HomeMy WebLinkAboutEDA AGN 08-27-07 Special
CITY OF COLUMBIA HEIGHTS
590 40th Avenue N.E.. Columbia Heigbts, MN 55421.38n (763) 706.3600 TDD (763) 706.3692
Visit Our Website at: wIVIV.ci.columbia-heighls.f1ln.lls
EDA COMMISSIONERS
Gary L. Peterson
PalriciaJindra
Bruce Kclzcnbcrg
Marlaine Sznrek
Bruce Nawrocki
Bobby Willimns
Tammcra Diehm
ECONOMIC DEVELOPMENT AUTHORITY
SPECIAL MEETING
6:30 P.M., MONDAY, AUGUST 27, 2007
CITY HALL, CONFERENCE ROOM 1
AGENDA
1, CALL TO ORDER/ROLL CALL
2. PLEDGE OF ALLEGIANCE
3. DISCUSSION ITEM
4. Adopt Resolution 2007-20, Awarding the Sale of Public Facility Lease
Revenue Bonds Series 2007B
Motion: Move to Adopt Resolution 2007-20, a Resolution Awarding the Sale of
$ in Public Facility Lease Revenue Bonds, Series 2007B (Municipal
Liquor Stores Project), and its related documents; and furthermore, to authorize
the President and Executive Director to enter into an agreement for the same.
5. ADJOURNMENT
Walter R. Fehst, Executive Director
The EDA does not discriminate on the basis of disability in the admission or access to, or treatment or employment in, its
accommodation will be provided to allow individuals with disabilities to participate in all EDA services, programs, and
activities. Auxiliary aids for handicapped persolls are available upon request when the request is made at least 96 hours in
advance. Please call the Deputy City Clerk at (763) 706.3611 to make arrangemeuts (TOO 706.3692) for deaf or hearing
impaired only,
H:\EDAAgenda2007IAugust 27,2007 Special Mlg posting
THE CITY OF COL.UMBIA HEIGHTS DOES NOT DISCRIMINATE ON THE BASIS OF DISABILITY IN EMPLOYMENT OR THF PROVISION OF SERVICES
EQUAL OPPORTUNITY EMPLOYER
AGENDA SECTION: Business Items ORIGINATING DEPT: CITY MANAGER
NO: 4 FINANCE APPROVAL
ITEM: Adopt Resolution 2007-20, Awarding the BY: WILLIAM ELRITE BY:
Sale of $ in Public Facility Lease DATE: 08/23/2007
Revenue Bonds, Series 2007B (MUNICIPAL
LIQUOR STORES PROJECT), and its Related
Documents
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
MEETING OF: AUGUST 27, 2007
BACKGROUND:
On July 24, 2007 the EDA adopted Rcsolution 2007-15 providing for the sale of $5,040,000
Public Facility Lease Revenue Bonds. This is the next step in the bond process. The attached
resolution awards the sale of the bonds and authorizes the other three documents that are
required to finalize this transaction. The three other documents are the Ground Lease Agreement
between the City and the EDA, the Lease-Purchase Agreement between the EDA and the City
and the Mortgage and Security Agreement and Trust Indenture between the EDA and U.S. Bank.
The Ground Lease agreement leases the land the stores are being built on, which is owned by the
City of Columbia Heights, to the EDA. The Lease-Purchase Agreement then leases the buildings
back to the City of Columbia Heights for an annual payment from the City to the EDA that is
adequate to cover the EDA's obligations under the bond documents and will enable the EDA to
make the annual principal and interest payment on the bonds. The Mortgage and Security
Agreement and Trust Indenture between the EDA and U.S. Bank is basically the legal agreement
under which U.S. Bank will act as the EDA's agent and hold the bond proceeds that will cover
the construction of the buildings. When construction is completed U.S. Bank will act as the
trustee and the paying agent for the bonds.
At the special EDA meeting at 6:30 p.m. on August 27, representatives will be available from
Ehlers & Associates, the City's financial advisor, and from Kennedy & Graven, the bond
attorneys, to explain these documents in more detail and answer any questions that EDA
members may have regarding the above. If you would like any additional information prior to
the meeting, please let me know.
RECOMMENDATION: Staff recommends Adoption of Resolution 2007-20, awarding the sale
of $ in Public Facility Lease Revenue Bonds, Series 2007B(Municipal Liquor Stores
Project) and its related documents.
RECOMMENDED MOTION: Move to adopt Resolution 2007-20 being a resolution awarding
the sale of $ in Public Facility Lease Revenue Bonds, Series 2007B (Municipal
Liquor Stores Project) and its related documents; and furthermore, to authorize the President and
Executive Director to enter into an agreement for the same.
Attachments: E-mail from Andy Pratt of Kennedy & Graven
EDA Resolution 2007-20
Ground Lease Agreement
Lease-Purchase Agreement
Mortgage and Security Agreement and Trust Indenture
EDA COMMENTS:
$5,040,000
Columbia Heights Economic Development Authority
Public Facility Lease Revenue Bonds (Municipal Liquor Stores Project)
Series 2007B
Good afternoon:
Attached are the following documents:
1. Ground Lease between the City and the EDA;
2. Lease-Purchase Agreement between the EDA and the City;
3. Mortgage and Security Agreement and Trust Indenture between the EDA and U.S. Bank;
4. EDA Bond Sale Resolution (this also approves the documents the EDA is a party to); and
5. City Resolution (approving documents the City is a party to).
Bill, if you could check on the accuracy of the legal descriptions on Exhibit A to the Lease, that would be
great. The vast majority of the blanks In these documents will be known after the sale. Thanks.
Andy
Andrew Pratt
Kennedy & Graven, Chartered
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
Direct Phone: 612.337.9212
General Phone: 612.337.9300
Fax: 612-337-9310
Email: apratt@kennedy-graven.com
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
RESOLUTION NO. 2007-20
A RESOLUTION AWARDING THE SALE OF $5,040,000
l'UBLIC FACILITY LEASE REVENUE BONDS, SERIES 2007B
(MUNICIPAL LIQUOR STROES PROJECT)
BE IT RESOLVED By the Columbia Heights Economic Development Authority (the
"Authority"), as follows:
Section I.
Recitals.
1.01. The City of Columbia Heights, Minnesota (the "City") is authorized by Minnesota
Statutes, Section 465.71, as amended, to acquire real and personal property wlder lease-purchase
agreements.
1.02. The Authority has agreed with the City that pursuant to a Ground Lease dated as of
September I, 2007 (the "GrOlmd Lease"), thc Authority will acquire certain property (the "Sites")
from the City, and the Authority will lease such propeliy, together with the buildings, structures or
improvements now or hereafter located thereon (the "Facilities"), to the City pursuant to a Lease-
Purchase Agreement dated as of September 1,2007 (the "Leasc").
1.03. Pursuant to a Mortgage and Security Agreement and Trust Indenture dated as of
September I, 2007 (the "Indenture"), between the Authority and U.S. Bank National Association,
St. Paul, Minnesota as trustee (the "Trustee"), the Authority will issue its Public Facility Lease
Revenue Bonds, Series 200713 (Municipal Liquor Stores Project) (the "Series 200713 Bonds") in an
aggregate principal amoWlt of $5,040,000.
1.04. Under the Indenture, proceeds of the Series 200713 Bonds will be used to establish a
Debt Service Reserve Fund to secure the Series 200713 Bonds and to pay costs of acquisition,
construction and equipping of the Facilities described in the Lease.
1.05. Pursuant to the Indenture, the Authority will assign and mortgage to the Trustee all
of the Authority's right, title and interest in and to the Sites, the Facilities, the Ground Lease, the
Lease, the Lease Payments and the Additional Lease Payments (as defined in the Lease) to be made
by the City thereunder (other than certain rights to indemnification and payment of expenses) as
security for the Series 200713 Bonds.
1.06. Forms of the Ground Lease, the Lease, the Indenture, the Official Statement for the
Series 200713 Bonds and a Continuing Disclosure Celiificate of the City dated as of September I,
2007, have been prepared and submitted to the Authority and are on file with the Authority.
Section 2.
Sale of Series 200713 Bonds.
2.01. The proposal of Stifel, Nicolaus & Co., Inc., Minneapolis, Minnesota (the
"Purchaser") to purchase the Series 200713 Bonds is hereby found and determined to be a
reasonable offer and is hereby accepted, the proposal being to purchase the Series 200713 Bonds at a
316611v2 AlP CLl62-37
S-I
price of $4,974,569.50 plus accrued interest to date of delivery, for Series 2007B Bonds bearing
interest as follows:
Year of
Maturity
Interest
Rate
2010
2011
2012
2013
2014
2015
2016
2017
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
4.50%
Term Bonds due Februaty 1, 2020 at 4.65%.
Term Bonds due Februaty 1,2023 at 4.80%.
Term Bonds due Februmy 1,2027 at 4.90%.
Term Bonds due Februaty 1,2030 at 5.00%.
True interest cost: 4.9589%
2.02. The Executive Director is directed to retain the good faith check of the Purchaser,
pending completion of the sale of the Scries 2007B Bonds, atld to deliver the good faith check to the
Trustee upon the issuatlCe of the Series 2007B Bonds. The Authority shall return the good faith
checks of the unsuccessful proposers forthwith. The sum of $22,816.85 being the atllount offered
by the Purchaser in excess of $5,040,000 will be credited to a separate construction account to
defray the costs of the Project, as that term is defined in the Indenture, as determined by the
City's financial advisor.
2.03. The Authority will forthwith issue atld sell the Series 2007B Bonds in the total
principal atll0unt of $5,040,000, originally dated as of the date of delivelY, in the denomination of
$5,000 each or any integral multiple thereof, numbered No. R-I, upward, bearing interest as above
set forth, atld which mature serially on February I, in the years atld amounts as follows (subject to
redemption atld prior payment as set forth in the Indenture):
Year Amount
2010 $140,000
2011 150,000
2012 155,000
2013 165,000
2014 170,000
2015 180,000
2016 185,000
2017 195,000
Term Bonds due Februaty I, 2020 in the aggregate principal atnount of $650,000.
Term Bonds due Februaty 1, 2023 in the aggregate principal atl101l11t of $755,000.
316611v2AJPCLl62-37 S-2
Term Bonds due Februaty 1,2027 in the aggregate principal amount of$1,21O,000.
Term Bonds due Februmy 1,2030 in the aggregate principal amount of$1,085,000.
2.04. Execution, Authentication and Delivery. The Series 2007B Bonds, substantially in
the form provided in the Indenture, will be prepared under the direction ofthe Authority's staff and
executed on behalf ofthe Authority by the signatures of the President and the Executive Director of
the Authority, provided that all signatures may be printed, engraved or lithographed facsimiles of
the originals. Notwithstanding such execution, a Series 2007B Bond will not be valid or obligatory
for atlY purpose or entitled to any security or benefit under this Resolution or the Indenture unless
atld until a certificate of authentication on the Series 2007B Bond has been duly executed by the
manual signature of an authorized representative of the TlUstee. When the Series 2007B Bonds
have been so prepmed, executed and authenticated, the Authority will deliver the satne to The
Depository Trust Company, New York, New York, on behalf of the Purchaser, upon payment of the
purchase price, and the Purchaser is not obligated to see to the application of the purchase price.
Section 3. Approval and Execution of Documents. The Ground Lease, the Lease and
the Indenture described in Section 1 are hereby approved. The President atld the Executive Director
of the Authority are authorized and directed to execute and deliver the Ground Lease, the Lease and
the Indenture on behalf ofthe Authority, substantially in the forms on file, but with all such changes
therein as shall be approved by the officers executing the satne, which approval shall be
conclusively evidenced by the execution thereof. Copies of all of the transaction documents shall
be delivered, filed and recorded as provided therein. The President and other officers of the
Authority at'e also authorized and directed to execute such other instruments as may be required to
give effect to the tratlsactions herein contemplated.
Section 4. Pavmcnt; Security: Pledges and Covenants. The Series 2007B Bonds are
payable solely fi'Oln the Lease Payments to be made by the City under the Lease and from other
money realized by the Trustee after default or tennination of the Lease by the City as provided
therein. No property or funds of the Authority, other than the property pledged and mortgaged to
the Trustee pursuant to the Indenture, is pledged to the payment of the Series 2007B Bonds.
Section 5.
Authentication of Transcript.
5.01. The officers of the Authority are authorized atld directed to prepme and furnish to
the Purchaser and to the attorneys approving the Series 2007B Bonds, certified copies of
proceedings and records of the Authority relating to the Series 2007B Bonds and such other
certificates, affidavits and transcripts as may be required to show the facts within their knowledge or
as shown by the books atld records in their custody and under their control, relating to the validity
atld marketability of the Series 2007B Bonds and such instlUments, including any heretofore
fumished, may be deemed representations of the Authority as to the facts stated therein.
5.02. The preparation and distribution of the Official Statement prepmed and circulated in
connection with the issuance and sale of the Series 2007B Bonds is hereby approved.
5.03 The Authority authorizes the Purchaser to fOlwmd the atnount of bond proceeds
allocable to the payment of issuance expenses (other than atnounts payable to Kemledy & Graven,
316611v2 AlP CL162-37
S-3
Chrniered as Bond Counsel) to the Trustee on the closing date for further distribution as directed by
the Authority's financial adviser, Ehlers & Associates, Inc.
Section 6.
Tax Covenants.
6.01. The Authority covenants and agrees with the holders fi'om time to time of the Series
2007B Bonds that it will not take or pennit to be taken by any of its officers, employees or agents
any action which would cause the interest on the Series 2007B Bonds to become subject to taxation
under the Internal Revenue Code of 1986, as amended (the "Code"), and the Treasury Regulations
promulgated thereunder, in effect at the time of such actions, and that it will take or cause its
officers, employees or agents to take, all affilmative action within its power that may be necessary
to ensure that such interest will not become subject to taxation under the Code and applicable
Treasury Regulations, as presently existing or as hereafter amended and made applicable to the
Series 2007B Bonds.
6.02 In order to qualify the Series 2007B Bonds as "qualified tax-exempt obligations"
within the meaning of Section 265(b )(3) of the Code, the Authority makes the following factual
statements and representations:
(a) the Series 2007B Bonds are not "private activity bonds" as defined in Section 141
of the Code;
(b) the Authority hereby designates the Series 2007B Bonds as "qualified tax-exempt
obligations" for purposes ofScction 265(b)(3) of the Code;
(c) the reasonably anticipated amount of tax-exempt obligations (other than private
activity bonds that are not qualified 501(c)(3) bonds) which will be issued by the
Authority (and all subordinate entities of the Authority) during calendar year 2007
will not exceed $10,000,000; and
(d) not more than $10,000,000 of obligations issued by the Authority during calendar
year 2007 have been designated for purposes of Section 265(b)(3) of the Code.
6.03. The Authority will use its best effOlis to comply with any federal procedural
requirements which may apply in order to effectuate the designations made by this section.
Approved by the Born'd of Commissioners of the Columbia Heights Economic Development
Authority this 27th day of August, 2007.
President-Gary 1. Peterson
ATTEST:
Executive Director-Walter R. Fehst
STATE OF MINNESOTA )
)
COUNTY OF ANOKA ) SS.
)
COLUMBIA HEIGHTS ECONOMIC )
DEVELOPMENT AUTHORITY )
I, the undersigned, being the duly qualified and acting Executive Director of the Columbia
Heights Economic Development Authority, do hereby certifY that I have carefully compared the
attached and foregoing extract of minutes ofa regular meeting of the Authority held on August 27,
2007 with the original minutes on file in my office and the extract is a full, true and COlTect copy of
the minutes insofar as they relate to the issuance and sale of $
Public Facility
Lease Revenue Bonds, Series 2007B (Municipal Liquor Stores Project) of the Authority.
WITNESS My hand officially as such Executive Director this
day of
2007.
COLUMBIA HEIGHTS ECONOMIC
DEVELOPMENT AUTHORITY
Executive Director-Walter R. Fehst
$
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
PUBLIC FACILITY LEASE REVENUE BONDS, SERIES 2007B
(MUNICIPAL LIQUOR STORES PROJECT)
MORTGAGE AND SECURITY AGREEMENT AND TRUST INDENTURE
Dated as of September 1, 2007
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
to
U.S. BANK NATIONAL ASSOCIATION
as Trustee
This instrument was drafted by
Kennedy & Graven, Chmtered (AlP)
470 U.S. Bank Plaza
200 South Sixth Street
Minneapolis, MN 55402
TABLE OF CONTENTS
Page
PARTIES, RECITALS AND GRANTING CLAUSES
Parties......................................................................................................................... ............................ 1
Recitals...................................................................................................................... ............................. 1
Granting Clauses ... ...................... .............. ........ ... .............. .... ... ....... ............... ............ ..... ..... ............ .....2
ARTICLE I
Definitions and Interpretation
Section 1.01. Definitions............... ................................ ........ ............................... .................... ........... 5
Section 1.02. Characteristics ofCeltificate or Opinion......................................................................9
Section 1.03. Additional Provisions as to Interpretation.................................................................. 10
ARTICLE II
Form, Execution and Registration of Bonds
Section 2.01. Form, Maturities and Numeration of Series 2007B Bonds........................................11
Section 2.02. Execution of Bonds............................................................................ .........................12
Section 2.03. Authentication of Bonds ................ ........................... ............. ......................... ............12
Section 2.04. Registration, Transfers and Exchange ........................................................................12
Section 2.05. Payment ofInterest on Bonds; Interest Rights Preselved..........................................13
Section 2.06. Ownership of Bonds ...................................................................................................14
Section 2.07. Reissuance of Mutilated, Destroyed, Stolen or Lost Bonds....................................... 14
Section 2.08. Conditions for Authentication of Series 2007B Bonds.............................................. 15
Section 2.09. Additional Bonds; Generally ......................................................................................16
Section 2.10. Additional Bonds to Pay the Cost ofImprovements..................................................16
Section 2.11. Additional Bonds for Refunding Purposes................................................................. 16
Section 2.12. Delivery of Additional Bonds..................................................................................... 16
Section 2.13. Book-Entry Only System............................................................................................17
ARTICLE III
Redemption of Bonds
Section 3.01. Redemption of Series 2007B Bonds ..........................................................................19
Section 3.02. Written Notice to Trustee ...........................................................................................19
Section 3.03. Mailing and Publication of Notice.............................................................................. 19
Section 3.04. Deposit for Redemption..............................................................................................19
Section 3.05. Payment of Redeemed Bonds.....................................................................................20
Section 3.06. Cancellation of Redeemed Bonds ..............................................................................20
Section 3.07. Pattial Redemption of Bonds........................................................................... ...........20
ARTICLE IV
Bond Proceeds; Project Fund
Section 4.01.
Section 4.02.
Section 4.03.
Section 4.04.
Section 4.05.
Section 4.06
Deposit of Series 2007B Bond Proceeds....................................................................22
Establishment of Proj ect Fund.................................................................................... 22
Project Costs Defined ................ ...................... ...... ........ ..................... ............. ......... ..22
Payments l1'om Project Fund ......................................................................................23
Application of Balance in Project Fund .....................................................................24
Investment of Project Fund........... ...................................... ................... .................. ...24
ARTICLE V
Disposition of Pledged Revenues
Section 5.0 I. Bond Fund......... ................ ..................... ................ ....... ...................... ............. ......... ..27
Section 5.02. Reserve Fund ..............................................................................................................27
Section 5.03. Investment of Funds......... .......... ...................... ................. ..................... .................. ...28
Section 5.04. Compliance with Arbitrage Restrictions; Rebate Requirements ...............................29
ARTICLE VI
Particular Covenants of the Authority
Section 6.0 I. Payment of Bonds ......... .................... ............................ ...................... ............ ............ 30
Section 6.02. Extensions of Payments of Bonds and Interest ..........................................................30
Section 6.03. Authority of the Authority ..........................................................................................30
Section 6.04. Concerning the Lease .................................................................................................31
Section 6.05. To Observe All Covenants and TelliS; Limitations on Authority's Obligations ......31
Section 6.06. Liens; Further Assurances ..........................................................................................31
ARTICLE VII
Remedies on Default
Section 7.01. Events of Default ........................................................................................................32
Section 7.02. Acceleration of Maturity.. .......... ..................... .................... ... ...................... ............... 32
Section 7.03. Enforcement of Covenants and Conditions................................................................ 32
Section 7.04. Appointment of Receivers ..........................................................................................33
Section 7.05. Application of Money......... ............. .......................... ......................... ............. ...........33
Section 7.06. Right of Trustee to Act Without Possession of Bonds............................................... 35
Section 7.07. Power of Majority of Owners................................................................................ .....35
Section 7.08. Limitation on Suits by Owners................................................................................... 35
Section 7.09. Waiver by Owners ......................................................................................................36
Section 7.10. Remedies Cumulative, Delay Not to Constitute Waiver ...........................................36
Section 7.11. Restoration of Rights Upon Discontinuance ofProceedings.....................................36
Section 7.12. Rights of the Insurer ...................................................................................................36
ii
ARTICLE VIII
Concerning the Trustee
Section 8.01. Acceptance of Trust and Prudent Performance Thereof............................................37
Section 8.02. Trustee May Rely Upon Certain Documents and Opinions ......................................38
Section 8.03. Trustee Not Responsible for Indenture Statements, Validity.....................................39
Section 8.04. Limits on Duties and Liabilities ofTlUstee................................................................39
Section 8.05. Money Held in Trust...................................................................................................39
Section 8.06. Obligation of TlUstee.... .......................... ........... ................. ......................... ...... ......... 39
Section 8.07. Notice to Owners, Etc.................................................................................................39
Section 8.08. Intervention in Judicial Proceedings...........................................................................40
Section 8.09. Fmther Investigation by TlUstee.................................................................................40
Section 8.10. TlUstee to Retain Records...........................................................................................40
Section 8.11. Compensation of TlUstee............................................................................................40
Section 8.12. TlUstee May Hold Bonds............................................................................................41
Section 8.13. Appointment of Trustee ...................... ............... ................. ............... ....................... ..41
Section 8.14. Merger of Trustee .......................................................................................................41
Section 8.15. Resignation or Removal of TlUstee............................................................................4 I
Section 8.16. Appointment of Successor Trustee.............................................................................42
Section 8.17. Transfer of Rights and Propelty to Successor Tlustee...............................................42
Section 8.18. Appointment of Successor or Alternate Paying Agents.............................................42
ARTICLE IX
Conceming the Owners
Section 9.01. Execution ofInstruments by Owners .........................................................................44
Section 9.02. Waiver of Notice................ .... .... ........ ........... ............................... .................. ..... ........44
Section 9.03. Determination of Owner ConCUTI'ence .......................................................................44
Section 9.04. Owners' Meeting ........................................................................................................45
Section 9.05. Revocation by Owners................................................................................................46
ARTICLE X
Payment, Defeasance and Release
Section 10.01. Payment and Discharge ofIndenture .........................................................................48
Section 10.02. Bonds Deemed not Outstanding After Deposit..........................................................49
Section 10.03. Unclaimed Money to be Retumed..............................................................................49
Section 10.04 Payment by Insurer .....................................................................................................50
ARTICLE XI
Supplemental Indentures
Section 11.01. Purposes for Which Supplemental Indentures may be Executed ..............................51
Section 11.02. Execution of Supplemental Indenture ........................................................................52
Section 11.03. Discretion of TlUstee ..................................................................................................52
Section 11.04. Modification ofIndenture with Consent of Owners ..................................................52
iii
Section 11.05. Supplemental Indentures to be Pmt ofIndenture .......................................................53
Section 11.06. Rights of City Unaffected...........................................................................................53
Section 11.07. Insurer's Consent ........................... ........... ......... ......................... ........... ........... .......... 53
ARTICLE XII
Amendments to the Lease and
the Ground Lease
Section 12.01. Amendments to the Lease, the Ground Lease Not
Requiring Consent of Owners .......... ...... ............ ... ...... ................................ ............... 54
Section 12.02. Amendments to the Lease and the Ground Lease Requiring
Consent of Owners........ ........... ................................. ................... ......................... ..... 54
Section 12.03. Rights of Authority .....................................................................................................54
Section 12.04. Insurer's Consent .................................. .... ...... ... ......................... ...... ..... ... .................. 54
ARTICLE XIII
Miscellaneous
Section 13.01. Covenants of Authority Bind Successors and Assigns ..............................................55
Section 13.02. Immunity of Officers ...................... ......... .......... ....................................... .................. 55
Section 13.03. No Benefits to Outside Pmties....................................................................................55
Section 13.04. Separability ofIndenture Provisions ..........................................................................55
Section 13.05. Execution of Indenture in Counterparts .....................................................................55
Section 13.06. Headings Not Controlling........ .......................................... ........... .................... ....... ... 55
Section 13.07. Notices, etc. to TlUstee, Authority, City and Original Purchaser and Issuer .............55
SIGNATURES
iv
MORTGAGE AND SECURITY AGREEMENT
AND
TRUST INDENTURE
This MORTAGE AND SECURITY AGREEMENT AND TRUST INDENTURE, dated as
of the 1st day of September, 2007 (this "Indenture"), by and between the COLUMBIA HEIGHTS
ECONOMIC DEVELOPMENT AUTHORITY, a public body corporate and politic and political
subdivision of the State of Minnesota (the "Authority"), and U.S. Bank National Association, a
national banking association with bust powers having its main cOlporate bust office and place of
business in St. Paul, Minnesota (the "Trustee");
WITNESSETH:
WHEREAS, the Authority is a duly organized and existing political subdivision under the
laws of the State of Minnesota (the "State"), and the Authority has authority to enter into and
perform its obligations under this Indenture pursuant to Minnesota Statutes, Sections 469.090 to
469.1082, as amended (the "Act"); and
WHEREAS, pursuant to a Ground Lease dated as of September I, 2007 (the "Ground
Lease"), the Authority has leased certain land (the "Sites") in the City of Columbia Heights,
Minnesota (the "City") fi'om the City; and
WHEREAS, the Authority has agreed to enter into a Lease-Purchase Agreement, dated as of
September I, 2007 (the "Lease"), whereby the Authority will lease to the City, with option to
purchase by the City, the Sites and facilities to be constructed thereon (the "Facilities"); and
WHEREAS, under the Act the Authority is authorized to issue and sell revenue bonds to
finance the construction ofthe Facilities and related costs and to assign cel1ain of its interests in the
Ground Lease and the Lease to the Trustee as security therefor; and
WHEREAS, pursuant to a resolution of the Board of Commissioners of the Authority
adopted on August 27, 2007 the Authority has duly authorized and directed the issuance of its
revenue bonds in the aggregate principal amount of $ to be designated "Public
Facility Lease Revenue Bonds, Series 2007B (Municipal Liquor Stores Project)" (the "Series 2007B
Bonds"), and the execution and delivery of the Ground Lease, the Lease and this Indenture; and
WHEREAS, under the Lease, the City is required, subject to its right to detennine not to
appropriate Lease Payments (as defined herein) and to terminate the Lease, to make Lease
Payments in amounts and at times sufficient to pay the principal of, premium (if any) and interest on
the Series 2007B Bonds and any Additional Bonds when due; and
WHEREAS, pursuant to this Indenture the Authority assigns and mOllgages to the Trustee
the Authority's right, title and interest in cel1ain property as fmlher described herein; and
1
WHEREAS, the
Indenture is $
maximum principal amount of debt secured by the mmtgage
, and matures no later than February 1,2030; and
in this
WHEREAS, the Series 2007B Bonds, and the form of assignment and the Trustee's
authentication certificate to be endorsed thereon, are to be in substantially the fmID attached hereto
as Exhibit B; and
WHEREAS, the execution and delivery of this Indenture have been duly authorized by the
Authority, and all conditions, acts and things necessary and required by the Constitution and Laws
of the State of Minnesota, or otherwise, to exist, to have happened or to have been performed
precedent to and in the execution and delivery of this Indenture, and in the issuance of the Series
2007B Bonds, do exist, have happened or have been performed in regular form, time and manner,
and the execution and delivelY of this Indenture have been in all respects duly authorized; and
WHEREAS, the Trustee has accepted the bust created by this Indenture and in evidence
thereof has joined in the execution hereof;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
GRANTING CLAUSES
That the Authority, in order to secure the payment of the principal of, premium (if any) and
interest on the Bonds issued under this Indenture according to their tenor and effect and the
pelformance and observance of each and all of the covenants and conditions herein and therein
contained, and for and in consideration of the premises and of the purchase and acceptance of the
Bonds by the respective purchaser or purchasers and registered Owners thereof, and for other good
and valuable consideration, the receipt whereof is hereby acknowledged, has executed and delivered
this Indenture and has granted, mmtgaged, bargained, sold, assigned, transferred, conveyed, pledged
and set over, and by these presents does hereby grant, mmtgage, bargain, sell, assign, transfer,
convey, pledge and set over, unto the Trustee, and to its successor or successors in the trust hereby
created and to its assigns forever:
1.
All right, title and interest of the Authority in the land described in Exhibit A hereto (the "Sites"),
together with but not limited to (i) all building materials, supplies, equipment, incinerator apparatus, air-
conditioning equipment, water and gas apparatus, pipes, faucets and all other fixtures of evelY description
which are now or may hereafter be placed or used on the Sites or in any building or improvement now or
hereafter located thereon, (ii) all additions, accessions, increase, parts, fittings, accessories, replacements,
substitutions, betterments, repairs and proceeds to and of any and all of the foregoing, (iii) all proceeds
from insurance and condemnation relating to the Sites, (iv) all hereditaments, easements repairs and
proceeds to and of any and all of the foregoing, and (v) all hereditaments, easements, appurtenances,
estates and other rights and interest now or hereafter belonging to or in any way peltaining to the Sites or
to any building or improvement now or hereafter located thereon.
2
II.
All items of fixtures, machinery, furnishings and other tangible personal propelty purchased with
proceeds of the Bonds and located or to be located on the Sites, and all accessions, increases, patts,
fittings, accessories, replacements, substitutions, betterments, repairs and proceeds to and of any thereof.
III.
All of the rights and interests of the Authority in and to the Ground Lease and the Lease,
except for the rights of the Authority relating to expenses, indemnity, payment of attorneys' fees
and advances under Sections 4.3, 7.5 and 7.6 of the Lease.
IV.
A first lien on and pledge of all right, title and interest in (i) the money and investments in
the Bond Fund and the Reserve Fund covenanted to be created and maintained under this Indenture,
(ii) any money and investments in the Project Fund not applied to payment of Project Costs, as
further provided herein, and (iii) Net Proceeds of any insurance or condemnation award held by the
Trustee pursuant to the terms of the Lease or this Indenture.
V.
Any and all other propelty of every name and nature from time to time hereafter by delivery
or by writing of any kind conveyed, mortgaged, assigned or transferred, or in which a security
interest is granted by the Authority or the City or by anyone in behalf of either of them or with their
written consent, to the Trustee, which is hereby authorized to receive any and all such property at
any and all times and to hold and apply the same according to the tenns hereof.
SUBJECT, however, to Permitted Encumbrances.
TO HAVE AND TO HOLD all and singular the said property hereby conveyed and
assigned, or agreed or intended so to be, to the Trustee, its successor or successors in trust and its
and their assigns, FOREVER.
IN TRUST NEVERTHELESS, upon the terms and trust herein set fOlth, for the equal and
propOltionate benefit, security and protection of all Owners of the Bonds issued or to be issued
WIder and secured by this Indenture, without preference, priority or distinction as to lien or
otherwise of any of the Bonds over any of the others;
PROVIDED, HOWEVER, that if the Authority, or its successors or assigns, shall well and
truly payor cause to be paid the principal of the Bonds and the premium (if any) and interest due or
to become due thereon, at the times and in the manner mentioned in the Bonds according to the true
intent and meaning thereof, or shall provide, as permitted hereby, for the payment thereof by
depositing with the Trustee sums sufficient to pay the entire amount due or to become due thereon,
and shall well and truly keep, perform and observe all the covenants and conditions pursuant to the
terms of tins Indenture to be kept, performed and observed by the Authority and shall pay to the
3
Trustee all sums of money due or to become due to it in accordance with the telms and provisions
hereof; then upon such final payment this Indenture and the rights hereby granted shall cease,
terminate and be void; othelwise, this Indenture to be and remain in full force and effect.
THIS INDENTURE FURTHER WITNESSETH, and it is expressly declared that all Bonds
issued and secured hereunder are to be issued, authenticated and delivered and all said property
hereby assigned or pledged is to be dealt with and disposed of under, upon and subject to the terms,
conditions, stipulations, covenants, agreements, trusts, uses and purposes as hereinafter expressed,
and the Authority agrees and covenants with the Trustee and with the respective Owners from time
to time ofthe said Bonds or any part thereof, as follows, that is to say:
(The remainder of this page is intentionally left blank.)
4
ARTICLE I
Definitions and Interpretation
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in this
Alticle I and in the recitals and succeeding Articles of this Indenture shall, for all purposes of this
Indenture and of any indenture supplemental hereto, have the meanings herein specified, such
definitions to be equally applicable to both the singular and plural forms of any of the terms defined:
"Act" means Minnesota Statutes, Sections 469.090 to 469.1082, as amended.
"Additional Bonds" means any Bonds issued pursuant to Sections 2.09 through 2.12 hereof.
"Additional Lease Payments" means payments due from the City pursuant to Section 4.3 of
the Lease.
"Authority" means the Columbia Heights Economic Development Authority, a public body
corporate and politic and political subdivision of the State, and its successors and assigns.
"Authorized Officer," (i) when used with respect to the City, means its Mayor, its City
Manager, its Finance Director, its Assistant Finance Director or any other person who is designated
in writing by the City as an Authorized Officer for purposes of this Indenture, and (ii) when used
with respect to the Authority, means its Executive Director, Assistant Treasurer, or any other person
who is designated in writing by the Authority as an Authorized Officer for purposes of this
Indenture.
"Bond Counsel" means any attorney or law firm having a national reputation as bond
counsel in counection with the issuance of state and local governmental obligations and appointed
by the Authority and acceptable to the Trustee.
"Bond Fund" means the Bond Fund established under Section 5.01 ofthis Indenture.
"Bond Resolution" means the resolution adopted by the Board of Commissioners of the
Authority on August 27, 2007 authorizing the issuance and sale of the Series 2007B Bonds, as the
same may be amended, modified or supplemented by any amendments or modifications thereof.
"Bonds" means the Series 2007B Bonds and any Additional Bonds.
"Business Day" means any day on which the Trustee is open for business.
"Celtificate" means a certification in writing required or pelmitted by the provisions either
of the Lease or this Indenture signed and delivered to the Trustee or other proper person or persons.
If and to the extent required by the provisions of Section 1.02 hereof, each Certificate shall include
the statements provided for in said Section 1.02.
5
"Certified Resolution" means a copy of a resolution of the Authority or the City, celiified by
the clerk, secretalY or other proper person to have been duly adopted and to be in full force and
effect on the date of such ceItification.
"City" means the City of Columbia Heights, Minnesota, a home mle chmier city and
political subdivision of the State, and any successor to its functions.
"Closing Date" means the date on which the Bonds of any series are delivered to the
Original Purchaser against payment therefor. The Closing Date for the Series 2007B Bonds is
September 19,2007.
"Completion Date" means the date of completion of the Project established in accordance
with Section 3.2(e) ofthe Lease.
"Construction Period" means (i) the period between the beginning of constmction of the
Facilities or (ii) the date on which the Series 2007B Bonds are first delivered to the Original
Purchaser, whichever is earlier, and the Completion Date with respect to the construction of the
Facilities, as defined in the Lease.
"Default" means default in the performance or observance of any of the covenants,
agreements or conditions contained in this Indenture, or in the Bonds Outstanding herennder,
exclusive of any notice or period of grace required for a default to constitute an "Event of Default"
as hereinafter provided.
"Event of Default" means an Event of Default described in Section 7.01 of this Indenture
which has not been cured.
"Facilities" means any buildings, stmctures and improvements to be constlUcted on the
Sites, and all furniture, fixtures and equipment to be acquired with proceeds of sale of the Bonds
and located thereon.
"Financial Newspaper" or "Finmlcial Journal" means any newspaper or journal devoted to
financial news circulated in the English language in Minneapolis or St. Paul, Minnesota.
"Gronnd Lease" means the Ground Lease, dated as of September 1, 2007, by which the City
leases the Sites to the Authority, as amended or supplemented from time to time.
"Improvements" means any addition, enlargement, improvement, extension or alteration of
or to the Facilities as they then exist, and also means any fixtures, stmctures or other facilities (other
than the Facilities) acquired or constructed by the City and located on the Sites.
"mdenture" means this Mortgage and Security Agreement and Trust Indenture, dated as of
September 1, 2007, between the Authority and the Tmstee, under which the Bonds are authorized to
be issued, and including any amendments or supplements hereto.
6
"Independent," when used with reference to an attorney, engineer, architect, celtified public
accountant, consultant or other professional person, means a person who (i) is in fact independent,
(ii) does not have any material financial interest in the City or the transaction to which such person's
Certificate or opinion relates (other than payment to be received for professional services rendered),
and (iii) is not connected with the Authority or the City as an officer, director or employee.
"Independent Counsel" means an Independent attorney duly admitted to practice law before the
highest court of any state.
"Independent Engineer" means an Independent engineer or engineering firm or an
Independent architect or architectural firm qualified to practice the profession of engineering or
architecture under the laws of Minnesota.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as anlended, and the
regulations promulgated thereunder.
["Insurer" means
, its successor and assigns.l
"Lease" means the Lease-Purchase Agreement, dated as of September 1,2007, between the
Authority, as lessor, and the City, as lessee, as amended or supplemented from time to time.
"Lease Payments" means each of the payments due from the City to the Authority on each
Lease Payment Date during the Term ofthe Lease, as shown on Exhibit B to the Lease.
"Net Proceeds," when used with respect to proceeds of insurance or a condemnation award,
means money received or receivable by the City, as owner or as lessee under the Lease, or the
Tmstee, as lessee under the Ground Lease or as secured party, of the Sites or the Facilities, less the
cost of recovery (including attorneys' fees) of such money from the insuring company or the
condemning authority.
"Opinion of Counsel" means a written opinion of counsel (who need not be Independent
Counsel unless so specified) appointed by the City or the Authority and acceptable to the Trustee or
appointed by the Trustee. If and to the extent required by the provisions of Section 1.02 hereof,
each Opinion of Counsel shall include the statements provided for in said Section 1.02.
"Original Purchaser" means, with respect to the Series 2007B Bonds,
, and with respect to any Additional Bonds, the Original Purchaser
identified in a Supplemental Indenture for the Additional Bonds.
"Outstanding" when used as of any particular time with reference to Bonds means (subject
to the provisions of Section 9.03 of this Indenture pertaining to Bonds owned by the Authority or
the City) all Bonds theretofore authenticated and delivered by the Trustee under this Indenture
except: (i) Bonds theretofore canceled by the Tmstee or surrendered to the Tmstee for cancellation;
(ii) Bonds for the payment or redemption of which funds or direct obligations of or obligations fully
guaranteed by the United States of America in the necessary amount shall have theretofore been
deposited with the Trustee (whether upon or prior to the maturity or the redemption date of such
Bonds), provided that if such Bonds are to be redeemed prior to the maturity thereof, notice of such
7
redemption shall have been given pursuant to Atticle III of this Indenture, or provision satisfactory
to the Trustee shall have been made for the giving of such notice; and (iii) Bonds in lieu of or in
substitution for which other Bonds shall have been authenticated and delivered by the Trustee
pursuant to the terms of Section 2.07 pertaining to replacement of Bonds.
"Owner" means the registered owner of any Outstanding Bond.
"Pennitted Encumbrances" means, as of any pmticular time: (i) liens for taxes and
assessments not then delinquent, or which the City may, pursuant to provisions of Section 6.3 of the
Lease, permit to remain unpaid, (ii) the Ground Lease, the Lease, and amendments thereto, (iii) the
Authority's and the Trustee's interest in the Facilities, (iv) any mechanic's, laborer's,
materialmen's, supplier's or vendor's lien or right not filed or pelfected in the manner prescribed by
law, (v) such minor defects, irregulm'ities, encumbrances, easements, rights-of-way and clouds on
title as nOlmally exist with respect to propelties similar in character to the Sites and which do not, in
the opinion ofIndependent Counsel, materially impair tite property affected thereby for the purpose
for which it was intended, and (vi) easements, restrictions or encumbrances, if any, shown on
Exhibit A to the Lease.
"Pelmitted Investments" means the investments authorized by Minnesota Statntes, Chapter
lI8A, as amended.
"Predecessor Bonds" of any pmticular Bond means every previous Bond evidencing all or a
portion of the smne debt as that evidenced by such particular Bond, and for purposes of titis
definition, any Bond authenticated and delivered under Section 2.07 hereof in lieu of a lost,
destroyed or stolen Bond shall be deemed to evidence the same debt as the lost, destroyed or stolen
Bond.
"Project" means the acquisition, construction and equipping of the Facilities as municipal
liquor stores and related facilities for use by the City on the Sites.
"Project Costs" means the costs defined in Section 4.03 of this Indentnre.
"Project Fund" means the Project Fund established under Section 4.02 hereof.
"Project Fund Draw Request" means the form of the draw request as presented on Exhibit C
hereof.
"Redeem" or "Redemption" means and includes "prepay" or "prepayment" as the case may
be.
"Regular Record Date" for the interest payable on any interest payment date on the Bonds of
any series means the date specified in the provisions of this Indentnre creating such series.
"Reserve Fund" means the Reserve Fund established under Section 5.02 hereof.
8
"Reserve Requirement" means the least of (i) 10 percent of the original principal amowlt of
all series of Outstanding Bonds or (ii) the maximum principal and interest to become due on all
Outstanding Bonds in the current year or any future year or (iii) 125% of the original average annual
principal and interest to become due on all series of Outstanding Bonds. Upon the issuance of the
Series 2007B Bonds, the Reserve Requirement shall be satisfied by delivery to the Trustee of
money of the City sufficient to satisfy the Reserve Requirement with respect to the Series 2007B
Bonds.
"Responsible Officer" of the Trustee hereunder means and includes the chairman of the
board of directors, the president, evety vice president, every assistant vice president, the cashier,
every assistant cashier, every corporate nust officer, and every officer and assistant officer of such
trustee, other than those specifically above mentioned, to whom any corporate bust matter is
refen-ed because of knowledge of, and familiarity with, a particular subject.
"Series 2007B Bonds" means the Authority's $ Columbia Heights Economic
Development Anthority Public Facility Lease Revenue Bonds, Series 2007B (Municipal Liquor Stores
Project).
"Sites" means the real property described in Exhibit A to the Lease, including any propetiy
added to or substituted for any portion of the Sites, and less any real property released fi'om the
Lease pursuant to Atiicle VI of the Lease.
"Special Record Date" for the payment of any Defaulted Interest (as defined in Section 2.05
hereof) on Bonds means a date fixed by the Ttustee pursuant to Section 2.05 hereof.
"State" means the State of Minnesota.
"Trustee" means U.S. Bank National Association, St. Paul, Minnesota, or any successor
serving as such under this Indenture.
"Trust Estate" means the interests of the Authority in the GroWld Lease and the Lease
assigned under Granting Clause III of this Indenture; the revenues, money, investments, contract
rights, general intangibles and instruments and proceeds and products and accessions thereof as set
forth in Granting Clause IV of this Indenture; and additional propetiy held by the Trustee pursuant
to Granting Clause V of this Indenture.
Section 1.02. Characteristics of Certificate or Opinion. Any Certificate made or given by
an officer of the Authority or of the City or by an Independent engineer, architect, consultant or
other person may be based, insofar as it relates to legal matters, upon an Opinion of COWlsel, unless
such person knows that the opinion with respect to the matters upon which the Certificate may be
based as aforesaid is en'oneous, or, in the exercise of reasonable care, should have known that the
same was en-oneous. Any such Certificate or Opinion of Counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of the Authority or the
City, upon a supporting Certificate of an officer or officers of the Authority or the City, unless the
signer knows that the supporting Cetiificate with respect to the matters upon which the Certificate
or opinion may be based as aforesaid is erroneous, or, in the exercise of reasonable care, should
have known that the same was erroneous.
9
Section 1.03. Additional Provisions as to Interpretation. All references herein to "Articles,"
"Sections" and other subdivisions are to the cOlTesponding Atticles, Sections or subdivisions of this
Indenture; and the words "herein," "hereof," "hereunder" and other words of similar impOlt refer to
this Indenture as a whole and not to any patticular Alticle, Section or subdivision hereof.
Whenever in this Indenture it is provided or permitted that there be deposited with or held in
trust by the Trustee money or funds in the necessaty amount to pay or redeem any Bonds, the
amount to be deposited or held shall be the principal amount of such Bonds and all unpaid interest
thereon to maturity, except that in the case of Bonds which are to be redeemed prior to maturity and
in respect of which there shall have been furnished to the Trustee proof satisfactory to it that notice
of such redemption on a specified redemption date has been duly given or provision satisfactory to
the Trustee shall be made for such notice, the amount to be deposited or held shall be the principal
mnount of such Bonds and interest thereon to the redemption date, together with the redemption
premiunl, if any.
Any tenus defined in the Ground Lease or the Lease but not defined herein shall have the
smne meaning herein unless the context hereof clearly requires otherwise.
This Indenture is governed by and shall be construed in accordance with the laws of
Minnesota.
(The remainder of this page is intentionally left blank.)
10
ARTICLE II
Form, Execution and Registration of Bonds
Section 2.01. FOlm, Maturities and Numeration of Series 2007B Bonds. The Series 2007B
Bonds to be issued and secured under this Indenture shall each be designated "Columbia Heights
Economic Development Authority Public Facility Lease Revenue Bond, Series 2007B (Municipal
Liquor Stores Project)." The Series 2007B Bonds and Certificates of Trustee and Assignment shall
be substantially in the form set fOlth in Exhibit B hereto. The Series 2007B Bonds shall be issued in
fully registered form and shall be in authorized denominations of $5,000 each, or any integral
multiple thereof not exceeding the principal amount maturing in any year, initially numbered from
R-I upwards in order of maturity, and the Series 2007B Bonds originally issued, and not in
exchange for Predecessor Series 2007B Bonds, shall be dated as of the Closing Date. Series 2007B
Bonds issued in exchange for Predecessor Series 2007B Bonds shall be dated as of the date to
which interest on the Predecessor Series 2007B Bonds has been dilly paid or provided for, or as of
the Closing Date, if issued prior to the first interest payment date, and shall be numbered in order of
issuance commencing with the next number after the highest number assigned to the initial Series
2007B Bond. No Series 2007B Bond shall represent principal maturing in different years. The
Series 2007B Bonds shall bear interest payable semiannually on February I and August 1 of each
year, commencing on August 1, 2008, or the most recent interest payment date to which interest has
been paid or duly provided for. Interest on the Series 2007B Bonds shall be calculated on the basis
of a 360-day year, consisting of twelve 30-day months. The principal and redemption price of the
Series 2007B Bonds shall be payable to the registered Owners upon presentation at the office of the
Trustee, in such coin or cunency of the United States of America as may be, on the respective dates
of payment thereof, legal tender for the payment of public and private debts, and interest on the
Series 2007B Bonds shall be paid by check or draft mailed to the registered Owners at the Owners'
registered addresses. The Regular Record Date referred to in Section 2.05 for the payment of
interest on the Series 2007B Bonds payable, and punctually paid or duly provided for, on any
interest payment date shall be the 15th day (whether or not a Business Day) of the calendar month
next preceding such interest payment date. The Series 2007B Bonds shall be issued in the original
aggregate principal amount of ($ ), shall mature on
February 1 of the years and in the amounts, and shall bear interest at the rates per annum, according
to dates of maturity, as follows:
11
Maturity
Date
Principal
Amount
Interest
Rate
Section 2.02. Execution of Bonds. The Bonds shall be signed in the name of the Authority
by the manual or the facsimile signature of the Chair and the Executive Director of the Authority,
or, in the absence of either or both of such officers, by other officers of the Authority. Said
signatures shall be authenticated by the manual signature of a Responsible Officer of the TlUstee,
which is hereby designated as authenticating agent. In the event that any of the officers whose
signatures appear on any Bonds shall cease to be officers of the Authority before such Bond shall
have been authenticated or delivered by the TlUstee, such Bonds may, nevertheless, be
authenticated, delivered, and be binding upon the Authority as though those officers who signed the
same had continued to be such officers of the Authority; and, also, any Bond may be signed on
behalf of the Authority by such person who, at the actual date of execution of such Bond, shall be
the proper officer of the Authority, although at the date of such Bond such person shall not have
been such an officer of the Authority. Upon the execution and delivery of this Indenture the
Authority shall execute and deliver the Bonds to the Trustee for authentication.
Section 2.03. Authentication of Bonds. No Bonds shall be valid or obligatory for any
purpose or shall be entitled to any right or benefit hereunder or under the Lease or the Bond
Resolution unless a Responsible Officer of the TlUstee shall manually endorse and execute on such
Bond a certificate of authentication substantially in the form of the Certificate of TlUstee set fOlth in
Exhibit B hereto. Such Certificate of Trustee upon any Bond shall be conclusive evidence that such
Bond so authenticated has been duly issued under this Indenture and that the Owner thereof is
entitled to the benefits of this Indenture.
No Bonds shall be authenticated by the TlUstee except in accordance with this Atticle.
The TlUstee shall not be required to authenticate any Bond unless provided with the
documents referred to in Section 2.08 and such frnther Certified Resolutions, Celtificates,
instruments or Opinions of Counsel as the Trustee may reasonably require with respect to the
validity of the Bonds to be issued and the right and authority of the TlUstee to authenticate such
Bonds.
Section 2.04. Registration, Transfers and Exchange. As long as any of the Bonds issued
hereunder shall remain Outstanding, the Authority shall maintain and keep at the office of the
Trustee, as paying agent, registration records for the payment of the principal of and interest on the
Bonds, as in this Indenture provided, and for the registration and transfer of the Bonds, and shall
also keep at the office of the Trustee records for such registration and transfer. The Authority
hereby appoints tlle Trustee, and its successors in the tlUSt fi'om tinle to time, as its agent to maintain
said registration records at the office of the TlUstee.
Upon sUl1'ender for transfer of any Bond at the office of the Trustee with a written
instlUment of transfer satisfactory to the Trustee, duly executed by the registered Owner or the
12
Owner's duly authorized attorney, and upon payment of any tax, fee or other govermnental charge
required to be paid with respect to such transfer, the Authority shall execute and the Trustee shall
authenticate and deliver, in the name of the designated transferee or transferees, one or more Bonds
of the same series, of any authorized denominations and of a like aggregate principal amount,
interest rate and maturity.
Except as the right of exchange may be limited as to Bonds of any series, at the option of the
registered Owner thereof, Bonds may be exchanged for an equal aggregate principal amount of
Bonds of the same series, maturity and interest rate of any authorized denominations, upon
surrender thereof at the office of the Trustee.
In all cases in which the privilege of exchanging Bonds or transferring Bonds is exercised,
the Authority shall execute and the Trustee shall deliver Bonds in accordance with the provisions of
this Indenture. For every such exchange or transfer of Bonds, whether temporary or definitive, the
Authority or the Tmstee may make a charge sufficient to reimburse it for any tax, fee or other
govermnental charge required to be paid with respect to such exchange or transfer, which sum or
sums shall be paid by the person requesting such exchange or transfer as a condition precedent to
the exercise of the privilege of making such exchange or transfer. Notwithstanding any other
provision of this Indenture, the cost of preparing each new Bond upon each exchange or transfer,
and any other expenses of the Authority or the Trustee incun'ed in connection therewith (except any
applicable tax, fee or other governmental charge) shall be paid by the City pursuant to the Lease.
The Authority and the Tmstee shall not be obligated to make any such exchange or transfer of
Bonds during the fifteen (15) days next preceding the date of the first publication or the mailing (if
there is no publication) of notice of redemption in the case of a proposed redemption of Bonds. The
Authority and the Trustee shall not be required to make any transfer or exchange of any Bonds
called for redemption.
Section 2.05. Pavment of Interest on Bonds: Interest Rights Preserved. Interest on any
Bond of any series which is payable, and is punctually paid or duly provided for, on any interest
payment date shall be paid to the person in whose name that Bond (or one or more Predecessor
Bonds) is registered at the close of business on the Regular Record Date for such interest specified
in the provisions of this Indenture creating such series.
Any interest on the Bonds which is payable, but is not punctually paid or duly provided for,
on any interest payment date (herein called "Defaulted Interest") shall forthwith cease to be payable
to the registered Owner on the relevant Regular Record Date solely by viItue of such Owner having
been such Owner; and such Defaulted Interest may be paid at the election of the Trustee in each
case, as provided in Subsection A or B below:
A. The Trustee may elect to make payment of any Defaulted Interest on the
Bonds of any series to the persons in whose names such Bonds (01' their respective
Predecessor Bonds) are registered at the close of business on a Special Record Date for the
payment of such Defaulted Interest, which shall be fixed in the following manner. The
Authority or the City shall notify the Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Bond and the date of the proposed payment (which date shall
be such as will enable the Trustee to comply with the next sentence hereof), and at the same
13
time the Authority or the City shall deposit with the Trustee an amount of money equal to
the aggregate amount proposed to be paid in respect of such Defaulted Interest or shall make
anangements satisfactory to the TlUstee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in nust for the benefit of the persons
entitled to such Defaulted Interest as in this Subsection provided and not to be deemed patt
of the Tmst Estate. Thereupon the Trustee may fix a Special Record Date for the payment
of Defaulted Interest, which shall be not more than 15 nor less than 10 days prior to the date
of the proposed payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Tmstee shall promptly notify the City and the
Authority of such Special Record Date and, in the name of the Authority and at the expense
of the City, shall cause notice of the proposed payment of such Defaulted Interest and the
Special Record Date therefor to be mailed, first class postage prepaid, to each Owner of a
Bond of such series at the Owner's address as it appears in the registration records not less
than 10 days prior to such Special Record Date. The Tmstee may, in its discretion, in the
name of the Authority and at the expense of the City, cause a similat. notice to be published
at least once in a Financial Newspaper, but such publication shall not be a condition
precedent to the establishment of such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid to the persons in whose names the
Bonds of such series (or their respective Predecessor Bonds) are registered on such Special
Record Date and shall no longer be payable pursuant to the following Subsection B.
B. The Trustee may make payment of any Defaulted Interest on the Bonds of
any series in any other lawful manner, if, aftcr notice given by the Authority or the City to
the Trustee of the proposed manner of payment pursuant to this Subsection, such payment
shall be acceptable to the Tmstee.
Subject to the foregoing provisions of this Section, each Bond delivered under this Indenture
upon transfer of or in exchange for or in lieu of any other Bond shall carryall the rights to interest
accrued and unpaid, and to accrue, which were carried by such other Bond and each such Bond
shall bear interest from such date that neither gain nor loss in interest shall result from such transfer,
exchange or substitution.
Section 2.06. Ownership of Bonds. As to any Bond, the Authority, the City and the Tmstee
and their respective successors, each in its discretion, may deem and treat the person in whose name
the same for the time being shall be registered as the absolute Owner thereof for all purposes atld
neither the Authority nor the Tmstee nor their respective successors shall be affected by any notice
to the contrary. Payment of or on account of the principal of any such Bond shall be made only to
or upon the order of the registered Owner thereof, but such registration may be changed as above
provided. All such payments shall be valid and effectual to satisfy and discharge the liability upon
such Bond to the extent of the sum or sums so paid.
Section 2.07. Reissuance of Mutilated. Destroved, Stolen or Lost Bonds. In case any
Outstanding Bond shall become mutilated or be destroyed, stolen or lost, the Tmstee shall
authenticate and deliver a new Bond of like tenor, number and amount as the Bond so mutilated,
destroyed, stolen or lost, in exchange and substirution for such mutilated Bond, upon surrender of
14
such mutilated Bond or in lieu of and substitution for the Bond destroyed, stolen or lost, upon filing
with the Trustee evidence satisfactory to the Authority and the Trustee that such Bond has been
destroyed, stolen or lost and upon fumishing the Authority, the Trustee and the City with indemnity
satisfactory to them and complying with such other reasonable regulations as the Authority, the
Trustee and the City may establish and payment of any expenses which the Authority, the Trustee
or the City may incur in connection therewith. In the event any such Bond shall have matured,
instead of issuing a substitute Bond, the Authority may pay the same without surrender thereof.
Section 2.08. Conditions for Authentication of Series 2007B Bonds. The Trustee shall not
authenticate and deliver the Series 2007B Bonds to be issued and delivered pursuant to this
Indenture unless theretofore or simultaneously therewith there shall have been delivered to the
Trustee the following:
(a) Certified copies of the Bond Resolution authorizing the issuance of the
Series 2007B Bonds and the execution and delivery of the Ground Lease, the Lease and this
Indenture, and of the resolution adopted by the City, giving approval to the Project and
authorizing the execution and delivery of the Ground Lease and the Lease.
(b) Executed counterparts of the Ground Lease, the Lease, this Indenture and
DCC-I financing statements executed by the City as Debtor and describing as collateral any
tangible personal property leased pursuant to the Lease, and by the Authority as Debtor and
describing as collateral the property granted to the Trustee pursuant to the granting clauses
hereof.
( c) The manually signed approving opinion of Bond Counsel, conceming the
validity, legality and tax-exempt status of the Series 2007B Bonds and exclusion of interest
thereon from gross income under the Intemal Revenue Code.
(d) A Celtificate of an Authorized Officer of the City to the effect that the City
has deposited in the Project Fund, or has expended for Project Costs, or has on hand such
amounts of money as are currently estimated to be needed to meet Project Costs for the
Project in excess of the proceeds of the Series 2007B Bonds to be deposited in the Project
Fund pursuant to Section 4.01 hereof.
(e) An order for authentication and registration of the Series 2007B Bonds,
signed by the Executive Director or other officer of the Authority, specifying the aggregate
principal amount of the Series 2007B Bonds to be issued and directing the Trustee to deliver
the Series 2007B Bonds to or upon the order of the Original Purchaser upon payment of the
purchase price therefor.
(f) A celtificate of the Authority pursuant to Section 148 of the Intemal
Revenue Code as to the absence of arbitrage expectation with respect to the Series 2007B
Bonds, which certificate may be based on certifications of the City.
(g) Such further celtifications, documents and Opinions of Counsel as the
Trustee, the Authority or Bond Counsel may require.
15
Section 2.09. Additional Bonds; Generallv. The Authority, upon request of the City, may
issue Additional Bonds of any series in amounts which are sufficient to (i) pay the cost of
completing the Project, acquiring, consh'ucting or equipping Improvements and refunding
Outstanding Bonds, (ii) pay the costs of issuing such Additional Bonds, (iii) increase the balance in
the Reserve Fund to the Reserve Requirement required by this Indenture after the issuance of such
Additional Bonds and, (iv) in the case of Additional Bonds issued to pay the cost ofImprovements,
to fund interest payable on such Additional Bonds for a period of time not to exceed six (6) months
beyond the completion of any Improvements financed with the proceeds thereof.
Section 2.10. Additional Bonds to Pav the Cost of Improvements. Additional Bonds of any
series may be issued, at one time or from time to time, subject to the conditions hereinafter
described, in an aggregate amount sufficient with any other funds available and committed therefor,
to pay the cost of any Improvements, including Improvements located on real propeliy contiguous
with the Sites, if such real property is to be acquired by the City and leased to the Authority
pursuant to the Ground Lease; provided, however, that such real property, whether or not financed
with the proceeds of Additional Bonds shall, as a condition to the issuance of such Additional
Bonds, be subjected to the Ground Lease and the Lease and become pali of the Sites, and the City,
the Trustee and the Authority shall take all action necessary to so provide.
Section 2.11. Additional Bonds for Refunding Purposes. Additional Bonds may be issued
at any time or fi'om time to time, subject to the conditions hereinafter described, for the pmpose of
providing funds, with any other funds available and committed therefor, for paying at their stated
maturities or earlier optional redemption date all the Outstanding Bonds of allY one or more series,
including the payment of any interest which will accrue on such Bonds to the shlted maturities or
earlier optional redemption date thereof, and any expenses in connection with such refunding.
Section 2.12. Deliverv of Additional Bonds. Additional Bonds of any series may be
executed by the Authority and delivered to the Trustee for authentication, but only upon receipt by
the Trustee of the following:
(a) An executed countelpali of the Supplemental Indenture creating such
Additional Bonds;
(b) Cash or Bond proceeds in the amount necessary to increase the balance in
the Reserve Fund to the Reserve Requirement immediately after the issuance of the
Additional Bonds; and
(c) Executed countelparts of amendments to the Ground Lease and the Lease
adding the propeliy, if any, financed with the Additional Bonds to the Sites and providing
for additional Lease Payments sufficient to provide for the payment of principal, premium,
if any, and interest on all Bonds to be Outstanding after the issuance of the Additional
Bonds.
Section 2.13. Book - Entrv Onlv Svstem.
16
(a) The Series 2007B Bonds will be initially issued in the f01m of a separate single
typewritten or printed fully registered Bond for each of the maturities set f01th in Section 2.01
hereof. Upon initial issuance, the ownership of each such Series 2007B Bond will be registered in
the registration books kept by the Trustee in the name of Cede & Co., as nominee for The
Depository Trust Company, New York, New York, and its successors and assigns ("DTC"). Except
as provided in this Section, all of the Outstanding Series 2007B Bonds will be registered in the
registration books kept by the Trustee in the name of Cede & Co., as nominee ofDTC.
(b) With respect to Bonds of any series registered in the registration books kept by the
Trustee in the name of Cede & Co., as nominee ofDTC, the Authority, the City and the Trustee will
have no responsibility or obligation to any broker dealers, banks and other financial institutions
from time to time for which DTC holds Bonds as securities depository (the "Participants") or to any
other person on behalf of which a Participant holds an interest in the Bonds, including but not
limited to any responsibility or obligation with respect to (i) the accmacy of the records of DTC,
Cede & Co. or any Palticipant with respect to any ownership interest in the Bonds, (ii) the delivery
to any Participant or any other person other than a registered Owner of Bonds, as shown by the
registration books kept by the Trustee, of any notice with respect to the Bonds, including any notice
of redemption, or (iii) the payment to any Pmticipant or any other person, other than a registered
Owner of Bonds, of any amount with respect to principal of, premium, if any, or interest on the
Bonds. The Authority, the City and the Trustee may treat and consider the person in whose name
each Bond is registered in the registration books kept by the Trustee as the absolute owner of such
Bond for the pmpose of payment of principal, premium and interest with respect to such Bond, for
the purpose of registering transfers of such Bond, and for all other pmposes. The Trustee will pay
all principal of, premium, if any, and interest on the Bonds only to or on the order of the respective
registered Owners, as shown in the registration books kept by the Trustee, and all such payments
will be valid and effectual to fully satisfy and dischm'ge the Authority's obligations with respect to
payment of principal of, premium, if any, or interest on the Bonds to the extent of the sum or sums
so paid. No person other than a registered Owner of Bonds, as shown in the registration books kept
by the Trustee, will receive a celtificated Bond evidencing the obligation of tillS IndentlU'e. Upon
delivery by DTC to the Trustee of a written notice to the effect that DTC has determined to
substitute a new nominee in place of Cede & Co., the words "Cede & Co.," will refer to such new
nominee ofDTC.
(c) The Authority has heretofore executed and delivered to DTC a Blanket Issuer
Letter of Representations which shall govern payment of principal of, premium, if any, and
interest on the Series 2007B Bonds and notices with respect to the Series 2007B Bonds.
(d) In the event the Authority, by resolution, detelmines that it is in the best interests of
the persons having beneficial interests in the Bonds of any series issued in book-entry form that they
be able to obtain Bond certificates, the Authority will notify the Trustee, which will notify DTC,
whereupon DTC will notify the Pmticipants, of the availability through DTC of Bond celtificates.
In such event the Authority will issue, transfer and exchange Bond certificates as requested by DTC
and any other registered owners in accordance with the provisions of this Indenture. DTC may
detennine to discontinue providing its services with respect to the Bonds at any time by giving
notice to the Authority and the Trustee and discharging its responsibilities with respect thereto under
applicable law. In such event, if no successor secmities depository is appointed, the Authority will
17
issue and the Trustee will authenticate Bond certificates in accordance with this Indenture and the
provisions hereof will apply to the transfer, exchange and method of payment thereof.
(e) Notwithstanding any other provision ofthis Indenture to the contrary, so long as any
Bond is registered in the name of Cede & Co., as nominee of DTC, all payments with respect to
principal of, premium, if any, and interest on such Bond and all notices with respect to such Bond
will be made and given, respectively in the manner provided in the Representation Letter.
(The remainder of this page is intentionally left blank.)
18
ARTICLE III
Redemption of Bonds
Section 3.01. Redemption of Series 2007B Bonds. (a) Extraordinwy Redemption. The
Series 2007B Bonds are subject to extraordinary redemption on any Business Day in whole or in
part, at a redemption price equal to par, plus accrued interest to the redemption date, at the election
of the City, upon the happening of certain events of damage to or destruction or condemnation of
the Sites or the Facilities or change of law rendering the Lease unenforceable or impossible of
performance, all as more fully provided in Section 7.7 ofthe Lease.
(b) Optional Redemption. The Series 2007B Bonds maturing on or after February 1,2018
are subject to optional redemption, at the election of the City, in whole or in part, and if in part in
such manner as the City shall determine, on February 1, 2017 and any date thereafter, at a
redemption price of par plus accrued interest.
(c) MandatOlY Sinking Fund Redemption. [Insert for Term Bondsl
Notice of any redemption of Series 2007B Bonds, except any mandatory sinking fund
redemption, shall be mailed in the form provided by Section 3.02 and in the manner and to the
extent required by Section 3.03. Prior to the date fixed for redemption, funds shall be deposited
with the Trustee sufficient to pay the Series 2007B Bonds called and accrued interest thereon. Upon
the happening of the above conditions, any Series 2007B Bonds thus called shall not bear interest on
or after the redemption date, and except for the purpose of payment by application of the funds so
deposited, shall no longer be protected by this Indenture.
Section 3.02. Written Notice to Trustee. The Authority (upon direction of the City) shall
provide to the Trustee written notice of its election to redeem Bonds, describing the Outstanding
Bonds to be redeemed, the date of redemption, and the redemption price.
Section 3.03. Mailing and Publication of Notice. Notice of redemption (including when
only a pOltion of the Bonds is to be redeemed, the series and numbers of such Bonds) shall be
mailed by the Trustee, not less than thirty (30) days before the redemption date, by first class mail,
to the registered Owners of any Bonds which are to be redeemed, at their last addresses appearing
upon the registration books maintained by the Trustee. If required by the Act or other applicable
law a similar notice shall also be published in such manner as may be required by the Act or other
applicable law. No notice of redemption need be given if the Owners of all Bonds called for
redemption waive notice thereof in writing and such waiver is filed with the Trustee.
Section 3.04. Deposit for Redemption. On or prior to the redemption date, there shall be
deposited with the Trustee cash in an aggregate amount which shall be sufficient to pay the
redemption price of the Bonds to be redeemed and interest thereon to the redemption date; and there
shall be deposited, or arrangements shall be made with the Trustee to deposit, with the Trustee a
sum sufficient to pay the proper expenses and charges of the Trustee in connection with such
redemption. Upon deposit with the Trustee of the aggregate amount of such redemption price and
19
interest, such money shall be set aside by the Trustee and held by it for the account of the respective
Owners of the Bonds being redeemed.
Section 3.05. Pavment of Redeemed Bonds. After notice of redemption shall have been
given as provided in Section 3.03, the Bonds specified in such notice shall become due and payable
on the redemption date. Payment of the redemption price and interest shall be made to or upon
order of each registered Owner, upon the sun'ender of the Bonds. Any installment of interest
maturing on or prior to the redemption date shall be payable to the registered Owners of Bonds on
the relevant Record Dates according to the terms of such Bonds and the provisions of Section 2.05
hereof and the notice of redemption herein provided for may so state. If redemption money is
available for the payment of all of the Bonds called for redemption on the redemption date, the
Bonds so called shall cease to accrue interest on or after the redemption date, and such Bonds shall
not be deemed to be Outstanding hereunder for any purpose, except that the Owners thereof, on
presentation, as herein provided, shall be entitled to receive payment of the redemption price and
interest accrued thereon to the redemption date from the money set aside by the Trustee as
aforesaid.
Section 3.06. Cancellation of Redeemed Bonds. All Bonds so redeemed shall forthwith be
canceled and destroyed by the Trustee; and no further Bonds shall be executed or authenticated or
issued hereunder in exchange or substitution therefor.
Section 3.07. Partial Redemption of Bonds. If less than all of the Bonds of a series of a
particular maturity at the time Outstanding are to be called for prior redemption, the particular
Bonds or p011ions thereof of such maturity to be redeemed shall be selected by lot or other random
means, except as otherwise provided herein, by the Trustee in such manner as the Tmstee, in its
discretion, may determine. The Trustee shall call for redemption in accordance with the foregoing
provisions as many Bonds or portions thereof as will, as nearly as practicable, exhaust the money
available therefor. Particular Bonds or portions thereof shall be redeemed only in integral multiples
of principal amount of$5,000.
In the case of Bonds of denominations greater than $5,000, if less than all of such Bonds
then Outstanding are to be called for redemption, then for all purposes in connection with
redemption, each $5,000 of principal amount shall be treated as though it was a separate Bond of the
denomination of $5,000. If it is detemlined that one or more, but not all of the $5,000 units of
principal amount represented by any such Bond is to be called for redemption, then upon notice of
intention to redeem such $5,000 unit or units, the Owner of such Bond shall f011hwith surrender
such Bond to the Tmstee (1) for payment of the redemption price (including the redemption
premium, if any, and interest to the date fixed for redemption) of the $5,000 unit or units of
principal amount called for redemption and (2) exchange for a new Bond or Bonds ofthe aggregate
principal amount of the um'edeemed balance of the principal amount of such Bond, without charge
therefor. If the Owner of any such Bond of a denomination greater than $5,000 shall fail to present
such Bond to the Trustee for payment and exchange as aforesaid, such Bond shall nevertheless
become due and payable on the date fixed for redemption to the extent of the $5,000 unit or units of
principal amount called for redemption (and to that extent only). Interest shall cease to accme on
the p011ion of the principal amount of such Bond represented by such $5,000 unit or units of
principal amount on and after the date fixed for redemption; provided, that funds sufficient for the
20
payment of the redemption price shall have been deposited with the Trustee and shall be available
for the redemption of said $5,000 unit or units on the date fixed for redemption, and in such event,
such Bond shall not be entitled to the benefit or security of this Indenture or the Bond Resolution to
the extent of the portion of its principal amount (and accrued interest thereon to the date fixed for
redemption and applicable premium, if any) represented by such $5,000 unit or units of principal
amount, nor shall new Bonds be thereafter issued cOlTesponding to said unit or units.
(The remainder ofthis page is intentionally left blank.)
21
ARTICLE IV
Bond Proceeds; Project Fund
Section 4.01. Deposit of Series 2007B Bond Proceeds. The Authority shall deposit, or shall
direct the Original Purchaser of the Series 2007B Bonds to deposit, with the Trustee all of the net
proceeds of the sale ofthe Series 2007B Bonds ($ ):
(i) With the Trustee to the credit of the Reserve Fund the amount of
$ , in satisfaction of the Reserve Requirement for the Reserve Fund; and
(ii) With the Trustee to the credit of the Project Fund the balance of such
proceeds, $ , which includes the amount by which the purchase price
paid by the Original Purchaser exceeds the minimum bid.
Section 4.02. Establishment of Proiect Fund. The Authority hereby establishes a fund
(herein called the "Project Fund") with the Trustee and, on the Closing Date, there shall be
deposited with the Trustee to the credit of the Project Fund proceeds of the Series 2007B Bonds, as
provided in clause (ii) of Section 4.01. As provided in Section 4.05 hereof, Construction Period
income and profit from the investment of money in the Project Fund shall be credited to the Project
Fund. In addition to such proceeds of the Series 2007B Bonds, income and profit, the City has
covenanted in the Lease that, upon request of the Trustee, it will deposit in the Project Fund the
additional money, if any, which, together with such proceeds, income and profit will be sufficient to
finance the total Project Costs. The Authority has no obligation to deposit any money in the Project
Fund or to apply money to Project Costs except proceeds of Bonds or funds made available therefor
by the City.
The money in the Project Fund shall be held in bust by the TlUstee and applied to the
payment of the Project Costs in accordance with and subject to the provisions of this Article, and
pending such application shall be subject to a lien and charge in favor of the Owners of the Bonds
issued and Outstanding under this Indenture and shall be held for the further security of such
Owners until paid out as herein provided.
Section 4.03. Proiect Costs Defined. For the purposes of this Article, Project Costs shall
include, without intending thereby to limit or restrict any proper definition of such cost under any
applicable laws and generally accepted accounting principles, the following:
(a) Obligations inculTed for labor (including payroll cost of City employees
according to time spent by such employees on the Project) and to contractors, builders and
material suppliers in connection with the acquisition, constlUction, reconstruction,
renovation and installation of the Project, including obligations for machinery, materials and
equipment therefor;
(b) Costs of acquisition of land and all interests in land required specifically for
the Sites, site improvements required for the construction or operation of the Project,
22
demolition of any existing building on the Sites and removal of any equipment therefrom
(net of any salvage).
(c) The cost of any indemnity and surety bonds deemed necessary by the City,
the fees and expenses of the Tmstee and any paying agent during the Constmction Period,
taxes and other municipal or governmental charges levied or assessed during the
ConstIUction Period on the Sites, and any premiums for insurance incurred in connection
with the Project during the Construction Period;
(d) Costs of acquisition and installation of equipment, furnishings and other
tangible personal property required for the Project;
(e) Fees and expenses of engineers and architects for surveys, estimates and
other preliminaty investigations, preparation of plans, drawings and specifications, and
supervising construction, as well as for the performance of all other duties of engineers and
architects in relation to the Project or the issuance ofthe Bonds therefor, including the costs
of such services as may have been performed by employees of the City;
(f) Expenses of administration, supervision and inspection properly chargeable
to the Project, administrative fees and other expenses relating to the Project, title insurance
premiums, abstracting and filing fees, legal expenses and fees, fiscal consultant fees and
expenses, cost of audits and of preparing, offering, selling and issuing any of the Bonds and
initial fees of the Trustee;
reg) Fees pavable to the Insurer for the policy of insurance with respect to the
Bonds;l and
(h) Any other obligation or expense heretofore or hereafter incurred by the City
in connection with the Project defined as and constituting a proper Project cost and approved
by an Authorized Officer of the City.
Section 4.04. Payments fi'om Proiect Fund. Each of the payments refened to in Section
4.03 shall be made from the Project Fnnd only upon receipt of a Project Fund Draw Request of an
Authorized Officer of the City, in substantially the form attached hereto as Exhibit C.
(1) Before any of the payments referred to in Section 4.03 may be made from the
Project Fund, an Authorized Officer of the City shall certify with respect to each such payment: (i)
that none of the items for which the payment is proposed to be made has formed the basis for any
payment theretofore made from the Project Fund; and (ii) that each item for which payment is
proposed to be made is or was necessaty in connection with the Project. In the case of any
constlUction contract providing for the retention of a portion of the contract price, there shall be paid
only the net atnount remaining after deduction of any such portion. All payments made from the
Project Fund shall be presumed by the Trustee to be made for the purposes certified in said
statement, and the Trustee shall not be required to see to the application of any payments made from
the Project Fund or to inquire into the purposes for which withdrawals are being made fi'om the
Project Fund.
23
(2) Money in the Project Fund shall be subject to withdrawal from time to time only for
the purposes of paying Project Costs or for the reimbursement to the City, subject to any applicable
provision of law, for payments theretofore made by the City for Project Costs. The Authority
agrees that none ofthe funds in the Project Fund shall be used for any purposes other than payment
or reimbursement of Project Costs and the payment of principal of, premium (if any) on and interest
on the Bonds.
(3) Money deposited in the Project Fund shall be paid out from time to time by the
Trustee in order to pay, or to reimburse the City for payment made by the City, any Project Costs
and such other costs related thereto, within three (3) business days after receipt by the Trustee of
a written Project Fund Draw Request.
(4) Each written Project Fund Draw Request of the City shall be prepared
substantially in the form of APPENDIX C attached hereto and shall certify:
(A) the item number of such Project Fnnd Draw Request, the name of the
person, firm, or corporation to whom each such payment is due, each amount to be paid
or reimbursed, and that snch Proj ect Costs were inculTed for or in connection with the
Project;
(B) that such Project Costs have been paid or incurred by the City and are
presently due and payable or have been paid by the City and are reimbursable hereunder
and each item thereof is a proper charge against the Project Fund and has not been
previously paid or reimbursed from the proceeds of the Series 2007B Bonds;
(C) that such costs have not been included in any other Project Fund Draw
Requests previously filed with the Trustee under the provisions hereof; and
(D) that there has not been filed with or served upon the City, any notice of
any lien, right to a lien, or attachment upon or claim affecting the right of any person to
receive payment of the respective amount stated in such Project Fund Draw Request
nnless payment is being contested.
(5) In the event that the Trustee requires that payouts be made pursuant to a
disbursement agreement with a title insurance company, the Trustee is authorized to enter into a
disbursement agreement with the City and the Authority and a title insurance company
acceptable to the Trustee. In the event such disbursement agreement is entered into, the Trustee
shall disburse Project Costs pursuant to Project Fund Draw Requests in accordance with any
additional requirements of the disbursement agreement.
(6) Upon receipt of each Project Fund Draw Request of the City, the Trustee shall
pay the obligation set forth in such Project Fund Draw Request ont of money in the Project Fund.
In making such payments the Trustee may rely upon such Project Fund Draw Request. If for any
reason the City should decide prior to the payment of any item in said Project Fund Draw
Request not to pay such item it shall give written notice of such decision to the Trustee and upon
24
receipt thereof the Trustee shall not make such payment if such payment has not theretofore been
made. The Trustee shall not be liable to the City for any payment made pursuant to a Project
Fund Draw Request prior to the Trustee's receipt of such written notice. For purposes of
complying with the requirements of this Section 4.07, the Trustee may conclusively rely and
shall be protected in acting or refraining from acting upon the Project Fund Draw Request of the
City, which may be submitted by email or fax. The Trustee shall not be bound to make an
investigation into the facts or matters stated in any Project Fund Draw Request of the City. The
Trustee shall not be responsible for determining whether the funds on hand in the Project Fund
are sufficient to complete the Project. The Trustee shall not be required to collect or verify lien
waivers.
(7) The City shall deliver to the Trustee within ninety (90) days after the completion
of the Project, a certificate of the City certifying:
(A) that all permits necessary for the occupancy and use of the Project have
been obtained and are in full force and effect;
(B) that all fixtures required for the operation of the Project have been
installed and are free and clear of all liens and security interests other than Permitted
Encumbrances; and
(C) that the Project has been fully paid for and no claim or claims exist against
the City or against the Project out of which a lien based on furnishing labor or material
exists or might, with the passage of time or the giving of notice, or both, ripen; provided,
however, there may be excepted from the foregoing statement any claim or claims out of
which a lien exists or might, with the passage of time or the giving of notice, or both,
ripen in the event that the City intends to contest such claim or claims, in which event
such claim or claims shall be described; provided that sufficient funds are on deposit in
the Project Fund and are committed by and available to the City for the Project sufficient
to make payment of the full amount which might in any event be payable in order to
satisfy such claim or claims.
Section 4.05. Application of Balance in Proiect Fund. When the City has fumished to the
Trustee a Certificate of an Authorized Officer as to the Completion Date, illlY balance then
remaining in the Project Fund (after reserving such amount as the Authorized Officer shall deem
necessary for the payment of any remaining amounts due or to become due for Project Costs, and
after returning to the City any contingent funds which it may have deposited into the Project Fund
as additional funds to finance total Project Costs and found to be unnecessary for such purpose),
shall be transfelTed to the Bond Fund.
Section 4.06. Investment ofProiect Fund. The Trustee shall invest the money on deposit in
the Project Fund at the request of an Authorized Officer of the City in Permitted Investments which
shall (i) be payable in such amounts and at such times not later than the time or times when such
money will be needed to pay Project Costs, and (ii) mature or may be redeemed no later than twelve
(12) months from the date of investment. The type, amount and maturity of Permitted Investments
made pursuant to this Section shall conform to any instlUctions of the Authorized Officer. The
25
TlUstee may, from time to time, cause aoy such investments in the Project Fund to be sold or
otherwise be converted into cash, whereupon the proceeds derived from such sale or conversion
shall be deposited into the Project Fund. Any interest or profit derived fi'om investments shall be
credited to the Project Fund. Any loss derived from investments shall be debited to the Project
Fund. Investments permitted under this Section may be purchased fi'om the TlUstee or from any of
its affiliates. The Authority hereby covenaots that no portion of the Project Fund representing
proceeds of the Series 2007B Bonds shall be directed or permitted to be invested or used in such a
manner that any of the Series 2007B Bonds would be "arbitrage bonds" under Section 148 of the
Internal Revenue Code or regulations thereunder.
(The remainder of this page is intentionally left blank.)
26
ARTICLE V
Disposition of Pledged Revenues
Section 5.01. Bond Fund. The Authority hereby establishes and shall maintain with the
Trustee, so long as any Bonds are Outstanding, a separate Fund to be designated "Columbia
Heights Economic Development Authority Public Facility Lease Revenue Bond (Municipal
Liquor Stores Project) Bond Fund" (herein called the "Bond Fund"), into which the Trustee shall
make the following deposits:
(a) On July 15,2008 and each January 15 and July 15 thereafter, or as soon after
the due date as received from the City, all payments by the City as Lease Payments under
Sections 4.2 and 4.3 ofthe Lease.
(b) All other money received by the Trustee from the City when accompanied
by directions of the City that such money is to be paid into the Bond Fund or used for
purposes for which money in the Bond Fund may be used.
(c) All other money required to be deposited in the Bond Fund pursuant to any
provision ofthis Indenture, the Ground Lease, the Lease or the Bond Resolution.
The money and investments in the Bond Fund are inevocably pledged and shall be used by
the TlUstee, from time to time, to the extent required:
FIRST:
For the payment of principal of, premium (if any) on and interest on the
Bonds, as and when such principal, premium and interest shall become due
and payable; and
SECOND:
Upon direction by the Authority, to purchase Outstanding Bonds at purchase
prices not exceeding par plus acclUed interest.
Section 5.02. Reserve Fund. The Authority hereby establishes and shall maintain with the
TlUstee, so long as any of the Bonds are Outstanding, a separate Fund to be designated "Columbia
Heights Economic Development Authority Public Facility Lease Revenue Bond (Municipal Liquor
Stores Project) Reserve Fund" (herein called the "Reserve Fund"), into which the Trustee shall
make the following deposits:
(a) After the Series 2007B Bonds have been delivered, the TlUstee shall deposit
into the Reserve Fund money received fi'om the Series 2007B Bonds in the amount of
$ , in order to satisfy the Reserve Requirement for the Series 2007B Bonds.
(b) After the Series 2007B Bonds have been delivered, the Trustee shall deposit
into the Reserve Fund all money and income of the TlUst Estate not deposited or required to
be deposited in the Bond Fund, and all Additional Lease Payments pursuant to Section
27
4.3(g) of the Lease, as fiuther required under this Section 5.02, in order to maintain or
restore the balance on deposit in the Reserve Fund in an amount at least equal to the Reserve
Requirement, as further provided in this Section.
(c) All other funds required or pelmitted to be deposited into the Reserve Fund
under this Indenture or the Lease.
The funds and investments in the Reserve Fund are ilTevocably pledged to and shall be used
by the Trustee, from time to time, as may be required, for the payment of principal of, premium (if
any) on and interest on the Bonds as and when such principal, premiunl and interest shall become
due and payable, and for those purposes only; provided that (i) if cash amounts on deposit in the
Reserve Fund at any time exceed the Reserve Requirement, the Trustee shall transfer the excess to
the Bond Fund and (ii) cash amounts in the Reserve Fund shall be transferred to the Bond Fund,
when the money and proceeds of investments in the Reserve Fund are sufficient (with money and
proceeds of investments in the Bond Fund) to pay when due the principal of and interest on all
Outstanding Bonds.
Notwithstanding any other provision of this Section 5.02 to the contrary, in the event of a
failure by the City to make Lease Payments in the amounts or at the times required under Section
4.2 of the Lease, the Trustee shall transfer from the Reserve Fund any amount required to make
good the deficiency, and the City shall be required to restore the balance in the Reserve Fund to the
Reserve Requirement by making Additional Lease Payments pursuant to Section 4.3(g) of the
Lease.
The Trustee, in its discretion, is authorized to use fiu1ds and investments in the Reserve
Fund to pay the amount of any rebate due the United States with respect to the Bonds under Section
148 of the Internal Revenue Code, if the City shall have failed to payor provide for the payment
thereof under Section 4.3(e) of the Lease.
If any transfer of funds is made from the Reserve Fund to the Bond Fund under this Section,
or if an Event of Default occurs, the Trustee may use any funds in the Reserve Fund to pay for any
mortgage registration tax or other recording fees required to be paid for purposes of filing this
Indenture with the County Recorder of Anoka County, MiIDlesota.
Section 5.03. Investment of Funds. To the extent authorized by applicable law, money on
deposit to the credit of the Project Fund, the Bond Fund and the Reserve Fund shall be invested by
the Trustee, upon request by an Authorized Officer of the City, in Pennitted Investments.
Investments pennitted under this Section may be purchased from the Trustee or from any of its
affiliates. Investments so made shall be deemed at all times to be a palt of the respective Fund, but
may from time to time be sold or otherwise converted into cash, whereupon the proceeds derived
from such sale or conversion shall be credited to such Fund. Any interest accruing on alld any profit
realized from such investment shall be credited to the respective Fund, except that, so long as there
shall be credited to the Reserve Fund a sum not less than the Reserve Requirement, earnings thereon
shall be credited to the Bond Fund. All funds and accounts shall be marked to market by the
Trustee on a semiaIDlual basis no fewer than fifteen (15) days prior to each interest payment date.
Any investments purchased with amounts on deposit in any Fund under this Indenture may be
28
exchanged for cash or investments of equal value credited to any other Fund. The Trustee shall
redeem or sell, at the best price obtainable, any investments so made, whenever it shall be necessary
to do so in order to provide money to meet any payment from the respective Fund. Neither the
Tmstee nor the Authority shall be liable for any loss resulting from any such investment, nor from
failure to preserve rights against endorsers or other prior parties to instruments evidencing any such
investment. Investment of funds pursuant to this Section shall be limited as to amount and yield of
investment in such manner that no patt of the Outstanding Bonds shall be deemed "arbitrage bonds"
under Section 148 of the Internal Revenue Code and regulations thereunder. The Trustee shall be
entitled to rely on the Non-Arbitrage Celtificate delivered in connection with the issuance of cash
series of Bonds. Investment of funds pursuant to this Section shall comply with all procedures
required under applicable provisions of the Internal Revenue Code to qualifY the purchase price of
an investment as the fair market value of such investment.
Section 5.04. Compliance with Arbitrage Restrictions; Rebate Requirements. The
Authority hereby acknowledges and confirms that the maintenance of the tax-exempt status of
interest on the Bonds is dependent, among other things, on compliance with the at'bitrage
requirements set forth in Section 148 of the Internal Revenue Code. In order to confirm and cany
out such understanding, the City has agreed under the Lease, inter alia, to make or cause to be made
periodic computations and rebate payments to the United States as and when required by said
Section 148 of the Internal Revenue Code. The Authority and the City expect that the proceeds of
the Bonds (other than proceeds deposited in the Reserve Fund) will be exempt from the rebate
requirements of Section l48(f) of the Internal Revenue Code, for issues the gross proceeds of which
will be spent within 24 months. However, if that exception is inapplicable and no other exemption
is available, the City is to cause to be computed as of each computation date all rebatable arbitrage
eatned with respect to nonpurpose investments made with gross proceeds ofthe Bonds. Payment of
all rebates required to be made to the United States under Section 6.8(b) of the Lease and under this
Section shall be made from payments made by the City under Section 4.3(e) of the Lease or from
other available funds held under this Indenture. Such required rebate payments shall be made in the
minimum atl10unts required by said Section 148 of the Internal Revenue Code not later than 60 days
after each installment computation date. Not later than 60 days after the final computation date, the
Tmstee shall payor cause to be paid from the sources described in the Lease and in this Section
5.04, 100 percent ofthe aggregate atl10unt described above not theretofore paid to the United States.
In constming this Section 5.04 all terms used in this Section shall have the meanings provided in
Section 148 of the Internal Revenue Code. Notwithstanding any other provision of this Section
5.04, any requirement imposed herell11der may be deemed inapplicable and of no force or effect if
an opinion of Bond Counsel is rendered to the Tmstee to the effect that the failure to impose such
requirement will not adversely effect the tax-exempt status of interest on the Bonds.
In order to comply with the provisions of this Section 5.04 or Section 6.8(b) of the Lease,
the Trustee is hereby authorized to obtain such Opinions of Counsel, reports of accountants and
Certificates of the City as may be necessary for the purpose, and any expenses thereof shall be
borne by the City. The Trustee is also authorized to apply atl10unts credited to the Reserve Fund to
the payment of any rebate then owing, as fulther provided in Section 5.02 hereof, and to establish
such other fund or account hereunder as it may deem necessary or desirable in order to maintain
funds for the purpose of making any payment required under this Section 5.04.
29
ARTICLE VI
Particular Covenants ofthe Authority
The Authority covenants and agrees, so long as any Bonds shall be Outstanding and subject
to the limitations on its obligations herein set fOllh, that:
Section 6.01. Pavment of Bonds. It will faithfully perform at all times any and all
covenants, undertakings, stipulations and provisions contained in this Indenture and the Bond
Resolution and in each and every Bond executed, authenticated and delivered hereunder; will pay,
but solely from Lease Payments by the City and other amounts received or held by the TlUstee
hereunder, the principal of, premium (if any) on and interest on every Bond issued hereunder on the
dates, at the places and in the manner prescribed in such Bonds in any coin or currency which, on
the respective dates of payment of such principal and interest, is legal tender for the payment of
public and private debts; and will cause such amounts received to be deposited with the TlUstee
prior to the due date of each installment of principal and interest and prior to the maturity of any
Bond in amounts sufficient to pay such installment or Bond to the end that the Trustee may cause to
be placed in any other bank of payment specified herein and in the Bonds, on time, money required
for payment of principal, premium and interest; provided, however, that the principal of and interest
on any Bond is not and shall not constitute an indebtedness of the Authority or the City, within the
meaning of any state constitutional provision or statutOlY limitation and shall not be deemed to
represent a debt or pledge the full faith or crcdit of the Authority or the City or grant to the Owner of
any Bond any right to have the Authority or the City levy any taxes or appropriate any funds to the
payment of principal of or interest on the Bonds, and the Bonds do not constitute or give rise to a
charge against the general credit or taxing powers of the Authority or the City or a pecuniary
liability of the Authority or the City, the payment of the Bonds to be made solely and only out of the
money received pursuant to the Lease and the Funds and Accounts established and maintained with
the Trustee pursuant to this Indenture and appropriated to the payment of the Bonds by this
Indenture.
Section 6.02. Extensions of Pavments of Bonds and Interest. The Authority shall not
directly or indirectly extend or assent to the extension of the maturity of any of the Bonds or the
time of payment of any claims for interest, except as may be expressly permitted by the provisions
of this Indenture. Nothing in this Section shall, however, be deemed to limit the right of tlle
Authority to fund or refund such Bonds and claims for interest.
Section 6.03. Authoritv of the Authoritv. The Authority has undertaken, pursuant to the
Constitution and laws of the State, to create and issue the Bonds, to use the proceeds thereof to
finance the Project, to execute tlus Indenture and assign and pledge to the Trustee the Trust Estate,
including the Lease Payments, and to make the covenants as herein provided. All neceSS31Y action
and proceedings on their p311 to be taken for the creation and issuance of the Bonds and the
execution and delivery of this Indenture have been duly and effectively taken, and the Bonds in the
hands of the Owners thereof are and will be duly issued special, limited obligations of the Authority
in accordance with their terms. The Bonds are being issued pursuant to the Act and are intended to
30
be subject to no other general provisions of law respecting the authorization, execution and delivery
of bonds.
Section 6.04. Conceming the Lease. The Authority will cooperate or cause and permit the
Trustee to take such action as may be necessary or advisable to enforce the covenants, terms and
conditions of the Lease if such action shall be deemed to be in the best interest of the Authority or
the Owners. The Authority shall do or cause to be done all things on its part to be performed under
the Lease so that the obligations of the City thereunder shall not be impaired or excused.
Section 6.05. To Observe All Covenants and Terms; Limitations on Authority's
Obligations. The Authority will not issue or pennit to be issued any Bonds hereunder in any
mauneI' other than in accordance with the provisions of tins Indenture and the agreements in that
behalf herein contained, and will not suffer or pet'n1it any Default to occur under this Indenture, but
will faithfully observe and perform all the conditions, covenants and requirements hereof. It is
expressly agreed that the Authority has no obligation to levy taxes for, or make any advance or
payment or incur any expense or liability fi'Om its general funds in performing, any of the
conditions, covenants or requirements of the Bonds or this Indenture or from any funds other than
revenues and income received pursuant to the Lease or money in the Funds and Accounts provided
for herein.
Section 6.06. Liens; Further Assurances. The Authority agrees that it will not m0l1gage,
sell or otherwise encumber its interest in the Sites and the Facilities during the term of the Lease,
except as such liens may constitute Permitted Encumbrances.
The Authority will execute or cause to be executed any and all fu11her instruments that may
reasonably be requested by the Trustee and be authorized by law to perfect the lien of this Indenture
on the propel1y secured hereby, or to vest in the Trustee the right to receive and apply the revenues
and income pledged to the payment or protection and security of the Bonds, and will execute,
deliver, file or record any financing statement pursuant to the Uniform COl11l11ercial Code if such
filing, registration or recording shall be necessary or convenient to effect, protect or confilm the
pledge and lien of tl1is Indenture. The City shall pay all fees and expenses in connection with the
preparation of such documents and all filing and registration taxes and fees in comtection therewith.
(The remainder ofthis page is intentionally left blank.)
31
ARTICLE VII
Remedies on Default
Section 7.01. Events of Default. Each of the following events is hereby defined as, and is
declared to be and to constitute, an "Event of Default":
(a) If payment of the principal of any of the Bonds, or any premium thereon,
when the same shall become due and payable, whether at maturity or proceedings for
redemption, declaration or otherwise, shall not be made; or
(b) If payment of any interest on the Bonds when the same shall become due
and payable (in which case interest shall be payable to the extent permitted by law on any
overdue installments of interest, in each case at the interest rate borne by the Bonds in
respect of which such interest is overdue) shall not be made; or
(c) If the Authority shall default in the due and punctual perfotmance of any of
the other covenants, conditions, agreements and provisions contained in the Bonds or in this
Indenture, or in any indenture supplemental hereto on the patt of the Authority to be
performed, and such default shall have continued for a period of sixty (60) days after written
notice, specifYing such default and requiring the san1e to be remedied, shall have been given
to the Authority and to the City by the Trustee, or if such notice is given to the Tmstee, the
Authority and the City by the Owners of not less than twenty-five per cent (25%) in
principal amount of the Bonds then Outstanding; or
(d) If any "event of default" as that term is defined in the Lease shall occur and
be continuing.
Section 7.02. Acceleration of Maturitv. Upon the occunence of an Event of Default, or if
the City shall determine pursuant to Section 5.6 of the Lease not to appropriate funds for the
payment of Lease Payments to become due after the then-cunent Fiscal Year and to tenninate the
Lease at the end of the then-current Fiscal Year, the Trustee may, upon written request of the
Owners of twenty-five percent (25%) in aggregate principal atllount of Bonds Outstanding
hereunder, by notice in writing delivered to the Authority and the City, declare the principal of all
Bonds hereby secured then Outstanding and the interest accmed thereon immediately due and
payable.
Section 7.03. Enforcement of Covenants and Conditions. In any case of Default or breach
of any of the covenants and conditions of this Indenture, or to protect the Trust Estate, the Tmstee,
anything herein contained to the contrary notwithstanding and without any request from any Owner
(subject, however, to the provisions of Section 8.06 hereof), may take such action or actions for the
enforcement of its rights and the rights of the Owners and the rights of the Authority under the
Ground Lease or the Lease as due diligence, prudence and cat'e would require and to pursue the
satlle with like diligence, pmdence and care.
32
Upon the happening and continuance of an Event of Default, the Tmstee may, and upon the
written request of the Owoers of not less than twenty-five percent (25%) in aggregate principal
amount of Outstanding Bonds the Trustee shall, proceed fot1hwith by suit or suits at law or in equity
or by any other appropriate remedy to enforce payment of the Bonds, to enforce application to such
payment of the funds, revenues and income appropriated thereto by this Indenture and by the
Bonds, to enforce rights of the Authority under the Ground Lease and the Lease, and to pursue any
such other appropriate legal or equitable remedy as the Tmstee, being advised by counsel, shall
deem most effectual to protect and enforce any of its rights or auy of the rights of the Owoers.
Notwithstanding the foregoing, the Tmstee need not proceed upon any such written request of the
Owners, as aforesaid, unless such Owners shall have offered to the Trustee security and indemnity
satisfactory to it against the costs, expenses and liabilities to be inCU1l'ed therein or thereby.
The TlUstee may (and is hereby authorized and empowered to) foreclose tlllS Indenture by
action or advertisement pursuant to the laws of the State in such case made and provided, power
being expressly granted to sell the Authority's interest in the Sites and the Facilities at public
auction and convey the same to the purchaser in fee simple (subject to the Ground Lease), out of the
proceeds arising from such sale, to pay the Bonds secured hereby, with interest, and all legal costs
and charges of such foreclosure and the maximum attorneys' fees permitted by law, wruch costs,
charges and fees the Authority agrees to pay.
The Trustee shall have and may exercise with respect to all personal propeliy and fixtures
wruch are pm1 of the Facilities, all the rights and remedies accorded upon default to a secured party
under the Uniform Commercial Code as in effect in the State. If notice to the Authority of the
intended disposition of such property is required by law in a pm1icular instance such notice shall be
deemed commercially reasonable if given to the Authority at least 10 calendar days prior to the date
of intended disposition.
Notwithstanding anytrung to the contrary in this Indenture, upon foreclosure and satisfaction
of the mortgage given to the Trustee under this Indenture, all other provisions of the Indenture
remain in effect and the Bonds remain Outstanding, except upon compliance with the requirements
for discharge of the Indenture under Article X hereof.
Section 7.04. Appointment of Receivers. Upon the occurrence of an Event of Default, and
upon the filing of a suit or other commencement of judicial proceedings to enforce the rights of the
Trustee and the Owoers of Bonds under this Indenture, the TlUstee shall be entitled, as a matter of
right, to the appointment of a receiver or receivers of the Tmst Estate and of the revenues, issues,
payments and profits thereof, pending such proceedings, with such powers as the cou11 making such
appointment shall confer.
Section 7.05. Application of Money. All money received by the TlUstee pursuant to any
right given or action taken under the provisions of trus Indenture, the Lease or the Ground Lease
shall, after payment of the cost and expenses of the proceedings resulting in the collection of such
money and of the expenses, liabilities and advances incurred or made by the Trustee (including, but
not limited to, fees and expenses incurred to date by the Trustee and wruch m'e unpaid), be deposited
in the Bond Fund, and all money then held hereunder, including but not limited to money in the
Bond Fund and the Reserve Fund, shall be applied as follows:
33
(a) Unless the principal of all the Bonds shall have become or shall have been
declared due and payable, all such money shall be applied:
FIRST:
SECOND:
To the payment to the persons entitled thereto of all installments of
interest then due on the Bonds, in the order of the maturity of the
installments of such interest, and, if the amount available shall not be
sufficient to pay in full any particular installment, then to the
payment ratably, according to the amounts due on such installment,
to the persons entitled thereto, without any discrimination or
privilege; and
To the payment to the persons entitled thereto of the unpaid principal
of any of the Bonds which shall have become due (other than Bonds
called for redemption for the payment of which money is held
pursuant to the provisions of this Indenture), in the order of their due
dates, and, if the amount available shall not be sufficient to pay in
full the Bonds due on any patticular date, then to the payment
ratably, according to the amount of principal due on such date, to the
persons entitled thereto without any discrimination or privilege.
(b) If the principal of all the Bonds shall have become due or shall have been
declared due and payable, all such money shall be applied to the payment of the principal
and interest then due and unpaid upon the Bonds, without preference or priority of principal
over interest or of interest over principal, or of any installment of interest over any other
installment of interest, or of any Bond over any other Bond, ratably, according to the
amounts due respectively for principal and interest, to the persons entitled thereto without
any discrimination or privilege.
( c) If the principal of all the Bonds shall have been declared due and payable,
and if such declaration shall thereafter have been rescinded and annulled under the
provisions of this Article, then, subject to the provisions of paragraph (b) of this Section in
the event that the principal of all the Bonds shall later become due or be declared due and
payable, the money shall be applied in accordance with the provisions of paragraph (a) of
this Section.
Whenever money is to be applied by the Trustee pursuant to the provisions of tlllS Section,
such money shall be applied by it at such times, and from time to time, as the Tmstee shall
determine, having due regat'd to the amount of such money available for application and the
likelihood of additional money becoming available for such application in the future. Whenever the
Tmstee shall apply such funds, it shall fix the date (which shall be an interest payment date unless it
shall deem another date more suitable) upon which such application is to be made and upon such
date interest on the amounts of principal to be paid on such dates shall cease to accrue. The Trustee
shall give such notice as it may deem appropriate of the deposit with it of any such money and of
the fixing of any such date, and shall not be required to make payment to the Owner of any unpaid
34
Bond until such Bond shall be presented to the Trustee for appropriate endorsement 01' for
cancellation if fully paid.
Whenever all Bonds and interest thereon have been paid under the provisions of this Section
and all expenses and charges of the Trustee and the Authority have been paid, any balance
remaining shall be paid to the persons entitled to receive the same; if no other person shall be
entitled thereto, then the balance shall be paid to the City.
Section 7.06. Right of Trustee to Act Without Possession of Bonds. All rights of action
(including the right to file proof of claim) under this Indenture, the Lease, the Ground Lease, 01' the
Bond Resolution, 01' under any of the Bonds, may be enforced by the Trustee without the possession
of any of the Bonds 01' the production thereof in any trial 01' other proceeding relating thereto, and
any such suit 01' proceeding instituted by the Trustee shall be brought in its name as Trustee, without
the necessity of joining as plaintiffs 01' defendants any Owners of the Bonds hereby secured, and any
recovery of judgment shall be for the equal benefit of the Owners of the Outstanding Bonds, subject
to the provisions of Section 6.02 hereof with respect to extended Bonds and claims for interest.
Section 7.07. Power of Maiority of Owners. Anything in this Indenture to the contrary
notwithstanding, the Owners of a majority in aggregate principal amount of Bonds Outstanding
hereunder shall have the right, at any time, by an instrument 01' instruments in writing executed and
delivered to the Trustee, to direct the method and place of conducting all proceedings to be taken
under this Indenture, the Lease, the Ground Lease, and the Bond Resolution; provided that such
direction shall not be othelwise than in accordance with the provisions of applicable law and that the
Trustee shall be indemnified as provided in Section 8.06.
Section 7.08. Limitation on Suits by Owners. No Owner of any Bond shall have any right
to institute any suit, action 01' proceeding at law 01' in equity for the enforcement of this Indenture, 01'
for the execution of any trust hereof 01' for any other remedy hereunder, unless a Default has
occun'ed of which the Trustee has been notified 01' of which it is deemed to have notice; nor unless
also such Default shall have become an Event of Default and the Owners of twenty-five percent
(25%) in aggregate principal amount of Bonds Outstanding hereunder shall have made written
request to the Trustee and shall have offered it reasonable oppOltunity either to proceed to exercise
the powers granted herein 01' to institute such action, suit or proceeding in its own name; nor unless
also they shall have offered to the Trustee indemnity as provided in Section 8.06; and such
notification, request and offer of indemnity are hereby declared in every such case at the option of
the Trustee to be conditions precedent to the execution of the powers and trusts of this Indenture,
and to any action or cause of action for enforcement 01' for any other remedy hereunder; it being
understood and intended that no one 01' more Owners of the Bonds shall have any right in any
manner whatsoever to affect, disturb, 01' prejudice the lien of this Indenture by their action or to
enforce any right hereunder except in the manner herein provided, and that all proceedings at law 01'
in equity shall be instituted, had and maintained in the manner herein provided and for the equal
benefit of the Owners of all Bonds Outstanding hereunder. Nothing in this Indenture shall,
however, affect 01' impair the right of any Owner, which is absolute and unconditional, to enforce
and bring suit for tlle payment of the principal of and interest on any Bond at and after the maturity
thereof 01' the obligations of the Authority to pay from the sources provided herein the principal of
35
and interest on each of the Bonds issued hereunder to the respective Owners thereof at the time and
place in said Bonds expressed, in accordance with the telms ofthe Bonds.
Section 7.09. Waiver bv Owners. The Trustee, upon the written request of the Owners of
not less than a majority in aggregate principal amount of the Bonds at the time Outstanding
hereunder, shall waive any Event of Default hereunder and its consequences, except an Event of
Default in the payment of the principal of the Bonds at the date of maturity specified therein;
provided, however, that an Event of Default in the payment of interest on the Bonds shall not be
waived unless, prior to such waiver, all arrears of interest, and all expenses of the Trustee shall have
been paid or shall have been provided for by deposit with the Trustee of a sum sufficient to pay the
same. In case of any such waiver, the Authority, the Trustee and the Owners of the Bonds shall be
restored to their fonner positions and rights hereunder respectively.
Section 7.10. Remedies Cumulative, Delav Not To Constitute Waiver. No remedy by the
tenns of this Indenture, the Lease, the Ground Lease, or the Bond Resolution confened upon or
reserved to the Trustee (or to the Owners) is intended to be exclusive of any other remedy, but each
and every such remedy shall be cumulative and shall be in addition to any other remedy given
hereunder or now or hereafter existing at law or in equity or by statute.
No delay or omission to exercise any right or power accruing upon any Default or Event of
Default shall impair any such right or power or shall be constmed to be a waiver of any such
Default or Event of Default or acquiescence therein, and evelY such right and power may be
exercised from time to time and as often as may be deemed expedient.
No waiver of any Default or Event of Default hereunder, whether by the Trustee or by the
Owners, shall extend to or shall affect any subsequent Default or Event of Default or shall impair
any rights or remedies consequent thereon.
Section 7.11. Restoration of Rights Upon Discontinuance of Proceedings. In case the
Tmstee or Owners shall have proceeded to enforce any right under this Indenture and such
proceedings shall have been discontinued or abandoned for any reason, or shall have been
determined adversely to the Trustee or Owners, then and in every such case the Authority, the City,
the Trustee and the Owners shall be restored to their fonner positions and rights hereunder with
respect to the TlUSt Estate, and all rights, remedies and powers of the TlUstee or Owners shall
continue as if no such proceedings had been taken.
[Section 7.12. Rights of the Insurer. Notwithstanding anything to the contrarv in this
Indenture, upon the OCCUlTence and continuation of an Event of Default, the Insurer shall be entitled
to control and direct the enforcement of rights granted to Owners or the Trustee for the benefit of
Owners under this Indenture. including without limitation the right to accelerate the principal of the
Bonds.l
36
ARTICLE VIII
Concerning the Trustee
Section 8.01. Acceptance of Trust and Prudent PelfOlmance Thereof. The Trustee, prior to
the OCCUlTence of an Event of Default and after the curing of all such Events of Default as may have
occurred, undertakes to perform such duties and only such duties as are specifically set forth in this
Indenture. During the existence of any Event of Default which has not been cured, the Tmstee shall
exercise such rights and powers, and use the same degree of care and skill in their exercise, as a
plUdent person would exercise or use under the circumstances in the conduct of his or her own
affairs.
The Tmstee shall not be required to take notice or be deemed to have notice of any Default
or Event of Default hereunder except Default in the deposits or payments specified, or failure by the
Authority or the City to file with it any of the documents required or to deposit with it evidence of
the insurance policies required hereunder or under the Lease, unless the Trustee shall be specifically
notified in writing of such Default or Event of Default by the City, by the Authority or by the
Owners of at least twenty-five percent (25%) in aggregate principal amount of Bonds Outstanding
hereunder, and in order to be effective, all notices or other instruments required by this Indenture to
be delivered to the Trustee must be delivered at the office of the TlUstee, and in the absence of such
notice so delivered, the Tmstee may conclusively assume that there is no Default or Event of
Default except as aforesaid.
No provision of this Indenture shall be constlUed to relieve the Tmstee from liability for its
own negligent action, its own negligent failure to act, or its own willful misconduct, except that:
(a) prior to an Event of Default hereunder, and after the curing of all such
Events of Default which may have occurred:
(1) the duties and obligations of the TlUstee shall be determined solely
by the express provisions of this Indenture, and the Tmstee shall not be liable except
for the perfonnance of such duties and obligations as are specifically set forth in this
Indenture, and no implied covenants or obligations shall be read into this Indenture
against the Tmstee; and
(2) in the absence of bad faith on the pmt of the Trustee, the TlUstee may
conclusively rely, as to the tmth of the statements and to the correctness of the
opinions expressed therein, upon any certificate or opinion fumished to the Trustee
conforming to the requirements of this Indenture; but in the case of any such
certificate or opinion which by any provision hereof is specifically required to be
fumished to the TlUstee, the Trustee shall be under a duty to eXaIl1ine the SaIl1e to
detennine whether it conforms to the requirements of this Indenture; and
(b) at all times, regardless of whether or not any Event of Default shall exist:
37
(1) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the TlUstee unless it shall be
proved that the Trustee was negligent in ascel1aining the pertinent facts, and
(2) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Owners of not less than a majority in aggregate principal amount of all the Bonds at
the time Outstanding relating to the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture.
None of the provisions contained in this Indenture shall require the Trustee to expend or risk
its own funds or otherwise incur individual financial liability in the perfOlmance of any of its duties
or in the exercise of any of its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
Section 8.02. Trustee Mav Relv Upon Certain Documents and Opinions. Except as
otherwise provided in Section 8.01,
(a) the Trustee may rely and shall be protected in acting upon any resolution,
certificate, statement, instmment, opinion, report, notice, request, consent, order, bond, or
other paper or document believed by it to be genuine and to have been signed or presented
by the proper pmty or paI1ies;
(b) any request, direction, election, order, cel1ification or demand of either of the
Authority or the City shall be sufficiently evidenced by an instmment signed by an
Authorized Officer of the Authority or the City, as the case may be (unless othelwise in this
Indenture specifically prescribed), and any resolution of the Authority or the City may be
evidenced to the Trustee by a Cel1ified Resolution;
(c) the Tmstee may consult with counsel (who may be counsel for the Authority
or the City) and the opinion of such counsel shall be full and complete authorization and
protection in respect of any action taken or suffered by it hereunder in good faith and in
accordance with the opinion of such counsel; and
(d) whenever, in the administration of the husts of this Indenture, the Tmstee
shall deem it necessary or desirable that a matter be proved or established prior to taking or
suffering any action hereunder, such matter (unless other evidence in respect thereof be
herein specifically prescribed) may, in the absence of negligence or bad faith on tlle pm1 of
the Trustee, be deemed to be conclusively proved and established by a Cel1ificate of the
Authority or the City, and such Certificate shall, in the absence of negligence or bad faith on
the part of the Tmstee, be full warrant to the Trustee for any action taken or suffered by it
under the provisions of this Indenture upon the faith thereof.
38
Section 8.03. Trustee Not Responsible for Indenture Statements, Validity. The Trustee shall
not be responsible for any recital or statement herein, or in the Bonds (except in respect of the
Certificate of the Trustee endorsed on the Bonds), or for the validity of the execution by the
Authority of this Indenture or the validity or execution of the Ground Lease, the Lease or the Bond
Resolution or of any supplemental instrument, or for the sufficiency of the security of the Bonds
issued hereunder or intended to be secured hereby, or for the value or title of any of the Trust Estate,
or othelwise as to the maintenance of the security hereof; and the Trustee shall not be bound to
ascellain or inquire as to the performance or observance of any covenant, condition or agreement on
the pml of the Authority or the City except as herein set fOllh, but the Trustee may require of the
Authority and the City full information and advice as to the perfOlmance of the covenants,
conditions and agreements aforesaid and of the condition of the physical propelly included in the
Trust Estate. The Trustee shall not be accountable for the use of any Bonds authenticated or
delivered hereunder.
Section 8.04. Limits on Duties and Liabilities of Trustee. The pelmissive right of the
Trustee to do things enumerated in tills Indenture shall not be construed as a duty of the Trustee and
the Trustee shall be answerable only for its own negligence or willful default. The Trustee shall not
be required to give any bond or surety in respect of the execution of the said trusts and powers or
otherwise in respect of the premises.
Section 8.05. Money Held in TlUst. Money held by the Trustee hereunder is held in trust
but need not be segregated from other funds except to the extent required by law. The Trustee shall
be under no liability for interest on any money received by it hereunder except as othelwise agreed
with the Authority or the City.
Section 8.06. Obligation of TlUstee. The TlUstee shall be under no obligation to institute
any suit, or to take any proceeding under this Indenture, or to enter any appearance or in any way
defend in any suit in which it may be defendant, or to take any steps in the execution of the tlUStS
hereby created or in the enforcement of any rights and powers hereunder, until it shall have
reasonable grounds to believe that repayment of all costs and expenses, outlays and counsel fees and
other reasonable disbursements in connection therewith and adequate indemnity against all risk and
liability is reasonably assured to it; the TlUstee may, nevellheless, begin suit, or appear in and
defend suit, or do anything else in its judgment proper to be done by it, without assurance of
reimbursement or indemnity, and in such case the Trustee shall be reimbursed for all costs and
expenses, outlays and counsel fees and other reasonable disbursements properly incurred in
connection therewith. If the City shall fail to make such reimbursement, the Trustee may reimburse
itselffrom any money in its possession under the provisions of this Indenture and shall be entitled to
a preference therefor over any ofthe Bonds Outstanding hereunder.
Section 8.07. Notice to Owners, Etc. The Trustee shall give to the Owners of the Bonds
whose nmnes and addresses m'e known to it written notice of all Events of Default known to the
TlUstee by virtue of actual knowledge of a Responsible Officer, within sixty (60) days after the
OCCUlTence of the Event of Default, unless the Event of Default has been cured before the giving of
such notice; provided that, except in the case of Events of Default in the payment of principal of or
interest on any of the Bonds, the TlUstee shall be protected in withholding such notice if and so long
as its board of directors, an executive connnittee or bust committee of directors or the chief
39
executive officer of the Trustee in good faith determines that the withholding of such notice is in the
interest of the Owners; and further provided that no such notice shall be given unless and until any
Default becomes an Event of Default.
The Trustee shall notifY any rating agency then maintaining a rating on the Outstanding
Bonds (i) not less than ten (10) Business Days in advance of the execution of any supplement,
amendment or change to any financing documents; (ii) upon any draw upon the Reserve Fund; (iii)
upon any deficiency in any fund or account held by the Trustee; (iv) upon a direction from the City
to purchase or redeem all or any portion of the Bonds; (v) upon the resignation or petition for
removal of the Trustee or the appointment of a successor Trustee; and (vi) upon any Event of
Default or upon any event, that with notice and/or with the lapse of time, could become an Event of
Default under this Indenture or any other transaction document.
Section 8.08. Intervention in Judicial Proceedings. In any judicial proceeding to which the
Authority or the City is a pmiy and which, in the opinion of the Trustee, based upon an Opinion of
Counsel which shall be reasonably satisfactory to the City, has a substantial bearing on the interests
of the Owners of Bonds issued hereunder, the Trustee may intervene on behalf of Owners and shall
do so if requested in writing by the Owners of at least twenty-five percent (25%) in aggregate
principal amount of Bonds Outstanding hereunder. The rights and obligations of the Trustee under
this Section are subject to the approval ofthe court having jurisdiction in the premises.
Section 8.09. Further Investigation bv Trustee. The resolutions, opinions, Celiificates and
other insuuments provided for in this Indenture may be accepted by the Trustee as conclusive
evidence of the facts and conclusions stated therein and shall be in full warrant, protection and
authority to the Trustee for its actions hereunder; but the Trustee may, in its unrestricted discretion,
and shall, ifrequested in writing so to do by the Owners of not less than twenty-five percent (25%)
in aggregate principal amount of Bonds Outstanding hereunder, cause to be made such independent
investigation as it may see fit, and in that event may decline to release any property, or pay over
cash, or take other action unless satisfied by such investigation of the u'uth and accuracy of the
matters so investigated. The expense of such investigation shall be paid by the City.
Section 8.10. Trustee to Retain Records. The Trustee shall retain all financial statements
furnished by the City in accordance with this Indenture or the Lease so long as any of the Bonds
shall be Outstanding.
Section 8.11. Compensation of Trustee. All advances, counsel fees and other expenses
reasonably made or incuned by the Trustee in and about the execution of the trust hereby created
and reasonable compensation to the Trustee for its services in the premises shall be paid by the City.
The compensation of the Trustee shall not be limited to or by any provision of law in regard to the
compensation of trustees of an express uust. If not paid by the City, the Trustee shall have a first
lien, with right of payment prior to payment on account of interest on or principal of any Bond
issued hereunder, for reasonable compensation, expenses, advances and counsel fees incuned in and
about the execution of the trusts hereby created and the exercise and performance of the powers and
duties of the Trustee hereunder and for the cost and expense incurred in defending against any
liability in the premises of any character whatsoever (unless such liability is adjudicated to have
resulted from the negligence 01' willful default of the Trustee).
40
Section 8.12. Tmstee May Hold Bonds. The Trustee and its officers and directors may
acquire and own, or become the pledgee of, Bonds and otherwise deal with the Authority or the City
in the same manner and to the same extent and with like effect as though it were not Trustee
hereunder.
Section 8.13. Aooointment of TlUstee. There shall at all times be a tmstee hereunder which
shall be an association or a corporation organized and doing business under the laws of the United
States or any State thereof, authorized under such laws to exercise corporate trust powers, having a
combined capital, surplus and undivided profits of at least Ten Million Dollars ($10,000,000), and
subject to supervision or examination by Federal or State authority. If such association or
corporation publishes reports of condition at least annually, pursuant to law or to the requirements
of any supervising or examining authority above refened to, then for the purposes of this Section
the combined capital, surplus and undivided profits of such corporation shall be deemed to be its
combined capital as set forth in its most recent repOlt of condition so published. In case at any time
the Trustee shall cease to be eligible in accordance with the provisions of this Section, and another
association or corporation is eligible, the Trustee shall resign immediately in the manner and with
the effect specified in Section 8.16 hereof.
Section 8.14. Merger of Ttustee. Any corporation or national banking association into
which the Trustee or substantially all of its corporate trust business may be converted or merged, or
with which it may be consolidated, or to which it may sell or transfer its tmst business and assets as
a whole or substantially as a whole, or any corporation or national banking association resulting
from any such conversion, sale, merger, consolidation or transfer to which it is a pmty, ipso facto,
shall be and become successor tmstee hereunder and vested with all of the title to the Tmst Estate
and all the tmsts, powers, discretions, immunities, privileges and all other matters as was its
predecessor, without the execution or filing of any instlUment or any further act, deed or
conveyance on the pmt of any of the pmties hereto, anything herein to the contrary notwithstanding.
Section 8.15. Resignation or Removal of Tmstee. The TlUstee may resign and be
discharged from the tlUSts created by this Indenture by giving to the City thirty (30) days' notice in
writing, and to the Owners notice by first class mail at their addresses as set fOlth on the registration
books, of such resignation, specifying a date when such resignation shall take effect. Such
resignation shall take effect no earlier than the date on which a successor trustee shall have been
appointed as hereinafter provided.
Any Trustee hereunder may be removed at any time by an instrument or instluments in
writing, appointing a successor to the Trustee so removed, filed with the TlUstee and executed by
either (i) the Authority and the City, or (ii) the Owners of a majority in principal amount of the
Bonds hereby secured and then Outstanding.
No resignation or removal of the TlUstee or any successor shall be effective until a successor
TlUstee shall have been appointed and such pmty shall have accepted the duties of TlUstee
hereunder.
41
Section 8.16. Appointment of Successor Trustee. In case at any time the Trustee shall
resign or shall be removed or otherwise shall become incapable of acting, or shall be adjudged a
bankrupt or insolvent, or if a receiver of the Trustee or of its property shall be appointed, or if a
public supervisory office shall take charge or control of the Trustee or of its property or affairs, a
vacancy shall fOlthwith be created in the office of such Trustee hereunder, and a successor may be
appointed by either (i) the Authority and the City or (ii) the Owners of a majority in principal
amount of the Bonds hereby secured and then Outstanding, by an instrument or instruments in
writing filed with the Trustee and executed by the Authority and the City or by such Owners, as
applicable, notification thereof being given to the City, but in the event the Trustee has been
removed by action of the Owners, until a new Trustee shall be appointed by the Owners as herein
authorized, the Authority may, subject to the provisions hereof, appoint a Trustee to fill such
vacancy. After any appointment by the Authority, the Trustee so appointed shall cause notice of its
appointment to be mailed within thirty (30) days after such appointment to the registered Owners of
the Bonds, but any new Trustee appointed by the Authority shall immediately and without further
act be superseded by a Trustee appointed in the manner above provided by the Owners of a majority
in principal amount of the Bonds whenever such appointment by the Owners shall be made.
If, in a proper case, no appointment of a successor Trustee shall be made pursuant to the
foregoing provisions ofthis Section within six (6) months after a vacancy shall have occurred in the
office of Trustee, the Owner of any Bond hereby secured or any retiring Trustee may apply to any
court of competent jurisdiction to appoint a successor Trustee. Said comt may thereupon, after such
notice, if any, as such comt may deem proper and prescribe, appoint a successor Trustee.
Section 8.17. Transfer of Rights and Propertv to Successor Trustee. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to
the Authority and the City an instrument in writing accepting such appointment hereunder, and
thereupon such successor, without any further act, deed or conveyance, shall become fully vested
with all the estates, propelties, rights, powers, trusts, duties and obligations of its predecessor; but
such predecessor shall, neveltheless, on the written request of the Authority or of its successor
Trustee execute and deliver an instrument transferring to such successor all the estate, propelties,
rights, powers and trusts of such predecessor hereunder, and every predecessor Trustee shall deliver
all securities and money held by it as Trustee hereunder to its successor. Should any assignment,
conveyance or instrument in writing from the Authority be required by any successor Trustee for
more fully and celtainly vesting in such successor Trustee the estates, rights, powers and duties
hereby vested or intended to be vested in the predecessor Trustee, any and all such assignments,
conveyances and instruments in writing shall, on request, be executed, acknowledged and delivered
by the Authority. The resignation of any Trustee and the instrument or instrmnents removing any
Trustee and appointing a successor hereunder, together with all assignments, conveyances and other
insttuments provided for in this Atticle shall, at the expense of the City, be fOlthwith filed and/or
recorded by the successor Trustee in each recording office where this Indenture shall have been
filed and/or recorded.
Section 8.18. Appointment of Successor or Alternate Paving Agents. In the event the initial
Trustee shall also have been appointed paying agent for any Bonds, a successor Trustee shall
become successor paying agent with respect to such Bonds unless otherwise provided in the
instt.ument appointing such successor Trustee. If any paying agent other than the initial Trustee
42
shall resign or become incapable of acting, or shall be removed under a supplemental indenture
entered into pursuant to the terms hereof, the Tmstee may appoint a successor paying agent which is
a bank or trust company qualified to act as paying agent under the Act and which is willing to
accept the office on reasonable and customary tenus approved by an Authorized Officer ofthe City.
The Trustee may appoint successor paying agents. "Paying agent" as used in this Section refers to
the bank or bust company named in the form of Bond provided for the Bonds in the recitals hereof,
where principal of and interest on Bonds may be paid.
(The remainder of this page is intentionally left blank.)
43
ARTICLE IX
Concerning thc Owners
Section 9.01. Execution ofInstruments bv Owners. Any request, direction, consent or other
instrument in writing required by this Indenture to be signed or executed by Owners may be in any
number of concurrent instruments of similar tenor and may be signed or executed by such Owners
in person or by agent duly appointed by an instrument in writing. Proof of the execution of any
such instrument and of the ownership of Bonds shall be sufficient for any purpose of this Indenture
and shall be conclusive in favor of the Trustee with regard to any action taken by it under such
instrument if made in the following mauner:
(a) The fact and date of the execution by any person of any such instrument may
be proved by the certificate of any officer in any jurisdiction who, by the laws thereof, has
power to take acknowledgments of deeds to be recorded within such jurisdiction, to the
effect that the person signing such instrument acknowledged the execution thereof, or by an
affidavit of a witness to such execution.
(b) The ownership of Bonds shall be proved by the registration records kept
under the provisions of this Indenture.
Nothing contained in this Article shall be construed as limiting the Trustee to the proof
above specified, it being intended that the Trustee may accept any other evidence of the matters
herein stated which to it may seem sufficient.
Section 9.02. Waiver of Notice. Any notice or other communication required by this
Indenture to be given by delivery, publication or othelwise to the Owners or anyone or more
thereof may be waived, at any time before such notice or communication is so required to be given,
by a writing mailed or delivered to the Trustee by the Owner or Owners of all of the Bonds entitled
to such notice or communication.
Section 9.03. Determination of Owner ConCUlTence. In detelmining whether the Owners of
the requisite aggregate principal amount of Bonds have conculTed in any demand, request, direction,
consent or waiver under this Indenture, Bonds which are owned by the Authority or the City shall
be disregarded and deemed not to be Outstanding for the purpose of any such detennination,
provided that for the purpose of determining whether the Trustee shall be protected in relying on
any such demand, request, direction, consent or waiver only Bonds which the Trustee knows to be
so owned shall be disregarded. Bonds so owned which have been pledged in good faith may be
regarded as Outstanding for the purposes of this Section if the pledgee establishes to the satisfaction
of the Trustee the pledgee's right to vote such Bonds and that the pledgee is not a person directly or
indirectly controlling or controlled by or under common control with the Authority or the City. In
case of a dispute as to such right, any decision by the Trustee taken upon the advice of counsel shall
be full protection to the Trustee.
44
Section 9.04. Owners' Meeting. A meeting of the Owners may be called at any time and
from time to time for any of the following purposes:
(1) to give any notice to the Authority or to the Trustee, or to give any
direction to the Trustee, or to make any request of the Trustee, or to consent to the
waiving of any default hereunder and its consequences, or to take any other action
authorized to be taken by Owners pursuant to any of the provisions of Article VlI
hereof;
(2) to remove the Trustee or appoint a successor Trustee pursuant to the
provisions of Article VIlI hereof;
(3) subject to At1icle XI hereof, to consent to the execution of an
indenture or indentures supplemental hereto;
(4) subject to Article XlI hereof, to consent to any amendment of the
Lease or the Ground Lease or to any instrument supplemental thereto; or
(5) to take any other action authorized to be taken by or on behalf of the
Owners of any percentage of the Outstanding Bonds under any other provisions of
this Indenture or under applicable law.
Any Owners' meeting may be called and held as follows:
(a) A meeting of Owners may be held at such place within the city where the
Trustee has its principal office as the Trustee or, in case of its failure to act, the Authority or
Owners calling the meeting shall prescribe.
(b) Notice of every meeting of Owners, setting f0l1h the time and place of such
meeting and in general terms the action proposed to be taken at such meeting, shall be
mailed, postage prepaid, to each Owner of Bonds and to the City. Any failure of the Trustee
to mail such notice, or any defect therein shall not, however, in any way impair or affect the
validity of any such meeting.
(c) In case at any time the Authority or the City, pursuant to a Certified
Resolution, or the Owners of at least ten percent (10%) in aggregate principal amount of the
Bonds then Outstanding, shall have requested the Trustee to call a meeting of the Owners,
by written request setting f0l1h in reasonable detail the action proposed to be taken at the
meeting, and the Trustee shall not have given notice of such meeting within 20 days after
receipt of such request, then the Authority or the Owners of Bonds in the amount above
specified may call such meeting to take any action authorized in this Section by giving
notice thereof as provided in paragraph (b) of this Section.
(d) Only an Owner of one or more Bonds or a person appointed as proxy by an
instmment in writing of such Owner shall be entitled to vote at or to pm1icipate with their
counsel and the representatives of the Trustee, the City or the Authority in such meeting.
45
Each Owner shall be entitled to one vote for each $5,000 in principal amount of Outstanding
Bonds held.
(e) The Trustee or, in case of its failure to act, the Authority, the City or Owners
calling or requesting the meeting, may make such reasonable regulations as it may deem
advisable for any meeting of Owners in regard to proof of the holding of Bonds and of the
appointment of proxies and in regard to the appointment and duties of inspectors of votes,
the submission and exan1ination of proxies, certificates and other evidence of the right to
vote, and such other matters concerning the conduct of the meeting as it shall deem
appropriate.
(f) At any meeting of Owners, the presence of persons holding or representing
Bonds in an aggregate principal amount sufficient under the appropriate provision of this
Indenture to take action upon the business for the transaction of which such meeting was
called shall constitute a quorum. Any meeting of Owners duly called pursuant to this
Section may be adjoumed from time to time by vote of the Owners (or proxies for the
Owners) of a majority of the Bonds represented at the meeting and entitled to vote, whether
or not a quorum shall be present; and the meeting may be held as so adjourned without
frnther notice.
(g) The vote upon any resolution submitted to any meeting of Owners shall be
by written ballots on which shall be subscribed the signatures of the Owners of Bonds or of
their representatives by proxy and the serial nmber or nmbers of the Bonds held or
represented by them. The chair of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who shall make and
file with the secretary of the meeting their verified W1'itten reports in duplicate of all votes
cast at the meeting. A record, at least in duplicate, of the proceedings of each meeting of
Owners shall be prepared by the secretary of the meeting, and there shall be attached to said
record the original repOlts of the inspectors of votes on any vote by ballot taken and
affidavits by one or more persons having knowledge of the facts setting forth a copy of the
notice of the meeting and showing that said notice was mailed as provided in paragraph (b)
hereof. Each copy shall be signed and verified by the affidavits of the chair and secretary of
the meeting and one such copy shall be delivered to the City and the Authority and another
to the TlUstee to be preserved by the Trustee, the latter to have attached thereto the ballots
voted at the meeting. Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 9.05. Revocation bv Owners. At any time prior to (but not after) the evidencing to
the Trustee of the taking of any action by the Owners of the percentage in aggregate principal
amount of the Bonds specified in this Indenture in connection with such action, any Owner of any
such Bond may, by filing written notice with the Trustee at its principal office revoke any consent
given by such Owner or the predecessor Owner of such Bond. Except as aforesaid, any such
consent given by the Owner of any Bond shall be conclusive and binding upon such Owner and
upon all future Owners of such Bond and of any Bond issued in exchange therefor or in lieu thereof,
inespective of whether any notation in regard thereto is made upon such Bond. Any action taken by
the Owners of the percentage in aggregate principal amount of Bonds specified in this Indentrn'e in
46
connection with such action shall be conclusively binding upon the Authority, the City, the Trustee
and the Owners of all the Bonds.
(The remainder ofthis page is intentionally left blank.)
47
ARTICLE X
Payment, Defeasance and Release
Section 10.01. Pavment and Discharge of Indenture. If the City or the Authority, their
successors or assigns, shall:
(a) payor cause to be paid the principal of and premium, if any, and interest on
the Bonds at the time and in the manner stipulated therein and herein, or
(b) provide for the payment of principal and premium, if any, of the Bonds and
interest thereon by depositing with the Trustee at or at any time before maturity amounts
sufficient either in cash or in direct obligations of or obligations fully guaranteed as to
principal and interest by the United States of America, the principal and interest on which
when due and payable (or redeemable at the option of the holder thereof but not at the
option of the issuer thereof) and without consideration of any reinvestment thereof shall be
sufficient, to pay the entire amount due or to become due thereon for principal and premium,
if any, and interest to maturity of all said Bonds Outstanding, or
(c) deliver to the Trustee (1) proof satisfactory to the Trustee that notice of
redemption of all of the Outstanding callable Bonds not sUlTendered or to be surrendered to
it for cancellation has been given or waived as provided in Article III hereof, or that
alTangements satisfactory to the Trustee have been made insuring that such notice will be
given or waived, or (2) a written instrument executed by the Authority and expressed to be
irrevocable, authorizing the Trustee to give such notice for and on behalf of the Authority, or
(3) file with the Trustee a waiver of such notice of redemption signed by the Owners of all
Outstanding callable Bonds, and in any such case, deposit with the Trustee before the date
on which such Bonds are to be redeemed, as provided in said Atticle III, the entire amount
of the redemption price, including accrued interest and premium, if any, either in cash or
direct obligations of or obligations fully guaranteed as to principal and interest by the United
States of America and described below (which do not permit the prior redemption thereof at
the option of the issuer) in such aggregate face amount, bearing interest at such rates and
maturing at such dates as shall be sufficient to provide for the payment of such redemption
price on the date such Bonds are to be redeemed and on such prior dates when principal of
and interest on the Outstanding Bonds is due and payable,
and surrender to the Trustee for cancellation all Bonds for which payment is not so provided, and
shall also pay all other sums due and payable hereunder by the Authority or the City r (including anv
amounts owing to the Insurer under the Financial Guarantv Agreement)], provided that if Bonds are
to be defeased under either paragraph (b) or (c) above, an Opinion of Bond Counsel is rendered to
the Trustee to the effect that the tax-exempt status of interest on the Bonds will not be impaired
thereby, then and in that case, all the Trust Estate shall revert to the Authority and the City as their
interests may appear, and the entire estate, right, title and interest of the Trustee and ofthe registered
Owners of the Bonds in respect thereof shall thereupon cease, detelmine and become void; and the
Trustee in such case, upon the cancellation of all Bonds for the payment of which cash or securities
48
shall not have been deposited in accordance with the provisions ofthis Indenture, shall, upon receipt
of a written request of the Authority and of a Certificate of the Authority and an Opinion of Counsel
as to compliance with conditions precedent, and at the City's cost and expense, execute to the
Authority, or its order, proper insuuments acknowledging satisfaction of this Indenture and
surrender to the Authority and the City, as their interests appear, all cash and deposited securities, if
any (other than cash or securities for the payment of the Bonds and interest thereon), which shall
then be held hereunder as a pmt of the Trust Estate.
The invesunents for a defeasance must consist solely of one or more of the following: (i)
cash; (ii) State and Local Government Series issued by the United States Treasmy ("SLGs"); (ili)
United States Treasmy bills, notes and bonds, as u'aded on the open market; (iv) Zero Coupon
United States Treasury Bonds; and (v) Refcorp Interest Su'ips (stripped by the Federal Reserve
Bank of New York).
Nothing contained in this Section 10.01 shall be construed to prohibit the defeasance of one
or more, but not all, series of Bonds by any of the methods set fOlth in clause (a), (b) or (c) above, as
the SaIne would apply to the pmticular series of Bonds being discharged.
Section 10.02. Bonds Deemed Not Outstanding After Deposits. When there shall have
been deposited at any time with the Trustee in trust for the pm})ose, cash or direct obligations of or
obligations fully guaranteed by the United States of America the principal and interest on which
shall be sufficient to pay the principal of any Bonds (and premium, if any) when the SaIne become
due, either at maturity or otherwise, or at the date fixed for the redemption thereof, and to pay all
interest with respect thereto at the due dates for such interest to maturity or to the date fixed for
redemption, for the use and benefit of the Owners thereof, then upon such deposit all such Bonds
shall cease to be entitled to any lien, benefit or security of this Indenture except the right to receive
the funds so deposited, and such Bonds shall be deemed not to be Outstanding hereunder; and it
shall be the duty of the Trustee to hold the cash and securities so deposited for the benefit of the
Owners of such Bonds, and from and after such date, redemption date or maturity, interest on such
Bonds called for redemption shall cease to accrue.
Section 10.03. Unclaimed Monev To Be Retutned. Any money deposited with the Trustee
pursuant to the telms of this Indenture, for the payment or redemption of Bonds and remaining
unclaimed by the Owners of such Bonds on the date fixed for redemption of the same, as the case
may be, for a period of three (3) years after the due date, shall, upon the written request of the City,
mld if the Authority or any successor to the obligations of the Authority under this Indenture and the
Bonds shall not at the time, to the knowledge of the Trustee, be in default with respect to any of the
terms and conditions contained in this Indenture or in such Bonds, be paid to the City, and such
Owners of the Bonds shall thereafter look only to the City for payment and then only to the extent
of the aInounts so received without interest thereon; PROVIDED, HOWEVER, that within thirty
(30) days prior to the expiration of the three (3) year period mentioned above, the Trustee, before
being required to make any such repayment, may, at the expense of the City cause to be published
in a Financial Journal, a notice that after a date named therein said money will be retmued to the
City. If the City does not request that the money be returned to the City, the Trustee shall pay the
money over to the State of Minnesota in accordance with applicable law.
49
[Section 10.04. Payment by Insurer. Notwithstanding anything to the contraty herein. if the
principal and/or interest due on the Bonds is paid by the Insurer. the Bonds shall remain
Outstanding for all PU11)OSeS, not be defeased or othelwise satisfied and not be considered paid by
the Authority, and the assignment and pledge of the Tmst Estate and all coyenants. agreements and
other obligations of the Authority to the Owners shall continue to exist and shalllun to the benefit
of the Insurer. and the Insurer shall be subrogated to the rights of such Owners.l
(The remainder of this page is intentionally left blank.)
50
ARTICLE XI
Supplemental Indentures
Section 11.01. Purposes for Which Supplemental Indentures mav be Executed. The
Authority, upon resolution, and the Trustee from time to time and at any time, subject to the
conditions and restrictions contained in this Indenture, may enter into such indentures supplemental
hereto as mayor shall by them be deemed necessary or desirable, without the consent of any
Owner, for anyone or more of the following pm"poses:
(a) To correct the description of any property hereby pledged or intended so to
be, or to assign, convey, pledge or transfer and set over to the Trustee, subject to such liens
or other encumbrances as shall be therein specifically described, additional propeliy or
propeliies of the Authority or the City for the equal and propOliional benefit and security of
the Owners of all Bonds at any time issued and Outstanding under this Indenture, subject,
however, to the provisions hereinabove set forth with respect to extended Bonds;
(b) To add to the covenants and agreements of the Authority in this Indenture
other covenants and agreements thereafter to be observed, or to surrender any right or power
reserved to or confened upon the Authority or to or upon any successor;
(c) To evidence the succession or successive successions of any other
department, agency, body or cOl"poration to the Authority and the assumption by such
successor of the covenants, agreements and obligations of the predecessor Authority in the
Bonds hereby secured and in this Indenture and in any and evelY supplemental indenture
contained or the succession, removal or appointment of any trustee or paying agent
hereunder;
(d) To cure any ambiguity or to conect or supplement any provision contained
herein or in any supplemental indentures which may be defective or inconsistent with any
other provision contained herein or in any supplemental indenture, or to make such other
provisions in regard to matters or questions arising under this Indenture or any supplemental
indenture as the Authority may deem neceSSalY or desirable and which shall not be
inconsistent with the provisions of this Indenture or any supplemental indenture and which
shall not impair the security of the same;
(e) To modify, eliminate and/or add to the provisions of this Indenture to such
extent as shall be necessary to effect the qualification of this Indenture under the Trust
Indenture Act of 1939, as then amended, or under allY similar federal statute hereafter
enacted, and to add to this Indenture such other provisions as may be expressly pelmitted by
the Trust Indenture Act of 1939, excluding, however, the provisions referred to in Section
316(a)(2) of the Trust Indenture Act of 1939; and
(f) To provide for the creation of any series of Additional Bonds, as provided in,
and subject to the conditions and requirements of, Sections 2.09 through 2.12 hereof.
51
Section 11.02. Execution of Supplemental Indenture. The Tmstee is authorized to join with
the Authority in the execution of any such supplemental indenture, to make the fmther agreements
and stipulations which may be therein contained, and to accept the conveyance, transfer and
assignment of any propelty thereunder, but the Trustee shall not be obligated to enter into any such
supplemental indenture which affects its rights, duties or immunities under this Indenture.
Section 11.03. Discretion of Trustee. In each and evelY case provided for in this Atticle
(other than a supplemental indenture approved by the Owners of a majority in aggregate principal
amount of the Bonds pursuant to Section 11.04 hereof), the Trustee shall be entitled to exercise its
umesh'icted discretion in determining whether or not any proposed supplemental indenture or any
term or provisions therein contained is necessary or desirable, having in view the needs of the
Authority and the respective rights and interests of the Owners of Bonds theretofore issued
hereunder; and the Trustee shall be under no responsibility or liability to the Authority or to the City
or to any Owner of any such Bond, or to anyone whatever, for any act or thing which it may do or
decline to do in good faith subject to the provisions of this Atticle, in the exercise of such discretion.
Section 11.04. Modification of Indenture with Consent of Owners. Subject to the tenns and
provisions contained in this Section, the Owners of not less than a majority in aggregate principal
amount of the Bonds then Outstanding shall have the right, from time to time, to consent to and
approve the execution by the Authority and the Trustee of such indenture or indentures
supplemental hereto as shall be deemed necessary or desirable by the Authority for the purpose of
modifying, altering, amending, adding to or rescinding in any pmticular, any of the terms or
provisions contained in this Indenture or in any supplemental indenture; PROVIDED, HOWEVER,
that nothing herein contained shall pelmit or be construed as permitting, without the consent of the
Owners of all Outstanding Bonds, (a) an extension of the maturity of any Bond issued hereunder, or
(b) a reduction in the principal amount of any Bond or the redemption premium or the rate of
interest thereon, or (c) the creation of a lien upon or a pledge of revenues ranking prior to or on a
parity with the lien or pledge created by this Indenture, or (d) a preference or priority of any Bond or
Bonds over any others, or (e) a reduction in the aggregate principal amount of the Bonds required to
consent to supplemental indentures or amendments to the Lease or the Ground Lease or (f) a
reduction in the aggregate principal amount of the Bonds required to waive an Event of Default.
Whenever the Authority shall deliver to the Trustee a resolution of Owners adopted at an
Owners' meeting approved by, or an instrUl1lent or instruments put'pOlting to be executed by, the
Owners of not less than a majority in aggregate principal amount of the Bonds then Outstanding,
which resolution or instt'Ulnent or instrmllents shall refer to the proposed supplemental indenture
and shall specifically consent to and approve the execution thereof, the Authority and the Trustee
may execute such supplemental indenture without liability or responsibility to any Owner of any
Bond, whether or not such Owner shall have consented thereto.
If the Owners of not less than a majority in aggregate principal amount of the Bonds
Outstanding at the time of the execution of such supplemental indenture shall have consented to and
approved the execution thereof as herein provided, no Owner of any Bond shall have any right to
object to the execution of such supplemental indenture, or to object to any of the terms and
provisions contained therein or the operation thereof, or in any manner to question the propriety of
52
the execution thereof, or to enjoin or restrain the TlUstee or the Authority from executing the same
or from taking any action pursuant to the provisions thereof.
Section 11.05. Supplemental Indentures to be Palt of Indenture. Any supplemental
indenture executed in accordance with any of the provisions of this Alticle shall thereafter fmm a
part of this Indenture; and all the tetms and conditions contained in any such supplemental indenture
as to any provisions authorized to be contained therein shall be and be deemed to be palt of the
terms and conditions ofthis Indenture for any and all purposes, and the respective rights, duties and
obligations under this Indenture of the Authority, the TlUstee and all Owners of Bonds then
Outstanding shall thereafter be detetmined, exercised and enforced hereunder, subject in all respects
to such modifications and amendments. If deemed necessary or desirable by the TlUstee, reference
to any such supplemental indenture or any of such terms or conditions thereof may be set forth in a
reasonable and customary manner in the text of the Bonds or in a legend stamped on the Bonds.
Section 11.06. Rights of Citv Unaffected. Anything herein to the contrary notwithstanding,
a supplemental indenture under this Alticle XI which adversely affects the rights of the City under
the Lease, the Ground Lease or this Indenture, so long as the Lease, the Ground Lease and this
Indenture are in effect, shall not become effective unless and until the City shall have consented to
the execution and delivety of such supplemental indenture. The TlUstee shall cause notice of the
proposed execution and delivery of any such supplemental indenture (to the execution and delivery
of which the City has not already consented), together with a copy of the proposed supplemental
indenture, to be mailed to the City at least thirty (30) days prior to the proposed date of execution
and delivety of any such supplemental indenture.
[Section 11.07. Insurer's Consent. Anv amendments to the Indenture that require consent
of Owners shall also require consent of the Insurer. The Insurer must receive prior written notice of
anv anlendments that require the Insurer's consent. and must receive written notice of all other
amendments.l
(The remainder ofthis page is intentionally left blank.)
53
ARTICLE XII
Amendments to the Lease and the Ground Lease
Section 12.01. Amendments to the Lease and the Ground Lease Not Requiring Consent of
Owners. The Authority, the City and the Tmstee shall, without the consent of or notice to the
Owners, consent to any amendment, change or modification of the Lease or the Ground Lease as
may be required (i) by the provisions of the Lease, the Ground Lease, or this Indenture, (ii) for the
purpose of curing any anlbiguity or formal defect or omission, (iii) in connection with the issuance
of Additional Bonds as provided herein, or (iv) in connection with any other change in the Lease or
the Ground Lease which, in the judgment of the Trustee, is not to the prejudice of the Tmstee or the
Owners of the Bonds.
Section 12.02. Amendments to the Lease and the Ground Lease Requiring Consent of
Owners. Except for amendments, changes or modifications as provided in Section 12.01 hereof,
neither the Authority, nor the City nor the Tmstee shall consent to any other amendment, change or
modification of the Lease or the Ground Lease without the written approval or consent of the
Owners of not less than a majority in aggregate principal amount of the Bonds at the time
Outstanding given and procured as in this Section provided; provided, however, that no such
amendment, change or modification shall ever affect the obligation of the City to make Lease
Payments as they become due and payable. If the Owners of not less than a majority in aggregate
principal amount of the Bonds Outstanding hereunder at the time of the execution of any such
amendment, change or modification shall have consented to and approved the execution thereof as
herein provided, no Owner of any Bond shall have any right to object to any of the telms and
provisions contained therein, or in the operation thereof, or in any matmer to question the propriety
of the execution thereof, or to enjoin or restrain the Tmstee, the Authority or the City from
executing the same or ii.om taking any action pursuant to the provisions thereof.
Section 12.03. Rights of Authoritv. The Authority has no duty or obligation to consent to
any proposed amendment to the Lease or the Ground Lease and may, at the expense of the City,
request and receive an opinion of such counsel as the Authority may select in connection with any
matter relating to a proposed amendment.
[Section 12.04. Insurer's Consent. Any amendments to the Lease or Ground Lease that
require consent of Owners shall also require consent of the Insurer. The Insurer must receive prior
written notice of any amendments that require the Insurer's consent. and must receive written notice
of all other amendments.l
(The remainder of this page is intentionally left blank.)
54
ARTICLE XIII
Miscellaneous
Section 13.01. Covenants of Authority Bind Successors and Assigns. All the covenants,
stipulations, promises and agreements in this Indenture contained by or in behalf of the Authority,
shall bind and inure to the benefit of its successors and assigns, whether so expressed or not.
Section 13.02. Immunitv of Officers. No recourse for the payment of any part of the
principal of or interest on any Bond or for the satisfaction of any liability arising fi'om, founded
upon or existing by reason of the issue, purchase or ownership of the Bonds shall be had against any
officer, member or agent of the Authority or the State of Minnesota, as such, all such liability being
hereby expressly released and waived as a condition of and as a part of the consideration for the
execution of this Indenture and the issuance ofthe Bonds.
Section 13.03. No Benefits to Outside Parties. Nothing in this Indenture, express or
implied, is intended or shall be construed to confer upon or to give to any person or corporation,
other than the City, the parties hereto and the Owners of the Bonds issued hereunder, any right,
remedy or claim under or by reason of this Indenture or any covenant, condition or stipulation
thereof; and the covenants, stipulations and agreements in this Indenture are and shall be for the sole
and exclusive benefit of the City, the parties hereto, their successors and assigns, and the Owners of
the Bonds.
Section 13.04. Separability of Indenture Provisions. In case anyone or more of the
provisions contained in this Indenture or in the Bonds shall for any reason be held to be invalid,
illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect
any other provisions of this Indenture, but this Indenture shall be construed as if such invalid or
illegal or unenforceable provision had never been contained herein.
Section 13.05. Execution of Indenture in Counterpmts. This Indenture may be
simultaneously executed in several counterpatts, each of which, when so executed, shall be deemed
to be an original, and such counterpmts shall together constitute one and the same instrument.
Section 13.06. Headings Not Controlling. The headings of the several Atticles and Sections
hereof are insetted for the convenience of reference only and shall not control or affect the meaning
or construction of any of the provisions hereof.
Section 13.07. Notices. etc.. to Trustee. Authority. Citv. Original Purchaser and Insurer.
Any request, demand, authorization, direction, notice, consent of Owners or other document
provided or pennitted by this Indenture shall be sufficient for any purpose under this Indenture, the
Lease or the Ground Lease, when hand delivered or mailed by first class mail, postage prepaid
(except as otherwise provided in this Indenture) (with a copy to the other parties) at the following
addresses (or such other address as may be provided by any pm"ty by notice) and shall be deemed to
be effective upon receipt:
55
To the Authority:
Columbia Heights Economic Development Authority
590 40th Avenue NOltheast
Columbia Heights, Minnesota 55421-3878
Attention: Executive Director
To the Trustee:
U.S. Bank National Association
EP-MN-WS3C
60 Livingston Avenue
St. Paul, Minnesota 55107
Attention: Corporate Trust Services
To the City:
City of Columbia Heights
590 40th Avenue NOltheast
Columbia Heights, Minnesota 55421-3878
Attention: City Manager
To the Original
Purchaser:
To the Insurer:
(The remainder of this page is intentionally left blank.)
56
IN WITNESS WHEREOF, the Authority has caused this Indenture to be signed in its name
by its duly authorized officers and U.S. Bank National Association, as Tmstee, to evidence its
acceptance of the trust hereby created, has caused this Indenture to be signed in its name by
authorized officers of the Trustee, all as of the day and year first above written, but actually on the
_ day of September, 2007.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY
By
Gary L. Peterson, President
By
Walter R. Fehst, Executive Director
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of September,
2007 by Gary L. Peterson, the President of the Columbia Heights Economic Development
Authority, a public body corporate and politic and political subdivision under the laws of
Mitmesota, by and on behalf of said authority.
Notary Public
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instmment was acknowledged before me this day of September,
2007 by Walter R. Fehst, the Executive Director of the Columbia Heights Economic
Development Authority, a public body corporate and politic and political subdivision under the
laws of Minnesota, by and on behalf of said authority.
Notary Public
S-l
U.S. BANK NATIONAL ASSOCIATION
as TlUstee
By
Its
STATE OF MINNESOTA
} ss
COUNTY OF RAMSEY
The foregoing instrument was acknowledged before me this day of September,
2007, by the of U.S.
Bank National Association, a national banking association with trust powers, by and on behalf of
said national banking association.
Notary Public
S-2
EXHIBIT A
LEGAL DESCRIPTIONS OF THE SITES
37th Avenue Liquor Store:
Lots 2 and 2A, Block I, Hart Lake Addition, according to the plat thereof on file
in the Office of the Registrar of Titles and the Office of the County Recorder in
and for Anoka County, Minnesota
Lot 2, Block I is registered property
Central Avenue Liquor Store:
Lot 19, Revised Auditor's Subdivision No. 15, according to the plat thereof on
file in the Office of the Registrar of Titles and the Office of the County Recorder
in and for Anoka County, Minnesota
A-I
EXHIBIT B
FORM OF SERIES 2007B BOND
UNITED STATES OF AMERICA
STATE OF MINNESOTA
COUNTY OF ANOKA
CITY OF COLUMBIA HEIGHTS
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
No.R
$
Public Facility Lease Revenue Bond, Series 2007B
(Municipal Liquor Stores Project)
Interest Rate
Maturity Date
Date of
Original Issue
September 15,2007
CUSIP
Registered Owner: CEDE & CO.
Principal Amount:
The Columbia Heights Economic Development Authority, a public body corporate and
politic and political subdivision of the State of Minnesota (the "Authority"), for value received,
hereby promises to pay, but solely from the sources hereinafter described, to the Registered Owner
specified above or registered assigns, the Principal Amount set fOlth above on the Maturity date
specified above, upon the presentation and surrender hereof, and to pay to the Registered Owner
hereof interest on such Principal Amount from such sources at the Interest Rate specified above
from the Date of Original Issue set fOlth above, or the most recent interest payment date to which
interest has been paid or duly provided for as specified below, on February 1 and August 1 of each
year, commencing August 1, 2008, until said principal amount is paid. Principal and the
redemption price are payable in lawful money of the United States of America at the office of U.S.
Bank National Association, St. Paul, Mimlesota, as Trustee under the Indenture hereinafter
described or of its successor as Trustee. Interest shall be paid on each interest payment date by
check or draft mailed to the person in whose name this Bond is registered at the close of business on
the fifteenth (15th) day of the month immediately preceding such interest payment date (whether or
not a business day) at the Owner's address as set forth on the registration records maintained by the
Trustee. Any such interest not punctually paid or provided for will cease to be payable on such
regular record dates and such defaulted interest may be paid to the person in whose name this Bond
is registered at the close of business on a special record date for the payment of such defaulted
interest established by the Trustee pursuant to the Indenture.
B-1
This Bond is issued pursuant to Minnesota Statutes, Sections 469.090 to 469.1082, as amended
(herein called the "Act"), and in conformity with the provisions, restrictions and limitations thereof.
This Bond does not constitute or give rise to a charge against the general credit or propelties or
taxing powers of the Authority or the City of Columbia Heights, Minnesota (the "City") and does
not grant to the Owner of this Bond any right to have the Authority or the City levy any taxes or
appropriate any funds for the payment of the principal hereof or interest hereon, nor is this Bond a
general obligation or a pecuniary liability of the Authority or the City or the individual officers or
agents thereof. This Bond does not constitute an indebtedness of the Authority or the City, within
the meaning of any state constitutional provision or statutory or chaJter limitation. The principal of
this Bond and interest hereon are payable solely from Lease Payments to be paid by the City
pursuant to a Lease-Purchase Agreement dated as of September 1, 2007 (the "Lease"), from the
Authority to the City, or other money appropriated to the payment of the Bonds of this series under
the MOltgage and Security Agreement and Trust Indenture, dated as of September 1, 2007 (the
"Indenture") and held by the Trustee in a Fund or Account established thereunder.
THE OBLIGATION OF THE CITY TO MAKE LEASE PAYMENTS PURSUANT TO
THE LEASE IS SUBJECT TO ANNUAL APPROPRIATION BY THE CITY COUNCIL OF
THE CITY. IN THE EVENT THE CITY COUNCIL DETERMINES NOT TO APPROPRIATE
MONEY FOR THE PAYMENT OF LEASE PAYMENTS DUE IN A FISCAL YEAR, THE
LEASE WILL TERMINATE AT THE END OF THE THEN-CURRENT FISCAL YEAR, AND
THE CITY WILL HAVE NO FURTHER OBLIGATION TO MAKE LEASE PAYMENTS
PURSUANT TO THE LEASE.
This Bond is one of a duly authorized series of special, limited obligation Bonds (the
"Bonds") in an aggregate principal aJl10unt of $ in denominations of $5,000 or
integral multiples thereof not exceeding the principal aJl10unt maturing in any year, and numbered
from R -1 upwards, and of like tenor and effect except as to serial number, denomination, interest
rate, maturity and right of prior redemption, all of which have been authorized by law to be issued
and have been issued or are to be issued by the Authority pursuant to a Bond Resolution adopted by
the Authority, on August 27, 2007 (the "Bond Resolution"), to provide financing for the acquisition
and construction of the Sites and Facilities described in the Lease. The Bonds aJ'e equally and
ratably secured by the Indenture and the Lease. Pursuant to the Indenture, the Authority has
assigned and mortgaged to the Trustee all of its right, title and interest (other than certain rights to
indemnity and payment of expenses) in and to the Sites, the Facilities, the Lease and the Ground
Lease, dated as of September 1, 2007 (the "Ground Lease") from the City to the Authority.
Reference is hereby made to the Ground Lease, the Lease, the Indenture, the Bond Resolution, and
any amendments or supplements thereto for a description and limitation of the property, revenues
and funds pledged and appropriated to the payment of the Bonds, the nature and extent of the
security thereby created, the rights of the Owners of the Bonds, the rights, duties and immunities of
the Trustee, and the rights, inununities and obligations of the Authority and the City thereunder.
Certified copies of the Bond Resolution and executed counterparts of the Indenture, the Ground
Lease and the Lease are on file at the office of the Trustee.
The Bonds aJ'e subject to extraordinary redemption on any Business Day in whole or in part
in celtain events of damage to or destruction or condemnation of the Sites or the Facilities, or
change of law as provided in the Lease, at a redemption price equal to par plus accrued interest.
B-2
The Bonds maturing on or after February I, 2018 are subject to optional redemption, at the
election of the City, in whole or in part, and ifin part in such manner as the City shall determine, on
Februmy 1,2017 and any date thereafter, at a redemption price of pm' plus acclUed interest.
[Term Bonds due are subiect to Mandatory Sinking Fund Redemption in the vears and
amounts described in the Indenture.l
Notice of any such redemption shall be given to the registered Owner of each such Bond by
first class mail, addressed to the Owner's registered address, not later than thiliy (30) days prior to
the date fixed for redemption. Prior to the date fixed for redemption, funds shall be deposited with
the Trustee sufficient to pay the Bonds called and acclUed interest thereon, plus premium, if any.
Upon the happening of the above conditions, Bonds thus called shall not bear interest on or after the
call date and, except for the purpose of payment from the funds so deposited, shall no longer be
protected by the Indenture.
This Bond is transferable, as provided in the Indenture, only upon the registration records
maintained by the TlUstee by the Registered Owner hereof in person or by the Owner's duly
authorized attomey, upon surrender of tlus Bond for transfer at the office of the Trustee, duly
endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the TlUstee
duly executed by, the Registered Owner hereof or the Owner's duly authorized attorney, and, upon
payment of any tax, fee or other govemmental charge required to be paid with respect to such
transfer, one or more Bonds of the same maturity, aggregate principal amount and interest rate will
be issued to the designated transferee or transferees.
The Bonds are issuable only as fully registered bonds without coupons in denominations of
$5,000 or any integral multiple thereof not exceeding the principal mnount maturing in any year.
As provided in the Indenture and subject to celiain limitations set forth therein, the Bonds are
exchangeable for a like aggregate principal mnount of Bonds of the same maturity and interest rate,
of different authorized denominations, as requested by the Registered Owner or the Owner's duly
authorized attomey upon surrender thereof to the TlUstee.
In case an Event of Default as defined in the Indenture or the Lease occurs, or in the event of
non-appropriation by the City Council of the City, the principal of this Bond and all other Bonds
Outstanding may be declared or may become due and payable prior to the stated maturity hereof in
the manner and with the effect and subject to the conditions provided in the Indenture, but no
Owner of any Bond shall have any right to enforce the provisions of the Indenture, the Lease or the
Ground Lease except as provided in the Indenture.
With the consent of the Authority and the Trustee, and to the extent pem1itted by and as
provided in the Indenture, the terms and provisions of the Indenture, the Lease and the Ground
Lease, or of any instmment supplemental thereto, may be modified or altered by the assent or
authority of the Owners of a majority in aggregate principal mnount of the Bonds then Outstanding
thereunder.
B-3
It is hereby celtified and recited and the Authority has found: that all acts, conditions and
things required to be done precedent to and in the issuance of this Bond and the series of which it is
a part have been properly done, have happened and have been performed in regular and due time,
form and manner as required by law; and that this Bond and the series of which it is a patt does not
constitute a debt of the Authority within the meaning of any constitutional or statutory limitation.
This Bond shall not be valid or become obligatory for any purpose until it shall have been
authenticated by the execution of the celtificate hereon endorsed by the TlUstee under the Indenture.
IN WITNESS WHEREOF, the Colwnbia Heights Economic Development Authority has
caused this Bond to be executed in its name by the facsimile signatures of its duly authorized
officers, all as of the Date of Original Issue specified above.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT
AUTHORITY
President-Gary L. Peterson
Executive Director-Walter R. Fehst
Date:
(Form of TlUstee's Certificate)
This is one of the Bonds described in the within mentioned Indenture.
U.S. BANK NATIONAL ASSOCIATION
Saint Paul, Minnesota
Date:
By
Authorized Signature
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
(Please Print or Typewrite Name and Address of Transferee)
B-4
the within Bond and all rights thereunder, and hereby irrevocably constitutes and appoints
attorney to transfer the within Bond on the books
kept for registration thereof, with full power of substitution in the premises.
Dated:
Inselt Social Security Number or Other
IdentifYing Number of Assignee
Notice: The signature to this assignment
must correspond with the name as it appears
on the face of this Bond in every patticular,
without alteration or any change whatever.
PROVISIONS AS TO REGISTRATION
The ownership of the principal of and interest on the within Bond has been registered on the
books of the Trustee in the name of the person last noted below.
Date of Registration
Registered Owner
Signature of
Trustee
Cede & Co.
Federal ID #13-2555119
[STATEMENT OF INSURANCE]
B-5
EXHIBIT C
PROJECT FUND DRAW REQUEST
WRITTEN REOUEST NO.
The undersigned, being the duly elected and qualified City Administrator of the City of Columbia
Heights, Minnesota (the "Representative"), pursuant to Section 4.07 of that cel1ain Mortgage and Security
Agreement and Trust Indenture, dated as of September 1, 2007 (the "Indenture"), by and between the
Columbia Heights Economic Development Authority (the "Authority") and U.S. Bank National
Association, as trustee (the "Trustee"), hereby requests on behalf of the Authority that you, as Trustee,
pay to the Representative the Project Costs (as defined in the Indenture) with respect to the Project (as
defined in the Indenture) authorized to be disbursed by the terms of the Indenture, within three (3) days
after receipt hereof by you, in the aggregate amount of $ from the Project Fund. I
hereby further certifY as follows:
The person, firm or corporation to whom payment is presently due and payable for
Project Costs incurred with respect to the Project, the classification of such Project Costs, and the
amount of such payment, is as follows:
VENDOR
TYPE OF COST
AMOUNT
DATE
$
Such Project Costs have been incurred by the City, as lessee under that certain Lease-
Purchase Agreement, dated as of September I, 2007, by and between the City and the Authority,
are presently due and payable, have not been paid and each item thereof is a proper charge
against the Project Fund;
Such Project Costs have not been included in any other Project Fund Draw Request
previously filed with the Trustee under Section 4.07 of the Indenture;
Any necessary permits and approvals, if any, required for the portion of the Project for
which such withdrawal is to be made have been issued and are in full force and effect;
There has not been filed with or served upon the Authority or the City any notice of any
lien, right to a lien or attachment upon or claim affecting the right of any person, fi1'1n or
corporation to receive payment of the respective amount stated in this Project Fund Draw
Request unless such payment is being contested;
The withdrawal and use of the Project Fund money for the purposes intended will not
cause any of the representations or certifications contained in the Indenture or any certificate
delivered by the Authority on the Closing Date to be untrue;
The amount of money which will remain on deposit in the Project Fund after the
withdrawal in question is made, together with the Authority's reasonable estimate of investment
income to be earned thereon and on other funds created under the Indenture and held by the
Tmstee which income is required to be deposited in the Project Fund, and the amount of money,
if any, committed by and available to the Authority for payment of the Project Costs of the
Project will, after payment of the amounts then requested, be sufficient to pay the cost of
completing the Project.
Capitalized terms used and not otherwise defined herein are defined as in the Indenture.
(The remainder of this page is intentionally left blank.)
IN WITNESS WHEREOF, the undersigned has executed and delivered this Project Fund Draw
Request as of the _ day of
CITY OF COLUMBIA HEIGHTS, MINNESOTA
By
Its City Manager-Walter R. Fehst
GROUND LEASE
Between
CITY OF COLUMBIA HEIGHTS
As Lessor
and
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
As Lessee
Dated as of September 1, 2007
This instrument was drafted by:
KENNEDY & ORA VEN, CHARTERED (AlP)
470 U.S. Bank Plaza
Mitmeapolis, Minnesota 55402
(612) 337-9300
El'ror! Unknown document property name.
TIllS GROUND LEASE, dated as of September I, 2007, by and betwcen the CITY OF
COLUMBIA HEIGHTS, a home rule charter city and political subdivision of the State of Minnesota (the
"City"), as Lcssor and thc COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a
public body corporatc and politic and political subdivision of the State of Minncsota (together with its
successors and assigns as lessee hcrcunder, the "Authority"), as Lessee.
WITNESSETH:
In consideration of the mutual covenants hereinafter set forth, the parties hereto agree as
follows:
ARTICLE I
Demise Of Sites And WalTanties
Section 1.0 I. Demise. Subject to and upon the terms, conditions, covenants and
undertakings hereinafter set forth, the City hereby leases and permits the use to, and the Authority
hereby leases from the City, the property described in Exhibit A attached hereto, located in Anoka
County, Minnesota (hereinafter called the "Sites"), subject to the reservation of easements described
in Section 4.05 hereof.
Section 1.02. Warranties. The City covenants and warrants to the Authority:
(1) That the City has good and marketable title to the Sites, has authority to enter into,
execute and deliver this Ground Lease, has duly authorized the execution and delivery of this
Ground Lease and has duly executed and delivered this Ground Lease;
(2) That the Sites arc not subject to any dedication, easement, right-ot~way, reservation
in patent, covenant, condition, restriction, lien or encumbrance which would prohibit or materially
interfere with the construction of certain municipal liquor store facilities (hereinafter called the
"Facilities") on the Sites, as contemplated by that certain Lease-Purchase Agreement by and
between the City and the Authority of even date herewith (hereinafter called the "Lease");
(3) That all taxes, assessments or impositions of any kind with respect to the Sites,
except current taxes, have been paid in full;
(4) That the Sites are properly zoned for the purpose of the Facilities; and
(5) That the City has authority to enter into, execute and deliver the Lease, has duly
authorized its execution and delivery, and has duly executed and delivered the Lease.
Section 1.03. Environmental Covenants. To the best knowledge of the City, without
conducting investigation, (i) no dangerous, toxic or hazardous pollutants, contaminants, chemicals,
waste, materials or substances, as defined in or governed by the provisions of any federal, state or
local law, statute, code, ordinance, regulation, requirement or rule relating thereto (collectively,
"Environmental Regulations"), and also including ureaformaldehyde, polychlorinated biphenyls,
Error! UnlmowlI document property name.
asbestos, asbestos containing materials, nuclear fiJel or waste, radioactive materials, explosives,
carcinogens and petroleum products, or any other waste, material, substance, pollutant or
contaminant which would subject the owner of the Sites and the Facilities to any damages, penalties
or liabilities under any applicable Environmental Regulation (collectively, "Hazardous Substances")
are now or have been stored, located, generated, produced, processed, treated, transported,
incorporated, diseharged, emitted, released, deposited or disposed of in, upon, under, over or it'om
the Sites or the Facilities in violation of any Environmental Regulation; (ii) no threat exists of a
discharge, release or emission of a Hazardous Substance upon or from the Sites into the
environment; (iii) the Sites have not been used as or for a mine, a landfill, a dump or other disposal
facility, an industrial or manufacturing facility, or a gasoline service station; (iv) no underground
storage tank is located at the Sites or has previously been located thercin but has been removed
therefrom; (v) no violation of any Environmental Regulation now exists relating to the Sites or the
Facilities, no notice of any such violation or any alleged violation thereof has been issued or given
by any governmental entity or agency, and there is not now any investigation or report involving the
Sites or the Facilities by any governmental entity or agency which in any way relates to Hazardous
Substances; (vi) no person, party or private or governmental agency or entity has given any notice
of or asserted any claim, cause of action, penalty, cost or demand for payment or compensation,
whether or not involving any injury or threatened injury to human health, the environment or natural
resources, resulting or allegedly resulting from any activity or event described in (i) above; (vii)
there are not now any actions, suits, proceedings or damage settlements relating in any way to
Hazardous Substances, in, upon, under, over or it'om the Sites, (viii) the Sites are not listed in the
United States Environmental Protection Agency's National Priorities List of Hazardous Waste Sites
or any other list of Hazardous Substance sites maintained by any federal, state or local
governmental agency; and (ix) the Sites are not subject to any lien or claim for lien or threat of a
lien in favor of any governmental entity or agency as a result of any release or threatened release of
any Hazardous Substance.
The City shall not store, locate, generate, produce, process, treat, transport, incorporate,
discharge, emit, release, deposit or dispose of any Hazardous Substance in, upon, under, over or
from the Sites or the Facilities in violation of any Environmental Regulation, shall not permit any
Hazardous Substance to be stored, located, generated, produced, processed, treated, transported,
incorporated, discharged, emitted, released, deposited, disposed of or to escape therein, thereupon,
thereunder, thereover or therefrom in violation of any Environmental Regulation, shall cause all
Hazardous Substances to be properly removed therefrom and properly disposed of in accordance
with all applicable Environmental Regulations, and shall not install or permit to be installed any
underground storage tank therein or thereunder in violation of any Environmental Regulations
which are applicable to the Sites and the Facilities.
In the event any Hazardous Substance is found upon, under, over or from the Sites or the
Facilities in violation of any Environmental Regulation or if any lien or claim for lien in favor of
any govermnental entity or agency as a result of any release of any Hazardous Substance is
threatened, the City, at its sole cost and expense, shall, within ten days of such finding, deliver
written notice thereof to the Authority and the Trustee (as defined in the Lease) and shall promptly
remove such Hazardous Substances upon, under, over or fi'om the Sites or the Facilities and prevent
the imposition of any liens against the Sites or the Facilities for the cleanup of any Hazardous
Materials. Such removal shall be conducted and completed in compliance with all applicable
Error! Unknown document pl'opcrt~y nalllt',
2
federal, state and local laws, regulations, rules, ordinances and policies, in accordance with the
orders and directives of all federal, state and local governmental authorities. In the event the City
has not removed such Hazardous Substances within a time period deemed reasonable by the
Trustee, the City shall, at the written direction of the Trustee, take such remedial action as the
Trustee shall direct. In the event the City shall not comply with the written directions of the Trustee
within the time fi'ame established within its written directions, the City hereby grants to the
Authority and the Trustee an irrevocable license to remove Hazardous Substances from, repair,
clean up, and detoxify the Sites and the Facilities and agrees to reimburse the Authority and the
Trustee for all of their costs therefor. The City reserves the right to recover Ji'Oln responsible third
parties all costs or reimbursements paid by the City under this Section 1.03.
The City further agrees, to the extent permitted by Minnesota law, to reimburse the
Authority and the Trustee for any and all claims, demands, judgments, penalties, liabilities, costs,
damages and expenses, including court costs and attorneys' fees directly or indirectly incurred by
the Authority and the Trustee (prior to trial, at trial and on appeal) in any action against or involving
the Authority or the Trustee, resulting from any breach of the foregoing covenants, or ii'om the
discovery of any Hazardous Substance, in, upon, under or over, or emanating fi'om the Sites or the
Facilities, whether or not the City is responsible therefor, it being the intent of the City, the
Authority and the Trustee that the Authority and the Trustee shall have no liability or responsibility
for damage or injury to human health, the environment or natural resources caused by, for
abatement and/or clean up ot: or otherwise with respect to, Hazardous Substances by virtue of the
interests of the Authority and the Trustee in the Sites and the Facilities pursuant to this Ground
Lease, or hereafter created, or as the result of the Authority or the Trustee exercising any of its or
their rights or remedies with respect thereto hcreunder or under any other instrument, including but
not limited to becoming the owner thereof by foreclosure or conveyance in lieu offoreclosure. The
foregoing representations, warranties and covenants of this Scction shall be deemed continuing
covenants, representations and warranties for the benefit of the Authority and the Trustee, including
but not limited to any purchaser at a foreclosure sale, any transferee of the title of the Trustee or any
other purchaser at a foreclosurc sale, and any subsequent owner of the Sites or the Facilities, and
shall survive the satisfaction or release of this Ground Lease, any foreclosure of a mortgage lien
under the Indenture or any other instrument, and/or any acquisition of title to the Sites or the
Facilities or any part thereof by the Authority or the Trustee, by deed in lieu of foreclosure of
otherwise. Any amounts covered by the foregoing shall bear interest fi'om the date incurred at the
maximum rate permitted by law and shall be payable on demand.
ARTICLE II
Term And Rent
Section 2.0 I. Tenn. The term of this Ground Lease shall commence as of the day and year
first above written, and shall end on the date the term of this Ground Lease is terminated in
accordance with Section 3.01 hereof
Section 2.02. Rent. The rent for the entire term of this Ground Lease shall be One Dollar
($1.00), payable in one installment in advance on the Closing Date, as defined in the Lease.
Error! Unlmowll document propel'ly IlllJlle.
3
ARTICLE III
Tcnnination
Section 3.01. Termination. Subject to the other provisions of this Ground Lease, this
Ground Lease shall terminate upon the occurrence of anyone of the following events:
(1) The earlier of September I, 2057 or the date on which the City has paid all Lease
Payments owing by the City as lessee under the Lease.
(2) The exercise by the City of its option to prepay the Lease Payments and all other
sums due in accordance with the terms and conditions of the Lease.
(3) The termination of the Lease Term by the City for non-appropriation pursuant to
Section 5.6 of the Lease and the receipt by the Authority of amounts fi'om the sublease or other
disposition ofthe Authority's interest in the Sites and the Facilities suf1icient to:
(a) Reimburse the Authority for all administrative costs and expenses, including
reasonable attorneys' fees, incurred by the Authority as a result of the termination of the
Lease Term and the sublease or sale ofthe Authority's interest in the Sites and the [<acilities;
and
(b) Reimburse the Authority for all capital costs and expenses in any maimer
incurred by the Authority with respcct to preparing the Sites and the Facilities for sublease
for commercial or other lawful purposes (as used in this Ground Lease, the right to sublease
the Sites includes the right to sell all leasehold interests in the Sites); and
(c) Pay to the Authority the unpaid principal of and interest on the Bonds
described in the Lease.
(4) The termination of the Lease Term upon the occurrence of an Event of Default by
the City under Article X of the Lease and the receipt by the Authority of amounts from the sublease
or sale of the Authority's interest in the Sites and the [<acilities sufficient to:
(a) Reimburse the Authority for all administrative costs and expenses, including
reasonable attorneys' fees, incurred by the Authority as a result of the Event of Default and
the termination of the Lease and the sublease or sale of the Authority's interest in the Sites
and the Facilities; and
(b) Reimburse the Authority for all capital costs and expenses in any manner
incurred by the Authority with respect to preparing the Sites and the Facilities for sublease
for commercial or other lawful purposes; and
I~ITOJ'! Unknown document propel'ty name.
4
(c) Pay to the Authority thc unpaid principal of and interest on the Bonds
described in the Lease.
The amounts referred to in paragraphs (a), (b) and (c) of Subsection 3.01(3) or 3.01(4), as
applicable, are hereinafter referred to as the "Reimbursement Amount."
Section 3.02. Use of Revenues. After termination of the Term of the Lease by the City
because of non-appropriation pursuant to Section 5.6 of the Lease or termination of the Term of the
Lease upon the occurrence of an Event of Default under Article X of the Lease, revenues received
by the Authority from the Sites and the Facilities as contemplated in Subsection 3.01(3) or 3.01(4)
shall be applied as follows:
l'IRST
An amount thereof equal to ongoing administrative costs and costs of
operation of the Sites and the Facilities may be retained by the Authority;
SECOND
An amount thereof equal to interest on the outstanding Reimbursement
Amount at the rate of 3.0 percent per annum may be retained by the
Authority; and
THIRD
Any remaining amount thereof shall be retained by the Authority and
credited to the payment of the Reimbursement Amount.
Use of the Sites and the Facilities by the Authority or any affiliate of the Authority, other
than for the purpose of assuming control, making any necessary changes in the Sites or the
Facilities, and the initial subleasing thereof, shall be treated as the sublease thereof on a monthly
basis at the then current monthly value.
Section 3.03. Reports. In the event that the Term of the Lease is terminated by the City
because of non-appropriation pursuant to Section 5.6 of the Lease or terminated by the Authority as
a result of the occurrence of an Event of Default by the City thereunder, the Authority shall keep
complete and accurate records regarding any sublease of the Sites and the Facilities and shall, within
sixty days after the end of each Fiscal Year of the City, deliver a written report to the City showing:
(a) all amounts received by the Authority from any sublease of the Sites and the Facilities; (b) an
analysis as to whether the Authority has received the Reimbursement Amount, with all supporting
calculations; and ( c) the date, if any, during the next Fiscal Year ofthe City on which the Authority
expects to receive the Reimbursement Amount. Such written report shall be verified by a certified
public accountant or firm of certified public accountants not in the regular employ of the Authority.
The City shall have the right, at its own expense, to examine all of the Authority's records insofar as
they relate to the Sites and the Facilities. Such examination shall be made at the Authority's offices
during normal business hours.
Section 3.04. City's Option to Pay Reimbursement Amount. In the event that the Lease
Term is terminated by the City because of non-appropriation pursuant to Section 5.6 ofthe Lease or
terminated by the Authority as a result of the occurrence of an Event of Default by the City
thereunder, the unpaid balance of the Reimbursement Amount and any other payment required
under Section 3.02 hereof may be paid by the City at any time. Upon such payment, this Ground
Rrl'or! Unknown document p"o)lcl'ty name.
5
Lease and the Authority's interest in the Sites and the Facilities shall tcrminate; provided, that if the
Authority's interest in thc Sites or the Facilities has been subleased to any sublessee pursuant to any
sublease that is still in effcct, this Ground Lease shall not terminate, but the Authority shall assign
and set over to the City all of the Authority's interest in the Sites and the Facilities granted under
this Ground Lease, subject to all existing rights created in thc Sites and the Facilitics by all such
subleases, and the City shall be entitled to all rent payments with respect to any subleases of the
Sites and the Facilities.
Section 3.05. Elfect of Termination of Lcase. In the event that thc Lease Term is
terminatcd by thc City because of non-appropriation pursuant to Section 5.6 of the Lease or
terminated by the Authority as a rcsult of the occurrence of an Event of Default by the City
thereunder, thc City shall have no continuing obligation under this Ground Lcase after such
tcrmination, other than to continuc to allow the Authority or the Trustee to continue to use and cnjoy
the Sites and the Facilities as provided herein.
ARTICLE IV
Use Of Sites; Additional Covenants
Section 4.0 I. Use. The Authority shall not use or permit the use of the Sites for any
unlawful purpose.
Section 4.02. Ouiet Enjovmcnt. Thc City covenants that upon the Authority's paying the
rent rcserved hcrein, and performing all conditions and covenants set forth in this Ground Lease and
the Lease, the Authority shall and may pcaceably have, hold and enjoy the Sitcs for thc term of this
Ground Leasc. The Authority covenants that upon expiration of this Ground Lease, it shall give the
City peaceable possession of thc Sites, together with the Facilities and any other improvements
constructed thereon pursuant to the Lease.
Section 4.03. Assignment and Subletting. The Authority shall have the right to assign its
interest in this Ground Lease, and to sublet the Sites in accordance with the Lease. Specifically, on
the date of execution of this Ground Lease, the Authority shall assign all of its right, title and
interest hcreunder to the Trustee named in the Lease, and thc City hereby consents to such
assignment. From and after such assignment, all references hcrein to the Authority shall be deemed
to be referenccs to the Trustee.
Scction 4.04. Additional Covenants. In the evcnt that any person or entity, however
organized (other than the Authority or any assignce of the Authority), shall be dctermined to hold
any interest other than an easement that in any manner affects the City's good and marketable title
to the Sites, the City shall use its best eflorts to acquire the interest so held, such acquisition to be
made at the City's sole cost and expcnse. The City hereby agrees to savc and keep harmless the
Authority, or any assignee of the Authority, from and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, costs and expenscs (including reasonable attorneys' fees,
but only in the event that litigation is actually commenced by the Authority) of whatever kind and
nature, imposed on, incurred by or assertcd against the Authority, or any assignee of the Authority,
EITor! Unknown document property nl\l1Ir,
6
that in any way relate to or arise out of the assertion of any interest affecting the City's good and
merchantable title to the Sites by any person or entity, however organized (other than the Authority
or any assignee of the Authority).
Section 4.05. Reservation of Easement. The City expressly reserves casements over, under,
across and through the Sites, for access, parking and utility purposes, for the benefit of the property
excepted from the description of the Sites in Exhibit A hereto. Such easement shall include the
continuing right to use all driveway, walkway, access, parking and utility improvements and
facilities presently located on or under the Sites and the right to maintain, repair and replace such
improvements and facilities.
ARTICLE V
Miscellaneous
Section 5.01. Binding Effect. This Ground Lease shall be binding upon, and inure to the
benefit of, the parties hereto, and their successors and assigns.
Section 5.02. Certain Defined Terms. Unless the context hereof clearly requires otherwise,
capitalized terms used in this Ground Lease and defined in the Lease are used herein with the same
meanings as set forth in the Lease.
(The remainder of this page is intentionally left blank.)
Enor! llnlmowlI doclIlIlent propel'ty name.
7
IN WITNESS WHEREOF, the partics hereto havc executed this Ground Lease as of
the date first abovc written.
CITY OF COLUMBIA HEIGHTS, MINNESOTA
By
Its Mayor-Gary L. Peterson
By
Its City Manager- Walter R. Fehst
STATE OF MlNNESOT A
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of
September, 2007 by Gary L. Peterson, the Mayor of the City of Columbia Heights,
Minnesota Authority, a home rulc charter city and political subdivision under the laws of
Minnesota, by and on behalf of said authority.
Notary Public
STATE OF MINNESOTA
COUNTY OF ANOKA
} ss
The foregoing instrument was acknowlcdged beforc me this day of
September, 2007 by Walter R. Fehst, the City Manager of the City of Columbia Heights,
Minnesota, a home rule charter city and political subdivision under the laws of
Minnesota, by and on bchalf of said authority.
Notary Public
Erl'Or! Unknown document pl'operty IIllllle.
8
COLUMBIA HEIGHTS ECONOMIC
REDEVELOPMENT
AUTHORITY
By
Its President-Gary L. Peterson
By
Its Executive Director-Walter R. Fehst
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of
September, 2007 by Gary L. Peterson, the President of the Columbia Heights Economic
Development Authority, a public body corporate and politic and political subdivision
under the laws of Minnesota, by and on behalf of said authority.
Notary Public
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of
September, 2007 by Walter R. Fehst, the Executive Director of the Columbia Heights
Economic Development Authority, a public body corporate and politic and political
subdivision under the laws of Minnesota, by and on behalf of said authority.
Notary Public
I~J'I'or! Unknown doculllent properly lIame.
9
EXHIBIT A
LEGAL DESCRIPTIONS OF SITES
37th Avenue Liquor Store:
Lots 2 and 2A, Block 1, Hart Lake Addition, according to the plat thereof
on file in the Otliee ofthe Registrar of Titles and the Office ofthe County
Recorder in and for Anoka County, Minnesota
Lot 2, Block 1 is registered property
Central Avenue Liguor Store:
Lot 19, Revised Auditor's Subdivision No. 15, according to the plat
thereof on tile in the Office of the Registrar of Titles and the Office of the
County Recorder in and for Anoka County, Minnesota
Error! Unknown document propcl'ty nallle.
10
LEASE-PURCHASE AGREEMENT
betwccn
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
liS Lessor
lInd
CITY OF COLUMBIA HEIGHTS
liS Lessce
DlIted liS of Septembcr 1, 2007
This instrument drafted by:
KENNEDY & GRAVEN, Chllliered (AlP)
470 U.S. Bank Plaza
Minneapolis, Minnesota 55402
(612) 337-9300
Error! Unknown document property !lallle.
TABLE OF CONTENTS
Page
PARTIES AND RECITALS .................................................................................................................1
Section 1.1.
Section 1.2.
Section 2.1
Section 2.2.
Section 3.1.
Section 3.2.
Section 3.3.
Section 4.1.
Section 4.2.
Section 4.3.
Section 4.4.
Section 4.5.
Section 4.6.
Section 4.7.
Section 5.1.
Section 5.2.
Section 5.3.
Section 5.4.
Section 5.5.
Section 5.6.
ARTICLE I
Definitions and Exhibits
Definitions.................................................................................................................... . 2
Exhibits......... ........................ .................. .......... .................... ..... ...................... .............5
ARTICLE II
Representations, Covenants and WalTanties
Representations, Covenants and Warranties ofthe City..............................................6
Representations, Covenants and Warranties of the Authority..................................... 7
ARTICLE III
Acquisition and Construction of Facilities;
Payment ofProjcct Costs
Project Costs............... ...... ....... ............................... ................................. .....................8
Acquisition and Construction of Facilities; Payment of Cost ...................................... 8
City to Provide Title Insurance..................................................................................... 9
ARTICLE IV
Sale and Lease of Facilities
Lease and Sale of Facilities ........................................................................................10
Lease Payments. ................................................. ............................... .........................10
Additional Lease Payments.. .................. .............. .............................. ........................ 10
Source of Lease Payments..........................................................................................11
City's Obligations and Remedies ...............................................................................11
Possession and Enjoyment .........................................................................................12
Authority Access to Sites and Facilities..................................................................... 12
ARTICLE V
TCl'In of Lcase; Transfer or Surrender of Sites
and Facilities
Lease Term.......... ............................................ .................................. ......................... 13
Termination of Lease Term ........................................................................................13
Authority's Interest in the Sites and Facilities............................................................ 13
Surrender of Sites and Facilities .................................................................................13
Purchase; Conveyance of Title... ......... .................. .................................. ................... 13
Non-Appropriation..... ..... ........... ........................... ................................... .................. 14
Enor! Unknown document jll'operty name.
Section 5.7.
Section 5.8.
Section 6.1.
Section 6.2.
Section 6.3.
Section 6.4.
Section 6.5.
Scction 6.6.
Section 6.7.
Section 6.8.
Section 6.9.
Section 7.1.
Section 7.2.
Section 7.3.
Section 7.4.
Section 7.5.
Section 7.6.
Section 7.7.
Section 7.8.
Section 7.9.
Section 7.1 O.
Section 8.1.
Section 8.2.
Section 8.3.
Section 8.4
Section 9.1.
Section 9.2.
Section 9.3.
Intent to Continue Term; Appropriations...................................................................14
Effect of Termination ................ .......................................... ................. ................ ......14
ARTICLE VI
General Mattel's
U sc; Permits......... ................ .................... ............................ ..................... .......... ........15
Maintenance and Modification of Facilities by the City............................................ 15
Taxes, Other Governmental Charges and Utility Charges......................................... 16
Licns............................... ................... ................... ....... .............. .................................. 16
Easements....................... ................... .................. ........... .......... ........................ .......... 16
Addition and Substitution of Land .............................................................................17
Compliance with Indenture ........................................................................................17
Tax Covenants ...................... .................... ............................................ ...................... 18
Financial Statements..................... .................... .......................................... ................ 18
ARTICLE VII
Insumnce and Indemnification;
Damage, Destruction and Condemnation
Liability Insurance ............... ...................... ................................................. ................ 19
Property Insurance..................... ...................... ............................................... ............ 19
Administration of Claims. ............. ........................ ..................... ...... ................ ......... .19
Othcr Insurancc and Requirements for All Insurance................................................ 19
Indemnification........................................................................................................... 20
Hazardous Substance Indemnification. .............................. .................. ...................... 20
Damage, Destruction and Condemnation........................... ....................... .................21
Insufficiency of Net Proceeds.......................................................................... ...........21
Cooperation of Authority............... .......................... ................ ......................... ..........22
Condemnation of Other Property Owned by the City................................................22
ARTICLE VIII
Option to Purchase; Option to Prepay
Option to Purchasc or Prepay .....................................................................................23
Excrcise of Option.................. ................... ....................................... ................ ..........23
Provision for Payment of Purchase Price; Dischargc of City's Obligation...............23
Prerequisite; No Dcfault ................ .................... ...................... .......... ................... ...... 23
ARTICLE IX
Assignment, Subleasing, Indemnification,
Mortgaging and Selling
Assignment by Authority..... ........ ................. ........... ................ .......................... ......... 24
Assignment and Subleasing by the City.....................................................................24
Restriction on Mortgage or Sale of Project by the City .............................................24
Error! Unknown document property name.
ii
ARTICLE X
Events of Defanlt and Rcmedics
Scction 10.1. Events of Default Defined ..........................................................................................25
Section 10.2. Remedies on Default.......... .................................. ................... .......................... ...... ... 26
Section 1003. Delay; Notice......... .... .......... .... .............. .... ........... ..... .................... .............................26
Section IDA. No Remedy Exclusive ............... ................................. ..... ................ ...........................26
Section 10.5. No Additional Waiver Implicd by One Waivcr .........................................................26
ARTICLE Xl
Administrative Provisions
Scction 11.1. Noticcs ........................................................................................................................27
Section 11.2. Binding EiTect......... .... ............... .... .......... ........... .............. ................. ...... ...... .............27
Section 11.3. Separability................... ................................. ... .................... ....... .......... ..... ........... .....27
Section l1A. Amendments, Changes and Modiiications ................................................................27
Section 11.5. Further Assuranccs and Corrcctive Instruments ........................................................27
Section 11.6. Execution in Counterparts ..........................................................................................28
Section 11.7. Applicable Law...... .................... .................................. ..... ................. ....... ..... .............28
Section 11.8. Authorized Officers ..... .............. ..... ............ ....... .................. ................. ................ ......28
Section 11.9. Captions..... ................... ................................. ..... ......................... .......... ..... ..... ...........28
SIGNATURES ....................................................................................................................................29
EXHIBIT A .......................................................................................................................................A-l
EXHIBIT B.... ...... .... .................. .... ..... ......... ................... ............... ...... .................... .......... ................ B-1
EXHIBIT C........................................................................................................................................ C-1
Enor! lInlmowlI documcllll)l'OPCI'ty name.
III
TI-IIS LEASE-PURCHASE AGREEMENT, dated as of September 1, 2007 (the "Lease"),
by and between the COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY, a
public body corporate and politic and political subdivision of the State of Minnesota, as lessor (the
"Authority"), and the CITY OF COLUMBIA HEIGHTS, a home rule charter city and political
subdivision of the State of Minnesota (the "City"), as lessee;
WITNESSETH:
WHEREAS, pursuant to Minnesota Statutes, Section 465.71, as amended, the City is
authorized by law to acquire such items of real and personal property as are needed to carry out its
governmental and proprietary functions, and to acquire such real and personal property by entering
into lease-purchase agreements; and
WHEREAS, the City has determined that it is necessary for it to acquire pursuant to this
Lease the Authority's interest in certain real property described on Exhibit A hereto (the "Sites"),
together with celtain buildings, structures and improvements to be constructed thereon, and certain
equipment to be contained therein (the "Facilities"); and
WHEREAS, the development of the Sites and the Facilities is consistent with and furthers
the economic development functions of the Authority; and
WHEREAS, the Authority is willing to acquire a leasehold interest in the Sites pursuant to a
Ground Lease, dated as of September 1, 2007 (the "Ground Lease") from the City to the Authority
and to acquire title to the Facilities and to lease and sell the Sites and the Facilities to the City,
pursuant to this Lease; and
WHEREAS, to provide funds for the acquisition and construction of the Facilities, the
Authority will issue its $ Columbia Heights Economic Development Authority
Public Facility Lease Revenue Bonds, Series 2007B (Municipal Liquor Stores Project) (the "Series
2007B Bonds"), pursuant to a Mortgage and Security Agreement and Trust Indenture, dated as of
September 1,2007 (the "Indenture"), between the Authority and U.S. Bank National Association,
St. Paul, Minnesota, as trustee (the "Trustee"); and
WHEREAS, pursuant to the Indenture the Authority will assign and mortgage to the Trustee
all ofthe Authority's right, title and interest in and to the Sites, the Facilities, the Ground Lease, this
Lease and the Lease Payments to be made hereunder (other than certain rights to indemnification
and payment of expenses of the Authority);
NOW, THEREFORE, in the joint and mutual exercise of their powers, and in consideration
of the mutual covenants herein contained, the parties hereto recite and agree as follows:
ErrOl'! lInlmown document pl'operty name.
ARTICLE I
Definitions and Exhibits
Section 1.1. Definitions. Unless the context otherwise requires, the terms defined in this
Section shall, for all purposes of this Lease and Exhibits attached hereto, have the meanings herein
specified:
"Additional Lease Payments" means payments due from the City pursuant to Section 4.3
hereof.
"Authority" means the Columbia Heights Economic Development Authority, a public body
corporate and politic and political subdivision of the State of Minnesota, and its successors and
assigns as lessor hereunder.
"Authorized Oflicer," when used with respect to the City, means its Mayor, its City
Manager, its Finance Director, its Assistant Finance Director or any other person who is designated
in writing by the City as an Authorized Officer for purposes of this Lease, and when used with
respect to the Authority means its Executive Director, Assistant Treasurer, or any other person who
is designated in writing by the Authority as an Authorized 011icer for purposes of this Lease.
"Bond Counsel" means any attorney or law firm having a national reputation as bond
counsel in connection with the issuance of state and local governmental obligations and appointed
by the Authority as bond counsel.
"Bonds" means the Series 2007B Bonds and any Additional Bonds issued pursuant to the
Indenture.
"Business Day" means any day on which the Trustee is open for business.
"City" means the City of Columbia Heights, a home rule charter city and political
subdivision of the State of Minnesota, and any successor to its functions.
"City Council" means the City Council of the City and any successor as governing body of
the City.
"Closing Date" means the date upon which the Bonds of any series are delivered to the
Original Purchaser (as defined in the Indenture) against payment therefor. The Closing Date for the
Series 2007B Bonds is September 19,2007.
"Completion Date" means the date of completion of construction of the Improvements and
acquisition ofthe Facilities, established in accordance with Section 3.2(e) hereof.
"Costs of]ssuance" means all fees and expenses incurred by the City and the Authority in
connection with the execution and delivery of the Lease and the issuance of the Bonds,
including, but not limited to, costs of preparing and printing the Bonds, this Lease, the Ground
Lease, the Indenture, the Ot1icial Statement relating to the Bonds, and related documents; legal
Erl'ol'! lJnknown document propel'ty name. 2
fees (including, without limitation, those of Bond Counsel, counsel to the Trustee, the Authority,
the City and the Insurer); recording fees and title insurance premiums; Rating Agency fees;
financial advisor's fees; and the Trustee's initial fces.
"Facilities" means any buildings, structures and improvements to be constructcd on the
Sites, and all furniturc, fixtures and equipment to bc acquircd with proceeds of sale of the Bonds
and located thereon.
"Fiscal Year" means the twelve-month fiscal period of the City, which commences on
January I and ends on December 31 of each year.
"Ground Lcase" means the Ground Lease, dated as of September 1,2007, by which the City
leases the Sites to the Authority, as amended or supplemented from time to time.
"Improvements" means any addition, enlargement, improvcment, extcnsion or alteration of
or to the Facilities as they then exist, and also means any fixtures, structures or other facilities (other
than the Facilities) acquired or constructed by the City and located on the Sites.
"Indenture" mcans the Mortgage and Security Agreement and Trust Indenture datcd as of
September I, 2007, by and between the Authority and the Trustee, and any amendments or
supplemcnts thereto.
"Independent," when uscd with reference to an attorney, engincer, architect, certificd public
accountant, consultant or other professional person, mcans a pcrson who (i) is in fact independent,
(ii) does not have any material financial interest in the City or the transaction to which such person's
Certificate or opinion relates (othcr than payment to be received for professional services rendered),
and (iii) is not connected with the Authority or the City as an officer, director or employee.
"Independent Counsel" means an Indepcndent attorney duly admitted to practice law before
the highest COUlt of any state.
r"Insurer" means
, its successors and assigns.l
"Interest Payment Date" means August I, 2008 and each February I and August 1 thereafter
until the Series 2007B Bonds are paid in full.
"Internal Revenue Code" means the Internal Revenue Codc of 1986, as amended, and thc
regulations promulgated thereunder.
"Lease" means this Lease-Purchase Agreement, between the Authority, as lessor, and the
City, as lessee, as amcnded or supplemented fi'om time to time.
"Lease Payment" means each of the payments duc from the City to the Authority on each
Lease Payment Date during the Term of this Lease, as shown on Exhibit B.
"Lease Payment Datc" means the date upon which any Leasc Payment is due and payable as
provided in Exhibit B.
Enor! Unknown document property name.
3
"Net Proceeds," when used with respect to procccds of insurance or a condemnation award,
means money received or receivable by the City, as owner or as lessee hereunder, or the Trustee, as
lessee under the Ground Lease or as secured party, of the Sites or the Facilities, less the cost of
recovery (including attorneys' fees) of such money from the insuring company or the condemning
authority.
"Owner" means the registered owner of any Outstanding Bond.
"Permitted Encumbrances" means, as of any particular time: (i) liens for taxes and
assessments not then delinquent, or which the City may, pursuant to provisions of Section 6.3
hereof, permit to remain unpaid, (ii) the Ground Lease, this Lease and amendments hereto or
thereto, (iii) the Authority's and the Trustee's interest in the Facilities, (iv) any mechanic's,
laborer's, materialmen's, supplier's or vendor's lien or right not filed or perfected in the manner
prescribed by law, (v) such minor defects, irregularities, encumbrances, casements, rights-of~way
and clouds on title as normally exist with respect to properties similar in character to the Sites and
which do not, in the opinion of Independent Counsel, materially impair the property affected
thereby for the purpose for which it was intended, and (vi) casements, restrictions or encumbrances,
if any, shown on Exhibit A hereto.
"Project" means the acquisition, construction and equipping of two municipal liquor stores
to be located at 50th Street and Central Avenue and 37th Street and Hart Avenue within the City.
"Project Costs" means the costs defined in Section 4.03 of the Indenture.
"Purchase Price" means, with respect to any date, cash or obligations of or guaranteed by
the United States of America maturing at such times and in such amounts as to provide for the full
and timely payment of all interest and premium, if any, on and principal of the Outstanding Bonds
to maturity or an earlier redemption date, if applicable. The City shall be entitled to credit against
the Purchase Price the amount of any money then held by the Trustee under the Indenture and
available for the payment ofthe Outstanding Bonds.
"Record Date" means the 15th day of the calendar month next preceding any Interest
Payment Date, regardless whether such day is a Business Day.
"Reserve Fund" means the Reserve Fund established under Section 5.02 of the Indenture.
"Reserve Requirement" means the least of (i) 10 percent of the original principal amount of
all series of Outstanding Bonds or (ii) the maximum principal and interest to become due on all
Outstanding Bonds in the currcnt year or any future ycar or (iii) 125% of the original average annual
principal and interest to become due on all series of Outstanding Bonds.
"Series 200713 Bonds" mcans the $ Columbia Heights Economic
Development Authority Public Facility Lease Revenue Bonds, Series 200713 (Municipal Liquor
Stores Project), originally issued pursuant to the Indenture.
Error! UIlIUlOWII document property nalllt'.
4
"Sites" means the real property described in Exhibit A hereto, including any property added
to or substituted for any portion of the Sites, and less any real property released from this Lease
pursuant to Article VI hereof.
"State" means the State of Minnesota.
"State and Federal Laws" means the Constitution and any law of the State and any
ordinance, rule or regulation of any agency or political subdivision of the State; and any law of the
United States, and any rule or regulation of any executive department or federal agency.
"Term" means the period during which this Lease may remain in effect as specified in
Section 5.1.
"Trustee" means U.S. Bank National Association, Saint Paul, Minnesota, and its successors
and assigns as Trustee under the Indenture.
Section 1.2. Exhibits. The following Exhibits arc attached to and by reference made a part
of this Lease:
Exhibit A: A legal description of the Sites and facilities being leased and purchased
by the City pursuant to this Lease, and a listing of Permitted Encumbrances.
Exhibit B: The date and amount of each Lease Payment coming due during the
Leasc Tcrm.
Exhibit C: Thc form of completion certificate to be delivered by the City to
evidence the Completion Date.
(The remainder of this page is intentionally left blank.)
Itrrol'! UIlIUlOWII dOCUI1l('llt property name.
5
ARTICLE II
Reprcsentations, Covenants and Wan'antics
Section 2.1. Reprcsentations. Covenants and Warranties of the City. The City reprcsents,
covenants and warrants as follows:
(a) The City is authorizcd under thc Constitution and laws of the State of
Minnesota to enter into this Lease and the transactions contemplated hereby, and to perform
all of its obligations hereunder.
(b) Neither the execution and delivery of this Lease, nor the fulfillment of or
compliance with the terms and conditions thereot: nor the consummation of the transactions
contemplated thereby, conflicts with or results in a brcach of the tcrms, conditions or
provisions of any restriction or any agrcement or instrument to which the City is now a party
or by which the City is bound, constitutcs a detault under any of the foregoing, or results in
the creation or imposition of any lien, charge or encumbrancc whatsoever upon any of the
property or asscts of the City, or upon the Sitcs and the Facilities except Permitted
Encumbranccs.
(c) This Lease is entered into under authority of and pursuant to Milmesota
Statutcs, Section 465.71, as amended.
(d) The officers of the City executing this Lease have been duly authorized to do
so.
(e) The City will not pledge, mortgage or assign this Lease, or its rights, duties
and obligations hercunder to any other person, tirm or corporation except as provided under
the terms ofthis Lease.
(t) Subject to the City's rights under Section 5.6 hereof, the Facilities will be
used until the Bonds have all been paid primarily to carry out the essential governmental or
proprietary purposes of the City.
(g) Subjcct to the provisions of Section 5.6 hcreof, the City administration will
include in the annual budget of the City submitted to the City Council, for each Fiscal Year
during the Lease Term, money sutlicient to pay and for the purpose of paying all Lease
Payments and Additional Lease Payments and other obligations of the City under this Lease,
and for this purpose the City will make a reasonable estimate of Additional Lease Payments
to become due in the next Fiscal Year, and will take all other actions necessary to provide
money for the payment of the obligations of the City under this Lease from sources of the
City lawfully available for this purpose.
(h) Except to the extent specifically provided herein, the City is not obligated to
appropriate or otherwise provide money tor the paymcnt of the Lease Payments or any other
amounts coming due hcreunder; and in the event of non-appropriation or non-renewal by the
Kl'l'ol'! Unknown doculIlent propert)' name.
6
City, thc City shall not bc liablc for gcneral, special, incidental, consequcntial or other
damages rcsulting thcreli'om. This Lease does not constitute a general obligation of the
City, and the full faith and credit and taxing powcrs of the City are not pledged for the
payment of the Lease Payments or other amounts coming due, or other actions required to
be performed, hereunder.
(i) The City hereby declares its current need for thc Facilities. The City has
determined that the Lease Payments and Additional Lease Payments hereunder during the
Lease Term represent the tair value of the use of the Facilitics, and that the Purchase Pricc
represents the fair purchasc price of the Facilitics. Thc City hereby determines that the
Lease Payments and Additional Lease Payments do not exceed a reasonable amount so as to
place the City under an economic compulsion to renew this Lease or to exercise its option to
purchase the Facilities hereunder. In making such determinations the City has given
consideration to the costs ofthe Facilities, the uses and purposes tor which the Facilities will
be employed by the City, the benefit to the City by reason of the acquisition of the Facilities
pursuant to the tcrms and provisions of this Lcase and the City's option to purchase the
Facilities. The City hereby determines and deelares that thc acquisition of the Facilities and
the leasing of the Facilities pursuant to this Lease will result in tacilitics of comparable
quality and meeting the same requirements and standards as would be necessary if the
acquisition of thc Facilities were performed by the City other than pursuant to this Lease.
The City hereby determines and declares that the period during which the City has an option
to purchase the Facilities (i.e., the Term ofthis Lease) does not excced the useful life of the
Facilities.
Section 2.2. Representations, Covenants and Warranties of the Authority. The Authority
represents, covenants and warrants as tollows:
(a) The Authority is a public body corporate and politic and political subdivision
of the State of Mimlesota; has power to enter into this Lease; is possessed of full power to
own and hold real and personal propelty, and to sell thc same; and has duly authorized the
execution and delivery of this Lease.
(b) Neither the execution and delivery of this Lease, nor the fulfillment of or
compliance with the terms and conditions thereot; nor the consummation of the transactions
contemplated thereby, conflicts with or results in a breach of the terms, conditions or
provisions of any restriction or any agreement or instrument to which thc Authority is now a
party or by which the Authority is bound, constitutcs a detault undcr any of the forcgoing, or
results in the creation or imposition of any lien, charge or cncumbrance whatsoever upon
any of the property or assets of the Authority, or upon the Sitcs and the Facilities except
Permitted Encumbrances.
Errol'! Unknown document p"opcl'ly Ilame.
7
ARTICLE III
Acquisition and Construction of Facilities;
Payment of l'roject Costs
Section 3.1. Proiect Costs. The City has caused estimates of the Project Costs of the
Facilities to be prepared, which estimates have been reviewcd and approvcd by the Authority.
Based on such estimates, the total Projcct Costs are estimated to be not less than $6,307,783.75. In
ordcr to provide the money needed to pay the Project Costs when due, and in consideration of the
actions agreed to be performed by the City under this Lease, the Authority has entered into thc
Indenture, pursuant to which the proceeds of salc of the Series 2007B Bonds in the amount of
$ (including any premium in the purchase price paid by the Original
Purchaser) will be depositcd in thc Bond Fund and the Project fund and applied as provided in the
Indenture.
Section 3.2. Acquisition and Construction of facilities; Pavment of Costs.
(a) The Authority shall establish thc Project Fund with the Trustee in accordance with
the Indenture. A portion of the proceeds of the issuance and salc of the Bonds shall be deposited
into the Project Fund, in accordancc with the provisions of the Indenture.
(b) The Authority shall cause the Improvements to be completed and the remainder of
the Facilities to be acquircd with all rcasonable dispatch. The Authority hereby appoints thc City as
its agent for the purpose of construction of thc Improvcments and the City may perform thc same
itself or through its agents, and may makc or issue such contracts, orders, receipts and instructions,
and in general do or causc to be done all such other things as it may consider requisite or advisable
for the completion of the Improvements ami tor fulfilling its obligations under this Article. The
City shall have full authority and the sole right under this Lease to supervisc and control, directly or
indirectly, all aspects of the construction of the Improvements and the acquisition of thc remainder
of the Facilities.
The money on dcposit in the Project Fund shall be applicd by the Trustee as provided in this
Section and as otherwise provided in Article IV of the Indenture. Until the money on deposit in the
Project Fund is so applied, such money shall be subject to the lien of the Indenture, and the
Authority and the City shall have no right, title or interest therein except as expressly provided in
this Lease and the Indenture.
(c) Disbursements from thc Project Fund are to be made to the City or to its order in
accordance with the Indenture; provided that requests for disbursements with respect to Costs of
Issuancc shall be made in accordance with paragraph (f) ofthis Section.
(d) If the money in the Project Fund, together with any other money made available to
pay the Project Costs, shall not be sufficient to pay the Project Costs in full, then the City shall pay
all that portion of the Project Costs in excess of the money available therefor. If the City shall make
any payments pursuant to this paragraph (d), it shall not be entitled to any reimbursement therefor
from the Authority, the Trustee or the Owners of the Bonds, nor shall it be entitled to any
EI'I'IlI'! Unknown document property name.
8
diminution in or postponement of the payment of the Lease Payments, the Additional Lease
Payments or the payment of any other amounts payable under this Lease.
(e) The Completion Date shall be the date on which the Improvcments are completed in
their entirety and ready to be placed in service and all other property which constitutes the Facilities
has been acquired and installed, all as determined by the City. Promptly after the Completion Date,
the City shall submit to the Authority, the Trustee and the Insurer a certificate signed by an officer
of the City, substantially in the form of Exhibit C hereto, which shall specifY the Completion Date
and shall state that construction and acquisition of the Facilities has been completed and the Project
Costs have been paid, except for any portion thereof which has been incurred but is not then due and
payable, or the liability for the payment of which is being contested or disputed by the City, and for
the payment of which the Trustee is directed to retain specified amounts of money within the
Project Fund. Notwithstanding the foregoing, such certificate may state that it is given without
prejudice to any rights against third parties which exist at the date thereof or which may
subsequently come into being. The certificate as to the Completion Date shall include a list of the
equipment financed with procecds of the Series 2007B Bonds and included as part ofthe facilities.
(f) The City shall be entitled to withdraw money fi'om the Project Fund in payment of
any item constituting a Cost of Issuance, by furnishing the Tt'Ustee a certificate and order to pay
such costs, in the form required by the Indenture, on or after the Closing Date. The City agrees that
it will pay promptly all expenses constituting Costs of Issuance, whether or not reimbursed therefor
fi'om the Project Fund.
Section 3.3. Citv to Provide Title Insurance. The City shall provide ALTA Form B (revised
10-17-92) title insurance policies insuring that the City has good and marketable title to the Sites
and that the Authority has a valid leasehold interest in and to the Sites, subject only to Permitted
Encumbrances, containing such affirmative insurance as the Authority and the Tt'Ustee may
reasonably request (including, but not limited to, mechanics' liens, contiguity of parcels, zoning,
and easements and party wall agreements), and deleting all standard exceptions to coverage. Title
insurance premiums, abstract continuation charges and other title fees and expenses incurred
pursuant to this section shall be paid by the City on or before the Closing Date.
(The remainder ofthis page is intentionally lell blank.)
Krror! Uuknowll document lu'opcrty name.
9
ARTICLE IV
Lcase and Sale of Facilitics
Section 4.1. Leasc and Sale of Facilities. The Authority hereby leases and sells its
leasehold interest in the Sites and the Facilities to the City, and the City hereby leases and purchases
the Authority's interest in the Sites and the Facilities from the Authority, upon the terms and
eonditions set forth in this Lease. The sale shall be completed in accordance with the terms of
Section 5.5 hereof
The Sites and the Facilities are leased and sold in their present condition without
representation or warranty of any kind by the Authority, and subjeet to the rights of parties in
possession, to the existing state of title, to all applicable legal requirements now or hereafter in
effect, and to Permitted Encumbrances. The City has examined the Sites and title thereto and has
found all of the same to be satisfactory for the purposes of this Lease.
Section 4.2. Lease Pavments. Subject to the provisions of Section 4.4, the City shall pay to
the Authority Lease Payments at the times and in the manner specified in the attached Exhibit B.
The Lease Payments shall be paid in lawful money of the United States of America, in same-day
nmds, directly to the Trustee, to whom the Authority has irrevocably assigned its rights to receive
such Lease Payments pursuant to the Indenture. It is acknowledged that the Lease Payments to be
made not later than each January 15 and July 15 of each year shall be applied by the Trustee to
payment of the principal of and interest on the Bonds to be paid on the same date.
Section 4.3. Additional Lease Payments. During the Term of this Lease, the City shall pay
or cause to be paid as Additional Lease Payments the following amounts:
(a) All fees, charges and expenses, including agent and counsel fees, of the
Trustee and any Paying Agent incurred under the Indenture, as and when the same become
due.
(b) All costs incident to the payment of the principal of, premium, if any, and
interest on the Bonds as the same become due and payable, including redemption premiums,
if any, and all other costs and expenses in connection with the call, redemption and payment
of Bonds.
(c) An amount sufficient to reimburse the Authority for all expenses reasonably
incurred by the Authority hereunder and in connection with the performance of the
Authority's obligations under this Lease or the Indenture.
(d) All expenses incurred in connection with the enforcement of any rights
under this Lease or the Indenture by the Authority, the Trustee or the Owners of the Bonds.
(e) All payments required by the rebate covenants of Section 6.8(b), including
without limitation any fees payable to consultants retained to analyze rebate requirements.
Error! lJnknown document property Ilame.
JO
(f) All other payments of whatever nature which the City has agreed to payor
assume under the provisions of this Lease (including, without limitation, any amounts
advanced under Section 6.2(b) hereof and interest thereon).
(g) Any amounts necessary to replenish the Reserve Fund to the Reserve
Requirement, which amount shall be paid within eighteen (18) months after any draw
thereon under the Indenture.
(h) All costs, charges, expenses and other amounts and obligations due and
owing by the Authority under the Ground Lease, as and when the same become due.
Section 4.4. Source of Lease Pavments. Notwithstanding any other provision of this Lease
apparently to the contrary, this Lease shall not constitute a general obligation of thc City, and the
full faith and credit of the City are not pledged for the payment of the Lease Paymcnts or the
performance by the City of its obligations hereundcr. Thc Lease Payments and Additional Lease
Payments shall be paid, and other obligations of the City hcreunder shall bc met, solely from the
amount appropriated by the City Council for such purpose in the City's annual budget and shall
constitute a current expense of the City for the Fiscal Year then in efIect. It shall not constitute an
indebtedness of the City within the meaning of the Constitution and laws of the State of Minnesota.
The other obligations of the City hereunder shall be met solely from one or more of the
following: (a) Net Proceeds of insurance or self-insurance required to be maintained by the City
under Article VII; (b) Net Proceeds of any condemnation award with respect to the Sites and
Facilities; and ( c) money from time to time appropriated by the City Council for this purpose,
provided that the City Council shall have no legal obligation to appropriate money for this purpose.
Section 4.5. City's Obligations and Remedies.
(a) Except as provided in Section 5.6 hereof, the City's obligation to pay Lease
Payments due with respect to the Sites and the Facilities, and to perform and observe all other
covenants and agreements of the City contained herein, shall be absolute and unconditional; and the
Lease Payments and Additional Lease Payments due and payable hereunder shall be made without
notice or demand and without set-off, counterclaim, abatement, deduction or defense including,
without limitation, any failure or delay by the Authority in the performance of any of its obligations
hereunder, and irrespective of whether the Facilities shall have been statted or completed, or
whether the City's or the Authority's title thereto or to any part thereof is defective or nonexistent,
and notwithstanding any damage to, loss, theft or destruction of the Facilities or any part thereof,
any failure of consideration, the taking by eminent domain of title to or of the right of temporary use
of all or any patt of the Facilities, legal curtailment of the City's use thereof; the eviction or
constructive eviction of the City, any change in the tax or other laws of the United States of
America, the State of Minnesota or any political subdivision thereof; any change in the Authority's
legal organization or status, or any default of the Authority hereunder, and regardless of the
invalidity of any action of the Authority, and regardless of the invalidity of any portion of this
Lease.
(b) Notwithstanding any provision or covenant contained in this Lease, the Indenture or
the Bonds, the City is not obligated to renew the Lease beyond any Fiscal Year from time to time in
Error! UnlmowlI documcnt property name.
11
effect, nor is it obligated to budget or appropriate money or to pay Leasc Payments or Additional
Lease Payments beyond the end ofthe Fiscal Y car in effect at a given time.
(c) Nothing in this Lease shall be construcd to rclease the Authority fi-om the
performance of any agreemcnt on its part herein contained or as a waiver by the City of any rights
or claims which the City may have against the Authority under this Lease or otherwise, but any
recovery upon such rights and claims shall be had from the Authority separately, it being the intent
of this Lease that the City shall be unconditionally and absolutely obligated to perform fully all of
its obligations, agrcements and covenants under this Lease during thc Term of this Lease unless
sooner terminated in accordance with section 5.2 hereof (including the obligation to make Lcase
Payments and Additional Lease Payments) for thc benefit of the Owners of thc Bonds. The City
may, however, at its own cost and expense and in its own name or in the namc of the Authority,
prosecute or defend any action or proceeding or take any other action involving third persons which
the City dcems reasonably necessary in ordcr to secure or protcct its right of possession, occupancy
and use hereunder, and in such evcnt the Authority hcreby agrecs to cooperate fully with the City
and to take all action neccssary to eftect the substitution of the City for thc Authority in any such
action or proceeding if the City shall so request.
Section 4.6. Possession and Eniovment. Thc Authority hereby covenants to providc the
City during the Term of this Lease with quiet usc and enjoyment of the Sites and Facilities, and the
City shall during such Term peaceably and quietly have and hold and cnjoy the Sites and Facilities,
without suit, trouble or hindrancc fl'om the Authority, except as cxpressly set forth in this Lease. At
the request of the City and at the City's cost, thc Authority will join in any legal action in which the
City asserts its right to such possession and enjoymcnt to the cxtent the Authority may lawfully do
so.
Section 4.7. Authority Access to Sites and Facilities. The Authority and the Trustee shall
have the right at all rcasonable times to examine and inspect the Sites and Facilities, and shall have
such rights of access to the Sites and Facilities as may be reasonably necessary to cause the proper
maintenance thereof in the cvent offailure by the City to perform its obligations hereunder.
(The remainder ofthis page is intcntionally lcft blank.)
Error! Ulllmowll document property 1I1I1Ile.
12
ARTICLE V
Term of Lease;
Tmnsfer or Surrender of Sites and Facilities
Section 5.1. Lease Tenn. Subject to the provisions of Section 5.6, this Lease shall be in
effect for a Term commencing upon the execution hereof and ending on February 1, 2030.
Section 5.2. Termination of Lease Term. The Term of this Lease will terminate upon the
occurrence of the tirst ofthe following events:
(a) non-appropriation by the City pursuant to Section 5.6 hereof;
(b) the payment by the City of the Purchase Price, pursuant to Section 8.1;
( c) the discharge by the City of its obligation to pay the Lease Payments and
Additional Lease Payments required to be paid by it hereunder pursuant to Section 8.3; or
(d) a default by the City and the Authority's election to terminate this Lease
pursuant to Article X.
Section 5.3. Authority's Interest in the Sites and Facilities. Upon payment of all Lease
Payments and Additional Lease Payments due hereunder, or upon prepayment of the Lease
Payments and Additional Lease Payments or discharge of the City's obligation to make the Lease
Payments and Additional Lease Payments in accordance with Article VIII hereot; and in either
event, upon defeasance of the Bonds in accordance with Article X of the Indenture, full and
unencumbered legal title to the Facilities shall pass to the City, and the Authority shall have no
further interest therein. In such event the Authority and its otlicers shall take all actions necessary
to authorize, execute and deliver to the City any and all documents necessmy to vest in the City, all
of the Authority's right, title and interest in and to the Sites and Facilities, free and clear of all liens,
leasehold interests, encumbrances (other than Permitted Encumbrances), including, if necessary, a
release of mlY and all interests or liens created under the provisions of this Lease.
Section 5.4. Surrender of Sites and facilities. Upon termination of the Term of this Lease
pursuant to Section 5.2, clause (a) or (d), or upon exercise by the Authority (or the Trustee) of its
right to take possession of the Sites and Facilities under Section 10.2, the City shall surrender the
Sites and facilities to the Authority or the Trustee in the condition in which they were originally
received trom the Authority, except as repaired, rebuilt, restored, altered or added to as permitted or
required hereby, ordinmy wear and tear excepted. The City shall have the right to remove ti'om the
Sites and Facilities at or prior to such termination or possession all personal property located therein
which was not financed with money provided tlum the Project fund, or which has not replaced
personal property so financed, and which is not otherwise owned by the Authority, but the City shall
repair any damages caused by such removal.
Section 5.5. Purchase; Conveyance of Title. At any time when the Purchase Price, together
with any unpaid or delinquent interest, has been fully paid or provided for, whether by (i) payment
Error! Unknown doclIlIlent pl'opel'ty IIflllle.
13
of all Lease Payments and Additional Lease Payments as provided in Section 5.1 hereof: or (ii)
payment or provision for payment of the Purchase Price as provided in Article VIII hereof; then the
purchase of the Sites and the Facilities by the City shall be deemed to have been completed. The
Authority shall thereupon deliver to the City such instruments of conveyance or release as, in the
opinion of the City, may be necessary to rclcase the interests of the Authority and the Trustee in the
Sites and Facilities.
Section 5.6. Non-Appropriation. If the City Council docs not appropriate or budget money
sufficient to pay the Lease Payments and reasonably estimated Additional Lease Payments coming
due in the next Fiscal Year, as determined by the City's budget for the Fiscal Year in question, then
the Term of this Lease shall terminate at the end of the then-current Fiscal Year. The City Council
shall effect such non-appropriation by adoption of a resolution specifically referring to this Lease
and determining (i) not to provide money for payments due hereunder in the next Fiscal Year and
(ii) that the Lease shall terminate at the end of the then-current Fiscal Year, and the City shall give
the Authority and the Trustee a written notice of such non-appropriation and shall pay to the
Authority any Lease Payments and Additional Lease Payments which are due and have not been
paid at or before the end of its then current Fiscal Year. The City shall endeavor to give as much
notice of non-renewal as possible prior to the end of such Fiscal Year, but in any event the City shall
not be required to give more than twelve (12) months' notice, and the City shall notify the Authority
and the Trustee of any anticipated termination. In the event of termination of this Lease as provided
in this Section, the City shall surrender possession of the Sites and Facilities to the Authority in
accordance with Section 5.4 and convey to the Authority or release its interest in the Sites and
Facilities within ten (10) days after the expiration of the then-current term.
Section 5.7. Intent to Continue Term; Appropriations. The City presently intends to
continue this Lease for its entire Term and to pay all Lease Payments specified in Exhibit Band
Additional Lease Payments. The City reasonably believes that money in an amount sufficient to
make all such Lease Payments and Additional Lease Payments can and will lawfully be
appropriated or budgeted and made available.
Section 5.8. Effect of Termination. Upon termination of this Lease as provided in Section
5.6, the City shall not be responsible for the payment of any Lease Payments or Additional Lease
Payments coming due with respect to succeeding Fiscal Years, but if the City has not delivered
possession of the Sites and Facilities to the Authority in accordance with Section 5.4 and conveyed
to the Authority or released its interest in the Sites and Facilities within ten (10) days after the
termination date, the termination shall nevertheless be effective, but the City shall be responsible for
the payment of damages in an amount equal to the amount of the Lease Payments thereafter coming
due under Exhibit B and Additional Lease Payments which are attributable to the number of days
during which the City fails to take such actions and for any other loss suffered by the Authority as a
result ofthe City's failure to take such actions as required. The City shall be required to pay over to
the Trustee any money which it has appropriated or budgeted for the purpose of paying obligations
under this Lease for any Fiscal Years preceding the Fiscal Year for which non-renewal under
Section 5.6 is effective.
Error! Unknown document property name.
14
ARTICLE VI
General Matters
Section 6.1. Use: Pcrmits. The City shall exercise due care in the use, operation mld
maintenance of the Sites and Facilities, and shall not use, operate or maintain thc Sites and Facilities
improperly, carelessly, in violation of any State and Federal Law or for a purpose or in a manner
contrary to that contemplatcd by this Lcase. Thc City shall obtain or cause to be obtained all
permits and licenscs necessary for the opcration, posscssion and use of thc Sites and Facilities. The
City shall comply with all Statc and Federal Laws applicable to the operation, posscssion and use of
the Sites and Facilities, and if compliance with any such State and Federal Law requires changes or
additions to be made to the Sites and Facilities, such changes or additions shall be made by the City
at its expense.
Section 6.2. Maintenancc and Modification of Facilities bv the Citv.
(a) During the Term of this Lcase the City shall, at its own cxpense, maintain, preserve
and keep the Sites and Facilities in good repair, working order and condition, and shall fi'om time to
time make all repairs, replacements and improvcments neccssary to keep the Sitcs and Facilities in
such condition. The Authority shall havc no responsibility for any of these repairs, replacements or
improvements. In addition, thc City shall, at its own expensc, have the right to remodel the
Facilities or to make additions, modifications and improvements thereto. All such additions,
modifications and improvements shall thcrcaftcr comprise pmt of the Facilities and be subject to the
provisions of this Lease. Such additions, modifications and improvements shall not in any way
damage thc Facilities; and the Facilities, upon completion of any additions, modifications and
improvements made pursuant to this Section, shall be of a value not less than the value of the
Facilities immediately prior to the making of such additions, modifications and improvements. Any
property for which a substitution or replacement is made pursuant to this Section may be disposed
of by the City in such manncr and on such terms as are determined by the City. The City will not
permit any mechanic's or other lien to be established or remain against the Sites and Facilities for
labor or materials furnished in cOl1llection with any remodeling, additions, modifications,
improvements, repairs, rencwals or replacements made by the City pursuant to this Section;
provided that if any such lien is established and the City shall first notify the Authority and the
Trustee of the City's intention to do so, the City may in good faith contest any lien filcd or
established against thc Sites and Facilities, and in such evcnt may permit the items so contested to
remain undischarged and unsatisficd during the pcriod of such contest and any appeal therefrom
unless the Authority or thc Trustee shall notify the City that, in thc opinion of Independent Counsel,
by nonpayment of any such item the intercst of the Authority in the Sites and Facilities will be
matcrially endangered or the Sitcs and Facilities or any part thereof will be subject to loss or
forfeiture, in which event the City shall promptly pay and cause to be satisfied and discharged all
such unpaid items or provide the Authority and thc Trustee with full security against any such loss
or forfeiture, in form satisfactory to the Authority and the Trustee. The Authority will cooperate
fully with thc City in any such contest, upon the request and at the expensc of the City.
(b) In the event the Authority becomes aware of any condition on thc Sites or in the
Facilities which, in the rcasonable opinion of the Authority, creates a risk to the health and safety of
Erl'Ol'! Unlmown document fll'opcrty nllllle.
15
any users of the Facilities or creates a risk of significant deterioration of the Improvements if not
corrected, the Authority may, but shall be under no obligation to, notify the City of such condition
and request that it be cured as promptly as is reasonably possible. In the event the City does not
promptly cure such condition, the Authority may, but shall be under no obligation to, take
reasonable steps to correct such condition. In such event, the cost to the Authority and interest
thereon at the highest rate specified in any Bond until paid will be charged to the City as an
Additional Lease Payment.
Section 6.3. Taxes, Other Governmental Charges and Utility Charges. During the Term of
this Lease the City shall also payor cause to be paid when due all gas, water, steam, electricity,
heat, power and other charges incurred in the operation, maintenance, use, occupancy and upkeep of
the Sites and the [<acilities. The City shall also pay all property and excise taxes and governmental
charges of any kind whatsoever which may at any time be lawfully assessed or levied against or
with respect to the Sites and the Facilities or any part thereof or the Lease Payments, and which
become due during the Term of this Lease with respect thereto; and all special assessments and
charges lawfully made by any governmental body for public improvements that may be secured by
a lien on the Sites and Facilities; provided that with respect to special assessments or other
governmental charges that may lawfully be paid in installments over a period of years, the City shall
be obligated to pay only such installments as arc required to be paid during the Term of this Lease
as and when the same become due. The City shall not be required to pay any federal, state or local
income, inheritance, estate, succession, transfer, gift, franchise, gross receipts, profit, excess profit,
capital stock, corporate, or other similar tax payable by the Authority, its successors or assigns,
unless such tax is made in lieu of or as a substitute for any real estate or other tax upon property.
The City may, at the City's expense and in the City's name, in good faith contest any such
taxes, assessments, utility and other charges and, in the event of any such contest, may permit the
taxes, assessments or other charges so contested to remain unpaid during the period of such contest
and any appeal therefrom unless the Authority or the Trustee shall notify the City that, in the
opinion of Independent Counsel, by nonpayment of any such items the interest of the Authority in
the Sites and [<acilities will be materially endangered or the Sites, the Facilities or any part thereof
will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes,
assessments or charges or provide the Authority and the Trustee with full security against any loss
which may result from nonpayment, in form satisfactory to the Authority and the Trustee.
Section 6.4. Liens. The City shall not, directly or indirectly, create, incur, assume or suffer
to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Sites or
the Facilities, except the respective rights of the Authority and the City as herein provided and
Permitted Encumbrances. Except as expressly provided in this Article, the City shall promptly, at its
own expense, take such action as may be necessary to duly discharge or remove any such mortgage,
pledge, lien, charge, encumbrance or claim if the same shall arise at any time. The City shall
reimburse the Authority for any expense incurred by it in order to discharge or remove any such
mortgage, pledge, lien, charge, encumbrance or claim.
Section 6.5. Easements. The Authority will from time to time, at the request of the City and
at the City's cost and expense, cooperate and join with the City: (a) in granting easements and other
rights in the nature of easements, rcleasing existing casements or other rights in nature of casements
which arc for the benefit ofthe Sites or the [<acilities; (b) in executing amendments to any covenants
Error! Unknown docUlllcnt properly IlJlllle.
16
and restrictions affecting the Sites or the Facilitics; (c) in executing and delivering to any person any
instrument appropriate (i) to confirm or to the eifect that such grant, release or execution is not
detrimental to the proper conduct of the operations of the City on or in the Sites or the Facilities, (ii)
to show the consideration, if any, being paid for such grant, release or amendment, (iii) to show that
such grant, release, dedication, transfer, petition or amendment does not materially impair the use of
the Sites or the Facilities or reduce the value of the Sites or the Facilities, or (iv) to confirm that the
City will remain obligated hereunder to the same extent as if such grant, release, or amendment had
not been made, and the City will perform all obligations under such instrument. The consideration,
if any, received by the Authority or the City for such grant, release, or amendment shall be paid to
the Trustee and deposited in the Bond Fund.
Section 6.6. Addition and Substitution of Land. The Authority and the City agree to add to
the Ground Lease and this Lease certain additional interests in land, and to release from the Ground
Lease and this Lease certain portions of the Sites, and to substitute other interests in real property for
some or all of the portions of the Sites so released, but only upon the conditions hereinafter set 10rth:
(I) The City may, ll'om time to time, add additional real property to the Sites
subject to the Ground Lease and this Lease if (i) the additional real property is to be the site
of a portion of the Improvements, and (ii) the City provides the Trustee with an adequate
legal description and survey of the Sites, satisfactOlY to the Trustee, and an endorsement to
the title insurance policy described in Section 3.3 hereof covering the additional real
property and showing only such further exceptions to title as are acceptable to the Trustee.
(2) The City may, from time to time and with the prior written consent of the
Trustee, the Insurer and the Authority, obtain the release of a portion of the Sites as now
described, if (i) the City certiiies that such portion of the Sites is not reasonably necessary
for the construction of the Improvements; (ii) the unreleased portion of the Sites is not
impaired by such release with respect to ingress and egress, access to dedicated roads and
use of the unreleased portion of the Sites for its then current or intended purposes; (iii) the
City delivers to the Trustee an appraisal by an Independent appraiser of the Sites and any
addition thereto that would remain after the proposed release; and (iv) the City provides
written notice of such proposed release, including a copy of the appraisal, to Standard &
Poor's Ratings Services, a division of The McGraw Hill Companies, Inc.
(3) To accomplish the addition, release or substitution of real property as
described in paragraph (I) or (2), the City shall prepare and furnish to the Trustee and the
Authority amendments or supplements to this Lease, the Indenture, the Ground Lease and
any UCC Financing Statements filed in COlllicction with this Lease. The City shall pay all
expenses, ineluding attorney's fees, incurred in accomplishing any such addition, release or
substitution.
Section 6.7. Compliance with Indenture. During the Term of this Lease, the City agrees to
perform all obligations imposed upon the City by the Indenture.
Rnor! Unlmowll document property name.
17
Section 6.8. Tax Covenants.
(a) The City covenants and agrees with the Authority for the benefit of the Owners from
time to time of the Bonds that it will takc, and will cause its officers, employees or agents to take, all
actions necessary to comply with the applicable provisions of the Internal Revenue Code, and that it
will not take or permit to be taken by any of its officers, employees or agents any actions that would
cause the interest on the Bonds to become subject to federal income taxation under thc applicablc
provisions of the Internal Revenue Code.
(b) The City shall take such actions and make all calculations, transfers and paymcnts
that may be necessary to comply with the rebate requirements contained in Section 148(f) of the
Internal Revenue Code. The City will compute the rebate requirement and make rebate payments in
accordance with law. The City must make periodic computations of the amount to be paid to the
United States under Section 148(f) of the Internal Revenue Code, and transfer the appropriate
amount to a special fund held by the Trustee. Such transfers may be made from funds identified in
the Indenture. To the extent that funds identified in the Indenture are inadequate, the City will use
any funds legally available to make any required deposit to or payment from the special fund held
by the Trustee.
(c) None of the proceeds of the Bonds will be used, directly or indirectly, to replace
funds which were used in any business carried on by any person other than a state or local
governmental unit.
(d) The payment of the Lease Payments will not be (^) directly or indirectly secured by
any interest in (i) property used or to be used for a private business use by any person other than a
state or local governmental unit or (ii) payments in respect of such property, or (B) directly or
indirectly derived from payments (whether or not by or to the Authority or the City), in respect of
property or borrowed money, used or to be used for a private business use by any person other than
a state or local governmental unit.
(e) None of the proceeds of the Bonds will be used, directly or indirectly, to make or
finance loans to persons other than a state or local governmental unit.
(f) Except as provided below, no user of the Facilities or other propelty financed with
proceeds of the Bonds will use the Facilities or such other property in a trade or business on any
basis other than the same basis as the general public; and no person other than a state or local
governmental unit will be a user of the Facilities or such other property in a trade or business as a
result of (i) ownership, or (ii) actual or beneficial use pursuant to a lease or a management or
incentive payment contract, or (iii) joint venture or any other similar arrangement. Notwithstanding
the foregoing, subject to an approving opinion of Bond Counsel, the City may permit up to five
percent (5%) of the useable square footage of the Improvements to be used in the trade or business
of a person other than a governmental unit.
Section 6.9. Financial Statements. The City shall provide the Trustee as soon as they arc
available, annual audited financial statements of the City, together with such additional information
as the Trustee may from time to time reasonably request.
El'I'OI'! {Jnlmowll document pl'operly name.
18
ARTICLE VII
Insurance and Indemnification;
Damage, Destruction and Condemnation
Section 7.1. Liability Insurance. During the Term of this Lease the City shall procure and
maintain continuously in effect with respect to the Sites and Facilities, insurance against liability for
injuries to or death of any person or damagc to or loss of property arising out of or in any way
relating to the maintenance, use or operation of the Sites, the Facilities or any part thereof; in
amounts not less than the City's tort liability limits under Minnesota Statutes, Chapter 466 for death
of or personal injury to anyone person, in amounts not less than the City's tort liability limits under
Minnesota Statutes, Chapter 466 for all personal injuries and deaths arising out of anyone
occurrence, and in amounts not less than the City's tort liability limits under Minnesota Statutes,
Chapter 466 for property damagc arising out of anyone occurrence. The Net Proceeds of all such
insurance shall be applicd toward extinguishment or satisfaction of the liability with respect to
which the insurance proceeds may be paid. lt is understood that with respect to persons or entities
other than the Authority, this insurance covers any and all liability of the City and its officers,
employees and agents. As an alternative to the purchasc of liability insurance, the City may self~
insure against such liabilities in accordance with the provisions of applicable law. Policies of
commercial insurance may include deductibles of no more than ten pcrcent (10%) of policy
amounts.
Section 7.2. Property Insurance. During the Term of this Lease, the City shall procure and
maintain continuously in effect, to the extent of the full replacement value of the Facilities, other
than building foundations, insurancc against loss from or damage by vandalism and fire, with a
uniform standard extended coverage endorsement limited only as may be provided in the standard
form of extended coverage endorscment at the time in use in thc State of Minnesota, in such amount
as will be at least sufficient so that a claim may be made for thc full replacement cost of any putt
thereof damaged or destroyed. All policies (or endorsements or riders) evidencing insurance
required in this Section shall be carried in the names of the City, the Authority and the Trustee as
their respective interests may appear. Thc Net Proceeds of Insurance required by this Section shall
be applied as provided in this Article VII.
Section 7.3. Administration of Claims. Neither the City, the Authority nor the Trustee shall
be required to prosecute any claim against or contest any settlement proposed by any insurer, but
any of them may prosecute any such claim or contest any such scttlement. In the event of a contest
by the City, it shall be at the City's expense, and the City may bring such claim or contest in the
name of the Authority, the City or both, and the Authority will join therein at the City's written
request upon the receipt by the Authority of an indemnity from the City against all costs, liabilities
and expenses in connection with such claim or contest.
Section 7.4. Other Insurance and Requirements for All Insurance. All insurance required
by this Article may be carried under a separate policy or a rider or endorsement; shall be taken out
and maintained with responsible insurance companies organized lmder the laws of one of the states
of the United States and qualified to do business in the State of Mimlesota; shall contain a provision
that the insurer shall not cancel or revise coverage thereunder without giving written notice to the
Eno!'! UnlmowlI document properly Imllle.
19
City and the Trustee at least thirty (30) days before the cancellation or revision becomes effective;
and shall name the City, the Authority and the Trustee as insured parties. The insurance required by
Sections 7.1 and 7.2 hereof may be provided by the City pursuant to an umbrella policy which
provides coverage for the amounts and the insurable incidents provided in such Sections. Ammally,
the City shall deposit with the Trustee policies evidencing any such insurance procured by it, or a
certificate or certificates of the respective insurers stating that such insurance is in force and effect,
along with a certificate from an insurance consultant stating that all insurance complies with the
requirements of this Article VII. Before the expiration of any such policy, the City shall furnish to
the Trustee evidence that the policy has been renewed or replaced by another policy conforming to
the provisions of this Article, unless such insurance is no longer obtainable, in which event the City
shall file its self-insurance plan with the Trustee.
Section 7.5. Indemnification. As between the Authority and the City, to the extent
permitted by the laws ofthe State of Mhmesota, the City assumes all risks and liabilities, whether or
not covered by insurance, for loss or damage to the Facilities and for injury to or death of any
person or damage to any property, whether such injury or death be with respect to agents or
employees of the City, the Authority or of third parties, and whether such property damage be to the
City or the Authority's property or the property of others, which is proximately caused by the
negligent conduct of the City, its ollicers, employees, agents and lessees, or arising out of the
operation, maintenance or use of the Sites and the Facilities by the City, its oflicers, employees,
agents and lessees. The City hereby assumes responsibility for and agrees to reimburse the
Authority for all liabilities, obligations, losses, damages, penalties, claims, actions, costs and
expenses (including reasonable attorney's fees) of whatsoever kind and nature, imposed on,
incurred by or asserted against the Authority or its officers or employees that in any way relate to or
arise out of a claim, suit or proceeding based in whole or in patt on the foregoing, to the maximum
extent permitted by law.
Section 7.6. Hazardous Substance Indemnification. The City agrees, to the extent permitted
by the laws of the State of Minnesota, to defend, indemnify and hold harmless the Authority and the
Trustee, their officers, employees, agents, successors and assigns (the "Indemnitees") from and
against, and shall reimburse the Indemnitees for, any and all loss, claim, liability, damage,
judgment, penalty, injunctive relief, injury to personal propelty or natural resources, cost, expense,
action or cause of action arising in connection with or as the result of any past, present or fllture
existence, use, handling, storage, transportation, manufacture, release or disposal of any Hazardous
Substance in, on or under the land upon which the Project is located, whether foreseeable or
unforeseeable, regardless ofthe source, the time of occurrence or the time of discovery (collectively
referred to as "Loss"). This indemnification against Loss includes, without limitation,
indenmification against all costs in law or in equity or removal, response, investigation, or
remediation of any kind, and disposal of such Hazardous Substances, all costs of determining
whether the land upon which the Project is located, is in compliance with, and of causing the land
upon which the Project is located, to be in compliance with, all applicable Environmental Laws, all
costs associated with claims for damages to persons, property, or natural resources, and the
Indemnitees' reasonable attorneys' and consultants' fees, court costs and expenses incurred in
connection with any of the above. For this purpose "Hazardous Substance" shall be defined as any
substance, the presence of which requires investigation, permitting, control or remediation under
any federal, state or local statute, regulation, ordinance or order, including without limitation:
Error! Unknown document property 1If1IlH".
20
(a) any substance defined as "hazardous waste" under the Resource
Conservation and Recovery Act, as amended (42 U.S.c. 96901, ct seg.);
(b) any substance defined as a "hazardous substance" undcr the Comprehensive
Environmental Response, Compensation and Liability Act, as amended (42 US.c. 99601, et
seq.);
(c) any substance defined as a "hazardous material" under the Hazardous
Materials Transportation Act (49 US.c. 91800, et seq.);
(d) any substance defined under any Minnesota statute analogous to (a), (b) or
(c), to the extent that said statute defines any term more expansively;
( e) asbestos;
(f) urea formaldehyde;
(g) polychlorinated biphenyls;
(h) petroleum, or any distillate or fl'action thereof;
(i) any hazardous or toxic substance designated pursuant to the laws of the State
of Minnesota; and
(j) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority.
Section 7.7. Damage. Destruction and Condemnation. If the Facilities or any portion
thereof is destroyed (in whole or in part) or is damaged by fire or other casualty or title to or the
temporary use ofthe Facilities or any part thereof, or the interest of the City or the Authority in the
Sites or the Facilities or any part thereof is taken under the exercise of the power of eminent domain
by any governmental body or by any person, firm or corporation acting under govenmlental
authority, the City shall have the rights with respect to the Net Proceeds of any insurance or
condemnation award specified in this Section, but the City shall be obligated to continue to pay the
Lease Payments and Additional Lease Payments due with respect to the Facilities. All Net Proceeds
shall be applied to the prompt repair, restoration, modification, improvement or replacement of the
Sites and the Facilities by the City, or, if the City elects not to repair or rebuild, all Net Proceeds
shall be applied to prepay the Lease Payments and Additional Lease Payments; in either event all
Net Proceeds not needed for the purpose shall belong to the City. In the event Net Proceeds exceed
$100,000, they shall be held by the Trustee and disbursed in payment of costs of repair, restoration,
modification, improvement or replacement substantially in accordance with the procedure for
disbursement of Bond proceeds from the Project Fund in Article IV of the Indenture.
Section 7.8. Insufficiencv of Net Proceeds. If the Net Proceeds are insufficient to pay in
full the cost of any repair, restoration, modification, improvement or replacement of the Sites and
the Facilities, the City shall either: (a) complete the work and pay any cost in excess of the amount
of the Net Proceeds, and the City agrees that if by reason of any such insufficiency of the Net
Error! Unknown document proper'ty name.
21
Proceeds, the City shall makc any payments pursuant to the provisions of this Section 7.8, the City
shall not be entitled to any reimbursement therefor from the Authority nor shall the City be entitled
to any diminution of the Lease Payments or Additional Lease Payments due with respect to the
Facilities; or (b) prepay the Lease Payments and Additional Lease Payments, in which event the Net
Proceeds shall be used for this purpose. If the City elects not to repair, rebuild or restore, the City
shall prepay or discharge the Lease Payments and Additional Lease Payments to the full extent of
the Net Proceeds.
Section 7.9. Cooperation of Authoritv. The Authority shall cooperate fiJlly with the City at
the expense of the City in filing any proof of loss with respect to any insurance policy covering the
casualties described in Section 7.7 hereof and in the prosecution or defense of any prospective or
pending condemnation proceeding with respect to the Sites or the Facilities or any part thereof and
will, to the extent it may lawfully do so, permit the City to litigate in any proceeding resulting
therefrom in the name of and on behalf of the Authority. In no event will the Authority voluntarily
settle, or consent to the settlement of, any proceeding arising out of any insurance claim or any
prospective or pending condemnation proceeding with respect to the Sites or the Facilities or any
part thereof without the written consent of the City and the Trustee.
Section 7.10. Condemnation of Other Propertv Owned bv the City. The City shall be
entitled to the Net Proceeds of any condemnation award or portion thereof made for destruction of;
damage to or taking of its property not included in the Sites or Facilities.
(The remainder ofthis page is intentionally left blank.)
Enur! 1I1llUlOWII document property nallle.
22
ARTICLE VIII
Option to Put'chase; Option to Pl'epay
Section 8.1. Option to Purchase or Prepay. The City shall have the option at any time to
purchase the Sites and Improvements by payment to the Trustee of the Purchase Price then
applicable, or to prepay unpaid Lease Payments and Additional Lease Payments, in whole or in part.
Section 8.2. Exercise of Option. The City shall give notice to the Authority of its intention
to exercise its purchase or prepayment option not less than forty-five (45) days in advance of the
date of prepayment or purchase, and shall pay to the Authority on the date of prepayment or
purchase the prepayment amount or (in the event of a purchase) an amount equal to the then current
Purchase Price, less any Net Proceeds to be applied to the amount to be so paid in accordance with
Section 7.7.
Section 8.3. Provision for Payment of Purchase Price; Discharge of City's Obligation. The
City may at any time provide for the payment of the Purchase Price or discharge its obligation to
pay Lease Payments due under this Lease by depositing irrevocably in escrow with a bank or trust
company, cash or direct obligations of the United States, bearing interest payable at such times and
at such rates and maturing on such dates, but not callable prior thereto, as shall be required to
provide money sufficient to payor prepay all unpaid Lease Payments and the applicable redemption
premium, if any, on the Outstanding Bonds, on the dates when they arc due or subject to
prepayment as provided in Section 8.1, as determined by the City, together with (i) computations
and an opinion letter of a certified public accounting firm showing and attesting to the sufficiency of
such money and securities for this purpose, and (ii) an opinion letter of Bond Counsel stating that
the deposit of such cash or securities will not cause the Bonds to become "arbitrage bonds" under
Section 148 of the Internal Revenue Code.
Section 8.4. Prerequisite; No Default. The City may exercise the rights specified 111
Sections 8.1, 8.2, and 8.3 only if it is not in default under this Lease.
(The remainder of this page is intentionally lell blank.)
Enor! Unlmown document property name.
23
ARTICLE IX
Assignment, Subleasing, Indemnification,
MOI.tgaging and Selling
Section 9.1. Assignment bv Authority. Except as expressly provided in this Section, the
Authority's rights and obligations under this Lease, including the right to receive and enforce
payment of the Lease Payments and Additional Lease Payments to be made by the City under this
Lease and its interest in the Sites and the Facilities, shall not be assigned, pledged, mOligaged or
transferred, in whole or in part, except to the Trustee pursuant to the Indenture. The City hereby
approves the assignment and mortgage made by the Authority to the Trustee under the Indenture of
the Authority's interest in the Sites, the Facilities, the Ground Lease, this Lease and the Lease
Payments to become due hereunder.
Section 9.2. Assignment and Subleasing by the City. The rights and obligations of the City
under this Lease may not be assigned by the City without the written consent of the Authority, the
Trustee and the Insurer. The City may also (with written consent of the Insurer) sublease the
Project, or any portion thereof; to any other entity, provided that the City furnishes to the Authority
and the Trustee an opinion of Bond Counsel that such sublease will not adversely affect the validity
ofthe Outstanding Bonds or the exemption of the interest thereon from federal income taxation.
Section 9.3. Restriction on Mortgage or Sale of Proiect bv the City. Without the prior
written consent of the Authority and the Trustee, the City will not mortgage, sell, assign, transfer or
convey the Sites or the Facilities or any p01iion thereof during the Term ofthis Lease.
(The remainder of this page is intentionally left blank.)
Knur! Unknown document properly name.
24
ARTICLE X
Events of DefauIt and Remedies
Section 10.1. Events of Default Dc11ned. Anyone or more of the following events shall be
an "Event of Default" under this Lease:
(a) Failure by the City to pay any Lease Payment, Additional Lease Payment, or
other payment required to be paid hereunder at the time and fi'om the sources speci11ed
herein.
(b) Failure by the City to observe and perform any covenant, condition or
agreement on its part to be observed or performed, other than as referred to in clause (a) of
this Section, for a period of sixty (60) days after written notice specifying such failure and
requesting that it be remedied has been given to the City by the Authority or the Trustee,
unless the Authority and the Trustee shall agree in writing to an extension of such time prior
to its expiration; provided, however, if the failure stated in the notice cannot be corrected
within the applicable period, the Authority and the Trustee shall not ul1\'easonably withhold
their consent to an extension of such time if corrective action is instituted by the City within
the applicable period and diligently pursued until the default is corrected.
(c) The occurrence of any of the following events:
(i) The City shall (a) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee, liquidator or the like of the City or of all or a
substantial part of its property, (b) commence a voluntary case under the Federal
Bankruptcy Code (as now or hereafter in effect), or (c) file a petition seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization, winding-up
or composition or adjustment of debts; or
(ii) A proceeding or case shall be commenced, without the application or
consent of the City, as the case may be, in any court of competent jurisdiction, seeking (a)
the liquidation, reorganization, dissolution, winding-up, or the composition or adjustment of
debts, of the City, (b) the appointment of a trustee, receiver, custodian, liquidator or the like
of the City, or (c) similar relief in respect of the City under any law relating to bankruptcy,
insolvency, reorganization, winding-up or composition or adjustment of debts, and such
proceeding or case has not been dismissed within sixty (60) days of the 11ling thereof.
The provisions of Section 10.I(b) arc subject to the following limitation: if by reason of
force maieure either party is unable in whole or in part to carry out its obligations under this Lease,
it shall not be deemed in default during the continuance of such inability or during any other delays
which arc a direct consequence of the force maieure inability, and the time for such performance
shall be extended to cover such delays. The term "force maieure" as used herein shall mean,
without limitation, the following: acts of God; strikes, lockouts or other industrial disturbances; acts
of public enemies; orders or restraints of any kind of the government of the United States of
America or any of its departments, agencies or officials, or any civil or military authority, or the
Error! Unknown document p,'opcrty name.
25
State of Mitmesota or any of its departments, agencies or officials; insurrections; riots; landslides;
earthquakes; fires; storms; droughts; floods; explosions; breakage or accident to machinery,
transmission pipes or canals; or any othcr cause or event not reasonably within the control of a party
and not resulting from its ncgligence. Each party agrees, however, to remedy with all reasonable
dispatch the cause or causes prcvcnting it from carrying out its agreemcnts.
Section 10.2. Remedies on Default. Whcnever any Event of Default shall havc happened
and bc continuing, thc Trustee may take, but only upon not less than five (5) days' written notice to
the City, one or any combination ofthc following remedial steps:
(a) Without terminating this Lease, re-enter and take possession of the Sites and
the Facilities and exclude the City from using it until the Event of Default is cured; or
(b) Subject to the provisions of Section 5.6, take any action at law or in equity
which may appear necessary or desirable to: (i) eollect the Lease Payments and Additional
Lease Payments then due for the Fiscal Y car then in etIcet, (ii) collect any Lease Payments
and Additional Lease Payments to beeome due and payable during the current Fiscal Year,
01' (iii) enforce perfonmmce and observance of any obligation, agreement or covenant of the
City undcr this Lease; or
(c) Tcrminate the Term of this Lease, exclude the City fl'om possession of the
Facilities, and use its bcst etIorts to lease the Facilities to another for the aecount of the City,
holding the City liable for the differenee between the rentals received and the Lease
Payments and Additional Lcase Payments which would have been receivablc hereunder for
the Fiscal Year thcn in efIect.
This provision does not limit any other remedies which the Trustee or the Authority may
have under the Indenture 01' any other document.
Section 10.3. Delay; Notice. No dclay or omission to exercise any right or power aceruing
upon any default shall impair any such right or power or shall be construed to be a waiver thereof,
but any such right and power may be cxercised from time to time and as often as may be deemed
expedient. In order to entitle any party to exercisc any remedy reserved to it in this Lcase it shall
not be necessary to give any notice, othcr than such notice as may be required in this Lease.
Seetion lOA. No Remedy Exclusive. No remcdy herein conferred upon or reserved to the
Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in
addition to every other remedy given under this Lease or now or hereafter existing at law or in
equity. No delay 01' omission to exercise any right or power accruing upon any default shall impair
any such right 01' power or shall be construed to be a waiver thereof, but any such right and power
may be exercised from time to time and as oflen as may be deemed expedient.
Section 10.5. No Additional Waiver Implied by One Waiver. In the cvent any agreement
contained in this Lease is breached by either party and thereafter waived by the othcr party, such
waiver shall be limited to the particular breach so waived and shall not be deemed to waivc any
other breach hereunder.
Error! Unknown document property name.
26
ARTICLE XI
Administrative I'rovisions
Section 11.1. Notices. All notices, certificates or other cOlmnunications hereunder shall be
sutIicicntly given and shall be deemed given when dclivered or deposited in the United States mail
in certificd or registered IDrm with postage fully prepaid:
If to the City:
City of Columbia Heights
590 40lh Avenuc Northeast
Columbia Heights, Minncsota 55421-3878
Attention: City Manager
Ifto the Authority:
Columbia Heights Economic Development Authority
590 401h Avenue Northeast
Columbia Heights, Minnesota 55421-3878
Attention: Executive Dircctor
If to the Trustee:
U.S. Bank National Association
EP-MN-WS3C
60 Livingston A venuc
St. Paul, Minnesota 55107
Attention: Corporate Trust Services
The above-named persons, by notice given hereunder, may designate different addresses to which
subsequent notices, certificates or other communications will be scnt.
Section 11.2. Binding Effect. This Lease shall inure to the benefit of and shall be binding
upon the Authority and the City and their respective successors and assigns.
Section 11.3. Severability. In thc cvent any provision of this Lease shall be held invalid or
unenforceable by any court or competent jurisdiction, such holding shall not invalidate or render
unenforceable any other provision hereof.
Section 11.4. Amendments, Changes and Modifications. This Lease may be amended or
any of its terms modified only by written amendment authorized and executed by the City and the
Authority; provided that no such amendment shall be efIectivc without thc consent of the Trustee or
any other person or entity to whom the rights of the Authority to receive Lease Payments due
hereunder has been assigned.
Section 11.5. Further Assurances and Corrcctive Instruments. The Authority and the City
agree that thcy will, if nccessary, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplemcnts hcreto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of the Sites and the
Facilities or for carrying out the cxpressed intention ofthis Lease.
Eno!'! Unknown document property name.
27
Section 11.6. Execution in Counterparts. This Lease may be simultaneously executed in
several counterparts, each of which shall be an original and all of which shall constitute but one and
the same instrument.
Section 11.7. Applicable Law. This Lease shall be governed by and construed 111
accordance with the laws of the State of Minnesota.
Section 11.8. Authorized Oflicers. Whenever under the provIsIons of this Lease the
approval of the Authority or the City is required, or the Authority or the City is required to take
some action at the request of the other, such approval of such request shall be given for the
Authority or for the City by an Authorized Oflicer, and any party hereto shall be authorized to rely
upon any such approval or request.
Section 11.9. Captions. The captions or headings in this Lease are for convenience only
and in no way define, limit or describe the scope or intent of any provisions or Sections of this
Lease.
(The remainder of this page is intentionally left blank.)
Error! lJnknown document property I1nIllC.
28
IN WITNESS WHEREOF, the Authority has caused this Lease to be executed in its
corporate name by its duly authorized of1icers; and the City has caused this Lease to be executed in
its name by its duly authorized officers and sealed with its corporate seal, as of the date first above
wri lten.
COLUMBIA HEIGHTS ECONOMIC DEVELOPMENT AUTHORITY
By
Its President -Gary L. Peterson
By
Its Executive Director-Walter R. Fehst
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of September,
2007 by Gary L. Peterson, the President of the Columbia Hcights Economic Development
Authority, a public body corporate and politic and political subdivision under the laws of
Minnesota, by and on behalf of said authority.
Notary Public
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of September,
2007 by Walter R. Fehst, the Executive Director of the Columbia Heights Economic
Development Authority, a public body corporate and politic and political subdivision under the
laws of Minnesota, by and on behalf of said authority.
Notary Public
Error! Unknown document property lIallle.
S-I
CITY OF COLUMBIA HEIGHTS, MINNESOTA
By
Its Mayor-Gary 1. Peterson
By
Its City Manager- Walter R. Fehst
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of September,
2007 by Gary L. Peterson, the Mayor of the City of Columbia Heights, Minnesota Authority, a
home rule charter city and political subdivision under the laws of Minnesota, by and on behalf of
said authority.
Notary Public
STATE OF MINNESOTA
} ss
COUNTY OF ANOKA
The foregoing instrument was acknowledged before me this day of September,
2007 by Walter R. Fehst, the City Manager of the City of Columbia Heights, Minnesota, a home
rule charter city and political subdivision under the laws of Minnesota, by and on behalf of said
authority.
Notary Public
E"I'm'! lJnknowll doclIlIlent property name.
S-2
EXHIBIT A
Legal Desuiption of Sites and Facilities
1. The legal description of the Sites is as follows:
37th Avenue Liquor Store:
Lots 2 and 2A, Block 1, Hart Lake Addition, according to the plat thereof on file
in the Office of the Registrar of Titles and the Of1lce of the County Recorder in
and for Anoka County, Minnesota
Lot 2, Block 1 is registered property
Central A venue Liquor Store:
Lot 19, Revised Auditor's Subdivision No. 15, according to the plat thereof on
file in the Office of the Registrar of Titles and the Office of the County Recorder
in and for Anoka County, Minnesota
2. The description of the facilities is as follows:
A new 12,000 square foot liquor store with approximately 46 parking
spaces to be located at 2105 37th Avenue in the City of Columbia Heights,
Minnesota
A new 16,000 square foot liquor store with approximately 48 parking
spaces to be located at 4950 Central Avenue in the City of Columbia Heights,
Minnesota
3. The Sites are subject to the following Permitted Encumbrances:
Error! UlllmoWIl document propcl'ty nallle.
A-I
Lease Payment Dne Date
Fifteen Business Days
Prior
To:
August 1, 2008
February I, 2009
August 1, 2009
February I, 20 I 0
August 1, 2010
February 1, 20 II
August 1,2011
February 1,2012
August 1,2012
February 1,2013
August 1,2013
February 1,2014
August 1,2014
February 1, 2015
August 1,2015
February 1, 2016
August 1,2016
I'ebruary 1,2017
August 1,2017
February 1,2018
August 1,2018
February 1,2019
August 1,2019
Error! Unknown document pl'opcrty name.
EXHIBIT B
Schedule of Lease Payments
Amount
Lease Payment Due
Date
Fifteen Business Days
Prior
To:
Februmy 1, 2020
August 1, 2020
February 1, 2021
August 1, 2021
February I, 2022
August 1, 2022
I'ebruary I, 2023
August 1, 2023
I'ebruary I, 2024
August I, 2024
February I, 2025
August I, 2025
February 1, 2026
August I, 2026
I'ebruary 1,2027
August 1, 2027
February 1, 2028
August 1, 2028
February I, 2029
August 1, 2029
February 1, 2030
Amount
B-1
EXHIB IT C
COMPLETION CERTIFICATE
The undersigned ofIicer of the City of Columbia Heights, Minncsota (the "City"),
lessee under that certain Leasc-Purchase Agreement dated as of September 1,2007, (the
"Lease"), between the Columbia Hcights Economic Development Authority (the
"Authority") and the City, hereby certifies to the Authority, to U.S. Bank National
Association, St. Paul, Minnesota (the "Trustee") as Trustee under a Trust Indenture dated
as of Scptember 1,2007 (the "Indenture") between the Authority and the Trustee, that as
of , 20_ (the "Completion Date"), the Improvements described in the
Lease have been completed in their entirety and are ready to be placed in service and all
other property which constitutes the Facilities has been acquired and installed.
Construction and acquisition of the Facilities have been completed and the Project Costs
have been paid, except for any portion thereof which has becn incurred but is not now
due and payable, or thc liability for the payment of which is being contested or disputed
by the City, and for the payment of which the Trustee has been directed to retain
specified amounts of money within the Project Fund. Notwithstanding the foregoing, this
certificate is given without prejudice to any rights against third parties which exist at the
date hereof or which may subsequently come into being. Attached as Exhibit A to this
certificate is a list of the equipment financed with proceeds of the Series 2007B Bonds
and included as part of the Facilities. Capitalized terms used in this certificate and
defined in the Lease or the Indenture are used with the meanings given therein.
CITY OF COLUMBIA HEIGHTS, MINNESOTA
By
Its Citv Managcr- Walter R. Fehst
El'I'ol'! Unlmm'l'lI document propert)' name.
B-2