HomeMy WebLinkAbout11-25-1991 HRA Meetingn
'l
ki
It.
I'.'.V
&
:r.‘
i
I.,
lU
V
'.V , ■ ■.,
111991.5
HOOSING AND REDEVELOPMENT AOTHORITY
CITY OF ORONO, MINNESOTA
TIHB:
DATS:
6:30 p.m.
November 25, 1991
LOCATION: City Council Chambers
AGENDA
1.
2.
Roll Call
Adoption of Resolution Awarding the Sale of Bonds
and Approving Documents, Including Tabulation of
Bids
3. Adjournment
I %
BID TABULATION f/'
$4,000,000 Public Facllltias Revenue Bonds, Series 1091
Housing and Redevelopment Authority In and For the City of Orono, Minnesota
SALE: Monday, November 25,1991
AWARD: CRONIN & COMPANY. INC.
BATING: Moodv ’s "Aa"
NAME OF BIDDER
COUPON
RATE YEAR
NET INTEREST COST
& RATE PRICE
CRONIN & COMPANY. INC.
MinneapoHs, Minnesota
Smith Barney. Harris Upham & Co., Inc.
Part( Investment Corporation
John Q. Kinnard & Company, Inc.
QRIFFIN, KUBIK, STEPHENS
& THOMPSON. INC.
Chicago, Iliinois rofCLAYTON BROWN & ASSOCIATES. INC.
Chicago, Iliinois
KEMPBt SECURITIES GROUP, INC.
CNcago, Illinois
PIPER, JAFFRAY & HOPWOOD INC.
MinneapoHs, Minnesota
NOR WEST INVESTMENT SERVICES, INC
MinneapoHs, Minnesota
Dougherw, DavMns, Strand & Bigelow, Inc.
Cralg-Hamjm, Inc.
Moore, Juran & Company, Inc.
4.50%1994
4.75%1995
4.90%1996
6.10%1997
6.30%1998
6.50%1999
6.70%2000
6.80% 2001
6.90%2002
6.00%2003
6.10%2004
6.20%2005
6.30%2006
6.40%2002
6.50%2008
5.40%1994
5.50%1^^^5 -1997
6.60%1998 -1999
5.75%2000
5.90%1
6.00%2002
6.20%2003
6.25%4 -2005
6.375%2006 -2008
5.10%1994 -1997
5.30%1998
5.50%1999
5.70%2000
5.90%2001
6.00%2002
6.10%2003
6.20%2004
6.30%2005
6.40%2006
6.50%2007
6.60%2008
$2,550,040.42 $3,950,000.00
6.1734%
$2,591,574.17 $3,945,000.00
6.2739%
$2,594,380.00 $3,945,000.00
6.2807%
' M h itetlnc.
ll.tfM, I, fm.NCI
2950 Noraest Center
90 South Seventh Street
MinneapohS MN 55402 4100
(612> 339*8291 FAX (612» 339-0854
I'
?•'
i
r,.
M;
i- ■
I f"
Ir*'
I ’'
» ■
t
P-
ri », •»
>. ' ■
^. if.
$4,000,000 Public Facilities Rev'enue Bonds
Orono HRA
Sale: November 25, 1991
SUMMARY
Coupon interest rate
Coupon interest dollars
Plus discount (an interest
cost)
Net interest cost (coupon
interest dollars plus
discount)
DIFFEReJCE
Net interest rate (coupon
rate plus discount)
_ _
- - J- -■A ■■ t -
Estimate Actual
6.50%
$2,684,933.33
6.05239%
$2,500,040.42
60,000.00 50,000.00
$2,744,933.33 $2,550,040.42
$194,892.91
6.645261 6.17341
aiLERS AND ASSOCIATES. INC.
Financial Advisors to the HRA/City
Moodyi Investors Service wcmmti SI'MI. Naw Yortt. NY. 10007
Mev«Bb«r 21, 1991
I
Li
f.
b.i,
I
?>
Mr. Thc»aa Kuahn
Financa Diraetor
City of orono
P.O. Box €6
Orono« Ninnaaota
Daar Mr. Xuahnt
55323
Na viah to inform you that our Rating Coamittaa haa
aaalgnad tha rating of AB to tha $4.coo.000 Orono Housing &
Radavalopmant Authority. Ninnaaota Public Facility Ra^nua
Bonda Bariaa 1991 to ba aold Novembar 25, 1991. ■
tfa hava alao raviavad and confimad tha rating of AB-.1
to tha outatanding Orono, Ninnaaota Ganaral Obligation
Bonda.
In ordar that wa may maintain the curraney of this
rating ovar the pariod of tha loan, wa will raguira currant
financial and othar updating information, wa will
appraoiata your continued eooparation in tha future.
Na would appraciata receiving a copy of the final
Official Statamant whan availabla.
Should you hava any questions regarding the above,
plaaaa do not haaitate to contact Oov iskowiti at
(212) 553-7936.
Sincerely,
V) ‘
Daniel N. Reimowits
executive 7ica president
Director
Public Finance Department
DAItogj
cot Ns. Diana Loofcard
Analyat
Bhlars 6 Assooiatas
90 South Seventh Street
Minnaapolla, Minnesota 5S402-4ioo
i;■fi"111991.3
L’v
ii’-
i?-
f
h
I.
k’
TO:
FROM:
DATS:
HRA Members
Ron Moorse, City Administrator /'/
November 19, 1991
f^/k
SUBJECT: Award of Sale of Bonds and Approval of Documents
The bond sale for the new city facilities will be held at 10:30
a.m. on Monday, November 25, 1991 at Ehlers* offices. The HRA
will meet at 6:30 p.m. on November 25th to review the bids and
award the sale of the bonds. Dorsey and Whitney will provide a
resolution awarding the sale of the bonds for adoption by the
HRA.
The HRA will also approve the documents related to the bond sale
including the Trust Indenture between the HRA and the Trustee and
the Lease-Purchase Agreement between the City and the HRA.
Carolyn Crude, Tom Barrett, Ed Callahan and myself met with the
attorney from Dorsey and Whitney to review these documents. I
have enclosed a copy of the Lease-Purchase Agreement with the
changes suggested during our meeting. I have not enclosed the
Trust Indenture because it is a fairly thick document. If you
would like a copy of the Trust Indenture, please call me.
I'rS'
I \
it-
1
6.
I
f'’*
■: A-
**, I
I.r
Draft ofyill/13/91
LEASE-PURCHASE CONTRACT
between the
HOUSING AND REDEVELOPMENT AUTHORITY IN AND FOR
THE CITY OF ORONO, MINNESOTA
As Lessor
and
CITY OF ORONO, MINNESOTA
As Lessee
Dated as of December 1, 1991
This Instrument drafted by:
Dorsey ( Whitney
22C0 First Bank Place East
Minneapolis, Minnesota S5402
THIS LEASE-PURCHASE CONTRACT, dated as of December 1,
1991 (this Lease), by and between the HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE CITY OF ORONO, MINNESOTA as lessor (the
Authority), whose address is City Hall, P. 0. Box 66, Crystal Bay,
Minnesota 55323 and CITY Of ORONO, MINNESOTA, as lessee (the
City), whose address is City Hall, P. 0. Box 66, Crystal Bay,
Minnesota 55323;
WHEREAS, the Authority is authorized by Minnesota
Statutes, Section 469.012, Subdivision 1(7), within its area of
operation and without the adoption of an urban renewal plan, to
acquire real property, and to demolish, remove, rehabilitate or
reconstruct the buildings and improvements or construct new
buildings or improvements thereon; and
WHEREAS, the Authority is authorized by Minnesota
Statutes, Section 469.012, Subdivision 1(21), to sell or lease any
of its real or personal property or interests therein; and
WHEREAS, the City has now requested Authority to finance
the construction of a new city hall and facilities to house the
police and public wor)cs departments (as hereinafter defined, the
Project) and Authority has agreed to finance the construction of
the Project and to lease and agree to sell the Project to the
City, pursuant to the terms and conditions of this Lease; and
WHEREAS, City, as the agent of Authority, has agreed to
construct the Project, and for this purpose has entered or will
enter into a contract with the Architect and Contractor described
herein for such purpose; and
WHEREAS, Authority has the power to s».ll the Project to
City and enter into this Lease pursuant to Minntsota Statutes,
Section 465.035 and Section 471.64, Subdivision 1 and City has the
power to acquire the Project and enter into this Lease pursuant to
Minnesota Statutes, Sections 471.64, Subdivision 1 and Section
465.71;
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:
■ ......
■r.
ARTICLE I
DEFINITIONS AND EXHIBITS
Section 1.1. n^fin ^ tinns . Unless the context otherwise
requires, the terms defined in this Section shall, for all
purposes of this Lease, have the meanings herein specified.
Arrhir^rr; a licensed architect in the State of
Minnesota to be selected by the City to prepare Plans and
Specifications for the Project.
Authoriry Rpprgfigntative: The Chairperson or the
Secretary of the Authority or any other person authorized to act
on behalf of the Authority under or with respect to this Lease, as
evidenced by a certificate conferring such authority executed by
the Chairperson, given to Trustee and City.
Bond Fund! The fund SO designated and established by
the Trustee pursuant to the Trust Inaenture.
Bonds: The $4,000,000 Public Facilities Revenue Bonds,
Series 1991, to be issued by Authority pursuant to the Trust
Indenture together with any additional bonds issued pursuant to
Section 2.09 of the Trust Indenture.
City Representative; The Mayor or the City Clerk, or
any person authorized by law to act on behalf of the City under or
with respect to this Lease, as evidenced by a certificate
conferring such authority executed by the Mayor and given to the
Trustee and the Authority.
Code! The Internal Revenue Code of 1966, as now or
hereafter amended, and the regulations and revenue rulings and
procedures issued pursuant thereto from time to time.
Completion Certificate: A certificate in the form
attached hereto as Exhibit 0 executed by the Authority and the
City, stating that the Project has been completed in accordance
with the Plans and Specifications.
Completi^ion Date; With respect to the Project, the date
upon which a final Completion Certificate is issued with respect
thereto by Authority and City and delivered to Trustee.
Conatruction Fund: The fund SO designated and
established by the Trustee pursuant to the Trust Indenture.
Company.
Cona^^itjiijop : Kraus-Anderson Construction
1-1
ir'-'
rnnr rarrnr! Each Contractor, subcontractor or material
supplier, to be selected by the City, providing services or
materials or both for the acquisition and construction of the
Project.
ro^t or PrnTffcr CostS! All Capital costs incurred by
the City for the acquisition, construction and installation of the
Project as specified in Section 4.03 of the Trust Indenture.
Fij^eal Year! Each twelve-month fiscal period of the
City commencing on January 1 of any year and ending on December 31
of said year.
Independent Counsel: An attorney duly admitted to the
practice of law before the highest court of tne State of Minnesota
who is not a full-time e.mployee of Authority, City or an assignee
thereof.
Interest: The portion of each Lease-Purchase Payment
designated as interest in the attached Exhibit B.
Land; The real estate described on Exhibit A hereto,
upon which the Project is to be located.
Lease: This Lease-Purchase Contract, and any duly
authorized and executed amendment hereto.
Lease-Purchase Payment: Any payment due from the City
to the Authority under Section 6.1 of this Lease.
Net Proceeds; Any insurance proceeds or conde.mnation
award paid with respect to the Project, remaining after payment
therefrom of all expenses incurred in the collection thereof.
Payment Date! The date upon which any Lease-Purchase
Payment is due and payable as provided in the attached Exhibit C.
Permitted Encumbrances; As Of any particular time: (i)
liens for taxes and assessments not then delinquent, or which the
City may, pursuant to provisions of Article VII hereof, permit to
remain unpaid, (ii) this Lease and the Trust Indenture, (iii) 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,
(iv) si.ch minor defects, irregularities, encumbrances, easements,
rights-of way and clouds on title as normally exist with respect
to properties similar in character to the Land and do not, in the
opinion of Independent Counsel, materially impair the property
affected thereby for the purpose for which it was intended; or (v)
easements, restrictions or encumbrances, if any, shown on Exhibit
A hereto.
1-2
n:
Pijin«t anH <?par i f t raf long r Architectural and engineering
drawings and specifications prepar-jd by the Architect describing
the Project and any changes therein similarly approved.
Pr<nrinal! The portion of each Lease-Purchase Payment
designated as pri cipal in the attached Exhibit B.
The governmental facilities de -ribed in
greater detail in Exhibit B bnreto.
PnT-rha«;»» Prire: As of any date the Bonds are to be
redeemed in whole, the aggregate unpaid Principal, plus Interest
accrued and due on said date.
Riigftrve Fund: The fund so designated and established by
the Trustee pursuant to the Trust Indenture.
State: The State of Minnesota.
State and Federal Law or Laws! The Constitution and
laws 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 federal agency.
Term of the Lea.se or Lease Term; The per..od during
which this Lease remains in effect as specified in Sections 5.1
and 5.2.
Trusteei \American National Bank and Trust Company, of
St. Paul, Minnesota, acting pursuant to the Trust Indenture.
Trust Indenture: The Trust Indenture dated as of the
date hereof, between Authority and the Trustee, and any duly
authorized and executed amendment thereto.
Section 1.2. Exhibits.
The following Exhibits are attached to and by reference
made a part of this Lease:
Exhibit A! A legal description of the Land.
Exhibit B: A description of the Project.
Exhibit C! The schedule of Lease-Purchase Payments to
be paid by City to Authority, showing the date and amount of each
Lease-Purchase Payment.
Exhibit D: A form of Completion Certificate.
1-3
j
Wr
•:f
f-I’
m
4kkfr.r
ARTICLE II
REPRESENTATIONS AND COVENANTS OF CITY AND AUTHORITY
Section 2.1. inns ahH Toygnant-S nf
City represents r.nd covenants as follows:
iili iiir irtii
(a) The Constitution and the laws of the State
authorize City to acquire, construct, operate and
maintain the Project, to enter into this Lease and the
transactions contemplated hereby, and to carry out its
obligations under this Lease.
(b) The officers of City executing this Lease are
duly authorized to execute and deliver this Lease under
the Constitution and laws of the State.
(c) City has complied and will comply with all
open meeting laws, all public bidding laws and all other
State and Federal Laws applicable to this Lease and the
construction and furnishing of the Project.
<d) City will use the Project during the Lease
Term only to perform essential governmental functions of
City, and will not enter into any lease, use agreement,
management agreement or other Lease which would cause
the Bonds to be considered "private activity bonds" or
"private loan bonds" pursuant to Section 141 of the
Code.
(e) During the Term of the Lease, City will not
take or permit any of its officers to take any action
with respect to the Lease or the Project which would
cause Interest on the Bonds to become includable in
gross income of the recipient for federal income tax
purposes under the Code, and will take all actions
necessary to ensure that interest on the Bonds remains
excludable from gross income of the recipient under the
Code, insofar as it has che power and authority to take
such actions.
(f) The execution and delivery of this Lease and the
other agreements contemplated hereby to which City is a
party and the consummation of the transactions
conten^lated hereby and thereby and the fulfillment of
the terms hereof and thereof will not conflict with, or
constitute on the part of City a breach of, or a default
under, any existing (i) law, or (ii) provisions of any
legislative act, constitution or other proceeding
2-1
-i ...
(kl:-
■^■7.
■'r’-
j. •MS'ftK-
m:\' r'- .1
WS'-?
t.K -
establishing or relating to the establishment of City or
its affairs or its resolutions, or (iii) agreement,
indenture, mortgage, lease or other instrument to which
City is subject or is a party or by which it is bound.
(g) No officer of City who is authorized to take
part in any manner in making this Lease or any contract
contemplated hereby has a personal financial interest in
or has personally and financially benefited from this
Lease or any such contract.
(h) There is not pending or threatened any suit,
action nr proceeding against or affecting City before or
by any court, arbitrator, administrative agency or other
governmental aut.hority which materially and adversely
affects the validity, as to City, of this Lease, any of
the obligations of City hereunder or any of the
transactions contemplated hereby.
S€Ction 2.2* P.^pr^s^nt^at inns and Covenant" nf
Authority. The Authority represents and covenants as follows:
(a) The Constitution and the laws of the State
authorize Authority to acquire and construct the
Project, to enter into this Lease and the transactions
contemplated hereby, and to carry out its obligations
under this Lease.
(b) The officers of Authority executing this Lease
are duly authorized to execute and deliver this Lease
under the Constitution and laws of the State.
(c) The Authority has complied and will comply
with all open meeting laws, all public bidding laws and
all other State and Federal Laws applicable to this
Lease and the construction and furnishing of the
Project.
(d) The Authority will not enter into any lease,
use agreement, management agreement or other contract
which would cause the Bonds to be considered "private
activity bonds" or "private loan bonds" pursuant to
Section 141 of the Code.
(e) During the Term of the Lease, the Authority
will not take or permit any of its officers to take any
action witi. respect to the Lease, the Project
which would cause interest on the Bonds to become
includable in gross income of the recipient for federal
income tax purposes under the Code, and will take all
2-2
’I
ii -, W^'
■ :
SW''WK
Lj'v'^iv ITp
% I
P'"-’
-r-^ :.•',*•.■■■
MA b:s
ir
Section 3.3. rifv»s Liablllg.Y. As between Author
and City# City assumes liability for all risks of loss during the
acquisition and construction of the Project. City shall maintain#
or require the Contractor to maintain# in force during the entire
acquisition# delivery and installation period of the Project#
payment and performance bonds in amounts not less than the amounts
of any contracts with any Contractor entered into with respect to
the Project# builoer's risk or property damage insurance in an
amount not less than the full value of all work done and materials
and equipment provided or delivered by the Contractor#
comprehensive liability insurance# worker's compensation insurance
and other insurance required by law or customarily maintained with
respect to like projects.
3-2
k.
u
I'it ■
‘'I;'
n'"
i"-fV:';
5VV
[ii
E*'
*1
ARTICLE IV
AGREEMENT TO SELL
Section 4.1. Sale. Authority hereby agrees to sell the
Project to City, and City hereby agrees to purchase the Project
from Authority# upon the terms and conditions set forth in this
Lease. The principal amount of the sale price is $4#000#000#
payable with interest in Lease-Purchase Payments as set forth in
Section 6.1 hereof.
Section 4.2. Posaeaslon and En-*.oyment.. Authority
hereby covenants with respect to the Project to provide City
during the Term of the Lease with quiet use and enjoyment of the
Project and City shall during such Lease Term peaceably and
quietly have ani hold and enjoy the Project# without suit, trouble
or hindrance from Authority# except as expressly set forth in this
Lease. Authority will# at the request of City and at the City's
cost# join in any legal action in which City asserts its right to
such possession and enjoyment to the extent Authority may lawfully
do so. Authority shall have the right to enter in and upon the
Project as provided in Section 4.3.
Section 4.3. Authority Aceeas to P^Q^egt■ City agrees
that Authority and any Authority Representative shall have the
right at all reasonable times to enter upon and to examine and
inspect the Project. City further agrees that Authority and any
Authority Representative shall have such rights of access to the
Project as may be reasonably necessary to cause the proper
maintenance of the Project in the event of failure by City to
perform its obligations hereunder# or to carry out Authority’s
obligations and exercise Authority's rights under Article XII# or
to determine whether City is in compliance with this Lease.
4-1
.S.■ .
ARTICLE V
TERM OF LEASE
Section 5.1. T<>rm of Lgaa This Lease shall be and
remain in effect with re.*oect to the Project for a Lease Term
commencing on the date hereoi. -?nd continuing until February 1.
2008. or until terminated as provided in Section 5.2.
Section 5.2. Termination of Lease Term. The Term of
the Lease will terminate prior to February 1^ 2008 upon the
occurrence of the first of the following events:
(a) termination of the Lease pursuant to Section
6.4 hereof;
(b) defeasance of the Lease pursuant to Section
10.3 hereof;
(c) a default by City and the Authority's election
to terminate this Lease pursuant to Article XII; or
(d) the payment by City of the Purchase Price,
together with any fees and expenses due Authority or
Trustee rieret^nder or under the Trust Indenture.
Section 5.3. Conveyanea. Upon the termination of the
Lease as set forth in (b) or (d) above. Authority shall convey all
of its right, title and interest in the Project by quit claim deed
and bill of sale. City shall pay all expenses of preparation of
the documents of conveyance and all taxes and charges payable in
connection with the conveyance. City shall take title subject to:
(a) those liens and encumbrances, if any, to which
the property was subject when conveyed to Authority;
(b) those liens and encumbrances, if any, created,
permitted or acquiesced in by City, or to the creation
of which Authority did not consent;
(c) those liens and encumbrances, if any,
resulting from the failure of City to perform or observe
any of its agreements in this Lease;
(d) Permitted Encumbrances, other than this Lease;
and
(e) the lien of unpaid installments of special
assessments levied against the Project and not yet due
and payable.
5-1
'-y “!'
!f
}}
tf-
r-
• :
■
■C-:-
'h-< .p":\-i<
■iA-.
ARTICLE VI
LEASE-PURCHASE PAYMENTS; FEES AND EXPENSES
Section 0.1. Lgasg-Pureha.<» P^ymenta. City Sh%il pay
Lease-Purchase Payments with respect to the Project# at tht- times
and in the amounts as set forth in Exhibit C. The Lease-Purchase
Payments shall be payable to the Trustee on behalf of the
Authority In lawful money of the United States of America.
Amounts already on deposit in the Bond Fund as of each Payment
Date may be credited against the Lease-Purchase Payment otherwise
due on such date.
Section 6.2. Lease-Purchasg Payments to bg
Onganditianai. Except as provided in Section 6.4# the obligation
of Ci*- ' to make Lease-Purchase Payments due with respect to the
Project or any other payments required hereunder shall be absolute
and unconditional in all events. Notwithstanding any dispute
between City and Authority or any other person# City sha..x make
all Lease-Purchase Payments and other payments required hereunder
when due and shall not withhold any Lease-Purchase Payment or
other payment pending final resolution of such dispute nor shall
City assert any right of set-off or counterclaim against its
obligation to make such Lease-Purchase Payments or other payments
required under this Lease. City's obligation to make
Lease-Purchase Payments or other payments during the Lease Term
shall not be abated through accident or unforeseen circumstances.
Section 6.3. current Expense. The obligations of the
City under this Lease# including its obligation to pay the
Lease-Purchase Payments due with respect to the Project in any
Fiscal Year for which this Lease is in effect# shall constitute a
current expense of the City for such Fiscal Year and shall not
constitute an indebtedness of the City within the meaning of the
Constitution and laws of the State. Nothing herein shall
constitute a pledge by the City of any taxes or other moneys#
other than moneys lawfully appropriated from time to time by or
for the benefit of Authority’s annual budget and the proceeds or
Met Proceeds of the Project and Land# to the payment of any
Lease-Purchase Payment or other amount coming due hereunder.
Section 6.4.Inn The City shall have
in whole but not inthe right to cancel and terminate this Lease#
part# at the end of any Fiscal Year of the City# in the manner and
subject to the terms specified in this Section and Section 6.6# if
the City's governing body does not appropriate moneys sufficient
to pay the Lease-Purchase Payments coming due in the next Fiscal
Year. Lack of a sufficient appropriation shall be evidenced by a
specific provision in the budget of the City# which prohibits the
expenditure of the City funds for this purpose. The City may
effect such termination by giving the Authority a written notice
of termination and by paying to the Authority any Lease-Purchase
6-1
r?’"’.?■
' .
mA mr^-
#
■;p <
.V
■
'■
‘k
*•• 'v^,
mm^
actions necessary to ensure that interest on the Bonds
remains not includable in gross income of the recipient
under the Coder insofar as it has the power and
authority to take such actions.
(f) The execution and delivery of this Lease and
the other agreements contemplated hereby to which
Authority is a party and the consummation of the
transactions contemplated hereby and thereby and the
fulfillment of the terms hereof and thereof will not
conflict withr or constitute on the part of Authority a
breach ofr or a default underr any existing (i) lawr or
(ii) provisions of any legislative act, constitution or
other proceeding establishing or relating to the
establishment of Authority or its affairs or its
resolutions, or (iii) agreement, indenture, mortgage,
lease or other instrument to which Authority is subject
or is a party or by which it is bound.
(g) No officer of Authority who is authorized to
take part in any manner in making this Lease or any
contract contemplated hereby has a personal financial
interest in or has personally and financially benefited
from this Lease or any such contract.
(h) There is not pending or threatened any suit,
action or proceeding against or affecting Authority
before or by any court, arbitrator, administrative
agency or other governmental authority which materially
and adversely affects the validity, as to Authority, of
this Lease, any of the obligations of Authority
hereunder or any of the transactions contemplated
hereby.
2-3
I’■T, ■ ■
I
ARTICLE III
CONSTRUCTION MID FURNISHING OF PROJECT
Section 3.1. ritv ro Arr as Agent. Authority hereby
irrevocably appoints City as its agent in connection with the
construction of the Project. City, as agent of Authority, will
enter into a contract with the Contractor providing for the
acquisition, construction and furnishing of the Project on the
Land in accordance with the Plans and Specifications. City has
caused or shall cause the Architect to prepare the Plans and
Specifications for the Project, and shall ensure that such Plans
and Specifications comply with applicable State law.
Section 3.2. Pro-iect: Cnst-s: Payrp.pnt of Costs. The
Project Costs are not expected to exceed S_ _ _ _ _ _ _. Authority
and City agree that, in order to ensure that moneys sufficient to
pay such Project Costs, and necessary financing expenses, will be
available for this purpose when required. Authority shall, on or
before . 1991, deposit or cause to be deposited with
the Trustee the sum of S_ _ _ _ _ _ _ _ from the proceeds of the
Bonds. S ■ of such moneys shall be deposited in the
Construction Fund and S_ _ _ _ _ _ _ _ of such moneys shall be
depositfd in the Bond Fund. All such moneys shall be administered
by the Trustee as provided in the Trust Indenture. City reserves
the right to modify or add items to the Project, any such changes
to be subject to the written approval of Authority, which written
approval shall not be unreasonably withheld. No such change in
the Project shall increase the amount of moneys required to be
deposited by Authority pursuant to this Lease, or alter the
schedule of Lease-Purchase Payments, but if any change increases
the Project Costs beyond the amount available in the Construction
Fund to pay it. City shall deliver to the Trustee moneys
sufficient to pay such excess Project Costs for deposit in the
Construction Fund.
The moneys on hand from time to time in the Construction
Fund held by the Trustee shall be made available to City for
payment of the Project Costs, in the manner provided in the Trust
Indenture. In the event the moneys in the Construction Fund are
not sufficient to pay the entire Project Costs, City shall either
deposit sufficient additional funds with the Trustee to pay such
additional cost or reduce the scope of the Project so that the
moneys in the Construction Fund are sufficient to pay the
remaining Project Costs. Such reduction shall not alter the
schedule of Lease-Purchase Payments.
3-1
■5
Hi-
U'
‘.*
1,1?;
t;
I
k.
:r.
L-'f
f
I
w
t
-
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
notice of termination not less than sixty (60) days prior to the
end of such Fiscal Year, and shall notify the Authority of any
anticipated termination. In the event of termination of this
Lease as provided in this Section, the City shall deliver
possession of the Project to the Authority in accordance with
Section 12.3, and release its interest in the Project granted
under this Lease within ten (10) days after the termination of
this Lease.
Section 6.5. Inrent to Contlnu# Pit]*php«A
Paymanrgt Aporoprlatir>ng. The City presently intends to continue
this Lease for its entire Term and to pay all Lease-Purchase
Payments required hereunder. The City's administrator will
include in the budget request for each Fiscal Year the
Lease-Purchase Payments to become due in such Fiscal Year, and
will use all reasonable and lawful means at his/her disposal to
secure the appropriation of money for such Fiscal Year sufficient
to pay the Lease-Purchase Payments coming due therein. The City
reasonably believes that moneys in an amount sufficient to malce
all such Lease-Purchase Payments can and will lawfully be
appropriated and made available for this purpose. To provide t.he
funds necessary to malce the Lease-Purchase Payments, City agrees,
subject to the provisions of Section 6.4, that it will include in
each annual budget an appropriation sufficient therefor and will
levy general ad valorem taxes in uhe amount required, together
with any other available and appropriated funds, to malce the
Lease-Purchase Payments.
Section 6.6. Effgrr of Termination- Upon termination
Of this Lease as provided in Section 6.4, the City shall not be
responsible for the payment of any a&ditional Lease-Purchase
Payments coming due with respect to succeeding Fiscal Years, but
if the City has not delivered possession of the Project to the
Authority in accordance with Section 12.3 and conveyed to Lessor
or released its interest in the Project granted under this Lease
within ten (10) days after the termination of the Lease, 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-Purchase Payments thereafter coming due under
Exhibit B which are attributable to the number of days after such
ten (10) day period during which the City fails to take such
actions.
Section 6.7. City shall during
the Lease Term, within thirty (30) business days after written
notice that such payment is due, also pay the following amounts to
the following persons:
6-2
, f» .. I
(a) to the Trustee, all reasonable fees of the
Trustee for services rendered under the Trust Indenture,
provided that City may, without creating a default
hereunder, contest in good faith the reasonableness of
any such fees or expenses other than the Trustee's fees
for ordinary services as may be set forth in the Trust
Indenture;
(b) to Authority, all reasonable expenses incurred
by Authority in connection with the transactions
contemplated hereby which are not otherwise required to
be paid by City under the terms of this Lease;
(c) all costs and expenses specifically required
to be paid by City under the terms of this Lease or the
Trust Indenture; and
(d) to Authority or the Trustee, as the case may
be, the amount of all advances of funds made by either
of them un.er the provisions hereof.
(e) to the Trustee, an amount equal to any amount
transferred from the Reserve Fund to the Bond Fund
pursuant to Section 5.02 of the Trust Indenture to cure
a deficiency in the Bond Fund; all amounts payable
pursuant to this paragraph (e) shall be paid by the City
within 60 days following mailing of notice of such
amount due by the Trustee to the City.
In the event City should fail to make any of the
payments required by this Section, the item in default shall
continue as an obligation of City until the amount in default
shall have been fully paid, and City will pay the same with
interest thereon at the rate of 12% per annum, or, if less, at the
maximum rate permitted by law.
6-3
i
Hr
L:
tv
F'I"'
i
i
i,
V?
ARTICLE VII
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATlc; -
7.1. tjiijatfijQAa£fi_juiUw6to£liJlifiaLiQIl-Q£—2XDi£ClL-tLX
riry. From and after the Completion Date City shall, at its own
expense, maintain, preserve and keep the Project in good repair,
working order and condition, and shall from time to time make ail
repairs, replacements and improvements necessary to keep the
Project in such condition. Authority shall have no responsibility
for any of these repairs, replacements or improvements. In
addition, City shall, at its own expense, have the right to
remodel the Project or to make additions, modifications and
in^rovements thereto. All such additions, modifications and
improvements shall thereafter comprise part of the Project, shall
be the property of Authority and be subject to the provisions of
this Lease. Such additions, modifications and improvements shall
not in any way damage the Project nor cause them to be used for
purposes other than those authorized under the provisions of State
and Federal Law; and the Project, 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
Project immediately prior to the making of such additions,
modifications and improvements. City will not permit any
mechanic’s or other lien to be established or remain against the
Project for labor or materials furnished in connection with any
remodeling, additions, modifications, improvements, repairs,
renewals or replacements made by City pursuant to this Section;
provided that if any such lien is established and City shall first
notify Authority of City's intention to do so. City may in good
faith contest any lien filed or established against the Project,
and in such event may permit the items so contested to remain
undischarged and unsatisfied during the period of such contest and
any appeal therefrom unless Authority shall notify City that, in
the opinion of Independent Counsel, by nonpayment of any such item
the interest of Authority in the Project will be materially
endangered or the Project or any part thereof will be subject to
loss or forfeiture, in which event City shall promptly pay and
cause to be satisfied and discharged all such unpaid items or
provide Authority with full security against any such loss or
forfeiture, in form satisfactory to Authority. Authority will
cooperate fully with City in any such contest, upon the request
and at the expense of City.
Section 7.2. Tax(Othi
utilitY Chargaa. City Shall also pay when due all gas, water,
steam, electricity, heat, power, telephone, and other charges
incurred in the operation, maintenance, use, occupancy and upkeep
of the Project. 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
Project, which become due during the Term of the Lease, and all
7-1
;?r" •
i'
•.J
til
i-:.‘ ;-■
fr’p*'
V’; k ■
'■^.lrx.
i l: ;>-
^ t. •■• i
■i-
■fy
» ■
V-.'
;s:'t
m-';•:. r
’ ‘ i
\ •• frm'-.1
■''• f
special assessments and charges lawfully made by any governmental
body for public improvements that may be secured by a lien on the
Project; provided that with respect to special assessments or
other governmental charges that may lawfully be paid in
installments over a period of years# City shall be obligated to
pay only such inscallments as are required to be paid during the
Term of the Lease as and when the same become due. City shall not
1)^ required to pay any federal# state or local income#
Inheritance# estate# succession# transfer, qift, franchise# gross
receipts# profit# excess profit# capital suock# corporate# or
other similar tax payable by 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 the Project.
City may# at City's expense and in City's name, in good
faith contest any such ta.xes, 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
Authority shall notify City that# in the opinion of Independent
Counsel# by nonpayment of any such items the interest of Authority
in the Project wil . be materially endangered or the Project or any
part thereof will be subject to loss or forfeiture# in which event
City shall promptly pay such taxes# assessments or charges or
provide Authority with full security against any loss which may
result from nonpayment# in form satisfactory to Authority.
Section 7.3, Liability Tnaurance. From and after the
Completion Date# City shall procure and maintain continuously in
effect with respect to the Project# insurance against liability
for injuries to or death of any person or damage to or loss of
property arising out of or in any way relating to the maintenance#
use or operation of the Project or any part thereof# and will
cause the Contractor to maintain similar Insurance against all
similar liabilities on its part. The Net Proceeds of all such
insurance shall be applied toward extinguishment or satisfaction
of the liability with respect to which the insurance proceeds may
be paid. As an alteiiiative to the purchase of liability
insurance# City may self-insure against such liabilities in
accordance with applicable law.
Section 7.4. indemnit^y. City assumes all risks and
liabilities# whether or not covered by insurance# for loss or
damage to the Project 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 City or of third parties# and
whether such property damage be to City's property or the
property of others# which is proximately caused by the negligent
conduct of City# its officers# employees and agents. City hereby
assumes responsibility for and agrees to reimburse Authority# its
officers# agents or employees# for all liabilities# obligations#
losses# damages# penalties# claims# actions# costs and expenses
7-2
'■M:-
I
(including reasonable attorney's fees) of whatsoever kind and
nature# imposed on# incurred by or asserted against Authority, its
of' -ers, agents or employees, that in any way relate to or arise
o- '.he acquisition# construction or operation of the Project,
ution and performance of this Lease or the authorization,
»n and delivery of the Bonds, to the maximum extent
petti.'.' id by law.
Section 7.5. Property Insurance. Before and after the
Completion Date, City shall have and assume the risk of loss with
respect to the Project. City shall procure and maintain
continuously in effect during the Term of the Lease with respect
to the Project# hazard insurance against all risks of physical
loss (including# without limitation, fire, extended coverage
perils and vandalism and malicious mischief) in an amount equal to
the full replacement value of the Project. The Net Proceeds of
Insurance required by this Section shall be applied as provided in
Article VIII.
Section 7.6. Worker's Comp^naartnn Tn^uranra. If
required by State law. City shall carry worker's compensation
insurance covering all its employees on, in, near or about the
Project.
Sf
n-,
%
Section "7,1. QtJlfiX—
Inaurance. All insurance required by Article VII or 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 under the laws of one of the states of the
United States and qualified to do business in the State; shall
contain a provision that the insurer shall not cancel or revise
coverage thereunder without giving written notice to both parties
at least 10 days before the cancellation or revision becomes
effective; and shall name City and Authority as insured parties as
their interests may appear. City shall deposit with Trustee and
Authority policies evidencing any such insurance procured by it#
or a certificate or certificates of the respective insurers
stating that such insurance is in full force and effect. Before
the expiration of any such policy# City shall furnish to Trustee
and Authority 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 City shall notify Authority and Trustee of this fact. If
any insurance required by Sections 7.3 or 7.6 hereof is
unavailable or the cost of obtaining such insurance is, in the
judgment of the governing body of the City# excessive# the City
may self Insure for such risks; provided that City gives prompt
written notice of its intent to do so to Authority and Trustee.
The City shall continue to seek such insurance coverage and if
such insurance becomes available at a reasonable cost, the City
shall promptly obtain such insurance. Notwithstanding the
foregoing# City shall ^t all times maintain a policy of general
7-3
I
i'-
I.V.
.i-
i.
■1
rr
i
■\
u'
H.
'-fi':.
public liability insurance wi^h respect to the Land and the
Project naming the Trustee as _any|insured, in an . nount not less
than s
Section 7.8. Arivanr^s. If City shall fail to perform
any of its obligations under this Lease, Authority or Trustee may,
but shall not be obligated to, take such action as may be
necessary to cure such failure, including the advancement of
money, nnd City shall be obligated to repay all such advances on
demanc with interest at the maximum rate permitted by law or 12%,
whichever is less, from the date of the advance to the date of
repayment.
Section 7.9. Liens. 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 Project, other than the respective rights of Authority and
City as herein provided and Permitted Encumbrances. Except as
expressly provided in this Article, City shall promptly, at its
own expense, take such act'nn as may be necessary duly to
discharge or remove any such mortgage, pledge, lien, charge,
encumbrance or claim if the same shall arise at any time. City
shall reimburse Authority for any expense incurred by it in order
to discharge or remove any such mortgage, pledge, lion, charge,
encumbrance or claim.
Section 7.10. Financial Statements. City shall provide
Trustee, within 180 days of the end of each Fiscal Year, with a
copy of its annual audited financial statements.
/\ Sect ion 7.11. Arbitrage Rebate. ,»The CitV has, bv
resolution, allocated to the Authority a portion of the Citv*s
small issuer exemntion under Section 148(f) (4) (D) of the Code, in
the amount of $4,i'j(),00^. Therefore arbitrage reoate is not
applicable to the Bonds, but i^ ^or any reason arbitrage rebate
becoawa applicable. Authority and City will comply will all
provisions of the Arbitrage and Rebate Certificate, dated as of
Che date of delivery of the Bonds, and o.^scctt.^d bv Authority and
City. City shall oav. or reimburse to Authority. aJ1 costs and
expenses incurred by Authority in complying with al^ provisions of
the Arbitrage and Rebate Certificate, including the amount of
rebatable arbitrage (or penalty in lieu thereof) required at any
time to be paid by Authority to the United States.
7-4
Y-
f:'
B
'■i
•V
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION;
USE OF NET PROCEEDS
ggCtion 8.1. rnrr i nn and OQndt»mnar i nn . If
(1) the Project or any portion thereof is destroyed or is damaged
by fire or other casualty or (ii) title to or the temporary use of
the Project or any part thereof, or the interest of City or
Authority in the Project or Land or any part thereof, shall be
taken under the exercise of the power of eminent domain by any
governmental body or by any person, firm or corporation acting
under governmental authority. City shall have the rights specified
in this Section with respect to the Net Proceeds of any insurance
or condemnation award. City shall either apply such Net Proceeds
to the prong>t repair, restoration, modification or improvement of
the Project and shall be obligated to continue to pay the
Lease'-Purchase Payments or City shall pay the entire Purchase
Price of the Project in accordance with Section 10.1, or defease
this Lease pursuant to Section 10.3 hereof, in which event the Net
Proceeds may be used for such purpose.
Section 8.2. Insufficiency of Net Proceeds. If the
City elects to repair and restore the Project and the Net Proceeds
are insufficient to pay in full the cost of any repair and
restoration. City shall compxete the work and pay any cost in
excess of the amount of the Net Proceeds, and City agrees that if
by reason of any such insufficiency of the Net Proceeds City shall
make any payments pursuant to the provisions of vnis Section 8.2,
City shall not be entitled to any reimbursement therefor from
Authority nor shall City be entitled to any diminution of the
Lease-Purchase Payments due with respect to the Project.
Section 8.3. Cooperation of Authority. Authority shall
cooperate fully with the City at the expense of City in filing any
proof of loss with respect to any insurance policy covering the
casualties described in Section 8.1 hereof and in the prosecution
or defense of any prospective or pending condemnation proceeding
with respect to the Project or any part there of and will, to the
extent it may lawfully do so, permit City to litigate in any
proceeding resulting therefrom in the name of and on behalf of
Authority. In no event will 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 Project or any part thereof without
the written consent of City.
Section 8.4. Dgs^rurt:iQn or pnnrtAmnar i on of Otih^r
Property Qwn^d by City. City shall be entitled to c.he Net
Proceeds of any insurance claim or condemnation award or portion
thereof made for destruction of, damage to or taking of its
property not included in the Project.
8-1
h-
r!
K-
y i-
r-
A.
Itr.
'JI
r»*t
■it-ly
‘V.
\?’-
r
i.
r
•;>
'
r
ARTICLE IX
CITY'S EQUIPMENT; WARRAJJTIES; DISCLAIMER
Section 9.1. installation ot Cir.v's EouiDment. City
nay at any time and front time to time after the Completion Date/
in ita sole discretion and at its own expense, install items of
movable machinery and equipment in or upon the Project, which
items shall be identified by tags or other symbols affixed thereto
as property of City not included in the Project. All such items
so identified shall remain the sole property of City, in which
Authority shall have no interest, and may be modified or removed
by City at any time provided that City shall repair and restore
any and all damage to the Project resulting from the installation,
modification or removal of any such items. Nothing in this Lease
shall prevent City from purchasing items to be installed pursuant
to this Section under a conditional sale or lease with option to
purchase Lease, or subject to a vendor's lien or security
agreement, as security for the unpaid portion of the purchase
price thereof, provided that no such lien or security interest
shall attach to any part of the Project.
Section 9.2. Design of Project. The design of the
Project, the Architect and the Contractor have been or will be
selected by City, and Authority shall have no responsibility in
connection with the selection of the Architect, the design of the
Project, its suitability for the use intended by City, or the
performance by the Contractor in constructing the Project.
Section 9.3. installation and Mainr^nange of Project.
Authority shall have no obligation to install, erect, test,
inspect, service or maintain the Project or any portion thereof
under any circumstances, but suc'r actions shall be the obligation
of City or the Contractor as specified herein.
Section 9.4. Warranties. Authority hereby assigns to
City for and during the Term of the Lease, all of its interest in
all warranties and guarantees or other contract rights against the
Architect and the Contractor, express or implied, issued on or
applicable to the Project, and Authority here..>y authorizes City to
obtain the customary services furnished in connection with such
warranties and guarantees at City's expense.
Section 9.5. Diselalmer of Warranties. AUTHORITY MAKES
NO HAEUU^TY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS TO
THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY CITY OF
THE PROJECT, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT
TO THE PROJECT.
9-1
rJv’n.h'
■ii ''
Ip-
it
.‘,; V-
[i
TL^
I:
A.'
fi
L-'
■^,-
ARTICLE X
OPTION TO PREPAY PURCHASE PRICE; DEFEASANCE
Section 10.1. when Available. City shall have the
option to prepay the Purchase Price or any portion thereof (in
integral multiples of $5,000), without penalty, on any date on or
after February 1, 2001, but only if City is not in default under
this Lease, and only in the manner provided in this Article. Any
prepayment in part shall be applied against Principal in inverse
order of Payment Dates, and Authority and City shall prepare and
execute a revised Exhibit B reflecting such prepayment. Any such
prepayment shall be applied by Authority to redeem Bonds pursuant
to Section 3.01 of the Trust Indenture.
Section 10.2. Exerelae of Option. City shall give
notice to Authority and Trustee of its intention to exercise its
option under Section 10.1 not less than sixty (60) days prior to
“he Payment Date on which the option is to be exercised, and shall
ueposit with Trustee on the date of exercise an amount equal to
the portion of the Purchase Price being prepaid.
Section 10.3. Defeasance. City may at any time prior
discharge its liability hereunder in its entirety with reference
to all Leaser-Purchase Payments not yet due hereunder, subject to
the provisions of law now or hereafter authorizing and regulating
such action, by depositing irrevocably in escrow, with a bank
qualified by law as an escrow agent for this purpose, cash or
securities which are authorized by law and under Section 10.01 of
the Trust Indenture to be so deposited, bearing interest payable
at such times and at such rates and maturing on such dates as
shall be required without reinvestment to provide funds sufficient
to pay (i) all Lease^Purchase Payments to become due on their
respective Payment Dates or (ii) all Lease-Purchase Payments to
become due on or before a date designated by City (on or after
February 1, 2001) and the remaining Purchase Price then due on
such designated date. If this Lease is defeased pursuant to (ii)
above. Authority and City shall make the necessary arrangements
with the Trustee for redemption of all outstanding Bonds on the
designated date. When the liability of City hereunder has been so
discharged as provided in this Section 10.3, and all other fees
and expenses payable by City hereunder have been paid or
arrangements made for payment, all pledges, covenants and other
rigb ' granted by this Lease to Authority shall cease.
10-1
rfi*ARTICLE XI
ASSIGNMENT AND LEASING
I'
ARTICLE XII
EVENTS OF DEFAULT AND REMEDIES
12.1. PvAnfs nAfanlt* Dgfingd. The followin9
shall be "events of default" under this Lease and the terms
"events of default" and "default" shall mean, whenever they are
used in this Lease, with respect to the Project, any one or more
of the following events:
(i) Failure by City to pay any Lease-Purchase
Payment or other payment required to be paid hereunder
at the time specified herein and the continuation of
said failure for a period of five business days after
telephonic or telegraphic notice given by Authority that
the payment referred to in such notice has not been
received, such telephonic or telegraphic notice to be
subsequently confirmed in writing, or after written
notice.
(ii) Failure by 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 (i) of this Section, for a period of thirty (30)
days after written notice specifying such failure and
requesting that it be remedied has been given to City by
Authority, unless Authority 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.
Authority will not unreasonably withhold its consent to
an extension of such time if corrective action is
instituted by City within the applicable period and
diligently pursued until the default is corrected.
(iii) The filing by City of a voluntary petition
in bankruptcy, or failure by City promptly to lift any
execution, garnishment or attachment of such consequence
as would impair the ability of City to carry on its
operations at the Project, or adjudication of City as a
bankrupt, or assignment by City for the benefit of
creditors, or the entry by City into an agreement of
composition with creditors, or the approval by a court
of competent jurisdiction of a petition applicable to
City in any proceedings instituted under the provisions
of the Federal Bankruptcy Statute, as amended, or under
any similar acts which may hereafter be enacted.
The provisions of this Section 12.1 and Section 12.2 are subject
to the following limitation: if by reason of force majfiure City
is unable in whole or in part to carry out its obligations under
this Lease with respect to the Project, other than the obligation
12-1
r
of City to pay Lease-Purchase Payments with respect thereto which
shall be paid when due notwithstanding the provisions of this
paragraph, City shall not be deemed in default during the
continuance of such inability or during any other delays which are
a direct consequence of the force maieure inability. The term
"XftCCft m>ias 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; insurrections; riots; landslides; earthquakes; fires;
storms; droughts; floods; explosions; or any other cause or event
not reasonably within the control of City and not resulting from
its negligence. City agrees, however, to remedy with all
reasonable dispatch the cause or causes preventing it from
carrying out its obligations under this Lease; provided that the
settlement of strikes, lockouts and other employment disputes
shall be entirely within the discretion of City.
"i
Section 12.2 Remedies en Default. Whenever any event
of default referred to ..n Section 12.1 hereof shall have happened
and be continuing with respect to the Project, Authority shall
have the right, at its option, to take one or any combination of
the following remedial steps:
(i) Cancel and terminate this Lease by written
notice in accordance with law, re-enter and take
possession of the Project, and the Project and all
improvements thereto, and all prior Lease-Purchase
Payments made hereunder by City, shall belong to
Authority as liquidated damages; or
(ii) By written notice to City in accordance with
law, declare the unpaid Principal, with interest accrued
thereon, immediately due and payable; or
(iii) Take whatever action at law or in equity may
appear necessary or desirable tc collect the
Lease-Purchase Payments then due and thereafter to
become due during the then current Fiscal Year of the
City with respect to the Project, or enforce performance
and observance of any obligation, agreement or covenant
of City under this Lease.
Section 12.3. Surrender of Project. Upon the
termination of this Lease under the circumstances described in
paragraphs (a) or (c) of Section 5.2 hereof, the City shall
surrender possession of the Project to the Authority in the
condition, repair, appearance and working order required in
Section 7.1.
12-2
F
E
I:f-kr
hI
Section 12.4. D^lay Notice. No delay or omission to
exercise any right or power accruing 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 exercised from time
to time and as often as may be deemed expedient. In order to
entitle any party to exercise any remedy reserved to it in this
Lease it shall not be necessary to give any notice, other than
such notice as may be required in this Lease or by law.
Section 12.5. Nq Remedy Exclusive. No remedy herein
conferred upon or reserved to 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 or omission to
exercise any right or power accruing 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 exercised from time
to time and as often as may be deemed expedient.
Section 12.6. Agrg«»ment f.o Pay Attorngys' and
In the event either party to this Lease should default
under any of the provisions hereof and the nondefaulting party
should employ attorneys or incur other expenses for the collection
of moneys or the enforcement or performance or observance of any
obligation or agreement on the part of the defaulting party herein
contained, the defaulting party agrees that it will on demand
therefor pay to the nondefaulting party the reasonable fee of such
attorneys and such other expenses so incurred by the nondefaulting
party.
Section 12.7.
Miitwr. In the event any agreement contained in this Lease should
be breached by either party and thereafter waived by the other
party, such waiver shall be limited to the particular breach so
waived and shall not be deemed to waive any other breach
hereunder.
Section 12.8 of Autihnr if:y *
BcynedlASL* Whenever any Event of Default shall have happened and
be subsisting the Trustee may, but except as otherwise provided in
the Trust Indenture shall not be obliged to, exercise any or all
of the rights of Authority under this Article XII. In such case,
the Authority will cooperate fully with the Trustee in any legal
action.
12-:
ARTICLE XIII
TITLE
Section 13.1. Title. During the Term of the Lease#
legal title to the Project and any and all repairs, replacements,
sxibstitutions and modifications to it shall be in Authority,
subject to City’s interests under this Lease.
Section 13.2 Evidenge ef Titl City shall, upon
request of the Authority, provide to Authority a written title
opinion or title insurance evidencing that Authority has good and
marketable fee title to the Land subject only to Permitted
Encumbrances.
r -1 f** 1*: ' ■ * * .
13-1
l,^rl:'r.
f
A
■< .
\ %
■!- .
p'
.-• •
i
r4^;.,
/^i-v
m
li
rf .
Jv- ■ Kf:
■%
I;'•»y-
s;?'
■|:h’'
■'•r • ■
t .
V--
IN WITNESS WHEREOF, Authority has caused this Lease to
be executed in its corporate name by its duly authorized officers
HOUSING AND REDEVELOPMENT
AUTHORITY IN AND FOR THE
CITY OF ORONO, MINNESOTA
(SEAL)
Chairman
Attest:
Secretary
CITY OF ORONO, MINNESOTA
(SEAL)
Mayor
And.
City Clerk
15-2
_ _ _ _ __ _ *■
I
?v-
li
'v:
C'v
STATE OF MINNESOTA )
) SS.
COUNTY OF )
This instrument was acknowledged before me on
1991, by - - - - - -and- - - - - - - - - - - -
the Chairman and Secretary, respectively, of the Housing and
Redevelopment Authority in and for the City of Orono, Minnesota, a
Minnesota political subdivision, on behalf of the political
subdivision.
Notary Public
1
k
k ; ^
!STATE OF
1
]■>.
^1?''
COUNTY OF
4 ^ •1991, by
i
f t^ -Mayor and
4
?'Minnesota
1:municipal
) SS .
This instrument was acknowledged before me on
_ _ _ _ _ _and _ _ _ _ _ _ _ _ _ _ _ _ _
the
Notary Public
15-3
k-f;, j I't ‘'A
g- '.v.a:- -i.‘
ff'’fe--
EXHIBIT A
ja 1 n»grripf inn of t:h^ Land
A-1
EXHIBIT B
ipt! ion nf Project.
B-1
m
FV'I-
>-
w
W'-'
Ir
■'i*:
mr-
h
r <
N/
r-.'V.T
..r\ ■
r
yi’i-y
pj'-,-Rv
p.'f--'
ifi
rs ■--»
•>; >
;J‘
'^■I'I-f
e'
1
y5'
i.
|v^
.:* «;
^ ’ ■-•
i'i.,
Payment
July 15, 1992
January 15, 1993
July IS, 1993
January 15, 1994
July 15, 1994
January 15, 1995
July 15, 1995
January IS, 1996
July 15, 1996
January 15, 1997
July 15, 1997
January 15, 1998
July IS, 1998
January 15, 1999
July 15, 1999
January 15, 2000
July 15, 2000
January 15, 2001
July 15, 2001
January 15, 2002
July 15, 2002
January IS, 2003
July 15, 2003
January 15, 2004
July 15, 2004
EXHIBIT C
T.P&gF.-PnRrHA<;F P&YMFNT SrHEDULE
Payment
Nmnbftjr
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Total
Pringjpal Int
C-l
.J
t:I;
'S„
11^*
&
|r
fei
A‘‘ ■
^S,v;
fci-
f’:-
>«, ■.
fi"*'K^*:-
VP-
r'
r-
U.5
w
i:"
[i>r
/V.;..
:-y
i' ^ ^
Payment
Rat-A
Payment Total
p»-i nr i pa 1 Interest
January 15, 2005 26
July 15, 2005 27
January 15, 2006 28
July 15, 2006 29
January 15, 2007 30
July 15, 2007 31
January 15, 2008 32
July 15, 2008 33
The Lease-Purchase Payments are intended to be, and it
is agreed that they shall be, in an amount equal to the interest,
and principal, if any, payable by Authority on the Bonds on
February 1 or August 1, as the case may be, following such Payment
Date, and, to the extent necessary, the parties shall amend the
foregoing table to reflect the payments required to be m^de by
Authority on the Bonds. The Bonds mature on February 1 in the
years and amounts set forth below and bear interest from date of
original issue (December 1, 1991) until paid on duly redeemed at
the rates set forth opposite such years and amounts;
ifiAj:Ajnnnnf.
Interest
Rafg
1994
199b
1996
1997
1998
1999
2000
2001
C-2
feiai
m:Ih: k
Year
2002
2003
2004
2005
2006
2007
2008
Amrmnt
Interest
Rare
C-3
;
ifc'
EXHIBIT D
rOMPLETTON rRRTTFTrATE
The undersigned, being a duly appointed City
Representative and an Authority Representative under the
Lease-Purchase Contract, dated as of DecerrUaer 1, (the Lease) ,
between the Housing and Redevelopment Authority in and for the
City of Orono (the Authority) and the City of Orono, Minnesota
(the City), hereby certify on behalf of Authority and City with
respect to the Project to be acquired under said Lease, that the
Project has been constructed pursuant to and in accordance with
said Lease and the Plans and Specifications, and is now available
for occupancy and/or use by City.
Dated , 199.
CITY OF ORONO, MINNESOTA
City Representative
HOUSING AND REDEVELOPMENT IN
AND FOR THE CITY OF
ORONO
Authority Representative
D-1
\
I V
K
. ^ :
Issuer:
CERTIFICATION OF MINUTES RELATING TO
$4,000,000 Public Facilities Revenue Bonds, Series 1991
Housing and Redevelopment Authority in and for City of
Orono, Minnesota
Governing Body: Board of Commissioners
Kind, date, time and place of meeting: A _ _ _ _ meeting,
held on November 25, 1991, at _ _ _ o'clock p.m., at the
City Hall.
Commissioners present:
Commissioners absent:
Documents Attached:
Minutes of said meeting, including:
RESOLUTION NO.
Kr
-5^.,1
¥
I'.
If
RESOLUTION RELATING TO $4,000,000 PUBLIC FACILITIES
REVENUE BONDS, SERIES 1991; AUTHORIZING THE ISSUANCE,
AWARDING THE SALE AND PRESCRIBING THE FORM THEREOF AND
AUTHORIZING THE EXECUTION OF AN INDENTURE OF TRUST AND A
LEASE-PURCHASE CONTRACT
I, the undersigned, being the duly qualified and acting
recording officer of the public corporation issuing the bonds
referred to in the title of this certificate, certify chat the
docuiMnts attached hereto, as described above, have been carefully
coii9>ared with the original records of the corporation in my legal
custody, from which they have been transcribed; that the documents
Are a correct and complete transcript of the minutes of a meeting
of the governing body of the corporation, and correct and complete
copies of all resolutions and other aotiuns taken and of all
documents approved by the governing body at the meeting, insofar
as they relate to the bonds; and that the meeting was duly held by
the governing body at the time and place and was attended
throughout by the members indicated above, pursuant to call and
notice of such meeting given as required by law.
this
WITNESS my hand officially as such recording officer
day of November, 1991.
&
Secretary
wi V-r- •
E.'-
J-
'h:
K“‘;
V'"-
It
E
r.
I- -
r
E--t-
iv
r:
I'
I"
fm-
'V
ICommissioner_ introduced the following
resolution and moved its adoption:
RESOLUTION NO.
RESOLUTION RELATING TO $4,000,000 PUBLIC FACILITIES
REVENUE BONDS, SERIES 1991; AUTHORIZING THE ISSUANCE,
AWARDING THE SALE AND PRESCRIBING THE FORM THEREOF AND
AUTHORIZING THE EXECUTION OF AN INDENTURE OF TRUST AND A
LEASE-PURCHASE CONTRACT
WHEREAS, the Authority is considering a project (the
"Project**)# to be undertaken pursuant to Minnesota Statutes,
Section 469.012, Subdivision 1(7), consisting of the acquisition
of certain real property (the "Land") in the City of Orono,
Minnesota (the "City") and the construction of a new city hall and
facilities to house the police and public works departments of the
City (collectively, the "Facilities");
WHEREAS, there is a need for providing the public
facilities comprising the Project and it is desirable and in the
best interest of the Authority to encourage and assist in the
Project; and
WHEREAS, it is proposed that the Authority issue its
revenue bonds pursuant to Minnesota Statutes, Sections 469.034 and
469.035, and Chapter 475, as amended, and pursuant to a Trust
Indenture, dated as of December 1, 1991 (the "Indenture"), between
the Authority and American National Bank and Trust Company, as
Trustee (the "Trustee"), to provide funds to finance the Project,
and lease and agree to sell the Project so acquired and
constructed to the City, pursuant to a Lease-Purchase Contract,
dated as of Dece^iJOer 1, 1991 (the "Lease"), between the Authority,
as lessor, and City, as lessee;
WHEREAS, all bonds issued under the Indenture will be
secured by a pledge and assignment of the Lease and of the
revenues derived by the Authority from the Project, and the bonds
and the interest thereon shall be payable solely from the revenues
pledged thereto and no bonds shall constitute a debt of the
Authority within the meaning of any constitutional or statutory
limitation nor shall the full faith, credit and taxing powers of
the Authority be pledged thereto; and
WHEREAS, under the Lease, the City is to pay to the
Authority sufficient money each year to pay the principal of,
premium, if any, and interest on the bonds Issued to finance the
Project, and City is to provide the cost of maintaining the
Project in good repair, the cost of keeping the Project properly
insured, and any payments required for taxes and any expenses
incurred by the Authority in connection with the Project; and
r.
WHEREAS, by resolution adopted October 14, 1991, this
Board authorized the issuance of such bonds and directed that an
Official Statement be prepared to be used in the sale of the
bonds; and
WHEREAS, forms of the Lease and the Agreement and a form
of the Official Statement, dated November 15, 1991, have been
presented to this Board and are hereby ordered to be placed on
file In the office of the Secretary.
NOW, THEREFORE, BE IT RESOLVED by the Board of
Commissioners of the Housing and Redevelopment Authority in and
for the City of Orono, Minnesota (the "Authority”), as follows:
Section 1. This Board hereby finds that the Project is
an undertalcing of the Authority authorized under Section 469.012,
Subdivision 1(7), and that no buildings or improvements are now
located on the Land.
h
;■■ ■
Section 2. This Board aclcnowledges, finds, determines
and declares that It is in the best interests of the Authority to
finance the Project by the acquisition and construction thereof by
the Authority and lease thereof to the City since the Project will
provide needed public facilities and Is consistent with the Plan.
Section 3. For the purpose of paying certain cf the
costs of the acquisition and construction of the Project, there is
hereby authorized the Issuance of Public Facilities Revenue Bonds,
Series 1991 of the Authority in the aggregate principal amount of
$4,000,000 (the "Bonds"). The Bonds shall be issued in fully
registered form, shall be in such denominations, shall be payable
on the dates and In the principal amounts and shall be payable
from the sources and In the manner provided in the Indenture. The
Bonds shall bear Interest at the rates set forth in Section 7.
This Board hereby authorizes and directs the Chairman to execute
and the Secretary to attest under the corporate seal of the
Authority the Indenture In the name and on behalf of the Authority
and to deliver to the Trustee the Indenture, and does hereby
authorize and direct the execution of the Bonds in accordance with
the provisions of the Indenture.
All of the provisions of the Indenture, when executed as
authorized herein, shall be deemed to be a part of this resolution
as fully and to the same extent as If Incorporated herein. The
Indenture shall be substantially In the form on file In the office
of the Secretary with such necessary and appropriate variations,
oodsslons and Insertions as the Chairman shall determine to be
necessary or appropriate, and the execution thereof by the
Chairman shall be conclusive evidence of such determination.
-2-
U:tr
r‘n:
fk-
n
■.K <*
k'
■f
:•
;i»
I
I
5^'
Section 4. The Chairman and the Secretary are hereby
a^uthorized and directed to execute and deliver the Lease in the
name and on behalf of the Authority. All of the provisions of the
Lease^ when executed and delivered as authorized herein^ shall be
deemed to be a part of this resolution as fully and to the same
extent as if Incorporated herein. The Lease shall be
substantially in the form on file in the office of the Secretary,
with such necessary and appropriate variationsr omissions and
in<;ertions as the Chairman shall determine to be necessary or
appropriate^ and the execution thereof by the Chairman shall be
conclusive evidence of such determination.
Section 5. No covenant, stipulation, obligation or
agreement herein contained or contained in the Indenture, the
Bonds or the Lease shall be deemed to be a cov'nant, stipulation,
obligation or agreement of any member of this Board or any
officer, agent or employee of the Authority in that person's
individual capacity, and neither this Board nor any officer
executing the Bonds shall be liable personally on the Bonds or be
subject to any personal liability or accountability by reason of
the issuance thereof.
Section 6. The officers of the Authority are hereby
authorized to do all acts and things required of them by or in
connection with this resolution, the Indenture and the Lease for
the full, punctual and complete performance of all the terms,
covenants and agreements contained in the Bonds, the Indenture,
the Lsase and this resolution, including the execution and
delivery of such closing certificates, arbitrage certifications
and similar docximents as may be required by bond counsel in
connection with the issuance and delivery of the Bonds.
Section 7. Pursuant to t^' ,.esolution adopted October
14, 1991, the Authority has recei\ed ana opened bids for the Bonds
and has publicly considered the bids received. The bids received
are summarized in the bidding summary attached hereto. It is
hereby found and d' termined that the most favorable of said bids
is that submitted by _ - _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _>
of . _ _ _ _ _ _ _ _ _ _ _ _ __ and associates (the
"Purchaser**), to purchase the Bonds at a price of $.
plus accrued interest to the date of closing, the Bonds maturing
in the following years to mature n f'he principal amounts and to
bear interest at the designated rates set forth below opposite
such years, respectively:
-3-
j-
Maturity
Principal
Amounts
Interest
Ra.te Mafnrity
Principal Interest
Rate
1994
1995
1996
1997
1998
1999
2000
2001
2C02
2003
2004
2005
2006
2007
2000
Said of is hereby accepted and the Chairman and the Secretary
are hereby authorized and directed to execute a contract on the
part of the Authority for the sale of the Bonds to the Purchaser.
Section 8. The Official Statement prepared and
distributed on behalf of the Authority by Ehlers and Associates,
Inc. is hereby approved and the determination of the Secretary
that the Official Statement has been deemed final for purposes of
SEC Rule lSc2-12(b)(1) is hereby ratified and confirmed. The
officers of the Authority are hereby authorized and directed to
execute such certificates as may be appropriate concerning the
accuracy# con^leteness and sufficiency of the Official Statement
and to deliver to the Purchaser within seven business days after
the date of adoption of this resolution copies of the Official
Statement in accordance with the Terms and Conditions of Sale,
supplemented so as to contain the terms of the Bonds as set forth
in this resolution and the reoffering and other information
provided by the Purchaser for inclusion in the Official Statement.
Section 9. Arbitrage Rebate Exemption. (a) The
Authority hereby represents that the Bonds qualify for the
exception for small governmental units to the arbitrage rebate
provisions contained in Section 148(f) of the Code. Specifically,
the Authority represents:
(1) Substantially all (nc~ less than 95%) of the
proceeds of the Bonds (except for amounts to be applied to
the payment of costs of Issuance and amounts to be deposited
in the Bond Fund pursuant to Section 4.02) will be used for
local governmental activities of the Authority and the City.
(2) The City has allocated to the Authority a portion
of the City's $5,000,000 small issuer exemption from
arbitrage rebate in the amount of $4,000,000 with respect to
the Bonds.
(2) The aggregate face amount of all "tax-exempt bonds"
(including warrants, contracts, leases and other
indebtedness, but excluding private activity bonds) issued by
or on behalf of the Authority and all subordinate entities
-4-
r f
r>
,kv;
■
;)"^ V:
ffe'
!T/ ■
i-
r:
'1*' ..!> .
t-r'
;i'‘'
f‘
• ■
4'^
|:f.
jAiVy.
thereof during 1991 is not reasonably expected to exceed
$4,000,000. To date in 1991, the / uthority has issued no
such tax'>exeng>t bonds.
(b) If notwithstanding the provisions of paragraph (a)
of this Section, the arbitrage rebate provisions of Section 148(f)
of the Code apply to the Bonds, the Authority hereby covenants and
agrees to make the determinations, retain re^ rds and rebate to
the Onited States the amounts at the times and in the manner
required oy said Section 148(f) and applicable Regulations. The
City has covenanted and agreed in the Lease that it will perform
and pay any obligations imposed upon the Authority by this
Section.
Section 10. This resolution shall be in full force and
effect from and after its passage.
Adopted by the Board of Commissioners of the Housing and
Redevelopment Authority in and for the City of Orono, Minnesota,
this 25th day of November, 1991.
Chairman
Attest:
Secretary
The motion for the adoption of the foregoing resolution was
duly seconded by Commissioner and, upon v * being taken
thereon, the following Commissioners voted in favor thereof:
and the following voted against the same:
whereupon the resolution was declared duly passed and adopted.
-5>