HomeMy WebLinkAboutHRA Item 03September 18, 2017 Item No.________
HOUSING AND REDEVELOPMENT AUTHORITY
RESOLUTION AUTHORIZING ISSUANCE AND AWARDING SALE OF LEASE
REVENUE LIQUOR ENTERPRISE REFUNDING BONDS, SERIES 2017A
Proposed Action
Staff recommends adoption of the following motion: Move to approve a Resolution
Authorizing Issuance and Awarding Sale of Lease Revenue Liquor Enterprise Refunding
Bonds, Series 2017A.
Overview
Passage of this motion will result in the issuance of Lease Revenue Liquor Enterprise
Refunding Bonds to refinance the Liquor Revenue Bonds, Series 2007 within the parameters
specified and authorizes the execution of the associated documents (Lease-Purchase
Agreement, Trust Indenture, other closing documents, as may be necessary).
Primary Issues to Consider
• None
Supporting Information
• Resolution (Prepared by Dorsey & Whitney, LLP)
• Summary of Terms (Prepared by Springsted Inc.)
• Lease-Purchase Agreement between HRA and City of Lakeville (Prepared by Dorsey
& Whitney, LLP)
• Trust Indenture between HRA and U.S. Bank
Financial Impact: $ Budgeted: Y☒ N☐ Source:
Related Documents: (CIP, ERP, etc.):
Envision Lakeville Community Values: Good Value for Public Services
Report Completed by: Jerilyn Erickson, Finance Director
Varies Liquor Revenues
4810-8377-0703\2
EXTRACT OF MINUTES OF A MEETING OF THE
BOARD OF COMMISSIONERS OF THE HOUSING
AND REDEVELOPMENT AUTHORITY OF THE CITY
OF LAKEVILLE, MINNESOTA
HELD: September 18, 2017
Pursuant to due call and notice thereof, a regular meeting of the Board of Commissioners
of the Housing and Redevelopment Authority of the City of Lakeville, Minnesota was duly held
at the City Hall in said City on the 18th day of September 2017, at _____ p.m.
The following members were present:
Commissioner ________________ introduced the following resolution and moved its
adoption:
4810-8377-0703\2
HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF LAKEVILLE, MINNESOTA
RESOLUTION
Date September 18, 2017 Resolution No.
Motion By Seconded By
RESOLUTION AUTHORIZING ISSUANCE AND AWARDING
SALE, OF LEASE REVENUE LIQUOR ENTERPRISE
REFUNDING BONDS, SERIES 2017A
WHEREAS, the Housing and Redevelopment Authority of the City of Lakeville,
Minnesota (the Authority), is authorized to issue to lease revenue bonds in anticipation of the
collection of revenues of a project to finance or refinance the cost of acquisition, construction,
reconstruction, improvement, or extension thereof.
WHEREAS, the City of Lakeville, Minnesota (the City) has heretofore issued its Liquor
Revenue Bonds, Series 2007, dated May 1, 2007, in the aggregate original principal amount of
$3,955,000 (the Series 2007 Bonds), to acquire certain real property and construct, furnish and
equip a new liquor store thereon (the Project).
WHEREAS, the Authority proposes to issue its Lease Revenue Liquor Enterprise
Refunding Bonds, Series 2017A (the Bonds), for the purpose of refinancing the costs of the
Project and refunding the Series 2007 Bonds.
WHEREAS, upon issuance of the Bonds and defeasance of the Series 2007 Bonds, good
and marketable title to the Project will be in the City, conveyed to the Authority and leased to the
City with an option to purchase pursuant to a Lease-Purchase Agreement dated as of November
1, 2017, between the City, as lessee, and the Authority, as lessor (the Lease).
WHEREAS, the Board of Commissioners of the Authority (the Board) reasonably
expects that the rentals to be received by the Authority from the City pursuant to the Lease will
be sufficient to pay the debt service on the Bonds.
WHEREAS, the Bonds and the interest accruing thereon are payable solely from the
rental payments to be provided by the City pursuant to the Lease and do not give rise to a charge
against the general credit or taxing powers of the Authority or the City and neither the full faith
and credit nor the taxing powers of the Authority or the City are pledged for the payment of the
Bonds or interest thereon.
NOW, THEREFORE, BE IT RESOLVED by the Board of Commissioners of the
Housing and Redevelopment Authority of the City of Lakeville, Minnesota, as follows:
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ARTICLE I
SALE; REGISTRATION; EXECUTION AND DELIVERY OF BONDS
Section 1.1 Authorization. This Board has determined that it is in furtherance of the
corporate purposes of the Authority to cooperate with the City in providing for the refinancing of
the Project pursuant to the provisions of Minnesota Statutes, Sections 469.012, 469.041 and
471.59, to issue the Bonds in accordance with the provisions of Sections 469.034, 469.035 and
475.79, and to enter into the Lease in accordance with the provisions of Sections 465.71 and
471.64. Bonds issued under this resolution and the Trust Indenture dated as of November 1,
2017 (the Indenture), between the Authority and U.S. Bank National Association, as trustee for
the Bonds (the Trustee), will be secured solely by rental payments to be made by the City
pursuant to the Lease and funds held by the Trustee under the Indenture and said Bonds and the
interest on said Bonds shall be payable solely from the revenue pledged therefor under the
Indenture, and no such Bonds shall constitute nor give rise to a pecuniary liability of the City or
the Authority or a charge against their general credit or taxing powers and shall not constitute a
charge, lien, or encumbrance, legal or equitable, upon any property of the City or the Authority,
other than the revenues pledged to the payment of the Bonds under the Indenture. The obligation
of the City created by the Lease in excess of $1,000,000 shall, as provided in Minnesota Statutes,
Section 465.71, be included in the calculation of net debt of the City for purposes of Minnesota
Statutes, Section 475.53, and such obligation does not cause the net debt of the City to exceed its
debt limit.
Section 1.2 Sale and Award; Parameters. To provide refinancing for the Project, this
Board has determined to proceed with the issuance of the Bonds in accordance with the
provisions of this resolution. The Bonds will be purchased by Robert W. Baird & Co.
Incorporated (the Underwriter) pursuant to a Bond Purchase Agreement by and between the
Authority and the Underwriter (the Bond Purchase Agreement). Any of the Chair or Executive
Director of the Authority or the City Administrator of the City, are hereby authorized to approve
the sale of the Bonds, on behalf of the Authority, in an aggregate principal amount not to exceed
$2,700,000, and to execute the Bond Purchase Agreement, on behalf of the Authority, provided
that the true interest cost of the Bonds to the Authority is less than or equal to 2.50% per annum.
The Bonds shall be sold to the Underwriter in accordance with and upon the terms and
conditions set forth in the Bond Purchase Agreement and this resolution. The proposal of the
Underwriter to purchase the Bonds, as further provided in the Bond Purchase Agreement, at the
purchase price set forth therein, is hereby accepted.
Section 1.3 Terms and Form of the Bonds. The Bonds shall be designated “Lease
Revenue Liquor Enterprise Refunding Bonds, Series 2017A.” The Bonds shall be in such
principal amount, shall bear interest at the rates, shall be numbered, shall be dated, shall mature,
shall be subject to redemption prior to maturity, and shall be in such form and have such other
details and provisions as may be prescribed in the Indenture, the form of which is on file with the
Authority, and the terms of which are incorporated herein by reference as if fully set forth herein.
The Bonds shall be printed in substantially the form set forth in the Indenture.
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Section 1.4 Execution, Authentication and Delivery. The Bonds shall be executed by
the Authority, and authenticated and delivered by the Trustee, in accordance with the applicable
provisions of the Indenture.
Section 1.5 Continuing Disclosure. The City is an obligated person in respect of the
Bonds within the meaning of Rule 15c2-12 promulgated by the SEC under the Securities
Exchange Act of 1934 (17 C.F.R. § 240.15c2-12), relating to continuing disclosure (as in effect
and interpreted from time to time) for purposes of identifying the entities in respect of which
continuing disclosure must be made. In connection with the disclosure requirements of the City,
the officers of the Authority are hereby authorized and directed to supply to the City such
updated financial and other information relating to the Authority as may be required from time to
time by the City so as to permit the City to comply with the terms of its continuing disclosure
obligation with respect to the Bonds.
ARTICLE II
REFUNDING COSTS; PAYMENT OF COSTS
The costs of refunding the Series 2007 Bonds are not expected to exceed the amount
available from the proceeds of the Bonds to be issued by the Authority. In order to ensure that
moneys sufficient to pay such refunding costs, and necessary financing expenses, will be
available for this purpose when required, the Authority shall, on the date of issuance of the
Bonds, deposit or cause to be deposited with Trustee all of the net proceeds of the sale of the
Bonds (including accrued interest thereon from the date from which interest is to be paid thereon
to the date of delivery to the purchaser or purchasers thereof but except for costs of issuance) for
application and deposit by the Trustee as set forth in the Indenture.
ARTICLE III
APPROVAL AND EXECUTION OF DOCUMENTS
The forms of the Lease, Indenture and Bond Purchase Agreement are hereby approved.
The Chair and Executive Director are hereby authorized and directed to execute and deliver said
documents in the name and on behalf of the Authority with such variations, omissions and
insertions as the Chair and Executive Director shall approve, which approval shall be
conclusively presumed by the execution and delivery of said documents by the Chair and
Executive Director.
ARTICLE IV
AUTHENTICATION OF TRANSCRIPT
The officers of the Authority are hereby authorized and directed to prepare and furnish to
the Purchaser, and to Dorsey & Whitney LLP, the attorneys rendering an opinion as to the
legality thereof, certified copies of all proceedings and records relating to the Bonds and such
other affidavits, certificates and information as may be required to show the facts relating to the
legality and marketability of the Bonds, as the same appear from the books and records in their
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custody and control or as otherwise known to them, and all such certified copies, affidavits and
certificates, including any heretofore furnished, shall be deemed representations of the Authority
as to the correctness of all statements contained therein.
ARTICLE V
OFFICIAL STATEMENT
Springsted Incorporated is hereby authorized and directed to prepare and distribute, on
behalf of the Authority, a Preliminary Official Statement relating to the Bonds and a supplement
to the Preliminary Official Statement, or a final Official Statement (together with the Preliminary
Official Statement, the “Official Statement”), listing the offering price, the interest rates, selling
compensation, delivery date, the underwriters and such other information relating to the Bonds
required to be included in the Official Statement by Rule 15c2-12 adopted by the Securities and
Exchange Commission under the Securities Act of 1934. Within seven business days from the
date the Bonds are sold, the Authority shall deliver to the purchaser sufficient copies of the
Official Statement. The officers of the Authority are hereby authorized and directed to review
such Official Statement and to execute such certificates as may be appropriate concerning the
accuracy, completeness and sufficiency thereof, the execution of which shall constitute full
approval of such.
ARTICLE VI
TAX MATTERS
Section 6.1 General Tax Covenant. The Authority agrees with the Holders from time
to time of the Bonds that it will not take, or permit to be taken by any of its officers, employees
or agents, any action that would cause interest on the Bonds to become includable in gross
income of the recipient under the Internal Revenue Code of 1986, as amended (the Code) and
applicable Treasury Regulations (the Regulations), and agrees to take any and all actions within
its powers to ensure that the interest on the Bonds will not become includable in gross income of
the recipient under the Code and the Regulations. All proceeds of the Bonds will be expended
solely for the payment of the costs of refinancing the Project and refunding the Series 2007
Bonds as set forth in the Indenture.
Section 6.2 Certification. The Chair and Executive Director, being the officers of the
Authority charged with the responsibility for issuing the Bonds pursuant to this Resolution, are
authorized and directed to execute and deliver to the Purchaser a certificate in accordance with
Section 148 of the Code, and applicable Regulations, stating the facts, estimates and
circumstances in existence on the date of issue and delivery of the Bonds which make it
reasonable to expect that the proceeds of the Bonds will not be used in a manner that would
cause the Bonds to be “arbitrage bonds” within the meaning of the Code and Regulations.
Section 6.3 Arbitrage Rebate. The Authority acknowledges that the Bonds are subject
to the rebate requirements of Section 148(f) of the Code. The Authority covenants and agrees to
retain such records, make such determinations, file such reports and documents and pay such
amounts at such times as are required under Section 148(f) and applicable Regulations to
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4810-8377-0703\2
preserve the exclusion of interest on the Bonds from gross income for federal income tax
purposes, unless the Bonds qualify for an exception from the rebate requirement pursuant to one
of the spending exceptions set forth in Section 1.148-7 of the Regulations and no “gross
proceeds” of the Bonds (other than amounts constituting a “bona fide debt service fund”) arise
during or after the expenditure of the original proceeds thereof.
The motion for the adoption of the foregoing resolution was duly seconded by
Commissioner ________________________ and, after fully discussion thereof and upon a vote
being taken thereon, the following voted in favor thereof:
and the following voted against the same:
Whereupon said resolution was declared duly passed and adopted.
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HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF LAKEVILLE, MINNESOTA
The undersigned, being the duly appointed, qualified and acting Secretary of the Housing
and Redevelopment Authority of the City of Lakeville, Minnesota, hereby certifies that the
foregoing is a full, true and correct copy of a resolution duly passed and adopted by the Board of
Commissioners of said Authority at its meeting duly called and held on September 18, 2017, and
that said resolution has not subsequently been amended and is now in full force and effect.
IN WITNESS WHEREOF, I have hereunto set my hand as of the date set forth below.
Dated: September ____, 2017
Secretary
SUMMARY OF TERMS
September 14, 2017
$2,270,000 (approximate)
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017 (the “Bonds”)
Introduction: The HRA of the City of Lakeville (the “HRA”) will be negotiating the refunding of its
2007 Liquor Revenue Bond. Security for the 2017 Bonds will be a pledge of liquor
enterprise funds as well as an annual appropriation. The purpose of the refunding is to
achieve interest cost savings on an approximately even annual basis over the same
repayment term. The net present value savings are currently estimated to be in
excess of $300,000.
The 2007 Liquor Revenue Bonds were issued to pay for the construction of the new
liquor store located at Galaxie Avenue and 160th Street, Lakeville, Minnesota (the
“Facility”).
Underwriter: The City has contacted two underwriting firms to obtain cost proposals. The City has
selected Robert W. Baird & Company (the “Underwriter”) to underwrite the Bonds. The
Underwriter’s activities are focused on pricing the Bonds, as well as any other activities
leading up to pricing required in their capacity as the underwriter.
Issuer: Lakeville Housing and Redevelopment Authority, Minnesota (the “HRA”)
Authority for Issuance: MSA 426.19, 465.71 or 471.64 and an indenture of trust between the HRA and a
trustee yet to be selected (the “Trustee”).
Security and Source of
Payment:
The financing will consist of a lease purchase agreement between the City and the
HRA, wherein the HRA as issuer will receive lease payments equal to scheduled debt
service from the City as operator of the liquor operations. This approach uses a
lease/leaseback format with an annual appropriation pledge to cover debt service from
other available funds of the City in the event that the net revenue of the Liquor
Enterprise is not sufficient to cover debt service. The City will pledge the net revenues
of the Enterprise to the payment of the Lease. The debt service coverage level for the
past three years of the Net Revenue of the Enterprise over the existing bond’s debt
service is shown in the table below:
Fiscal Year Net Revenue Debt Service Coverage
12/31/2014 1,624,852.00 322,625.00 5.04 x
12/31/2015 1,060,978.00 324,125.00 3.27 x
12/31/2016 1,140,004.00 320,250.00 3.56 x
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017
Page 2
0483.151
The City will transfer title to the Facility to the HRA and then lease it back from the
HRA pursuant to a lease (the “Lease”). Title will be transferred back to the City at the
end of the Lease term.
Lease payments will be payable solely from City funds which are annually budgeted
and appropriated by the governing body of the City and which may be terminated by
action of such governing body. There is no assurance that the Lease will be renewed
each Fiscal Year for all of its anticipated term. The governing body of the City is under
no obligation to provide City funds for such renewals. Accordingly, any factors which
may potentially influence the budgeting process of the City should be considered by a
prospective purchaser of the Bonds.
In the event the governing body of the City fails to renew the Lease for any Fiscal
Year, fails to budget and appropriate sufficient City funds for payment of all Rental
Payments, or defaults under the Lease, the Lease will be terminated and the Trustee
will take control of the Facility on behalf of the HRA for the benefit of the bondholders.
The City should note that any failure to appropriate lease payments leading to a default
on timely payment of debt service in all likelihood will lead the rating agency to
downgrade the City’s general obligation rating several categories, and conceivably to
non-investment grade. This situation would cause the interest costs of the City’s future
general obligation bonds to substantially increase for many years.
The refunded issue structure includes a debt service reserve. The existing debt
service reserve will be used as a cash contribution to the refunding. The Underwriter
has indicated that as long as the Bonds are rated in the “Aa” category no reserve fund
will be required to secure the refunding Bonds.
Please Note: The City of Lakeville is currently exploring opportunities to sell the
Kenrick liquor store property and enter into a long-term lease for the existing building.
Sale proceeds would potentially be used for building an additional store at the
Keokuk/I35 location. The City will continue to operate the liquor operations at the
Kenrick location.
Structure and Preliminary
Repayment Structure:
Attached are preliminary schedules showing a refunding summary, debt service
comparison, debt service to maturity and to call, a pricing summary, and a debt service
schedule. Payment dates are also provided. Interest will be paid semi-annually each
February 1 and August 1, beginning February 1, 2018. Principal will be paid annually
each February 1, beginning February 1, 2019. The last principal payment is on
February 1, 2027. Interest rates as of September 6 were provided by the Underwriter.
New debt service has been structured to achieve approximately level annual interest
cost reductions for all years exclusive of those impacted by the dynamics of the
existing debt service reserve.
Interest will be calculated as simple interest on the basis of a 360-day year of twelve
30-day months.
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017
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0483.151
Optional Redemption
Provisions:
The City would prefer an optional prepayment provision at par beginning on February
1, 2025, for the remaining maturities. Subject to negotiation
Tax Status: Tax exempt
Bank Qualification: Non-Bank Qualified
Rating: The City anticipates rating the Bonds.
The City has just completed the competitive sale of its GO Bonds. The GO rating was
affirmed at Aa1 and Aa3 on its lease revenue debt.
Pricing Parameters: The HRA will adopt a resolution setting the maximum principal amount of the Bonds at
$2,700,000 and the maximum true interest cost (TIC) at 2.50%. The same resolution
will authorize the HRA Board Chair or Executive Director or the City Administrator to
approve the final sale and pricing of the Bonds.
Legal and Disclosure: Dorsey & Whitney LLP, Minneapolis, MN will serve as Bond Counsel on all matters
relating to the Issue. It is the City’s expectation that Bond Counsel will draft all legal
documents and the City will pay the fees and expenses of Bond Counsel.
Springsted will have responsibility for preparation of the official statement.
Expected Pricing and
Delivery Date:
The City expect to price the Bonds in mid-October. The settlement would occur
approximately 30 days thereafter.
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017
Page 4
0483.151
$2,270,000
City of Lakeville, Minnesota
Lease Revenue Refunding Bonds, Series 2017 (Annual Principal)
Current Refunding of Series 2007 Liquor
Refunding Summary
Dated 11/08/2017 | Delivered 11/08/2017
Sources Of Funds
Par Amount of Bonds...............................................................................................................................................$2,270,000.00
Reoffering Premium..................................................................................................................................................91,413.60
Transfers from Prior Issue DSR Funds....................................................................................................................295,133.11
Total Sources........................................................................................................................................................$2,656,546.71
Uses Of Funds
Total Underwriter's Discount (0.663%).................................................................................................................. 15,050.10
Costs of Issuance....................................................................................................................................................64,475.00
Deposit to Current Refunding Fund..........................................................................................................................2,571,993.06
Rounding Amount.....................................................................................................................................................5,028.55
Total Uses..............................................................................................................................................................$2,656,546.71
ISSUES REFUNDED AND CALL INFORMATION
Prior Issue Call Price................................................................................................................................................ 100.000%
Prior Issue Call Date.................................................................................................................................................12/15/2017
SAVINGS INFORMATION
Net Present Value Benefit........................................................................................................................................$332,374.35
BOND STATISTICS
Average Life............................................................................................................................................................5.409 Years
Average Coupon......................................................................................................................................................2.6802900%
Net Interest Cost (NIC)............................................................................................................................................. 2.0583544%
True Interest Cost (TIC)............................................................................................................................................2.0037101%
Series 2017 Ref 2007 Liqu | SINGLE PURPOSE | 9/ 6/2017 | 10:55 AM
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017
Page 5
0483.151
$2,270,000
City of Lakeville, Minnesota
Lease Revenue Refunding Bonds, Series 2017 (Annual Principal)
Current Refunding of Series 2007 Liquor
Debt Service Comparison
Date Total P+I Net New D/S Old Net D/S Savings
02/01/2018 - - 263,125.00 263,125.00
02/01/2019 289,095.69 289,095.69 326,250.00 37,154.31
02/01/2020 291,750.00 291,750.00 325,750.00 34,000.00
02/01/2021 286,950.00 286,950.00 329,750.00 42,800.00
02/01/2022 287,150.00 287,150.00 328,000.00 40,850.00
02/01/2023 287,250.00 287,250.00 325,750.00 38,500.00
02/01/2024 287,250.00 287,250.00 328,000.00 40,750.00
02/01/2025 289,600.00 289,600.00 329,500.00 39,900.00
02/01/2026 291,650.00 291,650.00 325,250.00 33,600.00
02/01/2027 288,400.00 288,400.00 30,366.89 (258,033.11)
Total $2,599,095.69 $2,599,095.69 $2,911,741.89 $312,646.20
PV Analysis Summary (Net to Net)
Net FV Cashflow Savings..........................................................................................................................................312,646.20
Gross PV Debt Service Savings................................................................................................................................ 577,393.95
Effects of changes in DSR investments.....................................................................................................................(250,048.15)
Net PV Cashflow Savings @ 1.804%(Bond Yield)...................................................................................................327,345.80
Contingency or Rounding Amount..............................................................................................................................5,028.55
Net Future Value Benefit............................................................................................................................................ $317,674.75
Net Present Value Benefit.......................................................................................................................................... $332,374.35
Net PV Benefit / $641,679.32 PV Refunded Interest..................................................................................................51.798%
Net PV Benefit / $2,947,409.09 PV Refunded Debt Service...................................................................................... 11.277%
Net PV Benefit / $2,525,000 Refunded Principal....................................................................................................... 13.163%
Net PV Benefit / $2,270,000 Refunding Principal.......................................................................................................14.642%
Refunding Bond Information
Refunding Dated Date.................................................................................................................................................11/08/2017
Refunding Delivery Date.............................................................................................................................................11/08/2017
Series 2017 Ref 2007 Liqu | SINGLE PURPOSE | 9/ 6/2017 | 10:55 AM
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017
Page 6
0483.151
3,955,000
City of Lakeville, Minnesota
Liquor Revenue Bonds, Series 2007
Debt Service To Maturity And To Call
Date Refunded
Bonds
Refunded
Interest
D/S To Call Principal Coupon Interest Refunded
D/S
11/08/2017 - - - - - - -
12/15/2017 2,525,000.00 46,993.06 2,571,993.06 - - - -
02/01/2018 - - - 200,000.00 5.000% 63,125.00 263,125.00
08/01/2018 - - - - - 58,125.00 58,125.00
02/01/2019 - - - 210,000.00 5.000% 58,125.00 268,125.00
08/01/2019 - - - - - 52,875.00 52,875.00
02/01/2020 - - - 220,000.00 5.000% 52,875.00 272,875.00
08/01/2020 - - - - - 47,375.00 47,375.00
02/01/2021 - - - 235,000.00 5.000% 47,375.00 282,375.00
08/01/2021 - - - - - 41,500.00 41,500.00
02/01/2022 - - - 245,000.00 5.000% 41,500.00 286,500.00
08/01/2022 - - - - - 35,375.00 35,375.00
02/01/2023 - - - 255,000.00 5.000% 35,375.00 290,375.00
08/01/2023 - - - - - 29,000.00 29,000.00
02/01/2024 - - - 270,000.00 5.000% 29,000.00 299,000.00
08/01/2024 - - - - - 22,250.00 22,250.00
02/01/2025 - - - 285,000.00 5.000% 22,250.00 307,250.00
08/01/2025 - - - - - 15,125.00 15,125.00
02/01/2026 - - - 295,000.00 5.000% 15,125.00 310,125.00
08/01/2026 - - - - - 7,750.00 7,750.00
02/01/2027 - - - 310,000.00 5.000% 7,750.00 317,750.00
Total $2,525,000.00 $46,993.06 $2,571,993.06 $2,525,000.00 - $681,875.00 $3,206,875.00
Yield Statistics
Base date for Avg. Life & Avg. Coupon Calculation.................................................................................................11/08/2017
Average Life............................................................................................................................................................. 5.132 Years
Average Coupon.......................................................................................................................................................5.0000000%
Weighted Average Maturity (Par Basis)................................................................................................................... 5.132 Years
Weighted Average Maturity (Original Price Basis)....................................................................................................5.127 Years
Refunding Bond Information
Refunding Dated Date............................................................................................................................................... 11/08/2017
Refunding Delivery Date........................................................................................................................................... 11/08/2017
2007 Liquor Rev Bonds | SINGLE PURPOSE | 9/ 6/2017 | 10:55 AM
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017
Page 7
0483.151
$2,270,000
City of Lakeville, Minnesota
Lease Revenue Refunding Bonds, Series 2017 (Annual Principal)
Current Refunding of Series 2007 Liquor
Pricing Summary
Maturity Type of Bond Coupon Yield Maturity
Value
Price YTM Call Date Call Price Dollar Price
02/01/2019 Serial Coupon 2.000% 1.100% 220,000.00 101.096% - - - 222,411.20
02/01/2020 Serial Coupon 2.000% 1.200% 240,000.00 101.754% - - - 244,209.60
02/01/2021 Serial Coupon 2.000% 1.300% 240,000.00 102.206% - - - 245,294.40
02/01/2022 Serial Coupon 2.000% 1.400% 245,000.00 102.455% - - - 251,014.75
02/01/2023 Serial Coupon 2.000% 1.550% 250,000.00 102.251% - - - 255,627.50
02/01/2024 Serial Coupon 3.000% 1.750% 255,000.00 107.346% - - - 273,732.30
02/01/2025 Serial Coupon 3.000% 1.950% 265,000.00 107.047% - - - 283,674.55
02/01/2026 Serial Coupon 3.000% 2.100% 275,000.00 106.006% c 2.198% 02/01/2025 100.000% 291,516.50
02/01/2027 Serial Coupon 3.000% 2.250% 280,000.00 104.976% c 2.396% 02/01/2025 100.000% 293,932.80
Total - - - $2,270,000.00 - - - - - $2,361,413.60
Bid Information
Par Amount of Bonds....................................................................................................................................................... $2,270,000.00
Reoffering Premium or (Discount).................................................................................................................................... 91,413.60
Gross Production............................................................................................................................................................. $2,361,413.60
Total Underwriter's Discount (0.663%)...........................................................................................................................$(15,050.10)
Bid (103.364%)................................................................................................................................................................ 2,346,363.50
Total Purchase Price........................................................................................................................................................ $2,346,363.50
Bond Year Dollars............................................................................................................................................................ $12,278.36
Average Life.................................................................................................................................................................... 5.409 Years
Average Coupon.............................................................................................................................................................. 2.6802900%
Net Interest Cost (NIC)......................................................................................................................................................2.0583544%
True Interest Cost (TIC).................................................................................................................................................... 2.0037101%
Series 2017 Ref 2007 Liqu | SINGLE PURPOSE | 9/ 6/2017 | 10:55 AM
Lakeville Housing and Redevelopment Authority, Minnesota
Lease Revenue Liquor Enterprise Refunding Bonds, 2017
Page 8
0483.151
$2,270,000
City of Lakeville, Minnesota
Lease Revenue Refunding Bonds, Series 2017 (Annual Principal)
Current Refunding of Series 2007 Liquor
Debt Service Schedule
Date Principal Coupon Interest Total P+I
02/01/2018 - - - -
08/01/2018 - - 41,020.69 41,020.69
02/01/2019 220,000.00 2.000% 28,075.00 248,075.00
08/01/2019 - - 25,875.00 25,875.00
02/01/2020 240,000.00 2.000% 25,875.00 265,875.00
08/01/2020 - - 23,475.00 23,475.00
02/01/2021 240,000.00 2.000% 23,475.00 263,475.00
08/01/2021 - - 21,075.00 21,075.00
02/01/2022 245,000.00 2.000% 21,075.00 266,075.00
08/01/2022 - - 18,625.00 18,625.00
02/01/2023 250,000.00 2.000% 18,625.00 268,625.00
08/01/2023 - - 16,125.00 16,125.00
02/01/2024 255,000.00 3.000% 16,125.00 271,125.00
08/01/2024 - - 12,300.00 12,300.00
02/01/2025 265,000.00 3.000% 12,300.00 277,300.00
08/01/2025 - - 8,325.00 8,325.00
02/01/2026 275,000.00 3.000% 8,325.00 283,325.00
08/01/2026 - - 4,200.00 4,200.00
02/01/2027 280,000.00 3.000% 4,200.00 284,200.00
Total $2,270,000.00 - $329,095.69 $2,599,095.69
Yield Statistics
Bond Year Dollars.................................................................................................................................................... $12,278.36
Average Life.............................................................................................................................................................5.409 Years
Average Coupon...................................................................................................................................................... 2.6802900%
Net Interest Cost (NIC).............................................................................................................................................. 2.0583544%
True Interest Cost (TIC)............................................................................................................................................ 2.0037101%
Bond Yield for Arbitrage Purposes.......................................................................................................................... 1.8040032%
All Inclusive Cost (AIC)............................................................................................................................................. 2.5623560%
IRS Form 8038
Net Interest Cost....................................................................................................................................................... 1.8455026%
Weighted Average Maturity...................................................................................................................................... 5.454 Years
Series 2017 Ref 2007 Liqu | SINGLE PURPOSE | 9/ 6/2017 | 10:55 AM
DRAFT 9/15/17
=====================================================================
LEASE-PURCHASE AGREEMENT
between the
HOUSING AND REDEVELOPMENT AUTHORITY
OF THE CITY OF LAKEVILLE, MINNESOTA
as Lessor
and the
CITY OF LAKEVILLE, MINNESOTA
as Lessee
Dated as of November 1, 2017
=====================================================================
Relating to:
LEASE REVENUE LIQUOR ENTERPRISE REFUNDING BONDS, SERIES 2017A
This instrument drafted by:
Dorsey & Whitney LLP (NC)
Suite 1500
50 South Sixth Street
Minneapolis, Minnesota 55402
(612) 340-2600
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND EXHIBITS............................................................................... 5
Section 1.1. Definitions .................................................................................................... 5
Section 1.2. Exhibits......................................................................................................... 6
ARTICLE II REPRESENTATIONS, COVENANTS AND WARRANTIES ............................... 7
Section 2.1. Representations, Covenants and Warranties of Lessee ................................ 7
Section 2.2. Representations Covenants and Warranties of Lessor ................................. 7
ARTICLE III AGREEMENT TO LEASE ..................................................................................... 9
Section 3.1. Lease............................................................................................................. 9
Section 3.2. Possession and Enjoyment ........................................................................... 9
Section 3.3. Lessor Access to Project .............................................................................. 9
ARTICLE IV TERM OF LEASE ................................................................................................. 10
Section 4.1. Term of Lease............................................................................................. 10
Section 4.2. Termination of Lease Term ........................................................................ 10
ARTICLE V RENTAL PAYMENTS .......................................................................................... 11
Section 5.1. Rental Payments ......................................................................................... 11
Section 5.2. Current Expense ......................................................................................... 11
Section 5.3. Rental Payments to be Unconditional ........................................................ 11
Section 5.4. Reserved ..................................................................................................... 11
Section 5.5. Intent to Continue Rental Payments; Appropriations ................................ 11
ARTICLE VI NONAPPROPRIATION ....................................................................................... 12
Section 6.1. Termination of Lease ................................................................................. 12
Section 6.2. Return of Project ........................................................................................ 12
Section 6.3. Effect of Termination ................................................................................. 12
Section 6.4. Reserved ..................................................................................................... 12
ARTICLE VII MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS ............ 13
Section 7.1. Maintenance and Modification of Project by Lessee ................................. 13
Section 7.2. Taxes, Other Government Charges and Utility Charges ............................ 13
Section 7.3. Liability Insurance...................................................................................... 14
Section 7.4. Lessee’s Negligence ................................................................................... 14
Section 7.5. Property Insurance...................................................................................... 14
Section 7.6. Worker’s Compensation Insurance ............................................................ 14
2
Section 7.7. Other Insurance and Requirements for All Insurance ................................ 14
Section 7.8. Advances .................................................................................................... 15
Section 7.9. Liens ........................................................................................................... 15
Section 7.10. Rebate ....................................................................................................... 15
ARTICLE VIII DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET
PROCEEDS .................................................................................................................................. 16
Section 8.1. Damage, Destruction and Condemnation................................................... 16
Section 8.2. Cooperation of Lessor ................................................................................ 16
Section 8.3. Condemnation of Other Property Owned by Lessee .................................. 16
ARTICLE IX LESSEE’S EQUIPMENT; WARRANTIES ......................................................... 17
Section 9.1. Installation of Lessee’s Equipment ............................................................ 17
Section 9.2. Reserved ..................................................................................................... 17
Section 9.3. Reserved ..................................................................................................... 17
Section 9.4. Warranties .................................................................................................. 17
Section 9.5. Disclaimer of Warranties ........................................................................... 17
ARTICLE X OPTION TO PURCHASE ...................................................................................... 18
Section 10.1. When Available ........................................................................................ 18
Section 10.2. Exercise of Option .................................................................................... 18
Section 10.3. Release of Lessor’s Interest...................................................................... 18
Section 10.4. Defeasance ............................................................................................... 18
ARTICLE XI ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING .................. 19
Section 11.1. Assignment by Lessor .............................................................................. 19
Section 11.2. Assignment and Subleasing by Lessee..................................................... 19
Section 11.3. Restriction on Mortgage or Sale of Project by Lessee ............................. 19
ARTICLE XII EVENTS OF DEFAULT AND REMEDIES ....................................................... 20
Section 12.1. Events of Default Defined ........................................................................ 20
Section 12.2. Remedies on Default ................................................................................ 21
Section 12.3. Return of Project ...................................................................................... 21
Section 12.4. Delay; Notice............................................................................................ 21
Section 12.5. No Remedy Exclusive .............................................................................. 22
Section 12.6. Agreement to Pay Attorneys’ Fees and Expenses .................................... 22
Section 12.7. No Additional Waiver Implied By One Waiver....................................... 22
ARTICLE XIII TITLE .................................................................................................................. 23
Section 13.1. Title to Project .......................................................................................... 23
Section 13.2. Security Interest........................................................................................ 23
3
ARTICLE XIV ISSUANCE OF THE BONDS............................................................................ 24
Section 14.1. Agreement to Issue Bonds; Application of Bond Proceeds ..................... 24
ARTICLE XV ADMINISTRATIVE PROVISIONS ................................................................... 25
Section 15.1. Notices ...................................................................................................... 25
Section 15.2. Binding Effect .......................................................................................... 25
Section 15.3. Severability............................................................................................... 25
Section 15.4. Amendments, Charges and Modifications ............................................... 25
Section 15.5. Further Assurances and Corrective Instruments ...................................... 25
Section 15.6. Execution in Counterparts ........................................................................ 25
Section 15.7. Applicable Law ........................................................................................ 25
Section 15.8. Lessor and Lessee Representatives .......................................................... 25
Section 15.9. Captions .................................................................................................... 25
4
LEASE-PURCHASE AGREEMENT
This LEASE-PURCHASE AGREEMENT (the Lease) is executed as of November 1,
2017, between the HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF
LAKEVILLE, MINNESOTA, as lessor (together with its successors and assigns, Lessor), whose
address is 20195 Holyoke Avenue, P.O. Box 957, Lakeville, Minnesota 55044, and the CITY OF
LAKEVILLE, MINNESOTA, as lessee (Lessee), whose address is 20195 Holyoke Avenue, P.O.
Box 957, Lakeville, Minnesota 55044.
RECITALS
WHEREAS, the Lessee is authorized by Minnesota Statutes to acquire real and personal
property by entering into lease-purchase agreements;
WHEREAS, the Lessee has heretofore issued its Liquor Revenue Bonds, Series 2007,
dated May 1, 2007, in the aggregate original principal amount of $3,955,000 (the Series 2007
Bonds), to acquire certain real property (as further described herein, the Land) and construct,
furnish and equip a new liquor store thereon (as further described herein, the Improvements);
WHEREAS, the Lessor has authorized the issuance of its $[_________] Lease Revenue
Liquor Enterprise Refunding Bonds, Series 2017A (the Bonds), for the purpose of refunding all
the outstanding Series 2007 Bonds and refinancing the Land and the Improvements;
WHEREAS, the Series 2007 Bonds will be defeased upon issuance of the Bonds and
good and marketable title to the Land and the Improvements will be in the Lessee, which title
will be conveyed simultaneously with the issuance of the Bonds by quitclaim deed to the Lessor;
and
WHEREAS, to secure payment of the Bonds, the Lessor hereby leases to the Lessee, and
the Lessee hereby hires and takes from the Lessor, the Land and the Improvements, and for such
purpose the Lessor grants to the Lessee for the term of this Lease all rights necessary for the
Lessee to lease and purchase the Land and the Improvements.
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:
5
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, have the meanings herein specified.
Code means the Internal Revenue Code of 1986, as now or hereafter amended, and the
regulation and revenue rulings and procedures issued pursuant thereto from time to time.
Fiscal Year means each twelve month fiscal period of Lessee commencing on January 1
of any year and ending on the following December 31.
Improvements means the building designed, acquired, constructed and installed on the
Land with proceeds of the Series 2007 Bonds and any personal property acquired or installed in
connection therewith, and any other improvements constructed on the Land and or personal
property acquired with proceeds of the Series 2007 Bonds.
Indenture means the Trust Indenture entered into between Lessor and U.S. Bank National
Association, as trustee, dated as of the date hereof.
Independent Counsel means an attorney duly admitted to the practice of law before the
highest court of any state who is not an officer or a full-time employee of Lessor, Lessee or an
assignee thereof.
Land means the real property acquired with proceeds of the Series 2007 Bonds, as legally
described in the attached Exhibit A.
Lessee Representative means the City Administrator or City Finance Director of Lessee,
or any other person authorized to act on behalf of Lessee under or with respect to this Lease, as
evidenced by a certificate conferring such authority executed by the City Administrator, given to
the Trustee and the Lessor.
Lessor Representative means the Chair or Executive Director of Lessor, or any other
person authorized to act on behalf of Lessor under or with respect to this Lease, as evidenced by
a certificate conferring such authority executed by the Chair, given to the Trustee and the Lessee.
Net Proceeds means any insurance proceeds or condemnation award paid with respect to
the Improvements, remaining after payment therefrom of all expenses incurred in the collection
thereof.
Payment Date means the date upon which any Rental Payment is due and payable as
provided in the attached Exhibit B.
Permitted Encumbrances means, as of any particular time, (i) liens for taxes and
assessments not then delinquent, or which Lessee may, pursuant to provisions of Article VII
hereof, permit to remain unpaid; (ii) this Lease; (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, or
6
which Lessee may, pursuant to provisions of Article VII hereof, permit to remain unpaid;
(iv) minor defects and irregularities in the title to the Land which do not in the aggregate
materially impair the use of the Project for the purposes for which it is or may reasonably be
expected to be held; (v) easements, exceptions or reservations for the purpose of pipelines,
telephone lines, telegraph lines, power lines and substations, roads, streets, alleys, highways,
railroad purposes, drainage and sewage purposes, dikes, canals, laterals, ditches, the removal of
oil, gas, coal or other minerals, and other like purposes, or for the joint or common use of real
property, facilities and equipment, which do not materially impair the use of the Project for the
purposes for which it is or may reasonably be expected to be held; (vi) rights reserved to or
vested in any municipality or governmental or other public authority to control or regulate or use
in any manner any portion of the Land which do not materially impair the use of the Project for
the purposes for which it is or may reasonably be expected to be held; (vii) present and future
valid zoning laws and ordinances; and (viii) [any liens or encumbrances specifically listed as
such on Exhibit A attached hereto].
Project means the Land and the Improvements, together.
Qualified Investments means only those described in Minnesota Statutes, Section 475.67,
Subdivision 8, or any successor statute.
Rental Payment means any payment due from Lessee to Lessor under Section 5.1 of this
Lease.
State means the State of Minnesota.
State and Federal Law or Laws means the Constitution and laws of the State, 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 this Lease or Lease Term means the period during which this Lease remains in
effect as specified in Sections 4.1 and 4.2.
Trustee means U.S. Bank National Association, as trustee under the Indenture.
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 – The schedule of Rental Payments to be paid by Lessee to Lessor, showing the
date and amount of each Rental Payment.
7
ARTICLE II
REPRESENTATIONS, COVENANTS AND WARRANTIES
Section 2.1. Representations, Covenants and Warranties of Lessee. Lessee represents,
covenants and warrants as follows:
(a) Lessee is a duly formed and validly existing body corporate and political
subdivision of the State, governed by the Constitution and laws of the State.
(b) State and Federal Laws authorize Lessee to construct, lease, operate and
maintain the Project; to enter into this Lease and the transactions contemplated hereby;
and to carry out its obligations under this Lease.
(c) The officers of Lessee executing this Lease and the documents
contemplated hereby have been duly authorized to execute and deliver this Lease and
related documents under the terms and provisions of a resolution of Lessee’s governing
body or by other appropriate official action.
(d) Lessee has complied with all open meeting laws, all public bidding laws
and all other State and Federal Laws applicable to this Lease and the acquisition of the
Project by Lessee.
(e) Except as provided under the terms of this Lease, Lessee will not transfer,
lease, assign, mortgage or encumber the Project.
(f) During the Term of this Lease, Lessee will not take or permit to be taken
any action with respect to the Lease or the Project which would cause the interest
received by the holders of the Bonds to become includable in gross income of such
recipients for federal income tax purposes under the Code and Lessee will take all actions
necessary to ensure that such interest remains not includable in gross income of such
recipients for federal income tax purposes under the Code, insofar as it has the power and
authority to do so.
(g) Lessee may accomplish any of its obligations herein by an agent.
Section 2.2. Representations Covenants and Warranties of Lessor. Lessor represents,
covenants and warrants as follows:
(a) Lessor is a public body, corporate and politic duly organized, existing and
in good standing under the laws of the State; has full and complete power to issue the
Bonds and to enter into this Lease and to enter into and carry out the transactions
contemplated hereby, and to carry out its obligations under, this Lease; is possessed of
full power to own and hold real and personal property, and to lease the same; and has
duly authorized the issuance and delivery of the Bonds and the execution and delivery of
this Lease.
8
(b) Neither the issuance and delivery of the Bonds nor the execution and
delivery of this Lease, nor the fulfillment of or compliance with the terms and conditions
hereof, nor the consummation of the transactions contemplated hereby, conflicts with or
results in a breach of the terms, conditions or provisions of any law, regulation,
restriction or any agreement or instrument to which Lessor is now a party or by which
Lessor or its property is bound, or constitutes a default under any of the foregoing, or
results in the creation or imposition of any lien, charge or encumbrance whatsoever upon
any of the property or assets of Lessor, or upon the Project, except Permitted
Encumbrances.
(c) Upon payment by Lessee of the amounts described in Section 10.1 hereof
or the defeasance of Lessee’s obligations hereunder pursuant to Article X hereof, Lessor
will deliver to Lessee all documents which are or may be necessary to vest all of Lessor’s
right, title and interest in and to the Project in Lessee, and will release all liens and
encumbrances created under this Lease.
(d) During the Term of this Lease, Lessor will not take or permit to be taken
any action with respect to the Lease or the Project which would cause the interest
received by the holders of the Bonds to become includable in gross income of such
recipients for federal income tax purposes under the Code and Lessee will take all actions
necessary to ensure that such interest remains not includable in gross income of such
recipients for federal income tax purposes under the Code, insofar as it has the power and
authority to do so.
9
ARTICLE III
AGREEMENT TO LEASE
Section 3.1. Lease. Lessor hereby leases, with an option to purchase, the Project to
Lessee, and Lessee hereby leases, with an option to purchase, the Project from Lessor, upon the
terms and conditions set forth in this Lease.
Section 3.2. Possession and Enjoyment. Lessor hereby covenants with respect to the
Project to provide Lessee during the Term of this Lease with quiet use and enjoyment of the
Project, and Lessee shall during such Lease Term peaceably and quietly have and hold and enjoy
the Project, without suit, trouble or hindrance from Lessor, except as expressly set forth in this
Lease. Lessor will, at the request of Lessee and at Lessee’s cost, join in any legal action in
which Lessee asserts its right to such possession and enjoyment to the extent Lessor may
lawfully do so.
Section 3.3. Lessor Access to Project. Lessee agrees that Lessor shall have the right
during Lessee’s normal working hours on Lessee’s normal working days to enter on and examine
and inspect the Project for the purpose of assuring that the Project is being properly maintained,
preserved and kept in good repair and condition. Lessee further agrees that Lessor 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 Lessee to perform its obligations hereunder.
10
ARTICLE IV
TERM OF LEASE
Section 4.1. Term of Lease. This Lease shall be and remain in effect with respect to
the Project for a Lease Term commencing on the date of execution hereof and continuing until
terminated as provided in Section 4.2.
Section 4.2. Termination of Lease Term. The Term of this Lease will terminate upon
the occurrence of the first of the following events:
(a) the termination by Lessee of its obligation to make any further Rental
Payments in accordance with Section 6.1;
(b) the exercise by Lessee of its option to purchase Lessor’s interest in the
Project or to defease its obligations hereunder pursuant to Article X;
(c) a default by Lessee and Lessor’s election to terminate this Lease pursuant
to Article XII; or
(d) the payment by Lessee of all Rental Payments required to be paid by
Lessee hereunder.
11
ARTICLE V
RENTAL PAYMENTS
Section 5.1. Rental Payments. Lessee shall pay semiannual Rental Payments with
respect to the Project, as set forth in Exhibit B, three business days (if by check) and one
business day (if by wire) prior to the dates that payments are due on the Bonds, as further
described in the Indenture. The Rental Payments shall be payable to the Trustee, as assignee of
the Lessor, at its address specified Section 14.08 of the Indenture. The Lessee shall also pay, as
additional Rental Payments, any amounts necessary to restore the balance on hand in the Debt
Service Reserve Fund to the Debt Service Reserve Requirement pursuant to Section 5.02 of the
Indenture.
Section 5.2. Current Expense. The obligations of Lessee under this Lease, including
its obligation to pay the Rental Payments due with respect to the Project in any Fiscal Year for
which this Lease is in effect, shall constitute a current expense of Lessee for such Fiscal Year
and shall not constitute an indebtedness of Lessee within the meaning of the Constitution and
laws of the State. Nothing herein shall constitute a pledge by Lessee of any taxes or other
moneys, other than moneys lawfully appropriated from time to time by or for the benefit of
Lessee in its annual budget, the proceeds or Net Proceeds of the Project, to the payment of any
Rental Payment or other amount coming due hereunder.
Section 5.3. Rental Payments to be Unconditional. Except as provided in Section 6.1,
the obligation of Lessee to make Rental 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 Lessee and Lessor or any other person, Lessee shall make all Rental
Payments and other payments required hereunder when due and shall not withhold any Rental
Payment or other payment pending final resolution of such dispute nor shall Lessee assert any
right of set-off or counterclaim against its obligation to make such Rental Payments or other
payments required under this Lease. Lessee’s obligation to make Rental Payments or other
payments during the Lease Term shall not be abated through accident or unforeseen
circumstances. However, nothing herein shall be construed to release Lessor from the
performance of its obligations hereunder, and if Lessor should fail to perform any such
obligation, Lessee may institute such legal action against Lessor as Lessee may deem necessary
to compel the performance of such obligation or to recover damages therefor.
Section 5.4. Reserved.
Section 5.5. Intent to Continue Rental Payments; Appropriations. Lessee presently
intends to continue this Lease for the entire Term of this Lease and to pay all Rental Payments
required hereunder. Lessee reasonably and in good faith believes that amounts sufficient to pay
all Rental Payments due hereunder can and will lawfully be appropriated or budgeted and made
available for this purpose during the Lease Term.
12
ARTICLE VI
NONAPPROPRIATION
Section 6.1. Termination of Lease. Lessee shall have the right to cancel and terminate
this Lease, in whole but not in part, effective at the end of any Fiscal Year of Lessee, in the
manner and subject to the terms specified in this Section and Section 6.3, if Lessee is not
authorized by law to appropriate or does not appropriate moneys sufficient to pay the Rental
Payments coming due in the next Fiscal Year. Lack of a sufficient appropriation shall be
evidenced by a specific provision in Lessee’s budget for the Fiscal Year in question so stating.
Lessee may effect such termination by giving to Lessor a written notice of nonappropriation and
termination and by paying to Lessor any Rental Payments which are due and have not been paid
at or before the end of its then current Fiscal Year. Lessee shall endeavor to give notice of
termination not less than sixty (60) days prior to the end of such Fiscal Year, and shall notify
Lessor of any anticipated termination.
Section 6.2. Return of Project. In the event of termination of this Lease as provided in
Section 6.1, Lessee shall surrender possession of the Project to Lessor in accordance with
Section 12.3, and release its interest in the same, as granted under this Lease, within 10 days
after the termination of this Lease.
Section 6.3. Effect of Termination. Upon termination of Lessee’s obligation to make
Rental Payments as provided in Section 6.1, Lessee shall not be responsible for the payment of
any additional Rental Payments coming due with respect to succeeding Fiscal Years, but if
Lessee has not surrendered possession of the Project to Lessor in accordance with Sections 6.2
and 12.3, the termination shall nevertheless be effective, but Lessee shall be responsible for the
payment of damages in an amount equal to the amount of the Rental Payments thereafter coming
due under Exhibit B which are attributable to the number of days during which Lessee fails to
take such actions. Upon termination of this Lease as provided in Section 6.1, the Trustee, as
directed by and on behalf of the Lessor, shall thereafter use its best efforts to sell or lease its
interest in the Project or any portion thereof in a commercially reasonable manner in accordance
with applicable State laws and apply the proceeds of such lease or sale shall be applied in
accordance with the Indenture; provided, however, that a termination pursuant to Section 6.1 is
not an event of default hereunder.
Section 6.4. Reserved.
13
ARTICLE VII
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 7.1. Maintenance and Modification of Project by Lessee. Lessee 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 all repairs, replacements and improvements
necessary to keep the Project in such condition. Lessor shall have no responsibility for any of
these repairs, replacements or improvements. In addition, Lessee shall, at its own expense, have
the right to remodel the Project or to make additions, modifications and improvements thereto.
All such additions, modifications and improvements shall thereafter comprise part of the Project
and be subject to the provisions of this Lease. Such additions, modifications and improvements
shall not in any way damage the Project nor cause it to be used for purposes other than those
authorized under the provisions of State 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. Any property for which a substitution or replacement is made pursuant to this
Section may be disposed of by Lessee in such manner and on such terms as are determined by
Lessee. Lessee will not permit any mechanic’s or other lien to be established or remain against
the Project for labor or material furnished in connection with any remodeling, additions,
modifications, improvements, repairs, renewals or replacements made by Lessee pursuant to this
Section; provided that if any such lien is established and Lessee shall first notify Lessor of
Lessee’s intention to do so, Lessee 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 Lessor shall notify
Lessee that, in the opinion of Independent Counsel, by nonpayment of such item the interest of
Lessor in the Project will be materially endangered or the Project or any part thereof will be
subject to loss or forfeiture, in which event Lessee shall promptly pay and cause to be satisfied
and discharged all such unpaid items or provide Lessor with full security against any such loss or
forfeiture, in form satisfactory to Lessor. Lessor will cooperate fully with Lessee in any such
contest, upon the request and at the expense of Lessee.
Section 7.2. Taxes, Other Government Charges and Utility Charges. Lessee 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. Lessee 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 or any part
thereof, 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 Project; provided that with respect to special assessments or
other governmental charges that may lawfully be paid in installments over a period of years,
Lessee shall be obligated to pay only such installments as are required to be paid during the
Term of this Lease as and when the same become due.
Lessee may, at Lessee’s expense and in Lessee’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
14
contest and any appeal therefrom unless Lessor shall notify Lessee that, in the opinion of
Independent Counsel, by nonpayment of any such items the interest of Lessor in the Project will
be materially endangered or the Project or any part thereof will be subject to loss or forfeiture, in
which event Lessee shall promptly pay such taxes, assessments or charges or provide Lessor
with full security against any loss which may result from nonpayment, in form satisfactory to
Lessor.
Section 7.3. Liability Insurance. Upon receipt of possession of the Project, the Lessee
shall take such measures as may be necessary to ensure that any 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
condition or the operation of the Project or any part thereof, is covered by a blanket or other
general liability insurance policy maintained by the Lessee. The Net Proceeds of all such
insurance shall be applied toward extinguishment or satisfaction of the liability with respect to
which any Net Proceeds may be paid.
Section 7.4. Lessee’s Negligence. Lessee 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 Lessee or of third parties, and whether such property damage be to Lessee’s
property or the property of others, which is proximately caused by the negligent conduct of
Lessee, its officers, employees and agents. Lessee hereby assumes responsibility for and agrees
to reimburse Lessor and Trustee for all liabilities, obligations, losses, damages, penalties, claims,
actions, costs and expenses (including reasonable attorney’s fees) whatsoever kind and nature,
imposed on, incurred by or asserted against Lessor or Trustee that in any way relate to or arise
out of a claim, suit or proceeding based in whole or in part upon the negligent conduct of Lessee,
its officers, employees and agents, to the maximum extent permitted by law.
Section 7.5. Property Insurance. Upon receipt of possession of the Project, the Lessee
shall have and assume the risk of loss with respect thereto. The Lessee shall procure and
maintain continuously in effect during the Lease Term, all-risk insurance, subject only to the
standard exclusions contained in the policy, in such amount as will be at least sufficient so that a
claim may be made for the full replacement cost of any part thereof damaged or destroyed and to
pay the applicable purchase price of the Project as set forth in Section 10.1. Such insurance may
be provided by a rider to an existing policy or under a separate policy. Such insurance may be
written with customary deductible amounts. The Net Proceeds of insurance required by this
Section shall be applied to the prompt repair, restoration or replacement of the Project, or to the
purchase of the Project, as provided in Section 8.1. Any Net Proceeds not needed for those
purposes shall be paid to the Lessee.
Section 7.6. Worker’s Compensation Insurance. If required by State law, the Lessee
shall carry worker’s compensation insurance covering all its employees on, in, near or about the
Project. Alternatively, the Lessee may self-insure against such liabilities in accordance with
applicable law.
Section 7.7. 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 under the laws of one
15
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 all parties at least ten (10) days before the cancellation or revision becomes effective;
and shall name Lessee and Lessor as insured parties. Lessee shall deposit with Lessor 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, Lessee shall furnish to Lessor 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 Lessee shall notify Lessor of this fact.
Section 7.8. Advances. If Lessee shall fail to perform any of its obligations under this
Lease, Lessor may, but shall not be obligated to take such action as may be necessary to cure
such failure, including the advancement of money, and Lessee shall be obligated to repay all
such advances on demand 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. Lessee 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 Lessor and Lessee as herein provided and Permitted
Encumbrances. Except as expressly provided in this Article, Lessee shall promptly, at its own
expense, take such action as may be necessary duly to discharge or remove any such mortgage,
pledge, lien, charge, encumbrance or claim.
Section 7.10. Rebate. The Lessor and Lessee acknowledge that the Bonds are subject to
the rebate requirements of Section 148(f) of the Code. The Lessee covenants and agrees to retain
such records, make such determinations, file such reports and documents and pay such amounts
at such times as are required under said Section 148(f) and applicable regulations, unless the
Bonds qualify for an exception from the rebate requirement pursuant to one of the spending
exceptions set forth in Section 1.148-7 of the regulations promulgated under the Code and no
“gross proceeds” of the Bonds (other than amounts constituting a “bona fide debt service fund”)
arise during or after the expenditure of the original proceeds thereof.
16
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION; USE OF NET PROCEEDS
Section 8.1. Damage, Destruction and Condemnation. If (i) more than 25% of the
value of 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 Lessee or
Lessor in the Project 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, Lessee, unless it has determined to terminate this Lease in accordance
with Section 6.1 hereof, shall be entitled to the Net Proceeds of any insurance or condemnation
award and shall apply such Net Proceeds (x) to the prompt repair, restoration, modification or
improvement of the Project by Lessee, in which event Lessee shall be obligated to continue to
pay the Rental Payments due with respect to the Project, or (y) to the payment of the applicable
prepayment price in accordance with Article X. In the event the Lessee has determined to
terminate this Lease in accordance with Section 6.1 hereof, the Lessee shall turn over such Net
Proceeds to the Lessor.
Section 8.2. Cooperation of Lessor. Lessor shall cooperate fully with Lessee at the
expense of Lessee 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 thereof and will, to the
extent it may lawfully do so, permit Lessee to litigate in any proceeding resulting therefrom in
the name of and on behalf of Lessor. In no event will Lessor 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 Lessee.
Section 8.3. Condemnation of Other Property Owned by Lessee. Lessee 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 Project.
17
ARTICLE IX
LESSEE’S EQUIPMENT; WARRANTIES
Section 9.1. Installation of Lessee’s Equipment. Lessee may at any time and from time
to time, in its sole discretion and its own expense, install items of moveable machinery, standard
office partition, railings, doors, lighting fixtures, and such other equipment as may in Lessee’s
judgment be necessary for its purposes, in or upon the Project. All such items shall remain the
sole property of Lessee, in which Lessor shall have no interest, and may be modified or removed
by Lessee at any time provided that Lessee 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 Lessee from purchasing items to be installed pursuant to this Section
under a conditional sale or lease with option to purchase contract, 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. Reserved.
Section 9.3. Reserved.
Section 9.4. Warranties. Lessor hereby assigns to Lessee for and during the Term of
this Lease, all of its interest in all warranties and guarantees or other contract rights against any
architect, contractor or manufacturer for the Project, expressed or implied, issued on or
applicable to the Project, and Lessor hereby authorizes Lessee to obtain the customary services
furnished in connection with such warranties and guarantees at Lessee’s expense. Lessee’s sole
remedy for the breach of such warranties and guarantees shall be against the manufacturer or
supplier of such portion of the Project or such contractor or architect, and not against Lessor, nor
shall such matter have any effect whatsoever on the rights of the Lessor with respect to this
Lease, including the right to receive full and timely payments hereunder. Lessee expressly
acknowledges that Lessor does not make and has not made any representation or warranty
whatsoever as to the existence or availability of such warranties with respect to the Project or any
portion thereof.
Section 9.5. Disclaimer of Warranties. LESSOR MAKES NO WARRANTY OR
REPRESENTATION, EITHER EXPRESSED OR IMPLIED, AS TO THE VALUE, DESIGN,
CONDITION, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE OR
FITNESS FOR THE USE CONTEMPLATED BY LESSEE OF THE PROJECT, OR ANY
OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROJECT. In no
event shall Lessor be liable for any incidental, indirect, special or consequential damage in
connection with or arising out of this Lease or the existence, furnishing, functioning or Lessee’s
use of any portion of the Project provided for in this Lease.
18
ARTICLE X
OPTION TO PURCHASE
Section 10.1. When Available. Lessee shall have the option to purchase Lessor’s
interest in the Project (i) on any Payment Date on or after [________, 202_], but only if Lessee is
not in default under this Lease, and (ii) on any date pursuant to the events described in Section
8.1 hereof, and only in the manner provided in this Article, at a price equal to the principal
amount of Rental Payments outstanding, plus accrued interest to the date of prepayment.
Section 10.2. Exercise of Option. Lessee shall give notice to Lessor of its intention to
exercise its option not less than forty-five (45) days prior to the Payment Date on which the
option is to be exercised, and shall deposit with Lessor on the date of exercise an amount equal
to all Rental Payments and any other amounts then due or past due. The closing shall be on the
Payment Date on which the option is to be exercised at the office of Lessor.
Section 10.3. Release of Lessor’s Interest. Upon exercise by Lessee of its option to
purchase, Lessee shall have no further obligations under this Lease and Lessor and its officers
shall take all actions necessary to authorize, execute and deliver to Lessee any and all documents
necessary to vest in Lessee, all of Lessor’s right, title and interest in and to the Project, free and
clear of all liens, leasehold interest and encumbrances arising under the provisions of this Lease.
Section 10.4. Defeasance. Lessee shall have the right to defease and satisfy its
obligations to pay Rental Payments due under this Lease, in the manner and with the effect
provided in this Section; but such right may only be exercised if Lessee is not in default under
the Lease, or if the exercise of such right would cure such default. If the whole amount of the
Rental Payments due and payable under this Lease shall be paid, or provision shall have been
made for the payment of the same by the deposit of cash or the Qualified Investments in an
amount sufficient (together with interest earnings thereon) to provide for payment of said Rental
Payments to the last Payment Date, or earlier Payment Date on which the option to purchase of
Lessee may be exercised, and all administrative expenses related thereto shall have been paid or
provided for, then, and in that case, all right, title and interest of Lessor in and to the Project, this
Lease and the Rental Payments due hereunder shall thereupon cease, terminate and become void;
and Lessor shall assign and transfer to or upon the order of Lessee all rights in the Project and
this Lease then held by Lessor, and shall execute such documents as may be reasonably required
by Lessee for this purpose; and thereafter the Rental Payments due hereunder shall be payable
solely from the moneys and securities so deposited.
19
ARTICLE XI
ASSIGNMENT, SUBLEASING, MORTGAGING AND SELLING
Section 11.1. Assignment by Lessor. Lessor shall not assign its obligations under this
Lease, and no purported assignment thereof shall be effective. All of Lessor’s rights, title and/or
interest in and to this Lease, the Rental Payments and other amounts due hereunder and the
Project may not be assigned except to a trustee or other fiduciary for the holders of the Bonds.
Section 11.2. Assignment and Subleasing by Lessee. This Lease may not be assigned or
subleased by Lessee without the written consent of Lessor.
Section 11.3. Restriction on Mortgage or Sale of Project by Lessee. Lessee will not
mortgage, sell, assign, transfer or convey the Project or any portion thereof during the Term of
this Lease without the written consent of Lessor.
20
ARTICLE XII
EVENTS OF DEFAULT AND REMEDIES
Section 12.1. Events of Default Defined. The following 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:
(a) Failure by Lessee to pay any Rental Payment or other payment required to
be paid hereunder on the due date specified herein and the continuation of said failure for
a period of three (3) business days after written notice given by Lessor that the payment
referred to in such notice has not been received.
(b) Failure by Lessee 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 Lessee by Lessor, unless Lessor 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, Lessor
will not unreasonably withhold its consent to an extension of such time if corrective
action is instituted by Lessee within the applicable period and diligently pursued until the
default is corrected.
(c) The filing by Lessee of a voluntary petition in bankruptcy, or failure by
Lessee promptly to lift any execution, garnishment or attachment of such consequence as
would impair the ability of Lessee to carry on its operations at the Project, or adjudication
of Lessee as a bankrupt, or assignment by Lessee into an agreement of composition with
creditors, or the approval by a court of competent jurisdiction of a petition applicable to
Lessee 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 majeure Lessee is unable in whole or part to carry out its
obligations under this Lease with respect to the Project, other than the obligation of Lessee to
pay Rental Payments with respect thereto which shall be paid when due notwithstanding the
provisions of this paragraph, Lessor or Lessee shall not be deemed in default during the
continuance of such inability. The term “force majeure” 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;
insurrections; riots; landslides; earthquakes; fires; storms; droughts; floods; explosions; breakage
or accident to machinery, transmission pipes or canals; or any other cause of event not
reasonably within the control of Lessee and not resulting from its negligence. Lessee 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
industrial disturbances shall be entirely within the discretion of Lessee and Lessee shall not be
required to make settlement of strikes, lockouts and other industrial disturbances by acceding to
21
the demands of the opposing party or parties when such course is in its judgment unfavorable to
Lessee.
Notwithstanding anything contained in this Section 12.1 to the contrary, a failure by
Lessee to pay when due any payment required to be made under this Lease or a failure by Lessee
to observe and perform any covenant, condition or agreement on its part to be observed or
performed under this Lease, resulting from Lessee’s termination of the Lease as contemplated by
Section 6.1 hereof, shall not constitute an event of default under this Section 12.1.
Section 12.2. Remedies on Default. Whenever any event of default referred to in
Section 12.1 hereof shall have happened and be continuing with respect to the Project, Lessor
shall have the right, at its option and without any further demand or notice, to take one or any
combination of the following remedial steps:
(a) With or without terminating this Lease, re-enter and take possession of the
Project and exclude Lessee from using it; provided, however, that if this Lease has not
been terminated, Lessor shall return possession of the Project to Lessee when the event of
default is cured; and provided further that Lessee shall continue to be responsible for the
Rental Payments due during the Fiscal Year then in effect; or
(b) With or without terminating this Lease, re-enter and take possession of the
Project, and sell its interest in, lease or sublease the Project or any part of it, holding
Lessee liable for the difference between (a) the sales price, rent and other amounts paid
by the purchaser, lessee or sublessee pursuant to such sales agreement, lease or sublease
(b) the balance of the Rental Payments and other amounts owed by Lessee during its the
current fiscal year, provided, however, that nothing contained herein shall impose an
obligation upon Lessor so to sell its interest in, lease or sublease the Project; or
(c) With or without terminating this Lease, declare all Rental Payments due or
to become due during the Fiscal Year of Lessee in effect when the default occurs to be
immediately due and payable by Lessee, whereupon such Rental Payments shall be
immediately due and payable; or
(d) Take whatever action at law or in equity may appear necessary or
desirable to collect the Rental Payments then due and thereafter to become due during the
then current Fiscal Year of Lessee with respect to the Project, or enforce performance and
observance of any obligation, agreement or covenant of Lessee under this Lease.
Section 12.3. Return of Project. Upon the expiration or termination of this Lease prior
to the payment of all Rental Payments in accordance with Exhibit B, Lessee shall deliver
possession of the Project to Lessor in the condition, repair, appearance and working order
required in Section 7.1.
Section 12.4. Delay; 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
22
this Lease it shall not be necessary to give any notice, other than such notice as may be required
in this Lease.
Section 12.5. No Remedy Exclusive. No remedy herein conferred upon or reserved to
Lessor 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. Agreement to Pay Attorneys’ Fees and Expenses. In the event either party
to this Lease should default under any of the provisions hereof and the non defaulting 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 therefore pay to the non-
defaulting party the reasonable fee of such attorneys and such other expenses so incurred by the
nondefaulting party.
Section 12.7. No Additional Waiver Implied By One Waiver. 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.
23
ARTICLE XIII
TITLE
Section 13.1. Title to Project. During the Term of this Lease, legal title to the Project
and any and all repairs, replacements, substitutions and modifications thereto shall be in Lessor,
subject to Lessee’s interests under this Lease. Upon termination of this Lease for either of the
reasons specified in Section 4.2, Clauses (b) and (d), Lessor shall transfer legal title to the Project
to Lessee and Lessor shall have no further interest therein. In either of such events, Lessor shall
execute and deliver to Lessee such documents as Lessee may request to evidence such transfer of
legal title to the Project to Lessee. Upon termination of this Lease for either of the reasons
specified in Section 4.2, Clauses (a) and (c), Lessee shall surrender possession of the Project to
Lessor and shall have no further interest therein. In either of such events Lessee shall execute
and deliver to Lessor such documents as Lessor may request to evidence the termination of
Lessee’s interest in the Project.
Section 13.2. Security Interest. Lessor shall have and retain a security interest under the
Uniform Commercial Code in any portion of the Project constituting personal property or
fixtures, the proceeds thereof and all repairs, replacements, substitutions and modifications
thereto or thereof made pursuant to Section 7.1, in order to secure Lessee’s payment of all Rental
Payments due during the Term of this Lease and the performance of all other obligations herein
to be performed by Lessee. Lessee will join with Lessor in executing such financing statements
or other documents and will perform such acts as Lessor may request to establish and maintain a
valid security interest in such personal property or fixtures. If requested by Lessor, Lessee shall
conspicuously mark such personal property or fixtures with appropriate lettering, labels or tags,
and maintain such markings during the Term of this Lease, so as clearly to disclose Lessor’s
security interest in such personal property or fixtures.
24
ARTICLE XIV
ISSUANCE OF THE BONDS
Section 14.1. Agreement to Issue Bonds; Application of Bond Proceeds. In order to
provide funds for payment of the costs of refunding the Series 2007 Bonds, the Lessor has, or
will have, upon or promptly after the execution of this Lease, issued and delivered to the initial
purchaser thereof the Bonds, and the Lessor has or will have deposited proceeds of the Bonds as
described in Section 4.01 of the Indenture.
25
ARTICLE XV
ADMINISTRATIVE PROVISIONS
Section 15.1. Notices. All notices, certificates or other communications hereunder shall
be sufficiently given and shall be deemed given on the earlier of (i) delivery or (ii) three days
following deposit in the United States mail in certified or registered form with postage fully
prepaid to the addresses shown in the first paragraph hereof. Lessor and Lessee, by notice given
hereunder, may designate different addresses to which subsequent notices, certificates or other
communications will be sent.
Section 15.2. Binding Effect. This Lease shall inure to the benefit of and shall be
binding upon Lessor and Lessee and their respective successors and assigns.
Section 15.3. Severability. In the event any provision of this Lease shall be held invalid
or unenforceable by any court of competent jurisdiction, such holding shall not invalidate or
render unenforceable any other provision hereof.
Section 15.4. Amendments, Charges and Modifications. This Lease may be amended or
any of its terms modified only by written amendment authorized and executed by Lessee and
Lessor.
Section 15.5. Further Assurances and Corrective Instruments. Lessor and Lessee agree
that they will, if necessary, execute, acknowledge and deliver, or cause to be executed,
acknowledged and delivered, such supplements hereto and such further instruments as may
reasonably be required for correcting any inadequate or incorrect description of the Project
hereby leased or intended so to be or for carrying out the expressed intention of this Lease.
Section 15.6. 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 15.7. Applicable Law. This Lease shall be governed by and construed in
accordance with the laws of the State.
Section 15.8. Lessor and Lessee Representatives. Whenever under the provisions of this
Lease the approval of Lessor or Lessee is required, or Lessor or Lessee is required to take some
action at the request of the other, such approval of such request shall be given for Lessor by a
Lessor Representative and for Lessee by a Lessee Representative, and any party hereto shall be
authorized to rely upon any such approval or request.
Section 15.9. 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.
S-1
IN WITNESS WHEREOF, Lessor has caused this Lease to be executed in its corporate
name by its duly authorized officers, and Lessee has caused this Lease to be executed in its name
by its duly authorized officers, as of the date first above written.
Lessor:
HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF LAKEVILLE
By
Chair
Attest
Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this ______ day of
_____________, 2017, by Bart Davis and Justin Miller, the Chair and Executive Director,
respectively, of the Housing and Redevelopment Authority of the City of Lakeville, Minnesota,
on behalf of such Authority.
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
Notary Public
(SEAL)
[Signature Page – Lease-Purchase Agreement]
S-2
Lessee:
CITY OF LAKEVILLE, MINNESOTA
By
Mayor
And
City Clerk
STATE OF MINNESOTA )
) ss.
COUNTY OF DAKOTA )
The foregoing instrument was acknowledged before me this ____ day of __________,
2016, by Douglas P. Anderson and Charlene Friedges, the Mayor and City Clerk, respectively, of
the City of Lakeville, Minnesota, on behalf of the City.
IN WITNESS WHEREOF I have hereunto set my hand and official seal.
Notary Public
(SEAL)
[Signature Page – Lease-Purchase Agreement]
A-1
EXHIBIT A
DESCRIPTION OF LAND
B-1
EXHIBIT B
RENTAL PAYMENT SCHEDULE
PAYMENT
DATE*
PRINCIPAL
PORTION
INTEREST
PORTION
TOTAL
RENTAL
PAYMENT
DUE
DEBT
SERVICE
RESERVE
FUND**
NET DEBT
SERVICE
* Payment due prior to this date as provided in Section 5.1 of the Lease.
** [Funds available in the Debt Service Reserve Fund may be used to pay principal and interest due. See
Section 5.02 of the Indenture. In the event such funds are not available, Rental Payments shall be paid from other
available funds pursuant to Article V of the Lease.]
4837-0101-6399\1
DRAFT 9/15/17
===============================================================
TRUST INDENTURE
between
HOUSING AND REDEVELOPMENT AUTHORITY
OF THE CITY OF LAKEVILLE, MINNESOTA
and
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
Dated as of November 1, 2017
===============================================================
Relating to:
LEASE REVENUE LIQUOR ENTERPRISE REFUNDING BONDS, SERIES 2017A
This instrument drafted by:
Dorsey & Whitney LLP (NC)
50 South Sixth Street
Minneapolis, Minnesota 55402
i
4837-0101-6399\1
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS AND INTERPRETATION ............................................................... 4
Section 1.01. Definitions.................................................................................................4
Section 1.02. Additional Provisions as to Interpretation ................................................6
ARTICLE II FORM, EXECUTION AND REGISTRATION OF BONDS .................................. 8
Section 2.01. Form of Series 2017A Bonds ....................................................................8
Section 2.02. Maturities, Numeration and Interest Payment Dates ................................8
Section 2.03. Execution of Bonds ...................................................................................9
Section 2.04. Authentication of Bonds ...........................................................................9
Section 2.05. Registration, Transfer and Exchange ........................................................9
Section 2.06. Payment of Interest on Series 2017A Bonds; Interest Rights Preserved 10
Section 2.07. Ownership of Bonds ...............................................................................11
Section 2.08. Reissuance of Mutilated, Destroyed, Stolen or Lost Bonds ...................11
Section 2.09. Conditions for Authentication of Series 2017A Bonds ..........................12
Section 2.10. Authorization of Additional Bonds .........................................................12
Section 2.11. Book-Entry Only System ........................................................................13
Section 2.12. Substitute Securities Depository; Termination of Book-Entry Only
System 14
ARTICLE III REDEMPTION OF BONDS ................................................................................. 16
Section 3.01. Redemption of Series 2017A Bonds .......................................................16
Section 3.02. Notice of Redemption .............................................................................16
Section 3.03. Deposit for Redemption ..........................................................................16
Section 3.04. Payment of Redeemed Bonds .................................................................17
Section 3.05. Cancellation of Redeemed Bonds ...........................................................17
Section 3.06. Partial Redemption of Bonds ..................................................................17
ARTICLE IV USE OF BOND PROCEEDS ................................................................................ 19
Section 4.01. Deposit of Series 2017A Bond Proceeds ................................................19
ARTICLE V DISPOSITION OF PLEDGED REVENUES ......................................................... 20
Section 5.01. Bond Fund ...............................................................................................20
Section 5.02. Reserve Fund ..........................................................................................20
Section 5.03. Investment of Funds in Reserve Fund and Bond Fund ...........................21
ARTICLE VI PARTICULAR COVENANTS OF THE AUTHORITY ...................................... 23
Section 6.01. Payment of Bonds ...................................................................................23
ii
4837-0101-6399\1
Section 6.02. Extensions of Payments of Bonds...........................................................23
Section 6.03. Authorization ..........................................................................................23
Section 6.04. Concerning the Lease ..............................................................................24
Section 6.05. To Observe All Covenants and Terms − Limitations on Authority’s
Obligations 24
Section 6.06. Liens ........................................................................................................24
Section 6.07. Rental Payments......................................................................................24
ARTICLE VII EVENTS OF DEFAULT; REMEDIES ............................................................... 25
Section 7.01. Events of Default ....................................................................................25
Section 7.02. Enforcement of Covenants and Conditions ............................................25
Section 7.03. Application of Moneys ...........................................................................26
Section 7.04. Right of Trustee to Act Without Possession of Bonds ...........................27
Section 7.05. Power of Majority of Bondholders .........................................................28
Section 7.06. Limitation on Suits by Bondholders .......................................................28
Section 7.07. Waiver by Bondholders ..........................................................................28
Section 7.08. Remedies Cumulative, Delay Not To Constitute Waiver .......................29
Section 7.09. Restoration of Rights Upon Discontinuance of Proceedings ..................29
ARTICLE VIII CONCERNING THE TRUSTEE ....................................................................... 30
Section 8.01. Acceptance of Trust and Prudent Performance Thereof .........................30
Section 8.02. Trustee May Rely Upon Certain Documents and Opinions ...................31
Section 8.03. Trustee Not Responsible for Indenture Statements, Validity .................32
Section 8.04. Limits on Duties and Liabilities of Trustee ............................................32
Section 8.05. Money Held in Trust ...............................................................................32
Section 8.06. Obligation of Trustee ..............................................................................32
Section 8.07. Notice to Bondholders ............................................................................33
Section 8.08. Intervention in Judicial Proceedings .......................................................33
Section 8.09. Further Investigation by Trustee .............................................................33
Section 8.10. Trustee to Retain Financial Records .......................................................33
Section 8.11. Compensation of Trustee ........................................................................34
Section 8.12. Trustee May Hold Bonds ........................................................................34
Section 8.13. Appointment of Trustee ..........................................................................34
Section 8.14. Merger of Trustee ...................................................................................34
Section 8.15. Resignation or Removal of Trustee ........................................................34
Section 8.16. Appointment of Successor Trustee .........................................................35
Section 8.17. Transfer of Rights and Property to Successor Trustee............................35
Section 8.18. Appointment of Successor or Alternate Paying Agents .........................36
Section 8.19. Indemnification .......................................................................................36
Section 8.20. Notice of Default.....................................................................................36
Section 8.21. Agents .....................................................................................................37
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ARTICLE IX CONCERNING THE BONDHOLDERS .............................................................. 38
Section 9.01. Execution of Instruments by Bondholders ..............................................38
Section 9.02. Waiver of Notice .....................................................................................38
Section 9.03. Determination of Bondholder Concurrence ............................................38
Section 9.04. Bondholders’ Meeting ............................................................................39
Section 9.05. Revocation by Bondholders ....................................................................40
ARTICLE X PAYMENT, DEFEASANCE AND RELEASE ..................................................... 42
Section 10.01. Payment and Discharge of Indenture ......................................................42
Section 10.02. Bonds Deemed Not Outstanding After Deposits ....................................43
Section 10.03. Unclaimed Money to be Returned ..........................................................43
ARTICLE XI SUPPLEMENTAL INDENTURES ...................................................................... 45
Section 11.01. Purposes for Which Supplemental Indentures May be Executed ...........45
Section 11.02. Execution of Supplemental Indenture .....................................................46
Section 11.03. Discretion of Trustee...............................................................................46
Section 11.04. Modification of Indenture with Consent of Bondholders .......................46
Section 11.05. Supplemental Indentures to be Part of Indenture ....................................47
Section 11.06. Rights of City Unaffected .......................................................................47
Section 11.07. Rights of Authority .................................................................................47
Section 11.08. Notice to Rating Agencies ......................................................................47
ARTICLE XII AMENDMENTS TO THE LEASE ..................................................................... 48
Section 12.01. Amendments to the Lease Not Requiring Consent of Bondholders .......48
Section 12.02. Amendments to Lease Requiring Consent of Bondholders ....................48
Section 12.03. Rights of Authority .................................................................................48
Section 12.04. Notice to Rating Agencies ......................................................................48
ARTICLE XIII RESERVED ........................................................................................................ 49
ARTICLE XIV MISCELLANEOUS ........................................................................................... 50
Section 14.01. Rights in Authority are Held Solely for Benefit of Bondholders ...........50
Section 14.02. Covenants of Authority Bind Successors and Assigns ...........................50
Section 14.03. Immunity of Officers ..............................................................................50
Section 14.04. No Benefits to Outside Parties ................................................................50
Section 14.05. Separability of Indenture Provisions .......................................................50
Section 14.06. Execution of Indenture in Counterparts ..................................................50
Section 14.07. Headings Not Controlling .......................................................................51
Section 14.08. Notices etc., to Trustee, Authority and City ...........................................51
4837-0101-6399\1
TRUST INDENTURE
This TRUST INDENTURE (the Indenture) is executed as of November 1, 2017, between
the HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF LAKEVILLE,
MINNESOTA, a public body corporate and politic of the State of Minnesota (the Authority) and
U.S. BANK NATIONAL ASSOCIATION, a national banking association, having an office in
the City of St. Paul, Minnesota (the Trustee).
RECITALS
WHEREAS, the City of Lakeville, Minnesota (the City) has heretofore issued its Liquor
Revenue Bonds, Series 2007, dated May 1, 2007, in the aggregate original principal amount of
$3,955,000 (the Series 2007 Bonds), to acquire certain real property (as further described herein,
the Land) and construct, furnish and equip a new liquor store thereon (as further described
herein, the Improvements);
WHEREAS, as authorized by Minnesota Statutes, Section 469.034, the Authority has
agreed to issue its revenue bonds to refund the Series 2007 Bonds and refinance the Land and
Improvements;
WHEREAS, the Authority will take title to the Land and Improvements upon defeasance
of the Series 2007 Bonds and then lease the same to the City pursuant to and in accordance with
a Lease-Purchase Agreement dated as of the date hereof (the Lease);
WHEREAS, the Authority has deemed it advisable to enter into this Indenture and has
duly authorized and directed the issuance of bonds in the aggregate principal amount of
$[__________] to be designated “Lease Revenue Liquor Enterprise Refunding Bonds, Series
2017A” (the Series 2017A Bonds), which shall be fully registered bonds as in this Indenture
hereinafter provided;
WHEREAS, the proceeds of the Bonds, together with any other required funds, will be
used for the specific authorized purpose of refunding the Series 2007 Bonds, as described herein,
funding required reserves, and defraying the costs of issuance of the Series 2017A Bonds; and
WHEREAS, the Lease requires the City to make rental payments thereunder in amounts
and at times sufficient to pay the principal of, premium, if any, on and interest on the Series
2017A Bonds when due;
WHEREAS, the execution and delivery of this Indenture and the Lease and the issuance
of the Series 2017A Bonds have been in all respects duly and validly authorized by the Board of
Commissioners of the Authority pursuant to a bond resolution adopted by the Board of
Commissioners of the Authority on [September 18, 2017] (the Bond Resolution);
WHEREAS, 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 2017A Bonds, do exist, have happened or have been performed in regular form, time
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and manner, and the execution and delivery of this Indenture have been in all respects duly
authorized; and
WHEREAS, the Trustee has accepted the trusts 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
performance 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 Owners or Holders thereof, and for other
good and valuable considerations, the receipt whereof is hereby acknowledged, has executed and
delivered this Indenture and has granted, bargained, sold, assigned, transferred, conveyed,
warranted, pledged and set over, and by these presents does hereby grant, bargain, sell, assign,
transfer, convey, warrant, pledge and set over, absolutely unto the Trustee, and to its successor or
successors in the trust hereby created and to its or their assigns forever (collectively, the Trust
Estate):
I.
All of the right, title and interest of the Authority in the Lease (except for the Authority’s
rights to indemnification and reimbursement of expenses), including, without limitation, the
Project subject thereto, the Rental Payments and other amounts due thereunder, and the right to
exercise all rights of the Authority pursuant thereto.
II.
A first lien on and pledge of (i) the money and investments in the Bond Fund covenanted
to be created and maintained under this Indenture, and (ii) the money and investments in the
Reserve Fund established under this Indenture.
III.
Any and all other property 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 on behalf 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 to the terms hereof.
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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 forth, for the equal
and proportionate benefit, security and protection of all Holders of the Bonds issued or to be
issued under 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, its successors or assigns, shall well and
truly pay or 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 this Indenture to be kept, performed and observed by it and shall pay to
the Trustee all sums of money due or to become due to it in accordance with the terms and
provisions hereof; then upon such final payment this Indenture and the rights hereby granted
shall cease, determine and be void; otherwise, 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 has agreed and covenanted and does hereby agree and
covenant with the Trustee and with the respective Holders from time to time, of the said Bonds,
as follows:
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ARTICLE I
DEFINITIONS AND INTERPRETATION
Section 1.01. Definitions. Unless the context otherwise requires, the terms defined in
this Article 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:
Additional Bonds means any additional Bonds issued pursuant to the terms and
conditions of Section 2.10 of this Indenture.
Authority Representative means the Chair or Executive Director of the Authority or any
other person authorized to act on behalf of Authority under or with respect to this Indenture, as
evidenced by a certificate conferring such authority executed by the Chair, given to the Trustee
and the City.
Bond Counsel means Dorsey & Whitney LLP or any other nationally recognized
municipal bond counsel acceptable to the Authority and the City.
Bond Fund means the Bond Fund created under Section 5.01 of this Indenture.
Bond Year means the period beginning November [__], 2017 and ending at the close of
business on February 1, 2018, and each subsequent one-year period commencing at the close of
business on February 1 of each year.
Bonds means the Series 2017A Bonds and any Additional Bonds.
Business Day means any day other than a Saturday, Sunday, or other day on which
commercial banks in the city in which the principal corporate trust office of the Trustee is
located are not open for business.
Call Date means February 1, 2025.
Certificate means a certification in writing required or permitted by the provisions of the
Lease or this Indenture, signed and delivered to the Trustee or other proper person or persons.
City Representative means the City Administrator or City Finance Director, or any person
authorized by law to act on behalf of the City under or with respect to the Lease, as evidenced by
a certificate conferring such authority executed by the City Administrator, given to the Trustee
and the Authority.
Code means the Internal Revenue Code of 1986, as now or hereafter amended, and the
regulation and revenue rulings and procedures issued pursuant thereto from time to time.
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Debt Service Reserve Requirement means, for the Series 2017A Bonds, an amount equal
to the lesser of (i) 10% of the proceeds of the Series 2017A Bonds, (ii) the maximum amount of
principal and interest to come due on the Series 2017A Bonds in any future fiscal year, or (iii)
125% of the average annual debt service on the Series 2017A Bonds; and upon the issuance of
Additional Bonds, an amount equal to the lesser of (i) 10% of the proceeds of each series of
Outstanding Bonds issued pursuant to this Indenture, including the Additional Bonds, (ii) the
maximum amount of principal and interest to come due in any future fiscal year, during the term
of all then Outstanding Bonds, on all of the then Outstanding Bonds and on the Additional Bonds
to be issued, or (iii) 125% of the average annual debt service, during the term of all then
Outstanding Bonds, on all of the then Outstanding Bonds and on the Additional Bonds to be
issued.
Default means default by the Authority in the performance or observance of any of the
covenants, agreements or conditions on its part contained in this Indenture, exclusive of any
notice or period of grace required to constitute a default an “Event of Default” as described in
Section 7.01 hereof.
Event of Default means an Event of Default described in Section 7.01 hereof which has
not been cured.
Fiscal Year means each twelve month fiscal period of the Authority commencing on
January 1 of any year and ending on the following December 31.
Holder, Bondholder or Owner means the person or persons in whose name any Bond
shall be registered in the registration books maintained by the Trustee on behalf of the Authority.
Improvements has the meaning assigned in the Lease.
Independent Counsel means an attorney or firm of attorneys duly admitted to practice law
before the highest court of any state who is not an officer or full-time employee of the Authority
or the City.
Interest Payment Date means the stated maturity of an installment of interest on any of
the Bonds.
Land has the meaning assigned in the Lease.
Opinion of Counsel means a written opinion of counsel (who need not be Independent
Counsel unless so specified) appointed by the City or Authority or appointed by the Trustee.
Outstanding means, when used as of any particular time with reference to Bonds (subject
to the provisions of Section 9.03 pertaining to Bonds held by the Authority and the City), all
Bonds theretofore authenticated and delivered by the Trustee under this Indenture except: (i)
Bonds theretofore canceled by the Trustee or surrendered to the Trustee for cancellation; (ii)
Bonds for the payment or redemption of which funds or direct obligations of or obligations fully
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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 redemption shall have been given pursuant to Article 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 2.08 hereof pertaining to replacement of Bonds.
Predecessor Bonds means every previous Bond evidencing all or a portion of the same
debt as that evidenced by a particular Bond, including Bonds exchanged pursuant to Section 2.05
hereof, and for purposes of this definition, any Bond authenticated and delivered under
Section 2.08 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.
Principal Payment Date means the stated maturity of principal of any Bond.
Purchase Price means the amount necessary to defease to the earliest permissible
redemption date the remaining Outstanding principal amount of Bonds, together with an amount
equal to the Authority’s and Trustee’s fees and expenses in connection with such defeasance and
redemption.
Qualified Investments means any investments permitted pursuant to Minnesota Statutes,
Sections 118A.04 and 118A.05, for the investment of public funds.
Redeem or Redemption includes and means “prepay” or “prepayment,” as the case may
be.
Refunded Bonds Paying Agent means U.S. Bank National Association, as trustee for the
Series 2007 Bonds.
Rental Payment has the meaning assigned in the Lease.
Reserve Fund means the Reserve Fund created under Section 5.02 of this Indenture.
Responsible Officer means, when used with respect to the Trustee, any officer within the
corporate trust department of the Trustee, including any vice president, assistant vice president,
assistant secretary, assistant treasurer, trust officer or any other officer of the trustee who
customarily performs functions similar to those performed by the persons who at the time shall
be such officers, respectively, or to whom any corporate trust matter is referred because of such
person's knowledge of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Indenture.
Section 1.02. Additional Provisions as to Interpretation. All references herein to
“Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or
subdivisions of this Indenture; and the words “herein,” “hereof,” “hereunder” and other words of
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similar import refer to this Indenture as a whole and not to any particular Article, Section or
subdivision hereof.
Any terms defined in the Lease, but not defined herein, shall have the same meaning
herein unless the context hereof clearly requires otherwise.
This Indenture is governed by and shall be construed in accordance with the laws of the
State of Minnesota.
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ARTICLE II
FORM, EXECUTION AND REGISTRATION OF BONDS
Section 2.01. Form of Series 2017A Bonds. The Series 2017A Bonds to be issued and
secured under this Indenture shall each be designated “Lease Revenue Liquor Enterprise
Refunding Bonds, Series 2017A.” The Series 2017A Bonds, forms of assignment and
certificates of Trustee shall be substantially in the form attached as Exhibit A hereto.
Section 2.02. Maturities, Numeration and Interest Payment Dates. The Series 2017A
Bonds shall be in the denomination of $5,000 or any integral multiple thereof, initially numbered
R-1 upwards in order of issuance or in such other manner as the Trustee may determine, and
shall bear a date of original issue of November [__], 2017. No Series 2017A Bond shall
represent principal payable or maturing in different years. The Series 2017A Bonds shall bear
interest payable semiannually on February 1 and August 1 of each year, commencing [February
1, 2018], from their date of original issue or the most recent Interest Payment Date to which
interest has been paid or duly provided for. The principal and redemption price of the Series
2017A Bonds shall be payable to the Owner upon presentation and surrender at the principal
office of the Trustee in such coin or currency 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 Series 2017A Bonds shall be paid by check or draft mailed to the Owner at the
Owner’s registered address; provided that, so long as the Bonds are registered in the name of
Cede & Co., as nominee of The Depository Trust Company, or in the name of any other nominee
of The Depository Trust Company or other securities depository, the Trustee shall pay all
principal of and interest on the Bonds, and shall give all notices with respect to the Bonds, only
to Cede & Co. or other nominee in accordance with the operational arrangements of The
Depository Trust Company or such other securities depository.
The Regular Record Date referred to in Section 2.06 for the payment of interest on the
Series 2017A Bonds payable, and punctually paid or duly provided for, on any Interest Payment
Date shall be the l5th day (whether or not a Business Day) of the calendar month next preceding
such Interest Payment Date.
The Series 2017A Bonds shall be in the aggregate principal amount of $[__________],
and shall mature on February 1 in the years and amounts and shall bear interest at the rates per
annum, according to years of maturity, as follows:
Year Amount Rate Year Amount Rate
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Section 2.03. Execution of Bonds. The Bonds shall be signed in the name of the
Authority by the manual or facsimile signatures of the Chair and Executive Director of the
Authority and said signatures shall be authenticated by the Trustee, which is hereby designated
as authenticating agent. The seal of the Authority, if any, need not be affixed to or imprinted on
the Bonds. In the event that any of the officers who shall have signed any of the Bonds shall
cease to be officers of the Authority before the Bonds shall have been authenticated or delivered
by the Trustee, or issued by the Authority, such Bonds may, nevertheless, be authenticated,
delivered, and issued, and upon such authentication, delivery and issue, shall 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 Series
2017A Bonds to the Trustee for authentication.
Section 2.04. Authentication of Bonds. No Bond shall be valid or obligatory for any
purpose or shall be entitled to any right or benefit hereunder or under the Lease, unless an
authorized signatory of the Trustee shall manually endorse and execute on such Bond a
certificate of authentication substantially in the form of the Trustee’s certificate set forth in the
recitals hereof. Such Trustee’s certificate upon any Bond executed on behalf of the Authority
shall be conclusive evidence that the Bond so authenticated has been duly issued under this
Indenture and that the Holder thereof is entitled to the benefits of this Indenture and the Lease.
No Bonds shall be authenticated by the Trustee except in accordance with this Article.
The Trustee shall not be required to authenticate any Bond or Bonds unless provided with
the documents referred to in Section 2.09 hereof.
Section 2.05. Registration, Transfer 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, records for the payment of the principal of and interest on such Bonds,
as in this Indenture provided, and for the registration and transfer of such Bonds, and shall also
keep at said office of the Trustee books for such registration and transfer. The Authority does
hereby appoint the Trustee, and its successors in the trust from time to time, as its agent to
maintain said office and agency at the office of the Trustee.
Upon surrender for transfer of any fully registered Bond at the office of the Trustee with
a written instrument of transfer satisfactory to the Trustee, duly executed by the Owner or the
Owner’s duly authorized attorney, and upon payment of any tax, fee or other governmental
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
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or more fully registered 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, fully registered
Bonds, upon surrender thereof at the office of the Trustee, may, at the option of the Owner
thereof, be exchanged for an equal aggregate principal amount of fully registered Bonds of the
same series, maturity and interest rate of any authorized denominations.
In all cases in which the privilege of exchanging Bonds or transferring fully registered
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 Trustee may make a charge sufficient to reimburse
it for any tax, fee or other governmental 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 incurred 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 Trustee shall not be obligated to make
any such exchange or transfer of Bonds during the 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 Trustee shall not be required to make any
transfer or exchange of any Bonds called for redemption. Transfers are subject to DTC
requirements while the Bonds are held in book-entry form. Neither the Trustee nor any agent
shall have any responsibility or liability for any actions taken or not taken by DTC.
Section 2.06. Payment of Interest on Series 2017A Bonds; Interest Rights Preserved.
Interest on any Bond 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 any Bond 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 Holder on the relevant Regular Record Date solely by virtue of such Holder
having been such Holder; and such Defaulted Interest may be paid by the Authority as provided
in Subsection A or B below:
A. The Authority may elect to make payment of any Defaulted Interest on the
fully registered Bonds of any series to the persons in whose names such Bonds (or 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 shall notify the Trustee in writing of the amount of Defaulted
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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 time the Authority 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 arrangements satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in trust for the benefit of
the persons entitled to such Defaulted Interest as in this Subsection provided and not to
be deemed part of the Trust Estate. Thereupon the Trustee shall fix a Special Record
Date for the payment of such 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 Trustee shall promptly
notify 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 Holder of a fully registered Bond of such series at his address as it appears in the
registration books not less than 10 days prior to 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 Authority may make payment of any Defaulted Interest on the Bonds
of any series in any other lawful manner, if, after notice given by the Authority to the
Trustee of the proposed payment pursuant to this Subsection, such payment shall be
deemed practicable by the Trustee.
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 carry all 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 2.07. Ownership of Bonds. The Authority and the Trustee and their respective
successors, each in its discretion, may deem and treat the person in whose name any Bond shall
for the time being be registered as the absolute owner thereof for all purposes, and neither the
Authority nor the Trustee nor their respective successors shall be affected by any notice to the
contrary. Payment of or on account of the principal of and interest on any such Bond shall be
made only to or upon the order of the 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 2.08. Reissuance of Mutilated, Destroyed, Stolen or Lost Bonds. In case any
outstanding Bond shall become mutilated or be destroyed, stolen or lost, the Trustee shall
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authenticate and deliver a new Bond of like tenor, number and amount as the Bond so mutilated,
destroyed, stolen or lost, in exchange and substitution for such mutilated Bond, upon surrender
of 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 proof of ownership thereof, and upon furnishing the Authority,
the Trustee and the City with indemnity satisfactory to them and complying with such other
reasonable regulations as the Trustee may prescribe and paying such reasonable expenses as the
Authority, the Trustee and the City may incur in connection therewith. In the event any such
Bond shall have matured, instead of issuing a new Bond, the Authority may pay the same
without surrender thereof.
Section 2.09. Conditions for Authentication of Series 2017A Bonds. The Trustee shall
not authenticate and deliver the Series 2017A Bonds to be issued and delivered pursuant to the
Indenture unless theretofore or simultaneously therewith there shall have been delivered to the
Trustee the following:
(a) a certified copy of the Bond Resolution authorizing the issuance of the Series
2017A Bonds and the execution and delivery of the Lease and this Indenture;
(b) a certified copy of the resolution adopted by the City Council of the City
approving the issuance of the Series 2017A Bonds and the terms of the Indenture and authorizing
the execution and delivery of the Lease by the City;
(c) executed counterparts of the Lease and this Indenture;
(d) the manually signed approving opinion of Dorsey & Whitney LLP, Minneapolis,
Minnesota, as Bond Counsel for the Authority, concerning the validity and legality of the Series
2017A Bonds and exemption of interest thereon from federal income taxation under the Code;
and
(e) such further certifications, documents and Opinions of Counsel as Bond Counsel
may require.
Section 2.10. Authorization of Additional Bonds. In addition to the Series 2017A
Bonds above described, the Authority may in its discretion, upon request of the City, issue
Additional Bonds to provide funds for additions to or further improvements of the
Improvements. Any such Additional Bonds shall be authorized by resolution of the Authority
and described in a supplemental indenture executed by the Authority and the Trustee and which,
when so issued, authorized and described, shall be secured by this Indenture and the Trust Estate
on a parity with the Bonds then Outstanding under this Indenture; provided, that no such
Additional Bonds shall be issued under the Indenture or secured by the Trust Estate on a parity
with the Outstanding Series 2017A Bonds unless the following conditions are met:
(a) There shall have been furnished to the Trustee a Certificate of an Authority
Representative and a Certificate of a City Representative to the effect that the Lease is in effect
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and no “event of default” (as such term is defined in the Lease) exists thereunder which shall not
be cured upon the issuance of the Additional Bonds; and
(b) There shall have been furnished to the Trustee an Opinion of Counsel to the effect
that the issuance of the Additional Bonds will not adversely affect the exemption from federal
income taxation of the interest on any Outstanding Bonds; and
(c) There shall have been furnished to the Trustee a supplement to the Lease
providing for additional Rental Payments sufficient to pay the principal of and interest on the
Additional Bonds when due; and
(d) The balance in the Reserve Fund shall be increased or otherwise modified to the
Debt Service Reserve Requirement described in Section 5.02 hereof; and
(e) There shall have been furnished to the Trustee a Certificate of an Authority
Representative to the effect that the proceeds of the Additional Bonds, together with any
additional funds supplied or to be supplied by the Authority or City will be sufficient to complete
the cost of the improvement to the Improvements.
The Trustee shall not authenticate any such Additional Bonds until there is also delivered
to the Trustee a resolution of the Authority authorizing the Additional Bonds, executed
counterparts of amendments to the Lease providing for the additional Rental Payments, a
supplement to the Indenture describing the Additional Bonds and further documents of the kind
described in Section 2.09 to the extent applicable to the Additional Bonds. Additional Bonds
shall have Interest Payment Dates of February 1 and August 1 and Principal Payment Dates of
February 1.
Section 2.11. Book-Entry Only System. For purposes of this Section and Section 2.12,
the following terms shall have the following meanings:
“Beneficial Owner” shall mean, whenever used with respect to a Bond, the person in
whose name such Bond is recorded as the beneficial owner of such Bond by a Participant on the
records of such Participant, or such person’s subrogee.
“DTC” shall mean The Depository Trust Company of New York, New York.
“DTC Participant” shall mean any broker-dealer, bank or other financial institution for
which DTC holds Bonds as securities depository.
“Representation Letter” shall mean the Representation Letter pursuant to which the
Authority agrees to comply with DTC’s Operational Arrangements.
Upon the initial issuance of the Bonds, DTC will act as securities depository for the
Bonds. The Bonds shall be initially issued in the form of a single Bond for each stated maturity,
registered in the Bond Register in the name of Cede & Co., as the nominee of DTC.
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Until termination of the book-entry only system pursuant to Section 2.12 hereof, the
Bonds may only be registered in the name of Cede & Co.
With respect to the Bonds registered in the Bond Register in the name of Cede & Co., as
nominee of DTC, neither the Authority nor the Trustee shall have any responsibility or
obligation to any DTC Participant or to any Beneficial Owner. Without limiting the immediately
preceding sentence, neither the Authority nor the Trustee shall have any responsibility or
obligation with respect to (i) the accuracy of the records of DTC or any DTC Participant with
respect to any ownership interest in the Bonds, (ii) the delivery to any DTC Participant, any
Beneficial Owner or any other person, other than DTC, of any notice with respect to the Bonds,
including any notice of redemption, or (iii) the payment to any DTC Participant, any Beneficial
Owner or any other person, other than DTC, of any amount of principal of, premium, if any, or
interest with respect to the Bonds.
The Authority and the Trustee may treat as and deem DTC to be the absolute owner of
each Bond for the purpose of payment of the principal of, premium, if any, and interest with
respect to such Bond, for the purpose of giving notices of redemption and other matters with
respect to such Bond, for the purpose of registering transfers with respect to such Bond, and for
all other purposes whatsoever. The Trustee shall pay all principal of, premium, if any, and
interest with respect to the Bonds only to or upon the order of the Bondholders as shown on the
Bond Register, and all such payments shall be valid and effective to fully satisfy and discharge
the Authority’s and Trustee’s obligations with respect to the payment of the principal of,
premium, if any, and interest relating to the Bonds to the extent of the sum or sums so paid.
Upon delivery by DTC to the Trustee of written notice to the effect that DTC has
determined to substitute a new nominee in place of Cede & Co., and subject to the transfer
provisions in Section 2.05 hereof, references to “Cede & Co.” in this Section shall refer to such
new nominee of DTC.
Section 2.12. Substitute Securities Depository; Termination of Book-Entry Only
System. DTC may determine to discontinue providing its services with respect to the Bonds at
any time by giving written notice to the Authority and the Trustee and discharging its
responsibilities with respect thereto under applicable law. The Authority may terminate the
services of DTC with respect to the Bonds at any time if it determines that DTC is no longer able
to carry out its functions as securities depository or that continuation of the system of book-entry
transfers through DTC is not in the best interests of the Authority or the Beneficial Owners.
Upon the termination of the services of DTC, a substitute securities depository may be
appointed by the Authority. Any substitute securities depository appointed hereunder shall
undertake all the obligations and duties of DTC described in this Indenture. In any such case the
references herein to DTC shall be deemed to mean such substitute securities depository and any
references herein to Cede & Co., as nominee of DTC, shall be deemed to mean the nominee of
such substitute securities depository.
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Upon the termination of the services of DTC, and if no substitute securities depository
willing to undertake the functions of DTC hereunder can be found that, in the opinion of the
Authority, is able to undertake such functions upon reasonable and customary terms, or if the
Authority determines that it is in the best interests of the Authority or the Beneficial Owners of
the Bonds that the Beneficial Owners be able to obtain certificated Bonds, the Bonds shall no
longer be restricted to being registered in the Bond Register in the name of Cede & Co., as
nominee of DTC, but may be registered in whatever name or names the Bondholders shall
designate at that time, in accordance with this Article. To the extent that the Beneficial Owners
are designated as the transferee by DTC, the Bonds will be delivered to the Beneficial Owners.
Notwithstanding any other provision of this Indenture to the contrary, so long as any
Bond is registered in the name of Cede & Co., as nominee of DTC, all payments of the principal
of, premium, if any, and interest relating to such Bond, and all notices with respect to such Bond,
shall be made and given to DTC as provided in the Representation Letter.
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ARTICLE III
REDEMPTION OF BONDS
Section 3.01. Redemption of Series 2017A Bonds. The Series 2017A Bonds maturing
in 2026 and later years, upon prepayment of the corresponding principal portion of the Rental
Payments pursuant to Section 10.1 of the Lease, are subject to redemption at the option of the
Authority, in whole or in part in integral multiples of $5,000, and if in part, in such order of
maturity dates as the Authority may determine and by lot as to Series 2017A Bonds maturing on
the same date, on any date on or after February 1, 2025, at a redemption price equal to the
principal amount thereof plus accrued interest to the redemption date.
The Series 2017A Bonds are also subject to redemption prior to their stated maturities in
whole at any time, at a redemption price equal to the principal amount thereof, together with
interest accrued thereon to the date fixed for redemption, without premium, in the event the
Improvements are damaged, destroyed or condemned as described in Section 8.1 of the Lease, as
further described in Articles VIII and X of the Lease.
The Series 2017A Bonds with stated maturities in the year[s _____] are subject to
mandatory sinking fund redemption, at a redemption price equal to the principal amount thereof
to be redeemed plus accrued interest to the redemption date, on February 1 in the following years
and amounts:
Series 2017A Bonds Maturing in 20__
Year Amount
$
*
*Maturity
Section 3.02. Notice of Redemption. If the Bonds are to be redeemed pursuant to
Section 3.01 hereof, and written notice of an election to exercise an option to redeem Bonds
hereunder shall have been given to the Trustee at least 45 days prior by the Authority (other than
for the mandatory sinking fund redemption of Series 2017A Bonds maturing in the year[s ____],
for which no notice of election shall be required), the Trustee shall prepare a notice in the name
of the Authority or in its own name describing the Outstanding Bonds to be redeemed, the date
of redemption, and the redemption price. Such notice may be conditional. Notice of redemption
shall be mailed by the Trustee, not less than thirty (30) days nor more than ninety (90) days
before the redemption date, by first-class mail, to the Owners of all Bonds which are to be
redeemed, at their last addresses appearing upon the registry books of the Authority and shall be
published to the extent required by law.
Section 3.03. Deposit for Redemption. Prior to the designated redemption date the
Authority shall deposit or cause to be deposited with the Trustee funds sufficient to pay the
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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 interest pursuant to this Section, such moneys shall be set aside by the
Trustee and held by it for the account of the respective Holders of the Bonds being redeemed.
Section 3.04. Payment of Redeemed Bonds. After notice of redemption shall have been
given as provided in Section 3.02, 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 the Owner, upon the surrender of the Bonds. Any installment of interest
maturing on or prior to the redemption date shall be payable to the Owners of Bonds registered
as such on the relevant Record Dates according to the terms of such Bonds and the provisions of
Section 2.06 hereof and the notice of redemption herein provided for may so state. If redemption
moneys are available for the payment of all of the Bonds called for redemption on the
redemption date, the Bonds so called shall cease to draw interest after the redemption date, and
such Bonds shall not be deemed to be outstanding hereunder for any purpose, except that the
Holders 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 moneys set aside
by the Trustee as aforesaid.
Section 3.05. Cancellation of Redeemed Bonds. All Bonds so redeemed, shall forthwith
be canceled and destroyed by the Trustee in accordance with its corporate trust policies; and no
further Bonds shall be executed or authenticated or issued hereunder in exchange or substitution
therefor.
Section 3.06. Partial Redemption of Bonds. If less than all of the Bonds of a particular
maturity at the time outstanding are to be called for prior redemption, the particular Bonds or
portions thereof of such maturity to be redeemed shall be selected by lot, except as otherwise
provided herein. 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
moneys 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 bearing one of the numbers borne by such fully registered Bond. If
it is determined that one or more, but not all of the $5,000 units of principal amount represented
by any such fully registered Bond is to be called for redemption, then upon notice of intention to
redeem such $5,000 unit or units, the owner of such fully registered Bond which forthwith
surrender such Bond to the Trustee (1) for payment of the redemption price (including the
redemption premium, if any, and interest to 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 of the
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aggregate principal amount of the unredeemed balance of the principal amount of such fully
registered Bond, which shall be issued to the Owner thereof, without charge therefor. If the
owner of any such fully registered 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 accrue on the portion 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 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 Lease 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
$5,000 unit or units of principal amount, nor shall new Bonds be thereafter issued corresponding
to said unit or units.
So long as the Bonds are registered in the name of Cede & Co., as nominee of The
Depository Trust Company, or in the name of any other nominee of The Depository Trust
Company or other securities depository, the Bonds or portions thereof to be redeemed shall be
selected in accordance with the operational arrangements of The Depository Trust Company or
such other securities depository.
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ARTICLE IV
USE OF BOND PROCEEDS
Section 4.01. Deposit of Series 2017A Bond Proceeds. The Authority shall deposit, or
shall direct the purchaser or purchasers of the Series 2017A Bonds to deposit, with the Trustee
all of the net proceeds of the sale of the Series 2017A Bonds (including accrued interest thereon
from the date from which interest is to be paid thereon to the date of delivery to the purchaser or
purchasers thereof), and such net proceeds ($[____________]), together with $[________] from
the debt service fund for the Series 2007 Bonds and $[_______] from the reserve fund for the
Series 2007 Bonds, shall be applied by the Trustee as follows:
(a) Deposit to the credit of the Reserve Fund the amount of $[______];
(b) Pay the costs of issuance of the Series 2017A Bonds, as set forth in Exhibit B, in
the amount of $[_______]; and
(c) Deliver to the Refunded Bonds Paying Agent an amount equal to $[________] to
be applied to the refunding and defeasance of the Series 2007 Bonds.
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ARTICLE V
DISPOSITION OF PLEDGED REVENUES
Section 5.01. Bond Fund. The Authority hereby establishes and shall maintain, so long
as any of the Bonds are outstanding, with the Trustee a separate account to be designated “Lease
Revenue Liquor Enterprise Refunding Bonds Sinking Fund” (the Bond Fund) into which the
Authority and Trustee shall make the following deposits:
(a) All Rental Payments by the City pursuant to Section 5.1 of the Lease.
(b) All other moneys received by the Trustee from the City or Authority when
accompanied by directions of the City or Authority that such moneys are to be paid into the
Bond Fund or used for purposes for which moneys in the Bond Fund may be used. If the City or
Authority so directs, such monies shall be credited against Rental Payments due or to become
due.
(c) All other moneys required to be deposited in the Bond Fund pursuant to any
provision of this Indenture or the Lease.
The moneys and investments in the Bond Fund are irrevocably pledged to and shall be
used by the Trustee, from time to time, to the extent required, 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.
Section 5.02. Reserve Fund. The Authority hereby establishes and shall maintain, so
long as any of the Bonds are outstanding, with the Trustee a separate account to be designated
“Lease Revenue Liquor Enterprise Refunding Bonds Debt Service Reserve Fund” (the Reserve
Fund). Forthwith upon delivery of the Series 2017A Bonds, there shall be deposited in the
Reserve Fund, from the proceeds of the Series 2017A Bonds, the amount required by Section
4.01(b) to be deposited in the Reserve Fund, which amount is equal to the Debt Service Reserve
Requirement for the Series 2017A Bonds. Money on hand in the Reserve Fund shall be used
only to pay maturing principal and interest on the Bonds when money in the Bond Fund is
insufficient therefor; provided, that money on hand in the Reserve Fund may be applied by the
Authority, at the request of the City, to the payment or discharge of the Bonds at any time when
all Outstanding Bonds are to be discharged or paid in accordance with Article X hereof. In the
event that Additional Bonds are issued pursuant to Section 2.10 hereof, provision shall be made
to increase the Reserve Fund to the new Debt Service Reserve Requirement, on the date of
issuance of such Additional Bonds. If the balance on hand in the Reserve Fund is ever reduced
below the applicable Debt Service Reserve Requirement, such deficiency shall be restored out of
additional payments to be made by the City under Section 5.1 of the Lease; provided no such
restoration shall be required if the City has determined to terminate the Lease in accordance with
Section 6.1 of the Lease and has provided written notice of such intention to the Trustee.
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Section 5.03. Investment of Funds in Reserve Fund and Bond Fund. Any moneys held
as a part of the Reserve Fund or Bond Fund shall be invested or reinvested by the Trustee upon
the request and direction of a City Representative in any Qualified Investment; provided that,
unless an opinion of bond counsel is provided to the effect that acquisition of the Qualified
Investment will not cause a violation of the provisions of Section 148 of the Code and applicable
Regulations, no Qualified Investment shall be acquired for the Reserve Fund at a discount or
premium exceeding 2% times the stated redemption price at maturity of the Qualified Investment
to be acquired and, for purposes of Section 148 of the Code and this Indenture, the investments
in the Reserve Fund shall be valued at their outstanding principal amount as permitted by Section
1.148-5(d)(1)(i) of the regulations promulgated under the Code. Subject to the foregoing, the
type, amount and maturity of Qualified Investments shall conform to the instructions, if any, in
the written request of the City Representative; provided that (i) investments acquired with
moneys held in the Bond Fund shall mature no later than the Interest Payment Date upon which
such moneys will be needed to pay principal of, premium, if any, and interest on the Bonds and
(ii) no Qualified Investments acquired for the Reserve Fund shall have a maturity of longer than
five (5) years. Investments permitted under this Section may be purchased from the Trustee or
from any of its affiliates. Obligations so purchased shall be deemed at all times to be a part of
the Reserve Fund or Bond Fund, respectively, unless otherwise provided herein, 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 the Reserve Fund or Bond Fund. Any interest accruing on
and any profit realized from such investment shall be credited to the Reserve Fund or Bond
Fund, respectively; provided that, so long as the balance on hand in the Reserve Fund is not less
than the Debt Service Reserve Requirement, interest earnings and realized profits on investments
held in the Reserve Fund shall be transferred to the Bond Fund as of each January 25 and July 25
and credited against the Rental Payment otherwise due from the City on that date. The Trustee
shall redeem or sell, at the best price obtainable, any obligations so purchased, whenever it shall
be necessary to do so in order to provide moneys to meet any payment from the Bond Fund or
Reserve Fund. Neither the Trustee 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 part of the outstanding
Bonds shall be deemed “arbitrage bonds” under the Code and regulations thereunder; provided
that the Trustee has no duty to monitor yield on any directed investment or any obligation to
limit the yield on any investment the Authority directes the Trustee to make.
The Trustee shall have no liability whatsoever for any loss, fee, tax or other charge incurred in
connection with any investment, reinvestment, sale or liquidation of an investment hereunder. In
the absence of written direction delivered to the trustee from the Authority, the trustee shall hold
such funds uninvested. The trustee shall be entitled to rely on any written direction of the
Authority as to the suitability and legality of the directed investments. The Trustee shall have no
responsibility whatsoever to determine whether any investments made pursuant to this agreement
are or continue to be Qualified Investments. Any deposit or investment directed by the Authority
shall constitute a certification by the Authority to the Trustee that the assets so deposited or to be
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purchased pursuant to such directions are Qualified Investments. In no event shall the Trustee be
deemed an investment manager or adviser in respect of any selection of investments hereunder.
The Authority acknowledges that regulations of the Comptroller of the Currency grant the
Authority the right to receive brokerage confirmations of security transactions as they occur.
The Authority specifically waives such right to notification to the extent permitted by law and
acknowledges that they will receive periodic transaction statements that will detail all investment
transactions.
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ARTICLE VI
PARTICULAR COVENANTS OF THE AUTHORITY
The Authority covenants and agrees, so long as the Bonds shall be outstanding and
subject to the limitations on its obligations herein set forth, that:
Section 6.01. Payment 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 or cause to be paid, from Rental Payments by the City and other amounts received in respect
of the Lease or available under this Indenture, 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 the
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 Trustee 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;
provided, however, that the principal of and interest on any Bond is not and shall not be deemed
to represent a debt or pledge the faith or credit of the Authority, the City, the State of Minnesota
or any other political subdivision thereof or grant to the Holder of any Bond any right to have the
Authority, the City, the State of Minnesota or any other political subdivision thereof levy any
taxes or appropriate any funds to the payment of principal of or interest on the Bonds, such
payment to be made solely and only out of the moneys received pursuant to the Lease and the
funds and accounts established and maintained with the Trustee pursuant to the requirements of
this Indenture and appropriated to the payment of the Bonds by the Indenture.
Section 6.02. Extensions of Payments of Bonds. It 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 by the purchase or refunding of such Bonds or claims for interest or by any
other arrangement; and in case the maturity of any of the Bonds, or the time for payment of any
such claims for interest shall be extended, such Bonds or claims for interest shall not be entitled
in case of any default hereunder to the benefit of the Indenture or to any payment out of any
assets of the Authority or the funds (except funds held in the trust by the Trustee for the payment
of particular Bonds or claims for interest pursuant to this Indenture) held by the Trustee except
subject to the prior payment of the principal of all Bonds issued and outstanding hereunder, the
maturity of which Bonds or principal installments has not been extended, and of such portion of
the accrued interest on the Bonds as shall not be represented by such extended claims for
interest. Nothing in this Section shall, however, be deemed to limit the right of the Authority to
fund or refund at one time all of such Bonds and claims for interest.
Section 6.03. Authorization. The Authority has good and marketable legal title to the
Land and Improvements and is duly authorized under the Constitution and Laws of the State of
Minnesota to create and issue the Bonds, to undertake the acquisition, construction, furnishing
and financing of the Improvements, to execute this Indenture and assign and pledge to the
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Trustee the Trust Estate, including the Rental Payments, and to make the covenants as herein
provided. All necessary action and proceedings on its part 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.
Section 6.04. Concerning the Lease. It will 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, in the Trustee’s discretion, be deemed to be in the best interest of the
Authority or the Bondholders. 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. It will not issue or permit to be issued any Bonds hereunder in any manner other
than in accordance with the provisions of this Indenture and the agreements in that behalf herein
contained, and will not suffer or permit any Event of 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 from 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 moneys in the funds and accounts
provided for herein.
Section 6.06. Liens. The Authority agrees it will not mortgage, sell or otherwise
encumber its interests in the Land and Improvements during the term of the Lease, except
pursuant to the Lease or as otherwise permitted in the Lease or this Indenture.
Section 6.07. Rental Payments. The Rental Payments to be made by the City pursuant
to the Lease will produce the amounts needed to meet when due the principal and interest
payments on the Bonds.
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ARTICLE VII
EVENTS OF DEFAULT; REMEDIES
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, or premium, if any, on any of the Bonds, when the
same shall become due and payable, whether at maturity or by proceedings for redemption (by
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 an event of nonappropriation or an Event of Default shall occur and be
subsisting under Section 6.1 or Section 12.1 of the Lease, respectively; or
(d) If default shall be made in the performance or observance of any other of the
covenants, agreement or conditions on the part of the Authority in this Indenture, or in the Bonds
contained, and such default shall have continued for a period of thirty days after written notice
thereof given to the Authority by the Trustee.
Section 7.02. Enforcement of Covenants and Conditions. Upon the occurrence of an
Event of Default or breach of any of the covenants and conditions of this Indenture, or to protect
the Trust Estate, the Trustee, anything herein contained to the contrary notwithstanding and
without any request from any Bondholder (subject, however, to the provisions of Section 7.06
hereof), may take such action or actions for the enforcement of its rights and the rights of the
Bondholders and the rights of the Authority under the Lease as due diligence, prudence and care
would require and to pursue the same with like diligence, prudence and care.
Upon the occurrence of an Event of Default, the Trustee may, and shall upon the written
request of the Holders of not less than twenty-five per centum (25%) in aggregate principal
amount of Outstanding Bonds, by written notice to the Authority, declare the principal of the
Bonds to be immediately due and payable, whereupon that portion of the principal of the Bonds
thereby coming due and the interest thereon accrued to the date of payment shall, without further
action, become and be immediately due and payable, anything in this Indenture or in the Bonds
to the contrary notwithstanding.
Upon the happening and continuance of an Event of Default, the Trustee may, and shall
upon the written request of the Holders of not less than twenty-five per centum (25%) in
aggregate principal amount of outstanding Bonds, proceed forthwith 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
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Indenture and by the Bonds, to enforce rights of the Authority under the Lease, and to enforce
any such other appropriate legal or equitable remedy as the Trustee, being advised by counsel,
shall deem most effectual to protect and enforce any of its rights or any of the rights of the
Bondholders. Notwithstanding the foregoing, the Trustee need not proceed upon any such
written request of the Bondholders, as aforesaid, unless the Bondholders shall have offered to the
Trustee security and indemnity satisfactory to it against the costs, expenses and liabilities to be
incurred therein or thereby.
Upon the occurrence of an Event of Default, in addition to the acceleration of the Bonds,
the Trustee may, and shall upon the written request sent by registered or certified mail to the
Trustee by the Holders of not less than twenty-five per centum (25%) in aggregate principal
amount of outstanding Bonds:
(a) proceed to protect and enforce its rights by a suit or suits in equity or at law, either
for the specific performance of any covenant or agreement contained herein or in the Lease or
the Bonds, or in aid of the execution of any power herein or therein granted, or for the
foreclosure of this Indenture, by action or by advertisement, or for the enforcement of any other
appropriate legal or equitable remedy, and in the event of a foreclosure shall be entitled to the
immediate appointment of a receiver to operate and protect the Trust Estate and collect rents and
fees due from any lease, use or occupancy thereof during the pendency of the foreclosure;
(b) sell the Trust Estate at public auction without any prior hearing or notice thereof
and to convey the same to the purchaser, in fee simple, pursuant to the statutes of the State of
Minnesota in such case made and provided;
(c) exercise any remedies available to the Trustee under the Lease.
In the event of a sale under this Indenture, whether by virtue of judicial proceedings or
advertisement or otherwise, the Trust Estate may, at the option of the Trustee, be sold as one
parcel and as an entirety or in such parcels, manner and order as the Trustee in its sole discretion
may elect.
Section 7.03. Application of Moneys. Subject to the limitation contained in
Section 7.02 hereof, all moneys received by the Trustee pursuant to any right given or action
taken under the provisions of this Indenture or the Lease, shall, after payment of the cost and
expenses of the proceedings resulting in the collection of such moneys and of the expenses,
charges, liabilities and advances incurred or made by the Trustee, be deposited in the Bond Fund
and all moneys in the Bond Fund maintained with the Trustee shall be applied as follows:
(a) Unless the principal of all the Bonds shall have become due and payable, all such
moneys shall be applied:
First: To the payment to the Bondholders 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
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pay in full any particular installment, then to the payment ratably, according to the
amounts due on such installment, to the Bondholders entitled thereto, without any
discrimination or privilege; and
Second: To the payment to the Bondholders 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 moneys are 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 Bonds due on any particular date,
then to the payment ratably, according to the amount of principal due on such
date, to the Bondholders entitled thereto without any discrimination or privilege.
(b) If the principal of all the Bonds shall have become due, all such moneys 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 Bondholders entitled
thereto without any discrimination or privilege.
Whenever moneys are to be applied by the Trustee pursuant to the provisions of this
Section, such moneys shall be applied by it at such times, and from time to time, as the Trustee
shall determine, having due regard to the amount of such moneys available for application and
the likelihood of additional moneys becoming available for such application in the future.
Whenever the Trustee 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 moneys and of the fixing of any such date, and shall not be required to make
payment to the Holder of any Bond until such Bond shall be presented to the Trustee for
appropriate endorsement or 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.
When the Trustee incurs expenses or renders services after the occurrence of an event of
default, the expenses and the compensation for the services are intended to constitute expenses of
administration under any federal or state bankruptcy, insolvency, arrangement, moratorium,
reorganization or other debtor relief law.
Section 7.04. 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 or under any of the
Bonds, may be enforced by the Trustee without the possession of any of the Bonds or the
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production thereof in any trial or other proceeding relating thereto, and any such suit or
proceeding instituted by the Trustee shall be brought in its name as Trustee, without the necessity
of joining as plaintiffs or defendants any Holders of the Bonds hereby secured, and any recovery
of judgment shall be for the equal benefit of the Holders of the Outstanding Bonds, subject to the
provisions of Section 6.02 hereof with respect to extended Bonds and claims for interest.
Section 7.05. Power of Majority of Bondholders. Anything in this Indenture to the
contrary notwithstanding, the Holders of a majority in aggregate principal amount of Bonds
Outstanding hereunder shall have the right, at any time, by an instrument or 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 and the Lease; provided, that such direction shall
not be otherwise than in accordance with the provisions of law and that the Trustee shall be
indemnified as provided in Section 7.06.
Section 7.06. Limitation on Suits by Bondholders. No Holder of any Bond shall have
any right to institute any suit, action or proceeding in equity or at law for the enforcement of this
Indenture or for the execution of any trust hereof or for any other remedy hereunder, unless an
Event of Default has occurred of which the Trustee has been notified or of which it is deemed to
have notice; nor unless the Holders of twenty-five per centum (25%) in aggregate principal
amount of Bonds outstanding hereunder shall have made written request to the Trustee and shall
have offered it reasonable opportunity either to proceed to exercise the powers hereinbefore
granted or to institute such action, suit or proceeding in its own name; nor unless also they shall
have offered to the Trustee indemnity as provided hereinafter; 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 or for any other remedy hereunder; it being understood and
intended that no one or more Holders of the Bonds shall have any right in any manner
whatsoever to affect, disturb, or prejudice the lien of this Indenture by his or their action or to
enforce any right hereunder except in the manner herein provided, and that all proceedings at law
or in equity shall be instituted, had and maintained in the manner herein provided and for the
equal benefit of the Holders of all Bonds outstanding hereunder. Nothing in this Indenture
contained shall, however, affect or impair the right of any Bondholder, which is absolute and
unconditional, to enforce and bring suit for the payment of the principal of and interest on any
Bond at and after the maturity thereof to pay the principal of and interest on each of the Bonds
issued hereunder to the respective Holders thereof at the time and place in said Bonds expressed,
in accordance with the terms of the Bonds.
Section 7.07. Waiver by Bondholders. The Trustee, upon the written request of the
Holders of not less than a majority in 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
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pay the same. In case of any such waiver, the Authority, the Trustee and the Holders of the
Bonds shall be restored to their former positions and rights hereunder respectively. No such
waiver shall extend to any subsequent or other Event of Default or impair any right consequent
thereon.
Section 7.08. Remedies Cumulative, Delay Not To Constitute Waiver. No remedy by
the terms of this Indenture or the Lease, conferred upon or reserved to the Trustee (or to the
Bondholders) 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 Event of Default
shall impair any such right or power or shall be construed to be a waiver of any such Event of
Default or acquiescence therein, and every such right and power may be exercised from time to
time and as often as may be deemed expedient.
No waiver of any Event of Default hereunder, whether by the Trustee or by the
Bondholders, shall extend to or shall affect any subsequent Event of Default or shall impair any
rights or remedies consequent thereon.
Section 7.09. Restoration of Rights Upon Discontinuance of Proceedings. In case the
Trustee or Bondholders 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 the Bondholders, then and in every such case the
Authority, the City, the Trustee and the Bondholders shall be restored to their former positions
and rights hereunder with respect to the Trust Estate, and all rights, remedies and powers of the
Trustee and the Bondholders shall continue as if no such proceedings had been taken.
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ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Acceptance of Trust and Prudent Performance Thereof. The Trustee, prior
to the occurrence 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 and no duties shall be implied. The Trustee shall, during the existence of
any such Event of Default which has not been cured, exercise such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of his or her own
affairs. The Trustee shall not be liable for any action taken or omitted by it in the performance of
its duties under this Indenture except for its own negligence or willful misconduct.
The Trustee shall not be required to take notice or be deemed to have notice of any
Default hereunder, except Default in the deposits or payments specified herein, or failure by the
Authority or the City to file with it any of the documents required, or to deposit with it evidence
of any insurance policies required hereunder or under the Lease, unless the Trustee shall be
specifically notified in writing of such Default by the City, by the Authority or by the Holders of
at least twenty-five per centum (25%) in aggregate principal amount of Bonds outstanding
hereunder, and all notices or other instruments required by this Indenture to be delivered to the
Trustee must, in order to be effective, be delivered at the office of the Trustee, and in the absence
of such notice so delivered, the Trustee may conclusively assume that there is no Default, except
as aforesaid.
No provision of this Indenture shall be construed to relieve the Trustee from liability for
its own negligent action, its own negligent failure to act, or its own willful misconduct, except
that
(a) prior to such 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 Trustee shall be determined solely by the
express provisions of this Indenture, and the Trustee shall not be liable except for the
performance 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
Trustee, and
(2) in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and to the correctness of the opinions
expressed therein, upon any certificate or opinion furnished 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 furnished to the Trustee, the
Trustee shall be under a duty to examine the same to determine whether or not it
conforms in form to the requirements of this Indenture; and
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(b) at all times, regardless of whether or not any such Event of Default shall exist:
(1) the Trustee shall not be liable for any error of judgment made in good faith
by a Responsible Officer or Officers of the Trustee unless it shall be proved that the
Trustee was negligent in ascertaining 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 Holders 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 to incur individual financial liability in the performance 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 May Rely 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, instrument, 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 party or parties;
(b) any request, direction, election, order, certification or demand of the Authority or
the City shall be sufficiently evidenced by an instrument signed by an Authority Representative
or a City Representative, as the case may be (unless otherwise in this Indenture specifically
prescribed), and any resolution of the Authority may be evidenced to the Trustee by a copy
certified by the Executive Director;
(c) the Trustee 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 trusts of this Indenture, the Trustee 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 the part of the Trustee, be deemed
to be conclusively proved and established by a Certificate of the Authority or Certificate of the
City and any such Certificate shall, in the absence of negligence or bad faith on the part of the
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Trustee, be full warrant to the Trustee for any action taken or suffered by it under the provisions
of this Indenture upon the faith thereof.
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 such Bonds), or for the validity of the execution by the
Authority of this Indenture or the validity or execution of 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 otherwise
as to the maintenance of the security hereof; and the Trustee shall not be bound to ascertain or
inquire as to the performance or observance of any covenant, condition or agreement on the part
of the Authority or the City, except as herein set forth, but the Trustee may require of the
Authority and the City full information and advice as to the performance of the covenants,
conditions and agreements aforesaid and of the condition of the physical property 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 permissive right of the
Trustee to do things enumerated in this 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. The Trustee shall be under no obligation to
institute any suit, or to undertake any proceeding under this Indenture, or to enter any appearance
or in any way defend in any suit in which it may be made defendant, or to take any steps in the
execution of the trusts hereby created or in the enforcement of any rights and powers hereunder,
until it shall be indemnified to its satisfaction against any and all costs and expenses, outlays and
counsel fees and other anticipated disbursements, and against all liability except to the extent
determined by a court of competent jurisdiction to have been caused solely by its own negligence
or willful misconduct. Nevertheless, the Trustee may begin suit, or appear in and defend suit, or
do anything else in its judgment proper to be done by it as the trustee, without indemnity, and in
such case the Trustee shall, to the extent not reimbursed by the Authority or the City reimburse
itself from the monies available under this Indenture for all costs and expenses, outlays and
counsel fees and expenses and other reasonable disbursements properly incurred in connection
therewith and the Trustee shall be entitled to a preference therefor over any bonds outstanding
hereunder.
Section 8.05. Money Held in Trust. 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
otherwise agreed with the Authority or the City.
Section 8.06. Obligation of Trustee. The Trustee shall be under no obligation to
institute any suit, or to take any proceeding under this Indenture, or to enter any appearance or in
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any way defend in any suit in which it may be defendant, or to take any steps in the execution of
the trusts hereby created or in the enforcement of any rights and powers hereunder, until it shall
have reasonable grounds for believing 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 Trustee may, nevertheless, begin suit,
or appear in and defend suit, or do anything else in its judgment proper to be done by it as such
Trustee, 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 itself from any moneys in its possession under the
provisions of this Indenture and shall be entitled to a preference therefor over any of the Bonds
or claims for interest outstanding hereunder.
Section 8.07. Notice to Bondholders. The Trustee shall give to the Holders of the Bonds
whose names and addresses are known to it written notice of all Events of Default known to the
Trustee by virtue of actual knowledge of a Responsible Officer, within sixty (60) days after the
occurrence of an Event of Default unless such Event of Default shall have been cured before the
giving of such notice; provided that, except in the case of an Event of Default in the payment of
principal and interest on any of the Bonds, the Trustee shall be protected in withholding such
notice if and so long as its board of directors, an executive committee or trust default committee
or chief executive officer of the Trustee in good faith determines that the withholding of such
notice is in the interest of the Bondholders.
Section 8.08. Intervention in Judicial Proceedings. In any judicial proceeding to which
the Authority or the City is a party and which in the opinion of the Trustee has a substantial
bearing on the interest of owners of Bonds issued hereunder, the Trustee may intervene on behalf
of Bondholders and shall do so if requested in writing by the owners of at least twenty-five
percent (25%) in the aggregate principal amount of Bonds Outstanding hereunder. The rights
and obligations of the Trustee under this Section are subject to the approval of the court having
jurisdiction in the premises.
Section 8.09. Further Investigation by Trustee. The resolutions, opinions, certificates
and other instruments 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, if requested in writing so to do by the Holders of not less than
twenty-five per centum (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 truth and accuracy of the matters so investigated.
Section 8.10. Trustee to Retain Financial Records. The Trustee shall retain all financial
statements and other reports furnished by the Authority or the City in accordance with this
Indenture so long as any of the Bonds shall be Outstanding.
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Section 8.11. Compensation of Trustee. All advances, counsel fees and other expenses
reasonably made or incurred 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 in the amounts set
forth in Exhibit B hereto 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
trust. If not paid by the City, the Trustee shall have a first lien, with right of payment prior to
payment on account of interest or principal of any Bond issued hereunder, for reasonable
compensation, expenses, advances and counsel fees incurred in and about the execution of the
trusts hereby created and exercise and performance of the powers and duties of the Trustee
hereunder and 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 or willful default of the Trustee).
Section 8.12. Trustee May Hold Bonds. The Trustee and its officers and directors may
acquire and hold, 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. Appointment of Trustee. There shall at all times be a trustee hereunder
which shall be a trust company or bank in good standing 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 and surplus 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 referred to, then for the
purposes of this Section the combined capital and surplus of such association or corporation shall
be deemed to be its combined capital and surplus as set forth in its most recent report 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 Trustee. Any corporation or association into which the Trustee
may be converted or merged, or with which it may be consolidated, or to which it may sell or
transfer its trust business and assets as a whole or substantially as a whole, or any corporation or
association, resulting from any such conversion, sale, merger, consolidation or transfer to which
it is a party, ipso facto, shall be and become successor trustee hereunder and vested with all of
the title to the Trust Estate and all the trusts, powers, discretions, immunities, privileges and all
other matters as was its predecessor, without the execution or filing of any instrument or any
further act, deed or conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section 8.15. Resignation or Removal of Trustee. The Trustee may resign and be
discharged from the trusts created by this Indenture by giving to the Authority and the
Bondholders thirty (30) days notice in writing of such resignation, specifying a date when such
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resignation shall take effect. Such resignation shall take effect on the day specified in such
notice, if a successor Trustee has been appointed, or upon such later date as a successor is
appointed. The Authority shall promptly appoint a successor trustee by an instrument in writing.
If at any time the Trustee resigns and no appointment of a successor Trustee is made pursuant
hereto within 45 days after the giving of a notice of resignation, the resigning Trustee may apply
to a court of competent jurisdiction at the expense of the Authority for the appointment of a
successor Trustee. The resigning Trustee shall not be liable for the actions of the successor
Trustee.
Any Trustee hereunder may be removed upon thirty (30) days notice in writing by an
instrument or instruments in writing, appointing a successor to the Trustee so removed, filed with
the Trustee and executed by either (i) the Authority or (ii) the Holders of a majority in principal
amount of the Bonds hereby secured and then Outstanding.
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 forthwith and ipso facto be created in the office of such Trustee hereunder, and a
successor may be appointed by either (i) the Authority or (ii) the Holders 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 such Bondholders, notification
thereof being given to the Authority, but in the event the Trustee has been removed by action of
the Bondholders, until a new Trustee shall be appointed by the Bondholders as herein authorized,
the Authority may, subject to the provisions hereof, appoint a Trustee to fill such vacancy. After
any appointment by the Authority, in the event the Trustee has been removed by action of the
Bondholders, the Trustee so appointed shall cause notice of its appointment to be mailed within
30 days of such appointment to the registered Holders of the Bonds, but any new Trustee so
appointed by the Authority shall immediately and without further act be superseded by a Trustee
appointed in the manner above provided by the Holders of a majority in principal amount of said
Bonds whenever such appointment by said Bondholders shall be made.
If, in a proper case, no timely appointment of a successor Trustee shall be made pursuant
to the foregoing provisions the Holder of any Bond hereby secured or any retiring Trustee may
apply to any court of competent jurisdiction to appoint a successor trustee. Said court may
thereupon, after such notice, if any, as such court may deem proper and prescribe, appoint a
successor trustee.
Section 8.17. Transfer of Rights and Property to Successor Trustee. Every successor
trustee appointed hereunder shall execute, acknowledge and deliver to its predecessor and also to
the Authority 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, properties, rights, powers, trusts, duties and obligations of its predecessor; but such
predecessor shall, nevertheless, on the written request of the Authority or of its successor execute
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and deliver an instrument transferring to such successor all the estate, properties, rights, powers
and trusts of such predecessor hereunder, and every predecessor trustee shall deliver all securities
and moneys 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 certainly 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 instruments
removing any Trustee and appointing a successor hereunder, together with all assignments,
conveyances and other instruments provided for in this Article shall, at the expense of the City,
be forthwith filed and/or recorded by the successor trustee in each recording office where the
Indenture shall have been filed and/or recorded.
Section 8.18. Appointment of Successor or Alternate Paying Agents. In the event the
initial Trustee shall also have been appointed paying agent for the Series 2017A Bonds or for any
Additional Bonds, a successor Trustee shall become successor paying agent with respect to such
Bonds unless otherwise provided in the instrument appointing such successor Trustee. If any
paying agent other than the initial Trustee shall resign or become incapable of acting, or shall be
removed under a supplemental indenture entered into pursuant to the terms hereof, the Trustee
may appoint a successor paying agent which is a bank or trust company qualified to act as paying
agent under the laws of the State of Minnesota and which is willing to accept the office on
reasonable and customary terms approved by an Authority Representative. The Trustee may
appoint successor paying agents. “Paying agent” as used in this Section refers to the bank or
trust company named in the form of Bond provided for the Series 2017A Bonds in the recitals
hereof, or provided for Additional Bonds in a supplemental indenture, where principal of and
interest on Bonds may be paid.
Section 8.19. Indemnification. To the extent authorized by law, the Authority shall
indemnify and hold harmless the Trustee against any and all loss, damage, claims, expense and
liability arising out of or in connection with the acceptance of administration of the trust or trusts
hereunder, including the costs and expenses of defending itself against any claim (whether
asserted by the Authority, any Holder or any other person) or liability in connection with the
exercise or performance of any of its powers or duties hereunder except to the extent that such
loss, damage, claim, expense or liability is determined by a court of competent jurisdiction to
have been caused solely by Trustee’s gross negligence or willful misconduct.
Section 8.20. Notice of Default. The Trustee shall not be required to take notice or be
deemed to have notice of any default, except failure by the Authority to cause to be made any of
the payments to the Trustee required by Section 6.01, unless the Trustee shall be notified of such
default in writing by the Authority or by the Holders of a majority in aggregate principal amount
of the bonds then outstanding and all notices required to be delivered to the Trustee must, in
order to be effective, be delivered at the designated corporate trust office of the Trustee and, in
the absence of such notice so delivered, the Trustee may conclusively assume there is no default
except as aforesaid.
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Section 8.21. Agents. The Trustee may execute any of the trusts or powers hereof and
perform any of its duties by or through attorneys, agents, receivers or employees and the Trustee
shall not be responsible for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder and may in all cases pay reasonable compensation to all
such attorneys, agents, receivers and employees as may reasonably be employed in connection
with the trust hereof.
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ARTICLE IX
CONCERNING THE BONDHOLDERS
Section 9.01. Execution of Instruments by Bondholders. Any request, direction, consent
or other instrument in writing required by this Indenture to be signed or executed by
Bondholders may be in any number of concurrent instruments of similar tenor and may be signed
or executed by such Bondholders 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 manner:
(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 to him the execution thereof, or by an affidavit of
a witness to such execution.
(b) The ownership of Bonds shall be proved by the registration books 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 otherwise to the Bondholders or any one 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 Holder or Holders of all of the
Bonds entitled to such notice or communication.
Section 9.03. Determination of Bondholder Concurrence. In determining whether the
Holders of the requisite aggregate principal amount of Bonds have concurred 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 determination; 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 shall establish 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.
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Section 9.04. Bondholders’ Meeting. A meeting of the Bondholders 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 Event of Default hereunder and its consequences, or to take any other
action authorized to be taken by Bondholders pursuant to any of the provisions of Article
VII hereof;
(2) to remove the Trustee or appoint a successor Trustee pursuant to the
provisions of Article VIII hereof;
(3) subject to Article XI hereof, to consent to the execution of an indenture or
indentures supplemental hereto;
(4) subject to Article XII hereof, to consent to any amendment of the Lease or
to any instrument supplemental to the Lease; or
(5) to take any other action authorized to be taken by or on behalf of the
Holders of any percentage of the Outstanding Bonds under any other provisions of this
Indenture or under applicable law.
Any Bondholders’ meeting may be called and held as follows:
(a) A meeting of Bondholders 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
Bondholders calling the meeting shall prescribe.
(b) Notice of every meeting of Bondholders, setting forth 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, not less than 20 nor more than 180 days prior to the date fixed for the meeting,
to each owner of Bonds. 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, pursuant to a resolution, or the Holders 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 Bondholders, by written request setting forth in
reasonable detail the action proposed to be taken at the meeting, and the Trustee shall not have
given the notice of such meeting within 20 days after receipt of such request, then the Authority
or the Holders 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 a Holder of one or more Bonds or a person appointed as proxy by an
instrument in writing of such Holder shall be entitled to vote at or to participate with their
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counsel and the representatives of the Trustee and the Authority in such meeting. Each Holder
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 or Bondholders calling
or requesting the meeting, may make such reasonable regulations as it may deem advisable for
any meeting of Bondholders 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
examination 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 Bondholders, the presence of persons owning 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 Bondholders duly called pursuant to this Section may be adjourned
from time to time by vote of the Holders (or proxies for the Holders) 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 further notice.
(g) The vote upon any resolution submitted to any meeting of Bondholders shall be
by written ballots on which shall be subscribed the signatures of the Holders of Bonds or of their
representatives by proxy and the serial number or numbers 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 written reports in duplicate of all votes cast at the meeting. A record,
at least in duplicate, of the proceedings of each meeting of Bondholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original reports of the
inspectors of votes on any vote by ballot taken thereat 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 Authority and one copy to the Trustee 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 by Bondholders. At any time prior to (but not after) the
evidencing to the Trustee of the taking of any action by the Holders of the percentage in
aggregate principal amount of the Bonds specified in this Indenture in connection with such
action, any Holder of a Bond may, by filing written notice with the Trustee at its principal office,
revoke any consent given by such Holder or the predecessor Holder of such Bond. Except as
aforesaid, any such consent given by the Holder of any Bond shall be conclusive and binding
upon such Holder and upon all future Holders and owners of such Bond and of any Bond issued
in exchange therefor or in lieu thereof, irrespective of whether or not any notation in regard
thereto is made upon such Bond. Any action taken by the Holders of the percentage in aggregate
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principal amount of the Bonds specified in this Indenture in connection with such action shall be
conclusively binding upon the Authority, the Trustee and the Holders of all the Bonds.
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ARTICLE X
PAYMENT, DEFEASANCE AND RELEASE
Section 10.01. Payment and Discharge of Indenture. If the Authority, its successors or
assigns, shall, in accordance with the Lease and this Indenture,
(a) pay or 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 government securities of the type permitted by Minnesota Statutes,
Section 475.67, subd. 8, the principal and interest on which when due and payable 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 surrendered or to be surrendered to it for
cancellation has been given or waived as provided in Article III hereof, or that arrangements
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 under its official seal 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 Holders of all of such
Outstanding 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 Article III, the entire amount of the redemption
price, including accrued interest, and premium, if any, either in cash or in government securities
of the type permitted by Minnesota Statutes, Section 475.67, subd. 8, 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, or
(d) 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,
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 of the
owners of the Bonds shall thereupon cease, determine and become void; and the Trustee in such
case, upon the cancellation of all Bonds for the payment of which cash or securities shall not
have been deposited in accordance with the provisions of this Indenture, shall, upon receipt of a
written request of the Authority, and at its cost and expense, execute to the Authority, or its
order, proper instruments 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
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than cash or securities for the payment of the Bonds and interest thereon), which shall then be
held hereunder as a part of the Trust Estate.
In case of any discharge of the lien of the Indenture pursuant to paragraphs (b) or (c)
above, there shall be submitted to the Trustee (i) an Opinion of Counsel, which opinion may be
based upon a ruling or rulings of the Internal Revenue Service, to the effect that the interest on
the Bonds being discharged will not become includable in gross income for federal income tax
purposes, notwithstanding the discharge of the Indenture, and that all requirements of the Lease
and Indenture for the defeasance of the Bonds have been complied with and (ii) if the defeasance
escrow is not gross funded or is to be used in an advance refunding, a report in form and
substance acceptable to the Trustee of an independent accountant to the effect that the payment
when due of the principal of and the interest on the government securities of the type permitted
by Minnesota Statutes, Section 475.67, subd. 8, deposited with the Trustee will provide, together
with any other moneys which shall have been deposited with the Trustee for such purpose,
sufficient moneys to pay all principal and interest on the Outstanding Bonds when due.
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 forth in clauses (a), (b), (c) or
(d) above, as the same would apply to the particular series of Bonds being discharged.
The Authority shall pay and indemnify the Trustee against any tax, fee or other charge
imposed or assessed against deposited United States government obligations or the principal and
interest received on such securities.
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 purpose, cash or government
securities of the type permitted by Minnesota Statutes, Section 475.67, subd. 8, the principal and
interest on which shall be sufficient to pay the principal of any Bonds when the same 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 or to the date fixed for redemption,
for the use and benefit of the Holders 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 Holders
of such Bonds, and from and after such date, redemption date or maturity, interest on such Bonds
thereof called for redemption shall cease to accrue.
Section 10.03. Unclaimed Money to be Returned. Any moneys deposited with the
Trustee pursuant to the terms of this Indenture, for the payment or redemption of Bonds, and the
payment of interest and redemption premium with respect thereto, and remaining unclaimed by
the Holders of the Bonds for a period of two years and eleven months after the due date or the
date fixed for redemption of the same, as the case may be, shall, upon the written request of the
Authority, and 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
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respect to any of the terms and conditions contained in the Indenture or in the Bonds, be paid to
the Authority, and such Holders of the Bonds shall thereafter look only to the Authority, for
payment and then only to the extent of the amounts so received without interest thereon.
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ARTICLE XI
SUPPLEMENTAL INDENTURES
Section 11.01. Purposes for Which Supplemental Indentures May be Executed. The
Authority, upon resolution, and the Trustee from time to time and at any time, subject to the
conditions and restrictions in this Indenture contained, may enter into such indentures
supplemental hereto as may or shall by them be deemed necessary or desirable without the
consent of any Bondholder for any one or more of the following purposes:
(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 unto the Trustee, subject to such liens or other
encumbrances as shall be therein specifically described, additional property or properties of the
Authority or the City for the equal and proportional benefit and security of the Holders and
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
contained other covenants and agreements thereafter to be observed, or to surrender any right or
power reserved to or conferred upon the Authority or to or upon any successor;
(c) To evidence the succession or successive successions of any other department,
agency, body or corporation to the Authority and the assumption by such successor of the
covenants, agreements and obligations of the Authority in the Bonds hereby secured and in this
Indenture and in any and every supplemental indenture contained or the succession, removal or
appointment of any trustee or paying agent hereunder;
(d) To cure any ambiguity or to correct 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 necessary 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 any similar Federal statute hereafter enacted, and to add to this
Indenture such other provisions as may be expressly permitted by said Trust Indenture Act of
1939, excluding, however, the provisions referred to in Section 316(a)(2) of said Trust Indenture
Act of 1939; and
(f) To provide for the issuance of Additional Bonds pursuant to this Indenture.
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Section 11.02. Execution of Supplemental Indenture. The Trustee is authorized to join
with the Authority in the execution of any such supplemental indenture, to make the further
agreements and stipulations which may be therein contained, and accept the conveyance, transfer
and assignment of any property 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. In executing any amendment or supplemental indenture, the Trustee shall receive and
will be fully protected in conclusively relying upon an officers’ certificate and an opinion of
counsel stating that the execution of such amendment of supplemental indenture is authorized
and permitted by this Indenture and is the legal, valid and binding obligation of the Authority
enforceable against it in accordance with its terms.
Section 11.03. Discretion of Trustee. In each and every case provided for in this Article
(other than a supplemental indenture approved by the Holders of not less than a majority in
aggregate principal amount of the Bonds pursuant to Section 11.04 hereof), the Trustee shall be
entitled to exercise its unrestricted 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 Holders 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 Holder of any 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 Article, in
the exercise of such discretion.
Section 11.04. Modification of Indenture with Consent of Bondholders. Subject to the
terms and provisions contained in this Section, the Holders 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 particular, any of
the terms or provisions contained in this Indenture or in any supplemental indenture; provided,
however, that, notwithstanding any other provision of this Indenture, nothing herein contained
shall permit or be construed as permitting, without the consent of the Holders of all Outstanding
Bonds affected thereby, (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 other Bond or Bonds, or (e) a reduction in the aggregate principal amount of the
Bonds required to consent to supplemental indentures or amendments to the 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 Bondholders adopted
at a Bondholders’ meeting approved by, or an instrument or instruments purporting to be
executed by, the Holders of not less than a majority in aggregate principal amount of the Bonds
then outstanding, which resolution or instrument or instruments shall refer to the proposed
supplemental indenture and shall specifically consent to and approve the execution thereof,
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thereupon, the Authority and the Trustee may execute such supplemental indenture without
liability or responsibility to any Holder of any Bond, whether or not such Holder shall have
consented thereto.
If the Holders 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 Holder 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 the execution thereof, or to enjoin or restrain the Trustee or the Authority from
executing the same or from taking any action pursuant to the provisions thereof.
Section 11.05. Supplemental Indentures to be Part of Indenture. Any supplemental
indenture executed in accordance with any of the provisions of this Article shall thereafter form a
part of this Indenture; and all the terms and conditions contained in any such supplemental
indenture as to any provisions authorized to be contained therein shall be and be deemed to be
part of the terms and conditions of this Indenture for any and all purposes, and the respective
rights, duties and obligations under this Indenture of the Authority, the Trustee and all Holders of
Bonds then Outstanding shall thereafter be determined, exercised and enforced hereunder,
subject in all respects to such modifications and amendments. If deemed necessary or desirable
by the Trustee, reference to any such supplemental indenture or any of such terms or conditions
thereof may be set forth in reasonable and customary manner in the text of the Bonds or in a
legend stamped on the Bonds.
Section 11.06. Rights of City Unaffected. Anything herein to the contrary
notwithstanding, a supplemental indenture under this Article XI which adversely affects the
rights of the City under the Lease, so long as the Lease is in effect, shall not become effective
unless and until the City consents to the execution and delivery of such supplemental indenture.
The Trustee 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 30 days
prior to the proposed date of execution and delivery of any such supplemental indenture.
Section 11.07. Rights of Authority. The Authority has no duty or obligation to consent to
any supplemental indenture or other instrument amending the terms hereof 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 to this Indenture.
Section 11.08. Notice to Rating Agencies. The Authority will send by certified mail, or
overnight delivery service, to any rating agency then maintaining a rating on the Bonds, a copy
of any proposed supplemental indenture not less than 20 Business Days prior to its proposed
execution or adoption.
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ARTICLE XII
AMENDMENTS TO THE LEASE
Section 12.01. Amendments to the Lease Not Requiring Consent of Bondholders. The
Authority, the City and the Trustee may, without the consent of or notice to the Bondholders,
consent to any amendment, change or modification of the Lease as may be required (i) by the
provisions of the Lease and this Indenture, (ii) in connection with the issuance of Additional
Bonds as provided herein, (iii) in connection with the financing of any additions or expansions of
the Improvements, so long as such amendments do not affect the obligation of the City to make
Rental Payments as they become due and payable, (iv) for the purpose of curing any ambiguity
or formal defect or omission, or (v) in connection with any other change therein which is not to
the prejudice of the Trustee or the Holders of the Bonds.
Section 12.02. Amendments to Lease Requiring Consent of Bondholders. Except for the
amendments, changes or modifications as provided in Section 12.01 hereof, neither the Authority
nor the Trustee shall consent to any other amendment, change or modification of the Lease
without the written approval or consent of the Holders 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 Rental Payments as they become due and payable. If the
Holders 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 Holder of any Bond shall
have any right to object to any of the terms and provisions contained therein, or in the operation
thereof, or in any manner to question the propriety of the execution thereof, or to enjoin or
restrain the Trustee, the Authority or the City from executing the same or from taking any action
pursuant to the provisions thereof.
Section 12.03. Rights of Authority. The Authority has no duty or obligation to consent to
any proposed amendment to the 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 to the Lease.
Section 12.04. Notice to Rating Agencies. The Authority will send by certified mail, or
overnight delivery service, to any rating agency then maintaining a rating on the Bonds, a copy
of any proposed amendment to the Lease not less than twenty (20) Business Days prior to its
proposed execution or adoption.
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ARTICLE XIII
RESERVED
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ARTICLE XIV
MISCELLANEOUS
Section 14.01. Rights in Authority are Held Solely for Benefit of Bondholders. All
rights, title and interest created in the Authority pursuant to the Lease are held by the Authority
solely for the benefit of the Owners of the Bonds issued pursuant to this Indenture, and are not
created in the Authority in its individual capacity or for its own account or benefit for any reason
whatsoever. All such rights, title and interest have been irrevocably and absolutely assigned and
conveyed in their entirety to the Trustee for the benefit of the Owners of the Bonds issued
pursuant to this Indenture.
Section 14.02. 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 14.03. Immunity 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 from, 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 Board of Commissioners of the Authority, the Authority, the
City 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 of the Bonds.
Section 14.04. 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 and the Authority, the parties hereto and the Holders of the Bonds issued
hereunder, any right, remedy or claim under or by reason of this Indenture or covenant, condition
or stipulation thereof; and the covenants, stipulations and agreements in this Indenture contained
are and shall be for sole and exclusive benefit of the City and the Authority, the parties hereto,
their successors, and the Holders of the Bonds.
Section 14.05. Separability of Indenture Provisions. In case any one 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 14.06. Execution of Indenture in Counterparts. This Indenture may be
simultaneously executed in several counterparts, each of which, when so executed, shall be
deemed to be an original, and such counterparts shall together constitute one and the same
instrument.
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Section 14.07. Headings Not Controlling. The headings of the several Articles and
Sections hereof are inserted for the convenience of reference only and shall not control or affect
the meaning or construction of any of the provisions hereof.
Section 14.08. Notices etc., to Trustee, Authority and City. Any request, demand,
authorization, direction, notice, consent of Bondholders or other document provided or permitted
by this Indenture shall be sufficient for any purpose under this Indenture or the Lease, when
mailed certified mail, return receipt requested, 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 party by notice) and shall be deemed to be effective upon receipt:
To the Trustee: U.S. Bank National Association
60 Livingston Avenue, 3rd Floor
EP-MN-WS3C
St. Paul, MN 55107
Attention: Corporate Trust Services
To the Authority: Housing and Redevelopment Authority
of the City of Lakeville
20195 Holyoke Ave.
Lakeville, Minnesota 55044
Attn: Executive Director
To the City: City of Lakeville
20195 Holyoke Ave.
Lakeville, Minnesota 55044
Attn: Finance Director
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4837-0101-6399\1
IN WITNESS WHEREOF, the Housing and Redevelopment Authority of the City of
Lakeville, by its Board of Commissioners, has caused this Indenture to be signed in its name by
its Chair and Executive Director, and U.S. Bank National Association, as Trustee, to evidence its
acceptance of the trust hereby created, has caused this Indenture to be signed in its name by an
authorized officer of the Trustee, all as of the day and year first above written.
HOUSING AND REDEVELOPMENT
AUTHORITY OF THE CITY OF LAKEVILLE
By
Chair
Attest
Executive Director
STATE OF MINNESOTA )
) ss.
COUNTY OF DAKOTA )
This instrument was acknowledged before me on ______________, 2017, by Bart Davis
and Justin Miller, the Chair and Executive Director, respectively, of the Housing and
Redevelopment Authority of the City of Lakeville, Minnesota, a Minnesota political subdivision,
on behalf of the political subdivision.
Notary Public
(SEAL)
[Signature Page – Trust Indenture]
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4837-0101-6399\1
U.S. BANK NATIONAL ASSOCIATION
as Trustee
By
Its
STATE OF MINNESOTA )
) ss.
COUNTY OF __________ )
This instrument was acknowledged before me on ______________, 2017, by
_______________________, the _____________________ of U.S. Bank National Association,
a national banking association, on behalf of the national banking association.
Notary Public
(SEAL)
[Signature Page – Trust Indenture]
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EXHIBIT A
FORM OF SERIES 2017A BOND
UNITED STATES OF AMERICA
STATE OF MINNESOTA
HOUSING AND REDEVELOPMENT AUTHORITY
OF THE CITY OF LAKEVILLE, MINNESOTA
LEASE REVENUE LIQUOR ENTERPRISE REFUNDING BONDS, SERIES 2017A
R-________ $__________
Rate Maturity Date of Original Issue CUSIP
_____% February 1, 20__ November [__], 2017
REGISTERED OWNER: CEDE& CO.
PRINCIPAL AMOUNT: THOUSAND DOLLARS
THE HOUSING AND REDEVELOPMENT AUTHORITY OF THE CITY OF LAKEVILLE,
MINNESOTA, a public body corporate and politic of the State of Minnesota (the Authority), for value
received, hereby promises to pay to the registered owner named above, or registered assigns, solely from
the sources hereinafter identified, the principal amount set forth above on the maturity date specified
above, 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 specified above or from 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 [February 1, 2018], until said principal amount is
paid, subject to redemption of this Bond prior to its scheduled maturity. Interest shall be computed on the
basis of a three hundred sixty (360) day year composed of twelve (12) thirty (30) day months and shall be
payable to the person in whose name this Bond is registered at the close of business on the fifteenth day
(whether or not a Business Day) of the month preceding such Interest Payment Date at such person's
address set forth on the registration books maintained by the Trustee hereinafter designated. The interest
hereon and, upon presentation and surrender at the principal office of the agent of the Trustee described
below, the principal hereof are payable in lawful money of the United States of American by check or
draft drawn on U.S. Bank National Association, St. Paul, Minnesota, as trustee designated under the Trust
Indenture referred to below (the Trustee). Any such interest not punctually paid or provided for will
cease to be payable to the registered owner as of a regular record date and such defaulted interest may be
paid to the person in whose name this Bond shall be registered at the close of business on a special record
date for the payment of such defaulted interest established by the Trustee pursuant to such Indenture.
Notwithstanding any other provisions of this Bond, so long as this Bond is registered in the name
of Cede & Co., as nominee of The Depository Trust Company, or in the name of any other nominee of
The Depository Trust Company or other securities depository, the Trustee shall pay all principal of and
interest on this Bond, and shall give all notices with respect to this Bond, only to Cede & Co. or other
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nominee in accordance with the operational arrangements of The Depository Trust Company or other
securities depository as agreed to by the Authority.
This Bond is issued under Minnesota Statutes, Chapters 465, 469, 471 and Chapter 475, as
amended, and in conformity with the provisions, restrictions and limitations thereof. This Bond does not
constitute an indebtedness of the Authority, the City of Lakeville, Minnesota (the City), the State of
Minnesota (the State) or any other political subdivision within the meaning of any state constitutional
provision or statutory limitation, nor does this Bond give rise to a charge against the general credit or
properties or taxing powers of the Authority, the City, the State or other political subdivision and does not
grant to the registered owner of this Bond any right to have the Authority, the City, the State or other
political subdivision levy any taxes or appropriate any funds for the payment of the principal hereof or
interest hereon, nor is this Bond a general obligation of the Authority, the City, the State or other political
subdivision or the individual officers or agents thereof. This Bond and interest hereon are payable solely
and only from the moneys received under the Lease (as hereinafter defined), or held by the Trustee in a
Fund appropriated to the payment of the Bonds of this series under the Indenture (as hereinafter defined),
including Rental Payments to be made by the City under such Lease.
This Bond is one of a duly authorized series of special obligation Bonds of an aggregate principal
amount of $[__________] (the Series 2017A Bonds), all of which have been authorized by law to be
issued and have been issued or are to be issued for the purpose of refunding prior bonds of the City and
refinancing the costs of acquiring, constructing and furnishing real property and municipal liquor store
improvements thereon which are to be leased to the City by the Authority pursuant to a Lease-Purchase
Agreement dated as of November 1, 2017 (the Lease), between the Authority, as lessor, and the City, as
lessee. The Bonds of this series are issued pursuant to a Bond Resolution of the Authority duly adopted
[September 18, 2017], and a Trust Indenture dated as of November 1, 2017 (the Indenture), duly executed
and delivered by the Authority to the Trustee. The Bonds of this series are equally and ratably secured by
the Lease, the Indenture and the Bond Resolution, to which Lease, Indenture and Bond Resolution and
amendments thereof reference is hereby made for a description and limitation of the revenues pledged to
secure the payment of the Bonds, the nature and extent of the security thereby created, the rights of the
registered owners of the Bonds, the rights, duties and immunities of the Trustee, and the rights,
immunities and obligations of the Authority thereunder. The obligation of the City under the Lease to
make Rental Payments sufficient to pay the principal of and interest on the Bonds when due is a
limited obligation of the City, subject to the annual appropriation in each fiscal year by the City
Council of funds sufficient to pay such Rental Payments. The City is not obligated to make any
such appropriation and has the right to cancel and terminate the Lease at the end of any fiscal year
of the City if the City Council does not appropriate moneys sufficient to pay the Rental Payments
coming due in the next fiscal year. Certified copies of the Bond Resolution and executed counterparts
of the Indenture and Lease are on file at the principal corporate trust office of the Trustee.
The Series 2017A Bonds maturing in 2026 and later years are subject to redemption at the option
of the Authority, on February 1, 2025 and on any day thereafter, in whole or in part in integral multiples
of $5,000, and if in part in such order of maturity dates as the Authority may determine and by lot or other
manner deemed fair as to Series 2017A Bonds maturing on the same date, at a redemption price equal to
the principal amount thereof to be redeemed plus accrued interest to the redemption date. The Series
2017A Bonds are subject to redemption prior to their maturity, on any date, upon certain events of
damage, destruction and condemnation described in the Lease.
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The Series 2017A Bonds maturing in 20[__] are subject to mandatory sinking fund redemption at
a redemption price equal to the principal amount thereof to be redeemed plus accrued interest to the
redemption date, on February 1 in the years and amounts set forth in the Indenture.
Notice of any such redemption shall be published if, and to the extent, then required by law, and
shall also be given to the registered owner of each Bond to be redeemed by first-class mail, addressed to
such owner at the owner's registered address, not earlier than ninety (90) days nor later than thirty (30)
days prior to the date fixed for redemption. On or prior to the date fixed for redemption, funds are
required to be deposited with the Trustee sufficient to pay the Bonds called and accrued interest thereon.
Upon the happening of the above conditions, Bonds thus called shall not bear interest after the redemption
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 books of the Authority kept at
the principal office of the agent of the Trustee by the registered owner hereof in person or by the owner's
duly authorized attorney, upon surrender of this Bond for transfer at the principal corporate trust office of
the Trustee, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to
the Trustee duly executed by the registered owner hereof or the owner's duly authorized attorney, and,
upon payment of any tax, fee or other governmental charge required to be paid with respect to such
transfer, one or more fully registered Bonds of this series of the same principal amount and interest rate
will be issued to the designated transferee or transferees.
The Series 2017A Bonds are issuable only as fully registered bonds without coupons in
denominations of $5,000 or any integral multiple thereof of single maturities. As provided in the
Indenture and subject to certain limitations therein set forth, the Bonds of this series are exchangeable for
a like aggregate principal amount of Bonds of this series of a different authorized denomination, as
requested by the registered owner or the owner's duly authorized attorney upon surrender thereof to the
Trustee at its principal corporate trust office.
IT IS HEREBY CERTIFIED AND RECITED 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.
This Bond shall not be valid nor become obligatory for any purpose under the Indenture until it
shall have been authenticated by the execution of the Certificate hereon endorsed by the manual signature
of an authorized representative of the Trustee.
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4837-0101-6399\1
IN WITNESS WHEREOF, the Housing and Redevelopment Authority of the City of Lakeville,
Minnesota, by its Board of Commissioners, has caused this Bond to be executed in its name by the
facsimile signatures of its Chair and Executive Director.
HOUSING AND REDEVELOPMENT AUTHORITY
OF THE CITY OF LAKEVILLE, MINNESOTA
Chair
Executive Director
________________
CERTIFICATE OF AUTHENTICATION
This is one of the Bonds described in the within mentioned Indenture.
Date:_______________
U.S. BANK NATIONAL ASSOCIATION,
as Trustee
By
Authorized Representative
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The following abbreviations, when used in the inscription on the face of this Bond, shall be
construed as though they were written out in full according to the applicable laws or regulations:
TEN COM --as tenants in common UTMA ………….…. as Custodian for ………….…..
(Cust) (Minor)
TEN ENT --as tenants by the entireties under Uniform Transfers to Minors Act ...................……..
(State)
JT TEN --as joint tenants with right of survivorship and not as tenants in common
Other abbreviations may also be used.
________________
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
______________________________________________________________________ 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:_______________________
Please Insert 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 particular, without alteration,
enlargement or and change whatever.
SIGNATURE GUARANTEED:
Signature(s) must be guaranteed by an "eligible
guarantor institution" meeting the requirements of the
Trustee, which requirements include membership or
participation in STAMP or such other "signature
guaranty program" as may be determined by the
Trustee in addition to or in substitution for STAMP,
all in accordance with the Securities Exchange Act of
1934, as amended.
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EXHIBIT B
COSTS OF ISSUANCE EXPENSES AND TRUSTEE FEES
Cost of Issuance Amount
TOTAL $