Title, Inc. COMMffC1 ENT SCIMDUiX A Case No. 239174 1. Effective bats: May 4, 2004 at 7:00 A.M. 2- Policy or Policies to be issued: i (a) 0 ALTA Owner's Policy - 10/17/92 Amount - 0 - Proposed Insured: NONE (b) W ALTA Long Form Loan Policy -10/17/921 Amount $713,000.00 Proposed Insured: St. Anthony Park Bank its successors and assigns as their interests may appear. 3. Title to the Fee Simple estate or interest in the land described or referred to in this Commimtent is at the effective date hereof vested in: People Incorporated, a Minaesota Corporation 4. The sand referred to in the Commitment is descnbed as follows: SEE ATTACEED 'EXMBIT A I i I I I I I Washington, Hennepin and Ramsey County Abstract/Torrens Property, Certificate Number: j This commianont is invalid unless the Insuring Provisions an4 Schedules A and B are attached Schedule A consist, of 2 page(s) 11/21JUL.22. 2004' 4: 10PV""'SAINTANTHONVPARKBANK ' ` "' " NO. 629 P. 3 - Chicago Title Insurance Company Issued by its Agent Land Title, Inc. COMMI'T'MENT SCREDIIILE A I Case No. 239174 EXIiY$IT A i i Parcel 1: Lot 2, Block 3, Heather Ridge 2" Addition, Washington County, Minnesota (Abstract) Parcel 2: Lot 10, Block 4, Donnay's Hrookdale Estates 51h Addition, Hennepin County, Minnesota. (Abstract) Parcel 3, Lot 7, Block 2, Winnetka Hills 2" Addition, Hennoin County, Minnesota. (Torrens Certificate Number 1067085) Parcel 4: Lot 4, Block 5, Meadow Lane Addition, Hennepin) County, Minnesota. (Torrens Certificate Number 1078621) Parcel 5: Lot 4, Block 1, Londin Hills, Ramsey County, Mirinesota. (Abstract) This commitment is invalid unless the Insuring Provisions an� Schedules A and B are attached. Schedule A consists of 2 page(s) 07121JUL 22. 2004 4:1OPM""'S AIN TANT HONYPARKBANK NO. 629 P. 4 Chicago Title Insul ante Compapy COMMI I`MENT SCIIRDULE 1 - Section I Requlre�euts 1. The following are the requirements to be complied with: A. Payments to, or for the account of, the sellers or mortgages of the full consideration for the estate or interest to be insured. B. Instruments in insurable form which must be executed, delivered and duly filed for record_ C. Satisfaction of Mortgage executed by Peop a Incorporated a Minnesota corporation dated October 29, 2001, filed May 9, 2002 as Doc nt Number 3235289, in the original amount of ."0171,920.00, in favor of Signal BankNationaI Association. (As to Parcel 1) D. Satisfaction of Mortgage executed by People *icorporated, a Minnesota corporation, dated June 28, 2001, filed July 9, 2001 as Doeumegk Number 3408107, in the original amount of $136,000.00, in favor of Signal BankNationaI Association. (As to Parcel 3) B. Satisfaction of Mortgage executed by Peep�e lacorporated, a Minnesota corporation, dated September 13, 2001, filed November 13, 20Q1 as Document Number 3458017, in the original amount of $136,000.00, in favor of Signal Bank National Association. (As to Parcel 3) F. Satisfaction of Mortgage executed by Paul Culhane and Gladys H. Culhane, husband and wife, dated July 19, 2001, Wed September 4, O1 as Document Number 3428238, in the original amount of $150,000.00, in favor of Richfield $ink & Trust Co. (As to Parcel 4) G. Satisfaction of Mortgage executed by People incorporated, a Minnesota corporation, dated August 7, 2001, filed February 6, 2002as Do trureat Number 3497239, in the original amount of $159,600.00, in favor of Signal Bank Natiol Association, and assigned to Fannie Mae by assignment filed as Document Number 349724;1(As to Parcel 4) H. Satisfaction of Mortgage executed by People incorporated, a Minnesota corporation, dated June 27, 2001, filed June 28, 2001 as Documett Number 3400384, in the original amount of S 144,000.00, in favor of Signal Bank National. (Association. (As to Parcel 5) 1i L Satisfaction of Mortgage executed by People Incorporated, a Minnesota corporation, dated September 13, 2001, filed December 11, 20 1 as Document Number 3449199, in the original amount of S 144,000.00, in favor of Signal B National Association. (As to Farrel S) J. Mortgage Deed duly executed by People Inco Iporated, a Minnesota corporation, in favor of St. Anthony Park Bank, in the original amount of$713,000 00. Case No. 239174 This cominihnetrt is invalid unless the Insuring Provisions and Schedules A and B are attached. Schedule Bl con&4 of 2 pages) 07/21JUL. 22. 2004 4: 11 PM 1""'SAINTANTHONYPARKBANK NO. 629 F. 5 I clhicego TWe Tnsu�nce cu=pimany UUMMr1 MENT i SCHEDULE ) - Section b Require, �I encs K, The standard form of Seller's and/or Purchaser's Affidavit, satisfactory to the Company, will be required_ NOTE: As no Abstract of Title was fumish�d to Land Title, Inc., this examination was done from the records of the Ramsey County Recorder. i I I i I I I i i i I i i i I I I I I I Case No. 239174 This commitment is invalid unless rhe insuring Provisions aild Schedules A and H are attached. Schedule Bl consi of 2 page($) 07/2'JUL. 22. 2004' 4: 11 PV ""`SAINTANTHONVPARKBANK`!- "`" ""'""' NO. 629 P. 6 Chicago Title Insurance Company SCHEDULE .$ - Section JU The policy or policies to be issued will contain exceptions to the following unless the same are disposed of to the satisfaction of the Company. 1. Defects, liens, encumbrances, adverse claims or tate r-matters, if any, created, first appearing in the public records or attaching to subsequent to the ative date hereof but prior to the date the proposed Insured acquires for value of recor3 the or interest or mortgage thereon covered by this Commitment. Note: Upon closing with Land Title, Inc., Item on Schedule B-111 will be deleted. The F foal Policy will extend coverage as to the gap betwe n the Effective Date listed in Item I of Schedule A and the date of recording of the instruments ting the interest to be insured. 2. Any discrepancies or conflicts in boundary lines, any shortages in area, or any encroachment or overlapping of improvements, 3. Any facts, rights, interests or claims which are not shown by the public record but which could be ascertained by an accurate survey of the land or malting inquiry of persons in possession thereof. 4. Easements, liens or encumbrances or claims theeoC which are not shown by the public record. 5. Any lien or right to a lien for services, labor or ma}erial imposed by law and not shown by the public record. 6. Taxes or assessments which are not shown as exist ling liens by the records of any taxing authority that levies taxes or assessments on real property or,by the public record. Proceedings by a public agency which may result in taxes or assessments, or notice of such proceedings, whether or not shown by the records of such agency or the public �ecw_ 7. Parcel 1: Taxes payable in the year 2004 in the t unpaidl"half; (08-029-21-24.0068) Base Tax: Parcel 2: Taxes payable in the year 2004 in the i unpaid. (28-119-21-12-0065) Base Tax: $2,165 Parcel 3: 2004 taxes exempt. (08-118-21-33-006 Parcel 4: 2004 taxes exempt. (32-028.24.43-009 Parcel 5: Taxes payable in The year 2004 in the e unpaid_ (11-28-22-14-0004) Base Tax: $0-00, t Note: 1st Balf Taxes are payable on or before M before October 15th. int of $3.00 Total, unpaid plus penalty on 10, Non-Homestea mt of $2,806.18 Total, V half paid, 2"6 half Homestead. of $173.80 Total, 1" half paid, 2"d half 15th and 2nd HatfTaxes are payable on or Case No. 239174 I This commitment is invalid unless the During Provisions an Schedules A and B are attached. Schedule B2 coashoq of 2 page(s) ourtJUI 22.2004 4:12PM'006'SAINTANTNONYPARKBANK""` "`" """"'"" NO. 629 P. 1 ' Chicago -title Insu#ante Company COMMITMENT SCMDULE 131- Section U Exceptions 8. Parcel 1: There are no levied or pending special assessments. Parcel 2: Levied special assessments are as folioG: St/Light..—$3,924.00 balance... --$606.32 certifiet to 2004 takes. There are no pending special assessments. Parcel 3: Levied and pending special assessments ave been ordered_ Parcel 4: There are no levied or pending special assessments. Parcel 5: There are no levied or pending special assessments. 9. Rights of tenants under any unrecorded leases. 10. Drainage and utility easements over the subject pr4erty as shown on the recorded plat 11. All minerals and mineral rights are reserved to the of Minnesota. I6tate 12_ If there are any questions regarding this Commitm2nt, please contact Roy Mahtberg at (651) 697- 6131 or by email at rmahlberg@landtitleine.com. i I I i i i i Case No, 239174 III This comminnent is invalid Unless the insuring Provisions anp Schedules A and B are attached. Schedule B2 corsis of 2 page(s) CERTIFICATE AND RECEIPT OF LENDER August 94 T, 2004 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 People Incorporated 317 York Avenue St. Paul, Minnesota 55101 I the undersigned, do hereby certify and declare that: I am a vice president, duly elected or appointed and acting as such, of St. Anthony Park State Bank (the "Lender"), a Minnesota banking corporation, the registered holder of the City of New Hope, Minnesota (the "Issuer") $713,000 Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) (the "Note"); 2. The execution, delivery, performance or receipt as the case may be, of the following documents: a. the Pledge Agreement, dated the date hereof, among the Issuer, People Incorporated (the `Borrower") and the Lender; b. the Acknowledgment to the Loan Agreement dated the date hereofbetween the Issuer and the Borrower; and C. a Mortgage, Security Agreement and Fixture Financing Statement, dated the date hereof, securing payment of the Note (the "Mortgage") from the Borrower to the Lender, have been duly authorized by all necessary acts of the Lender, such documents have been signed, acknowledged, delivered or received, as the case may be, on behalf of the Lender by the undersigned and, with respect to those documents to which the Lender is a party or which the Lender has acknowledged, as of the date hereof, assuming the due execution and delivery thereof by the other party or parties thereto, each such document constitutes the valid, binding and enforceable obligation of the Lender, and the Lender is entitled to the benefits of the same; and 3. the Lender has received the Note from the Issuer, fully executed, bearing interest at an initial rate of 4.25 percent, subject to adjustment as provided therein, and payable in accordance with its terms. 4. The Lender's federal taxpayer identification number is 41-0517100. WITNESS my hand as of the date first above written. M'IAom1155%61000000ICERIGJ1159.WPO 2 ST. ANTHONY PARK STATE BANK By Its KS, LAW OFFICES FRYBERGER, BUCHANAN, SMITH & FREDERICK, P.A. SUITE 700 302 WEST SUPERIOR STREET DULUTH, MINNESOTA 55802-1863 TELEPHONE(218)722-0861 FAX [2181725=6800 www.fryberger. com St. Anthony Park State Bank 2265 Como Avenue St. Paul, Minnesota 55108-1797 City of New Hope, Minnesota 4401 Xylon Avenue North New Hope, Minnesota 55428 RE: City of New Hope, Minnesota $713,000 Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) Ladies and Gentlemen: We have acted as Bond Counsel in connection with the authorization, issuance and delivery by the City of New Hope, Hennepin County, Minnesota (the "Issuer"), of the above -referenced Note dated the date hereof (the "Note"). The Note is issued pursuant to Minnesota Statutes, Sections 469.152 through 469.165. For the purpose of rendering this opinion, we have examined: A. the Note; B. a Loan Agreement, dated the date hereof (the "Loan Agreement"), between the Issuer and People Incorporated, a Minnesota nonprofit corporation (the `Borrower"); C. a Pledge Agreement, dated the date hereof (the "Pledge Agreement'), among the Issuer, the Borrower and St. Anthony Park State Bank, a Minnesota state banking corporation (the "Lender"); D. a Joint Powers Agreement, dated the date hereof (the "Joint Powers Agreement'), among the Issuer and the Cities of Oakdale, Richfield and Brooklyn Park, municipal corporations and political subdivisions of the State of Minnesota, and the Housing and Redevelopment Authority of the City of St. Paul, Minnesota, a public body corporate and politic, organized and existing under the laws of the State of Minnesota; E. a Mortgage, Security Agreement and Fixture Financing Statement, dated the date hereof (the "Mortgage") from the Borrower to the Lender; certified copies of resolutions of the governing body of the Issuer approving and authorizing the execution of the Note, the Documents and other documents; Page 2 FRYBERGER, BUCHANAN, SMITH & FREDERICK, P.A. G. the opinion of even date herewith of Mary K. Martin, St. Paul, Minnesota, counsel to the Borrower (the "Opinion of the Borrower's Counsel"); and H. such other documents as we consider necessary in order to render this opinion. (The Loan Agreement, the Pledge Agreement and the Joint Powers Agreement are herein referred to as the "Documents.") As to questions of fact material to our opinion, we have relied upon certified proceedings, documents and certifications furnished to us by public officials and officials of the Borrower without undertaking to verify such facts by independent investigation. We have relied upon: the Opinion of the Borrower's Counsel as to: (A) the due organization, existence and good standing of the Borrower under the laws of the State of Minnesota (the "State"); (B) the due and valid authorization, execution and delivery by the Borrower of the Mortgage and the Loan Agreement and the enforceability of such documents against the Borrower; (C) the power and authority of the Borrower to execute and deliver and perform and carry out its obligations under the Mortgage and the Loan Agreement in furtherance of its exempt purpose; and (D) the status of the Borrower as an organization described in Section 501(c)(3) of the Code and exempt from taxation under Section 501(a) of the Code. We have not been engaged or undertaken to review the accuracy, completeness or sufficiency of any offering material relating to the Note and we express no opinion relating thereto. Based upon such examination, and assuming the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as certified or photostatic copies and the authenticity of the originals, and assuming the genuineness ofthe signatures thereon and the accuracy of the facts and representations stated therein, and on the basis of federal and State laws, regulations, rulings and decisions in effect on the date hereof, but excluding any pending legislation which may have a retroactive date prior to the date hereof, it is our opinion that: 1. The Issuer is a municipal corporation and political subdivision of the State and has full power and authority under the Constitution and laws of the State, including Minnesota Statutes, Sections 469.152 through 469.165, as amended, to execute and deliver the Note and the Documents and to carry out the terms thereof. 2. The Documents have been duly and validly authorized, executed and delivered by the Issuer and, assuming the due and valid authorization, execution and delivery thereof by the other parties thereto, are valid and binding instruments of the Issuer enforceable in accordance with their terms. 3. Based on federal and State laws, as presently enacted and construed, the Note has been duly and validly authorized, executed and delivered by the Issuer and is a valid and binding special, limited obligation of the Issuer enforceable in accordance with its terms. The principal of, premium, if any, and interest on the Note are payable solely from, and secured by, an assignment and pledge by the Issuer to the Lender of the amounts to be received by the Issuer pursuant to the Loan Agreement (other than certain indemnification rights and certain fees and expenses of the Issuer) and other income and revenues pledged pursuant to the Pledge Agreement, or in the event of a default of the Loan Agreement, from the sale, releasing or other disposition of property which further secures payment of the Note; provided, however, we express no opinion as to the priority FRYBERGER, BUCHANAN, SMITH & FREDERICK, P.A. Page 3 of such pledge, assignment and security interest or its effect against third parties. The Note and the interest thereon do not constitute a debt of the Issuer or the State within the meaning of any constitutional provision or statutory or charter limitation and do not constitute or give rise to a pecuniary liability of the Issuer or a charge against its general credit, assets or taxing powers. The Note does not constitute a charge, lien, or encumbrance, legal or equitable, upon any property of the Issuer, except revenues under the Loan Agreement and the agreement of the Issuer to perform or cause the performance of the covenants and other provisions herein referred to are subject at all times to the availability of revenues from the Loan Agreement, or in the event of a default of the Loan Agreement, from the sale, releasing or other disposition ofproperty which secures payment of the Note sufficient to pay all costs of such performance or the enforcement thereof. 4. The Note, as of the date of its issuance, bears interest which is (a) not includable in gross income of the recipient for federal income tax purposes or in the taxable net income of individuals, trusts, and estates for State income tax purposes; (b) includable for purposes of computing the State franchise tax imposed on corporations and financial institutions and measured by income; (c) not an item of tax preference which is included in "alternative minimum taxable income" for purposes of the federal alternative minimum tax applicable to all taxpayers under the Internal Revenue Code of t 986, as amended (the "Code") or the alternative minimum tax imposed on individuals, trusts and estates; and (d) includable, for federal tax purposes, in adjusted current earnings for purposes of determining the "alternative minimum taxable income" of corporations. We express no opinion as to other federal or state tax consequences arising from ownership of the Note. 5. The Note has been designated by the Issuer as a "qualified tax-exempt obligation" under and within the meaning of Section 265(b)(3)(b) of the Code. In rendering the opinion contained in paragraphs 4 and 5 above, we have relied upon representations and certifications made by the Issuer, the Borrower and others in connection with the issuance of the Note as to the nature, cost, use and useful life of the facilities financed by the Note, the application to be made of the proceeds of the Note, the investment of such proceeds and other matters material to the tax-exempt status of the interest borne by the Note, including the anticipated sources of repayment of the Note. We have assumed that the proceeds of the Note will be applied in accordance with the provisions of the Loan Agreement and the representations made by the Borrower and that the Borrower will make any necessary calculations and pay to the United States any amounts required under Section 148 of the Code. Failure by the Borrower to comply with applicable requirements of the Code could cause the interest on the Note to be includable in the gross income of the owners thereof for federal income taxation, either prospectively or retroactively to the date hereof. We express no opinion as to other federal or state tax consequences arising from ownership of the Note, except as set forth in paragraphs 4 and 5. Dated: August 24, 2004 Respectfully submitted, M9d,,v IJ,7610000001OPMGO81I0. R'PD LAW OFFICES OF Phone: 651-451-0550 MARY K. MARTIN Toll Free: 1-888-664-6529 2411 Francis Street Fax: 651-451-8470 St. Paul, MN 55075 Email: MMinlaw@aol.com August 24, 2004 St. Anthony Park State Bank 2265 Como Avenue St. Paul, Minnesota 55108-1797 City of New Hope 4401 Xylon Avenue North New Hope, Minnesota 55428 Fryberger, Buchanan, Smith & Frederick, P.A. 302 West Superior Street, Suite 700 Duluth, Minnesota 55802 RE: $713,000 City of New Hope, Minnesota Health Care Facilities Revenue Note, Series 2004 (People Incorporated Project) Ladies and Gentlemen: I have acted as counsel to People Incorporated, a Minnesota nonprofit corporation (the `Borrower"), in connection with the authorization, issuance and sale by the City of New Hope, Minnesota (the "Issuer"), of the above -referenced Note dated the date hereof (the "Note"), and the loan of the proceeds thereof to the Borrower. For the purpose of rendering this opinion, I have examined the following: (a) The corporate records of the Borrower, including its Articles of Incorporation, Bylaws, minutes of meetings of the board of directors, and certain resolutions, including the resolution of the board of directors of the Borrower approving the Loan (as defined in the Loan Agreement described below) and authorizing the execution, delivery, and performance of the Documents (described below). (b) The Loan Agreement, dated the date hereof, between the Issuer and the Borrower (the "Loan Agreement'). (c) The Pledge Agreement, dated the date hereof, among the Issuer, the Borrower and St. Anthony Park State Bank, a Minnesota state banking corporation (the "Lender"); (d) The Mortgage, Security Agreement and Fixture Financing Statement, dated the date hereof, from the Borrower, as mortgagor, to, Lender as mortgagee (the "Mortgage"). (The Loan Agreement, the Pledge Agreement and the Mortgage are herein referred to as the "Documents.") (f) Certain indentures, mortgages, deeds of trust, and indebtedness agreements of the Borrower and judgments, decrees and orders by which the Borrower or its properties are bound. (g) Such other materials, including relevant provisions of the laws of the State of Minnesota (the "State"), as I have deemed pertinent as a basis for rendering the opinion hereinafter set forth. Based upon the inquiry and review and the facts revealed therein, I express the following opinions 1. The Borrower has been duly incorporated and is validly existing and in good standing as a corporation under the laws of the State. 2. The Borrower is a nonprofit corporation and organization described in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (the "Code"), exempt from federal income taxation under Section 501(a) of the Code, and there is no threatened or pending change to such status. The Borrower is not a private foundation, within the meaning of Section 509 of the Code 3. I have represented the Borrower on certain matters since approximately 1987, and nothing has come to my attention that would cause me to believe that the Borrower is not being operated as an organization described in Section 501(c)(3) of the Code that is exempt from federal income taxation under Section 501(a) of the Code. Neither the execution of the Documents by the Borrower nor the ownership and operation of the Project, as contemplated in the Loan Agreement and the Mortgage, will jeopardize the Borrower's status as an organization described in Section 501(c)(3) of the Code. 4. To the best of my knowledge, (a) the use of the Project by the Borrower does not constitute an "unrelated trade or business" of the Borrower, as determined by applying Section 513(a) of the Code to the Borrower; (b) the Borrower has not declared and has not been determined to have any "unrelated business taxable income," as defined in Section 512 of the Code arising out of the ownership, use, or operation of the property to be financed or refinanced with the proceeds derived from the Note and the Loan; and (c) the Borrower has no "unrelated business taxable income" from any source which could have a material adverse effect on its status as an organization described in Section 501(c)(3) of the Code or its exemption from federal income taxation under Section 501(a) of the Code or which, if such income were subject to federal income taxation, would have a material adverse effect on the condition, financial or otherwise, of the Borrower. 5. The Borrower has full power and authority to execute, deliver, and perform the Documents; to cant' out the terms thereof, and to own its property and conduct its business as presently conducted and as proposed to be conducted. The Documents have been duly authorized, executed and delivered by the Borrower and are valid and binding instruments of the Borrower enforceable against the Borrower in accordance with their terms. 2 6. To the best of my knowledge, the Borrower is not in violation of any provision of its organizational documents, or any indenture, mortgage, deed of trust, indebtedness, agreement, judgment, decree, order, statute, rule or regulation to which it is a party or by which it or its properties are bound or affected. 7. The execution and delivery by the Borrower of the Documents; compliance with the provisions thereof by the Borrower; and the performance by the Borrower of its agreements, covenants, and obligations under the Documents, do not, in any material respect, constitute on the part of the Borrower a breach or violation of, or default under, its organizational documents, will not violate any law or regulation applicable to the Borrower, or result in the breach of, or constitute a default under, any indenture or loan, credit, or other agreement or instrument to which the Borrower is a party or by which it or its property is bound or affected. 8. To my knowledge, no consent, approval, or authorization of, or permit or license from, or registration with, or notice to any federal or state regulatory authority or any third party not already obtained is required in connection with the issuance and delivery of the Note or the execution, delivery, and performance by the Borrower of the Documents, or any document or instrument related thereto. 9. I know of no (a) pending or overtly threatened lawsuits or claims against the Borrower with respect to the issuance and delivery of the Notes or which would adversely affect the validity of or security for the Documents or the transactions contemplated thereby; or (b) material legal or governmental proceedings pending or overtly threatened by governmental authorities or overtly threatened by others to which the Borrower is or may become a party or of which any property of the Borrower is or may be subject, other than ordinary routine litigation and claims incident to the kind of business conducted by the Borrower which, if determined adversely to the Borrower, would not individually or in the aggregate have a material adverse effect on the financial position or results of operation of the Borrower; provided, however, this letter may not be construed to be a guarantee that any judgment or judgments rendered against the Borrower for a liability for which there is insurance coverage will not exceed the policy limits or might not fall outside the risks covered by such insurance. The foregoing opinions are subject to the qualifications that: A. The enforceability of the Documents may be limited by bankruptcy, insolvency, fraudulent conveyance, fraudulent transfer, reorganization, arrangement, moratorium or other laws relating to or generally affecting the rights of creditors or lenders and by general principles of equity (whether such enforcement is sought in an action at law or in equity). Any particular right or remedy provided by the Documents, including equitable remedies, may be unavailable or limited under equitable principles or due to requirements as to materiality, commercial reasonableness, conscionability, good faith or other similar requirements. My opinion concerning the enforceability of the Documents means that none of the Documents is invalid in its entirety because of a specific statutory prohibition or public policy. This opinion does not mean any particular remedy is available upon a default, or that every provision of the Documents will be upheld or enforced in any or each circumstance by a court. B. I call your attention to the fact that certain provisions of the Documents relating to waiver, release or limitation of liability, election of remedies, choice of law, consent to jurisdiction or venue, absoluteness of the Borrower's obligations, remedies available after default and indemnification may be ineffective or unenforceable, and: (i) The law of the State places severe restrictions upon the right of a mortgagee to gain possession of mortgaged property prior to foreclosure and expiration of the applicable rights of redemption. (ii) Any waiver of rights of redemption contained in the Documents is not enforceable. (iii) Minnesota Statutes, Section 580.30 provides certain rights to reinstate an accelerated debt prior to foreclosure of a mortgage. (iv) The law of the State provides rights of redemption following foreclosure. (v) Minnesota Statutes, Section 580.22 provides that in most cases, if a mortgage is foreclosed non -judicially, "the amount received from foreclosure sale ... is full satisfaction of the mortgage debt." This provision would make a deficiency judgment unavailable and limits a mortgagee's ability to obtain recourse with respect to other security and remedies following non -judicial mortgage foreclosure. (vi) Under the State foreclosure statutes, separate parcels must be sold separately. (vii) I express no opinion whether any restraints on alienation in the Documents are enforceable as covenants. C. In rendering the opinions set forth above, I have assumed without independent investigation that: (1) all signatures (other than the signature of the Borrower) on all documents submitted to us are genuine; (ii) all documents submitted to us as originals are authentic; (iii) all documents submitted to us as certified or photostatic copies conform to the original documents, which themselves are authentic; and (iv) all of the documents executed in connection with the issuance of the Notes have been duly and validly authorized, executed, and delivered by all parties thereto (other than the Borrower) and are valid, binding, and enforceable in accordance with their terms. I have also assumed the legal capacity for all purposes relevant hereto of all natural persons and, with respect to all parties to agreements or instruments relevant hereto other than the Borrower, that such parties had the requisite power and authority (corporate or otherwise) to execute, deliver, and perform such agreements or instruments, that such agreements or instruments have been duly authorized by all requisite action (corporate or otherwise), executed and delivered by such parties and that such agreements or instruments are the valid, binding, and enforceable obligations of such parties. As to questions of fact material to my opinions, I have relied upon the representations made by the Borrower in the Documents, and upon certificates of officers of the Borrower, the Issuer, and the Lender (including, without limitation, those certificates delivered to others on the date of issuance of the Notes). D. In basing the opinions and other matters set forth herein on "my knowledge," the words "my knowledge" signify that, in the course of my representation of the Borrower in matters with respect to which I have been engaged by the Borrower as counsel, no information has come to my attention that has given me actual knowledge or actual notice that any such opinions or other matters are not accurate or that any of the foregoing documents, certificates, records and information on which I have relied are not accurate and complete. I have undertaken no independent investigation or verification of such matters. E. The opinions given herein are as of the date hereof. I assume no obligation to update or supplement my opinion to reflect any facts or circumstances that may hereafter come to my attention. The opinions expressed in this letter are solely for your use in connection with the transactions contemplated by the Documents and, except for any successors or assigns to or of your interest in the Documents, may not be relied upon by any other person without my prior written approval. The opinions expressed in this letter are limited to matters set forth in this letter and no other opinion should be inferred beyond the matters expressly stated. F. The opinions expressed herein are limited to matters of law of the State and the federal laws of the United States of America without giving effect of law provisions thereof and are further limited to the matters set forth herein. I express no opinions with respect to the laws of any other jurisdiction. I hereby consent to the reference to my law firm and this opinion in the opinion of Bond Counsel, of even date herewith. Very truly yours, LAW OFFICES OF MARY K. MARTIN — 1 Mary I . arti DISTRIBUTION LIST CITY OF NEW HOPE, MINNESOTA HEALTH CARE FACILITIES REVENUE NOTE, SERIES 2004 (PEOPLE INCORPORATED PROJECT) Telephone Party Contact/Address Number Fax Number E-mail Address Issuer Kirk McDonald (763) 531-5119 (763) 531-5136 kmcdonaldOM.new- Community Development bone.mn.us Director Valerie Leone (763) 531-5117 vleone(d)ci.new-holle.Mu.nS City Clerk City of New Hope 4401 Xylon Avenue North New Hope, MN 55428 Issuer's Jerry Gilligan (612) 340-2962 (612)340-2643 gilligan.ierome(ctidorsev.com Counsel Dorsey & Whitney LLP 50 South Sixth Sheet, Suite 1500 Minneapolis, MN 55402 Borrower Tim Burkett (651) 774-0011 (651) 774-0606 Executive Director Lori Anderson lori.anderson(rdpeooleincomor ated.ora People Incorporated 317 York Avenue St. Paul, MN 55101 Borrower's Mary K. Martin (651) 451-0550 (651) 451-8470 nvninlaw(d).aol.com Counsel Attorney at Law cell: 2411 Francis Street (612) 245-7309 St. Paul, MN 55075 Bond Counsel Mary Frances Skala (218) 725-6807 (218) 625-9207 mfskala(d)fryberger.com Fryberger, Buchanan, Smith & Frederick, P.A. 302 West Superior Street, Suite 700 Duluth, MN 55802 Carol M. Walczak, Paralegal (218) 725-6814 (218) 725-6800 cwalczak(d!fryberger.com Fryberger, Buchanan, Smith & Frederick, P.A. 302 West Superior Street, Suite 700 Duluth, MN 55802 Transaction Steve Fenlon (651) 455-8300 (651) 455-8484 nihealthcap(itlaol.com Manager Midwest Healthcare Capital 665 Woodridge Drive; Suite 100 Mendota Heights, MN 55118 dJ: Idoo1115761OM000IDLIIGI]i 29.6'PD Telephone Part), Contact/Address Number Fax Number E-mail Address Lender Steve Johnson (651) 523-7867 (651) 523-7885 steve(6),park-bank.com Vice President St. Anthony Park Bank cel: 2265 Como Avenue (651) 503 1785 St. Paul, MN 55108-1797 Lender's Patrick J. McGuigan (651) 646-6325 (651) 646-8584 Pat(@,MCGui�-,anHolly.COm Counsel McGuigan & Holly, P.L.C. 176 Snelling Avenue North St. Paul, MN 55104-6322 Title Larry Mountain (651) 697-6116 (651) 638-1994 lmountain(c�landtitleinc.com Company: Land Title, Inc. 1900 Silver Lake Road Suite 200 New Brighton, MN 55112 Host Greg Andrews (763) 424-8000 uega(&,ci.brooklyn- Municipality - Director of Finance park.rnn.us City of City of Brooklyn Park Brooklyn Park 5200 - 85th Avenue North Brooklyn Park, MN 55443 Host Suzanne Warren (651) 7320-2714 suzYCa).ci.oakdale.nm.us Municipality- Finance Director City of City of Oakdale Oakdale 1584 Hadley Avenue North Oakdale, MN 55128 Host Steve Devich (612) 861-9702 (612) 861-9749 sdevich(b),ci.richfield.mn.us Municipality - Assistant City Manager and City of Director of Administration Richfield City of Richfield 6700 Portland Avenue South Richfield, MN 55423 Attorney for Benjamin W. Johnson (612) 337-9300 (612) 337-9310 biohnson(a)kennedv- City of Kennedy & Graven, Chartered g_raven.com Richfield 470 Pillsbury Center 200 South Sixth Street Minneapolis, Minnesota 55402 Host Patty Lilledahl (651) 266-6582 patty. IiIledahl(t0ci.stpaul.nm.0 s Municipality - Department of Planning and St. Paul HRA Economic Development City of St. Paul 1400 City Hall Annex 25 West Fourth Street St. Paul, MN 55102 dJ: Idoo1115761OM000IDLIIGI]i 29.6'PD