7A Request from Presbyterian Homes for Conduit Financing

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PLEDGE AGREEMENT This Pledge Agreement is made as a� the Septernber _, 2008 between the CITY OF AKi7EN HILLS, MINNESOTA, a rnunicipal co�poration organized under th� laws oi the State of Minnesota (the "Czty") and LTNNERSITY BANK, a Minnesota banking coxporation (ihe "Lender"). Reciials WHEREAS, Presbyt�rian Hornes Management and Services, Inc. (the "Borrower"} and ti3e City have entered into a Loan Agreement (the "Loan Agreement") of even date herewith, pursuant to which tha City will Iend to the Borrower the proceeds of the $5,500,000 Commercial Facilities Revenue Nate, Series 200$ {PHM&S Office Building Project) (the "Note"); and WHEREAS, the Note is to 3�e payable from and secured by the loan repayrrients to be made by the Borrower under the Loan Agreement; and the Lender, as a condition to the purchase of the Nate, has required the execuiion of this Pledge Agreement. NOW THEREFQRE, as an inducement to ihe Lender to purchase the Note, and in consideration oi the pro�zises and other good and valuable consideration, the receipt and sufficiency whereof is hereby acknowledged, the parties hereby agree as follows: 1. In arder to secwre the due and punctual �ayment of the Note and all other sums due the Lender under the Loan Agreement, the Ciiy does hereby pledge and assign to the Lender a11 o�the City's right, title and interest in and to the Loan Agreerz�ent, subject io the City's rights under the provisions of Section 7.9 thereof. 2. The Ciiy hereby represents and vvarrants to the Lender that the City's right, title and interest in the Loan Agreement is free and clear af any lien, security interest pr other encurnbrance other than that arising under this Piedge Agxeement. 3. The City hereby authorizes ihe Lender to exercise, whether or not a default exists under the Note ar an Event af Default has accurred under the Loan Agreement, either in the City's name or ihe Lender's name, any and all righ#s or rerr�edies available to the City under the Loan Agreement. The City agrees, an request of the Lender, to execute and deliver to the Lender such other docurnents or insir�ments as shall be deemed necessary or appropriate by the Lender at any time to confirm or perfect the security interest hereby granted. The City hereby appoin#s the Lender its attorney-in-fact to execute on behalf of the City, and in its name, any and all suck� assignments, financing statements or other docurnents or insh uznents which the Lender may deem necessary or appropriate to perfect, protect or enforce the security interest hereby granted. 4. The City will not: {a} exercise or attempt to exercise any remedies under the Loan Agreement except as permitted by Sections 6.2 a�d 7.9 of the Loan Agreernent, or terminate, modify ar accept a surrender of the same, or by aff rma�ive act, consent to the creation or existence oi any zzoas3s�1 _ _ _ _